566 Phil. 481
This resolves the Petition for Review on
Certiorari
filed by Allan F. Puen (petitioner) against Sta. Ana Agro-Aqua
Corporation and Sta. Clara Agro-Aqua Corporation (respondents) seeking
the reversal of the Decision
[1] of the Court of Appeals (CA) promulgated on July 22, 2002 and its Resolution dated November 13, 2002.
The problem between petitioner and respondents arose after petitioner,
who leased from respondents a 14-hectare prawn farm for a period of
four years beginning April 14, 1988, started incurring delay in paying
the monthly rentals sometime in March of 1989. Manuel Lacson (Lacson),
the President of respondents, made phone calls to petitioner to remind
the latter of the delayed payments. In reply, petitioner sent Lacson a
letter dated May 3, 1989,
[2]
wherein he explained that his cash flow was tight due to problems with
his other business, but he promised to pay the arrears in rentals after
they would have harvested the prawns on May 15, 1989. Petitioner also
acknowledged in said letter that he had not been able to live up to his
promises despite Lacson's very accommodating attitude towards him.
Thereafter, petitioner's General Manager of the prawn farm, Roman Rosagaron (Rosagaron), sent a letter dated May 19, 1989
[3] addressed to Manuel Lacson. It reads as follows:
Dear Mr. Lacson:
This is to formalize our verbal commitment through Mr. Rene Magallanes
to pay Sta. Clara Estate, Inc. Forty Nine Percent (49%) of the gross
sales from the initial harvest of eight (8) ponds in Phase I.
Please be informed that after settling the other small accounts of King
Prawn, the said percentage of the gross sales from the subsequent
harvests shall be proportionately increased in order to pay the full
due rentals to Sta. Clara.
Thank you for your kind consideration.
Very truly yours,
Sgd. Roman P. Rosagaron
General Manager
c.c. Mr. Puen/file
According to Lacson, he then made arrangements with Rosagaron and the
prawn buyers to ensure that payments for the prawns harvested from the
leased prawn farm would be made directly to Lacson and applied to
petitioner's arrearages.
In a letter dated May 25, 1989, Rosagaron informed petitioner that
“through the instruction of Mr. Manuel Lacson, our prawn harvests in
Ponds 8 and 9 Phase I has (sic) been withheld due to our pond rental
arrears” and that from that time on respondents will be in control of
the prawn harvest. Rosagaron also gave petitioner a list of the
expected yield from each pond totalling 57,494.67 kilos.
Then, in a letter dated June 20, 1989
[4] addressed to Lacson, petitioner signified his intention to pre-terminate the lease contract, to wit:
Dear Sir,
In reference to your discussion with Mr. Rosagaron and after some
consultation and analysis, I have come up with the following replies to
your suggestions.
- I would like to continue with Phase II until such
time as the ponds are harvested. Due to several restraints most notably
the drop in market prices, I feel it impossible to continue under the
present rates and conditions. I would therefore wish to turn over the
ponds to you as soon as the ponds are harvested.
- Moreover, I feel that for the same reason stated above it
would not be viable to continue even with Phase I. I would therefore
want to turn them over to you at the soonest time.
- I am amenable to paying you in full for all the rentals due
but may I implore you to extend your patience with us a little bit more
by possibly foregoing with the interest penalties. Your rentals are
already assured under the present conditions. Moreover the poor harvest
has already translated into a P3,000,000.00 loss so I would appreciate
it if you could give in on this matter.
I know you have been very benevolent with us and I've tried to
reciprocate but I guess circumstances from the start made it very
difficult for us. I know you've been very understanding and it is for
this reason that I ask you to give in to our last request. I see no way
for us to continue with this project at the present condition of the
industry so I hope you can appreciate our side and deem the contract
terminated without imposing further sanctions.
Thank you very much and I hope that our friendship is not affected by the termination of this contract.
Respectfully,
Sgd. Allen F. Puen
President
Respondents, through Lacson, replied in a letter dated July 6, 1989,
[5] stating the following counter-proposals:
- Rentals must be paid from time of pond
delivery up to June 30, 1989 for Phase I and up to July 15, 1989 for
Phase II. Our records show that the outstanding rentals for Phase I and
Phase II up to the periods mentioned above are P395,592.11 and
P625,000.00 respectively. Please note that there are 4 ponds remaining,
proceeds of which are not included. The proceeds are estimated to be
only around P100,000.00 as the prawns in these ponds have not been fed
properly during the last three weeks. This cut-off date gives us barely
15 days to prepare all that is necessary to take over the grow-out
ponds.
- For the remaining period of the contract that you have
expressed unwillingness to continue, we propose a twenty percent (20%)
termination fee on the balance of the contract. The whole contract
calls for rental payments for four years for 13 hectares at P500,000.00
per hectare or a total of P26,000,000.00. After paying rentals up to
the periods stated in the preceding paragraph, a balance of
P22,239,466.00 remain and 20% of that will be P4,447,000.00.
We feel that our proposal is a decision arrived at with compassion as a
primary factor. x x x x Although legally we are entitled to the full
amount of the contract, it is because of compassion on our part that we
have agreed to only demand 20% of the amount due us as condition for
terminating the contract of lease.
x x x x
Very truly yours,
Sgd. Manuel V. Lacson
P.S. We are attaching a statement of rentals and payments made as of July 06, 1989.[6]
In said statement of rentals and payments, respondents recorded the
amount of P1,121,458.34 as proceeds from the sale of prawns harvested
from the leased prawn farm. Petitioner never questioned the correctness
of said amount or the application of said proceeds as payment for his
delayed rentals.
Thereafter, Rosagaron again sent Lacson another letter dated July 10, 1989. It reads thus:
Dear Mr. Lacson:
Pursuant to the letter of Mr. Allen F. Puen and as per our verbal
agreement on June 24, 1989, together with Mr. Nestor Mendoza, we would
like to officially turn-over phase I & II to your office effective
immediately.
In connection with this, Messrs. Arsenio M. Olila, Head Pond
Technician, and Michael Malata, Jr., Pond Technician are hereby
authorized to coordinate with your representatives to spot check and
account the facilities to be turned over.
Kindly let us know as to when the actual turn-over of facilities shall
be and with whom shall we coordinate with so we can act immediately.
Thank you and best wishes.
Very truly yours,
Sgd. Roman P. Rosagaron
General Manager[7]
Thereafter, counsel for respondents sent petitioner a letter demanding
payment of unpaid rentals for the months of May, June and July of 1989
amounting to P905,371.30 and unpaid electricity bills in the amount of
P227,896.40, or a total of P1,133,267.70.
Petitioner never replied and failed to comply with said demands; hence,
respondents filed a complaint for specific performance with damages. In
contravention, petitioner alleged in his Answer that: (1) respondents
forcibly dispossessed him of the leased premises, then harvested and
sold the prawns and appropriated for their own benefit the proceeds
from said sale; and (2) due to said forcible take-over, the other
prawns not ready for harvest were left unattended and unfed, rendering
them non-marketable, thus, petitioner suffered grave losses. Petitioner
prayed that respondents be ordered to account to the former the
proceeds of the sale of the prawns and pay damages for losses he
incurred due to the wrongful take-over of the leased premises.
After trial, the Regional Trial Court of Bacolod City, Branch 43, (RTC)
rendered a Decision dated June 10, 1995 in favor of herein respondents,
the dispositive portion of which reads as follows:
WHEREFORE, judgment is hereby rendered in favor of plaintiff [herein respondents], defendant [herein petitioner] being ordered to pay the former -
- P3,163,868.34 representing unpaid and delayed rentals and CENECO bills.
The counterclaim filed by defendant against the plaintiff is dismissed for lack of merit.
No costs.
SO ORDERED.[8]
Petitioner appealed to the CA which issued herein assailed Decision dated July 22, 2002, ruling thus:
x x x x It has been held that where the lessor resumes
possession of his leased property for its protection after the lessee
has abandoned the same, the lessor has still the right, if he elects,
to hold the lessee responsible under the contract until the termination
of the lease. Moreover, even with such express option granted to the
appellees-lessors to pre-terminate the lease after default by the
lessee-appellant in the payment of rentals, the resolution or
termination of the contract is not mandatory on the lessor (creditor)
who may still choose to require specific performance, unless the
contrary is expressly stipulated. Such resolution or termination takes
effect when the lessor (creditor) notifies the lessee (debtor) of his
decision to resolve. Since the herein lessor (appellees) had not
exercised their option under the Contract of Lease to pre-terminate the
lease by reason of such default in the payment of monthly rentals by
the lessee, resort to specific performance is not legally barred. At
any rate, the claim for damages in the form of unpaid rentals past due,
stipulated penalty for such late payment as well as unpaid electric
consumption by the appellant lessee gives the appellees lessors
sufficient cause of action notwithstanding that possession of the
leased premises had already been turned over to them; the right to such
damages is recognized in both remedies of specific performance and
rescission.
x x x x
x x x However, we cannot sustain the additional amount of P1,318,000.00
being claimed for alleged lost income on account of delay. There is no
clear proof presented showing how and when such lost income was
incurred, such as documentary evidence of actual production
subsequently achieved. x x x
x x x x[9]
The dispositive portion of the CA Decision reads as follows:
WHEREFORE, premises considered, the present appeal is DISMISSED and the decision appealed from in Civil Case No. 5654 is hereby AFFIRMED with MODIFICATION in that the award of P1,318,000.00 for alleged lost income is hereby DELETED
and the total amount of liability of the appellant under said judgment
is hereby REDUCED to P1,845,868.34 representing the rents in arrears
inclusive of 3% penalty per month and unpaid electric bills with CENECO.
No pronouncement as to costs.
SO ORDERED.[10]
Petitioner's Motion for Reconsideration of the afore-quoted Decision
was denied by the CA in its Resolution dated November 13, 2002.
Hence, the present petition where the main issue raised is whether
respondents' alleged appropriation and sale of petitioner's stocked
prawns are unlawful.
[11]
Petitioner prays that the complaint against him be dismissed and that
respondents be ordered (1) to restitute the market value of the stocked
prawns at P5,117,025.63
to be compensated against unpaid rentals and light bills in the aggregate of P1,845,868.34;
(2) to pay petitioner the difference between the aforementioned
amounts; (3) to pay petitioner actual and compensatory damages, moral
and exemplary damages and attorney's fees.
The Court finds the petition bereft of merit.
It is quite clear that
petitioner has admitted his indebtedness to respondent in the amount of P1,845,868.34.
The only issue remaining is whether respondents unlawfully harvested
and appropriated for themselves petitioner's stocked prawns. The
resolution thereof is inextricably dependent on whether respondents
forcibly took control of subject prawn farms before the stocked prawns
were harvested.
Although both the RTC and the CA failed to categorically state that
respondents did not harvest or appropriate for themselves the stocked
prawns, the RTC and CA nevertheless found that petitioner's claim of
being forcibly dispossessed of the leased premises cannot be given
credence. Well-settled is the rule that factual findings of the trial
court, affirmed by the CA, are final and conclusive and may not be
reviewed on appeal.
[12] Although such general rule admits of exceptions,
[13] this case does not fall under any of them.
Moreover, the
letter dated July 10, 1989
sent by petitioner's General Manager Rosagaron to Lacson, respondent’s
President, is quite revealing. It stated petitioner's intent to
physically turn over the prawn farm back to respondents, asking Lacson
to “
[k]indly
let us know as to when the actual turn-over of facilities shall be
and with whom shall we coordinate with so we can act immediately.” This
statement belies petitioner's claim that as early as May of 1989, or
before they were able to harvest all of their stocked prawns,
respondents had already taken back possession of the leased premises.
[14]
Evidently, as of July 10, 1989, respondents have not yet been in
possession of the prawn farm and petitioner's claim that it was
respondents who harvested and sold the stocked prawns cannot be given
credence. Verily, it is impossible to believe that respondents could
have harvested for themselves the stocked prawns if they had not yet
been in possession and full control of the prawn farm at the time of
the harvest. This jibes with the testimony of Lacson that respondents
only took possession of the leased premises after petitioner, through
his employees, had already harvested and sold all the prawns, and as
agreed upon, half of the proceeds of the sale were given directly to
respondent and applied as payment for petitioner's arrearages.
[15]
The Court finds respondents' version to be more plausible or convincing
and therefore agrees with the CA in affirming the finding of the RTC in
favor of respondents.
The Court likewise finds it hard to believe petitioner's claim that the
proceeds from the sale of the prawns should amount to P5,117,025.63. In
the statement of rentals and payments attached to respondents' letter
dated July 6, 1989 sent to petitioner, the proceeds from the sale of
prawns harvested from the leased prawn farm were recorded as
P1,121,458.34.
Petitioner
never questioned the correctness of said amount or the application of
said proceeds as payment for his delayed rentals. If, indeed, there
was such a great discrepancy between the amount reported by respondents
as proceeds from the sale of the prawns and petitioner's expected
yield, the natural reaction of anybody would have been to question
respondents about such discrepancy. But
petitioner never raised any objection. Petitioner's reaction is unnatural and goes against ordinary human experience. As held in
Manzano v. Perez, Sr.,[16] “i
n
the assessment of the facts, reason and logic are used. In civil
cases, the party that presents a preponderance of convincing evidence
wins.” In this case, reason and logic dictate that petitioner's claim
cannot be believed and the Court must rule in favor of respondents.
WHEREFORE, the petition is
DENIED. The Decision of the Court of Appeals promulgated on July 22, 2002 and its Resolution dated November 13, 2002 are
AFFIRMED in toto.
Costs against petitioner.
SO ORDERED.
Ynares-Santiago, (Chairperson), Corona, Nachura, and
Reyes, JJ., concur.
[1] Penned by Associate
Justice Martin S. Villarama, Jr., with Associate Justice Conchita
Carpio Morales (now a Member of this Court) and Associate Justice
Mariano C. del Castillo, concurring.
[2] Exh. “B” for respondents and Exh. “5” for petitioner, records, pp. 95-96.
[3] Exh. “I” for respondents and Exh. “6” for petitioner, id. at 205.
[4] Exh. “C” for respondents and Exh. “7” for petitioner, records, pp. 97-98.
[5] Exh. “2,” records, pp. 190-192.
[6] Exhs. “2” and “2-A-1,” id.
[7] Exh. “E,” records, p. 103.
[8] Rollo, p. 58.
[9] Rollo, pp. 69-71.
[10] Id. at 72.
[11] Id. at 6.
[12] Child Learning Center, Inc. v. Tagario, G.R. No. 150920, November 25, 2005, 476 SCRA 236, 241-242.
[13] Said exceptions
[as enumerated in Child Learning Center, Inc. v. Tagario, supra] are as follows:
(1) when the inference made is manifestly mistaken, absurd or
impossible; (2) when there is grave abuse of discretion; (3) when the
findings are grounded entirely on speculations, surmises or
conjectures; (4) when the judgment of the Court of Appeals is based on
misapprehension of facts; (5) when the findings of fact are
conflicting; (6) when the Court of Appeals, in making its findings,
went beyond the issues of the case and the same are contrary to the
admissions of both appellant and appellee; (7) when the findings of
fact are conclusions without citation of specific evidence on which
they are based; (8) when the Court of Appeals manifestly overlooked
certain relevant facts not disputed by the parties and which, if
properly considered, would justify a different conclusion; and (9) when
the findings of fact of the Court of Appeals are premised on the
absence of evidence and are contradicted by the evidence on record.
[14] See TSN of January 9, 1992, pp. 16-17.
[15] See TSN of June 13, 1991, pp. 12-14.
[16] 414 Phil. 728, 731 (2001).