2.

Azcuna v CA
G.R. No. 116665 | March 20, 1996 
Bea Jose

                                                                                                                                                    DOCTRINE: The
freedom of the contracting parties to make stipulations in their contract provided they are not contrary to law,
morals, good customs, public order or public policy is so settled. 

FACTS:

Petitioner, Azcuna, Jr. leased 3 units of the building owned by private respondent Barcelona's family. Upon the
expiration of the lease contract, petitioner did not renew the contract and failed to surrender the unit upon the
respondent’s demand. Barcelona filed an ejectment suit where the court decided in favor of Barcelona and ordered
the petitioner to vacate the premises, pay 25k as monthly rentals and an additional 3k as liquidated damages.

Petitioner comes to the court to contest the payment of 3k as damages citing previous jurisprudence (Felesilda v
Villanueva, Shomeart v CA and Hualam Construction Corp v CA) that the only damages that can be recovered in an
ejectment suit are the fair rent or compensation for use and that other damages must be claimed in an ordinary
action.

PROCEDURAL HISTORY:                                                                                                                 RTC affirmed

MTC. In favor of Barcelona affirming the payment of damages.

ISSUE/S:                                                                                                                                          Whether or not

payment of liquidated damages amounting to 3k is warranted?

RULING:                                                                                                                                                      Petitoner’s
reliance on previous jurisprudence is misplaced since the other cases dealt and discussed additional damages other
than liquidated damages.

The Court merely enforced what was stipulated by private respondent-lessor and petitioner-lessee in the lease
contract entitling private respondent to damages. The contract provides: 

 "That after the termination of the lease, the LESSEE shall peaceably deliver to the LESSOR the leased
premises vacant and unencumbered and in good tenantable conditions minus the ordinary wear and tear. In
case the lesee’s failure or inability to do so , Lessor has the right to charge the lessee1,000 per day as
damages without prejudice to other remedies which lessor is entitled in the premise."

The freedom of the contracting parties to make stipulations in their contract provided they are not contrary to law,
morals, good customs, public order or public policy is so settled, and the Court finds nothing immoral or illegal with
the indemnity/penalty clause of the lease contract which does not appear to have been forced upon or fraudulently
imposed on petitioner. Petitioner cannot now evade further liability for liquidated damages. He cannot now turn his
back on his word and claim that the penalty imposed on him is iniquitous and unconscionable.

The court held that the controlling case is Gozon v Vda de Barrameda which involved similar facts and the same
issue that is raised in this case. The Court in this case also affirmed the payment of damages, amounting to 5k as it
was previously agreed by the lessor and the lessee

DISPOSITION:

WHEREFORE, the instant petition for review by way of certiorari is hereby DENIED.