SPS. JORGE NAVARRA ET AL. v. PLANTERS DEVT. BANK ET AL.

[G.R. No. 172674, July 12, 2007527 SCRA 562]

FACTS:
The Navarras obtained a loan of P1, 200,000.00 from Planters Bank and,
by way of security, they executed a deed of mortgage over their five (5) parcels
of land which are the subject of this controversy. Hence, Planters Bank foreclosed
on the mortgage and mortgaged assets were sold to it for P 1,341,850.00, it
being the highest bidder in the auction sale. The one-year redemption period
expired without the Navarras having redeemed the foreclosed properties.
On the other hand, co-petitioner RRRC is a real estate company owned by
the parents of Carmelita Navarra. RRRC itself obtained a loan from Planters Bank
secured by a mortgage over another set of properties owned by RRRC. The loan
having been similarly unpaid the bank foreclosed the mortgaged assets of RRRC.
Unlike the Navarras, RRRC was able to negotiate its foreclosed properties by way
of a concession. The foreclosed properties were sold to third persons whose
payments were directly made to the bank and in excess by P 300, 000.00 for the
redemption price. On July 18, 1985, Jorge Navarra sent a letter to the Planters
Bank, proposing to repurchase the five (5) lots, with a request that he be given
until August 31, 1985 to pay the downpayment of P 300,000.00. In response,
Planters Bank agreed to the request. Jorge Navarra also requeted that the excess
payment of P300, 000.00 in connection with the redemption made by the RRRC
be applied as downpayment for their foreclosed properties. Because the amount
of P300,000.00 was sourced from a different transaction between RRRC and
Planters Bank and involved different debtors, the Bank required Navarra to
submit a board resolution from RRRC authorizing him to negotiate for and its
behalf and empowering him to apply the excess amount as down payment. The
Navarras, however, failed to comply with Planters Banks request. Thus, the bank
sent a notice demanding the Navarras to surrender and vacate the properties in
question for their failure to exercise their right of redemption.
The Navarras filed their complaint in the RTC of Makati City for specific
Performance with Injunction against Planters Bank. In their complaint they
alleged that a perfected contract of sale was made between them and the
Planters Bank whereby they would repurchase the subject properties for P 1,
800, 000.00 with a down payment of P 300,000.00. The Planters Bank asserted
on the other hand that there was no perfected contract of sale because the
terms and conditions for the repurchase have not yet been agreed upon. I a
decision, the trial court ruled that there was a perfected contract of sale.
Therefrom the respondents went on appeal to the CA. The appellate court in its
decision reversed that of the trial court and ruled that there was no perfected
contract of sale between the parties.
ISSUE:
Whether or not there was no perfected contract to repurchase the
foreclosed properties between the Navarras and Planters Bank?
DECISION:
The Supreme Court held that there was no perfected contract of sale
between the Navarras and Planters Bank.

In this case the Navarras assert that the exchange of correspondence

between them and Planters bank constitute the offer and acceptance. The
Supreme Court said that the offer and acceptance is not certain and absolute so
as to engender a meeting of the minds between the parties. While the letters
indicate the amount of P300, 000.00 as down payment, they are however,
completely silent as to how the succeeding installments shall be made. At most,
the letter merely acknowledges that the down payment of P 300, 000.00 was
agreed upon by the parties. However, this fact cannot lead to the conclusion that
the contract of sale was perfected. This Court held before a valid and binding
contract of sale can exist, the manner of payment of the purchase price must be
established since the agreement on the manner of payment goes into the price
such that a disagreement on the manner of payment is tantamount to a failure to
agree on the price.
Clearly, then, the lack of a definite offer on the part of the spouses could
not possibly serve as the basis of their claim that the sale/repurchase of their
foreclosed properties was perfected. The reason is obvious: one essential
element of a contract of sale is wanting: the price certain. There can be no
contract of sale unless the following elements concur: (a) consent or meeting of
the minds; (b) determinate subject matter; and (c) price certain in money or its
equivalent. Such contract is born or perfected from the moment there is a
meeting of minds upon the thing which is the object of the contract and upon the
price. Here, what is dramatically clear is that there was no meeting of minds visa-vis the price, expressly or impliedly, directly or indirectly. Further, the tenor of
Planters Banks letter-reply negates the contention of the Navarras that the Bank
fully accepted their offer. The letter specifically stated that there is a need to
negotiate on the other details of the transaction] before the sale may be
formalized. Such statement in the Banks letter clearly manifests lack of
agreement between the parties as to the terms of the purported contract of
sale/repurchase, particularly the mode of payment of the purchase price and the
period for its payment. The law requires acceptance to be absolute and
unqualified. As it is, the Banks letter is not the kind which would constitute
acceptance as contemplated by law for it does not evince any categorical and
unequivocal undertaking on the part of the Bank to sell the subject properties to
the Navarras.
The failure of the spouses to submit the required board resolution
precludes the perfection of a contract of sale/repurchase between the parties. As
earlier mentioned, contracts are perfected when there is concurrence of the
parties wills, manifested by the acceptance by one of the offer made by the
other. Here, there was no concurrence of the offer and acceptance as would
result in a perfected contract of sale.