LIMKETKAI SONS MILLING INC v. CA DEC 1, 1995 FACTS: a. PH Remnants Co.

Inc constituted BPI as its trustee to manage, administer, and SELL its real estate property. b. BPI gave Pedro Revilla a FORMAL AUTHORITY to sell the DISPUTED LOT (33,056 square meter at Barrio Bagong Ilog, Pasig, Metro Manila) c. Revilla contacted ALFONSO LIM (petitioner company) who AGREED to buy the land. d. Revilla INFORMED BPI. e. Lim and Limketkai went to BPI to CONFIRM THE SALE. f. They were entertained by VP Albano and Asst. VP Aromin. g. Parties agreed that the lot would be sold at P1,000/sq meter to be paid in CASH. h. Lim asked if it was POSSIBLE to pay on terms. i. Albano and Aromin stated that there was no harm in TRYING to ask for payment on terms. j. It was the understanding however, that should payment be disapproved, then the price shall be paid in cash. k. 2-3 days later, LIM learned that its offer to pay on terms had been FROZEN. l. Lim went to BPI and TENDERED RULL payment of Php 33,056,000.00 to Albano. m. Albano refused and stated that the authority to sell that particular land in Pasig had been WITHDRAWN from his unit. n. Hence, action for specific performance was filed. o. BPI admitted that the land was sold to National Bookstore. p. RTC there was a perfected contract q. CA there was no perfected contract ISSUE: WON there was a perfected contract between LIMKETKAI and BPI. HELD: There is a perfected contract between LIMKETKAI and BPI. Respondents contention is that there was no perfected contract because petitioners request to pay on terms constituted a COUNTER-OFFER and that negotiations were still in progress at that point. However, there was a mutual agreement that if the proposed payment on terms will not be approved by our trust committee, LIMKETKAI should pay in cash, the amount was NO LONGER subject to the approval or disapproval of the committee, it is only the terms. The negotiation or preparation stage started with the authority given by Philippine Remnants to BPI to sell the lot, followed by (a) the authority given by BPI and confirmed by Philippine Remnants to broker Revilla to sell the property, (b) the offer to sell to Limketkai, (c) the inspection of the property and finally (d) the negotiations with Aromin and Albano at the BPI offices. The perfection of the contract took place when Aromin and Albano, acting for BPI, agreed to sell and Alfonso Lim with Albino Limketkai, acting for petitioner Limketkai, agreed to buy the disputed lot at P1,000.00 per square meter. Aside from this there was the earlier agreement between petitioner and the authorized broker. There was a concurrence of offer and acceptance, on the object, and on the cause thereof. The phases that a contract goes through may be summarized as follows: a. preparation, conception or generation, which is the period of negotiation and bargaining, ending at the moment of agreement of the parties;

b. perfection or birth of the contract, which is the moment when the parties come to agree on the terms of the contract; and c. consummation or death, which is the fulfillment or performance of the terms agreed upon in the contract It is true that an acceptance may contain a request for certain changes in the terms of the offer and yet be a binding acceptance. So long as it is clear that the meaning of the acceptance is positively and unequivocally to accept the offer, whether such request is granted or not, a contract is formed. SC: Prescinding from the above, we rule that there was a perfected contract between BPI and petitioner Limketkai; that the BPI officials who transacted with petitioner had full authority to bind the bank; that the evidence supporting the sale is competent and admissible; and that the sale of the lot to NBS during the trial of the case was characterized by bad faith.