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EFREN S. QUESADA, ET AL. vs. BONANZA RESTAURANTS, INC.

G.R. No.207500, November 14, 2016, J. Brion

A lease contract is onerous in character containing reciprocal


obligations; any ambiguities in its terms are interpreted in favor of the
greatest reciprocity of interests.

Facts:

Respondent Bonanza Restaurant, Inc. (Bonanza) is the registered


owner of a property situated in EDSA, Balintawak, Quezon City (subject lot).
Efren was Bonanza's General Property Manager while his brother, Miguel
Quesada, was the Company President. Bonanza, represented by Miguel,
allegedly leased the subject lot to Efren. The lease was supposedly " effective
July 1, 2003 until such time that it is replaced or amended by another
resolution agreement" and "effective until such time that the parcel of land is
sold." Using the contract of lease, Efren entered into various subleases with
third parties (the sublessees).

Later, Bonanza rescinded the lease contract and formally demanded


the return of the subject lot. Bonanza then filed a complaint for unlawful
detainer against Efren and his sublessees. The complaint alleged that Efren
constructed concrete structures on the subject lot - in bad faith and without
its knowledge or consent - to prolong his enjoyment of the lot, and that Efren
had been forestalling the sale of the subject lot.

The MeTC dismissed the complaint for prematurity after finding that
Bonanza had no cause of action yet against Efren and his sublessees. The
MeTC further observed that Bonanza's unilateral rescission of the lease was
unjustified because the contract did not grant it the power to unilaterally or
extrajudicially rescind the agreement. The RTC later reversed the MeTC
decision, ejecting Efren and his sublessees from the property. The CA affirmed
the RTCs ruling.

Issues:

1) Whether Bonanza had basis to unilaterally terminate the lease.


2) Whether the lease period had already expired.
3) Whether there was a ground for summary ejectment.

Ruling:

1) Bonanza had no basis to unilaterally terminate the lease. Bonanza's


complaint theorized that by constructing concrete structures on the property
without Bonanza's permission, Efren effectively forestalled the sale of the
property, constructively fulfilling the resolutory condition of the lease.
However, aside from the fact that there is no logical connection between the
construction of concrete structures on the property and Bonanza's inability to
sell it, the lease contract itself specifically recognized the lessee's right to
construct on the property.
Bonanza's approval is only relevant with respect to Efren's right to the
turnover of materials used upon the sale of the property. Other than that, the
contract does not oblige Efren to secure Bonanza's consent prior to
constructing improvements. Bonanza failed to show how any of Efren's
constructions go against the permissible use of the property based on its
nature.

2) The lease period had not yet expired.

There is also no merit in Bonanza's contention that the contract which


was "effective July 1, 2003 and until such time that it is replaced or amended
by another resolution" had expired because the Board of Directors had
already issued a board resolution terminating the lease. Bonanza interprets
the term "resolution" to mean a board resolution from Bonanza. This
erroneous interpretation is offensive to the mutuality and obligatory force of
contracts.

A lease contract is onerous in character containing reciprocal


obligations; any ambiguities in its terms are interpreted in favor of the
greatest reciprocity of interests. Accordingly, "resolution" or "resolution
agreement" should be interpreted to mean a subsequent agreement between
the lessor and the lessee instead of a unilateral resolution from the lessor's
board of directors.

3) There was no ground for summary ejectment. Under Article 1673 of the
Civil Code, the lessor may judicially eject the lessee for any of the following
causes: a) When the period agreed upon, or that which is fixed for the
duration of leases under articles 1682 and 1687, has expired; b) Lack of
payment of the price stipulated; c) Violation of any of the conditions agreed
upon in the contract; and d) When the lessee devotes the thing leased to any
use or service not stipulated which causes the deterioration thereof. None of
the foregoing causes are present in this case.

First, the contract did not specifically fix the period of the obligation.
Second, the complaint did not allege that Efren had been remiss in the
payment of the stipulated rent. Third, Bonanza failed to establish that Efren
committed a substantial breach that would warrant the rescission of the
contract. Lastly, Bonanza failed to show that Efren had dedicated the
property to a use that is contrary to its commercial nature and that caused its
deterioration.

HEIRS OF TEODORO CADELINA, REPRESENTED BY SOLEDAD CADIZ


VDA. DE CADELINA vs. FRANCISCO CADIZ, ET AL.
G.R. No. 194417, November 23, 2016, J. Jardeleza

Tenancy relationship can only be created with the consent of the true
and lawful landowner who is the owner, lessee, usufructuary or legal
possessor of the land. It cannot be created by the act of a supposed
landowner, who has no right to the land subject of the tenancy, much less by
one who has been dispossessed of the same by final judgment.

Facts:

Respondents filed complaints for reinstatement of possession as


farmer tenants against petitioners with the DARAB-Region 2, San Fermin,
Cauayan, Isabela. Respondents alleged that they were the farmers/tillers of
portions of Lot No. 7050 (properties), since 1962 until around the end of 1998
when they were deprived of their respective possessions, occupations and
tillage of the properties due to a CA Decision ordering the transfer of the
properties from Nicanor Ibuna, Sr. to Teodoro Cadelia and his heirs,
petitioners herein.

Petitioners moved to dismiss the complaint on the ground that


respondents cannot be considered as tenants under land reform law because
they were instituted Ibuna, whose rights were previously declared by the
court illegal and unlawful.

The DARAB ruled in favor of respondents and declared Ibuna as legal


possessor of the properties who had the right to institute respondents as
tenants of the properties. The DARAB said that while the title of the Ibuna
was subsequently declared null and void by the CA in another case, he is
deemed as legal possessor of the subject land and as such, he has the right
to grant to the plaintiffs the cultivation of the land pursuant to Section 6 of RA
3844 (Agricultural Land Reform Code). The CA affirmed the DARABs ruling.

Issues:

Whether there is an agricultural tenancy relationship between


petitioners and respondents.

Ruling:

There is no agricultural tenancy relationship between petitioners and


respondents.

Tenancy relationship can only be created with the consent of the true
and lawful landowner who is the owner, lessee, usufructuary or legal
possessor of the land. It cannot be created by the act of a supposed
landowner, who has no right to the land subject of the tenancy, much less by
one who has been dispossessed of the same by final judgement.

In this case, Ibuna's institution of respondents as tenants did not give


rise to a tenure relationship because Ibuna is not the lawful landowner, either
in the concept of an owner or a legal possessor, of the properties. It is
undisputed that prior to the filing of the complaint with the DARAB, the
transfers of the properties to Ibuna and his predecessor, Andres Castillo, were
declared void in separate and previous proceedings. Since the transfers were
void, it vested no rights whatsoever in favor of Ibuna, either of ownership and
possession. It is also for this reason that the DARAB erred in declaring Ibuna
as a legal possessor who may furnish a landholding to respondents. That
which is inexistent cannot give life to anything at all.