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OLEGARIO CLARIN VS ALBERTO ROLUNA AND THE COURT OF APPEALS FACTS: Clarin was the owner of a 10 hectare land

in Carmen, Bohol. The same was said to be his share from the other co-owners. In 1959, he executed a Contract of Sale with Rulona as he was selling his 10 hectare land. It was agreed that the purchase price would be P2500.00. Down payment would be P1000.00 and the remaining balance would be paid monthly at P100.00 per month. Rulona paid the down payment as well as the 1stinstallment but then later on Clarin returned the P1100.00 against Rulonas will. Clarin said he could not convince the other coowners about the selling of his share. Clarin also said there was no perfected sale between him and Rulona as he said that the sale was subject to the condition that the other co-owners should give their consent to the sale. ISSUE: Whether or not there was a perfected contract of sale. DECISION: Yes there is. During trial there were 3 documents shown. Exhibit A shows that upon payment of P800.00 by Rulona, a survey of the land was authorized. Exhibit B shows that P200.00, part of the downpayment was paid to Clarin and that the 1stinstallment of P100.00 was also made. Though these exhibits are not the Contract of Sale, its A and B together, it can be seen that the Clarin agreed to sell and Rulona agreed to buy a definite object, that is, 10 hectares of land which is part and parcel of Lot 20 PLD No. 4,owned in common by the Clarin and his sisters although the boundaries of the 10 hectares would be delineated at a later date. The parties also agreed on a definite price which is P2,500.00. Exhibit B further shows that Clarin has received from Rulona as initial payment, the amount of P800.00. Hence, it cannot be denied that there was a perfected contract of sale between the parties and that such contract was already partially executed when the petitioner received the initial payment of P800.00. The latter's acceptance of the payment clearly showed his consent to the contract thereby precluding him from rejecting its binding effect. Further, Clarins letter to Rulona marked Exhibit C stated; "My dear Mr. Rulona: Replying to your letter of recent date, I deeply regret to inform you that my daughter, Alice, who is now in Manila, could not be convinced by me to sell the land in question, that is, the ten (10) hectares of land referred to in our tentative agreement. It is for this reason that I hereby authorize the bearer, Mr. Paciano Parmisano,to return to you in person the sum of One Thousand and One Hundred (P1,100.00) Pesos which you have paid in advance for the proposed sale of the land in question." The reasons given by the Clarin cannot operate against the validity of the contract in question. A contract is valid even though one of the parties entered into it against his better judgment. ROMAN VS. GRIMALT FACTS: Grimalt transacted with Roman for the purchase of a schooner called the Santa Marina. The sale was predicted upon the condition that it was seaworthy and that Roman would perfect

his title theretothe same being registered to Paulina Giron. Only of the said conditions were complied with will Grimalt purchase the same. The terms of payment were likewise agreed upon. Roman did nothing to perfect his title; then due to a severe storm, the vessel sank. Roman now sues Grimalt for the purchase price of the vessel. ISSUE: W/N Grimalt is liable for the loss HELD: NO. There was yet to be a perfected contract between them for the failure of Roman to perfect his title. That being the case, the loss is for the account of Roman as the owner thereof. NATIONAL GRAINS AUTHORITY V. IAC FACTS: On August 23, 1979, private respondent Leon Soriano offered to sell palay grains to NFA through William Cabal, the provincial manager in Tuguegarao. The documents submitted were processed, and he was given a quota of 2,640 cavans, which is the maximum number of cavans he may sell to NFA. On the same day and on the following day, Soriano delivered 630 cavans, which were no rebagged, classified and weighed. When he demanded payment, he was told that payment will be held in abeyance since Mr. Cabal was still investigating on an information received that Soriano was not a bona fide farmer. Instead of withdrawing the palay, Soriano insisted that the palay grains be delivered and paid. He filed a complaint for specific performance. Petitioners contend that the delivery was merely made for the purpose of offering it for sale because until the grains were rebagged, classified and weighed, they are not considered sold.

ISSUE: Whether there was a perfected sale HELD: Soriano initially offered to sell palay grains produced in his farmland to NFA. When the latter accepted the offer by noting in Soriano's Farmer's Information Sheet a quota of 2,640 cavans, there was already a meeting of the minds between the parties. The object of the contract, being the palay grains produced in Soriano's farmland and the NFA was to pay the same depending upon its quality. The fact that the exact number of cavans of palay to be delivered has not been determined does not affect the perfection of the contract. Article 1349 of the New Civil Code provides: ". . . . The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract, provided it is possible to determine the same, without the need of a new contract between the parties." In this case, there was no need for NFA and Soriano to enter into a new contract to determine the exact number of cavans of palay to be sold. Soriano can deliver so much of his produce as long as it does not exceed 2,640 cavans. From the moment the contract of sale is perfected, it is incumbent upon the parties to comply with their mutual obligations or "the parties may reciprocally demand performance" thereof.

EDCA PUBLISHING & DISTRIBUTING CORP. VS. THE SPOUSES LEONOR AND GERARDO SANTOS, DOING BUSINESS UNDER THE NAME AND STYLE OF "SANTOS BOOKSTORE," AND THE COURT OF APPEALS FACTS: EDCA sold books to Tomas dela Pena who fraudulently represented himself to be Prof. Jose Cruz, a Dean of DLSU. EDCA delivered him the books, the check Tomas issued was dishonored because he did not have an account at all. Tomas thereafter sold the books at a discount to Leonor Santos. EDCA, with the aid of the police, stormed the Santos Bookstore to retrieve the books. ISSUE: W/N EDCA may retrieve the books from Santos HELD: NO. Ownership of the books passed to Tomas upon the delivery thereof. He had the right to transfer the same to Santos. The fact that he did not pay for the books only warrants rescission or an action for payment. EDCA cannot be considered to have been unlawfully deprived under the CC as to warrant recovery of the books from Santos. Possession of movable property acquired in good faith is equivalent to title. Santos was a buyer in good faith, thus he is protected by the law. VICTORIAS MILLING CO., INC. VS. CA AND CONSOLIDATED SUGAR CORP., FACTS: St. Therese Merchandising (hereafter STM) regularly bought sugar from petitioner Victorias Milling Co., Inc. In the course of their dealings, petitioner issued several Shipping List/Delivery Receipts to STM as proof of purchases. Among these was SLDR No. 1214M, which gave rise to the instant case. SLDR No. 1214M covers 25,000 bags of sugar. The transaction it covered was a "direct sale." Thereafter, STM sold to private respondent Consolidated Sugar Corporation (CSC) its rights in SLDR No. 1214M. That same day, CSC wrote petitioner that it had been authorized by STM to withdraw the sugar covered by the SLDR. However, after 2,000 bags had been released, petitioner refused to allow further withdrawals of sugar. CSC thus inquired when it would be allowed to withdraw the remaining 23,000 bags. In its reply, petitioner said that it could not allow any further withdrawals of sugar because STM had already withdrawn all the sugar covered by the cleared checks. Petitioner also noted that CSC had represented itself to be STM's agent as it had withdrawn the 2,000 bags "for and in behalf" of STM. As a result, CSC filed a complaint for specific performance. Petitioner's primary defense a quo was that it was an unpaid seller for the 23,000 bags. Since STM had already drawn in full all the sugar corresponding to the amount of its cleared checks, it could no longer authorize further delivery of sugar to CSC. Petitioner also contended that it had no privity of contract with CSC. Furthermore, the SLDRs prescribed delivery of the sugar to the party specified therein and did not authorize the transfer of said party's rights and interests. The Trial Court rendered its judgment favoring the private respondent CSC. The appellate court affirmed said decision but modified the costs against petitioner.

ISSUE: Whether or not the Court of Appeals erred in not ruling that CSC was an agent of STM and hence, estopped to sue upon SLDR No. 1214M as an assignee. HELD: No. It is clear from Article 1868 that the basis of agency is representation. One factor which most clearly distinguishes agency from other legal concepts is control; one person - the agent - agrees to act under the control or direction of another - the principal That the authorization given to CSC contained the phrase "for and in our (STM's) behalf" did not establish an agency. Ultimately, what is decisive is the intention of the parties. That no agency was meant to be established by the CSC and STM is clearly shown by CSC's communication to petitioner that SLDR No. 1214M had been "sold and endorsed" to it. The use of the words "sold and endorsed" means that STM and CSC intended a contract of sale, and not an agency. Hence, on this score, no error was committed by the respondent appellate court when it held that CSC was not STM's agent and could independently sue petitioner. NORKIS TRADING VS CA FACTS: Alberto Nepales bought from the Norkis Distributors, Inc. brand new Yamaha motorcycle.The Branch Manager AvelinoLabajo agreed to accept the P7,500.00 price payable by means of a Letter of Guaranty from the Development Bank of the Philippines (DBP), Kabankalan. Hence, credit was extended to Nepales, and as security for the loan, he executed a chattel mortgage on the motorcycle in favor of DBP. Labajo issued the Norkis Sales Invoice perfecting the contract of sale, and Nepales signed the same to conform to the terms of the sale, while the unit remained in Norkis' possession. On November 6, 1979, it was registered under Alberto Nepales name in the Land Transportation Commission. The motorcycle was delivered to a certain Julian Nepales on January 22, 1980, who was allegedly the agent of Alberto Nepales but the latter denies it. On February 3, 1980, the motorcycle met an accident while being driven by a certain Zacarias Payba. The unit was a total wreck, was returned, and stored inside Norkis' warehouse. On March 20, 1980, DBP released the proceeds of respondent's motorcycle loan to Norkis in the total sum of P7,500. As the price of the motorcycle later increased to P7,828, Nepales paid the difference of P328 and demanded the delivery of the motorcycle. Norkis failed to deliver the unit, and Nepales filed an action for specific performance with damages. Norkis answered that the motorcycle had already been delivered to private respondent before the accident, hence, he should bear the risk of loss or damage as owner of the unit. ISSUE: Who should bear the risk of loss? COURT RULING: The Supreme Court ruled that Article 1496 of the Civil Code which provides that "in the absence of an express assumption of risk by the buyer, the things sold remain at seller's risk until

the ownership thereof is transferred to the buyer," is applicable in the case at bar for there was neither an actual nor constructive delivery of the thing sold. In this case, the purpose of the execution of the sales invoice and the registration of the vehicle in the name of Alberto Nepales with the Land Registration Commission was not to transfer the ownership and dominion over the motorcycle to him, but only to comply with the requirements of the DBP for processing private respondent's motorcycle loan. On March 20, 1980, before private respondent's loan was released and before he even paid Norkis, the motorcycle had already figured in an accident while driven by one ZacariasPayba. Payba was not shown by Norkis to be a representative or relative of private respondent. The circumstances in the case itself more than amply rebut the disputable presumption of delivery upon which Norkis anchors its defense to Nepales' action. TOPACIO VS COURT OF APPEALS FACTS: The spouses De Villa (parents-in-law of Topacio) were the former owners of a lot in QC. It was previously mortgaged to Ayala Investment and Development Corp to secure an obligation of P500k. For failure to pay, the mortgage was foreclosed and consequently, BPI acquired the property as highest bidder. Topacio wanted to buy the property. He made an offer for P900k, but was asked toimprove it. Together, they arrived at P1.25M as the purchase price, with 30%downpayment and the balance payable in cash upon execution of the Deed of Sale. Topacio paid the initial payment of P375k. BPI wrote to Topacio and informed him that he had until January 4, 1986 to pay the balance of P875k. P. asked for extensions. BPI agreed to extend up to June 30. Topacio was unable to meet the deadline, so BPI wrote a letter to Topacio, where BPI declared himself free to sell the property to other buyers and that Topacio could claim his initial payment of P375k. Topacio merely asked for more extensions. While BPI kept telling Topacio that he could claim the P375k back (in the form of a cashiers check), Topacio declined. But BPI mailed the check to him. The check remained with Topacio, uncashed. BPI then told Topacio that the property would be sold for P1.6M instead, so Topacio reminded him of the original agreement (P1.25M), but BPI refused. RTC: In favor of Topacio, finding that there is a perfected contract of sale which is still enforceable because BPI did not rescind either by judicial or notarial rescission. CA: Reversed. The contract is a contract to sell, not a contract of sale. ISSUE: Contract to sell or contract of sale? HELD: Contract of sale. The payment by Topacio of P375k was the operative act that gave rise to a perfect contract of sale. It is considered earnest money (something of value to show that the buyer was really in earnest, and given to the seller to bind the bargain). It is considered part of the purchase price and proof of the perfection of the contract.

The parties agreed on the object (house and lot in White Plains), and the price and the manner of payment. Nowhere in the transaction indicates that BPI reserved its title on the property, nor did it provide for any automatic rescission in case of default. So when Topacio failed to pay the balance of P875k despite several extensions, BPI could not validly rescind the contract w/o complying with the provision of Art1592 or Art 1191 on notarial or judicial rescission respectively. J. SCHUBACK & SONS V. CA FACTS: SJ Industrial, through Ramon San Jose, approached Schuback & Sons Phil. Trading (SSPT) to purchase bus spare parts. He submitted the list of parts he wanted and SSPT coordinated with its Germany Office to quote the prices, and forwarded its formal offer to SJ Industrial, containing the prices, item numbers, descriptions, etc. SJ informed SSPT of his desire to purchase such items and promised to submit the quantity per unit. SJ then submitted such quantities needed to SSPTs GM, Mr. Reichert. San Jose indicated the same in the Purchase Order with the inscription this will serve as our initial purchase order. PO will include 3% discount. SSPT immediately ordered the products from Germany to avail of the old prices partial deliveries of which were made. Then, for his failure to secure letters of credit, SJ failed to purchase the same and alleged that there was no perfected contract of sale. Thus, SSPT sought damages. ISSUE: W/N there was a perfected contract of sale HELD: YES. Quantity is immaterial in the perfection of a contract of sale. What is important is the meeting of the minds as to the object and cause of the sale. There was already a meeting of the minds in this case from the moment SJ manifested that he will order the parts, although he will communicate quantities later on. In fact, he indeed communicated such needed quantities this goes to the execution of the contract of sale already. By ordering the parts, SJ acceded to the prices offered by SSPT. On the other hand, SSPT acceded to SJs request for discount by immediately ordering the parts. SJ Industrial is thus liable for damage VICENTE AND MICHAEL LIM, PETITIONERS, VS. COURT OF APPEALS AND LIBERTY H.LUNA, RESPONDENTS. FACTS: On September 2, 1988 private respondent Liberty Luna sold her 1,013.6 squaremeters parcel of land (located at the corner of G. Araneta Avenue and Quezon Avenue inQuezon City. ) to petitioners Vicente and Michael Lim for P3,547,600.00. She receivedP200k as earnest money from Zapata Ralty (petitioners' broker) and the balance shall be paid in full after the squatters/occupants have totally vacated the premises. It was also stated in their agreement that Luna assumes responsibility to eject said squatters within60 days from the date of receipt of earnest money;; and in case the seller shall fail in her commitment to eject the

squatters/occupants within said period, the seller shall refund to the buyer this sum of P200,000.00; [plus another sum of ONE HUNDRED THOUSAND(P100,000.00) PESOS as liquidated damages]; however, if the buyer shall fail to pay the balance after the seller has ejected the squatters/occupants, this sum of P200,000.00shall be forfeited by the seller. Luna signed the agreement but crossed out the additional P100k liquidated damages. Private respondent Luna failed to eject the squatters from the land despite her alleged efforts to do so. It appears that private respondent asked the help of a building official and a city engineer to effect ejectment. Nonetheless, petitioners did not demand the return of their earnest money. Thereafter, parties met again to negotiate a price increase to facilitate the ejectment of the squatters. The parties agreed to an increase of P500.00 per square meter, by rounding off the total purchase price to P4, 000,000.00, with the remaining 13.6 square meters of the 1,013.6 square meters given as a discount. Less the P200, 000.00 given as earnest money, the balance to be paid by petitioners was P3, 800,000.00.After a few days, private respondent tried to return the earnest money alleging her failure to eject the squatters. She claimed that as a result of her failure to remove the squatters from the land, the contract of sale ceased to exist and she no longer had the obligation to sell and deliver her property to petitioners. ISSUE: Whether the non-fulfilment of the condition of ejecting the squatters resulted in defendant's losing the right to demand that plaintiff sell the land to them HELD: NO. The agreement, as quoted above, shows a perfected contract of sale. Under Art.1475 of the Civil Code, there is a perfected contract of sale if there is a meeting of the minds on the subject and the price. Indeed, the earnest money given is proof of the perfection of the contract. . It is true that private respondent undertook to eject the squatters before delivery of the property within a certain period and that for her failure to carry out her obligation she could be ordered to refund the P200, 000.00 earnest money. But whether she would be obliged to do so depend on petitioners who can waive the condition and opt to proceed with the sale instead. Private respondent Luna contends that as the condition of ejecting the squatters was not met, she no longer has an obligation to proceed with the sale of her lot. This contention is erroneous. Private respondent fails to distinguish between a condition imposed on the perfection of the contract and a condition imposed on the performance of an obligation. Failure to comply with the first condition results in the failure of contract, while failure to comply with the second condition only gives the other party the option either to refuse to proceed with the sale or to waive the condition. In this case, there is already a perfected contract. The condition was imposed only on the performance of the obligation. Hence, petitioners have the right to choose whether to demand the return of P200, 000.00 which they have paid as earnest money or to proceed with the sale. They have chosen to proceed with the sale and private respondent cannot refuse to do so. Indeed, private respondent is not the injured party. She cannot rescind the contract without violating the principle of mutuality of contracts, which prohibits allowing the validity and performance of contracts to be left to the will of one of the parties. SPOUSES DALION VS. CA FACTS:

On May 28, 1973, Sabesaje sued to recover ownership of a parcel of land, based on a private document of absolute sale, dated July 1, 1965, allegedly executed by Dalion, who, however denied the fact of sale, contending that the document sued upon is fictitious, his signature thereon, a forgery, and that subject land is conjugal property, which he and his wife acquired in 1960 from Saturnina Sabesaje as evidenced by the "Escritura de Venta Absoluta". The spouses denied claims of Sabesaje that after executing a deed of sale over the parcel of land, they had pleaded with Sabesaje, their relative, to be allowed to administer the land because Dalion did not have any means of livelihood. They admitted, however, administering since 1958, five parcels of land in Sogod, Southern Leyte, which belonged to Leonardo Sabesaje, grandfather of Sabesaje, who died in 1956. They never received their agreed 10% and 15% commission on the sales of copra and abaca, respectively. Sabesaje's suit, they countered, was intended merely to harass, preempt and forestall Dalion's threat to sue for these unpaid commissions. ISSUE: Whether or not the contract of sale of parcel of land is valid.

RULING: No. A contract of sale is a consensual contract, which means that the sale is perfected by mere consent. No particular form is required for its validity. Upon perfection of the contract, the parties may reciprocally demand performance (Art. 1475, NCC), i.e., the vendee may compel transfer of ownership of the object of the sale, and the vendor may require the vendee to pay the thing sold (Art. 1458, NCC). The trial court thus rightly and legally ordered Dalion to deliver to Sabesaje the parcel of land and to execute corresponding formal deed of conveyance in a public document. Under Art. 1498, NCC, when the sale is made through a public instrument, the execution thereof is equivalent to the delivery of the thing. Delivery may either be actual (real) or constructive. Thus delivery of a parcel of land may be done by placing the vendee in control and possession of the land (real) or by embodying the sale in a public instrument (constructive). NICOLAS SANCHEZ VS. SEVERINA RIGOS FACTS: Nicolas Sanchez and Severina Rigos executed an instrument entitled "Option to Purchase," whereby Mrs. Rigos agreed, promised and committed to sell to Sanchez a parcel of land within two (2) years from said date with the understanding that said option shall be deemed terminated and elapsed if Sanchez shall fail to exercise his right to buy the property within the stipulated period. Inasmuch as several tenders of payment made by Sanchez within said period, were rejected by Mrs. Rigos, on March 12, 1963, the former deposited said amount with the Court of First Instance of Nueva Ecija and commenced against the latter the present action, for specific performance and damages. Rigos contended that the contract between them was only a unilateral promise to sell, and the same being unsupported by any valuable consideration, by force of the New Civil Code, is null and void.

Sanchez alleged in his compliant that, by virtue of the option under consideration, "defendant agreed and committed to sell" and "the plaintiff agreed and committed to buy" the land described in the option. The lower court rendered judgment in favor of Sanchez and ordered Rigos to accept the sum Sanchez judicially consigned, and to execute in his favor the requisite deed of conveyance. ISSUE: Whether there was a contract to buy and sell between the parties or only a unilateral promise to sell. COURT RULING: The Supreme Court affirmed the lower courts decision. The instrument executed in 1961 is not a "contract to buy and sell," but merely granted SANCHEZ an option to buy, as indicated by its own title "Option to Purchase." The option did not impose upon Sanchez the obligation to purchase Rigos' property. Rigos "agreed, promised and committed" herself to sell the land to Sanchez, but there is nothing in the contract to indicate that her aforementioned agreement, promise and undertaking is supported by a consideration "distinct from the price" stipulated for the sale of the land. Article 1479 refers to "an accepted unilateral promise to buy or to sell." Since there may be no valid contract without a cause or consideration, the promisor is not bound by his promise and may, accordingly, withdraw it. Pending notice of its withdrawal, his accepted promise partakes, however, of the nature of an offer to sell which, if accepted, results in a perfected contract of sale. LINA MONTILLA VS COURT OF APPEALS AND EMILIO ARAGON, JR. FACTS: Herein defendant files an action against petitioner for failing to comply with the latters obligation to sell a piece of land located in Poblacion, Iloilo City in accordance to the parties verbal contract. The price of the said lot as stipulated is P57,650.00 (at the rate of P50.00 per square meter), with the condition that Aragon constructed on the lot a house of strong materials and paid a nominal monthly rental in the meantime, to which was complied with by Aragon. In her answer Montilla categorically denied ever having entered into such an agreement, and set up the affirmative defenses of (1) unenforceability of the alleged agreement under the Statute of Frauds; and (2) failure of the complaint to state a cause of action, no allegation having been made therein of any consideration for the promise to sell distinct and separate from the price, as required by Article 1479 of the Civil Code. Trial Court rendered judgment in favor of Aragon, on the grounds that Montilla admitted her acceptance of the verbal contract. ISSUE: Whether or not a verbal contract was established? If in the affirmative, whether or not the contract was unenforceable because violative of the Statute of Frauds and because not supported by any consideration distinct from the price.

HELD: NO. For while those defenses (by Montilla) imply an acceptance by the pleader of the truth of the agreement at which the defenses are directed, the acceptance is at best hypothetical, assumed only for purposes of determining the validity of the defenses, but cannot in any sense be taken as an unconditional and irretrievably binding factual admission. The import of the answer, couched in language that could not be made any plainer is that there was no verbal contract to sell ever agreed to by Montilla, but that, even assuming hypothetically, or for the sake of argument that there was, the agreement was unenforceable because in breach of the Statute of Frauds. It was therefore reversible error for the Trial Court to have burdened Montilla with an admission of the verbal contract to sell sued upon. There being therefore no admission whatever on Montilla's part of the existence or ratification of the claimed contract to sell, and taking account of her disavowal in her pleadings and in her evidence of that contract, and necessarily of any fulfillment of the terms thereof, it is clear that the action for its enforcement should have been dismissed pursuant to the Statute of Frauds, in relation to Rule 16 of the Rules of Court. The action is also dismissible upon another legal ground. Assuming arguendo veritability of the oral promise to sell by Montilla, the promise was nevertheless not binding upon her in view of the absence of any consideration therefor distinct from the stipulated price. This is the principle laid down by the second paragraph of Article 1479: "An accepted unilateral promise to .. sell a determinate thing for a price certain is binding upon the promissor if the promise is supported by a consideration distinct from the price." SPOUSES TRINIDAD VS. EPIFANIO NATINO VS. AIC FACTS: Petitioners Trinidad and Epifanio Natino executed a real-estate mortgage in favor of respondent-bank Rural Bank of Aguilar, for security to a loan amounting to P2000. On the agreed date, the spouses failed to pay the said loan and in the foreclosure of the property, the bank was the highest bidder at its auction. Along with the certificate of sale, a notice for the redemption period was sent tothe spouses. Still, upon the expiration of the said period, no redemption was made. Upon finalization of the deed of sale, the spouses deposited P4000 to the bank, and stated that they were granted the extension of the redemption period and it was understood that it was a pay when able arrangement. This said agreement was not approved by the banks Board of Directors, nor was it ratified. The coart ruled in favor of the bank, hence this petition. ISSUE: W/N the agreement is valid and therefore, binding. HELD: Given the provisions of article 1180, the contentions of the petitioner would be meritous. However, because of the fact that such agreement was not approved by the Board of Directors, it was held that a meeting of minds did not occur, therefore making the said arrangement not binding. The case was dismissed.

SERRA VS. CA FACTS: Petitioner is the owner of a 374 square meter parcel of land in Masbate, Masbate. Sometime in 1975, private respondent Rizal Commercial Banking Corp., in its desire to put up a branch in Masbate, Masbate, negotiated with petitioner for the purchase of the then unregistered property. On May 20, 1975, a contract of lease with option to buy was contracted by the parties. Pursuant to said contract, a binding and other improvements were constructed on the land which housed the branch office of RCBC in Masbate, Masbate. Within three years from the signing of the contract, petitioner complied with his part of the agreement by having the property registered and placed under the TORRENS SYSTEM, for which OCT was issued by the Register of Deeds of the Province of Masbate. Petitioner alleges that as soon as he had the property registered, he kept on pursuing the manager of the branch to effect the sale of the lot as per their agreement. It was not until September 4, 1984, however, when the respondent bank decided to exercise its option and informed petitioner, of its intention to buy the property at the agreed price of not greater than P210.00 per square meter or a total of P78,430.00. But much to the surprise of the respondent, petitioner replied that he is no longer selling the property. Hence, a complaint for specific performance and damages were filed by respondent against petitioner. In the complaint, respondent alleged that during the negotiations it made clear to petitioner that it intends to stay permanently on property once its branch office is opened unless the exigencies of the business requires otherwise. Aside from its prayer for specific performance, it likewise asked for an award of P50,000.00 for attorneys tees PIOO,OOO.OO as exemplary damages and the cost of the suit. ISSUES: 1. Whether or not the disputed contract is a contract of adhesion. 2. Whether or not the petitioner may be compelled to exercise the option to buy before the time expires. 3. Whether or not there was no consideration to support the option, distinct from the price, hence the option cannot be exercised. HELD: 1. No. A contract of adhesion is one wherein a party usually a corporation, prepares the stipulations in the contract while the other party merely affixes his signature or his adhesion thereto. These types of contract are as binding as ordinary contracts. Because in reality, the party who adheres to the contract is free to reject it entirely although this Court will not hesitate to rule out blind adherence to terms where facts and circumstances will show that it is basically onesided. We do not find the situation in the present case to be inequitable. Petitioner is a highly educated man, who, at the time of the trial was already a CPA-Lawyer, and when he entered into the contract, was already a CPA, holding a respectable position with the Metropolitan Manila Commission. It is evident that a man of his stature should have been more cautious in transactions he enters into, particularly where it concerns valuable properties. He is amply equipped to drive a hard bargain if he would be so minded to.

2. No. In a unilateral promise to sell, where the debtor fails to withdraw the promise before the acceptance by the creditor, the transaction becomes a bilateral contract to sell and to buy, because upon acceptance by the creditor of the offer to sell by the debtor, there is already a meeting of the minds of the parties as to the thing which is determinate and the price which is certain. In which case, the parties may then reciprocally demand performance. Jurisprudence has taught us that an optional contract is a privilege existing only in one party the buyer. For a separate consideration paid, he is given the right to decide to purchase or not, a certain merchandise or properly, at any time within the agreed period, at a fixed price. This being his prerogative, he may not be compelled to exercise the option to buy before the time expires. 3. Yes. A price is considered certain if it is so with reference to another thing certain or when the determination thereof is left to the judgment of a specified person or persons. And generally, gross inadequacy of price does not affect a contract of sale. Contracts are to be construed according to the sense ai1d meaning of the terms which the parties themselves have used. In the present dispute, there is evidence to show that the intention of the parties is to peg the price at P210 per square meter.

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