POLYTECHNIC UNIVERSITY (PUP) vs.
Whether or not there is a valid sale between NDC
CA
G.R. No. 143513
FACTS:
Petitioner National Development Corporation (NDC) is
a GOCC. It has in its disposal a 10-hectae property
(NDC Compound) in Manila.
Respondent Firestone Ceramics, Inc. (FIRESTONE)
leased a portion of said property (2.9 hectares) for its
ceramic manufacturing business (manufacturing
plant).
On August 24, 1965, a CONTRACT OF LEASE was
entered between NDC and FIRESTONE for a term of
10 years, renewable for another 10 years. Thereafter,
FIRESTONE constructed several warehouses and
improvements.
Two contract of lease was subsequently executed
whereby FIRESTONE agreed to ship NDCs 4-unit and
6-unit pre-fabricated reparation steel warehouse to
Manila for eventual assembly with the NDC
compound.
Prior to the expiration of the contract, FIRESTONE
requested for an extension of their lease agreement.
It was renewed, thru a BOARD RESOLUTION, with an
express grant to Firestone of the first option to
purchase the leased premise in the event that NDC
would decide "to dispose and sell the properties
including the lot.
Cgnizant of the impending expiration of the leased
agreement, Firestone informed NDC that it was
renewing its lease. No answer was given except that
made by Antonio Henson (General Manager of NDC).
Firestone's predicament worsened when it learned of
NDC's supposed plans to dispose the subject
property in favor of petitioner Polytechnic University
of the Philippines.
Pursuant to its contractual right of first refusal,
FIRESTONE instituted an ACTION FOR SPECIFIC
PERFOMANCE to compel NDC to sell the leased
property in its favor. It averred that NDC violated
FIRESTONEs leasehold rights over the leased
property and the warehouses constructed thereon.
PUP intervened in the proceedings invoking the
Memorandum Order No. 214 issued by then President
Aquino ordering the transfer of the whole NDC
compound to the National Government, which in turn
would convey the property to PUP in recognition of
PUPs status as POOR MANS UNIVERSITY.T
PUPs contention: There was no sale of the NDC
compound. Hence, FIRESTONE cannot exercise its
right of refusal.
NDCs contention: NDC and PUOP are both
government entities. Hence, the transaction cannot
be legally called a sale.
ISSUE:
and PUP.
RULING:
YES. The intention of NDC and PUP to enter into a
contract of sale was clearly expressed in the
Memorandum Order No. 214. The circumstances of
this case likewise strengthens the theory that the
conveyance of the property from NDC to PUP was
one of absolute sale, for a valuable consideration,
and not a mere paper transfer as argued by
petitioners.
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.
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. NDC's proposition that there was no
sale as it was only the government which was
involved in the transaction is without merit. A
government owned and controlled corporation
has a personality of its own, distinct and
separate from that of the government. The
intervention in the transaction of the Office of the
President through the Executive Secretary did not
change the independent existence of these entities.
The involvement of the Office of the President was
limited to brokering the consequent relationship
between NDC and PUP.
INTERVENTION OF THE EXECUTIVE SECRETARY:
Antonio Henson sent a letter to Mr. Jake C. Lagonera,
Director and Special Assistant to Executive Secretary
Catalino Macaraeg, reviewing a proposed
memorandum order submitted to then President
Corazon C. Aquino transferring the whole NDC
compound, including the leased property, in favor of
petitioner PUP.