Lao Lim vs. CA

G.R. No. 87047, October 31, 1990

FACTS:

Private respondent entered into a contract of lease with petitioner for a period of three (3) years, that is, from 1976 to 1979. After the stipulated term expired, private respondent refused to vacate the premises, hence, petitioner filed an ejectment suit against the former in the City Court of Manila. The case was terminated by a judicially compromise agreement. On 1985 Dy, informed Lim of his intention to renew the lease up to 1988, Lim did not agree to the renewal. Another ejectment suit was filed by Lim against Dy due to the failure to vacate the premises. The RTC dismissed the case then later affirmed by the CA for the following reasons: (1) the stipulation in the compromise agreement which allows the lessee (Benito Dy) to stay on the premises as long as he needs it and can pay rents is valid, being a resolutory condition, and therefore beyond the ambit of art 1308 of the NCC; and (2) the compromise agreement has the effect of res judicata.

ISSUE:

Whether or not the stipulation in the compromise agreement which allows the lessee to stay on the premises as long as he needs it and can pay rents is valid?

RULING:

No, the stipulation in the compromise agreement is not valid. The statement “for as long as the defendant needed the premises and can meet and pay said increases” is a purely potestative condition because it leaves the effectivity and enjoyment of leasehold rights to the sole and exclusive will of the lessee.

 * Case digest by Daisy Mae Tambolero, LLB-1, Andres Bonifacio Law School, SY 2017-2018

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