Guzman, Janine

Potestative Condition
If the suspensive condition depends on the will of the creditor, it is valid

MD Taylor v Uy Tieng

October 2, 1992
Street, J
Petition: Appeal from the Court of First Instance of the city of Manila

Parties:
MD Taylor – Plaintiff
Uy Tieng – Defendant

Facts:
December 12, 1918, the MD Taylor contracted his services to Tan Liuan & Co., owned by Uy Teng, as superintendent
of an oil factory. The period of the contract extended over two years from the date mentioned; and the salary was to
be at the rate of P600 per month during the first year and P700 per month during the second, with electric light and
water for domestic consumption, and a residence to live in, or in lieu thereof P60 per month. The agreement also
stipulated the arrival of a machine that would be used in the said factory. The stipulations inserted in the contract
with the plaintiff was a provision to the following effect:
“It is understood and agreed that should the machinery to be installed in the said factory fail, for any reason, to arrive
in the city of Manila within a period of six months from date hereof, this contract may be cancelled by the party at its
option, such cancellation, however, not to occur before the expiration of such six months,"
The machinery above referred to did not arrive in the city of Manila within the six months succeeding the making of
the contract. Reason for non-arrival was uncertain. Subsequently, Uy Tieng communicated in writing to MD Taylor
that they had decided to rescind the contract. MD Taylor thereupon instituted action to recover damages. Plaintiff
proceeds on the idea that the stipulation above quoted, giving to the defendants the right to cancel the contract upon
the contingency of the non-arrival of the machinery in Manila within six months, must be understood as applicable
only in those cases where such non-arrival is due to a fortuitous event.

Issue: Whether or not Uy Tieng has the right to rescind contract notwithstanding the lack of evidence that the cause
of non-arrival was due to a fortuitous event

Ruling:
Uy Tieng has the right to rescind. It will be noted that the language conferring the right of cancellation upon the
defendants is broad enough to cover any case of the non-arrival of the machinery, due to whatever cause; and the
stress in the expression "for any reason" should evidently fall upon the word "any." It must fellow of necessity that the
defendants had the right to cancel the contract in the contingency that occurred, unless some clear and sufficient
reason can be adduced for limiting the operation of the words conferring the right of cancellation. Undoubtedly one
of the consequences of this stipulation was that the employers were left in a position where they could dominate the
contingency, and the result was about the same as if they had been given an unqualified option to disperse with the
services of the plaintiff at the end of six months. But this circumstance does not make the stipulation illegal. If it were
apparent, or could be demonstrated, that the defendants were under a positive obligation to cause the machinery to
arrive in Manila, they would of course be liable, in the absence of affirmative proof showing that the non-arrival of the
machinery was due to some cause not having its origin in their own act or will. The contract, however, expresses no
such positive obligation, and its existence cannot be implied in the face of stipulation, defining the conditions under
which the defendants can cancel the contract.