Limson vs. Ca
Limson vs. Ca
Limson vs. Ca
Petitioner alleged that on 5 September 1978 she was surprised to learn from the agent of respondent spouses that the property was the subject of The main argument of petitioner is that there was a perfected contract to sell between her and respondent spouses. On the other hand, respondent
a negotiation for the sale to respondent Sunvar Realty Development Corporation (SUNVAR) represented by respondent Tomas Cuenca, Jr. On 15 spouses and respondents SUNVAR and Cuenca argue that what was perfected between petitioner and respondent spouses was a mere option.
September 1978 petitioner discovered that although respondent spouses purchased the property from the Ramoses on 20 March 1970 it was only on 15
September 1978 that TCT No. S-72946 covering the property was issued to respondent spouses. As a consequence, she filed on the same day A scrutiny of the facts as well as the evidence of the parties overwhelmingly leads to the conclusion that the agreement between the parties was
an Affidavit of Adverse Claim with the Office of the Registry of Deeds of Makati, Metro Manila, which was annotated on TCT No. S-72946. She also a contract of option and not a contract to sell.
claimed that on the same day she informed respondent Cuenca of her "contract" to purchase the property. An option, as used in the law of sales, is a continuing offer or contract by which the owner stipulates with another that the latter shall have the right
The Deed of Sale between respondent spouses and respondent SUNVAR was executed on 15 September 1978 and TCT No. S-72377 was issued to buy the property at a fixed price within a time certain, or under, or in compliance with, certain terms and conditions, or which gives to the owner of the
in favor of the latter on 26 September 1978 with the Adverse Claim of petitioner annotated thereon. Petitioner claimed that when respondent spouses sold property the right to sell or demand a sale. It is also sometimes called an "unaccepted offer." An option is not of itself a purchase, but merely secures the
the property in dispute to SUNVAR, her valid and legal right to purchase it was ignored if not violated. Moreover, she maintained that SUNVAR was in bad privilege to buy.[8] It is not a sale of property but a sale of the right to purchase.[9] It is simply a contract by which the owner of property agrees with another
faith as it knew of her "contract" to purchase the subject property from respondent spouses. person that he shall have the right to buy his property at a fixed price within a certain time. He does not sell his land; he does not then agree to sell it; but
he does sell something, i.e., the right or privilege to buy at the election or option of the other party.[10] Its distinguishing characteristic is that it imposes no
Finally, for the alleged unlawful and unjust acts of respondent spouses, which caused her damage, prejudice and injury, petitioner claimed that binding obligation on the person holding the option, aside from the consideration for the offer. Until acceptance, it is not, properly speaking, a contract, and
the Deed of Sale, should be annuled and TCT No. S-72377 in the name of respondent SUNVAR canceled and TCT No. S-72946 restored. She also does not vest, transfer, or agree to transfer, any title to, or any interest or right in the subject matter, but is merely a contract by which the owner of the
insisted that a Deed of Sale between her and respondent spouses be now executed upon her payment of the balance of the purchase price agreed upon, property gives the optionee the right or privilege of accepting the offer and buying the property on certain terms.[11]
plus damages and attorneys fees.
On the other hand, a contract, like a contract to sell, involves the meeting of minds between two persons whereby one binds himself, with respect to
In their Answer[4] respondent spouses maintained that petitioner had no sufficient cause of action against them; that she was not the real party in the other, to give something or to render some service.[12] Contracts, in general, are perfected by mere consent,[13] which is manifested by the meeting of
interest; that the option to buy the property had long expired; that there was no perfected contract to sell between them; and, that petitioner had no legal the offer and the acceptance upon the thing and the cause which are to constitute the contract. The offer must be certain and the acceptance absolute.[14]
capacity to sue. Additionally, respondent spouses claimed actual, moral and exemplary damages, and attorneys fees against petitioner.
The Receipt[15] that contains the contract between petitioner and respondent spouses provides
Received from Lourdes Limson the sum of Twenty Thousand Pesos (P20,000.00) under Check No. 22391 dated July 31, 1978 as earnest money with We cannot subscribe to the argument of petitioner that respondent spouses extended the option period when they extended the authority of their
option to purchase a parcel of land owned by Lorenzo de Vera located at Barrio San Dionisio, Municipality of Paraaque, Province of Rizal with an area of agent until 31 August 1978. The extension of the contract of agency could not operate to extend the option period between the parties in the instant
forty eight thousand two hundred sixty square meters more or less at the price of Thirty Four Pesos (P34.00)[16] cash subject to the condition and stipulation case. The extension must not be implied but categorical and must show the clear intention of the parties.
that have been agreed upon by the buyer and me which will form part of the receipt. Should the transaction of the property not materialize not on the fault
of the buyer, I obligate myself to return the full amount of P20,000.00 earnest money with option to buy or forfeit on the fault of the buyer. I guarantee to As to whether respondent spouses were at fault for the non-consummation of their contract with petitioner, we agree with the appellate court that
notify the buyer Lourdes Limson or her representative and get her conformity should I sell or encumber this property to a third person. This option to buy is they were not to be blamed. First, within the option period, or on 4 August 1978, it was respondent spouses and not petitioner who initiated the meeting at
good within ten (10) days until the absolute deed of sale is finally signed by the parties or the failure of the buyer to comply with the terms of the option to the Office of the Register of Deeds of Makati. Second, that the Ramoses failed to appear on 4 August 1978 was beyond the control of respondent
buy as herein attached. spouses. Third, the succeeding meetings that transpired to consummate the contract were all beyond the option period and, as declared by the Court of
Appeals, the question of who was at fault was already immaterial. Fourth, even assuming that the meetings were within the option period, the presence of
petitioner was not enough as she was not even prepared to pay the purchase price in cash as agreed upon. Finally, even without the presence of the
In the interpretation of contracts, the ascertainment of the intention of the contracting parties is to be discharged by looking to the words they used Ramoses, petitioner could have easily made the necessary payment in cash as the price of the property was already set at P34.00 per square meter and
to project that intention in their contract, all the words, not just a particular word or two, and words in context, not words standing alone.[17] The payment of the mortgage could very well be left to respondent spouses.
above Receipt readily shows that respondent spouses and petitioner only entered into a contract of option; a contract by which respondent spouses agreed
with petitioner that the latter shall have the right to buy the formers property at a fixed price of P34.00 per square meter within ten (10) days from 31 July Petitioner further claims that when respondent spouses sent her a telegram demanding full payment of the purchase price on 14 September 1978 it
1978. Respondent spouses did not sell their property; they did not also agree to sell it; but they sold something, i.e., the privilege to buy at the election or was an acknowledgment of their contract to sell, thus denying them the right to claim otherwise.
option of petitioner. The agreement imposed no binding obligation on petitioner, aside from the consideration for the offer.
We do not agree. As explained above, there was no contract to sell between petitioner and respondent spouses to speak of. Verily, the telegram
The consideration of P20,000.00 paid by petitioner to respondent spouses was referred to as "earnest money." However, a careful examination of could not operate to estop them from claiming that there was such contract between them and petitioner. Neither could it mean that
the words used indicates that the money is not earnest money but option money. "Earnest money" and "option money" are not the same but distinguished respondent spouses extended the option period. The telegram only showed that respondent spouses were willing to give petitioner a chance to buy subject
thus: (a) earnest money is part of the purchase price, while option money is the money given as a distinct consideration for an option contract; (b) earnest property even if it was no longer exclusive.
money is given only where there is already a sale, while option money applies to a sale not yet perfected; and, (c) when earnest money is given, the buyer
is bound to pay the balance, while when the would-be buyer gives option money, he is not required to buy,[18] but may even forfeit it depending on the The option period having expired and acceptance was not effectively made by petitioner, the purchase of subject property by respondent SUNVAR
terms of the option. was perfectly valid and entered into in good faith. Petitioner claims that in August 1978 Hermigildo Sanchez, the son of respondent spouses agent,
Marcosa Sanchez, informed Marixi Prieto, a member of the Board of Directors of respondent SUNVAR, that the property was already sold to
There is nothing in the Receipt which indicates that the P20,000.00 was part of the purchase price. Moreover, it was not shown that there was a petitioner. Also, petitioner maintains that on 5 September 1978 respondent Cuenca met with her and offered to buy the property from her at P45.00 per
perfected sale between the parties where earnest money was given. Finally, when petitioner gave the "earnest money," the Receipt did not reveal that she square meter. Petitioner contends that these incidents, including the annotation of her Adverse Claim on the title of subject property on 15 September 1978
was bound to pay the balance of the purchase price. In fact, she could even forfeit the money given if the terms of the option were not met. Thus, show that respondent SUNVAR was aware of the perfected sale between her and respondent spouses, thus making respondent SUNVAR a buyer in bad
the P20,000.00 could only be money given as consideration for the option contract. That the contract between the parties is one of option is buttressed by faith.
the provision therein that should the transaction of the property not materialize without fault of petitioner as buyer, respondent Lorenzo de Vera obligates
himself to returnthe full amount of P20,000.00 "earnest money" with option to buy or forfeit the same on the fault of petitioner. It is further bolstered by the Petitioner is not correct. The dates mentioned, at least 5 and 15 September 1978, are immaterial as they were beyond the option period given to
provision therein that guarantees petitioner that she or her representative would be notified in case the subject property was sold or encumbered to a third petitioner. On the other hand, the referral to sometime in August 1978 in the testimony of Hermigildo Sanchez as emphasized by petitioner in her petition is
person. Finally, the Receipt provided for a period within which the option to buy was to be exercised, i.e., "within ten (10) days" from 31 July 1978. very vague. It could be within or beyond the option period. Clearly then, even assuming that the meeting with Marixi Prieto actually transpired, it could not
necessarily mean that she knew of the agreement between petitioner and respondent spouses for the purchase of subject property as the meeting could
Doubtless, the agreement between respondent spouses and petitioner was an "option contract" or what is sometimes called an "unaccepted offer." have occurred beyond the option period. In which case, no bad faith could be attributed to respondent SUNVAR. If, on the other hand, the meeting was
During the option period the agreement was not converted into a bilateral promise to sell and to buy where both respondent spouses and petitioner were within the option period, petitioner was remiss in her duty to prove so. Necessarily, we are left with the conclusion that respondent SUNVAR bought subject
then reciprocally bound to comply with their respective undertakings as petitioner did not timely, affirmatively and clearly accept the offer of respondent property from respondent spouses in good faith, for value and without knowledge of any flaw or defect in its title.
spouses.
The appellate court awarded nominal and exemplary damages plus attorneys fees to respondent spouses and respondent SUNVAR. But nominal
The rule is that except where a formal acceptance is not required, although the acceptance must be affirmatively and clearly made and evidenced damages are adjudicated to vindicate or recognize the right of the plaintiff that has been violated or invaded by the defendant. [19] In the instant case, the
by some acts or conduct communicated to the offeror, it may be made either in a formal or an informal manner, and may be shown by acts, conduct or Court recognizes the rights of all the parties and finds no violation or invasion of the rights of respondents by petitioner. Petitioner, in filing her complaint,
words by the accepting party that clearly manifest a present intention or determination to accept the offer to buy or sell. But there is nothing in the acts, only seeks relief, in good faith, for what she believes she was entitled to and should not be made to suffer therefor. Neither should exemplary damages be
conduct or words of petitioner that clearly manifest a present intention or determination to accept the offer to buy the property of respondent spouses within awarded to respondents as they are imposed only by way of example or correction for the public good and only in addition to the moral, temperate,
the 10-day option period. The only occasion within the option period when petitioner could have demonstrated her acceptance was on 5 August 1978 liquidated or compensatory damages.[20] No such kinds of damages were awarded by the Court of Appeals, only nominal, which was not justified in this
when, according to her, she agreed to meet respondent spouses and the Ramoses at the Office of the Register of Deeds of Makati. Petitioners agreement case. Finally, attorneys fees could not also be recovered as the Court does not deem it just and equitable under the circumstances.
to meet with respondent spouses presupposes an invitation from the latter, which only emphasizes their persistence in offering the property to the
former. But whether that showed acceptance by petitioner of the offer is hazy and dubious. WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals ordering the Register of Deeds of Makati City to lift the adverse claim
and such other encumbrances petitioner Lourdes Ong Limson may have filed or caused to be annotated on TCT No. S-75377 is AFFIRMED, with the
On or before 10 August 1978, the last day of the option period, no affirmative or clear manifestation was made by petitioner to accept the MODIFICATION that the award of nominal and exemplary damages as well as attorneys fees is DELETED.
offer. Certainly, there was no concurrence of private respondent spouses offer and petitioners acceptance thereof within the option period. Consequently,
there was no perfected contract to sell between the parties. SO ORDERED.
On 11 August 1978 the option period expired and the exclusive right of petitioner to buy the property of respondent spouses ceased. The LOURDES ONG LIMSON vs. COURT OF APPEALS, SPOUSES LORENZO DE VERA and ASUNCION SANTOS-DE VERA, TOMAS CUENCA, JR.
subsequent meetings and negotiations, specifically on 11 and 23 August 1978, between the parties only showed the desire of respondent spouses to sell
and SUNVAR REALTY DEVELOPMENT CORPORATION
their property to petitioner. Also, on 14 September 1978 when respondent spouses sent a telegram to petitioner demanding full payment of the purchase
price on even date simply demonstrated an inclination to give her preference to buy subject property. Collectively, these instances did not indicate that
petitioner still had the exclusive right to purchase subject property. Verily, the commencement of negotiations between respondent spouses and G.R. No. 135929 (April 20, 2001)
respondent SUNVAR clearly manifested that their offer to sell subject property to petitioner was no longer exclusive to her.
ACTS: Petitioner Lourdes OngLimson alleged that in July 1978 respondent spouses Lorenzo de Vera and Asuncion Santos-de Vera, through their agent
Marcosa Sanchez, offered to sell to petitioner a parcel of land consisting of 48, 260 square meters, more or less, situated in Barrio San Dionisio,
Paraaque, Metro Manila; that respondent spouses informed her that they were the owners of the subject property; that on 31 July 1978 she agreed to buy
the property at the price of P34.00 per square meter and gave the sum of P20,000.00 to respondent spouses as "earnest money;" that respondent meetings and negotiations, specifically on 11 and 23 August 1978, between the parties only showed the desire of respondent spouses to sell their property
spouses signed a receipt therefor and gave her a 10-day option period to purchase the property; that respondent Lorenzo de Vera then informed her that to petitioner. Also, on 14 September 1978 when respondent spouses sent a telegram to petitioner demanding full payment of the purchase price on even
the subject property was mortgaged to Emilio Ramos and Isidro Ramos; that respondent Lorenzo de Vera asked her to pay the balance of the purchase date simply demonstrated an inclination to give her preference to buy subject property. Collectively, these instances did not indicate that petitioner still had
price to enable him and his wife to settle their obligation with the Ramoses. the exclusive right to purchase subject property. Verily, the commencement of negotiations between respondent spouses and respondent SUNVAR clearly
manifested that their offer to sell subject property to petitioner was no longer exclusive to her.
Petitioner also averred that she agreed to meet respondent spouses and the Ramoses on 5 August 1978 at the Office of the Registry of deeds of Makati,
Metro Manila, to consummate the transaction but due to the failure of respondent Asuncion Santos-de Vera and the Ramoses to appear, no transaction
was formalized. In a second meeting scheduled on 11 August 1978 she claimed that she was willing and ready to pay the balance of the purchase price
but the transaction again did not materialize as respondent spouses failed to pay the back taxes of subject property. Subsequently, on 23 August 1978
petitioner allegedly gave respondent Lorenzo de Vera three (3) checks in the total amount of P36, 170.00 for the settlement of the back taxes of the
property and for the payment of the quitclaims of the three (3) tenants of subject land. The amount was purportedly considered part of purchase price and
respondent Lorenzo de Vera signed the receipts therefor.
Petitioner alleged that on 5 September 1978 she was surprised to learn from the agent of respondent spouses that the property was the subject of a
negotiation for the sale to respondent Sunvar Realty Development Corporation (SUNVAR) represented by respondent Tomas Cuenca, Jr. On 15
September 1978 petitioner discovered that although respondent spouses purchased the property from the Ramoses on 20 March 1970 it was only on 15
September 1978 that TCT No. S-72946 covering the property was issued to respondent spouses.
On the other hand, respondents SUNVAR and Cuenca,alleged that petitioner was not the proper party in interest and/or had no cause of action against
them. But, even assuming that petitioner was the proper party in interest, they claimed that she could only be entitled to the return of any amount received
by respondent spouses. In the alternative, they argued that petitioner had lost her option to buy the property for failure to comply with the terms and
conditions of the agreement as embodied in the receipt issued therefor.
ISSUE: Whether or not there was a perfected contract to sell between petitioner and respondent spouses
HELD: A scrutiny of the facts as well as the evidence of the parties overwhelmingly leads to the conclusion that the agreement between the parties was a
contract of option and not a contract to sell.
An option, as used in the law of sales, is a continuing offer or contract by which the owner sitpulates with another that the latter shall have the right to buy
the property at a fixed price within a time certain, or under, or in compliance with, certain terms and conditions, or which gives to the owner of the property
the right to sell or demand a sale. It is also sometimes called an "unaccepted offer." An option is not itself a purchase, but merely secures the privilege to
buy. It is not a sale of property but a sale of right to purchase.It is simply a contract by which the owner of property agrees with another person that he shall
have the right to buy his property at a fixed price within a certain time. He does not sell his land; he does not then agree to sell it; but he does not sell
something, i.e., the right or privilege to buy at the election or option of the other party. Its distinguishing characteristic is that it imposes no binding
obligation on the person holding the option, aside from the consideration for the offer. Until acceptance, it is not, properly speaking, a contract, and does
not vest, transfer, or agree to transfer, any title to, or any interest or right in the subject matter, but is merely a contract by which the owner of the property
gives the optionee the right or privilege of accepting the offer and buying the property on certain terms.
The consideration of P20,000.00 paid by petitioner to respondent spouses was referred to as "earnest money." However, a careful examination of the
words used indicated that the money is not earnest money but option money. "Earnest money" and "option money" are not the same but distinguished
thus; (a) earnest money is part of the purchase price, while option money is the money given as a distinct consideration for an option contract; (b) earnest
money given only where there is already a sale, while option money applies to a sale not yet perfected; and, (c) when earnest money is given, the buyer is
bound to pay the balance, while when the would-be buyer gives option money, he is not required to buy,but may even forfeit it depending on the terms of
the option. There is nothing in the Receipt which indicates that the P20,000.00 was part of the purchase price. Moreover, it was not shown that there was a
perfected sale between the parties where earnest money was given.
Doubtless, the agreement between respondent spouses and petitioner was an "option contract" or what is sometimes called an "unaccepted offer." During
the option period the agreement was not converted into a bilateral promise to sell and to buy where both respondent spouses and petitioner were then
reciprocally bound to comply with their respective undertakings as petitioner did not timely, affirmatively and clearly accept the offer of respondent spouses.
On 11 August 1978 the option period expired and the exclusive right of petitioner to buy the property of respondent spouses ceased. The subsequent