Villanueva vs.

CA
267 SCRA 89
G.R. No. 107624
January 28, 1997
FACTS:
Petitioner Gamaliel Villanueva has been a
tenant-occupant of a unit in an apartment
building erected on a parcel of land owned by
private respondents dela Cruz. In 1986, Jose
dela Cruz offered said land with the apartment
building for sale and petitioners (Gamaliel and
Irene) showed interest in the property.
As initial step, Jose gave Irene a letter of
authority for her to inspect the property. Since
the property was in arrears for payment of realty
taxes, Jose approached Irene and asked for a
certain amount to pay for the taxes so that the
property would be cleared of any encumbrance.
Irene gave 10k (5k on 2 occasions). It was
agreed by them that the 10k would form part of
the sale price of 550k.
Thereafter, Jose went to Irene, bringing with him
Mr. Sabio, requesting her to allow Sabio to
purchase of the property, to which they
consented, so they would just purchase the
other half (265k, having paid the 10k). Dela Cruz
executed in favor of their co-defendants (Guido
and Felicitas Pile) a Deed of Assignment of the
other portion of the land, wherein Gamaliels
apartment unit is situated. This was purportedly
as full payment and satisfaction of an
indebtedness obtained from the Piles. TCT was
later issued in the name of the Piles.
Soon, Gamaliel learned about the assignment
and issuance of new TCT. Petitioners elevated
their complaint to the Court (specific
performance). They contend that a contract of
sale has been perfected and that the 10k formed
part of the purchase price (necessarily then,
there must have been an agreement as to the
price). They cite Art 1482: Whenever earnest
money is given in a contract of sale, it shall be
considered as part of the price and proof of
perfection of the contract. On the other hand,
private respondents claim that what was agreed
upon was that the 10k be primarily intended as
payment for realty tax, and was going to for part
of the consideration of the sale if the transaction
would finally be consummated. They insist that
there was no clear agreement as to the true
amount of consideration.

ISSUE:
Was there a perfected contract of sale? NO
HELD:
After a review of the evidence, SC found that
there was no agreement as to the price (based
on the testimonies). To settle the conflicting
claims, petitioners could have presented the
contract of sale. However, it was not presented
in evidence. Petitioners aver that even if the
(unsigned) deed was not produced, Jose
admitted preparing said deed in accordance
with their agreement.
We do not agree with petitioners. Assuming
arguendo that such draft deed existed, it
does not necessarily follow that there was
already a definite agreement as to the price. If
there was, why then did private respondent Jose
de la Cruz not sign it? If indeed the draft deed
of sale was that important to petitioners' cause,
they should have shown some effort to procure
it. They could have secured it through a
subpoena ducestecum or thru the use of one of
the modes of discovery. But petitioners made no
such effort. And even if produced, it would not
have commanded any probative value as it was
not signed.
The price of the leased land not having been
fixed, the essential elements which give life to
the contract were lacking. It follows that the
lessee cannot compel the lessor to sell the
leased land to him.
The price must be certain; it must be real, not
fictitious. It is not necessary that the certainty of
the price be actual or determined at the time of
executing the contract. The fact that the exact
amount to be paid therefor is not precisely fixed,
is no bar to an action to recover such
compensation, provided the contract, by its
terms, furnishes a basis or measure for
ascertaining the amount agreed upon. The price
could be made certain by the application of
known factors. A contract of sale is not void for
uncertainty when the price, though not directly
stated in terms of pesos and centavos, can be
made certain by reference to existing invoices
identified in the agreement.
In the instant case, however, what is
dramatically clear from the evidence is that there
was no meeting of mind as to the price,
expressly or impliedly, directly or indirectly.

Moreno, Jr. vs. Private Management Office

507 SCRA 63
G.R. No. 159373
November 16, 2006
FACTS:
The subject-matter in the civil case is the
J. Moreno Building (formerly known as the
North Davao Mining Building) or more
specifically, the 2nd, 3rd, 4th, 5th and 6th
floors of the building.
Moreno is the owner of the Ground
Floor, the 7th Floor and the Penthouse of
the J. Moreno Building and the lot on which
it stands.
Private Management Office (formerly,
Asset Privatization Trust or APT) on the
other hand, is the owner of the 2nd, 3rd,
4th, 5th and 6th floors of the building, the
subject-matter of this suit.
On February 13, 1993, APT called for a
conference for the purpose of discussing
Morenos right of first refusal over the floors
of the building owned by APT. At said
meeting, APT informed Moreno that the
proposed purchase price for said floors was
P21 Million.
In a letter dated February 22, 1993, APT,
informed Moreno that the Board of
Trustees (BOT) of APT "is in agreement
that Mr. Jose Moreno, Jr. has the right of
first refusal" and requested Moreno to
deposit 10% of the "suggested indicative
price" of P21 million on or before February
26, 1993.
Moreno paid the P21 million on February 26,
1993. APT issued an OR for the said
payment.
But later, APT wrote Moreno that its Legal
Department has questioned the basis for the
computation of the indicative price for the
said floors. Thus, on April 2, 1993, APT
wrote Moreno that the APT BOT has
"tentatively agreed on a settlement price of
P42,274,702.17" for the said floors.
RTC ruled in favor of Moreno, declared that
there was a perfected contract of sale and
ordered APT to sell the subject floors at
P21M.
CA reversed, hence the petition.
ISSUE:
WON there was a perfected contract of sale
over the subject floors at the price of 21 Million.
NO

HELD:
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.
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.
To reach that moment of perfection, the parties
must agree on the same thing in the same
sense, so that their minds meet as to all the
terms. They must have a distinct intention
common to both and without doubt or difference;
until all understand alike, there can be no
assent, and therefore no contract. The minds of
parties must meet at every point; nothing can be
left open for further arrangement
So long as there is any uncertainty or
indefiniteness, or future negotiations or
considerations to be had between the parties,
there is not a completed contract, and in fact,
there is no contract at all.
Once there is concurrence of the offer and
acceptance of the object and cause, the stage of
negotiation is finished. This situation does not
obtain in the case at bar. The letter of February
22, 1993 and the surrounding circumstances
clearly show that the parties are not past the
stage of negotiation, hence there could not
have been a perfected contract of sale.
The letter is clear evidence that APT did not
intend to sell the subject floors at the price
certainofP21M, viz.:
(This letter was addressed to Morenos Atty.)
xxx We are pleased to inform you that
the Board is in agreement that Mr. Jose
Moreno, Jr. has the right of first refusal. This
will be confirmed by our Board during the
next board meeting on February 26, 1993. In
the meantime, please advise Mr. Moreno
that the suggested indicative price for APTs
five (5) floors of the building in question is
P21 Million.
If Mr. Moreno is in agreement, he should
deposit with APT the amount of P2.1
Million equivalent to 10% of the price on or
before February 26, 1993. The balance will
be due within fifteen (15) days after Mr.

Moreno receives the formal notice

approval of the indicative price. xxx

of

The letter clearly states that P21M is merely a

"suggested indicative price" of the subject floors
as it was yet to be approved by the BOT.

specific performance initiated by Moreno who

has the burden to prove that the case should be
spared from the application of the technical
terms in the sale and disposition of assets under
privatization.
He failed to discharge the burden.

Before the Board could confirm the suggested

indicative price, the Committee on Privatization
must first approve the terms of the sale or
disposition. The imposition of this suspensive
condition finds basis under Proclamation No.
5022 which vests in the Committee the power
to approve the sale of government assets,
including the price of the asset to be sold
(apparently government pala itong APT, and
may procedure na sinusunod sa law).
Other discussions that may be relevant:
On Morenos argument that the "suggested
indicative price" of P21M is not a proposed
price, but the selling price indicative of the value
at which APT was willing to sell.

It appears in the case at bar that Morenos

construction of the letter of February 22, 1993
that his assent to the "suggested indicative
price" of P21M converted it as the price certain,
thus giving rise to a perfected contract of sale
is his own subjective understanding. As such, it
is not shared by APT. Under American
jurisprudence, mutual assent is judged by an
objective standard, looking to the express words
the parties used in the contract. Under the
objective theory of contract, understandings and
beliefs are effective only if shared. Based on the
objective manifestations of the parties in the
case at bar, there was no meeting of the minds.

The trial court relied upon the definition of the

word
"indicative"
under
the
Webster
Comprehensive Dictionary, International Edition.
According to Webster, "to indicate" is to point
out; direct attention; to indicate the correct page.
"Indicative" is merely the adjective of the verb to
indicate. xxx
Under the Rules of Court, the terms are
presumed to have been used in their primary
and general acceptation, but evidence is
admissible to show that they have a local,
technical, or otherwise peculiar signification,
and were so used and understood in the
particular instance, in which case the agreement
must be construed accordingly.
The reliance of the trial court in the Webster
definition of the term "indicative," as also
adopted by Moreno, is misplaced. The
transaction at bar involves the sale of an asset
under a privatization scheme which attaches a
peculiar meaning or signification to the term
"indicative price." Under No. 6.1 of the
General Bidding Procedures and Rules of
respondent, "an indicative price is a ballpark
figure and [respondent] supplies such a figure
purely to define the ball-park." The plain
contention of Moreno that the transaction
involves an "ordinary arms-length sale of
property" is unsubstantiated and leaves much to
be desired. This case sprung from a case of

Navarra vs. Planters

527 SCRA 561
G.R. No. 172674
July 12, 2007
FACTS:
The Navarras obtained a loan of P1,200,000.00
from Planters Bank and, by way of security
therefor, executed a deed of mortgage over their
five (5) parcels of land. Unfortunately, the couple
failed to pay their loan obligation. Hence,
Planters Bank foreclosed on the mortgage. The
one year redemption period expired without the
Navarras having redeemed the foreclosed
properties.
On the other hand, co-petitioner RRRC
Development Corporation (RRRC) is a real
estate company owned by the parents of
Carmelita Bernardo 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 likewise
unpaid, Planters Bank similarly foreclosed the
mortgaged assets of RRRC.
Unlike the Navarras, however, RRRC was able
to negotiate with the Bank for the redemption
of its foreclosed properties by way of a
concession whereby the Bank allowed RRRC to
refer to it would-be buyers of the foreclosed
RRRC properties who would remit their
payments directly to the Bank, which payments
would then be considered as redemption price
for RRRC. Eventually, the foreclosed properties
of RRRC were sold to third persons whose
payments therefor, directly made to the Bank,
were in excess by P300,000.00 for the
redemption price.
In the meantime, Jorge Navarra sent a letter
{*contents of the letters are found in the
ruling*} to Planters Bank, proposing to
repurchase the five (5) lots earlier auctioned to
the Bank, with a request that he be given until
August 31, 1985 to pay the down payment of
P300,000.00. In response, Planters Bank, thru
its Vice-President Ma. Flordeliza Aguenza, wrote
back Navarra via a letter dated August 16, 1985.
Then, on January 21, 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 Banks request for the submission of the
needed board resolution of RRRC, thus,

demanding that they surrender and vacate the

properties in question for their failure to exercise
their right of redemption.
The Navarras filed their complaint for Specific
Performance with Injunction against Planters
Bank, alleging that a perfected contract of sale
was made between them and Planters Bank
whereby they would repurchase the subject
properties for P1,800,000.00 with a down
payment of P300,000.00. In its Answer, Planters
Bank asserted that there was no perfected
contract of sale because the terms and
conditions for the repurchase have not yet been
agreed upon.
The RTC ruled that there was a perfected
contract of sale between the Navarras and
Planters Bank. The CA reversed the decision
citing Article 1319 as basis, declaring that the
acceptance of the offer was not absolute.
ISSUES:
1. WON there was a perfected contract to
repurchase the foreclosed properties
between the petitioners and the private
respondent Planters Development Bank.
NO
2. WON the parties never got past the negotiation
stage. YES
HELD:
In general, contracts undergo three distinct
stages: negotiation, perfection or birth, and
consummation. Negotiation begins from the
time the
prospective
contracting
parties
manifest their interest in the contract and ends
at the moment of their agreement. Perfection or
birth of the contract takes place when the
parties agree upon the essential elements of
the contract, i.e., consent, object and price.
Consummation occurs when the parties fulfill
or perform the terms agreed upon in the
contract, culminating in the extinguishment
thereof.
A negotiation is formally initiated by an offer
which should be certain with respect to both
the object and the cause or consideration of
the envisioned contract. In order to produce a
contract, here must be acceptance, which may
be express or implied, but it must not qualify the
terms of the offer. In other words, it must be
identical in all respects with that of the offer so
as to produce consent or meeting of the minds.

Here, the Navarras assert that the following

exchange of correspondence between them and
Planters Bank constitutes the offer and
acceptance, thus:

Given the above, the basic question that

comes to mind is: Was the offer certain and
the acceptance absolute enough so as to
engender a meeting of the minds between
the parties? Definitely not.

Letter dated July 18, 1985 of Jorge Navarra:

This will formalize my request for your
kind consideration in allowing my brother
and me to buy back my house and lot and
my restaurant building and lot together with
the adjacent road lot. Since my brother, who
is working in Saudi Arabia, has accepted
this arrangement only recently as a result
of my urgent offer to him, perhaps it will be
safe for us to set August 31, 1985 as the
last day for the payment of a P300,000.00
down payment. I hope you will grant us the
opportunity to raise the funds within this
period, which includes an allowance for
delays.
The purchase price, I understand, will be
based on the redemption value plus
accrued interest at the prevailing rate up to
the date of our sales contract.
Maybe you can give us a long term payment
scheme on the basis of my brothers
annual savings of roughly US$30,000.00
everytime he comes home for his home
leave. I realize that this is not a regular
transaction but I am seeking your favor to
give me a chance to reserve whatever
values I can still recover from the properties
and to avoid any legal complications that
may arise as a consequence of the total loss
of the Balangay lot. I hope that you will
extend to me your favorable action on
this grave matter.
Letter dated August 16, 1985 of Planters Bank:
Regarding your letter dated July 18, 1985,
requesting that we give up to August 31,
1985 to buy back your house and lot and
restaurant and building subject to a
P300,000.00 downpayment on the purchase
price, please be advised that the Collection
Committee has agreed to your request.
Please see Mr. Rene Castillo, Head,
Acquired Assets Unit, as soon as possible
for the details of the transaction so that they
may work on the necessary documentation.

While the foregoing letters indicate the

amount of P300,000.00 as down payment, they
are, however, completely silent as to how the
succeeding instalment 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.
The 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,
as: what is the redemption value? What
prevailing rate of interest shall be followed: is it
the rate stipulated in the loan agreement or the
legal rate? When will the date of the contract of
sale be based, shall it be upon the time of the
execution of the deed of sale or upon the time
when the last instalment payment shall have
been made? To our mind, these questions need
first to be addressed, discussed and negotiated
upon by the parties before a definite purchase
price can be arrived at. Significantly, the
Navarras wrote in the same letter the following:
Maybe you can give us a long-term payment
scheme on the basis of my brothers annual
savings of roughly US$30,000.00 every time
he comes home for his home leave.
Again, the offer was 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. 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. Here, what is
dramatically clear is that there was no meeting
of minds vis-a-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 Navarras attempt to prove the existence of
a perfected contract of sale all the more
becomes futile in the light of the evidence that
there was in the first place no acceptance of
their offer. It should be noted that aside from
their first letter dated July 18, 1985, the
Navarras wrote another letter dated August 20,
1985, this time requesting the Bank that the
down payment of P300,000.00 be instead taken
from the excess payment made by the RRRC in
redeeming its own foreclosed properties.
The very circumstance that the Navarras had to
make this new request is a clear indication that
no definite agreement has yet been reached at
that point. As we see it, this request constitutes
a new offer on the part of the Navarras, which
offer was again conditionally accepted by the
Bank as in fact it even required the Navarras to
submit a board resolution of RRRC before it

could
proceed
sale/repurchase.

with

the

proposed

The eventual failure of the spouses to submit the

required board resolution precludes the
perfection of a contract of sale/repurchase
between the parties.
Evidently, what transpired between the parties
was only a prolonged negotiation to buy and to
sell, and, at the most, an offer and a counter
offer with no definite agreement having been
reached by them. With the hard reality that
no perfected contract of sale/repurchase exists
in this case, any independent transaction
between the Planters Bank and a third-party,
like the one involving the Gatchalian Realty,
cannot be affected.

Amado vs. Salvador

G.R. No. 171401
December 13, 2007
FACTS:
Judge Amado is the owner of a lot, a portion of
which is the subject of the present litigation. It
was alleged that sometime in 1979, Judge
Amado and Salvador agreed that the latter
would sell the lot in favor of Salvador at
P60/sqm. The payment was to be made in cash
or construction material, whichever the Judge
preferred and to whomever the latter wished
during his lifetime. The terms of payment,
though, were not stipulated.
Thereafter, Salvador undertook and the location
of the squatters in said land and eventually built
several structures thereon for his business.
Salvador claims that by October 1980, he had
already given Judge Amado total cash advances
of P30,310.93 and delivered construction
materials amounting to P36,904.45, the total of
which exceeded the agreed price for the subject
property.
Petitioner heirs averred that Judge Amado and
Salvador were co-borrowers from a bank. A loan
agreement was executed by them with Capitol
City Devt bank as lender and the Lot of Judge
Amado was used as collateral. The loaned
amount was released to Salvador and Judge
Amados share was paid to him in several
instalments. Salvador failed to pay his share in
the amortization of the lot so that Judge Amado
had to pay the loan to avoid foreclosure.
Thereafter, Judge Amado demanded Salvador to
leave the premises and an ejectment case
was filed to that effect. Salvador filed a case
for specific performance contending that a
balance of P4,040.62 was not paid to Judge
Amado because of the latters failure to execute
the deed of sale. Salvador presented several
documentary evidence.
RTC dismissed the complaint because
Salvadors evidence does not show that the
money and construction materials were intended
as payment for the subject property. CA
reversed the decision on the finding that the
construction materials delivered were not paid
for.
ISSUE:
WON there was a perfected contract of sale.

NO
HELD:
No Convincing Proof as to Manner of Payment
In the present case, Salvador fails to allege
the manner of payment of the purchase price
on which the parties should have agreed. No
period was set within which the payment must
be made. Of the purchase price of P66,360.00,
which the parties purportedly agreed upon, the
amount which should be paid in cash and the
amount for construction materials was not
determined. This means that the parties had no
exact notion of the consideration for the contract
to which they supposedly gave their consent.
Thus, such failure is fatal to Salvadors claim
that a sale had been agreed upon by the parties.
Furthermore, after carefully examining the
records, serious doubts became apparent as to
whether cash advances and deliveries of
construction materials evidenced by numerous
statements of accounts and delivery receipts
were actually intended as payment for the land.
First of all, the statements of accounts and the
delivery receipts do not indicate that the
construction materials or the cash advances
were made in connection with the sale of the
subject property. Any doubt as to the real
meaning of the contract must be resolved
against the person who drafted the instrument
and is responsible for the ambiguity thereof.
Since Salvador prepared these statements of
accounts and therefore caused the ambiguity, he
cannot benefit from the resulting ambiguity.
Salvador is hardly an ignorant and illiterate
person; rather, he is a businessman engaged
in manufacturing and distributing construction
materials and operates no less than two
branches. It should have been noted in the
statement of accounts, or even in another
document, that the cash advances and
deliveries of construction materials were made
in connection with a transaction as important as
a sale of land. As they are, the statements of
accounts and especially the straightforward
delivery receipts are insufficient proof that Judge
Amado sold his property to Salvador.
Secondly, one of the delivery receipts presented
by Salvador was partially paid. If Judge Amado
had already agreed that the construction
materials were payment for the subject property,
the act of partially paying for construction

materials
intention.

would

be

incongruous

to

such

Thirdly, Salvador himself gave conflicting

statements on whether he has completed
payment. Other proofs presented gave no

weight to respondents allegations. The

testimony of the witness presented by Salvador
was not given credence. Finally, the act of
Salvador in relocating the squatters is not
substantial proof of ownership.