BE: A building was constructed by A, for this B gave A 5 million pesos with the agreement that
B will be the lessee of the entire building for a period of 10 years for 1,000 rentals a month.
However, on the 5th of the agreement the entire building was burned due to FE without fault of anyone. A reconstructed the building, just before the building is completed, B notified A of his intent to continue the lease, as to complete the 10 year period. A refuse, is A justified in refusing B’s offer to continue the lease?
A: Yes. He was justified because by the destruction of the lease due to FE the lease contract was terminated so it can no longer be continued.
BE: Discuss the effect of death of lessee, lessor, agent and principal.
A: In a lease of thing, death of the lessee does not terminate the contract. A contract of lease is not essentially a personal contract therefore upon the death of the lessee, it may be continued until the expiration of period of the lease by the heirs.
(Case: Heirs of Dimaculangan vs. IAC) IMPLIED NEW LEASE
Note: One of the most favorite in the bar exam.
BE: The question in the bar could be as simple as under what circumstance would an implied new lease or tacita recunducion arise?
A: Under the law, the only requirement is that 1. The lease period has expired and
2. The lessee continues to be in possession of the lease for at least 15 days from the time of the expiration of the lease and
3. No notice to the contrary from the lessor and the lessee.
BE: Pertain to contract of lease entered into for period of 3 years Jan 1, 81 up to 1984. Rentals were paid on monthly basis. It was stipulated that the lessee has the option to buy property at a certain price within a certain period (option to buy). Despite the lapse of the 3 year period, the lessee did not exercise the option, but continued to be in possession of the property and paying the monthly rentals and the lessor accepting the same. This continued until June 1984 when the lessee stated that he would now buy the property in accordance with the option to buy. The lessor refuse, caliming there was no more option. Was the lessor correct? Yes.
Was it correct to say that there was extension of the lease under the facts?
A: Yes, there was an extension known was implied new lease. However, with the implied new lease it does not mean that all the terms and condition of the contract in the original lease continue also.
First as to the term, under the law, the term of the
renewed lease would not be the term agreed upon but only be of a period depending on the manner the rentals are paid. If the payment is on annual basis, the renewal would only be for a year and if monthly payment of rental is made, the implied new lease would only last for 30 days.
As to the option, it was renews, SC held, in an implied new lease, only those terms and conditions which are germane in a contract of lease are deemed renewed as to the rest like option to buy, will not be considered renewed.
Even in the facts of the case itself, it was stipulated that the option may be exercise within the period agreed upon (3 years).
AGENCY
Definition 1868, 1874 and 1878 - formalities Because a form is required for the validity or for the enforceability of the contract entered by the agent-1878, 1874
1892 - pertain to appointment of the substitute- effect- may the agent nonetheless be held liable for the loss that incurred by the principal as the result of the appointment of the substitute.
Other provisions pertain to the right and obligations of commission agent or more importantly the guaranty commission agent – 1907 - 1908
Effect of death -1919, 1930 and 1931 Either of the agent or principal
Revocation - kind of agency - agency coupled with interest - 1927
BE: A asked her best friend to B buy for her certain items in a grocery store. Is there a nominate contract created between A and B?
A: Better answer, if B agreed to the request of A, an agency relationship has been created, a nominate contract has been created.
Alternative Answer: I can agree with the answer given by the UP Law Center that a lease of service may have been created so long as there was no principal agency created or existing between A and B, although from the facts hindi ito lease of service, bestfriend eh, good possibility, so that’s why I can agree with the alternative answer of the UP Law Center the absence of principal agency relationship may result in a lease of service.
Q: I’m sure all of you or most of you must have been a proxy in a baptismal or wedding ceremony, but also you may have ask by a politician to represent in gathering because probably he may be in another gathering in another place, so if you’ve been a proxy in a wedding ceremony or baptismal ceremony, actually accepted the request of the real ninong or ninang then it mean an agency relationship created between you and the actual ninong or ninang? Or if you have accepted the request of the politician were for you to deliver the speech in a gathering would that result an agency relationship?
A: In both instances, no. It may appear under the definition of agency under 1868, that there is such an agency relationship because as defined, a contract of agency at first bind himself to render some service or to do something in representation
or on behalf another with the consent or authority of the latter. So, kung proxy ka that would fall under 1868 di ba but the definition has been criticized by some authors, one of them is Justice Reyes, that the definition of a contract of agency under 1868 does not contemplate social and political representation, hindi kasama ang social representation, political representation in order to have a contract of agency under the New Civil Code, the purpose of the agency must be the execution of the juridical act, the agent must ask or bind himself to execute a juridical act, meaning the act that will be executed by the agent on behalf of the principal should either create, modify or extinguish a legal relationship between the principal and a third person.
Concretely if the agent was authorized to buy, the act - the contract entered into by the agent with the third person would create a legal relationship between the principal and the third person, that would be a seller-buyer relationship, so it is a juridical act.
On the other hand, if the agent is authorized to pay an indebtedness of the principal to a certain person or to a bank and he in fact paid the said amount, the result of the act is the extinguishment of the existing legal relationship, the legal relationship would be the debtor-creditor relationship between the principal and third person, which would be extinguished by the act of the agent known as payment.
Again therefore for a contract of agency to arise the subject matter or the object of the contract must be the execution of the juridical act, mere social or political representative would not result to a contract of agency.
Q: If a contract well first if the instrument is titled or denominated as with agency does it mean that there is an agency relationship between the parties entered into a contract?
A: Not necessarily, again the contract is not the what parties want to call it to be, but rather how the law will consider such contract if it is the law determines the nature of the contact depending on the stipulation of the parties.
Q: But what if the agency was used by the parties in the stipulation? Does it mean that it is a contract of agency?
A: Not necessarily, in Quiroga vs. Parsons the word agency appeared about 3 times in the contract but the word agency does not pertain to a contract of agency but it pertains to another concept of the word agency. You can use the word agency several times in another concept like it may
be an instrumentality like a travel agency, security