Abella v. Colarina
REITERATIONFacts
The Antecedents: Petitioner Mercedes N. Abella, as lessor, and private respondent Conrado Colarina, as lessee, entered into a contract of lease for a portion of a building in Naga City from July 1, 1987, to July 1, 1991, with a monthly rental of P3,000.00. Upon signing, Colarina paid P40,000.00 to Abella, issuing a receipt. Colarina introduced improvements worth P68,000.00 for his pawnshop business. Colarina paid rentals regularly until November 1987, discontinuing payments until April 1988. Abella made demands for payment with notice of rescission, which were unheeded. Abella took possession of the premises on May 1, 1988, with official assistance and inventoried the items found therein. Procedural History: On May 5, 1988, Colarina filed an action for enforcement of contract of lease with preliminary mandatory injunction and damages before the Regional Trial Court (RTC). The RTC ordered Abella to return P22,000.00 to Colarina (P40,000.00 less P18,000.00 for unpaid rentals) and the destroyed/removed materials and improvements, while dismissing the case for lack of merit. The Petition: On appeal, the Court of Appeals reversed the RTC decision, ordering Abella to restore possession of the premises to Colarina under the original terms, restore or pay the value of improvements (P68,000.00 with interest), and pay costs. Abella filed a petition for review on certiorari, questioning the Court of Appeals' findings on whether Colarina violated the lease contract warranting rescission and whether possession could be restored.
Issue(s)
Whether or not respondent Colarina violated the contract of lease warranting its extrajudicial rescission. Whether or not possession of the premises may properly be restored to Colarina.
Ruling
The Court modified the decision of the Court of Appeals. Petitioner Mercedes N. Abella was ordered to return to private respondent Conrado Colarina the amount of P22,000.00 (P40,000.00 less P18,000.00 for unpaid rentals from November 1987 to April 1988). Petitioner was also ordered to pay Colarina P68,000.00, representing the value of the demolished improvements, with legal interest from May 1, 1988, until fully paid. The issue of restoring possession was rendered moot and academic by the expiration of the lease term.
Ratio Decidendi
On the issue of whether Colarina violated the contract of lease warranting rescission: The Court upheld the findings of the Court of Appeals, ruling that Colarina did not violate the contract with respect to his rental obligation. The P40,000.00 paid by Colarina was clearly an advance deposit to answer for any rental default, as explicitly stated in the receipt issued by Abella. The Court emphasized the cardinal rule in contract interpretation that clear and unequivocal stipulations shall control. The receipt's wording, "AS ADVANCE DEPOSIT, TO ANSWER FOR ANY RENTAL WHICH MR. CONRADO COLARINA MAY FAIL TO PAY DURING THE TERM OF THE LEASE," left no doubt as to the parties' intent. This written evidence was deemed more reliable than Abella's oral testimony claiming it was merely "goodwill money." The Court noted that oral testimony depends on memory, which is less reliable than documentary evidence. Furthermore, Abella's claim that her signature was forged or that fraud was involved was unsubstantiated and raised for the first time on appeal, which is impermissible. Therefore, Abella's rescission of the lease contract was deemed improper as Colarina was not in arrears. On the issue of whether possession of the premises may properly be restored to Colarina: The Court declared this issue moot and academic. The term of the contract of lease expired on July 1, 1991. Consequently, Colarina no longer had any right to be restored to the possession of the leased premises, as such right was coterminous with the lease term.
Main Doctrine
The clear and unequivocal terms of a written receipt, particularly when it explicitly states the purpose of a payment, shall control over oral testimony attempting to alter its meaning, especially when the receipt is genuine and the party signing it is presumed to have acted with due care.