Professional Documents
Culture Documents
v PAGCOR
G.R. No. 157480, 06 May 2005
FACTS:
PAGCOR leased some hotel space from Pryce
Corp. (Pryce) in Cagayan de Oro City to put up
a casino. It is fraught with problems from the
start as frequent protests by locals and civic
leaders plagued the casino.
PAGCOR is
subsequently advised to stop operations by no
less than the President of the Philippines.
PAGCOR stopped paying the rent after ceasing
operations despite the fact that the lease
contract had not yet expired. Pryce sent
several letters demanding the unpaid balance
to no avail. After exhausting all possible
options, Pryce decided to exercise its
contractual right to terminate the lease contract
and to claim the supposedly forfeited deposits
of PAGCOR. This right to forfeiture was
stipulated in the contract as a penalty.
ISSUE:
Is Pryce entitled to the unpaid rentals by
PAGCOR?
HELD:
Although the contract falls under one of those
exceptions where both the actual damages and
the penalty may be claimed by virtue of the
provision which states that aside from the
payment of the rentals corresponding to the
remaining term of the lease, the lessee shall
also be liable 'for any and all damages, actual
or consequential, resulting from such default
and termination of this contract. The right to
claim the forfeiture of the future rentals may not
be exercised by Pryce, as such penalty would
be unconscionable and iniquitous.
The
question of whether a penalty is reasonable or
iniquitous is addressed to the sound discretion
of the courts. To be considered in fixing the
amount of penalty are factors such as, but not
limited to, the type, extent and purpose of the
penalty; the nature of the obligation; the mode
of the breach and its consequences; the
supervening realities; the standing and
relationship of the parties; and the like. In this
case, PAGCOR's breach was occasioned by
events that, although not fortuitous in law, were
in fact real and pressing.
From the CA's factual findings, which are not
FLORENTINO v SUPERVALUE
G.R. No. 172384, 12 September 2007
FACTS:
Florentino is a lessee of Supervalue (SM).
Florentino is the owner of Empanada Royale, a
food cart business entered into a contract of
lease with SM. The contract was good for 4
months and after the end of the contract, both
parties had the option to either renew or
terminate the contract. Florentino and SM was
able to renew the contract several times that it
even lasted for a year. However, SM
terminated the contract with Florentino for the
following violations: failure to open on two
separate occasions; closing before mall closing
time ;introducing a new variety of empanada
without the approval of SM. The store
management then ordered the foreclosure of
the space and along with it were the personal
belongings of the petitioner. Florentino
demanded for the return of her personal
belongings and of the security deposit that she
has given SM.
ISSUE:
1. Whether or not Florentino can claim for
reimbursement on the improvements
that she has made?
2. Whether or not Florentino is entitled to
claim for the security bond that she has
posted?
HELD:
(1) Florentino is no longer entitled for
reimbursment on the improvements that she
has done on her stall.
Article 1678: If the lessee makes in good faith,
useful improvements which are suitable to the
use for which the lease is intended, without
altering the form or substance of the property
leased,the lessor upon the termination of the
lease shall pay the lessee one-half of the of
the improvements at that time. Should the
lessor refused to reimburse said amount the