|
THIRD DIVISION [G.R. No. 95897. December 14, 1999] FLORENCIA T. HUIBONHOA, petitioner, vs. COURT OF APPEALS, Spouses Rufina G. Lim and ANTHONY LIM, LORETA GOJOCCO CHUA and Spouses SEVERINO and PRISCILLA GOJOCCO, respondents. [G.R. No. 102604. December 14, 1999] SEVERINO GOJOCCO and LORETA GOJOCCO CHUA, petitioners, vs. COURT OF APPEALS, HON. HERMOGENES R. LIWAG, as Judge of the RTC of Manila Branch 55 and FLORENCIA HUIBONHOA, respondents. D E C I S I O N PURISIMA, J.: These two petitions for review on certiorari under Rule 45 of the Rules of Court seek the reversal of the Decisions of the Court of Appeals in CA-G.R. CV No. 16575 and CA-G.R. SP No. 24654 which affirmed, respectively, the decision of Branch 148 of the Regional Trial Court of Makati City, dismissing the complaint for reformation of contract, and the decision of Branch 55 of the Regional Trial Court of Manila, reversing that of Branch 13 of the Metropolitan Trial Court of Manila, which favorably acted in the ejectment case. Both petitions involve the same parties. Culled from the records on hand, the facts giving rise to the two cases are as follows: On June 8, 1983, Florencia T. Huibonhoa entered into a memorandum of agreement with siblings Rufina Gojocco Lim, Severino Gojocco and Loreta Gojocco Chua stipulating that Florencia T. Huibonhoa would lease from them (Gojoccos) three (3) adjacent commercial lots at Ilaya Street, Binondo, Manila, described as lot nos. 26-A, 26-B and 26-C, covered by Transfer Certificates of Title Nos. 76098, 80728 and 155450, all in their (Gojoccos’) names. On June 30, 1983, pursuant to the said memorandum of agreement, the parties inked a contract of lease of the same three lots for a period of fifteen (15) years commencing on July 1, 1983 and renewable upon agreement of the parties. Subject contract was to enable the lessee, Florencia T. Huibonhoa, to construct a “four-storey reinforced concrete building with concrete roof deck, according to plans and specifications approved by the City Engineer’s Office.” The parties agreed that the lessee could let/sublease the building and/or its spaces to interested parties under such terms and conditions as the lessee would determine and that all amounts collected as rents or income from the property would belong exclusively to the lessee. The lessee undertook to complete construction of the building “within eight (8) months from the date of the execution of the contract of lease.” The contract further provided as follows: “5. Good will Money and Rate of Monthly Rental: Upon the signing of this Contract of Lease, LESSEE shall pay to each of the LESSOR the sum of P300,000.00 each or a total sum of P900,000.00, as goodwill money. LESSEE shall pay to each of the LESSOR the sum of P15,000.00 each or a total amount of P45,000.00 as monthly rental for the leased premises, within the first five (5) days of each calendar month, at the office of the LESSOR or their authorized agent; Provided, however, that LESSEE’s obligation to pay the rental shall start only upon completion of the building, but if it is not completed within eight (8) months from date hereof as provided for in par. 4 above, the monthly rental shall already accrue and shall be paid by LESSEE to LESSOR. In other words, during the period of construction, no monthly rental shall be collected from LESSEE; Provided, Finally, that the monthly rental shall be adjusted/increased upon the corresponding increase in the rental of sub-leasees (sic) using the percentage increase in the totality of rentals of the sub-leasees (sic) as basis for the percentage increase of monthly rental that LESSEE will pay to LESSOR.” The parties also agreed that upon the termination of the lease, the ownership and title to the building thus constructed on the said lots would automatically transfer to the lessor, even without any implementing document therefor. Real estate taxes on the land would be borne by the lessor while that on the building, by the lessee, but the latter was authorized to advance the money needed to meet the lessors’ obligations such as the payment of real estate taxes on their lots. The lessors would deduct from the monthly rental due all such advances made by the lessee. After the execution of the contract, the Gojoccos executed a power of attorney granting Huibonhoa the authority to obtain “credit facilities” in order that the three lots could be mortgaged for a limited one-year period from July 1983.[1] Hence, on September 12, 1983, Huibonhoa obtained from China Banking Corporation “credit facilities” not exceeding One Million (P1,000.000.00) Pesos. Simultaneously, she mortgaged the three lots to the creditor bank.[2] Fifteen days later or on September 27, 1983, to be precise, Huibonhoa signed a contract amending the real estate mortgage in favor of China Banking Corporation whereby the “credit facilities” were increased to the principal sum of Three Million (P3,000,000.00) Pesos.[3] During the construction of the building which later became known as Poulex Merchandise Center,[4] former Senator Benigno Aquino, Jr. was assassinated. The incident must have affected the country’s political and economic stability. The consequent hoarding of construction materials and increase in interest rates allegedly affected adversely the construction of the building such that Huibonhoa failed to complete the same within the stipulated eight-month period from July 1, 1983. Projected to be finished on February 29, 1984, the construction was completed only in September 1984 or seven (7) months later. Under the contract, Huibonhoa was supposed to start paying rental in March 1984 but she failed to do so. Consequently, the Gojoccos made several verbal demands upon Huibonhoa for the payment of rental arrearages and, for her to vacate the leased premises. On December 19, 1984, lessors sent lessee a final letter of demand to pay the rental arrearages and to vacate the leased premises. The former also notified the latter of their intention to terminate the contract of lease.[5] However, on January 3, 1985, Huibonhoa brought an action for reformation of contract before Branch 148 of the Regional Trial Court in Makati. Docketed as Civil Case No. 9402, the Complaint alleged that although there was a meeting of the minds between the parties on the lease contract, their true intention as to when the monthly rental would accrue was not therein expressed due to mistake or accident. She (lessee) alleged that the Gojoccos had erroneously considered the first accrual date of the rents to be March 1984 when their true intention was that during the entire period of actual construction of the building, no rents would accrue. Thus, according to Huibonhoa, the first rent would have been due only in October 1984. Moreover, the assassination of former Senator Benigno Aquino, Jr., an unforeseen event, caused the country’s economy to turn from bad to worse and as a result, the prices of commodities like construction materials so increased that the building worth Six Million pesos escalated to "something like 11 to 12 million pesos.” However, she averred that by reason of mistake or accident, the lease contract failed to provide that should an unforeseen event dramatically increase the cost of construction, the monthly rental would be reduced and the term of the lease would be extended for such duration as may be fair and equitable to both the lessors and the lessee. Huibonhoa then prayed that the contract of lease be reformed so as to reflect the true intention of the parties; that its terms be novated so that the accrual of rents should be computed from October 1984; that the monthly rent of P45,000.00 be equitably reduced to P30,000.00, and the term of the lease be extended by five (5) years.[6] Eleven days later or on January 14, 1985, to be exact, the Gojoccos filed Civil Case No. 106097 against Huibonhoa for “cancellation of lease, ejectment and collection” with the Metropolitan Trial Court of Manila. They theorized that despite the expiration of the 8-month construction period, Huibonhoa failed to pay the rents that had accrued since March 1, 1984, their verbal demands therefor notwithstanding; that, in their letter of December 19, 1984, they had notified Huibonhoa of their intention to “terminate and cancel the lease for violation of its terms” and that they demanded from her the “restitution of the land in question” and the payment of all rentals due thereunder; that Huibonhoa refused to pay the rentals in bad faith because she had “sublet the stalls, bodegas and offices to numerous tenants and/or stallholders” from whom she had collected “goodwill money and exorbitant rentals even prior to the completion of the building or as of March 1984;” that she was about to sublease the vacant spaces in the building; that she was able to finish construction of the building “without utilizing her own capital or investment” on account of the mortgages of their land in the amount of P3,700,000 (sic); that because the mortgage indebtedness with China Banking Corporation had remained outstanding and unpaid, they had revoked the power of attorney in Huibonhoa’s favor on December 21, 1984, and that, because Huibonhoa was about to depart from the Philippines, the rentals due and owing from the leased premises should be held to answer for their claim by virtue of a writ of attachment. The Gojoccos prayed that Huibonhoa and all persons claiming rights under her be ordered to vacate the leased premises, to surrender to them actual and physical possession thereof and to pay the rents due and unpaid at the agreed rate of P45,000.00 a month from March 1984 to January 1985, with legal interest thereon. They also prayed that Huibonhua be ordered to pay the fair rental value of P60,000.00 a month “beginning February 5, 1985 and every 5th of the month until the premises shall be actually vacated and restored” to them and that, “considering the nature of the action,” the Rules on Summary Procedure be applied to prevent further losses, damages and expenses on their part.[7] Meanwhile, in Civil Case No. 9402, the Gojoccos submitted an answer to the complaint for reformation of contract; asserting that the true intention of the parties was to obligate Huibonhoa to pay rents immediately upon the expiration of the maximum period of eight (8) months from the execution of the lease contract, which intention was meant to avoid a situation wherein Huibonhoa would deliberately delay the completion of the building within the 8-month period to elude payment of rental starting March 1984. They also claimed that Huibonhoa instituted the case in anticipation of the ejectment suit they would file against her; that she was estopped from questioning the enforceability of the lease contract after having received monetary benefits as a result of her utilization of the premises to her sole profit and advantage; that the financial reverses she suffered after the assassination of Senator Benigno Aquino, Jr. could not be considered a fortuitous event that would justify the reduction of the monthly rental and extension of the contract of lease for five years; and that the “principle of contract of adhesion” in interpreting the lease contract should be strictly applied to Huibonhoa because it was her counsel who prepared it.[8] The Gojoccos prayed that Huibonhoa be ordered to pay them the sum of P495,000.00 representing unpaid rents from March 1, 1984 to January 31, 1985 and the monthly rent of P60,000.00 from February 1, 1985 until Huibonhoa shall have surrendered the premises to them, and that she be ordered to pay attorney’s fees, moral and exemplary damages and the costs of suit. On January 31, 1985, Rufina Gojocco Lim entered into an agreement[9] with Huibonhoa whereby, to put an end to Civil Case No. 9402, the former agreed to extend the term of the lease by three (3) more years or for eighteen (18) years from July 1, 1983. The agreement expressly provided that no rents would be collected unless and until the construction work was already completed or that during the construction, no monthly rental should be collected. It also provided that “in case some unforeseen event should dramatically increase the cost of the building, then the amount of monthly rent shall be reduced to such sum and the term of the lease extended for such duration as may be fair and equitable, bearing in mind the actual construction cost of the building.” The agreement recognized the fact that the Aquino assassination that resulted in the “hoarding of construction materials and the skyrocketing of the interest rates” on Huibonhoa’s loans, resulted in the increase in actual cost of the construction from P6,000,000.00 to between P11,000,000.00 and P12,000,000.00. There is no record that Rufina Gojocco Lim was dropped as a defendant in Civil Case No. 9402 but only Loretta Gojocco Chua and the Spouses Severino and Priscilla Gojocco filed the memorandum for the defendants in that case.[10] On March 9, 1987, the Makati RTC[11] rendered a decision holding that Huibonhoa had not presented clear and convincing evidence to justify the reformation of the lease contract. It considered as “misplaced” her contention that the Aquino assassination was an “accident” within the purview of Art. 1359 of the Civil Code. It held that the act of Rufina G. Lim in entering into an agreement with Huibonhoa that, in effect, “reformed” the lease contract, was not binding upon Severino and Loretta Gojocco considering that they were separate and independent owners of the lots subject of the lease. On this point, the trial court cited Sec. 25, Rule 130 of the Rules of Court which provides that the rights of a party cannot be prejudiced by the act, declaration or omission of another. It thus decided Civil Case No. 9402 as follows: “WHEREFORE, judgment is hereby rendered: a) Dismissing the plaintiff’s complaint and defendant Rufina Lim’s counterclaim, with costs against them; b) Ordering the plaintiff to pay to defendant Loretta Gojocco Chua the amount of P360,000.00, representing rentals due from March 1, 1984 to February 28, 1987, with interests thereon at the legal rate from date of the filing of the complaint until full payment thereof, plus the sum of P15,000.00 per month beginning March, 1987 and for as long as the plaintiff is in possession of the leased premises; c) Ordering the plaintiff to pay to defendant Severino Gojocco Chua the amount of P360,000.00, representing rentals due from March 1, 1984 to February 28, 1987, with interests thereon at the legal rate from date of the filing of the complaint until full payment thereof, plus the sum of P15,000.00 per month beginning March, 1987 and for as long as the plaintiff is in possession of the leased premises; d) Ordering the plaintiff to pay attorney’s fees in favor of the above-named defendants in the sum of P36,000.00, aside from costs of suit. SO ORDERED.” Upon motion of the Gojocco, the trial court amended the dispositive portion of its aforesaid decision in that Huibonhua was ordered to pay each of Loretta Gojocco Chua and Severino Gojocco the amount of P540,000.00 instead of P360,000.00 and that attorney’s fees of P54,000.00, instead of P36,000.00, be paid by Huibonhoa. On the other hand, in Civil Case No. 102604, the Metropolitan Trial Court of Manila granted Huibonhoa’s prayer that the case be excluded from the operation of the Rule on Sum |
