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Case Suit to recover the ownership and possession of certain portions of lots which
Rubias bought from his father-in-law Francisco Militante
Facts Before the war with Japan, Militante file with CFI and application for the
registration of title of the land, the records of the case were lost so Militante filed
a petition for reconstitution which was dismissed Militante appealed and pending
the appeal, Militante sold the subject land to Rubias. This was recorded in the
Register of Deeds. However, the application for registration was again dismissed.
According to Batiller, Rubias has no cause of action since they are in actual, open
and continuous possession of the lot since time immemorial; Rubias was also the
counsel on record of Militante
Issue w/n the contract of sale was void because it was made when Rubias was
Militantes counsel in the land registration case
Ruling Rubias cannot have any claim on the land which Militante allegedly owned
since the latters application was denied by the CA. Militante had no authority to
dispose the things sold.
Assuming that Militante acquired the property, Rubias claim still fails. The sale
between him and Militante was prohibited by law. Purchase by lawyer of property
in litigation from his client is void and produces no legal effect. Nullity of such
contracts cannot be cured by ratification since the prohibition is grounded in public
policy. Nullity of such contracts is differentiated from that purchased by
guardians, agents and administrators which can be cured by ratification.
RUBIAS v BATILLER
FACTS: Militante claimed ownership over a parcel of land and applied for the
registration of the same with the CFI; his counsel was his son-in-law, Atty. Rubias.
His claim was dismissed by the trial court, thus he appealed. Pending appeal, he
sold the lot to Atty. Rubias for P2,000. Batiller, on the other hand, claimed to have
inherited the same lot from his ancestors who have been in open, public, peaceful,
and actual possession thereof under a claim of title. Atty. Rubias filed an ejectment
suit against Batiller who assailed the validity of the sale to Rubias. Given the
dismissal of Militantes application, he had thus no right over the said land that he
may have validly transferred to Atty. Rubias.
ISSUE: W/N the sale to Atty. Rubias is valid
HELD: NO. Even assuming he had title thereto, the sale of the lot to Atty. Rubias
would be null and void for being expressly prohibited by the Civil Code. Lawyers
cannot acquire by purchase the property or rights under litigation over which they
take part by virtue of their profession. The same rule applies to judges, clerks of
court, and other judicial officers with respect to the same. The purchase in violation
of the above provision is not merely voidable as Atty. Rubias contends; it is VOID
and INEXISTENT from the very beginning. The right to set up the defense of its
illegality cannot be waived and, unlike cases involving agents, guardians, or
administrators with respect to the properties under their charge, it is not
susceptible to compromise or ratification. It is likewise contrary to public policy
NATIONAL GRAINS AUTHORITY VS. IAC (Quantity of Subject Matter not Essential
for Perfection Delgado)
Facts: National Grains Authority (later National Food Authority) is a government
agency which buys palay grains from qualified farmer. Leon Soriano offered to sell
palay grains to the agency. After undergoing the regular application process, he
was given a quota (maximum) of 2,640 cavans of palay. On August 23 and 24, 1979,
Soriano delivered 630 cavans which were not bagged, classified and weighed.
When Soriano demanded payment for the delivered palay, he was informed by the
Provincial Manager William Cabal that his payment was held in abeyance because
there was an investigation concerning him because of allegations that he is not a
bona fide farmer and gets the palay from another person. Soriano filed case for
specific performance. RTC favored him and was affirmed by the IAC. Hence, this
petition with National Grains Authority arguing that there was no sale but only an
offer by Soriano because it was not accepted by the agency as evidenced of not
rebagging, classifying and weighing it.
Issue: W/N there was a sale?
Held: The petition is not impressed with merit.
Article 1458 of the Civil Code of the Philippines defines sale as a contract whereby
one of the contracting parties obligates himself to transfer the ownership of and to
deliver a determinate thing, and the other party to pay therefore a price certain in
money or its equivalent. A contract, on the other hand, is a meeting of minds
between two (2) persons whereby one binds himself, with respect to the other, to
give something or to render some service (Art. 1305, Civil Code of the Philippines).
The essential requisites of contracts are: (1) consent of the contracting parties, (2)
object certain which is the subject matter of the contract, and (3) cause of the
obligation which is established (Art. 1318, Civil Code of the Philippines.
In the case at bar, Soriano initially offered to sell palay grains produced in his
farmland to NFA. When the latter accepted the offer by noting in Soriano's Farmer's
Information Sheet a quota of 2,640 cavans, there was already a meeting of the
minds between the parties. The object of the contract, being the palay grains
produced in Soriano's farmland and the NFA was to pay the same depending upon
its quality. The fact that the exact number of cavans of palay to be delivered has
not been determined does not affect the perfection of the contract. Article 1349 of
the New Civil Code provides: ". . .. The fact that the quantity is not determinate
shall not be an obstacle to the existence of the contract, provided it is possible to
determine the same, without the need of a new contract between the parties." In
this case, there was no need for NFA and Soriano to enter into a new contract to
determine the exact number of cavans of palay to be sold. Soriano can deliver so
much of his produce as long as it does not exceed 2,640 cavans.
FULE v CA
FACTS: Fule, a banker and a jeweler, acquired a 10hectare property in Rizal (Tanay
Property), which used to be under the name of Fr. Antonio Jacobe, who mortgaged
it to Rural Bank of Alaminos to secure a loan of P10,000. However, the mortgage
was foreclosed. In 1984, Fule asked Dichoso and Mendoza to look for a buyer of
the Tanay property. They found one in the person of Cruz, who owns a pair of
diamond earrings. Fule was interested to buy these earrings, but Cruz refused to
sell them to him for the price he offered. Subsequently, negotiations for the barter
between the earrings and the property ensued. But it turned out that the
redemption period for the property has not yet expired. Thus, Fule executed a deed
of redemption on behalf of Fr. Jacobe in the amount of P16,000, and on even date,
Fr. Jacobe sold the property to Fule for P75,000. The Deed of Sale was notarized
ahead of the Deed of Redemption. Subsequently, a Deed of Sale over the earrings
was executed and when it was delivered, Fule contends that the earrings were fake,
even using a tester to prove such allegation. Thereafter, they decided to Dimayuga,
a jeweler, to have the earrings tested. After a glance, Dimayuga declared them fake.
Fule filed a complaint with the RTC against Cruz and her lawyer, Belarmino, praying
that the contract of sale over the Tanay property be declared null and void on the
ground of fraud and deceit. RTC ruled in favor of Cruz and Belarmino.
ISSUE: W/N the Deed of Sale over the Tanay Property is valid
HELD: YES. It is evident from the facts of the case that there was a meeting of the
minds between petitioner and Dr. Cruz. As such, they are bound by the contract
unless there are reasons or circumstances that warrant its nullification. The
records, however, are bare of any evidence manifesting that private respondents
employed such insidious words or machinations to entice petitioner into entering
the contract of barter. Neither is there any evidence showing that Dr. Cruz induced
petitioner to sell his Tanay property or that she cajoled him to take the earrings in
exchange for said property. On the contrary, Dr. Cruz did not initially accede to
petitioner's proposal to buy the said jewelry. Rather, it appears that it was
petitioner, through his agents, who led Dr. Cruz to believe that the Tanay property
was worth exchanging for her jewelry as he represented that its value was
P400,000.00 or more than double that of the jewelry which was valued only at
P160,000.00. If indeed petitioner's property was truly worth that much, it was
certainly contrary to the nature of a businessmanbanker like him to have parted
with his real estate for half its price. In short, it was in fact petitioner who resorted
to machinations to convince Dr. Cruz to exchange her jewelry for the Tanay
property. Furthermore, petitioner was afforded the reasonable opportunity
required in Article 1584 of the Civil Code within which to examine the jewelry as he
in fact accepted them when asked by Dr. Cruz if he was satisfied with the same. By
taking the jewelry outside the bank, petitioner executed an act which was more
consistent with his exercise of ownership over it. This gains credence when it is
borne in mind that he himself had earlier delivered the Tanay property to Dr. Cruz
by affixing his signature to the contract of sale. That after two hours he later
claimed that the jewelry was not the one he intended in exchange for his Tanay
property, could not sever the juridical tie that now bound him and Dr. Cruz. The
nature and value of the thing he had taken preclude its return after that
supervening period within which anything could have happened, not excluding the
alteration of the jewelry or its being switched with an inferior kind
CORONEL v CA
FACTS: In 1985, Coronel executed a document entitled "Receipt of Down Payment"
in favor of Alcaraz for P50,000 dp of P1.24M as purchase price for an inherited
house and lot promising to execute a deed of absolute
sale as soon as it has been transferred in their name. The balance of P1.19M is due
upon the execution of the deed. When title to the property was finally transferred
to their names, the Coronels sold the property to Mabanag for P1.58M after she
paid P300K dp. Because of this, they cancelled and rescinded the contract with
Alcaraz by returning the P50,00 dp. Alcaraz filed a complaint for specific
performance against the Coronels and cause the annotation of a notice of lis
pendens on the TCT. Mabanag, on the other hand, caused the annotation of a
notice of adverse claim with the RD. However, the Coronels executed a Deed of
Absolute Sale in favor Mabanag. RTC ruled in favor of Alcaraz. CA affirmed.
ISSUE: Whether the receipt of downpayment serves a contract to sell or a
conditional contract of sale
HELD: NO. The agreement could not have been a contract to sell because the sellers
made no express reservation of ownership or title to the subject parcel of land.
Furthermore, the circumstance, which prevented the parties from entering into an
absolute contract of sale, pertained to the sellers themselves (the certificate of title
was not in their names) and not the full payment of the purchase price. Under the
established facts and circumstances of the case, had the certificate of title been in
the names of petitioners-sellers at that time, there would have been no reason why
an absolute contract of sale could not have been executed and consummated right
there and then. Moreover, unlike in a contract to sell, petitioners did not merely
promise to sell the property to private respondent upon the fulfillment of the
suspensive condition. On the contrary, having already agreed to sell the subject
property, they undertook to have the certificate of title changed to their names and
immediately thereafter, to execute the written deed of absolute sale. What is
clearly established by the plain language of the subject document is that when the
said Receipt of Down Payment was prepared and signed by petitioners, the
parties had agreed to a conditional contract of sale, consummation of which is
subject only to the successful transfer of the certificate of title from the name of
petitioners father to their names. The suspensive condition was fulfilled on 6
February 1985 and thus, the conditional contract of sale between the parties
became obligatory, the only act required for the consummation thereof being the
delivery of the property by means of the execution of the deed of absolute sale in
a public instrument, which petitioners unequivocally committed themselves to do
as evidenced by the Receipt of Down Payment.
DIGNOS v CA (Stipulation on Power to Rescind Rivas)
Facts: Dignos is the owner of a parcel of land sold by installment to Jabil as
evidenced by a deed of sale Several months thereafter, Dignos sold the same
parcel of land to Cabigas evidenced by a registration in the Register if Deeds Jabil
discovered the subsequent sale by Dignos and asked the court to cancel the 2nd
sale RTC: declared that the 2nd sale to Cabigos is null and void CA: affirmed the
decision of the RTC
Issue: W/N the 1st sake between DIgnos and Jabil is a valid contract of sale W/N
there was a valid rescission of 1st sale by the subsequents 2nd sale to Cabigos
Held: It is valid contract of sale and not a contract to sell Nowhere in the contract
did the parties stipulate that the title is reserved in the vendor until full payment
There is also no stipulation giving the vendor the right to unilaterally rescind the
contract
No rescission of the 1st contract Dignos never notified Jabil by notarial act that
they were rescinding the contract neither was there a case filed in court to rescind
the contract The contention of Dignos that there was a certain emissiary of Jabil
which informed him Jabil agreed for Dignos to preceed to the 2ns sale is wrong.
It is required that acts and contract which have for their object the extinguishment
of real rights over an immovable must appear in a public document Also, a slight
delay in the perfomance of the obligation of one party is not a sufficient ground for
rescission It is required by equity and justice that Jabil be given addition extention
to pay the P4,000 balance and 1 month delay.
DIGNOS v CA
FACTS: Dignos is the owner of a parcel of land in LapuLapu City, which they sold to
Jabil for P28,000, payable in 2 installments and with an assumption of indebtedness
with First Insular Bank of Cebu for P12,000. However, Dignos also sold the same
land in favor of Cabigas, who were US citizens, for P35,000. A Deed of Absolute Sale
was executed in favor of the Cabigas spouses. Jabil filed a suit against Dignos with
CFI of Cebu. RTC ruled in favor of Jabil and declared the sale to Cabigas null and
void. On appeal, CA affirmed RTC decision with modification.
ISSUE: W/N the contract between Dignos and Jabil is a contract of sale (as opposed
to a contract to sale)
HELD: YES. A deed of sale is absolute in nature although denominated as a Deed
of Conditional Sale where nowhere in the contract in question is a proviso or
stipulation to the effect that title to the property sold is reserved in the vendor until
full payment of the purchase price, nor is there a stipulation giving the vendor the
right to unilaterally rescind the contract the moment the vendee fails to pay within
a fixed period. In the present case, there is no stipulation reserving the title of the
property on the vendors nor does it give them the right to unilaterally rescind the
contract upon non-payment of the balance thereof within a fixed period. While
there was no constructive delivery of the land sold in the present case, as subject
Deed of Sale is a private instrument, it is beyond question that there was actual
delivery thereof. As found by the trial court, the Dignos spouses delivered the
possession of the land in question to Jabil as early as 27 March 1965 so that the
latter constructed thereon Sallys Beach Resort also known as Jabils Beach Resort
in March, 1965; Mactan White Beach Resort on 15 January 1966 and Bevirlyns
Beach Resort on 1 September 1965. Such facts were admitted by the Dignos
spouses
Facts:
A lot No. 1109 was adjudicated in favor of spouses Caballero thru a
Deed of Sale. They sold to petitioner said lot on the basis of Tax Declaration
covering the said property. In the Deed of Sale, it is stated that the parcel of
land sold to Carmen Del Prado only covers 4,000 square meters while the
total area of the said lot is 14,000 square meters.
Issue:
Whether or Not the sale of the land was for lump sum or not
Held:
The court reiterated the rulings in Esguerra v. Trinidad; In sales
involving real estate, the parties may choose between two types of pricing
agreement:
Unit price contract, where in the purchase price is determined by way of
reference to stated rate per area.
Lump sum, contract which states a full purchase price for an immovable, the
area of which may be declared based on the estimate or where both the area
and boundaries are stated.
In the instant case the sale of the land was for lump sum because the
parties agreed to purchase the land at P 40,000 for pre-determined area of
4,000 square meters, more or less, with boundaries stated therein. In a
contract of sale of land in a mass, the specific boundaries stated in the
contract prevails over any other statement with respect to the area contained
within its boundaries.
Jose and Dominador were brothers of the private respondent and they
co-owned a registered property. Jose and Dominador sold their share which
is the eastern portion of the land to Adelfa. Thereafter, Adelfa expressed
interest in buying the western portion of the property from private
respondents. Accordingly, an exclusive Option to Purchase was executed
between Adelfa and private respondents and an option money of fifty-
thousand pesos was given to the latter. Before Adelfa could make payments,
it received summons as a civil case was filed against Jose, Dominador and
Adelfa by the nephews and nieces of private respondents. As a consequence,
Adelfa informed the private respondents that it would hold payment of the
full purchase price and suggested that they settle the case with their said
nephews and nieces. Salud did not heed the suggestion; respondent
informed Atty. Bernardo that they are cancelling the transaction. He further
made some offers but they were all rejected.
When the case was dismissed, private respondents executed a Deed of
Conditional Sale in favor of Chua, over the same property so they rejected
the offer of Adelfa to purchase the same. The private respondents sent a letter
informing Adelfa about the sale and they also enclosed a check which
represent the option money paid by Adelfa.
ISSUE:
WON the agreement between ADELFA and Private Respondents was
strictly an option contract.
HELD:
The agreement between the parties is a contract to sell and not just a
mere option contract or a contract of sale.
In the case at bar, the obligation of petitioner to pay 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. This is distinctly made
manifest in the contract itself as an integral stipulation, compliance with
which could legally and definitely be demanded from petitioner as a
consequence. The term balance connotes a remainder or something
remaining from the original total sum already agreed upon. The alleged
option money in the case at bar was actually an earnest money which was
intended to form part of the purchase price. The amount was not distinct
from the cause or consideration for the sale of the property, but was itself a
part of the purchase price. It is a statutory rule that whenever earnest money
is given in a contract of sale, it shall be considered as part of the price and as
a proof of the perfection of the contract.
ADELFA PROPERTIES INC v CA
FACTS: Rosario Jimenez-Castaneda, Salud Jimenez and their brothers, Jose
and Dominador Jimenez, were the registered co-owners of a parcel of land
in Las Pias. In 1988, Jose and Dominador sold their share consisting of 1/2
of said parcel of land, specifically the eastern portion thereof, to Adelfa
Properties. Subsequently, a Confirmatory Extrajudicial Partition
Agreement was executed by the Jimenezes, wherein the eastern portion of
the subject lot, was adjudicated to Jose and Dominador Jimenez, while the
western portion was allocated to Rosario and Salud Jimenez. Thereafter,
Adelfa Properties expressed interest in buying the western portion of the
property from Rosario and Salud. Accordingly, in 1989, an Exclusive Option
to Purchase was executed between the parties, with the condition that the
selling price shall be P2.86M, that the option money of P50,000 shall be
credited as partial payment upon the consummation of sale, that the balance
is to be paid on or before 30 November 1989, and that in case of default by
Adelfa Properties to pay the balance, the option is cancelled and 50% of the
option money shall be forfeited and the other 50% refunded upon the sale of
the property to a third party. Meanwhile, a complaint was filed by the
nephews and nieces of Rosario and Salud against Jose and Dominador for
annulment of the deed of sale in favor of Household Corporation and
recovery of ownership of the property. As a consequence, Adelfa Properties
held payment of the full purchase price and suggested that they settle the
case with their nephews and nieces. In 1990, Adelfa Properties caused to
be annotated on the TCT the exclusive option to purchase. On the same day,
Rosario and Salud executed a Deed of Conditional Sale in favor of Emylene
Chua over the same parcel of land for P3M, of which P1.5M was paid to the
former on said date, with the balance to be paid upon the transfer of title to
the specified 1/2 portion. Atty. Bernardo wrote Rosario and Salud informing
the latter that in view of the dismissal of the case against them, Adelfa
Properties was willing to pay the purchase price, and he requested that the
corresponding deed of absolute sale be executed. This was ignored by
Rosario and Salud. Jimenez counsel sent a letter to Adelfa Properties
enclosing therein a check for P25,000.00 representing the refund of 50% of
the option money paid under the exclusive option to purchase. Rosario and
Salud then requested Adelfa Properties to return the owners duplicate copy
of the certificate of title of Salud Jimenez. Adelfa Properties failed to
surrender the certificate of title. Rosario and Salud Jimenez filed a petition
for the annulment of contract, while Emylene Chua, the subsequent
purchaser of the lot, filed a complaint in intervention. RTC ruled in favor of
the Jimenezes and CA affirmed.
ISSUE: W/N the contract between the Jimenezes and Adelfa Properties is an
option contract
HELD: NO. The alleged option contract is a contract to sell, rather than a
contract of sale. The distinction between the two is important for in contract
of sale, the title passes to the vendee upon the delivery of the thing sold;
whereas in a contract to sell, by agreement the ownership is reserved in the
vendor and is not to pass until the full payment of the price. In a contract of
sale, the vendor has lost and cannot recover ownership until and unless the
contract is resolved or rescinded; whereas in a contract to sell, title is
retained by the vendor until the full payment of the price, such payment
being a positive suspensive condition and failure of which is not a breach but
an event that prevents the obligation of the vendor to convey title from
becoming effective. Thus, a deed of sale is considered absolute in nature
where there is neither a stipulation in the deed that title to the property sold
is reserved in the seller until the full payment of the price, nor one giving the
vendor the right to unilaterally resolve the contract the moment the buyer
fails to pay within a fixed period. The parties never intended to transfer
ownership to Adelfa Properties to completion of payment of the purchase
price, this is inferred by the fact that the exclusive option to purchase,
although it provided for automatic rescission of the contract and partial
forfeiture of the amount already paid in case of default, does not mention
that Adelfa Properties is obliged to return possession or ownership of the
property as a consequence of non-payment. There is no stipulation anent
reversion or reconveyance of the property in the event that petitioner does
not comply with its obligation. With the absence of such a stipulation, it may
legally be inferred that there was an implied agreement that ownership shall
not pass to the purchaser until he had fully paid the price. Article 1478 of the
Civil Code does not require that such a stipulation be expressly made.
Consequently, an implied stipulation to that effect is considered valid and
binding and enforceable between the parties. A contract which contains this
kind of stipulation is considered a contract to sell. Moreover, that the parties
really intended to execute a contract to sell is bolstered by the fact that the
deed of absolute sale would have been issued only upon the payment of the
balance of the purchase price, as may be gleaned from Adelfa Properties
letter dated 16 April 1990 wherein it informed the vendors that it is now
ready and willing to pay you simultaneously with the execution of the
corresponding deed of absolute sale.
Issue:
WON the Deed of Sale is valid when the minors presented themselves
that they were of legal age.
Held:
The courts lay down that such sale of real estate was still valid since it
was executed by minors who have passed the age of puberty adolescence and
are near the adult age and that the minors pretended that they already
reached their majority. Under Art 38, Minority, insanity or imbecility, the
state of being deaf mute, prodigality and civil interdiction are mere
restrictions on the capacity to act and do not exempt the incapacitated person
from certain obligations as when the latter arise from his acts of from
property relations such as easements. Also these minors cannot be permitted
afterwards to excuse themselves from compliance with the obligation
assumed by them or seek their annulment. This is in accordance with the
provisions of the law on estoppel.
G.R. No. L-1720 March 4, 1950
SIA SUAN and GAW CHIAO
vs.
RAMON ALCANTARA
Facts:
Rufino Alcantara and his sons Damaso Alcantara and Ramon
Alcantara conveyed to Sia Suan five parcels of land. Ramon Alcantara was
then 17 years, 10 months and 22 days old. On August 27, 1931, Gaw Chiao
(husband of Sia Suan) received a letter from Francisco Alfonso, attorney of
Ramon Alcantara, informing Gaw Chiao that Ramon Alcantara was a minor
and accordingly disavowing the contract. After being contacted by Gaw
Chiao, however, Ramon Alcantara executed an affidavit in the office of Jose
Gomez, attorney of Gaw Chiao, wherein Ramon Alcantara ratified the deed
of sale. On said occasion Ramon Alcantara received from Gaw Chiao the sum
of P500. In the meantime, Sia Suan sold one of the lots to Nicolas Azores
from whom Antonio Azores inherited the same.
On August 8, 1940, an action was instituted by Ramon Alcantara in the
Court of First Instance of Laguna for the annulment of the deed of sale as
regards his undivided share in the two parcels of land covered by certificates
of title Nos. 751 and 752 of Laguna. Said action was against Sia Suan and her
husband Gaw Chiao, Antonio, Azores, Damaso Alcantara and Rufino
Alcantara (the latter two being, respectively, the brother and father of Ramon
Alcantara appealed to the Court of Appealed which reversed the decision of
the trial court, on the ground that the deed of sale is not binding against
Ramon Alcantara in view of his minority on the date of its execution,
Issue:
WON the deed of sale should be annulled because one of the parties in
the contract is minor.
Held:
The court ruled that Ramon Alcantara is not allowed to annul such
deed, because he already ratified it. The letter written by Alcantara informing
the buyers about his minority constituted an effective disaffirmance of the
sale and that the choice to disaffirm will not by itself avoid the contract until
the courts adjudge the agreement to be invalid, said notice shielded Ramon
from laches and consequent estoppel. Ramon may have executed his acts in
bad faith because he earned money from Gaw Chiao as a result of the sale
and its ratification, yet the summons the courts to annul the sale because he
executed it while he is a minor.
Facts:
Petitioners Carmelo Baurmann Inc. leased its parcel of land with two-
story building to respondent Mayfair theater Incorporated. They entered a
contract which provides that if the lessor should desire to sell the property,
the lessee shall be given 30-days exclusive option to purchase the same.
Carmelo informed Mayfair that they have an intention to sell the property to
EQUITORIAL. Mayfair made known its interest to buy the property but only
to the extent of the leased premises. Notwithstanding Mayfairs intention,
Carmelo sold the property to the petitioner company.
Issue:
WON the sale of the property to Equatorial is valid.
Held:
The sale of the property should be rescinded because Mayfair has the
right of first refusal. Both Equatorial and Carmelo are in bad faith because
they knew of the stipulation in the contract regarding the right of first refusal.
The stipulation is a not an option contract but a right of first refusal
and as such the requirement of a separate consideration for the option, has
no applicability in the instant case. The consideration is built in the
reciprocal obligation of the parties.
In reciprocal contract, the obligation or promise of each party is the
consideration for that of the other. (Promise to lease in return of the right to
first refusal)
With regard to the impossibility of performance, only Carmelo can be
blamed for not including the entire property in the right of first refusal. Court
held that Mayfair may not have the option to buy the property. Not only the
leased area but the entire property.
CARBONELL v CA
FACTS: Poncio, a Batanes native, owned a parcel of land, which he offered to
sell to Carbonell and Infante. The land was mortgaged to Republic Bank.
Poncio and Carbonell agreed to the sale of the land, and the latter assumed
to pay the mortgage in favor of the bank. Poncio and Carbonell executed an
instrument where the latter allowed the former to remain in the premises in
spite of the sale for a period of 1 year. Later on, when the Formal Deed of Sale
was to be executed, Poncio told Carbonell that he could no longer proceed
with the sale as he had already sold the same to Infante for a better price.
Carbonell immediately sought to register adverse claim; 4 days later, Infante
registered the sale with the adverse claim annotated thereto. Infante
thereafter introduced significant improvements on the property. They now
dispute ownership over the said land.
ISSUE: Who has a better title, Carbonell or Infante?
HELD: CARBONELL. In order to claim the benefit of Art. 1544, the buyer of
realty must register the property in good faith. It is a pre-condition to a
superior title. In this case, Infante was not in good faith, thus the prior sale
to Carbonell must prevail. Infante registered her claim 4 days after the
adverse claim was registered, she had notice that Carbonell paid off the
mortgage debt as the mortgage passbook was already in his possession. She
likewise ignored Carbonell and refused to talk to here. These are badges of
bad faith that taint her registration.