Crisostomo v. Court of Appeals
REITERATIONFacts
The Antecedents: Felipe N. Crisostomo filed a complaint for ejectment against Exequiel Cruz and several others (private respondents) for occupying parcels of land owned by him. Crisostomo alleged he was the absolute registered owner of the land, evidenced by Transfer Certificate of Title No. 169446. He claimed the defendants occupied the land without any agreement or color of right. Procedural History: The Municipal Court of Pasig ordered the defendants to vacate and pay monthly rentals. The Court of First Instance affirmed this decision. The Court of Appeals modified the decision, upholding the defendants' right to occupy the land but requiring them to deposit accrued rentals, pending determination of the true owner in another case (Civil Case No. 9616-CFI). The Petition: Crisostomo filed a petition for certiorari, arguing the Court of Appeals erred in upholding the private respondents' right to occupy the land, citing Article 1676 of the New Civil Code, and acted with grave abuse of discretion. The Court of Appeals found that the defendants were occupants who had leased portions of the land from Dorotea Gonzales, the previous owner. Crisostomo admitted knowing of the defendants' occupancy when he purchased the land from Apolinario Castillo, who had acquired it from Gonzales. Civil Case No. 9616 sought to annul the sale to Castillo and the subsequent transfer to Crisostomo. While initially dismissed, the case was remanded and later dismissed again, leading to the cancellation of the lis pendens on Crisostomo's title, confirming his ownership. The core issue became whether Crisostomo, as the new owner, could eject the lessees.
Issue(s)
Whether the Court of Appeals erred in upholding the right of the private respondents to occupy the parcels of land. Whether the respondent Court of Appeals acted with grave abuse of discretion in holding that the private respondents have the right to occupy the subject premises.
Ruling
The petition is dismissed, and the decision of the Court of Appeals is affirmed. The private respondents, as lessees, have the right to occupy the parcels of land in question, subject to their deposit of accrued rentals. The right of the lessor to eject a lessee on the ground of expiration of lease is suspended by Presidential Decree No. 20 and Batas Pambansa Blg. 25 for residential units with monthly rentals not exceeding P300 and without a fixed lease period.
Ratio Decidendi
On the issue of whether the Court of Appeals erred in upholding the right of the private respondents to occupy the parcels of land: The Supreme Court sustained the Court of Appeals' conclusion. The Court noted that the private respondents' allegation of religiously paying monthly rentals to Dorotea Gonzales remained undisputed throughout the proceedings. Furthermore, the petitioner admitted that the defendants were already in possession of the premises at the time he bought the land. This admission, coupled with the undisputed fact of their occupancy, led the Court to conclude that the private respondents were lessees. The Court invoked Article 1676 of the New Civil Code, which states that a purchaser of a leased property must respect the lease if they know of its existence. Since Crisostomo admitted knowledge of the occupants' presence when he purchased the land, he was bound to respect their lease agreements, even if unrecorded. On the issue of whether the respondent Court of Appeals acted with grave abuse of discretion in holding that the private respondents have the right to occupy the subject premises: The Supreme Court found no grave abuse of discretion. The Court explained that while Crisostomo, as the new owner, could have initially ejected the lessees under Article 1687 of the Civil Code due to the month-to-month nature of the lease, subsequent legislation intervened. Presidential Decree No. 20 (October 12, 1972) and Batas Pambansa Blg. 25 (April 10, 1979) suspended the lessor's right to eject lessees of residential units on grounds of lease expiration. The private respondents qualified as lessees of a "residential unit" under these laws, as their rental was significantly below P300 per month and there was no fixed period for the lease. The Court emphasized that the right to eject based solely on the sale of the property to a third person is expressly prohibited by Batas Pambansa Blg. 25. The petitioner failed to allege or prove any other valid grounds for eviction under Article 1673 of the Civil Code or Section 5 of Batas Pambansa Blg. 25.
Main Doctrine
The purchaser of a piece of land under a lease not recorded in the Registry of Property may terminate the lease, save when there is a stipulation to the contrary in the contract of sale, or when the purchaser knows of the existence of the lease. Presidential Decree No. 20 and Batas Pambansa Blg. 25 suspend the lessor's right to eject lessees of residential units on grounds of expiration of lease, even if the lease is month-to-month, as long as the rental is P300 or less and the lease has no fixed period.