G.R. No. 83551 - Albano vs. Reyes

Chua Seng (lessee) and Dra. Paz Baens (lessor) were bound by an oral lease contract for the disputed premises.
Chua Seng had occupied the premises since 1952, under a month-to-month arrangement with rentals paid monthly.

On October 5, 1975, Chua Seng left the premises for medical treatment, taking his clothes and some personal belongings while leaving behind his commercial store items, appliances, furniture, kitchen utensils, tools, memorabilia, and documents.
Prior to leaving, Chua Seng padlocked the steel door of the premises.
On October 6, 1975, upon returning with his brother-in-law Ong Hai, Chua Seng discovered that additional padlocks had been affixed by Dra. Baens.
A note from Dra. Baens (obtained from a neighbor, Mrs. Asuncion Lim) indicated her instruction to secure the premises to prevent loss or damage to items inside.

Chua Seng, Ong Hai, and their spouses sought a meeting with Dra. Baens at St. Paul Hospital; she refused to remove the padlocks.
Chua Seng’s lawyer, Atty. Mariano, sent a letter on November 17, 1975, which accompanied the tender of rentals for October and November by check, requesting the removal of the padlocks.
Dra. Baens’ lawyer, Atty. Guillermo Ilagan, replied on November 20, 1975, returning the check and demanding that Chua Seng remove his belongings within ten (10) days, alleging that his continued occupation deprived Dra. Baens of the property’s use.
A follow-up letter by Atty. Mariano was sent on November 25, 1975, insisting on the immediate removal of the padlocks, threatening legal measures if ignored.

Chua Seng filed Civil Case No. 007466-CV for forcible entry, alleging that Dra. Baens’ refusal to remove the padlocks breached the lease by depriving him of the right to occupy the premises.
In response, Dra. Baens filed an answer asserting that Chua Seng’s right to occupy had expired, that rental payments were overdue, and that he had voluntarily vacated the premises.
Additionally, on February 18, 1976, Dra. Baens initiated her own complaint for unlawful detainer with the City Court of Manila.

The City Court of Manila conducted a joint trial for the forcible entry and unlawful detainer cases and rendered a consolidated decision:

Ordered restoration of possession of the premises to Chua Seng.
Awarded a modest attorney’s fee (P1,000.00) to Chua Seng.
Dismissed the complaint for unlawful detainer and all other claims and counterclaims.

The decision restoring possession was affirmed.
The unlawful detainer complaint filed by Dra. Baens was dismissed.
The decision was reversed insofar as it had awarded only P1,000.00 for attorney’s fees; instead, a new award was set:

Chua Seng obtained an order for immediate execution pending appeal on November 20, 1979.
The petitioner (Dra. Baens) then appealed:

The Court of Appeals, on March 31, 1981, modified the award by reducing moral damages to P3,000.00, exemplary damages to P2,000.00, and attorney’s fees to P1,000.00.
The order granting immediate execution was annulled.
A motion for reconsideration was denied on May 26, 1981.

Dissatisfied, Dra. Baens filed a petition for certiorari before the Supreme Court.

The petitioner contended that the Court of Appeals erred by merely reducing the damages awarded to Chua Seng instead of eliminating them altogether in view of established precedents limiting recoverable damages in forcible entry and detainer cases.
It was argued that the damages under award (moral, exemplary, and actual) were not recoverable since they did not arise from the loss of use and occupation of the property.
The petitioner further maintained that the lease contract had expired given its month-to-month nature and that Presidential Decree No. 20 (and related statutory guidelines, including Batas Pambansa Blg. 25) did not apply due to the rental amount (P390.00 per month) exceeding the threshold of P300.00.

Whether the Court of Appeals committed a grave error of law in reducing, rather than eliminating, the damages awarded to Chua Seng, despite established jurisprudence (Reyes v. Court of Appeals and Torres v. Ocampo) limiting recoverable damages in forcible entry and detainer actions.

Whether the award of damages—specifically moral, exemplary, and actual damages—exceeded the compensatory purpose of recovery in cases of forcible entry, which is limited to losses arising from the inability to use and occupy the leased premises.

Whether the City Court’s and the Court of First Instance’s decisions in awarding damages, based on the facts of the forcible entry and unlawful detainer, were consistent with the legal provisions under Section 1 of Rule 70 and subsequent interpretations restricting damages to the value of the use and occupation of the property.

Whether the oral, month-to-month lease contract, and the subsequent actions by Dra. Baens, including the padlocking and assertion of termination, justified dismissal of her unlawful detainer complaint under Presidential Decree No. 20 and Batas Pambansa Blg. 25, given the rental amount exceeded the prescribed threshold.