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PUP v.

CA & Firestone Definition of Sale


NDC v. Firestone

Who:
1. NDC government owned controlled corporation
2. Firestone brick factory?
3. PUP government university; Poor Mans University

What:
1. NDC Compound a 10-hectare property on its disposal
2. 2.9 hectares leased to Firestone for 10 years with 10-year renewal (May 1965)
3. 2.60 hectares leased to Firestone concerning a 4-unit pre-fabricated warehouse (Jan 1964)
4. ^similar lease concerning 6-unit pre-fabricated warehouse

FACTS:
1. Firestone is currently the lessee in a contract of lease with NDC;
2. Firestone requests an extension for the contract of lease
3. NDC agreed, with several conditions, one which is the right of first refusal in case the latter
decides to sell the property;
4. There were rumors that the subject property (NDC Compound) will be sold to PUP;
5. Firestone filed an action for specific performance to compel NDC to sell the property to
them;
6. Firestone presented the court a letter (proposed Memorandum) as evidence; that the NDC
is directed to sell the property to PUP for at least P57m;
7. PUP intervened as purchaser pendent lite;

Trial Court
1. Ruled in favor of Firestone;
2. The contract of lease between Firestone and NDC is valid and existing until June 1999.

Court of Appeals
1. PUP and NDC submitted their respective appeals; Executive Secretary Macaraeg withdrew his;
2. Ruled in favor of Firestone;
3. Firestone was given a 60-day grace period within which to exercise the right of first refusal or to
purchase the property;
4. That the NDC could not excuse itself from the obligation to offer the property first to firestone
before it could to other parties.

Supreme Court
1. Right of First Refusal it is elementary that a party to a contract cannot unilaterally withdraw a
right of first refusal that stands upon consideration.
2. it is an integral part of the contract of lease and is inseparable from the whole contract;

/YDR
3. Contract of Sale defined is a contract where one of the parties obligates himself to transfer the
ownership of and to deliver a determinate thing to the other or others who shall pay therefore a
sum certain in money or its equivalent;
4. General requirement of a valid and enforceable contract of sale (for this case) is the promise to
sell;
5. Essential Elements of a Contract of Sale: Consent, Subject Matter, Price/Consideration (all are
present in the case, therefore there is a valid contract;
6. Petitions were denied;
7. Firestone was given a 60-day grace period to exercise its right of first refusal;
8. PUP was ordered to reconvey the prop to Firestone.

/YDR