Spouses Alexander v. Kodak Philippines

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 When Kodak delivered only one unit, both parties rescinded the contract.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.