Fort Bonifacio Development · G.R. 158997

Petitioner: Fort Bonifacio Development Corporation
Respondent: Yllas Lending Corporation
Citation: G.R. No. 158997
Court: Supreme Court
Division: First Division
Ponente: Carpio, J.
Decided: October 6, 2008

Summary

FBDC leased restaurant premises to Tirreno with contractual lien provision over lessee's properties for unpaid rentals. When Tirreno defaulted, FBDC terminated the lease and appropriated Tirreno's restaurant equipment per contract terms. However, Tirreno had also executed a chattel mortgage over the same properties to Yllas Lending. When Yllas foreclosed and sheriff seized the properties from FBDC, FBDC filed third-party claim and motion to intervene. The RTC dismissed both, ruling the lien provision void as pactum commissorium. The Supreme Court reversed, holding the provision constituted a valid forfeiture clause rather than a pledge, and granted FBDC's intervention as a party with legal interest in the litigation. The case establishes that lessors may validly contract for liens over lessees' properties and may intervene in foreclosure actions affecting such properties.

Statutes applied

Civil Code, Art. 2088

Related cases

Other Philippine cases on the same provisions and issues.

Solid Homes v. Hon. Court of Appeals G.R. No. 117501
Arturo A. Dacquel v. Spouses Ernesto Sotelo G.R. No. 203946
Leticia Elizondo Eupena v. Luis G. Bobier G.R. No. 211078
Spouses Jose Salonga v. Spouses Efren A. Lorenzo G.R. No. 228652
Alfredo N. Aguila, Jr. v. Honorable Court of Appeals G.R. No. 127347
Imelda A. Nakpil v. Intermediate Appellate Court G.R. No. 74449
Montelibano Esguerra v. Hon. Court of Appeals G.R. No. 40062
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By the Intellegal Editorial Board · October 6, 2008

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