Case Digest: DE LA PAZ v. MARIKINA FOOTWEAR DEVELOPMENT COOPERATIVE, INC.

GILBERT T. DE LA PAZ v. MARIKINA FOOTWEAR DEV)ELOPMENT COOPERATIVE, INC.

587 SCRA 319 (2009)

The Court cannot allow unjust enrichment on the part of one party and unjust poverty on the part of another.

Marikina Footwear Development Cooperative, Inc (MAFODECO) represented by its chairman Rodolfo de Guzman (de Guzman), leased a space to Gilbert T. de la Paz (de la Paz), operator of a water-refilling station for a period of one year. It was found out that the real owner was Bayani Vergara who only allowed MAFODECO to use the property as its office for free. Upun the demise of Vergara, the ownership was transferred to his wife, Severina. De la Paz, de Guzman and Severina entered into an ―Agreement on Advance Rental‖ and agreed to split the rental payments of de la Paz between Severina and MAFODECO.

Severina later decided to discontinue the split rental arrangement and entered into a lease contract with de la Paz. MAFODECO sent a letter to de la Paz demanding him to pay Seventy Eight Thousand (P78, 000) Pesos for his rent and to vacate the property within five days. Petitioner de la Paz refused to comply with the demand prompting MAFODECO to file a complaint for unlawful detainer against petitioner before Metropolitan Trial Court of Marikina City. MALFODECO alleged that it is ―the OWNER and LESSOR‖ of the property ―under a verbal lease‖ which was denied by the de la Paz. He further alleged that MAFODECO has no cause of action against him because he already have a contract of lease with Severina. The Metropolitan Trial Court ruled in favor of MAFODECO which was affirmed by the Regional Trial Court of Marikina. On appeal, the Court of Appeals affirmed the decision of the lower court. Hence, this petition.

ISSUE:

Whether or not MAFODECO can demand payment of rentals from de la Paz and demand him to vacate the property

HELD:

MAFODECO, in misrepresenting in its complaint for unlawful detainer that it is ―the OWNER‖ of the property, attached a document entitled ―Pahintulot Sa Paghahanap-buhay,‖ which document, as the title itself says, is simply a permit or authority to engage in business. Apparently, MAFODECO made such false declaration of ownership to make it appear that it had the right to lease the property to de la Paz.

When MAFODECO filed on February 11, 2002 the complaint for unlawful detainer against de la Paz, it could not also have anchored its right to lease the property on the “tolerance” of its previous owner Bayani who had died more than 11 years earlier or on October 16, 1993. Bayani‘s act of tolerance in favor of MAFODECO had automatically ceased with his demise.

To allow de la Paz, under the circumstances, to vacate the property and pay MAFODECO rentals until the property shall have been vacated, as ordered by the MeTC and affirmed by both the RTC and Court of Appeals, de la Paz‘s existing lease contract with Severina notwithstanding, would constitute unjust enrichment in favor of MAFODECO and cause unjust poverty to de la Paz.