In a lease agreement, the lessee is generally responsible for any damage to the property unless they can prove it occurred without their fault. This case clarifies that if a fire starts in a leased property due to negligence, the lessee is liable for the damages, and the principle of res ipsa loquitur can be applied if the cause of the fire was under the lessee’s control.

From Coffee Percolator to Courtroom: Assigning Blame in a Rental Fire

College Assurance Plan (CAP) leased space from Belfranlt Development, Inc. A fire originated in CAP’s storeroom, and an investigation pointed to an overheated coffee percolator as the cause. Belfranlt sued CAP for damages, arguing negligence. The central legal question is whether CAP could be held liable for the fire damage, or if it qualified as a fortuitous event beyond their control.

The Regional Trial Court (RTC) found CAP liable, a decision affirmed with modifications by the Court of Appeals (CA). The Supreme Court upheld the CA’s ruling, emphasizing that under Article 1667 of the Civil Code, lessees are presumed responsible for any loss or deterioration of the leased property unless they prove the damage occurred without their fault. To be considered a fortuitous event, the event must be unforeseen, or if foreseen, inevitable, and the obligor must be free from any negligence.

In this case, the fire was not considered a fortuitous event because the lower courts found that it was caused by the negligence of CAP’s employees. The initial fire investigation and certification indicated that the fire originated from an overheated coffee percolator in CAP’s storeroom. The Supreme Court noted that the investigation report and certification were admissible, despite the challenge that the witness presenting them lacked direct knowledge. The Court clarified that these documents fell under the exception to the hearsay rule as entries in official records, as the investigating fire officer prepared the documents based on interviews with witnesses and within his official duties.

Furthermore, the Court emphasized that CAP used the fire certification to claim insurance for their damaged office equipment, which estopped them from later contesting its veracity. The Supreme Court highlighted the doctrine of res ipsa loquitur, which means “the thing speaks for itself,” as applicable in this case. The doctrine applies when (a) the accident is of a kind which does not ordinarily occur unless someone is negligent; (b) the cause of the injury was under the exclusive control of the person in charge; and (c) the injury suffered must not have been due to any voluntary action or contribution on the part of the person injured. In this case, the fire originated in an area under CAP’s exclusive control, and fires generally do not occur without negligence. Thus, the burden shifted to CAP to prove they were not negligent.

The Supreme Court quoted Article 1667 of the Civil Code, which states:

The lessee is responsible for the deterioration or loss of the thing leased, unless he proves that it took place without his fault. This burden of proof on the lessee does not apply when the destruction is due to earthquake, flood, storm or other natural calamity.

The Court also referenced Article 1174 of the Civil Code, defining a fortuitous event:

Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which, though foreseen, were inevitable.

Building on this principle, the Court examined whether the fire was a fortuitous event under the law. It reiterated the four elements that must be present for an event to be considered fortuitous:

1. The cause of the unforeseen and unexpected occurrence must be independent of human will.
2. It must be impossible to foresee the event or, if it could have been foreseen, to avoid it.
3. The occurrence must render it impossible for the obligor to fulfill its obligations in a normal manner.
4. The obligor must be free from any participation in the aggravation of the injury or loss.

The Court found that the fire did not meet the criteria of a fortuitous event because it originated from an overheated coffee percolator within CAP’s premises, indicating negligence. Because the fire was determined not to be fortuitous, CAP could not claim exemption from liability based on this defense. The court agreed with the CA that the fire was a result of negligence. Even without the initial fire investigation, the application of res ipsa loquitur was sufficient to infer negligence on the part of CAP.

The Court also upheld the CA’s award of temperate damages to Belfranlt Development, Inc. The CA had deleted the RTC’s award of actual damages for the cost of building repairs due to insufficient evidence. Temperate damages are awarded when some pecuniary loss has been suffered, but the amount cannot be proven with certainty. The Supreme Court deemed the P500,000 award of temperate damages reasonable, recognizing Belfranlt’s loss due to the fire damage, even if the precise amount was difficult to ascertain.

FAQs

What was the key issue in this case?	The key issue was whether the lessee (CAP) could be held liable for fire damage to the leased premises, or if the fire was a fortuitous event relieving them of liability. The court also considered the application of res ipsa loquitur.
What is the legal basis for holding a lessee responsible for damage?	Article 1667 of the Civil Code presumes the lessee’s responsibility for loss or deterioration of the leased property unless they prove it occurred without their fault.
What is a fortuitous event and how does it affect liability?	A fortuitous event is an unforeseen and unavoidable event, independent of human will. If damage results from a fortuitous event, the obligor is generally not liable, unless otherwise provided by law or contract.
What is the doctrine of res ipsa loquitur?	Res ipsa loquitur means “the thing speaks for itself.” It allows negligence to be inferred when the accident is of a kind that doesn’t ordinarily occur without negligence, the cause was under the defendant’s exclusive control, and the injury wasn’t due to the plaintiff’s actions.
Why was the fire in this case not considered a fortuitous event?	The fire was not considered a fortuitous event because it originated from an overheated coffee percolator in the lessee’s premises, indicating negligence, which means the fire was within their control.
What evidence supported the finding of negligence in this case?	Evidence included the fire investigation report identifying the coffee percolator as the cause, the location of the fire’s origin in the lessee’s storeroom, and the lessee’s use of the fire report to claim insurance.
What are temperate damages?	Temperate damages are awarded when some pecuniary loss is proven, but the exact amount cannot be determined with certainty. They are more than nominal but less than compensatory damages.
Why were temperate damages awarded in this case?	Temperate damages were awarded because the lessor suffered a loss due to the fire damage to the building, but the exact cost of repair could not be proven with certainty, so the lower courts deemed fit to award temperate damages.

This case emphasizes the importance of due diligence for lessees to prevent damage to leased properties. The ruling serves as a reminder that lessees are presumed responsible for damage unless they can prove it was caused by a truly unforeseen event, free from any negligence on their part. Moreover, the application of res ipsa loquitur puts an onus on lessees to provide a credible explanation when damage occurs in an area under their exclusive control.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: College Assurance Plan and Comprehensive Annuity Plan and Pension Corporation vs. Belfranlt Development Inc., G.R. No. 155604, November 22, 2007