Case Digest (G.R. No. L-5145)
Facts:
The case involves Francisco Bastida and Juan Ysmael & Co., Inc. as plaintiffs and Dy Buncio & Co., Inc. as the defendant. The events leading to the case began on February 20, 1948, when Bastida and Ysmael entered into a partnership to operate a lard and oil factory named "Washington Lard and Oil Factory." On August 10, 1948, Dy Buncio & Co., Inc., represented by its president Guillerrao Dy Buncio, authorized Bastida to act as a broker to sell its oil and lard factory in Makati, Rizal, for P300,000, with a payment structure of P100,000 upon signing the deed of sale and the remaining P200,000 in 12 monthly installments at an interest rate of 8% per annum. The authorization was set to expire 30 days from the date it was issued. Bastida offered the factory to Ysmael, who expressed interest but found the price too high. Consequently, Dy Buncio agreed to lease the factory to Bastida for two years, allowing him the option to purchase it at a reduced price of P2...
Case Digest (G.R. No. L-5145)
Facts:
- Partnership Agreement: On February 20, 1948, Francisco Bastida (industrial partner) and Juan Ysmael & Co., Inc. (capitalist partner) entered into a partnership to operate the "Washington Lard and Oil Factory."
- Offer to Sell: On August 10, 1948, Dy Buncio & Co., Inc. (Dy Buncio) authorized Bastida to sell its oil and lard factory in Makati, Rizal, for P300,000, with P100,000 payable upon signing and the balance in 12 monthly installments at 8% interest. The authority expired 30 days later.
- Lease with Option to Buy: Bastida conveyed Ysmael's interest in the factory but found the price high. Dy Buncio agreed to lease the factory to Bastida for two years, with an option to buy at P260,000. The rental was fixed at P3,000 per month.
- Operation of the Factory: Bastida and Ysmael took possession of the factory on September 28, 1948, and began operations on October 15, 1948, after repairs. Ysmael paid the rentals and invested over P300,000 in improvements.
- Assignment of Option: On December 2, 1948, Bastida assigned his option to buy the factory to Ysmael. This was communicated to Dy Buncio on August 29, 1950.
- Dispute Over Payment: Dy Buncio objected to the assignment and demanded payment of P4,503.10 for September 1950 rental and other charges. Bastida tendered payment, but Dy Buncio refused, citing additional debts. Dy Buncio rescinded the lease on September 25, 1950.
Issue:
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Ruling:
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Ratio:
- Validity of the Option: The option was validly granted to Bastida, and the surrounding circumstances indicated that it was intended for Ysmael, despite being in Bastida's name.
- Assignment of the Option: The contract did not prohibit Bastida from assigning the option, and the assignment to Ysmael was valid under the law.
- Rescission of the Lease: Dy Buncio's attempt to rescind the lease was unjustified, as Ysmael had complied with the terms and invested significantly in the factory.
- Specific Performance: Ysmael was entitled to specific performance, as it had validly exercised the option within the agreed period and fulfilled its obligations.