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LEASE Civil - GOLDEN NOTES 2011
LEASE Civil - GOLDEN NOTES 2011
LEASE witness on the issue. (Pineda, Obligations
and Contracts, pgs. 577, 579, 580)
Q: What is contract of lease?
2. Lease of work (contract for a piece of
A: A contract by which one of the parties agrees work) – One of the parties binds himself
to give the other for a fixed time and price the to produce a result out of his work or
use or profit of a thing or of his service to another labor for a certain price.
who undertakes to pay some rent, compensation
or price. Note: Duties of a contractor who furnishes
work and materials:
Q: What are the characteristics of a contract of 1. to deliver;
lease? 2. to transfer ownership; and
3. to warrant eviction and hidden
defects.
A:
1. Consensual;
Remedy of employer in case of defects:
2. Bilateral; 1. Ask contractor to remove the
3. Commutative; defect or to execute another
4. Principal contract; work;
5. Nominate; 2. If contractor fails or refuses,
6. Subject matter must be within the employer can ask another at
commerce of man; the contractor’s expense.
7. Purpose is to allow enjoyment or use of
a thing; 3. Lease of service – One party binds
8. Purpose to which the thing will be himself to render to the other some
devoted should not be immoral; service for a price certain.
9. Onerous;
10. Period is temporary; Q: When is lease considered a contract of sale?
11. Period may be definite or indefinite;
and A: A lease of personal property with option to
12. Lessor need not be the owner. buy, where title is transferred at the end of the
contract provided rents have been fully paid.
Q: What are the kinds of lease?
Q: Distinguish lease from sale.
A:
1. Lease of things (immovable/ movable) – A:
One of the parties binds himself to give LEASE SALE
to another the enjoyment or use of a Only the use or
Ownership is transferred
thing for a price certain. enjoyment is transferred
Transfer is temporary Transfer is permanent
Period: definite or indefinite but not Lessor need not to be the Seller must be the owner
more than 99 years. (Art. 1634) owner at the time of delivery
The price of the object
Note: It may be made orally but if the (distinguished from the Usually, the selling price
lease of real property is for more than one rent) is usually not is mentioned
year, it must be in the writing (Statute of mentioned
Frauds).
Q: Distinguish lease from usufruct.
Statute of Frauds requires certain
agreements to be in writing before they
A:
can be proved and enforced in a judicial
LEASE USUFRUCT
action. However, non‐compliance does
Ownership on the part of Ownership of the thing
not make the oral contract void. The only
the lessor is not on the part of the grantor
effect is that no action for the
necessary is necessary
enforcement of the contract can be
proved. Moreover, the right to invoke the GR: Personal right
Statute of Frauds may be waived by failure Real right
to object to the presentation of oral XPN: Real right
evidence, or by cross examining the Includes all possible uses
Limited to the use
and enjoyment of the
specified in the contract
thing
439
ACADEMICS CHAIR: LESTER JAY ALAN E. FLORES II U N I V E R S I T Y O F S A N T O T O M A S
VICE CHAIRS FOR ACADEMICS: KAREN JOY G. SABUGO & JOHN HENRY C. MENDOZA
VICE C HAIR FOR A DMINISTRATION AND F INANCE : JEANELLE C. LEE Facultad de Derecho Civil
VICE CHAIRS FOR LAY‐OUT AND DESIGN: EARL LOUIE M. MASACAYAN & THEENA C. MARTINEZ
UST GOLDEN NOTES 2011
Lessor places and 1. By Filipinos – public domain with an
Owner allows the
maintains the lessee in area of 500 hectares and may acquire
usufructuary to use and
the peaceful enjoyment not more than 12 hectares
enjoy the property
of the thing 2. By corporations
May be for an indefinite a. If at least 60% Filipinos‐owned
Definite period
period – public domain for a period
Created by contract as a Created by law, contract, of 25 years, renewable for
general rule last will or prescription another 25 years; the area not
Lessee has no duty to Usufructuary has duty to to exceed more than 1,000
make repairs make repairs hectares
Lessee has no duty to pay Usufructuary has a duty
taxes to pay taxes
Q: What are the rules on lease of things when
Lessee cannot constitute
Usufructuary may lessee is an alien?
a usufruct of the property
constitute a sublease
leased
A:
Personal property – 99 year limit applies.
I. LEASE OF THINGS
Aliens cannot lease public lands, and cannot
acquire private lands except through
Q: Is lease of real property a real right?
succession
If lease of real property (private lands),
A:
maximum of 25 years renewable for
GR: Lease of a real property is a personal right
another 25 years (P.D. 713)
Under the Investor ‘s Lease Act of 1995, the
XPNs: It is a real right:
25 year period was extended to 50
1. If it is for more than one year and to be
years provided the following conditions
enforceable – must be writing
are met:
2. If it is registered with Registry of
Lessee must make investments
Property ‐ regardless of its period
Lease is approved by DTI
If terms are violated, DTI can
Q: What are the effects if the lease of real
terminate it
property is not registered?
Note: The ILA did not do away with P.D. 713, under
A: ILA the consent of DTI is required, while in P.D. 713
1. It is not binding on third persons; no consent is required.
2. Such third person is allowed to
terminate the lease in case he buys the Q: What is rent?
property from the owner‐lessor;
3. Actual knowledge of existence and A: The compensation either in money, provisions,
duration of lease is equivalent to chattels or labor, received by the lessor from the
registration; or lessee.
4. A stranger who knows of the existence
of the lease, but was led to believe that Q: What are the requisites of rent?
the lease would expire soon or before
the new lease in favor of him begins, A:
the stranger can still be considered 1. Not fictitious or nominal, otherwise the
innocent. contract becomes gratuitous;
2. Capable of determination; and
Q: What can be the subject matter of a lease? 3. May be in the form of products, fruits,
or construction, as long as it has value.
A: Things within the commerce of man.
Note: Owner has the right to fix the rent because the
Note: Lease of properties belonging to the public contract is consensual and not imposed by law.
domain is void.
Increasing the rent is not an absolute right of the
Q: What are the properties that may be leased? lessor. The new rate must be reasonable and in no
case shall the lessor be allowed to increase the
A: rental when the term has not yet expired, unless, the
tenant consents. (Paras, p. 262)
440 CIVIL LAW TEAM:
ADVISER: ATTY. ELMER T. RABUYA; SUBJECT HEAD: ALFREDO B. DIMAFELIX II;
ASST. SUBJECT HEADS: KAREN FELIZ G. SUPNAD, LAMBERTO L. SANTOS III; MEMBERS: PAUL ELBERT E. AMON, ALSTON ANARNA, OZAN J.
FULLEROS, CECILIO M. JIMENO, JR., ISMAEL SARANGAYA, JR.; CONTRIBUTORS: LOISE RAE G. NAVAL, MONICA JUCOM
LEASE
If the rent is fixed for the first time, courts cannot Q: Does the lessee have the right to sublease the
interfere, but if it is a renewal, the courts can settle property?
the disagreements.
A: Yes, unless expressly stipulated.
Q: What is the right of a purchaser of a leased
property? Note: If the prohibition to sublease is not express
but only implied, the sublease will still be allowed.
A: (Art.1650)
GR: Purchaser of thing leased can terminate
the lease. Q: What is the remedy of the lessor if the lessee
violates the prohibition as to sublease?
XPNs:
1. Lease is recorded in Registry of A: Rescission and damages or only damages
Property; allowing the contract to remain in force. The
2. There is a stipulation in the contract of sublessee is subsidiarily liable for any rent due.
sale that the purchaser shall respect the The lessor has an accion directa against the
lease; sublessee for unpaid rentals and improper use of
3. Purchaser knows the existence of the the object.
lease;
4. Sale is fictitious; or Q: Can rights under a contract of lease be
5. Sale is made with a right of repurchase. assigned?
SUBLEASE A:
GR: Lessee cannot assign the lease without
Q: What is sublease? consent of lessor (Art. 1649, NCC)
A: It is an agreement between a sublessor and XPN: Stipulation to the contrary
sublessee whereby the former grants temporarily
the enjoyment or use of the same thing, service Q: When does an assignment of lease take
or work subject of the original contract of lease to place?
the latter in exchange for compensation or price,
respecting the terms and conditions of original A: It exists when the lessee made an absolute
contract of lease between the lessor and lessee. transfer of his leasehold rights in a contract, and
he has disassociated himself from the original
Q: What is the nature of sublease? contract of lease. (Pineda, p. 451)
A: It is a separate and distinct contract of lease Note: The assignment has the effect of novation
wherein the original lessee becomes a sublessor consisting in the substitution. There being a
to a sublessee. novation, the consent of lessor is necessary to effect
assignment unless the contract of lease allows the
Q: What are the requisites of a valid sublease? lessee to assign. (Pineda, p. 452)
A: There must be no express prohibition for Q: What is the effect of assignment of lease?
sublease in a contract of lease. Also, the duration
of sublease cannot be longer than that of the A: The personality of the original lessee
lease to which it is dependent disappears and there only remain in the juridical
relation of two persons: the lessor and the
Q: Who are the parties to a sublease? assignee, who is converted into a lessee. (Pineda,
p. 451)
A:
1. Lessor
2. Sublessor (original lessee in the contract
of lease)
3. Sublessee
441
ACADEMICS CHAIR: LESTER JAY ALAN E. FLORES II U N I V E R S I T Y O F S A N T O T O M A S
VICE CHAIRS FOR ACADEMICS: KAREN JOY G. SABUGO & JOHN HENRY C. MENDOZA
VICE C HAIR FOR A DMINISTRATION AND F INANCE : JEANELLE C. LEE Facultad de Derecho Civil
VICE CHAIRS FOR LAY‐OUT AND DESIGN: EARL LOUIE M. MASACAYAN & THEENA C. MARTINEZ
UST GOLDEN NOTES 2011
proves that it took place without his fault. (1999
Bar Question)
Q: Distinguish sublease from assignment of Q: What is the responsibility of the lessee to the
lease. lessor in case he subleases the property?
A: A: By express provision of Article 1650, NCC, the
lessee is still responsible for the performance of
SUBLEASE ASSIGNMENT OF LEASE
his obligations toward the lessor.
There are 2 leases and 2 There is only one juridical
distinct juridical relationship, that of the Q: What are the responsibilities of a sublessee to
relationships although lessor and the assignee, the lessor?
immediately connected who is converted into a
and related to each other lease A:
Personality of the lessee Personality of the lessee GR: No juridical relationship between lessor
does not disappear disappears and sublessee.
Lessee does not transmit
Lessee transmits
absolutely his rights and XPNs:
absolutely his rights to
obligations to the All acts which affect the use and
the assignee
sublessee preservation of the thing leased
Sublessee, generally, For any rent due to the lessor from the
Assignee has a direct
does not have any direct lessee which the latter failed to pay
action against the lessor
action against the lessor the lessor must collect first from
the lessee
Q: May a lessee sublease a leased property if the lessee is insolvent, the
without the consent of the lessor? sublessee becomes liable
(subsidiary liability)
A: Yes, provided that there is no express
prohibition against subleasing. Under the law, Q: When is a sub‐lessee liable to the lessor?
when in the contract of lease of things, there is no
express prohibition, the lessee may sublet the A:
thing leased without prejudice to his 1. All acts which refer to the use and
responsibility for the performance of the contract preservation of the thing leased in the
toward the lessor. (Art. 1650, NCC) manner stipulated between the lessor
and the lessee
In case there is a sublease of the premises being 2. The sublessee is subsidiary liable to the
leased, the sublessee is bound to the lessor for all lessor for any rent due from the lessee
the acts which refer to the use and preservation
of the thing leased in the manner stipulated REMEDIES IN SUBLEASE
between the lessor and the lessee. (Art. 1651,
NCC) Q: What is accion directa?
The sublessee is subsidiarily liable to the lessor A: A direct action which the lessor may bring
for any rent due from the lessee. However, the against a sublessee who misuses the subleased
sublessee shall not be responsible beyond the property.
amount of the rent due form him.
Q: What are the remedies when either the lessor
As to the lessee, the latter shall still be or the lessee did not comply with his
responsible to the lessor for the rents; bring to obligations?
the knowledge of the lessor every usurpation or
untoward act which any third person may have A: RED
committed or may be openly preparing to carry 1. Rescission and damages;
out upon the thing leased; advise the owner the 2. Damages only (contract will be allowed
need for all repairs; to return the thing leased to remain in force); or
upon the termination of the lease just as he 3. Ejectment
received it, save what has been lost or impaired
by the lapse of time or by ordinary wear and tear
or from an inevitable cause; responsible for the
deterioration or loss of the thing leased, unless he
442 CIVIL LAW TEAM:
ADVISER: ATTY. ELMER T. RABUYA; SUBJECT HEAD: ALFREDO B. DIMAFELIX II;
ASST. SUBJECT HEADS: KAREN FELIZ G. SUPNAD, LAMBERTO L. SANTOS III; MEMBERS: PAUL ELBERT E. AMON, ALSTON ANARNA, OZAN J.
FULLEROS, CECILIO M. JIMENO, JR., ISMAEL SARANGAYA, JR.; CONTRIBUTORS: LOISE RAE G. NAVAL, MONICA JUCOM
LEASE
IMPLIED NEW LEASE DURATION OF SUBLEASE
Q: What is tacita reconducion (implied new Q: What is the duration of the lease?
lease)?
A:
A: A lease that arises if at the end of the contract 1. With determinate or fixed period – Lease will
the lessee should continue enjoying the thing be for the said period and it ends on the day
leased for 15 days with the acquiescence of the fixed without need of a demand
lessor, unless a notice to the contrary had 2. No fixed period
previously been given by the either party. a. For rural lands (Art. 1682,
NCC) – It shall be all time
Q: What are the requisites for tacita necessary for the gathering of
reconducion? fruits which the whole estate
may yield in 1 year, or which it
A: may yield once
The term of the original contract has expired b. For urban lands
The lessor has not given the lessee a notice 3. If rent is paid daily, lease is from the day to
to vacate day
The lessee continued enjoying the thing 4. If rent is paid weekly, lease is from week to
leased for at least 15 days with the week
acquiescence of the lessor 5. If rent paid monthly, lease is from month to
month
Q: When is there no implied new lease? 6. If rent is paid yearly, lease is from year to
year
A:
1. Before or after the expiration of the Q: When is the lessee entitled to a reduction of
term, there is a notice to vacate given rent?
by either party;
2. There is no definite fixed period in the A:
original lease contract as in the case of GR: In case of the loss of more than one‐half
successive renewals. of the fruits through extraordinary and
unforeseen fortuitous events.
Q: What are the effects of an implied new lease?
XPN: Stipulation to the contrary.
A:
1. The period of the new lease is not that Note: It is applicable only to lease of rural lands.
stated in the original contract; but for
then legal periods established by law in Q: What are the rules on the extension of the
Art. 1682, if the lease is rural lease, or lease period?
Art. 1687, if the lease is urban lease.
2. Accessory obligations contracted by a A:
third person are extinguished (Art. 1. If a lease contract for a definite terms
1672, NCC) allows lessee to duly notify lessor of his
3. Other terms of the original contract are desire to so extend the term, unless the
revived contrary is stipulated
2. “May be extended” as stipulation –
Note: The terms that are revived are only lessee can extend without lessor’s
those which are germane to the consent but lessee must notify lessor
enjoyment of possession, but not those 3. “May be extended for 6 years agreed
with respect to special agreements which upon by both parties” as stipulation –
are by nature foreign to the right of this must be interpreted in favor of the
occupancy or enjoyment inherent in a lessee. Hence, oridinarily the lessee, at
contract of lease. the end of the original period, may
either:
a. leave the premises; or
b. remain in possession
4. In co‐ownership, assent of co‐owner is
needed, otherwise, it is void or
443
ACADEMICS CHAIR: LESTER JAY ALAN E. FLORES II U N I V E R S I T Y O F S A N T O T O M A S
VICE CHAIRS FOR ACADEMICS: KAREN JOY G. SABUGO & JOHN HENRY C. MENDOZA
VICE C HAIR FOR A DMINISTRATION AND F INANCE : JEANELLE C. LEE Facultad de Derecho Civil
VICE CHAIRS FOR LAY‐OUT AND DESIGN: EARL LOUIE M. MASACAYAN & THEENA C. MARTINEZ
UST GOLDEN NOTES 2011
ineffective as against non‐consenting 4. Loss of the thing
co‐owners 5. Rescission due to the performance of
5. Where according to the terms of the the obligations of one of the parties
contract, the lease can be extended stated under Art. 1654 and 1657.
only by the written consent of the 6. The dwelling place or any other building
parties thereto, no right of extension is unfit for human habitation and is
can rise without such written consent dangerous to life or health.
6. If the option is given to the lessor, the
lessee cannot renew the lease against Q: Will the death of the lessee extinguish the
the former’s refusal lease agreement?
7. The lessor may impose additional
conditions after the expiration of the A: No. The death of the lessee will not extinguish
original period the lease agreement, since lease is not personal
8. Par. 2, Art. 1687, NCC provides that in in character and the right is transmissible to the
the event that the lessee has occupied heirs. (Heirs of Dimaculangan v. IAC, G.R. No.
the leased premises for over a year, 68021, Feb. 20, 1989) (1997 Bar Question)
courts may fix a longer term of lease
Q: What are the remedies of the aggrieved party
Note: The power of the courts to establish in case of non‐compliance of the other party’s
a grace period is potestative or obligations under Arts. 1654 (obligations of
discretionary, depending on the particular lessor) and 1657 (obligations of lessee)?
circumstances of the case.
Q: What is perpetual lease? A:
1. Rescission with damages
A: A lease contract providing that the lessee can 2. Damages only allowing the lease to
stay in the premises for as long as he wants and subsists
for as long as he can pay the rentals and its
increase. Q: What are the restrictions in exercising the
right to rescind?
Note: It is not permissible. It is a purely potestative
condition because it leaves the effectivity and A: JAS
enjoyment of leasehold rights to the sole and 1. Breach must be Substantial and
exclusive will of the lessee.
fundamental (de minimis non curat lex –
the law is not concerned with trifles).
TERMINATION OF LEASE
2. It requires Judicial action.
3. It can be filed only by the Aggrieved
Q: When does immediate termination of lease
party.
apply?
Q: In case of action to rescind, may the other
A:
party validly request for time within which to
1. Only to dwelling places or any other
comply with his duties?
building intended for human habitation
2. Even if at the time the contract was
A: No. The aggrieved party seeking rescission will
perfected, the lessee knew of the
prevail. Under Article 1659, NCC, the court has no
dangerous condition or waived the right
discretion to refuse rescission, unlike the
to rescind the contract on account of
situation covered by Art. 1191, NCC, in the
this condition
general rules on obligations [Bacalla v. Rodriguez,
et. al., C.A. 40 O.G. (supp.), Aug. 30, 1941]
Q: What are the grounds for termination of
lease?
Q: How is the amount of damages measured?
A: WiRe‐LEx‐Run
A: Difference between the rents actually received
1. Expiration of the period
and that amount stipulated in the contract
2. Resolution of the right of lessor (i.e.:
representing the true rental value of the
when the lessor is a usufructuary and
premises. (A. Maluenda and Co. vs. Enriquez, 49
the usufruct is terminated)
Phil. 916)
3. By the will of the purchaser or
transferee of the thing
444 CIVIL LAW TEAM:
ADVISER: ATTY. ELMER T. RABUYA; SUBJECT HEAD: ALFREDO B. DIMAFELIX II;
ASST. SUBJECT HEADS: KAREN FELIZ G. SUPNAD, LAMBERTO L. SANTOS III; MEMBERS: PAUL ELBERT E. AMON, ALSTON ANARNA, OZAN J.
FULLEROS, CECILIO M. JIMENO, JR., ISMAEL SARANGAYA, JR.; CONTRIBUTORS: LOISE RAE G. NAVAL, MONICA JUCOM
LEASE
Q: Under a written contract dated December 1, Ernie can file a cross‐claim against Joel
1989, Victor leased his land to Joel for a period for damages on account of the
of five (5) years at a monthly rental of P1,000.00, rescission of the contract of assignment.
to be increased to P1,200.00 and P1,500.00 on Conrad can file a counter‐claim against
the third and fifth year, respectively. On January Victor for damages for lack of causes of
1, 1991, Joel subleased the land to Conrad for a action at the time of the filing of the
period of 2 years at a monthly rental of suit. (2005 Bar Question)
P1,500.00. On December 31, 1992, Joel assigned
the lease to his compadre, Ernie, who acted on Q: A is the owner of a lot on which he
the belief that Joel was the rightful owner and constructed a building in the total cost of
possessor of the said lot. Joel has been faithfully P10,000,000. Of that amount B contributed
paying the stipulated rentals to Victor. When P5,000,000 provided that the building as a whole
Victor learned on May 15, 1992 about the would be leased to him (B) for a period of ten
sublease and assignment, he sued Joel, Conrad years from January 1, 1985 to December 31,
and Ernie for rescission of the contract of lease 1995 at a rental of P100,000 a year. To such
and for damages. condition, A agreed. On December 20, 1990, the
1. Will the action prosper? If so, building was totally burned. Soon thereafter, A’s
against whom? Explain. workers cleared the debris and started
2. In case of rescission, discuss the construction of a new building. B then served
rights and obligations of the notice upon A that he would occupy the building
parties. being constructed upon completion, for the
unexpired portion of the lease term, explaining
A: that he had spent partly for the construction of
1. Yes, the action for rescission of the the building that was burned. A rejected B’s
lease will prosper because Joel cannot demand. Did A do right in rejecting B’s demand?
assign the lease to Ernie without the
consent of Victor (Art. 1649, NCC). But A: Yes, A was correct in rejecting the demand of
Joel may sublet to Conrad because B. As a result of the total destruction of the
there is no express prohibition (Art. building by fortuitous event, the lease was
1650, NCC; Alipio v. CA, G.R. No. extinguished. (Art. 1655, NCC) (1993 Bar
134100, Sept. 29, 2000). Question)
Victor can rescind the contract of lease II. LEASE OF WORK OR SERVICES
with Joel, and the assignment of the
lease to Ernie, on the ground of Q: What is a contract for a piece of work?
violation of law and of contract. The
sub‐lease to Conrad remained valid for A: A contract whereby one of the parties binds
2 years from January 1, 1991, and had himself to produce a result out of his work or
not yet lapsed when the action was labor and the other party binds himself to pay
filed on May 15, 1992. remuneration therefor.
2. In case of rescission, the rights and Q: What is a contract for lease of services?
obligations of the parties should be as
follows: At the time that Victor filed suit A: A contract whereby one party binds himself to
on May 15, 1992, the assignment had render some service to the other party consisting
not yet lapsed. It would lapse on his own free activity of labor, and not its result
December 1, 1994, the very same date and the other party binds himself to pay a
that the 5‐year basic lease would remuneration therefor. (Pineda Sales, p. 440‐441,
expire. Since the assignment is void, 2002 ed)
Victor can get the property back
because of the violation of the lease. Q: Distinguish lease of services from agency.
Both Joel and Ernie have to surrender
possession and are liable for damages. A:
But Conrad has not yet incurred any LEASE OF SERVICES AGENCY
liability on the sublease which still Based on employment –
Based on representation
subsisted at the time of the filing of the the lessor of services
– agent represent his
action on May 15, 1992. does not represent his
principal and enter into
employer nor does he
juridical acts
execute juridical acts
445
ACADEMICS CHAIR: LESTER JAY ALAN E. FLORES II U N I V E R S I T Y O F S A N T O T O M A S
VICE CHAIRS FOR ACADEMICS: KAREN JOY G. SABUGO & JOHN HENRY C. MENDOZA
VICE C HAIR FOR A DMINISTRATION AND F INANCE : JEANELLE C. LEE Facultad de Derecho Civil
VICE CHAIRS FOR LAY‐OUT AND DESIGN: EARL LOUIE M. MASACAYAN & THEENA C. MARTINEZ
UST GOLDEN NOTES 2011
Principal contract Preparatory contract (Paterno v. Jao Yan, GR. No. L‐12218, February 28,
1961)
Q: Distinguish contract of piece of work and
contract of lease services. Q: What is the purpose in recording a lease?
A: A: A lease does not have to be recorded in the
PIECE OF WORK LEASE OF SERVICES Registry of Property to be binding between the
Object of contract is the Object of contract is the parties; registration is useful only for the purpose
result of the work service itself and not the of notifying strangers to the transaction. (Art
without considering the result which it generates 1648, NCC)
labor that produced it
If the result promised is Even if the result Q: What is meant by proper authority?
not accomplished, the intended is not attained,
lessor or promissory is the services of the A: Proper authority means a power of attorney to
not entitled to lessor must still be paid constitute the lease.
compensation
Q: When is a proper authority required?
Q: What if the value has not been agreed upon
in a contract of lease of service? A:
1. Husband – with respect to the
A: When no rate has been fixed, the same shall be paraphernal real estate of the wife;
determined by the courts according to the uses 2. Father or Guardian – with respect to the
and customs of the place and the evidence, property of the minor or the ward;
unless the services by agreement were to be 3. Manager – with respect to the property
rendered gratuitously. (Pineda Sales, p. 444, under administration.
20002 ed)
Q: Who is a manager?
III. LEASE OF RURAL AND URBAN LANDS
A:
Q: What is a rural land (Product‐Producing 1. administrator of a conjugal property
Lands)? 2. administrator of a co‐ownership
3. administrator of state patrimonial
A: Regardless of site, if the principal purpose is to property
obtain products from the soil, the lease is of rural
lands. Hence, as used here, rural lands are those Q: Is the husband the administrator of the
where the lessee principally is interested in soil paraphernal real property?
products.
A: No, unless such administrator has been
Q: What is an urban land (Non‐Product transferred to him by virtue of a public document.
Producing Lands)? (Art. 110, FC)
A: Lands leased principally for purposes of Q: A husband was properly given his wife
residence are called urban lands. authority to administer the paraphernal real
property. Does this necessarily mean that just
Q: What is the form required of a contract of because the husband is now the administrator,
lease of things? he can lease said property without any further
authority?
A: Lease may be made orally, but if the lease of
real property is for more than a year, it must be in A: It depends.
writings under the statute of frauds. 1. If the lease will be for one year or less,
no other authority is required.
Note: Where the written contract of lease called for 2. If the lease on the real property will be
the erection by the tenant, of a building of strong for more than a year, then a special
wooden materials, but what he actually did power of attorney (aside from the
construct on the leased premises was semi‐concrete public instrument transferring
edifice at a much higher cost, in accordance with a administration) is required. (Art.1878,
subsequent oral agreement with the lessor, oral
NCC)
evidence is admissible to prove the verbal
3. Furthermore, whether it be a) or b), if
modification of the original terms of the lease.
the lease is to be recorded, there must
446 CIVIL LAW TEAM:
ADVISER: ATTY. ELMER T. RABUYA; SUBJECT HEAD: ALFREDO B. DIMAFELIX II;
ASST. SUBJECT HEADS: KAREN FELIZ G. SUPNAD, LAMBERTO L. SANTOS III; MEMBERS: PAUL ELBERT E. AMON, ALSTON ANARNA, OZAN J.
FULLEROS, CECILIO M. JIMENO, JR., ISMAEL SARANGAYA, JR.; CONTRIBUTORS: LOISE RAE G. NAVAL, MONICA JUCOM
LEASE
447
ACADEMICS CHAIR: LESTER JAY ALAN E. FLORES II U N I V E R S I T Y O F S A N T O T O M A S
VICE CHAIRS FOR ACADEMICS: KAREN JOY G. SABUGO & JOHN HENRY C. MENDOZA
VICE C HAIR FOR A DMINISTRATION AND F INANCE : JEANELLE C. LEE Facultad de Derecho Civil
VICE CHAIRS FOR LAY‐OUT AND DESIGN: EARL LOUIE M. MASACAYAN & THEENA C. MARTINEZ
UST GOLDEN NOTES 2011
IV. RIGHTS AND OBLIGATIONS 2. If repairs last for 40 days or more,
OF LESSORS AND LESSEES lessee can ask for reduction of the rent
in proportion to the time – including the
st
Q: Who are the persons disqualified to become 1 40 days – and the part of the
lessees? property of which he is deprived
A: Note: In either case, rescission may be availed of if
GR: Husband and wife with respect to their the main purpose of the lease is to provide a
dwelling place and the property becomes
separate properties.
uninhabitable.
XPN: Separation of property agreed
Q: What are the effects if the lessor fails to make
upon or judicial separation of property.
urgent repairs?
Those disqualified due to fiduciary
A: The lessee may:
relationship.
1. order repairs at the lessor’s cost;
2. sue for damages;
Q: What are the obligations of the lessor? 3. suspend the payment of the rent; or
4. ask for rescission, in the case of
A: ReD‐CaP substantial damage to him.
1. To Deliver the things in such condition
as to render it fit for the use intended Q: What are the kinds of trespass in lease?
(cannot be waived)
2. GR: To make, during the lease all the A:
necessary Repairs in order to keep it 1. Trespass in the fact (perturbation de
suitable for the use to which it has been mere hecho) – physical enjoyment is
devoted reduced. Lessor will not be liable.
2. Trespass in the law (perturbation de
XPN: Stipulation to the contrary. derecho) – a 3rd person claims legal
right to enjoy the premises. Lessor will
3. To maintain the lessee in the Peaceful be held liable.
and adequate enjoyment of the lease
for the entire duration of the contract Q: What are the obligations of the lessee?
4. Cannot alter the form of the thing A: TRUE‐PRU
leased 1. Pay the price of the lease according to
the terms stipulated
Q: What are the rules on changing the form of 2. Use the thing leased as a diligent father
thing leased? of a family devoting it to the use
stipulated, and in the absence of
A: stipulation, to that which may be
1. Lessor can alter the thing leased inferred from nature of thing leased,
provided there is no impairment of the according to the custom of the place
use to which the things are devoted 3. Pay the Expenses of the deed of lease
under the terms of the lease 4. Notify the lessor of Usurpation or
2. Alteration can be made by lessee untoward acts
provided the value of property is not 5. To notify the lessor of need for Repairs
substantially impaired 6. To Return the property leased upon
termination of the lease in the same
Q: What are the rules if urgent repairs are condition as he receive it except when
necessary? what has been lost or impaired by lapse
of time, ordinary wear and tear or
A: inevitable cause/ fortuitous event
1. Lessee is obligated to tolerate the work, 7. Tolerance of urgent repairs which
although it may be annoying to him and cannot be deferred until the end of
although during the same time he may lease (par. 1, Art. 1662, NCC)
be deprived of a part of the premises, if
repairs last for not more than 40 days
448 CIVIL LAW TEAM:
ADVISER: ATTY. ELMER T. RABUYA; SUBJECT HEAD: ALFREDO B. DIMAFELIX II;
ASST. SUBJECT HEADS: KAREN FELIZ G. SUPNAD, LAMBERTO L. SANTOS III; MEMBERS: PAUL ELBERT E. AMON, ALSTON ANARNA, OZAN J.
FULLEROS, CECILIO M. JIMENO, JR., ISMAEL SARANGAYA, JR.; CONTRIBUTORS: LOISE RAE G. NAVAL, MONICA JUCOM
LEASE
Q: What is the effect of the destruction of the 1. Ordinary fortuitous event – no
thing leased? reduction. The lessee being the owner
of crops must bear the loss. Res perit
A: domino
1. Total destruction by fortuitous event – 2. Extraordinary fortuitous event –
Lease is extinguished. a. More than one‐half of the
2. Partial destruction fruits were lost, there is a
a. Proportional reduction of reduction (XPN: specific
rent; or stipulation to the contrary)
b. Rescission of the lease. b. Less than one‐half, or if the
loss is exactly one‐half, there
Q: When may lessee suspend payment of rent? is no reduction
A: When the lessor fails to: Note: The rent must be reduced proportionately.
1. undertake urgent repairs; or
2. maintain the lessee in peaceful and Q: X leased his land to Y for the purpose of
adequate enjoyment of the property growing crops thereon. Due to an extraordinary
leased. fortuitous event, more than one‐half of the
crops were. In the lease contract, the rent was
Note: For the intervening period, the lessee does not fixed at an aliquot (proportional) part of the
have to pay the rent. crops. Is Y entitled to a reduction in rents?
A: No, because here the rent is already fixed at an
Q: When does the suspension become effective? aliquot part of the crops. Thus, every time the
crops decrease in number, the rent is reduced
A: The right begins: automatically. If therefore, the tenant here
1. In the case of repairs – from the time of refuses to give the stipulated percentage, he can
the demand and it went unheeded be evicted. (Hijos de I. dela Rama v. Benedicto, 1
2. In case of eviction – from the time the Phil. 495)
final judgment for eviction becomes
effective Q: What is the rule for reduction of rent?
Q: What are the alternative remedies of the A: The reduction on rent can be availed of only if
aggrieved party in case of non‐fulfillment of the loss occurs before the crops are separated
duties? from their stalk, root, or trunk. If the loss is
afterwards, there is no reduction of rent.
A:
1. Rescission and damages Q: What is the duration of rural lease with an
2. Damages only, allowing the contract to unspecified duration?
remain in force (specific performance)
A: The lease of a piece of rural land, when its
V. SPECIAL RULES FOR LEASE OF RURAL AND duration has not been fixed, is understood to
URBAN LANDS have been for all the time necessary for the
gathering of the fruits which the whole estate
RURAL LANDS leased may yield in one year, or which it may
yield once, although two or more years have to
elapse for the purpose. (Art. 1682, NCC)
Q: What is the effect of sterility of land in case of
rural lease? Q: A rural lease was agreed upon to last for a
certain definite period. But the tenant planted
A: There is no reduction. The fertility or sterility of fruit trees which would require a long period of
the land has already been considered in the fixing time to bear fruit, as well as introduce certain
of the rent. more or less valuable improvements. Has this
act of the tenant changed the duration of the
Q: What is the effect of damage caused by a contract?
fortuitous event on the rural lease?
A: No, the duration of the lease has not been
A: changed. There was a fixed period for the lease
and therefore the nature of the fruit trees or
449
ACADEMICS CHAIR: LESTER JAY ALAN E. FLORES II U N I V E R S I T Y O F S A N T O T O M A S
VICE CHAIRS FOR ACADEMICS: KAREN JOY G. SABUGO & JOHN HENRY C. MENDOZA
VICE C HAIR FOR A DMINISTRATION AND F INANCE : JEANELLE C. LEE Facultad de Derecho Civil
VICE CHAIRS FOR LAY‐OUT AND DESIGN: EARL LOUIE M. MASACAYAN & THEENA C. MARTINEZ
UST GOLDEN NOTES 2011
valuable improvements is immaterial. (Iturralde v. or thru the employment of farm
Garduno, 9 Phil. 605) machineries
3. tenant violates or fails to comply with
Q: If at the end of the lease, there are still the terms and conditions of the
pending crops, who will own them? contract or the RA 1199
4. failure to pay the agreed rental or
A: The lessee. However, a contrary stipulation will deliver the landholder’s share
prevail. 5. tenant uses the land for different
purpose
Q: What is the rule for land tenancy on shares? 6. share‐tenant fails to follow farm
practices which will contribute towards
A: This refers to the contracts of aparceria. Land the proper care and increased
tenancy on shares are primarily governed by production
special laws (ex: Agricultural Tenancy Act, RA 7. negligence permits serious injury to
1199), and suppletorily, by the stipulations of the land which will impair its productive
parties, the provisions on partnership, and the capacity
customs of the place. 8. conviction by a competent court of a
tenant or any member of his immediate
Q: Who is a tenant? family or farm household of a crime
against the landholder or a member of
A: A tenant is a person, who, himself, and with his immediate family.
the aid of available from within his immediate
farm household, cultivates the land belonging to, Q: Will the sale of the land extinguish the farm‐
or possessed by another, with the latter’s consent tenancy relationship?
for the purpose of production, sharing the
produce with the landholder under the share A: No. The purchaser or the transferee shall
tenancy system, or paying to the landlord a price assume the rights and obligations of the former
certain or ascertainable in produce, or in money landholder in relation to the tenant.
or both, under the leasehold tenancy system.
(Pangilinan v. Alvendia, GR no. 10690, June 28, Q: Does death extinguish the tenancy
1957) relationship?
Q: What is included in an immediate farm A: It depends.
household? 1. Death of tenant – extinguishes
relationship but heirs and members of
A: This includes the members of the family of the his immediate farm household may
tenant, and such other person/s, whether related continue to work on the land until the
to the tenant or not, who are dependent upon close of the agricultural year.
him for support, and who usually help him 2. Death of landholder – does not
operate the farm enterprise. extinguish the relationship because his
heirs shall assume his rights and
Q: Can a tenant work for different landowners? obligation.
A: It is prohibited for a tenant, whose holding is 5 Q: Does the expiration of the period of the
hectares or more, to contract work at the same contract of tenancy fixed by the parties
time on two or more separate holdings belonging extinguish the relationship?
to different landholders without the knowledge
and consent of the landholder with whom he had A: No. The landlord is required by law, if the
first entered into the tenancy relationship. (Sec. tenant does not voluntarily abandon the land or
24, RA 1199) turn it over to him, to ask the court for an order
of dispossession of the tenant. (Sec. 49, RA 1199,
Q: What are the grounds for ejectment of the as amended by RA 2263)
tenant on shares?
A:
1. voluntary surrender of the land
2. bona fide intention of the landholders
to cultivate the land himself personally
450 CIVIL LAW TEAM:
ADVISER: ATTY. ELMER T. RABUYA; SUBJECT HEAD: ALFREDO B. DIMAFELIX II;
ASST. SUBJECT HEADS: KAREN FELIZ G. SUPNAD, LAMBERTO L. SANTOS III; MEMBERS: PAUL ELBERT E. AMON, ALSTON ANARNA, OZAN J.
FULLEROS, CECILIO M. JIMENO, JR., ISMAEL SARANGAYA, JR.; CONTRIBUTORS: LOISE RAE G. NAVAL, MONICA JUCOM
LEASE
URBAN LANDS Q: What is the effect if the contract for
household service is more than 2 years?
Q: What are the rules applicable to repairs which
an urban lessor is liable? A: The contract is void insofar as the excess is
concerned.
A:
1. Special stipulation Q: Is there a form of contract required for
2. If none, custom of the place. household service?
Q: What are the rules when the duration of lease A: No formalities are required for the contract of
is not fixed? household service, and even if the term of
employment should exceed one year, the Statute
A: of Frauds will not apply because in the contract,
1. If there is a fixed period ‐ the lease performance is supposed to commence right
would be for the said period. away.
2. If there are no fixed period ‐ apply the
following: Q: Can house helpers work more than ten hours
a. rent paid daily – lease is from a day?
day to day
b. rent paid weekly – lease is A: Yes because the law says “shall not be
from week to week required.” Hence, if the helper agrees to work
c. rent paid monthly – lease overtime, this is clearly permissible. (Baloloy v.
from month to month Uy, [CA] 62 O.G. 5661)
d. rent paid yearly – lease from
year to year Q: When can additional compensation be
demanded?
VI. HOUSEHOLD SERVICE
A:
Q: What is the scope of household service? 1. if the voluntary overtime work is agreed
upon;
A: It includes the work of family servants and 2. if the nature of the work so demands
driver but not that of laborers in a commercial or such overtime service.
industrial enterprise.
Q: What are included in the computation of
Q: Is working to reduce indebtedness allowed? period for hours of work?
A: Yes. What is prohibited is to work as a servant A: The hours of work include not only those of
for free. actual work but also the time during which the
services of the helper are “available” to the
Q: When is medical attendance given free? employer, even if the services are not availed of.
A: Medical attendance shall be given free only if Q: What is the rule for yayas?
the injury or illness arose out of and in the course
of employment. A: A “yaya” or nursemaid for small children, by
the nature of her work, may render more than 10
Q: What is the duration of the contract for hours work, but she is evidently entitled to a
household service? higher rate of compensation.
A: 2 years. Any period agreed upon in excess of Q: What is the rule on vacation for helpers?
two years is void.
A: The law says “four days” vacation each month,
Note: Upon expiration, however, it is subject to a with pay. If the helper insists on this, the
renewal for such periods as may be agreed upon by employer must grant the vacation, and he cannot
the parties. (Pineda Sales, p. 551, 2002 ed, Article insist on merely giving the monetary value.
142, Labor Code)
451
ACADEMICS CHAIR: LESTER JAY ALAN E. FLORES II U N I V E R S I T Y O F S A N T O T O M A S
VICE CHAIRS FOR ACADEMICS: KAREN JOY G. SABUGO & JOHN HENRY C. MENDOZA
VICE C HAIR FOR A DMINISTRATION AND F INANCE : JEANELLE C. LEE Facultad de Derecho Civil
VICE CHAIRS FOR LAY‐OUT AND DESIGN: EARL LOUIE M. MASACAYAN & THEENA C. MARTINEZ
UST GOLDEN NOTES 2011
VII. CONTRACT OF LABOR VIII. CONTRACT FOR PIECE OF WORK
Q: What is a contract of labor? Q: Distinguish contract for piece of work from
lease of services.
A: It is a consensual, nominate, principal, and
commutative contract whereby one person, CONTRACT FOR PIECE
LEASE OF SERVICES
called the employer, compensates another, called OF WORK
the laborer, worker, or employee, for the latter’s The object is the
service. It is relationship impressed with public The object is services.
resultant work or object.
interest in keeping with our constitutional policy
of social justice. The risk is generally
borne by the Er, not by
The risk is borne by the
the worker unless the
Q: What are the essential characteristics of a worker before delivery.
latter is guilty of fault or
contract of labor?
negligence.
A:
Q: What are the elements of the contract of
1. Employer(Er) freely enters into a
work?
contract with the employee(Ee);
2. Employer can select who his Ee will be
A:
3. Employer can dismiss the Ee; the
1. Consent
worker in turn can quit his job;
2. Object – execution of piece of work
4. Employer must give remuneration; and
3. Cause – certain price or compensation
5. Employer can control and supervise the
conduct of the Ee.
Q: Who is a contractor?
A. OBLIGATION IN CASE OF
A: The worker is also called a contractor. He in
DEATH OR INJURY OF LABORERS
turn may obtain the services of others, who will
work under him.
Q: What are the rules regarding Er’s liability in
case of death or injury?
Q: What is the test to determine if one is an Ee
or an independent contractor?
A:
1. If the cause of the death or personal
A: The “right of control” test is used. If the person
injury arose out of and in the course of
for whom services are to be performed controls
employment, the Er is liable.
only the end to be achieved, the worker is a
2. If the cause was due to the Ee’s own
contractor; if the former controls not only the
notorious negligence, or voluntary act
end but also the manner and means to be used,
or drunkenness, the employer shall not
the latter is an employee.
be liable.
3. If the cause was partly due to the Ee’s
Q: What can the contractor furnish?
lack of sue care, the compensation shall
be inequitably reduced.
A: The contractor may furnish:
4. If the cause was due to the negligence
1. Both material and the labor,
of a fellow Ee, the Er and the guilty Ee
2. Or only the labor.
shall be liable solidarily.
5. If the cause was due to the intentional
Q: What are the duties of a contractor who
or malicious act of fellow Ee, the felloe
furnishes both work and the material?
Ee is liable; also the Er unless he
exercised due diligence in selecting and
A: This is equivalent to sale; therefore, these are
supervising said Ee.
the duties:
1. To deliver
2. To transfer ownership
3. To warrant against eviction and hidden
defects
452 CIVIL LAW TEAM:
ADVISER: ATTY. ELMER T. RABUYA; SUBJECT HEAD: ALFREDO B. DIMAFELIX II;
ASST. SUBJECT HEADS: KAREN FELIZ G. SUPNAD, LAMBERTO L. SANTOS III; MEMBERS: PAUL ELBERT E. AMON, ALSTON ANARNA, OZAN J.
FULLEROS, CECILIO M. JIMENO, JR., ISMAEL SARANGAYA, JR.; CONTRIBUTORS: LOISE RAE G. NAVAL, MONICA JUCOM
LEASE
Q: What are the remedies of the Er in case of 2. If the acceptance is made without
defects? objection, the Er may still sue for
hidden defects.
A:
1. Ask the contractor to remove the defect Q: Where is the place of payment?
or to execute another work.
2. If the contractor fails or refuses, the Er A:
can ask another at the contractor’s 1. Where stipulated
expense. If a building is involved, 2. If no stipulation, then at time and place
expenses for correction and completion of delivery.
may be recovered.
Q: What are the rules on liability for collapse of a
Q: What is the rule on agreements waiving or building?
limiting the contractor’s liability?
A:
A: 1. The collapse of the building must be
1. In the absence of fraud, the agreement within 15 years from the completion of
would ordinarily be valid. the structure.
2. In the absence of prohibitory statute, 2. The prescriptive period is 10 years
the validity of a limitation is generally following the collapse.
upheld, with a view of obtaining 3. If the engineer or architect supervises
compensation commensurate to the the construction, he shall be solidarily
risk assumed. liable with the contractor.
4. The liability does applies to collapse or
Q: A asked B to make a radio cabinet. B bound ruin, not to minor defects.
himself to furnish the material. Before the radio 5. Even if payment has been made, an
cabinet could be delivered, it was destroyed by a action is still possible. (Art. 1723, NCC)
fortuitous event. A) Who suffers the loss? B) Is
the contract extinguished? Q: Who is liable when a building collapses during
an earthquake?
A:
B suffers the loss of both the materials and A: It depends.
the work, unless there was mora 1. If the proximate cause of the collapse of
accipiendi. If there was mora accipiendi, the building is an earthquake, no one
it is evident that A suffers the loss. can be held liable in view of the
No, and therefore B may be required to do fortuitous event.
the work all over again, unless there 2. If the proximate cause is, however,
had been a prior stipulation to the defective designing or construction, or
contrary or unless a re‐making is directly attributable to the use of
possible. (Art. 1717, NCC) inferior or unsafe material, it is clear
that liability exists.
Note: The law merely refers to the burden of the
loss, and not to the extinguishment of the contract. Q: Can the contractor withdraw or demand for a
higher price when the work is already
Q: Who suffers the loss in case of a fortuitous stipulated?
event or an unavoidable accident?
A:
A: As a general principle, in the absence of an GR: the contractor cannot withdraw or
express agreement to the contrary, the demand a higher price even if there be
contractor must bear the loss from the a higher cost of labor or materials.
destruction of work underway, even in case of an
unavoidable accident. XPNs:
1. if there was a written authorized
Q: What is the effect when the Er accepts the change of plans and specifications;
work? 2. if the additional price is also in
writing, agreed upon by both
A: parties.
1. The contractor is generally relieved of
liability.
453
ACADEMICS CHAIR: LESTER JAY ALAN E. FLORES II U N I V E R S I T Y O F S A N T O T O M A S
VICE CHAIRS FOR ACADEMICS: KAREN JOY G. SABUGO & JOHN HENRY C. MENDOZA
VICE C HAIR FOR A DMINISTRATION AND F INANCE : JEANELLE C. LEE Facultad de Derecho Civil
VICE CHAIRS FOR LAY‐OUT AND DESIGN: EARL LOUIE M. MASACAYAN & THEENA C. MARTINEZ