26

Alberto v Alberto

G.R. No. 13791

Defendant entered a lease contract with the plaintiff for the Lux Theater. Plaintiff
filed an action for unlawful detainer against defendant. The defendant relies on
provision of the leasehold contract that it is extendible for six more years and that he
had made useful improvements on the property. But the plaintiff was unwilling to agree
to such even with prior notice by the defendant that he wants to extend the term.

ISSUE:

Whether the term of the lease contract can be extended

HELD:

As a general rule, In a contract of lease declares that it is extendible for six years
"agreed upon by both parties," the lessee has the right to take for the additional period
or to quit upon the expiration of the first term. In construing provisions of this character
the tenant is favored, in case of uncertainty in the terms of the lease, and not the
landlord. The word "extendible", standing without qualification in a contract of lease,
means that the term of the lease may be extended and is equivalent to a promise to
extend, made by the lessor to the lessee, and, as unilateral stipulation, obliges the
promisor to fulfill his promise. (Legarda Koh v. Ongsiako, 36 Phil. Rep., 185)

33

Irao v By the Bay, Inc.

558 SCRA 315 G.R. No. 177120

Ruby the representative of the Estate of Doña Trinidad de Leon Roxas and
Ronald Magbitang representative of By the Bay, Inc. forged a contract of lease of a 3-
storey building located in Pasay City for 5 years.

By the Bay‘s restaurant was closed by the City Government and they started
defaulting in the payment of the rent. Ruby executed another contract of lease in favor
of Irao (Paul), herein petitioner. Paul, together with the Barangay Kagawad and Security
Guards, entered and took possession of the leased premises.

By the Bay, Inc. filed a case of Forcible Entry to the MeTC of Pasay City with
Prayer for Preliminary Injunction and Damages. The MeTC dismissed the complaint of
By the Bay Inc. holding that the failure of By the Bay Inc. to pay monthly rentals renders
them with unclean hands. By the Bay Inc. contends that the letter sent to them by Ruby
Roxas was the demand to pay the rental arrears and not a notice to terminate the
contract of lease.

The Regional Trial Court affirmed the decision of the MeTC. It was reversed by
the Court of Appealsholding that Paul Irao should turn over the possession to By the
Bay, Inc.

ISSUE:

Whether the lessor‘s demand letter to respondent sufficiently contained a notice of

termination of the lease contract and a demand to vacate the leased premises to justify
the taking over the possession

HELD:

The appellate court‘s ruling that the lessor‘s letter did not demand respondent to
vacate is flawed. A notice or demand to vacate does not have to expressly use the word
vacate, as it suffices that the demand letter puts the lessee or occupant on notice that if
he does not pay the rentals demanded or comply with the terms of the lease contract, it
should move out of the leased premises.

Contractual stipulations empowering the lessor and/or his representative to

repossess the leased property extrajudicially from a deforciant lessee, as in the present
case, have been held to be valid. Being the law between the parties, they must be
respected. By the Bay, Inc. cannot feign ignorance that the repossession of the leased
property by the lessor and/or its representative-herein Paul was the appropriate legal
measure it authorized under their contract.