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VILLANUEVA VS PNB

Facts:

April 1989 - Special Assets Management Department (SAMD) of the PNB issued an advertisement

for the sale thru bidding of certain PNB properties in Calumpang, GenSan City. The bidding was

subject to the ff. conditions:

a. The cash bids be submitted not later than 10am of April 27, 1989.

b. That said bids be accompanied by a 10% deposit in the managers or cashiers check.

c. That all acceptable bids be subject to approval by PNB authorities.

June 28, 1990 - Reynaldo Villanueva sent a letter to the Manager of PNB Gensan Branch offering

to purchase Lot Nos. 17 and 19 for P3, 677,000.00. The Manager of PNB GenSan forwarded the letter

to Ramon Guevarra, Vice President of SAMD.

July 6, 1990 - Guevarra informed Villanueva that only Lot No. 19 is available and that the askingprice therefore is P2,883,300.00. Guevarra further wrote: if our quoted price is acceptable to you,

please submit a revised offer to purchase. Sale shall be subject to our Board of Directors approval

and to other terms and conditions imposed by the Bank on sale of acquired assets.

July 11, 1990 - instead of submitting a revised offer, Villanueva merely inserted at the bottom of

Guevarras letter a marginal note which reads:

CONFORME:

Price of P2, 883,300.00 (down payment of P600,000.00 and the balance payable in 2 years of

quarterly amortization)

Villanueva paid P200,000.00 to PNB. On the dorsal portion of the O.R., he signed a typewritten

note stating: This is a deposit made to show the sincerity of my purchase offer with the

understanding that it shall be returned without interest if my offer is not favorably considered or be

forfeited if my offer is approved but I fail/refuse to push through the purchase.

July 24, 1990 - P380,000.00 was debited from Villanuevas Savings Account and credited to

SAMD.

Oct. 11, 1990 - Guevarra wrote Villanueva that, upon orders of the PNB Board of Directors to

conduct another appraisal and public bidding of Lot No. 19, SAMD is deferring negotiations with him

and returning his deposit of P580,000.00.

Villanueva filed a complaint for Specific Performance and damages against PNB.

Issue: Whether or not a perfected contract of sale existed between PNB and Villanueva.

Ruling: NO

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It cannot be said that the June 28 letter of petitioner was an effective acceptance of the April

1989 invitation to bid for by its express terms, said invitation lapsed April 27, 1989 (one of its

conditions). More than that, the April 1989 invitation was subject to the condition that all sealed bids

submitted and accepted be approved by respondents higher authorities. Thus the June 28 letter of

petitioner was an offer to buy independent of the invitation to bid.

Respondents reply to the June 28 offer with July 6 letter that only Lot No. 19 is available and that

the price therefore is now P2,883,300.00 was not an acceptance but a mere counter-offer. It

deviated from the original offer. More importantly, this July 6 counter offer imposed 2 conditions: 1.)

petitioner submit a revised offer to purchase based on the quoted price and 2.) that the sale of the

property be approved by the Board of Directors and subjected to other terms and conditions imposed

by the bank.

The July 11 conformity was not an acceptance of the July 6 counter offer but a further counter-

offer for, while, petitioner accepted the P2,883,300.00 price, he qualified his acceptance by

proposing 2-year payment term. The June 28 offer and July 6 letters were silent on the term of

payment. Up to that point, the term of payment was not on the negotiation table. Thus, when

petitioner suddenly introduced a term of payment, he interjected into the negotiations a new

substantial matter on which the parties had no prior discussion and over which they must yet agree.

Acceptance of petitioners payments did not amount to an implied acceptance of his last counter-

offer. SAMD was always careful to emphasize that whatever offer is made and entertained will be

subject to the approval of respondents higher authorities.