CHUA vs. IAC

Vda.
De Chua vs IAC, 239 SCRA 99
FACTS:
In 1950, defendant Herminigilda Herrera executed a Contract of Lease in favor of Sy
Tian On whereby the former leased to the latter two lots located at Cebu City, for a term of
10 years, renewable for another 5 years. The contract of lease contains a stipulation giving
the lessee an option to buy the leased property and that the lessor guarantees to leave the
possession of said property to the lessee for a period of 10 years or as long as the lessee
faithfully fulfills the terms and conditions of their contrac. In accordance with the said
contract of lease, Tian On erected a residential house on the leased premises. Within 4 years
from the execution of the said contract of lease, Tian On, executed a Deed of Absolute Sale of
Building in favor of Chua Bok, the predecessor-in-interest of the plaintiffs herein, whereby
the former sold to the latter the residential house for and in consideration of the sum of
P8,000.00. In the Deed, Tian On assigned all his rights and privileges as a lessee to Chua Bok
who hereby accepts the said assignment and bind himself. Also stipulated that the sale was
made with the knowledge and express consent of the Herrera who is represented herein by
her attorney-in-fact, Vicenta R. de Reynes who also honors the annulment of the lease made
by Tian On.
After, Chua Bok and his family resided in the said residential building and they
faithfully and religiously paid the rentals thereof. When the Original Contract of Lease
expired in 1960, Chua Bok and Herrera, through her alleged attorney-in-fact executed
another Contract of Lease for a period of 5 years from August 1960 to August 1965.
Stipulating that Chua Bok is given an option to buy the leased premises if he is qualified and
when the Herrera decides to sell the same and giving Chua Bok the option to renew the
Contract of Lease upon terms and conditions agreed by both parties; and should the
property leased be sold by the Herrera to any other party, the terms and conditions of this
Contract shall be valid and will continue for the duration of this contract. The Third party
shall be expressed bound to respect the terms of this Contract of Lease”. After the expiration
of the contract of lease, the plaintiffs who are the successors-in-interest of Chua Bok (who
had died) continued possession of the premises up to April 1978, with adjusted rental rate.
TC: dismissed the plaintiffs' complaint, ordering plaintiffs to VACATE Lot No. 620 and Lot
No. 7549, ownership over by which defendants Vicente and Victoria Go being found valid
and legitimate, and to peacefully turn over the same to said spouses, and to REMOVE the
building thereon at plaintiffs' own expense. CA: affirmed the decision.
ISSUES:
1. WON the right of possession of petitioners of the leased premises was squarely put in
issue by defendants-spouse Go in their counterclaim
2. WON defendants was in bad faith in the purchase of the lots knowing that plaintiffs
had the option to buy said lots
RATIO:
1. Yes. The right of possession of petitioners of the leased premises was squarely put in
issue by defendants-spouse Go in their counterclaim to petitioner's complaint, where they
asked that ". . . the plaintiff should vacate their premises as soon as feasible or as the
Honorable Court may direct". The said counterclaim in effect was an accion publiciana for
the recovery of the possession of the leased premises. Clearly the Court of First Instance had
jurisdiction over actions, which involve the possession of real property or any interest
therein, except forcible entry, and detainer actions. A counterclaim is considered a
complaint, only this time, it is the original defendant who becomes the plaintiff stands on
the same footing and is to be tested by the same rules as if it were an independent action.
Hence, the same rules on jurisdiction in an independent action apply to a counterclaim.
2. No. The lease contract, petitioners’ cause of action, involves the lease of real property for
a period of more than one year. The contract was entered into by the agent of the lessor and
not the lessor herself. In such a case, the law requires that the agent be armed with a special
power of attorney to lease the premises. Article 1878 of the New Civil Code, in pertinent
part, provides: "Special Powers of Attorney are necessary in the following cases (8) To lease
any real property to another person for more than one year." It is true that respondent
Herrera allowed petitioners to occupy the leased premises after the expiration of the lease
contract and under Article 1670 of the Civil Code of the Philippines, a tacit renewal of the
lease is deemed to have taken place. However, a tacit renewal is limited only to the terms of
the contract which are germane to the lessee’s right of continued enjoyment of the property
and does not extend to alien matters, like the option to buy the leased premises.

CHUA vs. IAC

Uploaded by

Copyright:

Available Formats

CHUA vs. IAC

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

CHUA vs. IAC

Uploaded by

Copyright:

Available Formats

Vda.

De Chua vs IAC, 239 SCRA 99

You might also like