Sy v. Andok's (G.R. No.192108; November 21, 2012)


FACTS: Petitioner Cely Sy (Sy) entered into a 5-year lease contract with Andok's Litson Corporation (Andok's). Andok's immediately paid its four (4) months of advance deposit and a security deposit equivalent to four (4) months of rental. However, while in the process of applying for electrical connection on the improvements to be constructed on Sys land, Andok's discovered that Sy has an unpaid MERALCO bill amounting to P400,000.00. Andok's further complained that construction for the improvement it intended for the leased premises could not proceed because another tenant, Mediapool, Inc. incurred delay in the construction of a billboard structure also within the leased premises.

Andoks first informed Sy about the delay in the construction of the billboard structure on a portion of its leased property. Three more letters of the same tenor were sent to Sy but the demands fell on deaf ears. Thus, Andok's filed a complaint for rescission before the RTC. The RTC ruled in favor of Andoks. On appeal, the CA affirmed the RTCs ruling.ISSUE: Is rescission is proper in this case?

HELD: Article 1191 of the Civil Code provides that the power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him. A lease contract is a reciprocal contract. By signing the lease agreement, the lessor grants possession over his/her property to the lessee for a period of time in exchange for rental payment. The aggrieved party is given the option to the aggrieved party to ask for: (1) the rescission of the contract; (2) rescission and indemnification for damages; or (3) only indemnification for damages, allowing the contract to remain in force.

While Andok's had complied with all its obligations as a lessee, the lessor failed to render the premises fit for the use intended and to maintain the lessee in the peaceful and adequate enjoyment of the lease. DENIED.