Case Summary (G.R. No. 174154)
Factual Background
Petitioner leased the Talisay Tourist Sports Complex from respondents for use as a cockpit. The original lease term was for two years and was subsequently renewed for four years. In accordance with the lease, petitioner deposited the equivalent of six months' rental, amounting to P500,000, as security for possible damages. The lease expired on May 8, 1998. A public bidding thereafter awarded the premises to a new lessee. Petitioner demanded return of the deposit by four written demands, all of which went unanswered by respondents.
Trial Court Proceedings
Petitioner filed a complaint for sum of money, damages, and attorney's fees before the Regional Trial Court, Cebu City. The RTC ruled for petitioner and ordered respondents to return the full deposit with legal interest at the rate of three percent per month from August 18, 1998 until full payment. The trial court did not allow respondents to deduct repair expenses, finding that the new lessee had underwritten repairs.
Court of Appeals Ruling
On appeal, the Court of Appeals reversed the RTC. The CA found that petitioner had continued to occupy and use the premises for two months after the lease expired and that, under Articles 1670 and 1687 of the Civil Code, respondents were entitled to assess rent for the extended occupancy. The CA relied particularly on the testimony of Ateniso Coronado, which it found credible and uncontroverted, and computed two months' rent at P195,833.34 based on the last monthly rent of P97,916.67.
Petition for Certiorari and Supreme Court Disposition on October 17, 2008
Petitioner filed a petition for review on certiorari under Rule 45, Rules of Court. On October 17, 2008, the Supreme Court partly granted the petition, reversed and set aside the Court of Appeals decision, and reinstated the RTC decision with modifications. The Court held that Talisay Tourist Sports Complex, Incorporated was solely liable to return the deposit after deducting two months' arrears in rentals, and fixed legal interest at six percent from October 21, 1998 and twelve percent after finality until full payment.
Parties' Contentions in Motions for Reconsideration
Petitioner filed a Partial Motion for Reconsideration denying that he overstayed for two months on the premises and contesting the deduction for two months' rent. Respondents filed a Motion for Reconsideration asserting that they had incurred repair expenses totaling P24,900 which should be deducted from the deposit, and praying that the Court reconsider and affirm the CA decision.
Supreme Court's Review of the Record and Evidentiary Findings
The Court observed that it ordinarily does not act as a trier of facts but, faced with conflicting findings between the RTC and the CA, reviewed the record to resolve whether petitioner was entitled to the deposit's return. The Court noted Ateniso Coronado's testimony that petitioner continued to hold cockfights for two months beyond the lease expiration and emphasized that petitioner did not question or deny that testimony at trial, on appeal, or in the memorandum filed with the Court. The Court quoted the CA's factual finding that the extended use in June and July 1998 justified assessment of rent for two months pursuant to Articles 1670 and 1687.
Law on Issues Raised on Appeal and Memoranda Requirement
The Court reiterated the settled rule that issues not raised below cannot be raised for the first time on appeal or on motion for reconsideration, as doing so would violate fair play and due process. The Court further reminded the parties of Supreme Court Administrative Matter No. 99-2-04-SC requiring submission of memoranda and warning that issues not raised in memoranda would be deemed waived or abandoned.
Respondents' Claim for Repair Expenses
The Court addressed respondents' claim for P24,900 in repair expenses and found no basis for reimbursement. The RTC had determined, and the CA affirmed, that t
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Case Syllabus (G.R. No. 174154)
Parties and Procedural Posture
- Jesus Cuenco was the petitioner who leased the Talisay Tourist Sports Complex for the operation of a cockpit.
- Talisay Tourist Sports Complex, Incorporated and Matias B. Aznar III were the respondents and lessors of the leased premises.
- The case reached the Supreme Court by a petition for review on certiorari under Rule 45, Rules of Court from a reversal by the Court of Appeals of the Regional Trial Court decision.
- The Supreme Court rendered a Decision dated October 17, 2008 partly granting the petition, reversing the Court of Appeals and reinstating the RTC Decision with modifications.
- Both parties filed motions for reconsideration, namely a Partial Motion for Reconsideration by Petitioner and a Motion for Reconsideration by Respondents, which this Resolution resolved.
Key Factual Allegations
- Petitioner leased the complex for an initial period of two years which was subsequently renewed for a period of four years.
- Petitioner gave Respondents a security deposit equivalent to six months' rental amounting to Five Hundred Thousand Pesos (P500,000.00).
- The lease expired on May 8, 1998 and a public bidding thereafter awarded the contract to a new lessee.
- Petitioner allegedly continued to hold cockfights for two months after expiration, as testified by witness Ateniso Coronado.
- Respondents claimed expenses for repairs amounting to Twenty-four Thousand Nine Hundred Pesos (P24,900.00) and sought deduction of that amount from the deposit.
Procedural History
- The RTC of Cebu City ruled in favor of Petitioner and directed Respondents to return the full deposit with interest at three percent per month from August 18, 1998.
- The Court of Appeals reversed the RTC decision and assessed two months' rentals against Petitioner for overstaying.
- Petitioner sought review by the Supreme Court via a petition under Rule 45, Rules of Court.
- The Supreme Court issued its Decision on October 17, 2008 partly granting the petition and modifying the relief ordered by the RTC.
- This Resolution of July 30, 2009 denied the parties' respective motions for reconsideration and affirmed the Supreme Court's October 17, 2008 Decision.
Issues Presented
- Whether Petitioner was entitled to the unconditional return of the security deposit after lease expiration.
- Whether Petitioner overstayed the leased premises for two months and therefore became liable for two months' arrears in rentals.
- Whether Respondents were entitled to deduct repair expenses of Twenty-four Thousand Nine Hundred Pesos (P24,900.00) from the deposit.
- Whether the Supreme Court should re-open factual determinations on motions for reconsideration.
Contentions
- Petitioner contended in his Partial Motion for Reconsideration that he did not overstay the leased premises for two months and that the deposit should be returned in full.
- Respondents contended in their Motion for Reconsideration that repair expens