Case Digest (G.R. No. 128120)
Facts:
This is Swedish Match, AB et al. v. Court of Appeals, ALS Management & Development Corporation and Antonio K. Litonjua, G.R. No. 128120, October 20, 2004, Supreme Court Second Division, Tinga, J., writing for the Court. Petitioners are Swedish Match, AB (SMAB) and several individuals; respondents are the Court of Appeals, ALS Management & Development Corporation and Antonio K. Litonjua (ALS/Litonjua), the would‑be buyers.SMAB (a Swedish corporation) owned shares in the Philippine company Phimco Industries, Inc. In 1989–1990 SMAB’s then parent and successor entities sought to divest worldwide match and lighter operations. SMNV (the prospective seller) authorized Ed Enriquez to negotiate a sale of Phimco shares, with strict instructions that any sale of Phimco shares should be executed on or before 30 June 1990. Litonjua, representing ALS, submitted several offers: a firm P750,000,000 offer (3 Nov 1989), later revised offers including US$30.6 million (21 May 1990) and an asserted US$36 million figure. SMAB’s Chief Executive Massimo Rossi replied (1 Dec 1989; 11 June 1990) inviting ALS to conduct a due diligence/acquisition audit and to submit a final dollar offer by 30 June 1990; SMAB also offered to reimburse up to US$20,000 of audit costs if a global deal materialized.
ALS repeatedly indicated it could not complete its due diligence by 30 June and asked for more time; SMAB informed ALS it would consider other bidders and on 2 July 1990 signed a conditional contract with a local group, notifying ALS that ALS’s bid would be considered only if that local group failed to close by 15 September 1990. ALS protested and later asserted that its US$36 million offer was, for all intents and purposes, final. SMAB later invited ALS to negotiate on an exclusive basis for 15 days from 26 September 1990, subject to new terms; ALS rejected the new terms as reopening an already perfected bargain.
On December 14, 1990, ALS filed in the Regional Trial Court (RTC) of Pasig a complaint for specific performance with damages and sought a preliminary injunction to prevent transfer of the Phimco shares. ALS alleged a perfected sale (including an oral acceptance relayed by petitioners’ officers), partial performance (engaging auditors for due diligence, submission of a comfort letter from UCPB), and tortious/dilatory conduct by Phimco officers to frustrate the closing. Petitioners moved to dismiss on the ground that the alleged agreement was unenforceable under the Statute of Frauds (Art. 1403[2], Civil Code); the RTC granted a preliminary hearing on that defense and, in an April 17, 1991 Order, dismissed the complaint for lack of a valid cause of action due to noncompliance with the Statute of Frauds and dissolved the preliminary injunction.
ALS appealed to the Court of Appeals, which on November 15, 1996 (and a subsequent January 31, 1997 Order) reversed the RTC, holding that the parties’ series of letters and communications, tak...(Subscriber-Only)
Issues:
- Did the Court of Appeals err in reversing the RTC’s dismissal of the complaint on the ground that the alleged agreement was unenforceable under the Statute of Frauds (Art. 1403[2], Civil Code)?
- Was there a perfected contract of sale between petitioners and respondents for the Phimco shares (meeting of minds on essential terms, including ...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
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Doctrine:
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