G.R. No.

112796

March 5, 1998

TITO R. LAGAZO, petitioner,

vs.
COURT OF APPEALS and ALFREDO CABANLIT, respondents.
FACTS:
Although the legal conclusions and dispositions of the trial and the appellate
courts are conflicting, the factual antecedents of the case are not substantially
disputed.5 We reproduce their narration from the assailed Decision:
Civil Case No. 83-39133 involves an action filed by plaintiff-appellee [herein
petitioner] on January 22, 1987 seeking to recover from defendant-appellant [a]
parcel of land which the former claims to have acquired from his grandmother by
donation. Defendant-appellant [herein private respondent], on the other hand, put
up the defense that when the alleged donation was executed, he had already
acquired the property by a Deed of Assignment from a transferee of plaintiffappellee's grandmother.
The evidence for plaintiff-appellee [herein petitioner] is summarized as follows:
Catalina Jacob Vda. de Reyes, a widow and grandmother of plaintiff-appellee, was
awarded in July 1975 a 60.10-square meter lot which is a portion of the Monserrat
Estate, more particularly described as Lot 8W, Block 6 of Psd-135834, located at
3320 2nd St., V. Mapa, Old Sta. Mesa, Manila. The Monserrat Estate is a public land
owned by the City of Manila and distributed for sale to bona fide tenants under its
land-for-the-landless program. Catalina Jacob constructed a house on the lot.
On October 3, 1977, or shortly before she left for Canada where she is now a
permanent resident, Catalina Jacob executed a special power of attorney (Exh. "A")
in favor of her son-in-law Eduardo B. Espaol authorizing him to execute all
documents necessary for the final adjudication of her claim as awardee of the lot.
Due to the failure of Eduardo B. Espaol to accomplish the purpose of the power of
attorney granted to him, Catalina Jacob revoked said authority in an instrument
executed in Canada on April 16, 1984 (Exh. "D"). Simultaneous with the revocation,
Catalina Jacob executed another power of attorney of the same tenor in favor
plaintiff-appellee.
On January 30, 1985, Catalina Jacob executed in Canada a Deed of Donation over a
Lot 8W in favor of plaintiff-appellee (Exh. "E"). Following the donation, plaintiffappellee checked with the Register of Deeds and found out that the property was in
the delinquent list, so that he paid the installments in arrears and the remaining
balance on the lot (Exhs. "F", "F-1" and "F-2") and declared the said property in the
name of Catalina Jacob (Exhs. "G", "G-1", "G-2" and "G-3").
On January 29, 1986, plaintiff-appellee sent a demand letter to defendant-appellant
asking him to vacate the premises (Exh. "H"). A similar letter was sent by plaintiffappellee's counsel to defendant on September 11, 1986 (Exh. "I"). However,
defendant-appellant refused to vacate the premises claiming ownership thereof.

Hence, plaintiff-appellee instituted the complaint for recovery of possession and

damages against defendant-appellant.
Opposing plaintiff-appellee's version, defendant-appellant claimed that the house
and lot in controversy were his by virtue of the following documents:

1.
Deed of Absolute Sale executed by Catalina Jacob dated October 7, 1977 in
favor of Eduardo B. Espaol covering the residential house located at the premises
(Exh. "4").

2.
Deed of Assignment over Lot 8W executed by Catalina Jacob in favor of
Eduardo Espaol dated September 30, 1980 (Exh. "5"); and

3.
Deed of Assignment executed by Eduardo B. Espaol over Lot 8W and a
residential house thereon in favor of defendant-appellant dated October 2, 1982
(Exh. "6").

After trial, the lower court decided in favor of plaintiff-appellee and against
defendant-appellant, rationalizing that the version of the former is more credible
than that of the latter. According to the lower court:
From the oral and documentary evidence adduced by the parties[,] it appears that
the plaintiff- has a better right over the property, subject matter of the case. The
version of the plaintiff is more credible than that of the defendant. The theory of the
plaintiff is that the house and lot belong to him by virtue of the Deed of Donation in
his favor executed by his grandmother Mrs. Jacob Vda. de Reyes, the real awardee
of the lot in question. The defendant's theory is that he is the owner thereof
because he bought the house and lot from Eduardo Espaol, after the latter had
shown and given to him Exhibits 1, 4 and 5. He admitted that he signed the Deed of
Assignment in favor of Eduardo Espaol on September 30, 1980, but did not see
awardee Catalina Jacob Vda. de Reyes signed [sic] it. In fact, the acknowledgement
in Exhibit "5" shows that the assignor/awardee did not appear before the notary
public. It may be noted that on said date, the original awardee of the lot was no
longer in the Philippines, as both parties admitted that she had not come back to
the Philippines since 1977. (Exhs. K, K-1). Defendant, claiming to be the owner of
the lot, unbelievably did not take any action to have the said house and lot be
registered or had them declared in his own name. Even his Exhibit 7 was not mailed
or served to the addressee. Such attitude and laxity is very unnatural for a
buyer/owner of a property, in stark contrast of [sic] the interest shown by the
plaintiff who saw to it that the lot was removed from the delinquent list for nonpayment of installments and taxes due thereto .
Main Issue:

Simple or Onerous Donation?

RULING:
At the outset, let us differentiate between a simple donation and an onerous
one. A simple or pure donation is one whose cause is pure liberality (no strings
attached), while an onerous donation is one which is subject to burdens, charges or
future services equal to or more in value than the thing donated. 10 Under Article
733 of the Civil Code, donations with an onerous cause shall be governed by the
rules on contracts; hence, the formalities required for a valid simple donation are
not applicable.
Petitioner contends that the burdens, charges or conditions imposed upon a
donation need not be stated on the deed of donation itself. Thus, although the deed
did not categorically impose any charge, burden or condition to be satisfied by him,
the donation was onerous since he in fact and in reality paid for the installments in
arrears and for the remaining balance of the lot in question. Being an onerous
donation, his acceptance thereof may be express or implied, as provided under Art.
1320 of the Civil Code, and need not comply with the formalities required by Art.
749 of the same code. His payment of the arrearages and balance and his assertion
of his right of possession against private respondent clearly indicate his acceptance
of the donation.
We rule that the donation was simple, not onerous. Even conceding that petitioner's
full payment of the purchase price of the lot might have been a burden to him, such
payment was not however imposed by the donor as a condition for the donation.
Rather, the deed explicitly stated:
That for and in consideration of the love and affection which the DONEE inspires in
the DONOR, and as an act of liberality and generosity and considering further that
the DONEE is a grandson of the DONOR, the DONOR hereby voluntarily and freely
gives, transfer[s] and conveys, by way of donation unto said DONEE, his heirs,
executors, administrators and assigns, all the right, title and interest which the said
DONOR has in the above described real property, together with all the buildings and
improvements found therein, free from all lines [sic] and encumbrances and charges
whatsoever; 11 [emphasis supplied]
It is clear that the donor did not have any intention to burden or charge petitioner
as the donee. The words in the deed are in fact typical of a pure donation. We agree
with Respondent Court that the payments made by petitioner were merely his
voluntary acts. This much can be gathered from his testimony in court, in which he
never even claimed that a burden or charge had been imposed by his grandmother.
In the words of the esteemed Mr. Justice Jose C. Vitug, 14 "Like any other
contract, an agreement of the parties is essential. The donation, following the
theory of cognition (Article 1319, Civil Code), is perfected only upon the moment
the donor knows of the acceptance by the donee." Furthermore, "[i]f the acceptance
is made in a separate instrument, the donor shall be notified thereof in an authentic
form, and this step shall be noted in both instruments."

Acceptance of the donation by the donee is, therefore, indispensable; its

absence makes the donation null and void. True, the acceptance of a donation may
be made at any time during the lifetime of the donor. And granting arguendo that
such acceptance may still be admitted in evidence on appeal, there is still need for
proof that a formal notice of such acceptance was received by the donor and noted
in both the deed of donation and the separate instrument embodying the
acceptance. At the very least, this last legal requisite of annotation in both
instruments of donation and acceptance was not fulfilled by petitioner. For this
reason, the subject lot cannot be adjudicated to him.

ROSENSTOCK VS BURKE
Facts:
Defendant Edwin Burke owned a motor yacht, known as Bronzewing, which
he acquired in Australia in 1920. He wanted to sell the yacht and after several
months plaintiff H. W. Elser, at the beginning of the year 1922, began negotiations
with the defendant for the purchase of it. The plan of the plaintiff was to organize a
yacht club and sell it afterwards the yacht for P120,000, of which P20,000 was to be
retained by him as commission and the remaining P100,000 to be paid to the
defendant. To be able to sell the yacht, he wanted to make a voyage on board the
yacht with business men so that he could make a sale to them. But the yacht
needed some repairs which in turn, plaintiff paid for because defendant had no
budget for that. It has been stipulated that the plaintiff was not to pay anything for
the use of the yacht. Because of the said repairs, plaintiff loaned money from the
Asia Banking Corporation. Since it amounted to its maximum amount already, the
bank could no longer give loans to plaintiff. Defendant now gave plaintiff the option
of sale to plaintiff amounting to P80,000; P5,000 each month during the first six
months and P10,000 thereafter until full payment of the price. Plaintiff in turn
agreed by letter. Defendant demanded the plaintiff for performance after he
accepted the offer of plaintiff for the purchase of the yacht. However, plaintiff now
brings action to recover the sum of money he used for repairs of the yacht.

Issue:

Whether or not there was a valid contract of sale which is binding against
plaintiff as used in the letter of offer which was accepted by the defendant.

Held:

The Supreme Court held that it was not a valid contract of sale. The words
used by plaintiff could not be interpreted as a definite offer to purchase the yacht,
but simply a position to deliberate whether or not he would purchase the yacht. It
was but a mere invitation to a proposal being made to him, which might be
accepted by him or not. He used such words as, I am in position and am willing to

entertain the purchase of the yacht. not I want to buy the yacht. Furthermore,
the plaintiff wanted to organize a yacht club and the only thing he wanted from
defendant was he sells it so that he could profit from it if he re-sells it. The letter of
the plaintiff not containing a definite offer but a mere invitation to an offer being
made to him. Plaintiff is bound to pay the amount of the repairs of the yacht in
exchange for the use thereof.

FRANCISCO BATAGAN, plaintiff-appellant,

vs.
ISIDRA COJUANGCO, defendant-appellee.
This is the third time appellant has come to this court. The three cases
stemmed from the foreclosure of a mortgage. In the first case, appellant undertook
to compel the Court of First Instance of Nueva Ecija to approved his record on
appeal. There he attacked the validity of the lower court's judgment on the ground
that the agreement embodied therein was fraudulent. The petition was denied. The
second was an appeal from an order of the trial court refusing to set aside the sale
of the mortgaged property by the sheriff. In that appeal, the appellant again failed.
Now he seeks to have the appellee resell to him the property. It is a suit in the
nature of an action for specific performance based on a statement in the brief of the
appellee in the case for annulment of the sale. This statement was copied in this
court's decision as a footnote to the court's conclusion that "appellant has no right
to redeem the property sold pursuant to the foreclosure of the mortgage thereon." It
reads:
In order to impress the appellant that appellee is not interested in owning the
mortgaged property and that she was only forced for lack of another buyer to
acquire it in the auction sale, she is willing to resell the property to him for the same
amount in which it was purchased at the auction sale, that is, for P1,508.28,
provided it be in cash.

Other pertinent facts in this connection are these:

Our decision was promulgated on September 27, 1943. On October 29, 1943, Atty.
Marcelino Lontok, who has represented the herein appellant in the three cases, sent
Isidra Cojuangco a missive with three postal money orders for P800, stating that he
was remitting that amount in behalf of his client "in accordance with your
agreement," and promising to pay the balance "at the shortest possible time." The

amount was rejected by Mrs. Cojuangco, who told she had not had any agreement
with his client. On January 28, 1944, Atty. Lontok sent a letter through a messenger
to Mrs. Cojuangco's counsel, Atty. Antonio Lucero, in Manila, enclosing the same
money orders for P800 and P708.30 in paper money. This tender was also refused.
On January 7, 1944, Attorney Lontok came to this court with a motion to order the
appellee to comply with the offer she had made in her brief. That motion was
"rejected" in a resolution dated February 18, 1944, "for having been filed after the
entry of judgment."
The suit at bar is a reiteration of the motion just mentioned. Because of their
identity, our resolution denying the motion to compel Cojuangco to live up to her
commitment was set up as a bar to the present action. The plea was overruled by
the lower court as not well taken. The lower court also declared that "the statement
contained in the brief of the defendant herein in G.R. No. 48980 and footnoted in
the decision of the Supreme Court (was) a promise on the part of the defendant
herein to resell the land in question to the plaintiff herein." Nevertheless it found
that "the time for him (Batagan) to accept the promise was from the date of the
brief of the defendant herein in G.R. No. 48980 until the entry of judgment," and
that the acceptance having been made after the judgment had been rendered, it
came too late.

The question of the conclusiveness of our resolution referred to is not pressed in this
appeal. Apparently abandoning her plea in this regard, the appellee makes no
reference in her brief to her former contention that this action is res adjudicata. And
she seems to take for granted that the signification in her brief of her willingness to
allow the repurchase of the property constituted a formal offer that could have
served as basis for the creation of legal relations.

The sole question on which the parties have joined issue in this appeal relates to
whether the appellee's offer has been duly accepted by the appellant. We are of the
opinion that the acceptance was tardy. An offer of compromise settlement must be
accepted within a reasonable time. (15 C.J.S., section 7.) And acceptance or
rejection of an offer of compromise may be inferred from circumstances. (Id.) The
appellant's failure to act on the offer before the judgment was entered was an
implied rejection of said offer. In pushing the appeal to final conclusion the appellant
made it clear that he was not interested in his creditor's liberal concession. A
compromise has for its purpose the avoidance or termination of a law suit. (Article
1809, Civil Code.) With the rendition of judgment the reason which induced the
appellee to make her proposition ceased to exist.
Again, acceptance in order to conclude the agreement must in every respect meet
and correspond with the terms and conditions of the offer. (17 C.J.S., 378.) Granting
that the appellant acted on time, payment of P800 fell short of the appellee's
requirement. The appellee wanted P1,508.28 in cash. This was the least she was
entitled to, being the amount which the court below had found to be due her. In her
proposition she did not even include any interest.

The substantial variance between the amount in the offer and the amount tendered
not only made the purported acceptance inoperative but "put an end to the
negotiations without forming a contract unless the party making the offer agreed to
the suggested modification." (17 C.J.S., 383.) Otherwise, as the trial judge aptly
observed, "promisors would be tied to their promises indefinitely and would not be
able to dispose of the property involved" in the promise or offer. In addition, the
promisor would be placed in a position where he would always lose without anything
to gain. The promisee could wait until judgment is rendered and accepted the offer
of compromise if the judgment happened to be more onerous to him.
Appellant assigns as error the refusal of the trial court to make the finding that
there was a new agreement entered into between the appellant and the appellee
whereby the appellee would allow appellant to make a down payment of P800 and
to pay the balance afterward.
This case was submitted and decided on the pleadings. No evidence was
introduced. This assignment of error involves a question of fact which the plaintiff
should have proven by competent evidence. His only reliance is on Exhibit 4 which
is Attorney Lontok's letter is self-serving and is absolutely incompetent as proof of
the alleged agreement. The reference in Exhibit 4 to an alleged understanding
between the parties might have been made in contemplation of this suit. The
argument which the appellant, who came to Manila purposely to see her, would
dare send her such amount without any agreement," tends to confirm this
possibility. It is of interest to know that there is not the slightest intimation of such
agreement in the complaint.

The judgment of the lower court is affirmed with costs against the appellant.
G.R. No. 16530
March 31, 1922
MAMERTO LAUDICO and FRED M. HARDEN, plaintiffs-appellants,
vs.
MANUEL ARIAS RODRIGUEZ, ET AL., defendants-appellants.
On February 5, 1919, the defendant, Vicente Arias, who, with his
codefendants, owned the building Nos. 205 to 221 on Carriedo Street, on his behalf
and that of his coowners, wrote a letter to the plaintiff, Mamerto Laudico, giving him
an option to lease the building to a third person, and transmitting to him for that
purpose a tentative contract in writing containing the conditions upon which the
proposed lease should be made. Later Mr. Laudico presented his coplaintiff, Mr. Fred.
M. Harden, as the party desiring to lease the building. On one hand, other
conditions were added to those originally contained in the tentative contract, and,
on the other, counter-propositions were made and explanations requested on
certain points in order to make them clear. These negotiations were carried on by
correspondence and verbally at interviews held with Mr. Vicente Arias, no definite
agreement having been arrived at until the plaintiff, Mr. Laudico, finally wrote a
letter to Mr. Arias on March 6, 1919, advising him that all his propositions, as
amended and supplemented, were accepted. It is admitted that this letter was

received by Mr. Arias by special delivery at 2.53 p.m. of that day. On that same day,
at 11.25 in the morning, Mr. Arias had, in turn, written a letter to the plaintiff, Mr.
Laudico, withdrawing the offer to lease the building.
The chief prayer of the plaintiff in this action is that the defendants be compelled to
execute the contract of lease of the building in question. It thus results that when
Arias sent his letter of withdrawal to Laudico, he had not yet received the letter of
acceptance, and when it reached him, he had already sent his letter of withdrawal.
Under these facts we believe that no contract was perfected between the plaintiffs
and the defendants.
The parties agree that the circumstances under which that offer was made were
such that the offer could be withdrawn at any time before acceptance.
Under article 1262, paragraph 2, of the Civil Code, an acceptance by letter does not
have any effect until it comes to the knowledge of the offerer. Therefore, before he
learns of the acceptance, the latter is not yet bound by it and can still withdraw the
offer. Consequently, when Mr. Arias wrote Mr. Laudico, withdrawing the offer, he had
the right to do so, inasmuch as he had not yet receive notice of the acceptance. And
when the notice of the acceptance was received by Mr. Arias, it no longer had any
effect, as the offer was not then in existence, the same having already been
withdrawn. There was no meeting of the minds, through offer and acceptance,
which is the essence of the contract. While there was an offer, there was no
acceptance, and when the latter was made and could have a binding effect, the
offer was then lacking. Though both the offer and the acceptance existed, they did
not meet to give birth to a contract.
Our attention has been called to a doctrine laid down in some decisions to the effect
that ordinarily notice of the revocation of an offer must be given to avoid an
acceptance which may convert in into a binding contract, and that no such notice
can be deemed to have been given to the person to whom the offer was made
unless the revocation was in fact brought home to his knowledge.

This, however, has no application in the instant case, because when Arias received
the letter of acceptance, his letter of revocation had already been received. The
latter was sent through a messenger at 11.25 in the morning directly to the office of
Laudico and should have been received immediately on that same morning, or at
least, before Arias received the letter of acceptance. On this point we do not give
any credence to the testimony of Laudico that he received this letter of revocation
at 3.30 in the afternoon of that day. Laudico is interested in destroying the effect of
this revocation so that the acceptance may be valid, which is the principal ground of
his complaint.
But even supposing Laudico's testimony to be true, still the doctrine invoked has no
application here. With regard to contracts between absent persons there are two
principal theories, to wit, one holding that an acceptance by letter of an offer has no
effect until it comes to the knowledge of the offerer, and the other maintaining that
it is effective from the time the letter is sent.

The Civil Code, in paragraph 2 of article 1262, has adopted the first theory and,
according to its most eminent commentators, it means that, before the acceptance
is known, the offer can be revoked, it not being necessary, in order for the
revocation to have the effect of impeding the perfection of the contract, that it be
known by the acceptant. Q. Mucius Scaevola says apropros: "To our mind, the power
to revoke is implied in the criterion that no contract exists until the acceptance is
known. As the tie or bond springs from the meeting or concurrence of the minds,
since up to that moment there exists only a unilateral act, it is evident that he who
makes it must have the power to revoke it by withdrawing his proposition, although
with the obligation to pay such damages as may have been sustained by the person
or persons to whom the offer was made and by whom it was accepted, if he in turn
failed to give them notice of the withdrawal of the offer. This view is confirmed by
the provision of article 1257, paragraph 2, concerning the case where a stipulation
is made in favor of a third person, which provision authorizes the contracting parties
to revoke the stipulation before the notice of its acceptance. That case is quite
similar to that under comment, as said stipulation in favor of a third person (who,
for the very reason of being a third person, is not a contracting party) is tantamount
to an offer made by the makers of the contract which may or may not be accepted
by him, and which does not have any effect until the obligor is notified, and may,
before it is accepted, be revoked by those who have made it; therefore, the case
being similar, the same rule applies."
Under the second theory, the doctrine invoked by the plaintiffs is sound, because if
the sending of the letter of acceptance in itself really perfects the contract, the
revocation of the offer, in order to prevent it, must be known to the acceptor. But
this consideration has no place in the first theory under which the forwarding of the
letter of acceptance, in itself, does not have any effect until the acceptance is
known by the person who has made the offer.
The judgment appealed from is reversed and the defendants are absolved from the
complaint, without special finding as to costs. So ordered.

G.R. No. 177783

January 23, 2013

HEIRS OF FAUSTO C. IGNACIO, namely MARFEL D. IGNACIO-MANALO, MILFA

D. IGNACIO-MANALO AND FAUSTINO D. IGNACIO, Petitioners,
vs.
HOME BANKERS SAVINGS AND TRUST COMPANY, SPOUSES PHILLIP AND
THELMA RODRIGUEZ, CATHERINE, REYNOLD & JEANETTE, all surnamed
ZUNIGA, Respondents.
FACTS:

In August 1981, petitioner Fausto C. Ignacio mortgaged two parcels of land to

Home Savings Bank and Trust Company, the predecessor of respondent Home
Bankers Savings and Trust Company, as security for the P500,000.00 loan extended
to him by said bank. These properties which are located in Cabuyao, Laguna are
covered by Transfer Certificate of Title Nos. (T-40380) T-8595 and (T-45804) T-8350
containing an area of 83,303 square meters and 120,110 square meters,
respectively.4
When petitioner defaulted in the payment of his loan obligation, respondent bank
proceeded to foreclose the real estate mortgage. At the foreclosure sale held on
January 26, 1983, respondent bank was the highest bidder for the sum of
P764,984.67. On February 8, 1983, the Certificate of Sale issued to respondent bank
was registered with the Registry of Deeds of Calamba, Laguna. With the failure of
petitioner to redeem the foreclosed properties within one year from such
registration, title to the properties were consolidated in favor of respondent bank.
Consequently, TCT Nos. T-8595 and T-8350 were cancelled and TCT Nos. 111058
and 111059 were issued in the name of respondent bank.5
Despite the lapse of the redemption period and consolidation of title in respondent
bank, petitioner offered to repurchase the properties. While the respondent bank
considered petitioner's offer to repurchase, there was no repurchase contract
executed. The present controversy was fuelled by petitioner's stance that a verbal
repurchase/compromise agreement was actually reached and implemented by the
parties.
In the meantime, respondent bank made the following dispositions of the foreclosed
properties already titled in its name:
TCT No. 111059 (Subdivided into six lots with individual titles - TCT Nos. 117771,
117772, 117773, 117774, 117775 and 117776)
A. TCT No. 117771 (16,350 sq.ms.) - Sold to Fermin Salvador and Bella Salvador
under Deed of Absolute Sale dated May 23, 1984 for the price of P150,000.00
B. TCT No. 11772 (82,569 sq.ms. subdivided into 2 portions
1) Lot 3-B-1 (35,447 sq.ms.) - Sold to Dr. Oscar Remulla and Natividad Pagtakhan,
Dr. Edilberto Torres and Dra. Rebecca Amores under Deed of Absolute Sale dated
April 17, 1985 for the price of P150,000.00
2) Lot 3-B-2 covered by separate title TCT No. 124660 (Subdivided into 3 portions Lot 3-B-2-A (15,000 sq.ms.) - Sold to Dr. Myrna del Carmen Reyes under Deed of
Absolute Sale dated March 23, 1987 for the price of P150,000.00
Lot 3-B-2-B (15,000 sq.ms.) - Sold to Dr. Rodito Boquiren under Deed of Absolute
Sale dated March 23, 1987 for the price of P150,000.00
Lot 3-B-2-C (17,122 sq.ms.) covered by TCT No. T-154568 -

C. TCT No.117773 (17,232 sq.ms.) - Sold to Rizalina Pedrosa under Deed of Absolute
Sale dated June 4, 1984 for the price of P150,000.00
The expenses for the subdivision of lots covered by TCT No. 111059 and TCT No.
117772 were shouldered by petitioner who likewise negotiated the abovementioned sale transactions. The properties covered by TCT Nos. T-117774 to
117776 are still registered in the name of respondent bank.6
In a letter addressed to respondent bank dated July 25, 1989, petitioner expressed
his willingness to pay the amount of P600,000.00 in full, as balance of the
repurchase price, and requested respondent bank to release to him the remaining
parcels of land covered by TCT Nos. 111058 and T-154658 ("subject properties").7
Respondent bank however, turned down his request. This prompted petitioner to
cause the annotation of an adverse claim on the said titles on September 18,
1989.8
Prior to the annotation of the adverse claim, on August 24, 1989, the property
covered by TCT No. 154658 was sold by respondent bank to respondent spouses
Phillip and Thelma Rodriguez, without informing the petitioner. On October 6, 1989,
again without petitioner's knowledge, respondent bank sold the property covered by
TCT No T-111058 to respondents Phillip and Thelma Rodriguez, Catherine M. Zuiga,
Reynold M. Zuiga and Jeannette M. Zuiga.9
On December 27, 1989, petitioner filed an action for specific performance and
damages in the RTC against the respondent bank. As principal relief, petitioner
sought in his original complaint the reconveyance of the subject properties after his
payment of P600,000.00.10 Respondent bank filed its Answer denying the
allegations of petitioner and asserting that it was merely exercising its right as
owner of the subject properties when the same were sold to third parties.
For failure of respondent bank to appear during the pre-trial conference, it was
declared as in default and petitioner was allowed to present his evidence ex parte
on the same date (September 3, 1990). Petitioner simultaneously filed an "Ex-Parte
Consignation" tendering the amount of P235,000.00 as balance of the repurchase
price.11 On September 7, 1990, the trial court rendered judgment in favor of
petitioner. Said decision, as well as the order of default, were subsequently set aside
by the trial court upon the filing of a motion for reconsideration by the respondent
bank.12
In its Order dated November 19, 1990, the trial court granted the motion for
intervention filed by respondents Phillip and Thelma Rodriguez, Catherine Zuiga,
Reynold Zuiga and Jeannette Zuiga. Said intervenors asserted their status as
innocent purchasers for value who had no notice or knowledge of the claim or
interest of petitioner when they bought the properties already registered in the
name of respondent bank. Aside from a counterclaim for damages against the
petitioner, intervenors also prayed that in the event respondent bank is ordered to
reconvey the properties, respondent bank should be adjudged liable to the
intervenors and return all amounts paid to it.13

On July 8, 1991, petitioner amended his complaint to include as alternative relief

under the prayer for reconveyance the payment by respondent bank of the
prevailing market value of the subject properties "less whatever remaining
obligation due the bank by reason of the mortgage under the terms of the
compromise agreement.

ISSUE: Whether a contract for the repurchase of the foreclosed

properties was perfected between petitioner and respondent bank.
RULING:
The Court sustains the decision of the CA.
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.20 The requisite acceptance of the offer is
expressed in Article 1319 of the Civil Code which states:
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.
In Palattao v. Court of Appeals,21 this Court held that if the acceptance of the
offer was not absolute, such acceptance is insufficient to generate consent
that would perfect a contract. Thus:
Contracts that are consensual in nature, like a contract of sale, are perfected
upon mere meeting of the minds. Once there is concurrence between the
offer and the acceptance upon the subject matter, consideration, and terms
of payment, a contract is produced. The offer must be certain. To convert the
offer into a contract, the acceptance must be absolute and must not qualify
the terms of the offer; it must be plain, unequivocal, unconditional, and
without variance of any sort from the proposal. A qualified acceptance, or
one that involves a new proposal, constitutes a counter-offer and is a
rejection of the original offer. Consequently, when something is desired
which is not exactly what is proposed in the offer, such acceptance is not
sufficient to generate consent because any modification or variation from the
terms of the offer annuls the offer.22
The acceptance must be identical in all respects with that of the offer so as
to produce consent or meeting of the minds.23 Where a party sets a different
purchase price than the amount of the offer, such acceptance was qualified
which can be at most considered as a counter-offer; a perfected contract
would have arisen only if the other party had accepted this counter-offer.24
In Villanueva v. Philippine National Bank25 this Court further elucidated on
the meaning of unqualified acceptance, as follows:

While it is impossible to expect the acceptance to echo every nuance of

the offer, it is imperative that it assents to those points in the offer which,
under the operative facts of each contract, are not only material but
motivating as well. Anything short of that level of mutuality produces not a
contract but a mere counter-offer awaiting acceptance. More particularly on
the matter of the consideration of the contract, the offer and its acceptance
must be unanimous both on the rate of the payment and on its term. An
acceptance of an offer which agrees to the rate but varies the term is
ineffective.
Petitioner submitted as evidence of a perfected contract of repurchase the
March 22, 1984 letter (Exhibit "I")27 from Rita B. Manuel, then President of
UPI, a corporation formed by respondent bank to dispose of its acquired
assets, with notations handwritten by petitioner himself. Said letter reads:
March 22, 1984
Honorable Judge Fausto Ignacio
412 Bagumbayan Street, Pateros
Metro Manila
Dear Judge Ignacio:
Your proposal to repurchase your foreclosed properties located at Cabuyao,
Laguna consisting of a total area of 203,413 square meters has been
favorably considered subject to the following terms and conditions:
1) Total Selling Price shall be P950,000.00
2) Downpayment of P150,00000 with the balance
Payable in Three (3) equal installments
as follows:
1st Installment - P 266,667 - on or before May 31, '84
2nd Installment - P 266,667 - on or before Sept. 31, '84
3rd Installment - P 266,666 - on or before Jan. 30, '85
TOTAL - P 800,000.00
3) All expenses pertinent to the subdivision of the parcel of land consisting of
120,110 square meters shall be for your account.
Thank you,

Very truly yours,

RITA B. MANUEL
President
According to petitioner, he wrote the notations in the presence of a certain
Mr. Lazaro, the representative of Mrs. Manuel (President), and a certain Mr.
Fajardo, which notations supposedly represent their "compromise
agreement."28 These notations indicate that the repurchase price would be
P900,000.00 which shall be paid as follows: P150,000 - end of May '84;
P150,000 - end of June '84; Balance - "Depending on financial position".
Petitioner further alleged the following conditions of the verbal agreement:
(1) respondent bank shall release the equivalent land area for payments
made by petitioner who shall shoulder the expenses for subdivision of the
land; (2) in case any portion of the subdivided land is sold by petitioner, a
separate document of sale would be executed directly to the buyer; (3) the
remaining portion of the properties shall not be subject of respondent bank's
transaction without the consent and authority of petitioner; (4) the petitioner
shall continue in possession of the properties and whatever portion still
remaining, and attending to the needs of its tenants; and (5) payments shall
be made directly to UPI.29
The foregoing clearly shows that petitioner's acceptance of the respondent
bank's terms and conditions for the repurchase of the foreclosed properties
was not absolute. Petitioner set a different repurchase price and also
modified the terms of payment, which even contained a unilateral condition
for payment of the balance (P600,000), that is, depending on petitioner's
"financial position." The CA thus considered the qualified acceptance by
petitioner as a counter-proposal which must be accepted by respondent
bank. However, there was no evidence of any document or writing showing
the conformity of respondent bank's officers to this counter-proposal.
Petitioner contends that the receipts issued by UPI on his installment
payments are concrete proof -- despite denials to the contrary by respondent
bank -- that there was an implied acceptance of his counter-proposal and
that he did not merely act as a broker for the sale of the subdivided portions
of the foreclosed properties to third parties. Since all these receipts, except
for two receipts issued in the name of Fermin Salvador and Rizalina Pedrosa,
were issued in the name of petitioner instead of the buyers themselves,
petitioner emphasizes that the payments were made for his account.
Moreover, petitioner asserts that the execution of the separate deeds of sale
directly to the buyers was in pursuance of the perfected repurchase
agreement with respondent bank, such an arrangement being "an accepted
practice to save on taxes and shortcut paper works."
The Court is unconvinced.

In Adelfa Properties, Inc. v. CA,30 the Court ruled that:

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.31
Even assuming that the bank officer or employee whom petitioner claimed
he had talked to regarding the March 22, 1984 letter had acceded to his own
modified terms for the repurchase, 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. As this Court ruled in AF Realty & Development,
Inc. v. Dieselman Freight Services, Co.32
Section 23 of the Corporation Code expressly provides that the corporate
powers of all corporations shall be exercised by the board of directors. Just as
a natural person may authorize another to do certain acts in his behalf, so
may the board of directors of a corporation validly
delegate some of its functions to individual officers or agents appointed by
it.1wphi1 Thus, contracts or acts of a corporation must be made either by
the board of directors or by a corporate agent duly authorized by the board.
Absent such valid delegation/authorization, the rule is that the declarations
of an individual director relating to the affairs of the corporation, but not in
the course of, or connected with, the performance of authorized duties of
such director, are held not binding on the corporation.33
Thus, a corporation can only execute its powers and transact its business
through its Board of Directors and through its officers and agents when
authorized by a board resolution or its by-laws.34
In the absence of conformity or acceptance by properly authorized bank
officers of petitioner's counter-proposal, no perfected repurchase contract
was born out of the talks or negotiations between petitioner and Mr. Lazaro
and Mr. Fajardo. Petitioner therefore had no legal right to compel respondent
bank to accept the P600,000 being tendered by him as payment for the
supposed balance of repurchase price.

A contract of sale is consensual in nature and is perfected upon mere

meeting of the minds. When there is merely an offer by one party without
acceptance of the other, there is no contract.35 When the contract of sale is
not perfected, it cannot, as an independent source of obligation, serve as a
binding juridical relation between the parties.

G.R. No. 173622

March 11, 2013

ROBERN DEVELOPMENT CORPORATION and RODOLFO M. BERNARDO, JR.,

Petitioners,
vs.
PEOPLE'S LANDLESS ASSOCIATION represented by FLORIDA RAMOS and
NARDO LABORA, Respondent.
FACTS:
Al-Amanah owned a 2000-square meter lot located in Magtu-od, Davao City
and covered by Transfer Certificate of Title (TCT) No. 138914.4 On December 12,
1992, Al-Amanah Davao Branch, thru its officer-in-charge Febe O. Dalig (OIC Dalig),
asked5 some of the members of PELA6 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 P100.00 per square meter,
which Al-Amanah turned down for being far below its asking price.7 Consequently,
Al-Amanah reiterated its demand to the informal settlers to vacate the lot.8
In a letter9 dated March 18, 1993, the informal settlers together with other
members comprising PELA offered to purchase the lot for P300,000.00, 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 P150,000.00 on or before April 15, 1993.

By May 3, 1993, PELA had deposited P150,000.00 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 Offices disapproval of PELAs offer to buy the said 2,000-square meter lot,
viz:
Dear Mr. Cuizon, Sr.,
Please be inform[ed] that your offer to purchase the lot covered by TCT No. T138914, containing an area of 2,000 square meters, located at Bakingan, Barangay
Magtuod, Davao City for P300,000.00 has been turned down by the top
management, due to the reason that your offered price is way below the selling
price of the Bank which is P500.00 per square meter, or negotiate but on Cash basis
only.
You had been told regarding this matter, but you failed to counter offer since you
have [conferred] with the Banks local management. Despite x x x the time given to
you to counter offer or to vacate the lot presently and illegally occupied by you and
the members of the association, still you refrain to hear our previous notices. You
even deliberately construct more residential structures without our permission. As
such, you are finally instructed to vacate the lot and remove all the house structures
erected on the said lot within 15 days upon receipt of this letter. Failure on your part
including that of the members, the Bank will be constrained to take legal action
against you.
Furthermore, you can withdraw the amount deposited in the name of your
association anytime during banking hours.11
Subsequently, Al-Amanah sent similarly worded letters,12 all dated December 14,
1993, to 19 PELA members demanding that they vacate the lot.
In a letter13 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:
Dear Mr. Ututalum-Al-Haj,
The Peoples Landless Association, Inc., through Mr. Bonifacio Cuizon, Sr. has
requested us to assist them in communicating with you anent your letter of 29
November 1993. According to Mr. Cuizon the present occupants of the lot covered
by T.C.T. No. T-138914 with an area of 2,000 square meters, had a definite
agreement with the Islamic Bank through its previous Manager or

Officer-in-Charge to buy this foreclosed property at P300,000.00. As a matter of fact

their deposit of P150,000.00 was on that basis. For this reason, the occupants, who
are members of the association, have already made lot allocations among
themselves and have improved their respective houses.
It would be most unfair if the Bank would now renege on its commitment and eject
these occupants. In line with the national policy of granting landless members of our
society the opportunity of owning land and providing shelter to their families, it
would be equitable and socially justifiable to grant these occupants their occupied
areas pursuant to the earlier agreement with the Bank.
For the foregoing reasons we hope that the Islamic Bank, for legal, moral and social
grounds would reconsider.
Meanwhile, acting on Roberns undated written offer,14 Al-Amanah issued a
Recommendation Sheet15 dated December 27, 1993 addressed to its Board
Operations Committee, indicating therein that Robern is interested to buy the lot for
P400,000.00; 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
Roberns offer.16
Eight days later, Robern was informed of the acceptance. Al-Amanah stressed that it
is Roberns responsibility to eject the occupants in the subject lot, if any, as well as
the payment of the remaining amount within 15 days; otherwise, the P80,000.00
deposit shall be forfeited.17
In a letter18 dated January 13, 1994, Robern expressed to Al-Amanah its uncertainty
on the status of the subject lot, viz.:
This is in connection with TCT No. 138914 which your bank offered to sell to us and
which we committed to buy.
A group calling itself PEOPLES LANDLESS ASSOCIATION, INC. made representation
with our office bringing with them copies of official receipts totalling P150,000.00
issued by your bank which stated---"PARTIAL PAYMENT/DEPOSIT on sale of TCT
#138914".
While condition no. 6 in the sale of property to us states that the buyer shall be
responsible for ejecting the squatters of the property, the occupants of the said lot
could hardly be categorized as squatters considering the supposed transaction
previously entered by your bank with them. We were greatly appalled that we
should learn about this not from the bank but from outside sources.1wphi1
My company is ready to finalize our transaction provided, however, that the
problem with this group is cleared. In this connection, we are requesting for a
definite statement from your bank on whether the official receipts being brandished
by this group are genuine or not, and if they were, were they ever invalidated by

virtue of the return of their deposit and whether there was a cancellation of your
agreement with them.
In the meantime, please consider the 15-day period for us to pay the amount of
P320,000.00 imposed by your bank suspended until such time that the legal
problem with the lot occupants is settled.
To convince Robern that it has no existing contract with PELA, Al-Amanah furnished
it with copies of the Head Offices rejection letter of PELAs bid, the demand letters
to vacate, and the proof of consignment of PELAs P150,000.00 deposit to the
Regional Trial Court (RTC) of Davao City that PELA refused to withdraw.19
Thereafter, on February 2, 1994, it informed Robern that should the latter fail to pay
the balance by February 9, 1994, its P80,000.00 deposit will be forfeited and the lot
shall be up for sale to other prospective buyers.20 Meanwhile, Al-Amanah requested
for assistance for the removal of the houses not only from the Office of the City
Engineer of Davao City21 but also from Mayor Rodrigo Duterte. Gaining a favorable
legal opinion from the City Legal Officer, the matter was indorsed to the Chief of
Demolition Consensus of the Department of Public Services for action.22
On March 4, 1994, Robern paid the balance of the purchase price.23 The Deed of
Sale24 over the realty was executed on April 6, 1994 and TCT No. T-21298325 was
issued in Roberns name the following day.
A week later, PELA consigned P150,000.00 in the RTC of Davao City.26 Then on April
14, 1994, it wrote27 Al-Amanah asking the latter to withdraw the amount
consigned. Part of the letter states:
xxxx
On March 21, 1994 (almost one month before the April 15, 1994 deadline) we came
to your bank to remit the balance and full payment [for] the abovementioned lot.
[Inasmuch] as you refuse[d] to accept the payment, we have decided to deposit the
amount consigned to your bank.
In our dialogue at your office in 1993, we have agreed that documents will be
processed as soon as we pay the P150,000.00 initial deposit. [Inasmuch] as we have
not only paid the deposit but have also made full payment of the account, kindly
facilitate processing of the documents to finalize transaction.
We have not been remiss in doing our part of the transaction; please do your share.
Thank you.
Very truly yours,
For the occupants/claimants
T.C.T. No. T-13891428

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, its
Director Engr. Farouk Carpizo (Engr. Carpizo), OIC Dalig, Robern, and Roberns
President and General Manager, petitioner Rodolfo Bernardo (Bernardo) before the
RTC of Davao City. It insisted that as early as March 1993 it has a perfected contract
of sale with Al-Amanah. However, in an apparent act of bad faith and in cahoots
with Robern, Al-Amanah proceeded with the sale of the lot despite the prior sale to
PELA.
Incidentally, the trial court granted PELAs prayer for a temporary restraining order.
Subsequently, it issued on August 12, 1994 an Order31 finding merit in the issuance
of the writ of preliminary injunction, inter alia. The RTCs grant of injunctive relief
was affirmed by the CA in CA-G.R. SP No. 3523832 when the factual and legal bases
for its issuance were questioned before the appellate court.
The respondents in the annulment case filed their respective Answers.33 Al-Amanah
and Engr. Carpizo claimed that the bank has every right to sell its lot to any
interested buyer with the best offer and thus they chose Robern. They clarified that
the P150,000.00 PELA handed to them is not part of the payment but merely a
deposit in connection with its offer. They asserted that PELA was properly apprised
that its offer to buy was subject to the approval of Al-Amanahs Head Office. They
stressed that Al-Amanah never entered into a sale with PELA for there was no
perfected agreement as to the price since the Head Office rejected
PELAs offer.
For their part, Robern and Bernardo asserted the corporations standing as a
purchaser in good faith and for value in the sale of the property, having relied on
the clean title of Al-Amanah. They also alleged that the purported sale to PELA is
violative of the Statute of Frauds34 as there is no written agreement covering the
same.

Respondents Arguments
PELA, on the other hand, claims that petitioners are not the proper parties who can
assail the contract of sale between it and the bank. It likewise argues that the
Petition should be dismissed because the petitioners failed to attach the material
portions of the records that would support its allegations, as required by Section 4,
Rule 45 of the Rules of Court.43
Aside from echoing the finding of the CA that Al-Amanah has a perfected contract of
sale with PELA, the latter further invokes the reasoning of the RTC and the CA (CAG.R. SP No. 35238) in finding merit in the issuance of the writ of preliminary
injunction, that is, that there was an apparent perfection of contract (of sale)
between the Bank and PELA.44 Furthermore, PELA claims that Al-Amanah accepted
its offered price and the P150,000.00, thus barring the application of the Statute of
Frauds as the contract was already partially executed. As to the non-existence of a
written contract evidencing the same, PELA ascribes fault on the bank claiming that

nothing happened despite its repeated follow-ups for the OIC of Al-Amanah to
execute the deed after payment of the P150,000.00 in May 1993.

Issue
At issue before us is 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
We shall first briefly address some matters raised by PELA.
PELAs contention that Robern cannot assail the alleged sale between
PELA and Al-Amanah is untenable. Robern is one of the parties who claim title
to the disputed lot. As such, it is a real party in interest since it stands to be
benefited or injured by the judgment.
Petitioners failure to attach the material portions of the record that would support
the allegations in the Petition is not fatal. We ruled in F.A.T. Kee Computer Systems,
Inc. v. Online Networks International, Inc.,thus:
x x x However, such a requirement failure to attach material portions of the record
was not meant to be an ironclad rule such that the failure to follow the same would
merit the outright dismissal of the petition. In accordance with Section 7 of Rule 45,
the Supreme Court may require or allow the filing of such pleadings, briefs,
memoranda or documents as it may deem necessary within such periods and under
such conditions as it may consider appropriate. More importantly, Section 8 of Rule
45 declares that [i]f the petition is given due course, the Supreme Court may
require the elevation of the complete record of the case or specified parts thereof
within fifteen (15) days from notice. x x x
Anent the statement of the courts below that there was an apparent perfection of
contract (of sale) between Al-Amanah and PELA, we hold that the same is strictly
confined to the resolution of whether a writ of preliminary injunction should issue
since the PELA members were then about to be evicted. PELA should not rely on
such statement as the same is not decisive of the rights of the parties and the
merits of this case.
We shall now delve into the crucial issue of whether there was a perfected
contract of sale between PELA and Al-Amanah.
Essential Elements of a Contract of Sale
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 bidders proposal must
be communicated to the bidder.53 However, a binding contract may exist between
the parties whose minds have met, although they did not affix their signatures to
any written document, as acceptance may be expressed or implied. 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.58 However, we find that the March 18, 1993 letter
referred to was merely an offer to buy.
According to the plan of PELA, about 24 landless families can be accommodated in
the property. We hope the Bank can help these families own even a small plot for
their shelter. This would be in line with the governments program of housing which
the present administration promised to put in high gear this year.(Emphasis
supplied)
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 P150,000.00 on or before April 15, 1993" be construed as acceptance of
PELAs offer to buy. Taken at face value, the annotation simply means that the bank
merely acknowledged receipt of PELAs letter-offer. Furthermore, by processing, AlAmanah only meant that it will act on the offer, i.e., it still has to evaluate whether
PELAs 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.
We cannot agree with the CAs ratiocination that receipt of the amount, coupled
with the phrase written on the four receipts as "deposit on sale of TCT No. 138914,"
signified a tacit acceptance by Al-Amanah of PELAs offer. For sure, the money PELA
gave was not in the concept of an earnest money. Besides, as testified to by then
OIC Dalig, it is the usual practice of Al-Amanah to require submission of a bid
deposit which is acknowledged by way of bank receipts before it entertains offers.
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,65 she never
falsely represented to the bidders that she has authority to sell the banks property.
And regardless of PELAs 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.
Contracts undergo three stages: "a) negotiation which begins from the time the
prospective contracting parties indicate interest in the contract and ends at the
moment of their agreement[; b) perfection or birth, x x x which takes place when
the parties agree upon all the essential elements of the contract x x x; and c)
consummation, which occurs when the parties fulfill or perform the terms agreed
upon, culminating in the extinguishment thereof."
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 P300,000.00 purchase price. Before the lapse of the 1-year period
PELA had set to pay the remaining balance, Al-Amanah expressly rejected its
offered purchase price, although it took the latter around seven months to inform
the former and this entitled PELA to award of damages.67 Al-Amanahs act of selling
the lot to another buyer is the final nail in the coffin of the negotiation with PELA.
Clearly, there is no double sale, thus, we find no reason to disturb the consummated
sale between Al-Amanah and Robern.
At this juncture, it is well to stress that Al-Amanahs Petition before this Court
docketed as G.R. No. 173437 was already denied with finality on December 4, 2006.
Hence, we see no reason to disturb paragraph 6 of the CAs Decision ordering AlAmanah to pay damages to PELA.
WHEREFORE, we PARTIALLY GRANT the Petition