LOOC BAY TIMBER INDUSTRIES, INC., v. INTESTATE ESTATES OF VICTOR MONTECALVO AND CONCORDIA L. MONTECALVO, REPRESENTED BY DR. VICTOR L. MONTECALVO, JR, et.al.
556 SCRA 758 (2008)
An essential requisite of a valid contract is the consent of the contracting parties.
Victor Montecalvo Sr. and his wife Concordia purchased a parcel of land which was leased to petitioner Looc Bay Timber Industries, Inc. (Looc Bay). Said lease agreement will expire in 1978 but was to be extended for another ten years as provided for in the agreement. Spouses Montecalvo and Looc Bay subsequently forged an agreement under which latter will buy portion of the land which it presently uses as log pond. Looc Bay paid for the consideration the balance of which to be paid on installment.Spouses Montecalvo agreed to sell to Looc Bay‘s sister company, the Visayan Forest Development (VFD) Corporation, portions of land adjoining the logging road of Looc Bay. Under VFD will pay Spouses Montecalvo in consideration of which a deed of absolute sale shall be executed by the parties.
Later, Spouses Montecalvo died. Consequently, the couple‘s heirs notified Looc Bay that they were terminating 1978 lease agreement. Looc Bay claims that during the Victor‘s lifetime, he promised to execute the deeds of sale corresponding to the two agreements and deliver the titles of lands subject thereof but he failed to do so and despite repeated demands from Intestate Estates of the Montecalvos, represented by couple‘s heirs, no documents of sale nor were copies of titles delivered to Looc Bay.
Thus Looc Bay filed an action for specific performance with Regional Trial Court of Samar. The RTC held that the agreements were valid but that there was no showing that the considerations in two agreements were fully paid. On appeal, the Court of Appeals held the first agreement was fully paid but with respect to the second agreement, CA held it as not binding since Looc Bay‘s sister company Visayan Forest‘s representative Valeriano Bueno did not affix his signature on the agreement. Hence, Looc Bay elevated the case to the Supreme Court for review.
ISSUE:
Whether or not CA erred in declaring the contract void and no effect for lack of consent on part of the vendee
HELD:
An essential requisite of a valid contract is the consent of the contracting parties. Consent may be construed to be present if the vendee also signed this second agreement. In the absence of Valeriano Bueno’s signature, the court cannot give validity to the second agreement.
In the present case, the Court finds that the trial court overlooked the fact that the November 28, 1984 Agreement was not signed by Valeriano Bueno, the representative of petitioner’s Looc Bay‘s sister company-prospective vendee. Absent such signature, petitioner Looc Bay and/or its sister company could not have accepted the offer made by Victor to sell those “certain portions adjoining the logging road of [petitioner] or the entirety of the said land.” The agreement was thus not perfected and therefore created or transmitted no rights.
