Case 223

VICTORIA N. RACELIS vs. SPOUSES GERMIL JAVIER and REBECCA

G.R. No. 189609 January 29, 2018

Doctrine:
Lessees are entitled to suspend the payment of rent under Article 1658 of
the Civil Code if their legal possession is disturbed. Acts of physical
disturbance that do not affect legal possession is beyond the scope of this
rule.

Facts:
Ms. Racelis, put up for sale a house and lot and it was offered for sale to
spouses. They couldn’t afford so they rented it instead for 11k per month.
They used it as a dwelling. Spouses volunteered to pay P100,000.00 to
give them time find money to buy it. First payment was 65k and at the end
of 2003 a total of 78k out of 100k was actually paid. By February 2004, they
had fallen behind of rent. Racelis want to end the lease and sell the house
it to another. Racelis filed an ejection case before the MTC against them.
Furthermore, the petitioner contends that she did not surrender her right to
be reimbursed for the first payment of 78k. As a result, she has the right to
keep it, and it cannot be used to pay responders' rent. Respondents do not
contest their need to pay rent that has already been paid. However, they
request that the initial payment be used as their rent. According to the
respondents, the petitioner waived her right to this amount. Thus, it shall be
applied to pay their obligation.

Issue:
Whether respondent right to delay rent payment under Article 1658 of the
Civil Code can be used.

Ruling:

Right to delay payment of rent cannot be used in this case. The

disconnection of electrical service over the leased premises on May 14,
2004 was not just an act of physical disturbance but one that is meant to
remove respondents from the leased premises and disturb their legal
possession as lessees. Ordinarily, this would have entitled respondents to
invoke the right accorded by Article 1658 of the Civil Code.

However, this rule will not apply in the present case because the lease had
already expired when petitioner requested for the temporary disconnection
of electrical service. Petitioner demanded respondents to vacate the
premises by May 30, 2004. Instead of surrendering the premises to
petitioner, respondents unlawfully withheld possession of the property.
Respondents continued to stay in the premises until they moved to their
new residence on September 26, 2004. At that point, petitioner was no
longer obligated to maintain respondents in the "peaceful and adequate
enjoyment of the lease for the entire duration of the contract." 77 Therefore,
respondents cannot use the disconnection of electrical service as
justification to suspend the payment of rent.

Case 224
VILLARICA PAWNSHOP, INC. V. SOCIAL SECURITY COMMISSION
G.R. NO. 228087 JANUARY 24, 2018

Doctrine:
Condonation statutes-being an act of liberality on the part of the State-are
strictly construed against the applicants unless the laws themselves clearly
state a contrary rule of interpretation.

Facts:
Pawnshop are required by law to register with the SSS. Petitioners made
installment payments to the SSS to pay their late contributions and
penalties. On January 7, 2010, Congress enacted R.A. No. 9903 Social
Security Condonation Law of 2009, which took effect on February 1, 2010.
Within 6 months of the law's effective date, delinquent employers were
allowed to pay their accountabilities or overdue contributions without
penalty. According to the petitioners, condonation extend to all employers
who have paid their arrears or unpaid contributions even before the statute
went into effect.
SSC denied all the petitions for lack of merit. Petitioners appealed before
the CA.

Issue:
Whether Section 4 of RA 9903 extends the benefit of the waiver to
employers who have settled their arrears before the effectivity of the law to
allow the refund of the corresponding penalties paid.

Ruling:
Accordingly, RA 9903 covers those employers who (1) have existing
delinquent contributions and/or (2) have accrued penalties at the time of its
effectivity.
Evidently, there is nothing in RA 9903, particularly Section 4 thereof, that
benefits an employer who has settled their delinquent contributions and/or
their accrued penalties prior to the effectivity of the law. Once an employer
pays all his delinquent contributions and accrued penalties before the
effectivity of the law, it cannot avail of the condonation program because
there is no existing obligation anymore. It is the clear intent of the law to
limit the benefit of the condonation program to the delinquent employers.
Case 225
ROLANDO DE ROCA V. EDUARDO DABUYAN
G.R. NO. 215281 MARCH 5, 2018

Doctrine:
Substantive law outweighs procedural complexities because the norms of
procedure are only tools for achieving justice.

Facts:
The labor arbiter ordered private respondents to file an illegal dismissal
complaint against "RAF Mansion Hotel Old Management and New
Management and Victoriano Ewayan," claiming that Ewayan was the
employer of private respondents and that there was no employer-employee
relationship between them and the labor arbiter.
The petitioner filed a Petition for Certiorari with the CA, The petition was
dismissed as a result of the CA's appealed decision. This boils down to
whether or not they had an employer-employee connection, which
determines whether or not the NLRC has jurisdiction over the case.

Issues:
Whether or not the CA erred in affirming that petitioner is solidarily liable
with Ewayan/Oceanic to private respondents.

Ruling:
Yes. All throughout the proceedings, petitioner has insisted that he was not
the employer of respondents; that he did not hire the respondents, nor pay
their salaries nor exercise supervision or control over them, nor did he have
the power to terminate their services.
In support of his claim, he attached copies of a lease agreement – a
Contract of Lease of a Building- executed by him and Oceanic represented
by Ewayan through his attorney-in-fact. Petitioner likewise attached to the
instant Petition copies of: 1) a January 23, 2012 letter of demand to pay
and vacate sent to Ewayan, directing the latter’s attention to previous
demand letters sent to him and making a final demand to pay rentals in
arrears; and 2) a written waiver and acknowledgment executed by
respondents and other Oceanic employees to the effect that petitioner
should not be held liable as owner of the premises for the “problems”
caused by Ewayan.
Case 226
VILLA CRISTA MONTE REALTY & DEVELOPMENT CORPORATION VS
EQUITABLE PCI BANK
G.R. No. 208336 November 21, 2018

Doctrine:
In order for contract duties to have legal force between them, there must be
mutuality between the parties based on their inherent equality. Thus, an
escalation clause must be provided as it is void if a contract has a condition
that renders its fulfillment solely dependent on one of the contractual
parties' uncontrollable will.

Facts:
Villa Crista Monte Realty Corporation, was in real estate development. It
purchased an 8-hectare tract of property from Alfonso Lim, with the
intention of developing it into a residential subdivision. The appellant
Corporation then negotiated and subsequently obtained the purchase of
the adjacent land.
They received a credit line of P80 million from the Banco De Oro, to
completely construct their subdivision project.

The appellant applied to Banco De Oro for a P50 million credit facility. After
it was later determined that 41 of the 174 subdivided lots would already be
sufficient security for the credit facility, the appellant sought the release of
the remaining 133 mortgaged lots As long as the real estate mortgage
contract is updated to reflect changes in the credit line and properties that
are mortgaged.

Issue:
Whether the escalation clause provided for in the promissory notes is valid.

Ruling:
The real estate mortgage and promissory notes, as well as the ensuing
foreclosure processes, were found to be legal by both the trial and appeal
courts.
The escalation clause is a legal agreement between the parties that
prohibits the loan's interest rates from rising. In general, the term
"escalation clause" refers to a clause that allows the contracting parties to
agree on a set of interest rates that can be increased. The escalation
clause has nothing intrinsically wrong with it because it is legally required in
business contracts as one of the ways to ensure fiscal stability and the
worth of money in long-term contracts. The escalation clause isn't void in
and of itself.