CASE DIGEST: Adelfa Properties Inc. v. CA

 

ADELFA PROPERTIES, INC., petitioner, vs. COURT OF APPEALS, ROSARIO JIMENEZ-CASTANEDA and SALUD JIMENEZ, respondents
G.R. No. 111238                |              January 25, 1995

 

FACTS:

Herein private respondents and their brothers, Jose and Dominador Jimenez, were registered co-owners of a parcel of land in Barrio Culasi, Las Pinas, MM. On July 28, 1988, Jose and Dominador Jimenez sold their share consisting of ½ of said parcel of land, specifically the eastern portion thereof, to herein petitioner.

Thereafter, petitioner expressed interest in buying the western portion of the property from private respondents. Accordingly, on November 25, 1989, an “Exclusive Option to Purchase” was executed between petitioner and private respondents. One of the terms of said contract was that the P50,000.00 which was received from Adelfa Properties, Inc. as an option money shall be credited as partial payment upon the consummation of the sale and the P2,806,150.00 balance to be paid on or before November 30, 1989.

Before petitioner could make payment, a case for annulment of the deed of sale was filed against Adelfa Inc., Jose and Dominador Jimenez by the nephews and nieces of private respondents. As a consequence, petitioner informed private respondents that it would hold payment of the full purchase price and suggest that private respondents settle the case with their nephews and nieces. Respondent Salud Jimenez refused to heed the suggestion of petitioner and attributed the suspension of payment of the purchase price to “lack of word of honor.”

On December 14, 1989, private respondents informed the petitioner’s counsel that they were cancelling the transaction. On February 23, 1990 the RTC of Makati dismissed the civil case against petitioner. On February 28, 1990, private respondents executed a Deed of Conditional Sale in favor of Emylene Chua over the same parcel of land.

ISSUE:

Whether or not the “Exclusive Option to Purchase” executed between petitioner Adelfa Properties, Inc and private respondents is an option contract

RULING:

An option, as used in the law on sales, is a continuing offer or contract by which the owner stipulates with another that the latter shall have the right to buy the property at a fixed price within a certain time, or under, or in compliance with, certain terms and conditions, or which gives to the owner of the property the right to sell or demand a sale. It is also sometimes called an “unaccepted offer.” An option is not of itself a purchase, but merely secures the privilege to buy. It is not a sale of property but a sale of the right to purchase. It is simply a contract by which the owner of property agrees with smother person that he shall have the right to buy his property at a fixed price within a certain time. He does not sell his land; he does not then agree to sell it; but he does sell something, that is, the right or privilege to buy at the election or option of the other party. Its distinguishing characteristic is that it imposes no binding obligation on the person holding the option, aside from the consideration for the offer. Until acceptance, it is not, properly speaking, a contract, and does not vest, transfer, or agree to transfer, any title to, or any interest or right in the subject matter, but is merely a contract by which the owner of property gives the optionee the right or privilege of accepting the offer and buying the property on certain terms.

On the other hand, a contract, like a contract to sell, involves a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. Contracts, in general, are perfected by mere consent, which is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. The offer must be certain and the acceptance absolute.

The distinction between an “option” and a contract of sale is that an option is an unaccepted offer. It states the terms and conditions on which the owner is willing to sell his land, if the holder elects to accept them within the time limited. If the holder does so elect, he must give notice to the other party, and the accepted offer thereupon becomes a valid and binding contract. If an acceptance is not made within the time fixed, the owner is no longer bound by his offer, and the option is at an end. A contract of sale, on the other hand, fixes definitely the relative rights and obligations of both parties at the time of its execution. The offer and the acceptance are concurrent, since the minds of the contracting parties meet in the terms of the agreement.

A perusal of the contract in this case, as well as the oral and documentary evidence presented by the parties, readily shows that there is indeed a concurrence of petitioner’s offer to buy and private respondents’ acceptance thereof. The rule is that except where a formal acceptance is so required, although the acceptance must be affirmatively and clearly made and must be evidenced by some acts or conduct communicated to the offeror, it may be made either in a formal or an informal manner, and may be shown by acts, conduct, or words of the accepting party that clearly manifest a present intention or determination to accept the offer to buy or sell. Thus, acceptance may be shown by the acts, conduct, or words of a party recognizing the existence of the contract of sale.