Академический Документы
Профессиональный Документы
Культура Документы
LEASE
Transfer of Ownership; Non-Payment of the Price (1991)
Pablo sold his car to Alfonso who issued a postdated check
in full payment therefor. Before the maturity of the check, Extinguishment; Total Distruction; Leased Property (1993)
Alfonso sold the car to Gregorio who later sold it to Gabriel. A is the owner of a lot on which he constructed a building in
When presented for payment, the check issued by Alfonso the total cost of P10,000,000.00. Of that amount B
was dishonored by the drawee bank for the reason that he, CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-
Alfonso, had already closed his account even before he issued 2006)
his check. Pablo sued to recover the car from Gabriel alleging contributed P5,000,000.00 provided that the building as a phenomenon
that he (Pablo) had been unlawfully deprived of it by reason are still unpredictable despite the advances in
of Alfonso's deception. Will the suit prosper? whole would be leased to him (B) for a period of ten years
SUGGESTED ANSWER: from January 1. 1985 to December 31, 1995 at a rental of
No. The suit will not prosper because Pablo was not P100,000.00 a year. To such condition, A agreed. On
unlawfully deprived of the car although he was unlawfully December 20, 1990, the building was totally burned. Soon
deprived of the price. The perfection of the sale and the thereafter, A's workers cleared the debris and started
delivery of the car was enough to allow Alfonso to have a construction of a new building. B then served notice upon A
right of ownership over the car, which can be lawfully that he would occupy the building being constructed upon
transferred to Gregorio. Art. 559 applies only to a person completion, for the unexpired portion of the lease term,
who is in possession in good faith of the property, and not to explaining that he had spent partly for the construction of the
the owner thereof. Alfonso, in the problem, was the owner, building that was burned. A rejected B's demand. Did A has a
and, hence, Gabriel acquired the title to the car. right in rejecting B's demand?
Non-payment of the price in a contract of sale does not SUGGESTED ANSWER:
Yes. A was correct in rejecting the demand of B. As a result predicted. Since the exact place, the exact time, and the exact
of the total destruction of the building by fortuitous event, magnitude of the adverse effects of the "El Nino"
science, the phenomenon is considered unforeseen.
the lease was extinguished. (Art. 1655, Civil Code.)
Leasee & Lessor; Rights and Obligations (1990)
Implied New Lease (1999)
A vacant lot several blocks from the center of the town was
Under what circumstances would an implied new lease or a
leased by its owner to a young businessman B for a term of
tacita reconduccion arise? (2%) fifteen (15) years renewal upon agreement of the parties.
SUGGESTED ANSWER:
An implied new lease or tacita reconduccion arises if at the After taking possession of the lot, the lessee built thereon a
end of the contract the lessee should continue enjoying the building of mixed materials and a store. As the years passed,
thing leased for 15 days with the acquiescence of the lessor, he expanded his business, earning more profits. By the tenth
and unless a notice to the contrary by either parties has (10th) year of his possession, he was able to build a three
previously been given (Art. 1670). In short, in order that (3)-story building worth at least P300,000.00. Before the end
there may be tacita reconduccion there must be expiration of of the term of the lease, B negotiated with the landowner for
the contract; there must be continuation of possession for 15 its renewal, but despite their attempts to do so, they could not
days or more; and there must be no prior demand to vacate. agree on the new conditions for the renewal. Upon the
Lease of Rural Lands (2000) expiration of the term of the lease, the landowner asked B to
In 1995, Mark leased the rice land of Narding in Nueva Ecija vacate the premises and remove his building and other
for an annual rental of P1,000.00 per hectare. In 1998, due to improvements. B refused unless he was reimbursed for
the El Nino phenomenon, the rice harvest fell to only 40% necessary and useful expenses. B claimed that he was a
of the average harvest for the previous years. Mark asked possessor and builder in good faith, with right of retention.
Narding for a reduction of the rental to P500.00 per hectare This issue is now before the court for resolution in a pending
for that year but the latter refused. Is Mark legally entitled to litigation. a) What are the rights of B? b) What are the rights
such reduction? (2%) of the landowner?
SUGGESTED ANSWER:
SUGGESTED ANSWER:
No, Mark is not entitled to a reduction. Under Article 1680 of a) B has the right to remove the building and other
the Civil Code, the lessee of a rural land is entitled to a improvements unless the landowner decides to retain the
reduction of the rent only in case of loss of more than 1/2 of building at the time of the termination of the lease and pay
the fruits through extraordinary and unforeseen fortuitous the lessee one-half of the value of the improvements at that
events. While the drought brought about by the "El Nino" time. The lessee may remove the building even though the
phenomenon may be classified as extraordinary, it is not principal thing may suffer damage but B should not cause any
considered as unforeseen. more impairment upon the property leased than is necessary.
ALTERNATIVE ANSWER: The claim of B that he was a possessor and builder in good
Yes, Mark is entitled to a reduction of the rent. His loss was more faith with the right of retention is not tenable. B is not a
than 1/2 of the fruits and the loss was due to an extraordinary and builder in good faith because as lessee he does not claim
unforeseen fortuitous event. The "El Nino" phenomenon is ownership over the property leased.
extraordinary because it is uncommon; it does not occur with SUGGESTED ANSWER:
regularity. And neither could the parties have foreseen its b) The landowner/lessor may refuse to reimburse 1/2 of the
occurrence. The event should be foreseeable by the parties so that
the lessee can change the time for his planting, or refrain from value of the improvements and require the lessee to remove
planting, or take steps to avoid the loss. To be foreseeable, the time the improvements. [Article 1678, Civil Code),
and the place of the occurrence, as well as the magnitude of the Leasee; Death Thereof; Effects (1997)
adverse effects of the fortuitous event must be capable of being Stating briefly the thesis to support your answer to each of
the following cases, will the death - a) of the lessee extinguish faithfully paying the stipulated rentals to Victor. When Victor
the lease agreement? learned on May 18, 1992 about the sublease and assignment,
SUGGESTED ANSWER: he sued Joel, Conrad and Ernie for rescission of the contract
No. The death of the lessee will not extinguish the lease of lease and for damages.
agreement, since lease is not personal in character and the a) Will the action prosper? If so, against whom?
right is transmissible to the heirs. (Heirs of Dimaculangan vs. Explain. (2%)
IAC, 170 SCRA 393). SUGGESTED ANSWER:
Option to Buy; Expired (2001) Yes, the action of for rescission of the contract of lease and for
On January 1, 1980, Nestor leased the fishpond of Mario for damages will prosper. Under Article 1659 of the Civil Code, "if the
a period of three years at a monthly rental of P1,000.00, with lessor or the lessee should not comply with the obligations set forth
an option to purchase the same during the period of the lease in Articles 1654 and 1657, the aggrieved party may ask for rescission
for the price of P500,000.00. After the expiration of the of the contract and indemnification for damages, or only the latter,
allowing the contract to remain in force." Article 1649 of the same
three-year period, Mario allowed Nestor to remain in the
Code provides that "the lessee cannot assign the lease without the
leased premises at the same rental rate. On June 15, 1983, consent of the lessor, unless there is a stipulation to the contrary."
Nestor tendered the amount of P500,000.00 to Mario and Consent is necessary because assignment would cause novation by
demanded that the latter execute a deed of absolute sale of the substitution of one of the parties.
the fishpond in his favor. Mario refused, on the ground that (Bangayan v. Court of Appeals, G.R. No. 123581, August 29,
Nestor no longer had an option to buy the fishpond. 1997) However, the rule is different in the case of subleasing.
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990- When there is no express prohibition in the Contract of Lease,
2006) the lessee may sublet the thing leased. (Art. 1650, Civil Code)
Nestor filed an action for specific performance. Will the sublessee can In the given case, when Joel assigned the lease to Ernie, the
invoke no right superior to that of his same was done without the consent of Victor. The assignment
action prosper or not? Why? (5%) is void. However, there is no indication that in the written
SUGGESTED ANSWER:
contract of lease between Victor and Joel, that subleasing the
No, the action will not prosper. The implied renewal of the premises is prohibited. Hence, the sublease of Joel with
lease on a month-to-month basis did not have the effect of Conrad is valid. In view of the foregoing, Victor can file the
extending the life of the option to purchase which expired at case of rescission and damages only against Joel and Ernie but
the end of the original lease period. The lessor is correct in he cannot include Conrad.
refusing to sell on the ground that the option had expired.
b) In case of rescission, discuss the rights and
Sublease vs. Assignment of Lease; Rescission of obligations of the parties. (2%)
Contract SUGGESTED ANSWER:
(2005) Rescission of the lease necessarily requires the return of the thing
Under a written contract dated December 1, 1989, Victor to the lessor. Hence, the judgment granting rescission of the
leased his land to Joel for a period of five (5) years at a contract should also order the lessee to vacate and return the
monthly rental of Pl,000.00, to be increased to Pl,200.00 and leased premises to the lessor. However, since the
sublessor, the moment the sublessor is duly ousted from the
Pl,500.00 on the third and fifth year, respectively. On January premises, the sublessee has no leg to stand on. The sublessee's
1, 1991, Joel subleased the land to Conrad for a period of right, if any, is to demand reparation for damages from his
two (2) years at a monthly rental of Pl,500.00. sublessor, should the latter be at fault.
On December 31, 1992, Joel assigned the lease to his (Heirs ofSevilla v. Court of Appeals G.R. No. 49823, February
compadre, Ernie, who acted on the belief that Joel was the 26, 1992).
rightful owner and possessor of the said lot. Joel has been Sublease; Delay in Payment of Rentals (1994)
In January 1993, Four-Gives Corporation leased the entire case he can judicially eject the tenant on the ground of lack of
twelve floors of the GQS Towers Complex, for a period of payment of the price stipulated after a demand to vacate,
ten years at a monthly rental of P3,000,000.00. There is a (Article 1673(2), New Civil Code),
provision in the contract that the monthly rentals should be c) No. Resolution of a contract will not be permitted for a
paid within the first five days of the month. For the month of slight or casual breach, but only for such substantial and
March, May, June, October and December 1993, the rentals fundamental breach as would defeat the very object of the
were not paid on time with some rentals being delayed up to parties in making the agreement.(Zepeda v. CA, 216 SCRA
ten days. The delay was due to the heavy paper work 293]. The delay of ten (10)) days is not such a substantial
involved in processing the checks. CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-
Four-Gives Corporation also subleased five of the twelve 2006)
floors to wholly-owned subsidiaries. The lease contract and fundamental breach to warrant the resolution of the A, and that he
expressly prohibits the assignment of the lease contract or has not been remiss in the payment of rent.
any portion thereof. The rental value of the building has contract of lease specially so when the delay was due to the
increased by 50% since its lease to Four-Gives Corporation. heavy paperwork in processing the checks.
1) Can the building owner eject Four-Gives Corporation on SUGGESTED ANSWER:
grounds of the repeated delays in the payment of the rent? 2} 2) a) No. Sublease is different from assignment of lease.
Can the building owner ask for the cancellation of the Sublease, not being prohibited by the contract of lease is
contract for violation of the provision against assignment? therefore allowed and cannot be invoked as a ground to
SUGGESTED ANSWERS: cancel the lease,
1) a) The "repeated delays" in the payment of rentals would, b) No, the lessor cannot have the lease cancelled for alleged
at best, be a slight or casual breach which does not furnish a violation of the provision against assignment. The lessee did
ground for ejectment especially because the delays were only not assign the lease, or any portion thereof, to the subsidiaries.
due to heavy paper work. Note that there was not even a It merely subleased some floors to its subsidiaries. Since the
demand for payment obviously because the delay lasted for problem does not state that the contract of lease contains a
only a few days (10 days being the longest), at the end of prohibition against sublease, the sublease is lawful, the rule
which time payments were presumably made and were being that in the absence of an express prohibition a lessee
accepted. There was, therefore, no default. Note also that may sublet the thing leased, in whole or in part, without
there was no demand made upon the lessee to vacate the prejudice to his/its responsibility to the lessor for the
premises for non-payment of the monthly rent. There is, performance of the contract.
therefore, no cause of action for ejectment arising from the Sublease; Sublessee; Liability (1999)
"repeated delays". May a lessee sublease the property leased without the consent
b) The building owner cannot eject Four-Gives Corporation of the lessor, and what are the respective liabilities of the
on the ground of repeated delays in the payment of rentals. lessee and sub-lessee to the lessor in case of such sublease?
The delay in the payment of the rentals is minimal and cannot (3%)
be made the basis of an ejectment suit. The delay was due to SUGGESTED ANSWER:
the heavy paperwork involved in processing the checks. It Yes, provided that there is no express prohibition against
would be otherwise if the lease contract stated that in the subleasing. Under the law, when in the contract of lease of
payment of rentals within the first five days of the month, time things there is no express prohibition, the lessee may sublet
is of the essence or that the lessee will be in delay if he falls to the thing leased without prejudice to his responsibility for the
pay within the agreed period without need of demand. In this performance of the contract toward the lessor. [Art, 1650) In
case there is a sublease of the premises being leased, the
sublessee is bound to the lessor for all the acts which refer to violated the terms and conditions of the lease agreement. If
the use and preservation of the thing leased in the manner you were the judge, how would you decide the case,
stipulated between the lessor and the lessee. (Art. 1651} The particularly with respect to the validity of:
sublessee is subsidiarily liable to the lessor for any rent due (a) B's sublease to C? and
from the lessee. However, the sublessee shall not be (b) C's assignment of the sublease to D?
responsible beyond the amount of the rent due from him. SUGGESTED ANSWER:
(Art. 1652) As to the lessee, the latter shall still be responsible (a) B's sublease to C is valid. Although the original period
to the lessor for the rents; bring to the knowledge of the lessor of two years for the lease contract has expired, the lease
every usurpation or untoward act which any third person may continued with the acquiescence of the lessor during the third
have committed or may be openly preparing to carry out upon year. Hence, there has been an implied renewal of the contract
the thing leased; advise the owner the need for all repairs; to of lease. Under Art. 1650 of the Civil Code, the lessee may
return the thing leased upon the termination of the lease just sublet the thing leased, in whole or in part, when the contract
as he received it, save what has been lost or impaired by the of lease does not contain any express prohibition. [Articles
lapse of time or by ordinary wear and tear or from an 1650, 1670 Civil Code). A's action for rescission should
inevitable cause; responsible for the deterioration or loss of not prosper on this ground.
the thing leased, unless he proves that it took place without his SUGGESTED ANSWER:
fault. (b) C's assignment of the sublease to D is not valid. Under
Sublease; Sublessee; Liability (2000) Art. 1649, of the Civil Code, the lessee cannot assign the lease
A leased his house to B with a condition that the leased premises without the consent of the lessor, unless there is a stipulation
shall be used for residential purposes only. B subleased the to the contrary. There is no such stipulation in the contract.
house to C who used it as a warehouse for fabrics. Upon learning If the law prohibits assignment of the lease without the
consent of the lessor, all the more would the assignment of a
this, A demanded that C stop using the house as a warehouse,
sublease be prohibited without such consent. This is a
but C ignored the demand, A then filed an action for ejectment
violation of the contract and is a valid ground for rescission
against C, who raised the defense that there is no privity of
by A.
contract between him and
Will the action prosper? (3%)
SUGGESTED ANSWER:
Yes, the action will prosper. Under Article 1651 of the Civil
Code, the sublessee is bound to the lessor for all acts which
refer to the use and preservation of the thing leased in the
manner stipulated between the lessor and the lessee.