Petitioner Aquilino Nietes and respondent Dr.Pablo Garcia entered a “Contract of Lease and Option to Buy” where the latter agreed to lease his Angeles Educational Institute to the former.
The rent is set to P5000 per year up to 5 years and that the LESSOR agrees to give the LESSEE an option to buy the land and the school building, for P100,000 within the period of the Contract of Lease.
Nietes paid Garcia P2200 on Dec.16, 1962 for partial payment on the purchase of the property. Through their lawyers, Garcia decided to rescind the contract while Nietes expresses his intention to buy the property.
Nietes also deposited 84K to a bank corresponding to the balance for the purchase of the property.
ISSUE:
WON Nietes can aval of his option to buy the property.
HELD:
Nietes can avail of the option to buy because he already express his intention to buy the property before the termination of the contract. The contention of the respondent that the full price of the property should first be paid before the option could be exercised is of no merit.
The contract doesn’t provide such stipulation and as such, the provision of reciprocal obligations in oblicon should prevail. Notice of the creditor's decision to exercise his option to buy need not be coupled with actual payment of the price, so long as this is delivered to the owner of the property upon performance of his part of the agreement.
Nietes had validly and effectively exercised his option to buy the property of Dr. Garcia, at least, on December 13, 1962, when he acknowledged receipt from Mrs. Nietes of the sum of P2,200 then delivered by her "in partial payment on the purchase of the property" described in the "Contract of Lease with Option to Buy"
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