Case Summary (G.R. No. 106427)
Contractual Background
On June 2, 1986, Inter-Asia entered into a lease agreement with NAIAA, allowing them to operate parking lots 1 and 2 fronting the main airport building for four years, from July 14, 1986, until July 14, 1990, with an option for renewal at NAIAA's discretion. As the expiration date approached, NAIAA notified Inter-Asia of its plans for improvements to the passenger arrival area, including the construction of a multi-level parking facility, and subsequently expressed its intention not to renew the lease agreement.
Events Leading to Litigation
Inter-Asia alleged that NAIAA unlawfully occupied a portion of the leased premises in February 1990, and it articulated its concerns regarding the termination of the lease and eviction from the premises. Despite Inter-Asia's proposal to upgrade its facilities and a request to maintain the status quo during negotiations, NAIAA confirmed its plans to reclaim the parking areas and allowed Inter-Asia to extend its operations only to March 31, 1991. Following the expiration of these extensions, Inter-Asia filed a complaint seeking specific performance and damages as well as a writ of preliminary injunction on March 27, 1991.
Court Proceedings
The Regional Trial Court (RTC) issued a preliminary injunction on April 17, 1991, preventing NAIAA from evicting Inter-Asia and allowing the latter to continue operations. The court found considerable grounds for the case to be litigated and ruled that unilateral termination of a bilateral contract required judicial intervention. In response, NAIAA sought certiorari from the Court of Appeals, which subsequently issued a temporary restraining order and Writ of Preliminary Injunction that effectively granted NAIAA possession of the area.
Court of Appeals Ruling
The Court of Appeals ruled that the RTC overstepped its jurisdiction in granting the preliminary injunction, based on the finding that the lease had expired on July 14, 1990. The Court noted that, without a valid contract, Inter-Asia had no legitimate claim to continued possession of the leased premises. The extensions permitted by NAIAA could not be considered valid renewals of the lease agreement. The Court's decision concluded that Inter-Asia had not established a right that warranted protection.
Legal Analysis of Contractual Terms
The pertinent provisions of the lease contract indicated a determinate term, concluding on July 14, 1990, and stipulated conditions for revocation and possession. The Court interpreted that any informal verbal assurances given to Inter-Asia regarding a potential renewal were inadmissible under the parole evidence rule, thereby reinforcing that the terms of the written contract stand. The Court clarified that a renewal of a contract indicates the cessation of the old contract and the birth of a new one, whereas extensions merely prolong the existing contract’s term without creating a new contract.
Findings on the Petitioner's Claims
Inter-Asia's assertion of rights based on alleged verbal assurances of renewal was deemed insuf
...continue readingCase Syllabus (G.R. No. 106427)
Case Reference
- G.R. No. 106427
- Date of Decision: October 21, 1996
- Jurisdiction: Second Division of the Supreme Court of the Philippines
Background of the Case
- Petitioner: Inter-Asia Services Corp. (herein referred to as "Inter-Asia")
- Respondents: The Honorable Court of Appeals Special Fifteenth Division and Ninoy Aquino International Airport Authority (NAIAA)
- Nature of the Case: Petition for review on certiorari of the decision of the Court of Appeals reversing the orders of the Regional Trial Court of Makati.
Facts of the Case
- Inter-Asia and NAIAA entered into a lease contract on June 2, 1986, allowing Inter-Asia to operate parking lots 1 and 2 for four years, from July 14, 1986, to July 14, 1990, with the option for renewal at NAIAA's discretion.
- NAIAA notified Inter-Asia of plans to improve the passenger arrival area by constructing a multi-level parking facility, with initial notices given on February 26, 1990, and May 8, 1990.
- On June 7, 1990, NAIAA informed Inter-Asia of its decision not to renew the lease and advised it to wind up business operations.
- Inter-Asia proposed to upgrade its facilities and requested to maintain the status quo pending consideration of its proposal.
- NAIAA allowed operations to continue until January 31, 1991, and later until March 31, 1991.
- On March 27, 1991, Inter-Asia filed a complaint for specific performance and damages, seeking a preliminary injunction against NAIAA's plan to take over the premises.
- The Regional Trial Court issued a