Issue: WON there was perfected Contract of Sale
Navarra Vs. Planters
Facts:
• Spouses Jorge and Carmelita Navarra obtained loan
of 1.2 M from Planters Bank.
• They mortagaged 5 LOTS for security. Couple failed
to pay, so the bank foreclosed on the mortgage and
sold it for more than 1.3 M. Bank was highest bidder.
1 year redemption expired w/o it having been
redeemed by couple.
• RRRC Development Corporation on the other hand,
a real estate company owned by the parents of
Carmelita, obtained a loan with the same bank. They
also mortgaged a certain property as security. They
also failed to pay and the mortgaged assets was
foreclosed. BUT they were able to negotiate with the
bank by way of concession .
• Eventually, the foreclosed properties of RRRC were
sold to third persons whose payments were directly
made to the Bank, were in excess by P300,000.00 for
the redemption price.
• In July 1985 - Back to the spouses, Jorge sent a
letter to the bank proposing to repurchase the said 5
LOTS previously foreclosed.
• In response, Planters Bank, thru its Vice-President
wrote back Navarra via a letter agreeing to the
request and telling him to see the Head of the bank’s
Acquired Assets Unit for the details of the transaction
so that they may work on the necessary
documentation.
• In August 1985 - Jorge went to see the Head with a
letter requesting that the excess payment
ofP300,000.00 in connection with the redemption
made by the RRRC be applied as down payment for
the Navarras’ repurchase of their foreclosed
properties but 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 use the
amount
• In Jan 1987 - Planters Bank sent a letter to Jorge
Navarra informing him that it could not proceed with
the documentation of the proposed repurchase of the
foreclosed properties on account of his non-
compliance with the Bank’s request for the
submission of the needed board resolution of RRRC.
Navarra claimed having already delivered copies of
the required board resolution to the Bank. The Bank,
however, did not receive said copies.
• In June 1987 - Navarras filed their complaint for
Specific Performance against bank. Planters Bank
asserted however that there was no perfected
contract of sale because the terms and conditions for
the repurchase have not yet been agreed upon
• Sep 1988 – Planters bank sold the properties to
Gatchalian Realty
• RTC ruled for the Navarra spouses and said there
was perfected Contract of Sal.
• The CA reversed the trial court ruling.
Ruling: NO. SC upheld the CA decision.
Navarras assert that the following exchange of
correspondence between them and Planters Bank
constitutes the offer and acceptance. The July 1985
letter being the offer from Navarra and the Aug 1985
letter-reply from the Bank the acceptance. BUT SUCH
WERE NOT “CERTAIN OFFER” and “ABSOLUTE
ACCEPTANCE”.
While the foregoing letters indicate the amount of
P300,000.00 as down payment, they are, however,
completely silent as to how the succeeding
installment payments shall be made. At most, the
letters merely acknowledge that the down payment of
P300,000.00 was agreed upon by the parties.
However, this fact cannot lead to the conclusion that a
contract of sale had been perfected. Quite recently,
this Court held that before a valid and binding contract
of sale can exist, the manner of payment of the
purchase price must first 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.
Navarras’ letter/offer failed to specify a definite
amount of the purchase price for the sale/repurchase
of the subject properties. It merely stated that the
"purchase price will be based on the redemption value
plus accrued interest at the prevailing rate up to the
date of the sales contract." The ambiguity of this
statement only bolsters the uncertainty of the
Navarras’ so-called "offer" for it leaves much rooms
for such questions.
Also not clear insofar as concerned the exact number
of years that will comprise the long-term payment
scheme. As we see it, the absence of a stipulated
period within which the repurchase price shall be paid
all the more adds to the indefiniteness of the
Navarras’ offer.
Further, the tenor of Planters Bank’s 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 Bank’s 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.