Case Summary (G.R. No. L-2395)
Lease Agreement Background
On September 25, 1901, the Plaintiff leased land to Defendants Dy-Jia and Dy-Guico for five years, starting October 1, 1901, and concluding on September 30, 1906. According to Clause E of the lease, the lessees were prohibited from subletting or mortgaging the property, with violation resulting in automatic rescission of the lease.
Building Construction and Assignment of Interest
The lessees took possession and constructed a building valued at approximately 11,000 pesos. Defendants assert that Dy-Jia and Dy-Guico functioned as agents for Li Tsung Ling, the true owner of the leasehold and the building. Evidence includes written declarations from Dy-Guico and Dy-Jia, asserting that the building belonged to Li Tsung Ling and that he would pay rent.
Rent Payments and Claims of Violation
From November 1902 to January 1904, Li Tsung Ling paid the rent, with receipts issued in the names of Dy-Jia and Dy-Guico. The Plaintiff, however, contested this arrangement, claiming a lack of awareness about the transfer until January 8, 1904, when informed by Li Tsung Ling’s lawyer. Despite the claim of ignorance, the Plaintiff accepted rent directly from Li Tsung Ling on January 10, 1904, effectively acknowledging the assignment.
Legal Arguments and Court Findings
On January 16, 1904, the Plaintiff initiated legal proceedings to rescind the lease retroactively to November 12, 1902, and to regain ownership of the constructed buildings. The trial court ruled in favor of the Plaintiff, leading Li Tsung Ling to request a new trial, alleging the findings were unsupported by the evidence.
Assignment Validity and Lessor’s Consent
The court determined that a valid assignment of the leasehold interest could occur, provided the lessor's consent was acquired. Such consent does not need explicit expression; any action by the lessor acknowledging the relationship with the assignee suffices. When the Plaintiff accepted rent from Li Tsung Ling, this demonstrated acknowledgment of the assignment and thus consent, precluding the enforcement of lease termination for violating Clause E.
Defendant's Counterclaim
Li Tsung Ling additionally sought a re
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Case Overview
- The case involves a lease agreement between Doroteo Cortes (the plaintiff) and Dy-Jia and Dy-Guico (the defendants) concerning a tract of land in Manila.
- The lease was for five years, starting from October 1, 1901, and ending on September 30, 1906.
- Clause E of the lease contract explicitly prohibited the lessees from subleasing the property or mortgaging any buildings constructed on it, with a stipulation that such actions would result in the contract being considered terminated.
Lease Agreement Details
- The plaintiff leased the property to the defendants, who subsequently constructed a building on the land at a cost of approximately 11,000 pesos.
- Dy-Jia and Dy-Guico were alleged by the defendant Li Tsung Ling to be mere agents of his in the lease agreement and construction of the building.
- Li Tsung Ling claimed ownership over the leasehold interest and the building.
Transfer of Lease Interest
- On December 31, 1902, Dy-Guico signed a declaration stating that the building belonged to Li Tsung Ling and that he would pay the rent due to Cortes.
- On May 18, 1903, Dy-Jia made a similar declaration, transferring his interest in the lease to Li Tsung Ling.
- From November 1902 to January 1904, Li Tsung Ling pa