LIMKETKAI SONS MILLING, INC. vs.

CA and BPI and NBS

RTC Ruling: RTC of the National Capital Judicial Region stationed in Pasig ruled that there was a perfected
contract of sale between petitioner and BPI. It stated that there was mutual consent between the parties; the
subject matter is definite; and the consideration was determined. It concluded that all the elements of a
consensual contract are attendant. It ordered the cancellation of a sale effected by BPI to respondent NBS
while the case was pending and the nullification of a title issued in favor of said respondent NBS.

CA Ruling: it was held that no contract of sale was perfected because there was no concurrence of the three
requisites enumerated in Article 1318 of the Civil Code. The decision of the trial court was reversed and the
complaint dismissed.

ISSUE: Whether or not there was a perfected contract of sale

SC RULING: There is no dispute in regard to the following: (a) that BPI as trustee of the property of Philippine
Remnant Co. authorized a licensed broker, Pedro Revilla, to sell the lot for P1,000.00 per square meter; (b)
that Philippine Remnants confirmed the authority to sell of Revilla and the price at which he may sell the lot; (c)
that petitioner and Revilla agreed on the former buying the property; (d) that BPI Assistant Vice-President
Rolando V. Aromin allowed the broker and the buyer to inspect the property; and (e) that BPI was formally
informed about the broker having procured a buyer.

The perfection of the contract took place when Aromin and Albano, acting for BPI, agreed to sell and
Alfonso Lim with Albino Limketkai, acting for petitioner Limketkai, agreed to buy the disputed lot at P1,000.00
per square meter. Aside from this there was the earlier agreement between petitioner and the authorized
broker. There was a concurrence of offer and acceptance, on the object, and on the cause thereof.

The phases that a contract goes through may be summarized as follows:

a. preparation, conception or generation, which is the period of negotiation and bargaining,
ending at the moment of agreement of the parties;
b. perfection or birth of the contract, which is the moment when the parties come to agree on
the terms of the contract; and
c. consummation or death, which is the fulfillment or performance of the terms agreed upon in
the contract (Toyota Shaw, Inc. vs. Court of Appeals, G.R. No. 116650, May 23, 1995).

In the case at bench, the allegation of NBS that there was no concurrence of the offer and 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 (Claudel vs. Court of Appeals, 199 SCRA 113, 119 [1991]). The
requisite form under Article 1458 of the Civil Code is merely for greater efficacy or convenience and the failure
to comply therewith does not affect the validity and binding effect of the act between the parties ( Vitug,
Compendium of Civil Law and Jurisprudence, 1993 Revised Edition, p. 552). If the law requires a document or
other special form, as in the sale of real property, the contracting parties may compel each other to observe
that form, once the contract has been perfected. Their right may be exercised simultaneously with action upon
the contract (Article 1359, Civil Code).

While there is no written contract of sale of the Pasig property executed by BPI in favor of plaintiff,
there are abundant notes and memoranda extant in the records of this case evidencing the elements of a
perfected contract. There is Exhibit P, the letter of Kenneth Richard Awad addressed to Roland Aromin,
authorizing the sale of the subject property at the price of P1,000.00 per square meter giving 2% commission to
the broker and instructing that the sale be on cash basis. Concomitantly, on the basis of the instruction of Mr.
Awad, (Exh. P), an authority to sell, (Exh. B) was issued by BPI to Pedro Revilla, Jr., representing Assetrade
Co., authorizing the latter to sell the property at the initial quoted price of P1,000.00 per square meter which
was altered on an unaccepted offer by Technoland. After the letter authority was issued to Mr. Revilla, a letter
authority was signed by Mr. Aromin allowing the buyer to enter the premises of the property to inspect the
same (Exh. C). On July 9, 1988, Pedro Revilla, Jr., acting as agent of BPI, wrote a letter to BPI informing it that
he had procured a buyer in the name of Limketkai Sons Milling, Inc. with offices at Limketkai Bldg., Greenhills,
San Juan, Metro Manila, represented by its Exec. Vice-President, Alfonso Lim (Exh. D). On July 11, 1988, the
plaintiff, through Alfonso Lim, wrote a letter to the bank, through Merlin Albano, confirming their transaction
regarding the purchase of the subject property (Exh. E). On July 18, 1988, the plaintiff tendered upon the
officials of the bank a check for P33,056,000.00 covered by Check No. CA510883, dated July 18, 1988. On
July 1, 1988, Alfonso Zamora instructed Mr. Aromin in a letter to resubmit new offers only if there is no
transaction closed with Assetrade Co. (Exh. S). Combining all these notes and memoranda, the Court is
convinced of the existence of perfected contract of sale.

WHEREFORE, the questioned judgment of the CA is hereby REVERSED and SET ASIDE. The June
10, 1991 judgment of the RTC of The National Capital Judicial Region stationed in Pasig, Metro Manila is
REINSTATED except for the award of Ten Million Pesos (P10,000,000.00) damages which is hereby
DELETED.