Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&amp;view=article&amp;id=51692:gr-174154-2008&amp;catid=1510&amp;Itemid=566
Timestamp: 2019-04-21 12:54:17+00:00

Document:
JESUS CUENCO, Petitioner, v. TALISAY TOURIST SPORTS COMPLEX, INCORPORATED AND MATIAS B. AZNAR III, Respondents.
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Decision dated April 18, 2005 and the Resolution dated August 15, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 65773.
On May 25, 1992, petitioner leased from respondents for a period of two (2) years, from May 8, 1992 to May 8, 1994, the Talisay Tourist Sports Complex, to be operated as a cockpit. The lease was extended for another four (4) years, or until May 8, 1998.
Upon expiration of the contract, respondent company conducted a public bidding for the lease of the property. Petitioner participated in the bidding. The lease was eventually awarded to another bidder, Mr. Rex Cuaqui Salud.5 Thereafter, petitioner wrote four (4) demand letters to respondents.
I was so disheartened that after going through with the supposed public bidding, haggling with the terms and conditions of a new lease agreement and after full compliance of ALL your requirements and the handshakes signifying the clinching of the deal, the contract was awarded to another party. Though I believe I deserve a renewal, I had to accept your decision with a heavy heart.
It is now my desire to be released quickly from whatever liability or responsibility under our previous contract. Repair works on some damaged portions were already done. Based on our contract, par. 5 thereof, it is my understanding that I am answerable to all damages caused to furnitures (sic), chattels and other equipments and minor parts of the leased premises. Once cleared, I want the return of my deposit of P500,000.00.
Kindly send your inspector to determine by actual ocular inspection if the restoration work is to your satisfaction.
It has been more than a week since my letter dated 8 June 1998 requesting the return of my deposit of P500,000.00. I would assume your representative had already conducted an ocular inspection and you were satisfied on the restoration works made on the premises. As I ve stated in my said letter, I want to be released as soon as possible.
I need to know immediately if I still have other things to comply with as pre-condition for the release of the deposit. As far as I know, I have already done my part.
I am surprised by the unreasonable delay in the release of my deposit of P500,000.00 in spite of my full compliance as to repair works on minor damage to the premises during my term as lessee. Twice I requested in writing for the immediate release of my deposit but until now it remains unheeded. And the so-called "inventory" which your lawyer Atty. Algoso8 promised to give has not been given. Frankly, I am doubtful of the accuracy of said inventory, if any, considering the full blast major renovation now being conducted on the complex by the new concessionaire. I think it's about time we close the last chapter of the book, in a manner of speaking, so we can proceed in our separate distinct ways.
I reiterate my request to please release right now my deposit of P500,000.00.
For ignoring the two letters of my client Mr. Jesus C. Cuenco, dated June 8 and 17, 1998 regarding his request for the return of his deposit in the sum of P500, 000.00, he has decided to endorse the matter to this office for appropriate action.
It appears that when Mr. Cuenco leased the cockpit complex he was required to put up a deposit to answer for damages that may be caused to furnitures (sic), chattels and other equipments and minor repairs on the leased premises. When the lease expired and he failed to get a renewal, Mr. Cuenco in fulfillment of his obligation under the contract caused the repair of minor damage to the premises after which your attention was invited to get your reaction to the restoration work. And since he did not receive any objection, it can be safely premised that the restoration was to the lessor's satisfaction.
Mr. Cuenco informed me that the new concessionaire has undertaken a full blast major renovation of the complex. Under this condition and in the absence of an accurate inventory conducted in the presence of both parties, it would be doubly difficult, if not impossible, to charge Mr. Cuenco of any violation of his undertaking especially as to deficiency in the furnitures (sic), chattels and other equipments in the premises.
In view of all the foregoing, it is consequently demanded that you return to Mr. Cuenco the aforesaid sum of P500,000.00 within THREE (3) DAYS from notice hereof; otherwise, he may be constrained to seek judicial relief for the return of the deposit plus interest, damages and attorney's fees.
3. [Petitioner] sends (sic) several letters of demand to [respondents] but said letters were not answered.
4. There was a renovation of the Talisay Tourist Sports Complex with a qualification that the renovation is only 10% of the whole amount.
On May 24, 1999, the RTC issued an Order18 admitting the exhibits of petitioner, consisting of the contract of lease dated May 4, 1994 and the four (4) demand letters.
On July 29, 1999, an Order19 was issued by the same court formally admitting the respondents' following exhibits: the lease contract, inventory of the leased property as of June 4, 1998, inventory of the sports complex dated June 24, 1995, ocular inspection report dated January 15, 1998 and various receipts mostly in the name of Southwestern University incurred in different months of 1998.
WHEREFORE, judgment is hereby rendered in favor of [petitioner] and against the [respondents], directing the latter jointly and severally to return to [petitioner] the sum of P500,000.00, representing the deposit mentioned in the Complaint, plus 3% interest per month from August 18, 1998 until full payment thereof.
The latter are, likewise, directed to pay [petitioner] the sum of P15,000.00 as and for litigation expenses.
With costs against the [respondents].
WHEREFORE, with the foregoing, the Decision of the Regional Trial Court, Branch 13, Cebu City, dated August 11, 1999, is REVERSED and SET ASIDE, and a new one entered finding this case in favor of defendants-appellants Talisay Tourists Sports Complex and Matias Aznar III. Consequently, Civil Case No. CEB-22847 for sum of money, damages, and attorney's fees involving herein parties, as well as all other claims and counterclaims are hereby DISMISSED for lack of factual and legal basis.
The ultimate question we must resolve is whether petitioner is entitled to the return of the amount deposited.
We rule in the affirmative. Respondents failed to present sufficient proof to warrant the retention of the full amount of the deposit given by petitioner.
The Supreme Court is not a trier of facts, and as a rule, does not weigh anew the evidence presented by the parties. However, the instant case is one of the exceptions to the rule because of the conflicting decisions of the RTC and the CA based on contradictory factual findings. Thus, we have reviewed the records in order to arrive at a judicious resolution of the case at bench.
Petitioner questions the CA's finding that there was damage caused the premises while the lease was still in force. Such finding could only have been based on alleged inventory of the property conducted by the respondents. Petitioner takes exception to this evidence because of the earlier judicial admission made by respondents' counsel that no inventory was conducted and, accordingly, any evidence adduced by the respondents contrary to or inconsistent with the judicial admission should be rejected.
Indeed, at the pre-trial conference, respondents' counsel made an admission that no inventory was made on the leased premises, at least up to that time. This admission was confirmed in the Pre-Trial Order issued by the trial court on March 8, 1999 after the lease expired on May 8, 1998.
A Because Talisay Sports Complex is owned by Aznar Brothers Realty Corporation of which I am employed as (sic) in charge of the realty department.
A He is the Chairman of the Board.
A Of the Aznar Brothers Realty Corporation.
A I am the in-charge of the administration and overseeing of the complex owned by Talisay Sports Complex.
A It includes collection of rentals of complex and routine inspection to determine that there are missing or damage of (sic) the properties.
A Yes, we conducted inspection sometime in January 1998.
A The purpose is to determine if there are damage sustained by the complex.
Q And what was the result of the inspection.
A There were missing and destroyed fixtures and physical damage sustained by the complex.
A We did not take pictures, Your Honor, because in fact their personnel were in our presence (sic) during the inspection, they were accompanied by us, because we can not conduct inspection without the presence of the personnel of Jesus Cuenco, Your Honor, the lessee.
A There was no refusal, but we did not initiate to let them sign and confirm.
Obviously, it was on Coronado's testimony, as well as on the documentary evidence29 of an alleged property inventory conducted on June 4, 1998, that the CA based its conclusion that the amount of damage sustained by the leased premises while in the possession of petitioner exceeded the amount of petitioner's deposit. This contradicts the judicial admission made by respondents' counsel which should have been binding on the respondents.
SEC. 4. Judicial admissions. ' An admission, verbal or written, made by a party in the course of the proceedings in the same case, does not require proof. The admission may be contradicted only by a showing that it was made through palpable mistake or that no such admission was made.
A party may make judicial admissions in (1) the pleadings, (2) during the trial, by verbal or written manifestations or stipulations, or (3) in other stages of the judicial proceeding.30 The stipulation of facts at the pre-trial of a case constitutes judicial admissions. The veracity of judicial admissions require no further proof and may be controverted only upon a clear showing that the admissions were made through palpable mistake or that no admissions were made. Thus, the admissions of parties during the pre-trial, as embodied in the pre-trial order, are binding and conclusive upon them.
Thus, respondents are bound by the admissions made by their counsel at the pre-trial. Accordingly, the CA committed an error when it gave ample evidentiary weight to respondents' evidence contradictory to the judicial admission.
Yet, upon perusal of the receipts presented by respondents, we found that majority of the receipts are under the name of Southwestern University. In their Memorandum,34 respondents aver that Southwestern University and respondent corporation are sister companies.35 Even if true, this matter is of no consequence because respondent company and Southwestern University have distinct and separate legal personalities, and Southwestern University is not a party to this case. Thus, we cannot just accept respondents' argument that the receipts paid in the name of Southwestern University should be credited to respondent company. In any event, they were not able to prove that those receipts were in fact used for the repair or maintenance of the respondents' complex.
A There was a renovation and repair.
A Yes, he took over that repair and renovation were no longer included in this presentation, that is at his own expense.
Finally, the Court observes that the inventories presented by respondents were not countersigned by petitioner or were they presented to the latter prior to the filing of the case in the RTC. Thus, we are more inclined to agree with the trial court that the "inventory was made as an afterthought,"37 in a vain attempt of the respondents to establish their case.
A Yes, because it had happened on this extension of the lease because they are still occupying until July after the expiration of the contract.
A Yes, they are still doing their usual operation.
This two (2) months over-stay of petitioner in the leased premises should be charged against the deposit. Because there was no renewal of the lease contract, it is understood that the continued use of the premises is on a monthly basis with the rental in the amount previously agreed upon by the parties, in accordance with Articles 167039 and 168740 of the Civil Code.
Thus, by way of rental for the two-month overstay, the amount of P195,833.34 should be deducted from the amount of deposit paid by petitioner to respondent company.
As to petitioner's claim of interest of three percent (3%) per month on the amount due him, the same is without legal basis. We note that no amount of interest was previously agreed upon by the parties in the contract of lease.
2. 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.
(2) The rate of legal interest to be paid is SIX PERCENT (6%) on the amount due computed from October 21, 1998, and TWELVE PERCENT (12%) interest, thereon upon finality of this decision until full payment thereof.
2 Paragraph 4 of the Contract of Lease, id. at p. 7.
3 Paragraph 5 of the Contract of Lease, id.
4 Paragraph 11 of the Contract of Lease, id.
5 The new lessee's name appears in other parts of the records as Wakee/Wacky Salud.
8 Atty. Algoso is the in-house counsel of the respondents.
16 Issued by Judge Meinrado P. Paredes; id. at 34.
20 Penned by Judge Meinrado P. Paredes; id. at 59-68.
23 Penned by Associate Justice Enrico A. Lanzanas, with Associate Justices Arsenio J. Magpale and Sesinando E. Villon, concurring; rollo, pp. 36-42.
29 Exhibits "2," "2-B," "2-C" and "2-D."
30 Binarao v. Plus Builders, Inc., G.R. No. 154430, June 16, 2006, 491 SCRA 49.
31 Ramos v. Dizon, G.R. No. 137247, August 7, 2006, 498 SCRA 17, 34.
32 Yujuico v. Atienza, Jr., G.R. No. 164282, October 12, 2005, 472 SCRA 463.
36 TSN, July 1, 1999, pp. 19-30.
38 TSN, July 1, 1999, pp. 17-18.
39 Art. 1670. If at the end of the contract the lessee should continue enjoying the thing leased for fifteen days with the acquiescence of the lessor, and unless a notice to the contrary by either party has previously been given, it is understood that there is an implied new lease, not for the period of the original contract, but for the time established in Articles 1682 and 1687. The other terms of the original contract shall be revived.
40 Art. 1687. If the period for the lease has not been fixed, it is understood to be from year to year, if the rent agreed upon is annual; from month to month, if it is monthly; from week to week, if the rent is weekly; and from day to day, if the rent is to be paid daily. However, even though a monthly rent is paid, and no period for the lease has been set, the courts may fix a longer term for the lease after the lessee has occupied the premises for over one year. If the rent is weekly, the courts may likewise determine a longer period after the lessee has been in possession for over six months. In case of daily rent, the courts may also fix a longer period after the lessee has stayed in the place for over one month.
42 CIVIL CODE, Art. 2209.
If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is six per cent per annum.
43 CIVIL CODE. Art. 2212.
Interest due shall earn legal interest from the time it is judicially demanded, although the obligation may be silent upon this point.
44 G.R. No. 97412, July 12, 1994, 234 SCRA 79.
45 Siemens Philippines, Inc. v. Enrico A. Domingo, GR. No. 150488, July 28, 2008.

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