Manila Metal Container Corp. v.

PNB, 511 SCRA 444 (2006) DIGEST

Lessons Applicable: Doctrine of Centralized Management: Powers of Board of Directors (Corporate
Law)
 Doctrine of Centralized Management (Corporate Law)
 Price (Sales)
 Earnest Money (Sales)
FACTS:
 Manila Metal Corp. executed a real estate mortgage (TCT. 32098) as a security for its loan from PNB
amounting to 900,000 php, later on 1,000,000 php and 653,000 php
 Aug. 5, 1982: PNB filed a petition for extrajudicial foreclosure for the property to be sold at a public
auction 911,532.21 php (outstanding as of June 30) + interest + attorney's fees
 Sept. 2, 1982: PNB won the public auction at 1,000,000 php
 Feb. 17, 1983: Certificate of Sale was issued and registered at the Registry of Deeds and was
annotated at the dorsal portion of the title (Redeemable until Feb 17,1983)
 Petitioner requested 1 year extension until Feb 17,1984 but was rejected by PNB saying it is their
policy not to accept partial redemption
 Jun. 1,1984: Since petitioner failed to redeem, TCT. 32098 was cancelled and a new title was issued in
favor of PNB
 Meanwhile, Special Assets Management Department (SAMD) had prepared a statement of account as
of Jun 25,1984 amounting to 1,574,560.47 php (bid price + interest + advances of insurance premiums +
advances on relaty taxes + reg. exp. +misc. exp + piblication cost)
 Petitioner deposited 725,000 php as deposit to repurchase and was issued an O.R.
 PNB management rejected the recommendation of SAMD and demanded that petitioner pay the markt
value of 2,660,000 php.
 Jun 24, 1984: PNB informed petitioner that its B.O.D had agreed to accept its offer to purchase but at
1,931,389.53 less the 725,000 php.
 PNB President did not conform to the letter but merely indicated that he has received it.
 Petitioner rejected this since PNB has already accepted its downpayment so it can no longer
increase the price.
 PNB also rejected petitioners payment for the balance.
 Petitioner filed a complaint against PNB for Annulment of Mortgage and Mortgage Foreclosure,
Delivery of Title, or Specific Performance with Damages
 CA affirmed RTC: Favored PNB and demanded that it refund the 725,000 php (no sale because no
meeting of the minds in terms of price)
 Lot was later transferred to its PNB President Bayani Gabriel
 Petitioner filed a petition for certiorari
ISSUE:
1. W/N the statement of account by SAMD is only a recommendation subject to the approval of the
BOD - YES
2. W/N there was a contract of sale - NO
3. W/N earnest money establishes a contract of sale - NO
HELD: Denied. Costs Against Petitioner.
1. YES
 Art. 1318 of NCC:
 no contract unless the following requisites concur:
 Consent of the contracting parties;
 Object certain which is the subject matter of the contract;
 Cause of the obligation which is established
 The fixing of the price can never be left to the decision of one of the contracting parties. But a price
fixed by one of the contracting parties, if accepted by the other, gives rise to a perfected sale.
 When there is merely an offer by one party without acceptance of the other, there is no contract.
2. NO
 Section 23 of the Corporation Code:
 corporate powers of all corporations shall be exercised by the board of directors. Just as a
natural person may authorize another to do certain acts in his behalf, so may the board of directors of a
corporation validly delegate some of its functions to individual officers or agents appointed by it. Thus,
contracts or acts of a corporation must be made either by the board of directors or by a corporate agent
duly authorized by the board. Absent such valid delegation/authorization, the rule is that the declarations
of an individual director relating to the affairs of the corporation, but not in the course of, or connected
with the performance of authorized duties of such director, are held not binding on the corporation.
 a corporation can only execute its powers and transact its business through its:
 Board of Directors
 officers and agents when authorized by:
 a board resolution;or
 its by-laws
3. NO
 ART. 1482. Whenever earnest money is given in a contract of sale, it shall be considered as part of the
price and as proof of the perfection of the contract
 The deposit of P725,000 was accepted by PNB on the condition that the purchase price is still subject
to the approval of the PNB Board
 Absent proof of the concurrence of all the essential elements of a contract of sale, the giving of earnest
money cannot establish the existence of a perfected contract of sale.

Tayag v. Lacson, 426 SCRA 282 (2004)

Facts:
 In March 1996 a group of farmer-tenants on three parcels of land owned by the Lacsons assigned
to petitioner Tayag their rights as tenants/tillers for p50/sqm.
 The said amount would be payable “when the legal impediments to the sale of the property to the
petitioner no longer existed.” Tayag would have exclusive rights to purchase the property if and
when the Lacsons agreed to sell the property.
 Tayag gave varied sums of money to the farmers as partial payments, and the farmers issued
receipts.
 Sometime later Tayag discovered that the farmers changed their minds and would be selling their
rights to the Lacsons instead, prompting Tayag to pray for Injunction against the farmers and
Lacson.
 In their defense, the Lacsons claimed that they did not induce the farmers to violate their
contracts with Tayag, and that since the farmers were merely tenants, they had no right to enter into
any transactions involving Lacson properties without the owners’ consent.

Issue: WON there was a valid option contract between Tayag and the farmers by virtue of the deeds of
assignment. NO

Held:

Option contract defined

An option is a contract by which the owner of the property agrees with another person that he shall have
the right to buy his property at a fixed price within a certain time or under, or in compliance with certain
terms and conditions, or which gives to the owner of the property the right to sell or demand a sale. It
imposes no binding obligation on the person holding the option, aside from the consideration for the offer.
Until accepted, it is not, properly speaking, treated as a contract.

The second party gets in praesenti, not lands, not an agreement that he shall have the lands, but the right
to call for and receive lands if he elects.
Until accepted, it is not, properly speaking, treated as a contract. An option contract is a separate and
distinct contract from which the parties may enter into upon the conjunction of the option.

Farmers had no right to grant Tayag the option/right to buy the property as they were merely
tenants
In this case, the defendants-tenants-subtenants, under the deeds of assignment, granted to the petitioner
not only an option but the exclusive right to buy the landholding. But the grantors were merely the
defendants-tenants, and not the respondents, the registered owners of the property. Not being the
registered owners of the property, the defendants-tenants could not legally grant to the petitioner the
option, much less the "exclusive right" to buy the property. Nemo dat quod non habet, literally meaning
"no one gives what he doesn't have" applies in this case.

Deeds of Assignment not valid; conditions stipulated did not arise

The full payment of 50/sqm under Tayag and the farmers’ ‘’option contracts’ were on the following
conditions:
- that the Lacsons would agree to sell their property
- that the deeds of assignment were subject to the approval of DAR
- that there was a prohibitive period within which the farmers were able to sell their interest in the land

There is no showing in Tayag’s complaint that the farmers had agreed to sell their property, and that the
legal impediments to the agreement no longer existed. They had yet to submit the Deeds of Assignment
to the Department of Agrarian Reform which, in turn, had to act on and approve or disapprove the same.
Unless the DAR approves the deeds, Tayag has no right to enforce the same by asking the trial court to
fix a period within which to pay.

Citation:
 G.R. No. 134971
 March 25, 2004
 HERMINIO TAYAG, petitioner,vs.AMANCIA LACSON, ROSENDO LACSON, ANTONIO LACSON,
JUAN LACSON, TEODISIA LACSON- ESPINOSA and THE COURT OF APPEALS, respondents.

Villamor v. CA, 202 SCRA 607 (1991)

Facts:
 In 1971, the Reyeses sold a portion of their lot in Caloocan City to the sps
Villamor.
 Later that year, they executed a Deed of Option wherein they stated that they
have offered the remaining portion of the lot for sale, and that the Villamor spouses
agreed to buy the same.
 The option to buy and sell was to be exercised ‘whenever the need of such sale
arises, either on our part or on the part of the spouses (Julio) Villamor and Marina
V. Villamor, at the same price of P70.00 per square meter.’
 The Deed also mentioned that the cause or the impelling reason on the part of
Reyes executing the deed of option as appearing in the deed itself is the Villamor's
having agreed to buy the 300 square meter portion of private respondents' land at
P70.00 per square meter "which was greatly higher than the actual reasonable
prevailing price."
 In 1984, the Villamors offered to repurchase the portion of the lot they sold to the
Villamor spouses in 1971.
  However, the Vilamor spouses decided they would rather buy the remaining
portion and wanted to exercise their option as provided for in the Deed of Option.
In 1984, they filed a case for specific performance against the Reyeses.
 The RTC ruled in favor of the Villamors and ordered the Reyeses to sell the
remaining portion.
 The CA reversed, declaring the option contract to be void as it lacked a valid and
distinct consideration.

Issues: WON there was a valid and distinct consideration for the option contract? YES
WON the option may still be enforced? NO

Held:
The consideration in the contract was the price difference
The CA failed to give due consideration to the Villamors' evidence which shows that in
1969 the Villamor spouses bough an adjacent lot from the brother of Macaria Labing-isa
for only P18.00 per square meter which the Reyeses did not rebut. Thus, expressed in
terms of money, the consideration for the deed of option is the difference between the
purchase price of the 300 square meter portion of the lot in 1971 (P70.00 per sq.m.) and
the prevailing reasonable price of the same lot in 1971.

Whatever it is, (P25.00 or P18.00) though not specifically stated in the deed of option,
was ascertainable. The Villamor’s allegedly paying P52.00 per square meter for the
option may, as opined by the appellate court, be improbable but improbabilities do not
invalidate a contract freely entered into by the parties.

The Reyeses were also given the right to sell

The "deed of option" entered into by the parties in this case had unique features.
Ordinarily, an optional contract is a privilege existing in one person, for which he had
paid a consideration and which gives him the right to buy, for example, certain
merchandise or certain specified property, from another person, if he chooses, at any
time within the agreed period at a fixed price.

The "deed of option" went on and stated that the sale of the other half would be made
"whenever the need of such sale arises, either on our (Reyeses) part or on the part of
the Spouses Julio Villamor and Marina V. Villamor. It appears that while the option to
buy was granted to the Villamors, the Reyeses were likewise granted an option to sell.
In other words, it was not only the Villamors who were granted an option to buy for
which they paid a consideration. The Reyeses as well were granted an option to sell
should the need for such sale on their part arise.

Period to exercise the option not stipulated; deemed prescribed afetr 10 years
However, the Deed of Option did not provide for the period within which the parties may
demand the performance of their respective undertakings in the instrument. The parties
could not have contemplated that the delivery of the property and the payment thereof
could be made indefinitely and render uncertain the status of the land. The failure of
either parties to demand performance of the obligation of the other for an unreasonable
length of time renders the contract ineffective.

Under Article 1144 (1) of the Civil Code, actions upon written contract must be brought
within ten (10) years. The Deed of Option was executed on November 11, 1971. The
acceptance, as already mentioned, was also accepted in the same instrument. The
complaint in this case was filed by the Villamors on July 13, 1987, seventeen (17) years
from the time of the execution of the contract. Hence, the right of action had prescribed.

To allow the Villamors to demand the delivery of the property subject of this case
thirteen (13) years or seventeen (17) years after the execution of the deed at the price
of only P70.00 per square meter is inequitous, considering the rise of prices of real
estate in Manila.

Sanchez v. Rigos, 45 SCRA 368 (1972)

Facts:
 In 1961, Rigos and Sanchez executed a document titled ‘Option to Purchase’
whereby Rigos bound herself to sell a parcel of land to Sanchez for 1.5k pesos
within two years from the execution of the contract. This option contract had no
distinct consideration.
 Sanchez made several tenders of the purchase price to Rigos, but Rigos ignored
them. Sanchez consigned the payment in court less than 2 months before the
expiration of the period to exercise his right.
 In other words, Sanchez accepted the optino before Rigos could withdraw the
offer.
 The RTC ruled in favor of Sanchez, ordering Rigos to accept the payment
of the price.
 On appeal, Rigos claims that she could validly withdraw the option given
to Sanchez, even if Sanchez has opted to exercise his right, since the
contract was not supported by a separate and distinct consideration (ruling in
Southwestern Sugar v Altantic Gulf).

Issue: WON Rigos is bound by Sanchez’ acceptance even though the option is not
supported by a separate consideration. YES

Held:
Ruling in Southwestern abandoned; acceptance of option before withdrawal
creates a binding obligation to buy and sell even if not supported by
consideration
Even if the "offer of option" is not supported by any consideration, theoption became
binding on the promissor when the promisee gave notice to it of its acceptance, and that
having accepted it within the period of option, the offer can no longer be withdrawn and
in any event such withdrawal is ineffective.

Article 1479 must be read in relation to Article 1324

ART. 1479. A promise to buy and sell a determinate thing for a price certain is
reciprocally demandable.
An accepted unilateral promise to buy or sell a determinate thing for a price certain is
binding upon the promisor if the promise is supported by a consideration distinct from
the price.

ART. 1324. When the offerer has allowed the offeree a certain period to accept, the
offer may be withdrawn any time before acceptance by communicating such withdrawal,
except when the option is founded upon consideration as something paid or promised.

In Southwestern, the Court said while 1324 was applicable to contracts in general,
Article 1479 specifically states that in unilateral contracts to sell, there is a need for the
separate consideration before the obligation to buy and sell arises.

However, this ruling was abandoned in the case of Atkins v Cua Hian Tek, where the
Court decided there was no distinction between the two articles. Both articles produced
the same effect: the promise is treated as an option which, although not binding as a
contract in itself for lack of a separate consideration, nevertheless generated a bilateral
contract of purchase and sale upon acceptance.

In other words, since there may be no valid contract without a cause or consideration,
the promisor is not bound by his promise and may, accordingly, withdraw it. Pending
notice of its withdrawal, his accepted promise partakes, however, of the nature of an
offer to sell which, if accepted, results in a perfected contract of sale.

Tuazon v. Del Rosario-Suarez

G.R. No. 168325, 13 December 2010
FACTS:

Petitioner and respondent entered into a Contract of Lease, wherein petitioner, Tuazon, will occupy
the parcel of land owned by respondent, Del Rosario-Suarez, for a period of three years. During the
effectivity of the lease, respondent sent a letter to the petitioner offering to sell the parcel of land.
She pegged the price at P37,541,000.00 and gave him two years from January 2, 1995 to decide on
the said offer. On June 19, 1997, four months after the expiration of the Contract of Lease,
respondent sold the land to Catalina Suarez-De Leon, et al. The new owners notified the petitioner
to vacate the premises on the grounds of non-payment of rentals and expiration of the Contract of
Lease. Petitioner claims that respondent violated his right to buy subject property under the principle
of right of first refusal by not giving him notice and the opportunity to by the property. Respondent
contended that the principle of right of first refusal is unavailing in this case. It is a contract of option
which was not perfected due to the failure of acceptance on the part of the respondent.

ISSUE:
WON a lessee loses his right to buy the property upon failure to accept an offer or to purchase on
time within the period stipulated.

RULING:

Yes. The case indeed involves an option contract and not a contract of a right of first refusal. What is
involved here is a separate and distinct offer made by Lourdes through a letter dated January 2,
1995 wherein she is selling the leased property to Roberto for a definite price and which gave the
latter a definite period for acceptance. Roberto was not given a right of first refusal. The letter-offer of
Lourdes did not form part of the Lease Contract because it was made more than six months after the
commencement of the lease. It is an option contract, the rules applicable are found in Articles 1324
and 1479 of the Civil Code which provides:

Art. 1324. When the offerer has allowed the offeree a certain period to accept, the offer may be
withdrawn at any time before acceptance by communicating such withdrawal, except when the
option is founded upon a consideration, as something paid or promised.

Art. 1479. A promise to buy and sell a determinate thing for a price certain is reciprocally
demandable.

An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding
upon the promissor if the promise is supported by a consideration distinct from the price.

It is clear from the provision of Article 1324 that there is a great difference between the effect of an
option which is without a consideration from one which is founded upon a consideration. If the option
is without any consideration, the offeror may withdraw his offer by communicating such withdrawal to
the offeree at any time before acceptance; if it is founded upon a consideration, the offeror cannot
withdraw his offer before the lapse of the period agreed upon.

Vazquez v. CA, 199 SCRA 102 (1991)

Facts:
 A lot of the Himalayan Cadastre was registered under the name of spouses Olea.
 October 1959: the lot was leased by respondent-spouses Olea to spouses
Vasquezz.
 September 21, 1964: the spouses Olea sold the lot to spouses Vasquez under a
Deed of Sale for the amount of P9,000.00. The Deed of Sale was duly ratified and
notarized.
 On the same day and along with the execution of the Deed of Sale, a separate
instrument, denominated as Right to Repurchase, was executed by the parties
granting spouses Olea the right to repurchase the lot for P12,000.00, likewise duly
ratified and notarized.
 January 2, 1969: spouses Olea sold the same lot to Benito Derrama, Jr., after
securing spouses Vasquez' title, for the sum of P12,000.00. Upon the protestations
of spouses Vasquez, assisted by counsel, the said second sale was cancelled after
the payment.
 January 15, 1975: Respondents Spouses Olea filed an action against the
Spouses Vasquez and Gayanelo seeking to redeem the subject property which
 was previously sold by Spouses Olea to Spouses Vasquez on September 21,
1964.
 Spouses Vasquez resisted this action for redemption on the premise that the
Right to Repurchase is just an option to buy since it is not embodied in the same
document of sale but in a separate document, and since such option is not
supported by a consideration distinct from the price, said deed for right to
repurchase is not binding upon them.
 RTC ruled against spouses Vasquez ordering them to resell the lots to spouses
Olea for the repurchase price of P24,000.00, which amount combines the price
paid for the first sale and the price paid by defendants to Benito Derrama, Jr.
 Spouses Vasquez insist that they cannot be compelled to resell the lot
contending that the nature of the sale over the said lot between them and spouses
Olea was that of an absolute deed of sale and that the Right to Repurchase can
only be either an option to buy or a mere promise on their part to resell the
property.
 They argued that since the "RIGHT TO REPURCHASE" was not supported by
any consideration distinct from the purchase price it is not valid and binding on the
petitioners pursuant to Article 1479 of the Civil Code.

Issue: WON the right of repurchase was supported by a consideration distinct from the
price. NO

Held:

It is clear that the right to repurchase was not supported by a consideration distinct from
the price
The rule is that the promisee has the burden of proving such consideration.
Unfortunately, the spouses Olea, promisees in the right to repurchase failed to prove
such consideration. They did not even allege the existence thereof in their complaint.

The Sanchez ruling is not applicable

Therefore, in order that the Sanchez case can be applied, the evidence must show that
the spouses Olea accepted the right to repurchase.

The record, however, does not show that spouses Olea accepted the "Right to
Repurchase" the land in question. The SC disagrees with the lower court's finding that
spouses Olea accepted the "right to repurchase" under the following circumstances:
... as evidenced by the annotation and registration of the same on the back of the
transfer of certificate of title in the name of appellants. As vividly appearing therein, it
was signed by appellant himself and witnessed by his wife so that for all intents and
purposes the Vasquez spouses are estopped from disregarding its obvious purpose and
intention."
The annotation and registration of the right to repurchase at the back of the certificate of
title of the petitioners cannot be considered as acceptance of the right to repurchase
Annotation at the back of the certificate of title of registered land is for the purpose of
binding purchasers of such registered land.

Purchasers of a registered land are bound by the annotations found at the back of the
certificate of title covering the subject parcel of land. In effect, the annotation of the right
to repurchase found at the back of the certificate of title over the subject parcel of land
of the private respondents only served as notice of the existence of such unilateral
promise of the petitioners to resell the same to the private respondents. This, however,
cannot be equated with acceptance of such right to repurchase by the private
respondent.

Neither can the signature of the spouses Vasquez in the document called "right to
repurchase" signify acceptance of the right to repurchase
The spouses Olea did not sign the offer. Acceptance should be made by the promisee,
in this case, the private respondents and not the promisors, the petitioners herein. It
would be absurd to require the promisor of an option to buy to accept his own offer
instead of the promisee to whom the option to buy is given.

Furthermore, the actions of the private respondents –– (a) filing a complaint to compel
re-sale and their demands for resale prior to filing of the complaint cannot be considered
acceptance.
The right of repurchase is not a right granted to the seller to the buyer
The right of repurchase is not a right granted the vendor by the vendee in a subsequent
instrument, but is a right reserved by the vendor in the same instrument of sale as one
of the stipulations of the contract. Once the instrument of absolute sale is executed, the
vendor can no longer reserve the right to repurchase, and any right thereafter granted
the vendor by the vendee in a separate instrument cannot be a right of repurchase but
some other right like the option to buy in the instant case.

While it is true that this Court in the Zulueta case found Zulueta guilty of laches, this,
however, was not the primary reason why this Court disallowed the redemption of the
property by Zulueta. It is clear from the decision that the ruling in the Zulueta case was
based mainly on the finding that the transaction between Zulueta and Octaviano was
not a sale with right to repurchase and that the "option to repurchase was but an option
to buy or a mere promise on the part of Octaviano to resell the property to Zulueta.

In the instant case, since the transaction between the spouses Vasquez and private
respondents Olea was not a sale with right to repurchase, the private respondents
cannot avail of Article 1601 of the Civil Code which provides for conventional
redemption.

NIETES V. CA (August 18, 1972)

FACTS:
Petitioner Aquilino Nietes and respondent Dr.Pablo Garcia entered a “Contract of Lease and Option to
Buy” where the latter agreed to lease his Angeles Educational Institute to the former.

The rent is set to P5000 per year up to 5 years and that the LESSOR agrees to give the LESSEE an
option to buy the land and the school building, for P100,000 within the period of the Contract of Lease.

Nietes paid Garcia P2200 on Dec.16, 1962 for partial payment on the purchase of the property. Through
their lawyers, Garcia decided to rescind the contract while Nietes expresses his intention to buy the
property.

Nietes also deposited 84K to a bank corresponding to the balance for the purchase of the property.

ISSUE:

WON Nietes can aval of his option to buy the property.

HELD:

Nietes can avail of the option to buy because he already express his intention to buy the property before
the termination of the contract. The contention of the respondent that the full price of the property should
first be paid before the option could be exercised is of no merit.

The contract doesn’t provide such stipulation and as such, the provision of reciprocal obligations in
oblicon should prevail. 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 had validly and effectively exercised his option to buy the property of Dr. Garcia, at least, on
December 13, 1962, when he acknowledged receipt from Mrs. Nietes of the sum of P2,200 then delivered
by her "in partial payment on the purchase of the property" described in the "Contract of Lease with
Option to Buy"

CARCELLER V. CA (February 10, 1999)

FACTS:

Respondent State Investment Houses Inc. has a parcel of land in Cebu City leased to petitioner Jose
Ramon Caceller with an option to purchase valid until the expiration of the lease contract.
3weeks before the expiration of the contract, petitioner made a request to the respondent for the
extension of the lease contact so he can have an ample time to raise enough funds to avail of the option
of sale.

Respondent denied the request and a month after the expiration of the contract, petitioner made known
his intention to buy the property.

Respondent reiterated the provisions in the contract and asked the petitioner to leave the property, which
will now be offered to the general public for a higher price.

ISSUE:

WON can still exercise his option of sale even after the time to do such has already lapsed.

HELD:

The contract must be interpreted together with the intention of the parties. The letter of the plaintiff to the
respondent requesting for an extension is sufficient proof of his intent to avail of the option of sale.

In contractual relations, the law allows the parties reasonable leeway on the terms of their agreement,
which is the law between them. When petitioner made his intention to buy known to the buyer one month
after the expiration of contract is within a reasonable time- frame.

Petitioner may buy the property but not anymore to the price stated in the contract. As such, respondent
may increase the price of the land but only to a reasonable and fair market value.

An option is a preparatory contract in which one party grants to the other, for a fixed period and under
specified conditions, the power to decide, whether or not to enter into a principal contract. It binds the
party who has given the option, not to enter into the principal contract with any other person during the
period designated, and, within that period, to enter into such contract with the one to whom the option was
granted, if the latter should decide to use the option. It is a separate agreement distinct from the contract
which the parties may enter into upon the consummation of the option.

ANG YU ASUNCION v. CA, GR No. 109125, 1994-12-02

Facts:

On July 29, 1987 a Second Amended Complaint for Specific Performance

was filed by Ann Yu Asuncion and Keh Tiong, et al., against Bobby Cu
Unjieng, Rose Cu Unjieng and Jose Tan before the Regional Trial Court,
Branch 31, Manila in Civil Case No. 87-41058, alleging,... among others,
that plaintiffs are tenants or lessees of residential and commercial
spaces owned by defendants described as Nos. 630-638 Ongpin Street,
Binondo, Manila; that they have occupied said spaces since 1935 and
have been religiously paying the rental and complying with... all the
conditions of the lease contract; that on several occasions before
October 9, 1986, defendants informed plaintiffs that they are offering to
sell the premises and are giving them priority to acquire the same; that
during the negotiations, Bobby Cu Unjieng offered a price... of P6-million
while plaintiffs made a counter offer of P5-million; that plaintiffs
thereafter asked the defendants to put their offer in writing to which
request defendants acceded; that in reply to defendants' letter, plaintiffs
wrote them on October 24, 1986 asking that they... specify the terms and
conditions of the offer to sell; that when plaintiffs did not receive any
reply, they sent another letter dated January 28, 1987 with the same
request; that since defendants failed to specify the terms and conditions
of the offer to sell and because of... information received that defendants
were about to sell the property, plaintiffs were compelled to file the
complaint to compel defendants to sell the property to them.

Issues:

Buen Realty can be held bound by the writ of execution by virtue of the
notice of lis pendens, carried over on TCT No. 195816 issued in the name
of Buen Realty, at the time of the... latter's purchase of the property on 15
November 1991 from the Cu Unjiengs.

Ruling:

We affirm the decision of the appellate court.

An obligation is a j... uridical necessity to give, to do or not to do (Art.

1156, Civil Code). The obligation is constituted upon the concurrence of
the essential elements thereof, viz: (a) The vinculum juris or juridical tie
which is the efficient... cause established by the various sources of
obligations (law, contracts, quasi-contracts, delicts and quasi-delicts); (b)
the object which is the prestation or conduct, required to be observed (to
give, to do or not to do); and (c) the subject-persons... who, viewed from
the demandability of the obligation, are the active (obligee) and the
passive (obligor) subjects.

Among the sources of an obligation is a contract (Art. 1157, Civil Code),

which is a meeting of minds between two persons whereby one binds
himself, with respect to the other, to give something or to render some
service (Art. 1305, Civil Code). A contract undergoes various... stages that
include its negotiation or preparation, its perfection and, finally, its
consummation. Negotiation covers the period from the time the
prospective contracting parties indicate interest in the contract to the...
time the contract is concluded (perfected). The perfection of the contract
takes place upon the concurrence of the essential elements thereof. A
contract which is consensual as to perfection is so established upon a
mere meeting of minds, i.e., the... concurrence of offer and acceptance,
on the object and on the cause thereof. A contract which requires, in
addition to the above, the delivery of the object of the agreement, as in a
pledge or commodatum, is commonly referred to as a... real contract. In a
solemn contract, compliance with certain formalities prescribed by law,
such as in a donation of real property, is essential in order to make the
act valid, the prescribed form being thereby an essential element...
thereof. The stage of consummation begins when the parties perform
their respective undertakings under the contract culminating in the
extinguishment thereof.

Until the contract is perfected, it cannot, as an independent source of

obligation, serve as a binding juridical relation. In sales, particularly, to
which the topic for discussion about the case at bench belongs, the
contract is perfected when a person, called the... seller, obligates himself,
for a price certain, to deliver and to transfer ownership of a thing or right
to another, called the buyer, over which the latter agrees. Article 1458 of
the Civil Code provides:

"Art. 1458. By the contract of sale one of the contracting parties obligates
himself to transfer the ownership of and to deliver a determinate thing,
and the other to pay therefor a price certain in money or its equivalent.

"A contract of sale may be absolute or conditional."

EQUATORIAL REALTY V. MAYFAIR (November 21, 1996)
FACTS:

Petitioner Carmelo and Bauermann Inc. leased its parcel of land with 2-storey building to respondent
Mayfair Theater Inc.

They entered a contract which provides that if the LESSOR should desire to sell the leased premises, the
LESSEE shall be given 30-days exclusive option to purchase the same.

Carmelo informed Mayfair that it will sell the property to Equatorial. Mayfair made known its interest to buy
the property but only to the extent of the leased premises.

Notwithstanding Mayfair’s intention, Carmelo sold the property to Equatorial.

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.

11. Parañaque Kings Enterprises v. Court of Appeals, 268 SCRA 727 (1997)

Facts:
 PR Catalina L. Santos is the owner of 8 parcels of land located at Parañaque,
Metro Manila.
 November 28, 1977: a certain Frederick Chua leased the subject property from
defendant Catalina L. Santos, the said lease was registered in the Register of
Deeds.
 February 12, 1979: Frederick Chua assigned all his rights and interest and
participation in the leased property to Lee Ching Bing, by virtue of a deed of
assignment and with the conformity of defendant Santos, the said assignment was
also registered.
 August 6, 1979: Lee Ching Bing also assigned all his rights and interest in the
leased property to Parañaque Kings Enterprises, Incorporated by virtue of a deed
of assignment and with the conformity of defendant Santos. Their contract provided
that:
 "9. That in case the properties subject of the lease agreement are sold or
encumbered, Lessors shall impose as a condition that the buyer or mortgagee
thereof shall recognize and be bound by all the terms and conditions of this lease
agreement and shall respect this Contract of Lease as if they are the LESSORS
thereof and in case of sale, LESSEE shall have the first option or priority to buy the
properties subject of the lease;"
 September 21, 1988: Catalina Santos sold the eight parcels of land subject of the
lease to defendant David Raymundo for a consideration of P5,000,000.
  Upon learning of this fact, the representative of Paranaque King wrote a letter to
defendant Santos, requesting her to rectify the error and consequently realizing the
error, she had it reconveyed to her for the same consideration of P5M.
 Only 2 days after Catalina Santos sold her properties did she reply to Paranaque
Kings’ letter saying period has lapsed.
 July 6, 1989: counsel for defendant Santos informed the petitioners Paranaque
Kings that the new owner is RAYMUNDO.
 From the preceding facts, it is clear that the sale was simulated and that there
was a collusion between the respondents Santos and Raymundo in the sales of
the leased properties (defendants SANTOS and RAYMUNDO have the same
counsel who represented both of them in their exchange of communication with
PK’s counsel, a fact that led to the conclusion that a collusion exist between them,
among others)
 Petitioner Paranaque demanded from the defendants to rectify their unlawful acts
that they committed, but defendants refused and failed to comply with plaintiffs just
and valid demands.
 RTC issued the order dismissing the complaint for lack of a valid cause of action.
CA affirmed in toto.

Issue: Is such right of first refusal enforceable by an action for specific performance?
YES
(WON the complaint filed by Paranaque Kings states a valid cause of action. YES)

Held:

Paranaque Kings was granted a first option or priority to purchase the subject
property (Based on the Par. 9 of the Lease Contract)
A careful examination of the complaint filed by Paranaque Kings reveals that it
sufficiently alleges an actionable contractual breach on the part of private respondents.

Under paragraph 9 of the contract of lease between respondent Santos and petitioner,
the latter was granted the "first option or priority" to purchase the leased properties in
case Santos decided to sell. If Santos never decided to sell at all, there can never be a
breach, much less an enforcement of such "right."

But on September 21, 1988, Santos sold said properties to Respondent Raymundo
without first offering these to petitioner. Santos indeed realized her error, since she
repurchased the properties after petitioner complained. Thereafter, she offered to sell
the properties to petitioner for P15 million, which petitioner, however, rejected because
of the "ridiculous" price. But Santos again appeared to have violated the same provision
of the lease contract when she finally resold the properties to respondent Raymundo for
only P9 million without first offering them to petitioner at such price. Whether there was
actual breach which entitled petitioner to damages and/or other just or equitable relief, is
a question which can better be resolved after trial on the merits where each party can
present evidence to prove their respective allegations and defenses.

The basis of the right of first refusal must be the current offer to sell of the seller
or offer to purchase of any prospective buyer.
Only after the optionee fails to exercise its right of first priority under the same terms
and within the period contemplated, could the owner validly offer to sell the property to a
third person, again, under the same terms as offered to the optionee.

The contention of Raymundo that he is not a privy to the contract is untenable

With respect to the contention of respondent Raymundo that he is not privy to the lease
contract, not being the lessor nor the lessee referred to therein, he could thus not have
violated its provisions, but he is nevertheless a proper party. Clearly, he stepped into the
shoes of the owner-lessor of the land as, by virtue of his purchase, he assumed all the
obligations of the lessor under the lease contract. Moreover, he received benefits in the
form of rental payments. Furthermore, the complaint, as well as the petition, prayed for
the annulment of the sale of the properties to him. Both pleadings also alleged collusion
between him and respondent Santos which defeated the exercise by petitioner of its
right of first refusal.

In order then to accord complete relief to petitioner, respondent Raymundo was a

necessary, if not indispensable, party to the case. A favorable judgment for the petitioner
will necessarily affect the rights of respondent Raymundo as the buyer of the property
over which petitioner would like to assert its right of first option to buy.

Deed of Assignment included the option to purchase

The provisions of the deeds of assignment with regard to matters assigned were very
clear. Under the first assignment between Frederick Chua as assignor and Lee Ching
Bing as assignee, it was expressly stated that:

. . . . the ASSIGNOR hereby CEDES, TRANSFERS and ASSIGNS to herein

ASSIGNEE, all his rights, interest and participation over said premises afore-
described, . . . .

And under the subsequent assignment executed between Lee Ching Bing as assignor
and the petitioner, represented by its Vice President Vicenta Lo Chiong, as assignee, it
was likewise expressly stipulated that;

. . . . the ASSIGNOR hereby sells, transfers and assigns all his rights, interest and
participation over said leased premises, . . . .

One of such rights included in the contract of lease and, therefore, in the assignments of
rights was the lessee's right of first option or priority to buy the properties subject of the
lease, as provided in paragraph 9 of the assigned lease contract. The deed of
assignment need not be very specific as to which rights and obligations were passed on
to the assignee. It is understood in the general provision aforequoted that all specific
rights and obligations contained in the contract of lease are those referred to as being
assigned. Needless to state, respondent Santos gave her unqualified conformity to both
assignments of rights.

Ruling: WHEREFORE, the petition is GRANTED. The assailed decisions of the trial
court and Court of Appeals are hereby REVERSED and SET ASIDE. The case is
REMANDED to the Regional Trial Court of Makati for further proceedings

ROSENCOR V. INQUING (March 08, 2001)

FACTS:

Respondents are tenants of a two-storey residential apartment in Tomas Morato QC. The lease was not
covered by any contract.

Lessees were verbally given by the lessors the pre-emptive right to purchase the property in case of sale.

The original lessors died and their heir also promised the lessees the same pre-emptive right to purchase.
The new lessors represented by Eufrocina de Leon demanded the lessees to vacate the property
because the building will allegedly be demolished but after the lessees declined, she sent them a letter
offering to sell the property for 2M. Lessees made a counter offer of 1M but no reply was made by the
lessors.

De leon subsequently informed the lessees that the property was already sold to Rosencor. Lessees
claimed that they were deceived because the property was already sold to Rosencor before it was offered
to them. They offered to reimburse the payment to the lessors but the offer was declined as hence, this
petition.

ISSUE:

WON the lessors should recognize the pre-emptive right of the lessees even if it was only given verbally.

HELD:

The right of first refusal is not covered by the Statute of Frauds. The application of such statute
presupposes the existence of a perfected contact which is no applicable in this case. As such, a right of
first refusal need not be written to be enforceable and can be proved by oral evidence.

Lessees have proven that the lessors admit the right of first refusal given to them when the property was
offered to them by 2M.

The prevailing doctrine is that a contract of sale entered in violation of right of first refusal is rescissible.
However, this doctrine cannot be applied here because the vendees (Rosencor) is in good faith. Under
Art.1358, recission cannot take place when things which are the object of sale is legally in possession of
third person who did not act in bad faith.

Rosencor could not have acted in bad faith because they are not aware of the right of first refusal given
verbally. Respondents should instead file for damages.

13. Vasquez v. Ayala Corp., 443 SCRA 231 (2004)

FACTS:

On April 23, 1981, spouses Vasquez entered into a MOA with Ayala Corp.
with Ayala buying from the Vazquez spouses all of the latter's shares of stock in
Conduit Development, Inc. The main asset was a property in Ayala Alabang
which was then being developed by Conduit under a development plan where
the land was divided into Villages 1, 2 and 3. The development was then being
undertaken by G.P. Construction and Development Corp. Under the MOA, Ayala
was to develop the entire property, less what was defined as the "Retained Area".
This "Retained Area" was to be retained by the Vazquez spouses. The area to be
developed by Ayala was called the "Remaining Area". In this "Remaining Area"
were 4 lots adjacent to the "Retained Area" and Ayala agreed to offer these lots
for sale to the spouses at the prevailing price at the time of purchase. After the
execution of the MOA, Ayala caused the suspension of work on Village 1 of the
project. Ayala then received a letter from Lancer General Builder Corp. in which
the latter was claiming a certain amount as subcontractor. G.P. Construction not
being able to reach an amicable settlement with Lancer, Lancer sued G.P.
Construction, Conduit and Ayala in the court. G.P. Construction and Lancer both
tried to enjoin Ayala from undertaking the development of the property. The suit
was terminated only on 1987. Taking the position that Ayala was obligated to sell
the 4 lots adjacent to the "Retained Area" within 3 years from the date of the
MOA, the Vasquez spouses sent several "reminder" letters of the approaching
so-called deadline. However, no demand after 1984, was ever made by the
Vasquez spouses for Ayala to sell the 4 lots. On the contrary, one of the letters
signed by their authorized agent categorically stated that they expected
development of Phase 1 to be completed 3 years from the settlement of the legal
problems with the previous contractor. By early 1990, Ayala finished the
development of the vicinity. The 4 lots were then offered to be sold to the
Vasquez spouses at the prevailing price in 1990. This was rejected by the
Vasquez spouses who wanted to pay at 1984 prices, thereby leading to the suit
below.

ISSUE:
 Whether or not respondent incurred default or delay in the fulfillment of its
obligation.

HELD:

No. In order that the debtor may be in default it is necessary that the
following requisites be present: (1) that the obligation be demandable and
already liquidated; (2) that the debtor delays performance; and (3) that the
creditor requires the performance judicially or extrajudicially. Under Article 1193
of the Civil Code, obligations for whose fulfillment a day certain has been fixed
shall be demandable only when that day comes. However, no such day certain
was fixed in the MOA. Petitioners, therefore, cannot demand performance after
the 3 year period fixed by the MOA for the development of the first phase of the
property since this is not the same period contemplated for the development of
the subject lots. Since the MOA does not specify a period for the development of
the subject lots, petitioners should have petitioned the court to fix the period in
accordance with Article 1197 of the Civil Code. As no such action was filed by
petitioners, their complaint for specific performance was premature, the
obligation not being demandable at that point. Accordingly, Ayala Corp. cannot
likewise be said to have delayed performance of the obligation. Even assuming
that the MOA imposes an obligation on Ayala Corp. to develop the subject lots,
within 3 years from date thereof, Ayala Corp. could still not be held to have been
in delay since no demand was made by petitioners for the performance of its
obligation. Moreover, the letters were mere reminders and not categorical
demands to perform. These letters were sent before the obligation could become
legally demandable. More importantly, petitioners waived the 3 year period as
evidenced by their agent's letter to the effect that petitioners agreed that the 3
year period should be counted from the termination of the case filed by Lancer.

14. Riviera Filipina, Inc. v. CA, 380 SCRA 245 (2002)

Facts:
Respondent Reyes executed a ten year renewable Contract of Lease with Riviera involving a
1,018 square meter parcel of land which was a subject of a Real Estate Mortgage executed by
Reyes in favor of Prudential Bank. But the loan with Prudential Bank remained unpaid upon
maturity so the bank foreclosed the mortgage thereon and emerged as the highest bidder at the
public auction sale. Reyes decided to sell the property offered it to Reviera. After seven months,
Riviera offered to buy the property but Reyes denied it and increased the price of the property.
Reyes’ counsel informed Riviera that he is selling the property for P6,000 per square meter and
to confirm their conversation, Riviera sent a letter stating his interest in buying the property for
the fixed and final price of P5,000 per square meters but Reyes did not accede to said price.

Then Reyes confided to Traballo and the latter expressed interest in buying the said property for
P5,300 per square meter but he did not have enough amount so he looked for a partner. Despite
of the impending expiration of the redemption period of the foreclosed mortgaged property and
the deal between Reyes and Traballo was not yet formally concluded, Reyes decided to approach
Riviera and requested Atty. Alinea to approach Angeles and find out if the latter was still
interested in buying the subject property and ask him to raise his offer for the purchase of the
said property a little higher but Riviera said that his offer is P5,000 per square meter so Reyes did
not agree.

Cypress and Trading Corporation, were able to come up with the amount sufficient to cover the
redemption money, with which Reyes paid to the Prudential Bank to redeem the subject property
and Reyes executed a Deed of Absolute Sale covering the subject property. Cypress and Cornhill
mortgaged the subject property to Urban Development Bank. Riviera sought from Reyes,
Cypress and Cornhill a resale of the subject property to it claiming that its right of first refusal
under the lease contract was violated but his attempts were unsuccessful. Riviera filed the suit to
compel Reyes, Cypress, Cornhill and Urban Development Bank to transfer the disputed title to
the land in favor of Riviera upon its payment of the price paid by Cypress and Cornhill.

Issue:
Whether or not petitioner can still exercise his “right of first refusal”.

Held:
No. The held that in order to have full compliance with the contractual right granting petitioner
the first option to purchase, the sale of the properties for the price for which they were finally
sold to a third person should have likewise been first offered to the former. Further, there should
be identity of terms and conditions to be offered to the buyer holding a right of first refusal if
such right is not to be rendered illusory. Lastly, the basis of the right of first refusal must be the
current offer to sell of the seller or offer to purchase of any prospective buyer. Thus, the
prevailing doctrine is that a right of first refusal means identity of terms and conditions to be
offered to the lessee and all other prospective buyers and a contract of sale entered into in
violation of a right of first refusal of another person, while valid, is rescissible.

15. Macion v. Guiani, 225 SCRA 102 (1993)

N/A

VILLONCO REALTY COMPANY v. BORMAHECO, GR No. L-26872, 1975-07-25

Facts:

Francisco N. Cervantes and his wife, Rosario P. Navarra-Cervantes, are the

owners of Lots 3, 15 and 16 located at 245 Buendia Avenue

Cervantes is the president of Bormaheco, Inc., a dealer and importer of

industrial and agricultural machinery. The entire three lots are occupied
by the building, machinery and equipment of Bormaheco, Inc. and are
adjacent to the property of Villonco Realty Company... situated at 219
Buendia Avenue.
In the early part of February, 1964 there were negotiations for the sale of
the said lots and the improvements thereon between Romeo Villonco of
Villonco Realty Company "and Bormaheco, Inc., represented by its
president, Francisco N. Cervantes, through the intervention of Edith

Perez de Tagle, a real estate broker."

During the negotiations, Villonco Realty Company assumed that the lots
belonged to Bormaheco, Inc. and that Cervantes was duly authorized to
sell the same.

Bormaheco, Inc., through Cervantes, made a written offer dated February

12, 1964, to Romeo Villonco for the sale of the property.

"(3) That this sale is to be consummated only after I shall have also
consummated my purchase of another property located at Sta. Ana,
Manila;

As a result of that conference Villonco Realty Company,... through Teofilo

Villonco, in its letter of March 4, 1964 made a revised counter-offer
(Romeo Villonco's first counter-offer was dated February 24, 1964, Exh. C)
for the purchase of the property.

The counter-offer was accepted by Cervantes as shown in Exhibit D,

which is... quoted below:

Then, unexpectedly, in a letter dated March 30, 1964, or twenty-six days

after the signing of the contract of sale, Exhibit D, Cervantes returned the
earnest money, with interest amounting to P694.24 (at ten percent per
annum). Cervantes cited as an excuse the... circumstance that "despite
the lapse of 45 days from February 12, 1964 there is no certainty yet" for
the acquisition of the Punta property

Issues:

that no contract of sale was perfected because Cervantes made a

supposedly qualified acceptance of the revised offer contained in Exhibit
D, which acceptance amounted to a... counter-offer, and because the
condition that Bormaheco, Inc. would acquire the Punta land within the
forty-five-day period was not fulfilled

Ruling:

Bormaheco's acceptance of Villonco Realty Company's offer to purchase

the Buendia Avenue property, as shown in Teofilo Villonco's letter dated
March 4, 1964 (Exh. D), indubitably proves that there was a meeting of
minds upon the subject matter and consideration of the... sale. Therefore,
on that date the sale was perfected.

Bormaheco, Inc. and the Cervantes spouses contend that the sale was
not perfected because Cervantes allegedly qualified his acceptance of
Villonco's revised offer and, therefore, his acceptance amounted to a
counter-offer which Villonco Realty Company should accept but no such...
acceptance was ever transmitted to Bormaheco, Inc. which, therefore,
could withdraw its offer.

Villonco Realty Company paid, and Bormaheco, Inc. accepted, the sum of
P100,000 as earnest money or down payment. That crucial fact implies
that Cervantes was aware that Villonco Realty Company had... accepted
the modifications which he had made in Villonco's counter-offer. Had
Villonco Realty Company not assented to those insertions and
annotations, then it would have stopped payment on its check for
P100,000.

It is deducible from the tenor of those statements that the consummation

of the sale of the Buendia lots to Villonco Realty Company was
conditioned on Bormaheco's acquisition of the Nassco land.

The term of forty-five days was not a part of the condition that the Nassco
property should be acquired.

"that final negotiations on both property can be definitely known after 45

days" does not and... cannot mean that Bormeheco, Inc. should acquire
the Nassco property should be acquired.

It is simply a surmise that after forty-five days (in fact when the forty-five
day period should be computed is not clear) it would be known whether
Bormaheco, Inc. would be able to acquire the Nassco property and
whether it would be able to... sell the Buendia property.

Principles:

The truth is that the alleged changes or qualifications in the revised

counter-offer (Exh. D) are not material or are mere clarifications of what
the parties had previously agreed upon.

17. First Optima Realty Corp. v. Securitron Security Services, 748 SCRA
534 (2015)

Petitioner First Optima Realty Corporation is a domestic corporation

engaged in the real estate business. It is the registered owner of a parcel
of land with improvements located in Pasay City, covered by Transfer
Certificate of Title (the subject property). Respondent Securitron Security
Services, Inc., a domestic corporation with offices located beside the
subject property, claimed that the said parcel of land is subject of the
alleged perfected contract of sale through the latter’s payment of an
earnest money.

The RTC and Court of Appeals found the existence of the perfected
contract of sale. Hence, the petitioner corporation filed a petition for
review on Certiorari.

The fact shows that the respondent through its General Manager Eleazar
offred to purchase the subject property of the petitioner through a letter
addressed to its Vice President Young. Eleazar offered the purchase of the
property in cash. Young declined to accept the payment and informed
Eleazar that prior approval of petitioner’s Board of Directors was required
for the transaction.

Respondent sent a Letter to the petitioner accompanied by a check in the

amount of P100,000.00 made payable to petitioner, which serve as
earnest money for the property. Despite the delicate nature of the matter
and large amount involved, respondent did not deliver the letter and
check directly to Young or her office; instead, they were coursed through
an ordinary receiving clerk/receptionist of the petitioner, who issued a
provisional receipt.The check was eventually deposited with and credited
to petitioner’s bank account.

Thereafter, respondent through counsel demanded in writing that

petitioner proceed with the sale of the property. It averred that since a
perfected contract of sale arose between the parties after negotiations
were conducted and respondent paid the earnest money, which petitioner
accepted, the latter should be compelled to sell the subject property to
the former. It contended that the failure to return of its payment amounts
to estoppel and retification of sale.

Petitioner argued that it never agreed to sell the subject property; that its
board of directors did not authorize the sale thereof to respondent, as no
corresponding board resolution to such effect was issued; that the
respondent’s P100,000.00 check payment cannot be considered as
earnest money since the payment constitutes merely an offer which
requires acceptance in order to give rise to a contract of sale.
ISSUE:

Is there a perfected contract of sale upon payment of earnest money prior

to the acceptance of the offer by the seller?

RULING:
NO. The Supreme Court ruled that when there is merely an offer by one
party without the acceptance of the other, there is no contract. As
contemplated under Art. 1482 of the Civil Code, “there must first be a
perfected contract of sale before we can speak of earnest money.”
“Where the parties merely exchanged offers and counter-offers, no
contract is perfected since they did not yet give their consent to such
offers. Earnest money applies to a perfected sale.”

In a potential sale transaction, the prior payment of earnest money even

before the property owner can agree to sell his property is irregular, and
cannot be used to bind the owner to the obligations of a seller under an
otherwise perfected contract of sale; to cite a well-worn cliché, the
carriage cannot be placed before the horse. The property owner-
prospective seller may not be legally obliged to enter into a sale with a
prospective buyer through the latter’s employment of questionable
practices which prevent the owner from freely giving his consent to the
transaction; this constitutes a palpable transgression of the prospective
seller’s rights of ownership over his property, an anomaly which the Court
will certainly not condone.

In this case, respondent’s subsequent sending of the letter and check to

petitioner – without awaiting the approval of petitioner’s board of
directors and Young’s decision, or without making a new offer –
constitutes a mere reiteration of its original offer which was already
rejected previously; thus, petitioner was under no obligation to reply to
the letter. Thus, said letter cannot be considered as evidence of a
perfected sale, which does not exist in the first place; no binding
obligation on the part of the petitioner to sell its property arose as a
consequence. The letter made no new offer replacing the first which was
rejected.
18. Oesmer v. Paraiso Dev. Corp., 514 SCRA 228 (2007)

FACTS:Petitioners Rizalino, Ernesto, Leonora, Bibiano, Jr., Librado, and Enriquita, all
surnamed Oesmer,together with Adolfo Oesmer and Jesus Oesmer, are brothers and sisters,
and the co-owners of undivided shares of two parcel of land. Respondent Paraiso
Development Corporation bought frompetitioners their respective share of the lot except the
Adolfo and Jesus share. After the said meeting, aContract to Sell was created between the
parties, on which the petitioners affirming their signatures inthe said contract.

Then the petitioner’s withdrew from the said contract and ask for the rescission to which
they allege

that they never sign the contract, the agent has no authority from the petitioners, that said
petitionerwas illiterate to sign the contract, etc.ISSUE:Whether or not there was a perfected
contract between petitioners and respondents.Ruling:The law itself explicitly requires a
written authority before an agent can sell an immovable. Theconferment of such an
authority should be in writing, in as clear and precise terms as possible. It is

worth noting that petitioners’ signatures are found in the Contract to Sell. The Contract is
absolute

lysilent on the establishment of any principal-agent relationship between the five petitioners
and theirbrother and co-petitioner Ernesto as to the sale of the subject parcels of land. Thus,
the Contract to Sell,although signed on the margin by the five petitioners, is not sufficient to
confer authority on petitionerErnesto to act as their agent in selling their shares in the
properties in question. However, despite

petitioner Ernesto’s lack of written authority from the five petitioners to sell their s

hares in the subjectparcels of land, the supposed Contract to Sell remains valid and binding
upon the latter. As can beclearly gleaned from the contract itself, it is not only petitioner
Ernesto who signed the said Contract toSell; the other five petitioners also personally affixed
their signatures thereon. Therefore, a writtenauthority is no longer necessary in order to sell
their shares in the subject parcels of land because, byaffixing their signatures on the
Contract to Sell, they were not selling their shares through an agent but,rather, they were
selling the same directly and in their own right.

DALLION V. CA (February 28, 2009)

FACTS:

Petitioner Segundo Dalion allegedly sold his property in Southern Leyte to respondent Ruperto Sabesaje
through a private deed of sale.

Dalion denies the sale and claims that his signature in the document was forged.

ISSUE:
WON there has been a contract of sale between the parties.

HELD:

The authenticity of the signature of Dallion was proven by the testimony of several witness including the
person who made the deed of sale. Dalion never presented any evidence or witness to prove his claim of
forgery.

Dallion’s claim that the sale is invalid because it was not made in a public document is of no merit. This
argument is misplaced. The provision of Art. 1358 on the necessity of a public document is only for
convenience, not for validity or enforceability. It is not a requirement for the validity of a contract of sale of
a parcel of land that this be embodied in a public instrument. Sale is perfected upon meeting of the minds
of both parties.

20. Secuya v. Vda. De Selma, 326 SCRA 244 (2000)

FACTS:
Before the grant of her application for private sale of Lot 5679, a friar land, the beautiful
Maxima Caballero executed a document entitled "Agreement of Partition," wherein she
stipulated to transfer one-third (1/3) of the lot to and accepted by Paciencia Sabellano, her aunt.
When the application was approved, Maxima failed to transfer the agreed portion to Paciencia
who took possession thereof. Paciencia thereafter sold the same to Dalmacio Secuya. When
Paciencia died, her only heir, Ramon Sabellano, executed a private document, "Deed of
Confirmation of Sale," confirming the sale between Paciencia and Dalmacio. The document was,
however, lost. Meanwhile, Maxima sold the entire lot to Silverio Aro, husband of Cesaria
Caballero. Upon Silverio's death, the lot was transferred to Cesaria from whom respondent
bought the lot. Respondent was assured that petitioners who were occupying a portion of the land
were tenants. A clean title to the whole lot was transferred to respondent. Petitioners, heirs of
Dalmacio Secuya, filed an action for quieting of title on the ground that respondent's title is a
cloud on their title as owners and possessors of the property subject of litigation. They claimed
that they had been occupying the property for forty-seven years though they did not pay the land
taxes. The trial court rendered judgment against respondent. It was affirmed, on appeal, by the
Court of Appeals.

ISSUES:
1. Whether or not the Agreement is one of partition
2. Whether or not there was a repudiation of the Express Trust

HELD:
(1) NO. It was an express trust. Trust is the right to the beneficial enjoyment of property, the
legal title to which is vested in another. It is a fiduciary relationship that obliges the trustee to
deal with the property for the benefit of the beneficiary. Trust relations between parties may
either be express or implied. An express trust is created by the intention of the trustor or of
the parties. An implied trust comes into being by operation of law. The present Agreement of
Partition involves an express trust. Under Article 1444 of the Civil Code, "[n]o particular words
are required for the creation of an express trust, it being sufficient that a trust is clearly intended."
That Maxima Caballero bound herself to give one third of Lot No. 5629 to Paciencia Sabellona
upon the approval of the former's application is clear from the terms of the Agreement. Likewise,
it is evident that Paciencia acquiesced to the covenant and is thus bound to fulfill her obligation
therein. As a result of the Agreement, Maxima Caballero held the portion specified therein as
belonging to Paciencia Sabellona when the application was eventually approved and a sale
certificate was issued in her name. Thus, she should have transferred the same to the latter, but
she never did so during her lifetime. Instead, her heirs sold the entire Lot No. 5679 to Silvestre
Aro in 1955.

(2)YES. While no time limit is imposed for the enforcement of rights under express trusts,
prescription may, however, bar a beneficiary's action for recovery, if a repudiation of the trust is
proven by clear and convincing evidence and made known to the beneficiary. There was a
repudiation of the express trust when the heirs of Maxima Caballero failed to deliver or
transfer the property to Paciencia Sabellona, and instead sold the same to a third person
not privy to the Agreement. In the memorandum of incumbrances of TCT No. 3087, issued in
the name of Maxima, there was no notation of the Agreement between her and Paciencia.
Equally important, the Agreement was not registered; thus, it could not bind third persons.
Neither was there any allegation that Silvestre Aro, who purchased the property from Maxima's
heirs, knew of it. Consequently, the subsequent sales transactions involving the land in dispute
and the titles covering it must be upheld, in the absence of proof that the said transactions were
fraudulent and irregular.

21. Yuviengco v. Dacuycuy, 104 SCRA 668 (1981)

FACTS:
Petitioners own a property in Tacloban City which they intend to sell for 6.5M. They gave the respondents
the right to purchase the property nut only until July 31, 1978. Respondents replied that they agree to buy
the property and they will negotiate for details. Petitioner sent another telegram informing respondents
that their proposal is accepted and a contract will be prepared.

Lawyer of defendant, Mr.Gamboa, arrived bringing a contact with an altered mode of payment which says
that the balance payment should be paid withing 30 days instead of the former 90 days. (Otiginal terms:
2M payment upon execution. 4.5M after 90 days)

ISSUE:
WON there was already a perfected contract of sale between the parties.

HELD:
There was no perfected contract of sale yet because both parties are still under negotiation and hence, no
meeting of the minds. Mr.Gamboa even went to the respondents to negotiate for the sale. Even though
there was an agreement on the terms of payment, there was no absolute acceptance because
respondents still insisted on further details.
With regard to the alleged violation of terms of payment, there was no written document to prove that the
respondents agreed to pay not in cash but in installment. In sale of real property, payment of installment
must be in requisite of a note under the statute of frauds.

MARTA C. ORTEGA vs. DANIEL LEONARDO

G.R. No. L-11311 May 28, 1958

FACTS:
Long before and until her house had been completely destroyed during the liberation of the City
of Manila, plaintiff occupied a parcel of land, designated as Lot 1, Block 3 etc. (hereinafter
called Lot I) located at San Andres Street, Malate, Manila. She re-occupied it after the liberation.
When the administration and disposition of the said Lot I, together with other lots in the Ana
Sarmiento Estate, were assigned by the Government to the Rural Progress Administration.
Plaintiff thereafter asserted her right thereto, as occupant, for purposes of purchase which the
defendant also asserted alleging occupancy of a portion of the land subsequent to plaintiff's.

During the investigation defendant asked plaintiff to desist from pressing her claim and definitely
promised to sell to her a portion with an area of 55.60 square meters at the rate of P25.00 per
square meter if he succeeds in getting the title, provided she paid for the surveying and
subdivision of the Lot and provided further that after he acquired title, she could continue
holding the lot as tenant by paying a monthly rental of P10.00 until said portion shall have been
segregated and the purchase price fully paid. On this, the plaintiff accepted such offer and caused
the survey and segregation of the portion which defendant had promised to sell incurring
expenses therefor, said portion being now designated as Lot I-B in a duly prepared and approved
subdivision plan; that in remodelling her son's house constructed on a lot adjoining Lot I she
extended it over said Lot I-B. When defendant had acquired Lot I plaintiff regularly paid him the
monthly rental of P10.00. However on July 1954, after the plans of subdivision and segregation
of the lot had been approved by the Bureau of Lands, defendants refused to accept the purchase
price tendered by the plaintiff.

ISSUE:
Whether or not there is partial performace on the oral agreement between the parties which
would bind to compel the sale of the real property.

RULING:
It would appear that the complaint in this case described several circumstance indicating partial
performance: relinquishment of rights continued possession, building of improvements, tender of
payment plus the surveying of the lot at plaintiff's expense and the payment of rentals.

It is stated in American Jurisprudence, that "The continuance in possession may, in a proper case,
be sufficiently referable to the parol contract of sale to constitute a part performance thereof.
There may be additional acts or peculiar circumstances which sufficiently refer the possession to
the contract. Continued possession under an oral contract of sale, by one already in possession as
a tenant, has been held a sufficient part performance, where accompanied by other acts which
characterize the continued possession and refer it to the contract of purchase. Especially is this
true where the circumstances of the case include the making of substantial, permanent, and
valuable improvements."

It is also stated that "Possession by the purchaser under a parol contract for the purchase of real
property, together with his making valuable and permanent improvements on the property which
are referable exclusively to the contract, in reliance on the contract, in the honest belief that he
has a right to make them, and with the knowledge and consent or acquiescence of the vendor, is
deemed a part performance of the contract. The entry into possession and the making of the
improvements are held on amount to such an alteration in the purchaser's position as will warrant
the court's entering a degree of specific performance.”

Further stated is that "A tender or offer of payment, declined by the vendor, has been said to be
equivalent to actual payment, for the purposes of determining whether or not there has been a
part performance of the contract. This is apparently true where the tender is by a purchaser who
has made improvements. But the doctrine now generally accepted, that not even the payment of
the purchase price, without something more is a sufficient part performance.” And the
relinquishment of rights or the compromise thereof has likewise been held to constitute part
performance.

Hence, as there was partial performance, the principle excluding parol contracts for the sale of
realty, does not apply.

23. Claudel v. Court of Appeals, 199 SCRA 113 (1991)

N/A

24. Toyota Shaw v. Court of Appeals, 244 SCRA 320 (1995)

Facts:

Sosa wanted to purchase a Toyota Car. She met Bernardo, the sales representative
of Toyota. Sosa emphasized to the sales rep that she needed the car not later than
17 June 1989. They contracted an agreement on the delivery of the unit and that
the balance of the purchase price would be paid by credit financing. The following
day, Sosa delivered the downpayment and a Vehicle sales proposal was printed. On
the day of delivery, Bernardo called Sosa to inform him that the car could not be
delivered. Toyota contends, on the other hand, that the Lite Ace was not delivered
to Sosa because of the disapproval by B.A. Finance of the credit financing
application of Sosa. Toyota then gave Sosa the option to purchase the unit by
paying the full purchase price in cash but Sosa refused. Sosa asked that his down
payment be refunded. Toyota did so on the very same day by issuing a Far East
Bank check for the full amount, which Sosa signed with the reservation, “without
prejudice to our future claims for damages.” Thereafter, Sosa sent two letters to
Toyota. In the first letter, she demanded the refund of the down payment plus
interest from the time she paid it and for damages. Toyota refused to the demands
of Sosa.

Issue:
Whether or not there was a perfected contract of sale

Ruling:
What is clear from the agreement signed by Sosa and Gilbert is not a contract of
sale. No obligation on the part of Toyota to transfer ownership of the car to Sosa and
no correlative obligation on the part of Sosa to pay . The provision on the down
payment of PIOO,OOO.OO made no specific reference to a sale of a vehicle. If it was
intended for a contract of sale, it could only refer to a sale on installment basis, as
the VSP executed the following day. Nothing was mentioned about the full purchase
price and the manner the installments were to be paid. An agreement on the
manner of payment of the price is an essential element in the formation of a binding
and enforceable contract of sale. This is so because the agreement as to the
manner of payment goes, into the price such that a disagreement on the manner of
payment is tantamount to a failure to agree on the price. Definiteness as to the
price is an essential element of a binding agreement to sell personal property.

25. Santos v. Santos, 366 SCRA 395 (2001)

FACTS: Petitioner Zenaida M. Santos is the widow of Salvador Santos, a brother of private
respondents Calixto, Alberto, Antonio, all surnamed Santos and Rosa Santos-Carreon.

The spouses Jesus and Rosalia were the parents of the respondents and the husband of the
petitioner. The spouses owned a parcel of registered land with a four-door apartment administered
by Rosalia who rented them out. On January 19, 1959, the spouses executed a deed of sale of the
properties in favor of their children Salvador and Rosa. Rosa in turn sold her share to Salvador on
November 20, 1973, which resulted in the issuance of new TCT. Despite the transfer of the property
to Salvador, Rosalia continued to lease and receive rentals from the apartment units.

On January 9, 1985, Salvador died, followed by Rosalia who died the following month. Shortly after,
petitioner Zenaida, claiming to be Salvador’s heir, demanded the rent from Antonio Hombrebueno, a
tenant of Rosalia. When the latter refused to pay, Zenaida filed an ejectment suit against him with
the Metropolitan Trial Court of Manila, which eventually decided in Zenaida’s favor.

On January 5, 1989, private respondent instituted an action for reconveyance of property with
preliminary injunction against petitioner in the Regional Trial Court of Manila, where they alleged that
the two deeds of sale were simulated for lack of consideration. The petitioner on the other hand
denied the material allegations in the complaint and that she further alleged that the respondents’
right to reconveyance was already barred by prescription and laches considering the fact that from
the date of sale from Rosa to Salvador up to his death, more or less twelve (12) years had lapsed,
and from his death up to the filing of the case for reconveyance, four (4) years has elapsed. In other
words, it took respondents about sixteen (16) years to file the case. Moreover, petitioner argues that
an action to annul a contract for lack of consideration prescribes in ten (10) years and even
assuming that the cause of action has not prescribed, respondents are guilty of laches for their
inaction for a long period of time.

The trial court decided in favor of private respondents in as much as the deeds of sale were
fictitious, the action to assail the same does not prescribe.

Upon appeal, the Court of Appeals affirmed the trial court’s decision. It held that the subject deeds of
sale did not confer upon Salvador the ownership over the subject property, because even after the
sale, the original vendors remained in dominion, control, and possession thereof.

ISSUE: Whether or not the cause of action of the respondents had prescribed and/or barred by
laches.

RULING: No, the cause of action by the respondents had not prescribed nor is it barred by laches.

First, the right to file an action for the reconveyance of the subject property to the estate of Rosalia
has not prescribed since deeds of sale were simulated and fictitious. The complaint amounts to a
declaration of nullity of a void contract, which is imprescriptible. Hence, respondents’ cause of action
has not prescribed.

Second, neither is their action barred by laches. The elements of laches are: 1) conduct on the part
of the defendant, or of one under whom he claims, giving rise to the situation of which the
complainant seeks a remedy; 2) delay in asserting the complainant’s rights, the complainant having
knowledge or notice of the defendant’s conduct as having been afforded an opportunity to institute a
suit; 3) lack of knowledge or notice on the part of the defendant that the complainant would assert
the right in which he bases his suit; and 4) injury or prejudice to the defendant in the event relief is
accorded to the complainant, or the suit is not held barred. These elements must all be proved
positively. The lapse of four (4) years is not an unreasonable delay sufficient to bar respondent’s
action. Moreover, the fourth (4th) element is lacking in this case. The concept of laches is not
concerned with the lapse of time but only with the effect of unreasonable lapse. The alleged sixteen
(16) years of respondents’ inaction has no adverse effect on the petitioner to make respondents
guilty of laches.

26. Dy, Jr. v. CA, 198 SCRA 826 (1991)

FACTS:
Wilfredo Dy bought a truck and tractor from Libra Finance Corporation. Both truck and tractor was also
mortgage to Libra as security for a loan and as such, they took possession of it. Brother of Wilfredo,
Perfecto Dy and sister Carol Dy-Seno requested Libra that they be allowed to buy the property and
assume the mortgage debt. Libra agreed to the request.

Meanwhile, a collection suit was filed against Wilfredo Dy by Gelac Trading Inc. On the strength of a writ
of execution, the sheriff was able to obtain the tractor on the premises of Libra. It was sold in a public
auction in which Gelac Trading was the lone bidder. Gelac subsequently sold it to one of their
stockholders.
The respondents claim that at the time of the execution of the deed of sale, no constructive delivery was
effected since the consummation of the sale depended upon the clearance and encashment of the check
which was issued in payment of the subject tractor

ISSUE:
WON the William Dy is still the owner of the tractor when it was obtained through the writ of execution.

HELD:
The tractor was not anymore in possession of William Dy when it was obtained by the sheriff because he
already sold it to his brother.

William Dy has the right to sell his property even though it was mortgage because in a mortgage, the
mortgagor doesn’t part with the ownership over the property. He is allowed to sell the property as long as
there is consent from the mortgagee such as in this case. But even if there is no consent given, the sale
would still be valid without prejudice to the criminal action against the mortgagor.

When William Dy sold the tractor, he already transferred the ownership of it because NCC states that the
ownership of the thing sold is acquired by the vendee from the moment it is delivered to him or in any
other manner signing an agreement that the possession is transferred from the vendor to the vendee. In
the instant case, actual delivery of the subject tractor could not be made but there was constructive
delivery already upon the execution of a public instrument which in this case is a deed of sale.

The payment of the check was actually intended to extinguish the mortgage obligation.

27. Addison v. Felix, 38 Phil. 404 (1918)

FACTS:
Petitioner Addison sold four parcels of land to Defendant spouses Felix and Tioco located in LucenaCity.
Respondents paid 3K for the purchase price and promised to pay the remaining by installment. The
contract provides that the purchasers may rescind the contract within one year after the issuance of title
on their name.

The petitioner went to Lucena for the survey designaton and delivery of the land but only 2 parcels were
designated and 2/3 of it was in possession of a Juan Villafuerte.
The other parcels were not surveyed and designated by Addison.

Addison demanded from petitioner the payment of the first installment but the latter contends that there
was no delivery and as such, they are entitled to get back the 3K purchase price they gave upon the
execution of the contract.

ISSUE:
WON there was a valid delivery.

HELD:
The record shows that the plaintiff did not deliver the thing sold. With respect to two of the parcels of land,
he was not even able to show them to the purchaser; and as regards the other two, more than two-thirds
of their area was in the hostile and adverse possession of a third person.

It is true that the same article declares that the execution of a public instruments is equivalent to the
delivery of the thing which is the object of the contract, but, in order that this symbolic delivery may
produce the effect of tradition, it is necessary that the vendor shall have had such control over the thing
sold that, at the moment of the sale, its material delivery could have been made. It is not enough to confer
upon the purchaser the ownership and the right of possession. The thing sold must be placed in his
control. When there is no impediment whatever to prevent the thing sold passing into the tenancy of the
purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is
sufficient. But if there is an impediment, delivery cannot be deemed effected.

28. Danguilan v. IAC, 168 SCRA 22 (1988)

Facts:
 A parcel of lot owned by Domingo Melad was being claimed by petitioner Felix
Danguilan and respondent Apolonia Melad.
 Apolonia Melad contends that she acquired the property when Dominggo Melad
sold it to her when she was just 3 years old in which her mother paid the
consideration. (Evidence: Deed of sale dated December 4, 1943 with a sum
consideration of P80.00.)
 Apolonia contended that she just moved out of the farm only in 1946 when Felix
Danguilan approached her and asked permission to cultivate the land and to stay
therein.
 Dangguilan, on the other hand, presented for his part 2 documents executed in
September 14, 1941 and December 18, 1943, to prove his claim that the properties
were given to him by Dominggo Melad through an onerous donation. The onerous
part of the donation includes the taking care of the farm and the arrangement of the
burial of Dominggo.
 RTC ruled in favor of Danguilan. CA reversed RTC’s ruling. It ruled that there was
a donation, which was void for failing to comply with the formalities.

Issues:
1. Who has the better right between parties? Petitioner Danguilan.
2. WON there was delivery in favor of respondent for the alleged sale? NO.

Held:

Domingo Melad intended to donate the property to petitioner Danguilan

It is our view, considering the language of the two instruments, that Domingo Melad did
intend to donate the properties to the petitioner Danguilan. We do not think, however,
that the donee was moved by pure liberality. While truly donations, the conveyances
were onerous donations as the properties were given to petitioner Danguilan in
exchange for his obligation to take care of the donee for the rest of his life and provide
for his burial.

Hence, it was not covered by the rule in Article 749 of the Civil Code requiring donations
of real properties to be effected through a public instrument, and the 2 private
documents remain valid.

Assuming there was a valid deed of sale, PR Melad failed to show that it was
consummated (no actual delivery + no possession)
At any rate, even assuming the validity of the deed of sale, the record shows that
Apolonia Melad did not take possession of the disputed properties and indeed waited
until 1962 to file this action for recovery of the lands from petitioner Danguilan. If she did
have possession, she transferred the same to Danguilan in 1946, by her own sworn
admission, and moved out to another lot belonging to her step-brother.

Her claim that the petitioner was her tenant (later changed to administrator) was
disbelieved by the trial court, and properly so, for its inconsistency. In short, she failed to
show that she consummated the contract of sale by actual delivery of the properties to
her and her actual possession thereof in concept of purchaser-owner.

No constructive delivery allowed if property is in actual and adverse possession

of a third person
In our jurisdiction, it is a fundamental and elementary principle that ownership does not
pass be mere stipulation but only by delivery and the execution of a public document
does not constitute sufficient delivery where the property involved is in the actual and
adverse possession of third persons.

Therefore, in our Civil Code it is a fundamental principle in all matters of contracts and a
well- known doctrine of law that "non mudis pactis sed traditione dominia rerum
transferuntur".

In conformity with said doctrine as established in paragraph 2 of article 609 of said

code, that "the ownership and other property rights are acquired and transmitted by law,
by gift, by testate or intestate succession, and, in consequence of certain contracts, by
tradition".

In accordance with such disposition and provisions the delivery of a thing constitutes a
necessary and indispensable requisite for the purpose of acquiring the ownership of the
same by virtue of a contract.

One who is in possession is presumed to be the owner

In this case, there no dispute that it is Danguilan and not Melad who is in actual
possession of the litigated properties. And even if the claim of petitioner and respondent
are weak, judgment must be in favor of the Danguilan for one who is in possession is
presumed to be the owner, and cannot be obliged to show or prove a better right.

29. Power Commercial and Industrial Corp. v. CA, 274 SCRA 597 (1997)
FACTS:
Petitioner asbestos manufacturer Power Commercial and industrial corporation bought the property of
spouses Reynaldo and Angelita Quiambao located in Makati City.

Since there are lessees occupying the subject land, part of the deed of sale is a warranty of respondents
that will defend its title and peaceful possession in favor of the petitioners.

The property is mortgage to PNP and as such, petitioners filed a request to assume responsibility of the
mortgage. Because of petitioners failure to produce the required papers, their petition was denied.
Petitioners allege that the contract should be rescinded because of failure of delivery.

ISSUE:
WON the contract is recissible due to breach of contract.

HELD:
There is no breach of contact in this case since there is no provision in the contract that imposes the
obligation to the respondents to eject the people occupying the property.

There was also a constructive delivery because the deed of sale was made in a public document. The
contention of the petitioners that there could be no constructive delivery because the respondents is not in
possession of the property is of no merit. What matters in a constructive delivery is control and not
possession. Control was placed in the hands of the petitioners that is why they were able to file an
ejectment case. Prior physical delivery or possession is not legally required and the execution of the deed
of sale is deemed equivalent to delivery.

30. Chua v. CA, 401 SCRA 54 (2003)

N/A