THIRD DIVISION
G.R. No. 176986, January 13, 2016
NISSAN CAR LEASE PHILS., INC., Petitioner, v. LICA MANAGEMENT, INC. AND PROTON PILIPINAS, INC., Respondents.
D E C I S I O N
JARDELEZA, J.:
This is a Petition for Review on Certiorari1 filed by Nissan Car Lease Philippines, Inc. (NCLPI) to assail the Decision2 and Resolution3 dated September 27, 2006 and March 8, 2007, respectively, of the Court of Appeals (CA) in CA-G.R. CV No. 75985. The CA affirmed with modification the Decision4 of the Regional Trial Court dated June 7, 2002 and ruled that there was a valid extrajudicial rescission of the lease contract between NCLPI and Lica Management, Inc. (LMI). It also ordered NCLPI to pay its unpaid rentals and awarded damages in favor of LMI and third-party respondent Proton Pilipinas, Inc. (Proton).
WHEREFORE, in view of the foregoing, judgment is rendered in plaintiff LICA MANAGEMENT INCORPORATED's favor. As a consequence of this, defendant NISSAN CAR LEASE PHILIPPINES, INC. is directed to pay plaintiff the following:ChanRoblesVirtualawlibrary1.) [P]2,696,639.97 representing defendant's unpaid rentals inclusive of interest and penalties up to 12 November 1996, plus interest to be charged against said amount at the rate of twelve percent (12%) beginning said date until the amount is fully paid.The third party complaint filed by defendant is DENIED for lack of merit and in addition to the foregoing and as prayed for, defendant NISSAN is ordered to pay third party defendant PROTON PILIPINAS INC. the sum of Two Hundred Thousand Pesos ([P]200,000.00) representing exemplary damages and attorney's fees due.
2.) Exemplary damages and attorney's fees amounting to Two Hundred Thousand Pesos ([P]200,000.00) and litigation expenses amounting to Fifty Thousand Pesos ([P] 50,000.00).
SO ORDERED.37chanroblesvirtuallawlibrary
WHEREFORE, the appealed Decision dated June 7, 2002 of the trial court is affirmed, subject to modification that:
(1) The award of exemplary damages of P100,000.00 each in favor of plaintiff-appellee and third-party defendant-appellee is reduced to P50,000.00 each;
(2) The award of attorney's fees of P100,000.00 each in favor of plaintiff-appellee and third-party defendant- appellee is reduced to P50,000.00 each;
(3) The amount of unpaid rentals is reduced from P2,696,639.97 to P2,365,569.61, exclusive of interest; and.
(4) Plaintiff-appellee is ordered to return the balance of the security deposit amounting to P883.253.72 to defendant-appellant.
The Decision dated June 7, 2002 is affirmed in all other respects.
SO ORDERED.47chanrobleslaw
WHEREFORE, the motion for reconsideration filed by defendant-appellant Nissan Car Lease is denied for lack of merit.
With respect to the motion for clarification filed by plaintiff-appellee Lica Management, Inc., paragraph (3) of the dispositive portion of the Decision is hereby clarified to read as follows:ChanRoblesVirtualawlibrary(3) The amount of unpaid rentals is reduced from P2,696,639.97 to P2,365,569.61, inclusive of interest and rjenajties up to November 12, 1996, plus interest to be charged against said amount at the rate of twelve per cent (12%) beginning said date until the amount is fully paid.SO ORDERED.50chanroblesvirtuallawlibrary
1. May a contract be rescinded extrajudicially despite the absence of a special contractual stipulation therefor?
2. Do the prevailing facts warrant the dismissal of [LMI]'s claims and the award of NCLPI's claims?
3. How much interest should be paid in the delay of the release of a security deposit in a lease contract?51chanroblesvirtuallawlibrary
[T]he following officials or employees of the company can sign the verification and certification without need of a board resolution: (1) the Chairperson of the Board of Directors, (2) the President of a corporation, (3) the General Manager or Acting General Manager, (4) Personnel Officer, and (5) an Employment Specialist in a labor case.
xxx [T]he determination of the sufficiency of the authority was done on a case to case basis. The rationale applied in the foregoing cases is to justify the authority of corporate officers or representatives of the corporation to sign xxx, being "in a position to verify the truthfulness and correctness of the allegations in the petition."56 (Emphasis and underscoring supplied)
As revealed from the evidence presented by PROTON however, even before [NCLPI] represented that it would try to negotiate a possible sub-lease of the premises, it had, without any semblance of authority from [LMI,] already effectively subleased the subject premises to PROTON and allowed the latter not only to enter the premises but to renovate the same.
[NCLPI]'s assertion that they only allowed PROTON to utilize the premises for ten days as a display center for Audi cars on the occasion of the historic visit of Chancellor Helmut Kohl of Germany to the Philippines is belied by the evidence offered by PROTON that by virtue of a Memorandum of Agreement [NCLPI] had already permitted PROTON "to immediately commence renovation work even prior to the execution of the Contract of Sublease" and had accepted a check from PROTON representing the rental deposit under the yet to be executed Contract of Sublease, x x xchanRoblesvirtualLawlibraryx x x x
Besides, the court is not inclined lo show [NCLPl] any sympathy x x x because it came to court with unclean hands when it accused [LMI] and PROTON of being guilty parties when they supposedly connived with each other to oust [NCLPl] from the leased premises when in truth and in fact, [NCLPl]'s lease was already terminated when it pursued negotiations to sub-lease (he premises to PROTON then giving the latter the assurance they would be able lo obtain [LMI]'s consent to the sublease when this was very remote, in light of [NCLPI]'s failure to update its rental payments.63 (Emphasis and underscoring supplied)
There is no merit in [NCLPl]'s claim for damages allegedly arising from |LMl|'s failure to maintain it in peaceful possession of the leased premises. It was [NCLPl] who breached the lease contract by defaulting in the payment of lease rentals, entering into a sublease contract with [Proton] and allowing [Proton] to introduce renovations on the leased premises without the consent of [LMl].64 x x x (Emphasis supplied)
6.15. In this case, [LMI] did not comply with the requirement laid down in Section 2 of Rule 70 of the Rules of Court, in unceremoniously ejecting [NCLPl] from the property. The said Rule explicitly provides that the lessor shall serve a written notice of the demand to pay or comply with the conditions of the lease and to vacate or post such notice on the premises if no person is found thereon, giving the lessee 15 days to comply with the demand. [LMI]'s demand letter dated 16 October 1996 provides only a period of five days for [NCLPI] to comply with such demand and, thus, defective.66 (Emphasis and underscoring supplied)
6.1. The power to rescind is judicial in nature x x x
6.2. Nevertheless, the Supreme Court has allowed extrajudicial rescission if such remedy is specifically provided for in the contract. A provision granting the non- defaulting party merely a right to rescind would be superfluous because by law, it is inherent in such contract [see by analogy Villanueva, PHILIPPINE LAW ON SALES, P. 238(1998)].
x x x x
6.4. [Paragraph 16],70 however, cannot be construed as an authority for either party to unilaterally and extrajudicially rescind the Lease Contract in case of breach by the other party. All that [Paragraph] 16 affords the aggrieved party is merely the right to rescind the lease contract, which is the very same right already granted under Article 1191 of the Civil Code.71 (Emphasis and underscoring in the original)
[T]he law definitely does not require that the contracting party who believes itself injured must first file suit and wait for a judgment before taking extrajudicial steps to protect its interest. Otherwise, the party injured by the other's breach will have to passively sit and watch its damages accumulate during the pendency of the suit until the final judgment of rescission is rendered when the law itself requires that he should exercise due diligence to minimize its own damages (Civil Code, Article 2203). (Emphasis and underscoring supplied)
This notwithstanding, jurisprudence still indicates that an extrajudicial rescission based on grounds not specified in the contract would not preclude a party to treat the same as rescinded. The rescinding party, however, by such course of action, subjects himself to the risk of being held liable for damages when the extrajudicial rescission is questioned by the opposing party in court. This was made clear in the case of U.P. v. De los Angeles, wherein the Court held as follows:ChanRoblesVirtualawlibraryOf course, it must be understood that the act of a party in treating a contract as cancelled or resolved on account of infractions by the other contracting party must be made known to the other and is always provisional, being ever subject to scrutiny and review by the proper court. If the other party denies that rescission is justified, it is free to resort to judicial action in its own behalf, and bring the matter to court. Then, should the court, after due hearing, decide that the resolution of the contract was not warranted, the responsible party will be sentenced to damages; in the contrary case, the resolution will be affirmed, and the consequent indemnity awarded to the party prejudiced.
In other words, the party who deems the contract violated may consider it resolved or rescinded, and act accordingly, without previous court action, but it proceeds at its own risk. For it is only the final judgment of the corresponding court that will conclusively and finally settle whether the action taken was or was not correct in law. x x x (Emphasis and underscoring in the original)
In its appellant's brief, [NCLPI] admitted that it had rental arrears of P1,300,335.60 as of May 1996. Additionally, the statement of account submitted by [LMI] showed that from June 1996 to October 1996 the rental arrears of [NCLPI] amounted to P1,065,234.01. Hence, the total of said rental arrears not disputed by the parties is P2,365,569.61 x x x.81 (Emphasis and underscoring supplied)
There is no merit in [NCLPIf s claim for damages allegedly arising from [LMIJ's failure to maintain it in peaceful possession of the leased premises. It was [NCLPI] who breached the lease contract x x x Moreover, the lease contract between [LMI] and [Proton] was entered into only on November 8, 1996 x x x after the lease contract between [LMI] and [NCLPI] had been terminated. As aptly noted by the trial court:x x x x
In other words, while in its responsive pleading [NCLPI] claims |that| it was fooled into allowing [Proton] to occupy the subject premises for a limited period, alter which the latter, in alleged collusion with [LMI] unilaterally usurped the premises for itself, the evidence shows thai it was |IMCLPI| which misrepresented itself to PROTON as being a lessee of good standing, so that it could induce the latter to occupy and renovate the premises when at that time the negotiations were underway, the lease between [LMI] and [NCLPI] had already been terminated.92 (Emphasis and underscoring supplied)
(1) NCLPI is ordered to pay LMI and Proton exemplary damages of P50,000.00 and attorney's fees of P50,000.00, each;
(2) NCLPI is ordered to pay the amount of P2,365,569.6I unpaid rentals, with interest at the rate of six percent (6%) per annum computed from October 18, 1996 until the date of finality of this judgment. The total amount shall thereafter earn interest at the rate of six percent (6%) per annum from the finality of judgment until its satisfaction;
(3) LMI is ordered to return to NCLPI the balance of the security deposit amounting to P883,253.72, with interest at the rate of six percent (6%) starting March 25, 2003 until the finality of this Decision, after which the total amount shall earn interest at the rate of six percent (6%) from the finality of this Decision until satisfaction by LMI.94chanrobleslaw
Endnotes:
* Designated additional Member in lieu of Associate Justice Bienvenido L. Reyes, per Raffle dated September 3, 2014.
** Designated additional Member in lieu of Associate Justice Diosdado M. Peralta per Raffle dated November 11, 2015.
1Rollo, pp. I 1-35.
2 Id. at 30-52. Penned by Associate Justice Fernanda Lampas Peralta with Associate Justices Bienvenido L. Reyes, now a member of this Court, and Myrna Dimaranan-Vidal concurring.
3Id. at 54-58.
4Id. at 144-168. Penned by Judge Marissa Macaraig-Guillen.
5 Id. at 60, 65.
6 Id. at 65-7 I.
7 Id. at 60. 72.
8 As of May 1996, id. at 60.
9Rollo, p. 60.
10 Id. at 61.
11 Covering a portion of July 1996 up to and including October 1996. Id. at 73.
12 Id.
13 Id. at 102-103.
14 Id. at 104.
15 Id. at 142-143.
16 Id.
17 Id. at 74-75. See also id. at 61-62.
18 Id. at 139.
19 Docketed as Civil Case No. 96-1840 before the RTC, Branch 60 of Makati City. Id. at 59-64.
20 Id. at 63.
21 Id. at 105-106.
22 Id. at 109.
23 Id. at 107.
24 Id. at 108.
25 Id. at 84-94.
26 Id. at 111-118.
27 Id. at 88.
28 Id. at 88-89.
29 Id. at 136.
30 Id. at 76-83.
31 Id. at 137-143.
32 Id. at 137.
33 Id. at 137.
34 Id. at 139.
35 Id. at 139-140.
36 Id. at 144-168.
37 Id. at 168.
38 Id. at. 166.
39 Id.
40 Id. at 69. This paragraph reads:ChanRoblesVirtualawlibrary16. BREACH OR DEFAULT - Any breach or default by either party of any of the terms and conditions of this Contract shall be sufficient ground for the aggrieved party to rescind the same.41 Id. This paragraph reads:ChanRoblesVirtualawlibrary18. DAMAGES - It is hereby mutually agreed and covenanted that non-compliance by either party with any of the provisions of this Contract to be performed by it and which may be the basis of a suit by the other shall entitle the injured party to collect such damages it may sustain.42 Id. at 65-71, 162.
43 Id. at 164.
44 Id. at. 169-206
45 Id. at 171.
46 Id. at 39-52.
47 Id. at 51-52.
48 CA rollo, pp.
49 Id. at 205-268.
50Rollo, pp. 54-58.
51 Id. at 11.
52 Id. at 312-327.
53 Id. at 315.
54 Swedish Match Philippines Inc. v. The Treasurer of the City of Manila, G.R. No. 181277, July 3, 2013, 700 SCRA 428, 434.
55 Id., citing Shipside Incorporated v. Court of Appeals, G.R. No. 143377, February 20, 2001, 352 SCRA 334, 345-346.
56PCI Travel Corporation v. National Lahor Relations Commission, G.R. No. 154379, October 31, 2008, 570 SCRA 315, 321, citing Cagayun Valley Drug Corporation v. Commissioner of Internal Revenue, G.R. No. 15 1413, February 13. 2008, 545 SCRA 10, 18-19. See also University of the East v. Pepanio, G.R. No. 193897, January 23, 2013, 689 SCRA 250, 258.
57Rollo, p. 35.
58 See also PCI Travel Corporation v. National Labor Relations Commission, supra.
59 Id. at 73.
60 Id. at 23, 74-75.
61 Id. at 66-67. This paragraph reads:ChanRoblesVirtualawlibrary4. USE OF LEASED PREMISES - The LESSEE shall use and allow the use of the Leased Premises exclusively for legitimate business, industrial and commercial purposes and for such purposes as the premises are presently devoted and shall not divert the same or allow the diversion thereof to other uses or purposes without the written consent of the LESSOR. The LESSOR shall provide the LESSEE with written notice requesting that the LESSEE cease any operations and activities which the LESSOR deems to be non[-]acceptable use of the premises.62 Id. at 67. This paragraph reads:ChanRoblesVirtualawlibrary
The LESSEE shall not sublease the premises to other parties without the prior written consent of the LESSOR[.]5. IMPROVEMENTS - The LESSEE may not introduce any structural changes, improvements or alterations to the Leased Premises without the LESSOR'S prior written consent, however, any such improvements or alterations shall upon the expiration or termination of this Contract inure to the benefit of the Leased Premises and become the LESSOR'S property, without any obligation on the latter's part to pay or refund the LESSEE for its cost or value, except those improvements which can be removed without causing damage to the Leased Premises.63Rollo, pp. 163-164, 167.
64 Id. at 48.
65Bank of the Philippine Islands v. Leobrera, G.R. No. 137147, November 18, 2003, 416 SCRA 15, 18, citing Vicente v. Planters Development Bank, G.R. No. 136112, January 28, 2003, 396 SCRA 282, 290.
66Rollo, p. 23.
67 RULES OR COURT, Rule 70, Sec. 2 provides:ChanRoblesVirtualawlibrarySEC. 2. Lessor to proceed against lessee only after demand. - Unless otherwise stipulated, such action by the lessor shall be commenced only after demand to pay or comply with the conditions of the lease and to vacate is made upon the lessee, or by serving written notice of such demand upon the person found on the premises, or by posting such notice on the premises if no person be found thereon, and the lessee fails to comply therewith after fifteen (15) days in the case of land, or live (5) days in the case of buildings.68Rollo, pp. 139, 142.
69 Id. at 17-20.
70 Id. at 124. This Paragraph reads:ChanRoblesVirtualawlibrary16. BREACH OR DEFAULT - Any breach or default by either party of any of the terms and conditions of this Contract shall be sufficients wound for the party to rescind the same. (Emphasis supplied)71 Id at 185-186, 188.
72 Multinational Village Homeowners Association, Inc. v. Ant Security & Surveillance Agency, Inc., G.R. No. 154852, October 21, 2004, 441 SCRA 126. 135; Casino, Jr. v. Court of Appeals, G.R. No. 133803, September 16, 2005, 470 SCRA 57, 67-68. Sec also University of the Philippines v. De los Angeles, G.R. No. L-28602, September 29, 1970, 35 SCRA 102, 107; and the Concurring Opinion of Justice Marvic Mario Victor F. Leonen in EDS Manufacturing, Inc. v. Healthcheck International. Inc., G.R. No. 162802, October 9. 2013, 707 SCRA 1 3.3. 147-148.
73 Supra.
74 G.R. No. 80479, July 28, 1989, 175 SCRA 656.
75 G.R. No. 129107, September 26, 2001, 366 SCRA 41, 48.
76 Supra at 143, citing Iringan v. Court of Appeals, id.
77 Alcaraz v. Tangga-an, G.R. No. 128568, April 9, 2003, 401 SCRA 84, 92, Sec also Tan v. Court of Appeals, supra at 662.
78 G.R. No. 190080, June 11, 2014, 726 SCRA 259, 273-274.
79University of the Philippines v. De Los Angeles, supra at 108.
80Golden Valley Exploration, Inc. v. Pinkian Mining Company, supra at 272. 274, citing De Luna v. Abrigo, G.R. No. L-57455, January 18, 1990, 181 SCRA 150, 158. See also Olympic Mines and Development Corp. v. Platinum Group Metals Corporation, G.R. No. 178188, August 14, 2009, 596 SCRA 314; Pangilman v. Court of Appeals, G.R. No. 83588. September 29, 1997, 279 SCRA 590.
81 Rollo, p. 50.
82 G.R. No. 189871, August 13, 2013, 703 SCRA 439, 457-459.
83Rollo, p. 73, See also Gilat Satellite Networks, Ltd. v. United Coconut Planters Bank General Insurance Co., Inc., G.R. No. 189563, April 7, 2014, 720 SCRA 726. 741.
84Rollo, p. 3 I.
85 Id. at 121. This Paragraph reads:ChanRoblesVirtualawlibrary3. SECURITY DEPOSIT - During the effectivity of this Contract, the LESSEE shall ensure that there is on deposit at all time with the LESSOR an amount equivalent to three (3) months rental payments which shall answer for water, gas[,] electricity, telephone, garbage fees, or damages to the premises aside from ordinary wear and tear, the liabilities for which shall be deducted from the deposit and the balance, if any, shall he refunded to the LESSEE not later than seven (7) days from the termination of this lease. The security deposit cannot be applied against unpaid rental payments, x x x (Emphasis and underscoring supplied)86 Id. at 51.
84 Id. at 202-203.
88Nacar v. Gallery Frames, supra.
89Rollo, p. 31. Emphasis supplied.
90 Id. at 122. Paragraph 5 of the Contract of Lease stales:ChanRoblesVirtualawlibrary5. IMPROVEMENTS The LESSEE may not introduce any structural changes, improvements or alterations to the Leased Premises without the LESSOR'S prior written consent, however any such improvements or alterations shall upon the expiration or termination of this Contract inure to the benefit of the Leased Premises and become the LESSOR'S property, without the obligation on the latter's pail to pay or refund the LESSEE for its cost or value, except those improvements which can be removed without causing damage to the Leased Premises.91 Docketed as Civil Case No. 98-595. See RTC records. Vol. I. pp. 302-303.
(Underscoring supplied)
92 Rollo, pp. 48-40.
93 Id. at 48-50.
94Nacar v. Gallery Frame's, supra.