Millare v. Hernando.docx

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.

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Millare v. Hernando.docx