Inocencio v. Hospicio de San Jose

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Analita Inocencio, substituting for Ramon Inocencio (deceased) vs.

Hospicio De San
Jose, G.R. No. 201787, September 25, 2013, Per J. Carpio (Second Division)

FACTS: On March 1 1946, Hospicio de San Jose leased a parcel of land in Pasay City to
German Inocencio for 1 year renewed for several periods and the last contract executed was on
May 31, 1951. German constructed 2 buildings on the land which he subleased and assigned
his son Ramon Inocencio to administer the said property. Subsequently, On 1990, HDSJ
through a letter informed German of the increase in rentals that will be effective on November
1990. German passed away in 1997 and evidence shows that Ramon did not notify HDSJ of
German’s death. HDSJ acknowledge that there is an implied contract of lease between them
since HDSJ has been accepting payment of rentals since demise of German. However, there is
no stipulation as to the period of contract and Ramon is paying monthly rental so the period for
the lease is a month-to-month basis. Thus, Ramon was notified that contract will expire on
March 31, 2001 and that it has no intention to renew the contract since HDSJ did not inform
HDSJ of the sublease.

HDSJ also demanded Ramon to vacate the property within 30 days and HDSJ entered into
lease contracts with the sublessees. On June 28, 2005, HDSJ filed a complaint for unlawful
detainer against Ramon and his sublessees contending they have been ilegally occupying the
leased premises since March 31, 2001.

MeTC-Pasay ruled in favor of HDSJ and held that the lease contract could not be transmitted to
Ramon as German’s heir in view of thge exppress stipulation. It also contended that since there
was no lease contract between them, Ramon cannot sublease the property. RTC Pasay
affirmed that Ramon had no right to sublease the property due to the intransferability clause of
the contract. Upon appeal CA also affirmed the decision of RTC with modification on the award
damages.

ISSUE: Whether the sublease contracts were valid?

RULING: Yes.

The Court stated that the general rule provides that lease contracts survive the death of the
parties and continue to bind the heirs except if there is contrary stipulations. Under Article 1649,
the lessee cannot assign the lease without the consent of the lessor unless there is stipulation
to the contrary.

Here, HDSJ acknowledged that Ramon is its month-to-month lessee. The court added that the
death of German did not terminate the lease contract but was continued with Ramon as the
lessee. The Court also provided that Ramon had the right to sublease the premises since the
lease contract did not contain any stipulation forbidding subleasing pursuant to Article 1650 of
the Civili Code stating that when in the contract of lease of things there is no express
prohibition, the lessee may sublet the thing leased, in whole or in part, without prejudice to his
responsibility for the performance of the contract toward the lessor. Hence, the sublease
contracts entered by Ramon were valid.

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