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Abalos v. Macatangay Jr. G.R. No. 155043, Sept. 30, 2004 Tinga, J.

Facts: Spouses Arturo and Esther Abalos are registered owners of a parcel of land in Makati City. On June 2, 1988, armed with purportedly Special Power of Attorney (SPA) issued by his wife, Arturo executed a Receipt and Memorandum of Agreement (RMOA) in favor of the respondent binding himself to sell the subject property to the latter and not to offer the same to other party within 30 days from date. Arturo acknowledged the receipt of P5,000, which will be deducted from the total agreed price of the subject property amounting to P1,300,000. Seemingly, a marital squabble was brewing between the spouses. Esther executed a SPA appointing her sister to act in her behalf in connection the transfer of the property to the respondent. On November 16, 1989, respondent sent a letter to the spouses informing the latter of his willingness to pay the agreed purchase price and thereafter. On that very same day, Esther executed a Contract to Sell to the extent of her conjugal interest and obligated herself to surrender the possession of the property and to execute a deed of absolute sale upon full payment. Respondent sent a letter dated December 7, 1989 informing the spouses that he had already prepared a check to cover the remaining unpaid balance of the purchase price and reiterated his demand to the latter to fulfil their obligation. However, the spouses failed o deliver the land causing the respondent to file a complaint for specific performance. The RTC dismissed the case and ruled that the SPA ostensibly issued by Esther in favor of his husband was void, as it was falsified. Thus, the latter has no authority to sell the property. This ruling by the RTC was reversed by the CA. The appellate court ruled that the SPA in favor of Arturo, assuming that it was void, cannot affect the transaction between Ester and respondent. It was by virtue of the SPA executed by Esther appointing her sister in her behalf which binds Esther to sell the property to the respondent. Issue:

WON there was a perfected contract of sale executed between the petitioner and respondent. Held: No. In a contract of sale, the seller must consent to transfer the ownership in exchange for the price, the subject matter must be determinate, and the price must be certain in money or its equivalent. In this case, there was no contract of sale rather a perfected contract of option was entered into by Arturo and respondent. An option merely grants a privilege to buy or sell within the agreed time and purchase price. A perfected contract of option does not result in the perfection of the sale. It is only when the option is exercised may a sale be perfected. The P5,000 paid by respondent is viewed not as earnest money but merely an option money. RMOA signifies a unilateral offer of Arturo to sell the property to respondent and does not impose the respondent an obligation to buy the said property, as in fact, the agreement does not even bear the respondent's signature. Further, it is crystal clear that the intent of Arturo was to only to grant the respondent a privilege to buy the property within the specified period. There is nothing in the RMOA which indicates that Arturo agreed to transfer the ownership of the land which is an essential element in the contract of sale.