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GR 178317; SEPTEMBER 23, 2015


Loss of Things Due

Facts: Spouses Ricardo and Elena C. Golez (Spouses Golez) have entered into a contract of lease with
the owner of the lot Meliton Nemeño (Meliton) on May 31, 1989. The property which was located in
Zamboanga del Sur shall be occupied by the Spouses Golez and and lieu of payment of rent the owner
the lot have agreed to be paid by the Spouses by constructing a building on the said lot.

On May 23, 1992, the building subject of the lease contract was burned down. Because of the destruction
of the building, respondent, on May 29, 1992, sent a letter to petitioners demanding the accumulated
rentals for the leased property from March 17, 1989 to June 17, 1992 totaling P78,000.00. As the demand
was left unheeded, respondent filed a complaint for collection of rentals plus damages before the Molave

Issue: Whether or not the petitioners liable to pay respondent for back rentals?

Held: The Supreme Court upheld the ruling of the trial court, in finding the Spouses Cortez liable to pay
Meliton back rentals.
The parties have entered into a contract of lease with modifications on the mode of payment, that instead
of paying the rent in the form of money, petitioners will withhold such payment and will apply the
accumulated rent to the cost of the building they built on the leased property. Thereafter, at the end of the
lease period or until such time the cost of the building has been fully covered by the rent accumulated,
petitioners, as lessees will transfer the ownership of said building to respondent. There is no dispute that
petitioners used the property for several years for their own benefit having operated a restaurant thereon.
Therefore, it would be the height of injustice to deprive respondent of compensation due him on the use
of his property by petitioners

Thus the ruling of trial court is upheld that Spouses Cortez in accordance to the law, are still liable to
deliver the building to respondent

Since they can no longer deliver the building which the contract obliged them to deliver, they are legally
obliged to pay the rentals for their use and enjoyment of the leased premises to prevent unjust
enrichment on the part of petitioners. The Spouses should pay rentals on the time they have used the
property. Thus the payment of the rent shall encompass only the time of the occupation of the property
and since no evidence was produced that at the time the building on the property was burned that the lots
were used no rental fees shall be collected at the time of the destruction of the property.