Soriano v. Bautista
REITERATIONFacts
The Antecedents: Spouses Basilio Bautista and Sofia de Rosas (appellants) were the registered owners of a parcel of land. On May 30, 1956, they executed a "Kasulatan Ng Sanglaan" (Deed of Mortgage) in favor of Ruperto Soriano and Olimpia de Jesus (appellees) for P1,800.00, with the agreement that the mortgage would last for two years, the produce of the land would go to the mortgagees as interest, and the mortgagors would pay the taxes. Crucially, the deed contained a stipulation that the mortgagees could purchase the land absolutely within the two-year period for P3,900.00. Simultaneously, possession of the land was transferred to the appellees. Appellants later received P450.00 from appellees, which was returned on May 31, 1958. On May 13, 1958, appellees, through their counsel, informed appellants of their decision to buy the land under the stipulated option. Appellants refused to comply. Procedural History: On May 31, 1958, appellees filed Civil Case No. 5023, praying for consignation of the balance of P1,650.00 and for the execution of a deed of sale. On June 9, 1958, appellants filed a complaint (Civil Case No. 99) which was dismissed for lack of jurisdiction. On August 5, 1959, appellants filed another case asking for acceptance of payment of the principal obligation, release of mortgage, and accounting of harvests. The two cases were jointly tried. The Petition: The Court of First Instance of Rizal rendered a judgment ordering the spouses Basilio Bautista and Sofia de Rosas to execute a deed of sale in favor of Ruperto Soriano and Olimpia de Jesus upon payment of the balance of P1,650.00 and the loan amount, plus attorney's fees and costs. Appellants appealed this decision.
Issue(s)
Whether the mortgagees (Sorianos) are entitled to specific performance of the option to purchase the mortgaged property. Whether the right of redemption inherent in a mortgage prevents the enforcement of a stipulated option to purchase within the same contract.
Ruling
The judgment appealed from is affirmed, with costs.
Ratio Decidendi
On Issue 1: The Court held that the Sorianos are entitled to specific performance because a perfected contract of sale was formed. Applying Article 1479 of the Civil Code, the Court found that the mortgagors' promise to sell was supported by the same consideration as the mortgage itself, which is distinct from the price of the land. The offer was non-withdrawable for two years, and the Sorianos' acceptance, communicated and received before the term expired, transformed the unilateral promise into a reciprocally demandable contract. Since the Sorianos complied with their obligation by consigning the balance of the purchase price in court, they have a right to demand the execution of the deed of sale. On Issue 2: The Court ruled that the right to redeem is not absolute when a valid option to purchase is present. While the contract was a mortgage, the specific 'option to buy' clause rendered the right to redeem defeasible at the election of the mortgagees. The Court distinguished this from illegal arrangements, noting there is nothing immoral or illegal in such an option. Responding to the Bautistas' citation of Iñigo v. Court of Appeals, the Court explained that even if the stipulation only created a personal obligation rather than a real right, the Sorianos were correctly seeking the enforcement of that personal obligation (specific performance). Thus, the Bautistas' attempt to redeem after the Sorianos had already exercised their preemptive right to purchase was ineffective.
Main Doctrine
A unilateral promise to sell, when accepted, becomes a binding contract of purchase and sale, supported by a consideration distinct from the price, and is demandable as specific performance, even if contained within a mortgage agreement, provided the option is exercised within the stipulated period.