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G.R. No. L-10141 January 31, 1958
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
PHILIPPINE RESOURCES DEVELOPMENT CORPORATION and
the COURT OF APPEALS, respondents.

Facts:

Apostol, allegedly acting for the Philippine Resources Development Corp.

(PRDC), contracted with the Bureau of Prison for the purchase of 100 tons
of designated logs, but only a small payment of the purchase price was
made. In lieu of the balance of the purchase price, he caused to be delivered
goods of the PRDC to the Bureau of Prison as payment for the outstanding
price. The Republic brought an action against Apostol for the collection of
sums owing to it for his purchase of Palawan Almaciga and other logs. His
total debt amounted to some P34,000. PRDC intervened claiming that
Apostol, as President of the company, without prior authority, took goods
(steel sheets, pipes, bars, etc) from PRDC warehouse and appropriated them
to settle his personal debts in favor of the government. The Republic
opposed the intervention of PRDC, arguing that price is always paid in
money and that payment in kind is no payment at all; hence, money and not
the goods of PRDC are under dispute.

The Government asserted that the subject matter of its litigation with
Apostol was a sum of money allegedly due to the Bureau of Prison from
Apostol and not the goods reportedly turned over by Apostol in payment of
his private debt to the Bureau of Prison and the recovery of which was
sought by PRDC; and for this reason, PRDC had no legal interest in the very
subject matter in litigation as to entitle it to intervene. The Government
argued that the goods which belonged to PRDC were not connected with the
sale because “Price ... is always paid in terms of money and the supposed
payment being in kind, it is no payment at all.”

Issues:

(1) Whether or not payment in kind is equivalent to price paid in money.

(2) Whether PRDC had the right to intervene in the sales transaction
executed between Apostol and the Bureau of Prisons and in the suit brought
by the Government to enforce such sale.

Held:

(1) YES. Price may be paid in money or ITS EQUIVALENT—in this case,
the goods. Payment need not be in the form of money. The prices for the
goods have, in fact, been assessed and determined.

Republic is not at all authority to say that under Article 1458, as it defines a
contract of sale and the obligation of the buyer to “pay the price certain in
money or its equivalent”, the term “equivalent” of price can cover other than
money or other media of exchange, since Republic covers not the perfection
stage of a contract of sale, but rather the consummation stage where the
price agreed upon (which ideally should be in money or its equivalent) can
be paid under the mutual arrangements agreed upon by the parties to the
contract of sale, even by dation in payment.

(2) Yes, PRDC thus has a substantial interest in the case and must be
permitted to intervene—its goods paid out without authority being under
dispute in this case. The Court held that the Government’s contentions were
untenable, ruling that Article 1458 provides that the purchaser may pay “a
price certain in money or its equivalent,” which means payment of the price
need not be in money. Whether the goods claimed by PRDC belong to it and
delivered to the Bureau of Prison by Apostol in payment of his account is
sufficient payment therefor, is for the court to pass upon and decide after
hearing all the parties in the case. PRDC therefore had a positive right to
intervene in the case because should the trial court credit Apostol with the
value price of the materials delivered by him, certainly PRDC would be
affected adversely if its claim of ownership to such goods were upheld.