SALES

ARTICLE 1595
• Rules if buyer refuses to pay
1. Ownership has passed to the buyer but buyer wrongfully
neglects or refuses to pay for the goods according to the
terms of the contract of sale = seller may sue for price of
goods
2. Ownership has not yet passed, price is payable on a
certain day, irrespective of delivery or of transfer or title
and buyer wrongfully neglects or refuses to pay price =
seller may sue for price
• Defense = seller at any time before judgment in such action has
manifested an inability to perform the contract of sale on his part
or an intention not to perform it.
3. Ownership has not yet passed, goods cannot readily be
resold for a reasonable price or Art. 1596(4) are not
applicable = seller may offer to deliver the goods to the
buyer
• If buyer refuses to receive = seller may notify the buyer that the
goods are thereafter held by the seller as bailee for the buyer
• Seller may thereafter treat the goods as the buyer’s and sue
for the price
ARTICLE 1596
• Buyer refuses to accept and pay = seller may sue for
damages for non-acceptance
• Measure of damages = estimated loss directly and
naturally resulting in the ordinary course of events
from the buyer’s breach of contract
ARTICLE 1597
• Seller may totally rescind the contract:
1. Goods have not been delivered to buyer; AND
2. Buyer has repudiated the contract of sale; OR
Buyer has manifested his inability to perform his
obligations thereunder; OR
Buyer has committed a breach of the contract.
• Notice must be given to the buyer.
ARTICLE 1598
• Rule when the seller has broken a contract to deliver
specific or ascertained goods
• Buyer seeks relief from the court;
• Court may direct specific performance of the contract;
• Court may deprive seller the right of retention although
he/she is willing to pay damages;
• Judgment or decree may be unconditional or upon such
terms and conditions as to damages, payment of the price
and otherwise, as the court may deem just.
ARTICLE 1599
• Buyer’s remedies for seller’s breach of warranty
1. Accept or keep the goods and set up against the seller, the
breach of warranty by way of recoupment in diminution or
extinction of the price;
2. Accept or keep the goods and maintain an action against the
seller for damages for the breach of warranty;
3. Refuse to accept the goods and maintain an action against the
seller for the breach of warranty; or
4. Rescind the contract of sale and refuse to receive the goods OR
if the goods have already been received, return them or offer
to return them to the seller and recover the price or any part
thereof which has been paid.
ARTICLE 1599
• Grant of any of the remedies (1 to 4) bars the grant of
other remedies.
• EXCEPTION: Article 1191(2) would still apply.
• Rescission is not available even after delivery if:
1. Buyer knew of the breach of warranty when he accepted the
goods without protest;
2. Buyer fails to notify seller within a reasonable time of the
election to rescind; and
3. Buyer fails to return or offer to return goods to seller in
substantially as good condition as they were in at the time the
ownership was transferred to the buyer.
• Deterioration or injury due to breach of warranty shall not
prevent buyer from returning or offering to return the
goods of the seller and rescinding the sale.
• Effect of rescission of sale:
1. Buyer shall cease to be liable for the price upon returning or
offering to return the goods;
2. If price or part thereof has been paid, seller shall be liable to repay
so much thereof as has been paid, concurrently with the return of
the goods, or immediately after an offer to return the goods in
exchange for repayment of the price;
3. If seller refuses to accept buyer’s offer to return the goods, buyer
shall be deemed to hold the goods as bailee for the seller, but (a)
subject to a lien to secure payment of portion of price that has been
paid, and (b) with remedies for the enforcement of such lien
allowed to an unpaid seller.
• Measure of breach of warranty of quality = difference
between value of goods at the time of delivery and value
they would have had if they had answered to the warranty.
ARTICLE 1600
• How is a contract of sale extinguished?
1. By the same causes as all other obligations;
2. By those stated in Title IV, Book IV of the New Civil Code; and
3. By conventional or legal redemption.
ARTICLE 1601
• Conventional redemption
• When the vendor reserves the right to repurchase the thing
sold, with the obligation to comply with the provisions of
Article 1616 and other stipulations which may have been
agreed upon.
• Articles 1601 to 1618.
ARTICLE 1602
• Equitable mortgage
“An equitable mortgage has been defined ‘as one which
although lacking in some formality, or form or words, or
other requisites demanded by a statute, nevertheless
reveals the intention of the parties to charge real property
as security for a debt, and contains nothing impossible or
contrary to law.’” (Go vs. Bacaron, GR No. 159048, 11
October 2005)
• When is a contract presumed to be an equitable mortgage?
1. When the price of a sale with right to repurchase is unusually
inadequate;
2. When the vendor remains in possession as lessee or otherwise;
3. When upon or after the expiration of the right to repurchase
another instrument extending the period of redemption or granting
a new period is executed;
4. When the purchaser retains for himself a part of the purchase
price;
5. When the vendor binds himself to pay the taxes on the thing sold;
6. In any other case where it may be fairly inferred that the real
intention of the parties is that the transaction shall secure the
payment of a debt or the performance of any other obligation.
• Any money, fruits, or other benefit to be received by the
vendee as rent or otherwise shall be considered as
interest which shall be subject to the usury laws.
SPOUSES SOLITARIOS AND TORDA vs. SPOUSES JAQUE (GR No. 199852, 12
November 2014)
“As evident from Article 1602 itself, the presence of any of the circumstances set forth
therein suffices for a contract to be deemed an equitable mortgage. No concurrence or
an overwhelming number is needed.
With the foregoing in mind, We thus declare that the transaction between the parties
of the present case is actually one of equitable mortgage pursuant to the foregoing
provisions of the Civil Code. It has never denied by respondents that the petitioners,
the spouses Solitarios, have remained in possession of the subject property and
exercised acts of ownership over the said lot even after the purported absolute sale of
Lot 4089. This fact is immediately apparent from the testimonies of the parties and
the evidence extant on record, showing that the real intention of the parties was for
the transaction to secure the payment of a debt. Nothing more.”
VILLARTA vs. TALAVERA (GR No. 208021, 03 February 2016)
“The conduct of the parties prior to, during, and after the execution of the deeds of sale adequately shows
that petitioner sold to respondent the lots in question to satisfy his debts.
Respondent was able to sufficiently explain why the presumption of an equitable mortgage does not apply
in the present case. The inadequacy of the purchase price in the two deeds of sale dated 18 May 2001 was
supported by an Affidavit of True Consideration of the Absolute Sale of the Property. Respondent did not
tolerate petitioner’s possession of the lots. Respondent caused the registration and subsequent transfer of
TCT No. T-214950 to TCT No. T-333921 under his name, and paid taxes thereon. There were no
extensions of time for the payment of petitioner’s loans; rather, petitioner offered different modes of
payment for his loans. It was only after three instances of bounced checks that petitioner offered TCT Nos.
T-130095 and T-214950 as payment for his loans and executed deeds of sale in respondent’s favor.
The transaction between petitioner and respondent is thus not an equitable mortgage, but is instead
a dacion en pago.
Dacion en pago is the delivery and transmission of ownership of a thing by the debtor to the creditor as an
accepted equivalent of the performance of an existing obligation. It is a special mode of payment where the
debtor offers another thing to the creditor who accepts it as equivalent to the payment of an outstanding
debt. For dacion en pago to exist, the following elements must concur: (a) existence of a money obligation;
(b) the alienation to the creditor of a property by the debtor with the consent of the former; and (c)
satisfaction of the money obligation of the debtor.”
ARTICLE 1605
• Remedy of apparent seller in a contract purporting to be a
sale with a right to repurchase/absolute sale but is actually
an equitable mortgage = reformation of the instrument
ARTICLE 1606
• Right to repurchase, conventional redemption = shall last
for four years from the date of the contract, unless there is
an express agreement.
• If there is an agreement = cannot exceed 10 years.
• BUT seller may still exercise the right to repurchase within
30 days from the time final judgment was rendered in a civil
action on the basis that the contract was a true sale with
right to repurchase.
ARTICLE 1607
• Recording in the Registry of Property of consolidation of
ownership in the buyer where the object is real property
and the seller fails to comply with Article 1616 = needs
(1) judicial order, (2) opportunity for the seller to be
heard.
ARTICLE 1608
• Against whom can the seller enforce his right?
• Every possessor whose right is derived from the buyer, even
if in the second contract no mention should have been made
of the right to repurchase.
• The exercise is without prejudice to the provisions of the
Mortgage Law and the Land Registration Law with respect to
third persons.
ARTICLE 1609
• Subrogation of the buyer to the seller’s rights and
actions
ARTICLE 1610
• Requisites, use of right of redemption by seller’s
creditors
1. Property of the seller must be exhausted first;
2. Right of redemption used against buyer.
ARTICLE 1611
• Right of redemption, indivisible immovable
• Art. 498. Whenever the thing is essentially indivisible and
the co-owners cannot agree that it be allotted to one of them
who shall indemnify the others, it shall be sold and its
proceeds distributed.
• Buyer of a part of an undivided immovable who acquires the
whole thereof in the case of article 498 may compel the
seller to redeem the whole property, if the latter wishes to
make use of the right of redemption.
ARTICLES 1612 & 1613
• Paragraph 1, Article 1612
1. Joint sale by several persons in the same contract;
2. Sale of an undivided immovable with a right of
repurchase;
3. Each seller can only exercise his/her right of repurchase
as to his/her share.
• Paragraph 2, Article 1612
1. Sale of an undivided immovable with a right of repurchase
by one person;
2. Seller leaves several heirs;
3. Each heir can exercise the right of repurchase over the
part which he/she has acquired.
• Right of the buyer under Article 1612
• Demand of all the vendors or co-heirs that they come to an
agreement upon the purchase of the whole thing sold.
• Should they fail to do so, the buyer cannot be compelled to
consent to a partial redemption.
ARTICLE 1614
• Separate sale by a co-owner of his share in an
undivided immovable
1. Right of repurchase may be independently exercised by
the co-owner;
2. Right is available as regards his own share only;
3. Buyer cannot compel him to redeem the whole property.
ARTICLE 1615
• Exercise of right of redemption against heirs
1. Buyer entered into a contract of sale with right to
repurchase;
2. Buyer leaves several heirs;
3. Right of redemption against each heir is limited to his/her
share, whether the thing be undivided or partitioned;
• But if the inheritance has been divided, and the thing sold has
been awarded to one of the heirs, the action for redemption may
be instituted against him for the whole.
ARTICLE 1616
• What must be returned by the seller to the buyer before
the seller can avail himself of the right of repurchase?
1. Price of the sale;
2. Expenses of contract and any other legitimate payments
made by reason of the sale;
3. Necessary and useful expenses made on the thing sold.
ARTICLE 1617
• Distribution of fruits
• Fruits existing at the time of the execution of the sale and
at the time of redemption – no reimbursement for or
prorating of those existing at the time of redemption if no
indemnity was made by the buyer when the sale was
executed.
• No fruits at time of sale, some exist at time of redemption
– prorated between redemptioner (seller) and buyer
• Share of buyer = that corresponding to the time he possessed
the land in the last year, counted from the anniversary of the
date of the sale.
ARTICLE 1618
• Charges and mortgages
• Seller who recovers the thing sold shall receive it free
from all charges and mortgages constituted by the buyer.
• Seller must respect charges and mortgages constituted in
good faith by the buyer, and in accordance with the
custom of the place where the land is situated.
ARTICLE 1619
• Legal redemption
• The right to be subrogated, upon the same terms and
conditions stipulated in the contract, in the place of one
who acquires a thing by purchase or dation in payment, or
by any other transaction whereby ownership is
transmitted by onerous title
• Articles 1619 to 1623.
ARTICLE 1620
• Exercise of the right of legal redemption by a co-owner
• May be exercised by one co-owner in case the shares of all
the other co-owners or of any of them are sold to a third
person
• Grossly excessive price = redemptioner shall pay a reasonable
one.
• May be exercised by two or more co-owners – in
proportion to the share they may respectively have in the
thing owned in common.
ARTICLE 1621
• Exercise of right of redemption by owners of adjoining RURAL
lands
1. Thing sold is a piece of rural land
2. Area does not exceed one hectare
• Exception – Grantee does not own any rural land
• Right does not apply to adjacent lands separated by brooks,
drains, ravines, roads and other apparent servitudes for the
benefit of other estates.
• Two or more adjoining owners desire to exercise right at the
same time
• Owner of adjoining land of smaller area preferred;
• If same area, one who first requested redemption preferred.
ARTICLE 1622
• Exercise of right of pre-emption/redemption by owners of adjoining
URBAN lands
1. Thing sold is a piece of urban land;
2. Area is so small and so situated that a major portion thereof cannot be used for
any practical purpose within a reasonable time, having been bought merely for
speculation;
3. Urban land is about to be resold;
• Owner of adjoining land has right of pre-emption at a reasonable price.
• If re-sale has been perfected, owner of adjoining land shall have a right
of redemption, also at a reasonable price.
• Preference between two or more owners who wish to exercise: owner
whose intended use of the land in question appears best justified.
ARTICLE 1623
• When can the right of pre-emption/redemption be exercised?
• Within 30 days from notice in writing by the prospective seller/sellers
• Requisite, recording of deed of sale in Registry of Property
• Affidavit of seller that he has given written notice of sale to all possible
redemptioners
• Right of redemption of co-owners excludes that of adjoining owners.
Francisco vs. Boiser (G.R. No. 137677, 31 May 2000)
“In the first place, reversion to the ruling in Butte is proper. Art. 1623 of the Civil Code is clear in
requiring that the written notification should come from the vendor or prospective vendor, not
from any other person. There is, therefore, no room for construction. Indeed, the principal
difference between Art. 1524 of the former Civil Code and Art. 1623 of the present one is that
the former did not specify who must give the notice, whereas the present one expressly says the
notice must be given by the vendor. Effect must be given to this change in statutory language.”
“Now, it is clear that by not immediately notifying the co-owner, a vendor can delay or even
effectively prevent the meaningful exercise of the right of redemption. In the present case, for
instance, the sale took place in 1986, but it was kept secret until 1992 when vendee (herein
respondent) needed to notify petitioner about the sale to demand 1/5 rentals from the property
sold. Compared to serious prejudice to petitioner's right of legal redemption, the only adverse
effect to vendor Adela Blas and respondent-vendee is that the sale could not be registered. It is
non-binding, only insofar as third persons are concerned. It is, therefore, unjust when the
subject sale has already been established before both lower courts and now, before this Court,
to further delay petitioner's exercise of her right of legal redemption by requiring that notice be
given by the vendor before petitioner can exercise her right. For this reason, we rule that the
receipt by petitioner of summons in Civil Case No. 15510 on August 5, 1992 constitutes actual
knowledge on the basis of which petitioner may now exercise her right of redemption within 30
days from finality of this decision.”
LEASE
ARTICLES 1642-1645
• Contract of lease
• Lease of things - one of the parties binds himself to give to another the
enjoyment or use of a thing for a price certain, and for a period which may be
definite or indefinite.
- No lease for more than 99 years shall be valid.
- Consumable goods cannot be the subject matter of a contract of lease,
except when they are merely to be exhibited or when they are accessory
to an industrial establishment.
• Lease of work/service - one of the parties binds himself to execute a piece of
work or to render to the other some service for a price certain, but the relation
of principal and agent does not exist between them.
ARTICLE 1646
• Persons disqualified to constitute lease
• Husband and wife, except:
• When a separation of property was agreed upon in the marriage settlements; or
• When there has been a judicial separation or property under Article 191.
• The guardian, the property of the person or persons who may be under his
guardianship;
• Agents, the property whose administration or sale may have been entrusted to
them, unless the consent of the principal has been given;
• Executors and administrators, the property of the estate under administration;
• Public officers and employees, the property of the State or of any subdivision
thereof, or of any government-owned or controlled corporation, or institution,
the administration of which has been entrusted to them; this provision shall
apply to judges and government experts who, in any manner whatsoever, take
part in the sale;
• Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and
other officers and employees connected with the administration of justice, the
property and rights in litigation or levied upon an execution before the court
within whose jurisdiction or territory they exercise their respective functions;
this prohibition includes the act of acquiring by assignment and shall apply to
lawyers, with respect to the property and rights which may be the object of any
litigation in which they may take part by virtue of their profession.
• Any others specially disqualified by law.
ARTICLE 1647
• The following persons cannot constitute a lease without proper
authority if it has to be recorded in the Registry of Property:
• Husband, with respect to the wife’s paraphernal estate;
• Father or guardian as to the property of the minor or ward;
• Manager without special power.
ARTICLE 1648
• Lease must be recorded in the proper Registry of Property in order to
bind third persons.
ARTICLE 1649
• Assignment of lease by lessee = must have lessor’s consent UNLESS
there is a stipulation to the contrary.
SUBLEASE
ARTICLES 1650-1652
• Sublease by lessee = allowed if not EXPRESSLY prohibited in the lease
contract.
= part or whole of the thing leased.
= without prejudice to lessee’s responsibility for the performance of
the contract toward the lessor.
• Scope of obligation of the sublessee to the lessor
1. All acts which refer to the use and preservation of the thing leased in the
manner stipulated between the lessor and the lessee.
• Without prejudice to his obligation toward the sublessor/lessee.
2. Subsidiary liability for any rent due from the lessee
• Sublessee shall not be responsible beyond the amount of rent due from him, in
accordance with the terms of the sublease, at the time of the extrajudicial
demand by the lessor.
• Advance payments of rent by sublessee = deemed not to have been made, so far
as the lessor’s claim is concerned, UNLESS payments were effected by virtue of
the custom of the place.
ARTICLE 1653
• Provisions on warranty apply to lease.
• In the cases where the return of the price is required, reduction shall be
made in proportion to the time during which the lessee enjoyed the
thing.
ARTICLE 1654
• Obligations of the lessor
1. To deliver the thing which is the object of the contract in such a
condition as to render it fit for the use intended;
2. To make on the same during the lease all the necessary repairs in
order to keep it suitable for the use to which it has been devoted,
unless there is a stipulation to the contrary;
3. To maintain the lessee in the peaceful and adequate enjoyment of
the lease for the entire duration of the contract.
ARTICLE 1655
• Destruction of thing leased by fortuitous event
• Total = lease extinguished.
• Partial = lessee may choose between a proportional reduction of the
rent and a rescission of the lease.
ARTICLE 1656
• Thing leased is a business or industrial establishment;
• Lessee devotes thing leased to a business or industry;
• Lessor may continue in the same business or industry, unless
there is a stipulation to the contrary.
ARTICLE 1657
• Obligations of the lessee
1. To pay the price of the lease according to the terms stipulated;
2. To use the thing leased as a diligent father of a family, devoting it to
the use stipulated; and in the absence of stipulation, to that which
may be inferred from the nature of the thing leased, according to the
custom of the place;
3. To pay expenses for the deed of lease.
ARTICLE 1658
• Suspension of payment of rent by lessee
1. Lessor fails to make the necessary repairs; or
2. Lessor fails to maintain lessee in peaceful and adequate enjoyment
of the property leased.
ARTICLE 1659
• Non-compliance by lessor/lessee of his/her obligations
under Article 1654/1657
• Aggrieved party may ask for:
1. Rescission of the contract; and
2. Indemnification for damages
OR only #2, allowing the contract to remain in force.
ARTICLE 1660
• Dwelling place/building intended for human habitation
• Of such condition that its use brings imminent and
serious danger to life or health
• Lessee may terminate the lease at once by notifying the lessor,
EVEN if, at the time the contract was perfected, lessee knew of
the dangerous condition or waived the right to rescind the lease
on account of this condition.
ARTICLE 1661
• NOT ALLOWED:
• Alteration by the lessor of the form of the thing leased in
such a way as to impair the use to which the thing devoted
under the terms of the lease.
ARTICLE 1662
• Repairs on the thing leased
• Urgent repairs that cannot be deferred until the termination of the
lease = lessee must tolerate the work, although it may be very
annoying to him, and although during the same, he may be deprived
of a part of the premises.
• Repairs lasting more than 40 days = rent reduced in proportion to the
time, including the first 40 days, and the part of the property of which
the lessee has been deprived.
• Repairs render portion which the lessee and his family need for their
dwelling uninhabitable = lessee may rescind the contract if the main
purpose of the lease is to provide a dwelling place for the lessee.
ARTICLES 1663 & 1664
• Obligation to notify proprietor within the shortest possible
time
1. Usurpation or untoward act committed or being openly prepared to
be carried out by a third person upon the thing leased;
• Lessor not obliged to answer for a mere act of trespass (mere act of
trespass = third person claims no right whatsoever).
• Lessee shall have a direct action against intruder.
2. Need of urgent, necessary repairs.
• Lessee may order repairs at lessor’s cost if lessor fails to make urgent repairs.
• Lessee liable for damages which, through his negligence, may be suffered
by the proprietor.
ARTICLES 1665-1668
• Presumption at the beginning of the lease = lessee received the
thing in good condition, unless there is proof to the contrary
• Presumption applies if there is not statement concerning the
condition of the thing at the time the lease was constituted.
• Return of the thing leased at the end of the lease = in the
condition he received it, save what has been lost or impaired
by:
• Lapse of time;
• Ordinary wear and tear; or
• Inevitable cause.
• Lessee is responsible for:
• Deterioration or loss of thing leased which he himself caused;
• UNLESS he proves that it took place without his fault.
• Burden of proof does not exist if destruction is due to earthquake, flood,
storm, or other natural calamity.
• Deterioration caused by members of his household and by guests and
visitors.
ARTICLES 1670-1672
• Implied new lease
• Lessee continues enjoying the thing leased for 15 days following the
end of the contract of lease;
• Enjoyment is with the consent of the lessor;
• No notice to the contrary has been given previously by either party;
• Period of “implied new lease” = time established in Articles 1682 and
1687;
• Other terms of the original contract revived; and
• Obligations contracted by a third person for the security of the
principal contract shall cease with respect to the new lease.
• Lessee continues enjoying the thing after the contract of lease
has expired and over the lessor’s objection = lessee subject to
responsibilities of possessor in bad faith.
ARTICLES 1673, 1675
• Grounds for ejectment of lessee
1. When the period agreed upon, or that which is fixed for the duration
of leases under Articles 1682 and 1687, has expired;
2. Lack of payment of the price stipulated;
3. Violation of any of the conditions agreed upon in the contract;
4. When the lessee devotes the thing leased to any use or service not
stipulated which causes the deterioration thereof; or if he does not
observe the requirement in No. 2 of Article 1657, as regards the use
thereof.
• Lessee cannot make use of the periods established in Articles
1682 and 1687.
• If based on other grounds, periods can be made use of by lessee
ARTICLE 1674
• Writ of preliminary mandatory injunction
• To restore in his possession a possessor deprived of his possession
• Available in an ejectment case where an appeal is taken
if the higher court is satisfied that:
• lessee's appeal is frivolous or dilatory, or
• the lessor's appeal is prima facie meritorious.
• 10 days within which to file a motion – counted from the time the
appeal is perfected
ARTICLE 1676
• Termination of lease by subsequent buyer
• If lease is not recorded in the Registry of Property – subsequent buyer
may terminate the lease EXCEPT:
• when there is a stipulation to the contrary in the contract of sale, or
• when the purchaser knows of the existence of the lease.
• Subsequent buyer exercises right - lessee may demand that:
• he be allowed to gather the fruits of the harvest which corresponds to the
current agricultural year and
• the vendor indemnify him for damages suffered.
• Fictitious sale to extinguish lease - right not available to supposed
buyer
• Presumption, fictitious sale = if at the time the supposed buyer demands the
termination of the lease, the sale is not recorded in the Registry of Property.
ARTICLE 1677
• Buyer in sale with right of redemption = can eject lessee only at
the end of the period of redemption
ARTICLE 1678
• Reimbursement for useful improvements
• Made by lessee in good faith; and
• Useful improvement is suitable to the use for which the lease is
intended and does not alter the form or substance of leased property.
• Amount to be reimbursed – ½ of value of improvements at the
end of the lease.
• Lessor refuses to reimburse = lessee may remove useful improvements, even
though the principal thing may suffer damage thereby (but damage caused must
not be more than what is necessary to remove the useful improvement)
• Ornamental expenses
• No reimbursement
• Lessee may remove the ornamental objects, provided:
• no damage is caused to the principal thing, and
• lessor does not choose to retain them by paying their value at the time the
lease is extinguished.
ARTICLE 1679
• Place of payment of rent = lessee’s domicile (domicile of
debtor)
• Time of payment of rent = custom of the place.

IF NOT STIPULATED!
SPECIAL PROVISIONS FOR LEASE OF RURAL LANDS
ARTICLES 1680-1681
• No right to a reduction of rent:
• Sterility of land leased;
• Loss of fruits due to ordinary fortuitous event;
• Loss of fruits after they have been separated from their stalk, root or
trunk.
• Right to a reduction of rent:
• Loss of more than ½ of fruits through extraordinary and unforeseen
fortuitous events, EXCEPT when there is a specific stipulation to the
contrary.
• Extraordinary fortuitous events are understood to be: fire, war, pestilence,
unusual flood, locusts, earthquake, or others which are uncommon, and which
the contracting parties could not have reasonably foreseen.
ARTICLES 1682-1683
• Duration of lease of rural land = for all the time necessary for the
gathering of the fruits which the whole estate leased may yield in one
year, or which it may yield once, although two or more years have to
elapse for the purpose IF the duration is not fixed in the contract.
• Outgoing lessee – must allow incoming lessee or lessor use of premises
and other means necessary for the preparatory labor for the following
year.
• Incoming lessee or lessor – must permit outgoing lessee to do whatever
may be necessary for the gathering or harvesting and utilization of the
fruits, all in accordance with the custom of the place.
ARTICLES 1684-1685
• Land tenancy on shares shall be governed by:
• special laws,
• the stipulations of the parties,
• the provisions on partnership, and
• by the customs of the place.
• Tenant on shares - cannot be ejected except in cases specified
by law.
SPECIAL PROVISIONS FOR LEASE OF URBAN LANDS
ARTICLE 1686
• Custom of place – determines kind of repairs on urban property
for which lessor shall be liable (in default of special stipulation)
• In case of doubt, repairs are chargeable against lessor.
• If period of lease has not been fixed:
• From year to year – if rent agreed upon is annual;
• From month to month – if monthly rent;
• From week to week - if rent is weekly;
• From day to day – if rent is to be paid daily.
 • Even though a monthly rent is paid, and no period for the lease has been set – the
courts may fix a longer term for the lease after the lessee has occupied the
premises for over one year.
• If the rent is weekly, and no period for the lease has been set – the courts may
likewise determine a longer period after the lessee has been in possession for
over six months.
• In case of daily rent, and no period for the lease has been set –the courts may also
fix a longer period after the lessee has stayed in the place for over one month.
(1581a)
• Period of lease of furniture = period of lease of premises when
the lessor of a house, or part thereof, used as a dwelling for a
family, or when the lessor of a store, or industrial
establishment, also leases the furniture.
• LA JOLLA, INC. vs. CA (GR No. 115851, 20 June 2001)
“In the case at bar, it is disputed that the lease was verbal, that the rentals were
paid monthly, and that proper demand and notice by the lessor to vacate was given.
Under existing jurisprudence, a verbal contract of lease between owner and lessee on
a month-to-month basis is a lease with definite period and such expires after the last
day of any given thirty-day period, upon proper demand and notice by the lessor to
vacate. Thus, the appellate court should not have extended the period of lease
considering that the potestative authority of the courts to fix a longer term for a lease
under Article 1687 of the Civil Code applies only to cases where there is no period
fixed by the parties.
“Furthermore, Article 1675 of the Civil Code excludes cases falling under Article
1673 (which provides among others, that the lessor may judicially eject the lessee
when the period agreed upon or that which is fixed has expired) from the cases
wherein, pursuant to Article 1687, courts may fix a longer period of lease. All these
considered, this Court holds that the Court of Appeals erred in granting an extension
period of two (2) years for the lease when the underlying facts and circumstances of
the case did not warrant the same.”