Case Summary (G.R. No. 221062)
Key Dates and Applicable Law
The lease began February 10, 1994, extended June 5, 1996, and amended December 30, 1996. The Regional Trial Court (RTC) rendered its decision July 2, 2007; the Court of Appeals (CA) affirmed February 28, 2014; CA denied reconsideration October 1, 2015; Supreme Court decision October 5, 2016. The 1987 Philippine Constitution and the Rules of Court (Rules 22, 45, 141) govern procedural questions; the Civil Code governs lease obligations.
Lease Contract and Amendments
Under the 1994 contract, Rolando Ogsos, Sr. agreed to deliver 230 piculs (290.95 lkg.) of sugar annually as rent, renewable through crop year 2000–2001. Extension in 1996 extended the term to crop year 2003–2004 in consideration of improvements. An amendment in December 1996 converted rent to P150,000 cash per crop year from 1996–1997 onward.
Procedural History
In April 2000, petitioners sued for unpaid rentals from crop years 1994–1999; respondents defaulted and were declared in default by the RTC, later reinstated by CA. Respondents filed a counterclaim for lost profits from unlawful dispossession of the land and appropriation of sugarcane beginning December 1998. The RTC dismissed the complaint for lack of a certificate of non‐forum shopping but proceeded ex parte on the counterclaim.
RTC Decision on Counterclaim
On July 2, 2007, the RTC granted respondents’ counterclaim, awarding P10,391,981.76 as value of lost sugar and molasses (1,308.68 lkg. sugar and 30.409 tons molasses per year for six crop years), plus P500,000 moral damages, P100,000 exemplary damages, P100,000 attorney’s fees, P1,000 per appearance, and P50,000 costs.
Court of Appeals Ruling
The CA affirmed the RTC’s liability finding but deleted awards for moral and exemplary damages, attorney’s fees, and costs for lack of fraud or bad faith. It upheld that the counterclaim was compulsory, thus exempt from docket fees, and maintained the award of P10,391,981.76.
Timeliness of Motion for Reconsideration
Petitioners filed their motion for reconsideration on March 31, 2014. The CA held it late—due March 29, 2014—but failed to apply Rule 22, Section 1, which extends deadlines falling on non‐working days (Saturday) to the next working day. The motion was therefore timely and should have been resolved on the merits.
Characterization of Counterclaim and Docket Fees
Under Rule 141 and Supreme Court jurisprudence, only permissive counterclaims require docket fees; compulsory counterclaims do not. Applying the four‐factor test (same issues, res judicata, evidence overlap, logical relation), the Court concluded respondents’ claim for damages is permissive. Nevertheless, respondents’ good faith reliance on the lower courts’ rulings excuses delay in payment; the unpaid fees shall form a judgment lien under Rule
...continue readingCase Syllabus (G.R. No. 221062)
Facts
- February 10, 1994: Rolando Ogsos, Sr. and the heirs of Fermina Pepico, represented by Catalino V. Noel, entered into a lease covering five parcels (23 hectares) in Maaslum, Manjuyod, Negros Oriental.
- Lease rental was fixed at 230 piculs (290.95 lkg.) of centrifugal sugar per crop year from 1994–1995 to 2000–2001.
- June 5, 1996: Lease extended until end of crop year 2004 in view of improvements introduced by lessee.
- December 30, 1996: Lease amended to P150,000.00 cash per crop year beginning 1996–1997.
- Petitioners Elizabeth Sy-Vargas and Kathryn T. Sy (heirs of Fermina) alleged unpaid rentals for crop years 1994–1995 to 1998–1999 and filed suit on April 27, 2000, seeking specific performance and damages; lease rental for 1999–2000 was omitted as respondents had allegedly abandoned the premises.
- Respondent Rolando Ogsos, Jr. filed his answer only on December 17, 2002, more than two years after summons; petitioners secured a default order on March 7, 2003, later set aside by the Court of Appeals to allow respondents to be heard.
- Respondents counterclaimed, alleging unlawful dispossession by petitioners in December 1998, appropriation of sugarcane, loss of profits (average 1,308.68 lkg. sugar and 30.409 tons molasses per year), and consequent damages plus defense of unpaid loans incurred to pay for lease and living expenses.
Procedural History
- Civil Case No. 12708, RTC Dumaguete City, Branch 36: Petitioners’ complaint for unpaid rentals; respondents’ answer with counterclaim.
- Respondents’ petition for certiorari to CA (CA-G.R. SP No. 79463) granted; RTC ordered to admit respondents’ answer.
- June 6, 2005: Respondents moved to dismiss complaint for lack of Certificate of Non-Forum Shopping; RTC dismissed without prejudice.
- December 15, 2005–February 9, 2006: RTC set hearing on counterclaim after petitioners failed to comment; pre-trial scheduled; petitioners defaulted; RTC granted ex parte presentation of evidence on counterclaim (June 28, 2006).
- October 17, 2006: Petitioners moved to dismiss counterclaim as permissive and for unpaid docket fees; RTC denied on N