G.R. No. 17314 ; July 3, 1922
VICTORIA T. DE WINKLEMAN and C. L. WINKLEMAN, plaintiffs-appellants, vs. FILEMON VELUZ, defendant-appellant.

FACTS

Segunda Abuel leased two parcels of unregistered land to Filemon Veluz for nine years, with a stipulation that the lease would continue even if the lands were sold. In January 1919, Victoria T. de Winkleman, after investigating and personally reading the lease contract, purchased one parcel from Abuel. The deed of sale did not mention the lease. When Winkleman attempted to take possession, Veluz refused to deliver the land. Winkleman filed an action to compel delivery and recover fruits. Veluz defended his right under the lease. The trial court ruled partly for Winkleman. Both parties appealed.

ISSUE

Whether the purchaser, Winkleman, can terminate the existing lease under Article 1571 of the Civil Code, despite having actual knowledge of the lease and its stipulation to continue upon sale.

RULING

No. The Supreme Court reversed the trial court and absolved Veluz from the complaint. Article 1571 allows a purchaser to terminate a lease unless there is a contrary stipulation or under the provisions of the Mortgage Law. Here, Winkleman purchased the land with full knowledge of the lease and its stipulation to be respected upon sale. This knowledge is equivalent to registration under the Mortgage Law, making the lease a real right effective against her. As she was not a third person in good faith without notice, she is subrogated to the lessor’s position and must respect the lease in its entirety. The Court also held that the action was not merely for ejectment but involved the validity of lease termination, thus within the jurisdiction of the Court of First Instance.