H. E. Heacock Company v. Buntal Manufacturing Company, Gregorio Nieva and Maria A. De Nieva. [GR No. 44471.

September 7, 1938] TOPIC: Contract of Sale FACTS: 1. Buntal, et al rented a machine from Heacock Company for a term of 20 calendar months. 2. Buntal, et al werent able to return the machine and failed to pay the lease. 3. Lower court held that the contract is a contract of lease. It also decided that Heacock should pay P555, the total amount they bound themselves to pay (rate of rent is P35 a month starting August 1931) ISSUE: Is the contract a contract of purchase and sale on instalments? HELD: YES. 1. It was stipulated in the contract that: In consideration of the sum of P160 to it in hand paid by the hirer, the owner hereby grants to the hirer the option to purchase, while the present lease is in force and effect, the property made the subject of this agreement, at the purchase price of P860 2. Court finds that the amount P160 Buntal Manufacturing Company paid was an initial payment for the P860 purchase price. 3. Court also stated that the intention of the parties should be taken into consideration when the contract in question is not clear. a. The intention was seen in the contract they stipulated.