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G.R. No. 111538, February 26, 1997
268 SCRA 227

Petitioner appeals the decision of respondent court which affirms that of the trial court dismissing
its complaint for breach of contract under a lease agreement, on the ground of failure to state an action.
Private respondent Santos is an owner of 8 parcels of land leased out to Chua. Later, the latter
assigned his rights under the lease to Ching Bing and still later, Ching Bing assigned the rights to
petitioner. All the transactions with regard to the lease are registered.
The lease contract provides a right of first option or priority to buy the lots in case the lessor
decides to sell them. Santos offered to sell the lots to petitioner for 15M but this was rejected by petitioner
as being ridiculous. Later the lots were sold to co-defendant Raymundo only for 9M. The complaint of
petitioner alleged these facts which according to private respondents barely commenced to create a cause
of action, but neutralized itself by its subsequent averments which erased or extinguished its earlier
allegations of an impending wrong.

Does petitioner have a cause of action against private respondents?

Yes. In determining whether allegations of a complaint are sufficient to support a cause of action,
it must be borne in mind that the complaint does not have to establish or allege facts proving the existence
of a cause of action at the outset; this will have to be done at the trial on the merits of the case. To sustain
a motion to dismiss for lack of cause of action, the complaint must show that the claim for relief does not
exist, rather than that a claim has been defectively stated, or is ambiguous, indefinite or uncertain.
A careful examination of the complaint reveals that it sufficiently alleges an actionable
contractual breach on the part of private respondents. Under paragraph 9 of the contract of lease,
petitioner was granted the first option or priority to purchase the leased properties in case Santos decided
to sell. Whether there was actual breach which entitled petitioner to damages and/or other just or
equitable relief, is a question which can better be resolved after trial on the merits where each party can
present evidence to prove their respective allegations and defenses.