Dear Mr. Ang:chanrob1es virtual 1aw library
This letter has reference to your stay, occupation and use of the premises known as Lot 1043, Malinta Estate, situated at Canumay, Valenzuela, Metro Manila, owned by and lawfully registered under the name of our client, Lucio San Andres.
You must have been aware that although said property was previously leased to your father, Go Co, by our client, said lease contract has been automatically terminated or abrogated with the death of your father; if it is not so terminated with his death, nonetheless, you have violated the terms and conditions of said lease contract by subleasing the premises leased to a third person or entity, against the will and without the consent of our client. In view of the above developments, we wish to inform you, as we have already stated in our demand letter of November 11, 1987, which we presumed that you have already received, that said contract is deemed terminated or abrogated motu-propio. By reason of said termination or abrogation, your continued stay, occupation and use, therefore, of said premises are now only under the tolerance or implied consent of our client, without necessarily meaning the existence of a lease contract.
To legalize therefore, your continued stay, use and occupation of the said premises, we wish to inform you that a formal contract of lease, between you and our client, must be forged or executed immediately, otherwise, your said stay, thereat, is without any color of right should our client discontinue his tolerance.
Should you desire to enter into a formal contract of lease with our client, basically, the following are the terms and conditions which our client would want you to agree, to wit;
1. The area to be covered by the lease contract shall be limited to the extent of the area presently occupied by your existing building, unless you negotiate for a bigger area;
2. The monthly rental to be paid shall be computed at P3.00 per square meter;
3. The maximum duration of the contract shall be limited to three (3) years, but it can be renewed by mutual agreement;
4. If the whole area could not be leased by you, then, our client can lease the remaining area to other interested persons;
5. Definitely, sub-leasing is not allowed; and
6. We will not recognize other persons, representing your interest, except you.
We will wait for your counter-proposals within a period of ten (10) days from receipt of this letter. If we will not hear from you within the above-sated period, then, we shall interpret your silence as lack of interest to lease the premises. And unless your present stay, use and occupation of said premises is legalized by a valid written lease contract, we will regard you as a plain intruder in the premises, where, by law, you can be ejected and ousted.
Trusting that this letter will merit your preferential attention before any further legal actions shall be initiated.
Very truly yours,
ATTY. LIBERATO C. TENEZA
Counsel for Lucio San Andres
The question is whether this letter constitutes a demand to vacate as required by Rule 70, §2, sufficient to confer jurisdiction on the MeTC. This provision states:chanrob1es virtual 1aw library
§2. Landlord to proceed against tenant only after demand. — No landlord, or his legal representative or assign, shall bring such action against a tenant for failure to pay rent due or to comply with the conditions of his lease, unless the tenant shall have failed to pay such rent or comply with such conditions for a period of fifteen (15) days, or five (5) days in the case of building, after demand therefor, made upon him personally, or by serving written notice of such demand upon the person found on the premises, or by posting such notice on the premises if no persons be found thereon.
We hold that the letter does not meet the requirements in Rule 70, § 2 and for that reason the MeTC did not acquire jurisdiction over this case. To begin with, contrary to the assertion in the letter, the lease contract between petitioner and private respondents’ predecessor-in-interest, Go Co, was not terminated by the death of Go Co. The fact is that the parties in this case so regarded the contract and therefore continued the lease even after the death of Go Co in 1974. It was only in 1987, thirteen years later, when petitioner demanded the execution of a new contract on the ground that the lease had been terminated upon the death of the lessee.
The letter in question also mentions violation of the lease contract by private respondent as ground for its termination. To be sure, an action for rescission of a contract of lease could have been brought under Art. 1659 of the Civil Code for violation of the lease contract, but no such action was instituted, which must be done in the RTC. Instead, what was brought was this action for ejectment which he filed in the MeTC. As such, the suit is subject to the requirement of Rule 70, §2 of the Rules of Court concerning the need for a demand to be made before the lessee may be considered a deforciant, unlawfully withholding possession from the owner of the land.
Now, the demand must be either to pay the rents or to comply with the terms of the contract, as the case may be. But the letter of petitioner’s attorney makes neither demand on private respondents. It does not demand that they comply with the stipulation prohibiting the lessee from subletting the land. Instead, the letter demands the execution of a new lease contract on the theory that the 1973 lease agreement has been terminated. As already explained, however, the 1973 contract was not terminated by the death of Go Co in 1974 because in fact it provides for the transfer of ownership of buildings built on the land upon the expiration of the lease in the year 2003.
Neither could petitioner unilaterally and extrajudicially rescind the contract for violation of its "no sublease" provision, assuming there was a violation of the agreement. Petitioner undoubtedly knew this, that is why he brought an ejectment suit as an alternative to an action for rescission.
Second. Petitioner also contends that the Court of Appeals erred in holding that private respondents did not violate their contract of lease. The appellate court held that the prohibition against subleasing refers to the land and not the building constructed by the lessee, which would not belong to petitioner until after the expiration of the lease in the year 2003. Indeed the lease agreement refers to the subleasing of the "land leased herein" ("lupang pinaupahan dito"), thus:chanrob1es virtual 1aw library
(g) Hindi maaaring ipa-upang muli (sub-lease) ng IKALAWANG PANIG ang lupang pinaupahan dito na walang nakasulat na pahintulot ang UNANG PANIG. 3
The question is whether the prohibition against subleasing of the land extends to the leasing of the building. As already stated, because the lessee, Go Co, ran out of funds to finish the construction of his building, he was forced to borrow money from Alberto Dy of Land Center, to pay for which he allowed Land Center the free use of the building. Land Center subsequently leased the building for a term of five years, renewable thereafter on a year-to-year basis, to Kookaburra Industrial.
In Duellome v. Cotico, 4 petitioner leased his lot for P10.00 a month to private respondents’ father-in-law, who later built a house on the land. Private respondents came to live in the house. When the lessee transferred residence to another place, private respondents were left in the house, which they rented from the lessee for P20.00. They paid P10.00 to the owner of the land and P10.00 to the owner of the house. Later, however, upon request of the lessee, private respondents paid the entire rent to the lessee. Because the rent on the land was not paid, the owner of the lot brought an ejectment suit against private respondents. The suit was eventually dismissed as the lessee paid the rents in arrears, but private respondents sued the owner of the lot for damages, claiming that the ejectment suit was malicious and caused damage to their reputation. They contended that they were not really liable to petitioner for the payment of the rent on the land. In absolving petitioner from liability for damages, this Court held that in a true sense private respondents were lessees of the land, and not only of the house because" [t]he lease of the building naturally include[s] the lease of the lot and the rentals of the building include the rentals of the lot." 5 Since the lessee failed to pay the rents, the lot owner had a right to sue the private respondents as sublessees of the land for the unpaid rentals in accordance with Art. 1652 of the Civil Code which provides:chanrob1es virtual 1aw library
Art. 1652. The sublessee is subsidiary liable to the lessor for any rent due from the lessee. However, the sub-lessee 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 extra-judicial demand by the lessor. . . .
However, for the purpose of enforcing the "no-sublease" provision of the lease contract in this case, it is clear not only from the text of the agreement which unequivocally speaks of the sublease of "the land leased herein," but also from its context that it does not apply to the lease of the building which the lessee had constructed on the land leased. 6 This is because the term of the lease is for 30 years. The purpose of the lease is for the lessee to have a place on which to construct a building or a factory. The building could be a tenement house or a factory, either of which could be for commercial purposes such as for lease. A stipulation that upon the expiration of the lease the building constructed by the lessee will become the property of the owner of the land is usual with respect to commercial buildings, the lessee calculating that the building will bring him income sufficient to cover his investment besides a fair return. It is thus unlikely that, in entering into the 30-year lease contract in this case, the parties contemplated imposing restrictions on private respondents’ rights of ownership of the building, by prohibiting even the lease of the building constructed by the lessee. The most natural and the most logical construction of the "no sublease" provision is that it refers only to the land leased but not to the building or factory which the lessee was authorized to construct on the land.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED.
SO ORDERED.
Regalado, Romero, Puno and Torres, Jr., JJ., concur.
Endnotes:
1. Per Felipe Kalalo, J. and concurred in by Luis A. Javellana, and Abelardo M. Dayrit, JJ.,
2. Annex H, Rollo, p. 54.
3. Annex I, Rollo, p. 112.
4. 117 Phil. 845 (1963).
5. Id., 850.
6. The Civil Code provides in pertinent parts:chanrob1es virtual 1aw library
Art. 1370. If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control.
If the words appear to be contrary to the evident intention of the parties, the latter shall prevail over the former.
Art. 1373. If some stipulation of any contract should admit of several meanings, it shall be understood as bearing that import which is most adequate to render it effectual.
Art. 1374. The various stipulations of a contract shall be interpreted together, attributing to the doubtful ones that sense which may result from all of them taken jointly.