YU PHI KHIM, UY EK CHIONG AND TENG TECK, PETITIONERS, VS. RAFAEL AMPARO, JUDGE OF THE COURT OF FIRST INSTANCE OF MANILA, THE SHERIFF OF MANILA, VICENTA P. VDA. DE LIM AND ISABEL…

Under a “Lease Agreement”, annex A, in July, 1947, Yu Phi Khim, Uy
Ek Chiong, and Teng Teck, as lessees, occupied a lot with an area of
approximately 550 square meters at 809, 811, 813 Ilaya street,
identified as block No. 2705, lot No. 2 in the district of Tondo,
Manila, belonging to Vicenta P. Vda. de Llm and Isabelo P. Lim, as
lessors. On April 16, 1948, the lessors filed with the Municipal Court
of Manila a second amended complaint for detainer and ejectment asking
that the lessees vacate the premises and turn them over to the
possession of the lessors. Judgment was rendered in favor of the
lessors ordering the lessees to vacate the premises and to pay P1,200
to the lessors monthly as rentals beginning July 1, 1947, up to the
time they finally vacated the place, with costs. The lessees appealed
the case to the Court of First Instance where upon their failure to
deposit the corresponding rent for the month of May, 19^8, having made
said deposit eleven (11) days after the date fixed by the law, on
motion of the lessors-plaintiffs, said Court of First Instance issued
an order of execution, Annex F, to enforce the judgment of the
Municipal Court, A motion for reconsideration of said order was
subsequently denied by the same court. Lessees as petitioners have
filed the present petition for eertiorari with preliminary injunction
to this Court seeking to annul the order for the execution of the
judgment of the Municipal Court on the ground that said court acted in
excess of or with abuse of its discretion.

If this were an ordinary case for detainer or ejectment pending
appeal in the Court of First instance where an order for the execution
of judgment is issued due to failure of the appellant to make the
monthly deposits of the rent, under the facts already stated, a
petition for certiorari would summarily be denied on the ground that
the law is clear and this court has repeatedly interpreted it to be
that the legal provisions requiring the deposit of monthly rentals
within a certain period pending appeal, are mandatory, and that failure
to comply with them, vested in the appellate court the duty to enforce
judgment upon petition of the appellee.

However, the present case is not so simple and the facts are rather
involved. We shall state those which we deem necessary for an
intelligent appraisal and comprehension of the case. As already stated,
in July, 1947, the parties entered into a contract or agreement of
lease. The most important provisions of the lease agreement are the
following: The term of the lease of the lot in question was five (5)
years from July 1, 1947; the rental was P1,200 monthly, payable in
advance within the first five days of each and every month, and that
overdue rentals shall earn interest at the rate of 1 per cent per month
from the first of the respective months to date of payment; the lessees
were to construct on the lot a two-story building,—the ground floor to
be of brick and/or adobe stone and the upper floor of timber under
galvanized roofing, which building will have to be insured in a sum not
less than P50,000 while building is under construction and after its
termination and during the lifetime of the lease, the proceeds of the
insurance policy in case of destruction to be applied to the
reconstruction of the building or the construction of a new one of the
same kind; the lessees will not sub-lease the premises or any portion
thereof without the written consent of the lessors first secured, and
finally, that any and all buildings as well as other improvements
erected, constructed or placed on the premises, shall at the
termination of the lease, become the exclusive property of the lessors
without any obligation, on their part to indemnify the lessees. The
lessees claim that the building they constructed on the premises cost
them at least P75,000. This would appear to be a reasonable estimate
considering the fact as already stated, that one of the terms of the
lease contract was for its insurance at an amount not less than
P50,000.00.

After a careful consideration of this case, all the members of this
Court who are taking part are agreed that the petition for certiorari
should be granted, altho they differ as to the reason or reasons for
granting the same. Some members hold the view that inasmuch as
according to the terms of the lease, the building belonging to the
lessees, constructed on the lot, will not become the property of the
lessors until the termination of the lease in July, 1952, and
considering that in the original action brought in the Municipal Court
in 1948, the lessors demanded as relief that the lessees vacate the
premises and turn them over to the lessors, the result would be
prematurely depriving the lessees of their right and interest in the
building. In other words, the said action may well be regarded as one
involving title to or interest in real property or real estate,
cognizable only by a Court of First Instance. Under this view, the
Municipal Court had no jurisdiction over the case; neither had the
Court of First Instance appellate jurisdiction to entertain the appeal,
consequently, all proceedings in said Court of First Instance,
including the order of execution of the judgment are all null and void
and therefore, the writ of certiorari should be granted because of the
trial court’s lack of jurisdiction.

Other members of the Court, however, are of the belief that the
action in the Municipal Court had for its purpose not the forfeiture of
the building by the lessees in favor of the lessors but the removal of
said building and the restoration of the lot in its former status and
condition to the lessors in which case, it would be a simple case of
detainer or ejectment with the result that both the Municipal Court and
the Court of First Instance had original and appellate Jurisdiction,
respectively. Under the second view, the lessors-appellees were
perfectly warranted in asking for execution of the judgment appealed
from due to the failure of the appellants to make the deposit of the
monthly rent on time. The remaining question to be decided is whether
the appellants had any valid defense to the petition for execution.

The defense of appellants-petitioners interposed not only before us
but also before the Court of First Instance, was that their failure to
make deposit on time was due to a mistake; that they were under the
belief that belated or delayed deposits were permissible as long as
they paid interest pursuant to the provisions of the lease agreement
already mentioned, to the effect that overdue rentals were to earn
interest at the rate of 1 per cent per month. In support of this
defense, petitioners in their printed brief state that the rental for
the period from January to June, 1948, inclusive amounting to P7,200
which should have been paid in advance was delayed, and that for such
delay, the sum of P36 as interest was paid to and received on behalf of
the lessors. That agreement or arrangement was of course applicable
only to the regular, extra-judiclal payment of rentals during the life
of the lease. It cannot apply to the deposit in court of rentals
pending appeal, for as already mentioned, the provisions of law
regarding this point, are clear and explicit, and without regard to the
agreement of the parties as regards ordinary payment of rentals.

However, we are willing to believe that the lessees-appellants
committed an honest mistake and were led into believing that because of
the terms of the lease agreement, they were also allowed to make
belated deposits of rents in court provided that they paid the
corresponding interest.

Moreover, it is hardly reasonable to say that the appellants would
be negligent in making the deposit in court of the rental for the month
of May, knowing that by such neglect, and under one view entertained by
some members of the Court, they were going to lose not only the
possession of the lot but also that of their new seventy-five thousand
peso building, including title thereto; or, under the other view, that
they (appellants) would be ordered to tear the building down and remove
the materials, both of which alternatives would be extremely onerous.
Besides, the loss of the building in favor of the appellees would be
equivalent to a forfeiture, and forfeitures are not favored either in
law or in equity. A forfeiture cannot be had on grounds other than
those specified in the contract (17 C.J.S., section 407, pp. 894,
896). Under the contract of lease, the only ground for forfeiture of
the building or construction in favor of the lessors is provided for in
paragraph 6 of said agreement which reads as follows:

“6. It is also agreed that if after lessees shall
have started construction on the leased premises, lessees should decide
not to continue the construction, or if for any reason the construction
is abandoned for a period of one month, then all improvements,
including materials, placed or erected on the leased premises shall
also become the exclusive property of lessors, without any obligation
on lessors’ part to pay lessees for such improvements and materials,
and shall entitle lessors to rescind this agreement.”

The contingency envisaged in the above quoted paragraph never took place.

Furthermore, it has been held by this Court that applying the provisions of Rule 38 of the Rules of Court (Bantug vs. Roxas, 40, Off.Gaz., 276-277; Zamora vs. Dinglasan, 43 Off.Gaz,. 1627; and Cunanan et al. vs.
Rodas, 44 Off.Gaz., 4927) that delayed deposits in court of monthly
rents may be excused if due to fraud, error or excusable negligence.
Under this doctrine, the motion for execution of Judgment should have
been denied by the trial court.

In conclusion, we hold that whether we look at the action
originally brought in the Municipal Court, as involving not only
ejectment, but also title to and interest in real property consisting
of the P75,000 building on the lot in question in which case, the
Municipal Court and the Court of First Instance had no original and
appellate jurisdiction, respectively, or whether we view it as a simple
suit for ejectment in which case, the respondent court had jurisdiction
but abused it in ordering execution of the judgment pending appeal
because the appellants were eleven days delayed in making the deposit
of the rent for one month, due to a mistake or error, we have to
reverse as we hereby reverse the order of execution of judgment, annex
F. Petition for certiorari, granted, with costs. So ordered.

Ozaeta, Pablo, Bengzon, Tuason, and Reyes, JJ., concur.

OZAETA, J.:

Mr. Justice Moran, Mr. Justice Paras and Mr. Justice Padilla voted for the granting of the petition.