G.R. No. 107737 . October 1, 1999.
JUAN L. PEREZ, LUIS KEH, CHARLIE LEE and ROSENDO G. TANSINSIN, JR., petitioners, vs. COURT OF APPEALS, LUIS CRISOSTOMO and VICENTE ASUNCION, respondents.

FACTS

Petitioner Juan L. Perez is one of the usufructuaries of the “Papaya Fishpond” in Hagonoy, Bulacan. On June 5, 1975, the usufructuaries leased the fishpond to petitioner Luis Keh for five years, renewable for another five years, with an express stipulation that the lessee “cannot sublease” nor assign his rights. Private respondent Luis Crisostomo, a fishpond operator, was persuaded by petitioners Charlie Lee and Luis Keh in September 1977 to take over the fishpond’s operation. In December 1977, Crisostomo entered into a “pakiao buwis” agreement with Keh and Lee, taking possession from January to June 1978 for P128,000. Crisostomo made payments after receiving a document dated January 9, 1978, wherein Keh ceded his rights and interests to Lee until June 1985. For the period June 1978 to May 1979, Crisostomo paid P150,000 to Keh, evidenced by a receipt signed by petitioner Rosendo G. Tansinsin, Jr., as attorney-in-fact for the usufructuaries, and conformed to by Keh, with a handwritten acknowledgment by Lee. Crisostomo incurred substantial expenses for repairs and improvements. In June 1979, petitioners Tansinsin and Juan Perez, accompanied by armed men, sought to take possession of the fishpond, presenting a letter showing Keh had surrendered possession to the usufructuaries. Crisostomo filed an action for injunction and damages. The trial court initially issued a restraining order, later lifted. The parties entered a partial compromise agreement for the deposit of rental proceeds. The usufructuaries subsequently leased the property to third parties at much higher rentals. The trial court ruled in favor of Crisostomo, a decision affirmed by the Court of Appeals.

ISSUE

Whether the Court of Appeals erred in affirming the trial court’s decision which: (1) upheld the sublease agreement between Luis Keh/Charlie Lee and Luis Crisostomo despite a contractual prohibition against sublease/assignment; (2) awarded damages and attorney’s fees to Crisostomo; and (3) dismissed the intervention of Vicente Asuncion.

RULING

The Supreme Court DENIED the petition and AFFIRMED the decision of the Court of Appeals.
1. On the Validity of the Sublease/Assignment: The Court upheld the agreement between Keh/Lee and Crisostomo. The usufructuaries, through their attorney-in-fact Tansinsin, executed a receipt for the annual rental paid by Crisostomo, which contained an explicit declaration that “Mr. Luis Keh has not transferred his rights over the fishpond to any person.” By issuing this receipt and accepting rental payments from Crisostomo with full knowledge of his possession and operation of the fishpond, the usufructuaries, led by Perez and through Tansinsin, are estopped from denying the authority of Keh to transfer his possessory rights. Their acts constituted a tacit ratification of the sublease/assignment, curing any defect arising from the original contractual prohibition.
2. On the Award of Damages and Attorney’s Fees: The award of damages was sustained. Petitioners Perez and Tansinsin, by forcibly attempting to eject Crisostomo with the aid of armed men, acted in a wanton, oppressive, and malevolent manner. This justified the award of moral and exemplary damages. Actual damages (P150,000) represented the expected harvest lost due to the unlawful deprivation. Attorney’s fees were properly awarded as Crisostomo was compelled to litigate to protect his interests.
3. On the Dismissal of Vicente Asuncion’s Intervention: The dismissal was correct. Asuncion, a co-usufructuary, filed a separate action for partition and accounting (Civil Case No. 5518-M) involving the same fishpond. Allowing his intervention in Crisostomo’s case (for injunction and damages based on a sublease) would violate the rule against forum-shopping and the principle of lis pendens, as it would involve the same parties and the same property, potentially leading to conflicting rulings.
The Court found no reversible error in the appellate court’s findings of fact and application of law, particularly the doctrines of estoppel and ratification.