Case Digest (G.R. No. 177120)
Facts:
Paul T. Irao v. By the Bay, Inc., G.R. No. 177120, July 14, 2008, Supreme Court Second Division, Carpio Morales, J., writing for the Court.Petitioner Paul T. Irao sought review of the Court of Appeals decision ordering him to turn over possession of certain premises to respondent By the Bay, Inc. The petition was filed as a petition for review on certiorari (Rule 45) on May 15, 2007. Initially, by Resolution of February 20, 2008, the Court denied the petition for non‑compliance with an earlier directive to file a reply; petitioner thereafter filed an Urgent Omnibus Motion for reconsideration and prayed that his belated reply be admitted. The Court found counsel's excuse (an assigned lawyer's resignation and alleged failure to turn over files) "flimsy," but, because of conflicting findings in the lower courts and the petition's prima facie merit, the Court reconsidered, reinstated the petition, and admitted the belated reply.
On the merits, the facts begin with a lease executed in June 2002 between the Estate of Doña Trinidad de Leon Roxas (lessor, represented by Ruby Roxas) and By the Bay, Inc. (lessee) for a three‑storey building in Pasay City for five years (July 1, 2002–June 30, 2007). By the Bay ceased operations in November 2003 and defaulted on rentals; by January 2004 arrears, interest, and penalties amounted to Php2,517,333.36. The lessor's counsel sent a demand letter dated January 16, 2004, demanding payment within five days and warning that otherwise the lessor would "terminate your Contract of Lease and take the necessary legal measures against you to protect our client's interest, without further notice."
Section 31 of the original lease expressly empowered the lessor, after "due notice," to terminate and to take physical possession "without resorting to court action," and declared that acts taken by the lessor or its agents would be confirmed. On February 4, 2004 the lessor executed a lease over the same premises in favor of petitioner Irao effective February 1, 2004; paragraph 6 of that contract authorized petitioner to take necessary legal measures to eject the previous lessee. On February 6, 2004 petitioner entered and took possession of the premises.
Respondent filed a forcible entry complaint with the Metropolitan Trial Court (MeTC) of Pasay City, docketed Civil Case No. 89‑04 CFM, alleging the original lease had not been validly terminated and that petitioner’s entry was illegal. By Decision dated May 21, 2004, MeTC Branch 44 dismissed respondent's complaint. The Regional Trial Court (RTC) of Pasay City, Branch 108, affirmed the MeTC by Decision dated August 16, 2004. The Court of Appeals, however, by Decision dated February 22, 2006, granted respondent’s petition for revie...(Subscriber-Only)
Issues:
- Should the Court reconsider its February 20, 2008 Resolution denying the petition for non‑compliance and reinstate the petition and admit petitioner’s belated reply?
- Did the lessor’s January 16, 2004 demand letter contain a notice of termination and a demand to vacate sufficient to justify extrajudicial repossession under the lease’s Section 31, thereby making petitioner...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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