Wednesday, September 3, 2014

[CASE DIGEST] HEIRS OF IGNACIO v. HOME BANKERS SAVINGS & TRUST CO. (G.R. No. 177783)


January 23, 2013

Ponente: Villarama, Jr., J.

FACTS:

·         In August 1981, Judge Fausto C. Ignacio mortgaged two parcels of land in Cabuyao, Laguna to Home Savings Bank and Trust Company ("the bank"), the predecessor of respondent Home Bankers Savings and Trust Company, as security for the P500,000.00 loan extended to him by said bank. 

·         When Ignacio defaulted in the payment of his loan obligation, the bank proceeded to foreclose the real estate mortgage. At the foreclosure sale held in 1983, the bank was the highest bidder. Consequently, the Certificate of Sale issued to the bank was registered with the Registry of Deeds of Calamba, Laguna. With the failure of Ignacio to redeem the foreclosed properties within one year from such registration, title to the properties were consolidated in favor of the bank. 

·         Despite the lapse of the redemption period and consolidation of titles in the name of the bank, Ignacio offered to repurchase the properties. While the bank considered petitioner's offer to repurchase, there was no repurchase contract executed save for a letter dated March 22, 1984, where it was agreed that the total selling price shall be P950,000 in 3 equal installments after making a P150,000 deposit. The letter did not contain the signature of any of the bank's officers.

·         In the meantime, the bank subdivided the parcels of land into lots, some of which were sold to individual buyers. 

·         In 1989, Ignacio expressed his willingness to pay the amount of P600,000.00 in full, as balance of the repurchase price, and requested the bank to release to him the remaining parcels of land. The bank turned down his request, prompting Ignacio to cause the annotation of an adverse claim on the titles of the subject lots. 

·         Thereafter, Ignacio filed an action for specific performance and damages against the bank. Some of the buyers of the lots filed a motion for intervention to assert their status as innocent purchasers for value who had no notice or knowledge of the claim or interest of Ignacio when they bought the properties already registered in the name of the bank. 

·         The trial court ruled in favor of Ignacio and ordered the bank to, among others, execute the appropriate Deed of Reconveyance of the two (2) properties in favor of  Ignacio after he had paid in full the amount of P600,000.00 as balance of the repurchase price.

·         CA reversed the trial court's ruling. The CA held that by modifying the terms of the offer contained in the March 22, 1984, letter of the bank, Ignacio effectively rejected the original offer with his counter-offer. There was also no written conformity by any of the bank's officers to the amended conditions for repurchase which were unilaterally inserted by Ignacio. Consequently, no contract of repurchase was perfected and the bank acted well within its rights when it sold the subject properties. Hence, the instant petition.

RULING: 

Petition for review denied. CA ruling affirmed.

Whether or not a contract for the repurchase of the foreclosed properties was perfected between Ignacio and the bank. – NO.

·         Supposing that the March 22, 1984 letter was valid, it was agreed that Ignacio will pay according to the terms set by the bank for the repurchase of the foreclosed properties, i.e., total purchase price should be P950,000 in 3 equal installments minus the P150,000 deposit. However, not only did Ignacio unilaterally set a different repurchase price of P600,000, he also modified the terms of payment. The CA considered Ignacio's qualified acceptance of the terms as a counter-proposal which must be accepted by the bank. The problem was, there was no evidence of any document or writing showing the conformity of any of the bank's officers to this counter-proposal.

·         In any event, the March 22, 1984 letter is by itself very problematic. As such, it does not constitute a valid repurchase contract. For one, it did not bear the signature of any of the bank's officers. The contract was also made between Ignacio and another person not authorized by the bank or its board of directors. Notably, Ignacio's insistence that the letter allowed for an open-ended payment period defies logic, too. The fact that the terms were also not spelled out clearly and signed by the appropriate officers was highly suspect, considering that Ignacio, who was a judge, and the bank should be keenly aware of the importance of formalizing important repurchase agreements such as this one.

·         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 Ignacio and the bank representatives he talked to. Ignacio 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. 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.

·         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.

·         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.

Whether or not the individual buyers of the subject lots were innocent buyers of value. – DOES NOT MATTER.

Since there was no repurchase contract perfected, the sale of the subject properties to the individual buyers (intervenors) remains valid and binding, and the issue of whether the latter were innocent purchasers for value would be of no consequence.