Tugonon v. Court of Appeals
REITERATIONFacts
1. The Antecedents: The underlying dispute concerns a contract of lease for a parcel of land in Tagbilaran, Bohol. The lessor, Primitivo Maslog, alleged that the lessee, Ricardo Tugonon, failed to comply with the lease terms by not constructing a building on the land and by subleasing it to a third party, Aquilina Hongayo, who operated an eatery. Maslog claimed Tugonon's actions deprived him of the opportunity to use the land or lease it to others under potentially better terms. Tugonon, however, contended that his failure to build was due to Maslog's fault, citing an unidentified obstruction on the leased premises and an alleged misrepresentation of the land's ownership. Tugonon also asserted that he paid the full rental amount in advance and that Hongayo occupied the premises rent-free. 2. Procedural History: Primitivo Maslog initiated Civil Case No. 3479 before the Court of First Instance of Bohol (now RTC-Bohol) on September 4, 1981, seeking termination of the lease contract, repossession of the property, and damages. After trial, the Regional Trial Court of Bohol, Branch 2, ruled in favor of Tugonon on August 30, 1988, declaring the lease contract invalid due to an uncertain subject matter and ordering Maslog to reimburse Tugonon for advance rentals and pay damages, moral damages, attorney's fees, and costs. Maslog appealed this decision. The Court of Appeals, on February 22, 1992, reversed the trial court's ruling, ordering Tugonon to pay Maslog P30,000.00 in damages and allowing Maslog to retain the P3,000.00 paid as rentals. 3. The Petition: Ricardo V. Tugonon filed this petition for review on certiorari under Rule 45 of the Rules of Court, assailing the decision of the Court of Appeals. The sole issue raised by the petitioner is whether the Court of Appeals erred in finding that the lease contract was not rendered null and void despite an error in identifying the leased lot as Lot No. 359-A-2 instead of Lot 359-C, which was allegedly the intended subject of the lease. Tugonon argues that this misidentification rendered the subject matter uncertain. The petition seeks to overturn the appellate court's conclusion that both parties understood Lot 359-C to be the leased property, despite the contractual error.
Issue(s)
Whether the contract of lease is null and void due to the erroneous identification of the leased property. Whether the Court of Appeals erred in reversing the Regional Trial Court's decision regarding the validity of the contract of lease.
Ruling
The petition is denied for lack of merit. The Supreme Court affirmed the decision of the Court of Appeals. The dispositive portion of the CA decision ordered Ricardo V. Tugonon to pay Primitivo Maslog P30,000.00 as damages, and plaintiff-appellant is entitled to retain the amount of P3,000.00, as rentals, of the subject property. Costs against defendant-appellee Ricardo V. Tugonon.
Ratio Decidendi
On the issue of the validity of the contract of lease due to erroneous identification of the leased property: The Supreme Court held that the contract of lease was not rendered null and void despite the erroneous designation of the lot as Lot 359-A-2 instead of Lot 359-C. The Court found that both parties intended a particular part of Lot 359-C to be the object of their lease contract. Evidence supporting this intent included the fact that the lease contract, while not mentioning the TCT or tax declaration numbers, clearly referred to a specific parcel of land. Furthermore, a joint letter sent by Tugonon and Maslog to Miguelita Maslog Chavez regarding an encroachment on Tugonon's Lot 359-D mentioned Lot 359-C as Maslog's lot. The Court also considered the CA's observation that if Tugonon could not identify the leased land, he would not have allowed Hongayo to construct a store therein. These circumstances collectively established the certainty of the object of the lease, which is a fundamental requirement for a valid contract. The Court reiterated that even with an erroneous designation, if the object is capable of being made certain, the contract remains valid. On the issue of whether the Court of Appeals erred in reversing the Regional Trial Court's decision: The Court found no reversible error in the CA's conclusion that the lease contract was valid despite the initial misidentification of the lot number.
Main Doctrine
A contract of lease is not rendered void by an erroneous designation of the leased property, provided that the parties' intent to lease a specific parcel of land is clearly established and the object of the contract is capable of being made certain.