G.R. No. L-18374; February 27, 1963
PILAR G. VDA. DE KRAUT, plaintiff-appellant, vs. MANUEL LONTOK, defendant-appellee.

FACTS

Pilar G. Vda. de Kraut, as the successor-in-interest of her deceased husband Mathias Kraut, sought to eject tenant Manuel Lontok from an apartment in Quiapo, Manila. After the war, Kraut had increased the rental from P40 to P60 monthly. While other tenants eventually agreed to the increase after an ejectment suit, Lontok was allowed to continue paying only P40 under an amicable settlement. Upon Kraut’s death, his widow filed an unlawful detainer case (Civil Case No. 21154) in the Municipal Court against Lontok and others. The court ruled in her favor, ordering the tenants to vacate and pay P60 monthly. On appeal to the Court of First Instance (CFI, Case No. 18658), the case was dismissed “without prejudice” for failure to prosecute on September 6, 1957. All rental deposits made by Lontok during the appeal were withdrawn by the widow. After the dismissal, Lontok resumed paying P40 monthly from October 1957. In February 1959, the widow filed a new ejectment action, demanding P60 monthly from October 1957 and seeking his ejectment for non-payment of the difference. The Municipal Court ruled for the widow, but on appeal, the CFI dismissed the new case and ordered the widow to reimburse Lontok P1,180, representing the excess rental deposits (over P40) he had made during the prior appealed case. The widow appealed to the Supreme Court.

ISSUE

The primary issues were: (1) whether the widow had a cause of action for unlawful detainer against Lontok after the 1957 dismissal; and (2) whether Lontok was entitled to a refund of his excess rental deposits made during the prior appeal.

RULING

The Supreme Court modified the CFI decision. On the first issue, it held that the widow had a valid cause of action. Lontok was a tenant on a month-to-month basis. Her demand for payment of the “unpaid rentals” (the P20 difference) constituted a valid demand for the increased P60 rental. Lontok’s refusal to pay this justified the termination of the lease and supported the ejectment suit. On the second issue, the Court ruled that Lontok was entitled to a refund of his excess deposits. The CFI’s 1957 dismissal of the entire case (not just the appeal) vacated the Municipal Court’s judgment entirely, reverting the parties to their pre-litigation status under the old settlement where Lontok paid only P40. Therefore, the deposits made at the P60 rate during the appeal were excessive, and the widow’s withdrawal of them was unjust. Consequently, she must reimburse the excess. However, her valid demand for P60 in the new case established her right to that rental from the date of that demand onward until Lontok vacates. The case was remanded to determine the exact date of demand to calculate the rentals due and the final reimbursement amount. The award of attorney’s fees to Lontok was deleted, as the action was not malicious.