De La Cavada vs.
Antonio Diaz  There is nothing in the law nor in public
G.R. No. L-11668 | April 1, 1918
Option Contract | Johnson, J. | Guanco, E.
Facts
1. Antonio Enriquez de la Cavada and Antonio Diaz
executed a ‘contract of option’ which provides that
Diaz grants de la Cavada the option to purchase his
hacienda consisting of 100 and odd hectares within
the period necessary for the issuance of a Torrens
title by the government, and for which de la Cavada
will pay Diaz 70,000 pesos.
2. In another letter, de la Cavada expressed his intention
to buy the lot, to send a surveyor to survey the
property and to apply for a Torrens title. Diaz
conformed to this.
3. Soon after the execution of said contract, and in
partial compliance with the terms thereof, Diaz
presented two petitions in the Court of Land
Registration, each for the purpose of obtaining the
registration of a part of the “Hacienda de Pitogo”.
 Said petitions were granted, and each parcel
was registered and a certificate of title was
issued for each part under the Torrens
system to the defendant.
4. Later, however, pretending to comply with the terms of
the contract, Diaz offered to transfer to de la Cavada
only one of the two subject parcels, which was only a
part of the hacienda.
5. De la Cavada refused to accept the certificate of title
for only a part of the hacienda arguing that 1) it was
only a part of the “Hacienda de Pitogo”, and 2) he was
offered the whole hacienda under the contract.
6. Diaz argued that the contract of sale mentioned that
“Hacienda de Pitogo” included only 100 hectares,
more or less, of the said “hacienda”, and that by
offering to convey to the de la Cavada a portion of
siad “hacienda” composed of “100 hectares, more or
less,” he had already complied with his end of the
contract.
7. De la Cavada argued that he had purchased all of
said “hacienda”, and that the same contained, at
least, 100 hectares, more or less. The lower court
sustained the contention of de la Cavada.
8. After the issue had been joined between the parties
upon their pleadings, they entered into an agreement
with reference to the method of presenting their proof.
9. A civil action was instituted by the plaintiff for the
purpose of requiring the defendant to comply the
option contract and for damages for Diaz’s
noncompliance.
Issues/Ratio
1. W/N parties may execute an agreement on the
method of presenting their proof – YES
policy which prohibits the parties in a civil
litigation from making such an agreement.
 While the law concedes to parties litigant,
generally, the right to have their proof taken
in the presence of the judge, such a right is a
renounceable one.
 In a civil action, the parties litigant have a
right to agree outside of the court, upon the
facts in litigation. Under certain conditions,
the parties litigant have a right to take the
depositions of witnesses and submit the
sworn statements in that form to the court.
 Having agreed to the method of taking the
proof, and the same having been taking in
compliance with said agreement, it is now
too late, there being no law to the contrary,
for them to deny and repudiate the effect of
their agreement.
2. W/N the court erred in declaring the contract a
valid obligation, for the reason that it had not
been admitted in evidence, and W/N the same is
null and void for failure of consideration –
 An examination of the proof shows that said
contract was offered in evidence and
admitted as proof without objection.
 Not only was the contract before the court by
reason of its having been presented in
evidence, but defendant himself made said
contract an integral part of his pleadings.
 The defendant admitted the execution and
delivery of the contract, and alleged that he
made an effort to comply with its terms.
 In regards to the second objection, it may be
said that (a) the contract was for the sale of
a definite parcel of land; (b) that it was
reduced to writing; (c) that the defendant
promised to convey to the plaintiff said
parcel of land; (d) that the plaintiff promised
to pay therefore the sum of P70,000 in the
manner prescried in the contract; (e) that the
defendant admitted to the execution and
delivery of the contract and alleged that he
made an effort to comply with the same; (f)
that no defense or prevention was made in
the lower court that there was no
consideration for his contract.
 A promise made by one party, if made in
accordance with the fors required by the
law, may be a good consideration
(causa) for a promise made by another
party (Article 1274). In other words, the
causa need not pass from one to the
other at the time the contract is entered
into.
 3. W/N the agreement was a contract of option –
NO
 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, from another person, if he
chooses, at any time within the agreed
period, at a fixed price.
 The contract of option is a separate and
distinct contract from the contract which the
parties may enter into upon the
consummation of the option.
 A consideration for an optional contract is
just as important as the consideration for any
other kind of contract. If there was no
consideration for the contract of option, then
it cannot be enforced any more than any
other contract where no consideration exists.
 A contract of option is a contract by virtue of
the terms which the terms which the parties
thereto promise and obligate themselves to
enter into another contract at a future time,
upon the happening of certain events, or the
fulfillment of certain conditions.
4. W/N Diaz is obliged to sell to de la Cavada the
entire hacienda and not only a part of it - YES
 The contract is complete, provided they have
complied with the forms required by the law.
The consideration also need not be paid at
the time of the promise.
 De la Cavada stood ready to comply with his
part of the contract. Diaz, even though he
had already obtained a registered title to said
parcel of land, refused to comply with his
promise.
 The contract has already been perfected
and Diaz may be compelled to fulfill his
end of the deal.
Ruling
Judgment of lower court AFFIRMED. Diaz to pay de
la Cavada the sum of 20,000 pesos with interest at the rate of
6 per cent per annum in the event of the failure of Diaz to
execute conveyance as aforesaid in the contract.