Mallari v. Alsol
REITERATIONFacts
The Antecedents: Stalls No. 7 and 8 of the Cabanatuan City Public Market were awarded to Abelardo Mallari, who subsequently gave them to his son Manuel Mallari (petitioners) and respondent Rebecca Alsol. Petitioners occupied Stall No. 7, and respondent occupied Stall No. 8. When respondent and her family were away for two months due to her daughter's illness, petitioners occupied Stall No. 8, removed the partition, and took respondent's merchandise. Procedural History: The City Market Committee awarded Stall No. 7 to Manuel and Stall No. 8 to respondent. Respondent and the City Government executed a Lease Contract for Stall No. 8. Petitioners filed an annulment case, which was dismissed for non-exhaustion of administrative remedies. Respondent then filed an action for recovery and possession. The Regional Trial Court (RTC) ruled in favor of respondent, declaring her the rightful awardee of Stall No. 8, ordering petitioners to vacate, and awarding damages and attorney's fees. The Court of Appeals (CA) affirmed the RTC's decision with modification, deleting the award for actual and exemplary damages but sustaining respondent's right to occupy Stall No. 8 and the award of attorney's fees. Petitioners appealed to the Supreme Court. The Petition: Petitioners assail the CA's decision, raising issues on the propriety of the award of Stall No. 8 to respondent, the validity of the Lease Contract, and the entitlement to attorney's fees.
Issue(s)
Whether the ruling on respondent being the proper awardee of Stall No. 8 is premature. Whether the Lease Contract executed between respondent and the City Government is valid. Whether respondent is entitled to attorney's fees.
Ruling
The petition is denied. The Court affirmed the decision of the Court of Appeals, upholding the validity of the Lease Contract and the award of attorney's fees to the respondent.
Ratio Decidendi
On whether the ruling on respondent being the proper awardee of Stall No. 8 is premature: The Court ruled that any resolution on whether respondent is the proper awardee of Stall No. 8 would be premature. This is because petitioners had filed an appeal before the Secretary of Finance questioning the award, and this appeal was still pending at the time the Court of Appeals promulgated its decision. The Court acknowledged that ruling on this issue would preempt the decision of the Secretary of Finance. Therefore, the Court deferred making a definitive pronouncement on the awardee status pending the administrative resolution. On the validity of the Lease Contract: The Court upheld the validity of the Lease Contract executed between respondent and the City Government. Petitioners argued that the City Treasurer, not the City Mayor, should have signed the contract and that Republic Act No. 7160 was erroneously applied. The Court clarified that Batas Pambansa Blg. 337 (BP 337), the applicable law at the time of the contract's execution, granted city mayors the authority to represent the city in business transactions and sign contracts. Furthermore, the Court addressed the argument that the contract was invalid because the Mayor did not personally appear before the notary public. Citing Article 1358 of the Civil Code, the Court explained that notarization is for convenience and not for validity, and failure to observe the proper form does not invalidate a contract if all essential requisites are present. Thus, the Lease Contract was deemed valid. On the entitlement to attorney's fees: The Court agreed with the Court of Appeals that the award of attorney's fees was justified. Petitioners' refusal to vacate and turn over Stall No. 8 to respondent, despite repeated demands and the existence of a valid Lease Contract, compelled respondent to litigate to protect her interests. This situation falls under Article 2208(2) of the Civil Code, which allows for the recovery of attorney's fees when a party's act or omission forces the other to incur expenses to protect their rights. Therefore, the award of P10,000.00 as attorney's fees was sustained.
Main Doctrine
The validity of a lease contract for a public market stall, executed by a City Mayor under the old Local Government Code (BP 337), is upheld even if the Mayor did not personally appear before the notary public, as notarization is for convenience, not validity, and the Mayor's authority to sign contracts is established. The pendency of an appeal to a higher administrative body does not automatically invalidate a contract already entered into.