Case Digest (G.R. No. L-12647)
Facts:
In Spouses Alexander and Julie Lam v. Kodak Philippines, Ltd. (G.R. No. 167615, January 11, 2016), petitioners Spouses Lam, trading as ColorKwik Laboratories and ColorKwik Photo Supply, entered on January 8, 1992 into a single Letter Agreement with respondent Kodak Philippines for the sale of three Kodak Minilab System 22XL units at ₱1,796,000.00 each, payable in 48 monthly installments with no downpayment and a 19% multiple–order discount. Respondent delivered and installed one unit on March 9, 1992, after which petitioners issued twelve post-dated checks for ₱35,000.00 each. They requested non-negotiation of the first two checks, but the bank honored them; the remaining ten checks were dishonored on petitioners’ stop-payment instruction. Kodak rescinded the sale, demanded return of the installed unit and its accessories, and filed a replevin and/or money-recovery suit on November 25, 1992. After petitioners defaulted, the Regional Trial Court (RTC) in Makati on February 26, 19Case Digest (G.R. No. L-12647)
Facts:
- Contract Formation and Terms
- On January 8, 1992, Spouses Alexander and Julie Lam (“Lam Spouses”) and Kodak Philippines, Ltd. entered into a single “package deal” Letter Agreement for three units of the Kodak Minilab System 22XL at ₱1,796,000.00 each, with:
- A 19% multiple-order discount on all three units if purchased by June 30, 1992.
- No downpayment; payable in 48 monthly installments of ₱35,000.00 (including 24% interest first 12 months) and re-amortized balance.
- First installment due 45 days after installation; price subject to change.
- The “package” nature was underscored by unified discount, no–downpayment clause, and reference to “Minilab Equipment Package.”
- Delivery, Payment, and Contractual Breakdown
- January 15, 1992: Kodak delivered and installed the first unit in Tagum; Lam Spouses issued 12 postdated checks of ₱35,000.00 each.
- March 31 and April 30, 1992 checks were honored; subsequent checks stopped by Lam Spouses.
- Kodak canceled the sale, demanded return of delivered unit; Lam Spouses rescinded contract on November 18, 1992, citing failure to deliver remaining two units.
- Judicial Proceedings
- Kodak filed replevin and/or money recovery complaint (November 25, 1992); Lam Spouses defaulted; trial court (Feb. 26, 1999) ruled:
- Kodak in default for non-delivery; contract rescinded.
- Kodak ordered to pay ₱130,000.00 (generator set) + 12% interest and ₱1,300,000.00 (renovation expenses); case dismissed.
- Lam Spouses partially appealed; Kodak’s appeal dismissed (Dec. 16, 2002) for failure to file brief.
- Court of Appeals (Mar. 30, 2005; Amended Sept. 9, 2005) modified trial court:
- Kodak to pay P130,000 + interest; P440,000 actual damages; P25,000 moral; P50,000 exemplary.
- Lam Spouses to return the Minilab unit and accessories; Kodak to refund P270,000 partial payment.
- Supreme Court consolidated appeals (G.R. No. 167615), deconsolidated Kodak’s separate motion (G.R. No. 169639).
Issues:
- Were the parties’ obligations divisible and susceptible to partial performance under Article 1225, New Civil Code?
- Upon mutual rescission under Article 1191, New Civil Code, what restitution and liabilities arise under Articles 1190 and 1522?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)