GAMALIEL C. VILLANUEVA and IRENE C. VILLANUEVA, petitioners, vs.

COURT OF APPEALS, SPOUSES JOSE and LEONILA DELA CRUZ, and SPOUSES GUIDO and FELICITAS PILE, respondents G.R. No. 10762 Jan!a"# 2$, 1%%7 FACTS& Gamaliel Villanueva has been a tenant-occupant of a unit in the 3-door apartment building erected on a parcel of land owned Jose Dela Cruz and eonila dela Cruz and later on the propert! was offered for sale. "he! agreed that the #$%,%%%.%% which was paid on two installments would form part of the sale price of #&&%,%%%.%%. 'ometime thereafter, dela Cruz went to Villanueva bringing with him (r. )en 'abio who will purchase one-half *$+,- of the propert!. "hus, the! would .ust purchase the other half portion and would be pa!ing onl! #,/&,%%%.%%, the! having alread! given an amount of #$%,%%%.%% used for pa!ing the realt! ta0es in arrears. 1ccordingl! the propert! was subdivided and two *,- separate titles were secured b! defendants Dela Cruz. (r. )en 'abio immediatel! made pa!ments b! installments. 'ometime in (arch, $234,Dela Cruz e0ecuted in favor of, the spouses Guide #ili and 5elicitas #ili, a Deed of 1ssignment of the other one-half portion of the parcel of land, wherein plaintiff Gamaliel Villanueva6s apartment unit is situated, as full pa!ment and satisfaction of an indebtedness obtained from defendants #ili. "he title was issued in the name of defendants #ili. Villanueva came to 7now of such assignment and transfer and issuance of a new certificate of title in favor of defendants #ili, he complained to the baranga! captain of )aha! "uro, 8uezon Cit!, on the ground that there was alread! an agreement between defendants Dela Cruz and themselves that said portion of the parcel of land owned b! defendants Dela Cruz would be sold to him. 1s there was no settlement arrived at, the plaintiffs elevated their complaint to this Court through the instant action where it rendered its decision in favor of private respondents. 1n appeal was dul! brought to public respondent which as earlier stated affirmed the said decision. 9'':;< =>;">;? @? A@" ">;?; =1' 1 #;?5;C";D C@A"?1C" @5 '1 ;.

>; D< Ao. #etitioners contended that there was a valid contract of sale because the acceptance of # $%,%%% as a partial pa!ment constituted an agreement with the price. "he contention is without merit. 1s has been said in an old case, the price of the leased land not having been fi0ed, the essential elements which give life to the contract were lac7ing. 9t follows that the lessee cannot compel the lessor to sell the leased land to him. "he price must be certain, it must be real, not fictitious. 9t is not necessar! that the certaint! of the price be actual or determined at the time of e0ecuting the contract. "he fact that the e0act amount to be paid therefor is not precisel! fi0ed, is no bar to an action to recover such compensation, provided the contract, b! its terms, furnishes a basis or measure for ascertaining the amount agreed upon. "he price could be made certain b! the application of 7nown factorsB where, in a sale of coal, a basic price was fi0ed, but sub.ect to modification Cin proportion to variations in calories and ash content, and not otherwise,C the price was held certain. 1 contract of sale is not void for uncertaint! when the price, though not directl! stated in terms of pesos and centavos, can be made certain b! reference to e0isting invoices identified in the agreement. 9n this respect, the contract of sale is perfected. "he price must be certain, otherwise there is no true consent between the parties. "here can be no sale without a price. 9n the instant case, however, what is dramaticall! clear from the evidence is that there was no meeting of mind as to the price, e0pressl! or impliedl!, directl! or indirectl!. 'ale is a consensual contract. >e who alleges it must show its e0istence b! competent proof. >ere, the ver! essential element of price has not been proven. 1dditional doctrine< #etitioners contend that the statute of frauds does not appl! because such statute applies onl! to e0ecutor! contracts whereas in this case the contract of sale had alread! been partl! e0ecuted.9t is true that the statute of frauds applies onl! to e0ecutor! contracts and not to partiall! or completel! e0ecuted that ones. >owever, there is no perfected contract in this case, therefore there is no basis for the application of the statute of frauds. "he application of such statute presupposes the e0istence of a perfected contract and reDuires onl! that a note or memorandum be e0ecuted in order to compel .udicial enforcement thereof. 1lso, the civil law rule on double sale finds no application because there was no sale at all to begin with. what too7 place was onl! a prolonged negotiation to bu! and to sell, and at most, an offer and a counter-offer but no definite agreement was reached b! the parties. >ence, the rules on perfected contract of sale, statute of frauds and double sale find no relevance nor application.

AT'INS, 'ROLL and CO., INC., petitioner, vs. (. CUA )IAN TE', respondent. G.R. No. L*%$71 Jan!a"# +1, 1%,$

FACTS& "he petitioner 1t7ins, Eroll and Co. 9nc, sent to respondent Cua >ian "e7 a letter on 'eptember $3, $2&$ about the Duantities and commodities of goods offered b! the compa!. @n 'eptember ,$, $2&$, Cua >ian "e7 unconditionall! delivered his letter of acceptance. >owever, due to shortage of catch of sardines b! the pac7ers in California, 1t7ins Eroll F Co., failed to deliver the commodities it had offered for sale. 5or its failure to deliver one thousand cartons of sardines, which it had sold to ). Cua >ian "e7, petitioner was sued, and after trial was ordered b! the (anila court of first instance to #a! damages, which on appeal was reduced b! the Court of 1ppeals to #3,,G%.$& representing unrealized profits. #etitioner on the other hand argued that there was no such contract of sale, but onl! an option to buy, which was not enforceable for lac7 of consideration because in accordance with 1rt. $G42 of the Aew Civil Code Can accepted unilatateral promise to bu! or to sell a determinate thing for a price certain is binding upon the promisor if the promise is supported b! a consideration distinct from the price. 9'':;< =>;">;? @? A@" ">;?; =1' 1 V1 9D C@A"?1C" @5 '1 ;. >; D< Hes. #etitioner argues, Cwas a promise to sell a determinate thing for a price certain. :pon its acceptance b! respondent, the offer became an accepted unilateral promise to sell a determinate thing for price certain. 9nasmuch as there was no consideration to support the promise to sell distinct from the price, it follows that under 1rt. $G42, the promise is not binding on the petitioner even if it was accepted b! respondent. "he argument, manifestl! assumes that onl! a unilateral promise arose when the offeree accepted. 'uch assumption is a mista7e, because a bilateral cotract to sell and to bu! was created upon acceptance. 'o much so that ). Cua >ian "e7 could be sued, he had bac7ed out after accepting, b! refusing to get the sardines and+or to pa! for their price. 9ndeed, the word CoptionC is found neither in the offer nor in the acceptance. #etitioner, however, insists the offer was a mere offer of option, because the Cfirm offerC was a continuing offer to sell until 'eptember ,3, Can option is nothing more than a continuing offerC for a specified time. 9n our opinion implies more than that< it implies the legal obligation to 7eep open for the time specified. , Het the letter *dated 'ept $3- did not b! itself produce the legal obligation of 7eeping the offer open up ot 'eptmber ,3. 9t could be withdrawn before acceptance, because it is admitted, there was no consideration for it. @rdinaril! an offer to bu! or sell ma! be withdrawn or countermanded before accepatnce, even though the offer provides that it will not be withdrawn or countermanded, or allows the offeree a certain time within which to accept it, unless such provision or agreement is supported by an independent consideration. 5urthermore, an option is unilateral< a promise to sell3 at the price fi0ed whenever the offeree should decide to e0ercise his option within the specified time. 1fter accepting the promise and before he exercises his option, the holder of the option is not bound to bu!. >e is free either to bu! or not to later. 9n this case, however, upon accepeting herein petitioner6s offer a bilateral promise to sell and to bu! ensued, and the respondent ipso facto assumed the obligations of a purchaser. >e did not .ust get the right subseDuentl! to bu! or not to bu!. 9t was not a mere option thenB it was bilalteral contract of sale. 9f the option is given without a consideration, it is a mere offer of a contract of sale, which is not binding until accepted. 9f, however, acceptance is made before a withdrawal, it constitutes a binding contract of sale, even though the option was not supported b! a sufficient consideration. 9t can be ta7en for granted, as contended b! the defendants, that the option contract was not valid for lac7 of consideration. )ut it was, at least, an offer to sell, which was accepted b! letter, and of this acceptance the offerer had 7nowledge before said offer was withdrawn. "he concurrence of both actsIthe offer and the acceptanceI could at all events have generated a contract, "hus, there was a contract of sale between the parties. 1nd as no legal e0cuse has been proven, the seller6s failure to compl! therewith gave around to an award for damages.

NICOLAS SANC)EZ, plaintiff-appellee, vs. SEVERINA RIGOS, defendant-appellant. G.R. No. L*2, % J!n- 1 , 1%72

51C"'< @n 1pril 3, $2/$, plaintiff Aicolas 'anchez and defendant 'everina ?igos e0ecuted an instrument entitled C@ption to #urchase,C whereb! (rs. ?igos Cagreed, promised and committed ... to sellC to 'anchez the sum of #$,&$%.%%, a parcel of land situated in the barrios of 1bar and 'ibot, municipalit! of 'an Jose, province of Aueva ;ci.a. within two *,- !ears from said date with the understanding that said option shall be deemed Cterminated and elapsed,C if C'anchez shall fail to e0ercise his right to bu! the propert!C within the stipulated period. 9nasmuch as several tenders of pa!ment of the sum of #l,&$%.%%, made b! 'anchez within said period, were re.ected b! (rs. ?igos, on (arch $,, $2/3, the former deposited said amount with the Court of 5irst 9nstance of Aueva ;ci.a and commenced against the latter the present action, for specific performance and damages. "he defendant argued that the contract between the parties Cis a unilateral promise to sell, and the same being unsupported b! an! valuable consideration, b! force of the Aew Civil Code, is null and voidJ. "he lower court rendered .udgment for 'anchez, ordering (rs. ?igos to accept the sum .udiciall! consigned b! him and to e0ecute, in his favor, the reDuisite deed of conve!ance thus an appeal was made b! (rs. ?igos. 9'':;< =>;">;? @? A@" ">; C@A"?1C" 9' 1 :A9 1";?1 V1 :1) ; C@A'9D;?1"9@A, 9" 9' A: 1AD V@9D. #?@(9'; "@ '; 1AD =9">@:" 1AH

>; D< Ao. :nder article $3,G of the new Civil Code, the general rule regarding offer and acceptance is that, when the offerer gives to the offeree a certain period to accept, Cthe offer ma! be withdrawn at an! time before acceptanceC e0cept when the option is founded upon consideration, but this general rule must be interpreted as modified b! the provision of article $G42 above referred to, which applies to Ca promise to bu! and sellC specifically. 1s alread! stated, this rule reDuires that a promise to sell to be valid must be supported b! a consideration distinct from the price. in the case of Atkins, Kroll and Co., Inc. v. Cua Hian Tek , $ decided later that outh!estern ugar " #olasses Co. v. Atlantic $ulf " %acific Co. , % saw no distinction between 1rticles $3,G and $G42 of the Civil Code and applied the former where a unilateral promise to sell similar to the one sued upon here was involved, treating such promise as an option which, although not binding as a contract in itself for lac7 of a separate consideration, nevertheless generated a bilateral contract of purchase and sale upon acceptance. 9n other words, since there ma! be no valid contract without a cause or consideration, the promisor is not bound b! his promise and ma!, accordingl!, withdraw it. #ending notice of its withdrawal, his accepted promise parta7es, however, of the nature of an offer to sell which, if accepted, results in a perfected contract of sale. "his view has the advantage of avoiding a conflict between 1rticles $3,G I on the general principles on contracts I and $G42 I on sales I of the Civil Code, in line with the cardinal rule of statutor! construction that, in construing different provisions of one and the same law or code, such interpretation should be favored as will reconcile or harmonize said provisions and avoid a conflict between the same. 9ndeed, the presumption is that, in the process of drafting the Code, its author has maintained a consistent philosoph! or position. (oreover, the decision in outh!estern ugar " #olasses Co. v. Atlantic $ulf " %acific Co. , 10 holding that 1rt. $3,G is modifiedb! 1rt. $G42 of the Civil Code, in effect, considers the latter as an exception to the former, and e0ceptions are not favored, unless the intention to the contrar! is clear, and it is not so, insofar as said two *,articles are concerned. =hat is more, the reference, in both the second paragraph of 1rt. $G42 and 1rt. $3,G, to an option or promise supported b! or founded upon a consideration, strongl! suggests that the two *,- provisions intended to enforce or implement the same principle. :pon mature deliberation, the Court is of the considered opinion that it should, as it hereb! reiterates the doctrine laid down in the Atkins, Kroll " Co. case, and that, insofar as inconsistent therewith, the view adhered to in the outh!estern ugar " #olasses Co. case should be deemed abandoned or modified.

ANG .U ASUNCION, ART)UR GO AND 'E) TIONG, petitioners, vs. T)E )ON. COURT OF APPEALS and (UEN REALT. DEVELOPMENT CORPORATION, respondents G.R. No. 10%12, D-/-01-" 2, 1%%

FACTS& T2- plaintiffs, 1ng Hu 1suncion and Eeh "iong, are tenants or lessees of residential and commercial spaces owned b! defendants, )obb! Cu :n.ieng since$23& and have been religiousl! pa!ing the rental and compl!ing with all the conditions of the lease contract."he defendants informed plaintiffs that the! are offering to sell the premises and are giving them priorit! to acDuire the sameB that during the negotiations, )obb! Cu :n.ieng offered a price of #/-million while plaintiffs made a counter offer of #&-million. plaintiffs thereafter as7ed the defendants to put their offer in writing to which reDuest defendants accededB that in repl! to defendant6s letter, plaintiffs wrote them on @ctober ,G, $23/ as7ing that the! specif! the terms and conditions of the offer to sellB that when plaintiffs did not receive an! repl!, the! sent another letter dated Januar! ,3, $234 with the same reDuestB that since defendants failed to specif! the terms and conditions of the offer to sell and because of information received that defendants were about to sell the propert!, plaintiffs were compelled to file the complaint to compel defendants to sell the propert! to them. "he trial court found that defendants6 offer to sell was never accepted b! the plaintiffs for the reason that the parties did not agree upon the terms and conditions of the proposed sale, hence, there was no contract of sale at all. Aonetheless, the lower court ruled that should the defendants subseDuentl! offer their propert! for sale at a price of #$$-million or below, plaintiffs will have the right of first refusal. 1ggrieved b! the decision, plaintiffs appealed to the Court of 1ppelas which affirmed with modification the lower court6s .udgment, holding that there was no meeting of the minds between the parties concerning the sale of the propert!. 1bsent such reDuirement, the claim for specific performance will not lie. "he decision of this Court was brought to the 'upreme Court b! petition for review on certiorari. "he 'upreme Court denied the appeal Cfor insufficienc! in form and substancesC. @n Aovember $&, $22%, while the civil case was pending consideration b! this Court, the Cu :n.ieng spouses e0ecuted a Deed of 'ale transferring the propert! in Duestion to herein petitioner )uen ?ealt! and Development Corporation. "he new owner of the said propert! wrote a letter to the lessees demanding their vacation but replied that the! had brought the propert! sub.ect to the notice of lis pendens. 1 modified order was issued wherein defendants are hereb! ordered to e0ecute the necessar! Deed of 'ale of the propert! in litigation in favor of plaintiffs 1ng Hu 1suncion, Eeh "iong and 1rthur Go for the consideration of #$& (illion pesos in recognition of plaintiffs6 right of first refusal and that a new "ransfer Certificate of "itle be issued in favor of the bu!er. 1 writ of e0ecution was issued thereafter. 9'':;< $- =>@ >1' ">; ?9G>" @5 ?;5:'1 . ,- (1H 1 =?9" @5 ;K;C:"9@A ); 1 ?;(;DH 5@? ">9' C1';. >; D< "he petitioners have the right of refusal. 9n the law on sales, the so-called Cright of first refusalC is an innovative .uridical relation. Aeedless to point out, it cannot be deemed a perfected contract of sale under 1rticle $G&3 of the Civil Code. Aeither can the right of first refusal, understood in its normal concept, per se be brought within the purview of an option under the second paragraph of 1rticle $G42, aforeDuoted, or possibl! of an offer under 1rticle $3$2 % of the same Code. 1n option or an offer would reDuire, among other things, 10 a clear certaint! on both the ob.ect and the cause or consideration of the envisioned contract. 9n a right of first refusal, while the ob.ect might be made determinate, the e0ercise of the right, however, would be dependent not onl! on the grantor6s eventual intention to enter into a binding .uridical relation with another but also on terms, including the price, that obviousl! are !et to be later firmed up. #rior thereto, it can at best be so described as merel! belonging to a class of preparator! .uridical relations governed not b! contracts *since the essential elements to establish the vinculum &uris would still be indefinite and inconclusive- but b!, among other laws of general application, the pertinent scattered provisions of the Civil Code on human conduct. ;ven on the premise that such right of first refusal has been decreed under a final .udgment, li7e here, its breach cannot .ustif! correspondingl! an issuance of a writ of e0ecution under a .udgment that merel! recognizes its e0istence, nor would it sanction an action for specific performance without thereb! negating the indispensable element of consensualit! in the perfection of contracts. 11 9t is not to sa!, however, that the right of first refusal would be inconseDuential for, such as alread! intimated above, an un.ustified disregard thereof, given, for instance, the circumstances e0pressed in 1rticle $2 12 of the Civil Code, can warrant a recover! for damages. "he final .udgment in the civil action has merel! accorded a Cright of first refusalC in favor of petitioners. "he conseDuence of such a declaration entails no more than what has heretofore been said. 9n fine, if, as it is here so conve!ed to us, petitioners are aggrieved b! the failure of private respondents to honor the right of first refusal, the remed! is not a writ of e0ecution on the .udgment, since there is none to e0ecute, but an action for damages in a proper forum for the purpose. 5urthermore, whether private respondent )uen ?ealt! Development Corporation, the alleged purchaser of the propert!, has acted in good faith or bad faith and whether or not it should, in an! case, be considered bound to respect the registration of the lis pendens in Civil Case Ao. 34-G$%&3 are matters that must be independentl!

addressed in appropriate proceedings. )uen ?ealt!, not having been impleaded in Civil Case Ao. 34-G$%&3, cannot be held sub.ect to the writ of e0ecution issued b! respondent Judge, let alone ousted from the ownership and possession of the propert!, without first being dul! afforded its da! in court. =e are also unable to agree with petitioners that the Court of 1ppeals has erred in holding that the writ of e0ecution varies the terms of the .udgment in Civil Case Ao. 34-G$%&3. 9t is li7ewise Duite obvious to us that the decision in Civil Case Ao. 34-G$%&3 could not have decreed at the time the e0ecution of an! deed of sale between the Cu :n.iengs and petitioners. "he 'C affirmed the decision of the Court of 1ppelas for setting aside and declaring that the said orders are null and have no effect. 1dditional doctrines< 1n obligation is a .uridical necessit! to give, to do or not to do * Art. ''(), Civil Code-. "he obligation is constituted upon the concurrence of the essential elements thereof, vi*< *a- "he vinculum &uris or &uridical tie which is the efficient cause established b! the various sources of obligations *law, contracts, Duasi-contracts, delicts and Duasidelicts-B *b- the ob&ect which is the prestation or conductB reDuired to be observed *to give, to do or not to do-B and *c- the sub&ect+persons who, viewed from the demandabilit! of the obligation, are the active *obligee- and the passive *obligor- sub.ects. 1mong the sources of an obligation is a contract *1rt. $$&4, Civil Code-, which is a meeting of minds between two persons whereb! one binds himself, with respect to the other, to give something or to render some service *1rt. $3%&, Civil Code-. 1 contract undergoes various stages that include its negotiation or preparation, its perfection and, finall!, its consummation. ,egotiation covers the period from the time the prospective contracting parties indicate interest in the contract to the time the contract is concluded *perfected-. "he perfection of the contract ta7es place upon the concurrence of the essential elements thereof. 1 contract which is consensual as to perfection is so established upon a mere meeting of minds, i.e., the concurrence of offer and acceptance, on the ob.ect and on the cause thereof. 1 contract which reDuires, in addition to the above, the deliver! of the ob.ect of the agreement, as in a pledge or commodatum, is commonl! referred to as a real contract. 9n a solemn contract, compliance with certain formalities prescribed b! law, such as in a donation of real propert!, is essential in order to ma7e the act valid, the prescribed form being thereb! an essential element thereof. "he stage of consummationbegins when the parties perform their respective underta7ings under the contract culminating in the e0tinguishment thereof. :ntil the contract is perfected, it cannot, as an independent source of obligation, serve as a binding .uridical relation. 9n sales, particularl!, to which the topic for discussion about the case at bench belongs, the contract is perfected when a person, called the seller, obligates himself, for a price certain, to deliver and to transfer ownership of a thing or right to another, called the bu!er, over which the latter agrees. =hen the sale is not absolute but conditional, such as in a CContract to 'ellC where invariabl! the ownership of the thing sold is retained until the fulfillment of a positive suspensive condition *normall!, the full pa!ment of the purchase price-, the breach of the condition will prevent the obligation to conve! title from acDuiring an obligator! force. 2 9n -ignos vs. Court of Appeals *$&3 'C?1 34&-, we have said that, although denominated a CDeed of Conditional 'ale,C a sale is still absolute where the contract is devoid of an! proviso that title is reserved or the right to unilaterall! rescind is stipulated, e.g., until or unless the price is paid. @wnership will then be transferred to the bu!er upon actual or constructive deliver! *e.g., b! the e0ecution of a public document- of the propert! sold. =here the condition is imposed upon the perfection of the contract itself, the failure of the condition would prevent such perfection. + 9f the condition is imposed on the obligation of a part! which is not fulfilled, the other part! ma! either waive the condition or refuse to proceed with the sale *1rt. $&G&, Civil Code-. 1n unconditional mutual promise to bu! and sell, as long as the ob.ect is made determinate and the price is fi0ed, can be obligator! on the parties, and compliance therewith ma! accordingl! be e0acted. , 1n accepted unilateral promise which specifies the thing to be sold and the price to be paid, !hen coupled !ith a valuable consideration distinct and separate from the price, is what ma! properl! be termed a perfected contract ofoption. "his contract is legall! binding, and in sales, it conforms with the second paragraph of 1rticle $G42 of the Civil Code

@bserve, however, that the option is not the contract of sale itself. 7 "he optionee has the right, but not the obligation, to bu!. @nce the option is e0ercised timel!, i.e., the offer is accepted before a breach of the option, a bilateral promise to sell and to bu! ensues and both parties are then reciprocall! bound to compl! with their respective underta7ings 1 negotiation is formall! initiated b! an offer. 1n imperfect promise .policitacion/ is merel! an offer. #ublic advertisements or solicitations and the li7e are ordinaril! construed as mere invitations to ma7e offers or onl! as proposals. "hese relations, until a contract is perfected, are not considered binding commitments. "hus, at an! time prior to the perfection of the contract, either negotiating part! ma! stop the negotiation. "he offer, at this stage, ma! be withdrawnB the withdrawal is effective immediatel! after its manifestation, such as b! its mailing and not necessaril! when the offeree learns of the withdrawal * audico vs. 1rias, G3 #hil. ,4%-. =here a period is given to the offeree within which to accept the offer, the following rules generall! govern< $- 9f the period is not itself founded upon or supported b! a consideration, the offeror is still free and has the right to withdraw the offer before its acceptance, or, if an acceptance has been made, before the offeror6s coming to 7now of such fact, b! communicating that withdrawal to the offeree. "he right to withdraw, however, must not be e0ercised whimsicall! or arbitraril!B otherwise, it could give rise to a damage claim under 1rticle $2 of the Civil Code which ordains that Cever! person must, in the e0ercise of his rights and in the performance of his duties, act with .ustice, give ever!one his due, and observe honest! and good faith.C ,- 9f the period has a separate consideration, a contract of CoptionC is deemed perfected, and it would be a breach of that contract to withdraw the offer during the agreed period. "he option, however, is an independent contract b! itself, and it is to be distinguished from the pro.ected main agreement *sub.ect matter of the option- which is obviousl! !et to be concluded. 9f, in fact, the optioner-offeror !ithdra!s the offer before its acceptance *e0ercise of the option- b! the optionee-offeree, the latter ma! not sue for specific performance on the proposed contract *Cob.ectC of the option- since it has failed to reach its own stage of perfection. "he optioner-offeror, however, renders himself liable for damages for breach of the option. 9n these cases, care should be ta7en of the real nature of the consideration given, for if, in fact, it has been intended to be part of the consideration for the main contract with a right of withdrawal on the part of the optionee, the main contract could be deemed perfectedB a similar instance would be an Cearnest mone!C in a contract of sale that can evidence its perfection

ARTURO R. A(ALOS, petitioner, vs. DR. GALICANO S. MACATANGA., JR., respondent G.R. No. 1,,0 + S-34-01-" +0, 200 51C"'< 'pouses 1rturo and ;sther 1balos are the registered owners of a parcel of land with improvements located at 1zucena 't., (a7ati Cit!. 1rmed with a 'pecial #ower of 1ttorne! dated June ,, $233, purportedl!

issued b! his wife, 1rturo e0ecuted a 0eceipt and #emorandum of Agreement *?(@1- dated @ctober $4, $232, in favor of respondent, binding himself to sell to respondent the sub.ect propert! and not to offer the same to an! other part! within 3%- da!s from date. 1rturo ac7nowledged receipt of a chec7 from respondent in the amount of #&,%%%.%%, representing earnest mone! for the sub.ect propert!, the amount of which would be deducted from the purchase price of #$,3%%,%%%.%%. 5urther, the ?(@1 stated that full pa!ment would be effected as soon as possession of the propert! shall have been turned over to respondent. @n Aovember $/, $232, respondent sent a letter to 1rturo and ;sther informing them of his readiness and willingness to pa! the full amount of the purchase price. "he letter contained a demand upon the spouses to compl! with their obligation to turn over possession of the propert! to him. @n the same date, ;sther, through her attorne!-in-fact, e0ecuted in favor of respondent, a Contract to 'ell the propert! to the e0tent of her con.ugal interest therein for the sum of #/&%,%%%.%% less the sum alread! received b! her and 1rturo. ;sther agreed to surrender possession of the propert! to respondent within ,% da!s from Aovember $/, $232, while the latter promised to pa! the balance of the purchase price in the amount of #$,,2%,%%%.%% after being placed in possession of the propert!. ;sther also obligated herself to e0ecute and deliver to respondent a deed of absolute sale upon full pa!ment. 9n a letter dated December 4, $232,he reiterated his demand upon them to compl! with their obligation to turn over possession of the propert!. 1rturo and ;sther failed to deliver the propert! which prompted respondent to cause the annotation of another adverse claim on "C" Ao. $G&3$/. @n Januar! $,, $22%, respondent filed a complaint for specific performance with damages against petitioners. "he ?egional "rial Court *?"C- dismissed the complaint for specific performance on the ground that the '#1 is void because it was falsified. @n appeal ta7en b! respondent, the Court of 1ppeals reversed the decision of the trial court. 9t ruled that the '#1 in favor of 1rturo, assuming that it was void, cannot affect the transaction between ;sther and respondent. "he appellate court ratiocinated that it was b! virtue of the '#1 e0ecuted b! ;sther, in favor of her sister, that the sale of the propert! to respondent was effected. @n the other hand, the appellate court considered the ?(@1 e0ecuted b! 1rturo in favor of respondent valid to effect the sale of 1rturoLs con.ugal share in the propert!. #etitioner see7s reversal for the C1Ls decision. 9'':;< =>;">;? @? A@" ">; #;"9"9@A;? (1H ); C@(#; ;D "@ C@AV;H ">; #?@#;?"H "@ ?;'#@AD;A"' :AD;? ">; ";?(' @5 ?(@1 1AD ">; C@A"?1C" "@ '; . >; D< Ao. "he nullit! of the ?(@1 as a contract of sale emanates not onl! from lac7 of ;stherLs consent thereto but also from want of consideration and absence of respondentLs signature thereon. 'uch nullit! cannot be obliterated b! ;stherLs subseDuent confirmation of the putative transaction as e0pressed in the Contract to 'ell. :nder the law, a void contract cannot be ratified $3 and the action or defense for the declaration of the ine0istence of a contract does not prescribe.$2 1 void contract produces no effect either against or in favor of an!oneMit cannot create, modif! or e0tinguish the .uridical relation to which it refers. "rue, in the Contract to 'ell, ;sther made reference to the earlier ?(@1 e0ecuted b! 1rturo in favor of respondent. >owever, the ?(@1 which 1rturo signed is different from the deed which ;sther e0ecuted through her attorne!-in-fact. 5or one, the first is sought to be enforced as a contract of sale while the second is purportedl! a contract to sell onl!. 5or another, the terms and conditions as to the issuance of title and deliver! of possession are divergent. "he congruence of the wills of the spouses is essential for the valid disposition of con.ugal propert!. =here the conve!ance is contained in the same document which bears the conformit! of both husband and wife, there could be no Duestion on the validit! of the transaction. )ut when there are two *,- documents on which the signatures of the spouses separatel! appear, te0tual concordance of the documents is indispensable. >ence, in this case where the wifeLs putative consent to the sale of con.ugal propert! appears in a separate document which does not, however, contain the same terms and conditions as in the first document signed b! the husband, a valid transaction could not have arisen. "he sub.ect land which had been admittedl! acDuired during the marriage of the spouses forms part of their con.ugal partnership. 9t has been held that prior to the liDuidation of the con.ugal partnership, the interest of each spouse in the con.ugal assets is inchoate, a mere e0pectanc!, which constitutes neither a legal nor an eDuitable estate, and does not ripen into title until it appears that there are assets in the communit! as a result of the liDuidation and settlement. "he interest of each spouse is limited to the net remainder or C remanente li1uidoC *haber ganancial- resulting from the liDuidation of the affairs of the partnership after its dissolution. ,4 "hus, the right of the husband or wife to one-half of the con.ugal assets does not vest until the dissolution and liDuidation of the con.ugal partnership, or after dissolution of the marriage, when it is finall! determined that, after settlement of con.ugal obligations, there are net assets left which can be divided between the spouses or their respective heirs. ,3 'ignificantl!, the 5amil! Code has introduced some changes particularl! on the aspect of the administration of the con.ugal partnership. "he new law provides that the administration of the con.ugal partnership is now a .oint underta7ing of the husband and the wife. 9n the event that one spouse is incapacitated or otherwise unable to

participate in the administration of the con.ugal partnership, the other spouse ma! assume sole powers of administration. >owever, the power of administration does not include the power to dispose or encumber propert! belonging to the con.ugal partnership.3/ 9n all instances, the present law specificall! reDuires the written consent of the other spouse, or authorit! of the court for the disposition or encumbrance of con.ugal partnership propert! without which, the disposition or encumbrance shall be void. 3 9nescapabl!, herein petitionerLs action for specific performance must fail. ;ven on the supposition that the parties onl! disposed of their respective shares in the propert!, the sale, assuming that it e0ists, is still void for as previousl! stated, the right of the husband or the wife to one-half of the con.ugal assets does not vest until the liDuidation of the con.ugal partnership. ,emo dat 1ui non habet. Ao one can give what he has not.

RIVIERA FILIPINA, INC., petitioner, vs. COURT OF APPEALS, JUAN L. RE.ES, *now deceased-, substituted b! his heirs, namel!, ;stefania ). ?e!es, Juanita ?. de la ?osa, Juan ). ?e!es, Jr. and 5idel ). ?e!es, P)ILIPPINE C.PRESS CONSTRUCTION 5 DEVELOPMENT CORPORATION, CORN)ILL TRADING CORPORATION and UR(AN DEVELOPMENT (AN', respondents G.R. No. 117+,, A3"67 ,, 2002

FACTS: Juan . ?e!es e0ecuted a ten !ear renewable Contract of ease with ?iviera for a parcel of land located in 8uezon Cit!. "he said parcel of land was sub.ect of a ?eal ;state (ortgage e0ecuted b! ?e!es in favor of #rudential )an7. 'ince the loan with #rudential )an7 remained unpaid upon maturit!, the mortgagee ban7 e0tra.udiciall! foreclosed the mortgage thereon. 1t the public auction sale, the mortgagee ban7 emerged as the highest bidder. "he redemption period was set to e0pire on (arch 4, $232. ?ealizing that he could not possibl! raise in time the mone! needed to redeem the sub.ect propert!, ?e!es decided to sell the same. 'ince paragraph $$ of the lease contract e0pressl! provided that the C 23 33 shall have the right of first refusal should the 23 40 decide to sell the property during the term of the lease, C4 ?e!es offered to sell the sub.ect propert! to ?iviera for # &%%% per sDuare meter but were not able to agree with the price. 'ince there were no agreement with the price, ?e!es sold the parcel of land with C!press and its partner in the venture, Cornhill "rading Corporation at the amount of # &,3%% per sDuare meter. ?iviera filed an action for the violation of his right of first refusal. 9'':;< =>;">;? @? A@" >9' ?9G>" 5@? 59?'" ?;5:'1 >1D );;A V9@ 1";D.

>; D< Ao. "he prevailing doctrine is that a right of first refusal means identit! of terms and conditions to be offered to the lessee and all other prospective bu!ers and a contract of sale entered into in violation of a right of first refusal of another person, while valid, is rescissible. 9n the case at bar, the Court finds relevant and significant the cardinal rule in the interpretation of contracts that the intention of the parties shall be accorded primordial consideration and in case of doubt, their contemporaneous and subseDuent acts shall be principall! considered. =here the parties to a contract have given it a practical construction b! their conduct as b! acts in partial performance, such construction ma! be considered b! the court in construing the contract, determining its meaning and ascertaining the mutual intention of the parties at the time for contracting. "he partiesL practical construction of their contract has been characterized as a clue or inde0 to, or as evidence of, their intention or meaning and as an important, significant, convincing, persuasive, or influential factor in determining the proper construction of the contract. 1n e0amination of the attendant particulars of the case do not persuade us to uphold ?ivieraLs view. 1s clearl! shown b! the records and transcripts of the case, the actions of the parties to the contract of lease, ?e!es and ?iviera, shaped their understanding and interpretation of the lease provision Cright of first refusalC to mean simpl! that should the lessor ?e!es decide to sell the leased propert! during the term of the lease, such sale should first be offered to the lessee ?iviera. 1nd that is what e0actl! ensued between ?e!es and ?iviera, a series of negotiations on the price per sDuare meter of the sub.ect propert! with neither part!, especiall! ?iviera, unwilling to budge from his offer, as evidenced b! the e0change of letters between the two contenders. 9t can clearl! be discerned from ?ivieraLs letters dated December ,, $233 and 5ebruar! G, $232 that ?iviera was so intractable in its position and too7 obvious advantage of the 7nowledge of the time element in its negotiations with ?e!es as the redemption period of the sub.ect foreclosed propert! drew near. ?iviera strongl! e0hibited a Cta7e-it or leave-itC attitude in its negotiations with ?e!es. 9ts stubborn approach in its negotiations with ?e!es showed cr!stal-clear that there was never an! need to disclose such information and doing so would be .ust a futile effort on the part of ?e!es. ?e!es was under no obligation to disclose the same. #ursuant to 1rticle $332 of the Aew Civil Code, silence or concealment, b! itself, does not constitute fraud, unless there is a special dut! to disclose certain facts, or unless according to good faith and the usages of commerce the communication should be made. =e appl! the general rule in the case at bar since ?iviera failed to convincingl! show that either of the e0ceptions are relevant to the case at bar. 9n sum, the Court finds that in the interpretation of the right of first refusal as understood b! the parties herein, the Duestion as to what is to be included therein or what is meant b! the same, as in all other provisions of the contract, is for the parties and not for the court to determine, and this Duestion ma! not be resolved b! what the parties might have provided had the! thought about it, which is evident from ?iviera claims, or b! what the court might conclude regarding abstract fairness. E8UATORIAL REALT. DEVELOPMENT, INC., petitioner, vs. MA.FAIR T)EATER, INC., respondent. G.R. No. 1++$7% No9-01-" 21, 2001 FACTS: Carmelo F )auermann, 9nc. used to own a parcel of land, together with two ,-store! buildings constructed thereon, located at Claro (. ?ecto 1venue, (anila. @n June $, $2/4, Carmelo entered into a Contract of ease with (a!fair "heater 9nc. for a period of ,% !ears. "he lease covered a portion of the second floor and mezzanine of a two-store! building with about $,/$% sDuare meters of floor area, which respondent used as a movie house

7nown as (a0im "heater. "wo !ears later, on (arch 3$, $2/2, (a!fair entered into a second Contract of ease with Carmelo for the lease of another portion of the latter6s propert! I namel!, a part of the second floor of the two-store! building, with a floor area of about $,%/G sDuare metersB and two store spaces on the ground floor and the mezzanine, with a combined floor area of about 3%% sDuare meters. 9n that space, (a!fair put up another movie house 7nown as (iramar "heater. "he Contract of ease was li7ewise for a period of ,% !ears. )oth leases contained a provision granting (a!fair a right of first refusal to purchase the sub.ect properties. >owever, on Jul! 3%, $243 I within the ,%-!ear-lease term I the sub.ect properties were sold b! Carmelo to ;Duatorial ?ealt! Development, 9nc. for the total sum of #$$,3%%,%%%, without their first being offered to (a!fair. 1s a result of the sale of the sub.ect properties to ;Duatorial, (a!fair filed a Complaint before the ?"C for *a- the annulment of the Deed of 1bsolute 'ale between Carmelo and ;Duatorial, *b- specific performance, and *c- damages. "he lower court rendered a Decision in favor of Carmelo and ;Duatorial. "he Court of 1ppeals completel! reversed and set aside the .udgment of the lower court and rescinded the contract between Carmelo and ;Duatorial and allowed (a!fair to bu! the said lot, hence this petition for review. 9'':;< =>;">;? @? A@" ;8:1"@?91 9' ;A"9" ;D =9"> )1CE?;A"1 '. >; D< Ao. Ao right of ownership was transferred from Carmelo to ;Duatorial in view of a patent failure to deliver the propert! to the bu!er. it is clear that petitioner never too7 actual control and possession of the propert! sold, in view of respondent6s timel! ob.ection to the sale and the continued actual possession of the propert!. "he ob.ection too7 the form of a court action impugning the sale which, as we 7now, was rescinded b! a .udgment rendered b! this Court in the mother case. 9t has been held that the e0ecution of a contract of sale as a form of constructive deliver! is a legal fiction. 9t holds true onl! when there is no impediment that ma! prevent the passing of the propert! from the hands of the vendor into those of the vendee. ,3 =hen there is such impediment, Cfiction !ields to realit! I the deliver! has not been effected.C "hus, the sale to ;Duatorial ma! have been valid from inception, but it was .udiciall! rescinded before it could be consummated. #etitioner never acDuired ownership, not because the sale was void, as erroneousl! claimed b! the trial court, but because the sale was not consummated b! a legally effective deliver! of the propert! sold. 1dditional doctrines< ?ent is a civil fruit$/ that belongs to the owner of the propert! producing it $4 b! right of accession.$3 ConseDuentl! and ordinaril!, the rentals that fell due from the time of the perfection of the sale to petitioner until its rescission b! final .udgment should belong to the owner of the propert! during that period. )! a contract of sale, Cone of the contracting parties obligates himself to transfer ownership of and to deliver a determinate thing and the other to pa! therefor a price certain in mone! or its eDuivalent.C $2 @wnership of the thing sold is a real right, ,% which the buyer ac1uires only upon delivery of the thing to him Cin an! of the wa!s specified in articles $G24 to $&%$, or in an! other manner signif!ing an agreement that the possession is transferred from the vendor to the vendee.C ,$ "his right is transferred, not merel! b! contract, but also b! tradition or deliver!.,, ,on nudis pactis sed traditione dominia rerum transferantur . 1nd there is said to be deliver! if and when the thing sold Cis placed in the control and possession of the vendee.C ,3 "hus, it has been held that while the e0ecution of a public instrument of sale is recognized b! law as eDuivalent to the deliver! of the thing sold, ,G such constructive or symbolic delivery, being merely presumptive, is deemed negated by the failure of the vendee to take actual possession of the land sold.,& Deliver! has been described as a composite act, a thing in which both parties must .oin and the minds of both parties concur. 9t is an act b! which one part! parts with the title to and the possession of the propert!, and the other acDuires the right to and the possession of the same. 9n its natural sense, deliver! means something in addition to the deliver! of propert! or titleB it means transfer of possession. ,/ 9n the aw on 'ales, deliver! ma! be either actual or constructive, but both forms of deliver! contemplate Cthe absolute giving up of the control and custod! of the propert! on the part of the vendor, and the assumption of the same b! the vendee (I(LE (APTIST C)URC) and PASTOR REU(EN (ELMONTE, petitioners, vs. COURT OF APPEALS and MR. 5 MRS. ELMER TITO MEDINA VILLANUEVA, respondents G.R. No. 126 , No9-01-" 26, 200 51C"'< @n June 4, $23&, the )ible )aptist Church *petitioner )aptist Church- entered into a contract of lease for a period of $& !ears with (r. F (rs. ;lmer "ito (edina Villanueva *respondent spouses Villanueva-. "he latter are the registered owners of a propert! located at Ao. ,G3/ *formerl! ,G,G- eon Guinto 't., (alate, (anila. 9t was provided in their stipulation that the ;'';; has the option to bu! the leased premises during the 5ifteen *$&!ears of the lease. 9f the ;'';; decides to purchase the premises the terms will be< 1- 1 selling #rice of @ne (illion ;ight >undred "housand #esos *#$.3 million-, #hilippine Currenc!. )- 1 down pa!ment agreed upon b!

both parties. C- "he balance of the selling price ma! be paid at the rate of @ne >undred "went! "housand #esos *#$,%,%%%.%%-, #hilippine Currenc!, per !ear. #etitioner appealed for the denial of their motion for reconsideration wherein the ?"C and the C1 found that CNaOll pa!ments made under the contract of lease were for rentals. Ao mone! NwasO ever e0changed for and in consideration of the option.C >ence, the ?egional "rial Court found the action of the )aptist Church to be Cpremature and without basis to compel the defendant to sell the leased premises. 9'':;'< $- =hether or not the option to bu! given to the )aptist Church is founded upon a consideration. ,- =hether or not b! the terms of the lease agreement, a price certain for the purchase of the land had been fi0ed. HELD: No. 9n 5illamor v. Court of Appeals, this Court defined consideration as Cthe wh! of the contracts, the essential reason which moves the contracting parties to enter into the contract.C "his definition illustrates that the consideration contemplated to support an option contract need not be monetar!. 1ctual cash need not be e0changed for the option. >owever, b! the ver! nature of an option contract, as defined in 1rticle $G42, the same is an onerous contract for which the consideration must be something of value, although its 7ind ma! var!. 9t can be seen that the Court found that the bu!er+optionee had parted with something of value, which was the amount he paid over and above the actual prevailing price of the land. 'uch amount, different from the price of the land sub.ect of the option, was deemed sufficient and distinct consideration supporting the option contract. (oreover, the parties stated the same in their contract. Villamor is distinct from the present case because, 5irst, this Court cannot find that petitioner )aptist Church parted with an!thing of value, aside from the amount of #3G,%%% which was in fact eventuall! utilized as rental pa!ments. 'econd, there is no document that contains an agreement between the parties that petitioner )aptist Church6s supposed rescue of the mortgaged propert! was the consideration which the parties contemplated in support of the option clause in the contract. 1s previousl! stated, the amount advanced had been full! utilized as rental pa!ments over a period of one !ear. =hile the Villanuevas ma! have them to than7 for e0tending the pa!ment at a time of need, this is not the separate consideration contemplated b! law. Aoting that the option clause was part of a lease contract, this Court loo7ed into its previous ruling in the earl! case of 5da. -e 6uirino v. %alarca, where the Court did sa! that Cin reciprocal contracts, li7e the one in Duestion, the obligation or promise of each part! is the consideration for that of the other.C >owever, it must be noted that in that case, it was also e0pressl! stated in the deed that should there be failure to e0ercise the option to bu! the propert!, the optionee underta7es to sell the building and+or improvements he has made on the premises. 9n addition, the optionee had also been pa!ing an amount of rent that was Duite high and in fact turned out to be too burdensome that there was a subseDuent agreement to reduce said rentals. "he Court found that Cthe amount of rentals agreed upon 0 0 0 M which amount turned out to be so burdensome upon the lessee, that the lessor agreed, five !ears later, to reduce it M as well as the building and+or improvements contemplated to be constructed and+or introduced b! the lessee, were, undoubtedl!, part of the consideration for his option to purchase the leased premises.C this Court notes that the parties therein clearl! stipulated in their contract that there was an underta7ing on the part of the optionee to sell the improvements made on the propert! if the option was not e0ercised. 'uch is a valuable consideration that could support the option contract. (oreover, there was the e0cessive rental pa!ments that the optionee paid for five !ears, which the Court also too7 into account in deciding that there was a separate consideration supporting the option. "o summarize the rules, an option contract needs to be supported b! a separate consideration. "he consideration need not be monetar! but could consist of other things or underta7ings. >owever, if the consideration is not monetar!, these must be things or underta7ings of value, in view of the onerous nature of the contract of option. 5urthermore, when a consideration for an option contract is not monetar!, said consideration must be clearl! specified as such in the option contract or clause. "his Court also notes that in the present case both the ?egional "rial Court and the Court of 1ppeals agree that the option was not founded upon a separate and distinct consideration and that, hence, respondents Villanuevas cannot be compelled to sell their propert! to petitioner )aptist Church.