Moreno vs. Private Management Office
Moreno vs. Private Management Office
PUNO, J.:
At bar is a Petition for Review on Certiorari of the Decision and Resolution of the Court of
Appeals in CA-G.R. CV No. 49227 dated January 30, 2003 and July 31, 2003,
respectively, reversing the decision of the Regional Trial Court of Makati, Branch 62, in
Civil Case No. 93-2756 dated August 10, 1994.
The bare facts are stated in the Joint Motion and Stipulation1 dated March 11,
1994, viz.:
1. Plaintiff is of legal age, with residence at No. 700 Gen. Malvar St.,
Malate, Manila; while defendant is a juridical entity with powers to
sue and be sued under Proclamation No. 50 with offices at the 10th
floor, BA Lepanto Building, 8747 Paseo de Roxas, Makati, Metro
Manila, where it may be served with summons, thru its Trustees.
3. Plaintiff is the owner of the Ground Floor, the 7th Floor and the
Penthouse of the J. Moreno Building and the lot on which it stands.
4. Defendant is the owner of the 2nd, 3rd, 4th, 5th and 6th floors of the
building, the subject-matter (sic) of this suit.
2. On February 13, 1993, the defendant called for a conference for the
purpose of discussing plaintiff's right of first refusal over the floors of the
building owned by defendant. At said meeting, defendant informed
plaintiff that the proposed purchase price for said floors was TWENTY[-
]ONE MILLION PESOS (P21,000,000.00);
5. Then on March 12, 1993, defendant wrote plaintiff that its Legal
Department has questioned the basis for the computation of the
indicative price for the said floors. A copy of the letter is attached hereto
as Annex "C" and made an integral part of this pleading;
6. On April 2, 1993, defendant wrote plaintiff that the APT BOT has
"tentatively agreed on a settlement price of P42,274,702.17" for the said
floors. A copy of this communication is attached hereto as Annex "D"
and made an integral part hereof;
7.01. Whether or not there was a perfected contract of sale over the
said floors for the amount of P21.0 million, which will give rise
to a right on the part of the plaintiff to demand that the said
floors be sold to him for said amount;
8. Both parties hereto hereby waive their respective claims for damages,
attorney's fees and costs;
10. Both parties have agreed to submit this stipulation and to request that a
decision of this Honorable Court be rendered on the basis of the
foregoing stipulation of facts and issues, and after both parties have
submitted their respective memoranda.
PRAYER
xxx
On August 10, 1994, the trial court ruled in favor of petitioner Moreno, viz.:
Respondent filed a Motion for Reconsideration.3 On November 16, 1994, the trial court
denied the motion for lack of merit.4
Respondent appealed with the Court of Appeals. From the time respondent filed its Notice
of Appeal with the trial court, the parties submitted numerous motions, including
petitioner's Motion to Dismiss5 dated July 8, 1996. Petitioner moved that the case be
dismissed due to the failure of respondent to file its brief within the reglementary period.
On December 18, 1997, the Eighth Division of the appellate court granted 6 the motion to
dismiss and denied7 respondent's motion for reconsideration. Respondent then filed a
Petition for Review on Certiorari8 with this Court to reverse the dismissal of the appeal.
On July 5, 1999, this Court, through a Resolution 9 of the Third Division, reversed the
resolution dismissing the appeal on the ground that the appeal raises substantial issues
justifying a review of the case on the merits.
On January 30, 2003, the appellate court found that there was no perfected contract of
sale over the subject floors and reversed the ruling of the trial court, viz.:
Petitioner moved for reconsideration but the motion was denied by the appellate court in
its questioned Resolution11 dated July 31, 2003. Hence, this Petition contending that:
The hinge issue is whether there was a perfected contract of sale over the subject floors
at the price of P21,000,000.00.
A contract of sale is perfected at the moment there is a meeting of minds upon the thing
which is the object of the contract and upon the price. 13 Consent is manifested by the
meeting of the offer and the acceptance upon the thing and the cause which are to
constitute the contract. The offer must be certain and the acceptance absolute.14
To reach that moment of perfection, the parties must agree on the same thing in the same
sense,15 so that their minds meet as to all the terms.16 They must have a distinct intention
common to both and without doubt or difference; until all understand alike, there can be
no assent, and therefore no contract.17 The minds of parties must meet at every point;
nothing can be left open for further arrangement.18 So long as there is any uncertainty or
indefiniteness, or future negotiations or considerations to be had between the parties,
there is not a completed contract, and in fact, there is no contract at all. 19
The letter21 is clear evidence that respondent did not intend to sell the subject floors at
the price certain of P21,000,000.00, viz.:
22 February 1993
ATTY. JOSE FERIA, JR.
FERIA, FERIA, LUGTU & LAO
Ferialaw Building, 336 Cabildo Street
Intramuros, Manila
Dear Atty. Feria:
During its meeting on February 19, 1993, our Board reviewed your letter of
February 18, 1993.
We are pleased to inform you that the Board is in agreement that Mr. Jose
Moreno, Jr. has the right of first refusal. This will be confirmed by our Board
during the next board meeting on February 26, 1993. In the meantime,
please advise Mr. Moreno that the suggested indicative price for APT's five
(5) floors of the building in question is P21 Million.
If you or Mr. Moreno have (sic) any question, please let me know.
JUAN W. MORAN
Associate Executive Trustee
The letter clearly states that P21,000,000.00 is merely a "suggested indicative price" of
the subject floors as it was yet to be approved by the Board of Trustees. Before the Board
could confirm the suggested indicative price, the Committee on Privatization must first
approve the terms of the sale or disposition. The imposition of this suspensive condition
finds basis under Proclamation No. 5022 which vests in the Committee the power to
approve the sale of government assets, including the price of the asset to be sold, viz.:
Petitioner construes Section 12, Article III of the Proclamation differently. He argues that
what the law says is that even before respondent sells or offers for sale a government
asset, the terms thereof have already been previously approved by the Committee, 23 i.e.,
"[s]ubject to its having received the prior written approval of the Committee to sell such
an asset at a price and on terms of payment and to a party disclosed to the Committee,
to sell each asset referred to it by the Committee to such party and on such terms as in
its discretion are in the best interest of the National Government." 24 Thus, the
Committee's approval of the suggested indicative price of P21,000,000.00 is not
necessary.
If we adopt the argument of petitioner, Section 12, Article III would nullify the power
granted to the Committee under Section 5 (4), Article II of the same Proclamation. Under
Section 5 (4), the Committee has the power "to approve or disapprove, on behalf of the
National Government and without need of any further approval or other action from any
other government institution or agency, the sale or disposition of such assets, in each
case on terms and to purchasers recommended by the Trust or the government
institution, as the case may be, to whom the disposition of such assets may have been
delegated; Provided that, the Committee shall not itself undertake the marketing of any
such assets, or participate in the negotiation of their sale."25 The law is clear that the Trust
shall recommend the terms for the Committee's approval or disapproval, and not the other
way around.
To bolster the argument that the Committee's approval may be dispensed with, petitioner
also cites Opinion No. 27, Series of 1989, of the Secretary of Justice which recognizes a
case where the Committee may delegate to respondent the power to approve the sale or
disposition of assets with a transfer price not exceeding P60,000,000.00.27
The argument fails to impress. The Opinion involves a case where "no material discretion
is involved in the disposition of assets pursuant to the subject proposal" and the act which
could be delegated, as opined, is ministerial. The Opinion further notes that "the criteria
and guidelines stated therein are concrete and definite enough that once these criteria
and guidelines are present in a particular case, the APT is practically left with no choice
in the disposition of the assets involved and that all that the APT shall do in disposing off
an asset thereunder is ascertain whether a prospective buyer and the price he offers
satisfy such conditions." Petitioner failed to show that the case at bar is of the same nature
- that is, that the disposition of the subject floors "partakes of the nature of a ministerial
act which has been defined as one performed under a given state of facts, in a prescribed
manner, in obedience to the mandate of legal authority, without regard to the exercise of
judgment upon the propriety or impropriety of the act done."
Petitioner further argues that the "suggested indicative price" of P21,000,000.00 is not a
proposed price, but the selling price indicative of the value at which respondent was willing
to sell.28 Petitioner posits that under Section 14, Rule 130 of the Revised Rules of Court,
the term should be taken in its ordinary and usual acceptation and should be taken to
mean as a price which is "indicated" or "specified" which, if accepted, gives rise to a
meeting of minds.29 This was the same construction adopted by the trial court, viz.:
We do not agree.
Under the same section and rule invoked by petitioner, the terms of a writing are
presumed to have been used in their primary and general acceptation, but evidence is
admissible to show that they have a local, technical, or otherwise peculiar
signification, and were so used and understood in the particular instance, in which case
the agreement must be construed accordingly.31
The reliance of the trial court in the Webster definition of the term "indicative," as also
adopted by petitioner, is misplaced. The transaction at bar involves the sale of an asset
under a privatization scheme which attaches a peculiar meaning or signification to the
term "indicative price." Under No. 6.1 of the General Bidding Procedures and Rules32 of
respondent, "an indicative price is a ball-park figure and [respondent] supplies such a
figure purely to define the ball-park."33 The plain contention of petitioner that the
transaction involves an "ordinary arms-length sale of property" is unsubstantiated and
leaves much to be desired. This case sprung from a case of specific performance initiated
by petitioner who has the burden to prove that the case should be spared from the
application of the technical terms in the sale and disposition of assets under privatization.
It appears in the case at bar that petitioner's construction of the letter of February 22,
1993 - that his assent to the "suggested indicative price" of P21,000,000.00 converted it
as the price certain, thus giving rise to a perfected contract of sale 34 - is petitioner's own
subjective understanding. As such, it is not shared by respondent. Under American
jurisprudence, mutual assent is judged by an objective standard, looking to the express
words the parties used in the contract.35 Under the objective theory of contract,
understandings and beliefs are effective only if shared.36 Based on the objective
manifestations of the parties in the case at bar, there was no meeting of the minds. That
the letter constituted a definite, complete and certain offer is the subjective belief of
petitioner alone. The letter in question is a mere evidence of a memorialization of
inconclusive negotiations, or a mere agreement to agree, in which material term is left for
future negotiations.37 It is a mere evidence of the parties' preliminary transactions which
did not crystallize into a perfected contract. Preliminary negotiations or an agreement still
involving future negotiations is not the functional equivalent of a valid, subsisting
agreement.38 For a valid contract to have been created, the parties must have progressed
beyond this stage of imperfect negotiation. But as the records would show, the parties
are yet undergoing the preliminary steps towards the formation of a valid contract. Having
thus established that there is no perfected contract of sale in the case at bar, the issue
on estoppel is now moot and academic.
Finally, petitioner contends that the appellate court should have dismissed the appeal of
respondent on the procedural technicality that the Appellant's Brief does not have page
references to the record in its Statement of Facts, Statement of the Case and Arguments
in the Appellant's Brief.39
We find no reason to reverse the ruling of the appellate court which has judiciously
explained why the appeal should not be dismissed on this ground, viz.:
IN VIEW WHEREOF, the assailed Decision and Resolution of the Court of Appeals in
CA-G.R. CV No. 49227 dated January 30, 2003 and July 31, 2003, respectively,
are AFFIRMED.
SO ORDERED.