REGALADO RULING: NO, the petitioner was not in arrears in the payment of rentals on
345 SCRA 134 the subject property at the time of the filing of the complaint for ejectment.

FACTS: On December 27, 1990, petitioner Nereo Paculdo and respondent As found by the lower court there was a letter sent by respondent to herein
Bonifacio Regalado entered into a contract of lease over a parcel of land with petitioner, dated November 19, 1991, which states that petitioner’s security
a wet market building, located at Fairview Park, Quezon City. The contract was deposit for the Quirino lot, be applied as partial payment for his account under
for twenty five (25) years, commencing on January 1, 1991 and ending on the subject lot as well as to the real estate taxes on the Quirino lot. Petitioner
December 27, 2015. For the first five (5) years of the contract beginning interposed no objection, as evidenced by his signature signifying his
December 27, 1990, Nereo would pay a monthly rental of P450,000, payable conformity thereto.
within the first five (5) days of each month with a 2% penalty for every month
of late payment. Meanwhile, in an earlier letter, dated July 15, 1991, respondent informed
petitioner that the payment was to be applied not only to petitioner’s accounts
Aside from the above lease, petitioner leased eleven (11) other property from under the subject land and the Quirino lot but also to heavy equipment bought
the respondent, ten (10) of which were located within the Fairview compound, by the latter from respondent. Unlike in the November letter, the July letter did
while the eleventh was located along Quirino Highway Quezon City. Petitioner not contain the signature of petitioner.
also purchased from respondent eight (8) units of heavy equipment and
vehicles in the aggregate amount of Php 1, 020,000. Petitioner submits that his silence is not consent but is in fact a rejection.

On account of petitioner’s failure to pay P361, 895.55 in rental for the month As provided in Article 1252 of the Civil Code, the right to specify which among
of May, 1992, and the monthly rental of P450, 000.00 for the months of June his various obligations to the same creditor is to be satisfied first rest with the
and July 1992, the respondent sent two demand letters to petitioner debtor.
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 In the case at bar, at the time petitioner made the payment, he made it clear
of the lease contract. 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
Without the knowledge of petitioner, on August 3, 1992, respondent obligations with respondent, all the payments made, about P11,000,000.00
mortgaged the land subject of the lease contract, including the improvements were to be applied to rental and security deposit on the Fairview wet market
which petitioner introduced into the land amounting to P35, 000,000.00, to property. However, respondent applied a big portion of the amount paid by
Monte de Piedad Savings Bank, as a security for a loan. petitioner to the satisfaction of an obligation which was not yet due and
demandable- the payment of the eight heavy equipments.
On August 12, 1992, and the subsequent dates thereafter, respondent refused
to accept petitioner’s daily rental payments. 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
Subsequently, petitioner filed an action for injunction and damages seeking to provided the guideline; i.e. no payment is to be applied to a debt which is not
enjoin respondents from disturbing his possession of the property subject of yet due and the payment has to be applied first to the debt which is most
the lease contract. On the same day, respondent also filed a complaint for onerous to the debtor.
ejectment against petitioner.
The lease over the Fairview wet market is the most onerous to the petitioner
The lower court rendered a decision in favor of the respondent, which was in the case at bar.
affirmed in toto by the Court of Appeals.
Consequently, the petition is granted.
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

Failing to pay her amortizations. it being a pactum commissorium return leasehold rights to Cuba.  dated 17 May 1985. she entered into a temporary agreement with DBP. CA reversed except the P50. Cuba obtained loans from DBP stated 7 months after DBP took over under promissory notes dated September 6. dation in payment (Article 1245 of the civil Code). she was sent a Notice of Rescission and DBP took possession of the Leasehold Rights of the fishpond. There being an award of exemplary damages. RTC: favored Cuba. 1975. Cuba is a grantee of a Fishpond Lease Agreement from the  bangus which died also not duly proved nor was it expressed in her later Government. DBP executed a Deed of Conditional Sale in favor of defendant Agripina Caperal. 1977 executing 2 Deeds of Assignment of her Leasehold Rights as security. therefore. P100. 1974. and April  The award of actual damages should. 12 did not provide that CUBA’s 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 DBP’s act of appropriation.000 exemplary damages and P100. Cuba filed against DBP since no foreclosure proceedings was done thus.000 attorney’s 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. After the public bidding. cession (Article 1255 of the Civil Code). as well as the statement of the account of Lydia P. it was only . be struck down for lack 4.067.000 as moral damages.000 moral and P50. without foreclosure proceedings it was appropriated and  Exemplary or corrective damages in the amount of P25. CUBA included “losses of property” as among the damages resulting from DBP’s take-over of the fishpond. Her offer to repurchase was accepted and a new Fishpond Lease good. of sufficient basis Upon failure to pay. August 11. pactum commissorium  condition no. Cuba. Other than the testimony of CUBA and her caretaker. Soon. REMANDED to the trial court for the reception of the income statement of DBP. Neither was a single receipt or record of acquisition presented.000 should DBP executed in turn a Deed of Conditional Sale of the Leasehold Rights in likewise be awarded by way of example or correction for the public her favor.DBP vs CA and LYDIA 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 FACTS: several articles Lydia P. there was no proof as to the existence of those items before DBP took over the fishpond in question. entitling P1. attorney’s fees are Agreement was issued by the Ministry of Agriculture and Food in her favor also recoverable alone excluding her husband.  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.500 actual damages. contrary to Article 2088 of the Civil Code. Yet. and for the determination of each party’s financial obligation to one another  assignment of leasehold rights was a mortgage contract (Article 2087)  not novated.