G.R. No. L-10968, December 24, 1915
YU CHIN PIAO, ET AL., plaintiffs-appellants, vs. ADELINA LIM TUACO, ET AL., defendants-appellees.

FACTS:
The plaintiffs and defendants, heirs of the deceased Jose Santiago Tiaoqui, entered into an agreement to partition his estate amicably. A clause in the partition agreement provided that the defendants would lease a building used as a lumber yard to the plaintiffs for P250 per month, beginning March 1 of the year of the agreement, “so long as the tenant paid the stipulated rent.” Concerned about the indefinite tenure, the plaintiffs sought to have the lease term made definite. Unable to reach an agreement with the defendants, the plaintiffs filed an action in the Court of First Instance of Manila to request the court to fix a definite term for the lease. The trial court fixed the lease term at 15 years, conditioned on the plaintiffs paying the defendants P2,000, representing the value of improvements allegedly made by the defendants on the property. The plaintiffs appealed, contesting the imposition of the P2,000 payment and arguing for a longer lease term.

ISSUE:
1. Whether the trial court erred in ordering the plaintiffs to pay P2,000 to the defendants for improvements.
2. Whether the trial court erred in fixing the lease term at only 15 years.

RULING:
1. On the payment of P2,000 for improvements: The Supreme Court ruled that the trial court erred in ordering the plaintiffs to pay P2,000. The record contained no evidence that the defendants spent that amount (or any amount) on improvements. The trial court’s reliance on the un-denied allegations in the answer was misplaced because, under Section 104 of the Code of Civil Procedure, the plaintiff is deemed to have controverted every material allegation in the answer if no reply is filed. The only admission during trial was made by the defendant regarding the facts in the complaint, not by the plaintiffs regarding the answer. Therefore, the portion of the judgment requiring payment of P2,000 was stricken.

2. On the lease term of 15 years: The Supreme Court affirmed the trial court’s fixing of the lease term at 15 years. The Court recognized its authority to fix the term of a lease with an indefinite duration, citing jurisprudence and Article 1128 of the Civil Code. The plaintiffs failed to provide sufficient reason to disturb the trial court’s determination, which was based on factors such as the property’s condition, rental value, necessary future improvements, and the fact that one lessor was a minor. The Court found no grounds to extend the term beyond 15 years.

DISPOSITIVE PORTION:
The judgment was modified by deleting the requirement for the plaintiffs to pay P2,000 to the defendants. As modified, the judgment was affirmed, with no special finding as to costs on appeal.