Aguilar v. Court Of Appeals

KAPUNAN, J.:

Assailed in this petition for review on certiorari is the decision of the Court of Appeals sustaining the trial court's ruling that there was presumptive delivery of the subject property upon execution of the lease contract. The facts are as follows: On July 6, 1982, petitioner Aramis B. Aguilar entered into a lease agreement with private respondents, Spouses Aurelio T. Juguilon and Patria A. Juguilon. The subject of the lease were two adjacent parcels of land with an area of 1,949 square meters located at the corner of Libertad St.

and Cinco de Junio St., Pasay City, covered by TCT Nos. 16099 and 16100, respectively registered under the name of the spouses. The pertinent provisions of the lease agreement read as follows: 1. The term of the lease shall be for a period of Twenty Five (25) years, commencing on October 1, 1982, and terminating at midnight of September 30, 2007; 2.

The LESSEE proposes that the leased property should form a commercial business center and all buildings and improvements thereon shall be used and occupied by commercial businesses primarily dedicated to the retail and merchandising trade of goods and services; 3. The LESSEE must, therefore, construct not more than a three-storey concrete framed building for the physical facilities of such commercial establishment and businesses. 4.

(a) the LESSEE or its assignees shall pay to LESSOR, by way of rental for the leased property, as follows: 1âwphi1 1st Year - P10.00 per sq. m. 2nd Year to 5th year - 13.50 "

" " 6th Year - 16.50 "

" " 7th "

- 18.00 " " "

8th " - 19.50 " "

" 9th " - 22.00 "

" " 10th "

- 24.00 " " "

11th " - 26.00 " "

" 12th " - 28.00 "

" " 13th "

- 30.00 " " "

14th " - 32.00 " "

" 15th " - 34.00 "

" " 16th "

- 36.00 " " "

17th " - 39.00 " "

" 18th " - 42.00 "

" " 19th "

- 45.00 " " "

20th " - 48.00 " "

" 21st " - 51.00 "

" " 22nd "

- 55.00 " " "

23rd " - 59.00 " "

" 24th " - 63.00 "

" " 25th "

- 67.00 " " "

The basis of the computation should be the total area as stated in the two transfer certificates of titles herein-stated minus the required setback for sidewalks and other requirements by the Pasay City, government, Metro Manila Commission and other regulatory government bodies or agencies. The rental shall be liquidated and paid, without necessity of demand, at the domicile or office of the LESSOR or its assigns, within ten (10) days after the end of every calendar month. xxx (e) The LESSEE reserves the right to assign and convey its rights and interests to his lease as well as the leased property in favor of any party or parties provided that the terms and conditions of this contract are respected.

In such cases, copies of such contracts of assignment or conveyance shall be furnished the LESSOR for its record. xxx 13. The LESSOR is solely and primarily responsible in ejecting the present two tenants occupying the ground floor of the present existing building.

However, the LESSEE agrees to assist the LESSOR in persuading the said tenants to vacate the building premises. The LESSEE further agrees to assist the LESSOR in the demolition of the existing building on the leased property, all salvaged building materials accruing to the LESSOR 14. The LESSEE agrees to advance at least one year rental of the leased property payable 50% upon the signing of this lease contract and 50% after LESSOR vacates the building premises within ninety (90) days from the signing of this contract.1 As provided therein, petitioner paid the private respondents the advance rentals for one (1) year in the amount of P210,000.00 on July 7, 1982.

To comply with their obligations, on the other hand, the private respondents vacated the second floor of the building which they were using as their residence and moved to a rented house located at Leveriza St.

At the same time, an action for unlawful detainer was filed against the two tenants occupying the ground floor. They were finally evicted from the premises in March, 1983. Thereafter, on May 31, 1983, the private respondents obtained a demolition permit from the building official of Pasay City to cause the demolition of the existing building.

Said permit was handed to petitioner two days after it was procured. Because of the aforesaid delay in the ejectment of the tenants, the parties on April 14, 1985 entered into an Amendment of the Contract of Lease deferring the commencement of the 25-year period of lease to October 1, 1983. The amendment reads as follows: WHEREAS, there was a delay in the implementation of said contract of lease by reason of the failure of the two (2) tenants occupying the ground floor of the present existing apartment building to vacate the building; WHEREAS, during the intervening period, the LESSEE has made certain proposals to amend and the LESSOR has agreed to said proposals to amend the aforesaid Lease Contract; NOW, THEREFORE, for and in consideration of the foregoing premises, the LESSOR and the LESSEE hereby agrees; THAT the Contract of Lease executed on July 6, 1982, as hereinmentioned is hereby amended as follows: 1.

Paragraph 1, page 2, is hereby amended to read - - 'The term of the lease shall be for a period of twenty five (25) years, commencing on October 1, 1983, and terminating at midnight of September 30, 2008;2 Since construction of a commercial building or even the demolition of the existing building on the leased premises had not yet started by the end of the year of 1983, the private respondents decided to terminate their lease of the rented house at Leveriza Street where they were paying P4,500.00 a month and moved back to their building with the promise that they would vacate the place as soon as its demolition would be undertaken to give way to the construction of a commercial building. Petitioner, meanwhile, proposed the construction of a temporary structure measuring about 200 square meters on the leased premises. The private respondents gave their consent upon the assurance that said structure which the petitioner would temporarily use as a restaurant shall be converted into a bodega where the materials for the construction of the commercial building would be kept once construction started.

On June 18, 1985, the petitioner wrote a letter to the private respondents in this wise: Dear Mr. & Mrs. Juguilon: This will confirm our verbal agreement regarding the application of the amount of ₱210,000.00 which I paid as advance rental to you embodied in our Contract of Lease executed on July 6, 1982. Accordingly, the said amount is being applied as monthly rental corresponding to the area which I am presently occupying with a dimension of 28 meters frontage along Libertad St. and 28 meters deep, minus the required set back, in accordance with the rental rate contained in the aforementioned Contract of Lease, as follows: 1.

₱7,560.00 monthly rental fee for the period October 1, 1983 up to September 30, 1984 or a total of ₱90,720.00 for the said period; 2. ₱10,200.00 as monthly rental fee for the period October 1, 1984 up to September 1, 1985 or a total of ₱122,400.00 for the said period. The above agreement is however without prejudice to my contractual rights in so far as the undelivered area is concerned.

The lease is deemed suspended until the same is actually delivered and accepted. Unless we hear from you within five (5) days from receipt hereof, it is deemed understood that the foregoing is in order.3 On July 1, 1985, the petitioner informed the private respondents that he was assigning all his rights over the leased premises to Liberty Builders & Development Corporation. It reads: Dear Mr. & Mrs. Juguilon: You are hereby notified that the Liberty Builders & Development Corporation shall immediately occupy and start a building construction on the leased premises covered by T.C.T.

No. 16099 and T.C.T. No. 16100 subject of our formal contract of lease and amendment thereto dated July 6, 1982 and April 14, 1983, respectively. This serves likewise as authority for the Liberty Builders & Development Corporation to enter the premises and start construction accordingly.4 In reply to the aforesaid letters, the private respondents sent a Letter dated July 11, 1985 to the petitioner which states: Dear Sir: This will acknowledge receipt of your letters dated June 18, 1985 and July 1, 1985 respectively, and with reference to the first letter please be informed that we had a written Contract of Lease which you personally prepared and which we executed on July 6, 1982. There was no verbal agreement between us although there was an agreement which was also prepared by you entitled 'AMENDMENT OF CONTRACT OF LEASE' dated April 14, 1983 which deferred the beginning of the lease which now reads: "The term of the lease shall be for a period of twenty-five (25) years, commencing on October 1, 1983, and terminating at midnight of September 30, 2008."

And the rentals as provided in the Contract of Lease remains to be in paragraph no. 4 (a): "The LESSEE or its assigns shall pay to the LESSOR by way of rental for the leased property as follows: 1st Year - P10.00 per sq.m. 2nd Year to 5th Year - P13.50 per sq.m.

plus the subsequent years." And, the subsequent paragraph no. 5 reads as follows: "That in case of an official devaluation of the peso in relation to the U.S. dollar, a corresponding adjustment on the rental of the land is automatically made.

As a point of reference, it is hereby agreed that the present value of the peso vis-à-vis the U.S. dollar is P8.50." The figures and the area now under occupancy by you as stated in your letter of June 18, 1985 are not accurate as the area of the existing house now occupied by us is only 432 square meters, which when deducted from the total area of the two parcels of land under lease to you is One Thousand Five Hundred Seventeen (1,517) square meters. And, as aforestated your rentals will automatically adjust to the value of the dollar to the peso, your accrued rentals are as follows: October 1, 1983 to Sept.

30, 1984 - P437,810.68 October 1, 1984 to June 30, 1985 - P410,453.13 TOTAL RENTALS DUE