Case Summary (G.R. No. L-1802)
War, Occupation, and Nonpayment
In December 1941 Japanese troops seized the leased premises as a sentry post. Caltex’s American officers were interned, and operations ceased until liberation. Upon return in 1945 Caltex tendered rent from February only, leaving rent unpaid from January 1942 to January 1945.
Procedural History
Reyes sued in the Court of First Instance of Rizal to annul the lease and recover ₱6,900. The trial court dismissed the suit, applying Civil Code Articles 1554 and 1575. Reyes appealed.
Legal Issue
Whether the Japanese occupation and resulting impossibility of business operation relieved the lessee from paying rent or entitled it to equitable rent reduction.
Applicable Civil Code Provisions
Article 1554 imposes on the lessor the duty to deliver and maintain peaceful enjoyment. Article 1560 exempts the lessor from liability for “mere fact of a trespass” by third parties acting under a right. Article 1575 grants rent reduction only for agricultural leases losing over half the fruits by extraordinary events.
Doctrine of Perturbation de Mero Hecho vs. de Derecho
The Court adopted the distinction:
– Perturbation de mero hecho: material disturbance by third parties without assertion of right; lessor not liable.
– Perturbation de derecho: disturbance by exercise of legal right or title; lessor must secure lessee’s peaceful enjoyment.
Majority Analysis
The premises were not agricultural; Article 1575 did not apply. The Japanese occupation amounted to a fortuitous, material disturbance without assertion of rival title, i.e., perturbation de mero hecho under Article 1560. Lessor bore no blame and lessee’s remedy lay against the occupiers.
Contractual Impossibility and Fortuitous Events
Under general contract law and Civil Code principles, impossibility in fact—arising from unforeseen war—does not discharge express obligations unless the subject matter itself perishes. Casual losses from war-time commandeering do not void a covenant to pay rent.
Application and Judgment
Caltex’s failure to pay rent during occupation was a risk inherent in its covenant and not gro
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Relevant Facts
- On December 23, 1940, Toribio Reyes (lessor) and Caltex (Philippines) Inc. (lessee) executed a ten-year lease, renewable for another ten years, covering two parcels in Baclaran, Paranaque, Rizal.
- Agreed monthly rent: ₱120.00 for the first ten years, ₱150.00 if renewed; payable in advance within the first ten days of each month.
- Paragraph 6 of the lease allowed the lessee to terminate upon 30 days’ written notice if business became unduly burdensome, with prorated rent.
- December 1941: Japanese forces seized and occupied the premises as a sentry post; Caltex’s American officers were interned and the station closed for the duration of the occupation.
- Upon liberation (February 1945), Caltex resumed operations and tendered rent from that date forward, but had not paid rent from January 1942.
- Lessor sued in the Court of First Instance of Rizal to annul the lease and recover ₱6,900.00 in unpaid rent. The trial court ruled in favor of the lessee, applying Articles 1554 and 1575 of the Civil Code.
Legal Issues
- Whether the lessee’s failure to pay rent during Japanese occupation constitutes a valid defense under:
· Article 1554 (lessor’s obligation to maintain peaceful enjoyment)
· Article 1560 (no liability of lessor for “mere fact of trespass” by third persons)
· Article 1575 (rent reduction in agricultural leases for extraordinary events) - Whether the invasion and military occupancy amount to a “perturbación de mero hecho” excusing nonpayment, or an obstruction entitling the les