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FIRST DIVISION

DECISION

sion2 of the Regional Trial Court (RTC), Branch 71, Pasig City, in Civil Case No. 58551, and its Resolution3 denying the motion for reconsideration filed by petitioner Manila Me

The Antecedents

vered by Transfer Certificate of Title (TCT) No. 332098 of the Registry of Deeds of Rizal. To secure a P900,000.00 loan it had obtained from respondent Philippine National B
31, 1981, petitioner secured another loan of P653,000.00 from respondent PNB, payable in quarterly installments of P32,650.00, plus interests and other charges.5

rty sold at public auction for P911,532.21, petitioner's outstanding obligation to respondent PNB as of June 30, 1982, 6 plus interests and attorney's fees.

e winning bidder for P1,000,000.00. The Certificate of Sale7 issued in its favor was registered with the Office of the Register of Deeds of Rizal, and was annotated at the dorsal

e the property.8 In its reply dated August 30, 1983, respondent PNB informed petitioner that the request had been referred to its Pasay City Branch for appropriate action and r

eem/repurchase the property on installment basis. It reiterated its request to repurchase the property on installment.11 Meanwhile, some PNB Pasay City Branch personnel info

favor of respondent PNB.13 Petitioner's offers had not yet been acted upon by respondent PNB.

er's obligation amounted to P1,574,560.47. This included the bid price of P1,056,924.50, interest, advances of insurance premiums, advances on realty taxes, registration exp
for P1,574,560.00. In a letter dated November 14, 1984, the PNB management informed petitioner that it was rejecting the offer and the recommendation of the SAMD. It wa
interested buyers.16

a reconsideration. Respondent PNB replied in a letter dated December 28, 1984, wherein it reiterated its proposal that petitioner purchase the property for P2,660,000.00. PN
at it had already agreed to the SAMD's offer to purchase the property for P1,574,560.47, and that was why it had paid P725,000.00. Petitioner warned respondent PNB that it w

perty, but for P1,931,389.53 in cash less the P725,000.00 already deposited with it.19 On page two of the letter was a space above the typewritten name of petitioner's Preside
fer to repurchase.

y for P1,574,560.47, and that since its P725,000.00 downpayment had been accepted, respondent PNB was proscribed from increasing the purchase price of the property. 21 P

y of Title, or Specific Performance with Damages." To support its cause of action for specific performance, it alleged the following:

P725,000.00 for the redemption/repurchase price of P1,574,560.47 as approved by its SMAD and considering the reliance made by Manila Metal and the long time that has e
vantage of a condition which is entirely dependent upon its own will after accepting and benefiting from the substantial payment made by Manila Metal.

cannot take advantage of its own delay and long inaction in demanding a higher amount based on unilateral computation of interest rate without the consent of Manila Metal.

d to engage the services of counsel at an agreed fee of P50,000.00 and to incur litigation expenses of at least P30,000.00, which the defendant PNB should be condemned to

ched reputation for which defendant PNB is liable for moral damages of at least P50,000.00.

ould be awarded in favor of the plaintiff by way of example or correction for the public good of at least P30,000.00.23

tion sale null and void.

ering the property described in paragraph 4 of the Complaint, to reinstate TCT No. 37025 in the name of Manila Metal and to cancel the annotation of the mortgage in question

raph 4 of this Complaint to the plaintiff Manila Metal.

the aggregate amount of not less than P80,000.00 as may be warranted by the evidence and fixed by this Honorable Court in the exercise of its sound discretion, and attorney

perty after the period to redeem had elapsed. It claimed that no contract of sale was perfected between it and petitioner after the period to redeem the property had expired.

es to the following:

y is still valid and legally enforceable.

ns set forth by the defendant in its letter dated June 4, 1985.

notice,27 but petitioners refused to do so.

B, in a letter dated April 13, 1993. According to it, the prevailing market value of the property was approximately P30,000,000.00, and as a matter of policy, it could not sell the

spondent PNB to refund the P725,000.00 deposit petitioner had made.32 The trial court ruled that there was no perfected contract of sale between the parties; hence, petitione
 hile petitioner had offered to repurchase the property per its letter of July 14, 1988, the amount of P643,422.34 was way below the P1,206,389.53 which respondent PNB had

OVING/ACCEPTING PLAINTIFF-APPELLANT'S OFFER TO PURCHASE THE SUBJECT PROPERTY IS NOT VALID AND ENFORCEABLE.

II

PLAINTIFF-APPELLANT AND DEFENDANT-APPELLEE.

III

HE SUBJECT PROPERTY WHEN IT FAILED TO CONFORM WITH CONDITIONS SET FORTH BY DEFENDANT-APPELLEE IN ITS LETTER DATED 4 JUNE 1985.

IV

H RENDERED IT DIFFICULT IF NOT IMPOSSIBLE FOR PLAINTIFF-APPELLANT TO COMPLETE THE BALANCE OF THEIR PURCHASE PRICE.

ANCELLATION OF SUBJECT CONTRACT OF REPURCHASE.

VI

DED REPURCHASE OFFER.

VII

VIII

DAMAGES, ATTOTRNEY'S FEES AND LITIGATION EXPENSES.33

s rights over the property covered by TCT No. 33099 and TCT No. 37025 in favor of Bayani Gabriel, one of its Directors.34 Thereafter, Bayani Gabriel executed a Deed of Ass
ynaldo Tolentino substituting petitioner MMCC, as plaintiff-appellant, and his motion to withdraw as intervenor.36

selling price proposed by respondent PNB (P1,931,389.53) since petitioner had kept on insisting that the selling price should be lowered to P1,574,560.47. Clearly therefore, t

made a counter-offer through its June 4, 1985 letter specifically on the selling price; petitioner did not agree to the counter-offer; and the negotiations did not prosper. Moreover

was presented to support it. Respondent PNB's letter dated June 30, 1988 cannot revive the failed negotiations between the parties. Respondent PNB merely asked petitione

TED CONTRACT OF SALE BETWEEN THE PETITIONER AND RESPONDENT.

725,000.00 PAID BY THE PETITIONER IS NOT AN EARNEST MONEY.

E PETITIONER-APPELLANT TO SIGNIFY ITS CONFORMITY TO THE TERMS CONTAINED IN PNB'S JUNE 4, 1985 LETTER MEANS THAT THERE WAS NO VALID AN

PPELLANT OF THE BALANCE OF THE OFFERED PRICE IN THE LETTER OF PNB DATED JUNE 4, 1985, WITHIN SIXTY (60) DAYS FROM NOTICE OF APPROVAL CO

LLANT DATED MARCH 18, 1993 AND JUNE 21, 1993, OFFERING TO BUY THE SUBJECT PROPERTY AT DIFFERENT AMOUNT WERE PROOF THAT THERE IS NO P

e property from respondent.

ceptance was made in its letter dated June 25, 1984; it then deposited P725,000.00 with the SAMD as partial payment, evidenced by Receipt No. 978194 which respondent h
erty. It claims that this was the suspensive condition, the fulfillment of which gave rise to the contract. Respondent could no longer unilaterally withdraw its offer to sell the prop
etitioner, conformably with Article 1159 of the New Civil Code.

rty for P1,574,560.00. Consequently, respondent could no longer validly make a counter-offer of P1,931,789.88 for the purchase of the property. It likewise maintains that, alth
ormaheco39 and Topacio v. Court of Appeals.40

ce as fixed by respondent within the 60-day period from notice was to protest respondent's breach of its obligation to petitioner. It did not amount to a rejection of respondent's

mpromise the pending lawsuit, they did not constitute separate offers to repurchase the property. Such offer to compromise should not be taken against it, in accordance with

he repurchase price of the property. All that transpired was an exchange of proposals and counter-proposals, nothing more. It insists that a definite agreement on the amount
which the obligation becomes effective. It clearly presupposes the existence of a valid and binding agreement, the effectivity of which is subordinated to its fulfillment. Since th

mply a recital of its total monetary claims against petitioner. Moreover, the amount stated therein could not likewise be considered as the counter-offer since as admitted by pe

Stipulation of Facts during the proceedings in the court a quo, the amount is merely an acknowledgment of the receipt of P725,000.00 as deposit to repurchase the property. T
val, it cannot be legally claimed that respondent is already bound by any contract of sale with petitioner.

ng, managing and preserving the properties and other special assets of PNB. The SAMD does not have the power to sell, encumber, dispose of, or otherwise alienate the asse
SAMD, or made it appear to petitioner that it represented itself as having such authority.

dition, among others, "that the selling price shall be the total bank's claim as of documentation date x x x payable in cash (P725,000.00 already deposited)

89.53 less deposit of P725,000.00, or P1,206,389.00. Furthermore, while respondent's Board of Directors accepted petitioner's offer to repurchase the property, the acceptan

The Ruling of the Court

er some service.41 Under Article 1318 of the New Civil Code, there is no contract unless the following requisites concur:

e which are to constitute the contract.42 Once perfected, they bind other contracting parties and the obligations arising therefrom have the form of law between the parties and

he other to pay therefor a price certain in money or its equivalent.44 The absence of any of the essential elements will negate the existence of a perfected contract of sale. As th

ecause it seriously affects the rights and obligations of the parties. Price is an essential element in the formation of a binding and enforceable contract of sale. The fixing of the

ithout acceptance of the other, there is no contract.47 When the contract of sale is not perfected, it cannot, as an independent source of obligation, serve as a binding juridical r
covering the period from the time the prospective contracting parties indicate interest in the contract to the time the contract is perfected; (2) perfection, which takes place upo
e, culminating in the extinguishment thereof.

egotiating party may stop the negotiation. At this stage, the offer may be withdrawn; the withdrawal is effective immediately after its manifestation. To convert the offer into a c

and clearly made and must be evidenced by some acts or conduct communicated to the offeror, it may be shown by acts, conduct, or words of the accepting party that clearly

is considered in law, a rejection of the original offer and an attempt to end the negotiation between the parties on a different basis.53 Consequently, when something is desired
uce consent or meeting of the minds.

ed for more time to redeem/repurchase the property under such terms and conditions agreed upon by the parties. 55 The request, which was made through a letter dated Augu

000.00);

PESOS (P450,000.00); and

t six months of the one year grave period requested for.57

offer to purchase the property. 59 There was no response to petitioner's letters dated February 10 and 15, 1984.

be considered an unqualified acceptance to petitioner's offer to purchase the property. The statement is but a computation of the amount which petitioner was obliged to pay i

or P1,574,560.47. Any acceptance by the SAMD of petitioner's offer would not bind respondent. As this Court ruled in AF Realty Development, Inc. vs. Diesehuan Freight Serv

d by the board of directors. Just as a natural person may authorize another to do certain acts in his behalf, so may the board of directors of a corporation validly delegate som
he rule is that the declarations of an individual director relating to the affairs of the corporation, but not in the course of, or connected with the performance of authorized duties

ts when authorized by a board resolution or its by-laws.61

yond the one-year period; it recommended that petitioner be allowed to redeem the property and pay P1,574,560.00 as the purchase price. Respondent later approved the rec
offer was qualified, hence can be at most considered as a counter-offer. If petitioner had accepted this counter-offer, a perfected contract of sale would have arisen; as it turns

sidered as proof of the perfection of a contract of sale under Article 1482 of the New Civil Code. The provision reads:

proof of the perfection of the contract.

Account showing MMCC's total liability to PNB as of June 25, 1984 to be P1,574,560.47 and recommended this amount as the repurchase price of the subject property.

000 was accepted by PNB on the condition that the purchase price is still subject to the approval of the PNB Board.62

d approve the recommendation of SAMD for respondent to accept petitioner's offer to purchase the property for P1,574,560.47. Unless and until the respondent accepted the

P1,931,389.53. However, this amounted to an amendment of respondent's qualified acceptance, or an amended counter-offer, because while the respondent lowered the purc

unt as of 5-31-85), payable in cash (P725,000.00 already deposited) within sixty (60) days from notice of approval;

th full knowledge of the nature and extent of said rights, interests and participation and waive your right to warranty against eviction.

s of documents and science stamps, transfer fees, etc., to be incurred in connection with the execution and registration of all covering documents shall be borne by you;
of the sale, if there are any;

ng your offer, your deposit shall be forfeited and the Bank is thenceforth authorized to sell the property to other interested parties.

the interest of the Bank.64

d respondent to reconsider its amended counter-offer. Petitioner's request was ultimately rejected and respondent offered to refund its P725,000.00 deposit.

Elvi-John S. Asuncion, concurring; rollo, pp. 47-60.

urora Santiago-Lagman, concurring; id. at 62-64.

 nca, Mandaluyong, Metro Manila, originally registered in the name of Manila Metal Container Corporation (MMCC) under Transfer Certificate of Title No. 332098 of the Regist

udicial foreclosure and sale of the subject property under Act No. 3135, as amended, and Presidential Decree No. 385 to satisfy the mortgage indebtedness of MMCC in the am

NB as the sole and highest bidder for P1,056,924.40.

property by giving them more time to do so under terms and conditions which may be agreed upon.

andaluyong issued TCT No. 43792 in the name of PNB.

Account showing MMCC's total liability to PNB as of June 25, 1984 to be P1,574,560.47 and recommended this amount as the repurchase price of the subject property.

00 was accepted by PNB on the condition that the purchase price is still subject to the approval of the PNB Board.

y informed MMCC President Pablo Gabriel that MMCC's offer to repurchase the bank acquired Mandaluyong property was returned by top management as the offered price w

approved by the PNB Board, subject to the condition among others, that the selling price shall be the total banks claim as of documentation date payable within sixty (60) days

nded repurchase offer. Otherwise, PNB will be constrained to cancel the approved sale in favor of MMCC and advertise the property for sale.

2.34, which request was denied by PNB in its letter dated August 1, 1989. PNB then informed MMCC that it is refunding the deposit of P725,000 at any time during banking ho

Gabriel requested once again to buy back the subject property. In reply, PNB informed the Gabriels in a letter dated June 18, 1992 that it can recommend the sale of the prop

C in its letter dated April 13, 1993 that, as a matter of policy, all assets acquired by the bank thru foreclosure sale can only be disposed of at market value or banks claim whic

tter dated September 13, 1993, reiterating PNB's policy that sale of foreclosed assets shall be based on the current market value of the property, and that the offer is too low.

ancelled and/or withdrawn thereby leaving the claims for specific performance and damages as the remaining issues to be resolved in the instant case.
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