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SPS. JULIO D. VILLAMOR v. CA

FACTS:

Macaria Labing-isa Reyes sold a portion of her lot to the Spouses Julio and Marina Villamor. The sale was covered by Transfer Certificate of Title (TCT) No. 39935. Subsequently, Macaria executed a "Deed of Option" stating that the remaining portion of the lot would be sold to the Villamor spouses at the same price per square meter. The Villamor spouses agreed to the provisions of the deed. In 1984, Macaria and her husband offered to repurchase the lot from the Villamor spouses, but Marina Villamor refused and reminded them about the Deed of Option. As a result, the Villamor spouses filed a complaint for specific performance against the Reyeses when their attempts to purchase the remaining portion of the lot were ignored.

The trial court ruled in favor of the Villamor spouses, ordering the Reyes spouses to sell the land to the plaintiffs and pay attorney's fees and costs of suit. The Reyes spouses appealed the decision to the Court of Appeals, which reversed the trial court's ruling, finding the Deed of Option void for lack of consideration. The Villamor spouses then filed a petition for review on certiorari, arguing that the Deed of Option was valid and that the Court of Appeals erred in finding it void for lack of consideration. The main issue to be resolved in this case is the validity of the Deed of Option, which the trial court concluded was a valid written agreement between the parties.

ISSUES:

  1. Whether the Deed of Option is valid despite the imposition of a condition preventing the perfection of the contract of sale

  2. Whether the Deed of Option is void for lack of consideration

  3. Whether a distinct consideration is necessary to support the Deed of Option

  4. Whether the "deed of option" signed by the parties is a valid contract.

  5. Whether there was a valid contract of sale between the parties.

  6. Whether the right of action for the enforcement of the contract had already prescribed.

  7. Whether the action to recover one-half of the property is barred by laches and/or prescription.

  8. Whether the petitioner is entitled to demand the delivery of the property.

  9. Whether the respondent court's decision should be affirmed.

RULING:

  1. The Deed of Option is valid. The court ruled that the Deed of Option was a valid written agreement between the parties, as evidenced by the documentary evidence, which is the Deed of Option.

  2. The Deed of Option is not void for lack of consideration. The court ruled that the consideration for the Deed of Option is the petitioners' agreement to buy a portion of the land at a price higher than the prevailing market value. The cause or consideration for the private respondents in executing the Deed of Option is clear from the deed itself.

  3. A distinct consideration is not necessary to support the Deed of Option. The court ruled that the consideration needed to support a unilateral promise to sell is a distinct one, but it does not have to be a price certain. The alleged overprice paid by the petitioners is given as a reason for their desire to acquire the land, not as a consideration for the option.

  4. The "deed of option" is a valid contract. Although the consideration for the deed of option was not specifically stated, it was ascertainable. The price difference between the purchase price and the prevailing reasonable price of the lot in 1971 could be considered as the consideration. Improbabilities in the contract do not invalidate it.

  5. There was a valid contract of sale between the parties. The acceptance of the offer to sell for a price certain created a bilateral contract to sell and buy. The parties had a meeting of minds on the object and price, resulting in a perfected contract of sale. Either party can demand performance of their respective undertakings under the contract.

  6. The right of action for the enforcement of the contract had already prescribed. The Deed of Option did not provide for the period within which the parties could demand performance of their obligations. However, the failure of either party to demand performance for an unreasonable length of time renders the contract ineffective. In this case, the complaint was filed 17 years after the execution of the contract, which exceeded the 10-year prescriptive period under the Civil Code.

  7. The action to recover one-half of the property is barred by laches and/or prescription. The petitioner failed to file the action within ten (10) years from the date of the written agreement in 1941, as required by Article 1144 of the New Civil Code. By filing the adverse claim in 1959, the petitioner had no more right on the property, as it was already barred by laches.

  8. The petitioner is not entitled to demand the delivery of the property. Due to the continuous rise in real estate prices in Metro Manila, it would be inequitable to allow the petitioner to demand the property thirteen (13) or seventeen (17) years after the execution of the deed at the price of only P70.00 per square meter. In consideration of equity and the fact that the private respondents have no other decent place to live, the court is not inclined to grant the petitioner's prayer.

  9. The respondent court's decision is affirmed for the reasons stated in the decision. The complaint in Civil Case No. C-12942 is dismissed on the grounds of prescription and laches.

PRINCIPLES:

  • When the terms of an agreement have been reduced to writing, it is to be considered as containing all such terms, and therefore, there can be no evidence of the terms of the agreement other than the contents of the writing.

  • Written instruments appointed by the requirements of law or by the contract of the parties as the repositories and memorials of truth must be given more credit than parol evidence.

  • The consideration for a contract is the essential reason which moves the contracting parties to enter into the contract.

  • Improbabilities in a contract do not invalidate it.

  • The acceptance of an offer to sell for a price certain creates a bilateral contract to sell and buy.

  • A contract of sale is perfected at the moment there is a meeting of minds on the object and price.

  • Actions upon a written contract must be brought within ten years.

  • Failure to demand performance for an unreasonable length of time renders the contract ineffective.

  • Prescription bars the right to enforce a contract after the prescribed period has lapsed.

  • Laches bars the right to enforce a contract when there has been unreasonable delay or neglect in asserting the claim.

  • The action to recover a property must be filed within the prescribed period under Article 1144 of the New Civil Code to avoid being barred by prescription.

  • Laches can be a ground for the dismissal of an action if the plaintiff's unreasonable delay in asserting their rights has prejudiced the defendant's position.

  • In equity jurisdiction, the court may consider factors such as fairness and the impacts on the parties involved in rendering a decision.