Nissan Car Lease Phils. v. Lica · G.R. 176986

Petitioner: Nissan Car Lease Phils.
Respondent: Lica Management
Citation: G.R. No. 176986
Court: Supreme Court
Division: Third Division
Ponente: Jardeleza, J.
Decided: January 13, 2016

Summary

This case involves the validity of extrajudicial rescission of a commercial lease contract. NCLPI leased property from LMI for 10 years but defaulted on rental payments totaling over P2.6 million and unauthorized subleased to Proton. LMI terminated the lease via written notice and entered direct contract with Proton. The Supreme Court affirmed that extrajudicial rescission is valid under Civil Code Article 1191 even without express contractual provision, provided there is substantial breach. The Court found NCLPI committed material breaches through non-payment and unauthorized sublease, validating LMI's rescission. NCLPI was ordered to pay unpaid rentals with 6% interest and damages to both LMI and Proton. The decision clarifies that extrajudicial rescission is always subject to judicial review and the rescinding party proceeds at its own risk. The Court rejected NCLPI's damage claims, finding it acted in bad faith by misrepresenting its lease status to Proton.

Statutes applied

Civil Code, Art. 1191

Related cases

Other Philippine cases on the same provisions and issues.

Spouses Alexander v. Kodak Philippines G.R. No. 167615
Estelita Villamar v. Balbino Mangaoil G.R. No. 188661
Spouses Fernando v. Continental Airlines G.R. No. 188288
Vicelet Lalicon v. National Housing Authority G.R. No. 185440
Heirs of Sofia Quirong v. Development Bank of the Philippines G.R. No. 173441
Unlad Resources Development Corporation v. Renato P. Dragon G.R. No. 149338
Victoria Ong v. Ernesto Bogñalbal G.R. No. 149140
Visayan Sawmill Company v. The Honorable Court of Appeals G.R. No. 83851

By the Intellegal Editorial Board · January 13, 2016

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