ANTONIO S. LIM, JR.

, represented by his attorney-in-

fact, PAZ S. LIM, petitioner vs. I!TOR ". SAN
and #LIN$O LO, respondents.
$ # ! I S I O N
%NAR#S-SANTIA&O, J.'
This is a petition for review on certiorari of the decision
[1]
and
the resolution
[2]
of the Court of Appeals in CA-G.R. CV No. 1!"#
pro$ul%ated on &a' () 2**+ and Au%ust 1+) 2**+) respectivel')
which affir$ed the ,ul' 2() 2**+ decision
[+]
of the Re%ional Trial
Court of -avao Cit') .ranch 12 dis$issin% the co$plaint filed /'
petitioner.
0etitioner Antonio 1. 2i$) ,r.) represented /' his $other) 0a3
1. 2i$) as attorne'-in-fact) filed a co$plaint
["]
/efore the Re%ional
Trial Court of -avao Cit' see4in% the annul$ent of a -eed of
A/solute 1ale
[5]
involvin% a parcel of land purportedl' e6ecuted /'
0a3 1. 2i$ in favor of her /rother) respondent Victor 7. 1an.
8n the second a$ended co$plaint dated &a' 2() 1!!+)
petitioner alle%ed the followin%9
x x x x x x x x x
4. That plaintiff is an owner of a parcel of land situated at Bajada,
Davao City, containing an area of 1,763 square meters, more or less,
covered by Transfer Certificate of Title No. T-11072 of the Registry of
Deeds of Davao City, x x x;
4.A. That constructed on the afore-cited parcel of land is a fourteen (14)
doors commercial building, and that defendant is paying an annual lease
of ONE HUNDRED THOUSAND (P100,000.00) PESOS to the herein
plaintiff.
5. On May 29, 1991, the herein defendant taking undue advantage of
the depressed mental state of plaintiffs Attorney-in-Fact, brought about
by the demise of her late husband, Dr. Antonio A. Lim Sr., caused some
papers for her to sign, which later turn (sic) out to be an Absolute Deed of
Sale, x x x;
6. That the signature of the Attorney-in-Fact in the aforecited Deed of
Absolute Sale was obtained through fraud and trickery employed by the
herein defendant and that she never appeared before the Notary Public,
who notarized the said deed;
7. That no consideration was ever paid, much less received by the
plaintiff or by his Attorney-in-Fact. Simply put, the Deed of Absolute
Sale was void ab initio for lack of consideration and for lack of a
valid consent;
8. After the signing of the aforecited Deed of Sale with its attendant
legal flaws and infirmities, plaintiffs Title was transferred in the name of
the defendant, Victor K. San, x x x;
9. Knowing that he is holding an infirmed Title, defendant, Victor K.
San is now in the process of selling the aforecited property including the
commercial building erected thereon to any third person; and that the
defendant had already caused the cancellation of the Mother Title No. T-
165010 by subdividing the same into eight (8) lots with eight (8) different
titles, as follows:
TCT NO. T-191255, T-191256, T-191257, T-191258, T-191259, T-
191260, T-191261, T-191262,
x x x x x x x x x.
[]
Respondent Victor 7. 1an denied all the alle%ations of the
petitioner. :e alle%ed that the parcel of land covered /' TCT No.
T-15*1* of the Re%istr' of -eeds of -avao Cit' and re%istered in
his na$e was validl' and re%ularl' issued. :e further clai$ed that
he does not have an' lease contract with the petitioner with
respect to the contested propert' and does not pa' an' $onthl'
rental over the sa$e. &oreover) respondent clai$ed that there was
full pa'$ent of the consideration of 02")"5*.** for the su/;ect
propert'.
Respondent <lindo 2o was i$pleaded as a co-defendant on
account of his purchase of one lot covered /' TCT No. T-1!122)
[(]
notwithstandin% the Notice of Adverse Clai$ and Lis
Pendens annotated on the title of the said parcel of land.
=n ,ul' 2() 1!!#) after trial on the $erits) the Re%ional Trial
Court of -avao Cit' rendered a decision dis$issin% the co$plaint.
[#]
0etitioner appealed to the Court of Appeals which affir$ed the
;ud%$ent of the trial court in toto. 0etitioner>s $otion for
reconsideration
[!]
was denied in a Resolution
[1*]
dated Au%ust 1+)
2**+.
:ence the present petition /ased on the followin% %rounds9
a) that the Court of Appeals erred in affirming the trial courts
judgment declaring that the petitioner failed to prove by clear
and convincing evidence that the signature of his attorney-in-fact
was obtained through fraud and trickery and that no
consideration was ever paid.
b) that the Court of Appeals erred in declaring that the medical
certificates issued by foreign medical institutions to prove Paz S.
Lim (sic) severe mental state of depression cannot be given
evidentiary weight considering that its due execution and
authenticity were not properly established.
[11]
0etitioner contends that the deed of sale should /e declared
void /ecause his consent to the sa$e was vitiated /' inti$idation
and that no consideration was paid for the su/;ect propert'.
Respondents) on the other hand) $aintain that the parties to the
deed of sale validl' entered into the sa$e? that 0a3 1. 2i$ freel'
and voluntaril' %ave her consent to the sale? and that she received
the consideration a%reed upon /' the parties.
After a careful review of the records of this case) we find no
co%ent reason to deviate fro$ the rulin%s of the court a quo and
the Court of Appeals.
A contract is a $eetin% of $inds /etween two persons where/'
one /inds hi$self) with respect to the other) to %ive so$ethin% or to
render so$e service.
[12]
8t has three essential ele$ents) or those
without which there can /e no contract @ consent) su/;ect $atter
and cause.
[1+]
A 4nowled%e of these essential ele$ents is $aterial
/ecause the perfection sta%e or the /irth of the contract onl'
occurs when the parties to a contract a%ree upon the essential
ele$ents of the sa$e.
[1"]
A contract of sale is consensual)
[15]
as such it is perfected /'
$ere consent.
[1]
Consent is essential for the e6istence of a
contract) and where it is wantin%) the contract is non-e6istent.
[1(]
Consent in contracts presupposes the followin% reAuisites9 B1C it
should /e intelli%ent or with an e6act notion of the $atter to which
it refers? B2C it should /e free? and B+C it should /e spontaneous.
8ntelli%ence in consent is vitiated /' error? freedo$ /' violence)
inti$idation or undue influence? and spontaneit' /' fraud.
[1#]
Thus) a
contract where consent is %iven throu%h $ista4e) violence)
inti$idation) undue influence or fraud is voida/le.
[1!]
Contrar' to the alle%ations of the petitioner that the consent of
his attorne'-in-fact to the deed of sale was vitiated) a perusal of the
records of this case showed that the petitioner failed to esta/lish
that violence) inti$idation and undue influence vitiated the consent
of 0a3 1. 2i$ to the deed of sale pertainin% to the su/;ect
propert'. 8n deter$inin% whether consent is vitiated /' the
circu$stances provided for in Article 1++* of the Civil Code of the
0hilippines) courts are %iven a wide latitude in wei%hin% the facts or
circu$stances in a %iven case and in decidin% in favor of what
the' /elieve to have actuall' occurred) considerin% the a%e)
ph'sical infir$it') intelli%ence) relationship and the conduct of the
parties at the ti$e of $a4in% the contract and su/seAuent thereto)
irrespective of whether the contract is in a pu/lic or private writin%.
[2*]
Dhile it is true that upon the death of her hus/and) -r. Antonio
T. 2i$) 1r.) on &a' 1#) 1!!*)
[21]
0a3 1. 2i$ returned to the
0hilippines and su/seAuentl' sta'ed at the house of the
respondent) such fact per se is not sufficient to esta/lish that the
latter e$plo'ed inti$idation) violence or undue influence upon the
for$er. -efect or lac4 of valid consent) in order to $a4e the
contract voida/le) $ust /e esta/lished /' full) clear and convincin%
evidence) and not $erel' /' a preponderance thereof.
[22]
0etitioner>s $ere alle%ations that respondent threatened his
$other with har$ if she will not si%n the contract failed to $easure
up to the 'ardstic4 of evidence reAuired) not onl' to prove vitiation
of consent) /ut also to overturn the presu$ption that private
transactions have /een fair and re%ular.
[2+]
0a3 1. 2i$>s /ehavior /elies the alle%ation that respondent
threatened to har$ her. The followin% testi$on' is enli%htenin%9
E Fou clai$ that 'our /rother) the defendant Victor 7. 1an
threatened to 4ill 'ou if 'ou will not cooperate 'ou recall havin%
$entioned that on directG
A DhenG
E 8s it not that 'ou $entioned on the direct that 'ou were threatened
/' 'our /rother Victor 1anG
A Fes) $an' ti$es he will not let $e leave.
E That was at the ti$e 'ou were then sta'in% with 'our /rother) the
defendant in this caseG
A Fes) sir.
E Dhen did 'ou leave 'our /rother in his residenceG
A =ne da' when he was out 8 thin4 in 1!!1) 8 snea4ed out of the
%ate and 8 saw $' cousin 2ucila) she said that we live near each
other and that 8 did not 4now that fro$ then on $' relatives ;ust
lived across the fence.
E 2et $e /e clarified) 'ou left 'our /rother>s house in late 1!!1G
A Fes) sir.
E After leavin% 'our /rother>s house late in 1!!1) where did 'ou
liveG
A Dith $' nephew Dillia$.
E Dhat is the co$plete na$e of this Dillia$G
A Dillia$ To$.
E Hp to the present 'ou are sta'in% with hi$G
A Fes) &arlene .a/ao was livin% downstairs.
E After leavin% 'our /rother>s house) did 'ou ever report this
incident wherein 'ou were threatened /' 'our /rother to the
policeG
A No) 8 ;ust told $' cousin and $' nephew) 8 a$ afraid to sta' there
lon%er.
E -id 'ou ever file a cri$inal case a%ainst 'our /rother for %rave
threats) he havin% alle%edl' threatened to 4ill 'ouG
A 8 a$ the /i% sister) how can 8 do that to $' own /rother) 8 a$ a
Christian.
E 8n other words) 'ou did not report this treat$ent /' 'our /rother to
the police nor filed an' cri$inal case a%ainst hi$ in Court even up
to the presentG
A Fes) sir.
[2"]
Dell-settled is the rule that the findin%s of facts and
assess$ent of credi/ilit' of witnesses is a $atter /est left to the
trial court /ecause of its uniAue position of havin% o/served that
elusive and inco$$unica/le evidence of the witnesses deport$ent
on the stand while testif'in%) which opportunit' is denied to the
appellate courts. =nl' the trial ;ud%e can o/serve the furtive
%lance) /lush of conscious sha$e) hesitation) flippant or sneerin%
tone) cal$ness) si%h or the scant or full reali3ation of an oath @ all
of which are useful for an accurate deter$ination of a witness>
honest' and sincerit'.
[25]
()#R#*OR#) /ased on the fore%oin%) the petition is
-<N8<-. The -ecision dated &a' () 2**+ and the Resolution
dated Au%ust 1+) 2**+ of the Court of Appeals affir$in% the
dis$issal of Civil Case No. 21)!2"-!+ /efore the Re%ional Trial
Court of -avao Cit') .ranch 12) is AII8R&<- in toto.
SO OR$#R#$.
Davide, Jr., C.J., (Chairman), Quisumbing and Carpio,
JJ., concur.
Azcuna, J., on leave.
&.R. No. +,-+,. October ,., ,../
S(#$IS) MAT!), A0, J1AN #NRI21#Z, R#N# $IZON, *RAN!IS!O
RAPA!ON, *I#L SANTOS, 0#T) *LOR#S, LAM0RTO $# LA #A,
&LORIA R#%#S, RO$RI&O ORTIZ, NI!ANOR #S!ALANT#, P#T#R
)O$&SON, SAM1#L PARTOSA, )#RMIN$A AS1N!ION, J1ANITO
)#RR#RA, JA!O01S NI!OLAAS, JOS#P) P#"#L)ARIN&
3no4 Representin5 hi6se7f 4itho8t co8rt sanction as 9JOOST
P#"#L)ARIN&:,9 MASSIMO ROSSI and #$ #NRI21#Z, petitioners)
vs.
!O1RT O* APP#ALS, ALS MANA&#M#NT ; $##LOPM#NT
!ORPORATION and ANTONIO ". LITONJ1A, respondents.
$ # ! I S I O N
TIN&A, J.:
0etitioners see4 a reversal of the twin rders
1
of the Court of Appeals dated
15 Nove$/er 1!!
2
and +1 ,anuar' 1!!()
+
in CA-G.R. CV No. +5##) entitled
JAL! "anagement et a#., v. !$edish "atch, A% et a#.J The appellate court
overturned the trial court>s rder
"
dis$issin% the respondents> co$plaint for
specific perfor$ance and re$anded the case to the trial court for further
proceedin%s.
1wedish &atch A. Bhereinafter 1&A.C is a corporation or%ani3ed under the
laws of 1weden not doin% /usiness in the 0hilippines. 1&A.) however) had
three su/sidiar' corporations in the 0hilippines) all or%ani3ed under 0hilippine
laws) to wit9 0hi$co 8ndustries) 8nc. B0hi$coC) 0rovident Tree Iar$s) 8nc.) and
=TTK2ouie B0hils.C) 8nc.
1o$eti$e in 1!##) 1T=RA) the then parent co$pan' of 1&A.) decided to
sell 1&A. of 1weden and the latter>s worldwide $atch) li%hter and shavin%
products operation to <e$land &ana%e$ent 1ervices) now 4nown as
1wedish &atch NV of Netherlands) B1&NVC) a corporation or%ani3ed and
e6istin% under the laws of Netherlands. 1T=RA) however) retained for itself
the pac4a%in% /usiness.
1&NV initiated steps to sell the worldwide $atch and li%hter /usinesses while
retainin% for itself the shavin% /usiness. 1&NV adopted a two-pron%ed
strate%') the first /ein% to sell its shares in 0hi$co 8ndustries) 8nc. and a
$atch co$pan' in .ra3il) which proposed sale would stave-off defaults in the
loan covenants of 1&NV with its s'ndicate of lenders. The other $ove was to
sell at once or in one pac4a%e all the 1&NV co$panies worldwide which were
en%a%ed in $atch and li%hter operations thru a %lo/al deal Bhereinafter) %lo/al
dealC.
<d <nriAue3 B<nriAue3C) Vice-0resident of 1wedish &atch 1ociedad
Anoni$as B1&1ACLthe $ana%e$ent co$pan' of the 1wedish &atch %roup
Lwas co$$issioned and %ranted full powers to ne%otiate /' 1&NV) with the
resultin% transaction) however) $ade su/;ect to final approval /' the /oard.
<nriAue3 was held under strict instructions that the sale of 0hi$co shares
should /e e6ecuted on or /efore +* ,une 1!!*) in view of the ti%ht loan
covenants of 1&NV. <nriAue3 ca$e to the 0hilippines in Nove$/er 1!#! and
infor$ed the 0hilippine financial and /usiness circles that the 0hi$co shares
were for sale.
1everal interested parties tendered offers to acAuire the 0hi$co shares)
a$on% who$ were the AI0 Retire$ent and 1eparation .enefits 1'ste$)
herein respondent A21 &ana%e$ent M -evelop$ent Corporation and
respondent Antonio 2iton;ua B2iton;uaC) the president and %eneral $ana%er of
A21.
8n his letter dated + Nove$/er 1!#!) 2iton;ua su/$itted to 1&A. a fir$ offer
to /u' all of the latter>s shares in 0hi$co and all of 0hi$co>s shares in
0rovident Tree Iar$) 8nc. and =TTK2ouie B0hils.C) 8nc. for the su$
of0(5*)***)***.**.
5
Throu%h its Chief <6ecutive =fficer) &assi$o Rossi BRossiC) 1&A.) in its
letter dated 1 -ece$/er 1!#!) than4ed respondents for their interest in the
0hi$co shares. Rossi infor$ed respondents that their price offer was /elow
their e6pectations /ut ur%ed the$ to underta4e a co$prehensive review and
anal'sis of the value and profit potentials of the 0hi$co shares) with the
assurance that respondents would en;o' a certain priorit' althou%h several
parties had indicated their interest to /u' the shares.

Thereafter) an e6chan%e of correspondence ensued /etween petitioners and

respondents re%ardin% the pro;ected sale of the 0hi$co shares. 8n his letter
dated 21 &a' 1!!*) 2iton;ua offered to /u' the disputed shares) e6cludin% the
li%hter division for H1N+*. $illion) which per another letter of the sa$e date
was increased to H1N+ $illion.
(
2iton;ua stressed that the /id a$ount could
/e ad;usted su/;ect to availa/ilit' of additional infor$ation and audit
verification of the co$pan' finances.
Respondin% to 2iton;ua>s offer) Rossi sent his letter dated 11 ,une 1!!*)
infor$in% the for$er that A21 should underta4e a due dili%ence process or
pre-acAuisition audit and review of the draft contract for the &atch and
Iorestr' activities of 0hi$co at A21> convenience. :owever) Rossi $ade it
clear that at the co$pletion of the due dili%ence process) A21 should su/$it
its final offer in H1 dollar ter$s not later than +* ,une 1!!*) for the shares of
1&A. correspondin% to ninet'-si6 percent B!OC of the &atch and Iorestr'
activities of 0hi$co. Rossi added that in case the J%lo/al dealJ presentl'
under ne%otiation for the 1wedish &atch 2i%hts Group would $ateriali3e)
1&A. would rei$/urse up to H1N2*)***.** of A21> costs related to the due
dili%ence process.
#
2iton;ua in a letter dated 1# ,une 1!!*) e6pressed disappoint$ent at the
apparent chan%e in 1&A.>s approach to the /iddin% process. :e pointed out
that in their " ,une 1!!* $eetin%) he was advised that one final /idder would
/e selected fro$ a$on% the four contendin% %roups as of that date and that
the decision would /e $ade /' ,une 1!!*. :e critici3ed 1&A.>s decision to
accept a new /idder who was not a$on% those who participated in the 25
&a' 1!!* /iddin%. :e infor$ed Rossi that it $a' not /e possi/le for the$ to
su/$it their final /id on +* ,une 1!!*) citin% the advice to hi$ of the auditin%
fir$ that the financial state$ents would not /e co$pleted until the end of ,ul'.
2iton;ua added that he would indicate in their final offer $ore specific details of
the pa'$ent $echanics and consider the possi/ilit' of si%nin% a conditional
sale at that ti$e.
!
Two da's prior to the deadline for su/$ission of the final /id) 2iton;ua a%ain
advised Rossi that the' would /e una/le to su/$it the final offer /' +* ,une
1!!*) considerin% that the acAuisition audit of 0hi$co and the review of the
draft a%ree$ents had not 'et /een co$pleted. :e said) however) that the'
would /e a/le to finali3e their /id on 1( ,ul' 1!!* and that in case their /id
would turn out /etter than an' other proponent) the' would re$it pa'$ent
within ten B1*C da's fro$ the e6ecution of the contracts.
1*
<nriAue3 sent notice to 2iton;ua that the' would /e constrained to entertain
/ids fro$ other parties in view of 2iton;ua>s failure to $a4e a fir$ co$$it$ent
for the shares of 1wedish &atch in 0hi$co /' +* ,une 1!!*.
11
8n a letter dated + ,ul' 1!!*) Rossi infor$ed 2iton;ua that on 2 ,ul' 1!!*) the'
si%ned a conditional contract with a local %roup for the disposal of 0hi$co. :e
told 2iton;ua that his /id would no lon%er /e considered unless the local %roup
would fail to consu$$ate the transaction on or /efore 15 1epte$/er1!!*.
12
Apparentl' ir4ed /' 1&A.>s decision to ;un4 his /id) 2iton;ua pro$ptl'
responded /' letter dated " ,ul' 1!!*. Contrar' to his prior $anifestations) he
asserted that) for all intents and purposes) the H1N+ $illion /id which he
su/$itted on 21 &a' 1!!* was their final /id /ased on the financial
state$ents for the 'ear 1!#!. :e pointed out that the' su/$itted the /est /id
and the' were alread' finali3in% the ter$s of the sale. :e stressed that the'
were fir$l' co$$itted to their /id of H1N+ $illion and if ever there would /e
ad;ust$ents in the /id a$ount) the ad;ust$ents were /rou%ht a/out /'
1&A.>s su/seAuent disclosures and validated accounts) such as the aspect
that onl' ninet'-si6 percent B!OC of 0hi$co shares was actuall' /ein% sold
and not one-hundred percent B1**OC.
1+
&ore than two $onths fro$ receipt of 2iton;ua>s last letter) <nriAue3 sent a fa6
co$$unication to the for$er) advisin% hi$ that the proposed sale of 1&A.>s
shares in 0hi$co with local /u'ers did not $ateriali3e. <nriAue3 then invited
2iton;ua to resu$e ne%otiations with 1&A. for the sale of 0hi$co shares. :e
indicated that 1&A. would /e prepared to ne%otiate with A21 on an e6clusive
/asis for a period of fifteen B15C da's fro$ 2 1epte$/er 1!!* su/;ect to the
ter$s contained in the letter. Additionall') <nriAue3 clarified that if the sale
would not /e co$pleted at the end of the fifteen B15C-da' period) 1&A. would
enter into ne%otiations with other /u'ers.
1"
1hortl' thereafter) 2iton;ua sent a letter e6pressin% his o/;ections to the totall'
new set of ter$s and conditions for the sale of the 0hi$co shares. :e
e$phasi3ed that the new offer constituted an atte$pt to reopen the alread'
perfected contract of sale of the shares in his favor. :e inti$ated that he could
not accept the new ter$s and conditions contained therein.
15
=n 1" -ece$/er 1!!*) respondents) as plaintiffs) filed /efore the Re%ional
Trial Court BRTCC of 0asi% a co$plaint for specific perfor$ance with da$a%es)
with a pra'er for the issuance of a writ of preli$inar' in;unction) a%ainst
defendants) now petitioners. The individual defendants were sued in their
respective capacities as officers of the corporations or entities involved in the
a/orted transaction.
Aside fro$ the aver$ents related to their principal cause of action for specific
perfor$ance) respondents alle%ed that the 0hi$co $ana%e$ent) in utter /ad
faith) induced 1&A. to violate its contract with respondents. The' contended
that the 0hi$co $ana%e$ent too4 an interest in acAuirin% for itself the
0hi$co shares and that petitioners conspired to thwart the closin% of such
sale /' interposin% various o/stacles to the co$pletion of the acAuisition
audit.
1
Respondents clai$ed that the 0hi$co $ana%e$ent $aliciousl' and
deli/eratel' dela'ed the deliver' of docu$ents to 2a'a &ana/at 1al%ado M
Co. which prevented the$ fro$ co$pletin% the acAuisition audit in ti$e for the
deadline on +* ,une 1!!* set /' petitioners.
1(
Respondents added that
1&A.>s refusal to consu$$ate the perfected sale of the 0hi$co shares
a$ounted to an a/use of ri%ht and constituted conduct which is contrar' to
law) $orals) %ood custo$s and pu/lic polic'.
1#
Respondents pra'ed that petitioners /e en;oined fro$ sellin% or transferrin%
the 0hi$co shares) or otherwise i$ple$entin% the sale or transfer thereof) in
favor of an' person or entit' other than respondents) and that an' such sale
to third parties /e annulled and set aside. Respondents also as4ed that
petitioners /e ordered to e6ecute all docu$ents or instru$ents and perfor$
all acts necessar' to consu$$ate the sales a%ree$ent in their favor.
Traversin% the co$plaint) petitioners alle%ed that respondents have no cause
of action) contendin% that no perfected contract) whether ver/al or written)
e6isted /etween the$. 0etitioners added that respondents> cause of action) if
an') was /arred /' the 1tatute of Irauds since there was no written
instru$ent or docu$ent evidencin% the alle%ed sale of the 0hi$co shares to
respondents.
0etitioners filed a $otion for a preli$inar' hearin% of their defense of /ar /'
the 1tatute of Irauds) which the trial court %ranted. .oth parties a%reed to
adopt as their evidence in support of or a%ainst the $otion to dis$iss) as the
case $a' /e) the evidence which the' adduced in support of their respective
positions on the writ of preli$inar' in;unction incident.
8n its rder dated 1( April 1!!1) the RTC dis$issed respondents>
co$plaint.
1!
8t ruled that there was no perfected contract of sale /etween
petitioners and respondents. The court a quo said that the letter dated 11
,une 1!!*) relied upon /' respondents) showed that petitioners did not
accept the /id offer of respondents as the letter was a $ere invitation for
respondents to conduct a due dili%ence process or pre-acAuisition audit of
0hi$co>s $atch and forestr' operations to ena/le the$ to su/$it their final
offer on +* ,une 1!!*. Assu$in% that respondent>s /id was favored /' an oral
acceptance $ade in private /' officers of 1&A.) the trial court noted) such
acceptance was $erel' preparator' to a for$al acceptance /' the 1&A.L
the acceptance that would eventuall' lead to the e6ecution and si%nin% of the
contract of sale. &oreover) the court noted that respondents failed to su/$it
their final /id on the deadline set /' petitioners.
Respondents appealed to the Court of Appeals) assi%nin% the followin% errors9
A. T:< TR8A2 C=HRT <PC<<-<- 8T1 AHT:=R8TF AN- ,HR81-8CT8=N
D:<N 8T <RR<- 0R=C<-HRA22F 8N &=TH 0R=08= BsicC -81&8118NG
T:< C=&02A8NT 8N 8T1 <NT8R<TF I=R J2AC7 =I A VA28- CAH1< =I
ACT8=NJ D8T:=HT T:< .<N<I8T =I A IH22-.2=DN TR8A2 AN- =N T:<
&<R< &=T8=N T= -81&811.
.. T:< TR8A2 C=HRT <RR<- 8N 8GN=R8NG 02A8NT8II-A00<22ANT1>
CAH1< =I ACT8=N .A1<- =N T=RT D:8C:) :AV8NG .<<N
1HII8C8<NT2F 02<A-<-) 8N-<0<N-<NT2F DARRANT<- A IH22-
.2=DN TR8A2.
C. T:< TR8A2 C=HRT <RR<- 8N 8GN=R8NG 02A8NT8II1-A00<22ANT1>
CAH1< =I ACT8=N .A1<- =N 0R=&811=RF <1T=00<2 D:8C:)
:AV8NG .<<N 1HII8C8<NT2F 02<A-<-) DARRANT<- A IH22-.2=DN
TR8A2) 8N-<0<N-<NT2F I=R T:< =T:<R CAH1<1 =I ACT8=N.
-. T:< TR8A2 C=HRT ,H-G< <RR<- 8N I=R1D<AR8NG ,H-8C8A2
=.,<CT8V8TF T= IAV=R -<I<N-ANT1-A00<22<<1 .F &A78NG
HNI=HN-<- I8N-8NG1) A22 8N V8=2AT8=N =I 02A8NT8II1-
A00<22ANT1> R8G:T T= -H< 0R=C<11.
2*
After assessin% the respective ar%u$ents of the parties) the Court of Appeals
reversed the trial court>s decision. 8t ruled that the series of written
co$$unications /etween petitioners and respondents collectivel' constitute a
sufficient $e$orandu$ of their a%ree$ent under Article 1"*+ of the Civil
Code? thus) respondents> co$plaint should not have /een dis$issed on the
%round that it was unenforcea/le under the 1tatute of Irauds. The appellate
court opined that an' docu$ent or writin%) whether for$al or infor$al) written
either for the purpose of furnishin% evidence of the contract or for another
purpose which satisfies all the 1tatute>s reAuire$ents as to contents and
si%nature would /e
sufficient? and) that two or $ore writin%s properl' connected could /e
considered to%ether. The appellate court concluded that the letters e6chan%ed
/' and /etween the parties) ta4en to%ether) were sufficient to esta/lish that an
a%ree$ent to sell the disputed shares to respondents was reached.
The Court of Appeals clarified) however) that /' reversin% the appealed
decision it was not there/' declarin% that respondents are entitled to the
reliefs pra'ed for in their co$plaint) /ut onl' that the case should not have
/een dis$issed on the %round of unenforcea/ilit' under the 1tatute of Irauds.
8t ordered the re$and of the case to the trial court for further proceedin%s.
:ence) this petition.
0etitioners ar%ue that the Court of Appeals erred in failin% to consider that the
1tatute of Irauds reAuires not ;ust the e6istence of an' note or $e$orandu$
/ut that such note or $e$orandu$ should evidence an a%ree$ent to sell?
and) that in this case) there was no word) phrase) or state$ent in the letters
e6chan%ed /etween the two parties to show or even i$pl' that an a%ree$ent
had /een reached for the sale of the shares to respondent.
0etitioners stress that respondent 2iton;ua $ade it clear in his letters that the
Auoted prices were $erel' tentative and still su/;ect to further ne%otiations
/etween hi$ and the seller. The' point out that there was no $eetin% of the
$inds on the essential ter$s and conditions of the sale /ecause 1&A. did
not accept respondents> offer that consideration would /e paid in 0hilippine
pesos. &oreover) 2iton;ua si%nified their ina/ilit' to su/$it their final /id on +*
,une 1!!*) at the sa$e ti$e statin% that the /road ter$s and conditions
descri/ed in their $eetin% were inadeAuate for the$ to $a4e a response at
that ti$e so $uch so that he would have to await the correspondin% specifics.
0etitioners ar%ue that the fore%oin% circu$stances prove that the' failed to
reach an a%ree$ent on the sale of the 0hi$co shares.
8n their Comment) respondents $aintain that the Court of Appeals correctl'
ruled that the 1tatute of Irauds does not appl' to the instant case.
Respondents assert that the sale of the su/;ect shares to the$ was perfected
as shown /' the followin% circu$stances) na$el'9 petitioners assured the$
that should the' increase their /id) the sale would /e awarded to the$ and
that the' did in fact increase their previous /id of H1N+*. $illion to H1N+
$illion? petitioners orall' accepted their revised offer and the acceptance was
rela'ed to the$ /' Rene -i3on? petitioners directed the$ to proceed with the
acAuisition audit and to su/$it a co$fort letter fro$ the Hnited Coconut
0lanters> .an4 BHC0.C? petitioner corporation confir$ed its previous ver/al
acceptance of their offer in a letter dated 11 ,une 1!!*? with the prior approval
of petitioners) respondents en%a%ed the services of 2a'a) &ana/at) 1al%ado
M Co.) an independent auditin% fir$) to i$$ediatel' proceed with the
acAuisition audit? and) petitioner corporation reiterated its co$$it$ent to /e
/ound /' the result of the acAuisition audit and
pro$ised to rei$/urse respondents> cost to the e6tent of H1N2*)***.**. All
these incidents) accordin% to respondents) overwhel$in%l' prove that the
contract of sale of the 0hi$co shares was perfected.
Iurther) respondents ar%ued that there was partial perfor$ance of the
perfected contract on their part. The' alle%ed that with the prior approval of
petitioners) the' en%a%ed the services of 2a'a) &ana/at) 1al%ado M Co. to
conduct the acAuisition audit. The' averred that petitioners a%reed to /e
/ound /' the results of the audit and offered to rei$/urse the costs thereof to
the e6tent of H1N2*)***.**. Respondents added that in co$pliance with their
o/li%ations under the contract) the' have su/$itted a co$fort letter fro$
HC0. to show petitioners that the /an4 was willin% to finance the acAuisition
of the 0hi$co shares.
21
The /asic issues to /e resolved are9 B1C whether the appellate court erred in
reversin% the trial court>s decision dis$issin% the co$plaint for /ein%
unenforcea/le under the 1tatute of Irauds? and B2C whether there was a
perfected contract of sale /etween petitioners and respondents with respect
to the 0hi$co shares.
The 1tatute of Irauds e$/odied in Article 1"*+) para%raph B2C) of the Civil
Code
22
reAuires certain contracts enu$erated therein to /e evidenced /'
so$e note or $e$orandu$ in order to /e enforcea/le. The ter$ J1tatute of
IraudsJ is descriptive of statutes which reAuire certain classes of contracts to
/e in writin%. The 1tatute does not deprive the parties of the ri%ht to contract
with respect to the $atters therein involved) /ut $erel' re%ulates the
for$alities
of the contract necessar' to render it enforcea/le.
2+
<vidence of the
a%ree$ent cannot /e received without the writin% or a secondar' evidence of
its contents.
The 1tatute) however) si$pl' provides the $ethod /' which the contracts
enu$erated therein $a' /e proved /ut does not declare the$ invalid /ecause
the' are not reduced to writin%. .' law) contracts are o/li%ator' in whatever
for$ the' $a' have /een entered into) provided all the essential reAuisites for
their validit' are present. :owever) when the law reAuires that a contract /e in
so$e for$ in order that it $a' /e valid or enforcea/le) or that a contract /e
proved in a certain wa') that reAuire$ent is a/solute and
indispensa/le.
2"
ConseAuentl') the effect of non-co$pliance with the
reAuire$ent of the 1tatute is si$pl' that no action can /e enforced unless the
reAuire$ent is co$plied with.
25
Clearl') the for$ reAuired is for evidentiar'
purposes onl'. :ence) if the parties per$it a contract to /e proved) without
an' o/;ection) it is then ;ust as /indin% as if the 1tatute has /een co$plied
with.
2
The purpose of the 1tatute is to prevent fraud and per;ur' in the enforce$ent
of o/li%ations dependin% for their evidence on the unassisted $e$or' of
witnesses) /' reAuirin% certain enu$erated contracts and transactions to /e
evidenced /' a writin% si%ned /' the part' to /e char%ed.
2(
:owever) for a note or $e$orandu$ to satisf' the 1tatute) it $ust /e
co$plete in itself and cannot rest partl' in writin% and partl' in parol. The note
or $e$orandu$ $ust contain the na$es of the parties) the ter$s and
conditions of the contract) and a description of the propert' sufficient to render
it capa/le of identification.
2#
1uch note or $e$orandu$ $ust contain the
essential ele$ents of the contract e6pressed with certaint' that $a' /e
ascertained fro$ the note or $e$orandu$ itself) or so$e other writin% to
which it refers or within which it is connected) without resortin% to parol
evidence.
2!
Contrar' to the Court of Appeals> conclusion) the e6chan%e of correspondence
/etween the parties hardl' constitutes the note or $e$orandu$ within the
conte6t of Article 1"*+ of the Civil Code. Rossi>s letter dated 11 ,une 1!!*)
heavil' relied upon /' respondents) is not co$plete in itself. Iirst) it does not
indicate at what price the shares were /ein% sold. 8n para%raph B5C of the
letter) respondents were supposed to su/$it their final offer in H.1. dollar
ter$s) at that after the co$pletion of the due dili%ence process. The
para%raph undou/tedl' proves that there was as 'et no definite a%ree$ent as
to the price. 1econd) the letter does not state the $ode of pa'$ent of the
price. 8n fact) 2iton;ua was supposed to indicate in his final offer how and
where pa'$ent for the shares was planned to /e $ade.
+*
<videntl') the trial court>s dis$issal of the co$plaint on the %round of
unenforcea/ilit' under the 1tatute of Irauds is warranted.
+1
<ven if we were to consider the letters /etween the parties as a sufficient
$e$orandu$ for purposes of ta4in% the case out of the operation of the
1tatute the action for specific perfor$ance would still fail.
A contract is defined as a ;uridical convention $anifested in le%al for$) /'
virtue of which one or $ore persons /ind the$selves in favor of another) or
others) or reciprocall') to the fulfill$ent of a prestation to %ive) to do) or not to
do.
+2
There can /e no contract unless the followin% reAuisites concur9 BaC
consent of the contractin% parties? B/C o/;ect certain which is the su/;ect
$atter of the contract? BcC cause of the o/li%ation which is
esta/lished.
++
Contracts are perfected /' $ere consent) which is $anifested
/' the $eetin% of the offer and the acceptance upon the thin% and the cause
which are to constitute the contract.
+"
1pecificall') in the case of a contract of sale) reAuired is the concurrence of
three ele$ents) to wit9 BaC consent or $eetin% of the $inds) that is) consent to
transfer ownership in e6chan%e for the price? B/C deter$inate su/;ect $atter)
and BcC price certain in $one' or its eAuivalent.
+5
1uch contract is /orn fro$
the $o$ent there is a $eetin% of $inds upon the thin% which is the o/;ect of
the contract and upon the price.
+
8n %eneral) contracts under%o three distinct sta%es) to wit9 ne%otiation?
perfection or /irth? and consu$$ation. Ne%otiation /e%ins fro$ the ti$e the
prospective contractin% parties $anifest their interest in the contract and ends
at the $o$ent of a%ree$ent of the parties. 0erfection or /irth of the contract
ta4es place when the parties a%ree upon the essential ele$ents of the
contract. Consu$$ation occurs when the parties fulfill or perfor$ the ter$s
a%reed upon in the contract) cul$inatin% in the e6tin%uish$ent thereof.
+(
A ne%otiation is for$all' initiated /' an offer. A perfected pro$ise $erel' tends
to insure and pave the wa' for the cele/ration of a future contract. An
i$perfect pro$ise Bpo#icitacionC) on the other hand) is a $ere unaccepted
offer.
+#
0u/lic advertise$ents or solicitations and the li4e are ordinaril'
construed as $ere invitations to $a4e offers or onl' as proposals. At an' ti$e
prior to the perfection of the contract) either ne%otiatin% part' $a' stop the
ne%otiation.
+!
The offer) at this sta%e) $a' /e withdrawn? the withdrawal is
effective i$$ediatel' after its $anifestation) such as /' its $ailin% and not
necessaril' when the offeree learns of the withdrawal.
"*
An offer would reAuire) a$on% other thin%s) a clear certaint' on /oth the
o/;ect and the cause or consideration of the envisioned contract. Consent in a
contract of sale should /e $anifested /' the $eetin% of the offer and the
acceptance upon the thin% and the cause which are to constitute the contract.
The offer $ust /e certain and the acceptance a/solute. A Aualified
acceptance constitutes a counter-offer.
"1
Euite o/viousl') 2iton;ua>s letter dated 21 &a' 1!!*) proposin% the acAuisition
of the 0hi$co shares for H1N+ $illion was $erel' an offer. This offer)
however) in 2iton;ua>s own words) Jis understood to /e su/;ect to ad;ust$ent
on the /asis of an audit of the assets) lia/ilities and net worth of 0hi$co and
its su/sidiaries and on the final ne%otiation /etween ourselves.J
"2
Das the offer certain enou%h to satisf' the reAuire$ents of the 1tatute of
IraudsG -efinitel' not.
2iton;ua repeatedl' stressed in his letters that the' would not /e a/le to
su/$it their final /id /' +* ,une 1!!*.
"+
Dith indu/ita/le inconsistenc')
respondents later clai$ed that for all intents and purposes) the H1N+ $illion
was their final /id. 8f this were so) it would /e inane for 2iton;ua to state) as he
did) in his letter dated 2# ,une 1!!* that the' would /e in a position to su/$it
their final /id onl' on 1( ,ul' 1!!*. The lac4 of a definite offer on the part of
respondents could not possi/l' serve as the /asis of their clai$ that the sale
of the 0hi$co shares in their favor was perfected) for one essential ele$ent of
a contract of sale was o/viousl' wantin%Lthe price certain in $one' or its
eAuivalent. The price $ust /e certain) otherwise there is no true consent
/etween the parties.
""
There can /e no sale without a price.
"5
Euite recentl')
this Court reiterated the lon%-standin% doctrine that the $anner of pa'$ent of
the purchase price is an essential ele$ent /efore a valid and /indin% contract
of sale can e6ist since the a%ree$ent on the $anner of pa'$ent %oes into the
price such that a
disa%ree$ent on the $anner of pa'$ent is tanta$ount to a failure to a%ree on
the price.
"
Grantin% arguendo) that the a$ount of H1N+ $illion was a definite offer) it
would re$ain as a $ere offer in the a/sence of evidence of its acceptance. To
produce a contract) there $ust /e acceptance) which $a' /e e6press or
i$plied) /ut it $ust not Aualif' the ter$s of the offer.
"(
The acceptance of an
offer $ust /e unAualified and a/solute to perfect the contract.
"#
8n other words)
it $ust /e identical in all respects with that of the offer so as to produce
consent or $eetin% of the $inds.
"!
Respondents> atte$pt to prove the alle%ed ver/al acceptance of their H1N+
$illion /id /eco$es futile in the face of the overwhel$in% evidence on record
that there was in the first place no $eetin% of the $inds with respect to the
price. 8t is dra$aticall' clear that the H1N+ $illion was not the actual price
a%reed upon /ut $erel' a preli$inar' offer which was su/;ect to ad;ust$ent
after the conclusion of the audit of the co$pan' finances. Respondents>
failure to su/$it their final /id on the deadline set /' petitioners prevented the
perfection of the contract of sale. 8t was not perfected due to the a/sence of
one essential ele$ent which was the price certain in $one' or its eAuivalent.
At an' rate) fro$ the procedural stand point) the continuin% o/;ections raised
/' petitioners to the ad$ission of parol evidence
5*
on the alle%ed ver/al
acceptance of the offer rendered an' evidence of acceptance inad$issi/le.
Respondents> plea of partial perfor$ance should li4ewise fail. The acAuisition
audit and su/$ission of a co$fort letter) even if considered to%ether) failed to
prove the perfection of the contract. Euite the contrar') the' indicated that the
sale was far fro$ concluded. Respondents conducted the audit as part of the
due dili%ence process to help the$ arrive at and $a4e their final offer. =n the
other hand) the su/$ission of the co$fort letter was $erel' a %uarantee that
respondents had the financial capacit' to pa' the price in the event that their
/id was accepted /' petitioners.
The 1tatute of Irauds is applica/le onl' to contracts which are e6ecutor' and
not to those which have /een consu$$ated either totall' or partiall'.
51
8f a
contract has /een totall' or partiall' perfor$ed) the e6clusion of parol
evidence would pro$ote fraud or /ad faith) for it would ena/le the defendant
to 4eep the /enefits alread' derived /' hi$ fro$ the transaction in liti%ation)
and at the sa$e ti$e) evade the o/li%ations) responsi/ilities or lia/ilities
assu$ed or contracted /' hi$ there/'.
52
This rule) however) is predicated on
the fact of ratification of the contract within the $eanin% of Article 1"*5 of the
Civil Code either B1C /' failure to o/;ect to the presentation of oral evidence to
prove the sa$e) or B2C /' the acceptance of /enefits under the$. 8n the
instant case) respondents failed to prove that there was partial perfor$ance of
the contract within the purview of the 1tatute.
Respondents insist that even on the assu$ption that the 1tatute of Irauds is
applica/le in this case) the trial court erred in dis$issin% the co$plaint
alto%ether. The' point out that the co$plaint presents several causes of
action.
A close e6a$ination of the co$plaint reveals that it alle%es two distinct causes
of action) the first is for specific perfor$ance
5+
pre$ised on the e6istence of
the contract of sale) while the other is solel' for da$a%es) predicated on the
purported dilator' $aneuvers e6ecuted /' the 0hi$co $ana%e$ent.
5"
Dith respect to the first cause of action for specific perfor$ance) apart fro$
petitioners> alle%ed refusal to honor the contract of saleLwhich has never
/een perfected in the first placeLrespondents $ade a nu$/er of aver$ents
in their co$plaint all in support of said cause of action. Respondents
clai$ed that petitioners were %uilt' of pro$issor' estoppel)
55
warrant'
/reaches
5
and tortious conduct
5(
in refusin% to honor the alle%ed contract of
sale. These aver$ents are predicated on or at least interwoven with the
e6istence or perfection of the contract of sale. As there was no such perfected
contract) the trial court properl' re;ected the aver$ents in con;unction with the
dis$issal of the co$plaint for specific perfor$ance.
:owever) respondents> second cause of action due to the alle%ed $alicious
and deli/erate dela' of the 0hi$co $ana%e$ent in the deliver' of docu$ents
necessar' for the co$pletion of the audit on ti$e) not /ein% /ased on the
e6istence of the contract of sale) could stand independentl' of the action for
specific perfor$ance and should not /e dee$ed /arred /' the dis$issal of
the cause of action predicated on the failed contract. 8f su/stantiated) this
cause of action would entitle respondents to the recover' of da$a%es a%ainst
the officers of the corporation responsi/le for the acts co$plained of.
Thus) the Court cannot forthwith order dis$issal of the co$plaint without
affordin% respondents an opportunit' to su/stantiate their alle%ations with
respect to its cause of action for da$a%es a%ainst the officers of 0hi$co
/ased on the latter>s alle%ed self-servin% dilator' $aneuvers.
()#R#*OR#, the petition is in part &RANT#$. The appealed Decision is
here/' MO$I*I#$ insofar as it declared the a%ree$ent /etween the parties
enforcea/le under the
1tatute of Irauds. The co$plaint /efore the trial court is
ordered $ISMISS#$ insofar as the cause of action for specific
perfor$ance is concerned. The case is ordered R#MAN$#$ to the trial court
for further proceedin%s with respect to the cause of action for da$a%es as
a/ove specified.
SO OR$#R#$.
Puno, Austria&"artinez, Ca##e'o, !r., and Chico&(azario, JJ., concur.
&.R. No. +<<-<, $ece6ber ,., ,..<
MANILA M#TAL !ONTAIN#R !ORPORATION, petitioner)
R#%NAL$O !. TOL#NTINO, intervenor)
vs.
P)ILIPPIN# NATIONAL 0AN", respondent)
$M!I-PROJ#!T $##LOP#RS, IN!., intervenor.
- < C 8 1 8 = N
!ALL#JO, SR., J.'
.efore us is a petition for review on certiorari of the -ecision
1
of the Court of
Appeals BCAC in CA-G.R. No. "15+ which affir$ed the decision
2
of the
Re%ional Trial Court BRTCC) .ranch (1) 0asi% Cit') in Civil Case No. 5#551)
and its Resolution
+
den'in% the $otion for reconsideration filed /' petitioner
&anila &etal Container Corporation B&&CCC.
The Antecedents
0etitioner was the owner of a #)*15 sAuare $eter parcel of land located in
&andalu'on% Bnow a Cit'C) &etro &anila. The propert' was covered /'
Transfer Certificate of Title BTCTC No. ++2*!# of the Re%istr' of -eeds of
Ri3al. To secure a 0!**)***.** loan it had o/tained fro$ respondent
0hilippine National .an4 B0N.C) petitioner e6ecuted a real estate $ort%a%e
over the lot. Respondent 0N. later %ranted petitioner a new credit
acco$$odation of 01)***)***.**? and) on Nove$/er 1) 1!(+) petitioner
e6ecuted an A$end$ent
"
of Real <state &ort%a%e over its propert'. =n
&arch +1) 1!#1) petitioner secured another loan of 05+)***.** fro$
respondent 0N.) pa'a/le in Auarterl' install$ents of 0+2)5*.**) plus
interests and other char%es.
5
=n Au%ust 5) 1!#2) respondent 0N. filed a petition for e6tra;udicial
foreclosure of the real estate $ort%a%e and sou%ht to have the propert' sold
at pu/lic auction for 0!11)5+2.21) petitionerQs outstandin% o/li%ation to
respondent 0N. as of ,une +*) 1!#2)

plus interests and attorne'Qs fees.

After due notice and pu/lication) the propert' was sold at pu/lic auction on
1epte$/er 2#) 1!#2 where respondent 0N. was declared the winnin% /idder
for 01)***)***.**. The Certificate of 1ale
(
issued in its favor was re%istered
with the =ffice of the Re%ister of -eeds of Ri3al) and was annotated at the
dorsal portion of the title on Ie/ruar' 1() 1!#+. Thus) the period to redee$
the propert' was to e6pire on Ie/ruar' 1() 1!#".
0etitioner sent a letter dated Au%ust 25) 1!#+ to respondent 0N.) reAuestin%
that it /e %ranted an e6tension of ti$e to redee$Krepurchase the propert'.
#
8n
its repl' dated Au%ust +*) 1!#+) respondent 0N. infor$ed petitioner that the
reAuest had /een referred to its 0asa' Cit' .ranch for appropriate action and
reco$$endation.
!
8n a letter
1*
dated Ie/ruar' 1*) 1!#") petitioner reiterated its reAuest for a one
'ear e6tension fro$ Ie/ruar' 1() 1!#" within which to redee$Krepurchase
the propert' on install$ent /asis. 8t reiterated its reAuest to repurchase the
propert' on install$ent.
11
&eanwhile) so$e 0N. 0asa' Cit' .ranch personnel
infor$ed petitioner that as a $atter of polic') the /an4 does not accept Jpartial
rede$ption.J
12
1ince petitioner failed to redee$ the propert') the Re%ister of -eeds cancelled
TCT No. +2*!# on ,une 1) 1!#") and issued a new title in favor of respondent
0N..
1+
0etitionerQs offers had not 'et /een acted upon /' respondent 0N..
&eanwhile) the 1pecial Assets &ana%e$ent -epart$ent B1A&-C had
prepared a state$ent of account) and as of ,une 25) 1!#" petitionerQs
o/li%ation a$ounted to 01)5(")5*."(. This included the /id price
of01)*5)!2".5*) interest) advances of insurance pre$iu$s) advances on
realt' ta6es) re%istration e6penses) $iscellaneous e6penses and pu/lication
cost.
1"
Dhen apprised of the state$ent of account) petitioner
re$itted0(25)***.** to respondent 0N. as Jdeposit to repurchase)J and
=fficial Receipt No. !(#1!1 was issued to it.
15
8n the $eanti$e) the 1A&- reco$$ended to the $ana%e$ent of respondent
0N. that petitioner /e allowed to repurchase the propert' for 01)5(")5*.**.
8n a letter dated Nove$/er 1") 1!#") the 0N. $ana%e$ent infor$ed
petitioner that it was re;ectin% the offer and the reco$$endation of the 1A&-.
8t was su%%ested that petitioner purchase the propert' for 02)*)***.**) its
$ini$u$ $ar4et value. Respondent 0N. %ave petitioner until -ece$/er 15)
1!#" to act on the proposal? otherwise) its 0(25)***.** deposit would /e
returned and the propert' would /e sold to other interested /u'ers.
1
0etitioner) however) did not a%ree to respondent 0N.Qs proposal. 8nstead) it
wrote another letter dated -ece$/er 12) 1!#" reAuestin% for a
reconsideration. Respondent 0N. replied in a letter dated -ece$/er 2#)
1!#") wherein it reiterated its proposal that petitioner purchase the propert'
for 02)*)***.**. 0N. a%ain infor$ed petitioner that it would return the
deposit should petitioner desire to withdraw its offer to purchase the
propert'.
1(
=n Ie/ruar' 25) 1!#5) petitioner) throu%h counsel) reAuested that
0N. reconsider its letter dated -ece$/er 2#) 1!#". 0etitioner declared that it
had alread' a%reed to the 1A&-Qs offer to purchase the propert'
for 01)5(")5*."() and that was wh' it had paid 0(25)***.**. 0etitioner
warned respondent 0N. that it would see4 ;udicial recourse should 0N. insist
on the position.
1#
=n ,une ") 1!#5) respondent 0N. infor$ed petitioner that the 0N. .oard of
-irectors had accepted petitionerQs offer to purchase the propert') /ut
for 01)!+1)+#!.5+ in cash less the 0(25)***.** alread' deposited with it.
1!
=n
pa%e two of the letter was a space a/ove the t'pewritten na$e of petitionerQs
0resident) 0a/lo Ga/riel) where he was to affi6 his si%nature. :owever) 0a/lo
Ga/riel did not confor$ to the letter /ut $erel' indicated therein that he had
received it.
2*
0etitioner did not respond) so 0N. reAuested petitioner in a letter
dated ,une +*) 1!## to su/$it an a$ended offer to repurchase.
0etitioner re;ected respondentQs proposal in a letter dated ,ul' 1") 1!##. 8t
$aintained that respondent 0N. had a%reed to sell the propert'
for 01)5(")5*."() and that since its 0(25)***.** downpa'$ent had /een
accepted) respondent 0N. was proscri/ed fro$ increasin% the purchase price
of the propert'.
21
0etitioner averred that it had a net /alance pa'a/le in the
a$ount of 0"+)"52.+". Respondent 0N.) however) re;ected petitionerQs offer
to pa' the /alance of 0"+)"52.+" in a letter dated Au%ust 1) 1!#!.
22
=n Au%ust 2#) 1!#!) petitioner filed a co$plaint a%ainst respondent 0N. for
JAnnul$ent of &ort%a%e and &ort%a%e Ioreclosure) -eliver' of Title) or
1pecific 0erfor$ance with -a$a%es.J To support its cause of action for
specific perfor$ance) it alle%ed the followin%9
+". As earl' as ,une 25) 1!#") 0N. had accepted the down pa'$ent fro$
&anila &etal in the su/stantial a$ount of 0(25)***.** for the
rede$ptionKrepurchase price of 01)5(")5*."( as approved /' its 1&A- and
considerin% the reliance $ade /' &anila &etal and the lon% ti$e that has
elapsed) the approval of the hi%her $ana%e$ent of the .an4 to confir$ the
a%ree$ent of its 1&A- is clearl' a potestative condition which cannot le%all'
pre;udice &anila &etal which has acted and relied on the approval of 1&A-.
The .an4 cannot ta4e advanta%e of a condition which is entirel' dependent
upon its own will after acceptin% and /enefitin% fro$ the su/stantial pa'$ent
$ade /' &anila &etal.
+5. 0N. approved the repurchase price of 01)5(")5*."( for which it
accepted 0(25)***.** fro$ &anila &etal. 0N. cannot ta4e advanta%e of its
own dela' and lon% inaction in de$andin% a hi%her a$ount /ased on
unilateral co$putation of interest rate without the consent of &anila &etal.
0etitioner later filed an a$ended co$plaint and supported its clai$ for
da$a%es with the followin% ar%u$ents9
+. That in order to protect itself a%ainst the wron%ful and $alicious acts of
the defendant .an4) plaintiff is constrained to en%a%e the services of counsel
at an a%reed fee of 05*)***.** and to incur liti%ation e6penses of at
least 0+*)***.**) which the defendant 0N. should /e conde$ned to pa' the
plaintiff &anila &etal.
+(. That /' reason of the wron%ful and $alicious actuations of defendant
0N.) plaintiff &anila &etal suffered /es$irched reputation for which
defendant 0N. is lia/le for $oral da$a%es of at least05*)***.**.
+#. That for the wron%ful and $alicious act of defendant 0N. which are hi%hl'
reprehensi/le) e6e$plar' da$a%es should /e awarded in favor of the plaintiff
/' wa' of e6a$ple or correction for the pu/lic %ood of at least 0+*)***.**.
2+
0etitioner pra'ed that) after due proceedin%s) ;ud%$ent /e rendered in its
favor) thus9
aC -eclarin% the A$ended Real <state &ort%a%e BAnne6 JAJC null and void
and without an' le%al force and effect.
/C -eclarin% defendantQs acts of e6tra-;udiciall' foreclosin% the $ort%a%e over
plaintiffQs propert' and settin% it for auction sale null and void.
cC =rderin% the defendant Re%ister of -eeds to cancel the new title issued in
the na$e of 0N. BTCT N=. "+(!2C coverin% the propert' descri/ed in
para%raph " of the Co$plaint) to reinstate TCT No. +(*25 in the na$e of
&anila &etal and to cancel the annotation of the $ort%a%e in Auestion at the
/ac4 of the TCT No. +(*25 descri/ed in para%raph " of this Co$plaint.
dC =rderin% the defendant 0N. to return andKor deliver ph'sical possession of
the TCT No. +(*25descri/ed in para%raph " of this Co$plaint to the plaintiff
&anila &etal.
eC =rderin% the defendant 0N. to pa' the plaintiff &anila &etalQs actual
da$a%es) $oral and e6e$plar' da$a%es in the a%%re%ate a$ount of not less
than 0#*)***.** as $a' /e warranted /' the evidence and fi6ed /' this
:onora/le Court in the e6ercise of its sound discretion) and attorne'Qs fees
of 05*)***.** and liti%ation e6penses of at least 0+*)***.** as $a' /e
proved durin% the trial) and costs of suit.
0laintiff li4ewise pra's for such further reliefs which $a' /e dee$ed ;ust and
eAuita/le in the pre$ises.
2"
8n its Answer to the co$plaint) respondent 0N. averred) as a special and
affir$ative defense) that it had acAuired ownership over the propert' after the
period to redee$ had elapsed. 8t clai$ed that no contract of sale was
perfected /etween it and petitioner after the period to redee$ the propert'
had e6pired.
-urin% pre-trial) the parties a%reed to su/$it the case for decision) /ased on
their stipulation of facts.
25
The parties a%reed to li$it the issues to the
followin%9
1. Dhether or not the ,une ") 1!#5 letter of the defendant
approvin%Kacceptin% plaintiffQs offer to purchase the propert' is still valid and
le%all' enforcea/le.
2. Dhether or not the plaintiff has waived its ri%ht to purchase the propert'
when it failed to confor$ with the conditions set forth /' the defendant in its
letter dated ,une ") 1!#5.
+. Dhether or not there is a perfected contract of sale /etween the parties.
2
Dhile the case was pendin%) respondent 0N. de$anded) on 1epte$/er 2*)
1!#!) that petitioner vacate the propert' within 15 da's fro$ notice)
2(
/ut
petitioners refused to do so.
=n &arch 1#) 1!!+) petitioner offered to repurchase the propert'
for 0+)5**)***.**.
2#
The offer was however re;ected /' respondent 0N.) in a
letter dated April 1+) 1!!+. Accordin% to it) the prevailin% $ar4et value of the
propert' was appro6i$atel' 0+*)***)***.**) and as a $atter of polic') it
could not sell the propert' for less than its $ar4et value.
2!
=n ,une 21) 1!!+)
petitioner offered to purchase the propert' for 0")25*)***.** in cash.
+*
The
offer was a%ain re;ected /' respondent 0N. on 1epte$/er 1+) 1!!+.
+1
=n &a' +1) 1!!") the trial court rendered ;ud%$ent dis$issin% the a$ended
co$plaint and respondent 0N.Qs counterclai$. 8t ordered respondent 0N. to
refund the 0(25)***.** deposit petitioner had $ade.
+2
The trial court ruled
that there was no perfected contract of sale /etween the parties? hence)
petitioner had no cause of action for specific perfor$ance a%ainst respondent.
The trial court declared that respondent had re;ected petitionerQs offer to
repurchase the propert'. 0etitioner) in turn) re;ected the ter$s and conditions
contained in the ,une ") 1!#5 letter of the 1A&-. Dhile petitioner had offered
to repurchase the propert' per its letter of ,ul' 1") 1!##) the a$ount
of 0"+)"22.+" was wa' /elow the 01)2*)+#!.5+ which respondent 0N.
had de$anded. 8t further declared that the 0(25)***.** re$itted /' petitioner
to respondent 0N. on ,une ") 1!#5 was a Jdeposit)J and not a downpa'$ent
or earnest $one'.
=n appeal to the CA) petitioner $ade the followin% alle%ations9
8
T:< 2=D<R C=HRT <RR<- 8N RH28NG T:AT -<I<N-ANT-A00<22<<Q1
2<TT<R -AT<- " ,HN< 1!#5 A00R=V8NGKACC<0T8NG 02A8NT8II-
A00<22ANTQ1 =II<R T= 0HRC:A1< T:< 1H.,<CT 0R=0<RTF 81 N=T
VA28- AN- <NI=RC<A.2<.
88
T:< 2=D<R C=HRT <RR<- 8N RH28NG T:AT T:<R< DA1 N=
0<RI<CT<- C=NTRACT =I 1A2< .<TD<<N 02A8NT8II-A00<22ANT
AN- -<I<N-ANT-A00<22<<.
888
T:< 2=D<R C=HRT <RR<- 8N RH28NG T:AT 02A8NT8II-A00<222ANT
DA8V<- 8T1 R8G:T T= 0HRC:A1< T:< 1H.,<CT 0R=0<RTF D:<N 8T
IA82<- T= C=NI=R& D8T: C=N-8T8=N1 1<T I=RT: .F -<I<N-ANT-
A00<22<< 8N 8T1 2<TT<R -AT<- " ,HN< 1!#5.
8V
T:< 2=D<R C=HRT <RR<- 8N -81R<GAR-8NG T:< IACT T:AT 8T DA1
T:< -<I<N-ANT-A00<22<< D:8C: R<N-<R<- 8T -8II8CH2T 8I N=T
8&0=118.2< I=R 02A8NT8II-A00<22ANT T= C=&02<T< T:< .A2ANC<
=I T:<8R 0HRC:A1< 0R8C<.
V
T:< 2=D<R C=HRT <RR<- 8N -81R<GAR-8NG T:< IACT T:AT T:<R<
DA1 N= VA28- R<1C8118=N =R CANC<22AT8=N =I 1H.,<CT
C=NTRACT =I R<0HRC:A1<.
V8
T:< 2=D<R C=HRT <RR<- 8N -<C2AR8NG T:AT 02A8NT8II IA82<-
AN- R<IH1<- T= 1H.&8T T:< A&<N-<- R<0HRC:A1< =II<R.
V88
T:< 2=D<R C=HRT <RR<- 8N -81&8118NG T:< A&<N-<-
C=&02A8NT =I 02A8NT8II-A00<22ANT.
V888
T:< 2=D<R C=HRT <RR<- 8N N=T ADAR-8NG 02A8NT8II-A00<22ANT
ACTHA2) &=RA2 AN- <P<&02ARF -A&AG<1) ATT=TRN<FQ1 I<<1
AN- 28T8GAT8=N <P0<N1<1.
++
&eanwhile) on ,une 1() 1!!+) petitionerQs .oard of -irectors approved
Resolution No. +-**") where it waived) assi%ned and transferred its ri%hts
over the propert' covered /' TCT No. ++*!! and TCT No. +(*25 in favor of
.a'ani Ga/riel) one of its -irectors.
+"
Thereafter) .a'ani Ga/riel e6ecuted a
-eed of Assi%n$ent over 51O of the ownership and $ana%e$ent of the
propert' in favor of Re'naldo Tolentino) who later $oved for leave to intervene
as plaintiff-appellant. =n ,ul' 1") 1!!+) the CA issued a resolution %rantin%
the $otion)
+5
and li4ewise %ranted the $otion of Re'naldo Tolentino
su/stitutin% petitioner &&CC) as plaintiff-appellant) and his $otion to
withdraw as intervenor.
+
The CA rendered ;ud%$ent on &a' 11) 2*** affir$in% the decision of the
RTC.
+(
8t declared that petitioner o/viousl' never a%reed to the sellin% price
proposed /' respondent 0N. B01)!+1)+#!.5+C since petitioner had 4ept on
insistin% that the sellin% price should /e lowered to 01)5(")5*."(. Clearl'
therefore) there was no $eetin% of the $inds /etween the parties as to the
price or consideration of the sale.
The CA ratiocinated that petitionerQs ori%inal offer to purchase the su/;ect
propert' had not /een accepted /' respondent 0N.. 8n fact) it $ade a
counter-offer throu%h its ,une ") 1!#5 letter specificall' on the sellin% price?
petitioner did not a%ree to the counter-offer? and the ne%otiations did not
prosper. &oreover) petitioner did not pa' the /alance of the purchase price
within the si6t'-da' period set in the ,une ") 1!#5 letter of respondent 0N..
ConseAuentl') there was no perfected contract of sale) and as such) there
was no contract to rescind.
Accordin% to the appellate court) the clai$ for da$a%es and the counterclai$
were correctl' dis$issed /' the court a Auo for no evidence was presented to
support it. Respondent 0N.Qs letter dated ,une +*) 1!## cannot revive the
failed ne%otiations /etween the parties. Respondent 0N. $erel' as4ed
petitioner to su/$it an a$ended offer to repurchase. Dhile petitioner
reiterated its reAuest for a lower sellin% price and that the /alance of the
repurchase /e reduced) however) respondent re;ected the proposal in a letter
dated Au%ust 1) 1!#!.
0etitioner filed a $otion for reconsideration) which the CA li4ewise denied.
Thus) petitioner filed the instant petition for review on certiorari) alle%in% that9
8. T:< C=HRT =I A00<A21 <RR<- =N A EH<1T8=N =I 2AD D:<N 8T
RH2<- T:AT T:<R< 81 N= 0<RI<CT<- C=NTRACT =I 1A2<
.<TD<<N T:< 0<T8T8=N<R AN- R<10=N-<NT.
88. T:< C=HRT =I A00<A21 <RR<- =N A EH<1T8=N =I 2AD D:<N 8T
RH2<- T:AT T:< A&=HNT =I 0:0(25)***.** 0A8- .F T:<
0<T8T8=N<R 81 N=T AN <ARN<1T &=N<F.
888. T:< C=HRT =I A00<A21 <RR<- =N A EH<1T8=N =I 2AD D:<N 8T
RH2<- T:AT T:< IA82HR< =I T:< 0<T8T8=N<R-A00<22ANT T=
18GN8IF 8T1 C=NI=R&8TF T= T:< T<R&1 C=NTA8N<- 8N 0N.Q1 ,HN<
") 1!#5 2<TT<R &<AN1 T:AT T:<R< DA1 N= VA28- AN- 2<GA22F
<NI=RC<A.2< C=NTRACT =I 1A2< .<TD<<N T:< 0ART8<1.
8V. T:< C=HRT =I A00<A21 <RR<- =N A EH<1T8=N =I 2AD T:AT
N=N-0AF&<NT =I T:< 0<T8T8=N<R-A00<22ANT =I T:< .A2ANC< =I
T:< =II<R<- 0R8C< 8N T:< 2<TT<R =I 0N. -AT<- ,HN< ") 1!#5)
D8T:8N 18PTF B*C -AF1 IR=& N=T8C< =I A00R=VA2 C=N1T8THT<1
N= VA28- AN- 2<GA22F <NI=RC<A.2< C=NTRACT =I 1A2<
.<TD<<N T:< 0ART8<1.
V. T:< C=HRT =I A00<A21 1<R8=H12F <RR<- D:<N 8T :<2- T:AT
T:< 2<TT<R1 =I 0<T8T8=N<R-A00<22ANT -AT<- &ARC: 1#) 1!!+
AN- ,HN< 21) 1!!+) =II<R8NG T= .HF T:< 1H.,<CT 0R=0<RTF AT
-8II<R<NT A&=HNT D<R< 0R==I T:AT T:<R< 81 N= 0<RI<CT<-
C=NTRACT =I 1A2<.
+#
The threshold issue is whether or not petitioner and respondent 0N. had
entered into a perfected contract for petitioner to repurchase the propert' fro$
respondent.
0etitioner $aintains that it had accepted respondentQs offer $ade throu%h the
1A&-) to sell the propert' for01)5(")5*.**. Dhen the acceptance was
$ade in its letter dated ,une 25) 1!#"? it then deposited0(25)***.** with the
1A&- as partial pa'$ent) evidenced /' Receipt No. !(#1!" which
respondent had issued. 0etitioner avers that the 1A&-Qs acceptance of the
deposit a$ounted to an acceptance of its offer to repurchase. &oreover) as
%leaned fro$ the letter of 1A&- dated ,une ") 1!#5) the 0N. .oard of
-irectors had approved petitionerQs offer to purchase the propert'. 8t clai$s
that this was the suspensive condition) the fulfill$ent of which %ave rise to the
contract. Respondent could no lon%er unilaterall' withdraw its offer to sell the
propert' for 01)5(")5*."() since the acceptance of the offer resulted in a
perfected contract of sale? it was o/li%ed to re$it to respondent the /alance of
the ori%inal purchase price of 01)5(")5*."() while respondent was o/li%ed to
transfer ownership and deliver the propert' to petitioner) confor$a/l' with
Article 115! of the New Civil Code.
0etitioner posits that respondent was proscri/ed fro$ increasin% the interest
rate after it had accepted respondentQs offer to sell the propert'
for 01)5(")5*.**. ConseAuentl') respondent could no lon%er validl' $a4e a
counter-offer of 01)!+1)(#!.## for the purchase of the propert'. 8t li4ewise
$aintains that) althou%h the0(25)***.** was considered as Jdeposit for the
repurchase of the propert'J in the receipt issued /' the 1A&-) the a$ount
constitutes earnest $one' as conte$plated in Article 1"#2 of the New Civil
Code. 0etitioner cites the rulin%s of this Court in )i##onco v.
%ormaheco
+!
and *opacio v. Court o+ Appea#s.
"*
0etitioner avers that its failure to append its confor$it' to the ,une ") 1!#"
letter of respondent and its failure to pa' the /alance of the price as fi6ed /'
respondent within the *-da' period fro$ notice was to protest respondentQs
/reach of its o/li%ation to petitioner. 8t did not a$ount to a re;ection of
respondentQs offer to sell the propert' since respondent was $erel' see4in% to
enforce its ri%ht to pa' the /alance of 01)5(*)5"."(. 8n an' event)
respondent had the option either to accept the /alance of the offered price or
to cause the rescission of the contract.
0etitionerQs letters dated &arch 1#) 1!!+ and ,une 21) 1!!+ to respondent
durin% the pendenc' of the case in the RTC were $erel' to co$pro$ise the
pendin% lawsuit) the' did not constitute separate offers to repurchase the
propert'. 1uch offer to co$pro$ise should not /e ta4en a%ainst it) in
accordance with 1ection 2() Rule 1+* of the Revised Rules of Court.
Ior its part) respondent contends that the parties never %raduated fro$ the
Jne%otiation sta%eJ as the' could not a%ree on the a$ount of the repurchase
price of the propert'. All that transpired was an e6chan%e of proposals and
counter-proposals) nothin% $ore. 8t insists that a definite a%ree$ent on the
a$ount and $anner of pa'$ent of the price are essential ele$ents in the
for$ation of a /indin% and enforcea/le contract of sale. There was no such
a%ree$ent in this case. 0ri$aril') the concept of Jsuspensive conditionJ
si%nifies a future and uncertain event upon the fulfill$ent of which the
o/li%ation /eco$es effective. 8t clearl' presupposes the e6istence of a valid
and /indin% a%ree$ent) the effectivit' of which is su/ordinated to its
fulfill$ent. 1ince there is no perfected contract in the first place) there is no
/asis for the application of the principles %overnin% Jsuspensive conditions.J
Accordin% to respondent) the 1tate$ent of Account prepared /' 1A&- as of
,une 25) 1!#" cannot /e classified as a counter-offer? it is si$pl' a recital of
its total $onetar' clai$s a%ainst petitioner. &oreover) the a$ount stated
therein could not li4ewise /e considered as the counter-offer since as
ad$itted /' petitioner) it was onl' reco$$endation which was su/;ect to
approval of the 0N. .oard of -irectors.
Neither can the receipt /' the 1A&- of 0(25)***.** /e re%arded as evidence
of a perfected sale contract. As %leaned fro$ the partiesQ !tipu#ation o+
,acts durin% the proceedin%s in the court a quo) the a$ount is $erel' an
ac4nowled%$ent of the receipt of 0(25)***.** as deposit to repurchase the
propert'. The deposit of0(25)***.** was accepted /' respondent on the
condition that the purchase price would still /e approved /' its .oard of
-irectors. Respondent $aintains that its acceptance of the a$ount was
Aualified /' that condition) thus not a/solute. 0endin% such approval) it cannot
/e le%all' clai$ed that respondent is alread' /ound /' an' contract of sale
with petitioner.
Accordin% to respondent) petitioner 4new that the 1A&- has no capacit' to
/ind respondent and that its authorit' is li$ited to ad$inisterin%) $ana%in%
and preservin% the properties and other special assets of 0N.. The 1A&-
does not have the power to sell) encu$/er) dispose of) or otherwise alienate
the assets) since the power to do so $ust e$anate fro$ its .oard of
-irectors. The 1A&- was not authori3ed /' respondentQs .oard to enter into
contracts of sale with third persons involvin% corporate assets. There is
a/solutel' nothin% on record that respondent authori3ed the 1A&-) or $ade it
appear to petitioner that it represented itself as havin% such authorit'.
Respondent reiterates that 1A&- had infor$ed petitioner that its offer to
repurchase had /een approved /' the .oard su/;ect to the condition) a$on%
others) Jthat the sellin% price shall /e the total /an4Qs clai$ as of
docu$entation date 6 6 6 pa'a/le in cash B0(25)***.** alread' depositedC
within * da's fro$ notice of approval.J A new 1tate$ent of Account was
attached therein indicatin% the total /an4Qs clai$ to /e 01)!+1)+#!.5+ less
deposit of 0(25)***.**) or 01)2*)+#!.**. Iurther$ore) while respondentQs
.oard of -irectors accepted petitionerQs offer to repurchase the propert') the
acceptance was Aualified) in that it reAuired a hi%her sale price and su/;ect to
specified ter$s and conditions enu$erated therein. This Aualified acceptance
was in effect a counter-offer) necessitatin% petitionerQs acceptance in return.
The R87in5 of the !o8rt
The rulin% of the appellate court that there was no perfected contract of sale
/etween the parties on ,une ") 1!#5 is correct.
A contract is a $eetin% of $inds /etween two persons where/' one /inds
hi$self) with respect to the other) to %ive so$ethin% or to render so$e
service.
"1
Hnder Article 1+1# of the New Civil Code) there is no contract unless
the followin% reAuisites concur9
B1C Consent of the contractin% parties?
B2C =/;ect certain which is the su/;ect $atter of the contract?
B+C Cause of the o/li%ation which is esta/lished.
Contracts are perfected /' $ere consent which is $anifested /' the $eetin%
of the offer and the acceptance upon the thin% and the cause which are to
constitute the contract.
"2
=nce perfected) the' /ind other contractin% parties
and the o/li%ations arisin% therefro$ have the for$ of law /etween the parties
and should /e co$plied with in %ood faith. The parties are /ound not onl' to
the fulfill$ent of what has /een e6pressl' stipulated /ut also to the
conseAuences which) accordin% to their nature) $a' /e in 4eepin% with %ood
faith) usa%e and law.
"+
.' the contract of sale) one of the contractin% parties o/li%ates hi$self to
transfer the ownership of and deliver a deter$inate thin%) and the other to pa'
therefor a price certain in $one' or its eAuivalent.
""
The a/sence of an' of the
essential ele$ents will ne%ate the e6istence of a perfected contract of sale. As
the Court ruled in%oston %an- o+ the Phi#ippines v. "ana#o9
"5
A definite a%ree$ent as to the price is an essential ele$ent of a /indin%
a%ree$ent to sell personal or real propert' /ecause it seriousl' affects the
ri%hts and o/li%ations of the parties. 0rice is an essential ele$ent in the
for$ation of a /indin% and enforcea/le contract of sale. The fi6in% of the price
can never /e left to the decision of one of the contractin% parties. .ut a price
fi6ed /' one of the contractin% parties) if accepted /' the other) %ives rise to a
perfected sale.
"
A contract of sale is consensual in nature and is perfected upon $ere $eetin%
of the $inds. Dhen there is $erel' an offer /' one part' without acceptance
of the other) there is no contract.
"(
Dhen the contract of sale is not perfected)
it cannot) as an independent source of o/li%ation) serve as a /indin% ;uridical
relation /etween the parties.
"#
8n !an "igue# Properties Phi#ippines, .nc. v. /uang)
"!
the Court ruled that the
sta%es of a contract of sale are as follows9 B1C ne%otiation) coverin% the period
fro$ the ti$e the prospective contractin% parties indicate interest in the
contract to the ti$e the contract is perfected? B2C per+ection) which ta4es place
upon the concurrence of the essential ele$ents of the sale which are the
$eetin% of the $inds of the parties as to the o/;ect of the contract and upon
the price? and B+C consummation) which /e%ins when the parties perfor$ their
respective underta4in%s under the contract of sale) cul$inatin% in the
e6tin%uish$ent thereof.
A ne%otiation is for$all' initiated /' an offer) which) however) $ust /e
certain.
5*
At an' ti$e prior to the perfection of the contract) either ne%otiatin%
part' $a' stop the ne%otiation. At this sta%e) the offer $a' /e withdrawn? the
withdrawal is effective i$$ediatel' after its $anifestation. To convert the offer
into a contract) the acceptance $ust /e a/solute and $ust not Aualif' the
ter$s of the offer? it $ust /e plain) uneAuivocal) unconditional and without
variance of an' sort fro$ the proposal. 8n Ade#+a Properties, .nc. v. Court o+
Appea#s)
51
the Court ruled that9
6 6 6 The rule is that e6cept where a for$al acceptance is so reAuired)
althou%h the acceptance $ust /e affir$ativel' and clearl' $ade and $ust /e
evidenced /' so$e acts or conduct co$$unicated to the offeror) it $a' /e
shown /' acts) conduct) or words of the acceptin% part' that clearl' $anifest
a present intention or deter$ination to accept the offer to /u' or sell. Thus)
acceptance $a' /e shown /' the acts) conduct) or words of a part'
reco%ni3in% the e6istence of the contract of sale.
52
A Aualified acceptance or one that involves a new proposal constitutes a
counter-offer and a re;ection of the ori%inal offer. A counter-offer is considered
in law) a re;ection of the ori%inal offer and an atte$pt to end the ne%otiation
/etween the parties on a different /asis.
5+
ConseAuentl') when so$ethin% is
desired which is not e6actl' what is proposed in the offer) such acceptance is
not sufficient to %uarantee consent /ecause an' $odification or variation fro$
the ter$s of the offer annuls the offer.
5"
The acceptance $ust /e identical in
all respects with that of the offer so as to produce consent or $eetin% of the
$inds.
8n this case) petitioner had until Ie/ruar' 1() 1!#" within which to redee$ the
propert'. :owever) since it lac4ed the resources) it reAuested for $ore ti$e to
redee$Krepurchase the propert' under such ter$s and conditions a%reed
upon /' the parties.
55
The reAuest) which was $ade throu%h a letter dated
Au%ust 25) 1!#+) was referred to the respondentQs $ain /ranch for
appropriate action.
5
.efore respondent could act on the reAuest) petitioner
a%ain wrote respondent as follows9
1. Hpon approval of our reAuest) we will pa' 'our %oodselves =N<
:HN-R<- M I8ITF T:=H1AN- 0<1=1 B015*)***.**C?
2. Dithin si6 $onths fro$ date of approval of our reAuest) we will pa' another
I=HR :HN-R<- I8ITF T:=H1AN- 0<1=1 B0"5*)***.**C? and
+. The re$ainin% /alance to%ether with the interest and other e6penses that
will /e incurred will /e paid within the last si6 $onths of the one 'ear %rave
period reAuested for.
5(
Dhen the petitioner was told that respondent did not allow Jpartia7
rede6ption)J
5#
it sent a letter to respondentQs 0resident reiteratin% its offer to
purchase the propert'.
5!
There was no response to petitionerQs letters dated
Ie/ruar' 1* and 15) 1!#".
The state$ent of account prepared /' the 1A&- statin% that the net clai$ of
respondent as of ,une 25) 1!#" was 01)5(")5*."( cannot /e considered an
unAualified acceptance to petitionerQs offer to purchase the propert'. The
state$ent is /ut a co$putation of the a$ount which petitioner was o/li%ed to
pa' in case respondent would later a%ree to sell the propert') includin%
interests) advances on insurance pre$iu$) advances on realt' ta6es)
pu/lication cost) re%istration e6penses and $iscellaneous e6penses.
There is no evidence that the 1A&- was authori3ed /' respondentQs .oard of
-irectors to accept petitionerQs offer and sell the propert' for 01)5(")5*."(.
An' acceptance /' the 1A&- of petitionerQs offer would not /ind respondent.
As this Court ruled in A, 0ea#t1 Deve#opment, .nc. vs. Diesehuan ,reight
!ervices, .nc.9
*
1ection 2+ of the Corporation Code e6pressl' provides that the corporate
powers of all corporations shall /e e6ercised /' the /oard of directors. ,ust as
a natural person $a' authori3e another to do certain acts in his /ehalf) so
$a' the /oard of directors of a corporation validl' dele%ate so$e of its
functions to individual officers or a%ents appointed /' it. Thus) contracts or
acts of a corporation $ust /e $ade either /' the /oard of directors or /' a
corporate a%ent dul' authori3ed /' the /oard. A/sent such valid
dele%ationKauthori3ation) the rule is that the declarations of an individual
director relatin% to the affairs of the corporation) /ut not in the course of) or
connected with the perfor$ance of authori3ed duties of such director) are held
not /indin% on the corporation.
Thus) a corporation can onl' e6ecute its powers and transact its /usiness
throu%h its .oard of -irectors and throu%h its officers and a%ents when
authori3ed /' a /oard resolution or its /'-laws.
1
8t appears that the 1A&- had prepared a reco$$endation for respondent to
accept petitionerQs offer to repurchase the propert' even /e'ond the one-'ear
period? it reco$$ended that petitioner /e allowed to redee$ the propert' and
pa' 01)5(")5*.** as the purchase price. Respondent later approved the
reco$$endation that the propert' /e sold to petitioner. .ut instead of
the 01)5(")5*."( reco$$ended /' the 1A&- and to which petitioner had
previousl' confor$ed) respondent set the purchase price at 02)*)***.**. 8n
fine) respondentQs acceptance of petitionerQs offer was Aualified) hence can /e
at $ost considered as a counter-offer. 8f petitioner had accepted this counter-
offer) a perfected contract of sale would have arisen? as it turns out) however)
petitioner $erel' sou%ht to have the counter-offer reconsidered. This reAuest
for reconsideration would later /e re;ected /' respondent.
De do not a%ree with petitionerQs contention that the 0(25)***.** it had
re$itted to respondent was Jearnest $one'J which could /e considered as
proof of the perfection of a contract of sale under Article 1"#2 of the New Civil
Code. The provision reads9
ART. 1"#2. Dhenever earnest $one' is %iven in a contract of sale) it shall /e
considered as part of the price and as proof of the perfection of the contract.
This contention is li4ewise ne%ated /' the stipulation of facts which the parties
entered into in the trial court9
#. =n ,une #) 1!#") the 1pecial Assets &ana%e$ent -epart$ent B1A&-C of
0N. prepared an updated 1tate$ent of Account showin% &&CCQs total
lia/ilit' to 0N. as of ,une 25) 1!#" to /e 01)5(")5*."( and reco$$ended
this a$ount as the repurchase price of the su/;ect propert'.
!. =n ,une 25) 1!#") &&CC paid 0(25)***.** to 0N. as deposit to
repurchase the propert'. The deposit of P725,000 was accepted by PNB
on the condition that the purchase price is sti sub!ect to the approva
of the PNB Board.
2
Thus) the 0(25)***.** was $erel' a deposit to /e applied as part of the
purchase price of the propert') in the event that respondent would approve the
reco$$endation of 1A&- for respondent to accept petitionerQs offer to
purchase the propert' for 01)5(")5*."(. Hnless and until the respondent
accepted the offer on these ter$s) no perfected contract of sale would arise.
A/sent proof of the concurrence of all the essential ele$ents of a contract of
sale) the %ivin% of earnest $one' cannot esta/lish the e6istence of a
perfected contract of sale.
+
8t appears that) per its letter to petitioner dated ,une ") 1!#5) the respondent
had decided to accept the offer to purchase the propert' for 01)!+1)+#!.5+.
:owever) this a$ounted to an a$end$ent of respondentQs Aualified
acceptance) or an a$ended counter-offer) /ecause while the respondent
lowered the purchase price) it still declared that its acceptance was su/;ect to
the followin% ter$s and conditions9
1. That the sellin% price shall /e the total .an4Qs clai$ as of docu$entation
date Bpls. see attached state$ent of account as of 5-+1-#5C) pa'a/le in cash
B0(25)***.** alread' depositedC within si6t' B*C da's fro$ notice of
approval?
2. The .an4 sells onl' whatever ri%hts) interests and participation it $a' have
in the propert' and 'ou are char%ed with full 4nowled%e of the nature and
e6tent of said ri%hts) interests and participation and waive 'our ri%ht to
warrant' a%ainst eviction.
+. All ta6es and other %overn$ent i$posts due or to /eco$e due on the
propert') as well as e6penses includin% costs of docu$ents and science
sta$ps) transfer fees) etc.) to /e incurred in connection with the e6ecution
and re%istration of all coverin% docu$ents shall /e /orne /' 'ou?
". That 'ou shall underta4e at 'our own e6pense and account the e;ect$ent
of the occupants of the propert' su/;ect of the sale) if there are an'?
5. That upon 'our failure to pa' the /alance of the purchase price within si6t'
B*C da's fro$ receipt of advice acceptin% 'our offer) 'our deposit shall /e
forfeited and the .an4 is thenceforth authori3ed to sell the propert' to other
interested parties.
. That the sale shall /e su/;ect to such other ter$s and conditions that the
2e%al -epart$ent $a' i$pose to protect the interest of the .an4.
"
8t appears that althou%h respondent reAuested petitioner to confor$ to its
a$ended counter-offer) petitioner refused and instead reAuested respondent
to reconsider its a$ended counter-offer. 0etitionerQs reAuest was ulti$atel'
re;ected and respondent offered to refund its 0(25)***.** deposit.
8n su$) then) there was no perfected contract of sale /etween petitioner and
respondent over the su/;ect propert'.
IN LI&)T O* ALL T)# *OR#&OIN&) the petition is $#NI#$.
The assailed decision is A**IRM#$. Costs a%ainst petitioner &anila &etal
Container Corporation.
SO OR$#R#$.
2nares&!antiago, J., 3or-ing Chairperson, Austria&"artinez, and Chico&
(azario, JJ., concur.
Panganiban, C.J., retired as of -ece$/er () 2**.