PLDT vs CA

G.R. No. L-57079 September 29, 1989

Facts:

A jeep driven by private respondent Esteban fell into an open trench, the excavation was due to the installation of an underground conduit system by PLDT, the said open trench was without cover and any warning signs.

As a result the private respondent and his wife sustained injuries, and their vehicle was also damaged.

PLDT in its defense, imputes the injuries to the private respondents own negligence. Also, it alleges that L.R. Barte and company acting as an independent contractor, should be responsible for the excavation was performed by them.

As for Barte, they alleged that they have complied with the due standards in performing their work, and that it was not aware of the accident involving the Estebans.

Court of Appeals held that respondent Esteban spouses were negligent and consequently absolved petitioner PLDT from the claim for damages.

Upon respondent’s second motion to reconsideration, CA reversed its decision, following he decision of Trial Court and held PLDT liable for damages.

Issue:

Whether or not PLDT is liable

Held:

NO

We find no error in the findings of the respondent court in its original decision that the accident which befell private respondents was due to the lack of diligence of respondent Antonio Esteban and was not imputable to negligent omission on the part of petitioner PLDT.

The presence of warning signs could not have completely prevented the accident; the only purpose of said signs was to inform and warn the public of the presence of excavations on the site. The private respondents already knew of the presence of said excavations. It was not the lack of knowledge of these excavations which caused the jeep of respondents to fall into the excavation but the unexplained sudden swerving of the jeep from the inside lane towards the accident mound. As opined in some quarters, the omission to perform a duty, such as the placing of warning signs on the site of the excavation, constitutes the proximate cause only when the doing of the said omitted act would have prevented the injury. It is basic that private respondents cannot charge PLDT for their injuries where their own failure to exercise due and reasonable care was the cause thereof. It is both a societal norm and necessity that one should exercise a reasonable degree of caution for his own protection. Furthermore, respondent Antonio Esteban had the last clear chance or opportunity to avoid the accident, notwithstanding the negligence he imputes to petitioner PLDT. As a resident of Lacson Street, he passed on that street almost everyday and had knowledge of the presence and location of the excavations there. It was his negligence that exposed him and his wife to danger, hence he is solely responsible for the consequences of his imprudence.

A person claiming damages for the negligence of another has the burden of proving the existence of such fault or negligence causative thereof. The facts constitutive of negligence must be affirmatively established by competent evidence. Whosoever relies on negligence for his cause of action has the burden in the first instance of proving the existence of the same if contested, otherwise his action must fail.

RCPI VS. CA

G.R. No. 79578 March 13, 1991

Facts:

Spouses Timan through RCPI sent a telegram, in order to express their condolences for the death of the mother-in-law of their cousins Mr. and Mrs. Midoranda. The telegram, however, was written in a “Happy Birthday” card and inserted in a “Christmasgram” envelope.

The spouses Timan, filed an action against RCPI in order to claim damages for the ridicule, contempt and humiliation that the latter caused to the private respondents.

RCPI in its defense alleges that the "error" in the social form used does not come within the ambit of fraud, malice or bad faith as understood/defined under the law.

Court rendered a decision in favor of Spouses Timan.

Issue:

Whether or not RCPI should be held liable

HELD:

YES

We fully agree with the appellate court's endorsement of the trial court's conclusion that RCPI, a corporation dealing in telecommunications and offering its services to the public, is engaged in a business affected with public interest. As such, it is bound to exercise that degree of diligence expected of it in the performance of its obligation.

In the present case, it is self-evident that a telegram of condolence is intended and meant to convey a message of sorrow and sympathy. Precisely, it is denominated "telegram of condolence" because it tenders sympathy and offers to share another's grief. It seems out of this world, therefore, to place that message of condolence in a birthday card and deliver the same in a Christmas envelope for such acts of carelessness and incompetence not only render violence to good taste and common sense, they depict a bizarre presentation of the sender's feelings. They ridicule the deceased's loved ones and destroy the atmosphere of grief and respect for the departed.

EMMA ADRIANO BUSTAMANTE, in her own behalf as Guardian-Ad-Litem of minors: ROSSEL, GLORIA, YOLANDA, ERIC SON and EDERIC, all surnamed BUSTAMANTE, Spouses SALVADOR JOCSON and PATRIA BONE-JOCSON, Spouses JOSE RAMOS and ENRIQUETA CEBU-RAMOS, Spouses NARCISO-HIMAYA and ADORACION MARQUEZ-HIMAYA, and Spouses JOSE BERSAMINA and MA. COMMEMORACION PEREA-BUSTAMANTE, petitioners, vs. THE HONORABLE COURT OF APPEALS, FEDERICO DEL PILAR AND EDILBERTO MONTESIANO, respondents.

G.R. No. 89880 February 6, 1991

FACTS:

A collision between a gravel and sand truck, driven by Montesiano and owned by Del Pilar and a Mazda passenger bus, driven by Susulin, took place in Tanza, Cavite. Due to the impact several passengers of the bus were injured some died.

The driver of the bus noticed that the wheels of the said truck was wiggling and that the latter was occupying his lane. In thinking that the driver of the truck was only joking, he accelerated and tried to overtake a hand tractor, the collision took place.

Trial Court rendered the decision that both drivers shall be soidarily liable.

CA, reversed and set a side the judgment in favor of Del Pilar and Montesiano, opined that "the bus driver had the last clear chance to avoid the collision and his reckless negligence in proceeding to overtake the hand tractor was the proximate cause of the collision."

ISSUE:

Whether or not the doctrine of last clear chance can be applied in the present case.

HELD:

The respondent court adopted the doctrine of "last clear chance." The doctrine, stated broadly, is that the negligence of the plaintiff does not preclude a recovery for the negligence of the defendant where it appears that the defendant, by exercising reasonable care and prudence, might have avoided injurious consequences to the plaintiff notwithstanding the plaintiff's negligence. In other words, the doctrine of last clear chance means that even though a person's own acts may have placed him in a position of peril, and an injury results, the injured person is entitled to recovery. As the doctrine is usually stated, a person who has the last clear chance or opportunity of avoiding an accident, notwithstanding the negligent acts of his opponent or that of a third person imputed to the opponent is considered in law solely responsible for the consequences of the accident.

In the recent case of Philippine Rabbit Bus Lines, Inc. v. Intermediate Appellate Court, et al. (G.R. Nos. 66102-04, August 30, 1990), the Court citing the landmark decision held in the case of Anuran, et al. v. Buno, et al. (123 Phil. 1073) ruled that the principle of "last clear chance" applies "in a suit between the owners and drivers of colliding vehicles. It does not arise where a passenger demands responsibility from the carrier to enforce its contractual obligations. For it would be inequitable to exempt the negligent driver of the jeepney and its owners on the ground that the other driver was likewise guilty of negligence."

JARCO MARKETING CORPORATION, LEONARDO KONG, JOSE TIOPE and ELISA PANELO, Petitioners, vs. HONORABLE COURT OF APPEALS, CONRADO C. AGUILAR and CRISELDA R. AGUILAR, Respondents.

G.R. No. 129792. December 21, 1999

FACTS:

When respondent Criselda was signing her credit card slip at payment and verification counter in Syvels Department Store in Makati, she felt a sudden gust of wind a heard a loud sound. She looked behind her and saw her daughter Zhieneth (6 years old) on the floor pinned by the bulk of the stores gift-wrapping counter.

She was rushed to the hospital but died after 14 days.

Private respondents filed a complaint for damages.

Petitioners on the other hand, denied any liability imputing the negligence to Criselda for allowing her daughter to roam freely in the department store. Alleging further, that the deceased committed contributory negligence when she climbed the counter. Also herein petitioners defense is that they have exercised due diligence of a good father of a family in the selection, supervision and control of their employees.

Trial Court favored petitioners, contemplating that Zhieneth’s action is the proximate cause of the accident.

CA favored respondents on it declared that ZHIENETH, who was below seven (7) years old at the time of the incident, was absolutely incapable of negligence or other tort. It reasoned that since a child under nine (9) years could not be held liable even for an intentional wrong, then the six-year old ZHIENETH could not be made to account for a mere mischief or reckless act. It also absolved CRISELDA of any negligence, finding nothing wrong or out of the ordinary in momentarily allowing ZHIENETH to walk while she signed the document at the nearby counter.

ISSUE:

(1) Whether or not Zhieneth was guilty of contributory negligence.

(2) Whether or not the death of ZHIENETH was accidental or attributable to negligence.

HELD:

(1)NO

Anent the negligence imputed to ZHIENETH, we apply the conclusive presumption that favors children below nine (9) years old in that they are incapable of contributory negligence

In our jurisdiction, a person under nine years of age is conclusively presumed to have acted without discernment, and is, on that account, exempt from criminal liability. The same presumption and a like exemption from criminal liability obtains in a case of a person over nine and under fifteen years of age, unless it is shown that he has acted with discernment.

(2)NEGLIGENCE.

An accident pertains to an unforeseen event in which no fault or negligence attaches to the defendant

negligence is the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something which a prudent and reasonable man would not do.

We rule that the tragedy which befell ZHIENETH was no accident and that ZHIENETHs death could only be attributed to negligence.

Part of res gestae. Statements made by a person while a startling occurrence is taking place or immediately prior or subsequent thereto with respect to the circumstances thereof, may be given in evidence as part of the res gestae. So, also, statements accompanying an equivocal act material to the issue, and giving it a legal significance, may be received as part of the res gestae.

CHINA AIR LINES, LTD., petitioner, vs. COURT OF APPEALS, JOSE PAGSIBIGAN, PHILIPPINE AIR LINES, INC. and ROBERTO ESPIRITU, respondents.

G.R. No. 45985 May 18, 1990

FACTS:

Jose Pagsibagan, General Manager of Rentokil (Phil.) Inc. purchased an airline ticket for Manila-Taipei-Hong Kong-Manila with Philippine Airlines which at that time was a sales and ticketing agent of China Air Lines.

His plane ticket indicated that he is booked on CAL CI Flight No. 812 to depart from Manila for Taipei on June 10, 1968 at 17:20 hours (5:20 p.m.) as issued by PAL, through its ticketing clerk defendant Roberto Espiritu.

One hour before his flight, Pagsibagan was informed that Flight No. 812 bound to Taipei had already left at 10:20. PAL employees made appropriate arrangements for the former to take the next flight to Taipei the following day, to which he arrived around noontime.

Jose Pagsibagan filed a complaint for damages, alleging further the negligence of Roberto Espiritu.

PAL on its defense alleges that its ticketing office through Roberto Espiritu asked for confirmation from CAL before issuing the ticket to Mr. Pagsibagan, which CAL confirmed.

Defendant China Air Lines, for its part, disclaims liability for the negligence and incompetence of the employees of PAL. Moreover, CAL avers that it had properly notified PAL of the flight schedule.

Trial Court ruled that PAL and its employee shall indemnify Pagsibagan. However, the complaint is dismissed with respect to CAL.

ISSUE:

Whether or not CAL shall be rendered liable.

HELD:

NO.

There is indeed no basis whatsoever to hold CAL liable on a quasi-delict or culpa aquiliana. As hereinbefore stated, the court a quo absolved CAL of any liability for fault or negligence. This finding was shared by respondent court when it concluded that defendant CAL did not contribute to the negligence committed by therein defendants-appellants PAL and Roberto Espiritu.

Respondent Pagsibigan insists that CAL was barred from proving that it observed due diligence in the selection and supervision of its employees. This argument is obviously misplaced. CAL is not the employer of PAL or Espiritu. In Duavit vs. The Hon. Court of Appeals, et al., ¹¹ we have stressed the need of first establishing the existence of an employer-employee relationship before an employer may be vicariously liable under Article 2180 of the Civil Code.

When an injury is caused by the negligence of an employee, there instantly arises a presumption of law that there was negligence on the part of the employer either in the selection of the employee or in the supervision over him after such selection. The presumption, however, may be rebutted by a clear showing on the part of the employer that it has exercised the care and diligence of a good father of a family in the selection and supervision of his employee.

EQUATORIAL REALTY DEVELOPMENT, INC. & CARMELO & BAUERMANN, INC. vs. MAYFAIR THEATER, INC.

G.R. No. 106063 November 21, 1996

FACTS:

Carmelo entered into a contract with respondent for the latter to lease A PORTION OF THE SECOND FLOOR of the two-storey building, situated at C.M. Recto Avenue, Manila, with a floor area of 1,610 square meters and THE SECOND FLOOR AND MEZZANINE of the two-storey building, situated at C.M. Recto Avenue, Manila, with a floor area of 150 square meters.

The contract is set for the next 20 years.

2 years later, the parties entered into yet another contract involving; A PORTION OF THE SECOND FLOOR of the two-storey building, situated at C.M. Recto Avenue, Manila, with a floor area of 1,610 square meters and THE SECOND FLOOR AND MEZZANINE of the two-storey building, situated at C.M. Recto Avenue, Manila, with a floor area of 150 square meters.

Stipulated in the contract was; That if the LESSOR should desire to sell the leased premises, the LESSEE shall be given 30-days exclusive option to purchase the same.

In the event, however, that the leased premises is sold to someone other than the LESSEE, the LESSOR is bound and obligated, as it hereby binds and obligates itself, to stipulate in the Deed of Sale hereof that the purchaser shall recognize this lease and be bound by all the terms and conditions thereof.

Sometime in 1974, Carmelo through Mr. Pascal by a telephone call told the respondent that it is contemplating to sell the said property and that a certain Jose Araneta is willing to buy the same for US$1,200,000. It also asked the respondent if it’s willing to the property for six to seven million pesos. Respondent through Mr. Yang told the petitioner that it would respond once a decision was made.

Respondent in its reply mentioned a stipulated part of the contract as to when Carmelo would decide to sell the property. Carmelo did not reply.

Four years later, on July 30, 1978, Carmelo sold its entire C.M. Recto Avenue land and building, which included the leased premises housing the "Maxim" and "Miramar" theatres, to Equatorial by virtue of a Deed of Absolute Sale, for the total sum of P11,300,000.00.

Mayfair instituted the action a quo for specific performance and annulment of the sale of the leased premises to Equatorial.

Carmelo’s defense; as special and affirmative defense (a) that it had informed Mayfair of its desire to sell the entire C.M. Recto Avenue property and offered the same to Mayfair, but the latter answered that it was interested only in buying the areas under lease, which was impossible since the property was not a condominium; and (b) that the option to purchase invoked by Mayfair is null and void for lack of consideration.

Equitorial’s allegation; that the option is void for lack of consideration (sic) and is unenforceable by reason of its impossibility of performance because the leased premises could not be sold separately from the other portions of the land and building. It counterclaimed for cancellation of the contracts of lease, and for increase of rentals in view of alleged supervening extraordinary devaluation of the currency. Equatorial likewise cross-claimed against co-defendant Carmelo for indemnification in respect of Mayfair's claims.

Trial Court rendered decision in favor of Carmelo and Equitorial.

ISSUE:

Whether or not the OPTION CLAUSE IN THE CONTRACTS OF LEASE IS ACTUALLY A RIGHT OF FIRST REFUSAL PROVISO

HELD:

We agree with the respondent Court of Appeals that the aforecited contractual stipulation provides for a right of first refusal in favor of Mayfair. It is not an option clause or an option contract. It is a contract of a right of first refusal.

In his Law Dictionary, edition of 1897, Bouvier defines an option as a contract, in the following language:

A contract by virtue of which A, in consideration of the payment of a certain sum to B, acquires the privilege of buying from, or selling to B, certain securities or properties within a limited time at a specified price.

The rule so early established in this jurisdiction is that the deed of option or the option clause in a contract, in order to be valid and enforceable, must, among other things, indicate the definite price at which the person granting the option, is willing to sell

ANG YU ASUNCION, ARTHUR GO AND KEH TIONG vs THE HON. COURT OF APPEALS and BUEN REALTY DEVELOPMENT CORPORATION

G.R. No. 109125 December 2, 1994

FACTS:

A Second Amended Complaint for Specific Performance was filed by herein petitioners against Bobby Cu Unjieng, Rose Cu Unjieng and Jose Tan who are tenants of the former.

In 1986 herein petitioners expressed that they are offering to sell the premises and are giving the tenants priority to acquire the same.

The tenants offered a price of 6 million and a counter of 5 million pesos and asked the petitioners to put the said offer in writing and to specify the terms and conditions of the offer to sell. The petitioner, however failed to send a reply to the tenants to which the latter were compelled to file the complaint to compel defendants to sell the property to them.

Ang Yu, et al. denied the material allegations of the complaint and interposed a special defense of lack of cause of action.

Trial Court rendered a decision in favor of herein petitioner; offer to sell was never accepted by the plaintiffs for the reason that the parties did not agree upon the terms and conditions of the proposed sale, hence, there was no contract of sale at all.

Court of Appeals affirmed the decision; In resume, there was no meeting of the minds between the parties concerning the sale of the property.

While the case was pending in court, Cu Unjieng (tenants) executed a Deed of Safe in favor of BUEN REALTY DEVELOPMENT CORPORATION.

ISSUE:

Whether or not there is a contract between parties?

Held:

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.

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.

A negotiation is formally initiated by an offer. An imperfect promise (policitacion) is merely an offer. Public advertisements or solicitations and the like are ordinarily construed as mere invitations to make offers or only as proposals. These relations, until a contract is perfected, are not considered binding commitments. Thus, at any time prior to the perfection of the contract, either negotiating party may stop the negotiation. The offer, at this stage, may be withdrawn; the withdrawal is effective immediately after its manifestation, such as by its mailing and not necessarily when the offeree learns of the withdrawal (Laudico vs. Arias, 43 Phil. 270).

Where a period is given to the offeree within which to accept the offer, the following rules generally govern:

(1) If the period is not itself founded upon or supported by a consideration, the offeror is still free and has the right to withdraw the offer before its acceptance, or, if an acceptance has been made, before the offeror's coming to know of such fact, by communicating that withdrawal to the offeree (see Art. 1324, Civil Code; see also Atkins, Kroll & Co. vs. Cua, 102 Phil. 948, holding that this rule is applicable to a unilateral promise to sell under Art. 1479, modifying the previous decision in South Western Sugar vs. Atlantic Gulf, 97 Phil. 249; see also Art. 1319, Civil Code; Rural Bank of Parañaque, Inc., vs. Remolado, 135 SCRA 409; Sanchez vs. Rigos, 45 SCRA 368). The right to withdraw, however, must not be exercised whimsically or arbitrarily; otherwise, it could give rise to a damage claim under Article 19 of the Civil Code which ordains that "every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith."

(2)  If the period has a separate consideration, a contract of "option" is deemed perfected, and it would be a breach of that contract to withdraw the offer during the agreed period. The option, however, is an independent contract by itself, and it is to be distinguished from the projected main agreement (subject matter of the option) which is obviously yet to be concluded. If, in fact, the optioner-offeror withdraws the offer before its acceptance (exercise of the option) by the optionee-offeree, the latter may not sue for specific performance on the proposed contract ("object" of the option) since it has failed to reach its own stage of perfection. The optioner-offeror, however, renders himself liable for damages for breach of the option. In these cases, care should be taken of the real nature of the consideration given, for if, in fact, it has been intended to be part of the consideration for the main contract with a right of withdrawal on the part of the optionee, the main contract could be deemed perfected; a similar instance would be an "earnest money" in a contract of sale that can evidence its perfection (Art. 1482, Civil Code).

In the law on sales, the so-called "right of first refusal" is an innovative juridical relation. Needless to point out, it cannot be deemed a perfected contract of sale under Article 1458 of the Civil Code. Neither can the right of first refusal, understood in its normal concept, per se be brought within the purview of an option under the second paragraph of Article 1479, aforequoted, or possibly of an offer under Article 1319 of the same Code.

LINA MONTILLA vs COURT OF APPEALS and EMILIO ARAGON, JR.

G.R. No. L-47968 May 9, 1988

FACTS:

Herein defendant files an action against petitioner for failing to comply with the latters obligation to sell a piece of land located in Poblacion, Iloilo City in accordance to the parties verbal contract.

The price of the said lot as stipulated is P57,650.00 (at the rate of P50.00 per square meter), with the condition that Aragon constructed on the lot a house of strong materials and paid a nominal monthly rental in the meantime, to which was complied with by Aragon.

In her answer Montilla categorically denied ever having entered into such an agreement, and set up the affirmative defenses of (1) unenforceability of the alleged agreement under the Statute of Frauds; and (2) failure of the complaint to state a cause of action, no allegation having been made therein of any consideration for the promise to sell distinct and separate from the price, as required by Article 1479 of the Civil Code.

Trial Court rendered judgment in favor of Aragon, on the grounds that Montilla admitted her acceptance of the verbal contract.

ISSUE:

Whether or not a verbal contract was established? If in the affirmative, whether or not the contract was unenforceable because violative of the Statute of Frauds and because not supported by any consideration distinct from the price.

HELD:

NO.

For while those defenses (by Montilla) imply an acceptance by the pleader of the truth of the agreement at which the defenses are directed, the acceptance is at best hypothetical, assumed only for purposes of determining the validity of the defenses, but cannot in any sense be taken as an unconditional and irretrievably binding factual admission. The import of the answer, couched in language that could not be made any plainer is that there was no verbal contract to sell ever agreed to by Montilla, but that, even assuming hypothetically, or for the sake of argument that there was, the agreement was unenforceable because in breach of the Statute of Frauds. It was therefore reversible error for the Trial Court to have burdened Montilla with an admission of the verbal contract to sell sued upon.

There being therefore no admission whatever on Montilla's part of the existence or ratification of the claimed contract to sell, and taking account of her disavowal in her pleadings and in her evidence of that contract, and necessarily of any fulfillment of the terms thereof, it is clear that the action for its enforcement should have been dismissed pursuant to the Statute of Frauds, in relation to Rule 16 of the Rules of Court.

The action is also dismissible upon another legal ground. Assuming arguendo veritability of the oral promise to sell by Montilla, the promise was nevertheless not binding upon her in view of the absence of any consideration therefor distinct from the stipulated price. This is the principle laid down by the second paragraph of Article 1479: "An accepted unilateral promise 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."

NICOLAS SANCHEZ vs SEVERINA RIGOS

G.R. No. L-25494 June 14, 1972

FACTS:

Parties executed an “Option to Purchase” whereby Mrs. Rigos "agreed, promised and committed ... to sell" to Sanchez the sum of P1,510.00, a parcel of land situated in the barrios of Abar and Sibot, municipality of San Jose, province of Nueva Ecija.

within two (2) years from said date with the understanding that said option shall be deemed "terminated and elapsed," if "Sanchez shall fail to exercise his right to buy the property" within the stipulated period.

Petitioner deposited the stipulated amount in the Court of First Instance of Nueva Ecija when the respondent failed to accept the same, and filed for specific performance and damages.

Respondent’s defense: that the contract between the parties "is a unilateral promise to sell, and the same being unsupported by any valuable consideration, by force of the New Civil Code, is null and void"

The lower court rendered judgment for Sanchez, ordering Mrs. Rigos to accept the sum judicially consigned by him and to execute, in his favor, the requisite deed of conveyance.

ISSUE:

Whether or not the “Option to Purchase” bilateral reciprocal contract?

HELD:

The option did not impose upon plaintiff the obligation to purchase defendant's property. Annex A is not a "contract to buy and sell." It merely granted plaintiff an "option" to buy. And both parties so understood it, as indicated by the caption, "Option to Purchase," given by them to said instrument. Under the provisions thereof, the defendant "agreed, promised and committed" herself to sell the land therein described to the plaintiff for P1,510.00, but there is nothing in the contract to indicate that her aforementioned agreement, promise and undertaking is supported by a consideration "distinct from the price" stipulated for the sale of the land.

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. It is not disputed that the option is without consideration. It can therefore be withdrawn notwithstanding the acceptance of it by appellee.

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.

Indeed, the presumption is that, in the process of drafting the Code, its author has maintained a consistent philosophy or position. Moreover, the decision in Southwestern Sugar & Molasses Co. v. Atlantic Gulf & Pacific Co., holding that Art. 1324 is modified by Art. 1479 of the Civil Code, in effect, considers the latter as an exception to the former, and exceptions are not favored, unless the intention to the contrary is clear, and it is not so, insofar as said two (2) articles are concerned. What is more, the reference, in both the second paragraph of Art. 1479 and Art. 1324, to an option or promise supported by or founded upon a consideration, strongly suggests that the two (2) provisions intended to enforce or implement the same principle.

In the present case the trial court found that the "Plaintiff (Nicolas Sanchez) had offered the sum of Pl,510.00 before any withdrawal from the contract has been made by the Defendant (Severina Rigos)." Since Rigos' offer sell was accepted by Sanchez, before she could withdraw her offer, a bilateral reciprocal contract — to sell and to buy — was generated

SPOUSES JULIO D. VILLAMOR AND MARINA VILLAMOR vs THE HON. COURT OF APPEALS AND SPOUSES MACARIA LABINGISA REYES AND ROBERTO REYES

G.R. No. 97332 October 10, 1991

FACTS:

Macaria sold 300 square meters from her 600 square meter lot to the spouses Villamor which is located at Baesa, Caloocan City, for the total amount of P21,000.00.

Earlier, Macaria borrowed P2,000.00 from the spouses which amount was deducted from the total purchase price of the 300 square meter lot sold.

Macaria executed a "Deed of Option" in favor of Villamor in which the remaining 300 square meter portion (TCT No. 39934) of the lot would be sold to Villamor under the conditions stated therein.

Included in the Deed of Option is:

That the only reason why the Spouses-vendees Julio Villamor and Marina V. Villamor, agreed to buy the said one-half portion at the above-stated price of about P70.00 per square meter, is because I, and my husband Roberto Reyes, have agreed to sell and convey to them the remaining one-half portion still owned by me and now covered by TCT No. 39935 of the Register of Deeds for the City of Caloocan, 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, excluding whatever improvement may be found the thereon;

In 1984, when the husband of Macaria retired, wanted to repurchased the said 300 square meter of lot from the petitioners. However, petitioners rejected the said offer and expresses their desire to purchase the remaining half of the lot.

Trial Court rendered judgment in favor of Villamor.

Court of Appeals reversed the decision premised on the finding of respondent court that the Deed of Option is void for lack of consideration.

ISSUE:

Whether or not the Deed of Option is valid?

HELD:

NO.

As expressed in Gonzales v. Trinidad, 67 Phil. 682, consideration is "the why of the contracts, the essential reason which moves the contracting parties to enter into the contract." The cause or the impelling reason on the part of private respondent executing the deed of option as appearing in the deed itself is the petitioner'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."

The respondent appellate court failed to give due consideration to petitioners' 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 private respondents 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. 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. But, 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.

A contract of sale is, under Article 1475 of the Civil Code, "perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. From that moment, the parties may reciprocally demand perform of contracts." Since there was, between the parties, a meeting of minds upon the object and the price, there was already a perfected contract of sale. What was, however, left to be done was for either party to demand from the other their respective undertakings under the contract. It may be demanded at any time either by the private respondents, who may compel the petitioners to pay for the property or the petitioners, who may compel the private respondents to deliver the property.

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 petitioners on July 13, 1987, seventeen (17) years from the time of the execution of the contract. Hence, the right of action had prescribed. There were allegations by the petitioners that they demanded from the private respondents as early as 1984 the enforcement of their rights under the contract. Still, it was beyond the ten (10) years period prescribed by the Civil Code.

ANTONIO ENRIQUEZ DE LA CAVADA vs ANTONIO DIAZ

G.R. No. L-11668            April 1, 1918

FACTS:

Parties entered into a “contract of option” which involves a hacienda at Pitogo consisting of 100 and odd hectares, owned by respondent. The said contract stipulated how the price of the property will be paid; for which the petitioner herein may pay him either the sum of thirty thousand pesos (P30,000), Philippine currency, in cash, or within the period of six (6) years, beginning with the date of the purchase, the sum of forty thousand pesos (P40,000), Philippine currency, at six per cent interest per annum.

After the execution of the contract, defendant filed a petition with the Court of Land Registration in order to obtain the registration of a part of the hacienda, which was granted.

Later, and pretending to comply with the terms of said contract, the defendant offered to transfer to the plaintiff one of said parcels only, which was a part of said "hacienda." The plaintiff refused to accept said certificate for a part only of said "hacienda" upon the ground (a) that it was only a part of the "Hacienda de Pitogo," and (b) under the contract (Exhibits A and B) he was entitled to a transfer to him all said "hacienda."

The theory of the defendant is that the contract of sale of said "Hacienda de Pitogo" included only 100 hectares, more or less, of said "hacienda," and that by offering to convey to the plaintiff a portion of said "hacienda" composed of "100 hectares, more or less," he thereby complied with the terms of the contract.

Lower Court ruled in favor of Petitioner.

ISSUE:

Whether or not the defendant was obliged to convey to the plaintiff all of said "hacienda."

HELD:

A promise made by one party, if made in accordance with the forms required by the law, may be a good consideration (causa) for a promise made by another party. (Art. 1274, Civil Code.) In other words, the consideration (causa) need not pass from one to the other at the time the contract is entered into.

The said contract (Exhibits A and B) was not, in fact, an "optional contract" as that phrase is generally used. Reading the said contract from its four corners it is clearly as absolute promise to sell a definite parcel of land for a fixed price upon definite conditions. The defendant promised to convey to the plaintiff the land in question as soon as the same was registered under the Torrens system, and the plaintiff promised to pay to the defendant the sum of P70,000, under the conditions named, upon the happening of that event. The contract was not, in fact, what is generally known as a "contract of option."

An optional contract is a privilege existing in one person, for which he had paid a consideration, which gives him the right to buy, for example, certain merchandise of certain specified property, from another person, if he chooses, at any time within the agreed period, at a fixed price. 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.

A contract of option is a contract by virtue of the terms of which the parties thereto promise and obligate themselves to enter into contract at a future time, upon the happening of certain events, or the fulfillment of certain conditions.

ROSARIO CARBONELL, petitioner, vs. HONORABLE COURT OF APPEALS, JOSE PONCIO, EMMA INFANTE and RAMON INFANTE, respondents.

G.R. No. L-29972 January 26, 1976

FACTS:

Petitioner Carbonell lives in an adjoining lot owned by Respondent Poncio, latter’s lot is mortgaged in favor of Republic Savings Bank for P1,500.

Petitioner and another Respondent (Infante) offered to buy the land owned by Poncio. Which Poncio, in his failure to pay the mortgaged agreed for the petitioner to buy the land including his house for P9.50 per square meter on the condition that from the purchase price would come the money to be paid to the bank.

Both parties settled the arrears of the mortgaged amounting P247.26. However, Petitioner only have P200.00 as per respondent’s information that he only owes the same to the bank. Respondent then withdrew the deficit amount and was reimbursed by Carbonell the following day.

The parties executed a document stipulating that, Poncio may still occupy the land sold by him to the petitioner and if after a year, he still can’t find a place to move, that he shall pay rent in favor of the petitioner.

Subsequently, Poncio had told Carbonell that the former can no longer pursue with the sale for he had given the land to Infante, to which he cannot withdraw even if he goes to jail. The said lot was fenced by Infante.

Atty. Jose Garcia advised her to present an adverse claim over the land in question with the Office of the Register of Deeds of Rizal.

Poncio, admittedly sold the land to Infante when she improved her offer.

With the information that the land was not yet registered, Atty. Garcia in favor of the petitioner prepared an adverse claim over the property. Whereby upon registration of the same by Infante, the said adverse claim was noted in the Transfer Certificate of Title.

Petitioner filed a second complaint, alleging that the sale between Poncio and Infante be declared null and void. Respondent’s allegation was that, Petitioner’s claim was unenforceable for lack of written document.

Trial Court ruled that the second sale was null and void. However, after re-trial, Trial Court reversed it’s decision ruling that the claim of the respondents were greater than that of the petitioner.

CA ruled in favor of petitioner, alleging that it has a superior right over the respondent. After a motion for reconsideration CA reversed its decision.

ISSUE:

Whether or not Petitioner have the superior right over the property.

HELD:

YES.

Article 1544, New Civil Code, which is decisive of this case, recites:

If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith (emphasis supplied).

When Carbonell bought the lot from Poncio on January 27, 1955, she was the only buyer thereof and the title of Poncio was still in his name solely encumbered by bank mortgage duly annotated thereon. Carbonell was not aware — and she could not have been aware — of any sale of Infante as there was no such sale to Infante then. Hence, Carbonell's prior purchase of the land was made in good faith. Her good faith subsisted and continued to exist when she recorded her adverse claim four (4) days prior to the registration of Infantes's deed of sale. Carbonell's good faith did not cease after Poncio told her on January 31, 1955 of his second sale of the same lot to Infante. Because of that information, Carbonell wanted an audience with Infante, which desire underscores Carbonell's good faith. With an aristocratic disdain unworthy of the good breeding of a good Christian and good neighbor, Infante snubbed Carbonell like a leper and refused to see her. So Carbonell did the next best thing to protect her right — she registered her adversed claim on February 8, 1955. Under the circumstances, this recording of her adverse claim should be deemed to have been done in good faith and should emphasize Infante's bad faith when she registered her deed of sale four (4) days later on February 12, 1955.

JOSE SANTA ANA, JR. and LOURDES STO. DOMINGO, petitioners, vs. ROSA HERNANDEZ, respondent.

G.R. No. L-16394      December 17, 1966

FACTS:

Petitioners owned a 115,850 square meter parcel of land to which they sold 2 separate portions to the respondent.

Petitioners caused the preparation of a subdivision plan in the said property which was approved by the Director of Lands. Respondent however, did not conform with the said plan and executed a subdivision plan of her own, which was also approved by the Directors of Lands.

The petitioners filed a suit against the respondent for occupying an excess of 17,000 square meters from what she had purchased. Respondent however, alleges that it is part of the land she bought.

Trial Court ruled in favor of petitioner.

CA, reversed, on the ground that the two parcels of land sold to appellant (i.e., appellee herein, Rosa Hernandez) were identified by the conspicuous boundaries.

ISSUE:

Whether or not the lands sold were identified by conspicuous boundaries.

HELD:

The Court of Appeals concluded by applying to the case Article 1542 of the new Civil Code:

In the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure or number, there shall be no increase or decrease of the price, although there be greater or less area or number than that stated in the contract.

The same rule shall be applied when two or more immovables are sold for a single price; but if, besides mentioning the boundaries, which is indispensable in every conveyance of real estate, its area or number should be designated in the contract, the vendor shall be bound to deliver all that is included within said boundaries, even when it exceeds the area or number specified in the contract; and, should he not be able to do so, he shall suffer a reduction in the price, in proportion to what is lacking in the area or number, unless the contract is rescinded because the vendee does not accede to the failure to deliver what has been stipulated.

consisting in a long and continuous pilapil or dike that separated the lands in question from the rest of the property. On the basis of such findings, that can not be questioned at this stage, for reasons already shown, it is unquestionable that the sale made was of a definite and identified tract, a corpus certum, that obligated the vendors to deliver to the buyer all the land within the boundaries, irrespective of whether its real area should be greater or smaller than what is recited in the deed (Goyena vs. Tambunting, 1 Phil. 490; Teran vs. Villanueva, 56 Phil. 677; Azarraga vs. Gay, 52 Phil. 599; Mondragon vs. Santos, 87 Phil. 471). And this is particularly true where, as in the case now before this Court, the area given is qualified to be approximate only ("humigit kumulang", i.e., more or less Rec. on App., p. 22).

VICTORIA R. VALLARTA, Petitioner, vs. THE HONORABLE COURT OF APPEALS and THE HONORABLE JUDGE FRANCISCO LLAMAS, Pasay City Court, Respondents.

G.R. No. L-40195 May 29, 1987

FACTS:

Cruz entrusted Petitioner 7 pieces of jewelry, where the latter issued a post dated check for the items, however, the check was dishonored by the bank. Vallarta promised Cruz that she would issue another check but failed to do so.

Petitioner’s allegation was that what transpired between her and Cruz was a “Sale or Return” to which the check was payment for a pre-existing obligation. Thus she can only be civilly liable.

RTC and CA found Vallarta guilty of estafa.

ISSUE:

Whether or not the transaction was a “Sale or Return”

HELD:

NO.

Properly, then, the transaction entered into by Cruz and Vallarta was not a "sale or return." Rather, it was a "sale on approval " (also called " sale on acceptance, " "sale on trial." or "sale on satisfaction" [CIVIL CODE, art. 1502]). In a "sale or return," the ownership passes to the buyer on delivery (CIVIL CODE, art. 1502). (The subsequent return of the goods reverts ownership in the seller [CIVIL CODE, art. 1502]). Delivery, or tradition. as a mode of acquiring ownership must be in consequence of a contract (CIVIL CODE, art. 712), e.g. sale.chanr

If there was no meeting of the minds on November 20, 1968, then, as of that date, there was yet no contract of sale which could be the basis of delivery or tradition. Thus, the delivery made on November 20, 1968 was not a delivery for purposes of transferring ownership - the prestation incumbent on the vendor. If ownership over the jewelry was not transmitted on that date, then it could have been transmitted only in December 1968, the date when the check was issued. In which case, it was a "sale on approval" since ownership passed to the buyer. Vallarta, only when she signified her approval or acceptance to the seller, Cruz, and the price was agreed upon.

PERFECTO DY, JR. petitioner, vs. COURT OF APPEALS, GELAC TRADING INC., and ANTONIO V. GONZALES, Respondents.

G.R. No. 92989 July 8, 1991

FACTS:

Wilfredo Dy purchased a truck and a farm tractor through LIBRA which was also mortgaged with the latter, as a security to the loan.

Petitioner, expresses his desire to purchased his brother’s tractor in a letter to LIBRA which also includes his intention to shoulder its mortgaged. LIBRA approved the request. At the time that Wilfredo Dy executed a deed of absolute sale in favor of petitioner, the tractor and truck were in the possession of LIBRA for his failure to pay the amortization.

When petitioner finally fulfilled its obligation to pay the tractor, LIBRA would only release the same only if he would also pay for the truck. In order to fulfill LIBRA’s condition, petitioner convinced his sister to pay for the remaining truck, to which she released a check amounting to P22,000. LIBRA however, insisted that the check must be first cleared before it delivers the truck and tractor.

Meanwhile, another case penned “Gelac Trading Inc vs. Wilfredo Dy” was pending in Cebu as a case to recover for a sum of money (P12,269.80). By a writ of execution the court in Cebu ordered to seize and levy the tractor which was in the premise of LIBRA, it was sold in a public auction to which it was purchased by GELAC. The latter then sold the tractor to Antonio Gonzales.

RTC rendered in favor of petitioner.

CA dismissed the case, alleging that it still belongs to Wilfredo Dy.

ISSUE:

Whether or not there was a consummated sale between Petitioner and LIBRA?

HELD:

NO.

The payment of the check was actually intended to extinguish the mortgage obligation so that the tractor could be released to the petitioner. It was never intended nor could it be considered as payment of the purchase price because the relationship between Libra and the petitioner is not one of sale but still a mortgage. The clearing or encashment of the check which produced the effect of payment determined the full payment of the money obligation and the release of the chattel mortgage. It was not determinative of the consummation of the sale. The transaction between the brothers is distinct and apart from the transaction between Libra and the petitioner. The contention, therefore, that the consummation of the sale depended upon the encashment of the check is untenable.

CALIXTO PASAGUI and FAUSTA MOSAR, plaintiffs-appellants, vs. ESTER T. VILLABLANCA, ZOSIMO VILLABLANCA, EUSTAQUIA BOCAR and CATALINA BOCAR defendants-appellees.

G.R. No. L-21998 November 10, 1975

FACTS:

Herein petitioners filed a complaint in the Court of First Instance in Tacloban City against respondents for having took possession a parcel of land which was purchased by the former for a consideration of P2,800.

Defendants however, filed a motion to dismiss the case on the grounds that the court had no jurisdiction being that the action is of forcible entry. On the other hand, respondent alleges that the action was not forcible entry for the possession lacks of “whether or not, from the nature of the action pleaded as appears in the allegations of the complaint, the aforesaid action is one of forcible entry, within the exclusive jurisdiction of the municipal court”

Trial court dismissed the case, ruling that the action was of a forcible entry to which the municipal trial court  has jurisdiction.

ISSUE:

Whether or not, from the nature of the action pleaded as appears in the allegations of the complaint, the aforesaid action is one of forcible entry, within the exclusive jurisdiction of the municipal court

Held:

NO

In the case at bar, the complaint does not allege that the plaintiffs were in physical possession of the land and have been deprived of that possession through force, intimidation, threat, strategy, or stealth.

It is true that the execution of the deed of absolute sale in a public instrument is equivalent to delivery of the land subject of the sale. ² This presumptive delivery only holds true when there is no impediment that may prevent the passing of the property from the hands of the vendor into those of the vendee. It can be negated by the reality that the vendees actually failed to obtain material possession of the land subject of the sale.. 3 It appears from the records of the case at bar that plaintiffs-appellants had not acquired physical possession of the land since its purchase on November 12, 1962. As a matter of fact, their purpose in filing the complaint in Civil Case No. 3285 is precisely to "get the possession of the property." ⁴ In order that an action may be considered as one for forcible entry, it is not only necessary that the plaintiff should allege his prior physical possession of the property but also that he was deprived of his possession by any of the means provided in section 1, Rule 70 of the Revised Rules of Court, namely: force, intimidation, threats, strategy and stealth. For, if the dispossession did not take place by any of these means, the courts of first instance, not the municipal courts, have jurisdictions.. 5 The bare allegation in the complaint that the plaintiff has been "deprived" of the land of which he is and has been the legal owner for a long period has been held to be insufficient. ⁶ It is true that the mere act of a trespasser in unlawfully entering the land, planting himself on the ground and excluding therefrom the prior possessor would imply the use of force. In the case at bar, no such inference could be made as plaintiffs-appellants had not claimed that they were in actual physical possession of the property prior to the entry of the Villablancas. Moreover, it is evident that plaintiffs-appellants are not only seeking to get the possession of the property, but as an alternative cause of action, they seek the return of the price and payment of damages by the vendors "in case of eviction or loss of ownership" of the said property. It is, therefore, not the summary action of forcible entry within the context of the Rules.