G.R. No. L-48436. January 30, 1986.
JOSE MATIAS, CLARO APOSTOL, TEOFILO NAVARRA, JEREMIAS DEL ROSARIO, FELICIDAD SANTOS, MAXIMA SY JUECO, and ROMANA AQUINO, petitioners, vs. HONORABLE COURT OF APPEALS, CARLOS GOCO, LEONILA SIOCHI, and A.M. RAYMUNDO & COMPANY, respondents.

FACTS

Petitioners were bonafide tenants of Hacienda de Tulay in Malabon, Rizal, originally owned by the Roman Catholic Archbishop of Manila. In 1949, they decided to purchase their respective lots and designated respondent Carlos Goco as their representative to negotiate the sale. Between 1950 and 1953, Goco collected deposits from them. On January 19, 1954, the Archbishop sold the entire hacienda to Goco’s wife, respondent Leonila Siochi, for P130,000. The deed of sale contained a condition for the vendee to recognize and respect the rights of the listed bonafide tenants. Petitioners alleged that Goco betrayed their trust by organizing a partnership, A.M. Raymundo & Company, and convincing his wife to sell the property to it for a nominal sum of one peso (P1.00). The partnership then offered to sell the lots to the tenants at prices (P10.00 to P40.00 per sq.m.) far higher than the earlier negotiated range of P4.50 to P8.50.
Respondents countered that Goco declined the initial representation due to his work as Assistant Fiscal, and a committee was formed. Negotiations were later handled in Siochi’s name, with the understanding she would acquire the property and later assign it to the partnership, which would provide the funds. The partnership acquired the hacienda with the obligation to respect the tenants’ rights as listed, but at a total estimated cost of P214,485.00. The trial court dismissed petitioners’ complaint for specific performance and ordered them to vacate. The Court of Appeals affirmed with modifications.

ISSUE

Whether the respondents, as successors-in-interest to the original vendor, are legally obligated to sell the subject lots to the petitioner-tenants at the specific prices they demand.

RULING

No. The Supreme Court affirmed the decision of the Court of Appeals, holding that the petitioners have no enforceable right to compel the sale at their insisted-upon price. The condition in the deed of sale between the Archbishop and Siochi merely obligated the new owner to recognize and respect the tenants’ leasehold rights, provided they paid their rentals. This condition did not create an obligation for the owner to sell the property, much less to sell it at a price dictated by the tenants. The right of a tenant to purchase the leased property is not automatic; it must be expressly stipulated or granted by law. No such stipulation existed here.
The Court emphasized that the fixing of the price is a fundamental element of a contract of sale, governed by the principle of mutual consent under Article 1319 of the Civil Code. The owner, as the offeror, has the right to set the terms, including the price, pursuant to Article 1321. Petitioners’ claim that the partnership’s prices were exorbitant was unsupported by evidence to rebut the respondents’ explanation that pricing was based on the lots’ proximity to main highways. By refusing the partnership’s offer and insisting on their own terms, petitioners lost any preferential opportunity to purchase. Their right was merely to continue leasing, conditioned on rental payment, not to compel a sale at a specific price.