G.R. Nos. 153745-46, 14 October 2015, 772 SCRA 244


Sometime in 1982, San Juan Macias Memorial Park, Inc. (SJMMPI), through its President Lourdes S. Pascual, authorized Atty. Soledad de Jesus to look for a buyer for the San Juan Memorial Park (Memorial Park) for P1,500,000.00. Thereafter, Lourdes Pascual, Leonila F. Acasio, and the other officers of SJMMPI (Pascual et al.) were introduced to Nemencio Pulumbarit (Pulumbarit). The parties eventually came to an agreement, with Pulumbarit issuing eighteen (18) checks in the name of SJMMPI Secretary-Treasurer Leonila Acasio. Pulumbarit and/or his lawyer took charge of reducing the agreement into writing and securing the signatures of all concerned parties.

On June 13, 1983, Pascual et al. sent a letter to Pulumbarit requesting for a copy of their written agreement. In another letter of even date, they also asked Pulumbarit to reissue new checks to replace the ones he previously issued. Failing to get a favorable response, Pascual et al. filed a Complaint for Rescission of Contract, Damages and Accounting with Prayer for Preliminary Injunction or Receivership against Pulumbarit. On February 3, 1984, Pulumbarit filed a Motion praying for the dismissal of the Complaint for lack of cause of action, attaching a copy of the Memorandum of Agreement (MOA).

Pascual et al. amended their Complaint on June 5, 1984. Therein, they alleged that Pulumbarit falsified their agreement, as the MOA provided did not reflect the terms and conditions agreed upon by the parties. They disputed the statement in the MOA that the agreement was a sale of all the paid-up stocks of SJMMPI and not a management agreement with option to buy. Pascual et al. argued that the falsified MOA was a nullity and therefore without force and effect. In a motion filed on July 5, 1984, and pending resolution of Pulumbarit’s Motion to Dismiss, Pascual et al. sought to have Pulumbarit declared in default. The trial court granted this motion and allowed Paseual et al. to present their evidence ex parte. On September 5, 1984, the trial court rendered a default judgment in favor of Paseual et al. This judgment of default was reversed by the CA on January 15, 1989 and the case was remanded to the trial court for reception of Pulumbarit’s evidence.

Prior to the reversal of the trial court’s default judgment, however, Pascual et al. applied for the appointment of a receiver to take possession of the Memorial Park and all its records and business transactions during the pendency of the case. This application was denied by the trial court in an Order dated October 10, 1991. Pulumbarit filed a Notice of Appeal dated August 19, 2000. His appeal was docketed as CA-G.R. CV No. 69931. Meanwhile, and before the transniittal of the records of Civil Case No. 7250-M to the CA, Pascual et al. filed with the trial court motions praying for (1) the issuance of a writ of injunction against Pulumbarit and (2) the execution of the decision pending appeal. The trial court granted these motions on September 13, 2000 pursuant to Section 4, Rule 39 of the Rules of Court. Pulumbarit’s subsequent motion for reconsideration of this Order (directing discretionary execution) was denied on October 3, 2000.


Whether the agreement between the parties was one for sale or management of the memorial park?


“In a contract of sale, (he title to the property passes to the vendee upon the delivery of the thing sold; in a contract to sell, ownership is, by agreement, reserved in the vendor and is not to pass to the vendee until full payment of the purchase price. Otherwise stated, in a contract of sale, the vendor loses ownership over (he property and cannot recover it until and unless the contract is resolved or rescinded; whereas, in a contract to sell, title is retained by the vendor until full payment of the price. In the latter contract, payment of the price is a positive suspensive condition, failure of which is not a breach but an event that prevents the obligation of the vendor to convey title from becoming effective.” Spouses Torrecampo v. Alindogan, Sr., G.R. No. 156405, February 28, 2007, 517 SCRA 84, 88, citing Salazar v. Court of Appeals, G.R. No. 118203, July 5. 1996, 258 SCRA 317.

That Pascual et al. really intended to sell SJMPPI is shown by the document earlier issued to Atty. De Jesus authorizing her to look for a buyer tor the Memorial Park and negotiate the sale of the corporation.88 It is immaterial that the authorization given to Atty. De Jesus had already expired by the time the MOA between the parties was signed as this does not diminish the intention of Pascual et al. to sell the Memorial Park at or about the time they entered into the agreement with Pulumbarit. That there are as yet no SJMMPI stock certificates in Pulumbarit’s name and possession, does not negate the character of the contract to sell between the parties.

Pascual et al. claim that Pulumbarit, in his reply to their letters of June 13, 1983,89 July 14, 198390 and August 18, 1983, impliedly admitted that the true agreement between the parties was for the management of the memorial park. This is belied by the records. The letter reads:

“Your letter dated 18 August 1983 on behalf of San Juan Macias Memorial Park, Inc., to our client Nemencio Pulumbarit, Sr. has been referred to us for appropriate reply.

In connection therewith, please be advised that our client is ready and willing to comply with your request as embodied in your letter. However, a certain Ms. Lourdes S. Pascual, a major stock holder (sic) of San Juan Macias Memorial Park, Inc. had complained to us that she has not as yet receive (sic) a single centavo as her share from this transaction and threatened us that she will not sign the memorandum of agreement executed by your client in favor of our client, till she has been paid. In view of this development, our client decided to suspend paying your client until the claim of Ms. Pascual has been settled. We wish to assure you that our client has the money to pay your client anytime the claim of Ms. Pascual has been settled. We suggest, therefore, (hat you urged (sic) your client to thresh out this claim of Ms. Pascual as soon as possible in order that we could immediately comply with your request.”

Contrary to Pascual et al. ‘s claim, there is nothing in the letter to show an admission, whether express or implied, on Pulumbarit’s part that their agreement was for management of SJMMPI.

Most telling of the real agreement between Pulumbarit and Pascual et al. was the undisputed fact that the former made payments to the latter, and not vice versa. As the CA correctly declared, it was indeed absurd for a person rendering service to pay compensation to his employers. If Pascual et al.’s version of the agreement is to be believed, they should have been the ones paying Pulumbarit for managing the Memorial Park and not the other way around.

During the trial, Acasio testified that as “compensation” for his services, Pulumbarit (who had by then already paid between P500,000.00 to P700,000.00 to manage a Park previously put up for sale for P1,500,000.00) will be paid for expenses incurred in the course of management and given an option to buy the Park after two years. These terms simply do not occur in the ordinary course of business and we are hard-pressed to imagine a reasonable person agreeing to such a business arrangement. The evidence on record overwhelmingly shows that the contract between the parties was indeed a contract to sell the shares of SJMMPI and the Memorial Park.

*Case digest by Earl M. Acoymo, JD-IV, Andres Bonifacio Law School, SY 2019-2020