JOSE R. MORENO, JR., G.R. No.

159373
Petitioner,

Present:

PUNO, J., Chairperson,
- versus - SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
GARCIA, JJ.


PRIVATE MANAGEMENT OFFICE Promulgated:
(formerly, ASSET PRIVATIZATION
TRUST),
Respondent. November 16, 2006

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x


D E C I S I O N

PUNO, J.:


At bar is a Petition for Review on Certiorari of the Decision and Resolution of the Court of
Appeals in CA-G.R. CV No. 49227 dated January 30, 2003 and July 31, 2003, respectively, reversing
the decision of the Regional Trial Court of Makati, Branch 62, in Civil Case No. 93-2756 dated August
10, 1994.
The bare facts are stated in the Joint Motion and Stipulation
[1]
dated March 11, 1994, viz.:
COME NOW the parties, through the undersigned counsel, to this Honorable
Court respectfully make the following agreed statement of facts and issues:

1. The parties hereto hereby confirm the allegations contained
in paragraphs 1, 2, 3 and 4 of the Complaint, to wit:

1. Plaintiff is of legal age, with residence at No.
700 Gen. Malvar St., Malate, Manila; while defendant is a
juridical entity with powers to sue and be sued under
Proclamation No. 50 with offices at the 10
th
floor,
BA Lepanto Building, 8747 Paseo de Roxas, Makati, Metro
Manila, where it may be served with summons, thru its
Trustees.

2. The subject-matter (sic) of this complaint is the
J. Moreno Building (formerly known as
the North Davao Mining Building) or more specifically, the
2
nd
, 3
rd
, 4
th
, 5
th
and 6
th
floors of the building.

3. Plaintiff is the owner of the Ground Floor, the
7
th
Floor and the Penthouse of the J. Moreno Building and
the lot on which it stands.

4. Defendant is the owner of the 2
nd
, 3
rd
, 4
th
,
5
th
and 6
th
floors of the building, the subject-matter (sic) of
this suit.

which were admitted in the Answer dated October 29, 1993;

2. On February 13, 1993, the defendant called for a
conference for the purpose of discussing plaintiffs right of first refusal over
the floors of the building owned by defendant. At said meeting,
defendant informed plaintiff that the proposed purchase price for said
floors was TWENTY[-]ONE MILLION PESOS (P21,000,000.00);

3. On February 22, 1993, defendant, in a letter signed by its
Trustee, Juan W. Moran, informed plaintiff thru Atty. Jose Feria, Jr., that the
Board of Trustees (BOT) of APT is in agreement that Mr. Jose Moreno, Jr.
has the right of first refusal and requested plaintiff to deposit 10% of the
suggested indicative price of P21.0 million on or before February 26,
1993 which letter is attached hereto as Annex A and made an integral
part of this pleading;
4. Plaintiff paid the P2.1 million on February 26, 1993. A copy of
the Official Receipt issued by defendant to plaintiff is attached hereto as
Annex B and made an integral part of this pleading;

5. Then on March 12, 1993, defendant wrote plaintiff that its
Legal Department has questioned the basis for the computation of the
indicative price for the said floors. A copy of the letter is attached hereto
as Annex C and made an integral part of this pleading;

6. On April 2, 1993, defendant wrote plaintiff that the APT BOT
has tentatively agreed on a settlement price of P42,274,702.17 for the
said floors. A copy of this communication is attached hereto as Annex D
and made an integral part hereof;

7. The questions to be resolved by this Honorable Court are:

7.01. Whether or not there was a perfected contract
of sale over the said floors for the amount of P21.0 million,
which will give rise to a right on the part of the plaintiff to
demand that the said floors be sold to him for said amount;

7.02. Assuming that there was a perfected contract,
whether or not defendant can be bound by the price
of P21.0 million;

8. Both parties hereto hereby waive their respective claims for
damages, attorneys fees and costs;

9. Rule 30 of the Revised Rules of Court provides that:

SEC. 2. Agreed statement of facts. The parties
to any action may agree, in writing, upon the facts involved
in the litigation, and require the judgment of the court upon
the facts agreed upon, without the introduction of
evidence.

10. Both parties have agreed to submit this stipulation and to
request that a decision of this Honorable Court be rendered on the basis
of the foregoing stipulation of facts and issues, and after both parties
have submitted their respective memoranda.

P R A Y E R

WHEREFORE, it is respectfully prayed that judgment be rendered on the basis of
the agreed stipulation of facts and issues, without the introduction of evidence in
accordance with Section 2, Rule 30 of the Revised Rules of Court, and after the
submission of the parties of their respective Memoranda.
x x x


On August 10, 1994, the trial court ruled in favor of petitioner Moreno, viz.:

WHEREFORE, judgment is hereby rendered in favor of plaintiff and against
defendant, ordering defendant to sell the 2
nd
, 3
rd
, 4
th
, 5
th
and 6
th
floors of the J. Moreno
Building to plaintiff at the price of TWENTY[-]ONE MILLION (P21,000,000.00) PESOS; and
ordering defendant to endorse the transaction to the Committee on Privatization,
without costs.
[2]



Respondent filed a Motion for Reconsideration.
[3]
On November 16, 1994, the trial court denied
the motion for lack of merit.
[4]


Respondent appealed with the Court of Appeals. From the time respondent filed its Notice of
Appeal with the trial court, the parties submitted numerous motions, including petitioners Motion to
Dismiss
[5]
dated July 8, 1996. Petitioner moved that the case be dismissed due to the failure of
respondent to file its brief within the reglementary period.

On December 18, 1997, the Eighth Division of the appellate court granted
[6]
the motion to
dismiss and denied
[7]
respondents motion for reconsideration. Respondent then filed a Petition for
Review on Certiorari
[8]
with this Court to reverse the dismissal of the appeal. On July 5, 1999, this Court,
through a Resolution
[9]
of the Third Division, reversed the resolution dismissing the appeal on the
ground that the appeal raises substantial issues justifying a review of the case on the merits.

On January 30, 2003, the appellate court found that there was no perfected contract of sale
over the subject floors and reversed the ruling of the trial court, viz.:
WHEREFORE, the appeal is hereby GRANTED. The assailed decision of the
Regional Trial Court of Makati, Metro Manila, Branch 62, rendered in Civil Case No. 93-
2756 is hereby REVERSED and SET ASIDE and a new one is entered DISMISSING the
instant complaint.
[10]


Petitioner moved for reconsideration but the motion was denied by the appellate court in its
questioned Resolution
[11]
dated July 31, 2003. Hence, this Petition contending that:

IN REVERSING THE TRIAL COURTS DECISION DATED 10 AUGUST 1994, THE COURT OF
APPEALS DECIDED ISSUES NOT IN ACCORDANCE WITH LAW AND THE APPLICABLE
DECISIONS OF THE HONORABLE COURT CONSIDERING THAT:

I

GIVEN THE UNDISPUTED FACTS OF THE INSTANT CASE, IT IS CLEAR THAT
THERE WAS A PERFECTED, VALID AND BINDING CONTRACT
OF SALE BETWEEN PETITIONER MORENO AND RESPONDENT APT (NOW
PMO) WITH RESPECT TO THE SUBJECT PROPERTY.

II

THE PRINCIPLE OF ESTOPPEL SHOULD HAVE BEEN APPLIED BY THE COURT OF
APPEALS TO HOLD RESPONDENT APT (NOW PMO) TO ITS CONTRACT
OFSALE WITH PETITIONER MORENO CONSIDERING THAT:

A. THERE IS NOTHING IRREGULAR OR UNCONSCIONABLE
IN THE ACTS OF THE AGENTS OF RESPONDENT APT (NOW
PMO) IN CONNECTION WITH THE PERFECTED AND PARTIALLY
EXECUTED CONTRACT OF SALE.

B. RESPONDENT APT (NOW PMO) HAS DESCENDED TO
THE LEVEL OF A PRIVATE INDIVIDUAL OR ENTITY BOUND BY
VALID CONTRACTUAL OBLIGATIONS WHEN IT ENGAGED IN
PROPRIETARY AND/OR COMMERCIAL FUNCTIONS.




III

THE COURT OF APPEALS ERRED WHEN IT RULED THAT RESPONDENT APT
(NOW PMO) TIMELY RAISED THE ISSUES ON THE ALLEGED REQUIREMENT OF
APPROVAL FOR THE INDICATED PRICE AND THE ALLEGED
UNCONSCIONABLY LOW PRICE FOR THE SALE OF THE SUBJECT PROPERTY,
CONSIDERING THAT SAID ISSUES WERE NEVER RAISED IN THE PROCEEDINGS
BEFORE THE TRIAL COURT AND DO NOT BEAR RELEVANCE OR CLOSE
RELATION TO THE ISSUES RAISED IN THE PROCEEDINGS BEFORE THE COURT
OF APPEALS.

IV

THE COURT OF APPEALS ERRED IN RULING THAT THE BRIEF FILED BY
RESPONDENT APT (NOW PMO) DID NOT VIOLATE SECTION 1(F) OF THE
RULES OF COURT WHICH SHOULD HAVE WARRANTED A DISMISSAL OF
RESPONDENT APTS (NOW PMO) APPEAL.
[12]



The hinge issue is whether there was a perfected contract of sale over the subject floors at the
price of P21,000,000.00.

A contract of sale is perfected at the moment there is a meeting of minds upon the thing which is
the object of the contract and upon the price.
[13]
Consent is manifested by the meeting of the offer
and the acceptance upon the thing and the cause which are to constitute the contract. The offer
must be certain and the acceptance absolute.
[14]


To reach that moment of perfection, the parties must agree on the same thing in the same
sense,
[15]
so that their minds meet as to all the terms.
[16]
They must have a distinct intention common
to both and without doubt or difference; until all understand alike, there can be no assent, and
therefore no contract.
[17]
The minds of parties must meet at every point; nothing can be left open for
further arrangement.
[18]
So long as there is any uncertainty or indefiniteness, or future negotiations or
considerations to be had between the parties, there is not a completed contract, and in fact, there
is no contract at all.
[19]


Contract formation undergoes three distinct stages preparation or negotiation, perfection or
birth, and consummation. Negotiation begins from the time the prospective contracting parties
manifest their interest in the contract and ends at the moment of agreement of the parties. The
perfection or birth of the contract takes place when the parties agree upon all the essential elements
thereof. The last stage is the consummation of the contract wherein the parties fulfill or perform the
terms agreed upon, culminating in its extinguishment.
[20]
Once there is concurrence of the offer and
acceptance of the object and cause, the stage of negotiation is finished. This situation does not
obtain in the case at bar. The letter of February 22, 1993 and the surrounding circumstances clearly
show that the parties are not past the stage of negotiation, hence there could not have been a
perfected contract of sale.

The letter
[21]
is clear evidence that respondent did not intend to sell the subject floors at the price
certain of P21,000,000.00, viz.:

22 February 1993


ATTY. JOSE FERIA, JR.
FERIA, FERIA, LUGTU & LAO
Ferlaw Building, 336 Cabildo Street
Intramuros, Manila


Dear Atty. Feria:

During its meeting on February 19, 1993, our Board reviewed your letter of February 18,
1993.

We are pleased to inform you that the Board is in agreement that Mr. Jose Moreno, Jr.
has the right of first refusal. This will be confirmed by our Board during the next board
meeting on February 26, 1993. In the meantime, please advise Mr. Moreno that the
suggested indicative price for APTs five (5) floors of the building in question is P21
Million.

If Mr. Moreno is in agreement, he should deposit with APT the amount of P2.1 Million
equivalent to 10% of the price on or before February 26, 1993. The balance will be due
within fifteen (15) days after Mr. Moreno receives the formal notice of approval of the
indicative price.

If you or Mr. Moreno have (sic) any question, please let me know.

Very truly yours,


(Signed)
JUAN W. MORAN
Associate Executive Trustee


The letter clearly states that P21,000,000.00 is merely a suggested indicative price of the
subject floors as it was yet to be approved by the Board of Trustees. Before the Board could confirm
the suggested indicative price, the Committee on Privatization must first approve the terms of the
sale or disposition. The imposition of this suspensive condition finds basis under Proclamation No.
50
[22]
which vests in the Committee the power to approve the sale of government assets, including
the price of the asset to be sold,viz.:

ARTICLE II. COMMITTEE ON PRIVATIZATION

x x x

SECTION 5. POWERS AND FUNCTIONS. The Committee shall have the following powers
and functions:

(1) x x x x Provided, further, that any such independent disposition shall
be undertaken with the prior approval of the Committee and in
accordance with the general disposition guidelines as the Committee
may provide; Provided, finally, that in every case the sale or disposition
shall be approved by the Committee with respect to the buyer and price
only;

x x x

(4) To approve or disapprove, on behalf of the National Government
and without need of any further approval or other action from any other
government institution or agency, the sale or disposition of such assets, in
each case on terms and to purchasers recommended by the Trust or the
government institution, as the case may be, to whom the disposition of
such assets may have been delegated; Provided that, the Committee
shall not itself undertake the marketing of any such assets, or participate in
the negotiation of their sale;

x x x

ARTICLE III. ASSET PRIVATIZATION TRUST

x x x

SECTION 12. POWERS. The Trust shall, in the discharge of its responsibilities, have the
following powers:

x x x

(2) Subject to its having received the prior written approval of the
Committee to sell such asset at a price and on terms of payment and to a
party disclosed to the Committee, to sell each asset referred to it by the
Committee to such party and on such terms as in its discretion are in the
best interest of the National Government, and for such purpose to
execute and deliver, on behalf and in the name of the National
Government. Such deeds of sale, contracts and other instruments as
may be necessary or appropriate to convey title to such assets;


Petitioner construes Section 12, Article III of the Proclamation differently. He argues that what
the law says is that even before respondent sells or offers for sale a government asset, the terms
thereof have already been previously approved by the Committee,
[23]
i.e., [s]ubject to its having
received the prior written approval of the Committee to sell such an asset at a price and on terms of
payment and to a party disclosed to the Committee, to sell each asset referred to it by the
Committee to such party and on such terms as in its discretion are in the best interest of the National
Government.
[24]
Thus, the Committees approval of the suggested indicative price of P21,000,000.00
is not necessary.

We are not persuaded.
If we adopt the argument of petitioner, Section 12, Article III would nullify the power granted to
the Committee under Section 5 (4), Article II of the same Proclamation. Under Section 5 (4), the
Committee has the power to approve or disapprove, on behalf of the National Government and
without need of any further approval or other action from any other government institution or
agency, the sale or disposition of such assets, in each case on terms and to purchasers
recommended by the Trust or the government institution, as the case may be, to whom the
disposition of such assets may have been delegated; Provided that, the Committee shall not itself
undertake the marketing of any such assets, or participate in the negotiation of their sale.
[25]
The law
is clear that the Trust shall recommend the terms for the Committees approval or disapproval, and
not the other way around.

It is a basic canon of statutory construction that in interpreting a statute, care should be taken
that every part thereof be given effect, on the theory that it was enacted as an integrated measure
and not as a hodge-podge of conflicting provisions. The rule is that a construction that would render
a provision inoperative should be avoided; instead, apparently inconsistent provisions should be
reconciled whenever possible as parts of a coordinated and harmonious whole.
[26]


To bolster the argument that the Committees approval may be dispensed with, petitioner also
cites Opinion No. 27, Series of 1989, of the Secretary of Justice which recognizes a case where the
Committee may delegate to respondent the power to approve the sale or disposition of assets with a
transfer price not exceeding P60,000,000.00.
[27]


The argument fails to impress. The Opinion involves a case where no material discretion is
involved in the disposition of assets pursuant to the subject proposal and the act which could be
delegated, as opined, is ministerial. The Opinion further notes that the criteria and guidelines stated
therein are concrete and definite enough that once these criteria and guidelines are present in a
particular case, the APT is practically left with no choice in the disposition of the assets involved and
that all that the APT shall do in disposing off an asset thereunder is ascertain whether a prospective
buyer and the price he offers satisfy such conditions. Petitioner failed to show that the case at bar is
of the same nature that is, that the disposition of the subject floors partakes of the nature of a
ministerial act which has been defined as one performed under a given state of facts, in a
prescribed manner, in obedience to the mandate of legal authority, without regard to the exercise
of judgment upon the propriety or impropriety of the act done.

Petitioner further argues that the suggested indicative price of P21,000,000.00 is not a
proposed price, but the selling price indicative of the value at which respondent was willing to
sell.
[28]
Petitioner posits that under Section 14, Rule 130 of the Revised Rules of Court, the term should
be taken in its ordinary and usual acceptation and should be taken to mean as a price which is
indicated or specified which, if accepted, gives rise to a meeting of minds.
[29]
This was the same
construction adopted by the trial court,viz.:
Going to defendants main defense that P21 Million was a suggested indicative
price we have to find out exactly what indicative means. Webster Comprehensive
Dictionary, International Edition, gives us a graphic meaning that everybody can
understand, when it says that to indicate is [t]o point out; direct attention[;]
to indicate the correct page[.] Indicative is merely the adjective of the verb to
indicate. x x x when the price of P21 [M]illion was indicated then it becomes the
indicative price the correct price, no ifs[,] no buts.
[30]
(emphases in the original)


We do not agree.
Under the same section and rule invoked by petitioner, the terms of a writing are presumed to
have been used in their primary and general acceptation, but evidence is admissible to show that
they have a local, technical, or otherwise peculiar signification, and were so used and understood in
the particular instance, in which case the agreement must be construed accordingly.
[31]


The reliance of the trial court in the Webster definition of the term indicative, as also
adopted by petitioner, is misplaced. The transaction at bar involves the sale of an asset under a
privatization scheme which attaches a peculiar meaning or signification to the term indicative
price. Under No. 6.1 of the General Bidding Procedures and Rules
[32]
of respondent, an indicative
price is a ball-park figure and [respondent] supplies such a figure purely to define the ball-
park.
[33]
The plain contention of petitioner that the transaction involves an ordinary armslength sale
of property is unsubstantiated and leaves much to be desired. This case sprung from a case of
specific performance initiated by petitioner who has the burden to prove that the case should be
spared from the application of the technical terms in the sale and disposition of assets under
privatization. Petitioner failed to discharge the burden.

It appears in the case at bar that petitioners construction of the letter of February 22, 1993
that his assent to the suggested indicative price of P21,000,000.00 converted it as the price certain,
thus giving rise to a perfected contract of sale
[34]
is petitioners own subjective understanding. As
such, it is not shared by respondent. Under American jurisprudence, mutual assent is judged by
an objective standard, looking to the express words the parties used in the contract.
[35]
Under the
objective theory of contract, understandings and beliefs are effective only if shared.
[36]
Based on the
objective manifestations of the parties in the case at bar, there was no meeting of the minds. That
the letter constituted a definite, complete and certain offer is the subjective belief of petitioner
alone. The letter in question is a mere evidence of a memorialization of inconclusive negotiations, or
a mere agreement to agree, in which material term is left for future negotiations.
[37]
It is a mere
evidence of the parties preliminary transactions which did not crystallize into a perfected contract.
Preliminary negotiations or an agreement still involving future negotiations is not the functional
equivalent of a valid, subsisting agreement.
[38]
For a valid contract to have been created, the parties
must have progressed beyond this stage of imperfect negotiation. But as the records would show,
the parties are yet undergoing the preliminary steps towards the formation of a valid contract.
Having thus established that there is no perfected contract of sale in the case at bar, the issue on
estoppel is now moot and academic.

Finally, petitioner contends that the appellate court should have dismissed the appeal of
respondent on the procedural technicality that the Appellants Brief does not have page references
to the record in its Statement of Facts, Statement of the Case and Arguments in the Appellants
Brief.
[39]


We find no reason to reverse the ruling of the appellate court which has judiciously explained
why the appeal should not be dismissed on this ground, viz.:
x x x x Procedural rules are required to be followed as a general rule, but they
may be relaxed to relieve a litigant of an injustice not commensurate with the degree
of his noncompliance with the procedure required. In this case, [respondents] brief
does not substantially violate our procedural rules. Besides, the merits of its arguments
will show that the trial court seriously erred in issuing its assailed decision.
[40]



IN VIEW WHEREOF, the assailed Decision and Resolution of the Court of Appeals in CA-G.R. CV
No. 49227 dated January 30, 2003 and July 31, 2003, respectively, are AFFIRMED.
.