#11 BIBLE BAPTIST CHURCH v.

CA

FACTS:

On June 7, 1985, the Bible Baptist Church (petitioner Baptist Church) entered into a contract
of lease 4 with Mr. & Mrs. Elmer Tito Medina Villanueva (respondent spouses
Villanueva).The pertinent stipulations in the lease contract were:

xxx

That upon signing of the LEASE AGREEMENT, the LESSEE shall pay the sum of Eighty
Four Thousand Pesos (P84,000.00) Philippine Currency. Said sum is to be paid directly to
the Rural Bank, Valenzuela, Bulacan for the purpose of redemption of said property which is
mortgaged by the LESSOR.

xxx

That the LESSEE has the option to buy the leased premises during the Fifteen (15) years of
the lease. If the LESSEE decides to purchase the premises the terms will be: A) A selling
Price of One Million Eight Hundred Thousand Pesos (P1.8 million), Philippine Currency. B) A
down payment agreed upon by both parties. C) The balance of the selling price may be paid
at the rate of One Hundred Twenty Thousand Pesos (P120,000.00), Philippine Currency, per
year.

xxx

In this case, petitioner Baptist Church seeks to buy the leased premises from the spouses
Villanueva, under the option given to them. Petitioners claim that theBaptist Church "agreed
to advance the large amount needed for the rescue of the property but, in exchange, it
asked the Villanuevas to grant it a long term lease and an option to buy the property for P1.8
million.” The Baptist Church states that "[t]rue, the Baptist Church did not pay a separate and
specific sum of money to cover the option alone. But the P84,000 it paid the Villanuevas in
advance should be deemed consideration for the one contract they entered into — the lease
with option to buy."

ISSUES:

In sum, this Court has issues to resolve:

1) Whether or not the option to buy given to the Baptist Church is founded upon a
consideration;
2) Whether or not by the terms of the lease agreement, a price certain for the purchase of
the land had been fixed;

HELD:

This Court finds no merit in these contentions.

First, petitioners cannot insist that the P84,000 they paid in order to release the Villanuevas'
property from the mortgage should be deemed the separate consideration to support the
contract of option. It must be pointed out that said amount was in fact apportioned into
monthly rentals spread over a period of one year, at P7,000 per month.

Petitioners further insist that a consideration need not be a separate sum of money. They
posit that their act of advancing the money to "rescue" the property from mortgage and
impending foreclosure, should be enough consideration to support the option. In Villamor
v. Court of Appeals, Actual cash need not be exchanged for the option. However, by the
very nature of an option contract, as defined in Article 1479, the same is an onerous
contract for which the consideration must be something of value, although its kind may
vary. Villamor is distinct from the present case because, First, this Court cannot find that
petitioner Baptist Church parted with anything of value, aside from the amountof P84,000
which was in fact eventually utilized as rental payments. Second, there is no document that
contains an agreement between the parties that petitionerBaptist Church's supposed
rescue of the mortgaged property was the consideration which the parties contemplated in
support of the option clause in the contract.

To summarize the rules, an option contract needs to be supported by a separate

consideration. The consideration need not be monetary but could consist of other things or
undertakings. However, if the consideration is not monetary, these must be things or
undertakings of value, in view of the onerous nature of the contract of option. Furthermore,
when a consideration for an option contract is not monetary, said consideration must be
clearly specified as such in the option contract or clause. Having found that the option to buy
granted to the petitioner Baptist Church was not founded upon a separate consideration, and
hence, not enforceable against respondents, this Court finds no need to discuss whether a
price certain had been fixed as the purchase price.

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#12 LIMSON v. CA

FACTS:

Petitioner Lourdes Ong Limson, in her 14 May 1979 Complaint filed before the trial court,
alleged that in July 1978 respondent spouses Lorenzo de Vera and Asuncion Santos-de
Vera, through their agent Marcosa Sanchez, offered to sell to petitioner a parcel of land; that
on 31 July 1978 she agreed to buy the property at the price of P34.00 per square meter and
gave the sum of P20,000.00 to respondent spouses as "earnest money;" that respondent
spouses signed a receipt therefor and gave her a 10-day option period to purchase the
property; that respondent Lorenzo de Vera then informed her that the subject property was
mortgaged to Emilio Ramos and Isidro Ramos; that respondent Lorenzo de Vera asked her
to pay the balance of the purchase price to enable him and his wife to settle their obligation
with the Ramoses.
Petitioner also averred that she agreed to meet respondent spouses and the Ramoses at
the Office of the Registry of Deeds to consummate the transaction but die to not appearing,
no transaction was formalized and upon rescheduling, such did not again materialize.

On 5 September 1978, Petitioner was surprised to learn from the agent of respondent
spouses that the property was the subject of a negotiation for the sale to respondent Sunvar
Realty Development Corporation (SUNVAR). Petitioner claimed that her valid and legal right
to purchase it was ignored if not violated. Respondent spouses maintained that the option to
buy the property had long expired; that there was no perfected contract to sell between
them. On the other hand, respondent SUNVAR, in their answer,claimed that it was only after
the signing of the Deed of Sale and the payment of the corresponding amounts to
respondent spouses that they came to know of the claim of petitioner as it was only then
that they were furnished copy of the title to the property where the Adverse Claim of
petitioner was annotated. The same respondents maintained that had they known of the
claim of petitioner, they would not have initiated negotiations with respondent spouses for
the purchase of the property. Thus, they prayed for reimbursement of all amounts and
monies received from them by respondent spouses.

ISSUE:

1. Whether there was a perfected contract of sale between petitioner and respondent
spouses
2. Whether the what was perfected between petitioner and respondent spouses was
a mere option

HELD:

The Receiptreadily shows that respondent spouses and petitioner only entered into a
contract of option; a contract by which respondent spouses agreed with petitioner that the
latter shall have the right to buy the former's property at a fixed price of P34.00 per square
meter within ten (10) days from 31 July 1978. Respondent spouses did not sell their
property; they did not also agree to sell it; but they sold something, i.e., the privilege to buy
at the election or option of petitioner. The agreement imposed no binding obligation on
petitioner, aside from the consideration for the offer. The consideration of P20,000.00 paid
by petitioner to respondent spouses was referred to as "earnest money."
"Earnest money" and "option money" are notthe 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.
There is nothing in the Receipt which indicates that the P20,000.00 was part of the purchase
price. Moreover, it was not shown that there was a perfected sale between the parties where
earnest money was given. Finally, when petitioner gave the "earnest money," the Receipt did
not reveal that she was bound to pay the balance of the purchase price.

The option period having expired and acceptance was not effectively made by petitioner, the
purchase of subject property by respondent SUNVAR was perfectly valid and entered into in
good faith.

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#13 ATKINS KROLL & CO. v. CUA HIAN TEK

FACTS:

Dated September 13, 1951, petitioner sent to respondent a letter of the following tenor:

"Sir(s)/Madam:
We are pleased to make you herewith the following firm offer, subject to reply by September 23, 1951:
Quantity and Commodity:
400 Ctns. Luneta brand Sardines in Tomato Sauce 48/15-oz.
Ovals at $8.25 Ctn.
300 Ctns. Luneta brand Sardines Natural 48/15 oz. talls
at $6.25 Ctn.
300 Ctns. Luneta brand Sardines in Tomato Sauce 100/5-oz. talls
at $7.48 Ctn.
Price(s):
All prices are C and F Manila Consular Fees of $6.00 to
be added.
Shipment:
During September/October from US Ports.
Supplier:
Atkins, Kroll & Co., San Francisco, Cal. U.S.A.
We are looking forward to receive your valued order and
remain Very truly yours,"

B. Cua Hian Tek accepted the offer unconditionally and delivered his letter of acceptance on
September 21, 1951. However, due to shortage of catch of sardines by the packers in
California, Atkins, Kroll & Co., Inc., failed to deliver the commodities it had offered for sale.

ISSUE:

Whether acceptance only created an option, which, lacking consideration, had no obligatory
force.
HELD:

In our opinion, an option implies more than that: it implies the legal obligation to keep the
offer open for the time specified. Yet the letter Exh. A did not by itself produce the legal
obligation of keeping the offer open up to September 23. It could be withdrawn before
acceptance, because it is admitted, there was no consideration for it. Furthermore, an option
is unilateral: a promise to sell at the price fixed whenever the offeree should decide to
exercise his option within the specified time. After accepting the promise and before he
exercises his option, the holder of the option is not bound to buy. He is free either to buy or
not to buy later. In this case, however, upon accepting herein petitioner's offer a bilateral
promise to sell and to buy ensued, and the respondent ipso facto assumed the obligations of
a purchaser. He did not just get the right subsequently to buy or not to buy. It was not a mere
option then; it was bilateral contract of sale.

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#14 GREGORIO v. CRISOLOGO VDA. DE CULIG

FACTS:

Respondent Maria Crisologo Vda. de Culig (respondent) is the widow of Alfredo Culig, Sr.
(Alfredo). During his lifetime, Alfredo was granted a homestead patent under the Public Land
Act (C.A. 141) over a 54,730-square meter parcel of land (the property). Alfredo died
sometime in 1971, and on October 9, 1974, his heirs, including respondent, executed an
extra-judicial settlement of estate with simultaneous sale of the property in favor of spouses
Andres Seguritan and Anecita Gregorio (petitioner). The property was sold for P25,0000.00,
and title to the property was issued in the name of the spouses.

respondent filed a complaint demanding the repurchase of the property under the provisions
of the Public Land Act. She alleged that she first approached the spouses personally and
offered to pay back the purchase price of P25,000.00 but the latter refused. For their part,
the spouses Seguritan countered that the respondent had no right to repurchase the
property since the latter only wanted to redeem the property to sell it for a greater profit.

RTC dismissed the complaint relying on the case of Lee Chuy Realty Corporation v. Court of
Appeals ruled that a formal offer alone, or the filing of a case alone, within the prescribed
period of five (5) years is not sufficient to effect a valid offer to redeem — either must or
should be coupled with consignation of the repurchase price.

CA granted the appeal. According to the CA, consignation should not be considered a
requisite element for the repurchase of homestead or free patent lots.

ISSUE:
Whether tender of payment is a requisite for the valid exercise of redemption and
respondent is not entitled for right to repurchase

HELD:

The argument fails.

In Hulganza v. Court of Appeals, we held that the bona fide tender of the redemption price or
its equivalent — consignation of said price in court is not essential or necessary where the
filing of the action itself is equivalent to a formal offer to redeem.

We also do not agree with petitioner's insistence that Article 1616 of the Civil Code applies in
this case. As found by the CA, the provision only speaks of the amount to be tendered when
exercising the right to repurchase, but it does not state the procedure to be followed in
exercising the right. In Lee v. Court of Appeals, the case cited by petitioner, we held that the
mere sending of letters expressing the desire to repurchase is not sufficient to exercise the
right of redemption.

We have ruled in several instances, that the right to repurchase of a patentee should fail if
the purpose was only speculative and for profit, or "to dispose of it again for greater profit" or
"to recover the land only to dispose of it again to amass a hefty profit to themselves." In all
these instances, we found basis for ruling that there was intent to sell the property for a
higher profit. We find no such purpose in this case. The lower courts did not make any
definitive finding that the intent to repurchase was for profit. In its decision, the RTC merely
glossed over the issue of intent, anchoring its dismissal on the respondent's failure to
consign the purchase price. Even the CA observed that the RTC found that the claim of
speculative repurchase is insufficient to warrant the denial of the redemption, as the latter's
denial of the redemption was based on the lack of a formal offer of redemption and
consignation.

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#15 OSMEÑA III v. POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORP.

FACTS:

Respondent Power Sector Assets and Liabilities Management Corporation (PSALM) is a

government-owned and controlled corporation created by virtue ofRepublic Act (R.A.) No. 9136,
otherwise known as the Electric Power Industry Reform Act (EPIRA) of 2001. Its principal
purpose is to manage the orderly sale, disposition, and privatization of the National Power
Corporation's (NPC's) generation assets, real estate and other disposable assets.
Respondent Emmanuel R. Ledesma, Jr. (Ledesma) is the incumbent President and Chief
Executive Officer of PSALM.

SPC is a joint venture corporation between Salcon Power Corporation and Korea Power
Corporation (Kepco). 2 TPVI is a subsidiary of AboitizPower, the power generation company
of the Aboitiz Group.

On October 16, 2009, PSALM privatized the 55-MW Naga Power Plant (LBGT) by way of
negotiated sale after a failed bidding in accordance with the LBGT Bidding Procedures.

On December 27, 2013, the Board of Directors of PSALM approved the commencement of the
3rd Round of Bidding for the sale of the 153.1-MW NPPC. Only SPC and TPVI submitted bids.
On March 31, 2014, TPVI was declared as the highest bidder. Consequently, a Notice of Award 6
was issued to TPVI on April 30, 2014, subject to SPC's right under Section 3.02 of the LBGT-
LLA, as previously stated in Section 1B-20 of the Bidding Procedures.