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8/9/2019 Millare v. Hernando.docx
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PACIFICA MILLARE, petitioner, vs. HON. HAROLD M. HERNANDO, In his capacity as Presiding
Judge, Curt ! Instance ! A"ra, #ecnd Judicia$ District, %ranch I, AN&ONIO CO and EL#A
CO, respondents.
'.R. N. L())*+
June -, /+0
FAC
• A contract of lease was executed between Petitioner Millare as lessor and respondent Co as
lessee
• The lessor agreed to rent out the space for an amount of P35.
• !ubse"uentl#, the lessor informed the lessee that renting the space could be continued if there
would be an increase in the rental in the amount of P$,%.
• The lessee made a counter offer of P&. per month
&he parties 2ere nt a"$e t agree n the a3unt ! renta$
• Millare had no intention of renewing the contract
• !he subse"uentl# filed an e'ectment case against Co
Respndent Judge rdered the rene2a$ ! the cntract
Artic$es /0 and 40 2ere cited t sustain his 5udg3ent
He a$s cnstrued paragraph - ! their cntract as 3andatry rene2a$
• Paragraph $3 of the Contract of (ease reads as follows)
o $3. This contract of lease is sub'ect to the laws and regulations of the goverrunent* and
that this contract of lease ma# be renewed after a period of five +5 #ears under the
terms and conditions as will be mutuall# agreed upon b# the parties at the time of
renewal*
• The respondent 'udge urges that under paragraph $3 "uoted above)
o There was alread# a consummated and finished mutual agreement of the parties to
renew the contract of lease after five #ears
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o -hat is onl# left unsettled between the parties to the contract of lease is the amount of
the monthl# rental
o The lessor insists Pl,% a month, while the lessee is begging P& a month which
doubled the P35 monthl# rental under the original contract
o The lessor is guilt# of breach of contract) !ince the original lease was fixed for five +5
#ears, it follows, therefore, that the lease contract is renewable for another five +5 #earsand the lessee is not re"uired before hand to give express notice of this fact to the
lessor because it was expressl# stipulated in the original lease contract to be renewed
n short, the lease contract has never expired because paragraph $3 thereof had
expressl# mandated that it is renewable.
I##6E1 -hether or not the complaint filed b# the respondent Co spouses claiming renewal of
the contract of lease stated a valid cause of action
HELD1
• /o
Parties cannt "e cerced t enter int a cntract 2here n agree3ent is had "et2een
the3 as t the principa$ ter3s and cnditins ! the cntract.
o 0reedom to stipulate such terms and conditions is of the essence of our contractual
s#stem, and b# express provision of the statute, a contract ma# be annulled if tainted b#
violence, intimidation or undue influence
• Paragraph $3 of the Contract of (ease can onl# mean that the lessor and lessee ma# agree to
renew the contract upon their reaching agreement on the terms and conditions to be embodied
in such renewal contract.
o Fai$ure t reach agree3ent n the ter3s and cnditins ! the rene2a$ cntract
2i$$ ! curse pre7ent the cntract !r3 "eing rene2ed at a$$.
• n the instant case, the lessor and the lessee conspicuousl# failed to reach agreement both on
the amount of the rental to be pa#able during the renewal term, and on the term of the
renewed contract.
• Article $$1& of the Civil Code provides as follows)
If the obligation does not fix a period, but from its nature and the circumstances it can
be inferred that a period was intended, the courts ma# fix the duration thereof.
The courts shall also fix the duration of the period when it depends upon the will of the
debtor.
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n ever# case, the courts shall determine such period as ma#, under the circumstances,
have been probabl# contemplated b# the parties. 2nce fixed b# the courts, the period
cannot be changed b# them.
• The first paragraph of Article $$1& is clearl# inapplicable, since the Contract of (ease did in
fact fix an original period of five #ears, which had expired.
•
t is also clear from paragraph $3 of the Contract of (ease that the parties reserved tothemselves the facult# of agreeing upon the period of the renewal contract.
• The second paragraph of Article $$1& is e"uall# clearl# inapplicable since the duration of the
renewal period was not left to the wiu of the lessee alone, but rather to the will of both the
lessor and the lessee.
• Most importantl#, Article $$1& applies onl# where a contract of lease clearl# exists.
o ere, the contract was not renewed at all, there was in fact no contract at all the period
of which could have been fixed.
• Article $4& of the Civil Code reads thus)
f at the end of the contract the lessee should continue en'o#ing the thing left for $5 da#s
with the ac"uiescence of the lessor and unless a notice to the contrar# b# either part#
has previousl# been given. t is understood that there is an implied new lease, not for
the period of the original contract but for the time established in Articles $4% and $4&.
The terms of the original contract shall be revived.
• 6ven if it be assumed that tacite reconduccion had occurred, the implied new lease could not
possibl# have a period of five #ears, but rather would have been a month7to7month lease since
the rentals +under the original contract were pa#able on a monthl# basis.
• Contractual terms and conditions created b# a court for two parties are a contradiction in
terms.
o f the# are imposed b# a 'udge who draws upon his own private notions of what morals
good customs, 'ustice, e"uit# and public polic#8 demand, the resulting 8agreement8
cannot, b# definition, be consensual or contractual in nature.
o t would also follow that such coerced terms and conditions cannot be the law as
between the parties themselves.
o Contracts spring from the volition of the parties.
o That volition cannot be supplied b# a 'udge and a 'udge who pretends to do so, acts
t#rannicall#, arbitraril# and in excess of his 'urisdiction.