‘Un-tenantable’

It is the obligation of the lessor to maintain the leased premises in tenantable condition. This case illustrates the meaning of "tenantable condition".

This case involved a steel company manufacturing office equipment and fixtures (RISC) which rented units 964 and 966 on the ground floor and 963 on the second floor of the building owned by Manila Downtown Christian Association (MDY). RISC utilized the ground floor units as the combined areas for its office, hardware store and display shop for steel products by knocking down the wall separating them. The combined units also served as passageway to the second floor unit 963 utilized as staff room by RISC.

Due to disagreement on the period of lease for the second floor unit, RISC sued MDY for the fixing of the period of lease. MDY on the other hand sued RISC to evict the latter from said unit. The cases were consolidated before the Manila MeTC Branch 26.

Meanwhile, RISC also filed a Petition for Consignation of Rentals for the ground floor units at another MeTC branch (24) because MDY allegedly refused to receive its payment without just cause. However during its hearing, RISC filed a formal surrender of the two ground floor units effective July 1, 1998 to which MDY manifested its "No Objection to the Turn Over or Surrender of the Leased Premises". Thereafter, on July 9, 1998, the MeTC issued an order declaring the consignation case closed after RISC delivered two checks covering the rents due on the ground floor units.

On August 11, 1998, the other MeTC branch 26 that heard the consolidated cases for the fixing of the lease period on Unit 963 filed by RISC and the ejectment filed by MDY also rendered its decision dismissing the ejectment suit and granting RISC an extension of three years for the lease of Unit 963. Immediately thereafter, RISC filed a Motion to constitute a passageway to unit 963 alleging that it does not have direct access to the road except by passing through the vacated ground floor units. On the other hand, MDY appealed this decision of MeTC to the Regional Trial Court (RTC). Thus, the MeTC forwarded the consolidated cases to the RTC without resolving RISC motion to constitute a passageway even after its appointed commissioner confirmed the need of said passageway.

The RTC, on appeal, also decided in favor of RISC even granting a longer extension of 5 years and ordering MDY to provide a two-meter passageway between units 964 and 966 for unit 963. On further appeal to the Court of Appeals (CA), the latter also upheld the RTC and ruled that RISC was entitled to the judicial lengthening of the lease period. Nonetheless, the CA ordered RISC to vacate unit 963 since 6 years had already lapse from the expiration of the formal contract. Besides the CA said the RISC had already transferred to its own building.

However, the dispute continued when MDY filed two ejectment suits in MeTC branches 20 and 17 against RISC to vacate the ground floor units 964 and 966. MDY alleged that RISC did not actually surrender said units; instead, it padlocked the doors thereto, refused to surrender the keys and failed to pay the rent despite demands. While the MeTC ruled in favor of MDY, the RTC reversed said decision on appeal. The RTC said that RISC’s act of padlocking the units is an act of self-preservation to provide it with a passageway to and from the second floor unit 963 which it continued to lease. Was the RTC correct?

Yes. The "Formal Surrender of Leased Premises" filed by RISC on July 1, 1998 showed its intention to relinquish in favor of MDY its possession over the ground floor units 964 and 966. The filing of this "Formal Surrender" with MeTC Branch 24 in the consignation case without objection on the part of MDY constitutes constructive delivery of said premises. Thereafter, RISC actually emptied and vacated the premises. Therefore, from July 1, 1998, MDY could have taken legal and actual possession of said units. It could have easily removed the padlock and occupied the premises in view of RISC unconditional surrender.

Furthermore, MeTC branch 24 had in fact put an end to the issue of possession of said units by considering the petition for consignation closed. Since none of the parties questioned said order, it has become final. Consequently, these ejectment cases involving said units constitute a re-adjudication of similar issues that have been decided with finality.

On the other hand, RISC’s request for a passageway was necessary to its adequate use of unit 963, considering that it has no direct access to the road except through the ground floor units. As the lessor it is the obligation of MDY to make unit 963 tenantable by providing a passageway to RISC. However, MDY did not immediately start the construction of a passageway. It was therefore understandable that RISC kept the key to the door of the ground floor units because it was the only means of access to the road and to its rented unit 963 at the second floor. It had no choice but to keep said keys. It is the only access to its leased unit on the second floor (Remington Industrial Sales Corporation vs. Manila Downtown YMCA G.R. 171858, January 22, 2007).

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