Manila Metal Container Corporation vs Philippine National Bank
[GR No. 166862, December 20, 2006]
Callejo, Sr., J.:
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.
The court ruled in Boston
Bank of the Philippines vs Manalo:
“A definite agreement as
to the price is an essential element of a binding agreement to sell personal or
real property because it seriously affects the rights and obligations of the
parties. Price is an essential element in the formation of a binding and
enforceable contract of sale. The fixing of the price can never be left to the
decision of 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.”
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.
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