BERNABE MIRASOL, PLAINTIFF-APPELLANT, VS. ANTONIO MAGSUCI, BIBIANO LAYGO AND CRISANTA NATAL, DEFENDANTS-APPELLEES.

Mirasol versus Magsuci

The Case

This is an action for unlawful detainer, with a prayer for damages, brought by Bernabe Mirasol against Antonio Magsuci, Bibiano Laygo, and Crisanta Natal. Mirasol bought an undivided two-fifths share of a registered lot in Iloilo City from the heirs of Jose Miraflores, and he later claimed the right to collect the rentals from the tenants already occupying that share. When the tenants refused to pay him and refused to leave, he sued to eject them. The case matters because it settles two working rules every practitioner must know: that a purchaser of leased property steps into the shoes of the original lessor once he gives notice to the lessee, and that a lessee who refuses to pay the new owner may be evicted. It also teaches how an unsegregated co-owner's share is treated when the tenants' right of occupancy is confined to that very share.

Procedural History

Mirasol filed his complaint for unlawful detainer with the Municipal Court of Iloilo. After trial, the municipal court rendered judgment for the plaintiff, ordering the defendants to vacate the premises and to pay for the use and occupation of the same. The defendants appealed to the Court of First Instance of Iloilo, which reversed the municipal court and dismissed the complaint. Mirasol then perfected an appeal, stating in his notice of appeal that he was appealing to the Supreme Court. Somehow, however, the records were transmitted to the Court of Appeals. That court, noting the discrepancy, certified the case to the Supreme Court, which accepted it. The case thus reached the Supreme Court on appeal from the Court of First Instance, through the certification of the Court of Appeals.

Facts

The land in dispute is a two thousand two hundred eighty-six square meter lot in the District of Manduriao, Iloilo City, registered under the names of Jose and Asuncion Miraflores, brother and sister, both deceased, for two-fifths and three-fifths shares respectively. Until the filing of this case, the shares of the co-owners were still unsegregated.

On June 15, 1955, the heirs of Jose Miraflores, namely Desiderio, Leticia, and Josefina, all surnamed Miraflores, conveyed in absolute sale to Bernabe Mirasol their two-fifths share in the lot. A day later, the same children, this time as devisees and legatees of their aunt Asuncion Miraflores, entered into a contract to sell Asuncion's share to the same Mirasol, on condition that he would advance the expenses for the probate of Asuncion's will. On September 15, 1955, Desiderio Miraflores wrote to Mirasol advising him of the rescission of that contract to sell because of his failure to pay the expenses of the probate proceedings.

Earlier, on February 6, 1951, the heirs of Jose Miraflores, through their attorney-in-fact Jose Mesa, had leased their two-fifths share to the defendants. Only the agreement with Antonio Magsuci was reduced to writing, for three years and renewable for another two, and the option was exercised so that the lease ran to February 6, 1956. The other two defendants merely arranged with Jose Mesa to stay on the premises for five pesos a month. In both the original and renewed contracts, the parties agreed that the leased portion would be used to put up a gasoline station. On August 9, 1955, Mirasol wrote to Magsuci asking that the rentals be paid to him or his lawyer, since he had bought the property from Magsuci's lessors. On August 22, 1955, Magsuci rejected the request on the ground that he had no agreement, verbal or written, with Mirasol. Later, all three defendants were served letters of demand to vacate, and when they refused, Mirasol filed this case. On March 23, 1956, Jose Mesa renewed the agreement with Magsuci for another three years, until February 6, 1959, an agreement Mirasol assails as void because the property had already been sold to him.

Issues

• Whether or not the unsegregated character of the two-fifths share, and the unsettled ownership of the remaining three-fifths, bars the action for unlawful detainer.
• Whether or not the defendants, as lessees, were obliged to pay their rentals to Mirasol as the new owner after his notice to them, and may be evicted upon their refusal.
• Whether or not the agreement of March 23, 1956 extending the lease to 1959 is null and void.
• Whether or not the increased rentals demanded by Mirasol may be allowed, and from what date.

Applicable Provisions

Article 1687 of the Civil Code, on leases without a fixed period, provides:

If the period for the lease has not been fixed, it is understood to be from year to year, if the rent agreed upon is annual, from month to month, if it is monthly, and from day to day, if it is daily.

The Court cites this provision to treat the informal month-to-month arrangement of Bibiano Laygo and Crisanta Natal, which fixes the date from which the increased rent may run against them.

Ruling

On the first issue, the Court ruled for Mirasol. The portion leased to the defendants and from which they are sought to be ejected is the very same two-fifths portion sold in absolute sale to him. It is therefore immaterial that the share is unsegregated and that ownership of the remaining three-fifths is unsettled, because the defendants' right to stay is confined and limited to the two-fifths pertaining to Mirasol. Wherever that share may ultimately be designated, there and there only could the gasoline station have been built. There need be no positive proof that the station sits on the two-fifths share, for it could not lawfully have been constructed elsewhere.

On the second issue, the Court held that upon the purchase of leased property, and proper notice by the vendee to the lessee, the lessee must pay the agreed rental to the new owner, since the sale places the vendee into the shoes of the original lessor. When the defendants refused to pay notwithstanding notice, Mirasol became entitled to evict them and to recover the unpaid rent. The Court noted that the defendants had no ground to doubt his claim, since the notice, though signed by his counsel, bore his signature and the conformity of Desiderio Miraflores for himself and his sisters.

On the third issue, the Court held the March 23, 1956 agreement null and void. The sale to Mirasol took place on June 15, 1955, and notice was given in August 1955. By March 23, 1956, Jose Mesa was merely the attorney-in-fact of the Mirafloreses, who were no longer the owners, so he had no authority to contract over the property, and Magsuci had actual notice of all this.

On the fourth issue, the Court held that the increase in rent demanded from Magsuci should run only from February 6, 1956, when the original lease, as extended by the option, expired; before that date the rent is at the rate stipulated in the original contract. For Laygo and Natal, the rent of ten pesos a month, as demanded in the letters of April 14, 1956, may start from their receipt of those letters, since they had no formal contract and their arrangement with Jose Mesa was on a month-to-month basis under Article 1687 of the Civil Code.

Doctrine

First, a purchaser of leased property steps into the shoes of the original lessor, and upon proper notice by the vendee to the lessee, the latter must pay the agreed rental to the new owner; refusal entitles the new owner to evict the lessees and recover the unpaid rent. Second, the unsegregated character of a co-owner's share does not defeat ejectment where the tenants' right of occupancy is confined to that very share, for the tenants could not lawfully have built elsewhere. Third, a lease extension executed by the former owner's attorney-in-fact after the property has been sold and notice given is null and void, the attorney-in-fact having no authority to contract over property no longer owned by his principal. Fourth, for a lease without a fixed period, the period is from month to month if the rent is monthly, as Article 1687 of the Civil Code provides, and any increased rent runs only from receipt of the demand.

Disposition

The Supreme Court reversed the decision of the Court of First Instance, directed the defendants to vacate the premises, and ordered them to pay the appellant the rentals specified, up to actual recovery of possession, plus legal interest from the filing of the complaint and costs.

Remember This

The single line to memorize: upon sale of leased property and notice to the lessee, the buyer steps into the lessor's shoes, and refusal to pay him justifies eviction. Examiners use this case for the rights of a purchaser of leased property and for the rule that a lessee cannot deny his lessor's title at the time the lease was made.