(ESSENTIAL REQUISITES OF OBLIGATION)

G.R. No. 109125. December 2, 1994.

ANG YU ASUNCION, ARTHUR GO AND KEH TIONG, petitioners,

vs.

THE HON. COURT OF APPEALS and BUEN REALTY DEVELOPMENT CORPORATION, respondents.

This is a petition for review in the decision of the Court of Appeals setting aside and declaring without
force and effect the orders of execution of the trial court.

Facts:

The plaintiffs, Ang Yu Asuncion and Keh Tiong, are tenants or lessees of residential and commercial
spaces owned by Unjieng spouses in Binondo, Manila. They were informed and offered to sell the
premises and are giving them priority to acquire the property. Bobby Cu Unjieng offered a price of P6-
million while plaintiffs made a counter offer of P5-million. Plaintiffs wrote them to specify the terms and
conditions of the offer to sell but plaintiffs did not receive any reply so they sent another letter with the
same request. The plaintiffs instituted this case for specific performance, the right of first refusal the
moment defendants were about to sell the property.

The trial court found that defendants’ offer to sell was never accepted by the plaintiffs, there was no
contract of sale at all. The lower court ruled in favor of the plaintiffs and the Court of Appeals affirmed
the decision of the Trial Court. Meanwhile, the Unjieng spouses executed a Deed of Sale transferring the
property in question to Buen Realty and Development Corporation. The Petitioners filed a motion for
execution of the CA judgement but the CA reversed itself when the Private Respondents appealed.
Hence, this petition.

ISSUE:

WON the Contract of Sale is perfected between the Petitioners and the Unjiengs

Ruling:

No, the Court held that the Contract of Sale is not perfected. A contractual relationship does not exist
between the parties and no vinculum juris is created between the seller-offeror and the buyer-offeree.
This means that obligation does not exist between the contracting parties due to lack of one of the
essential elements – the vinculum juris or juridical tie. The following are the essential elements of an
obligation:

(a) The vinculum juris or juridical tie which is the efficient cause established by the various sources of
obligations (law, contracts, quasi-contracts, delicts and quasi-delicts);

(b) the object which is the prestation or conduct, required to be observed (to give, to do or not to do);
and
(c) the subject-persons who, viewed from the demandability of the obligation, are the active (obligee)
and the passive (obligor) subjects.

Also, one of the sources of an obligation is a contract (Art. 1157, Civil Code), which is a meeting of minds
between two persons whereby one binds himself, with respect to the other, to give something or to
render some service (Art. 1305, Civil Code).

(ESSENTIAL REQUISITES OF OBLIGATION)

G.R. No. 109125. December 2, 1994.*

ANG YU ASUNCION, ARTHUR GO AND KEH TIONG, petitioners, vs. THE HON. COURT OF APPEALS and
BUEN REALTY DEVELOPMENT CORPORATION, respondents.

This is about the concurrence of the essential elements of an obligation, enumerated as follows:

(a) The vinculum juris or juridical tie which is the efficient cause established by the various sources of
obligations (law, contracts, quasi-contracts, delicts and quasi-delicts);

(b) the object which is the prestation or conduct, required to be observed (to give, to do or not to do);
and

(c) the subject-persons who, viewed from the demandability of the obligation, are the active (obligee)
and the passive (obligor) subjects.

Facts:

In this petition for review is the decision of the Court of Appeals setting aside and declaring without
force and effect the orders of execution of the trial court. The plaintiffs are tenants or lessees of
residential and commercial spaces owned by Unjieng spouses in Binondo, Manila. They were informed
and offered to sell the premises and are giving them priority to acquire the property. Bobby Cu Unjieng
offered a price of P6-million while plaintiffs made a counter offer of P5-million. Plaintiffs wrote them to
specify the terms and conditions of the offer to sell but plaintiffs did not receive any reply so they sent
another letter with the same request. Since the Unjieng spouses failed to specify the terms and
conditions of the offer to sell and because of information received that defendants were about to sell
the property. The plaintiffs instituted this case for specific performance, the right of first refusal. The
trial court found that defendants’ offer to sell was never accepted by the plaintiffs for the reason that
the parties did not agree upon the terms and conditions of the proposed sale, hence, there was no
contract of sale at all. The lower court ruled that plaintiffs will have the right of first refusal if the
defendants subsequently offer their property for sale at a price of P11-million or below. The Court of
Appeals affirmed the decision of the Trial Court. Meanwhile, the Unjieng spouses executed a Deed of
Sale transferring the property in question to Buen Realty and Development Corporation. The new owner
of the subject property wrote a letter to the lessees demanding that the latter to vacate the premises.
The Petitioners filed a motion for execution of the CA judgement but the CA reversed itself when the
Private Respondents appealed.

ISSUE:

WON the Contract of Sale is perfected between the Petitioners and the Unjiengs

Ruling:

No, the Contract of Sale is not perfected. A contractual relationship does not exist between the parties
and no vinculum juris is created between the seller-offeror and the buyer-offeree. This means that
obligation does not exist between the contracting parties due to lack of essential elements – the
vinculum juris or juridical tie. Also, one of the sources of an obligation is a contract (Art. 1157, Civil
Code), which is a meeting of minds between two persons whereby one binds himself, with respect to
the other, to give something or to render some service (Art. 1305, Civil Code).