#1 MANILA METAL CONTAINER CORP. (petitioner) and appellant.
Ca granted the motion, and Tolentino substituted
REYNALDO TOLENTINO (intervenor) vs. PNB (respondent) MMCC as plaintiff-appellant.
and DMCI-PROJECT DEVELOPERS, INC. (intervenor)
MMCC filed an appeal to CA.
FACTS: Petitioner filed a complaint against PNB for
"Annulment of Mortgage and Mortgage Foreclosure, Delivery CA affirmed RTC's decision as there was no meeting of the
of Title, or Specific Performance with Damages” before RTC minds between the parties as to the price or consideration of
Pasig. the sale.
Petitioner failed to pay a loan it obtained from PNB and has CA held that negotiations did not prosper between petitioner
requested to repurchase property from said bank. and PNB. Thus, there was no perfected contract of sale.
It agreed with PNB's Special Assets Management Department MMCC filed a motion for reconsideration but was likewise
(SAMD) to repurchase property for P1.5M. Thus, it initially denied.
paid P725,00 as "deposit to repurchase" as evidence by an
OR. Hence, this petition for review on certiorari.
However, PNB informed that it will reject petitioner's offer ISSUES: whether or not petitioner and respondent PNB had
and SAMD's recommendation. It then suggested to petitioner entered into a perfected contract for petitioner to repurchase
to purchase the property for P2.6M. On the other hand, the property from respondent?
Manila Metal Container Corp rejected respondent bank's
proposal as PNB already agreed to sell property for P1.5M RULING: No. The Court has held that there was no perfected
since his DP of P725K was accepted, PNB is proscribed from contract of sale between the parties.
increasing property's purchase price.
A contract is a meeting of minds between two persons
PNB insisted on the P2.6M purchase price and rejected the whereby one binds himself, with respect to the other, to give
payment of the balance of P625K as claimed by petitioner. something or to render some service.
While the case was pending, PNB demanded MMCC to vacate Under Article 1318 of the New Civil Code, there is no contract
the property within 15 days from notice, but petitioners unless the following requisites concur:
refused to do so.
(1) Consent of the contracting parties;
Petitioner offered to repurchase the property for P3.5M but (2) Object certain which is the subject matter of the contract;
PNB still rejected the offer as the market value of said (3) Cause of the obligation which is established.
property was approx. P30M, and as a matter of policy, it could
not sell the property for less than its market value. There is no evidence that the SAMD was authorized by
respondent's Board of Directors to accept petitioner's offer
Petitioner offered to purchase the property for P4.25M in and sell the property for P1,574,560.47. Any acceptance by
cash, but offer was still rejected. the SAMD of petitioner's offer would not bind respondent.
Trial court then rendered judgment dismissing the amended Moreover, the negotiations between the parties did not result
complaint and respondent's counterclaim. in a definitive agreement on the price.
PNB was ordered to refund P725K deposit petitioner has PNB's acceptance of MMCC's offer was qualified, amounting
made. to a counter-offer.
Moreover, it ruled that there was no perfected contract of MMCC's subsequent actions, including its failure to conform
sale of sale between the parties hence, petitioner had no to PNB's terms and its later offers to repurchase the property,
cause of action or specific performance against respondent; demonstrated that no binding contract was formed.
as PNB rejected MMCC's offer to repurchase the property and
MMCC rejected PNB's terms and conditions. The P725,000.00 paid by MMCC was merely a deposit, not
earnest money, as it was subject to the approval of PNB's
Meanwhile, MMCC's BOD waived, assigned and transferred Board of Directors.
its right over the property in favor of one of its Directors,
Bayani Gabriel. Without a perfected contract, there could be no enforceable
obligation between the parties.
Gabriel then executed a Deed of Assignment over 51% of the
ownership and management of property in favor of Reynaldo
Tolentino, who later moved for leave to intervene as plaintiff-
CA denied both parties' motions and directed trial court to
#2 Carceller v. Court of Appeals and State Investment conduct further hearings to ascertain the prevailing market
Houses, Inc. value of real properties in Bulacao, Cebu City and fix the value
of the property subject of the controversy.
FACTS: State Investment Houses, Inc. (SIHI) is the registered
owner of two (2) parcels of land with a total area of 9,774 Hence, the instant petition for review.
square meters in Bulacao, Cebu City.
ISSUE: WON Carceller be allowed to exercise the option to
Jose Ramon Carceller and SIHI entered into a lease contract purchase the leased property, despite the alleged delay in
with option to purchase over said 2 parcels of land, at a giving the required notice to private respondent?
monthly rental of P10,000 for 18 month.
RULING: YES, THE COURT HAS HELD THAT CARCELLER
(3) weeks before the expiration of the lease contract, SIHI SHOULD BE ALLOWED TO EXERCISE THE OPTION TO
notified petitioner of the impending termination of the lease PURCHASE THE LEASED PROPERTY, DESPITE THE ALLEGED
agreement, and of the short period of time left within which DELAY IN GIVING THE REQUIRED NOTICE TO PRIVATE
he could still validly exercise the option. RESPONDENT.
Carceller requested for a six-month extension. An option is a preparatory contract in which one party grants
to the other, for a fixed period and under specified conditions,
However, SIHI disapproved said request. Nonetheless, the power to decide, whether or not to enter into a principal
respondent offered to lease the property for one year for contract. It binds the party who has given the option, not to
P30,000 per month and that it will offer the property for sale enter into the principal contract with any other person during
to the general public. the period designated, and, within that period, to enter into
such contract with the one to whom the option was granted,
Carceller informed SIHI of his decision to exercise the option if the latter should decide to use the option. It is a separate
to purchase the property. agreement distinct from the contract which the parties may
enter into upon the consummation of the option.
However, SIHI asked Carceller to vacated the property within
10 days from notice as the period to exercise said option has Carceller's letter to SIHI was fair notice to the latter of the
already lapsed. former's intent to exercise the option, despite the request for
the extension of the lease contract.
Carceller filed a complaint for specific performance and
damages against SIHI before RTC Cebu to compel the latter to As stated in said letter to SIHI, petitioner was requesting for
honor its commitment and execute the corresponding deed of an extension (of the contract) for six months "to allow us to
sale. generate sufficient funds in order to exercise our option to
buy the subject property"
Trial court rendered decision in favor of Carceller for SIHI to
execute a deed of sale in favor of petitioner. Contracts are the law between the contracting parties and
should be fulfilled according to their terms if they are clear
SIHI elevated the case to CA. and leave no room for doubt.
However, CA affirmed trial court's judgemet for Carceller o While SIHI considers that there is a delay, the Court has held
have the option to buy the property, and added that, "the that the delay in exercising the option was neither substantial
purchase price must be based on the prevailing market price nor fundamental and did not amount to a breach that would
of real property in Bulacao, Cebu City." defeat the parties' primary intent when they executed the
lease contract.
Both parties filed a motion for reconsideration.
Moreover, judging from the subsequent acts of the parties, it
Carceller prayed for the value of the property be the is undeniable that SIHI really intended to dispose of said
prevailing market price at the time when the sale would have leased property, which petitioner indubitably intended to buy.
been consummated.
SIHI's agreement to enter first into a lease contract with
On the other hand, SIHI prayed for the market price of the option to purchase with herein petitioner, is a clear proof of
property be based on the prevailing price index at least 10 its intent to promptly dispose said property although the full
years later. financial returns may materialize only in a year's time.
A hearing was conducted further to clarify the matter, but no Furthermore, its letter reminding the petitioner of the short
agreement was reached. period of time left within which to consummate their
agreement, clearly showed its desire to sell that property.
the respondents answered they never induced the
Petitioner's determination to purchase said property is defendants Tiamson to violate their contracts with the
equally indubitable. He introduced permanent improvements petitioner and that being merely tenants-tillers, the
on the leased property, demonstrating his intent to acquire defendants-tenants had no right to enter into any
dominion in a year's time. To increase his chances of acquiring transactions involving their properties without their
the property, he secured an P8 Million loan from the knowledge and consent.
Technology Resources Center (TRC), thereby augmenting his
capital. defendants-tenants Tiamson, et al. countered that the money
each of them received from the petitioner were in the form of
WHEREFORE, the appealed decision of respondent court, loans, and that they were deceived into signing the deeds of
insofar as it affirms the judgment of the trial court in granting assignment.
petitioner the opportunity to exercise the option to purchase
the subject property, is hereby AFFIRMED. However the The trial court ruled that Tayag was entitled to injunctive
purchase price should be based on the fair market value of relief.
real property in Bulacao, Cebu City, as of February 1986, when
the contract would have been consummated. Further, The CA ruled that the respondents could not be enjoined
petitioner is hereby ordered to pay private respondent SIHI from alienating or even encumbering their property,
legal interest on the said purchase price beginning February especially so since they were not privies to the deeds of
1986 up to the time it is actually paid, as well as the taxes due assignment executed by the defendants-tenants. The
on said property, considering that petitioner have enjoyed the defendants-tenants were not yet owners of the portions of
beneficial use of said property. The case is hereby remanded the landholdings respectively tilled by them; as such, they had
to Regional Trial Court of Cebu, Branch 5, for further nothing to assign to the petitioner. Finally, the CA ruled that
proceedings to determine promptly the fair market value of the deeds of assignment executed by the defendants-tenants
said real property as of February 1986, in Bulacao, Cebu City. were contrary to P.D. No. 27 and Rep. Act No. 6657.
3. HERMINIO TAYAG vs. AMANCIA LACSON, ROSENDO Hence, this petition for review on certiorari.
LACSON, ANTONIO LACSON, JUAN LACSON, TEODISIA
LACSON-ESPINOSA and THE COURT OF APPEALS ISSUE: WON the Deed of Assignment executed by the
defendant-tenants are perfected option contracts as claimed
FACTS: Respondents Angelica Tiotuyco Vda. de Lacson, and by the petitioner.
her children Amancia, Antonio, Juan, and Teodosia, all
surnamed Lacson, were the registered owners of three Ruling: No, the Court has held that the Deed of Assignment
tenanted agricultural lands in Mabalacat, Pampanga. executed by the defendant-tenants are not perfected option
contracts.
A group of original farmers/tillers and another group An option is a contract by which the owner of the property
individually executed in favor of Herminio Tayag separate agrees with another person that he shall have the right to buy
Deeds of Assignment in which the assignees assigned to the his property at a fixed price within a certain time.
petitioner their respective rights as tenants/tillers of the It is a condition offered or contract by which the owner
landholdings possessed and tilled by them for and in stipulates with another that the latter shall have the right to
consideration of P50.00 per square meter. The said amount buy the property at a fixed price within a certain time, or
was made payable "when the legal impediments to the sale of under, or in compliance with certain terms and conditions, or
the property to the petitioner no longer existed." which gives to the owner of the property the right to sell or
demand a sale.
Tayag invited them for a meeting for further discussion It imposes no binding obligation on the person holding the
regarding the Deed of Assignment option, aside from the consideration for the offer. Until
accepted, it is not, properly speaking, treated as a contract.
However, the defendants-tenants, through Joven Mariano, The second party gets in praesenti, not lands, not an
said they are not attending and gavenotice of their collective agreement that he shall have the lands, but the right to call
decision to sell all their rights and interests, as for and receive lands if he elects. An option contract is a
tenants/lessees, over the landholding to the respondents. separate and distinct contract from which the parties may
enter into upon the conjunction of the option.
Tayag filed a complaint with the Regional Trial Court of San
Fernando, Pampanga against the defendants-tenants and Defendants-tenants-subtenants, under the deeds of
respondents, for the court to fix a period within which to pay assignment, granted to the petitioner not only an option but
the agreed purchase price of P50.00 per square meter to the the exclusive right to buy the landholding. But the grantors
defendants, as provided for in the Deeds of Assignment. He were merely the defendants-tenants, and not the
also prayed for a writ of preliminary injunction against the respondents, the registered owners of the property. Not
defendants and the respondents therein. being the registered owners of the property, the defendants-
tenants could not legally grant to the petitioner the option,
much less the "exclusive right" to buy the property.
"NEMO DAT QUOD NON HABET"= No one can give what he
does not have.
(The action of the petitioner against the respondents and the
defendants-tenants has no legal basis. Under the Deeds of
Assignment, the obligation of the petitioner to pay to each of
the defendants-tenants the balance of the purchase price was
conditioned on the occurrence of the following events:
(a) the respondents agree to sell their property to the
petitioner;
(b) the legal impediments to the sale of the landholding to the
petitioner no longer exist;
(c) the petitioner decides to buy the property
When he testified, the petitioner admitted that the legal
impediments referred to in the deeds were (a) the
respondents’ refusal to sell their property; and, (b) the lack of
approval of the Department of Agrarian Reform. Therefore
the requisites were NOT sufficed.
