4/15/2021
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Hence, both parties came to this Court. Ruling on the consolidated petitions, this Court
discussed that the issue on whether the Dizons could eject Overland was based on
whether the option to buy in the lease contract was included in the contract's implied
renewal.
This Court ruled:
In this case, there was a contract of lease for one (1) year with option to
purchase. The contract of lease expired without the private respondent, as
lessee, purchasing the property but remained in possession thereof. Hence,
there was an implicit renewal of the contract of lease on a monthly basis.
The other terms of the original contract of lease which are revived in the
implied new lease under Article 1670 of the New Civil Code are only those
terms which are germane to the lessee's right of continued enjoyment of the
property leased. Therefore, an implied new lease does not ipso facto carry
with it any implied revival of private respondent's option to purchase (as
lessee thereof) the leased premises. The provision entitling the lessee the
option to purchase the leased premises is not deemed incorporated in the
impliedly renewed contract because it is alien to the possession of the
lessee. Private respondent's right to exercise the option to purchase expired
with the termination of the original contract of lease for one year. The
rationale of this Court is that:
. . . Necessarily, if the presumed will of the parties refers to the
enjoyment of possession the presumption covers the other terms
of the contract related to such possession, such as the amount of
rental, the date when it must be paid, the care of the property,
the responsibility for repairs, etc. But no such presumption may
be indulged in with respect to special agreements which by
nature are foreign to the right of occupancy or enjoyment
inherent in a contract of lease.[60] (Citations omitted)
Simply put, this Court ruled that implied renewals do not include the option to buy, as it
is not germane to the lessee's continued use of the property. Moreover, since Overland
failed to avail of the option to buy within the stipulated period, it no longer had any
right to enforce this option after that period had lapsed.
Similarly, in this case, petitioners can only invoke the right to ask for the rescission of
the contract if their right to first refusal, as embodied in the original Lease Contract, is
included in the implied renewal.
Article 1643 of the Civil Code provides:
ARTICLE 1643. In the lease of things, one of the parties binds himself to
give to another the enjoyment of use of a thing for a price certain, and for a
period which may be definite or indefinite. However, no lease for more than
ninety-nine years shall be valid.
Based on Article 1643, the lessee's main obligation is to allow the lessee to enjoy the
use of the thing leased. Other contract stipulations unrelated to this—or instance, the
right of first refusal—cannot be presumed included in the implied contract renewal. The
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