MANILA METAL VS.
PNB  PNB President did not conform to the letter but merely
511 SCRA 444
DECEMBER 20, 2006
FACTS:
 Manila Metal Corp. executed a real estate mortgage (TCT.
32098) as a security for its loan from PNB amounting to 900,000
php, later on 1,000,000 php and 653,000 php
 Aug. 5, 1982: PNB filed a petition for extrajudicial foreclosure
for the property to be sold at a public auction 911,532.21 php
(outstanding as of June 30) + interest + attorney's fees
 Sept. 2, 1982: PNB won the public auction at 1,000,000 php
 Feb. 17, 1983: Certificate of Sale was issued and registered at
the Registry of Deeds and was annotated at the dorsal portion of
the title (Redeemable until Feb 17,1983)
 Petitioner requested 1year extension until Feb 17,1984 but was
rejected by PNB saying it is their policy not to accept partial
redemption
 Jun. 1,1984: Since petitioner failed to redeem, TCT. 32098 was
cancelled and a new title was issued in favor of PNB
 Meanwhile, Special Assets Management Department (SAMD)
had prepared a statement of account as of Jun 25,1984 amounting
to 1,574,560.47 php (bid price + interest + advances of insurance
premiums + advances on relaty taxes + reg. exp. +misc. exp +
piblication cost)
 Petitioner deposited 725,000 php as deposit to repurchase and
was issued an O.R.
 PNB management rejected the recommendation of SAMD and
demanded that petitioner pay the markt value of 2,660,000 php.
 Jun 24, 1984: PNB informed petitioner that its B.O.D had
agreed to accept its offer to purchase but at 1,931,389.53 less the
725,000 php.
indicated that he has received it.
 Petitioner rejected this since PNB has already accepted
its downpayment so it can no longer increase the price.
 PNB also rejected petitioners payment for the balance.
 Petitioner filed a complaint against PNB for Annulment of
Mortgage and Mortgage Foreclosure, Delivery of Title, or Specific
Performance with Damages
 CA affirmed RTC: Favored PNB and demanded that it refund
the 725,000 php (no sale because no meeting of the minds in
terms of price)
 Lot was later transferred to its PNB President Bayani Gabriel
 Petitioner filed a petition for certiorari
ISSUE:
1. W/N there was a contract of sale - NO
2. W/N earnest money establishes a contract of sale - NO
HELD: Denied. Costs Against Petitioner.
1. NO
Section 23 of the Corporation Code:
corporate powers of all corporations shall be exercised by the board of
directors. Just as a natural person may authorize another to do certain
acts in his behalf, so may the board of directors of a corporation validly
delegate some of its functions to individual officers or agents appointed
by it. Thus, contracts or acts of a corporation must be made either by
the board of directors or by a corporate agent duly authorized by the
board.
Absent such valid delegation/authorization, the rule is that the
declarations of an individual director relating to the affairs of the
corporation, but not in the course of, or connected with the
performance of authorized duties of such director, are held not binding
on the corporation. A corporation can only execute its powers and
transact its business through its:
 Board of Directors
 officers and agents when authorized by:
 a board resolution;or
 its by-laws
2. NO
 ART. 1482. 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
 The deposit of P725,000 was accepted by PNB on the
condition that the purchase price is still subject to the approval
of the PNB Board
 Absent proof of the concurrence of all the essential elements of
a contract of sale, the giving of earnest money cannot establish
the existence of a perfected contract of sale.
TAYAG VS LACSON
G.R. No. 134971
MARCH 25, 2004
Doctrine: “We do not agree with the contention of the petitioner that
the deeds of assignment executed by the defendants-tenants are
perfected option contracts.43 An option is a contract by which the
owner of the property agrees with another person that he shall have
the right to buy his property at a fixed price within a certain time. It is a
condition offered or contract by which the owner stipulates with
another that the latter shall have the right to buy the property at a fixed
price within a certain time, or under, or in compliance with certain
terms and conditions, or which gives to the owner of the property the
right to sell or demand a sale. It imposes no binding obligation on the
person holding the option, aside from the consideration for the offer.
Until accepted, it is not, properly speaking, treated as a contract. 44 The
second party gets in praesenti, not lands, not an agreement that he
shall have the lands, but the right to call for and receive lands if he
elects.45 An option contract is a separate and distinct contract from
which the parties may enter into upon the conjunction of the option.”
FACTS:
- March 17, 1996, a group of original farmers individually executed in
favour of the petitioner separate Deeds of Assignments; assignees
assigned respective rights as tenants of the landholdings, for Php
50.00 per sqm.
- Petitioner also granted exclusive right to buy if and when the
respondents, with concurrence of defendants-tenants, agreed to sell
the property.
- July 24, 1996, petitioner called a meeting to discuss agreements.
August 8, 1996, defendants-tenants, c/o Joven Mariano, told petitioner
that they will not attend and gave notice of their selling their rights to
landowners.
- August 19, 1996, petitioner filed a complaint against defendants-
tenants and respondents for the court to fix a period within which to
pay agreed purchase price.
- Petitioner prayed for an Injunction prohibiting, restraining defendants-
tenants from rescinding their contracts, so as to prevent irreparable
damages to the petitioner.
- Defendants alleged in their answer that the money received from
petitioner are loans. And that they did not know that what they signed
was a Deed of Assignment. They were led to think that they were
signing receipts to their loans. (consent was vitiated)
- Defendants-tenants have no right to transfer interest in property as
they have no right to the property, there contract is null and void.
- RTC granted injunction, defendants appealed to the CA, Tayag
appealed to the SC
ISSUE: Whether the Deeds of Assignments issued were valid Option
Contracts
RTC DECISION: granted petitioner an Injunction as he is duly entitled
to one since respondents and defendants are yet to produce
controverting evidence.
CA DECISION: April 1998, CA decided against Tayag (petitioner)
annulling the injunction granted, and enjoining RTC (preventing) to
continue with the case.
SC DECISION:
- Respondents choosing not to adduce evidence is their right, therefore
not a ground for grant of injunction
- Respondents (Lacsons) not party to the alleged option contract.
Tayag admitted he did not know any of the respondents.
- “Unless and until the DAR approved said deeds, …, petitioner had no
right to enforce the same in a court of law by asking the RTC to fix a
period w/in which to pay the balance of the purchase price …”
- “Not being registered owners of the property, the defendants-tenants
could not legally grant to the petitioner the option, much less the
“exclusive right” to buy the property. As the latin saying goes, “NEMO
DAT QUOD NON HABET.”
- IN LIGHT OF ALL THE FOREGOING:
1. Tayag not entitled to injunction
2. Injunction on defendants-tenants is nullified and lifted
3. RTC of Mabalacat, Pampanga is ORDERED to continue with
the proceedings.
ADELFA VS. CA
240 SCRA 565
JANUARY 25, 1995
FACTS:
Private respondents and their brothers Jose and Dominador
Jimenez were registered owners of a parcel of land in Las Piñas. Jose
and Dominador sold their share (1/2 parcel of land) pursuant to
“Kasulatan sa Bilihan ng Lupa” to petitioner, Adelfa Properties. Eastern
portion belonged to them while western portion belonged to Rosario
and Salud. Adelfa Properties (now owners of eastern portion)
expressed interest in buying the western portion by executing
“Exclusive Option to Purchase” with ₱50,000.00 as option money.
Before petitioner could make payment, it received summons
that the nephews and nieces of private respondents filed an annulment
of deed of sale. As a result, petitioner withheld payment of full
purchase price. Salud attributed the suspension of payment to “lack of
word of honor.” Francisca Jimenez was sent to see the counsel of
petitioner to inform him that they were cancelling the transactions.
Subsequently, a Deed of Conditional Sale was executed in favor of
Emylene Chua. Private respondents’ counsel sent ₱25,000.00 refund
of the option money.
According to the RTC, agreement entered into was merely an
option contract and the suspension of payment by petitioner is a
counter-offer which is tantamount to a rejection of option. Thus, the
sale to Chua was valid.
CA ruled that failure of petitioner to pay the purchase price in
the period agreed upon was tantamount to election not to buy such
land.
ISSUE: Is the agreement between Adelfa Properties and private
respondents strictly an option contract?
HELD:
The contract between the parties is a contract to sell and not an
option contract nor a contract of sale. Two features which convince that
parties never intended to transfer ownership except upon full payment
of purchase price:
(1) the exclusive option to purchase does not mention that
petitioner is obliged to return possession or ownership of
property as consequence of non-payment; and
(2) no delivery, actual or constructive, was made to petitioner;
option to purchase was not included in a public instrument
which would have effect of delivery.
Neither did petitioner take actual, physical possession of the
property at any given time. With this regard, there was an implied
agreement that ownership shall not pass to the purchaser until he had
fully paid the price. Also, the alleged option money was actually
earnest money since the amount was not distinct from the cause or
consideration for the sale of the property, but was itself a part thereof.
 VILLAMOR VS CA
G.R. No. 97332
OCTOBER 10, 1991

SANCHEZ VS RIGOS GRL-25494 6) DIAMANTE VS CA GRL-

51824(1992) 7) BIBLE BAPTIST VS CA GR126454(2004) 8 )
VASQUEZ VS CA GR83759(1991) 9) ANG YU ASUNCION VS CA
GR109125 10) EQUATORIAL REALTY VS MAYFAIR THEATER
264SCRA483(1996) 11) POLYTECHNIC VS GOLDEN HORIZON
GR183612 12) PARANAQUE KINGS VS CA GR111538 13)
ROSENCOR VS PATERNO INQUING GR140479(2001) 14)
VASQUEZ VS AYALA CORP GR147374(2004) 15) LIMKETKAI VS
CA GR118509 16) SECUYA VS DE SELMA GR136021 17) HEIRS OF
BIONA VS CA GR105647 18) SPS. ALFREDO VS SPS. BORRAS
GR144225