Case Digest (G.R. No. 240984)
Facts:
On June 4, 1998, Domestic Petroleum Retailer Corporation (DPRC) and Manila International Airport Authority (MIAA) executed a Contract of Lease covering a 1,631.12-sqm parcel of land and a 630.88-sqm building on Domestic Road, Pasay City, with monthly rentals of ₱75,357.74 for land and ₱33,310.46 for the building. Without prior notice or hearing, MIAA issued Resolution No. 98-30 effective June 1, 1998, increasing rental rates. DPRC protested by letter on December 8, 1998, but paid under protest ₱628,895.43 on December 11, 1998, to avoid breach. Following the Supreme Court’s December 1, 2004 invalidation of Resolution Nos. 98-30 and 99-11 in Manila International Airport Authority v. Airspan Corporation, DPRC ceased paying the increased rates as of January 1, 2006 and reverted to the contract rates, resulting in an alleged overpayment totaling ₱9,593,179.87 from December 11, 1998 to December 5, 2005. MIAA ignored DPRC’s written demand on July 27, 2006 and a final demand on NovemberCase Digest (G.R. No. 240984)
Facts:
- Background of the Lease Contract
- On June 4, 1998, Domestic Petroleum Retailer Corporation (DPRC) and Manila International Airport Authority (MIAA) entered into a Contract of Lease covering a 1,631.12 sqm parcel of land and a 630.88 sqm building at Domestic Road, Pasay City. DPRC agreed to pay monthly rentals of ₱75,357.74 (land) and ₱33,310.46 (building).
- On April 2, 1998, MIAA adopted Resolution No. 98-30 (effective June 1, 1998) via Administrative Order No. 1, Series of 1998, increasing rentals without prior notice or hearing.
- Payment under Protest and Judicial Nullification
- On November 19, 1998, MIAA demanded ₱655,031.13 (with 2% monthly interest), later recomputed to ₱628,895.43. DPRC protested in writing on December 8, 1998 but paid ₱628,895.43 under protest on December 11, 1998.
- On December 1, 2004, the Supreme Court in G.R. No. 157581 (Airspan) nullified Resolution No. 98-30 for lack of notice and hearing. Thereafter, DPRC ceased paying the increased rates as of January 1, 2006, continuing only the original rental. DPRC’s total “overpayment” from December 11, 1998 to December 5, 2005 amounted to ₱9,593,179.87.
- Procedural History
- On December 23, 2008, DPRC filed a Complaint for Collection of Sums of Money (RTC No. R-PSY-08-08963) claiming ₱9,593,179.87 plus interest and attorney’s fees.
- The RTC, Branch 119, Pasay City, rendered decision on August 15, 2011, awarding the full amount of ₱9,593,179.87 plus 12% per annum legal interest from extrajudicial demand (July 27, 2006), attorney’s fees, and costs. Clarified by Order on November 17, 2011.
- On appeal, the Court of Appeals (Special Second Division) issued its Decision on May 31, 2013, affirming the RTC with modification: MIAA’s liability reduced to ₱3,839,643.05 (payments from January 9, 2003 to December 5, 2005) plus 12% interest, applying a six-year prescription under quasi-contract (solutio indebiti). A subsequent Resolution on November 29, 2013 denied DPRC’s motion for partial reconsideration.
- DPRC filed a Petition for Review on Certiorari under Rule 45; MIAA filed Comment; DPRC filed Reply.
Issues:
- Whether the Court of Appeals correctly applied:
- The six-year prescriptive period under the quasi-contract of solutio indebiti to DPRC’s claim.
- The doctrine of solutio indebiti at all, given the existence of a binding lease contract and the nature of DPRC’s payments.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)