Inocencio Digest

FACTS
The respondent Hospicio de San Jose (HDSJ) leased a parcel of land located in Pasay
City to German Inocencio petitioner AKA German. The lease contract was effective for a period
of one year, and was renewed for one-year periods several times. The last written contract was
executed on 31 May 1951. Section 6 of the lease contract provides: This contract is
nontransferable unless prior consent of the lessor is obtained in writing.
German constructed 2 Buildings and subleased the premises without the consent of the Lessor
and Ramon (his son) was designated to administer the property. The actions made by the
respondent was only to increase the rentals of the petitioner. When German died, Ramon did
not the respondents and continue to collect from the sub lessee and paid of the tax and rentals of
the property.
In 2001 March, the respondent notified Ramon that HDSJ’s property administrator, Five Star
Multi-Services, Inc., is terminating the lease contract effective 31 March 2001 should expire.
Ramon sent a letter to renegotiate the contract because of the sublease but the respondent
refused on the ground that the petitioner sublease the same without their knowledge and
consent.
On June 2005 , respondent filed a complaint with the (MeTC-Pasay) for unlawful detainer
against Ramon and his sublessees. The complaint alleged that Ramon and his sublessees have
been illegally occupying the leased premises since 31 March 2001. HDSJ sought the following
damages: Actual damages, in the amount of Php552,195.36 ,17.2 Attorney’s fees in the amount
of Php50,000.00.
Ramon passed away and was substituted by his wife Analita.
The MeTC ruled that that the lease contract could not be transmitted to Ramon as German’s
heir in view of the express stipulation found therein. Since there was "no lease contract between
[HDSJ] and Ramon x x x the latter cannot sublease the property.
Upon appeal to RTC Pasay it dismissed the complaint and held that "even before the
termination of the contract, [Ramon] had no right to sublease the said property due to the
intransferability clause in the contract.
And on Petition for review to CA , it likewise affirmed in Toto the decision of the RTC with
modification to award of amount of damages.
ISSUE
(1)Whether or not there was no tortious interference on the part of HDSJ?
(2)whether or not the sublease contract was valid?

HELD: (1)NO.
Article1314 of the Civil Code states:
Art. 1314. Any third person who induces another to violate his contract shall be liable for
damages to the other contracting party.
Tortious interference has the following elements:
(1) existence of a valid contract;
(2) knowledge on the part of the third person of the existence of the contract; and
(3) interference of the third person without legal justification or excuse
In So Ping Bun v. Court of Appeals,42 we held that there was no tortious interference if the
intrusion was impelled by purely economic motives.
In this case the evidence shows that HDSJ entered into agreements with Ramon’s former
sublessees for purely economic reasons (payment of rentals). HDSJ had a right to collect the
rentals from the sublessees upon termination of the lease contract. It does not appear that HDSJ
was motivated by spite or ill will towards the Inocencios.
HELD: (2) YES.
The general rule, therefore, is that heirs are bound by contracts entered into by their
predecessors-in-interest except when the rights and obligations arising therefrom are not
transmissible by
(1) their nature, (2) stipulation or (3) provision of law.
In the subject Contract of Lease, not only were there no stipulations prohibiting any
transmission of rights, but its very terms and conditions explicitly provided for the transmission
of the rights of the lessor and of the lessee to their respective heirs and successors. The contract
is the law between the parties. The death of a party does not excuse nonperformance of a
contract, which involves a property right, and the rights and obligations thereunder pass to the
successors or representatives of the deceased. Similarly, nonperformance is not excused by the
death of the party when the other party has a property interest in the subject matter of the
contract.
Ramon had a right to sublease the premises since the lease contract did not contain any
stipulation forbidding subleasing. Article 1650 of the Civil Code states:
Art. 1650. 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.
Therefore, we hold that the sublease contracts executed by Ramon were valid.
WHEREFORE, the petition is PARTLY GRANTED. The Decision dated 12 January 2012 of the
Court of Appeals in CA-G.R. SP No. 117009 is AFFIRMED with modification. The case is hereby
REMANDED to the Metropolitan Trial Court of Pasay, Branch 48, for determination of the value
or the improvements to be paid to the lnocencios, if Hospicio de San Jose desires to keep the
improvements. Otherwise, the Inocencios shall be allowed to demolish the buildings at their
expense.

Inocencio Digest

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FACTS

Ramon passed away and was substituted by his wife Analita.

(1)Whether or not there was no tortious interference on the part of HDSJ?

(2)whether or not the sublease contract was valid?

Article1314 of the Civil Code states:

Tortious interference has the following elements:

(1) existence of a valid contract;

(3) interference of the third person without legal justification or excuse

HELD: (2) YES.

(1) their nature, (2) stipulation or (3) provision of law.

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