Guevara Realty, Inc. v. The Honorable Court of Appeals
REITERATIONFacts
The Antecedents: Guevara Realty, Inc. (Guevara) filed an ejectment case against Ma Kong for non-payment of rentals for a building located at 1104-6 Misericordia Street, Sta. Cruz, Manila. The City Court of Manila, in its decision dated December 1, 1980, ordered Ma Kong to vacate the premises and pay P6,000.00 as monthly rental. This decision became final and executory. Procedural History: A writ of execution was issued on April 1, 1981. On April 18, 1981, the occupants of the building, who were sub-lessees of Ma Kong, filed a prohibition action with the Court of First Instance (CFI) of Manila to enjoin the execution of the judgment. The CFI dismissed their petition on July 15, 1981. The sheriff ejected the occupants on July 18, 1981. Instead of appealing the CFI's dismissal order, the sub-lessees filed a petition for certiorari with the Court of Appeals (CA) on July 18, 1981, seeking to enjoin the enforcement of the city court's writ of execution. The CA issued a resolution on July 20, 1981, restraining the enforcement of the ejectment order. The Petition: Guevara Realty, Inc. filed a petition for certiorari and prohibition with the Supreme Court, seeking to restrain the CA from enforcing its resolution of July 20, 1981. The Supreme Court issued a restraining order, enjoining the CA from further proceeding and enforcing its resolution.
Issue(s)
Whether or not sub-lessees are bound by a judgment rendered against the lessee in an ejectment case, despite not being made parties thereto. Whether the Court of Appeals has jurisdiction to entertain a petition for certiorari directed against a writ of execution from a city court's decision in an ejectment case, which is not appealable to the Court of Appeals. Whether Presidential Decree No. 20 and Batas Pambansa Blg. 25 are applicable to the lease agreement.
Ruling
The Supreme Court GRANTED the petition, SET ASIDE the questioned Resolution of the Court of Appeals, and made the earlier issued Restraining Order permanent. The sub-lessees are bound by the judgment rendered against the lessee in the ejectment case.
Ratio Decidendi
On the issue of whether sub-lessees are bound by the judgment against the lessee: The Court ruled in the affirmative. It held that sub-lessees derive their right to possession from the lessee. Consequently, when the lessee is ejected by virtue of a final and executory judgment, the sub-lessees' right to possess the premises is also extinguished. To rule otherwise would allow the lessee to defeat the judgment through the mere device of subleasing the premises. The Court cited the principle that "a judgment of eviction against a lessee affects his sub-lessee, even if the latter are not sued in the ejectment case." The sub-lessees can only demand reparation for damages from their sublessor if the latter is at fault, as their right of possession depends entirely upon that of the sublessor. On the jurisdiction of the Court of Appeals: The Court found that the petition for certiorari filed by the sub-lessees with the Court of Appeals was primarily directed against the writ of execution issued by the city court. Since the decision of the city court in an ejectment case is not appealable to the Court of Appeals, the CA has no jurisdiction to entertain the petition for certiorari, as it can only issue such writ in aid of its appellate jurisdiction. The sub-lessees' recourse should have been to appeal the dismissal order of the CFI, not to file a certiorari with the CA. On the applicability of PD 20 and BP 25: The Court affirmed the ruling of the city court and the CFI that PD 20 and BP 25 are not applicable to the lease agreement. The City Court had already ruled that the lease was for commercial purposes, and therefore, not covered by these decrees. Since the sublease did not alter the nature of the original lease, the Court found no reason to disturb the findings of the lower courts on this matter. The Court reiterated that it must respect the findings of the City Court in the absence of any showing that it lacked jurisdiction.
Main Doctrine
Sub-lessees are bound by a judgment rendered against the lessee in an ejectment case, even if they were not made parties thereto, because their right to possession is derived from the lessee and is extinguished upon the ouster of the lessee.