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150806,
Article.
Hence,
respondent
Bathala
instituted
an
action
for
and the husband of Eufemia, who are the petitioners in this case.
The contract of lease contains the following provisions which give rise
addition, they moved to dismiss the action for declaratory relief since
respondent already breach the obligation and the case would not end
the litigation and settle the rights of the parties. The RTC ruled in
favor of Bathala. On appeal, the Court of Appeals affirmed the trial
courts decision. Hence, the matter was raised before the Supreme
Court.
ISSUE: Whether or not declaratory relief was proper considering that
Bathala was in breach of obligation when it filed the action before the
trail court?
HELD: YES. Petitioners insists that respondent was already in breach
of the contract when the petition was filed.
that followed, respondent complied with the terms and conditions set
In response,
Bathala contend that VAT may not be imposed as the rentals fixed on
the contact of lease were supposed to include VAT, in lieu that there
contract was established when the VAT law has been effected.
However, respondent received another letter from the petitioners
informing the former that its monthly rental should be increased by
73% pursuant to condition no. 7 of the contact and Article 1250 of
the civil code. Bathala opposed the said increased arguing that there
ordinance;
2) the terms of said documents and the validity thereof are doubtful
and require judicial construction;
Mirasol where the declaratory relief action was dismissed because the
issue therein could be threshed out in the unlawful detainer suit. Yet,
again, in that case, there was already a breach of contract at the time
of the filing of the declaratory relief petition. This dissimilar factual
milieu proscribes the Court from applying Teodoro to the instant
case.
is
true
that
in
Panganiban
v.
Pilipinas
Shell
Petroleum
the trial court. The resolution of the present petition would write finis
to the parties' dispute, as it would settle once and for all the question
of the proper interpretation of the two contractual stipulations
subject of this controversy.
vests the MTC with jurisdiction over real actions, where the assessed
HELD: NO. The RTC correctly made a distinction between the first
of the Rules of Court, said provision must be read together with those
arising thereunder.
Since petitioners averred in the Complaint that they had already been
into effect.