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UP Vs PHILAB

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Dianne Grace Agura
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19 views

UP Vs PHILAB

Case Digest

Uploaded by

Dianne Grace Agura
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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University of the Philippines vs PHILAB Industries

FACTS:
In 1979, the University of the Philippines (UP) decided to construct an integrated system of research
organization known as the Research Complex. Laboratory equipment and furniture were purchased for
UPLB National BIOTECH under Ferdinand E Marcos Foundation (FEMF)
BIOTECH contacted Philippine Laboratory Industries, Inc. (PHILAB), to fabricate the laboratory
furniture and deliver the same to BIOTECH for the BIOTECH Building Project, for the account of the
FEMF.
In a letter, BIOTECH requested the PHILAB for copies of the shop drawings and a sample contract for the
project. However, PHILAB failed to forward any sample contract. Thereafter, PHILAB made partial
deliveries of the furniture.
Consequently, FEMF and UPLB entered into a Memorandum of Agreement (MOA) which FEMF agreed
to grant financial support and donate sums of money to UP for the construction of buildings, installation
of laboratory and other capitalization for the project, not to exceed
₱29,000,000.00.
PHILAB failed to submit the contract of installation and instead, an accomplishment report of the project
and requested payment thereon. When the amount of final payment is due, FEMF failed to pay the bill.
PHILAB then wrote BIOTECH, appealing for the payment of its bill on installment basis.
After the oust of President Marcos, PHILAB wrote President Aquino asking her help to secure the
payment due for the FEMF. UPLB wrote PHILAB requesting for a copy of the contract executed between
them and FEMF, however the same did not executed any contract regarding the fabrication and delivery
of laboratory furniture to BIOTECH.
PHILAB filed a complaint for sum of money and damages against UP. However, UP denied liability and
alleged that PHILAB had no cause of action against it because it was merely the donee/beneficiary of the
laboratory furniture in the BIOTECH; and that the FEMF, which funded the project, was liable to the
PHILAB for the purchase price of the laboratory furniture. RTC dismissed the complaint of PHILAB and
ruled in favor of UP. PHILAB appealed to CA which reversed the decision of RTC.
ISSUE:
Whether the Regional Trial Court did not err that there was an implied contract on fact?
RULING/RATIO DECIDENDI:
The RTC did not err that there was an implied contract on fact.
The court agree with the petitioner that, based on the records, an implied-in-fact contract of sale was
entered into between the respondent and FEMF. A contract implied in fact is one implied from facts
and circumstances showing a mutual intention to contract. It arises where the intention of the
parties is not expressed, but an agreement in fact creating an obligation. It is a contract, the
existence and terms of which are manifested by conduct and not by direct or explicit words between
parties but is to be deduced from conduct of the parties, language used, or things done by them, or other
pertinent circumstances attending the transaction. To create contracts implied
in fact, circumstances must warrant inference that one expected compensation and the other to pay. An
implied-in-fact contract requires the parties’ intent to enter into a contract; it is a true contract. An
implied-in-fact contract will not arise unless the meeting of minds is indicated by some intelligent
conduct, act or sign.
In this case, the respondent was aware, from the time Padolina contacted it for the fabrication and supply
of the laboratory furniture until the go-signal was given to it to fabricate and deliver the furniture to
BIOTECH as beneficiary, that the FEMF was to pay for the same. Indeed, Padolina asked the respondent
to prepare the draft of the contract to be received by the FEMF prior to the execution of the parties (the
respondent and FEMF), but somehow, the respondent failed to prepare one. The respondent knew that the
petitioner was merely the donee-beneficiary of the laboratory furniture and not the buyer; nor was it liable
for the payment of the purchase price thereof. From the inception, the FEMF paid for the bills and
statement of accounts of the respondent, for which the latter unconditionally issued receipts to and under
the name of the FEMF.

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