Cebu Bionic v. DBP (G.R. No. 153366; November 17, 2010)
FACTS: Spouses Robles entered into a mortgage contract with the DBP to create the State Theatre Building in Talisay, Cebu. Upon completion, Rudy Robles executed a contract of lease in favour of Cebu Bionic Builders Supply. However, the spouses defaulted on their obligation to pay and DBP extrajudicially foreclosed the mortgage. DBP sent a letter to Cebu Bionic that if they were interested in leasing the facilities, they would have to pay DBP. However, nothing came from these correspondences.
DBP then invited parties to bid on the property. Initially, Cebu Bionic submitted their interest in bidding, but the price that they gave was insufficient. DBP then awarded the auction to Respondents To Chip, Yap and Balila. In response to several demand letters by the Respondents, Cebu Bionic filed a petition for preliminary injunction, cancellation of deed of sale and specific performance against DBP. Petitioners then related that, without their knowledge, DBP sold the subject properties to respondents To Chip, Yap andBalila.The sale was claimed to be simulated and fictitious, as DBP still received rentals from petitioners until March 1991.By acquiring the subject properties, petitioners contended that DBP was deemed to have assumed the contract of lease executed between them and Rudy Robles. They alleged that the original leases clause of the Right of First Option to Buy should be upheld.
The trial court granted their complaint. The Court of Appeals similarly upheld the decision of the trial court. Cebu Bionic filed a motion for entry of judgment, but Respondents filed a motion for reconsideration on the ground that they relied on the friend of their lawyer to personally file the MR, but apparently did not. The court granted their MR, and reversed their judgment before. Thus, the petitioners file the case before the Supreme Court.
ISSUES:
Was a contract of lease between petitioners and DBP?
If in the affirmative, did this contract contain a right of first refusal in favor of petitioners?
Are respondents To Chip, Yap and Balila likewise bound by such right of first refusal?
HELD: Under Article 1305 of the Civil Code, "[a] contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service."A contract undergoes three distinct stages preparation or negotiation, its perfection, and finally, its consummation.Negotiation begins from the time the prospective contracting parties manifest their interest in the contract and ends at the moment of agreement of the parties.The perfection or birth of the contract takes place when the parties agree upon the essential elements of the contract.The last stage is the consummation of the contract wherein the parties fulfill or perform the terms agreed upon in the contract, culminating in the extinguishment thereof
In the case at bar, there was no concurrence of offer and acceptancevis-visthe terms of the proposed lease agreement.In fact, after the reply of petitioners counsel dated July 7, 1987, there was no indication that the parties undertook any other action to pursue the execution of the intended lease contract.Petitioners even admitted that they merely waited for DBP to present the contract to them, despite being instructed to come to the bank for the execution of the same.
DBP cannot, therefore, be accused of violating the rights of petitioners when it offered the subject properties for sale, and eventually sold the same to respondents To Chip, Yap and Balila, without first notifying petitioners.Neither were the said respondents bound by any right of first refusal in favor of petitioners.Consequently, the sale of the subject properties to respondents was valid.Petitioners claim for rescission was properly dismissed.
DENIED
