1624.

An assignment of credits and other incorporeal rights shall instrument or the instrument is recorded in the Registry of
be perfect in accordance with the provisions of Art. 1475. Property in case the assignment involves real property.

Assignment of credit = is a contract by which the owner of a credit 1626. The debtor who, before having knowledge of the assignment
and other incorporeal rights transfers either onerously or pays his creditor shall be released from the obligation.
gratuitously to another (assignee) his rights and actions against a
Effect of payment by debtor after assignment of credit
third person (debtor)
- Before notice = assignee has right of action against the
- Consensual, bilateral, onerous and commutative,
assignor ( original creditor)
- If pure liberality= donation
- After notice = debtor acts in bad faith, can be made to pay
- If there is valuable consideration = sale or purchase
assignee again
Assignee steps into the shoes of the original creditor, acquires not
1627. The assignment of a credit includes all the accessory rights,
only the credit itself but the right to endorse it as against the debtor
such as a guaranty, mortgage, pledge or preference.
of the assignor.
1628. The vendor in good faith shall be responsible for the
Assignment is perfected from the moment the parties agree upon
existence and legality of the credit at the time of the sale, unless it
the credit/right assigned. Acquire ownership only upon delivery (all
should have been sold as doubtful but not for the solvency of the
kinds of delivery).
debtor, unless it has been expressly stipulated or unless the
Consent of debtor not necessary to produce legal effects. Mere insolvency was prior to the sale and of common knowledge.
notice is sufficient.
Even in these cases he shall only be liable for the price received
Renunciation = abandonment of right w/o transfer and for the expenses specified in No 1 of Art 1616.

Agency = representation , agent acts for principal The vendor in bad faith shall always be answerable for the
payment of all expenses and for damages.
Substitution = change of previous debtor with new debtor
An assignor warrants only the existence and legality of the credit,
Subrogation = change in the creditor
unless the credit had been sold as doubtful.
Dation in payment = alienation of property to creditor for
No warranty as to the solvency of the debtor UNLESS it is expressly
satisfaction of debt
stipulated OR UNLESS the insolvency was already existing prior to
1625. An assignment of a credit, right or action shall produce no the sale and of public knowledge.
effect as against third persons, unless it appears in a public
Liability of the assignor in good faith – prior received and expenses
of the contract and other legitimate payments.
Assignor in bad faith is liable for payment of price, expenses and
damages.
1629. In case the assignor in good faith should have made himself
responsible for the solvency of the debtor, and the contracting
parties should not have agreed upon the duration of the liability, it
shall last for one year only, from the time of the assignment if the
period had already expired.
If the credit should be payable within a term or period which has
not yet expired, the liability shall cease one year after then
maturity.
Does not apply if assignor acted in bad faith.
Duration of assignor’s liability
1. If there is stipulation, period fixed
2. If no stipulation, for 1 year from the assignment of credit
when the period for payment of the credit has expired
3. For one year after its maturity, when such period for
payment has not yet expired.
- To prevent fraud, to oblige the assignee to exert efforts in
the recovery of the credit
1630. One who sells an inheritance without enumerating the
things of which it is composed shall only be answerable for his
character as an heir.
Hereditary rights in an estate can be validly sold without need for
approval by court.
Law prohibits sale of future inheritance .
The seller of hereditary rights warrants only the fact of his heirship
but he does not warrant the objects which make up his inheritance.
Sale of hereditary rights = presumes existence of a contract of sale
between the parties
Waiver of hereditary rights = mode of extinction of ownership,
intentional relinquishment
1631. One who sells for a lump sum the whole of a certain rights,
rents or products, shall comply by answering for the legitimacy of
the whole in general’ but he shall not be obliged to warrant each
of the various parts of which it may be composed, except in the
case of eviction from the whole or the part of greater value.
Vendor warrants only the legitimacy of the whole and NOT the
various parts.
Vendor is not liable for eviction of each parts UNLESS the eviction
involves the whole or part of greater value.
1632. Should the vendor have profited by some of the fruits or
received anything from the inheritance sold, he shall pay the
vendee thereof, if the contrary has not been stipulated.
Unless otherwise stipulated, fruits of an inheritance are included in
the sale thereof.
1633. The vendee shall on his part, reimburse the vendor for all
that the latter may have paid for the debts of and charges on the
estate and satisfy the credits he may have against the same, unless
there is an agreement to the contrary.
1634. When a credit or other incorporeal right in litigation is sold,
the debtor shall have a right to extinguish it by reimbursing the
assignee for the price the latter paid therefor, the judicial costs,
incurred by him, and the interest on the price from the day on
which the same was paid.
A credit or other incorporeal right shall be considered in litigation
from the time the complaint concerning the same is answered.
The debtor may exercise his right within 30 days from the date the
assignee demands payment from him.
Is an instance of legal redemption.
Requisites:
1. There must be a sale or assignment of credit or other
incorporeal right.
2. Credit or incorporeal right must be in litigation
3. There is a pending litigation at the time of assignment.
4. Assignee must have demanded payment from the debtor
5. Debtor must reimburse the assignee (price, judicial costs,
interest on the price)
6. Reimbursement must be made by debtor within 30 days
from date assignee demands payment from him.
1635. From the provisions preceding the article shall be excepted
the assignment or sales made:
1. to a co-heir or co-owner of the right assigned;
2. to a creditor in payment of his credit;
3. to the possessor of a tenement or piece of land which is subject
to the right in litigation assigned.
Three instances of assignments or sales as exceptions to the
provisions of Art. 1634. The debtor cannot redeem if credit or other
incorporeal right is not in litigation.
Sale to a co-heir or co-owner - the latter may still sue debtor for the
corresponding share to the former in credit.
Sale to a creditor – assignee cannot be considered as a vendee of a
right in litigation
Sale to the possessor of property in question - reason is that
assignee is moved by a desire to preserve the property and not to
speculate at the expense of the debtor.
1636-1637 Read Codal.
1638. By the contract of Barter or exchange one of the parties
binds himself to give on thing in consideration of the other’s
promise to give another thing.
Perfected from the moment there is a meeting of minds upon the
things promised by each party.
Consummated from the time of mutual delivery by the contracting
parties.
1639. If one of the contracting parties having received the thing
promised him in barter, should prove that it did not belong to the
person who gave it, he cannot be compelled to deliver that which
he offered in exchange, but he shall be entitled to damages.
1640. One who loses by eviction the thing received in barter may
recover that which he gave in exchange with a right to damages, or
he may only demand an indemnity for damages. However, he can
only make use of the right to recover the thing which he has
delivered while the same remains in the possession of the other
party, and without prejudice to the rights of acquired in good faith
in the meantime by a third person.
Injured party is given the option to recover the property with
damages or claim indemnity for damages, however it is subject to
the rights of innocent third persons.
1641. Barter shall be governed by the provisions of the preceding
title relating to sales.
LEASE
1642. The contract of lease may be of things, of work and service.
An agreement whereby one person (lessor) binds himself to grant
temporarily the enjoyment or use of a thing or to render some work
or service to another (lessee) who undertakes to pay rent,
compensation, or price therefor.
Lease is only a personal right. It becomes a real right when it is
recorded in the Registry of Property.
Lease contracts usually survive the death of the parties except if the
contract states otherwise.
LEASE CONTRACT MAY BE:
1. Lease of things – lessor to deliver the thing which is the
object thereof, right of lessee to peaceful and adequate
enjoyment for a price certain
2. Lease of work – contract of a piece of work, execute a piece
of work for the employer in consideration of a price or
compensation
3. Lease of service – housekeeper, laborer, employee,
common carrier, do or perform a service in consideration of
compensation.
Consensual, bilateral, onerous, commutative, nominate and
principal.
1643. In the 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. However, no lease
for more than 99 years shall be valid.
Applicable to movable or immovable.
Object of the lease must be within the commerce of men, otherwise
it is void.
Lessor need not be the owner , as long as he can transmit its
enjoyment or use to the lessee since ownership is not being
transferred.
Period of lease may be definite or indefinite. When it is definite, the
longest is 99 years.
A lessee is stopped from asserting title to the thing leased against
the lessor or to deny the lessor’s title, or assert a better right while
he remains in possession of the leased property and until he
surrenders possession to the lessor.
Lease v. Sale
Enjoyment or use is transferred/ ownership is transferred
Transfer is temporary/permanent
Lessor need not be the owner/ seller must be owner
______________________________________________________
A lease of personalty with option to buy is an installment sale and
not a lease.
Lease v. Mutuum
Owner does not lose his ownership/ lender loses ownership
Relationship is one of lessor and lessee/ creditor or oblige and
debtor or obligor
Subject matter may be real and or personal/ only money or any
other fungible thing
Governed by statute of frauds/ not
Lease v. Usufruct
Real right where the lease is registered/ always a real right
Lessor may or may not be the owner/ creator of the right must be
the owner or one duly authorized
Active obligation to maintain the lessee in the enjoyment / owner
has passive duty to allow the usufructuary to enjoy or use the same
Lessee generally pays no taxes/ usufructuary pays the annual
charges and taxes
Lessee no obligation to pay repairs/ usufructuary is obliged to make
ordinary repairs
Lessee cannot constitute a usufruct/ usufructuary may lease to
another
Created only be contract/ may be created by law
1644. In the lease of work or 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.
Lease of work = object is the execution of a piece of work for an
employer by an independent contractor
Lease of service = performance of some service or an employer by a
househelper or laborer.
Agency = representation, executes a juridical act for and in behalf of
his principal, presumed for a compensation, will of one is sufficient,
3 persons are involved, risk is borne by the principal since the agent
acts merely as his representative, agent exercises discretionary
powers.
Partnership = every partner is an agent of the partnership for the
purpose of its business, for the realization of profits, juridical
personality is formed, perform acts conducive to their own business
purposes, partners share in the profits or losess, every partner as an
agent of the partnership, exercises discretionary powers.
1645. 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 Rural and Urban Lands
1646. The persons disqualified to buy referred to in 1490 and 1491
are also disqualified to become lessees of the things mentioned
therein.
Rural= tenement in land adopted and used for agricultural or
pastoral purposes
Relative incapacity of husband and wife to sell property to each
other
Foreigners can lease real property. Max is 25 years renewable for
another period of 25 years.
Any foreign investor shall be allowed to lease private lands for a
period not exceeding 50 years renewable once for not more than 25
years. Solely for the purpose of investment.
1647. If a lease is to be recorded in the Registry of Property, the
following persons cannot constitute the same without proper
authority: the husband with respect to the wife’s paraphernal real
estate, the father or guardian as to the property of the minor or
ward, and the manager without special power.
1648. Every lease of real estate may be recorded in the Registry of
Property. Unless a lease is recorded, it shall not be binding upon
third persons.
Lease of personal property cannot be registered.
1649. The lessee cannot assign the lease without the consent of
the lessor unless there is a stipulation to the contrary.
Lessee makes an absolute transfer of his lease. New juridical
relation between the lessor and assignee (converted into a new
lessee).
Lessee cannot assign the lease without the consent of the lessor,
unless there is a stipulation granting him that right.
1650. When in the contract of lease of things there is no express
prohibition, the lessee may sublet the thing leased, in whole or in
part, without prejudice to his responsibility for the performance of
the contract toward the lessor.
This allows lessee to sublease the property in absence of express
prohibition.
If prohibition is merely implied, a sublease is still allowed.
Lessee still remains a party to the contract.
2 juridical relations, 2 leases
Sublessee does not have any direct action against the lessor.
1651. Without prejudice to his obligation toward the sublessor,
the sublessee is bound to the lessor for all acts which refer to the
use and preservation of the thing leased in the manner stipulated
between the lessor and the lessee.
- Exception to the rule. Lessor may bring an action directly against
the sublessee if he does not use and preserve the thing leased in
accordance with the agreement.
1652. The sublessee is subsidiarily liable to the lessor for any rent
due from the lessee. However, the 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.
Payments of rent in advance by the sublessee shall be deemed not
to have been made, so far as the lessor’s claim is concerned,
unless said payments were effected in virtue of the custom of the
place.
Grants the lessor right to demand payment from the sublessee the
rents which the sublessor failed to pay.
Does not exempt the sublessee from his obligation to pay the
sublessor.
Liability is limited to the amount of rent due from him to the
sublessor. Future rents cannot be recovered.
There must be a judgment cancelling the lessee’s principal lease
contract or ousting the lessee before the sublessee becomes
subsidiarily liable. Mere demand is not sufficient.
1653. The provisions governing warranty contained in the Title on
Sales, shall be applicable to the contract of 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.
Lessor likewise warrants:
1. Right to lease the thing
2. That the lessee shall enjoy the legal and peaceful possession
3. The thing is fit for the use for which it is intended
4. Free from any hidden fault or defect
In case of eviction of the lessee, the return of the rents paid is
required, a reduction shall be made taking into account the period
during which the lessee enjoyed the thing.
Lessor’s warranty is distinct from his liability for damages.
RIGHTS AND OBLIGATIONS OF THE LESSOR AND LESSEE.
1654. The lessor is obliged :
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.
Another obligation is that the lessor cannot alter the form of the
thing leased.
Failure to fulfill any of these, will render him liable for damages.
Lessee may ask for rescission, and indemnification for damages or
only the latter, allowing the contract to remain in force.
Delivery may be actual or constructive.
Lessor is obliged to make necessary repairs UNLESS there is a
stipulation to the contrary.
If the lessor fails in the performance of this duty, lessee may
suspend the payment of rent or avail other remedies.
Lessor is not liable for repairs for damages caused by the lessee.
Lessee must notify lessor for the necessary repairs.
Lessor is not liable for physical trespass.
1655. If the thing leased is totally destroyed by a fortuitous event,
the lease is extinguished. If the destruction is partial, the lessee
may choose between a proportional reduction of the rent and a
rescission of the lease.
If reduction of the rent is chosen, the same shall be retroactive to
the date the partial destruction occurred.
Partial destruction should be substantial as to defeat the purpose of
the lessee entering into the contract of lease.
1656. The lessor of a business or industrial establishment may
continue engaging in the same business or industry to which the
lessee devotes the thing leased, unless there is a stipulation to the
country.
1657. The lessee is obliged:
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 the expenses for the deed of the lease.
Another obligation of the lessee is to notify the lessor of every
usurpation or untoward act by any third person.
Obligation to pay lessee arises when the thing leased has been
delivered.
Lessor has the right to terminate the lease upon expiration of the
term and to increase the rent in case of renewal.
1658. The lessee may suspend the payment of the rent in case the
lessor fails to make the necessary repairs or to maintain the lessee
in peaceful and adequate enjoyment of the property leased.
In case of repairs, lessee may suspend payment from the time
demand is made and the lessor fails to perform his obligation.
In case of eviction, the lessee is released from the obligation to pay
rents from the time he is unlawfully dispossessed.
1659. If the lessor or the lessee should not comply with the
obligations set forth in Articles 1654 and 1657, the aggrieved party
may ask for the rescission of the contract and indemnification for
damages, or only the latter, allowing the contract to remain in
force.
Rescission is granted only to the injured party and cannot be availed
of the wrongdoer.
A lessor may seek rescission and ejectment of the lessee
simultaneously in a single action.
Rescission will not be permitted for slight or casual breach of the
contract.
1660. If a dwelling place or any other building intended for human
habitation is in such a condition that its use brings imminent and
serious danger to life or health, the lessee may terminate the lease
at once by notifying the lessor, even if at the time the contract was
perfected the former knew of the dangerous condition or waived
the right to rescind the lease on account of this condition.
Lessee may terminate the lease at once by notice to the lessor in
case the dwelling place or any other building is unfit for human
habitation and is dangerous to life or health.
1661. The lessor cannot alter the form of the thing leased in such a
way as to impair the use to which the thing is devoted under the
terms of the lease.
Lessor can alter the form of the lease provided there is no
impairment in the use to which the is devoted.
Alteration = modification in such a manner that would destroy the
substance of the thing or change its conditions in such a way to
render the thing unserviceable for the use intended.
Lessee may alter the form of the lease so long as the value of the
property is not impaired.
1662. If during the lease it should become necessary to make some
urgent repairs upon the thing leased, which cannot be deferred
until the termination of the lease, the lessee is obliged to 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.
If the repairs last more than 40 days the rent shall be reduced in
proportion to the time – including the first forty days- and the
party of the property of which the lessee has been deprived.
When the work is of such a nature that the portion which the
lessee and his family need for their dwelling becomes
uninhabitable, he may rescind the contract if the main purpose of
the lease is to provide a dwelling place for the lessee.
Burden is on the lessor to prove the urgency of the repair.
If repairs last for more than 40 days, the lessee is entitled to a
proportionate reduction of the rent including the first 40 days.
Rescission of the lease may be availed if the purpose of the lease is
to provide a dwelling place.
1663. The lessee is obliged to bring to the knowledge of the
proprietor, within the shortest possible time, every usurpation or
untoward act which any third person may have committed or may
be openly preparing to carry out upon the thing leased.
He is also obliged to advise the owner with the same urgency , of
the need of all repairs included in No. 2 of Art. 1654.
In both cases, the lessee shall be liable for the damages which,
through his negligence, may be suffered by the proprietor.
If the lessor fails to make urgent repairs, the lessee in order to
avoid an imminent danger, may order the repairs at the lessor’s
cost.
Adds the obligation to notify the lessor of any usurpation and of
need for repairs. Lessee shall be liable for damages through his
negligent failure to give the notice to the lessor.
1664. The lessor is not obliged to answer for a mere act of trespass
which a third person may cause on the use of the thing leased: but
the lessee shall have a direct action against the intruder.
There is a mere act of trespass when the third person claim no
right whatever.
Mere act of trespass (disturbance in fact) – 3 rd person claims no
right whatever, lessor is not liable to the lessee
Trespass in law (disturbance in law) – 3rd person claims a legal right.
1665. The lessee shall return the thing leased, upon the
termination of the lease, just as he received it, save what has been
lost or impaired by the lapse of time, or by ordinary wear and tear,
or from an inevitable cause.
Lessee is not liable for the loss or depreciation due to: lapse of time;
ordinary wear and tear and inevitable cause or fortuitous event.
Whole property subject to lease must be returned to the lessor.
One year period for filing a complaint for unlawful detain is
reckoned from the date of the last demand.
1666. In the absence of a statement concerning the condition of
the thing at the time the lease was constituted, the law presumes
that the lessee received it in good condition, unless there is proof
to the contrary.
Presumption of receipt of thing leased in good condition.
1667. The lessee is responsible for the deterioration or loss of the
thing leased, unless he proves that it took place without his fault.
This burden of proof on the lessee does not apply when the
destruction is due to earthquake, flood, storm or other natural
calamity.
GR: Lessee is responsible on the presumption that he is guilty of
fault or negligence. Hence burden of proof is upon lessee to
overcome the presumption.
No presumption when destruction is caused by natural calamity.
1668. The lessee is liable for any deterioration caused by members
of his household and by guests and visitors.
1669. If the lease was made for a determinate time, it ceases upon
the day fixed, without the need of a demand.
Lease terminates on the day fixed without need of a demand or
notice to vacate and return possession.
A court is without authority to extend a lease where the stipulated
period of the contract has already expired.
1670. If at the end of the contract the lessee should continue
enjoying the thing leased for fifteen days with 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 1682 and 1687. The other terms of the original
contract shall be revived.
An implied new lease arises when the lessee, with the acquiescence
of the lessor, holds over after the expiration of the contract, under
the same terms and conditions.
Requisites:
1. original contract of lease is terminated
2. The lessee continues enjoying the thing leased at the end of
the contract for at least 15 days;
3. The continuation of the occupation by lessee is with
acquiescence of the lessor
4. Lessor or lessee has not previously given a notice to vacate
No implied renewal where parties stipulate that there would be no
renewal by implication.
Partial payments cannot be considered as a renewal of lease.
A lessee cannot claim there is a valid and binding renewal of the
lease when he admits not complying with the terms of the contract
on payment of rentals for the continued possession.
1671. If the lessee continues enjoying the thing after the
expiration of the contract over the lessor’s objection, the former
shall be subject to the responsibilities of a possessor in bad faith.
Lessor may bring an action of unlawful detainer to recover
possession.
Damages in forcible and detainer cases mean rents or the
reasonable compensation for the use and occupation.
Fair rental value = amount at which a willing lessee would pay and a
willing lessor would receive for the use of certain property.
1672. In case of an implied new lease, the obligation contracted by
a third person for the security of the principal contract shall cease
with respect to the new lease.
Accessory obligations are also extinguished.
1673. The lessor may judicially eject the lessee for any of the
following causes:
1. When the period agreed upon, or that which is fixed for the
duration of lease under Art. 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 1657, as regards the
use thereof.
The ejectment of tenants of agricultural lands is governed by
special laws.
Issue in ejectment proceedings is the possessors physical
possession.
A demand to pay and to vacate the premises is a condition
precedent for the institution of an ejectment suit.
A letter demanding payment and informing the lessee that a suit
would be filed against him is sufficient.
Must be filed within 1 year after the occurrence of the unlawful
deprivation or withholding of possession. Beyond it is an an accion
publiciana with the RTC.
If lessor refuses to receive payment, lessee must consign in the
court the rent due from him.
When a lease provides for the payment of the rent in installments,
each failure to pay an installment is a separate cause of action.
1674. In ejectment cases where an appeal is taken, the remedy
granted in 539, second paragraph, shall also apply if the higher
court is satisfied that the lessee’s appeal is frivolous or dilatory, or
that the lessor’s appeal is prima facie meritorious. The period of
ten days is referred to in said article shall be counted from the
time the appeal is perfected.
Lessor is entitled to writ of preliminary injunction to restore him in
his possession, granted by the RTC.
The judgment is also binding against not parties thereto:
1. Trespassers, squatters, or agents, of the defendant
fraudulently occupying the property.
2. Guests or other occupants of the premises with the
permission of the defendant
3. Transferees pendente lite;
4. Sublessees or co-lessees;
5. Members of the family, relatives, and other privies of the
defendant.
1675. Except in cases stated in 1673, the lessee shall have a right
to make use of the periods established in 1682 and 1687.
1676. The purchaser of a piece of land which is under a lease that
is not recorded in the Registry of Property may terminate the
lease, save when there is a stipulation to the contrary in the
contract of sale, or when the purchaser knows of the existence of
the lease.
If the buyer makes use of this right, the lessee may demand that
he be allowed to gather the fruits of the harvest which
corresponds to the current agricultural year and that the vendor
indemnify him for damages suffered.
If the sale is fictitious, for the purpose of extinguishing the lease, lessor refuse to reimburse said amount, the lessee may remove
the supposed vendee cannot make use of the right granted in the the improvements, even though the principal thing may suffer
first paragraph of this article. The sale is presumed to be fictitious damage thereby. He shall not, however, cause any more
if at the time the supposed vendee demands the termination of impairment upon the property leased than is necessary.
the lease, the sale is not recorded in the Registry of Property.
With regard to ornamental expenses, the lessee shall not be
(1571a)
entitled to any reimbursement, but he may remove the
The purchaser of a piece of land under an unrecorded lease may ornamental objects, provided no damage is caused to the principal
terminate the lease unless: (SEF) thing, and the lessor does not choose to retain them by paying
their value at the time the lease is extinguished. (n)
a. There is a stipulation in the contract of the sale that he must
respect the existing lease; Not obligatory.
b. He knows of the existence of the lease;
1678 (1) gives the lessor the option of paying the lessee one-half of
c. The property is sold fictitiously just to terminate the lease.
the value of the improvements or allow the lessee to remove the
An innocent purchaser for value without notice of an unrecorded improvements instead of reimbursing him.
lease has a right to rely on the certificate of title. If the lease is not
Requisites:
annotated thereon, the lessee does not deserve to be protected.
1. lessee should introduce improvements in good faith
1677. The purchaser in a sale with the right of redemption cannot
2. improvements must be suitable to the use for which the
make use of the power to eject the lessee until the end of the
lease is intended, without altering the form and substance
period for the redemption.
of the property leased
Not applicable to a case where a vendor on disposing of real
Necessary expenses – it is lessors obligation to provide for the
property under right of repurchase, continues nevertheless in
necessary expenses.
possession as a tenant of the purchaser.
1679. If nothing has been stipulated concerning the place and the
There is still a chance the ownership may be reverted to the original
time for the payment of the lease, the provisions or article 1251
lessor.
shall be observed as regards the place; and with respect to the
1678. If the lessee makes, in good faith, useful improvements time, the custom of the place shall be followed. (1574)
which are suitable to the use for which the lease is intended,
Payment should be at the place designated in the lease contract; in
without altering the form or substance of the property leased, the
the absence of a stipulation, at the domicile of the lessee or the
lessor upon the termination of the lease shall pay the lessee one-
place where the leased premises are located, or if the rent is
half of the value of the improvements at that time. Should the
payable in the form of a determinate thing, wherever the thing
might be at the moment the contract was entered into.
Time of payment= custom of the place shall be followed unless
there is a contrary stipulation in the contract.
SPECIAL PROVISIONS FOR LEASES OF RURAL LANDS
1680. The lessee shall have no right to a reduction of the rent on
account of the sterility of the land leased, or by reason of the loss
of fruits due to ordinary fortuitous events; but he shall have such
right in case of the loss of more than one-half of the fruits through
extraordinary and unforeseen fortuitous events, save always 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.
1681. Neither does the lessee have any right to a reduction of the
rent if the fruits are lost after they have been separated from their
stalk, root or trunk.
To relieve poor farmers from the harsh consequences of their
contracts with rich landowners.
The lessee is entitled to reduction of rent:
Requisites: (ROES)
1. land leased is rural
2. More than one half of the fruits have been lost
3. The loss occurred through extraordinary and unforeseen
fortuitous event;
4. There is no specific stipulation that the lessee is
nevertheless not entitled to reduction.
Fortuitous event must be one which the parties could not have
reasonably foreseen.
Rent must be reduced proportionately. Manresa’s formula = Normal
fruits are to fruits actually received as rent stipulated is to X.
1682. The lease of a piece of rural land, when its duration has not
been fixed, is understood to have been 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. (1577a)
Duration of lease depends on the stipulations, it cannot be affected
by the more or less valuable improvements voluntarily made by the
lessee upon the property.
In absence of stipulation, the duration is fixed by law:
1. The time necessary to gather the fruits which ordinarily
would cover one year in case of agricultural crops
2. Or more than one year in case the land may yield only once
and two or more years may have to elapse for the purpose.
1683. The outgoing lessee shall allow the incoming lessee or
the lessor the use of the premises and other means necessary
for the preparatory labor for the following year; and,
reciprocally, the incoming lessee or the lessor is under
obligation to permit the 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.
 Even before the end of the lease, in the absence of a contrary
stipulation, a reciprocal obligation is given:
1. Outgoing lessee shall allow incoming lessee or lessor to
make necessary preparatory work for the crops the ff. year
2. Incoming lessee and lessor shall permit the outgoing lessee
to gather or harvest and utilize the fruits he has produced.
1684. 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. (1579a)
1685. The tenant on shares cannot be ejected except in cases
specified by law.
Agricultural tenancy is now governed by R.A. No. 3844, (Code of
Agrarian Reforms)
Agricultural tenancy classified into:
1. Share tenancy – produce is divided between the landholder
and the tenant in proportion to their respective
contributions (abolished)
2. Leasehold tenancy – rent is paid by the tenant either in
percentage of the production or a fixed amount in money or
both.
Modes of extinguishment of leasehold: (AWVSAD-TALMJE)
1. Abandonment of the landholding without the knowledge of
the lessor.
2. Voluntary surrender of the landholding by the lessee,
written notice of which shall be served 3 months in
advance:
3. Absence of a successor or heir in the event of death or
permanent incapacity of the lessee
4. Termination of the leasehold by the lessee under Section 28
5. Acquisition of the land in question by the lessee;
6. Mutual consent of the parties
7. Judicial ejectment of the lessee under Sec. 36
Causes for dispossession of leasehold tenant:
1. Declaration of suitability for non-agricultural purposes
2. Non-compliance with obligations
3. Use of land contrary to stipulations
4. Non-adoption of proven farm practices
5. Wrongful injury to land
6. Non-payment of rental
7. Employment of sub-lessee
SPECIAL PROVISIONS FOR THE LEASE OF RURAL LANDS
1686. In default of a special stipulation, the custom of the place
shall be observed with regard to the kind of repairs on urban
property for which the lessor shall be liable. In case of doubt it is
understood that the repairs are chargeable against him. (1580a)
Kind of repairs required to be made is that in the lease agreement,
in its absence, it must be determined in accordance with the custom
of the place.
In case of doubt, the cost of repairs is chargeable against the lessor.
1687. If the period for the lease has not been fixed, it is
understood to be from year to year, if the rent agreed upon is
annual; from month to month, if it is monthly; from week to week,
if the rent is weekly; and from day to day, if the rent is to be paid
daily. However, 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, the courts may likewise determine a longer
period after the lessee has been in possession for over six months.
In case of daily rent, the courts may also fix a longer period after
the lessee has stayed in the place for over one month.
Applies only to a lease without a fixed period. Sublessee is not
entitled to its benefits.
Does not apply to a fixed period whether definite or indefinite.
Lease stipulating that lessee will vacate as soon as the lessor needed
the premises is a fixed period.
Does not apply to a lease subject to a resolutory condition.
Even if the parties agreed to the periodical payment of rentals, the
law empowers the courts, to exercise their discretion in fixing the
term, depending on the particular circumstances of the case.
Does not give an absolute right to an extension but merely gives the
courts discretion to allow additional time to prepare for his eventual
ejection.
Not necessary for lessor to file an independent action.
No law conferring on the lessee the preferential right to occupy the
premises over other prospective lessees after the termination of the
lease.
1688. 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, the lease of the latter
shall be deemed to be for the duration of the lease of the
premises. 
The lessor merely leases the furniture. Deemed to be for the
duration of the lease.

The court is authorized to fix a longer term if the lessee who is not
at fault has been in occupation of the premises for a certain period
and the lessor decided to terminate the lease.

Extension of the lease should be commensurate with the period

during which the lessee had been occupying the premises.

Does not contemplate an unwarranted extension of the period off

the lease as to make the period indefinite.

Does not apply to a lease whose termination is expressly left to the

lessee.