G.R. No. 148599, 14 March 2005

FACTS:

Respondent is an employee of petitioner. It was initially agreed in a MOA that respondent was to receive 10% commission on remittances of clients negotiated by her. Thereafter respondent negotiated a scholarship program between AFSLAI and PAPI. Sometime later, a series of new MOAs negotiated between AFSLAI and PAPI at the exclusion of the respondent resulted into agreements that lowered and eventually removed respondent’s commissions. After exhausting administrative remedies and termination from PAPI, respondent filed a complaint in court which was ruled favorably by RTC and CA. Hence, petition.

ISSUE:

WON Crisostomo is entitled to the franchise commission under the new memorandum of agreements under which she had no participation whatsoever in the negotiation and execution.

RULING:

Yes. She is entitled to the commissions.

SC ruled that abandonment of contract rights requires proof of actual intent to abandon. Once a contract is entered into, no party can renounce it unilaterally or without the consent of the other. This is the essence of the principle of mutuality of contracts entombed in Article 1308 of the Civil Code which states that: “The contracts must bind both contracting parties; its validity or compliance cannot be left to the will of one of them”. To effectuate abandonment of a contract, mutual assent is always required. The mere fact that one has made a poor bargain may not be a ground for setting aside the agreement.

There is no evidence in the case that the respondent agreed to the cancellation of the original MOA that entitled her to receive the commissions. The fact that subsequent MOAs were executed between AFPSLAI and PAPI does not invalidate the original MOA contracted by respondent. Petition is dismissed.

  * Case digest by Ariel M. Acopiado, LLB-1, Andres Bonifacio Law School, SY 2017-2018