Limson v. Court of Appeals

GR No. 135929, April 20, 2001

Topic in ales! "arnest #one$ v. %ption #one$ & Art. 1'(2

)ACT!

 This is a Petition for Review on Certiorari to review, reverse and set aside the Decision of the Court
of Appeals which reversed the Decision of the Regional Trial Court. The petitioner likewise assails
the Resolution  of the appellate court denying petitioner's
petitioner's Motion for Reconsideration.

Petitioner Lourdes ng Li!son and respondent spouses Loren"o de #era and Asuncion $antos%de
#era agreed
agreed that
that petitioner
petitioner would &uy a parcel
parcel of land owned
owned &y respondent
respondents.
s. n ( )uly (*+,
petitioner paid P-, as /earnest !oney/0 respondents signed a receipt and gave her a (%day
option period to purchase the property.

 The parties agreed

agreed to !eet on August 1 and August ((, &ut failed to cons
consu!!ate
u!!ate the sale &eca
&ecause
use
the responden
respondentt spou
spouses
ses did not appear.
appear. Peti
Petitione
tionerr soon learned
learned that su&2
su&2ect
ect proper
properyy was also
underr negotiat
unde negotiation
ion with responde
respondent
nt spouses
spouses and with $unvar RealtyRealty Develop!
Develop!ent
ent Corp
Corporat
oration
ion
3$45#AR6. n (1 $epte!&er
$epte!&er (*+, Li!son
Li!son filed an affidavit of Adverse Claim with the ffice of the
affidavit
Registry of Deeds
Deeds and infor!ed $45#AR.
$45#AR. TCT 5. $%+-++ was was issued on -7 $ep
$epte!&er
te!&er (*+ in
favor of $45#AR with the adverse Claim of petitioner annotated thereon.

Petitioner clai!ed that the Deed of Sale should &e annuled, that TCT 5o. $%+-++ &e canceled and
ownership &e restored to respondent spouses, and that a Deed of Sale &e e8ecuted in favor of her.

 The Regional Trial

Trial Court rrendered Decision in favor of petitioner. n appeal, the Court of Appeals
endered its Decision
co
co!p
!plelete
tely
ly reve
reversrsed
ed th
thee de
deci
cisi
sion
on of th
thee tria
triall cour
court.
t. Peti
Pe titi
tion
oner
er ti!e
ti!ely
ly file
filed
d a 9o
9oti
tion
on fo
forr
Recons
Rec onside
iderat
ration
ion which
which wa
was s denied
denied &y the Court
Court of Appeal
Appeals s on (* cto&e
cto&err (**
(**.
. :ence,
:ence, this
petition.

*+"!

3(6 ;hether
;hether or not there was a perfected
perfected contract
contract to sell &etw
&etween
een peti
petitione
tionerr and respond
respondent
ent
spouses.

3-6 ;hether or not the P-,

P-, paid &y Li!son represented
represented /earnest
/earnest !oney/.

R+L*NG!

3(6 5o, there was no perfected

perfected contract
contract to sell.
sell. A scrutiny of the facts as wel
welll as the evidence of
the parties overwhel!ingly leads to the conclusion that the agree!ent &etween the parties was
a contract of option and not a contract to sell.

An opt
option
ion,, as used in the law of sales
sales,, is a contin
continuin
uing
g off
offer
er or contra
contract
ct &y which
which the owne
ownerr
sitpulates with another that the latter shall have
have the right to &uy the property at a fi8ed price within
a ti!e certain, or under, or in co!pliance with, certain ter!s and conditions, or which gives to the
owner of the property the right to sell or de!and a sale. <t is also so!eti!es called an /unaccepted
offer./ An option is not itself a purchase, &ut !erely secures the privilege to &uy. <t is not a sale of
property &ut a sale of right to purchase. * <t is si!ply a contract &y which the owner of property
agrees with another person that he shall have the right to &uy his property at a fi8ed price within a
certain ti!e. :e does not sell his land0 he does not then agree to sell it0 &ut he does not sell
(
so!
so!eth
ething
ing,, i.e.,
distinguishingi.e.,characteristic
the right
right or is
privi
privileg
lege
that e i!poses
it to &uy atnothe electio
election
&inding n or opt
option
o&ligationion
on of
thethe otherholding
person part
party.
y. the
 <ts
option, aside fro! the consideration for the offer. 4ntil acceptance,  it is not, p properly
roperly spea
speaking,
king, a
 

contract, and does not vest, transfer, or agree to transfer, any title to, or any interest or right in the
su&2ect !atter, &ut is !erely a contract &y which the owner of the property gives the optionee the
right or privilege of accepting the offer and &uying the property on certain ter!s.((

n the other hand,

hand, a contract,
contract, like a contract
contract to sell, involves
involves the !eet
!eeting
ing of !ind
!inds
s &etw
&etween
een two
persons where&y one &inds hi!self, with respect to the other, to give so!ething or to render so!e
service. (- Contra
Contracts
cts,, in genera
general,
l, are
are per
perfec
fected
ted &y !ere
!ere conconsen t,( wh
sent, which
ich is !a
!anif
nifest
ested
ed &y the
!eeting of the offer and the acceptance upon the thing and the cause which are to constitute the
contract. The offer !ust &e certain and the acceptance a&solute.(

3-6 5o, the !oney paid &y petitioner was not earnest !oney &ut option !oney. /=arnest !oney/
and /option !oney/ are not the sa!e &ut distinguished thus0 3a6 earnest !oney is part of the
purchase price, while option !oney is the !oney given as a distinct consideration for an option
contract0 3&6 earnest !oney given only where there is already a sale, while option !oney applies to
a sale not yet perfected0 and, 3c6 when earnest !oney is given, the &uyer is &ound to pay the
&alance, while when the would%&e &uyer gives option !oney, he is not re>uired to &uy, ( &ut !ay
even forfeit it depending on the ter!s of the option.

 There is nothing in the Receipt which indicates that the P-,. was part of the purchase price.
9oreover, it was not shown that there was a perfected sale &etween the parties where earnest
!oney was given. ?inally, when petitioner gave
gave the /earnest !oney/ the Receipt did not reveal that
she was &ound to pay the &alance of the purchase price. <n fact, she could even forfeit the !oney
given if the ter!s of the option were not !et. Thus, the P-,. could only &e !oney given as
consideration for the option contract. ?inally, the Receipt provided for a period within which the

option to &uy was to &e e8ercised, i.e., /wit

/within
hin ten 3(6 days/ fro! ( )uly (*+.
n or &efore ( August (*+, the last day of the option period, no affir!ative or clear !anifestat
!anifestation
ion
was
wa s !ade
!ade &y petiti
petitione
onerr to ac
accep
ceptt the offer.
offer. Certa
Certainl
inly,
y, the
there
re wa
wass no con
concur
curren
rence
ce of pri
privat
vate
e
resp
respon
onde
dent
nt spou
spouse
ses@
s@ offe
offerr an
andd pe
peti
titi
tion
oner
er@s
@s acce
accept
ptan
ance
ce th
ther
ereo
eoff with
within
in the
the opti
option
on peri
period
od..
Conse>uently, there was no perfected contract to sell &etween the parties.

n (( August (*+ the option period e8pired and the e8clusive right of petitioner to &uy the
ceased.-"R")%R", the petition is "N*". The
property of respondent spouses ceased.-"R")%R",  The decision of the
Court of Appeals ordering the Register of Deeds of 9akati City to lift the adverse clai! and such
other encu!&rances petitioners Lourdes ng Li!son !ay have filed or caused to &e annotated on
 TCT 5o. $%+1++ is  A))*R#", with the #%*)*CAT*%N that the award of no!inal and e8e!plary
da!ages as well as attorney@s fees is  "L"T".