G.R. No. 48870; May 28, 1943
REMEDIOS TIONGSON DE LUGAY and REGINA TIONGSON, plaintiffs-appellees, vs. DOMINGO C. BASILIO, defendant-appellant.

FACTS

The plaintiffs, Remedios Tiongson de Lugay and Regina Tiongson, filed an action against the defendant, Domingo C. Basilio, to recover the sum of P1,700 as agreed rental for the agricultural year 1939-1940 on a leased parcel of land, plus P600 in damages, and the immediate return of the premises. The lease contract, executed on or about February 4, 1936, was for the agricultural year 1936-1937 at a rental of P1,700 payable in January 1937, with an option for the lessee to extend the lease for four agricultural years, provided all conditions were fulfilled. The defendant availed of this extension but defaulted on the rent for 1939-1940, which fell due in January 1940. The complaint was filed on May 13, 1940. On the day of trial, June 28, 1940, the defendant did not appear but filed a motion for continuance based on a medical certificate of illness, which the court denied. During the trial, the plaintiffs’ attorney verbally amended the complaint to include a demand for the P1,700 rental for the agricultural year 1940-1941. The court rendered judgment on the same day, ordering the defendant to pay: (a) P1,700 with legal interest from the filing of the complaint as rent for 1939-1940; (b) P600 as damages; (c) P1,700 with legal interest from the filing of the complaint as rent for 1940-1941; and (d) rescission of the contract and immediate return of the land. The defendant appealed.

ISSUE

1. Whether the trial court erred in denying the defendant’s motion for reconsideration and new trial.
2. Whether the trial court’s decision was against the law and the evidence, particularly regarding the award of damages.
3. Whether the trial court erred in condemning the defendant to pay the rent for the agricultural year 1940-1941.
4. Whether the trial court erred in authorizing the issuance of an order of execution before the expiration of the time to appeal.

RULING

1. No, the trial court did not err in denying the motion for new trial. The defendant’s alleged illness was a mere pretext intended to delay the case, and his presence at the trial was not indispensable. Furthermore, the proposed defense—that the plaintiffs refused to transfer the sugar quota for the land—was raised for the first time only after three full years of the lease and after the defendant had defaulted on rent and judgment was rendered against him. This defense would not have altered the case’s outcome.
2. Yes, the trial court’s award of damages was erroneous. The contract only contained a general stipulation that the lessee would be liable for damages in case of default, without specifying liquidated damages. Under Article 1108 of the Civil Code, for an obligation consisting of the payment of a sum of money, the indemnity for damages in the absence of a contrary stipulation is limited to the payment of agreed interest or, in its absence, legal interest. Therefore, the plaintiffs were only entitled to legal interest on the overdue rent from the date of default, not the P600 awarded for various expenses (interest on borrowed money, travel expenses, filing fees, sheriff’s fees, and attorney’s fees). The filing and sheriff’s fees were already included in the costs.
3. Yes, the trial court erred in condemning the defendant to pay the rent for 1940-1941. Under the contract, the rent for the agricultural year 1940-1941 was not due and payable until January 31, 1941. The action was filed in May 1940, and the amendment demanding the 1940-1941 rent was made in June 1940. It was a manifest error to order payment of rent not yet due and to impose legal interest on it from the date of the complaint’s filing.
4. The issue of execution pending appeal is addressed. The execution of the judgment pending appeal, though not fully detailed in the record, resulted in the sale of the defendant’s properties at a loss. Regardless of whether the immediate execution was justified under the rules, the appellees (plaintiffs) must answer for the consequences of that execution under Rule 39, Section 5, given that parts of the judgment (the P600 damages and the P1,700 rent for 1940-1941) are being reversed.
DISPOSITIVE:
The judgment appealed from is reversed. A new judgment is entered ordering the defendant to pay the plaintiffs the sum of P1,700 as rent for the agricultural year 1939-1940, with interest at 6% per annum from February 1, 1940, until fully paid. The defendant’s claim for restitution or damages due to the execution pending appeal of the reversed portions of the judgment (the P600 damages and the P1,700 rent for 1940-1941) shall be determined by the trial court upon remand, in accordance with Rule 39, Section 5. To avoid multiplicity of suits, the plaintiffs may set up the 1940-1941 rent as a counterclaim against the defendant’s claim for damages. No costs in this instance.