GR 176324; (April, 2008) (Digest)
G.R. No. 176324; April 16, 2008
Abaya Investments Corporation, petitioner, vs. Merit Philippines and Servulo C. Dominise, respondents.
FACTS
Petitioner Abaya Investments Corporation leased a commercial building to respondents under a contract prohibiting sublease. Respondents defaulted on rental payments and, despite demands and partial payments, accrued substantial arrears. Petitioner also discovered respondents had subleased a portion of the building without consent. After further demands for payment and to terminate the sublease went unheeded, petitioner filed an unlawful detainer complaint before the Metropolitan Trial Court (MeTC).
Respondents admitted the rental debt but denied illegal subleasing and challenged petitioner’s authority to file the suit. During the case, respondents vacated the premises and made partial payments. The MeTC ruled for petitioner, ordering ejectment and payment of accrued rentals. The Regional Trial Court (RTC) affirmed but deleted damages. The Court of Appeals (CA) reversed, holding the MeTC lacked jurisdiction.
ISSUE
Whether the MeTC had jurisdiction over the unlawful detainer case despite the alleged need for prior judicial rescission of the lease contract due to violations by the lessee.
RULING
Yes, the MeTC had jurisdiction. The Supreme Court reversed the CA and reinstated the RTC decision. The Court clarified that a judicial declaration of rescission is not a prerequisite for an unlawful detainer action based on violation of lease terms, such as non-payment of rent and breach of a no-sublease clause. The cause of action in ejectment is the termination of the lease by virtue of the lessee’s violation and the consequent withholding of possession from the lessor after demand.
The legal logic is that a lease is terminated by the lessee’s violation of its conditions, not by judicial rescission. The lessor’s act of filing the ejectment suit itself signifies the election to rescind. The jurisdiction of the MeTC is properly invoked when the suit is predicated on the lessee’s failure to comply with lease terms after demand, making his possession unlawful. The Court distinguished the cited precedent, Nera v. Vacante, which involved a contract to sell, not a lease. For leases, the ruling in Dio v. Concepcion controls, stating that judicial intervention is not required to resolve a lease for breach; the lessor’s demand to vacate suffices. Therefore, the MeTC could validly rule on the violations and order ejectment.