Analita Inocencio v.

Hospicio de San Jose

Facts:
-

Hospicio de San Jose (HDSJ) leased a parcel of land to German Inocencio (German). German
then constructed two buildings over the land which he subleased. Ramon, his son, was designated
to administer the properties)
German died but Ramon did not inform HDSJ. Nonetheless, Ramon collected rentals from the
sublessees and paid rent to HDSJ.
HDSJ acknowledged the existence of an implied lease between Ramon and HDSJ, as the latter
has been receiving rental payments from the former. HDSJ informed Ramon that the contract shall
expire on 31 March 2001 and it has no intention of renewing the same since Ramon did not inform
HDSJ of the sublease
HDSJ then demanded Ramon to vacate the property within 30 days. HDSJ also entered into lease
agreements with other parties.
HDSJ now filed a complaint for unlawful detainer. While pending, Ramon passed away and
substituted now by Analita Inocencio, his wife.
MTC
o Ordered defendants to pay
RTC
o Ramon had no right to sublease the property
CA
o Affirmed RTC. Merely modified the award for damages
Hence, this Petition.

Issues:
-

Whether the sublease is valid

Ruling:
-

Despite the non-transferability of the contract without the consent of the lessor, HDSJ nonetheless
acknowledged that Ramon is its month-to-month lessee. Thus, Germans death did not terminate
the lease. (Validity of the lease to Ramon)
Ramon likewise had the right to sublease the property since the lease contract did not
contain any prohibitions on sublease, pursuant to Article 1650. Thus, the sublease contracts
entered into by Ramon were valid. (Validity of sublease)
Inocencios claim ownership over the property since they claim that these are separate and distinct
from the land on which they were built. Thus, they argue that they have a right to lease the
buildings to 3rd-parties, even after the termination of the lease. Further, the Inocencios argue that
when they entered into lease contracts with tenants for the lease of portions of the said buildings,
these contracts were independent contracts of lease over their own building and not sub-leases of
the parcel of land which they leased from Respondent
The Court DISAGREES with the Inocencios by stating the ruling in the case of Duellome v. Gotico:

o The lease of a building includes the lease of the lot and consequently, the rentals of
the building include the rentals of the lot.
o Accordingly, they pointed out that the ARGUMENT of HDSJ is CORRECT when they
stated the following:
When the Inocencios leased the buildings to third parties, they also "leased"
to the third parties the plot of land on which the buildings stood either by
implied transfer of the lease covering the plot of the land, or by sublease. Either
way, x x x the Inocencios themselves must have a valid lease contract with [HDSJ]
over the land. However, when the lease contract x x x with HDSJ ended on
31March 2001, Ramon lost his status as lessee of the land, and therefore, had no
authority to transfer the lease or sublease the land.