REMINGTON
INDUSTRIAL G.R. No. 171858
SALES
CORPORATION,
Petitioner, Present:
Ynares-Santiago, J. (Chairperson),
- versus - Austria-Martinez,
Chico-Nazario,
Nachura,
and
Reyes, JJ.
CHINESE YOUNG MEN’S
CHRISTIAN ASSOCIATION OF
THE PHIL. ISLANDS, doing Promulgated:
business under the name MANILA
DOWNTOWN YMCA,
Respondent. August 31, 2007
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YNARES-SANTIAGO,
J.:
For resolution is the motion for
reconsideration filed by respondent Chinese Young Men’s Christian Association
of the Philippine Islands (YMCA) of the Decision dated January 22, 2007, the
dispositive portion of which states:
WHEREFORE,
the instant petition is GRANTED. The Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 88599 are SET ASIDE. The Decision of the Regional
Trial Court of Manila, Branch 25, in Civil Case No. 03-107655, dismissing the
unlawful detainer case for lack of merit, is hereby REINSTATED and AFFIRMED.
SO ORDERED.[1]
Respondent YMCA owns a two
storey-building in Binondo, Manila. It leased Unit No. 963 located at the
second floor to petitioner RISC from December 1, 1993 to November 30, 1995. It also leased to petitioner RISC Unit No. 966
located at the ground floor from December 1, 1995 to November 30, 1997, while
the adjoining unit or Unit 964 was leased to petitioner’s sister company RSC. Petitioner removed the partition between Units
964 and 966 and used the combined areas as its office, hardware store and
display shop for steel products. It was
also used as a passageway to Unit 963, which was utilized by petitioner as its
staff room.
On February 27, 1997, respondent
formally terminated the lease over the second floor unit and gave RISC until
March 31, 1997 to vacate the premises. Before
the said period ended, RISC filed an action for the Fixing of Lease Period over
the said unit.[2]
Subsequently, YMCA filed an action for Ejectment[3] against petitioner. The two cases were consolidated before Branch
26 of the Metropolitan Trial Court of Manila (MeTC-Manila).
Meanwhile, petitioner filed a Petition
for Consignation of Rentals[4]
alleging that respondent refused to receive payments of the rentals for the
ground floor units without just cause. During
the hearing, petitioner filed a Formal Surrender of the Leased Premises[5]
to which respondent manifested that it does not object to the turn over or the
surrender of the leased premises.[6] On July 9, 1998, after petitioner delivered
two checks covering the rents for the ground floor units, the trial court
issued an Order declaring the consignation case closed. However, petitioner continued to use the
premises as passageway since it is the only means of ingress and egress to the
second floor unit it occupies. RISC kept
the premises padlocked allegedly as a security measure and failed to give YMCA the
keys to the premises.
On August 11, 1998, the trial court
hearing the consolidated cases rendered a Decision extending the lease period
for three years from finality of the Decision and dismissed YMCA’s complaint
for ejectment. Petitioner filed a Motion
to Constitute Passageway alleging that it has no means of ingress or egress to
its second floor Unit. An ocular inspection was conducted on February 5, 1999. The Commissioner’s Report revealed that petitioner
is still in possession of the keys to the two ground floor units because YMCA failed
to provide an adequate passageway to the second floor.[7] Thereafter, YMCA manifested its willingness to
constitute a passageway provided Remington will surrender possession of the
ground floor unit.[8]
Since respondent was never in actual
possession of the premises at the ground floor, it demanded payment from the
respective lessees rentals in arrears. Respondent
sent Statements of Account dated September 7, 1999 and December 31, 1999 which
petitioner repudiated. Finally, on January 18, 2000, respondent sent petitioner
a Notice of Termination of Lease with demand to vacate and pay rents
from July 1998 to December 1999. This
was followed by Statements of Account dated July 28, 2000 and August 7, 2000
according to which the rental arrears amounted to P571,153.85.
On October 26, 2000, respondent filed
two ejectment cases against petitioner before the MeTC of Manila. The ejectment case against RSC over ground
floor Unit No. 964 was raffled to Branch 20 of the MeTC-Manila which rendered
its Decision on November 5, 2001 ordering RSC to vacate the premises and to pay
back rents. However, upon appeal, the
RTC reversed the Decision of the MeTC and dismissed the complaint. YMCA
appealed to the Court of Appeals which dismissed the case on technical grounds
and is now pending appeal before this Court.
The ejectment case against petitioner
RSIC over ground floor Unit No. 966, the subject matter of the case at bar, was
raffled to Branch 17 of the MeTC-Manila.[9] In its Decision dated June 20, 2003, it
ordered petitioner RSIC to vacate the premises and to pay back rents.[10] Consequently, petitioner
appealed to the RTC which ruled in its favor dismissing the complaint for
ejectment for lack of cause of action.[11] Thereafter, YMCA appealed
to the Court of Appeals which reversed the RTC and reinstated the Decision of
the MeTC.
The Court of
Appeals decided in favor of respondent YMCA ruling that it was effectively
deprived of possession of the subject units since RISC failed to surrender
possession despite manifesting its willingness to do so, by padlocking the
subject premises. It did not lend
credence to petitioner’s claim that the padlocking of the premises was for self-preservation
and that it is the only means of ingress and egress to its second floor unit
since RISC continued to exercise control over the subject premises. The appellate court also rejected the RTC’s
observation that YMCA was not prevented from taking control of the disputed
units for it could have easily forced open the padlocks. It maintained that ejectment is the legal
alternative as against the use of force and breaches of the peace.
RISC thus
filed the instant petition for review on certiorari assailing the Decision of
the Court of Appeals. In the assailed
Decision, we ruled that petitioner has effectively surrendered possession of
Units 964 and 966; that the filing of petitioner’s Formal Surrender of the
Leased Premises constitute constructive delivery of the said premises
effective July 1, 1998 as it thereafter emptied and vacated the premises; and
that respondent could have easily removed the padlock and take legal and actual
possession of the premises.
In the instant motion for
reconsideration, respondent argues that petitioner has not constructively
delivered the possession of the ground floor units despite the filing in the
consignation case of the Formal Surrender of the Leased Premises and
after it has emptied and vacated the leased premises on July 1, 1998. Respondent contends that petitioner’s use of
the premises as passageway, the continued padlocking of the gates and
non-turnover of keys constitute unlawful withholding of the possession of the
subject premises for which petitioner should be liable.
We grant the
motion.
A case for Unlawful Detainer
is an action against one who unlawfully withholds possession after
the expiration or termination of his right to hold possession by virtue of any
contract, express or implied, brought within one year from the date of the last
demand.[12] From the allegations of the respondent, the
case for unlawful detainer is grounded on three acts of petitioner, i.e., using the premises as passageway, the
continued padlocking of the premises and non-turnover of keys.
In a contract of lease, the lessor
binds himself to give the enjoyment or use of a thing to the lessee for a price
certain, and for a period which may be definite or indefinite.[13] The lessor is obliged to deliver the thing
which is the object of the contract in such condition as to render it fit for
the use intended[14]
and upon its termination, the lessee shall return the thing just as he received
it, save what has been lost or impaired by the lapse of time, or by ordinary
wear and tear, or from an inevitable cause.[15]
The filing of the Formal Surrender
of Leased Premises and the actual emptying of the premises constitute
constructive delivery of possession. Hence, the contract of lease was terminated on
July 1, 1998 and it is incumbent upon petitioner, as lessee, to comply with its
obligation to return the thing leased to the lessor and vacate the premises.
However, petitioner failed to comply
with its obligation to return the premises to respondent. In order to return
the thing leased to the lessor, it is not enough that the lessee vacates it. It is necessary that he places the thing at
the disposal of the lessor, so that the latter can receive it without any
obstacle. He must return the keys and
leave no sub-lessees or other persons in the property; otherwise he shall
continue to be liable for rents.[16]
Petitioner’s constructive delivery of
the premises did not produce the effect of actual delivery to the respondent. To be effective, it is necessary that the
person to whom the delivery is made must be able to take control of it without
impediment especially from the person who supposedly made such delivery.[17] In the case at bar, records show that despite
the termination of the lease, respondent was never in possession of the
premises because it was padlocked.
Respondent was not given the key to the premises hence it was deprived
to use the same as it pleases.
Although the use of the premises as
passageway was justified, petitioner cannot deprive respondent the use of the said
premises by having it padlocked. Other
than simply repudiating the demand for back rentals, petitioner should have given
respondent a set of keys so it can enter the premises without exposing the
property to security risks. Prudence dictates the delivery of the keys to
respondent to dispel any doubt that petitioner is using the premises other than
as a mere passageway and that it has never withheld possession of the same to
the respondent. Petitioner had several opportunities to give respondent access
to the premises starting from the time it sent its first demand to pay back
rentals until the complaint for ejectment was filed but it never availed of
these opportunities.
From the foregoing, it is apparent
that petitioner’s constructive delivery did not effectively transfer possession
of the leased premises to respondent. From
the time the lease was terminated, petitioner unlawfully withheld possession of
the leased premises from respondent.[18] However,
it appears that petitioner had moved out from respondent’s building on March
12, 2004, as stated in its Manifestation[19] before Branch 25 of the
RTC-Manila. Respondent is entitled to a
reasonable compensation for petitioner’s continued occupancy of the premises
despite termination of the lease from July 1, 1998 to March 12, 2004.
Under Section
17, Rule 70 of the Rules of Court, the trial court may award reasonable
compensation for the use and occupation of the leased premises after the same
is duly proved. In Asian
Transmission Corporation v. Canlubang Sugar Estates,[20]
the Court ruled that the reasonable compensation contemplated under said Rule
partakes of the nature of actual damages based on the evidence adduced by the
parties. The Court also ruled that “fair rental value is defined as the
amount at which a willing lessee would pay and a willing lessor would receive
for the use of a certain property, neither being under compulsion and both
parties having a reasonable knowledge of all facts, such as the extent,
character and utility of the property, sales and holding prices of similar land
and the highest and best use of the property.”[21]
The reasonable compensation for the
leased premises fixed by the trial court based on the stipulated rent under the
lease contract which is P22,531.00, must be equitably reduced in view of
the circumstances attendant in the case at bar.
First, it should be noted that the premises was used only as a
means of passageway caused by respondent’s failure to provide sufficient
passageway towards the second floor unit it also occupies. Second, respondent was negligent because
it waited for more than a year before it actually demanded payment for back
rentals as reflected in its Statement of Accounts dated September 7, 1999. When
both parties to a transaction are mutually negligent in the performance of
their obligations, the fault of one cancels the negligence of the other and, as
in this case, their rights and obligations may be determined equitably under
the law proscribing unjust enrichment.[22] From the foregoing, we find the amount of P11,000.00
a month equitable and reasonable compensation for petitioner’s continued use of
the premises.
WHEREFORE, the
motion for reconsideration is GRANTED. The Decision dated January 22, 2007 is VACATED and a new judgment is entered REINSTATING and AFFIRMING the Decision of the Metropolitan Trial Court of Manila in
Civil Case No. 168628-CV with the MODIFICATION
that petitioner is ordered to PAY respondent
P11,000.00 a month from July 1,
1998 until March 12, 2004 as reasonable compensation for the use of the
premises.
SO ORDERED.
CONSUELO
YNARES-SANTIAGO
Associate Justice
WE CONCUR:
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
MINITA V. CHICO-NAZARIO ANTONIO
EDUARDO B. NACHURA
Associate Justice Associate Justice
RUBEN T. REYES
Associate Justice
ATTESTATION
I attest that the conclusions in the
above resolution were reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution and the Division Chairperson’s Attestation, it is hereby
certified that the conclusions in the above Resolution were reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO S. PUNO
Chief Justice
[1] Rollo, p. 286.
[2] Civil Case No. 154969-CV,
March 24, 1997.
[3] Civil Case No. 155083-CV,
April 8, 1997.
[4] Civil Case No. 155897-CV.
[5] Rollo, pp. 45-46.
[6] Id. at 47-48.
[7] Id. at 61-62.
[8] Without resolving the
motion to constitute passageway, the consolidated cases was elevated to the RTC
which affirmed the MTC Branch 26 ruling extending the lease but for a period of
five years and granted the motion to constitute passageway. However, the Court of Appeals, in its Decision
dated September 19, 2003, ruled in favor of YMCA and ordered RISC to vacate the
premises. On May 21, 2004, the Court of Appeals denied RISC’s motion for
reconsideration in accordance with its manifestation that it had completely
vacated the premises which rendered the case moot and academic.
[9] Civil Case No. 168628-CV.
[10] Rollo, pp. 78-82.
[11] Id. at 102-110.
[12] Rules of Court, Rule 70, Section 1.
[13] Civil Code, Article 1643.
[14] Civil Code, Article 1654 (1).
[15] Civil Code, Article 1665.
[16] Arturo M. Tolentino, vol.
2, © 1992, Central Professional Books, Inc., Quezon City, pp. 603-604.
[17] See A. A. Addison v.
Felix and Tioco, 38 Phil. 404, 408 (1918).
[18] See Josefa v. San
Buenaventura, G.R. No. 163429, March 3, 2006.
[19] Rollo, pp. 95-97, In its Manifestation before Branch 25 of the
RTC-Manila, petitioner stated that it had already surrendered all of the keys
to respondent’s lawyer on said date and has fully vacated both the ground floor
and second floor units of respondent’s building.
[20] G.R. No. 142383, August 29,
2003, 410 SCRA 202.
[21] Josefa v. San Buenaventura, supra.
[22] Rodzssen Supply Co.,
Inc. v. Far East Bank & Trust Co., 409 Phil. 706, 715 (2001).