Bormaheco Inc. agreed to sell to Villonco Realty a parcel of land and its improvements located in Buendia, Makati.Bormaheco made the terms and condition for the sale and Villonco returned it with some modifications.

The sale is for P400 per square meter but it is only to be consummated after respondent shall have also consummated purchase of a property in Sta. Ana, Manila. Bormaheco won the bidding for the Sta.Ana land and subsequently bought the property.

Villonco issued a check to Bormaheco amounting to P100,000 as earnest money. Twenty-six (26) days after signing the contract of sale, Bormaheco returned the P100,000 to Villonco with 10% interest for the reason that they are not sure yet if they will acquire the Sta.Ana property.

Villonco rejected the return of the check and demanded for specific performance.


WON Bormaheco is bound to perform the contract with Villonco.


Yes. Whenever earnest money is given in a contract of sale, it shall be considered as part of the price and as proof of the perfection of the contract (Art. 1482, Civil Code).

The contract was already completed when Bormaheco accepted the offer by Villonco. The acceptance can be proved when Bormaheco accepted the check from Villonco and then returned it with 10% interest as stipulated in the terms made by Villonco. Further, the fact that Villonco did not object when Bormahecoencashed the check is a proof that it accepted the offer of Bormaheco.

Digest Credit: Rose May Erazo


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