Atty. Salvador Roque, Senior Partner

ALLEN & JONES LAW FIRM
17/F, Landco Bulding, Bajada
TO: Atty. Salvador Roque, Senior Partner

Roque and Associates
FROM: Atty. Abad Santos-485786
SUBJECT: Non-compliance of Obligation Arising from

Contract of Lease
Roxy B., v Rodolfo Chua
Date: February 24, 2020.
INTER-OFFICE MEMORANDUM
1. ISSUE:
Whether the non-compliance of the obligation

arising from a Contract of Lease through refusal in
paying rental fees (due to death of the owner)
would constitute legal consequences due to breach
of contract.
2. CONCLUSION:
YES. According to Article 1311 of the Civil

Code, contracts take effect only between the
parties, their assigns and heirs, except in case
where the rights and obligations arising from the
contract are not transmissible by their nature, or
by stipulation or by provision of law. Supreme
Court cited in the case of Inocencio vs San Jose
that, a lease contract is not essentially personal in
character. Thus, the rights and obligations therein
are transmissible to the heirs. The general rule,
therefore, is that heirs are bound by contracts
entered into by their predecessors-in-interest
except when the rights and obligations arising
therefrom are not transmissible by (1) their
nature, (2) stipulation or (3) provision of law. In
the subject Contract of Lease, not only were there
no stipulations prohibiting any transmission of
rights, but its very terms and conditions explicitly
provided for the transmission of the rights of the
lessor and of the lessee to their respective heirs
and successors. The contract is the law between
the parties. The death of a party does not excuse
nonperformance of a contract, which involves a
property right, and the rights and obligations

thereunder pass to the successors or
representatives of the deceased. Similarly,
nonperformance is not excused by the death of
the party when the other party has a property
interest in the subject matter of the contract. I
recommend to comply with the obligation arising
from the contract until the same be fulfilled. She
also have to secure the copy of receipt of payment
from the heirs.
3. STATEMENT OF FACTS:
Ms. Roxy entered into Contract of Lease to

Mr. Chua (respondent) for the lease of a 40-sq.m.
commercial space in RC Building. The monthly
rental fee is Php 30,000.00 and such contract is
good for one-year effective October 1, 2019.
Ms. Roxy religiously paying the monthly

rental to the Respondent until January 2020.
However, starting February she stopped paying
the monthly rental because the respondent died
last December 2019 and his two sons, Rey Chua
and Rex Chua, have been claiming on separate
occasions that the rent should be given to them.
4. DISCUSSION:
According to Article 1305 of the Civil Code, a

contract is a meeting of minds between two
persons whereby one binds himself, with respect
to the other, to give something or to render some
service. The provision explains that a contract is
an agreement between the parties. The parties or
party are bound to comply with the obligations.
Fulfillment of the what they have agreed upon are
the implicit and explicit promise in a contract
which they are bound to comply due to the fact
that a contract has a force of law. This is
supported by the Article 1159 which states that,
obligations arising from contracts have the force
of law between the contracting parties and should
be complied with in good faith.
Article 1673 provides that, the lessor may

judicially eject the lessee for any of the following
causes:
(1) When the period agreed upon, or that which is

fixed for the duration of leases under articles 1682
and 1687, has expired;
(2) Lack of payment of the price stipulated;
(3) Violation of any of the conditions agreed upon

in the contract;
(4) When the lessee devotes the thing leased to

any use or service not stipulated which causes the
deterioration thereof; or if he does not observe
the requirement in No. 2 of article 1657, as
regards the use thereof. Ms. Roxy admits that she
refused to pay the rentals of the commercial space
she rented due to her confusion whether the
contract she stipulated with Ms. Chua is still valid.
On the other hand, Article 1256 of the New

Civil Code provides that If the creditor to whom
tender of payment has been made refuses without
just cause to accept it, the debtor shall be
released from responsibility by the consignation of
the thing or sum due.
Consignation alone shall produce the same

effect in the following cases:
(1) When the creditor is absent or unknown,

or does not appear at the place of
payment;
(2) When he is incapacitated to receive the

payment at the time it is due;
(3) When, without just cause, he refuses to

give a receipt;
(4) When two or more persons claim

the same right to collect;
(5) When the title of the obligation has been

lost.
From the foregoing, consignation may also be

an alternative remedy for Ms. Roxy B.
The requisites of consignation are as

follows:
1. The existence of a valid debt;
2. Valid prior tender, unless tender is excuse

[sic];
3. Prior notice of consignation (before

deposit)
4. Actual consignation (deposit);
4. Subsequent notice of consignation;
Death of the lessor would not mean that the

contract would become ineffective. The heirs of
the deceased owner may still oblige the other
party to comply with the obligation stipulated in
the contract. It is based on the case of Llenado v.
Llenado in which the Supreme Court said that, a
contract of lease is, therefore, generally
transmissible to the heirs of the lessor or lessee.
It involves a property right and, such, the death of
a party does not excuse non-performance of the
contract. The rights and obligations pass to the
heirs of the deceased and the heir of the deceased
lessor is bound to respect the period of the lease.
Thus, the refusal of Ms. Roxy B. to give the

monthly rental to any of the two heirs of the
deceased lessor would constitute breach of
contract. However, she may pay any of the
solidary creditors or avail consignation to avoid
legal consequences for such violation.

Atty. Salvador Roque, Senior Partner

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Atty. Salvador Roque, Senior Partner

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ALLEN & JONES LAW FIRM

17/F, Landco Bulding, Bajada

TO: Atty. Salvador Roque, Senior Partner

FROM: Atty. Abad Santos-485786

SUBJECT: Non-compliance of Obligation Arising from

Date: February 24, 2020.

Whether the non-compliance of the obligation

YES. According to Article 1311 of the Civil

property right, and the rights and obligations

Ms. Roxy entered into Contract of Lease to

Ms. Roxy religiously paying the monthly

According to Article 1305 of the Civil Code, a

Article 1673 provides that, the lessor may

(1) When the period agreed upon, or that which is

(2) Lack of payment of the price stipulated;

(3) Violation of any of the conditions agreed upon

(4) When the lessee devotes the thing leased to

On the other hand, Article 1256 of the New

Consignation alone shall produce the same

(1) When the creditor is absent or unknown,

(2) When he is incapacitated to receive the

(3) When, without just cause, he refuses to

(4) When two or more persons claim

(5) When the title of the obligation has been

From the foregoing, consignation may also be

The requisites of consignation are as

1. The existence of a valid debt;

2. Valid prior tender, unless tender is excuse

3. Prior notice of consignation (before

4. Actual consignation (deposit);

4. Subsequent notice of consignation;

Death of the lessor would not mean that the

Thus, the refusal of Ms. Roxy B. to give the

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