CASE DIGEST

77 BOYSAW v. INTERPHIL PROMOTIONS

Law 101 ObliCon – Alternative Remedies in Case of Breach - Action for Rescission

Court Supreme Court Second Division

CitationG.R. No. L-22590
Date20 March 1987
Plaintiffs-AppellantsSolomon Boysaw and Alfredo M. Yulo, Jr.
Defendants-Appellees Interphil Promotions, Inc., Lope Sarreal, Sr., and Manuel Nieto, Jr.
Ponente Fernan
Relevant topic "The power to rescind obligations is implied, in reciprocal ones, in case one of
the obligors should not comply with what is incumbent upon him." – Par. 1,
Article 1191, Civil Code
Prepared by Lawdemhar Cabatos

FACTS:

▪ 1 May 1961 – Solomon Boysaw and his then Manager, Willie Ketchum, signed with Interphil Promotions,
Inc., represented by Lope Sarreal, Sr., a contract to engage Gabriel “Flash” Elorde in a boxing contest
for the junior lightweight championship of the world.
o Bout would be held at the Rizal Memorial Stadium on 30 September 1961, or not later than 30
days thereafter should a postponement be mutually agreed upon.
o Boysaw would not, prior to the date of the boxing contest, engage in any other such contest
without the written consent of Interphil Promotions Inc.

▪ 19 June 1961 – Boysaw fought and defeated Louis Avila in a 10-round non-title bout held in Las Vegas.

▪ 2 July 1961 – Ketchum, on his own behalf and on behalf of his associate Frank Ruskay, assigned to J.
Amado Araneta the managerial rights over Solomon Boysaw.

▪ 1 September 1961 – J. Amado Araneta assigned to Alfredo J. Yulo, Jr. the managerial rights over Boysaw
that he earlier acquired from Ketchum and Ruskay.

▪ 5 September 1961 – Alfredo Yulo, Jr. wrote to Sarreal, informing him of his acquisition of the managerial
rights over Boysaw and indicating his and Boysaw’s readiness to comply with the boxing contract of 1
May 1961. On the same date, on behalf of Interphil, Sarreal wrote a letter to the Games and Amusement
Board (GAB) expressing concern over the switch of managers in the case of Boysaw, of which he had
not been formally notified.

▪ After a series of conferences of the parties concerned, the GAB issued a decision to schedule the Elorde-
Boysaw fight for 4 November 1961. Yulo, Jr. refused to accept the change in the fight date, maintaining
his refusal even after Sarreal on 26 September 1961 offered to advance the date to 28 October 1961,
which was within the 30-day period allowable for postponements.

▪ While an Elerde-Boysaw fight was eventually staged, the fight contemplated in the 1 May 1961 boxing
contract never materialized.

▪ 12 October 1961 – Boysaw and Yulo Jr. sued Interphil, Sarreal, Sr., and Manuel Nieto, Jr. in the CFI of
Rizal (Quezon City Branch) for damages allegedly occasioned by the refusal of Intephil and Sarreal, aided
and abetted by Nieto, Jr., then GAB Chairman, to honor their commitments under the boxing contract of
1 May 1961.

▪ 1963 – Boysaw left the country without informing the court, and after failing to appear as witness despite
several postponements, the plaintiff’s case was deemed submitted on the evidence thus far presented.
An urgent motion for postponement and the subsequent motion for reconsideration were denied.

▪ The lower court denied the plaintiff’s complaint. The plaintiffs moved for a new trial, but was denied, hence
this appeal.
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CASE DIGEST
77 BOYSAW v. INTERPHIL PROMOTIONS
Law 101 ObliCon – Alternative Remedies in Case of Breach - Action for Rescission

ISSUE– HELD – RATIO:

ISSUE HELD
WoN there was a violation of the fight contract of 1 May 1961, and if there was, who was YES;
guilty of such violation. Boysaw

Ratio:

The contract was violated when:

1. Appellant Boysaw himself, without approval or consent of Interphil, fought Louis Avila on 19 June
1961 in Las Vegas.

Appellant Yulo, Jr. admitted this fact during the trial. While the contract imposed no penalty for such violation,
this does not grant any of the parties the unbridled liberty to breach it with impunity.

"The power to rescind obligations is implied, in reciprocal ones, in case one of the obligors should not comply
with what is incumbent upon him." – Par. 1, Article 1191, Civil Code

There is no doubt that the contract in question gave rise to reciprocal obligations.

"Reciprocal obligations are those which arise from the same cause, and in which each party is a debtor and
a creditor of the other, such that the obligation of one is dependent upon the obligation of the other. They are
to be performed simultaneously, so that the performance of one is conditioned upon the simultaneous
fulfillment of the other." [Tolentino, Civil Code of the Philippines, Vol. IV, p. 175.]

The power to rescind is given to the injured party. "Where the plaintiff is the party who did not perform the
undertaking which he was bound by the terms of the agreement to perform, he is not entitled to insist upon
the performance of the contract by the defendant, or recover damages by reason of his own breach." [Seva
vs. Alfredo Berwin, 48 Phil. 581]

2. The managerial contract over Boysaw was assigned and transferred first to J. Amado Araneta and
then to Appellant Yulo, Jr. without the knowledge or consent of Interphil.

The assignments, from Ketchum to Araneta, and from Araneta to Yulo, were in fact novations of the original
contract which, to be valid, should have been consented to by Interphil.

“Novation which consists in substituting a new debtor in the place of the original one, may be made even
without the knowledge or against the will of the latter, but not without the consent of the creditor." [Art. 1293,
Civil Code].

Yulo, Jr.’s letter of 5 September 1961 informing Interphil of his acquisition of the managerial rights over
Boysaw cannot change the fact that such acquisition, and the prior acquisition of such rights by Araneta,
were done without consent of Interphil. There is no showing that Interphil, upon receipt of Yulo, Jr.’s letter,
acceded to the “substitution” by Yulo, Jr., of the original principal obligor, who is Ketchum. The logical
presumption can only be that, with Interphil's letter to the GAB expressing concern over reported managerial
changes and requesting for clarification on the matter, the appellees were not reliably informed of the changes
of managers. Not being reliably informed, appellees cannot be deemed to have consented to such changes.

Under the law, when a contract is unlawfully novated by an applicable and unilateral substitution of the obligor
by another, the aggrieved creditor is not bound to deal with the substitute.

"The consent of the creditor to the change of debtors, whether in expromision or delegacion is an
indispensable requirement. Substitution of one debtor for another may delay or prevent the fulfillment of the
obligation by reason of the inability or insolvency of the new debtor, hence, the creditor should agree to
accept the substitution in order that it may be binding on him.
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CASE DIGEST
77 BOYSAW v. INTERPHIL PROMOTIONS
Law 101 ObliCon – Alternative Remedies in Case of Breach - Action for Rescission

Thus, in a contract where x is the creditor and y is the debtor, if y enters into a contract with z, under which
he transfers to z all his rights under the first contract, together with the obligations there under, but such
transfer is not consented to or approved by x, there is no novation. X can still bring his action against y for
performance of their contract or damages in case of breach." [Tolentino, Civil Code of the Philippines, Vol.
IV, p. 361].

ISSUE HELD
WoN there was legal ground for the postponement of the fight date from 30 September 1961, YES
as stipulated in the 1 May 1961 contract, to 4 November 1961.

Ratio:

The appellees, instead of availing themselves of the options given to them by law of rescission or refusal to
recognize the substitute obligor Yulo, Jr., really wanted to postpone the fight date owing to an injury that
Elorde sustained in a recent bout. That the appellees had the justification to renegotiate the original contract,
particularly the fight date is undeniable from the facts aforestated. Under the circumstances, the appellees'
desire to postpone the fight date could neither be unlawful nor unreasonable.

Since all the rights on the matter rested with the appellees, and appellants' claims, if any, to the enforcement
of the contract hung entirely upon the former's pleasure and sufferance, the GAB did not act arbitrarily in
acceding to the appellee's request to reset the fight date to November 4, 1961. It must be noted that appellant
Yulo, Jr. had earlier agreed to abide by the GAB ruling.

The refusal of appellants to accept a postponement without any other reason but the implementation of the
terms of the original boxing contract entirely overlooks the fact that by virtue of the violations they have
committed of the terms thereof, they have forfeited any right to its enforcement.

The violations of the terms of the original contract by appellants vested the appellees with the right to rescind
and repudiate such contract altogether. That they sought to seek an adjustment of one particular covenant
of the contract, is under the circumstances, within the appellee's rights.

Appellant’s contention that Manuel Nieto, Jr. arrogated unto himself the prerogatives of the whole GAB by
making the decision to postpone on his own finds no support from the records of the case. It must be stated
that one of the strongest presumptions of law is that official duty has been regularly performed. In this case,
the absence of evidence to the contrary, warrants the full application of said presumption that the decision to
set the Elorde-Boysaw fight on November 4, 1961 was a GAB Board decision and not of Manuel Nieto, Jr.
alone.

ISSUE HELD
WoN the lower court, on the basis of the evidence adduced, erred in awarding the appellees PARTLY
damages of the character and amount stated in the decision

Ratio:

1. On the award P250,000.00 as unrealized profits to Interphil Promotions, Inc. and Lope Sarreal, Sr.

In civil cases, there is no rule requiring more than one witness or declaring that the testimony of a single
witness will not suffice to establish facts, especially where such testimony has not been contradicted or
rebutted. Thus, we find no reason to disturb the award of P250,000.00 as and for unrealized profits to the
appellees.

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CASE DIGEST
77 BOYSAW v. INTERPHIL PROMOTIONS
Law 101 ObliCon – Alternative Remedies in Case of Breach - Action for Rescission

2. On the award of P33,369.72 as actual damages to Interphil Promotions, Inc. and Lope Sarreal, Sr.

The records bear sufficient evidence presented by appellees of actual damages which were neither objected
to nor rebutted by appellants, again because they adamantly refused to participate in the court proceedings.

3. On the award of P5,000.00 as attorney’ s fees to Manuel Nieto, Jr. and another P5,000.00 to
Interphil Promotions, Inc. and Lope Sarreal, Sr.

The award of attorney’s fees cannot also be regarded as excessive considering the extent and nature of
defense counsels' services which involved legal work for sixteen (16) months.

4. On the award of P20,000.00 as moral damages to Lope Sarreal, Sr. and another P20,000.00 to
Manuel Nieto, Jr.

The award is not sanctioned by law and well-settled authorities. Art. 2219 of the Civil Code provides:

"Art. 2219. Moral damages may be recovered in the following analogous cases:

1) A criminal offense resulting in physical injuries;

2) Quasi-delict causing physical injuries;
3) Seduction, abduction, rape or other lascivious acts;
4) Adultery or concubinage;
5) Illegal or arbitrary detention or arrest;
6) Illegal search;
7) Libel, slander or any other form of defamation;
8) Malicious prosecution;
9) Acts mentioned in Art. 309;
10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34 and 35.

The award of moral damages in the instant case is not based on any of the cases enumerated in Art. 2219
of the Civil Code. The action herein brought by plaintiffs appellants is based on a perceived breach committed
by the defendants-appellees of the contract of May 1, 1961, and cannot, as such, be arbitrarily considered
as a case of malicious prosecution.

Moral damages cannot be imposed on a party litigant although such litigant exercises it erroneously because
if the action has been erroneously filed, such litigant may be penalized for costs.

RULING:

WHEREFORE, except for the award of moral damages which is herein deleted, the decision of the lower
court is hereby affirmed.

SO ORDERED.

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