Case Digest (A.C. No. 2984)
Facts:
In Jocelyn Modomo and Dr. Romy Modomo v. Spouses Moises P. Layug, Jr. and Felisarin E. Layug (G.R. No. 197722, August 14, 2019), the Spouses Layug, registered owners of the parcel of land at No. 1038 A.P. Reyes Street corner Cristobal Street, Barangay Tejeros, Makati City (TCT No. 208683), leased the premises to the Spouses Modomo under a Contract of Lease dated February 11, 2005. The lease provided for a monthly rental of Php170,000 subject to escalation (10% years 2–3, 15% years 4–5, 20% years 6–7) and required the lessee to pay real estate taxes. An Addendum dated February 11 and another dated February 15, 2005, stipulated the schedule of escalations and a proportional tax-sharing scheme (60%–75% lessee). Beginning in 2006, the Modomos defaulted on their escalation payments and advance rentals for 2008, and failed to pay their share of taxes. After several demand letters and a termination letter dated March 24, 2008, the Layugs filed an ejectment complaint before the MetropolCase Digest (A.C. No. 2984)
Facts:
- Parties and Property
- Petitioners: Jocelyn Modomo and Dr. Romy Modomo (Spouses Modomo)
- Respondents: Spouses Moises P. Layug, Jr. and Felisarin E. Layug (Spouses Layug)
- Subject: Parcel of land with improvements at No. 1038 A.P. Reyes St. corner Cristobal St., Barangay Tejeros, Makati City, TCT No. 208683
- Lease Agreement and Addenda
- Contract of Lease (Feb. 11, 2005): monthly rent PHP170,000; escalation 10% (years 2–3), 15% (years 4–5), 20% (years 6–7); lessee to pay real estate taxes
- First Addendum (Feb. 11, 2005): detailed rental schedule for entire 7-year term
- Second Addendum (Feb. 15, 2005): sharing of real estate taxes—lot (Lessor 40%/Lessee 60%) and building (Lessor 25%/Lessee 75%)
- Breach, Termination and Ejectment Proceedings
- Alleged Defaults: failure to pay rental escalations (2006–2008), 2008 advance rent, real estate taxes; termination letter (Mar. 24, 2008); demand to vacate
- Complaint for ejectment filed July 23, 2008 before MTC Makati, Branch 64
- Defendants’ Contentions
- Oral modification: reduced rent to PHP150,000; no escalation clause; no tax provision
- Estoppel in pais and novation prevented enforcement of original escalation and tax terms
- Counterclaim: reimbursement for improvements
- Lower Courts’ Decisions
- MeTC (July 20, 2009): ordered immediate surrender; awarded rental arrears PHP3,119,200; reasonable occupation fee PHP208,725/month; attorney’s fees PHP10,000; dismissed counterclaim
- RTC (Jan. 28, 2010): affirmed MeTC; applied parol evidence rule; denied motion for reconsideration (Apr. 6, 2010)
- CA (Mar. 22, 2011; Resolution July 20, 2011): denied petition; affirmed RTC with modification granting 12% interest on back rentals; clarified occupation fee runs until November 2009
Issues:
- Whether the rental-fee, escalation and real estate-tax provisions were partially novated by subsequent verbal agreement
- Whether estoppel in pais precludes Spouses Layug from denying the alleged partial novation
- Whether Spouses Modomo are entitled to reimbursement for useful improvements under Article 1678, Civil Code
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)