POLYTECHNIC UNIVERSITY v CA FACTS: The National Development Corp.

(NDC) ownedthe NDC Compound, a portion of which was leased to Firestone Ceramics, which built several warehouses and facilities therein. Since business between NDC and Firestone went smooth, the lease was twice renewed this time conferring upon Firestone a right of first refusal should NDC decide to dispose of the property. Also, under the contract, Firestone was obliged to introduce considerable improvements thereon. Eventually though, Memo Order No. 214 was issued ordering the transfer of NDC Compound to the government in consideration of the cancellation of NDCs P57M debt. Pursuant thereto, NDC transferred the property to Polytechnic University (PUP). Firestone sued for specific performance invoking its right of first refusal, and sought to enjoin NDC and PUP from proceeding with the sale. Both PUP and NDC aver that there was no sale involved since ownership of the property remained with the governmentboth companies being GOCCs. ISSUE: W/N there was a sale HELD: YES. The argument of PUP and NDC was untenable. GOCCs have personalities separate and distinct from the government. Sale brings within its grasp the whole gamut of transfers where ownership of a thing is ceded for consideration. Further, judging from the conduct of the parties in this case, all the elements of a valid sale attend. Consent is manifested by the Memo Order No. 214, the cancellation of liabilities constituted consideration; the subject matter was of course the property subject of the dispute. Since a sale was involved, the right of first refusal in favor of Firestone must be respected. It forms an integral part of the lease and is supported by considerationFirestone having made substantial investments therein. Only when Firestone fails to exercise such right may the sale to PUP proceed. ATILANO vs ATILANO FACTS: In 1916, Atilano I acquired lot No. 535 by purchase. In 1920, he had the land subdivided into five parts, identified as lots Nos. 535-A, 535-B, 535-C, 535-D and 535-E, respectively. After the subdivision had been effected, Atilano I executed a deed of sale covering lot No. 535-E in favor of his brother Atilano II. Three other portions, namely, lots Nos. 535-B, 535-C, and 535-D, were likewise sold to other persons. Atilano I retained for himself the remaining portions of the land, presumably covered by the title to lot No. 535-A. upon his death, the title to this lot passed to Ladislao, in whose name the corresponding certificate was issued. On 1959, Atilano II and his children had the land resurveyed so that it could be properly subdivided. However, they discovered that the land they were actually occupying on the strength of the deed of sale was lot No. 353-A and not lot 535-E, while the land which remained in the possession of Atilano I, and which was passed to Ladislao was lot No. 353-E and not lot No. 535-A. On 1960, the heirs of Atilano II alleging, inter alia, that they offered to surrender to the possession of lot No. 535-A and demanded in return the possession of lot No. 535-E, but the defendants refused to accept the exchange. The plaintiffs' insistence is quite understandable, since lot No. 535-E has an area of 2,612 square meters as compared to the 1,808 square-meter area of lot No. 535-A. In their answer to the complaint, the defendants alleged that the reference to lot No. 535-E in the deed of sale was an involuntary error; that the intention of the parties to that sale was to convey the lot correctly identified as lot No. 535-A. On the basis of the foregoing allegations the defendants interposed a counterclaim, praying that the plaintiffs be ordered to execute in their favor the corresponding deed of transfer with respect to Lot No. 535-E. The trial court rendered judgment in favor of the plaintiffs.

ISSUE: Whether or not there has been a valid sale in view of the real intention of the parties. HELD: From the facts and circumstances, the object is lot No. 535-A and its designation as lot No. 535-E in the deed of sale was a simple mistake in the drafting of the document. The mistake did not vitiate the consent of the parties, or affect the validity and binding effect of the contract between them. The new Civil Code provides a remedy by means of reformation of the instrument. This remedy is available when, there having been a meeting of the minds of the parties to a contract, their true intention is not expressed in the instrument purporting to embody the agreement by reason of mistake, fraud, inequitable conduct or accident In this case, the deed of sale executed in 1920 need no longer be reformed. The parties have retained possession of their respective properties conformably to the real intention of the parties to that sale, and all they should do is to execute mutual deed of conveyance. Therefore, the judgment appealed from is reversed. The plaintiffs are ordered to execute a deed of conveyance of lot No. 535-E in favor of the defendants, and the latter, in turn, are ordered to execute a similar document, covering lot No. 535-A, in favor of the plaintiffs. Costs against the latter. Melizza v. City of Iloilo Source: http://pinaylawyer.com/2010/07/28/subject-matter-in-a-contract-of-sale/ Facts: Melliza was the owner of several parcels of land. She sold several big parcels of land. She sold several tracts of land to the then Municipality of Iloilo, including lots 1214-C and 1214-D. The instrument of sale did not mention lot 1214-B, although it was contiguous to the other lots. But the contract did stipulate that the area being sold to the Municipality shall include the area needed for the construction of the city hall site, avenues and parks according to the Arellano plan. A few years later, Melliza sold her remaining interest in lot 1214 with a stipulation in the contract that she was selling portions of Lot 1214 as were not included in the previous sale to Iloilo Municipality. When the then City of Iloilo donated the city hall site to the Univers ity of the Philippines, the donation included lots 1214-B, 1214-C and 1214-D. Pio Melliza, who ultimately became the buyer of the remaining portions of lot 1214 sold by Melliza, filed an action for the recovery of the lot 1214-B or its value stating that it was not included in the contract executed between Melliza and the Mun. of Iloilo, and therefore was part of the land that he purchase as the remaining portion of lot 1214. One of his causes of action was that the contract of sale executed between Melliza and the Mun. referred only to lots 1214-C and 1214-D and it is unwarranted to include lot 1214-B as being included under the description therein because that would mean that the object of the contract of sale would be indeterminate. One of the essential requirements for a contract of sale is that it should have for its object a determinate thing. Issue: Whether inclusion of Lot 1214-B in the lots sold to the Municipality of Iloilo would violate the requirement that the subject matter of a sale should be determinate? Ruling: No. Even if Lot 1214-B was not specifically mentioned, it is still included in the sale and the subject matter is still determinate. The Supreme Court held that a sale must have for its object a determinate thing, and this requirement is fulfilled as long as, at the time the contract is entered into, the object of the sale is capable of being made determinate without the necessity of a new or further agreement between the parties. The requirement in Melliza was deemed fulfilled under the contract of sale because it referred to the Arellano plan. At that time, the plan had long been in existence and it specifically

provided for the land areas needed for the city hall site Therefore, at the time of the execution of the contract, the exact area of the land needed, which was the subject matter of the sale, could be determined by simply referring to the Arellano plan, without the parties needing to draw-up a new contract. Yu Tek & Co vs Gonzales Facts: A contract was executed between the herein parties, where Gonzales acknowledges the receipt of P3,000 from Yu Tek & Co., and that in consideration of which he obligates himself to deliver 600 piculs of sugar of the first and second grade within 3 months according to the result of polarization. There is a stipulation that in case of failure to deliver, the contract will be rescinded and Gonzales will return the P3,000 + P1,200 as indemnity for damages and loss However, no sugar was delivered, so plaintiff filed a case praying for the judgment of P3,000 + P1,200. Judgment was rendered and P3,000 was awarded only hence both parties appealed. Gonzales argument: o They (parties) intended that the sugar was to be secured from the crop which he raised on his plantation and since there was total failure of his crop, he was unable to fulfill the contract. o There was a perfected sale but he should be relieved from complying with his undertaking by loss of the thing due Yu Teks argument: o That it should be entitled of the P1,200 as stated in the contract

Issues: (1) Whether compliance of the obligation to deliver depends upon the production in defendants plantation? NO (2) Whether there is a perfected sale? NONE (3) Whether liquidated damages of P1,200 should be awarded to the plaintiff? YES Held: (1) The contract placed no restriction upon the matter of obtaining the sugar. The defendant was equally at liberty to purchase it on the market or raise it himself. Although, it may be true that the defendant owned a plantation and expected to raise the sugar himself, he did not however limit his obligation to his own crop in the contract. It was held that the rights of the parties must be determined by the writing itself. (2) SC concludes that the contract in the case at bar was merely an executory agreement; a promise of sale and not a sale. There is a perfected sale with regard to the "thing" whenever the article of sale has been physically segregated from all other articles In the case at bar the undertaking of the defendant was to sell to the plaintiff 600 piculs of sugar of the first and second classes. o Sugar is one of the staple commodities of this country. For the purpose of sale its bulk is weighed, the customary unit of weight being denominated a "picul." There was no delivery under the contract. Now, if called upon to designate the article sold, it is clear that the defendant could only say that it was "sugar." He could only use this generic name for the thing sold. There was no "appropriation" of any particular lot of sugar. Neither party could point to any specific quantity of sugar and say: This is the subject of the contract Further, the Court ruled that the buyer does not assume the risk of loss of a generic subject matter under a valid sale until the object is made determinate, either by physical segregation or particular designation. (3) The contract plainly states that if the defendant fails to deliver the 600 piculs of sugar within the time agreed on, the contract will be rescinded and he will be obliged to return the P3,000 and pay the sum of P1,200 by way of indemnity for loss and damages. There cannot be the slightest doubt about

the meaning of this language or the intention of the parties. There is no room for either interpretation or construction. A 1255 of the Civil Code provides that contracting parties are free to execute the contracts that they may consider suitable, provided they are not in contravention of law, morals, or public order and there is nothing in the contract under consideration which is opposed to any of these principles. NGA vs IAC Petitioner National Grains Authority (now National Food Authority, NFA for short) is a government agency. One of its incidental functions is the buying of palay grains from qualified farmers. On August 23, 1979, private respondent Leon Soriano offered to sell palay grains to the NFA, through William Cabal, the Provincial Manager of NFA stationed at Tuguegarao, Cagayan Private respondent Soriano's documents were processed and accordingly, he was given a quota of 2,640 cavans of palay. The quota noted in the Farmer's Information Sheet represented the maximum number of cavans of palay that Soriano may sell to the NFA. Soriano delivered 630 cavans of palay. The palay delivered not rebagged, classified and weighed. when Soriano demanded payment of the 630 cavans of palay, he was informed that its payment will be held in abeyance since Mr. Cabal was still investigating on an information he received that Soriano was not a bona tide farmer and the palay delivered by him was not produced from his farmland but was taken from the warehouse of a rice trader, Ben de Guzman. On August 28, 1979, Cabal wrote Soriano advising him to withdraw from the NFA warehouse the 630 cavans Soriano delivered stating that NFA cannot legally accept the said. Instead of withdrawing the 630 cavans of palay, private respondent Soriano insisted that the palay grains delivered be paid. He then filed a complaint for specific performance and/or collection of money with damages W/N there sale was perfected? Yes In the case at bar, Soriano initially offered to sell palay grains produced in his farmland to NFA. When the latter accepted the offer by noting in Soriano's Farmer's Information Sheet a quota of 2,640 cavans, there was already a meeting of the minds between the parties. The object of the contract, being the palay grains produced in Soriano's farmland and the NFA was to pay the same depending upon its quality. The fact that the exact number of cavans of palay to be delivered has not been determined does not affect the perfection of the contract. Article 1349 of the New Civil Code provides: ". . .. The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract, provided it is possible to determine the same, without the need of a new contract between the parties." In this case, there was no need for NFA and Soriano to enter into a new contract to determine the exact number of cavans of palay to be sold. Soriano can deliver so much of his produce as long as it does not exceed 2,640 cavans. Art. 1475. The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. xxx The acceptance referred to which determines consent is the acceptance of the offer of one party by the other and not of the goods delivered as contended by petitioners. From the moment the contract of sale is perfected, it is incumbent upon the parties to comply with their mutual obligations or "the parties may reciprocally demand performance" thereof. (Article 1475, Civil Code, 2nd par.).

Therefore, NFA's refusal to accept was without just cause

CONCHITA NOOL and GAUDENCIO ALMOJERA vs.CA Facts: One lot formerly owned by Victorio Nool has an area of 1 hectare. Another lot previously owned by Francisco Nool has an area of 3.0880 hectares. Spouses (plaintiffs) Conchita Nool and Gaudencio Almojera alleged that they are the owners of the subject lands. They are in dire need of money, they obtained a loan DBP , secured by a real estate mortgage on said parcels of land, which were still registered in the names of Victorino and Francisco Nool, at the time, Since the plaintiffs failed to pay the said loan, the mortgage was foreclosed; that within the period of redemption, the plaintiffs contacted Anacleto Nool for the latter to redeem the foreclosed properties from DBP, which the latter did; and as a result, the titles of the 2 parcels of land in question were transferred to Anacleto; that as part of their arrangement or understanding, Anacleto agreed to buy from Conchita the 2 parcels of land , for a total price of P100,000.00, P30,000.00 of which price was paid to Conchita, and upon payment of the balance of P14,000.00, the plaintiffs were to regain possession of the 2 hectares of land, which amounts spouses Anacleto Nool and Emilia Nebre failed to pay. Anacleto Nool signed the private writing, agreeing to return subject lands when plaintiffs have the money to redeem the same; defendant Anacleto having been made to believe, then, that his sister, Conchita, still had the right to redeem the said properties. Issue: Is the purchase of the subject lands to Anacleto valid? Held: Nono dat quod non habet, No one can give what he does not have; Contract of repurchase inoperative thus void. Article 1505 of the Civil Code provides that where goods are sold by a person who is not the owner thereof, and who does not sell them under authority or with consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the sellers authority to sell. Jurisprudence, on the other hand, teaches us that a person can sell only wha t he owns or is authorized to sell; the buyer can as a consequence acquire no more than what the seller can legally transfer. No one can give what he does not have nono dat quod non habet. In the present case, there is no allegation at all that petitioners were authorized by DBP to sell the property to the private respondents. Further, the contract of repurchase that the parties entered into presupposes that petitioners could repurchase the property that they sold to private respondents. As petitioners sold nothing, it follows that they can also repurchase nothing. In this light, the contract of repurchase is also inoperative and by the same analogy, void. The agreement to repurchase the land is anchored on the validity of the sale between petitioners and respondents. As the sale never actually took place, since the petitioners no longer had the title at the time, the contract is void. The petitioners claim that Art.1370 of the Civil Code is applicable in this case but Art. 1370 presupposes that the contract is valid and enforceable. One can repurchase only what one has previously sold. In this instance, it is clear that petitioners never really sold the land so they cannot claim the right to repurchase the land.

JOHANNES SCHUBACK & SONS PHILIPPINE TRADING CORPORATION VS. CA G.R. No. 105387 November 11, 1993 FACTS: 1. Defendant SJ Industrial, through Ramon San Jose, approached Schuback & Sons Phil. Trading (SSPT) to purchase bus spare parts. 2. Accordingly, Defendant provided the list of MAN bus spare parts he wanted and SSPT coordinated with Schuback Hamburg (Germany) to quote the prices, and forwarded its formal offer to Defendant, containing the prices, item numbers, descriptions, etc. 3. Defendant then informed SSPT of his desire to purchase such items and promised to submit the quantity per unit. Thereafter, he personally and directly submitted such quantities needed to SSPTs GM, Mr. Reichert. Defendant, indicated by handwriting in the Purchase Order NOTE: above P.O. will include 3% discount. The above will serve as our initial P.O. 4. SSPT immediately ordered the products from Germany to avail of the old prices Schuback Hamburg then ordered the same to NDK who made partial deliveries succeeding and which Schuback Hamburg paid for. 5. Upon subsequent reminders sent by SSPT to Defendant to secure the letters of credit, Defendant responded that he did not make any valid purchase order and there was no definite contract between him and SSPT. SSPT reverted that there was a valid purchase order and demanded that either defendant pay the order or pay the cancellation fees. 6. Upon unsuccessful demands, SSPT filed this case to RTC for actual and compensatory damages, and payment of unearned profits. 7. RTC: ruled in favour of SSPT ordering defendant to pay compensatory damages and unearned profits. 8. CA: reversed the decision; no perfected contract as there is no meeting of the minds as to the price of the goods. ISSUE: Was there are perfected contract? When was there are perfected contract? HELD: YES. 1. HOW: The offer by SSPT was manifested on December 17, 1981 when SSPT submitted its proposal containing the item number, quantity, part number, description, the unit price and total to Defendant. On December 24, 1981, Defendant informed SSPT of his desire to avail of the prices of the parts at that time and simultaneously enclosed its PO No. 0l01 dated December 14, 1981. At this stage, a meeting of the minds between vendor and vendee has occurred, the object of the contract: being the spare parts and the consideration, the price stated in SSPT's offer dated December 17, 1981 and accepted by the Defendant on December 24,1981. The notation on the purchase order was another indication of acceptance on the part of the vendee, for by requesting a 3% discount, he implicitly accepted the price as first offered by the vendor. On the other hand, concurrence by the vendor with the said discount requested by the vendee was manifested when petitioner immediately ordered the items needed by private respondent from Schuback Hamburg which in turn ordered from NDK, a supplier of MAN spare parts in West Germany. 2. WHEN? While we agree with the trial court's conclusion that indeed a perfection of contract was reached between the parties, we differ as to the exact date when it occurred, for perfection took place, not on December 29, 1981. Although the quantity to be ordered was made determinate only on December 29, 1981, QUANTITY IS IMMATERIAL IN THE PERFECTION OF A SALES CONTRACT. What is of importance is the meeting of the minds as to the object and cause, which from the facts disclosed, show that as of December 24, 1981, these essential elements had already occurred.