G.R. No. 94214 December 1, 1992
CONSUELO REYES, MARIO FRANCISCO and MARILA BERCEÑO, petitioners, vs. COURT OF APPEALS, JOSE ORTAÑEZ and ANGEL ASEOCHE, respondents.

FACTS

The subject of the controversy is a 4-unit apartment building in Sta. Mesa, Manila, originally owned by respondent Jose Ortañez and separately leased to petitioners Consuelo Reyes, Mario Francisco, and the late Felix Berceño (represented by daughter Marila), and respondent Angel Aseoche. On October 2, 1980, Ortañez offered in writing to sell the building to all the lessees for P150,000.00, giving them 30 days to reply. Reyes and Aseoche separately wrote to Ortañez indicating interest in purchasing their respective units; Francisco and Berceño did not respond. Reyes did not pursue her intention. Aseoche negotiated with Ortañez, who agreed to reduce the price to P120,000.00 for the entire building. A Deed of Absolute Sale was executed on January 29, 1981, with Aseoche paying P80,000.00 down and the balance in May 1981. The property was registered in Aseoche’s name. After notifying the petitioners of his ownership and later asking them to vacate, the petitioners filed a complaint for Annulment of Title/Sale with Damages (later amended to include Specific Performance) against Aseoche and Ortañez. The Regional Trial Court ruled in favor of the petitioners, ordering Aseoche to convey their respective units upon payment of their proportionate share of P150,000.00. The Court of Appeals reversed this decision and dismissed the complaint.

ISSUE

Whether there was a perfected agreement to sell between the petitioners and Ortañez that was violated by the sale to Aseoche, and whether the sale between Ortañez and Aseoche was tainted with fraud and bad faith.

RULING

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. There was no perfected agreement to sell between the petitioners and Ortañez. The letter from Ortañez was an offer, and the responses from Reyes (indicating only an “interest to purchase”) and the inaction of Francisco and Berceño did not constitute acceptance. A definite offer requires an absolute and unqualified acceptance to perfect a contract, which was absent here. The claim that Aseoche was authorized to represent all petitioners was unsupported by evidence and contradicted by Reyes’s separate letter. The sale between Ortañez and Aseoche was not vitiated by fraud as defined under Article 1338 of the Civil Code, as the alleged bad faith (e.g., price reduction, payment terms) did not constitute the insidious machinations intended to induce consent. Furthermore, strangers to a contract, like the petitioners who acquired no rights in the property, generally cannot sue to annul it unless they show direct prejudice, which was not established. The petitioners only challenged the sale after being asked to vacate, having shown no earlier definitive commitment to purchase.