Petitioners Vs Vs Respondents: First Division
Petitioners Vs Vs Respondents: First Division
Petitioners Vs Vs Respondents: First Division
DECISION
GARCIA , J : p
Assailed and sought to be set aside in this petition for review under Rule 45 of the
Rules of Court is the decision 1 dated September 27, 2004 of the Court of Appeals (CA) in
CA-G.R. CV No. 50002, as reiterated in its resolution 2 dated May 8, 2006, denying
reconsideration thereof. The challenged decision reversed that of the Regional Trial Court
(RTC) of Makati City, Branch 66, in its Civil Case No. 16917, an action for Speci c
Performance and Injunction thereat commenced by the herein petitioners against the
respondents. The Makati RTC ruled that a perfected contract of sale existed in favor of
Jorge Navarra and Carmelita Bernardo Navarra (Navarras) over the properties involved in
the suit and accordingly ordered Planters Development Bank (Planters Bank) to execute
the necessary deed of sale therefor. The CA reversed that ruling. Hence, this recourse by
the petitioners.
The facts:
The Navarras are the owners of ve (5) parcels of land located at B.F. Homes,
Parañaque and covered by Transfer Certi cates of Title (TCT) Nos. S-58017, S-58011, S-
51732, S-51733 and A-14574. All these ve (5) parcels of land are the subject of this
controversy.
On July 5, 1982, the Navarras obtained a loan of P1,200,000.00 from Planters Bank
and, by way of security therefor, executed a deed of mortgage over their aforementioned
ve (5) parcels of land. Unfortunately, the couple failed to pay their loan obligation. Hence,
Planters Bank foreclosed on the mortgage and the mortgaged assets were sold to it for
P1,341,850.00, it being the highest bidder in the auction sale conducted on May 16, 1984.
The one-year redemption period expired without the Navarras having redeemed the
foreclosed properties. aHTDAc
I realize that this is not a regular transaction but I am seeking your favor to
give me a chance to reserve whatever values I can still recover from the properties
and to avoid any legal complications that may arise as a consequence of the
total loss of the Balangay lot. I hope that you will extend to me your favorable
action on this grave matter. AaHTIE
In response, Planters Bank, thru its Vice-President Ma. Flordeliza Aguenza, wrote
back Navarra via a letter dated August 16, 1985, thus:
Regarding your letter dated July 18, 1985, requesting that we give up to
August 31, 1985 to buy back your house and lot and restaurant and building
subject to a P300,000.00 downpayment on the purchase price, please be advised
that the Collection Committee has agreed to your request.
Please see Mr. Rene Castillo, Head, Acquired Assets Unit, as soon as
possible for the details of the transaction so that they may work on the necessary
documentation.
Accordingly, Jorge Navarra went to the O ce of Mr. Rene Castillo on August 20,
1985, bringing with him a letter requesting that the excess payment of P300,000.00 in
connection with the redemption made by the RRRC be applied as down payment for the
Navarras' repurchase of their foreclosed properties.
Because the amount of P300,000.00 was sourced from a different transaction
between RRRC and Planters Bank and involved different debtors, the Bank required
Navarra to submit a board resolution from RRRC authorizing him to negotiate for and its
behalf and empowering him to apply the excess amount of P300,000.00 in RRRC's
redemption payment as down payment for the repurchase of the Navarras' foreclosed
properties.
Meanwhile, titles to said properties were consolidated in the name of Planters Bank,
and on August 27, 1985, new certi cates of title were issued in its name, to wit: TCT Nos.
CD Technologies Asia, Inc. © 2018 cdasiaonline.com
97073, 97074, 97075, 97076 and 97077.
Then, on January 21, 1987, Planters Bank sent a letter to Jorge Navarra informing
him that it could not proceed with the documentation of the proposed repurchase of the
foreclosed properties on account of his non-compliance with the Bank's request for the
submission of the needed board resolution of RRRC.
In his reply-letter of January 28, 1987, Navarra claimed having already delivered
copies of the required board resolution to the Bank. The Bank, however, did not receive
said copies. Thus, on February 19, 1987, the Bank sent a notice to the Navarras demanding
that they surrender and vacate the properties in question for their failure to exercise their
right of redemption. DAEIHT
Such was the state of things when, on June 31, 1987, in the RTC of Makati City, the
Navarras led their complaint for Speci c Performance with Injunction against Planters
Bank. In their complaint docketed in said court as Civil Case No. 16917 and ra ed to
Branch 66 thereof, the Navarras, as plaintiffs, alleged that a perfected contract of sale was
made between them and Planters Bank whereby they would repurchase the subject
properties for P1,800,000.00 with a down payment of P300,000.00.
In its Answer, Planters Bank asserted that there was no perfected contract of sale
because the terms and conditions for the repurchase have not yet been agreed upon.
On September 9, 1988, a portion of the lot covered by TCT No. 97077 (formerly TCT
No. A-14574) was sold by Planters Bank to herein co-respondent Roberto Gatchalian
Realty, Inc. (Gatchalian Realty). Consequently, TCT No. 97077 was cancelled and TCT No.
12692 was issued in the name of Gatchalian Realty. This prompted the Navarras to amend
their complaint by impleading Gatchalian Realty as additional defendant.
In a decision dated July 10, 1995, the trial court ruled that there was a perfected
contract of sale between the Navarras and Planters Bank, and accordingly rendered
judgment as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered
ordering:
a) the cancellation of the Deed of Absolute Sale (Exh. "2") over lot
4137-C between defendant Planters Development Bank and
defendant Roberto Gatchalian Realty Corporation (RGRI) with the
vendor bank refunding all the payments made by the vendee RGRI
"without interest less the five percent (5%) broker's commission":
d) No costs.
SO ORDERED.
CD Technologies Asia, Inc. © 2018 cdasiaonline.com
Therefrom, Planters Bank and Gatchalian Realty separately went on appeal to the CA
whereat their appellate recourse were consolidated and docketed as CA-G.R. CV No.
50002.
As stated at the threshold hereof, the appellate court, in its decision of September
27, 2004, reversed that of the trial court and ruled that there was no perfected contract of
sale between the parties. Partly says the CA in its decision:
The Court cannot go along with the deduction of the trial court that the
response of Planters Bank was favorable to Jorge Navarra's proposal and that
the P300,000.00 in its possession is a down payment and as such su cient
bases to conclude that there was a valid and perfected contract of sale. Based on
the turn of events and the tenor of the communications between the offerors and
the creditor bank, it appears that there was not even a perfected contract to sell,
much less a perfected contract of sale.
Article 1319 cited by the trial court provides that the acceptance to an offer
must be absolute . Simply put, there must be unquali ed acceptance and no
condition must tag along. But Jorge Navarra in trying to convince the bank to
agree, had himself laid out terms in offering (1) a downpayment of P300,000.00
and setting (2) as deadline August 31, 1985 for the payment thereof. Under these
terms and conditions the bank indeed accepted his offer, and these are
essentially the contents of Exhibits "J" and "K."
But was there compliance? According to the evidence on le the
P300,000.00, if at all, was given beyond the agreed period. The court a quo
missed the fact that the said amount came from the excess of the proceeds of
the sale to the Peña spouses which Jorge Navarra made to appear was made
before the deadline he set of August 31, 1985. But this is athwart Exhibits "M-1"
and "N", the Contract to Sell and the Deed of Sale between RRRC and the Peñas,
for these were executed only on September 13, 1985 and October 7, 1985
respectively. 2005cdasia
With their motion for reconsideration having been denied by the CA in its resolution
of May 8, 2006, petitioners are now with this Court via this recourse on their submission
that the CA erred —
I
. . . IN CONCLUDING THAT THERE WAS NO PERFECTED CONTRACT TO
REPURCHASE THE FORECLOSED PROPERTIES BETWEEN THE PETITIONERS
AND THE PRIVATE RESPONDENT PLANTERS DEVELOPMENT BANK, AS
CORRECTLY FOUND BY THE TRIAL COURT.
II
I realize that this is not a regular transaction but I am seeking your favor to
give me a chance to reserve whatever values I can still recover from the properties
and to avoid any legal complications that may arise as a consequence of the
total loss of the Balangay lot. I hope that you will extend to me your favorable
action on this grave matter.
Given the above, the basic question that comes to mind is: Was the offer certain and
the acceptance absolute enough so as to engender a meeting of the minds between the
parties? Definitely not.
While the foregoing letters indicate the amount of P300,000.00 as down payment,
they are, however, completely silent as to how the succeeding installment payments shall
be made. At most, the letters merely acknowledge that the down payment of P300,000.00
was agreed upon by the parties. However, this fact cannot lead to the conclusion that a
contract of sale had been perfected. Quite recently, this Court held that before a valid and
binding contract of sale can exist, the manner of payment of the purchase price must rst
be established since the agreement on the manner of payment goes into the price such
that a disagreement on the manner of payment is tantamount to a failure to agree on the
price. 6
Too, the Navarras' letter/offer failed to specify a de nite amount of the purchase
price for the sale/repurchase of the subject properties. It merely stated that the "purchase
price will be based on the redemption value plus accrued interest at the prevailing rate up
to the date of the sales contract." The ambiguity of this statement only bolsters the
uncertainty of the Navarras' so-called "offer" for it leaves much rooms for such questions,
as: what is the redemption value? what prevailing rate of interest shall be followed: is it the
rate stipulated in the loan agreement or the legal rate? when will the date of the contract of
sale be based, shall it be upon the time of the execution of the deed of sale or upon the
time when the last installment payment shall have been made? To our mind, these
questions need rst to be addressed, discussed and negotiated upon by the parties
before a definite purchase price can be arrived at. SDHAEC
Again, the offer was not clear insofar as concerned the exact number of years that
will comprise the long-term payment scheme. As we see it, the absence of a stipulated
period within which the repurchase price shall be paid all the more adds to the
indefiniteness of the Navarras' offer.
Clearly, then, the lack of a de nite offer on the part of the spouses could not
possibly serve as the basis of their claim that the sale/repurchase of their foreclosed
properties was perfected. The reason is obvious: one essential element of a contract of
sale is wanting: the price certain. There can be no contract of sale unless the following
elements concur: (a) consent or meeting of the minds; (b) determinate subject matter; and
(c) price certain in money or its equivalent. Such contract is born or perfected from the
moment there is a meeting of minds upon the thing which is the object of the contract and
upon the price. 7 Here, what is dramatically clear is that there was no meeting of minds vis-
a-vis the price, expressly or impliedly, directly or indirectly.
CD Technologies Asia, Inc. © 2018 cdasiaonline.com
Further, the tenor of Planters Bank's letter-reply negates the contention of the
Navarras that the Bank fully accepted their offer. The letter speci cally stated that there is
a need to negotiate on the other details of the transaction 8 before the sale may be
formalized. Such statement in the Bank's letter clearly manifests lack of agreement
between the parties as to the terms of the purported contract of sale/repurchase,
particularly the mode of payment of the purchase price and the period for its payment. The
law requires acceptance to be absolute and unquali ed. As it is, the Bank's letter is not the
kind which would constitute acceptance as contemplated by law for it does not evince any
categorical and unequivocal undertaking on the part of the Bank to sell the subject
properties to the Navarras. EICSDT
The Navarras' attempt to prove the existence of a perfected contract of sale all the
more becomes futile in the light of the evidence that there was in the rst place no
acceptance of their offer. It should be noted that aside from their rst letter dated July 18,
1985, the Navarras wrote another letter dated August 20, 1985, this time requesting the
Bank that the down payment of P300,000.00 be instead taken from the excess payment
made by the RRRC in redeeming its own foreclosed properties. The very circumstance that
the Navarras had to make this new request is a clear indication that no de nite agreement
has yet been reached at that point. As we see it, this request constitutes a new offer on the
part of the Navarras, which offer was again conditionally accepted by the Bank as in fact it
even required the Navarras to submit a board resolution of RRRC before it could proceed
with the proposed sale/repurchase. The eventual failure of the spouses to submit the
required board resolution precludes the perfection of a contract of sale/repurchase
between the parties. As earlier mentioned, contracts are perfected when there is
concurrence of the parties' wills, manifested by the acceptance by one of the offer made
by the other. 9 Here, there was no concurrence of the offer and acceptance as would result
in a perfected contract of sale.
Evidently, what transpired between the parties was only a prolonged negotiation to
buy and to sell, and, at the most, an offer and a counter-offer with no de nite agreement
having been reached by them. With the hard reality that no perfected contract of
sale/repurchase exists in this case, any independent transaction between the Planters
Bank and a third-party, like the one involving the Gatchalian Realty, cannot be affected.
WHEREFORE, the petition is DENIED and the assailed decision and resolution of the
Court of Appeals are AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
Puno, C.J., Corona and Azcuna, JJ., concur.
Sandoval-Gutierrez, J., is on leave.
Footnotes
1. Penned by then Associate Justice Roberto A. Barrios (deceased) with Associate Justices
Amelita G. Tolentino and Vicente S.E. Veloso, concurring; rollo, pp. 44-58.
AHCaES
2. Id. at 66-68.
3. Francisco v. Court of Appeals, G.R. No. 11849, April 25, 2003, 401 SCRA 594.
CD Technologies Asia, Inc. © 2018 cdasiaonline.com
4. Bugatti v. Court of Appeals, G.R. No. 138113, October 17, 2000, 343 SCRA 335.
5. Swedish Match, AB v. Court of Appeals, G.R. No. 128120, October 20, 2004, 441 SCRA 1.
6. Edrada v. Ramos, G.R. No. 154413, August 31, 2005, 468 SCRA 597.
7. Landres v. Court of Appeals, G.R. No. 136427, December 17, 2002, 394 SCRA 133.
8. Rollo, p. 49.
9. Firme v. Bukal Enterprises and Development Corporation, G.R. No. 146608, October 23,
2003, 414 SCRA 190.