Heirs of Ignacio vs. Home Bankers Savings and Trust Co. (2013) (Civil Law)

Heirs of Ignacio vs. Home Bankers Savings and Trust Co. | G.R. No. 177783 | January 23, 2013

Facts: The case sprang from a real estate mortgage of two parcels of land in August 1981. Fausto C. Ignacio mortgaged the properties to Home Bankers Savings and Trust Company (Bank) as security for a loan extended by the Bank. After Ignacio defaulted in the payment of the loan, the property was foreclosed and subsequently sold to the Bank in a public auction.Ignacio offered to repurchase the property. Universal Properties Inc. (UPI), the bank’s collecting agent sent Ignacio a letter on March 22, 1984 which contained the terms of the repurchase. However, Ignacio annotated in the letter new terms and conditions. He claimed that these were verbal agreements between himself and the Bank’s collection agent, UPI.No repurchase agreement was finalized between Ignacio and the Bank. Thereafter the Bank sold the property to third parties. Ignacio then filed an action for specific performance against the Bank for the reconveyance of the properties after payment of the balance of the purchase price. He argued that there was implied acceptance of the counter-offer of the sale through the receipt of the terms by representatives of UPI. The Bank denied that it gave its consent to the counter-offer of Ignacio. It countered that it did not approve the unilateral amendments placed by Ignacio.

Issue: Whether or not the negotiations between Ignacio and UPI is binding on the Bank.

Held: A contract of sale is perfected only when there is consent validly given. There is no consent when a party merely negotiates a qualified acceptance or a counter-offer. An acceptance must reflect all aspects of the offer to amount to a meeting of the minds between the parties.In this case, while it is apparent that Ignacio proposed new terms and conditions to the repurchase agreement, there was no showing that the Bank approved the modified offer. 

The negotiations between Ignacio and UPI, the collection agent, were merely preparatory to the repurchase agreement and, therefore, was not binding on the Bank. Ignacio could not compel the Bank to accede to the repurchase of the property.

A corporation may only give valid acceptance of an offer of sale through its authorized officers or agents. Specifically, a counter-offer to repurchase a property will not bind a corporation by mere acceptance of an agent in the absence of evidence of authority from the corporation’s board of directors.