8/9/2019 Mutuality of Contracts - Garcia v. Rita Legarda Inc.

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GARCIA v. LEGARDA

grace period already given, still unable to pay, puts the blame on other party

Mutuality of Contract

DOCTRINE:

Stipulations allowing a party to cancel or rescind do not militate against the mutuality ofcontracts

- when the contract expressly provides that one of the contracting parties is authorized to

cancel the same contract, the agreement is ust being ful!lled"

FACTS:

- #etitioner $arcia is engaged in % contracts with respondent to purchase % parcels of

land &'() s*uare meters each+ payable through installment"- espondent ita egarda .nc" cancelled the % contracts"- #etitioners instituted a civil case against the respondent to have the % contracts

declared as existing and subsisting

- /ccording to respondent, petitioners weren0t able to pay all of the installments underthe % contracts which is why respondent cancelled the contract"

- #etitioners denied they were indebted to the % contracts which is why they wished to

have the % contracts declared as still subsisting"- #etitioners said that the respondent0s cancellation of the % contracts was in violation

of /rt" '%)123he contract must bind both contracting parties4 its validity or compliance cannot be

left to the will of one of them"- espondents contention2 the reason for their cancelling of the % contracts was

because there was a stipulation in the contracts that gives the petitioner a certain '

month grace period in case the petitioner wouldn0t be able to pay the installments in

due time" .f the petitioner is still unable to pay after the ' month grace period, an

additional period of 5) days is given" .f the petitioner is still unable to pay after thelapse of the grace period and the additional 5) days, the respondent has the right to

declare the contract cancelled &said stipulation is found under Paragraph 6 of the

contract just in case Mison asks)

ISSUE:

6as the stipulation aragraph 7 of the contracts wherein the respondent0s contention relied

upon+ violative of /rt" '%)1 of the 8CC98:

RATIO:

/rt" '%)12 3he contract must bind both contracting parties4 its validity or compliance

cannot be left to the will of one of them"

3he above provision0s ultimate purpose is to render void a contract containing a

condition which mae! it! "#$%$$ment de&endent e'c$#!ive$( upon the

uncontrolled will of one of the contracting parties.

3he stipulation in *uestion merely gives the vendor the right to declare the contract

cancelled"

8/9/2019 Mutuality of Contracts - Garcia v. Rita Legarda Inc.

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It doe! not $eave the va$idit( or com&$iance o" the contract entire$( "to the

will of one of the contracting parties"

3he stipulation or agreement simply says that in case of default in the payment of

installments by the vendee, he shall have (1) "a month of grace", and that &;+ should

said month of grace expire without the vendee paying his arrears, he shall have

another "period of 9 da!s"to pay y 3ieng #o+

.n the case at bar, when respondent ita egarda .nc" cancelled the contract, it wasmerely ful!lling its part of the agreement" .t was the petitioners that did not do their

part of the bargain being unable to pay the installments on due time"

Moral of the case2 >ung anong nasa ?ontrata, sundin" May grace period na nga

e"""ayan, na hasslebeans pa sa pag !le ng ?aso"