Tan v. Rodil Enterprises
REITERATIONFacts
The Antecedents: Rodil Enterprises (Rodil) was a lessee of the Ides O’Racca Building owned by the Republic of the Philippines. Rodil entered into a Renewal of Contract of Lease and a Supplementary Contract with the Republic, extending the lease until September 1, 1997. The validity of these contracts was questioned in various cases. Rodil subleased a space, Botica Divisoria, to petitioner Luciano Tan (Tan). Rodil filed a Complaint for Unlawful Detainer against Tan for non-payment of sublease rentals from September 1997 to the filing of the complaint, and for refusal to vacate the premises. Procedural History: The Metropolitan Trial Court (MeTC) ruled in favor of Rodil, ordering Tan to vacate and pay rentals, based on an agreement in open court where Tan agreed to pay outstanding rentals and future monthly rentals. The Regional Trial Court (RTC) reversed the MeTC decision, finding that the agreement was an offer of compromise inadmissible as evidence and that the validity of Rodil's primary lease contracts was still pending resolution. The Court of Appeals (CA) set aside the RTC decision and reinstated the MeTC ruling, holding that Tan made an implied judicial admission of the sublease and his non-payment of rentals, bolstered by his motion to deposit rentals. The CA found that the contract of lease between Rodil and the Republic dated October 18, 1999, was valid and subsisting, and Tan did not deny its existence. The Petition: Tan filed a Petition for Review on Certiorari with the Supreme Court, assailing the CA's decision and resolution. He argued that the CA erred in relying on another CA decision that had not yet become final, that Rodil engaged in forum shopping, and that the CA gravely misapprehended facts and evidence in ruling that he was a sublessee and remiss in rental payments.
Issue(s)
Whether the Court of Appeals erred in relying on a decision that had not yet become final and executory. Whether Rodil Enterprises was guilty of forum shopping. Whether the Court of Appeals committed a grave reversible error and misapprehension of facts and evidence in ruling that petitioner is a sublessee of respondent and that petitioner was remiss in the payment of his rentals over the premises.
Ruling
The Supreme Court denied the petition. It affirmed the Court of Appeals' decision, reinstating the Metropolitan Trial Court's ruling which ordered Luciano Tan to vacate the premises and pay the outstanding rentals to Rodil Enterprises.
Ratio Decidendi
On the alleged reliance on a non-final decision: The Court found no error in the Court of Appeals taking notice of its own decision in CA-G.R. SP No. 79157, as ignoring a valid judgment from the same appellate body would be unreasonable. Furthermore, the Court clarified that the petitioner's claim that the decision had not attained finality was moot, as the Supreme Court itself had denied the petition for review and the subsequent motion for reconsideration in G.R. No. 169892, making the ruling final and executory. The Court also noted that the appellate court had granted a hearing on the motion for reconsideration, contradicting the claim that it was based solely on the other decision. On the alleged forum shopping: The Court held that the issue of forum shopping was not material to the present petition. It emphasized that the cases cited by the petitioner (CA-G.R. SP No. 79157 and CA-G.R. SP No. 34586) were separate and distinct from the case before it (CA-G.R. SP No. 67201). The matter in controversy in the present case was Tan's refusal to pay rentals under a sublease agreement, whereas the other cases involved the validity and execution of the primary lease contracts. The Court also pointed out that if forum shopping had occurred, it should have been raised before the Court of Appeals in the first instance, and the finality of the rulings in those separate cases precluded the Supreme Court from resolving such a matter now. On the alleged misapprehension of facts regarding sublease and non-payment of rentals: The Court affirmed the findings of the MeTC and the Court of Appeals that Tan made a judicial admission of his liability as a sublessee and his non-payment of rentals. The Court reiterated that while an offer of compromise is generally inadmissible, it can be considered an admission of liability if it is coupled with an acknowledgment of the debt and a proposal to settle, especially when the existence of the debt is not denied. The agreement in open court to pay P440,000.00 in back rentals and P13,750.00 monthly rentals, along with the motion to deposit rentals, constituted such an admission. The Court noted that Tan did not deny the existence of the Contract of Lease dated October 18, 1999, between Rodil and the Republic, and that the contracts he assailed (May 18 and 25, 1992) had been upheld by the Supreme Court. Therefore, Tan was estopped from disavowing the lease implied from his tender of payment and admission of indebtedness.
Main Doctrine
An offer of compromise, while generally inadmissible to prove liability, may be considered an admission of indebtedness if it is coupled with an acknowledgment of the existence of the debt and a proposal to settle it, especially when the party making the offer does not deny the existence of the underlying contract or liability.