- Petitioner
- The Wellex Group
- Respondent
- U-Land Airlines
- Citation
- G.R. No. 167519
- Court
- Supreme Court
- Division
- Second Division
- Ponente
- Leonen, J.
- Decided
- January 14, 2015
Summary
The Supreme Court affirmed the rescission of a Memorandum of Agreement between The Wellex Group, Inc. and U-Land Airlines, Co., Ltd. for a failed joint venture in airline operations and property development. The MOA required execution of a Share Purchase Agreement within 40 days, but parties failed to finalize terms despite U-Land remitting US$7,499,945.00. The Court applied Article 1191 of the Civil Code on rescission of reciprocal obligations, finding that U-Land, as the injured party, was entitled to rescission due to Wellex's breach. The Court rejected fraud allegations but found Wellex violated the duty of good faith by misrepresenting APIC's ownership of APC shares. Under the MOA's Section 9, failure to execute agreements within the stipulated period rendered the MOA ineffective, requiring mutual restitution. The decision reinforces that clear contractual terms control and that parties to reciprocal obligations must perform in good faith, with rescission available to the injured party upon material breach.