Arturo P. Santos vs.

Court of Appeals

G.R. No. 60210, March 27, 1984

Facts:   

This is a petition for review on certiorari from the decision of Court of Appeals affirming the
unlawful detainer case instituted by Aurora Gutierrez against Arturo P. Santos and Adelina Y.
Santos. The subject apartment must be vacated on grounds that she needs the premises for her
personal use and the necessity of repairs thereon, and that the petitioners were delinquent in the
payment of rentals.

Petitioners, in their "Answer with Counterclaim" admit that they are "the legitimate
tenants and/or lessees of the apartment with the present rental rate of P250.00 per month, on a
month-to-month contract of lease.

Issue:

Whether or not the respondent court erred in stating that a contract of lease of residential
apartment involving a rental of P250.00 a month may be terminated at the end of the month
without default on the part of the lessee.

Held:

No.The aforequoted provision of the agreement on occupancy of the apartment cannot

but mean as providing for a definite period of the lease. The parties expressly agreed that upon
proper notice, one may terminate the agreement.

The contractual relations between petitioner Rantael and respondent Llave ceased after
the expiration of the first thirty days reckoned from August 1, 1974 but continued for the next
thirty-day period and expired after the last day thereof, repeating the same cycle for the
succeeding thirty-day periods, until the said respondent Llave exercised her express prerogative
under the agreement to terminate the same. Therefore the petition was dismissed, affirming the
respondent court and ordered that the premise considered have to be vacated by the petitioners .

A lease on a “month to month basis” is one with a definite term, and is, therefore, not
governed by PD 20 or Batas Pambansa Bilang 25.
Balucanag vs. Judge Francisco

G.R. No. 33422, May 30, 1983

Facts:

Charvet owns a lot in Pandacan, Manila. In 1952, the said lot was leased to respondent
Stohner for a period of 5 years at the monthly rental of 2140.00. Stohner made fillings on the
land and constructed a house. On 1966, Charvet sold the lot to petitioner Balucanag. For
Stohner’s failure to pay the rents, Balucanag, thru counsel, wrote Stohner a letter demanding that
he vacate the premises. Stohner claimed that he was a builder in good faith.

Balucanag instituted in the City Court of Manila an ejectment suit against Stohner which
rendered a decision in favor of Balucanag. On appeal by Stohner, the CFI of Manila, presided by
Judge Francisco set aside the decision and held that Stohner was a builder in good faith because
he had constructed the residential house with the consent of the original lessor, Charvet. And that
after expiration of the lease contract on 1957, Charvet did not order for Stohner’s ejectment nor
removal of the house.

Balucanag filed petition for review.

Issue:

Whether or not Balucanag can terminate the lease considering that the contract between
Stohner and Charvet had already expired on 1957.

Held:

Yes. An implied new lease was created between Balucanag and Stohner, the period of
which is established by Art. 1687 of the Civil Code.

Under Art. 1687, if the period for the lease has not been fixed, it is understood to be from
year to year, if the rent agreed upon is annual; from month to month, if it is monthly: from week
to week, if the rent is weekly: and from day to day, if the rent is to be paid daily.

If the rent agreed upon is payable on a monthly basis, the duration of the lease is deemed
from month to month. The lessor is allowed to terminate the lease after each month, provided
there is due notice. After such notice, the lessee’s right to continue in possession ceases, and an
action of unlawful detainer may be brought against him.
Ace-Agro Development Corp. vs. Court of Appeals

G.R. No. 119729, January 21, 1997

Facts:

Ace-Agro had been cleaning soft drink bottles and repairing wooden shells for Cosmos
within its company premises in San Fernando, Pampanga. On April 25, 1990, a fire broke out in
the Cosmos plant. As a result, Ace-Agro’s work stopped. On May 15, 1990, Ace-Agro requested
Cosmos to resume its services but they were advised that on account of the fire destroying nearly
all the bottles and shells, Cosmos was terminating their contract. Ace-Agro requested Cosmos to
reconsider its decision but upon receiving no reply, they informed the employees of the
termination of their employment, which led the employees to file a complaint for illegal
dismissal before the Labor Arbiter against both Ace-Agro and Cosmos.

Ace-Agro sent another letter for reconsideration to Cosmos to which they replied that
they could resume work but outside company premises. Ace-Agro refused the offer, claiming
that to work outside would incur additional transportation costs. Cosmos then advised Ace-Agro
that they could resume work inside the company premises but then Ace-Agro unjustifiably
refused because it wanted and extension of the contract to make up for the period of inactivity.

Issue:

Whether or not the period during which work has been suspended justifies an extension
of the term of the contract due to the suspension of work under a contract has been brought about
by force majeure.

Held:

No. The suspension of work due to fire does not merit an automatic extension. The
stipulation that in the event of a fortuitous event or force majeure the contract shall be deemed
suspended during the said period does not mean that it stops the running of the period the
contract has been agreed upon to run.

The fact that the contract is subject to a resolutory period, which relieves the parties of
their respective obligations, does not stop the running of the period of their contract.
Millare vs. Hernando

G.R. No. 55480, June 30, 1987

Facts:

A five-year Contract of Lease was executed between Millare as lessor and the Spouses
Co as lessee. They agreed on a monthly rental rate of P350 of the “People’s Restaurant” until
May 31, 1980.

During the last week of May 1980, Millare informed the Co spouses that they could
continue leasing the property so long as they were amenable to paying P1,200 a month. The
Spouses Co counter-offered with P700 a month. At this point, Millare allegedly stated that the
amount of monthly rentals could be resolved at a later time since “the matter is simple among
us”, which alleged remark was supposedly taken by the spouses Co to mean that the Contract of
Lease had been renewed, prompting them to continue occupying the subject premises and to
forego their search for a substitute place to rent. In contrast, the lessor flatly denied ever having
considered, much less offered, a renewal of the Contract of Lease.

On July 22 and 28, 1980, Millare sent demand letters requesting them to vacate as she
had no intention of renewing the Contract of Lease, which had expired. The spouses Co signified
their intention to deposit the P700 monthly rental in court, in view of Mrs. Millare’s refusal to
accept their counter-offer.

As the parties were filing suits against each other in court, the trial judge rendered a
“Judgment by Default” dated 26 November 1980 ordering the renewal of the lease contract for a
term of 5 years counted from the expiration date of the original lease contract, and fixing
monthly rentals thereunder at P700.00 a month, payable in arrears.

Issue:

Whether or not the court may order the renewal of the contract of lease for another five-
year term at P700 a month.

Held:

No, it cannot order the renewal of the Contract of Lease.

The respondent judge cited Articles 1197 and 1670 of the Civil Code to sustain the
“Judgment by Default” by which he ordered the renewal of the lease for another term of five
years and fixed monthly rentals thereunder at P700.00 a month. Article 1197 of the Civil Code
provides as follows:

“If the obligation does not fix a period, but from its nature and the circumstances it can be
inferred that a period was intended, the courts may fix the duration thereof.

The courts shall also fix the duration of the period when it depends upon the will of the debtor.

In every case, the courts shall determine such period as may, under the circumstances, have been
probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by
them.” (Italics supplied.)

The first paragraph of Article 1197 is clearly inapplicable, since the Contract of Lease did
in fact fix an original period of five years, which had expired. It is also clear from paragraph 13
of the Contract of Lease that the parties reserved to themselves the faculty of agreeing upon the
period of the renewal contract. The second paragraph of Article 1197 is equally clearly
inapplicable since the duration of the renewal period was not left to the will of the lessee alone,
but rather to the will of both the lessor and the lessee. Most importantly, Article 1197 applies
only where a contract of lease clearly exists. Here, the contract was not renewed at all, there was
in fact no contract at all the period of which could have been fixed.
Jereos vs. Court of Appeals

G.R. No. 48747, September 30, 1982

Facts:

Private respondent, Padorla, is the holder of a certificate of Public Convenience for the
operation of a jeepney line in Iloilo City. On 1971, one of his jeepneys driven by Jaravilla, hit
Judge Rodriguez and his wife resulting to the death of Judge Rodriguez and causing injuries to
the wife. Jaravilla was convicted of the crime of Homicide and Physical injuries through
Reckless Imprudence and sentenced accordingly. Soledad, the wife, and her children filed with
the CFI of Iloilo an action for damages against Jaravilla (driver), Padorla (holder) and Jereos, the
actual owner of the jeepney. Jereos denied ownership of the jeepney and claimed that the
plaintiffs have no cause of action against him. Padorla also claimed that he was only the
franchise owner and has nothing to do with the actual control, operation and supervision of the
jeepney which is under Jereos’ control.

The CFI rendered judgment ordering Jaravilla and Padorla to pay jointly and severally to
the plaintiffs. Both appealed to the CA contending that Jereos should also be jointly and
severally liable with the damages incurred by them. The CA held that Jereos should be jointly
and severally liable for the damages. Jereos appealed from the decision.

Issue:

Whether or not Jereos is solidarily liable with Javarilla and Padorla

Held:

Yes. In a civil action due to a quasi-delict (culpa aquiliana), the registered owner, the
actual owner, and the driver of the jeep involved are solidarily liable. The registered owner or the
operator has the right to be indemnified by the real or actual owner of the amount that he may be
required to pay as damage for the injury caused.
Republic Planters Bank vs Court of Appeals

G.R. No. 93073, December 27, 1992

Facts:

Defendants Shozo Yamaguchi and Fermin Canlas were President/ Chief Operating
Officer and Treasurer, respectively, of Worldwide Garment Manufacturing, Inc. By virtue of a
board resolution, the defendants were authorized to apply for credit facilities with the petitioner
Republic Planters Bank in the forms of export advances and letters of credit/ trust receipts
accommodations.

Petitioner bank issued nine promissory notes, each of which were uniformly worded and
stated: “… I/we jointly and severally promise to pay to the order of the Republic Planters
Bank…” On the right bottom margin of the promissory notes appeared the signature of the
defendants above their printed names with the phrase “and (in) his personal capacity”
typewritten below.

Issue:

Whether or not defendant Fermin Canlas solidarily liable with Shozo Yamaguchi on each
of the nine promissory notes.

Held:

Yes, he is solidarily liable on each of the promissory notes bearing his signature for the
following reasons:

(a) Under the negotiable instruments law, persons who write their names on the face of
promissory notes are makers and are liable as such. By signing the notes, the maker promise to
pay to the order of the payee or any holder according to the tenor thereof.

(b) Where an instrument containing the words “I promise to pay” is signed by two or more
persons they are deemed to be jointly and severally liable thereon. An instrument which begins
with “I”, “We” or “Either of us” promise to pay, when signed by two or more persons, makes
them solidarily liable.

In the case at bar, the solidary liability of private respondent Fermin Canlas is made
clearer and certain, without reason for ambiguity, by the presence of the phrase “joint and
several” as describing the unconditional promise to pay to the order of Republic Planters Bank.
Purita Alipio vs. Court of Appeals

G.R. No. 134100, September 29, 2000

Facts:

The trial court ordered petitioner and Manuel spouses to pay private respondent the
unpaid balance of the agreed rent in the amount of P50,000 without specifying whether the
amount is to be paid by them jointly or solidarily.

Issue:

Whether or not the obligation to pay is jointly or solidarily

Held:

The obligation here is joint. Applying Art 1207 of the Civil Code, the obligation of
petitioner and the Manuel spouses is presumed to be only “joint”. If from the law or the nature or
the wording of the obligation the contrary does not appear, an obligation is presumed only to be
joint. The debt is divided into as many equal shares as there are debtors, each debt being
considered as distinct from one another.

Art. 1207. Reads as follows:

The concurrence of two or more creditors or of two or more debtors in one and the same
obligation does not imply that each one of the former has a right to demand, or that each one of
the latter is bound to render, entire compliance with the prestation. There is a solidary liability
only when the obligation expressly so states, or when the law or the nature of the obligation
requires solidarity.
Constante Amor De Castro vs. Court of Appeals

G.R. No. 115838, July 18, 2002

Facts:

Private respondent Artigo sued petitioners Constante and Amor De Castro to collect the
unpaid balance of his broker’s commission from the De Castros. The appellants, De Castros,
were co-owners of 4 lots in Cubao, Quezon City. The appellee, Artigo, was authorized by
appellants to act as real estate broker in the sale of these properties for the amount of
P23,000,000.00, 5% of which will be given to the agent as commission. Appellee first found the
Times Transit Corporation and 2 lots were sold. In return, he received P48,893.76 as
commission.

Appellee apparently felt short changed because according to him, his total commission
should be P352,500.00 which is 5% of the agreed price of P7,050,000.00 paid by Times Transit
Corporation toappellants for the 2 lots and that it was he who introduced the buyer to appellants
and unceasingly facilitated the negotiation which ultimately led to the consummation of the sale.
Hence, he sued to collect the balance of P303,606.24 after having received P48,893.76 in
advance.

Appellants argued that appellee is selfishly asking for more than what he truly deserved
as commission to the prejudice of other agents who were more instrumental to the consummation
of the sale and that there were more or less 18 others who took active efforts. The De Castros
argued that Artigo’s complaint should have been dismissed for failure to implead all the co-
owners of the 2 lots. . The De Castros contend that failure to implead such indispensable parties
is fatal to the complaint since Artigo, as agent of all the four co-owners, would be paid with
funds co-owned by the four co-owners. It was shown also that Constante Amor De Castro signed
the authorization of Artigo as owner and representative of the co-owners.

Issue:

Whether or not Constante and Amor De Castro is solidarily liable to Artigo.

Held:

Yes. When the law expressly provides for solidarity of the obligation, as in the liability of
co-principals in a contract of agency, each obligor may be compelled to pay the entire obligation.
The agent may recover the whole compensation from any one of the co-principals in a contract
of agency; each obligor may be compelled to pay the entire obligation. The agent may recover
the whole compensation from any one of the co-principals, as in this case.

Indeed Art. 1216 of the Civil Code provides that a creditor may sue any of the solidary
debtors. Solidarity does not make a solidary obligor an indispensable party in a suit filed by the
creditor. Art. 1216 says that the creditor may proceed against anyone of the solidary debtors or
some or all of them simultaneously.
Operators Inc. vs. American Biscuit Corp. Inc.

G.R. No. 34767, October 23, 1987

Facts:

Plaintiff American Biscuit Company (ABC), a manufacturer of biscuit, candy and bubble
gum products in financial distress, entered into an agreement with defendant Operators Inc.
where it ceded the entire, total and complete present operation of its business in consideration for
which Operators Inc. undertook to answer for existing obligations of the plaintiff to its several
creditors and to compensate plaintiff with a percentage of the gross profits realized in the course
of the operations.

Barely 10 months thereafter, ABC and Operators Inc, entered into another agreement
with defendant Associated Biscuit Operators Associated. The said Association agreed to engage
in the manufacture and marketing of the biscuit products of ABC under the terms and conditions
of the Operating Contract of September 26, 1953.

Operators an Associated had both undertaken to pay ABC’s obligation owing to its
various creditors. Defendants would share 50-50 in the monthly installments of the P110,000.00
unpaid balance of the loan (China Banking Corporation). This arrangement was religiously
complied with by the Operators Inc. which paid P1500.00 monthly, making a total payment of
more than P100,000.00 including interest. Defendant Associated in turn, failed to make good its
commitments to pay its share of P55,000.00.

America Biscuit filed a complaint against Operators Incorporated and Associated Biscuit
for the cancellation of the Operating Contract and the Tripartite Agreement, with prayers to put
Associated Biscuit under receivership and for damages. American Biscuit maintained that the
payment of its indebtedness and of its overhead expenses was a joint and solidary obligation of
Operators and Associated Biscuit.

Issue:

Whether or not the payment of indebtedness to ABC’s creditors by Operators and

Associated Biscuit was a solidary obligation.

Held:

Yes. The position of Operators that under the Operating Contract and the Tripartite
Agreement it is not answerable for the misfeasance of Associated is belied by the very provisions
of the Tripartite Agreement.There is thus no mistaking the fact that Operators and Associated
had assumed, per their agreements, American’s liabilities to its creditors in solidum.

Article 1207 of the new Civil Code states that: "there is a solidary liability when the
obligation expressly so states . . ."

What may have led Operators in denying the solidary character of its obligations was the
fact that it was engaged in the manufacture of candy whereas Associated Biscuit was supposed to
manufacture biscuits, and the fact that the two operators were required to invest different
minimum amounts in the venture. But these conditions do not alter the solidary nature of their
obligations as expressly provided. According to Article 1211 of the Civil Code, "solidarity may
exist although the debtors may not be bound in the same manner and by the same periods and
conditions." Accordingly, the disparity in their functions under the contracts does not vary the
fact that they were bound, in connection with American’s liabilities, jointly and severally.

Even if the solidary nature of the debtor’s liability is self-evident, the creditor cannot
disregard an arbitration clause stipulated in the contracts. Solidarity does not make a solidary
obligor an indispensable party in a suit fi led by the creditor.