4/15/2021 E-Library - Information At Your Fingertips: Printer Friendly The Petition should be denied. I The issue on the failure to state a cause of action is premised on whether the Lease Contract was expressly renewed, and if so, whether the renewal included the right of first refusal. Thus, we first discuss the issue on the lease contract's renewal. Based on the terms of the Lease Contract, renewal would be at the option of the lessee. [52] However, petitioners did not appear to have expressly informed the lessor of their intent to renew. Instead, after the original Lease Contract had expired, they continued to pay rentals to the lessor.[53] This constitutes an implied lease contract renewal, as the trial court and the Court of Appeals correctly found.[54] Article 1670 of the Civil Code states: ARTICLE 1670. If at the end of the contract the lessee should continue enjoying the thing leased for fifteen days with the acquiescence of the lessor, and unless a notice to the contrary by either party has previously been given, it is understood that there is an implied new lease, not for the period of the original contract, but for the time established in Articles 1682 and 1687. The other terms of the original contract shall be revived. Dizon v. Court of Appeals[55]—a 1999 case that similarly delved into which terms in a lease contract would be revived in implied renewals—is enlightening. In that case, Overland Express Lines, Inc. (Overland) entered into a one-year Contract of Lease with Option to Buy with the Dizons, the property owners. Per the agreement, Overland would pay a monthly rental of P3,000.00, while the purchase price was pegged at P3,000.00 per square meter.[56] The lease contract was not expressly renewed after a year had lapsed, though Overland continued to occupy the premises. However, when the monthly rental rate eventually rose to P8,000.00, Overland was unable to pay. This prompted the Dizons to file an ejectment suit, which resulted in the trial court ordering Overland to vacate the property and pay reasonable compensation and attorney's fees. Overland went to the Court of Appeals and subsequently to this Court, questioning the trial court's jurisdiction, but its petitions were dismissed.[57] Insisting on its option to buy, Overland filed a suit for specific performance seeking that a deed of sale be executed, and later, another suit seeking to annul the judgment in the ejectment case. These cases were consolidated and later dismissed. On appeal, the Court of Appeals affirmed the trial court's jurisdiction, but it also ruled that Overland had acquired the rights of a vendee upon a perfected contract of sale.[58] Meanwhile, as the Dizons were already moving to have the judgment in the ejectment case executed, Overland contested the enforceability of the judgment. Its effort yielded much success: the trial court granted a writ of preliminary injunction, and later, the Court of Appeals found that the Dizons' alleged right to eject Overland had no basis.[59] https://elibrary.judiciary.gov.ph/thebookshelf/showdocsfriendly/1/66171 7/14