THIRD
DIVISION
AGRIPINO VILLEGAS, G.R. No.
111495
ATANACIO VILLEGAS
(deceased), substituted by his wife
ROSA N. SANCHEZ, and
CORAZON SANCHEZ,
Petitioners,
- versus -
THE COURT OF APPEALS,
VICENTE M. REYES, JULITA R.
MAYLAD, LORENZO M. REYES,
LYDIA R. FELICIANO represented
by Attorney-in-Fact VICTORIA F.
HARPST, RUPERTA A. REYES,
ESTRELLITA CRISOSTOMO,
YOLANDA R. CHIU, VIRGILIO A.
REYES, CARLITO A. REYES,
PACITA R. BAUTISTA, and
SPOUSES LITA SY and SY BON SU,
Respondents.
x- - - - - - - - - - - - - - - - - - - - - -
- - - - - -x
THE HEIRS OF ATANACIO G.R.
No. 122404
VILLEGAS as represented by
AGRIPINO VILLEGAS,
and OFELIA R. TUNGOL, QUISUMBING,
J.,
Petitioners, Chairperson, CARPIO,
TINGA, and
- versus - VELASCO, JR., JJ.
THE COURT OF APPEALS Promulgated:
and SPOUSES LITA SY and
SY BON SU,
Respondents. August 18, 2006
x- - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - -- - - - - - - - - - - - - - -x
CARPIO, J.:
The Case
Before the Court are the consolidated
cases docketed as G.R. No. 111495 and G.R. No. 122404. The consolidated cases involve
a parcel of land (“property”) located at
The first case, G.R. No. 111495, is a petition for review of the
Decision[1]
dated
The second case, G.R. No. 122404, is a
petition for review of the Decision[3]
dated
The Facts
Vicente M. Reyes, Julita R. Maylad,
Lorenzo M. Reyes, Lydia R. Feliciano, Ruperta A. Reyes, Estrellita Crisostomo,
Yolanda R. Chiu, Virgilio A. Reyes,
Carlito A. Reyes and Pacita R. Bautista
(“respondent-heirs”), together with Lorenza R. Martinez, Ambrosio M. Reyes,
Concepcion Reyes-Ancheta and the heirs of Mario M. Reyes (“other heirs”), were
the owners of the property located at Evangelista Street, Quiapo, Manila. They
inherited the property from their father, Dr. Lorenzo C. Reyes, who died on
Agripino
Villegas, Atanacio Villegas, Rosa N. Sanchez and Corazon Sanchez
(“petitioner-lessees”) were the lessees of the property since 1959.
Petitioner-lessees owned the building and improvements constructed on the
property.
In a letter[4]
dated
This is to inform you that by virtue
of the Partial Compromise Agreement of the Estate belonging to the late Lorenzo
C. Reyes, as approved by Judge Perlita Tria-Tirona, Regional Trial Judge,
National Capital Judicial Regions, Quezon City Branch No. 102,
Heirs of
the First Marriage Heirs of the Second
Marriage
1. Vicente M. Reyes 1. Ruperta A. Reyes
2. Lorenza R. Martinez 2. Carlito A. Reyes
3. Ambrosio M. Reyes 3. Estrellita A. Reyes
4. Concepcion Reyes-Ancheta 4. Yolanda [R.] Chiu
5. Julita R. Maylad 5. Virgilio A.
Reyes
6. Lorenzo M. Reyes, Jr. 6. Pacita R. Bautista
7.
8. Heirs of Mario M. Reyes
x x x x
In this connection, we wish to
inform you that we are selling the lot under lease with you. Accordingly, we
are giving you the opportunity to exercise your rights of pre-emption, made in
writing within thirty (30) days upon receipt of this letter. If however, we do
not hear from you after the lapse of the said period, we shall take it to mean
that you are not interested to purchase the subject lot, which thereby give us
the liberty to offer it to other interested parties.[5] (Emphasis supplied)
Petitioner-lessees replied to the
Administrative Committee on
On
1. Bid Price - - - - - - -
- P4,000,000.00;
Absolute Deed of Sale,
we will pay you 80% of the
Bid Price amounting to - - - - - - - - P3,200,000.00;
3.
Upon delivery of the
Transfer Certificate of
Title to each of us, we
will pay you the 20%
balance amounting to - - - - - - - - - 800,000.00.[7]
In
a letter[8] dated July 1988, the Administrative Committee informed
petitioner-lessees of their receipt of notice of the P4,000,000 bid price. The Administrative Committee
wrote that they requested petitioner-lessees to increase their bid for the
property but the latter failed to make another offer so the heirs have decided
to sell to another buyer who offered a higher price. Nevertheless, the Administrative Committee
indicated in the letter that they would wait for a reply within 15 days and that
should the period lapse without any reply from petitioner-lessees, it would
mean that petitioner-lessees were no longer interested in buying the property.
On
2 August 1988, petitioner-lessees sent a reply,[9] advising the Administrative Committee that they were
willing to make a nominal increase to their bid price of P4,000,000.
Petitioner-lessees requested the Administrative Committee to state in
writing their asking price for the property.
On
3 August 1988, the Administrative Committee sent a letter to petitioner-lessees
which reads:
Dear Sirs:
We
are sorry for the oversight of the date of our last letter. Inasmuch as you
received it on the 26th of July, let us then consider it as the
official date of the letter.
It is
the customary agreement with the late Dr. Lorenzo C. Reyes that 15 years after
the improvement was put up in the property, the said improvement reverts to the
owner of the lot. Since you have put up the existing improvement in 1971, we
feel that the said improvement was already owned by the late Lorenzo C. Reyes
before his death.
As
early as 1985 the said Dr. Reyes has been paying real property taxes on the
improvement; which shows that he was already the rightful owner of said
improvement.
Since
the structure is not of strong materials, with the length of time of 17 yrs.,
we feel that same is now fully depreciated.
We
are also desirous of your buying the property. We have an offer of P5
Million which was submitted to us last month. If you could offer the same
amount we will be very happy to accomodate you.
We
are sending you a xerox copy of TCT No. 49857, Tax Declaration of Real Property
and the latest tax receipts.
May
we receive you[r] offer on or before Aug. 11, 1988. Please be guided
accordingly.[10] (Emphasis supplied)
In their
letter-reply[11] dated 11 August 1988,
petitioner-lessees insisted that they own the improvements on the property.
Petitioner-lessees wrote that they were willing to reimburse the realty tax
paid on the improvements by the late Dr. Lorenzo C. Reyes. Petitioner-lessees
requested for a meeting with all the heirs to negotatiate the sale of the
property, and informed the Administrative Committee that their final bid price
will be submitted during the meeting.
Petitioner-lessees
sent their accountant, Benjamin C. Miranda (“Miranda”), to represent them in
the conference to negotiate the sale of the property. On the other hand, not
all the heirs of Dr. Lorenzo C. Reyes attended the conference. During the
conference, the parties failed to agree on the price and terms for the sale of
the property.
On
18 October 1988, petitioner-lessees, excluding Rosa N. Sanchez, wrote another
letter to the Administrative Committee which reads:
The Administrative Committee
Heirs of Dr. Lorenzo C. Reyes
#22 18th Street, New Manila
Quezon City
Dear Sirs:
We waited for 68
days for your answer to our letter dated
August 11, 1988 which did not come.
Considering various
economic reasons, you will be happy to hear from us (Lessees) that we have
finally accepted your asking price of P5,000,000.00 for
your property located at Evangelista Street, district of Sta. Cruz, Manila covered by T.C.T. No. 49857
issued to Dr. Lorenzo C. Reyes on September 3, 1936.
Please prepare all
the necessary papers and documents to make the sale legal for all intent and
purposes.
Any unpaid taxes
such as income, estate, realty and science education fund and documentary stamps shall be for the account
of the Heirs including documentation
expenses.
Terms
of Payment: 95% upon signing
of the documents; and 5% upon delivery of the Transfer Certificate of Title in the
name of its individual Lessees.
Expecting to hear your final confirmation soonest.[12] (Emphasis supplied)
On
3 November 1988, the Administrative Committee replied:
Mr. Atanacio M. Villegas
Mr. Agripino M. Villegas
Mrs. Corazon Sanchez
654 Evangelista, Quiapo, Manila
Dear Sirs:
This is with reference to your
letter dated October 18, 1988.
Several times in the past two months, Mr. Carlito A. Reyes
and our other brothers and sisters have informed you that some of the co-owners
of our property at the above-given address
are no longer agreeable to selling the said property; however, other
co-owners, representing a 75% share
thereof, were still interested in selling their shares. It is, therefore, very clear from the foregoing that our offer to sell the
entire property to you was no longer effective.
Moreover,
our offer was for the price of P5,000,000.00
net to the co-owners. Your letter of
October 18, 1988 imposes the condition that unpaid taxes shall still be borne
by us, which is unacceptable.
We
therefore, leave it up to some of the co-owners to negotiate for the sale of
their shares with you.[13] (Emphasis supplied)
Respondent-heirs,
collectively owning 75% of the property, also sent a letter dated 3 November
1988 to petitioner-lessees:
Mr. Atanacio M.
Villegas
Mr. Agripino M.
Villegas
Mrs. Corazon
Sanchez
654 Evangelista,
Quiapo, Manila
Dear Sirs:
This
is with reference to your letter dated October 18, 1988 to the Administrative
Committee of the properties owned by the heirs of Dr. Lorenzo C. Reyes.
You
will recall that in the past two months, some of us saw you and/or your
representative, Mr. Ben Miranda and explained to you that some of the co-owners
of the property at Evangelista Street, Sta. Cruz, Manila, covered by TCT No.
49857, were no longer interested in selling the said property. On the other hand, we the undersigned
co-owners holding a 75% share of the
said property, were offering to sell our shares to you at the price of 75% of P5,000,000.00,
or P3,750,000,000.00.
Moreover, the said price was to be net to us, that is, all applicable
taxes - capital gains tax, documentary stamp tax, municipal transfer tax and
registration expenses - should be borne by you.
It was
obvious that our said offer superseded that of our Administrative Committee,
which cannot convey the property to you without the unanimous consent of all
the co-owners.
We
are reiterating our offer to sell our 75% share to you. However, since there is a new offer to purchase the entire
property at P5,100,000.00, we are now offering our said
75% share for the price of P3,825,000.00, net to us.
If
we do not hear from you within one week from your receipt hereof, we shall feel
free to offer our said share to other buyers.[14] (Emphasis supplied)
On 28 November 1988,
respondent-heirs sold their 75% undivided interest in the property for P3,825,000 to Lita Sy.[15] Lita Sy also issued a check for P412,500 to Vicente M. Reyes as payment for taxes, agent’s commission and miscellaneous
expenses.[16]
The corresponding title, Transfer Certificate of Title No. 183718[17] was issued on 28 December 1988. The
Administrative Committee informed petitioner-lessees of the sale in a letter
dated 7 December 1988.[18]
On 1 February 1989, the
other heirs sold the remaining 25% portion of the property to Atanacio M.
Villegas and Agripino M. Villegas (“Villegas
brothers”) for P1,250,000.[19]
G.R.
No. 111495
On
10 February 1989, petitioner-lessees filed an action against respondent-heirs
and Spouses Sy for Annulment of Deed of Sale/Title, Specific Performance, and
Consignation of Rentals with Damages.
On
26 February 1990, the RTC Branch 2 rendered a decision, the dispositive portion
of which reads:
WHEREFORE,
for all of the foregoing, judgment is hereby rendered in favor of the
defendants and against the plaintiffs:
1. Dismissing
the complaint;
2. Declaring
the deed of sale executed by defendants in favor of spouses Lita Sy and Sy Bon
Su and Transfer Certificate of Title No. 183718 issued as a consequence of the
deed of sale, valid;
3. Ordering
the plaintiffs to vacate the premises and surrender the possession thereof to
the defendants;
4. Ordering
the plaintiffs, jointly and severally, to pay the defendants the sum of P1,000.00
as expenses of litigation; P2,000.00 as attorney’s fees, and to pay the
costs.
SO
ORDERED.[20]
On appeal, the Court of Appeals
affirmed the decision of the RTC Branch
2.
Upon motion for reconsideration, the
Court of Appeals affirmed its decision with modification. The dispositive
portion reads:
In
view of the foregoing, this Court’s decision dated January 6, 1993, is AFFIRMED
with the modification that the record of this case is ordered remanded to the
court a quo for the parties to come into an agreement before the said
court as to what portion and physical part of the building shall be occupied by
the appellants and the appellees, in proportion to their respective shares in
the property involved and for other arrangements regarding the matter.
SO
ORDERED.[21]
G.R.
No. 122404
On 18 May 1990, Spouses Sy filed a
complaint for Specific Performance against the heirs of Atanacio Villegas, as
represented by Soledad de Ocampo,[22] Agripino Villegas, and Ofelia R.
Tungol.[23]
On 10 May 1993, the RTC Branch 45
rendered a decision, the dispositive portion of which reads:
WHEREFORE,
judgment is hereby rendered ordering defendants heirs of Atanacio Villegas to:
a) accept the redemption price of P1,250,000.00,
including interest thereon from February 1, 1989 until the plaintiffs exercised
their right of redemption;
b) to pay the sum of P10,000.00 as
attorney’s fees to the
plaintiffs;
c) and to
pay the costs of suit.
SO
ORDERED.[24]
On appeal, the Court of Appeals
affirmed the decision of the RTC Branch 45.
In a resolution dated 9 June 1999,
this Court consolidated the two cases docketed as G.R. Nos. 111495 and 122404.[25]
The Issues
The issues in these consolidated cases
can be summarized as follows:
1.
Whether
the contract of sale between respondent-heirs and Lita Sy violated the right of
first refusal of petitioner-lessees; and
2.
Whether
Lita Sy, as co-owner of the property, validly and seasonably exercised her
right to redeem the 25% undivided interest in the property, which undivided
interest the other co-owners had sold to Atanacio M. Villegas and Agripino M.
Villegas.
The Ruling of the Court
Right of First Refusal
A right of first refusal is a
contractual grant, not of the sale of a
property, but of the first priority to buy the property in the event the
owner sells the same.[26]
The exercise of the right of
first refusal is dependent not only on the owner’s eventual intention to sell
the property but also on the final decision of the owner as regards the terms
of the sale including the price.[27]
When a lease contains a right of
first refusal, the lessor has the legal duty to the lessee not to sell the
leased property to anyone at any price until after the lessor has made an offer
to sell the property to the lessee and the lessee has failed to accept it. Only
after the lessee has failed to exercise his right of first priority could the
lessor sell the property to other buyers under the same terms and conditions
offered to the lessee,[28] or under terms and conditions more
favorable to the lessor.
The records show that the heirs of Dr.
Lorenzo C. Reyes did recognize the right of first refusal of petitioner-lessees
over the property.[29]
This is clear from the letter dated
Petitioner-lessees insist
that there was already a perfected contract of sale when they accepted the P5,000,000
offer for the property in their letter dated
On the other hand, respondent-heirs
maintain that the P5,000,000
offer in their letter dated 3 August 1988 already lapsed because petitioner-lessees did not accept the
offer within the period granted. Instead,
petitioner-lessees opted for a conference during which the parties
failed to agree on the price. There was therefore no perfected contract of sale
because there was no meeting of minds between the parties.
We agree with respondent-heirs that
there was no meeting of the minds between the parties.
Where a time is stated in an offer for
its acceptance, the offer is terminated at the expiration of the time given for
its acceptance. The offer may also be terminated when the person to whom the
offer is made either rejects the offer outright or makes a counter-offer of his
own.[30]
The offer of P5,000,000
in the letter dated 3 August 1988 already lapsed when petitioner-lessees failed
to accept it within the period granted. The offer was superseded by the new
offer of respondent-heirs during the conference. However, it appears from the records that no
settlement was reached between the parties during their conference. Engr. Ariel
Reyes, son of Vicente M. Reyes, who was present in the conference testified:
Q: I am showing to you here a letter dated
August 11, 1988 marked as Exhibit 6,
will you look at this document Mr. Witness and tell us what relation has this letter to that which you mentioned?
A: Yes, sir, this is the letter that they
were asking for a conference, sir.
Q: Now, in connection with that conference
being requested by the plaintiff,
did you have a conference with the plaintiffs, Mr. Witness?
A: Yes, sir, and I was in that conference.
Q: All right, who were present in that conference,
Mr. Witness?
A: Two of the administrative committee
Mrs. Maylad, Mr. Carlito Reyes,
myself, the brothers and sisters of Mr. Carlito Reyes, sir. We
had a meeting with a representative of theirs.
Q: All right, were the plaintiffs present
during that conference?
A: No, they were not. The plaintiffs were not present at that time.
Q: And who was present during that meeting?
A: He introduced himself as Mr. Miranda,
sir.
Q: And did you ask Mr. Miranda why the
plaintiffs were not around in
that conference?
A: I believe his answer was Mr. Villegas,
the old Villegas was in the hospital
at that time.
COURT:
Q: All right, what was the capacity of Mr.
Miranda in that conference?
A: He said he represents the Villegases
and including the Sanchezes. The other tenants of the property
because there are two tenants, Villegas
and Sanchez, your honor.
COURT:
All right continue.
ATTY. DELA
CRUZ:
Q: All right Mr. Witness,
will you please tell this Honorable Court what transpired during your meeting with Mr. Benjamin Miranda?
A: We discussed the price
that we wanted because there was an offer much better than what they were
offering and it seems that we did
not get nowhere with their discussions,
sir.
Q: Why?
A: They cannot come up
with the price that the others are offering, sir.
Q: Would you mention specifically the price
Mr. Witness?
A: We wanted P5.1
Million for the property, all net of everything. Meaning, to all other expenses shall be borne by the buyer like capital
gains tax, documentary stamps, etcetera.
COURT:
Q: All right, what was the last
offer before that conference?
A: I think it was P4 Million,
your Honor.
ATTY. DELA
CRUZ:
Q: Mr. Witness. . .
COURT:
Q: Is it not a fact that
you made an earlier offer. . . Is it not a fact that you made an offer after
the P4-Million in the amount of P5-Million?
A: Yes, your Honor.
Q: So, before you made the offer of P5-Million
1 hundred thousand pesos, your
offer was P5-Million?
A: I believe what was in the letter was better than P5-Million,
your Honor.
Q: I am asking you if you
agreed with the plaintiff that you made an offer to the plaintiffs in the
amount of P5-Million before you made an
offer of P5.1 Million in that
conference?
A: I think so. I cannot remember because it was a long time
already.
x x x x
ATTY. DELA
CRUZ:
Q: Will you just tell
this Honorable Court Mr. Witness what happened to that conference which you said you had with Mr. Miranda?
A: We did not agree on
the price and terms of the property that they offered.
Q: Well, how much was the price which
you talked about in that conference?
A: We informed the
tenants that there was another offer given to us and we raised our price to P5.1-Million
net. It was offered by another buyer.
Q: Would you explain to this Honorable
Court what you mean by P5.1-Million
net?
A: It is net of the capital gains and
other taxes, government taxes.
COURT:
Q: Why did you make another offer of P5.1-Million
when your former
offer of P5-Million was already accepted?
A: Can I explain to you, with due respect,
your Honor. There was a letter given to them; that there should be an
acceptance on or before
x x x x
Q: All right Mr. Witness. After that conference, you had with Mr. Miranda, did you receive any communication from the plaintiffs?
A: Yes, sir, that was the time we received
that Exhibit H.
Q: All right, I am showing to you here a
letter dated October 18, 1988 which
was marked as Exhibit A, will you look
at this document and tell us what
relation has this document to that which you said you received after
the conference?
A: Yes, sir, this is the letter, sir, that
they sent.
Q: Now, what did you do after receiving
this letter coming from the plaintiffs?
A: There was a reply letter, sir.
Q: You replied to this letter?
A: Yes, sir, we replied to that letter.
Q: If that reply letter to this
A: Yes, sir.
Q: I am showing to you here a letter
dated November 3, 1988 previously marked as Exhibit 9, and Exhibit 10, will you
look at this letter Mr. Witness and tell
us what relation has this letter to that
which you mentioned?
A: Yes, sir, this is the
letter informing them that some of the heirs have sold their 75% shares to another interested party, 75% share of the
property only, sir.
COURT:
Q: And one of the heirs composing the 75%
share of the vendors included your father?
A: Yes, your Honor.
COURT:
Q: All right, let me see Exhibit 9. (Exhibits 9 and 10 was shown to the Court).
COURT:
Q: All right, before the sale of the 75%
share, did you inform the plaintiffs
that you are selling the 75% of the whole property?
A: During the conference,
your Honor, because during the conference. . . That's why we did not agree.
Q: Just answer the question.
A: Yes, your Honor, we did.
Q: Is it not a fact that you only informed
the plaintiffs, thru your letter of
A: Are selling? Yes, sir.
Q: Meaning, that when you
sent Exhibit 9, the property was not yet sold?
A: Yes, your Honor.[31]
(Emphasis supplied)
Even petitioner-lessees’ witness
Miranda, who was their accountant since 1959, testified that petitioner-lessees
did not indicate their offer for the property in their letter dated 11 August
1988 but instead requested for a conference with all the heirs of Dr. Lorenzo
C. Reyes. Miranda admitted that the main reason for their request for a
conference was because they knew that not all the heirs of Dr. Lorenzo C. Reyes were interested in
selling the property. Miranda testified:
ATTY. DELA
CRUZ:
Q: All right, in this letter
Mr. Witness, there is in the dispositive portion of this letter the following
statement and which I quote for the records: “May we received [sic] your
offer on or before
A: Yes sir. (referring to
x x x x
Q: And as reply to this
communication Mr. Witness, you prepared another letter dated
A: Yes, sir.
Q: And you will agree
with me Mr. Witness that in your
A: You are referring to the
amount?
Q: Yes, you did not
mention any?
A: I did not mention the
offer but I requested them to have a 100% attendance because I know that the
property being sold had a problem even among the family heirs, there is a
problem that is why I wanted them to be present so that if ever who will buy
the property we will know where the lessees should be placed out of the four
doors because they are all selling three doors. Another thing, that is an
inherited property. I requested them to show me a copy of their estate tax
because under the internal revenue code, you cannot have a clean title unless
the corresponding estate tax on the property is paid. That is why I made also
that request, sir.
x x x x
Q: Now, in this
A: The bid price.
Q: What was your reason
for doing that complete attendance?
A: Because I want to find
out whether the four are not interested in selling, sir.
Q: When you said four,
are they the one representing the ownership of the 25%?
A: Yes, sir.[32]
(Emphasis supplied)
Petitioner-lessees admit that there
was an ongoing negotiation for the sale of the property.[33] Precisely, the P5,000,000
price for the property indicated by the Administrative Committee in the letter
dated 3 August 1988 was superseded by the subsequent offer of respondent-heirs
during the conference. Thus,
the letter dated 18 October 1988 of petitioner-lessees is merely another
counter-offer for the property in their continuing negotiation for the
property. The latest offer of respondent-heirs was contained in their letter
dated 3 November 1988 wherein only the 75% undivided interest of the property
was for sale at P3,825,000.
When petitioner-lessees opted not to
respond to this offer, respondent-heirs had the right to sell the property to
other buyers.
Petitioner-lessees
already exercised their right of first refusal when they refused to respond to
the latest offer of respondent-heirs, which amounted to a rejection of the
offer. Upon petitioner-lessees’ failure to respond to this latest offer of
respondent-heirs, the latter could validly sell the property to other buyers
under the same terms and conditions offered to petitioner-lessees.[34]
Thus, when respondent-heirs sold the property to Lita Sy, respondent-heirs did
not violate the right of first refusal of petitioner-lessees. Indeed,
petitioner-lessees were given more than ample opportunity to purchase the
property.
Petitioner-lessees allege
that the price offered to Lita Sy was lower than the price offered to them. The
records of the case reveal otherwise.
The last price which
respondent-heirs offered to petitioner-lessees was
P3,825,000 for the 75%
undivided interest in the property. The price of P3,825,000 was computed
based on the price of P5,100,000 for the entire property. Moreover, capital
gains tax, documentary stamp tax, municipal transfer tax and registration
expenses should be paid by petitioner-lessees. However, petitioner-lessees were
only willing to pay P5,000,000
for the entire property. Petitioner-lessees also indicated in their letter
dated
On the other hand, Lita
Sy paid P3,825,000 for the 75%
undivided interest in the property. This is exclusive of the P412,500
which Lita Sy paid to Vicente M. Reyes for taxes, agent’s commission and
miscellaneous expenses. Thus, Lita Sy paid a total of P4,237,500. Clearly, this amount is not lower than the
price offered to petitioner-lessees.
Legal Redemption
The Villegas brothers maintain that
Lita Sy failed to exercise her right of redemption within the 30-day period prescribed
under Article 1623 of the Civil Code.
According to the Villegas brothers,
Lita Sy received on 17 February 1989 a copy of the Deed of Sale
evidencing the sale of the 25% portion of the property to the Villegas
brothers. However, it was only in a
demand letter dated 29 March 1990 that Lita Sy invoked her right of redemption.
Articles 1620 and 1623 of the Civil
Code provide:
Art.
1620. A co-owner of a thing may exercise the right of redemption in case the shares
of all the other co-owners or of any of them, are sold to a third person. If
the price of the alienation is grossly excessive, the redemptioner shall pay
only a reasonable one.
Should
two or more co-owners desire to exercise the right of redemption, they may only
do so in proportion to the share they may respectively have in the thing owned
in common.
Art.
1623. The right of legal pre-emption or redemption shall not be exercised
except within thirty days from the notice in writing by the prospective vendor,
or by the vendor, as the case may be. The deed of sale shall not be recorded in
the Registry of Property, unless accompanied by an affidavit of the vendor that
he has given written notice thereof to all possible redemptioners.
The
right of redemption of co-owners excludes that of adjoining owners.
The
records reveal that on 17 February 1989, Lita Sy received the complaint for
Annulment of Deed of Sale/Title, Specific Performance, and Consignation of
Rentals with Damages filed by petitioner-lessees. On the same date, Lita Sy
also received together with the complaint the Deed of Sale of the 25% portion
of the property.
Lita
Sy and the other defendants in that case filed their answer on 16 March 1989.[35] In their answer, Lita Sy invoked her
right to redeem the property:
x x x x
13.
That the Deed of Sale (Annex “N”) in favor of the plaintiffs was based on a
Transfer Certificate of Title No. 183718 (Annex “M”) where defendant Lita Sy is
already a co-owner to the extent of 36/48 portion on the subject property,
which circumstance impliedly admits that defendants heirs have validly and
legally disposed the 75% portion to defendant Lita Sy and plaintiffs are
therefore estopped to deny it;
14. That as a co-owner with the sellers of the
25% portion of the subject lot, defendant Lita Sy has the right to redeem the
shares disposed by the other co-owners in accordance with Art. 1620 of the New
Civil Code and hereby exercise the same;
15.
That the Deed of Sale (Annex “N” – Complaint) allegedly executed by the other
heirs constituting twenty five (25%) percent of the subject property cannot as
yet vest full ownership over the same until the co-owner defendant Lita Sy
shall have failed or waived her rights to redeem the aforesaid 25% of the
subject property in question;
x x x x
P R A Y E
R
WHEREFORE,
premises considered, it is respectfully prayed that after hearing a judgment be
rendered dismissing the instant complaint for lack of merit and order the
plaintiffs jointly and severally:
x x x x
e) To sell or execute a Deed of Sale in favor of
defendant Lita Sy covering the remaining 25% portion of the subject property in
full exercise of the right of redemption under the law.
x x x x
Lita Sy claims that the answer filed
with the RTC Branch 2 is equivalent to a formal offer to redeem the 25%
undivided interest in the property sold to the Villegas brothers. Lita Sy also claims that since she offered to
redeem the property on 16 March 1989, which is within 30 days from her receipt
of the notice of the sale on 17 February 1989, she has complied with the
condition fixed by law and may bring an action to enforce the redemption.
We hold that there was no valid and
effective offer to redeem the 25% undivided interest in the property. Although Lita
Sy invoked her right to redeem the property in the answer filed with the RTC
Branch 2, she failed to consign in court the redemption price. Well-settled is
the rule that a formal offer to redeem must be accompanied by a valid tender of
the redemption price and that the filing of a judicial action, plus the
consignation of the redemption price within the period of redemption, is
equivalent to a formal offer to redeem.[36]
As held by this Court in Tolentino v. Court of Appeals:
[A] formal offer to redeem, accompanied by a bona
fide tender of the redemption price, although proper, is not essential
where, as in the instant case, the right to redeem is exercised thru the filing
of a judicial action, which as noted earlier was made simultaneously with the
deposit of the redemption price with the Sheriff, within the period of
redemption. The formal offer to redeem, accompanied by a bona fide
tender of the redemption price within the period of redemption prescribed by
law, is only essential to preserve the right of redemption for future
enforcement even beyond such period of redemption. The filing of the action
itself, within the period of redemption, is equivalent to a formal offer to
redeem. Should the court allow redemption, the redemptioners should then pay the
amount already adverted to.[37]
The importance of a valid tender or
consignation of the redemption
price was sufficiently explained by Justice J.B.L. Reyes in Conejero v. Court of Appeals:
It is not difficult to discern
why the redemption price should either be fully offered in legal tender or else
validly consigned in court. Only by such means can the buyer become certain
that the offer to redeem is one made seriously and in good faith. A buyer can
not be expected to entertain an offer of redemption without attendant evidence
that the redemptioner can, and is willing to, accomplish the repurchase
immediately. A different rule would leave the buyer open to harrassment by
speculators or crackpots, as well as to unnecessary prolongation of the redemption
period, contrary to the policy of the law. While consignation of the tendered
price is not always necessary because legal redemption is not made to discharge
a pre-existing debt (Asturias Sugar Central versus Cane Molasses Co., 60 Phil
253), a valid tender is indispensable, for the reasons already stated. Of
course, consignation of the price would remove all controversy as to the
petitioner's ability to pay at the proper time.[38]
In Conejero, the Court held that to effectively exercise the right of
redemption, the offer to redeem the property within the 30-day period must be accompanied by a reasonable and valid
tender of the entire repurchase price. The Court held:
[Conejero] failed to make a valid tender of
the price of the sale paid by the Raffiñans within the period fixed by law.
Conejero merely offered a check for P10,000, which was not even legal
tender and which the Raffiñans rejected, in lieu of the price of P28,000
recited in the deed of sale. The factual finding of the Court of Appeals to
this effect is final and conclusive. Nor were the vendees obligated to accept
Conejero’s promise to pay the balance by means of a loan to be obtained in
futuro from a bank. Bona fide redemption necessarily imports a
reasonable and valid tender of the entire repurchase price, and this was not
done. There is no cogent reason for requiring the vendee to accept payment by
installments from a redemptioner, as it would ultimately result in an
indefinite extension of the 30-day redemption period, when the purpose of the
law in fixing a short and definite term is clearly to avoid prolonged and
anti-economic uncertainty as to ownership of the thing sold (cf Torrijos vs.
Crisologo, et al., G.R. No. L-1773, Sept. 29, 1962).[39]
In this case, Lita Sy failed to
consign in court the redemption price when she invoked her right to redeem the
25% portion of the property in the answer filed with the RTC Branch 2. The
evidence does not show that Lita Sy ever tendered the redemption price to the
Villegas brothers. Even when Lita Sy’s lawyer sent a letter dated 29 March 1990
reiterating the demand for the Villegas brothers to resell the 25% interest in the property, still no tender of
the redemption price was made. There is likewise no evidence that Lita Sy
consigned the redemption price in court when she filed on 18 May 1990 a complaint for Specific Performance against
the heirs of Atanacio Villegas, as represented by Soledad de Ocampo, Agripino
Villegas, and Ofelia R. Tungol.
Considering that there was no tender
of the redemption price, nor was there consignation of the redemption price, we
hold that there was no valid exercise of the right of redemption.
WHEREFORE, we DENY the petition in G.R. No. 111495. We AFFIRM the Decision dated 6 January 1993 of
the Court of Appeals in CA-G.R. CV No. 25974, as modified by its Resolution
dated 17 August 1993.
We GRANT the petition in G.R. No. 122404. We SET ASIDE the Decision and Resolution of the
Court of Appeals in CA-G.R. CV No. 41931, and RENDER a new one:
1.
Upholding
the right of Atanacio M. Villegas and Agripino M. Villegas over the 25%
undivided interest in the property; and
2.
Denying
the demand for legal redemption by Spouses Lita Sy and Sy Bon Su.
No pronouncement on costs.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
CONCHITA CARPIO MORALES DANTE O. TINGA
Associate Justice Associate Justice
PRESBITERO J. VELASCO, JR.
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
ARTEMIO V. PANGANIBAN
Chief Justice
[1] Penned by Associate Justice
Gloria C. Paras, with Associate Justices Luis L. Victor and Fermin A. Martin,
Jr., concurring.
[2] The Deed of Absolute Sale dated 28
November 1988 states that the vendee of
the 36/48 (or 75%) share of the property is Lita Sy, married to Sy Bon Su; Exh.
“L,” records (G.R. No. 111495), pp.
31-35.
[3] Penned by Associate Justice Justo
P. Torres, Jr., with Associate Justices Ruben T. Reyes and Celia Lipana-Reyes,
concurring.
[4] Exh. “A,” records (G.R. No.
111495), pp. 14-15.
[5] Id. at 15.
[6] See Exh. “B,” records (G.R. No.
111495), p. 16.
[7] See Exh. “C,” id. at 17.
[8] Exh. “D,” id. at 18.
[9] Exh. “E,” id. at 19-20.
[10] Exh. “F,” id. at 21.
[11] Exh. “G,” id. at 22.
[12] Exh. “H,” id. at 26.
[13] Exh. “I,” id. at 27.
[14] Exh. “J,” id. at 28-29.
[15] See Deed of Absolute Sale, Exh.
“L,” G.R. No. 111495 records, pp. 31-35. The Deed of Sale, which was dated 28
November 1988, stated that the court-approved Partial Compromise Agreement of
the heirs of Lorenzo C. Reyes apportioned the property in the following
undivided shares:
Vicente
M. Reyes - 3/48
Julita
R. Maylad - 3/48
Lorenzo
M. Reyes, Jr. - 3/48
Lydia
R. Feliciano - 3/48
Ruperta
A. Reyes - 4/48
Carlito
A. Reyes - 4/48
Estrellita
R. Crisostomo - 4/48
Yolanda
R. Chiu - 4/48
Virgilio
A. Reyes - 4/48
Pacita
R. Bautista - 4/48
Ambrosio
Reyes - 3/38
Lorenza
Martinez - 3/48
Concepcion
Ancheto - 3/48
Mario
Reyes - 3/48
Respondent-heirs
collectively own 36/48 or 75% of the property, while the other heirs own the
remaining 12/48 or 25% of the property.
[16] Thus, the total amount paid by Lita
Sy was (P3,825,000 + P412,500 =) P4,237,500. See Exhs. “P”
and “Q,” records (G.R. No. 111495), pp.
155-156.
[17] Exh. “M,” records (G.R. No.
111495), pp. 36-37.
[18] Exh. “K,” id. at 30. The letter
stated that respondent-heirs sold their 75% interest in the property to Lita Sy
on 25 November 1988. However, the date on the Deed of Absolute Sale was 28
November 1988.
[19] See Deed of Absolute Sale, Exh.
“N,” id. at 38-40.
[20] Rollo (G.R. No. 111495), p. 72.
[21] Id. at 181.
[22] Soledad de Ocampo is the widow of
Atanacio Villegas.
[23] Ofelia R. Tungol is the wife of
Agripino Villegas.
[24] Rollo (G.R. No. 122404), pp. 66-67.
[26] Rosencor
Development Corporation v. Inquing, G.R. No. 140179, 8 March 2001, 354 SCRA
119.
[27] See Vazquez v. Ayala Corporation,
G.R. No. 149734, 19 November 2004, 443 SCRA 231.
[28] See Riviera
Filipina, Inc. v. Court of Appeals, 430 Phil. 8 (2002); Parañaque Kings
Enterprises, Inc. v. Court of Appeals, G.R. No. 111538, 26 February 1997,
268 SCRA 727; Guzman, Bocaling & Co. v. Bonnevie, G.R. No. 86150, 2
March 1992, 206 SCRA 668.
[29] It does not appear in the records
that the right of first refusal is provided in the lease contract. Neither
petitioner-lessees nor respondent-heirs allege that the right of first refusal
is expressly stipulated in the lease contract. The lease contract was not
offered as evidence by either party.
[30] Minneapolis & S.L. Railway
v. Columbus Rolling Mill, 119 US 149, 30 L Ed. 376 (1886).
[31] TSN, 6 December 1989, pp. 12-15,
26-30.
[32] TSN, 14 August 1989, pp. 31-32,
35.
[33] Rollo (G.R. No. 111495), p. 27.
[34] See Litonjua v. L&R Corp.,
378 Phil. 145 (1999).
[35] Records (G.R. No. 111495), pp.
47-54.
[36] Lee Chuy Realty Corporation v.
Court of Appeals, G.R. No. 104114, 4 December 1995, 250 SCRA 596.
[37] Nos. L-50405-06, 5 August 1981, 106
SCRA 513, 526.
[38] 123 Phil. 605, 612-613 (1966).
[39] Id. at 611.