PUP vs CA

Elements of Sale And so, pursuant thereto, NDC had no choice but to transfer
the property to Polytechnic University of the Philippines,
another GOCC, and in need of expansion.  
Petitioner NDC (National Development Corp.)  a GOCC owned
& had in its disposal a 10-hectare property which is the NDC
Compound.   Firestone therefore instituted an action for specific
performance to compel NDC to sell the leased property in its
favor. RTC ruled to order the sale in favor of
A portion of which was leased to private FIRESTONE. Court of Appeals affirmed the decision of the
respondent FIRESTONE CORPORATION for ceramic trial court ordering the sale of the property in favor of
manufacturing business. Both parties entered into a contract of FIRESTONE but deleted the award of attorney's fees in the
lease for a term of 10 years renewable for another 10 years. amount of Three Hundred Thousand Pesos (P300,000.00).
Firestone built several warehouses and facilities therein.  The Court of Appeals observed that as there was a sale of the
subject property, NDC could not excuse itself from its
obligation TO OFFER THE PROPERTY FOR SALE FIRST TO
Prior to the expiration of the said lease contract, Firestone FIRESTONE BEFORE IT COULD TO OTHER PARTIES.
wrote NDC requesting for an extension of their lease
agreement. Since business between NDC and FIRESTONE
went smooth, the lease was twice renewed, this time PUP moved for reconsideration asserting that in ordering the
conferring upon Firestone an express grant the first option to sale of the property in favor of FIRESTONE the courts a
purchase the leased premise in the event that NDC decided to quo unfairly created a contract to sell between the parties. It
dispose and sell the properties including the lot. Firestone now argued that the "court cannot substitute or decree its mind or
has the right of first refusal.  consent for that of the parties in determining whether or not a
contract (has been) perfected between PUP and
NDC."22 PUP further contended that since "a real property
Eventually though, a Memorandum Order No. 214 was issued located in Sta. Mesa can readily command a sum
by then President Corazon Aquino ordering the transfer of the of P10,000.00 per square (meter)," the lower court gravely
whole NDC compound to the National Government.  The order erred in ordering the sale of the property at only P1,500.00 per
of conveyance would automatically result in the cancellation of square meter. PUP also advanced the theory that the
NDC's total obligation in favor of the National Government. enactment of Memorandum Order No. 214 amounted to a
The memorandum order was in consideration of NDC’s P57M withdrawal of the option to purchase the property granted to
debt.  FIRESTONE. NDC, for its part, vigorously contended that the
contracts of lease executed between the parties had expired
without being renewed by FIRESTONE; consequently,
FIRESTONE was no longer entitled to any preferential right in
the sale or disposition of the leased property.
ISSUE:
Whether or not there is a valid sale between NDC and PUP.  existence of a valid and enforceable contract of sale that it be
RULING:
Yes.
All three (3) essential elements of a valid sale, without which
there can be no sale, were attendant in the "disposition" and
"transfer" of the property from NDC to PUP - consent of the
parties, determinate subject matter, and consideration
therefor.
1. consent is manifested by the Memo Order No. 214, 
2. the subject matter was the property subject of the dispute.
3. the cancellation of liabilities constituted consideration
But the argument of PUP and NDC was untenable.  GOCCs
have personalities separate and distinct from the government.
“Sale” brings within its grasp the whole gamut of transfers
where ownership of a thing is ceded for consideration.  
A contract of sale, as defined in the Civil Code, is a contract
where one of the parties obligates himself to transfer the
ownership of and to deliver a determinate thing to the other or
others who shall pay therefore a sum certain in money or its
equivalent.32 It is therefore a general requisite for the
mutually obligatory, i.e., there should be a concurrence of the
promise of the vendor to sell a determinate thing and the
promise of the vendee to receive and pay for the property so
delivered and transferred. The Civil Code provision is, in
effect, a "catch-all" provision which effectively brings within its
grasp a whole gamut of transfers whereby ownership of a
thing is ceded for a consideration.
Contrary to what petitioners PUP and NDC propose, there is
not just one party involved in the questioned transaction.
Petitioners NDC and PUP have their respective charters and
therefore each possesses a separate and distinct individual
personality.33 The inherent weakness of NDC's proposition
that there was no sale as it was only the government which
was involved in the transaction thus reveals itself. Tersely put,
it is not necessary to write an extended dissertation on
government owned and controlled corporations and their legal
personalities. Beyond cavil, a government owned and
controlled corporation has a personality of its own, distinct and
separate from that of the government.
Since a sale was involved, the right of first refusal in favor of
Firestone must be respected. It forms an integral part of the
lease and is supported by consideration—Firestone having
made substantial investments therein. 
Only when Firestone fails to exercise such right may the sale
to PUP proceed.
So here we see that GOCCs even though ‘government owned
& controlled’ has a personality of its own distinct and separate
from that of the government.  Lapu-Lapu City, Cebu, owned by respondents. The purpose of
And the intervention in a transaction of the Office of the
President thru the Executive Secretary DOES NOT CHANGE
THE INDEPENDENT EXISTENCE of a government entity as it
deals with another government entity.  annum from the time petitioner took possession. During the
Republic vs Peza
Petitioner Republic of the Philippines is represented in this
case by the Philippine Economic Zone Authority (PEZA), a
government corporation created under RA 7916, as amended.
On April 14, 1991, the Export Processing Zone Authority,
(PEZA), predecessor of PEZA, filed a complaint for the
expropriation of seven parcels of land located at Barrio Ibo,
the expropriation was to establish and develop an export
processing zone or a part thereof on those real properties.
After trial on the merits, the RTC rendered a decision ordering
the expropriation of the seven parcels of land and payment of
just compensation of P1,500 per sq. m. with 12% interest per
pendency of petitioner’s appeal for the correctness of
valuation, both parties reached an amicable settlement and
agreed for the payment as fixed by RTC; as well as
presentation by respondents of clean titles of all the subject
properties before payment by petitioner.
Accordingly, the parties executed a deed of absolute sale
dated June 25, 2001 which set out the terms and conditions of
their settlement, the transfer of ownership from respondents to
petitioner and the execution by the parties of the
corresponding deed of absolute sale for the remaining six lots
as soon as respondents could settle or clear the
encumbrances or other problems affecting them. Petitioner
prepared a joint motion to dismiss the expropriation case but
respondent Antonio Florendo refused to sign because there
were still three lots which had not yet been paid. Respondents
could not clear these properties of their encumbrances and
liens as there were pending cases filed by third party claimants
over them. Instead, they proposed that a partial compromise
agreement be executed to cover the four lots that had already
been sold and transferred to PEZA. Petitioner, however, found
the proposal unacceptable and contrary to their compromise
agreement.
On May 19, 2003, petitioner filed a motion to quash the writ of
execution and an urgent ex-parte motion to lift the
garnishment. CA dismissed the motion for lack of merit.
Petitioner argues that the parties' compromise agreement
became res judicata and was implemented upon the payment
of the four lots. Accordingly, respondents are estopped from
repudiating this agreement by insisting on the execution of the
June 25, 2002 CA decision.26
Respondents counter that there was no perfected compromise
agreement over the three remaining lots as they were not
taken out of the judgment of the appealed case in the CA
which became final. Execution of this final judgment would
therefore be proper and just compensation for these remaining
lots should be paid.
Issue:
Is there a sale between the parties?
Ruling:
We grant the petition.
The pertinent terms and conditions of the parties' compromise
agreement were expressed in the "whereas" clauses of the
June 25, 2001 deed of sale they executed:
WHEREAS, on 21 December 1993, the [RTC] rendered its
decision fixing the just compensation of the 7 lots at Php1,500
per sq.m. or a total sum of Php26,951,250.00 plus twelve
percent (12%) interest per annum from 12 March 1992 until
fully paid; which judgment was appealed by the VENDEE to
the Court of Appeals under CA-G.R. CV No. 54765 which is
still pending with the said court;
WHEREAS, the parties have mutually agreed to settle the said
expropriation case amicably with the VENDEE waiving so
much of the court awarded interest thereby saving the
government much needed funds for other public purposes;
WHEREAS, for this purpose, the Board of Directors of the
VENDEE has issued board Resolution No. 00-416 dated 29
December 2000 approving the purchase of the
aforementioned lots for Php26,951,250.00;
WHEREAS, the parties have agreed to execute a Deed of
Absolute Sale covering initially the lot under TCT No. 21289 (1
of the 7 lots of the vendors, which has only a minor
encumbrance/problem) considering that the remaining 6 lots of
the vendors either have encumbrances or are untitled, with the
understanding that the parties shall execute the corresponding
Deed of Absolute Sale for the remaining 6 lots the moment the
VENDORS shall have settled/cleared the
encumbrances/problems affecting the other 6 lots;
A compromise agreement is a contract whereby the parties
make reciprocal concessions in order to resolve their
differences and thus avoid litigation or to put an end to one
already commenced.28 When it complies with the requisites
and principles of contracts, it becomes a valid agreement
which has the force of law between the parties.29 It has the
effect and authority of res judicata once entered into,30 even
without judicial approval.31

The compromise agreement the parties executed was in the

form of a contract of sale. The elements of a valid contract of
sale are: (a) consent or meeting of the minds; (b) determinate
subject matter and (c) price certain in money or its
equivalent.36 All the elements are present here. The parties
agreed on the sale of a determinate object (the seven lots) and
the price certain (₱26,951,250).

Accordingly, we hold that the compromise agreement reached

by the parties while the appeal was pending in the CA is valid.

Ang Yu Asuncion vs
Ang Yu Asuncion v. Court of Appeals 238 SCRA 602,
December 2, 1994
FACTS:
Petiotioners are tenants or lessees of residential and
commercial spaces owned by Bobby Co Unjieng. On several
occasions, Unjieng informed petitioner that they are offering to
sell the premises and are giving them priority to acquire the
same. During the negotiations, Bobby Cu Unjieng offered a
price of P6-million while petitioner made a counter offer of P5-
million. Petitioners thereafter asked Unjieng to put their offer in
writing to which request Unjieng acceded; that in reply to
Unjieng’s letter, petitioner wrote them asking that they specify
the terms and conditions of the offer to sell; that when
petitioner did not receive any reply, they sent another letter
with the same request; that since Unjieng failed to specify the
terms and conditions of the offer to sell and because of
information received that Unjieng were about to sell the
property, Petitioner were compelled to file the complaint to
compel Unjieng to sell the property to them.
The court found that offer to sell was never accepted by the
petitioner for the reason that the parties did not agree upon the
terms and conditions of the proposed sale, hence, there was
no contract of sale at all. Nonetheless, the court ruled that
should the property is subsequently offered for sale,
petitioners will have the right of first refusal.
The Cu Unjieng spouses executed a Deed of Sale transferring
the property in question to herein private respondent, Buen
Realty. As the new owner, they wrote a letter to the lessees
demanding that the latter vacate the premises. Lessees wrote
a reply stating that private respondent brought the property
subject to the notice of lis pendens.
ISSUE:
WON Buen Realty can be held bound by the writ of execution
by virtue of the notice of lis pendens.
HELD:
No.
In the law on sales, the so-called "right of first refusal" is an
innovative juridical relation. It cannot be deemed a perfected
contract of sale. In a right of first refusal, while the object might
be made determinate, the exercise of the right, however,
would be dependent not only on the grantor's eventual
intention to enter into a binding juridical relation with another
but also on terms, including the price, that obviously are yet to
be later firmed up.
In sales, particularly, to which the topic for discussion about
the case at bench belongs, the contract is perfected when a
person, called the seller, obligates himself, for a price certain,
to deliver and to transfer ownership of a thing or right to
another, called the buyer, over which the latter agrees.
If petitioners are aggrieved by the failure to honor the right of
first refusal, the remedy is not a writ of execution on the
judgment, since there is none to execute, but an action for
damages in a proper forum for the purpose.