Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 83759 July 12, 1991
SPOUSES CIPRIANO VASQUEZ !" VA#ERIANA GA$ANE#O, petitioners,
vs.
%ONORA&#E COURT O' APPEA#S !" SPOUSES MARTIN VA##EJERA !"
APO#ONIA O#EA,respondents.
Dionisio C. Isidto for petitioners.
Raymundo Lozada, Jr. for private respondents.

GUTIERREZ, JR., J.:p
This petition sees to reverse the decision of the !ourt of "ppeals #hich affir$ed the earlier
decision of the Re%ional Trial !ourt, &th 'udicial Re%ion, (ranch )&, Hi$a$a*lan, Ne%ros
Occidental in !ivil !ase No. +,- .for specific perfor$ance and da$a%es/ orderin% the
petitioners .defendants in the civil case/ to resell 0ot No. 1+&2 of the !adastral Surve* of
Hi$a$a*lan, Ne%ros Occidental to the respondents .plaintiffs in the civil case/ upon pa*$ent
b* the latter of the a$ount of P34,222.22 as #ell as the appellate court5s resolution den*in% a
$otion for reconsideration. In addition, the appellate court ordered the petitioners to pa* the
a$ount of P),222.22 as necessar* and useful e6penses in accordance #ith "rticle 1&1& of
the !ivil !ode.
The facts of the case are not in dispute. The* are su$$ari7ed b* the appellate court as
follo#s8
On 'anuar* 1), 1-9), the plaintiffs:spouses .respondents herein/ filed this
action a%ainst the defendants:spouses .petitioners herein/ seein% to
redee$ 0ot No. 1+&2 of the Hi$a$a*lan !adastre #hich #as previousl*
sold b* plaintiffs to defendants on Septe$ber 31, 1-&4.
The said lot #as re%istered in the na$e of plaintiffs. On October 1-)-, the
sa$e #as leased b* plaintiffs to the defendants up to crop *ear 1-&&:&9,
#hich #as e6tended to crop *ear 1-&+:&-. "fter the e6ecution of the
lease, defendants too possession of the lot, up to no# and devoted the
sa$e to the cultivation of su%ar.
On Septe$ber 31, 1-&4, the plaintiffs sold the lot to the defendants under
a Deed of Sale for the a$ount of P-,222.22. The Deed of Sale #as dul*
ratified and notari7ed. On the sa$e da* and alon% #ith the e6ecution of
the Deed of Sale, a separate instru$ent, deno$inated as Ri%ht to
Repurchase .;6h. ;/, #as e6ecuted b* the parties %rantin% plaintiffs the
ri%ht to repurchase the lot for P13,222.22, said ;6h. ; lie#ise dul*
ratified and notari7ed. (* virtue of the sale, defendants secured T!T No.
T:)++-+ in their na$e. On 'anuar* 3, 1-&-, plaintiffs sold the sa$e lot to
(enito Derra$a, 'r., after securin% the defendants5 title, for the su$ of
P13,222.22. <pon the protestations of defendant, assisted b* counsel, the
said second sale #as cancelled after the pa*$ent of P13,222.22 b* the
defendants to Derra$a.
Defendants resisted this action for rede$ption on the pre$ise that ;6h. ;
is =ust an option to bu* since it is not e$bodied in the sa$e docu$ent of
sale but in a separate docu$ent, and since such option is not supported
b* a consideration distinct fro$ the price, said deed for ri%ht to
repurchase is not bindin% upon the$.
"fter trial, the court belo# rendered =ud%$ent a%ainst the defendants,
orderin% the$ to resell lot No. 1+&2 of the Hi$a$a*lan !adastre to the
plaintiffs for the repurchase price of P34,222.22, #hich a$ount co$bines
the price paid for the first sale and the price paid b* defendants to (enito
Derra$a, 'r.
Defendants $oved for, but #ere denied reconsideration. ;6ceptin%
thereto, defendants:appealed, . . . .Rollo, pp. 44:4)/
The petition #as %iven due course in a resolution dated >ebruar* 13, 1--2.
The petitioners insist that the* can not be co$pelled to resell 0ot No. 1+&2 of the
Hi$a$a*lan !adastre. The* contend that the nature of the sale over the said lot bet#een
the$ and the private respondents #as that of an absolute deed of sale and that the ri%ht
thereafter %ranted b* the$ to the private respondents .Ri%ht to Repurchase, ;6hibit ?;?/ can
onl* be either an option to bu* or a $ere pro$ise on their part to resell the propert*. The*
opine that since the ?RI@HT TO R;P<R!H"S;? #as not supported b* an* consideration
distinct fro$ the purchase price it is not valid and bindin% on the petitioners pursuant to
"rticle 149- of the !ivil !ode.
The docu$ent deno$inated as ?RI@HT TO R;P<R!H"S;? .;6hibit ;/ provides8
RI@HT TO R;P<R!H"S;
ANOB "00 M;N (C TH;S; PR;S;NTS8
I, !IPRI"NO V"SD<;E, . . ., do hereb* %rant the spouses Martin
Valle=era and "polonia Olea, their heirs and assi%ns, the ri%ht to
repurchase said 0ot No. 1+&2 for the su$ of TB;0V; THO<S"ND
P;SOS .P13,222.22/, Philippine !urrenc*, #ithin the period T;N .12/
1
C;"RS fro$ the a%ricultural *ear 1-&-:1-92 #hen $* contract of lease
over the propert* shall e6pire and until the a%ricultural *ear 1-9-:1-+2.
IN BITN;SS BH;R;O>, I have hereunto si%ned $* na$e at
(inalba%an, Ne%ros Occidental, this 31st da* of Septe$ber, 1-&4.
S@D. !IPRI"NO V"SD<;E
S@D. V"0;RI"N" @. V"SD<;E S@D. >R"N!IS!O S"NI!"S
.Rollo, p. 49/
The !ourt of "ppeals, appl*in% the principles laid do#n in the case of Sanche7 v. Ri%os, 4)
S!R" ,&+ F1-93G decided in favor of the private respondents.
In the Sanche7 case, plaintiff:appellee Nicolas Sanche7 and defendant:appellant Severino
Ri%os e6ecuted a docu$ent entitled ?Option to Purchase,? #hereb* Mrs. Ri%os ?a%reed,
pro$ised and co$$itted . . . to sell? to Sanche7 for the su$ of P1,)12.22, a re%istered parcel
of land #ithin 3 *ears fro$ e6ecution of the docu$ent #ith the condition that said option shall
be dee$ed ?ter$inated and lapsed,? if ?Sanche7 shall fail to e6ercise his ri%ht to bu* the
propert*? #ithin the stipulated period. In the sa$e docu$ent, Sanche7? . . . hereby agree and
conform with all the conditions set forth in the option to purchase eecuted in my favor, that I
bind myself with all the terms and conditions.? .;$phasis supplied/ The notari7ed docu$ent
#as si%ned both b* Sanche7 and Ri%os.
"fter several tenders of pa*$ent of the a%reed su$ of P1,)12.22 $ade b* Sanche7 #ithin
the stipulated period #ere re=ected b* Ri%os, the for$er deposited said a$ount #ith the
!ourt of >irst Instance of Nueva ;ci=a and filed an action for specific perfor$ance and
da$a%es a%ainst Ri%os.
The lo#er court rendered =ud%$ent in favor of Sanche7 and ordered Ri%os to accept the su$
=udiciall* consi%ned and to e6ecute in Sanche75 favor the reHuisite deed of conve*ance.
Ri%os appealed the case to the !ourt of "ppeals #hich certified to this !ourt on the %round
that it involves a pure Huestion of la#.
This !ourt after deliberatin% on t#o conflictin% principles laid do#n in the cases of
South#estern Su%ar and Molasses !o. v. "tlantic @ulf and Pacific !o., .-9 Phil. 34- F1-))G/
and "tins, Aroll I !o., Inc. v. !ua Hian Te, 123 Phil. -4+ F1-)+G/ arrived at the conclusion
that "rticle 149- of the !ivil !ode #hich provides8 JJ
"rt. 149-. " pro$ise to bu* and sell a deter$inate thin% for a price certain
is reciprocall* de$andable.
"n accepted unilateral pro$ise to bu* or to sell a deter$inate thin% for a
price certain is bindin% upon the pro$issor* if the pro$ise is supported b*
a consideration distinct fro$ the price.
and "rticle 1,34 thereof #hich provides8
"rt. 1,34. Bhen the offerer has allo#ed the offerer a certain period to
accept, the offer $a* be #ithdra#n at an* ti$e before acceptance b*
co$$unicatin% such #ithdra#al, e6cept #hen the option is founded upon
a consideration, as so$ethin% paid or pro$ised.
should be reconciled and har$oni7ed to avoid a conflict bet#een the t#o provisions. In
effect, the !ourt abandoned the rulin% in the South#estern Su%ar and Molasses !o. case
and reiterated the rulin% in the "tins, Aroll and !o. case, to #it8
Ho#ever, this !ourt itself, in the case of "tins, Aroll and !o., Inc. v. !ua
Hian Te, .123 Phil. -4+, -)1:-)3/ decided later than South#estern Su%ar
I Molasses !o. v. "tlantic @ulf I Pacific !o., .supra/ sa# no distinction
bet#een "rticles 1,34 and 149- of the !ivil !ode and applied the for$er
#here a unilateral pro$ise to sell si$ilar to the one sued upon here #as
involved, treatin% such pro$ise as an option #hich, althou%h not bindin%
as a contract in itself for lac of separate consideration, nevertheless
%enerated a bilateral contract of purchase and sale upon acceptance.
Speain% throu%h "ssociate 'ustice, later !hief 'ustice, !esar (en%7on,
this !ourt said8
>urther$ore, an option is unilateral8 a pro$ise to sell
at the price fi6ed #henever the offeree should decide
to e6ercise his option #ithin the specified ti$e. "fter
acceptin% the pro$ise and before he e6ercises his
option, the holder of the option is not bound to bu*. He
is free either to bu* or not to bu* later. In this case
ho#ever, upon acceptin% herein petitioner5s offer a
bilateral pro$ise to sell and to bu* ensued, and the
respondent ipso facto assu$ed the obli%ation of a
purchaser. He did not =ust %et the ri%ht subseHuentl* to
bu* or not to bu*. It #as not a $ere option thenK it #as
bilateral contract of sale.
0astl*, even supposin% that ;6h. " %ranted an option
#hich is not bindin% for lac of consideration, the
authorities hold that
If the option is %iven #ithout a consideration, it is a
$ere offer of a contract of sale, #hich is not bindin%
until accepted. If, ho#ever, acceptance is $ade before
a #ithdra#al, it constitutes a bindin% contract of sale,
even thou%h the option #as not supported b* a
sufficient consideration . . . .99 !orpus 'uris
Secundu$ p. &)3. !ee also 39 Rulin% !ase 0a# ,,-
and cases cited./
This !ourt affir$ed the lo#er court5s decision althou%h the pro$ise to sell #as not supported
b* a consideration distinct fro$ the price. It #as obvious that Sanche7, the pro$isee,
2
accepted the option to bu* before Ri%os, the pro$isor, #ithdre# the sa$e. <nder such
circu$stances, the option to purchase #as converted into a bilateral contract of sale #hich
bound both parties.
In the instant case and contrar* to the appellate court5s findin%, it is clear that the ri%ht to
repurchase #as not supported b* a consideration distinct fro$ the price. The rule is that the
pro$isee has the burden of provin% such consideration. <nfortunatel*, the private
respondents, pro$isees in the ri%ht to repurchase failed to prove such consideration. The*
did not even alle%e the e6istence thereof in their co$plaint. .!ee Sanche7 v. Ri%os supra/
Therefore, in order that the Sanche7 case can be applied, the evidence $ust sho# that the
private respondents accepted the ri%ht to repurchase.
The record, ho#ever, does not sho# that the private respondents accepted the ?Ri%ht to
Repurchase? the land in Huestion. Be disa%ree #ith the appellate court5s findin% that the
private respondents accepted the ?ri%ht to repurchase? under the follo#in% circu$stances8 . .
as evidenced b* the annotation and re%istration of the sa$e on the bac of the transfer of
certificate of title in the na$e of appellants. "s vividl* appearin% therein, it #as si%ned b*
appellant hi$self and #itnessed b* his #ife so that for all intents and purposes the VasHue7
spouses are estopped fro$ disre%ardin% its obvious purpose and intention.?
The annotation and re%istration of the ri%ht to repurchase at the bac of the certificate of title
of the petitioners can not be considered as acceptance of the ri%ht to repurchase. "nnotation
at the bac of the certificate of title of re%istered land is for the purpose of binding purchasers
of such re%istered land. Thus, #e ruled in the case of "el #ir $illage #ssociation,
Inc. v. Dionisio .194 S!R" )+- F1-+-G/, citing %anchoco v. #&uino .1)4 S!R" 1 F1-+9G/,
andConstantino v. 'spiritu .4) S!R" ))9 F1-93G/ that purchasers of a re%istered land are
bound b* the annotations found at the bac of the certificate of title coverin% the sub=ect
parcel of land. In effect, the annotation of the ri%ht to repurchase found at the bac of the
certificate of title over the sub=ect parcel of land of the private respondents onl* served as
notice of the e6istence of such unilateral pro$ise of the petitioners to resell the sa$e to the
private respondents. This, ho#ever, can not be eHuated #ith acceptance of such ri%ht to
repurchase b* the private respondent.
Neither can the si%nature of the petitioners in the docu$ent called ?ri%ht to repurchase?
si%nif* acceptance of the ri%ht to repurchase. The respondents did not si%n the offer.
"cceptance should be $ade b* the pro$isee, in this case, the private respondents and not
the pro$isors, the petitioners herein. It #ould be absurd to reHuire the pro$isor of an option
to bu* to accept his o#n offer instead of the pro$isee to #ho$ the option to bu* is %iven.
>urther$ore, the actions of the private respondents JJ .a/ filin% a co$plaint to co$pel re:sale
and their de$ands for resale prior to filin% of the co$plaint cannot be considered acceptance.
"s stated in Vda. de Eulueta v. Octaviano .131 S!R" ,14 F1-+,G/8
"nd even %rantin%, ar%uendo that the sale #as a pacto de retro sale, the
evidence sho#s that Oli$pia, throu%h her la#*er, opted to repurchase the
land onl* on 1& >ebruar* 1-&3, appro6i$atel* t#o *ears be*ond the
stipulated period, that is not later than Ma*, 1-&2.
If Oli$pia could not locate "urelio, as she contends, and based on her
alle%ation that the contract bet#een her #as one of sale #ith ri%ht to
repurchase, neither, ho#ever, did she tender the rede$ption price to
private respondent Isauro, but $erel* #rote hi$ letters e6pressin% her
readiness to repurchase the propert*.
It is clear that the $ere sendin% of letters b* the vendor e6pressin% his
desire to repurchase the propert* #ithout acco$pan*in% tender of the
rede$ption price fell short of the reHuire$ents of la#. .0ee v. !ourt of
"ppeals, &+ S!R" 1-9 F1-93G/
Neither did petitioner $ae a =udicial consi%nation of the repurchase price
#ithin the a%reed period.
In a contract of sale #ith a ri%ht of repurchase, the rede$ptioner #ho $a*
offer to $ae the repurchase on the option date of rede$ption should
deposit the full a$ount in court . . . .Ru$baoa v. "r7a%a, +4 Phil. +13
F1-4-G/
To effectivel* e6ercise the ri%ht to repurchase the vendor a retro $ust
$ae an actual and si$ultaneous tender of pa*$ent or consi%nation.
.!atan%catan% v. 0e%a*ada, +4 S!R" )1 F1-9+G/
The private respondents5 ineffectual acceptance of the option to bu* validated the petitioner5s
refusal to sell the parcel #hich can be considered as a #ithdra#al of the option to bu*.
Be a%ree #ith the petitioners that the case of $da. de (ulueta v. )ctaviano, .supra/ is in
point.
Stripped of non:essentials the facts of the (ulueta case are as follo#s8 )n *ovember +,,
-.,+ .;$phasis supplied/ Oli$pia >ernande7 Vda. de Eulueta, the re%istered o#ner of a ).)
hectare riceland sold the lot to private respondent "urelio (. Octaviano for P+,&22.22 sub=ect
to certain ter$s and conditions. The contract #as an absolute and definite sale. )n the same
day, *ovember +,, -.,+, .;$phasis supplied/ the vendee, "urelio si%ned another docu$ent
%ivin% the vendor Eulueta the ?option to repurchase? the propert* at an*ti$e after Ma* 1-)+
but not later than Ma* 1-&2. Bhen ho#ever, Eulueta tried to e6ercise her ?option to bu*? the
propert*, "urelio resisted the sa$e pro$ptin% Eulueta to co$$ence suit for recover* of
o#nership and possession of the propert* #ith the then !ourt of >irst Instance of Iloilo.
The trial court ruled in favor of Eulueta. <pon appeal, ho#ever, the !ourt of "ppeals reversed
the trial court5s decision.
Be affir$ed the appellate court5s decision and ruled8
The nature of the transaction bet#een Oli$pia and "urelio, fro$ the
conte6t of ;6hibit ?;? is not a sale #ith ri%ht to repurchase. !onventional
rede$ption taes place ?#hen the vendor reserves the ri%ht to repurchase
the thin% sold, #ith the obli%ation to co$pl* #ith the provisions of "rticle
3
1&1& and other stipulations #hich $a* have been a%reed upon. ."rticle
1&21, !ivil !ode/.
In this case, there #as no reservation $ade b* the vendor, Oli$pia, in the
docu$ent ;6hibit ?;? the ?option to repurchase? #as contained in a
subseHuent docu$ent and #as $ade b* the vendee, "urelio. %hus, it was
more of an option to buy or a mere promise on the part of the vendee,
#urelio, to resell the property to the vendor, )limpia. .12 Manresa, p. ,11
cited in Padilla5s !ivil !ode "nnotated, Vol. V, 1-94 ed., p. 4&9/ "s held in
Villarica v. !ourt of "ppeals .3& S!R" 1+- F1-&+G/8
The ri%ht of repurchase is not a ri%ht granted the
vendor b* the vendee in a subse&uent instrument, but
is a ri%ht reserved by the vendor in the same
instrument of sale as one of the stipulations of the
contract. Once the instru$ent of absolute sale is
e6ecuted, the vendor can no lon%er reserve the ri%ht to
repurchase, and an* ri%ht thereafter %ranted the
vendor b* the vendee in a separate instru$ent cannot
be a ri%ht of repurchase but so$e other ri%ht lie the
option to bu* in the instant case. . . .;$phasis
supplied/
The appellate court re=ected the application of the Eulueta case b* statin%8
. . . F"Gs found b* the trial court fro$ #hich #e Huote #ith approval belo#,
the said cases involve the lapse of several da*s for the e6ecution of
separate instru$ents after the e6ecution of the deed of sale, #hile the
instant case involves the e6ecution of an instru$ent, separate as it is, but
e6ecuted on the sa$e da*, and notari7ed b* the sa$e notar* public, to
#it8
" close e6a$ination of ;6h. ?;? reveals that althou%h it is a separate
docu$ent in itself, it is far different fro$ the docu$ent #hich #as
pronounced as an option b* the Supre$e !ourt in the Villarica case. The
option in the Villarica case #as e6ecuted several da*s after the e6ecution
of the deed of sale. In the present case, ;6h. ?;? #as e6ecuted and
ratified b* the sa$e notar* public and the Deed of Sale of 0ot No. 1+&2 b*
the plaintiffs to the defendants #ere notari7ed b* the sa$e notar* public
and entered in the sa$e pa%e of the sa$e notarial re%ister . . .
The latter case .Vda. de Eulueta v. Octaviano, supra/, lie#ise involved
the e6ecution of the separate docu$ent after an intervention of several
da*s and the Huestion of laches #as decided therein, #hich is not present
in the instant case. That distinction is therefore crucial and Be are of the
opinion that the appellee5s ri%ht to repurchase has been adeHuatel*
provided for and reserved in confor$it* #ith "rticle 1&21 of the !ivil !ode,
#hich states8
!onventional rede$ption shall tae place #hen the vendor reserves the
ri%ht to repurchase the thin% sold, #ith the obli%ation to co$pl* #ith the
provision of "rticle 1&1& and other stipulations #hich $a* have been
a%reed upon. .Rollo, pp. 4&:49/
Obviousl*, the appellate court5s findin%s are not reflected in the cited decision. "s in the
instant case, the option to repurchase involved in the Eulueta case #as e6ecuted in a
separate docu$ent but on the same date that the deed of definite sale #as e6ecuted.
Bhile it is true that this !ourt in the Eulueta case found Eulueta %uilt* of laches, this,
ho#ever, #as not the pri$ar* reason #h* this !ourt disallo#ed the rede$ption of the
propert* b* Eulueta. It is clear fro$ the decision that the rulin% in the Eulueta case #as based
$ainl* on the findin% that the transaction bet#een Eulueta and Octaviano #as not a sale #ith
ri%ht to repurchase and that the ?option to repurchase #as but an option to bu* or a $ere
pro$ise on the part of Octaviano to resell the propert* to Eulueta.
In the instant case, since the transaction bet#een the petitioners and private respondents
#as not a sale #ith ri%ht to repurchase, the private respondents cannot avail of "rticle 1&21
of the !ivil !ode #hich provides for conventional rede$ption.
BH;R;>OR;, the petition is @R"NT;D. The Huestioned decision and resolution of the
!ourt of "ppeals are hereb* R;V;RS;D and S;T "SID;. The co$plaint in !ivil !ase No.
+,- of the then !ourt of >irst Instance of Ne%ros Occidental 13th 'udicial District (ranch & is
DISMISS;D. No costs.
SO ORD;R;D.
4