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P250,000.00 in favor ofdefendant-appellant corporation on or beforeMay 15, 1983.Ramon J. ibionada t!ro"#! !i$ man, $tarted todi# and #at!er and $crap iron at t!e %&'()(*'(+M&$ premi$e$, proceedin# it! $"c!

endeavor "ntil May 30 !en %&'()(*'(+M& alle#edly directed ibionada/$ men tode$i$t from p"r$"in# t!e or in vie of analle#ed ca$e led a#ain$t ibionada by a certain(lberto P"r$"elo. !i$, !oever, i$ denied by%&'()(* '(+M& !o alle#e t!at on May 23,1983, t!ey $ent a tele#ram to ibionadacancellin# t!e contract of $ale beca"$e of fail"reof t!e latter to comply it! t!e condition$t!ereof.n May 24, 1983, %&'()(* '(+M& receiveda letter advice from t!e "ma#"ete 6ity 7ranc!of t!e 7an of t!e P!ilippine &$land$ dated May24, 1983.ibionada $ent a $erie$ of tele#ram$ $tatin# t!att!e ca$e led a#ain$t !im by P"r$"elo !ad beendi$mi$$ed and demandin# t!at %&'()(*'(+M& comply it! t!e deed of $ale,ot!eri$e a ca$e ill be led a#ain$t t!em.&n reply, %&'()(* '(+M& i$ "nillin# tocontin"e it! t!e $ale d"e to ibionada$ fail"reto comply it! e$$ential precondition$ of t!econtract.ibionada led t!e complaint belo it! apetition for preliminary attac!ment and prayedfor "d#ment orderin# t!e %&'()(* '(+M&to comply it! t!e contract by deliverin# to !imt!e $crap iron $"bect t!ereof&n t!eir (n$er it! 6o"nterclaim, %&'()(*'(+M& in$i$ted t!at t!e cancellation of t!econtract a$ "$tied beca"$e of ibionada$non-compliance it! e$$ential precondition$,amon# !ic! i$ t!e openin# of an irrevocableand "nconditional letter of credit not later t!an15 May 1983.Issue:

&$ t!ere a contract of $ale:&$ t!e obect of $ale delivered:Held:

!e nat"re of t!e tran$action beteen t!e

petitioner corporation and t!e private re$pondenti$ a mere contract to sell or promise to sell, andnot a contract of sale.

!e $eller bo"nd and promi$ed it$elf to $ell t!e$crap iron "pon t!e f"lllment by t!e privatere$pondent of !i$ obli#ation to mae or indor$ean irrevocable and "nconditional letter of creditin payment of t!e p"rc!a$e price.

!e %&'()(* '(+M&$ obli#ation to $ell i$

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"ne;"ivocally $"bect to a po$itive $"$pen$ivecondition, i.e., t!e private re$pondent$ openin#,main# or indor$in# of an irrevocable and"nconditional letter of credit. !e former a#reedto deliver t!e $crap iron only "pon payment oft!e p"rc!a$e price by mean$ of an irrevocable

and "nconditional letter of credit. t!eri$e$tated, t!e contract i$ not one of $ale !ere t!eb"yer ac;"ired oner$!ip over t!e property$"bect to t!e re$ol"tory condition t!at t!ep"rc!a$e price o"ld be paid after delivery.

!"$, t!ere a$ to be no act"al $ale "ntil t!eopenin#, main# or indor$in# of t!e irrevocableand "nconditional letter of credit. 'ince !atobtain$ in t!e ca$e at bar i$ a mere promi$e to$ell, t!e fail"re of t!e private re$pondent tocomply it! t!e po$itive $"$pen$ive conditioncannot even be con$idered a breac! < ca$"alor $erio"$ < b"t $imply an event t!at preventedt!e obli#ation of petitioner corporation to conveytitle from ac;"irin# bindin# force.6on