Boysaw vs. Interphil Promotions

Boxer (P) vs. Promoter (D)
GR L-22590	[T]

Summary: A boxer signed an agreement with a promotions agency to arrange and promote a boxing match with Flash Elorde. The boxer violated the terms of the contract, but in spite of these, the agency proceeded except it negotiated for a new date for the match. Eventually, the match as originally stated in the contract did not materialize. Boxer and manager is now suing the promotion agency for breach of contract.

Rule of Law: Where one party did not perform the undertaking which he was bound by the terms of the agreement to perform, he is not entitled to insist upon the performance of the contract by the other party, or recover damages by reason of his own breach.

Facts: Solomon Boysaw (P), signed with Interphil Promotions, Inc. (D), a contract to engage Gabriel "Flash" Elorde in a boxing contest for the junior lightweight championship of the world. Thereafter, Interphil (D) signed Gabriel "Flash" Elorde to a similar agreement—that is, to engage Boysaw in a title fight.

The managerial rights over Boysaw (P) was assigned and eventually reassigned to Alfredo Yulo, Jr. (P) without the consent of Interphil (D) in violation of their contract. When informed of the change, Interphil (D) referred the matter to the Games and Amusement Board culminating to a decision by the board to approve a new date for the match. Yulo (P) protested against the new date even when another proposed date was within the 30-day allowable postponements.

Boysaw (P) and Yulo (P) filed for breach of contract when the fight contemplated in the original boxing contract did not materialize.

Issues: May the offending party in a reciprocal obligation compel the other party for specific performance?

Ruling: No. Evidence established that the contract was violated by Boysaw (P) when, without the approval or consent of Interphil (D), he fought a boxing match in Las Vegas. Another violation was the assignment and transfer of the managerial rights over Boysaw (P) without the knowledge or consent of Interphil (D).

While the contract imposed no penalty for such violation, this does not grant any of the parties the unbridled liberty to breach it with impunity. Our law on contracts recognizes the principle that actionable injury inheres in every contractual breach.

Those who in the performance of their obligations are guilty of fraud, negligence or delay, and those who in any manner contravene the terms thereof, are liable for damages.
   —Article 1170, Civil Code.

The power to rescind obligations is implied, in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.
   —Article 1191, Civil Code.

The contract in question gave rise to reciprocal obligations.

Reciprocal obligations are those which arise from the same cause, and in which each party is a debtor and a creditor of the other, such that the obligation of one is dependent upon the obligation of the other. They are to be performed simultaneously, so that the performance of one is conditioned upon the simultaneous fulfillment of the other.
   —Tolentino, Civil Code of the Philippines, Vol. IV, p. 175.

The power to rescind is given to the injured party.

Where the plaintiff is the party who did not perform the undertaking which he was bound by the terms of the agreement to perform, he is not entitled to insist upon the performance of the contract by the defendant, or recover damages by reason of his own breach.
   —Seva vs. Alfredo Berwin, 48 Phil. 581.

Under the law, when a contract is unlawfully novated by an applicable and unilateral substitution of the obligor by another, the aggrieved creditor is not bound to deal with the substitute. However, from the evidence, it is clear that the Interphil (D), instead of availing themselves of the options given to them by law of rescission or refusal to recognize the substitute obligor, really wanted to postpone the fight date owing to an injury that Elorde sustained in a recent bout. That Interphil (D) had justification to renegotiate the original contract, particularly the fight date is undeniable from the facts. Under the circumstances, Interphil's (D) desire to postpone the fight date could neither be unlawful nor unreasonable.
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* Keywords: rescission, reciprocal obligation