Cui v. Sun Chan
REITERATIONFacts
The Antecedents: Pedro Cui, the lessor, entered into a contract of rent with Sun Chan, the lessee. A clause in the contract stipulated that the lessee binds himself not to make any construction upon the property without the permission of the lessor, and any improvement made shall be for the benefit of the property without right to reimbursement. Procedural History: The trial court found as a fact that the defendant (lessee), without the permission of the plaintiff (lessor), made additions to the property consisting of two awnings on the rear end. However, the trial court concluded that despite these constructions, the plaintiff had no right to rescind the lease under clause (d) of the contract. The plaintiff appealed this judgment. The Appeal: The appellant (plaintiff) alleged that the court below erred in interpreting subdivision (d) of the contract to permit the lessee to make any work without the lessor's consent, and in not finding that such work, even if permitted, was detrimental to the property.
Issue(s)
Whether the lessor has the right to rescind the contract of lease due to the lessee's unauthorized construction of awnings. Whether clause (d) of the contract permits the lessee to make any construction without the lessor's consent.
Ruling
The Supreme Court reversed the judgment of the trial court. It declared that the appellant (lessor) has the right to rescind the contract of lease. The contract was declared resolved.
Ratio Decidendi
On Issue 1: The Supreme Court held that the lessor has the right to rescind the contract of lease due to the lessee's unauthorized construction. It is axiomatic in law that compliance with what is lawfully agreed upon is obligatory, and a breach of any of the conditions of a contract of lease is considered a cause for ouster and, therefore, for the rescission of the contract, as prescribed in Article 1569, case No. 3, of the Civil Code. The fact that the parties did not expressly provide for rescission does not negate this right, as obligations arising from a lease contract are reciprocal and governed by Article 1124 of the Civil Code, which implies the power to resolve the contract in case of non-fulfillment by one party. The injured party may choose between exacting fulfillment or resolution, and in this case, the lessor chose to institute a rescissory action. On Issue 2: The Supreme Court did not directly rule on the interpretation of clause (d) as permitting any construction without consent, as it found the second assignment of error unnecessary to discuss in light of the primary issue of rescission. However, the Court's decision to grant rescission implies that the lessee's action of making unauthorized constructions constituted a breach of the contract, irrespective of the precise interpretation of clause (d) regarding the scope of permitted works. The core of the ruling rests on the breach of the obligation not to construct without permission, which is a sufficient ground for rescission under general contract principles and specific provisions of the Civil Code.
Main Doctrine
The Supreme Court held that a breach of a contractual stipulation in a lease agreement, such as making unauthorized constructions, constitutes a valid ground for the rescission of the contract. This is based on the principle that compliance with lawful agreements is obligatory and that a breach of any condition in a lease contract is considered a cause for ouster and rescission under Article 1569, case No. 3, of the Civil Code. Moreover, in reciprocal obligations, the power to resolve the contract is implied when one party fails to fulfill their part, as provided by Article 1124 of the Civil Code, allowing the injured party to choose between exacting fulfillment or seeking resolution of the obligation.