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G.R. No. L-31018 June 29, 1973 by its mailing clerk, one Juanito D.

clerk, one Juanito D. Quiachon, the postmaster of Makati, Rizal, the records of action he has taken
at the Makati Post Office, a "Motion For the said post office failed to reveal that on thereon.
Extension of Time To File Printed Record on January 15, 1969 the date when their
LORENZO VELASCO AND SOCORRO J.
Appeal." The extension of time was sought on motion for extension of time to file the printed
VELASCO, petitioners, The foregoing desposition was based on the
the ground "of mechanical failures of the record on appeal was supposedly mailed by
vs. following findings of the Court of Appeals:
printing machines, and the voluminous printing the petitioners there was any letter
HONORABLE COURT OF APPEALS and
jobs now pending with the Vera Printing deposited there by the petitioners' counsel.
MAGDALENA ESTATE, INC., respondents.
Press. ..." The petitioners opposed the motion for An examination of the
reconsideration. They submitted to the Rollo of this case,
Napoleon G. Rama for petitioners. appellate court the registry receipts (numbered particularly the letter
On February 10, 1969, the petitioners filed
0215 and 0216), both stampled January 15, envelope on page 26
their printed record on appeal in the Court of
1969, which were issued by the receiving clerk thereof, reveals that on
Dominador L. Reyes for private respondent. Appeals. Thereafter, the petitioners received
of the registry section of the Makati Post Office January 15, 1969, plaintiffs
from the respondent a motion filed on February
covering the mails for the disputed motion for supposedly mailed via
8, 1969 praying for the dismissal of the appeal
extension of time to file their printed record on registered mail from the
on the ground that the petitioners had failed to
appeal and the affidavit of its mailing clerk Post Office of Makati,
file their printed record on appeal on time.
Juanito D. Quiachon, to prove that their motion Rizal their motion for
CASTRO, J.: Acting on the said motion to dismiss the
for extension was timely filed and served on extension of 30 days from
appeal, the Court of Appeals, on February 25,
the Court of Appeals and the respondent, that date to file their
1969, issued the following resolution:
This is a petition respectively. After several other pleadings and printed Record on Appeal,
for certiorari and mandamus filed by Lorenzo manifestations were filed by the parties relative under registered letter No.
Velasco and Socorro J. Velasco (hereinafter Upon consideration of the to the issue raised by the respondent's above- 0216. However, in an
referred to as the petitioners) against the motion of counsel for mentioned motion for reconsideration, the official certification, the
resolution of the Court of Appeals dated June defendant-appellee Court of Appeals promulgated on June 28, Postmaster of Makati
28, 1969 in CA-G.R. 42376, which ordered the praying on the grounds 1969, its questioned resolution, the dispositive states that the records of
dismissal of the appeal interposed by the therein stated that the portion of which reads as follows: his office disclose: (a) that
petitioners from a decision of the Court of First appeal be dismissed in there were no registered
Instance of Quezon City on the ground that accordance with Rules of letters Nos. 0215 and
WHEREFORE, the motion
they had failed seasonably to file their printed Court, and of the 0216 from the Salonga,
for reconsideration filed on
record on appeal. opposition thereto filed by Ordoez, Yap, Sicat &
March 11, 1969 is granted
counsel for plaintiff- Associates addressed to
and appeal interposed by
appellants, the Court Atty. Abraham F.
Under date of November 3, 1968, the Court of plaintiff-appellants from
RESOLVED to DENY the Sarmiento, 202
First Instance of Quezon City, after hearing on the judgment of the court
said motion to dismiss. Magdalena Building,
the merits, rendered a decision in civil case below is hereby dismissed
Espaa Ext., Quezon City,
7761, dismissing the complaint filed by the for their failure to file their
and to the Court of
petitioners against the Magdalena Estate, Inc. Upon consideration of the printed Record on Appeal
Appeals, Manila,
(hereinafter referred to as the respondent) for registry-mailed motion of within the period
respectively, that were
the purpose of compelling specific counsel for plaintiffs authorized by this Court.
posted in the Post Office
performance by the respondent of an alleged appellants praying on the Atty. Patrocino R. Corpuz
of Makati, Rizal, on
deed of sale of a parcel of residential land in grounds therein stated for [counsel of the petitioner]
January 15, 1969; (b) that
favor of the petitioners. The basis for the an extension of 30 days is required to show cause
there is a registered letter
dismissal of the complaint was that the alleged from January 15, 1969 within ten (10) days from
numbered 215 but that the
purchase and sale agreement "was not within which to file the notice why he should not
same was posted on
perfected". printed record on appeal, be suspended from the
January 3, 1969 by
the Court RESOLVED to practice of his necessary
Enriqueta Amada of 7
GRANT the said motion investigation against
On November 18, 1968, after the perfection of Angel, Pasillo F-2,
and the printed record on Juanito D. Quiachon of the
their appeal to the Court of Appeals, the Cartimar, Pasay City, as
appeal which has already Salonga, Ordoez, Yap,
petitioners received a notice from the said sender, and Giral Amasan
been filed is ADMITTED. Sicat & Associates Law
court requiring them to file their printed record of Barrio Cabuniga-an,
Office, Suite 319 337
on appeal within sixty (60) days from receipt of Sto. Nio, Samar, as
Rufino Building, Ayala
said notice. This 60-day term was to expire on On March 11, 1969, the respondent prayed for addressee; and that there
Avenue, Makati Post
January 17, 1969. a reconsideration of the above-mentioned is also a registered letter
Office, to file the
resolution, averring that the Court of Appeals numbered 216; but that
appropriate criminal action
had been misled bythe petitioners' "deceitful the same was likewise
Allegedly under date of January 15, 1969, the against them as may be
allegation that they filed the printed record on posted on January 3, 1969
petitioners allegedly sent to the Court of warranted in the premises,
appeal within the reglementary period," with E.B.A. Construction of
Appeals and to counsel for the respondent, by and to report to this Court
because according to a certification issued by 1049 Belbar Building,
registered mail allegedly deposited personally within thirty (30) days the
Metropolitan, Pasong mailed on that date but his request; we are very much inclined
Tamo, Makati, as sender, evidently on a date much whereupon, I got two to give greater weight and
and Pres. R. Nakaya of later than January 15, (2) registry receipts credit to the former.
the United Pacific Trading 1969. This is further from an old registry Besides, plaintiffs have not
Co., Ltd., 79, 6 Chamo, confirmed by the affidavit receipt booklet which refuted the facts disclosed
Nakatu, Yokohari, Japan, of Flaviano Malindog, a is no longer being in the two (2) official
as addressee; (c) that on letter carrier of the Makati used and I numbered certifications above
January 15, 1969, the Post Office, which them 0215 for the mentioned by the
registered letters posted at defendant attached as letter addressed to Postmakers of Makati,
the Makati Post Office Annex 1 to its Atty. Abraham Rizal. These two (2)
were numbered supplemental reply to Sarmiento in Quezon certifications alone, even
consecutively from 1001- plaintiffs' opposition to the City and 0216 for the without to move this Court
2225, inclusive, and none motion for reconsideration. letter addressed to to reconsider its resolution
of these letters was In his said affidavit, the Court of Appeals, of February 25, 1969 and
addressed to Atty. Malindog swore among Manila; that I placed order the dismissal of this
Abraham F. Sarmiento of others: the same numbering appeal.
to the Court of Appeals; on the respective
(d) that in Registry Bill envelopes containing
'That on February 7, On September 5, 1969, after the rendition of
Book No. 30 for Quezon the letters; and that I
1969, between 12:00 the foregoing resolution, the Court of Appeals
City as well as that Manila, also post maker them
o'clock noon and 1:00 promulgated another, denying the motion for
corresponding to February January 15, 1969;
o'clock in the reconsideration of the petitioner, but, at the
7, 1969, there are entries
afternoon, JUANITO same time, accepting as satisfactory the
covering registered letters
D. QUIACHON 'That to the best of explanation of Atty. Patrocino R. Corpuz why
Nos. 0215 and 0216 for
approached me at my recollection I he should not be suspended from the practice
dispatch to Quezon City
the Makati Post wrote the correct date of the legal profession.
and Manila, respectively;
Office and talked to of posting, February
however, such registry
me about certain 7, 1969, on the back
book for February 7, 1969 On September 20, 1969, the First Assistant
letters which his of one or both of the
shows no letters with such Fiscal of Rizal notified the Court of Appeals
employer had asked registry receipts
numbers posted on the that he had found a prima facie case against
him to mail and that I above mentioned;
said date. Flaviano C. Malindog and would file the
should help him do
corresponding information for falsification of
something about the
'That the correct date public documents against him. The said fiscal,
The Acting Postmaster of matter; but I asked
of posting, February however, dismissed the complaint against
the Commercial Center him what they were
7, 1969 also appears Quiachon for lack of sufficient evidence. The
Post Office of Makati, all about, and he told
in the Registry Bill information subsequently filed against
Rizal, further certifies that me that they were
Books for Quezon Malindog by the first Assistance Fiscal of Rizal
"Registry Receipts Nos. letters for the Court of
City and Manila reads as follow:
0215 and 0216 addressed Appeals and for Atty.
where I entered the
to Atty. Abraham F. Abraham Sarmiento
subject registered
Sarmiento of the and that his purpose That on or about the 7th
letters;
Magdalena Estate, was to show that they day of February 1969, in
Quezon City and the were posted on the municipality of Makati,
Honorable Court of January 15, 1969; Of course, plaintiff's province of Rizal, and a
Appeals, respectively, that I inquired further, counsel denies the sworn place within the jurisdiction
does not appear in our and he said that the statement of Malindog and of this Honorable Court,
Registry Record Book letters were not so even presented the the above-named
which was allegedly important and that his counter-affidavit of one of accused, conspiring and
posted at this office on only concern was to his clerk by the name of confederating together and
January 15, 1969." have them post Juanito D. Quiachon. But mutually helping and
maker January 15, between Malindog, whose aiding with John Doe,
1969; sworn statement is whose true identity and
From the foregoing, it is
manifestly a declaration present whereabout is still
immediately apparent that
against interest since he unknown, did then and
the motion for extension of 'That believing the
can be criminally there willfully, unlawfully
time to file their Record on word of JUANITO D.
prosecuted for falsification and feloniously falsify two
Appeal supposedly mailed QUIACHON that the
on the basis thereof, and registry receipts which are
by the plaintiffs on January letters were not really
that of Quiachon, whose public documents by
15, 1969 was not really important I agreed to
statement is self-serving, reason of the fact that said
registry receipts are Western Equipment, 62 Phil. 579, and Caltex cited by the petitioners, are not in point docketing of the appeal,
printed in accordance with Phil., Inc. v. Katipunan Labor Union, 52 O.G. because the specific adjective issue resolved and within sixty (60) days
the standard forms 6209), and, instead, chose to rely upon the in those cases was whether or not the date of from such notice to submit
prescribed by the Bureau affidavit of the mail carrier Malindog, which mailing a pleading is to be considered as the to the court forty (40)
of Posts, committed as affidavit was prepared by counsel for the date of its filing. The issue in the case at bar is printed copies of the
follows: the above-named respondent at the affiant himself so declared at whether or not the motion of the petitioners for record on appeal, together
accused John Doe, on the the preliminary investigation at the Fiscal's extension of time to file the printed record on with proof of service of
date above-mentioned office which absolved the petitioners' counsel appeal was, in point of fact, mailed (and, fifteen (15) printed copies
approached and induced mailing clerk Quiachon from any criminal therefore, filed) on January 15, 1969. thereof upon the appelee.
the accused Malindog, a liability; (d) section 1, Rule 50 of the Rules of
letter-carrier at the Makati Court, which enumerates the grounds upon
In resolving this issue in favor of the As the petitioners failed to comply with the
Post Office, to postmark which the Court of Appeals may dismiss an
respondent, this Court finds, after a careful above-mentioned duty which the Rules of
on Abraham Sarmiento in appeal, does not include as a ground the
study and appraisal of the pleadings, Court enjoins, and considering that, as found
Quezon City, and the other failure to file a printed record on appeal; (e) the
admissions and denials respectively adduced by the Court of Appeals, there was a deliberate
to the Court of Appeals, said section does not state either that the
and made by the parties, that the Court of effort on their part to mislead the said Court in
Manila, and the accused mismailing of a motion to extend the time to file
Appeals did not gravely abuse its discretion grating them an extension of time within which
Malindog, acceding to the the printed record on appeal, assuming this to
and did not act without or in excess of its to file their printed record on appeal, it stands
inducement of, and in be the case, may be a basis for the dismissal
jurisdiction. We share the view of the appellate to reason that the appellate court cannot be
conspiracy with, his co- of the appeal; (f) the Court of Appeals has no
court that the certifications issued by the two said to have abused its discretion or to have
accused John Doe, did jurisdiction to revoke the extention of time to
postmasters of Makati, Rizal and the sworn acted without or in excess of its jurisdiction in
then and there willfully and file the printed record on appeal it had granted
declaration of the mail carrier Malindog ordering the dismissal of their appeal.
feloniously falsify said to the petitioners based on a ground not
describing how the said registry receipts came
registry receipts of the specified in section 1, Rule 50 of the Rules of
to be issued, are worthy of belief. It will be
Makati Post Office on Court; and (g) the objection to an appeal may Our jurisprudence is replete with cases in
observed that the said certifications explain
January 15, 1969, thereby be waived as when the appellee has allowed which this Court dismissed an appeal on
clearly and in detail how it was improbable that
making it appear that the the record on appeal to be printed and grounds not mentioned specifically in Section
the petitioners' counsel in the ordinary course
said sealed envelopes approved (citing Moran, Vol. II, p. 519). 1, Rule 50 of the Rules of Court. (See, for
of official business, while Malindog's sworn
addressed to Atty. example, De la Cruz vs. Blanco, 73 Phil. 596
statement, which constitutes a very grave
Sarmiento and the Court (1942); Government of the Philippines vs.
Some of the objections raised by the admission against his own interest, provides
of Appeals were actually Court of Appeals, 108 Phil. 86 (1960); Ferinion
petitioners to the questioned resolution of the ample basis for a finding that where official
posted, and causing it to vs. Sta. Romana, L-25521, February 28, 1966,
Court of Appeals are obviously matters duty was not performed it was at the behest of
appear that the 16 SCRA 370, 375).
involving the correct construction of our rules a person interested in the petitioners' side of
Postmaster of Makati
of procedure and, consequently, are proper the action below. That at the preliminary
participated therein by
subjects of an appeal by way of certiorari investigation at the Fiscal's office, Malindog It will likewise be noted that inasmuch as the
posting said mail matters
under Rule 45 of the Rules of Court, rather failed to identify Quiachon as the person who petitioners' motion for extension of the period
on January 15, 1969,
than a special civil action for certiorari under induced him to issue falsified receipts, contrary to file the printed record on appeal was belated
when in truth and in fact
Rule 65. The petitioners, however, have to what he declared in his affidavit, is of no filed, then, it is as though the same were non-
he did not so participate.
correctly appreciated the nature of its moment since the findings of the inquest fiscal existent, since as this Court has already stated
objections and have asked this Court to treat as reflected in the information for falsification in Baquiran vs. Court of Appeals, 2 "The motion for extension of the

The petitioner contend that in promulgating its the instant petition as an appeal by way filed against Malindog indicate that someone
period for filing pleadings and papers in court must be made before the expiration of the period to be extended." The
soundness of this dictum in matters of procedure is self-evident. For, were the doctrine otherwise, the uncertainties that would
follow when litigants are left to determine and redetermine for themselves whether to seek further redress in court forthwith or

questioned resolution, the Court of Appeals of certiorari under Rule 45 "in the event ... that did induce Malindog to make and issue false take their own sweet time will result in litigations becoming more unreable than the very grievances they are intended to
redness.

acted without or in excess of jurisdiction, or this Honorable Supreme Court should deem registry receipts to the counsel for the
with such whimsical and grave abuse of that an appeal is an adequate remedy ..." The petitioners.
The argument raised by the petitioner that
discretion as to amount to lack of jurisdiction, nature of the case at bar permits, in our view, a
the objection to an appeal maybe waived, as
because (a) it declared that the motion for disquisition of both types of assignments.
This Court held in Bello vs. Fernando 1 when the appellee allows the record on appeal
extension of time to file the printed record on
that the right to appeal

to be printed and approved is likewise not


is nota natural right nor a part of due process; it is merely a statutory privilege, and may be exercised only in the manner
provided by law. In this connection, the Rule of Court expressly makes it the duty of an appellant to file a printed record on
appeal was not mailed on January 15, 1969, appeal with the Court of Appeals within sixty (60) record on appeal approved by the trial court has already been received by

We do not share the view of the petitioners that the said court. Thus, section 5 of Rule 46 states:
meritorious considering that the respondent did
when, in fact, it was mailed on the record on
the Court of Appeals acted without or in excess file a motion in the Court of Appeals on
appeal was filed only on February 10, 1969,
of jurisdiction or gravely abused its discretion Sec. 5. Duty of appellant February 8, 1969 praying for the dismissal of
beyond the time authorized by the appellate
in promulgating the questioned resolution. upon receipt of notice. the below of the petitioners had not yet filed
court, when the truth is that the said date of
It shall be the duty of the their record on appeal and, therefore, must be
filing was within the 30-day extension granted
appellant within fifteen considered to have abandoned their appeal.
by it; (c) the adverse conclusion of the While it is true that stamped on the registry
(15) days from the date of
appellate court are not supported by the receipts 0215 and 0215 as well as on the
the notice referred to in In further assailing the questioned resolution of
records of the case, because the said court envelopes covering the mails in question is the
the preceding section, to the Court of Appeals, the petitioners also point
ignored the affidavit of the mailing clerk of the date "January 15, 1969," this, by itself, does
pay the clerk of the Court out that on the merits the equities of the instant
petitioners' counsel, the registry receipts and not establish an unrebuttable presumption of
of Appeals the fee for the case are in their favor. A reading of the record,
postmarked envelopes (citing Henning v. the fact of date of mailing. Henning and Caltex,
however, persuades us that the judgment a the defendant refused to because the amount was payment was issued in his
quo is substantially correct and morally just. accept and that eventually short of the alleged favor. The plaintiff also
it likewise refused to P20,000.00 the same was depends on Exhibit A to
execute a formal deed of accepted merely as prove that there was a
The appealed decision of the court a quo
sale obviously agreed deposited and upon perfected follows: "Earnest
narrates both the alleged and proven facts of
upon. The plaintiff request of Socorro money for the purchase of
the dispute between the petitioners and the
demands P25,000.00 Velasco the receipt was Lot 15, Block 7, Psd-6129,
respondent, as follows:
exemplary damages, made in the name of her Area 2,059 square meters
P2,000.00 actual damages brother-in-law the plaintiff including improvements
This is a suit for specific and P7,000.00 attorney's herein; that Socorro thereon P10,000.00." At
performance filed by fees. Velasco failed to complete the bottom of Exhibit A the
Lorenzo Velasco against the down payment of following appears: "Agreed
the Magdalena Estate, Inc. P30,000.00 and neither price: P100,000.00,
The defendant, in its
on the allegation that on has she paid any P30,000.00 down
Answer, denies that it has
November 29, 1962 the installments on the payment, bal. in 10 years."
had any direct dealings,
plaintiff and the defendant balance of P70,000.00 up
much less, contractual
had entered into a contract to the present time; that it
relations with the plaintiff To prove that the
of sale (Annex A of the was only on January 8,
regarding the property in Magdalena Estate, Inc.
complaint) by virtue of 1964 that Socorro Velasco
question, and contends had been dealing all along
which the defendant tendered payment of
that the alleged contract with him and not with his
offered to sell the plaintiff P20,000.00, which offer
described in the document sister-in-law and that the
and the plaintiff in turn the defendant refused to
attached to the complaint Magdalena Estate, Inc.
agreed to buy a parcel of accept because it had
as Annex A is entirely knew very well that he was
land with an area of 2,059 considered the offer to sell
unenforceable under the the person interested in
square meters more rescinded on account of
Statute of Frauds; that the the lot in question and not
particularly described as her failure to complete the
truth of the matter is that a his sister-in-law, the
Lot 15, Block 7, Psd-6129, down payment on or
portion of the property in plaintiff offers in evidence
located at No. 39 corner before December 31,
question was being leased five checks all drawn by
6th Street and Pacific 1962.
by a certain Socorro him in favor of Magdalena
Avenue, New Manila, this
Velasco who, on Estate, Inc. for payment of
City, for the total purchase
November 29, 1962, went The lone witness for the the lease of the
price of P100,000.00.
to the office of the plaintiff is Lorenzo property. ....
defendant indicated her Velasco, who exhibits the
It is alleged by the plaintiff desire to purchase the lot; receipt, Exhibits A, issued
There does not seem to be
that the agreement was that the defendant in his favor by the
any dispute regarding the
that the plaintiff was to indicated its willingness to Magdalena Estate, Inc., in
fact that the Velasco family
give a down payment of sell the property to her at the sum of P10,000.00
was leasing this property
P10,000.00 to be followed the price of P100,000.00 dated November 29, 1962.
from the Magdalena
by P20,000.00 and the under the condition that a He also identifies a letter
Estate, Inc. since
balance of P70,000.00 down payment of (Exh. B)of the Magdalena
December 29, 1961; that
would be paid in P30,000.00 be made, Estate, Inc. addressed to
the Velasco family
installments, the equal P20,000.00 of which was him and his reply thereto.
sometime in 1962 offered
monthly amortization of to be paid on November He testifies that Socorro
to purchase the lot as a
which was to be 31, 1962, and that the Velasco is his sister-in-law
result of which Lorenzo
determined as soon as the balance of P70,000.00 and that he had requested
Velasco thru Socorro
P30,000.00 down payment including interest a 9% per her to make the necessary
Velasco made the
had been completed. It is annum was to be paid on contacts with defendant
P10,000.00 deposit or, in
further alleged that the installments for a period of referring to the purchase
the language of the
plaintiff paid down ten years at the rate of of the property in question.
defendant 'earnest money
payment of P10,000.00 on P5,381.32 on June 30 and Because he does not
or down payment' as
November 29, 1962 as per December of every year understand English well,
evidenced by Exhibit A.
receipt No. 207848 (Exh. until the same shall have he had authorized her to
The only matter that
"A")and that when on been fully paid; that on negotiate with the
remains to be decided is
January 8, 1964 he November 29, 1962 defendant in her whenever
whether the talks between
tendered to the defendant Socorro Velasco offered to she went to the office of
the Magdalena Estate, Inc.
the payment of the pay P10,000.00 as initial the defendant, and as a
and Lorenzo Velasco
additional P20,000.00 to payment instead of the matter of fact, the receipt
either directly or thru his
complete the P30,000.00 agreed P20,000.00 but for the P10,000.00 down
2
sister-in-law Socorro It is not difficult to glean from the aforequoted satisfying itself that there is "a rational basis for the result by the trial court"
appeal.
in the judgment sought to be reviewed by the
The appellate court admitted the printed record
Velasco ever ripened into averments that the petitioners themselves on appeal as per its original resolution of
a consummated sale. It is admit that they and the respondent still had to February 25, 1969 denying respondent's
the position of the meet and agree on how and when the down- In the case at bar, however, I believe that the motion to dismiss the appeal, wherein it
defendant (1) that the sale payment and the installment payments were to merits and equities invoked by petitioners- granted the registry-mailed motion of
was never consummated be paid. Such being the situation, it cannot, appellants in support of their action for specific petitioners' counsel for a 30-day extension
and (2) that the contract is therefore, be said that a definite and firm sales performance of their agreement with from January 15, 1969 within which to submit
unenforceable under the agreement between the parties had been respondent for the purchase of the parcel of the same. Counsel's ground for such extension
Statute of Frauds. perfected over the lot in question. Indeed, this land described in the complaint for the was from ground for such extension machines
Court has already ruled before that a definite "agreement price (of): P10,000.00, P30,000.00 and voluminous printing jobs of the Vera
agreement on the manner of payment of the down payment, bal. in 10 years" (which is a Pinting Press, which they had contracted to do
The court a quo agreed with the respondent's matter of mathematical computation), with
purchase price is an essential element in the the printing job.
(defendant therein) contention that no contract petitioners having admittedly made a down
formation of a binding and unforceable contract
of sale was perfected because the minds of the payment of P10,000.00 as "earnest money"
of sale. 3 The fact, therefore, that the petitioners delivered to the respondent the sum of P10,000 as part of the
parties did not meet "in regard to the manner of down-payment that they had to pay cannot be considered as sufficient proof of the perfection of any purchase and sale
agreement between the parties herein under article 1482 of the new Civil Code, as the petitioners themselves admit that some
which was accepted by respondent and Upon complaint of respondent, however, that
payment." The court a quo appraisal of this essential matter the terms of payment still had to be mutually covenanted.
continuing to pay respondent lease rentals for petitioners' counsel, through its mailing clerk
aspect of the action below is correct. The the time taken to complete the full down Juanito D. Quiachon, had deceived the
material averments contained in the petitioners' ACCORDINGLY, the instant petitioner is payment pending formalization of their appellate court into believing that their motion
complaint themselves disclose a lack of hereby denied. No pronouncement as to costs. contract, deserve a full-dress consideration of for extension had been registry mailed January
complete "agreement in regard to the manner the appeal and legal principles involved with a 15, 1969 when actually it was so mailed late
of payment" of the lot in question. The decision on the merits of the case itself. only on February 7, 1969, as borne out by the
complaint states pertinently: Makalintal, Makasiar and Esguerra, JJ., affidavit of Flaviano Malindog, a said post
concur. office which the appellate court believed as
Since two other members of the against Quiachon's counter-affidavit to the
4. That plaintiff and Court, viz, Justices Barredo and Antonio, have
Fernando, J., took no part. contrary the said court as per its resolution
defendant further agreed reserved their opinions on the merits of the of June 28, 1969 granted respondent's motion
that the total down appeals, as stated in their respective for reconsideration and ordered the dismissal
payment shall by Barredo, J.: The petitioners having clearly and concurrences, I further consider this to be a of petitioners' appeal "for their failure to file
P30,000.00, including the without sufficient justification failed to case where the paramount considerations of their printed record on appeal within the period
P10,000.00 partial prosecute their appeal within the period substantial justice must take precedence over authorized by this court."
payment mentioned in allowed by the rules, I vote to deny the petition, the lateness (by 24 days) in the submittal of
paragraph 3 hereof, and and consistently with my view already the printed record on appeal which in no
that upon completion of expressed on previous occasions, any way can be claimed to have prejudiced the In the same resolution, Atty. Patrocino R.
the said down payment of discussion of the merits of the appeal is substantial rights of respondent or delayed the Corpus, as petitioners' counsel, was required
P30,000.00, the balance unwarranted, particularly, in instances like the cause of the administration of justice and to show cause "why he should not be
of P70,000.00 shall be present, wherein the same does not appear to that accordingly, such a technical trangression suspended from the practice of his profession
said by the plaintiff to the me, upon cursory examination to be beyond on counsel's part should not result in the for deceit, falsehood and violation of his sworn
defendant in 10 years from doubt.. drastic forfeiture of petitioners' right of appeal duty to the Court," but subsequently, the
November 29, 1962; and of securing a possible of the adverse appellate court as per its resolution of
verdict of the lower court. September 5, 1969 accepted as satisfactory
Separate Opinions said counsel's explanation and disclaimer of
5. That the time within the
any wrongdoing.
full down payment of the As stated by Chief Justice Concepcion for the
P30,000.00 was to be Court in Concepcion vs. Payatas Estate
completed was not Acting upon the appellate court's directive to
Improvements Co., Inc., 3 "After all, pleadings, as well as remedial laws, should by

specified by the parties but TEEHANKEE, J., dissenting: investigate the incident for the filing of
construed literally, in order that litigants may have ample opportunity to prove their respective claims, and that a possible
denial of substantial justice, due to legal technicalities, may be avoided." This is but the very mandate of the Rules of Court:
that they be "liberally construed in order to promote their object and to assist the determination of every action and
the defendant was duly 4 5
appropriate criminal action against Quiachon
proceeding" and that "All pleadings shall be liberally construed so as to do substantial justice."

compensated during the and Malindog, the Rizal provincial fiscal found
said time prior to I dissent from the main opinion penned by Mr. a prima facie case against Malindog (the letter-
Justice Castro affirming the appellate court's Here, the 60-day period for petitioners
completion of the down carrier) and charged him in the corresponding
payment of P30,000.00 by dismissal of petitioner' pending appeal before it appellants "to submit .... forty information for falsification of public documents
because of late submittal of the printed record (40) printed copies of the record on appeal"
way of lease rentals on the but dismissed the complaint against Quiachon
house existing thereon on appeal (by 24 days), on appeal when the from notice on November 18, 1968 of receipt of (the mailing clerk of petitioners' counsel) for
appeal was indisputably timely perfected the original typewritten record on appeal" from
which was earlier leased lack of sufficient evidence since Malindog
does not call for the imposition of the capital notice on November 18, 1968 of receipt of
by defendant to the could not identify Quiachon ass the person
penalty of dismissal of the appeal. the original typewritten record on appeal in the
plaintiff's sister-in-law, who induced him to issue falsified registry
appellate court 6
Socorro J. Velasco, and receipts.
was to expire on January 17, 1969. Petitioners submitted their printed record on
appeal on the 24th day after such expiry date, viz, on viz, on February 10, 1969.

which were duly paid to As in my separate opinion in Sison vs.


the defendant by checks Gatchalian 1 promulgated just a few weeks earlier, I must note with gratification the special pains taken in

drawn by plaintiff. the main opinion to discuss nevertheless the substance and merit of the aborted appeal and to record the Court's policy in
such cases (of dismissal of appeals timely perfected for failure to comply with certain requirements of the Rules) of invariably
I concur with the main opinion in its ruling the printed copies of the record on appeal, The specific rule (Rule 46, section 5) The appellate court thus disregarded the
upholding the appellate court's factual findings, which this Court has held in Ever Ice Drop does not provided for dismissal of the appeal harmless error rule as provided in Rule 51,
which I don't consider to be reviewable by this Factory vs. Court of Appeals 8 for failure to submit theprinted record on
as "not indispensable to the jurisdiction of the section 5 that "no error or defect in any ruling
appellate courts, the sole purpose of such printing being convenience in the handling, keeping and reading of the record on
Court, grounded as they are on substantial appeal." appeal whereas section 7 of the rule prohibits or order ... [such as its first order admitting the
evidence. Hence, for purposes of this review, "alternations, omissions or additions to the printed record on appeal in the belief that
such factual findings must be postulated, to In the cited case of Ever, the Court applied the printed record" and does provide that "a petitioners' motion for extension had been
wit, that the printed record on appeal was salutary rule of overlooking procedural violation of this prohibition shall be a ground for timely filed] .... is ground.... for setting aside,
submitted 24 days late on February 10, 1969, deficiencies in the interest of substantial justice dismissal of the appeal." modifying or otherwise disturbing a judgment
that there was a deliberate effort on the part ofand set aside the appellate court's dismissal of or order, unless refusal to take such action
an unknown person (John Doe in the in the appeal (for non-inclusion in the joint record Even Rule 50, section 1 which provides that appears to the court inconsistent
information) not petitioners nor their on appeal of the appellants' notice of appeal with substantial justice. The court at every
the appellate court may dismissal pending
counsel nor Quiachon, the mailing clerk to and date of receipt of the appealed decision on appeal for certain specific infractions of the stage of the proceeding
induce Malindog to make and issue false appeal"), ruling that "Inasmuch as Rule 41 is in rules, e.g. failure to pay the docketing fee or to must disregard any error or defect which
registry receipts that showed that petitioners' that portion of the rules pertaining to the stage file appellant's brief on time or "unauthorized does notaffect the substantial rights of the
counsel's motion for a 30-day extension to of the appeal process taking place in the trial parties;" 10
alterations, omissions or additions in the
submit the printed record on appeal was filed court, it is but logical that the frame of printed record on appeal" (paragraph(e)) or
timely on January 15, 1959 rather late(by 21 reference, when the completeness of a record want of specific assignment of errors or of Since the enactment as of September 9,
days) on February 7, 1969. on appeal, as therein provided, is in question, page references to the record in appellant's 1968 of Republic Act 5440 providing that in
must be the contents of said record as filed brief, merely confers a power, not a duty, upon most cases as specified therein, 11 review by this Court of final

The general issue of law that confronts us then with said court, and not necessarily those of
judgments and decrees of inferior courts shall be by petition for writ of certiorari and no longer by record on appeal some
the mandatory, upon the said court to exercise parties-appellants aggrieved by adverse to submit their appeals to this Court by means of records on appeal as approved by
the lower court, contrary to the act's mandate that they should by presented by means of "petition .... filed and served in the

is this: is the 60-day period for submitting the the printed one filed with the appellant court." its power to dismiss an appeal and dismissal form required for petitions for review by certiorari of decisions of the Court of Appeals." 12 Strictly speaking, such an error
although abetted by the trial court's act of approving a record on appeal that is not required by the Act, could be considered
fatal to the appeal. But following paramount considerations of substantial justice in preference to transgressions of form, as
printed record on appeal mandatory and has been ordered sparingly and only in stressed in Sonora vs. Tongoy,
13
"the Court has been liberal in the implementation of Republic Act 5440 and instead of
dismissing appeals coming up to Us by record on appeal, We have allowed the appellants to file the corresponding petition(for
jurisdictional or is this merely a procedural As applied to the case at bar, therefore, I vote extreme cases warranting dismissal; review by certiorari) provided the appeal by record on appeal had been duly perfected within the reglementary period.
14

period on appeal (owing to a valid reason of for the granting of the petition and to demand
mechanical failures and pressure of work of the appeal to the appellate court for disposition Withal, this Court may dismiss an appeal
the printer) regardless of whether a motion for and decision of the merits, for the following This is to stress that even though the
even on grounds not specifically mentioned in provision of Republic Act 5440 that such
extension of time to submit the printed record considerations, in addition to those stated Rule 50, section 1, as where the wanton or appeals shall be only on petitions for review by
on appeal was in fact filed or filed out of time above and in my separate opinion in inexcusable conduct of appellant in not petitions by certiorari and no longer as a matter
after expiration of the original 60-day period, Sison, supra: complying with the rules warrants such of right by record on appeal is of a mandatory
may in the appellate court's sound discretion in
dismissal. 9 But the Rules certainly do not character, this Court has nevertheless adopted
the interest of justice and equity be
Since the use of the false registry receipts authorize dismissal of a duly perfected appeal a liberal construction and chosen to apply the
nevertheless allowed and appeal heard and
appears in no way to be the making of within the original 60-day period, such failure principle of substantial justice in favor of one
decided on its merits?
petitioners themselves, who as clients may be not being wanton or inexcusable. Yet such whose appeal was actually perfected on time
presumed to be entirely unaware of the failure to file the printed record on appeal rather than to sacrifice substance to form. In
The 60-day period for submitting the printed procedural requirements and of their counsel's within the 60-day period (which was filed late the language of Sonora, vis a vis the case at
record on appeal is obviously imposed as a action or inaction in complying therewith, the by 24 days and had already been admitted) bar, "it is less than fair for respondents to
procedural rule, under Rule 46, section 5, like imposition of the capital of dismissal of was the only ground stated by the appellate attempt to cut off (petitioners') right to appeal
many other time limitations imposed by the petitioners' appeal is unduly severe; court for its peremptory dismissal of the by invoking the literal meaning of the language
Rule of Court as indispensable to the appeal; of the rules, disregarding their wise and
prevention of needless dalays and necessary practical construction already laid down by the
to the orderly and speedy discharge of judicial Such a harsh penalty appears to be in Supreme Court." 15
derogation of the interest and purpose of the Thus, the appellate court did not sustain
business. 7
Rules of Court the proper and just respondent's contention that petitioners
determination of a litigation. No substantial through counsel had deceived it through In sensu contrario, applying the same
But this 60-day period for submitting right of respondent has been prejudiced by the knowing use of the false registry receipts, principles of substantial justice the Court has in
the printed record on appeal is to be late submittal of the late submittal of the since it exonerated counsel of any complicity. many cases seeking mandamus or
distinguished from a court of first instance printed record, whereas petitioners' appeal One gets the impression that the unnamed reinstatement of disallowed appeals (although
judgment under Rule 41, section 3, where would be forfeited through no fault or person had perhaps induced Malindog to issue timely made) looked at the "substantive merits"
failure to file the necessary notice, bond and negligence on their part; While clients are the false receipts to cover up some neglect or of the proposed appeal and where "there is
record on appeal within the said 30-day period, generally bound by the actions or mistakes of fault on Quiachon's part in not having timely hardly any prospect of its being ultimately
if not duly extended, is fatal and calls for their counsels, here no fault or wrongdoing has mailed counsel's extension motion, but neither sucessful," denied mandamus, ruling as
dismissal of the unperfected appeal under Rule been attributed to either petitioners or their the appellate court nor the fiscal in Espiritu vs. CFI of Cavite 16 that" this Court has already ruled on several

41, section 13. counsel. Their counsel's late submittal of the made any such Quiachon was responsible for occasions, since as early as De la Cruz vs. Blanco, 73 Phil. 596 that mandamus to compel approval and certification of an
appeal, even if otherwise well grounded, procedurally speaking, has to be appeal itself, and 'it would serve no useful purpose
17

brief and of the corresponding motions for the deception, it does not seem fair to penalize to reinstate' the same." Lucas vs. Mariano was to the same effect with the Court sustaining therein petitioner's submittal
"that from the point of view of the time of the taking of the appeal, petitioners, We are sufficiently convinced that their claim of
title has no chance of being sustained even if other and further proceedings were to be held in the court below;" and

extension (by less than a month's time) is not petitioners with dismissal of their appeal;
Here, the appeal had been long and timely
duly perfected by petitioners. What is merely rank failure to comply with the rule's
requirements; Finally, adherence to a liberal construction
involved here is late filing (by 24 days) of of the procedural rules in order to attain their
objective of substantial justice and of avoiding payment pending formalization of their for extension had been registry mailed January The general issue of law that confronts us then
possible denials of substantial justice due to contract, deserve a full-dress consideration of 15, 1969 when actually it was so mailed late is this: is the 60-day period for submitting the
procedural technicalities does not mean non- the appeal and legal principles involved with a only on February 7, 1969, as borne out by the printed record on appeal mandatory and
enforcement of the Rules of Court which are decision on the merits of the case itself. affidavit of Flaviano Malindog, a said post jurisdictional or is this merely a procedural
universally recognized to be necessary to the office which the appellate court believed as period on appeal (owing to a valid reason of
orderly and speedy discharge of judicial against Quiachon's counter-affidavit to the mechanical failures and pressure of work of the
Since two other members of the
business with the least delay. Compliance with contrary the said court as per its resolution printer) regardless of whether a motion for
Court, viz, Justices Barredo and Antonio, have
the rules, which are not of mandatory character of June 28, 1969 granted respondent's motion extension of time to submit the printed record
reserved their opinions on the merits of the
(such as the period for perfecting appeals, for reconsideration and ordered the dismissal on appeal was in fact filed or filed out of time
appeals, as stated in their respective
failure to observe which results in the of petitioners' appeal "for their failure to file after expiration of the original 60-day period,
concurrences, I further consider this to be a
automatic penalty of loss of the right to appeal) their printed record on appeal within the period may in the appellate court's sound discretion in
case where the paramount considerations of
but of directory character to provide time tables authorized by this court." the interest of justice and equity be
substantial justice must take precedence over
and prevent needless delay in readying a duly nevertheless allowed and appeal heard and
the lateness (by 24 days) in the submittal of
perfected appeal for consideration and decided on its merits?
the printed record on appeal which in no In the same resolution, Atty. Patrocino R.
decision (such as the 60-day period for
way can be claimed to have prejudiced the Corpus, as petitioners' counsel, was required
submittal of the printed record on appeal
substantial rights of respondent or delayed the to show cause "why he should not be The 60-day period for submitting the printed
involved here, periods for filling of briefs and
cause of the administration of justice and suspended from the practice of his profession record on appeal is obviously imposed as a
transcripts, through the imposition of
that accordingly, such a technical trangression for deceit, falsehood and violation of his sworn procedural rule, under Rule 46, section 5, like
appropriate disciplinary admonition or
on counsel's part should not result in the duty to the Court," but subsequently, the many other time limitations imposed by the
offending counsel, ranging from an contempt to
drastic forfeiture of petitioners' right of appeal appellate court as per its resolution of Rule of Court as indispensable to the
even more drastic measures of administrative
and of securing a possible of the adverse September 5, 1969 accepted as satisfactory prevention of needless dalays and necessary
proceedings for disbarment against him,
verdict of the lower court. said counsel's explanation and disclaimer of to the orderly and speedy discharge of judicial
depending upon the gravity of the offense.
any wrongdoing. business. 7
As stated by Chief Justice Concepcion for the
Separate Opinions
Court in Concepcion vs. Payatas Estate
Acting upon the appellate court's directive to But this 60-day period for submitting
Improvements Co., Inc., 3
investigate the incident for the filing of "After all, pleadings, as well as remedial laws, should by the printed record on appeal is to be
construed literally, in order that litigants may have ample opportunity to prove their respective claims, and that a possible
TEEHANKEE, J., dissenting: appropriate criminal action against Quiachon
denial of substantial justice, due to legal technicalities, may be avoided." This is but the very mandate of the Rules of Court:
that they be "liberally construed in order to promote their object and to assist the determination of every action and
distinguished from a court of first instance
4 5
and Malindog, the Rizal provincial fiscal found
proceeding" and that "All pleadings shall be liberally construed so as to do substantial justice." judgment under Rule 41, section 3, where
a prima facie case against Malindog (the letter- failure to file the necessary notice, bond and
I dissent from the main opinion penned by Mr.
Here, the 60-day period for petitioners carrier) and charged him in the corresponding record on appeal within the said 30-day period,
Justice Castro affirming the appellate court's
information for falsification of public documents if not duly extended, is fatal and calls for
dismissal of petitioner' pending appeal before it appellants "to submit .... forty
but dismissed the complaint against Quiachon dismissal of the unperfected appeal under Rule
because of late submittal of the printed record (40) printed copies of the record on appeal"
from notice on November 18, 1968 of receipt of (the mailing clerk of petitioners' counsel) for 41, section 13.
on appeal (by 24 days), on appeal when the
appeal was indisputably timely perfected the original typewritten record on appeal" from lack of sufficient evidence since Malindog
notice on November 18, 1968 of receipt of could not identify Quiachon ass the person
does not call for the imposition of the capital Here, the appeal had been long and timely
penalty of dismissal of the appeal. the original typewritten record on appeal in the who induced him to issue falsified registry duly perfected by petitioners. What is merely
appellate court 6 receipts.
involved here is late filing (by 24 days) of
was to expire on January 17, 1969. Petitioners submitted their printed record on
appeal on the 24th day after such expiry date, viz, on viz, on February 10, 1969.
the printed copies of the record on appeal,
As in my separate opinion in Sison vs.
I concur with the main opinion in its ruling which this Court has held in Ever Ice Drop
Gatchalian 1 promulgated just a few weeks earlier, I must note with gratification the special pains taken in
The appellate court admitted the printed record upholding the appellate court's factual findings, Factory vs. Court of Appeals 8
the main opinion to discuss nevertheless the substance and merit of the aborted appeal and to record the Court's policy in as "not indispensable to the jurisdiction of the
such cases (of dismissal of appeals timely perfected for failure to comply with certain requirements of the Rules) of invariably

satisfying itself that there is "a rational basis for the result by the trial court"
2
in the judgment sought to be reviewed by the
on appeal as per its original resolution of which I don't consider to be reviewable by this
appellate courts, the sole purpose of such printing being convenience in the handling, keeping and reading of the record on
appeal."
appeal.
February 25, 1969 denying respondent's Court, grounded as they are on substantial
motion to dismiss the appeal, wherein it evidence. Hence, for purposes of this review, In the cited case of Ever, the Court applied the
In the case at bar, however, I believe that the granted the registry-mailed motion of such factual findings must be postulated, to salutary rule of overlooking procedural
merits and equities invoked by petitioners- petitioners' counsel for a 30-day extension wit, that the printed record on appeal was deficiencies in the interest of substantial justice
appellants in support of their action for specific from January 15, 1969 within which to submit submitted 24 days late on February 10, 1969, and set aside the appellate court's dismissal of
performance of their agreement with the same. Counsel's ground for such extension that there was a deliberate effort on the part of
the appeal (for non-inclusion in the joint record
respondent for the purchase of the parcel of was from ground for such extension machines an unknown person (John Doe in the in
on appeal of the appellants' notice of appeal
land described in the complaint for the and voluminous printing jobs of the Vera information) not petitioners nor their and date of receipt of the appealed decision on
"agreement price (of): P10,000.00, P30,000.00 Pinting Press, which they had contracted to do counsel nor Quiachon, the mailing clerk to
appeal"), ruling that "Inasmuch as Rule 41 is in
down payment, bal. in 10 years" (which is a the printing job. induce Malindog to make and issue false that portion of the rules pertaining to the stage
matter of mathematical computation), with registry receipts that showed that petitioners' of the appeal process taking place in the trial
petitioners having admittedly made a down Upon complaint of respondent, however, that counsel's motion for a 30-day extension to court, it is but logical that the frame of
payment of P10,000.00 as "earnest money" petitioners' counsel, through its mailing clerk submit the printed record on appeal was filed reference, when the completeness of a record
which was accepted by respondent and Juanito D. Quiachon, had deceived the timely on January 15, 1959 rather late(by 21 on appeal, as therein provided, is in question,
continuing to pay respondent lease rentals for appellate court into believing that their motion days) on February 7, 1969. must be the contents of said record as filed
the time taken to complete the full down
parties-appellants aggrieved by adverse to submit their appeals to this Court by means of records on appeal as approved by
with said court, and not necessarily those of brief, merely confers a power, not a duty, upon the lower court, contrary to the act's mandate that they should by presented by means of "petition .... filed and served in the
form required for petitions for review by certiorari of decisions of the Court of Appeals." 12 Strictly speaking, such an error
offending counsel, ranging from an contempt to
the printed one filed with the appellant court." the mandatory, upon the said court to exercise although abetted by the trial court's act of approving a record on appeal that is not required by the Act, could be considered
fatal to the appeal. But following paramount considerations of substantial justice in preference to transgressions of form, as
13
even more drastic measures of administrative
its power to dismiss an appeal and dismissal stressed in Sonora vs. Tongoy, "the Court has been liberal in the implementation of Republic Act 5440 and instead of
dismissing appeals coming up to Us by record on appeal, We have allowed the appellants to file the corresponding petition(for proceedings for disbarment against him,
14
has been ordered sparingly and only in review by certiorari) provided the appeal by record on appeal had been duly perfected within the reglementary period.
depending upon the gravity of the offense.
As applied to the case at bar, therefore, I vote
extreme cases warranting dismissal;
for the granting of the petition and to demand
the appeal to the appellate court for disposition This is to stress that even though the
G.R. No. 137290 July 31, 2000
and decision of the merits, for the following Withal, this Court may dismiss an appeal provision of Republic Act 5440 that such
considerations, in addition to those stated even on grounds not specifically mentioned in appeals shall be only on petitions for review by
above and in my separate opinion in Rule 50, section 1, as where the wanton or petitions by certiorari and no longer as a matter SAN MIGUEL PROPERTIES PHILIPPINES,
Sison, supra: inexcusable conduct of appellant in not of right by record on appeal is of a mandatory INC., petitioner,
complying with the rules warrants such character, this Court has nevertheless adopted vs.
dismissal. 9 But the Rules certainly do not a liberal construction and chosen to apply the SPOUSES ALFREDO HUANG and GRACE
Since the use of the false registry receipts principle of substantial justice in favor of one HUANG, respondents.
authorize dismissal of a duly perfected appeal
appears in no way to be the making of whose appeal was actually perfected on time
within the original 60-day period, such failure
petitioners themselves, who as clients may be rather than to sacrifice substance to form. In
not being wanton or inexcusable. Yet such DECISION
presumed to be entirely unaware of the the language of Sonora, vis a vis the case at
failure to file the printed record on appeal
procedural requirements and of their counsel's bar, "it is less than fair for respondents to
within the 60-day period (which was filed late
action or inaction in complying therewith, the attempt to cut off (petitioners') right to appeal MENDOZA, J.:
by 24 days and had already been admitted)
imposition of the capital of dismissal of by invoking the literal meaning of the language
was the only ground stated by the appellate
petitioners' appeal is unduly severe; of the rules, disregarding their wise and
court for its peremptory dismissal of the This is a petition for review of the
appeal; practical construction already laid down by the
decision,1 dated April 8, 1997, of the Court of
Supreme Court." 15
Such a harsh penalty appears to be in Appeals which reversed the decision of the
derogation of the interest and purpose of the Regional Trial Court, Branch 153, Pasig City
Thus, the appellate court did not sustain
Rules of Court the proper and just In sensu contrario, applying the same dismissing the complaint brought by
respondent's contention that petitioners
determination of a litigation. No substantial principles of substantial justice the Court has in respondents against petitioner for enforcement
through counsel had deceived it through
right of respondent has been prejudiced by the many cases seeking mandamus or of a contract of sale.
knowing use of the false registry receipts,
late submittal of the late submittal of the reinstatement of disallowed appeals (although
since it exonerated counsel of any complicity.
printed record, whereas petitioners' appeal timely made) looked at the "substantive merits"
One gets the impression that the unnamed The facts are not in dispute.
would be forfeited through no fault or
person had perhaps induced Malindog to issue of the proposed appeal and where "there is
negligence on their part; While clients are hardly any prospect of its being ultimately
the false receipts to cover up some neglect or
generally bound by the actions or mistakes of sucessful," denied mandamus, ruling as Petitioner San Miguel Properties Philippines,
fault on Quiachon's part in not having timely
their counsels, here no fault or wrongdoing has
mailed counsel's extension motion, but neither in Espiritu vs. CFI of Cavite Inc. is a domestic corporation engaged in the
16
that" this Court has already ruled on several

been attributed to either petitioners or their occasions, since as early as De la Cruz vs. Blanco, 73 Phil. 596 that mandamus to compel approval and certification of an
purchase and sale of real properties. Part of its
the appellate court nor the fiscal 17
appeal, even if otherwise well grounded, procedurally speaking, has to be appeal itself, and 'it would serve no useful purpose

counsel. Their counsel's late submittal of the to reinstate' the same." Lucas vs. Mariano
inventory are two parcels of land totalling 1,
was to the same effect with the Court sustaining therein petitioner's submittal

made any such Quiachon was responsible for "that from the point of view of the time of the taking of the appeal, petitioners, We are sufficiently convinced that their claim of

brief and of the corresponding motions for title has no chance of being sustained even if other and further proceedings were to be held in the court below;" and

738 square meters at the corner of Meralco


the deception, it does not seem fair to penalize
extension (by less than a month's time) is not Avenue and General Capinpin Street, Barrio
petitioners with dismissal of their appeal;
rank failure to comply with the rule's Finally, adherence to a liberal construction Oranbo, Pasig City, which are covered by TCT
requirements; of the procedural rules in order to attain their Nos. PT-82395 and PT-82396 of the Register
The appellate court thus disregarded the objective of substantial justice and of avoiding of Deeds of Pasig City.
harmless error rule as provided in Rule 51, possible denials of substantial justice due to
The specific rule (Rule 46, section 5)
section 5 that "no error or defect in any ruling procedural technicalities does not mean non-
does not provided for dismissal of the appeal On February 21, 1994, the properties were
or order ... [such as its first order admitting the enforcement of the Rules of Court which are
for failure to submit theprinted record on offered for sale for P52,140,000.00 in cash.
printed record on appeal in the belief that universally recognized to be necessary to the
appeal whereas section 7 of the rule prohibits The offer was made to Atty. Helena M. Dauz
petitioners' motion for extension had been orderly and speedy discharge of judicial
"alternations, omissions or additions to the
timely filed] .... is ground.... for setting aside, business with the least delay. Compliance with who was acting for respondent spouses as
printed record" and does provide that "a
modifying or otherwise disturbing a judgment the rules, which are not of mandatory character undisclosed principals. In a letter2 dated March
violation of this prohibition shall be a ground for 24, 1994, Atty. Dauz signified her clients
or order, unless refusal to take such action (such as the period for perfecting appeals,
dismissal of the appeal." interest in purchasing the properties for the
appears to the court inconsistent failure to observe which results in the
with substantial justice. The court at every automatic penalty of loss of the right to appeal) amount for which they were offered by
Even Rule 50, section 1 which provides that stage of the proceeding but of directory character to provide time tables petitioner, under the following terms: the sum
the appellate court may dismissal pending must disregard any error or defect which and prevent needless delay in readying a duly of P500,000.00 would be given as earnest
appeal for certain specific infractions of the does notaffect the substantial rights of the perfected appeal for consideration and money and the balance would be paid in eight
rules, e.g. failure to pay the docketing fee or to parties;" 10 decision (such as the 60-day period for equal monthly installments from May to
file appellant's brief on time or "unauthorized submittal of the printed record on appeal December, 1994. However, petitioner refused
alterations, omissions or additions in the involved here, periods for filling of briefs and the counter-offer.
Since the enactment as of September 9,
printed record on appeal" (paragraph(e)) or transcripts, through the imposition of
1968 of Republic Act 5440 providing that in
want of specific assignment of errors or of appropriate disciplinary admonition or
most cases as specified therein, 11 review by this Court of final
page references to the record in appellant's judgments and decrees of inferior courts shall be by petition for writ of certiorari and no longer by record on appeal some
On March 29, 1994, Atty. Dauz wrote another On April 25, 1994, Atty. Dauz asked for an tendered by respondents, had already been the Civil Code. They presented the amount
letter3 proposing the following terms for the extension of 45 days from April 29, 1994 to accepted by petitioner. The court cited Art. merely as a deposit of what would eventually
purchase of the properties, viz: June 13, 1994 within which to exercise her 1482 of the Civil Code which provides that become the earnest money or downpayment
option to purchase the property, adding that "[w]henever earnest money is given in a should a contract of sale be made by them.
within that period, "[we] hope to finalize [our] contract of sale, it shall be considered as part The amount was thus given not as a part of the
This is to express our interest to buy your-
agreement on the matter."4 Her request was of the price and as proof of the perfection of purchase price and as proof of the perfection
above-mentioned property with an area of 1,
granted. the contract." The fact the parties had not of the contract of sale but only as a guarantee
738 sq. meters. For this purpose, we are
agreed on the mode of payment did not affect that respondents would not back out of the
enclosing herewith the sum of P1,000,000.00
the contract as such is not an essential sale. Respondents in fact described the
representing earnest-deposit money, subject to On July 7, 1994, petitioner, through its
element for its validity. In addition, the court amount as an "earnest-deposit." In Spouses
the following conditions. president and chief executive officer, Federico
found that Sobrecarey had authority to act in Doromal, Sr. v. Court of Appeals,9it was held:
Gonzales, wrote Atty. Dauz informing her that
behalf of petitioner for the sale of the
because the parties failed to agree on the
1. We will be given the exclusive properties.7
terms and conditions of the sale despite the . . . While the P5,000 might have indeed been
option to purchase the property
extension granted by petitioner, the latter was paid to Carlos in October, 1967, there is
within the 30 days from date of your
returning the amount of P1 million given as Petitioner moved for reconsideration of the trial nothing to show that the same was in the
acceptance of this offer.
"earnest-deposit."5 courts decision, but its motion was denied. concept of the earnest money contemplated in
Hence, this petition. Art. 1482 of the Civil Code, invoked by
2. During said period, we will petitioner, as signifying perfection of the
On July 20, 1994, respondent spouses,
negotiate on the terms and sale. Viewed in the backdrop of the factual
through counsel, wrote petitioner demanding Petitioner contends that the Court of Appeals
conditions of the purchase; SMPPI milieu thereof extant in the record, We are
the execution within five days of a deed of sale erred in finding that there was a perfected
will secure the necessary more inclined to believe that the
covering the properties. Respondents contract of sale between the parties because
Management and Board approvals; said P5,000.00 were paid in the concept of
attempted to return the "earnest-deposit" but the March 29, 1994 letter of respondents,
and we initiate the documentation if earnest money as the term was understood
petitioner refused on the ground that which petitioner accepted, merely resulted in
there is mutual agreement between under the Old Civil Code, that is, as a
respondents option to purchase had already an option contract, albeit it was unenforceable
us. guarantee that the buyer would not back out,
expired. for lack of a distinct consideration. Petitioner
considering that it is not clear that there was
argues that the absence of agreement as to
already a definite agreement as to the
3. In the event that we do not come the mode of payment was fatal to the
On August 16, 1994, respondent spouses filed price then and that petitioners were decided to
to an agreement on this transaction, perfection of the contract of sale. Petitioner
a complaint for specific performance against buy 6/7 only of the property should respondent
the said amount of P1,000,000.00 also disputes the appellate courts ruling that
petitioner before the Regional Trial Court, Javellana refuse to agree to part with her 1/7
shall be refundable to us in full upon Isidro A. Sobrecarey had authority to sell the
Branch 133, Pasig City where it was docketed share.10
demand. . . . subject real properties. 8

as Civil Case No. 64660.


In the present case, the P1 million "earnest-
Isidro A. Sobrecarey, petitioners vice-president Respondents were required to comment within
Within the period for filing a responsive deposit" could not have been given as earnest
and operations manager for corporate real ten (10) days from notice. However, despite 13
pleading, petitioner filed a motion to dismiss money as contemplated in Art. 1482 because,
estate, indicated his conformity to the offer by extensions totalling 142 days which the Court
the complaint alleging that (1) the alleged at the time when petitioner accepted the terms
affixing his signature to the letter and accepted had given to them, respondents failed to file
"exclusive option" of respondent spouses of respondents offer of March 29, 1994, their
the "earnest-deposit" of P1 million. Upon their comment. They were thus considered to
lacked a consideration separate and distinct contract had not yet been perfected. This is
request of respondent spouses, Sobrecarey have waived the filing of a comment.
from the purchase price and was thus evident from the following conditions attached
ordered the removal of the "FOR SALE" sign
unenforceable and (2) the complaint did not by respondents to their letter, to wit: (1) that
from the properties.
allege a cause of action because there was no The petition is meritorious. they be given the exclusive option to purchase
"meeting of the minds" between the parties the property within 30 days from acceptance of
Atty. Dauz and Sobrecarey then commenced and, therefore, no perfected contract of sale. the offer; (2) that during the option period, the
In holding that there is a perfected contract of
negotiations. During their meeting on April 8, The motion was opposed by respondents. parties would negotiate the terms and
sale, the Court of Appeals relied on the
1994, Sobrecarey informed Atty. Dauz that conditions of the purchase; and (3) petitioner
following findings: (1) earnest money was
petitioner was willing to sell the subject would secure the necessary approvals while
On December 12, 1994, the trial court granted allegedly given by respondents and accepted
properties on a 90-day term. Atty. Dauz respondents would handle the documentation.
petitioners motion and dismissed the action. by petitioner through its vice-president and
countered with an offer of six months within
Respondents filed a motion for operations manager, Isidro A. Sobrecarey; and
which to pay.
reconsideration, but it was denied by the trial (2) the documentary evidence in the records The first condition for an option period of 30
court. They then appealed to the Court of show that there was a perfected contract of days sufficiently shows that a sale was never
On April 14, 1994, the parties again met during Appeals which, on April 8, 1997, rendered a sale. perfected. As petitioner correctly points out,
1wphi1

which Sobrecarey informed Atty. Dauz that decision6 reversing the judgment of the trial acceptance of this condition did not give rise to
petitioner had not yet acted on her counter- court. The appellate court held that all the a perfected sale but merely to an option or an
With regard to the alleged payment and
offer. This prompted Atty. Dauz to propose a requisites of a perfected contract of sale had accepted unilateral promise on the part of
acceptance of earnest money, the Court holds
four-month period of amortization. been complied with as the offer made on respondents to buy the subject properties
that respondents did not give the P1 million as
March 29, 1994, in connection with which the within 30 days from the date of acceptance of
"earnest money" as provided by Art. 1482 of
earnest money in the amount of P1 million was the offer. Such option giving respondents the
exclusive right to buy the properties within the only requires agreement by the parties as to WHEREFORE, the decision of the Court of Petitioner also averred that she agreed to meet
period agreed upon is separate and distinct the price of the object. This is error. In Navarro Appeals is REVERSED and respondents respondent spouses and the Ramoses on 5
from the contract of sale which the parties may v. Sugar Producers Cooperative Marketing complaint is DISMISSED. August 1978 at the Office of the Registry of
enter.11 All that respondents had was just the Association, Inc.,14 we laid down the rule that deeds of Makati, Metro Manila, to consummate
option to buy the properties which privilege the manner of payment of the purchase price is the transaction but due to the failure of
SO ORDERED.
was not, however, exercised by them because an essential element before a valid and binding respondent Asuncion Santos-de Vera and the
there was a failure to agree on the terms of contract of sale can exist. Although the Civil Ramoses to appear, no transaction was
payment. No contract of sale may thus be Code does not expressly state that the minds G.R. No. 135929 April 20, 2001 formalized. In a second meeting scheduled on
enforced by respondents. of the parties must also meet on the terms or 11 August 1978 she claimed that she was
manner of payment of the price, the same is willing and ready to pay the balance of the
needed, otherwise there is no sale. As held LOURDES ONG LIMSON, petitioner, purchase price but the transaction again did
Furthermore, even the option secured by vs.
in Toyota Shaw, Inc. v. Court of not materialize as respondent spouses failed to
respondents from petitioner was fatally COURT OF APPEALS, SPOUSES LORENZO pay the back taxes of subject property.
Appeals,15 agreement on the manner of
defective. Under the second paragraph of Art. DE VERA and ASUNCION SANTOS-DE
payment goes into the price such that a Subsequently, on 23 August 1978 petitioner
1479, an accepted unilateral promise to buy or VERA, TOMAS CUENCA, JR. and SUNVAR
disagreement on the manner of payment is allegedly gave respondent Lorenzo de Vera
sell a determinate thing for a price certain is REALTY DEVELOPMENT
tantamount to a failure to agree on the three (3) checks in the total amount of P36,
binding upon the promisor only if the promise CORPORATION, respondents.
price.16 In Velasco v. Court of Appeals,17 the 170.00 for the settlement of the back taxes of
is supported by a distinct consideration.
parties to a proposed sale had already agreed the property and for the payment of the
Consideration in an option contract may be
on the object of sale and on the purchase BELLOSILLO, J.: quitclaims of the three (3) tenants of subject
anything of value, unlike in sale where it must
price. By the buyers own admission, however, land. The amount was purportedly considered
be the price certain in money or its equivalent.
the parties still had to agree on how and when part of purchase price and respondent Lorenzo
There is no showing here of any consideration Filed under Rule 45 of the Rules of Court
the downpayment and the installments were to de Vera signed the receipts therefor.
for the option. Lacking any proof of such this Petition for Review on Certiorari seeks to
be paid. It was held:
consideration, the option is unenforceable. review, reverse and set aside the Decision of1

the Court of Appeals dated 18 May 1998 Petitioner alleged that on 5 September 1978
. . . Such being the situation, it can not, reversing that of the Regional Trial Court dated she was surprised to learn from the agent of
Equally compelling as proof of the absence of
therefore, be said that a definite and firm sales 30 June 1993. The petitioner likewise assails respondent spouses that the property was the
a perfected sale is the second condition that,
agreement between the parties had been the Resolution2 of the appellate court of 19 subject of a negotiation for the sale to
during the option period, the parties would
perfected over the lot in question. Indeed, this October 1998 denying petitioners Motion for respondent Sunvar Realty Development
negotiate the terms and conditions of the
Court has already ruled before that a definite Reconsideration. Corporation (SUNVAR) represented by
purchase. The stages of a contract of sale are
agreement on the manner of payment of the respondent Tomas Cuenca, Jr. On 15
as follows: (1) negotiation, covering the period
purchase price is an essential element in the September 1978 petitioner discovered that
from the time the prospective contracting Petitioner Lourdes Ong Limson, in her 14 may although respondent spouses purchased the
formation of a binding and enforceable contract
parties indicate interest in the contract to the 1979 Complaint filed before the trial
of sale. The fact, therefore, that the petitioners property from the Ramoses on 20 March 1970
time the contract is perfected; (2) perfection, court,3 alleged that in July 1978 respondent
delivered to the respondent the sum of it was only on 15 September 1978 that TCT
which takes place upon the concurrence of the spouses Lorenzo de Vera and Asuncion
P10,000 as part of the down-payment that they No. S-72946 covering the property was issued
essential elements of the sale which are the Santos-de Vera, through their agent Marcosa
had to pay cannot be considered as sufficient to respondent spouses. As a consequence,
meeting of the minds of the parties as to the Sanchez, offered to sell to petitioner a parcel of she file on the same day an affidavit of
proof of the perfection of any purchase and
object of the contract and upon the price; and land consisting of 48, 260 square meters, more Adverse Claim with the Office of the Registry of
sale agreement between the parties herein
(3) consummation, which begins when the or less, situated in Barrio San Dionisio,
under Art. 1482 of the new Civil Code, as the Deeds of Makati, Metro, which was annotated
parties perform their respective undertakings Paraaque, Metro Manila; that respondent
petitioners themselves admit that some on TCT No. S-72946. She also claimed that on
under the contract of sale, culminating in the spouses informed her that they were the
essential matter - the terms of the payment - the same day she informed respondent
extinguishment thereof.12 In the present case, owners of the subject property; that on 31 July Cuenca of her "contract" to purchase the
still had to be mutually covenanted.18
the parties never got past the negotiation 1978 she agreed to buy the property at the property.
stage. The alleged "indubitable evidence"13 of a price of P34.00 per square meter and gave the
perfected sale cited by the appellate court was Thus, it is not the giving of earnest money, but sum of P20,000.00 to respondent spouses as
nothing more than offers and counter-offers the proof of the concurrence of all the essential "earnest money;" that respondent spouses The Deed of Sale between respondent
which did not amount to any final arrangement elements of the contract of sale which signed a receipt therefor and gave her a 10- spouses and respondent SUNVAR was
containing the essential elements of a contract establishes the existence of a perfected sale. day option period to purchase the property; executed on 15 September 1978 and TCT N0.
of sale. While the parties already agreed on that respondent Lorenzo de Vera then S-72377 was issued in favor of the latter on 26
the real properties which were the objects of informed her that the subject property was September 1978 with the adverse Claim of
In the absence of a perfected contract of sale,
the sale and on the purchase price, the fact mortgaged to Emilio Ramos and Isidro Ramos; petitioner annotated thereon. Petitioner
it is immaterial whether Isidro A. Sobrecarey
remains that they failed to arrive at mutually that respondent Lorenzo de Vera asked her to claimed that when respondent spouses sold
had the authority to enter into a contract of sale
acceptable terms of payment, despite the 45- pay the balance of the purchase price to the property in dispute to SUNVAR, her valid
in behalf of petitioner. This issue, therefore,
day extension given by petitioner. enable him and his wife to settle their and legal right to purchase it was ignored if not
needs no further discussion.
obligation with the Ramoses. 1wphi1.nt
violated. Moreover, she maintained that
SUNVAR was in bad faith, as it knew of her
The appellate court opined that the failure to
"contract" to purchase the subject property fro
agree on the terms of payment was no bar to
respondent spouse.
the perfection of the sale because Art. 1475
Finally, for the alleged unlawful and unjust acts monies received from them by respondent ordered (a) the Register of Deeds of Makati the election or option of the other party.10 Its
of respondent spouses, which caused her spouses, attorneys fees and expenses for City to lift the Adverse Claim and such other distinguishing characteristic is that it imposes
damage, prejudice and injury, petitioner litigation in the event that the trial court should encumbrances petitioner might have filed or no binding obligation on the person holding the
claimed that the Deed of Sale, should be annul the Deed of Sale and deprive them of caused to be annotated on TCT No. S-75377; option, aside from the consideration for the
annuled and TCT No. S-72377 in the name of their ownership and possessio of the subject and, (b) petitioner to pay (1) respondent offer. Until acceptance, it is not, properly
respondent SUNVAR canceled and TCT No. S- land. SUNVAR P50,000.00 as nominal damages, speaking, a contract, and does not vest,
72946 restored. She also insisted that a Deed P30,000.00 as exemplary damages and transfer, or agree to transfer, any title to, or any
of Sale between her an respondent spouses P20,000 as attorneys fees; (2) respondent interest or right in the subject matter, but is
In their Answer to the Cross-Claim6 of
be now executed upon her payment of the spouses, P15,000.00 as nominal damages, merely a contract by which the owner of the
respondents SUNVAR and Cuenca,
balance of the purchase price agreed upon, P10,000.00 as exemplary damages and property gives the optionee the right or
respondent spouses insisted that they
plus damages and attorneys fees. P10,000.00 as attorneys fees; and, (3) the privilege of accepting the offer and buying the
negotiated with the former only after expiration
costs. property on certain terms.11
of the option period given to petitioner and her
In their Answer4 respondent spouses failure with her commitments thereunder.
maintained that petitioner had no sufficient Respondent spouses contended that they Petitioner timely filed a Motion for On the other hand, a contract, like a contract to
cause of action against them; that she was not acted legally and validly, in all honesty and Reconsideration which was denied by the sell, involves the meeting of minds between
the real party in interest; that the option to buy good faith. According to them, respondent Court of Appeals on 19 October 1998. Hence, two persons whereby one binds himself, with
the property had long expired; that there was SUNVAR made a verification of the title with this petition. respect to the other, to give something or to
no perfected contract to sell between them; the office of the register of Deeds of Metro render some service.12 Contracts, in general,
and, that petitioner had no legal capacity to Manila District IV before the execution of are perfected by mere consent,13 which is
At issue for resolution by the Court is the
sue. Additionally, respondent spouses claimed the Deed of Absolute Sale. Also, they claimed manifested by the meeting of the offer and the
nature of the contract entered into between
actual, moral and exemplary damages, and that the Cross-Claim was written executed by acceptance upon the thing and the cause
petitioner Lourdes Ong Limson on one hand,
attorneys fees against petitioner. respondent SUNVAR in their favor. Thus, which are to constitute the contract. The offer
and respondent spouses Lorenzo de Vera and
respondent spouses prayed for actual must be certain and the acceptance absolute.14
Asuncion Santos-de Vera on the other.
damages for the unjustified filling of the Cross-
On the other hand, respondents SUNVAR and
Claim, moral damages for the mental anguish
Cuenca, in their Answer alleged that petitioner
5
The Receipt15 that contains the contract
and similar injuries they suffered by reason The main argument of petitioner is that there
was not the proper party in interest and/or had between petitioner and respondent spouses
thereof, exemplary damages "to prevent others was a perfected contract to sell between her
no cause of action against them. But, even provides
from emulation the bad example" of and respondent spouses. On the other hand,
assuming that petitioner was the proper party
respondents SUNVAR and Cuenca, plus respondent spouses and respondents
in interest, they claimed that she could only be
attorneys fees. SUNVAR and Cuenca argue that what was Received from Lourdes Limson the
entitled to the return of any amount received by
perfected between petitioner and respondent sum of Twenty Thousand Peso
respondent spouses. In the alternative, they
spouses was a mere option. (P20,000.00) under Check No.
argued that petitioner had lost her option to After a protracted trial and reconstitution of the
22391 dated July 31, 1978 as
buy the property for failure to comply with the court records due to the fire that razed the
earnest money with option to
terms and conditions of the agreement as Pasay City Hall on 18 January 1992, the A scrutiny of the facts as well as the evidence
purchase a parcel of land owned by
embodied in the receipt issued therefor. Regional Trial Court rendered its 30 June 1993 of the parties overwhelmingly leads to the
Lorenzo de Vera located at Barrio
Moreover, they contended that at the time of Decision7 in favor of petitioner. It ordered (a) conclusion that the agreement between the
San Dionisio, Municipality of
the execution of the Deed of Sale and the the annulment and rescission of the Deed of parties was a contract of option and not
Paraaque, Province of Rizal with
payment of consideration to respondent Absolute Sale executed on 15 September a contract to sell.
an area of forty eight thousand two
spouses, they "did not know nor was informed" 1978 by respondent spouses in favor of
hundred sixty square meters more or
of petitioners interest or claim over the subject respondent SUNVAR; (b) the cancellation and
An option, as used in the law of sales, is a less at the price of Thirty Four Pesos
property. They claimed furthermore that it was revocation of TCT No. S-75377 of the Registry
continuing offer or contract by which the owner (34.00)16 cash subject to the
only after the signing of the Deed of Sale and of Deeds, Makati, Metro Manila, issued in the
sitpulates with another that the latter shall have condition and stipulation that have
the payment of the corresponding amounts to name of respondent Sunvar Realty
the right to buy the property at a fixed price been agreed upon by the buyer and
respondent spouses that they came to know of Development Corporation, and the restoration
within a time certain, or under, or in compliance me which will form part of the
the claim of petitioner as it was only then that or reinstatement of TCT No. S-72946 of the
with, certain terms and conditions, or which receipt. Should the transaction of the
they were furnished copy to the title to the same Registry issued in the name of
gives to the owner of the property the right to property not materialize not on the
properly where the Adverse Claim of petitioner respondent spouses; (c) respondent spouses
sell or demand a sale. It is also sometimes fault of the buyer, I obligate myself to
was annotated. Consequently, they also to execute a deed of sale conveying ownership
called an "unaccepted offer." An option is not return the full amount of P20,000.00
instituted a Cross-Claim against respondent of the property covered by TCT No. S-72946 in
itself a purchase, but merely secures the earnest money with option to buy or
spouses for bad faith in encouraging the favor of petitioner upon her payment of the
privilege to buy.8 It is not a sale of property but forfeit on the fault of the buyer. I
negotiations between them without telling them balance of the purchase price agreed upon;
a sale of right to purchase.9 It is simply a guarantee to notify the buyer
of the claim of petitioner. The same and, (d) respondent spouses to pay petitioner
contract by which the owner of property agrees Lourdes Limson or her
respondents maintained that had they known P50,000.00 as and for attorneys fees, and to
with another person that he shall have the right representative and get her
of the claim of petitioner, they would not have pay the costs.
to buy his property at a fixed price within a conformity should I sell or encumber
initiated negotiations with respondent spouses
certain time. He does not sell his land; he does this property to a third person. This
for the purchase of the property. Thus, they
On appeal, the Court of Appeals completely not then agree to sell it; but he does not sell option to buy is good within ten (10)
prayed for reimbursement of all amounts and
reversed the decision of the trial court. It something, i.e., the right or privilege to buy at days until the absolute deed of sale
is finally signed by the parties or the buttressed by the provision therein that should of private respondent spouses offer and petitioner could have easily made the
failure of the buyer to comply with the transaction of the provision therein that petitioners acceptance thereof within the necessary payment in cash as the price of the
the terms of the option to buy as should the transaction of the property not option period. Consequently, there was no property was already set at P34.00 per square
herein attached. materialize without fault of petitioner as buyer, perfected contract to sell between the parties. meter and payment of the mortgage could
respondent Lorenzo de Vera obligates every well be left to respondent spouses.
himself to return the full amount of P20,000.00
In the interpretation of contracts, the On 11 August 1978 the option period expired
"earnest money" with option to buy or
ascertainment of the intention of the and the exclusive right of petitioner to buy the Petitioner further claims that when respondent
forfeit the same on the fault of petitioner. It is
contracting parties is to be discharged by property of respondent spouses ceased. The spouses sent her a telegram demanding full
further bolstered by the provision therein that
looking to the words they used to project that subsequent meetings and negotiations, payment of the purchase price on 14
guarantees petitioner that she or her
intention in their contracts, all the words specifically on 11 and 23 August 1978, September 1978 it was an acknowledgment of
representative would be notified in case the
standing alone.17 The above Receipt readily between the parties only showed the desire of their contract to sell, thus denying them the
subject property was sold or encumbered to a
shows that respondent spouses and petitioner respondent spouses to sell their property to right to claim otherwise.
third person. Finally, the Receipt provided for a
only entered into a contract of option; a petitioner. Also, on 14 September 1978 when
period within which the option to buy was to be
contract by which respondent spouses agreed respondent spouses sent a telegram to
exercised, i.e., "within ten (10) days" from 31 We do not agree. As explained above, there
with petitioner that the latter shall have the petitioner demanding full payment of the
July 1978. was no contract to sell between petitioner and
right to buy the former's property at a fixed purchase price on even date simply
respondent spouses to speak of. Verily, the
price of P34.00 per square meter within ten demonstrated an inclination to give her
telegram could not operate to estop them from
(10) days from 31 July 1978. Respondent Doubtless, the agreement between respondent preference to buy subject property. Collectively,
claiming that there was such contract between
spouses did not sell their property; they did not spouses and petitioner was an "option these instances did not indicate that petitioner
them and petitioner. Neither could it mean that
also agree to sell it; but they sold something, contract" or what is sometimes called an still had the exclusive right to purchase subject
respondent spouses extended the option
i.e., the privilege to buy at the election or "unaccepted offer." During the option period property. Verily, the commencement of
period. The telegram only showed that
option of petitioner. The agreement imposed no the agreement was not converted into a negotiations between respondent spouses and
respondent spouses were willing to give
binding obligation on petitioner, aside from the bilateral promise to sell and to buy where both respondent SUNVAR clearly manifested that
petitioner a chance to buy subject property
consideration for the offer. respondent spouses and petitioner were then their offer to sell subject property to petitioner
even if it no longer exclusive.
reciprocally bound to comply with their was no longer exclusive to her.
respective undertakings as petitioner did not
The consideration of P20,000.00 paid by
timely, affirmatively and clearly accept the offer The option period having expired and
petitioner to respondent spouses was referred We cannot subscribe to the argument of
of respondent spouses. acceptance was not effectively made by
to as "earnest money." However, a careful petitioner that respondent spouses extended
petitioner, the purchase of subject property by
examination of the words used indicated that the option period when they extended the
respondent SUNVAR was perfectly valid and
the money is not earnest money but option The rule is that except where a formal authority of their until 31 August 1978. The
entered into in good faith. Petitioner claims that
money. "Earnest money" and "option money" acceptance is not required, although the extension of the contract of agency could not
in August 1978 Hermigildo Sanchez, the son of
are not the same but distinguished thus; (a) acceptance must be affirmatively and clearly operate to extend the option period between
respondent spouses agent, Marcosa Snachez,
earnest money is part of the purchase price, made and evidenced by some acts or conduct the parties in the instant case. The extension
informed Marixi Prieto, a member of the Board
while option money is the money given as a communicated to the offeror, it may be made must not be implied but categorical and must
of Directors of respondent SUNVAR, that the
distinct consideration for an option contract; (b) either in a formal or an informal manner, and show the clear intention of the parties. 1wphi1.nt
property was already sold to petitioner. Also,
earnest money given only where there is may be shown by acts, conduct or words by
petitioner maintains that on 5 September 1978
already a sale, while option money applies to a the accepting party that clearly manifest a
As to whether respondent spouses were at respondent Cuenca met with her and offered to
sale not yet perfected; and, (c) when earnest present intention or determination to accept the
fault for the non-consummation of their buy the property from her at P45.00 per square
money is given, the buyer is bound to pay the offer to buy the property of respondent
contract with petitioner, we agree with the meter. Petitioner contends that these incidents,
balance, while when the would-be buyer gives spouses within the 10-day option period. The
appellate court that they were not to be including the annotation of her Adverse
option money, he is not required to buy, but
18
only occasion within the option period when
blammed. First, within the option period, or on Claim on the title of subject property on 15
may even forfeit it depending on the terms of petitioner could have demonstrated her
4 August 1978, it was respondent spouses and September 1978 show that respondent
the option. acceptance was on 5 August 1978 when,
not petitioner who initiated the meeting at the SUNVAR was aware of the perfected sale
according to her, she agreed to
Office of The Register of Deeds of between her and respondent spouses, thus
meet respondent spouses and the Ramoses at
There is nothing in the Receipt which indicates Makati. Second, that the Ramoses filed to making respondent SUNVAR a buyer in bad
the Office of the Registrar of Deeds of Makati.
that the P20,000.00 was part of the purchase appear on 4 August 1978 was beyond the faith.
Petitioners agreement to meet with
price. Moreover, it was not shown that there control of respondent spouses. Third, the
respondent spouses presupposes an invitation
was a perfected sale between the parties succeeding meetings that transpired to
from the latter, which only emphasizes their Petitioner is not correct. The dates mentioned,
where earnest money was given. Finally, when consummate the contract were all beyond the
persistence in offering the property to the at least 5 and 15 September 1978, are
petitioner gave the "earnest money" the option period and, as declared by the Court of
former. But whether that showed acceptance immaterial as they were beyond the option
Receipt did not reveal that she was bound to Appeals, the question of who was at fault was
by petitioner of the offer is hazy and dubious. period given to petitioner. On the other hand,
pay the balance of the purchase price. In fact, already immaterial. Fourth, even assuming that
the referral to sometime in August 1978 in the
she could even forfeit the money given if the the meetings were within the option period, the
testimony of Hermigildo Sanchez as
terms of the option were not met. Thus, the On or before 10 August 1978, the last day of presence of petitioner was not enough as she
emphasized by petitioner in her petition is very
P20,000.00 could only be money given as the option period, no affirmative or clear was not even prepared to pay the purchase
vague. It could be within or beyond the option
consideration for the option contract. That the manifestation was made by petitioner to accept price in cash as agreed upon. Finally, even
period. Clearly then, even assuming that the
contract between the parties is one of option is the offer. Certainly, there was no concurrence without the presence of the Ramoses,
meeting with Marixi Prieto actually transpired, it VILLONCO REALTY COMPANY, plaintiff- adjacent to the property of Villonco Realty under the following
could not necessarily mean that she knew of appellee and EDITH PEREZ DE Company situated at 219 Buendia Avenue. conditions:
the agreement between petitioner and TAGLE, intervenor-appellee,
respondent spouses for the purchase of vs.
In the early part of February, 1964 there were (1) That we are offering
subject property as the meeting could have BORMAHECO, INC., FRANCISCO N.
negotiations for the sale of the said lots and to sell to you the above
occurred beyond the option period. In which CERVANTES and ROSARIO N.
the improvements thereon between Romeo property at the price of
case, no bad faith could be attributed to CERVANTES, defendants-appellants. Meer,
Villonco of Villonco Realty Company "and P400.00 per square
respondent SUNVAR. If, on the other hand, the Meer & Meer for plaintiff-appellee.
Bormaheco, Inc., represented by its president, meter;
meeting was within the option period, petitioner
Francisco N. Cervantes, through the
was remiss in her duty to prove so.
J. Villareal, Navarro and Associates for intervention of Edith Perez de Tagle, a real
Necessarily, we are left with the conclusion that (2) That a deposit of
defendants-appellants. estate broker".
respondent SUNVAR bought subject property P100,000.00 must be
from respondent spouses in good faith, for placed as earnest
value and without knowledge of any flaw or P. P. Gallardo and Associates for intervenor- In the course of the negotiations, the brothers money on the purchase
defect in its title. appellee. Romeo Villonco and Teofilo Villonco conferred of the above property
with Cervantes in his office to discuss the price which will become part
and terms of the sale. Later, Cervantes "went payment of the property
The appellate court awarded nominal and
to see Villonco for the same reason until some in the event that the
exemplary damages plus attorneys fees to
agreement" was arrived at. On a subsequent sale is consummated;
respondent spouses and respondent SUNVAR.
AQUINO, J.: occasion, Cervantes, accompanied by Edith
But nominal damages are adjudicated to
Perez de Tagle, discussed again the terms of
vindicate or recognize the right of the plaintiff (3) That this sale is to
the sale with Villonco.
that has been violated or invaded by the This action was instituted by Villonco Realty be consummated only
defendant.19 In the instant case, the Court Company against Bormaheco, Inc. and the after I shall have also
recognizes the rights of all the parties and finds spouses Francisco N. Cervantes and Rosario During the negotiations, Villonco Realty consummated my
no violation or invasion of the rights of N. Cervantes for the specific performance of a Company assumed that the lots belonged to purchase of another
respondents by petitioner. Petitioner, in filing supposed contract for the sale of land and the Bormaheco, Inc. and that Cervantes was duly property located at Sta.
her complaint, only seeks relief, in good faith, improvements thereon for one million four authorized to sell the same. Cervantes did not Ana, Manila;
for what she believes she was entitled to and hundred thousand pesos. Edith Perez de disclose to the broker and to Villonco Realty
should not be awarded to respondents as they Tagle, as agent, intervened in order to recover Company that the lots were conjugal properties
(4) That if my
are imposed only by way of example or her commission. The lower court enforced the of himself and his wife and that they were
negotiations with said
correction for the public good and only in sale. Bormaheco, Inc. and the Cervantes mortgaged to the DBP.
property will not be
addition tothe moral, temperate, liquidated or spouses, as supposed vendors, appealed.
consummated by
compensatory damages.20 No such kinds of
Bormaheco, Inc., through Cervantes, made a reason beyond my
damages were awarded by the Court of
This Court took cognizance of the appeal written offer dated February 12, 1964, to control, I will return to
Appeals, only nominal, which was not justified
because the amount involved is more than Romeo Villonco for the sale of the property. you your deposit of
in this case. Finally, attorneys fees could not
also be recovered as the Court does not deem P200,000 and the appeal was perfected before The offer reads (Exh. B): P100,000 and the sale
Republic Act No. 5440 took effect on of my property to you
it just and equitable under the circumtances.
September 9, 1968. The facts are as follows: will not also be
BORMAHECO, INC.
consummated; and
WHEREFORE, the petition is DENIED. The
decision of the Court of Appeals ordering the Francisco N. Cervantes and his wife, Rosario
February 12,1964
P. Navarra-Cervantes, are the owners of lots 3, (5) That final
Register of Deeds of Makati City to lift the
15 and 16 located at 245 Buendia Avenue, negotiations on both
adverse claim and such other encumbrances
Makati, Rizal with a total area of three Mr. Romeo properties can be
petitioners Lourdes Ong Limson may have filed
thousand five hundred square meters (TCT Villonco Villonco Building definitely known after 45
or caused to be annotated on TCT No. S-
Nos. 43530, 43531 and 43532, Exh. A, A-1 and Buendia Avenue days.
75377 is AFFIRMED, with
the MODIFICATION that the award of nominal A-2). The lots were mortgaged to the Makati, Rizal.
and exemplary damages as well as attorneys Development Bank of the Phil (DBP) on April
If the above terms is (are)
fees is DELETED. 21, 1959 as security for a loan of P441,000.
Dear Mr. Villonco: acceptable to your Board,
The mortgage debt was fully paid on July 10,
please issue out the said
1969.
earnest money in favor of
SO ORDERED. This is with reference to Bormaheco, Inc., and
our telephone
Cervantes is the president of Bormaheco, Inc., deliver the same thru the
conversation this noon on
G.R. No. L-26872 July 25, 1975 a dealer and importer of industrial and bearer, Miss Edith Perez
the matter of the sale
agricultural machinery. The entire lots are de Tagle.
of our property located at
occupied by the building, machinery and
Buendia Avenue, with a
equipment of Bormaheco, Inc. and are
total area of 3,500 sq. m.,
The property mentioned in Bormaheco's letter property located at As regards to the other circumstance that "despite the lapse of 45 days
was the land of the National Shipyards & Steel Buendia Ave., Makati, conditions which we have from February 12, 1964 there is no certainty
Corporation (Nassco), with an area of twenty Rizal, with a total area of discussed during our last yet" for the acquisition of the Punta property
thousand square meters, located at Punta, Sta. 3,500 sq. meters., we conference on February (Exh. F; F-I and F-2). Villonco Realty Company
Ana, Manila. At the bidding held on January hereby revise our offer, as 27, 1964, the same shall refused to accept the letter and the checks of
17, 1964 that land was awarded to follows: be finalized upon Bormaheco, Inc. Cervantes sent them by
Bormaheco, Inc., the highest bidder, for the preparation of the contract registered mail. When he rescinded the
price of P552,000. The Nassco Board of to sell.* contract, he was already aware that the Punta
1. That the price of the
Directors in its resolution of February 18, 1964 lot had been awarded to Bormaheco, Inc. (25-
property shall be P400.00
authorized the General Manager to sign the 26 tsn).
per sq. m., including the If the above terms and
necessary contract (Exh. H).
improvements thereon; conditions are acceptable
to you, kindly sign your Edith Perez de Tagle, the broker, in a letter to
On February 28, 1964, the Nassco Acting conformity hereunder. Cervantes dated March 31, 1964 articulated
2. That a deposit of
General Manager wrote a letter to the Enclosed is our check for her shock and surprise at Bormaheco's
P100,000.00 shall be
Economic Coordinator, requesting approval of ONE HUNDRED turnabout. She reviewed the history of the deal
given to you as earnest
that resolution. The Acting Economic THOUSAND and explained why Romeo Villonco could not
money which will become
Coordinator approved the resolution on March (P100,000.00) PESOS, agree to the rescission of the sale (Exh. G).**
as part payment in the
24, 1964 (Exh. 1). MBTC Check No. 448314,
event the sale is
as earnest money.
consummated; Cervantes in his letter of April 6, 1964, a reply
In the meanwhile, Bormaheco, Inc. and to Miss Tagle's letter, alleged that the forty-five
Villonco Realty Company continued their Very truly yours, day period had already expired and the sale to
3. This sale shall be
negotiations for the sale of the Buendia Avenue Bormaheco, Inc. of the Punta property had not
cancelled, only if your deal
property. Cervantes and Teofilo Villonco had a been consummated. Cervantes said that his
with another property in CONFORME:
final conference on February 27, 1964. As a letter was a "manifestation that we are no
Sta. Ana shall not be
result of that conference Villonco Realty longer interested to sell" the Buendia Avenue
consummated and in such
Company, through Teofilo Villonco, in its letter BORMAHECO, INC. property to Villonco Realty Company (Annex I
case, the P100,000-00
of March 4, 1964 made a revised counter- offer (Sgd.) FRANCISCO of Stipulation of Facts). The latter was
earnest money will be
(Romeo Villonco's first counter-offer was dated CERVANTES furnished with a copy of that letter.
returned to us with a 10%
February 24, 1964, Exh. C) for the purchase of
interest p.a. However, if
the property. The counter-offer was accepted
our deal with you is That this sale shall be In a letter dated April 7, 1964 Villonco Realty
by Cervantes as shown in Exhibit D, which is
finalized, said subject to favorable Company returned the two checks to
quoted below:
P100,000.00 will become consummation of a Bormaheco, Inc., stating that the condition for
as part payment for the property in Sta. Ana we the cancellation of the contract had not arisen
VILLONCO REALTY purchase of your property are negotiating. and at the same time announcing that an
COMPANY without interest: action for breach of contract would be filed
V. R. C. Building against Bormaheco, Inc. (Annex G of
(Sgd.) FRANCISCO
219 Buendia Avenue, Stipulation of Facts).1wph1.t
4. The manner of payment CERVANTES
Makati,
shall be as follows:
Rizal, Philippines
On that same date, April 7, 1964 Villonco
The check for P100,000 (Exh. E) mentioned in Realty Company filed the complaint (dated
a. P100,000.00 earnest the foregoing letter-contract was delivered by
March 4, 1964 April 6) for specific performance against
money and Edith Perez de Tagle to Bormaheco, Inc. on Bormaheco, Inc. Also on that same date, April
650,000.00 as part of the March 4, 1964 and was received by Cervantes. 7, at eight-forty-five in the morning, a notice
Mr. Francisco Cervantes. down payment, or In the voucher-receipt evidencing the delivery of lis pendens was annotated on the titles of
Bormaheco, Inc. P750,000.00 as total down the broker indicated in her handwriting that the the said lots.
245 Buendia Avenue payment earnest money was "subject to the terms and
Makati, Rizal conditions embodied in Bormaheco's letter" of
February 12 and Villonco Realty Company's Bormaheco, Inc. in its answers dated May 5
b. The balance is payable
letter of March 4, 1964 (Exh. E-1; 14 tsn). and 25, 1964 pleaded the defense that the
Dear Mr. Cervantes: as follows:
perfection of the contract of sale was subject to
P100,000.00 after 3
the conditions (a) "that final acceptance or not
months Then, unexpectedly, in a letter dated March 30, shall be made after 45 days" (sic) and (b) that
In reference to the letter of
125,000.00 -do- 1964, or twenty-six days after the signing of
Miss E. Perez de Tagle Bormaheco, Inc. "acquires the Sta. Ana
212,500.00 -do- the contract of sale, Exhibit D, Cervantes
dated February 12th property".
P650,000.00 Total returned the earnest money, with interest
and 26, 1964 in respect to
amounting to P694.24 (at ten percent per
the terms and conditions
annum). Cervantes cited as an excuse the
on the purchase of your
On June 2, 1964 or during the pendency of this After trial, the lower court rendered a decision "Consent is manifested by the meeting of the What the record reveals is that the broker, Miss
case, the Nassco Acting General Manager ordering the Cervantes spouses to execute in offer and the acceptance upon the thing and Tagle, acted as intermediary between the
wrote to Bormaheco, Inc., advising it that the favor of Bormaheco, Inc. a deed of the cause which are to constitute the contract. parties. It is safe to assume that the alleged
Board of Directors and the Economic conveyance for the three lots in question and The offer must be certain and the acceptance changes or qualifications made by Cervantes
Coordinator had approved the sale of the directing Bormaheco, Inc. (a) to convey the absolute. A qualified acceptance constitutes a were approved by Villonco Realty Company
Punta lot to Bormaheco, Inc. and requesting same lots to Villonco Realty Company, (b) to counter-offer" (Art. 1319, Civil Code). "An and that such approval was duly
the latter to send its duly authorized pay the latter, as consequential damages, the acceptance may be express or implied" (Art. communicated to Cervantes or Bormaheco,
representative to the Nassco for the signing of sum of P10,000 monthly from March 24, 1964 1320, Civil Code). Inc. by the broker as shown by the fact that
the deed of sale (Exh. 1). up to the consummation of the sale, (c) to pay Villonco Realty Company paid, and
Edith Perez de Tagle the sum of P42,000 as Bormaheco, Inc. accepted, the sum of
Bormaheco's acceptance of Villonco Realty
broker's commission and (d) pay P20,000 as to P100,000 as earnest money or down payment.
The deed of sale for the Punta land was Company's offer to purchase the Buendia
attorney's fees (Civil Case No. 8109). That crucial fact implies that Cervantes was
executed on June 26, 1964. Bormaheco, Inc. Avenue property, as shown in Teofilo Villonco's
aware that Villonco Realty Company had
was represented by Cervantes (Exh. J. See letter dated March 4, 1964 (Exh. D),
accepted the modifications which he had made
Bormaheco, Inc. vs. Abanes, L-28087, July 31, Bormaheco, Inc. and the Cervantes spouses indubitably proves that there was a meeting of
in Villonco's counter-offer. Had Villonco Realty
1973, 52 SCRA 73). appealed. Their principal contentions are (a) minds upon the subject matter and
Company not assented to those insertions and
that no contract of sale was perfected because consideration of the sale. Therefore, on that
annotations, then it would have stopped
Cervantes made a supposedly qualified date the sale was perfected. (Compare with
In view of the disclosure in Bormaheco's payment on its check for P100,000. The fact
acceptance of the revised offer contained in McCullough vs. Aenlle & Co., 3 Phil. 285;
amended answer that the three lots were that Villonco Realty Company allowed its check
Exhibit D, which acceptance amounted to a Goyena vs. Tambunting, 1 Phil. 490). Not only
registered in the names of the Cervantes to be cashed by Bormaheco, Inc. signifies that
counter-offer, and because the condition that that Bormaheco's acceptance of the part
spouses and not in the name of Bormaheco, the company was in conformity with the
Bormaheco, inc. would acquire the Punta land payment of one hundred ,thousand pesos
Inc., Villonco Realty Company on July 21, 1964 changes made by Cervantes and that
within the forty-five-day period was not fulfilled; shows that the sale was conditionally
filed an amended complaint impleading the Bormaheco, Inc. was aware of that conformity.
(2) that Bormaheco, Inc. cannot be compelled consummated or partly executed subject to the
said spouses as defendants. Bormaheco, Inc. Had those insertions not been binding, then
to sell the land which belongs to the Cervantes purchase by Bormaheco, Inc. of the Punta
and the Cervantes spouses filed separate Bormaheco, Inc. would not have paid interest
spouses and (3) that Francisco N. Cervantes property. The nonconsummation of that
answers. at the rate of ten percent per annum, on the
did not bind the conjugal partnership and his purchase would be a negative resolutory
earnest money of P100,000.
wife when, as president of Bormaheco, Inc., he condition (Taylor vs. Uy Tieng Piao, 43 Phil.
As of January 15, 1965 Villonco Realty entered into negotiations with Villonco Realty 873).
Company had paid to the Manufacturers' Bank Company regarding the said land. The truth is that the alleged changes or
& Trust Company the sum of P8,712.25 as qualifications in the revised counter offer
On February 18, 1964 Bormaheco's bid for the
interests on the overdraft line of P100,000 and (Exh. D) are not material or are mere
We hold that the appeal, except as to the issue Punta property was already accepted by the
the sum of P27.39 as interests daily on the clarifications of what the parties had previously
of damages, is devoid of merit. Nassco which had authorized its General
same loan since January 16, 1965. (That agreed upon.
Manager to sign the corresponding deed of
overdraft line was later settled by Villonco
sale. What was necessary only was the
Realty Company on a date not mentioned in its "By the contract of sale one of the contracting
approval of the sale by the Economic Thus, Cervantes' alleged insertion in his
manifestation of February 19, 1975). parties obligates himself to transfer the
Coordinator and a request for that approval handwriting of the figure and the words "12th
ownership of and to deliver a determining
was already pending in the office of that and" in Villonco's counter-offer is the same as
thing, and the other to pay therefor a price
Villonco Realty Company had obligated itself to functionary on March 4, 1964. the statement found in the voucher-receipt for
certain in money or its equivalent. A contract of
pay the sum of P20,000 as attorney's fees to the earnest money, which reads: "subject to
sale may be absolute or conditional" (Art.
its lawyers. It claimed that it was damaged in the terms and conditions embodied in
1458, Civil Code). Bormaheco, Inc. and the Cervantes spouses
the sum of P10,000 a month from March 24, Bormaheco's letter of Feb. 12, 1964 and your
contend that the sale was not perfected
1964 when the award of the Punta lot to letter of March 4, 1964" (Exh. E-1).
because Cervantes allegedly qualified his
Bormaheco, Inc. was approved. On the other "The contract of sale is perfected at the
acceptance of Villonco's revised offer and,
hand, Bormaheco, Inc. claimed that it had moment there is a meeting of minds upon the
therefore, his acceptance amounted to a Cervantes allegedly crossed out the word
sustained damages of P200,000 annually due thing which is the object of the contract and
counter-offer which Villonco Realty Company "Nassco" in paragraph 3 of Villonco's revised
to the notice of lis pendens which had upon the price. From that moment, the parties
should accept but no such acceptance was counter-offer and substituted for it the word
prevented it from constructing a multi-story may reciprocally demand performance, subject
ever transmitted to Bormaheco, Inc. which, "another" so that the original phrase, "Nassco's
building on the three lots. (Pars. 18 and 19, to the provisions of the law governing the form
therefore, could withdraw its offer. property in Sta. Ana", was made to read as
Stipulation of Facts). of contracts" (Art. 1475, Ibid.).
"another property in Sta. Ana". That change is
1wph1.t

trivial. What Cervantes did was merely to


That contention is not well-taken. It should be
Miss Tagle testified that for her services "Contracts are perfected by mere consent, and adhere to the wording of paragraph 3 of
stressed that there is no evidence as to what
Bormaheco, Inc., through Cervantes, obligated from that moment the parties are bound not Bormaheco's original offer (Exh. B) which
changes were made by Cervantes in Villonco's
itself to pay her a three percent commission on only to the fulfillment of what has been mentions "another property located at Sta.
revised offer. And there is no evidence that
the price of P1,400,000 or the amount of forty- expressly stipulated but also to all the Ana." His obvious purpose was to avoid
Villonco Realty Company did not assent to the
two thousand pesos (14 tsn). consequences which, according to their nature, jeopardizing his negotiation with the Nassco for
supposed changes and that such assent was
may be in keeping with good faith, usage and the purchase of its Sta. Ana property by unduly
never made known to Cervantes.
law" (Art. 1315, Civil Code). publicizing it.
It is noteworthy that Cervantes, in his letter to Thus, it was held that the vendor's change in a The instant case is different from Laudico and acquire the Nassco property and it was not "a
the broker dated April 6, 1964 (Annex 1) or phrase of the offer to purchase, which change Harden vs. Arias Rodriguez, 43 Phil. 270 condition or a deadline set for the defendant
after the Nassco property had been awarded to does not essentially change the terms of the where the written offer to sell was revoked by corporation to decide whether or not to go
Bormaheco, Inc., alluded to the "Nassco offer, does not amount to a rejection of the the offer or before the offeree's acceptance through with the sale of its Buendia property".
property". At that time, there was no more need offer and the tender of a counter-offer (Stuart came to the offeror's knowledge.
of concealing from the public that Bormaheco, vs. Franklin Life Ins. Co., supra).
The record does not support the theory of
Inc. was interested in the Nassco property.
Appellants' next contention is that the contract Bormaheco, Inc. and the Cervantes spouses
The instant case is not governed by the rulings was not perfected because the condition that that the forty-five-day period was the time
Similarly, Cervantes' alleged insertion of the laid down in Beaumont vs. Prieto, 41 Phil. 670, Bormaheco, Inc. would acquire the Nassco within which (a) the Nassco property and two
letters "PA" ( per annum) after the word 985, 63 L. Ed. 770, and Zayco vs. Serra, 44 land within forty-five days from February 12, Pasong Tamo lots should be acquired, (b)
"interest" in that same paragraph 3 of the Phil. 326. In those two cases the acceptance 1964 or on or before March 28, 1964 was not when Cervantes would secure his wife's
revised counter-offer (Exh. D) could not be radically altered the offer and, consequently, fulfilled. This contention is tied up with the consent to the sale of the three lots and (c)
categorized as a major alteration of that there was no meeting of the minds of the following letter of Bormaheco, Inc. (Exh. F): when Bormaheco, Inc. had to decide what to
counter-offer that prevented a meeting of the parties. do with the DBP encumbrance.
minds of the parties. It was understood that the
BORMAHECO, INC.
parties had contemplated a rate of ten
Thus, in the Zayco case, Salvador Serra Cervantes in paragraph 3 of his offer of
percent per annum since ten percent a month
offered to sell to Lorenzo Zayco his sugar February 12, 1964 stated that the sale of the
or semi-annually would be usurious. March 30, 1964
central for P1,000,000 on condition that the Buendia lots would be consummated after he
price be paid in cash, or, if not paid in cash, the had consummated the purchase of the Nassco
Appellants Bormaheco, Inc. and Cervantes price would be payable within three years Villonco Realty Company property. Then, in paragraph 5 of the same
further contend that Cervantes, in clarifying in provided security is given for the payment of V.R.C. Building offer he stated "that final negotiations on both
the voucher for the earnest money of P100,000 the balance within three years with interest. 219 Buendia Ave., properties can be definitely known after forty-
that Bormaheco's acceptance thereof was Zayco, instead of unconditionally accepting Makati, Rizal five days" (See Exh. B).
subject to the terms and conditions embodied those terms, countered that he was going to
in Bormaheco's letter of February 12, 1964 and make a down payment of P100,000, that
Gentlemen: It is deducible from the tenor of those
your (Villonco's) letter of March 4, 1964" made Serra's mortgage obligation to the Philippine
statements that the consummation of the sale
Bormaheco's acceptance "qualified and National Bank of P600,000 could be
of the Buendia lots to Villonco Realty Company
conditional". transferred to Zayco's account and that he We are returning herewith was conditioned on Bormaheco's acquisition of
(plaintiff) would give a bond to secure the your earnest money the Nassco land. But it was not spelled out that
payment of the balance of the price. It was together with interest
That contention is not correct. There is no such acquisition should be effected within forty-
held that the acceptance was conditional or thereon at 10% per
incompatibility between Bormaheco's offer of five days from February 12, 1964. Had it been
was a counter-offer which had to be accepted annum. Please be
February 12, 1964 (Exh. B) and Villonco's Cervantes' intention that the forty-five days
by Serra. There was no such acceptance. informed that despite the
counter-offer of March 4, 1964 (Exh. D). The would be the period within which the Nassco
Serra revoked his offer. Hence, there was no lapse of the 45 days from land should be acquired by Bormaheco, then
revised counter-offer merely amplified
perfected contract. February 12, 1964 there is he would have specified that period in
Bormaheco's original offer.
no certainty yet for us to paragraph 3 of his offer so that paragraph
acquire a substitute
In the Beaumont case, Benito Valdes offered to would read in this wise: "That this sale is to be
The controlling fact is that there was property, hence the return consummated only after I shall have
sell to W Borck the Nagtahan Hacienda owned
agreement between the parties on the subject of the earnest money as
by Benito Legarda, who had empowered consummated my purchase of another
matter, the price and the mode of payment and agreed upon.
Valdes to sell it. Borck was given three months property located at Sta. Ana, Manila within
that part of the price was paid. "Whenever
from December 4, 1911 to buy the hacienda for forty-five days from the date hereof ." He could
earnest money is given in a contract of sale, it
P307,000. On January 17, 1912 Borck wrote to Very truly yours, have also specified that period in his
shall be considered as part of the price and as
Valdes, offering to purchase the hacienda for "conforme" to Villonco's counter-offer of March
proof of the perfection of the contract" (Art.
P307,000 payable on May 1, 1912. No reply 4, 1964 (Exh. D) so that instead of merely
1482, Civil Code). cl.: P.N.B. Check No.
was made to that letter. Borck wrote other stating "that this sale shall be subject to
letters modifying his proposal. Legarda refused 112994 J favorable consummation of a property in Sta.
to convey the property. P.N.B. Check No. 112996J Ana we are negotiating" he could have said:
"It is true that an acceptance may contain a
request for certain changes in the terms of the "That this sale shall be subject to favorable
offer and yet be a binding acceptance. 'So long
It was held that Borck's January 17th letter That contention is predicated on the erroneous consummation within forty-five days from
as it is clear that the meaning of the assumption that Bormaheco, Inc. was to February 12, 1964 of a property in Sta. Ana we
plainly departed from the terms of the offer as
acceptance is positively and unequivocally to acquire the Nassco land within forty-five days are negotiating".
to the time of payment and was a counter-offer
accept the offer, whether such request is or on or before March 28, 1964.
which amounted to a rejection of Valdes'
granted or not, a contract is formed.' " (Stuart
original offer. A subsequent unconditional No such specification was made. The term of
vs. Franklin Life Ins. Co., 165 Fed. 2nd 965,
acceptance could not revive that offer. The trial court ruled that the forty-five-day forty-five days was not a part of the condition
citing Sec. 79, Williston on Contracts).
period was merely an estimate or a forecast of that the Nassco property should be acquired. It
how long it would take Bormaheco, Inc. to is clear that the statement "that final
negotiations on both property can be definitely appellants, the Nassco property was conveyed Then, in paragraphs 3 and 4 of the offer, he also to negotiate with
known after 45 days" does not and cannot to Bormaheco, Inc. on June 26, 1964. As early used the first person and said: "I shall have the actual and registered
mean that Bormaheco, Inc. should acquire the as January 17, 1964 the property was awarded consummated my purchase" of the Nassco owner of the parcels of
Nassco property within forty-five days from to Bormaheco, Inc. as the highest bidder. On property; "... my negotiations with said land covered by T.C.T.
February 12, 1964 as pretended by Cervantes. February 18, 1964 the Nassco Board property" and "I will return to you your deposit". Nos. 43530, 43531 and
It is simply a surmise that after forty-five days authorized its General Manager to sell the Those expressions conveyed the impression 43532 in question which
(in fact when the forty-five day period should property to Bormaheco, Inc. (Exh. H). The and generated the belief that the Villoncos did plaintiff was fully aware
be computed is not clear) it would be known Economic Coordinator approved the award on not have to deal with Mrs. Cervantes nor with that the same were not in
whether Bormaheco, Inc. would be able to March 24, 1964. It is reasonable to assume any other official of Bormaheco, Inc. the name of the defendant
acquire the Nassco property and whether it that had Cervantes been more assiduous in (sic; Par. 18 of Answer to
would be able to sell the Buendia property. following up the transaction, the Nassco Amended Complaint, 10,
The pleadings disclose that Bormaheco, Inc.
That aforementioned paragraph 5 does not property could have been transferred to 18 and 34, Record on
and Cervantes deliberately and studiously
even specify how long after the forty-five days Bormaheco, Inc. on or before March 28, 1964, Appeal).
avoided making the allegation that Cervantes
the outcome of the final negotiations would be the supposed last day of the forty-five-day
was not authorized by his wife to sell the three
known. period.
lots or that he acted merely as president of In that affirmative defense, Bormaheco, Inc.
Bormaheco, Inc. That defense was not pretended that it needed forty- five days within
It is interesting to note that in paragraph 6 of The appellants, in their fifth assignment of interposed so as not to place Cervantes in the which to acquire the Nassco property and "to
Bormaheco's answer to the amended error, argue that Bormaheco, Inc. cannot be ridiculous position of having acted under false negotiate" with the registered owner of the
complaint, which answer was verified by required to sell the three lots in question pretenses when he negotiated with the three lots. The absurdity of that pretension
Cervantes, it was alleged that Cervantes because they are conjugal properties of the Villoncos for the sale of the three lots. stands out in bold relief when it is borne in
accepted Villonco's revised counter-offer of Cervantes spouses. They aver that Cervantes mind that the answers of Bormaheco, Inc. were
March 4, 1964 subject to the condition that "the in dealing with the Villonco brothers acted as verified by Cervantes and that the registered
Villonco Realty Company, in paragraph 2 of its
final negotiations (acceptance) will have to be president of Bormaheco, Inc. and not in his owner of the three lots is Cervantes himself.
original complaint, alleged that "on February
made by defendant within 45 daysfrom said individual capacity and, therefore, he did not That affirmative defense means that Cervantes
12, 1964, after some prior negotiations, the
acceptance" (31 Record on Appeal). If that bind the conjugal partnership nor Mrs. as president of Bormaheco, Inc. needed forty-
defendant (Bormaheco, Inc.) made a formal
were so, then the consummation of Cervantes who was allegedly opposed to the five days in order to "negotiate" with himself
offer to sell to the plaintiff the property of the
Bormaheco's purchase of the Nassco property sale. (Cervantes).
said defendant situated at the abovenamed
would be made within forty-five days from
address along Buendia Avenue, Makati, Rizal,
March 4, 1964.
Those arguments are not sustainable. It should under the terms of the letter-offer, a copy of The incongruous stance of the Cervantes
be remembered that Cervantes, in rescinding which is hereto attached as Annex A hereof", spouses is also patent in their answer to the
What makes Bormaheco's stand more the contract of sale and in returning the now Exhibit B (2 Record on Appeal). amended complaint. In that answer they
confusing and untenable is that in its three earnest money, cited as an excuse the disclaimed knowledge or information of certain
answers it invariably articulated the incoherent circumstance that there was no certainty in allegations which were well-known to
That paragraph 2 was not, repeat, was not
and vague affirmative defense that its Bormaheco's acquisition of the Nassco Cervantes as president of Bormaheco, Inc. and
denied by Bormaheco, Inc. in its answer dated
acceptance of Villonco's revised counter-offer property (Exh. F and Annex 1). He did not say which were admitted in Bormaheco's three
May 5, 1964. It did not traverse that paragraph
was conditioned on the circumstance "that final that Mrs. Cervantes was opposed to the sale of answers that were verified by Cervantes.
2. Hence, it was deemed admitted. However, it
acceptance or not shall be made after 45 days" the three lots. He did not tell Villonco Realty
filed an amended answer dated May 25, 1964
whatever that means. That affirmative defense Company that he could not bind the conjugal
wherein it denied that it was the owner of the It is significant to note that Bormaheco, Inc. in
is inconsistent with the other aforequoted partnership. In truth, he concealed the fact that
three lots. It revealed that the three lots its three answers, which were verified by
incoherent statement in its third answer that the three lots were registered "in the name of
"belong and are registered in the names of the Cervantes, never pleaded as an affirmative
"the final negotiations (acceptance) will have to FRANCISCO CERVANTES, Filipino, of legal
spouses Francisco N. Cervantes and Rosario defense that Mrs. Cervantes opposed the sale
be made by defendant within 45 days from age, married to Rosario P. Navarro, as owner
N. Cervantes." of the three lots or that she did not authorize
said acceptance" (31 Record on Appeal). 1wph1.t thereof in fee simple". He certainly led the
her husband to sell those lots. Likewise, it
Villonco brothers to believe that as president of
should be noted that in their separate answer
Bormaheco, Inc. he could dispose of the said The three answers of Bormaheco, Inc. contain
Thus, Bormaheco's three answers and the Cervantes spouses never pleaded as a
lots. He inveigled the Villoncos into believing the following affirmative defense:
paragraph 5 of his offer of February 12, 1964 defense that Mrs. Cervantes was opposed to
that he had untrammelled control of
do not sustain at all its theory that the Nassco the sale of three lots or that Cervantes could
Bormaheco, Inc., that Bormaheco, Inc. owned
property should be acquired on or before 13. That defendant's not bind the conjugal partnership. The
the lots and that he was invested with
March 28, 1964. Its rescission or revocation of insistence to finally decide appellants were at first hesitant to make it
adequate authority to sell the same.
its acceptance cannot be anchored on that on the proposed sale of appear that Cervantes had committed the
theory which, as articulated in its pleadings, is the land in question after skullduggery of trying to sell property which he
quite equivocal and unclear. Thus, in Bormaheco's offer of February 12, 45 days had not only for had no authority to alienate.
1964, Cervantes first identified the three lots as its purpose the
"our property" which "we are offering to sell ..." determination of its
It should be underscored that the condition that It was only during the trial on May 17, 1965
(Opening paragraph and par. 1 of Exh. B). acquisition of the said Sta.
Bormaheco, Inc. should acquire the Nassco that Cervantes declared on the witness stand
Whether the prounoun "we" refers to himself Ana (Nassco) property
property was fulfilled. As admitted by the that his wife was opposed to the sale of the
and his wife or to Bormaheco, Inc. is not clear. during the said period, but
three lots, a defense which, as already stated, award was based on paragraph 18 of the WHEREFORE, the trial court's decision is Antonio Sanz, Perkins and Kincaid and Emilio
was never interposed in the three answers of stipulation of facts wherein Villonco Realty modified as follows: I. Hilado for appellee Serra.
Bormaheco, Inc. and in the separate answer of Company "submits that the delay in the No appearance for the others appellees.
the Cervantes spouses. That same viewpoint consummation of the sale" has caused it to
1. Within ten (10) days from the date the
was adopted in defendants' motion for suffer the aforementioned damages.
defendants-appellants receive notice from the AVANCEA, J.:
reconsideration dated November 20, 1965.
clerk of the lower court that the records of this
The appellants contend that statement in the case have been received from this Court, the
On November 7, 1918, the plaintiff, Lorenzo
But that defense must have been an stipulation of facts simply means that Villonco spouses Francisco N. Cervantes and Rosario
Zayco, and the defendant, Salvador Serra,
afterthought or was evolved post litem Realty Company speculates that it has suffered P. Navarra-Cervantes should execute a deed
entered into a contract, the pertinent clauses of
motam since it was never disclosed in damages but it does not mean that the parties conveying to Bormaheco, Inc. their three lots
which are following:
Cervantes' letter of rescission and in his letter have agreed that Villonco Realty Company is covered by Transfer Certificate of Title Nos.
to Miss Tagle (Exh. F and Annex 1). Moreover, entitled to those damages. 43530, 43531 and 43532 of the Registry of
Mrs. Cervantes did not testify at the trial to Deeds of Rizal. 1. That the party of the first part shall
fortify that defense which had already been give the party of the second part an
Appellants' contention is correct. As rightly
waived for not having been pleaded (See sec. option to buy the Palma Centralfor
observed by their counsel, the damages in 2. Within five (5) days from the execution of
2, Rule 9, Rules of Court). the sum of one million pesos
question were not specifically pleaded and such deed of conveyance, Bormaheco, Inc.
(P1,000,000).
proven and were "clearly conjectural and should execute in favor of Villonco Realty
Taking into account the situation of Cervantes speculative". Company, V. R. C. Building, 219 Buendia
vis-a-vis Bormaheco, Inc. and his wife and the Avenue, Makati, Rizal a registerable deed of xxx xxx xxx
fact that the three lots were entirely occupied sale for the said three lots and all the
However, appellants' view in their seventh
by Bormaheco's building, machinery and improvements thereon, free from all lien and
assignment of error that the trial court erred in 4. That in the case the purchase of
equipment and were mortgaged to the DBP as encumbrances, at the price of four hundred
ordering Bormaheco, Inc. to pay Villonco the Palma Central is made and the
security for its obligation, and considering that pesos per square meter, deducting from the
Realty Company the sum of twenty thousand party of the second part cannot pay
appellants' vague affirmative defenses do not total purchase price the sum of P100,000
pesos as attorney's fees is not tenable. Under the whole price in cash, then he will
include Mrs. Cervantes' alleged opposition to previously paid by Villonco Realty Company to
the facts of the case, it is evident that be given a period not exceeding
the sale, the plea that Cervantes had no Bormaheco, Inc.
Bormaheco, Inc. acted in gross and evident three years within which to make the
authority to sell the lots strains the rivets of
bad faith in refusing to satisfy the valid and just full payment, computed from the day
credibility (Cf. Papa and Delgado vs.
demand of Villonco Realty Company for 3. Upon the execution of such deed of sale, of the execution of the contract of
Montenegro, 54 Phil. 331; Riobo vs.
specific performance. It compelled Villonco Villonco Realty Company is obligated to pay sale, provided that the party of the
Hontiveros, 21 Phil. 31).
Realty Company to incure expenses to protect Bormaheco, Inc. the balance of the price in the second part gives a security or bond
its interest. Moreover, this is a case where it is sum of one million three hundred thousand to the satisfaction of the party of the
"Obligations arising from contracts have the just and equitable that the plaintiff should pesos (P1,300,000). first part to guarantee the payment of
force of law between the contracting parties recover attorney's fees (Art. 2208, Civil Code). the balance of the purchase price,
and should be complied with in good faith" (Art. with interest thereon at a reasonable
4. Bormaheco, Inc. is ordered (a) to pay
1159, Civil Code). Inasmuch as the sale was rate.
The appellants in their eighth assignment of Villonco Realty Company twenty thousand
perfected and even partly executed,
error impugn the trial court's adjudication of pesos (P20,000) as attorney's fees and (b) to
Bormaheco, Inc., and the Cervantes spouses,
forty-two thousand pesos as three percent pay Edith Perez de Tagle the sum of forty-two xxx xxx xxx
as a matter of justice and good faith, are bound
broker's commission to Miss Tagle. They allege thousand pesos (P42,000) as commission.
to comply with their contractual commitments.
that there is no evidence that Bormaheco, Inc. Costs against the defendants-appellants.
6. That this option of the party of the
engaged her services as a broker in the
second part to purchase the Palma
Parenthetically, it may be observed that much projected sale of the three lots and the
SO ORDERED. Central, or to become a partner of, or
misunderstanding could have been avoided improvements thereon. That allegation is
join, the party of the first, expires on
had the broker and the buyer taken the trouble refuted by paragraph 3 of the stipulation of
the 30th of June, 1919.
of making some research in the Registry of facts and by the documentary evidence. It was G.R. No. L-18335 January 10, 1923
Deeds and availing themselves of the services stipulated that Miss Tagle intervened in the
of a competent lawyer in drafting the contract negotiations for the sale of the three lots. 7. That hereafter, in case of the sale
to sell. Cervantes in his original offer of February 12, LORENZO ZAYCO, DIONISIO INZA, and of the Palma Central, or the
1964 apprised Villonco Realty Company that SEVERINO LIZARRAGA, plaintiffs- formation of a partnership to operate
the earnest money should be delivered to Miss appellants, the same, the party of the second
Bormaheco, Inc. and the Cervantes spouses in vs.
Tagle, the bearer of the letter-offer. See also part shall have preference to make
their sixth assignment of error assail the trial SALVADOR SERRA, VENANCIO
Exhibit G and Annex I of the stipulation of such sale, or become a partner, over
court's award to Villonco Realty Company of CONCEPCION, and PHIL. C.
facts. any other persons desiring to
consequential damage amounting to ten WHITAKER, defendants-appellees. purchase the central or enter into
thousand pesos monthly from March 24, 1964
partnership.
(when the Economic Coordinator approved the We hold that the trial court did not err in
award of the Nassco property to Bormaheco, adjudging that Bormaheco, Inc. should pay A. P. Seva, Montinola, Montinola and
Inc.) up to the consummation of the sale. The Miss Tagle her three percent commission. Hontiveros and J. M. Arroyo for appellants.
Under date of June 28, 1919, the plaintiff, part of the price was to be in cash and what purchase the Palma Central and Estate until As has been stated, Zayco prays in this action
Lorenzo Zayco, through his attorney, wrote a part within a period not exceeding three years. June 30, 1919, and (b) have preference, after that Serra be compelled to sell to him
letter (Exhibit A) to the defendant, Salvador The court sustained this demurrer and granted that date, over any other purchaser making the the Palma Central in accordance with the
Serra, accepting the foregoing contract and the plaintiff a period within which to amend his same terms. contract to sell of November 7, 1918. It having
placing at his disposal a cash order of the complaint. been determined that there exists a
Bank of the Philippine Islands of Iloilo in the consideration for this contract, the same is
The court below holds that this contract of
amount of P100,000, in part payment of the binding upon the parties.
On January 23, 1920, the last amended November 7, 1918, has no consideration and
price of the Palma Central and Estate. In this
complaint was filed in which, for the first time, is, for this reason, null and void. This
letter, notice was also given to Serra that the
an allegation is made that subsequent to the conclusion, however, is not supported by the However, it is not necessary to view the
Philippine National Bank agreed to transfer his
contract of November 7, 1918, and prior to evidence. question from this standpoint. It can be taken
long term loan of P600,000, to the account of
June 28, 1919, a stipulation was made by the for granted, as contended by the defendants,
Zayco and to hold the latter responsible for all
plaintiff, Zayco, and the defendant, Serra, that that the option contract was not valid for lack of
the amounts had and received on account of It is true that the contract does not state any
the sum to be paid in cash on account of the consideration. But it was, at least, an offer to
this loan, Serra to be completely relieved from consideration on the part of Serra, but it is
total price of the sale was P100,000. sell, which was accepted by letter, and of this
all responsibility arising therefrom. Offer was presumed that there is a consideration in all
acceptance the offerer had knowledge before
further made in this letter to give the bond contracts (art. 1277, Civ. Code). Besides, a
said offer was withdrawn. The concurrence of
required by the contract of November 7, 1918, A demurrer was also interposed to this last consideration can be proved and, in this case,
both acts the offer and the acceptance
to secure the payment of the balance of the amended complaint, which was overruled. there is evidence showing its existence.
could at all events have generated a contract,
price of the Palma Central and Estate. The
if none there was before (arts. 1254 and 1262
letter ended with a demand by Zayco on Serra
The defendant filed his answer on February The Palma Central was in competition with the of the Civil Code).
to execute the deed of sale. Serra had
27, 1920, containing a general and specific Bearin Central of Lizarraga Hermanos and
knowledge of this letter on June 30, 1919, as
denial of all and each of the allegations of the both were doing their best to gain the greater
may be inferred from his answer bearing that However, Zayco's acceptance, as his letter of
complaint and a special defense consisting in number of supporters, which, as is well-known,
date (Exhibit C). On the following 15th of July, June 28, 1919, indicates, could not, in itself,
that the contract of November 7, 1918, did not constitutes the basis and measures of their
Serra wrote to Zayco's attorney, stating that the convert the offer of sale made by Serra in the
specify a sufficient consideration on the part of development. Zayco owned an estate
option contract of November 7, 1918, was document of November 7, 1918, into a perfect
the plaintiff Zayco. containing 350 hectares used for cultivating
cancelled and annulled. contract. In order for the acceptance to have
cane, situated between both centrals is such a
this effect, it must be plain and unconditional,
way as to constitute an opening to them from
On March 19, 1920, the plaintiff filed a and it will not be so if it involves any new
On the same day, June 30, 1919, Zayco the adjacent estates. Owing to this
supplemental complaint in which Philip proposal, for in that case it would not mean
brought suit against Serra to compel him to circumstance, Zayco has been the subject of
Whitaker, Venancio Concepcion, and Eusebio conformity with the offer, which is what gives
execute the deed of sale and conveyance of solicitations of both centrals, each making the
R. de Luzuriaga were included as defendants, rise to the generation of the contract. The letter
the Palma Central and Estate and to pay, in most favorable offers to win him. Lizarraga
and it was alleged that, without the knowledge of acceptance of Zayco lacks these requisites.
addition, P500,000 as damages. Hermanos went so far as to offer to remit his
of the plaintiff Zayco, the defendant Serra sold
debt, amounting to P40,000, if he became a
the Palma Central and Estate to said Messrs.
supporter of their central. Serra, in turn, offered
It should be noted that, according to the terms
It might be well to make a brief statement of Philip Whitaker, Venancio Concepcion, and
to give him 60 per cent of the sugar of his caneof the offer, in case the total of the agreed price
the proceedings had thereafter until the holding Eusebio R. de Luzuriaga on January 29, 1920,
milled in the Palma Central instead of 55 per of P1,000,000 could not be paid in cash, the
of the trial. for the sum of P1,500,000 on the terms and
cent, as allowed by the other centrals, and balance was to be paid within a period not
conditions specified in said contract. It is
besides, they promised to assist him in exceeding three years. This means that a part
prayed in this complaint that, at all events, the
To this complaint the defendant demurred on acquiring this central. Zayco, at last, decided to
of this price was to be paid in cash. But the
plaintiff Zayco be declared entitled to purchase
the ground, among others, that the contract of become, as he in fact became, a supporter of amount of this first payment was not
from the defendant, Serra, the Palma
November 7, 1918, does not specify the part of the Palma Central. determined. Consequently, when Zayco
Central and Estate on the same terms and
the price that was to be paid in cash and the accepted the offer, tendering the sum of
conditions as those of the sale to Messrs.
part that was to be paid within a period not P100,000 as first payment, his acceptance
Whitaker, Concepcion, and Luzuriaga. All this, which preceded and led to the
exceeding three years. involved a proposal, not contained in the offer,
execution of the contract of November 7, 1918,
that this precisely, and not any other, should be
is evidently a sufficient consideration to give
Later Mr. Eusebio R. de Luzuriaga was the amount of the first payment. This proposal,
Before the court could pass upon this life to the contract. It meant, on the part of
excluded from this complaint. The plaintiff in turn, required acceptance on the part of
demurrer, Zayco filed an amended complaint Zayco, the waiver of positive benefits which he
Zayco having assigned his rights to Dionisio Serra. For this reason, Zayco's acceptance did
on September 9, 1919, which was later would have obtained from Lizarraga
Inza and Severino Lizarraga, these parties not imply conformity with the offer of Serra, but
withdrawn, and substituted by another one Hermanos. It meant at the same time, on the
were admitted to intervene as plaintiffs. The only when the latter shall, in turn, have
dated October 21, 1919. part of Serra, an expansion of his central and
cause having been tried, the court below accepted his proposal that the amount to be
the consequent increase in his production and
rendered judgment absolving the defendants paid in cash was P100,000. Not only was this
profit. Under such circumstance Zayco's
To this amended complaint of October 21, from the complaint. not accepted by Serra, but Serra cancelled his
support to the Palma Central was a prestation
1919, another demurrer was filed, one of its offer on July 15, 1919.
of thing or service which positively benefited
grounds being the same as that alleged in the
By the terms of the contract of November 7, Serra.
first demurrer, to wit, that the contract of
1918, Zayco was granted the right: (a) To
November 7, 1918, does not stipulate what
An attempt was made to prove the allegation G.R. No. 74470 March 8, 1989 Residence Tax Certificate. Private respondent 1-2, CA Decision). The dispositive portion
contained in the last amended complaint to the Soriano's documents were processed and reads as follows:
effect that subsequent to the execution of the accordingly, he was given a quota of 2,640
NATIONAL GRAINS AUTHORITY and
contract November 7, 1918, Zayco and Serra cavans of palay. The quota noted in the
WILLLAM CABAL, petitioners WHEREFORE, the Court
agreed, as a suppletory stipulation, that the Farmer's Information Sheet represented the
vs. renders judgment in favor
amount of the first payment to be made in cash maximum number of cavans of palay that
THE INTERMEDIATE APPELLATE COURT of the plaintiff and against
should be P100,000. It is said that this Soriano may sell to the NFA.
and LEON SORIANO, respondents. the defendants National
stipulation is contained in a letter sent by Serra
Grains Authority, and
to Zayco. This letter, however, was not
In the afternoon of August 23, 1979 and on the William Cabal and hereby
introduced in evidence, but was alleged to Cordoba, Zapanta, Rola & Garcia for petitioner
following day, August 24, 1979, Soriano orders:
have been lost, and secondary evidence of its National Grains Authority.
delivered 630 cavans of palay. The palay
contents was presented which consisted in the
delivered during these two days were not
testimonies of Zayco, his son, Rafael, and 1. The National Grains
Plaridel Mar Israel for respondent Leon rebagged, classified and weighed. when
Antonio Velez. Upon examination of the Authority, now the National
Soriano. Soriano demanded payment of the 630 cavans
testimony of these witnesses, the same is Food Authority, its officers
of palay, he was informed that its payment will
found so uncertain and contradictory on many and agents, and Mr.
be held in abeyance since Mr. Cabal was still
points affecting their veracity as not to be William Cabal, the
investigating on an information he received
considered sufficient to prove either the loss of Provincial Manager of the
that Soriano was not a bona tide farmer and
the alleged letter, or its existence and contents. National Grains Authority
MEDIALDEA, J.: the palay delivered by him was not produced
Moreover, it is strange, if that stipulation ever at the time of the filing of
from his farmland but was taken from the
existed, that Zayco, in accepting the offer, not this case, assigned at
warehouse of a rice trader, Ben de Guzman.
only agreed to pay P100,000 in cash, but This is a petition for review of the decision (pp. On August 28, 1979, Cabal wrote Soriano Tuguegarao, Cagayan,
agreed also, as part of his acceptance, to 9-21, Rollo) of the Intermediate Appellate Court advising him to withdraw from the NFA whomsoever is his
assume Serra's obligations in connection with (now Court of Appeals) dated December 23, successors, to pay to the
warehouse the 630 cavans Soriano delivered
the credit of P600,000 given him by the 1985 in A.C. G.R. CV No. 03812 entitled, plaintiff Leon T. Soriano,
stating that NFA cannot legally accept the said
National Bank. It is stranger still that this "Leon Soriano, Plaintiff- Appellee versus the amount of P47,250.00,
delivery on the basis of the subsequent
stipulation, being so important a part of the National Grains Authority and William Cabal, representing the unpaid
certification of the BAEX technician, Napoleon
contract, was not alleged in the original Defendants Appellants", which affirmed the price of the palay
Callangan that Soriano is not a bona fide
complaint, and notwithstanding that in the decision of the Court of First Instance of deliveries made by the
farmer.
demurrer to this complaint attention was called Cagayan, in Civil Case No. 2754 and its plaintiff to the defendants
to the fact that this stipulation was lacking, this
resolution (p. 28, Rollo) dated April 17, 1986 consisting of 630 cavans
allegation was not made in the two successive which denied the Motion for Reconsideration Instead of withdrawing the 630 cavans of at the rate Pl.50 per kilo of
amended complaints but only in the fourth, filed therein. palay, private respondent Soriano insisted that 50 kilos per cavan of
after the court had sustained the demurrer filed the palay grains delivered be paid. He then palay;
on this ground. filed a complaint for specific performance
The antecedent facts of the instant case are as and/or collection of money with damages on
follows: 2. That the defendants
November 2, 1979, against the National Food
Our conclusion is that the acceptance made by National Grains Authority,
Authority and Mr. William Cabal, Provincial
Zayco of Serra's offer was not sufficient to give now National Food
Petitioner National Grains Authority (now Manager of NFA with the Court of First
life to a contract and is no ground for Authority, its officer and/or
National Food Authority, NFA for short) is a Instance of Tuguegarao, and docketed as Civil
compelling Serra to execute the sale offered. agents, and Mr. William
government agency created under Presidential Case No. 2754. Cabal, the Provincial
Decree No. 4. One of its incidental functions is Manager of the National
As to plaintiff's claim that they have preference the buying of palay grains from qualified
Meanwhile, by agreement of the parties and Grains Authority, at the
over the defendants, Messrs. Venancio farmers. upon order of the trial court, the 630 cavans of time of the filing of this
Concepcion and Phil. C. Whitaker in the
palay in question were withdrawn from the case assigned at
purchase of the Palma Central, two members
On August 23, 1979, private respondent Leon warehouse of NFA. An inventory was made by Tuguegarao, Cagayan or
of this court and the writer of this opinion
Soriano offered to sell palay grains to the NFA, the sheriff as representative of the Court, a whomsoever is his
believe that the plaintiffs are entitled to this
through William Cabal, the Provincial Manager representative of Soriano and a representative successors, are likewise
preference, but the majority of the court hold
otherwise, for the reason that the plaintiffs of NFA stationed at Tuguegarao, Cagayan. He of NFA (p. 13, Rollo). ordered to pay the plaintiff
submitted the documents required by the NFA Leon T. Soriano, the legal
have not formally offered to repay the
for pre-qualifying as a seller, namely: (1) interest at the rate of
defendant Concepcion and Whitaker incurred On September 30, 1982, the trial court
Farmer's Information Sheet accomplished by TWELVE (12%) percent
under the contract. rendered judgment ordering petitioner National
Soriano and certified by a Bureau of per annum, of the amount
Food Authority, its officers and agents to pay
Agricultural Extension (BAEX) technician, of P 47,250.00 from the
respondent Soriano (as plaintiff in Civil Case
For the foregoing reasons, the judgment Napoleon Callangan, (2) Xerox copies of four filing of the complaint on
No. 2754) the amount of P 47,250.00
appealed from is affirmed with the costs (4) tax declarations of the riceland leased to November 20, 1979, up to
representing the unpaid price of the 630
against the appellants. So ordered. him and copies of the lease contract between the final payment of the
cavans of palay plus legal interest thereof (p.
him and Judge Concepcion Salud, and (3) his price of P 47,250.00;
3. That the defendants Hence, this petition for review filed by the is established (Art. 1318, Civil Code of the contract and upon the
National Grains Authority, National Food Authority and Mr. William Cabal Philippines. price.
now National Food on May 15, 1986 assailing the decision of the
Authority, or their agents Intermediate Appellate Court on the sole issue
In the case at bar, Soriano initially offered to xxx
and duly authorized of whether or not there was a contract of sale
sell palay grains produced in his farmland to
representatives can now in the case at bar.
NFA. When the latter accepted the offer by
withdraw the total number The acceptance referred to which determines
noting in Soriano's Farmer's Information Sheet
of bags (630 bags with an consent is the acceptance of the offer of one
Petitioners contend that the 630 cavans of a quota of 2,640 cavans, there was already a
excess of 13 bags) now on party by the other and not of the goods
palay delivered by Soriano on August 23, 1979 meeting of the minds between the parties. The
deposit in the bonded delivered as contended by petitioners.
was made only for purposes of having it object of the contract, being the palay grains
warehouse of Eng. Ben de
offered for sale. Further, petitioners stated that produced in Soriano's farmland and the NFA
Guzman at Tuguegarao,
the procedure then prevailing in matters of was to pay the same depending upon its From the moment the contract of sale is
Cagayan pursuant to the
palay procurement from qualified farmers quality. The fact that the exact number of perfected, it is incumbent upon the parties to
order of this court, and as
were: firstly, there is a rebagging wherein the cavans of palay to be delivered has not been comply with their mutual obligations or "the
appearing in the written
palay is transferred from a private sack of a determined does not affect the perfection of the parties may reciprocally demand performance"
inventory dated October
farmer to the NFA sack; secondly, after the contract. Article 1349 of the New Civil Code thereof. (Article 1475, Civil Code, 2nd par.).
10, 1980, (Exhibit F for the
rebagging has been undertaken, classification provides: ". . .. The fact that the quantity is not
plaintiff and Exhibit 20 for
of the palay is made to determine its variety; determinate shall not be an obstacle to the
the defendants) upon The reason why NFA initially refused
thirdly, after the determination of its variety and existence of the contract, provided it is
payment of the price of P acceptance of the 630 cavans of palay
convinced that it passed the quality standard, possible to determine the same, without the
47,250.00 and TWELVE delivered by Soriano is that it (NFA) cannot
the same will be weighed to determine the need of a new contract between the parties." In
PERCENT (12%) legal legally accept the said delivery because
number of kilos; and finally, it will be piled this case, there was no need for NFA and
interest to the plaintiff, Soriano is allegedly not a bona fide farmer. The
inside the warehouse after the preparation of Soriano to enter into a new contract to
trial court and the appellate court found that
the Warehouse Stock Receipt (WSP) indicating determine the exact number of cavans of palay
Soriano was a bona fide farmer and therefore,
4. That the counterclaim of therein the number of kilos, the variety and the to be sold. Soriano can deliver so much of his
he was qualified to sell palay grains to NFA.
the defendants is hereby number of bags. Under this procedure, produce as long as it does not exceed 2,640
dismissed; rebagging is the initial operative act signifying cavans.
acceptance, and acceptance will be Both courts likewise agree that NFA's refusal to
considered complete only after the preparation accept was without just cause. The above
5. That there is no In its memorandum (pp. 66-71, Rollo) dated
of the Warehouse Stock Receipt (WSR). When factual findings which are supported by the
pronouncement as to the December 4, 1986, petitioners further contend
the 630 cavans of palay were brought by record should not be disturbed on appeal.
award of moral and that there was no contract of sale because of
Soriano to the Carig warehouse of NFA they
exemplary damages and the absence of an essential requisite in
were only offered for sale. Since the same
attorney's fees; and contracts, namely, consent. It cited Section ACCORDINGLY, the instant petition for review
were not rebagged, classified and weighed in
1319 of the Civil Code which states: "Consent is DISMISSED. The assailed decision of the
accordance with the palay procurement
is manifested by the meeting of the offer and then Intermediate Appellate Court (now Court
6. That there is no program of NFA, there was no acceptance of
the acceptance of the thing and the cause of Appeals) is affirmed. No costs.
pronouncement as to the offer which, to petitioners' mind is a clear
which are to constitute the contract. ... "
costs. case of solicitation or an unaccepted offer to
Following this line, petitioners contend that
sell. SO ORDERED.
there was no consent because there was no
SO ORDERED (pp. 9-10, acceptance of the 630 cavans of palay in
Rollo) The petition is not impressed with merit. question. G.R. No. L-11668 April 1, 1918

Petitioners' motion for reconsideration of the Article 1458 of the Civil Code of the Philippines The above contention of petitioner is not ANTONIO ENRIQUEZ DE LA
decision was denied on December 6, 1982. defines sale as a contract whereby one of the correct Sale is a consensual contract, " ... , CAVADA, plaintiff-appellee,
contracting parties obligates himself to transfer there is perfection when there is consent upon vs.
the ownership of and to deliver a determinate the subject matter and price, even if neither is ANTONIO DIAZ, defendant-appellant.
Petitioners' appealed the trial court's decision thing, and the other party to pay therefore a delivered." (Obana vs. C.A., L-36249, March
to the Intermediate Appellate Court. In a price certain in money or its equivalent. A 29, 1985, 135 SCRA 557, 560) This is provided
decision promulgated on December 23, 1986 Ramon Diokno for appellant.
contract, on the other hand, is a meeting of by Article 1475 of the Civil Code which states:
(pp. 9-21, Rollo) the then Intermediate Alfredo Chicote and Jose Arnaiz for appellee.
minds between two (2) persons whereby one
Appellate Court upheld the findings of the trial binds himself, with respect to the other, to give
court and affirmed the decision ordering NFA Art. 1475. The contract of
something or to render some service (Art.
and its officers to pay Soriano the price of the sale is perfected at the JOHNSON, J.:
1305, Civil Code of the Philippines). The
630 cavans of rice plus interest. Petitioners' moment there is a meeting
essential requisites of contracts are: (1)
motion for reconsideration of the appellate of minds upon the thing
consent of the contracting parties, (2) object This action was instituted by the plaintiff for the
court's decision was denied in a resolution which is the object of the
certain which is the subject matter of the purpose of requiring the defendant to comply
dated April 17, 1986 (p. 28, Rollo). with a certain "contract of option" to purchase a
contract, and (3) cause of the obligation which
certain piece or parcel of land described in said at Pitogo, Tayabas, January 16, (EXHIBIT B.) parcel as registered and a certificate of title
contract and for damages for a noncompliance 1912, and temporarily residing in was issued for each part under the Torrens
with said contract. After the close of the trial Manila, P. I., do hereby grant an system to the defendant herein. Later, and
the Honorable James A. Ostrand, judge, option to Antonio Enriquez to pretending to comply with the terms of said
rendered a judgment the dispositive part of purchase my hacienda at Pitogo P. I., November 15, 1912. contract, the defendant offered to transfer to
which is as follows: consisting of 100 and odd hectares, the plaintiff one of said parcels only, which was
within the period necessary for the Sr. Don ANTONIO DIAZ, a part of said "hacienda." The plaintiff refused
approval and issuance of a Torrens Calle Victoria, No. 125, W. C., to accept said certificate for a part only of said
Wherefore, it is hereby ordered and Manila, P. I.
title thereto by the Government for "hacienda" upon the ground (a) that it was only
adjudged that the defendant, within
which he may pay me either the sum a part of the "Hacienda de Pitogo," and (b)
the period of thirty days from the
of thirty thousand pesos (P30,000), DEAR SIR: I have the honor to under the contract (Exhibits A and B) he was
date upon which this decision
Philippine currency, in cash, or within inform you that, in conformity with entitled to a transfer to him all said "hacienda."
becomes final, convey to the plaintiff
the period of six (6) years, beginning the letter of option in my favor of
a good and sufficient title in fee
with the date of the purchase, the even date, I will buy your coconut
simple to the land described in The theory of the defendant is that the contract
sum of forty thousand pesos plantation in Pitogo, containing one
decrees Nos. 13909 and 13919 of of sale of said "Hacienda de Pitogo" included
(P40,000), Philippine currency, at six hundred hectares, together with all
the Court of Land Registration, upon only 100 hectares, more or less, of said
per cent interest per annum, with the coconut and nipa-palm trees
payment or legal tender of payment "hacienda," and that by offering to convey to
due security for the payment of the planted thereon, under the following
by said plaintiff of the sum of thirty the plaintiff a portion of said "hacienda"
said P40,000 in consideration of the conditions:
thousand pesos (P30,000) in cash, composed of "100 hectares, more or less," he
sale to him of my property described
and upon said plaintiff giving security thereby complied with the terms of the
as follows, to wit:
approved by this court for the 1. I shall send a surveyor to survey contract. The theory of the plaintiff is that he
payment within the term of 6 years the said property, and to apply to the had purchased all of said "hacienda," and that
from the date of the conveyance for About one hundred hectares of land Government for a Torrens title the same contained, at least, 100 hectares,
the additional sum of forty thousand in Pitogo, Tayabas, containing about therefore, and, if the expenses more or less. The lower court sustained the
pesos (P40,000) with interest at the 20,000 coconut trees and 10,000 incurred for the same should not contention of the plaintiff, to wit, that the sale
rate of 6 per cent per annum. nipa-palm trees, all belonging to me, exceed P1,000, I shall pay the P500 was a sale of the "Hacienda de Pitogo" and not
which I hereby sell to Antonio and you the other P500; Provided, a sale of a part of it, and rendered a judgment
Enriquez de la Cavada for seventy however, that you shall give the requiring the defendant to comply with the
It is further ordered and adjudged
thousand pesos, under the surveyor all necessary assistance terms of the contract by transferring to the
that in the event of the failure of the
conditions herein specified. during his stay at the hacienda. plaintiff, by proper deeds of conveyance, all
defendant to execute the
said "hacienda," or to pay in lieu thereof the
conveyance as aforesaid, the plaintiff
sum of P20,000 damages, together with 6 per
have and recover judgment against I declare that Antonio Enriquez is the 2. I shall pay the purchase price to cent interest from the date upon which said
him, the said defendant, for the sum sole person who has, and shall you in conformity with our letter of conveyance should have been made.
of twenty thousand pesos (P20,000), have, during the period of this option of this date, and after the
with interest at the rate of six per option, the right to purchase the Torrens title shall have been officially
cent (6 per cent per annum from the property above-mentioned. approved. After issue had been joined between the
date upon which the conveyance plaintiff and defendant upon their pleadings,
should have been made). It is so they entered into the following agreement with
I likewise declare that Antonio Yours respectfully,
ordered. reference to the method of presenting their
Enriquez shall be free to resell the
proof:
said property at whatever price he
From that judgment the defendant appealed may desire, provided that he should (Sgd.) A. ENRIQUEZ
and made several assignment of error. comply with the stipulations The attorneys for the parties in this
covenanted with me. I acknowledge receipt of, and case make the following stipulations:
It appears from the record that on the 15th day conform with, the foregoing.
of November, 1912, the defendant and the In witness of my entire conformity 1. Each of the litigating parties shall
plaintiff entered into the following "contract of with the foregoing, I hereunto affix (Sgd.) ANTONIO DIAZ present his evidence before Don
option:" my signature, in Manila, P. I., this Felipe Canillas, assistant clerk of the
15th day of November, 1912. Court of First Instance of Manila,
It appears from the record that soon after the who, for such purpose, should be
(EXHIBIT A.) execution of said contract, and in part appointed commissioner.
(Sgd.) Antonio Diaz. compliance with the terms thereof, the
CONTRACT OF OPTION. defendant presented two petitions in the Court
of Land Registration (Nos. 13909 and 13919), 2. Said commissioner shall set a day
Signed in the presence of:
each for the purpose of obtaining the and hour for the presentation of the
I, the undersigned, Antonio Diaz, of registration of a part of the "Hacienda de evidence above-mentioned, both oral
legal age, with personal registration (Sgd.) J. VALDS DIAZ. Pitogo." Said petitions were granted, and each and documentary, and in the
certificate Number F-855949, issued stenographic notes shall have record
entered of all objections made to the generally, the right to have their proof taken in contract it may be said (a) that the contract of their contract. The plaintiff stood ready to
evidence by either party, in order that
the presence of the judge, such right is a was for the sale of a definite parcel of land; (b)comply with his part of the contract. The
they may afterwards be decided by renounceable one. In a civil action the parties that it was reduced to writing; (c) that the defendant, even though he had obtained a
the court. litigant have a right to agree, outside of the defendant promised to convey to the plaintiff registered title to said parcel of land, refused to
court, upon the facts in litigation. Under certain said parcel of land; (d) that the plaintiff comply with his promise. All of the conditions of
conditions the parties litigant have a right to promised to pay therefor the sum of P70,000 in the contract on the part of the defendant had
3. The transcription of the
take the depositions of witnesses and submit the manner prescribed in said contract; (e) that been concluded, except delivering the deeds of
stenographic notes, containing the
the sworn statements in that form to the court. the defendant admitted the execution and transfer. Of course, if the defendant had been
record of the evidence taken, shall
The proof, as it was submitted to the court in delivery of the contract and alleged that he unable to obtain a registration of his title, or if
be paid for in equal shares by both
the present case, by virtue of said agreement, made an effort to comply with the same (par. 3 he had violated the terms of the alleged
parties.
was, in effect, in the form of a deposition of the of defendant's answer) and requested the optional contract by selling the same to some
various witnesses presented. Having agreed to plaintiff to comply with his part of the contract;other person than the plaintiff, then he might
4. At the close of the taking of the the method of taking the proof, and the same and (f) that no defense or pretension was have raised the objection that he had received
evidence, each of the parties shall having been taking in compliance with said made in the lower court that there was no nothing from the plaintiff for the option which
file his brief in respect to such agreement, it is now too late, there being no consideration for his contract. Having admitted he had conceded. That condition, of course,
evidence, whereupon the case as it law to the contrary, for them to deny and the execution and delivery of the contract, would have presented a different question from
then stands shall be submitted to the repudiate the effect of their agreement. (Biunas having admitted an attempt to comply with its the one which we have before us. The said
decision of the court. vs. Mora, R. G. No. 11464, March 11, 1918; terms, and having failed in the court below to contract (Exhibits A and B) was not, in fact, an
Behr vs. Levy Hermanos, R. G. No 12211, raise any question whatsoever concerning the "optional contract" as that phrase is generally
March 19, 1918.1) inadequacy of consideration, it is rather late, inused. Reading the said contract from its four
The parties request the court to the face of said admissions, to raise that corners it is clearly as absolute promise to sell
approve this agreement in the part question for the first time in this court. The only
a definite parcel of land for a fixed price upon
thereof which refers to the Not only is there no law prohibiting the parties
dispute between the parties in the lower court definite conditions. The defendant promised to
proceedings in this case. from entering into an agreement to submit their
was whether or not the defendant was obliged convey to the plaintiff the land in question as
proof to the court in civil actions as was done
to convey to the plaintiff all of said "hacienda."soon as the same was registered under the
in the present case, but it may be a method
Manila, P. I., December 21, 1914. The plaintiff insisted that his contract entitled Torrens system, and the plaintiff promised to
highly convenient, not only to the parties, but to
him to a conveyance of all of said "hacienda." pay to the defendant the sum of P70,000,
busy courts. The judgment of the lower court,
The defendant contended that he had under the conditions named, upon the
(Sgd.) ANTONIO V. HERRERO. therefore, should not be modified or reversed
complied with the terms of his contract by happening of that event. The contract was not,
(Sgd.) ALFREDO on account of the first assignment of error.
offering to convey to the plaintiff a part of the in fact, what is generally known as a "contract
CHICOTE. said "hacienda" only. That was the only of option." It differs very essentially from a
In the second assignment of error, the question presented to the lower court and that contract of option. An optional contract is a
appellant alleges (a) that the lower court was the only question decided. privilege existing in one person, for which he
Approved: committed an error in declaring the contract had paid a consideration, which gives him the
(Exhibits A and B) a valid obligation, for the right to buy, for example, certain merchandise
A promise made by one party, if made in
reason that it not been admitted in evidence, of certain specified property, from another
(Sgd.) GEO. R. HARVEY, accordance with the forms required by the law,
and (b) that the same was null for a failure of person, if he chooses, at any time within the
Judge. may be a good consideration (causa) for a
consideration. Upon the first question, an agreed period, at a fixed price. The contract of
promise made by another party. (Art. 1274,
examination of the proof shows that said option is a separate and distinct contract from
Civil Code.) In other words, the consideration
Said agreement was approved by the lower contract (Exhibits A and B) was offered in the contract which the parties may enter into
(causa) need not pass from one to the other at
court, and proof was taken in accordance evidence and admitted as proof without upon the consummation of the option. A
the time the contract is entered into. For
therewith. The defendant-appellant now objection. Said contract was, therefore, consideration for an optional contract is just as
example, A promises to sell a certain parcel of
alleges, giving several reasons therefor, that properly presented to the court as proof. Not important as the consideration for any other
land to B for the sum of P70,000. A, by virtue
the proof was improperly practiced, and that only was the contract before the court by kind of contract. If there was no consideration
of the promise of B to pay P70,000, promises
the judge was without authority o decide the reason of its having been presented in for the contract of option, then it cannot be
to sell said parcel of land to B for said sum,
cause upon proof taken in the manner agreed evidence, but the defendant himself made said then the contract is complete, provided they entered any more than any other contract
upon by the respective parties. The defendant- contract an integral part of his pleadings. The where no consideration exists. To illustrate, A
have complied with the forms required by the
appellant makes no contention that he was not defendant admitted the execution and delivery law. The consideration need not be paid at the offers B the sum of P100,000 for the option of
permitted to present all the proof he desired to of the contract, and alleged that he made an buying his property within the period of 30
time of the promise. The one promise is a
present. He makes no contention that he has effort to comply with its terms. His only defense days. While it is true that the conditions upon
consideration for the other. Of course, A cannot
been prejudiced in any manner whatsoever by is that he sold to the plaintiff a part of the which A promises to buy the property at the
enforce a compliance with the contract and
virtue of the method agreed upon for taking the "hacienda" only and that he offered, in end of the period mentioned are usually fixed
require B to pay said sum until he has
testimony. compliance with the terms of the contract, to in the option, the consideration for the option is
complied with his part of the contract. In the
convey to the plaintiff all of the land which he an entirely different consideration from the
present case, the defendant promised to
had promised to sell. consideration of the contract with reference to
There is nothing in the law nor in public policy convey the land in question to the plaintiff as
which the option exists. A contract of option is a
which prohibits the parties in a civil litigation soon as the same could be registered. The
contract by virtue of the terms of which the
from making the agreement above quoted. With reference to the second objection, to wit, plaintiff promised to pay to the defendant
parties thereto promise and obligate
While the law concedes to parties litigant, that there was no consideration for said P70,000 therefor in accordance with the terms
themselves to enter into contract at a future part of the contract immediately upon the In the seventh assignment of error the JOSE RAMON CARCELLER, petitioner,
time, upon the happening of certain events, or performance on the part of the defendant. appellant contends that the contract of sale vs.
the fulfillment of certain conditions. (Arts. 1258 and 1451 of Civil Code.) was not in effect a contract of sale. He alleges COURT OF APPEALS and STATE
that the contract was, in fact, a contract by INVESTMENT HOUSES, INC., respondents.
virtue of which the plaintiff promised to find a
Upon the other hand, suppose that the In the fifth assignment of error the appellant
buyer for the parcel of land in question; that the
defendant had complied with his part of the contends that the lower court committed an
plaintiff was not in fact the purchaser; that the
contract and had tendered the deeds of error in not declaring that the defendant was
only obligation that the plaintiff assumed was to
transfer of the "Hacienda de Pitogo" in not obligated to sell the "Hacienda de Pitogo"
find some third person who would purchase QUISUMBING, J.:
accordance with its terms and had demanded to the plaintiff "por incumplimiento, renuncia
the land from the defendant. Again, it would be
the payments specified in the contract, and the abandono y negligencia del mismo
sufficient to say, in answer to that assignment
plaintiff refused to comply what then would demandante, etc." (For nonfulfillment, Before us is a petition for review of the
of error, that no contention of that nature was
have been the rights of the defendant? Might renunciation, abandonment and negligence of Decision 1 2
presented in the court below, and for that dated September 21, 1995 of the Court of Appeals in CA G. R. CV No. 37520, as well as its

he not have successfully maintained an action plaintiff himself, etc.) That question was not Resolution
3
dated April 25, 1996, denying both parties' motion for partial reconsideration or clarification. The assailed
reason it is improperly presented now for the 4
for the specific performance of the contract, or presented to the court below. But even though decision affirmed with modification the judgment of the Regional Trial Court of Cebu City, Branch 5, in Civil Case No. CEB

first time. In addition, however, it may be added


4700, and disposed of the controversy as follows:

for the damages resulting from the breach of it had been the record shows that the plaintiff,
that the defendant, in his answer, admitted that
said contract? When the defendant alleged at all times, insisted upon a compliance with
he not only sold the land in question, but However, We do not find it
that he had complied with his part of the the terms of the contract on the part of the
offered to transfer the same to the plaintiff, in just that the appellee, in
contract (par. 3 of defendant's answer) and defendant, standing ready to comply with his
compliance with the contract. (See answer of exercising his option to
demanded that the plaintiff should immediately part of the same.
defendant.) buy, should pay appellant
comply with his part of the same, he evidently
SIHI only P1,800,000.00.
was laying the foundation for an action for
The appellant contends in his sixth assignment In fairness to appellant
damages, the nullification or a specific In the eighth assignment of error the appellant
of error that the plaintiff had not suffered the SIHI, the purchase price
compliance with the contract. contends that the lower court committed an
damages complained of, to wit, in the sum of must be based on the
error in its order requiring him to convey to the
P20,000. The only proof upon the question of prevailing market price of
plaintiff the "Hacienda de Pitogo," for the
The appellant contends that the contract which damages suffered by the plaintiff for the real property in Bulacao,
reason that the plaintiff had not demanded a
he made was not with the plaintiff but with noncompliance with the terms of the contract in Cebu City. (Emphasis
transfer of said property, and for the additional
Rosenstock, Elser and Co. That question was question on the part of the defendant is that supplied)
reason that a portion of said "hacienda" had
not presented in the court below. The contract the plaintiff, in contemplation of the compliance
already been sold to a third person. With
in question shows, upon its face, that the with the terms of the contract on the part of the
reference to the first contention, the record The factual background of this case is quite
defendant made the same with the plaintiff, Not defendant, entered into a contract with a third
clearly shows that the plaintiff was constantly simple.
having raised the question in the court below, party to sell the said "hacienda" at a profit of
insisting upon a compliance with the terms of
and having admitted the execution and delivery P30,000. That proof is not disputed. No
the contract, to wit, a conveyance to him of the
of the contract in question with the plaintiff, we attempt was made in the lower court to deny Private respondent State Investment Houses,
"Hacienda de Pitogo" by the defendant.
are of the opinion that his admission is that fact. The proof shows that the person with Inc. (SIHI) is the registered owner of two (2)
Naturally, he refused, under the contract, to
conclusive upon that question (par. 1 of special whom the plaintiff had entered into a parcels of land with a total area of 9,774
accept a conveyance of a part only of said
defense of defendant's answer) and need not conditional sale of the land in question had square meters, including all the improvements
"hacienda." With reference to the second
be further discussed. made a deposit for the purpose of thereon, located at Bulacao, Cebu City,
contention, it may be said that the mere fact
guaranteeing the final consummation of that covered by Transfer Certificate of Titles Nos. T-
that the defendant had sold a part of the
contract. By reason of the failure of the 89152 and T-89153 of the Registry of Deeds of
The appellant further contends that the action "hacienda" to other persons, is no sufficient
defendant to comply with the contract here in Cebu City.
was premature, for the reason that the plaintiff reason for not requiring a strict compliance
question, the plaintiff was obliged to return the
had not paid nor offered to pay the price with the terms of his contract with the plaintiff,
sum deposited by said third party with a
agreed upon, under the conditions named, for or to answer in damages for his failure. (Arts. On January 10, 1985, petitioner and SIHI
promise to pay damages. The record does not
the land in question. That question was not 1101 and 1252 of the Civil Code.) entered into a lease contract with option to
show why the plaintiff did not ask for damages
raised in the court below, which fact, ordinarily, purchase 5 over said two parcels of land, at a monthly rental of Ten Thousand (P10,000.00) pesos for a
in the sum of P30,000. He asked for a period of eighteen (18) months, beginning on August 1, 1984 until January 30, 1986. The pertinent portion of the lease
would be a sufficient answer to the contention contract subject of the dispute reads in part:

judgment only in the sum of P20,000. He now In view of the foregoing, and after a
of the appellant. It may be added, however,
asks that the judgment of the lower court be consideration of the facts and the law
that the defendant could not demand the 4. As part of the
modified and that he be given a judgment for applicable thereto, we are persuaded that
payment until he had offered the deeds of consideration of this
P30,000. Considering the fact that he neither there is no reason given in the record justifying
conveyance, in accordance with the terms of agreement, the LESSOR
asked for a judgment for more than P20,000 a modification or reversal of the judgment of
his contract. He did not offer to comply with the hereby grants unto the
nor appealed from the judgment of the lower the lower court. The same is, however, hereby
terms of his contract. True it is that he offered LESSEE the exclusive
court, his request now cannot be granted. We affirmed, with costs. So ordered.
to comply partially with the terms of the right, option and privilege
find no reason for modifying the judgment of
contract, but not fully. While the payment must to purchase, within the
the lower court by virtue of the sixth
be simultaneous with the delivery of the deeds G.R. No. 124791 February 10, 1999 lease period, the leased
assignment of error.
of conveyance, the payment need not be made premises thereon for the
until the deed of conveyance is offered. The aggregate amount of
plaintiff stood ready and willing to perform his
P1,800,000.00 payable as of the lease contract, alleging that he needs Deeds of Cebu City, in the alleged delay in giving the required notice
follows: ample time to raise sufficient funds in order to accordance with the lease to private respondent?
exercise the option. To support his request, contract executed on
petitioner averred that he had already made a January 10, 1984 between
a. Upon the signing of An option is a preparatory contract in which
substantial investment on the property, and the plaintiff and the
the Deed of Sale, the one party grants to the other, for a fixed period
had been punctual in paying his monthly defendant, but the
LESSEE shall and under specified conditions, the power to
rentals. 8 purchase price may be by
immediately pay decide, whether or not to enter into a principal
"one shot payment" of
P360,000.00. contract. It binds the party who has given the
P1,800,000.00; and the
On February 14, 1986, SIHI notified petitioner option, not to enter into the principal contract
defendant to pay
that his request was disapproved. with any other person during the period
b. The balance of attorney's fee of
Nevertheless, it offered to lease the same designated, and, within that period, to enter
P1,440,000.00 shall be P20,000.00.
property to petitioner at the rate of Thirty into such contract with the one to whom the
paid in equal
Thousand (P30,000.00) pesos a month, for a option was granted, if the latter should decide
installments of
period of one (1) year. It further informed the No damages awarded. 13 to use the option. 15 It is a separate agreement distinct from the contract which the parties may
P41,425.87 over sixty 16
petitioner of its decision to offer for sale said enter into upon the consummation of the option.

(60) consecutive
leased property to the general public. 9
months computed with Not satisfied with the judgment, SIHI elevated
interest at 24% per the case to the Court of Appeals by way of a Considering the circumstances in this case, we
annum on the On February 18, 1986, petitioner notified SIHI petition for review. find no reason to disturb the findings of
diminishing of his decision to exercise the option to respondent court, that petitioner's letter to SIHI,
balance; Provided, that purchase the property and at the same time he dated January 15, 1986, was fair notice to the
On September 21, 1995, respondent court latter of the former's intent to exercise the
the LESSEE shall made arrangements for the payment of the
rendered its decision, affirming the trial court's option, despite the request for the extension of
have the right to downpayment thereon in the amount of Three
judgment, but modified the basis for assessing the lease contract. As stated in said letter to
accelerate payments Hundred Sixty Thousand (P360,000.00)
the purchase price. While respondent court SIHI, petitioner was requesting for an
at anytime in which pesos. 10
affirmed appellee's option to buy the property, it extension (of the contract) for six months "to
event the stipulated
added that, "the purchase price must be based allow us to generate sufficient funds in order to
interest for the
On February 20, 1986, SIHI sent another letter on the prevailing market price of real property exercise our option to buy the subject
remaining installments
to petitioner, reiterating its previous stand on in Bulacao, Cebu City." 14 property".
shall no longer be 17 The analysis by the Court of Appeals of the evidence on record and the process by which it

the latter's offer, stressing that the period within arrived at its findings on the basis thereof, impel this Court's assent to said findings. They are consistent with the parties'

imposed. primary intent, as hereafter discussed, when they executed the lease contract. As respondent court ruled:

which the option should have been exercised


Baffled by the modification made by
had already lapsed. SIHI asked petitioner to
respondent court, both parties filed a motion We hold that the appellee
x . . The option shall be vacate the property within ten (10) days from
for reconsideration and/or clarification, with [herein petitioner] acted
exercised by a written notice, and to pay rental and penalty due. 11
petitioner, on one hand, praying that the with honesty and good
notice to the LESSOR at
prevailing market price be the value of the faith. Verily, We are in
anytime within the option
Hence, on February 28, 1986, a complaint for property in February 1986, the time when the accord with the trial court
period and the document
specific performance and damages 12 sale would have been consummated. SIHI, on that he should be allowed
of sale over the afore-
was filed by petitioner

to exercise his option to


against SIHI before the Regional Trial Court of Cebu City, to compel the latter to honor its commitment and execute the
corresponding deed of sale. the other hand, prayed that the market price of
described properties has
the property be based on the prevailing price purchase the lease
to be consummated within
After trial, the court a quo promulgated its index at least 10 years later, that is, 1996. property. In fact, SIHI will
the month immediately
decision dated April 1, 1991, the dispositive not be prejudiced. A
following the month when
contrary ruling, however,
the LESSEE exercised his portion of which reads: Respondent court conducted further hearing to
will definitely cause
option under this contract.6 clarify the matter, but no agreement was
damage to the appellee, it
In the light of the foregoing reached by the parties. Thus, on April 25, appearing that he has
considerations, the Court 1996, respondent court promulgated the
On January 7, 1986, or approximately three (3) introduced considerable
hereby renders judgment assailed resolution, which denied both parties'
weeks before the expiration of the lease improvements on the
in Civil Case No. CEB motions, and directed the trial court to conduct
contract, SIHI notified petitioner of the property and has borrowed
4700, ordering the further hearings to ascertain the prevailing
impending termination of the lease agreement, huge loan from the
defendant to execute a market value of real properties in Bulacao,
and of the short period of time left within which Technology Resources
deed of sale in favor of the Cebu City and fix the value of the property
he could still validly exercise the option. It Center. 17a

plaintiff, covering the subject of the controversy. 14


likewise requested petitioner to advise them of
a

his decision on the option, on or before parcels of land together


with all the improvements Hence, the instant petition for review. The contracting parties' primary intent in
January 20, 1986. 7
thereon, covered by entering into said lease contract with option to
Transfer Certificates of purchase confirms, in our view, the correctness
In a letter dated January 15, 1986, which was Title Nos. 89152 and The fundamental issue to be resolved is, of respondent court's ruling. Analysis and
received by SIHI on January 29, 1986, 89153 of the Registry of should petitioner be allowed to exercise the construction, however, should not be limited to
petitioner requested for a six-month extension option to purchase the leased property, despite the words used in the contract, as they may not
accurately reflect the parties' true intent. The letter dated February 18, 1986. In private In contractual relations, the law allows the dated April 6, 1993, in CA-G.R. CV No.
reasonableness of the result obtained, after respondent's view, there was already a delay parties reasonable leeway on the terms of their 34767 1 are (1) whether of not the "Exclusive Option to Purchase" executed between petitioner Adelfa Properties,
Inc. and private respondents Rosario Jimenez-Castaeda and Salud Jimenez is an option contract; and (2) whether or not
said analysis, ought likewise to be carefully of 18 days, fatal to petitioner's cause. But agreement, which is the law between them. 21 Note there was a valid suspension of payment of the purchase price by said petitioner, and the legal effects thereof on the
contractual relations of the parties.
that by contract SIHI had given petitioner 4 periods: (a) the option to purchase the property for P1,800,000.00 within the lease
considered. respondent court found the delay neither period, that is, until January 30, 1986; (b) the option to be exercised within the option period by written notice at anytime; (c)
the "document of sale . . . to be consummated within the month immediately following the month" when petitioner exercises

"substantial" nor "fundamental" and did not the option; and (d) the payment in equal installments of the purchase price over a period of 60 months. In our view, petitioner's
letter of January 15, 1986 and his formal exercise of the option on February 18, 1986 were within a reasonable time-frame

amount to a breach that would defeat the


consistent with periods given and the known intent of the parties to the agreement dated January 10, 1985. A contrary view
would be harsh and inequituous indeed. The records disclose the following antecedent
It is well-settled in both law and jurisprudence, facts which culminated in the present appellate
intention of the parties when they executed the
that contracts are the law between the review, to wit:
lease contract with option to purchase. 20
a In Tuason, Jr., etc. vs. De Asis,
contracting parties and should be fulfilled, if 22 this Court opined that "in a contract of
lease, if the lessor makes an offer to the lessee to purchase the property on or before the termination of the lease, and the
lessee fails to accept or make the purchase on time, the lessee losses the right to buy the property later on the terms and
their terms are clear and leave no room for conditions set in the offer." Thus, on one hand, petitioner herein could not insist on buying the said property based on the price

doubt as to the intention of the contracting In allowing petitioner to exercise the option,
agreed upon in the lease agreement, even if his option to purchase it is recognized. On the other hand, SIHI could not take
advantage of the situation to increase the selling price of said property by nearly 90% of the original price. Such leap in the
price quoted would show an opportunistic intent to exploit the situation as SIHI knew for a fact that petitioner badly needed the
1. Herein private respondents and their
parties. 18 Further, it is well-settled that in construing a written agreement, the reason behind and the however, both lower courts are in accord in
property for his business and that he could afford to pay such higher amount after having secured an P8 Million loan from the
TRC. If the courts were to allow SIHI to take advantage of the situation, the result would have been an injustice to petitioner, brothers, Jose and Dominador Jimenez, were
because SIHI would be unjustly enriched at his expense. Courts of law, being also courts of equity, may not countenance such
circumstances surrounding its execution are of paramount importance. Sound construction requires one to be placed mentally
in the situation occupied by the parties concerned at the time the writing was executed. Thereby, the intention of the their decision, rationalizing that a contrary
grossly unfair results without doing violence to its solemn obligation to administer fair and equal justice for all. the registered co-owners of a parcel of land
contracting parties could be made to prevail, because their agreement has the force of law between them. 19

ruling would definitely cause damage to the consisting of 17,710 square meters, covered
WHEREFORE, the appealed decision of
petitioner, as he had the whole place by Transfer Certificate of Title (TCT) No.
Moreover, to ascertain the intent of the parties respondent court, insofar as it affirms the
renovated to make the same suitable and 309773, 2 situated in Barrio Culasi, Las Pias, Metro Manila.

in a contractual relationship, it is imperative judgment of the trial court in granting petitioner


conducive for the business he established
that the various stipulations provided for in the the opportunity to exercise the option to
there. Moreover, judging from the subsequent 2. On July 28, 1988, Jose and Dominador
contract be construed together, consistent with purchase the subject property, is hereby
acts of the parties, it is undeniable that SIHI Jimenez sold their share consisting of one-half
the parties' contemporaneous and subsequent AFFIRMED. However the purchase price
really intended to dispose of said leased of said parcel of land, specifically the eastern
acts as regards the execution of the should be based on the fair market value of
property, which petitioner indubitably intended portion thereof, to herein petitioner pursuant to
contract. real property in Bulacao, Cebu City, as of
20 And once the intention of the parties has been ascertained, that element is deemed as an integral
to buy.
part of the contract as though it has been originally expressed in unequivocal terms. a "Kasulatan sa Bilihan ng Lupa." 3 Subsequently, a "Confirmatory

February 1986, when the contract would have 4


Extrajudicial Partition Agreement" was executed by the Jimenezes, wherein the eastern portion of the subject lot, with an

been consummated. Further, petitioner is


area of 8,855 square meters was adjudicated to Jose and Dominador Jimenez, while the western portion was allocated to
herein private respondents.

As sufficiently established during the trial, SIHI, SIHI's agreement to enter first into a lease hereby ordered to pay private respondent SIHI
prior to its negotiation with petitioner, was contract with option to purchase with herein legal interest on the said purchase price
already beset with financial problems. SIHI petitioner, is a clear proof of its intent to 3. Thereafter, herein petitioner expressed
beginning February 1986 up to the time it is interest in buying the western portion of the
was experiencing difficulty in meeting the promptly dispose said property although the actually paid, as well as the taxes due on said
claims of its creditors. Thus, in order to full financial returns may materialize only in a property from private respondents. Accordingly,
property, considering that petitioner have on November 25, 1989, an "Exclusive Option
reprogram the company's financial investment year's time. Furthermore, its letter dated enjoyed the beneficial use of said property. The
plan and facilitate its rehabilitation and viability, January 7, 1986, reminding the petitioner of to Purchase" 5 was executed between petitioner and private respondents, under the following terms and

case is hereby remanded to Regional Trial conditions:

SIHI, being a quasi-banking financial the short period of time left within which to Court of Cebu, Branch 5, for further
institution, had been placed under the consummate their agreement, clearly showed proceedings to determine promptly the fair 1. The selling price of said
supervision and control of the Central Bank its desire to sell that property. Also, SIHI's letter market value of said real property as of
8,655 square meters of the
(CB). It was in dire need of liquidating its dated February 14, 1986 supported the February 1986, in Bulacao, Cebu City. subject property is TWO
assets, so to speak, in order to stay afloat conclusion that it was bent on disposing said
MILLION EIGHT
financially. property. For this letter made mention of the
Costs against private respondent. HUNDRED FIFTY SIX
fact that, "said property is now for sale to the
THOUSAND ONE
general public".
Thus, SIHI was compelled to dispose some of HUNDRED FIFTY PESOS
its assets, among which is the subject leased SO ORDERED. ONLY (P2,856,150.00)
property, to generate sufficient funds to Petitioner's determination to purchase said
augment its badly-depleted financial resources. property is equally indubitable. He introduced
G.R. No. 111238 January 25, 1995 2. The sum of P50,000.00
This then brought about the execution of the permanent improvements on the leased
which we received from
lease contract with option to purchase between property, demonstrating his intent to acquire
ADELFA PROPERTIES,
SIHI and the petitioner. dominion in a year's time. To increase his ADELFA PROPERTIES, INC., petitioner, INC. as an option money
chances of acquiring the property, he secured vs.
shall be credited as partial
an P8 Million loan from the Technology COURT OF APPEALS, ROSARIO JIMENEZ-
The lease contract provided that to exercise payment upon the
Resources Center (TRC), thereby augmenting CASTAEDA and SALUD
the option, petitioner had to send a letter to consummation of the sale
his capital. He averred that he applied for a JIMENEZ, respondents.
SIHI, manifesting his intent to exercise said and the balance in the
loan since he planned to pay the purchase
option within the lease period ending January sum of TWO MILLION
price in one single payment, instead of paying
30, 1986. However, what petitioner did was to EIGHT HUNDRED SIX
in installment, which would entail the payment
request on January 15, 1986, for a six-month THOUSAND ONE
of additional interest at the rate of 24% per
extension of the lease contract, for the alleged HUNDRED FIFTY PESOS
annum, compared to 73/4% per annum interest REGALADO, J.:
purpose of raising funds intended to purchase (P2,806,150.00) to be paid
for the TRC loan. His letter earlier requesting
the property subject of the option. It was only on or before November 30,
extension was premised, in fact, on his need
after the request was denied on February 14, The main issues presented for resolution in 1989;
for time to secure the needed financing
1986, that petitioner notified SIHI of his desire this petition for review on certiorari of the
through a TRC loan.
to exercise the option formally. This was by judgment of respondent Court of appeals,
3. In case of default on the 6. On December 7, 1989, petitioner caused to
13. On appeal, respondent Court of appeals I
part of ADELFA be annotated on the title of the lot its option
affirmed in toto the decision of the court a
PROPERTIES, INC. to contract with private respondents, and its
quo and held that the failure of petitioner to pay
1. In view of the extended disquisition thereon
pay said balance in contract of sale with Jose and Dominador
the purchase price within the period agreed
by respondent court, it would be worthwhile at
accordance with Jimenez, as Entry No. 1437-4 and entry No.
upon was tantamount to an election by
this juncture to briefly discourse on the
paragraph 2 hereof, this 1438-4, respectively.
petitioner not to buy the property; that the
rationale behind our treatment of the alleged
option shall be cancelled suspension of payment constituted an
option contract as a contract to sell, rather than
and 50% of the option imposition of a condition which was actually a
7. On December 14, 1989, private respondents a contract of sale. The distinction between the
money to be forfeited in counter-offer amounting to a rejection of the
sent Francisca Jimenez to see Atty. Bernardo, two is important for in contract of sale, the title
our favor and we will option; and that Article 1590 of the Civil Code
in his capacity as petitioner's counsel, and to passes to the vendee upon the delivery of the
refund the remaining 50% on suspension of payments applies only to a
inform the latter that they were cancelling the thing sold; whereas in a contract to sell, by
of said money upon the contract of sale or a contract to sell, but not to
transaction. In turn, Atty. Bernardo offered to agreement the ownership is reserved in the
sale of said property to a an option contract which it opined was the
pay the purchase price provided that vendor and is not to pass until the full payment
third party; nature of the document subject of the case at
P500,000.00 be deducted therefrom for the of the price. In a contract of sale, the vendor
bar. Said appellate court similarly upheld the
settlement of the civil case. This was rejected has lost and cannot recover ownership until
validity of the deed of conditional sale
4. All expenses including by private respondents. On December 22, and unless the contract is resolved or
executed by private respondents in favor of
the corresponding capital 1989, Atty. Bernardo wrote private respondents rescinded; whereas in a contract to sell, title is
intervenor Emylene Chua.
gains tax, cost of on the same matter but this time reducing the retained by the vendor until the full payment of
documentary stamps are amount from P500,000.00 to P300,000.00, and the price, such payment being a positive
for the account of the this was also rejected by the latter. In the present petition, the following suspensive condition and failure of which is not
VENDORS, and expenses assignment of errors are raised: a breach but an event that prevents the
for the registration of the obligation of the vendor to convey title from
8. On February 23, 1990, the Regional Trial
deed of sale in the becoming effective. Thus, a deed of sale is
Court of Makati dismissed Civil Case No. 89- 1. Respondent court of appeals acted with
Registry of Deeds are for considered absolute in nature where there is
5541. Thus, on February 28, 1990, petitioner grave abuse of discretion in making its finding
the account of ADELFA neither a stipulation in the deed that title to the
caused to be annotated anew on TCT No. that the agreement entered into by petitioner
PROPERTIES, INC. property sold is reserved in the seller until the
309773 the exclusive option to purchase as and private respondents was strictly an option
full payment of the price, nor one giving the
Entry No. 4442-4. contract;
vendor the right to unilaterally resolve the
Considering, however, that the owner's copy of
contract the moment the buyer fails to pay
the certificate of title issued to respondent
9. On the same day, February 28, 1990, private 2. Granting arguendo that the agreement was within a fixed period. 15
Salud Jimenez had been lost, a petition for the
respondents executed a Deed of Conditional an option contract, respondent court of
re-issuance of a new owner's copy of said
Sale 10 Appeals acted with grave abuse of discretion in
certificate of title was filed in court through Atty. There are two features which convince us that
in favor of Emylene Chua over the same parcel of land for P3,029,250, of which P1,500,000.00 was paid to
private respondents on said date, with the balance to be paid upon the transfer of title to the specified one-half portion.
grievously failing to consider that while the
Bayani L. Bernardo, who acted as private the parties never intended to transfer
option period had not lapsed, private
respondents' counsel. Eventually, a new 10. On April 16, 1990, Atty. Bernardo wrote ownership to petitioner except upon the full
respondents could not unilaterally and
owner's copy of the certificate of title was private respondents informing the latter that in prematurely terminate the option period; payment of the purchase price. Firstly, the
issued but it remained in the possession of view of the dismissal of the case against them, exclusive option to purchase, although it
Atty. Bernardo until he turned it over to petitioner was willing to pay the purchase provided for automatic rescission of the
petitioner Adelfa Properties, Inc. price, and he requested that the corresponding 3. Respondent Court of Appeals acted with contract and partial forfeiture of the amount
deed of absolute sale be executed. 11 grave abuse of discretion in failing to This was ignored by private
already paid in case of default, does not
appreciate fully the attendant facts and
respondents. mention that petitioner is obliged to return
4. Before petitioner could make payment, it
circumstances when it made the conclusion of possession or ownership of the property as a
received summons 6
consequence of non-payment. There is no
on November 29, 1989, together with a copy of a complaint filed by the

11. On July 27, 1990, private respondents' law that Article 1590 does not apply; and
nephews and nieces of private respondents against the latter, Jose and Dominador Jimenez, and herein petitioner in the
Regional Trial Court of Makati, docketed as Civil Case No. 89-5541, for annulment of the deed of sale in favor of Household
7
counsel sent a letter to petitioner enclosing
Corporation and recovery of ownership of the property covered by TCT No. 309773. stipulation anent reversion or reconveyance of
therein a check for P25,000.00 representing the property to herein private respondents in
4. Respondent Court of Appeals acted with
the refund of fifty percent of the option money the event that petitioner does not comply with
5. As a consequence, in a letter dated grave abuse of discretion in conforming with its obligation. With the absence of such a
November 29, 1989, petitioner informed private paid under the exclusive option to purchase. the sale in favor of appellee Ma. Emylene
Private respondents then requested petitioner Chua and the award of damages and stipulation, although there is a provision on the
respondents that it would hold payment of the
to return the owner's duplicate copy of the remedies available to the parties in case of
full purchase price and suggested that private attorney's fees which are not only excessive, breach, it may legally be inferred that the
respondents settle the case with their nephews certificate of title of respondent Salud but also without in fact and in law. 14
Jimenez. 12 parties never intended to transfer ownership to
and nieces, adding that ". . . if possible, Petitioner failed to surrender the certificate of title, hence private respondents filed Civil Case No.
7532 in the Regional Trial Court of Pasay City, Branch 113, for annulment of contract with damages, praying, among others,
the petitioner to completion of payment of the
although November 30, 1989 is a holiday, we that the exclusive option to purchase be declared null and void; that defendant, herein petitioner, be ordered to return the

purchase price.
owner's duplicate certificate of title; and that the annotation of the option contract on TCT No. 309773 be cancelled. Emylene
An analysis of the facts obtaining in this case,
Chua, the subsequent purchaser of the lot, filed a complaint in intervention.
will be waiting for you and said plaintiffs at our
as well as the evidence presented by the
office up to 7:00 p.m." 8
Another letter of the same tenor and of even date was sent by

12. The trial court rendered judgment 13 parties, irresistibly leads to the conclusion that
9
petitioner to Jose and Dominador Jimenez. Respondent Salud Jimenez refused to heed the suggestion of petitioner and therein on September
In effect, there was an implied agreement that
attributed the suspension of payment of the purchase price to "lack of word of honor."
the agreement between the parties is a
5, 1991 holding that the agreement entered into by the parties was merely an option contract, and declaring that the
suspension of payment by herein petitioner constituted a counter-offer which, therefore, was tantamount to a rejection of the
option. It likewise ruled that herein petitioner could not validly suspend payment in favor of private respondents on the ground ownership shall not pass to the purchaser until
contract to sell, and not an option contract or a
that the vindicatory action filed by the latter's kin did not involve the western portion of the land covered by the contract
between petitioner and private respondents, but the eastern portion thereof which was the subject of the sale between
he had fully paid the price. Article 1478 of the
contract of sale. petitioner and the brothers Jose and Dominador Jimenez. The trial court then directed the cancellation of the exclusive option

civil code does not require that such a


to purchase, declared the sale to intervenor Emylene Chua as valid and binding, and ordered petitioner to pay damages and
attorney's fees to private respondents, with costs.
stipulation be expressly made. Consequently, itself a purchase, but merely secures the
transfer certificate of title be first reconstituted, case in order that it could already comply with
an implied stipulation to that effect is privilege to buy. 22
to which petitioner agreed. As a matter of fact, It is not a sale of property but a sale of property but a sale of the right to its obligation. In fact, it was even indicative of a
23
considered valid and, therefore, binding and it was petitioner's counsel, Atty. Bayani L.
purchase. It is simply a contract by which the owner of property agrees with another person that he shall have the right to
buy his property at a fixed price within a certain time. He does not sell his land; he does not then agree to sell it; but he does
desire by petitioner to immediately comply
enforceable between the parties. It should be 24
Bernardo, who assisted private respondents in
sell something, that it is, the right or privilege to buy at the election or option of the other party. Its distinguishing
characteristic is that it imposes no binding obligation on the person holding the option, aside from the consideration for the
therewith, except that it was being prevented
noted that under the law and jurisprudence, a filing a petition for reconstitution. After the title
offer. Until acceptance, it is not, properly speaking, a contract, and does not vest, transfer, or agree to transfer, any title to, or
any interest or right in the subject matter, but is merely a contract by which the owner of property gives the optionee the right from doing so because of the filing of the civil
25
contract which contains this kind of stipulation was reconstituted, the parties agreed that
or privilege of accepting the offer and buying the property on certain terms.
case which, it believed in good faith, rendered
is considered a contract to sell. petitioner would pay either in cash or compliance improbable at that time. In addition,
On the other hand, a contract, like a contract to manager's check the amount of P2,856,150.00 no inference can be drawn from that
sell, involves a meeting of minds two persons for the lot. Petitioner was supposed to pay the suggestion given by petitioner that it was totally
Moreover, that the parties really intended to
same on November 25, 1989, but it later abandoning the original contract.
execute a contract to sell, and not a contract of whereby one binds himself, with respect to the
other, to give something or to render some offered to make a down payment of
sale, is bolstered by the fact that the deed of
service. 26 27 P50,000.00, with the balance of P2,806,150.00
absolute sale would have been issued only Contracts, in general, are perfected by mere consent, which is manifested by the meeting of the
More importantly, it will be noted that the failure
to be paid on or before November 30, 1989.
offer and the acceptance upon the thing and the cause which are to constitute the contract. The offer must be certain and the

upon the payment of the balance of the 28


acceptance absolute. of petitioner to pay the balance of the purchase
Private respondents agreed to the counter-
purchase price, as may be gleaned from price within the agreed period was attributed by
offer made by petitioner. 31 As a result, the so-called exclusive option to purchase
petitioner's letter dated April 16, 1990 16
The distinction between an "option" and a wherein it informed was prepared by petitioner and was subsequently signed by private respondents, thereby creating a perfected contract to sell
between them.
private respondents to "lack of word of honor"
private respondents that it "is now ready and willing to pay you simultaneously with the execution of the corresponding deed of
absolute sale."
contract of sale is that an option is an on the part of the former. The reason of "lack of
unaccepted offer. It states the terms and word of honor" is to us a clear indication that
It cannot be gainsaid that the offer to buy a private respondents considered petitioner
Secondly, it has not been shown there was conditions on which the owner is willing to sell specific piece of land was definite and certain,
delivery of the property, actual or constructive, the land, if the holder elects to accept them already bound by its obligation to pay the
while the acceptance thereof was absolute and balance of the consideration. In effect, private
made to herein petitioner. The exclusive option within the time limited. If the holder does so
without any condition or qualification. The respondents were demanding or exacting
to purchase is not contained in a public elect, he must give notice to the other party, agreement as to the object, the price of the fulfillment of the obligation from herein
instrument the execution of which would have and the accepted offer thereupon becomes a property, and the terms of payment was clear petitioner. with the arrival of the period agreed
been considered equivalent to delivery. 17
valid and binding contract. If an acceptance is and well-defined. No other significance could
Neither did
petitioner take actual, physical possession of the property at any given time. It is true that after the reconstitution of private
not made within the time fixed, the owner is no be given to such acts that than they were
respondents' certificate of title, it remained in the possession of petitioner's counsel, Atty. Bayani L. Bernardo, who thereafter upon by the parties, petitioner was supposed
to comply with the obligation incumbent upon it
delivered the same to herein petitioner. Normally, under the law, such possession by the vendee is to be understood as a
18
delivery.
longer bound by his offer, and the option is at
However, private respondents explained that there was really no intention on their part to deliver the title to herein
meant to finalize and perfect the transaction.
petitioner with the purpose of transferring ownership to it. They claim that Atty. Bernardo had possession of the title only

an end. A contract of sale, on the other hand,


because he was their counsel in the petition for reconstitution. We have no reason not to believe this explanation of private to perform, not merely to exercise an option or
respondents, aside from the fact that such contention was never refuted or contradicted by petitioner.
The parties even went beyond the basic a right to buy the property.
fixes definitely the relative rights and requirements of the law by stipulating that "all
2. Irrefragably, the controverted document obligations of both parties at the time of its expenses including the corresponding capital
should legally be considered as a perfected execution. The offer and the acceptance are gains tax, cost of documentary stamps are for The obligation of petitioner on November 30,
contract to sell. On this particular point, concurrent, since the minds of the contracting the account of the vendors, and expenses for 1993 consisted of an obligation to give
therefore, we reject the position and parties meet in the terms of the agreement. 29
the registration of the deed of sale in the something, that is, the payment of the
ratiocination of respondent Court of Appeals Registry of Deeds are for the account of Adelfa purchase price. The contract did not simply
which, while awarding the correct relief to A perusal of the contract in this case, as well properties, Inc." Hence, there was nothing left give petitioner the discretion to pay for the
private respondents, categorized the as the oral and documentary evidence to be done except the performance of the property. 32 It will be noted that there is nothing in the said contract to show that petitioner was merely given a
certain period within which to exercise its privilege to buy. The agreed period was intended to give time to herein petitioner

instrument as "strictly an option contract." presented by the parties, readily shows that respective obligations of the parties. within which to fulfill and comply with its obligation, that is, to pay the balance of the purchase price. No evidence was
presented by private respondents to prove otherwise.

there is indeed a concurrence of petitioner's


The important task in contract interpretation is offer to buy and private respondents' We do not subscribe to private respondents' The test in determining whether a contract is a
always the ascertainment of the intention of the acceptance thereof. The rule is that except submission, which was upheld by both the trial "contract of sale or purchase" or a mere
contracting parties and that task is, of course, where a formal acceptance is so required, court and respondent court of appeals, that the "option" is whether or not the agreement could
to be discharged by looking to the words they although the acceptance must be affirmatively offer of petitioner to deduct P500,000.00, (later be specifically enforced. 33 There is no doubt that the obligation of petitioner to pay

used to project that intention in their contract, and clearly made and must be evidenced by reduced to P300,000.00) from the purchase
the purchase price is specific, definite and certain, and consequently binding and enforceable. Had private respondents
chosen to enforce the contract, they could have specifically compelled petitioner to pay the balance of P2,806,150.00. This is
distinctly made manifest in the contract itself as an integral stipulation, compliance with which could legally and definitely be

all the words not just a particular word or two, some acts or conduct communicated to the price for the settlement of the civil case was
demanded from petitioner as a consequence.

and words in context not words standing offeror, it may be made either in a formal or an tantamount to a counter-offer. It must be
alone. 19 informal manner, and may be shown by acts, stressed that there already existed a perfected
Moreover, judging from the subsequent acts of the parties which will hereinafter be discussed, it is This is not a case where no right is as yet
20 conduct, or words of the accepting party that
undeniable that the intention of the parties was to enter into a contract to sell. contract between the parties at the time the
In addition, the title of a contract does not created nor an obligation declared, as where
21
necessarily determine its true nature. clearly manifest a present intention or alleged counter-offer was made. Thus, any
Hence, the fact that the document under discussion is entitled "Exclusive Option to
Purchase" is not controlling where the text thereof shows that it is a contract to sell. something further remains to be done before
determination to accept the offer to buy or sell. new offer by a party becomes binding only the buyer and seller obligate themselves. 34 An

Thus, acceptance may be shown by the acts, when it is accepted by the other. In the case of
agreement is only an "option" when no obligation rests on the party to make any payment except such as may be agreed on
35
An option, as used in the law on sales, is a conduct, or words of a party recognizing the
between the parties as consideration to support the option until he has made up his mind within the time specified. An

private respondents, they actually refused to


option, and not a contract to purchase, is effected by an agreement to sell real estate for payments to be made within specified
time and providing forfeiture of money paid upon failure to make payment, where the purchaser does not agree to purchase, to
continuing offer or contract by which the owner existence of the contract of sale. 30 36
concur in said offer of petitioner, by reason of make payment, or to bind himself in any way other than the forfeiture of the payments made. As hereinbefore discussed,

stipulates with another that the latter shall have this is not the situation obtaining in the case at bar.

which the original terms of the contract


the right to buy the property at a fixed price
continued to be enforceable.
within a certain time, or under, or in compliance The records also show that private While there is jurisprudence to the effect that a
with, certain terms and conditions, or which respondents accepted the offer of petitioner to contract which provides that the initial payment
gives to the owner of the property the right to buy their property under the terms of their At any rate, the same cannot be considered a shall be totally forfeited in case of default in
sell or demand a sale. It is also sometimes contract. At the time petitioner made its offer, counter-offer for the simple reason that payment is to be considered as an option
called an "unaccepted offer." An option is not of private respondents suggested that their petitioner's sole purpose was to settle the civil contract, 37 still we are not inclined to conform with the findings of respondent court and the court a quo that
the contract executed between the parties is an option contract, for the reason that the parties were already contemplating
the payment of the balance of the purchase price, and were not merely quoting an agreed value for the property. The term
"balance," connotes a remainder or something remaining from the original total sum already agreed upon. fear such disturbance, by longer be compelled to sell and deliver the We are not unaware of the ruling in University
a vindicatory action or a subject property to petitioner for two reasons, of the Philippines vs. De los Angeles, etc. 50 that the
right to rescind is not absolute, being ever subject to scrutiny and review by the proper court. It is our considered view,

In other words, the alleged option money of foreclosure of mortgage, that is, petitioner's failure to duly effect the however, that this rule applies to a situation where the extrajudicial rescission is contested by the defaulting party. In other
words, resolution of reciprocal contracts may be made extrajudicially unless successfully impugned in court. If the debtor

P50,000.00 was actually earnest money which he may suspend the consignation of the purchase price after the impugns the declaration, it shall be subject to judicial determination
52
51
otherwise, if said party does not oppose it, the

was intended to form part of the purchase payment of the price until disturbance had ceased; and, secondarily, the extrajudicial rescission shall have legal effect.

price. The amount of P50,000.00 was not the vendor has caused the fact that the contract to sell had been validly
distinct from the cause or consideration for the disturbance or danger to rescinded by private respondents. In the case at bar, it has been shown that
sale of the property, but was itself a part cease, unless the latter although petitioner was duly furnished and did
gives security for the
thereof. It is a statutory rule that whenever The records of this case reveal that as early as receive a written notice of rescission which
earnest money is given in a contract of sale, it return of the price in a specified the grounds therefore, it failed to
February 28, 1990 when petitioner caused its
shall be considered as part of the price and as proper case, or it has been reply thereto or protest against it. Its silence
exclusive option to be annotated anew on the
proof of the perfection of the contract. 38 stipulated that, thereon suggests an admission of the veracity
It constitutes an
certificate of title, it already knew of the
notwithstanding any such
dismissal of civil Case No. 89-5541. However, and validity of private respondents'
advance payment and must, therefore, be deducted from the total price. Also, earnest money is given by the buyer to the
seller to bind the bargain.

contingency, the vendee claim. 53


it was only on April 16, 1990 that petitioner, Furthermore, the initiative of instituting suit was transferred from the rescinder to the defaulter by virtue of

shall be bound to make 54


the automatic rescission clause in the contract. But then, the records bear out the fact that aside from the lackadaisical
There are clear distinctions between earnest through its counsel, wrote private respondents manner with which petitioner treated private respondents' latter of cancellation, it utterly failed to seriously seek redress from
the payment. A mere act of the court for the enforcement of its alleged rights under the contract. If private respondents had not taken the initiative of filing

money and option money, viz.: (a) earnest expressing its willingness to pay the balance of Civil Case No. 7532, evidently petitioner had no intention to take any legal action to compel specific performance from the

trespass shall not


former. By such cavalier disregard, it has been effectively estopped from seeking the affirmative relief it now desires but which
it had theretofore disdained.

money is part of the purchase price, while the purchase price upon the execution of the
authorize the suspension
option money ids the money given as a distinct corresponding deed of absolute sale. At most,
of the payment of the
consideration for an option contract; (b) that was merely a notice to pay. There was no WHEREFORE, on the foregoing modificatory
price. premises, and considering that the same result
earnest money is given only where there is proper tender of payment nor consignation in
already a sale, while option money applies to a this case as required by law. has been reached by respondent Court of
sale not yet perfected; and (c) when earnest Respondent court refused to apply the Appeals with respect to the relief awarded to
money is given, the buyer is bound to pay the aforequoted provision of law on the erroneous private respondents by the court a quo which
The mere sending of a letter by the vendee we find to be correct, its assailed judgment in
balance, while when the would-be buyer gives assumption that the true agreement between
expressing the intention to CA-G.R. CV No. 34767 is hereby AFFIRMED.
option money, he is not required to buy. 39 the parties was a contract of option. As we
pay, without the accompanying payment, is not
have hereinbefore discussed, it was not an
considered a valid tender of payment. 43
option contract but a perfected contract to sell.
Besides, a mere

The aforequoted characteristics of earnest SO ORDERED.


tender of payment is not sufficient to compel private respondents to deliver the property and execute the deed of absolute
sale. It is consignation which is essential in order to extinguish petitioner's obligation to pay the balance of the purchase
Verily, therefore, Article 1590 would properly 44 45
money are apparent in the so-called option
price. The rule is different in case of an option contract or in legal redemption or in a sale with right to

apply. repurchase,
46
wherein consignation is not necessary because these cases involve an exercise of a right or privilege (to buy,

contract under review, even though it was redeem or repurchase) rather than the discharge of an obligation, hence tender of payment would be sufficient to preserve the

right or privilege. This is because the provisions on consignation are not applicable when there is no obligation to pay. A
47
G.R. No. L-25494 June 14, 1972
called "option money" by the parties. In contract to sell, as in the case before us, involves the performance of an obligation, not merely the exercise of a privilege of a
right. consequently, performance or payment may be effected not by tender of payment alone but by both tender and

addition, private respondents failed to show Both lower courts, however, are in accord that consignation.

that the payment of the balance of the since Civil Case No. 89-5541 filed against the NICOLAS SANCHEZ, plaintiff-appellee,
purchase price was only a condition precedent parties herein involved only the eastern half of Furthermore, petitioner no longer had the right vs.
to the acceptance of the offer or to the exercise the land subject of the deed of sale between to suspend payment after the disturbance SEVERINA RIGOS, defendant-appellant.
of the right to buy. On the contrary, it has been petitioner and the Jimenez brothers, it did not, ceased with the dismissal of the civil case filed
sufficiently established that such payment was therefore, have any adverse effect on private against it. Necessarily, therefore, its obligation
but an element of the performance of respondents' title and ownership over the to pay the balance again arose and resumed Santiago F. Bautista for plaintiff-appellee.
petitioner's obligation under the contract to western half of the land which is covered by after it received notice of such dismissal.
sell. 40 the contract subject of the present case. We Unfortunately, petitioner failed to seasonably Jesus G. Villamar for defendant-appellant.
have gone over the complaint for recovery of make payment, as in fact it has deposit the
ownership filed in said case 41 and we are not persuaded by the factual money with the trial court when this case was
II findings made by said courts. At a glance, it is easily discernible that, although the complaint prayed for the annulment only of
the contract of sale executed between petitioner and the Jimenez brothers, the same likewise prayed for the recovery of
therein plaintiffs' share in that parcel of land specifically covered by TCT No. 309773. In other words, the plaintiffs therein were
originally filed therein.
claiming to be co-owners of the entire parcel of land described in TCT No. 309773, and not only of a portion thereof nor, as
incorrectly interpreted by the lower courts, did their claim pertain exclusively to the eastern half adjudicated to the Jimenez
brothers.

1. This brings us to the second issue as to CONCEPCION, C.J.:


By reason of petitioner's failure to comply with p

whether or not there was valid suspension of


Such being the case, petitioner was justified in its obligation, private respondents elected to
payment of the purchase price by petitioner
suspending payment of the balance of the resort to and did announce the rescission of Appeal from a decision of the Court of First
and the legal consequences thereof. To justify
purchase price by reason of the aforesaid the contract through its letter to petitioner Instance of Nueva Ecija to the Court of
its failure to pay the purchase price within the
vindicatory action filed against it. The dated July 27, 1990. That written notice of Appeals, which certified the case to Us, upon
agreed period, petitioner invokes Article 1590
assurance made by private respondents that rescission is deemed sufficient under the the ground that it involves a question purely of
of the civil Code which provides:
petitioner did not have to worry about the case circumstances. Article 1592 of the Civil Code law.
because it was pure and simple harassment 42 is
which requires rescission either by judicial
Art. 1590. Should the not the kind of guaranty contemplated under the exceptive clause in Article 1590 wherein the vendor is bound to make
payment even with the existence of a vindicatory action if the vendee should give a security for the return of the price. action or notarial act is not applicable to a
vendee be disturbed in the contract to sell. 48 Furthermore, judicial action for rescission of a contract is not necessary where
The record shows that, on April 3, 1961,
possession or ownership the contract provides for automatic rescission in case of breach,
49
as in the contract involved in the present controversy. plaintiff Nicolas Sanchez and defendant
2. Be that as it may, and the validity of the Severina Rigos executed an instrument entitled
of the thing acquired, or
suspension of payment notwithstanding, we "Option to Purchase," whereby Mrs. Rigos
should he have
find and hold that private respondents may no "agreed, promised and committed ... to sell" to
reasonable grounds to
Sanchez the sum of P1,510.00, a parcel of In his complaint, plaintiff alleges that, by virtue joining in the petition for a judgment on the An accepted unilateral
land situated in the barrios of Abar and Sibot, of the option under consideration, "defendant pleadings, plaintiff has impliedly admitted the promise to buy or sell a
municipality of San Jose, province of Nueva agreed and committed to sell" and "the plaintiff truth of said averment in defendant's answer. determinate thing for a
Ecija, and more particularly described in agreed and committed to buy" the land Indeed as early as March 14, 1908, it had been price certain is binding
Transfer Certificate of Title No. NT-12528 of described in the option, copy of which was held, in Bauermann v. Casas, 3 that: upon the promisor if the
said province, within two (2) years from said annexed to said pleading as Annex A thereof promise is supported by
date with the understanding that said option and is quoted on the margin. 1 a consideration distinct
One who prays for
Hence, pla intiff maintains that the promise contained in the contract is "recip rocally demandable ," pursuant to the first paragraph of said Article

1479. Although defendant had really "agreed, promised and committed" herself to sell the land to the pla intiff, it is not true that the latter had, in turn, "agreed and committed himself " to buy said property. Said Annex A does not bear out plaintiff's alle gation to this effect. What is more, since Annex A has been made "an integral part" of his complain t, the provisions of said

shall be deemed "terminated and elapsed," if 2


from the price."
judgment on the pleadings
instrument form part "and parcel" of said pleading.

"Sanchez shall fail to exercise his right to buy


without offering proof as to
the property" within the stipulated period. The option did not impose upon plaintiff the truth of his own On the other hand,
Inasmuch as several tenders of payment of the the obligation to purchase defendant's allegations, and without Appellee contends that,
sum of Pl,510.00, made by Sanchez within property. Annex A is not a "contract to buy and giving the opposing party even granting that the
said period, were rejected by Mrs. Rigos, on sell." It merely granted plaintiff an "option" to an opportunity to introduce "offer of option" is not
March 12, 1963, the former deposited said buy. And both parties so understood it, as evidence, must be supported by any
amount with the Court of First Instance of indicated by the caption, "Option to Purchase," understood to admit the consideration, that option
Nueva Ecija and commenced against the latter given by them to said instrument. Under the truth of all the material and became binding on
the present action, for specific performance provisions thereof, the defendant "agreed, relevant allegations of the appellant when the
and damages. promised and committed" herself to sell the opposing party, and to rest appellee gave notice to it
land therein described to the plaintiff for his motion for judgment on of its acceptance, and that
After the filing of defendant's answer P1,510.00, but there is nothing in the contract those allegations taken having accepted it within
admitting some allegations of the complaint, to indicate that her aforementioned agreement, together with such of his the period of option, the
denying other allegations thereof, and alleging, promise and undertaking is supported by a own as are admitted in the offer can no longer be
as special defense, that the contract between consideration "distinct from the price" pleadings. (La Yebana withdrawn and in any
the parties "is a unilateral promise to sell, and stipulated for the sale of the land. Company vs. Sevilla, 9 event such withdrawal is
the same being unsupported by any valuable Phil. 210). (Emphasis ineffective. In support this
consideration, by force of the New Civil Code, Relying upon Article 1354 of our Civil Code, supplied.) contention, appellee
is null and void" on February 11, 1964, both the lower court presumed the existence of said invokes article 1324 of the
parties, assisted by their respective counsel, consideration, and this would seem to be the Civil Code which provides:
This view was reiterated in Evangelista v. De la
jointly moved for a judgment on the pleadings. main factor that influenced its decision in
Rosa 4 5
Accordingly, on February 28, 1964, the lower
and Mercy's Incorporated v. Herminia Verde.

plaintiff's favor. It should be noted, however, "ART. 1324. When the


court rendered judgment for Sanchez, ordering that:
offerer has allowed the
Mrs. Rigos to accept the sum judicially Squarely in point is Southwestern Sugar &
offeree a certain period
consigned by him and to execute, in his favor, Molasses Co. v. Atlantic Gulf & Pacific Co., 6
to accept, the offer may
from which We quote:

the requisite deed of conveyance. Mrs. Rigos (1) Article 1354 applies to contracts in general,
whereas the second paragraph of Article 1479 be withdrawn any time
was, likewise, sentenced to pay P200.00, as
refers to "sales" in particular, and, more The main contention of before acceptance by
attorney's fees, and other costs. Hence, this
specifically, to "an accepted unilateral promise appellant is that the option communicating such
appeal by Mrs. Rigos.
to buy or to sell." In other words, Article 1479 is granted to appellee to sell withdrawal, except
controlling in the case at bar. to it barge No. 10 for the when the option is
This case admittedly hinges on the proper sum of P30,000 under the founded upon
application of Article 1479 of our Civil Code, terms stated above has no consideration as
which provides: (2) In order that said unilateral promise may be legal effect because it is something paid or
"binding upon the promisor, Article 1479 not supported by any promised."
requires the concurrence of a condition, consideration and in
ART. 1479. A promise to namely, that the promise be "supported by a support thereof it invokes
buy and sell a determinate consideration distinct from the price." There is no question that
article 1479 of the new
thing for a price certain is Accordingly, the promisee can not compel the under article 1479 of the
Civil Code. The article
reciprocally demandable. promisor to comply with the promise, unless new Civil Code "an option
provides:
the former establishes the existence of said to sell," or "a promise to
distinct consideration. In other words, buy or to sell," as used in
An accepted unilateral
"ART. 1479. A promise said article, to be valid
promise to buy or to sell a the promisee has the burden of proving such
consideration. Plaintiff herein has not even to buy and sell a must be "supported by a
determinate thing for a
alleged the existence thereof in his complaint. determinate thing for a consideration distinct from
price certain is binding
price certain is the price." This is clearly
upon the promissor if the
reciprocally inferred from the context of
promise is supported by a (3) Upon the other hand, defendant explicitly
demandable. said article that a unilateral
consideration distinct from averred in her answer, and pleaded as a
promise to buy or to
the price. special defense, the absence of said sell, even if accepted, is
consideration for her promise to sell and, by only binding if supported
by consideration. In other contained in our new Civil option which is not binding general principles on contracts and 1479
words, "an accepted Code. But we are for lack of consideration, on sales of the Civil Code, in line with the
unilateral promise can only prevented from applying the authorities hold that: cardinal rule of statutory construction that, in
have a binding effect if them in view of the construing different provisions of one and the
supported by a specific provision same law or code, such interpretation should
"If the option is given
consideration which embodied in article 1479. be favored as will reconcile or harmonize said
without a consideration, it
means that the option can While under the "offer of provisions and avoid a conflict between the
is a mere offer of a
still be withdrawn, even if option" in question same. Indeed, the presumption is that, in the
contract of sale, which is
accepted, if the same is appellant has assumed a process of drafting the Code, its author has
not binding until
not supported by any clear obligation to sell its maintained a consistent philosophy or position.
accepted. If, however,
consideration. It is not barge to appellee and the Moreover, the decision in Southwestern Sugar
acceptance is made
disputed that the option is option has been exercised & Molasses Co. v. Atlantic Gulf & Pacific
before a withdrawal, it
without consideration. It in accordance with its Co., 10
constitutes a binding
holding that Art. 1324 is modified by Art. 1479 of the Civil Code, in effect, considers the latter as an exception to the former, and exceptions are not favored, unless the intention to the contrary is clear, and it is not so, insofar as said two (2) articles are concerned. What is more, the reference, in both the second paragraph of Art.

1479 and Art. 1324, to an option or promise supported by or founded upon a consideration, strongly suggests that the two (2) provisions intended to enforce or implement the same principle.

can therefore be terms, and there appears


contract of sale, even
withdrawn notwithstanding to be no valid or justifiable
though the option was Upon mature deliberation, the Court is of the
the acceptance of it by reason for appellant to
not supported by a considered opinion that it should, as it hereby
appellee. withdraw its offer, this
sufficient reiterates the doctrine laid down in the Atkins,
Court cannot adopt a
consideration. ... . (77 Kroll & Co. case, and that, insofar as
different attitude because
It is true that under article Corpus Juris Secundum, inconsistent therewith, the view adhered to in
the law on the matter is
1324 of the new Civil p. 652. See also 27 the Southwestern Sugar & Molasses Co. case
clear. Our imperative duty
Code, the general rule Ruling Case Law 339 should be deemed abandoned or modified.
is to apply it unless
regarding offer and and cases cited.)
modified by Congress.
acceptance is that, when
the offerer gives to the WHEREFORE, the decision appealed from is
"It can be taken for hereby affirmed, with costs against defendant-
offeree a certain period to However, this Court itself, in the case of Atkins,
granted, as contended by appellant Severina Rigos. It is so ordered.
accept, "the offer may be Kroll and Co., Inc. v. Cua Hian Tek, 8
the defendant, that the
decided later that Southwestern Sugar & Mola sses Co. v. Atlantic Gulf & Pacific

9
withdrawn at any time Co., saw no distinction between Articles 1324 and 1479 of the Civil Code and applied the former where a unila teral promise to sell similar to the one sued upon here was involved, treating such promise as an option which, although not binding as a contract in itself for lack of a separate consid eration, neverthele ss generated a bilateral contract of purchase and sale upon

option contract was not


acceptance. Speaking through Associate Justice, la ter Chief Justice, Cesar Bengzon, this Court said:

before acceptance" except


valid for lack of G.R. No. L-32873 August 18, 1972
when the option is Furthermore, an option consideration. But it was,
founded upon is unilateral: a promise to at least, an offer to sell,
consideration, but this AQUILINO NIETES, petitioner,
sell at the price fixed which was accepted by
general rule must be vs.
whenever the offeree letter, and of the
interpreted as modified by HON. COURT OF APPEALS & DR. PABLO C.
should decide to exercise acceptance the offerer
the provision of article GARCIA, respondents.
his option within the had knowledge before
1479 above referred to, specified time. After said offer was withdrawn.
which applies to "a accepting the promise The concurrence of both Conrado V. del Rosario for petitioner.
promise to buy and and before he exercises acts the offer and the
sell" specifically. As his option, the holder of acceptance could at
already stated, this rule the option is not bound to Romeo D. Magat for private respondent.
all events have
requires that a promise to buy. He is free either to generated a contract, if
sell to be valid must be buy or not to buy later. In none there was before
supported by a this case, however, upon (arts. 1254 and 1262 of
consideration distinct from accepting herein the Civil Code)." (Zayco
the price. petitioner's offer a bilateral CONCEPCION, C.J.:
vs. Serra, 44 Phil. 331.)
p

promise to sell and to buy


We are not oblivious of the ensued, and the Petitioner Aquilino Nietes seeks a review
respondent ipso In other words, since there may be no valid
existence of American on certiorari of a decision of the Court of
facto assumed the contract without a cause or consideration, the
authorities which hold that Appeals.
obligation of a purchaser. promisor is not bound by his promise and may,
an offer, once accepted,
He did not just get the accordingly, withdraw it. Pending notice of its
cannot be withdrawn,
right subsequently to buy withdrawal, his accepted promise partakes, It appears that, on October 19, 1959, said
regardless of whether it is
or not to buy. It was not a however, of the nature of an offer to sell which, petitioner and respondent Dr. Pablo C. Garcia
supported or not by a
mere option then; it was a if accepted, results in a perfected contract of entered into a "Contract of Lease with Option
consideration (12 Am. Jur.
bilateral contract of sale. sale. to Buy," pursuant to the terms and conditions
528). These authorities,
we note, uphold set forth in the deed Exhibits A and A-1, (also,
the general rule applicable marked as Exhibit 2) namely:
Lastly, even supposing This view has the advantage of avoiding a
to offer and acceptance as that Exh. A granted an conflict between Articles 1324 on the
That the LESSOR is an 4. That the LESSOR November 23, 1960 ................................. Lease with the First Option
owner of the ANGELES agrees to give the 300.00 (Exh. E) to Buy" originally
EDUCATIONAL LESSEE an option to buy contracted and duly
INSTITUTE situated at the land and the school signed.
December 21, 1960 .................................
Angeles, Pampanga, a building, for a price of
200.00 (Exh. F)
school which is duly ONE HUNDRED
(Sgd.) DR. PABLO
recognized by the THOUSAND PESOS
GARCIA (Exh. C)
Government; (P100,000) within the January 14, 1961 .....................................
period of the Contract of 500.00 (Exh. G)
Lease; On or about July 31, 1964, Dr. Garcia's
That the lessor agrees to
counsel wrote to Nietes the letter Exhibit 1
lease the above stated February 16, 1961 ...................................
(also Exhibit V) stating:
school to the LESSEE 5. That should the 3,000.00 (Exh. H)
under the following terms LESSEE buy the lot, land
and conditions: and the school building The Director
March 12, 1961 .......................................
within the stipulated Philippine Institute of
1,000.00 (Exh. I)
period, the unused Electronics
1. That the term will be for
payment for the Contract Angeles, Pampanga
a period of five (5) years;
of Lease will be March 13, 1961 .......................................
considered as part 700.00 (Exh. J)
Sir:
2. That the price of the payment for the sale of the
rent is FIVE THOUSAND land and school;
August 4, 1961 ........................................
PESOS (P5,000) per year I regret to inform you that
100.00 (Exh. K) _________
payable in the following our client, Dr. Pablo
6. That an inventory of all
manners: Garcia, desires to rescind
properties in the school
TOTAL ..................................... P24,757.00 your contract, dated 19
will be made on March 31,
October 1959 because of
a. That the amount of 1960;
the following:
FIVE THOUSAND FIVE Moreover, Nietes maintains that, on September
HUNDRED PESOS 4, 1961, and December 13, 1962, he paid
6A. That the term of this
(P5,500) will be paid Garcia the additional sums of P3,000 and 1. That you had not
Contract will commence in
upon the execution of P2,200, respectively, for which Garcia issued maintained the building,
June 1960 and will
this Contract of Lease; receipts Exhibit B and C, reading: subject of the lease
terminate in June 1965;
contract in good condition.
b. That the amount of Received the amount of
7. That the LESSEE will
FOUR THOUSAND (P3,000.00) Three 2. That you had not been
be given full control and
FIVE HUNDRED Thousand Pesos from using the original name of
responsibilities over all the
PESOS (P4,500) is Mrs. Nietes as per the school Angeles
properties of the school
payable on or before advance pay for the Institute, thereby
and over all the
the 30th day of October, school, the contract of extinguishing its existence
supervisions and
1959; lease being paid. in the eyes of the public
administrations of the
and injuring its prestige.
school;
c. That the remaining (Sgd.) PABLO GARCIA
balance of FIFTEEN (Exh. B) 3. That through your fault,
8. That the LESSEE
THOUSAND PESOS no inventory has been
agrees to help the
(P15,000) will be paid made of all properties of
LESSOR to collect the To Whom it May Concern:
on or before March 30, the school.
back accounts of students
1960;
incurred before the
execution of this contract. This is to certify that I 4. That up to this time, you
3. That all improvements received the sum of Two had not collected or much
made during the lease by Thousand Two Hundred less helped in the
Instead of paying the lessor in the manner set Pesos, Philippine
the LESSEE will be owned collection of back accounts
forth in paragraph 2 of said contract, Nietes Currency, from Mrs.
by the LESSOR after the of former students.
had, as of August 4, 1961, made payments as Catherine R. Nietes as the
expiration of the term of
follows: partial payment on the
this Contract of Lease;
purchase of the property This is to remind you that
as specified on the original the foregoing obligations
October 6,1960 .......................................
contract of "Contract of had been one, if not, the
P18,957.00 (Exh. D)
principal moving factors Philippine Institute of P84,860.50 on August 12, 1965, after the P1,000.00 as attorney's
which had induced the Electronics, Angeles City, checks had been cleared. On August 2, 1965, fees, and the cost of this
lessor in agreeing with the has been referred to me he commenced the present action, in the Court suit.
terms embodied in your and in reply, please, be of First Instance of Pampanga, for specific
contract of lease, without informed that my client performance of Dr. Garcia's alleged obligation
Both parties appealed to the Court of Appeals,
which fulfillment, said has not violated any to execute in his (Nietes') favor a deed of
Dr. Garcia insofar as the trial court had neither
contract could not have provision of the absolute sale of the leased property, free from
dismissed the complaint nor upheld his
come into existence. It is CONTRACT OF LEASE any lien or encumbrance whatsoever, he
counterclaim and failed to order Nietes to
not simply one of those WITH OPTION TO BUY, having meanwhile mortgaged it to the People's
vacate the property in question, and Nietes
reminders that we make executed by him as Bank and Trust Company, and to compel him
insofar as the trial court had granted him no
mention, that our client LESSEE and Dr. Pablo (Garcia) to accept whatever balance of the
more than nominal damages in the sum of
under the circumstances, Garcia as LESSOR. For purchase price is due him, as well as to
P1,000, as attorney's fees.
is not only entitled to a this reason, there is no recover from him the aggregate sum of
rescission of the contract. basis for rescission of the P90,000 by way of damages, apart from
He is likewise entitled to contract nor of the attorney's fees and the costs. After appropriate proceedings, a special
damages actual, demands contained in division of Court of Appeals rendered its
compensatory and your letter. decision, on October 18, 1969, affirming, in
Dr. Garcia filed an answer admitting some
exemplary. effect, that of the trial court, except as regards
allegations of the complaint and denying other
said attorney's fees, which were eliminated.
In this connection, I am allegations thereof, as well as setting up a
The dispositive part of said decision of the
In view of the serious also serving this formal counterclaim for damages in the sum of
Court of Appeals reads:
nature of the breach which notice upon your client Dr. P150,000.
warrant and sanction Pablo Garcia, thru you,
drastic legal remedies that my client Mr. WHEREFORE, with the modification that the
After due trial, said court rendered its decision,
against you, we earnestly AQUILINO T. NIETES will attorney's fees awarded by the trial court in
the dispositive part of which reads:
request you to please see exercise his OPTION to favor of the plaintiff is eliminated, the appealed
the undersigned at the buy the land and building judgment is hereby affirmed in all other
above-named address two subject matter of the lease WHEREFORE, in view of respects, and the defendant is ordered to
days from receipt hereof. and that my said client is the preponderance of execute the corresponding deed of sale for the
Otherwise, if we shall not ready to pay the balance evidence in favor of the school building and lot in question in favor of
hear from you, the of the purchase price in plaintiff and against the the plaintiff upon the latter's full payment of the
foregoing will serve notice accordance with the defendant, judgment is balance of the purchase price. The costs of this
on your part to vacate the contract. Please, inform hereby rendered ordering proceedings shall be taxed against the
premises within five (5) Dr. Pablo Garcia to make the latter to execute the defendant-appellant.
days to be counted from available the land title and Deed of Absolute Sale of
date of notice. execute the corresponding property originally leased
On motion for reconsideration of defendant
Deed of Sale pursuant to together with the school
Garcia, said special division set aside its
this notice, and that if he building and other
Very truly yours, aforementioned decision and rendered another
fails to do so within fifteen improvements thereon
(Sgd.) VICTOR T. one, promulgated on March 10, 1970 reversing
(15) days from the receipt which are covered by the
LLAMAS, JR. the appealed decision of the court of first
of this letter, we shall take contract, Annex "A", upon
instance, and dismissing the complaint of
the corresponding action payment of the former of
Nietes, with costs again him. Hence, the
to which counsel for to enforce the agreement. the balance (whatever be
present petition of Nietes for review certiorari of
Nietes replied in the the amount) of the
the second decision of the Court of Appeals,
following language: stipulated purchase price;
Truly yours, dated March 10, 1970, to which petition We
to free the said property
gave due course.
from any mortgage or
Atty. Victor T. Llamas, Jr.
(Sgd.) CONRADO V. DEL encumbrance and deliver
Victor Llamas Law Office
ROSARIO the title thereto to the Said decision of the Court of Appeals,
Corner Rivera-Zamora
Counsel for Mr. Aquilino T. plaintiff free from any lien reversing that of the Court of First Instance, is
Streets
Nietes or encumbrance, and mainly predicated upon the theory that, under
Dagupan City
Angeles City should said defendant fail the contract between the parties, "the full
to do so, the proceeds purchase price must be paid before the option
Dear Sir: from the purchase price be counsel be exercised," because "there was no
On July 26, 1965, Nietes deposited with the
applied to the payment of need nor sense providing that "the unused
branch office of the Agro-Industrial Bank in
the encumbrance so that payment for the Contract Lease will be
Your letter dated July 31, Angeles City checks amounting to P84,860.50,
the title may be conveyed considered as part payment for the sale the
1964 addressed to my as balance of the purchase price of the
to the plaintiff; to pay the land and school'" inasmuch as "otherwise there
client, the Director of the property, but he withdrew said sum of
plaintiff the sum of is substantial amount from which such unused
rental could be deducted"; that the statement in previously made by Nietes, give a grand total November 23, 1960 ....................... 300.00 paid" in other words, in accordance or
the letter, Exhibit L, of Nietes, dated August 7, of P29,957.00, or P4,957 in excess of the (Exh E) conformity with said contract. Besides, when,
1964, to the effect that he "will exercise his agreed rentals for the entire period of five on December 13, 1962, Mrs. Nietes delivered
OPTION to buy the land and building," years. Thus, Dr. Garcia was less than truthful the additional sum of P2,200, Dr. Garcia issued
December 21, 1960 ....................... 200.00
indication that he did not consider the receipts, when he tried to cast doubt upon the fact of a receipt accepting said amount "as the partial
(Exh. F)
Exhibits B and for P3,000 and P2,200, payment of said sums of P3,000 and P2,200, payment on the purchase price of the
respectively, "as an effective exercise of his as well as when he claimed that the same property as specified on the original contract,"
option to buy"; that the checks for P84,860.50 were part of the rentals collectible by him. January 14, 1961 ........................... 500.00 thus further indicating that the payment, in his
deposited by Nietes with the Agro-Industrial (Exh. G) opinion, conformed with said contract, and
Development Bank, did not constitute a proper that, accordingly, the same was in full force
We, likewise, find ourselves unable to share
tender of payment, which, at any rate, was and effect.
the view taken by the Court of Appeals. Neither February 16, 1961 ......................... 3,000.00
"made beyond the stipulated 5-year period";
the tenor of the contract Exhibits A and A-1 (Exh. H)
that such deposit "was not seriously made,
(also Exhibit 2) nor the behaviour of Dr. Garcia In any event, it is undisputed that, as of
because on August 12, 1965, the same was
as reflected in the receipts Exhibits B and C September 4, 1961, Dr. Garcia had received
withdrawn from the Bank and ostensibly March 12, 1961 ............................. 1,000.00
justifies such view. The contract does not the total sum of P27,757, or P2,757 in excess
remains in the lessee's hand"; and that "the (Exh. I)
say that Nietes had to pay the stipulated price of the P25,000 representing the rentals for the
fact that such deposit was made by the lessee
of P100,000 before exercising his option to buy entire period of the lease, and over P21,200 in
shows that he himself believed that he should
the property in question. Accordingly, said March 13, 1961 ............................. 700.00 excess of the rentals for the unexpired portion
have paid the entire amount of the purchase
option is governed by the general principles on (Exh. J) of the lease, from September 4, 1961 to June
price before he could avail of the option to buy,
obligations, pursuants to which: 1965. This circumstance indicates clearly that
otherwise, the deposit was a senseless
Nietes had, on September 4, 1961, chosen to
gesture ... ." August 4, 1961 ............................... 100.00 exercise and did exercise then his option to
In reciprocal obligations, (Exh. K) buy. What is more, this is borne out by the
neither party incurs in
Dr. Garcia, in turn, maintained in his answer receipt issued by Dr. Garcia for the payment of
delay if the other does not
"that the sums paid" to him "were part of the September 4, 1961 ......................... 3,000.00 P2,200, on December 13, 1962, to which he
comply or is not ready to
price of the contract of lease between the (Exh. B) referred therein as a "partial payment on the
comply in a proper manner
parties which were paid late and not within the ________ purchase of the property as specified on the
with what is incumbent
periods and/or schedules fixed by the contract original contract of 'Contract of Lease with the
upon him. From the
(Annex A.)." What is more, on the witness First Option to Buy' ... ."
moment one of the parties TOTAL ............................... P27,757.00
stand, Garcia claimed that he did "not know"
fulfills his obligation, delay
whether the signatures on Exhibits B and C
by the other begins. 1 Further confirmation is furnished by the letter of
the receipt for P3,000 and P2,200, respectively It is true that Nietes was bound, under the Nietes, Exhibit L, of August 1964 also, within
were his, and even said that he was contract, to pay P5,500 on October 19, 1959, the period of the lease stating that he "will
"doubtful" about it. In the case of an option to buy, the creditor P4,500 on or before October 30, 1959, and exercise his OPTION to buy the land and
may validly and effectively exercise his right by P15,000 on or before March 30, 1960, or the building subject matter of the lease." It is not
merely advising the debtor of the former's total sum of P25,000, from October 19, 1959 to
This testimony is manifestly incredible, for a correct to construe this expression as did
decision to buy and expressing his readiness March 30, 1960, whereas his first payment was
man of his intelligence a Doctor of Medicine the appealed decision as implying that the
to pay the stipulated price, provided that the not made until October 10, 1960, when he
and the owner of an educational institution option had not been or was not yet being
same is available and actually delivered to the delivered the sum of P18,957 to Dr. Garcia,
could not possibly "not know" or entertain exercised, or as a mere announcement of the
debtor upon execution and delivery by him of and the latter had by August 4, 1961, received
doubts as to whether or not the intent to avail of it at some future time. This
the corresponding deed of sale. Unless and from the former the aggregate sum of P24,757.
aforementioned signatures are his and the interpretation takes said expression out of the
until the debtor shall have done this the This is, however, P243.00 only less than the
payments therein acknowledged had been context of Exhibit L, which positively states,
creditor is not and cannot be in default in the P25,000 due as of March 30, 1960, so that
received by him. His dubious veracity becomes also, that Nietes "is ready to pay the balance of
discharge of his obligation to pay. 2 Nietes may be considered as having complied
even more apparent when we consider the the purchase price in accordance with the
In other words, notice of the creditor's decision to exercise his option to buy need not be coupled with

actual payment of the price, so long as this is delivered to the owner of the property upon performance of his part of the agreement. Nietes need not have deposited, therefore, with the Agro-Industrial Bank checks amounting altogether to P84,860.50 on July 26, 1965, and the withdrawal thereof soon after does not and cannot affect his cause of action in the present case. In
making such deposit, he may have had the intent to show his ability to pay the balance of the sum due to Dr. Garcia as the sale price of his property. In short, said deposit and its subsequent withdrawal cannot affect the result of the present case.

allegations in paragraph (4) of his answer substantially with the terms agreed upon. contract," and requests counsel for Dr. Garcia
referring to paragraphs 5 and 6 of the Indeed, Dr. Garcia seems to have either to inform or advise him "to make available the
Nietes was entitled to exercise his option to agreed thereto or not considered that Nietes
complaint alleging, inter alia, the buy "within the period of the Contract of land title and execute the corresponding Deed
aforementioned partial payments of P3,000 had thereby violated the contract, because the of Sale pursuant to this notice, and that if he
Lease," which pursuant to paragraph 6-A of letter of the former, dated July 31, 1964,
and P2,200, on account of the stipulated sale said contract commenced "in June 1960" fails to do so within fifteen (15) days ... we shall
price to the effect that said sums " paid to demanding rescission of the contract, did not take the corresponding action to enforce the
and was to "terminate in June 1965." As early mention said acts or omissions of Nietes
the herein defendant were part of the price of as September 4, 1961, or well "within the agreement." Such demand and said readiness
the contract of lease." In other words, payment period of the Contract of Lease," Nietes had among his alleged violations thereof to pay the balance of the purchase price leave
of said sums of P3,000 and P2,200 enumerated in said communication. In fact, no room for doubt that, as stated in Exhibit L,
paid Dr. Garcia the following sums: when, on September 4, 1961, Mrs. Nietes
is admitted in said answer. Besides, the rentals the same is "a formal notice" that Nietes had
for the whole period of the lease aggregated turned over the sum of P3,000 to Dr. Garcia, exercised his option, and expected Dr. Garcia
P25,000 only, whereas said sums of P3,000 October 6, 1960 ............................ P18,957.00 he issued the receipt Exhibit B, stating that to comply, within fifteen (15) days, with his part
and P2,200, when added to the payments (Exh. D) said payment had been made "as per advance of the bargain. Surely, there would have been
pay for the school, the Contract of Lease being
no point for said demand and readiness to pay, G.R. No. 83759 July 12, 1991 The said lot was same document of sale
if Nietes had not yet exercised his option to registered in the name of but in a separate
buy. plaintiffs. On October document, and since such
SPOUSES CIPRIANO VASQUEZ and
1959, the same was option is not supported by
VALERIANA GAYANELO, petitioners,
leased by plaintiffs to the a consideration distinct
The provision in paragraph 5 of the Contract, vs.
defendants up to crop year from the price, said deed
to the effect that "should the LESSEE" choose HONORABLE COURT OF APPEALS and
1966-67, which was for right to repurchase is
to make use of his option to buy "the unused SPOUSES MARTIN VALLEJERA and
extended to crop year not binding upon them.
payment for the Contract of Lease will be APOLONIA OLEA,respondents.
1968-69. After the
considered as payment for the sale of the land
execution of the lease,
and school, "simply means that the rental paid After trial, the court below
Dionisio C. Isidto for petitioners. defendants took
for the unused portion of the lease shall be rendered judgment against
possession of the lot, up to
applied to and deducted from the sale price of the defendants, ordering
now and devoted the
P100,000 to be paid by Nietes at the proper Raymundo Lozada, Jr. for private respondents. them to resell lot No. 1860
same to the cultivation of
time in other words, simultaneously with the of the Himamaylan
sugar.
delivery to him of the corresponding deed of Cadastre to the plaintiffs
sale, duly executed by Dr. Garcia. for the repurchase price of
On September 21, 1964, P24,000.00, which amount
the plaintiffs sold the lot to combines the price paid
It is, consequently, Our considered opinion that GUTIERREZ, JR., J.: p

the defendants under a for the first sale and the


Nietes had validly and effectively exercised his
Deed of Sale for the price paid by defendants
option to buy the property of Dr. Garcia, at This petition seeks to reverse the decision of amount of P9,000.00. The to Benito Derrama, Jr.
least, on December 13, 1962, when he the Court of Appeals which affirmed the earlier Deed of Sale was duly
acknowledged receipt from Mrs. Nietes of the decision of the Regional Trial Court, 6th ratified and notarized. On
sum of P2,200 then delivered by her "in partial Judicial Region, Branch 56, Himamaylan, Defendants moved for, but
the same day and along
payment on the purchase of the property" Negros Occidental in Civil Case No. 839 (for were denied
with the execution of the
described in the "Contract of Lease with Option specific performance and damages) ordering reconsideration. Excepting
Deed of Sale, a separate
to Buy"; that from the aggregate sum of the petitioners (defendants in the civil case) to thereto, defendants-
instrument, denominated
P29,957.00 paid to him up to that time, the resell Lot No. 1860 of the Cadastral Survey of appealed, . . . (Rollo, pp.
as Right to Repurchase
sum of P12,708.33 should be deducted as Himamaylan, Negros Occidental to the 44-45)
(Exh. E), was executed by
rental for the period from June 1960 to respondents (plaintiffs in the civil case) upon the parties granting
December 13, 1962, or roughly thirty (30) payment by the latter of the amount of plaintiffs the right to The petition was given due course in a
months and a half, thereby leaving a balance P24,000.00 as well as the appellate court's repurchase the lot for resolution dated February 12, 1990.
of P17,248.67, consisting of P12,291.67, resolution denying a motion for P12,000.00, said Exh. E
representing the rentals for the unused period reconsideration. In addition, the appellate court
likewise duly ratified and
of the lease, plus P4,957.00 paid in excess of ordered the petitioners to pay the amount of The petitioners insist that they can not be
notarized. By virtue of the
said rental and advanced solely on account of P5,000.00 as necessary and useful expenses compelled to resell Lot No. 1860 of the
sale, defendants secured
the purchase price; that deducting said sum of in accordance with Article 1616 of the Civil Himamaylan Cadastre. They contend that the
TCT No. T-58898 in their
P17,248.67 from the agreed price of Code. nature of the sale over the said lot between
name. On January 2,
P100,000.00, there results a balance of them and the private respondents was that of
1969, plaintiffs sold the
P82,751.33 which should be paid by Nietes to an absolute deed of sale and that the right
The facts of the case are not in dispute. They same lot to Benito
Dr. Garcia, upon execution by the latter of the thereafter granted by them to the private
are summarized by the appellate court as Derrama, Jr., after
corresponding deed of absolute sale of the respondents (Right to Repurchase, Exhibit "E")
follows: securing the defendants'
property in question, free from any lien or can only be either an option to buy or a mere
title, for the sum of
encumbrance whatsoever, in favor of Nietes, promise on their part to resell the property.
P12,000.00. Upon the
and the delivery to him of said deed of sale, as On January 15, 1975, the They opine that since the "RIGHT TO
protestations of defendant,
well as of the owner's duplicate of the plaintiffs-spouses REPURCHASE" was not supported by any
assisted by counsel, the
certificate of title to said property; and that Dr. (respondents herein) filed consideration distinct from the purchase price it
said second sale was
Garcia should indemnify Nietes in the sum of this action against the is not valid and binding on the petitioners
cancelled after the
P2,500 as and for attorney's fees. defendants-spouses pursuant to Article 1479 of the Civil Code.
payment of P12,000.00 by
(petitioners herein) the defendants to
Thus modified, the decision of the Court of seeking to redeem Lot No. Derrama. The document denominated as "RIGHT TO
First Instance of Pampanga is hereby affirmed 1860 of the Himamaylan REPURCHASE" (Exhibit E) provides:
in all other respects, and that of the Court of Cadastre which was
previously sold by plaintiffs Defendants resisted this
Appeals reversed, with costs against
to defendants on action for redemption on RIGHT TO REPURCHASE
respondent herein, Dr. Pablo C. Garcia. It is so
September 21, 1964. the premise that Exh. E is
ordered.
just an option to buy since
it is not embodied in the KNOW ALL MEN BY
THESE PRESENTS:
I, CIPRIANO myself with all the terms and conditions." something paid or the respondent ipso
VASQUEZ, . . ., do hereby (Emphasis supplied) The notarized document promised. facto assumed the
grant the spouses Martin was signed both by Sanchez and Rigos. obligation of a
Vallejera and Apolonia purchaser. He did not
should be reconciled and harmonized to avoid
Olea, their heirs and just get the right
After several tenders of payment of the agreed a conflict between the two provisions. In effect,
assigns, the right to subsequently to buy or
sum of P1,510.00 made by Sanchez within the the Court abandoned the ruling in the
repurchase said Lot No. not to buy. It was not a
stipulated period were rejected by Rigos, the Southwestern Sugar and Molasses Co. case
1860 for the sum of mere option then; it was
former deposited said amount with the Court of and reiterated the ruling in the Atkins, Kroll and
TWELVE THOUSAND bilateral contract of
First Instance of Nueva Ecija and filed an Co. case, to wit:
PESOS (P12,000.00), sale.
action for specific performance and damages
Philippine Currency, within
against Rigos.
the period TEN (10) However, this Court itself,
Lastly, even supposing
YEARS from the in the case of Atkins, Kroll
that Exh. A granted an
agricultural year 1969- The lower court rendered judgment in favor of and Co., Inc. v. Cua Hian
option which is not
1970 when my contract of Sanchez and ordered Rigos to accept the sum Tek, (102 Phil. 948, 951-
binding for lack of
lease over the property judicially consigned and to execute in Sanchez' 952) decided later than
consideration, the
shall expire and until the favor the requisite deed of conveyance. Rigos Southwestern Sugar &
authorities hold that
agricultural year 1979- appealed the case to the Court of Appeals Molasses Co. v. Atlantic
1980. which certified to this Court on the ground that Gulf & Pacific Co., (supra)
it involves a pure question of law. saw no distinction If the option is given
between Articles 1324 and without a consideration,
IN WITNESS WHEREOF, I
1479 of the Civil Code and it is a mere offer of a
have hereunto signed my This Court after deliberating on two conflicting
applied the former where a contract of sale, which
name at Binalbagan, principles laid down in the cases of
unilateral promise to sell is not binding until
Negros Occidental, this Southwestern Sugar and Molasses Co. v.
similar to the one sued accepted. If, however,
21st day of September, Atlantic Gulf and Pacific Co., (97 Phil. 249
upon here was involved, acceptance is made
1964. [1955]) and Atkins, Kroll & Co., Inc. v. Cua Hian
treating such promise as before a withdrawal, it
Tek, 102 Phil. 948 [1958]) arrived at the
an option which, although constitutes a binding
conclusion that Article 1479 of the Civil Code
SGD. CIPRIANO not binding as a contract contract of sale, even
which provides:
VASQUEZ in itself for lack of separate though the option was
consideration, not supported by a
Art. 1479. A promise to nevertheless generated a sufficient consideration .
SGD. VALERIANA G. VASQUEZ SGD.
buy and sell a determinate bilateral contract of . . (77 Corpus Juris
FRANCISCO SANICAS
thing for a price certain is purchase and sale upon Secundum p.
reciprocally demandable. acceptance. Speaking 652. See also 27 Ruling
(Rollo, p. 47) through Associate Justice, Case Law 339 and
later Chief Justice, Cesar cases cited.)
An accepted unilateral Bengzon, this Court said:
The Court of Appeals, applying the principles promise to buy or to sell a
laid down in the case of Sanchez v. Rigos, 45 determinate thing for a This Court affirmed the lower court's decision
SCRA 368 [1972] decided in favor of the price certain is binding Furthermore, an option although the promise to sell was not supported
private respondents. upon the promissory if the is unilateral: a promise by a consideration distinct from the price. It
promise is supported by a to sell at the price fixed was obvious that Sanchez, the promisee,
consideration distinct from whenever the offeree accepted the option to buy before Rigos, the
In the Sanchez case, plaintiff-appellee Nicolas
the price. should decide to promisor, withdrew the same. Under such
Sanchez and defendant-appellant Severino exercise his option circumstances, the option to purchase was
Rigos executed a document entitled "Option to within the specified converted into a bilateral contract of sale which
Purchase," whereby Mrs. Rigos "agreed, and Article 1324 thereof which provides: time. After accepting the bound both parties.
promised and committed . . . to sell" to promise and before he
Sanchez for the sum of P1,510.00, a
Art. 1324. When the exercises his option, the
registered parcel of land within 2 years from In the instant case and contrary to the
offerer has allowed the holder of the option is
execution of the document with the condition appellate court's finding, it is clear that the right
offerer a certain period to not bound to buy. He is
that said option shall be deemed "terminated to repurchase was not supported by a
accept, the offer may be free either to buy or not
and lapsed," if "Sanchez shall fail to exercise consideration distinct from the price. The rule is
withdrawn at any time to buy later. In this case
his right to buy the property" within the that the promisee has the burden of proving
before acceptance by however, upon
stipulated period. In the same document, such consideration. Unfortunately, the private
communicating such accepting herein
Sanchez" . . . hereby agree and conform with respondents, promisees in the right to
withdrawal, except when petitioner's offer a
all the conditions set forth in the option to repurchase failed to prove such consideration.
the option is founded upon bilateral promise to sell
purchase executed in my favor, that I bind They did not even allege the existence thereof
a consideration, as and to buy ensued, and
in their complaint. (See Sanchez v. be absurd to require the promisor of an option In a contract of sale with a We affirmed the appellate court's decision and
Rigos supra) to buy to accept his own offer instead of the right of repurchase, the ruled:
promisee to whom the option to buy is given. redemptioner who may
offer to make the
Therefore, in order that the Sanchez case can The nature of the
repurchase on the option
be applied, the evidence must show that the Furthermore, the actions of the private transaction between
date of redemption should
private respondents accepted the right to respondents (a) filing a complaint to compel Olimpia and Aurelio, from
deposit the full amount in
repurchase. re-sale and their demands for resale prior to the context of Exhibit "E" is
court . . . (Rumbaoa v.
filing of the complaint cannot be considered not a sale with right to
Arzaga, 84 Phil. 812
acceptance. As stated in Vda. de Zulueta v. repurchase. Conventional
The record, however, does not show that the [1949])
Octaviano (121 SCRA 314 [1983]): redemption takes place
private respondents accepted the "Right to
"when the vendor reserves
Repurchase" the land in question. We disagree
To effectively exercise the the right to repurchase the
with the appellate court's finding that the And even granting,
right to repurchase the thing sold, with the
private respondents accepted the "right to arguendo that the sale
vendor a retro must make obligation to comply with
repurchase" under the following was a pacto de retro sale,
an actual and the provisions of Article
circumstances: . . as evidenced by the the evidence shows that
simultaneous tender of 1616 and other
annotation and registration of the same on the Olimpia, through her
payment or consignation. stipulations which may
back of the transfer of certificate of title in the lawyer, opted to
(Catangcatang v. have been agreed upon.
name of appellants. As vividly appearing repurchase the land only
Legayada, 84 SCRA 51 (Article 1601, Civil Code).
therein, it was signed by appellant himself and on 16 February 1962,
[1978])
witnessed by his wife so that for all intents and approximately two years
purposes the Vasquez spouses are estopped beyond the stipulated In this case, there was no
from disregarding its obvious purpose and period, that is not later The private respondents' ineffectual reservation made by the
intention." than May, 1960. acceptance of the option to buy validated the vendor, Olimpia, in the
petitioner's refusal to sell the parcel which can document Exhibit "E" the
be considered as a withdrawal of the option to "option to repurchase" was
The annotation and registration of the right to If Olimpia could not locate
buy. contained in a subsequent
repurchase at the back of the certificate of title Aurelio, as she contends,
document and was made
of the petitioners can not be considered and based on her
by the vendee,
as acceptance of the right to repurchase. allegation that the contract We agree with the petitioners that the case
Aurelio. Thus, it was more
Annotation at the back of the certificate of title between her was one of of Vda. de Zulueta v. Octaviano, (supra) is in
of an option to buy or a
of registered land is for the purpose sale with right to point.
mere promise on the part
of binding purchasers of such registered land. repurchase, neither,
of the vendee, Aurelio, to
Thus, we ruled in the case of Bel Air Village however, did she tender
Stripped of non-essentials the facts of resell the property to the
Association, Inc. v. Dionisio (174 SCRA 589 the redemption price to
the Zulueta case are as follows: On November vendor, Olimpia. (10
[1989]), citing Tanchoco v. Aquino (154 SCRA private respondent Isauro,
25, 1952 (Emphasis supplied) Olimpia Manresa, p. 311 cited in
1 [1987]), and Constantino v. Espiritu (45 but merely wrote him
Fernandez Vda. de Zulueta, the registered Padilla's Civil Code
SCRA 557 [1972]) that purchasers of a letters expressing her
owner of a 5.5 hectare riceland sold the lot to Annotated, Vol. V, 1974
registered land are bound by the annotations readiness to repurchase
private respondent Aurelio B. Octaviano for ed., p. 467) As held in
found at the back of the certificate of title the property.
P8,600.00 subject to certain terms and Villarica v. Court of
covering the subject parcel of land. In effect,
conditions. The contract was an absolute and Appeals (26 SCRA 189
the annotation of the right to repurchase found
It is clear that the mere definite sale. On the same day, November 25, [1968]):
at the back of the certificate of title over the
sending of letters by the 1952, (Emphasis supplied) the vendee, Aurelio
subject parcel of land of the private
vendor expressing his signed another document giving the vendor
respondents only served as notice of the The right of repurchase
desire to repurchase the Zulueta the "option to repurchase" the property
existence of such unilateral promise of the is not a right granted the
property without at anytime after May 1958 but not later than
petitioners to resell the same to the private vendor by the vendee in
accompanying tender of May 1960. When however, Zulueta tried to
respondents. This, however, can not be a subsequent
the redemption price fell exercise her "option to buy" the property,
equated with acceptance of such right to instrument, but is a
short of the requirements Aurelio resisted the same prompting Zulueta to
repurchase by the private respondent. right reserved by the
of law. (Lee v. Court of commence suit for recovery of ownership and
vendor in the same
Appeals, 68 SCRA 197 possession of the property with the then Court
instrument of sale as
Neither can the signature of the petitioners in [1972]) of First Instance of Iloilo.
one of the stipulations
the document called "right to repurchase"
of the contract. Once
signify acceptance of the right to repurchase.
Neither did petitioner The trial court ruled in favor of Zulueta. Upon the instrument of
The respondents did not sign the offer.
make a judicial appeal, however, the Court of Appeals absolute sale is
Acceptance should be made by the promisee,
consignation of the reversed the trial court's decision. executed, the vendor
in this case, the private respondents and not
repurchase price within can no longer reserve
the promisors, the petitioners herein. It would
the agreed period. the right to repurchase,
and any right thereafter The latter case (Vda. de avail of Article 1601 of the Civil Code which
granted the vendor by Zulueta v. provides for conventional redemption.
the vendee in a Octaviano, supra),
separate instrument likewise involved the
WHEREFORE, the petition is GRANTED. The
cannot be a right of execution of the separate
questioned decision and resolution of the Court
repurchase but some document after an
of Appeals are hereby REVERSED and SET
other right like the intervention of several
ASIDE. The complaint in Civil Case No. 839 of
option to buy in the days and the question of
the then Court of First Instance of Negros
instant case. . . laches was decided
Occidental 12th Judicial District Branch 6 is
(Emphasis supplied) therein, which is not
DISMISSED. No costs.
present in the instant
case. That distinction is
The appellate court rejected the application of
therefore crucial and We SO ORDERED.
the Zulueta case by stating:
are of the opinion that the
appellee's right to
. . . [A]s found by the trial repurchase has been
court from which we quote adequately provided for
with approval below, the and reserved in conformity
said cases involve the with Article 1601 of the
lapse of several days for Civil Code, which states:
the execution of separate
instruments after the
Conventional redemption
execution of the deed of
shall take place when the
sale, while the instant
vendor reserves the right
case involves the
to repurchase the thing
execution of an
sold, with the obligation to
instrument, separate as it
comply with the provision
is, but executed on the
of Article 1616 and other
same day, and notarized
stipulations which may
by the same notary public,
have been agreed upon.
to wit:
(Rollo, pp. 46-47)

A close examination of
Obviously, the appellate court's findings are not
Exh. "E" reveals that
reflected in the cited decision. As in the instant
although it is a separate
case, the option to repurchase involved in the
document in itself, it is far
Zulueta case was executed in a separate
different from the
document but on the same date that the deed
document which was
of definite sale was executed.
pronounced as an option
by the Supreme Court in
the Villarica case. The While it is true that this Court in the Zulueta
option in the Villarica case case found Zulueta guilty of laches, this,
was executed several however, was not the primary reason why this
days after the execution of Court disallowed the redemption of the
the deed of sale. In the property by Zulueta. It is clear from the
present case, Exh. "E" decision that the ruling in the Zulueta case was
was executed and ratified based mainly on the finding that the
by the same notary public transaction between Zulueta and Octaviano
and the Deed of Sale of was not a sale with right to repurchase and
Lot No. 1860 by the that the "option to repurchase was but an
plaintiffs to the defendants option to buy or a mere promise on the part of
were notarized by the Octaviano to resell the property to Zulueta.
same notary public and
entered in the same page
In the instant case, since the transaction
of the same notarial
between the petitioners and private
register . . .
respondents was not a sale with right to
repurchase, the private respondents cannot