SARMIENTO v. AGANA

FACTS:

Before Ernesto Valentino and Rebecca Lorenzo wed, Rebecca’s mother offered a lot in Paranaque that they could build their house on. In 1967, they finally built their home which cost about PhP8,000-10,000, thinking that someday, the lot would be transferred to them in their name. It turns out, though, that the lot was owned by the Spouses Santos who , in turn, sold the same to Leonila Sarmiento in 1974. A year later, Sarmiento ordered the Valentinos to vacate their lot, then eventually filed and Ejection Suit against them.

The lower court ruled in Sarmiento’s favor and ordered her to pay 20,000 as the value of the house. But the case was then elevated to the CFI of Pasay (w/ Agana as Judge), and pursuant to Art.448 of the CC (March 1979), the Court ordered Sarmiento to exercise the option in 60 days to pay Ernesto 40,000 as the value of the house or to let them purchase the land for 25,000. Sarmiento was not able to exercise this option, and the CFI allowed Ernesto to deposit the 25,000 purchase price with the Court.

ISSUE:

Whether or not the land owner is compelled to exercise either option: to buy the building or to sell the land?

HELD:

Ernesto and his wife (BPS) were clearly in good faith as they believed that Rebecca’s mother has the capacity to eventually transfer the title of the land to them. In line with this, Sarmiento (LO) was required to exercise only 2 options: To purchase the house or to sell the land to them, in this case, based on the value decided by the courts. Since Sarmiento failed to exercise the option within the allotted period, and based on Art. 448, the LO is compelled by law to exercise either option. Not choosing either is a violation of the law.