GR L 52774; (November, 1984) (Digest)
G.R. No. L-52774 November 29, 1984
Republic of the Philippines (NEDA), petitioner, vs. Hon. Court of Appeals, and Laureano Brothers, Co., Inc., respondents.
FACTS
Petitioner NEDA sued respondent Laureano Brothers, Co., Inc. (Laureano) for damages arising from a breach of contract for the supply of non-conforming plumbing materials. The trial court rendered a decision based on a compromise agreement for Laureano to pay a dollar-denominated amount. Upon NEDA’s motion, a writ of preliminary attachment was issued against Laureano’s property. Subsequently, with NEDA’s conformity, the trial court authorized Laureano to sell the attached property to a private buyer, with the net proceeds to be applied to its obligation. The court order stipulated the authority would expire on June 2, 1973.
Laureano consummated the sale on May 31, 1973, and remitted the net proceeds to NEDA on June 1, 1973, albeit deducting an amount for property taxes. NEDA accepted and retained the checks for seven months before disapproving the sale for alleged low price and returning the checks. NEDA then moved to cancel the sale annotation and for a writ of execution, arguing violation of the sale terms. The trial court initially upheld the sale but later reversed itself, nullifying the sale due to Laureano’s alleged undue delay in delivering the full proceeds. Laureano appealed to the Court of Appeals.
ISSUE
Whether the Court of Appeals erred in upholding the validity of the sale of the attached property by Laureano to a third party.
RULING
The Supreme Court affirmed the Court of Appeals’ decision upholding the sale. The legal logic centers on the doctrines of estoppel and good faith. NEDA, having expressly authorized and conformed to the court orders permitting the private sale, cannot later repudiate it simply because it reconsidered the price as too low. Its inaction for seven months, during which it retained the payment checks without protest, constitutes acquiescence and estoppel from asserting a contrary position. The alleged delay in delivering the full proceeds was justified, as Laureano sought an extension pending resolution of NEDA’s own motion for reconsideration; the delay was thus attributable to NEDA’s actions. The Court found Laureano acted in good faith to settle its obligation, and NEDA’s belated rejection of the sale, after unreasonable procrastination, was inequitable. The sale, consummated within the authorized period and registered, was valid.