M & M Management Aids, Inc. v. Court of Appeals
REITERATIONFacts
The Antecedents: M & M Management Aids, Inc. (petitioner) leased a parcel of land from the Heirs of Candido Miguel, Sr. for ten years to be used as a factory site. The lease agreement included an option to buy the property and stipulated escalating annual rentals. Procedural History: On May 20, 1975, Management Aids filed an action for rescission of the lease, alleging failure of the lessors to surrender the title for registration and to fix a reasonable price for the property. A pre-trial order was issued on January 14, 1976, stating that, by agreement of the parties, Management Aids should pay back rentals for seven months and continue paying stipulated rentals. More than two years later, on May 20, 1978, the trial court ordered Management Aids to pay P46,000 as agreed upon in the pre-trial, threatening contempt. The Court of Appeals sustained this order, citing the pre-trial agreement. The Petition: Management Aids appealed to the Supreme Court, contending that the trial court erred in holding it liable for rentals in excess of P1,000 a month and for rentals during the pendency of the rescission case, arguing the pre-trial order was interpreted too literally.
Issue(s)
Whether the trial court erred in holding Management Aids liable to pay rentals during the pendency of the rescission case based on the pre-trial order. Whether the Court of Appeals erred in sustaining the trial court's order for payment of back rentals and future rentals, and in not considering the alleged literal interpretation of the pre-trial order as a myopic view.
Ruling
The petition is devoid of merit and should not have been given due course. The judgment of the Court of Appeals is affirmed.
Ratio Decidendi
On the issue of rentals during the pendency of the rescission case: The Supreme Court held that the petition is devoid of merit. The trial court did not commit grave abuse of discretion in issuing the contempt order. This order was sanctioned by the 1976 pre-trial order, which was in the nature of a compromise on the rentals during the pendency of the suit. Therefore, the pre-trial order, by agreement of the parties, had the force of res judicata concerning the payment of rentals pendente lite. The Court emphasized that the agreement at the pre-trial conference settled the question of rentals during the litigation. On the issue of the Court of Appeals' decision and the interpretation of the pre-trial order: The Court reiterated that certiorari is an extraordinary remedy available only for jurisdictional errors or grave abuse of discretion, meaning the action is whimsical, capricious, arbitrary, or patently illegal. It is not a remedy for every error of judgment. The Court cautioned against the assumption that every error of judgment by a trial court can be corrected by certiorari, as this would lead to endless litigation and clogged appellate dockets. Appeal in due time is the proper remedy for errors of judgment, not certiorari. The Court found no grave abuse of discretion in the trial court's order, which was based on a clear agreement reached by the parties during pre-trial.
Main Doctrine
A pre-trial order, agreed upon by the parties, which settles the issue of rentals during the pendency of a rescission case, has the force of res judicata and binds the parties. Certiorari is not a remedy for every error of judgment, but only for jurisdictional errors or grave abuse of discretion.