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CASE DIGEST : VITANGCOL VS NEW VISTAS PROPERTIES on August 14, 2001 by and between Vitangcol and Maria Alipit.

between Vitangcol and Maria Alipit. Consequent


to the Vitangcol-Maria Alipit sale, TCT No. (25311) 2528 was canceled and
[G.R. NO. 176014 : September 17, 2009] TCT No. T-482731 issued in its stead in favor of Vitangcol on August 15, 2001.
Petition for Review under Rule 45

ALICE VITANGCOL and NORBERTO VITANGCOL, Petitioners, v. NEW VISTA Alarmed by the foregoing turn of events, New Vista lost no time in protecting
PROPERTIES, INC., MARIA ALIPIT, REGISTER OF DEEDS OF CALAMBA, its rights by, first, filing a notice of adverse claim over TCT No. T-482731,
LAGUNA, and the HONORABLE COURT OF APPEALS Respondents. followed by commencing a suit for quieting of title before the RTC.
DECISION
Vitangcol – MTD

New Vista filed an amended complaint


FACTS : Subject of the instant controversy is Lot No. 1702 covered by Transfer
 appending: deed of absolute sale De Guzman, as agent authorized
Certificate of Title (TCT) No. (25311) 2528 of the Calamba, Laguna Registry in
agent of the Alipits
the name of Maria A. Alipit and Clemente A. Alipit, married to Milagros
 did not have, as attachment, the June 18, 1989 SPA in the original
complaint

On June 18, 1989, Maria and Clemente A. Alipit, with the marital consent of Vitangcol filed a motion to dismiss,
the latters wife, executed a Special Power of Attorney[4] (SPA) constituting
RTC denied Vitangcols and Maria Alipits separate motions to dismiss the
Milagros A. De Guzman as their attorney-in-fact to sell their property
amended complaint.
described in the SPA as located at Bo. Latian, Calamba, Laguna covered by
TCT No. (25311) 2538 with Lot No. 1735 consisting of 242,540 square meters  the amended complaint sufficiently stated a cause of action
more or less. Pursuant to her authority under the SPA, De Guzman executed o as shown therein that after the purchase and compliance
on August 9, 1989 a Deed of Absolute Sale[5] conveying to New Vista with its legal obligations relative thereto, New Vista was
Properties, Inc. (New Vista) a parcel of land with an area of 242,540 square immediately placed in possession of the subject lot, but
meters situated in Calamba, Laguna. which Maria Alipit, by herself, later sold to Vitangcol to New
Vistas prejudice
 MR – granted and dismissed complaint: New Vista did not attach the
Following the sale, New Vista immediately entered the subject lot, fenced it SPA
with cement posts and barbed wires, and posted a security guard to deter
CA (appeal) - reversed RTC Order
trespassers. he controversy arose more than a decade later when respondent
New Vista learned that the parcel of land it paid for and occupied, i.e., Lot No.
1702, was being claimed by petitioners Vitangcol on the strength of a Deed
of Absolute Sale for Lot No. 1702 under TCT No. (25311) 2528 entered into
ISSUE : WON THE DECISION AND THE RESOLUTION OF THE TWELFTH The rule is that in a motion to dismiss, a defendant hypothetically admits
DIVISION OF THE COURT OF APPEALS UNDER CHALLENGE ARE CONTRARY TO the truth of the material allegations of the ultimate facts contained in the
LAW plaintiffs complaint.[21]

MTD: grounded on the failure to state a cause of action,

HELD :  GR: ruling: should, as rule, be based only on the facts alleged in the
complaint.[
The Rules of Court defines cause of action as the act or omission by which a
 Exceptions.
party violates a right of another.
o no hypothetical admission of conclusions or interpretations
It contains three elements: of law which are false;
o legally impossible facts;
(1) a right existing in favor of the plaintiff; o facts inadmissible in evidence;
o facts which appear by record or document included in the
(2) a correlative duty on the part of the defendant to respect that right; and
pleadings to be unfounded;
(3) a breach of the defendants duty. o allegations which the court will take judicial notice are not
true;[
It is, thus, only upon the occurrence of the last element that a cause of action o and where the motion to dismiss was heard with submission
arises, giving the plaintiff a right to file an action in court for recovery of of evidence which discloses facts sufficient to defeat the
damages or other relief.[20]. claim.[

New Vistas: “De Guzmans SPA to sell should not be considered for not having
been incorporated as part of its amended complaint”
Lack of cause of action is, however, not a ground for a dismissal of the
complaint through a motion to dismiss under Rule 16 of the Rules of Court, SC: incorrect since Vitangcol duly submitted that piece of document in court
in the course of the June 7, 2004 hearing on the motion to dismiss. Thus, the
 determination of a lack of cause of action
trial court acted within its discretion in considering said SPA relative to the
o can only be made during and/or after trial.
motion to dismiss the amended complaint.
What is dismissible via that mode:
Indeed, upon a consideration of the amended complaint, its annexes, with
 is failure of the complaint to state a cause of action. Sec. 1(g) of Rule the June 18, 1989 SPA thus submitted, the Court is inclined, in the main, to
16 of the Rules of Court provides that a motion may be made on the agree with the appellate court that the amended complaint sufficiently
ground that the pleading asserting the claim states no cause of states a cause of action.
action.
Next query is: Assuming hypothetically the veracity of the material allegations Subsequently, Jinco filed an Urgent Motion to Lift the Search Warrant
in the amended complaint, but taking into consideration the SPA, would New and Return the Articles Seized.
Vista still have a cause of action against Vitangcol and Maria Alipit sufficient
to support its claim for relief consisting primarily of quieting of title?  RTC judge granted the motion. The judge ruled that based on
the ruling in the 1988 case of 20th Century Fox Film Corporation
The poser should hypothetically be answered in the affirmative. vs CA, before a search warrant could be issued in copyright
cases, the master copy of the films alleged to be pirated must
MTD for failure to state a cause of action,
be attached in the application for warrant.
 focus is on the sufficiency, CA - dismissed and the motion for reconsideration thereof was denied
 not the veracity, of the material allegations.
SC
MTD for lack of cause of action,
Respondents aver that
 it must be shown that the claim for relief in the complaint does not
exist,  being foreign corporations,
 rather than that a claim has been defectively stated, or is  petitioners should have such license to be able to maintain an
ambiguous, indefinite, or uncertain. action in Philippine courts.

Petitioners: we are the copyright owners

 deny that they are doing business in the Philippines

Columbia Pictures Entertainment, Inc. vs Court of Appeals Corporation Code provides:

petition for review on certiorari Sec. 133. Doing business without a license. No foreign corporation
transacting business in the Philippines without a license, or its
In 1986, the Videogram Regulatory Board (VRB) successors or assigns, shall be permitted to maintain or intervene in
 applied for a warrant against Jose Jinco (Jingco), any action, suit or proceeding in any court or administrative agency
o owner of Showtime Enterprises of the Philippines; but such corporation may be sued or proceeded
against before Philippine courts or administrative tribunals on any
 for allegedly pirating movies produced and owned by Columbia
valid cause of action recognized under Philippine laws.
Pictures and other motion picture companies.
license is not necessary if it is not engaged in business in the Philippines.[11]
Jingco filed a motion to quash the search warrant

 denied in 1987.
Among the grounds for a motion to dismiss under the Rules of Court are HELD: No. In 1986, obviously the 1988 case of 20th Century Fox was not yet
promulgated. The lower court could not possibly have expected more
 lack of legal capacity to sue[29] evidence from the VRB and Columbia Pictures in their application for a search
 and that the complaint states no cause of action.[30] warrant other than what the law and jurisprudence, then existing and
judicially accepted, required with respect to the finding of probable cause.
Lack of legal capacity to sue

 means that the plaintiff is not in the exercise of his civil rights, or does
not have the necessary qualification to appear in the case, or does The Supreme Court also revisited and clarified the ruling in the 20th Century
not have the character or representation he claims. Fox Case. It is evidently incorrect to suggest, as the ruling in 20th Century Fox
 former refers to a plaintiffs general disability to sue, such as on may appear to do, that in copyright infringement cases, the presentation of
account of minority, insanity, incompetence, lack of juridical master tapes of the copyright films is always necessary to meet the
personality or any other general disqualifications of a party requirement of probable cause for the issuance of a search warrant. It is true
that such master tapes are object evidence, with the merit that in this class
On the other hand, a case is dismissible for lack of personality to sue upon
of evidence the ascertainment of the controverted fact is made through
 proof that the plaintiff is not the real party-in-interest, hence demonstration involving the direct use of the senses of the presiding
grounded on failure to state a cause of action.[ magistrate. Such auxiliary procedure, however, does not rule out the use of
 latter refers to the fact that the plaintiff is not the real party- in- testimonial or documentary evidence, depositions, admissions or other
interest. classes of evidence tending to prove the factum probandum, especially
where the production in court of object evidence would result in delay,
CAB inconvenience or expenses out of proportion to is evidentiary value.

Ground available for barring recourse to our courts by an unlicensed foreign In fine, the supposed pronouncement in said case regarding the necessity for
corporation doing or transacting business in the Philippines the presentation of the master tapes of the copy-righted films for the validity
of search warrants should at most be understood to merely serve as a
 should properly be lack of capacity to sue,
guidepost in determining the existence of probable cause in copy-right
 NOT lack of personality to sue.
infringement cases where there is doubt as to the true nexus between the
o a corporation whose legal rights have been violated is
master tape and the pirated copies. An objective and careful reading of the
undeniably such, if not the only, real party-in-interest to
decision in said case could lead to no other conclusion than that said directive
bring suit thereon although, for failure to comply with the
was hardly intended to be a sweeping and inflexible requirement in all or
licensing requirement, it is not capacitated to maintain any
similar copyright infringement cases.
suit before our courts.
CA dec reversed

Substantive ISSUE: Whether or not the 20th Century Fox ruling may be
applied retroactively in this case.
Magellan Aerospace v PAF CA

petition1 for review on certiorari under Rule 45  reversing the RTC order of dismissal  Chervin and Sosing
 affirmed the dismissal  against PAF

MAC moved for a partial reconsideration of the decision but its motion was
PAF
denied by the CA in its January 26, 2015 Resolution.
 contracted Chervin Enterprises, Inc. (Chervin) for the overhaul of two
aircraft engines
 Chervin commissioned MAC SC: Denied Petition
 MAC outsourced the overhaul to National Flight Services, Inc. (NFSI)
COA - an act or omission by which a party violates a right of another.
 were overhauled and delivered to the PAF
plaintiff must show on the face of the complaint that
MAC was not paid for the services
1. there exists a legal right on his or her part,
MAC filed a complaint
2. a correlative obligation of the defendant to respect such
 sum of money before the RTC against Chervin right, and
o with its Managing Director Sosing and the PAF 3. an act or omission of such defendant in violation of the
plaintiffs rights.
PAF – MTD
defendant may file a motion to dismiss (Section 1(g), Rule 16)
 it it was never privy to any contract between Chervin and MAC
 it already paid Chervin  pleading asserting the claim stated no cause of action
 issue
o not whether a plaintiff will ultimately prevail,
Chervin – MTD o but whether the claimant is entitled to offer evidence to
support the claims
 MAC had no capacity to sue because of its status as a non-resident
 inquiry is then limited only into the sufficiency, not the veracity of the
doing business in the Philippines without the required license
material allegations.
 no disclosure was made that it was suing on an isolated transaction
 test:
o real party-in-interest was NFSI
o whether the court can render a valid judgment in accordance
RTC granted both motions to dismiss with the prayer
 if the truth of the facts alleged is admitted
MAC appealed before the CA
CAB G.R. No. 171337 July 11, 2012

 MAC: “Chervin "acted for and in behalf of a "principal,"” BENJAMIN CUA (CUA UlAN TEK), Petitioner,
o SC : not an ultimate fact
vs. WALLEM PHILIPPINES SHIPPING, INC. and ADVANCE SHIPPING
o SC : Nothing can be found in the complaint
CORPORATION, Respondents.
o No factual circumstances were alleged
o Not even in the annexes petition for review on certiorari
 factual circumstances serving as predicates were not provided,
 MAC entirely did was to state a mere conclusion of law, FACTS:
 Without the constitutive factual predicates, any assertion could
Cua
never satisfy the threshold of an ultimate fact.
 filed a civil action for damages against Wallem and Advance Shipping
before the RTC of Manila.
DOCTRINE: In a motion to dismiss filed under Section 1(g) of Rule 16,
Cua sought the payment for damage of shipment of Brazilian Soyabean
 issue is consigned to him. He claimed that the loss was due to the respondents’
o not whether the plaintiff is entitled to relief. failure to observe extraordinary diligence in carrying the cargo. Advance
o but whether the plaintiff, on the basis of the allegations Shipping (a foreign corporation) was the owner and manager of M/V Argo
hypothetically admitted as true, can be permitted to Trader that carried the cargo, while Wallem was its local agent.
substantiate the claims during the trial.
Wallem
3 Day Rule- Hearing on MTD
 filed its own motion to dismiss,
 MAC's counsel did not object to receiving the copy of PAF's motion o raising the sole ground of prescription which is under
to dismiss on the same day. section 3(6) of the Carriage of Goods by Sea Act (COGSA).
 MAC was afforded the opportunity to be heard  goods were delivered to Cua on August 16, 1989,
 but the damages suit was instituted only on November 12, 1990 –
o more than one year than the period allotted under the
COGSA.
 Cua’s action has been barred.

Cua then filed an opposition to Wallem’s motion to dismiss,

 denyied the latter’s claim of prescription by referring to the August


10, 1990 telex message sent by Mr. A.R. Filder of Thomas Miller,
manager of the UK P&I Club, which stated that Advance Shipping
agreed to extend the commencement of suit for 90 days, from o recognized the validity of an agreement between the carrier
August 14, 1990 to November 12, 1990; the extension was made and the shipper/consignee extending the one-year period to
with the concurrence of the insurer of the vessel, the UK P&I Club. file a claim.

pleadings submitted by the respondents

RTC issued its decision ordering the respondents jointly and severally liable  failed to specifically deny Cua’s allegation of an agreement
to pay as damages to Cua. extending the period to file an action to November 12, 1990.

CA Set Aside the decision of RTC Wallem’s motion to dismiss

 the August 10, 1990 telex message, extending the period to file an  simply referred to the fact that Cua’s complaint was filed more than
action, was neither attached to Cua’s opposition to Wallem’s one year from the arrival of the vessel,
motion to dismiss, nor presented during trial.  but it did not contain a denial of the extension.
 MR filed by Cua was then denied
Advance Shipping’s motion to dismiss,
ISSUE:
 focused solely on its contention that the action was premature for
Whether or not Cua’s claim for payment of damages against the respondents failure to first undergo arbitration.
has prescribed.
joint answer submitted by the respondents
RULING:
 denied Cua’s allegation of an extension,
The Supreme Court SET ASIDE the decision of the Court of Appeals and  they made no further statement other than a bare and unsupported
REINSTATED the decision of the Regional Trial Court of Manila. The claim of contention that Cua’s "complaint is barred by prescription and/or
CUA HAS WAS NOT PRESCRIBED. laches."
 did not provide any factual basis for their belief that the complaint
The CA failed to appreciate the admissions made by the respondents in their
had prescribed.
pleadings that negate a finding of prescription of Cua’s claim.
Given the respondents’ failure to specifically deny the agreement on the
Respondents
extension of the period to file an action, the Supreme Court considers the
 admitted the agreement extending the period to file the claim. extension of the period as an admitted fact.
Under Section 3(6) of the COGSA, the carrier is discharged from
liability for loss or damage to the cargo "unless the suit is brought
within one year after delivery of the goods or the date when the
goods should have been delivered."29
 Jurisprudence,
Caltex (Philippines) Inc. v. Ma. Flora Singson-Aguirre Respondents,

G.R. Nos. 170746-47. March 9, 2016  the heirs of the victims of the tragedy,
 initially instituted a class action with the Louisiana Court in December
petition for review on certiorari
1988.
Doctrine: Article 1106 of the Civil Code provides that “[b]y prescription, one o dismissed the case on November 30, 2000 on the ground of
acquires ownership and other real rights through the lapse of time in the forum non conveniens.
manner and under the conditions laid down by law. In the same way, rights  only on March 6, 2001 that respondents filed an action for damages
and conditions are lost by prescription.” The first sentence refers to for breach of contract of carriage and quasi-delict with the RTC of
acquisitive prescription, which is a mode of “acquisition of ownership and Catbalogan, Samar against petitioners, Sulpicio, Vector Shipping, and
other real rights through the lapse of time in the manner and under the Steamship Mutual Underwriting Association, Bermuda Limited.
conditions provided by law.” The second sentence pertains to extinctive  RTC of Catbalogan, motu proprio dismissed the complaint pursuant
prescription “whereby rights and actions are lost by the lapse of time.” It is to Section 1, Rule 9 of the 1997 Rules of Civil Procedure as the
also called limitation of action. respondents’ cause of action had already prescribed.
 the petitioners as defendants therein,
o who were not served with summons,
o filed a motion for reconsideration, alleging that they are
The purpose of the second sentence is to protect the diligent and vigilant, not
waiving their defense of prescription, among others.
the person who sleeps on his rights, forgetting them and taking no trouble of
o RTC of Catbalogan, however, merely noted the petitioners’
exercising them one way or another to show that he truly has such rights.
motion.

Respondents
Facts:
 again filed a case with the Louisiana Court
Caltex o again dismissed on the same ground of forum non
conveniens.
 chartered M/T Vector, a commercial tanker owned and operated by o thereafter filed a filed a motion for intervention and a
Vector Shipping Corporation, Inc., to transport its petroleum complaint-in-intervention with the pending consolidated
products. cases before the RTC of Manila.
On its voyage in December 20, 1987, it figured into a collision with M/V o codefendants in the consolidated cases, Sulpicio and
Doña Paz, an inter-island passenger vessel owned and operated by Steamship were furnished with a copy of the respondents’
Sulpicio Lines, Inc. The collision resulted with an estimate of about 4,000 motion to intervene.
casualties. o RTC of Manila denied the said motions the ground of bar by
prior judgment and thereby disregarded petitioners’
unconditional waiver of their defense of prescription.
petitioners instituted a petition for certiorari before the Court of Appeals more than 13 years after the collision occurred. Article 1139 of the Civil
Code states that actions prescribe by the mere lapse of time fixed by law.
CA dismissed
The RTC of Catbalogan cannot be faulted for the motu proprio dismissal of
 RTC of Catbalogan has the effect of res judicata, the complaint filed before it. It is settled that prescription may be considered
 MR Denied by the courts motu proprio if the facts supporting the ground are apparent
from the pleadings or the evidence on record.

Issue: Whether the courts were correct in dismissing the case despite The Court cannot consider petitioner’s unconditional waiver as basis in order
petitioners’ waiver of their defense of prescription. to reverse the rulings of the courts below as the dismissal of the complaint
had become final and binding on both the petitioners and the respondents.

Held: Yes. The petitioners cannot be permitted to assert their right to waive
the defense of prescription when they had foregone the same through their It is not contested that the petitioners were not served with summons by the
own omission. Article 1106 of the Civil Code provides that “[b]y prescription, RTC of Catbalogan prior to the motu proprio dismissal of the respondents’
one acquires ownership and other real rights through the lapse of time in the complaint. Not having been served with summons, the petitioners were not
manner and under the conditions laid down by law. In the same way, rights initially considered as under the jurisdiction of the court. However, the
and conditions are lost by prescription.” The first sentence refers to petitioners voluntarily submitted themselves under the jurisdiction of the
acquisitive prescription, which is a mode of “acquisition of ownership and RTC of Catbalogan by filing their motion for reconsideration.
other real rights through the lapse of time in the manner and under the
conditions provided by law.” The second sentence pertains to extinctive Section 20, Rule 14 of the 1997 Rules of Court states:
prescription “whereby rights and actions are lost by the lapse of time.” It is
Sec. 20. Voluntary appearance. - The defendant's voluntary
also called limitation of action.
appearance in the action shall be equivalent to service of summons.
The inclusion in a motion to dismiss of other grounds aside from lack
of jurisdiction over the person of the defendant shall not be deemed
This case involves the latter type of prescription, the purpose of which is to a voluntary appearance.
protect the diligent and vigilant, not the person who sleeps on his rights,
forgetting them and taking no trouble of exercising them one way or another Previous to the petitioners’ filing of their motion for reconsideration, the RTC
to show that he truly has such rights. of Catbalogan issued an Entry of Final Judgment. Although the order was
already final and executory with regard to the respondents; it was not yet, on
the part of the petitioners. It was only after the petitioners’ failure to appeal
or seek any other legal remedy to challenge the subsequent Order dismissing
Respondents’ cause of action against the petitioners has prescribed under
their motion for reconsideration that the dismissal became final on their part.
the Civil Code. The respondents brought their claim before a Philippine court
But neither the petitioners nor the respondents resorted to any action to Antonio Litonjua, the president and general manager of ALS
overturn the orders of the RTC of Catbalogan, which ultimately led to their Management & Development Corporation.
finality.
Litonjua

 submitted to SMAB a firm offer to buy all of the latter’s shares in


Swedish Match v. CA Phimco and all of Phimco’s shares in PTF and OTT for
P750,000,000.00.
FACTS:
 However, CEO Massimo Rossi informed respondents that their price
Swedish Match AB (SMAB) - Petitoner offer was below their expectations.
 Again, on May 1990, Litonjua offered to buy the disputed shares,
 not doing business in the Philippines excluding the lighter division for US$36M.
 had 3 subsidiary corporations in the Philippines,  Rossi wrote that ALS should undertake a due diligence process or pre-
 all organized under Philippine laws, to wit: acquisition audit and review of the draft contract for the Match and
o Phimco Industries (Phimco), Forestry activities of Phimco at ALS convenience.
o Provident Tree Farms (PTF),  2 days prior to the deadline for submission of the final bid, Litonjua
o and OTT/Louie. told Rossi that they would be unable to submit the final offer by 30
June 1990, considering that the acquisition audit of Phimco and the
STORA, the parent company of SMAB,
review of the draft agreements had not yet been completed.
 decided to sell SMAB of Sweden and its worldwide match, lighter, and  Thus, Enriquez sent notice to Litonjua that they would be constrained
shaving products operation to Swedish Match NV (SMNV). to entertain bids from other parties in view of Litonjua’s failure to
make a firm commitment for the shares of Swedish Match.
 In his letter, Litonjua asserted that they submitted the best bid and
that they were already finalizing the terms of the sale.
Ed Enriquez, VP of Swedish Match Sociedad Anonimas (SMSA) which is
SMAB’s management company,

 under strict instructions More than 2 months from receipt of Litonjua’s last letter, Enriquez advised
o sale of Phimco shares should be executed on or before 30 the former that the proposed sale of SMAB’s shares in Phimco with local
June 1990 in view of the tight loan covenants of SMNV. buyers did not materialize.
o He came to the Philippines and informed the Philippine
financial and business circles that the Phimco shares were for Enriquez then invited Litonjua to resume negotiations with SMAB for the sale
sale. of Phimco shares. He indicated that SMAB would be prepared to negotiate
o Several interested parties tendered offers to acquire the with ALS on an exclusive basis for a period of 15 days from 26 September
Phimco shares one of which was private respondent, 1990 subject to the terms contained in the letter. Additionally, Enriquez
clarified that if the sale would not be completed at the end of the 15-day
period, SMAB would enter into negotiations with other buyers. Litonjua not have been dismissed on the ground of unenforceability under the
emphasized that the new offer constituted an attempt to reopen the already Statute of Frauds
perfected contract of sale of the shares in his favor.
Petitioners: that Litonjua made it clear in his letters that the quoted prices
Litonjua - irked by SMABs decision to junk his bid – renegotiated were merely tentative and still subject to further negotiations between him
and the seller.
 objections to the totally new set of terms and conditions for the sale
of the Phimco shares.  “NO COA”
 “lready perfected contract of sale of the shares in his favor.”  no meeting of the minds on the essential terms and conditions of the
sale because
Respondents, as plaintiffs,
 SMAB did not accept respondent’s offer that consideration would be
 filed before the Regional Trial Court (RTC) of Pasig paid in Philippine pesos.
 complaint for specific performance with damage  They argued as well that the foregoing circumstances prove that they
failed to reach an agreement on the sale of the Phimco shares.
Petitioners

 alleged that respondents have no cause of action,


o no perfected contract, whether verbal or written, existed ISSUE:
between them.
 that respondents cause of action, if any,
o was barred by the Statute of Frauds since there was no Was there a perfected contract of sale with respect to Phimco shares?
written instrument or document evidencing the alleged
sale of the Phimco shares to respondents.
HELD:
RTC dismissed respondents complaint
No.
 no perfected contract of sale between petitioners and respondents.
 letter was a mere invitation contracts undergo three distinct stages, to wit: negotiation; perfection or
birth; and consummation
Court of Appeals reversed the trial courts decision.
There was no perfected contract of sale since Litonjua’s letter of proposing
CA ruled that the series of written communications between petitioners and
acquisition of the Phimco shares for US$36M was merely an offer. Consent in
respondents collectively constitute a sufficient memorandum of their
a contract of sale should be manifested by the meeting of the offer and
agreement under Article 1403 of the Civil Code. Thus, letters exchanged by
acceptance upon the thing and the cause which are to constitute the
and between the parties, taken together, were sufficient to establish that an
contract. The lack of a definite offer on the part of respondents could not
agreement to sell the disputed shares to respondents was reached. should
possibly serve as the basis of their claim that the sale of the Phimco shares in
their favor was perfected, for one essential element of a contract of sale was respect to its cause of action for damages against the officers of Phimco
obviously wanting the price certain in money or its equivalent. The price must based on the latters alleged self-serving dilatory maneuvers.
be certain, otherwise there is no true consent between the parties.
Respondents’ failure to submit their final bid on the deadline set by
petitioners prevented the perfection of the contract of sale. It was not WHEREFORE, the petition is in part GRANTED. The appealed Decision is
perfected due to the absence of one essential element which was the price hereby MODIFIED insofar as it declared the agreement between the parties
certain in money or its equivalent. enforceable under the Statute of Frauds. The complaint before the trial court
With respect to the first cause of action for specific performance, apart from is ordered DISMISSED insofar as the cause of action for specific performance
petitioners alleged refusal to honor the contract of sale which has never is concerned. The case is ordered REMANDED to the trial court for further
been perfected in the first place respondents made a number of averments proceedings with respect to the cause of action for damages as above
in their complaint all in support of said cause of action. Respondents specified.
claimed that petitioners were guilty of promissory estoppel,[55] warranty Thus, the Court cannot forthwith order dismissal of the complaint without
breaches[56] and tortious conduct[57] in refusing to honor the alleged affording respondents an opportunity to substantiate their allegations with
contract of sale. These averments are predicated on or at least interwoven respect to its cause of action for damages against the officers of Phimco
with the existence or perfection of the contract of sale. As there was no based on the latters alleged self-serving dilatory maneuvers.
such perfected contract, the trial court properly rejected the averments in
conjunction with the dismissal of the complaint for specific performance.

However, respondents second cause of action due to the alleged malicious


and deliberate delay of the Phimco management in the delivery of
documents necessary for the completion of the audit on time, not being
based on the existence of the contract of sale, could stand independently
of the action for specific performance and should not be deemed barred by
the dismissal of the cause of action predicated on the failed contract. If
substantiated, this cause of action would entitle respondents to the
recovery of damages against the officers of the corporation responsible for
the acts complained of.

Thus, the Court cannot forthwith order dismissal of the complaint without
affording respondents an opportunity to substantiate their allegations with