Case Digest (G.R. No. 169438)
Facts:
Romeo D. Mariano v. Petron Corporation, G.R. No. 169438, January 21, 2010, the Supreme Court Second Division, Carpio, J., writing for the Court. Petitioner Romeo D. Mariano challenged Petron Corporation’s continued possession of a leased parcel in Tagaytay City after he acquired the fee title from the lessors.On 5 November 1968 the Aure Group (Pacita V. Aure, Nicomedes Aure Bundac, and Zeny Abundo) leased a 2,064 sqm parcel to ESSO Standard Eastern, Inc. (ESSO Eastern) for 90 years; the contract contained an assignment veto clause barring assignment without the lessor’s consent, but allowed certain intra-group assignments. ESSO Eastern transacted in the Philippines through its local subsidiary ESSO Standard Philippines, Inc. (ESSO Philippines), which took possession of the Property. The lease was notarized on 13 November 1968 and nominally ended in 2058.
On 23 December 1977 PNOC acquired ESSO Philippines from ESSO Eastern. The Aure Group was apparently not informed. ESSO Philippines later changed corporate names to Petrophil Corporation and then to Petron Corporation (Petron). On 18 November 1993 petitioner bought the Property from the Aure Group and obtained title annotated with ESSO Eastern’s lease. On 17 December 1998 petitioner served a notice to vacate, asserting that PD 471 reduced alien leases to 25 years (thus ending in 1993). Petron remained in possession.
Petitioner sued Petron in the Regional Trial Court (RTC), Tagaytay City, Branch 18, on 18 March 1999 to rescind the lease and recover possession, alleging alternatively that ESSO Eastern’s sale to PNOC effected an unconsented assignment that terminated the Contract. Petron answered that PNOC had only acquired shares in ESSO Philippines (a separate corporation) and that petitioner’s claim was time-barred under Articles cited in the Civil Code. To avoid trial, the parties filed a Joint Motion for Judgment that included the stipulation: “On December 23, 1977, the Philippine National Oil Co. (PNOC) ... acquired ownership of ESSO Standard Philippines, Inc., including its leasehold right over the land in question, through the acquisition of its shares of stocks.”
The RTC, in a Decision dated 30 May 2000, rescinded the Contract, ordered Petron to vacate, and cancelled the lease annotation; it concluded ESSO Eastern’s sale to PNOC included assignment of the lease, which—being unconsented—terminated the Contract, but that the lessors’ receipt of rent created an implied new lease terminating upon petitioner’s 1998 notice to vacate. Petron appealed.
The Court of Appeals (CA), in a Decision dated 29 October 2004, reversed the RTC: it treated ESSO Philippines as a separate corporate entity and held the lease subsisting u...(Subscriber-Only)
Issues:
- Did ESSO Eastern’s sale to PNOC result in the assignment of the leasehold right and thereby breach the lease contract?
- If there was a breach, did the lessor’s continued acceptance of rent waive the right to eject and render the original lease subsisting?
- Is petitioner’s action for rescission and recovery of possessi...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)