De Jesus Mesina v. Court of Appeals
REITERATIONFacts
The Antecedents: A parcel of land located at 502 Quezon Boulevard, Quiapo, Manila, was verbally leased in the late 1800s. Clemente de Jesus, petitioners' predecessor-in-interest, leased the property and later bought the houses erected on it. His successors, Paz de Jesus Mesina and Peter de Jesus, continued to occupy the property, with Paz residing there since birth and Peter residing in one of the houses while the other is leased to tenants. The land was sold by the original owner to Susana Realty, Inc., and subsequently to Cetus Development Corporation (CETUS) in 1984. Procedural History: CETUS filed an ejectment complaint against Paz Mesina on February 14, 1986, alleging subleasing without consent. The Metropolitan Trial Court (MTC) dismissed the complaint, ruling that Paz was a successor-in-interest by operation of law and that BP 877, which prohibits subleasing, had no retroactive application to the lease established prior to its effectivity. The Regional Trial Court (RTC) affirmed the dismissal. In 1989, CETUS filed another ejectment suit against both Paz and Peter. The MTC ordered them to vacate, but the RTC reversed this, ordering dismissal. The Court of Appeals (CA) reversed the RTC and reinstated the MTC decision, leading to the present petition. The Petition: Petitioners Paz de Jesus Mesina and Peter de Jesus seek to set aside the CA decision, invoking res judicata and arguing that the inclusion of Peter as an additional party does not alter the identity of parties, and that the cause of action (subleasing) remains the same. They also contend that BP 877 cannot apply retroactively to their existing lease contract.
Issue(s)
Whether res judicata bars the second ejectment suit. Whether BP 877 can be applied retroactively to the lease contract and its subsequent renewals. Whether the subleasing of the premises constitutes a violation of the lease agreement and BP 877.
Ruling
The petition is dismissed for lack of merit. The decision of the Court of Appeals is affirmed.
Ratio Decidendi
On the issue of res judicata: The Court held that for res judicata to apply, there must be identity of parties, subject matter, and causes of action. While there was identity of parties with respect to Paz Mesina, Peter de Jesus was not a party in the first case, thus lacking identity of parties. More importantly, there was no identity of causes of action. The first case was based on a demand letter dated November 18, 1985, for subleasing prior to that date, while the second case was based on a demand letter dated July 12, 1989, for subleasing that occurred after November 18, 1985, and before July 12, 1989. Given that the lease contract was a verbal month-to-month lease, automatically renewed every thirty days, each thirty-day period constituted a separate and distinct lease contract. Therefore, a cause of action arising from one period was distinct from a cause of action arising from another period, negating the identity of causes of action required for res judicata. On the retroactive application of BP 877: The Court reiterated its ruling in Juarez v. Court of Appeals, stating that when a contract of lease is impliedly renewed after the effectivity of BP 877, the renewed lease becomes subject to the provisions of the statute. Any act of subleasing without the lessor's consent would be invalid under BP 877. The Court clarified that the impairment clause is not absolute and must yield to the State's police power when a contract affects public welfare. The Court emphasized that BP 877 aims to protect both landlords and tenants from mutual impositions and unconscionable practices, such as lessees subleasing premises for higher rentals, which prejudice lessors. The statute's purpose is to regulate and even prohibit such practices for the detriment of society as a whole. The Court rejected the argument that BP 877 is an ex post facto law, explaining that BP 877 is not penal in nature, even though it contains penal provisions. The petitioners were not being prosecuted under the penal provisions but were sued in a civil complaint for ejectment based on unlawful subleasing. Therefore, the law's application in a civil case for ejectment did not make it an ex post facto law. On the contention that the subleasing of the premises constitutes a violation of the lease agreement and BP 877: The Court held that when a contract of lease is impliedly renewed after the effectivity of BP 877, the renewed lease becomes subject to the provisions of the statute. Any act of subleasing without the lessor's consent would be invalid under BP 877.
Main Doctrine
A month-to-month lease contract, which is automatically renewed at the end of each thirty-day period, creates separate and distinct lease contracts for each period, thus, a cause of action based on one period is distinct from a cause of action based on another period, precluding the application of res judicata when the parties and causes of action are not identical in successive ejectment suits based on subleasing.