Case Summary (G.R. No. 167103)
Petitioner
Analita P. Inocencio, substituting for Ramon Inocencio (deceased), as lessee’s heir and sublessor.
Respondent
Hospicio de San José, lessor of the land, plaintiff in unlawful detainer.
Key Dates
• 1 March 1946 – Initial one-year lease executed; renewed through 31 May 1951.
• 21 September 1990 – HDSJ’s letter on rental increase timing.
• 1997 – Death of German Inocencio.
• 1 March 2001 – HDSJ’s notice terminating lease effective 31 March 2001.
• 28 June 2005 – Unlawful detainer complaint filed.
• 21 January 2009 – RTC-Pasay decision.
• 12 January 2012 – Court of Appeals decision.
• 25 September 2013 – Supreme Court resolution.
Applicable Law
1987 Philippine Constitution; Civil Code provisions on lease transmission (Art. 1311), assignment (Art. 1649), sublease (Art. 1650), improvements (Art. 1678), and tortious interference (Art. 1314); Rules of Court on prescription for unlawful detainer (Rule 70, Sec. 1).
Lease and Sublease Arrangements
German’s lease included a clause prohibiting transfer without HDSJ’s written consent. He constructed two buildings and subleased them to third parties. Ramon administered the property, paying HDSJ rentals and taxes after German’s death, without formal lease transfer.
Alleged Termination and Post-Death Conduct
HDSJ acknowledged in March 2001 an implied month-to-month lease with Ramon but refused renewal, citing unauthorized subleasing. Sublessees were notified to vacate; HDSJ contracted new tenants for the site. Ramon continued to collect from his sublessees, prompting HDSJ’s 2005 demand for possession and payment of unrealized fruits.
Unlawful Detainer Complaint
HDSJ filed for unlawful detainer in June 2005, seeking possession, reasonable compensation for use and occupation (Php 552,195.36 and Php 10,512 monthly), and attorney’s fees. Ramon (later Analita) answered, contesting contract transferability, validity of the Spanish lease, sublease prohibition, and HDSJ’s estoppel.
Lower Court Findings
The MeTC-Pasay (May 2008) and RTC-Pasay (January 2009) held the lease nontransmissible to Ramon due to the intransferability clause; declared subleases invalid; ordered ejectment and payment of damages and attorney’s fees. Analita’s motions for reconsideration and appeal to the Court of Appeals were denied.
Court of Appeals Decision
The CA affirmed the RTC’s ruling but reduced reasonable compensation to Php 504,576 for the period 2001–2005 at 6% interest, and maintained Php 10,512 monthly from April 2005 until possession, with interest adjustments.
Issues on Review
- Validity of sublease contracts.
- Existence of tortious interference by HDSJ.
- Ownership and leasing rights over the buildings.
- Entitlement to reasonable compensation and attorney’s fees.
- Prescription of the unlawful detainer action.
Contract Transmission Upon Death
Under Civil Code Art. 1311 and jurisprudence, leases survive death unless non-transmissibility is stipulated. The intransferability clause (Section 6) applies to inter vivos assignment only, not mortis causa transmission to heirs. HDSJ’s own acknowledgment of Ramon as lessee confirms continued lease binding.
Assignment versus Sublease
Assignment replaces the original lessee (Art. 1649); sublease involves a distinct contract between lessee and sublessee, preserving the original lease (Art. 1650). The contract contained no express prohibition against subleasing; hence Ramon lawfully sublet portions of the premises, remaining liable to HDSJ.
Validity of Sublease Contracts
The Supreme Court held sublease contracts valid for lack of express prohibition. HDSJ’s recognition of rental payments corroborates this right. The intransferability clause did not bar sublease but only assignment without consent.
Tortious Interference Claim
Tortious interference requires (1) valid contract, (2) knowledge, and (3) wrongful interference. HDSJ’s dealings with sublessees were economically motivated recovery of rents post-termination, not malicious interference. Consequently, no tortious interference occurred.
Ownership and Lease of Buildings
The Inocencios claimed separate ownership of the buildings and the right to lease them independently. H
...continue readingCase Syllabus (G.R. No. 167103)
Background Facts
- On March 1, 1946, Hospicio de San Jose (HDSJ) leased a parcel of land in Pasay City to German Inocencio under a one-year contract, renewed annually until the last written renewal on May 31, 1951.
- Section 6 of the Spanish-language lease prohibited any transfer or assignment without the lessor’s prior written consent.
- In 1946, German constructed two buildings on the leased land, subleased these structures, and designated his son Ramon Inocencio to administer the property.
- By letter dated September 21, 1990, HDSJ informed German that the rent increase would take effect in November 1990 instead of August, to allow adjustment with sublessees.
- German died in 1997; Ramon did not formally notify HDSJ, yet continued collecting sublease rentals, remitted payments to HDSJ, and paid property taxes.
- On March 1, 2001, HDSJ’s administrator notified Ramon that the original lease had expired on March 31, 2001, and that their dealings since German’s death constituted a month-to-month implied tenancy under Article 1687 of the Civil Code.
- Ramon requested lease renegotiation on March 12, 2001; on April 3, 2001, HDSJ refused renewal, citing Ramon’s unauthorized subletting of the premises to about twenty families and a commercial establishment without written consent.
- Thereafter, HDSJ refused further rental payments by Ramon, demanded P756,449.26 as unrealized fruits on March 3, 2005, and served 30-day vacation notices on Ramon and his sublessees, supported by a published Patalastas declaring the sublessees not legal occupants.
- Some sublessees withheld rent from Ramon; HDSJ entered into new lease contracts with four other tenants between April and May 2005.
- On June 28, 2005, HDSJ filed an unlawful detainer complaint before the Metropolitan Trial Court (MeTC) of Pasay, Branch 48, against Ramon (later substituted by Analita) and the sublessees, seeking actual damages for use and occupation, attorney’s fees, and ejectment.