CASTILLO VS PRUDENTIAL LIFE PLANS
ISSUE: THE COURT OF APPEALS SERIOUSLY ERRED AND COMMITTED GRAVE
FACTS: Respondent Prudentialife is an insurance company, while
respondents Jose Alberto T. Alba (Alba), Atty. Ceferino A. Patiño, Jr. (Patiño)
and Rosemarie de Lemos (de Lemos) are its President, First Vice-President
for Corporate Services Group,and Assistant Vice-President for Human
Resources, espectively.
Under Section 4, Article X of the parties’ Collective Bargaining Agreement
(CBA), Prudentialife employees were granted an optical benefit allowance
of P2,500.00 to subsidize prescription eyeglasses for those who have
developed vision problems in the course of employment. The pertinent CBA
provision states:
Section 4. Optical benefit. – The Company shall provide an amount not to
exceed P2,500.00 inclusive of VAT to any covered employee to defray the
cost of eyeglasses that may be prescribed by the accredited HMO physician
or employee’s personal optometrist. The benefit can be availed of only once
every two(2)years.4
Many Prudential life employees – petitioners included – availed thereof and
Prudential life was flooded with requests for reimbursement for eyeglasses
the employees supposedly purchased from a single outfit/supplier, Alavera
Optical. Suspecting fraud, Prudentialife began an investigation into the
matter, and on February 22, 2006, it sent individual written Notices to
Explain5 to petitioners and other employees who availed of the benefit. The
notices revealed its initial findings – that the given address and telephone
number of Alavera Optical were fictitious; that the official receipts and
prescriptions issued by Alavera Optical appear to have been forged; that the
eyeglasses were grossly overpriced; and that Prudentialife was being
required to pay for the eyeglasses even though they have not been released
as yet. The notices required the recipients thereof to submit their written
explanation relative to acts of dishonesty and fraud which they may have
committed in connivance with Alavera Optical.
ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF
JURISDICTION WHEN IT RENDERED ITS DECISION NOT IN ACCORD WITH
LAW AND JURISPRUDENCE
HELD: In a labor case, the written statements of co-employees admitting
their participation in a scheme to defraud the employer are admissible in
evidence. The argument by an employee that the said statements
constitute hearsay because the authors thereof were not presented for
their cross-examination does not persuade, because the rules of evidence
are not strictly observed in proceedings before the National Labor Relations
Commission (NLRC), which are summary in nature and decisions may be
made on the basis of\position papers.
MANALO VS TNS PHILS.
Facts:
Petitioners... were hired by TNS as field personnel on various dates starting
1996 for several projects. They were made to sign a project-to-project
employment contract.
Thereafter, TNS would file the corresponding termination report with the
Department of Labor and Employment Regional Office
Petitioners were likewise assigned office-based tasks for which they were
required to be in the office from 9:00 o'clock in the morning to 6:00 o'clock
in the evening, but most of the time, they worked beyond 6:00 o'clock
without receiving the corresponding overtime pay. These... office-based
tasks were not on a per project basis and petitioners did not sign any
contract for these jobs. These assignments were not reported to the DOLE
either.
Later in August 2008, a meeting among the Field Interviewers (FIs) was
called by TNS' field manager. They were told that all old FIs assigned in the
"tracking" projects would be pulled out eventually and replaced by new FIs
contracted from an agency. Old FIs would be... assigned only to "adhoc"
projects which were seasonal. This prompted petitioners to file a
consolidated complaint for regularization before the LA.
Issues:
TNS contended that the repeated and successive rehiring of project
employees does not qualify petitioners as regular employees, as length of
service is not the controlling determinant of the employment tenure of a
project employee, but whether the employment has been fixed for a...
specific project or undertaking and its completion has been determined at
the time of the engagement of the employee. The repeated rehiring was
only a natural consequence of the experience gained from past service
rendered in other projects.
Ruling:
Although it is true that the length of time of the employee's service is not a
controlling determinant of project employment, it is vital in determining
whether he was hired for a specific undertaking or in fact tasked to perform
functions vital, necessary and indispensable to... the usual business or trade
of the employer.[34] Petitioners' successive re-engagement in order to
perform the same kind of work firmly manifested the necessity and
desirability of their work in the usual business of TNS as a market research...
facility.[35] Undisputed also is the fact that the petitioners were assigned
office-based tasks from 9:00 o'clock in the morning up to 6:00 o'clock in the
evening, at the earliest, without any corresponding remuneration.
The
The project employment scheme used by TNS easily circumvented the law
and precluded its employees from attaining regular employment status in
the subtlest way possible.Petitioners were rehired not intermittently, but
continuously,contract after contract, month after month,... involving the
very same tasks. They practically performed exactly the same functions over
several years. Ultimately,without a doubt, the functions they performed
were indeed vital and necessary to the very business or trade of TNS.
SASAN VS NLRC
Facts:
Petitioners... were hired by TNS as field personnel on various dates starting
1996 for several projects. They were made to sign a project-to-project
employment contract.
Thereafter, TNS would file the corresponding termination report with the
Department of Labor and Employment Regional Office
Petitioners were likewise assigned office-based tasks for which they were
required to be in the office from 9:00 o'clock in the morning to 6:00 o'clock
in the evening, but most of the time, they worked beyond 6:00 o'clock
without receiving the corresponding overtime pay. These... office-based
tasks were not on a per project basis and petitioners did not sign any
contract for these jobs. These assignments were not reported to the DOLE
either.
Later in August 2008, a meeting among the Field Interviewers (FIs) was
called by TNS' field manager. They were told that all old FIs assigned in the
"tracking" projects would be pulled out eventually and replaced by new FIs
contracted from an agency. Old FIs would be... assigned only to "adhoc"
projects which were seasonal. This prompted petitioners to file a
consolidated complaint for regularization before the LA.
Issues:
TNS contended that the repeated and successive rehiring of project
employees does not qualify petitioners as regular employees, as length of
service is not the controlling determinant of the employment tenure of a
project employee, but whether the employment has been fixed for a...
specific project or undertaking and its completion has been determined at
the time of the engagement of the employee. The repeated rehiring was
only a natural consequence of the experience gained from past service
rendered in other projects.
Ruling:
Although it is true that the length of time of the employee's service is not a
controlling determinant of project employment, it is vital in determining
whether he was hired for a specific undertaking or in fact tasked to perform
functions vital, necessary and indispensable to... the usual business or trade
of the employer.[34] Petitioners' successive re-engagement in order to
perform the same kind of work firmly manifested the necessity and
desirability of their work in the usual business of TNS as a market research...
facility.[35] Undisputed also is the fact that the petitioners were assigned
office-based tasks from 9:00 o'clock in the morning up to 6:00 o'clock in the
evening, at the earliest, without any corresponding remuneration.
The
The project employment scheme used by TNS easily circumvented the law
and precluded its employees from attaining regular employment status in
the subtlest way possible.Petitioners were rehired not intermittently, but
continuously,contract after contract, month after month,... involving the
very same tasks. They practically performed exactly the same functions over
several years. Ultimately,without a doubt, the functions they performed
were indeed vital and necessary to the very business or trade of TNS.
PEOPLE VS MANIEGO
FACTS
Accused-appellant Maniego was an indorser of several checks drawn by her
sister, which were dishonored after they have been exchanged with cash
belonging to the Government.
ISSUE
Whether or not Maniego may not be made liable on account of dishonor of
checks indorsed by her.
RULING
NO. Appellant’s contention that as mere indorser, she may not be made
liable on account of the dishonor of the checks indorsed by her is
untenable. Under the law, the holder or last indorsee of a negotiable
instrument has the right to “enforce payment of the instrument for the full
amount thereof against all parties liable thereon.”
LORENZO SHIPPING VS NPC
Facts:
Lorenzo Shipping is the owner and operator of the commercial vessel MV
Lorcon Luzon.[8] National Power Corporation is the owner of Power Barge
104, "a non-propelled power plant barge."[9]
On March 20, 1993, Power Barge 104 was berthed and stationed at the
Makar Wharf in General Santos City when the MV Lorcon Luzon "hit and
rammed Power Barge 104."
Following this incident, Nelson Homena, Plant Manager of Power Barge 104,
filed a Marine Protest before the Board of Marine Inquiry. Captain Villarias
also filed his own Marine Protest. For his part, Captain Yape filed a Marine
Accident Report. The Board of Marine Inquiry... conducted joint hearings on
the Marine Protests and Captain Yape's report.
To forestall the prescription of its cause of action for damages, National
Power Corporation filed before the Quezon City Regional Trial Court a
Complaint for Damages against Lorenzo Shipping.[19] In this Complaint,
National Power Corporation recalled the... damage resulting from the
ramming
The Regional Trial Court issued the Decision[27] dated February 18, 2002
absolving Lorenzo Shipping of liability.
Nevertheless, as Lorenzo Shipping supposedly exercised due diligence in its
selection and supervision of Captain Villarias, no liability could be attributed
to it.
The Court of Appeals rendered the Decision[29] dated September 14, 2007
reversing and setting aside the February 18, 2002 Decision of the Regional
Trial Court and entering another judgment ordering Lorenzo Shipping to pay
National Power Corporatio
Issues:
Regarding the "Total Incidental Cost for Drydock and Repair," which was
National Power Corporation's Exhibit "F" before the Regional Trial Court,
Lorenzo Shipping underscored that when the Regional Trial Court ruled on
National Power Corporation's Formal Offer of Evidence, it... denied the
admission of Exhibit "F" for not having been identified nor authenticated.
It emphasized that no witness came forward to attest to its authenticity and
due execution, let alone allowed himself or herself to be cross-examined on
these points.
Ruling:
It is basic that any material presented as evidence will not be considered
unless duly admitted by the court before which it is presented. Just as basic
is that a private document offered as authentic evidence shall not be
admitted unless its due execution and authenticity are... established in the
manner specified by Rule 132, Section 30 of the Revised Rules on Evidence
Exhibit "F" was ruled to have been inadmissible for failing to comply with
Rule 132, Section 20 thus, it failed the standard of competency. Consistent
with this, reliance on National Power Corporation's Exhibit "F" and its
contents, so as to establish the extent of National
Power Corporation's pecuniary loss, is misplaced. Not having been
admitted, Exhibit "F" does not form part of the body of evidence worthy of
judicial consideration.
SABELLINA VS BURAY
FACTS: On 8 November 2004, petitioner Tomasa J. Sabellina filed a
complaint for unlawful detainer against the respondents Dolores Buray,
Ledenia Villamor, Arlene Magsayo, Ludima Romulo, Ramon Canadella,
Roberto Acido, Mario Esparguera, Rodrigo Acido, Ronnie Ubangan, and
Concepcion Rebusto before the Municipal Circuit Trial Court (MCTC) of the
Municipalities of Laguindingan-Gitagum, Misamis Oriental. The case was
docketed as Civil Case No. 469.
ISSUE: whether or not the petitioner established her cause of action by a
preponderance of evidence.
HELD: Preponderance of evidence simply means evidence that is of greater
weight or more convincing than what is offered against it.10 In determining
where the preponderance of evidence lies, the court may consider all the
facts and circumstances of the case, such as: the witnesses’ demeanor, their
intelligence, their means and opportunity of knowing the facts to which
they are testifying, the nature of the facts to which they testify, the
probability or improbability of their testimony, their interest or want of
interest, and their personal credibility so far as it may legitimately appear to
the court.
PNB VS PASIMIO
FACTS:
Pasimio filed a case for collection of a sum of money pursuant to the
bank deposits she had with PNB. PNB however, after presenting several
notarized documents and promissory notes presenting the loans secured by
the deposited amount refused to deliver back the deposited amount in light
of the compensation when Pasimio failed to pay those loans.
The RTC rendered a decision by relying on the statements of Pasimio
that she was defrauded in signing pro forma forms and promissory notes
which serves as evidence of her loans to the bank which consequently negate
compensation. The CA affirmed the decision of the RTC by relying on the
mere allegations of fraud and by completely discrediting the value of those
notarized documents and the value of the promissory notes.
ISSUE:

Whether or not the CA erred in giving more credence to bare allegations of
fraud over a notarized documents and promissory notes?
RULING:
Yes. There is no allegation or evidence that Gregorio and Miranda
influenced Pasimio by employing means she could not well resist, and which
controlled her volition and induced her to sign the loan documents and
Affidavit, which otherwise she would not have executed. Also, there was no
evidence showing that Gregorio and Miranda's influence interfered with
Pasimio's exercise of independent discretion necessary to determine the
advantage or disadvantage of signing these documents.
Then, too, Pasimio failed to prove that Gregorio and Miranda
defrauded her. Taking into consideration the personal conditions of Pasimio,
there is no clear and convincing evidence establishing serious fraud or deceit,
insidious words or machinations on the part of PNB or its officers, sufficient
to impress or lead her into error.
Further the law provides for the presumption that: a) that there was
sufficient consideration for a contract; (b that a negotiable instrument was
given or indorsed for a sufficient consideration. Hence, with Pasimio’s failure
to substantiate her allegations of fraud and with the corresponding
presumption of considerations when the promissory note and documents
were made, her claim must fall.
PEOPLE VS DE GUZMAN
FACTS: De Guzman was charged with the crime of murder. A nexus of logically related
circumstances rendered the testimony of Flores, the supposed witness, highly suspect. His
testimony is laden with improbabilities, and these lead to serious doubts on the
veracity of the malefactor’s identity. The incident took place at 11 PM in
a remote barangay with no electric lighting in the surroundings and the only
source of light then was the illumination of a “moron” coming from a
“peryahan.”
Apart from the testimony of Flores, no other competent and corroborative
evidence was adduced to settle this question of visibility and lighting
condition. In his Sinumpaang Salaysay, Flores stated that the “moron (de
gas)” was just on the table where they were drinking which was contrary to
what he had testified in court. The distance of the “moron” in
the“peryahan” from the site of the stabbing incident was not disclosed
either. It could have helped determine if the place was well illuminated. In
People v. Faustino, it was ruled that the identification of an accused by an eyewitness is a vital
piece of evidence and most decisive of the success or failure of the case for the prosecution.
Here, the inconclusive and unreliable identification by Flores of De Guzman as the culprit
failed to break the barrier of proof beyond reasonable doubt.
ISSUE: If the evidence is sufficient to convict De Guzman
HELD: Evidence; motive. It has not been shown that De Guzman had any
motive for killing Urieta. The brutal and gruesome attack on Urieta, who sustained
two stab wounds on the chest, a stab wound along the waist area which hit the liver,
and a stab wound on the elbow, clearly manifested the intention of the
perpetrator to purposely bring death upon the victim. There was no
evidence, however, that De Guzman carried a grudge or had an axe to grind
against the victim or his family, or even knew the victim at all. Prosecution witnesses Flores
and Gina even attested that they did not know of any reason why De Guzman killed Urieta.
Generally, the motive of the accused in a criminal case is immaterial and does not have to be
proven. Proof of the same becomes relevant and essential when, as in this case, the identity
of the assailant is in question. In
People v.Vidad, the Supreme Court ruled that it is true that it is not indispensable to
conviction for murder that the particular motive for taking the life of a human
being shall be established at the trial, and that in general when the
commission of a crime is clearly proven, conviction may and should follow
even where the reason for its commission is unknown; but in many criminal cases,
one of the most important aids in completing the proof of the commission of the crime
by the accused is the introduction of evidence disclosing the motive which
tempted the mind to indulge in the criminal act.
PEOPLE VS BABOR
FACTS: A man's anguished cries for help at around 3:00 o'clock in the
afternoon of October 22, 1989 awakened prosecution witness Felicidad
Duhaylungsod who was asleep at her home. She instinctively peered out of
the window and from there, at an approximate distance of twenty meters,
she vividly witnessed a ghastly incident. Accused-appellants Nestor Babor
and his wife, Sony Babor, both armed with bolos, were chasing a fleeing and
bloodied Evangelino Camias. Then, to Duhaylungsod's horror, Sony Babor
lunged with her weapon at the hapless Camias and hacked him three times
on different parts of the body. Nestor Babor then delivered the fatal blow by
stabbing Camias on the chest with his weapon. The three were all neighbors
of Felicidad Duhaylungsod in Rizal, Palawan and were known to her.
ISSUE: Whether the respondents acted in self-defense
HELD: An accused relying on said justifying circumstances must prove the
same by means of sufficient, satisfactory, and convincing evidence.[9] As the
burden of proof rests upon him to establish the same, he must necessarily
rely on the strength of his own evidence and not upon the weakness of that
of the prosecution.[10] And, where the prosecution evidence, as in the present
appeal, renders extremely doubtful the veracity of the defense version, said
defenses cannot be granted any evidentiary weight.
In the case at bar, the forthright declarations of prosecution witness
Felicidad Duhaylungsod before the trial court coupled with proof of the
number of wounds that the victim sustained, sets at naught the feeble
reliance of appellants on the justifying circumstances of self-defense and
defense of relative. True, there may initially have been unlawful aggression
by the victim when he attempted to rape Sony Babor and, failing therein, he
vented his ire on a surprised Nestor Babor by attacking the latter. However,
the sequence of proven events which transpired thereafter effectively
negates the presence or applicability of this fundamental element and of the
other element of reasonable means to prevent or repel that aggression at
the second stage of the fray.
BIR VS MERALCO
Manila Electric Company (Meralco) filed its tentative income tax reflecting a
refundable amount of P101,897,741. Only P77,931,812 was applied as tax
credit. An investigation was conducted showing that Meralco was liable for
(1) deficiency income tax in the amount of P2,340,902.52; and (2) deficiency
franchise tax in the amount of P2,838,335.84.” Later, Meralco filed an
amended final corporate Income Tax Return reflecting a refundable amount
of P107,649,729 and thus filed a letter-claim for refund or credit representing
overpaid income taxes for the years 1987 and 1988. The Commission of
Internal Revenue not having acted on its request, Meralco filed a judicial
claim for refund or credit with the Court of Tax Appeals. It is gathered that
Meralco paid the deficiency franchise tax in the amount of P2,838,335.84. It
protested the payment of the alleged deficiency income tax and claimed as
an alternative remedy the deduction thereof from its claim for refund or
credit. After trial, the Court of Tax Appeals found in favor of Meralco being
convinced that they proved its entitlement for the refund. The Court of
Appeals affirmed the decision.
ISSUE:
Whether or not the appellate court failed to consider Meralco’s failure to
substantiate by positive evidence its entitlement to a tax refund or credit.
HELD:
In case the corporation is entitled to a refund of the excess estimated
quarterly income taxes paid, the refundable amount shown on its final
adjustment return may be credited against the estimated quarterly income
tax liabilities for the taxable quarters of the succeeding taxable year. The
issue of whether MERALCO adduced sufficient evidence to prove its
entitlement to a refund is a question of fact. It bears noting that the tax court
and the appellate court found MERALCO’s claim for tax refund or credit
meritorious on the basis of the testimonial and documentary evidence
adduced by the parties. It bears noting too that the Commissioner did not
dispute the validity and authenticity of MERALCO’s quarterly income tax
returns as well as the final adjustment returns for the years 1987 and 1988
and proofs of payment of its tax liabilities. Neither did the Commissioner
refute MERALCO’s assertion that Commissioner failed to cross-examine its
accountant who testified on the returns, and to object to its offer of evidence
which included its quarterly and final adjustment returns and proofs of
payment of its tax liabilities. It is doctrinal that the factual findings of the
Court of Tax Appeals, when supported by substantial evidence, will not be
disturbed on appeal, unless it is shown that it committed gross error in the
appreciation of facts. Hence, as a matter of practice and principle, this Court
will not set aside the conclusion reached by the said court, especially if
affirmed by the Court of Appeals as in the present case. For by the nature of
its functions, the tax court dedicates itself to the study and consideration of
tax problems and necessarily develops expertise thereon, unless there has
been an abuse or improvident exercise of authority on its part. None such is
appreciated by this Court, however.
MANZANILLA VS WATERFIELDS INDUSTRIES CORP.
FACTS: The SPOUSES MANZANILLA are the owners of a 25,000-square meter
parcel of land in BarangaySan Miguel, Sto. Tomas, Batangas. On May 24,
1994, they leased a 6,000-square meter portion of the abovementioned
property to Waterfields, as represented by its President Aliza R. Ma (Ma). The
PARTIES executed on June 6, 1994 an Amendment to the Contract of Lease.
Save for the COMMENCEMENT OF THE LEASE WHICH THEY RECKONED on
the date of the execution of the amendment and the undertaking of the
spouses Manzanilla to register the agreements, the PARTIES agreed therein
that all other terms and conditions in the original Contract of Lease shall
remain in full force and effect. Beginning April 1997, however, WATERFIELDS
failed to pay the monthly rental. On July 30, 1998, the SPOUSES MANZANILLA
filed before the MTC a COMPLAINT FOR EJECTMENT AGAINST WATERFIELDS.
They alleged in PARAGRAPH 4 thereof that they entered into a Contract of
Lease with Waterfields on May 24, 1994, and in PARAGRAPH 5, that the same
was amended on June 6, 1994 and July 9, 1997. However, WATERFIELDS had
committed violations of the lease agreement by not paying the rentals on
time. And in y et another violation, it failed to pay the ₱18,000.00 monthly
rental for the past six mo nths prior to the filing of the Complaint, that is, from
December 1997 to May 1998 or in the total amount of ₱108,000.00.
Demands upon Waterfields to pay the accrued rentals and vacate the
property were unheeded so the SPOUSES MANZANILLA considered the
contract terminated and/or rescinded. Hence, SPOUSES filed the Complaint
and prayed therein that the former be ordered to (1) vacate the subject
property and, (2) pay the accrued rentals of ₱108,000.00 as of May 1998, the
succeeding rentals of ₱18,000.00 a month until t he property is vacated, the
interest due thereon, attorney’s fees, and cost of suit. WATERFIELDS
admitted paragraphs 4 and 5 of the Complaint and alleged that: (1) when the
lease agreement was executed, the property subject thereof was just bare
land; (2) it spent substantial amounts of money in developing the land, i.e.,
building of water dikes, putting up of a drainage system, land filling and
levelling; (3) it built thereon a processing plant for fruit juices, preserved
vegetables and other frozen goods for which it spent around ₱7,000,000.00;
and (4) it caused the installation in t he said premises of an electrical system
for ₱80,000.00 and water system for ₱150,000.00. WATERFIELDS further
alleged that although the first two years of its operation were fruitful, it later
suffered from business reverses due to the economic crisis that hit Asia. Be
that as it may, WATERFIELDS claimed that it did not fail or refuse to pay the
monthly rentals but was just utilizing the rental deposit in the amount of
₱216,000.00 (equivalent to one year rentals) as rental payment in
accordance with Section 4 of the original Contract of Lease. Hence, it argued
that the SPOUSES MANZANILLA have no cause of action against it.
WATERFIELDS also asserted that the precipitate filing of the Complaint
against it is tainted with bad faith and intended to cause it grave injustice
considering that it already spent an enormous amount of almost
₱10,000,000.00 in developing the property.
MTC found no merit in Waterfield’s claim that it did not fail or refuse to pay
the monthly rentals as it was applying the rental deposit to its payment of
the same. Consequently, the MTC declared that Waterfields violated the
lease agreement due to non-payment of rental. RTC affirmed in toto the
decision of the MTC. The CA concluded that the spouses Manzanilla have no
cause of action against Waterfields.
ISSUE: Whether or not petitioner’s action for Unlawful Detainer against
Waterfields is proper.
HELD: For the purpose of bringing an unlawful detainer suit, TWO
REQUISITES MUST CONCUR: (1) there must be failure to pay rent or comply
with the conditions of the lease, and (2) there must be demand both to pay
or to comply and vacate. The FIRST REQUISITE refers to the existence of the case.
cause of action for unlawful detainer, while the SECOND refers to the
jurisdictional requirement of demand in order that said cause of action may All told, the COURT sustains the RTC in affirming the MTC's grant of the
be pursued. IMPLIED IN THE FIRST REQUISITE, which is needed to establish spouses Manzanilla's Complaint for ejectment against Waterfields.
the cause of action of the plaintiff in an unlawful detainer suit, is the
presentation of the contract of lease entered into by the plaintiff and the
defendant, the same being needed to establish the lease conditions alleged
to have been violated. Thus, in Bachrach Corporation v. Court of Appeals,
the Court held that the EVIDENCE NEEDED TO ESTABLISH THE CAUSE OF
ACTION IN AN UNLAWFUL DETAINER CASE is (1) a lease contract and (2) the
violation of that lease by the defendant. It must be stressed that in t his
case, the VIOLATION OF THE LEASE THROUGH NON-PAYMENT OF RENT is
what constitutes the cause of action. Hence, ONCE THE FAILURE TO PAY
RENT IS ESTABLISHED, a cause of action for unlawful detainer aris es. The
problem, however, is that the CA acted on its mistaken notion as to when a
cause of action arises. It did not base its determination of the existence of
the cause of action from the fact that Waterfields failed to pay rents from
December 1997 to May 1998. To it, the CAUSE OF ACTION in this case only
arose after the contract was terminated and the rental deposit was found
sufficient to co ver the unpaid rentals. This is erroneous since as already
discussed, it is the FAILURE TO PAY RENT which gives rise to the cause of
action. Prescinding from this, the CA’s acknowledgement that Waterfields
failed to pay rent, as shown by its declaration that the latter is the debtor of
the spouses Manzanilla with respect to the unpaid rentals, is clearly
inconsistent with the conclusion that no cause of action for ejectment exists
against Waterfields. FAILURE TO PAY THE RENT must precede termination
of the contract due to nonpayment of rent. It therefore follows that the
CAUSE OF ACTION FOR UNLAWFUL DETAINER IN THIS CASE must
necessarily arise before the termination of the contract and not the other
way around as what the CA supposed. Indeed, in going beyond the
termination of the contract, the CA went a bit too far in its resolution of this