Court dismisses lot renters’ case vs. city


BAGUIO CITY  – The Regional Trial Court Branch 7 here dismissed the case for specific performance and other reliefs filed by a group of market lessees against the City Government and its officials to stop the implementation Mayor Mauricio Domogan’s order ejecting them from City-owned lots at Kayang and Hilltop Roads.

The complainants led by Ma. Josephine Nunez were among those who refused to renew their contracts under the new lease terms offered by the City despite negotiations and deadlines.

In a three-page decision handed down last Feb. 19, Judge Mona Lisa Tabora found no cause of action for specific performance as she said there was no contract to speak of in the case.

The Court noted that an action for specific performance is based on the existence of a valid contract but the contract between the parties expired on Dec. 31, 2015 and the City Government claimed that even before that date, they offered to renew the lease but with upgraded terms, which was refused by the complainants.

“Considering that a contract is consensual, the court is not allowed to even consider plaintiffs’ prayer to order …’the defendants and their successors to execute the renewal Contract of Lease with the plaintiffs under the terms and conditions set by the existing applicable City Ordinances and Resolution…’,” the Court said.

The Court also shot down the complainants’ argument that was an “implied renewal of contract” with the City’s “collection of rentals imposed by the (City) and which they paid as demanded even after the expiration of said contracts.”

“…Since plaintiffs were paying on a monthly basis, the period of lease after the expiration of the contract is considered to e from month to month in accordance with Article 1687 of the Civil Code.”

“There being no cause of action for specific performance, plaintiffs’ prayer for the issuance of an injunctive writ based on their theory that there was an implied contract renewal must necessarily fail as well,” the Court said.

The City argued that being the owner of the lots, they have the “right to determine what contractual obligations to impose” and as such they did not act illegally when they did not renew the contract after the complainants refused the new obligations.

They stressed that the “City cannot be forced to enter into any contract if the conditions set forth therein are unreasonable.”

In their argument, the City  said the plaintiffs admitted that “they have been occupying the subject lots for more than 30 years and have thus gained so much benefit from using the City’s properties by paying a measly amount of rent;

“In fact, even the Commission on Audit has called the attention of the City that in keeping with the prevailing economic conditions, it is high time for the City to increase rent.”

The complainants claimed that the “imposition of the automatic transfer of ownership of their buildings on the subject city lots to (the City) is unconstitutional, illegal and ultra vires.”

They also argued that the “autonomous nature of contracts is not absolute as under Article 1306 of the Civil Code, the same is subject to the limitation under said law that such terms and conditions must not be contrary to law, morals, good customs, public order or public policy.”

“They claimed that the (City’s) insistence to apply the BOT (Build-Operate-Transfer) law as a precondition to the renewal of their contracts should not apply to them as they are not undertaking a project construction as they and their predecessors-in-interest have existing structures on the rented lots,” the Court noted.

The City renewed the contract with an increased lease rental which the City maintains is still minimal.

The mayor said the rental rate increase of P6 per square meter per day is fair enough considering the present situation.  For 47 years, the renters have been paying a measly 25 centavos per square per day which was later increased to P75.

He said even the Commission on Audit declared the contracts disadvantageous to the city and has recommended the cancellation of the agreements to allow new and advantageous deals.

By Aileen P. Refuerzo