Documente Academic
Documente Profesional
Documente Cultură
SALES
Polytechnic University of the Philippines vs Court of Appeals and
Firestone Ceramics
National Development Corporation vs Firestone Ceramics Inc.
[GR No. 143513 and 143590. November 14, 2001]
Bellosilo, J.:
Facts:
Petitioner National Development Corp., a government owned and controlled
corporation, had in its disposal a 10 hectares property. Sometime in May
1965, private respondent Firestone Corporation manifested its desire to lease
a portion of it for ceramic manufacturing business. On August 24, 1965, both
parties entered into a contract of lease for a term of 10 years renewable for
another 10 years. Prior to the expiration of the aforementioned contract,
Firestone wrote NDC requesting for an extension of their lease agreement. It
was renewed with an express grant to Firestone of the first option to
purchase the leased premise in the event that it was decided "to dispose and
sell the properties including the lot..."
Cognizant of the impending expiration of the leased agreement, Firestone
informed NDC through letters and calls that it was renewing its lease. No
answer was given. Firestone's predicament worsened when it learned of
NDC's supposed plans to dispose the subject property in favor of petitioner
Polytechnic University of the Philippines. PUP referred to Memorandum Order
No. 214 issued by then President Aquino ordering the transfer of the whole
NDC compound to the National Government. The order of conveyance would
automatically result in the cancellation of NDC's total obligation in favor of
the National Government.
Firestone instituted an action for specific performance to compel NDC to sell
the leased property in its favor.
Issue:
1. Whether or not there is a valid sale between NDC and PUP.
Ruling
A contract of sale, as defined in the Civil Code, is a contract where one of the
parties obligates himself to transfer the ownership of and to deliver a
determinate thing to the other or others who shall pay therefore a sum
certain in money or its equivalent. It is therefore a general requisite for the
existence of a valid and enforceable contract of sale that it be mutually
obligatory, i.e., there should be a concurrence of the promise of the vendor
to sell a determinate thing and the promise of the vendee to receive and pay
for the property so delivered and transferred. The Civil Code provision is, in
effect, a "catch-all" provision which effectively brings within its grasp a whole
A contract of sale is normally commutative and onerous: not only does each
one of the parties assume a correlative obligation (the seller to deliver and
transfer ownership of the thing sold and the buyer to pay the price),but each
party anticipates performance by the other from the very start. While in a
sale the obligation of one party can be lawfully subordinated to an uncertain
event, so that the other understands that he assumes the risk of receiving
nothing for what he gives (as in the case of a sale of hopes or
expectations,emptio spei), it is not in the usual course of business to do so;
hence, the contingent character of the obligation must clearly appear.
Nothing is found in the record to evidence that Gaite desired or assumed to
run the risk of losing his right over the ore without getting paid for it, or that
Fonacier understood that Gaite assumed any such risk. This is proved by the
fact that Gaite insisted on a bond a to guarantee payment of the P65,000.00,
an not only upon a bond by Fonacier, the Larap Mines & Smelting Co., and
the company's stockholders, but also on one by a surety company; and the
fact that appellants did put up such bonds indicates that they admitted the
definite existence of their obligation to pay the balance of P65,000.00.
The appellant have forfeited the right court below that the appellants have
forfeited the right to compel Gaite to wait for the sale of the ore before
receiving payment of the balance of P65,000.00, because of their failure to
renew the bond of the Far Eastern Surety Company or else replace it with an
equivalent guarantee. The expiration of the bonding company's undertaking
on December 8, 1955 substantially reduced the security of the vendor's
rights as creditor for the unpaid P65,000.00, a security that Gaite considered
essential and upon which he had insisted when he executed the deed of sale
of the ore to Fonacier.
(2) The sale between the parties is a sale of a specific mass or iron ore
because no provision was made in their contract for the measuring or
weighing of the ore sold in order to complete or perfect the sale, nor was the
price of P75,000,00 agreed upon by the parties based upon any such
measurement.(see Art. 1480, second par., New Civil Code). The subject
matter of the sale is, therefore, a determinate object, the mass, and not the
actual number of units or tons contained therein, so that all that was
required of the seller Gaite was to deliver in good faith to his buyer all of the
ore found in the mass, notwithstanding that the quantity delivered is less
than the amount estimated by them.
from the customers, hence, they contend that they were selling service
rather than the item.
BIR was not impressed with the contention of petitioner. Petitioner then
filed a case on Court of Tax Appeal. CTA rule in favor of BIR and contends
that by putting the word factory in their name, they were out to do
business in a larger scale rather than rendering service. CTA ruled that even
if we were to believe petitioners claim that it does not manufacture readymade items for the public and that it makes these articles only special order
of its customers that does not make it a contractor.
ISSUE:
I. Is petitioner engaged in the manufacturing business?
HELD:
I. Yes. The fact that windows and doors are made by it only when
customers place their orders, does not alter the nature of the establishment,
it makes petitioner a habitual manufacturer. Petitioner does nothing more
than sell the goods that it mass-produces or habitually makes.
Appellant invokes Article 1467 of the New Civil Code to defend its
contention that it did not sell, but merely contracted for particular pieces of
work or sold its services. SC however ruled that the factory accepts a job that
requires the does not use of extraordinary or additional equipment, or
involves services not generally performed by it. The orders herein exhibited
were not shown to be special. They were merely orders for work nothing is
shown to call them special services. The Supreme Court affirms the assailed
decision by the CTA.
Quiroga vs Parsons
G.R. No. L-11491
Subject: Sales
Doctrine: Contract of Agency to Sell vs Contract of Sale
Facts: On Jan 24, 1911, plaintiff and the respondent entered into a contract
making the latter an agent of the former. The contract stipulates that Don
Andres Quiroga, here in petitioner, grants exclusive rights to sell his beds in
the Visayan region to J. Parsons. The contract only stipulates that J.Parsons
other conditions; but if the plaintiff consents to fill them, he waives his right
and cannot complain for having acted thus at his own free will.
For the foregoing reasons, we are of opinion that the contract by and
between the plaintiff and the defendant was one of purchase and sale, and
that the obligations the breach of which is alleged as a cause of action are
not imposed upon the defendant, either by agreement or by law.
The contract is the law between the parties and should include all the
things they are supposed to have been agreed upon. What does not
appear on the face of the contract should be regarded merely as
"dealer's" or "trader's talk", which can not bind either party.
Arco admitted in its complaint filed with Manila CFI that Gonzalo
agreed to sell to it the first sound reproducing equipment and
machinery.
While Gonzalo was to receive a 10% commission, this does not
necessarily make Gonzalo an agent of Arco as this provision is only an
additional price which Arco bound itself to pay, and which stipulation is
not incompatible with the contract of purchase and sale.
Whatever unforeseen events might have taken place unfavorable to
Arco such as change in prices, mistake in their quotation, Gonzalo
might still legally hold Arco to the prices fixed at $1,700 and $1,600.
This is incompatible with the pretended relation of agency between the
petitioner and the respondent, because in agency, the agent is
exempted from all liability in the discharge of his commission provided
he acts in accordance with the instructions received from his principal
and the principal must indemnify the agent for all damages which the
latter may incur in carrying out the agency without fault or imprudence
on his part.
It follows that the petitioner as vendor is not bound to reimburse the
respondent as vendee for any difference between the cost price and
the sales price which represents the profit realized by the vendor out of
the transaction.
Moreover, the 25% discount granted by the Starr piano to the Gonzalo
is available only to the latter as the former's exclusive agent in the
Philippines. Arco could not have secured this discount from the Starr
Piano and neither was Gonzalo willing to waive that discount in favor of
Arco. Not every concealment is fraud; and short of fraud, it were better
that, within certain limits, business acumen permit of the loosening of
the sleeves and of the sharpening of the intellect of men and women in
the business world.
Article 1245 of the Civil Code provides that the law on sales shall
govern an agreement of dacion en pago.
The Facts
Only P1,800,000.00 was paid from the loan. Thus, defendant Bus
Company was able to avail an additional loan of P2,000,000.00 for one (1)
month under Promissory Note 00028. Defendant LAWIN failed to pay the
aforementioned promissory note and the same was renewed under a
separate Promissory Note, 037. Still having not able to pay, defendants offer
for re-structuring for another two months which in turn was still not paid.
Thus, defendants foreclose the buses and as sole bidder attain the sale
which P2, 000, 000 was credited to the account of LAWIN.
pay their obligation, despite repeated demands, the defendants failed to pay
their indebtedness which totaled of P16,484,992.42
Thus, the suit for sum of money, wherein the plaintiff prays that
defendants solidarily pay plaintiff as of July 31, 1992 the sum of (a)
P16,484,994.12 as principal obligation under the two promissory notes Nos.
003 and 00037, plus interests and penalties along with loss of good will of
business, litigation expenses and exemplary damages. In answer to the
complaint, defendants-appellees assert by way of special and affirmative
defense, that there was already an arrangement as to the full settlement of
the loan obligation by way of:jgc:chanrobles.com.ph
The Trial court favored the defendants, dismissing the complaint and
declaring the foreclosure as null and void. With their pleaded defenses it also
considered the obligation of indebtedness, extinguished. On appeal, the
Court of appeals reversed the earlier ruling, thus the appeal.
The Issue
The issue raised is whether there was dacion en pago between the parties
upon the surrender or transfer of the mortgaged buses to the Respondent.
Article 1245 of the Civil Code provides that the law on sales shall govern an
agreement of dacion en pago. A contract of sale is perfected at the moment
there is a meeting of the minds of the parties thereto upon the thing which is
the object of the contract and upon the price.
In this case, there was no meeting of the minds between the parties on
whether the loan of the petitioners would be extinguished by dacion en pago.
The petitioners anchor their claim solely on the testimony of Marciano Tan
that he proposed to extinguish petitioners obligation by the surrender of the
nine buses to the respondent acceded to as shown by receipts its
representative made.
188,
G.R.
No.
82508
FILINVEST
CREDIT
CORPORATION, petitioner,
vs.
THE COURT OF APPEALS, JOSE SY BANG and ILUMINADA TAN SY BANG,
respondents
FACTS:
Herein private respondents spouses Jose Sy Bang and Iluminada Tan
were engaged in the sale of gravel produced from crushed rocks and used for
construction purposes. They intended to buy rock crusher from Rizal
Consolidated Corporation which carried a cash price tag of P550,000.00.
They applied for financial assistance from herein petitioner Filinvest Credit
Corporation, who agreed to extend financial aid on the certain conditions.