SPS. ERNESTO and MINA CATUNGAL, Petitioners, v. DORIS HAO, respondent.
D E C I S I O N
This is a petition for review of the Decision of the Court of Appeals dated 10 March 1998 and Resolution dated 30 July 1998 in the case entitled Doris Hao vs. Sps. Ernesto and Mina Catungal docketed as CA-G.R. SP No. 46158. Said decision affirmed with modification the judgment rendered by the Regional Trial Court.
The antecedents of this case are as follows:
On December 28, 1972, the original owner, Aniana Galang, leased a three-storey building situated at Quirino Avenue, Baclaran, Paraaque, Metro Manila, to the Bank of the Philippine Islands (BPI) for a period of about fifteen (15) years, to expire on June 20, 1986. During the existence of the lease, BPI subleased the ground floor of said building to respondent Doris Hao.
On August 24, 1984, Galang and respondent executed a contract of lease on the second and third floors of the building. The lease was for a term of four (4) years commencing on August 15, 1984 and ending on August 15, 1988. On August 15, 1986, petitioner spouses Ernesto and Mina Catungal bought the property from Aniana Galang.
Invoking her right of first refusal purportedly based on the lease contract between her and Aniana Galang, respondent filed a complaint for Annulment of Sale with Damages docketed as Civil Case No. 88-491 of the Regional Trial Court (RTC) of Makati, Metro Manila.
Meanwhile, the lease agreement between BPI and Galang expired.
Upon expiration of the lease agreements, petitioner spouses sent demand letters to respondent for her to vacate the building. The demand letters were unheeded by respondent causing petitioners to file two complaints for ejectment, docketed as Civil Cases Nos. 7666 and 7667 of the Metropolitan Trial Court (MeTC) of Paraaque, Metro Manila.
The institution of the ejectment cases prompted respondent to file an action for injunction docketed as Civil Case No. 90-758 of the RTC of Makati, to stop the MeTC of Paraaque from proceeding therewith pending the settlement of the issue of ownership raised in Civil Case No. 88-491. These two cases for annulment of sale and for injunction were also consolidated before Branch 63 of the RTC of Makati which rendered a Decision dated September 19, 1991, granting the injunction and annulling the contract of sale between Aniana Galang and petitioners.
On appeal, 1 the Court of Appeals reversed and set aside the decision of the RTC and the complaints in Civil Cases Nos. 88-491 and 90-758 were accordingly dismissed.
Not satisfied, respondent elevated the above decision of the CA before this Court. We, however, denied respondent's petition on April 10, 1996. 2cräläwvirtualibräry
The MeTC of Paraaque, after the reversal of the decision in Civil Case No. 90-758 for injunction, proceeded with the trial of the ejectment cases.
On January 22, 1997, the MeTC of Paraaque rendered a Decision, the dispositive portion of which reads:
In view of the foregoing, judgment is hereby rendered ordering the
defendant Doris T. Hao who is in actual possession of the property and all
persons claiming rights under her to vacate the premises in question and to pay
the plaintiffs the amount of
Petitioners filed a motion for clarificatory or amended judgment on the ground that although MeTC "ordered the defendant to vacate the entire subject property, it only awarded rent or compensation for the use of said property and attorney's fees for said ground floor and not the entire subject property. Compensation for the use of the subject property's second and third floors and attorney's fees as prayed for in Civil Case No. 7767 were not awarded." 4 In response to said motion, the MeTC issued an Order dated March 3, 1997, the dispositive portion of which reads:
In view of the foregoing, the Decision of this Court is hereby clarified in such a way that the dispositive portion would read as follows: in view of the foregoing, judgment is hereby rendered ordering the defendant Doris T. Hao who is in actual possession of the property and all persons claiming rights under her to vacate the premises and to pay the plaintiffs the amount of P8,000.00 a month in Civil Case No. 7666 for the use and occupancy of the first floor of the premises in question from June 28, 1998 until she finally vacates the premises and to pay the plaintiff a rental of P5,000.00 a month in Civil Case No. 7667 from June 28, 1988, until she finally vacates the premises and to pay attorneys fees of P20,000.00. With costs against defendant.
Petitioners sought reconsideration of the above order, praying that respondent be ordered to pay P20,000.00 monthly for the use and occupancy of the ground floor and P10,000.00 each monthly for the second and third floors.
Respondent, on the other hand, filed a notice of appeal.
Instead of resolving the motion for reconsideration, on May 7, 1997, the MeTC of Paraaque issued an Order, elevating the case to the Regional Trial Court:
Considering the Motion for Reconsideration of the Order of this Court dated March 3, 1997 and the Comment and Opposition thereto of the counsel for the defendant, the Court finds that the said Motion for Reconsideration should already be addressed to the Regional Trial Court considering that whatever disposition that this Court will award will still be subject to the appeal taken by the defendant and considering further that the supersedeas bond posted by the defendant covered the increased rental. 6cräläwvirtualibräry
On September 30, 1997, the RTC of Paraaque, Branch 259, rendered a Decision modifying that of the MeTC, the dispositive portion of which reads:
In the Light of the foregoing, the appealed decision, being in accordance with law, is hereby affirmed as to the order to vacate the property in question and modified as to the amount of rentals which is hereby increased to P20,000.00 a month for the ground floor starting June 28, 1988 and P10,000.00 a month for the second floor and also P10,000.00 a month for the third floor (or) a total of P40,000.00 monthly rentals commencing June 28, 1988 until the subject property has been vacated and possession thereof turner [sic] over to the plaintiffs-appellees; to pay attorneys fees in the amount of P20,000.00; and with costs.7cräläwvirtualibräry
In her Motion dated October 6, 1997, respondent sought a reconsideration of the above ruling of the RTC. The same was denied on November 25, 1997.
Respondent elevated her case to the Court of Appeals. The CA rendered the Decision subject of this petition the dispositive portion thereof reads:
Wherefore, the decision appealed from is hereby modified by reducing the amount of rentals for both the second and third floors from P20,000.00 to P10,000.00 monthly. With this modification, the judgment below is AFFIRMED in all other respects.8cräläwvirtualibräry
The parties filed their
respective motions for reconsideration to the Court of Appeals.
Petitioners asked that the decision of the
Regional Trial Court fixing the total monthly rentals at
In its Resolution dated 30 July 1998, the Court of Appeals resolved the parties motions for reconsideration in favor of the respondent. It ruled that the motion for reconsideration filed by the petitioners before the MeTC was a prohibited pleading under the Rules of Summary Procedure. Such being the case, said motion for reconsideration did not produce any legal effect and thus the amended judgment of the MeTC had become final and executory insofar as the petitioners are concerned. The dispositive portion of the CA's resolution reads as follows:
Wherefore, the decision appealed from is hereby MODIFIED by reducing the monthly rentals for the first/ground floor from P20,000.00 to P8,000.00 and for the second and third floors from P10,000.00 each to P5,000.00 for both floors. With this modification the judgment below is affirmed in all other respects.
No pronouncement as to costs.
Petitioners now come before this Court assigning the following errors:
IN THE ASSAILED DECISION, THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN REVERSING THE FINDINGS OF THE REGIONAL TRIAL COURT BY USING AS BASIS FOR REDUCING THE RENTAL ONLY THE EVIDENCE SUBMITTED BY THE PARTIES AND IGNORING CIRCUMSTANCES OF WHICH THE REGIONAL TRIAL COURT PROPERLY TOOK JUDICIAL NOTICE.
IN THE ASSAILED DECISION, THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN ITS FINDINGS THAT THE REGIONAL TRIAL COURT HAD NO JURISDICTION TO MODIFY THE APPEALED JUDGMENT BY INCREASING THE AWARD OF MONTHLY RENTALS FROM P13,000.00 TO P40,000.00.10cräläwvirtualibräry
We required respondent to comment on the petition. 11 In her Comment/Compliance, respondent contends that the petition should be dismissed and the resolution of the case should be based on the following issues:
1. DID THE RESPONDENT APPELLATE COURT COMMITTED [sic] ANY REVERSIBLE ERROR WHEN IT CONSIDERED PETITIONERS' "MOTION FOR RECONSIDERATION" (ANNEX "I" - PETITION) FILED WITH THE MTC-COURT AS A PROHIBITVE [sic] PLEADING IN A SUMMARY PROCEDURE CASE SUCH AS THE ONE AT BAR[?]
2. DID THE RESPONDENT APPELLATE COURT COMMITTED [sic] ANY REVERSIBLE ERROR WHEN IT RESOLVED TO RESTORE, REINSTATE, AFFIRM AND UPHOLD THE MTC - AMENDED JUDGMENT OF MARCH 3, 1997 FIXING THE TOTAL AWARD OF P13,000.00 GROUNDED ON A PROHIBITIVE [sic] PLEADING AND FAILURE TO FILE A NOTICE OF APPEAL[?]
3. DID THE APPELLATE COURT COMMITTED [sic] ANY REVERSIBLEERROR WHEN IT RESOLVED TO SUSTAIN RESPONDENT'S POSITION CONSISTENT WITH THE LAW AND JURISPRUDENCE THAT FOR PETITIONERS' FAILURE TO APPEAL AND HAVING FILED A PROHIBITIVE [sic] PLEADING, THEY CANNOT ASK FOR AFFIRMATIVE RELIEF SUCH AS INCREASE IN RENTAL[?]12cräläwvirtualibräry
There is no question that after the expiration of the lease contracts which respondent contracted with Aniana Galang and BPI, she lost her right to possess the property since, as early as the actual expiration date of the lease contract, petitioners were not negligent in enforcing their right of ownership over the property.
While respondent was finally evicted from the leased premises, the amount of monthly rentals which respondent should pay the petitioners as forced lessors of said property from 20 June 1988 (for the ground floor) and 15 August 1988 until 6 January 1998 (for the second and third floors), or a period of almost ten years remains to be resolved.
Petitioners, in the main,
posit that there should be a reinstatement of the decision of the regional
trial court which fixed the monthly rentals to be paid by herein respondent at
the total of
On the other hand,
respondent insists on the ruling of the Metropolitan Trial Court, which was
thereafter reinstated by the Court of Appeals in its 30 July 1998 Resolution,
that the monthly rental rates of only
At the outset, it should be recalled that there existed no consensual lessor-lessee relationship between the parties. At most, what we have is a forced lessor-lessee relationship inasmuch as the respondent, by way of detaining the property without the consent of herein petitioners, was in unlawful possession of the property belonging to petitioner spouses.
We cannot allow the
respondent to insist on the payment of a measly sum of
In ruling that the
increased rental rates of
While this Court is fully in agreement with the Court of Origin that plaintiffs-appellees have the better right to the possession of the premises in question being the present owners and the contract of lease between the former owner and herein defendant-appellant had already expired, the amount of rentals as laid down in the Clarificatory Order dated 3 March 1997 is inadequate, if not unreasonable.
The Court a quo misappreciated the nature of the property, its location and the business practice in the vicinity and indeed committed an error in fixing the amount of rentals in the aforementioned Order. Said premises is situated along Quirino Avenue, a main thoroughfare in Barangay Baclaran, Paraaque, Metro Manila, a fully developed commercial area and the place where the famous shrine of the Mother of Perpetual Help stands. Withal, devotees, traders, tourists and practically people from all walks of life visit said barangay making it suitable for commerce, not to mention thousand of residents therein. Needless to say, every square meter of said community is valuable for all kinds of business or commerce of man.
Further, considering that
the questioned property has three floors and strategically located along the
main road and consistent with the prevailing rental rates in said business area
which is between
Finally, worth mentioning here as parallel is [the] ruling of the Supreme Court in the case of Manila Bay Club Corporation vs. Court of Appeals, 245 SCRA 715 and 731-732 citing Licmay vs. Court of Appeals, 215 SCRA 1 (1992) and Commander Realty Inc. v. Court of Appeals, 168 SCRA 181. It reads as follows:
It is worth stressing at this juncture that the trial court had the authority to fix the reasonable value for the continued use and occupancy of the leased premises after the termination of the lease contract, and that it was not bound by the stipulated rental in the contract of lease since it is equally settled that upon termination or expiration of the Contract of Lease, the rental stipulated therein may no longer be the reasonable value for the use and occupation of the premises as a result or by reason of the change or rise in values. Moreover, the trial court can take judicial notice of the general increase in rentals of real estate especially of business establishments like the leased building owned by the private respondents.15cräläwvirtualibräry
We find that the RTC correctly applied and construed the legal concept of judicial notice in the case at bench. Judicial knowledge may be defined as the cognizance of certain facts which a judge under rules of legal procedure or otherwise may properly take or act upon without proof because they are already known to him, or is assumed to have, by virtue of his office. 16 Judicial cognizance is taken only of those matters that are commonly known. The power of taking 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. 17 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 jurisdiction of the court.
The RTC correctly took judicial notice of the nature of the leased property subject of the case at bench based on its location and the commercial viability. The above quoted assessment by the RTC of the Baclaran area, where the subject property is located, is fairly grounded.
Furthermore, the RTC also had factual basis in arriving at the said conclusion, the same being based on testimonies of witnesses, such as real estate broker Divina Roco and the petitioner Mina Catungal.
The RTC rightly modified the rental award from P13,000.00 to P40,000.00, considering that it is settled jurisprudence that courts may take judicial notice of the general increase in rentals of lease contract renewals much more with business establishments. Thus, We held in Manila Bay Club Corporation vs. Court of Appeals: 18cräläwvirtualibräry
It is worth stressing at this juncture that the trial court had the authority to fix the reasonable value for the continued use and occupancy of the leased premises after the termination of the lease contract, and that it was not bound by the stipulated rental in the contract of lease since it is equally settled that upon termination or expiration of the contract of lease, the rental stipulated therein may no longer be the reasonable value for the use and occupation of the premises as a result or by reason of the change or rise in values. Moreover, the trial court can take judicial notice of the general increase in rentals of real estate especially of business establishments like the leased building owned by the private respondent.19cräläwvirtualibräry
The increased award of rentals ruled by the RTC is reasonable given the circumstances of the case at bench. We note that respondent was able to deny petitioners the benefits, including possession, of their rightful ownership over the subject property for almost a decade.
The Court of Appeals failed to justify its reduction of the P40,000.00 fair rental value as determined by the RTC. Neither has respondent shown that the rental pegged by the RTC is exorbitant or unconscionable. This is because the burden of proof to show that the rental demanded is unconscionable or exorbitant rests upon private respondent as the lessee. 20 Here, respondent neither discharged this burden when she omitted to present any evidence at all on what she considers to be fair rental value, nor did she controvert the evidence submitted by petitioners by way of testimonies of the real estate broker and petitioner Mina Catungal. Thus, in Sia v. CA, we ruled:
xxx On the contrary, the records bear out that the P5,000.00 monthly rental is a reasonable amount, considering that the subject lot is prime commercial real property whose value has significantly increased and that P5,000.00 is within the range of prevailing rental rates in that vicinity. Moreover, petitioner has not proffered controverting evidence to support what he believes to be the fair rental value of the leased building since the burden of proof to show that the rental demanded is unconscionable or exorbitant rests upon the lessee. Thus, here and now we rule, as we did in the case of Manila Bay Club v. Court of Appeals, that petitioner having failed to prove its claim of excessive rentals, the valuation made by the Regional Trial Court, as affirmed by the respondent Court of Appeals, stands.21cräläwvirtualibräry
The Court of Appeals merely anchored its decision to reduce the P40,000.00 rental on procedural grounds. According to the Court of Appeals, the motion for reconsideration filed by petitioners before the MeTC is a prohibited pleading under the Rule on Summary Procedure and did not have any effect in stalling the running of the period to appeal the decision nor could it be considered as notice of appeal and consequently this affected the elevation of the case to the RTC. Not having appealed the case to the RTC, the amended judgment of the MeTC fixing the rental rate at P13,000.00 is final and executory as far as petitioners are concerned.
We disagree. A reading of the order issued by the MeTC will show that said court elevated the issue on the amount of rentals raised by the petitioner to the RTC because the appeal of respondent had already been perfected, thus:
Considering the Motion for Reconsideration of the Order of this Court dated March 3, 1997 and the Comment and Opposition thereto of the counsel for the defendant, the Court finds the said Motion for Reconsideration should already be addressed to the Regional Trial Court considering that whatever disposition that this Court will award will still be subject to the appeal taken by the defendant and considering further that the supersedeas bond posted by the defendant covered the increased rental.
In order that this case will be immediately forwarded to the Regional Trial Court in view of the appeal of the defendant, the Court deemed it wise not to act on the said motion for reconsideration and submit the matter to the Regional Trial Court who has the final say on whether the rental or the premises in question will be raised or not.
It will be to the advantage of both parties that this Court refrain from acting on the said Motion for Reconsideration so as to expedite the remanding (sic) of this Court to the Regional Trial Court.22cräläwvirtualibräry
When the MeTC referred petitioners motion to the RTC for its disposition, respondent could have opposed such irregularity in the proceeding.
This respondent failed to do. Before this Court, respondent now insists that the petition should be denied on the ground that the Motion for Reconsideration filed before the MeTC is a prohibited pleading and hence could not be treated as a notice of appeal. Respondent is precluded by estoppel from doing so. To grant respondents prayer will not only do injustice to the petitioners, but also it will make a mockery of the judicial process as it will result in the nullity of the entire proceedings already had on a mere technicality, a practice frowned upon by the Court. Our ruling in Martinez, et al. vs. De la Merced, et al. 23 is illustrative :
xxx In fine, these are acts amounting to a waiver of the irregularity of the proceedings. For it has been consistently held by this Court that while lack of jurisdiction may be assailed at any stage, a party's active participation in the proceedings before a court without jurisdiction will estop such party from assailing such lack of jurisdiction.
The Court of Appeals in the assailed Decision correctly observed that the peculiar circumstances attendant to the ejectment cases warrant departure from the presumption that a party who did not interject an appeal is satisfied with the adjudication made by the lower court:
As regard the issue on the propriety of the increase in the award of damages/rentals made by the RTC, the Court notes that, while respondent spouses did not formally appeal the decision in the ejectment cases, their motion for reconsideration assailing the clarificatory order reducing the award of damages/rentals was, by order of the MTC, referred to the RTC for appropriate action. Reason for such action is stated in the Order of May 7, 1997, thus:
x x x
Neither petitioner nor respondent spouses assailed the above order. In fact, in their appeal memorandum, respondent spouses reiterated their claim, first ventilated in their motion for reconsideration dated March 24, 1997, that the MTC grievously erred in finding that plaintiffs-appellees are only entitled to a meager monthly rental of P8,000.00 for the ground floor and P5,000.00 for the second and third floors.
Hence, while the entrenched procedure in this jurisdiction is that a party who has not himself appealed cannot obtain from the appellate court affirmative relief other than those granted in the decision of the lower court, the peculiar circumstances attendant to the ejectment cases warrant a departure therefrom. The rule is premised on the presumption that a party who did not interpose an appeal is satisfied with the adjudication made by the lower court. Respondent spouses, far from showing satisfaction with the clarificatory order of March 3, 1997, assailed it in their motion for reconsideration which, however, was referred to the RTC for appropriate action in view of the appeal taken by the petitioner. Clearly, the increase in the damages/rentals awarded by the MTC was an issue the RTC could validly resolve in the ejectment cases.24cräläwvirtualibräry
Respondent, argues that ejectment cases are tried under the Revised Rule on Summary Procedure, 25 hence, the motion for reconsideration filed by petitioner was a prohibited pleading and could not take the place of the required notice of appeal.
The argument by respondent is misleading. Simply because the case was one for ejectment does not automatically mean that the same was triable under the Rules of Summary Procedure. At the time of the filing of the complaint by petitioner in 1989, said Rules provide:
SECTION 1. SCOPE - THIS RULE SHALL GOVERN THE PROCEDURE IN THE METROPOLITAN TRIAL COURTS, THE MUNICIPAL CIRCUIT TRIAL COURTS IN THE FOLLOWING CASES:
A. CIVIL CASES:
(1) CASES OF FORCIBLE ENTRY AND UNLAWFUL DETAINER, EXCEPT WHERE THE QUESTION OF OWNERSHIP IS INVOLVED, OR WHERE THE DAMAGES OR UNPAID RENTALS SOUGHT TO BE RECOVERED BY THE PLAINTIFF EXCEED TWENTY THOUSAND PESOS (P20,000.00) AT THE TIME OF THE FILING OF COMPLAINT. x x x
In their complaint, petitioners prayed, among others, for rentals for the period covering June 1988 to April 1989, at a rate of P20,000.00 for the first floor alone, as well as P10,000.00 for attorney's fees. Clearly, considering the amount of rentals and damages claimed by petitioners, said case before the MeTC was not governed by the Rules on Summary Procedure. Said case was governed by the ordinary rules where the general proposition is that the filing of a motion for reconsideration of a final judgment is allowed. In the interest of substantial justice, in this particular case, we rule that the MeTC did not err in treating the motion for reconsideration filed by petitioner as a notice of appeal.
Finally, respondent questions why petitioners would want to reinstate the RTC decision when in fact they had already applied for a writ of execution of the 8 March 1997 Decision. Respondent is of the view that since petitioners had already moved for the execution of the decision awarding a smaller amount of damages or fair rental value, the same is inconsistent with a petition asking for a greater fair rental value and, therefore, a possible case of unjust enrichment in favor of the petitioners. We are not persuaded.
In order to avoid further injustice to a lawful possessor, an immediate execution of a judgment is mandated and the courts duty to order such execution is practically ministerial. 26 In City of Manila, et al. vs. CA, et al., 27 We held that Section 8 (now Section 19), Rule 70, on execution pending appeal, also applies even if the plaintiff-lessor appeals where, as in that case, judgment was rendered in favor of the lessor but it was not satisfied with the increased rentals granted by the trial court, hence the appeal xxx.
As above discussed, the petitioners have long been deprived of the exercise of their proprietary rights over the leased premises and the rightful amount of rentals at the rate of P40,000.00 a month. Consequently, petitioners are entitled to accrued monthly rentals of P27,000.00, which is the difference between P40,000.00 awarded by the Regional Trial Court and P13,000.00 awarded by the MeTC and affirmed by the Court of Appeals. Said amount of P27,000.00 should rightly be the subject of another writ of execution being distinct from the subject of the first writ of execution filed by petitioners.
The Court also awards interest in favor of petitioners. In Eastern Shipping Lines, Inc. vs. Court of Appeals, we gave the following guidelines in the award of interest:
II With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.
The back rentals in this case being equivalent to a loan or forbearance of money, the interest due thereon in twelve percent (12%) per annum from the time of extra-judicial demand on September 27, 1988.
WHEREFORE , premises considered, judgment is hereby rendered in favor of petitioners by reinstating the decision of the RTC, with modifications, and ordering respondent to further pay:
1. The sum of Twenty Seven Thousand Pesos (P27,000.00), corresponding to the difference between the P40,000.00 awarded by the Regional Trial Court and the P13,000.00 awarded by the Metropolitan Trial Court, as monthly arrears, computed from respondents unlawful detainer, 20 June 1988 (for the ground floor) and 15 August 1988 (for the second and third floors) of the subject property until the time she vacated the premises on 7 January 1998;
2. Legal interest of twelve percent (12%) per annum on the foregoing sum from the date of notice of demand on 27 September 1988 until fully paid;
3. The sum of Twenty Thousand Pesos (P20,000.00) as and for attorneys fees and;
4. The costs of suit.
Davide, Jr., C.J. (Chairman), Puno, Pardo, and Ynares-Santiago, JJ., concur.
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