1) Florentino v. Supervalue Inc. involves a dispute over the forfeiture of a security deposit when a lease agreement expired. The petitioner leased store space from the respondent.
2) Upon expiration of the lease, the respondent took possession of the petitioner's equipment and the security deposit of P192,000 without consent as stipulated in the lease agreement.
3) The Court of Appeals ruled that forfeiture of the security deposit was valid due to breach of contract by the petitioner. However, the Supreme Court found the full forfeiture of P192,000 to be excessive and reduced it to 50%, ordering the respondent to return half the amount to the petitioner.
1) Florentino v. Supervalue Inc. involves a dispute over the forfeiture of a security deposit when a lease agreement expired. The petitioner leased store space from the respondent.
2) Upon expiration of the lease, the respondent took possession of the petitioner's equipment and the security deposit of P192,000 without consent as stipulated in the lease agreement.
3) The Court of Appeals ruled that forfeiture of the security deposit was valid due to breach of contract by the petitioner. However, the Supreme Court found the full forfeiture of P192,000 to be excessive and reduced it to 50%, ordering the respondent to return half the amount to the petitioner.
1) Florentino v. Supervalue Inc. involves a dispute over the forfeiture of a security deposit when a lease agreement expired. The petitioner leased store space from the respondent.
2) Upon expiration of the lease, the respondent took possession of the petitioner's equipment and the security deposit of P192,000 without consent as stipulated in the lease agreement.
3) The Court of Appeals ruled that forfeiture of the security deposit was valid due to breach of contract by the petitioner. However, the Supreme Court found the full forfeiture of P192,000 to be excessive and reduced it to 50%, ordering the respondent to return half the amount to the petitioner.
Issue: Reduction by increasing price without her consent P20 to Courts P22 2. Petitioner frequently close stores earlier Doctrine: than mall closing time for delay of delivery A penal clause is an accessory undertaking to of stocks to her store assume greater liability in case of breach. In 2nd letter the respondent informed upon lease expiration on March 31 2000 no longer to Function: (1) to provide for liquidated damages, extend the lease agreement and (2) to strengthen the coercive force of the Upon expiration, Respondent also took obligation by the threat of greater responsibility possession of equipment and personal in the event of breach. belonging of Petitioner from SM store as well as security deposits of P192000 as provided in General Rule: courts are not at liberty to ignore Lease Agreement upon breach the freedoms of the parties to agree on such Petitioner filed case for Sum of Money and terms and conditions Damages; RTC ruled in favor of Petitioner that forfeiture of security deposit w/o consent is illegal however CA modified decision that the Exception: (1) if the principal obligation has been forfeiture of security deposit was valid on partly or irregularly complied with; and (2) even account of petitioner breach in agreement if there has been no compliance if the penalty is ISSUE: WON the penalty of forfeiture of security iniquitous or unconscionable (ART 1229) deposit on account of breach should be reduced by Court Ruling: YES Facts: 1. Question of whether a penalty is reasonable or Petitioner is engaged in the retail of iniquitous can be partly subjective and partly empanada; Respondent is engaged in the objective. Factors include: type, extent and leasing of stalls and stores within SM purpose of the penalty, the nature of the Parties entered into a lease Agreement with obligation, the mode of breach and its renewal upon agreement consequences, the supervening realities, the Respondent submits 2 letters to Petitioner first standing and relationship of the parties, and letter stating the latters failure to accord to the the like contract for: 2. Forfeiture of the entire amount of the security deposits in the sum of P192,000.00 was excessive and unconscionable considering that the gravity of the breaches committed by the respondent is therefore under the obligation to petitioner is not of such degree return the 50% of P192,000.00 to the 3. It is in the exercise of its sound discretion that petitioner. this court tempered the penalty to 50%. The