Sunday, October 3, 2010

DELA CAVADA V. DIAZ (April 01, 1918)

FACTS:
Plaintiff Antonio dela Cavada and defendant Antonio Diaz made a Contract of Option where the latter promised to sell to the former his Hacienda de Pitogo located in Tayabas together with its coconut and nipa palm trees for 30 and 70 thousand pesos respectively.

The contract provides that Dela Cavada has the right to purchase the land until after Diaz acquires its Torrens title.

Diaz applied  two land titles for the hacienda dividing it in two parts. After the titles have been issued, Diaz offers to sell to Dela Cavada only a portion of the entire hacienda.

ISSUE:
WON Diaz is obliged to sell to Dela Cavada the entire hacienda and not only a part of it.

HELD:
A promise made by one party, if made in accordance with the forms required by the law, may be a good consideration (causa) for a promise made by another party.
The contract is complete, provided they have complied with the forms required by the law and the consideration need not be paid at the time of the promise.

The plaintiff stood ready to comply with his part of the contract. The defendant, even though he had obtained a registered title to said parcel of land, refused to comply with his promise.

The contract was not, in fact, what is generally known as a "contract of option." It differs very essentially from a contract of option. An optional contract is a privilege existing in one person, for which he had paid a consideration, which gives him the right to buy, for example, certain merchandise of certain specified property, from another person, if he chooses, at any time within the agreed period, at a fixed price.

The contract is already in the perfected stage.

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