Digest.ph

City Engineer of Manila ordered PHI to demolish its building which it was leasing. PHI then entered into a compromise agreement with its lessees. The lessees, including Rebecca, agreed to vacate the premises within 60 days subject to a proviso that they have the right of first refusal should PHI decide to sell the subject property. PHI sold the said property by way of dacion en pago to PCC.  PCC then sold it to private respondents. Rebecca now seeks to annul the sale, argued that her right to first refusal was denied. RTC, CA and SC held that such right does not exist.

The requisites of a stipulation pour autrui or a stipulation in favor of a third person are the following:

1. there must be a stipulation in favor of a third person.
2. the stipulation must be a part, not the whole of the contract.
3. the contracting parties must have clearly and deliberately conferred a favor upon a third person, not a mere inciden­tal benefit or interest.
4. the third person must have communicated his acceptance to the obligor before its revocation.
5. neither of the contracting parties bears the legal representation or authorization of the third party.