Paculdo vs Regalado

GR 123855
20 November 2000

FACTS

Petitioner Paculdo and Respondent Regalado entered into a contract of

lease over a 16,478 square meter parcel of land
Duration of the contract: 25 years commencing on 1 Jan 1991 to 31
Dec 2015
For the 1st five years beginning 27 Dec 1990, Paculdo would pay a
monthly rental of P450,000 payable within the first five days of each
month with a 2% penalty for every month of late payment
Paculdo also leased 11 other properties from Regalado
Paculdo also purchased from Regalado eight units of heavy equipment
and vehicles in the aggregate amount of P1,020,000
Paculdo failed to pay P 361,895.55 in rental for the month of May 1992
and the monthly rental of P450,000 for the months of June and July
1992
6 July 1992, Regalado sent a demand letter to Paculdo demanding
payment of the back rentals, and if no payment was made within 15
days from receipt of the latter, the lease contract will be cancelled.
17 July 1992, another demand letter for payment and for Paculdo to
vacate the subject premises was sent
3 August 1992, unknown to Paculdo, Regalado mortgaged the land
including the improvements which Paculdo introduced into the land
amounting to P 35 million to Monte de Piedad Savings Bank, as
security for a loan in the amount of P20 million
12 August 1992 and so on, Regalado refused to accept Paculdos daily
rental payments.
20 August 1992, Paculdo then filed with RTC an action for injunction
and damages seeking to enjoin respondent from disturbing his
possession of the property subject of the lease contract.
On the same day, Regalado filed with MTC a complaint for ejectment
attached were the two demand letters.
Five days after the filing of ejectment complaint, Regalado moved to
withdraw the complaint on the ground that certain details had been
omitted in the complaint and must be re-computed
22 April 1993, respondent re-filed the ejectment complaint with the
MTC computed from Aug 1992 until 31 March 1993. Petitioner was
liable for P 3,924,000

ISSUE
 Whether petitioner Paculdo was in arrears in the payment of rentals at
the time of the filing of the complaint for ejectment

HELD
No.
In the letter dated 19 Nov 1991, respondent proposed that petitioners
security deposit for the Quirino lot, be applied as partial payment for
his account under the subject lot as well as to the real estate taxes on
the Quirino lot. Petitioner signed in conformity.
In an earlier letter, 15 July 1991, respondent informed petitioner that
the payment was to be applied not only to petitioners accounts under
the subject land and the Quirino lot but also to the heavy equipment
bought by the latter from respondent. No signature of petitioner.
Petitioner submists that his silence is not consent but is in fact a
rejection.
As provided in Art 1252 of the NCC, the right to specify which among
his various obligations to the same creditor is to be satisfied first rest
with the debtor.
at the time petitioner made the payment, he made it clear to
respondent that they were to be applied to his rental obligations on the
Fairview wet market property. Though he entered into various contracts
and obligations with respondent, all the payments made, about
P11,000,000.00 were to be applied to rental and security deposit on
the Fairview wet market property. However, respondent applied a big
portion of the amount paid by petitioner to the satisfaction of an
obligation which was not yet due and demandable- the payment of the
eight heavy equipments.
Under the law, if the debtor did not declare at the time he made the
payment to which of his debts with the creditor the payment is to be
applied, the law provided the guideline; i.e. no payment is to be
applied to a debt which is not yet due and the payment has to be
applied first to the debt which is most onerous to the debtor.
The lease over the Fairview wet market is the most onerous to the
petitioner in the case at bar.