GR 163280; (February, 2010) (Digest)
G.R. No. 163280 ; February 2, 2010
DORIS U. SUNBANUN, Petitioner, vs. AURORA B. GO, Respondent.
FACTS
Petitioner Doris U. Sunbanun owned a residential house in Cebu City. On July 7, 1995, respondent Aurora B. Go leased the entire ground floor for one year, expiring on July 7, 1996. Respondent paid a deposit and, to earn extra income, accepted lodgers (mostly relatives), from whom she received a monthly income of ₱15,000. Respondent paid rent until March 1996 when petitioner drove away the lodgers by telling them the lease was terminating on April 15, 1996. The lodgers left by April 15, 1996, and petitioner padlocked the vacated rooms. On May 10, 1996, respondent filed an action for damages, alleging lost income from lodgers for April, May, and June 1996 totaling ₱45,000, plus travel expenses from Hongkong. Petitioner argued respondent violated the lease by subleasing, and the contract was not renewed after expiration. Petitioner also moved to dismiss for failure to comply with prior barangay conciliation. During pre-trial, petitioner moved for judgment on the pleadings, stating the only disagreement was the interpretation of the lease contract. Respondent did not object. The trial court directed submission of memoranda and then considered the case submitted for decision.
ISSUE
1. Whether the Court of Appeals erred in affirming the award of actual damages.
2. Whether the Court of Appeals erred in modifying the judgment and awarding moral and exemplary damages and costs of suit.
3. Whether the Court of Appeals erred in affirming the award of attorney’s fees.
RULING
The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals’ Decision and Resolution.
1. On Actual Damages: The award of ₱45,000 as actual damages was proper. Petitioner’s act of ejecting the lodgers three months before the lease expiration on July 7, 1996, without valid reason, resulted in respondent’s lost income. The lease contract allowed the lessee “to use the premises as a dwelling or as lodging house,” so respondent’s act of accepting lodgers did not violate the contract. Petitioner, by moving for judgment on the pleadings without objection from respondent, was deemed to have admitted the material allegations of the complaint, including the claim for lost income.
2. On Moral and Exemplary Damages: The award of moral damages (₱50,000) and exemplary damages (₱50,000) was sustained. Petitioner’s act of ejecting the lodgers before contract expiration without valid reason and without informing respondent in Hongkong constituted bad faith. Moral damages are recoverable under Articles 2219 and 2220 of the Civil Code in relation to Article 21 for wilful injury or breach of contract in bad faith. Exemplary damages are justified under Article 2232 as petitioner acted in an oppressive manner.
3. On Attorney’s Fees and Costs: The award of attorney’s fees (₱8,000) and cost of the suit was affirmed. Since exemplary damages were properly awarded, attorney’s fees and litigation costs may also be recovered under Article 2208 of the Civil Code.