G.Q. Garments v. Miranda
REITERATIONFacts
The Antecedents: Angel Miranda owned a parcel of land leased verbally on a month-to-month basis to Executive Machineries and Equipment Corporation (EMECO) for P8,000.00 per month. EMECO occupied the property and constructed a factory. After the death of Angelito Miranda, EMECO failed to pay rentals. EMECO's factory was razed by fire. Angel demanded accrued rentals and terminated the lease. EMECO vacated but did not pay. Florenda Miranda, Angelito's wife, attempted to sublease the property to G.Q. Garments, Inc. (petitioner) using a purported lease contract with EMECO, which Angel later claimed was a forgery. Angel executed a 15-year lease contract with petitioner for P30,000.00 per month. Petitioner took possession and commenced construction. Florenda, with armed men, forcibly evicted petitioner, claiming ownership and a prior lease. Petitioner regained possession after police intervention but was again ousted by Florenda. Petitioner filed an action for damages and recovery of possession against Angel, EMECO, and Florenda. Angel filed a separate complaint for declaration of nullity of the purported lease contract with EMECO, alleging forgery of his signature. The RTC dismissed petitioner's complaint for damages due to litis pendentia but noted entitlement to damages. The RTC later declared the purported lease contract with EMECO void. Procedural History: The RTC dismissed petitioner's complaint for damages against all defendants with prejudice, citing litis pendentia with other cases, though it stated petitioner was entitled to damages. Petitioner and Angel Miranda appealed to the Court of Appeals (CA). The CA reversed the RTC decision, dismissing the complaint against Angel with prejudice and ordering Florenda to pay petitioner nominal damages and attorney's fees. The CA absolved Angel, holding that the trespass was merely a trespass in fact and that the lessor's warranty extended only to legal possession, not physical possession. Petitioner moved for reconsideration, arguing actual damages were proven and Angel was liable for disturbance in law. The CA denied the motion. The Petition: Petitioner filed a petition for review on certiorari with the Supreme Court, arguing the CA erred in awarding damages below the prayed amount and in not holding Angel Miranda liable for damages.
Issue(s)
Whether the Court of Appeals committed a manifest error in awarding damages to the petitioner way below that prayed for in the complaint, thus, totally disregarding the evidence on record. Whether the Court of Appeals seriously erred in not finding that respondent Angel Miranda should likewise be held liable for damages to the petitioner.
Ruling
The petition is DENIED. The Court affirmed the Court of Appeals' decision absolving Angel Miranda of liability for damages caused by Florenda Miranda's actions and denying petitioner's claim for actual damages due to insufficient proof. The Court reiterated that a lessor is not liable for trespass in fact by a third person, and the lessee has a direct action against the trespasser.
Ratio Decidendi
On the issue of whether the Court of Appeals committed a manifest error in awarding damages to the petitioner way below that prayed for in the complaint, thus, totally disregarding the evidence on record: The Supreme Court agreed with the Court of Appeals that the petitioner's claim for actual damages was not properly substantiated by evidence. The appellate court correctly ruled that the alleged loss of articles, machinery, and equipment totaling P9,960,000.00 was not proven by clear and convincing evidence. The Court emphasized that other than the bare testimony of Mr. Wilson Kho and his witnesses, there was no proof as to the existence of these items prior to Florenda's takeover. The listing of lost items was deemed self-serving because no inventory was made prior to delivery, and no receipts or proof of acquisition were presented during the trial. Actual damages require proof of the actual amount of loss with a reasonable degree of certainty, premised upon competent proof and the best evidence obtainable, which was not met by the petitioner. The Court reiterated that actual damages cannot be anchored on mere surmises, speculations, or conjectures. On the issue of whether the Court of Appeals seriously erred in not finding that respondent Angel Miranda should likewise be held liable for damages to the petitioner: The Supreme Court affirmed the ruling of the CA that respondent Angel Miranda is not liable for damages caused to the petitioner's property. The Court explained that Article 1654 of the Civil Code obliges the lessor to maintain the lessee in the peaceful and adequate enjoyment of the lease. However, the trespass referred to in Article 1654, paragraph 3, is legal trespass (perturbacion de mero derecho), not trespass in fact (perturbacion de mero hecho) made by a third person. In cases of trespass in fact, the lessee has a direct action against the trespasser and not against the lessor. The Court found that the trespass perpetrated by Florenda Miranda and her confederates was merely trespass in fact, as they forcibly entered the property and caused damage. Angel Miranda was not content with a passive stance; he and the petitioner filed a case for forcible entry against Florenda and succeeded in having the purported lease contract declared void.
Main Doctrine
A lessor is not liable for trespass in fact by a third person on the leased property; the lessee has a direct action against the trespasser. The lessor's warranty under Article 1654(3) of the Civil Code pertains to legal possession, not physical possession.