Cruz vs. Manila International Airport Authority

An appellee who has not itself appealed cannot obtain from the appellate court any affirmative relief other than what was granted in the decision of the court below, nor can it assign errors designed to have the judgment modified; the appellate court correspondingly cannot rule on an issue raised solely by the appellee that would alter the lower court's judgment.

Corazon S. Cruz, doing business under the name and style "Villa Corazon Condo Dormitory," entered into a Contract of Lease with the Manila International Airport Authority (MIAA) over a 1,411.98-square-meter property situated at BAC 1-11, Airport Road, Pasay City, for the purpose of establishing a commercial arcade for sublease to other businesses. The lease contract was executed on August 12, 2003, with Frederick Cruz signing as Cruz's attorney-in-fact. A dispute arose concerning the usability of the leased premises and Cruz's rental obligations, leading to litigation in two separate venues — Pasig City and Manila — involving the same lease contract but different causes of action.

On August 12, 2003, Corazon S. Cruz, through her attorney-in-fact Frederick Cruz, executed a Contract of Lease with MIAA over a 1,411.98-square-meter property located at BAC 1-11, Airport Road, Pasay City, intending to establish a commercial arcade for sublease to other businesses. Cruz alleged that MIAA failed to disclose that part of the leased premises was subject to an easement of public use, being adjacent to the Parañaque River. Because of the easement, Cruz was unable to obtain a building permit and a certificate of electrical inspection from the Manila Electric Company, which in turn prevented her from securing an electrical connection for the entire leased premises.

Due to the lack of electricity, Cruz's tenants did not pay rent, rendering her unable to meet her own rental obligations to MIAA from December 2004 onwards. Additionally, because some of Cruz's stalls were located within the easement area, the Metropolitan Manila Development Authority demolished them, causing her to suffer actual damages in the amount of ₱633,408.64. Cruz sent MIAA a rental computation of ₱629,880.02, reflecting a deduction for the said damages. Instead of accepting payment, MIAA sent a letter terminating the lease contract.

On December 7, 2005, Cruz filed before the RTC of Pasig City, Branch 68, a complaint for breach of contract, consignation, and damages against MIAA, docketed as Civil Case No. 70613. Separately, Cruz had also filed a complaint for partial annulment of the same lease contract before the RTC of Manila, Branch 1, docketed as Civil Case No. 1129918. MIAA moved to dismiss the Pasig case on two grounds: violation of the certification against forum shopping under Section 5, Rule 7 of the Rules of Court, given that both cases arose from the same lease contract; and improper venue, since Cruz's verification and annexes in the Manila case indicated her residence as 506, 2nd Street, San Beda Subdivision, San Miguel, Manila.

The RTC of Pasig City dismissed the complaint on the ground of forum shopping, finding both cases founded on the same actionable document between the same parties. It also observed that the lessee named in the lease contract was Frederick Cruz, not Corazon Cruz. The RTC did not sustain MIAA's improper venue argument, however, since Cruz alleged in her complaint that she was a resident of San Juan, Metro Manila, and the complaint was taken at face value on that point. Cruz's motion for reconsideration was denied, and she appealed to the Court of Appeals. The CA found no forum shopping, as the two cases involved distinct causes of action and issues, and recognized Cruz as the real party-in-interest since Frederick Cruz had signed merely as her attorney-in-fact. Nevertheless, the CA dismissed the Pasig case on the ground of improper venue, holding that Cruz was bound by her judicial admission that her residence was in Manila, not San Juan.

• Scope of Appellate Review: Cruz contended that the CA may only resolve errors assigned by the appellant and cannot rule on a distinct issue raised by the appellee.
• Appellee's Lost Appeal: Cruz argued that by ruling on the issue of improper venue, the CA effectively allowed MIAA to pursue a lost appeal, since MIAA had not filed a notice of appeal within the reglementary period nor paid the prescribed docket fees.

• Unresolved Issue Below: MIAA maintained that, despite raising the issue of improper venue before the CA, the RTC-Pasig City did not categorically rule on the said issue, and therefore MIAA could raise it as one of the issues before the appellate court.

• Scope of Appellate Review: Whether the Court of Appeals erred in dismissing Cruz's appeal on the ground of improper venue, an issue raised not by the appellant Cruz but by the appellee MIAA.

• Scope of Appellate Review: Yes. The CA committed reversible error in sustaining the dismissal on the ground of improper venue, because that issue was raised by the appellee, not the appellant. An appellee who has not appealed cannot obtain affirmative relief or seek modification of the lower court's judgment; its role is confined to refuting the appellant's assigned errors.

• Scope of Appellate Review: The right to appeal is essentially statutory in character, and an appellee who has not itself appealed assumes a purely defensive stance, its interest confined to the affirmance of the judgment below. As held in Medida vs. CA, an appellee who has not appealed cannot obtain any affirmative relief other than what was granted in the decision of the court below, cannot impugn the correctness of a judgment not appealed by it, and cannot assign errors designed to have the judgment modified. The appellee may only make a counter-assignment of errors or argue issues raised at trial for the purpose of sustaining the judgment in its favor, even on grounds not included in the decision of the court a quo nor raised in the appellant's assignment of errors. In this case, the RTC-Pasig City, while granting MIAA's motion to dismiss, had found MIAA's improper venue argument to be erroneous. Since MIAA did not file its own appeal to contest that conclusion, the RTC's ruling on venue became conclusive. The CA should not have taken the venue issue into consideration, as doing so effectively allowed MIAA to obtain affirmative relief — dismissal on a different ground — without having pursued its own appeal. The CA's action constituted reversible error warranting reversal.

• Doctrine on the Role of the Appellee in the Appellate Process — An appellee who has not itself appealed cannot obtain from the appellate court any affirmative relief other than what was granted in the decision of the court below. The appellee cannot impugn the correctness of a judgment not appealed from by it, nor assign errors designed to have the judgment modified. The appellee's role is confined to refuting the appellant's assigned errors and sustaining the judgment in its favor, even on grounds not included in the lower court's decision or raised in the appellant's assignment of errors. The appellate court correspondingly cannot rule on issues raised solely by the appellee that would alter or modify the lower court's judgment. Applied here, MIAA as appellee could not seek dismissal on the ground of improper venue when the RTC had already rejected that argument, and the CA erred in ruling on it.

• "An appellee who has not himself appealed cannot obtain from the appellate court any affirmative relief other than the ones granted in the decision of the court below. He cannot impugn the correctness of a judgment not appealed from by him. He cannot assign such errors as are designed to have the judgment modified." — This is the controlling formulation quoted from Medida vs. CA, articulating the doctrinal limit on an appellee's participation in the appellate process and serving as the ratio decidendi for reversing the CA.

• "All that said appellee can do is to make a counter-assignment of errors or to argue on issues raised at the trial only for the purpose of sustaining the judgment in his favor, even on grounds not included in the decision of the court a quo nor raised in the appellant's assignment of errors or arguments." — This passage delineates the full extent of an appellee's permissible appellate participation, clarifying that counter-assignment of errors is allowed only to sustain, not to modify, the judgment.

• Medida vs. CA, G.R. No. 98334, May 8, 1992, 208 SCRA 887 — Controlling precedent directly quoted for the proposition that an appellee who has not appealed cannot obtain affirmative relief or assign errors designed to modify the judgment; the appellee's role is limited to sustaining the judgment on any grounds, including those not ruled upon by the trial court.

• Section 5, Rule 7, Rules of Court — The certification against forum shopping requirement, cited by MIAA as a ground for dismissal. The RTC sustained this ground in dismissing the Pasig case, but the CA reversed the forum shopping finding, holding that the Pasig and Manila cases involved distinct causes of action and issues. The provision is reproduced in a footnote in the decision.

Carpio (Chairperson), Brion, Del Castillo, and Perez, JJ., concurred.