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    ANG YU ASUNCION, et al., petitioners, vs. CA and BUEN REALTY DEVELOPMENT CORPORATION, respondentsG.R. No. 109125 December 2, 1994

    Assailed, in this petition for review, is the decision of the Court of Appeals, dated 04 December 1991, in CA-G.R. SP No. 26345 setting aside and declaringwithout force and effect the orders of execution of the trial court, dated 30 August 1991 and 27 September 1991, in Civil Case No. 87-41058.

    The antecedents are recited in good detail by the appellate court thusly:

    On July 29, 1987 a Second Amended Complaint for Specific Performance was filed by Ang Yu Asuncion and Keh Tiong, etal., against Bobby Cu Unjieng, Rose Cu Unjieng and Jose Tan before the Regional Trial Court, Branch 31, Manila in CivilCase 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 1935and have been religiously paying the rental and complying with all the conditions of the lease contract; that on severaloccasions before October 9, 1986, defendants informed plaintiffs that they are offering to sell the premises and are givingthem priority to acquire the same; that during the negotiations, Bobby Cu Unjieng offered a price of P6-million while plaintiffsmade a counter offer of P5-million; that plaintiffs thereafter asked the defendants to put their offer in writing to which requestdefendants acceded; that in reply to defendant's letter, plaintiffs wrote them on October 24, 1986 asking that they specify theterms and conditions of the offer to sell; that when plaintiffs did not receive any reply, they sent another letter dated January28, 1987 with the same request; that since defendants failed to specify the terms and conditions of the offer to sell andbecause of information received that defendants were about to sell the property, plaintiffs were compelled to file the complaintto compel defendants to sell the property to them.

    Defendants filed their answer denying the material allegations of the complaint and interposing a special defense of lack ofcause of action.

    After the issues were joined, defendants filed a motion for summary judgment which was granted by the lower court. The trialcourt found that defendants' offer to sell was never accepted by the plaintiffs for the reason that the parties did not agree uponthe terms and conditions of the proposed sale, hence, there was no contract of sale at all. Nonetheless, the lower court ruledthat should the defendants subsequently offer their property for sale at a price of P11-million or below, plaintiffs will have theright of first refusal. Thus the dispositive portion of the decision states:

    WHEREFORE, judgment is hereby rendered in favor of the defendants and against the plaintiffssummarily dismissing the complaint subject to the aforementioned condition that if the defendantssubsequently decide to offer their property for sale for a purchase price of Eleven Million Pesos or lower,then the plaintiffs has the option to purchase the property or of first refusal, otherwise, defendants neednot offer the property to the plaintiffs if the purchase price is higher than Eleven Million Pesos.

    SO ORDERED.

    Aggrieved by the decision, plaintiffs appealed to this Court inCA-G.R. CV No. 21123. In a decision promulgated on September 21, 1990 (penned by Justice Segundino G. Chua andconcurred in by Justices Vicente V. Mendoza and Fernando A. Santiago), this Court affirmed with modification the lower

    court's judgment, holding:

    In resume, there was no meeting of the minds between the parties concerning the sale of the property. Absent such requirement, the claim for specific performance will not lie. Appellants' demand for actual,moral and exemplary damages will likewise fail as there exists no justifiable ground for its award.Summary judgment for defendants was properly granted. Courts may render summary judgment whenthere is no genuine issue as to any material fact and the moving party is entitled to a judgment as amatter of law (Garcia vs. Court of Appeals, 176 SCRA 815). All requisites obtaining, the decision of thecourt a quo is legally justifiable.

    WHEREFORE, finding the appeal unmeritorious, the judgment appealed from is hereby AFFIRMED, butsubject to the following modification: The court a quo in the aforestated decision gave the plaintiffs-appellants the right of first refusal only if the property is sold for a purchase price of Eleven Million pesosor lower; however, considering the mercurial and uncertain forces in our market economy today. We findno reason not to grant the same right of first refusal to herein appellants in the event that the subjectproperty is sold for a price in excess of Eleven Million pesos. No pronouncement as to costs.

    SO ORDERED.

    The decision of this Court was brought to the Supreme Court by petition for review on certiorari . The Supreme Court deniedthe appeal on May 6, 1991 "for insufficiency in form and substances" (Annex H, Petition).

    On November 15, 1990, while CA-G.R. CV No. 21123 was pending consideration by this Court, the Cu Unjieng spousesexecuted a Deed of Sale (Annex D, Petition) transferring the property in question to herein petitioner Buen Realty andDevelopment Corporation, subject to the following terms and conditions:

    1. That for and in consideration of the sum of FIFTEEN MILLION PESOS (P15,000,000.00), receipt ofwhich in full is hereby acknowledged, the VENDORS hereby sells, transfers and conveys for and in favorof the VENDEE, his heirs, executors, administrators or assigns, the above-described property with all the

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    improvements found therein including all the rights and interest in the said property free from all liens andencumbrances of whatever nature, except the pending ejectment proceeding;

    2. That the VENDEE shall pay the Documentary Stamp Tax, registration fees for the transfer of title in hisfavor and other expenses incidental to the sale of above-described property including capital gains taxand accrued real estate taxes.

    As a consequence of the sale, TCT No. 105254/T-881 in the name of the Cu Unjieng spouses was cancelled and, in lieuthereof, 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 li pendens regarding Civil Case No. 87-41058 annotated on TCT No. 105254/T-881 in the name of the Cu Unjiengs.

    The lessees filed a Motion for Execution dated August 27, 1991 of the Decision in Civil Case No. 87-41058 as modified by theCourt of Appeals in CA-G.R. CV No. 21123.

    On August 30, 1991, respondent Judge issued an order (Annex A, Petition) quoted as follows:

    Presented before the Court is a Motion for Execution filed by plaintiff represented by Atty. Antonio Albano.Both defendants Bobby Cu Unjieng and Rose Cu Unjieng represented by Atty. Vicente Sison and Atty.

    Anacleto Magno respectively were duly notified in today's consideration of the motion as evidenced by therubber stamp and signatures upon the copy of the Motion for Execution.

    The gist of the motion is that the Decision of the Court dated September 21, 1990 as modified by theCourt of Appeals in its decision in CA G.R. CV-21123, and elevated to the Supreme Court upon thepetition for review and that the same was denied by the highest tribunal in its resolution dated May 6,1991 in G.R. No.L-97276, had now become final and executory. As a consequence, there was an Entry of Judgment bythe Supreme Court as of June 6, 1991, stating that the aforesaid modified decision had already becomefinal and executory.

    It is the observation of the Court that this property in dispute was the subject of the Notice of Lis Pendensand that the modified decision of this Court promulgated by the Court of Appeals which had become finalto the effect that should the defendants decide to offer the property for sale for a price of P11 Million orlower, and considering the mercurial and uncertain forces in our market economy today, the same right offirst refusal to herein plaintiffs/appellants in the event that the subject property is sold for a price in excessof Eleven Million pesos or more.

    WHEREFORE, defendants are hereby ordered to execute the necessary Deed of Sale of the property inlitigation in favor of plaintiffs Ang Yu Asuncion, Keh Tiong and Arthur Go for the consideration of P15Million pesos in recognition of plaintiffs' right of first refusal and that a new Transfer Certificate of Title beissued in favor of the buyer.

    All previous transactions involving the same property notwithstanding the issuance of another title toBuen Realty Corporation, is hereby set aside as having been executed in bad faith.

    SO ORDERED.

    On September 22, 1991 respondent Judge issued another order, the dispositive portion of which reads:

    WHEREFORE, let there be Writ of Execution issue in the above-entitled case directing the Deputy SheriffRamon Enriquez of this Court to implement said Writ of Execution ordering the defendants among othersto comply with the aforesaid Order of this Court within a period of one (1) week from receipt of this Orderand for defendants to execute the necessary Deed of Sale of the property in litigation in favor of theplaintiffs Ang Yu Asuncion, Keh Tiong and Arthur Go for the consideration of P15,000,000.00 andordering the Register of Deeds of the City of Manila, to cancel and set aside the title already issued infavor of Buen Realty Corporation which was previously executed between the latter and defendants andto register the new title in favor of the aforesaid plaintiffs Ang Yu Asuncion, Keh Tiong and Arthur Go.

    SO ORDERED.

    On the same day, September 27, 1991 the corresponding writ of execution (Annex C, Petition) was issued. 1

    On 04 December 1991, the appellate court, on appeal to it by private respondent, set aside and declared without force and effect the above questionedorders of the court a quo .

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    In this petition for review on certiorari , petitioners contend that Buen Realty can be held bound by the writ of execution by virtue of the notice of lis pendenscarried 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 CuUnjiengs.

    We affirm the decision of the appellate court.

    A not too recent development in real estate transactions is the adoption of such arrangements as the right of first refusal, a purchase option and a contract tosell. For ready reference, we might point out some fundamental precepts that may find some relevance to this discussion.

    An obligation is a juridical necessity to give, to do or not to do ( Art. 1156, Civil Code ). The obligation is constituted upon the concurrence of the essentialelements thereof, viz : (a) The vinculum juris or juridical tie which is the efficient cause established by the various sources of obligations (law, contracts,

    quasi-contracts, delicts and quasi-delicts); (b) the object which is the prestation or conduct; required to be observed (to give, to do or not to do); and (c) thesubject-persons who, viewed from the demandability of the obligation, are the active (obligee) and the passive (obligor) subjects.

    Among the sources of an obligation is a contract (Art. 1157, Civil Code), which is a meeting of minds between two persons whereby one binds himself, withrespect to the other, to give something or to render some service (Art. 1305, Civil Code). A contract undergoes various stages that include its negotiation orpreparation, its perfection and, finally, its consummation. Negotiation covers the period from the time the prospective contracting parties indicate interest inthe contract to the time the contract is concluded (perfected). The perfection of the contract takes place upon the concurrence of the essential elementsthereof. A contract which is consensual as to perfection is so established upon a mere meeting of minds, i.e., the concurrence of offer and acceptance, onthe object and on the cause thereof. A contract which requires, in addition to the above, the delivery of the object of the agreement, as in a pledge orcommodatum , is commonly referred to as a real contract. In a solemn contract, compliance with certain formalities prescribed by law, such as in a donationof real property, is essential in order to make the act valid, the prescribed form being thereby an essential element thereof. The stage of consummationbegins when the parties perform their respective undertakings under the contract culminating in the extinguishment thereof.

    Until the contract is perfected, it cannot, as an independent source of obligation, serve as a binding juridical relation. In sales, particularly, to which the topicfor discussion about the case at bench belongs, the contract is perfected when a person, called the seller, obligates himself, for a price certain, to deliver andto transfer ownership of a thing or right to another, called the buyer, over which the latter agrees. Article 1458 of the Civil Code provides:

    Art. 1458. By the contract of sale one of the contracting parties obligates himself to transfer the ownership of and to deliver adeterminate thing, and the other to pay therefor a price certain in money or its equivalent.

    A contract of sale may be absolute or conditional.

    When the sale is not absolute but conditional , such as in a "Contract to Sell" where invariably the ownership of the thing sold is retained until the fulfillment ofa positive suspensive condition (normally, the full payment of the purchase price), the breach of the condition will prevent the obligation to convey title fromacquiring an obligatory force. 2 In Dignos vs. Court of Appeals (158 SCRA 375), we have said that, although denominated a "Deed of Conditional Sale," asale is still absolute where the contract is devoid of any proviso that title is reserved or the right to unilaterally rescind is stipulated, e.g., until or unless theprice is paid. Ownership will then be transferred to the buyer upon actual or constructive delivery (e.g., by the execution of a public document) of the propertysold. Where the condition is imposed upon the perfection of the contract itself, the failure of the condition would prevent such perfection. 3 If the condition isimposed on the obligation of a party which is not fulfilled, the other party may either waive the condition or refuse to proceed with the sale (Art. 1545, CivilCode). 4

    An unconditional mutual promise to buy and sell, as long as the object is made determinate and the price is fixed, can be obligatory on the parties, andcompliance therewith may accordingly be exacted. 5

    An accepted unilateral promise which specifies the thing to be sold and the price to be paid, when coupled with a valuable consideration distinct and separate from the price , is what may properly be termed a perfected contract of option . This contract is legally binding, and in sales, it conforms with thesecond paragraph of Article 1479 of the Civil Code, viz:

    Art. 1479. . . .

    An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promissor if thepromise is supported by a consideration distinct from the price. (1451a) 6

    Observe, however, that the option is not the contract of sale itself. 7 The optionee has the right, but not the obligation, to buy. Once the option is exercisedtimely, i.e., the offer is accepted before a breach of the option, a bilateral promise to sell and to buy ensues and both parties are then reciprocally bound to

    comply with their respective undertakings. 8

    Let us elucidate a little. A negotiation is formally initiated by an offer. An imperfect promise (policitacion) is merely an offer. Public advertisements orsolicitations and the like are ordinarily construed as mere invitations to make offers or only as proposals. These relations, until a contract is perfected, arenot considered binding commitments. Thus, at any time prior to the perfection of the contract, either negotiating party may stop the negotiation. The offer, atthis stage, may be withdrawn; the withdrawal is effective immediately after its manifestation, such as by its mailing and not necessarily when the offereelearns of the withdrawal (Laudico vs. Arias, 43 Phil. 270). Where a period is given to the offeree within which to accept the offer, the following rules generallygovern:

    (1) If the period is not itself founded upon or supported by a consideration, the offeror is still free and has the right to withdraw the offer before itsacceptance, or, if an acceptance has been made, before the offeror's coming to know of such fact, by communicating that withdrawal to the offeree (see Ar1324, Civil Code; see also Atkins, Kroll & Co. vs. Cua, 102 Phil. 948 , holding that this rule is applicable to a unilateral promise to sell under Art. 1479,modifying the previous decision in South Western Sugar vs. Atlantic Gulf, 97 Phil. 249; see also Art. 1319, Civil Code; Rural Bank of Paraaque, Inc., vs.Remolado, 135 SCRA 409; Sanchez vs. Rigos, 45 SCRA 368 ). The right to withdraw, however, must not be exercised whimsically or arbitrarily; otherwise, itcould give rise to a damage claim under Article 19 of the Civil Code which ordains that "every person must, in the exercise of his rights and in theperformance of his duties, act with justice, give everyone his due, and observe honesty and good faith."

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    In the event, however, that the leased premises is sold to someone other than the LESSEE, the LESSOR is bound and obligated, as it herebybinds and obligates itself, to stipulate in the Deed of Sale hereof that the purchaser shall recognize this lease and be bound by all the terms andconditions thereof.

    Sometime in August 1974, Mr. Henry Pascal of Carmelo informed Mr. Henry Yang, President of Mayfair, through a telephone conversation that Carmelo wasdesirous of selling the entire Claro M. Recto property. Mr. Pascal told Mr. Yang that a certain Jose Araneta was offering to buy the whole property for USDollars 1,200,000, and Mr. Pascal asked Mr. Yang if the latter was willing to buy the property for Six to Seven Million Pesos.

    Mr. Yang replied that he would let Mr. Pascal know of his decision. Subsequently, Mayfair replied through a letter reiterating the provision as stated inparagraph 8. Carmelo did not reply to this letter. On September 18, 1974, Mayfair sent another letter to Carmelo purporting to express interest in acquiringnot only the leased premises but "the entire building and other improvements if the price is reasonable. However, both Carmelo and Equatorial questionedthe authenticity of the second letter. Four years later, on July 30, 1978, Carmelo sold its entire C.M. Recto Avenue land and building, which included theleased premises housing the "Maxim" and "Miramar" theatres, to Equatorial by virtue of a Deed of Absolute Sale, for the total sum of P11,300,000.00.

    In September 1978, Mayfair instituted the action a quo for specific performance and annulment of the sale of the leased premises to Equatorial. In its Answer, Carmelo alleged as special and affirmative defense (a) that it had informed Mayfair of its desire to sell the entire C.M. Recto Avenue property andoffered the same to Mayfair, but the latter answered that it was interested only in buying the areas under lease, which was impossible since the property wasnot a condominium; and (b) that the option to purchase invoked by Mayfair is null and void for lack of consideration. Equatorial, in its Answer, pleaded asspecial and affirmative defense that the option is void for lack of consideration ( sic ) and is unenforceable by reason of its impossibility of performancebecause the leased premises could not be sold separately from the other portions of the land and building. It counterclaimed for cancellation of the contractsof lease, and for increase of rentals in view of alleged supervening extraordinary devaluation of the currency.

    After assessing the evidence, the court a quo rendered the appealed decision against Mayfair. The trial court adjudged the identically worded paragraph 8found in both aforecited lease contracts to be an option clause which however cannot be deemed to be binding on Carmelo because of lack of distinctconsideration therefor. On appeal, respondent appellate court reversed the court a quo and rendered judgment:

    2. Directing the plaintiff-appellant Mayfair Theater Inc. to pay and return to Equatorial the amount of P11,300,000.00 within fifteen (15) days from

    notice of this Decision, and ordering Equatorial Realty Development, Inc. to accept such payment;

    3. Upon payment of the sum of P11,300,000, directing Equatorial Realty Development, Inc. to execute the deeds and documents necessary forthe issuance and transfer of ownership to Mayfair of the lot registered under TCT Nos. 17350, 118612, 60936, and 52571; and

    4. Should plaintiff-appellant Mayfair Theater, Inc. be unable to pay the amount as adjudged, declaring the Deed of Absolute Sale between thedefendants-appellants Carmelo & Bauermann, Inc. and Equatorial Realty Development, Inc. as valid and binding upon all the parties.

    Respondent Court of Appeals concluded that since paragraph 8 of the two lease contracts does not state a fixed price for the purchase of the leasedpremises, which is an essential element for a contract of sale to be perfected, what paragraph 8 is, must be a right of first refusal and not an option contract.It explicated:

    Firstly, the court a quo misapplied the provisions of Articles 1324 and 1479, second paragraph, of the Civil Code.

    Article 1324 speaks of an "offer" made by an offeror which the offeree may or may not accept within a certain period. Under this article, the offermay be withdrawn by the offeror before the expiration of the period and while the offeree has not yet accepted the offer. However, the offer cannotbe withdrawn by the offeror within the period if a consideration has been promised or given by the offeree in exchange for the privilege of beinggiven that period within which to accept the offer. The consideration is distinct from the price which is part of the offer. The contract that arises isknown as option.

    Article 1479, second paragraph, on the other hand, contemplates of an "accepted unilateral promise to buy or to sell a determinate thing for a pricewithin (which) is binding upon the promisee if the promise is supported by a consideration distinct from the price." That "unilateral promise to buyor to sell a determinate thing for a price certain" is called an offer. An "offer", in laws, is a proposal to enter into a contract. To constitute a legaloffer, the proposal must be certain as to the object, the price and other essential terms of the contract (Art. 1319, Civil Code).

    Based on the foregoing discussion, it is evident that the provision granting Mayfair "30-days exclusive option to purchase" the leased premises isNOT AN OPTION in the context of Arts. 1324 and 1479, second paragraph, of the Civil Code. Although the provision is certain as to the object(the sale of the leased premises) the price for which the object is to be sold is not stated in the provision Otherwise stated, the questionedstipulation is not by itself, an "option" or the "offer to sell" because the clause does not specify the price for the subjec t property.

    Although the provision giving Mayfair "30-days exclusive option to purchase" cannot be legally categorized as an option, it is, nevertheless, a validand binding stipulation. What the trial court failed to appreciate was the intention of the parties behind the questioned proviso.

    The provision in question is not of the pro-forma type customarily found in a contract of lease. Even appellees have recognized that the stipulationwas incorporated in the two Contracts of Lease at the initiative and behest of Mayfair. Evidently, the stipulation was intended to benefit and protectMayfair in its rights as lessee in case Carmelo should decide, during the term of the lease, to sell the leased property. This intention of the partiesis achieved in two ways in accordance with the stipulation. The first is by giving Mayfair "30-days exclusive option to purchase" the leasedproperty. The second is, in case Mayfair would opt not to purchase the leased property, "that the purchaser (the new owner of the leased property)shall recognize the lease and be bound by all the terms and conditions thereof."

    In other words, paragraph 8 of the two Contracts of lease, particularly the stipulation giving Mayfair "30-days exclusive option to purchase the(leased premises)," was meant to provide Mayfair the opportunity to purchase and acquire the leased property in the event that Carmelo shoulddecide to dispose of the property. In order to realize this intention, the implicit obligation of Carmelo once it had decided to sell the leased property,was not only to notify Mayfair of such decision to sell the property, but, more importantly, to make an offer to sell the leased premises to Mayfair,giving the latter a fair and reasonable opportunity to accept or reject the offer, before offering to sell or selling the leased property to third parties.

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    The right vested in Mayfair is analogous to the right of first refusal, which means that Carmelo should have offered the sale of the leased premisesto Mayfair before offering it to other parties, or, if Carmelo should receive any offer from third parties to purchase the leased premises, thenCarmelo must first give Mayfair the opportunity to match that offer.

    Besides the ruling that paragraph 8 vests in Mayfair the right of first refusal as to which the requirement of distinct consideration indispensable in an optioncontract, has no application, respondent appellate court also addressed the claim of Carmelo and Equatorial that assuming arguendo that the option is validand effective, it is impossible of performance because it covered only the leased premises and not the entire Claro M. Recto property, while Carmelo's offerto sell pertained to the entire property in question. The Court of Appeals ruled as to this issue in this wise:

    We are not persuaded by the contentions of the defendants-appellees. It is to be noted that the Deed of Absolute Sale between Carmelo andEquatorial covering the whole Claro M. Recto property, made reference to four titles: TCT Nos. 17350, 118612, 60936 and 52571. Based on theinformation submitted by Mayfair in its appellant's Brief (pp. 5 and 46) which has not been controverted by the appellees, and which We, therefore,take judicial notice of the two theaters stand on the parcels of land covered by TCT No. 17350 with an area of 622.10 sq. m and TCT No. 118612with an area of 2,100.10 sq. m. The existence of four separate parcels of land covering the whole Recto property demonstrates the legal andphysical possibility that each parcel of land, together with the buildings and improvements thereof, could have been sold independently of theother parcels.

    At the time both parties executed the contracts, they were aware of the physical and structural conditions of the buildings on which the theaterswere to be constructed in relation to the remainder of the whole Recto property. The peculiar language of the stipulation would tend to limitMayfair's right under paragraph 8 of the Contract of Lease to the acquisition of the leased areas only. Indeed, what is being contemplated by thequestioned stipulation is a departure from the customary situation wherein the buildings and improvements are included in and form part of thesale of the subjacent land. Although this situation is not common, especially considering the non-condominium nature of the buildings, the salewould be valid and capable of being performed. A sale limited to the leased premises only, if hypothetically assumed, would have brought intooperation the provisions of co-ownership under which Mayfair would have become the exclusive owner of the leased premises and at the sametime a co-owner with Carmelo of the subjacent land in proportion to Mayfair's interest over the premises sold to it. 10

    ISSUE:In essence, our task is two-fold: (1) to define the true nature, scope and efficacy of paragraph 8 stipulated in the two contracts of lease between Carmeloand Mayfair in the face of conflicting findings by the trial court and the Court of Appeals; and (2) to determine the rights and obligations of Carmelo andMayfair, as well as Equatorial, in the aftermath of the sale by Carmelo of the entire Claro M. Recto property to Equatorial.

    HELD:We agree with the respondent Court of Appeals that the aforecited contractual stipulation provides for a right of first refusal in favor of Mayfair. It is not aoption clause or an option contract . It is a contract of a right of first refusal. An option contract is one necessarily involving the choice granted to another for adistinct and separate consideration as to whether or not to purchase a determinate thing at a predetermined fixed price. In the case at bar, it appears thatthere was no cause or consideration; said provision cannot be considered a contract of option.

    The rule so early established in this jurisdiction is that the deed of option or the option clause in a contract, in order to be valid and enforceable, must, amongother things, indicate the definite price at which the person granting the option, is willing to sell.

    Notably, in one case we held that the lessee loses his right to buy the leased property for a named price per square meter upon failure to make the purchasewithin the time specified; 17 in one other case we freed the landowner from her promise to sell her land if the prospective buyer could raise P4,500.00 in threeweeks because such option was not supported by a distinct consideration; 18 in the same vein in yet one other case, we also invalidated an instrument

    entitled, "Option to Purchase" a parcel of land for the sum of P1,510.00 because of lack of consideration; 19

    and as an exception to the doctrine enumeratedin the two preceding cases, in another case, we ruled that the option to buy the leased premises for P12,000.00 as stipulated in the lease contract, is notwithout consideration for in reciprocal contracts, like lease, the obligation or promise of each party is the consideration for that of the other. 20 In all thescases, the selling price of the object thereof is always predetermined and specified in the option clause in the contract or in the separate deed of option.

    In the light of the foregoing disquisition and in view of the wording of the questioned provision in the two lease contracts involved in the instant case, we sohold that no option to purchase in contemplation of the second paragraph of Article 1479 of the Civil Code, has been granted to Mayfair under the said leasecontracts. Respondent Court of Appeals correctly ruled that the said paragraph 8 grants the right of first refusal to Mayfair and is not an option contract. Italso correctly reasoned that as such, the requirement of a separate consideration for the option, has no applicability in the instant case. There is nothing inthe identical Paragraphs "8" of the June 1, 1967 and March 31, 1969 contracts which would bring them into the ambit of the usual offer or option requiring anindependent consideration. An option is a contract granting a privilege to buy or sell within an agreed time and at a determined price. It is a separate anddistinct contract from that which the parties may enter into upon the consummation of the option. It must be supported by consideration. In the instant case,the right of first refusal is an integral part of the contracts of lease. The consideration is built into the reciprocal obligations of the parties.

    The Court of Appeals is correct in stating that Paragraph 8 was incorporated into the contracts of lease for the benefit of Mayfair which wanted to be assuredthat it shall be given the first crack or the first option to buy the property at the price which Carmelo is willing to accep t. It is not also correct to say that thereis no consideration in an agreement of right of first refusal. The stipulation is part and parcel of the entire contract of lease. The consideration for the leaseincludes the consideration for the right of first refusal. Thus, Mayfair is in effect stating that it consents to lease the premises and to pay the price agreedupon provided the lessor also consents that, should it sell the leased property, then, Mayfair shall be given the right to match the offered purchase price andto buy the property at that price.

    We shall now determine the consequential rights, obligations and liabilities of Carmelo, Mayfair and Equatorial.

    First and foremost is that the petitioners acted in bad faith to render Paragraph 8 "inutile". What Carmelo and Mayfair agreed to, by executing the two leasecontracts, was that Mayfair will have the right of first refusal in the event Carmelo sells the leased premises. It is undisputed that Carmelo did recognize thisright of Mayfair, for it informed the latter of its intention to sell the said property in 1974. There was an exchange of letters evidencing the offer and counter-offers made by both parties. Carmelo, however, did not pursue the exercise to its logical end. While it initially recognized Mayfair's right of first refusal,Carmelo violated such right when without affording its negotiations with Mayfair the full process to ripen to at least an interface of a definite offer and apossible corresponding acceptance within the "30-day exclusive option" time granted Mayfair, Carmelo abandoned negotiations, kept a low profile for sometime, and then sold, without prior notice to Mayfair, the entire Claro M Recto property to Equatorial.

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    Since Equatorial is a buyer in bad faith, this finding renders the sale to it of the property in question rescissible. We agree with respondent Appellate Courtthat the records bear out the fact that Equatorial was aware of the lease contracts because its lawyers had, prior to the sale, studied the said contracts. Assuch, Equatorial cannot tenably claim to be a purchaser in good faith, and, therefore, rescission lies.

    According to Tolentino, rescission is a remedy granted by law to the contracting parties and even to third persons, to secure reparation for damages causedto them by a contract, even if this should be valid, by means of the restoration of things to their condition at the moment prior to the celebration of saidcontract. It is a relief allowed for the protection of one of the contracting parties and even third persons from all injury and damage the contract may cause, orto protect some incompatible and preferent right created by the contract. Rescission implies a contract which, even if initially valid, produces a lesion orpecuniary damage to someone that justifies its invalidation for reasons of equity.

    It is true that the acquisition by a third person of the property subject of the contract is an obstacle to the action for it s rescission where it is shown that suchthird person is in lawful possession of the subject of the contract and that he did not act in bad faith. However, this rule is not applicable in the case before usbecause the petitioner is not considered a third party in relation to the Contract of Sale nor may its possession of the subject property be regarded asacquired lawfully and in good faith.

    A purchaser in good faith and for value is one who buys the property of another without notice that some other person has a r ight to or interest in suchproperty and pays a full and fair price for the same at the time of such purchase or before he has notice of the claim or interest of some other person in theproperty. Good faith connotes an honest intention to abstain from taking unconscientious advantage of another. Tested by these principles, the petitionercannot tenably claim to be a buyer in good faith as it had notice of the lease of the property by Mayfair and such knowledge should have cautioned it to lookdeeper into the agreement to determine if it involved stipulations that would prejudice its own interests.

    Petitioners assert the alleged impossibility of performance because the entire property is indivisible property. It was petitioner Carmelo which fixed the limitsof the property it was leasing out. Common sense and fairness dictate that instead of nullifying the agreement on that basis, the stipulation should be giveneffect by including the indivisible appurtenances in the sale of the dominant portion under the right of first refusal. A valid and legal contract where theascendant or the more important of the two parties is the landowner should be given effect, if possible, instead of being nullified on a selfish pretext positedby the owner. Following the arguments of petitioners and the participation of the owner in the attempt to strip Mayfair of its rights, the right of first refusalshould include not only the property specified in the contracts of lease but also the appurtenant portions sold to Equatorial which are claimed by petitionersto be indivisible. Carmelo acted in bad faith when it sold the entire property to Equatorial without informing Mayfair, a clear violation of Mayfair's rights. Whilethere was a series of exchanges of letters evidencing the offer and counter-offers between the parties, Carmelo abandoned the negotiations without givingMayfair full opportunity to negotiate within the 30-day period.

    The facts of the case and considerations of justice and equity require that we order rescission here and now. Rescission is a relief allowed for the protectionof one of the contracting parties and even third persons from all injury and damage the contract may cause or to protect some incompatible and preferredright by the contract. The sale of the subject real property by Carmelo to Equatorial should now be rescinded considering that Mayfair, which had substantialinterest over the subject property, was prejudiced by the sale of the subject property to Equatorial without Carmelo conferring to Mayfair every opportunity tonegotiate within the 30-day stipulated period.

    WHEREFORE, the petition for review of the decision of the Court of Appeals, dated June 23, 1992, in CA-G.R. CV No. 32918, is HEREBY DENIED. TheDeed of Absolute Sale between petitioners Equatorial Realty Development, Inc. and Carmelo & Bauermann, Inc. is hereby deemed rescinded; petitionerCarmelo & Bauermann is ordered to return to petitioner Equatorial Realty Development the purchase price. The latter is directed to execute the deeds anddocuments necessary to return ownership to Carmelo and Bauermann of the disputed lots. Carmelo & Bauermann is ordered to allow Mayfair Theater, Inc.to buy the aforesaid lots for P11,300,000.00.-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    G.R. No. L-26872 July 25, 1975VILLONCO REALTY COMPANY, plaintiff-appellee and EDITH PEREZ DE TAGLE, intervenor-appellee, vs. BORMAHECO, INC., FRANCISCO N.CERVANTES and ROSARIO N. CERVANTES, defendants-appellants . Meer, Meer & Meer for plaintiff-appellee.

    This action was instituted by Villonco Realty Company against Bormaheco, Inc. and the spouses Francisco N. Cervantes and Rosario N. Cervantes for thespecific performance of a supposed contract for the sale of land and the improvements thereon for one million four hundred thousand pesos. Edith Perez deTagle, as agent, intervened in order to recover her commission. The lower court enforced the sale. Bormaheco, Inc. and the Cervantes spouses, assupposed vendors, appealed.

    This Court took cognizance of the appeal because the amount involved is more than P200,000 and the appeal was perfected before Republic Act No. 5440took effect on September 9, 1968. The facts are as follows:

    Francisco N. Cervantes and his wife, Rosario P. Navarra-Cervantes, are the owners of lots 3, 15 and 16 located at 245 Buendia Avenue, Makati, Rizal with atotal area of three thousand five hundred square meters (TCT Nos. 43530, 43531 and 43532, Exh. A, A-1 and A-2). The lots were mortgaged to theDevelopment Bank of the Phil (DBP) on April 21, 1959 as security for a loan of P441,000. The mortgage debt was fully paid on July 10, 1969.

    Cervantes is the president of Bormaheco, Inc., a dealer and importer of industrial and agricultural machinery. The entire lots are occupied by the building,machinery and equipment of Bormaheco, Inc. and are adjacent to the property of Villonco Realty Company situated at 219 Buendia Avenue.

    In the early part of February, 1964 there were negotiations for the sale of the said lots and the improvements thereon between Romeo Villonco of VilloncoRealty Company "and Bormaheco, Inc., represented by its president, Francisco N. Cervantes, through the intervention of Edith Perez de Tagle, a real estatebroker".

    In the course of the negotiations, the brothers Romeo Villonco and Teofilo Villonco conferred with Cervantes in his office to discuss the price and terms ofthe sale. Later, Cervantes "went to see Villonco for the same reason until some agreement" was arrived at. On a subsequent occasion, Cervantes,accompanied by Edith Perez de Tagle, discussed again the terms of the sale with Villonco.

    During the negotiations, Villonco Realty Company assumed that the lots belonged to Bormaheco, Inc. and that Cervantes was duly authorized to sell thesame. Cervantes did not disclose to the broker and to Villonco Realty Company that the lots were conjugal properties of himself and his wife and that theywere mortgaged to the DBP.

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    Bormaheco, Inc., through Cervantes, made a written offer dated February 12, 1964, to Romeo Villonco for the sale of the property. The offer reads (Exh. B):

    BORMAHECO, INC.

    February 12,1964

    Mr. RomeoVillonco Villonco BuildingBuendia AvenueMakati, Rizal.

    Dear Mr. Villonco:

    This is with reference to our telephone conversation this noon on the matter of the sale of our property located at Buendia Avenue, with a total area of 3,500 sq. m., under the following conditions:

    (1) That we are offering to sell to you the above property at the price of P400.00 per square meter;

    (2) That a deposit of P100,000.00 must be placed as earnest money on the purchase of the aboveproperty which will become part payment of the property in the event that the sale is consummated;

    (3) That this sale is to be consummated only after I shall have also consummated my purchase of anotherproperty located at Sta. Ana, Manila;

    (4) That if my negotiations with said property will not be consummated by reason beyond my control, I willreturn to you your deposit of P100,000 and the sale of my property to you will not also be consummated;and

    (5) That final negotiations on both properties can be definitely known after 45 days.

    If the above terms is (are) acceptable to your Board, please issue out the said earnest money in favor of Bormaheco, Inc., anddeliver the same thru the bearer, Miss Edith Perez de Tagle.

    Very truly yours,

    SGD. FRANCISCO N. CERVANTESPresident

    The property mentioned in Bormaheco's letter was the land of the National Shipyards & Steel Corporation (Nassco), with an area of twenty thousand squaremeters, located at Punta, Sta. Ana, Manila. At the bidding held on January 17, 1964 that land was awarded to Bormaheco, Inc., the highest bidder, for theprice of P552,000. The Nassco Board of Directors in its resolution of February 18, 1964 authorized the General Manager to sign the necessary contract(Exh. H).

    On February 28, 1964, the Nassco Acting General Manager wrote a letter to the Economic Coordinator, requesting approval of that resolution. The ActingEconomic Coordinator approved the resolution on March 24, 1964 (Exh. 1).

    In the meanwhile, Bormaheco, Inc. and Villonco Realty Company continued their negotiations for the sale of the Buendia Avenue property. Cervantes andTeofilo Villonco had a final conference on February 27, 1964. As a result of that conference Villonco Realty Company, through Teofilo Villonco, in its letter ofMarch 4, 1964 made a revised counter- offer (Romeo Villonco's first counter-offer was dated February 24, 1964, Exh. C) for the purchase of the property.The counter-offer was accepted by Cervantes as shown in Exhibit D, which is quoted below:

    VILLONCO REALTY COMPANYV. R. C. Building219 Buendia Avenue, Makati,Rizal, Philippines

    March 4, 1964

    Mr. Francisco Cervantes.Bormaheco, Inc.245 Buendia AvenueMakati, Rizal

    Dear Mr. Cervantes:

    In reference to the letter of Miss E. Perez de Tagle dated February 12th and 26, 1964 in respect to the terms and conditionson the purchase of your property located at Buendia Ave., Makati, Rizal, with a total area of 3,500 sq. meters., we herebyrevise our offer, as follows:

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    1. That the price of the property shall be P400.00 per sq. m., including the improvements thereon;

    2. That a deposit of P100,000.00 shall be given to you as earnest money which will become as part payment in the event thesale is consummated;

    3. This sale shall be cancelled, only if your deal with another property in Sta. Ana shall not be consummated and in such case,the P100,000-00 earnest money will be returned to us with a 10% interest p.a. However, if our deal with you is finalized, saidP100,000.00 will become as part payment for the purchase of your property without interest:

    4. The manner of payment shall be as follows:

    a. P100,000.00 earnest money and650,000.00 as part of the down payment, orP750,000.00 as total down payment

    b. The balance is payable as follows:P100,000.00 after 3 months125,000.00 -do-212,500.00 -do-P650,000.00 Total

    As regards to the other conditions which we have discussed during our last conference on February 27, 1964, the same shallbe finalized upon preparation of the contract to sell. *

    If the above terms and conditions are acceptable to you, kindly sign your conformity hereunder. Enclosed is our check forONE HUNDRED THOUSAND (P100,000.00) PESOS, MBTC Check No. 448314, as earnest money.

    Very truly yours,

    VILLONCO REALTY COMPANY(Sgd.) TEOFILO VILLONCO

    CONFORME:

    BORMAHECO, INC.(Sgd.) FRANCISCO CERVANTES

    That this sale shall be subject to favorable consummation of a property in Sta. Ana we are negotiating.

    (Sgd.) FRANCISCO CERVANTES

    The check for P100,000 (Exh. E) mentioned in the foregoing letter-contract was delivered by Edith Perez de Tagle to Bormaheco, Inc. on March 4, 1964 andwas received by Cervantes. In the voucher-receipt evidencing the delivery the broker indicated in her handwriting that the earnest money was "subject to theterms and conditions embodied in Bormaheco's letter" of February 12 and Villonco Realty Company's letter of March 4, 1964 (Exh. E-1; 14 tsn).

    Then, unexpectedly, in a letter dated March 30, 1964, or twenty-six days after the signing of the contract of sale, Exhibit D, Cervantes returned the earnestmoney, with interest amounting to P694.24 (at ten percent per annum ). Cervantes cited as an excuse the circumstance that "despite the lapse of 45 daysfrom February 12, 1964 there is no certainty yet" for the acquisition of the Punta property (Exh. F; F-I and F-2). Villonco Realty Company refused to acceptthe letter and the checks of Bormaheco, Inc. Cervantes sent them by registered mail. When he rescinded the contract, he was already aware that the Puntalot had been awarded to Bormaheco, Inc. (25-26 tsn).

    Edith Perez de Tagle, the broker, in a letter to Cervantes dated March 31, 1964 articulated her shock and surprise at Bormaheco's turnabout. She reviewedthe history of the deal and explained why Romeo Villonco could not agree to the rescission of the sale (Exh. G). **

    Cervantes in his letter of April 6, 1964, a reply to Miss Tagle's letter, alleged that the forty-five day period had already expired and the sale to Bormaheco,Inc. of the Punta property had not been consummated. Cervantes said that his letter was a "manifestation that we are no longer interested to sell" theBuendia Avenue property to Villonco Realty Company (Annex I of Stipulation of Facts). The latter was furnished with a copy of that letter.

    In a letter dated April 7, 1964 Villonco Realty Company returned the two checks to Bormaheco, Inc., stating that the condition for the cancellation of thecontract had not arisen and at the same time announcing that an action for breach of contract would be filed against Bormaheco, Inc. (Annex G of Stipulationof Facts). 1wph1.t

    On that same date, April 7, 1964 Villonco Realty Company filed the complaint (dated April 6) for specific performance against Bormaheco, Inc. Also on thatsame date, April 7, at eight-forty-five in the morning, a notice of lis pendens was annotated on the titles of the said lots.

    Bormaheco, Inc. in its answers dated May 5 and 25, 1964 pleaded the defense that the perfection of the contract of sale was s ubject to the conditions (a)"that final acceptance or not shall be made after 45 days" (sic) and (b) that Bormaheco, Inc. "acquires the Sta. Ana property".

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    On June 2, 1964 or during the pendency of this case, the Nassco Acting General Manager wrote to Bormaheco, Inc., advising it that the Board of Directorsand the Economic Coordinator had approved the sale of the Punta lot to Bormaheco, Inc. and requesting the latter to send its duly authorized representativeto the Nassco for the signing of the deed of sale (Exh. 1).

    The deed of sale for the Punta land was executed on June 26, 1964. Bormaheco, Inc. was represented by Cervantes (Exh. J. See Bormaheco, Inc. vs. Abanes, L-28087, July 31, 1973, 52 SCRA 73).

    In view of the disclosure in Bormaheco's amended answer that the three lots were registered in the names of the Cervantes spouses and not in the name ofBormaheco, Inc., Villonco Realty Company on July 21, 1964 filed an amended complaint impleading the said spouses as defendants. Bormaheco, Inc. andthe Cervantes spouses filed separate answers.

    As of January 15, 1965 Villonco Realty Company had paid to the Manufacturers' Bank & Trust Company the sum of P8,712.25 as interests on the overdraftline of P100,000 and the sum of P27.39 as interests daily on the same loan since January 16, 1965. (That overdraft line was l ater settled by Villonco RealtyCompany on a date not mentioned in its manifestation of February 19, 1975).

    Villonco Realty Company had obligated itself to pay the sum of P20,000 as attorney's fees to its lawyers. It claimed that it was damaged in the sum ofP10,000 a month from March 24, 1964 when the award of the Punta lot to Bormaheco, Inc. was approved. On the other hand, Bormaheco, Inc. claimed thatit had sustained damages of P200,000 annually due to the notice of lis pendens which had prevented it from constructing a multi-story building on the threelots. (Pars. 18 and 19, Stipulation of Facts). 1wph1.t

    Miss Tagle testified that for her services Bormaheco, Inc., through Cervantes, obligated itself to pay her a three percent commission on the price ofP1,400,000 or the amount of forty-two thousand pesos (14 tsn).

    After trial, the lower court rendered a decision ordering the Cervantes spouses to execute in favor of Bormaheco, Inc. a deed of conveyance for the threelots in question and directing Bormaheco, Inc. (a) to convey the same lots to Vill onco Realty Company, (b) to pay the latter, as consequential damages, thesum of P10,000 monthly from March 24, 1964 up to the consummation of the sale, (c) to pay Edith Perez de Tagle the sum of P42,000 as broker's

    commission and (d) pay P20,000 as to attorney's fees (Civil Case No. 8109).

    Bormaheco, Inc. and the Cervantes spouses appealed. Their principal contentions are (a) that no contract of sale was perfected because Cervantes made asupposedly qualified acceptance of the revised offer contained in Exhibit D, which acceptance amounted to a counter-offer, and because the condition thatBormaheco, inc. would acquire the Punta land within the forty-five-day period was not fulfilled; (2) that Bormaheco, Inc. cannot be compelled to sell the landwhich belongs to the Cervantes spouses and (3) that Francisco N. Cervantes did not bind the conjugal partnership and his wife when, as president ofBormaheco, Inc., he entered into negotiations with Villonco Realty Company regarding the said land.

    We hold that the appeal, except as to the issue of damages, is devoid of merit.

    "By the contract of sale one of the contracting parties obligates himself to transfer the ownership of and to deliver a determining thing, and the other to paytherefor a price certain in money or its equivalent. A contract of sale may be absolute or conditional" (Art. 1458, Civil Code).

    "The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. From thatmoment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts" (Art. 1475, Ibid .).

    "Contracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated butalso to all the consequences which, according to their nature, may be in keeping with good faith, usage and law" (Art. 1315, Civil Code).

    "Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. The offer must becertain and the acceptance absolute. A qualified acceptance constitutes a counter-offer" (Art. 1319, Civil Code). "An acceptance may be express or implied"(Art. 1320, Civil Code).

    Bormaheco's acceptance of Villonco Realty Company's offer to purchase the Buendia Avenue property, as shown in Teofilo Villonco's letter dated March 4,1964 (Exh. D), indubitably proves that there was a meeting of minds upon the subject matter and consideration of the sale. Therefore, on that date the salewas perfected. (Compare with McCullough vs. Aenlle & Co., 3 Phil. 285; Goyena vs. Tambunting, 1 Phil. 490). Not only that Bormaheco's acceptance of thepart payment of one hundred ,thousand pesos shows that the sale was conditionally consummated or partly executed subject to the purchase byBormaheco, Inc. of the Punta property. The nonconsummation of that purchase would be a negative resolutory condition (Taylor vs. Uy Tieng Piao, 43 Phil.873).

    On February 18, 1964 Bormaheco's bid for the Punta property was already accepted by the Nassco which had authorized its General Manager to sign thecorresponding deed of sale. What was necessary only was the approval of the sale by the Economic Coordinator and a request for that approval wasalready pending in the office of that functionary on March 4, 1964.

    Bormaheco, Inc. and the Cervantes spouses contend that the sale was not perfected because Cervantes allegedly qualified his acceptance of Villonco'srevised offer and, therefore, his acceptance amounted to a counter-offer which Villonco Realty Company should accept but no such acceptance was evertransmitted to Bormaheco, Inc. which, therefore, could withdraw its offer.

    That contention is not well-taken. It should be stressed that there is no evidence as to what changes were made by Cervantes in Villonco's revised offer. Andthere is no evidence that Villonco Realty Company did not assent to the supposed changes and that such assent was never made known to Cervantes.

    What the record reveals is that the broker, Miss Tagle, acted as intermediary between the parties. It is safe to assume that the alleged changes orqualifications made by Cervantes were approved by Villonco Realty Company and that such approval was duly communicated to Cervantes or Bormaheco,Inc. by the broker as shown by the fact that Villonco Realty Company paid, and Bormaheco, Inc. accepted, the sum of P100,000 as earnest money or down

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    payment. That crucial fact implies that Cervantes was aware that Villonco Realty Company had accepted the modifications which he had made in Villonco'scounter-offer. Had Villonco Realty Company not assented to those insertions and annotations, then it would have stopped payment on its check forP100,000. The fact that Villonco Realty Company allowed its check to be cashed by Bormaheco, Inc. signifies that the company was in conformity with thechanges made by Cervantes and that Bormaheco, Inc. was aware of that conformity. Had those insertions not been binding, then Bormaheco, Inc. would nothave paid interest at the rate of ten percent per annum , on the earnest money of P100,000.

    The truth is that the alleged changes or qualifications in the revised counter offer (Exh. D) are not material or are mere clarifications of what the partieshad previously agreed upon.

    Thus, Cervantes' alleged insertion in his handwriting of the figure and the words "12th and" in Villonco's counter-offer is the same as the statement found inthe voucher-receipt for the earnest money, which reads: "subject to the terms and conditions embodied in Bormaheco's letter of Feb. 12, 1964 and yourletter of March 4, 1964" (Exh. E-1).

    Cervantes allegedly crossed out the word "Nassco" in paragraph 3 of Villonco's revised counter-offer and substituted for it the word "another" so that theoriginal phrase, "Nassco's property in Sta. Ana", was made to read as "another property in Sta. Ana". That change is trivial. What Cervantes did was merelyto adhere to the wording of paragraph 3 of Bormaheco's original offer (Exh. B) which mentions "another property located at Sta. Ana." His obvious purposewas to avoid jeopardizing his negotiation with the Nassco for the purchase of i ts Sta. Ana property by unduly publicizing it.

    It is noteworthy that Cervantes, in his letter to the broker dated April 6, 1964 (Annex 1) or after the Nassco property had been awarded to Bormaheco, Inc.,alluded to the "Nassco property". At that time, there was no more need of concealing from the public that Bormaheco, Inc. was interested in the Nasscoproperty.

    Similarly, Cervantes' alleged insertion of the letters "PA" ( per annum ) after the word "interest" in that same paragraph 3 of the revised counter-offer (Exh. D)could not be categorized as a major alteration of that counter-offer that prevented a meeting of the minds of the parties. It was understood that the partieshad contemplated a rate of ten percent per annum since ten percent a month or semi-annually would be usurious.

    Appellants Bormaheco, Inc. and Cervantes further contend that Cervantes, in clarifying in the voucher for the earnest money of P100,000 that Bormaheco'sacceptance thereof was subject to the terms and conditions embodied in Bormaheco's letter of February 12, 1964 and your (Villonco's) letter of March 4,1964" made Bormaheco's acceptance "qualified and conditional".

    That contention is not correct. There is no incompatibility between Bormaheco's offer of February 12, 1964 (Exh. B) and Villonco's counter-offer of March 4,1964 (Exh. D). The revised counter-offer merely amplified Bormaheco's original offer.

    The controlling fact is that there was agreement between the parties on the subject matter, the price and the mode of payment and that part of the price waspaid. "Whenever earnest money is given in a contract of sale, it shall be considered as part of the price and as proof of the perfection of the contract" (Art.1482, Civil Code).

    "It is true that an acceptance may contain a request for certain changes in the terms of the offer and yet be a binding acceptance. 'So long as it is clear thatthe meaning of the acceptance is positively and unequivocally to accept the offer, whether such request is granted or not, a contract is formed.' " (Stuart vs.Franklin Life Ins. Co., 165 Fed. 2nd 965, citing Sec. 79, Wil liston on Contracts).

    Thus, it was held that the vendor's change in a phrase of the offer to purchase, which change does not essentially change the terms of the offer, does notamount to a rejection of the offer and the tender of a counter-offer (Stuart vs. Franklin Life Ins. Co., supra ).

    The instant case is not governed by the rulings laid down in Beaumont vs. Prieto , 41 Phil. 670, 985, 63 L. Ed. 770, and Zayco vs. Serra , 44 Phil. 326. Inthose two cases the acceptance radically altered the offer and, consequently, there was no meeting of the minds of the parties.

    Thus, in the Zayco case, Salvador Serra offered to sell to Lorenzo Zayco his sugar central for P1,000,000 on condition that the price be paid in cash, or, ifnot paid in cash, the price would be payable within three years provided security is given for the payment of the balance within three years with interest.Zayco, instead of unconditionally accepting those terms, countered that he was going to make a down payment of P100,000, that Serra's mortgageobligation to the Philippine National Bank of P600,000 could be transferred to Zayco's account and that he (plaintiff) would give a bond to secure thepayment of the balance of the price. It was held that the acceptance was conditional or was a counter-offer which had to be accepted by Serra. There wasno such acceptance. Serra revoked his offer. Hence, there was no perfected contract.

    In the Beaumont case, Benito Valdes offered to sell to W Borck the Nagtahan Hacienda owned by Benito Legarda, who had empowered Valdes to sell it.Borck was given three months from December 4, 1911 to buy the hacienda for P307,000. On January 17, 1912 Borck wrote to Valdes, offering to purchase

    the hacienda for P307,000 payable on May 1, 1912. No reply was made to that letter. Borck wrote other letters modifying his proposal. Legarda refused toconvey the property.

    It was held that Borck's January 17th letter plainly departed from the terms of the offer as to the time of payment and was a counter-offer which amounted toa rejection of Valdes' original offer. A subsequent unconditional acceptance could not revive that offer.

    The instant case is different from Laudico and Harden vs. Arias Rodriguez , 43 Phil. 270 where the written offer to sell was revoked by the offer or before theofferee's acceptance came to the offeror's knowledge.

    Appellants' next contention is that the contract was not perfected because the condition that Bormaheco, Inc. would acquire the Nassco land within forty-fivedays from February 12, 1964 or on or before March 28, 1964 was not fulfilled. This contention is tied up with the following l etter of Bormaheco, Inc. (Exh. F):

    BORMAHECO, INC.

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    March 30, 1964

    Villonco Realty CompanyV.R.C. Building219 Buendia Ave.,Makati, Rizal

    Gentlemen:

    We are returning herewith your earnest money together with interest thereon at 10% per annum. Please be informed thatdespite the lapse of the 45 days from February 12, 1964 there is no certainty yet for us to acquire a substitute property, hence

    the return of the earnest money as agreed upon.

    Very truly yours,

    SGD. FRANCISCO N. CERVANTESPresident

    Encl.: P.N.B. Check No. 112994 JP.N.B. Check No. 112996J

    That contention is predicated on the erroneous assumption that Bormaheco, Inc. was to acquire the Nassco land within forty-five days or on or before March28, 1964.

    The trial court ruled that the forty-five-day period was merely an estimate or a forecast of how long it would take Bormaheco, Inc. to acquire the Nassco

    property and it was not "a condition or a deadline set for the defendant corporation to decide whether or not to go through with the sale of its Buendiaproperty".

    The record does not support the theory of Bormaheco, Inc. and the Cervantes spouses that the forty-five-day period was the time within which (a) theNassco property and two Pasong Tamo lots should be acquired, (b) when Cervantes would secure his wife's consent to the sale o f the three lots and (c)when Bormaheco, Inc. had to decide what to do with the DBP encumbrance.

    Cervantes in paragraph 3 of his offer of February 12, 1964 stated that the sale of the Buendia lots would be consummated after he had consummated thepurchase of the Nassco property. Then, in paragraph 5 of the same offer he stated "that final negotiations on both properties can be definitely known afterforty-five days" (See Exh. B).

    It is deducible from the tenor of those statements that the consummation of the sale of the Buendia lots to Villonco Realty Company was conditioned onBormaheco's acquisition of the Nassco land. But it was not spelled out that such acquisition should be effected within forty-five days from February 12, 1964.Had it been Cervantes' intention that the forty-five days would be the period within which the Nassco land should be acquired by Bormaheco, then he wouldhave specified that period in paragraph 3 of his offer so that paragraph would read in this wise: "That this sale is to be consummated only after I shall have

    consummated my purchase of another property located at Sta. Ana, Manila within forty-five days from the date hereof ." He could have also specified thatperiod in his "conforme" to Villonco's counter-offer of March 4, 1964 (Exh. D) so that instead of merely stating "that this sale shall be subject to favorableconsummation of a property in Sta. Ana we are negotiating" he could have said: "That this sale shall be subject to favorable consummation within forty-fivedays from February 12, 1964 of a property in Sta. Ana we are negotiating".

    No such specification was made. The term of forty-five days was not a part of the condition that the Nassco property should be acquired. It is clear that thestatement "that final negotiations on both property can be definitely known after 45 days" does not and cannot mean that Bormaheco, Inc. should acquire theNassco property within forty-five days from February 12, 1964 as pretended by Cervantes. It is simply a surmise that after forty-five days (in fact when theforty-five day period should be computed is not clear) it would be known whether Bormaheco, Inc. would be able to acquire the Nassco property and whetherit would be able to sell the Buendia property. That aforementioned paragraph 5 does not even specify how long after the forty-five days the outcome of thefinal negotiations would be known.

    It is interesting to note that in paragraph 6 of Bormaheco's answer to the amended complaint, which answer was verified by Cervantes, it was alleged thatCervantes accepted Villonco's revised counter-offer of March 4, 1964 subject to the condition that "the final negotiations (acceptance) will have to be madeby defendant within 45 days from said acceptance" (31 Record on Appeal). If that were so, then the consummation of Bormaheco's purchase of the Nasscoproperty would be made within forty-five days from March 4, 1964.

    What makes Bormaheco's stand more confusing and untenable is that in its three answers it invariably articulated the incoherent and vague affirmativedefense that its acceptance of Villonco's revised counter-offer was conditioned on the circumstance "that final acceptance or not shall be made after 45days" whatever that means. That affirmative defense is inconsistent with the other aforequoted incoherent statement in its th ird answer that "the finalnegotiations (acceptance) will have to be made by defendant within 45 days from said acceptance" (31 Record on Appeal). 1wph1.t

    Thus, Bormaheco's three answers and paragraph 5 of his offer of February 12, 1964 do not sustain at all its theory that the Nassco property should beacquired on or before March 28, 1964. Its rescission or revocation of its acceptance cannot be anchored on that theory which, as articulated in its pleadings,is quite equivocal and unclear.

    It should be underscored that the condition that Bormaheco, Inc. should acquire the Nassco property was fulfilled. As admitted by the appellants, the Nasscoproperty was conveyed to Bormaheco, Inc. on June 26, 1964. As early as January 17, 1964 the property was awarded to Bormaheco, Inc. as the highestbidder. On February 18, 1964 the Nassco Board authorized its General Manager to sell the property to Bormaheco, Inc. (Exh. H). The Economic Coordinatorapproved the award on March 24, 1964. It is reasonable to assume that had Cervantes been more assiduous in following up the transaction, the Nasscoproperty could have been transferred to Bormaheco, Inc. on or before March 28, 1964, the supposed last day of the forty-five-day period.

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    The appellants, in their fifth assignment of error, argue that Bormaheco, Inc. cannot be required to sell the three lots in question because they are conjugalproperties of the Cervantes spouses. They aver that Cervantes in dealing with the Villonco brothers acted as president of Bormaheco, Inc. and not in hisindividual capacity and, therefore, he did not bind the conjugal partnership nor Mrs. Cervantes who was allegedly opposed to the sale.

    Those arguments are not sustainable. It should be remembered that Cervantes, in rescinding the contract of sale and in returning the earnest money, citedas an excuse the circumstance that there was no certainty in Bormaheco's acquisition of the Nassco property (Exh. F and Annex 1). He did not say that Mrs.Cervantes was opposed to the sale of the three lots. He did not tell Villonco Realty Company that he could not bind the conjugal partnership. In truth, heconcealed the fact that the three lots were registered "in the name of FRANCISCO CERVANTES, Filipino, of legal age, married to Rosario P. Navarro, asowner thereof in fee simple". He certainly led the Villonco brothers to believe that as president of Bormaheco, Inc. he could dispose of the said lots. Heinveigled the Villoncos into believing that he had untrammelled control of Bormaheco, Inc., that Bormaheco, Inc. owned the lots and that he was investedwith adequate authority to sell the same.

    Thus, in Bormaheco's offer of February 12, 1964, Cervantes first identified the three lots as " our property" which "we are offering to sell ..." (Openingparagraph and par. 1 of Exh. B). Whether the prounoun "we" refers to himself and his wife or to Bormaheco, Inc. is not clear. Then, in paragraphs 3 and 4 ofthe offer, he used the first person and said: "I shall have consummated my purchase" of the Nassco property; "... my negotiations with said property" and "Iwill return to you your deposit". Those expressions conveyed the impression and generated the belief that the Villoncos did not have to deal with Mrs.Cervantes nor with any other official of Bormaheco, Inc.

    The pleadings disclose that Bormaheco, Inc. and Cervantes deliberately and studiously avoided making the allegation that Cervantes was not authorized byhis wife to sell the three lots or that he acted merely as president of Bormaheco, Inc. That defense was not interposed so as not to place Cervantes in theridiculous position of having acted under false pretenses when he negotiated with the Villoncos for the sale of the three lots.

    Villonco Realty Company, in paragraph 2 of its original complaint, alleged that "on February 12, 1964, after some prior negotiations, the defendant(Bormaheco, Inc.) made a formal offer to sell to the plaintiff the property of the said defendant situated at the abovenamed address along Buendia Avenue,Makati, Rizal, under the terms of the letter-offer, a copy of which is hereto attached as Annex A hereof", now Exhibit B (2 Record on Appeal).

    That paragraph 2 was not, repeat, was not denied by Bormaheco, Inc. in its answer dated May 5, 1964. It did not traverse that paragraph 2. Hence, it was

    deemed admitted. However, it filed an amended answer dated May 25, 1964 wherein it denied that it was the owner of the three lots. It revealed that thethree lots "belong and are registered in the names of the spouses Francisco N. Cervantes and Rosario N. Cervantes."

    The three answers of Bormaheco, Inc. contain the following affirmative defense:

    13. That defendant's insistence to finally decide on the proposed sale of the land in question after 45 days had not only for itspurpose the determination of its acquisition of the said Sta. Ana (Nassco) property during the said period, but also to negotiatewith the actual and registered owner of the parcels of land covered by T.C.T. Nos. 43530, 43531 and 43532 in question whichplaintiff was fully aware that the same were not in the name of the defendant (sic; Par. 18 of Answer to Amended Complaint,10, 18 and 34, Record on Appeal).

    In that affirmative defense, Bormaheco, Inc. pretended that it needed forty- five days within which to acquire the Nassco property and "to negotiate" with theregistered owner of the three lots. The absurdity of that pretension stands out in bold relief when it is borne in mind that the answers of Bormaheco, Inc.were verified by Cervantes and that the registered owner of the three lots is Cervantes himself. That affirmative defense means that Cervantes as presidentof Bormaheco, Inc. needed forty-five days in order to "negotiate" with himself (Cervantes).

    The incongruous stance of the Cervantes spouses is also patent in their answer to the amended complaint. In that answer they disclaimed knowledge orinformation of certain allegations which were well-known to Cervantes as president of Bormaheco, Inc. and which were admitted in Bormaheco's threeanswers that were verified by Cervantes.

    It is significant to note that Bormaheco, Inc. in its three answers, which were verified by Cervantes, never pleaded as an affirmative defense that Mrs.Cervantes opposed the sale of the three lots or that she did not authorize her husband to sell those lots. Likewise, it should be noted that in their separateanswer the Cervantes spouses never pleaded as a defense that Mrs. Cervantes was opposed to the sale of three lots or that Cervantes could not bind theconjugal partnership. The appellants were at first hesitant to make it appear that Cervantes had committed the skullduggery of trying to sell property whichhe had no authority to alienate.

    It was only during the trial on May 17, 1965 that Cervantes declared on the witness stand that his wife was opposed to the sale of the three lots, a defensewhich, as already stated, was never interposed in the three answers of Bormaheco, Inc. and in the separate answer of the Cervantes spouses. That sameviewpoint was adopted in defendants' motion for reconsideration dated November 20, 1965.

    But that defense must have been an afterthought or was evolved post litem motam since it was never disclosed in Cervantes' letter of rescission and in hisletter to Miss Tagle (Exh. F and Annex 1). Moreover, Mrs. Cervantes did not testify at the trial to fortify that defense which had already been waived for nothaving been pleaded (See sec. 2, Rule 9, Rules of Court).

    Taking into account the situation of Cervantes vis-a-vis Bormaheco, Inc. and his wife and the fact that the three lots were entirely occupied by Bormaheco'sbuilding, machinery and equipment and were mortgaged to the DBP as security for its obligation, and considering that appellants' vague affirmative defensesdo not include Mrs. Cervantes' alleged opposition to the sale, the plea that Cervantes had no authority to sell the lots strains the rivets of credibility (Cf. Papaand Delgado vs. Montenegro, 54 Phil. 331; Riobo vs. Hontiveros, 21 Phil. 31).

    "Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith" (Art. 1159, Civil Code).Inasmuch as the sale was perfected and even partly executed, Bormaheco, Inc., and the Cervantes spouses, as a matter of justice and good faith, arebound to comply with their contractual commitments.

    Parenthetically, it may be observed that much misunderstanding could have been avoided had the broker and the buyer taken the trouble of making someresearch in the Registry of Deeds and availing themselves of the services of a competent lawyer in drafting the contract to sell.

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    Bormaheco, Inc. and the Cervantes spouses in their sixth assignment of error assail the trial court's award to Villonco Realt y Company of consequentialdamage amounting to ten thousand pesos monthly from March 24, 1964 (when the Economic Coordinator approved the award of the Nassco property toBormaheco, Inc.) up to the consummation of the sale. The award was based on paragraph 18 of the stipulation of facts wherein Villonco Realty Company"submits that the delay in the consummation of the sale" has caused it to suffer the aforementioned damages.

    The appellants contend that statement in the stipulation of facts simply means that Villonco Realty Company speculates that it has suffered damages but itdoes not mean that the parties have agreed that Villonco Realty Company is entitled to those damages.

    Appellants' contention is correct. As rightly observed by their counsel, the damages in question were not specifically pleaded and proven and were "clearlyconjectural and speculative".

    However, appellants' view in their seventh assignment of error that the trial court erred in ordering Bormaheco, Inc. to pay Villonco Realty Company the sumof twenty thousand pesos as attorney's fees is not tenable. Under the facts of the case, it is evident that Bormaheco, Inc. acted in gross and evident bad faithin refusing to satisfy the valid and just demand of Villonco Realty Company for specific performance. It compelled Villonco Realty Company to incureexpenses to protect its interest. Moreover, this is a case where it is just and equitable that the plaintiff should recover attorney's fees (Art. 2208, Civil C ode).

    The appellants in their eighth assignment of error impugn the trial court's adjudication of forty-two thousand pesos as three percent broker's commission toMiss Tagle. They allege that there is no evidence that Bormaheco, Inc. engaged her services as a broker in the projected sale of the three lots and theimprovements thereon. That allegation is refuted by paragraph 3 of the stipulation of facts and by the documentary evidence. It was stipulated that MissTagle intervened in the negotiations for the sale of the three lots. Cervantes in his original offer of February 12, 1964 apprised Villonco Realty Company thatthe earnest money should be delivered to Miss Tagle, the bearer of the letter-offer. See also Exhibit G and Annex I of the stipulation of facts.

    We hold that the trial court did not err in adjudging that Bormaheco, Inc. should pay Miss Tagle her three percent commission.

    WHEREFORE, the trial court's decision is modified as follows:

    1. Within ten (10) days from the date the defendants-appellants receive notice from the clerk of the lower court that the records of this case have beenreceived from this Court, the spouses Francisco N. Cervantes and Rosario P. Navarra-Cervantes should execute a deed conveying to Bormaheco, Inc. theirthree lots covered by Transfer Certificate of Title Nos. 43530, 43531 and 43532 of the Registry of Deeds of Rizal.

    2. Within five (5) days from the execution of such deed of conveyance, Bormaheco, Inc. should execute in favor of Villonco Realty Company, V. R. C.Building, 219 Buendia Avenue, Makati, Rizal a registerable deed of sale for the said three lots and all the improvements thereon, free from all lien andencumbrances, at the price of four hundred pesos per square meter, deducting from the total purchase price the sum of P100,000 previously paid byVillonco Realty Company to Bormaheco, Inc.

    3. Upon the execution of such deed of sale, Villonco Realty Company is obligated to pay Bormaheco, Inc. the balance of the price in the sum of one millionthree hundred thousand pesos (P1,300,000).

    4. Bormaheco, Inc. is ordered (a) to pay Villonco Realty Company twenty thousand pesos (P20,000) as attorney's fees and (b) to pay Edith Perez de Taglethe sum of forty-two thousand pesos (P42,000) as commission. Costs against the defendants-appellants.-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    G.R. No. L-36083 September 5, 1975Spouses RAMON DOROMAL, SR., and ROSARIO SALAS, and Spouses RAMON DOROMAL, JR., and GAUDELIA VEGA, petitioners, vs. HON.COURT OF APPEALS and FILOMENA JAVELLANA, respondents

    Petition for review of the decision of the Court of Appeals in CA-G.R. No. 47945-R entitled Filomena Javellana vs. Spouses Ramon Doromal, Sr., et al.which reversed the decision of the Court of First Instance of Iloilo that had in turn dismissed herein private respondent Filomena Javellana's action forredemption of a certain property sold by her co-owners to herein petitioners for having been made out of time.

    The factual background found by the Court of Appeals and which is binding on this Court, the same not being assailed by petitioners as being capricious, isas follows:

    IT RESULTING: That the facts are quite simple; Lot 3504 of the cadastral survey of Iloilo, situated in the poblacion of La Pa z,one of its districts, with an area of a little more than 2- hectares was originally decreed in the name of the late Justice

    Antonio Horilleno, in 1916, under Original Certificate of Title No. 1314, Exh. A; but before he died, on a date not particularizedin the record, he executed a last will and testament attesting to the fact that it was a co-ownership between himself and his

    brothers and sisters, Exh. C; so that the truth was that the owners or better stated, the co -owners were; beside JusticeHorilleno,

    "Luis, Soledad, Fe, Rosita, Carlos and Esperanza,"

    all surnamed Horilleno, and since Esperanza had already died, she was succeeded by her only daughter and heir hereinplaintiff. Filomena Javellana, in the proportion of 1/7 undivided ownership each; now then, even though their right had not asyet been annotated in the title, the co-owners led by Carlos, and as to deceased Justice Antonio Horilleno, his daughter Mary,sometime since early 1967, had wanted to sell their shares, or if possible if Filomena Javellana were agreeable, to sell theentire property, and they hired an acquaintance Cresencia Harder, to look for buyers, and the latter came to interestdefendants, the father and son, named Ramon Doromal, Sr. and Jr., and in preparation for the execution of the sale, since thebrothers and sisters Horilleno were scattered in various parts of the country, Carlos in Ilocos Sur, Mary in Baguio, Soledadand Fe, in Mandaluyong, Rizal, and Rosita in Basilan City, they all executed various powers of attorney in favor of their niece,Mary H. Jimenez Exh. 1-8, they also caused preparation of a power of attorney of identical tenor for signature by plaintiff,Filomena Javellana, Exh. M, and sent it with a letter of Carlos, Exh. 7 dated 18 January, 1968 unto her thru Mrs. Harder, andhere, Carlos informed her that the price was P4.00 a square meter, although it now turns out according to Exh. 3 that as

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    early as 22 October, 1967, Carlos had received in check as earnest money from defendant Ramon Doromal, Jr., the sum ofP5,000.00 and the price therein agreed upon was five (P5.00) pesos a square meter as indeed in another letter also of Carlosto Plaintiff in 5 November, 1967, Exh. 6, he had told her that the Doromals had given the earnest money of P5,000.00 atP5.00 a square meter, at any rate, plaintiff not being agreeable, did not sign the power of attorney, and the rest of the co-owners went ahead with their sale of their 6/7, Carlos first seeing to it that the deed of sale by their common attorney in fact,Mary H. Jimenez be signed and ratified as it was signed and ratified in Candon, Ilocos Sur, on 15 January, 1968, Exh. 2, thenbrought to Iloilo by Carlos in the same month, and because the Register of Deeds of Iloilo refused to register right away, sincethe original registered owner, Justice Antonio Horilleno was already dead, Carlos had to ask as he did, hire Atty. Teotimo

    Arandela to file a petition within the cadastral case, on 26 February, 1968, for the purpose, Exh. C, after which Carlos returnedto Luzon, and after compliance with the requisites of publication, hearing and notice, the petition was approved, and we nowsee that on 29 April, 1968, Carlos already back in Iloilo went to the Register of Deeds and caused the registration of the orderof the cadastral court approving the issuance of a new title in the name of the co-owners, as well as of the deed of sale to theDoromals, as a result of which on that same date, a new title was issued TCT No. 23152, in the name of the Horillenos to 6/7

    and plaintiff Filomena Javellana to 1/7, Exh. D, only to be cancelled on the same day under TCT No. 23153, Exh. 2, already inthe names of the vendees Doromals for 6/7 and to herein plaintiff, Filomena Javellana, 1/7, and the next day 30 April, 1968,the Doromals paid unto Carlos by check, the sum of P97,000.00 Exh. 1, of Chartered Bank which was later substituted bycheck of Phil. National Bank, because there was no Chartered Bank Branch in Ilocos Sur, but besides this amount paid incheck, the Doromals according to their evidence still paid an additional amount in cash of P18,250.00 since the agreed pricewas P5.00 a square meter; and thus was consummated the transaction, but it is here where complications set in,

    On 10 June, 1968, there came to the residence of the Doromals in Dumangas, Iloilo, plaintiff's lawyer, Atty. Arturo H. Villanueva, bringing with him her letterof that date, reading,

    "P.O. Box 189, BacolodCityJune 10, 1968

    Mr. & Mrs. Ramon Doromal, Sr.

    and Mr. and Mrs. Ramon Doromal, Jr.

    "Dumangas Iloilo

    Dear Mr. and Mrs. Doromal:

    The bearer of this letter is my nephew, Atty. Arturo H. Villanueva, Jr., of this City. Through him, I ammaking a formal offer to repurchase or redeem from you the 6/7 undivided share in Lot No. 3504, of theIloilo Cadastre, which you bought from my erstwhile co-owners, the Horillenos, for the sum of P30,000.00,

    Atty. Villanueva has with him the sum of P30,000.00 in cash, which he will deliver to you as soon as youexecute the contract of sale in my favor.

    Thank you very much for whatever favorable consideration you can give this request.

    Very truly yours,

    (SIGNED)Mrs. FILOMENAJAVELLANA"

    p. 26, Exh. "J", Manual of Exhibits.

    and then and there said lawyer manifested to the Doromals that he had the P30,000.00 with him in cash, and tendered it tothem, for the exercise of the legal redemption, the Doromals were aghast, and refused. and the very next day as has beensaid. 11 June, 1968, plaintiff filed this case, and in the trial, thru oral and documentary proofs sought to show that as co-owner, she had the right to redeem at the price stated in the deed of sale, Exh. 2, namely P30,000.00 of the but defendants inanswer, and in their evidence, oral and documentary sought to show that plaintiff had no more right to redeem and that if evershe should have, that it should be at the true and real price by them paid, namely, the total sum of P115,250.00, and trial

    judge, after hearing the evidence, believed defendants, that plaintiff had no more right, to redeem, because,

    "Plaintiff was informed of the intended sale of the 6/7 share belonging to the Horillenos."

    and that,

    "The plaintiff have every reason to be grateful to Atty. Carlos Horilleno because in the petition for declaration of heirs of herlate uncle Antonio Horilleno in whose name only