Facts:
The petitioner is a usufruct of a parcel of land known as Papaya Fishpond. The petitioner entered into a contract of lease with Luis Keh for a period of five years, renewable for five years. The lease contract stated that Keh cannot sublease and cannot assign rights to anyone. The respondent Luis Crisostomo acquired possession of the aforementioned parcel of land from Keh through an agreement called "pakiao buwis". The petitioners re-acquired possession by force; while Keh surrendered possession to them via a letter.
Issue:
WoN Crisostomo is a sublessee of the fishpond?
Ruling:
(Article 1244, par. 2; 1168)
Yes, Crisostomo is a sublessee of the fishpond.
The lease contract prohibited petitioner Luis Keh, as lessee, from subleasing the fishpond. In entering into the agreement for pakiao-buwis with the private respondent, not to mention the apparent artifice that was his written agreement with petitioner Lee on January 9, 1978, petitioner Keh did exactly what was prohibited of him under the contract — to sublease the fishpond to a third party.
That the agreement for pakiao-buwis was actually a sublease is borne out by the fact that the private respondent paid petitioners Luis Keh and Juan Perez, through petitioner Tansinsin the amount of annual rental agreed upon in the lease contract between the usufructuaries and petitioner Keh. Petitioner Keh led the private respondent to unwittingly incur expenses to improve the operation of the fishpond. By operation of law, therefore, petitioner Keh shall be liable to the private respondent for the value of the improvements he had made in the fishpond or for P486,562.65 with an interest of six percent (6%) per annum from the rendition of the decision of the trial court on September 6, 1989.
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