G.R. No. 136409 ; March 14, 2008
Subhash C. Pasricha and Josephine A. Pasricha, Petitioners, vs. Don Luis Dison Realty, Inc., Respondent.

FACTS

Petitioners Subhash and Josephine Pasricha leased several commercial units from respondent Don Luis Dison Realty, Inc. under two contracts. They paid rentals religiously until May 1992. Thereafter, they refused to pay, accruing substantial arrears. Respondent, through its General Manager Roswinda Bautista, made demands and eventually filed an ejectment case. Petitioners admitted non-payment but claimed justification, alleging an internal corporate squabble created confusion on whom to pay and that respondent prevented them from using most of the leased units. They also argued the complaint was filed by Bautista without proper corporate authority.
The Metropolitan Trial Court (MeTC) dismissed the ejectment complaint, finding petitioners’ non-payment unjustified but ruling Bautista lacked authority to sue. The Regional Trial Court (RTC) reversed, ordering petitioners to vacate and pay arrears, holding Bautista had implied authority as General Manager. The Court of Appeals affirmed the RTC decision but deleted the award of attorney’s fees.

ISSUE

Whether the Court of Appeals erred in affirming the RTC decision ordering the petitioners’ ejectment for non-payment of rent.

RULING

The Supreme Court denied the petition and affirmed the appellate court’s decision. The legal logic is clear: failure to pay rent is a valid ground for ejectment under Article 1673 of the Civil Code. The Court found petitioners’ justifications for non-payment unmeritorious. The alleged internal corporate dispute did not excuse payment; petitioners could have consigned the rentals in court as provided by law, which they did not do. Their claim of being prevented from using the units was unsupported by evidence and belied by their own actions, including preparing check vouchers for future payments. On the procedural issue, the Court upheld that Bautista, as the corporation’s General Manager and Treasurer, possessed the implied authority to institute the suit on its behalf. Her actions were within the scope of her ordinary duties to manage corporate affairs, including lease enforcement and collection. The absence of a board resolution specifically authorizing the suit was not fatal. Consequently, petitioners’ unjustified withholding of rent constituted a violation of the lease contract, warranting judicial ejectment.