CIVIL LAW; TORTIOUS INTERFERENCE; Not present when the intrusion is impelled by purely economic motives

Analita P. Inocencio v. Hospicio De San Jose

G.R. No. 201787, 25 September 2013

"We also find that HDSJ did not commit tortious interference. Article 1314 of the Civil Code states:

Art. 1314.Any third person who induces another to violate his contract shall be liable for damages to the other contracting party. 

As correctly pointed out by the Inocencios, tortious interference has the following elements: (1) existence of a valid contract; (2) knowledge on the part of the third person of the existence of the contract; and (3) interference of the third person without legal justification or excuse.

The facts of the instant case show that there were valid sublease contracts which were known to HDSJ. However, we find that the third element is lacking in this case.

In So Ping Bun v. Court of Appeals, we held that there was no tortious interference if the intrusion was impelled by purely economic motives. In So Ping Bun, we explained that:

'Authorities debate on whether interference may be justified where the defendant acts for the sole purpose of furthering his own financial or economic interest. One view is that, as a general rule, justification for interfering with the business relations of another exists where the actor's motive is to benefit himself. Such justification does not exist where his sole motive is to cause harm to the other. Added to this, some authorities believe that it is not necessary that the interferer's interest outweighs that of the party whose rights are invaded, and that an individual acts under an economic interest that is substantial, not merely de minimis, such that wrongful and malicious motives are negatived, for he acts in self-protection. Moreover, justification for protecting one's financial position should not be made to depend on a comparison of his economic interest in the subject matter with that of others. It is sufficient if the impetus of his conduct lies in a proper business interest rather than in wrongful motives.'

The evidence shows that HDSJ entered into agreements with Ramon's former sublessees for purely economic reasons (payment of rentals). HDSJ had a right to collect the rentals from the sublessees upon termination of the lease contract. It does not appear that HDSJ was motivated by spite or ill will towards the Inocencios." (Emphasis and underscoring supplied)

CIVIL LAW; LEASE; Essentially not personal in character; No novation in sublease; Lessee can sublease as long as it is not expressly prohibited; When Lessor should pay 1/2 value of improvements introduced

Analita P. Inocencio vs. Hospicio De San Jose

G.R. No. 201787, 25 September 2013

In this case, the Supreme Court held the clause "contract is non-transferable unless prior consent of the lessor is obtained in writing" to refer to transfers inter vivos and not transmissions mortis causa.

Since lease contracts are not personal in character, the SC explained that the rights of a lessee may be transferred to an heir via intestate succession and unless prohibited, the heir can exercise the same rights as the lessee-predecessor-in-interest.

A lessee is also not prohibited from sub-leasing the leased property or premises provided no express prohibition exists in the contract of lease. When there is a sub-lease, there is likewise no novation of the contract of lease, since the original juridical relation between the lessor-lessee remains (as opposed to an Assignment of the Lease when the lessee is replaced by the assignee).

Another notable point made in this case is the fact the simultaneous lease of the building likewise includes with it, the lease of the land on which the property is located. Thus, rental payment for the building includes rental for the lot.

With respect to improvements introduced by the lessor in good faith on the property, the SC held that the lessor is entitled to be paid 1/2 value of the improvements introduced at the time the lease is terminated, provided that the following requirements are present: (1) the improvements were introduced in good faith; (2) the improvements are useful; and (3) suitable to the use for which the lease is intended, without altering the form and substances.

Should the lessee refuse to reimburse the lessor, the latter may then cause the demolition of the improvements introduced.