Case Digest (G.R. No. L-28862)
Facts:
Leon de Guzman and Genoveva Rodriguez de Guzman, G.R. No. L-28862. November 24, 1972, the Supreme Court En Banc, Barredo, J., writing for the Court. The action below originated as Civil Case No. 58116 in the Court of First Instance of Manila, an action for quieting of title over a home-lot; the trial court dismissed the plaintiffs-appellants' complaint. The case was taken to the Court of Appeals but was certified to the Supreme Court because the issues presented were purely legal.The parties stipulated the material facts. In 1948 defendants, as bona fide tenants of the Ana Sarmiento Estate, acquired a right to purchase the parcel. On November 20, 1954 the defendants sold and transferred their rights under the tenancy-purchase agreement to Teodoro R. de Guzman (son of the plaintiffs); the Director of Lands approved the transfer and later issued a Deed of Absolute Sale and Transfer Certificate of Title (TCT No. 38058) in Teodoro's name with an annotation that the property could not be sold, mortgaged or encumbered within five years without the Land Tenure Administration's written consent. Tax declarations were likewise transferred to Teodoro.
Simultaneously with the 1954 deed of sale an Option to Purchase Real Property (Exhibit 1) was executed in favor of defendant Francisca T. Guieb, giving her a five‑year option (to November 21, 1959) to buy for P4,000, with a monthly rental of P40 and a clause that six months' consecutive nonpayment would render the option null and void. During the option period defendants fell into arrears at various times (six months to two years), though by the end of the first option period all rentals had been made up.
Documents show subsequent option instruments: a June 1959 option (Exhibit D, duplicate) and an October 5, 1959 option (Exhibit 16), the latter being in the same terms as Exhibit 1 but not notarized and without witnesses. After these instruments were executed defendants continued to pay rentals to Teodoro; upon his death on March 20, 1964 the plaintiffs acquired the property by extrajudicial partition and a new transfer certificate (TCT No. 75800) was issued to them on July 13, 1964, the restrictive annotation still appearing.
On July 31, 1964 defendant Francisca sought to exercise the option and tendered P4,040 (P4,000 purchase price plus P40 current rent) to plaintiff Genoveva Rodriguez, who refused to accept the payment and a letter. Defendant sent the letter by registered mail (received August 5, 1964), filed an Adverse Claim with the Register of Deeds (August 5, 1964), and later filed a specific performance with consignation action in the City Court of Manila (Civil Case No. 126601), consigning P4,040; plaintiffs thereafter filed an ejectment case (Civil Case No. 128123). The trial court framed the legal questions as (1) whether Exhibit 16 was a renewal of Exhi...(Pro-only)
Issues:
- Is the October 5, 1959 instrument (Exhibit 16) an enforceable option to purchase despite not being notarized or executed in the presence of witnesses, within the meaning of Article 1403(2) of the Civil Code?
- Did the defendants' failure to pay rentals for prolonged periods (including a 45‑month backlog) extinguish their right to exercise the option under the option agreem...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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