Facts:

The case involves Ponciano L. Almeda as the petitioner and Alberto Figueroa, along with Deputy Sheriff Eustaquio Parada, as respondents. The events leading to the case began on February 2, 1970, when Almeda and Figueroa entered into a Contract of Lease for the ground floor of the Almeda Building No. 3 in Pasay City, which was to be used for a restaurant business. The lease was for five years at a monthly rental of P8,000.00. Subsequently, on April 10, 1970, they entered into another lease agreement for a 500-square-meter area at the back of the building for a kitchen, with a monthly rental of P2,500.00. Figueroa was responsible for constructing the kitchen at his own expense.

Over time, Figueroa made several improvements to the leased premises without Almeda's written consent, which was a violation of the lease agreement. Almeda filed a lawsuit on August 9, 1981, for the cancellation of the lease contract and damages, citing Figueroa's unauthorized improvements, de...

Facts:

Lease Contracts and Parties Involved

• On February 2, 1970, petitioner Ponciano L. Almeda and private respondent Alberto Figueroa entered into a Contract of Lease (Exhibit A) covering the “entire ground floor except lobby” of Almeda Building No. 3, located at the corner of Roxas Blvd. and San Luis Street, Pasay City.
• Under this contract, the property was leased for five years starting March 1, 1970 at a monthly rental of P8,000.00, with payment due on or before the 5th day of each month.
• The lease stipulated that the premises be used for a restaurant business, operation of coin-operated machines, and allied activities.

Additional Lease and Improvements

• On April 10, 1970, the parties executed another lease (Exhibit C) for 500 square meters of land at the rear of the building, for a period of ten years commencing April 1, 1970, with a monthly rental of P2,500.00.
• The contract provided that any building to be constructed on the 500 square meter lot was to be used exclusively as a kitchen, and that such construction was to be undertaken at the expense of the respondent.
• Respondent installed improvements including the construction of a kitchen facility and other enhancements to remedy the inadequacy of the building’s water supply and air-conditioning system, aimed at maintaining the restaurant’s patronage under the tradename “Wells Fargo Restaurant.”

Alleged Breaches and Initiation of Legal Action

• Petitioner filed an action for Cancellation of Lease Contract with Damages on August 9, 1981 in the Court of First Instance of Rizal, Branch XXII (Civil Case No. 15051).
• Petitioner’s allegations included:
• Unauthorized improvements and alterations made by respondent without petitioner’s written consent.
• Default in payment of lease rentals.
• Failure to maintain peace and order in the vicinity of the leased premises.
• Use of the annex building as a gambling casino.
• The Trial Court, under Judge Nicanor Sison, found the improvements and non-compliance with contractual terms sufficient grounds for cancellation of the lease contracts and ordered respondent to vacate the premises, pay attorney’s fees, and cover other court costs.

Remedial Orders and Subsequent Appeals

• The Trial Court ordered the execution of its judgment pending appeal, which respondent sought to annul via a petition for Certiorari (CA-G.R. No. SP-04756), which was dismissed by the Court of Appeals.
• An additional appeal (CA-G.R. No. 58726-R) by respondent was likewise dismissed for failure to file an appellant’s brief.
• Petitioner obtained an Alias Writ of Execution, implemented on July 28, 1976 by the respondent Sheriff, leading to possession being turned over to the petitioner.

Controversy Over the Removal of Improvements

• On August 5, 1976, respondent filed a Motion to enter the premises to remove personal items and movable articles that were left inside after padlocking by the Sheriff.
• Despite petitioner’s opposition, respondent Judge granted the motion on August 16, 1976.
• Petitioner later moved for reconsideration arguing that removal would leave the premises at risk and result in damages estimated at P331,000.00, but the motion was denied.
• An urgent motion was subsequently filed by petitioner to restrict the items subject to removal to those that did not constitute permanent improvements.
• After an ocular inspection on September 27, 1976, the trial court issued an Order allowing the removal of movable items, noting they “do not partake of the nature of permanent improvements.”
• Notably, the removal process left several items – a six-door freezer, a centralized air-conditioning unit with blowers, a water tank, and a water pump – in dispute later when a performance bond was required to cover potential repair costs due to damage from the removal.

Issues Raised on Appeal

• Petitioner challenged the Appellate Court’s decision, arguing that:
• Unauthorized improvements introduced without written consent should not be removable by the lessee, citing legal precedents.
• Even if removal were permissible, it should not be allowed when it would result in injury to the premises.
• The limitation of the respondent’s undertaking solely to the cost of repairing damage from the removal was insufficient because it excluded the cost of all unauthorized improvements.
• The controversy centered on the interpretation of contractual provisions (specifically Paragraphs 5 and 9 of the lease contracts) pertaining to the right of removal of improvements and the obligations of restoration.

Issue:

Is a lessee entitled to remove unauthorized improvements made without the lessor’s written consent?

• Should the fact that the improvements were introduced without prior consent preclude their removal?
• Does the contractual provision granting removal rights encompass improvements made in bad faith?

Can a lessee remove such improvements if their removal would cause injury or damage to the leased premises?

• What is the extent of the lessee’s right to remove improvements when their removal may result in harm to the premises?
• How does the court balance the interests of both parties regarding the integrity of the leased property?

Can the lessee’s undertaking be limited solely to the cost of repairing damage occasioned by the removal of the improvements?

• Is it proper to confine the performance bond requirement to the repair of damages caused by removal?
• Should additional costs or broader restoration obligations be imposed on the lessee?

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)