THE ROYAL SHIRT FACTORY, INC. vs.

CO BON TIC
G.R. No. L-6313 May 14, 1954

MONTEMAYOR, J.:

Facts:
The present appeal involves an action originally brought in the Municipal Court of
Manila by the plaintiff, the ROYAL SHIRT COURT, INC., to recover from defendant CO BON TIC
the sum of P1, 422 said to represent the balance of the purchase price of 350 pairs of
"Balleteenas" shoes at P7 a pair, with interest at 12 per cent per annum from August 27, 1948,
and 25 per cent of said sum as attorney's fees, and costs.
The principal issues in the Municipal Court was the nature of the sale of the 350 pairs of
shoes by plaintiff to defendant whether it was an outright sale as contended by the plaintiff,
or a sale merely on consignment as claimed by the defendant who wanted to return the shoes
not yet sold by him. There was also involved the question of the amount already paid by the
defendant to the plaintiff. The Municipal Court held that the contract was of sale on
consignment; that of the 350 pairs of shoes consigned, 207 pairs were sold at the rate of P8 a
pair, amounting to a total of P1, 656; and that defendant had paid the sum of P1, 028 to
plaintiff on account of the purchase price of the shoes sold, excluding the amount of P420,
value of Check No. 790264 issued by defendant as payment but returned to him by the plaintiff
and not replaced with cash. Judgment was rendered sentencing the defendant to pay plaintiff
the sum of P628 with interest thereon at the legal rate from the date of the filing of the
complaint, and to return to plaintiff the 143 pairs of shoes still unsold, unless he preferred to
retain and pay for them at the rate of P8 a pair within a period of fifteen days from receipt of a
copy of the decision.
The defendant appealed from the judgment to the Court of First Instance of Manila, and
after trial, the appellate court held that the transaction involved was one of outright sale at P7
per pair of shoes, sales tax included, the court accepting the version given by the plaintiff to the
effect that on the basis of the order slip (Exhibit A), the defendant had 9 days from delivery of
the shoes to make his choice of the two alternatives, that is to consider the sale of the 350 pairs
of shoes closed at the flat rate of P7 per pair, sales tax included, or, at the expiration of 9 days
to pay for the shoes sold at P8 per pair, and to return the remaining unsold ones to plaintiff;
and that, inasmuch as defendant, at the expiration of the 9 days stipulated, failed to return the
shoes, and actually began making partial payments on account of the purchase price agreed
upon, the transaction in the nature of a straight sale, was considered closed. The court also
found as did the Municipal Court that the amount of P420 represented by Check No. 790624
was never replaced or exchanged for cash by the defendant upon its return to him, and
consequently, it may not be considered as part payment.
Exhibit A of the plaintiff which was accepted, admitted and considered by the Court of First
Instance of Manila is an order slip which lists down and classifies the 350 shoes in question
according to color, and contains the following condition of the sale in the handwriting of Mr.
Chebat, the agent of the plaintiff who sold the shoes to the defendant
Issue: Is the contract between Royal Shirt Factory Inc. and Co Bon Tic a sale merely on consignment?
Held: No. It was an outright sale.
In Exhibit A, an order slip contained a condition in the sale. According to the testimony of Mr. Chebat it
means that Co could either consider the sale as 1) one on consignment, sell as many shoes as he
could for any price and pay for it at P8 a pair and at the end of 9 days, return the shoes unsold;
or 2)an absolute sale at P7 a pair. Since he was not able to return any of the shoes at the end of nine days, he must
have chosen the second alternative. But since this was self-serving evidence, it was
not admitted. The court looked at the conduct of the parties. Exhibit B was an invoice of the same
350 shoes including sales tax listed asP2, 450. It was noted down in his own handwriting the different
partial payments of P500, P528 and lastly the P420by check. It was obvious that he accepted the outright
sale since in making the partial payments, he made no mention of the number of shoes sold by him and
the number of shoes remaining unsold which he should have done if the sale was on consignment.
































AGILENT TECHNOLOGIES SINGAPORE (PTE) LTD. VS. INTEGRATED SILICON TECHNOLOGY
PHILIPPINES CORPORATION, et.al
G.R. No. 154618. April 14, 2004

YNARES-SANTIAGO, J.

FACTS: Petitioner Agilent Technologies Singapore (Pte.), Ltd. (Agilent) is a foreign corporation,
which, by its own admission, is not licensed to do business in the Philippines. Respondent
Integrated Silicon Technology Philippines Corporation (Integrated Silicon) is a private
domestic corporation, 100% foreign owned, which is engaged in the business of manufacturing
and assembling electronics components. The juridical relation among the various parties can be
traced to a Five-year Value Added Assembly Services Agreement (VAASA), entered into on
between Integrated Silicon and Hewlett-Packard Singapore Ltd., Singapore Components
Operation. Integrated Silicon was to locally manufacture and assemble fiber optics for export to
HP-Singapore. HP-Singapore, for its part was to consign raw materials to Integrated Silicon;
transport machinery to the plant of Integrated Silicon; and pay Integrated Silicon the purchased
price of the finished products. The VAASA had a five-year term, with a provision for annual
renewal by mutual consent.
On September 19, 1999, with the consent of Integrated Silicon, HP-Singapore assigned all
its rights and obligations in VAASA to Agilent. On June 1, 2001, Integrated Silicon filed a
complaint for specific performance and damages against Agilent and its officers. It alleged that
Agilent breached the parties oral agreement to extend the VAASA .

ISSUE: Does Agilent Technologies Singapore have the right of contract to possess the subject
properties?

HELD: Yes. Petitioners right of possession is founded on the ownership of the subject goods,
which ownership is not disputed and is not contingent on the extension or non-extension of
the VAASA.

By the clear terms of the VAASA, Agilents activities in the Philippines were confined to (1)
maintaining a stock of goods in the Philippines solely for the purpose of having the same
processed by Integrated Silicon; and (2) consignment of equipment with Integrated Silicon to be
used in the processing of products for export.










9.6 Q: When the goods object of a sale is delivered on trial or on satisfaction?
A: When goods are delivered to the buyer on trial or on satisfaction, or other
similar terms, the ownership therein passes to the buyer:
(1) When he signifies his approval or acceptance to the seller or does any other
act adopting the transaction;
(2) If he does not signify his approval or acceptance to the seller, but retains the
goods without giving notice of rejection, then if a time has been fixed for the
return of the goods, on the expiration of such time, and, if no time has been
fixed, on the expiration of a reasonable time. What is a reasonable time is a
question of fact. (Art. 1502 Civil Code of the Philippines)

9.7 Q: Auction Sale?
A: In the case of a sale by auction:
(1) Where goods are put up for sale by auction in lots, each lot is the subject of a
separate contract of sale.
(2) A sale by auction is perfected when the auctioneer announces its perfection
by the fall of the hammer, or in other customary manner. Until such
announcement is made, any bidder may retract his bid; and the auctioneer may
withdraw the goods from the sale unless the auction has been announced to be
without reserve.
(3) A right to bid may be reserved expressly by or on behalf of the seller, unless
otherwise provided by law or by stipulation.
(4) Where notice has not been given that a sale by auction is subject to a right to
bid on behalf of the seller, it shall not be lawful for the seller to bid himself or to
employ or induce any person to bid at such sale on his behalf or for the
auctioneer, to employ or induce any person to bid at such sale on behalf of the
seller or knowingly to take any bid from the seller or any person employed by
him. Any sale contravening this rule may be treated as fraudulent by the
buyer. (Art. 1476 Civil Code of the Philippines)


9.8 Q: The deterioration or benefit/improvement of the object of the sale?
A: In case deterioration or improvement of the thing before its delivery, the rules in
article 1189 shall be observed, the vendor being considered the debtor. (Art.
1538 Civil Code of the Philippines)
(3) When the thing deteriorates without the fault of the debtor, the impairment
is to be borne by the creditor;
(4) If it deteriorates through the fault of the debtor, the creditor may choose
between the rescission of the obligation and its fulfillment, with indemnity for
damages in either case;
(5) If the thing is improved by its nature, or by time, the improvement shall inure
to the benefit of the creditor;
(6) If it is improved at the expense of the debtor, he shall have no other right
than that granted to the usufructuary.
9.9 Q: The consideration being payable on installment?
A: In a contract of sale of personal property the price of which is payable in
installments, the vendor may exercise any of the following remedies:
(1) Exact fulfillment of the obligation, should the vendee fail to pay;
(2) cancel the sale, should the vendee's failure to pay cover two or more
installments;
(3) Foreclose the chattel mortgage on the thing sold, if one has been constituted,
should the vendee's failure to pay cover two or more installments. In this case,
he shall have no further action against the purchaser to recover any unpaid
balance of the price. Any agreement to the contrary shall be void (Article 1484
Civil Code of the Philippines)
Unless otherwise agreed, the buyer of goods is not bound to accept delivery
thereof by installments.
Where there is a contract of sale of goods to be delivered by stated
installments, which are to be separately paid for, and the seller makes
defective deliveries in respect of one or more installments, or the buyer
neglects or refuses without just cause to take delivery of or pay for one or
more installments, it depends in each case on the terms of the contract
and the circumstances of the case, whether the breach of contract is so
material as to justify the injured party in refusing to proceed further and
suing for damages for breach of the entire contract, or whether the
breach is severable, giving rise to a claim for compensation but not to a
right to treat the whole contract as broken. (Article 1583 Civil Code of the
Philippines)