Manila Metal Container Corp. v. PNB

Sales Chapter 5 MANILA METAL CONTAINER CORP. v. PNB G.R. No. 166862 December 20, 2006 Facts − − − − −

− − − −

−

−

−

− − − −

Petitioner was owner of a land located in Mandaluyong and mortgaged said land to PNB to secure a 900k loan. PNB later granted petitioner a new credit accomodation of Php 1M. March 1981: Petitioner secured another loan from PNB amounting to 653k August 1982: respondent filed for extrajudicial foreclosure of the rea estate mortgage and sought to have the property sold at a public autction for Php 911, 532. 21 The property was sold in the auction in favor of PNB for Php 1M. It was registered in the RD of Rizal and was annotated the dorsal portion of the Title. The period to redeem the property is to expire after one year. (February 17, 1983- February 17,1984) August 25, 1983: Petitioner requested PNB (through a ltter) to extend the time to redeem or repurchase the property on installment basis. The request was referred to its Pasay City Branch Petitioner sent a letter to Pasay branch to reiterate their request but PNB Pasay replied and said that the bank does not accept “partial redemption” Petitioner failed to redeem the property so a new title was issued in favor of PNB. Meanwhile the Special Assets Management Department (SAMD) had prepared a statement of account of petitioner’s obligation amounted to Php 1, 574, 560.47. o Petitioner remitted 725k to PNB as depoit to repurchase and with official Receipt SAMD recommended to PNB that they allow the petitioner to repurchase the property for PHP1, 574, 560. o PNB rejected and instead proposed that the property be repurchased for Php 2.6M (minimum market value). o PNB said that if they do not purchase the property until December 15, 1984, they will sell it to other interested buyers and the 725k deposit will be returned to them. Petitioner did not agree to PNB’s offer so it sent another letter of request but PNB declined again. It sent another letter, this time through a counsel. o They stated that they already agreed with SAMD’s offer to sell the propery for PHP 1,572,560 and that is why it had deposited the 725k. o Petitioner warned PNB that it would seek judicial recourse should the latter decline their offer. PNB infoemed the petitioner that it accepted the petitioner’s offer but for 1, 931, 389.53 in cash less th 725k deposited. o On page 2 of the letter sent by PNB, the president of petitioner should sign. However, the president did not affix his signature but only confirmed that the letter was accepted. Petitioner did not respond to the letter so PNB requested petitioner to submit an amended offer to repurchase. Petitioner rejected PNB.s offer and said that PNB is already proscribed from increasing the price since it already accepted the 725k deposit. PNB filed for Annulment of Mortgage and Mortgage Foreclosure, Delivery of Title or Specific Perfomance with Damages PNB argued that it had acquired ownership over the property after period to redeem had elapsed. o It claimed that no contract of sale was perfected between it and petitioner.

Block B 2017 Digests

−

− − −

While the case was pending, PNB demanded that petitioner vacate the property but it refused to do so. Petitioner offered to repurchase for P3.5M; PNB rejected because the market value of the property was P30M. Petitoner offered to repurchase for P4.25M; PNB rejected. Trial court decided in favor of PNB. CA affirmed the decision of RTC Thus this petition.

Issue Whether or not MMCC and PNB had entered into a perfected contract for petitioner to repurchase the property from respondent. Held NO PERFECTION. There was no meeting of the minds. 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.42 Once perfected, they bind other contracting parties and the obligations arising therefrom have the form of law between the parties and should be complied with in good faith. The parties are bound not only to the fulfillment of what has been expressly stipulated but also to the consequences which, according to their nature, may be in keeping with good faith, usage and law 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.47 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 There is no evidence that the SAMD was authorized by respondent's Board of Directors to accept petitioner's offer and sell the property for P1,574,560.47. Any acceptance by the SAMD of petitioner's offer would not bind respondent It appears that although respondent requested petitioner to conform to its amended counter-offer, petitioner refused and instead requested respondent to reconsider its amended counter-offer. Petitioner's request was ultimately rejected and respondent offered to refund its P725,000.00 deposit. In sum, then, there was no perfected contract of sale between petitioner and respondent over the subject property. IN LIGHT OF ALL THE FOREGOING, the petition is DENIED.

Block B 2017 Digests