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201787 was pending in the MeTC, and was substituted by

|Carpio, J. || by Jasper his wife Analita).
● MeTC: Ruled in favor of HDSJ, since the lease cannot
FACTS: be transferred to Ramon as German’s heir in view
● In 1946, Hospicio de San Jose (HDSJ) leased a parcel of the express stipulation therein. Since there is no
of land in Pasay City to German Inocencio. Said lease contract between Ramon and HDSJ, the
lease was effective for 1 year but was renewed former cannot sublease the property. RTC:
several times for 1-year periods, the last of which Dismissed Analita’s appeal and affirmed MeTC in
was executed on May 31, 1951, and which provided toto. It held that even before the termination of the
that the contract was nontransferable unless prior contract, Ramon had no right to sublease the
consent of the lessor is obtained in writing. In 1946, property due to the non-transferability clause. MR
German constructed 2 buildings on the land which denied. CA: Affirmed the RTC but modified the
he subleased. He also designated his son, Ramon, award for damages.
to administer the property. ISSUES/RATIO:
● In 1997, German passed away but Ramon did not 1. WoN the sublease contracts were invalid – N
notify HDSJ of said death. Ramon thereafter a. Lease contracts are, by their nature, not
collected the rentals from the sublessees and paid personal. Therefore, lease contracts
the rentals to HDSJ and the taxes on said property. survive the death of the parties and
In 2001, HDSJ’s property administrator, Five Star continue to bind the heirs except when the
Multi-Services, Inc., notified Ramon of the rights and obligations arising therefrom
termination of the lease contract effective March are not transmissible by: 1) their nature, 2)
31, 2001. In said notice, Five Star stated that due to stipulation or 3) provision of law.
the acceptance of HDSJ of the rental payments b. Sec. 6 of the lease contract provides that
despite German’s death, an implied contract of “this contract is nontransferable unless
lease existed between Ramon and HDSJ, but that prior consent of the lessor is obtained in
the same is merely on a monthly basis since no writing”. Such refers to transfers inter
period was stipulated. Hence, the contract was to vivos and not transmissions mortis causa.
expire at the end of the said month. What Sec. 6 seeks to avoid is for the lessee
● Ramon sent a letter suggesting a renegotiation of to substitute a 3rd party in place of the
the contract for the welfare of the sublessees. In its lessee without the lessor’s consent,
reply, HDSJ rejected the suggestion since Ramon reiterating Art. 1649, CC.
has continually subleased the property to about 20 c. In any case, HDSJ acknowledged that
families and a commercial establishment, without Ramon is its monthly lessee. Thus,
its knowledge and consent. Thereafter, HDSJ German’s death did not terminate the
refused to accept Ramon’s tender of rental lease contract. Instead, it continued with
payments. Ramon as the lessee, which HDSJ
● On March 3, 2005, HDSJ sent a letter reiterating its recognized.
stand that the contract was terminated effective d. Sec. 6 of the contract requires the written
March 31, 2001 and that he should vacate the consent of the lessor before the lease may
premises in 30 days, as well as pay 756k as be assigned or transferred. An assignment
unrealized fruits. It also sent written notices to or transfer (Art. 1649) is different from a
vacate to the sublesees and stated that it was sublease arrangement (Art. 1650). In a
willing to work out an amicable settlement with sublease, the lessee becomes in turn a
them. Hence, some sublessees refused to pay lessor to the sublessee. The sublessee then
rentals to Ramon. HDSJ also entered into lease becomes liable to pay rentals to the
contracts with: 1) Harish Chetandas, 2) Enrique original lessee. However, the juridical
Negare, 3) Lamberto Estefa, and 4) Sofronio Chavez, relation between the lessor and lessee is
Jr. not dissolved. The parties continue to be
● On June 28, 2005, HDSJ filed a complaint for bound by the original lease contract. Thus,
unlawful detainer against Ramon and the in a sublease arrangement, there are at
sublessees before the MeTC of Pasay, alleging that least three parties and two distinct
the latter have been illegally occupying the leased juridical relations.
premises since March 31, 2001. e. Ramon had a right to sublease the
● In his Answer, Ramon claimed, among other things, premises since the lease contract did not
that HDSJ should be estopped from raising the issue contain any stipulation forbidding
of non-transferability of the lease contract since it subleasing. Therefore, we hold that the
admitted in its letter that there is an existing lease sublease contracts executed by Ramon
agreement between them, even after German’s were valid.
death; that there was no prohibition against 2. WON there was tortious interference on part of
subleasing in the contract; and that the letter sent HDSJ – HDSJ did not commit tortious interference
by HDSJ to the Inocencios sometime in 1990 a. Art. 1314. Any third person who induces
revealed that it already knew that the premises another to violate his contract shall be
were being subleased. (Ramon died while the case
liable for damages to the other contracting
b. tortious interference has the following
elements: (1) existence of a valid contract;
(2) knowledge on the part of the third
person of the existence of the contract;
and (3) interference of the third person
without legal justification or excuse.
c. The facts of the instant case show that
there were valid sublease contracts which
were known to HDSJ. However, we find
that the third element is lacking in this
d. The evidence shows that HDSJ entered
into agreements with Ramon’s former
sublessees for purely economic reasons
(payment of rentals). HDSJ had a right to
collect the rentals from the sublessees
upon termination of the lease contract. It
does not appear that HDSJ was motivated
by spite or ill will towards the Inocencios.
3. WoN the action for unlawful detainer is barred by
prescription – N
a. Sec. 1, Rule 70 provides that actions for
unlawful detainer must be filed “within 1
year after such unlawful deprivation or
withholding of possession.” In Republic v.
Sunvar Realty Dev’t Corp., the court held
that the 1-year period is not counted from
the expiration of the lease contract. The
reckoning period for determination of the
1-year period is the last demand on
defendant to vacate the real property,
because only upon the lapse thereof does
possession become unlawful.
b. HDSJ’s last demand was made on 3 March
2005, and it filed the complaint for
unlawful detainer on 28 June 2005. Thus,
the complaint was filed within the period
provided under the Rules of Court.
The Decision dated 12 January 2012 of the Court of Appeals
in CA-G.R. SP No. 117009 is AFFIRMED with modification.
The case is hereby REMANDED to the Metropolitan Trial
Court of Pasay, Branch 48, for determination of the value
or the improvements to be paid to the lnocencios, if
Hospicio de San Jose desires to keep the improvements.
Otherwise, the Inocencios shall be allowed to demolish the
buildings at their expense.