Republic of the
Supreme Court
FIRST DIVISION
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ROBERTO D. TUAZON, |
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G.R. No. 168325 |
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Petitioner, |
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- versus - |
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Present: |
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LOURDES Q. DEL ROSARIO-SUAREZ,
CATALINA R. SUAREZ-DE LEON, WILFREDO DE LEON, MIGUEL LUIS S. DE LEON, ROMMEL
LEE S. DE LEON, and GUILLERMA L. SANDICO-SILVA, as attorney-in-fact of the
defendants, except Respondents. |
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LEONARDO-DE
CASTRO, ABAD,⃰ and PEREZ,
JJ. Promulgated: December
8, 2010 |
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D E C I S I O N
In a situation where the lessor makes an offer to sell to the lessee a
certain property at a fixed price within a certain period, and the lessee fails
to accept the offer or to purchase on time, then the lessee loses his right to
buy the property and the owner can validly offer it to another.
This Petition for Review
on Certiorari[1] assails the Decision[2] dated May 30, 2005 of the
Court of Appeals (CA) in CA-G.R. CV No. 78870, which affirmed the Decision[3] dated November 18, 2002 of
the Regional Trial Court (RTC), Branch 101,
Factual
Antecedents
Respondent Lourdes Q. Del
Rosario-Suarez (Lourdes) was the owner of a parcel of land, containing more or
less an area of 1,211 square meters located along Tandang Sora Street, Barangay Old Balara, Quezon City and
previously covered by Transfer Certificate of Title (TCT) No. RT-56118[4]
issued by the Registry of Deeds of Quezon City.
On June 24, 1994, petitioner Roberto
D. Tuazon (Roberto) and P37,541,000.00
and gave him two years from January 2, 1995 to decide on the said offer.
On June 19,
1997, or more than four months after the expiration of the Contract of Lease,
Lourdes sold subject parcel of land to her only child, Catalina Suarez-De Leon,
her son-in-law Wilfredo De Leon, and her two grandsons, Miguel Luis S. De Leon
and Rommel S. De Leon (the De Leons), for a total consideration of only P2,750,000.00
as evidenced by a Deed of Absolute Sale[7]
executed by the parties. TCT No. 177986[8]
was then issued by the Registry of Deeds of Quezon City in the name of the De
Leons.
The new owners
through their attorney-in-fact, Guillerma S. Silva, notified Roberto to vacate
the premises. Roberto refused hence, the
De Leons filed a complaint for Unlawful Detainer before the Metropolitan Trial
Court (MeTC) of
Ruling of the Regional Trial Court
On November 8,
2000, while the ejectment case was on appeal, Roberto filed with the RTC of
Quezon City a Complaint[10]
for Annulment of Deed of Absolute Sale, Reconveyance, Damages and Application
for Preliminary Injunction against
On January 8,
2001, respondents filed An Answer with Counterclaim[12]
praying that the Complaint be dismissed for lack of cause of action. They claimed that the filing of such case was
a mere leverage of Roberto against them because of the favorable Decision
issued by the MeTC in the ejectment case.
On September 17,
2001, the RTC issued an Order[13]
declaring
After trial, the
court a quo rendered a Decision
declaring the Deed of Absolute Sale made by
WHEREFORE, premises considered, judgment is hereby
rendered dismissing the above-entitled Complaint for lack of merit, and
ordering the Plaintiff to pay the Defendants, the following:
1.
the amount of
P30,000.00 as moral damages;
2.
the amount of
P30,000.00 as exemplary damages;
3.
the amount of
P30,000.00 as attorney’s fees; and
4.
cost of the
litigation.
SO ORDERED.[16]
Ruling of the Court of Appeals
On May 30, 2005,
the CA issued its Decision dismissing Roberto’s appeal and affirming the
Decision of the RTC.
Hence, this Petition for Review on Certiorari
filed by Roberto advancing the following arguments:
I.
The Trial Court and the
Court of Appeals had decided that the “Right of First Refusal” exists only
within the parameters of an “Option to Buy”, and did not exist when the
property was sold later to a third person, under favorable terms and conditions
which the former buyer can meet.
II.
What is the status or
sanctions of an appellee in the Court of Appeals who has not filed or failed to
file an appellee’s brief?[17]
Petitioner’s Arguments
Roberto
claims that
the principle of “right of first refusal” by not giving
him “notice” and the opportunity to buy the property under the same terms and
conditions or specifically based on the much lower price paid by the De Leons.
Roberto further contends that he is
enforcing his “right of first refusal” based on Equatorial Realty
Development, Inc. v. Mayfair Theater, Inc.[18]
which is the leading case on the “right of first refusal.”
Respondents’
Arguments
On the other
hand, respondents posit that this case is not covered by the principle of
“right of first refusal” but an unaccepted unilateral promise to sell or, at
best, a contract of option which was not perfected. The letter of P37,541,000.00. As an option
contract, the said letter would have been binding upon
Our Ruling
The petition is without merit.
This case involves an option
contract and not a contract of a right of first refusal
In Beaumont v. Prieto,[19] the nature of an
option contract is explained thus:
In his Law Dictionary,
edition of 1897, Bouvier defines an option as a contract, in the following
language:
‘A contract by virtue of
which A, in consideration of the payment of a certain sum to B, acquires the
privilege of buying from, or selling to, B certain securities or properties
within a limited time at a specified price. (Story vs. Salamon, 71 N. Y.,
420.)’
From Vol. 6, page 5001, of the work
“Words and Phrases,” citing the case of Ide vs. Leiser (24 Pac., 695; 10
‘An agreement in writing
to give a person the ‘option’ to purchase lands within a given time at a named
price is neither a sale nor an agreement to sell. It is simply a contract by
which the owner of property agrees with another person that he shall have the
right to buy his property at a fixed price within a certain time. He does
not sell his land; he does not then agree to sell it; but he does sell
something; that is, the right or privilege to buy at the election or option of
the other party. The second party gets in praesenti, not lands, nor an
agreement that he shall have lands, but he does get something of value; that
is, the right to call for and receive lands if he elects. The owner parts with
his right to sell his lands, except to the second party, for a limited period.
The second party receives this right, or rather, from his point of view, he
receives the right to elect to buy.
But the two definitions above cited
refer to the contract of option, or, what amounts to the same thing, to the
case where there was cause or consideration for the obligation x x x. (Emphasis supplied.)
On the other hand, in Ang Yu Asuncion v. Court of Appeals,[20] an elucidation on
the “right of first refusal” was made thus:
In the law on sales, the so-called ‘right of first
refusal’ is an innovative juridical relation. Needless to point out, it cannot
be deemed a perfected contract of sale under Article 1458 of the Civil Code.
Neither can the right of first refusal, understood in its normal concept,
per se be brought within the purview of an option under the second
paragraph of Article 1479, aforequoted, or possibly of an offer under Article
1319 of the same Code. An option or an offer would
require, among other things, a clear certainty on both the object and the cause or consideration of
the envisioned contract. In a right of first refusal, while the object
might be made determinate, the exercise of the right, however, would be
dependent not only on the grantor's eventual intention to enter into a binding
juridical relation with another but also on terms, including the price, that
obviously are yet to be later firmed up. Prior thereto, it can at best be so described as merely belonging to a
class of preparatory juridical relations governed not by contracts (since the
essential elements to establish the vinculum juris would still be
indefinite and inconclusive) but by, among other laws of general application, the pertinent scattered provisions of
the Civil Code on human conduct.
Even on the premise that such right of first
refusal has been decreed under a final judgment, like here, its breach cannot
justify correspondingly an issuance of a writ of execution under a judgment
that merely recognizes its existence, nor would it sanction an action for
specific performance without thereby negating the indispensable element of consensuality
in the perfection of contracts. It is not
to say, however, that the right of first refusal would be inconsequential for,
such as already intimated above, an unjustified disregard thereof, given, for
instance, the circumstances expressed in Article 19 of the Civil Code, can warrant a recovery for
damages. (Emphasis supplied.)
From the foregoing, it is thus clear that an option contract is entirely
different and distinct from a right of first refusal in that in the former, the
option granted to the offeree is for a fixed period and at a determined
price. Lacking these two essential
requisites, what is involved is only a right of first refusal.
In this case, the
controversy is whether the letter of
Josefa Subd. Balibago
Angeles City 2009
January 2, 1995
Tuazon Const. Co.
986 Tandang Sora
Dear Mr. Tuazon,
I received with great joy and happiness the big box of sweet grapes and ham, fit for a king’s party. Thanks very much.
I am getting very old (79 going 80 yrs. old) and wish
to live in the
I am offering you to buy my 1211 square meter
at P37,541,000.00 you can pay me in dollars in the name of my
daughter. I never offered it to anyone. Please shoulder the expenses for the
transfer. I wish the Lord God will help you buy my lot easily and you will be
very lucky forever in this place. You have all the time to decide when you
can, but not for 2 years or more.
I wish you long life, happiness, health, wealth and
great fortune always!
I hope the Lord God will help you be the recipient of
multi-billion projects aid from other countries.
Thank
you,
Lourdes
Q. del Rosario vda de Suarez
It is clear that the above letter
embodies an option contract as it grants Roberto a fixed period of only two
years to buy the subject property at a price certain of P37,541,000.00. It being an option contract, the rules
applicable are found in Articles 1324 and 1479 of the Civil Code which provide:
Art. 1324. When the
offerer has allowed the offeree a certain period to accept, the offer may be
withdrawn at any time before acceptance by communicating such withdrawal,
except when the option is founded upon a consideration, as something paid or
promised.
Art. 1479. A promise to
buy and sell a determinate thing for a price certain is reciprocally
demandable.
An accepted unilateral
promise to buy or to sell a determinate thing for a price certain is binding
upon the promissor if the promise is supported by a consideration distinct from
the price.
It is clear from
the provision of Article 1324 that there is a great difference between the
effect of an option which is without a consideration from one which is founded
upon a consideration. If the option is without any consideration, the offeror
may withdraw his offer by communicating such withdrawal to the offeree at
anytime before acceptance; if it is founded upon a consideration, the offeror
cannot withdraw his offer before the lapse of the period agreed upon.
The second paragraph of Article 1479
declares that “an accepted unilateral promise to buy or to sell a determinate
thing for a price certain is binding upon the promissor if the promise is
supported by a consideration distinct from the price.” Sanchez v. Rigos[21] provided an
interpretation of the said second paragraph of Article 1479 in relation to
Article 1324. Thus:
There is no question
that under Article 1479 of the new Civil Code "an option to sell," or
"a promise to buy or to sell," as used in said article, to be valid
must be "supported by a consideration distinct from the price." This
is clearly inferred from the context of said article that a unilateral promise
to buy or to sell, even if accepted, is only binding if supported by
consideration. In other words, "an accepted unilateral promise can only
have a binding effect if supported by a consideration, which means that the
option can still be withdrawn, even if accepted, if the same is not
supported by any consideration. Hence, it is not disputed that the option is
without consideration. It can therefore be withdrawn notwithstanding the
acceptance made of it by appellee.
It is true that under Article
1324 of the new Civil Code, the general rule regarding offer and acceptance is
that, when the offerer gives to the offeree a certain period to accept,
"the offer may be withdrawn at any time before acceptance" except
when the option is founded upon consideration, but this general rule must be
interpreted as modified by the provision of Article 1479 above referred
to, which applies to "a promise to buy and sell" specifically.
As already stated, this rule requires that a promise to sell to be valid must
be supported by a consideration distinct from the price.
In Diamante
v. Court of Appeals,[22]
this Court further declared that:
A unilateral promise to
buy or sell is a mere offer, which is not converted into a contract except at
the moment it is accepted. Acceptance is the act that gives life to a
juridical obligation, because, before the promise is accepted, the promissor
may withdraw it at any time. Upon acceptance, however, a bilateral contract
to sell and to buy is created, and the offeree ipso facto assumes the
obligations of a purchaser; the offeror, on the other hand, would be liable for
damages if he fails to deliver the thing he had offered for sale.
x x x x
Even if the promise was accepted, private
respondent was not bound thereby in the absence of a distinct consideration. (Emphasis
ours.)
In this case, it is undisputed that
Roberto did not accept the terms stated in the letter of
Consent
is manifested by the meeting of the offer and the acceptance upon
the thing and the cause which are to constitute the contract. The offer must be
certain and the acceptance absolute. A qualified acceptance
constitutes a counter-offer.
(Emphasis supplied.)
The counter-offer of Roberto for a much
lower price was not accepted by
Equatorial Realty Development, Inc. v. Mayfair Theater, Inc. is not applicable here
It is the position of Roberto that
the facts of this case and that of Equatorial are similar in nearly all
aspects. Roberto is a lessee of the property like Mayfair Theater in Equatorial.
There was an offer made to Roberto by
Roberto’s reliance in Equatorial is
misplaced. Despite his claims, the facts
in Equatorial radically
differ from the facts of this case. Roberto
overlooked the fact that in Equatorial, there was an express provision
in the Contract of Lease that –
(i)f the LESSOR should desire to sell the leased
properties, the LESSEE shall be given 30-days exclusive option to purchase the
same.
There is no such
similar provision in the Contract of Lease between Roberto and
It is also very clear that in Equatorial,
the property was sold within the lease period. In this case, the subject
property was sold not only after the expiration of the period provided in the
letter-offer of
Moreover, even if the offer of
All told, the facts of the case, as
found by the RTC and the CA, do not support Roberto’s claims that the letter of
Lourdes gave him a right of first refusal which is similar to the one given to
Mayfair Theater in the case of Equatorial. Therefore, there is no justification to annul
the deed of sale validly entered into by
What is the effect of the failure
of
Lastly, Roberto argues that
Certainly, the appellee’s failure to
file her brief would not mean that the case would be automatically decided
against her. Under the circumstances,
the prudent action on the part of the CA would be to deem
On the second issue, we hold that the Court of
Appeals did not commit grave abuse of discretion in considering the appeal
submitted for decision. The proper remedy in case of denial of the motion to
dismiss is to file the appellee’s brief and proceed with the appeal. Instead,
petitioner opted to file a motion for reconsideration which, unfortunately, was
pro forma. All the grounds raised therein have been discussed in the
first resolution of the respondent Court of Appeals. There is no new ground
raised that might warrant reversal of the resolution. A cursory perusal of the
motion would readily show that it was a near verbatim repetition of the grounds
stated in the motion to dismiss; hence, the filing of the motion for
reconsideration did not suspend the period for filing the appellee’s brief. Petitioner
was therefore properly deemed to have waived his right to file appellee’s
brief. (Emphasis supplied.)
In the above cited case, De
The failure of the
appellee to file his brief would not result to the rendition of a decision
favorable to the appellant. The former
is considered only to have waived his right to file the Appellee’s Brief. The CA has the jurisdiction to resolve the
case based on the Appellant’s Brief and the records of the case forwarded by
the RTC. The appeal is therefore
considered submitted for decision and the CA properly acted on it.
WHEREFORE, the instant petition for review on certiorari is DENIED.
The assailed Decision of the Court of Appeals in CA-G.R.
CV No. 78870, which affirmed the Decision dated November 18, 2002 of the
Regional Trial Court, Branch 101,
SO ORDERED.
MARIANO C.
Associate Justice
WE
CONCUR:
RENATO C. CORONA
Chief Justice
Chairperson
|
TERESITA J. LEONARDO-DE CASTRO Associate
Justice |
ROBERTO A. ABAD Associate
Justice |
JOSE
Associate Justice
C E R T I F I C A T I O N
Pursuant
to Section 13, Article VIII of the Constitution, it is hereby certified 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.
RENATO C. CORONA
Chief Justice
⃰ In lieu of Associate Justice Presbitero
J. Velasco, Jr., per Special Order No. 917 dated November 24, 2010.
[1] Rollo, pp. 9-26.
[2] CA rollo, pp. 41-55; penned by Associate Justice Vicente S.E. Veloso and concurred in by Associate Justices Roberto A. Barrios and Amelita G. Tolentino.
[3] Records, pp. 154-162.
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[18] 332 Phil 525, 550 (1996).
[19] 41 Phil 670, 686-687 (1916).
[20] G.R. No. 109125, December 2, 1994, 238 SCRA 602, 614-615.
[21] 150-A Phil. 714, 721-722 (1972), citing Southwestern Sugar and Molasses Co. v. Atlantic Gulf and Pacific Co., 97 Phil. 249 251-252 (1955).
[22] G.R. No. 51824, February 7, 1992, 206 SCRA 52, 62, citing Tolentino, Civil Code of the Philippines, vol. V, 1959 ed., 20-21.
[23] 432 Phil. 775, 791 (2002).