Leabres vs.

CA
GR No. L-41847

Subject: Sales
Doctrine: A receipt is not a valid basis for a contract of sale. Essential requisites of a contract of sale.

Facts: Clara Tambunting de Legarda died testate on April 22, 1950. Among the properties left by the
deceased is the Legarda Tambunting Subdivision located on Rizal Avenue Extension, City of Manila.
Shortly after the death of said deceased, plaintiff Catalino Leabres bought, on a partial payment of
Pl,000.00 a portion (No. VIII, Lot No. 1) of the Subdivision from surviving husband Vicente J. Legarda who
acted as special administrator, the deed or receipt of said sale appearing to be dated May 2, 1950. On
August 28, 1950, the Probate Court of Manila appointed Vicente Legarda as an administrator together
with Pacifica Price and Augusto Tambunting over the testate estate of said Clara Tambunting and
authorized through its order of November 21, 1951 the sale of the property.
Vicente L. Legarda was relieved as a regular Administrator and the Philippine Trust Co. which took over
as such administrator advertised the sale of the subdivision which includes the lot subject matter herein
in various issues of the Manila Times and Daily Mirror. No adverse claim or interest over the subdivision
or any portion thereof was ever presented by any person, and in the sale that followed, the Manotok
Realty, Inc. emerged the successful bidder. By order of the Probate Court, the Philippine Trust Co.
executed the Deed of Absolute Sale of the subdivision in favor of the Manotok Realty, Inc. which deed
was judicially approved on March 20, 1959, and recorded immediately in the proper Register of Deeds
which issued the corresponding Certificates of Title to the Manotok Realty, Inc., the defendant appellee
herein.
A complaint dated February 8, 1966, was filed by herein plaintiff, which seeks, among other things, for
the quieting of title over the lot subject matter herein, for continuing possession thereof, and for
damages. Leabres anchors his claim on the receipt dated May 2, 1950, which he claims as evidence of
the sale of said lot in his favor. However, Catalino Leabres has not registered his supposed interest over
the lot in the records of the Register of Deeds, nor did he present his claim for probate in the testate
proceedings over the estate of the owner of said subdivision, in spite of the notices advertised in the
papers. Both the RTC and CA dismissed the petitioners claim.

Issue: Whether or not a receipt is a valid basis for a contract of sale.

Held: An examination of the receipt reveals that the same can neither be regarded as a contract of sale
or a promise to sell. There was merely an acknowledgment of the sum of One Thousand Pesos
(P1,000.00). There was no agreement as to the total purchase price of the land nor to the monthly
installment to be paid by the petitioner. The requisites of a valid Contract of Sale namely 1) consent or
meeting of the minds of the parties; 2) determinate subject matter; 3) price certain in money or its
equivalent-are lacking in said receipt and therefore the sale is not valid nor enforceable. Furthermore,
it is a fact that Dona Clara Tambunting died on April 22, 1950. Her estate was thereafter under custodia
legis of the Probate Court which appointed Don Vicente Legarda as Special Administrator on August 28,
1950. Don Vicente Legarda entered into said sale in his own personal-capacity and without court
approval, consequently, said sale cannot bind the estate of Clara Tambunting. Petitioner should have
submitted the receipt of alleged sale to the Probate Court for its approval of the transactions. Anent his
possession of the land, petitioner cannot be deemed a possessor in good faith in view of the registration
of the ownership of the land. To consider petitioner in good faith would be to put a premium on his own
gross negligence. The Court resolved to DENY the petition for lack of merit and to AFFIRM the assailed
judgment.

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 his Hacienda 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.

Southwestern Sugar & Molasses Co. vs. Atlantic Gulf & Pacific Company
97 Phil 247
June 1955

FACTS:

On March 24, 1953, defendant-appellant Atlantic granted plaintiff-appellee Southwestern an option

period of ninety days to buy the formers barge No. 10 for the sum of P30,000. On May 11 of the same
year, Southwestern Company communicated its acceptance of the option to Atlantic through a letter, to
which the latter replied that their understanding was that the "offer of option" is to be a cash
transaction and to be effected "at the time the lighter is available." On June 25, Atlantic advised the
Southwestern Company that since there is still further work for it, the barge could not be turned over to
the latter company.

On June 27, 1953, the Southwestern Company filed this action to compel Atlantic to sell the barge in line
with the option, depositing with the court a check covering the sum of P30,000, but said check was later
withdrawn with the approval of the court. On June 29, the Atlantic withdrew its "offer of option" with
due notices to Southwestern Company stating that the option was granted merely as a favor. The
Atlantic contended that the option to sell it made to Southwestern Company is null and void because
said option to sell is not supported by any consideration.

The trial court granted herein plaintiff-appellee Southwestern Companys action for specific
performance and ordered herein defendant-appellant Atlantic to pay damages equivalent to 6 per
centum per annum on the sum of P30,000 from the date of the filing of the complaint.

ISSUE:

Is Atlantic liable for specific performance and to pay damages in favor of Southwestern Company?

COURT RULING:

The Supreme Court reversed the trial courts decision applying Article 1479 of the new Civil Code. The
Court reiterated that "an accepted unilateral promise" can only have a binding effect if supported by a
consideration, which means that the option can still be withdrawn, even if accepted, if said option is not
supported by any consideration. The option that Atlantic had provided was without consideration,
hence, can be withdrawn notwithstanding Southwestern Companys acceptance of said option.

American jurisprudence hold that an offer, once accepted, cannot be withdrawn, regardless of whether
it is supported or not by a consideration, but the specific provisions of Article 1479 commands
otherwise. While under the "offer of option" in question appellant Atlantic has assumed a clear
obligation to sell its barge to appellee Southwestern Company and the option has been exercised in
accordance with its terms, and there appears to be no valid or justifiable reason for the former to
withdraw its offer, the Court cannot adopt a different attitude because the law on the matter is clear.