Distajo vs CA

Petitioner likewise contends that the sale transactions are void for having been entered into by the
administrator of the properties. 1â

Ruling:

We disagree. The pertinent Civil Code provision provides:

"Art. 1491. The following persons cannot acquire by purchase, even at a public or judicial auction,
either in person or through the mediation of another:

(1) The guardian, the property of the person or persons who may be under guardianship;

(2) Agents, the property whose administration or sale may have been entrusted to them,
unless the consent of the principal has been given;

(3) Executors and administrators, the property of the estate under administration;" x x x

Under paragraph (2) of the above article, the prohibition against agents purchasing property in their
hands for sale or management is not absolute. It does not apply if the principal consents to the sale
of the property in the hands of the agent or administrator. In this case, the deeds of sale signed by
Iluminada Abiertas shows that she gave consent to the sale of the properties in favor of her son,
Rufo, who was the administrator of the properties. Thus, the consent of the principal Iluminada
Abiertas removes the transaction out of the prohibition contained in Article 1491(2).

Modina vs CA

Ruling:

As to the second issue, petitioner stresses that his title should have been respected since he is a
purchaser in good faith and for value. The Court of Appeals, however, opined that he (petitioner) is
not a purchaser in good faith. It found that there were circumstances known to MODINA which
rendered their transaction fraudulent under the attendant circumstances.

As a general rule, in a sale under the Torrens system, a void title cannot give rise to a valid title. The
exception is when the sale of a person with a void title is to a third person who purchased it for value
and in good faith.

A purchaser in good faith is one who buys the property of another without notice that some other
person has a right to or interest in such property and pays a full and fair price at the time of the
purchase or before he has notice of the claim or interest of some other person in the property.

In the case under scrutiny, petitioner cannot claim that he was a purchaser in good faith. There are
circumstances which are indicia of bad faith on his part, to wit: (1) He asked his nephew, Placido
Matta, to investigate the origin of the property and the latter learned that the same formed part of the
properties of MERLINDA's first husband; (2) that the said sale was between the spouses; (3) that
when the property was inspected, MODINA met all the lessees who informed that subject lands
belong to MERLINDA and they had no knowledge that the same lots were sold to the husband.
It is a well-settled rule that a purchaser cannot close his eyes to facts which would put a reasonable
man upon his guard to make the necessary inquiries, and then claim that he acted in good faith. His
mere refusal to believe that such defect exists, or his wilful closing of his eyes to the possibility of the
existence of a defect in his vendor's title, will not make him an innocent purchaser for value.

Villamor vs CA

The pivotal issue to be resolved in this case is the validity of the Deed of Option whereby the private
respondents agreed to sell their lot to petitioners "whenever the need of such sale arises, either on
our part (private respondents) or on the part of Julio Villamor and Marina Villamor (petitioners)."

Ruling:

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. Petitioner's allegedly paying
P52.00 per square meter for the option may, as opined by the appellate court, be improbable but
improbabilities does not invalidate a contract freely entered into by the parties.

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 (Enriquez de la
Cavada v. Diaz, 37 Phil. 982). If We look closely at the "deed of option" signed by the parties, We
will notice that the first part covered the statement on the sale of the 300 square meter portion of the
lot to Spouses Villamor at the price of P70.00 per square meter "which was higher than the actual
reasonable prevailing value of the lands in that place at that time (of sale)." The second part stated
that the only reason why the Villamor spouses agreed to buy the said lot at a much higher price is
because the vendor (Reyeses) also agreed to sell to the Villamors the other half-portion of 300
square meters of the land. Had the deed stopped there, there would be no dispute that the deed is
really an ordinary deed of option granting the Villamors the option to buy the remaining 300 square
meter-half portion of the lot in consideration for their having agreed to buy the other half of the land
for a much higher price.

Diamante vs CA

Ruling:

Article 1601 of the Civil Code provides:

Conventional redemption shall take place when the vendor reserves the right to
repurchase the thing sold, with the obligation to comply with the provisions of article
1616 and other stipulations which may have been agreed upon.

In Villarica, et al. vs. Court of Appeals, et al., 4 this Court, interpreting the above Article, held:
 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

In the earlier case of Ramos, et al. vs. Icasiano, et al., 5 decided in 1927, this Court had already ruled
that "an agreement to repurchase becomes a promise to sell when made after the sale, because
when the sale is made without such an agreement, the purchaser acquires the thing sold absolutely,
and if he afterwards grants the vendor the right to repurchase, it is a new contract entered into by the
purchaser, as absolute owner already of the object. In that case the vendor has not reserved to
himself the right to repurchase.

In Vda. de Cruzo, et al. vs. Carriaga, et al., 6 this Court found another occasion to apply the foregoing
principle.

Hence, the Option to Repurchase executed by private respondent in the present case, was merely
a promise to sell, which must be governed by Article 1479 of the Civil Code which reads as follows:

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.

A copy of the so-called Option to Repurchase is neither attached to the records nor quoted in any of
the pleadings of the parties. This Court cannot, therefore, properly rule on whether the promise was
accepted and a consideration distinct from the price, supports the option. Undoubtedly, in the
absence of either or both acceptance and separate consideration, the promise to sell is not binding
upon the promissor (private respondent).

A unilateral promise to buy or sell is a mere offer, which is not converted into a
contract except at the moment it is accepted. Acceptance is the act that gives life to a
juridical obligation, because, before the promise is accepted, the promissor may
withdraw it at any time. Upon acceptance, however, a bilateral contract to sell and to
buy is created, and the offeree ipso facto assumes the obligations of a purchaser; the
offeror, on the other hand, would be liable for damages if he fails to deliver the thing
he had offered for sale.

. . The contract of option is a separate and distinct contract from the contract which
the parties may enter into upon the consummation of the option, and a consideration
for an optional contract is just as important as the consideration for any other kind of
contract. Thus, a distinction should be drawn between the consideration for the
option to repurchase, and the consideration for the contract of repurchase itself.7

Even if the promise was accepted, private respondent was not bound thereby in the absence of a
distinct consideration.
Paranaque Kings vs CA

A careful examination of the complaint 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 defences

The trial and appellate courts based their decision to sustain respondents' motion to dismiss on the
allegations of Parañaque Kings Enterprises that Santos had actually offered the subject properties
for sale to it prior to the final sale in favor of Raymundo, but that the offer was rejected. According to
said courts, with such offer, Santos had verily complied with her obligation to grant the right of first
refusal to petitioner.

Ruling:

We hold, however, 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 amount of P9 million, the price for which
they were finally sold to respondent Raymundo, should have likewise been first offered to petitioner.

The Court has made an extensive and lengthy discourse on the concept of, and obligations under, a
right of first refusal in the case of Guzman, Bocaling & Co. vs. Bonnevie. 16 In that case, under a
contract of lease, the lessees (Raul and Christopher Bonnevie) were given a "right of first priority" to
purchase the leased property in case the lessor (Reynoso) decided to sell. The selling price quoted
to the Bonnevies was 600,000.00 to be fully paid in cash, less a mortgage lien of P100,000.00. On
the other hand, the selling price offered by Reynoso to and accepted by Guzman was only
P400,000.00 of which P137,500.00 was to be paid in cash while the balance was to be paid only
when the property was cleared of occupants. We held that even if the Bonnevies could not buy it at
the price quoted (P600,000.00), nonetheless, Reynoso could not sell it to another for a lower price
and under more favorable terms and conditions without first offering said favorable terms and price
to the Bonnevies as well. Only if the Bonnevies failed to exercise their right of first priority could
Reynoso thereafter lawfully sell the subject property to others, and only under the same terms and
conditions previously offered to the Bonnevies.

From the foregoing, 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.

Tuazon vs Del Rosario

Petitioner’s Arguments
Roberto claims that Lourdes violated his right to buy subject property under

the principle of "right of first refusal" by not giving him "notice" and the opportunity to buy the
property under the same terms and conditions or specifically based on the much lower price paid by
the De Leons.

Roberto further contends that he is enforcing his "right of first refusal" based on Equatorial Realty
Development, Inc. v. Mayfair Theater, Inc.18 which is the leading case on the "right of first refusal."

Respondents’ Arguments

On the other hand, respondents posit that this case is not covered by the principle of "right of first
refusal" but an unaccepted unilateral promise to sell or, at best, a contract of option which was not
perfected. The letter of Lourdes to Roberto clearly embodies an option contract as it grants the latter
only two years to exercise the option to buy the subject property at a price certain of
₱37,541,000.00. As an option contract, the said letter would have been binding upon Lourdes
without need of any consideration, had Roberto accepted the offer. But in this case there was no
acceptance made neither was there a distinct consideration for the option contract.

Ruling:

This case involves an option contract and not a contract of a right of first refusal. It is thus clear that
an option contract is entirely different and distinct from a right of first refusal in that in the former, the
option granted to the offeree is for a fixed period and at a determined price. Lacking these two
essential requisites, what is involved is only a right of first refusal.

Here, It is clear that the letter embodies an option contract as it grants Roberto a fixed period of only
two years to buy the subject property at a price certain of ₱37,541,000.00. It being an option
contract, the rules applicable are found in Articles 1324 and 1479 of the Civil Code which provide:

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.

The second paragraph of Article 1479 declares that "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." Sanchez v. Rigos21 provided an interpretation of the said
second paragraph of Article 1479 in relation to Article 1324. Thus:

There is no question that under Article 1479 of the new Civil Code "an option to sell," or "a promise
to buy or to sell," as used in said article, to be valid must be "supported by a consideration distinct
from the price." This is clearly inferred from the context of said article that a unilateral promise to buy
or to sell, even if accepted, is only binding if supported by consideration. In other words, "an
accepted unilateral promise can only have a binding effect if supported by a consideration, which
means that the option can still be withdrawn, even if accepted, if the same is not supported by any
consideration. Hence, it is not disputed that the option is without consideration. It can therefore be
withdrawn notwithstanding the acceptance made of it by appellee.

In this case, it is undisputed that Roberto did not accept the terms stated in the letter of Lourdes as
he negotiated for a much lower price. Roberto’s act of negotiating for a much lower price was a
counter-offer and is therefore not an acceptance of the offer of Lourdes.

The counter-offer of Roberto for a much lower price was not accepted by Lourdes. There is therefore
no contract that was perfected between them with regard to the sale of subject property. Roberto,
thus, does not have any right to demand that the property be sold to him at the price for which it was
sold to the De Leons neither does he have the right to demand that said sale to the De Leons be
annulled.

Heirs of Ignacio vs Home Bankers

Ruling:

Contracts are perfected by mere consent, which is manifested by the meeting of the offer and the
acceptance upon the thing and the cause which are to constitute the contract. Contracts that are consensual
in nature, like a contract of sale, are perfected upon mere meeting of the minds. Once there is concurrence
between the offer and the acceptance upon the subject matter, consideration, and terms of payment, a
contract is produced. The offer must be certain. To convert the offer into a contract, the acceptance must be
absolute and must not qualify the terms of the offer; it must be plain, unequivocal, unconditional, and
without variance of any sort from the proposal. A qualified acceptance, or one that involves a new proposal,
constitutes a counter-offer and is a rejection of the original offer.

Here, The foregoing clearly shows that petitioner's acceptance of the respondent bank's terms and
conditions for the repurchase of the foreclosed properties was not absolute. Petitioner set a different
repurchase price and also modified the terms of payment, which even contained a unilateral condition for
payment of the balance (P600,000), that is, depending on petitioner's "financial position." The CA thus
considered the qualified acceptance by petitioner as a counter-proposal which must be accepted by
respondent bank. However, there was no evidence of any document or writing showing the conformity of
respondent bank's officers to this counter-proposal.

Naranja vs CA

Ruling:Petitioners allege that Belardo unduly influenced Roque, who was already physically weak
and senile at that time, into executing the deed of sale. Belardo allegedly took advantage of the fact
that Roque was living in her house and was dependent on her for support.

There is undue influence when a person takes improper advantage of his power over the will of
another, depriving the latter of a reasonable freedom of choice.24 One who alleges any defect, or the
lack of consent to a contract by reason of fraud or undue influence, must establish by full, clear and
convincing evidence, such specific acts that vitiated the party’s consent; otherwise, the latter’s
presumed consent to the contract prevails.25 For undue influence to be present, the influence exerted
must have so overpowered or subjugated the mind of a contracting party as to destroy his free
agency, making him express the will of another rather than his own.26

Petitioners adduced no proof that Roque had lost control of his mental faculties at the time of the
sale. Undue influence is not to be inferred from age, sickness, or debility of body, if sufficient
intelligence remains.27 The evidence presented pertained more to Roque’s physical condition rather
than his mental condition. On the contrary, Atty. Sanicas, the notary public, attested that Roque was
very healthy and mentally sound and sharp at the time of the execution of the deed of sale. Atty.
Sanicas said that Roque also told him that he was a Law graduate
Finally, petitioners argue that the Deed of Sale was not supported by a consideration since no
receipt was shown, and it is incredulous that Roque, who was already weak, would travel to Bacolod
City just to be able to execute the Deed of Sale.

The presumption that a contract has sufficient consideration cannot be overthrown by a mere
assertion that it has no consideration

Santos vs Santos

Ruling:

On the first issue, petitioner contends that the Court of Appeals erred in holding that despite the
deeds of sale in Salvador's favor, Jesus and Rosalia still owned the property because the spouses
continued to pay the realty taxes and possess the property. She argues that tax declarations are not
conclusive evidence of ownership when not supported by evidence. She avers that Salvador allowed
his mother to possess the property out of respect to her in accordance with Filipino values.

It is true that neither tax receipts nor declarations of ownership for taxation purposes constitute
sufficient proof of ownership. They must be supported by other effective proofs.9 These requisite
proofs we find present in this case. As admitted by petitioner, despite the sale, Jesus and Rosalia
continued to possess and administer the property and enjoy its fruits by leasing it to third
persons.10 Both Rosa and Salvador did not exercise any right of ownership over it.11 Before the
second deed of sale to transfer her ½ share over the property was executed by Rosa, Salvador still
sought she permission of his mother.12 Further, after Salvador registered the property in his name,
he surrendered the title to his mother.13 These are clear indications that ownership still remained with
the original owners. In Serrano vs. CA, 139 SCRA 179, 189 (1985), we held that the continued
collection of rentals from the tenants by the seller of realty after execution of alleged deed of sale is
contrary to the notion of ownership. Significantly, in Alcos vs. IAC 162 SCRA 823, 837 (1988), we
noted that the buyer's immediate possession and occupation of the property corroborated the
truthfulness and authenticity of the deed of sale. Conversely, the vendor's continued possession of
the property makes dubious the contract of sale between the parties.

On the second issue, is a sale through a public instrument tantamount to delivery of the thing sold?
Petitioner in her memorandum invokes Article 147715 of the Civil Code which provides that
ownership of the thing sold is transferred to the vendee upon its actual or constructive delivery.
Article 1498, in turn, provides that when the sale is made through a public instrument, its execution
is equivalent to the delivery of the thing subject of the contract. Petitioner avers that applying said
provisions to the case, Salvador became the owner of the subject property by virtue of the two deeds
of sale executed in his favor.

Nowhere in the Civil Code, however, does it provide that execution of a deed of sale is a conclusive
presumption of delivery of possession. The Code merely said that the execution shall be equivalent
to delivery. The presumption can be rebutted by clear and convincing evidence.16 Presumptive
delivery can be negated by the failure of the vendee to take actual possession of the land sold.17

In Danguilan vs. IAC, 168 SCRA 22, 32 (1988), we held that for the execution of a public instrument
to effect tradition, the purchaser must be placed in control of the thing sold. When there is no
impediment to prevent the thing sold from converting to tenancy of the purchaser by the sole will of
the vendor, symbolic delivery through the execution of a public instrument is sufficient. But if,
notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and
material tenancy nor make use of it himself or through another in his name, then delivery has not
been effected.
As found by both the trial and appellate courts and amply supported by the evidence on record,
Salvador was never placed in control of the property. The original sellers retained their control and
possession. Therefore, there was no real transfer of ownership.