JUANITO CHAN, PETITIONER, VS. GREGORIO B. MONTEJO, JUDGE, COURT OF FIRST INSTANCE, ZAM­BOANGA CITY; AND JESUS VDA. DE MURGA, RESPONDENTS.

Chan versus Montejo

The Case

This is Chan versus Montejo, an original petition for certiorari with preliminary injunction brought by Juanito Chan against Judge Gregorio B. Montejo of the Court of First Instance of Zamboanga City and against Jesusa Vda. de Murga. Chan asks the Supreme Court to undo the trial judge's order directing immediate execution of a municipal court judgment for ejectment, even though the case was still on appeal and had not yet been tried in the court of first instance. The case matters because it teaches when a landlord may be deemed to have waived the right to demand immediate execution under the Rule on ejectment — a doctrine every bar candidate must be able to state as a rule.

Procedural History

The private respondent, Jesusa Vda. de Murga, filed an action for unlawful detainer before the Municipal Court of Zamboanga City against Juanito Chan. After trial, the municipal judge rendered judgment in her favor, ordering Chan to vacate the lots, to pay monthly rental, attorney's fees, and costs. Chan appealed to the Court of First Instance of Zamboanga City and filed a supersedeas bond.

Before the case could be tried in the court of first instance, the plaintiff moved for execution of the municipal court judgment, claiming that Chan had failed to deposit the difference between the stipulated rental and the adjudged rental within the first ten days of each calendar month. The respondent judge granted the motion and ordered execution. Chan then came to the Supreme Court by an original petition for certiorari with preliminary injunction, and the Court granted the writ.

Facts

On March 19, 1959, Jesusa Vda. de Murga sued Juanito Chan for unlawful detainer before the Municipal Court of Zamboanga City, to recover possession of two parcels of land, lots 36 and 38 of the cadastral plan of Zamboanga City, which had been leased to Chan for a term of ten years from January 31, 1949, under a written contract of lease.

The dispute centered on clause 7 of the contract, which gave the lessor the option to purchase the buildings constructed by Chan, the price to be fixed by three commissioners, and provided that if she did not exercise the option, the lease would be automatically renewed, with the period and the rental to be adjusted again by the parties. On July 23, 1958, the plaintiff wrote Chan expressing her intention to renew at an increased rental of 700 pesos instead of 500 pesos. Chan replied that, due to poor business, he might not be able to consider the increase. On January 15, 1959, the parties met at the office of attorney Fernando Blanco to discuss the terms of a new lease, particularly the amount of rent, but they failed to agree. On January 19, 1959, the plaintiff again wrote Chan, waiving her option and offering a new rental of 100 pesos more than the prevailing rent without a contract, or 200 pesos more than the old rent with a five-year contract. Chan declined, and the plaintiff filed the ejectment case.

On February 12, 1964, the Municipal Judge rendered judgment in favor of the plaintiff, sentencing Chan to vacate and return possession of lots 36 and 38, to remove his improvements, to pay a monthly rental of 600 pesos from February 1, 1959 until he actually vacated, to pay 500 pesos in attorney's fees, and the costs. Chan appealed to the Court of First Instance and filed a supersedeas bond. On July 9, 1964, before trial, the plaintiff moved for execution, alleging that Chan had failed to deposit the 100-peso monthly difference within the first ten days of each calendar month. Chan had in fact paid the stipulated 500 pesos every month up to and including July 1964, and on July 10, 1964, he deposited the total difference of 600 pesos in court. The respondent judge nonetheless ordered execution, holding that the failure to deposit the adjudged rent in full was fatal and entitled the plaintiff to immediate execution.

Issues

• Whether or not the failure of the defendant to pay or deposit the 100-peso monthly difference from February to July 1964, although he had paid the stipulated 500 pesos every month for the same period, warranted the execution of the municipal court judgment as ordered by the respondent judge.
• Whether or not the plaintiff, by accepting the stipulated rental of 500 pesos every month without demanding the difference, had waived her right to demand payment of the full amount fixed in the judgment for the purpose of staying execution.

Applicable Provisions

Sections 8 and 9 of Rule 72 of the Rules of Court govern execution of judgments in ejectment cases. The Court refers to them as follows:

Sections 8 and 9 of Rule 72 of the Rules of Court, the landlord, in whose favor a decision for ejectment has been rendered by the court, is entitled to ask for the execution of the judgment if the tenant fails to pay or deposit, on or before the 10th day of each calendar month, the rent for the proceeding month, as determined in the decision, which requirement is mandatory.

These provisions are the source of the landlord's right to immediate execution, and the question is whether that right was waived by the landlord's conduct.

Ruling

On the first issue, the Court held that although the requirement to pay or deposit the rent fixed in the decision on or before the tenth day of each calendar month is mandatory, there is nothing to preclude the judgment creditor from waiving his right. The facts showed that, acceding to the defendant's plea, the plaintiff accepted the monthly stipulated rental of 500 pesos up to July 1964 without demanding the 100-peso difference. The Court said:

The conduct of the plaintiff implicitly constitutes an acceptance of the plea of the defendant to pay only the sum of P500.00 a month instead of P600.00 fixed in the judgment, otherwise, the plaintiff would have raised a voice of protest and would have asked the execution of the judgment immediately upon default.

On the second issue, the Court held that the plaintiff, by accepting the stipulated rental every month without demanding the difference, had waived the right to demand payment of the full amount fixed in the judgment for the purpose of staying execution. Since the defendant had deposited the 600 pesos on July 10, 1964, to cover the unpaid difference for the six months, the plaintiff suffered no material damage or prejudice. It was the defendant who would suffer irreparable damage should the buildings he had constructed, valued at no less than 70,000 pesos, be demolished. Under the special conditions of the case, the mantle of equity should be extended to the petitioner, who had acted in good faith.

Doctrine

The rule a bar candidate must retain is this: under Sections 8 and 9 of Rule 72 of the Rules of Court, the landlord in whose favor a judgment for ejectment has been rendered is entitled to immediate execution if the tenant fails to pay or deposit the rent fixed in the decision on or before the tenth day of each calendar month, and this requirement is mandatory. However, the right is not absolute; the judgment creditor may waive it, and such waiver may be implied from conduct — such as accepting the stipulated rental month after month without demanding the adjudged difference and without promptly moving for execution. Where the tenant has substantially complied and deposited the difference, and the landlord suffers no material prejudice, equity will stay execution, especially where the tenant would otherwise suffer irreparable damage.

Disposition

The Supreme Court granted the writ, set aside the order of the respondent judge, and made the preliminary injunction permanent, without costs. Juanito Chan won.

Remember This

The single line worth memorizing is that the mandatory right to immediate execution in ejectment may be waived by the landlord, and waiver may be inferred from his acceptance of the stipulated rental without demanding the adjudged difference. Examiners use this case to test the interplay of Rule 72 execution and the equitable doctrine of waiver by conduct.