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San Mig Properties V Sps Huang

- San Miguel Properties Phil, Inc. offered to sell two parcels of land to the Spouses Huang for ₱52 million. The Huangs proposed an agreement with an ₱1 million earnest deposit and an exclusive 30-day option period to purchase the property. - During negotiations, the parties failed to agree on the terms and conditions of purchase. San Miguel returned the earnest deposit. The Huangs sued for specific performance. - The Supreme Court ruled that no perfected contract of sale existed because the parties never agreed on essential elements, specifically the terms of payment. As negotiations did not result in a final arrangement, no valid and binding contract was formed.

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Ianna Carmel Quitayen
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161 views2 pages

San Mig Properties V Sps Huang

- San Miguel Properties Phil, Inc. offered to sell two parcels of land to the Spouses Huang for ₱52 million. The Huangs proposed an agreement with an ₱1 million earnest deposit and an exclusive 30-day option period to purchase the property. - During negotiations, the parties failed to agree on the terms and conditions of purchase. San Miguel returned the earnest deposit. The Huangs sued for specific performance. - The Supreme Court ruled that no perfected contract of sale existed because the parties never agreed on essential elements, specifically the terms of payment. As negotiations did not result in a final arrangement, no valid and binding contract was formed.

Uploaded by

Ianna Carmel Quitayen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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San Miguel Properties Phil, Inc. v.

Spouses Alfredo Huang and Grace Huang


G.R. No. 137290 July 31, 2000

Facts of the Case:


- Herein petitioner SMPPI offered two parcels of land for sale for ₱ 52,140,000.00 in cash to Atty.
Helena Dauz acting for herein respondent spouses Huang.
- Atty. Dauz wrote on March 29, 1994 a letter proposing an agreement to SMPPI.
- The agreement is that respondents will attach ₱ 1 million as “earnest-deposit” money with
conditions:
o Respondents be given exclusive option to purchases the property within 30 days from the
date of acceptance of this offer.
o During said period, both shall negotiate on the terms and conditions of the
purchase.
o In the event that both do not come to an agreement, the earnest deposit shall refundable
to the spouses upon demand.
- The offer was accepted and after which, negotiations commenced. However, after several
meetings, president and chief executive of SMPPI wrote Atty. Dauz that both parties failed to
agree on the terms and conditions of the purchase so SMPPI will be returning the earnest
deposit.
- Respondents filed an action for specific performance against the petitioner after the former had
asked the latter for an execution within five days of a deed of sale covering the said properties.
- Petitioner filed a motion to dismiss the complaint asserting that (1) alleged “exclusive option”
lacked consideration separate and distinct from purchase price and thus unenforceable; and (2)
complaint did not allege a cause of action because there was no “meeting of minds”
between the parties and therefore, no perfected contract of sale.
- After the petitioner’s motion to dismiss was granted by the trial court, respondents appealed to
the court, which rendered a decision reversing the judgment of the trial court.
- Petitioner move for reconsideration but was denied. Hence this petition.

Issue of the Case:


Whether or not there was a perfected contract of sale between SMPPI and spouses Huang.

Ruling:
No, there was no perfected contract of sale.
Proof of absence of a perfected contract of sales is shown in the second condition of the
agreement between the parties, that during the option period, parties would negotiate the terms and
conditions of the purchase.
The stages of a contract of sale are as follows, (1) Negotiation, which covers the period from
the time the prospective contracting parties indicate interest in the contract of sale to the time the contract
of sale is perfected; (2) Perfection, takes place upon the concurrence of the essential elements of a
contract of sale which are the meeting of the minds upon the object of the contract and upon the
price; and (3) consummation, which begins when the parties perform their respective undertakings under
the contract of sale, culminating the extinguishment thereof.
In the present case, the parties never got past the negotiation phase. The alleged “indubitable
evidence” of a perfected contract of sale cited by the appellate court was nothing more than offers and
counter-offers which did not amount to any final arrangement containing the essential elements of a
contract of sale.
As laid down by the courts, the manner of payment of the purchase price is an essential element
before a valid and binding contract of sale can exist.
The fact remains that the parties failed to arrive at mutually acceptable terms of payment,
therefore there was no valid and binding contract of sale perfected.

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