EUFEMIA ALMEDA and
ROMEL ALMEDA v. BATHALA MARKETING INDUSTRIES, INC
G.R. No. 150806
January 28, 2008
FACTS:
Respondent entered into a Contract of Lease with Ponciano Alemda,
husband and father of the petitioners, respectively. In the Contract of Lease,
it was stipulated that then rental rate may be increased in case there is a new
tax, charge or burden imposed by authorities on the lot and building where the
leased premises are located. After Ponciano died, the petitioners advised
respondent that the former shall assess and collect VAT on its monthly rentals.
Respondent refused to pay the VAT and adjusted rentals as demanded by
petitioners but continued to pay the stipulated amount set forth in their
contract. Respondent instituted an action for declaratory relief for purposes of
determining the correct interpretation of the conditions in the Contract of Lease.
Petitioners moved for the dismissal of the declaratory relief case for being an
improper remedy considering that the respondent was already in breach of the
obligation and that the case would not end the litigation and settle the rights
of the parties. The RTC ruled in favor of the respondent, which the CA
affirmed.
ISSUE:
WON declaratory relief is proper.
RULING:
Declaratory relief is defined as an action by any person interested in a
deed, will, contract or other written instrument, executive order or
resolution, to determine any question of construction or validity arising from
the instrument, executive order or regulation, or statute, and for a
declaration of his rights and duties thereunder. The only issue that may be
raised in such a petition is the question of construction or validity of
provisions in an instrument or statute. Corollary is the general rule that such
an action must be justified, as no other adequate relief or remedy is available
under the circumstances.
Decisional law enumerates the requisites of an action for declaratory
relief, as follows: 1) the subject matter of the controversy must be a deed,
will, contract or other written instrument, statute, executive order or
regulation, or ordinance; 2) the terms of said documents and the validity thereof
are doubtful and require judicial construction; 3) there must have been no
breach of the documents in question; 4) there must be an actual justiciable
controversy or the "ripening seeds" of one between persons whose
interests are adverse; 5) the issue must be ripe for judicial determination;
and 6) adequate relief is not available through other means or other forms of
action or proceeding.
It is beyond cavil that the foregoing requisites are present in the
instant case, except that petitioners insist that respondent was already in
breach of the contract when the petition was filed.
We do not agree.
After petitioners demanded payment of adjusted rentals and in the months
that followed, respondent complied with the terms and conditions set forth in
their contract of lease by paying the rentals stipulated therein. Respondent
religiously fulfilled its obligations to petitioners even during the pendency
of the present suit. There is no showing that respondent committed an act
constituting a breach of the subject contract of lease. Thus, respondent is not
barred from instituting before the trial court the petition for declaratory
relief.
Petitioners claim that the instant petition is not proper because a
separate action for rescission, ejectment and damages had been commenced before
another court; thus, the construction of the subject contractual provisions
should be ventilated in the same forum.
We are not convinced.
It is true that in Panganiban v. Pilipinas Shell Petroleum Corporation
we held that the petition for declaratory relief should be dismissed in view of
the pendency of a separate action for unlawful detainer. However, we cannot
apply the same ruling to the instant case. In Panganiban, the unlawful detainer
case had already been resolved by the trial court before the dismissal of the
declaratory relief case; and it was petitioner in that case who insisted that
the action for declaratory relief be preferred over the action for unlawful
detainer. Conversely, in the case at bench, the trial court had not yet
resolved the rescission/ejectment case during the pendency of the declaratory
relief petition. In fact, the trial court, where the rescission case was on
appeal, itself initiated the suspension of the proceedings pending the
resolution of the action for declaratory relief.
We are not unmindful of the doctrine enunciated in Teodoro, Jr. v.
Mirasol where the declaratory relief action was dismissed because the issue
therein could be threshed out in the unlawful detainer suit. Yet, again, in
that case, there was already a breach of contract at the time of the filing of
the declaratory relief petition. This dissimilar factual milieu proscribes the
Court from applying Teodoro to the instant case.
Given all these attendant circumstances, the Court is disposed to
entertain the instant declaratory relief action instead of dismissing it,
notwithstanding the pendency of the ejectment/rescission case before the trial
court. The resolution of the present petition would write finis to the parties'
dispute, as it would settle once and for all the question of the proper
interpretation of the two contractual stipulations subject of this controversy.
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