SAN MIGUEL PROPERTIES PHILS., INC.

v SPOUSES ALFREDO and GRACE HUANG,

G. R. No. 137290, 31 July 2000
posted in land titles and deeds cases
Mendoza, J. delivered the decision of the Court.
Nature of the Case:
A petition for review for a decision of the Court of Appeals which
reversed the decision of the RTC dismissing the complaint brought by the Huangs against
San Miguel Properties for enforcement of a contract of sale.
Facts: San Miguel Properties offered two parcels of land for sale and the offer was made
to an agent of the respondents. An earnest-deposit of P1 million was offered by the
respondents and was accepted by the petitioners authorized officer subject to certain
terms.
Petitioner, through its executive officer, wrote the respondents lawyer that because ethe
parties failed to agree on the terms and conditions of the sale despite the extension
granted by the petitioner, the latter was returning the earnest-deposit.
The respondents demanded execution of a deed of sale covering the properties and
attempted to return the earnest-deposit but petitioner refused on the ground that the
option to purchase had already expired.
A complaint for specific performance was filed against the petitioner and the latter filed a
motion to dismiss the complaint because the alleged exclusive option of the
respondents lacked a consideration separate and distinct from the purchase price and
was thus unenforceable; the complaint did not allege a cause of action because there
was no meeting of the mind between the parties and therefore the contact of sale was
not perfected.
The trial court granted the petitioners motion and dismissed the action. The respondents
filed a motion for reconsideration but were denied by the trial court. The respondents
elevated the matter to the Court of Appeals and the latter reversed the decision of the
trial court and held that a valid contract of sale had been complied with.
Petitioner filed a motion for reconsideration but was denied.
Issue: WON there was a perfected contract of sale between the parties
Ruling:
The decision of the appellate court was reversed and the respondents
complaint was dismissed.
Ratio Decidendi:
It is not the giving of earnest money , but the proof of the
concurrence of all the essential elements of the contract of sale which establishes the
existence of a perfected sale.
The P1 million earnest-deposit could not have been given as earnest money because at
the time when petitioner accepted the terms of respondents offer, their contract had not
yet been perfected. This is evident from the following conditions attached by respondents
to their letter.
The first condition for an option period of 30 days sufficiently shows that a sale was
never perfected. As petitioner correctly points out, acceptance of this condition did not
give rise to a perfected sale but merely to an option or an accepted unilateral promise on
the part of respondents to buy the subject properties within 30 days from the date of
acceptance of the offer. Such option giving respondents the exclusive right to buy the
properties within the period agreed upon is separate and distinct from the contract of

sale which the parties may enter. All that respondents had was just the option to buy the
properties which privilege was not, however, exercised by them because there was a
failure to agree on the terms of payment. No contract of sale may thus be enforced by
respondents.
Even the option secured by respondents from petitioner was fatally defective. Under the
second paragraph of Art. 1479, an accepted unilateral promise to buy or sell a
determinate thing for a price certain is binding upon the promisor only if the promise is
supported by a distinct consideration. Consideration in an option contract may be
anything of value, unlike in sale where it must be the price certain in money or its
equivalent. There is no showing here of any consideration for the option. Lacking any
proof of such consideration, the option is unenforceable.
Equally compelling as proof of the absence of a perfected sale is the second condition
that, during the option period, the parties would negotiate the terms and conditions of
the purchase. The stages of a contract of sale are as follows: (1) negotiation, covering
the period from the time the prospective contracting parties indicate interest in the
contract to the time the contract is perfected; (2) perfection, which takes place upon the
concurrence of the essential elements of the sale which are the meeting of the minds of
the parties as to the object of the contract and upon the price; and (3) consummation,
which begins when the parties perform their respective undertakings under the contract
of sale, culminating in the extinguishment thereof.
In the present case, the parties never got past the negotiation stage. The alleged
indubitable evidence of a perfected sale cited by the appellate court was nothing more
than offers and counter-offers which did not amount to any final arrangement containing
the essential elements of a contract of sale. While the parties already agreed on the real
properties which were the objects of the sale and on the purchase price, the fact remains
that they failed to arrive at mutually acceptable terms of payment, despite the 45-day
extension given by petitioner.

Atty. Gomez vs CAFacts:Atty. Gomez et al applied for registration of several lots before RTCSaid lots were
involved in Government vs Abran case where SC declared ConsolacionGomez as the owner. Teodo
ro and Luis (Consolacions father and son) inherited the lots.
When Teodoro died, Luis executed a Quitclaim in favor of the Gomezes.In 1981, RTC adjudicated the lots in
favor of the Gomezes. Subsequently, RTC issued anorder directing the Chief of the General Land Registration
Office to issue thecorresponding decrees of registration over the lots.In 1984, Perez, Chief of the Division of
Original Registration, Land RegistrationCommission (now known as the National Land Titles and Deeds
RegistrationAdministration), submitted a report to the RTC stating that the Lots were already covered by
homestead patents issued in 1928 and 1929 and registered under the Land RegistrationAct. Perez then
recommended that the 1981 order be set aside.The Gomezes opposed the report, pointing out that no opposition
was raised by theBureau of Lands during the registration proceedings and the 1981 decision should
beimplemented because it had long become final and executor.RTC then set aside its earlier decision.CA
affirmed the new decision of RTC holding that 1) prior to the issuance of the decreeof registration, RTC Judge
has still the power and control over the decision he rendered;2) The finality of an adjudication of land in a
registration or cadastral case takes placeonly after the expiration of the one-year period after entry of the final
decree ofregistrationGomez et al argued that 1) under Sec 30 and 32 of PD 1529, the 5 Aug 1981 decisionhaving
become final, it may no longer be reopened, reviewed, much less, set aside;2) Perez has no alternative but to
issue the decrees of registration because his duty is purely ministerial; 3)
"the law of the case" is the decision in Govt v. Abran, which held
that the lands adjudicated to Consolacion Gomez were not public lands thus, they couldnot have been acquired
by holders of homestead titles as against them; 4) by sustainingthe 5 Aug 1981 decision, the homestead title
holders may still vindicate their rights byfiling a separate civil action for cancellation of titles and for
reconveyance in a court ofordinary civil jurisdictionIssue:Would finality of the decision adjudicating the land to
the Gomezes bar the RTC fromsetting it aside?Held:

NO. Adjudication of land in a cadastral or land registration proceeding does not becomefinal, in the sense of
incontrovertibility, until after the expiration of 1 year after the entryof the final decree of registration. As long as
a final decree has not been entered by theLand Registration Commission and the period of 1 year has not
elapsed from date ofentry of the decree, the title is not finally adjudicated and the decision in the
registration proceeding continues to be under the control and sound discretion of the court renderingit.Duty of
the land registration officials to issue the decree is NOT purely ministerial. Ifland registration officials are in
doubt upon any point in relation to the preparation andissuance of the decree, it is their duty to refer the matter
to the court. They act, in thisrespect, as officials of the court.The lots were not private lands of Consolacion
Gomez when homestead patents wereissued over them in 1928-1929.
Govt vs. Abran, is not "the law of the case." It was
promulgated only on 31 Dec 1931.The Gomezes can be the ones to vindicate their rights instead. If they are the
true owner,they may bring an action to have the ownership or title to land judicially settled
Regina Dizon et al v. CA and Overland Express Lines, Inc.
G.R. No. 122544 January 28, 1999Martinez, J.
FACTS:

Overland Express Lines, Inc. entered into a Contract of Lease with Option to Buy with
petitionersinvolving a 1,755.80 square meter parcel of land situated at corner MacArthur Highway
and SouthH Street, Diliman, Quezon City. The term of the lease was for 1 year commencing from
May 16,1974 up to May 15, 1975. During this period, Overland Express Lines was
granted
an
option
topurchase for
the amount
of P3,000.00 per
square meter. Thereafter, the lease shall be on a permonth basis with a monthly rental of P3,000.00.

For failure of Overland Express Lines to pay the increased rental of P8,000.00 per month
effective June 1976, petitioners filed an action for ejectment against it. The lower court rendered
judgmentordering Overland Express Lines to vacate the leased premises and to pay the sum of
P624,000.00representing rentals in arrears and/or as damages in the form of reasonable
compensation for theuse and occupation of the premises during the period of illegal detainer from June 1976 to
November1982 at the monthly rental of P8,000.00, less payments made, plus 12% interest per annum
fromNovember 18, 1976, the date of filing of the complaint, until fully paid, the
sum of P8,000.00 amonth starting December 1982, until Overland Express Lines fully vacates the
premises, and to payP20,000.00 as and by way of attorneys fees.
ISSUE:
WON Overland Express Lines actually paid the alleged P300,000.00 to Fidel
a D i z o n , a s representative (agent) of petitioners in consideration of the option
HELD:
No.

CA opined that the payment by Overland Express Lines of P300,000.00 as partial payment for
theleased property, which petitioners accepted (through Alice A. Dizon) and for which an official
receiptwas issued, was the operative act that gave rise to a perfected contract of sale, and that for
failureof petitioners to deny receipt thereof, Overland Express Lines can therefore assume that Alice
A.Dizon, acting as agent of petitioners, was authorized by them to receive the money in their
behalf.CA went further by stating that in fact, what was entered into was a conditional contract of
salewherein ownership over the leased property shall not pass to the Overland Express Lines until
it hasfully paid the purchase price. Since Overland Express Lines did not consign to the court the
balanceof the purchase price and continued to occupy the subject premises, it had the obligation to
pay theamount of P1,700.00 in monthly rentals until full payment of the purchase price.

In an attempt to resurrect the lapsed option, Overland Express Lines gave P300,000.00 to
petitioners(thru Alice A. Dizon) on the erroneous presumption that the said amount tendered would constitute
aperfected contract of sale pursuant to the contract of lease with option to buy. There was no
validconsent by the petitioners (as co-owners of the leased premises) on the supposed sale entered
intoby Alice A. Dizon, as petitioners alleged agent, and Overland Express Lines. The basis for agency
isrepresentation and a person dealing with an agent is put upon inquiry and must discover upon
hisperil the authority of the agent. As provided in Article 1868 of the New Civil Code,
there was noshowing that petitioners consented to the act of Alice A. Dizon nor

authorized
her
to
act
on
theirbehalf with
regard
to her
transaction
with private respondent. The most prudent thing privaterespondent should have done was to
ascertain the extent of the authority of Alice A. Dizon. Beingnegligent in this regard, private respondent cannot
seek relief on the basis of a supposed agency.

Every person
dealing with an agent is put upon inquiry
a n d m u s t d i s c o v e r u p o n h i s p e r i l t h e authority of the agent. If he does not make
such inquiry, he is chargeable with knowledge of the agents authority, and his ignorance of
that authority will not be any excuse. Persons dealing with anassumed agency, whether the assumed
agency be a general or special one, are bound at their peril,if they would hold the principal, to
ascertain not only the fact of the agency but also the nature andextent of the authority, and in
case either is controverted, the burden of proof is upon them to establish it