Republic of the Philippines The first basic monthly rental shall be
SUPREME COURT paid in advance to the LESSOR on or
Manila before December 1, 1980. Succeeding basic monthly rentals starting March, THIRD DIVISION 1981 be paid by LESSEE to LESSOR, without the necessity of a previous demand or the services of a collector, G.R. No. 79642 July 5, 1993 within the first five (5) days of the month BROADWAY CENTRUM CONDOMINIUM to which said rental shall correspond, at CORPORATION, petitioner, the Office of the LESSOR at Broadway vs. Centrum. TROPICAL HUT FOOD MARKET, INC. and During the first year of the lessor-lessee THE HONORABLE COURT OF APPEALS, relationship between Broadway and Tropical, respondents. no problems were apparently experienced by Gozon, Berenguer, Fernandez & Defensor Law either of them. On 5 February 1982, however, Offices for petitioner. Tropical wrote to Broadway stating that Romulo, Mabanta, Buenaventura, Sayoc & Tropical's rental payments to Broadway were Delos Angeles Law Office for respondent. equivalent to 7.31% of Tropical's actual sales of P17,246,103.00 in 1981, while "[Tropical's] gross profit, rate [was] only 10%." Tropical FELICIANO, J.: went on to say that the rental specified in that contract had been "based merely on Petitioner Broadway Centrum Condominium [Tropical's) projections that [Tropical] could Corporation ("Broadway") and private reach an average sale of P120,000.00 a day;" respondent Tropical Hut Food Market. Inc. however, Tropical's total sales projection for ("Tropical") executed an 28 November 1980 a 1982 was only P23,000,000.00. This would contract of lease. Broadway, as lessor, agreed mean again a rental rate of 6.08% of sales to lease a 3,042.19 square meter portion of the "which is too high for Tropical Hut-Broadway Broadway Centrum Commercial Complex for a considering that the present rental rates of period of ten (10) years, commencing from 1 other Tropical branches are even below the February 1981 and expiring on 1 February normal rate of 1.5% on sales." Accordingly. 1991, "renewable for a like period upon the Tropical made the following proposal to mutual agreement of both parties." The rental Broadway: provision of this contract reads as follows: [Tropical] would therefore propose to 3. BASIC RENTAL ON LEASED PREMISES reduce the present monthly rental to — LESSEE agrees to pay LESSOR a basic P50,000.00 or 2.0% of their monthly monthly rental on the leased promises in sales whichever is higher, up to the end the amount of ONE HUNDRED TWENTY of the third year after which it shall again THOUSAND PESOS (P120,000.00) be subject to renegotiations. (Emphasis Philippine Currency, during the first three supplied) (3) years of this lease contract from February 1, 1981 to February 1, 1984, On 4 March 1962, Broadway responded to allowing two (2) months grace period on Tropical's latter by stating that it (Broadway) rental for renovation/improvements on believed that the problems of Tropical's the leased promises from December 1, supermarket in the Broadway Centrum were 1980 to January 31. 1961. The basic within the control of Tropical's management. rental shall be increased to ONE Broadway offered six (6) suggestions which, if HUNDRED FORTY THOUSAND PESOS implemented, should result in increased sales (P140,000.00) per month during the next for Tropical of at least 15% in the succeeding three (3) years from February 1, 1984 to months. In the meantime, Broadway made the February 1, 1987, and ONE HUNDRED following counter-proposal consisting of SIXTY FIVE THOUSAND PESOS conditional reduction of the stipulated rental by (P165,000.00) per month during the last P20,000.00 for a limited period of four (4) four (4) years from February 1, 1967 to months: February 1, 1991. . . . Meantime, we are agreeable to a Provisional arrangement should not be conditional reduction of your rental by interpreted as amendment to the lease P20,000.00 per month for four months contract entered into between us. starting this month on a trial basis; that We invite your attention to the fact that, is, the P20,000.00 per month reduction as agreed upon, you have committed to in rental will be paid back to us and return by the end of April a certain spread over the last six months of the portion of your leased premises totalling years should the target of 15% increase 466.56 square meters and presently in sales be achieved by the fourth occupied by your drug store and coffee month. However, should your sales not shop outlets and half of the hallway. increased by 5% in spite of the improvements you have introduced, the Finally we wish to remind you that the reduction in rental of P20,000.00 per temporary alteration in rental is month of P80,000.00 for four months will conditioned on your good faith not have to be paid anymore. In other implementation an the suggestions we words, the monthly reduction in rental is conveyed to you in our letter of March 4, conditioned upon your not achieving the 1982 regarding the operations of the desired 15% increased in sales volume supermarket and shall not commence by the fourth month assuming you until the area mentioned above to be implement all of the above changes. surrendered is actually surrendered. It is understood, however, that any Should you find the foregoing in reduction in rental extended is merely a accordance with our previous verbal temporary suspension of the original agreement, please signify your rate of rental stipulated in our contract of acceptance by signing above the word lease and not an amendment thereto. 2 "conforme." (Emphases supplied) Thank you for your, continued Officers of Tropical met with the President of patronage. Broadway and during this conference, C o n f o r m e: Tropical's officers recounted the "low sales Very, truly volume" that the Tropical Supermarket in the yours, Broadway Centrum was experiencing, Tropical Hut apparently as a result of the temporary closure Food Broadway of Doña Juana Rodriguez Avenue. 3 This Avenue Centrum is a major thoroughfare adjacent to the Market, Inc. Broadway Centrum and was then closed to Condominium vehicular traffic because of the road expansion Corp. project of the Government. Broadway's 4 President, Mrs. Cita Fernandez Orosa, was By: (Signed) By: (Signed) aware that the temporary closure of the Doña ___________________ Juana Rodriguez Avenue had affected the _____________________ business of all the Broadway's tenants, (Emphasis supplied). including Tropical. She, therefore, agreed on 20 Months later, the road expansion project at the April 1982 to a "provisional and temporary Doña Juana Rodriguez Avenue was completed. agreement" which agreement needs to be By a letter dated 15 December 1982, quoted in full: addressed to Tropical, Broadway referred to the Further to our letter dated April 6, 1982, rental which "as of last, April 20, 1982, was we hereby make formal our provisional provisionally reduced" to P60,000.00 a month and temporary agreement to a reduction or 2% of gross receipts whichever is higher of your monthly rental on the basis of 2% "without waving any of [Broadway's] rights of gross receipts or P60,000.00 under our rental agreement." Broadway then whichever is higher. Gross receipts went on to say that: should be construed as the total sales After careful deliberation, we regret that and receipts from sublessees of your this concession can no longer be area and from whatever source arising extended in its present form. We, from the area leased by you. This therefore, advising that we shall increase your losses last year by agreeing to a the monthly rental to P100,000.00. temporary reduction of your monthly This increase, however, shall be rental. However, as we have stated in implemented gradually as follows: our December 15, 1982 letter, this P80,000.00 effective January, 1983 and concession can no longer be extended in P100,000.00 effective April, 1993 until its present form which continues to be a further notice. considerable reduction on the provisions of our existing long term contract. Considering the fact that you collect a Consequently, we have to reiterate our monthly gross rental of P24,600.00 from advise on you regarding your rental your concessionaires (other forms of increased. 6 (Emphasis supplied). income not considered), the previous temporary arrangement afforded you Tropical continued its renegotiation efforts. In mare than sufficient respite from another letter dated 29 March 1983, whatever business constraints you may Broadway's President wrote to Mr. Luis Que have had then. The consequent effect of turning down his request for reconsideration. said temporary arrangement is your Broadway, however, was evidently desirous of payment of a monthly rental of keeping Tropical as a tenant if possible and so P35,400.00 or an effective rate of P14.32 stated that the P100,000.00 monthly rental only per square mater. We are sure that would begin, not on April 1983 as stated in its you will agree with us that this rate is letter of 15 December 1982 but rather on July very low and cannot therefore be 1983. By a letter, dated 9 April 1983, the Credit sustained indefinitely. 5 (Emphases and Collection Officer of Broadway sent Mr. Luis supplied). Que a bill for P81,320.00 representing the accrued differential of P20,000.00 per month While the rental rate above fixed by Broadway between the rental which Broadway was willing was higher than that set out in the provisional to grant to Tropical (P80,000.00 per month and temporary agreement of the parties of 20 starting 1 January, 1983) and up to 30 June April 1982, the rates so fixed were nonetheless 1983)and the P60,000.00 per month or 2% of lower than that stipulated in their contract of gross receipts whichever is higher, under the 28 November 1980. Tropical, however, was not temporary and provisional letter-agreement of satisfied with the adjusted rates fixed by 20 April 1982. Broadway. In a letter dated 4 January 1983, Mr. Luis Que of Tropical wrote to Broadway's Tropical responded to the statement of account President appealing to Broadway "to fix our sent by Broadway by pleading, once more, in a monthly rental at P60,000.00 or 2% of our letter dated 15 April 1983, that Tropical's gross receipts whichever is higher." In this present rentals of P60,000.00 monthly or 2% of letter, Mr. Que expressly hoped that gross receipts, whichever is higher, "would at least stay until we have somehow recovered," [Broadway would] understand our to which Tropical proposed, however, to add position, and may we reiterate our 20% of its income from concessionaires (i.e., appeal to maintain our present concessionaires at Tropical-Broadway provisional rates until such time that Supermarket). 7 more sales are achieved. (Emphasis supplied) Tropical's last counter-offer was not acceptable to Broadway. In a letter dated 22 April 1983, Mr. Luis Que's appeal was, however, found Broadway's President wrote to Mr. Luis Que unsatisfactory by Broadway. In a letter dated stating that "the matter was no longer 13 January 1983, Broadway said: negotiable": We are replying to your letter of January We are responding to your letter of April 4, 1983. While it may be admitted that 15, 1983 proposing a counter offer to the you are incurring losses in your payment of your rentals. You will operations, the same is not a monopoly remember that in our last meeting our experienced solely by your corporation. position on the matter has been Broadway Centrum itself has had its unequivocably stated. The temporary share of business setbacks but we have arrangement of reducing your monthly nevertheless decided to absorb part of rentals was extended as an assistance. This had caused us to lose P620,000.00 amendment to the lease contract and on rental income. this was done merely as an assistance. You will agree that this is a sizeable There is, therefore, absolutely no basis amount which had tremendous adverse to your claim that we cannot arbitrarily effects on our financial position. This can and unilaterally increase the rentals. We no longer be sustained. strongly feel that we should have instead been the recipient an act of gratitude We reiterate, therefore, that the matter from you. is no longer negotiable and we strongly urge you to settle your obligation to In view therefore of your obstinate minimize the 2% penalty on delayed decision to blur your view and continue payments provided for in our contract. refusing to heed our demands, we are hereby formally serving you notice that if We trust that you will see the merits of you still fail to pay your back accounts the foregoing. 8 (Emphasis supplied). amounting to P100,000.00 exclusive of On 5 May 1983, Mr. Mariano Gue, adopting a penalty charges by Monday, May 9, new and much harder posture than Mr. Luis 1983, paragraph five (5) of our lease Que had, wrote to Broadway as follows: contract will be implemented. 10 (Emphasis supplied). . . . I could only confirm what I told you in our conference that we cannot afford A week later, on 12 May 1983, Tropical filed a any increase in rentals in the space Complaint before the Regional Trial Court, occupied by us at Broadway Centrum. Quezon City, seeking a restraining order or And I could only repeat what is contained preliminary injunction to prevent Broadway in the letter sent you by our Mr. Luis Que from invoking and implementing Section 5 of dated April 15, 1983. We cannot agree their Lease Contract and asking the court to to an increase in rentals at this time. To decree that the, rental provided for in the do so would put us in a financial situation letter-agreement of 20 April 1982 "should worse then we were in before we agreed subsist while the low volume of sales [of to reduce the leased premises and adjust Tropical] still continues." A restraining order the rentals. Our position is that you was issued by the trial court ex parte the next cannot arbitrarily and unilaterally day and a preliminary injunction was granted increase the rentals. This is a matter on 2 June 1983, upon Tropical's filing of a bond which should be mutually agreed upon in the amount of P100,000.00. by us and as stated, we are not in a On 6 January 1984, while trial before the financial position to agree to such an Regional Trial Court was pending, Broadway increase. 9 (Emphasis supplied). informed Tropical that the basic rental would On the same day, 5 May 1983, Mrs. Orosa be increased to P140,000.00 per month during wrote to Mr. Mariano Que expressing shock and the next three (3) years from 1 February 1984 dismay at the posture suddenly adopted by the to 1 February 1987 in accordance with latter. Mrs. Orosa wrote: paragraph (3) of the Lease Contract dated 28 November 1980. We are replying to your letter of May 5, 1983 categorically stating that your Tropical reacted by filing a supplemental position is that we cannot arbitrarily and complaint with the trial court raising for the unilaterally increase the rentals. We are first time the issue of whether or not the letter- appealed by the apparent attempt to agreement dated 20 April 1982 had novated distort the very crystal clear the Lease Contract of 28 November 1980. arrangement we reached last April 20, Tropical alleged that the original Contract. of 1982 anent the temporary alteration of Lease had been novated in its principal your rentals. We hereby attached a conditions — i.e., the area subject to the lease xerox copy of said agreement with our and the lease rentals — by the letter- underscores to refresh your memory. agreement dated 20 April 1982 and that the reduced lease rates set out in the letter- We have exhaustively, repeatedly but agreement are to subsist while Tropical's sales patiently labored to explain to you the volume "remains low." temporary and provisional arrangement to reduce your monthly rentals is not Petitioner, upon the other hand, vehemently leased space by 466.56 square meters, denied that the original Lease Contract had possession of which was returned by Tropical to been novated by the letter-agreement of 20 Broadway, constituted valuable consideration April 1982. for the reduction of rentals while the "low sales In time, the trial court rendered its decision volume" of Tropical continued. The Court of dated 14 March 1985, the dispositive portion of Appeals corrected a microscopic arithmetical which reads as follows: error committed by the trial court and in effect directed Tropical to pay, when its "low sales WHEREFORE, judgment, is hereby volume" shall hove been overcome, the rendered in favor of the plaintiff and following rental rates: against the defendant as follows: From 1 February 1984 up to 1 February 1. The writ of preliminary injunction 1987 — P118.529.15 per month; previously issued is made permanent; From 1 February 1987 up to 1 February 2. The reduced rental provided for in the 1991 — P139,695.07 per month. letter-agreement of April 20, 1982 (Exh. "G" or "5") shall subsist or be effective Petitioner Broadway now asks us to review and during the period that a plaintiff cannot set aside the Decision of the Court of Appeals. achieve its Projected daily sales average The sole issue confronting us here is Whether as envisioned in its feasibility study; or not the latter-agreement dated 20 April 1982 3. The contract of leased dated had novated the Contract of Lease of 28 November 28, 1980 (Exh. "A" or "1") is November 1980. declared as partially novated or modified We start with the basic conception that by the letter-agreement; novation is the extinguishment of an obligation 4. The amount of monthly rentals by the substitution of that obligation with a payable by plaintiff for the reduced area subsequent one, which terminates it, either by of the leased promises after plaintiff has changing its object or principal conditions or by achieved its projected daily sales substituting a now debtor in place of the old average is fixed as follows: one, or by subrogating a third person to the rights of the creditor. 12 Novation through a February 1, 1981 to February 1, change of the object or principal conditions of 1984 — an existing obligation is referred to as objective P39.45 per square meter or (or real) novation. Novation by the change of P101,609.00; either the person of the debtor or of the February 1, 1984 to February 1, creditor is described as subjective (or personal) 1987 — novation. Novation may also be objective and P46.02 per square meter or subjective (mixed) at the same time. In both P118.530.00; objective and subjective novation, a dual purpose is achieved — an obligation in February 1, 1987 to February 1, extinguished and a news one is created In lieu 1991 — thereof. 13 P54.24 per square mater or P139,702.00. If objective novation is to take place, it is essential that the new obligation expressly Correspondingly, defendant's declare that the old obligation to be counterclaim is dismissed. extinguished, or that now obligation be on Costs against the defendant. every point incompatible with the old one. 14 So Ordered. 11 (Emphasis supplied). Novation is never presumed; it must be established either by the discharge of use old On appeal, the Court of Appeals affirmed the debt by the express terms of the new decision of the trial court. The Court of Appeals agreement, or by the acts of the parties whose held that the letter-agreement dated 20 April intention to dissolve the old obligation as a 1982 had novated the principal conditions of consideration of the emergence of the new one the Lease Contract. The Court of Appeals also must be clearly manifested. 15 It is hardly hold that the reduction in the rentals was not necessary to add that the role that novation is entirely a gratuitous accommodation on the never presumed, is not avoided by merely part of Broadway since the reduction of the referring to partial novation. The will to novate, hereof shall not be deemed a whether totally or partially, must appear by relinquishment or waiver of any right or express agreement of the parties, by their acts remedy that said LESSOR may have, nor which are too clear and unequivocal to be shall it be construed as a waiver of any mistaken. subsequent breach of, or default in the Applying the above principles to the case at terms, conditions and covenants hereof, bar, it is entirely clear to the court that the which terms, conditions and covenants letter-agreement of 20 April 1992 did not shall continue under this Contract and extinguish or alter the obligations of shall be deemed to have been made respondent Tropical and the rights of petitioner unless express in writing and signed by Broadway under their lease contract dated 28 the LESSOR. 16 (Emphasis supplied). November 1980. In the third place, the course of negotiations In the first place, the letter-agreement of 20 between Broadway and Tropical before the April 1982 was, by its own terms, a " execution of their letter-agreement of 20 April provisional and temporary agreement to a 1982, quite clearly indicated that what they reduction of [Tropical's] monthly rental —." The were negotiating was a temporary and letter-agreement, as noted earlier, also provisional reduction of rentals. Thus, Tropical contained the following sentence: itself, in its letter to Broadway dated 5 February 1982, quoted earlier, had proposed reduction of This provisional agreement should not rentals from the stipulated contractual rates to be interpreted as amendment to the P50,000.00 per month or 2% of monthly sales, contract entered into by us. whichever is higher, "up to the end of the third The same letter also referred to the reduction year after which it shall again subject, to of rental as a "temporary alteration in rental" renegotiation." which was "conditioned" upon good faith Any reduction in rental extended is implementation by Tropical of the six (6) merely a temporary suspension of the principal suggestions Broadway had conveyed original rate of rental stipulated in our to Tropical concerning improvement of the contract of lease and not an amendment operations of Tropical's supermarket at the thereto. Broadway Centrum. The non-specification by Broadway (who had prepared the letter- In the fourth place, the course of discussions agreement an which Tropical placed its between Broadway and Tropical, as disclosed in conforme) of the period of time during which their correspondence, after execution of the 20 the reduced rentals would remain in effect, April 1982 letter-agreement, shows that the only meant that Broadway retained for itself reduction of rentals agreed upon in the letter- the discretionary right to return to the originalagreement was not to persist, for the rest of contractual rates of rental whenever Broadway the life of the ten (10)-year Contract of Lease. felt it appropriate to do so. There is nothing inThat correspondence is bereft of any, sign of the text of the 20 April 1982 letter-agreement mutual agreement or recognition that the to suggest that the reduced concessional rental reduced rentals had so permanently replaced rates could not be terminated Broadway the contract stipulations on rentals as to have without the consent of Tropical. become immune to change save by common consent of Tropical and Broadway. Quite the In the second place, the formal notarized Lease contrary. In Broadway's letter to Tropical dated Contract of 28 November 1980 made it clear 15 December 1982, Mrs. Orosa referred to the that a temporary and provisional concessional letter-agreement of 20 April 1982 which reduction of rentals which Broadway might "provisionally reduced to P60,000.00 a month grant to Tropical was not to be construed as or 2% of [Tropical's] gross receipts, whichever alteration or waiver of any; of the terms of the is higher, without waiving any of our right Lease Contract itself. That Lease Contract under our rental agreement." This 15 provided, among other things, as follows: December 1982 letter, quoted earlier, in an 32. NON-WAIVER OF CONDITIONS & obvious effort to be conciliatory, did not try to COVENANTS — The failure of the LESSOR go back immediately to the contract stipulation to insist upon strict performance of any of P120,000.00 monthly rental, from 1 February of the terms, conditions and stipulation 1981 to 1 February 1984. Instead, Broadway proposed P80,000.00 per month effective January 1983 and P100 000.00 per month their 28 November 1980 Contract of Lease. effective April 1983 "until further notice." In its That feasibility study was no mare than an reply letter of 4 January 1983, Tropical expression of Tropical's own expectations when appealed to Broadway to maintain "our present it entered into the 1980 Contract of Lease; yet provisional rates until such time that more the trial court held that the reduced rentals sales are achieved." In its rejoinder of 13 were to remain in effect until Tropical achieved January 1983, Broadway stressed that though it its own expectations concerning its sales at the had its own share of business set backs, it had Broadway Centrum, which presumably were "nevertheless decided to absorb part of not "low." [Tropical-Broadway Centrum's] losses last year Tropical, in its Memorandum, stressed that by agreeing to a temporary reduction of the Broadway had supplied the number of monthly rental." At the same time, Broadway customers which Tropical had inputted in its stressed that "this concession" could no longer feasibility study. Whatever number Broadway be extended "in its present form which may have submitted to Tropical in their pre- continues to be a considerable reduction on the contract negotiations was no more than an provisions of our existing long-term contract." estimate or speculation as to the number of Finally, in his last letter of 15 April 1983, Mr. customers that might be coming into the then Luis Que of Tropical appealed once more to proposed Tropical Supermarket at the Broadway to continue the reduction in rental Broadway Centrum. We do not understand under the 20 April 1982 letter-agreement "until Tropical to have suggested that that number we have somehow recovered" and then, at the constituted a representation on the part of same time, offered to increase that reduced Broadway which turned out to be false and rental by adding to it 20% of Tropical's income which vitiated Tropical's consent to the original from concessionaires at its Broadway Centrum 1980 Contract, of Lease. Neither do we Supermarket. Turning down Mr. Que's last understand Tropical to be suggesting that counter-officer, Mrs. Orosa of Broadway on 22 Broadway had warranted to Tropical that a April 1983 once again stressed that: certain number of customers would in fact be The temporary arrangement of reducing visiting the then proposed Tropical your monthly rentals was extended as an Supermarket at Broadway Centrum. The 1980 assistance. This had caused us to lose Contract of Lease itself was totally silent as to P620,000.00 on rental income. any such estimated or expected number of (Emphasis supplied). customers either as a representation or as a It is thus clear to the Court that Tropical was warranty on the part, of Broadway. That silence attempting to modify its formal Lease Contract rendered any estimate which Broadway may 17 with Broadway by implying or inserting terms have conveyed to Tropical, quite immaterial. into the 20 April 1982 letter-agreement which We turn to the holding of the Court of Appeals are not found in that letter-agreement. Under that the surrender of 466.56 square meters of both the Civil Code and our case law on leased space by Tropical to Broadway novation and as well the express terms of the constituted valuable consideration, acceptance 28 November 1980 Contract of Lease, only of which disabled Broadway from insisting on evidence of the clearest and most explicit kind the original terms of their Contract of Lease. will suffice for that purpose. Tropical's theory Under the view we have taken above of the that Broadway had agreed in the 20 April 1982 legal effects of the 20 April 1982 letter- letter-agreement to maintain the reduced agreement, this supposed valuable rental so long as Tropical was suffering from a consideration appears quite immaterial. We "low volume of sales" appears to us as an must, nonetheless, note that comparison of the afterthought, imaginative and original no lease rentals reduced and the floor space doubt, but still an afterthought. Tropical did not surrendered yields a strong presumption that pretend to have reached agreement with Broadway could not have agreed to the Broadway on what level of sales would supposed partial novation. The rentals were constitute the critical "low volume of sales." reduced by Broadway by 50% (from And so, the trial court ended up with the truly P120,000.00 to P60,000.00 per month). The extraordinary recourse of referring to the floor space was reduced by slightly over 15% feasibility study that Tropical had made on it's only. No substantial relationship existed own, before Tropical and Broadway executed between the amount of the reduction of rental and the area of the space returned by Tropical. Bidin, Davide, Jr. and Melo, JJ., concur. Hence, no reasonable presumption can be Romero, J., took no part. indulged that that, return of part of the leased space constituted consideration for the reduction of rental rates. In that Contract of # Footnotes Lease, moreover, the rentals were stipulated 1 Record, pp. 6-7. for a specified portion of the Broadway Centrum having a total floor area of 3,042.19 2 Record, p. 164. square meters; the rental rate was not 3 TSN 19 July 1984, p. 5. specified on a per square meter basis. 4 Exhibit "G" for respondent and We conclude that the Court, of Appeals fell into Exhibit "5" for petitioner; Record, reversible error when it affirmed the decision of p. 21. the trial court. We believe and so hold that the letter-agreement of 20 April 1982 did not 5 Record, p. 22. constitute a novation, Whether partial or total, 6 Id., p. 39. of the 28 November 1980 Contract of Lease 7 Id., p. 43. between Broadway and Tropical. 8 Id., p. 44. WHEREFORE, for all the foregoing, the Petition for Review on Certiorari is hereby GIVEN DUE 9 Id., p. 45. COURSE, and the Comment filed by private 10 Id., p. 46. respondent Tropical is hereby TREATED as its ANSWER and the Decision dated 30 January 11 Rollo, pp. 32-33. 1987 of the Court, of Appeals and the Decision 12 Young vs. Court of Appeal, 196 dated 14 March 1985 of the trial court are SCRA 795 (1991); Caneda vs. hereby REVERSED and SET ASIDE. A new Court of Appeals, 181 SCRA 762 judgment is hereby entered dismissing the (1990); Conchingyan vs. R & B complaint filed by private respondent Tropical, Surety and Insurance Co., 151 and requiring private respondent Tropical to SCRA 339 (1987); De Cortes vs. pay to petitioner Broadway the following rental Venturanza, 79 SCRA 709 (1977). rates: 13 Cachingyan. Jr. v. R & B Surety 1. P80,000.00 per month from 1 January 1983 and Insurance Company, Inc., up to 30 June 1983; supra. 2. P100,000.00 per, month from 1 July 1983 up 14 Article 1292, Civil Code. to 31 January 1984; Zoponta v. Rotaeche, 31 Phil 3. P140,000.00 per month from 1 February 154.159 (1912). 1984 to 1 February 1987; and 15 See. e. g., Goni vs. Court of 4. P160,000.00 per month from 1 February appeals, 144 SCRA 222 (1986); 1987 to 31 January 1991. Landico vs. Pacquing, 42 SCRA 322 (1971); Asia Banking Corp. vs. The penalty of 2% per month on unpaid rentals Lacson Co. Inc., 48 Phil 482 specified in Section 5 of the 28 November 1980 (1925); Tui Suico v. Jabana, 45 Contract of Lease is, in the exercise of the Phil. 707 (1924); Martinez vs. Court's discretion, hereby equitably REDUCED Cavines 25 Phil 581 (1913). to ten percent (10%) per annum computed from accrual of such rentals as above specified 16 Record, pp. 17-18. until fully paid. In addition, private respondent 17 Section 34 of the Lease Tropical shall pay to petitioner Broadway Contract provided: attorney's fees in the amount of ten percent "This lease agreement renders (10%) (and not twenty percent [20%] as void any and all agreements and specified in Section 33 of the Contract of lease) understanding, oral and/or written of the total amount due and payable to previously entered into between petitioner Broadway under this Decision. Costs the parties hereto covering the against, private respondent. property herein leased; and this SO ORDERED. agreement may not hereafter be modified or altered except by instrument in writing duly signed, by the parties hereto." (Emphasis supplied)
Law School Survival Guide (Volume I of II) - Outlines and Case Summaries for Torts, Civil Procedure, Property, Contracts & Sales: Law School Survival Guides
Law School Survival Guide: Outlines and Case Summaries for Torts, Civil Procedure, Property, Contracts & Sales, Evidence, Constitutional Law, Criminal Law, Constitutional Criminal Procedure: Law School Survival Guides