G.R. No. 70909, 5 January 1994

FACTS:

In 1950, Hermenigilda Herrera entered into a contract of lease of a parcel of land with Tian On. The period is 10 years (until 1960), renewable for another 5. The contract also contains a stipulation for an option to buy.In accordance with the said contract of lease, the lessee Tian On, erected a residential house thereon.In 1954, Tian on sold the house and assigned all his rights under the lease to Chua Bok. The sale and assignment was acknowledged and respected by Herrera.When the original Contract of Lease expired in 1960, Chua Bok and defendant Herrera, through her alleged attorney-in-fact renewed the lease for a period of 5 years or until 1965. This new lease contract was signed by Vicenta de Reynes in behalf Herrera as the attorney in fact of the latter.

After 1965, the Chua’s (successors in interest of Chua Bok+), continued possession of the premises up to April 1978 with adjusted rental rates.In 1977, defendant Herrera sold the leased land to defendants-spouses Go. Spouses Go registered the sale and TCTs were issued in their names.Upon learning of the sale, the plaintiffs (Chua family) filed the instant case seeking the annulment of the said sale between Herrera and Spouses Go alleging that the conveyance was in violation of the plaintiffs’ right of option to buy the leased premises as provided in the Contract of Lease between Herrera and Chua Bok.

The lower court decided in favor of the Spouses Go. CA affirmed. The CA declared the contract of lease between Herrera and Chua Bok VOID because Vicenta R. de Reynes was not armed with a special power of attorney to enter into a lease contract for a period of more than one year.

ISSUE:

WON the plaintiffs have a right to stay on the leased premises.

RULING:

The lease contract, the linchpin of petitioners’ cause of action, involves the lease of real property for a period of more than one year. The contract was entered into by the agent of the lessor and not the lessor herself. In such a case, the law requires that the agent be armed with a special power of attorney to lease the premises.

Article 1878 of the New Civil Code, in pertinent part, provides:
Special Powers of Attorney are necessary in the following cases:
(8) To lease any real property to another person for more than one year.

It is true that respondent Herrera allowed petitioners to occupy the leased premises after the expiration of the lease contract and under Article 1670 of the Civil Code, a tacit renewal of the lease (tacitareconduccion) is deemed to have taken place.

A tacit renewal is limited only to the terms of the contract which are germane to the lessee’s right of continued enjoyment of the property and does not extend to alien matters, like the option to buy the leased premises. If the presumed will of the parties refers to the enjoyment of possession, the presumption covers the other terms of the contract related to such possession, such as the amount of rental, the date when it must be paid, the care of the property, the responsibility for repairs, etc. But no such presumption may be indulged in with respect to special agreements which by nature are foreign to the right of occupancy or enjoyment inherent in a contract of lease.

*Case digest by Lowel Dave D. Manuel, JD-4, Andres Bonifacio Law School, S.Y. 2019-2020