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Case 15


In 1976, Philippine Remnants Co., Inc. constituted the Bank of the Philippine
Islands (BPI) as its trustee to manage, administer, and sell its real estate
property, one of which was the disputed lot in Pasig. In 1988, Pedro Revilla,
Jr., a licensed real estate broker, was given formal authority by BPI to sell the
lot for P1,000/sqm. Broker Revilla contacted Alfonso Lim of Limketkai Sons
Milling (LSM) who agreed to buy the land. LSM asked that the price of
P1,000/sqm. be reduced to P900.00 while Albano of BPI stated the price is to
be P1,100.00. The parties finally agreed that the lot would be sold at
P1,000/sqm. to be paid in cash. Later on he asked if he can pay in terms.
The bank officials agreed to but with the understanding, however, that
should the term payment be disapproved, then the price shall be paid in
cash. It was Albano who dictated the terms under which the installment
payment may be approved, and acting thereon, Alfonso Lim wrote BPI
through Merlin Albano embodying the payment initially of 10% and the
remaining 90% within a period of 90 days. 2 or 3 days later, LSM learned that
its offer to pay on terms had been frozen. Alfonso Lim went to BPI 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of property in Pasig had been withdrawn from his unit.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. LSM filed an action for specific performance with damages against
BPI. In the course of the trial, BPI informed the trial court that it had sold the
property under litigation to National Book Store (NBS) in 1989. The complaint
was thus amended to include NBS. RTC ruled in favor of LSM, holding that
there was a perfected contract of sale between LSM and BPI. CA reversed,
holding that no contract of sale was perfected because there was no
concurrence of the three requisites enumerated in Article 1318 of the Civil

ISSUE: W/N there was a valid contract of sale

HELD: YES. There was a meeting of the minds between the buyer and the
bank in respect to the price of P1,000/sqm. The requirements in the payment
of the purchase price on terms instead of cash were suggested by BPI Vice-

President Albano. Since the authority given to broker Revilla specified cash
payment, the possibility of paying on terms was referred to the Trust
Committee but with the mutual agreement that if the proposed payment on
terms will not be approved by our Trust Committee, Limketkai should pay in
cash, the amount was no longer subject to the approval or disapproval of the
Committee, it is only on the terms. The record shows that if payment was in
cash, either broker Revilla or Aromin had full authority. But because LSM took
advantage of the suggestion of Vice-President Albano, the matter was sent to
higher officials. Immediately upon learning that payment on terms was frozen
and/or denied, Limketkai exercised his right within the period given to him
and tendered payment in full, thus complying with their agreement. The
negotiation or preparation stage started with the authority given by Philippine
Remnants to BPI to sell the lot, followed by the authority given by BPI and
confirmed by Philippine Remnants to broker Revilla to sell the property, the
offer to sell to Limketkai, the inspection of the property and the negotiations
with Aromin and Albano at the BPI offices. 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 LSM, agreed to buy the disputed lot at
P1,000/sqm. Aside from this there was the earlier agreement between LSM
and the authorized broker.