Navarra vs.

Planters
Saturday, July 5, 2014

Facts:
Spouses Jorge and Carmelita Navarra obtained loan of 1.2 M from Planters Bank.
They mortagaged 5 LOTS for security. Couple failed to pay, so the bank foreclosed on the
mortgage and sold it for more than 1.3 M. Bank was highest bidder. 1 year redemption
expired w/o it having been redeemed by couple.
RRRC Development Corporation on the other hand, a real estate company owned by the
parents of Carmelita, obtained a loan with the same bank. They also mortgaged a certain
property as security. They also failed to pay and the mortgaged assets was foreclosed. BUT
they were able to negotiate with the bank by way of concession .
Eventually, the foreclosed properties of RRRC were sold to third persons whose payments
were directly made to the Bank, were in excess by P300,000.00 for the redemption price.
In July 1985 - Back to the spouses, Jorge sent a letter to the bank proposing to
repurchase the said 5 LOTS previously foreclosed.
In response, Planters Bank, thru its Vice-President wrote back Navarra via a letter
agreeing to the request and telling him to see the Head of the banks Acquired Assets Unit
for the details of the transaction so that they may work on the necessary documentation.
In August 1985 - Jorge went to see the Head with a letter requesting that the excess
payment ofP300,000.00 in connection with the redemption made by the RRRC be applied
as down payment for the Navarras repurchase of their foreclosed properties but because
the amount of P300,000.00 was sourced from a different transaction between RRRC and
Planters Bank and involved different debtors, the Bank required Navarra to submit a board
resolution from RRRC authorizing him to negotiate for and its behalf and empowering him to
use the amount
In Jan 1987 - Planters Bank sent a letter to Jorge Navarra informing him that it could not
proceed with the documentation of the proposed repurchase of the foreclosed properties on
account of his non- compliance with the Banks request for the submission of the needed
board resolution of RRRC. Navarra claimed having already delivered copies of the required
board resolution to the Bank. The Bank, however, did not receive said copies.
In June 1987 - Navarras filed their complaint for Specific Performance against bank.
Planters Bank asserted however that there was no perfected contract of sale because the
terms and conditions for the repurchase have not yet been agreed upon
Sep 1988 Planters bank sold the properties to Gatchalian Realty
RTC ruled for the Navarra spouses and said there was perfected Contract of Sal.
The CA reversed the trial court ruling.
Issue: WON there was perfected Contract of Sale
Ruling: NO. SC upheld the CA decision.
Navarras assert that the following exchange of correspondence between them and Planters
Bank constitutes the offer and acceptance. The July 1985 letter being the offer from Navarra
and the Aug 1985 letter-reply from the Bank the acceptance. BUT SUCH WERE NOT
CERTAIN OFFER and ABSOLUTE ACCEPTANCE.
While the foregoing letters indicate the amount of P300,000.00 as down payment, they are,
however, completely silent as to how the succeeding installment payments shall be made.

At most, the letters merely acknowledge that the down payment of P300,000.00 was agreed
upon by the parties. However, this fact cannot lead to the conclusion that a contract of sale
had been perfected. Quite recently, this Court held that before a valid and binding contract
of sale can exist, the manner of payment of the purchase price must first be established
since the agreement on the manner of payment goes into the price such that a
disagreement on the manner of payment is tantamount to a failure to agree on the price.
Navarras letter/offer failed to specify a definite amount of the purchase price for the
sale/repurchase of the subject properties. It merely stated that the "purchase price will be
based on the redemption value plus accrued interest at the prevailing rate up to the date of
the sales contract." The ambiguity of this statement only bolsters the uncertainty of the
Navarras so-called "offer" for it leaves much rooms for such questions.
Also not clear insofar as concerned the exact number of years that will comprise the longterm payment scheme. As we see it, the absence of a stipulated period within which the
repurchase price shall be paid all the more adds to the indefiniteness of the Navarras offer.
Further, the tenor of Planters Banks letter-reply negates the contention of the Navarras that
the Bank fully accepted their offer. The letter specifically stated that there is a need to
negotiate on the other details of the transaction before the sale may be formalized. Such
statement in the Banks letter clearly manifests lack of agreement between the parties as to
the terms of the purported contract of sale/repurchase, particularly the mode of payment of
the purchase price and the period for its payment. The law requires acceptance to be
absolute and unqualified.