Navarro vs Sugar Producers

8/18/2019 Navarro vs Sugar Producers

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G.R. No. L-12888 April 29, 1961

R. F. NAVARRO, doing business under the ir! n"!e o R.F. NAVARRO # $O%&AN', plaintiff-appellant,vs.()GAR &RO*)$+R( $OO&+RAV+ %AR+NG A((O$AON N$., defendant-appellee.

Marquez, Quirino and Associates for plaintiff-appellant.San Juan, Africa and Benedicto for defendant-appellee.

/ARR+RA, J .0

Plaintiff-appellant R. F. Navarro (doing business under the firm name R.F. Navarro & Company) appealsdiretly to us from the order of the Court of First !nstane of Ri"al (in Civil Case No. #$%%-P) dismissinghis omplaint for la of ause of ation, on the assertion that only 'uestions of la are involved herein.

he material and pertinent allegations of plaintiff*s omplaint are+

. n eptember #/th, #/01, defendant formally offered to plaintiff the sale from #0,222 to2,222 metri tons of molasses, #st-degrees gravity, 123 sugar by invert, at P02.22 per metriton, e4-arehouse an Carlos and 5ais, Negros idental, giving him up to noon of eptember 6th, #/01 ithin hih to aept the offer, ith the admonition that upon its failureto hear from him by then, the defendant shall feel free to negotiate the sale ith other possiblebuyers7

%. n eptember #st, #/01, ansering an in'uiry made by the plaintiff, the defendant advisedthe latter that the ost of pumping the molasses offered by it for sale is P#.2 per metri ton inan Carlos distrit and P%.22 per metri ton in 5ais distrit and that the date of delivery thereof shall start from February on to 8arh, 9pril and 8ay, #/0$, as milling in the distrits indiated(an Carlos and 5ais) starts during the month of :anuary7

6. Promptly at five minutes before noon of eptember 6th, #/01, plaintiff formally aepted theoffer of sale tendered by the defendant by informing the latter in riting that he binds himself topurhase from the preferred 2,222 metri tons of molasses in 'uestion for P02.22 per metriton, and the day after eptember #st, #/01, plaintiff upon the re'uest of defendant, made thefolloing larifiations of his agreement to purhase the said molasses, ; (#) 2,222 metritons of Philippine molasses, #


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=(a) hat upon the signing of the ontrat of purhased and sale7 plaintiff shall pay defendant inash an amount e'uivalent to 023 of the purhase value f the molasses7

=(b) that to over the remaining and unpaid balane of the purhase prie, plaintiff shall openith the Philippine National 5an an irrevoable domesti letter of redit in favor of defendant,hih shall be assignable and divisible7 and

=() that in negotiating the said letter of redit, plaintiff shall allo defendant immediately toithdra from the same the orresponding amount representing 023 of the value of themolasses ithdran from the entral, upon presentation of the re'uisite ertifiate thereof (ertainly a ondition hih, taen ith (a) above, is most one-sided in favor only of the seller)7

/. n tober nd, #/01, plaintiff personally onferred ith the defendant*s manager, 9mado >.>aria, ith a vie of threshing out the diffiulties neessarily evoed by the foregoingonditions belatedly demanded by the defendant, but the latter remained adamant in thedefendant, and the day after (tober %rd, #/01), it peremptorily gave plaintiff up to noon againof tober 1th, #/01, ithin hih to deide upon his aeptane of said additional onditionsith the arning that if he failed to do so, it ould feel free to advise its planters onerned thatthey ould negotiate their molasses ith other parties7

#2. n tober 0th, #/01, plaintiff, in a spirit of ooperation and in his desire to insure thesuess of his purhase of the molasses in 'uestion, reiterated to the defendant his readinessand illingness, ; already imparted to it during their onferene on tober nd ;, to assistdefendant in oring out ertain finaning transations ith the ban hereby it may bepossible to provide in the letter of redit to be opened in favor of the defendant authority to draash advanes up to 023 of the ontrat value of the molasses, under ertain onditions, andalternatively, plaintiff e4pressed his illingness to satisfy defendant*s desire to be paid inadvane an amount e'uivalent to 023 of the purhase value of the molasses, but provided, thattheir original agreement of P02.22 for metri ton ere to be onverted into hat is non as=e'ual standard ondition=, under hih the purhase value ould be only P%.22 per metriton7

##. n the very same day and evidently ithout even any attempt to onsider the matter further,defendant simply and rudely turned don the foregoing friendly gesture of the plaintiff ausedby the additional onditions demanded by the defendant in its letter of eptember


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the period of the option, the offer an no longer be ithdran and, in any event, suhithdraal is ineffetive beause there had already arisen an e4isting bilateral ontrat hihan be enfored.

he ase of outhestern ugar & 8olasses Co. v. 9tlanti >ulf & Paifi Co. (0# .>. %66$) ispratially on all fours ith the ase at bar. !n said ase, on 8arh 6, #/0%, defendant 9tlanti>ulf & Paifi Co. granted an option to plaintiff outhestern ugar & 8olasses Co. to buy its

barge for P%2,222.22 to be e4erised ithin ninety days. n 8ay ##, #/0%, 9tlanti >ulf roteouthestern ugar that it as e4erising its option and that it be notified as soon as the bargeas available. n 8ay #, #/0%, 9tlanti >ulf replied that their understanding as that the=offer of option= is to be ash transation and to be effeted at the time the barge as available.n :une 0, #/0%, 9tlanti >ulf informed outhestern ugar that the damage ation ould notbe turned over to the latter. n :une $, #/0%, outhestern ugar instituted an ation for speifi performane in line ith the aepted option, depositing ith the Court the purhaseprie of %2,222.22. 9tlanti >ulf, relying upon 9rtile #6$/ of the Ne Civil Code, ontendedthat the option as not valid beause it as not supported by any onsideration apart from theprie. outhestern ugar ontended that the option beame binding on 9tlanti >ulf henplaintiff gave notie of its aeptane during the option period iting as its authority 9rtile #%6of the Ne Civil Code hih provides that *hen the offer or has alloed the offeree a ertain

period to aept, the offer may be ithdran at any time before aeptane by ommuniatingsuh ithdraal e4ept =hen the option is founded upon a onsideration, as something paid or promised.= Apholding the ontention of 9tlanti >ulf and holding that the promise to sell as notvalid beause it as not supported by a onsideration distint from the prie, the (upreme)Court stated+

=here is no 'uestion that under 9rtile #6$/ of the Ne Civil Code =an option to sell= or a =promise to buy or to sell=, as used in said artile, to be valid must be =supported by aonsideration distint from the prie=. his is learly inferred from the onte4t of saidartile that a unilateral promise to buy or to sell, even if aepted, is only binding if supported by a onsideration. !n other ords, =an aepted unilateral promise= an onlyhave a binding effet if supported by a onsideration. Dere, it is not disputed that theoption is ithout onsideration. !t an, therefore, be ithdran notithstanding theaeptane made of it by appellee.=

=!t is true that under 9rtile #%6 of the Ne Civil Code, the general rule regarding offer and aeptane is that, hen the offer or gives to the offeree a ertain period to aept,=the offer may be ithdran at any time before aeptane= e4ept hen the option isfounded upon onsideration, but this general provision must be interpreted as modifiedby the provision of 9rtile #6$/ above referred to, hih applies to =a promise to buyand sell= speifially. 9s already stated, this rule re'uires that a premise to sell to bevalid must be supported by a onsideration distint from the prie.=

n the strength of the above ruling laid don in the above ited ase of outhestern ugar &8olasses Co. v. 9tlanti >ulf & Paifi Co., supra, the fats of hih are idential ith thosealleged in the present omplaint, this Court rules that sine the herein defendant*s promise tosell is not supported by any onsideration distint from the prie, said promise si invalid andenforeable. Plaintiff*s omplaint does not, hene state a ause of ation.

Ehile under the allegations of the present omplaint, here in defendant may have assumed alear obligation to sell it molasses to plaintiff at P02.22 per metri ton and, under the omplaint,said defendant may have no Bustifiable reason not to proeed ith the sale, yet, this Courtannot do otherise that delare the option not binding and unenforeable in vie of the lear provisions of the la on the matter. hus, said the upreme Court in the above-mentioned aseof outhestern ugar v. 9tlanti >ulf+

=Ehile under the =offer of option= in 'uestion, appellant has assumed a lear obligationto sell its barge to appellee and the option has been e4erised in aordane ith itsterms, and there appears to be no valid or Bustifiable reason for the appellant toithdra its offer, this Court annot adopt a different attitude beause the la on thematter is lear. ur imperative duty is to apply it unless modified by Congress.=

EDRFR, the Court sustains, as it hereby sustain the defendant*s motion to dismiss andhereby delares plaintiff*s omplaint dismissed, ithout osts.

R?R?.

Dis motion for reonsideration having been denied, plain plaintiff interposed this appeal.

!t is the ontention of plaintiff-appellant that =the loer ourt erred in harateri"ing the transation hadbeteen plaintiff and the defendant as an aepted unilateral promise to buy or to sell, and in deidingthat as there as no onsideration therefor, 9rtile #6$/, paragraph of the Civil Code, and the ruling in


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outhestern ugar & 8olasses Co. v. 9tlanti >ulf & Paifi Co., 0# ff. >a". %66$, are appliablethereto.=

!n support of his laim, appellant sees in his brief to differentiate his ase from that of outhesternugar & 8olasses Company v. 9tlanti >ulf & Paifi Company relied upon by the trial ourt by arguingthat hat as involved in the 9tlanti >ulf ase as a mere option, hile here the transation is abilateral promise to sell and buy hih re'uires no onsideration distint from the selling prie.

his ontention is not borne out by the fats alleged in the omplaint. !n the first plae, as noted by thetrial ourt in its order denying plaintiff*s motion for reonsideration, plaintiff himself, in paragraph 1 of hisomplaint, referred to the transation as an "option" which he exercised on Septemer !, #$%& . henagain, in his memorandum in lieu of oral argument, he e4pressly agreed that the offer made ' defendant and descried in para(raph ! of plaintiff)s complaint is, *n option, a unilateral promise to sell .(ee page 6 of the memorandum.) 9nd, undoubtedly, this is the offer, the option, the unilateral promiseto sell that as aepted by plaintiff five minutes before the deadline ; noon of eptember 6, #/01.(ee first part of paragraph 6 of the omplaint.) his aeptane, ithout onsideration, did not reatean enforeable obligation on the part of the defendant. he offer as ell as the aeptane, did notontemplate nor produe an immediately binding and enforeable ontrat of sale. 5oth la a mostessential element ; the manner of payment of the purhase prie. !n fat, it as only after the e4erise

of the option or aeptane of the unilateral promise to sell that the terms of payment ere firstdisussed. his as in onnetion ith the larifiation of plaintiff*s aeptane hih as transmitted todefendant on eptember 0, #/01. (ee last part of paragraph 1 of the omplaint.) Plaintiff*s offer of adomesti letter of redit as not aepted by defendant ho insisted on a ash payment of 023 of thepurhase value, upon signing of a ontrat. (ee paragraphs < and / of the omplaint.) Plaintiff, on theother hand, agreed to aede to this provided the prie is redued from P02.22 per metri ton to$#%.22 ?efendant reBeted defendant*s alternative ounter-offer. !n the irumstane, there as noomplete meeting of the minds of the parties neessary for the perfetion of a ontrat of sale.Conse'uently, appellee as Bustified in ithdraing its offer to sell the molasses in 'uestion.(ee ayovs. erra, 66 Phil. %17 8ontinola v. Gitorias 8illing Co., et al., 06 Phil. $

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Navarro vs Sugar Producers