LIMKETKAI SONS MILLING, INC.

, petitioner,
vs.

G.R. No. 118509

March 29, 1996

COURT OF APPEALS, ET. AL., respondents.

FACTS:
Phil.Remnants Co. constituted BPI to manage, administer and sell its real property
located in Pasig, Metro Manila.
BPI gave authority to real estate broker Pedro Revilla Jr. to sell the lot for P1000 per
square meter.
Revilla contacted Alfonso Lim of petitioner company who agreed to buy the land and
thereafter was allowed to view the land.
Lim and Alfonso LImketkai went to BPI to confirm the sale and both finally agreed
that the land would be sold for P1000 per square meter. Notwithstanding the
agreement, Alfonso asked BPI if it was possible to pay in terms provided that in case
the term is disapproved, the price shall be paid in cash.
Two or three days later, petitioner learned that its offer to pay on terms had been
frozen. Alfonso Lim went to BPI on July 18, 1988 and tendered the full payment of
P33,056,000.00 to Albano. The payment was refused because Albano stated that
the authority to sell that particular piece of property in Pasig had been withdrawn
from his unit
An action for specific performance with damages was thereupon filed on August 25,
1988 by petitioner against BPI. In the course of the trial, BPI informed the trial court
that it had sold the property under litigation to NBS
ISSUE:
WON there was a perfected contract of sale between Limketkai Co. and BPI.
HELD:
There was already a perfected contract of sale because both parties already agreed
to the sale of P1000/sq.m. Even if Lim tried to negotiate for a payment in terms, it is
clear that if it be disapproved, the payment will be made in cash.
The perfection of the contract took place when Aromin and Albano, acting for BPI,
agreed to sell and Alfonso Lim with Albino Limketkai, acting for petitioner Limketkai,
agreed to buy the disputed lot at P1,000.00 per square meter. Aside from this there
was the earlier agreement between petitioner and the authorized broker. There was
a concurrence of offer and acceptance, on the object, and on the cause thereof.
The phases that a contract goes through may be summarized as follows:
a. preparation, conception or generation, which is the period of negotiation and
bargaining, ending at the moment of agreement of the parties;
b. perfection or birth of the contract, which is the moment when the parties come to
agree on the terms of the contract; and

c. consummation or death, which is the fulfillment or performance of the terms

agreed upon in the contract
Ang Yu Asuncion vs. Court of Appeals

FACTS:
Petitioner Ang Yu Asuncion and Keh Tiong leased a property of respondents
Bobby Cu Unjieng, Rose Cu Unjieng and Jose Tan in Binondo Manila.
Respondents informed plaintiffs that they are offering to sell the premises and
are giving them priority to acquire the same.
Respondents 6M for the property but petitioners offered 5M. Respondents
acceted and asked petitioners to put in writing the terms and conditions but
the latter never provided such.
When defendants were about to sell the property, plaintiffs were compelled to
file the complaint to compel defendants to sell the property to them. Court
recognizes the right of first refusal of the petitioner. Notwithstanding the courts
decision, respondent sold the property to Buen Realty and Development
Corporation.
ISSUE:
WON petitioners can demand specific performance to the respondents to sell
to them the property.
HELD:
The petitioners never accepted the offer when they refused to make the terms
and condition of the sale. As such, respondents has the right to sell the
property to other parties.
Even if petitioners are aggrieved by the failure of private respondents to honor
the right of first refusal, the remedy is not a writ of execution on the judgment,

since there is none to execute, but an action for damages in a proper forum
for the purpose.

DELA CAVADA V. DIAZ (April 01, 1918)

FACTS:
Plaintiff Antonio dela Cavada and defendant Antonio Diaz made a Contract of
Option where the latter promised to sell to the former hisHacienda de
Pitogo located in Tayabas together with its coconut and nipa palm trees for 30
and 70 thousand pesos respectively.
The contract provides that Dela Cavada has the right to purchase the land
until after Diaz acquires its Torrens title.
Diaz applied two land titles for the hacienda dividing it in two parts. After the
titles have been issued, Diaz offers to sell to Dela Cavada only a portion of the
entire hacienda.
ISSUE:
WON Diaz is obliged to sell to Dela Cavada the entire hacienda and not only a
part of it.
HELD:
A promise made by one party, if made in accordance with the forms required
by the law, may be a good consideration (causa) for a promise made by
another party.
The contract is complete, provided they have complied with the forms required
by the law and the consideration need not be paid at the time of the promise.
The plaintiff stood ready to comply with his part of the contract. The
defendant, even though he had obtained a registered title to said parcel of
land, refused to comply with his promise.

The contract was not, in fact, what is generally known as a "contract of

option." It differs very essentially from a contract of option. An optional
contract is a privilege existing in one person, for which he had paid a
consideration, which gives him the right to buy, for example, certain
merchandise of certain specified property, from another person, if he chooses,
at any time within the agreed period, at a fixed price.
The contract is already in the perfected stage.

CARCELLER V. CA (February 10, 1999)

FACTS:
Respondent State Investment Houses Inc. has a parcel of land
in CebuCity leased to petitioner Jose Ramon Caceller with an option to
purchase valid until the expiration of the lease contract.
3weeks before the expiration of the contract, petitioner made a request to the
respondent for the extension of the lease contact so he can have an ample
time to raise enough funds to avail of the option of sale.
Respondent denied the request and a month after the expiration of the
contract, petitioner made known his intention to buy the property.
Respondent reiterated the provisions in the contract and asked the petitioner
to leave the property, which will now be offered to the general public for a
higher price.
ISSUE:
WON can still exercise his option of sale even after the time to do such has
already lapsed.

HELD:
The contract must be interpreted together with the intention of the parties. The
letter of the plaintiff to the respondent requesting for an extension is sufficient
proof of his intent to avail of the option of sale.
In contractual relations, the law allows the parties reasonable leeway on the
terms of their agreement, which is the law between them. When petitioner
made his intention to buy known to the buyer one month after the expiration of
contract is within a reasonable time- frame.
Petitioner may buy the property but not anymore to the price stated in the
contract. As such, respondent may increase the price of the land but only to a
reasonable and fair market value.
An option is a preparatory contract in which one party grants to the other, for a
fixed period and under specified conditions, the power to decide, whether or
not to enter into a principal contract. It binds the party who has given the
option, not to enter into the principal contract with any other person during the
period designated, and, within that period, to enter into such contract with the
one to whom the option was granted, if the latter should decide to use the
option. It is a separate agreement distinct from the contract which the parties
may enter into upon the consummation of the option.