Adelfa Properties Inc. v. Court of Appeals
Private respondents were the co-owners of a parcel of land with their two brothers, Jose and Dominador Jimenez. Jose and Dominador Jimenez sold the east portion of the lot to petitioner accompanied by an extrajudicial partition of the property with the west portion allotted to private respondents. After the sale, Petitioner and private respondents entered into an “Exclusive Option to Purchase” in favor of the former over the west portion of the land. In the said contract, petitioner paid Php50,000.00 as option money, but the stipulation states that it would form part of the purchase price.
The owner’s duplicate of private respondents were lost so they initiated reconstitution proceedings represented by petitioner’s lawyer. Pursuant to this, the reconsitituted title remained in the possession of the lawyer.
The nieces and nephews of the Jimenezes filed an action to annul the sale of the east portion of the land to petitioner. Pursuant to this, petitioner suspended the payment of the full purchase price because of the vindicatory action filed by the niece and nephews which it duly informed the private respondents.
The suit however was dismissed. After the dismissal, the petitioner sent a letter to private respondents conveying its intention to pay the full price. However, the private respondents ignored the offer since it already sold the said lot to another person. The private respondents sought the recovery of the title of the land from the petitioner but the latter did not comply, the former filed an action to recover the same.
The Petitioner alleged that they were justified to suspend the payment of the price since there was a valid vindicatory action under Art 1590 of the Civil Code. On the other hand, private respondents countered, saying that the contract was a mere option contract and thus Art 1590 is not applicable.
The RTC ruled in favor of private respondents. The CA affirmed in toto.
- Whether or not the contract was a mere option contract
- Whether or not the suspension of payment was justified
1. No. Although the title of the contract was “Exclusive Option to Purchase” the SC finds that the real nature of the contract was a contract to sell. It did not clearly explain why it just said that it was evident that the real intention of the parties was that the contract of sale will be only executed upon the full payment of the price.
2. Pursuant to the finding of the SC that the contract was a contract to sell, it said that Art 1590 was applicable and the suspension of payment made by petitioner was justified. It is because the vindicatory action does not only cover the east portion of the land that was the subject of the contract of sale between petitioner and Jose and Dominador. The niece and nephews also sought their rights over the west part of the land.
Although the suspension of payment was justified, private respondents cannot anymore be compelled to sell the land petitioner. This is because the mere conveyance of the intention to pay is not a valid mode of payment. The petitioner was not able to consign the price to the court. A tender of payment not accompanied by the payment of the purchase price does not extinguish an obligation contemplated by the Civil Code.