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Form of Contracts

Article 1483. Subject to the provisions of the Statute of Frauds and of any other applicable statute, a contract of sale may be made in writing, or by word of mouth, or partly in writing and partly by word of mouth, or may be inferred from the conduct of the parties.

petitioner shall render an inventory of the existing stock which may be checked by an authorized representative of the former 7. Upon termination or cancellation of the Agreement, all goods held on consignment shall be held by petitioner for the account of the rubber company until their disposition is provided for by the latter. The stipulations of the contracting parties had the insistence on a relationship opposed to that apparent from the language employed might even yield the impression that such a mode of construction was resorted to in order that the applicability of a taxing statute might be rendered nugatory. Certainly, such a result is to be avoided. Swedish Match A.B. v. CA Facts: Swedish Match, AB (SMAB, a corporation organized under Swedish laws, had 3 subsidiary corporations in the Philippines organized under Philippine laws: Phimco, Provident Tree Farms, Inc, and OTT/Louie (Phils,), Inc. In 1988, STORA, SMABs parent company, decided to sell SMAB and the latters worldwide match, lighter and shaving products operation to Swedish Match NV (SMNV). Enriquez, VP of SMSA (management company of SMAB), was held under special instructions that the sale of Phimco shares should be executed on or before June 30, 1990. Respondent GM Antonio Litonjua of ALS Management and Development Corp. was one of the interested parties to acquire Phimco shares, offering US$36 million. After an exchange of information between CEO Rossi of SMAB and Litonjua, the latter informed that they may not be able to submit their final bid on the given deadline considering that the acquisition audit of Phimco and the review of the draft agreements have not been completed. In a letter dated July 3, 1990, Rossi informed Litonjua that on July 2, SMAB signed a conditional contract with a local group for the disposal of Phimco and that the latters bid would no longer be considered unless the local group would fail to consummate the transaction on or before September 15, 1990. Irked by SMABs decision to junk his bid, Litonjua asserted that the US$36 million bid was final, thus finalizing the terms of the sale. After 2 months from receipt of Litonjuas letter, Enriquez informed the former that the proposed sale with the local buyers did not materialize and invited to resume negotiations for the sale of Phimco shares based on a new set of conditions, as to reducing the period of sale from 30-day to 15, to which Litonjua expressed objections and emphasized that the new offer constituted an attempt to reopen the already perfected contract of sale. Issue is if there was a perfected contract of sale between petitioner and private respondent, with respect

Ker v. Lingad Facts: Ker & Co. Ltd. signed a contract with United States Rubber International, which, among others, states that Ker is a distributor of the American goods: All goods on consignment shall remain the property of the Company until sold by the Distributor to the purchaser or purchasers, but all sales made by the Distributor shall be in his name, in which the sale price of all goods sold less the discount given to the Distributor by the Company in accordance with the provision of paragraph 13 of this agreement, whether or not such sale price shall have been collected by the Distributor from the purchaser or purchasers, shall immediately be paid and remitted by the Distributor to the Company. It is further agreed that this agreement does not constitute Distributor the agent or legal representative 4 of the Company for any purpose whatsoever. Distributor is not granted any right or authority to assume or to create any obligation or responsibility, express or implied, in behalf of or in the name of the Company, or to bind the Company in any manner or thing whatsoever. Issue with CTA is if the relationship between the parties is that of broker/principal or vendor/vendee. Held: Relationship is that of agency. Since the company retained ownership of the goods, even as it delivered possession unto the dealer for resale to customers, the price and terms of which were subject to the companys control, the relationship between the company and the dealer is one of agency. 1. Petitioner can dispose of the products of the Company only to certain persons or entities and within stipulated limits, unless excepted by the contract or by the Rubber Company; 2. It merely receives, accepts and/or holds upon consignment the products, which remain properties of the latter company 3. Every effort shall be made by petitioner to promote in every way the sale of the products (Par. 3); that sales made by petitioner are subject to approval by the company 4. On dates determined by the rubber company, petitioner shall render a detailed report showing sales during the month 5. The rubber company shall invoice the sales as of the dates of inventory and sales report (Par. 14); that the rubber company agrees to keep the consigned goods fully insured under insurance policies payable to it in case of loss 6. Upon request of the rubber company at any time,

to the Phimco shares. Held: No perfected contract of sale since Litonjuas letter of proposing acquisition of the Phimco shares for US$36 million was merely an offer. Consent in a contract of sale should be manifested by the meeting of the offer and acceptance upon the thing and the cause which are to constitute the contract. The lack of a definite offer on the part of the respondents could not 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 needed to be certain --- the price in money or its equivalent. Obviously, there can be no sale without a price. Respondents attempt to prove the alleged verbal acceptance of their US$36 million bid becomes futile since there was in the first place no meeting of the minds with respect to the price, and such was merely a preliminary offer. Respondents failure to submit their final bid on the deadline set by the petitioners prevented the perfection of the contract of sale. UP v. Philab Facts: In 1979, Ferdinand E. Marcos Foundation (FEMF) decided to construct, for a donation, the Research Complex of UPLBs National Institute of Nanotechnology and Research. FEMF and Philab entered into a contract of sale for the lab furniture of said institute. FEMF remitted P600k, and later P800k, for said lab furniture. In 1982, UP, FEMF, and Philab entered a MOA in which FEMB agreed to donate, for a sum not exceeding P29M, the construction of buildings, labs and other capitalizations for the project, for which Philab was to provide lab equipment and furniture. However following the EDSA revolution, Philab wrote Pres. Aquino to secure help in the payment of FEMFs obligation. (In short, walang nagbayad.) Philab went after UP for unjust enrichment. UP answered that it is not liable to Philab, because it was merely a doneebeneficiary, and not privy to the implied contract of sale between FEMF and Philab. Held: Based on the records, an implied-in-fact contract of sale was entered into between the Philab and FEMF, not UP. UP is thus not liable. Unjust enrichment is a term used to depict result or effect of failure to make remuneration of or for property or benefits received under circumstances that give rise to legal or equitable obligation to account for them; to be entitled to remuneration, one must confer benefit by mistake, fraud, coercion, or request. Unjust enrichment is not itself a theory of reconveyance. Rather, it is a prerequisite for the enforcement of the doctrine of restitution. However the essential requisites for the application of Article 22 of the New Civil Code do not obtain in this case. Philab had a remedy against the FEMF via an action based on an implied-in-fact contract

with the FEMF for the payment of its claim. UP legally acquired the laboratory furniture under the MOA with FEMF; hence, it is entitled to keep the laboratory furniture.

CauseMoney or Equivalent Vda. De Portugal v. IAC Facts: Petitioner Cornelia and her late husband Pascual were able to accumulate several real properties, two of which two of their sons, Hugo and Emiliano, acquired the titles thereto on the pretext Hugo had to use them to secure a loan he was negotiating. When Pascual died, the other heirs, for the purpose of negotiating an extrajudicial partition of the deceased estate, Cornelia asked Hugo for the return of the two titles. Hugo manifested that the titles no longer exist. He showed petitioners two TCTs which cancelled the previous ones he was loaned. This falsification was triggered by a deed of sale by which the spouses De Portugal purportedly sold the two parcels of land covered by aforementioned titles. Emiliano denied any participation in the fraud, and caused the reconveyance of the lot previously under one of the two titles and which was conveyed to him under the void deed of sale. Hugo on the other hand refused to make restitution. This compelled Cornelia and his other siblings to institute an action for annulment on the controversial parcel of land covered by the other TCT. Issue: If the sale is valid. No. Held: Fraud and mistake are not the only vices present in the assailed contract of sale. There was a lack of consideration in said contract; Cornelia and the others only learned of the alleged sale after the deed was shown to them, and thus consideration or price was totally non-existent. Applying the provisions of Articles 1350, 1352, and 1409 of the new Civil Code in relation to the indispensable requisite of a valid cause or consideration in any contract, and what constitutes a void or inexistent contract, we rule that the disputed deed of sale is void ab initio or inexistent, not merely voidable. And it is provided in Article 1410 of the Civil Code, that '(T)he action or defense for the declaration of the inexistence of a contract does not prescribe.

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