G.R. No. 117174 - Capitol Wireless, Inc. vs. Confesor

The plaintiff, Municipality of Moncada, leased certain fish ponds within its jurisdiction to the defendant, Pio Cajuigan, for the period from July 1, 1908, to June 30, 1909.
Under the contract, Cajuigan was obligated to pay a total rent of P3,710 in quarterly installments in advance.
The contract also included common conditions: timely payment of rent, imposition of penalties for late payment identical to those imposed on delinquent taxpayers, and forfeiture of the deposit if the lessee defaulted.
The bondsmen—Florentino Sugui, Juan Isla, and Antero Alegado—guaranteed not only the rental amount but also interest and penalties arising from any default.

The defendant failed to make the rental payments as scheduled.
Cajuigan requested and was granted extensions, first until October 1, 1908, and then until November 30, 1908, to cure his default.
A controversy arose when the defendant claimed to have tendered P1,855 on November 30, 1908, and again on December 2, 1908, to cover the outstanding rent.
The municipal treasurer, however, testified that no such payment was ever offered or received, a claim supported by the municipality’s documented position.

As a consequence of non-payment, the municipal council rescinded the lease on November 30, 1908.
Around December 6, 1908, municipality officials forcibly entered the property and ejected the defendant along with his tenants.
This forcible eviction gave rise to a legal action filed on February 15, 1910, to recover unpaid rent, penalties, legal interest, and costs.

The plaintiff produced exhibits and presented Aguedo Ibarra, the then municipal treasurer, who testified that during his term (1908 up to May 1909) the defendant never offered any payment despite multiple requests.
The defense called witnesses including Balbino Fabian (a subtenant) and Antero Alegado (one of the bondsmen), who testified that the defendant did attempt to pay on November 30 and December 2, though their account was in contradiction with the treasurer’s testimony.
The defendant’s own testimony asserted that apart from an initial deposit of P186, he had not paid any further amount under the lease agreement, emphasizing that the delay in payment was caused by the municipal treasurer’s refusal.

An error in the complaint’s printed version mistakenly indicated that the defendant had paid P1,484, whereas the original complaint stated that no payment was made.
Besides seeking rental arrears, the defendant’s cross-complaint alleged damages amounting to P9,800 for wrongful eviction and the appropriation of nets, corrals, and other accessories installed on the premises.
The lease stipulated that in case of default the municipality not only had the right to rescind the contract but also to impose penalties and confiscate the deposit as agreed by both parties.

Whether the defendant, Pio Cajuigan, tendered the payment of P1,855 as asserted by his own testimony and that of his witnesses, or whether he failed to pay as maintained by the municipal treasurer and the plaintiff.
Whether the failure to pay was due to the defendant’s negligence or whether the plaintiff’s actions (including the alleged refusal to accept the tendered money) contributed to the breach of the contract.
Whether the municipality’s method of rescinding the contract and the unilateral, forceful eviction constituted a lawful exercise of its rights under the lease or amounted to an illegal trespass upon the defendant’s possession.
Whether the defendant, and by extension his bondsmen, should be held liable for the unpaid rent along with penalties, interest, and costs, despite the contested sequence of events and evidence regarding the payment tender.
Whether the damages awarded on the cross-complaint for wrongful eviction and seizure of property (nets, corrals, and accessories) were appropriate given that the defendant continued to occupy the premises until a forcible ouster, and how the measure of damages should be calculated.