Case Digest (G.R. No. 127695)
Facts:
In Heirs of Luis Bacus vs. Court of Appeals and Spouses Faustino and Victoriana Duray, G.R. No. 127695, decided December 3, 2001 under the 1987 Constitution, Luis Bacus leased on June 1, 1984 to private respondent Faustino Duray a 3,002-square-meter agricultural parcel in Bulacao, Talisay, Cebu (Lot No. 3661-A-3-B-2, TCT No. 48866) for six years, with an option to buy 2,000 square meters at P200 per square meter, adjustable to the peso-dollar rate. Shortly before the lease expired on May 31, 1990, Bacus died on October 10, 1989. On March 15, 1990, the Durays notified Roque Bacus, one of the heirs, of their intent to exercise the option and requested a special power of attorney to execute the sale. The heirs refused, prompting Faustino Duray to annotate an adverse claim on the title on March 30, 1990 and to file for specific performance before the Lupon Tagapamayapa on April 5, 1990. He presented a bank certification indicating arrangements for a P700,000 loan. Failing to settleCase Digest (G.R. No. 127695)
Facts:
- Lease Agreement and Option to Buy
- On June 1, 1984, Luis Bacus (lessor) leased to Faustino Duray (lessee) an agricultural parcel in Bulacao, Talisay, Cebu, known as Lot No. 3661-A-3-B-2, area 3,002 sqm, covered by TCT No. 48866.
- Lease term: six years (ending May 31, 1990). The contract granted the lessee an exclusive, irrevocable option to purchase 2,000 sqm within five years from one year after its effectivity, at ₱200/sqm, with price adjustment tied to the peso-dollar rate (₱14/USD at execution).
- Exercise of Option and Pre-Litigation Actions
- Lessor’s death on October 10, 1989. On March 15, 1990, the Durays informed heir Roque Bacus of their readiness to buy and requested a special power of attorney to facilitate sale documents.
- On March 30, 1990, the Durays’ adverse claim was annotated on TCT No. 63269 for the 2,000 sqm portion.
- April 5, 1990: Complaint for specific performance filed with the Lupon Tagapamayapa, presenting a bank manager’s certificate that financing of approx. ₱700,000 was being arranged. No settlement was reached.
- Judicial Proceedings and Lower Courts’ Decisions
- April 27, 1990: Durays filed in RTC Cebu a complaint for specific performance with damages, praying for deed of sale execution, receipt of purchase price, and damages. Petitioners alleged no valid tender and that petitioners had represented lack of funds.
- October 30, 1990: Before decision, the Durays caused issuance of a cashier’s check for ₱650,000 (₱625,000 in record) payable to the petitioners.
- RTC decision (August 3, 1991): Ordered petitioners to execute deed of sale upon payment of ₱675,675 within 30 days from finality of decision.
- CA decision (November 29, 1996): Affirmed, holding that the Durays validly exercised option before lease expiration, evidenced by letters, bank certification, adverse claim annotation, and Lupon petition.
- Petition to the Supreme Court
- Petitioners sought review of the CA decision under Rule 45, alleging:
- Private respondents failed to tender payment or consign it before contract expiry.
- Bank certification is not legal tender.
- Issuance of cashier’s check after trial submission cannot cure non-tender within the option period.
- Private respondents argued only legal issues were raised and that the CA correctly ruled they timely exercised the option.
Issues:
- Upon exercising the option to buy, were private respondents required to deliver the purchase price or consign it in court before petitioners executed the deed of sale?
- Did private respondents incur delay by not delivering the purchase price or consigning it in court on or before the expiration of the lease contract with option to buy?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)