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ROBERTO D. TUAZON v. LOURDES Q. DEL ROSARIO-SUAREZ

FACTS:

Respondent Lourdes Q. Del Rosario-Suarez owned a piece of land in Quezon City. She entered into a Contract of Lease with petitioner Roberto D. Tuazon for a duration of three years. During the lease, Lourdes offered to sell the property to Roberto within a specific time frame, but Roberto did not accept the offer or purchase the property within the given time.

After the lease expired, Lourdes sold the property to her child and the child's family at a significantly lower price. The new owners notified Roberto to vacate the property, and when he refused, they filed an Unlawful Detainer complaint. The Metropolitan Trial Court (MeTC) ruled in favor of the new owners, ordering Roberto to vacate the property.

During the appeal of the ejectment case, Roberto filed a complaint with the Regional Trial Court (RTC), seeking the annulment of the Deed of Absolute Sale, reconveyance of the property, damages, and a preliminary injunction. Initially, the RTC declared Lourdes and the new owners in default, but later set aside the default order. After the trial, the RTC dismissed Roberto's complaint, declaring the sale to the new owners as valid and binding. The Court of Appeals (CA) affirmed this decision.

Roberto petitioned the Supreme Court, arguing that Lourdes violated his right of first refusal and that the CA erred in dismissing his appeal.

ISSUES:

  1. Whether the letter of Lourdes to Roberto involved an option contract or a contract of a right of first refusal.

  2. Whether the offer made by Lourdes to sell the property to Roberto was a valid offer.

  3. Whether the counter-offer made by Roberto for a lower price constituted acceptance of Lourdes' offer.

  4. Whether the letter-offer of Lourdes gave Roberto a right of first refusal similar to the one given in Equatorial

  5. Whether Lourdes should be sanctioned for failing to file her appellee's brief before the CA

RULING:

  1. The letter of Lourdes to Roberto involved an option contract. The option contract grants Roberto a fixed period of two years to buy the subject property at a price certain. Therefore, the rules applicable to option contracts, as provided in Articles 1324 and 1479 of the Civil Code, apply.

  2. Lourdes' offer to sell the property to Roberto was not a valid offer. The offer did not have a distinct consideration, as required by Article 1479 of the Civil Code. Therefore, Lourdes could withdraw the offer at any time before acceptance, even if it was already accepted by Roberto.

  3. Roberto's counter-offer for a lower price did not constitute acceptance of Lourdes' offer. It was a qualified acceptance, which constituted a counter-offer under Article 1319 of the Civil Code. Since Lourdes did not accept Roberto's counter-offer, there was no contract that was perfected between them regarding the sale of the property.

  4. The letter-offer of Lourdes did not give Roberto a right of first refusal similar to the one given in Equatorial. The absence of a provision in the Contract of Lease granting Roberto a right of first refusal, and the fact that the letter-offer was made more than six months after the commencement of the lease, indicate that the offer was a separate and distinct one. Therefore, there is no justification to annul the deed of sale entered into by Lourdes with the De Leons.

  5. The failure of Lourdes to file her appellee's brief does not automatically result in a decision against her. The CA deemed Lourdes to have waived her right to file her brief, and proceeded to resolve the appeal based on the Appellant's Brief and the records of the case forwarded by the RTC. The CA properly acted on the appeal in this manner.

PRINCIPLES:

  • An option contract is a contract by virtue of which one party acquires the privilege of buying or selling certain securities or properties within a limited time at a specified price.

  • An option contract is different from a contract of a right of first refusal. A right of first refusal depends on the grantor's eventual intention to enter into a binding juridical relation with another and involves terms, including the price, that are yet to be later firmed up. In contrast, an option contract has a fixed period and a determined price.

  • An option to sell or a promise to buy or sell must be supported by a consideration distinct from the price to be valid (Article 1479).

  • An accepted unilateral promise to buy or sell is binding upon the promisor if it is supported by a consideration distinct from the price (Article 1479).

  • An offer may be withdrawn at any time before acceptance, except when the option is founded upon a consideration (Article 1324).

  • Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. A qualified acceptance constitutes a counter-offer (Article 1319).

  • Negotiating for a lower price constitutes a counter-offer and not acceptance of an offer.

  • An offer to sell a leased property, even if made to the lessee, must be a separate and distinct offer with its own consideration in order for the lessee to have a right of first refusal.

  • The failure to file an appellee's brief does not automatically result in a decision favorable to the appellant. The appellate court may proceed to resolve the appeal based on the appellant's brief and the records of the case.