Case Summary (G.R. No. 181303)
Key Dates and Procedural Milestones
Lease term: 7 July 1995 to 7 July 1996.
Deposit paid by respondent: P16,000.
Respondent’s complaint filed: 10 May 1996.
Trial court decision: 28 March 2000 (award of actual damages and attorney’s fees).
Court of Appeals decision: 30 September 2003 (modified trial judgment to add moral and exemplary damages and costs).
Supreme Court disposition: petition denied; affirmed CA decision and resolution (G.R. No. 163280).
Applicable Law and Authorities
Constitutional framework: 1987 Philippine Constitution (applicable because decision date is 2010).
Relevant statutes and rules: Rules of Court, Rule 34, Section 1 (judgment on the pleadings); Rule 45 (petition for review on certiorari).
Civil Code provisions relied upon: Art. 1654 (lessor’s obligation to secure peaceful and adequate enjoyment), Art. 21 (willful injury to another), Art. 2219 and 2220 (moral damages and wilful injury to property; breaches attended by bad faith), Art. 2232 (exemplary damages in contracts/quasi‑contracts for wanton/fraudulent/reckless/oppressive acts), and Art. 2208 (circumstances permitting recovery of attorney’s fees).
Facts
Petitioner leased the entire ground floor to respondent for one year beginning 7 July 1995; the lease permitted use “as a dwelling or as lodging house.” Respondent accepted lodgers (mostly relatives) and received about P15,000 monthly from them. In March 1996 petitioner informed the lodgers they could stay only until 15 April 1996, after which the lodgings were vacated and petitioner padlocked the rooms. Respondent lost the lodgers’ income for April, May, and June 1996 (claimed P45,000) and incurred travel expenses for trips between Hongkong and the Philippines. Petitioner contended respondent violated the lease by subleasing and that, in any event, the lease expired 7 July 1996 and was not renewed; petitioner also moved to dismiss for failure to undergo barangay conciliation.
Procedural History
Petitioner moved during pre‑trial for judgment on the pleadings, asserting no dispute except contract interpretation; respondent did not object and the trial court directed submission of memoranda and treated the case as submitted for decision. The trial court ruled the complaint was not within barangay conciliation because respondent was a Hongkong resident, found petitioner had ejected the lodgers prior to lease expiration, and held that accepting lodgers was consistent with the lease terms. The trial court awarded P45,000 actual damages and P8,000 attorney’s fees. Both parties appealed; the Court of Appeals modified the trial court decision to award additional P50,000 moral damages, P50,000 exemplary damages, attorney’s fees, and costs. Petitioner sought review by the Supreme Court.
Issues Presented
Petitioner contended that: (1) the Court of Appeals erred in affirming the award of actual damages; (2) the Court of Appeals erred in modifying the trial court judgment by awarding moral and exemplary damages and costs; and (3) the Court of Appeals erred in affirming the award of attorney’s fees.
Supreme Court’s Legal Analysis — Judgment on the Pleadings
The Supreme Court held the case had been decided on the pleadings in accordance with Rule 34, Section 1, which permits judgment when an answer fails to tender an issue or admits the material allegations of the adverse party. Importantly, petitioner herself moved for judgment on the pleadings at pre‑trial and, with respondent’s conformity, effectively closed the case on the pleadings. The Court applied established doctrine that a party who moves for judgment on the pleadings without offering proof and without giving the opposing party an opportunity to introduce evidence is deemed to have admitted the material averments of the complaint and to have rested upon the pleadings. The Court cited prior authorities (including the Tropical Homes line and Rodriguez v. Llorente) to support that where a party assents to submission on pleadings, that party cannot later complain that damages were awarded on the basis of complaint allegations.
Supreme Court’s Analysis — Breach of Contract and Actual Damages
On the merits, the Court observed that the lease expressly permitted the lessee to use the premises as a lodging house, negating petitioner’s contention that accepting lodgers constituted an illicit sublease. The lease term ran until 7 July 1996; petitioner’s ejection of lodgers beginning in March 1996 and padlocking of rooms before the lease expired constituted a pre‑termination of the lease and a breach of petitioner’s obligation under Art. 1654 of the Civil Code to secure the lessee’s peaceful and adequate enjoyment for the contract duration. Because the petitioning lessor had asserted no contested facts at trial (having moved fo
...continue readingCase Syllabus (G.R. No. 181303)
The Case
- Petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure challenging (1) the 30 September 2003 Decision and (2) the 18 March 2004 Resolution of the Court of Appeals in CA‑G.R. CV No. 67836. [1][2][3]
- Petition filed by petitioner Doris U. Sunbanun assailing the Court of Appeals’ modification of the trial court’s judgment in favor of respondent Aurora B. Go, and the additional awards ordered by the Court of Appeals. [2][3]
Facts
- Petitioner is the owner of a residential house located at No. 68‑F Junquera Street, Cebu City.
- On 7 July 1995 respondent leased the entire ground floor of petitioner’s residential house for one year, the term to expire on 7 July 1996.
- As required by the lease contract, respondent paid a deposit of P16,000 as security for damages and unpaid rent.
- Respondent accepted lodgers, mostly relatives, to earn extra income; she received a monthly income from lodgers of P15,000.
- Respondent paid monthly rent under the lease until March 1996.
- In March 1996 petitioner drove away respondent’s lodgers by informing them they could stay only until 15 April 1996 because she was terminating the lease; the lodgers vacated by 15 April 1996 and petitioner padlocked the rooms they vacated.
- On 10 May 1996 respondent filed an action for damages, alleging loss of lodger income for April, May, and June 1996 totaling P45,000, and incurrence of plane fares and other travel expenses because respondent worked in Hongkong.
- Petitioner countered that respondent violated the lease by subleasing, that the lease was not renewed after 7 July 1996, and that respondent had no right to remain; petitioner also moved to dismiss for alleged failure to comply with prior barangay conciliation.
Trial Court Proceedings and Pre‑trial Events
- During pre‑trial petitioner moved for the case to be submitted for judgment on the pleadings, asserting that the only dispute was interpretation of the lease contract; respondent did not object. The trial court directed submission of memoranda and considered the case submitted for decision. [4]
- Petitioner also moved to dismiss for failure to comply with barangay conciliation; the trial court held the case was not covered by barangay conciliation since respondent was a resident of Hongkong.
- The trial court found petitioner did eject respondent’s lodgers in March 1996 despite the lease expiring on 7 July 1996, and held petitioner’s contention that subleasing violated the lease untenable.
- The lease contract provision allowing the lessee “to use the premises as a dwelling or as lodging house” was relied upon by the trial court to conclude respondent’s acceptance of lodgers was permitted by the contract.
- Trial court’s judgment (28 March 2000): ordered petitioner to pay respondent P45,000 actual damages for lost lodger income for April–June 1996 and attorney’s fees of P8,000. [4]
Court of Appeals’ Decision (30 September 2003)
- The Court of Appeals modified the trial court judgment and awarded, in favor of respondent:
- P45,000.00 as compensation for actual damages;
- P50,000.00 as moral damages;
- P50,000.00 as exemplary damages;
- P8,000.00 as attorney’s fees;
- Cost of suit.
- The Court of Appeals held petitioner’s forcible ejection of respondent’s lodgers three months prior to lease termination without valid reason constituted breach of contract and violated Article 1654 of the Civil Code (lessor’s obligation to maintain the lessee in peaceful and adequate enjoyment of the lease for the duration of the contract).
- The appellate court awarded P50,000 as moral damages for breach of contract and pre‑termination without valid reason, finding bad faith on petitioner’s part.
- The appellate court also awarded P50,000 as exemplary damages for petitioner’s oppressive act. [5]
Issues Presented by Petitioner
- Whether the Court of Appeals erred in affirming the award of actual damages by the trial court.
- Whether the Court of Appeals erred in modifying the trial court’s judgment to award moral and exemplary damages and costs of suit to respondent.
- Whether the Court of Appeals erred in affirming the award of attorney’s fees in favor of respondent. [6]
Supreme Court’s Resolution — Procedural and Evidentiary Posture
- The petition is denied; t