G.R. No. L-28466. March 27, 1971
ALBERTO T. REYES, SATURNINO LIWANAG AND LORENZO HERNANDEZ, PETITIONERS, VS. THE COURT OF APPEALS AND TEODORO KALAW, JR., RESPONDENTS.
REYES, J.B.L., J.:
Appeal by petitioners-plaintiffs from the decision of the Court
of Appeals (in CA-G. R. No. 36043-R) affirming the decision of the Court of
First Instance of Manila (Civil Case No. 54369), with the sole modification
that plaintiffs are ordered to pay defendant (respondent herein) the sum of
P50,000.00 as temperate damages.
The pertinent facts are herein stated.
Plaintiffs-appellants are lessees of defendant’s premises located
at Nos. 686, 688 and 690 Rizal
Avenue, Manila, where they
also conduct their respective businesses.
The lease was oral and on a month-to-month basis. Plaintiffs have been occupying the premises
for a period of from 10 to 15 years
as of the filing of the complaint. On 8 May 1962, defendant started sending
out to each of said plaintiffs notices to vacate the premises to give way for
the demolition of the old building occupied by them and the eventual construction
of a new one. The notices were received
by plaintiffs on their respective dates, namely, 8 May 1962, 21
September 1962, 10
October 1962 and 15
January 1963. Each of the
said notices gave plaintiffs a period of time within which to move out. The last notice gave said plaintiffs 24 hours
within which to vacate the premises.
On 16 January 1963,
as previously scheduled, defendant started the demolition of the roofing and
upper sidings of the building and also the fencing thereof, although the
demolition of the back portion actually started on 7 January 1963.
On 17 January 1963,
plaintiffs filed a complaint for forcible entry with the City Court against
defendant, praying, among others, for a writ of preliminary injunction (which
was granted) and damages. The defendant
counterclaimed for ejectment and damages for alleged
loss of the use and occupation of his premises in the form of (a) fixed losses
in the amount of P177,869.06; (b) monthly losses in the amount of P27,295.00
from 15 January 1963; and
(c) P1,000.00 daily losses, also from 15
January 1963, until possession is restored.
On 23 February 1963,
the City Court rendered its decision in favor of plaintiffs, later amended on 24 May 1963 because of the
intervening Compromise Agreement between plaintiff Go Ban and defendant, the dispositive portion of which reads:
“WHEREFORE, the COMPROMISE AGREEMENT between Go Ban and the
defendant is hereby approved and judgment is hereby rendered in conformity
therewith; the lease agreement between Alberto T. Reyes, Lorenzo Hernandez and Saturnino Liwanag, on one hand
and the defendant on the other hereby extended to one (1) year from 23 February
1963 at the same rate (P800.00 a month); declaring the preliminary injunction
heretofore issued enjoining the defendant from further performing acts of
demolition of the premises hereby declared permanent during the period of the
intended lease, and ordering the defendant Teodoro Kalaw, Jr., to restore the premises to the same condition
as they were before demolition started, particularly restoring the roofing of
the premises and removing the fence thereon constructed within three (3) days
from receipt hereof; ordering the defendant to pay unto each of plaintiffs,
except Go Ban, compensatory damages for the impairment caused on their business
establishment at the rate of TWENTY-FIVE PESOS (P25.00) a day from 16 January
1963 until the premises shall have been restored to its former condition; to
pay the sum of TWO HUNDRED PESOS (P200.00) as attorney’s fees, plus the costs
of the suit.”
“Defendant’s counterclaim for want of merit is hereby
dismissed.”
Defendant appealed the aforesaid decision to the Court of First
Instance. In a decision dated 11 January 1965, later amended on 11 February 1965, the said Court
dismissed the complaint and all claims and counterclaims, among others. The dispositive
part of the decision follows:
“WHEREFORE, the Court hereby renders judgment, dismissing the
complaint and all claims and counterclaims; ordering plaintiff Alberto Reyes to
pay the P800.00 monthly rentals for and beginning with November, 1962, until he
vacates the premises; ordering each of plaintiffs Saturnino
Liwanag and Lorenzo Hernandez to pay defendant the
P800.00 monthly rentals from 15 January 1963 until they vacate the premises;
ordering the plaintiffs to vacate the premises designated as Nos. 686, 688 and
690 Rizal Avenue, Manila, immediately from and after
the date this judgment becomes final and executory.
“The preliminary injunction is hereby ordered dissolved. No costs.”
Both parties appealed to the Court of Appeals which, in turn,
rendered its decision on 21 November
1967, affirming the decision of the Court of First Instance, with
the sole modification that plaintiffs should also pay to defendant Kalaw the sum of P50,000.00 as temperate damages. The dispositive
portion of the decision is quoted below:
“WHEREFORE, with the sole modification that plaintiffs are
ordered to pay defendant the sum of P50,000.00 as temperate damages, the
decision appealed from is AFFIRMED in all other respects. Costs in this instance against the plaintiffs
in favor of defendant.”
Hence, the appeal by plaintiffs to this Court. The following errors are assigned in their
brief:
The Court of Appeals erred in –
1.
Concluding that defendant did not
take the law in his own hands, contrary to its own finding that the plaintiffs
were in possession of the premises as of the time of demolition;
2.
Refusing to decide the issue
raised in the plaintiffs’ second and third assignments of error, contrary to
Section 33 of the Judiciary Act and Section 4, Rule 51, of the Revised Rules of
Court; and in
3.
Awarding P50,000.00 temperate
damages aside from the usual monthly rental of P800.00 in favor of the
defendant.
The issue of whether respondent took the law in his own hands is
clearly factual. It invites calibration
of the whole evidence, considering mainly the credibility of witnesses,
existence and relevancy of specific surrounding circumstances, their relation
to each other and to the whole, and the probabilities of the situation. Being a question of fact, it is for the Court
of Appeals to decide[1],
and its findings will not be disturbed by this Court unless clearly baseless or
irrational.[2]
The exceptions do not obtain in this case.
It has been clearly established in the foregoing that respondent
was assured of petitioners’ vacating the premises after the Christmas season,
specifically on or before 15 January
1963. Respondent was putting
up a P1,700,000, 9-story, building in lieu of the old one occupied by
petitioners, among other tenants. As
early as 8 May 1962, petitioners
had been already notified “to vacate within 60 days” from said
date. Petitioners requested for an
extension until after the Christmas season for the reason that the 60-day
period was insufficient for petitioners to move their respective businesses to
new places. In the meantime, respondent
completed solution of the technical problems of the proposed building. The services of architect Juan Nakpil were contracted; the loan applications for the
project were followed up; municipal licenses were secured and paid for so that
the construction could be started; and a number of guards were even hired to
secure the site of the new building.
From 8 May 1962,
three more notices were sent to petitioners, dated 21 September 1962, 10 October 1962 and 15 January 1963, that construction would commence after
the Christmas season. These notices were
not questioned. On the contrary, and as
found by the Court of Appeals, petitioners led respondent to believe that the
premises would be voluntarily vacated on or before 15 January 1963.
Moreover, when the respondent started demolishing the back part of the
building on 7 January 1963,
which fact was known to petitioners, nothing was done to protest the demolition
or ask for another extension. On 16 January 1963, when the demolition
of the old building reached the portion tenanted by petitioners, petitioners
saw respondent merely to get a written assurance of priority in leasing out
spaces in the new building but not for another extension.
Under the foregoing circumstances, it can hardly be believed that
respondent forcibly entered the leased premises and took the law in his own
hands. The given assurance of vacating
on or before 15 January 1963
was clearly proved. Respondent’s belief
in good faith that tenant petitioners would leave voluntarily as scheduled was
well-founded, not only because of the uncontested reminders to vacate but also
because of petitioners’ passive attitude when, finally, the demolition
started. The fact, therefore, that
petitioners reneged on their promise and chose to continue staying in the
premises at the time the scheduled demolition took place should not be taken
against respondent. In view hereof,
there is no reason to disturb the Court of Appeals’ finding that “the
defendant’s act of ordering the fencing of the premises could not be considered
done in bad faith ….. (or) that he took the law in his own hands”.[3] A
pronouncement of good faith cannot be reviewed on appeal by certiorari,[4]
especially since We find no conflict in the Court of Appeals’ findings in this
regard.
The second issue was raised in Appellants’ Brief but not in the
main petition for certiorari. It is
alleged that the Court of Appeals refused to decide the second and third
assignments of error presented by plaintiffs in their appeal to the said Court,
which are: (a) the Court of First
Instance erred in not granting plaintiffs-appellants’ motion for the execution
of the mandatory injunctive relief granted in the City Court decision for
failure of the defendant-appellant to restore the roofings
and remove the fence constructed thereon within three days from receipt of the
decision and/or to pay the sum of P25.00 compensatory damages daily to each of
the plaintiffs-appellants until the premises are restored to their former
condition; and (b) in ordering each of the plaintiffs-appellants to pay P800.00
monthly rental in the premises under its present condition, devoid of roofings and with fencing on their frontage for at least
one year subsequent to the filing of this action.
Section 33 of the Judiciary Act of 1948[5]
partly provides that “every decision of the Court of Appeals shall contain
complete findings of fact on all issues properly raised before it”. This provision has been reproduced in Section
4, Rule 51, of the Revised Rules of Court.
In the case of Ramos, et al. vs. Ramos, et al.,[6]
it has been held that the law does not impose on the Court of Appeals the duty
of stating complete findings of facts on all errors assigned but merely on all
issues properly raised before it.
It is well-settled in this jurisdiction that, in a trial de
novo on appeal, the Court of First Instance will not affirm, reverse, or
modify the judgment appealed from inferior courts, for the simple reason that
there is no judgment to affirm or modify, because all the proceedings had in
the Municipal Court, including the judgment, do not in contemplation of law
exist, having been vacated upon perfection of the appeal; and the only instance
when said judgment appealed from is revived is when the appeal is withdrawn or
dismissed.[7]
For under Section 9, Rule 40, of the Rules of Court,[8] a
“perfected appeal” from the city court to the court of first instance
“shall operate to vacate the judgment” of the city court, and
“the action when duly docketed in the court of first instance shall stand
for trial de novo upon its merits, in accordance with the regular
procedure in that court, as though the same had never been tried before and was
originally there commenced.”[9]
Since all the proceedings in the city court including the judgment become, as
it were, inexistent in case of appeal to the Court of First Instance, and since
trial de novo must be held in the latter court, the execution of the
aforesaid decision of the City Court (requiring the lessor
to restore the roofing and remove the fence and/or pay P25.00 compensatory
damages daily to each of the plaintiffs-appellants until the premises are
restored to their former condition) was not yet proper and warranted. Moreover, if a case is to be tried de novo,
there is always the possibility that the trial court may make different findings
that will support a judgment contrary to that of the inferior court. As such, the rights of the parties are
changed. If the inferior court’s
decision were to be executed after appeal therefrom,
the Court of First Instance would have to undo what it had previously ordered
to be done; hence, justice would hardly be served if it were mandatory for the
Court of First Instance to order the execution of the City Court’s
decision. As it turned out, the original
judgment was superseded by that of the Court of First Instance in this
case. The City Court’s decision upon
rendition of the Court of First Instance judgment “becomes a thing of the
past, without life, purpose or effect”.
It is the decision of the Court of First Instance that prevails.[10]
Finally, the city court decision having been superseded, the issue raised now
has become moot and academic and, therefore, cannot be properly raised.
The same reasons hold true as regards the other error assigned in
the Court of Appeals. Besides, the
records reveal that in spite of the fencing and removal of the part of the
roof, plaintiffs were able to continue their respective businesses. The Court of Appeals in fact found as not
substantiated by competent evidence the claim of plaintiffs-appellants that
their respective gross sales suffered a reduction. The books of plaintiff Hernandez showed an
increase in his 1963 gross sales as compared to those of 1962.[11]
On the last issue of whether temperate damages may be awarded in
favor of respondent landlord, it has been held that while damages may be
adjudged in forcible entry and detainer cases, these
“damages” mean “rents” or “the reasonable compensation
for the use and occupation of the premises”,[12]
or “fair rental value of the property”.[13]
Profits which the plaintiff might have received were it not for the forcible
entry or detainer do not represent a fair rental
value.[14]
Former Chief Justice Moran makes the following comment as to the
nature of damages that may be recovered in an action for forcible entry and detainer:
“But what is the character of these damages? Since the only
issue in actions for forcible entry and detainer is
physical possession, the damages which plaintiff is entitled to are such as he
may have sustained as a mere possessor.
Material possession involves only the enjoyment of the thing possessed,
its uses and the collection of its fruits, and these are the only
benefits which the possessor is deprived of in losing his possession. In other words, plaintiff is entitled only to
those damages which are caused by his loss of the use and occupation of the
property, and not to such damages as are caused to the land or building during
the unlawful possession, which he may recover only if he were the owner of the
property, and he cannot be declared as such in an action for forcible entry and
detainer.
Damages to property may be recovered only by the owner in an ordinary
action.”[15]
This Court had further occasion to
explain the meaning of “damages” in ejectment
cases when it said in Mitschiener vs. Barrios, supra,
that –
“Undoubtedly, these pronouncements of the Supreme Court were
taken into consideration by the authors of the Rules of Court when, although in
section 1 of Rule 72[16],
plaintiff is authorized to sue for the restitution of possession together with
damages,’ in drafting section 6 of Rule 72,[17]
as to judgment to be pronounced, the word ‘damages’ was eliminated, placing, in
lieu thereof, the words ‘reasonable compensation for the use and occupation of
the premises’.
Sec. 6. Judgment. – If upon trial the court finds that the
complaint is not true, it shall render judgment in favor of the defendant for
the restitution of the premises, for the sum justly due as arrears of rent or
as reasonable compensation for the use and occupation of the premises, and for costs. If a counterclaim is established, the court
shall render judgment for the sum found in arrears from either party, and award
costs as justice requires.’
“That is, in an ejectment case,
plaintiff may recover either rents or the reasonable compensation for the use
and occupation of the premises, loosely designated in sections 1[18]
and 8[19]
of Rule 72, as ‘damages’, which may be designated also as ‘fair rental value of
the property.’ When rents are adjudged no reasonable compensation for the use
and occupation of the property can be adjudicated, while, inversely, when
reasonable compensation is adjudged, it is because no rents are
adjudicated.”
In the more recent case of Ramirez vs. Sy
Chit[20],
the aforesaid ruling on the meaning of damages was reiterated when this Court
held that damages recoverable by plaintiff under Section 1, Rule 70 (formerly
Rule 72), are those which correspond to the reasonable value of the use and
occupation of the property, which in this case is the agreed monthly rental of
P230.00 for the land leased. It thus
considered the award of P25.00 as damages for every day of delay in addition to
the agreed monthly rental as an error and without basis in law. The pertinent portion of the decision is
quoted below:
“The trial court held defendant liable ‘to pay plaintiff the
sum of P25.00 a day for every day of delay as damages until he finally vacates
the premises, in addition to the agreed current rental that may accrue’. This is an error. The damages recoverable by the plaintiff
under Section 1, Rule 70 (formerly Rule 72) are those which correspond to the
reasonable value of the use and occupation of the property, which in this case
is the agreed monthly rental of P230.00.
The award, therefore, of P25.00 as damages for every day of delay in addition
to the agreed monthly rentals is without basis in law.”[21]
Since temperate damages are neither
“rents” nor “reasonable compensation for the use and occupation
of the premises”, nor “fair rental value” as above-stated, and
since the agreed rental itself was adjudged in favor of respondent,[22]
We are constrained to deny the temperate damages awarded by the Court of
Appeals.
However, in view of the plaintiffs-appellants’ repeated reneging
on their promises to vacate, and their resorting to litigation to unreasonably
prolong their holding unto the appellee’s property
for eight years, the appellee is also entitled to
recover in these proceedings attorneys’ fees under Article 2208 of the New
Civil Code (Ramirez vs. Sy Chit, ante), fees
that we fix at P2,500. Moreover, this
decision does not preclude respondent from filing in the competent court a
separate suit for damages consisting of other losses allegedly sustained by him
as a result of the wrongful withholding of possession by
petitioners-appellants, especially since this question had been raised in the
city court but were beyond its jurisdiction to award. In Zambales Chromite Mining Co. vs. Robles,[23]
it was ruled by this Court that –
” ……… The Rules expressly provide that upon appeal from the
judgment of a justice of the peace to the court of first instance, the case
shall stand for trial de novo (Section 9, Rule 40). This provision has been interpreted to
mean that parties are prevented from raising issues in the court of first
instance which were not raised in the justice of the peace court.
x x x x x x x
x x x
“We must call attention to the fact that the rules, which have
the force of law, provide the manner and occasion when issues are to be raised
for adjudication. If the rules were to
be ignored and We permit litigants to raise issues without order and
regulation, confusion would arise. This
would certainly happen were we to allow the issues the defendant raised in his
answer in the Court of First Instance.
The defendant-appellant is not precluded from raising his counterclaims
in a separate action if he decides to do so.
But in view of the fact that the trial in the Court of First Instance
in an appeal is merely a trial de novo, We are constrained to dismiss the
counterclaims in pursuance of the dictates and mandate of the rules.”
(Emphasis supplied)
While said damages arose out of, or are necessarily connected
with, the same transaction or occurrence which was the wrongful withholding of
possession, they are not a compulsory counterclaim because they exceed the
jurisdiction of the inferior court. In Calo vs. Ajax International, Inc.,[24]
We held that the rule that a compulsory counterclaim is barred if not set up,
when applied to municipal courts presupposes that the amount involved is within
the said court’s jurisdiction. The
reason for the rule relating to counterclaims is to avoid multiplicity of suits
and to dispose of the whole matter in controversy in one action, and adjustment
of defendant’s demand by counterclaim rather than by independent suit.[25]
This reason, however, does not obtain where the amount exceeds the jurisdiction
of the inferior court, for, as aptly stated in Calo
vs. Ajax International, Inc., supra –
“ ……… even if the counterclaim in excess of the amount cognizable
by the inferior court is set up, the defendant cannot obtain positive
relief. The Rules allow this only for
the defendant to prevent plaintiff from recovering from him (Rule 5, Section
5, Rules of Court). This means that
should the court find both plaintiff’s complaint and defendant’s counterclaim
(for the amount exceeding said court’s jurisdiction) meritorious, it will
simply dismiss the complaint on the ground that defendant has a bigger
credit. Since defendant still has to
institute a separate action for the remaining balance of his counterclaim, the
previous litigation did not really settle all related controversies.”
FOR THE FOREGOING REASONS, the decision appealed from is
modified by deleting therefrom the award of temperate
damages, but sentencing plaintiffs-appellants to pay respondent Teodoro Kalaw, Jr., P2,500.
attorney’s fees, without prejudice to said respondent’s right to file a
separate suit with the competent court for the recovery of the other damages
claimed by him in the inferior courts.
Thus modified, the decision of the Court of Appeals is affirmed in all
other respects. No special pronouncement
as to costs.
Concepcion, C.J., Makalintal,
Zaldivar, Ruiz Castro, Fernando, Teehankee, Barredo,
Villamor, and Makasiar,
JJ., concur.
Dizon, J., did not take part.
[1] Vda. de Arroyo vs. El Beaterio
del Santissimo
Rosario de Molo, No. L-22005, 3 May 1968, 23 SCRA 525; Fortus
vs. Novero, No. L-22378, 29 June 1968, 23 SCRA 1330.
[2] Fortus vs. Novero, supra.
[3]
Page 8, Court of Appeals decision.
[4] Indias vs. Phil. Iron Mines, L-9987, 29 April 1957;
Dee C. Chuan & Sons, Inc. vs. Nahag, 95
Phil. 837; NLU vs. Zip Venetian Blind, et al., L-15827-28, 31 May 1961,
2 SCRA 509, cited in Nevans vs. Court of
Industrial Relations, No. L-21510, 29
June 1968, 23 SCRA 1321.
[5]
Republic Act No. 296, as amended by Republic Act No. 1605, effective 23 August 1956.
[6]
No. L-23007, 30 March 1967.
[7]
Co Tiamco vs. Diaz, 75 Phil. 672; Lichauco vs. Guash, 76
Phil. 5.
[8]
“Section 9. Effect of appeals. — A perfected appeal shall operate
to vacate the judgment of the justice of the peace or the municipal court, and
the action when duly docketed in the Court of First Instance shall stand for
trial de novo upon its merits in accordance with the regular procedure
in that court, as though the same had never been tried before and had been
originally there commenced. If the
appeal is withdrawn, or dismissed for failure to prosecute, the judgment shall
be deemed revived and shall forthwith be remanded to the justice of the peace
or municipal court for execution.”
[9] Lizo vs. Carandang, 73
Phil. 649, cited in Cue vs. Dolla, supra.
[10]
De la Fuente vs. Jugo,
76 Phil. 262; Zarcal, et al. vs. Herrero, et al., No. L-2423, 26 May 1949, 83 Phil. 711.
[11]
Page 14, Court of Appeals decision.
[12] Mitschiener vs. Barrios, 76 Phil. 55, cited in
Garcia vs. Peña, 77 Phil. 1011.
[13] Sparrevohn vs. Fisher, 2 Phil. 676; Mitschiener vs. Barrios, supra; Castueras vs. Bayona, 106
Phil. 340.
[14] Sparrevohn vs. Fisher, 2 Phil. 676, supra; Igama vs. Soria, 42 Phil.
11.
[15]
2 Moran, Comments on the Rules of Court, 1957 ed., page 301, italics supplied,
cited in Dy vs. Kuizon,
No. L-16654, 30 November 1961,
3 SCRA 1961.
[16]
Now Section 1, Rule 70, Revised Rules of Court.
[17]
Now Section 6, Rule 70, Revised Rules of Court, which reads:
“Sec. 6. Judgment. – If
upon trial the court finds that the allegations of the complaint are not true,
it shall render judgment for the defendant to recover his costs. If it finds them to be true, it shall render
judgment in favor of the plaintiff for the restitution of the premises, for
the sum justly due as arrears of rent or as reasonable compensation for the
use and occupation of the premises, and for costs. If a counterclaim is established, the court
shall render judgment for the sum found in arrears from either party, and award
costs as justice requires.” (Underscoring supplied).
[18] Supra.
[19]
Now Section 8, Rule 70, Revised Rules of Court.
[20]
No. L-22022, 26 December 1967,
21 SCRA 1364.
[21]
Underscoring supplied.
[22] Dispositive portion of the Court of First Instance decision
affirmed by the Court of Appeals, page 4, supra.
[23]
No. 16182, 29 August 1961,
2 SCRA 1051.
[24]
No. L-22485, 13 March 1968,
22 SCRA 996, and cases cited; See also Vivar vs.
Vivar, No. L-18667, 31 August 1963, 8 SCRA 847.
[25]
See Ledesma vs. Morales, G. R. No. L-3251, 24 August 1950, 47 O. G. 12 Supp.
December, 1951, page 382.