- Petitioner
- Lam
- Respondent
- Kodak Philippines
- Citation
- G.R. No. 167615
- Court
- Supreme Court
- Division
- Second Division
- Ponente
- Leonen, J.
- Decided
- January 11, 2016
Summary
The Supreme Court resolved a contract dispute between Spouses Lam and Kodak Philippines over a Letter Agreement for three Minilab Equipment units. When Kodak delivered only one unit, both parties rescinded the contract. The key legal issue was whether the obligations were divisible or indivisible. The Court of Appeals ruled they were divisible based on separate pricing and deliveries, but the Supreme Court reversed, finding them indivisible based on the parties' clear intention to create a single package deal with unified terms like the multiple order discount and single payment scheme. Under Article 1191 rescission, the Court ordered mutual restitution: Kodak must return P270,000 in payments and pay damages totaling P665,000, while the Lam Spouses must return the equipment. The decision clarifies that obligation divisibility depends on parties' intention, not merely the physical separability of the objects, and establishes important precedent for determining indivisible obligations in sale contracts.
Intellegal Wiki · Key Holding
Reversed the CA on divisibility, holding that the obligations under the single agreement were indivisible based on the parties' intention, shown by the package-deal terms, multiple-order discount, and no-downpayment clause, under the last paragraph of Article 1225, and ordering mutual restitution upon rescission under Article 1191.
An editorially maintained summary of the rule this Supreme Court decision is cited for — not legal advice.