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Disqualifications of Lessee

this court established the method of administering the property of a conjugal partnership when it is dissolved by the death
of the wife. The method established is that when a conjugal partnership is dissolved by the death of the wife the husband is
the administrator of the affairs of the partnership until they are liquidated. In the event of a dissolution by the death of the
husband or in case of the demise of the husband after the dissolution by the death of the wife, his administrator is also the
administrator of the partnership affairs and is the legal representative of the partnership.
These decision are, in our opinion, conclusive as to the question here presented. Wherefore the plaintiff, as administrator of
the conjugal partnership, has the right to the possession of the conjugal property until the liquidation thereof takes place,
and he can exercise over such property the same authority as article 1548 of the Civil Code vests in all administrators, to wit:
No lease for a term of more than six years shall be made by then husband with respect to the property of his wife,
by the father with respect to that of his children, by the guardian with respect to that of his ward, or by a manager
in default of special power with respect to the property intrusted to him for management.
This court interpreting said article 1548 in Tipton vs. Martinez (5 Phi., 477), said: "This provision plainly shows that Aguirre
could not, as administrator, have validly executed a lease of the land in question for a period of ten years in the absence of
special authority to that effect. This, in our opinion, vitiated the contract in its entirely, but only however, did not affect the
contract in its entirely, but only in so far as it exceeded the six-year limit fixed by law as the maximum period for which an
administrator can execute a lease without special power. The contract in question was perfectly valid in so far as it did not
exceed that limit, it having been executed by the administrator, Aguirre, within the scope of the legal authority he had under
his general power to lease. That general power carried with it, under the article above quoted, the authority to lease the
property for a period not exceeding six years. There was no excess of authority and consequently no cause for nullification
arising therefrom, as to the first six years of the lease. As to the last four, the contract was, however, void, the administrator
having acted beyond the scope of his powers.


Disqualifications of Lessee

DY TIAO LAY, defendant-appellee.
The first proposition is based on article 397 of the Civil Code which provides that "none of the owners shall, without the
consent of the others, make any alterations in the common property even though such alterations might be advantageous
to all." We do not think that the alterations are of sufficient importance to nullify the lease, especially so since none of the
coowners objected to such alterations until over twenty years after the execution of the contract of lease. The decision of
this court in the case of Enriquez vs. A. S. Watson and Co. (22 Phil., 623), contains a full discussion of the effect of alterations
of leased community property, and no further discussion upon the point need here be considered.
The second proposition is likewise of little merit. Under the circumstances, the provision in the contract that the lessee, at
any time before he erected any building on the land, might rescind the lease, can hardly be regarded as a violation of article
1256 of the Civil Code.
The third and fourth proposition are, in our opinion, determinative of the controversy. An examination of the Enriquez case
will show that it differs materially from the present. In that case all of the co-owners of a lot and building executed a
contract of lease of the property for the term of eighteen years in favor of A. S. Watson & Co.; one of the owners was minor,
but he was represented by his legally appointed guardian, and the action of the latter in signing the lease on behalf of the
minor was formally approved by the Court of First Instance. In the present case only a small majority of the coowners


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executed the lease here in question, and according to the terms of the contract the lease might be given a duration of sixty
years; that is widely different from a lease granted by all of the coowners for a term of only eighteen years.
One of the grounds upon which the judgment appealed from, denying the validity of the lease made by the majority of the
part owners of the pasture land El Mortero is based, must be upheld; to wit, that the period of duration is twelve years and
the consent of all the coowners has not been obtained; hence, the third, fourth. and fifth assignments of error are without
merit; firstly, because article 398 of the Civil Code, alleged to have been violated, refers to acts decided upon by the majority
of the part owners, touching the management and enjoyment of the common property, and does not contradict what we
have stated in the foregoing paragraph; secondly because although the cases cited were such as arose upon leases for more
than six years, yet this point was not raised on appeal, and could not therefore be passed upon; and thirdly, because it
cannot be denied that there is an analogy between a manager without special authority, who is forbidden by article 1548 of
the Code to give a lease for a period of over six years, and the joint owners constituting a legal majority, who may decide to
lease out the indivisible property, with respect to the shares of the other coowners; and having come to the conclusion that
the contract is null and void, there is no need to discuss the first two assignments of error which refer to another of the
bases adopted, however erroneously, by the trial court;
The fact that Ramon during his lifetime received his share of the products of land owned in common with his coheirs is not
sufficient proof of knowledge of the existence of the contract of lease when it is considered that the land in question was
only a small portion of a large tract which Pedro R. Melencio was administering in connection with other community
The appealed judgment as to the validity of the lease is therefore reversed, and it is ordered that the possession of the land
in controversy be delivered to the intervenor Liberata Macapagal in her capacity as administratrix of the estate of the
deceased Ramon Melencio. It is further ordered that the defendant pay to said administratrix a monthly rent of P50 for the
occupation of the land from May 1st, 1926, until the land is delivered to the administratrix. The sum of P272 demanded by
the defendant in his counterclaim may be deducted from the total amount of the rent due and unpaid. The building erected
on the land by the defendant and his predecessors in interest may be removed by him, or otherwise disposed of, within six
months from the promulgation of this decision. Without costs. So ordered.


Disqualifications of Lessee
The plaintiff, as the present administrator of the hospital property, claims that the contract made by his predecessor,
Aguirre, was null and void for want of power on his part to make such contract, basing his contention upon the provisions of
article 1548 of the Civil Code. That article reads as follows:
The husband with respect to the property of his wife, the father and guardian with regard to that of his children or
minor, and the administrator of property without a special power giving him such authority, can not execute a lease
for a period exceeding six years.
This provision plainly shows that Aguirre could not, as administrator, have validly executed a lease of the land in question for
a period of ten years in the absence of special authority to that effect. This, in our opinion, vitiated the contract. This defect,
however, did not affect the contract in its entirety, but only in so far as it exceeded the six-year limit fixed by law as the
maximum period for which an administrator can execute a lease without special power. The contract in question was
perfectly valid in so far as it did not exceed that limit, it having been executed by the administrator, Aguirre, within the scope
of the legal authority he had under his general power to lease. That general power carried with it, under the article above
quoted, the authority to lease the property for a period not exceeding six years. There was no excess of authority and
consequently no cause for nullification arising therefrom, as to the first six years of the lease. As to the last four, the contract
was, however, void, the administrator having acted beyond the scope of his powers.
The trial court construed article 1548 of the Civil Code as applying only to administrators of estates of deceased persons.
This construction is manifestly erroneous. The provisions of that article are general and apply as well to administrators of
property of living as of deceased persons.


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It is contended, on the other hand, by the defendant, that article 1548 is not applicable to public lands such as the property
in question, nor to public officials as was Vicente Aguirre, the administrator of the San Lazaro Hospital.
As to the first contention, it is not stated in defendant's brief in what sense the words "public lands" are used. It seems,
however, that the defendant refers to lands of the public domain. He testified at the trial that the lands of the San Lazaro
Hospital belonged to the Government of the United States. If such were the case his interpretation of these words would be
erroneous. That property belongs to the public domain which is destined to public use or which belongs exclusively to the
State without being devoted to common use or which is destined to some public service or to the development of the
national resources and of mines until transferred to private persons. (Art. 339 of the Civil Code.) The land in question does
not pertain to any of these classes. The best proof of it is that the defendant himself had been using it for his own personal
and exclusive benefit. So that, assuming without deciding that the land in question belonged to the Government of the
United States, it would be nevertheless private property under the provisions of articles 340 and 345 of the Civil Code, and
as such unless provided for by special legislation, is subject to the provisions of those articles. The defendant has not called
our attention to any special law providing a method different from that contained in the Civil Code for the leasing of the
lands belonging to the San Lazaro Hospital, and we do not know of the existence of any such law.
Assignment of Lease

Articles 1203 and 1205 of the Civil Code provide:

ART. 1203. Obligations may be modified:
1. By the change of their object or principal conditions;
2. By substituting another in place of the debtor;
3. By subrogating a third person to the rights of the creditor.
ART. 1205. Novation which consists in the substitution of the of a new debtor in the place of the original one may be
made without the knowledge of the latter, but not without the consent of the creditor.
Responsive to the said provisions, the substitution of the debtor or in an obligation with the creditor's consent, produces
novation by bringing into being a new obligation in place of the old. Applied to the case under consideration, the result is,
that if the plaintiff consented to the substitution of Angel Garchitorena and Benigno del Rio in lieu of the original lessees, it
has exhausted all its right of action against the latter and can only enforce the same against the new lessees. Our inquiry,
therefore, will bear on the existence of such consent.
Exhibit 1 undoubtedly evidences that Vicente Albo and Eugenio Sevilia conveyed all their rights, interest and participation in
the "Cine Collegian", whose business was styled Albo & Sevilla, Inc., in favor of Angel Garchitorena and Benigno del Rio,
including all their rights, interest, and obligations under the contract of lease entered into on July 15, 1930. This appears in
the aforesaid deed, and so also in paragraph 8 of the stipulated facts. True, the plaintiff had no hand in this document
Exhibit 1, for which sole reason it may be alleged that it neither knew nor consented to the transaction. However, in the
quoted clauses from the duly registered chattel mortgage Exhibit C, executed on August 15, 1931, by Angel Garchitorena
and Benigno del Rio, wherein the plaintiff directly intervened and took part through the manager Jose G. Barretto, who
signed in its name, appear statements of the contracting parties clearly and logically compelling the deduction that, under
its terms, the plaintiff knew of the conveyance made by Vicente Albo and Eugenio Sevilla in favor of Angel Garchitorena and
Benigno del Rio, and virtually approved of and consented to the substitution of the new lessees. It is first to be noted that
the document states that Garchitorena and Del Rio mortgaged the same chattels which Albo, Sevilla, Garchitorena and Albo
& Sevilla, Inc., had already previously mortgaged to the said plaintiff to secure the obligations which they assumed under
the contract of lease Paragraph 1 next states that Angel Garchitorena and Benigno del Rio became the owners of the same
chattels. Paragraph 3 likewise states that the period of the contract of lease is extended to December 31, 1936, and that the
security is for the faithful compliance with the other conditions stipulated in the original contract of lease. The concluding
clause of the deed is a reiteration that the security takes in all the condition; and obligations arising from the contract of
lease. In the face of such circumstances, we believe the only logical and reasonable deduction is that in view of the second
mortgage, the plaintiff was apprized of and acquiesced in the change of lessees.


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General Obligations

Upon the basis of the distinction thus established between the perturbacion de hecho and the perturbacion de derecho, it is
demonstrable that the ouster of the appellant by the Japanese occupying forces belongs to the second class of
disturbances, de derecho. For under the generally accepted principles of international law (and it must be remembered that
those principles are made by our Constitution a part of the law of our nation 1) a belligerent occupant (like the Japanese in
1942-1945) may legitimately billet or quarter its troops in privately owned land and buildings for the duration of its military
operations, or as military necessity should demand. The well known writer Oppenheim, discoursing on the laws of war on
land, says upon this topic;
Immovable private enemy property may under no circumstances or conditions be appropriated by an invading
belligerent. Should he confiscate and sell private land or buildings, the buyer would acquire no right whatever to the
property. Article 46 of the Hague Regulations expressly enacts that "private property may not be confiscated." But
confiscation differs from the temporary use of private land and building for all kinds of purposes demanded by the
necessities of war. What has been said above with regard to utilization of public buildings applied equally to private
buildings. If necessary, they maybe converted into hospital barracks, and stables without compensation for the
proprietors, and they may also be converted into fortifications. A humane belligerent will not drive the wretched
inhabitants into the street if he can help it. But under the pressure of necessity he may be obliged to do this, and he
is certainly not prohibited from doing it. (Emphasis supplied) (Oppenheim & Lauterpach, International Law, Vol. II, p.
312, 1944 Ed.)
The view thus expressed is concurred in by other writers. Hyde (International Law, Vol. 3, p. 1893, 2nd Rev. Ed.) quotes the
U. S. War Department 1940 Rules of Land Warfare (Rule No. 324) to the effect that —
The measure of permissible devastation is found in the strict necessities of war. As an end in itself, as a separate
measure of war, devastation is not sanctioned by the law of war. There must be some reasonably close connection
between the destruction of property and the overcoming of the enemy's army. Thus the rule requiring respect for
private property is not violated through damage resulting from operations, movements, or combats of the army;
that is, real estate may be utilized for marches, camp sites, construction of trenches, etc. Buildings may be used for
shelter for troops, the sick and wounded, for animals, for reconnaissance, cover defense, etc. Fence, woods, crops,
buildings, etc., may be demolished, cut down, and removed to clear a field of fire, to construct bridges, to furnish
fuel if imperatively needed for the army. (Emphasis supplied)
Reference may also be made to Rule 336:
What may be requisitioned. — Practically everything may be requisitioned under this article (art. LII of the
regulations above quoted) that is necessary for the maintenance of the army and not of direct military use, such as
fuel, food, forage, clothing, tobacco, printing presses, type, leather, cloth, etc. Billeting of troops for quarters and
subsistence is also authorized. (Emphasis supplied)
And Forest and Tucker state:
The billegerent occupant may destroy or appropriate public property which may have a hostile purpose, as forts,
arms, armories, etc. The occupying force may enjoy the income from the public sources. Strictly private property
should be inviolable, except so far as the necessity of war requires contrary action. (Forest and Tucker, International
Law, 9th Ed., p. 277) (Emphasis supplied)
The distinction between confiscation and temporary sequestration of private property by a belligerent occupant was also
passed upon by this Court in Haw Pia vs. China Banking Corporation, 80 Phil. 604, wherein the right of Japan to sequester or
take temporary control over enemy private property in the interest of its military effort was expressly recognized.
We are thus forced to conclude that in evicting the lessee, Manila Motor Co., Inc. from the leased buildings and occupying
the same as quarters for troops, the Japanese authorities acted pursuant to a right recognized by international and domestic
law. Its act of dispossession, therefore, did not constitute perturbacion de hecho but aperturbacion de derecho for which the


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lessors Villaruel (and not the appellants lessees) were liable (Art. 1560, supra) and for the consequences of which said
lessors must respond, since the result of the disturbance was the deprivation of the lessee of the peaceful use and
enjoyment of the property leased. Wherefore, the latter's corresponding obligation to pay rentals ceased during such
The Supreme Court of Spain, in its Sentencia of 6 December 1944, squarely declared the resolutory effect of the military
sequestration of properties under lease upon the lessee's obligation to pay rent
We are aware that the rule in the common law is otherwise, due to its regarding a lease as a conveyance to the lessee of a
temporary estate or title to the leased property so that loss of possession due to war or other fortuitous event leaves the
tenant liable for the rent in the absence of stipulation.
In short, the law applies to leases the rule enunciated by the Canonists and the Bartolist School of Post glossatorse, that
"contractus qui tractum successivum habent et dependentiam de futuro, sub conditione rebus sic stantibus intelliguntur ,"
they are understood entered subject to the condition that things will remain as they are, without material change.
It is also worthy of note that the lessors, through Dr. Javier Villaruel, agreed after liberation to a renewal of the contract of
lease for another five years (from June 1, 1946 to May 31 of 1951) without making any reservation regarding the alleged
liability of the lessee company for the rentals corresponding to the period of occupancy of the premises by the Japanese
army, and without insisting that the non-payment of such rental was a breach of the contract of lease. This passivity of the
lessors strongly supports the claim of the lessees that the rentals in question were verbally waived. The proffered
explanation is that the lessors could not refuse to renew the lease, because the privilege of renewal had been granted to the
lessees in the original contract. Such excuse is untenable: if the lessors deemed that the contract had been breached by the
lessee's non-payment of the occupation rents how could they admit the lessee's right to renew a contract that the lessee
itself had violated?
But this is not all. The lessors accepted payment of current rentals from October 1945 to June 1946. It was only in July 1946
that they insisted upon collecting also the 1942-1945 rents, and refused to accept further payments tendered by the lessee
unless their right to collect the occupation rental was recognized or reserved. After refusing the rents from July to
November 1946, unless the lessee recognized their right to occupation rentals, the appellees (lessors) demanded rescission
of the contract and a rental of P1,740 monthly in lieu of the stipulated P350 per month. (Exhibit "C").
This attitude of the lessors was doubly wrongful: first, because as already shown, the dispossession by the Japanese army
exempted the lessee from his obligation to pay rent for the period of its ouster; and second, because even if the lessee had
been liable for that rent, its collection in 1946 was barred by the moratorium order, Executive Order No. 32, that remained
in force until replaced by Rep. Act 342 in 1948. To apply the current rentals to the occupation obligations would amount to
enforcing them contrary to the moratorium decreed by the government.
Clearly, then, the lessor' insistence upon collecting the occupation rentals for 1942-1945 was unwarranted in law. Hence,
their refusal to accept the current rentals without qualification placed them in default (mora creditoris or accipiendi) with
the result that thereafter, they had to bear all supervening risks of accidental injury or destruction of the leased premises.
While not expressly declared by the Code of 1889, this result is clearly inferable from the nature and effects of mora, and
from Articles 1185, 1452 [par. 3] and 1589).
ART. 1185. When the obligation to deliver a certain and determinate thing arises from the commission of a crime or
misdemeanor the obligor shall not be exempted from the payment of its value, whatever the cause of its loss may
have been, unless, having offered the thing to the person entitled to receive it, the latter should have refused
without reason to accept it.
Art. 1452. . . . .
If fungible things should be sold for a price fixed with relation to weight, number, or measure, they shall not be at
the purchaser's risk until they have been weighed, counted, or measured, unless the purchaser should be in default.
ART. 1589. If the person who contracted to do the work bound himself to furnish the materials, he shall bear the
loss in case of the destruction of the work before it is delivered, unless its acceptance has been delayed by the
default of the other party.


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While there is a presumption that the loss of the thing leased is due to the fault of the lessee (Civil Code of 1889, Art. 1563),


Obligations of Lessee

Manresa, in commenting on the aforementioned article 1554, very clearly says:

The lessor must see that the enjoyment is not interrupted or disturbed, either by others' acts (save in the case
provided for in the article 1560), or by his own. By his own acts, because, being the person principally obligated by
the contract, he would openly violate it if, in going back on his agreement, he should attempt to render ineffective in
practice the right in the thing he had granted to the lessee; and by others' acts, because he must guarantee the right
he created, for he is obliged to give warranty in the manner we have set forth in our commentary on article 1553,
and, in this sense, it is incumbent upon him to protect the lessee in the latters' peaceful enjoyment.
Alejandro Roces leased to M. Goldstein, who is the proprietor of a saloon named LuzonCafé, the first floor of a building
belonging to them. They leased the rest of the premises to
the proprietor of the Hotel de Francia. The proprietor of the hotel requested that another story beadded to the building.
Roces acceded to the request. The proprietor then hired the services of acontractor to do the work. The contractor deemed
it necessary to open holes for the insertion ofthe uprights. When it rained, water leaked through these holes. It stained the
walls and furniture.M. Goldstein incurred expenses for the repairs. Thus he suffered losses. He sued Roces based onArticle
1654 which provides that the lessor is obliged to maintain the lessee in the peacefulenjoyment of the lease during all the
time covered by the contract. The trial court ruled in favorof Roces.
Issue:Did the act of the lessor, in allowing another to introduce improvements in the leased premises, thereby causing
damage to another lessee, a violation of his obligation to maintain thelessee in the peaceful enjoyment of the leased
Held: No. The lessor must see to it that the enjoyment is not interrupted or disturbed, either byothers' acts, save in the case
provided for in the Article 1664, or by his own. In this case, it is notdisputed that M. Goldstein maintained his peaceful
enjoyment, or his quiet and peaceable possession of the floor he occupies. That there was a disturbance of the peace
or order in whichhe maintained his things in the leased story does not mean that he lost the peaceful enjoyment ofthe thing
rented. Had the lessor attempted to render ineffective the right of the lessee to use thething leased as agreed upon, then he
could have been liable. That was not present in this case.Therefore, the action should have not been brought against the
lessor, but against the contractor,the tort feasor, who disturbed his enjoyment of the leased premises. Also, the distinction
betweenlegal trespass and trespass in fact must be emphasized. To the latter, the lessor is not liable.Article 1664 speaks of
trespass in fact only in the use of the property leased. If such trespass istranslated into anything material which affects the
property itself, such as when a third personclaims a legal right to the property, then it becomes a trespass in law in which
the lessor shall become liable.
Torres, Moreland, and Araullo, JJ., concur.

"It has been held that while damages may beadjudged in forcible entry and detainer casts, these `damages` mean`rents` or
`the reasonable compensation for the use and occupation of the premises,` (Mitschiener v. Barrios, 76 Phil. 55, cited in
Garcia v. Pena,77 Phil. 1011) or `fair rental value of the property.` (Sparrevohn v. Fisher,2 Phil. 676; Mitschiener v. Barrios,
supra; Castueras v. Bayona, 106 Phil.340). Profits which the plaintiff might have received were it not for theforcible entry or
detainer do not represent a fair rental value." (Sparrevohnv. Fisher, 2 Phil. 676; supra; Igama v. Soria, 42 Phil. 11) Although
Section1 of Rule 70 uses the word "damages," the authors of the Rules of Court,in drafting Section 6 of Rule 70 on the
judgment to be pronounced,eliminated the word "damages," placing in lieu thereof, the words"reasonable compensation
for the use and occupation of the premises."


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The damages which a plaintiff expects to obtain from his business to be located in the premises, or for material injury
caused to the premisescannot also be claimed in connection with or as incidental to an action of illegal detainer or forcible
entry. Since moral, exemplary, and actual damages are neither"rents" nor "reasonable compensation for the use and
occupation of thepremises," nor "fair rental value" as abovestated, we are constrained todeny the P3,000.00 moral damages
and P2,000.00 exemplary damagesawarded by the respondent Court of Appeals and the P1,000.00 actualdamages awarded
by the City Court of Manila.


Implied New Lease

Because Dizon continued to occupy the leased premises with Magsaysay's acquiescence even after the two-year term of the
private written lease contract between them expired on April 1, 1951, petitioners contend that the implied new lease
created, although admittedly not for the period of the original contract, revived the other terms thereof, including the
lessee's preferential right of purchase, citing Article 1670 of the new Civil Code, which provides:
Art. 1670. If at the end of the contract the lessee should continue enjoying the thing leased for fifteen days
with the acquiescence of the lessor and unless a notice to the contrary by either party has previously been
given, it is understood that there is an implied new lease, not for the period of the original contract, but for
the time established in articles 1682 and 1687. The other terms of the original contract shall be revived.
(Emphasis supplied)
The Court of Appeals held that "the other terms of the original contract" which are revived in the implied new lease under
Article 1670 are only those terms which are germane to the lessee's right of continued enjoyment of the property leased.
This is a reasonable construction of the provision, which is based on the presumption that when the lessor allows the lessee
to continue enjoying possession of the property for fifteen days after the expiration of the contract he is willing that such
enjoyment shall be for the entire period corresponding to the rent which is customarily paid — in this case up to the end of
the month because the rent was paid monthly. Necessarily, if the presumed will of the parties refers to the enjoyment of
possession the presumption covers the other terms of the contract related to such possession, such as the amount of rental,
the date when it must be paid, the care of the property, the responsibility for repairs, etc. But no such presumption may be
indulged in with respect to special agreements which by nature are foreign to the right of occupancy or enjoyment inherent
in a contract of lease.
But whatever doubt there may be on this point is dispelled by paragraph (2) of the contract of lease, which states that it was
renewable for the same period of two years (upon its expiration on April 1, 1951), "con condiciones expresas y specificadas
que seran convenidas entre las partes." This stipulation embodied the agreement of the parties with respect to renewal of
the original contract, and while there was nothing in it which was incompatible with the existence of an implied new lease
from month to month under the conditions laid down in Article 1670 of the Civil Code, such incompatibility existed with
respect to any implied revival of the lessee's preferential right to purchase, which expired with the termination of the
original contract. On this point the express agreement of the parties should govern, not the legal provision relied upon by
the petitioner.


Implied New Lease

Article 1308 of the Civil Code expresses what is known in law as the principle of mutuality of contracts. xxx This binding
effect of a contract on both parties is based on the principle that the obligations arising from contracts have the force of law
between the contracting parties, and there must be mutuality between them based essentially on their equality under
which it is repugnant to have one party bound by the contract while leaving the other free therefrom. The ultimate purpose
is to render void a contract containing a condition which makes its fulfillment dependent solely upon the uncontrolled will
of one of the contracting parties.


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An express agreement which gives the lessee the sole option to renew the lease is frequent and subject to statutory
restrictions, valid and binding on the parties. This option, which is provided in the same lease agreement, is fundamentally
part of the consideration in the contract and is no different from any other provision of the lease carrying an undertaking on
the part of the lessor to act conditioned on the performance by the lessee. xxx
The fact that such option is binding only on the lessor and can be exercised only by the lessee does not render it void for
lack of mutuality. After all, the lessor is free to give or not to give the option to the lessee. And while the lessee has a
right to elect whether to continue with the lease or not, once he exercises his option to continue and the lessor accepts,
both parties are thereafter bound by the new lease agreement. Their rights and obligations become mutually fixed, and
the lessee is entitled to retain possession of the property for the duration of the new lease, and the lessor may hold him
liable for the rent therefor. The lessee cannot thereafter escape liability even if he should subsequently decide to
abandon the premises. Mutuality obtains in such a contract and equality exists between the lessor and the lessee since
they remain with the same faculties in respect to fulfillment.[22] (Emphasis supplied)

As correctly ruled by the MTC in its decision, the grant of benefit of the period in favor of the lessee was given in
exchange for no less than an automatic 20% yearly increase in monthly rentals. This additional condition was not present in
the Puahay and Singson cases.

Moreover, the express provision in the lease agreement of the parties that violation of any of the terms and conditions
of the contract shall be sufficient ground for termination thereof by the lessor, removes the contract from the application of
Article 1308.

Lastly, after having the lessees believe that their lease contract is one with an indefinite period subject only to prompt
payment of the monthly rentals by the lessees, we agree with private respondents that the lessor is estopped from claiming

In the case of Opulencia vs. Court of Appeals,[24] this Court held that petitioner is estopped from backing out of her
representations in the contract with respondent, that is, she may not renege on her own acts and representations, to the
prejudice of the respondents who relied on them. We have held in a long line of cases that neither the law nor the courts
will extricate a party from an unwise or undesirable contract he or she entered into with all the required formalities and will
full awareness of its consequences.[25]

Anent the second issue, we likewise hold that the contention of petitioner is without merit. The Court of Appeals found
that the petitioners allegation of respondents non-payment is false. This is a finding of fact which we respect and uphold,
absent any showing of arbitrariness or grave abuse on the part of the court. Furthermore, the statement of petitioner that
the correct amount of rents cannot be considered in a consignation case but only in the ejectment case is misleading
because nowhere in the decision of the appellate court did it state otherwise. This second issue is clearly just a futile
attempt to overthrow the appellate courts ruling.

Nevertheless, suffice it to be stated that under Article 1258 of the Civil Code which provides:
Art. 1258. Consignation shall be made by depositing the things due at the disposal of judicial authority, before whom to
tender of payment shall be proved, in a proper case, and the announcement of the consignation in other cases.
The consignation having been made, the interested parties shall also be notified thereof.

the rationale for consignation is to avoid the performance of an obligation becoming more onerous to the debtor by reason
of causes not imputable to him.[26] Whether or not petitioner has a cause of action to eject private respondents from the
leased premises due to refusal of the lessees to pay the increased monthly rentals had been duly determined in the
ejectment case by the Municipal Trial Court which was correctly upheld by the Court of Appeals.


San Beda College of Law