Case Digest (G.R. No. 215659) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In 1974, Delfin Pacheco and his sister Pelagia Pacheco owned Lot No. 1095 (27,169 sqm) of Malinta Estate in Polo (now Valenzuela), Bulacan, under Transfer Certificate of Title No. T-4240. On April 3, 1974, they leased this parcel to Construction Components International, Inc., stipulating that if the lessors decided to sell the property during or after the lease term, they must first offer it to the lessee under similar conditions. On August 3, 1974, Construction Components assigned its rights and obligations to Hydro Pipes Philippines, Inc. with the Pachecos’ written consent, and the lease and assignment were duly annotated on the title. On January 3, 1976, the Pachecos executed a Deed of Exchange with Delpher Trades Corporation, conveying Lot No. 1095 and another parcel (TCT No. 4273) in return for 2,500 no-par value shares in the corporation, valued at ₱1,500,000. Hydro Pipes, asserting a breach of its right of first refusal, filed an amended complaint in the Court of First I Case Digest (G.R. No. 215659) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Ownership and Lease Agreement
- In 1974, Delfin and Pelagia Pacheco co-owned Lot No. 1095 (27,169 sqm) in Malinta Estate, Valenzuela (TCT No. T-4240).
- On April 3, 1974, they leased Lot 1095 to Construction Components International, Inc., stipulating that if the lessors decided to sell, the lessee had a right of first refusal (Exhs. A–A-5).
- Assignment and Deed of Exchange
- On August 3, 1974, Construction Components assigned its lease rights to Hydro Pipes Philippines, Inc., with the Pachecos’ consent and annotation on the title (Exhs. B–B-6, D-3).
- On January 3, 1976, Delfin and Pelagia executed a deed of exchange conveying Lot 1095 (TCT No. T-4240) and another Malinta Estate parcel (TCT No. 4273) to Delpher Trades Corporation in exchange for 2,500 no-par value shares valued at ₱1.5 million (Exhs. C–C-5).
- Litigation and Lower Court Decisions
- Hydro Pipes sued for reconveyance, invoking its right of first refusal; the CFI of Bulacan ruled in its favor, ordering conveyance at ₱14/sqm (CFI decision, pp. 246–247).
- The Intermediate Appellate Court affirmed; Delpher and the Pachecos petitioned the Supreme Court for certiorari (G.R. No. 69259).
Issues:
- Nature of Deed of Exchange
- Did the deed of exchange constitute a sale triggering the lease’s right of first refusal?
- Was there an actual transfer of ownership interests to a third party?
- Corporate Form and Substance
- Is Delpher Trades Corporation a separate entity or merely the Pachecos’ alter ego?
- Does incorporation change the substance of ownership for purposes of the lease covenant?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)