G.R. No.

179898
December 23, 2008
MAUNLAD HOMES, INC., N.C. PULUMBARIT INC., N.C.P. LEASING CORPORATION, and
NEMENCIO C. PULUMBARIT, SR.
vs.
UNION BANK OF THE PHILIPPINES and JULIE C. GO,
Facts:
Maunlad Homes owned several parcels of land forming the commercial complex
known as Maunlad Malls 1 and 2 located in Malolos, Bulacan. These properties were
mortgaged to Union Bank. The same properties were foreclosed by the bank.
Before consolidation of ownership, Union Bank, as seller, and Maunlad Homes, as
buyer, entered into a contract to sell the said parcels of land. The contract was essentially a
buy-back agreement where the purchase price was to be paid in instalment. By virtue of the
contract to sell, Maunlad Homes remained in possession and management of the
commercial complex. They also continued to collect rental payments from the tenants of
the commercial complex.
Sometime in February 2004, Union Bank began interfering with the business
operation of the commercial complex, alleging that MAunlad Homes were not paying the
instalments under the contract to sell. The bank also convinced the tenants of the
commercial complex to pay the rentals directly to them, rather than to Maunlad Homes.
This prompted Maunlad Homes to file a complaint for injunction with prayer for
temporary restraining order (TRO) and preliminary injunction to prevent the bank from
collecting rental payments directly from the tenants of the commercial complex.
The RTC issued a TRO against the Bank. Upon appeal, the CA reversed the RTC
decision. Hence, this petition.
Issue:
WON Maunlad Homes have the right to collect rental payments from the tenants of
the commercial complex considering that they ceased to own the disputed property
pursuant to the contract to sell

Held: YES
It was an error for the CA to rule that Maunlad Homes are not entitled to collect rental
payments because they are no longer the owner of the commercial complex. It is not
essential under our law on lease that the lessor be the owner of the leased
property. A mere lessee may be a lessor under a sub-lease contract. Even a mere
possessor may enter into a contract of lease as lessor.
Records disclose that Maunlad Homes never ceased to be the possessor of the
commercial complex, although there was a contract to sell the said property. They
continued to possess the disputed property before, during, and after the execution of the
contract to sell. In fact, they were the ones who entered into the lease contracts with the
tenants of the commercial complex.
Also, the bank is estopped from asserting otherwise because it allowed Maunlad
HOmes to collect said rental payments after the execution of the contract to sell.
Furthermore, under the terms of the contract to sell, there exists no prohibition
against the collection of rental payments by petitioners. Thus, it may fairly be assumed,
unless contradicted, that Maunlad Homes have the right to collect and receive rental
payments from the tenants of the commercial complex.