Gomez v. Fat
REITERATIONFacts
The Antecedents: Plaintiffs-appellees initiated two ejectment cases against the defendants-appellants, Dee Choy Pio Lee (G.R. No. L-93) and Ng Fat (G.R. No. L-94), lessees of houses in Manila. The ground for ejectment was the alleged breach of contract due to non-payment of monthly rentals. The defendants claimed their failure to pay from February 1945 was due to the plaintiffs' demand for increased rentals and the cessation of their collector's visits. Procedural History: The Court of First Instance of Manila, after a joint trial de novo on appeal from the municipal court, rendered judgment in favor of the plaintiffs, ordering the ejectment of the defendants. The defendants appealed this decision. The Petition: The defendants-appellants argued that their default was not willful or without justification, citing the plaintiffs' demand for higher rents and the plaintiffs' failure to send a collector, which was their usual practice. They also contended that subletting was not prohibited by their lease agreements.
Issue(s)
Whether the defendants' failure to pay rentals constituted a breach of contract justifying ejectment. Whether the plaintiffs' demand for increased rentals and their omission to send a collector excused the defendants' default. Whether the alleged admission of subtenants by appellant Ng Fat was a ground for ejectment. Whether the plaintiffs' termination of the lease contracts was valid.
Ruling
The Supreme Court reversed the judgment of the Court of First Instance, dismissing the complaints and ordering the plaintiffs to allow the defendants to withdraw any deposits made for overdue rents. The Court found the defendants' defense meritorious and their default not to be a ground for dispossession.
Ratio Decidendi
On whether the defendants' failure to pay rentals constituted a breach of contract justifying ejectment: The Court found the appellants' defense meritorious, stating it was improbable they would willingly lose their leaseholds during an acute house shortage by defaulting on payments. The Court noted that the defendants had regularly paid rentals until January 1945. The default was more likely due to the plaintiffs' demand for increased rentals (P50 instead of P32 for Dee Choy Pio Lee, and P80 instead of P37 for Ng Fat) and the plaintiffs' failure to send their collector. The Court of First Instance itself ordered Ng Fat to pay P37, not the P55 claimed by the plaintiffs, indicating a dispute over the agreed rental amount. Therefore, the default was not one that could serve as a ground for dispossessing them under Article 1569 of the Civil Code or Rule 72 of the Rules of Court. On whether the plaintiffs' demand for increased rentals and their omission to send a collector excused the defendants' default: The Court held that the alleged default could not give way to ejectment since it was attributable in part to the plaintiffs' omission or neglect to collect the rent. The Court cited Manalac vs. Garcia. There being no agreement on the place of payment, the domicile of the lessees was the place where rent should be paid, and the plaintiffs' admission of sometimes sending a collector but often not, supported the defendants' theory that it was the plaintiffs' practice to call for the rents. The plaintiffs' inability to send a collector was explained by the abnormal conditions in Manila in February 1945, and possibly because the plaintiffs were still in evacuation areas, evidenced by payments for prior months being made via postal money order, a facility not yet available in February 1945. On whether the alleged admission of subtenants by appellant Ng Fat was a ground for ejectment: The Court stated that in the absence of an express prohibition in the lease contract, a lessee may sublet the whole or any part of the leased premises, citing Article 1550 of the Civil Code. Therefore, Ng Fat's admission of subtenants, without any evidence of an express prohibition in the lease contract, did not constitute a valid ground for his ejectment. On whether the plaintiffs' termination of the lease contracts was valid: The Court ruled that the appellants' ejectment could not be based on the termination of the lease contracts by the plaintiffs, as this alleged termination was premised solely on the ground of appellants' default in paying rentals. Since the Court had already overruled the finding of default, the basis for the termination was invalidated. The Court also noted that there was nothing in the plaintiffs' evidence to suggest they were invoking any other cause for judicially dispossessing the appellants independently of the alleged non-payment of rents.
Main Doctrine
A lessee's default in paying rent, if attributable in part to the lessor's omission or neglect to collect, or if occasioned by the lessor's demand for increased rentals not agreed upon, does not constitute a breach of contract that justifies ejectment. Furthermore, subletting is permissible in the absence of an express prohibition in the lease contract.