Guzman v Bonnevie

Guzman, Bocaling & Co. vs. Bonnevie Facts: A 600 sqm parcel of land with two buildings belonging to the Intestate Estate of  Jose Reynoso was leased to Raoul andChristopher Bonnevie by the administratix A frica Valdez for a period of one year at a rate of 4K a month starting Aug. 1976 .In the contract of lease, there is a stipulation that ³in case the lessor desires  or decides to sell the leased property, thelessees shall be given a first prior ity to purchase the same, all things and considerations being equal. y In Nov. 1976, administratix notified the resp by registered mail that she is sel ling the premises for 600K less a mortgage loanand giving them 30 days from rece ipt to exercise their right of first priority. If they would not exercise, she e xpects them tovacate the prop in March 1977. y In Jan 1977, she sent a letter notifying them that in their failure to exercise their right, she has already sold the property. Thisis the only letter that the Bonnevies received. They informed agent that they are willing to make negotiatio ns and that theyrefuse the termination of the lease.In March 1977, property form ally sold to Guzman, Bocaling & Corp for 400K and the balance of this amount sha ll bepaid when the Bonnevies have already vacated the premises.Administratix dem anded that they vacate the premises and pay the rentals for four months.They had  a Compromise Agreement that the Bonnevies shall vacate the premises not later t han Oct. 1979 but this wasset aside.The Bonnevies filed an action for annulment of the sale between REynoso and the GBC and ancellation of the transfer certific ate. They also asked that Reynoso be required to sell the property to them under  the same terms and conditions agreedupon the Contract of sale. I ssue: WON the Bonnevies can file for an action for annulment of the sale between Reyno so and the GBC considering that they are thirdparties to the contract. Held:  Yes. The Contract of Sale was not voidable but rescissible.Under Art 1380 to 13 81 (3) of the CC, a contract otherwise valid may nonetheless be subsequently res cinded by reasonof injury to third persons, like creditors. The status of credit ors could be validly accorded the Bonnevies for they hadsubstantial interest tha t were prejudiced by the sale of the subject property to the petitioner without recognizing their right of first priority under the Contract of Lease.Tolentino:  rescission is a remdy granted by law to the contracting parties and even to thi rd persons, to secure reparationfor damages caused to them by a contract, even i f this should be valid, by means of the resotoration of things to their conditio n at the moment prior to the celebration of said contract.It is a relief allowed  for the protection of one of the contracting parties and even third persons fro m all injury anddamage the contract may cause, or to protect some incompatible a nd preferred right created by the contract.Rescission implies a contract which, even if initially valid, produces a lesion or pecuniary damage to someone thatju stifies its invalidation for reasons of equity.GBC cannot be buyers in good fait h bec they had knowledge of the lease of the premise. They were negligent in not inquiring about the terms of the Lease Contract