G.R. No. 29292, March 13, 1929
TOMAS C. VIUDA DE PAMINTUAN, plaintiff-appellant, vs. JUAN TIGLAO, defendant-appellant

FACTS

Tomasa C. Viuda de Pamintuan, as guardian of her minor children, filed an action for unlawful detainer in the justice of the peace court of Mabalacat, Pampanga, against Juan Tiglao. She sought to recover possession of two parcels of land leased to Tiglao, along with unpaid rent in palay and sugar for the agricultural years 1925-1926 and 1926-1927, damages, and an attorney’s fee stipulated in the lease contract. The lease, executed by Jose V. Ramirez as attorney-in-fact for Florentino Pamintuan, required Tiglao to pay an annual rent of 300 cavans of palay and 400 piculs of sugar. Tiglao failed to pay the rent for the first year by March 31, 1926, prompting the suit. The justice of the peace ruled in favor of Pamintuan, and Tiglao appealed to the Court of First Instance (CFI). The CFI also ruled for Pamintuan, ordering Tiglao to surrender possession and pay the rent in kind or its monetary equivalent, but denied the claim for the stipulated attorney’s fee and 15% interest on unpaid rent. Both parties appealed: Pamintuan contested the denial of the attorney’s fee and interest, while Tiglao challenged the court’s jurisdiction and the denial of his own attorney’s fee.

ISSUES:
1. Whether the justice of the peace court (and the CFI on appeal) had jurisdiction over the unlawful detainer action, given that the lease term had not fully expired and Tiglao raised a counterclaim exceeding the court’s jurisdictional limit.
2. Whether the action was premature because it was filed before the lease term ended.
3. Whether the court lost jurisdiction when Tiglao voluntarily surrendered possession before judgment.
4. Whether the stipulated 15% interest on unpaid rent was usurious and unenforceable.
5. Whether the stipulated attorney’s fee of P1,000 could be awarded in an unlawful detainer case.

RULING

1. Jurisdiction of the Justice of the Peace Court: The court held that the justice of the peace had jurisdiction. Under Article 1556 of the Civil Code, non-payment of rent by the lessee is a ground for rescission of the lease, allowing the lessor to recover possession. Section 80 of the Code of Civil Procedure authorizes an unlawful detainer action within one year after the right to possession is unlawfully withheld. The action was proper because Tiglao’s failure to pay rent after demand entitled Pamintuan to treat the lease as rescinded and seek restitution.
2. Prematurity of the Action: The action was not premature. The lessor may elect to rescind the lease and recover possession upon the lessee’s failure to pay rent, without needing a separate action for rescission in the CFI.
3. Effect of Voluntary Surrender of Possession: The court retained jurisdiction despite Tiglao’s voluntary surrender of possession before judgment. Jurisdiction, once attached, continues until full relief is granted.
4. Usurious Interest: The stipulated 15% interest on unpaid rent was deemed usurious under the law at the time, which capped interest at 14% per annum. The court viewed the stipulation as one for interest, not liquidated damages, and upheld the CFI’s denial of this claim.
5. Attorney’s Fee: The court reversed the CFI and held that the stipulated attorney’s fee of P1,000 was recoverable as damages in the unlawful detainer action. While attorney’s fees are generally not allowable as costs or damages unless stipulated, a reasonable fee (not exceeding the stipulated amount) may be awarded as damages arising from the breach of contract. The justice of the peace court had authority to award such damages in connection with determining the right to possession, as its jurisdiction in unlawful detainer cases is not limited by the monetary jurisdictional limits for other civil actions.

DISPOSITIVE PORTION:
The judgment of the CFI was modified. The court affirmed the award of possession and unpaid rent but ordered Tiglao to pay Pamintuan the stipulated attorney’s fee of P1,000 as damages. The denial of the 15% interest was upheld. Costs were imposed on Tiglao.