Facts:

• The case involves SM Investments Corporation (SMIC) as the petitioner and Estela Marfori Posadas, Maria Elena Posadas, and Aida Macaraig Posadas as the respondents.
• The dispute concerns a proposed joint venture for developing a 27.6-hectare property owned by the respondents, covered by Transfer Certificates of Title Nos. S-37656, 158291, and 158292, located in Posadas Subdivision, Sucat, Muntinlupa City.
• On August 8, 1995, SMIC, represented by President Henry Sy, Jr., sent a written offer proposing a joint venture, including a goodwill payment of P70 million and a profit-sharing scheme of 60% for the respondents and 40% for SMIC.
• The respondents countered on August 18, 1995, proposing an increased goodwill payment of P80 million while accepting other terms in principle, pending further details.
• SMIC accepted the counter-offer on August 24, 1995, stating the goodwill payment would be made upon signing the Joint Venture Agreement.
• On December 6, 1995, the respondents expressed dissatisfaction with SMIC's lack of detailed plans and indicated they had received better offers, demanding an improved proposal.
• On February 27, 1996, SMIC sent a revised offer, increasing the goodwill payment to P140 million, but the respondents did not respond favorably.
• SMIC filed a case for Specific Performance and Damages on April 21, 1997, in the Regional Trial Court of Makati City.
• The Trial Court ruled in favor of SMIC on December 18, 2007, declaring a valid contract and ordering compliance from the respondents.
• The respondents appealed, and the Court of Appeals reversed the ruling on September 13, 2011, prompting SMIC to file a Petition for Review before the Supreme Court.

Issue:

• (Unlock)

Ruling:

• Yes, the Supreme Court ruled that a perfected contract for a joint venture existed between SMIC and the respondents.
• No, the Court held that the lack of agreement on the details of development did not prevent the perfection of the contract.
• No, the Court found that the December 6, 1995, letter did not negate the existence of the joint v...(Unlock)

Ratio:

• The Supreme Court emphasized that a contract is perfected by mere consent, as stated in Article 1315 of the Civil Code, binding the parties to fulfill their obligations.
• The exchange of letters between SMIC and the respondents demonstrated a clear meeting of the minds, fulfilling essential elements of a contract: consent, a certain object, and a lawfu...continue reading