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Art. 1319. Consent is manifested by the meeting of the offer and the acceptance
upon the thing and the cause which are to constitute the contract. The offer must
be certain and the acceptance absolute. A qualified acceptance constitutes a
counter-offer.
Acceptance made by letter or telegram does not bind the offerer except from the
time it came to his knowledge. The contract, in such a case, is presumed to have
been entered into in the place where the offer was made.
Art. 1326. Advertisements for bidders are simply invitations to make proposals,
and the advertiser is not bound to accept the highest or lowest bidder, unless the
contrary appears.
Art. 1475. The contract of sale is perfected at the moment there is a meeting of
minds upon the thing which is the object of the contract and upon the price.
The Cervantes spouses (Francisco and Rosario) owned 3 lots adjacent to DOCTRINE:
the property of Villonco Realty Co. Bormaheco Co. (whose president It is true that an acceptance may contain a request for certain changes in
was Francisco) negotiated the sale of the lots to Villonco. In the offer to the terms of the offer and yet be a binding acceptance, so long as it is
sell (dated February 12, 1964), it was stated that a deposit of P100,000
clear that the meaning of the acceptance is positively and unequivocally
must be placed as earnest money and that the sale is to be consummated
only after Francisco consummates the purchase of another property to accept the offer, whether such request is granted or not, a contract is
located in Sta. Ana, Manila (the property of NASSCO). It also stated that formed. Vendor’s change in a phrase of the offer to purchase which do
final negotiations on both properties can be definitely known after 45 not essentially change the terms of the offer, does not amount to a
days. Bormaheco won the bid for the NASSCO property on January 17, rejection of the offer and the tender or a counter-offer.
1964. On March 4, 1964, Cervantes accepted Villonco’s counter-offer
and he received earnest money worth P100k on the same day. 26 days
later, he returned the money with interest, saying that “despite the lapse
of 45 days from February 12, 1964, there is no certainty yet" regarding FACTS:
the Sta. Ana property. Villonco sued for specific performance. The RTC ● Francisco N. Cervantes and his wife, Rosario P.
ordered Cervantes spouses and Bormaheco Co. to execute a deed of Navarra-Cervantes, are the owners of Lots 3, 15 and 16 located at
conveyance in favor of Villonco, plus damages and attorney’s fees. The 245 Buendia Avenue, Makati, Rizal with a total area of 3,500 sqm.
petitioners appealed, stating that no contract of sale was perfected ○ Cervantes is the president of Bormaheco, Inc. - a dealer
because Cervantes made a qualified acceptance of the counter-offer and
and importer of industrial and agricultural machinery. The
because the condition that Bormaheco would acquire the Sta. Ana
property within 45 days was not fulfilled. entire three lots are occupied by the building, machinery
and equipment of Bormaheco, Inc. and are adjacent to the
ISSUE: W/N a contract of sale was perfected? YES property of Villonco Realty Company situated at 219
Buendia Avenue.
RULING: SC said that there was a contract of sale. Bormaheco's ● April 21, 1959 - The lots were mortgaged to the Development
acceptance of Villonco Realty Company's offer to purchase the Buendia Bank of the Philippines (DBP) as security for a loan of P441,000.
Avenue property, as shown in the March 4, 1964 letter, proves that there ● July 10, 1969 - The mortgage debt was fully paid
Art. 1403(2) (d). 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
ARTICLE 1403. The following contracts are unenforceable, unless of the contract. (1454a)
they are ratified:
xxx
RECIT-READY: RULING:
The Contract to Sell entered into by the parties is not a unilateral
Petitioners Rizalino, Ernesto, Leonora, Bibiano, Jr., Librado, and promise to sell merely because it used the word option money when it
Enriqueta, all surnamed Oesmer, together with Adolfo Oesmer referred to the amount of P100,000.00, which also form part of the
(Adolfo) and Jesus Oesmer (Jesus), are brothers and sisters, and the purchase price Although the same was denominated as "option
co-owners of undivided shares of two parcels of agricultural and money," it is actually in the nature of earnest money or down
tenanted land. Sometime in March 1989, Rogelio Paular, a resident and payment when considered with the other terms of the contract.
former Municipal Secretary of Carmona, Cavite, brought along
petitioner Ernesto to meet with a certain Sotero Lee, President DOCTRINE:
It said that earnest money and option money are not the same but
of respondent Paraiso Development Corporation, at Otani Hotel in
distinguished thus:
Manila Pursuant to the said meeting, a Contract to Sell was drafted by
the Executive Assistant of Sotero Lee, Inocencia Almo. On 1 April (a) earnest money is part of the purchase price, while option money is
1989, petitioners Ernesto and Enriqueta signed the aforesaid Contract the money given as a distinct consideration for an option contract; (b)
to Sell. A check in the amount of P100,000.00, payable to Ernesto, was earnest money is given only where there is already a sale, while option
given as option Money. Sometime thereafter, Rizalino, Leonora, money applies to a sale not yet perfected; and (c) when earnest money
Bibiano, Jr., and Librado also signed the said Contract to Sell. is given, the buyer is bound to pay the balance, while when the
However, two of the brothers, Adolfo and Jesus, did not sign the would-be buyer gives option money, he is not required to buy, but may
document. In a letter, petitioners informed the former of their intention even forfeit it depending on the terms of the option.
to rescind the Contract to Sell and to return the amount of P100,000.00
given by respondent as option money. Respondent did not respond to
the aforesaid letter. Herein petitioners, together with Adolfo and Jesus,
filed a Complaint for Declaration of Nullity or for Annulment of
● "Earnest money" and "option money" are not the same but distinguished
thus: (a) earnest money is part of the purchase price, while option money is
the money given as a distinct consideration for an option contract; (b)
earnest money is given only where there is already a sale, while option
money applies to a sale not yet perfected; and, (c) when earnest money is
given, the buyer is bound to pay the balance, while when the would-be
buyer gives option money, he is not required to buy, but may even forfeit it
depending on the terms of the option.
● The sum of ₱100,000.00 was part of the purchase price. Although the same
was denominated as "option money," it is actually in the nature of earnest
money or down payment when considered with the other terms of the
contract. Doubtless, the agreement is not a mere unilateral promise to sell,
but, indeed, it is a Contract to Sell as both the trial court and the appellate
court declared in their Decisions.
WHEREFORE, premises considered, the Petition is DENIED, and the Decision and
Resolution of the Court of Appeals dated 26 April 2002 and 4 March 2003,
respectively, are AFFIRMED, thus, (a) the Contract to Sell is DECLARED valid
and binding with respect to the undivided proportionate shares in the subject parcels
of land of the six signatories of the said document, herein petitioners Ernesto,
Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora (all surnamed Oesmer); (b)
respondent is ORDERED to tender payment to petitioners in the amount of
₱3,216,560.00 representing the balance of the purchase price for the latter’s shares in
the subject parcels of land; and (c) petitioners are further ORDERED to execute in
favor of respondent the Deed of Absolute Sale covering their shares in the subject
parcels of land after receipt of the balance of the purchase price, and to pay
respondent attorney’s fees plus costs of the suit. Costs against petitioners.
SO ORDERED.
Art. 1357. If the law requires a document or other special form, as in the acts
and contracts enumerated in the following article, the contracting parties
may compel each other to observe that form, once the contract has been
perfected. This right may be exercised simultaneously with the action upon
the contract.
(1) Acts and contracts which have for their object the creation, transmission,
modification or extinguishment of real rights over immovable property; sales
of real property or of an interest therein a governed by Articles 1403, No. 2,
and 1405;
Art. 1406. When a contract is enforceable under the Statute of Frauds, and a
public document is necessary for its registration in the Registry of Deeds, the
parties may avail themselves of the right under Article 1357.
Art. 1483. Subject to the provisions of the Statute of Frauds and of any other
applicable statute, a contract of sale may be made in writing, or by word of
mouth, or partly in writing and partly by word of mouth, or may be inferred
from the conduct of the parties.
Art 1403. The following contracts are unenforceable, unless they are ratified:
1. Those entered into in the name of another person by one who has
been given no authority or legal representation, or who has acted
beyond his powers;
2. Those that do not comply with the Statute of Frauds as set forth in
this number. In the following cases an agreement hereafter made
shall be unenforceable by action, unless the same, or some note or
memorandum, thereof, be in writing, and subscribed by the party
charged, or by his agent; evidence, therefore, of the agreement
cannot be received without the writing, or a secondary evidence of its
contents:
a. An agreement that by its terms is not to be performed within
a year from the making thereof;
b. A special promise to answer for the debt, default, or
miscarriage of another;
c. An agreement made in consideration of marriage, other
than a mutual promise to marry;
d. An agreement for the sale of goods, chattels or things in
action, at a price not less than five hundred pesos, unless the
buyer accept and receive part of such goods and chattels, or
the evidences, or some of them, of such things in action or
pay at the time some part of the purchase money; but when
a sale is made by auction and entry is made by the
auctioneer in his sales book, at the time of the sale, of the
amount and kind of property sold, terms of sale, price,
names of the purchasers and person on whose account the
sale is made, it is a sufficient memorandum;
e. An agreement for the leasing for a longer period than one
year, or for the sale of real property or of an interest
therein;
f. A representation as to the credit of a third person.
3. Those where both parties are incapable of giving consent to a
contract.
DOCTRINE: This refers to the Sotto property (land and building) situated at Tacloban City. My clients are
willing to sell them at a total price of P6,500,000.00.
● To take a contract for the sale of land out of the Statute of
While there are other parties who are interested to buy the property, I am giving you and the
Frauds a mere note or memorandum in writing subscribed by other occupants the preference, but such priority has to be exercised within a given number of
the vendor or his agent containing the name of the parties days as I do not want to lose the opportunity if you are not interested. I am therefore gluing
you and the rest of the occupants until July 31, 1978 within it which to decide whether you
and a summary statement of the terms of the sale either
want to buy the property. If I do not hear from you by July 31, I will offer or close the deal with
expressly or by reference to something else is all that is the other interested buyer.
required. The statute does not require a formal contract
drawn up with technical exactness for the language of Par. 2 Pedro C. Gamboa
FACTS:
Osmeña Boulevard, Cebu City
● Petition for certiorari a nd prohibition to declare void for being in grave Reurlet dated July 12 inform Dra. Yuvienco we agree to buy property proceed Tacloban to
abuse of discretion the orders of respondent judge Dacuycuy dated negotiate details
November 2, 1978 and August 29, 1980, in Civil Case No. 5759 of the
Court of First Instance of Leyte, which denied the motion filed by Yao King Ong & tenants
Art. 1581. The form of sale of large cattle shall be governed by special laws. (n)