Mañas v. Nicolasora
REITERATIONFacts
The Antecedents: Spouses Allan and Lena Isabelle Mañas (Mañas Spouses) entered into a Lease Contract with Rosalina Roca Nicolasora over a property owned by Rosalina's deceased husband. The contract, effective April 18, 2005, had a duration of one year and included a right of first refusal for the lessee should the lessor desire to sell the property. The contract stipulated that the lessor shall notify the lessee of the intent to sell, giving the lessee 30 days to accept or counter-offer. The lease contract lapsed in 2006 without express renewal, but the Mañas Spouses continued occupying the premises and paying rentals. On February 14, 2008, the property was sold to Ma. Therese Roselle Uy-Cua (Roselle) with the conformity of Rosalina and her children, Janet and Anthony. The Mañas Spouses claimed they were not informed of the sale nor offered the property, learning of it only through a letter from RMC Trading requesting them to vacate within 30 days. Procedural History: The Mañas Spouses filed a Complaint for Rescission of Contract of Sale, Cancellation of Certificates of Title, and Enforcement of Right of First Refusal. Respondent Roselle filed a Motion to Dismiss, arguing lack of cause of action and failure to comply with barangay conciliation. Roselle contended that the implied renewal of the lease did not revive the right of first refusal as it was not germane to possession. Rosalina, Janet, and Anthony also argued that the right of first refusal was granted only during the original term. The Regional Trial Court (RTC) granted Roselle's Motion to Dismiss, finding no cause of action and noting the failure to undergo barangay conciliation. The RTC also stated that the claim of simulation of the Deed of Absolute Sale should be an action for annulment, not rescission. The Court of Appeals (CA) affirmed the RTC's dismissal, agreeing that the Complaint stated no cause of action and that the implied renewal did not include the right of first refusal. The CA also upheld the dismissal for failure to comply with the condition precedent of barangay conciliation. The Mañas Spouses filed a Petition for Review on Certiorari before the Supreme Court. The Petition: The Mañas Spouses argued that the CA erred in affirming the dismissal based on defenses and not the facts alleged in the Complaint. They contended that the lease was expressly renewed, including the right of first refusal, and that the sale was void due to Roselle's alleged minority at the time of sale. They also argued against the dismissal for failure to comply with barangay conciliation.
Issue(s)
Whether or not the Court of Appeals erred in affirming the Complaint's dismissal on the ground that it stated no cause of action, considering whether the lease was impliedly renewed and if such renewal included the right of first refusal. Whether or not the Court of Appeals erred in not ruling that the Deed of Absolute Sale must be rescinded due to the incapacity of the vendee, respondent Ma. Therese Roselle Uy-Cua, at the time of the sale. Whether or not the Court of Appeals erred in affirming the Complaint's dismissal for failure to comply with a condition precedent.
Ruling
The Petition is DENIED. The April 17, 2013 Decision of the Court of Appeals in CA G.R. CV No. 03402 is AFFIRMED.
Ratio Decidendi
On the issue of failure to state a cause of action due to implied renewal and right of first refusal: The Court held that the lease contract was impliedly renewed based on Article 1670 of the Civil Code, as the lessees continued to occupy the premises and pay rentals after the expiration of the original term without objection. However, applying the ruling in Dizon v. Court of Appeals, the Court clarified that an implied renewal only revives terms germane to the lessee's continued enjoyment and possession of the property. The right of first refusal, being a special agreement alien to the right of occupancy, is not automatically included in an impliedly renewed lease. Therefore, the petitioners' right of first refusal expired with the termination of the original contract, and they had no basis to claim the property should have been offered to them before its sale to respondent Roselle. The CA did not err in affirming the trial court's ruling that the petitioners failed to state a cause of action. On the issue of the vendee's alleged incapacity and the wrong action filed: The Court found that even if the allegation of Roselle's minority at the time of sale were true, the petitioners were not the proper parties to raise this issue, as per Article 1397 of the Civil Code, which states that persons who are capable cannot allege the incapacity of those with whom they contracted. Furthermore, the petitioners prayed for rescission of the contract, but the ground they raised (incapacity) is a ground for annulment of contract under Article 1390 of the Civil Code. Since the petitioners were not parties to the Deed of Absolute Sale nor obliged principally or subsidiarily, they could not institute an action for annulment. Thus, the trial court's dismissal of their complaint was proper on this ground as well. On the issue of failure to comply with a condition precedent: The Court affirmed the CA's ruling that the petitioners failed to comply with the mandatory requirement of barangay conciliation as a condition precedent to filing a complaint in court, pursuant to Section 412 of Republic Act No. 7160 (Local Government Code). None of the exceptions provided in the law were present in this case. Therefore, even if the petitioners had stated a cause of action, their Complaint would still be dismissed for this procedural defect.
Main Doctrine
An implied renewal of a lease contract, under Article 1670 of the Civil Code, only revives terms germane to the lessee's continued enjoyment and possession of the property. Stipulations such as a right of first refusal, being alien to possession, are not automatically included in an impliedly renewed lease and expire with the original contract term.