Professional Documents
Culture Documents
Case Digest Sales
Case Digest Sales
Facts:
HELD:
Carmelo owned a parcel of land in Manila. He leased it to
First Issue: Mayfair for a term of 20 years, for use as a motion picture
theater. Two years later, Carmelo leased to Mayfair
another portion of his property, also for 20 years.
Both contracts have the stipulation: “That if the lessor determinate and the price is fixed, can be obligatory on the
should desire to sell the leased premises, the lessee parties. An accepted unlitateral promise which specifies the
shall be given 30 days exclusive option to purchase thing to be sold and the price to be paid, when coupled with a
the same. In the event, however, that the leased
valuable consideration distinct and separate from the price, is
premises is sold to someone other than the lessee,
the lessor is bound and obligated, as it hereby binds what may properly be termed a perfect contract of option, and
and obligates itself, to stipulate in the Deed of Sale this contract is legally binding.
thereof that the purchaser shall recognize this lease
and be bound by all the terms and conditions thereof. The provision is a right of first refusal, and as such,
Mr. Pascal (of Carmelo) informed Yang (Mayfair’s the requirement of a separate consideration has no
president) that he wanted to sell the entire property, and applicability. An option is a contract granting a privilege to buy
that a certain Araneta was offering to buy the whole or sell within an agreed time and at a determined price, and it
property for $1.2M. Pascal asked Yang if he was willing to
is a separate and distinct contract from that which the parties
buy the property for P6-7M.
Mayfair informed Carmelo that they wanted to purchase may enter into, and it must be supported by consideration.
the entire property and reminded them of the stipulation in However, here the right of first refusal is an integral part of the
the lease, but Carmelo ignored the letter. contracts of lease.
Carmelo then sold its entire property to Equatorial for
P11.3M. There was a consideration for that right of refusal.
Mayfair filed an action for specific performance and The consideration is built into the reciprocal obligations of the
annulment of the leased premises to Equatorial. parties. The consideration for the lease includes the
Carmelo and Equatorial claimed: that it had informed
consideration for the right of first refusal. Mayfair is in effect
Mayfair of its desire but that Mayfair had said it was
only interested in buying the area under lease, which stating that it consents to lease the premises and to pay the
was impossible since the property was not a price agreed upon, provided that the lessor should give it the
condominium, and that the option to purchase right of first refusal.
invoked by Mayfair is null and void for lack of
consideration. Carmelo actually acknowledged that Mayfair had the
RTC: Dismissed Mayfair’s complaint. It reasoned that right of first refusal, because it informed Mayfair that it intended
the option in the contract of lease was not supported to sell the properties. The contract between Carmelo and
by a separate consideration, and without a
Equatorial was entered into in bad faith. Since Mayfair has a
consideration, the option is not binding on Carmelo to
sell the property to Mayfair. Cited Art 1479. Mayfair right of first refusal, it can exercise the right only if the
cannot compel Carmelo to comply with the promise fraudulent sale is first set aside or rescinded.
unless Mayfair establishes the existence of a distinct
consideration. Also, Art 1354 (Although the cause is Deed of sale between Carmelo and Equatorial is rescinded.
not stated in the contract, it is presumed that it exists Carmelo is to return the purchase price to Equatorial, and
and is lawful unless the debtor proves the contrary), Equatorial is ordered to return ownership of the land to
and consideration cannot be presumed, because Carmelo.
when it comes to an option it is governed particularly
by Art 1479, whereby the promissee has the burden
Carmelo is ordered to allow Mayfair to buy the lots for P11.3M.
of proving the existence of consideration. (This was
the doctrine in the case of Sanchez.)
CA: The stipulation is a right of first refusal and not an
option contract, which was the real intention of the
parties. The stipulation is certain as to the object (the EMILIO BUGATTI, petitioner, vs. COURT OF APPEALS and SPOUSES
sale of the leased premises) but the price for which BEN BAGUILAT and MARIA BAGUILAT, respondents.
the object is ot be sold is not stated, so it isn’t an
option contract. Also said that the right of first refusal FACTS
was limited to the leased promises and not the entire
property itself. In the complaint, respondents alleged that they are the owners of a
Issue: parcel of land situated in Lagawa, Ifugao and that sometime in
December, 1987, petitioner offered to lease their land. According to
Is the stipulation a right of first refusal or option respondents, they discussed the terms and conditions of the lease
contract? with petitioner. It was agreed by petitioner and respondents that
the aforesaid terms and conditions should be included in a written
Held: contract of lease to be prepared by petitioner and presented to
respondents for their approval. However, even before preparing the
Right of first refusal.
contract of lease, petitioner occupied respondents’ land and began
The deed of option or the option clause in a contract, construction on January 18, 1988. Immediately objecting to the
in order to be valid and enforceable, must, among other things, construction, respondent Maria Baguilat demanded that the
indicate the definite price at which the person granting the contract of lease should first be signed. Sometime in March, 1988,
option is willing to sell. petitioner finally presented the lease contract to respondents but it
did not contain the terms and conditions previously agreed upon.
Cited case of Ang Yu Asuncion: An unconditional Then petitioner revised the same, presented to respondents,
mutual promise to buy and sell, as long as the object is made
contained counter-proposals. Respondents refused to accede to retained ownership of the certificate of title of the lot, thereby
such counter-proposals. Despite the fact that no contract was signed indicating no actual or constructive delivery of the ownership of
by the parties, petitioner continued to occupy respondents’ land. the property. Finally, should the transaction pushed through,
Caguiat’s payment of the remaining balance would have been
ISSUE a suspensive condition since the transfer of ownership was
subordinated to the happening of a future and uncertain event.
WON a contract of lease had been perfected
RULING
9. Ang Yu Asuncion vs Court of Appeals
The court held that no contract of lease was perfected between the
parties since the element of consent was missing. The drafting of the Ang Yu Asuncion and Keh Tiong leased, for more than 50
years and religiously paying the rent, residential and
contract - a task entrusted to petitioner - was deemed by commercial spaces in Binondo, owned by the Cu Unjiengs
respondents as a condition precedent to the perfection of the lease and Jose Tan. On several occasions, the lessors informed
contract and consequently, to any construction activity upon their Ang Yu that they are offering to sell the premises and are
land. Although petitioner submitted two drafts, they did not contain giving them priority.
Ang Yu asked the lessors to put their offer in writing, which
the terms and conditions spoken of by the parties during their
they said they would but they never actually put it in
negotiations and were accordingly rejected by respondents. writing. Ang Yu filed the case, claiming that the Cu
However, despite the absence of a perfected contract and in total Unjiengs failed to specify the terms and conditions of the
disregard of respondents’ repeated objections, petitioner occupied offer to sell and that information was received that they
respondents’ land and commenced construction thereon, making were about to sell the property, so Ang Yu wants to
compel the lessors to sell the property to them.
him a builder in bad faith. ** RTC: The Cu Unjiengs’ offer to sell was never
accepted by Ang Yu, for the reason that the parties
didn’t’ agree upon the terms, but nevertheless, should
the Cu Unjiengs offer their property for sale at a price
8. SPOUSES SERRANO, ET. AL. v. CAGUIAT of P11M or lower, Ang Yu will have the right of first
refusal.
FACTS: CA: Affirmed with modification. There will still be a
right of first refusal whether the price is lower or
Spouses Serrano agreed to sell in favor of respondent above P11M.
Caguiat a parcel of land at ₱1,500.00 per square meter. The Cu Unjieng spouses executed a deed of sale, selling
Caguiat partially paid petitioners ₱100, 000.00 as evidenced the property to Buen Realty, for P15M. Buen Realty filed a
case asking Ang Yu to vacate, but Ang Yu claimed that
by a receipt issued by petitioners indicating therein
Buen bought the land while it was under lis pendens.
respondent’s promise to pay the remaining balance. RTC: Buen Realty’s title is set aside as having been
Respondent, after making known his readiness to pay the executed in bad faith. Cu Unjieng spouses ordered to
balance, requested from petitioners the preparation of the sell the property to Ang Yu for P15M.
necessary Deed of Sale. When petitioners cancelled the CA: Reversed. Order to sell is without effect.
transaction and intended to return to Caguiat his partial
payment, respondent filed a complaint for specific performance
Issue:
and damages. The trial court relying on Article 1482 of the Civil
Code ruled that the payment of ₱ 100, 000.00 being an earnest Are the Cu Unjiengs bound to sell the property to Ang
money signified the perfection of the contract of sale. The Yu and co.?
Court of Appeals denied petitioners’ motion for reconsideration
in affirmation of the lower court’s decision. Held:
FACTS
ISSUE