7/11/2015

G.R.No.85161

TodayisSaturday,July11,2015

RepublicofthePhilippines
SUPREMECOURT
Manila
FIRSTDIVISION
G.R.No.85161September9,1991
COUNTRYBANKERSINSURANCECORPORATIONandENRIQUESY,petitioners,
vs.
COURTOFAPPEALSandOSCARVENTANILLAENTERPRISESCORPORATION,respondents.
EstebanC.Manuelforpetitioners.
AugustaGatmaytanforOVEC.

MEDIALDEA,J.:p
PetitionersseekareviewoncertiorariofthedecisionoftheCourtofAppealsinCAG.R.CVNo.09504"Enrique
SyandCountryBankersInsuranceCorporationv.OscarVentanillaEnterprisesCorporation"affirmingintotothe
decisionoftheRegionalTrialCourt,CabanatuanCity,BranchXXV,towit:
WHEREFORE, the complaint of the plaintiff Enrique F. Sy is dismissed, and on the counterclaim of
thedefendantO.VentanillaEnterprisesCorporation,judgmentisherebyrendered:
1. Declaring as lawful, the cancellation and termination of the Lease Agreement (Exh. A) and the
defendant'sreentryandrepossessionoftheAvenue,BroadwayandCapitoltheatersunderleaseon
February11,1980
2. Declaring as lawful, the forfeiture clause under paragraph 12 of the Id Lease Agreement, and
confirming the forfeiture of the plaintiffs remaining cash deposit of P290,000.00 in favor of the
defendantthereunder,asofFebruary11,1980
3.OrderingtheplaintifftopaythedefendantthesumofP289,534.78,representingarrearsinrentals,
unremitted amounts for amusement tax delinquency and accrued interest thereon, with further
interest on said amounts at the rate of 12% per annum (per lease agreement) from December 1,
1980untilthesameisfullypaid
4. Ordering the plaintiff to pay the defendant the amount of P100,000.00, representing the
P10,000.00portionofthemonthlyleaserentalwhichwerenotdeductedfromthecashdepositofthe
plaintifffromFebruarytoNovember,1980,aftertheforfeitureofthesaidcashdepositonFebruary
11,1980,withinterestthereonattherateof12%perannumoneachofthesaidmonthlyamountsof
P10,000.00fromthetimethesamebecamedueuntilitispaid
5.Orderingtheplaintifftopaythedefendantthroughtheinjunctionbond,thesumofP100,000.00,
representing the P10,000.00 monthly increase in rentals which the defendant failed to realize from
FebruarytoNovember1980resultfromtheinjunction,withlegalinterestthereonfromthefinalityof
thisdecisionuntilfullypaid
6.Orderingtheplaintifftopaytothedefendantthesumequivalenttotenpercentum(10%)ofthe
abovementioned amounts of P289,534.78, P100,000.00 and P100,000.00, as and for attorney's
feesand
7.Orderingtheplaintifftopaythecosts.(pp.9495,Rollo)
Theantecedentfactsofthecaseareasfollows:
Respondent Oscar Ventanilla Enterprises Corporation (OVEC), as lessor, and the petitioner Enrique F. Sy, as
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lessee,enteredintoaleaseagreementovertheAvenue,BroadwayandCapitolTheatersandthelandonwhich
theyaresituatedinCabanatuanCity,includingtheirairconditioningsystems,projectorsandaccessoriesneeded
forshowingthefilmsormotionpictures.Thetermoftheleasewasforsix(6)yearscommencingfromJune13,
1977andendingJune12,1983.Aftermorethantwo(2)yearsofoperationoftheAvenue,BroadwayandCapitol
Theaters,thelessorOVECmadedemandsfortherepossessionofthesaidleasedpropertiesinviewoftheSy's
arrears in monthly rentals and nonpayment of amusement taxes. On August 8,1979, OVEC and Sy had a
conferenceandbyreasonofSy'srequestforreconsiderationofOVECsdemandforrepossessionofthethree(3)
theaters, the former was allowed to continue operating the leased premises upon his conformity to certain
conditionsimposedbythelatterinasupplementalagreementdatedAugust13,1979.
Inpursuanceoftheirlatteragreement,Sy'sarrearsinrentalintheamountofP125,455.76(asofJuly31,1979)
wasreducedtoP71,028.91asofDecember31,1979.However,theaccruedamusementtaxliabilityofthethree
(3)theaterstotheCityGovernmentofCabanatuanCityhadaccumulatedtoP84,000.00despitethefactthatSy
had been deducting the amount of P4,000.00 from his monthly rental with the obligation to remit the said
deductionstothecitygovernment.Hence,lettersofdemanddatedJanuary7,1980andFebruary3,1980were
senttoSydemandingpaymentofthearrearsinrentalsandamusementtaxdelinquency.Thelatterdemandwas
withwarningthatOVECwillreenterandrepossesstheAvenue,BroadwayandCapitalTheatersonFebruary11,
1980 in pursuance of the pertinent provisions of their lease contract of June 11, 1977 and their supplemental
letteragreement of August 13, 1979. But notwithstanding the said demands and warnings SY failed to pay the
abovementionedamountsinfullConsequently,OVECpadlockedthegatesofthethreetheatersunderleaseand
took possession thereof in the morning of February 11, 1980 by posting its men around the premises of the Id
moviehousesandpreventingthelessee'semployeesfromenteringthesame.
Sy,throughhiscounsel,filedthepresentactionforreformationoftheleaseagreement,damagesandinjunction
lateintheafternoonofthesameday.AndbyvirtueofarestrainingorderdatedFebruary12,1980followedbyan
order directing the issuance of a writ of preliminary injunction issued in said case, Sy regained possession and
operationoftheAvenue,BroadwayandCapitaltheaters.
Asfirstcauseofaction,SyallegedthattheamountofdepositP600,000.00asagreedupon,P300,000.00of
whichwastobepaidonJune13,1977andthebalanceonDecember13,1977wastoobigandthatOVEC
hadassuredhimthatsaidforfeiturewillnotcometopass.Bywayofsecondcauseofaction,Sysoughttorecover
from OVEC the sums of P100,000.00 which Sy allegedly spent in making "major repairs" on Broadway Theater
and the application of which to Sy's due rentals (2) P48,000.00 covering the cost of electrical current allegedly
used by OVEC in its alleged "illegal connection" to Capitol Theater and (3) P31,000.00 also for the cost of
electrical current allegedly used by OVEC for its alleged "illegal connection" to Broadway Theater and for
damages suffered by Sy as a result of such connection. Under the third cause of action, it is alleged in the
complaintthatonFebruary11,1980,OVEChadthethreetheaterspadlockedwiththeuseofforce,andthatasa
result,SysuffereddamagesattherateofP5,000.00aday,inviewofhisfailuretogothruthecontractshehad
enteredintowithmovieandbookingcompaniesfortheshowingofmoviesatABC.Asfourthcauseofaction,Sy
prayedfortheissuanceofarestrainingorder/preliminaryinjunctiontoenjoinOVECandallpersonsemployedby
itfromenteringandtakingpossessionofthethreetheaters,conditioneduponSy'sfilingofaP500,000.00bond
suppliedbyCountryBankersInsuranceCorporation(CBISCO).
OVEC on the other hand, alleged in its answer by way of counterclaims, that by reason of Sy's violation of the
terms of the subject lease agreement, OVEC became authorized to enter and possess the three theaters in
questionandtoterminatesaidagreementandthebalanceofthedepositsgivenbySytoOVEChadthusbecome
forfeitedthatOVECwouldbelosingP50,000.00foreverymonththatthepossessionandoperationofsaidthree
theatersremainwithSyandthatOVECincurredP500,000.00forattorney'sservice.
ThetrialcourtarrivedattheconclusionsthatSyisnotentitledtothereformationoftheleaseagreementthatthe
repossession of the leased premises by OVEC after the cancellation and termination of the lease was in
accordancewiththestipulationofthepartiesinthesaidagreementandthelawapplicabletheretoandthatthe
consequent forfeiture of Sy's cash deposit in favor of OVEC was clearly agreed upon by them in the lease
agreement.ThetrialcourtfurtherconcludedthatSywasnotentitledtothewritofpreliminaryinjunctionissuedin
his favor after the commencement of the action and that the injunction bond filed by Sy is liable for whatever
damagesOVECmayhavesufferedbyreasonoftheinjunction.
On the counterclaim of OVEC the trial court found that the said lessor was deprived of the possession and
enjoymentoftheleasedpremisesandalsosuffereddamagesasaresultofthefilingofthecasebySyandhis
violationofthetermsandconditionsoftheleaseagreement.Hence,itheldthatOVECisentitledtorecoverthe
saiddamagesinadditiontothearrearsinrentalsandamusementtaxdelinquencyofSyandtheaccruedinterest
thereon. From the evidence presented, it found that as of the end of November, 1980, when OVEC finally
regained the possession of the three (3) theaters under lease, Sy's unpaid rentals and amusement tax liability
amountedtoP289,534.78.Inaddition,itheldthatSywasunderobligationtopayP10,000.00everymonthfrom
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