G.R. No. 177783 (2013)
Topics:
Contract of repurchase, contract of sale, perfection of a contract of sale
Doctrine:
Essential requisites of a contract of sale
Summary:
Petition for Review on Certiorari assailing CA Decision and Resolution that reversed RTC Decision in favor of Fausto Ignacio. RTC ruled among others that the Deeds of Sale executed by the bank are null and void, thus ordering its cancellation in the Register of Deeds. It also ordered the bank to execute the Deed of Reconveyance after Ignacio pays the purchase price.
Facts:
In 1981, Fausto C. Ignacio mortgaged two parcels of land to Home Savings Bank and Trust Company, the predecessor of Home Bankers Savings and Trust Company, as security for a ₱500,000.00 loan. However, Ignacio defaulted in his payment, prompting the bank to foreclose the real estate mortgage. In the 1983 foreclosure sale, the bank was the highest bidder. Consequently, the Certificate of Sale was issued to the bank and registered in the Registry of Deeds in Calamba, Laguna.
Ignacio failed to redeem the foreclosed properties within one year from its registration, so the title to the properties were consolidated and issued in the name of respondent bank. Despite the lapse of the redemption period and consolidation of title in respondent bank, Ignacio offered to repurchase the properties in 1989. The bank considered his offer, but never executed a repurchase contract. However, Ignacio insisted that he and the bank reached a verbal repurchase/compromise agreement.
Ignacio also caused the annotation of an adverse claim to the titles. Prior to the annotation, the bank sold a titled portion of the property to third-parties without Ignacio’s knowledge. Ignacio then filed an action for specific performance and damages, seeking reconveyance of the subject properties after his payment of the Php 600,000 on his terms.
Issue:
Whether a contract for the repurchase of the foreclosed properties was perfected between petitioner and respondent bank
Ruling:
No. The Court iterated that contracts are perfected by mere consent, which is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. Article 1319 of the Civil Code provides, to wit:
ART. 1319. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. The offer must be certain and the acceptance absolute. A qualified acceptance constitutes a counter-offer.
The Court also explained that a contract of sale is consensual in nature and is perfected upon mere meeting of the minds. A contract is produced once there is concurrence between the offer and the acceptance upon the subject matter, consideration, and terms of payment. The offer must be certain, and the acceptance must be absolute and must not qualify the terms of the offer. A qualified acceptance, or one that involves a new proposal, constitutes a counter-offer and is a rejection of the original offer. In other words, if something is desired that is different to the offer, such acceptance is not sufficient to generate consent because any modification or variation from the terms of the offer annuls it.
In this case, the Court of Appeals correctly found that no contract of repurchase was perfected. While Ignacio submitted evidence of a perfected contract of repurchase, it showed that Ignacio’s acceptance of the bank’s terms was not absolute. Ignacio set a different repurchase price and modified the terms of payment as to the balance depending on his “financial position”. Such is a counter-proposal that must be accepted by the bank. The Court found no evidence of any document or writing that shows the bank’s or its officers’ conformity to Ignacio’s counter-proposal.
Furthermore, while Ignacio insists that the bank has accepted his proposal impliedly through their verbal exchange, the Court also found their supposed verbal exchange did not bind respondent bank in view of its corporate nature. There was no evidence that said Mr. Lazaro or Mr. Fajardo was authorized by respondent bank’s Board of Directors to accept petitioner’s counter-proposal to repurchase the foreclosed properties at the price and terms other than those communicated in the March 22, 1984 letter.
Thus, based on the foregoing, there is no perfected contract of repurchase between Ignacio and the bank. The bank had every right to sell the subject properties to third parties and is under no obligation to reconvey the properties to Ignacio.