Scribd
Upload
812 views1 page

Rosencor Development Corporation v. Inquing

The respondents were lessees of a property owned by the Spouses Tiangco since 1971 and were promised a pre-emptive right to purchase the property if it was sold. After the original owners died, their heir Eufrocina de Leon offered to sell the property to the lessees for 2M but the lessees counter offered 1M with no response. De Leon then informed them the property was already sold to Rosencor. The lessees claimed they were deceived as the property was sold before being offered to them. The court ruled the right of first refusal did not need to be written and was proven by oral evidence. However, rescission of the sale was not applicable because Rosencor purchased

Uploaded by

Jennifer Oceña
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
812 views1 page

Rosencor Development Corporation v. Inquing

The respondents were lessees of a property owned by the Spouses Tiangco since 1971 and were promised a pre-emptive right to purchase the property if it was sold. After the original owners died, their heir Eufrocina de Leon offered to sell the property to the lessees for 2M but the lessees counter offered 1M with no response. De Leon then informed them the property was already sold to Rosencor. The lessees claimed they were deceived as the property was sold before being offered to them. The court ruled the right of first refusal did not need to be written and was proven by oral evidence. However, rescission of the sale was not applicable because Rosencor purchased

Uploaded by

Jennifer Oceña
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 1

137. Rosencor Development Corporation v.

Inquing, 354 SCRA 119

FACTS: Paterno Inquing, Irene Guillermo, Frederico Bantugan, Fernando Magbanua,


and Liza Tiangco, herein respondents, averred that they are the lessees, since 1971, of
a two-story residential apartment located at Tomas Morato Ave., QC owned by the
spouses Faustino and Cresencia Tiangco. The lease was not covered by a contract and
the lessees were assured by the Spouses Tiangco that they had the pre-emptive right to
purchase the property if ever there was a decision to sell it. The original lessors died
and their heir also promised the lessees the same pre-emptive right to purchase. The
new lessors represented by Eufrocina de Leon demanded the lessees to vacate the
property because the building will allegedly be demolished but after
the lessees declined, she sent them a letter offering to sell the property for
2M. Lessees made a counter offer of 1M but no reply was made by the lessors.
De leon subsequently informed the lessees that the property was already sold to
Rosencor. Lessees claimed that they were deceived because the property was already
sold to Rosencor before it was offered to them. They offered to reimburse the payment
to the lessors but the offer was declined as hence, this petition.

ISSUE: Whether the contract of sale is rescissible.

RULING: No. The right of first refusal is not covered by the Statute of Frauds. The
application of such statute presupposes the existence of a perfected contact which is
not applicable in this case. As such, a right of first refusal need not be written to be
enforceable and can be proved by oral evidence. Lessees have proven that the lessors
admit the right of first refusal given to them when the property was offered to them by
2M. The prevailing doctrine is that a contract of sale entered in violation of right of first
refusal is rescissible. However, that doctrine cannot be applied to the case at bar. Under
Article 1381 of the Civil Code, a contract validly agreed upon may be rescinded if it is
“undertaken in fraud of creditors when the latter cannot in any manner collect the claim
due them.” Moreover, under Article 1385, rescission shall not take place “when the
things which are the object of the contract are legally in the possession of third persons
who did not act in bad faith.”

Clearly, De Leon is the only party in bad faith in this case. Considering that there was
no showing of bad faith on the part of the petitioners, the CA erred in ordering for the
rescission of the Deed of Absolute Sale between Rosencor and De Leon. Rosencor
could not have acted in bad faith because they are not aware of the right of first refusal
given verbally. Respondents remedy is not rescission but an action for damages against
De Leon and the heirs of the Spouses Tiangco for the unjustified disregard of their right
of first refusal.

You might also like