See - INOCENCIO VS. HOSPICIO DE SAN JOSE, GR NO. 201787, SEPT. 25, 2013.
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Section 6 of the lease contract requires written consent of the lessor before the lease may be assigned or transferred. In Tamio v. Tecson,38 we explained the nature of an assignment of lease:
In the case of cession or assignment of lease rights on real property, there is a novation by the substitution of the person of one of the parties — the lessee. The personality of the lessee, who dissociates from the lease, disappears; only two persons remain in the juridical relation — the lessor and the assignee who is converted into the new lessee.39
Assignment or transfer of lease, which is covered by Article 1649 of the Civil Code, is different from a sublease arrangement, which is governed by Article 1650 of the same Code. In a sublease, the lessee becomes in turn a lessor to a sublessee. The sublessee then becomes liable to pay rentals to the original lessee. However, the juridical relation between the lessor and lessee is not dissolved. The parties continue to be bound by the original lease contract. Thus, in a sublease arrangement, there are at least three parties and two distinct juridical relations.40
Ramon had a right to sublease the premises since the lease contract did not contain any stipulation forbidding subleasing. Article 1650 of the Civil Code states:
Art. 1650. When in the contract of lease of things there is no express prohibition, the lessee may sublet the thing leased, in whole or in part, without prejudice to his responsibility for the performance of the contract toward the lessor.
Therefore, we hold that the sublease contracts executed by Ramon were valid.
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