Limketkai Sons Milling vs. CA [G.R. No. 118509.

December 1, 1995]

Facts: On June 23, 1988, Pedro Revilla, Jr., a licensed real estate broker was given formal authority by BPI
to sell the lot for P1,000.00 per square meter. The owners of the Philippine Remnants concurred this
arrangement. Broker Revilla contacted Alfonso Lim of petitioner company who agreed to buy the land.
On July 9, 1988, Revilla formally informed BPI that he had procured a buyer, herein petitioner. On July 11,
1988, petitioner's officials, Alfonso Lim and Albino Limketkai, went to BPI to confirm the sale. Vice-
President Merlin Albano and Asst. Vice-President Aromin entertained them. The parties agreed that the
lot would be sold at P1,000.00 per square meter to be paid in cash. The authority to sell was on a first
come, first served and non-exclusive basis; there is no dispute over petitioner's being the first comer and
the buyer to be first served. Alfonso Lim then asked if it was possible to pay on terms. The bank officials
stated that there was no harm in trying to ask for payment on terms because in previous transactions, the
same had been allowed. It was the understanding, however, that should the term payment be
disapproved, then the price shall be paid in cash. Two or three days later, petitioner learned that its offer
to pay on terms had been frozen. Alfonso Lim went to BPI on July 18, 1988 and tendered the full payment
of P33,056,000.00 to Albano. The payment was refused because Albano stated that the authority to sell
that particular piece of property in Pasig had been withdrawn from his unit. The same check was tendered
to BPI Vice-President Nelson Bona who also refused to receive payment. An action for specific
performance with damages was thereupon filed on August 25, 1988 by petitioner against BPI. In the
course of the trial, BPI informed the trial court that it had sold the property under litigation to NBS on July
14, 1989.

Issue: Whether or not such contract is covered by the statute of frauds.

Held: In the case at bench, the allegation that there was no concurrence of the offer and the acceptance
upon the cause of the contract is belied by the testimony of the very BPI official with whom the contract
was perfected. Aromin and Albano concluded the sale for BPI. The fact that the deed of sale still had to
be signed and notarized does not mean that no contract had already been perfected. A sale of land is valid
regardless of the form it may have been entered into. The requisite form under Article 1458 of the Civil
Code is merely for greater efficacy or convenience and the failure to comply does not affect the validity
and binding effect of the act between parties. Therefore, such contract that was made constituted fraud
and is covered by the statute of frauds. BPI should be held liable and can be sued for damages.