1.

Almendra vs IAC

Facts:

 This is a petition for review on certiorari of the then Intermediate Appellate Court's decision and resolution
denying the motion for reconsideration of said decision which upheld the validity of three (3) deeds of sale
of real properties by a mother in favor of two of her children in total reversal of the decision the lower court.
 The mother, Aleja Ceno, was first married to Juanso Yu Book with whom she had three children named
Magdaleno, Melecia and Bernardina, all surnamed Ceno. Sometime in the 1920's, Juanso Yu Book took his
family to China where he eventually died. Aleja and her daughter Bernardina later returned to the
Philippines.
 During said marriage, Aleja acquired a parcel of land which she declared in her name under Tax Declaration
No. 11500.
 After Juanso Yu Book's death, Bernardina filed against her mother a case for the partition of the said
property in the then Court of First Instance of Leyte.

 1. Declaring plaintiff Bernardina C. Ojeda as owner and entitled to the possession of Lot No. 6354 as
described in the sketch found on page 44 of the record;

2. Declaring said plaintiff as owner and entitled to the possession of Lot 6353 as described in the sketch,
without prejudice to whatever may be the rights thereto of her sister Melecia Ceno who is said to be
presently in China;

3. Declaring defendant Aleja C. Almendra as owner and entitled to the possession of Lot No. 6366 as
described in the sketch found on page 44 of the record;

4. Declaring said defendant also as owner and entitled to the possession of Lot No. 6352 as described in the
sketch, subject to whatever may be the rights thereto of her son Magdaleno Ceno who is said to be
presently in China.

 Meanwhile, Aleja married Santiago Almendra with whom she had four children named Margarito, Angeles,
Roman and Delia. During said marriage Aleja and Santiago acquired a 59,196-square-meter parcel of land in
Cagbolo, Abuyog, Leyte. Original Certificate of Title No. 10094 was issued therefor in the name of Santiago
Almendra married to Aleja Ceno and it was declared for tax purposes in his name.
 In addition to said properties, Aleja inherited from her father, Juan Ceno, a 16,000-square-meter parcel of
land also in Cagbolo. For his part, her husband Santiago inherited from his mother Nicolasa Alvero, a 164-
square-meter parcel of residential land located in Nalibunan, Abuyog, Leyte.

 While Santiago was alive, he apportioned all these properties among Aleja's children in the Philippines,
including Bernardina, who, in turn, shared the produce of the properties with their parents. After Santiago's
death, Aleja sold to her daughter, Angeles Almendra, for P2,000 two parcels of land more particularly
described in the deed of sale dated August 10, 1973 .
 On December 26, 1973, Aleja sold to her son, Roman Almendra, also for P2,000 a parcel of land described
in the deed of sale as located in Cagbulo (sic), Abuyog, Leyte
 On the same day, Aleja sold to Angeles and Roman again for P2,000 yet another parcel of land described in
the deed of sale
 Aleja died on May 7, 1975. On January 21, 1977 Margarito, Delia and Bernardina filed a complaint against
Angeles and Roman for the annulment of the deeds of sale in their favor, partition of the properties subjects
therein and accounting of their produce.
 From China, their sister Melecia signed a special power of attorney in favor of Bernardina. Magdaleno, who
was still in China, was impleaded as a defendant in the case and summons by publication was made on him.
 Later, the plaintiffs informed the court that they had received a document in Chinese characters which
purportedly showed that Magdaleno had died.
 The defendants appealed to the then Intermediate Appellate Court which, on February 20, 1986 rendered a
decision finding that, in nullifying the deeds of sale in question, the lower court totally disregarded the
testimony of the notary public confirming the authenticity of the signatures of Aleja on said deeds and the
fact that Angeles and Roman actually paid their mother the amounts stipulated in the contracts.

Issue: Whether or not

Facts:

 Eduardo Mendoza (Mendoza) was the registered owner of a two hundred square meter parcel of land
situated in Barrio San Bartolome, Caloocan, covered by and described in Transfer Certificate of Title No.
329509 of the Registry of Deeds of Quezon City.
 On April 18, 1985, Mendoza mortgaged the parcel of land to the Meralco Employees Savings and Loan
Association (MESALA) to secure a loan in the amount of P81,700.00. The mortgage was duly annotated on
the title as Primary Entry No. 2872 on April 23, 1985.
 On July 11, 1987, Mendoza executed a Deed of Sale with Assumption of Mortgage over the parcel of land
together with all the improvements thereon (hereinafter referred to as the property) in favor of petitioners
in consideration of P50,000.00. It is stated in the deed that petitioners bound themselves to assume
payment of the balance of the mortgage indebtedness of Mendoza to MESALA
 On December 7, 1987, Mendoza, without the knowledge of petitioners, mortgaged the same property to
MESALA to secure a loan in the amount of P758,000.00. On even date, the second mortgage was duly
annotated as Primary Entry No. 8697 on Mendozas title.
 On November 28, 1991, Mendoza executed a Deed of Absolute Sale over still the same property in favor of
respondents in consideration of P50,000.00. The sale was duly annotated as Primary Entry No. 1005 on
Mendozas title. On even date, MESALA issued a Cancellation of Mortgage acknowledging that for sufficient
and valuable consideration which it received from Mendoza, it was cancelling and releasing the real estate
mortgage over the property. The cancellation was annotated as Primary Entry No. 1003 on Mendozas title.
 Getting wind of the sale of the property to respondents, petitioners filed on July 16, 1993 a complaint for
annulment of deed of absolute sale and transfer certificate of title with recovery of possession and damages
against Mendoza, his wife Sally Mendoza, and respondents before the Quezon City RTC.
 In their complaint, petitioners alleged that the spouses Mendoza maliciously sold to respondents the
property which was priorly sold to them and that respondents acted in bad faith in acquiring it, the latter
having had knowledge of the existence of the Deed of Absolute Sale with Assumption of Mortgage between
them (petitioners) and Mendoza.

Issue: Whether or not the sale executed by Eduardo Mendoza in favor of private respondents was simulated and
therefore null and void.

Held:

 NO
 Simulation occurs when an apparent contract is a declaration of a fictitious will, deliberately made by
agreement of the parties, in order to produce, for the purpose of deception, the appearance of a juridical
act which does not exist or is different from that which was really executed. Its requisites are: a) an
outward declaration of will different from the will of the parties; b) the false appearance must have been
intended by mutual agreement; and c) the purpose is to deceive third persons.
 The basic characteristic then of a simulated contract is that it is not really desired or intended to produce
legal effects or does not in any way alter the juridical situation of the parties
 The cancellation of Mendozas certificate of title over the property and the procurement of one in its stead in
the name of respondents, which acts were directed towards the fulfillment of the purpose of the contract,
unmistakably show the parties intention to give effect to their agreement. The claim of simulation does not
thus lie.
 3. Mapalo vs Mapalo

Facts:

 The spouses Miguel Mapalo and Candida Quiba, simple illiterate farmers, were registered owners, with
Torrens title certificate O.C.T. No. 46503, of a 1,635-square-meter residential land in Manaoag, Pangasinan.
 Said spouses-owners, out of love and affection for Maximo Mapalo — a brother of Miguel who was about to
get married — decided to donate the eastern half of the land to him. O.C.T. No. 46503 was delivered.
 As a result, however, they were deceived into signing, on October 15, 1936, a deed of absolute sale over
the entire land in his favor. Their signatures thereto were procured by fraud, that is, they were made to
believe by Maximo Mapalo and by the attorney who acted as notary public who "translated" the document,
that the same was a deed of donation in Maximo's favor covering one-half (the eastern half) of their land.
 Although the document of sale stated a consideration of Five Hundred (P500.00) Pesos, the aforesaid
spouses did not receive anything of value for the land.
 Following the execution of the afore-stated document, the spouses Miguel Mapalo and Candida Quiba
immediately built a fence of permanent structure in the middle of their land segregating the eastern portion
from its western portion.
 Not known to them, meanwhile, Maximo Mapalo, on March 15, 1938, registered the deed of sale in his favor
and obtained in his name Transfer Certificate of Title No. 12829 over the entire land. Thirteen years later on
October 20, 1951, he sold for P2,500.00 said entire land in favor of Evaristo, Petronila Pacifico and Miguel all
surnamed Narciso. The sale to the Narcisos was in turn registered on November 5, 1951 and Transfer
Certificate of Title No. 11350 was issued for the whole land in their names.
 The Narcisos took possession only of the eastern portion of the land in 1951, after the sale in their favor
was made. On February 7, 1952 they filed suit in the Court of First Instance of Pangasinan (Civil Case No.
1191) to be declared owners of the entire land, for possession of its western portion; for damages; and for
rentals. It was brought against the Mapalo spouses as well as against Floro Guieb and Rosalia Mapalo Guieb
who had a house on the western part of the land with the consent of the spouses Mapalo and Quiba.
 The Mapalo spouses filed their answer with a counterclaim on March 17, 1965, seeking cancellation of the
Transfer Certificate of Title of the Narcisos as to the western half of the land, on the grounds that their
(Mapalo spouses) signatures to the deed of sale of 1936 was procured by fraud and that the Narcisos were
buyers in bad faith.

Issue: Whether or not the sale is contract of sale lacks consideration.

Held:

 YES
 Accordingly, since the deed of sale of 1936 is governed by the Old Civil Code, it should be asked whether its
case is one wherein there is no consideration, or one with a statement of a false consideration. If the
former, it is void and inexistent; if the latter, only voidable, under the Old Civil Code. As observed earlier,
the deed of sale of 1936 stated that it had for its consideration Five Hundred (P500.00) Pesos. In fact,
however, said consideration was totally absent.
 A contract of purchase and sale is null and void and produces no effect whatsoever where the same is
without cause or consideration in that the purchase price which appears thereon as paid has in fact never
been paid by the purchaser to the vendor.
 4. Swedish Match vs CA

Facts:

 Swedish Match, AB (hereinafter SMAB) is a corporation organized under the laws of Sweden not doing
business in the Philippines. SMAB, however, had three subsidiary corporations in the Philippines, all
organized under Philippine laws, to wit: Phimco Industries, Inc. (Phimco), Provident Tree Farms, Inc., and
OTT/Louie (Phils.), Inc.
 Sometime in 1988, STORA, the then parent company of SMAB, decided to sell SMAB of Sweden and the
latters worldwide match, lighter and shaving products operation to Eemland Management Services, now
known as Swedish Match NV of Netherlands, (SMNV), a corporation organized and existing under the laws
of Netherlands. STORA, however, retained for itself the packaging business.
 SMNV initiated steps to sell the worldwide match and lighter businesses while retaining for itself the shaving
business. SMNV adopted a two-pronged strategy, the first being to sell its shares in Phimco Industries, Inc.
and a match company in Brazil, which proposed sale would stave-off defaults in the loan covenants of SMNV
with its syndicate of lenders. The other move was to sell at once or in one package all the SMNV companies
worldwide which were engaged in match and lighter operations thru a global deal (hereinafter, global deal).
 Ed Enriquez (Enriquez), Vice-President of Swedish Match Sociedad Anonimas (SMSA)the management
company of the Swedish Match groupwas commissioned and granted full powers to negotiate by SMNV,
with the resulting transaction, however, made subject to final approval by the board. Enriquez was held
under strict instructions that the sale of Phimco shares should be executed on or before 30 June 1990, in
view of the tight loan covenants of SMNV. Enriquez came to the Philippines in November 1989 and informed
the Philippine financial and business circles that the Phimco shares were for sale.
 Several interested parties tendered offers to acquire the Phimco shares, among whom were the AFP
Retirement and Separation Benefits System, herein respondent ALS Management & Development
Corporation and respondent Antonio Litonjua (Litonjua), the president and general manager of ALS.
 In his letter dated 3 November 1989, Litonjua submitted to SMAB a firm offer to buy all of the latters shares
in Phimco and all of Phimcos shares in Provident Tree Farm, Inc. and OTT/Louie (Phils.), Inc. for the sum of
P750,000,000.00
 Through its Chief Executive Officer, Massimo Rossi (Rossi), SMAB, in its letter dated 1 December 1989,
thanked respondents for their interest in the Phimco shares. Rossi informed respondents that their price
offer was below their expectations but urged them to undertake a comprehensive review and analysis of the
value and profit potentials of the Phimco shares, with the assurance that respondents would enjoy a certain
priority although several parties had indicated their interest to buy the shares
 Thereafter, an exchange of correspondence ensued between petitioners and respondents regarding the
projected sale of the Phimco shares. In his letter dated 21 May 1990, Litonjua offered to buy the disputed
shares, excluding the lighter division for US$30.6 million, which per another letter of the same date was
increased to US$36 million.[7] Litonjua stressed that the bid amount could be adjusted subject to availability
of additional information and audit verification of the company finances.
 Responding to Litonjuas offer, Rossi sent his letter dated 11 June 1990, informing the former that ALS
should undertake a due diligence process or pre-acquisition audit and review of the draft contract for the
Match and Forestry activities of Phimco at ALS convenience. However, Rossi made it clear that at the
completion of the due diligence process, ALS should submit its final offer in US dollar terms not later than
30 June 1990, for the shares of SMAB corresponding to ninety-six percent (96%) of the Match and Forestry
activities of Phimco. Rossi added that in case the global deal presently under negotiation for the Swedish
Match Lights Group would materialize, SMAB would reimburse up to US$20,000.00 of ALS costs related to
the due diligence process
 Litonjua in a letter dated 18 June 1990, expressed disappointment at the apparent change in SMABs
approach to the bidding process. He pointed out that in their 4 June 1990 meeting, he was advised that one
final bidder would be selected from among the four contending groups as of that date and that the decision
would be made by 6 June 1990. He criticized SMABs decision to accept a new bidder who was not among
those who participated in the 25 May 1990 bidding. He informed Rossi that it may not be possible for them
 to submit their final bid on 30 June 1990, citing the advice to him of the auditing firm that the financial
statements would not be completed until the end of July. Litonjua added that he would indicate in their final
offer more specific details of the payment mechanics and consider the possibility of signing a conditional
sale at that time
 In a letter dated 3 July 1990, Rossi informed Litonjua that on 2 July 1990, they signed a conditional contract
with a local group for the disposal of Phimco. He told Litonjua that his bid would no longer be considered
unless the local group would fail to consummate the transaction on or before 15 September1990.
 Apparently irked by SMABs decision to junk his bid, Litonjua promptly responded by letter dated 4 July
1990. Contrary to his prior manifestations, he asserted that, for all intents and purposes, the US$36 million
bid which he submitted on 21 May 1990 was their final bid based on the financial statements for the year
1989. He pointed out that they submitted the best bid and they were already finalizing the terms of the
sale. He stressed that they were firmly committed to their bid of US$36 million and if ever there would be
adjustments in the bid amount, the adjustments were brought about by SMABs subsequent disclosures and
validated accounts, such as the aspect that only ninety-six percent (96%) of Phimco shares was actually
being sold and not one-hundred percent (100%).
 Shortly thereafter, Litonjua sent a letter expressing his objections to the totally new set of terms and
conditions for the sale of the Phimco shares. He emphasized that the new offer constituted an attempt to
reopen the already perfected contract of sale of the shares in his favor. He intimated that he could not
accept the new terms and conditions contained therein
 respondents, as plaintiffs, filed before the Regional Trial Court (RTC) of Pasig a complaint for specific
performance with damages, with a prayer for the issuance of a writ of preliminary injunction, against
defendants, now petitioners.

Issue: Whether or not there has been no meeting of the minds as to price in this case.

Held:

 NO
 Quite obviously, Litonjuas letter dated 21 May 1990, proposing the acquisition of the Phimco shares for
US$36 million was merely an offer. This offer, however, in Litonjuas own words, is understood to be
subject to adjustment on the basis of an audit of the assets, liabilities and net worth of Phimco and its
subsidiaries and on the final negotiation between ourselves.
 Litonjua repeatedly stressed in his letters that they would not be able to submit their final bid by 30
June 1990. With indubitable inconsistency, respondents later claimed that for all intents and purposes,
the US$36 million was their final bid. If this were so, it would be inane for Litonjua to state, as he did,
in his letter dated 28 June 1990 that they would be in a position to submit their final bid only on 17 July
1990. The lack of a definite offer on the part of respondents could not possibly serve as the basis of
their claim that the sale of the Phimco shares in their favor was perfected, for one essential element of
a contract of sale was obviously wantingthe price certain in money or its equivalent. The price must be
certain, otherwise there is no true consent between the parties. There can be no sale without a price.
Quite recently, this Court reiterated the long-standing doctrine that the manner of payment of the
purchase price is an essential element before a valid and binding contract of sale can exist since the
agreement on the manner of payment goes into the price such that a disagreement on the manner of
payment is tantamount to a failure to agree on the price.
 Granting arguendo, that the amount of US$36 million was a definite offer, it would remain as a mere
offer in the absence of evidence of its acceptance. To produce a contract, there must be acceptance,
which may be express or implied, but it must not qualify the terms of the offer
 It is dramatically clear that the US$36 million was not the actual price agreed upon but merely a
preliminary offer which was subject to adjustment after the conclusion of the audit of the company
finances. Respondent’s failure to submit their final bid on the deadline set by petitioners prevented the
perfection of the contract of sale.
 5. Adelfa Properties vs CA

Facts:

 Herein private respondents and their brothers, Jose and Dominador Jimenez, were the registered co-owners
of a parcel of land consisting of 17,710 square meters, covered by Transfer Certificate of Title (TCT) No.
309773, situated in Barrio Culasi, Las Piñas, Metro Manila.
 On July 28, 1988, Jose and Dominador Jimenez sold their share consisting of one-half of said parcel of land,
specifically the eastern portion thereof, to herein petitioner pursuant to a "Kasulatan sa Bilihan ng Lupa."
Subsequently, a "Confirmatory Extrajudicial Partition Agreement" was executed by the Jimenezes, wherein
the eastern portion of the subject lot, with an area of 8,855 square meters was adjudicated to Jose and
Dominador Jimenez, while the western portion was allocated to herein private respondents.
 Thereafter, herein petitioner expressed interest in buying the western portion of the property from private
respondents. Accordingly, on November 25, 1989, an "Exclusive Option to Purchase" was executed between
petitioner and private respondents, under the following terms and conditions: X X X (2) The sum of
P50,000.00 which we received from ADELFA PROPERTIES, INC. as an option money shall be credited as
partial payment upon the consummation of the sale and the balance in the sum of TWO MILLION EIGHT
HUNDRED SIX THOUSAND ONE HUNDRED FIFTY PESOS (P2,806,150.00) to be paid on or before November
30, 1989
 Considering, however, that the owner's copy of the certificate of title issued to respondent Salud Jimenez
had been lost, a petition for the re-issuance of a new owner's copy of said certificate of title was filed in
court through Atty. Bayani L. Bernardo, who acted as private respondents' counsel. Eventually, a new
owner's copy of the certificate of title was issued but it remained in the possession of Atty. Bernardo until he
turned it over to petitioner Adelfa Properties, Inc.
 Before petitioner could make payment, it received summons on November 29, 1989, together with a copy of
a complaint filed by the nephews and nieces of private respondents against the latter, Jose and Dominador
Jimenez, and herein petitioner in the Regional Trial Court of Makati, docketed as Civil Case No. 89-5541, for
annulment of the deed of sale in favor of Household Corporation and recovery of ownership of the property
covered by TCT No. 309773.
 As a consequence, in a letter dated November 29, 1989, petitioner informed private respondents that it
would hold payment of the full purchase price and suggested that private respondents settle the case with
their nephews and nieces. Respondent Salud Jimenez refused to heed the suggestion of petitioner and
attributed the suspension of payment of the purchase price to "lack of word of honor."
 On December 7, 1989, petitioner caused to be annotated on the title of the lot its option contract with
private respondents, and its contract of sale with Jose and Dominador Jimenez
 On December 14, 1989, private respondents sent Francisca Jimenez to see Atty. Bernardo, in his capacity as
petitioner's counsel, and to inform the latter that they were cancelling the transaction. In turn, Atty.
Bernardo offered to pay the purchase price provided that P500,000.00 be deducted therefrom for the
settlement of the civil case. This was rejected by private respondents.
 On February 23, 1990, the Regional Trial Court of Makati dismissed Civil Case No. 89-5541. Thus, on
February 28, 1990, petitioner caused to be annotated anew on TCT No. 309773 the exclusive option to
purchase as Entry No. 4442-4.
 On the same day, February 28, 1990, private respondents executed a Deed of Conditional Sale in favor of
Emylene Chua over the same parcel of land for P3,029,250, of which P1,500,000.00 was paid to private
respondents on said date, with the balance to be paid upon the transfer of title to the specified one-half
portion.
 On April 16, 1990, Atty. Bernardo wrote private respondents informing the latter that in view of the
dismissal of the case against them, petitioner was willing to pay the purchase price, and he requested that
the corresponding deed of absolute sale be executed. This was ignored by private respondents.
 On July 27, 1990, private respondents' counsel sent a letter to petitioner enclosing therein a check for
P25,000.00 representing the refund of fifty percent of the option money paid under the exclusive option to
purchase. Private respondents then requested petitioner to return the owner's duplicate copy of the
 certificate of title of respondent Salud Jimenez. Petitioner failed to surrender the certificate of title, hence
private respondents filed Civil Case No. 7532 in the Regional Trial Court of Pasay City
 The trial court rendered judgment therein on September 5, 1991 holding that the agreement entered into
by the parties was merely an option contract, and declaring that the suspension of payment by herein
petitioner constituted a counter-offer which, therefore, was tantamount to a rejection of the option.

Issue: Whether or not the "Exclusive Option to Purchase" executed between petitioner Adelfa Properties, Inc. and
private respondents Rosario Jimenez-Castañeda and Salud Jimenez is an option contract

Held:

 NO
 A perusal of the contract in this case, as well as the oral and documentary evidence presented by the
parties, readily shows that there is indeed a concurrence of petitioner's offer to buy and private
respondents' acceptance thereof.
 The records also show that private respondents accepted the offer of petitioner to buy their property under
the terms of their contract. At the time petitioner made its offer, private respondents suggested that their
transfer certificate of title be first reconstituted, to which petitioner agreed. As a matter of fact, it was
petitioner's counsel, Atty. Bayani L. Bernardo, who assisted private respondents in filing a petition for
reconstitution. After the title was reconstituted, the parties agreed that petitioner would pay either in cash
or manager's check the amount of P2,856,150.00 for the lot. Petitioner was supposed to pay the same on
November 25, 1989, but it later offered to make a down payment of P50,000.00, with the balance of
P2,806,150.00 to be paid on or before November 30, 1989. Private respondents agreed to the counter-offer
made by petitioner. As a result, the so-called exclusive option to purchase was prepared by petitioner and
was subsequently signed by private respondents, thereby creating a perfected contract to sell between
them.
 6. Atkin, Kroll and Co. Inc. vs Cua Hian Tek

Facts:

 For its failure to deliver one thousand cartons of sardines, which it had sold to B. Cua Hian Tek, petitioner
was sued, and after trial was ordered by the Manila court of first instance to Pay damages, which on appeal
was reduced by the Court of Appeals to P3,240.15 representing unrealized profits.
 There was no such contract of sale, says petitioner, but only an option to buy, which was not enforceable
for lack of consideration because in accordance with Art. 1479 of the New Civil Code "an accepted
unilatateral promise to buy or to sell a determinate thing for a price certain is binding upon the promisor if
the promise is supported by a consideration distinct from the price.
 The Court of first instance and the Court of Appeals1 found that B. Cua Hian Tek accepted the offer
unconditionally and delivered his letter of acceptance Exh. B on September 21, 1951. However, due to
shortage of catch of sardines by the packers in California, Atkins Kroll & Co., failed to deliver the
commodities it had offered for sale. There are other details to which reference shall not be made, as they
touch the question whether the acceptance had been handed on time; and on that issue of Court of Appeals
definitely found for plaintiff.
 Anyway, in presenting its case before this Court petitioner does not dispute such timely acceptance. It
merely raises the point that the acceptance only created an option, which, lacking consideration, had no
obligatory force.

Issue: Whether there was merely an offer of option

Held:

 NO
 An option is unilateral: a promise to sell3 at the price fixed whenever the offeree should decide to exercise
his option within the specified time. After accepting the promise and before he exercises his option, the
holder of the option is not bound to buy. He is free either to buy or not to later. In this case, however, upon
accepting herein petitioner's offer a bilateral promise to sell and to buy ensued, and the respondent ipso
facto assumed the obligations of a purchaser. He did not just get the right subsequently to buy or not to
buy. It was not a mere option then; it was bilateral contract of sale.
 7. Sanchez vs Rigos

Facts:

 The record shows that, on April 3, 1961, plaintiff Nicolas Sanchez and defendant Severina Rigos executed
an instrument entitled "Option to Purchase," whereby Mrs. Rigos "agreed, promised and committed ... to
sell" to Sanchez the sum of P1,510.00, a parcel of land situated in the barrios of Abar and Sibot,
municipality of San Jose, province of Nueva Ecija, and more particularly described in Transfer Certificate of
Title No. NT-12528 of said province, 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 of the sum of Pl,510.00,
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.
 After the filing of defendant's answer — admitting some allegations of the complaint, denying other
allegations thereof, and alleging, as special defense, that the contract between the parties "is 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" — on February 11, 1964, both parties, assisted by their respective counsel, jointly
moved for a judgment on the pleadings. Accordingly, on February 28, 1964, the lower court rendered
judgment for Sanchez, ordering Mrs. Rigos to accept the sum judicially consigned by him and to execute, in
his favor, the requisite deed of conveyance. Mrs. Rigos was, likewise, sentenced to pay P200.00, as
attorney's fees, and other costs. Hence, this appeal by Mrs. Rigos.
 In his complaint, plaintiff alleges 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, copy of
which was annexed to said pleading as Annex A thereof and is quoted on the margin.1 Hence, plaintiff
maintains that the promise contained in the contract is "reciprocally demandable," pursuant to the first
paragraph of said Article 1479. Although defendant had really "agreed, promised and committed" herself to
sell the land to the plaintiff, it is not true that the latter had, in turn, "agreed and committed himself " to
buy said property.

Issue: Whether or not the promise contained in the contract is "reciprocally demandable," pursuant to the first
paragraph of said Article 1479

Held:

 NO
 The option did not impose upon plaintiff the obligation to purchase defendant's property. Annex A is not
a "contract to buy and sell." It merely granted plaintiff an "option" to buy. And both parties so
understood it, as indicated by the caption, "Option to Purchase," given by them to said instrument.
Under the provisions thereof, the defendant "agreed, promised and committed" herself to sell the land
therein described to the plaintiff for P1,510.00, 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.
 There is no question that under article 1479 of the new Civil Code "an option to sell," or "a promise to
buy or to sell," as used in said article, to be valid must be "supported by a consideration distinct from
the price." This is clearly inferred from the context of said article that a unilateral promise to buy or to
sell, even if accepted, is only binding if supported by consideration. In other words, "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 the same is not supported by any consideration. It is
not disputed that the option is without consideration. It can therefore be withdrawn notwithstanding
the acceptance of it by appellee.
 8. Ang Yu Asuncion vs CA

Facts:

 On July 29, 1987 a Second Amended Complaint for Specific Performance was filed by Ang Yu Asuncion and
Keh Tiong, et al., against Bobby Cu Unjieng, Rose Cu Unjieng and Jose Tan before the Regional Trial Court,
Branch 31, Manila in Civil Case No. 87-41058, alleging, among others, that plaintiffs are tenants or lessees
of residential and commercial spaces owned by defendants described as Nos. 630-638 Ongpin Street,
Binondo, Manila; that they have occupied said spaces since 1935 and have been religiously paying the
rental and complying with all the conditions of the lease contract; that on several occasions before October
9, 1986, defendants informed plaintiffs that they are offering to sell the premises and are giving them
priority to acquire the same; that during the negotiations, Bobby Cu Unjieng offered a price of P6-million
while plaintiffs made a counter offer of P5-million; that plaintiffs thereafter asked the defendants to put their
offer in writing to which request defendants acceded; that in reply to defendant's letter, plaintiffs wrote
them on October 24, 1986 asking that they specify the terms and conditions of the offer to sell; that when
plaintiffs did not receive any reply, they sent another letter dated January 28, 1987 with the same request;
that since defendants failed to specify the terms and conditions of the offer to sell and because of
information received that defendants were about to sell the property, plaintiffs were compelled to file the
complaint to compel defendants to sell the property to them.
 The trial court found that defendants' offer to sell was never accepted by the plaintiffs for the reason that
the parties did not agree upon the terms and conditions of the proposed sale, hence, there was no contract
of sale at all.
 On November 15, 1990, while CA-G.R. CV No. 21123 was pending consideration by this Court, the Cu
Unjieng spouses executed a Deed of Sale (Annex D, Petition) transferring the property in question to herein
petitioner Buen Realty and Development Corporation
 As a consequence of the sale, TCT No. 105254/T-881 in the name of the Cu Unjieng spouses was cancelled
and, in lieu thereof, TCT No. 195816 was issued in the name of petitioner on December 3, 1990
 On July 1, 1991, petitioner as the new owner of the subject property wrote a letter to the lessees
demanding that the latter vacate the premises.
 On July 16, 1991, the lessees wrote a reply to petitioner stating that petitioner brought the property subject
to the notice of lis pendens regarding Civil Case No. 87-41058 annotated on TCT No. 105254/T-881 in the
name of the Cu Unjiengs.
 On 04 December 1991, the appellate court, on appeal to it by private respondent, set aside and declared
without force and effect the above questioned orders of the court a quo.

Issue: Whether or not Buen Realty can be held bound by the writ of execution by virtue of the notice of lis pendens,
carried over on TCT No. 195816 issued in the name of Buen Realty, at the time of the latter's purchase of the
property on 15 November 1991 from the Cu Unjiengs.

Held:

 NO
 Right of first refusal is not a perfected contract of sale under Article 1458 of the Civil Code
 In the law on sales, he so-called “right of first refusal” is an innovative juridical relation. Needless to point
out, it cannot be deemed a perfected contract of sale under Article 1458 of the Civil Code.
 In a right of first refusal, while the object might be made determinate, the exercise of the right, however,
would be dependent not only on the grantor's eventual intention to enter into a binding juridical relation
with another but also on terms, including the price, that obviously are yet to be later firmed up. Prior
thereto, it can at best be so described as merely belonging to a class of preparatory juridical relations
governed not by contracts (since the essential elements to establish the vinculum juris would still be
indefinite and inconclusive) but by, among other laws of general application, the pertinent scattered
provisions of the Civil Code on human conduct.
 The final judgment in Civil Case No. 87-41058, it must be stressed, has merely accorded a "right of first
refusal" in favor of petitioners. The consequence of such a declaration entails no more than what has
heretofore been said. In fine, if, as it is here so conveyed to us, petitioners are aggrieved by the failure of
private respondents to honor the right of first refusal, the remedy is not a writ of execution on the
judgment, since there is none to execute, but an action for damages in a proper forum for the purpose.
 9. Bible Baptist Church vs CA

Facts:

On June 7, 1985, the Bible Baptist Church (petitioner Baptist Church) entered into a contract of lease with Mr. &
Mrs. Elmer Tito Medina Villanueva (respondent spouses Villanueva). The latter are the registered owners of a
property located at No. 2436 (formerly 2424) Leon Guinto St., Malate, Manila. The pertinent stipulations in the lease
contract were:

1. That the LESSOR lets and leases to the LESSEE a store space known as 2424 Leon Guinto Sr. St.,
Malate, Manila, of which property the LESSOR is the registered owner in accordance with the Land
Registration Act.

2. That the lease shall take effect on June 7, 1985 and shall be for the period of Fifteen (15) years.

3. That LESSEE shall pay the LESSOR within five (5) days of each calendar month, beginning Twelve (12)
months from the date of this agreement, a monthly rental of Ten Thousand Pesos (P10,000.00)
Philippine Currency, plus 10% escalation clause per year starting on June 7, 1988.

4. That upon signing of the LEASE AGREEMENT, the LESSEE shall pay the sum of Eighty Four Thousand
Pesos (P84,000.00) Philippine Currency. Said sum is to be paid directly to the Rural Bank, Valenzuela,
Bulacan for the purpose of redemption of said property which is mortgaged by the LESSOR.

5. That the title will remain in the safe keeping of the Bible Baptist Church, Malate, Metro Manila until the
expiration of the lease agreement or the leased premises be purchased by the LESSEE, whichever
comes first. In the event that the said title will be lost or destroyed while in the possession of the
LESSEE, the LESSEE agrees to pay all costs involved for the re-issuance of the title.

6. That the leased premises may be renovated by the LESSEE, to the satisfaction of the LESSEE to be fit
and usable as a Church.

7. That the LESSOR will remove all other tenants from the leased premises no later than March 15, 1986.
It is further agreed that if those tenants are not vacated by June 1, 1986, the rental will be lowered by
the sum of Three Thousand Pesos (P3,000.00) per month until said tenants have left the leased
premises.

8. That the LESSEE has the option to buy the leased premises during the Fifteen (15) years of the lease. If
the LESSEE decides to purchase the premises the terms will be: A) A selling Price of One Million Eight
Hundred Thousand Pesos (P1.8 million), Philippine Currency. B) A down payment agreed upon by both
parties. C) The balance of the selling price may be paid at the rate of One Hundred Twenty Thousand
Pesos (P120,000.00), Philippine Currency, per year.

Issue: Whether or not option to buy granted to the petitioner Baptist Church under its contract of lease with the
Villanuevas did not have a consideration and, therefore, did not bind the latter

Held:

 YES
 Petitioners cannot insist that the P84,000 they paid in order to release the Villanuevas property from the
mortgage should be deemed the separate consideration to support the contract of option. It must be
pointed out that said amount was in fact apportioned into monthly rentals spread over a period of one year,
at P7,000 per month. Thus, for the entire period of June 1985 to May 1986, petitioner Baptist Churchs
monthly rent had already been paid for, such that it only again commenced paying the rentals in June 1986.
This is shown by the testimony of petitioner Pastor Belmonte where he states that the P84,000 was advance
rental equivalent to monthly rent of P7,000 for one year, such that for the entire year from 1985 to 1986
the Baptist Church did not pay monthly rent.

 To summarize the rules, an option contract needs to be supported by a separate consideration. The
consideration need not be monetary but could consist of other things or undertakings. However, if the
consideration is not monetary, these must be things or undertakings of value, in view of the onerous nature
 of the contract of option. Furthermore, when a consideration for an option contract is not monetary, said
consideration must be clearly specified as such in the option contract or clause.

 This Court also notes that in the present case both the Regional Trial Court and the Court of Appeals agree
that the option was not founded upon a separate and distinct consideration and that, hence, respondents
Villanuevas cannot be compelled to sell their property to petitioner Baptist Church.