564 Phil. 207
CARPIO MORALES, J.:
x x x Under the Pre-Subscription Agreement they entered into, the Ongs and the Tius agreed to maintain equal shareholdings in FLADC: the Ongs were to subscribe to 1,000,000 shares at a par value of P100.00 each while the Tius were to subscribe to an additional 549,800 shares at P100.00 each in addition to their already existing subscription of 450,200 shares. Furthermore, they agreed that the Tius were entitled to nominate the Vice-President and the Treasurer plus five directors while the Ongs were entitled to nominate the President, the Secretary and six directors (including the chairman) to the board of directors of FLADC. Moreover, the Ongs were given the right to manage and operate the mall.It was in light of the foregoing that FLADC, now under the control of the Ongs, filed with the MeTC of Pasay City a complaint for ejectment against MATERRCO on November 29, 1996, docketed as Civil Case No. 987-96, from which the present petition originated. The complaint sought to eject MATERRCO's "Masagana Department Store and Supermarket" from the premises of Masagana Citimall and also from the 150 square meter (sq. m.) lot covered by TCT No. 135325 in the name of FLADC which was leased to MATERRCO.
Accordingly, the Ongs paid P100 million in cash for their subscription to 1,000,000 shares of stock while the Tius committed to contribute to FLADC a four-storey building and two parcels of land respectively valued at P20 million (for 200,000 shares), P30 million (for 300,000 shares) and P49.8 million (for 49,800 shares) to cover their additional 549,800 stock subscription therein. The Ongs paid in another P70 million to FLADC and P20 million to the Tius over and above their P100 million investment, the total sum of which (P190 million) was used to settle the P190 million mortgage indebtedness of FLADC to PNB.
The business harmony between the Ongs and the Tius in FLADC, however, was shortlived because the Tius, on February 23, 1996, rescinded the Pre-Subscription Agreement. The Tius accused the Ongs of (1) refusing to credit to them the FLADC shares covering their real property contributions; (2) preventing David S. Tiu and Cely Y. Tiu from assuming the positions of and performing their duties as Vice-President and Treasurer, respectively, and (3) refusing to give them the office spaces agreed upon.
x x x x
The controversy finally came to a head when [SEC Case No. 02-96-5269] was commenced by the Tius on February 27, 1996 at the Securities and Exchange Commission (SEC), seeking confirmation of their rescission of the Pre-Subscription Agreement. x x x[2]
Other reliefs just and equitable under the premises were also prayed for.
- Ordering the defendant, or any person claiming right under it, to immediately vacate the leased premises;
- Ordering the defendant to pay the plaintiff the following amounts:
- P18,591,330.42 representing back rentals, electricity, water and aircon bills and CUSA charges as of November 1996.
- starting December 1996 until the leased premises is fully vacated, the following amounts:
i) P200.00 per sq.m. of the 8,617.40 sq.m. space leased by defendant, or a total of P1,895,828.00 as monthly rental or reasonable compensation for the use of the leased premises, plus ten percent (10%) value-added tax; ii) P10,000.00 a month for the 150 sq. m. land leased by defendant as monthly rental or reasonable compensation for the use of the leased premises, plus ten percent (10%) value-added tax; iii) P60.00 per sq.m. of the 8,617.40 sq. m. space leased by defendant, or a total of P517,044.00 as CUSA charges; iv) P60.00 per sq.m. of the 8,617.40 sq. m. space leased by defendant, or a total of P517,044.00 as aircon charges; v) An amount depending on the proportionate share in the consumption of electricity and water by defendant starting November 1996 until the leased premises is fully vacated.- P800,000.00 as and for attorney's fees.
- Costs of the suit.[4]
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff [FLADC] and against the defendant [MATERRCO] as follows:MATERRCO appealed the MeTC Decision to the RTC, which appeal was docketed as Civil Case No. 05-1421.Defendant's counterclaim is dismissed for lack of merit.[9]
- Ordering the defendant and all persons claiming authority under it to peaceably vacate the leased premises subject of this action;
- Ordering the defendant to pay plaintiff the amount of Php778,036.98 representing the rental arrearages for the period starting from the filing of the complaint on November 1996 to December 1996 plus legal interest;
- Ordering the defendant to pay plaintiff the amount of Php13,005,665.88 representing the rental arrearages for the period January 1997 to December 1997 plus legal interest;
- Ordering the defendant to pay plaintiff the amount of Php15,789,905.64 representing the rental arrearages for the period January 1998 to December 1998 plus legal interest;
- Ordering the defendant to pay plaintiff the amount of Php17,274,109.16 representing the rental arrearages for the period January 1999 to December 1999 plus legal interest;
- Ordering the defendant to pay plaintiff the amount of Php20,307,293.16 representing the rental arrearages for the period January 2000 to December 2000 plus legal interest;
- Ordering the defendant to pay plaintiff the amount of Php22,582,181.16 representing the rental arrearages for the period January 2001 to December 2001 plus legal interest;
- Ordering the defendant to pay plaintiff the amount of Php20,025.739.80 representing the rental arrearages for the period January 2002 to December 2002 plus legal interest;
- Ordering the defendant to pay plaintiff the amount of Php19,442,076.08 representing the rental arrearages for the period January 2003 to December 2003 plus legal interest;
- Ordering the defendant to pay plaintiff the amount of Php18,274,748.64 representing the rental arrearages for the period January 2004 to December 2004 plus legal interest;
- Ordering the defendant to pay plaintiff the amount of Php23,254,33.60 representing the rental arrearages for the period January 2005 to December 2005 plus legal interest;
- Ordering the defendant to pay plaintiff the amount of Php2,843,610.00 plus 10% VAT and legal interest from November 2005 and until the defendant shall have vacated the leased premises;
- Ordering the defendant to pay plaintiff the amount of Php10,000.00 plus 10% VAT and legal interest to be reckoned from March 1995 until the defendant shall have vacated the 150 sq. m. lot likewise subject of the instant case.
- Ordering defendant to pay plaintiff the amount of Php20,000.00 as and by way of attorney's fees; and
- Ordering him to pay the cost of suit.
MATTERCO adds that
- . . . ERRED IN DISMISSING THE PETITION AND IN MISAPPLYING PRINCIPLES OF LAW NOT APPLICABLE TO IT; AND
- . . . ERRED IN FINDING THAT PETITIONER HAS UNPAID RENTS AND CONSEQUENTLY ORDERING THE LATTER'S EJECTMENT.
III. THE ERROR OF THE COURT OF APPEALS IN FINDING THAT [IT] HAS UNPAID RENTS IS AGGRAVATED BY AWARDING RENTS EXCEEDING THE AMOUNT PRAYED FOR IN THE COMPLAINT.[12]With respect to the first assignment of error, the "principle of law" which the appellate court allegedly misapplied refers to the doctrine that a trial court cannot be deprived of jurisdiction over an ejectment complaint merely because the defendant avers ownership of the premises subject thereof. The Court of Appeals cited this doctrine in support of its finding that the MeTC properly exercised jurisdiction over FLADC's ejectment complaint.
x x x While it is true that the only issue in forcible entry or unlawful detainer action is the physical possession of the leased property, that is possession de facto — not possession de jure, yet the court may go beyond that if only to prove the nature of the possession. The court may receive evidence upon the question of title, or for that matter possession de jure, solely for the purpose of determining the character and extent of possession and damages for the detention. (Emphasis and underscoring supplied)Under the same assignment of error, MATERRCO argues that the Court of Appeals Decision is incomplete and did not resolve the case in its entirety, since it failed to touch on the main ground of FLADC's ejectment complaint for alleged non-payment of correct rentals. And in reply to FLADC's citation of Insular Bank of Asia v. Intermediate Appellate Court[17] which states that "[i]t is accepted judicial practice that Courts are not required to resolve all issues raised in the pleading unless necessary for the resolution of the case," MATERRCO counters that its alleged non-payment of correct rentals is the core issue which is the very foundation of the ejectment complaint against it. It thus asserts that the appellate court was remiss in its duty to resolve the same.
SECTION 5. Amendment to conform to or authorize presentation of evidence. — When issues not raised by the pleadings are tried with the express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure to amend does not affect the result of the trial of these issues. If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so with liberality if the presentation of the merits of the action and the ends of substantial justice will be subserved thereby. The court may grant a continuance to enable the amendment to be made. (Emphasis supplied)Clearly, FLADC was able to present during the trial documentary evidence tending to prove the reasonableness of a 10% yearly increase in rental. This is reflected in the MeTC Decision, viz:
x x x Since the existence and validity of the said contract of lease (Exhibit "1") was not proven, hence, the supposed terms and agreement embodied therein does not bind the plaintiff. Moreover, the court may intervene in fixing the rent as a matter of fairness and equity (Nieves vs. Court of Appeals, 198 SCRA 63, 71). This Court is mindful that reasonable amount of rent could not be determined by mere judicial notice but by supporting evidence (Badillo vs. Tayag, 400 SCRA 494). Thus, as sufficiently shown by plaintiff [FLADC] the rent it is imposing is reasonable and much lower as compared to its other lessees (Exhibits "X", "U", "V", "W"). Moreover, a cursory reading of the contract of lease (Exhibit "A") and the other contracts of lease executed by FLADC by David Tiu (Exhibits "X", "U", "V", "W") shows a similarity in language, structure and form. If indeed, the contract of lease purportedly relied upon by the defendant really embodied the terms and conditions of the lease, why then was it not submitted or furnished the plaintiff when the latter was asking for it?Against FLADC's documentary evidence, MATERRCO merely argued in its petition that these cannot be considered preponderant, viz:
x x x The yearly 10% escalation of the rent per area occupied is reasonable considering that the increased rates are still very much lower compared to that being charged to the other tenants of FLADC."[23] (Emphasis and underscoring supplied)
"The evidence presented by FLADC in justifying rental claims are:Essentially, MATERRCO is seeking a review of the lower and appellate courts' appreciation of the evidence, which is beyond the pale of an appeal under Rule 45 of the Rules of Court. This Court sees no reason to depart from the rule enunciated in FGU Insurance Corporation v. CA,[25] which states:"The above contracts cannot be considered preponderant because they are not comparable with the lease contract of petitioner in the following respects:
- Undated Contract of Lease between FLADC and Jollibee Foods Corporation for the leasing of a space with a small area of 566.70 sq. meters for a short term of 12 years (Exh. "X")
- Contract of Lease dated November 21, 1994 between FLADC and Mr. Henry M. Lee for the leasing of a space with a small area of 20.12 sq. meters for a short term of 10 years (Exh. "U")
- Contract of Lease dated November 21, 1994 between FLADC and Anita T. Coo for the leasing of a space with a small area of 21.48 sq. meters for a short term of 10 eyras (Exh. "V")
- Contract of Lease dated February 15, 1995 between FLADC and Mr. Jerry Chua for the leasing of a space with a small area of 17.00 sq. meters for a short term of 10 years (Exh. "W")
a) The area subject of petitioner's lease includes open spaces, aisles and walkways where no merchandise are on display and are merely sued as common area for the customers; The small areas subject of Exhs. "X", "U", "V" and "W" do not include walkways and are fully occupied for commerce. b) The subject leased premises is used as anchor store or main attraction in the area, without which, the small businesses on the mall will not survive; and c) The rents for the subject premises already fixed by the parties, being paid by Materrco and being accepted by FLADC, cannot be effected nor altered by the subsequent leases on small spaces." [24] (Emphasis supplied)
Anent ANCO's first assignment of error, i.e., the appellate court committed error in concluding that the negligence of ANCO's representatives was the proximate cause of the loss, said issue is a question of fact assailing the lower court's appreciation of evidence on the negligence or lack thereof of the crewmembers of the D/B Lucio. As a rule, findings of fact of lower courts, particularly when affirmed by the appellate court, are deemed final and conclusive. The Supreme Court cannot review such findings on appeal, especially when they are borne out by the records or are based on substantial evidence. As held in the case of Donato v. Court of Appeals, in this jurisdiction, it is a fundamental and settled rule that findings of fact by the trial court are entitled to great weight on appeal and should not be disturbed unless for strong and cogent reasons because the trial court is in a better position to examine real evidence, as well as to observe the demeanor of the witnesses while testifying in the case.As to the award of legal interest to FLADC despite the fact that the same is not prayed for in its Complaint, the MeTC is vested with discretion to award the same. Respecting awards of interest in the concept of actual or compensatory damages, Eastern Shipping Lines v. Court of Appeals[26] teaches, viz:
It is not the function of this Court to analyze or weigh evidence all over again, unless there is a showing that the findings of the lower court are totally devoid of support or are glaringly erroneous as to constitute palpable error or grave abuse of discretion. (Emphasis and underscoring supplied)
"When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date of the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount of finally adjudged." (Emphasis supplied)Finally, as an additional ground in support of its petition, MATERRCO claims in its Supplemental Petition for Review on Certiorari dated February 5, 2007 that the MeTC did not acquire jurisdiction over the ejectment complaint on account of insufficient payment of filing fees.
"Sec. 8. CLERKS of Metropolitan and Municipal Trial CourtsThe same amount of one hundred and fifty (P150.00) pesos, it bears noting, was the same fee fixed by A.M. No. 00-2-01-SC[28] effective March 2000.
(a) For each civil action or proceeding, where the value of the subject matter involved, or the amount of the demand, inclusive of interest, damages of whatever kind, attorney's fees, litigation expenses, and costs is:In a real action, the assessed value of the property or if not declared for taxation purposes, the assessed value of the adjacent lots, or if there is none, the estimated value thereof shall be alleged by the claimant and shall be the basis in computing the fees.
- Not more than P20,000.00 .............................................P120.00
- More than P20,000.00 but not more than P100,000.00 ............................................................................... 400.00
- More than P100,000.00 but not more than P200,000.00 .................................................................................850.00
(b) For initiating proceedings for the allowance of wills. Granting of letters of administration and settlement of estates of small value, where the value of the estate is:
- Not more than P20,000.00 ...............................................P 200.00
- More than P20,000.00 but not more than P100,000.00 ..................................................................................1,100.00
- More than P100,000.00 but not more than P200,000.00 ....................................................................................................1,550.00
x x x x- For each proceeding other than the allowance of wills (probate), granting of letter of administration, settlement of estates of small value, one hundred and fifty (150.00) pesos." (Emphasis and underscoring supplied)
"Neither is there merit in the allegation that the amount of the monthly rental was also fixed at P1,500.00 to enable the [Italy Marketing Corporation] , as plaintiff in the [ejectment] case, to evade payment of the proper docket fees. The amount of damages in the form of rentals alleged in complaints for unlawful detainer cases is immaterial in determining the docket fees because the fee is a straight fee of P100.00." (Emphasis supplied)WHEREFORE, the petition is DENIED.
[4] Id. at 146-147.
- from September 1994 to August 1995 - P120.00 per square meter (sq. m.) for selling area and P80.00 per sq. m. for service area;
- from September 1995 to August 1996 - P132.00 per sq. m. for selling area and P88.00 per sq. m. for service area; and
- from September 1996 until the present - P220.00 per sq. m. for both selling and service areas. (Rollo, p. 143)
[6] Supra at note 1.
- from September 1994 to August 1995 - P120.00 per sq. m. for selling area and P80.00 per sq. m. for the storage and service area;
- from September 1995 to August 1996 - P120.00 per sq. m. for selling area and P80.00 per sq. m. for the storage and service area;
- from September 1996 to August 1997 - P132.00 per sq. m. for the selling area and P88.00 for the storage and service area because of the 10% increase; and
- from September 1997 to August 1998 - P132.00 per sq. m. for the selling area and P88.00 for the storage and service area because of the 10% increase. (Id. at 150)
"(c) For forcible entry and unlawful detainer cases WHERE NO DAMAGES/COSTS ARE PRAYED FOR, FIVE HUNDRED (P500.00) PESOS; ANDThe above-quoted revised rate was not among those suspended by the Court's Resolution on A.M. No. 04-2-04-SC, dated September 21, 2004, as the suspension merely covered (a) Solemnization of marriage, (b) Motions; and (c) Compulsory counterclaims.
"IN CASES WHERE INTERESTS, PENALTIES, SURCHARGES, DAMAGES OF WHATEVER KIND, AND ATTORNEY'S FEES ARE PRAYED FOR, AN AMOUNT EQUIVALENT TO THAT INDICATED IN THE SCHEDULE OF PAYMENTS UNDER SUBSECTION (A) OF THIS SECTION SHALL BE COLLECTED, IN ADDITION TO THE AMOUNT OF FIVE HUNDRED (P500.00) PESOS PROVIDED FOR IN THIS SUBSECTION."