CEBU BIONIC BUILDERSSUPPLY, INC. and LYDIA SIA,Petitioners, - versus - DEVELOPMENT BANK OF THEPHILIPPINES, JOSE TO CHIP,PATRICIO YAP and ROGERBALILA,Respondents.G.R. No. 15!"" Present: CORONA, C.J.,Chairperson,VELASCO, JR.,LEONARDO-DE CASTRO,PERALTA,* andPEREZ, JJ. Pro!"#ated: No$e%er &', ()&)*- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -* D E C I S I O N LEONARDO DE CASTRO, J.# This Petition +or Re$ie,on Certiorari-&. !nder R!"e /0o+ the R!"es o+ Co!rt assai"s theReso"!tion-(. dated 1e%r!ar2 0, ())( and the Aended De3ision-4. dated J!"2 0, ())( o+ the Co!rto+ Appea"s in CA-5.R. CV No. 0'(&6. 7n the Reso"!tion dated 1e%r!ar2 0, ())(, the Co!rt o+Appea"s aditted the 8otion +or Re3onsideration-/. o+ herein respondents De$e"opent 9an: o+the Phi"ippines ;D9P?&, the spo!ses R!d2R. Ro%"es, Jr. andE"i@a%ethR. Ro%"es enteredintoa $o%&'a'( )on&%a)&-'. ,ith D9P in order to se3!re a "oan +ro the said %an: in the ao!nto+ P0)),))).)). Thepropertiesort#a#ed,ereapar3e"o+"andsit!atedin Ta%!no3,Ta"isa2,Ce%!, ,hi3h,as then3o$ered%2Trans+er Certi+i3ateo+ Tit"e;TCT< No. T-/''?4o+ theRe#ister o+ Deedso+Ce%!,to#ether ,itha""the e*istin# ipro$eents, andthe 3oer3ia"%!i"din# to %e 3onstr!3ted thereon-?. ;s!%Ae3t properties?&, R!d2Ro%"ese*e3!teda )on&%a)&o*+(a,( in+a$oro+petitionerCe%!9ioni3 9!i"ders S!pp"2, 7n3. ;Ce%! 9ioni3.S-o7+d&-(LESSORd().d(&o,(++&-(5%o5(%&3d7%.n'&-(&(%$o*&-.,+(a,()on&%a)& o% .$$(d.a&(+3 a*&(% &-( (:5.%a&.on o* &-( +(a,(, &-( LESSEE ,-a++ -a/( &-( *.%,&o5&.on &o 073 and ,-a++ $a&)- o**(%, *%o$ o7&,.d( 5a%&.(,.->. ;Ephases o!rs.< The a%o$e 3ontra3t ,as not re#istered %2 the parties thereto ,ith the Re#istr2 o+ Deeds o+ Ce%!. S!%seH!ent"2,thespo!sesRo%"es+ai"edtosett"etheir"oano%"i#ation,ithD9P. The"atter ,as, th!s, proptedtoe++e3t e*traA!di3ia" +ore3"os!reonthes!%Ae3t properties.-&). On1e%r!ar26, &>?', D9P,as the "one %idder inthe +ore3"os!re sa"e andthere%2a3H!iredo,nership o+ the ort#a#ed s!%Ae3t properties.-&&. On O3to%er &4, &>??, a +ina" Deed o+Sa"e-&(. ,as iss!ed in +a$or o+ D9P. 8ean,hi"e, on J!ne &?, &>?', D9P sent a "etter to 9oni+a3io Sia, the h!s%and o+ petitioner L2diaSia ,ho ,as then President o+ Ce%! 9ioni3, noti+2in# the "atter o+ D9Ps a3H!isition o+ the StateTheatre 9!i"din#. Said "etter reads: J!ne &?, &>?' 8r. 9oni+a3io Sia9ioni3 9!i"ders 7n3.State Theatre 9"d#.Ta%!no:, Ta"isa2, Ce%! Sir: Thisre+erstothe3oer3ia" spa3e2o!areo33!p2in#inthea3H!iredpropert2o+the9an:,+orer"2 o,ned %2 R!d2 Ro%"es, Jr. P+(a,( 0( .n*o%$(d &-a& ,a.d 5%o5(%&3 -a, 0((n a);7.%(d &-%o7'- *o%()+o,7%( on F(0%7a%3 ",112 onths renta"< sha""%e se3!red %2 either s!ret2 %ond, 3ash %ond or assi#ned tie depositF 4. That in 3ase there is a %etter o++er or i+ the propert2 ,i"" %e s!%Ae3t o+ a p!r3hase o++er,,ithin the ter, the "essor is #i$en an option o+ +irst re+!sa", other,ise he has to$a3ate the preises ,ithin thirt2 ;4)< da2s +ro date o+ noti3e. >( )on,.d(%, &($5o%a%.+3, &-( )7%%(n& $on&-+3 %(n&a+ 0a,(d on &-( ,.:?$on&- %()(.5&,, 6-.)-6( %(;7.%( 3o7 &o ,70$.&, 7n&.+ ,7)- &.$( 6-(n 6( 6.++ *.: &-( a$o7n& a))o%d.n'+3. I* &-( )on&%a)& o* +(a,( ., no& (:()7&(d6.&-.n&-.%&38!@9 da3, *%o$da&( -(%(o*, .& .,)on,&%7(d &-a& 3o7 a%( no& .n&(%(,&(d .n +(a,.n' &-( 5%($.,(, and 6.++ /a)a&( 6.&-.n &-( ,a.d5(%.od. P"ease %e #!ided a33ordin#"2. Tr!"2 2o!rs, ;S5D?>,-&?. andNo$e%er&0,&>>).-&>. Asnointerested%idder3ae+or,ard, D9Pp!%"i3i@ed an 7n$itation on Ne#otiated Sa"eGO++er, the re"e$ant ters and 3onditions o+ ,hi3hstated: 7NV7TAT7ON ON NE5OT7ATED SALEGO11ER TheDEVELOP8ENT9ANCO1TEEPE7L7PP7NES, Ce%!9ran3h, ,i"" re3ei$eSEALEDNE5OT7ATED O11ERSGPBRCEASE PROPOSALS tendered at its 9ran3h O++i3e, D9P9!i"din#, Osea 9o!"e$ard, Ce%! Cit2 +or the sa"e o+ its a3H!ired assets entionedherein!nder 6.&-.n &-( 15?Da3?A))(5&an)(?P(%.od ,&a%&.n' *%o$ NOVEMBER 11, 111@ 75 &o1A#@@o)+o)=noono*DECEMBER!, 111@. Sea"edo++erss!%ittedsha"" %eopened%2theCoitteeonNe#otiated O++ers at e*a3t"2 (:))o3"o3: in the a+ternoono+the "astda2o+thea33eptan3e period in order to deterine the hi#hest andGor ost ad$anta#eo!s o++er. 7te No. Des3riptionGLo3ation Startin# Pri3e * * * * 77 Coer3ia" "and, Lot No. 46?&-C-4, ha$in#anareao+ 4>6sH. ., sit!atedinTa%!no:,Ta"isa2, Ce%!and3o$ered%2TCTNo. T-60&>> ;D9P-64-(0>), respondents ToChip,=apand9a"i"a presentedtheir"etter-o++er-(&. top!r3hase the s!%Ae3t properties on a 3ash %asis +or P&,?4?,&)).)). Said o++er ,as a33opanied%2 a do,npa2ent o+ &)I o+ the o++ered p!r3hase pri3e, ao!ntin# to P&?4,?&).)). On e$endate, D9Pa3:no,"ed#edthe re3eipt o+ anda33eptedtheir o++er. OnDe3e%er (?, &>>),respondents To Chip, =ap and 9a"i"a paid the %a"an3e o+ the p!r3hase pri3e and D9P iss!ed aDeed o+ Sa"e-((. o$er the s!%Ae3t properties in their +a$or. On Jan!ar2 &&, &>>&, the 3o!nse" o+ respondents To Chip, =ap and 9a"i"a sent a"etter-(4. addressedtotheproprietor o+ Ce%!9ioni3, in+orin#the"atter o+ thetrans+er o+o,nershipo+thes!%Ae3t properties. Ce%!9ioni3,asorderedto$a3atethepreises,ithinthirt2 ;4)< da2s +ro re3eipt o+ the "etter and dire3ted to pa2 the renta"s +ro Jan!ar2 &, &>>&!nti" the end o+ the said 4)-da2 period. The 3o!nse" o+ Ce%! 9ioni3 rep"ied-(/. that his 3"ient re3ei$ed the a%o$e "etter on Jan!ar2 &&,&>>&. Ee stated that he has instr!3ted Ce%! 9ioni3 to $eri+2 +irst the o,nership o+ the s!%Ae3tproperties sin3e it had the pre+erentia" ri#ht to p!r3hase the sae. Ee "i:e,ise reH!ested that he%e +!rnished a 3op2 o+ the deed o+ sa"e e*e3!ted %2 D9P in +a$or o+ respondents To Chip, =apand 9a"i"a. On1e%r!ar2&0, &>>&, respondent ToChip,rotea"etter-(0. tothe3o!nse" o+Ce%!9ioni3,insistin# that he and his 3o-respondents =ap and 9a"i"a !r#ent"2 needed the s!%Ae3t properties top!rs!etheir %!siness p"ans. Eea"soreiteratedtheir deand+or Ce%!9ioni3to$a3atethepreises. Short"2 therea+ter, on 1e%r!ar2 (', &>>&, the 3o!nse" o+ respondents To Chip, =ap and 9a"i"a sentits+ina" deand"etter-(6. toCe%!9ioni3, ,arnin#the"atter to$a3atethes!%Ae3t properties,ithin se$en ;'< da2s +ro re3eipt o+ the "etter, other,ise, a 3ase +or eAe3tent ,ith daa#es,i"" %e +i"ed a#ainst it.-('. Despite the +ore#oin# noti3e, Ce%! 9ioni3 sti"" paid-(?. to D9P, on 8ar3h ((, &>>&, the ao!nto+ P0,))).)) as onth"2 renta"s on the !nit o+ the State Theatre 9!i"din# it ,as o33!p2in# +orperiod o+ No$e%er &>>) to 8ar3h &>>&. On Apri" &), &>>&, petitioners +i"ed a#ainst respondents D9P, ToChip, =ap and 9a"i"aa )o$5+a.n&-(>. +or spe3i+i3 per+oran3e, 3an3e""ation o+ deed o+ sa"e ,ith daa#es, inA!n3tion,ith a pra2er +or the iss!an3e o+ a ,rit o+ pre"iinar2 inA!n3tion.-4). The 3op"aint ,as do3:etedas Ci$i" Case No. CE9-&)&)/ in the RTC. Petitioners a""e#ed, inter alia, that Ce%! 9ioni3 ,as the "essee and o33!pant o+ a3oer3ia" spa3e in the State Theatre 9!i"din# +ro O3to%er &>?& !p to the tie o+ the +i"in# o+the 3op"aint. D!rin# the "atter part o+ &>>), D9P ad$ertised +or sa"e the State Theatre 9!i"din#and the 3oer3ia" "ot on ,hi3h the sae ,as sit!ated. 7n the prior in$itation to %id, the %iddin#,as s3hed!"ed on No$e%er &0, &>>)F ,hi"e in the ne*t, !nder the &0-da2 a33eptan3e period, thes!%issiono+ proposa"s ,as to%e ade +roNo$e%er &>, &>>)!pto&(:))noono+De3e%er 4, &>>). Petitioners 3"aied that, at a%o!t &):)) a.. on De3e%er 4, &>>), the2 d!"2s!%ittedtoAtt2. Apo"inar Pana", Jr., Chie+ o+ theA3H!iredAssetso+ D9P,the+o""o,in#do3!ents, nae"2: 6.&L(&&(%?o**(% *o%$, o**(%.n' &o 57%)-a,( &-( 5%o5(%&3 ad/(%&.,(d, *o% &-( 5%.)(o* P1,2@,@@@, ,hi3h ,as hi#her than the startin# pri3e o+ P&,?4?,&)).)) on )a,- 0a,.,. * * *F 6.(Ne#otiated Sa"e R!"es and Pro3ed!res, d!"2 si#ned %2 p"ainti++, * * *F 6.48ana#ers 3he3:+or theao!nt o+ P&?/,)))representin#&)Io+ thedepositdated De3e%er 4, &>>) and iss!ed %2 A""ied 9an:in# Corp. in +a$or o+ the De$e"opent 9an: o+the Phi"ippines. * * *.-4&. ;Ephasis o!rs.< Petitioners asserted that the a%o$e do3!ents ,ere initia""2 a33epted %!t "aterret!rned. D9P a""e#ed"2 ad$ised petitioners that there ,as no !r#ent need +or the sae * * *,3onsiderin# that the propert2 ,i"" ne3essari"2 %e so"d to -Ce%! 9ioni3. +or the reasons that there,as no other interested part2 and that -Ce%! 9ioni3. ,as a pre+erred part2 %ein# the "essee andpresent o33!pant o+ the propert2 s!%Ae3t o+ the "ease-..-4(. Petitioners then re"ated that, ,itho!ttheir :no,"ed#e, D9P so"d the s!%Ae3t properties to respondents To Chip, =ap and 9a"i"a. Thesa"e ,as 3"aied to %e si!"ated and +i3titio!s, as D9P sti"" re3ei$ed renta"s +ro petitioners!nti" 8ar3h&>>&. 92a3H!irin#thes!%Ae3t properties, petitioners 3ontendedthat D9P,asdeeed to ha$e ass!ed the 3ontra3t o+ "ease e*e3!ted %et,een the and R!d2 Ro%"es. As s!3h,D9P ,as %o!nd %2 the pro$ision o+ the "ease 3ontra3t, ,hi3h stated that: >. Sho!"d the Lessor de3ide to se"" the propert2 d!rin# the ter o+ this "ease 3ontra3t oriediate"2 a+ter the e*piration o+ the "ease, the Lessee sha"" ha$e the +irst option to %!2 and sha""at3h o++ers +ro o!tside parties.-44. Petitioners so!#ht the res3ission o+ the 3ontra3t o+ sa"e %et,een D9P and respondents ToChip, =ap and 9a"i"a. Petitioners a"so pra2ed +or the iss!an3e o+ a ,rit o+ pre"iinar2 inA!n3tion,restrainin# respondents To Chip, =ap and 9a"i"a +ro re#isterin# the Deed o+ Sa"e in the "atters+a$or and +ro !nderta:in# the eAe3tent o+ petitioners +ro the s!%Ae3t properties. Li:e,ise,petitioners entreatedthat D9P%e orderedtoe*e3!te a deedo+ sa"e 3o$erin#the s!%Ae3tproperties in their nae and to pa2 daa#es and attorne2s +ees. 7nits ans,er,-4/. D9Pdeniedthee*isten3eo+ a3ontra3t o+ "ease%et,eenitse"+ andpetitioners. D9P 3o!ntered that the "etter-o++er o+ petitioners ,as a3t!a""2 not a33epted as theiro++er to p!r3hase ,as on a ter %asis, ,hi3h there+ore reH!ired a ()I deposit. The &)I deposita33opan2in#thepetitioners"etter-o++er,asde3"aredins!++i3ient. D9P statedthatthe"etter-o++er+or,asnot3op"ete"2+i""edo!tasthe Terand8odeo+Pa2ent +ie"ds,ere"e+t%"an:. D9P then in+ored petitioner L2dia Sia o+ the inadeH!a32 o+ her o++er. A+ter as3ertainin#that there ,as noother o++eror as o+ that tie, L2dia Sia a""e#ed"2s!oned%a3:herrepresentati$e,hodidnot"ea$ea3op2o+the"etter-o++erandtheatta3heddo3!ents. D9Paintained that petitioners do3!ents did not sho, that the sae ,ere re3ei$ed and appro$ed %2an2 appro$in# a!thorit2 o+ the %an:. The "etter-o++er atta3hed to the 3op"aint, ,hi3h indi3atedthat the ode o+ pa2ent ,as on a 3ash %asis, ,as a""e#ed"2 not the do3!ent sho,n to D9P. 7naddition, D9P ar#!ed that there ,as no ass!ption o+ the "ease 3ontra3t %et,een R!d2 Ro%"esand petitioners sin3e it a3H!ired the s!%Ae3t properties thro!#h the in$o"!ntar2 ode o+e*traA!di3ia" +ore3"os!re and its reH!est to petitioners to si#n a ne, "ease 3ontra3t ,as sip"2i#nored. D9P,there+ore, insistedthat petitioners o33!pan32o+ the!nit intheStateTheatre9!i"din#,asere"2!pon itsa3H!ies3en3e. Thepetitionerspa2ent o+renta"s on8ar3h ((,&>>&,as s!pposed"2adein%ad+aithas the2,ereadetoaerete""er ,hohadno:no,"ed#e o+ the sa"e o+ the s!%Ae3t properties to respondents To Chip, =ap and 9a"i"a. D9P,th!s, pra2ed+or the disissa" o+ the 3op"aint and, %2,a2o+ 3o!nter3"ai, as:ed thatpetitioners %e ordered to pa2 daa#es and attorne2s +ees. Respondents To Chip, =ap and 9a"i"a no "on#er +i"ed a separate ans,er, adoptin# insteadthe ans,er o+ D9P.-40. 7nanOrder-46. datedJ!"24&, &>>&, theRTC#rantedthepra2ero+petitioners+ortheiss!an3e o+ a ,rit o+ pre"iinar2 inA!n3tion.-4'. On Apri" (0, &>>', the RTC rendered A!d#ent in Ci$i" Case No. CE9-&)&)/, +indin#eritorio!s the 3op"aint o+ the petitioners. E*p"ained the tria" 3o!rt: 7tis a +a3t on re3ordthat-petitioners.3op"ied,ith thereH!ireentso+depositand ad$an3erenta" as 3onditions +or 3onstit!tion o+ "ease %et,een the parties. -Petitioners. in 3op"2in# ,iththe reH!ireents, iss!edatiedeposit in the ao!nt o+ P&&,4>0.6/ andreitted +aith+!""2 itsonth"2 renta"s !nti" Apri", &>>&, ,hi3h onth"2 renta" ,as no "on#er a33epted %2 theD9P.A+&-o7'- &-(%( 6a, no *o%$a+ 6%.&&(n )on&%a)& (:()7&(d 0(&6((n D%(,5ond(n&E DBP and&-( D5(&.&.on(%,E, .& ., /(%3 )+(a% &-a& DBP o5&(d &o )on&.n7( &-( o+d and 5%(/.o7, )on&%a)&.n)+7d.n' &-( &(%$, &-(%(on 03 a))(5&.n' &-( %(;7.%($(n&, )on&a.n(d .n 5a%a'%a5- A o* .&,+(&&(% da&(d J7n( 12, 112 thereo+ that the "essee sha"" ha$e the +irstoption to %!2 and sha"" at3h o++ers +ro o!tside parties. And 3(&, D%(,5ond(n&E DBP n(/(% 'a/(D5(&.&.on(%,E &-( *.%,& o5&.on &o 073 o% &o $a&)- o**(%, *%o$ o7&,.d( 5a%&.(,, $o%( ,5().*.)a++3D%(,5ond(n&,E To C-.5, Ba+.+a and Ya5. 7t is a"so a +a3t on re3ord that -respondent. D9P in its"etter dated J!ne &?, &>?' to -petitioners. ,rote in para#raph 4 thereo+, that in 3ase there is %ettero++er or i+ a propert2 ,i"" %e s!%Ae3t o+ p!r3hase o++er, ,ithin the ter, the "essee is #i$en theoptiono+ +irst re+!sa", other,ise, hehasto$a3atethepreises ,ithinthirt2;4)< da2s. Y(&,D%(,5ond(n&E DBP n(/(% .n*o%$(d D5(&.&.on(%,E &-a& &-(%( 6a, an .n&(%(,&(d 5a%&3 &o 073 &-(5%o5(%&3, $(an.n', D%(,5ond(n&, To C-.5, Ya5 and Ba+.+aE, &-7, d(5%./.n' D5(&.&.on(%,E o* &-(o55o%&7n.&3o* *.%,& %(*7,a+ 5%o$.,(d&o&-($.n.&, +(&&(%da&(dJ7n( 12, 112>&, -Ce%! 9ioni3.s!%itted its o++er, 3op"ete ,ith -the reH!ired do3!ents.. * * *. * * * * ThesereH!ireents, ho,e$er, ,ere!n3ereonio!s"2ret!rned%2-respondent. %an:,iththeass!ran3e that sin3e there ,as no other %idder o+ the said propert2, there ,as no !r#en32 +or thesae and that -Ce%! 9ioni3. a"so, in a"" e$ents, is entit"ed to +irst option %ein# the present "essee. Thede3"arationo+Att2. Pana" tothee++e3t that Ce%!9ioni3,antedto%!2thepropert2oninsta""ent ters, s!3h that the deposit o+ P&?/,))).)) ,as ins!++i3ient %ein# on"2 &)I o+ theo++er, 3o!"d not %e #i$en !3h 3reden3e as it is re+!ted %2 E*h. E ,hi3h is the ne#otiated o++er top!r3hase+or!nderthe&0-da2a33eptan3eperioda33op"ished%2-petitioners.,hi3hsho,s3"ear"2 the ,ritten ,ord Cash a+ter the printed ,ords Ter and 8ode o+ Pa2ent, E*hi%it J, the8ana#ers 3he3:iss!ed %2 A""ied 9an:in# Corporation dated De3e%er4, &>>)intheao!nto+ P&?/,))).)) representin# &)I o+ the o++er sho,in# the ode o+ pa2ent is +or 3ashF E*hi%it C,hi3his theapp"i3ation+or 8ana#ers3he3: inthe ao!nto+ P&?/,))).)) datedDe3e%er4,&>>)sho,in#the%ene+i3iar2as D9P. I* .& ., &%7(&-a& &-(o**(%o* D5(&.&.on(%,E 6a, *o%.n,&a++$(n&5a3$(n&,, &-(n.n&-(o%d.na%3)o7%,(o*-7$an0(-a/.o%,.&6o7+dno&-a/(6a,&(d(**o%& .n,()7%.n'a Mana'(%, )-()=.n&-( a$o7n& o* P12,@@@.@@ 6-.)-6a,.n,7**.).(n& *o%A@Bd(5o,.& a, %(;7.%(d*o%.n,&a++$(n& 5a3$(n&,.Mo%()%(d.0+(., &-((:5+ana&.onD'./(n03E6.&n(,,J7d3Ga%)(,6-(n,-(,a.d&-a&DBP &-%o7'- A&&3.Pana+%(&7%n(d &-( do)7$(n&, ,70$.&&(d 03 -(%, ,a3.n' &-a& &-(%( 6a, no 7%'(n)3 *o% &-( ,a$( a,&-(%( 6a, no o&-(% 0.dd(% o* D&-( ,a.dE 5%o5(%&3 and &-a& C(07 B.on.) 6a, (n&.&+(d &o a *.%,&o5&.on &o0730(.n' &-( 5%(,(n&+(,,((. 7n the"ettera"so o+ -respondent. %an: dated J!ne&?,&>?', it is iportant tonotethat aside+roreH!irin#Ce%!9ioni3to3op"2,ith3ertainreH!ireents o+ tie deposit and ad$an3e renta", as 3ondition +or 3onstit!tion o+ "ease %et,een theparties and ,hi3h ,as 3op"ied %2 Ce%! 9ioni3-,. said "etter +!rther states in para#raph 4 thereo+that in 3ase there is -a. %etter o++er or i+ the propert2 ,i"" %e s!%Ae3t o+ a p!r3hase o++er, ,ithin theter, the "essee is #i$en the option o+ +irst re+!sa", other,ise, he has to $a3ate the preises ,ithinthirt2 da2s. 7n ans,er to the Co!rts H!estion, ho,e$er, Att2. Pana" aditted that he did not te""-petitioners. that there ,as another part2 ,ho ,as ,i""in# to p!r3hase the propert2, in $io"ation o+-petitioners. ri#ht o+ +irst re+!sa".-4>. ;Ephasis o!rs.< Li:e,ise, theRTC+o!ndthat respondentsToChip,=apand9a"i"a,erea,areo+the"ease3ontra3t in$o"$in# the s!%Ae3t properties %e+ore the2 p!r3hased the sae +ro D9P.Th!s: -Respondent. Jose To Chip "ae"2 pretends i#noran3e that -petitioners. are "essees o+ the propert2,s!%Ae3t atter o+ this 3ase. Ee states that he and his partners, the other -respondents., ,ere #i$enass!ran3es%2 Att2.Pana" o+theD9P that -L2diaSia.isnot a"essee, a"tho!#hhe:ne,that-petitioners. ,ere present"2 o33!p2in# the propert2 and that it ,as possessed %2 -petitioners. e$en%e+ore it ,as o,ned %2 the D9P. * * *. * * * * -Respondent. Ro#er 9a"i"a, inhistestion2, "i:e,isepretendedi#noran3ethat he:ne,that-L2dia Sia. ,as a "essee o+ the propert2. * * *. * * * * Bpon+!rther H!estionin#%2theCo!rt, headittedthat -L2diaSia. ,as not possessin#the%!i"din# +ree"2F that she ,as a "essee o+ R!d2 Ro%"es, the +orer o,ner, %!t 3"e$er"2 insisted indiso,nin#:no,"ed#ethat -L2diaSia. ,asa"essee, den2in#:no,"ed#ethat -L2diaSia. ,aspa2in# renta"s to -respondent. %an:. Eis pretended i#noran3e * * * ,as a ,a2 o+ e$adin# -Ce%!9ioni3s. ri#ht o+ +irst priorit2 to %!2 the propert2 !nder the 3ontra3t o+ "ease.* * * The Co!rt is3on$in3ed that -respondents To Chip, =ap and 9a"i"a. :ne, that -Ce%! 9ioni3. ,as the present"essee o+ the propert2 %e+ore the2 %o!#ht the sae +ro -respondent. %an:.Coon o%ser$ation,:no,"ed#e and e*perien3e di3tates that as a pr!dent %!sinessan, it ,as %!t nat!ra" that he as:L2dia Sia ,hat her stat!s ,as in o33!p2in# the propert2 ,hen he ,ent to ta": to her, that he as:her i+ she ,as a "essee. 9!t he said, a"" he as:ed her ,as ,hether she ,as interested to %!2 thepropert2. * * *.-/). The tria" 3o!rt, there+ore, 3on3"!ded that: 1ro the +ore#oin# +a3ts on re3ord, it is th!s 3"ear that -petitioner. Ce%! 9ioni3 is the present"esseeo+thepropert2,the"ease3ontra3t ha$in#%een3ontin!ed%2-respondent.D9P ,henitre3ei$edrenta" pa2ents !pto8ar3ho+ &>>&as ,e"" as the ad$an3e renta" +or one 2earrepresented%2theassi#nedtiedeposit ,hi3hissti"" in-respondent. %an:spossession.Thepro$ision, there+ore, in the "ease 3ontra3t, on the ri#ht o+ +irst option to %!2 and the ri#ht o+ +irstre+!sa" 3ontained in -respondent. %an:s "etter dated J!ne &?, &>?', are sti"" s!%sistin# and %indin#!ptothepresent, not on"2on-respondent. %an:%!t a"soon-respondentsToChip, =apand9a"i"a.. * * *. * * * * DEERE1ORE, TEE 1ORE5O7N5 PRE87SES CONS7DERED, A!d#ent is here%2 rendered: ;&< Res3indin# the Deed o+ Sa"e dated De3e%er (?, &>>) %et,een -respondent.De$e"opent 9an: o+ the Phi"ippines and -respondents. Ro#er 9a"i"a, Jose To Chipand Patri3io =apF ;(< Orderin# the -respondent. De$e"opent 9an: o+ the Phi"ippines to e*e3!te a Deed o+Sa"e o$er the propert2, s!%Ae3t atter o+ this 3ase !pon pa2ent %2 -petitioners. o+the ,ho"e 3onsideration in$o"$ed and to 3op"ete a"" a3ts or do3!ents ne3essar2 toha$e the tit"e o$er said propert2 trans+erred to the nae o+ -petitioners.F ;4< Costs a#ainst -respondents..-/&. D9P +orth,ith +i"ed a Noti3e o+ Appea".-/(. Respondents To Chip, =ap and 9a"i"a +i"ed a8otion+or Re3onsideration-/4. o+ the a%o$e de3ision, %!t the RTCdeniedthe sae inanOrder-//. dated J!"2 /, &>>'. Said respondents then +i"ed their Noti3e o+ Appea".-/0. On 1e%r!ar2 &/,())&, the Co!rt o+ Appea"spro!"#atedits De3ision,-/6. prono!n3in#that: De +ind nothin# erroneo!s ,ith the A!d#ent rendered %2 the tria" 3o!rt.Per+or3e, Des!stain it and disiss the -respondents. s!%ission. The RTC deterined, !pon e$iden3e on re3ord a+ter a 3are+!" e$a"!ation o+ the ,itnessesand their testionies d!rin# the tria" that indeed -petitioners. ri#ht o+ +irst option ,as $io"ated andth!s, res3ission o+ the sa"e ade %2 D9P to -respondents To Chip, =ap and 9a"i"a. are in order. * * * * Apparent"2, D9Pa33epted -the do3!ents s!%itted %2petitioners. and therea+ter,thro!#h Att2. Pana" ;o+ D9P. Att2. 1ran3is 8. Zosa, the 3o!nse" +orrespondents ToChip, =ap and 9a"i"a, e*p"ained that he sent 3opies o+ the otion +orre3onsideration to petitioners and D9P via persona" de"i$er2. On the other hand, the 3opies o+ theotion to %e +i"ed ,ith the Co!rt o+ Appea"s ,ere p!rported"2 sent to 8r. Doin#o Tan, a +riendo+ Att2. Zosa in J!e@on Cit2, ,ho a#reed to +i"e the sae persona""2 ,ith the appe""ate 3o!rt in8ani"a. Dhen Att2. Zosa inH!ired i+ the otion +or re3onsideration ,as a33ordin#"2 +i"ed, 8r.Tana""e#ed"2ans,eredinthe a++irati$e. Tohis s!rprise, Att2. Zosa re3ei$eda 3op2o+petitioners 8otion +or 7ss!an3e o+ Entr2 o+ J!d#ent. Att2. Zosa, th!s, attri%!ted the +ai"!re o+his 3"ients to +i"e a otion +or re3onsideration on the ista:e, e*3!sa%"e ne#"i#en3e andGor +ra!d3oitted %2 8r. Tan. 7ntheassai"edReso"!tiondated1e%r!ar20, ())(, theCo!rt o+ Appea"s#rantedtheotiono+respondentsToChip,=apand9a"i"aandadittedtheotion+orre3onsiderationatta3hed there,ith in the hi#her interest o+ s!%stantia" A!sti3e.-0). On J!"2 0, ())(, the Co!rt o+ Appea"s re$ersed its ori#ina" De3ision dated 1e%r!ar2 &/,())&, reasonin# th!s: A+teraA!di3io!sre$ie,andree$a"!ation o+ thee$iden3eand+a3tson re3ord,,eare3on$in3ed that D9P had terinated the Ro%"es "ease 3ontra3t. 1ro its "etter o+ J!ne &?, &>?',D9P had e*press"2 noti+ied -petitioners. that (I)f they wish to continue on leasing the property x xx to come to the Bank for the execution of a Contract of Lease, the salient conitions of which areas follows! 1. T-( +(a,( 6.++ 0( on a $on&- &o $on&- 0a,., *o% a $a:.$7$ 5(%.od o* on( 8193(a%4 A. D(5o,.& (;7./a+(n& &o &6o 8A9 $on&-, %(n&a+ and ad/an)( o* on( 819 $on&- %(n&a+,and &-( %($a.n.n' a$o7n& *o% on( 3(a% 8(;7./a+(n& &o 1 $on&-, %(n&a+9 ,-a++ 0( ,()7%(d 03(.&-(% ,7%(&3 0ond, )a,- 0ond o% a,,.'n(d &.$( d(5o,.&4 !. T-a& .n )a,( &-(%( ., a 0(&&(% o**(% o% .* &-( 5%o5(%&3 6.++ 0( ,70F()& o* a 57%)-a,(o**(%, 6.&-.n &-( &(%$, &-( +(,,o% ., './(n an o5&.on o* *.%,& %(*7,a+, o&-(%6.,( -( -a, &o /a)a&(&-( 5%($.,(, 6.&-.n &-.%&3 8!@9 da3, *%o$ da&( o* no&.)(. "econsier,temporarily,thecurrent monthlyrental#aseonthesix$monthreceipts,which we re%uire you to su#mit, until such time when we will fix the amount accoringly. E$ident"2, e*3ept +or the reittan3e o+ the onth"2renta"s !pto8ar3h&>>&, the3onditions iposed %2 D9P ha$e ne$er %een 3op"ied ,ith. -Petitioners. did not #o to the 9an: tosi#n an2 ne, ,ritten 3ontra3t o+ "ease ,ith D9P. -Petitioners. a"so did not p!t !p a s!ret2 %ondnor3ash%ondnorassi#natiedeposittose3!rethepa2ent o+renta" +ornine;>?' "etter, it 3annot %e said that -petitioners. entered into a ne, 3ontra3t ,ith D9P ,here the2,ere #i$en the +irst option to %!2 the "eased propert2 and to at3h o++ers +ro o!tside parties. * * * * 9e that as it a2, D9P 3ontin!ed to a33ept the onth"2 renta"s %ased on the o"d Ro%"es3ontra3t despitethe+a3t that the-petitioners.+ai"edtoenterintoa,ritten"ease3ontra3t ,ithit.Coro""ari"2, the re"ations %et,een the parties is no, #o$erned %2 A%&.)+( 1"?', ,hi3h ,as addressed to 9oni+a3io Sia, then President o+ Ce%! 9ioni3. D9Pe$en reH!ired Sia to pa2 the onth"2 renta" +or the onth o+ J!ne &>?', there%2 e*er3isin# theri#ht o+ the pre$io!s "essor, R!d2 Ro%"es, to 3o""e3t the renta" pa2ents +ro the "essee. 7n thesae "etter, D9P e*tended an o++er to Ce%! 9ioni3 to 3ontin!e the "ease on the s!%Ae3t propert2,o!t"inin# the pro$isions o+ the proposed 3ontra3t and spe3i+i3a""2 instr!3tin# the "atter to 3oe tothe %an: +or the e*e3!tion o+ the sae. D9P "i:e,ise #a$e Ce%! 9ioni3 a 4)-da2 period ,ithin,hi3htoa3t onthesaid3ontra3t e*e3!tion. Sho!"dCe%!9ioni3+ai" todoso, it ,o!"d%edeeed !ninterested in 3ontin!in# ,ith the "ease. 7n that e$ent!a"it2, the "etter states that Ce%!9ioni3 sho!"d $a3ate the preises ,ithin the said period. 7nstead o+ a33edin# to the ters o+ the a+oreentioned "etter, the 3o!nse" o+ Ce%! 9ioni3sent a 3o!nter-o++er to D9P dated J!"2 ', &>?', s!##estin# a di++erent ode o+ pa2ent +or therenta"sandreH!estin#+ora6)-da2period,ithin,hi3htietheparties,i"" e*e3!teane,3ontra3t o+ "ease. Theparties, ho,e$er,+ai"edtoe*e3!tea,ritten3ontra3t o+"ease. Petitionersp!t the%"aeonD9P,assertin#that no3ontra3t ,as si#ned%e3a!seD9Pdidnot prepareit +orthe. D9P, on the other hand, 3o!nters that it ,as petitioners ,ho did not positi$e"2 a3t on the3onditions+orthee*e3!tiono+the"ease3ontra3t. 7n$ie,o+the3o!nter-o++ero+petitioners,D9P and respondents To Chip, =ap and 9a"i"a ar#!e that there ,as no eetin# o+ inds %et,eenD9P and petitioners, ,hi3h ,o!"d ha$e #i$en rise to a ne, 3ontra3t o+ "ease. TheCo!rt r!"es that, indeed, none,3ontra3t o+ "ease,as e$er per+e3ted%et,eenpetitioners and D9P. 7n (etropolitan (anila )evelopment *uthority v. J*+C,( -nvironmental Corporation,-60. ,e ephasi@ed that: Bnder Arti3"e &4)0 o+ the Ci$i" Code, -a. 3ontra3t is a eetin# o+ inds %et,een t,opersons ,here%2 one %inds hise"+, ,ith respe3t to the other, to #i$e soethin# or to render soeser$i3e. A 3ontra3t !nder#oes three distin3t sta#es preparation or ne#otiation, its per+e3tion, and+ina""2,its3ons!ation. Ne#otiation%e#ins+rothetietheprospe3ti$e3ontra3tin#partiesani+est their interest in the 3ontra3t and ends at the oent o+ a#reeent o+ the parties.Theper+e3tion or %irth o+ the 3ontra3t ta:es p"a3e ,hen the parties a#ree !pon the essentia" e"eents o+the3ontra3t. The"ast sta#eisthe3ons!ationo+the3ontra3t ,hereintheparties+!"+i"" orper+or the ters a#reed !pon in the 3ontra3t, 3!"inatin# in the e*tin#!ishent thereo+ ;Bugattivs. C*, 4/4SCRA440-())).?'.Dereiterate that the "etter e*p"i3it"2 dire3ted the petitioners to 3oe to the o++i3e o+ the D9P i+ the2,ished to enter into a ne, "ease a#reeent ,ith the said %an:. Other,ise, i+ no 3ontra3t o+ "ease,ase*e3!ted,ithin4)da2s +rothedateo+ the"etter, petitioners ,ereto%e3onsidered!ninterested in enterin# into a ne, 3ontra3t and ,ere there%2 ordered to $a3ate the propert2. Asno ne, 3ontra3t ,as in +a3t e*e3!ted %et,een petitioners and D9P ,ithin the 4)-da2 period, thedire3ti$e to $a3ate, th!s, too: e++e3t. D9Ps "etter dated J!ne &?, &>?', there+ore, 3onstit!ted the,ritten noti3e that ,as reH!ired to terinate the "ease a#reeent %et,een petitioners and R!d2Ro%"es. 1rothenon, thepetitioners3ontin!edpossessiono+thes!%Ae3t propert23o!"d%edeeed to %e ,itho!t the 3onsent o+ D9P. Th!s"2, petitioners assertion that Arti3"e &6') o+ the Ci$i" Code is not app"i3a%"e to theinstant 3ase is 3orre3t. The reason, ho,e$er, is not that the e*istin# 3ontra3t ,as 3ontin!ed %2D9P, %!t %e3a!se the "ease ,as terinated %2 D9P, ,hi3h terination ,as a33opanied %2 adeand to petitioners to $a3ate the preises o+ the s!%Ae3t propert2. Arti3"e &6') states that -i.+ at the end o+ the 3ontra3t the "essee sho!"d 3ontin!e enAo2in#the thin# "eased +or +i+teen da2s ,ith the a3H!ies3en3e o+ the "essor, and !n"ess a noti3e to the3ontrar2 %2 either part2 has pre$io!s"2 %een #i$en, it is !nderstood that there is an ip"ied ne,"ease, not +or the period o+ the ori#ina" 3ontra3t, %!t +or the tie esta%"ished in Arti3"es &6?( and&6?'. The other ters o+ the ori#ina" 3ontra3t sha"" %e re$i$ed. 7n $ie, o+ the order to $a3atee%odied in the "etter o+ D9P dated J!ne &?, &>?' in the e$ent that no ne, "ease 3ontra3t isenteredinto, thepetitioners 3ontin!edpossessiono+ thes!%Ae3t properties ,as ,itho!t thea3H!ies3en3e o+ D9P, there%2 ne#atin# the 3onstit!tion o+ an ip"ied "ease. Contrar2tother!"in#o+ theRTC, D9Ps a33eptan3eo+ petitioners renta" pa2entso+ P0,))).)) +or the period o+ No$e%er &>>) to 8ar3h &>>& did not "i:e,ise #i$e rise to anip"ied "ease %et,een petitioners and D9P. 7n .ag#ilaran Integrate /ettlers *ssociation (.I/*)Incorporatev.Court of *ppeals,-'&. ,ehe"dthat thes!%seH!ent a33eptan3e%2the"essoro+renta" pa2ents does not, a%sent an23ir3!stan3ethat a2di3tatea3ontrar23on3"!sion,"e#itii@e the !n"a,+!" 3hara3ter o+ their possession. 7n the present 3ase, the petitioners renta"pa2ents to D9P ,ere ade in "!p s! on 8ar3h ((, &>>&. Si#ni+i3ant"2, said pa2ents ,erereitted on"2 a+ter petitioners ,ere noti+ied o+ the sa"e o+ the s!%Ae3t properties to respondentsToChip, =apand9a"i"aanda+ter thepetitioners,ere#i$ena+ina" deandto$a3atetheproperties. These +a3ts s!%stantia""2 ,ea:en, i+ not 3ontro$ert, the +indin# o+ the RTC and thear#!ent o+ petitioners that the "atter ,ere +aith+!""2 reittin# their renta" pa2ents to D9P !nti"the 2ear &>>&. Th!s, ha$in#deterinedthat thepetitioners andD9Pneither e*e3!tedane,"easea#reeent, nor enteredintoanip"ied"ease 3ontra3t, it +o""o,s that petitioners 3"aio+entit"eent to a ri#ht o+ +irst re+!sa" has no "e# to stand on. 1!rtherore, e$en i+ ,e ,ere to#rant, +or the sa:e o+ ar#!ent, that an ip"ied "ease ,as 3onstit!ted %et,een petitioners and theD9P, the ri#ht o+ +irst re+!sa" that ,as 3ontained in the prior "ease 3ontra3t ,ith R!d2 Ro%"es ,asnotrene,ed there,ith. Thisisina33ordan3e ,iththe r!"in#in )i0onv. (agsaysay,-'(. ,hi3hin$o"$ed the iss!e o+ ,hether a pro$ision re#ardin# a pre+erentia" ri#ht to p!r3hase is re$i$ed inan ip"ied "ease !nder Arti3"e &6'), to ,it: -T.he other ters o+ the ori#ina" 3ontra3t ,hi3h are re$i$ed in the ip"ied ne, "ease !nder Arti3"e&6') are on"2 those ters ,hi3h are #erane to the "essees ri#ht o+ 3ontin!ed enAo2ent o+ thepropert2"eased. This is a reasona%"e 3onstr!3tion o+ the pro$ision, ,hi3h is %ased on thepres!ption that ,hen the "essor a""o,s the "essee to 3ontin!e enAo2in# possession o+ the propert2+or +i+teen da2s a+ter the e*piration o+ the 3ontra3t he is ,i""in# that s!3h enAo2ent sha"" %e +orthe entire period 3orrespondin# to the rent ,hi3h is 3!stoari"2 paid in this 3ase !p to the end o+theonth%e3a!setherent ,aspaidonth"2. Ne3essari"2,i+thepres!ed,i""o+thepartiesre+erstotheenAo2ent o+ possessionthepres!ption3o$erstheotherterso+ the3ontra3tre"ated to s!3h possession, s!3h as the ao!nt o+ renta", the date ,hen it !st %e paid, the 3are o+the propert2, the responsi%i"it2 +or repairs, et3. 9!t no s!3h pres!ption a2 %e ind!"#ed in ,ithrespe3t to spe3ia" a#reeents ,hi3h %2 nat!re are +orei#n to the ri#ht o+ o33!pan32 or enAo2entinherent in a 3ontra3t o+ "ease.-'4. D9P 3annot, there+ore, %e a33!sed o+ $io"atin# the ri#hts o+ petitioners ,hen it o++eredthe s!%Ae3t properties +or sa"e, and e$ent!a""2 so"d the sae to respondents To Chip, =ap and9a"i"a, ,itho!t +irst noti+2in# petitioners. Neither ,ere the said respondents %o!nd %2 an2 ri#hto+ +irst re+!sa" in +a$or o+ petitioners. ConseH!ent"2, the sa"e o+ the s!%Ae3t properties torespondents ,as $a"id. Petitioners 3"ai +or res3ission ,as proper"2 disissed. >HEREFORE, thePetition+orRe$ie,on Certiorari !nderR!"e/0o+theR!"eso+Co!rt is DENIED. The Reso"!tion dated 1e%r!ar2 0, ())( and the Aended De3ision dated J!"20, ())( o+ the Co!rt o+ Appea"s in CA-5.R. CV No. 0'(&6 are here%2 AFFIRMED. No 3osts. SO ORDERED. TERESITA J. LEONARDO?DE CASTROAsso3iate J!sti3e