G.R. No. L-27598 - Cue vs. Dolla

Elisa Medina Cue is the plaintiff-appellee and owner of a building located at 362-364 Quezon Boulevard, Quiapo, Manila, which was partially leased.
Pilar Dolla, the defendant-appellee, was a month-to-month lessee since August 1958, paying a monthly rental of P1,500 and operating a bakery business on the premises.
On February 14, 1966, by a deed of sale, plaintiff Cue sold the land and building (including the leased premises) to Philippine Savings Bank (PSB) for P700,000.00. The deed contained a covenant requiring possession to be delivered free from tenants by May 31, 1966, failing which P80,000.00 retained by the bank would be forfeited.
On the same day as the sale, plaintiff informed defendant Dolla of the sale and the necessary condition to vacate the premises, requesting her to indicate her willingness to do so, which she refused.

Plaintiff subsequently notified defendant on March 7, 1966, of the termination of the month-to-month lease effective at the end of March 1966 and demanded that she vacate the premises accordingly.
Following defendant’s failure to vacate, an ejectment suit was filed on May 4, 1966, in the city court.
In her answer, defendant invoked, among other defenses, the protection afforded by Article 1687 of the Civil Code.
The city court rendered a judgment on June 18, 1966, allowing the defendant to continue occupying the premises for one year from the date of the judgment, contingent upon payment of the agreed monthly rent; failure to pay would result in the forfeiture of this right.

Both parties appealed the decision to the Court of First Instance.
Prior to the trial de novo in the Court of First Instance, PSB filed a motion to intervene on November 10, 1966, submitting its own complaint in intervention which joined in the ejectment prayer.
PSB sought, as compensation for the use and occupation of the premises, an increased rental demand of P14,000.00 per month, markedly higher than the original monthly rent of P1,500.00.
The trial court denied the intervention on December 15, 1966, basing its decision on two grounds:

The failure to intervene in the city court was deemed fatal.
Intervention at that stage would have introduced new issues not previously litigated.

PSB’s motion for reconsideration was denied on February 24, 1967, leading to PSB’s direct appeal to the Supreme Court.

Whether the filing of the motion to intervene by PSB while the case was on appeal in the Court of First Instance, but before the commencement of the de novo trial, barred its intervention.
Whether “trial” in Section 2, Rule 12 of the Rules of Court includes the trial de novo process conducted by the Court of First Instance in an appeal from a lower court.

Whether PSB’s intervention, particularly its claim for an increased rental compensation of P14,000.00 per month, altered or created new issues in the cause of action originally presented by plaintiff Cue.
Whether allowing the intervention would affect the nature of the ejectment cause of action, or merely supplement it without altering its inherent substance.

Whether the trial court exercised its discretion prudently in denying the intervention, given that a trial de novo required fresh presentation of evidence and restarted the fact-finding process.
How the discretion to allow or reject intervention should be balanced against the rights and interests of an intervenor whose contractual and commercial interests may be prejudiced by delay.