Case Digest (G.R. No. 66394)
Facts:
Paradise Sauna, Massage Corporation and Juanito Uy v. Alejandro Ng and the Intermediate Appellate Court, G.R. No. 66394, February 05, 1990, the Supreme Court Third Division, Gutierrez, Jr., J., writing for the Court.
Petitioners are Paradise Sauna, Massage Corporation and its president Juanito Uy; private respondent is Alejandro Ng. The dispute arose from a December 30, 1975 letter signed by Uy appointing Ng "to MANAGE and ADMINISTER the PARADISE SAUNA and MASSAGE CORPORATION effective January 1, 1976" and setting out terms including monthly remittance of Eight Thousand Pesos (P8,000.00), payment of a Sixteen Thousand Peso (P16,000.00) guarantee bond, responsibility for utilities and permits, and broad control over the premises and operations. The letter was captioned and treated by the parties as an appointment; Ng operated the business beginning January 1, 1976.
Tensions developed over performance and payments. Ng alleged he paid P8,000 monthly as rent and performed as lessee would, paid permits and utilities, and deposited the P16,000 guarantee; he claimed petitioners terminated his appointment effective January 15, 1977, refused January 1977 rental, barred him from the premises (with the assistance of Metrocom soldiers), and replaced him—thereby breaching what he characterized as a lease. Ng filed suit in the Court of First Instance of Manila (Civil Case No. 106511) on January 21, 1977 for specific performance and damages, and on January 28, 1977 amended the complaint to one for breach of contract with damages, seeking injunctive relief and attorneys’ fees.
The petitioners answered, maintaining the instrument was a management contract (an employment/agency relationship) and that they validly terminated Ng for derelictions such as nonpayment of utility bills and alleged diversion of customers. After trial the Court of First Instance, Branch XII, on December 23, 1978 declared the contract a lease, ordered restoration of operation (for the unexpired term), ruled the P16,000 deposit not forfeited, directed accounting and return or payment for listed equipment, and awarded moral and exemplary damages (P50,000 each) and other relief while crediting defendants P28,572.45.
The then Intermediate Appellate Court (AC-GR CV No. 65264) affirmed the trial court in toto on November 29, 1983; the petitioners’ motion for reconsideration wa...(Pro-only)
Issues:
- Was the letter-contract between the parties a lease or a management (employment/agency) contract?
- Did Article 1367 of the New Civil Code bar the respondent from seeking reformation or challenging the written instrument after initially filing for specific performance?
- Could the corporate officer Juanito Uy be held personally liable despite corporate separateness?
- Were the awards of moral and exemplary damage...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)