G.R. No. L-24151-52 May 31, 1971
MORINE BANAY ROJAS, et al. vs. THE HON. COURT OF APPEALS and FELIX P. AMANTE

FACTS

On July 8, 1952, petitioners Morine Banay Rojas and Carina Banay Toledano separately leased their sugar lands in Negros Occidental to respondent Felix P. Amante for ten years, from the 1952-53 to the 1961-62 crop years. Both contracts contained an identical provision: “with option for another FIVE (5) years on such terms and conditions as may be agreed upon between the same parties.” In 1960 and 1961, the petitioners notified Amante of their intention not to extend the lease, planning to cultivate the lands themselves. Amante, however, informed them of his intent to exercise the option. After a misunderstanding, Amante filed an action in the Court of First Instance of Negros Occidental when petitioners took possession of portions of the land after the 1961-62 harvest.
The trial court ruled in favor of the petitioners, declaring the option clause invalid for failure to stipulate the essential terms and conditions for the extended period. On appeal, the Court of Appeals reversed this decision. It held the provision for a five-year extension was obligatory, interpreting that the lessee had an option to renew, with the terms to be agreed upon by the parties or, failing agreement, to be set by the court on “reasonable terms,” thereby giving the stipulation full force.

ISSUE

Whether the Supreme Court could still resolve the merits of the case concerning the validity and enforceability of the contractual option for a five-year lease extension.

RULING

The Supreme Court dismissed the case as moot and academic. The core legal controversy centered on the interpretation of the option clause and whether it compelled the petitioners to grant a five-year extension to Amante. However, the Court noted that the five-year additional period provided in the contracts had already expired in 1967. Furthermore, the petitioners had admitted in their motion for reconsideration before the Court of Appeals that Amante had remained in actual possession and enjoyment of the leased premises for the first two crop years (1962-63 and 1963-64) of that contested five-year period due to the pendency of the appeal.
Given the expiration of the very period in dispute and the absence of any indication in the record of a contrary situation, any judicial determination on the juridical nature of the stipulation—whether it imposed a compulsory obligation to extend the lease—was rendered purposeless. Similarly, the ancillary issue regarding the applicable terms and conditions for the expired extension period was moot, as the parties had, by all indications, abided by the terms set by the Court of Appeals, which required adherence to the original contract’s conditions. The petitioners manifested their agreement to dismiss the case on this ground, and the respondent raised no objection. Consequently, the Court refrained from ruling on the substantive legal issues and dismissed the petition.