SYNOPSIS Dizon who allegedly acted as agent of petitioners pursuant to
the supposed authority given by petitioner as payee thereof
In 1974, Overland Express Lines, Inc. entered into a does not amount to a perfected contract of sale pursuant to Contract of Lease with Option to Buy with herein petitioners the contract of lease with option to buy. There was no valid involving a land in Quezon City. The term of the lease was consent by the petitioners on the supposed sale entered into for one (1) year, during which period, the lessee was granted by Alice Dizon, as petitioners alleged agent, and private an option to purchase the lot for P3,000.00 per square respondent. meter. Thereafter, the lease shall be on a per month basis with a monthly rental of P3,000.00. Later, for failure to pay SYLLABUS the increased rental of P8,000.00 per month effective June 1976, herein petitioners filed an action for ejectment to which 1. CIVIL LAW; SPECIAL CONTRACTS; LEASE; NON- the Corporation was ordered to vacate the leased premises. PAYMENT OF RENTALS GIVES RIGHT TO EVICT, The Corporation, however, questioned the jurisdiction of the REGARDLESS OF THE ACTION FOR SPECIFIC City Court over the ejectment case. Subsequently, the PERFORMANCE TO ENFORCE OPTION TO PURCHASE Corporation filed its own action for specific performance and WHICH WAS ALSO INSTITUTED. Petitioners have fixing the period for obligation. It sought to compel the established a right to evict private respondent from the execution of a deed of sale pursuant to the option to subject premises for non-payment of rentals. Since the rent purchase, and the receipt of the partial payment it made and was paid on a monthly basis, the period of lease is to fix the period to pay the balance thereof. considered to be from month to month in accordance with Article 1687 of the New Civil Code. Where the rentals are Petitioners have established a right to evict private paid monthly, the lease, even if verbal may be deemed to be respondent from the subject premises for non-payment of on a monthly basis, expiring at the end of every month rentals. In this regard, the then City Court had exclusive pursuant to Article 1687, in relation to Article 1673 of the jurisdiction over the ejectment suit. The filing by the Civil Code. In such case, a demand to vacate is not even Corporation of a suit with the RTC for specific performance necessary for judicial action after the expiration of every did not divest the City Court of its jurisidiction over the month. When private respondent failed to pay the increased ejectment case The decision of the City Court was affirmed rental, the petitioners had a cause of action to institute an by the Intermediate Appellate Court and the Supreme Court. ejectment suit against the former with the then City Court. In Having failed to exercise the option to purchase within the this regard, the City Court (now MTC) had exclusive stipulated one-year period, private respondent Corporation jurisdiction over the ejectment suit. The filing by private cannot now enforce its option. An implied new lease on a respondent of a suit with the Regional Trial Court for specific monthly basis does not ipso facto carry with it an implied performance to enforce the option to purchase did not divest revival of the option to purchase the leased premises. The the then City Court of its jurisdiction to take cognizance over right to exercise the option to purchase expired with the the ejectment case. Of note is the fact that the decision of termination of the original contract of lease for one year. The the City Court was affirmed by both the Intermediate private respondent delivered a check of P300,000.00 to Alice Appellate Court and this Court. 2. ID.; ID.; ID.; FAILURE TO EXERCISE OPTION TO governing the form of contracts. Thus, the elements of a PURCHASE WITHIN THE STIPULATED PERIOD; contract of sale are consent, object, and price in money or its EFFECT; CASE AT BAR. Having failed to exercise the equivalent. It bears stressing that the absence of any of option to purchase within the stipulated one year period, these essential elements negates the existence of a private respondent cannot enforce its option to purchase perfected contract of sale. Sale is a consensual contract and anymore. Moreover, even assuming arguendo that the right he who alleges it must show its existence by competent to exercise the option still subsists at the time private proof. respondent tendered the amount, the suit for specific performance to enforce the option to purchase was filed 4. ID.; ID.; CONTRACT OF AGENCY; NOT more than ten (10) years after accrual of the cause of action APPRECIATED. There was no valid consent by the as provided under Article 1144 of the New Civil Code. In this petitioners (as co-owners of the leased premises) on the case, there was a contract of lease for one (1) year with supposed sale entered into by Dizon, as petitioners alleged option to purchase. The contract of lease expired without agent, and private respondent. The basis for agency is the private respondent, as lessee, purchasing the property representation and a person dealing with an agent is put but remained in possession thereof. Hence, there was an upon inquiry and must discover upon his peril the authority of implicit renewal of the contract of lease on a monthly basis. the agent. As provided in Article 1868 of the New Civil The other terms of the original contract of lease which are Code, there was no showing that petitioners consented to revived in the implied new lease under Article 1670 of the the act of Dizon nor authorized her to act on their behalf with New Civil Code are only those terms which are germane to regard to her transaction with private respondent. The most the lessees right of continued enjoyment of the property prudent thing private respondent should have done was to leased. Therefore, an implied new lease does not ipso facto ascertain the extent of the authority of Dizon. Being carry with it any implied revival of private respondents option negligent in this regard, private respondent cannot seek to purchase (as lessee thereof) the leased premises. The relief on the basis of a supposed agency. provision entitling the lessee the option to purchase the leased premises is not deemed incorporated in the impliedly APPEARANCES OF COUNSEL renewed contract because it is alien to the possession of the lessee. Private respondents right to exercise the option to M.M. Lazaro Associates for petitioner. purchase expired with the termination of the original contract of lease for one year.
3. ID.; ID.; CONTRACT OF SALE; WHEN PERFECTED.
Under Article 1475 of the New Civil Code, the contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. From that moment, the parties may reciprocally demand performance, subject to the provisions of the law