MORTELL, Khriska Viktoria M.

San Miguel Properties v. Huang G.R. No. 137290

July 31, 2000 MENDOZA, J.
FACTS:
- Petitioner San Miguel Properties put up for sale two parcels of land for
P52,140,000.00. Respondent spouses, through their lawyer, Atty. Helena Dauz,
signified interest in buying the property and after their initial counter-offer was
refused, they paid P1M to serve as earnest-deposit money subject to the
conditions: 1) They have exclusive option to purchase property within 30 days of
the acceptance of the offer; 2) During the period, the two parties will negotiate
terms and conditions; 3) The amount will be refunded if they do not come into an
agreement
- Petitioners VP and Operations Manager, Sobrecarey, accepted the money from
respondent spouses
- However, even after a 45-day extension, the parties still failed to agree on the
terms and conditions of the sale, and so petitioner, through President and CEO
Gonzales, wrote to Atty. Dauz, returning the P1M
- Respondent Spouses demanded the execution of a deed of sale within 5 days
and subsequently filed a complaint for specific performance against petitioner
- RTC: DISMISSED ACTION
- CA: REVERSED; Held that all the requisites of a perfected contract of sale had
been complied with; Fact that mode of payment had not been agreed upon does
not invalidate the contract

ISSUE: WON the P1,000,000 paid by Respondents could be considered earnest
money, thus proving a contract of sale was perfected - NO

HELD:

- Respondents did not give the P1M as earnest money, this amount was paid merely
as a deposit of what would eventually become the earnest money or downpayment
should a contract of sale be made by them
- P1M was not given as a part of the purchase price and as proof of the perfection of the
contract of sale but only as a guarantee that respondents would not back out of the
sale
- It could not also be earnest money as contemplated in Art. 1482 because at the time
when the money was accepted, their contract had not been perfected yet as
evidenced by the following conditions:
Respondents were given exclusive option to purchase the property within 30
days from acceptance of offer
During the option period, the parties would negotiate terms and conditions of the
sale
Petitioner would secure necessary approvals, respondents would handle the
documentation