Philcomsat v.
Globe Telecom Philcomsat sent a letter demanding payment but Globe
Globe is engaged in the provision of various
communication facilities with the military bases of the US.
The USDCA contracted with said American companies, and
the latter in turn, contracted with Globe for the use of
communication facilities. Globe, on the other hand,
contracted with local service providers such as Philippine
Communications Satellite (Philcomsat) for the provision of
said facilities.
On May 7, 1991, Philcomsat and Globe entered into an
Agreement whereby Philcomsat obligated itself to
establish, operate and provide earth station for the
exclusive use of the USDCA. The term of the contract is for
60 months or 5 years. In turn Globe promised to pay
Philcomsat monthly rentals.
Both parties knew that the RP-US Military Bases
Agreement will expire in 1991, under Sec 25 of Art XVIII of
the 1987 Constitution (not unless a new treaty is
concurred by senate and ratified by majority of the votes
in a national referendum)
Philcomsat installed and established the earth station at
Cubi Point and USDCA made use of the same.
On Sep 16, 1991, the Senate passed and adopted Senate
Resolution No. 14, expressing its decision not to concur in
the ratification of the Treaty of Friendship… because of
this the term of the use by the US of the Subic Naval Base
was no longer extended.
In a letter dated Aug 6, 1992, Globe notified Philcomsat of
its intention to discontinue the use of the earth station
effective on Nov 8, 1992. Globe invoked Sec 8 of the
Agreement, stating that the parties will be precluded from
performing the obligation when there is a fortuitous event.
refused to heed the demand.
Globe insists that the termination of the RP-US Military
Bases Agreement is a fortuitous event that exempted
them from paying the rentals.
RTC ordered Globe to pay Philcomsat up to the month of
Dec 1992 with interest
CA affirmed RTC decision and said that Globe is still liable
to pay the rental up to Dec 1992 considering that the US
military forces completely withdrew only on Dec 31, 1992
Issue: W/N the termination of the RP-US Military Bases
Agreement constitute force majeure which would exempt
Globe from paying the rentals under its agreement with
Philcomsat.
Ruling: The SC denied the petition and affirmed the RTC
ruling.
The termination of the RP-US Military Bases agreement is
a fortuitous event that was foreseeable, but inevitable
based on Art 1174 of the Civil Code.
The Court agrees with the CA and RTC that the requisites
for ta fortuitous event are present. (1)Philcomsat and
Globe had no control over the non-renewal of the term of
the RP-US Military Bases Agreement. (2) Neither did the
parties have control over the subsequent withdrawal of
the US military forces.
The CA was thus correct in ruling that the happening of
such fortuitous events rendered Globe exempt from
payment of rentals for the remainder of the agreement.