Rupert Soriano v. Basilio Bautista GR No. L-15752; Dec. 29, 1962; Makalintal, J.

Digest by Peterson Poon Facts Spouses Bautista (Respondent) owned a parcel of land in the Municipality of Teresa, province of Rizal, containing 30,222 square meters, by a creek. On 5/30/1956, the respondents entered into a Kasulatan ng Sanglaan in favor of petitioners Rupert Soriano and Olimpia de Jesus. o The crucial clause (Clause 5) in that mortgage was that That it has likewise been agreed that if the financial condition of the mortgagees will permit, they may purchase said land absolutely on any date within the two-year term of this mortgage at the agreed price of P3,900.00. o Other conditions: the mortgage will last for 2 years after signing, the produce which will be reaped will belong to the mortgagee, that the land tax will be paid by mortgagor, that the mortgagee may not mortgage the land without permission of the original mortgagor, that if the mortgagee fails to pay his debt at the proper time the mortgagor may issue a foreclosure of mortgage, whether judicial or extrajudicial. Sometime after entering into the agreement, the petitioners paid a sum of P450 pursuant to the conditions agreed upon However, the respondents did not issue a receipt and returned the money on 5/31/1958 It appears that previously, on 5/13/1958, the Attorney of the petitioners informed the respondent of their desire to buy the land pursuant to Clause 5 of the agreement o Despite this, the respondents refused to comply with the demand o Hence, the petitioners filed before the CFI (CC. 5023) a case, praying that they be allowed to consign/deposit with the Clerk of Court the sum of P1,650 as the balance of the purchase price Meanwhile, on 6/9/1958, the respondents filed a complaint (CC 99) against the petitioners but was dismissed for lack of jurisdiction. They then filed a case again on 8/5/1959 asking the CFI to order the petitioners to accept payment of the principal and release the mortgage. The CFI of Rizal ruled after a joint trial of the cases filed both by the Petitioners and the Respondents that the Respondents should issue a deed of sale for the property upon Petitioners payment of the balance price. Hence, this appeal Issue/Holding/Ratio 1. Whether or not the Petitioners are entitled to special performance consisting of the execution of the deed of sale? YES

Respondents Bautista: being mortgagors, they cannot be deprived of the right to redeem the mortgaged property Supreme Court: While the agreement is a mortgage and contains a customary right of redemption, it has a special provision which renders the mortgagors right to redeem defeasible at the election of the mortgagees. There is nothing illegal or immoral in this. It is an option to buy, allowed by Art. 1479 of the Civil Code (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). The mortgagors promise to sell is supported by the same consideration as that of the mortgage itself, which is distinct from that which would support the sale, an additional amount having been agreed upon to make up the entire price of P3,900.00, should the option be exercised. The mortgagors promise was in the nature of a continuing offer, non-withdrawable during a period of two years, which upon acceptance by the mortgagees rise to a perfected contract of purchase and sell. The case of Inigo v. CA does not help the respondents because this case refers only to a specific performance of a personal obligation, and not the enforcement of a real right. Although respondents may have tendered the sum of P1,800 to redeem mortgage, that tender was ineffective. First, it was made AFTER the option to purchase had been exercised. When they tendered payment in June 9, it was already after the option. Secondly, the petitioners preemptive right to purchase within the period of two years defeats respondents right to redeem. The notice of option was received by the respondents within the 2 year period through the letter dated 5/13/1958. Hence, the offer and acceptance converged and gave to a perfected and binding contract of sale.