G.R. No. L-28367 November 29, 1971
PEDRO PAMINTUAN and RUPERTO D. TAN, petitioners, vs. COURT OF APPEALS, LORENTE O. YARISANTOS and LOURDES O. YARISANTOS, respondents.

FACTS

Private respondents, the Yarisantos spouses, as lessors, filed a complaint for rescission of a contract of lease against petitioners Ruperto Tan (lessee) and Pedro Pamintuan (sublessee). The lease, originally executed in 1951, covered two lots in Sampaloc, Manila, with a monthly rental of P15.00 per lot, payable promptly at the end of every month. A contractual provision stipulated that failure to pay rentals for six consecutive months would automatically annul the contract. The complaint alleged that petitioners were in arrears for twelve months on one lot and eight months on the other, having failed to make monthly payments as stipulated.
Petitioners admitted they did not make monthly payments but defended that the lessors had, since May 1958, refused to recognize the lease contract’s validity, thereby excusing their non-payment. They argued that by depositing rentals at six-month intervals, they prevented the contract’s automatic annulment under the six-month default clause. Both the trial court and the Court of Appeals ruled in favor of the lessors, ordering rescission.

ISSUE

Whether the lessors are entitled to rescind the lease contract due to the lessees’ failure to pay the monthly rentals promptly at the end of each month as stipulated.

RULING

Yes. The Supreme Court affirmed the Court of Appeals’ decision. The core legal principle is that the lessee’s obligation under Article 1657 of the Civil Code is to pay the price of the lease according to the terms stipulated. The contract explicitly required payment “promptly at the end of every month.” Petitioners’ admission that they never made such monthly payments constituted a clear violation of this fundamental obligation.
Consequently, under Article 1659 of the Civil Code, the aggrieved lessor has the right to seek rescission of the contract for such failure. The Court rejected petitioners’ defense that the lessors’ prior refusal to recognize the contract excused payment. The proper remedy for a lessee facing a refusal to accept payment is to make a valid tender and, if refused, to consign the rental in court. Petitioners did not avail themselves of this remedy.
Furthermore, the Court upheld that the contractual right to rescind for failure to pay monthly (under Article 1659) is distinct from the contract’s provision for automatic annulment after six months of non-payment. These are separate stipulations addressing different scenarios. The six-month clause sets a condition for automatic cancellation, but it does not negate the lessor’s separate statutory right to seek judicial rescission for the breach of the monthly payment term. Petitioners’ practice of paying at six-month intervals did not cure their breach of the monthly payment obligation and thus did not deprive the lessors of their right to rescind. No reversible error was found in the appellate court’s application of the law.