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LA VILLE
COMMERCIAL CORPORATION
G.R. No. 152801
Petitioner: COSMO ENTERTAINMENT MANAGEMENT, INC.
Respondent: LA VILLE COMMERCIAL CORPORATION
Ponente: CALLEJO, SR. J.
Facts
The respondent, La Ville Commercial Corporation, is the registered
owner of a plot of property at the corner of Kalayaan and Neptune Streets in
Makati City covered by Transfer Certificate of Title (TCT) No. 174250 of
the Makati City Registry of Deeds, as well as the commercial building
thereon.
It entered into a Contract of Lease with petitioner Cosmo Entertainment
Management, Inc. over the subject property on March 17, 1993, for a period
of seven years, with a monthly rental of P250 per square meter of the
building's floor area and a security deposit of P447,000 to guarantee faithful
compliance with the lease agreement's terms and conditions. The petitioner
obtained ownership of the subject property after the contract was signed.
The petitioner, on the other hand, experienced commercial setbacks and was forced to
shut down operations in September 1996. The petitioner then fell behind on its rent
payments. As a result, on February 1, 1997, the respondent issued a demand to the
petitioner to leave the premises and pay the accrued rentals plus interest, which
totaled P740,478.91 as of January 31, 1997. In response to the demand, the petitioner
stated that its overdue rentals totaled P698,500, and that because it paid a security
deposit of P419,100 to the respondent, that sum should be applied to the unpaid
rentals, leaving just P279,400 in outstanding accounts payable. The respondent
requested that the interest charges be waived and it be given time to find a solution to
its financial problems.
After failing negotiations between the parties, the respondent demanded that
the petitioner pay the outstanding rentals and quit and deliver the premises to
the respondent on May 27, 1997. When the petitioner refused to comply with
its demand, the respondent filed an illegal detainer complaint with the
Metropolitan Trial Court (MeTC) of Makati City, Branch 62. In its answer to the
complaint, the petitioner claimed that under the contract, it had the right to
sublease the premises with the respondent's prior written consent and
payment of transfer fees.
Issue:
Whether or not the petitioner has the right to sublease
the premises.
HELD