Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No.

161524 January 27, 2006

LAURA M. MARNELEGO, Petitioner, vs. BANCO !L!P!NO SA"!NGS AN# MORTGAGE BAN$, Respondent. DECISION PUNO, J.: his is a petition for revie! of the decision of the Court of "ppeals dated October #, $%%& in C"'(.R. CV No. )*+%* and its resolution dated Dece,ber &%, $%%&. he facts are as follo!sIn Septe,ber *#.%, Spouses Patric/ and 0eatri1e Price and petitioner 2aura Marnele3o e4ecuted a Deed of Conditional Sale over a parcel of land located at 5ouston Street, 06 5o,es, Para7a8ue, Metro Manila and its i,prove,ents. he contract sho!ed that the propert9 !as ,ort3a3ed to respondent 0anco 6ilipino Savin3s and Mort3a3e 0an/ :0anco 6ilipino; and 06 5o,es, and that Spouses Price a3reed to pa9 the a,orti1ations for the first si4 ,onths be3innin3 "u3ust *#.% to <anuar9 *#.* !hile petitioner !ould assu,e the succeedin3 a,orti1ations. * It appears, ho!ever, that !hen the parties faltered on the a,orti1ations, respondent ban/ foreclosed the ,ort3a3e and ac8uired the propert9 at public auction. It later consolidated the title to the propert9 in its na,e after petitioner failed to redee, it. he Re3ional rial Court of Ma/ati issued a !rit of possession in 6ebruar9 *#.=.$ In her letter dated <une *+, *#.=, & petitioner ,ade an offer to 0anco 6ilipino to repurchase the propert9 forP&*%,%%%.%%. he letter read<une *+, *#.= 0anco 6ilipino Paseo de Ro4as Ma/ati, Metro Manila "ttention- RIC"RDO ("0RIE2 "ssistant Mana3er Real Estate Depart,ent Dear SirMa9 I re8uest for a reconsideration on the propert9 located at 2ots *) and *# 0loc/ #+, 0arrio San Dionisio, Parana8ue, Metro

Manila !hich has been appraised b9 the ban/ atP&>$,%%%.%%. he house needs repairs on the roof as it is lea/in3. he floorin3 needs ne! !ood par8uet, all the 3utters needs ? sic@ to be replaced. here are crac/s on the !alls !hich needs ?sic@ ne! finishin3. "side fro, ter,ites around the house !hich needs ?sic@ to be controlled. "ll of these IA, sure has been noticed b9 the ban/?A@s appraiser. In these ?sic@ connection therefore, I !ould li/e to offer P&*%,%%%.%% for the propert9. han/ 9ou. Sincerel9 9ours, :s3d; 2"BR" M. M"RNE2E(O In response, 0anco 6ilipino !rote to petitioner on Septe,ber $%, *#.= in this !ise- = Septe,ber $%, *#.= MS. 2"BR" M. M"RNE2E(O No. $= 5ouston Street 06 5o,es, ?sic@ Subdivision Para7a8ue, Metro Manila SB0<EC - Repl9 to 9our *+ <une *#.= letter Re- 6oreclosed Propert9 of (audencio Pere9ra Dear Ms. Marnele3o, Please be infor,ed that 9our re8uest to repurchase the subCect propert9 has been approved b9 the Co,,ittee on Disposal of 0an/ Properties per Resolution No. DCR'*=&'.= in the a,ount of P&>$,%%%.%% but on the follo!in3 ter,s and conditionsa. Cash pa9,ent of P&*%,%%%.%% upon approval of the re8uestDproposal, other!ise the ban/ shall i,,ediatel9 i,ple,ent its Erit of Possession. b. 0alance of P+$,%%%.%% to be paid !ithin one :*; 9ear at the rate of &+F interest per annu,. han/ 9ou. :s3d; RIC"RDO <. ("0RIE2 "ssistant Mana3er Real Estate Depart,ent SECRE "RG, COMMI EE ON DISPOS"2 O6 0"NH PROPER IES

Petitioner replied on October #, *#.=- + October #, *#.= $& 5ouston St. 0.6. 5o,es Phase III Metro'Manila 0anco 6ilipino Paseo de Ro4as Ma/ati, Metro Manila "ttention- RIC"RDO ("0RIE2 "ssistant Mana3er Real Estate Depart,ent Dear Sirhis is in reference to 9our letter dated Septe,ber $%, *#.= infor,in3 us of the as/in3 price and ter,s for the house and lot of hree 5undred Si4t9 !o housand Pesos Onl9 :P&>$,%%%.%%; located at 2ots *) and *# 0loc/ #+, 0arrio San Dionisio, Parana8ue, Metro Manila. In these ?sic@ connection therefore, ,a9 I offer the su, of One 5undred housand Pesos Onl9 :P*%%,%%%.%%; as do!npa9,ent and the balance to be paid in five :+; e8ual install,ent?s@ and to be paid !ithin five :+; 9ears !ith interest thereon. han/ 9ou. Sincerel9 9ours, :s3d; 2"BR" M. M"RNE2E(O In <anuar9 *#.+, the Central 0an/ of the Philippines ordered the closure and li8uidation of 0anco 6ilipino. Pendin3 the li8uidation of the ban/, the Deput9 Sheriff of the Re3ional rial Court of Ma/ati i,ple,ented the !rit of possession issued b9 the court. Petitioner pleaded !ith the ban/As Deput9 2i8uidator to allo! her to sta9 in the pre,ises !hile the ban/ considers her proposal to repurchase the propert9.> he ban/, throu3h its le3al counsel, "tt9. Vic Villanueva, 3ranted petitionerAs re8uest. ) On Dece,ber +, *#.+, petitioner ,ade a proposal to the Deput9 2i8uidator of 0anco 6ilipino to purchase the propert9.. 5er letter e4plains the ter,s and conditions of her proposal, thusDece,ber +, *#.+ MR. "20ER O V. REGES Deput9 2i8uidator, 0anco 6ilipino Paseo de Ro4as, Ma/ati,

Metro Manila Dear Mr. Re9eshis is a proposal to purchase the propert9 !hich !e are presentl9 occup9in3 situated at I$& 5ouston St., 06 5o,es Subd., Parana8ue Phase III :2ot?s@ *) J *#, 0loc/ #+; o!ned b9 Spouses Pere9ra and no! classified as an "SSE ' "CKBIRED of the ban/ under the follo!in3 ter,s and conditions*. Purchase price to be deter,ined b9 the 2i8uidator $. Purchase price to be pa9able as follo!s$.". P*$%,%%%.%% to be deposited i,,ediatel9 and to be lod3ed as "DP for the undersi3ned $.0. 0alance to be paid once the restrainin3 orderDpreli,inar9 inCunction is lifted b9 the Supre,e Court in the case filed b9 the officers of 0anco 6ilipino Should I fail to pa9 the balance upon notice, then I hereb9 underta/e to voluntaril9 vacate the pre,ises and surrender possession thereof to 06 and I further underta/e to pa9 rentals for the use of the pre,ises at P*,%%%.%% a ,onth fro, Dece,ber, *#.+, up to the ti,e that possession is 3iven to 06. he a,ount of rentals shall be deducted fro, ,9 aforesaid deposit and the e4cess to be refunded to ,e. In case li8uidation pushes throu3h and the propert9 is sold at public biddin3 and a!arded to other bidders other than the undersi3ned, then ,9 deposit ofP*$%,%%%.%% shall be rei,bursed to ,e. he fore3oin3 is offered to a,pl9 protect the interest of the ban/ !hile our court are ?sic@ deliberatin3 on the cases pertinent to the li8uidation and also to re8uest that in the ,eanti,e, the e4ecution of the !rit of possession in 2RC Case IM' $)> be te,poraril9 held in abe9ance since the undersi3ned is read9, !illin3 and able to bu9 the subCect propert9 but for reason of technicalit9, the process of li8uidation is te,poraril9 stopped. his proposal if acceptable shall not in an9!a9 ?sic@ novate, ,odif9 or e4tin3uish an9 ri3ht !hich 06 ,a9 had ?sic@ on the subCect propert9 includin3 the i,ple,entation of the !rit of possession in 2RC Case No. M'$)>. han/ 9ou. Ver9 trul9 9ours, :s3d; 2"BR" M"RNE2E(O he 0an/ 2i8uidator responded to petitionerAs proposal in her letter dated "pril &, *#.>, thus- #

"pril &, *#.> Mrs. 2aura Marnele3o $& 5ouston Street 06 5o,es Subdivision Phase II?I@ Parana8ue, Metro Manila Dear Mrs. Marnele3ohis refers to 9our letter dated Dece,ber +, *#.+ proposin3 to purchase the ban/As propert9 presentl9 occupied b9 9ou and re8uestin3 for the defer,ent of the e4ecution of the Erit of Possession. Ee can onl9 consider 9our offer to bu9 the propert9 and allo! 9our te,porar9 occupanc9 of the sa,e under the follo!in3 conditions*. hat sale of the propert9 after the liftin3 of the Supre,e Court Restrainin3 Order shall be subCect to Central 0an/ rulesDre3ulations on the ,atter for closed ban/sL $. hat rental at P*,%%%.%% per ,onth shall be collected and char3ed a3ainst 9our deposit of P*)%,%%%.%% startin3 Dece,ber, *#.+L &. hat no interests shall accrue to 9our deposit and that sa,e shall be rei,bursed onl9 !hen the propert9 is a!arded to another bidderL =. hat should 9ou !in in the biddin3 but fail to produce the balance of the purchase price set b9 the li8uidator, 9ou a3ree to i,,ediatel9 vacate the propert9 and the deposit shall be returned to 9ou net of the ,onthl9 rental of P*,%%%.%% startin3 Dece,ber, *#.+ up to the ti,e o!nership of the propert9 is ta/en bac/ b9 the 0an/ !hich rental shall be collectedL +. "nd to such other ter,s and conditions the 2i8uidator ,a9 further dee, necessar9 to protect the interest of the 0an/. Please confer !ith us on the above conditions soonest. Ver9 trul9 9ours, C"R2O " P. V"2ENMBE2" 2i8uidator 09:s3d; "20ER O V. REGES On Nove,ber $$, *##+, after the ban/ resu,ed its operations, it sent a letter to petitioner de,andin3 that the9 vacate the pre,ises !ithin five da9s fro, receipt thereof. *% Petitioner filed a co,plaint !ith the Re3ional rial Court of Para7a8ue for specific perfor,ance. Invo/in3 the letter dated Septe,ber $%, *#.= of Mr. Ricardo <. (abriel, "ssistant Mana3er, Real

Estate Depart,ent and Secretar9 of the Co,,ittee on Disposal of 0an/ Properties, petitioner clai,ed that the ban/ has approved her proposal for the ac8uisition of the propert9. Petitioner pra9ed that the court order the ban/ to e4ecute the necessar9 Deed of Sale of the propert9 in 8uestion.** he trial court ruled in favor of petitioner. It held that there !as a perfected contract of sale bet!een petitioner and respondentL that the parties have a3reed on the purchase price of P&>$,%%%.%%L and that the ter,s set in the ban/As letter of Septe,ber $%, *#.= are ,erel9 conditions in the perfor,ance of the obli3ation and not a condition for the birth of the contract. *$ he dispositive portion of the decision readsEherefore, Cud3,ent is hereb9 rendered in favor of the plaintiff and a3ainst the defendant*. Orderin3 the defendant to e4ecute the Deed of "bsolute Sale, upon pa9,ent, over the parcels of land covered b9 ransfer Certificate of itle Nos. )*>>% and )*>>* of the Re3istr9 of Deeds of Para7a8ue Cit9 and to pa9 Php$%,%%%.%% as and for attorne9As feesL $. Orderin3 the plaintiff to pa9 the purchase price of Php)$=,%%%.%% less the a,ount of Php*$%,%%%.%% as advance pa9,ent i,,ediatel9L &. No pronounce,ent as to costs. SO ORDERED. On appeal, the Court of "ppeals reversed the decision of the trial court. It found that there !as no perfected contract of sale bet!een petitioner and respondent ban/. here !as ,erel9 a series of offers and counter'offers bet!een the parties but the9 never reached an a3ree,ent as to the purchase price. 5ence, this petition. Petitioner ar3ues*. he Court of "ppeals 3ravel9 erred in findin3 that there !as no perfected contract bet!een the parties. $. he Court of "ppeals 3ravel9 erred in not findin3 that the ,odified ter,s of pa9,ent offered b9 petitioner !as ?sic@ ,erel9 a condition on the perfor,ance of an obli3ation, not a condition i,posed on the perfection of the contract. he petition is devoid of ,erit. he issue in this case is !hether there is a perfected contract of sale bet!een petitioner and respondent 0anco 6ilipino concernin3 the propert9 in 8uestion. " contract of sale is perfected at the ,o,ent there is a ,eetin3 of ,inds upon the thin3 !hich is the obCect of the contract and upon the price. 6ro, that ,o,ent, the parties ,a9 reciprocall9 de,and perfor,ance subCect to the la! 3overnin3 the for, of contracts. *& In the case at bar, the subCect of the contract is clear, that is, the house and lot !here petitioner presentl9 resides. 5o!ever, it appears fro, the records that the parties have not reached an a3ree,ent on the purchase price.

It has been ruled that a definite a3ree,ent on the ,anner of pa9,ent of the purchase price is an essential ele,ent in the for,ation of a bindin3 and enforceable contract of sale. *= he e4chan3e of letters bet!een petitioner and respondent sho!s that petitioner first offered to bu9 the propert9 for P&*%,%%%.%%, considerin3 the nu,erous repairs that had to be done in the house. *+ Respondent, in its letter dated Septe,ber $%, *#.=, infor,ed petitioner that the ban/ has approved her re8uest to repurchase the propert9 in the a,ount ofP&>$,%%%.%% but subCect to the follo!in3 ter,s and conditions- :*; cash pa9,ent of P&*%,%%%.%% upon approval of the re8uestDproposal, and :$; balance of P+$,%%%.%% to be paid !ithin one :*; 9ear at the rate of &+F interest per annu,. *> Petitioner, in her letter to the ban/ dated October #, *#.=, ,ade a counter'offer to pa9 a do!n pa9,ent of P*%%,%%%.%% and to pa9 the balance in + e8ual install,ents to be paid in + 9ears !ith interest. 0efore the ban/ could act on petitionerAs proposal, the Central 0an/ of the Philippines ordered the closure of 0anco 6ilipino and placed it under li8uidation. hus on Dece,ber +, *#.+, petitioner !rote to Mr. "lberto V. Re9es, Deput9 2i8uidator of 0anco 6ilipino, proposin3 to purchase the propert9 under the follo!in3 ter,s and conditions*. Purchase price to be deter,ined b9 the 2i8uidator $. Purchase price to be pa9able as follo!s$.". P*$%,%%%.%% to be deposited i,,ediatel9 and to be lod3ed as "DP for the undersi3ned $.0. 0alance to be paid once the restrainin3 orderDpreli,inar9 inCunction is lifted b9 the officers of 0anco 6ilipino*) On "pril &, *#.>, the Deput9 2i8uidator replied that the9 can onl9 consider the sale of the propert9 after the liftin3 of the e,porar9 Restrainin3 Order issued b9 the Supre,e Court and said sale shall be subCect to the Central 0an/ rules and re3ulations. *. Clearl9, there !as no a3ree,ent 9et bet!een the parties as re3ards the purchase price and the ,anner and schedule of its pa9,ent. Neither of the, had e4pressed acceptance of the other part9As offer and counter'offer. Notable is petitionerAs letter to the ban/As Deput9 2i8uidator, Mr. "lberto V. Re9es, !hich reveals that she herself believed that no a3ree,ent has 9et been reached b9 the parties as re3ards the purchase price after the e4chan3e of co,,unication bet!een her and the ban/. In said letter, she ,ade a totall9 ne! proposal for consideration of the ban/As 2i8uidator N that the purchase price shall be deter,ined b9 the 2i8uidatorL that she !ould deposit the a,ount of P*$%,%%%.%% to be lod3ed in her accounts pa9ableL and that she !ould pa9 the balance after the liftin3 of the te,porar9 restrainin3 order issued b9 the Court on the ban/As transactions. Ee find, therefore, that the Court of "ppeals did not err in reversin3 the decision of the trial court. "s the parties have not a3reed on the purchase price for the propert9, petitionerAs action for specific perfor,ance a3ainst the ban/ ,ust fail. !N "!E% %&EREO , the petition is #EN!E#. SO OR#ERE#.

RE'NATO S. PUNO "ssociate <ustice