G.R. No. L-86, April 26, 1946
FERNANDO REYES, plaintiff-appellee, vs. PELAGIO LOPEZ, defendant-appellant.

FACTS

This is an ejectment suit originating from the municipal court and appealed to the Court of First Instance of Manila. Plaintiff Fernando Reyes alleged he was the lessee of an apartment at 1510 Rizal Avenue, owned by Mrs. Rosa T. Gabriel, for the last five years. In October 1944, he subleased the upper floor to defendant Pelagio Lopez under an agreement to share the rent and utility bills equally. The owner increased the rent from P40 to P50 in February 1945, and again to P65 beginning April 1945. Defendant paid his share of the rent only up to January 1945 and failed to pay his share of a light bill amounting to P49.60. Plaintiff filed the complaint in May 1945 after giving the required notice to vacate.
Defendant Pelagio Lopez claimed that around the end of September 1944, he purchased plaintiff’s right to the premises for P2,500, giving plaintiff three months to move out but allowing him to occupy the second floor in the meantime. Defendant evacuated in November 1944 and upon returning after liberation, found plaintiff claiming possession as the lessee of the entire apartment.
The trial court found no sale of lease rights, ruling the agreement was a sublease. It ordered defendant to vacate, pay monthly rent of P32.50 from March 1, 1945, until he surrenders the premises, pay P16.80 as half of the light bill, and pay costs.

ISSUE

Whether the defendant-appellant successfully proved his defense that he purchased the plaintiff’s leasehold rights, thereby negating the ejectment action for non-payment of rent under a sublease agreement.

RULING

The Supreme Court affirmed the trial court’s judgment. The Court found the defendant’s evidence insufficient to prove the alleged sale of leasehold rights. Defendant relied on his own testimony, that of his brother Gregorio Lopez, and Exhibits 1 (a cash voucher) and 4 (a ledger entry). The voucher, prepared by Gregorio Lopez who was an accountant for “Gregorio Lopez & Company,” purported to show a P2,500 payment to Reyes for the “Transfer of right of occupancy.” However, it was initialed “GIL” by Gregorio, not signed by plaintiff Reyes, despite Gregorio’s admission that Reyes was “downstairs” at the time. The Court found it improbable that a trained accountant would not obtain the creditor’s signature. Furthermore, there was no explanation why Reyes would be a creditor of Gregorio Lopez & Company.
The Court noted significant circumstances contradicting the sale: defendant never paid rent directly to the owner, Mrs. Rosa T. Gabriel, even up to the filing of the complaint, and never informed her of the alleged transfer, despite being her tenant in an adjoining apartment and having dealings with her since February 1945.
Considering Rule 123, Section 21 of the Rules of Court, which generally requires a note or memorandum subscribed by the adverse party to prove a sale of an interest in real property, and the overall weakness of the defendant’s evidence against the impugning circumstances, the Supreme Court held the trial judge committed no error in rejecting the defense. The judgment was affirmed, with the modification that, pursuant to a prior resolution, the monthly rental payable by defendant shall be P40 from August 1945. Costs were imposed on the appellant.