G.R. No. 97332 (October 10, 1991)
Topics: option to buy
Summary:
In 1971, Macaria Labingisa Reyes sold Julio and Marina Villamor a section of land for P21,000.00. The Villamors were given the option to purchase the remaining 300 square meters of the lot. They filed a complaint for specific performance against the Reyeses in 1987.
The petitioners’ evidence, which the private respondents did not refute, demonstrates that the Villamor couples purchased an adjacent lot from Macaria Labing-brother isa’s in 1969 for just P18.00 per square meter. The difference between the purchase price of the 300 square meter portion of the lot in 1971, expressed in terms of money, is the consideration for the deed of option. The Deed of Option was executed on November 11, 1971. The Villamors 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 arise. Demandability may be exercised at any time after the execution of the deed.
Doctrines:
Obligations under an option to buy are reciprocal obligations. The performance of one obligation is conditioned on the simultaneous fulfillment of the other obligation.
Facts:
The owner of a 600 square meter lot in Baesa, Caloocan City, was Macaria Labingisa Reyes. For a sum of P21,000.00 in July 1971, Macaria sold the spouses Julio and Marina and Villamor a section of the lot of 300 square meters. Prior to the sale of the 300 square meter lot, Macaria borrowed P2,000.00 from the spouses; this sum was subtracted from the final purchase price. While the remaining section, which is still in the name of Macaria Labing-isa, is covered by TCT No. 39934, the portion sold to the Villamor couples is now covered by TCT No. 39935.
The remaining 300 square meters of the lot (TCT No. 39934) were to be sold to Villamor under the terms of a “Deed of Option” that Macaria executed in favor of Villamor on November 11th, 1971.
According to Macaria, Marina Villamor declined their offer to repurchase the land they had sold to the Villamor spouses when her husband, Roberto Reyes, retired in 1984 and reminded them that the Deed of Opportunity actually allowed them the option to purchase the remaining section of the lot.
The Villamors, however, asserted that although the Reyeses were aware of their intention to purchase the final 300 square meters of the lot, they had ignored them.
So, on July 13, 1987, following the failure of barangay-level mediation proceedings, they filed a complaint for specific performance against the Reyeses. Villamor’s spouses won the case at RTC, and Reyeses were mandated to sell the remaining half of the property.
CA REVERSED the RTC and dismissed the complaint.
Issue:
Whether the Deed of Option is valid, under which the private respondents promised to sell their property to the petitioners “whenever the need of such sale arises, either on our side (the private respondents) or on the part of Julio and Marina Villamor (the petitioners).”
Ruling:
It was valid before. However, the right of action of the Villamors have already PRESCRIBED.
CONSIDERATION: “the why of the contracts, the essential reason which moves the contracting parties to enter into the contract.”
It is evident from the deed that the petitioner’s agreement to purchase the 300 square meter portion of the private respondents’ land at a price of P70.00 per square meter “which was greatly higher than the actual reasonable prevailing price” was the impelling reason for the private respondents to execute the deed of option.
The petitioners’ evidence, which the private respondents did not refute, demonstrates that the Villamor couples purchased an adjacent lot from Macaria Labing-brother isa’s in 1969 for just P18.00 per square meter. The CA neglected to give this evidence serious regard. The difference between the purchase price of the 300 square meter portion of the lot in 1971 (P70.00 per sq.m.) and the then-current reasonable price for the same lot in 1971, expressed in terms of money, is the consideration for the deed of option. Even though it isn’t written in the deed exactly, whatever it is (P25.00 or P18.00) of choice, was discernible.
The Deed of Option has unique features. If We look closely at the “deed of option” signed by the parties, It 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.
In the instant case, the option offered by private respondents had been accepted by the petitioner, the promise, in the same document. The acceptance of an offer to sell for a price certainly created a bilateral contract to sell and buy and upon acceptance, the offeror, ipso facto assumes obligations of a vendee. Demandability may be exercised at any time after the execution of the deed. “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.”
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.
There was NO PERIOD stated in the Deed within which the parties may demand performance of their obligations. 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.
To allow the petitioner to demand the delivery of the property subject of this case thirteen (13) years or seventeen (17) years after the execution of the deed at the price of only P70.00 per square meter is iniquitous.