Heirs of Fausto C. Ignacio v. Home Bankers Savings

Summary

This Supreme Court case involves the foreclosure of mortgaged properties and a subsequent dispute over an alleged repurchase agreement. Fausto Ignacio mortgaged two Laguna properties to secure a P500,000 loan, which were later foreclosed when he defaulted. The bank offered repurchase terms through a March 1984 letter, but Ignacio modified the terms in handwritten notations, proposing a different price and payment schedule. The RTC found a perfected repurchase contract existed and ordered reconveyance, but the CA and Supreme Court disagreed. Applying Civil Code Article 1319 on contract formation, the Supreme Court held that Ignacio's qualified acceptance with modified terms constituted a counter-offer that was never properly accepted by authorized bank representatives. The Court emphasized that corporate actions require board authorization and that acceptance must be absolute to perfect a contract. The decision clarifies important principles of contract formation, particularly regarding qualified acceptance and corporate authority in contract negotiations.