Sales Case Digests (Set1)

8/18/2019 Sales Case Digests (Set1)

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1) DIGNOS vs. CA

G.R. No. L-59266 February 29, 1988SILVESTRE DIGNOS and ISABEL

LUMUNGSOD, petitiones,

vs.

!ON. COURT O" A##EALS and ATILANO G.

$ABIL, espondents.

BIDIN, J.:

"ACTS%

1) The Dignos spouses were owners of a parcel of land,known as Lot No. 3453. On une !, 1"#5, Dignos

spouses sold the said parcel of land to $tilano . a%il

for the su& of '(,***.**, pa+a%le in two

install&ents, with an assumption of indebtednesswith the First Insular Bank of Cebu in the sum of

P12,000.00, which was paid and acknowledged b

the !endors "#ignos spouses$ in the deed of sale

e%ecuted in fa!or of &abil, and the ne%t installment inthe sum of P',000.00 to be paid on or before

(eptember 1), 1*+).

() On Noe&%er (5, 1"#5, the Dignos spouses sold thesa&e land in faor of Luciano -a%igas and oita L.De -a%igas, who were then ./. citi0ens, for the

price of '35,***.**. $ deed of a%solute sale was

eecuted %+ the Dignos spouses in faor of the

-a%igas spouses, and which was registered in theOffice of the 2egister of Deeds pursuant to the

proisions of $ct No. 3344.

3) $s the Dignos spouses refused to accept fro& a%ilthe %alance of the purchase price of the land, and as

a%il discoered the second sale &ade %+ Dignos

spouses to the -a%igas spouses, a%il %rought the

present suit.

4) The lower court, - -e%u, declared the deed of saleeecuted on Noe&%er (5, 1"#5 %+ defendant sa%ela

L. de Dignos in faor of defendant Luciano -a%igas,

a citi0en of the nited /tates of $&erica, null andoid a% initio, and the deed of sale eecuted %+

defendants /ilestre T. Dignos and sa%ela

Lu&ungsod de Dignos not rescinded.

The plaintiff $tilano . a%il is ordered to rei&%urse the

defendants Luciano -a%igas and oita L. de -a%igas, through

their attorne+6in6fact, 'anfilo a%alde, reasona%le a&ount

corresponding to the epenses or costs of the hollow %lock fence, so far constructed.

t is further ordered that defendants6spouses /ilestre T.

Dignos and sa%ela Lu&ungsod de Dignos should return todefendants6spouses Luciano -a%igas and oita L. de -a%igas

the su& of '35,***.**, as e7uit+ de&ands that no%od+ shall

enrich hi&self at the epense of another.

5) 8ith this decision, a%il and the Dignos spouses

appealed to -$. The -ourt of $ppeals affir&ed the

decision of the lower court ecept as to the portion

ordering a%il to pa+ for the epenses incurred %+ the-a%igas spouses for the %uilding of a fence upon the

land in 7uestion.

$ &otion for reconsideration of said decision was filed %+ the

defendants6 appellants 9petitioners) Dignos spouses, %ut onDece&%er 1#, 1"1, a resolution was issued %+ the -ourt of

$ppeals den+ing the &otion for lack of &erit. :ence, this

petition.

ISSUE%

1) 8hether or not su%;ect contract is a deed of a%solute

sale and not a contract to sell<

() 8hether or not there was a alid rescission thereof<!ELD%

1) =>/, the contract in 7uestion is a Deed o& Sa'e, with

the following conditions?

a. That $tilano . a%il is to pa+ the a&ount of'1(,***.** 'hil. 'hilippine -urrenc+ as adance

pa+&ent@

%. That $tilano . a%il is to assu&e the %alance of

'1(,***.**, Loan fro& the irst nsular Aank o-e%u@

c. That $tilano . a%il is to pa+ the said spouses the

%alance of '4,***.** on or %efore /epte&%e

15,1"#5@

d. That the said spouses agrees to defend the said$tilano . a%il fro& other clai&s on the said

propert+@

e. That the spouses agrees to sign a final deed oa%solute sale in faor of $tilano . a%il oer the

a%oe6&entioned propert+ upon the pa+&ent of the

%alance of our Thousand 'esos.

BThus, it has %een held that a deed o& sa'e is a(so'te innate a't*o+* denoinated as a -Deed o& Conditiona

Sa'e- where nowhere in the contract in 7uestion is a proiso

or stipulation to the effect that title to the propert+ sold isresered in the endor until full pa+&ent of the purchase price

nor is there a stipulation giing the endor the right tounilaterall+ rescind the contract the &o&ent the endee fails to

pa+ within a fied period. 9Tagu%a . Cda. de Leon)

() NO, there was no alid rescission of the contract. t has

%een ruled, howeer, that -*ee tie is not o& t*e essen/e

o& t*e a+eeent, a s'i+*t de'a0 on t*e pat o& one pat0 in

t*e pe&oan/e o& *is o('i+ation is not a s&&i/ient +ond

&o t*e es/ission o& t*e a+eeent- 9Tagu%a . Cda. de

Leon, supra). -onsidering that priate respondent has onl+ a %alance of '4,***.** and was dela+ed in pa+&ent onl+ for one

&onth, e7uit+ and ;ustice &andate as in the aforecited case

that a%il %e gien an additional period within which to

co&plete pa+&ent of the purchase price.

) ARTATES vs. URBI

LINO ARTATES AND MANUELA POJAS VS. DANIELURBI, CRISANTO SOLIVEN, ASSISTED BY HISGUARDIAN 'AD LITEM,' MARCELA B. SOLIVEN, REMEGIO BUTACAN AND NEMESIO OÑATE, INTHEIR PRIVATE CAPACITIES AND/OR AS EX-OFICIO PROVINCIAL SHERIFF AND DEPUTY SHERIFF OFCAGAYAN, RESPECTIVELY, AND BIENVENIDO


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CACATIAN, AS DEPUTY REGISTER OF DEEDS OF CAGAYAN

.2. No. L6("4(1 anuar+ 3*, 1"!1

/u%;ect? $ppeal fro& the decision of - of -aga+an

inoling the sale of a ho&estead to satisf+ a ciil ;udg&ent

against the grantee 9plaintiff)Bdates are &aterial

"ACTS%

'laintiff sought annul&ent of the eecution of aho&estead issued to the& %+ the proper land authorities on

/epte&%er (3, 1"5(. The pu%lic sale was conducted %+ the

'roincial /heriff of -aga+an on une (, 1"#( to satisf+ a

;udg&ent against Lino $rtates in the a&ount of '1,4!#.35 andawarded against Daniel r%i for ph+sical in;uries inflicted %+

the for&er against the latter on Octo%er (1, 1"55. n the

eecution sale, the propert+ was sold to the ;udg&ent creditor

9Daniel r%i), the onl+ %idder.n their co&plaint, plaintiff sought the pu%lic sale of

the land to %e declared null and oid. The+ contend that? 1)

The sale of the ho&estead to satisf+ an inde%tedness of Lino

$rtates that accrued on Octo%er (1, 1"55, iolated the

proision of the 'u%lic Land law ee&pting said propert+fro& eecution for an+ de%t contracted within fie +ears fro&

the date of the issuance of the patent@ () Defendant r%i, with

the intention of defrauding the plaintiffs, eecuted on une (#,1"#1 a deed for the sale of the sa&e parcel of land to

defendant -risanto /olien, a &inor and that as a result of the

afore&entioned transactions, defendants r%i and /olien

entered into the possession of the land and depried plaintiffsof the owners share in the rice crops harested during the

agricultural +ear 1"#161"#(.

The - upheld the regularit+ and alidit+ of theeecution sale. On the other hand, it held that the sale of the

lands %+ r%i to &inor /olien was si&ulated. The courtordered r%i to recone+ the propert+ to the plaintiffs upon

the latterEs pa+&ent of '1,4!#.359+ung da&ages sa ph+sicalin;uries) plus plus the sheriffEs fee and interests. :ence, this

appeal.

ISSUE% 8hether or not the pu%lic eecution sale of the

ho&estead is alid

!ELD%

No. /ection 11 of the 'u%lic Land law 9-o&&onwealth $ct

141) proides as follows?

F>cept in faor of the oern&ent or an+ of its %ranches,units, or institution, or legall+ constituted %anking

corporations, 'ands a/2ied nde &ee patent o

*oestead povisions s*a'' not (e s(3e/t to en/(an/e

o a'ienation &o t*e date o& t*e appova' o& t*e

app'i/ation and &o a te o& &ive 0eas &o and a&te t*e

date o& issan/e o& t*e patent o +ant, no s*a'' t*e0

(e/oe 'ia('e to t*e satis&a/tion o& an0 de(t /onta/ted

pio to t*e e4piation o& said peiod, %ut the i&proe&entsor crops on the land &a+ %e &ortgaged or pledged to 7ualified

persons, associations or corporations.G

$s thus prescri%ed %+ law, for a period of fie +ears

fro& the date of the goern&ent grant, lands ac7uired %+ free

or ho&estead patent shall not onl+ %e incapa%le of %eingencu&%ered or alienated ecept in faor of the goern&ent

itself or an+ of its institutions or of dul+ constituted %anking

corporations, %ut also, the+ shall not %e lia%le to the

satisfaction of an+ de%t contracted within the said periodwhether or not the inde%tedness shall &ature during or after

the prohi%ited ti&e. This proision against the alienation or

encu&%rance of pu%lic lands granted within fie +ears fro&

the issuance of the patent, it has %een held, is &andator+@ asale &ade in iolation thereof is null and oid # and produces

no effect whatsoeer.

n the case at %ar, the ho&estead patent coering theland in 7uestion was issued to appellants on /epte&%er (3

1"5(, and it was sold at pu%lic auction to satisf+ the ciil

lia%ilit+ of appellant Lino $rtates to Daniel r%i, ad;udged on

Harch 14, 1"5#. There can %e no dou%t that the award ofda&ages to r%i created for $rtates a ciil o%ligation, an

inde%tedness, that co&&enced fro& the date such o%ligation

was decreed on Harch 14, 1"5#. -onse7uentl+, it is eident

that it cannot %e enforced against, or satisfied out of, the sale

of the ho&estead lot ac7uired %+ appellants less than 5 +ears %efore the o%ligation accrued.

Dou%ts hae %een epressed as to whether the wordsIde%t contracted prior to the epiration of said periodI 9of 5

+ears fro& and after the grant) would include the ciil lia%ilit+

arising fro& a cri&e co&&itted %+ the ho&esteader. 8hile

there is no direct 'hilippine precedent on this point, there arearious reasons wh+ the non6lia%ilit+ of the ho&estead grant

should %e etended to etra6contractual o%ligations. irst and

fore&ost, whether it %e iewed as an ee&ption or as a

condition attached to the grant to encourage people to settleand cultiate pu%lic land, the i&&unit+ in 7uestion is in

consonance with the definite pu%lic polic+ underl+ing thesegrants, which is to Ipresere and keep in the fa&il+ of the

ho&esteader that portion of pu%lic land which the /tate hasgien to hi&I so he &a+ hae a place to lie with his fa&il+

and %eco&e a happ+ citi0en and a useful &e&%er of societ+

1* and the ee&ption should not %e gien restrictieapplication.

:ence, the eecution sale in this case %eing null and

oid, the possession of the land should %e returned to theowners, the herein appellants %ut Lino $rtates shall continue

to %e under o%ligation to satisf+ the ;udg&ent de%t to Daniel

r%i in the su& of '1,4!#.35, with legal interest thereon.

5) 6UIROGA vs. #ARSON7S !ARD8ARE

9) CONCRETE AGGREGATES vs. CTA

CONCRETE AGGREGATES vs. CA and

COMMISSIONER O" INTERNAL REVENUE

#etitione :Con/ete A++e+ates, In/.) J do&estic

corporation with %usiness address at Longos, Kue0on -it+ and

has aggregate plant in Hontal%an, 2i0al which processes rock

aggregates &ined %+ it fro& priate lands and is engaged in


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Harch 1!, 1" J 'etitioner rendered a letter6decision

cancelling the assess&ent for deficienc+ inco&e ta %ut

&odif+ing the assess&ent for deficienc+ contractors ta %+increasing due to '1"3,4!5.55. nsatisfied, priate respondent

re7uested for a reconsideration or reinestigation of the

&odified assess&ent. $t the sa&e ti&e, it filed in the

respondent court a petition for reiew of the said letter6decision of the petitioner. 8hile the petition was pending

%efore the respondent court 9-ourt of $ppeals), petitioner

issued a final decision dated $ugust 3, 1" reducing the

assess&ent for deficienc+ contractors ta fro& '1"3,4!5.55 to'4#,51#.41, eclusie of surcharge and interest.

ul+ 1(, 1""3 J 2espondent court rendered the decision of

setting aside respondents decision and cancelling the

deficienc+ contractors ta assess&ent in the a&ount of '4#,51#.41 eclusie of surcharge and interest for the fiscal

+ear ended Harch 31, 1"!.

ISSUE%

8hether or not $teneo de Hanila niersit+, through its

auiliar+ unit or %ranch M the nstitute of 'hilippine -ulture

M perfor&s the work of an independent contractor and, thus,

su%;ect to the three percent contractors ta leied %+ then

/ection (*5 of the National nternal 2eenue -ode</ec. (*5. -ontractor, proprietors or operators of dock+ards,

and others. M $ contractors ta of three per centum of the

gross receipts is here%+ i&posed on the following?

91#) Ausiness agents and other independent contractors ecept

persons, associations and corporations under contract for

e&%roider+ and apparel for eport, as well as their agents andcontractors and ecept gross receipts of or fro& a pioneer

industr+ registered with the Aoard of nest&ents under

2epu%lic $ct No. 51#?

The ter& Iindependent contractorsI include persons 9;uridical

or natural) not enu&erated a%oe 9%ut not includingindiiduals su%;ect to the occupation ta under /ection 1( of

the Local Ta -ode) whose actiit+ consists essentiall+ of thesale of all kinds of serices for a fee regardless of whether or

not the perfor&ance of the serice calls for the eercise or use

of the ph+sical or &ental faculties of such contractors or their e&plo+ees.

#ETITIONER7S CONTENTION%

- 2espondent court erred in holding that priaterespondent is not an Iindependent contractorI within

the puriew of /ection (*5 of the Ta -ode. To petitioner, the ter& Iindependent contractorI, as

defined %+ the -ode, enco&passes all kinds of

serices rendered for a fee and that the onl+

eceptions are the following?a. 'ersons, association and corporations under

contract for e&%roider+ and apparel for eport

and gross receipts of or fro& pioneer industr+

registered with the Aoard of nest&ent under 2.$. No. 51#@

%. ndiiduals occupation ta under /ection 1( of

the Local Ta -ode 9under the old /ection 1(

%P of the Ta -ode)@ andc. 2egional or area head7uarters esta%lished in the

'hilippines %+ &ultinational corporations,

including their alien eecuties, and which

head7uarters do not earn or derie inco&e fro&

the 'hilippines and which act as superisor+co&&unication and coordinating centers for their

affiliates, su%sidiaries or %ranches in the $sia

'acific 2egion 9/ection (*5 of the Ta -ode).

- /ince priate respondent falls under the definition ofan Iindependent contractorI and is not a&ong theafore&entioned eceptions, priate respondent is

therefore su%;ect to the 3 contractors ta i&posed

under the sa&e -ode.

RULING%

'etitioner erred in appl+ing the principles of ta ee&ption

without first appl+ing the well6settled doctrine of stric

interpretation in the i&position of taes. The -o&&issionershould hae deter&ined first if priate respondent was coered

%+ /ection (*5, appl+ing the rule of strict interpretation of

laws i&posing taes and other %urdens on the populace, %efore

asking $teneo to proe its ee&ption therefro& 9to fall underits coerage, /ection (*5 of the National nternal 2eenue

-ode re7uires that the independent contractor %e engaged in

the %usiness of selling its serices). The -ourt takes thisoccasion to reiterate the horn%ook doctrine in theinterpretation of ta laws that I9a) statute will not %e construed

as i&posing a ta unless it does so clearl, e%pressl, and

unambiguousl . . . "$ ta% cannot be imposed without clear

and e%press words for that purpose. $ccordingl+, the generarule of re7uiring adherence to the letter in construing statutes

applies with peculiar strictness to ta% laws and the proisions

of a taing act are not to be etended %+i&plication.I 'arentheticall+, in answering the 7uestion of who

is su%;ect to ta statutes, it is %asic that Iin case of dou%t, such

statutes are to %e construed &ost strongl+ against the

goern&ent and in faor of the su%;ects or citi0ens %ecause

%urdens are not to %e i&posed nor presu&ed to %e i&posed %e+ond what statutes epressl+ and clearl+ i&port.I

The -ourt find no eidence that $teneos nstitute o

'hilippine -ulture eer sold its serices for a fee to an+one orwas eer engaged in a %usiness apart fro& and independentl+

of the acade&ic purposes of the uniersit+. The records do not

show that $teneos '- in fact contracted to sell its research

serices for a fee. Horeoer, the -ourt of Ta $ppealsaccuratel+ and correctl+ declared that the I funds recei!ed b

the teneo de anila 3ni!ersit are technicall not a fee

The+ &a+ howeer fall as gifts or donations which are ta6

ee&ptI as shown %+ priate respondents co&pliance with there7uire&ent of /ection 1(3 of the National nternal 2eenue

-ode proiding for the ee&ption of such gifts to an

educational institution.

unds receied %+ $teneos nstitute of 'hilippine -ulture arenot gien in the concept of a fee or price in echange for the

perfor&ance of a serice or delier+ of an o%;ect %ut rather

the a&ounts are in the nature of an endow&ent or donation

gien %+ '-s %enefactors solel+ for the purpose osponsoring or funding the research with no strings attached

/uch sponsorships are su%;ect to '-s ter&s and conditions

No proprietar+ or co&&ercial research is done, and '-

retains the ownership of the results of the research, includingthe a%solute right to pu%lish the sa&e. The cop+rights oer the

results of the research are owned %+ $teneo and, conse7uentl+


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no portion thereof &a+ %e reproduced without its

per&ission. The a&ounts gien to '-, therefore, &a+ not %e

dee&ed, it %ears stressing as fees or gross receipts that can %esu%;ected to the three percent contractors ta.

Kuestioned transactions of $teneos nstitute of 'hilippine

-ulture cannot %e dee&ed either as a contract of sale or a

contract of a piece of work. IA+ the contract of sale, one of thecontracting parties o%ligates hi&self to transfer the ownership

of and to delier a deter&inate thing, and the other to pa+

therefor a price certain in &one+ or its e7uialent.I A+ its er+

nature, a contract of sale re7uires a transfer of ownership.Thus, $rticle 145 of the -iil -ode Iepressl+ &akes the

o%ligation to transfer ownership as an essential ele&ent of the

contract of sale, following &odern codes 9er&an and /wiss).

Transfer of title or an agree&ent to transfer it for a price paidor pro&ised to %e paid is the essence of sale.I n the case of a

contract for a piece of work, Ithe contractor %inds hi&self to

eecute a piece of work for the e&plo+er, in consideration of a

certain price or co&pensation. . . . f the contractor agrees to produce the work fro& &aterials furnished %+ hi&, he shall

delier the thing produced to the e&plo+er and transfer

do&inion oer the thing, . . .I neluda%l+, whether the contract

%e one of sale or one for a piece of work, a transfer of

ownership is inoled and a part+ necessaril+ walks awa+ withan o%;ect. n the case at %ench, it is clear fro& the eidence on

record that there was no sale either of o%;ects or serices

%ecause there was no transfer of ownership oer the researchdata o%tained or the results of research pro;ects undertaken %+

the nstitute of 'hilippine -ulture.

urther&ore, it is clear that the research actiit+ of the

nstitute of 'hilippine -ulture is done in pursuance of &aintaining $teneos uniersit+ status and not in the course of

an independent %usiness of selling such research with profit in

&ind.

) TOOTA S!A8, INC. vs. CA

G.R. No. L-116650 May 23, 1995TOOTA S!A8, INC., petitione,

vs.

COURT O" A##EALS and LUNA L. SOSA, espondents.

DAVIDE, $R., J.:

"ACTS%

1) /o&eti&e in une of 1"", Luna L. /osa wanted to

purchase a To+ota Lite $ce. t was then a sellers&arket and /osa had difficult+ finding a dealer with

an aaila%le unit for sale. Aut upon contacting To+ota

/haw, nc., he was told that there was an aaila%le

unit. /o on 14 une 1"", /osa and his son, il%ert,went to the To+ota office at /haw Aouleard, 'asig,

Hetro Hanila. There the+ &et #opon+ Benado, a

sales representatie of To+ota.

() /osa e&phasi0ed to Aernardo that he needed the Lite

$ce not later than 1! une 1"". Aernardo assured

/osa that a unit would %e read+ for pick up at 1*?**

a.&. on 1! une 1"". Aernardo then signed theI$gree&ents Aetween Hr. /osa Q 'opong Aernardo

of To+ota /haw, nc.I t was also agreed upon %+ the

parties that the %alance of the purchase price would

%e paid %+ credit financing through A.$. inance, and

for this il%ert, on %ehalf of his father, signed thedocu&ents of To+ota and A.$. inance pertaining to

the application for financing.

AGREEMENTS BET8EEN MR. SOSA #O#ONG

BERNARDO O" TOOTA S!A8, INC.F

1. all necessar+ docu&ents will %e su%&itted to TO=OT$

/:$8, N-. 9'O'ON A>2N$2DO) a week after, uponarrial of Hr. /osa fro& the 'roince 9Harindu7ue) where the

unit will %e used on the 1"th of une.

(. the downpa+&ent of '1**,***.** will %e paid %+ Hr. /osa

on une 15, 1"".

3. the TO=OT$ /:$8, N-. LT> $-> +ellow, will %e pick6

up sicP and released %+ TO=OT$ /:$8, N-. on the 1!th of

une at 1* a.&.

Cer+ trul+ +ours,

9/gd.) 'O'ON A>2N$2DO.

3) On 15 une 1"", /osa and il%ert went to To+ota todelier the downpa+&ent of '1**,***.**. The+ &e

Aernardo who then acco&plished a printed Cehicle

/ales 'roposal 9C/') No. "(, on which il%ersigned under the su%heading -ONO2H>.

4) On 1! une 1"", Aernardo infor&ed /osa that the

ehicle cannot %e deliered %ecause Fnalusot ang uning i%ang &alakas.G To+ota howeer contends that the

Lite $ce was not deliered to /osa %ecause of the

disapproal %+ A.$. inance of the credit financing

application of /osa. t further alleged that a particularunit had alread+ %een resered and ear&arked for

/osa %ut could not %e released due to the uncertaint+of pa+&ent of the %alance of the purchase price

To+ota then gae /osa the option to purchase the uni %+ pa+ing the full purchase price in cash %ut /osa

refused.

5) /osa sent two letters to To+ota de&anding the refund

of the '1**,*** down pa+&ent plus interest and

da&ages. n its answer, To+ota alleged that no sale

was entered into %etween it and /osa.

ISSUE%

1) 8hether or not the standard C/' or C>:-L>

/L$>/ '2O'O/$L was the true and docu&entedunderstanding of the parties which would hae led to

the ulti&ate contract of sale<

!ELD%

1) NO, C/' is not a contract of sale. Neither logic no

recourse to ones i&agination can lead to the

conclusion that C/' is a perfected contract of sale.

At. 19


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$ contract of sale &a+ %e a%solute or conditional.

At. 19>) LIMETAI SONS MILLING, INC. vs. CA

LIMKETKAI SONS MILLING, INC. !. COURT OF APPEALS, BANK OF THE PHILIPPINE ISLANDS "#$ NATIONAL BOOK STORE, %&!(#$)!..2. No. 115*" Dece&%er 1, 1""5

"ACTS%

'hilippine 2e&nants -o., nc. constituted A' as itstrustee to &anage, ad&inister, and sell its real estate propert+.

One such piece of propert+ placed under trust was the disputed

lot, a 33,*5#6s7uare &eter lot at Aarrio Aagong log, 'asig,

Hetro Hanila. 'edro 2eilla, r., a licensed real estate %roker

was gien for&al authorit+ %+ A' to sell a lot for '1,***.**

per s7uare &eter. Aroker 2eilla contacted $lfonso Li& o

Li&ketkai /ons Hilling, nc. who agreed to %u+ the land. Onul+ ", 1", 2eilla infor&ed A' that he had procured a

%u+er. On ul+ 11, 1", petitioners officials, $lfonso Li&

and $l%ino Li&ketkai, went to A' to confir& the sale. Cice6

'resident Herlin $l%ano and $sst. Cice6'resident $ro&inentertained the&. The parties agreed that the lot would %e sold

at '1,***.** per s7uare &eter to %e paid in cash. The authorit+

to sell was on a first co&e, first sered and non6eclusie

%asis@ there is no dispute oer petitioners %eing the first co&erand the %u+er to %e first sered. $lfonso Li& then asked if it

was possi%le to pa+ on ter&s. The %ank officials stated tha

there was no har& in tr+ing to ask for pa+&ent on ter&s

%ecause in preious transactions, the sa&e had %een allowedt was the understanding, howeer, that should the ter&

pa+&ent %e disapproed, then the price shall %e paid in cash

Two or three da+s later, petitioner learned that its offer to pa+

on ter&s had %een fro0en. $lfonso Li& went to A' on ul+1, 1" and tendered the full pa+&ent of '33,*5#,***.** to

$l%ano. The pa+&ent was refused %ecause $l%ano stated that

the authorit+ to sell that particular piece of propert+ in 'asig

had %een withdrawn fro& his unit. The sa&e check was

tendered to A' Cice6'resident Nelson Aona who also refusedto receie pa+&ent. $n action for specific perfor&ance with

da&ages was filed %+ petitioner against A'. n the course of

the trial, A' infor&ed the trial court that it had sold the propert+ under litigation to National Aookstore on ul+ 14

1"".

The 2T- ruled that there was a perfected contract ofsale %etween petitioner and A'. t stated that there wa

&utual consent %etween the parties@ the su%;ect &atter is

definite@ and the consideration was deter&ined. t concluded

that all the ele&ents of a consensual contract are attendant. tordered the cancellation of a sale effected %+ A' to

respondent National Aook /tore 9NA/) while the case was pending and the nullification of a title issued in faor of said

respondent NA/.

The -$ reersed the decision of the 2T-. :ence, the

appeal.

ISSUE% 8hether or not there was a perfected contrac

%etween petitioner and respondent

!ELD?

=es. The negotiation or preparation stage started with

the authorit+ gien %+ 'hilippine 2e&nants to A' to sell the

lot, followed %+ 9a) the authorit+ gien %+ A' and confir&ed %+ 'hilippine 2e&nants to %roker 2eilla to sell the propert+

9%) the offer to sell to Li&ketkai, 9c) the inspection of the

propert+ and finall+ 9d) the negotiations with $ro&in and

$l%ano at the A' offices. The perfection of the contract took place when $ro&in and $l%ano, acting for A', agreed to sell

and $lfonso Li& with $l%ino Li&ketkai, acting for petitioner

Li&ketkai, agreed to %u+ the disputed lot at '1,***.** per

s7uare &eter. $side fro& this there was the earlier agree&ent %etween petitioner and the authori0ed %roker. There was a

concurrence of offer and acceptance, on the o%;ect, and on the

cause thereof.


7/17

n the case at %ench, the allegation of NA/ that there

was no concurrence of the offer and acceptance upon the cause

of the contract is %elied %+ the testi&on+ of the er+ A'official with who& the contract was perfected. $ro&in and

$l%ano concluded the sale for A'. The fact that the deed of

sale still had to %e signed and notari0ed does not &ean that no

contract had alread+ %een perfected. $ sale of land is alidregardless of the for& it &a+ hae %een entered into. The

re7uisite for& under $rticle 145 of the -iil -ode is &erel+

for greater efficac+ or conenience and the failure to co&pl+

therewith does not affect the alidit+ and %inding effect of theact %etween the parties. f the law re7uires a docu&ent or

other special for&, as in the sale of real propert+, the

contracting parties &a+ co&pel each other to o%sere that

for&, once the contract has %een perfected. Their right &a+ %eeercised si&ultaneousl+ with action upon the contract

9$rticle 135", -iil -ode).

MOTION FOR RECONSIDERATION 9na reerse +unga%oe&entioned decision)

.2. No. 115*". Harch (", 1""#

n this &otion for reconsideration, the -ourt is calledupon to take a second hard look on its Dece&%er 1, 1""5

decision reersing and setting aside respondent -ourt of

$ppealsE ;udg&ent of $ugust 1(, 1""4 that dis&issed petitioner Li&ketkai /ons Hilling nc.Es co&plaint for specific

perfor&ance and da&ages against priate respondents Aank of

the 'hilippine slands 9A') and National Aook /tore 9NA/).

!ELD%

The -ourt in To+ota /haw, nc. . -ourt of

$ppeals14P had alread+ ruled that a definite agree&ent on the

&anner of pa+&ent of the price is an essential ele&ent in thefor&ation of a %inding and enforcea%le contract of sale.

'etitionerEs ehi%its did not esta%lish an+ definitie agree&entor &eeting of the &inds %etween the concerned parties as

regards the price or ter& of pa+&ent. nstead, what &erel+appears therefro& is respondent A'Es repeated re;ection of

the petitionerEs proposal to %u+ the propert+ at '1,***R s7.&.

On the su%;ect of consent as an essential ele&ent of

contracts, $rticle 131" of the -iil -ode has this to sa+?

F$2T. 131". -onsent is &anifested %+ the &eeting of the offer

and the acceptance upon the thing and the cause which are toconstitute the contract. The offer &ust %e certain and the

acceptance a%solute. $ 7ualified acceptance constitutes a

counter6offer.G

2espondent A' offered to sell the disputed propert+

for '1,***Rs7. &. :oweer, petitionerEs acceptance of the offer

is conditioned upon or 7ualified %+ its proposed ter&s1#P to

which respondent A' &ust first agree with. The acceptance of an offer &ust therefore %e un7ualified and a%solute. n other

words, it &ust %e identical in all respects with that of the offer

so as to produce consent or &eeting of the &inds. This was

not the case herein considering that petitionerEs acceptance of the offer was 7ualified, which a&ounts to a re;ection of the

original offer.

Horeoer, petitionerEs case failed to hurdle the strict

re7uire&ents of the /tatute of rauds. $rticle 14*3 states?

F$2T. 14*3. 6 The following contracts are unenforcea%le

unless the+ are ratified?

91)

9() Those that do not co&pl+ with the /tatute of rauds as setforth in this nu&%er. n the following cases an agree&ent

hereafter &ade shall %e unenforcea%le %+ action, unless the

sa&e, or so&e note or &e&orandu&, thereof, %e in writing

and su%scri%ed %+ the part+ charged, or %+ his agent@ eidencetherefore, of the agree&ent cannot %e receied without the

writing, or a secondar+ eidence of its contents?

*&+ A# "%&&) (% )& 0&"!1# (% " 0(# &%1($ )"# (#& 2&"%, (% (% )& !"0& ( %&"0 %(&%)2 (% ( "# 1#)&%&!) )&%&1#.

n this case there is a patent a%sence of an+ deed of

sale categoricall+ cone+ing the su%;ect propert+ fro&respondent A' to petitioner. >hi%its F>G, 1FG, (FG 3which

petitioner clai&s as proof of perfected contract of sale %etween

it and respondent A' were not su%scri%ed %+ the part+

charged, i.e., A', and did not constitute the &e&oranda or

notes that the law speaks of. To consider the& sufficienco&pliance with the /tatute of rauds is to %etra+ the aowed

purpose of the law to preent fraud and per;ur+ in the

enforce&ent of o%ligations.8:>2>O2>, in iew of the foregoing pre&ises

the -ourt here%+ 2$NT/ the &otion for reconsideration

and />T/ $/D> its Dece&%er 1, 1""5 decision.

;) TRADERS ROAL BAN vs. CUISON

LUMBER CO., INC

=) RE#UBLIC O" T!E #!ILI##INES vs

"LORENDO

RE#UBLIC O" T!E #!ILI##INES, epesented (0 t*e

#*i'ippine E/onoi/ Hone At*oit0 :#EHA), petitione

vs. ANTONIO and LILI "LORENDO, espondents.

"ACTS% >port 'rocessing Sone $uthorit+ 9predecessor o

'>S$) initiated an epropriation proceeding of seen parcels

of land located at Aarrio %o, Lapu6Lapu -it+, -e%u, owned %+

respondents. The purpose of the epropriation was to esta%lishand deelop an eport processing 0one or a part thereof on

those real properties. 2T- rendered the decision ordering the

epropriation of the ! parcels of land with the aggregate area

of 1!,"#!s7.&. for a total of '(#,"51,(5*. 2T- ordered the pa+&ent of '1,5** per s7.&. with 1( interest per annu&

fro& the ti&e petitioner took possession on Harch 1(, 1""(

1 >hi%it F>G is the written proposal su%&itted %+ $lfonso =. Li&

in %ehalf of petitioner Li&ketkai /ons Hilling, nc., offering to

%u+ the su%;ect propert+ at '1,***.**Rs7. &2 >hi%it FG is petitionerEs letter dated ul+ ((, 1" reiterating

its offer to %u+ the su%;ect propert+ at '1,***Rs7. &. %ut now on

cash %asis3 Letter %+ petitioner addressed to respondent A' clai&ing the

eistence of a perfected contract of sale of the su%;ect propert+

%etween the&


8/17

until the full pa+&ent thereof. 'etitioner filed an appeal in the

-$ 7uestioning the correctness of '1,5** per s7. &. as ;ust

co&pensation. 8hile the appeal was pending, the partiesreached an a&ica%le settle&ent 9co&pro&ise agree&ent)?

1. '1,5** per s7. &. aluation fied %+ the 2T-@

(. waier %+ respondents of the pa+&ent of the court6awarded1( interest and

3. presentation %+ respondents of clean titles of all the su%;ect

properties %efore pa+&ent %+ petitioner.

The parties eecuted a deed of a%solute sale for one of the

seen parcels of land for the transfer of ownership fro&

respondent to petitioner. The+ hae agreed that a deed of

a%solute sale will %e eecuted for the re&aining si parcels of land as soon as the respondents could settle or clear the

encu&%rances or other pro%le&s affecting the&.

The petitioner prepared a ;oint &otion to dis&iss theepropriation proceedings %ut the respondent $ntonio

lorendo refused to sign %ecause there are still three lots

which had not +et %een paid. 2espondents proposed that a

partial co&pro&ise agree&ent %e eecuted to coer the four

lots that had alread+ %een sold and transferred to '>S$.'etitioner did not agree %ecause it is contrar+ to their

co&pro&ise agree&ent.

8hile the+ were still tr+ing to decide, -$ rendered the

decision affir&ing the decision of the 2T- %ut &odified the

&arket alue fro& '1,5** to '1,***. No appeal was taken and

the decision attained finalit+.

On Octo%er (, (**(, respondents filed a &otion for eecution

of the final ;udg&ent of the -$ with respect to the three

parcels of land which the 2T- granted. Notices of garnish&ent were sered on the Land Aank of the 'hilippines,

Lapu6Lapu -it+ 9depositor+ %ank of the petitioner) for thea&ount of '#,1*,3**.

'etitioner filed a &otion to 7uash the writ of eecution and an

urgent e6parte &otion to lift the garnish&ent %ut were denied

%+ 2T-. 'etitioner filed a petition for certiorari and prohi%ition in the -$ %ut was dis&issed for lack of &erit.

ISSUE% 8hether or not the co&pro&ise agree&ent of the

parties constituted res udicata and therefore the une (5, (**(decision of the -$ could not hae superseded it.

#etitione7s /ontention% parties co&pro&ise agree&ent

%eca&e res udicata and was i&ple&ented upon the pa+&entof the four lots. $ccordingl+, respondents are estopped fro&

repudiating this agree&ent %+ insisting on the eecution of the

une (5, (**( -$ decision.

Respondent7s /ontention? there was no perfected

co&pro&ise agree&ent oer the three re&aining lots as the+

were not taken out of the ;udg&ent of the appealed case in the

-$ which %eca&e final.

!ELD% =es, there was a perfected co&pro&ise agree&ent. $

co&pro&ise agree&ent is a contract where%+ the parties &ake

reciprocal concessions in order to resole their differences and

thus aoid litigation or to put an end to one alread+

co&&enced 8hen it co&plies with the re7uisites and

principles of contracts, it %eco&es a alid agree&ent whichhas the force of law %etween the parties. t has the effect and

authorit+ of res udicata once entered into, een withou

;udicial approal. t is a si&ple contract perfected %+ &ere

agree&ent. :oweer, it needs ;udicial approal for itseecution.

The co&pro&ise agree&ent the parties eecuted was in the

for& of a contract of sale. The ele&ents of a alid contract ofsale are? 9a) consent or &eeting of the &inds@ 9%) deter&inate

su%;ect &atter and 9c) price certain in &one+ or its e7uialent

$ll the ele&ents are present here. The parties agreed on the

sale of a deter&inate o%;ect 9the seen lots) and the pricecertain 9'(#,"51,(5*).

The delier+ of clean titles was not a condition i&posed on the

perfection of the contract of sale %ut a condition i&posed on petitioners o%ligation to pa+ the purchase price of these lots.

The co&pro&ise agree&ent reached %+ the parties while the

appeal was pending in the -$ is alid. t is alid een if there

is alread+ a final and eecutor ;udg&ent. 'arties are %ound toa%ide %+ the& in good faith and &a+ not %e discarded

unilaterall+. 'etition for certiorari was granted.

1) MANILA METAL CONTAINER

COR#ORATION vs. #NB

MANILA METAL CONTAINER COR#. V #NB :G.R. No

1; De/e(e , )

- 'etition for reiew on certiorari of the Decision othe -ourt of $ppeals which affir&ed the decision o

2T- 'asig and its 2esolution den+ing the &otion for

reconsideration filed %+ petitioner Hanila Heta

-ontainer -orporation 9HH--)#ARTIES%

MANILA METAL CONTAINER COR#ORATION

:MMCC)? petitioner RENALDO C. TOLENTINO ? interenor #!ILI##INE NATIONAL BAN :#NB) ? respondentDMCIJ#RO$ECT DEVELO#ERS, INC. ? interenor

'ON>NT>? CALLE$O, SR., J .%"ACTS%

'etitioner 9HH--) was the owner of a ,*15 & ( parcel o

land located in Handalu+ong , Hetro Hanila. The propert+was coered %+ Transfer -ertificate of Title 9T-T) No

33(*" of the 2egistr+ of Deeds of 2i0al. To secure

a '"**,***.** loan it had o%tained fro& respondent 'NA

petitioner eecuted a real estate &ortgage oer the lot2espondent 'NA later granted petitioner a new credi

acco&&odation of '1,***,***.**@ and, on Noe&%er 1#

1"!3, petitioner eecuted an $&end&ent of 2eal >state

Hortgage oer its propert+. On Harch 31, 1"1, petitionesecured another loan of '#53,***.** fro& respondent 'NA

pa+a%le in 7uarterl+ install&ents of '3(,#5*.**, plus interest

and other charges.

$ugust 5, 1"( 6 respondent 'NA filed a petition for

etra;udicial foreclosure of the real estate &ortgage and


9/17

sought to hae the propert+ sold at pu%lic auction

for '"11,53(.(1 9petitioners outstanding o%ligation to

respondent 'NA as of une 3*, 1"(, plus interests andattorne+s fees). The propert+ was then sold at pu%lic auction

9/epte&%er (, 1"() where respondent 'NA was declared the

winning %idder for '1,***,***.**. The -ertificate of

/ale issued in its faor was registered with the Office of the2egister of Deeds 92i0al), and was annotated at the dorsal

portion of the title on e%ruar+ 1!, 1"3. Thus, the period to

redee& the propert+ was to epire on e%ruar+ 1!, 1"4.

'etitioner then re7uested that it %e granted an etension of ti&e to redee&Rrepurchase the propert+ %ut 'NA infor&ed

petitioner that the re7uest had %een referred to its 'asa+ -it+

Aranch for appropriate action and reco&&endation. $lso,

petitioner reiterated its re7uest for a one +ear etension fro&e%ruar+ 1!, 1"4 within which to redee&Rrepurchase the

propert+ on install&ent %asis. Heanwhile, so&e 'NA 'asa+

-it+ Aranch personnel infor&ed petitioner that as a &atter of

polic+, the %ank does not accept Ipartial rede&ption.I /ince petitioner failed to redee& the propert+, the 2egister of Deeds

cancelled T-T No. 3(*" on une 1, 1"4, and issued a new

title in faor of 'NA. 'etitioners offers had not +et %een acted

upon %+ respondent 'NA.

Heanwhile, the /pecial $ssets Hanage&ent Depart&ent

9/$HD) had prepared a state&ent of account, and as of une

(5, 1"4 petitioners o%ligation a&ounted to '1,5!4,5#*.4!9Aid 'rice of '1,*5#,"(4.5*, interest, adances of insurance

pre&iu&s, adances on realt+ taes, registration epenses,

&iscellaneous epenses and pu%lication cost). 8hen apprised

of the state&ent of account, petitioner re&itted '!(5,***.** torespondent 'NA as Ideposit to repurchase,I and Official

2eceipt No. "!1"1 was issue.

/$HD then reco&&ended to the &anage&ent of 'NA that petitioner %e allowed to repurchase the propert+

for '1,5!4,5#*.**. n a letter 9Noe&%er 14, 1"4), 'NA&anage&ent infor&ed petitioner that it was re;ecting the offer

and the reco&&endation of the /$HD. t was suggested that petitioner purchase the propert+ for '(,##*,***.**, its

&ini&u& &arket alue. 'NA gae petitioner until Dece&%er

15, 1"4 to act on the proposal@ otherwise, its '!(5,***.**deposit would %e returned and the propert+ would %e sold to

other interested %u+ers.

'etitioner, howeer, did not agree to respondent 'NAs proposal. nstead, it wrote another letter 9Dece&%er 1(, 1"4)

re7uesting for reconsideration. 'NA replied in a letter

9Dece&%er (, 1"4), wherein it reiterated its proposal that

petitioner purchase the propert+ for '(,##*,***.**. 'NA againinfor&ed petitioner that it would return the deposit should

petitioner desire to withdraw its offer to purchase the propert+.

On e%ruar+ (5, 1"5, petitioner re7uested that 'NA

reconsider its letter dated Dece&%er (, 1"4. 'etitioner declared that it had alread+ agreed to the /$HDs offer to

purchase the propert+ for'1,5!4,5#*.4!, and that was wh+ it

had paid '!(5,***.**. 'etitioner warned 'NA that it would

seek ;udicial recourse should 'NA insist on the position.

On une 4, 1"5, respondent 'NA infor&ed petitioner that the

'NA AoD had accepted petitioners offer to purchase the

propert+, %ut for '1,"31,3".53 in cash less the '!(5,***.**

alread+ deposited with it. Na&e of petitioners 'resident

'a%lo a%riel, on page two of the letter has to affi his

signature. :oweer, he did not confor& %ut &erel+ indicatedthat he had receied it. 'etitioner did not respond, so 'NA

re7uested petitioner in a letter dated une 3*, 1" to su%&it

an a&ended offer to repurchase. Aut petitioner re;ected

respondents proposal in a letter 9ul+ 14, 1"). t &aintainedthat 'NA had agreed to sell the propert+ for '1,5!4,5#*.4!

and that since its '!(5,***.** downpa+&ent had %een

accepted, 'NA was proscri%ed fro& increasing the purchase

price of the propert+. 'etitioner aerred that it had a ne %alance pa+a%le in the a&ount of '#43,45(.34. 'NA, howeer

re;ected petitioners offer to pa+ the %alance 9'#43,45(.34) in a

letter 9$ugust 1, 1"").

$ugust (, 1"" J petitioner filed a co&plaint against 'NA for

I$nnul&ent of Hortgage and Hortgage oreclosure, Delier+

of Title, or /pecific 'erfor&ance with Da&ages.I 'etitioner

later filed an a&ended co&plaint. n its $nswer to theco&plaint, 'NA aerred, as a special and affir&atie defense

that it had ac7uired ownership oer the propert+ after the

period to redee& had elapsed. t clai&ed that no contract o

sale was perfected %etween it and petitioner after the period to

redee& the propert+ had epired.

8hile the case was pending, 'NA de&anded 9/epte&%er (*,

1""), that petitioner acate the propert+ within 15 da+s fro&notice, %ut petitioners refused.

Harch 1, 1""3 J petitioner offered to repurchase the propert+

for '3,5**,***.**. The offer was re;ected %+ 'NA 9letter dated$pril 13, 1""3). The preailing HC of the propert+ was

approi&atel+ '3*,***,***.**, and as a &atter of polic+, i

could not sell the propert+ for less than its &arket alue. une

(1, 1""3, petitioner offered to purchase the propert+for '4,(5*,***.** in cash. The offer was again re;ected %+

'NA.

Ha+ 31, 1""4 6 the trial court rendered ;udg&ent dis&issingthe a&ended co&plaint and 'NAs counterclai&. Ordered

'NA to refund the '!(5,***.** deposit petitioner had

&ade. The trial court ruled that there was no perfected contracof sale %etween the parties@ hence, petitioner had no cause of

action for specific perfor&ance against respondent. The tria

court declared that respondent had re;ected petitioners offer to

repurchase the propert+. 'etitioner, in turn, re;ected the ter&sand conditions contained in the une 4, 1"5 letter of the

/$HD. 8hile petitioner had offered to repurchase the

propert+ per its letter of ul+ 14, 1", the a&oun

of '#43,4((.34 was wa+ %elow the '1,(*#,3".53 whichrespondent 'NA had de&anded. t further declared tha

the '!(5,***.** re&itted %+ petitioner to 'NA on une 4

1"5 was a Ideposit,I and not a downpa+&ent or earnest

&one+.

une 1!, 1""3 6 petitioners Aoard of Directors approed

2esolution No. 36**4, where it waied, assigned and

transferred its rights oer the propert+ coered %+ T-T Nos33*"" and 3!*(5 in faor of Aa+ani a%riel, one of its

Directors. Thereafter, a%riel eecuted a Deed of $ssign&en

oer 51 of the ownership and &anage&ent of the propert+ in

faor of 2e+naldo Tolentino, who later &oed for leae to


10/17

interene as plaintiff6appellant. On ul+ 14, 1""3, the -$

issued a resolution granting the &otion, and likewise granted

the &otion of Tolentino su%stituting petitioner HH--, as plaintiff6appellant, and his &otion to withdraw as interenor.

-$ rendered ;udg&ent 9Ha+ 11, (***) affir&ing the decision

of the 2T-. t declared that petitioner o%iousl+ neer agreedto the selling price proposed %+ respondent 'NA

9'1,"31,3".53) since petitioner had kept on insisting that the

selling price should %e lowered to '1,5!4,5#*.4!. -learl+

therefore, there was no &eeting of the &inds %etween the parties as to the price or consideration of the sale. -$

ratiocinated that petitioners original offer to purchase the

su%;ect propert+ had not %een accepted %+ respondent 'NA. n

fact, it &ade a counter6offer through its une 4, 1"5 letter specificall+ on the selling price@ petitioner did not agree to the

counter6offer@ and the negotiations did not prosper. Horeoer,

petitioner did not pa+ the %alance of the purchase price within

the sit+6da+ period set in the une 4, 1"5 letter of respondent 'NA. -onse7uentl+, there was no perfected

contract of sale, and as such, there was no contract to rescind.

'NAs letter 9une 3*, 1") cannot reie the failed

negotiations %etween the parties. 'NA &erel+ asked petitioner to su%&it an a&ended offer to repurchase. 8hile petitioner

reiterated its re7uest for a lower selling price and that the

%alance of the repurchase %e reduced, howeer, 'NA re;ectedthe proposal. 'etitioner filed a &otion for reconsideration,

which the -$ likewise denied.

ISSUE%

8hether or not there was no perfected contract of sale

%etween parties

#ETITIONER7S CONTENTION%

1. t had accepted respondents offer &ade through the

/$HD, to sell the propert+ for '1,5!4,5#*.**. Thendeposited '!(5,***.** with the /$HD as partial

pa+&ent, eidenced %+ 2eceipt No. "!1"4 whichrespondent issued.

(. 'NA Aoard of Directors had approed petitioners

offer to purchase the propert+. t clai&s that this wasthe suspensie condition, the fulfill&ent of which

gae rise to the contract. 2espondent could no longer

unilaterall+ withdraw its offer to sell the propert+

for '1,5!4,5#*.4!, since the acceptance of the offer resulted in a perfected contract of sale@ it was o%liged

to re&it to respondent the %alance of the original

purchase price of '1,5!4,5#*.4!, while respondent

was o%liged to transfer ownership and delier the propert+ to petitioner 9$rticle 115")

3. 2espondent was proscri%ed fro& increasing the

interest rate after it had accepted respondents offer to

sell the propert+ for '1,5!4,5#*.**. -onse7uentl+,respondent could no longer alidl+ &ake a counter6

offer of '1,"31,!". for the purchase of the

propert+.

4. $lthough the'!(5,***.** was considered as Idepositfor the repurchase of the propert+I in the receipt

issued %+ the /$HD, the a&ount constitutes earnest

&one+ 9$rticle 14().

5. 'etitionerEs failure to append its confor&it+ to the

une 4, 1"4 letter of respondent and its failure to pa+

the %alance of the price as fied %+ respondent withinthe #*6da+ period fro& notice was to protes

respondents %reach of its o%ligation to petitioner. t

did not a&ount to a re;ection of respondents offer to

sell the propert+ since respondent was &erel+ seekingto enforce its right to pa+ the %alance

of '1,5!*,5#4.4!. n an+ eent, respondent had the

option either to accept the %alance of the offered

price or to cause the rescission of the contract.#. 'etitioners letters dated Harch 1, 1""3 and une (1

1""3 to respondent during the pendenc+ of the case

in the 2T- were &erel+ to co&pro&ise the pending

lawsuit, the+ did not constitute separate offers torepurchase the propert+.

RES#ONDENT7S CONTENTION%

1. 'arties neer graduated fro& the Inegotiation stageIas the+ could not agree on the a&ount of the

repurchase price of the propert+. $ll that transpired

was an echange of proposals and counter6proposals

nothing &ore. t insists that definite agree&ent on the

a&ount and on the &anner of pa+&ent of the priceare essential ele&ents in the for&ation of a %inding

and enforcea%le contract of sale. There was no such

agree&ent in this case.(. The concept of Isuspensie conditionI signifies a

future and uncertain eent upon the fulfill&ent of

which the o%ligation %eco&es effectie. t clearl+

presupposes the eistence of a alid and %indingagree&ent, the effectiit+ of which is su%ordinated to

its fulfill&ent. /ince there is no perfected contract in

the first place, there is no %asis for the application of

the principles goerning Isuspensie conditions.I3. /tate&ent of $ccount prepared %+ /$HD as of une

(5, 1"4 cannot %e classified as a counter6offer@ it issi&pl+ a recital of its total &onetar+ clai&s against

petitioner. Horeoer, the a&ount stated therein couldnot likewise %e considered as the counter6offer since

as ad&itted %+ petitioner, it was onl+

reco&&endation which was su%;ect to approal ofthe 'NA Aoard of Directors.

4. Neither can the receipt %+ the /$HD of '!(5,***.**

%e regarded as eidence of a perfected sale contract

The a&ount is &erel+ an acknowledg&ent of thereceipt of '!(5,***.** as deposit to repurchase the

propert+. The deposit of '!(5,***.** was accepted

%+ respondent on the condition that the purchase

price would still %e approed %+ its Aoard ofDirectors. 'ending such approal, it cannot %e legall+

clai&ed that respondent is alread+ %ound %+ an+

contract of sale with petitioner.

5. The /$HD does not hae the power to sellencu&%er, dispose of, or otherwise alienate the

assets, since the power to do so &ust e&anate fro&

its Aoard of Directors. The /$HD was no

authori0ed %+ respondents Aoard to enter intocontracts of sale with third persons inoling

corporate assets. There is a%solutel+ nothing on

record that respondent authori0ed the /$HD, or


11/17

&ade it appear to petitioner that it represented itself

as haing such authorit+.

#. 8hile respondents Aoard of Directors accepted petitioners offer to repurchase the propert+, the

acceptance was 7ualified, in that it re7uired a higher

sale price and su%;ect to specified ter&s and

conditions enu&erated therein. This 7ualifiedacceptance was in effect a counter6offer, necessitating

petitioners acceptance in return.

RULING%

$ contract is a &eeting of &inds %etween two persons

where%+ one %inds hi&self, with respect to the other, to gie

so&ething or to render so&e serice. nder $rticle 131 of

the New -iil -ode, contracts are perfected %+ &ere consentwhich is &anifested %+ the &eeting of the offer and the

acceptance upon the thing and the cause which are to

constitute the contract. Once perfected, the+ %ind other

contracting parties and the o%ligations arising therefro& haethe for& of law %etween the parties and should %e co&plied

with in good faith. The parties are %ound not onl+ to the

fulfill&ent of what has %een epressl+ stipulated %ut also to

the conse7uences which, according to their nature, &a+ %e in

keeping with good faith, usage and law.

A+ the contract of sale, one of the contracting parties o%ligates

hi&self to transfer the ownership of and delier a deter&inatething, and the other to pa+ therefor a price certain in &one+ or

its e7uialent. The a%sence of an+ of the essential ele&ents

will negate the eistence of a perfected contract of sale

9 Boston Bank of the Philippines !. analo$.

$ contract of sale is consensual in nature and is perfected upon

&ere &eeting of the &inds. 8hen there is &erel+ an offer %+

one part+ without acceptance of the other, there is no contract.8hen the contract of sale is not perfected, it cannot, as an

independent source of o%ligation, sere as a %inding ;uridicalrelation %etween the parties.

The stages of a contract of sale are as follows 9 (an iguel

Properties Philippines, Inc. !. 5uang$? 91) negotiation,

coering the period fro& the ti&e the prospectie contracting parties indicate interest in the contract to the ti&e the contract

is perfected@ 9() perfection, which takes place upon the

concurrence of the essential ele&ents of the sale which are the

&eeting of the &inds of the parties as to the o%;ect of thecontract and upon the price@ and 93) consummation, which

%egins when the parties perfor& their respectie undertakings

under the contract of sale, cul&inating in the etinguish&ent

thereof.

$ negotiation is for&all+ initiated %+ an offer, which,

howeer, &ust %e certain. $t an+ ti&e prior to the perfection

of the contract, either negotiating part+ &a+ stop thenegotiation. $t this stage, the offer &a+ %e withdrawn@ the

withdrawal is effectie i&&ediatel+ after its &anifestation. To

conert the offer into a contract, the acceptance &ust %e

a%solute and &ust not 7ualif+ the ter&s of the offer@ it &ust %e plain, une7uiocal, unconditional and without ariance of an+

sort fro& the proposal 9 delfa Properties, Inc. !. Court of

ppeals).

$ 7ualified acceptance or one that inoles a new proposa

constitutes a counter6offer and a re;ection of the original offer

$ counter6offer is considered in law, a re;ection of the originaoffer and an atte&pt to end the negotiation %etween the parties

on a different %asis. -onse7uentl+, when so&ething is desired

which is not eactl+ what is proposed in the offer, such

acceptance is not sufficient to guarantee consent %ecause an+&odification or ariation fro& the ter&s of the offer annuls the

offer. The acceptance &ust %e identical in all respects with that

of the offer so as to produce consent or &eeting of the &inds.

There was no perfected contract of sale %etween the parties onune 4, 1"5 on the ff grounds?

1) 'etitioner had until e%ruar+ 1!, 1"4

within which to redee& the propert+:oweer, since it lacked the resources, i

re7uested for &ore ti&e to

redee&Rrepurchase the propert+ under such

ter&s and conditions agreed upon %+ the parties. The re7uest, which was &ade

through a letter dated $ugust (5, 1"3, was

referred to the respondents &ain %ranch for

appropriate action. 8hen the petitioner was

told that respondent did not allow Ipatiaedeption,I it sent a letter to respondents

'resident reiterating its offer to purchase the

propert+. There was no response to petitioners letters dated e%ruar+ 1* and 15

1"4.

() The state&ent of account prepared %+ the/$HD stating that the net clai& o

respondent as of une (5, 1"4

was'1,5!4,5#*.4! cannot %e considered an

un7ualified acceptance to petitioners offerto purchase the propert+. The state&ent is

%ut a co&putation of the a&ount which petitioner was o%liged to pa+ in case

respondent would later agree to sell the propert+, including interests, adances on

insurance pre&iu&, adances on realt+

taes, pu%lication cost, registration epensesand &iscellaneous epenses.

3) There is no eidence that the /$HD was

authori0ed %+ respondents Aoard oDirectors to accept petitioners offer and sel

the propert+ for '1,5!4,5#*.4!. $n+

acceptance %+ the /$HD of petitioners

offer would not %ind respondent 9 F ealt #e!elopment, Inc. !s. #iesehuan Freigh

(er!ices, Inc.). Thus, a corporation can onl+

eecute its powers and transact its %usiness

through its Aoard of Directors and throughits officers and agents when authori0ed %+ a

%oard resolution or its %+6laws.

4) t appears that the /$HD had prepared areco&&endation for respondent to accep

petitioners offer to repurchase the propert+

een %e+ond the one6+ear period@ i

reco&&ended that petitioner %e allowed to


12/17

redee& the propert+ and pa+ '1,5!4,5#*.**

as the purchase price. 2espondent later

approed the reco&&endation that the propert+ %e sold to petitioner. Aut

respondent set the purchase price

at '(,##*,***.**. n fine, respondents

acceptance of petitioners offer was7ualified, hence can %e at &ost considered

as a counter6offer. f petitioner had accepted

this counter6offer, a perfected contract of

sale would hae arisen@ as it turns out,howeer, petitioner &erel+ sought to hae

the counter6offer reconsidered. This re7uest

for reconsideration would later %e re;ected

%+ respondent.

5) t appears that, per its letter to petitioner

dated une 4, 1"5, the respondent had

decided to accept the offer to purchase the propert+ for '1,"31,3".53. :oweer, this

a&ounted to an a&end&ent of respondents

7ualified acceptance, or an a&ended

counter6offer, %ecause while the respondent

lowered the purchase price, it still declaredthat its acceptance was su%;ect to the ter&s

and conditions?

t appears that although respondent re7uested petitioner to

confor& to its a&ended counter6offer, petitioner refused and

instead re7uested respondent to reconsider its a&ended

counter6offer. 'etitioners re7uest was ulti&atel+ re;ected andrespondent offered to refund its '!(5,***.** deposit.

#) The '!(5,***.** re&itted to respondent is

not Iearnest &one+I which could %econsidered as proof of the perfection of a

contract of sale under $rticle 14( of the New -iil -ode. This contention is likewise

negated %+ the stipulation of facts which the parties entered into in the trial court.

The '!(5,***.** was &erel+ a deposit to %e applied as part of the purchase price of the propert+, in the eent that respondent

would approe the reco&&endation of /$HD for respondent

to accept petitioners offer to purchase the propert+

for '1,5!4,5#*.4!. nless and until the respondent acceptedthe offer on these ter&s, no perfected contract of sale would

arise. $%sent proof of the concurrence of all the essential

ele&ents of a contract of sale, the giing of earnest &one+

cannot esta%lish the eistence of a perfected contract of sale.'etition is D>N>D.

11) !EIRS O" S#OUSES REMEDIOS R.

SANDE$AS vs. LINA

1) !EIRS O" #EDRO ESCANLAR vs. CA

"a/ts% /pouses uiller&o No&%re and Cictoriana -ari6an

died without issue in 1"(4 and 1"3, respectiel+. No&%reEs

heirs include his nephews and grandnephews. Cictoriana was

succeeded %+ her late %rotherEs son, regorio -ari6an. $fter

regorioEs death in 1"!1, his wife, enerosa Hartine0 and

children 92odolfo, -ar&en, Leonardo and redis&inda) were

ad;udged as heirs %+ representation to CictorianaEs estate.Leonardo passed awa+, leaing his widow, Nell+ -hua da. de

-ari6an and &inor Leonell as his heirs. ( parcels of land,

deno&inated %+ Lot 1#1# and 1#1!, for&ed part of the estate

of uiller&o No&%re and Cictoriana -ari6an.

n 1"!, regorioEs heirs eecuted a deed of sale of

rights, interests and participation in faor of 'edro >scanlar

and rancisco :olgado oer the undiided share ofCictoriana 9'((5,***) to %e paid to the heirs, ecept the share

of the &inor Leonell -ari6an which shall %e deposited to the

Hunicipal Treasurer. /uch contract of sale will %e effectie

onl+ upon approal of -.

The endees of the said sale are >scanlar and

:olgado who were also the lessees of the su%;ect propert+. na deed of agree&ent eecuted %+ %oth parties confir&ing and

affir&ing the contract of sale, the+ stipulated the following? 9a)

That the %alance of the purchase price 9'((5,***) shall %e

paid on or %efore Ha+ 1"!"@ 9%) 'ending co&plete pa+&entthereof, the endees shall not assign, sell, lease or &ortgage

the rights, interests and participation thereof@ 9c) n the eentof nonpa+&ent of the %alance of said purchase price, the su&

of '5*,*** 9down pa+&ent) shall %e dee&ed as da&ages@>scanlar and :olgado were una%le to pa+ the indiidual shares

of the -ari6an heirs, a&ounting to '55,*** each, on the due

date. :oweer, said heirs receied at least 1( install&ent

pa+&ents fro& >scanlar and :olgado after Ha+ 1"!".2odolfo was full+ paid %+ une 1"!", enerosa Hartine0,

-ar&en and redis&inda were likewise full+ co&pensated for

their indiidual shares. The &inorEs share was deposited with

the 2T- in /epte&%er 1"(. Aeing for&er lessees, >scanlarand :olgado continued in possession of Lots 1#1# and Lots

1#1!. nterestingl+, the+ continued to pa+ rent %ased on their

lease contract.

The -ari6ans instituted a case for cancellation of sale

against >scanlar and :olgado alleging the latterEs failure to

pa+ the %alance of the purchase price on the stipulated date

and that the+ onl+ receied a total of '13(,551 in cash andgoods. Thereafter, the -ari6ans, sold their shares in parcels

of land including lots 1#1# and 1#1! to spouses -hua for

'1.5 &illion.

>scanlar and :olgado contend that the -ari6ans,

haing %een paid, had no right to resell the su%;ect lots and

that the spouses -hua were purchasers in %ad faith.

The 2T- ruled in faor of the heirs of -ari6an citingthat the sale %etween the -ari6ans and >scanlar is oid as it

was not approed %+ the pro%ate court which was re7uired inthe deed of sale. The -$ affir&ed the decision and cited that

the 7uestioned deed of sale of rights is a contract to sell

%ecause it shall %eco&e effectie onl+ upon approal %+ the

pro%ate court and upon full pa+&ent of the purchase price.

Isse% 8hether or not the 7uestioned deed of sale of rights isa contract to sell


13/17

!e'd?

No. n the case at %ar, the sale of rights, interests and

participation as to portion pro indiiso of the ( su%;ect lotsis a contract of sale for the reasons that 91) the sellers did not

resere unto the&seles the ownership of the propert+ until

full pa+&ent of the unpaid %alance of '((5,***.**@ 9() there is

no stipulation giing the sellers the right to unilaterall+ rescind

the contract the &o&ent the %u+er fails to pa+ within the fied period.

n contracts to sell, ownership is retained %+ the seller and is not to pass until the full pa+&ent of the price. /uch

pa+&ent is a positie suspensie condition, the failure of

which is not a %reach of contract %ut si&pl+ an eent that

preented the o%ligation of the endor to cone+ title fro&ac7uiring %inding force. To illustrate, although a deed of

conditional sale is deno&inated as such, a%sent a proiso that

title to the propert+ sold is resered in the endor until full

pa+&ent of the purchase price nor a stipulation giing theendor the right to unilaterall+ rescind the contract the

&o&ent the endee fails to pa+ within a fied period, %+ itsnature, it shall %e declared a deed of a%solute sale.

n a contract of sale, the non6pa+&ent of the price is a

resolutor+ condition which etinguishes the transaction that,

for a ti&e, eisted and discharges the o%ligations created

thereunder. The re&ed+ of an unpaid seller in a contract ofsale is to seek either specific perfor&ance or rescission.

Horeoer, as a general rule, the pertinent contractualstipulation 9re7uiring court approal) should %e considered as

the law %etween the parties. :oweer, the presence of two

factors &ilitate against this conclusion? 91) the eident

intention of the parties appears to %e contrar+ to the &andator+

character of said stipulation. 8hoeer crafted the docu&ent of cone+ance, &ust hae %een of the %elief that the

controersial stipulation was a legal re7uire&ent for the

alidit+ of the sale. Aut the conte&poraneous and su%se7uentacts of the parties reeal that the original o%;ectie of the

parties was to gie effect to the deed of sale een without

court approal.

2eceipt and acceptance of the nu&erous install&ents

on the %alance of the purchase price %+ the -ari6ans, although

the period to pa+ the %alance of the purchase price epired in

Ha+ 1"!", and leaing >scanlar and :olgado in possession ofLots 1#1# and 1#1! reeal their intention to effect the &utual

trans&ission of rights and o%ligations. The -ari6ans did notseek ;udicial relief until late 1"( or three +ears later@ 9() the

re7uisite approal was irtuall+ rendered i&possi%le %+ the-ari6ans %ecause the+ opposed the &otion for approal of the

sale filed %+ >scanlar and :olgado, and sued the latter for the

cancellation of that sale. :aing proided the o%stacle and the

;ustification for the stipulated approal not to %e granted, the-ari6ans should not %e allowed to cancel their first transaction

with >scanlar and :olgado %ecause of lack of approal %+ the

pro%ate court, which lack is of their own &aking.

8:>2>O2>, the decision of the -$ is reersed

and set aside.

15) CAMAC!O vs. CA

19) U TE AND CO vs. GONHALES

U TE AND CO. vs. BASILIO GONHALES

"ACTS% $ written contract was eecuted %etween =u Tek and-o and on0ales. n the contract, on0ales acknowledge

receipt of the su& of '3,*** 'hilippine currenc+ fro& Hessrs

=u Tek and -o., and that in consideration of said su& %e

o%ligates hi&self to delier to the said =u Tek and -o., #** piculs of sugar of the first and second grade, within 3 &onths

fro& anuar+ 1, 1"1( to Harch 31, 1"1(. There is a stipulation

proiding for rescission with '1,(** penalt+ %+ wa+ of

inde&nit+ for loss and da&ages in case of failure to delier.

No sugar had %een deliered. 'laintiff pra+ed for ;udg&ent for

the '3,*** and for the '1,(** as agree upon in the contract

udg&ent was rendered for '3,*** onl+, and fro& thi

;udg&ent %oth parties appealed.

DefendantEs contention? alleges that the court erred in refusing

to per&it parol eidence showing that the parties intended thathe sugar was to %e secured fro& the crop which the defendan

raised and the failure of his crops reliees hi& fro& an+

responsi%ilit+.

ISSUES% 1) 8hether co&pliance of the o%ligation to delier

depends upon the production in defendantEs plantation

() 8hether there is a perfected sale

3) 8hether li7uidated da&ages of '1,(** should %e awardedto the plaintiff

!ELD%

1) No. The contract placed no restriction upon the

defendant in the &atter of o%taining the sugar. t &a+ %e true that defendant owned a plantation and

epected to raise the sugar hi&self, %ut he did not

li&it his o%ligation to his own crop of sugar. The

parol eidence cannot %e considered. The rights othe parties are deter&ined %+ the writing itself.

() No. $rticle 145* defines a perfected sale as?

FThe sale shall be perfected %etween endor and endee andshall %e %inding on %oth of the&, if the+ hae agreed upon the

thing which is the o%;ect of the contract and upon the price,

een when neither has %een delieredG

$ccording to /-, there is a perfected sale with regard to the

FthingG wheneer the article of sale has %een ph+sicall+

segregated fro& all other articles. n the case at %ar, there has

%een no FappropriationG of an+ particular lot of sugar and theuse of the word sugar re&ains to %e generic. /- concludes that

there has %een no perfected sale %ecause the contract in the

case at %ar was &erel+ an eecutor+ agree&ent@ a pro&ise of

sale and not a sale.


14/17

3) =es. The contract plainl+ states that if the defendant

fails to delier the #** piculs of sugar within the ti&eagreed on, the contract will %e rescinded and he will

%e o%liged to return the '3,*** and pa+ the su& of

'1,(** %+ wa+ of inde&nit+ for loss and da&ages.

1 $ana0 =, 1=1)

- $n appeal fro& a ;udg&ent of the -ourt of irstnstance of Hanila conde&ning the defendant to pa+

the plaintiff the su& of '1,(3!.5*, together with

interest and costs, as da&ages for a %reach of

contract.

'$2T>/?ONG $ANG C!UAN J plaintiff6appellee8ISE CO. :LTD) J defendant6appellant'ON>NT>? TRENT, J.%

BThe contract?

Aetween Hessrs. 8ise Q -o. 9Ltd.), Hanila, and Hr. Ong

ang -huan, Hanila.

8e 8ise Q -o. 9Ltd.), hae sold to Hr. Ong ang -huan thefollowing goods, on this ("th da+ of ul+, 1"14?

One thousand 91,***) sacks of flour, IHanoI %rand, at the net

price of '11.*5 9eleen pesos and fie centaos) per %arrel, theepenses of transportation fro& the Ainondo -anal to %e %orne

%+ the purchaser, 5** sacks to %e deliered in /epte&%er and

5** in Octo%er, which we %ind ourseles to delier ... for

which we shall receie a co&&ission of ... per cent of the total

a&ount. 'a+&ent of the goods &entioned shall %e &adewithin 3* da+s counted fro& the date of delier+, and interest

at rate of ... per annu& on an+ unpaid a&ount that &a+ still %e

due after the ... da+s &entioned.

"ACTS%

8ise Q -o. was not a%le to fulfil its o%ligation as stated in the

contract. The reason for the said nonfulfill&ent, on the part of 8ise Q -o., of the contract &ade with the plaintiff, was that

the IHanoI %rand of flour which the defendant %ound itself to

delier during the &onths of /epte&%er and Octo%er had to

co&e fro& $ustralia, and at the ti&e the contract was eecuted8ise Q -o. did not hae a sufficient stock of the said %rand of

flour@ and that, as the goern&ent of $ustralia prohi%ited the

eportation of flour, %ecause of the scarcit+ of grain in that

countr+, due to the war that had %een declared %etween reatAritain, of which $ustralia is an integral part and the er&an

>&pire, it was i&possi%le for the i&porters to suppl+ 8ise Q

-o. with a sufficient 7uantit+ of flour to ena%le the latter, in

turn, to sere its custo&ers.

ISSUE%

8hether or not the contract and the facts found show a

perfected sale

RULING%

n the case under consideration, the undertaking of the

defendant was to sell to the plaintiff 1,*** sacks of IHanoI

flour at '11.*5 per %arrel, 5** sacks to %e deliered in/epte&%er and 5** in Octo%er. There was no delier+ at all

under the contract. f called upon to designate the article sold,

the defendant could onl+ sa+ that it was IHanoI flour. There

was no appropriation of an+ particular lot of flour. The flour&entioned in the contract was not Iph+sicall+ segregated fro&

all other articles. n fact, the defendant did not hae in its

possession in Hanila, at the ti&e the contract was entered into

the 1,*** sacks of flour which it agreed to delier in/epte&%er and Octo%er. t is therefore clear that under the rule

laid down in the case of =u Tek Q -o. 9that there is a perfected

sale with regard to the IthingI wheneer the article of sale has

%een ph+sicall+ segregated fro& all other articles), supra, andthe case cited in that opinion, the sale here in 7uestion was not

a perfected one.

udg&ent appealed fro& is affir&ed.

Sepaate Opinions 6 MORELAND, J., concurring?The contract was a perfect contract. The essentials of a

contract are found in article 1(#1 of the -iil -ode. t reads?

There is no contract unless the following re7uisites eists? 91)The consent of the contracting parties. 9() $ definite o%;ect

which &a+ %e the su%;ect of the contract. 93) The

consideration for the o%ligation which &a+ %e esta%lished.

$rticle 1(54 proides that?

$ contract eists fro& the &o&ent one or &ore persons

consent to %ind hi&self or the&seles, with regard to anotheror others, to gie so&ething or to render so&e serice@I while

article 1(5 declares when contracts are perfected . t proides?

-ontracts are perfected b mere consent, and fro& that ti&e

the+ are %inding, not onl+ with regard to the fulfill&ent ofwhat has %een epressl+ stipulated, %ut also with regard to all

the conse7uences which, according to their character, are inaccordance with good faith, use, and law.

$rticle 1451 proides this in epress ter&s. t sa+s?

$ promise to sell or bu, there %eing an agree&ent as to the

thing and price, gies a right to the contracting parties to&utuall+ de&and the fulfill&ent of the contract.

The state&ent of the s+lla%us that Ia contract of sale is not

perfected where the parties hae agreed upon the price and thething sold, unless the latter has %een selected and is capa%le of

%eing ph+sicall+ designated or distinguished fro& all others o

the sa&e class,I is not a correct state&ent of what the court

decided or of the law on the su%;ect. There is nowhere in the-iil -ode a re7uire&ent that, in order that a contract , o

whateer kind, shall %e perfect, that is, %inding on the parties

the su%;ect6&atter thereof &ust %e segregated or set apart %+

itself, or %e Icapa%le of %eing ph+sicall+ designated anddistinguished fro& all others of the sa&e class.I There is no

such re7uire&ent een with respect to a contract of sale. This

contract is perfected in the sa&e &anner as all other contracts

M %+ &ere consent@ and the essentials thereof are those of alother contracts, consent, su%;ect6&atter, and consideration

a contract of sale is perfected and %inding Ithere haing %een

an agree&ent as to the thing and price.I


15/17

The decision, howeer, is correct in sa+ing that a sale 9not

a contract of sale) is not perfected unless the su%;ect6&atter

thereof Ihas %een ph+sicall+ segregated fro& all other articles.I Aut the o%;ection is that, while the state&ent, as a

state&ent, is correct, it has nothing to do with and %ears no

relation to the case %efore the court or the 7uestion raised or to

%e decided therein. The action is for a %reach of contract of sale. The legalit and !alidit of the contract are admitted, as

is also the breach thereof. The onl+ 7uestion %efore the court,

indeed, the onl uestion raised b anbod, is whether the

%reach has %een ecused. 8hat has the 7uestion whether thesale was perfected or not to do with this case< The parties are

not concerned with a perfected sale or an+ other kind of sale,

%ut with a contract of sale onl+. ndeed, the action is epressl+

%rought for a %reach of a contract of sale without regard to theownership of the propert+ or the rights of the parties therein.

8hether or not the sale was a IperfectedI sale is of no

conse7uence in the resolution of this case. That 7uestion can

%e &aterial onl+ when it is to %e deter&ined who &ust suffer if the thing sold is lost, destro+ed, or da&aged, or who shall %e

entitled to the increase thereof or the profit produced %+ it

%efore actual delier+. >cept for this purpose the 7uestion

whether a sale is IperfectedI or not is i&&aterial M indeed, it

cannot arise in an+ wa+ in an+ case. To deter&ine who shallrun the risk of loss or hae the opportunit+ to clai& the profits

produced %+ the thing sold %efore actual delier+ thereof has

%een &ade, the -iil -ode contains arious cogent proisions.

The action is one for si&ple %reach of contract. There is no

7uestion here as to plaintiffs or defendants interest in the

flour itself. The plaintiff clai&s no interest therein. Thedefendant clai&s none. Aoth parties ad&it that defendant

neer o%tained delier+ of the flour@ that its delier+ was

preented %+ the action of the $ustralian goern&ent as a war

&easure. Not %eing a%le to secure delier+ itself the defendantcould not delier it to plaintiff in pursuance of the contract.

This %eing so no 7uestion arose or could arise as to who &ustassu&e the responsi%ilit+ for loss of or da&age to the flour or

who take the increase of or the profits produced %+ it.Therefore, no 7uestion arose or could arise as to whether the

sale was perfected or not, as that 7uestion presents itself onl+

when it &ust %e deter&ined at whose risk the propert+ is, or 7uestions inoling an interest in the propert+.

The contract in the case at %ar is one for the sale and delier+

of a thing which in all pro%a%ilit+ did not eist at the ti&e the parties contracted. -ertainl+ the parties did not know whether

it eisted or not. t see&s that the flour had to %e &anufactured

in $ustralia %efore the delier+ agreed upon could %e &ade.

The whole trou%le was caused %+ the failure of the&anufacturers in $ustralia to delier to the defendant. To this

kind of contract articles 145*, 145(, 1*"#, and 11( do not

appl+@ there can %e no perfected sale when the thing sold is not

+et in eistence and, conse7uentl+, there can %e no 7uestionoer the loss or in;ur+ to the thing or the profits which it

produces %efore delier+. The flour neer had an eistence and

the relations %etween the contracting parties neer proceeded

further than the &ere words which for&ed the contract. Therewas, therefore, neer a &o&ent when the 7uestion as to

whether it was a perfected contract could arise. The onl+

articles applica%le or clai&ed to %e applica%le were 1445 and

11*5, to which see no reference in the decision.

$rticle 145* states?

The sale 9not contract) shall %e perfected %etween endor and

endee and shall %e %inding on %oth of the&, if the+ hae

agreed upon the thing which is the o%;ect of the contract and

upon the price, een when neither has %een deliered.

$rticle 145( declares what law shall goern the rights which

accrue %+ irtue of article 145*. t is as follows?

The in;ur+ to or the profit of the thing sold shall, after the

contract has %een perfected, %e goerned %+ the proisions of

articles 1*"# and 11(.

$rticle 1*"# defines the rights of the parties to the sale under

other conditions?

/hould the thing to %e deliered %e a specified one the

creditor, independentl+ of the right granted hi& %+ article11*1, &a+ co&pel the de%tor to &ake the delier+. /hould the

thing %e undeter&ined or generic he &a+ ask that the

o%ligation %e fulfilled at the epense of the de%tor. /hould the

person o%ligated %e in default, or %e %ound to delier the sa&e

thing to two or &ore different persons, he shall %e lia%letherefor with regard to unforeseen eents until the delier+ is

&ade.

$rticle 11(?$2T. 11(. $n o%ligation, consisting in the delier+ of a

specified thing, shall %e etinguished when said thing should

%e lost or destro+ed without fault of the de%tor and %efore he

should %e in default.

11) SANDEJAS . L!NA

G.R. No. 1"163" February 5, 2001

#e$r% o& S'ou%e% REMED!(S R. SANDEJASa* EL!(D(R( +. SANDEJAS SR. -- R(ER(

R. SANDEJAS, AN(N!( R. SANDEJAS,

R!S!NA SANDEJAS M(RELAND, ENJAM!N

R. SANDEJAS, REMED!(S R. SANDEJAS, a*

/e$r% o& S!( S. SANDEJAS !!, RAM(N R.

SANDEJAS, ERES!A R. SANDEJAS, a*

EL!(D(R( R. SANDEJAS JR., a re're%ee*

by R(ER( R. SANDEJAS, petitioners,

vs.

ALE A. L!NA, respondent.

+ANGAN!AN, J.:

FACTS:1) On February 17, 191, !"iodoro Sande#as, Sr$"ed a petition, in t%e "o&er 'ourt prayin( t%at"etters o ad*inistration be issued in %is avor ot%e sett"e*ent o t%e estate o %is &ie, +e*ediosSande#as, &%o died on Apri" 17, 19.2) On u"y 1, 191, etters o Ad*inistration &ereissued by t%e "o&er 'ourt appointin( !"iodoroSande#as, Sr. as ad*inistrator o t%e estate o t%e"ate +e*edios Sande#as. i/e&ise on t%e sa*e


16/17

date, !"iodoro Sande#as, Sr. too/ %is oat% asad*inistrator.3) On 0ove*ber 19, 191, t%e t% oor o ani"aCity 4a"" &as burned and a*on( t%e re'ordsburned &ere t%e re'ords o 5ran'% 6 o t%e Courto First nstan'e o ani"a. As a resu"t, %e $"ed aotion or +e'onstitution o t%e re'ords o t%e'ase on February 9, 193. On February 18, 193,t%e "o&er 'ourt in its Order (ranted t%e said*otion.) On Apri" 19, 193, an O*nibus "eadin( or*otion to intervene and petition-in-intervention&as $"ed by ovant A"e A. ina a""e(in( a*on(ot%ers t%at on une 7, 192, *ovant andad*inistrator !"iodoro . Sande#as, in %is 'apa'ityas se""er, bound and ob"i(ated %i*se", %is %eirs,ad*inistrators, and assi(ns, to se"" orever andabso"ute"y and in t%eir entirety t%e o""o&in(par'e"s o "and &%i'% or*ed part o t%e estate o t%e "ate +e*edios +. Sande#as.t s%o&ed t%at t%ere &as re'eipt o *oney &it%pro*ise to se"" and to buy &it% t%e su* o 1;;,;;;.;;SS

a) =%et%er or not !"iodoro . Sande#as Sr. is"e(a""y ob"i(ated to 'onvey tit"e to t%e propertyreerred to in t%e sub#e't do'u*ent &%i'% &asound to be in t%e nature o a 'ontra't to se""&%ere 'ourt approva" &as not 'o*p"ied &it%>b) =%et%er or not %e &as (ui"ty o bad ait%despite t%e 'on'"usion o t%e CA t%at %e ?bore@t%e burden o provin( t%at a *otion or aut%orityto se"" %ad been $"ed in 'ourt>') =%et%er or not undivided s%ares o !"iodoro int%e sub#e't property is 3B) and t%e

ad*inistrator o t%e "atter s%ou"d ee'ute deedso 'onveyan'e &it%in t%irty days ro* re'eipt o t%e ba"an'e o t%e pur'%ase pri'e ro* t%erespondent>d)=%et%er or not t%e respondents petition-in-intervention

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