CA favors Park N Ride in property rental row

BG PHOTO: COURT OF APPEALS WEBSITE

MANILA, Philippines — The Court of Appeals (CA) has ordered the City of Manila to return a leased property to Park N Ride Inc. (PNRI) as it overturned the city government’s termination of the lease contract during the term of former Mayor Francisco “Isko Moreno” Domagoso.

In a 24-page decision dated April 30, the CA’s Fourth Division granted PNRI’s appeal challenging the Regional Trial Court of Manila’s decision last year in favor of the City of Manila.

“After a careful examination of the records of this case, we find that the City of Manila acted with grave abuse of discretion in canceling the contract of lease,” the CA said.

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PNRI is a corporation that acquires, leases, operates, and manages parking buildings and terminals, among others.

In 2001, the city government entered into a lease contract with PNRI to develop a parcel of land between the Metropolitan Theater and Mehan Garden to create parking spaces for taxpayers transacting official business at City Hall.

The company developed the property into a parking complex and began operations. However, in 2020, the City of Manila informed them of its plan to dispose of the leased property “as an economical solution to raise financial resources to support its strategic response to COVID-19’s health and economic impact.”

‘Grave abuse of discretion’

The city government issued a cancellation notice and demand letter to PNRI over such alleged violations as nonpayment of rental fees and failure to secure risk insurance.

The PNRI requested reconsideration as it conveyed a willingness to settle its obligations, if any, and remedy the alleged violations in the lease contract.

Contract canceled

Despite the appeal, the City of Manila proceeded with the cancellation of the contract and, on April 14, 2021, issued a final cancellation notice and demanded that PNRI vacate and turn over the property within 30 days.

The city government took possession of the leased property, which is currently being occupied as extension offices of its departments, the CA said.

In its ruling, the appellate court noted that PNRI paid the rental fees as shown by the certifications issued by the City Treasurer’s Office.

The court also noted that the city government did not refute the authenticity and veracity of the certifications its officials issued.

“In the case at bench, grave abuse of discretion attended the City of Manila’s unilateral cancellation of the lease contract without any justifiable reason,” the CA said.

A contracting party, the court said, could not unilaterally terminate a contract as its validity “cannot be left to the will of one of them.”

“The City of Manila likewise acted with grave abuse of discretion in thereafter evicting petitioner-appellant from the leased property. The City of Manila, as lessor, has the obligation to maintain the lessee in peaceful and adequate enjoyment of the lease for the entire duration of the contract,” the court said.