DIGEST exercise a right and not to discharge an

obligation.—It has been previously held that Heirs of Luis Bacus vs Court of Appeals,
MARIANO V. CA consignation is not required to preserve the Spouses Faustino Duray and Victoriana
222 SCRA 736 right of repurchase as a mere tender of Duray
FACTS: payment is enough if made on time as a basis
for an action to compel the vendee a retro to G.R.No. 127695, 03December2001
Gosengfiao owned a parcel of land. During his resell the property; no subsequent
lifetime, he obtained a loan secured by a REM consignation was necessary to entitle private FACTS:
over the land. Upon his death, he was respondents to such reconveyance.
survived by his wife and children. The loan On 1984 Luis Bacus leased to Faustino Duray
was unpaid and thus, the REM was a parcel of agricultural land with total land
foreclosed. The land was redeemed by the area of 3,002 of square meters, in Cebu. The
mother and later sold the same, together with lease was for six years ending in 1990, the
the other children. Grace knew of the sale and contract contained an option to buy clause.
sought annulment of Under the said option, the lessee had the
the sale. exclusive and irrevocable right to buy 2,000
square meters 5 years from a year after the
HELD: effectivity of the contract, at P200 per square
meter. That rate shall be proportionately
1. The right to redeem is not lost in the adjusted depending on the peso rate against
absence of any written notice of the sale by the US dollar, which at the time of the
the vendors. The 30-day period has not begin execution of the contract was 14 pesos.
to run.
Close to the expiration of the contract Luis
2. The redemption of a co-owner inures to the Bacus died on 1989, after Duray informed the
benefit of all coowners. heirs of Bacus that they are willing and ready
to purchase the property under the option to
3. Consignation; It is not necessary when buy clause.
tender of payment was made to enforce or
The heirs refused to sell, thus Duray filed a the payment. Only upon the Bacus actual performance of one is conditioned upon the
complaint for specific performance against the execution and delivery of the deed of sale simultaneous fulfillment of the other.
heirs of Bacus. He showed that he is ready were they required to pay. Obligations under an option to buy are
and able to meet his obligations under the reciprocal obligations—the performance of
contract with Bacus. The RTC ruled in favor of The Durays did not incur in delay when one obligation is conditioned on the
the Durays and the CA later affirmed the they did not yet deliver the payment nor simultaneous fulfillment of the other
decision. make a consignation before the expiration obligation; Notice of the creditor’s decision to
of the contract. exercise his option to buy need not be
ISSUES: coupled with actual payment of the price, so
In reciprocal obligations, neither party incurs long as this is delivered to the owner of the
Can the heirs of Luis Bacus be compelled to in delay if the other party does not comply or property upon performance of his part of the
sell the portion of the lot under the option to is not ready to comply in a proper manner with agreement; Where the obligation is not yet
buy clause? what is incumbent upon him. Only from the due, consignation in court of the purchase
moment one of the parties fulfills his price is not yet required.—Obligations under
Held: obligation, does delay by the other begin. an option to buy are reciprocal obligations.
HELD The petition is DENIED nad the
Yes, Obligations under an option to buy are decision of the Court of Appeals is The performance of one obligation is
reciprocal obligations. The performance of AFFIRMED. conditioned on the simultaneous
one obligation is conditioned on the fulfillment of the other obligation. In other
simultaneous fulfillment of the other obligation. Obligations and Contracts words, in an option to buy, the payment of
In other words, in an option to buy, the the purchase price by the creditor is
payment of the purchase price by the creditor Terms: contingent upon the execution and
is contingent upon the execution and delivery delivery of a deed of sale by the debtor. In
of the deed of sale by the debtor. Reciprocal Obligations- Those which arise this case, when private respondents opted to
from the same cause, and in which each party buy the property, their obligation was to
When the Durays exercised their option to buy is a debtor and a creditor of the other, such advise petitioners of their decision and their
the property their obligation was to advise the that the obligation of one is dependent upon readiness to pay the price. They were not yet
Bacus of their decision and readiness to pay the obligation of the other. They are to be obliged to make actual payment. Only upon
the price, they were not yet obliged to make performed simultaneously such that the petitioners’ actual execution and delivery of
the deed of sale were they required to pay. As the benefit of all co-owners. In other words, it
earlier stated, the latter was contingent upon will not put an end to the existing state of co-
the former. ownership. Redemption is not a mode of
In Nietes vs. Court of Appeals, 46 SCRA 654 FULL TEXT OF CASES terminating a co-ownership.
(1972), we held that notice of the creditor’s
decision to exercise his option to buy need not G.R. No. 101522. May 28, 1993.* Same; Same; Same; Same; Same;
be coupled with actual payment of the price, Consignation; It is not necessary when tender
so long as this is delivered to the owner of the LEONARDO MARIANO, et.al. vs. HON. of payment was made to enforce or exercise a
property upon performance of his part of the COURT OF APPEALS, et.al. right and not to discharge an obligation.—It
agreement. Consequently, since the has been previously held that consignation is
obligation was not yet due, consignation in Civil Law; Property; Co-ownership; Sale of not required to preserve the right of
court of the purchase price was not yet property owned in common; Right of repurchase as a mere tender of payment is
required. redemption; Notice required to be given to the enough if made on time as a basis for an
co-owners of the sale to a stranger must be in action to compel the vendee a retro to resell
Consignation is the act of depositing the writing.—Respondents have not lost their right the property; no subsequent consignation was
thing due with the court or judicial to redeem, for in the absence of a written necessary to entitle private respondents to
authorities whenever the creditor cannot notification of the sale by the vendors, the 30- such reconveyance.
accept or refuses to accept payment and it day period has not even begun to run.
generally requires a prior tender of NOCON, J.:
payment. In instances, where no debt is Same; Same; Same; Same; Same;
due and owing, consignation is not proper. Redemption by a co-owner inures to the Before Us is a petition foe review of the
benefit of all the other co-owners. decision, dated May 13, 1991 of the Court of
Therefore, petitioners’ contention that private —“Admittedly, as the property in question was Appeals in CA-G.R. CV No. 13122, entitled
respondents failed to comply with their mortgaged by the decedent, a co-ownership Grace Gosiengfiao, et al. v. Leonardo Mariano
obligation under the option to buy because existed among the heirs during the period v. Amparo Gosiengfiao 1 raising as issue the
they failed to actually deliver the purchase given by law to redeem the foreclosed distinction between Article 10882 and Article
price or consign it in court before the contract property. Redemption of the whole property by 16203 of the Civil Code.
expired and before they execute a deed, has a co-owner does not vest in him sole
no leg to stand on. ownership over said property but will inure to
The Court of Appeals summarized the facts as Francisco, Jr., Norma, Lina (represented by dated August 15, 1966 that Amparo, Antonia,
follows: daughter Pinky Rose), and Jacinto. Carlos and Severino were signatories thereto.

It appears on record that the decedent The loan being unpaid, the lot in dispute was Sometime in 1982, plaintiff-appellant Grace
Francisco Gosiengfiao is the registered owner foreclosed by the mortgagee bank and in the Gosiengfiao learned of the sale of said
of a residential lot located at Ugac Sur, foreclosure sale held on December 27, 1963, property by the third-party defendants. She
Tuguegarao, Cagayan, particularly described the same was awarded to the mortgagee bank went to the Barangay Captain and asked for a
as follows, to wit: as the highest bidder. confrontation with defendants Leonardo and
Avelina Mariano to present her claim to said
"The eastern portion of Lot 1351, Tuguegarao On February 7, 1964, third-party defendant property.
Cadastre, and after its segregation now Amparo Gosiengfiao-Ibarra redeemed the
designated as Lot 1351-A, Plan PSD-67391, property by paying the amount of P1,347.89 On November 27, 1982, no settlement having
with an area of 1,1346 square meters." and the balance of P423.35 was paid on been reached by the parties, the Barangay
December 28, 1964 to the mortgagee bank. captain issued a certificate to file action.
and covered by Transfer Certificate of Title
No. T-2416 recorded in the Register of Deeds On September 10, 1965, Antonia Gosiengfiao On December 8, 1982, defendant Leonardo
of Cagayan. on her behalf and that of her minor children Mariano sold the same property to his children
Emma, Lina, Norma together with Carlos and Lazaro F. Mariano and Dionicia M. Aquino as
The lot in question was mortgaged by the Severino executed a "Deed of Assignment of evidenced by a Deed of Sale notarized by
decedent to the Rural Bank of Tuguegarao the Right of Redemption" in favor of Amparo Hilarion L. Aquino as Doc. No. 143, Page No.
(designated as Mortgagee bank, for brevity) G. Ibarra appearing in the notarial register of 19, Book No. V, Series of 1982.
on several occasions before the last, being on Pedro (Laggui) as Doc. No. 257, Page No. 6,
March 9, 1956 and 29, 1958. Book No. 8, Series of 1965. On December 21, 1982, plaintiffs Grace
Gosiengfiao, et al. filed a complaint for
On August 15, 1958, Francisco Gosiengfiao On August 15, 1966, Amparo Gosiengfiao "recovery of possession and legal redemption
died intestate survived by his heirs, namely: sold the entire property to defendant Leonardo with damages" against defendants Leonardo
Third-Party Defendants: wife Antonia and Mariano who subsequently established and Avelina Mariano. Plaintiffs alleged in their
Children Amparo, Carlos, Severino and herein residence on the lot subject of this complaint that as co-heirs and co-owners of
plaintiffs-appellants Grace, Emma, Ester, controversy. It appears in the Deed of Sale the lot in question, they have the right to
recover their respective shares in the same, possession over the lot in question. The trial given by law to redeem the foreclosed
and property as they did not sell the same, court further said that when the subject property. Redemption of the whole property by
and the right of redemption with regard to the property foreclosed and sold at public auction, a co-owner does not vest in him sole
shares of other co-owners sold to the the rights of the heirs were reduced to a mere ownership over said property but will inure to
defendants. right of redemption. And when Amparo G. the benefit of all co-owners. In other words, it
Ibarra redeemed the lot from the Rural Bank will not end to the existing state of co-
Defendants in their answer alleged that the on her own behalf and with her own money ownership. Redemption is not a mode of
plaintiffs has (sic) no cause of action against she became the sole owner of the property. terminating a co-ownership.
them as the money used to redeem lot in Respondents' having failed to redeem the
question was solely from the personal funds of property from the bank or from Amparo G. xxx xxx xxx
third-party defendant Amparo Gosiengfiao- Ibarra, lost whatever rights the might have on
Ibarra, who consequently became the sole the property.5 In the case at bar, it is undisputed and
owner of the said property and thus validly supported by records, that third-party
sold the entire property to the defendants, and The Court of Appeals in its questioned defendant Amparo G. Ibarra redeemed the
the fact that defendants had already sold the decision reversed and set aside the ruling of propety in dispute within the one year
said property to the children, Lazaro Mariano the trial court and declared herein redemption period. Her redemption of the
and Dionicia M. Aquino. Defendants further respondents as co-owners of the property in property, even granting that the money used
contend that even granting that the plaintiffs the question. The Court of Appeals said: was from her own personal funds did not
are co-owners with the third-party defendants, make her the exclusive owner of the
their right of redemption had already been The whole controversy in the case at bar mortgaged property owned in common but
barred by the Statute of Limitations under revolves on the question of "whether or not a inured to the benefit of all co-owners. It would
Article 1144 of the Civil Code, if not by co-owner who redeems the whole property have been otherwise if third-party defendant
laches.4 with her own personal funds becomes the sole Amparo G. Ibarra purchased the said property
owner of said property and terminates the from the mortgagee bank (highest, bidder in
After trial on the merits, the Regional Trial existing state of co-ownership." the foreclosure sale) after the redemption
Court of Cagayan, Branch I, rendered a period had already expired and after the
decision dated September 16, 1986, Admittedly, as the property in question was mortgagee bank had consolidated it title in
dismissing the complaint and stating that mortgaged by the decedent, a co-ownership which case there would no longer be any co-
respondents have no right of ownership or existed among the heirs during the period ownership to speak of .6
 when the sale consists of an interest in some equivalent to the giving of a written notice
The decision of the Court of Appeals is particular property or properties of the required by law. 11
supported by a long line of case law which inheritance, the right redemption that arises in
states that a redemption by a co-owner within favor of the other co-heirs is that recognized in The records of the present petition, however,
the period prescribed by law inures to the Article 1620. On the other hand, if the sale is show no written notice of the sale being given
benefit of all the other co-owners.7 the hereditary right itself, fully or in part, in the whatsoever to private respondents. Although,
abstract sense, without specifying any petitioners allege that sometime on October
The main argument of petitioners in the case particular object, the right recognized in Article 31, 1982 private respondent, Grace
at bar is that the Court of Appeals incorrectly 1088 exists.8 Gosiengfiao was given a copy of the
applied Article 1620 of the Civil Code, instead questioned deed of sale and shown a copy of
of Article 1088 of the same code which Petitioners allege that upon the facts and the document at the Office of the Barangay
governs legal redemption by co-heirs since circumstances of the present case, Captain sometime November 18, 1982, this
the lot in question, which forms part of the respondents failed to exercise their right of was not supported by the evidence presented.
intestate estate of the late Francisco legal redemption during the period provided On the contrary, respondent, Grace
Gosiengfiao, was never the subject of partition by law, citing as authority the case of Gosiengfiao, in her testimony, declared as
or distribution among the heirs, thus, private Conejero, et al., v. Court of Appeals, et al.9 follows:
respondents and third-party defendants had wherein the Court adopted the principle that
not ceased to be co-heirs. the giving of a copy of a deed is equivalent to Q. When you went back to the residence of
the notice as required by law in legal Atty. Pedro Laggui were you able to see him?
On that premise, petitioners further contend redemption.
that the right of legal redemption was not A. Yes, I did.
timely exercised by the private respondents, We do not dispute the principle laid down in
since Article 1088 prescribes that the same the Conejero case. However, the facts in the Q. When you saw him, what did you tell?
must be done within the period of one month said case are not four square with the facts of
from the time they were notified in writing of the present case. In Conejero, redemptioner A. I asked him about the Deed of Sale which
the sale by the vendor. Enrique Conejero was shown and given a Mrs. Aquino had told me and he also showed
copy of the deed of sale of the subject me a Deed of Sale. I went over the Deed of
According to Tolentino, the fine distinction property. The Court in that case stated that Sale and I asked Atty. Laggui about this and
between Article 1088 and Article 1620 is that the furnishing of a copy of the deed was he mentioned here about the names of the
legal heirs. I asked why my name is not Q. What transpired in the house of the Brgy. ruling in Hernaez v. Hernaez, 32 Phil., 214,
included and I was never informed in writing Captain when you saw each other there? thus:
because I would like to claim and he told me
to better consult my own attorney. A. Brgy. Captain Bassig informed my intention Both the letter and spirit of the New Civil Code
of claiming the lot and I also informed him argue against any attempt to widen the scope
Q. And did you go? about the Deed of Sale that was not signed by of the notice specified in Article 1088 by
me since it is mine it is already sold and I was including therein any other kind of notice, such
A. Yes, I did. informed in writing about it. I am a legal heir as verbal or by registration. If the intention of
and I have also the right to claim. the law had been to include verbal notice or
Q. What kind of copy or document is that? any other means of information as sufficient to
Q. And what was the reply of Don Mariano give the effect of this notice, then there would
A. It is a deed of sale signed by my mother, and Dr. Mariano to the information given to have been no necessity or reasons to specify
sister Amparo and my brothers. them by Brgy. Captain Bassig regarding your in Article 1088 of the New Civil Code that the
claim? said notice be made in writing for, under the
Q. If shown to you the copy of the Deed of old law, a verbal notice or information was
Sale will you be able to identify it? A. He insisted that the lot is already his sufficient. 14
because of the Deed of Sale. I asked for the
A. Yes, sir.11 exact copy so that I could show to him that I Moreover, petitioners themselves adopted in
did not sign and he said he does not have a their argument respondents' allegation In their
Thereafter, Grace Gosiengfiao explicitly stated copy. 12 complaint that sometime on October, 1982
that she was never given a copy of the said they sought the redemption of the property
Deed of Sale. The above testimony was never refuted by Dr. from spouses Leonardo Mariano and Avelina
Mariano who was present before Brgy. Tigue, by tendering the repurchase money of
Q. Where did Don Mariano, Dr. Mariano and Captain Bassig. P12,000.00, which the spouses rejected.15
you see each other? Consequently, private respondents exercised
The requirement of a written notice has long their right of redemption at the first opportunity
A. In the house of Brgy. Captain Antonio been settled as early as in the case of Castillo they have by tendering the repurchase price
Bassig. v. Samonte,13 where this Court quoted the to petitioners. The complaint they filed, before
the Barangay Captain and then to the
Regional Trial Court was necessary to assert remove all uncertainty as to the sale, its terms necessary to entitle private respondents to
their rights. As we learned in the case of and its validity, and to quiet and doubt that the such reconveyance. 18
Castillo, supra: alienation is not definitive. The law not having
provided for any alternative, the method of Premises considered, respondents have not
It would seem clear from the above that the notifications remains exclusive, though the lost their right to redeem, for in the absence of
reimbursement to the purchaser within the Code does not prescribe any particular form of a written notification of the sale by the
period of one month from the notice in writing written notice nor any distinctive method vendors, the 30-day period has not even
is a requisite or condition precedent to the written notification of redemption (Conejero et begun to run.
exercise of the right of legal redemption; the al. v. Court of Appeals et al., 16 SCRA 775
bringing of an action in court is the remedy to [1966]; Etcuban v. Court of Appeals, 148 WHEREFORE, the decision of the Court of
enforce that right in case the purchaser SCRA 507 [1987]; Cabrera v. Villanueva, G.R. Appeals is hereby AFFIRMED. Cost against
refuses the redemption. The first must be No. 75069, April 15, 1988).17 (Emphasis petitioners.
done within the month-period; the second ours)
within the prescriptive period provided in the SO ORDERED.
Statute of Limitation. 16 We likewise do not find merit in petitioners'
position that private respondents could not Narvasa, C.J., Padilla and Nocon, JJ., concur.
The ruling in Castillo v. Samonte; supra, was have validly effected redemption due to their G.R. No. 127695. December 3, 2001.*
reiterated in the case of Garcia v. Calaliman, failure to consign in court the full redemption
where We also discussed the reason for the price after tender thereof was rejected by the HEIRS OF LUIS BACUS, vs. HON. COURT
requirement of the written notice. We said: petitioners. Consignation is not necessary, OF APPEALS and SPOUSES FAUSTINO
because the tender of payment was not made DURAY and VICTORIANA DURAY
Consistent with aforesaid ruling, in the to discharge an obligation, but to enforce or
interpretation of a related provision (Article exercise a right. It has been previously held Obligations and Contracts; Sales; Options;
1623 of the New Civil Code) this Court had that consignation is not required to preserve Consignation; Obligations under an option to
stressed that written notice is indispensable, the right of repurchase as a mere tender of buy are reciprocal obligations—the
actual knowledge of the sale acquired in some payment is enough on time as a basis for an performance of one obligation is conditioned
other manners by the redemptioner, action to compel the vendee a retro to resell on the simultaneous fulfillment of the other
notwithstanding. He or she is still entitled to the property; no subsequent consignation was obligation; Notice of the creditor’s decision to
written notice, as exacted by the code to exercise his option to buy need not be
coupled with actual payment of the price, so was not yet due, consignation in court of the incur in delay when they did not yet deliver
long as this is delivered to the owner of the purchase price was not yet required. payment nor make a consignation before the
property upon performance of his part of the expiration of the contract. In reciprocal
agreement; Where the obligation is not yet Same; Same; Same; Same; Words and obligations, neither party incurs in delay if the
due, consignation in court of the purchase Phrases; Consignation is the act of depositing other does not comply or is not ready to
price is not yet required.—Obligations under the thing due with the court or judicial comply in a proper manner with what is
an option to buy are reciprocal obligations. authorities whenever the creditor cannot incumbent upon him. Only from the moment
The performance of one obligation is accept or refuses to accept payment and it one of the parties fulfills his obligation, does
conditioned on the simultaneous fulfillment of generally requires a prior tender of payment. delay by the other begin.
the other obligation. In other words, in an —Consignation is the act of depositing the
option to buy, the payment of the purchase thing due with the court or judicial authorities QUISUMBING, J.:
price by the creditor is contingent upon the whenever the creditor cannot accept or
execution and delivery of a deed of sale by refuses to accept payment and it generally This petition assails the decision dated
the debtor. In this case, when private requires a prior tender of payment. In November 29, 1996, of the Court of Appeals
respondents opted to buy the property, their instances, where no debt is due and owing, in CA-G.R. CV No. 37566, affirming the
obligation was to advise petitioners of their consignation is not proper. Therefore, decision dated August 3, 1991, of the
decision and their readiness to pay the price. petitioners’ contention that private Regional Trial Court of Cebu City, Branch 6, in
They were not yet obliged to make actual respondents failed to comply with their Civil Case No. CEB-8935. 
payment. Only upon petitioners’ actual obligation under the option to buy because The facts, as culled from the records, are as
execution and delivery of the deed of sale they failed to actually deliver the purchase follows:
were they required to pay. As earlier stated, price or consign it in court before the contract
the latter was contingent upon the former. In expired and before they execute a deed, has On June 1, 1984, Luis Bacus leased to
Nietes vs. Court of Appeals, 46 SCRA 654 no leg to stand on. private respondent Faustino Duray a
(1972), we held that notice of the creditor’s parcel of agricultural land in Bulacao,
decision to exercise his option to buy need not Same; Same; Same; In reciprocal obligations, Talisay, Cebu. Designated as Lot No.
be coupled with actual payment of the price, neither party incurs in delay if the other does 3661-A-3-B-2, it had an area of 3,002
so long as this is delivered to the owner of the not comply or is not ready to comply in a square meters, covered by Transfer
property upon performance of his part of the proper manner with what is incumbent upon Certificate of Title No. 48866. The lease
agreement. Consequently, since the obligation him.—Corollary, private respondents did not was for six years, ending May 31, 1990.
 The contract contained an option to buy square meter portion of Lot No. 3661-A-3-B-2- On the other hand, petitioners alleged that
clause. Under said option, the lessee A.3 before Luis Bacus' death, private respondents
had the exclusive and irrevocable right conveyed to them the former's lack of interest
to buy 2,000 square meters of the Subsequently, on April 5, 1990, Duray filed a to exercise their option because of
property within five years from a year complaint for specific performance against the insufficiency of funds, but they were surprised
after the effectivity of the contract, at heirs of Luis Bacus with the Lupon to learn of private respondents' demand. In
P200 per square meter. That rate shall Tagapamayapa of Barangay Bulacao, asking turn, they requested private respondents to
be proportionately adjusted depending that he be allowed to purchase the lot pay the purchase price in full but the latter
on the peso rate against the US dollar, specifically referred to in the lease contract refused. They further alleged that private
which at the time of the execution of the with option to buy. At the hearing, Duray respondents did not deposit the money as
contract was fourteen pesos.1 presented a certification4 from the manager of required by the Lupon and instead presented
Standard Chartered Bank, Cebu City, a bank certification which cannot be deemed
Close to the expiration of the contract, Luis addressed to Luis Bacus, stating that at the legal tender.
Bacus died on October 10, 1989. Thereafter, request of Mr. Lawrence Glauber, a bank
on March 15, 1990, the Duray spouses client, arrangements were being made to On October 30, 1990, private respondents
informed Roque Bacus, one of the heirs of allow Faustino Duray to borrow funds of manifested in court that they caused the
Luis Bacus, that they were willing and ready to approximately P700,000 to enable him to issuance of a cashier's check in the amount of
purchase the property under the option to buy meet his obligations under the contract with P650,0006 payable to petitioners at anytime
clause. They requested Roque Bacus to Luis Bacus.5 upon demand.
prepare the necessary documents, such as a
Special Power of Attorney authorizing him to Having failed to reach an agreement before On August 3, 1991, the Regional Trial Court
enter into a contract of sale, 2 on behalf of his the Lupon, on April 27, 1990, private ruled in favor of private respondents, the
sisters who were then abroad. respondents filed a complaint for specific dispositive portion of which reads:
performance with damages against petitioners
On March 30, 1990, due to the refusal of before the Regional Trial Court, praying that Premises considered, the court finds for
petitioners to sell the property, Faustino the latter, (a) execute a deed of sale over the the plaintiffs and orders the defendants
Duray's adverse claim was annotated by the subject property in favor of private to specifically perform their obligation in
Register of Deeds of Cebu, at the back of TCT respondents; (b) receive the payment of the the option to buy and to execute a
No. 63269, covering the segregated 2,000 purchase price; and (c) pay the damages. document of sale over the property
 covered by Transfer Certificate of Title # appellee Francisco Duray had no BY ORDERING PETITIONERS
T-63269 upon payment by the plaintiffs intention to purchase the property, he (DEFENDANTS THEREIN) TO
to them in the amount of Six Hundred would not have bothered to write those EXECUTE A DOCUMENT OF SALE
Seventy-Five Thousand Six Hundred letters to the defendant-appellants OVER THE PROPERTY IN
Seventy-Five (P675,675.00) Pesos (which were all received by them) and QUESTION (WITH TCT NO. T-
within a period of thirty (30) days from neither would he be interested in having 63269) TO THEM IN THE AMOUNT
the date this decision becomes final.  his adverse claim annotated at the back OF P675,675.00 WITHIN THIRTY
of the T.C.T. of the subject property, two (30) DAYS FROM THE DATE THE
SO ORDERED.7 (2) months before the expiration of the DECISION BECOMES FINAL;
lease. Moreover, he even went to the
Unsatisfied, petitioners appealed to the extent of seeking the help of the Lupon II. . . . DISREGARDING LEGAL PRINCIPLES,
respondent Court of Appeals which denied the Tagapamayapa to compel the SPECIFIC PROVISIONS OF LAW AND
appeal on November 29, 1996, on the ground defendants-appellants to recognize his JURISPRUDENCE IN UPHOLDING THE
that the private respondents exercised their right to purchase the property and for DECISION OF THE TRIAL COURT TO THE
option to buy the leased property before the them to perform their corresponding EFFECT THAT PRIVATE RESPONDENTS
expiration of the contract of lease. It held: obligation.8 HAD EXERCISED THEIR RIGHT OF
xxx           xxx           xxx OPTION TO BUY ON TIME; THUS THE
. . . After a careful review of the entire PRESENTATION OF THE CERTIFICATION
records of this case, we are convinced We therefore find no merit in this appeal. OF THE BANK MANAGER OF A BANK
that the plaintiffs-appellees validly and WHEREFORE, the decision appealed from is DEPOSIT IN THE NAME OF ANOTHER
effectively exercised their option to buy hereby AFFIRMED.9 PERSON FOR LOAN TO RESPONDENTS
the subject property. As opined by the WAS EQUIVALENT TO A VALID TENDER
lower court, "the readiness and Hence, this petition where petitioners aver that OF PAYMENT AND A SUFFICIENT
preparedness of the plaintiff on his part, the Court of Appeals gravely erred and COMPLAINCE (SIC) OF A CONDITION FOR
is manifested by his cautionary letters, abused its discretion in: THE EXERCISE OF THE OPTION TO BUY;
the prepared bank certification long AND
before the date of May 31, 1990, the I. . . . UPHOLDING THE TRIAL
final day of the option, and his filing of COURT'S RULING IN THE III. . . . UPHOLDING THE TRIAL COURT'S
this suit before said date. If the plaintiff- SPECIFIC PERFORMANCE CASE RULING THAT THE PRESENTATION OF A
CASHER'S (SIC) CHECK BY THE buy the leased property before the contract obligation because there was neither actual
RESPONDENTS IN THE AMOUNT OF expired.  delivery to them nor consignation in court or
P625,000.00 EVEN AFTER THE with the Municipal, City or Provincial
TERMINATION OF THE TRIAL ON THE In response, petitioners state that private Treasurer of the purchase price before the
MERITS WITH BOTH PARTIES ALREADY respondents erred in initially classifying the contract expired. Private respondents' bank
HAVING RESTED THEIR CASE, WAS STILL instant petition as one under Rule 65 of the certificate stating that arrangements were
VALID COMPLIANCE OF THE CONDITION Rules of Court. They argue that the petition is being made by the bank to release P700,000
FOR THE PRIVATE RESPONDENTS' one under Rule 45 where errors of the Court as a loan to private respondents cannot be
(PLAINTIFFS THEREIN) EXERCISE OF of Appeals, whether evidentiary or legal in considered as legal tender that may substitute
RIGHT OF OPTION TO BUY AND HAD A nature, may be reviewed. for delivery of payment to petitioners nor was
FORCE OF VALID AND FULL TENDER OF it a consignation.
PAYMENT WITHIN THE AGREED PERIOD.10 We agree with private respondents that in a
Petitioners insist that they cannot be petition for review under Rule 45, only Obligations under an option to buy are
compelled to sell the disputed property by questions of law may be raised.11 However, a reciprocal obligations.12 The performance of
virtue of the nonfulfillment of the obligation close reading of petitioners' arguments reveal one obligation is conditioned on the
under the option contract of the private the following legal issues which may properly simultaneous fulfillment of the other
respondents. be entertained in the instant petition: obligation.13 In other words, in an option to
a) When private respondents opted to buy the buy, the payment of the purchase price by the
Private respondents first aver that petitioners property covered by the lease contract with creditor is contingent upon the execution and
are unclear if Rule 65 or Rule 45 of the Rules option to buy, were they already required to delivery of a deed of sale by the debtor. In this
of Court govern their petition, and that deliver the money or consign it in court before case, when private respondents opted to buy
petitioners only raised questions of facts petitioner executes a deed of transfer? the property, their obligation was to advise
which this Court cannot properly entertain in a b) Did private respondents incur in delay when petitioners of their decision and their
petition for review. They claim that even they did not deliver the purchase price or readiness to pay the price. They were not yet
assuming that the instant petition is one under consign it in court on or before the expiration obliged to make actual payment. Only upon
Rule 45, the same must be denied for the of the contract? petitioners' actual execution and delivery of
Court of Appeals has correctly determined the deed of sale were they required to pay. As
that they had validly exercised their option to On the first issue, petitioners contend that earlier stated, the latter was contingent upon
private respondents failed to comply with their the former. In Nietes vs. Court of Appeals, 46
SCRA 654 (1972), we held that notice of the neither party incurs in delay if the other does readiness to do so. Accordingly, as there was
creditor's decision to exercise his option to not comply or is not ready to comply in a no compliance yet with what was incumbent
buy need not be coupled with actual payment proper manner with what is incumbent upon upon petitioners under the option to buy,
of the price, so long as this is delivered to the him. Only from the moment one of the parties private respondents had not incurred in delay
owner of the property upon performance of his fulfills his obligation, does delay by the other when the cashier's check was issued even
part of the agreement. Consequently, since begin.15 after the contract expired.
the obligation was not yet due, consignation in In this case, private respondents, as early as
court of the purchase price was not yet March 15, 1990, communicated to petitioners WHEREFORE, the instant petition is DENIED.
required. their intention to buy the property and they The decision dated November 29, 1996 of the
were at that time undertaking to meet their Court of Appeals is hereby AFFIRMED.
Consignation is the act of depositing the thing obligation before the expiration of the contract Costs against petitioners.
due with the court or judicial authorities on May 31, 1990. However, petitioners
whenever the creditor cannot accept or refused to execute the deed of sale and it was SO ORDERED.
refuses to accept payment and it generally their demand to private respondents to first Bellosillo, Mendoza and De Leon, Jr.,
requires a prior tender of payment. In deliver the money before they would execute JJ ., concur.
instances, where no debt is due and owing, the same which prompted private respondents Buena J ., on official leave.
consignation is not proper.14 Therefore, to institute a case for specific performance in
petitioners' contention that private the Lupong Tagapamayapa and then in the
respondents failed to comply with their RTC. On October 30, 1990, after the case had
obligation under the option to buy because been submitted for decision but before the trial
they failed to actually deliver the purchase court rendered its decision, private
price or consign it in court before the contract respondents issued a cashier's check in
expired and before they execute a deed, has petitioners' favor purportedly to bolster their
no leg to stand on. claim that they were ready to pay the
purchase price. The trial court considered this
Corollary, private respondents did not incur in in private respondents' favor and we believe
delay when they did not yet deliver payment that it rightly did so, because at the time the
nor make a consignation before the expiration check was issued, petitioners had not yet
of the contract. In reciprocal obligations, executed a deed of sale nor expressed