article 1191.docx

All materials on our website are shared by users. If you have any questions about copyright issues, please report us to resolve them. We are always happy to assist you.
 110 views
of 2

Please download to get full document.

View again

Description
G.R. No. 190080 June 11, 2014 GOLDEN VALLEY EXPLORATION, INC., Petitioner, vs. PINKIAN MINING COMPANY and COPPER VALLEY, INC., Respondents. In reciprocal obligations, either party may rescind the contract upon the other’s substantial breach of the obligation/s he had assumed thereunder. The basis therefor is Article 1191 of the Civil Code which states as follows: Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not compl
Share
Tags
Transcript
  G.R. No. 190080 June 11, 2014   GOLDEN VALLEY EXPLORATION, INC.,  Petitioner,  vs. PINKIAN MINING COMPANY and COPPER VALLEY, INC.,  Respondents. In reciprocal obligations, either party may rescind the contract upon the other’s substantial breach of the obligation/s he had assumed thereunder. The basis therefor is  Article 1191 of the Civil Code which states as follows:  Art. 1191 . The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him. The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible. The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period. This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with Articles 1385 and 1388 and the Mortgage Law.  As a general rule, the power to rescind an obligation must be invoked judicially and cannot be exercised solely on a party’s own judgment that the other has committed a  breach of the obligation. 26  This is so because rescission of a contract will not be permitted for a slight or casual breach, but only for such substantial and fundamental  violations as would defeat the very object of the parties in making the agreement. 27   As a  well-established exception, however, an injured party need not resort to court action in order to rescind a contract when the contract itself provides that it may be revoked or cancelled upon violation of its terms and conditions [J]udicial intervention is necessary not for purposes of obtaining a judicial declaration rescinding a contract already deemed rescinded by virtue of an agreement providing for rescission even without judicial intervention, but in order to determine whether or not the rescission was proper. 40  (Emphases and underscoring supplied) Casio V. Ca, G.R. No. 133803, September 16, 2005.   As we once said in University of the Philippines v. De los Angeles,  [20]   involving the question of whether the injured party may consider the contract as rescinded even  before any judicial pronouncement has been made to that effect: xxx the party who deems the contract violated may consider it resolved or rescinded, and act accordingly, without previous court action,  but it proceeds at its own risk. For it is only the final judgment of the corresponding court that will conclusively and finally settle whether the action taken was or was not correct in law. But the law definitely does not require that the contracting party who believes itself injured must first file suit and wait for a judgment before taking extrajudicial steps to protect its interest. Otherwise, the party injured by the others breach will have to passively sit and watch its damages accumulate during the pendency of the suit until the final judgment of rescission is rendered when the law  itself requires that he should exercise due diligence to minimize its own damages xxx.  We see no conflict between this ruling and the previous  jurisprudence of this Court invoked by respondent declaring that judicial action is necessary for the resolution of a reciprocal obligation; (Ocejo, Perez & Co. v. International Banking Corp., 37 Phil. 631; Republic v. Hospital de San Juan de Dios, et al., 84 Phil. 820) since in every case  where the extrajudicial resolution is contested only the final award of the court of competent jurisdiction can conclusively settle whether the resolution was proper or not. It is in this sense that judicial action will be necessary, as without it, the extrajudicial resolution will remain contestable and subject to judicial invalidation, unless attack thereon should become barred by acquiescence, estoppel or prescription.
Related Search
We Need Your Support
Thank you for visiting our website and your interest in our free products and services. We are nonprofit website to share and download documents. To the running of this website, we need your help to support us.

Thanks to everyone for your continued support.

No, Thanks