UP v de Los Angeles
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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UP and ALUMCO entered into a logging contract, ALUMCO failed to pay its dues and so UP deemed their contract rescinded.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 UP informed ALUMCO that it considers their contract rescinded.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 Issue/Ratio: WON UP can treat the contract rescinded before a judicial pronouncement to that effect.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had stipulated in their contract that upon ALUMCO’s default, UP ha the right and the power to consider the agreement as rescinded without the necessity of a judicial suit.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.