INOCENCIO v. HOSPICIO DE SAN JOSE | GR No.
201787 was pending in the MeTC, and was substituted by
|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 sometime in 1990
revealed that it already knew that the premises
were being subleased. (Ramon died while the case
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.