G.R. No. 155604 November 22, 2007
College Assurance Plan and Comprehensive Annuity Plan and Pension Corporation, petitioners, vs. Belfranlt Development Inc., respondent.

FACTS

Petitioners CAP and CAPP leased units from respondent Belfranlt Development Inc. in the Belfranlt Building. A fire on October 8, 1994, originating in a store room occupied by CAP on the third floor, caused significant damage. The Bureau of Fire Protection’s investigation report and certification stated the cause was accidental, specifically an overheated coffee percolator. Respondent demanded petitioners vacate for repairs and pay an estimated P1.5 million in reparations. Petitioners vacated all leased units, including unaffected second-floor spaces, and refused to pay, claiming the fire was a fortuitous event.
Respondent filed a complaint for damages. The Regional Trial Court ruled for respondent, awarding actual damages for repair costs and unpaid rents, plus moral and exemplary damages. The Court of Appeals modified the decision, deleting the awards for repair costs, moral and exemplary damages, and attorney’s fees. However, it upheld petitioners’ liability for unpaid rents on both the fire-damaged and undamaged units they vacated and awarded P500,000 in temperate damages for the building’s impairment. Petitioners sought review, arguing the fire was a fortuitous event absolving them of liability.

ISSUE

Whether petitioners are liable for damages arising from the fire that damaged the leased premises.

RULING

Yes, petitioners are liable. The Supreme Court denied the petition, affirming the CA’s modified decision. Under Article 1667 of the Civil Code, a lessee is presumed responsible for the loss or deterioration of the leased property. To be absolved by a fortuitous event under Article 1174, the lessee must prove the event was unforeseeable or inevitable and occurred without their fault or negligence. The cause—an overheated coffee percolator left operating in a store room—was not an independent act of nature but involved human agency within petitioners’ control.
The legal presumption of the lessee’s liability was not overcome. Petitioners failed to prove they observed the diligence of a good father of a family in preventing the fire. The negligence of their employee in leaving the appliance unattended coincided with the event, preventing its classification as a true fortuitous event that would exempt them from liability. Consequently, petitioners were correctly held liable for unpaid rentals, as their unilateral vacation of the undamaged second-floor units did not validly terminate that lease. Furthermore, the award of temperate damages was proper. While respondent failed to conclusively prove the exact cost of structural repairs, it undoubtedly suffered pecuniary loss, justifying temperate damages as a reasonable assessment under the circumstances.