Case Summary (G.R. No. 164845)
Facts of the Case
• June 23, 1982: Lagon bought the subject lots from Sepi’s heirs.
• Lapuz claims that under a lease contract he built commercial buildings on those lots, remitted rents to Sepi’s estate, and continued possession post-Sepi’s death.
• Lapuz alleged Lagon, knowing of the lease, induced the heirs to sell and then collected rentals, thereby ousting him.
• Lagon countered that no subsisting lease encumbered the title; he made due inquiry (including consulting Atty. Fajardo and examining registry records) and found no evidence of a valid lease renewal.
Procedural History
• RTC Sultan Kudarat: Found the 1974 lease authentic; awarded Lapuz rentals (Oct 1978–Oct 1984), interest, multiple categories of damages (moral, exemplary, temperate, nominal), attorney’s fees, litigation expenses, and injunctive relief; dismissed Lagon’s counterclaim.
• CA (Jan 31, 1995): Deleted most damage awards, reduced attorney’s fees to ₱30,000, ordered Lagon to pay actual damages (net rentals), and affirmed other RTC findings.
• Lagon filed a petition for review on certiorari before the Supreme Court.
Applicable Law
• 1987 Philippine Constitution (civil-procedure and property rights clauses)
• Article 1314, New Civil Code (tortious interference with contractual relations)
• Civil Code provisions on lease registration (Art. 1648)
• Rules on evidence regarding notarized documents
Issue
Whether Lagon’s purchase and subsequent rent collection amounted to tortious interference with Lapuz’s alleged leasehold rights, rendering him liable for damages.
Elements of Tortious Interference
As established in So Ping Bun v. Court of Appeals:
(a) Existence of a valid contract;
(b) Knowledge by the third party of the contract; and
(c) Unjustified interference or wrongful motive.
Analysis
Existence of a Valid Lease
– Lapuz presented a notarized copy of the purported 1974 lease renewal.
– Notarization establishes due execution but not veracity of contents.
– The trial court deemed the document authentic, giving it prima facie effect until rebutted by clear, strong, and convincing evidence.Knowledge of the Lease
– Lagon maintained he had no actual knowledge and that nothing in the title or registry suggested an encumbrance.
– His personal inquiry, including consultation with the notary of record and registry examination, yielded no evidence of a valid lease.
– The Court found he lacked the requisite awareness that would compel a diligent third party to inquire further.Wrongful Interference or Malice
– Even assuming Lagon knew of the lease, interference requires absence of legal justification or the presence of malice.
– Motivation by a proper business interest—acquisition of property for economic gain—without proof of impious or malicious intent, is a permissible justification.
– Lapuz failed to prove Lagon induced the heirs by persuasion or coercion, or acted in bad faith.Damage Claims and Attorney’s Fees
– Moral, exemplary, temperate, nominal, and litigation-expense awards were unwarranted in the
Case Syllabus (G.R. No. 164845)
Facts
- On June 23, 1982, petitioner Jose V. Lagon purchased two parcels of land in Tacurong, Sultan Kudarat, from the estate of the late Bai Tonina Sepi through intestate proceedings.
- Private respondent Menandro V. Lapuz had leased three parcels of land from Bai Tonina Sepi since 1964 under a contract providing that he would erect commercial buildings and use their rentals to pay his rent obligations.
- The original lease expired in 1974 but was allegedly renewed; upon Bai Tonina Sepi’s death, Lapuz remitted rent to the estate’s court‐appointed administrator.
- The administrator later advised Lapuz to cease collecting rentals; Lapuz then learned that petitioner, representing himself as the new owner, was collecting those same rentals from tenants.
- Lapuz filed a complaint in the Regional Trial Court (RTC) for tortuous interference with his leasehold rights, accusing petitioner of inducing Bai Tonina Sepi’s heirs to sell and thereby violating Lapuz’s contract.
Procedural History
- RTC, July 29, 1986 decision:
- Declared the November 6, 1974 lease renewal (Doc. No. 619, Book II, Series 1974) authentic, valid and binding from November 1, 1974 to October 31, 1984.
- Declared Lapuz owner of the commercial buildings and entitled to possession and rental collection for that period.
- Ordered petitioner to pay:
• Rentals from October 1, 1978 to October 31, 1984, P506,850.56 plus 12% interest;
• Moral damages P1,062,500; actual damages P312,500; exemplary damages P187,500; temperate damages P62,500; nominal damages P62,500; attorney’s fees P125,000; litigation expenses P62,500; interest on these sums totaling P900,000 at 12% until full payment; - Restored Lapuz to possession for seventy‐three months with a P700 monthly rental obligation by Lapuz to petitioner as an alternative;
- Dismissed petitioner’s counterclaim; awarded costs against petitioner.
- Court of Appeals, January 31, 1995 decision:
- Deleted awards for moral, compensatory, exemplary, temperate and nominal damages, and litigation expenses;
- Reduced attorney’s fees award from P125,000 to P30,000;
- Affirmed: validity of the lease (paragraph 1), Lapuz’s possession rights (2), rental award (5), dismissing counterclaim (6);
- Ordered petitioner to pay actual damages of P178,425 (rentals collected October 1978–August 1983 less P42,700 representing re