Case Name Johannes Schuback & Sons Philippine Trading v.

Court of Appeals
G.R. No. 105387 (November 11, 1993)

Ponente: ROMERO, J.

Topic Subject Matter of Sale: When Quantity of Subject Matter Not Essential for Perfection

Recit-ready
summary SJ Industrial, through Ramon San Jose, approached Schuback & Sons Phil. Trading (SSPT) to purchase bus
spare parts. He submitted the list of parts he wanted and SSPT coordinated with its Germany Office to quote
the prices, and forwarded its formal offer to SJ Industrial, containing the prices, item numbers, descriptions,
etc.

SJ informed SSPT of his desire to purchase such items and promised to submit the quantity per unit. SJ then
submitted such quantities needed to SSPT’s GM, Mr. Reichert. San Jose indicated the same in the Purchase
Order with the inscription “this will serve as our initial purchase order. PO will include 3% discount.”

SSPT immediately ordered the products from Germany to avail of the old prices— partial deliveries of which
were made. Then, for his failure to secure letters of credit, SJ failed to purchase the same and alleged that
there was no perfected contract of sale. Thus, SSPT sought damages..

Doctrine
Article 1475. The contract of sale is perfected at the moment there is a meeting of minds upon the thing
which is the object of the contract and upon the price.

From that moment, the parties may reciprocally demand performance, subject to the provisions of the law
governing the form of contracts. (1450a)

“Quantity is immaterial in the perfection of a contract of sale. What is important is the meeting of the minds
as to the object and cause of the sale.”

FACTS
● Sometime in 1981, Ramon San Jose, Jr. (San Jose) contacted Johannes Schuback & Sons Philippine Trading (Johannes
Philippines) and communicated his intention to purchase MAN bus spare parts from Germany.
● Johannes Philippines communicated with its trading partner, Schuback Hamburg, regarding the spare parts that San Jose
wanted to order.
● San Jose submitted to Johannes Philippines a list of the parts he wanted to purchase ith specific part numbers and
description.
● On December 17, 1981, Johannes Philippines submitted its formal offer containing the item number, quantity, part number,
description, unit price and total to San Jose.
● On December, 24, 1981, San Jose informed Johannes Philippines of his desire to avail of the prices of the parts at that time.
He also promised to submit the quantity per unit he wanted to order.
● On December 29, 1981, San Jose personally submitted the quantities he wanted to the General Manager of Johannes
Philippines. In the purchase order that San Jose submitted, he wrote a note stating: “Above P.O. will include a 3% discount.
The above will serve as our initial P.O.”
● Johannes Philippines immediately ordered the items needed by San Jose from Schuback Hamburg to enable San Jose to
avail of the old prices.
 ● However, San Jose subsequently declared that he did not make any valid purchase order and that was no definite contract
between him and Johannes Philippines.

ISSUE

Whether or not a contract of sale has been perfected between Johannes Philippine and San Jose. (Yes)

RULING

Although the quantity to be ordered was made determinate only on 29 December 1981, quantity is immaterial in the
perfection of a sales contract. What is of importance is the meeting of the minds as to the object and cause, which from the
facts disclosed, show that as of 24 December 1981, these essential elements had already concurred. Likewise, the opening
of a letter of credit in favor of a vendor is only a mode of payment.

It is not among the essential requirements of a contract of sale enumerated in Article 1305 and 1474. In the present case,
when San Jose failed to open an irrevocable letter of credit without recourse in favor of Schuback Hamburg, such did not
prevent the perfection of the contract between the parties, for the opening of a letter of credit is not to be deemed a
suspensive condition. Schuback did not reserve title to the goods until San Juan had opened a letter of credit. Schuback did
not incorporate any provision declaring their contract of sale without effect until after the fulfillment of the act of opening a
letter of credit. . SJ Industrial is thus liable for damages.