Alberto v. Palenzuela

DEL CASTILLO, J.:

A demand letter presented in evidence by a lessee to prove a lesser liability for unpaid rentals than that awarded by the trial court constitutes an admission of liability to the extent of such lesser amount. This Petition for Review on Certiorari1 assails the January 29, 2008 Decision2 of the Court of Appeals (CA) which dismissed the appeal in CA-G.R. CV No. 86925, and its September 15, 2008 Resolution3 denying petitioners' Motion for Reconsideration. Factual Antecedents Respondents Amparo Palenzuela, Virginia Abello, Gerardo Antonio Abello, Alberto Del Rosario, Ingeborg Regina Del Rosario, Hans Del Rosario, Margaret Del Rosario Isleta, Enrique Palenzuela and Carlos Miguel Palenzuela own several fishponds in Bulacan, Bulacan totaling 72 hectares.4 In March 1994, respondents, through their duly appointed attorney-in-fact and co-respondent Amparo Palenzuela, leased out these fishponds to petitioners, spouses Alberto and Susan Castro.

The lease was to be for five years, or from March 1, 1994 up to June 30, 1999.5 The Contract of Lease6 of the parties provided for the following salient provisions: 1. For the entire duration of the lease, the Castro spouses shall pay a total consideration of ₱14,126,600.00,7 via postdated checks8 and according to the following schedule: a. Upon signing of the lease agreement, petitioners shall pay ₱842,300.00 for the lease period March 1, 1994 to June 30, 1994;9 b.

On or before June 1, 1994, petitioners shall pay ₱2,520,000.00 for the one-year lease period July 1, 1994 to June 30, 1995;10 c. On or before June 1, 1995, petitioners shall pay ₱2,520,000.00 for the one-year lease period July 1, 1995 to June 30, 1996;11 d. On or before June 1, 1996, petitioners shall pay ₱2,520,000.00 for the one-year lease period July 1, 1996 to June 30, 1997;12 e.

On or before June 1, 1997, petitioners shall pay ₱2,796,000.00 for the one-year lease period July 1, 1997 to June 30, 1998;13 and f. On or before June 1, 1998, petitioners shall pay ₱2,928,300.00 for the one-year lease period July 1, 1998 to June 30, 1999.14 2. Petitioners committed to pay respondents the amount of ₱500,000.00 in five yearly installments from June 1, 1994.

The amount represents arrears of the previous lessee, which petitioners agreed to assume;15 3. Petitioners shall exercise extraordinary care and diligence in the maintenance of the leased premises, with the obligation to maintain in good order, repair and condition, among others, two warehouses found thereon;16 4. Necessary repairs,17 licenses, permits, and other fees18 necessary and incidental to the operation of the fishpond shall be for petitioners' account; 5.

Petitioners shall not sublease the premises to third parties;19 and, 6. Should respondents be constrained to file suit against petitioners on account of the lease, the latter agrees to pay liquidated damages in the amount of ₱1,000,000.00, 25% as attorney's fees, and costs of the suit.20 The lease expired on June 30, 1999, but petitioners did not vacate and continued to occupy and operate the fishponds until August 11, 1999, or an additional 41 days beyond the contract expiration date. Previously, or on July 22, 1999, respondents sent a letter21 to petitioners declaring the latter as trespassers and demanding the settlement of the latter's outstanding obligations, including rent for petitioners' continued stay within the premises, in the amount of ₱378,451.00, broken down as follows: Unpaid balance as of May 31, 1999 for the fifth year of the lease ₱111,082.00 Accrued interest from May 31, 1999 to July 31, 1999 at 16% 23,344.00 Trespassing fee for the whole month of July 1999 244,025.00 22 Total owed to the Lessors