G.R. No. 184698, 21 January 2013


Respondents own several fishponds which they leased to petitioners for 5 years. Upon expiration of the lease, the respondent did not vacate the premises until 41 days after the expiration of the lease. Respondents filed for collection of a sum of money with damages in the RTC of Quezon City, claiming that petitioners committed violations of their lease agreement – non-payment of rents as stipulated, subletting the fishponds, failure to maintain the warehouses, and refusal to vacate the premises on expiration of the lease – which caused respondents to incur actual and liquidated damages and other expenses in the respective amounts of ₱570,101.0025 for unpaid rent, ₱275,430.0026 for unpaid additional rent for petitioners’ one-month extended stay beyond the contract date, and ₱2,000,000.0027 for expenses incurred in restoring and repairing their damaged warehouses. In addition, respondents prayed to be awarded moral and exemplary damages, attorney’s fees, and costs of litigation.


Whether respondents are entitled to the claim of unpaid rent & interest.


Both courts erred in finding that there are outstanding rents owing to the respondents in the amount of ₱863,796.00. Attention must be called to respondents’ July 22, 1999 demand letter. The letter, which appears to have been handwritten and signed by Amparo Palenzuela herself, makes a demand upon petitioners to pay the total amount of ₱378,451.00 which respondents claim constitutes what is owing to them as of July 31, 1999 by way of unpaid rentals (₱111,082.00); additional rent for the whole duration of petitioners’ stay on the premises beyond the contract date, or for the whole of July 1999 (₱244,025.00); and interest from May 31, 1999 up to July 31, 1999 (₱23,344.00). This letter belies the claim that petitioners owed respondents a greater amount by way of unpaid rents. Even though it is not newly-discovered evidence, it is material; indeed, petitioners could not have presented it during trial because they were declared in default.

Indeed, respondents do not deny that this amount of ₱863,796.00 is what they are actually charging petitioners for one month’s extended use of their fishponds. If this is so, then it is truly excessive, considering that for the immediately preceding month – the whole of June 1999 – it costs only ₱244,025.00103 for the petitioners to rent the same property. The trial court may have been impelled to accept respondents’ own computation of what they believed was due from petitioners on account of the fact that at that time, petitioners were declared in default and could not cross-examine the respondents’ witness. But the fact remains that the July 22, 1999 demand letter clearly sets forth in detail what appears to be the true, accurate and reasonable amount of petitioners’ outstanding obligation. If this document were a forgery, respondents would have vehemently objected to its presentation at the very first opportunity.

As for petitioners’ submission that respondents were not authorized to charge additional rent for their extended stay, this issue should be deemed settled by their very reliance on the July 22, 1999 demand letter, where a charge for additional rent for their extended stay in the amount of ₱244,025.00 is included. By adopting the letter as their own evidence in seeking a reduction in the award of unpaid rent, petitioners are considered to have admitted liability for additional rent as stated therein, in the amount of ₱244,025.00. Petitioners may not simultaneously accept and reject the demand letter; this would go against the rules of fair play. Besides, respondents are correct in saying that when the lease expired on June 30, 1999 and petitioners continued enjoying the premises without objection from the respondents, an implied new lease was created pursuant to Article 1670 of the Civil Code, which placed upon petitioners the obligation to pay additional rent.

Even though respondents received payments directly from the sublessee Reyes, this could not erase the fact that petitioners are guilty of subleasing the fishponds to her. Respondents may have been compelled to accept payment from Reyes only because petitioners have been remiss in honoring their obligation to pay rent.

*Case digest by Meriam Rika R. Wong, JD – 4, Andres Bonifacio College, SY 2019-2020