PACULDO VS.
REGALADO RULING: NO, the petitioner was not in arrears in the payment of rentals on
345 SCRA 134
FACTS: On December 27, 1990, petitioner Nereo Paculdo and respondent
Bonifacio Regalado entered into a contract of lease over a parcel of land with
a wet market building, located at Fairview Park, Quezon City. The contract was
for twenty five (25) years, commencing on January 1, 1991 and ending on
December 27, 2015. For the first five (5) years of the contract beginning
December 27, 1990, Nereo would pay a monthly rental of P450,000, payable
within the first five (5) days of each month with a 2% penalty for every month
of late payment.
Aside from the above lease, petitioner leased eleven (11) other property from
the respondent, ten (10) of which were located within the Fairview compound,
while the eleventh was located along Quirino Highway Quezon City. Petitioner
also purchased from respondent eight (8) units of heavy equipment and
vehicles in the aggregate amount of Php 1, 020,000.
On account of petitioners failure to pay P361, 895.55 in rental for the month
of May, 1992, and the monthly rental of P450, 000.00 for the months of June
and July 1992, the respondent sent two demand letters to petitioner
demanding payment of the back rentals, and if no payment was made within
fifteen (15) days from the receipt of the letter, it would cause the cancellation
of the lease contract.
Without the knowledge of petitioner, on August 3, 1992, respondent
mortgaged the land subject of the lease contract, including the improvements
which petitioner introduced into the land amounting to P35, 000,000.00, to
Monte de Piedad Savings Bank, as a security for a loan.
On August 12, 1992, and the subsequent dates thereafter, respondent refused
to accept petitioners daily rental payments.
Subsequently, petitioner filed an action for injunction and damages seeking to
enjoin respondents from disturbing his possession of the property subject of
the lease contract. On the same day, respondent also filed a complaint for
ejectment against petitioner.
The lower court rendered a decision in favor of the respondent, which was
affirmed in toto by the Court of Appeals.
ISSUE: Whether or not the petitioner was truly in arrears in the payment of
rentals on the subject property at the time of the filing of the complaint for
ejectment.
the subject property at the time of the filing of the complaint for ejectment.
As found by the lower court there was a letter sent by respondent to herein
petitioner, dated November 19, 1991, which states that petitioners security
deposit for the Quirino lot, be applied as partial payment for his account under
the subject lot as well as to the real estate taxes on the Quirino lot. Petitioner
interposed no objection, as evidenced by his signature signifying his
conformity thereto.
Meanwhile, in an earlier letter, dated July 15, 1991, respondent informed
petitioner that the payment was to be applied not only to petitioners accounts
under the subject land and the Quirino lot but also to heavy equipment bought
by the latter from respondent. Unlike in the November letter, the July letter did
not contain the signature of petitioner.
Petitioner submits that his silence is not consent but is in fact a rejection.
As provided in Article 1252 of the Civil Code, the right to specify which among
his various obligations to the same creditor is to be satisfied first rest with the
debtor.
In the case at bar, at the time petitioner made the payment, he made it clear
to respondent that they were to be applied to his rental obligations on the
Fairview wet market property. Though he entered into various contracts and
obligations with respondent, all the payments made, about P11,000,000.00
were to be applied to rental and security deposit on the Fairview wet market
property. However, respondent applied a big portion of the amount paid by
petitioner to the satisfaction of an obligation which was not yet due and
demandable- the payment of the eight heavy equipments.
Under the law, if the debtor did not declare at the time he made the payment
to which of his debts with the creditor the payment is to be applied, the law
provided the guideline; i.e. no payment is to be applied to a debt which is not
yet due and the payment has to be applied first to the debt which is most
onerous to the debtor.
The lease over the Fairview wet market is the most onerous to the petitioner
in the case at bar.
Consequently, the petition is granted.
DBP vs CA and LYDIA
FACTS:
Lydia P. Cuba is a grantee of a Fishpond Lease Agreement from the
Government. Cuba obtained loans from DBP stated
under promissory notes dated September 6, 1974; August 11, 1975; and April
4, 1977 executing 2 Deeds of Assignment of her Leasehold Rights as security.
Upon failure to pay, without foreclosure proceedings it was appropriated and
DBP executed in turn a Deed of Conditional Sale of the Leasehold Rights in
her favor. Her offer to repurchase was accepted and a new Fishpond Lease
Agreement was issued by the Ministry of Agriculture and Food in her favor
alone excluding her husband. Failing to pay her amortizations, she entered
into a temporary agreement with DBP. Soon, she was sent a Notice of
Rescission and DBP took possession of the Leasehold Rights of the fishpond.
After the public bidding, DBP executed a Deed of Conditional Sale in favor of
defendant Agripina Caperal. Cuba filed against DBP since no foreclosure
proceedings was done thus, contrary to Article 2088 of the Civil Code.
in September 1985 when her son and a caretaker went to the fishpond
and the adjoining house that she came to know of the alleged loss of
several articles
bangus which died also not duly proved nor was it expressed in her later
7 months after DBP took over
The award of actual damages should, therefore, be struck down for lack
of sufficient basis
Exemplary or corrective damages in the amount of P25,000 should
likewise be awarded by way of example or correction for the public
good. There being an award of exemplary damages, attorneys fees are
also recoverable

RTC: favored Cuba, it being a pactum commissorium return leasehold rights

to Cuba, entitling P1,067,500 actual damages, P100,000 moral
and P50,000 exemplary damages and P100,000 attorneys fees

CA: leasehold rights to Caperal as valid but same damages

ISSUE: W/N Cuba should be awarded with actual and compensatory damages

HELD: NO. CA reversed except the P50,000 as moral damages. REMANDED

to the trial court for the reception of the income statement of DBP, as well as
the statement of the account of Lydia P. Cuba, and for the determination of
each partys financial obligation to one another
assignment of leasehold rights was a mortgage contract (Article 2087)
not novated, cession (Article 1255 of the Civil Code), dation in payment
(Article 1245 of the civil Code), pactum commissorium
condition no. 12 did not provide that CUBAs default would operate to vest
in DBP ownership of the said rights
The fact that CUBA offered and agreed to repurchase her leasehold rights
from DBP did not estop her from questioning DBPs act of appropriation.
estoppel cannot give validity to an act that is prohibited by law or against
public policy
alleged loss of personal belongings and equipment was not proved by
clear evidence. Other than the testimony of CUBA and her caretaker,
there was no proof as to the existence of those items before DBP took
over the fishpond in question. Neither was a single receipt or record of
acquisition presented.
dated 17 May 1985, CUBA included losses of property as among the
damages resulting from DBPs take-over of the fishpond. Yet, it was only