Filoil Refinery Corporation v. Mendoza
REITERATIONFacts
1. The Antecedents: The underlying dispute concerns a contract of lease over a 750 square meter lot in Cebu City. The lessors, Jesus P. Garcia and Severina B. Garcia, sought to rescind the lease agreement with Filoil Refinery Corporation. The primary grounds for rescission alleged by the lessors were the illegal subleasing of the premises by Filoil Refinery Corporation to Filoil Marketing Corporation, which then assigned the sublease to Petrophil Corporation, and the petitioners' repeated delays in remitting monthly rentals. 2. Procedural History: The Court of First Instance of Cebu, on May 14, 1976, rendered a decision rescinding the lease contract and ordering the petitioners to vacate the premises. The petitioners filed a notice of appeal on July 15, 1976, and their Record on Appeal on July 30, 1976. Subsequently, the private respondents filed a motion for execution pending appeal, which the petitioners opposed. The petitioners also filed a petition for certiorari and review with the Court of Appeals challenging the order granting execution pending appeal, which was denied. Meanwhile, the private respondents moved to dismiss the petitioners' appeal in the original case, alleging abandonment due to the failure to amend the Record on Appeal to include crucial orders. The Court of First Instance granted this motion and dismissed the appeal on September 24, 1979. A subsequent motion for reconsideration by the petitioners was denied on October 20, 1980. 3. The Petition: This case is a petition for certiorari and mandamus filed with the Supreme Court. The petitioners seek to annul the September 24, 1979, order of the Court of First Instance of Cebu dismissing their appeal and the October 20, 1980, order denying their motion for reconsideration. They also seek to compel the respondent judge to give due course to their appeal. The petitioners argue that their appeal was not abandoned, as the lower court never issued an order requiring them to amend their Record on Appeal, and they believed it was adequate. They also contend that the sublease was not prohibited by the contract and that the delays in rental payments were minor. However, the Supreme Court noted that the lease contract had expired by its own terms on September 16, 1982, rendering the issues moot and academic.
Issue(s)
Whether the lower court erred in dismissing petitioners' appeal for alleged failure to complete the record on appeal. Whether the dismissal of the appeal rendered the issues of illegal sublease and delayed rentals moot and academic due to the expiration of the lease contract.
Ruling
The petition is dismissed. The petitioners are ordered to vacate the premises.
Ratio Decidendi
On the dismissal of the appeal: The Supreme Court found that the lower court erred in dismissing the appeal. The records showed that petitioners filed their record on appeal within the reglementary period. Crucially, the lower court never issued an order declaring the record on appeal incomplete or defective, nor did it order petitioners to complete or correct it. Without such an order, petitioners were under no obligation to amend their record on appeal. Petitioners' belief that the lower court was awaiting the resolution of their certiorari petition with the Court of Appeals regarding execution pending appeal, and their reliance on the principle that a perfected appeal divests the trial court of jurisdiction, were reasonable grounds for not actively pursuing the approval of their record on appeal, negating the claim of abandonment. The Court cited De Leon vs. De Los Santos (78 Phil. 461) to support the principle that once an appeal is perfected, the trial court generally loses jurisdiction. On the substantive issues (sublease and delayed rentals): The Supreme Court noted that even if the substantive issues were to be considered, they had become moot and academic. The lease contract, which was the subject of the rescission case, expired on September 16, 1982, which was almost five years prior to the Supreme Court's decision. Therefore, the issue of whether the contract should be rescinded was no longer a live controversy. The Court also briefly touched upon the merits of the sublease issue, stating that the lease contract did not contain an express prohibition against assignment, and under Article 1650 of the New Civil Code, a lessee may sublet the thing leased in the absence of such prohibition. Regarding delayed rentals, the Court considered the delays to be minor and not substantial enough to defeat the object of the agreement, as per Article 1178 of the New Civil Code.
Main Doctrine
The dismissal of an appeal due to the alleged failure to complete the record on appeal is improper if no order was issued by the court directing the appellant to complete or correct the same. Furthermore, issues raised in a petition for certiorari and mandamus become moot and academic if the contract subject to rescission has already expired by its own terms.