PIO PATERNO VS.

CA AND ANGELINA REYES

GR NO. 115763; MAY 29, 1997
TOPIC: LEASES
FACTS: Petitioner Pio Q. Paterno owns the apartment unit subject of this case, located at 1640-A J.P.
Laurel Street, San Miguel, Manila. In 1964, petitioner and one Lydia Lim entered into a written
contract of lease of said apartment unit for one year, from August 1, 1964 to August 2, 1965. The
contract provides that is renewable and may be extended by mutual agreement of both parties and
that the lessee should inform the lessor 30 days before the intention to terminate the lease.
Upon expiration of the contract, Lydia Lim opted to continue staying in the leased premises, paying
on a monthly basis. Sometime in 1969, Lim left for the United States as an immigrant, leaving her
sister, private respondent Angelina Reyes, to stay in the apartment.
Upon knowledge of such fact, petitioner sent Reyes a notice to vacate but the latter refused to leave
hence petitioner sue her for forcible entry before the MTC of Manila, Branch III.
MTC ordered Reyes to vacate the premises, however on appeal RTC reversed the lower court’s
decision ruling that an implied new lease was created. CA affirmed RTC’s ruling but modified RTC’s
decision by deleting the award of attorney’s fees for lack of basis.
ISSUE: WON THERE WAS IMPLIED LEASE THUS NO BASIS FOR FORCIBLE ENTRY;
RULING: YES, there was implied lease.
An implied new lease or tacita reconduccion will set in when the following requisites are found to
exist:
a) the term of the original contract of lease has expired;
b) the lessor has not given the lessee a notice to vacate; and
c) the lessee continued enjoying the thing leased for fifteen days with the acquiescence of the lessor.

In the case at bar, all the requisites have been fulfilled. Petitioner did not give Lim a notice to
vacate upon expiration of their contract in August 1965 and Lim continued enjoying the apartment
unit leased for more than fifteen days without objection from lessor Pio Paterno.

The implied new lease had a definite period because rents were paid on a monthly basis. A lease from
month-to-month is with a definite period and expires at the end of each month upon the demand to
vacate by the lessor.

The situation however, changed after Lim's migration to a foreign country. When Lim
left, she relinquished her right to the apartment in question and virtually assigned her monthly lease
to her sister, herein private respondent. The assignment of lease involves a transfer of rights and
obligations pertaining to the lease and requires the consent of the lessor. In the case at bar, the Court
finds that petitioner, in all likelihood, consented to said assignment because he should have known
the real lessee after more than two decades of collecting the rent, personally or through a
representative. Feigning complete lack of knowledge of Angelina Reyes as tenant, petitioner should in
fact be charged with knowledge and implied consent of said fact.

Thus respondent appellate court is correct in concluding that forcible entry is not
present in the case at bar.
 WHEELERS CLUB INTERNATIONAL, INC. VS. JOVITO BONIFACIO
GR NO. 139540; JUNE 29, 2005

TOPIC: LEASE – UNLAWFUL DETAINER

FACTS: Herein respondents are the registered co-owners of land situated at No.83 EDSA,
Mandaluyong City. The co-owners comprised the BOR of J&R Bonifacio Development Corporation.
Bonifacio Development Associates, Inc. (BDAI) represented by Jaime Bonifacio Sr. entered into a
Contract of Lease with herein petitioners for a term of 5 years wherein petitioners undertook to pay
BDAI a monthly rental of Php108, 750.00 for the lease of the property.
On 31 May 1994, JRBDC, represented by the co-owners as members of the Board of Directors
and lessors of the Property, entered into a Lease Development Agreement with BDAI. Under the
Lease Development Agreement, BDAI was authorized to renovate, manage, develop, and sublease the
Property. The term of the agreement was also for five years. The monthly rental was based on the
actual income derived from the lease, management and development of the Property to be shared by
the co-owners and BDAI.
Co-owners, as directors of JRBDC, approved a Resolution terminating the authority of "Jaime
C. Bonifacio" to manage and administer the Property for BDAI’s failure to submit an accounting of the
income from the Property. Thereafter, herein respondent Jovito Bonifacio was given the authority as
the new administrator of the Property.
Jovito then wrote to herein petitioner claiming that the co-owners did not authorize the
Contract of Lease between BDAI and Wheelers. Jovito gave Wheelers 10 days to vacate the Property.
On 21 October 1997, Jovito, as a co-owner of the Property, filed with the MTC a complaint for
unlawful detainer against Wheelers claiming that Wheelers refused to pay him, as the new
administrator. On its answer, Wheeler countered that it paid BDAI however, it was held in abeyance
because of Jovito’s demand letter and they plan to consign the rental in Court.
MTC ruled that while JRBDC does not own the Property, the co-owners who comprised
JRBDC’s Board of Directors signed the Lease Development Agreement signifying the co-owners’
consent to the act of JRBDC. The MTC found that since the signing of the Lease Development
Agreement, none of the co-owners questioned the execution of the agreement. The co-owners did not
adduce any evidence to show the nullity of the Lease Development Agreement. The MTC further ruled
that one who is not a party to a contract has no personality to assail the validity of such contract,
following Jovito’s claim that he did not consent to the Lease Development Agreement.
RTC reversed MTC’s decision.
ISSUE: WHETHER THE CO-OWNERS HAVE A CAUSE OF ACTION FOR UNLAWFUL DETAINER
AGAINST WHEELERS FOR NON-PAYMENT OF RENTALS AND EXPIRATION OF THE TERM OF
THE LEASE AGREEMENT.
RULING: NONE. In unlawful detainer, the possession of the defendant is inceptively lawful but it
becomes illegal because of the termination of his right to possess the property under his contract with
the plaintiff. Hence, by instituting the unlawful detainer action, Jovito and the other co-owners admit
that Wheelers’ possession of the Property was lawful at the beginning. In other words, Jovito and the
other co-owners recognize the legality of Wheelers’ occupation of the Property beginning 1 June 1994
by virtue of the Contract of Lease it had with BDAI. In the absence of any proof to the contrary, such
recognition necessarily debunks Jovito’s claim that the co-owners did not authorize BDAI to lease the
Property to Wheelers. This fact likewise negates Jovito’s contention that the Contract of Lease
between BDAI and Wheelers is void and inexistent.
What is clear from the records is that the present case involves a sublease arrangement. In a
sublease arrangement, there are two distinct leases: the principal lease and the sublease. These two
juridical relationships co-exist and are intimately related to each other but nonetheless distinct from
one another. The lessee’s rights and obligations vis-à-vis the lessor are not passed on to the sublessee.
A careful review of the Lease Development Agreement between JRBDC and BDAI reveals that
the co-owners are the actual lessors of the Property, not JRBDC.
In addition, the co-owners are the registered owners of Property. BDAI, in turn, subleased the
Property to Wheelers. Therefore, the co-owners, except only in the instances specified in the Civil
Code, are strangers to the Contract of Lease between BDAI and Wheelers.
Since the co-owners are strangers to the Contract of Lease between BDAI and Wheelers,
Wheelers has no right or authority to pay the sublease rentals to the co-owners as lessors since the
rentals are payable to BDAI as lessee-sublessor. Wheelers was, therefore, under no obligation to pay
Jovito or the co-owners the rentals.
As things stand, BDAI is the sub-lessor of the Property. BDAI’s sub-lease agreement with
Wheelers is within the five-year term of BDAI’s principal lease with the co-owners. Until the
expiration of the five-year term of BDAI’s principal lease, the sub-lease agreement between BDAI and
Wheeler remains valid, unless the sub-lease agreement is judicially annulled in the proper case, or
unless there is a judgment cancelling BDAI’s principal lease with the co-owners or ousting BDAI from
the Property. Moreover, no lease agreement exists between the co-owners and Wheelers. Therefore,
Jovito’s claim that the term of the alleged lease agreement between the co-owners and Wheelers has
expired has no legal basis.
PETITION WAS GRANTED. MTC’S DECISION WAS REINSTATED.