Pagurayan v. Soriano
REITERATIONFacts
The Antecedents: This case originated from a complaint for specific performance and damages filed in 1974 by respondent Leonardo T. Reyes against the Soriano family. A decision in favor of Reyes led to the levy and auction sale of three parcels of land owned by the Sorianos. Reyes emerged as the sole and highest bidder, and after the redemption period expired without the Sorianos exercising their right, a deed of absolute sale was issued to Reyes. The Sorianos later filed a complaint challenging the validity of the auction sale, but this was ultimately affirmed by the Court of Appeals and the Supreme Court, becoming final in 1992. Procedural History: Following the finality of the judgment upholding the sale, Reyes sought and obtained a writ of possession from the Regional Trial Court (RTC), ordering the occupants of the lots to pay rentals to him. When the petitioners, who were occupants and lessees of the Sorianos, refused to vacate and remove their improvements, a writ of demolition was issued. The petitioners attempted to intervene and quash the demolition writ, but the RTC denied their motion, ruling that as lessees of the judgment debtors, their rights ceased with the termination of the Sorianos' rights. This denial led to an alias writ of demolition. The petitioners then filed a petition for certiorari with the Court of Appeals (CA) assailing the RTC's resolution and the alias writ of demolition. The CA initially issued a temporary restraining order and later a writ of preliminary injunction, which was upheld by the Supreme Court. However, the CA ultimately rendered a decision denying the petition for certiorari and a subsequent motion for reconsideration. The Petition: Petitioners, representing themselves and other tenants and occupants of the disputed lots, filed this petition for review on certiorari under Rule 45 of the Rules of Court, assailing the decision and resolution of the Court of Appeals. They contend that they had established a lessor-lessee relationship with respondent Reyes, evidenced by their payment of rentals to him since 1992 and a letter from Reyes' counsel directing them to pay rent to Reyes as the lawful owner. They argue that if such a relationship existed, they could not be ejected through mere writs of execution and demolition. The core issue presented to the Supreme Court is whether the petitioners were mere agents of the Sorianos or lessees of respondent Reyes, and consequently, whether the writs of demolition could be enforced against them.
Issue(s)
Whether petitioners established a lessor-lessee relationship with respondent Reyes. Whether petitioners, as lessees of the judgment debtors, are bound by the writs of possession and demolition issued against the judgment debtors.
Ruling
The petition is devoid of merit. The Supreme Court denied the petition and affirmed the decision of the Court of Appeals.
Ratio Decidendi
On the issue of whether petitioners established a lessor-lessee relationship with respondent Reyes: The Court held that a contract of lease is a consensual, bilateral, onerous, and commutative contract perfected by the meeting of the minds on the thing and the cause or consideration. Without the agreement of both parties, no contract of lease can be created. Respondent Reyes maintained that he never entered into a contract of lease with petitioners. The Court agreed with Reyes, stating that his acceptance of rentals from petitioners did not create a lease contract. Under the old Rules of Court, Section 34, Rule 39, Reyes, as the purchaser in the execution sale, was allowed to receive rentals if the purchased properties were occupied by tenants. Furthermore, as the owner of the properties after the expiration of the redemption period, he was entitled to their fruits. The Court emphasized that nobody can force an owner to lease out his property if he is not willing, and Reyes' acceptance of rentals was merely an exercise of his right as the owner to receive the fruits of his property, not an act of establishing a lease agreement. On the issue of whether petitioners, as lessees of the judgment debtors, are bound by the writs of possession and demolition issued against the judgment debtors: The Court ruled that petitioners never held the properties adversely to the judgment debtors, the Sorianos; in fact, they derived their rights from the Sorianos. Since petitioners were the lessees of the judgment debtors against whom the writs of possession and demolition could unquestionably be enforced, the said writs could and can be enforced against them as well. Their status as lessees of the judgment debtors meant that their right of occupancy was subordinate to the rights of the judgment creditors who had acquired ownership of the property through the execution sale. The RTC's denial of their motion to intervene and quash the writ of demolition was therefore correct, as their rights as lessees of the judgment debtors had ceased with the finality of the judgment against the Sorianos and the subsequent transfer of ownership to Reyes.
Main Doctrine
Acceptance of rentals by the purchaser of property in an execution sale does not automatically create a lessor-lessee relationship, as the purchaser is entitled to the fruits of the property as the lawful owner thereof, especially after the redemption period has expired. Lessees of the judgment debtors are bound by writs of possession and demolition issued against their lessors.