Name: Oloteo, Marylou Renzi M.

Oloteo

Topic: LEASE

G.R. No. 138113               October 17, 2000

EMILIO BUGATTI, petitioner, 
vs.
COURT OF APPEALS and SPOUSES BEN BAGUILAT and MARIA
BAGUILAT, respondents.

FACTS:

Petitioner Emilio Bugatti, the lessee filed petition for certiorari against Court of
Appeals decision on recovery of possession and damages filed by respondents
Benand Maria Baguilat on July 11, 1989, the land owner and the lessor. The terms
and conditions was agreed by petitioner and respondents that aforesaid that those
be stipulated in a written contract of lease to be prepared by petitioner and
presented to respondents for their approval. However, even before preparing the
contract of lease, petitioner occupied respondents land and began construction.

Eventually, petitioner finally presented the lease contract to respondents but it did
not contain the terms and conditions previously agreed upon. Respondents insisted
that petitioner re-draft the contract in accordance with their discussions. The
revised document, presented to respondents contained counter-proposals.
Respondents refused to accede to such counter-proposals. Despite the fact that the
parties signed no contract, petitioner continued to occupy respondents’ land. In an
effort to resolve their differences, respondents resorted to extrajudicial measures.
Petitioner did not heed respondents’ demands. Subsequent efforts of respondents
to resolve the conflict proved equally futile.

ISSUE:

Whether or not a contract of lease has been perfected.

RULING:

No, there was no contract of lease. The court finds that the trial court was correct in
ruling that no contract of lease was perfected and accordingly, held that the
appellate court committed reversible error in ruling to the contrary because during
the first week, both parties were discussing the terms and conditions of the lease,
they were merely negotiating. There was no perfection yet of the contract since
both the parties did not agree upon the essential elements of the contract. There
was no meeting of the mind yet. Aside from their verbal objections, respondents
sent petitioner two demand letters to vacate the property and demanded that
petitioner terminate all construction work upon respondents’ property.
Respondents’ vehement protests against petitioners construction activities simply
show that there is no contract that had been agreed by the parties.
From the testimonies of respondent Maria Baguilat and petitioner it could clearly be
inferred that it was their intention that such terms and conditions were to be
embodied in a lease contract to be prepared by the latter and presented to
respondents for their approval before either party could be considered bound by the
same.