RIVIERA FILIPINA, INC. vs. CA | G.R. No. 117355 | April 5, 2002 and President of Cypress.
nt of Cypress. Traballo bargained for P5,300.00 per square
meter. Reyes accepted the same, but still decided to approach Riviera
Facts: in a last attempt to ask them to increase their P5,000.00 offer. The
offer was to no avail.
November 23, 1982, respondent Juan L. Reyes (Reyes, for
brevity) executed a Contract of Lease with Riviera. The ten-year (10) On May 1, 1989, a Deed of Absolute Sale covering the subject
renewable lease of Riviera, which started on August 1, 1982, involved property was executed by Reyes in favor of Cypress and Cornhill and
a 1,018 square meter parcel of land located along EDSA, Quezon City. on the same date, Cypress and Cornhill mortgaged the subject property
to Urban Development Bank. Riviera sought from Reyes, Cypress and
Said parcel of land was subject to a Real Estate Mortgage Cornhill a resale of the subject property to it claiming that its right of
executed in favor of Prudential Bank. Since the loan with Prudential first refusal under the lease contract was violated.
Bank remained unpaid upon maturity, the mortgagee bank extra
judicially foreclosed the mortgage. At the public auction sale, the The trial court dismissed the complaint of Riviera. It ruled that
mortgagee bank emerged as the highest bidder. Realizing that he could the defendants therein did not violate Riviera’s right of first refusal.
not possibly raise the money in time in order to redeem the subject That the plaintiff having had already lost its right of first refusal, at the
property, Reyes decided to sell the property instead. first instance, by refusing to buy the said property at P6,000.00, per
square meter.
Paragraph 11 of the lease contract expressly provided that:
"LESSEE shall have the right of first refusal should the LESSOR Dissatisfied with the decision of the trial court, both parties
decide to sell the property during the term of the lease," In light of appealed to the Court of Appeals. However, the appellate court,
this, Reyes offered to sell the subject property to Riviera for P5,000.00 affirmed the decision of the trial court in its entirety. Riviera filed a
per sqm. However, Angeles bargained for P3,500.00 per sqm. Reyes motion for reconsideration, but the appellate court denied the same in a
was not amenable. Riviera increased its offer to P4,000.00 per sqm. Resolution dated September 22, 1994. Hence, Riviera interposed the
But Reyes still did not accept the offer and instead asked for P6,000.00 instant petition.
per sqm since the value of the property in the area had appreciated in
view of the plans of Araneta to develop the vicinity. Issue:
In a letter by Atty. Irineo S. Juan, acting as counsel for Reyes, Whether or not petitioner, Riviera Filipina already lost its “Right of
stated that they are encouraged to exercise “the right of first refusal” in First Refusal”?
the sale of the said proper and are given 10 days from receipt of letter
to purchase the same, failure to do so means the right is waived. YES, Riviera had lost its Right of First Refusal.
Riviera increased its offer to P5,000.00 but Reyes still did not accede
as he was firm with the offer of P6,000.00 per sqm. Riviera made it Held:
final its intention to purchase it for P5,000.00 per sqm and asked that
the decision of Reyes and written reply be given within 15 days since Riviera posits the view that its right of first refusal was totally
there are also other properties being offered to them at the moment. disregarded by Reyes when he sold the property to Cypress and
Reyes still did not accede. Cornhill. It contends that the right of first refusal principally amounts
to a right to match in the sense that it needs another offer for the right
Reyes confided to Rolando P. Traballo, a close family friend to be exercised.
The prevailing doctrine is that a right of first refusal means WHEREFORE, the instant petition is hereby DENIED, and the
identity of terms and conditions to be offered to the lessee and all other Decision of the Court of Appeals dated June 6, 1994 in CA-G.R. CV
prospective buyers and a contract of sale entered into in violation of a No. 26513 is AFFIRMED. No pronouncement as to costs.
right of first refusal of another person, while valid, is rescissible.
In the case at bar, the Court finds relevant and significant the
cardinal rule in the interpretation of contracts that the intention of the
parties shall be accorded primordial consideration and in case of
doubt, their contemporaneous and subsequent acts shall be principally
considered.
As clearly shown by the records and transcripts of the case, the
actions of the parties to the contract of lease, Reyes and Riviera,
shaped their understanding and interpretation of the lease provision
"right of first refusal" to mean simply that should the lessor Reyes
decide to sell the leased property during the term of the lease, such sale
should first be offered to the lessee Riviera. And that is what exactly
ensued between Reyes and Riviera.
Based from the letters between the parties, Riviera was so
intractable in its position and took obvious advantage of the
knowledge of the time element. Riviera strongly exhibited a "take-it or
leave-it" attitude in its negotiations with Reyes, where Riviera
absolutely refused to reconsider its offer to Reyes. Riviera cannot
allege that had it been informed of the offer of P5,300.00 of Cypress
and Cornhill it would have matched said price. Reyes was under no
obligation to disclose the same. Pursuant to Article 1339 of the New
Civil Code, silence or concealment, by itself, does not constitute fraud,
unless there is a special duty to disclose certain facts.
The question as to what is to be included therein or what is
meant by the same is for the parties and not for the court to determine.
A court, even the Supreme Court, has no right to make new contracts
for the parties or ignore those already made by them, simply to avoid
seeming hardships.
In view of all the foregoing, the Court is convinced that the appellate
court committed no reversible error in its challenged
Decision.1âwphi1.nêt
