Universal Food Corporation v. CA
Magdalo Francisco is the inventor of the formula for Mafran Sauce who asked for the financial assistance of Universal Food Corporation (UFC) which lead to an execution of a Bill of Assignment. Said Bill stipulates that Francisco shall be the chief chemist of the company (permanent in character ) and that UFC shall have a right to use the formula. However, a year after, UFC ordered the suspension of the employment of Francisco. Hence, Francisco filed an action for the rescission of the BOA. UFC contends that the rescission should be denied because under Art. 1383, rescission is just a subsidiary remedy.
Whether or not Art. 1383 is applicable in the case at bar
No. The general rule is that rescission of a contract will not be permitted for a slight or casual breach, but only for such substantial and fundamental breach as would defeat the very object of the parties in making the agreement.
The question of whether a breach of a contract is substantial depends upon the attendant circumstances. The petitioner contends that rescission of the Bill of Assignment should be denied because, under article 1383, rescission is a subsidiary remedy which cannot be instituted except when the party suffering damage has no other legal means to obtain reparation for the same.
However, in this case, the dismissal of the respondent patentee Magdalo V. Francisco, Sr. as the permanent chief chemist of the corporation is a fundamental and substantial breach of the Bill of Assignment.