October 2009 - Philippine Supreme Court Decisions/Resolutions

Philippine Supreme Court Jurisprudence

G.R. No. 177809 - Spouses Omar and Moshiera Latip v. Rosalie Pala'a Chua

THIRD DIVISION

[G.R. NO. 177809 : October 16, 2009]

SPOUSES OMAR and MOSHIERA LATIP, Petitioners, v. ROSALIE PALA�A CHUA, Respondent.

D E C I S I O N

NACHURA, J.:

Challenged in this Petition for Review on Certiorari is the Court of Appeals (CA) Decision in CA-G.R. SP No. 89300:¹ (1) reversing the decision of the Regional Trial Court (RTC), Branch 274, Para�aque City in Civil Case No. 04-0052;² and (2) reinstating and affirming in toto the decision of the Metropolitan Trial Court (MeTC), Branch 78, of the same city in Civil Case No. 2001-315.³

First, we sift through the varying facts found by the different lower courts.

The facts parleyed by the MeTC show that respondent Rosalie Chua (Rosalie) is the owner of Roferxane Building, a commercial building, located at No. 158 Quirino Avenue corner Redemptorist Road, Barangay Baclaran, Para�aque City.

On July 6, 2001, Rosalie filed a complaint for unlawful detainer plus damages against petitioners, Spouses Omar and Moshiera Latip (Spouses Latip). Rosalie attached to the complaint a contract of lease over two cubicles in Roferxane Bldg., signed by Rosalie, as lessor, and by Spouses Latip, as lessees thereof.?r?l??

The contract of lease reads:

CONTRACT OF LEASE

KNOW ALL MEN BY THESE PRESENTS:

This Contract of Lease is entered into by and between:

ROSALIE PALA�A CHUA, Filipino, of legal age, married with office at 2/F JOFERXAN Building, F.B. Harrison St., Brgy. Baclaran, Para�aque City, and hereinafter referred to as the LESSOR,

- and -

OMAR LATIEF marriage to MOSHIERA LATIEF, also both Filipino, of legal age with address at 24 Anahan St. RGV Homes Para�aque City, and hereinafter referred to as the LESSEES.

W I T N E S S E T H

1. That the LESSOR is the owner of the commercial building erected at the lot of the Toribio G. Reyes Realty, Inc. situated at 158 Quirino Ave. corner Redemptorist Road, Barangay Baclaran in Para�aque Ctiy;

2. That LESSOR hereby leases two (2) cubicles located at the 1st & 2nd Floor, of said building with an area of 56 square meters under the following terms and conditions, to wit:

A. That the monthly rental of the two (2) cubicles in PESOS, SIXTY THOUSAND (P60,000.00), Philippine Currency. However, due to unstable power of the peso LESSEES agrees to a yearly increase of ten (10%) percent of the monthly rental;

b. That any rental in-arrears shall be paid before the expiration of the contract to the LESSOR;

c. That LESSEES agree to pay their own water and electric consumptions in the said premises;

d. That the LESSEES shall not sub-let or make any alteration in the cubicles without a written permission from the LESSOR. Provided, however, that at the termination of the Contract, the lessee shall return the two cubicles in its original conditions at their expenses;

e. That the LESSEES agree to keep the cubicles in a safe and sanitary conditions, and shall not keep any kinds of flammable or combustible materials.

f. That in case the LESSEES fail to pay the monthly rental every time it falls due or violate any of the above conditions shall be enough ground to terminate this Contract of Lease. Provided, further, that, if the LESSEES pre-terminate this Contract they shall pay the rentals for the unused month or period by way of liquidated damages in favor of the LESSOR.

3. That this Contract of Lease is for six (6) yrs. only starting from December _____, 1999 or up to December ______, 2005.

IN WITNESS WHEREOF, the parties have hereunto affixed their hands this ___th day of December, 1999 at City of Manila, Philippines.

(sgd.) ROSALIE PALA�A-CHUA L E S S O R

(sgd.) MOSHIERA LATIEF L E S S E E

(sgd.)
OMAR LATIEF
L E S S E E

SIGNED IN THE PRESENCE OF:

(sgd.) 1. Daisy C. Ramos

(sgd.) 2. Ferdinand C. Chua

Republic of the Philippines)
City of Manila)s.s.

A C K N O W L E D G M E N T

BEFORE ME, a Notary Public for and in the City of Manila personally appeared the following persons:

Rosalie P. Chua with CTC No. 05769706 at Para�aque City on 2/1/99; Moshiera Latief with CTC No. 12885654 at Para�aque City on 11/11/99; Omar Latief with CTC No. 12885653 Para�aque City on Nov. 11, 1999.

known to me and to me known to be the same persons who executed this instrument consisting of two (2) pages duly signed by them and the two (2) instrumental witnesses and acknowledged to me that the same is their free and voluntarily acts and deeds.

IN FAITH AND TESTIMONY WHEREOF, I have hereunto affixed my hand and Notarial Seal this ____th day of December, 1999 at the City of Manila, Philippines.

Doc. No. _____ Page No. _____ Book No. LXV Series of 1999

ATTY. CALIXTRO B. RAMOS NOTARY PUBLIC Until December 31, 2000 PTR # 374145-1/11/99/-Mla. IBP # 00262-Life Member4

A year after the commencement of the lease and with Spouses Latip already occupying the leased cubicles, Rosalie, through counsel, sent the spouses a letter demanding payment of back rentals and should they fail to do so, to vacate the leased cubicles. When Spouses Latip did not heed Rosalie's demand, she instituted the aforesaid complaint.

In their Answer, Spouses Latip refuted Rosalie's claims. They averred that the lease of the two (2) cubicles had already been paid in full as evidenced by receipts showing payment to Rosalie of the total amount of P2,570,000.00. The three (3) receipts, in Rosalie's handwriting, read:

1. I received the amount of P2,000,000.00 (two million pesos) from [O]mar Latip & Moshi[e]ra Latip for the payment of 2 cubicles located at 158 Quirino Ave. corner Redemptorist Rd.[,] Baclaran P[ara�]aque City. ROFERLAND⁵ Bldg. with the terms 6 yrs. Contract.

P2,000,000.00 CHECK # 3767924 FAR EAST BANK

(sgd.) ____________________ Rosalie Chua (sgd.) ____________________ Ferdinand Chua

2. Received cash
P500,000.00
From Moshiera Latip

12/10/99

(sgd.) Rosalie Chua ____________________ Received by

3. Received cash
P70,000.00 from
Moshiera Latip

12-11-99

(sgd.) ____________________ Received by:6

Spouses Latip asseverated that sometime in October 1999, Rosalie offered for sale lease rights over two (2) cubicles in Roferxane Bldg. Having in mind the brisk sale of goods during the Christmas season, they readily accepted Rosalie's offer to purchase lease rights in Roferxane Bldg., which was still under construction at the time. According to Spouses Latip, the immediate payment of P2,570,000.00 would be used to finish construction of the building giving them first priority in the occupation of the finished cubicles.

Thereafter, in December 1999, as soon as two (2) cubicles were finished, Spouses Latip occupied them without waiting for the completion of five (5) other stalls. Spouses Latip averred that the contract of lease they signed had been novated by their purchase of lease rights of the subject cubicles. Thus, they were surprised to receive a demand letter from Rosalie's counsel and the subsequent filing of a complaint against them.

The MeTC ruled in favor of Rosalie, viz.:

WHEREFORE, premises considered, the [Spouses Latip] and all persons claiming rights under them are hereby ordered to VACATE the property subject of this case located at the 1st and 2nd floors of a Roferxane Building situated at No. 158 Quirino Avenue corner Redemptorist Road, Barangay Baclaran, Para�aque City. The [Spouses Latip] are also ordered to PAY [Rosalie] the amount of SEVEN HUNDRED TWENTY THOUSAND PESOS (P720,000.00) as rent arrearages for the period of December 1999 to December 2000 and thereafter to PAY [Rosalie] the amount of SEVENTY TWO THOUSAND PESOS (P72,000.00) per month from January 2001 to December 2002, plus ten percent (10%) increase for each and every succeeding years thereafter as stipulated in paragraph 2(a) of the Contract of Lease x x x, until the [Spouses Latip] have completely vacated the leased premises subject of this lease. Finally[,] the [Spouses Latip] are hereby ordered to PAY [Rosalie] the amount of TWENTY THOUSAND PESOS (P20,000.00) as attorney's fees and TWO THOUSAND PESOS (P2,000.00) per [Rosalie's] appearance in Court as appearance fee and to PAY the cost of this suit.

[Spouses Latip's] counterclaim is hereby DISMISSED for lack of merit.

SO ORDERED.⁷

In stark contrast, the RTC reversed the MeTC and ruled in favor of Spouses Latip. The RTC did not give credence to the contract of lease, ruling that it was not notarized and, in all other substantial aspects, incomplete. Further on this point, the RTC noted that the contract of lease lacked: (1) the signature of Ferdinand Chua, Rosalie's husband; (2) the signatures of Spouses Latip on the first page thereof; (3) the specific dates for the term of the contract which only stated that the lease is for "six (6) y[ea]rs only starting from December 1999 or up to December 2005"; (4) the exact date of execution of the document, albeit the month of December and year 1999 are indicated therein; and (5) the provision for payment of deposit or advance rental which is supposedly uncommon in big commercial lease contracts.

The RTC believed the claim of Spouses Latip that the contract of lease was modified and supplemented; and the entire lease rentals for the two (2) cubicles for six (6) years had already been paid by Spouses Latip in the amount of P2,570,000.00. As to Rosalie's claim that her receipt of P2,570,000.00 was simply goodwill payment by prospective lessees to their lessor, and not payment for the purchase of lease rights, the RTC shot this down and pointed out that, apart from her bare allegations, Rosalie did not adduce evidence to substantiate this claim. On the whole, the RTC declared an existent lease between the parties for a period of six (6) years, and already fully paid for by Spouses Latip. Thus, Spouses Latip could not be ejected from the leased premises until expiration of the lease period.

The RTC disposed of the appeal, viz.:

WHEREFORE, all the foregoing considered, the appealed decision of the [MeTC] dated January 13, 2004 is reversed as judgment is hereby rendered for the [Spouses Latip] and against [Rosalie], ordering the latter to pay the former '

(1) the sum of PhP1,000,000.00 as moral damages;

(2) the sum of PhP500,000.00 as exemplary damages;

(3) the sum of PhP250,000.00 plus PhP3,000.00 per court appearance as and for attorney's fees; andcralawlibrary

(4) costs of suit.

SO ORDERED.⁸

In yet another turn of events, the CA, as previously mentioned, reversed the RTC and reinstated the decision of the MeTC. The CA ruled that the contract of lease, albeit lacking the signature of Ferdinand and not notarized, remained a complete and valid contract. As the MeTC had, the CA likewise found that the alleged defects in the contract of lease did not render the contract ineffective. On the issue of whether the amount of P2,570,000.00 merely constituted payment of goodwill money, the CA took judicial notice of this common practice in the area of Baclaran, especially around the Redemptorist Church. According to the appellate court, this judicial notice was bolstered by the Joint Sworn Declaration of the stallholders at Roferxane Bldg. that they all had paid goodwill money to Rosalie prior to occupying the stalls thereat. Thus, ruling on Rosalie's appeal, the CA disposed of the case:

WHEREFORE, in view of the foregoing, the Petition for Review is hereby GRANTED. The assailed decision of RTC Para�aque City Branch 274 dated September 24, 2004 is hereby REVERSED and SET ASIDE, and the January 13, 2004 decision of the MeTC is REINSTATED and AFFIRMED en toto.

SO ORDERED.⁹

Not surprisingly, Spouses Latip filed the present appeal.

The singular issue for our resolution is whether Spouses Latip should be ejected from the leased cubicles.

As previously adverted to, the CA, in ruling for Rosalie and upholding the ejectment of Spouses Latip, took judicial notice of the alleged practice of prospective lessees in the Baclaran area to pay goodwill money to the lessor.

We disagree.

Sections 1 and 2 of Rule 129 of the Rules of Court declare when the taking of judicial notice is mandatory or discretionary on the courts, thus:

SECTION 1. Judicial notice, when mandatory. - A court shall take judicial notice, without the introduction of evidence, of the existence and territorial extent of states, their political history, forms of government and symbols of nationality, the law of nations, the admiralty and maritime courts of the world and their seals, the political constitution and history of the Philippines, the official acts of the legislative, executive and judicial departments of the Philippines, the laws of nature, the measure of time, and the geographical divisions.

SEC. 2. Judicial notice, when discretionary. - A court may take judicial notice of matters which are of public knowledge, or are capable of unquestionable demonstration or ought to be known to judges because of their judicial functions.

On this point, State Prosecutors v. Muro¹⁰ is instructive:

I. The doctrine of judicial notice rests on the wisdom and discretion of the courts. The power to take judicial notice is to be exercised by courts with caution; care must be taken that the requisite notoriety exists; and every reasonable doubt on the subject should be promptly resolved in the negative.

Generally speaking, matters of judicial notice have three material requisites: (1) the matter must be one of common and general knowledge; (2) it must be well and authoritatively settled and not doubtful or uncertain; and (3) it must be known to be within the limits of the jurisdiction of the court. The principal guide in determining what facts may be assumed to be judicially known is that of notoriety. Hence, it can be said that judicial notice is limited to facts evidenced by public records and facts of general notoriety.

To say that a court will take judicial notice of a fact is merely another way of saying that the usual form of evidence will be dispensed with if knowledge of the fact can be otherwise acquired. This is because the court assumes that the matter is so notorious that it will not be disputed. But judicial notice is not judicial knowledge. The mere personal knowledge of the judge is not the judicial knowledge of the court, and he is not authorized to make his individual knowledge of a fact, not generally or professionally known, the basis of his action. Judicial cognizance is taken only of those matters which are "commonly" known.

Things of "common knowledge," of which courts take judicial notice, may be matters coming to the knowledge of men generally in the course of the ordinary experiences of life, or they may be matters which are generally accepted by mankind as true and are capable of ready and unquestioned demonstration. Thus, facts which are universally known, and which may be found in encyclopedias, dictionaries or other publications, are judicially noticed, provided they are of such universal notoriety and so generally understood that they may be regarded as forming part of the common knowledge of every person.¹¹

We reiterated the requisite of notoriety for the taking of judicial notice in the recent case of Expertravel & Tours, Inc. v. Court of Appeals,¹² which cited State Prosecutors:

Generally speaking, matters of judicial notice have three material requisites: (1) the matter must be one of common and general knowledge; (2) it must be well and authoritatively settled and not doubtful or uncertain; and (3) it must be known to be within the limits of the jurisdiction of the court. The principal guide in determining what facts may be assumed to be judicially known is that of notoriety. Hence, it can be said that judicial notice is limited to facts evidenced by public records and facts of general notoriety. Moreover, a judicially noticed fact must be one not subject to a reasonable dispute in that it is either: (1) generally known within the territorial jurisdiction of the trial court; or (2) capable of accurate and ready determination by resorting to sources whose accuracy cannot reasonably be questionable.

Things of "common knowledge," of which courts take judicial notice, may be matters coming to the knowledge of men generally in the course of the ordinary experiences of life, or they may be matters which are generally accepted by mankind as true and are capable of ready and unquestioned demonstration. Thus, facts which are universally known, and which may be found in encyclopedias, dictionaries or other publications, are judicially noticed, provided, they are such of universal notoriety and so generally understood that they may be regarded as forming part of the common knowledge of every person. As the common knowledge of man ranges far and wide, a wide variety of particular facts have been judicially noticed as being matters of common knowledge. But a court cannot take judicial notice of any fact which, in part, is dependent on the existence or non-existence of a fact of which the court has no constructive knowledge.???�r?bl?�

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