College Assurance Plan v. Belfranlt Development

Summary

This case involves the liability of lessees for fire damage to leased commercial premises. College Assurance Plan and Comprehensive Annuity Plans leased units in Belfranlt Building when fire destroyed portions including their third-floor offices. BFP investigation determined the fire originated from an overheated coffee percolator in lessees' stockroom. The building owner sued for rehabilitation costs and unpaid rentals. The Supreme Court applied Article 1667 of the Civil Code, which creates a presumption that lessees are liable for deterioration or loss of leased property unless they prove it occurred without their fault. The Court found lessees failed to establish the fire was a fortuitous event, instead finding negligence through res ipsa loquitur doctrine. The decision clarifies lessees' burden to prove non-negligence and the application of temperate damages when exact losses cannot be quantified, awarding P500,000 plus unpaid rentals.