Villegas v. Reyes
REITERATIONFacts
The Antecedents: This case concerns a dispute over a parcel of land located at Evangelista Street, Quiapo, Manila. The property was inherited by the respondent-heirs from their father, Dr. Lorenzo C. Reyes. The petitioners, Agripino Villegas and others, were lessees of this property since 1959 and owned the building and improvements constructed thereon. The heirs, through an Administrative Committee, decided to sell the property and informed the lessees of their right of pre-emption. Procedural History: The case involves two consolidated petitions before the Supreme Court. G.R. No. 111495 stems from an action filed by the petitioner-lessees for annulment of a deed of sale and specific performance, which was dismissed by the Regional Trial Court (RTC) and affirmed by the Court of Appeals. G.R. No. 122404 originates from a complaint filed by Spouses Sy for specific performance against the heirs of Atanacio Villegas, seeking to enforce the redemption of a portion of the property. The RTC ordered the heirs to accept the redemption price, and this decision was affirmed by the Court of Appeals. The Petition: In G.R. No. 111495, the petitioners seek review of the Court of Appeals' decision affirming the validity of the sale of 75% of the property to Spouses Sy, arguing that their right of first refusal was violated. In G.R. No. 122404, the petitioners (heirs of Atanacio Villegas) seek to set aside the Court of Appeals' decision upholding Spouses Sy's right to redeem the remaining 25% of the property, contending that the redemption was not validly exercised within the legal period and without proper tender of the redemption price.
Issue(s)
Whether the contract of sale between respondent-heirs and Lita Sy violated the right of first refusal of petitioner-lessees. Whether Lita Sy, as co-owner of the property, validly and seasonably exercised her right to redeem the 25% undivided interest in the property, which undivided interest the other co-owners had sold to Atanacio M. Villegas and Agripino M. Villegas.
Ruling
The Court denied the petition in G.R. No. 111495, affirming the Court of Appeals' decision. The Court granted the petition in G.R. No. 122404, setting aside the Court of Appeals' decision and ruling in favor of the Villegas brothers regarding the 25% undivided interest, and denying the demand for legal redemption by Spouses Lita Sy and Sy Bon Su.
Ratio Decidendi
On the Right of First Refusal: The Court held that there was no perfected contract of sale between the petitioner-lessees and the respondent-heirs because there was no meeting of the minds on the price and terms. The offer of P5,000,000 in the letter dated August 3, 1988, had lapsed when the petitioner-lessees failed to accept it within the stipulated period and instead requested a conference. During the conference, the parties failed to agree on the price, with the heirs indicating a higher offer of P5.1 Million net. The subsequent letter from the petitioner-lessees on October 18, 1988, was considered another counter-offer, which was superseded by the respondent-heirs' offer on November 3, 1988, to sell only their 75% undivided interest at P3,825,000 net. When the petitioner-lessees failed to respond to this latest offer, it constituted a rejection, allowing the respondent-heirs to sell to other buyers without violating the right of first refusal. The Court found that the price paid by Lita Sy was not lower than what was offered to the petitioner-lessees, considering all expenses. On the Right of Legal Redemption: The Court ruled that Lita Sy failed to validly exercise her right of redemption over the 25% undivided interest sold to the Villegas brothers. While Lita Sy invoked her right to redeem in her Answer filed on March 16, 1989, which was within 30 days from her receipt of the Deed of Sale on February 17, 1989, she failed to consign the redemption price in court. The Court reiterated the rule that a formal offer to redeem must be accompanied by a bona fide tender of the redemption price, and the filing of a judicial action alone is not sufficient if not accompanied by the consignation of the redemption price within the redemption period. The evidence did not show any tender or consignation of the redemption price by Lita Sy, rendering her exercise of the right of redemption invalid.
Main Doctrine
A formal offer to redeem, accompanied by a bona fide tender of the redemption price, is not essential where the right to redeem is exercised through the filing of a judicial action simultaneously with the deposit of the redemption price within the period of redemption. However, the failure to consign the redemption price, even when invoking the right to redeem in an answer, renders the exercise of the right of redemption invalid.