G.R. No. L-57321 February 24, 1982
REMEDIOS CABURNAY and PRIVIES, petitioners, vs. CARMEN VDA. DE ONGSIAKO and HON. PEDRO A. RAMIREZ, Judge of the Court of First Instance of Manila, respondents.

FACTS

Carmen Vda. de Ongsiako filed an ejectment case against Remedios Caburnay for non-payment of rentals for Room 304 in a building in Quiapo, Manila. The lessor demanded payment of accrued rentals and sought to increase the monthly rate from P150 to P200. Caburnay defended by asserting that her failure to pay was due to the lessor’s refusal to accept the agreed P150 rental, and that the demanded increase violated Presidential Decree No. 20, which froze rentals for residential units. The City Court ruled for the lessor, holding the premises were in a commercial building originally intended for offices and thus not covered by the rent freeze. The Court of First Instance affirmed this decision.
Caburnay elevated the case via certiorari under Section 45 of the Judiciary Act. She contended the lower courts erred in classifying the premises as commercial. She argued the room, which she had occupied as her dwelling since 1965 and was complete with kitchen, toilet, and bath, was a residential unit. She invoked the doctrine from Saure vs. Pentecostes that the decisive factor is the actual use of the premises, not its location or original intended purpose.

ISSUE

Whether the premises occupied by Caburnay is a residential unit covered by the rental freeze under Presidential Decree No. 20.

RULING

Yes. The Supreme Court set aside the lower courts’ decisions. The legal logic hinges on the application of Presidential Decree No. 20 and the interpretive principle established in Saure vs. Pentecostes. The decree’s coverage is determined by the actual use of the premises, not by its location in a commercial area or its original intended purpose. The Court found that Caburnay had used the room as her dwelling for years, and the unit’s facilities (kitchen, toilet, and bath) confirmed its residential character. The lower courts’ focus on the building’s original design for office purposes was a misapplication of the law.
The Court explicitly adopted the definition from Batas Pambansa Blg. 25, which includes as residential units those used for dwelling purposes, even if also used for a small home business, provided the owner’s family lives there. The factual circumstances placed Caburnay’s occupancy squarely within this protective ambit. Therefore, the lessor’s unilateral rental increase was invalid, and the ejectment based on non-payment of the increased rate could not stand. The Court ordered the respondent to pay attorney’s fees and costs to the petitioners.