Case Digest (G.R. No. 95771)
Facts:
Lawrence Bowe and Cirilo Arbolario v. Honorable Court of Appeals, and Teodoro R. Garcia, represented by his son, Serafin M. Garcia, G.R. No. 95771, March 19, 1993, Supreme Court Second Division, Campos, Jr., J., writing for the Court.
Petitioners Lawrence Bowe and Cirilo (Carlos) Arbolario (substituting Laura Arbolario, deceased) were lessees under a written lease executed on June 27, 1979 by Luz Garcia (owner and lessor) covering a two‑storey, six‑door apartment at No. 2‑B Leo St., Lower Kalaklan, Olongapo City for a five‑year term from September 1, 1979 to September 1, 1984. The lease allowed subleasing and provided that yearly rental of P30,000.00 would commence after the lessor’s indebtedness to petitioners amounting to P75,000.00 was fully repaid out of rentals.
During the lease’s term, in October 1982 Teodoro R. Garcia (owner) and his son Serafin verbally agreed to sell the property to the Arbolarios for P220,000.00. Petitioners made installment payments beginning with a downpayment on August 18, 1982 and produced receipts (Exhs. 1–6) showing payments aggregating approximately P66,000.00 (one record states P66,600.00). Petitioners alleged the balance would be paid upon Teodoro Garcia’s return for execution of the deed of absolute sale. After petitioners’ last payment on December 22, 1983, the seller repudiated the deal by letter and, following expiration of the lease, Serafin Garcia sought an accounting; petitioners refused to vacate claiming ownership.
On September 1, 1984 Teodoro R. Garcia, represented by his son Serafin, filed suit in the Regional Trial Court (RTC) of Olongapo, Civil Case No. 451‑0‑84, for termination of the lease with damages and reimbursement of rents, alleging defendants’ refusal to vacate had caused actual and exemplary damages and prayed for termination, surrender of possession, reimbursement of rents, attorney’s fees and costs. Petitioners admitted the lease but claimed a consummated sale (or at least a binding contract to sell) and counterclaimed that they were ready to pay the balance of P153,400.00.
The RTC, in a decision dated December 17, 1987 (penalty and remedies detailed in its dispositive), pronounced termination of the lease, directed the defendants to vacate and to pay unpaid rentals and subsequent rents (holding there was an implied renewal at P30,000.00 annually through 1987 and P2,500.00 monthly thereafter), and awarded attorney’s fees; other claims were...(Subscriber-Only)
Issues:
- Was the RTC deprived of jurisdiction because the action was an ejectment or unlawful detainer exclusively cognizable by the inferior court?
- Did the verbal agreement and installment payments between petitioners and private respondent consummate a contract of sale that transferred title (thus terminating the lease), or was it merely a contract to sell/conditional sale?
- If the lease had expired, did the lessor’s conduct give rise to an implied re...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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