NIEVES PROPERTY VENTURES, INC., PLAINTIFF-APPELLEE, VS. STI SAN JOSE-NUEVA ECIJA REPRESENTED BY ITS PRESIDENT, RAFAEL VENTURINA, DEFENDANT-APPELLANT.
LANTION, J.A.C., J.:
“WHEREFORE, premises considered, the plaintiff having proved its case by mere preponderance of evidence, this Court hereby renders JUDGMENT ordering defendant:
a) to pay the due rent under the lease contract which as of March 04, 2010 amounted to Php810,000.00 and to pay interest thereon at the rate of six (6) percent per annum;
b) to pay attorney’s fee in the amount of Php30,000.00; and
c) to pay cost of the suit.
SO ORDERED.”[2]
THE FACTS
(As culled from the Records)
Plaintiff-Appellee Nieves Property Ventures, Inc., (hereafter Appellee) is the owner of a multi-storey building (Nieves building) situated at Bonifacio Street, San Jose City, Nueva Ecija.
On 5 June 2002, Appellee leased to Defendant-Appellant Systems Technology Institute (STI) San Jose Nueva Ecija, Inc., (Appellant), for a period of 10 years (from 16 June 2002 to 15 June 2012), the second floor and one commercial unit stall of the Nieves building for a monthly rent of Php50,000.000.[3]
On 18 October 2003, another lease agreement was executed by Appellee and Appellant amending the previous lease contract to include the third floor of the Nieves building for an additional monthly rental of Php25,000.00.[4]
On 6 June 2007, a second amendment to the leased contract was agreed upon by Appellee and Appellant to include another commercial unit stall for an additional rent of Php10,000.00, raising Appellant’s total monthly rent to Php90,000.00. All other terms and conditions in the original lease contract were confirmed and ratified by the parties.[5]
On 30 May 2009, or the seventh (7) year of the lease contract, Appellant, through its President Rafael Venturina sent a written notice to Appellee informing the latter that he is terminating the lease agreement and will vacate the Nieves building on 30 June 2009.[6] Appellant alleged that he is terminating the lease contract because of the inadequate space for the increasing student population, limited usable space of the building, repair and maintenance issues and high rental rate. In response, Appellee reminded Appellant that the lease contract is in effect until 15 June 2012 and that the reasons relied upon by Appellant are not valid to unilaterally terminate the lease.[7]
On 23 June 2009, Appellee sent a demand letter to Appellant to pay the amount of Php90,000.00 as rental payment for the period 16 May 2009 to 15 June 2009.[8] Instead, Appellant left the Nieves building on 30 June 2009. Thereafter, Appellee sent several letters to Appellant demanding due rents. However, no payment was made by Appellant.[9]
Since Appellant already vacated the Nieves building, Appellee, on 6 April 2010, utilized the subject premises as the location for its Nieves Center for Education, Inc.
Thereafter, on 12 May 2010, Appellee filed a Complaint for Breach of Contract with Damages[10] against Appellant before the Regional Trial Court of San Jose City (hereafter court a quo). The case was docketed as Civil Case No. (2010)-267-SJC and raffled to Branch 39 thereof. In the said complaint, Appellee alleged that Appellant’s unilateral termination of the lease contract is legally unjustified and that the unpaid rental, as of 4 March 2010, amounted to Php810,000.00.
In its answer, Appellant admitted not paying the rentals but justified it on the ground of the alleged failure of Appellant to undertake the necessary repairs of the roof of the top floor which caused class suspensions. Appellant averred that Appellee failed to comply with its obligation, as a lessor under Article 1654 of New Civil Code and that its action of suspending payment of the rent and vacating the Nieves building are justified under Article 1658 said Code.[11]
On 22 May 2013, the court a quo rendered the assailed Decision.
Aggrieved, Appellant appealed the above Decision before Us raising the following assignment of errors:
- THE TRIAL COURT ERRED IN HOLDING THAT THE LAW THAT GOVERNS IN THIS CASE IS ARTICLE 1659 AND IGNORING ARTICLE 1658 IN RELATION TO ARTICLE 1654, ALL OF THE CIVIL CODE.
- THE TRIAL COURT ERRED IN RENDERING [JUDGMENT] ORDERING THE DEFENDANT-APPELLANT TO PAY THE UNPAID RENT FOR THE REMAINDER OF THE LEASE PERIOD AS WELL AS ATTORNEY’S FEES TO THE PLAINTIFF-APPELLEE.[12]
THIS COURT’S RULING
The appeal fails.
Article 1658 of the New Civil Code provides:
Art. 1658. The lessee may suspend the payment of the rent in case the lessor fails to make the necessary repairs or to maintain the lessee in peaceful and adequate enjoyment of the property leased.
From the above provision, the law provides two (2) instances in which a lessee may suspend the payment of rent, that is, in case the lessor: a.) fails to make the necessary repairs on the leased property; and b.) fails to maintain the lessee in peaceful and adequate enjoyment of the same.
In this case, Appellant justifies its suspension of rent payment because of Appellee’s refusal to make the necessary repairs on the alleged leaking roof of the Nieves building. However, We find that Appellant cannot invoke said Article 1658 because under the lease contract, Appellant had obligated itself to undertake at its expense all repairs as may be required to maintain the premises in good state. Pertinent portion of the Contract of Lease reads:
“12. REPAIRS – The LESSEE shall maintain the Leased premises in good and tenable conditions, and no major alterations or repairs shall be undertaken without prior written approval of the LESSOR. It is understood that the LESSE (sic) shall be responsible for all minor or ordinary repairs caused by ordinary wear and tear, all repairs on water, electricity and sewerage installations.
During the existence of this lease, the LESSEE shall pay for the cost of repairs, and/or restoration of the damages cause on the Leased premises by the herein LESSEE, its employees, representatives, agents, clients and/or visitors.”[13]
Clearly, the above-cited stipulation shows that Appellant took responsibility to shoulder the cost of repairs to the Nieves building and is thus bound by their agreement. To be sure, stipulation which holds a lessee responsible for all the necessary repairs of the leased property is valid, as provided under Article 1654 of the Civil Code.
Art. 1654. The lessor is obliged:
(1) To deliver the thing which is the object of the contract in such a conditions as to render it fit for the use intended;
(2) To make on the same during the lease all the necessary repairs in order to keep it suitable for the use to which it has been devoted, unless there is a stipulation to the contrary;
(3) To maintain the lessee in the peaceful and adequate enjoyment of the lease for the entire duration of the contract.(Emphasis supplied)
Since Appellant voluntarily agreed to the terms and conditions of the Contract of Lease which includes the stipulation that it will bear all the necessary repairs on the lease property, Appellant cannot suspend the payment of rent due to Appellee. When the terms of the contract are clear and leave no room for interpretation, the literal meaning of its stipulations shall, therefore, control. A court has no alternative but to enforce the contractual stipulations in the manner they have been agreed upon and written.[14] Courts have no power to make or modify contracts and neither can they save parties from disadvantageous provisions. Thus, We agree with the conclusion of the court a quo that Appellant had no valid reason to suspend the payment of rentals under Art. 1658.
Appellant further contends that the court a quo erred in ordering it to pay the unpaid rent for the remainder of the lease period as well as attorney’s fees.
We disagree.
Article 1159 of the Civil Code provides that “obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.”[15] In deference to the rights of the parties, the law allows them to enter into stipulations, clauses, terms and conditions they may deem convenient; that is, as long as these are not contrary to law, morals, good customs, public order or public policy. Likewise, it is settled that if the terms of the contract clearly express the intention of the contracting parties, the literal meaning of the stipulations would be controlling.[16]
The Contract of Lease executed by Appellant and Appellee was for the a period of ten (10) years beginning 16 June 2002 to 15 June 2012. Under the said Contract, Appellant is bound to pay the monthly rent for the entire period of the lease.[17] Being the primary law between the parties, it governs the adjudication of their rights and obligations.[18] In this case, the fact remains that Appellant occupied the Nieves building and it derived benefit from such occupation, thus, it should pay the corresponding rental based on the Contract of Lease. However, Appellant can only be held liable to pay rent only until 4 March 2010 which amounted to Php810,000.00 since Appellee allowed the leased property to be used by another school (Nieves Center for Education, Inc.). We are one with the court a quo that no one shall enrich himself at the expense of another.
Anent the award of attorney’s fee, We find the same in order. The power of the court to award attorney’s fees under Article 2208[19] of the New Civil Code demands factual, legal, and equitable justification. Since Appellee was forced to litigate its cause, attorney’s fees should be awarded to it.
WHEREFORE, the instant appeal is DISMISSED. The Decision dated 22 May 2013 of the Regional Trial Court of San Jose City, Branch 39, in Civil Case No. (2010)-267-SJC STANDS.
SO ORDERED.
Veloso, V.S.E., (Chairperson) and Antonio-Valenzuela, N.G., JJ., concur.
[1] Penned by Presiding Judge Cynthia Martinez Florendo, Rollo, pp. 37-51
[2] Id., p. 557
[3] See Contract of Lease, Records, pp. 9-14
[4] See Addendum to Contract of Lease, Id., pp. 15-17
[5] See 2nd Addendum to Contract of Lease, Id., pp. 18-20
[6] Records, pp. 21-22
[7] Records, p. 23
[8] Id., p. 24
[9] Id., pp. 25-29
[10] Id., pp. 2-8
[11] Id., pp. 36-42
[12] Rollo, p. 21
[13] Records, p. 12
[14] Felsan Realty & Development Corporation vs Commonwealth of Australia, G.R. No. 169656, October 11, 2007
[15] Malvar vs Kraft Foods Phils., Inc., G.R. No. 183952, September 09, 2013
[16] Pryce Corporation vs Philippine Amusement and Gaming Corporation, G.R. No. 157480. May 6, 2005.
[17] See Records, p. 10
[18] Raquel-Santos vs Court of Appeals, G.R. No. 174986, July 07, 2009
[19] Art. 2208. In the absence of stipulation, attorney’s fees and expenses of litigation, other than judicial costs, cannot be recovered, except: (1) When exemplary damages are awarded; (2) When the defendant’s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest; (3) In criminal cases of malicious prosecution against the plaintiff; (4) In case of a clearly unfounded civil action or proceeding against the plaintiff; (5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff’s plainly valid, just and demandable claim; (6) In actions for legal support; (7) In actions for the recovery of wages of household helpers, laborers and skilled workers; (8) In actions for indemnity under workmen’s compensation and employer’s liability laws; (9) In a separate civil action to recover civil liability arising from a crime; (10) When at least double judicial costs are awarded; (11) In any other case where the court deems it just and equitable that attorney’s fees and expenses of litigation should be recovered. In all cases, the attorney’s fees and expenses of litigation must be reasonable.