GR 146608; (October, 2003) (Digest)
G.R. No. 146608; October 23, 2003
SPOUSES CONSTANTE FIRME AND AZUCENA E. FIRME, petitioners, vs. BUKAL ENTERPRISES AND DEVELOPMENT CORPORATION, respondent.
FACTS
Petitioners Spouses Constante and Azucena Firme are the registered owners of a parcel of land in Quezon City. Respondent Bukal Enterprises, through its vice-president Renato de Castro, authorized broker Teodoro Aviles to negotiate for its purchase. Aviles presented the Spouses Firme with a draft deed of sale in February 1995, which they rejected due to objectionable conditions, including making the sellers liable for capital gains tax and squatter relocation.
During a second meeting, Aviles presented a revised March 1995 draft with the objectionable provisions allegedly deleted. Bukal Enterprises claimed the Spouses Firme accepted this draft, agreeing to a price of ₱4,000 per square meter. Relying on this, Bukal Enterprises secured a bank loan, relocated squatters from the property at its own expense, and made improvements. The Spouses Firme later refused to proceed with the sale, leading Bukal Enterprises to file a complaint for specific performance.
ISSUE
Whether a perfected contract of sale existed between the parties.
RULING
No. The Supreme Court affirmed the trial court and reversed the Court of Appeals, holding that no contract of sale was perfected due to the absence of a meeting of the minds on the essential elements of the contract. For a contract of sale to be perfected, the parties must agree on the object (the property) and the price. The evidence showed that while there were negotiations, the Spouses Firme never gave their consent to the final terms. The alleged acceptance of the second draft was not proven; the petitioners consistently denied it, and the respondent’s own witness, Aviles, admitted the sellers wanted any agreement in writing. No such signed document was ever produced.
The Court emphasized that the respondent’s preparatory acts—securing a loan, relocating squatters, and making improvements—were performed at its own risk and did not constitute proof of a perfected contract. These were merely preliminary negotiations and unilateral actions. The authority given to Aviles was merely to negotiate, not to conclude a binding contract. Consequently, there being no consent meeting of the minds, no enforceable contract of sale existed that could be the basis for an action for specific performance.