G.R. No. L-6761, February 16, 1912
LIM TUICO, plaintiff-appellee, vs. CU-UNJIENG, defendant-appellant.

FACTS

Lim Tuico (appellee) owned an undivided 2/8 interest in two lots on Calle Rosario, Manila, while Barretto & Co. owned the remaining 6/8. On August 13, 1900, Barretto & Co. leased its 6/8 interest to Lim Tuico for 20 years. The lease contained a clause granting Lim Tuico a right of first refusal: if Barretto & Co. sold the lots, the purchaser must respect the lease, and Lim Tuico would have the preference to purchase at the same price and conditions. On December 21, 1909, Barretto & Co. sold its interest to Cu-Unjieng (appellant) for a stated price of P60,000 in the deed, which mentioned Lim Tuico’s right. However, evidence showed the actual sale price was P40,000, as indicated by a cablegram from Barretto to his brother, a broker’s commission receipt, and a subsequent deed of donation for P20,000 to Cu-Unjieng, ostensibly due to a title defect. Barretto notified Lim Tuico of the sale on January 3, 1910. When Lim Tuico inquired, Cu-Unjieng represented the price as P60,000. On January 11, 1910, Lim Tuico exercised his right and bought the property from Cu-Unjieng for P60,000. Upon discovering the true price was P40,000, Lim Tuico sued to recover P20,000.

ISSUE

Whether the actual purchase price paid by Cu-Unjieng to Barretto & Co. was P60,000 or P40,000, thereby determining if Lim Tuico overpaid by P20,000 when exercising his right of first refusal.

RULING

The Supreme Court affirmed the trial court’s judgment in favor of Lim Tuico. The Court found that the actual purchase price was P40,000, not P60,000. The evidence, including the cablegram, broker’s receipt, and the deed of donation, established that the P60,000 figure was a fabrication to conceal the true price. Cu-Unjieng’s claim that the reduction was due to a title defect was unsupported, as Barretto had no immediate plans to leave the country and the warranty in the deed remained unchanged. Therefore, Lim Tuico was entitled to purchase at the true price of P40,000, and Cu-Unjieng was liable to return the P20,000 overpayment, with interest at 6% per annum from April 4, 1910. The Court clarified that the judgment would bear legal interest until paid, consistent with applicable law.