7.

Sen Po Ek Marketing Corporation v Martinez

February 9, 2000 | De Leon, Jr., J. | Extinguishment of Sale Issue: Whether or not the first sale and second sale are valid?
PETITIONER: Sen Po Ek Marketing Corporation
RESPONDENTS: Teodora Martinez, Juanito Uyping, Jr., Nelson Uyping, and Ruling:
Leoncio Uyping First sale (between Sofia and Teodora) is void
 Basis: Fictitious under Art. 1409 of the CC
SUMMARY: o Under Art. 1409 (2) of the New Civil Code, one type of contract which
Sofia Martinez leased the lots to Yu Siong, father of the President of Sen Po Ek can be declared void and inexistent is that which is absolutely
Marketing Corporation. While the lease was subsisting, Sofia sold the lots to her simulated or fictitious
daughter, Teodora. Teodora then sold the property to the Tiu Uyping brothers.  (1) contract of sale was executed in 1079 but it was only notarized in 1985;
Sen Po Ek Marketing Corporation seeks the nullity of the first and second deed of  (2) Teodora signed not as owner but merely as an instrumental witness;
sale, invoking its alleged right of first refusal.  (3) Sofia retained enjoyment and control of the leased premises as she
continued receiving rentals until her demise in 1989  Teodora never asserted
DOCTRINE: her alleged right of ownership over the leased premises.
Article 1622 of the New Civil Code only deals with small urban lands that are
bought for speculation where only adjoining lot owners can exercise the right of Second sale (between Teodora and the Tiu Uyping brothers) is valid
pre-emption or redemption. Sen Po Ek is not an adjoining lot owner, but a lessee  Basis: Ratification
trying to buy the land that it was leasing.  Teodora had no authority to sell the entire lot to the Tiu Uyping brothers
o She can only sell her undivided portion of the property
Facts: o Thus, when she sold the property to the Tiu Uyping brothers, the sale
 Sofia P. Martinez was the registered owner of two (2) parcels of land. is unenforceable for having been ented without rendering the sale
 Sofia leased the lots for 10 years to Yu Siong, father of the president and unenforceable having been entered into by Teodora in behalf of her
stockholders of Sen Po Ek Marketing Corporation co-heirs, who gave no authority or legal representation.
 The lease contract required the lessee to construct a commercial building on  However, such a contract is susceptible of ratification.
the leased property which shall become the property of Sofia upon the o In this case, the ratification came in the form of a "Confirmation of
expiration of the lease. Sale of Land and Improvements" executed by the other heirs of Sofia
 The building was constructed and was declared for taxation purposes, in the giving the sale a color of validity.
name of Sen Po Ek.
 The lease underwent several renewals. While the lease was still subsisting, Right of first refusal not applicable
Sofia sold the lots to her daughter, Teodora P. Martinez.  P.D. 1517, R.A. No. 1162 and Article 1622 of the CC which allegedly gave Sen Po
 Teodora informed Sen Po Ek of her intention to sell the leased premises. Ek the preferential right of first refusal not applicable in this case
 Then, Sen Po Ek filed a complaint against Teodora for the annulment of the  P.D. No. 1517, otherwise known as "The Urban Land Reform Act," pertains to
deed of sale executed by Sofia (mother) in favor of Teodora (daughter) areas proclaimed as urban land reform zones.
 Sen Po Ek invoked its alleged right of first refusal or preferential right to buy the o Lot Nos. 50 and 106 are both located in Tacloban City, which has not
leased premises based on R.A. No. 1162, as amended in relation to P.D. No. been declared as an urban land reform zone.
1517 (Urban Land Reform Act).  R.A. No. 1162, on the other hand, only deals with expropriation of parcels of
 Teodora sold the property to Juanito Tiu Uyping, Nelson Tiu Uyping and Leoncio land located in the City of Manila, which the leased premises are not.
Tiu Uyping.  Finally, Article 1622 of the New Civil Code only deals with small urban lands
 Subsequently, Sen Po Ek amended its complaint to include the Tiu Uyping that are bought for speculation where only adjoining lot owners can exercise
brothers and also praying for the nullity of the second sale transaction. the right of pre-emption or redemption.
 RTC: in favor of petitioner Sen Po Ek. o Sen Po Ek is not an adjoining lot owner, but a lessee trying to buy the
 CA: reversed the decision of the trial court. Hence, the present petition. land that it was leasing.
 Indeed the right of first refusal may be provided for in a lease contract.
However in this case, such right was never stipulated in any of the several lease
contracts between petitioner and Sofia.
o Petitioner claims that it was Teodora herself who assured them that
they can have the first priority to buy the subject parcels of land, but
there is absolutely no proof of this.