When a person holds on to a property after the expiration of the lease, he may be held liable to pay for compensation during the period of his unlawful holding. This is the ruling of the court in this case.
The case here involved a big fishpond with several co-owners, among whom were Minda, Franco, Simeon, Conchita and Sixto. The administratrix of the fishpond is Minda. As administratrix, she leased the fishpond to one of the co-owners, Simeon, for a period of five years from July 1, 1979 to June 30, 1984 at P118,000 per annum rental. Simeon in turn sub-leased the fishpond to Antonio who hired Armando as the caretaker thereof.
When the lease was nearing its termination date, Simeon pleaded for and was granted a one year extension of the lease up to June 30, 1985.
Prior to the expiration of the one year extension, Minda the administratrix, bidded out the lease of the fishpond to all the co-owners starting July 1, 1985. Franco thru his son Martin won the bidding with a bid price of P250,000. Simeon's bid was only P151,000. Having lost the bidding Simeon informed Antonio and his caretaker Armando of such fact by phone and by registered mail.
On July 1, 1985, when Martin proceeded to the fishpond accompanied by some police to take possession of the property the caretaker Armando refused to leave the premises on the pretext that he received no orders from Antonio to do so.
Demands were then made by Martin upon both Simeon and his sub-lessee Antonio to surrender possession of the premises, but these were ignored.
So, Minda the administratrix, Simeon and the other co-owners brought a complaint for unlawful detainer against Simeon and Antonio before the Municipal Trial Court (MTC).
For his answer, Antonio averred that Simeon renewed his sublease with the conformity of the co-owners for another five years with an escalation clause. He claimed that Simeon had already received advanced rentals for the sub-lease so he filed a cross-claim against Simeon. Simeon for his part alleged that after he lost the bidding he notified Antonio.
Two years later, while the case in the Municipal Trial Court was still pending, Antonio and his caretaker already surrendered possession of the premises to Franco and his son Martin rendering moot and academic the issue of possession before the MTC. But the MTC still proceeded with the case and rendered judgment against Simeon and Antonio ordering them jointly and severally to pay Franco P250,000 a year as reasonable compensation of the fishpond from July 1, 1985 up to March 1988 when they vacated the fishpond. Was the MTC correct?
Yes. Simeon as lessee and Antonio as sub-lessee of Simeon were obliged to surrender the leased premises to the fishpond co-owners upon the expiration of the lease. The lease contract of Simeon expired on June 30, 1985 after the expiration of the one year extension had expired. Upon such expiration it became incumbent upon Simeon to return the leased premises to the co-owners. The same goes with Antonio. The necessity of vacating the premises and surrendering the same to the co-owners, particularly Franco who won the bidding, became more urgent for Antonio after he was informed by Simeon that the latter lost in the bidding for the lease of the fishpond and after he was requested to vacate the same by oral and written demands.
Simeon had the obligation to surrender possession of the fishpond to its owners upon the expiration of the extension of the lease. While Antonio on the other hand should have vacated and surrendered the premises to Franco and his son upon the expiration of the lease and having been informed that he no longer had any right over the fishpond. For failing to do so, both of them are liable for the payment of the yearly rental of P250,000 beginning July 1, 1985 and ending March 1988 (Abalos and Arellano vs. Court of Appeals et. al. G.R. No. 106029 Oct. 19, 1999).
Atty. Sison's e-mail address is: sison@ipaglabanmo.org