PROFESSIONAL ACADEMIC PLANS, INC. v.

CRISOSTOMO

FACTS: Respondent Crisostomo was the PAPI District Manager for Metro Manila who was later
promoted to Regional Manager. She did not receive any salary but was entitled to a franchise
commission of 10% of the payments on remittances of clients that had been negotiated by her. PAPI
initiated negotiations with the Armed Forces of the Philippines Savings and Loan Association (AFPSLAI),
thru Col. Andaya, offering academic assistance programs. Respondent Crisostomo continued the
negotiations until a Memorandum of Agreement (MOA) was executed between PAPI and AFPSLAI.
Initially, Crisostomo received the 10% commission from Dec. 1988 April 1989. However, PAPI kept on
asking for deductions from the commission until it was finally reduced to 2%. When Col. Punzalan
replaced Col. Andaya, he requested for a review of the MOA with PAPI. As a result, PAPI and AFPSLAI
executed a new MOA amending the prior MOA on January 1992.
In an inter-office memorandum, Crisostomo was informed that his commission has been
terminated because of the following: (1) the new MOA was negotiated by PAPI directly and without his
intervention, and (2) she was not able to meet her monthly quota of 100 clients. Crisostomo tried to
convince her immediate supervisor and the President to reinstate her commission, but her request was
not heeded. On Jan. 21, 1993, Crisostomo filed a complaint for sum of money and damages against PAPI
and the President of PAPI. The Trial court ruled in favor of Crisostomo and ordered PAPI to pay her the
commission due. The Court of Appeals affirmed the decision of the lower court further explaining that the
amendment of the first MOA did not extinguish nor supersede the latter. What was executed was a mere
modification. PAPI filed a petition for review on certiorari.

ISSUES:
(1) WON the old MOA had been cancelled by the AFPSLAI.
(2) WON Crisostomo is entitled to the franchise commission under the new MOA.

HELD:
(1) No. Col. Punzalan did not unilaterally cancel the first MOA.
(2) Yes. She is still entitled as the first MOA is still valid.

RATIO:
(1) The letter of Col. Punzalan merely shows that there is a suspension of the acceptance of new
application under the first MOA until a new agreement is made. 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 embodied in Article 1308 of the Civil Code. To effect
abandonment of contract, mutual assent is always required.
(2) PAPI is already in estoppel to question its entitlement to the franchise agreement under the old
MOA. The franchise commission was granted on two conditions only: (1) that Crisostomo be
connected to the company and (2) that it is not transferable. At the time the new MOA was
executed she was still connected to the company thus entitled to commission.