Hyatt Elevators and Escalators Corporation vs. Cathedral Heights Building Complex Association, Inc.

A perfected contract of sale requires a meeting of minds on the price, and the fixing of the price can never be left to the decision of one of the contracting parties; a price fixed by one party, if accepted by the other, gives rise to a perfected sale, but absent such acceptance, no contract exists.

On October 1, 1994, Hyatt Elevators and Escalators Corporation entered into an "Agreement to Service Elevators" with Cathedral Heights Building Complex Association, Inc. to maintain four passenger elevators in the latter's building, which housed a hospital. The agreement stipulated that the customer shall pay additional charges for the repair and supply of parts other than those specifically mentioned. From April 1997 to July 1998, Hyatt incurred expenses for parts and maintenance amounting to Php 1,161,933.47. Cathedral Heights refused to pay, prompting Hyatt to demand payment and eventually file a complaint for sum of money.

• The Service Agreement: Petitioner and respondent executed an "Agreement to Service Elevators" on October 1, 1994, commissioning petitioner to maintain respondent's four elevators. Section D(2) of the agreement provided that respondent shall pay additional charges for the repair and supply of parts other than those specifically enumerated.
• The Billing Dispute: Between April 1997 and July 1998, petitioner used parts for maintenance and repair totaling Php 1,161,933.47, as itemized in a statement of account supported by sales invoices, delivery receipts, trouble call reports, and maintenance reports. Respondent refused to pay the amount.
• The Standard Operating Procedure (SOP): Respondent's witness testified that the SOP for elevator breakdowns required: (1) notifying the technician; (2) technician evaluates the problem; (3) if parts need replacement, defective parts are presented to the building administrator and a quotation is made; (4) quotation is endorsed to the Finance Department; and (5) a purchase order is prepared and submitted to the Board of Directors for approval. No purchase orders were secured by petitioner for the disputed repairs.
• Petitioner's Claimed Procedure: Petitioner claimed a verbal agreement between its service manager and respondent's building engineer (Tisor) dispensed with the SOP due to the hospital's need for continuous elevator operation. Under this alleged procedure, parts were installed immediately, trouble call reports were signed by guards or receptionists, and sales invoices were issued only after the building engineer's approval. Petitioner asserted this was the practice since 1994, for which respondent had previously paid without objection.

• Perfected Contract of Sale: Petitioner argued that a perfected contract of sale existed regarding the spare parts delivered and installed, rendering respondent liable for their prices under the Service Agreement.
• Verbal Agreement and Estoppel: Petitioner maintained that a verbal agreement between its service manager and respondent's building engineer authorized the bypass of the SOP, and that this procedure had been the adopted practice since 1994, for which respondent had previously paid without objection, thus estopping respondent from denying liability.

• Procedural Bar (Rule 45): Respondent argued the petition should be denied due course for raising questions of fact, which is beyond the scope of a Rule 45 petition.
• Absence of Consent and Price Certain: Respondent countered that it did not consent to the purchase of spare parts and there was no meeting of minds upon the price, as no purchase orders were issued by its Finance Manager or Board of Directors.
• Non-compliance with SOP: Respondent argued petitioner failed to follow the SOP, making the repairs unauthorized and leaving respondent unable to verify whether the parts were actually delivered and installed.

• Jurisdiction over Factual Findings: Whether the Supreme Court may review the factual findings of the Court of Appeals in a Rule 45 petition.
• Existence of a Perfected Contract of Sale: Whether a perfected contract of sale existed between petitioner and respondent with regard to the spare parts delivered and installed, such as to render respondent liable for their prices.

• Jurisdiction over Factual Findings: Factual findings of the Court of Appeals may be reviewed under recognized exceptions to the conclusive nature of such findings. The present case falls under the exception where the trial court and the appellate court arrived at conflicting findings of fact, justifying a review by the Supreme Court.
• Existence of a Perfected Contract of Sale: No perfected contract of sale existed because there was no meeting of minds upon the price and no proof of respondent's consent. Petitioner failed to discharge its burden of proving the existence of the verbal agreement that would authorize non-observance of the SOP; the testimony of petitioner's finance manager was insufficient and potentially hearsay, as the individuals who allegedly entered into the verbal agreement (petitioner's service manager and respondent's engineer) were not presented as witnesses. Furthermore, petitioner failed to prove that the non-observance of the SOP was the practice since 1994, as no prior documents or receipts from 1994-1996 were presented. The signatures of the information clerk or guard on the delivery receipts merely pertained to physical receipt of the papers, not acceptance of the parts or the price, especially absent proof that these personnel were authorized to sign on respondent's behalf. The fixing of the price cannot be left to one party without the other's acceptance, and no acceptance by respondent of the dictated price was shown.

• Burden of Proof in Civil Cases — Each party must prove its own affirmative allegations, and the burden of proof lies on the party who would be defeated if no evidence were given on either side. One who alleges a fact has the burden of proving it; a mere allegation is not evidence. Applied to reject petitioner's claims because the verbal agreement and the alleged practice since 1994 were merely alleged but not substantiated by competent evidence.
• Essential Elements of a Contract of Sale — Consent and a price certain are essential elements of a contract of sale. The fixing of the price can never be left to the decision of one of the contracting parties. A price fixed by one party, if accepted by the other, gives rise to a perfected sale. Applied to rule that no perfected contract of sale existed because there was no proof of respondent's acceptance of the price dictated by petitioner.
• Exceptions to Conclusiveness of CA Findings of Fact — While the Supreme Court's jurisdiction under Rule 45 is generally limited to questions of law, factual findings of the Court of Appeals may be reviewed under exceptional circumstances, such as when the findings of the Court of Appeals are contrary to those of the trial court. Applied to allow the review of the conflicting factual findings of the RTC and CA.

• "The fixing of the price can never be left to the decision of one of the contracting parties. But a price fixed by one of the contracting parties, if accepted by the other, gives rise to a perfected sale." — Articulating the requirement of mutual agreement on the price for a valid contract of sale.
• "It is an age-old rule in civil cases that one who alleges a fact has the burden of proving it and a mere allegation is not evidence." — Emphasizing the necessity of substantiating claims with competent proof, particularly regarding the existence of a verbal agreement.
• "The signatures of receipt by the information clerk or the guard on duty on the sales invoices and delivery receipts merely pertain to the physical receipt of the papers. It does not indicate that the parts stated were actually delivered and installed." — Clarifying the evidentiary weight of signatures of low-level employees on delivery receipts absent proof of authority to bind the principal.

• Citibank, N.A. v. Sabeniano, G.R. No. 156132 (October 16, 2006) — Followed for the enumeration of the ten recognized exceptions to the rule that findings of fact of the Court of Appeals are conclusive upon the Supreme Court in a Rule 45 petition.
• Boston Bank of the Philippines v. Manalo, G.R. No. 158149 (February 9, 2006) — Followed for the doctrine that the fixing of the price can never be left to the decision of one of the contracting parties, and that a price fixed by one party, if accepted by the other, gives rise to a perfected sale.
• Villanueva v. Balaguer, G.R. No. 180197 (June 23, 2009) — Followed for the rule on burden of proof in civil cases.
• Heirs of Cipriano Reyes v. Calumpang, G.R. No. 138463 (October 30, 2006) — Followed for the principle that a mere allegation is not evidence.

• Article 1458, Civil Code — Defines the contract of sale where one party obligates himself to transfer ownership and deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent. Applied to determine the absence of essential elements (price certain and consent) in the purported sale of spare parts.
• Rule 45, Rules of Court — Governs appeals by certiorari to the Supreme Court, limiting jurisdiction to questions of law. Applied to determine the procedural threshold for the petition, although an exception was invoked to review the facts.

Carpio (Chairperson), Nachura, Abad, Mendoza