Danilo S. Yap v. Court of Appeals

Summary

This consolidated case involved a lease dispute over a Manila commercial building owned by Martinez Leyba, Inc. and leased to Alejandro Dy Juanco/Universal Mill Supply since 1960 under an oral monthly arrangement. The property was subsequently occupied by Bee Queen Restaurant (controlled by Dy Juanco) and subleased to Danilo Yap in 1986. When MLI terminated the lease in 1990 due to unauthorized subleasing, Bee Queen sought court intervention under Article 1687 of the Civil Code to extend the lease period. The Supreme Court reversed the Court of Appeals' grant of extension, holding that lease extensions must be sought before contract expiration, not after termination. The Court found no equitable basis for extension since the lessees had subleased the property for profit without the lessor's knowledge, violating principles of equity and fair dealing in lease relationships.