POLYTECHNIC UNIVERSITY (PUP) vs. CA 214.

The circumstances of this case likewise strengthens the

theory that the conveyance of the property from NDC to PUP
G.R. No. 143513
was one of absolute sale, for a valuable consideration, and
not a mere paper transfer as argued by petitioners.
FACTS:
A contract of sale, as defined in the Civil Code, is a contract
Petitioner National Development Corporation (NDC) is a
where one of the parties obligates himself to transfer the
GOCC. It has in its disposal a 10-hectae property (NDC
ownership of and to deliver a determinate thing to the other
Compound) in Manila.
or others who shall pay therefore a sum certain in money or
its equivalent.
Respondent Firestone Ceramics, Inc. (FIRESTONE) leased a
portion of said property (2.9 hectares) for its ceramic
Contrary to what petitioners PUP and NDC propose, there is
manufacturing business (manufacturing plant).
not just one party involved in the questioned transaction.
Petitioners NDC and PUP have their respective
On August 24, 1965, a CONTRACT OF LEASE was entered
charters and therefore each possesses a separate and
between NDC and FIRESTONE for a term of 10 years,
distinct individual personality. NDC's proposition that
renewable for another 10 years. Thereafter, FIRESTONE
there was no sale as it was only the government which was
constructed several warehouses and improvements.
involved in the transaction is without merit. A government
owned and controlled corporation has a personality
Two contract of lease was subsequently executed whereby
of its own, distinct and separate from that of the
FIRESTONE agreed to ship NDCs 4-unit and 6-unit pre-
government. The intervention in the transaction of the
fabricated reparation steel warehouse to Manila for eventual
Office of the President through the Executive Secretary did
assembly with the NDC compound.
not change the independent existence of these entities. The
involvement of the Office of the President was limited to
Prior to the expiration of the contract, FIRESTONE requested
brokering the consequent relationship between NDC and
for an extension of their lease agreement. It was renewed,
PUP.
thru a BOARD RESOLUTION, with an express grant to
Firestone of the first option to purchase the leased premise
INTERVENTION OF THE EXECUTIVE SECRETARY:
in the event that NDC would decide "to dispose and sell the
Antonio Henson sent a letter to Mr. Jake C. Lagonera,
properties including the lot.
Director and Special Assistant to Executive Secretary
Catalino Macaraeg, reviewing a proposed memorandum
Cgnizant of the impending expiration of the leased
order submitted to then President Corazon C. Aquino
agreement, Firestone informed NDC that it was renewing its
transferring the whole NDC compound, including the leased
lease. No answer was given except that made by Antonio
property, in favor of petitioner PUP.
Henson (General Manager of NDC). Firestone's predicament
worsened when it learned of NDC's supposed plans to
dispose the subject property in favor of petitioner
Polytechnic University of the Philippines.

Pursuant to its contractual right of first refusal, FIRESTONE

instituted an ACTION FOR SPECIFIC PERFOMANCE to
compel NDC to sell the leased property in its favor. It
averred that NDC violated FIRESTONEs leasehold rights
over the leased property and the warehouses constructed
thereon.

PUP intervened in the proceedings invoking the

Memorandum Order No. 214 issued by then President
Aquino ordering the transfer of the whole NDC compound to
the National Government, which in turn would convey the
property to PUP in recognition of PUPs status as POOR
MANS UNIVERSITY.T

PUPs contention: There was no sale of the NDC compound.

Hence, FIRESTONE cannot exercise its right of refusal.

NDCs contention: NDC and PUOP are both government

entities. Hence, the transaction cannot be legally called a
sale.

ISSUE:
Whether or not there is a valid sale between NDC and PUP.

RULING:

YES. The intention of NDC and PUP to enter into a contract

of sale was clearly expressed in the Memorandum Order No.