G.R. No. 29832 - People vs. Asinas

In early 1992, Pryce Properties Corporation (PPC) proposed to Philippine Amusement and Gaming Corporation (PAGCOR) the establishment of a casino at Pryce Plaza Hotel in Cagayan de Oro City. PAGCOR conducted site visits and consultations with local officials, who indicated community support.
PPC submitted a counter-proposal on October 14, 1992. On November 11, 1992, the parties executed a three-year Contract of Lease (December 1, 1992 to November 30, 1995) covering the hotel ballroom; an addendum dated November 13, 1992 added 1,000 m² for personnel quarters and recreation.

Cagayan de Oro City passed Resolution No. 2295 (November 19, 1990) banning casinos, reaffirmed by Resolution No. 2673 (October 19, 1992). On December 7, 1992, Ordinance No. 3353 prohibited casino permits and revoked existing ones.
On December 18, 1992, hours before opening, residents and officials barricaded the hotel. Casino operations were suspended until December 20, 1992, when a mediated agreement was reached. Ordinance No. 3375-93 (January 4, 1993) further penalized casino operations.

PPC filed with PAGCOR’s intervention a petition for prohibition and injunction in CA G.R. SP No. 29851 challenging Ordinances Nos. 3353 and 3375-93. On March 31, 1993, the Court of Appeals declared both ordinances unconstitutional.
The City appealed; on July 20, 1994 the Supreme Court, En Banc, denied the petition in G.R. No. 111097, affirming the CA decision.

PAGCOR resumed casino operations on July 15, 1993, but faced renewed rallies and, on verbal advice from the Office of the President, indefinitely suspended operations prior to September 1993.
PPC billed PAGCOR for rentals due September–November 1993 (Statement of Accounts of September 1, 1993), and notified PAGCOR of its Board’s decision to collect full rentals if the lease were pre-terminated.
PAGCOR replied (September 20, 1993) refusing full payment due to “unforeseen legal circumstances” and formally requested refund of rental deposits and improvement expenses (October 12 and November 5, 1993).

PPC filed Civil Case No. 93-68266 (sum of money) on November 15, 1993; PAGCOR filed Civil Case No. 93-68337 (sum of money/reimbursement) on November 19, 1993.
PPC terminated the lease by letter dated November 25, 1993, citing Article XX(a) and (c) of the contract. The cases were consolidated; on August 17, 1995, the RTC ruled partly for each party. Both appealed.

Affirmed in Civil Case No. 93-68266: PAGCOR to pay PPC ₱687,289.50 actual damages (rentals for September–November 1993) plus 2% monthly interest from complaint filing and ₱50,000 attorney’s fees.
Reversed in Civil Case No. 93-68337: PPC to reimburse PAGCOR ₱687,289.50 deposits, to be compensated against the award in No. 93-68266.

Whether PPC is entitled to collect rentals for the unexpired term of the lease after terminating the contract.

Validity and binding effect of Sections 20(a) and 20(c) of the Contract of Lease regarding termination for cause and liability for remaining rentals.
Whether Article 1659 of the Civil Code supersedes those contract provisions once PPC “rescinded” the contract.
Applicability of Rios v. Jacinto Palma Enterprises and related precedents on limitation of damages to accrued rentals only.
Whether collection of future rentals would result in unjust enrichment.
Possibility of harmonizing Article 1659 and the contract’s termination clause.
Principle that statutory provisions presupposed by law are deemed incorporated in contracts.