G.R. No. L-14716; April 23, 1962
TERESA REALTY, INC., plaintiff-appellee, vs. JOSE SISON, defendant-appellant.

FACTS

Teresa Realty, Inc., a domestic corporation, leased a lot in Manila to Jose Sison under a 25-year contract expiring on December 31, 1953. Prior to expiration, the lessor notified Sison to vacate or pay a significantly increased monthly rental. Upon Sison’s refusal to do either, Teresa Realty filed an unlawful detainer action. The Municipal Court ruled for the lessor, and Sison appealed to the Court of First Instance (CFI). In the CFI, Sison raised an affirmative defense, invoking Republic Act No. 1162 (providing for expropriation of landed estates in Manila and suspension of ejectment proceedings) and noting a pending separate case for rental determination. The CFI ruled against Sison, ordering him to vacate and pay the increased rent.
While Sison’s appeal was pending at the Court of Appeals, Republic Act No. 1599 took effect on June 17, 1956, amending RA 1162. Sison moved to suspend the ejectment proceedings under the new law. Teresa Realty opposed, challenging the constitutionality of the suspension provision. The Supreme Court initially remanded the case for factual ascertainment. A Commissioner’s report confirmed the property was part of a former hacienda with over fifty tenant houses, making it potentially subject to expropriation laws. Meanwhile, Teresa Realty moved to declare the suspension period expired, arguing the two-year suspension under RA 1599 lapsed on June 17, 1958, with no expropriation case filed.

ISSUE

The primary issue is whether the ejectment proceedings against tenant Jose Sison must be suspended under Republic Act No. 1599 .

RULING

The Supreme Court affirmed the CFI judgment, ordering Sison to vacate and pay the determined rental. The Court found it unnecessary to rule on the constitutional challenge to RA 1599 because, even assuming its validity, the law’s suspension period had expired. RA 1599 provided for a suspension of ejectment proceedings “for a period of two years” from its approval on June 17, 1956. The Court rejected Sison’s contention that the suspension period only begins to run from a court order granting suspension or from the commencement of expropriation proceedings. Such an interpretation was deemed unreasonable and unjust, as it would allow the government, by mere inaction in filing expropriation, to indefinitely deprive landowners of their property rights without due process. Since more than two years had passed from the law’s effectivity without the government instituting expropriation proceedings, the statutory basis for suspension lapsed.
The Court also found no merit in Sison’s other assignments of error. His original lease had expired and was not extended by his mere willingness to pay a lower rent. The increased rental demanded by Teresa Realty, set at 12% of the property’s assessed value, was deemed reasonable by the lower court, and the Supreme Court found no grounds to reverse this finding, noting the property’s considerable appreciation in value since the original 1928 lease. Consequently, the judgment for ejectment and payment of back rentals was upheld.