Pryce Corp v PAGCOR

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Pryce Corp. v. PAGCOR 497 Phil 490 | 06 May 2005 | Panganiban, J. Princess Trisha Joy Z. Uy | Law 101Obligations and Contracts | Grp3 Pryce entered a contract of lease with PAGCOR. Pryce wants to terminate the contract and wants to be paid the future rentals, which PAGCOR didn’t want. Stipulations in their contract held PAGCOR liable. Facts: ! Pryce made representations with the PAGCOR on possibly setting up a casino in Pryce Plaza Hotel. ! PAGCOR went to CDO to check out the place and conduct marketing research. ! 1992 they entered a contract where Pryce is to lease its hotel lobby plus 1000 square meters of space to PAGCOR for 3 years. ! 1990 CDO released a resolution prohibiting the establishment and operation of a gambling casino in the city. ! Hours before the opening of the casino, some people staged a rally in front of the hotel, suspending the operations of the casino. ! 1993 CDO released Ordinance No. 3353 prohibiting the operation of casinos in CDO. ! Pryce petitioned and prayed that the ordinance be declared unconstitutional. ! CA declared the ordinance unconstitutional. ! PAGCOR resumed the operations of the casino while the appeal was pending in the SC. ! The operations were suspended due to incessant demonstrations. ! PAGCOR discontinued the operations in September 1993 and was not amenable to paying for the whole three years. Issue/Ratio: WON Pryce is entitled to the payment of future rentals for the unexpired period of the contract. YES Obligations arising from the contracts have the force of law between the contracting parties. ! “In the event of default or breach of any of such terms, conditions and/or covenants, xxx the LESSOR shall have the right to terminate and cancel this contract xxx” ! “LESSEE shall be fully liable to the LESSOR for the rentals corresponding to the remaining term of the lease as well as for any and all damages xxx” ! The above stipulations are not contrary to law, and nothing is objectionable about it. Rescission v. Termination Rescission – is predicated on the breach of faith that violates the reciprocity between the parties. The unmaking of a contract. May be effected by both parties by mutual agreement; or by one party declaring a rescission of contract without the consent of the other if a legally sufficient ground exists. Termination – entails the enforcement of the contract’s terms prior to the declaration of its cancellation. End in time or existence. Pryce did not intend to rescind ! In a rescission, mutual restitution is required, Pryce would reacquire the hotel, and PAGCOR would get back the rentals it paid. ! Here, Pryce’s actions do not call for a rescission, in fact, the petitioner is even asking for the payment of accrued rentals.

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Digest for Pryce Corp v PAGCOR

Transcript of Pryce Corp v PAGCOR

  • Pryce Corp. v. PAGCOR 497 Phil 490 | 06 May 2005 | Panganiban, J. Princess Trisha Joy Z. Uy | Law 101-Obligations and Contracts | Grp3

    Pryce entered a contract of lease with PAGCOR. Pryce wants to terminate the contract and wants to be paid the future rentals, which PAGCOR didnt want. Stipulations in their contract held PAGCOR liable.

    Facts: ! Pryce made representations with the PAGCOR on possibly setting up a casino in Pryce Plaza Hotel. ! PAGCOR went to CDO to check out the place and conduct marketing research. ! 1992 - they entered a contract where Pryce is to lease its hotel lobby plus 1000 square meters of space

    to PAGCOR for 3 years. ! 1990 - CDO released a resolution prohibiting the establishment and operation of a gambling casino in

    the city. ! Hours before the opening of the casino, some people staged a rally in front of the hotel, suspending

    the operations of the casino. ! 1993 - CDO released Ordinance No. 3353 prohibiting the operation of casinos in CDO. ! Pryce petitioned and prayed that the ordinance be declared unconstitutional. ! CA declared the ordinance unconstitutional. ! PAGCOR resumed the operations of the casino while the appeal was pending in the SC. ! The operations were suspended due to incessant demonstrations. ! PAGCOR discontinued the operations in September 1993 and was not amenable to paying for the

    whole three years.

    Issue/Ratio: WON Pryce is entitled to the payment of future rentals for the unexpired period of the contract. YES Obligations arising from the contracts have the force of law between the contracting parties. ! In the event of default or breach of any of such terms, conditions and/or covenants, xxx the

    LESSOR shall have the right to terminate and cancel this contract xxx ! LESSEE shall be fully liable to the LESSOR for the rentals corresponding to the remaining term of

    the lease as well as for any and all damages xxx ! The above stipulations are not contrary to law, and nothing is objectionable about it.

    Rescission v. Termination Rescission is predicated on the breach of faith that violates the reciprocity between the parties. The

    unmaking of a contract. May be effected by both parties by mutual agreement; or by one party declaring a rescission of contract without the consent of the other if a legally sufficient ground exists.

    Termination entails the enforcement of the contracts terms prior to the declaration of its cancellation. End in time or existence.

    Pryce did not intend to rescind ! In a rescission, mutual restitution is required, Pryce would re-acquire the hotel, and PAGCOR would

    get back the rentals it paid. ! Here, Pryces actions do not call for a rescission, in fact, the petitioner is even asking for the

    payment of accrued rentals.