G.R. No. L-3729 April 28, 1952
E. A. DE PARIS, plaintiff-appellant, vs. R. J. YEARSLEY, defendant-appellee.

FACTS

On May 3, 1948, plaintiff E. A. De Paris leased a house to defendant R. J. Yearsley for a monthly rent of P500 from June 1, 1948, to May 31, 1949. The defendant occupied the property and paid the monthly rent until March 1949. In April 1949, he abandoned the house. Upon the plaintiff’s demands, the defendant paid only P100 for April, leaving a balance of P400 for April and P500 for May. The assessed value of the house and lot was P18,750. Twenty percent (20%) of this amount is P3,750. The defendant had paid the plaintiff a total of P5,100. The trial court found an excess payment of P1,350 (the difference between P5,100 and P3,750) and awarded this amount to the defendant, considering it as excess over the legal rental for one year based on Republic Act No. 66.

ISSUE

Whether the defendant, having voluntarily paid the stipulated rental for ten months without protest, can recover the excess over the 20% limit prescribed by Republic Act No. 66.

RULING

The Supreme Court reversed the trial court’s decision. Republic Act No. 66 does not nullify contracts stipulating rentals exceeding 20% of the assessed value. It merely presumes such rentals to be “unjust and unreasonable,” giving the tenant the right to refuse to pay the excess or to seek judicial reduction of the rental to the statutory limit. The defendant, by paying the stipulated rent for ten months without objection, waived his right under the law. The law does not prohibit such waiver. Therefore, the defendant is not entitled to recover the alleged overpayments for the months he voluntarily paid. He is only obligated to pay the legal rent for the months of April and May, which amounts to P525. The plaintiff is absolved from the counterclaim, and the defendant is ordered to pay the plaintiff P525.