272 ALUDOS v SUERTE 8. CA: Rejected Lomises claim.

It found that the two agreements entered

G.R. No. 165285 | 18 June 2012 | J. Brion | TIGLAO by Suerte and the Lomises, one was for the assignment of leasehold
TOPIC: Rights and Obligations of Lessor and Lessee rights and the other was for the sale of improvements on the market
Note: Please refer to the previous digest insofar as equitable mortgage is stalls. Agreed with the RTC that the agreement was void for lack of
concerned. consent of the lessor.

DOCTRINE: Under Article 1649 of the Civil Code, [t]he lessee cannot assign the ISSUE/S: W/N the agreement was valid – NO
lease without the consent of the lessor, unless there is a stipulation to the
contrary. HELD/RULING:

ER: Lomises entered into an agreement with Suerte where the former would Both the RTC and the CA correctly declared that the assignment of the
transfer all improvements and rights over the two market stalls in Baguio. The leasehold rights over the two market stalls was void since it was made without
issue is whether or not the Lomises had the right to further assign the lease of the the consent of the lessor, the Baguio City Government, as required under Article
market stalls. Supreme Court ruled in the negative. It said that since the Lomises 1649 of the Civil Code. Neither party appears to have contested this ruling.
were mere lessees of the market stalls and that it was the Baguio City
Government that was the owner-lessor of the stalls, the lessee (Lomises) cannot Lomises, however, objects to the CA ruling upholding the validity of the
assign the lease without the Government’s consent, unless there is a stipulation agreement insofar as it involved the sale of improvements on the stalls. Lomises
to the contrary. As the permit issued to Lomises did not contain any provision alleges that the sale of the improvements should similarly be voided because it
that the lease of the market stalls could further be assigned, and in the absence was made without the consent of the Baguio City Government, the owner of
of the consent of the Baguio City Government to the agreement, it is void. the improvements, pursuant to the May 1, 1985 lease contract. Lomises further
claims that the stalls themselves are the only improvements on the property and
a transfer of the stalls cannot be made without transferring the leasehold rights.
FACTS: Hence, both the assignment of leasehold rights and the sale of improvements
1. Lomises acquired from Baguio City Government the right to occupy should be voided.
two stalls in the Hangar Market in Baguio City.
2. They entered into an agreement with respondent Suerte for the transfer
of all improvements and rights over the two market stalls. Suerte gave
a downpayment to the Lomieses as evidenced by a receipt.
3. Before full payment could have been made, the Lomises backed out
of the agreement and returned the money to Suerte.
4. Suerte protested the return of his money and insisted on the
continuation and enforcement of his agreement with the Lomises.
5. Suerte filed a complaint for specific performance with damages before
the RTC praying that the Lomises accept the balance and execute a
final deed of sale and/or transfer the improvements and rights over the
two market stalls in his favor.
6. RTC: Nullfied the agreement. It ruled that the Lomises were mere lessees
of the market stalls and it was the Baguio City Government that was
the owner-lessor of the stalls. Under Article 1649 of the Civil Code, [t]he
lessee cannot assign the lease without the consent of the lessor, unless
there is a stipulation to the contrary. As the permit issued to Lomises did
not contain any provision that the lease of the market stalls could further
be assigned, and in the absence of the consent of the Baguio City
Government to the agreement, the RTC declared the agreement
between Lomises and Johnny null and void.
7. Lomises appealed to the CA arguing that the real agreement between
the parties was merely a loan.