G.R. No. 11045 - Tolentino vs. Paraiso

The case involves plaintiff Alberto E. Malicsi and defendant Rosalia A. Carpizo, administratrix of the estate of Tan Cuan.
The dispute centers on a Contract of Lease entered into on April 6, 1951, between the plaintiff and the then-owner, the late Tan Cuan.
The leased premises covered a portion of Lot No. P. L. 6, Plan 11-10173, Case 7880, situated in Zamboanga City, comprising approximately 180 square meters and valued at P5,400.00.

The lease was for a period of seventeen (17) years.
The monthly rental was fixed at P200.00, payable on the 10th day of each succeeding month.
The contract was documented with specific references (Annex ‘A’ in the complaint and Exhibit ‘A’ as identification for evidentiary purposes).

After the death of Tan Cuan in May 1955, defendant, in her capacity as administratrix, continued making intermittent rental payments.
For the months of January and February 1958, the plaintiff alleged that defendant defaulted on her obligation by failing to pay the stipulated monthly rental.
Plaintiff consequently incurred attorney’s fees amounting to P500.00 to enforce his rights under the lease agreement.

On March 19, 1958, the plaintiff filed the complaint in the Court of First Instance of Zamboanga City (Civil Case No. 717), seeking:

Cancellation (rescission) of the Contract of Lease.
An order directing the defendant to vacate the premises.
Payment of the accrued rental due for January and February 1958 (P400.00) with interest.
Continuing rental payments at the rate of P200.00 until the premises are vacated.
Reimbursement of attorney’s fees and costs.

Defendant answered the complaint, admitting the existence of the lease but contending that:

She had paid the rental in advance (claiming receipt of at least P700.00 through rental collections at a restaurant at the rate of P70.00 for ten months).
Funds of the estate were deposited with the Clerk of Court of Zamboanga City, which were inaccessible due to a pending certiorari case filed by Tan Gin San.

During trial, the plaintiff presented documentary evidence (Exhibits ‘A’, ‘B’, ‘C’, ‘C-1’, ‘C-2’, and ‘C-3’) and testimony establishing defendant’s default.

On March 16, 1960, the lower court rendered a decision in favor of the plaintiff, which included:

Declaring the lease contract as cancelled (rescinded) due to defendant’s failure to pay the stipulated rentals for January and February 1958.
Ordering the defendant to vacate the premises within 30 days.
Directing the defendant to settle the accrued rental with 6% interest, continue paying rentals at P200.00 per month until vacating, reimburse attorney’s fees of P500.00, and bear the cost of the proceedings.

The counterclaim filed by the defendant was dismissed.
Defendant’s motion for reconsideration was denied, prompting her to appeal directly to the Supreme Court.

The trial court erred in rescinding the lease contract, arguing that a lease is not one of the contracts subject to rescission under Article 1381 of the Civil Code.
There was no default in the payment of rental since no formal demand for payment was made.
The claim for unpaid rentals was one for money arising out of an express contract and should have been filed against the estate of the late Tan Cuan.

Under Article 1659 of the Civil Code, in case of non-payment of rent, the lessor is entitled to rescind the contract.
The remedy of rescission, in conjunction with claims for unpaid rentals and recovery of possession, was rightly pursued.
Section 1, Rule 88 of the Rules of Court allows such action against an administratrix, especially when the claim involves both rescission and recovery of property and not just a simple monetary claim.
Only rentals accruing before the death of Tan Cuan could be filed against his estate, while rentals accruing after his death (with the default starting in January 1958) fall within the scope of the action.

Whether the trial court committed reversible error in declaring the Contract of Lease rescinded based on the defendant’s failure to pay the stipulated monthly rentals for January and February 1958.
Whether a lease contract, as provided under the Civil Code, may be rescinded in the instance of non-payment by the lessee in accordance with Article 1659.
Whether the claim for unpaid rental payments should properly be filed against the estate of the decedent or whether it falls within an action that can be brought against the administratrix.
Whether the factual finding that defendant defaulted on her rental payments—despite her contention of having paid in advance—is binding and conclusive.