Oscar Ll. Arcinue v. Alice Ilalo S. Baun

Summary

This case involves the unauthorized transfer of an ACLC computer school franchise by Oscar Arcinue to Alice Baun without the franchisor's required prior approval. Arcinue received a 10-year franchise in 1990 but never commenced operations. In 1993, he sold the franchise to Baun for P85,000.00 without ACLC's consent, violating the franchise agreement. Despite Baun's efforts to establish the school, ACLC terminated the franchise in 1997 due to non-operation and unauthorized assignment. Baun sued for specific performance and damages. The courts consistently found Arcinue liable for bad faith conduct under Civil Code Articles 19, 20, and 21, ordering him to pay actual, moral, and exemplary damages. The Supreme Court affirmed with modified interest calculations, emphasizing that damage claims survive a party's death and that factual findings on bad faith are not reviewable in Rule 45 petitions. The case demonstrates the importance of strict compliance with franchise agreement provisions and the consequences of unauthorized transfers.