Manuel Uy and Sons, Inc. v.

Valbueco, Incorporated (22)

G.R. No. 179594, September 11, 2013

Facts:
Petitioner Manuel Uy & Sons, Inc. is the registered owner of parcels of land which is the subject of two
Conditional Deeds of Sale executed by petitioner, as vendor, in favor of respondent Valbueco, Incorporated,
as vendee. Respondent was able to pay petitioner the amount of ₱275,055.558 as partial payment for the
two properties corresponding to the initial payments and the first installments of the said properties. At
the same time, petitioner complied with its obligation under the conditional deeds of sale. However,
respondent suspended further payment as it was not satisfied with the manner petitioner complied with its
obligations under the conditional deeds of sale.

Consequently, petitioner sent respondent a letter informing respondent of its intention to rescind the
conditional deeds of sale and attaching therewith the original copy of the respective notarial rescission.
Respondent filed a Complaint for specific performance and damages against petitioner praying for
petitioner to accept the balance of the purchase price and to execute the corresponding deed of absolute
sale.

Issue:
(1)May petitioner be compelled to execute deeds of absolute sale in favor of respondent even prior to
the full payment of the purchase price?

Ruling:
(1)Yes. In a conditional sale, as in a contract to sell, ownership remains with the vendor and does not
pass to the vendee until full payment of the purchase price. The full payment of the purchase price
partakes of a suspensive condition, and non-fulfillment of the condition prevents the obligation to sell
from arising. To differentiate, a deed of sale is absolute when there is no stipulation in the contract that
title to the property remains with the seller until full payment of the purchase price.

Diego v. Diego
Facts:
In 1993, petitioner Nicolas and his brother Rodolfo, respondent, entered into an oral contract to sell
covering Nicolas’s share, fixed at ₱500,000.00, as co-owner of the family’s Diego Building situated in
Dagupan City. Rodolfo made a down payment of
₱250,000.00. It was agreed that the deed of sale shall be executed upon payment of the remaining balance
of ₱250,000.00. However, Rodolfo failed to pay the remaining balance. Meanwhile, the building was
leased out to third parties, but Nicolas’s share in the rents were not remitted to him by respondent
Eduardo, another brother of Nicolas and designated administrator of the Diego Building. Instead, Eduardo
gave Nicolas’s monthly share in the rents to Rodolfo. Despite demands and protestations by Nicolas,
Rodolfo and Eduardo failed to render an accounting and remit his share in the rents and fruits of the
building, and Eduardo continued to hand them over to Rodolfo. Thus, Nicolas filed a Complaint against
Rodolfo and Eduardo before the RTC of Dagupan City. Rodolfo and Eduardo argued that Nicolas had no
 more claim in the rents in the Diego Building since he had already sold his share to Rodolfo. Rodolfo
admitted having remitted only ₱250,000.00 to Nicolas. He asserted that he would pay the balance of the
purchase price to Nicolas only after the latter shall have executed a deed of absolute sale.

ISSUE:
Is the contract entered into by Nicolas and Rodolfo a contract to sell?
RULING:
The contract entered into by Nicolas and Rodolfo was a contract to sell. The stipulation to execute
a deed of sale upon full payment of the purchase price is a unique and distinguishing characteristic of a
contract to sell. It also shows that the vendor reserved title to the property until full payment. There is no
dispute that in 1993,
Rodolfo agreed to buy Nicolas’s share in the Diego Building for the price of
₱500,000.00. There is also no dispute that of the total purchase price, Rodolfo paid, and Nicolas received,
₱250,000.00. Significantly, it is also not disputed that the parties agreed that the remaining amount of
₱250,000.00 would be paid after Nicolas shall have executed a deed of sale.

SAN LORENZO DEVELOPMENT CORPORATION VS. CA

FACTS:
On 20 August 1986, the Spouses Lu purportedly sold the two parcels of land to respondent Pablo
Babasanta. The latter made a downpayment of fifty thousand pesos (P50,000.00) as evidenced by a
memorandum receipt issued by Pacita Lu of the same date. Several other payments totaling two hundred
thousand pesos (P200,000.00) were made by Babasanta. He demanded the execution of a Final Deed of Sale in
his favor so he may effect full payment of the purchase price; however, the spouses declined to push through with
the sale. They claimed that when he requested for a discount and they refused, he rescinded the agreement.
Thus, Babasanta filed a case for Specific Performance.
On the other hand, San Lorenzo Development Corporation (SLDC) alleged that on 3 May 1989, the two
parcels of land involved, namely Lot 1764-A and 1764-B, had been sold to it in a Deed of Absolute Sale with
Mortgage. It alleged that it was a buyer in good faith and for value and therefore it had a better right over the
property in litigation.

ISSUE:
Who between SLDC and Babasanta has a better right over the two parcels of land?

RULING:
An analysis of the facts obtaining in this case, as well as the evidence presented by the parties, irresistibly
leads to the conclusion that the agreement between Babasanta and the Spouses Lu is a contract to sell and not a
contract of sale.
The receipt signed by Pacita Lu merely states that she accepted the sum of fifty thousand pesos
(P50,000.00) from Babasanta as partial payment of 3.6 hectares of farm lot. While there is no stipulation that the
seller reserves the ownership of the property until full payment of the price which is a distinguishing feature of a
contract to sell, the subsequent acts of the parties convince us that the Spouses Lu never intended to transfer
ownership to Babasanta except upon full payment of the purchase price.
Babasanta’s letter dated 22 May 1989 was quite telling. He stated therein that despite his repeated
requests for the execution of the final deed of sale in his favor so that he could effect full payment of the price,
Pacita Lu allegedly refused to do so. In effect, Babasanta himself recognized that ownership of the property
would not be transferred to him until such time as he shall have effected full payment of the price. Doubtlessly,
the receipt signed by Pacita Lu should legally be considered as a perfected contract to sell.
The perfected contract to sell imposed upon Babasanta the obligation to pay the balance of the purchase
price. There being an obligation to pay the price, Babasanta should have made the proper tender of payment and
consignation of the price in court as required by law. Glaringly absent from the records is any indication that
Babasanta even attempted to make the proper consignation of the amounts due, thus, the obligation on the part
of the sellers to convey title never acquired obligatory force.
There was no double sale in this case because the contract in favor of Babasanta was a mere contract to
sell; hence, Art. 1544 is not applicable. There was neither actual nor constructive delivery as his title is based on a
mere receipt. Based on this alone, the right of SLDC must be preferred.

Carrascoso, Jr. v. C.A. 477 SCRA 666, December 14, 2005

FACTS:

In March 1972, El Dorado Plantation, Inc. (El Dorado), through its board member LauroLeviste, executed
a Deed of Sale with Fernando Carrascoso, Jr. The subject of the sale was a 1,825 hectare of land. It was agreed
that Carrascoso was to pay P1.8M.; that P290, 000.00 would be paid by Carrascoso to PNB to settle the mortgage
upon the said land. P210, 000.00 would be paid directly to Leviste. The balance of P1.3M plus 10% interest would
be paid over the next 3 years at P519k every 25th of March.

Subsequently, Carrascoso obtained a total of P1.07M as mortgage and he used the same to pay the down
payment agreed upon in the contract. Carrascoso defaulted from his obligation which was supposed to be settled
on March 25, 1975. Leviste then sent him letters to make good his end of the contract; otherwise, he will be
litigated.Meanwhile, El Dorado filed a civil case against Carrascoso.The Regional Trial Court (RTC) ruled in favor of
Carrascoso. The Court of Appeals (CA), however, reversed the RTC ruling.

ISSUE:

Whether or not the contract entered into by the parties is a contract of sale.

RULING:

YES. The Court held that the contract executed between El Dorado and Carrascoso was a contract of
sale. It was perfected by their meeting of the minds and was consummated by the delivery of the property to
Carrascoso. However, El Dorado has the right to rescind the contract by reason of Carrascoso’s failure to perform
his obligation.A contract of sale is a reciprocal obligation. The seller obligates itself to transfer the ownership of
and deliver a determinate thing, and the buyer obligates itself to pay therefor a price certain in money or its
equivalent. The non-payment of the price by the buyer is a resolutory condition which extinguishes the
transaction that for a time existed, and discharges the obligations created thereunder. Also, such failure to pay
the price in the manner prescribed by the contract of sale entitles the unpaid seller to sue for collection or to
rescind the contract.

Ursal v.CA
FACTS:
Spouses Moneset are registered owners of a parcel of land and they executed on it a Contract to Sell in
favor of petitioner Ursal. Petitioner paid the monthly installments but stopped due to the spouses’ failure to
deliver the TCT. The land was subject of an absolute deed of sale in favor of Dr. Canora, Jr. and was sold again
with pacto de retro. The land was mortgaged with respondent Rural Bank of Larena and corresponding
annotations to the title were made. For failure of the spouses to pay the loan, the bank served a notice of extra-
judicial foreclosure. Petitioner moved for the declaration of the non-effectivity of the mortgage and the
payment of damages alleging that there was fraud/bad faith in the part of the spouses and with the bank for
granting the REM in spite knowing that the property was in possession of petitioner. RTC ruled in favor of
petitioner but maintained that the property be foreclosed.

ISSUE:
Did the respondent bank acted in bad faith by failing to look beyond the TCT of the property before a loan
may be extended upon it?

RULING:
YES. Banks cannot merely rely on certificates of title in ascertaining the status of mortgaged properties;
as their business is impressed with public interest, they are expected to exercise more care and prudence in their
dealings than private individuals. Indeed, the rule that persons dealing with registered lands can rely solely on the
certificate of title does not apply to banks.

Rayos v. CA

FACTS:
Spouses Mercedes Rayos, secured a short-term loan from PSB payable within 1 year in quarterly
installments. To secure its payment, the spouses executed a REM over their property located in Las Piñas, Metro
Manila. Petitioners and Spouses Miranda executed a Deed of Sale with Assumption of Mortgage over the
subject property. A month after, the spouses executed a contract to sell in favor of Spouses Miranda and obliged
themselves to execute a deed of absolute sale upon full payment of the purchase price. Notwithstanding the
refusal of PSB to secure the approval of Rogelio’s assumption of petitioners’ obligation on the loan, Rogelio was
able to pay the 3 quarterly installments. Spouses Rayos assert that the CA erred in not finding that respondents
committed a breach of contract to sell and behooved CA to apply Article 1192 of the Civil Code.

ISSUE:

Did Spouses Rayos unilaterally cancel their contract to sell?

HELD:

No. The petitioners did not unilaterally cancel their contract to sell with respondents when they paid the
total amount of P29,062.80 to the PSB in December 1986. In fact, the petitioners wrote the respondents that they
were ready to execute the deed of absolute sale and turn over the owner’s duplicate of TCT upon the respondents’
remittance of the amount of P29,062.80 plus P160.87. The respondents were obliged under the contract to sell to
pay the said amount to PSB as part of the purchase price of the property. On the other hand, it cannot be argued
by the petitioners that the respondents committed a breach of their obligation when they refused to refund the
said amount.
 CORONEL V. CA

FACTS:

The case arose from a complaint for specific performance filed by private respondent Alcaraz against
petitioners to consummate the sale of a parcel of land in Quezon City. On January 19, 1985, petitioners executed a
“Receipt of Down Payment” of P50,000 in favor of plaintiff Ramona Alcaraz, binding themselves to transfer the
ownership of the land in their name from their deceased father, afterwhich the balance of P1,190,000 shall be paid
in full by Alcaraz. On February 6, 1985, the property was transferred to petitioners. On February 18, 1985,
petitioners sold the property to Mabanag. For this reason, Concepcion, Ramona’s mother, filed an action for
specific performance.

ISSUE:
WON the rescission of the first contract between Coronel and Alcaraz is valid.

HELD:
The case is a contract of sale subject to a suspensive condition in which consummation is subject only to
the successful transfer of the certificate of title from the name of petitioners' father, to their names. Thus, the
contract of sale became obligatory.

With regard to double sale, the rule that the first in time, stronger in right should apply. The contention of the
petitioner that she was a buyer in good faith because the notice of lis pendens in the title was annotated after she
bought the property is of no merit. In case of double sale, what finds relevance and materiality is not whether or not
the second buyer was a buyer in good faith but whether or not said second buyer registers such second sale in
good faith, that is, without knowledge of any defect in the title of the property sold.

The ruling should be in favor of Alcaraz because Mabanag registered the property two months after the notice of
lis pendens was annotated in the title and hence, she cannot be a buyer in good faith.

Heirs of Escanlar vs CA

FACTS:

Spouses Guillermo Nombre and Victoriana Cari-an died without issue in 1924 and 1938, respectively. Nombres
heirs include his nephews and grandnephews. Victoriana Cari-an was succeeded by her late brothers son,
Gregorio Cari-an. The latter was declared as Victorianas heir in the estate proceedings for Nombre and his wife.
After Gregorio died in 1971, his wife, Generosa Martinez, and children, Rodolfo, Carmen, Leonardo and
Fredisminda, all surnamed Cari-an, were also adjudged as heirs by representation to Victorianas
estate.Leonardo Cari-an passed away, leaving his widow, Nelly Chua vda. de Cari-an and minor son Leonell, as
his heirs.

Two parcels of land in Kabankalan Cadastre with an area of 29,350 square meters and 460,948 square meters,
respectively, formed part of the estate of Nombre and Cari-an.

On September 15, 1978, Gregorio Cari-ans heirs, executed the Deed of Sale of Rights, Interests and Participation.
On April 20, 1983, petitioners also sold their rights and interests in the subject parcels of land to Edwin Jayme and
turned over possession of both lots to the latter.
Issue:
W-O-N the deed of sale of rights, interests and participation is a contract to sell
Ruling

In contracts to sell, ownership is retained by the seller and is not to pass until the full payment of the price. Such
payment is a positive suspensive condition, the failure of which is not a breach of contract but simply an event
that prevented the obligation of the vendor to convey title from acquiring binding force. Although a deed of
conditional sale is denominated as such, absent a proviso that title to the property sold is reserved in the vendor
until full payment of the purchase price nor a stipulation giving the vendor the right to unilaterally rescind the
contract the moment the vendee fails to pay within a fixed period, by its nature, it shall be declared a deed of
absolute sale.

In a contract of sale, the non-payment of the price is a resolutory condition which extinguishes the transaction
that, for a time, existed and discharges the obligations created thereunder.The remedy of an unpaid seller in a
contract of sale is to seek either specific performance or rescission.

Sacobia Hills Dev. Corp. v. Ty 470 SCRA 395 (2005)

FACTS:

Petitioner is the developer of True North Golf and Country Club located inside the Clark Special Economic Zone in
Pampanga which boasts of amenities that include a golf course, clubhouse, sports complex and several vacation
villas. Allan Ty wrote to Sacobia a letter expressing his intention to acquire one Class A share of True North and
accordingly paid the reservation fee of P180,000.00. Sacobia assured its shareholders. Sacobia approved the
purchase application and membership of respondent for P600,000.00, subject to certain terms and conditions.
However Ty notified Sacobia that he is rescinding the contract and sought refund of the payments already made
due to the latters failure to complete the project on time. Sacobia also sought to collect from Ty the latters
outstanding balance of P190,909.08 which was covered by five post dated checks. Ty sent Sacobia a letter
formally rescinding the contract and demanding for the refund of the P409,090.92 thus far paid by him. Sacobia
informed respondent that it had a no- refund policy, and that it had endorsed respondent to Century Properties,
Inc. for assistance on the resale of his share to third persons. Thus, Ty filed a complaint for rescission and damages
before the SEC but the case was eventually transferred to the RTC of Manila.

ISSUE:

May the contract entered into by the parties be validly rescinded under Article 1191 of the Civil Code?

RULING:

No. Ty’s failure to fulfill this suspensive condition prevented the perfection of the contract to sell. With an
ineffective contract, Ty had not acquired the status of a shareholder but remained, at most, a prospective
investor. In the absence of a juridical tie between the parties, Ty cannot claim the rights and privileges accorded to
Sacobias full-fledged members and shareowners, including the full enjoyment of the amenities being offered.
However, he can withdraw his investment subject to the restrictions under the terms and conditions pertinent to a
reneging investor.

Luzon Brokerage v. Maritime Building 43 SCRA 93, January 21, 1972

FACTS:
 On April 30, 1949, the defendant Myers Building Co. entered into a Deed of Conditional Sale, in favor of
Maritime Building Co. over 3 parcels of land with improvements in Manila City for P1M. Maritime paid P50, 000.00
upon execution. The balance was to be paid in monthly instalments of P10, 000.00 at 5% interest per annum (later
lowered to P5, 000.00 at 5.5% interest per annum). The parties further agreed that: a. If Maritime defaults, the
contract would be annulled at Myers’ option; b. All payments already made shall be forfeited; and c. Myers shall
have the right to re-enter the property and take possession. Moreover, if Maritime refuses to peacefully deliver
the possession of the properties subject of this contract to the Myers in case of rescission, a suit should be brought
in court by the Myers to seek judicial declaration of rescission.

Unfortunately, Maritime failed to pay the installment for March 1961, for which the Vice-President,
George Schedler,of the Maritime Building Co., Inc., wrote a letter to the President of Myers, Mr. C. Parsons,
requesting for a moratorium on the monthly payment of the installments until the end of the year 1961, for the
reason that the said company was encountering difficulties in connection with the operation of the warehouse
business. Consequently, on May 1961, Myers made a demand upon Maritime for the unpaid installments; also,
Myers advised Maritime of the cancellation of the Deed of Conditional Sale and demanded the return of the
property, holding Maritime liable for rentals at P10, 000.00 monthly. Myers thereafter demanded from its lessee,
Luzon Brokerage, to avoid paying to the wrong party, filed an action for interpleader. After the filing of this
action, the Myers Building Co., Inc. in its answer filed a cross-claim against the Maritime Building Co., Inc. praying
for the confirmation of its right to cancel the said contract.

ISSUE:

Whether or not Myers Company is entitled to extra-judicially rescind the Deed of Conditional Sale

RULING:

YES. The Court held in Lopez v. Commissioner of Customs that a judicial action for the rescission of a
contract is not necessary where the contract provides that it may be revoked and cancelled for violation of any of
its terms. As further explained in UP v. de los Angeles, the party who deems the contract violated may consider it
resolved or rescinded without previous court action, but it proceeds at its own risk. For it is only the final judgment
of the corresponding court that will conclusively and finally settle whether the action taken was or was not correct
in law. But the law definitely does not require that the contracting party who believes itself injured must first file
suit and wait for a judgment before taking extrajudicial steps to protect its interest.

Neither can Maritime invoke Civil Code Art. 1592 (where vendee in default can continue to make
payments as long as no judicial/notarial demand for rescission has been made) because the cross-claim filed by
Myers constitutes a judicial demand for rescission that satisfies the said article.

Heirs of Ignacio vs Home Bankers Savings and Trust Company 689 SCRA 174 (2013)

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
loan extended to him by said bank. These properties which are located in Cabuyao, Laguna containing an area of
83,303 square meters and 120,110 square meters, respectively.

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. 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.

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 Issue

ISSUE:

Whether a contract for the repurchase of the foreclosed properties was perfected between petitioner and
respondent bank.

HELD:

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.

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.

Manila Metal Container Corporation vs Philippine National Bank

Facts:
Petitioner was the owner of 8,015 square meters of parcel of land located in Mandaluyong City, Metro
Manila. To secure a P900,000.00 loan it had obtained from respondent Philippine National Bank, petitioner
executed a real estate mortgage over the lot. Respondent PNB later granted petitioner a new credit
accommodation. On August 5, 1982, respondent PNB filed a petition for extrajudicial foreclosure of the real
estate mortgage and sought to have the property sold at public auction. After due notice and publication, the
property was sold at public action where respondent PNB was declared the winning bidder. Petitioner sent a letter
to PNB, requesting it to be granted an extension of time to redeem/repurchase the property. Some PNB
personnel informed that as a matter of policy, the bank does not accept “partial redemption”. Since petitioner
failed to redeem the property, the Register of Deeds cancelled TCT No. 32098 and issued a new title in favor of
PNB.
 Meanwhile, the Special Asset Management Department (SAMD) had prepared a statement of account of
petitioner’s obligation. It also recommended the management of PNB to allow petitioner to repurchase the
property for P1,574,560.oo. PNB rejected the offer and recommendation of SAMD. It instead suggested to
petitioner to purchase the property for P2,660,000.00, in its minimum market value. Petitioner declared that it
had already agreed to SAMD’s offer to purchase for P1,574,560.47 and deposited a P725,000.00.
Issue:
Whether or not petitioner and respondent PNB had entered into a perfected contract for petitioner to
repurchase the property for respondent.

Ruling:
The SC affirmed the ruling of the appellate court that there was no perfected contact of sale between the
parties.
A contract is meeting of minds between two persons whereby one binds himself, with respect to the other,
to give something or to render some service. Under 1818 of the Civil Code, there is no contract unless the
following requisites concur:
1. Consent of the contracting parties;
2. Objection certain which is the subject matter of the contract;
3. Cause of the obligation which is established.
Contract is perfected by mere consent which is manifested by the meeting of the offer and the acceptance
upon the thing and causes which are to constitute the contract. Once perfected, the bind between other
contracting parties and the obligations arising therefrom have the form of law between the parties and should be
complied in good faith. The absence of any essential element will negate the existence of a perfected contract of
sale.
In the case at bar, the parties to the contract is between Manila Metal Container Corporation and Philippine
National Bank and not to Special Asset Management Department. Since the price offered by PNB was not
accepted, there is no contract. Hence it cannot serve as a binding juridical relation between the parties.

JOVAN LAND v. COURT OF APPEALS & QUESADA FACTS:

FACTS:

Petitioner Jovan Land, Inc. is a corporation engaged in real estate business. On the other hand, herein
private respondent Eugenio Quesada is the owner of the Q Building located in Mayhaligue, Sta. Cruz, Manila.

Petitioner learned from one Consolacion Mendoza that private respondent was selling his Mayhaligue
property. Thus, petitioner thru its president made a written offer to private respondent. The first two offers were
rejected. However, on the third attempt, Sy sent a letter to Quesada constituting the offer; the letter having
annotation with the phrase “received original, 9-8-89” beside which appears the signature of private respondent.

In lieu, petitioner insist that a perfected agreement to sell the Mayhaligue property existed, hence, it filed
with the RTC of Quezon City a complaint for specific performance and collection of sum of money and damages.
However, the trial court ruled against petitioner. On appeal to the CA, the appelate court just affirmed the trial
court’s decision.

ISSUE:
Whether or not there was a contract of sale perfected and thus is valid?

RULING:

No. That it is a fundamental principle that before a contract of sale be valid the following must be present:

1. consent or meeting of the minds;

2. Determinate subject matter; and,

3. Price certain in money or its eqivalent.

That until contract of sale is perfected, it cannot, as an independent source of obligation, serve as a binding
juridical relation between the parties.

In the case at bar, petitioner anchors its arguments on the third letter-offer, however, the court ruled that there is
nothing written or documentary to show that such offer was accepted by private respondent and such annotation
in the letter is just a mere memorandum of the receipt. The requisites of a valid contract of sale are lacking in the
said receipt and therefore, the “sale” is not valid.

Villanueva vs PNB 510 SCRA 275 (2005)

Facts:

The Special Assets Management Department (SAMD) of the Philippine National Bank (PNB) issued an
advertisement for the sale thru bidding of certain PNB properties in Calumpang, General Santos City consisting of
22,780 square meters, with an advertised floor price of P1,409,000.00, and Lot No. 19, covered by TCT No. T-
15036, consisting of 41,190 square meters, with an advertised floor price of
P2,268,000.00.Bidding was subject to the following conditions:

1) that cash bids be submitted not later than April 27, 1989;
2) that said bids be accompanied by a 10% deposit in managers or cashiers check; and
3) that all acceptable bids be subject to approval by PNB authorities.

In a June 28, 1990 letter to the Manager, PNB-General Santos Branch, Reynaldo Villanueva offered to
purchase Lot Nos. 17 and 19 for P3,677,000.00. He also manifested that he was depositing P400,000.00 to show
his good faith but with the understanding that said amount may be treated as part of the payment of the
purchase price only when his offer is accepted by PNB. At the bottom of said letter there appears an unsigned
marginal note stating that P400,000.00 was deposited into Villanuevas account with PNB-General Santos Branch.

Issue:

Whether a perfected contract of sale exists between petitioner and respondent PNB.

Held:

Contracts of sale are perfected by mutual consent whereby the seller obligates himself, for a price
certain, to deliver and transfer ownership of a specified thing or right to the buyer over which the latter agrees.
Mutual consent being a state of mind, its existence may only be inferred from the confluence of two acts of the
parties: an offer certain as to the object of the contract and its consideration, and an acceptance of the offer which
is absolute in that it refers to the exact object and consideration embodied in said offer. 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.

Limketkai Sons Milling, Inc vs CA 255 SCRA 626 (1996)

FACTS:

Philippine Remnants was the owner of a piece of land which it then entrusted to BPI. Pedro Revilla was
authorized by BPI to sell the lot for PHP1000/sqm. Revilla contacted Alfonso Lim who agreed to buy the land.
Alfonso Lim and Albino Limketkai went to BPI and were entertained by VP Albano and Asst. VP Aromin. BPI set
the price at 1,100 while Limketkai haggled to 900. They subsequently agreed on Php1,000 on cash basis. Alfonso
Lim asked if it was possible to pay on terms and BPI officials said there was no harm in trying to ask for payment in
terms but if disapproved, the price would have to be paid in cash. Limketkai paid the initial 10% with the
remaining 90% to follow. Two or three days later, Alfonso Lim found out that their offer had been frozen and then
went to BPI to tender full payment of 33M to Albano but was refused by both Albano & Bona.

Issue:

WON there was a perfected contract of sale.

Held:

Perfection of the contract took place when Aromin and Albano, acting for BPI, agreed to sell and Alfonso
Lim & Albino Limketkai, agreed to buy the lot at Php1000/sqm. A consensual contract is perfected upon mere
meeting of the minds and although the deed of sale had yet to be notarized, it does not mean that no contract
was perfected.

Consent is manifested by the meeting of the offer and acceptance upon the thing, and the cause which
are to constitute the contract. The offer must be certain and acceptance absolute. Limketkai’s acceptance was
qualified and therefore, was actually a counter offer.