Cetus Development, Inc. v. Court of Appeals
REITERATIONFacts
1. The Antecedents: Private respondents were month-to-month lessees of premises owned by Susana Realty. Following the sale of the property to petitioner Cetus Development, Inc., the lessees continued paying rent to petitioner's collector for a period. However, from July to September 1984, no collector appeared, and the lessees did not pay their rent, believing they were awaiting instructions on where to remit payment. Petitioner subsequently sent demand letters for back rent and to vacate. 2. Procedural History: Upon receipt of the demand letters, the private respondents paid the arrearages, which petitioner accepted with a reservation to file an ejectment suit. When the respondents did not vacate, petitioner filed six separate ejectment cases. The Metropolitan Trial Court dismissed these cases, finding no cause of action as the back rentals were paid before the suits were filed and citing equity. The Regional Trial Court affirmed this dismissal on appeal. The Court of Appeals, in turn, dismissed petitioner's petition for review, upholding the lower courts' findings that no cause of action for unlawful detainer had accrued. 3. The Petition: Petitioner seeks review on certiorari of the Court of Appeals' decision, arguing that the appellate court committed grave abuse of discretion by holding that no cause of action for unlawful detainer existed. Petitioner contends that the demand letters, which included a demand to vacate, created a cause of action, and that the subsequent acceptance of back rent, even with a reservation, did not extinguish this cause. Petitioner asserts that the lower courts erred in dismissing the ejectment complaints despite the existence of valid grounds for judicial ejectment and in suggesting the cases circumvent rent control laws.
Issue(s)
Whether the Court of Appeals committed a grave abuse of discretion amounting to lack of jurisdiction in holding that the cause of action for unlawful detainer did not exist when the complaints were filed, due to the tender and acceptance of payment of back rentals within the 15-day period from receipt of demand letters. Whether the Court of Appeals committed a grave abuse of discretion amounting to lack of jurisdiction in affirming the dismissal of the complaints notwithstanding the existence of valid grounds for judicial ejectment. Whether the Court of Appeals committed a grave abuse of discretion amounting to lack of jurisdiction in holding that these cases are classic examples to circumvent the rent control law.
Ruling
The petition is denied for lack of merit, and the decision of the Court of Appeals is affirmed.
Ratio Decidendi
On the existence of a cause of action for unlawful detainer, the nature of the demand under Section 2, Rule 70, the effect of accepting back rentals, the lessor's obligation to send a collector, and the applicability of Article 1256 (consignation): The Court held that for an unlawful detainer suit based on failure to pay rent, two requisites must concur: (1) failure to pay rent or comply with lease conditions, and (2) a demand both to pay/comply and to vacate within the periods specified in Section 2, Rule 70. The demand required under Section 2, Rule 70, is a jurisdictional requirement for bringing an unlawful detainer suit. In this case, the private respondents' failure to pay rent for three consecutive months was due to the petitioner's omission in sending a collector, a practice previously established. The Court found no evidence that petitioner demanded payment when the obligation matured. Therefore, the private respondents were not in mora solvendi. When petitioner demanded payment of the arrearages and private respondents promptly paid, no cause of action for ejectment accrued, rendering the demand to vacate premature. The acceptance of back rentals, even if made "without prejudice," does not preserve a cause of action that has not yet accrued. The Court clarified that the demand contemplated in Section 2, Rule 70, is a jurisdictional prerequisite for filing an unlawful detainer suit. This demand can be either a demand to pay rent or comply with lease conditions, or a demand to pay/comply and to vacate, depending on whether the lessor seeks rescission of the lease. In cases where rescission is the option, both demands to pay rent and to vacate are necessary to make a lessee a deforciant. The Court emphasized that the failure to pay rent after a demand is made, and within the specified period, is what entitles the lessor to bring an action for ejectment. The demand is not merely a demand to vacate but a demand for the tenant to fulfill their obligation. The Court reiterated that while acceptance of tendered payment does not automatically constitute a waiver of the cause of action for ejectment, especially when accepted "without prejudice," this principle applies only when a cause of action has already accrued. In the present case, no cause of action had accrued because the delay in payment was not imputable to the lessees, and they promptly paid upon demand. Therefore, the acceptance of back rentals did not validate a premature demand to vacate. While a lessor is not strictly obligated to send a collector under Article 1654 of the Civil Code, the established custom of paying through a collector and the provision of Article 1257 (place of payment at the debtor's domicile in the absence of agreement) were considered. The Court found that the delay in payment was attributable to the petitioner's omission, not the lessees' fault. Thus, the lessees could not be considered in default. The Court distinguished this case from situations where Article 1256 applies. There was no unjustified refusal by the petitioner to accept rentals that would constitute mora accipiendi and warrant consignation. Instead, there was simply a lack of demand for payment of rentals by the petitioner. The Court of Appeals did not commit a grave abuse of discretion amounting to lack of jurisdiction in affirming the dismissal of the complaints notwithstanding the existence of valid grounds for judicial ejectment. The Court of Appeals did not commit a grave abuse of discretion amounting to lack of jurisdiction in holding that these cases are classic examples to circumvent the rent control law.
Main Doctrine
For an unlawful detainer suit based on failure to pay rent to prosper, two requisites must concur: (1) there must be failure to pay rent or comply with lease conditions, and (2) there must be a demand both to pay/comply and to vacate within the periods specified in Section 2, Rule 70. Acceptance of back rentals after demand, even if made without prejudice, extinguishes the cause of action if no prior demand to pay and vacate was made or if the delay in payment was not imputable to the lessee.