Leveriza vs. Iyap 1

8/20/2019 Leveriza vs. Iyap 1

1/8

G.R. No. L-66614 January 25, 1988

PRIMITIVO LEVERIZA, E LEVERIZA, PAR!NGAO " ANTONIO #. VA$#O, petitioners,

vs.

INTERME%IATE APPELLATE #O!RT, MO&IL OIL P'ILIPPINE$ " #IVIL AERONA!TI#$

A%MINI$TRATION,respondents.

&I%IN, J.:

This is a Petition for Review on certiorari seeking the reversal of the decision of the Intermediate Appellate Court,

Third Division ( dated Feruar! "#, $#%& in AC'(.R. )o. C* )o. +$- entitled Mobil Oil Philippines, Inc ., plaintiff'

appellee vs. Primitivo Leveriza Parungao, Antonio C. Vasco and Civil Aeronautics Administration, defendants'

appellants/ Primitive 0everi1a, Fe 0everi1a Parungao and Antonio C. 0everi1a, cross'defendant, affirming in totothe

decision of the trial court dated April +, $#+.

As found ! the trial court and adopted ! the Intermediate Appellate Court, the facts of this case are as follows2

Around three contracts of lease resolve the asic issues in the instant case. These three contracts

are as follows2

First Contract . 3 For purposes of eas! reference and revit!, this contract shall e referred to

hereinafter as Contract A. This is a 4C5)TRACT 5F 06A764, e8ecuted etween the R6P9:0IC

5F T;6 P;I0IPPI)67, represented ! Defendant CI*I0 A6R5)A9TIC7 ADuare meters, at a monthl! rental of P&-."-, for

a period of " !ears, ?68hiit 4A4, 68hiit 4I'0everi1as4, 68hiit 4I'CAA4@.

econd Contracts. ! For purposes of eas! references and revit!, this contract shall e referred to

hereinafter as Contract :. This is a 406A76 A(R66


2/8

Contract # 3 a lease contract ?in effect a sulease@ of


3/8

". Declaring that Contract : has likewise ceased to have an! effect as of une

"%, $#++ ecause of the cancellation of Contract A/

. Declaring that Contract C was validl! entered into on une $, $#+%, and that it

is still valid and susisting/

&. 5rdering defendant CAA to refund to defendants 0everi1as the amount ofP",$%#.- with + per annum until full! paid/

. 5rdering defendants 0everi1as to refund to plaintiff the amount of P&%,---.--

with + interest per annum until full! paid/

+. Dismissing defendants 0everi1as four counterclaims against plaintiff/

. Dismissing defendants 0everi1as cross'claim against defendant CAA/

%. Dismissing defendant CAAs counterclaim against plaintiff/

#. Dismissing defendant CAAs counterclaim against defendant 0everi1as.

)o pronouncements as to costs.

5n une ", $#+, defendant 0everi1a filed a motion for new trial on the ground of newl! discovered evidence, lack of

Burisdiction of the court over the case and lack of evidentiar! support of the decision which was denied in the order of

)ovemer $",$#+ ?Rollo, p. $@.

5n ul! ", $#+, the CAA filed a


4/8

II

T;6 I)T6R


5/8

As regards prior consent of the lessor to the transfer of rights to the leased premises, the provision of paragraph of

said Contract reads in full2

. The Part! of the 7econd part ma! transfer her rights to the leased premises ut in such

eventualit!, the consent of the Part! of the First Part shall first e secured. In an! event, such

transfer of rights shall have to respect the terms and conditions of this agreement.

Paragraph % provides the sanction for the violation of the aove'mentioned terms and conditions of the contract. 7aid

paragraph reads2

%. Failure on the part of the Part! of the 7econd Part to compl! with the terms and conditions

herein agreed upon shall e sufficient for revocation of this contract ! the Part! of the First Part

without need of Budicial demand.

It is not disputed that the 0everi1as ?lessees@ entered into a contract of sulease ?Contract 4:4@ with


6/8

enBo!s the presumption of regularit!, not to mention the unassailale fact that such act was suse>uentl! affirmed or

ratified ! the Director of the CAA himself ?Record on Appeal, pp. $-%'$$-@.

Petitioners argue that cancelling or setting aside a contract approved ! the 7ecretar! is, in effect, repealing an act of

the 7ecretar! which is e!ond the authorit! of the Administrator.

7uch argument is untenale. The terms and conditions under which such revocation or cancellation ma! e made,have alread! een specificall! provided for in Contract 4A4 which has alread! een approved ! the Department

;ead, It is evident that in the implementation of aforesaid contract, the approval of said Department ;ead is no longer

necessar! if not redundant.

It is further contended that even granting that such cancellation was effective, a suse>uent illing ! the Accounting

Department of the CAA has in effect waived or nullified the rescission of Contract 4A.4

It will e recalled that the >uestioned cancellation of Contract 4A4 was among others, mainl! ased on the violation of

its terms and conditions, specificall!, the sulease of the propert! ! the lessee without the consent of the lessor.

The illing of the petitioners ! the Accounting Department of the CAA if indeed it transpired, after the cancellation of

Contract 4A4 is oviousl! an error. ;owever, this Court has alread! ruled that the mistakes of government personnelshould not affect pulic interest. In an Mauricio Mining Compan$ v. Ancheta ?$- 7CRA #$, &""@, it has een held

that as a matter of law rooted in the protection of pulic interest, and also as a general polic! to protect the

government and the people, errors of government personnel in the performance of their duties should never deprive

the people of the right to rectif! such error and recover what might e lost or e artered awa! in an! actuation, deal

or transaction concerned. In the case at ar, the lower court in its decision which has een affirmed ! the Court of

Appeals, ordered the CAA to refund to the petitioners the amount of rentals which was not due from them with +

interest per annum until full! paid.

Petitioners further assail the interpretation of Contract 4A4, claiming that Contract 4:4 was a mere sulease to

respondent uires no prior consent of CAA to perfect the same. Citing Article $+- of

the Civil Code, the! assert that the prohiition to sulease must e e8pressed and cannot e merel! implied or

inferred ?Rollo, p. $$@.

As correctl! found ! the Court of Appeals, petitioners in asserting the non' necessit! for a prior consent interprets

the first sentence of paragraph of Contract 4A4 to refer to an assignment of lease under Article $+ of the Civil

Code and not to a mere sulease. A careful scrutin! of said paragraph of Contract 4A4 clearl! shows that it speaks of

transfer of rights of Rosario 0everi1a to the leased premises and not to assignment of the lease ?Rollo, pp. &%'@.

Petitioners likewise argued that it was contemplated ! the parties to Contract 4A4 that uestion in the form of a su'lease ?Rollo, p.

$"@.

In Contract 4A4, it was categoricall! stated that it is the lessee ?petitioner@ who will manage and operate the gasoline

station. The fact that uished to CAA. Thus, this Court held that 4the primar! and elementar! rule of

construction of documents is that when the words or language thereof is clear and plain or readil! understandale !

an! ordinar! reader thereof, there is asolutel! no room for interpretation or construction an!more.4 ?7an


7/8

Finall!, petitioners contend that the administrator of CAA cannot e8ecute without approval of the Department

7ecretar!, a valid contract of lease over real propert! owned ! the Repulic of the Philippines, citing 7ections +

and +% of the Revised Administrative Code, which provide as follows2

76C. +. Authorit$ o% the President o% the Philippines to e&ecute contracts relative to real propert$ .

3 Ehen the Repulic of the Philippines is part! to a deed conve!ing the title to real propert$ or is

part$ to an$ lease or other contract relating to real propert$ belonging to said government, saiddeed or contract shall be e&ecuted on behal% o% said government b$ the President o% the

Philippines or ! an officer dul! designated ! him, unless authorit! to e8ecute the same is ! law

e8pressl! vested in some other officer. ?6mphasis supplied@

76C. +%. Authorit$ o% national o%%icials to ma'e contract . 3 Eritten contracts not within the

purview of the preceding section shall, in the asence of special provision, e e8ecuted, with the

approval of the proper Department ;ead, ! the Chief of the :ureau or 5ffice having control of the

appropriation against which the contract would create a charge/ or if there is no such chief, ! the

proper Department ;ead himself or the President of the Philippines as the case ma! re>uire.

5n the other hand, respondent CAA avers that the CAA Administrator has the authorit! to lease real propert!

elonging to the Repulic of the Philippines under its administration even without the approval of the 7ecretar! of

Pulic Eorks and Communications, which authorit! is e8pressl! vested in it ! law, more particularl! 7ection " ?"&@

of Repulic Act +, which reads2

7ec. ". Po(ers and )uties o% the Administrator. ! 7uBect to the general control and supervision

of the Department ;ead, the Administrator shall have, among others, the following powers and

duties2

888 888 888

?"&@ To administer, operate, manage, control, maintain and develop the uire, hold,purchase, or lease an! personal or real propert!/ right of wa!s, and easements which ma! e

proper or necessar!2 Provided, that no real propert! thus ac>uired and an! other real propert! of

the Civil Aeronautics Administration shall e sold without the approval of the President of the

Philippines. ...

There is no dispute that the Revised Administrative Code is a general law while Repulic Act + is

a special law nor in the fact that the real propert! suBect of the lease in Contract 4C4 is real

propert! elonging to the Repulic of the Philippines.

9nder + of the Revised Administrative Code, such contract of lease must e e8ecuted2 ?$@ ! the President of the

Philippines, or ?"@ ! an officer dul! designated ! him or ?@ ! an officer e8pressl! vested ! law. It is readil!

apparent that in the case at ar, the Civil Aeronautics Administration has the authorit! to enter into Contracts of 0ease

for the government under the third categor!. Thus, as correctl! ruled ! the Court of Appeals, the Civil Aeronautics

Administration has the power to e8ecute the deed or contract involving leases of real properties elonging to the

Repulic of the Philippines, not ecause it is an entit! dul! designated ! the President ut ecause the said

authorit! to e8ecute the same is, ! law e8pressl! vested in it.

9nder the aove'cited 7ection " ?par. "&@ of Repulic Act +, the Administrator ?Director@ of the Civil Aeronautics

Administration ! reason of its creation and e8istence, administers properties elonging to the Repulic of the

Philippines and it is on these properties that the Administrator must e8ercise his vast power and discharge his dut! to


8/8

enter into, make and e8ecute contract of an! kind with an! person, firm, or pulic or private corporation or entit! and

to ac>uire, hold, purchase, or lease an! personal or real propert!, right of wa!s and easements which ma! e proper

or necessar!. The e8ception, however, is the sale of properties ac>uired ! CAA or an! other real properties of the

same which must have the approval of the President of the Philippines. The Court of appeals took cogni1ance of the

striking asence of such proviso in the other transactions contemplated in paragraph ?"&@ and is convinced as we

are, that the Director of the Civil Aeronautics Administration does not need the prior approval of the President or the

7ecretar! of Pulic Eorks and Communications in the e8ecution of Contract 4C.4

In this regard, this Court, ruled that another asic principle of statutor! construction mandates that general legislation

must give wa! to special legislation on the same suBect, and generall! e so interpreted as to emrace onl! cases in

which the special provisions are not applicale ?7to. Domingo v. De los Angeles, #+ 7CRA $#@,. that specific statute

prevails over a general statute ?De esus v. People, $"- 7CRA +-@ and that where two statutes are of e>ual

theoretical application to a particular case, the one designed therefor speciall! should prevail ?Eil Eilhensen, Inc. v.

:alu!ot, % 7CRA %@

E;6R6F5R6, the petition is DI7

Leveriza vs. Iyap 1

Documents

Transcript of Leveriza vs. Iyap 1