Torts Second Sem

8/22/2019 Torts Second Sem

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Republic of the Philippines

Supreme CourtManila

FIRST DIVISION

Leonides C. Dio,Petitioner,

G.R. No. 145871

Present:

PANGANIBAN, C.J.

- versus - (Chairperson)YNARES-SANTIAGO,AUSTRIA-MARTINEZ,

CALLEJO, SR., and

CHICO-NAZARIO, JJ.

Lina Jardines, Promulgated:

Respondent. January 31, 2006x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

This resolves the petition for review on certiorari seeking to set aside the

Decision[1]of the Court of Appeals (CA) dated June 9, 2000 dismissing the appeal in CA-

G.R. CV No. 56118 and the Resolution dated October 25, 2000 denying the motion forreconsideration.

The antecedent facts are as follows.
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On December 14, 1992, Leonides C. Dio (petitioner) filed a Petition for

Consolidation of Ownership with the Regional Trial Court of Baguio City, Branch 7

(RTC). She alleged that: on January 31, 1987, Lina Jardines (respondent) executed in her

favor a Deed of Sale withPacto de Retro over a parcel of land with improvements

thereon covered by Tax Declaration No. 44250, the consideration for which amountedto P165,000.00; it was stipulated in the deed that the period for redemption would expire

in six months or on July 29, 1987; such period expired but neither respondent nor any of

her legal representatives were able to redeem or repurchase the subject property; as a

consequence, absolute ownership over the property has been consolidated in favor of

petitioner.[2]

Respondent countered in her Answer that: the Deed of Sale withPacto de

Retro did not embody the real intention of the parties; the transaction actually enteredinto by the parties was one of simple loan and the Deed of Sale with Pacto de Retro was

executed just as a security for the loan; the amount borrowed by respondent during the

first week of January 1987 was only P50,000.00 with monthly interest of 9% to be paid

within a period of six months, but since said amount was insufficient to buy construction

materials for the house she was then building, she again borrowed an additional amount

of P30,000.00; it was never the intention of respondent to sell her property to petitioner;

the value of respondents residential house alone is over a million pesos and if the value

of the lot is added, it would be around one and a half million pesos; it is unthinkable that

respondent would sell her property worth one and a half million pesos foronly P165,000.00; respondent has even paid a total of P55,000.00 out of the amount

borrowed and she is willing to settle the unpaid amount, but petitioner insisted on

appropriating the property of respondent which she put up as collateral for the loan;

respondent has been the one paying for the realty taxes on the subject property; and due

to the malicious suit filed by petitioner, respondent suffered moral damages.

On September 14, 1993, petitioner filed an Amended Complaint adding allegations

that she suffered actual and moral damages. Thus, she prayed that she be declared the

absolute owner of the property and/or that respondent be ordered to pay her P165,000.00plus the agreed monthly interest of 10%; moral and exemplary damages, attorneys fees

and expenses of litigation.

Respondent then filed her Answer to the Amended Complaint reiterating the

allegations in her Answer but increasing the alleged valuation of the subject property to

more than two million pesos.
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After trial, the RTC rendered its Decision dated November 20, 1996

the dispositive portion of which reads as follows:

WHEREFORE, in view of all the foregoing, judgment is hereby rendered asfollows:

a) Declaring the contract (Exh. A) entered into by the contending parties as one of

deed of sale with right to repurchase or pacto de retro sale;

b) Declaring the plaintiff Dio to have acquired whatever rights Jardines has over

the parcel of land involved it being that Jardines has no torrens title yet over said land;

c) Declaring the plaintiff Dio the owner of the residential house and other

improvements standing on the parcel of land in question;

d) Ordering the consolidation of ownership of Dio over the residential house and

other improvements, and over the rights, she (Dio) acquired over the parcel of land in

question; and ordering the corresponding government official (The City Assessor)of Baguio City to undertake the consolidation by putting in the name of plaintiff Dio the

ownership and/or rights which she acquired from the defendantJardines in the

corresponding document (Tax Declarations) on file in his/her office; after the plaintiff has

complied with all the requirements and has paid the fees necessary or incident to theissuance of a new tax declaration as required by law;

e) Ordering the cancellation of Tax Declaration 44250;

f) Ordering defendant Jardines to pay actual and/or compensatory damages to the

plaintiff as follows:

1) P3,000.00 representing expenses in going to and from Jardines place to collect

the redemption money;

2) P1,000.00 times the number of times Dio came to Baguio to attend the hearing

of the case as evidenced by the signatures of Dio appearing on the minutes of

the proceedings found in the Rollo of the case;

3) P10,000.00 attorneys fee.

Costs against defendant Jardines.

SO ORDERED.[3]


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Respondent then appealed to the CA which reversed the RTC judgment. The CA

held that the true nature of the contract between herein parties is one of equitable

mortgage, as shown by the fact that (a) respondent is still in actual physical possession of

the property; (b) respondent is the one paying the real property taxes on the property; and(c) the amount of the supposed sale price, P165,000.00, earns monthly

interest. The dispositive portion of the CA Decision promulgated on June 9, 2000 reads:

WHEREFORE, foregoing premises considered, we find that the Regional TrialCourt, First Judicial Region, Branch 07, Baguio City, committed reversible errors in

rendering its decision dated 20 November 1996 in Civil Case No. 2669-R,

entitled Leonides G. Dio, etc. vs. Lina Jardines. The appeal at bar is

herby GRANTED and the assailed decision is hereby REVERSED and SET

ASIDE. Let a new judgment be entered as follows:

1. Declaring that the true nature of the contract entered into by the contendingparties as one of equitable mortgage and not apacto de retro sale;

2. Ordering the defendant-appellant to pay plaintiff-appellee legal interest on theamount of P165,000.00 from July 29, 1987, the time the said interest fell due, until fully

paid;

3. No pronouncement as to cost.

SO ORDERED.[4]

Petitioner moved for reconsideration of said decision, but the same was denied per

Resolution dated October 25, 2000.

Hence, herein petition for review on certiorari alleging that:

1. THE LOWER COURT COMMITTED AN ERROR IN DECLARING THATTHE TRUE NATURE OF THE CONTRACT ENTERED INTO BY THE PARTIES AS

ONE EQUITABLE MORTGAGE AND NOT A PACTO DE RETRO SALE;

2. THE LOWER COURT COMMITTED AN ERROR IN ORDERING THERESPONDENT TO PAY PETITIONER LEGAL INTEREST DESPITE THE

CONFLICTING ADMISSIONS OF THE PARTIES THAT THE AGREED INTERESTS

WAS EITHER 9% OR 10%;

3. THE FINDINGS OF FACTS OF THE LOWER COURT ARE CONTRARY TO

EVIDENCE AND THE ADMISSIONS OF THE PARTIES;


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4. THE LOWER COURT COMMITTED AN ERROR IN GOING BEYOND THE

ISSUES OF THE CASE BY DELETING THE AWARD FOR DAMAGES DESPITETHE FACT THAT THE SAME WAS NOT RAISED AS AN ISSUE IN THE

APPEAL;[5]

The petition lacks merit.

The Court finds the allegations of petitioner that the findings of fact of the CA are

contrary to evidence and admissions of the parties and that it erred in declaring the

contract between the parties as an equitable mortgage to be absolutely unfounded.

A close examination of the records of this case reveals that the findings of fact of

the CA are all based on documentary evidence and on admissions and stipulation of facts

made by the parties. The CAs finding that there was no gross inadequacy of the price of

respondents residential house as stated in the contract, was based on respondents own

evidence, Tax Declaration No. 44250, which stated that the actual market value of subject

residential house in 1986 was only P93,080.00. The fact that respondent has remained in

actual physical possession of the property in question, and that respondent has been the

one paying the real property taxes on the subject property was established by the

admission made by petitioner during the pre-trial conference and embodied in the Pre-

Trial Order[6]dated May 25, 1994. The finding that the purchase price in the amount

of P165,000.00 earns monthly interest was based on petitioners own testimony and

admission in herappellees brief that the amount of P165,000.00, if not paid on July 29

1987, shall bear an interest of 10% per month.

The Court sees no reversible error with the foregoing findings of fact made by the

CA. The CA correctly ruled that the true nature of the contract entered into by herein

parties was one of equitable mortgage.
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Article 1602 of the Civil Code enumerates the instances when a purportedpacto de

retro sale may be considered an equitable mortgage, to wit:Art. 1602. The contract shall be presumed to be an equitable mortgage,

in any of the following cases:

(1) When the price of a sale with right to repurchase is unusually inadequate;

(2) When the vendor remains in possession as lessee or otherwise;

(3) When upon or after the expiration of the right to repurchase anotherinstrument extending the period of redemption or granting a new period is

executed;

(4) When the purchaser retains for himself a part of the purchase price;

(5) When the vendor binds himself to pay the taxes on the thing sold;

(6) In any other case where it may be fairly inferred that the real intention ofthe parties is that the transaction shall secure the payment of a debt or the

performance of any other obligation.

In any of the foregoing cases, any money, fruits, or other benefit to be

received by the vendee as rent or otherwise shall be considered as interest which

shall be subject to the usury laws. (Emphasis supplied)

InLegaspi vs. Ong,[7]the Court further explained that:The presence of even one of the above-mentioned circumstances as enumerated in

Article 1602 is sufficient basis to declare a contract of sale with right to repurchase as one

of equitable mortgage. As stated by the Code Commission which drafted the new Civil

Code, in practically all of the so-called contracts of sale with right of repurchase, the realintention of the parties is that the pretended purchase price is money loaned and in order

to secure the payment of the loan, a contract purporting to be a sale with pacto de retro is

drawn up.[8]

In the same case, the Court cited Article 1603 of the Civil Code, which provides that incase of doubt, a contract purporting to be a sale with right to repurchase shall be

construed as an equitable mortgage.[9]
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In the instant case, the presence of the circumstances provided for under

paragraphs (2) and (5) of Article 1602 of the Civil Code, and the fact that petitioner

herself demands payment of interests on the purported purchase price of the subject

property, clearly show that the intention of the parties was merely for the property to

stand as security for a loan. The transaction between herein parties was then correctlyconstrued by the CA as an equitable mortgage.

The allegation that the appellate court should not have deleted the award for actual

and/or compensatory damages is likewise unmeritorious.

Section 8, Rule 51 of the Rules of Court provides as follows:

Sec. 8. Questions that may be decided. No error which does not affect thejurisdiction over the subject matter or the validity of the judgment appealed from or the

proceedings therein will be considered unless stated in the assignment of errors, or

closely related to or dependent on an assigned error and properly argued in the brief, save

as the court may pass upon plain errors and clerical errors.

Clearly, the appellate court may pass upon plain errors even if they are not stated in the

assignment of errors. In Villegas vs. Court of Appeals,[10]the Court held:

[T]he Court is clothed with ample authority to review matters, even if they are not

assigned as errors in the appeal, if it finds that their consideration is necessary in arriving

at a just decision of the case.[11]

In the present case, the RTCs award for actual damages is a plain error because a

reading of said trial courts Decision readily discloses that there is no sufficient evidence

on record to prove that petitioner is entitled to the same. Petitioners only evidence to

prove her claim for actual damages is her testimony that she has spent P3,000.00 in going

to and from respondents place to try to collect payment and that she spent P1,000.00

every time she travels from Bulacan, where she resides, to Baguio in order to attend the

hearings.
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InPeople vs. Sara,[12]the Court held that a witness testimony cannot be

considered as competent proof and cannot replace the probative value of official receipts

to justify the award of actual damages, for jurisprudence instructs that the same must be

duly substantiated by receipts.[13] Hence, there being no official receipts whatsoever to

support petitioners claim for actual or compensatory damages, said claim must be

denied.

The appellate court was also correct in ordering respondent to pay legal interest

on the amount of P165,000.00.

Both parties admit that they came to an agreement whereby respondent shall pay

petitioner interest, at 9% (according to respondent) or 10% (according to petitioner) per

month, if she is unable to pay the principal amount of P165,000.00 on July 29, 1987.

In the Pre-Trial Order[14]dated May 25, 1994, one of the issues for resolution of the

trial court was whether or not the interest to be paid under the agreement is 10% or 9%

or whether or not this amount of interest shall be reduced equitably pursuant to law.[15]

The factual milieu ofCarpo vs. Chua[16]

is closely analogous to the present

case. In the Carpo case, petitioners therein contracted a loan in the amount

of P175,000.00 from respondents therein, payable within six months with an interest rate

of 6% per month. The loan was not paid upon demand. Therein petitioners claimed that

following the Courts ruling inMedel vs. Court of Appeals,[17]

the rate of interest of 6%

per month or 72% per annum as stipulated in the principal loan agreement is null and

void for being excessive, iniquitous, unconscionable and exorbitant. The Court then held

thus:

In a long line of cases, this Court has invalidated similar stipulations on interest

rates for being excessive, iniquitous, unconscionable and exorbitant. In Solangon v.Salazar, we annulled the stipulation of 6% per month or 72% per annum interest on

a P60,000.00 loan. InImperial v. Jaucian, we reduced the interest rate from 16% to

1.167% per month or 14% per annum. InRuiz v. Court of Appeals, we equitably reducedthe agreed 3% per month or 36% per annum interest to 1% per month or 12% per annum
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interest. The 10% and 8% interest rates per month on a P1,000,000.00 loan were reduced

to 12% per annum inCuaton v. Salud. Recently, this Court, inArrofo v. Quino, reduced

the 7% interest per month on a P15,000.00 loan amounting to 84% interest per annum to18% per annum.

There is no need to unsettle the principle affirmed in Medeland like cases. From

that perspective, it is apparent that the stipulated interest in the subject loan is excessive,iniquitous, unconscionable and exorbitant. Pursuant to the freedom of contract principleembodied in Article 1306 of the Civil Code, contracting parties may establish such

stipulations, clauses, terms and conditions as they may deem convenient, provided they

are not contrary to law, morals, good customs, public order, or public policy. In theordinary course, the codal provision may be invoked to annul the excessive stipulated

interest.

In the case at bar, the stipulated interest rate is 6% per month, or 72% per

annum. By the standards set in the above-cited cases, this stipulation is similarlyinvalid. x x x.

[18]

Applying the afore-cited rulings to the instant case, the inescapable conclusion is

that the agreed interest rate of 9% per month or 108% per annum, as claimed by

respondent; or 10% per month or 120% per annum, as claimed by petitioner, is clearly

excessive, iniquitous, unconscionable and exorbitant. Although respondent admitted that

she agreed to the interest rate of 9%, which she believed was exorbitant, she explained

that she was constrained to do so as she was badly in need of money at that time. As

declared in theMedelcase[19]

andImperial vs. Jaucian,[20][i]niquitous and

unconscionable stipulations on interest rates, penalties and attorneys fees are contrary to

morals. Thus, in the present case, the rate of interest being charged on the principal loan

of P165,000.00, be it 9% or 10% per month, is void. The CA correctly reduced

the exhorbitant rate to legal interest.

In Trade & Investment Development Corporation of the Philippines

vs. Roblett Industrial Construction Corporation,[21] the Court held that:InEastern Shipping Lines, Inc. v. Court of Appeals, this Court laid downthe following rules with respect to the manner of computing legal interest:

I. When an obligation, regardless of its source, i.e., law,contracts, quasi-contracts, delicts or quasi-delicts is breached,

the contravenor can be held liable for damages. The provisions

under Title XVIII on 'Damages' of the Civil Code govern in

determining the measure of recoverable damages.
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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 itconsists in the payment of a sum of money, i.e., a loan or

forbearance of money, the interest due should be thatwhich may have been stipulated in writing. Furthermore,

the interest due shall itself earn legal interest from the timeit 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 theCivil Code.

[22](Underscoring supplied)

Applied to the present case, since the agreed interest rate is void, the parties are

considered to have no stipulation regarding the interest rate. Thus, the rate of interest

should be 12% per annum to be computed from judicial or extrajudicial demand, subject

to the provisions of Article 1169 of the Civil Code, to wit:

Art. 1169. Those obliged to deliver or to do something incur in delay from the

time the obligee judicially or extrajudicially demands from them the fulfillment of the

obligation.

However, the demand by the creditor shall not be necessary in order that delaymay exist:

(1) When the obligation or the law expressly so declares; or

(2) When from the nature and the circumstances of the obligation it appears that

the designation of the time when the thing is to be delivered or the service isto be rendered was a controlling motive for the establishment of the

contract; or

(3) When demand would be useless, as when the obligor has rendered it beyond

his power to perform.

x x x x
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The records do not show any of the circumstances enumerated

above. Consequently, the 12% interest should be reckoned from the date of

extrajudicial demand.

Petitioner testified that she went to respondents place several times to try to

collect payment, but she (petitioner) failed to specify the dates on which she made such

oral demand. The only evidence which clearly shows the date when petitioner made a

demand on respondent is the demand letter dated March 19, 1989 (Exh. C), which was

received by respondent or her agent on March 29, 1989 per the Registry Return Receipt

(Exh. C-1). Hence, the interest of 12% per annum should only begin to run

from March 29, 1989, the date respondent received the demand letter from petitioner.

WHEREFORE, the petition is hereby DENIED. The Decision of the Court of

Appeals dated June 9, 2000 is AFFIRMED with the MODIFICATION that the legal

interest rate to be paid by respondent on the principal amount of P165,000.00 is twelve

(12%) percent per annum from March 29, 1989 until fully paid.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZAssociate Justice

WE CONCUR:

ARTEMIO V. PANGANIBANChief JusticeChairperson

CONSUELO YNARES-SANTIAGO ROMEO J. CALLEJO, SR.Associate Justice Associate Justice


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MINITA V. CHICO-NAZARIOAssociate Justice

CERTIFICATIONPursuant to Section 13, Article VIII of the Constitution, it is hereby certified

that the conclusions in the above Decision were reached in consultation before thecase was assigned to the writer of the opinion of the Courts Division.

ARTEMIO V. PANGANIBANChief Justice

[1] Penned by Associate Justice Bernardo P. Abesamis, with Associate

Justices Eugenio S. Labitoria and Wenceslao I. Agnir, Jr. concurring.[2] Records, pp. 1-2.[3] Records, pp. 241-242.[4] CA Decision, CA rollo, pp. 103-104.[5] Rollo, p. 6.[6] Records, pp. 77-80.[7] G.R. No. 141311, May 26, 2005, 459 SCRA 122.[8] Id., p. 139.[9] Id.[10] G.R. No. 129977, February 1, 2001, 351 SCRA 69.[11] Id., p. 74.[12] G.R. No. 140618, December 10, 2003, 417 SCRA 431.[13] Id., p. 446.[14]

Records, pp. 77-80.[15] Id., p. 78.[16] G.R. Nos. 150773 & 153599, September 30, 2005.[17] 359 Phil. 820 (1998).[18] Carpo v. Chua, supra.[19] Supra, note 17.[20] G.R. No. 149004, April 14, 2004, 427 SCRA 517, 519.[21] G.R. No. 139290, November 11, 2005.[22] Id.
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Dino vs. JardinesG.R. No. 145871January 31, 2006FACTS:Petitioner Leonides filed a petition for Consolidation of Ownership with the RTC of Baguio Cityalleging that on January31, 1987, respondent Jardines executed in her favor a Deed of Sale with Pacto de

retro over a parcel of land withimprovements which amounted to P165,000.00. It was stipulated that the

period for redemption would expire in sixmonths or on July 29 1987 however none among Dino and hisheirs were able to redeem the property. Jardinescountered that the true contract of the parties was that of aloan and the deed with pacto de retro sale was a meresecurity to such loan. The amount of the propertywas around half a million and respondent averred that it wasunthinkable for her to sell the property for

only P165,000.00 In fact, the loan was even covered by interest at the rate of 9% to be paid monthly. Thecourt rendered its decision declaring the contract as one of deed of sale with right torepurchase or pactode retro and that petitioner acquired whatever rights Jardines had over the parcel of land, and shenow

became owner of the same. However, upon appeal to the Court of Appeals, the judgment was reversed

with thefinding that the contract was one of Equitable Mortgage and not one of Pacto deRetro.Issue:Whether or not the contract was one of Pacto de Retro or an Equitable MortgageHeld:TheSupreme Court upheld the ruling of the Court of Appeals. The findings of said court are based on

documentaryevidence and on admissions and stipulation of facts made by the parties. It was strengthened

by the fact that a)respondent is still in actual physical possession of the property; b) respondent is the onepaying the real property taxeson the property; and c) the amount of the supposed sale price, P165,000.00earns monthly interest.Under Article 1602 of the Civil Code: The Contract shall be presumed to be anequitable mortgage, in any of thefollowing cases:1.

When the price of a sale with right to repurchase is unusually inadequate;

2.

When the vendor remains in possession as lessee or otherwise;3.

When upon or after the expiration of the right to repurchase another instrument extending the period

of redemption or granting a new period is executed;4.

When the purchases retains for himself a part of the purchase price;

5.

In any other case where it may be fairly inferred that the real intention of the parties is that the

transactionshall secure the payment of a debt or the performance of any other obligation.In any of the foregoing cases, any money, fruits, or other benefit to be received by the vendee as rent orotherwiseshall be considered as interest which shall be subject to usury laws.It was held in the case ofLegaspi vs. Ong that the presence of even one of the above-mentioned circumstances asenumerated in

Article 1602 is enough basis to declare a contract of sale with pacto de retro as an equitablemortgage.Further, under Article 1603, in case f doubt, a contract purporting to be a sale with right to

repurchaseshall be construed as an equitable mortgage. The circumstances under paragraphs 2 and 5 arepresent in the case atbar. The property is still in the hands of petitioner and it is clearly shown that

intention of the parties was merely forthe property to stand as security for the loan


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FIRST DIVISION

G.Q. GARMENTS, INC., G.R. No. 161722

Petitioner,

Present:

PANGANIBAN, C.J., Chairperson,

YNARES-SANTIAGO,

- versus - AUSTRIA-MARTINEZ,

CALLEJO, SR., and

CHICO-NAZARIO,JJ.

ANGEL MIRANDA,

FLORENDA MIRANDA and Promulgated:

EXECUTIVE MACHINERIES

And EQUIPMENT

CORPORATION, July 20, 2006

Respondents.

x-----------------------------------------------------------------------------------------x

D E C I S I O NCALLEJO, SR., J.:


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Before the Court is a Petition for Review on Certiorari for the reversal of

the Decision[1]of the Court of Appeals (CA) in CA-G.R. CV No. 45567, as well as

its Resolution[2]denying the motion for reconsideration thereof.

Angel Miranda is the registered owner of a 9,646 square meters parcel of

land located at Niog, Bacoor, Cavite (Property). The property was covered by

Transfer Certificate of Title (TCT) No. T-60679[3]of the Registry of Deeds

of Cavite.

In 1984, Angelito Miranda, the son of Angel Miranda, established the

Executive Machineries and Equipment Corporation (EMECO), a domestic

corporation engaged primarily in the manufacture and fabrication of rubber rollers.

Angelito owned 80% of the stocks of the corporation, while his wife Florenda

owned 10%. That year, Angel entered into a verbal contract of lease over the

Property with EMECO, and allowed it to build a factory thereon. The agreement

was on a month-to-month basis, at the rate of P8,000 per month. EMECO

constructed its factory on the property. At the outset, EMECO paid the monthly

rentals. However, after Angelito died on June 21, 1988, EMECO failed to pay the

rentals but still continued possessing the leased premises.

On November 19, 1989, the factory of EMECO was totally razed by fire. In

a letter to EMECO dated June 3, 1991, Angel demanded the payment of accrued

rentals in the amount of P280,000.00 as of May 1991. EMECO was also informed

that the oral contract of lease would be terminated effective June 30, 1991.

However, EMECO failed to pay the accrued rentals and to vacate the

property. Another demand letter dated September 27, 1991 was sent to EMECO. Itvacated the leased premises, but the accrued rentals remained unpaid.

Sometime in November 1991, Florenda arrived at the office of petitioner and

offered to sublease the property to Wilson Kho, the Officer-in Charge of the

corporation. Florenda showed Kho a purported copy of a contract of lease [4]over
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the said property allegedly executed by Angel in favor of EMECO. After visiting

and viewing the property, Kho agreed to rent the area upon the condition that its

true and registered owner would personally sign the lease contract in his presence.

When Florenda failed to present Angel for said purpose, Kho turned down herproposal.

Later, Kho was able to locate Angel at Noveleta, Cavite and offered, in

behalf of petitioner, to lease the property, as to which Angel agreed. On December

23, 1991, Angel and the corporation, represented by its Executive Vice-President,

Davy John Barlin, executed a contract of lease[5]over the subject property. The

lease was for a period of 15 years, commencing on February 1, 1992 until January

31, 2007 for a monthly rental of P30,000.00. Petitioner paid P90,000.00

representing two months deposit and advance rental for one month. As lessee, it

was authorized to introduce improvements, structures, and buildings on the

property as it may deem necessary and for the purpose for which it was leased.

Consequently, petitioner secured the following documents: mayors permit,

sanitary permit, business sticker, and an application for municipal license.

Thereafter, it moved into the property with its equipment, machinery, appliances,supplies, and other construction materials. The construction of a building and

factory in the leased premises commenced.

However, on January 27, 1992, Florenda, together with several armed men

who identified themselves as policemen, forcibly evicted petitioner from the leased

premises, claiming that she was the owner and that the place was already covered

by another existing contract of lease. During the encounter, Florenda and her men

took some equipment, machinery and other properties belonging to petitioner,

thereby causing loss and damage to said properties.

In the meantime, Angel secured a copy of the purported contract of lease he

allegedly executed in favor of EMECO. On March 12, 1992, he forthwith filed a

complaint for declaration of nullity of the contract of lease before the Regional
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Trial Court (RTC) of Makati, Branch 66, docketed as Civil Case No. 92-699.Angel

alleged therein that his signature as lessor in the purported contract was a

forgery. He prayed that judgment be rendered in his favor declaring the said

contract null and void.

Meanwhile, petitioner sought the help of the Philippine National Police

(PNP). General Gerardo N. Flores, Deputy Director General and Chief Directorial

Staff, issued a Memorandum[6]

to Superintendent Wenceslao A. Soberano,

Provincial Director of the Cavite PNP Provincial Command, ordering the latter to

prevent his men from interfering with the pending civil case. Petitioner

subsequently regained possession over the leased premises. However, Florenda

and her group were undaunted. They went back to the place and ousted the

guards and other personnel manning the corporations office, and even removedtheir equipment, and ransacked anew their raw materials, electric wire and other

valuables inside.

On April 20, 1992, petitioner instituted an action for damages and recovery

of possession of the property before the RTC of Cavite City, Branch 17, with Angel,

EMECO and Florenda, as alternative defendants. The case was docketed as Civil

Case No. N-5573. The corporation alleged the following in its complaint:

VI

That on December 23, 1991, Plaintiff leased from Alternative Defendant ANGEL

MIRANDA the premises just adverted to, for a period of FIFTEEN (15) years, commencing

on February 1, 1992 and to expire on January 31, 2007, as evidenced by the Contract of

Lease x x x ;

VII

That by the terms of said lease agreement, Plaintiff was to pay to Alternative

ANGEL MIRANDA rentals in the sum of THIRTY THOUSAND PESOS (P30,000) per month,

with SIXTY THOUSAND PESOS (P60,000) as deposit, and THIRTY THOUSAND PESOS

(P30,000) as advance rental, all of which were complied with by Plaintiff;


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VIII

That in accordance with the same agreement, Plaintiff was authorized to

introduce into the premises such improvements as it may find necessary;

IX

That Plaintiff took possession of the leased premises and moved thereto its

equipments (sic), machineries, appliances, supplies and kindred items, as well as certain

construction materials necessary for the repairs and improvement of the facilities

therein; that, as a matter of fact, Plaintiff had already commenced the construction of

roofs over the concrete structures in the leased premises;

X

That, furthermore, Plaintiff secured from the proper authorities all the needful

licenses and permits for its construction and business activities;

XI

That on January 27, 1992, Alternative Defendant FLORENDA MIRANDA, in her behalf

and in representation of Alternative Defendant EMECO, and in the company of armed

men, forcibly evicted Plaintiff from the premises, not only stopping the construction

works being performed in the premises, but also physically bringing out Plaintiffs

equipment, machineries, and other personalities (sic) of the leased realty;

XII

That the Alternative Defendants just named did the acts just described under

the claim that the premises are either owned by Alternative Defendant FLORENDA

MIRANDA or that the same are covered by [a] still existing lease agreement by and

between Alternative Defendants, the latter claim being evidenced by the Contract of

Lease x x x;


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XIII

That regardless of the validity of either claim on the part of Alternative Defendants

FLORENDA MIRANDA and EMECO, the same cannot be pleaded in derogation of

Plaintiffs possessory rights over the premises, for the reason that the realty in question

is covered by a torrens certificate in the name of Alternative Defendant ANGEL

MIRANDA on which document third parties have a legally-authorized right to rely (in the

first instance), and that in order to evict Plaintiff from the premises, proper ejectment

proceedings would have to be instituted (in the second instance);

XIV

That under the law, Alternative Defendant ANGEL MIRANDA has the obligation

to keep and maintain Plaintiff in peaceful possession of the leased premises, whichobligation said defendant failed to observe and discharge;

XV

That as a result of the forcible eviction of Plaintiff from the leased property, it

suffered damages not only in terms of destruction and/or impairment of its

machineries, equipments (sic), appliances, personalities, supplies and materials, but also

in terms of lost profits and business opportunities, besmirched reputation,

administrative cost overruns, tarnished goodwill and impairment of credit facilities, thetotal pecuniary value of which amounts to not less than TWO MILLION PESOS

(P2,000,000);[7]

It prayed that, after due proceedings, judgment be rendered in its favor, as

follows:

1. That upon due notice and hearing, a writ of preliminary mandatory injunction

issue, restoring Plaintiff to the possession of the premises in question;
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2. That after trial, judgment issue directing Alternative Defendants, singly or

collectively, and any person or persons claiming right under them to surrender

possession of the leased premises to Plaintiff;

3. That either Defendant, or all of them, be condemned to pay to Plaintiff the

sum of TWO MILLION PESOS (P2,000,000) by way of actual, compensatory, and moral

damages;

4. That either Defendant, or all of them, be condemned to pay attorneys fees

and litigation expenses in the sum earlier set forth; and

5, That either Defendant, or all of them, be condemned to pay the costs of this

suit;

6. OTHER RELIEFS and remedies as are just and equitable under the premises are

likewise prayed for.[8]

On June 25, 1992, Angel and petitioner, as plaintiffs, filed a separate

complaint for ejectment against Florenda before the Municipal Trial Court (MTC)

of Bacoor, Cavite, docketed as Civil Case No. 1265. After due proceedings, the

court rendered judgment on July 2, 1993, ordering the eviction of Florenda and all

those claiming the property in her behalf. The decision was appealed to the RTC.

However, for failure to pay asupersedeas bond, the decision was executed and

Florenda was evicted from the property.

On November 26, 1993, the RTC rendered judgment in Civil Case No. N-

5573, dismissing the complaint against all the alternative defendants without

prejudice. It declared that plaintiff was entitled to damages, but it had to dismiss

the complaint because of the pendency of Civil Case Nos. 92-699 and 92-1265.[9]
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However,the RTC resolved to deny the motion of petitioner prompting it to

appeal to the Court of Appeals. Angel Miranda also appealed the decision, which

was docketed as CA-G.R. CV No. 45567.

Meantime, on September 22, 1994, the RTC rendered judgment in Civil

Case No. 92-699 in favor of Angel and declared the contract of lease purportedly

executed by him and EMECO void.

In its Brief as appellant in CA-G.R. CV No. 45567, petitioner alleged that:

THE LOWER COURT GRIEVOUSLY ERRED IN FAILING TO AWARD

DAMAGES IN FAVOR OF PLAINTIFF BY DISMISSING THE CASE

DESPITE ITS CLEAR FACTUAL FINDINGS THAT THE LATTER IS

ENTITLED TO DAMAGES PRAYED FOR IN THE COMPLAINT.

I

THE DISMISSAL OF THE COMPLAINT ON THE GROUND OF LITIS

PENDENTIA IS DEVOID OF ANY FACTUAL AND LEGAL BASIS.

II

IN THE SAME VEIN, THE AWARD OF DAMAGES IN THE PRESENT CASE

WOULD NOT PRE-EMPT ANY DECISION THAT MIGHT BE RENDEREDIN THE PENDING CASES.

[10]

It maintained that the trial court erred in dismissing its complaint on the

ground oflitis pendentia and in not ordering Angel Miranda to reimbursethe P360,000.00 it had paid as rentals for the property.

For his part, Angel averred that the trial court should have dismissed the

complaint against him with prejudice for the reason that there is no allegation in

the complaint that he participated, directly or indirectly, in the forcible ejectment


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of petitioner from the property, and in the looting and taking of its

properties.[11]

He insisted that it was Florenda who forcibly evicted the

corporation and took its properties. Thus, he cannot be held responsible for the

tortious and wrongful acts of third persons, as there is no law to that effect.

Under Article 1664 of the New Civil Code, he is not obliged to answer for a mereact of trespass, and the lessee has a direct action against the intruder. He pointed

out that the law unconditionally and unequivocally absolves the lessor from any

liability arising from an act of trespass by a third person. The duty to maintain the

lessee in the peaceful and adequate enjoyment of the lease for the duration of

the contract is merely a warranty by the lessor that the lessee shall not be

disturbed in his legal, not physical, possession.

On October 29, 2002, the CA rendered judgment reversing the decision ofthe RTC. Thefallo reads:

WHEREFORE, the judgment appealed from is hereby REVERSED and SET ASIDE

and a new one entered dismissing the complaint with prejudice against Angel Miranda

and ordering Florenda Miranda to pay G.Q. Garments, Inc. the amount of:

1. P300,000.00 as and for nominal damages;

2. P200,000.00 as and for attorneys fees; and

3. To pay the costs of suit.

SO ORDERED.[12]

The appellate court absolved Angel of any liability due to the absence of

evidence showing that he had participated, directly or indirectly, in the looting of

GQ Garments properties and in forcibly ejecting the latter from the premises in

question. While under Article 1654, paragraph 3, of the New Civil Code, a lessor is

obliged to maintain the lessee in peaceful and adequate enjoyment of the lease


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for the entire duration of the contract, the law, however, does not apply to him

since the unlawful acts were caused by a third person or an intruder. Under

Article 1664, he is not obliged to answer for a mere act of trespass which a third

person may cause on the use of the thing leased, but the lessee shall have a direct

action against the intruder.

Moreover, the appellate court declared that the warranty of a lessor under

Article 1654 of the New Civil Code extends only to non-disturbance oflegal

possession and not of physical possession. As ruled in the case ofBohol, Sr. v.

Torres,[13]

the duty to maintain the lessee in the peaceful and adequate

enjoyment of the lease for the duration of the contract is merely a warranty that

the lessee shall not be disturbed in his legal, not physical possession. According

to the CA, the evidence on record clearly showed that Florenda disturbed only thephysical possession of the leased premises, and not legal possession. Thus, the

complaint with respect to Angel Miranda should be dismissed with prejudice for

lack of cause of action.[14]

Petitioner moved to have the decision reconsidered on the following

grounds:

I

THE HONORABLE COURT ERRONEOUSLY HELD THAT THE LOSS OF THE ARTICLES VALUED

AT P9,960,000.00 WAS NOT PROVED BY EVIDENCE.

II

THE HONORABLE COURT ERRED IN NOT FINDING DEFENDANT-APPELLANT ANGEL

MIRANDA LIABLE TO HEREIN PLAINTIFF-APPELLANT.[15]


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Petitioner filed a motion for the reconsideration of the decision,[16]

claiming

that it adduced proof that it sustained actual damages. It claimed that Angel was

liable for damages against it for disturbance in law. It was not just a mere act of

trespass, since Florenda claimed to have a prior contract of lease with Angel and

by virtue of a supposedly legal judicial order, Florenda questioned its (GQGarments) right to enjoy the property and deprived it of possession thereof.

Besides, Angel filed an ejectment suit and an action for the nullity of the contract

of lease against Florenda only afterit was dispossessed of the subject property.[17]

Petitioner averred that Angel was liable for damages under Article 1654(3)

of the New Civil Code, under which, as lessor, he was obliged to maintain the

lessee in the peaceful and adequate enjoyment of the lease for the entire

duration of the contract. It likewise citedDe la Cruz vs. Seminary ofManila

[18]where it was ruled that in case of legal disturbance, the lessor is liable

for whatever the lessee has lost by virtue of the breach of the contract and that it

is the duty of the lessor to place the lessee in legal possession of the premises and

to maintain him in the peaceful possession of the property during the lifetime of

the lease. It insisted that the lessor who fails in the performance of such

obligation must indemnify the lessee for the damages occasioned thereby, the

true measure of damages being the actual loss to the lessee arising from the

breach of the contract on the part of the lessor.

Petitioner averred that it complied fully with its contract of lease and had

paid Angel two (2) months deposit in the amount of P60,000.00; one (1) month

advance rental ofP30,000.00 and nine (9) months advance deposit in the amount

of P270,000.00 or the total sum of P360,000.00.

On cross-examination, Angel admitted that he received P360,000.00 from

petitioner. The plaintiff asserted that, in the interest of justice and fairness, the

trial court should order the defendant to reimburse the actual damages it

suffered and return the amounts of rentals and deposits received, considering

that it failed to enjoy the leased premises. To rule otherwise, according to GQ
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Garments, would be to sanction the unjust enrichment of one at the expense of

another.[19]

The CA denied the motion.

Petitioner filed the instant petition for review on certiorarion the following

issues:

I.WHETHER OR NOT THE HONORABLE COURT OF APPEALS

COMMITTED A MANIFEST ERROR IN AWARDING DAMAGES TO

THE PETITIONER WAY BELOW THAT PRAYED FOR IN THECOMPLAINT, THUS, TOTALLY DISREGARDING THE EVIDENCE ON

RECORD.

II.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS SERIOUSLY

ERRED IN NOT FINDING THAT RESPONDENT ANGEL MIRANDASHOULD LIKEWISE BE HELD LIABLE FOR DAMAGES TO THE

PETITIONER.[20]

Petitioner asserts that it adduced preponderant evidence that it sustained

actual damages when its equipment and machineries were destroyed, and that

such damaged property is valued at P10,000,000.00. It points out that aside from

respondent Florenda Mirandas testimony, it also adduced in evidence

photographs of the damaged property. Respondent Angel Miranda failed toadduce any evidence to rebut the same. Petitioner also avers that the damages it

suffered was not merely an act of trespass but a disturbance in law for which

respondent Angel Miranda is liable. He violated its right, as lessee; hence, he is

liable for damages under Article 1654(3) of the New Civil Code. To buttress its

claim, petitioner cites the ruling of this Court in De la Cruz vs. Seminary

of Manila.[21]

It insists that respondent Angel Miranda should pay actual damages


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of P10,000,000.00 and P360,000.00 it had paid to him by way of reimbursement,

and prays that the Court render judgment as follows:

1. Respondents Florenda Miranda and Angel Miranda to pay petitioner, jointlyand severally, actual damages in the sum of P10,000,000.00;

2. Respondent Florenda Miranda to pay petitioner exemplary damages in the

amount to be determined by the Honorable Court;

3. Respondent Angel Miranda to reimburse petitioner the amount

of P360,000.00 plus interest at 12% per annum from the time the complaint was filed

until the same is fully paid;

4. Respondent Angel Miranda to pay petitioner moral, exemplary,

temperate and nominal damages for breach of his warranty in the Contract of Lease;

5. Respondents to pay attorneys fees and the costs of suit.

Other reliefs just and equitable under the premises are likewise prayed for.[22]

Respondents did not file any comment on the petition, and were thus

considered to have waived their right to do so.

The issues are the following: (1) whether respondents are liable to

petitioner for the amount of P10,000,000.00 by way of actual damages; (2)

whether respondent Angel Miranda is liable to reimburse to petitioner

the P360,000.00 paid as rentals.


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Petitioner asserts that the P10,000,000.00 in actual damages was specifically

alleged in its complaint and that evidence was adduced to prove the same,

consisting of the testimonies of respondent Florenda Miranda and her witnesses to

determine the extent of petitioners damages.

We agree with the ruling of the appellate court that petitioners claim for

actual damages was not properly substantiated by evidence. The CA correctly

ruled as follows:

Considering the above provisions of the law, there is no question that

defendant-appellee Florenda Miranda and/or EMECO should be held accountablefor the damage sustained by plaintiff-appellant due to their willful and wantondisregard of the lease rights of plaintiff-appellant over the property in question.

However, we find that the alleged loss of articles, machinery and equipment in the

total sum of P9,960,000.00 was not proven by clear and convincing evidence.Other than the bare testimony of Mr. Wilson Kho and the witnesses he presented,

there was no poof as to the existence of these items prior to the taking over of

Florenda over the property in question. The listing of lost items contained in

plaintiff-appellants Exhibits I and I-1 isself-serving considering that no

inventory was made on the said items prior to its delivery to the premises in

question and that no receipt or proof of acquisition of these listed items were

presented during the trial of the case.

[23]

Under Article 2199 of the New Civil Code, actual damages include all the

natural and probable consequences of the act or omission complained of,

classified as one (1) for the loss of what a person already possesses (dao

emergente) and the other, for the failure to receive, as a benefit, that which would

have pertained to him (lucro cesante). As expostulated by the Court:

Under Article 2199 of the Civil Code, actual or compensatory damages are

those awarded in satisfaction of, or in recompense for, loss or injury sustained.

They proceed from a sense of natural justice and are designed to repair the wrongthat has been done, to compensate for the injury inflicted and not to impose a

penalty. In actions based on torts or quasi-delicts, actual damages include all the

natural and probable consequences of the act or omission complained of. There

are two kinds of actual or compensatory damages: one is the loss of what a personalready possesses, (dao emergente), and the other is the failure to receive as a


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benefit that which would have pertained to him (lucro cesante) (citations

omitted).[24]

The burden of proof is on the party who will be defeated if no evidence is

presented on either side. His burden is to establish his case by preponderance of

evidence which means that the evidence, as whole, adduced by one side, is

superior to that of the other. Actual damages are not presumed. The claimant

must prove the actual amount of loss with a reasonable degree of certainty

premised upon competent proof and on the best evidence obtainable. He must

point out specific facts that could afford a basis for measuring whatever

compensatory or actual damages are borne. Actual damages cannot be anchored

on mere surmises, speculations or conjectures. As the Court declared:

As stated at the outset, to enable an injured party to recover actual or

compensatory damages, he is required to prove the actual amount of loss with

reasonable degree of certainty premised upon competent proof and on the best

evidence available. The burden of proof is on the party who would be defeated if

no evidence would be presented on either side. He must establish his case by apreponderance of evidence which means that the evidence, as a whole, adduced

by one side is superior to that of the other. In other words, damages cannot be

presumed and courts, in making an award must point out specific facts that could

afford a basis for measuring whatever compensatory or actual damages areborne.

[25]

The claimants are not, however, mandated to prove damages in any specific

or certain amount in order to recover damages for a substantial amount.[26] When

the existence of a loss is established, absolute certainty as to its amount is not

required.[27]The amount of the damages should be determined with reasonable

certainty. The law does not require that the amount fixed be absolute or beyond

conjectural possibilities. The ascertainment of the amount of damages should be by

the plainest, easiest and most accurate measure which will do justice in the

premises.[28]
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The Court further declared that where goods are destroyed by the wrongful

acts of the defendant, the plaintiff is entitled to their value at the time of the

destruction, that is normally, the sum of money which he would have to pay in the

market for identical or essentially similar good plus, in a proper case, damages forthe loss of the use during the period before replacement.[29]

To be entitled to an award of actual damages, it is necessary to prove the

precise amount of the loss with a reasonable degree of certainty, premised upon

competent proof and on the best evidence obtainable by the injured party to justify

such award.[30]The award of actual damages cannot be simply based on the mere

allegation of a witness without any tangible claim, such as receipts or other

documentary proofs to support such claim.[31]Failing to satisfy the court that

petitioner certainly suffered actual damages, its claim must now fail.

In this case, there is no question that, indeed, petitioner sustained damages

because its equipment, machineries, and other valuables were taken, and its

building was destroyed by respondent Florenda Miranda and


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her cohorts. Respondent Angel Miranda did not cause the damages sustained by

petitioners property. However, the only evidence adduced by the petitioner to

prove the value of said property is the testimony of Kho, viz.:

ATTY. QUIJANO:

Q You said defendant Miranda looted all your items, machinery and othervaluables inside the premises, do you have a list of those which you

claimed to [have] been lost and stolen from the premises?

MR. KHO:A We have a partial list of the equipment and materials lost.

ATTY. QUIJANO:

May we request that the list be marked as Exhibits I and I-1, respectively.WITNESS:

The first page represents the items lost on January 27 and the second page,items lost in the middle of March up the (sic) of June.

COURT:Mark it. x x x .

x x x x x x x x x

Q Considering that you have been forcibly evicted from the premises, whatdid you do?A We seek (sic) the services of M .R. Pamaran Law Office.

Q And do you have any arrangement with said office?A The agreement is P200,000.00 plus P2,000.00 per appearance, damaged

equipment and loss is P10,000,000.00 and the actual items lost is morethan P10,000,000.00 plus construction materials, P11,000,000.00.

COURT:Q The actual damage is P10,000,000.00?A P10,000,000.00, including the building x x x.

(TSN dated 10 July 1992, pp. 26-28, bold ours)[32]

No other proof was adduced to establish the value or price of the equipment,

machineries and valuables taken by respondent Florenda Miranda, as well as the

damage to petitioners building. The bare claim of Kho that the petitioner


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sustained actual damages in the amount of


32/111

P10,000,000.00 is utterly insufficient on which to anchor a judgment for actual

damages in the amount of P10,000,000.00; it is speculative and merely a surmise.

The Court notes that respondent Florenda Miranda admitted, when shetestified, that she and her cohorts caused the damages to the property of the

petitioner:

ATTY. QUIJANO:Q When you went to the premises in question, you found out that there

were already some construction going

on?

MS. MIRANDA:A Construction? Not construction but there [were] some machineries

inside but not installed.

x x x x x x x x x

Q There [were] purlins and trusses already in the ?A No, in the latter part only.

x x x x x x x x x

Q You said that you did not throw their equipment but just pulled it out

and transferred it to another lot. How long did it take you to transferthat?

A The first one it took us one day to be able to pull out or getoutside, I think six or nine machineries and then it was stopped .

Q How did you bring it out?A By means of forklift.

Q So, you hired a forklift?

A Yes, Sir.x x x x x x x x x

Q Are all the machineries pulled out?A On the first time, it wasnt because it was stopped x x x so it took us

another, I think a month or weeks also before we could hire anothertrucking firm.

Q You mean this truck was hired by Mr. Kho and not by you?A No, by me.


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x x x x x x x x x

Q So, you hired this truck to pull all these machineries out?A Yes. x x x (TSN dated 11 June 1993, pp. 20-23 before the RTC, Cavite,

emphasis ours)

[33]

With this admission, Florenda Miranda is clearly liable for damages to the

equipment, machineries and building of petitioner.

We agree with the ruling of the CA that respondent Angel Miranda is not

liable for damages caused to petitioners property. Article 1654 of the New Civil

Code reads:

Art. 1654. The lessor is obliged:

(1) To deliver the thing which is the object of the contract in such a

condition as to render it fit for the use intended;

(2) To make on the same during the lease all the necessary repairs in orderto keep it suitable for the use to which it has been devoted, unless there is a

stipulation to the contrary;

(3) To maintain the less in the peaceful and adequate enjoyment of the

lease for the entire duration of the contract.

Under theprovision, a lessor is obliged to maintain petitioners peaceful and

adequate enjoyment of the premises for the entire duration of the lease. In case of

noncompliance with these obligations, the lessee may ask for the rescission of the

lease contract and indemnification for damages or only the latter, allowing the

contract to remain in force.[34]

The trespass referred to in Article 1654, paragraph 3, of the New Civil Code,

is legal trespass orperturbacion de mero derecho. The lessor is not liable for the

mere fact of a trespass or trespass in fact (perturbacion de mero hecho) made by a

third person of the leased property. The lessee shall have a direct action against

the trespasser and not against the lessor. As explained by the Court, if the act of


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trespass is not accompanied or preceded by anything which reveals a really juridic

intention on the part of the trespasser, in such wise that the lessee can only

distinguish the material fact, such a trespass is merely a trespass in fact.[35]

The duty of the lessor to maintain the lessee in the peaceful and adequate

enjoyment of the leased property for the entire duration of the contract is merely a

warranty that the lessee shall not be disturbed in having legal and not physical

possession of the property.[36]

In this case, the trespass perpetrated by respondent Florenda Miranda and

her confederates was merely trespass in fact. They forcibly entered the property

and caused damage to the equipment and building of petitioner, because the latter

refused to enter into a contract of lease with EMECO over the property upon

respondent Florenda Mirandas failure to present respondent Angel Miranda to

sign the contract of lease. It turned out that respondent Florenda Miranda attempted

to hoodwink petitioner and forged respondent Angel Mirandas signature on the

contract of lease she showed to petitioner. It appears that respondent Florenda

Miranda tried to coerce the petitioner into executing a contract of lease with

EMECO over the property, only to be rebuffed by the petitioner.

Petitioner cannot rely on the ruling of this Court in De la Cruz v. Seminary

of Manila,[37]because, in this case, respondent Angel Miranda had the legal power

to place petitioner in the peaceful possession of the property upon the execution of

the contract of lease between him and petitioner; in fact, actual possession of the

property was placed in the hands of petitioner, enabling it to start the construction

of its factory.

It bears stressing that respondent Angel Miranda was not content in adopting

a mere passive stance in the face of respondent Florenda Mirandas act of trespass.

He and the petitioner filed a case for forcible entry against Florenda Miranda; he

also succeeded in having the RTC, in Civil Case No. 92-699, declare the contract


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of lease which respondent Florenda Miranda showed petitioner as null and void,

with the courts ruling that his signature on the contract was a forgery.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. Cost

against the petitioner.

ORDERED.

ROMEO J. CALLEJO, SR.

Associate Justice

WE CONCUR:

ARTEMIO V. PANGANIBAN

Chief Justice

Chairperson

CONSUELO YNARES-SANTIAGO MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice Associate Justice


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MINITA V. CHICO-NAZARIO

Associate Justice

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified

that the conclusions in the above decision were reached in consultation before

the case was assigned to the writer of the opinion of the Courts Division.

ARTEMIO V. PANGANIBAN

Chief Justice

[1]Penned by Associate Justice Elvi John S. Asuncion, with Associate Justices Conrado M. Vasquez, Jr., (Chairman,

8th Division) and Sergio L. Pestao concurring; rollo, pp. 38-49.[2] Id. at 51.[3] Id. at 52.[4]

Id. at 69-70.[5] Id. at 53-55.[6] Id. at 56.[7]Id. at 58-62.[8] Id. at 63-64.[9] Id. at 85-96.[10]Id. at 112-113.[11]Id. at 136.[12]Id. at 48.[13]G.R. No. L-26861, July 31, 1978, 84 SCRA 302.
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