Facts:

The case involves Rita Caleon as the petitioner and Agus Development Corporation as the private respondent. The events transpired in Manila, where Agus Development Corporation owned a parcel of land designated as Lot 39, Block 28, located at 1611-1619 Lealtad, Sampaloc. The petitioner, Rita Caleon, entered into a lease agreement with the private respondent for a monthly rental of P180.00, on which she constructed a four-door apartment building. Without obtaining consent from Agus Development Corporation, Caleon sub-leased two of the apartment doors to Rolando Guevarra and Felicisima Estrada, charging them a monthly rental of P350.00 each. Upon discovering the unauthorized sub-leases, Agus Development Corporation, through legal counsel, issued a written demand for Caleon to vacate the premises. When Caleon failed to comply, the private respondent filed an ejectment complaint (Civil Case No. 048908) with the Metropolitan Trial Court of Manila, Branch XII, citing the unauthorize...

Facts:

1. Parties Involved:

   • Petitioner: Rita Caleon, lessee of a parcel of land owned by Agus Development Corporation.
   • Respondents: Agus Development Corporation (owner of the land) and the Court of Appeals.

2. Property Details:

   • The property in question is Lot 39, Block 28, located at 1611-1619 Lealtad, Sampaloc, Manila.
   • Rita Caleon leased the lot from Agus Development Corporation for a monthly rental of P180.00.

3. Construction and Sub-Lease:

   • Petitioner constructed a 4-door apartment building on the leased lot.
   • Without the consent of the lessor, she sub-leased two of the four doors to Rolando Guevarra and Felicisima Estrada for P350.00 each per month.

4. Demand to Vacate:

   • Upon discovering the sub-lease, Agus Development Corporation demanded in writing that petitioner vacate the premises.
   • Petitioner failed to comply with the demand.

5. Legal Proceedings:

   • Agus Development Corporation filed an ejectment case (Civil Case No. 048908) against Rita Caleon in the Metropolitan Trial Court (MTC) of Manila, citing unauthorized sub-leasing under Batas Pambansa Blg. 25, Section 5.
   • The MTC ruled in favor of the respondent, ordering petitioner to vacate the premises, remove improvements, pay attorney’s fees, and cover the costs.
   • The Regional Trial Court (RTC) affirmed the MTC decision.
   • The Court of Appeals dismissed petitioner’s appeal, prompting her to file a petition for review on certiorari with the Supreme Court.

Issue:

1. Whether the lease of an apartment includes the sublease of the lot on which it is constructed, constituting a ground for ejectment under Batas Pambansa Blg. 25.
2. Whether Batas Pambansa Blg. 25 is applicable to the case, given that the lease contract was perfected before the law’s enactment.
3. Whether the application of Batas Pambansa Blg. 25 to the case is unconstitutional as an impairment of the obligation of contracts.

Ruling:

The Supreme Court denied the petition for lack of merit and affirmed the decision of the Court of Appeals.

1. Applicability of Batas Pambansa Blg. 25:

   • The Court ruled that the lease of a building naturally includes the lease of the lot on which it is constructed, as established in Duellome v. Gotico (7 SCRA 841 [1963]).
   • Therefore, petitioner’s sub-leasing of the apartment units constituted a sublease of the lot, violating Section 5 of Batas Pambansa Blg. 25, which prohibits subleasing without the lessor’s written consent.

2. Constitutionality of Batas Pambansa Blg. 25:

   • The Court held that the constitutional prohibition against impairment of contracts is subject to the State’s police power, which may modify or abrogate contracts to safeguard public welfare.
   • Batas Pambansa Blg. 25, being a police power legislation aimed at regulating rentals and protecting lessees, is valid and applicable even to contracts entered into before its enactment.

3. Social Justice Argument:

   • The Court rejected petitioner’s invocation of social justice, emphasizing that social justice cannot be used to trample on the rights of property owners.

Ratio:

• (Unlock)