Polytechnic University vs CA (Case Digest)

 Polytechnic University vs CA

G. R. No. 143513

 

Facts:

Firestone Ceramics Inc (Firestone) leased the portion of the property of National Development Corporation (DND) for the period of ten years and renewable for another ten years.  Firestone constructed on the leased property several warehouse for the fabrication of ceramic products.

NDC planed to dispose the subject propert in favor of petitioner PUP.  Upon learning the same; Firestone served notice on NDC conveying its desire to purchase the property in the exercise of its contractual right of refusal.

FIRESTONE instituted an action for specific performance to compel NDC to sell the leased property in its favor. FIRESTONE averred that it was pre-empting the impending sale of the NDC compound to petitioner PUP in violation of its leasehold rights over the 2.60-hectare8 property and the warehouses thereon which would expire in 1999.

PUP moved to intervene and asserted its interest in the subject property; PUP referred to Memorandum Order No. 214 issued by then President Aquino ordering the transfer of the whole NDC compound to the National Government, which in turn would convey the aforementioned property in favor of PUP at acquisition cost. The issuance was supposedly made in recognition of PUP's status as the "Poor Man's University" as well as its serious need to extend its campus in order to accommodate the growing student population.

Trial Court, judgment was rendered declaring the contracts of lease executed between FIRESTONE and NDC covering the 2.60-hectare property and the warehouses constructed thereon valid and existing until 2 June 1999. PUP was ordered and directed to sell to FIRESTONE the "2.6 hectare leased premises.  CA affirmed the decision of the trial court with modification as to the award of Attorney's Fee.

 

 

Issue:

Whether the courts a quo erred when they "conjectured" that the transfer of the leased property from NDC to PUP amounted to a sale

 

Held:

No.

 

Ratio:

Aside from the fact that the intention of NDC and PUP to enter into a contract of sale was clearly expressed in the Memorandum Order No. 214,31 a close perusal of the circumstances of this case strengthens the theory that the conveyance of the property from NDC to PUP was one of absolute sale, for a valuable consideration, and not a mere paper transfer as argued by petitioners.

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.32 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 gamut of transfers whereby ownership of a thing is ceded for a consideration.