Bercero vs.

Capitol Development Corporation

G.R. No. 154765. March 29, 2007.
AUSTRIA-MARTINEZ, J.:
Facts:
Respondent Capitol Development Corporation leased its commercial building to R.C
Nicolas Merchandising, Inc., for a 10-year period with the option for the latter to make additional
improvements in the property to suit its business and sublease to third parties. R.C Nicolas
converted the space and subleased separate portions to, among others, petitioner Pedro Barcera
for 3 years. R.C Nicolas’ failure to pay rent prompted respondent to file for an ejectment case
and impleaded its sub-lessees. Sub-leasess, including petitioner, entered into a compromise
agreement with respondent recognizing the latter as the lawful and absolute owner of the
property. Petitioner, then, entered into a lease contract with respondent for 3 years. Parties
entered into a compromise agreement and moved that the names of sub-leasess as parties-
defendants be dropped and excluded. Later, R.C Nicolas filed a complaint for ejectment and
collection of unpaid rentals against petitioner which the MeTC ruled in its favor and ordered the
eviction of petitioner. Upon appeal, RTC issued a writ of execution and petitioner was then
evicted. The CA dismissed the appeal by petitioner. Respondent, then, filed a Manifestation
urging MeTC to order R.C Nicolas to desist from harassing petitioner and respondent.
Thereafter, petitioner made repeated demands on respondent for restoration of his possession of
the commercial space but to no avail, he filed a complaint for sum of money which the trial court
ruled in his favor. Upon appeal, CA reversed the decision applying the equitable principle of
estoppel and denied the motion for reconsideration. Thus, this petition.
Issue:
Whether the CA clearly committed grave error and abuse of discretion in applying the
principle of estoppel to petitioner?
Rule of law:
Article 1654 (3) of the New Civil Code
Application:
The obligation of the lessor arises only when acts, termed as legal trespass (perturbacion
de derecho), disturb, dispute, object to, or place difficulties in the way of the lessee’s peaceful
enjoyment of the premises that in some manner or other cast doubt upon the right of the lessor by
virtue of which the lessor himself executed the lease, in which case the lessor is obligated to
answer for said act of trespass. The lessee has the right to be respected in his possession and
should he be disturbed therein, he shall be restored to said possession by the means established
by the law or by the Rules of Court. Possession is not protection against a right but against the
exercise of a right by one’s own authority. Respondent’s unilateral rescission of its lease contract
with R.C. Nicolas, without waiting for the final outcome of the ejectment case it filed against the
latter, is unlawful. A lease is a reciprocal contract and its continuance, effectivity or fulfillment
cannot be made to depend exclusively upon the free and uncontrolled choice of just one party to
a lease contract. Thus, the lease contract entered into between petitioner and respondent, during
the pendency of the lease contract with R.C. Nicolas, is void.
Conclusion:
WHEREFORE, the present petition is DENIED.