ROBERTO D. TUAZON vs.LOURDES Q. DEL ROSARIO-SUAREZ, CATALINA R.

SUAREZ-DE LEON, WILFREDO DE LEON, MIGUEL LUIS S. DE LEON, ROMMEL

LEE S. DE LEON, and GUILLERMA L. SANDICO-SILVA, as attorney-in-fact of the
defendants, except Lourdes Q. Del Rosario-Suarez
G.R No. 168325 December 8, 2010

Facts:

Respondent Lourdes Q. Del Rosario-Suarez (Lourdes) was the owner of a parcel of land,
containing more or less an area of 1,211 square meters located along Tandang Sora Street,
Barangay Old Balara, Quezon City and previously covered by Transfer Certificate of Title (TCT)
No. RT-56118 issued by the Registry of Deeds of Quezon City.

On June 24, 1994, petitioner Roberto D. Tuazon (Roberto) and Lourdes executed a Contract of
Lease over the abovementioned parcel of land for a period of three years. The lease commenced
in March 1994 and ended in February 1997. During the effectivity of the lease, Lourdes sent a
letter dated January 2, 1995 to Roberto where she offered to sell to the latter subject parcel of
land. She pegged the price at P37,541,000.00 and gave him two years from January 2, 1995 to
decide on the said offer.

On June 19, 1997, or more than four months after the expiration of the Contract of Lease,
Lourdes sold subject parcel of land to her only child, Catalina Suarez-De Leon, her son-in-law
Wilfredo De Leon, and her two grandsons, Miguel Luis S. De Leon and Rommel S. De Leon
(the De Leons), for a total consideration of onlyP2,750,000.00 as evidenced by a Deed of
Absolute Sale executed by the parties. TCT No. 177986 was then issued by the Registry of
Deeds of Quezon City in the name of the De Leons.

The new owners through their attorney-in-fact, Guillerma S. Silva, notified Roberto to vacate the
premises. Roberto refused hence, the De Leons filed a complaint for Unlawful Detainer before
the Metropolitan Trial Court (MeTC) of Quezon City against him. On August 30, 2000, the
MeTC rendered a Decision ordering Roberto to vacate the property for non-payment of rentals
and expiration of the contract.

Issue:

Whether or not Lourdes violated Roberto’s right to buy the subject property under the principle
of right of first refusal by not giving him notice and the opportunity to buy the property under the
same terms and conditions.
Held:
No. This case involves an option contract and not a contract of a right of first refusal.

From the foregoing, it is thus clear that an option contract is entirely different and distinct from a
right of first refusal in that in the former, the option granted to the offeree is for a fixed
period and at a determined price. Lacking these two essential requisites, what is involved is
only a right of first refusal.

In this case, the controversy is whether the letter of Lourdes to Roberto dated January 2, 1995
involved an option contract or a contract of a right of first refusal.

It is clear that the letter embodies an option contract as it grants Roberto a fixed period of only
two years to buy the subject property at a price certain of P37,541,000.00. It being an option
contract, the rules applicable are found in Articles 1324 and 1479 of the Civil Code which
provide:

Art. 1324. When the offerer has allowed the offeree a certain period to accept, the offer may be
withdrawn at any time before acceptance by communicating such withdrawal, except when the
option is founded upon a consideration, as something paid or promised.

Art. 1479. A promise to buy and sell a determinate thing for a price certain is reciprocally
demandable.

An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding
upon the promissor if the promise is supported by a consideration distinct from the price.

In a situation where the lessor makes an offer to sell to the lessee a certain property at a fixed
price within a certain period, and the lessee fails to accept the offer or to purchase on time, then
the lessee loses his right to buy the property and the owner can validly offer it to another.