4/7/2021
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As counterclaim in his Answer,[5] respondent claimed that petitioner failed to comply
with its obligations in the lease contracts, such as keeping the apartment units
"neat[-]looking" and keeping the lawns and hedges watered and trimmed.[6] Petitioner
was also obliged to keep the leased premises in good and tenantable condition.[7]
Further, upon termination of the lease, the lessee should surrender the leased premises
to the lessor in a good and tenantable condition with the exception of ordinary fair wear
and tear.[8]
Respondent alleged that when petitioner vacated the leased premises, the same was
destroyed and rendered inhabitable. As such, respondent had to make the necessary
repairs amounting to P79,534.00 to the units. Respondent furnished petitioner with the
receipts of the expenses incurred from the labor and materials for the repair of the
units. Hence, respondent had the right to withhold the release of the deposits due to
the violation of the terms and conditions of the lease agreements.
Respondent claimed that when petitioner leased the two apartment units, the latter
made respondent believe that the apartment units were going to be occupied by
petitioner's executives and their families while assigned in Davao City. Instead,
petitioner used the apartment units as staff houses. The use and occupancy of the
apartment units became hazardous because petitioner's occupants, recklessly and with
impunity, disregarded all norms of decent living in apartments and destroyed the units.
Thus, as counterclaim, respondent claimed that he had the right to withhold the refund
of the security deposit amounting to P90,000.00 and apply the same to the cost of the
repairs amounting to P79,534.00.[9]
Since respondent refused to return the security deposit, petitioner filed an action for
collection of sum of money equivalent to the amount of the security deposit against the
respondent.
MTCC ruling
In a Decision[10] dated May 20, 2005, the Municipal Trial Court Cities (MTCC) of Davao
City, 11th Judicial Region, Branch 1, found that respondent had the obligation to return
the security deposit. Under the lease agreement, it is provided that the security deposit
shall be returned after the expiration of the lease. The lease agreement does not
authorize the outright withholding of the security deposit by the lessor if it appears to
him that the terms and conditions of the lease are violated. The lessor should first bring
it to the proper forum to determine whether the lease contracts were violated, thus:
WHEREFORE, judgment is hereby rendered m favor of the plaintiff and
against the defendant:
a.) Ordering the defendant to refund plaintiff its security deposit in the
amount of Ninety Thousand Pesos (P90,000.00) with interest at twelve
percent (12%) per annum, until refunded in full;
b.) Ordering the defendant to pay plaintiff the amount of Ten Thousand
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