UP v de Los Angeles

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UP v. De Los Angeles 146 Phil 108 | 29 September 1970 | Reyes, J.B.L., J. Princess Trisha Joy Z. Uy | Law 101Obligations and Contracts | Grp3 UP and ALUMCO entered into a logging contract, ALUMCO failed to pay its dues and so UP deemed their contract rescinded. Facts: ! Act 3608 – Land Grant was given to UP for the purpose of raising additional income for its support. ! Nov 1960 – UP and ALUMCO entered into a logging agreement, where ALUMCO was given exclusive authority until the end of 1965, in consideration of payment of royalties and other fees. ! ALUMCO incurred arrearages and despite UP’s demands, it failed to pay. ! ALUMCO executed a document “Acknowledgement of Debt and Proposed Manner of Payments” which the UP president approved. ! ALUMCO continued its operations and still failed to pay. ! UP informed ALUMCO that it considers their contract rescinded. ! UP filed for the collection of the sums ALUMCO accrued. ! Issue/Ratio: WON UP can treat the contract rescinded before a judicial pronouncement to that effect. YES UP and ALUMCO had stipulated in their contract that upon ALUMCO’s default, UP ha the right and the power to consider the agreement as rescinded without the necessity of a judicial suit. It is only the final judgment of the court that will conclusively settle whether the action taken was correct in law, BUT the law does not require that the contracting party who believes itself injured must first file suit and wait for judgment before taking extrajudicial steps.

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UP v de Los Angeles digest for Obligations and Contracts

Transcript of UP v de Los Angeles

UP  v.  De  Los  Angeles  146  Phil  108  |  29  September  1970  |  Reyes,  J.B.L.,  J.  Princess  Trisha  Joy  Z.  Uy  |  Law  101-­‐Obligations  and  Contracts  |  Grp3    

UP  and  ALUMCO  entered  into  a  logging  contract,  ALUMCO  failed  to  pay  its  dues  and  so  UP  deemed  their  contract  rescinded.  

 Facts:  ! Act  3608  –  Land  Grant  was  given  to  UP  for  the  purpose  of  raising  additional  income  for  its  support.  ! Nov  1960  –  UP  and  ALUMCO  entered  into  a  logging  agreement,  where  ALUMCO  was  given  exclusive  

authority  until  the  end  of  1965,  in  consideration  of  payment  of  royalties  and  other  fees.  ! ALUMCO  incurred  arrearages  and  despite  UP’s  demands,  it  failed  to  pay.  ! ALUMCO  executed  a  document  “Acknowledgement  of  Debt  and  Proposed  Manner  of  Payments”  

which  the  UP  president  approved.  ! ALUMCO  continued  its  operations  and  still  failed  to  pay.  ! UP  informed  ALUMCO  that  it  considers  their  contract  rescinded.  ! UP  filed  for  the  collection  of  the  sums  ALUMCO  accrued.  !    Issue/Ratio:  WON  UP  can  treat  the  contract  rescinded  before  a  judicial  pronouncement  to  that  effect.  YES    UP  and  ALUMCO  had  stipulated  in  their  contract  that  upon  ALUMCO’s  default,  UP  ha  the  right  and  the  power  to  consider  the  agreement  as  rescinded  without  the  necessity  of  a  judicial  suit.    It  is  only  the  final  judgment  of  the  court  that  will  conclusively  settle  whether  the  action  taken  was  correct  in  law,  BUT  the  law  does  not  require  that  the  contracting  party  who  believes  itself  injured  must  first  file  suit  and  wait  for  judgment  before  taking  extrajudicial  steps.