G.R. No. 136421 - JOSE AND ANITA LEE, VS. COURT OF APPEALS, HON. N.C. PERELLO, AS JUDGE OF RTC, BRANCH 276, MUNTINLUPA CITY AND HEIRS OF THE DECEASED SPOUSES MANUEL AND CARMEN RECARIO.D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, for lack of cause of action the complaint against the defendants are hereby DISMISSED. The counterclaims are likewise dismissed it appearing that the complaint was not filed in bad faith. [3] Private respondents appealed to the Regional Trial Court, which reversed the decision of the Metropolitan Trial Court. The dispositive portion of the decision, dated May 21, 1996, of the Regional Trial Court, Branch 276, Muntinlupa City, stated: Premises considered, this Court reverses on Appeal the DECISION by the Metropolitan Trial Court, Branch 80 of Muntinlupa City, and directs Defendants as follows: 1. To immediately vacate and remove themselves from the premises having violated the agreement which is now terminated; 2. To pay the unpaid rentals for the whole lot and the 1/2 undivided portion of the building from September 1, 1994 up to the time of the filing of the complaint in the sum of P2,500.00 per month or a total of P22,500.00; 3. To pay damages in the form of reasonable monthly rentals for the use of the remaining one half part of the building which Defendant continued to occupy from March 2, 1994 up to the time of the filing of the complaint in the sum of P10,000.00 per month or a total amount of P150,000.00; 4. To pay the attorneys fees of Plaintiff in the sum of P10,000.00; 5. and cost of litigation. [4] In reversing the Metropolitan Trial Court, the Regional Trial Court said: Under these provisions this contract is for the lease of both the land and the improvement thereon consisting of a building, for a period of fifteen years with an option to renew for five years more. The building was initially constructed by the father of Plaintiff, but was finished by Defendant at a total sum of P275,000.00. The agreed rental was at P5,000.00 per month for the first ten (10) years and P6,000.00, in the succeeding five (5) years. It was also agreed that after 7 1/2 years of occupancy, Plaintiff will become the owner of one half of the building. Further, even as the monthly rental is for P5,000.00, a month, Defendant will pay only P2,500.00 a month, the remaining half of the rental will be deducted as reimbursement to Defendant for the amount they spent to finish the building. Thus within ten (10) years, Plaintiff would have reimbursed Defendant P25,000.00 already of their investment in finishing the house, and in the next five (5) years more, P15,000.00 more, or a total of P40,000.00 for the fifteen (15) year-term of the lease. Evidently, defendant even as she continued to stay in the premises was being reimbursed of her investment by paying only 1/2 of the agreed monthly rental, while Plaintiffs who by their agreement should become the owner of the half portion of the building after 7 1/2 years, was actually making installment paying for the same building by offsetting a part of the agreed rental, to reimburse Defendants investment in finishing the house. Under this arrangement, Plaintiffs are now the exclusive owners of 1/2 of the building,