MANILA METAL CONTAINER CORP. VS.

PNB

G.R. No. 166862 December 20, 2006

Petitioner: Manila Metal Container Corporation

Respondents: Philippine National Bank

Ponente: Callejo, SR., J.

FACTS

(a) Petitioner was the owner of a 8,015 square meter parcel of land located in Mandaluyong (now a
City), Metro Manila.
(b) The property was covered by Transfer Certificate of Title (TCT) No. 332098 of the Registry of Deeds
of Rizal.
(c) To secure a P900,000.00 loan it had obtained from respondent Philippine National Bank (PNB),
petitioner executed a real estate mortgage over the lot.
(d) 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 for P911,532.21, petitioner's
outstanding obligation to respondent PNB as of June 30, 1982,6 plus interests and attorney's fees.
(e) After due notice and publication, the property was sold at public auction on September 28, 1982
where respondent PNB was declared the winning bidder for P1,000,000.00.
(f) The Certificate of Sale issued in its favor was registered with the Office of the Register of Deeds
of Rizal, and was annotated at the dorsal portion of the title on February 17, 1983.
(g) Since petitioner failed to redeem the property, the Register of Deeds cancelled TCT No. 32098 on
June 1, 1984, and issued a new title in favor of respondent PNB.
(h) The SAMD recommended to the management of respondent PNB that petitioner be allowed to
repurchase the property for P1,574,560.00. In a letter dated November 14, 1984, the PNB
management informed petitioner that it was rejecting the offer and the recommendation of the
SAMD.
(i) It was suggested that petitioner purchase the property for P2,660,000.00, its minimum market
value. Respondent PNB gave petitioner until December 15, 1984 to act on the proposal;
otherwise, its P725,000.00 deposit would be returned and the property would be sold to other
interested buyers.
(j) Petitioner, however, did not agree to respondent PNB's proposal.
(k) Petitioner declared that it had already agreed to the SAMD's offer to purchase the property
for P1,574,560.47, and that was why it had paid P725,000.00. Petitioner warned respondent PNB
that it would seek judicial recourse should PNB insist on the position.18
(l) On August 28, 1989, petitioner filed a complaint against respondent PNB for "Annulment of
Mortgage and Mortgage Foreclosure, Delivery of Title, or Specific Performance with Damages."
(m) Petitioner maintains that it had accepted respondent's offer made through the SAMD, to sell the
property for P1,574,560.00.
(n) Petitioner posits that respondent was proscribed from increasing the interest rate after it had
accepted respondent's offer to sell the property for P1,574,560.00.
 (o) Petitioner avers that its failure to append its conformity to the June 4, 1984 letter of respondent
and its failure to pay the balance of the price as fixed by respondent within the 60-day period
from notice was to protest respondent's breach of its obligation to petitioner.
(p) Respondent contends that the parties never graduated from the "negotiation stage" as they could
not agree on the amount of the repurchase price of the property.
(q) Since there is no perfected contract in the first place, there is no basis for the application of the
principles governing "suspensive conditions."

ISSUES

1. The threshold issue is whether or not petitioner and respondent PNB had entered into a perfected
contract for petitioner to repurchase the property from respondent.
2. Whether or not the June 4, 1985 letter of the defendant approving/accepting plaintiff's offer to
purchase the property is still valid and legally enforceable
3. Whether or not the plaintiff has waived its right to purchase the property when it failed to
conform with the conditions set forth by the defendant in its letter dated June 4, 1985

HELD:

1. No. The petitioner and respondent PNB has not entered into a perfect contract for petitioner to
repurchase the property from respondent. The ruling of the appellate court that there was no
perfected contract of sale between the parties on June 4 1985 is correct appears that although
respondent requested petitioner to conform to its amended counteroffer petitioner refused and
instead requested respondent to reconsider its amended counteroffer Petitioner's request was
ultimately rejected and respondent.
2. No. The court declared that respondent had rejected petitioner’s offer to repurchase the property.
Petitioner, in turn, rejected the terms and conditions contained in the June 4, 1985 letter of the
SAMD
3. No. The petitioner had offered to repurchase the property per its letter of July 14, 1988, the
amount of P643,422.34 was way below the P1,206,389.53 which respondent PNB had demanded.
It further declared that the P725,000.00 remitted by petitioner to respondent PNB on June 4,
1985 was a "deposit," and not a down payment or earnest money.

Hence, SC denied the petition and CA’s decision is affirmed.