G.R. No. 109887 February 10, 1997
CECILIA CARLOS, petitioner, vs. THE COURT OF APPEALS and EAST ASIA REALTY CORPORATION, respondents.

FACTS

Petitioner Cecilia Carlos was the lessee of a portion of a house and lot, which was sold by the owner to private respondent East Asia Realty Corporation (EARC). In 1990, Carlos filed a complaint in the Regional Trial Court (RTC) of Makati against EARC to enforce an alleged right of first refusal over the property, claiming the sale violated her preferential rights. Subsequently, on June 26, 1991, EARC filed an ejectment complaint against Carlos in the Metropolitan Trial Court (MTC). EARC alleged it had a written lease contract with Carlos for a fixed term expiring on January 31, 1991, which was not renewed, and that Carlos refused to vacate and stopped paying rentals. Carlos, in her answer, generally denied the lease contract’s existence and claimed her right of first refusal as a defense, arguing the pending RTC case presented a prejudicial question.
The MTC dismissed the ejectment case, ruling an implied new lease was created when EARC accepted rentals after the lease term expired and citing the pending RTC case as a prejudicial question. On appeal, the RTC reversed the MTC. It found Carlos had indeed signed a lease contract with a specific expiry date and a clause expressly prohibiting implied renewal. The RTC held her defenses of fraud or involuntariness in signing the contract were waived for not being pleaded in her answer and for lack of evidence. The Court of Appeals affirmed the RTC’s decision.

ISSUE

Whether the Court of Appeals erred in: (1) not considering the issues of fraud, undue influence, or mistake in the execution of the lease contract; (2) not finding an implied renewal of the lease; and (3) not holding that the pending civil case for specific performance involved a prejudicial question that should suspend the ejectment proceedings.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. On the first issue, the defenses of fraud, undue influence, or mistake were correctly deemed waived. Under Section 2, Rule 9 of the Rules of Court, defenses not pleaded in the answer are waived. Carlos failed to specifically plead these vitiating circumstances in her answer to the ejectment complaint. Furthermore, she presented no evidence to substantiate these claims during the summary proceedings.
On the second issue, there was no implied new lease (tacita reconduccion). Article 1670 of the Civil Code allows implied renewal only if the lessee continues enjoying the thing leased for fifteen days with the acquiescence of the lessor, provided no notice to the contrary has been given. Here, the written lease contract contained an explicit clause stating, “No implied renewal shall be understood under this contract.” This express stipulation negates any presumption of a tacit renewal, regardless of the acceptance of rentals for a few months after expiry, which the Court viewed as merely mitigating damages.
On the third issue, the principle of prejudicial question does not apply. A prejudicial question generally arises when a civil action involves an issue intimately related to an issue in a pending criminal action, the resolution of which determines the criminal action’s outcome. Both pending cases here are civil in nature. Moreover, the ejectment case concerns the issue of possession de facto, which can be resolved independently from the RTC case involving ownership or the right of first refusal. The Court found the prior filing of the specific performance case appeared to be a preemptive tactic to block the ejectment suit, and the rule against multiplicity of suits favors resolving the possession issue in the ejectment proceeding.