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    SAN MIGUEL PROPERTIES PHILIPPINES, INC. vs. SPOUSES ALFREDO HUANG and GRACE HUANG

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    Joanna
    The document summarizes a Supreme Court case between San Miguel Properties Philippines, Inc. and the Spouses Alfredo and Grace Huang regarding the sale of two parcels of land. San Miguel offered to sell the land for P52 million, but the Huangs counter offered P500,000 as earnest money with the balance paid in monthly installments, which San Miguel refused. The Huangs then offered P1 million as an "earnest deposit" which San Miguel accepted. However, the parties failed to agree on terms, so San Miguel returned the P1 million. The Court ruled that the P1 million was merely a deposit and not earnest money as defined by law, as the sale was not perfected due to conditions

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    SAN MIGUEL PROPERTIES PHILIPPINES, INC. vs. SPOUSES ALFREDO HUANG and GRACE HUANG

    Uploaded by

    Joanna
    90 views1 page
    The document summarizes a Supreme Court case between San Miguel Properties Philippines, Inc. and the Spouses Alfredo and Grace Huang regarding the sale of two parcels of land. San Miguel offered to sell the land for P52 million, but the Huangs counter offered P500,000 as earnest money with the balance paid in monthly installments, which San Miguel refused. The Huangs then offered P1 million as an "earnest deposit" which San Miguel accepted. However, the parties failed to agree on terms, so San Miguel returned the P1 million. The Court ruled that the P1 million was merely a deposit and not earnest money as defined by law, as the sale was not perfected due to conditions

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    The document summarizes a Supreme Court case between San Miguel Properties Philippines, Inc. and the Spouses Alfredo and Grace Huang regarding the sale of two parcels of land. San Miguel offered to sell the land for P52 million, but the Huangs counter offered P500,000 as earnest money with the balance paid in monthly installments, which San Miguel refused. The Huangs then offered P1 million as an "earnest deposit" which San Miguel accepted. However, the parties failed to agree on terms, so San Miguel returned the P1 million. The Court ruled that the P1 million was merely a deposit and not earnest money as defined by law, as the sale was not perfected due to conditions

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    90 views1 page

    SAN MIGUEL PROPERTIES PHILIPPINES, INC. vs. SPOUSES ALFREDO HUANG and GRACE HUANG

    Uploaded by

    Joanna
    The document summarizes a Supreme Court case between San Miguel Properties Philippines, Inc. and the Spouses Alfredo and Grace Huang regarding the sale of two parcels of land. San Miguel offered to sell the land for P52 million, but the Huangs counter offered P500,000 as earnest money with the balance paid in monthly installments, which San Miguel refused. The Huangs then offered P1 million as an "earnest deposit" which San Miguel accepted. However, the parties failed to agree on terms, so San Miguel returned the P1 million. The Court ruled that the P1 million was merely a deposit and not earnest money as defined by law, as the sale was not perfected due to conditions

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    SAN MIGUEL PROPERTIES PHILIPPINES, INC. vs.

    SPOUSES ALFREDO HUANG and GRACE


    HUANG
    G.R. No. 137290 July 31, 2000
    MENDOZA, J.:

    Facts: San Miguel Properties Philippines, Inc. (SMPI) is a domestic corporation engaged in the purchase and sale of
    real properties. Part of its inventory are two parcels of land totalling 1,738 square meters at the corner of Meralco
    Avenue and General Capinpin Street, Barrio Oranbo, Pasig City, which are covered by TCT Nos. PT-82395 and PT-
    82396 of the Register of Deeds of Pasig City. On 21 February 1994, the properties were offered for sale for
    P52,140,000.00 in cash to Atty. Helena M. Dauz who was acting for respondent spouses as undisclosed principals.
    The respondents offered that the sum of P500,000.00 would be given as earnest money and the balance would be
    paid in eight equal monthly installments from May to December, 1994. However, petitioner refused the counter-
    offer. On March 29, 1994, Atty. Dauz wrote another letter proposing that the sum of P1,000,000.00 would be given
    as earnest-deposit and in case of failure of agreement it will be refunded to Sps. Huang. Sobrecaray, SMPI’s vice-
    president and operations manager for corporate real estate, indicated his conformity to the offer. However, on 7 July
    1994, SMPI informed Atty. Dauz that because the parties failed to agree on the terms and conditions of the sale
    despite the extension granted by SMPI, the latter was returning the amount of P1 million given as “earnest-deposit.”
    On the other hand, Sps. Huang through counsel, wrote SMPI demanding the execution within five days of deed of
    sale covering the properties and attempted to return the “earnest-deposit” but SMPI refused on the ground that Sps.
    Huang’s option to purchase had already expired.

    Issue: Whether or not there is a perfected contract of sale upon payment and acceptance of earnest money.

    Ruling: With regard to the alleged payment and acceptance of earnest money, the Court holds that respondents did
    not give the P1 million as “earnest money” as provided by Art. 1482 of the Civil Code. They presented the amount
    merely as a deposit of what would eventually become the earnest money or downpayment should a contract of sale
    be made by them. The amount was thus given not as a part of the purchase price and as proof of the perfection of the
    contract of sale but only as a guarantee that respondents would not back out of the sale. Respondents in fact
    described the amount as an “earnest-deposit.” In the present case, the P1 million “earnest-deposit” could not have
    been given as earnest money as contemplated in Art. 1482 because, at the time when petitioner accepted the terms of
    respondents’ offer of March 29, 1994, their contract had not yet been perfected. This is evident from the following
    conditions attached by respondents to their letter, to wit: (1) that they be given the exclusive option to purchase the
    property within 30 days from acceptance of the offer; (2) that during the option period, the parties would negotiate
    the terms and conditions of the purchase; and (3) petitioner would secure the necessary approvals while respondents
    would handle the documentation.

    The first condition for an option period of 30 days sufficiently shows that a sale was never perfected. As petitioner
    correctly points out, acceptance of this condition did not give rise to a perfected sale but merely to an option or an
    accepted unilateral promise on the part of respondents to buy the subject properties within 30 days from the date of
    acceptance of the offer. Such option giving respondents the exclusive right to buy the properties within the period
    agreed upon is separate and distinct from the contract of sale which the parties may enter.11 All that respondents
    had was just the option to buy the properties which privilege was not, however, exercised by them because there was
    a failure to agree on the terms of payment. No contract of sale may thus be enforced by respondents.

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