LL and Company Development and Agro-Industrial Corporation vs Huang Chao Chua and Yang Tung Fa, GR No. 142378, March 7, 2002
Subject: Obligations and Contracts
Facts
Petitioner argues that respondents should be ejected
for non-payment of the new rental rates. That is, the monthly rental is subject
to increase. Said increase shall be based upon the imposition of Real Estate
Tax for every two years upon presentation of the increased real estate tax to
the lessees but said increase shall not be less than 255. Respondents, upon the
other hand, counter that they did not agree to these new rates. The former
denied petitioner's allegations, claiming instead that their failure to pay the
monthly rentals on the property was due to petitioner's fault when it attempted
to increase the amount of rent in violation of their contract.
Issue
Whether or not the increase can be authorized.
Ruling
No.
Under the law (Art 1306, NCC), the contracting parties
may establish such stipulations, clauses, terms, and conditions as they may
deem convenient, provided they are not contrary to law, morals, good customs,
public order, or public policy.
In this case, a unilateral increase in the rental rate
cannot be authorized considering that: (1) the option to renew is reciprocal
and, thus, the terms and conditions thereof - including the rental rate - must
likewise be reciprocal; and (2) the contracted clause authorizing an increase
- "upon presentation of the increased real estate tax to lessees"
has not been complied with, in the instant case, by petitioner. A stipulation
in a lease contract stating that it is subject to "an option to
review" shall be interpreted to be reciprocal in character. Unless the
language shows an intent to allow the lessee to exercise it unilaterally, such
option shall be deemed to benefit both the lessor and the lessee who must both
consent to the extension or renewal, as well as to its specific terms and
conditions.
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