ACE FOODS, INC., Petitioner, vs. MICRO PACIFIC TECHNOLOGIES CO.

,
LTD.1, Respondent, G.R. No. 200602, December 11, 2013

PONENTE: Perlas-Bernabe, J.
TOPIC: Contract of Sale

FACTS: ACE Foods is a domestic company involved in the wholesale and retail
trade and distribution of consumer products, while MTCL is involved in the supply
of hardware and equipment for computers. MTCL sent a letter-proposal for the
supply and sale of the subject items to be installed at the various offices of ACE
Foods.

ACE Foods accepted the proposal by MTCL and accordingly issued Purchase
Order. MTCL subsequently delivered the said items to ACE Foods, as reflected
in the Invoice Receipt. The fine print of the invoice states that 'MICROPACIFIC
TECHNOLOGIES CO., LTD. retains the right to sell the property until complete
compliance with the above conditions and payment of the price' (stipulation of the
title reservation). The subject items were then assembled and configured at ACE
Foods' premises after delivery.

Instead of paying the purchase price, ACE Foods sent a letter to MTCL stating
that it was returning the subject products to MTCL through its sales
representative, Mr. Mark Anteola, who agreed to withdraw the said products but
had not yet done so. ACE Foods lodged a complaint against MTCL before the
RTC demanding that the latter to remove the subject products from its premises
as MTCL violated its "after delivery services" obligations to it. ACE Foods also
claimed that the MTCL products delivered were defective and not working which
MTCL counterclaimed that it has duly complied with its obligations and that the
products are delivered in good condition. MTCL, however, reported that there
was actually no agreement on the supposed "after delivery services."

The RTC released a judgment ordering MTCL to remove the subject products
from the premises of ACE Foods and to pay actual damages and attorneys '
fees. However, the CA reversed and set aside the RTC’s ruling, ordering ACE
Foods to pay MTCL the amount of purchase price, legal interest and attorney’s
fees.

ISSUE: Whether or not ACE Foods should pay MTCL the purchase price for the
subject products.

HELD: YES. In this case, the Court concurs with the CA that the parties have
agreed to a contract of sale and not to a contract to sell as adjudged by the RTC.
In view of its consensual nature, the contract of sale was finalized at the precise
moment when ACE Foods, as evidenced by its act of sending the Purchase
Order to MTCL, approved the latter's proposal to sell the subject matter, taking
into account the purchase price of 646,464.00. From that point in time, the
reciprocal obligations of the parties already arose and consequently may be
demanded. Article 1475 of the Civil Code makes this clear:

Art. 1475. The contract of sale is perfected at the moment there is a meeting of
minds upon the thing which is the object of the contract and upon the price.

From that moment, the parties may reciprocally demand performance, subject to
the provisions of the law governing the form of contracts.

Thus, in the absence of any reasonable indication that the conditions on the
reservation of title were actually decided, the Court must regard the same as a
mere unilateral imposition on the part of MTCL which has no bearing on the
essence of the original agreement of the parties as a contract of sale. Perforce,
the responsibilities resulting from, inter alia, the duty of ACE Foods to pay the
purchase price as well as to recognize the delivery of the products remains
enforceable and subsisting. Wherefore, the petition is DENIED.