GR 144268; (August, 2006) (Digest)
G.R. No. 144268 August 30, 2006
DATALIFT MOVERS, INC. and/or JAIME B. AQUINO, Petitioners, vs. BELGRAVIA REALTY & DEVELOPMENT CORPORATION and SAMPAGUITA BROKERAGE, INC., Respondents.
FACTS
Respondent Sampaguita Brokerage leased a lot from the Philippine National Railways (PNR). Its sister company, Belgravia, constructed a warehouse on the lot and subleased it to petitioner Datalift Movers under a one-year contract. After the contract expired, Datalift continued possession, paying increased rentals until Belgravia unilaterally raised the rent from P60,000 to P130,000 monthly. Datalift stopped paying, prompting Belgravia and Sampaguita to file an ejectment suit for unpaid rentals and possession.
Petitioners argued that Sampaguita had no cause of action, as it was not a party to the sublease, and that Belgravia had no valid title because the PNR-Sampaguita lease allegedly prohibited subleasing and had expired. The Metropolitan Trial Court (MeTC) ordered ejectment and payment of back rentals, pegging a reasonable monthly rate at P80,000 from June 1994. The Regional Trial Court and Court of Appeals affirmed.
ISSUE
Whether the petitioners can be lawfully ejected and held liable for unpaid rentals despite their challenges to the respondents’ rights under the PNR lease.
RULING
The Supreme Court affirmed the ejectment order and liability for rentals but modified the computation. The legal logic is anchored on the nature of ejectment proceedings and the principle of relativity of contracts. An ejectment case primarily concerns possession, not title. Petitioners, as sublessees, cannot collaterally attack the validity of the main lease between PNR and Sampaguita. They are not privies to that contract and thus lack the legal personality to question its terms or its alleged expiration.
Furthermore, the petitioners’ undisturbed possession after the sublease contract expired created a month-to-month implied renewal, terminable by either party upon demand. The respondents’ valid demand for increased rent and, upon non-payment, for vacating the premises, provided sufficient cause for ejectment. However, the Court corrected a plain error in the MeTC’s reckoning of the rental increase. The evidence showed the increase to P130,000 was effective November 1994, not June 1994. Since the MeTC found a reasonable rental to be P80,000 monthly, petitioners are liable for this amount starting November 1994, not for any differential from June to October 1994.