87. PACIFIC COMMERCIAL COMPANY VS. ERMITA MARKET & COLD STORES, INC.

G.R. No. L-34727

56 Phil. 617
March 9, 1932

Facts:

On September 14, 1927, the Pacific Commercial Co., the plaintiff herein, sold to the Ermita
Market & Cold Stores, Inc., the defendant herein, an automatic refrigerating machine.

The parties signed the usual printed sales-contract form of the plaintiff company, the
purchase price, payable by installments as stated in the sales contract. By mutual agreement, the said
machine was installed by the plaintiff, to be paid by the defendant, in favor of the plaintiff. Complying
with the terms of the sales contract, the defendant paid the plaintiff an initial amount of the purchase
price of the machine, leaving a balance.

A few days after installation, the defendant advised the plaintiff that the machine was not
serving the purpose for which it was sold and that it was lacking ammonia receiver and oil separator,
and further alleges that the temperature in the refrigerating rooms did not reach, and had never
reached, owing to the negligence of the plaintiff in not repairing or putting in good working condition
the said refrigerating machine, the defendant had been forced to close its establishment and for
which reason the defendant claimed damages against the plaintiff.

The plaintiff denied generally and specifically each and every and every allegation in the said
cross-complaint and by way of special defense, alleged that whatever defects or deficiency there
might have been in the temperature in the refrigerating rooms of defendant's establishment, or in
the functioning of the machine, these were due to the defects and imperfections of the coils which
were supplied and installed by the defendant itself, as well as to the incompetency and inefficiency
of the defendant's personnel to operate the machine. By which the Court of First Instance of Manila
rendered its judgment, ordering the defendant to pay the remaining amount plus interest and other
damages, so, the defendant appealed.

Issue:

Whether or not the installed refrigeration machine was the same machine agreed upon by
the plaintiff and the defendant

Held:

The judgment of the Court of First Instance of Manila is affirmed in its entirety. After a careful
examination of the record, we have not the least doubt that the plaintiff delivered the machine as
described in the sales contract, and the fact that the defendant could not use it satisfactorily in the
three cold stores division cannot be attributed to plaintiff's fault; as far as we can see, the machine
was strictly in accordance with the written contract between the parties, and the defendant can
hardly honestly say that there was any deception by the plaintiff.

But it is clear that the defendant company did not fully understand the use of the motor. It
complains that the machine would not properly refrigerate the refrigerating rooms, but it is evident
that the machine could not operate automatically when the defendant had three refrigerating rooms
which it expected to maintain at three different temperatures.

The defendant also complained that the machine was not equipped with a thermostat and
that the lack of its obstructed the work of the refrigerating. In the first place, the thermostat was not
include in the sales contract and in the second place it would not have been of any service to
defendant because it could not possibly operate automatically at three different temperatures with
the defendant's insufficient equipment.

The defendant's complaint that the machine did not contain an oil separator is not true; the
oil separator is combined with the receiver and condenser in a single combined piece in the machine.
88. VILLONCO REALTY VS. BORMAHECO, INC.
G.R. No. L-26872
65 SCRA 352
July 25, 1975

Facts:

Cervantes and his wife owned 3 parcels of land along Buendia where the buildings of
Bormaheco Inc were situated. Beside their property were lots owned by Villonco Realty. Cervantes
entered into several negotiations with Villonco for sale of the Buendia property. Cervantes made a
written offer of P400/sqm with a down payment of P100,000.00 to serve as earnest money. The offer
also made the consummation of the sale dependent upon the acquisition by Bormaheco of a Sta. Ana
property. Villonco made a counter-offer stating that the earnest money was to earn 10% interest p.a.
The check was enclosed with the reply letter. Cervantes accepted and cashed the check. The Sta. Ana
Property was awarded to Bormaheco; the transfer was also duly approved. However, Cervantes sent
the check back to Villonco with the interest thereon—stating that he was no longer interested in
selling the property. He also claims that no contract was perfected; Villonco sues for specific
performance.

Issue:

Whether or not there was a perfected contract of sale

Held:

Yes. There was a perfected contract of sale. The alleged changes made in the counter-offer
are immaterial and are mere clarifications. The changes of the words ―Sta. Ana property‖ to another
property as well as the insertion of the number ―12‖ in the date, and the words ―per annum‖ in the
interest are trivial. There is no incompatibility in the offer and counter-offer. Cervantes assented to
the interest and he, in fact, paid the same. Also, earnest money constitutes proof of the perfection
of the contract of sale and forms part of the consideration. The condition regarding the acquisition
of the Sta. Ana property was likewise fulfilled; there is thus no ground for the refusal of Cervantes to
consummate the sale.
89. VELASCO VS. COURT OF APPEALS
G.R. No. L-31018
51 SCRA 439
June 29, 1973

Facts:

On November 29, 1962, herein petitioners and respondents had entered into a contract of
sale by virtue of which the latter offered to sell and agreed to buy by the former, a parcel of land with
an area of 2,059 sq. ms. Located in Quezon City, for a total purchase price of P 100,000.00.

Petitioners alleged he was to give a down payment of 10,000.00 pesos to be followed by P

20,000.00 and the balance of P70,000.00 to be paid in installment basis, the monthly amortization of
which was to be determined as soon as the P 30,000.00 down payment had been completed.

On January 8, 1964, the petitioners tendered to pay the additional down payment of P
20,000.00 to complete the down payment of P 30,000.00, but the respondents refused to accept and
eventually it likewise refused to execute a deed of sale agreed upon, so, petitioner demanded for
damages and specific performance from the respondents of an alleged deed of sale of a parcel of
land residential land in their favor.

Respondents denied that it has had any direct-dealing, much less, contractual relations with
the petitioners regarding the property in question and contends that the alleged contract described
attached to the complaint is entirely unenforceable under the statute of fraud. Accordingly,
respondents refused to accept the additional down payment for it had considered the offer to sell
rescinded on the account of the petitioners‘ failure to pay on or before December 31, 1962.

On November 3, 1968, the CFI Quezon City rendered a decision dismissing the complaint of
the petitioners, which was affirmed by the Court of Appeals on September 5, 1969, upon motion by
the petitioner. So, a petition for certiorari and mandamus was filed before the Supreme Court by the
petitioners.

Issues:

1. Whether or not there was a perfected contract of sale

2. Whether or not a definite agreement on matters of payment of purchase price is an
essential element in the formation of a binding and enforceable contract

Held:

No contract of sale was perfected because the minds of the parties did not meet ―in regard
to the manner of payment‖. The material averments contained in Velasco‘s complaint themselves
disclose a lack of complete ―agreement in regard to the manner of payment‖ of the lot in question.
The complaint states penitently ―that plaintiff and defendant further agreed that the total down
payment shall be P30, 000.00, Including the P10.000.00 partial payment as mentioned , and that upon
completion of the said down payment of P30,000.00, the balance P70,000.00 shall be paid by the
plaintiff to the defendant in 10 years from November 29, 1962; and that the time within which the
full down payment of the P30,000.00 was to be completed was not specified by the parties but the
defendant was duly compensated during the said time prior to the completion of the down payment
of P30,000.00 by way of lease rentals on the house existing thereon which was earlier leased by the
defendant to the plaintiff‘s sister-in-law, Socorro J. Velasco, and which were duly paid to the
defendant by checks drawn by plaintiff. The Velascos themselves admit that they and Magdalena
Estate still have to meet and agree on how and when the down payment and the installment
payments were to be paid. Such being the situation, it cannot be said that a definite and firm sales
agreement between the parties have been perfected over the lot in question.

A Definite agreement on the manner of payment of the purchase is an essential element in

the formation of a binding and enforceable contract of sale. In the present case, the Velascos
delivered to Magdalena Estate the sum of P10, 000.00 as part of the down payment that they had to
pay cannot be considered as sufficient proof of the perfection of any purchase and sale agreement
between the parties under article 1482 of the new Civil Code, as the Velascos themselves admit that
some essential matter (the terms of payment) still had to be mutually covenanted.

90. SPOUSES DOROMAL, SR. AND SALAS VS. COURT OF APPEALS

G.R. No. L-3608
66 SCRA 575
September 05, 1975

Facts:

A parcel of land in Iloilo were co-owned by 7 siblings all surnamed Horilleno. 5 of the siblings
gave a SPA to their niece Mary Jimenez, who succeeded her father as a co-owner, for the sale of the
land to father and son Doromal. One of the co-owner, herein petitioner, Filomena Javellana however
did not gave her consent to the sale even though her siblings executed a SPA for her signature. The
co-owners went on with the sale of 6/7 part of the land and a new title for the Doromals were issued.

Respondent offered to repurchase the land for 30K as stated in the deed of sale but
petitioners declined invoking lapse in time for the right of repurchase. Petitioner also contend that
the 30K price was only placed in the deed of sale to minimize payment of fees and taxes and as such,
respondent should pay the real price paid which was P115, 250.

Issue:

Whether or not the period to repurchase of petitioner has already lapsed.

Held:

Period of repurchase has not yet lapsed because the respondent was not notified of the sale.
The 30-day period for the right of repurchase starts only after actual notice not only of a perfected
sale but of actual execution and delivery of the deed of sale.

The letter sent to the respondent by the other co-owners cannot be considered as actual
notice because the letter was only to inform her of the intention to sell the property but not its actual
sale. As such, the 30-day period has not yet commenced and the respondent can still exercise his
right to repurchase. The respondent should also pay only the 30K stipulated in the deed of sale
because a redemptioner’s right is to be subrogated by the same terms and conditions stipulated in
the contract.