Case Digest (G.R. No. L-8110)
Facts:
Spouses Jaime and Matilde Poon leased their commercial building in Naga City to Prime Savings Bank, represented by the Philippine Deposit Insurance Corporation (PDIC) as statutory liquidator, under a ten-year written lease dated 3 November 1996 for monthly rent of P60,000 and P6,000,000 in advance covering the first 100 months. The Bangko Sentral ng Pilipinas (BSP) placed Prime Savings Bank under receivership in January 2000 and ordered its liquidation in April 2000; the bank vacated the premises on 12 May 2000, after which the PDIC demanded refund of P3,480,000 as unused advance rentals, suit followed, the Regional Trial Court ordered partial rescission and refund of P1,740,000, and the Court of Appeals affirmed.Issues:
- May Respondent be released from its contractual obligations on the ground of a fortuitous event under Article 1174 of the Civil Code or on the ground of an unforeseen event under Article 1267 of the Civil Code?
- Is the proviso in paragraph 24 of the Contract
Case Digest (G.R. No. L-8110)
Facts:
- Parties and contract formation
- Spouses Jaime and Matilde Poon owned a commercial building in Naga City then used for their bakery business.
- Prime Savings Bank (respondent) and Matilde Poon executed a ten-year Contract of Lease dated November 3, 1996 for the building to serve as the bank's branch in Naga City.
- The parties agreed to a fixed monthly rental of P60,000 and an advance payment of rentals for the first one hundred months in the amount of P6,000,000 to be applied immediately; remaining rentals were to be paid monthly.
- Contract clauses material to the dispute
- Paragraph 24 of the Contract provided that if the leased premises were closed, deserted or vacated by the lessee, the lessor could terminate and repossess the premises immediately and that "All advanced rentals shall be forfeited in favor of the LESSOR."
- Paragraph 5 of the Contract stipulated that should the leased property be foreclosed by a bank, "all unused rentals shall be returned by the LESSOR to the LESSEE."
- Banking regulatory action, surrender of premises, and demand for refund
- The Bangko Sentral ng Pilipinas (BSP) placed Prime Savings Bank under receivership by Monetary Board Resolution No. 22 dated January 7, 2000 citing inability to pay liabilities, insufficient realizable assets, risk of probable losses to depositors and creditors, and willful violation of cease and desist orders involving acts amounting to fraud or dissipation of assets.
- The BSP later ordered liquidation of the bank under Monetary Board Resolution No. 664 dated April 27, 2000.
- Prime Savings Bank vacated and surrendered the leased premises to petitioners on May 12, 2000.
- The Philippine Deposit Insurance Corporation (PDIC), as statutory receiver/liquidator, issued a demand letter to petitioners seeking return of the unused advance rentals amounting to P3,480,000, asserting that paragraph 24 was inoperative because the bank's closure constituted force majeure and alternatively invoking *rebus sic stantibus* under Article 1267 of the Civil Code.
- Petitioners refused the PDIC's demand and relied on paragraph 24 to retain the advance rentals.
- ...(Subscriber-Only)
Issues:
- Questions presented for resolution
- Whether respondent may be released from its contractual obligations to petitioners on grounds of fortuitous event under Article 1174 of the Civil Code and unforeseen event under Article 1267 of the Civil Code.
- Whether the proviso in the parties' Contract allowing forfeiture of advance rentals (Paragraph 24) constituted a penal clause....(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)