Download - Lease of Things

7/27/2019 Lease of Things

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LEASE OF THINGSCONSENSUAL

PRINCIPALNOMINATE

ONEROUS

TEMPORARY


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Consumable things cannot be subject

matter of lease except: (1645)

Consumable only for display or advertising

(lease ad pompam et ostentationem)

Goods are accessory to an industrial

establishment, e.g. coal in a factory


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Lease Sales

1. only use or enjoymentis

transferred

1. ownership is transferred

2. transfer is temporary 2. transfer is permanent

3. lessor need not be theowner

3. seller must be the ownerat the time the property is

supposed to be delivered

4. the price of the object,

distinguished

from the rent, is usually

not mentioned.

4. usually, the selling price

is mentioned.


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Lease Simple Loan

1. lessor does notlose ownership

and lessee

1. lender loses ownership

2. relationship is one of lessor 2. relationship is one of obligor and

obligee

3. not governed by the Usury Law 3. governed by the Usury

Law

4. if what is leased is real property for

more than one year, the statute of

frauds must be complied with

4. notgoverned by the Statute

of Frauds

5. refers to real and personal property 5. refers only to personal

property


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Lease Commodatum

1. onerous contract (although

the rent may later

on be remitted)

(NOTE: The lease,

however, in favor of theU.S. Mil. Bases is gratis.)

1. this is essentially gratuitous;

if there is a price or

rent, the contract ceases to

be a commodatum

2. not essentially personal

in character, hence right

may be transmitted to

heirs

2. personal in character, thus

death of either bailor or

bailee ends the commodatum

3. consensual contract 3. real contract requires

delivery for perfection

(NOTE: A contract,

however, to enter into a

commodatum is a consensual,

not a real contract.)


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BASIS USURFRUCT LEASE

4. as to

ORIGIN

4. may be created by law,

contract, last will, orprescription

(Art. 563)

4. may be created as a rule only

by contract; and by way of

exception by law (as in the case

of an impliednew lease, or when

a builder has built in good faith a

building on the land of another,

when the land is considerably

worth more in value than the

building, etc.) (See Art. 448)

5. as toCAUSE

5. The owner is more or lessPASSIVE and he ALLOWS the

usufructuary to enjoy the thing

given in usufructdejagozar

5. The owner or lessor is more orless ACTIVE, and he MAKES the

lessee enjoy hace gozar

5. The owner or lessor

is more or less

ACTIVE, and heMAKES the lessee

enjoy hace

gozar


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6. as to

REPAIRS

6. The usufructuary has the duty

to make the ordinary repairs

6. The lessee generallyhas no

duty to pay for repairs

7. as to TAXES 7. The usufructuary pays for the

annual charges and taxes on the

fruits

7. The lessee generally pays no

taxes

8. as to other

things

8. A usufructuary may lease the

property itself to another. (SeeArt. 572)

8. The lessee cannot constitute a

usufruct on the property leased


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6. as to

REPAIRS

6. The usufructuary has the duty

to make the ordinary repairs

6. The lessee generallyhas no

duty to pay for repairs

7. as to TAXES 7. The usufructuary pays for the

annual charges and taxes on the

fruits

7. The lessee generally pays no

taxes

8. as to other

things

8. A usufructuary may lease the

property itself to another. (SeeArt. 572)

8. The lessee cannot constitute a

usufruct on the property leased


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Lease period

Definite not more than 99 years (Art 1643)

Indefinite not fixed

Rural lands (1682) - one year minimum, two or

more years, depending on how long to plant andharvest crops / fruits

Urban lands (1687) depends when rent paid

Daily lease is day to day

Weekly lease is week to week

Monthly lease is month to month

Yearly lease is year to year


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Lease period

Extra rule urban lands (1687)

If daily rent, may fix a longer period if the lessee

has stayed for over one month.

Ifweeklyrent, court may fix a longer period if the

lessee has stayed for over six months.

Ifmonthlyrent, court may fix a longer period if the

lessee has stayed for over one year.


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Assignment of lease

General rule lessee cannot (1649)

Without consent of lessor

Or stipulation to the contrary

WHY? Constitutes a NOVATION by substitution of

the debtor. Assignment is an absolute transfer of a

lessees interest, thus creditor/lessor must consent.


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Sublease

Unlike in assignment, lessee may generally

sublease in absence of express prohibition

(1650)

WHY? Lessee remains party to lease even if he

creates a sublease. He must still pay rents to the

lessor, for example.


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Sublease distinguished from

assignment

SUBLEASE ASSIGNMENT

a) the lessee retains an interest in the

lease; he remains a party to thecontract

a) the lessee makes an absolute transfer

of his interest as lessee; thus, hedissociates himself from the original

contract of lease

b) the sublessee does nothave any

direct action against the lessor

b) the assignee has a direct action against

the lessor

c) can be done even without thepermission of the lessor (unless there be

an express prohibition)

c) cannot be done unless the lessorconsents


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Liability of sublessor

Even if sublessee is not party to lease, he is

still DIRECTLY liable to lessor for USE and

PRESERVATION of the property. (1651)

If sublessee misuses property, lessor may

bring an action against him directly (ACCION

DIRECTA)


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Liability of sublessor - rent

Sublesee is only SUBSIDIARILY liable to lessor for

rent owed by lessee. This liability is LIMITED to

rent owed at the time of the EXTRA-JUIDICIAL

demand by lessor. (1652) Payment in advance is disregarded insofar as

lessor is concerned, except if justified by custom

of place (1652) WHY? To prevent collusion between sublessor

and sublessee (sublessor may claim insolvency)


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Obligations of LESSOR

Three important duties (1654)

(a) Delivery of the object

(b) Making of necessary repairs

(c) Maintenance in peaceful and adequate

possession


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When place is dangerous to Life or

Health

Lesee may terminate (1661)

Applies only to dwelling place or other building

intended for human habitation

even if at the time contract was perfected, lessee

KNEW of dangerous condition or WAIVED right to

rescind on account of condition

WHY? Public safety cannot be stipulated against


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Obligations of LESSEE

Three important duties (1657)

(a) Pay the lease price (RENT)

(b) Use properly thing leased

(c) Pay expenses deed of lease


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RENT

Who fixes the rent?

LESSOR, not court. If LESSEE does not agree, no

lease. EXCEPT lease under Art. 448 (builder in

good faith)

Not fixed in consignation case (Lim Si v. LimL-8496

Apr 25, 1956), disagreement to be decided not in

action for consignation but in unlawful detainer

case lessor institutes when lessee refuses to pay

rents.


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RENT

What can the court do?

Fix the time rent can be effective (Mayon Trading

Co. v. Co Bun Kim, L-11251, Jul 31, 1958)

Increase in rent

Lessor has right, but NOT ABSOLUTE. New rate

must be reasonable.

Rent presumed reasonable, burden of proof is onLESSEE.


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Duty of lessee concerning usurpation

and repairs

NOTIFY lessor ofusurpation or untoward acts (sothat lessor may bring proper ouster actions suchas forcible entry)

NOTFY lessor of need for REPAIRS (lessee mustnotify because he is in possession, lessor has noduty to make constant inspection)

If LESSEE fails to comply he would be

responsible for damages suffered by lessor whichcould have been avoided by lessees diligence(1663)


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Duty of lessee to return property

leased

Lessee must return at end of lease the

property in the SAME CONDITION. But he is

excused for what has been lost or impaired by:

lapse of time

ordinary wear and tear

inevitable cause (fortuitous event)

(1665)


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Deterioration caused by others

Lessee is liable for deterioration caused by

a) Himself

b) Members of his householdc) Guests and visitors

(1668)


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Deterioration

There is a presumption that lessee is responsible forDETERIORATION or LOSS. (1667) Presumption mustbe INVOKED, otherwise cannot be considered by

court.EXCEPTION:

In case of NATURAL CALAMITY, no presumption.

Ordinarily, FIRE is not a natural calamity. But if

tenant can prove that he had no fault in the caseof fire, and that it was impossible for him to stopits spread, he will not be liable.


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Lessees right to suspend rentals

Lesee may suspend payment of rent: (1658)

a) If the lessor fails to make the NECESSARY

REPAIRS

b) if lessor fails to maintain the lessee inpeaceful

and adequate enjoymentof the property leased.


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Remedies of aggrieved party

In case of non-fulfillment of duties, aggrieved

party can avail of: (1659)

a) Rescission and damages

b) Damages only (leaving contract in force)


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Mere act of trespass

Lessor not obliged to answer for mere act oftrespass, it is lessee with right of direct action(1664)

Two kinds of trespass

a) mere act of trespass (perturbacion de merehecho) 3rd person claims no right whatsoever

b) Trespass in law (perturbacion de derecho) 3rdperson claims legal right


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Mere act of trespass

Lessor not obliged to answer for mere act oftrespass, it is lessee with right of direct action(1664)

Two kinds of trespass

a) mere act of trespass (perturbacion de merehecho) 3rd person claims no right whatsoever

b) Trespass in law (perturbacion de derecho) 3rdperson claims legal right


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Grounds for judicial ejectment of

lessee (RA 9161)

(a) Assignment of lease or sub-leasing ofresidential units in whole or in part, includingacceptance of boarders or bedspacers, withoutwritten consent of owner/lessor.

(b) Arrears in payment of rent for a total of 3mos.

(c) Legitimate need of owner/lessor to repossess

his or her property for his or her own use of anyimmediate member of his or her family asresidential unit:


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lessee (RA 9161)

(d) Need of lessor to make necessary repairs

of leased premises which is subject of an

existing order of condemnation by

appropriate authorities concerned in order tomake said premises safe and habitable

(e) Expiration of period of lease contract


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Prohibition against ejectment (RA

9161)

No lessor or his successor-in-interest shall be

entitled to eject lessee upon the ground that

leased premises have been sold or mortgaged

by third person regardless of whether lease ormortgage is registered or not.


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lessee (RA 9161)

(1) When the period agreed upon, or that which isfixed for the duration of leases under Articles 1682 and1687, has expired; (SUSPENDED BY RA 9161)

(2) Lack of payment of the price stipulated;

(3) Violation of any of the conditions agreed upon inthe contract;

(4) When the lessee devotes the thing leased to anyuse or service not stipulated which causes thedeterioration thereof; or if he does not observe therequirement in No. 2 of Article 1657, as regards the usethereof.


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Right to ask for preliminary injunction

in unlawful detainer Art 1674. In ejectment cases where an appeal is taken, the

remedy granted in Article 639, second paragraph, shall alsoapply, if the higher court is satisfied that the lessees appealis frivolous or dilatory, or that the lessors appeal isprimafacie meritorious. The period of ten days referred to in said

article shall be counted from the time the appeal isperfected.

Art 539 par. 2. A possessor deprived of his possessionthrough forcible entry may within ten days from the filingof the complaint present a motion to secure from thecompetent court, in the action for forcible entry, a writ ofpreliminary mandatory injunction to restore him in hispossession.


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Implied new lease (tacita

reconduccion)

At end of contract, lessee should continue

enjoying the thing leased for 15 days with the

acquiescence of lessor, unless notice to contrary

given by EITHER PARTY. (1670)

HOW LONG? Not the time of original lease, but

applying either 1682 (rural) or 1687 (urban).


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Right of purchaser of lease land

Buyer a retro has same right, but must wait until

expiry of period of redemption(1677)


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Useful improvements in good faith

made by lessee

Useful improvements without altering propertyleased lessor shall pay value to lessee atlease termination

Should lessor refuse, lessee may removeimprovements, even if property is damaged (justnot more than necessary)

Ornamental expenses no reimbursement, butlessee entitled to remove if lessor does notchoose to retain (1678)


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Special provisions

Rural lands (1680-1685)

Urban lands (1687-1688)


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END

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