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CA
Jan 24, 1996 | Panganiban, J. | Unenforceable Contracts-How Ratified (Art. 1405)
PETITIONERS: FIRST PHILIPPINE INTERNATIONAL BANK (Formerly Producers Bank of the Phil.) and
MERCURIO RIVERA
RESPONDENTS: CA, CARLOS EJERCITO, in substitution of DEMETRIO DEMETRIA, and JOSE JANOLO
SUMMARY: Producers Bank (now First Philippine International Bank), which has been under conservatorship since
1984, is the owner of 6 parcels of land. The Bank had an agreement with Demetrio Demetria and Jose Janolo for the
two to purchase the parcels of land for a purchase price of P5.5 million pesos. The said agreement was made by
Demetria and Janolo with the Banks manager, Mercurio Rivera. Later however, the Bank, through its conservator,
Leonida Encarnacion, sought the repudiation of the agreement as it alleged that Rivera was not authorized to enter
into such an agreement, hence there was no valid contract of sale. Subsequently, Demetria and Janolo sued
Producers Bank. During the pendency of the proceedings in the CA, Henry Co and several other stockholders of the
Bank filed an action-purportedly a derivative suit. SC affirmed CA and held that there was a perfected contract of
sale, FPIB committed forum shopping and that the contract is enforceable because, the banks letters, taken
together with plaintiffs letter dated September 30, 1987, constitute in law a sufficient memorandum of a perfected
contract of sale.
DOCTRINE: Contracts infringing the Statute of Frauds, referred to in No. 2 of Article 1403, are ratified by the failure
to object to the presentation of oral evidence to prove the same, or by the acceptance of benefits under them [Art.
1405]
FACTS:
Hence, assuming arguendo that the counteroffer of P4.25 million extinguished the offer of
P5.5 million, Luis Cos reiteration of the said
P5.5 million price during theSeptember 28,
1987 meeting revived the said offer. And by
virtue of the September 30, 1987 letter
accepting this revived offer, there was a
meeting of the minds, as the acceptance in
said letter was absolute and unqualified.