June 30, 2005 462
SCRA 466
Ponente: Justice
Carpio-Morales
Facts: GF Equity hired Valenzona as Head Coach of the
Alaska team in Philippine Basketball Association under contract. Under the
contract Valenzona will receive a monthly salary of P35,000, net of taxes, a
service vehicle with gasoline allowance. Although, he had consulted his lawyer
for the stipulations in the contract and was pointed by his counsel that there
is an one-sidedness face still he agreed to the contract. Later on, he was
terminated from being the Head Coach on grounds that the management believes he
did not comply of all his duties as coach. Valenzona filed in RTC of Manila
against the GF Equity of breach of contract with damages. The RTC dismissed the
complaint stating that the contract was valid and that he is aware of the bad
bargain. In the CA, where he appealed, the appellate court reversed the RTC’s
decision and thus ordered HF Equity liable for damages. Hence this petition.
Issue: Whether or not the contract violated the rules on
mutuality of contract resulting from breach of contract and therefore a
recovery of damages can be awarded?
Held: The CA bases their judgment on Article 19 of the
Civil Code, or the principle of abuse of rights. The same code also provides
for the mutuality of contracts where both parties are bound and must adhere to
the contract. The stipulation wherein, the management, on its sole opinion can
terminate the employment of the defendant is violative and thus is null and
void. GF Equity failed to consider the principle of abuse of right clearly
stated in Article 19 of the CC. The pre-termination is anchored which is
contrary to law and thereby abusing the right of Valenzona, entitles him of
damages in consonance with Article 19 in relation to Article 20 of the CC.
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