Facts:

The case involves Gregorio Araneta, Inc. as the plaintiff and appellee, and Lyric Film Exchange, Inc. as the defendant and appellant. The events took place in the City of Manila, where the plaintiff owned a building that the defendant rented from February 1, 1929, until December 31, 1931, at a monthly rental of P1,500. The building was utilized as a cine theatre. In late May 1931, a piece of metal covering the walls fell, revealing that the wall was rotten and that the theatre was in a dangerously unsafe condition. The defendant reported this issue to the plaintiff, and the City Engineer subsequently ordered the theatre to be closed until necessary repairs were completed. The plaintiff promptly inspected the building and hired a contractor to carry out the repairs, which were completed within thirteen working days and within thirty days of receiving notice of the building's condition.

Upon being informed that the repairs were finished, the defendant formally notified t...

Facts:

1. Parties and Lease Agreement:

   • Plaintiff, Gregorio Araneta, Inc., owned a building in Manila leased to defendant, Lyric Film Exchange, Inc., for use as a cine theatre.
   • The lease ran from February 1, 1929, to December 31, 1931, at a monthly rental of P1,500.

2. Discovery of Building's Condition:

   • In May 1931, a piece of metal fell from the wall, revealing that the wall was rotten and the theatre was in a dangerously ruinous condition.
   • The City Engineer ordered the theatre closed until repairs were made.

3. Repairs and Notification:

   • Plaintiff promptly hired a contractor to repair the building, which took 13 working days and was completed within 30 days of receiving notice.
   • Defendant removed its equipment and machinery from the building and notified plaintiff that it considered the lease contract rescinded.

4. Legal Proceedings:

   • Plaintiff sued for unpaid rent for the unexpired portion of the lease (June 1, 1931, to December 31, 1931).
   • Defendant claimed the lease was rescinded due to the building's dangerous condition and filed a cross-complaint for damages.

Issue:

1. Whether the leased premises were in a dangerously ruinous condition, justifying defendant's rescission of the lease.
2. Whether defendant validly rescinded the lease contract, either expressly or by implication.
3. Whether plaintiff was obligated to keep the premises in a serviceable condition under the lease agreement and the Civil Code.
4. Whether defendant's counterclaim for damages due to loss of profits was valid.

Ruling:

1. Dangerous Condition of Premises:

   • The court found that the premises were indeed in a dangerously ruinous condition as of May 27, 1931, but this did not justify rescission of the lease.

2. Validity of Rescission:

   • The court ruled that defendant had no right to rescind the lease. Plaintiff fulfilled its obligation by promptly repairing the building within 30 days.

3. Obligations Under Lease and Civil Code:

   • Under Article 1558 of the Civil Code and the lease agreement, plaintiff was only required to make urgent repairs to keep the building serviceable. The repairs were completed within the allowable time, and the premises were not rendered uninhabitable.

4. Counterclaim for Damages:

   • The court rejected defendant's counterclaim for loss of profits, holding that plaintiff had no duty to constantly inspect the premises. Defendant, as the lessee, was responsible for notifying plaintiff of necessary repairs, which it did, and plaintiff promptly addressed the issue.

Ratio:

1. Lessor's Duty to Repair:

   • A lessor is only obligated to make urgent repairs necessary to keep the leased premises serviceable. The lessee must notify the lessor of such repairs, and the lessor must act promptly.

2. Rescission of Lease:

   • Rescission of a lease is only justified if the premises become uninhabitable or unfit for the intended purpose, and the lessor fails to make necessary repairs within a reasonable time.

3. Burden of Proof on Lessee:

   • The lessee bears the burden of proving that the lessor failed to fulfill its obligations under the lease or the Civil Code.

4. Counterclaims for Damages:

   • A lessee cannot claim damages for loss of profits if the lessor promptly addresses repair issues after being notified.