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7/17/2019 Sales-Oesmer vs Paraiso - Heirs of Biona

5. Difference Between Earnest Money and Option as a distin!t !onsideration for an o$tion !ontra!t: (b
Money earnest mone% is gi#en onl% where there is alread% a
sale, while o$tion mone% a$$lies to a sale not %et
OESMER VS. PARAISO $erfe!ted: and, (! when earnest mone% is gi#en, the
FACTS  bu%er is bound to $a% the balan!e, while when the
Petitioners Rizalino, Ernesto, Leonora, Bibiano, Jr., would"be bu%er gi#es o$tion mone%, he is not required to
Librado, Enriqueta, Adolfo, and Jesus, all surnamed bu%, but ma% e#en forfeit it de$ending on the terms of the
Oesmer together with Adolfo Oesmer (Adolfo and Jesus o$tion. /he sum of P+33,333.33 was $art of the
Oesmer (Jesus, are brothers and sisters, and the !o" $ur!hase $ri!e. Although the same was denominated as
owners of undi#ided shares of two $ar!els of agri!ultural 8o$tion mone%,8 it is a!tuall% in the nature of earnest
and tenanted land. Both lots are unregistered and mone% or down $a%ment when !onsidered with the other
originall% owned b% their $arents, Bibiano Oesmer and terms of the !ontra!t. &oubtless, the agreement is not a
En!arna!ion &urum$ili. 'hen the s$ouses Oesmer died, mere unilateral $romise to sell, but, indeed, it is a
$etitioners, together with Adolfo and Jesus, a!quired the ontra!t to ell as both the trial !ourt and the a$$ellate
lots as heirs of the former b% right of su!!ession. !ourt de!lared in their &e!isions.

Res$ondent Paraiso &e#elo$ment or$oration is FORMA# RE$!IREME%TS OF SA#E

engaged in the real estate business. )n *ar!h +-, one &. For' not I'portant for Va(idity of Sa(e
Rogelio Paular, brought along $etitioner Ernesto to meet
with a !ertain otero Lee, President of res$ondent %ARA%)A VS. CA
Paraiso &e#elo$ment or$oration. /he said meeting FACTS
was for the $ur$ose of bro0ering the sale of $etitioners1 Roque 5aran;a was the registered owner of a $ar!el of
$ro$erties to Res$ondent or$oration. land, Ba!olod. Roque was also a !o"owner of an
ad;a!ent lot (Lot 5o. 6 whi!h he !o"owned with his
Pursuant to the said meeting, a ontra!t to ell was brothers, <abino and Pla!ido 5aran;a.
drafted b% the E2e!uti#e Assistant of Lee. On + A$ril
+-, $etitioners Ernesto and Enriqueta signed the 'hen Pla!ido died, his one"third share was inherited b%
aforesaid ontra!t to ell. A !he!0 in the amount of his !hildren, 5enita, 5azareto, 5ilda, 5aida and
P+33,333.33, $a%able to Ernesto, was gi#en as o$tion 5eolanda, all surnamed 5aran;a, herein $etitioners. /he
mone%. ad;a!ent lot is !o#ered b% // 5o. /"+-=>6 in the names
of Roque, <abino and the said !hildren of Pla!ido. //
ometime thereafter, Rizalino, Leonora, Bibiano, Jr., and 5o. /"+-=>6 remained e#en after <abino died. /he other
Librado also signed the said ontra!t to ell. 4owe#er, $etitioners ? erafin 5aran;a, Raul 5aran;a, and Amelia
two of the brothers, Adolfo and Jesus, did not sign the 5aran;a"Rubinos ? are the !hildren of <abino.
/he two lots were being leased b% Esso tandard
Petitioners, through a letter, informed the res$ondent Eastern, )n!. for @3 %ears from +>6"+6. or his
!om$an% of their intention to res!ind the ontra!t to ell $ro$erties, Roque was being $aid P633.33 $er month b%
and to return the amount of P+33,333.33 gi#en b% the !om$an%.
res$ondent as o$tion mone%. Res$ondent did not
res$ond to the aforesaid letter. ubsequentl%, the Roque had no other sour!e of in!ome e2!e$t for
$etitioners, together with Adolfo and Jesus, filed a the P633.33 monthl% rental of his two $ro$erties. /o
om$laint for &e!laration of 5ullit% or for Annulment of show his gratitude to Belardo, Roque sold Lot 5o.  and
O$tion Agreement or ontra!t to ell with &amages. his one"third share in Lot 5o. 6 to Belardo on August 6+,
+-+, through a &eed of ale of Real Pro$ert% whi!h
ISS!E was dul% notarized b% Att%. Eugenio ani!as.
(+ 'O5 the su$$osed ontra!t to ell is reall% a
unilateral $romise to sell without !onsideration distin!t Roque1s !o$ies of // 5o. /"+-=> and // 5o. /"
from the $ri!e, and hen!e, #oid. (5O, it is indeed a +-=>6 were entrusted to Att%. ani!as for registration of
ontra!t to ell. (6 'O5 the !onsideration of P+337 the deed of sale and transfer of the titles to Belardo. But
$aid is an o$tion mone%. ()t is an earnest mone%. the deed of sale !ould not be registered be!ause
Belardo did not ha#e the mone% to $a% for the
"E#D registration fees.
)n the instant !ase, the !onsideration of P+33,333.33
$aid b% res$ondent to $etitioners was referred to as Belardo1s onl% sour!e of in!ome was her store and
8o$tion mone%.8 4owe#er, a !areful e2amination of the !offee sho$. ometimes, her !hildren would gi#e her
words used in the !ontra!t indi!ates that the mone% is mone% to hel$ with the household e2$enses, in!luding
not o$tion mone% but earnest mone%. the e2$enses in!urred for Roque1s su$$ort. At times, she
would also borrow mone% from *argarita &ema"ala, a
8Earnest mone%8 and 8o$tion mone%8 are not the same neighbor. 'hen the amount of her loan
but distinguished thus9 (a earnest mone% is $art of the rea!hed P+C,333.33, &ema"ala required a se!urit%.
$ur!hase $ri!e, while o$tion mone% is the mone% gi#en 1/4
7/17/2019 Sales-Oesmer vs Paraiso - Heirs of Biona

Roque e2e!uted a deed of sale in fa#or of &ema"ala, ubsequentl%, $etitioners also filed a !ase against
!o#ering his two $ro$erties in !onsideration of res$ondent for annulment of sale and quieting of title
the P+C,333.33 outstanding loan and an with damages, $ra%ing, among others, that ;udgment be
additional P+C,333.33, for a total ofP@3,333.33. &ema" rendered nullif%ing the &eed of ale, and ordering the
ala e2$lained that she wanted Roque to e2e!ute the Register of &eeds of Ba!olod it% to !an!el the
deed of sale himself sin!e the $ro$erties were still in his annotation of the &eed of ale on // 5o. /"+-=>6.
name. Belardo merel% a!ted as a witness. /he titles to
the $ro$erties were gi#en to &ema"ala for safe0ee$ing. /he RTC rendered a &e!ision in the !onsolidated !ases
in fa#or of $etitioners. /he trial !ourt noted that the &eed
/hree da%s later, Roque died of influenza. /he $ro!eeds of ale was defe!ti#e in form sin!e it did not !ontain a
of the loan were used for his treatment while the rest te!hni!al des!ri$tion of the sub;e!t $ro$erties but merel%
was s$ent for his burial. indi!ated that the% were Lot 5o. , !o#ered b% // 5o.
/"+-=> !onsisting of +@> square meters, and one"third
)n +-C, Belardo full% $aid the loan se!ured b% the $ortion of Lot 5o. 6 !o#ered b% // 5o. /"+-=>6. /he
se!ond deed of sale. &ema"ala returned the !ertifi!ates trial !ourt held that, being defe!ti#e in form, the &eed of
of title to Belardo, who, in turn, ga#e them ba!0 to Att%. ale did not #est title in $ri#ate res$ondent. ull and
ani!as. absolute ownershi$ did not $ass to $ri#ate res$ondent
be!ause she failed to register the &eed of ale. he was
Dn0nown to Belardo, $etitioners, the !hildren of Pla!ido not a $ur!haser in good faith sin!e she a!ted as a
and <abino 5aran;a, e2e!uted an E2tra;udi!ial witness to the se!ond sale of the $ro$ert% 0nowing that
ettlement Among 4eirs on O!tober ++, +-C, she had alread% $ur!hased the $ro$ert% from Roque.
ad;udi!ating among themsel#es Lot 5o. . On ebruar% 'hate#er rights $ri#ate res$ondent had o#er the
+, +->, $etitioner Amelia 5aran;a"Rubinos, $ro$erties !ould not be su$erior to the rights of
a!!om$anied b% Belardo, borrowed the two //s, $etitioners, who are now the registered owners of the
together with the lease agreement with Esso tandard $ar!els of land
Eastern, )n!., from Att%. ani!as on a!!ount of the loan
being $ro$osed b% Belardo to her. /hereafter, $etitioners /he CA re#ersed the R/ &e!ision. /he A held that
had the E2tra;udi!ial ettlement Among 4eirs notarized the unregisterabilit% of a deed of sale will not undermine
on ebruar% 6C, +->. 'ith Roque1s !o$% of // 5o. /" its #alidit% and effi!a!% in transferring ownershi$ of the
+-=> in their $ossession, the% su!!eeded in ha#ing it $ro$erties to $ri#ate res$ondent. /he A noted that the
!an!elled and a new !ertifi!ate of title, // 5o. /" re!ords were de#oid of an% $roof e#iden!ing the alleged
+3+-, issued in their names. #itiation of Roque1s !onsent to the sale: hen!e, there is
no reason to in#alidate the sale. Registration is onl%
)n +-=, Belardo de!ided to register the &eed of ale ne!essar% to bind third $arties, whi!h $etitioners, being
dated August 6+, +-+. 'ith no title in hand, she was the heirs of Roque 5aran;a, are not. /he trial !ourt erred
!om$elled to file a $etition with the R/ to dire!t the in a$$l%ing Arti!le +C of the i#il ode to the !ase at
Register of &eeds to annotate the deed of sale e#en bar sin!e $etitioners are not $ur!hasers of the said
without a !o$% of the //s. )n an Order dated June +-, $ro$erties. 4en!e, it is not signifi!ant that $ri#ate
+-=, the R/ granted the $etition. But she onl% res$ondent failed to register the deed of sale before the
su!!eeded in registering the deed of sale in // 5o. /" e2tra;udi!ial settlement among the heir.
+-=>6 be!ause // 5o. /"+-=> had alread% been
!an!elled. ISS!E

On &e!ember ++, +-, Att%. ani!as $re$ared a 'hether or not the deed of sale must !ontain a te!hni!al
!ertifi!ate of authorization, gi#ing Belardo1s daughter, des!ri$tion of the sub;e!t $ro$ert% in order to be #alid
Jennel%n P. argas, the authorit% to !olle!t the $a%ments
from Esso tandard Eastern, )n!. But it a$$eared from "E#D
the !om$an%1s Ad#i!e of i2ed Pa%ment that $a%ment of
the lease rental had alread% been transferred from /he ourt does not agree with $etitioners1 !ontention
Belardo to Amelia 5aran;a"Rubinos be!ause of the that a deed of sale must !ontain a te!hni!al des!ri$tion
E2tra;udi!ial ettlement Among 4eirs. of the sub;e!t $ro$ert% in order to be #alid. Petitioners
an!hor their theor% on e!tion +6= of A!t 5o. >, whi!h
On June 6@, +6, Belardo, through her daughter and $ro#ides a sam$le form of a deed of sale that in!ludes,
attorne%"in"fa!t, Rebe!!a ordero, instituted a suit for in $arti!ular, a te!hni!al des!ri$tion of the sub;e!t
re!on#e%an!e with damages. /he !om$laint $ra%ed that $ro$ert%.
 ;udgment be rendered de!laring Belardo as the sole
legal owner of Lot 5o. , de!laring null and #oid the /o be #alid, a !ontra!t of sale need not !ontain a
E2tra;udi!ial ettlement Among 4eirs, and // 5o. /" te!hni!al des!ri$tion of the sub;e!t $ro$ert%. ontra!ts of
+3+-, and ordering $etitioners to re!on#e% to her the sale of real $ro$ert% ha#e no $res!ribed form for their
sub;e!t $ro$ert% and to $a% damages. #alidit%: the% follow the general rule on !ontra!ts that
the% ma% be entered into in whate#er form, $ro#ided all
the essential requisites for their #alidit% are $resent. /he 2/4
7/17/2019 Sales-Oesmer vs Paraiso - Heirs of Biona

requisites of a #alid !ontra!t of sale under Arti!le +C- of 

the i#il ode are9 (+ !onsent or meeting of the minds: ISS!E
(6 determinate sub;e!t matter: and (@ $ri!e !ertain in
mone% or its equi#alent. 'hether or not the sale is #alidH

/he failure of the $arties to s$e!if% with absolute !larit% "E#D

the ob;e!t of a !ontra!t b% in!luding its te!hni!al
des!ri$tion is of no moment. 'hat is im$ortant is that Ies. /he $ro#ision of Art. +@C- on the ne!essit% of a
there is, in fa!t, an ob;e!t that is determinate or at least $ubli! do!ument is onl% for !on#enien!e, not for #alidit%
determinable, as sub;e!t of the !ontra!t of sale. /he form or enfor!eabilit%. )t is not a requirement for the #alidit% of
of a deed of sale $ro#ided in e!tion +6= of A!t 5o. > a !ontra!t of sale of a $ar!el of land that this be
is onl% a suggested form. )t is not a mandator% form that embodied in a $ubli! instrument. A !ontra!t of sale is a
must be stri!tl% followed b% the $arties to a !ontra!t. !onsensual !ontra!t, whi!h means that the sale is
$erfe!ted b% mere !onsent. 5o $arti!ular form is
)n the instant !ase, the deed of sale !learl% identifies the required for its #alidit%. D$on $erfe!tion of the !ontra!t,
sub;e!t $ro$erties b% indi!ating their res$e!ti#e lot the $arties ma% re!i$ro!all% demand $erforman!e (Art.
numbers, lot areas, and the !ertifi!ate of title !o#ering +=C, 5, i.e., the #endee ma% !om$el transfer of
them. Resort !an alwa%s be made to the te!hni!al ownershi$ of the ob;e!t of the sale, and the #endor ma%
des!ri$tion as stated in the !ertifi!ates of title !o#ering require the #endee to $a% the thing sold (Art. +C-,
the two $ro$erties. 5. /he trial !ourt thus rightl% and legall% ordered
&alion to deli#er to abesa;e the $ar!el of land and to
e2e!ute !orres$onding formal deed of !on#e%an!e in a
DA#IO% VS. CA $ubli! do!ument. Dnder Art. +-, 5, when the sale
FACTS  is made through a $ubli! instrument, the e2e!ution
/his is a $etition to annul and set aside the de!ision of thereof is equi#alent to the deli#er% of the thing. &eli#er%
the ourt of A$$eals rendered on *a% 6>, +-=, ma% either be a!tual (real or !onstru!ti#e. /hus deli#er%
u$holding the #alidit% of the sale of a $ar!el of land b% of a $ar!el of land ma% be done b% $la!ing the #endee in
$etitioner egundo &alion (hereafter, 8&alion8 in fa#or of  !ontrol and $ossession of the land (real or b%
$ri#ate res$ondent Ru$erto abesa;e, Jr. (hereafter, embod%ing the sale in a $ubli! instrument (!onstru!ti#e.
On *a% 6-, +=@, abesa;e sued to re!o#er ownershi$
of a $ar!el of land, based on a $ri#ate do!ument of FACTS
absolute sale, dated Jul% +, +>C, allegedl% e2e!uted b% On O!tober 6@, +C@, the late Ernesto Biona, married to
&alion, who, howe#er denied the fa!t of sale, !ontending $laintiff"a$$ellee oledad Biona, was awarded
that the do!ument sued u$on is fi!titious, his signature 4omestead Patent o#er the $ro$ert% sub;e!t of this suit,
thereon, a forger%, and that sub;e!t land is !on;ugal a $ar!el of agri!ultural land, lo!ated in Bo. @, Banga,
$ro$ert%, whi!h he and his wife a!quired in +>3 from otabato,
aturnina abesa;e as e#iden!ed b% the 8Es!ritura de
enta Absoluta8. On June @, +C, Ernesto and oledad Biona obtained a
loan from the then Rehabilitation inan!e or$oration
/he s$ouses denied !laims of abesa;e that after (now the &e#elo$ment Ban0 of the Phili$$ines and $ut
e2e!uting a deed of sale o#er the $ar!el of land, the% u$ as !ollateral the sub;e!t $ro$ert%. On June +6, +C>,
had $leaded with abesa;e, their relati#e, to be allowed Ernesto Biona died lea#ing as his heirs herein $laintiffs"
to administer the land be!ause &alion did not ha#e an% a$$ellees, namel%, his wife, oledad Estrobillo da. &e
means of li#elihood. /he% admitted, howe#er, Biona, and fi#e daughters, Editha B. Blan!aflor,
administering sin!e +C-, fi#e (C $ar!els of land in *arianita B. de Jesus, ilma B. Blan!aflor, Elsie B.
ogod, outhern Le%te, whi!h belonged to Leonardo Ramos and Perlita B. armen.
abesa;e, grandfather of abesa;e, who died in +C>.
On *ar!h +, +>3, $laintiff"a$$ellee oledad Biona
/he% ne#er re!ei#ed their agreed +3F and +CF obtained a loan from defendant"a$$ellant in the amount
!ommission on the sales of !o$ra and aba!a, of P+,333 and as se!urit% therefore, the sub;e!t $ro$ert%
res$e!ti#el%. abesa;eGs suit, the% !ountered, was was mortgaged. )t was further agreed u$on b% the
intended merel% to harass, $reem$t and forestall !ontra!ting $arties that for a $eriod of two %ears until the
&alionGs threat to sue for these un$aid !ommissions. debt is $aid, defendant"a$$ellant shall o!!u$% the land in
&alion nonetheless still im$ugns the #alidit% of the sale dis$ute and en;o% the usufru!t thereof.
on the ground that the same is embodied in a $ri#ate
do!ument, and did not thus !on#e% title or right to the lot /he two"%ear $eriod ela$sed but oledad Biona was not
in question sin!e 8a!ts and !ontra!ts whi!h ha#e for their  able to $a% her indebtedness. &efendant"a$$ellant
ob;e!t the !reation, transmission, modifi!ation or !ontinued o!!u$%ing and !ulti#ating the sub;e!t $ro$ert%
e2tin!tion of real rights o#er immo#able $ro$ert% must without $rotest from $laintiffs"a$$ellees.
a$$ear in a $ubli! instrument.8 3/4
7/17/2019 Sales-Oesmer vs Paraiso - Heirs of Biona

On Jul% @, +>6, defendant"a$$ellant $aid the sum of "E#D 

P+,33.33 to the &e#elo$ment Ban0 of the Phili$$ines to
!an!el the mortgage $re#iousl% !onstituted b% the Biona IE but with regard onl% to oledad1s share (=+6. But
s$ouses on June @, +C@. sin!e the daughters of Biona failed to assert their rights
and allowed defendant 4ila;os to o!!u$% the land in
/hereafter, and for a $eriod of not less than twent%"fi#e $ea!e for more than @3 %ears, the% are now sto$$ed due
%ears, defendant"a$$ellant !ontinued his $ea!eful and to la!hes.
$ubli! o!!u$ation of the $ro$ert%, de!laring it in his name
for ta2ation $ur$oses, $a%ing real estate $ro$ert% ta2es  All the requisites for a #alid !ontra!t of sale are $resent
thereon, and !ausing the same to be tenanted. in the instant !ase. or a #aluable !onsideration of
P,C33.33, oledad Biona agreed to sell and a!tuall%
On June +, +-C, $laintiffs"a$$ellees, filed a !om$laint !on#e%ed the sub;e!t $ro$ert% to $ri#ate res$ondent.
for re!o#er% of ownershi$, $ossession, a!!ounting and /he fa!t that the deed of sale was not notarized does not
damages, with a $ra%er for a writ of $reliminar% render the agreement null and #oid and without an%
mandator% in;un!tion and or restraining order against effe!t. /he $ro#ision of Arti!le +@C- of the i#il ode on
defendant"a$$ellant alleging, among others, that the the ne!essit% of a $ubli! do!ument is onl% for
latter had unlawfull% been de$ri#ing them of the use, !on#enien!e, and not for #alidit% or enfor!eabilit%.+3 /he
$ossession and en;o%ment of the sub;e!t $ro$ert%: that obser#an!e of whi!h is onl% ne!essar% to insure its
the entire $ar!el of land, whi!h was de#oted and highl% effi!a!%, so that after the e2isten!e of said !ontra!t had
suited to $ala% and !orn, was %ielding three har#ests been admitted, the $art% bound ma% be !om$elled to
annuall%, with an a#erage of one hundred twent% (+63 e2e!ute the $ro$er do!ument.++ Dndeniabl%, a !ontra!t
sa!0s of !orn and eight% !a#ans of ri!e $er he!tare: that has been entered into b% oledad Biona and the $ri#ate
$laintiffs"a$$ellees were de$ri#ed of its total $rodu!e res$ondent. Regardless of its form, it was #alid, binding
amounting to P+C3,333.33. and enfor!eable between the $arties.

One of the !laims of defendant"a$$ellant was that b% Dnder Art. +@C> of the i#il ode, !ontra!ts shall be
#irtue of his !ontinuous and $ea!eful o!!u$ation of the obligator% in whate#er form the% ma% ha#e been entered
$ro$ert% from the time of its sale and for more than into $ro#ided all the essential requisites for their
twent%" fi#e %ears thereafter, defendant $ossesses a ne!essar% elements for a #alid !ontra!t of sale were met
better right thereto sub;e!t onl% to the rights of the when oledad Biona agreed to sell and a!tuall%
tenants whom he had allowed to !ulti#ate the land under !on#e%ed Lot +== to defendant"a$$ellant who $aid the
the Land Reform Program of the go#ernment: and that amount of P,C33.33 therefore. /he deed of sale (E2h.
$laintiffs alleged right, if an%, is barred b% the statutes of 6 is not made ineffe!ti#e merel% be!ause it is not
fraud. notarized or does not a$$ear in a $ubli! do!ument.


'hether or not the deed of sale was #alid and if it

effe!ti#el% !on#e%ed to the $ri#ate res$ondents the
sub;e!t $ro$ert% 4/4