CMS Investment and Management Corporation vs.

Intermediate Appellate Court

No. L-64325. October 3, 1985
MAKASIAR, C.J.:
Facts:
Private respondent, Jose Tan, entered into an oral contract of lease for 10 years with
petitioner CMS Investment and Management Corporation for P2,000.00 monthly rental which
was later on increased to P3,000.00 a month. Private respondent constructed a building and
opened a business known as Timber Country Lumber. Private respondent paid rentals with
advances when Carlos Moran Sison through Wilfredo Guerzon informed him to vacate the
premises but countered that he could stay in the premises for not less than 10 years. When he
went to the shop, he was that it was padlocked by Guerzon and other men and that his laborers
could not enter the premises as there are several men guarding the premises. When private
respondent inquired to Guerzon, the latter told him at it was petitioner Luis Sison’s instruction.
Later, private respondent filed for damages which the trial court granted the writ of preliminary
mandatory injunction while petitioner filed a motion to dissolve such writ. Private respondent
filed an amended complaint adding new averments of the lessor-lessee relationship. However,
petitioner filed for TRO which was granted by IAC. Urgent motions for reconsideration were
filed by private respondent but the IAC denied the petition. Thus, this petition.
Issue:
Whether th
Rule of law:
Article 1659 of the New Civil Code
Application:
An action for damages specifically applicable in a lessor-lessee relationship is authorized
in Article 1659 of the New Civil Code. It is very clear that Article 1659 of the New Civil Code
allows the aggrieved party two remedies: (1) rescission with damages, or (2) damages only
"allowing the contract to remain in force." The private respondent opted for the second remedy
granted by Article 1659 of the New Civil Code, hence the action for "damages with preliminary
mandatory injunction." Section 3 of Article 1654 of the New Civil Code requires that the lessor
must "maintain the lessee in the peaceful and adequate enjoyment of the lease for the entire
duration of the contract." The act of padlocking the offices of the private respondent on June 8,
1982 and the act of enclosing with barbed wire the loased land and the private respondent's
offices are a clear violation by the lessor, the petitioners herein, of their third obligation
mandated by Section 3 of Article 1659 of the New Civil Code. These acts by the lessor set at
naught the duty required of the lessor by the New Civil Code.
Conclusion:
 WHEREFORE, THE HEREIN PETITION IS HEREBY DISMISSED. THE
TEMPORARY RESTRAINING ORDER IS HEREBY LIFTED