MAXIMO ROXAS, ANGEL MANTES AND ARTURO DEL PRADO, PETITIONERS, VS. INTERMEDIATE APPELLATE COURT, CELESTINO PERNES, PAULINO TALLE (DECEASED) REPRESENTED BY ROSANNA TALLE, SPOUSES …

Roxas versus Intermediate Appellate Court

The Case

This is a petition for review brought by Maximo Roxas, Angel Mantes, and Arturo del Prado against the Intermediate Appellate Court and their tenants, among them Celestino Pernes and Paulino Talle, represented by Rosanna Talle. The petitioners are landowners in San Juan who filed separate complaints for ejectment against the occupants of their lots. The tenants, for their part, filed an action for consignation and specific performance, offering to pay rentals at five pesos a month. The case matters because it is the Supreme Court's clear statement on how the rent-control law, Batas Pambansa Blg. 25, governs ejectment: when it applies retroactively, when possession by a former tenant continues as a lease rather than as mere tolerance, and what the owner must show to repossess property for his own use or that of his immediate family.

Procedural History

The ejectment complaints were filed in the municipal court of San Juan, Rizal, in August 1980, and were consolidated with the tenants' complaint for consignation. The tenants moved to dismiss for lack of jurisdiction; the motion was denied. They then went to the Court of First Instance of Rizal on certiorari with a prayer for a writ of preliminary injunction; that petition was dismissed. They elevated the dismissal to the Supreme Court by petition for review on certiorari, and the Supreme Court dismissed it.

After a joint trial, the metropolitan trial court rendered judgment on July 3, 1984, ordering the tenants to vacate, to pay fifty pesos a month as reasonable value for the use of the lots from August 22, 1980 until they actually vacate, and to pay attorney's fees of one thousand five hundred pesos plus costs. The complaint for consignation was dismissed for insufficiency of evidence. The tenants appealed to the Regional Trial Court of Rizal, which on June 10, 1985 affirmed the appealed judgment in full, with costs against the tenants.

The tenants then filed a petition for review with the Intermediate Appellate Court. On March 31, 1986, that court reversed the judgment and dismissed the complaints, with costs against the petitioners. The petitioners' motion for reconsideration was denied on April 24, 1986. Hence this petition for review before the Supreme Court.

Facts

The lots in dispute were once part of a large parcel in San Juan owned by Saint Rita's College. The tenants, including Maximo Roxas, paid rentals to the college as lessees. In 1972 the college sold the land to B.F. Goodrich, Incorporated, which held it for about three years. During that period B.F. Goodrich neither collected rent nor entered into any lease agreement with the occupants, and the occupants paid nothing. Being a foreign company, B.F. Goodrich was forced by the Parity Act to sell, and on February 5, 1975 it sold the land to Roxanne Salem, who in turn eventually sold to the petitioners.

Of all the occupants, only Maximo Roxas was able to buy a portion, two hundred square meters under his title. After the lot was subdivided he discovered that about fourteen square meters of his lot were occupied by the houses of Talle and Pernes. As early as 1972 he had asked them to vacate because he needed the lot for his own use, and on April 25, 1980 he sent them a letter giving ninety days to vacate. Angel Mantes bought one hundred eight square meters, but the Guevarra spouses occupied a portion of it; he demanded that they vacate in 1977 and again by letter on April 25, 1980, which they ignored. Arturo del Prado's property of two hundred thirty-nine square meters was occupied by the Alpuerto, Francisco, Talle, and Pialan families.

The occupants filed a petition with the Human Settlement Regulatory Commission invoking a right of first refusal under the Urban Land Reform Decree, but it was not given due course because the property lay outside the priority areas. On August 29, 1980 the tenants filed their action for consignation and specific performance to compel the owners to accept rent. The trial court found that the tenants had paid no rentals from 1972 onward, and that their belated tender of five pesos a month came only after they were sued and after years of arrears.

Issues

• Whether or not Batas Pambansa Blg. 25, which excludes the sale of property as a ground for ejectment, applies to a sale executed seven years before its promulgation and to ejectment cases then pending.
• Whether or not the tenants' possession, after they stopped paying rentals to the subsequent owners, became possession by mere tolerance terminable at any time, rather than a lease continuing from the old owners to the new.
• Whether or not, to eject a tenant on the ground of personal use, both the owner and the immediate member of his family for whom the property is intended must not own any other residential unit.
• Whether or not the tenants' dilatory tactics and their failure to pay rentals pending litigation, and their subleasing of the premises without the owners' consent, justify ejectment.

Applicable Provisions

Section 5 of Batas Pambansa Blg. 25 provides:

Section 5. Grounds for Judicial Ejectment. — Ejectment shall be allowed on the following grounds: x x x c. Need of owner/lessor to repossess his property for his own use or for the use of any immediate member of his family as a residential unit, such owner or immediate member not being the owner of any other available residential unit: Provided, however, that the period of lease has expired; Provided, further, that the lessor has given the lessee notice three months in advance of lessor's intention to repossess the property: and Provided, finally, that the owner/lessor or immediate members stays in the residential unit for at least one year, except for justifiable cause.

This is the provision the Court construes, and it supplies the four requisites for ejectment on the ground of personal use that the Court applies to the petitioners' situation.

Ruling

On the first issue, the Court held that the retroactive application of Batas Pambansa Blg. 25 to pending ejectment cases is already settled and may no longer be questioned, citing its earlier ruling in Santos versus Court of Appeals. The sale having been made years before the law, the law still governs the ejectment, and sale is not a ground for ejectment.

On the second issue, the Court sustained the appellate court's finding that although the tenants failed to pay rentals to the subsequent owners, they remained tenants and their possession was not converted into one by mere tolerance. They may therefore be ejected only on the grounds provided by Batas Pambansa Blg. 25, since the rentals of the properties do not exceed three hundred pesos monthly.

On the third issue, the Court disagreed with the appellate court's reading of the law. The requirement is that the owner or the immediate member of his family is not the owner of any other available residential unit. The Court stressed that even if an owner owns another residential unit, if it is not available, as when it is occupied or not suitable for dwelling purposes, that is no obstacle to ejectment. On the evidence, Roxas occupies his own lot and owns no other property; Mantes needs his lot for an immediate member of his family and owns no other residential unit; and the same is true of del Prado. The Court also found that the tenants had transferred elsewhere and were subleasing the premises, a ground for ejectment under the law.

On the fourth issue, the Court held that the tenants' failure to pay rentals pending litigation, and their subleasing without the owners' consent, justified suspending the rules and ordering ejectment even if these were not the grounds originally invoked. It warned that the State's benign policy of aiding tenants must not be applied to the extent of oppressing landowners.

Doctrine

A Bar candidate should retain these rules. First, Batas Pambansa Blg. 25 applies retroactively to pending ejectment cases, and sale of the property is not a ground for ejectment. Second, a tenant who stops paying rent to a subsequent owner does not thereby become a possessor by mere tolerance; the lease continues, and ejectment lies only on the grounds fixed by law. Third, under Section 5(c), the owner or the immediate member of his family must not own any other available residential unit; an unavailable or unsuitable unit does not bar ejectment. Fourth, non-payment of rentals pending litigation and subleasing without the owner's consent are grounds on which the Court may order ejectment even if not originally pleaded.

Disposition

The petition was granted; the decision of the Intermediate Appellate Court and its denial of reconsideration were reversed and set aside, and the decision of the Regional Trial Court of Rizal was affirmed in full, with costs against the private respondents, the judgment being immediately executory.

Remember This

The one line to memorize: under Batas Pambansa Blg. 25, what disqualifies the owner is ownership of another available residential unit, not just any unit. Examiners use this case to test the retroactive application of the rent-control law, the requisites of ejectment for personal use, and the Court's power to order ejectment for non-payment and subleasing even when not pleaded.