Case Summary (G.R. No. 120554)
Petitioner
So Ping Bun, conducting business as Trendsetter Marketing, who secured new lease contracts with DCCSI over premises previously occupied by Tek Hua Enterprising Corp.
Respondents
- Court of Appeals (CA) – affirmed the trial court’s annulment of Trendsetter’s leases and upheld the injunction, modifying attorney’s fees.
- Tek Hua Enterprising Corp. – sought nullification of leases entered by petitioner and injunctive relief.
- Manuel C. Tiong – individually joined in the suit but the complaint against him was dismissed.
Key Dates
- 1963: Four one-year lease contracts between Tek Hua Trading Co. and DCCSI.
- 1976: Dissolution of Tek Hua Trading Co.; formation of Tek Hua Enterprising Corp.
- 1986: Death of So Pek Giok; So Ping Bun assumes occupation.
- Aug. 1, 1989 & Jan. 1, 1990 & Dec. 1, 1990: DCCSI proposes successive rent increases and sends new lease forms.
- Mar. 1, 1991: Tiong’s letter demanding vacation within 14 days.
- Mar. 4, 1992: So Ping Bun executes formal leases with DCCSI for Trendsetter.
- Apr. 20, 1992: Trial court renders judgment annulling new leases, granting permanent injunction, awarding attorney’s fees of ₱500,000.00.
- Oct. 10, 1994 & Jun. 5, 1995: CA affirms injunction and annulment; reduces attorney’s fees to ₱200,000.00.
- Sep. 21, 1999: Supreme Court decision under the 1987 Constitution.
Applicable Law
- 1987 Philippine Constitution – protection of property rights and due process.
- Civil Code, Article 1314 – liability of third person inducing breach of contract.
- Civil Code, Article 2208(2) – recovery of expenses to protect one’s interest, including attorney’s fees.
- Restatement (Second) of Torts, Section 822 – elements of interference with contractual relations.
- Jurisprudential criteria on tortious interference and reasonableness of attorney’s fees.
Facts
Tek Hua Trading Co. leased four warehouse premises from DCCSI beginning in 1963 on annual terms with a month-to-month holdover provision. After dissolution, its partners formed Tek Hua Enterprising Corp., which continued to occupy the premises. Following So Pek Giok’s death, his grandson So Ping Bun used the warehouses for Trendsetter Marketing. DCCSI repeatedly sought new leases with rent increases, which Tek Hua Enterprising Corp. did not execute but nonetheless maintained occupancy. In March 1991, Tiong demanded vacation; petitioner refused and, two days later, procured leases directly from DCCSI. Tek Hua Enterprising Corp. filed for injunction, nullification of the new leases, and damages.
Issues
- Whether petitioner committed tortious interference with Tek Hua Enterprising Corp.’s lease contracts.
- Whether attorney’s fees awarded (₱200,000.00) should be affirmed.
Discussion
- Tortious Interference
- Elements present: valid month-to-month lease rights of Tek Hua Enterprising Corp.; So Ping Bun’s knowledge thereof; and unjustified inducement of DCCSI to lease to Trendsetter.
- Absence of malice or wrongful motive precludes award of actual or exemplary damages but does not bar injunctive relief or annulment.
- Injunctive Relief and Annulment
- Permanent injunction and nullification of Trendset
Case Syllabus (G.R. No. 120554)
Facts
- In 1963 Tek Hua Trading Co., through its managing partner So Pek Giok, leased four adjacent warehouse premises on Soler Street, Binondo, Manila, from Dee C. Chuan & Sons Inc. (DCCSI), each for one-year terms with a month-to-month holdover provision.
- Upon expiration, Tek Hua Trading Co. continued occupancy without renewal, then dissolved in 1976; its original members, including Manuel C. Tiong, formed Tek Hua Enterprising Corp.
- So Pek Giok died in 1986; his grandson So Ping Bun then occupied and paid rent to DCCSI for his own textile venture, Trendsetter Marketing.
- DCCSI notified Tek Hua Enterprising Corp. in 1989–1990 of successive rent increases (25% reduced to 20%, then 30%) and furnished new lease forms, warning that non-execution would terminate the lease. Respondent corporation did not reply but the lease was not rescinded.
- On March 1, 1991, respondent Tiong demanded So Ping Bun vacate the warehouse within 14 days to protect Tek Hua Enterprising Corp.’s interest. So Ping Bun refused.
- On March 4, 1992, So Ping Bun procured formal lease contracts from DCCSI in favor of Trendsetter Marketing covering the same premises.
Procedural History
- Tek Hua Enterprising Corp. and Manuel C. Tiong filed an injunction suit, seeking nullification of the new leases and damages.
- The Regional Trial Court (Manila, Branch 35) granted: (1) annulment of the March 11, 1991 lease contracts between So Ping Bun/Trendsetter and DCCSI; (2) permanent injunction; (3) attorney’s fees of ₱500,000; (4) dismissal of respondent Tiong’s claims; (5) costs.
- On appeal, the Court of Appeals affirmed the injunction and n