Simon owned a townhouse that he rented out to Shannon, a flight attendant with Soleil Philippine Airlines (SPA). They had no written contract but merely agreed on a three (3)-year lease. Shannon had been using the townhouse as her base in Manila and had been paying rentals for more than a year when she accepted a better job offer from Sing Airlines. This meant that Singapore was going to be her new base and so she decided, without informing Simon, to sublease the townhouse to Sylvia, an office clerk in SPA.
(a) Can Simon compel Shannon to reduce the lease agreement into writing? (2.5%)
(b) Does the sublease without Simon’s knowledge and consent constitute a ground for terminating the lease? (2.5%)
Suggested Answer:
(a) Yes. Answer
Under the Civil Code and jurisprudence, an agreement of the leasing for a longer period than one year is covered by the Statute of Fraud. However, a contract is enforceable under the Statute of Fraud if partial performance has been made. Further, when a contract is enforceable under the Statute of Frauds, the contracting parties may compel each other to observe that form, once the contract has been perfected. Rule
In the case at bar, the parties agreed to a 3-year verbal lease contract which is covered by the Statute of Fraud. However, Shannon had been using the townhouse for more than a year resulting in partial performance. The contract becomes enforceable under the Statue of Fraud. Apply
Thus, Simon can compel Shannon to reduce the lease agreement into writing. Conclusion
(b) No. Answer
Under the Civil Code, the lessee may sublease unless otherwise prohibited by the lessor. Rule
In the case at bar, there was no prohibition on subleasing. Apply
Thus, the sublease without Simon’s knowledge and consent may not constitute a ground for terminating the lease. Conclusion
