G.R. NO. 173622 (March 11, 2013)
Topics: contract of sale; acceptance of offer
Summary:
An association for landless people offered to purchase land from a bank. Said bank accepted deposited amount without express acceptance of offer. The association claims there was a perfected contract.
Doctrines:
A contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. Thus, for a contract of sale to be valid, all of the following essential elements must concur:
“a) consent or meeting of the minds;
b) determinate subject matter; and
c) price certain in money or its equivalent.”
Facts:
Al-Amanah owned a 2000-square meter lot located in Magtu-od, Davao City. On December 12, 1992, Al-Amanah Davao Branch, thru its officer-in-charge Febe O. Dalig (OIC Dalig), asked some of the members of PELA to desist from building their houses on the lot and to vacate the same, unless they are interested to buy it. The informal settlers thus expressed their interest to buy the lot at ₱100.00 per square meter, which Al-Amanah turned down for being far below its asking price. Consequently, Al-Amanah reiterated its demand to the informal settlers to vacate the lot.
In a letter9 dated March 18, 1993, the informal settlers together with other members comprising PELA offered to purchase the lot for ₱300,000.00, half of which shall be paid as down payment and the remaining half to be paid within one year. In the lower portion of the said letter, Al-Amanah made the following annotation:
Note:
Subject offer has been acknowledged/received but processing to take effect upon putting up of the partial amt. of ₱150,000.00 on or before April 15, 1993.
By May 3, 1993, PELA had deposited ₱150,000.00 as evidenced by four bank receipts.10 For the first three receipts, the bank labelled the payments as “Partial deposit on sale of TCT No. 138914”, while it noted the 4th receipt as “Partial/Full payment on deposit on sale of A/asset TCT No. 138914.”
In the meantime, the PELA members remained in the property and introduced further improvements.
On November 29, 1993, Al-Amanah, thru Davao Branch Manager Abraham D. Ututalum-Al Haj, wrote then PELA President Bonifacio Cuizon, Sr. informing him of the Head Office’s disapproval of PELA’s offer to buy the said 2,000-square meter lot.
Subsequently, Al-Amanah sent similarly worded letters, all dated December 14, 1993, to 19 PELA members demanding that they vacate the lot.
In a letter dated December 20, 1993, PELA, through Atty. Pedro S. Castillo, replied that it had already reached an agreement with Al-Amanah regarding the sale of the subject lot based on their offered price.
Meanwhile, acting on Robern’s undated written offer, Al-Amanah issued a Recommendation Sheet dated December 27, 1993 addressed to its Board Operations Committee, indicating therein that Robern is interested to buy the lot for ₱400,000.00; that it has already deposited 20% of the offered purchase price; that it is buying the lot on “as is” basis; and, that it is willing to shoulder the relocation of all informal settlers therein. On December 29, 1993, the Head Office informed the Davao Branch Manager that the Board Operations Committee had accepted Robern’s offer.
In a letter dated January 13, 1994, Robern expressed to Al-Amanah its uncertainty on the status of the subject lot.
To convince Robern that it has no existing contract with PELA, Al-Amanah furnished it with copies of the Head Office’s rejection letter of PELA’s bid, the demand letters to vacate, and the proof of consignment of PELA’s ₱150,000.00 deposit to the Regional Trial Court (RTC) of Davao City that PELA refused to withdraw.
On March 4, 1994, Robern paid the balance of the purchase price. The Deed of Sale over the realty was executed on April 6, 1994 and TCT No. T-21298325 was issued in Robern’s name the following day.
A week later, PELA consigned ₱150,000.00 in the RTC of Davao City.
Three months later, as its members were already facing eviction and possible demolition of their houses, and in order to protect their rights as vendees, PELA filed a suit for Annulment and Cancellation of Void Deed of Sale29 against Al-Amanah.
In its August 10, 1999 Decision, the RTC dismissed PELA’s Complaint. It opined that the March 18, 1993 letter PELA has been relying upon as proof of a perfected contract of sale was a mere offer which was already rejected.
Reversing the RTC in its assailed Decision37 of August 16, 2005, the CA ruled that there was already a perfected contract of sale between PELA and Al-Amanah. It held that the annotationon the lower portion of the March 18, 1993 letter could be construed to mean that for Al-Amanah to accept PELA’s offer, the sum of ₱150,000.00 must be first put up.
Issue: Whether there was a perfected contract of sale between PELA and Al-Amanah, the resolution of which will decide whether the sale of the lot to Robern should be sustained or not.
Ruling:
NO. A contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. Thus, for a contract of sale to be valid, all of the following essential elements must concur: “a) consent or meeting of the minds; b) determinate subject matter; and c) price certain in money or its equivalent.”
In the case at bench, there is no controversy anent the determinate subject matter, i.e., the 2,000-square meter lot. This leaves us to resolve whether there was a concurrence of the remaining elements.
As for the price, fixing it can never be left to the decision of only one of the contracting parties. “But a price fixed by one of the contracting parties, if accepted by the other, gives rise to a perfected sale.”
As regards consent, “when there is merely an offer by one party without acceptance of the other, there is no contract.” The decision to accept a bidder’s proposal must be communicated to the bidder. However, a binding contract may exist between the parties whose minds have met, although they did not affix their signatures to any written document,54 as acceptance may be expressed or implied.55 It “can be inferred from the contemporaneous and subsequent acts of the contracting parties.” Thus, we held:
x x x The rule is that except where a formal acceptance is so required, although the acceptance must be affirmatively and clearly made and must be evidenced by some acts or conduct communicated to the offeror, it may be made either in a formal or an informal manner, and may be shown by acts, conduct, or words of the accepting party that clearly manifest a present intention or determination to accept the offer to buy or sell. Thus, acceptance may be shown by the acts, conduct, or words of a party recognizing the existence of the contract of sale.
There is no perfected contract of sale between PELA and Al-Amanah for want of consent and agreement on the price.
After scrutinizing the testimonial and documentary evidence in the records of the case, we find no proof of a perfected contract of sale between Al-Amanah and PELA. The parties did not agree on the price and no consent was given, whether express or implied.
When PELA Secretary Florida Ramos (Ramos) testified, she referred to the March 18, 1993 letter which PELA sent to Al-Amanah as the document supposedly embodying the perfected contract of sale. However, we find that the March 18, 1993 letter referred to was merely an offer to buy.
Neither can the note written by the bank that “subject offer has been acknowledged/received but processing to take effect upon putting up of the partial amount of ₱150,000.00 on or before April 15, 1993” be construed as acceptance of PELA’s offer to buy. Taken at face value, the annotation simply means that the bank merely acknowledged receipt of PELA’s letter-offer. Furthermore, by ‘processing,’ Al-Amanah only meant that it will ‘act on the offer’, i.e., it still has to evaluate whether PELA’s offer is acceptable. Until and unless Al-Amanah accepts, there is as yet no perfected contract of sale. Notably here, the bank never signified its ‘approval’ or ‘acceptance’ of the offer.
It is thus undisputed, and PELA even acknowledges, that OIC Dalig made it clear that the acceptance of the offer, notwithstanding the deposit, is subject to the approval of the Head Office. Recognizing the corporate nature of the bank and that the power to sell its real properties is lodged in the higher authorities, she never falsely represented to the bidders that she has authority to sell the bank’s property. And regardless of PELA’s insistence that she execute a written agreement of the sale, she refused and told PELA to wait for the decision of the Head Office, making it clear that she has no authority to execute any deed of sale.
In the case at bench, the transaction between Al-Amanah and PELA remained in the negotiation stage. The offer never materialized into a perfected sale, for no oral or documentary evidence categorically proves that Al-Amanah expressed amenability to the offered ₱300,000.00 purchase price.