A SUPREME Court (SC) decision fortified the claim of the Baguio City Government to get back the Rillera building at the city market.
The SC decision, which was received by the city last August 4, said "We deny the petition. We affirm the decision dated November 27, 2008 and the resolution dated May 15, 2009 of the court of appeals."
Associate Justice Antonio Carpio said since the contract has already commenced, Hilltop has been occupying the Rillera building even after the termination of the lease period. The contract of lease provides the period of lease is 25 years and it is renewable for the same period at the option of both parties.
Based on the proceedings of the Regional Trial Court, Hilltop started occupying the area in 1974 and 25 years have lapsed without the parties renewing the contract which is already deemed terminated.
Thus, Baguio City is justified in taking over the Rillera building being its owner under the contract of lease.
The SC said "a reciprocal contract like a lease the period must be deemed to have been agreed upon for the benefit of both parties, absent language showing that the term was deliberately set for the benefit of the leasee or lessor alone. The continuence, effectivity and fulfillment of a contract of lease cannot be made to depend exclusively upon the free and uncontrolled and no equality exists between the lessor and lessee since the life of the contract would be dictated solely by the leasee."
The case dates back to June 22, 1974 when the Hilltop Market Fish Vendors Association Inc. represented by their president Gerardo Rillera and the city represented by then Mayor Lardizabal entered into a lease over a city owned lot located at the hilltop area with an area of 568.80 square meters.
The lease contract provided a period of 25 years renewable for the same period with a rental of P25,000 with the first payment commencing upon the issuance of the City Engineering Office of the certificate of full occupancy of the building to be constructed at the lot.
Before the certificate is issued, the lessee can continue collecting market fees from the vendors who are allowed to occupy any portion of the building, at the end of the lease contract, the city will own the building without payment or reimbursement of the Hilltop cost.
In 1975, Hilltop constructed the building and occupied it and was since known as the Rillera building even without a certificate from the city engineer's office.
In 1980 under Mayor Bueno, the local council issued a resolution rescinding the contract for failure to comply with its obligation to complete the building and wanted to complete the construction of the structure.
Under Mayor Jaime Bugnosen in 1990, he ordered the closure of the two upper floors of the building based on a council resolution saying the Rillera building failed to comply with minimum sanitary standards.
In 2005, then Mayor Yaranon issued an administrative order for the closure of the Rillera building, to have it cleaned and sanitized and enclosed to prevent illegal activities inside.
Yaranon opined Rillera building was never completed and had no provisions for electricity and plumbing systems or facilities for the conduct of regular business arguing the issuance of the certificate from the engineering office will signal the start of payment of the lease rental and not the effectivity of the contract stressing even without the certificate, Hilltop's members occupied the building and conducted business in it.
In the same year, Hilltop filed a case in the RTC asking for a restraining order and injunction to thwart the implementation of Yaranon’s order.
The RTC dismissed the plea of Hilltop and sided with the city saying Yaranon’s order was valid after the lease automatically expired on June 22, 1999 because the lease period of 25 years was expressly provided in the 1974 contract.
The RTC did not give weight to Hilltop's contention the certificate authorized it to occupy the lot because even without the certificate from the engineering office with Hilltop already occupying the lot because as early as 1974 to the present which is beyond the 25-year period.
The RTC also found the Rillera building unsanitary and dangerous to occupants.
In 2009, the Court of Appeals sided with the RTC ruling, denying the motion for reconsideration from the Hilltop association.
Today, with the SC decision Mayor Mauricio Domogan has created a committee composed of the legal, treasury and city buildings and engineering departments to study the next action.