JOSE RAMON CARCELLER,
petitioner, vs. COURT OF APPEALS and STATE INVESTMENT HOUSES, INC., respondents
G.R. No. 124791 | February 10, 1999
FACTS:
On January 10, 1985, petitioner and State Investment Houses,
Inc. entered into a lease contract with option to purchase over 2 parcels of
land located at Bulacao, Cebu City for a period of 18 months.
Approximately 3 weeks before the expiration of the lease
contract, SIHI notified petitioner of the impending termination of the lease agreement,
and of the short period of time left within which he could still validly exercise
the option. It likewise requested petitioner to advise them of his decision on
the option, on or before January 20, 1986.
Petitioner requested for a six- month extension of the lease
contract, alleging that he needs ample time to raise sufficient funds in order to
exercise the option. SIHI disapproved petitioner’s request however it still
offered to lease the same property to petitioner for a period of 1 year. SIHI
further informed the petitioner of its decisions to offer for sale said leased
property to the general public.
On February 18, 1986, petitioner notified SIHI of his decision
to exercise the option to purchase the property and at the same time he made arrangements
for the payment of the downpayment thereon in the amount of P360,000.00 pesos. SIHI
reiterated its previous stand on the petitioner’s offer, stressing that the
period within which the option should have been exercised had already lapsed. SIHI
asked petitioner to vacate the property within ten (10) days from notice, and
to pay rental and penalty due.
On February 25, 1986, petitioner filed a complaint for
specific performance and damages against SIHI to compel the latter to honor its
commitment and execute the corresponding deed of sale.
ISSUE:
Should petitioner be allowed to exercise the option to
purchase the leased property, despite the alleged delay in giving the required notice
to private respondent?
RULING:
An option is a preparatory contract in which one party grants
to the other, for a fixed period and under specified conditions, the power to
decide, whether or not to enter into a principal contract. It binds the party
who has given the option, not to enter into the principal contract with any other
person during the period designated, and, within that period, to enter into such
contract with the one to whom the option was granted, if the latter should
decide to use the option. It is a separate agreement distinct from the contract
which the parties may enter into upon the consummation of the option.
The lease contract provided that to exercise the option, petitioner
had to send a letter to SIHI, manifesting his intent to exercise said option
within the lease period ending January 30, 1986. However, what petitioner did
was to request for a six-month extension of the lease contract, for the alleged
purpose of raising funds intended to purchase the property subject of the
option. It was only after the request was denied that petitioner notified SIHI
of his desire to exercise the option formally. In private respondent’s view, there was
already a delay of 18 days, fatal to petitioner’s cause. But respondent court
found the delay neither “substantial” nor “fundamental” and did not amount to a
breach that would defeat the intention of the parties when they executed the lease
contract with option to purchase.
Moreover, judging from the subsequent acts of the parties,
it is undeniable that SIHI really intended to dispose of said leased property,
which petitioner indubitably intended to buy.
SIHI’s agreement to enter first into a lease contract with option
to purchase with herein petitioner, is a clear proof of its intent to promptly
dispose said property although the full financial returns may materialize only
in a year’s time. Furthermore, its letter dated January 7, 1986, reminding the
petitioner of the short period of time left within which to consummate their
agreement, clearly showed its desire to sell that property. Also, SIHI’s letter
dated February 14, 1986 supported the conclusion that it was bent on disposing
said property. For this letter made mention of the fact that, “said property is
now for sale to the general public.”
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