Title
Bowe vs. Court of Appeals
Case
G.R. No. 95771
Decision Date
Mar 19, 1993
A 5-year lease agreement led to a verbal contract to sell, but failure to pay the full price and lack of a formal deed resulted in the Supreme Court affirming the lease's renewal and denying petitioners' ownership claims.
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Case Digest (G.R. No. 95771)

Facts:

  1. Lease Agreement: On June 27, 1979, Luz Garcia (now deceased), wife of private respondent Teodoro Garcia, entered into a 5-year lease agreement with Laura Arbolario (now deceased, substituted by her son Lawrence Bowe) for a 2-storey, 6-door apartment building in Olongapo City. The lease was to run from September 1, 1979, to September 1, 1984. The agreement allowed the petitioners to sublease the property and collect rentals, with the condition that they would pay Teodoro Garcia P30,000 annually after settling a P75,000 debt owed to them.

  2. Verbal Agreement to Sell: In October 1982, Teodoro Garcia and his son Serafin verbally agreed to sell the property to the spouses Cirilo and Laura Arbolario for P220,000. Down payments totaling P66,000 were made, with the balance to be paid upon Teodoro Garcia's return to the Philippines, when he would execute the deed of absolute sale.

  3. Termination of Agreement: After the last payment on December 22, 1983, Teodoro Garcia informed the petitioners that the deal was off. Following the expiration of the lease on September 1, 1984, Serafin Garcia offered to account for the payments made by the petitioners, but they refused, claiming ownership of the property.

  4. Filing of Complaint: Teodoro Garcia, represented by Serafin, filed a complaint for termination of the lease, reimbursement of rents, and damages, alleging that the petitioners refused to vacate the premises after the lease expired.

  5. Petitioners' Defense: The petitioners admitted the lease but claimed that the property was sold to them in 1982. They argued that they had made payments and improvements on the property and had a right to remain as owners.

  6. Lower Court Decision: The Regional Trial Court ruled in favor of Teodoro Garcia, terminating the lease, ordering the petitioners to vacate, and requiring them to pay unpaid rentals, attorney’s fees, and other damages.

  7. Appeal to Court of Appeals: The Court of Appeals affirmed the lower court’s decision, prompting the petitioners to file this petition for review.

Issue:

  1. Whether the contract of lease was supplanted or abandoned by the verbal agreement to sell the property.
  2. Whether the verbal agreement constituted a contract of sale or a contract to sell.
  3. Whether the suit for termination of lease was actually an unlawful detainer case, which should have been filed in an inferior court.
  4. Whether the Court of Appeals erred in affirming the lower court’s decision.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)


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