Case Digest (G.R. No. L-44338)
Facts:
Plaintiff-appellee Rosario C. Buccat and defendant-appellant Librada Dispo, assisted by her husband Proceso Dispo, entered into a lease in February 1953 over a 542-square meter lot in Bo. Catbangon, San Fernando, La Union, originally expiring on August 31, 1967. Defendant-appellant constructed the National Business Institute on the leased land, and in August 1958 the parties executed a second lease that provided the lease would remain in force “as long as the land will serve the purpose” as a school site, with rentals reviewable every ten years.On May 3, 1968, Buccat filed unlawful detainer based on the supposed expiration of the first lease, asserting the second agreement was simulated and without consideration. The Court of Appeals upheld the second lease’s validity but construed its duration provision as leaving the period indefinite, and thus advised a case for fixing the term; following this, Buccat sued for Fixing of the Duration of the Period of a Contract (Art. 1197, C
Case Digest (G.R. No. L-44338)
Facts:
- Parties and subject matter of the controversy
- Plaintiff-appellee Rosario C. Buccat owned a parcel of land.
- Defendant-appellant Librada Rosales Dispo, assisted by her husband Proceso Dispo, entered into lease arrangements over the same parcel.
- The parcel had an area of 542 square meters and was located at Bo. Catbangon, San Fernando, La Union.
- First lease contract (February 1953) and its alleged expiration
- Sometime in February 1953, the parties entered into a contract of lease.
- The expiration date of the first lease contract was August 31, 1967.
- Under the first lease, defendant-appellant constructed the National Business Institute, a small vocational school on the leased parcel.
- Second lease contract (August 1958) and its duration clause
- In 1958, the parties entered into another lease agreement over the same parcel.
- The second agreement substantially modified the duration of the lease.
- The second lease contained Par. 3, which provided that:
- Unlawful detainer case and the second lease’s challenged validity
- On May 3, 1968, about eight months after the alleged expiration of the first contract, plaintiff-appellee filed a complaint for unlawful detainer against defendant-appellant.
- The unlawful detainer complaint was based on the alleged expiration of the first lease contract.
- Plaintiff-appellee claimed the second lease agreement was null and void for being simulated and for want of consideration.
- Plaintiff-appellee alleged that the second contract was executed only after defendant-appellant approached her and revealed difficulties securing official recognition by the government of the National Business Institute, if the first lease was not amended.
- Plaintiff-appellee consented to the amendment believing that it was void and that the first contract was binding.
- The unlawful detainer case reached the Court of Appeals.
- Court of Appeals decision in unlawful detainer and its advisory
- The Court of Appeals resolved the unlawful detainer case in favor of the validity of the second lease contract.
- The Court of Appeals interpreted Par. 3 as leaving the period of lease indefinite, based on the clause’s effect as one dependent on circumstances.
- Because of the indefinite period interpretation, the Court of Appeals suggested that plaintiff-appellee file an action to fix the period of the lease contained in the dispositive portion of its decision.
- The Court of Appeals’ dispositive portion affirmed the lower court’s dismissal “without prejudice to the filing of an appropriate action to fix the term of the lease.”
- Action for fixing duration of lease and trial court ruling
- Pursuant to the Court of Appeals decision, plaintiff-appellee filed a case for Fixing of the Duration of the Period of a Contract under Article 1197, Civil Code of the Philippines.
- The case was filed with the then Court of First Instance of La Union.
- The trial court rendered a decision fixing:
- The trial court held the parties to bear their own costs.
- Appeal to the Supreme Court and the assigned errors
- The trial court decision came to the Supreme Court on appeal as certified by the Court of Appeals because only questions of law were involved.
- Defendants-appellants assigned five errors:
Issues:
- Prescription of the action for fixing the period of the lease
- When did the cause of action accrue for purposes of prescription: in August 1958 when the second lease contract was executed, or in November 1972 when the Court of Appeals decision upholding validity of the second lease was promulgated?
- Propriety of judgment on the pleadings
- Whether the trial court erred in rendering judgment on the pleadings and thereby precluding defendants from adducing evidence on issues allegedly not admitted or not covered by the stipulation of facts.
- Nature of defendant’s business
- Whether the trial court erred in finding that defendant’s business consisted in maintaining and managing a relatively small vocational institute without reception of evidence.
- Interpretation of Par. 3 of the second lease agreement and the fixing of duration
- Whether the trial court erred in interpreting the lease as one without a period or as a lease whose period was ...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)