Hbc v. George P. Partoza

Summary

HBC, Inc. unjustifiably pre-terminated a 5-year parking space lease with George P. Partoza in July 2008, claiming government clearing operations made parking impossible. However, HBC's own leasing officer testified that parking remained viable after the operations, and DPWH confirmed no expropriation was planned. The Supreme Court affirmed the Court of Appeals, ruling this constituted bad faith breach of contract under Civil Code provisions. The Court awarded Partoza P647,316 in unpaid rent for the unexpired lease period, plus P75,000 moral damages for HBC's dishonesty, P75,000 exemplary damages for public good, and P50,000 attorney's fees. The decision reinforces contractual sanctity and good faith performance obligations, establishing that lessees cannot arbitrarily terminate definite-period leases without justification, and that bad faith breaches warrant both compensatory and punitive damages.