Case Summary (G.R. No. 167004)
Facts of the Case
DBP aimed to consolidate its ownership of Paragon in the year 1980, prompting a meeting where Medrano was instructed to persuade the minority stockholders to sell their shares at Php 65 per share. Medrano communicated with the minority shareholders, successfully arranging for most of their shares to be surrendered to DBP. Medrano himself delivered his shares, valued at Php 2,449,265. DBP accepted the shares and additionally offered Medrano a commission, which was later reduced. Upon DBP’s failure to pay for the shares, Medrano initiated legal action for specific performance and damages against DBP.
Trial Court Ruling
The Regional Trial Court (RTC) ruled in favor of Medrano, affirming his entitlement to the payment for his shares. The RTC determined that despite the conditions imposed by DBP’s resolution, a contract of sale was established, and DBP's failure to comply with the payment obligations was unjustified.
Court of Appeals Decision
The Court of Appeals upheld the RTC's ruling but denied Medrano's claim for the commission, stating he did not formally appeal the trial court’s decision. The CA interpreted that DBP had effectively waived its right not to comply with the conditions by retaining Medrano’s shares, leading to a binding obligation to pay for those shares.
Petitioner’s Allegations of Error
DBP raised several points on appeal, contending that the CA made erroneous conclusions about the existence of a perfected contract of sale and misapplied Article 1545 of the Civil Code, which pertains to the conditions of sale. DBP maintained that since there were unmet conditions, no perfected contract existed, and therefore, it was inappropriate for the lower courts to order payment for the shares instead of returning them.
Respondent’s Position
Medrano countered that DBP's retention of the shares constituted an acceptance of the transaction, thereby converting the conditional sale into an unconditional one. He claimed that the refusal to pay necessitated his pursuit of legal action to enforce his rights.
Legal Analysis
A contract is generally perfected upon the meeting of the minds on its terms and price. In this instance, the CA found that although there were conditions tied to the sale, DBP’s actions in retaining and processing the shares indicated acceptance of the sale — therefore triggering a duty to compensate Medrano. The principle of unjust enrichment was applicable here, as DBP’s acceptance of Medrano's shares without subsequent payment resulted in an inequitable benefit to DBP at Medrano's expense, violating principles of justice and equity as articulated in Article 22 of the Civil Code.
Attorney’s Fees Award
The appellate court affirmed the award of attorney’s fees to Me
...continue readingCase Syllabus (G.R. No. 167004)
Case Background
- This case concerns a petition for review on certiorari by the Development Bank of the Philippines (DBP) against Ben P. Medrano and the Privatization Management Office (PMO).
- The Supreme Court is reviewing the Decision dated December 14, 2004, and the Resolution dated February 8, 2005, of the Court of Appeals (CA) in CA-G.R. CV No. 65436.
- The CA upheld the Regional Trial Court (RTC) of Pasig City’s Decision dated January 26, 1999, which ordered DBP to pay Medrano for his shares in Paragon Paper Industries, Inc.
Factual Background
- Ben Medrano was the President and General Manager of Paragon Paper Industries, Inc., owning 37,681 shares.
- In 1980, DBP aimed to consolidate ownership in Paragon and instructed Medrano to persuade minority stockholders to sell their shares at P65.00 each.
- Medrano complied, contacting all minority shareholders except one and successfully obtaining agreements to sell.
- DBP approved the sale through Resolution No. 4270, with conditions regarding the surrender of shares and written compliance from all parties.
- Medrano delivered his shares to DBP, which accepted them and subsequently took over Paragon.
Legal Proceedings
- After DBP failed to pay for the shares, Medrano filed a complaint for specific performance and damages against DBP on September 2, 1981.
- DBP contended that there was no perfected contract of sale due to unmet conditions from Resol