October 2010 - Philippine Supreme Court Resolutions
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[G.R. No. 191463 : October 04, 2010] BERNABE S. LIANG, PETITIONER -VERSUS- CHEVRON (PHILS.), INC., RESPONDENT. :
[G.R. No. 191463 : October 04, 2010]
BERNABE S. LIANG, PETITIONER -VERSUS- CHEVRON (PHILS.), INC., RESPONDENT.
Sirs/Mesdames:
Please take notice that the Court, Third Division, issued a Resolution dated 04 October 2010, which reads as follows:
G.R. No. 191463 - BERNABE S. LIANG, petitioner -versus- CHEVRON (PHILS.), INC., respondent.
R E S O L U T I O N
We resolve the Motion for Reconsideration dated June 9, 2010 filed by petitioner Bernabe S. Liang to set aside our Resolution of April 14, 2010 affirming the August 29, 2009 Decision of the Court of Appeals (CA) in CA-G.R. SP No. 101775.
The facts of this case are undisputed.
In 1993, Liang entered into a Retail Dealership and Retail Agreement (Agreement) with Caltex Philippines, Inc. (which later changed its name to Chevron Philippines, Inc.); he thus became a dealer of Caltex products and a lessee of a Caltex station. When the Agreement terminated on November 30, 1997, the parties executed a Land Lease Resume that extended the lease to May 26, 2000. But even after May 26, 2000, Caltex allowed Liang to continue occupying the leased premises.[1] However, on October 21, 2002, Caltex wrote Liang a letter terminating the Agreement as of November 30, 2002.[2]
On October 30, 2002, Caltex served the letter on Liang, who did not vacate the premises at the end of November 2002. Instead he tried to pay the rent for December 2002, but Caltex refused to accept it. On December 10, 2002 Liang filed a petition for consignation of rentals with the Metropolitan Trial Court (MTC). Caltex filed an answer, with a counterclaim for ejectment.[3]
In its Decision[4] of March 1, 2005, the MTC dismissed Liang's petition. It noted that a valid consignation requires that prior notice be given to the creditor and that Liang failed to comply with this requirement. More importantly, the consignation of the December 2002 rental payment was invalid because the month-to-month lease already expired on November 30, 2002 (the written lease contract had expired as early as May 26, 2000 and the parties failed to enter into another agreement; hence, the lease continued on a month to month basis). In accordance with Article 1669 of the Civil Code,[5] Caltex had the right to terminate the lease and eject the lessee at the end of each month.
The Regional Trial Court (RTC) and the CA affirmed the Decision of the MTC. The CA also found that Liang violated paragraph 22(1) of the Agreement; therefore, Caltex had the right to terminate the Agreement.[6] When an appeal was filed with us, we issued the assailed Resolution[7] of April 14, 2010 and denied the petition on the ground that (1) the petition lacked a proper verification and certification of non-forum shopping since there was no proper jurat showing that the affiant exhibited before the notary the identification document required by law; and (2) the petition lacked a valid affidavit of service since the affidavit of service attached in the petition was executed and notarized prior to the actual posting of the petition.
In his Motion for Reconsideration, petitioner alleges that what he presented before the notary public was his Postal Identification Card, not merely his community tax certificate (CTC), as reflected in the jurat. It was the notary public who inadvertently noted in the verification that the petitioner exhibited his CTC. The petitioner points out that the number appearing as his CTC number is actually the number of his Postal Identification Card, which is valid until June 11, 2013 - a fact that is noted in the jurat.[8] Regarding the defect in his affidavit of service, Liang asks us to overlook his procedural lapses in the interest of substantial justice.[9]
In the past, we relaxed the strict observance of procedural rules when the petitioner presented meritorious arguments clearly establishing his claims. Our review of the records, however, tells us that Liang failed to raise substantial arguments that would merit reconsideration.
In his petition, Liang argues that under Article 1687, in connection with Article 1670, of the Civil Code, he can petition to have the period of his lease extended by the trial court.
Nothing in Article 1687, however, compels the extension of the lease period in all cases when the parties fail to provide for a lease period and the lessee occupied the premises for over a year. In several cases,[12] we ruled that the power of the courts to fix a longer term for the lease is potestative or discretionary; "may" is the word used in the provision, leaving the court the discretion to grant an extension in accordance with the particular circumstances of each case. A longer term can be granted where equities demanding extension come into play, or the petition may be denied where none appears, giving due deference to the parties' freedom to contract.[13]
Thus, in Yek Seng Co, v. Court of Appeals,[14] the Court was unmoved by the fact that the lessee had paid rentals religiously during the past twenty years; had introduced improvements within the leased premises; and had allegedly met difficulties in looking for another place of business. Despite these justifications, the court nevertheless denied the requested extension of the lease. It wryly observed that the lessee, being engaged in business, should have taken the necessary precautions against being abruptly displaced due to the termination of the month-to-month lease. In Gindoy v. Tapucar,[15] the Court annulled the lower court's decision extending the lease period for seven years for lack of basis; it also noted that the lease period had already expired and the owner was unwilling to extend it.
In this case, the petition does not contain allegations and none was proven justifying the grant of an extended lease. The MTC, RTC and the CA significantly all found no equitable basis for an extension. The CA even found that that Liang violated paragraph 22(1) of the Agreement; therefore, Caltex had the right to terminate the Agreement.[16] Liang failed to controvert this finding.
While Article 1687 gives due consideration to a lessee's length of stay, the law is not so lopsided as to disregard altogether the lessor's right not to be deprived of possession of his property, especially where there appears no just reason to do so. Basic common law principle of fairness and equity shuns property entailment that borders on perpetuity to the exclusion of the owner.[17]
We also note that Liang's continuing possession of the leased premises from the supposed expiration of the lease on November 2002, or for a period of almost eight years, suffices as an extension of the lease period; we thus find no reason to further extend it. In Yek Seng Co,[18] we expressed our disapproval of the transparent gambit of many lessees who appeal their lost cause all the way to this Court in order to defer their deserved ejectment. They "buy time" and unjustly remain in possession of the leased property. We will not contribute to this practice by granting an undeserved lease extension.
Finally, we find Liang's insistence to consign his rentals to be baseless as he did so after the lease agreement had already terminated. He argues that even granting that the lease contract had already expired, he is nevertheless under the obligation to compensate the owner of the premises by paying a reasonable rental for his use and occupancy after the lease period lapsed.[19] Indeed, the MTC ordered him to pay the respondent the amount of P9,000 per month from December 2002 until he completely vacates the leased premises. This amount, however, did not represent rent due; it was compensation for actual damages for unlawfully depriving the respondent of its property. Such damages Liang cannot consign in the guise of rental payments.
WHEREFORE, premises considered, We hereby DENY the Motion for Reconsideration for lack of merit.
SO ORDERED.
G.R. No. 191463 - BERNABE S. LIANG, petitioner -versus- CHEVRON (PHILS.), INC., respondent.
We resolve the Motion for Reconsideration dated June 9, 2010 filed by petitioner Bernabe S. Liang to set aside our Resolution of April 14, 2010 affirming the August 29, 2009 Decision of the Court of Appeals (CA) in CA-G.R. SP No. 101775.
The facts of this case are undisputed.
In 1993, Liang entered into a Retail Dealership and Retail Agreement (Agreement) with Caltex Philippines, Inc. (which later changed its name to Chevron Philippines, Inc.); he thus became a dealer of Caltex products and a lessee of a Caltex station. When the Agreement terminated on November 30, 1997, the parties executed a Land Lease Resume that extended the lease to May 26, 2000. But even after May 26, 2000, Caltex allowed Liang to continue occupying the leased premises.[1] However, on October 21, 2002, Caltex wrote Liang a letter terminating the Agreement as of November 30, 2002.[2]
On October 30, 2002, Caltex served the letter on Liang, who did not vacate the premises at the end of November 2002. Instead he tried to pay the rent for December 2002, but Caltex refused to accept it. On December 10, 2002 Liang filed a petition for consignation of rentals with the Metropolitan Trial Court (MTC). Caltex filed an answer, with a counterclaim for ejectment.[3]
In its Decision[4] of March 1, 2005, the MTC dismissed Liang's petition. It noted that a valid consignation requires that prior notice be given to the creditor and that Liang failed to comply with this requirement. More importantly, the consignation of the December 2002 rental payment was invalid because the month-to-month lease already expired on November 30, 2002 (the written lease contract had expired as early as May 26, 2000 and the parties failed to enter into another agreement; hence, the lease continued on a month to month basis). In accordance with Article 1669 of the Civil Code,[5] Caltex had the right to terminate the lease and eject the lessee at the end of each month.
The Regional Trial Court (RTC) and the CA affirmed the Decision of the MTC. The CA also found that Liang violated paragraph 22(1) of the Agreement; therefore, Caltex had the right to terminate the Agreement.[6] When an appeal was filed with us, we issued the assailed Resolution[7] of April 14, 2010 and denied the petition on the ground that (1) the petition lacked a proper verification and certification of non-forum shopping since there was no proper jurat showing that the affiant exhibited before the notary the identification document required by law; and (2) the petition lacked a valid affidavit of service since the affidavit of service attached in the petition was executed and notarized prior to the actual posting of the petition.
In his Motion for Reconsideration, petitioner alleges that what he presented before the notary public was his Postal Identification Card, not merely his community tax certificate (CTC), as reflected in the jurat. It was the notary public who inadvertently noted in the verification that the petitioner exhibited his CTC. The petitioner points out that the number appearing as his CTC number is actually the number of his Postal Identification Card, which is valid until June 11, 2013 - a fact that is noted in the jurat.[8] Regarding the defect in his affidavit of service, Liang asks us to overlook his procedural lapses in the interest of substantial justice.[9]
In the past, we relaxed the strict observance of procedural rules when the petitioner presented meritorious arguments clearly establishing his claims. Our review of the records, however, tells us that Liang failed to raise substantial arguments that would merit reconsideration.
In his petition, Liang argues that under Article 1687, in connection with Article 1670, of the Civil Code, he can petition to have the period of his lease extended by the trial court.
Article 1670. If at the end of the contract the lessee should continue enjoying the thing leased for fifteen days with the acquiescence of the lessor, and unless a notice to the contrary by either party has previously been given, it is understood that there is an implied new lease, not for the period of the original contract, but for the time established in articles 1682 and 1687. The other terms of the original contract shall be revived.Undoubtedly, there have been cases where the courts fixed the lease period based on this provision. In Divino v. Marcos,[10] the Court extended the lease for two years where the leased property was rented for twenty years to the lessee who introduced improvements on the land and was assured by the owner that he could stay in the property for as so long as he paid rent. In another case, F.S. Divinagracia Agro-Commercial Inc. v. Court of Appeals,[11] the new owner of the leased property sought to evict the lessee, but the Court found it equitable to lengthen the period of lease to five years as the lessee and his father had occupied the leased premises for 76 years.
Article 1687. If the period for the lease has not been fixed, it is understood to be from year to year, if the rent agreed upon is annual; from month to month, if it is monthly; from week to week, if the rent is weekly; and from day to day, if the rent is to be paid daily. However, even though a monthly rent is paid, and no period for the lease has been set, the court may fix a longer term for the lease after the lessee has occupied the premises for over one year. If the rent is weekly, the courts may likewise determine a longer period after the lessee has been in possession for over six months. In case of daily rent, the courts may also fix a longer period after the lessee has stayed in the place for over one month.
Nothing in Article 1687, however, compels the extension of the lease period in all cases when the parties fail to provide for a lease period and the lessee occupied the premises for over a year. In several cases,[12] we ruled that the power of the courts to fix a longer term for the lease is potestative or discretionary; "may" is the word used in the provision, leaving the court the discretion to grant an extension in accordance with the particular circumstances of each case. A longer term can be granted where equities demanding extension come into play, or the petition may be denied where none appears, giving due deference to the parties' freedom to contract.[13]
Thus, in Yek Seng Co, v. Court of Appeals,[14] the Court was unmoved by the fact that the lessee had paid rentals religiously during the past twenty years; had introduced improvements within the leased premises; and had allegedly met difficulties in looking for another place of business. Despite these justifications, the court nevertheless denied the requested extension of the lease. It wryly observed that the lessee, being engaged in business, should have taken the necessary precautions against being abruptly displaced due to the termination of the month-to-month lease. In Gindoy v. Tapucar,[15] the Court annulled the lower court's decision extending the lease period for seven years for lack of basis; it also noted that the lease period had already expired and the owner was unwilling to extend it.
In this case, the petition does not contain allegations and none was proven justifying the grant of an extended lease. The MTC, RTC and the CA significantly all found no equitable basis for an extension. The CA even found that that Liang violated paragraph 22(1) of the Agreement; therefore, Caltex had the right to terminate the Agreement.[16] Liang failed to controvert this finding.
While Article 1687 gives due consideration to a lessee's length of stay, the law is not so lopsided as to disregard altogether the lessor's right not to be deprived of possession of his property, especially where there appears no just reason to do so. Basic common law principle of fairness and equity shuns property entailment that borders on perpetuity to the exclusion of the owner.[17]
We also note that Liang's continuing possession of the leased premises from the supposed expiration of the lease on November 2002, or for a period of almost eight years, suffices as an extension of the lease period; we thus find no reason to further extend it. In Yek Seng Co,[18] we expressed our disapproval of the transparent gambit of many lessees who appeal their lost cause all the way to this Court in order to defer their deserved ejectment. They "buy time" and unjustly remain in possession of the leased property. We will not contribute to this practice by granting an undeserved lease extension.
Finally, we find Liang's insistence to consign his rentals to be baseless as he did so after the lease agreement had already terminated. He argues that even granting that the lease contract had already expired, he is nevertheless under the obligation to compensate the owner of the premises by paying a reasonable rental for his use and occupancy after the lease period lapsed.[19] Indeed, the MTC ordered him to pay the respondent the amount of P9,000 per month from December 2002 until he completely vacates the leased premises. This amount, however, did not represent rent due; it was compensation for actual damages for unlawfully depriving the respondent of its property. Such damages Liang cannot consign in the guise of rental payments.
WHEREFORE, premises considered, We hereby DENY the Motion for Reconsideration for lack of merit.
SO ORDERED.
Very truly yours,
LUCITA ABJELINA-SORIANO
Clerk of Court
By:
(Sgd.) WILFREDO V. LAPITAN
Asst. Clerk of Court
LUCITA ABJELINA-SORIANO
Clerk of Court
By:
(Sgd.) WILFREDO V. LAPITAN
Asst. Clerk of Court
Endnotes:
[1] Rollo, p. 42.
[2] Id. at 42-43.
[3] Id. at 43.
[4] Id. at 52-58.
[5] Article 1669. If the lease was made for a determinate time, it ceases upon the day fixed, without need of a demand.
[6] Rollo, p. 47-48. The CA found that Liang failed to comply with his obligation to buy the products that it would sell in its gasoline station only from Caltex, in violation of Section 22 (1):
22. TERMINATION. Either party may at any time terminate this Agreement upon ninety (90) days written notice to the other. CALTEX may however terminate or cancel forthwith this Agreement effective upon written notice by the DEALER for violation of its terms and conditions. Including but not limited to the following:
1) In case DEALER buys, handles or sells petroleum products, tires, batteries, automotive accessories, home products, car, care line products, special and other products competing with those supplied by CALTEX or buys petroleum products from suppliers other than CALTEX.
[7] Id. at 79.
[8] Id. at 82-83.
[9] Id. at 83-85.
[10] 114 Phil. 140, 144 (1962).
[11] 191 Phil. 498, 502-503, 509 (1981).
[12] La Jolla Inc. v. Court of Appeals, 411 Phil 606, 614 (2001), Lo Chua v. Court of Appeals, 408 Phil 877, 893 (2001), Divino v. Marcos, supra note 10 and Acasio v. Corporation de los PP Dominicos de Filipinas, 100 Phil. 523, 528 (1956).
[13] Yap v. Court of Appeals, 406 Phil. 281, 290 (2001).
[14] G.R. No. 87415, January 23, 1992, 205 SCRA 305, 310.
[15] 166 Phil. 34, 45 (1977).
[16] Rollo, p. 48.
[17] Supra note 13, at 290.
[18] Supra note 14, at 212.
[19] Rollo, pp. 17-18.
