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Limson v. Court of Appeals GR No.

135929, April 20, 2001 Topic in


)ACT ! This is a Petition for Review on Certiorari to review, reverse and set aside the Decision of the Court of Appeals which reversed the Decision of the Regional Trial Court. The petitioner likewise assails the Resolution of the appellate court denying petitioner's Motion for Reconsideration. Petitioner Lourdes ng Li!son and respondent spouses Loren"o de #era and Asuncion $antos%de #era agreed that petitioner would &uy a parcel of land owned &y respondents. n '( )uly (*+,, petitioner paid P-.,... as /earnest !oney/0 respondents signed a receipt and gave her a (.%day option period to purchase the property. The parties agreed to !eet on August 1 and August ((, &ut failed to consu!!ate the sale &ecause the respondent spouses did not appear. Petitioner soon learned that su&2ect propery was also under negotiation with respondent spouses and with $unvar Realty Develop!ent Corporation 3$45#AR6. n (1 $epte!&er (*+,, Li!son filed an affidavit of Adverse Claim with the ffice of the Registry of Deeds and infor!ed $45#AR. TCT 5.. $%+-'++ was issued on -7 $epte!&er (*+, in favor of $45#AR with the adverse Claim of petitioner annotated thereon. Petitioner clai!ed that the Deed of Sale should &e annuled, that TCT 5o. $%+-'++ &e canceled and ownership &e restored to respondent spouses, and that a Deed of Sale &e e8ecuted in favor of her. The Regional Trial Court rendered its Decision in favor of petitioner. n appeal, the Court of Appeals co!pletely reversed the decision of the trial court. Petitioner ti!ely filed a 9otion for Reconsideration which was denied &y the Court of Appeals on (* cto&er (**,. :ence, this petition. * +" !

ales! "arnest #one$ v. %ption #one$ & Art. 1'(2

3(6 ;hether or not there was a perfected contract to sell &etween petitioner and respondent spouses. 3-6 ;hether or not the P-.,... paid &y Li!son represented /earnest !oney/. R+L*NG! 3(6 5o, there was no perfected contract to sell. A scrutiny of the facts as well as the evidence of the parties overwhel!ingly leads to the conclusion that the agree!ent &etween the parties was a contract of option and not a contract to sell. An option, as used in the law of sales, is a continuing offer or contract &y which the owner sitpulates with another that the latter shall have the right to &uy the property at a fi8ed price within a ti!e certain, or under, or in co!pliance with, certain ter!s and conditions, or which gives to the owner of the property the right to sell or de!and a sale. <t is also so!eti!es called an /unaccepted offer./ An option is not itself a purchase, &ut !erely secures the privilege to &uy. , <t is not a sale of property &ut a sale of right to purchase. * <t is si!ply a contract &y which the owner of property agrees with another person that he shall have the right to &uy his property at a fi8ed price within a certain ti!e. :e does not sell his land0 he does not then agree to sell it0 &ut he does not sell so!ething, i.e., the right or privilege to &uy at the election or option of the other party. (. <ts distinguishing characteristic is that it i!poses no &inding o&ligation on the person holding the option, aside fro! the consideration for the offer. 4ntil acceptance, it is not, properly speaking, a

contract, and does not vest, transfer, or agree to transfer, any title to, or any interest or right in the su&2ect !atter, &ut is !erely a contract &y which the owner of the property gives the optionee the right or privilege of accepting the offer and &uying the property on certain ter!s. (( n the other hand, a contract, like a contract to sell, involves the !eeting of !inds &etween two persons where&y one &inds hi!self, with respect to the other, to give so!ething or to render so!e service.(- Contracts, in general, are perfected &y !ere consent, (' which is !anifested &y the !eeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. The offer !ust &e certain and the acceptance a&solute.( 3-6 5o, the !oney paid &y petitioner was not earnest !oney &ut option !oney. /=arnest !oney/ and /option !oney/ are not the sa!e &ut distinguished thus0 3a6 earnest !oney is part of the purchase price, while option !oney is the !oney given as a distinct consideration for an option contract0 3&6 earnest !oney given only where there is already a sale, while option !oney applies to a sale not yet perfected0 and, 3c6 when earnest !oney is given, the &uyer is &ound to pay the &alance, while when the would%&e &uyer gives option !oney, he is not re>uired to &uy, (, &ut !ay even forfeit it depending on the ter!s of the option. There is nothing in the Receipt which indicates that the P-.,...... was part of the purchase price. 9oreover, it was not shown that there was a perfected sale &etween the parties where earnest !oney was given. ?inally, when petitioner gave the /earnest !oney/ the Receipt did not reveal that she was &ound to pay the &alance of the purchase price. <n fact, she could even forfeit the !oney given if the ter!s of the option were not !et. Thus, the P-.,...... could only &e !oney given as consideration for the option contract. ?inally, the Receipt provided for a period within which the option to &uy was to &e e8ercised, i.e., /within ten 3(.6 days/ fro! '( )uly (*+,. n or &efore (. August (*+,, the last day of the option period, no affir!ative or clear !anifestation was !ade &y petitioner to accept the offer. Certainly, there was no concurrence of private respondent spouses@ offer and petitioner@s acceptance thereof within the option period. Conse>uently, there was no perfected contract to sell &etween the parties. n (( August (*+, the option period e8pired and the e8clusive right of petitioner to &uy the property of respondent spouses ceased. ,-"R")%R", the petition is ."N*".. The decision of the Court of Appeals ordering the Register of Deeds of 9akati City to lift the adverse clai! and such other encu!&rances petitioners Lourdes ng Li!son !ay have filed or caused to &e annotated on TCT 5o. $%+1'++ is A))*R#"., with the #%.*)*CAT*%N that the award of no!inal and e8e!plary da!ages as well as attorney@s fees is ."L"T"..

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