INOCENCIO v. HOSPICIO DE SAN JOSE | GR No.
201787 | sometime in 1990 revealed that it already knew
Carpio, J. || by Jasper
FACTS:
● In 1946, Hospicio de San Jose (HDSJ) leased a
parcel of land in Pasay City to German Inocencio.
Said lease was effective for 1 year but was
renewed several times for 1-year periods, the last
of which was executed on May 31, 1951, and
which provided that the contract was
nontransferable unless prior consent of the lessor
is obtained in writing. In 1946, German
constructed 2 buildings on the land which he
subleased. He also designated his son, Ramon, to
administer the property.
● In 1997, German passed away but Ramon did not
notify HDSJ of said death. Ramon thereafter
collected the rentals from the sublessees and paid
the rentals to HDSJ and the taxes on said property.
In 2001, HDSJ’s property administrator, Five Star
Multi-Services, Inc., notified Ramon of the
termination of the lease contract effective March
31, 2001. In said notice, Five Star stated that due
to the acceptance of HDSJ of the rental payments
despite German’s death, an implied contract of
lease existed between Ramon and HDSJ, but that
the same is merely on a monthly basis since no
period was stipulated. Hence, the contract was to
expire at the end of the said month.
● Ramon sent a letter suggesting a renegotiation of
the contract for the welfare of the sublessees. In
its reply, HDSJ rejected the suggestion since Ramon
has continually subleased the property to about 20
families and a commercial establishment, without
its knowledge and consent. Thereafter, HDSJ
refused to accept Ramon’s tender of rental
payments.
● On March 3, 2005, HDSJ sent a letter reiterating its
stand that the contract was terminated effective
March 31, 2001 and that he should vacate the
premises in 30 days, as well as pay 756k as
unrealized fruits. It also sent written notices to
vacate to the sublesees and stated that it was
willing to work out an amicable settlement with
them. Hence, some sublessees refused to pay
rentals to Ramon. HDSJ also entered into lease
contracts with: 1) Harish Chetandas, 2) Enrique
Negare, 3) Lamberto Estefa, and 4) Sofronio
Chavez, Jr.
● On June 28, 2005, HDSJ filed a complaint for
unlawful detainer against Ramon and the
sublessees before the MeTC of Pasay, alleging that
the latter have been illegally occupying the leased
premises since March 31, 2001.
● In his Answer, Ramon claimed, among other things,
that HDSJ should be estopped from raising the
issue of non-transferability of the lease contract
since it admitted in its letter that there is an
existing lease agreement between them, even
after German’s death; that there was no
prohibition against subleasing in the contract; and
that the letter sent by HDSJ to the Inocencios
that the premises were being subleased. (Ramon
died while the case was pending in the MeTC, and
was substituted by his wife Analita).
● MeTC: Ruled in favor of HDSJ, since the lease
cannot be transferred to Ramon as German’s heir
in view of the express stipulation therein. Since
there is no lease contract between Ramon and
HDSJ, the former cannot sublease the property.
RTC: Dismissed Analita’s appeal and affirmed MeTC
in toto. It held that even before the termination of
the contract, Ramon had no right to sublease the
property due to the non-transferability clause. MR
denied. CA: Affirmed the RTC but modified the
award for damages.
ISSUES/RATIO:
1. WoN the sublease contracts were invalid – N
a. Lease contracts are, by their nature, not
personal. Therefore, lease contracts
survive the death of the parties and
continue to bind the heirs except when
the rights and obligations arising
therefrom are not transmissible by: 1)
their nature, 2) stipulation or 3) provision
of law.
b. Sec. 6 of the lease contract provides that
“this contract is nontransferable unless
prior consent of the lessor is obtained in
writing”. Such refers to transfers inter
vivos and not transmissions mortis causa.
What Sec. 6 seeks to avoid is for the
lessee to substitute a 3rd party in place of
the lessee without the lessor’s consent,
reiterating Art. 1649, CC.
c. In any case, HDSJ acknowledged that
Ramon is its monthly lessee. Thus,
German’s death did not terminate the
lease contract. Instead, it continued with
Ramon as the lessee, which HDSJ
recognized.
d. Sec. 6 of the contract requires the written
consent of the lessor before the lease may
be assigned or transferred. An assignment
or transfer (Art. 1649) is different from a
sublease arrangement (Art. 1650). In a
sublease, the lessee becomes in turn a
lessor to the sublessee. The sublessee
then becomes liable to pay rentals to the
original lessee. However, the juridical
relation between the lessor and lessee is
not dissolved. The parties continue to be
bound by the original lease contract.
Thus, in a sublease arrangement, there
are at least three parties and two distinct
juridical relations.
e. Ramon had a right to sublease the
premises since the lease contract did not
contain any stipulation forbidding
subleasing. Therefore, we hold that the
sublease contracts executed by Ramon
were valid.
2. WON there was tortious interference on part of
HDSJ – HDSJ did not commit tortious interference
 a. Art. 1314. Any third person who induces
another to violate his contract shall be
liable for damages to the other
contracting party.
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
case.
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.
RULING: WHEREFORE, the petition is PARTLY GRANTED.
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.