G.R. No, 111238, 25 January 1995

FACTS:

Respondents and their brothers Jose and Dominador were the registered CO-OWNERS of a parcel of land.

Jose and Dominador sold their share (eastern portion of the land) to Adelfa.a

Adelfa expressed interest in buying the western portion of the property from private respondents.

An exclusive “Option to Purchase” was executed between Adelfa and respondents; an option money of P50,000 was given to the latter.

A new owner’s copy of the certificate of title was issued but was kept by Adelfa’s counsel, Atty. Bernardo.

Before Adelfa could make payments, it received summons; a case was filed against Jose and Dominador and Adelfa by the nephews and nieces of private respondents.

Adelfa, through a letter, informed the private respondents that it would hold payment of the full purchase price and suggested that they settle the case with their said nephews and nieces; Salud did not heed the suggestion.

Respondents informed Atty. Bernardo that they are canceling the transaction. RTC Makati dismissed the civil case.

Atty. Bernardo wrote private respondents informing them that, in view of the dismissal of the case, Adelfa is willing to pay the purchase price and requested that the corresponding Deed of Absolute Sale be executed; respondents igonored.

Respondents sent a letter to Adelfa enclosing therein a check representing the refund of half the option money paid under the exclusive option to purchase and requested Adelfa to return the owner’s duplicate copy of Salud. Adelfa failed to surrender the certificate of title.

ISSUE:

WON the agreement between Adelfa and respondents was strictly an option contract

RULING:

  1. The agreement between the parties is a contract tosell; not an option contract nor a contract of sale.

Contract to SELL

–     by agreement, the ownership is reserved in the vendor and is not to pass until full payment of the price

Contract of SALE

–     the title passes to the vendee upon the delivery of the thing sold

–     the vendor has lost and cannot recover ownership until and unless the contract is resolved or rescinded

  * Case digest by Immanuel Y. Granada, LLB-1, Andres Bonifacio Law School, SY 2017-2018