EFREN S. QUESADA, ET AL. vs. BONANZA RESTAURANTS, INC.

G.R. No.207500, November 14, 2016, J. Brion

A lease contract is onerous in character containing reciprocal obligations; any

ambiguities in its terms are interpreted in favor of the greatest reciprocity of interests.

Facts:

Respondent Bonanza Restaurant, Inc. (Bonanza) is the registered owner of a

property situated in EDSA, Balintawak, Quezon City (subject lot). Efren was Bonanza's
General Property Manager while his brother, Miguel Quesada, was the Company President.
Bonanza, represented by Miguel, allegedly leased the subject lot to Efren. The lease was
supposedly "effective July 1, 2003 until such time that it is replaced or amended by another
resolution agreement" and "effective until such time that the parcel of land is sold." Using
the contract of lease, Efren entered into various subleases with third parties (the
sublessees).

Later, Bonanza rescinded the lease contract and formally demanded the return of
the subject lot. Bonanza then filed a complaint for unlawful detainer against Efren and his
sublessees. The complaint alleged that Efren constructed concrete structures on the subject
lot - in bad faith and without its knowledge or consent - to prolong his enjoyment of the
lot, and that Efren had been forestalling the sale of the subject lot.

The MeTC dismissed the complaint for prematurity after finding that Bonanza had
no cause of action yet against Efren and his sublessees. The MeTC further observed that
Bonanza's unilateral rescission of the lease was unjustified because the contract did not
grant it the power to unilaterally or extrajudicially rescind the agreement. The RTC later
reversed the MeTC decision, ejecting Efren and his sublessees from the property. The CA
affirmed the RTCs ruling.

Issues:

1) Whether Bonanza had basis to unilaterally terminate the lease.

2) Whether the lease period had already expired.
3) Whether there was a ground for summary ejectment.

Ruling:

1) Bonanza had no basis to unilaterally terminate the lease. Bonanza's complaint

theorized that by constructing concrete structures on the property without Bonanza's
permission, Efren effectively forestalled the sale of the property, constructively fulfilling the
resolutory condition of the lease. However, aside from the fact that there is no logical
connection between the construction of concrete structures on the property and Bonanza's
inability to sell it, the lease contract itself specifically recognized the lessee's right to
construct on the property.

Bonanza's approval is only relevant with respect to Efren's right to the turnover of
materials used upon the sale of the property. Other than that, the contract does not oblige
Efren to secure Bonanza's consent prior to constructing improvements. Bonanza failed to
show how any of Efren's constructions go against the permissible use of the property based
on its nature.

2) The lease period had not yet expired.

There is also no merit in Bonanza's contention that the contract which was
"effective July 1, 2003 and until such time that it is replaced or amended by another
resolution" had expired because the Board of Directors had already issued a board
resolution terminating the lease. Bonanza interprets the term "resolution" to mean a board
resolution from Bonanza. This erroneous interpretation is offensive to the mutuality and
obligatory force of contracts.

A lease contract is onerous in character containing reciprocal obligations; any

ambiguities in its terms are interpreted in favor of the greatest reciprocity of interests.
Accordingly, "resolution" or "resolution agreement" should be interpreted to mean a
subsequent agreement between the lessor and the lessee instead of a unilateral resolution
from the lessor's board of directors.

3) There was no ground for summary ejectment. Under Article 1673 of the Civil Code,
the lessor may judicially eject the lessee for any of the following causes: a) When the period
agreed upon, or that which is fixed for the duration of leases under articles 1682 and 1687,
has expired; b) Lack of payment of the price stipulated; c) Violation of any of the conditions
agreed upon in the contract; and d) When the lessee devotes the thing leased to any use or
service not stipulated which causes the deterioration thereof. None of the foregoing causes
are present in this case.

First, the contract did not specifically fix the period of the obligation. Second, the
complaint did not allege that Efren had been remiss in the payment of the stipulated rent.
Third, Bonanza failed to establish that Efren committed a substantial breach that would
warrant the rescission of the contract. Lastly, Bonanza failed to show that Efren had
dedicated the property to a use that is contrary to its commercial nature and that caused its
deterioration.

HEIRS OF TEODORO CADELINA, REPRESENTED BY SOLEDAD CADIZ VDA. DE

CADELINA vs. FRANCISCO CADIZ, ET AL.
G.R. No. 194417, November 23, 2016, J. Jardeleza

Tenancy relationship can only be created with the consent of the true and lawful
landowner who is the owner, lessee, usufructuary or legal possessor of the land. It cannot be
created by the act of a supposed landowner, who has no right to the land subject of the
tenancy, much less by one who has been dispossessed of the same by final judgment.

Facts:

Respondents filed complaints for reinstatement of possession as farmer tenants

against petitioners with the DARAB-Region 2, San Fermin, Cauayan, Isabela. Respondents
alleged that they were the farmers/tillers of portions of Lot No. 7050 (properties), since
1962 until around the end of 1998 when they were deprived of their respective possessions,
occupations and tillage of the properties due to a CA Decision ordering the transfer of the
properties from Nicanor Ibuna, Sr. to Teodoro Cadelia and his heirs, petitioners herein.

Petitioners moved to dismiss the complaint on the ground that respondents cannot
be considered as tenants under land reform law because they were instituted Ibuna, whose
rights were previously declared by the court illegal and unlawful.

The DARAB ruled in favor of respondents and declared Ibuna as legal possessor of
the properties who had the right to institute respondents as tenants of the properties. The
DARAB said that while the title of the Ibuna was subsequently declared null and void by the
CA in another case, he is deemed as legal possessor of the subject land and as such, he has
the right to grant to the plaintiffs the cultivation of the land pursuant to Section 6 of RA
3844 (Agricultural Land Reform Code). The CA affirmed the DARABs ruling.

Issues:

Whether there is an agricultural tenancy relationship between petitioners and

respondents.

Ruling:

There is no agricultural tenancy relationship between petitioners and respondents.

Tenancy relationship can only be created with the consent of the true and lawful
landowner who is the owner, lessee, usufructuary or legal possessor of the land. It cannot
be created by the act of a supposed landowner, who has no right to the land subject of the
tenancy, much less by one who has been dispossessed of the same by final judgement.

In this case, Ibuna's institution of respondents as tenants did not give rise to a
tenure relationship because Ibuna is not the lawful landowner, either in the concept of an
owner or a legal possessor, of the properties. It is undisputed that prior to the filing of the
complaint with the DARAB, the transfers of the properties to Ibuna and his predecessor,
Andres Castillo, were declared void in separate and previous proceedings. Since the
transfers were void, it vested no rights whatsoever in favor of Ibuna, either of ownership and
possession. It is also for this reason that the DARAB erred in declaring Ibuna as a legal
possessor who may furnish a landholding to respondents. That which is inexistent cannot
give life to anything at all.