SYNOPSIS
the supposed authority given by petitioner as payee thereof
In 1974, Overland Express Lines, Inc.  entered into a
Contract of Lease with Option to Buy with herein petitioners
involving a land in Quezon City.  The term of the lease was
for one (1) year, during which period, the lessee was granted
an option to purchase the lot for P3,000.00 per square
meter.  Thereafter, the lease shall be on a per month basis
with a monthly rental of P3,000.00.  Later, for failure to pay
the increased rental of P8,000.00 per month effective June
1976, herein petitioners filed an action for ejectment to which
the Corporation was ordered to vacate the leased premises.  PAYMENT OF RENTALS GIVES RIGHT TO EVICT,
The Corporation, however, questioned the jurisdiction of the
City Court over the ejectment case.  Subsequently, the
Corporation filed its own action for specific performance and
fixing the period for obligation.  It sought to compel the
execution of a deed of sale pursuant to the option to
purchase, and the receipt of the partial payment it made and
to fix the period to pay the balance thereof.
Petitioners have established a right to evict private
respondent from the subject premises for non-payment of
rentals.  In this regard, the then City Court had exclusive
jurisdiction over the ejectment suit.  The filing by the
Corporation of a suit with the RTC for specific performance
did not divest the City Court of its jurisidiction over the
ejectment case The decision of the City Court was affirmed
by the Intermediate Appellate Court and the Supreme Court.  ejectment suit against the former with the then City Court. In
Having failed to exercise the option to purchase within the
stipulated one-year period, private respondent Corporation
cannot now enforce its option.  An implied new lease on a
monthly basis does not ipso facto carry with it an implied
revival of the option to purchase the leased premises. The
right to exercise the option to purchase expired with the
termination of the original contract of lease for one year.  The
private respondent delivered a check of P300,000.00 to Alice
Dizon who allegedly acted as agent of petitioners pursuant to
does not amount to a perfected contract of sale pursuant to
the contract of lease with option to buy.  There was no valid
consent by the petitioners on the supposed sale entered into
by Alice Dizon, as petitioners alleged agent, and private
respondent.
SYLLABUS
1. CIVIL LAW; SPECIAL CONTRACTS; LEASE; NON-
REGARDLESS OF THE ACTION FOR SPECIFIC
PERFORMANCE TO ENFORCE OPTION TO PURCHASE
WHICH WAS ALSO INSTITUTED. Petitioners have
established a right to evict private respondent from the
subject premises for non-payment of rentals.  Since the rent
was paid on a monthly basis, the period of lease is
considered to be from month to month in accordance with
Article 1687 of the New Civil Code.  Where the rentals are
paid monthly, the lease, even if verbal may be deemed to be
on a monthly basis, expiring at the end of every month
pursuant to Article 1687, in relation to Article 1673 of the
Civil Code.  In such case, a demand to vacate is not even
necessary for judicial action after the expiration of every
month.  When private respondent failed to pay the increased
rental, the petitioners had a cause of action to institute an
this regard, the City Court (now MTC) had exclusive
jurisdiction over the ejectment suit.  The filing by private
respondent of a suit with the Regional Trial Court for specific
performance to enforce the option to purchase did not divest
the then City Court of its jurisdiction to take cognizance over
the ejectment case.  Of note is the fact that the decision of
the City Court was affirmed by both the Intermediate
Appellate Court and this Court.
2. ID.; ID.; ID.; FAILURE TO EXERCISE OPTION TO
PURCHASE WITHIN THE STIPULATED PERIOD;
EFFECT; CASE AT BAR.  Having failed to exercise the
option to purchase within the stipulated one year period,
private respondent cannot enforce its option to purchase
anymore.  Moreover, even assuming arguendo that the right
to exercise the option still subsists at the time private
respondent tendered the amount, the suit for specific
performance to enforce the option to purchase was filed
more than ten (10) years after accrual of the cause of action
as provided under Article 1144 of the New Civil Code.  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 agent.  As provided in Article 1868 of the New Civil
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 lessees 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 respondents  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 respondents right to exercise the option to
purchase expired with the termination of the original contract
of lease for one year.
3. ID.; ID.; CONTRACT OF SALE; WHEN PERFECTED.
Under Article 1475 of the New Civil Code, the contract of
sale is perfected at the moment there is a meeting of minds
upon the thing which is the object of the contract and upon
the price.  From that moment, the parties may reciprocally
demand performance, subject to the provisions of the law
governing the form of contracts.  Thus, the elements of a
contract of sale are consent, object, and price in money or its
equivalent.  It bears stressing that the absence of any of
these essential elements negates the existence of a
perfected contract of sale. Sale is a consensual contract and
he who alleges it must show its existence by competent
proof.
4. ID.; ID.; CONTRACT OF AGENCY; NOT
APPRECIATED. There was no valid consent by the
petitioners (as co-owners of the leased premises) on the
supposed sale entered into by Dizon, as petitioners alleged
agent, and private respondent.  The basis for agency is
representation and a person dealing with an agent is put
upon inquiry and must discover upon his peril the authority of
Code, there was no showing that petitioners consented to
the act of Dizon nor authorized her to act on their behalf with
regard to her transaction with private respondent.  The most
prudent thing private respondent should have done was to
ascertain the extent of the authority of Dizon.  Being
negligent in this regard, private respondent cannot seek
relief on the basis of a supposed agency.
APPEARANCES OF COUNSEL
M.M. Lazaro Associates for petitioner.