G.R. No. L-1337 October 16, 1948 Off. Gaz., 389; People vs. No. Benitez, 8 1 Off. Gaz.
z., 389; People vs. No. Benitez, 8 1 Off. Gaz., 880; From the Wings against The People of the
LO CHING AND SO YUN CHONG CO., recurring, Vs .THE COURT OF APPEAL AND THE ROMAN
CATHOLIC ARZOBISPO OF MANILA, appealed.
Mr. Quisumbing, Mr. Sycip and Mr. Quisumbing on the representation of the appellants.
Mr. La o y Feria e Ignacio Lugtu on representation of the respondents.
Mr. DeWitt, Mr. Perkins and Ponce Enrile and Mr. Nabong and Sese as amici curiae.
This is an appeal against the decision of the Court of Appeal in case CA-G.R. No. 102 (L-415).
The proven facts, according to the Court, are as follows: On August 30, 1940, the Archbishop of
Manila through the Bank of the Philippines ceded in lease to Lo Ching and So Yun Chong Co. the
estate with Nos. 1095 to 1101 of R. Hidalgo Street, Manila, under a monthly rent of P500 for the
term of three years from the first of September 1940, extendable to two years (two years upon
agreement of the parties). The tenant occupied the estate by establishing a hotel in it. In
February 1942, the Japanese army handed it out to the tenants of the estate, delivering it to the
Aleman Otto Schulze who occupied it until January 1945, upon the arrival of the liberation army.
In the first days of February 1945, the tenants reoccupied the estate, paying the corresponding
monthly rent. Before the end of August of the same year, the landlord required the tenants to
evict the estate, and they refused. For this reason, the landlord on September 8, 1945 filed the
demand for eviction in the Municipal Court of Manila, which on October 8, 1945, sentenced the
tenants to vacate the estate and pay their monthly P625 rent from the first of September 1945 ,
plus damage to the amount of P500 and the costs of the trial. On appeal, the Court of First
Instance of Manila sent sentences them to vacate the estate, paying their P625 rent per month
from the first of September 1945 until it is evicted without a ruling on costs. The Court of Appeal in
its decision of 30 January 1947, i confirmed that judgment at a cost.
The tenants, who are recurring in that proceeding, by means of a certiorari, appeal against that
decision before the Court, claiming that the Court of Appeal made five errors, two of which, the
third and fourth, raise questions of law.
In addition to the arguments put forward by the appellants and respondents, the lawyers Mr.
Dewitt, Mr. Perkins and Mr. Ponce Enrile, as amici curiae, presented their memorandum on 21
October 1947, and the lawyers Mr Nabong and Sese also as amici curiae, theirs on 18 March
1948.
The review of judgments and decrees of the Court of Appeal is limited only to cases in which
errors or matters of law are dealt with only. (Rule 46(2) in relation to Article 2, Title VIII of the
Constitution of the Republic.) (Matthew v. Customs Administrator and Court of Appeal, 63 Jur. Fil.,
500.) The jurisdiction of the Supreme Court is limited to reviewing and examining any errors of law
that the Court of Appeal may have made. (Guico against Mayuga and others, 63 Jur. Fil., 352;
Mamuyac vs. Mamuyac Abena, 1 38 Off. Gaz., 84; Meneses v. The Commonwealth of the
Philippines, 2 40 Off. Gaz. (7th Supp.) 41; Onglengco vs. Ozaeta 3 , 40 Off. Gaz. (7th Supp.), 186;
Hernandez v. Manila Electric Co., 4 40 Off. Gaz. 10th Supp.), 35; Gerio v Gerio, 5 40 Off. Gaz. (10th
Supp.), 53; Garcia de Ramos v. Yatco, 6 40 Off. Gaz. (10th Supp.), 124; Zubiri vs. No. Quijano, 7 2
Philippines, R. G. R. No. 49212.)
We will therefore only deal with errors III and IV that raise questions of legal hermeneutics.
A paragraph of the lease signed by the parties is worded as follows:
1. The party of the second part shall have and hold the said premises for the full term of three
years to be reckoned from September 1, 1940, but said period may be extended to another two
years upon agreement of the parties. (Record on appeal, p. 22.)
As for the first three-year period, the terms of the contract are so precise and so clear that they
give no doubt. As for the second two-year term, we declare that this extension of the contract to
another two additional years is optional for tenants: they can continue to occupy the estate
without the landlord giving their consent again because they already have given it to the time
for the award of the Contract Exhibit"C"; but they are not obliged to occupy it, if it is no longer in
their best interest. In similar matters, Cruz v. Alberto, 39 Jur. Fil., 1015, this Court said:
We believe that the Judge a quo was in a whole right in his interpretation of the
contracts in question; and, even if it could be admitted that such an interpretation
makes superfluous the words "agreed by both sides, " yet this does not give any strength
to the significance of the entire sentence. If it is true that the appellant wishes us to
adopt, the entire clause relative to the extension of the period would be superfluous,
because if it were to extend it it would only have to take place under a new agreement
that the parties granted at the expiry of the primitive period , why say anything about
prolongation? Those who are free to grant a lease are certainly also free to grant a new
one when the previous one has expired, without having to be reminded of their power to
do another by inserting a clause of this species into the first lease. This would not only be
superfluous, but meaningless. The clause relating to the extension of the lease must be
interpreted, if possible, as to give it any strength.
As interpreted by the contracts before us, the parties set out to express the fact that they
had already agreed that there might be an extension of the lease, and that they had
agreed on the duration of the lease, thus giving the defendant the right to option to
continue the lease for a second term, or not to proceed with the contract at the expiry
of the primitive term.
By ministry of the lease that expired on August 31, 1945, the tenants ceased to have the right to
continue occupying the farm. This contract has the force of law between the parties (Article
1091, Civil Code). "If the lease has been made for a specified time, the predetermined day ends
without a requirement. The decision, therefore, of the Court of Appeal ordering the tenants to
vacate the estate and pay monthly P625 rents from the first of September 1945 until they vacate
it in accordance with the law. (Article 1569, Civil Code.)
The appellants contend that they have the right to occupy the estate for three full years; that its
occupation must be effective, material and continuous; they should not be deprived of the use
and enjoy of the farm; that appellants have the right to deduct from that three-year period, all
the time they have ceased to enjoy the lease by the japanese army.
It is clear that the tenants have a perfect right to occupy the estate for the entire time of the
lease and not only for three years but for five, according to the two agreed deadlines, and
indeed received it from the landlord and established it a hotel business, and they had the full use
and enjoy of the estate before being cast out by the Japanese. Moreover, the landlord is
obliged to keep the tenants in the pacific enjoy of the lease for the entire time of the contract
(Article 1554, paragraph 3, Civil Code). But this obligation does not go so far as to defend the
tenants from the predations of the invading hordes. This is outside the material power and legal
obligation of the landlord. Assuming, for a moment, that before the war broke out, a fresco had
been clandestinely inserted into a room of the recurrent hotel and that despite the requirements
he would not have wanted to evict her, was the landlord obliged to throw farm to the tenatry?
That intruder was not a steer of the property or the estate but a holder of the possession, of the
peaceful enjoy of the tenant. I didn't occupy the room with domain pretension: I just wanted to
illegally or freely occupy the room. The tenants had to direct their action against the intere who
invaded their right of possession, which the landlord had nothing to answer.
Only the owner responds if the one who disturbs the alegal title on the property. If a third party,
claiming to have purchased the landlord's estate, wishes to kick out the tenants, they may
require the landlord to defend them. The landlord's obligation to guarantee peaceful gation is
not in all cases: only in those cases where the title of the estate has something to do with the
disturbance, when it comes to disturbance of law. When a person by means of legal action
wishes to deprive the tenants of the possession of the estate, the landlord is obliged to defend
them. Thus provides article 1560 of the Civil Code: "The landlord is not obliged to answer for the
disturbance of the fact that a third party causes in the use of the leased estate; but the tenant
will have direct action against the disruptor. There is no de facto disturbance when the third
party, whether the Administration, or an individual, has acted under a right that belongs to him."
Manresa, commenting on this provision, says:
What do we mean by mere disturbance, what about disturbance of law?
The Code of France, in Article 1,725, states that the landlord is not obliged to guarantee the
tenant for inconvenience caused by third parties who do not have rights to the leased thing,
without prejudice to the claims that the tenant may make on his own name; and in article 1,726
that if, on the contrary, the tenant or tenant has been disturbed in his enjoyment as a result of an
action relating to the ownership of the property, he is entitled to a proportional reduction in the
price of the lease, having been reported that annoyance to the owner.
It seems to be inferred from these provisions that the disturbance caused by those who do not
have the right to the leased thing (although it may bear it over things other than with it to relate),
must be regarded as in fact, and that the other one consisting of the action affecting the
ownership of the property must be regarded as law.
Laurent, explaining these precepts, says that what characterizes the disturbance of law, is that
the third party intends or asserts that the leased thing does not belong to the landlord. However,
it may be the case that a third party exercising a right that corresponds to him, disturbs the
grooming's likeness: this third party does not claim to have any rights in the leased thing, and in
this sense there is no disturbance of law; the right under which the landlord has leased is not
attacked, and yet the tenant's enjoy is disturbed. In order to make it clear whether, in the latter
case, the lessor must respond to the lessee of the disturbance, the author mentioned distinguishes
according to whether the disruptive acts come from the Administration or from an individual.
If they come from the Administration, it will be necessary to distinguish again whether it has
worked within the circle of its powers, or if it is overlimited and the act is illegal: if the latter
happened, the answer is not doubted for Laurent; an illegal act is a de facto road, and the roads
do not give rise to holding the landlord liable.
Otherwise, that is, the Administration has acted within its powers, the right of the lessee to address
the landlord and his lack of action against the Administration are obvious.
If the disruptive acts come from individuals, Laurent makes the same distinction as when they
come from the Administration, whether the individual has acted in the exercise of a right that
belongs to him, or whether he has overreached the: the solutions he proposes are and by virtue
of the same foundations. From which it follows that there was no great need to distinguish
between acts of the Administration and acts of individuals, in order to achieve such an outcome.
Later Laurent accepts the following distinctions of Pothier: there is disturbance in fact when the
third parties who make it do not pretend to have any rights in the property, nor with relation to
the property, for example, if they put their flocks on the leased farm , although without claiming
that they are entitled to do so: it is judicial disturbance, which results from an action brought
before the Courts; it is also judicial disturbance, by way of exception, that which occurs when the
tenant pursues the perpetrators of a de facto disturbance, they object that they have a right in
the leased thing.
Pacifici Mazzoni announces the difference between the disturbance of fact and that of law,
saying that the first occurs when the enjoyment of the tenant decreases or materially impedes,
without the disturbing being right about the thing or its enjoyment, and the secondly, if it tends to
the same end, either with judicial acts or with extrajudicial acts with which the right of the lessee
to enjoy is answered by claiming a right to the matter.
Ricci points out two requirements for the inconvenience of fact to be borne by the tenant: first,
that the one who causes it has no right over the leased thing, and second, that he is also not
entitled to do what the discomfort or disturbance consists in; lack of either of these two
conditions, the disturbance is right.
Our Goyena, commenting on Art. 1491 of the 1851 draft, says that in no contract is there
responsibility for the fortuitous cases, and such must be reputed the turmoil of mere fact, as if you
introduce herds of others into the meadow that I have on lease, or take away from me from
being snatched from night the fruits, or I am violently expelled from the house I occupy. He further
adds, that as long as the attack does not target the very property of the thing and judicially, the
tenant is the only one attacked and he only has to defend himself. (10 Manresa 511-513).
The appellants allege that they reoccupied the estate in February 1945 and only resumed their
hotel business in June because they had to kick out 400 refugees; repaired the destroyed parts of
the building by spending at least P5,000, to put it in a position for the hotel business; that the
landlord allowed them to do all these things. By these circumstances — the appellants argue ,
the landlord has led them to believe that they could occupy the estate for more than 7 months
and operate the hotel business for more than 2 months to recover their investment, and that if
there was not expressed, at least , there was a little authorization. And they conclude: that the
landlord is in estoppel to demand the termination of the new lease that began in Februaro in
1945. This theoria is unsustainable. If the landlord did not object to the reoccupation by the
tenants of the estate in February 1945 and received the corresponding rents, he has only
respected the right that the tenants had to occupy the estate because according to the second
additional term , had indisputable choice of occupying the estate until August 31, 1945. If the
landlord, therefore, were consecrated, it was not under the intelligence that it was occupied
under a new, small covenant but under the agreement already agreed through the "Exhibit"
agreement. If tenants have made investments that they have not been able to recover until
August 31, 1945, no one but themselves should be blamed. Debian knew that the contract was
law between the parties and that they should end on August 31 of that year. There is no such
stoppel.
Nor is the recurrent to be understood that by their reoccupation of the estate in February 1945,
for having the landlord received the rents and for having allowed them to make repairs in the
building, a new legal relationship arose term of more than two months and request that the Court
determine this in the light of the circumstances of the case. In support of Article 1128 of the Civil
Code which provides that "If the obligation does not indicate time limit, but of its nature and
circumstances it is deduced that the debtor has wished to be granted, the Courts shall fix the
duration of that debtor."
As we have already said, the reoccupation of the estate in February was only the continuation of
the lease ending on August 31, 1943, in line with the second additional two-year period.
Article 1128 of the Civil Code refers to obligations in general and does not refer to lease terms
because there is already a special provision on this type of contract and it is that of article 1565
that reads as follows: "If the lease has been made for a period of time concludes the
predetermined day without a requirement."
In the present case, there is a term prefixed by the parties — three years from the first of
September 1940 to August 31, 1943, and an additional term of two years ending August 31, 1945.
If there had not been another additional two-year term, reoccupation by the tenants in February
1945 would have been a new lease, for tacite reconduction; but since the payment of the rents
was made per month, it must be understood that the contract ended at the end of the month.
Article 1581 of the Civil Code expressly states that "If the lease period had not been fixed, it is
understood to be done for years when an annual rent has been set, for months when it is
monthly, for days when it is monthly, for days when it is daily. In any case, the lease ceases,
without the need for a special request, fulfilling the term."
As for the launch of the tenants of the farm by the invading army, putting in its place the Alman
otto Schulze, few words suffice. The 1907 Hague Convention does not authorize an occupying
army to seize private property in the invaded territory. On the contrary, it provides that: "Family
honor and rights, the lives of persons, and private property, as well as religious convictions and
practice, must be respected. Private property cannot be confiscated." (Article 46.) And the
estate was not even used as an army barracks, nor are there any indications that they seized it
out of military necessity, from which it can be inferred that the Japanese soldiers had the estate,
not in the legitimate exercise of the authority of an occupying army , but spurred by irrestrained
and unreasonable desire to seize the outsider. The tenants should have directed their claims
against German Otto Schulze and the soldiers who gave him possession of the estate. If the
occupation of Otto Schulze was a simple case of possession stop, what right do tenants have to
deduct it from the lease term? Isn't this whether Otto Schulze and the Japanese soldiers, who are
the real titers, rest in the landlord? There is also no evidence in cars that shows that soldiers
occupied the estate with pretension of dominance. If the Japanese told the Aleman Otto
Schulze to pay the rents to the owner of the estate, it must-have that they had not meant to
harm him; the action was aimed at the tenant, the owner of the possession, the use and enjoy of
the lease. The deprivation of possession of the tenants by the Japanese soldiers was a mere
disturbance and of which the landlord does not respond, according to the express provision of
Article 1560 of the Civil Code. Under no concept, Otto Schulze's period of illegal occupation must
therefore be deducted from the lease term agreed by the parties.
The appellants argue that the invasion of the Japanese cannot be regarded as a mere
disturbance in fact, because it affects not only the leased estate but also other properties in the
Philippines. That is true; but it is not a legal reason for tenants not to suffer their corresponding
share in the predations caused by the Pyne hordes; it is not reason for tenants to shift the weight
of the damage caused to them on to the landlord's shoulder.
In support of the court that the Court may extend the term of occupation of the estate by the
tenants to a period of time equivalent to the time in which they were deprived of possession by
the Japanese army, the appellants invoke Commonwealth Law No. 720 q. it provides for the
extension of the period within which any term, condition or stipulation expressed in mineral,
forestry and public land concessions may be made, made or fulfilled. Without this law, any
extension of the term would be illegal: the terms of the concession are inflexible and must be
complied with. In the present case, the law between the parties is the Exhibito C lease. If the
lessor fails to grant a third period, by way of reconducting or expressly, the appellants' eviction is
forcibly.
The appellants submit that, in the present case, the Court must grant the additional period in
accordance with Article 1124 of the Civil Code. This condition is erroneous. The Tribunal is not the
landlord or agent of the landlord; therefore, it cannot extend the lease term in contravene to the
precise terms of Exhibito C. It is the landlord or the Archbishop of Manila, as the government in
the matter of mineral, forestry and mineral concessions, is the one who can grant another time
limit and not the Tribunal.
The appealed sentence is upheld. The appellants will pay the costs in all instances.
Moran, Pres., Ozaeta, Paras, Perfect, Bengzon, Briones, and Tuason, MM., are compliant