Case Digest (G.R. No. 117355)
Facts:
Riviera Filipina, Inc. v. Court of Appeals, G.R. No. 117355, April 05, 2002, Supreme Court Second Division, De Leon, Jr., J., writing for the Court. Petitioner Riviera Filipina, Inc. (Riviera) sued respondents Juan L. Reyes (now deceased, substituted by his heirs), Philippine Cypress Construction & Development Corporation (Cypress), Cornhill Trading Corporation (Cornhill) and Urban Development Bank (UDB) to compel transfer of title to a 1,018‑sq.m. parcel along EDSA, Quezon City, alleging breach of its contractual right of first refusal under a lease.On November 23, 1982 Reyes leased the parcel to Riviera; paragraph 11 of the lease granted Riviera a right of first refusal if Reyes decided to sell during the lease term. The property had been mortgaged to Prudential Bank and foreclosed; the redemption period was to expire March 7, 1989. Reyes sought to sell to avoid losing the property. Negotiations between Reyes and Riviera stretched from 1988 into early 1989 with multiple offers: Reyes quoted as high as P6,000/sq.m.; Riviera, through its president Vicente C. Angeles, repeatedly held firm at P5,000/sq.m. (and earlier lower figures), at times stating the P5,000 figure was “fixed and final” and asking for quick decision.
Reyes served notice (via counsel Atty. Irineo Juan) invoking the lease’s right of first refusal and gave Riviera ten days to exercise it. Riviera sent letters expressing interest and later a final offer of P5,000/sq.m. Angeles later proposed payment terms (50% down; balance over five years at 12%); Reyes did not accept. Meanwhile Reyes negotiated with Rolando P. Traballo (President of Cypress) and, after further bargaining, accepted an offer of P5,300/sq.m. Cypress and Cornhill redeemed the property in February 1989 and on May 1, 1989 Reyes executed an absolute deed of sale to Cypress and Cornhill for P5,395,400; the purchasers thereafter mortgaged the property to UDB.
Riviera filed suit on August 31, 1989 (Civil Case No. Q‑89‑3371) to compel transfer of title upon payment of the purchase price paid by Cypress and Cornhill, alleging violation of its right of first refusal. The Regional Trial Court, Quezon City, Branch 89, dismissed Riviera’s complaint and all counterclaims on March 20, 1990, reasoning that Riviera had been steadfast in refusing to increase its offer and therefore effectively lost the right to match higher offers. The Court of Appeals (Special Seventh Division) affirmed in a decision dated June 6, 1994 and denied Riviera’s motion for reconsideration in a September 22, 1994 resolution. Riv...(Pro-only)
Issues:
- Should Riviera’s petition alleging grave abuse of discretion be treated as a special civil action under Rule 65 or as a petition for review under Rule 45?
- Did Reyes (and the subsequent purchasers) violate Riviera’s contractual right of first refusal so as to obligate reconveyance or rescission?
- Did the Court of Appeals commit grave abuse of discretion by failing to find that Reyes deceived Riviera out of its right of first refusal?
- Did Reyes’ death during the appeal and the initial lack of substitution render the Court o...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)