G.R. No. 9973 - Hicks vs. Manila Hotel Co.

On November 9, 1912, the plaintiff (W. E. Hicks) and the defendant (Manila Hotel Company) entered into a written contract for the exclusive right to furnish five-passenger automobiles to hotel patrons for a one‐year period.
The contract included a renewal clause stated as: "This agreement to remain in effect for a period of one year from date, with preference over others of renewing for a further period of one year," which was purported to grant the plaintiff a right to extend the contract for a second year.

The plaintiff performed his contractual duties during the first year and successfully discharged his obligations by providing the stipulated number of automobiles and attending to the hotel’s patrons.
The contract was complete in its terms, including the provision regarding compensation, which involved the receipt of business proceeds minus a specified percentage payable to the defendant.

Approximately halfway through the first year (around June 1913), the defendant, allegedly disregarding the renewal clause, solicited proposals from various garages for the five-passenger automobile privilege for the subsequent period (from November 1913 to November 1914).
Among the competing garages was that of George E. Brown, whose bid was accepted by the defendant—prior to the termination of the first year—resulting in a contract with Brown that covered the period intended as the renewal year for the plaintiff.
Upon the expiration of the first contract year, the defendant proceeded to evict the plaintiff from his office and refused to allow him to continue his services under the renewal clause, thus depriving him of the privileges conferred by the original agreement.

The plaintiff brought an action to recover damages arising from the defendant’s alleged breach of the renewal stipulation, claiming loss of anticipated profits for the second year.
The defendant contended that the renewal clause merely granted the plaintiff a preferential, competitive right rather than an absolute, enforceable renewal option, and further argued that the plaintiff’s subsequent conduct might have amounted to a waiver of any such right.

Whether the contractual clause "with preference over others of renewing for a further period of one year" conferred upon the plaintiff an enforceable, absolute right to renew the contract for the second year.
Whether this clause was intended to apply exclusively to the contract in which it was contained, or if it was merely a mechanism facilitating a competitive bid among potential renewal candidates.

Whether the plaintiff’s subsequent actions—including attempting to negotiate alternative arrangements with the hotel or with Brown—constituted a waiver or abandonment of his renewal rights.
Whether the defendant’s prior repudiation of the renewal obligation (by contracting with Brown) affected or nullified any claim by the plaintiff to continue under the renewal clause.