Title
CETUS DEVELOPMENT INC. vs. COURT OF APPEALS
Case
G.R. No. 77647
Decision Date
Aug 7, 1989
Lessees paid back rent after demand; petitioner's failure to send collector caused delay. SC ruled no cause for ejectment, affirming dismissal on equitable grounds.
unlawful detainer
cause of action
demand
A

Case Summary (G.R. No. 67662)

Factual Background

The private respondents were month-to-month verbal lessees of premises at No. 512 Quezon Boulevard, Quiapo, Manila, formerly owned by Susana Realty, and each paid modest monthly rentals by remittance to a collector who called at the premises. Susana Realty sold the premises to Cetus Development, Inc. in March 1984. From April through June 1984 the respondents paid rent to a collector sent by petitioner, but in July, August and September 1984 the respondents did not pay because no collector came. On October 9, 1984 petitioner sent each respondent a letter demanding vacatur and payment of arrears within fifteen days. The respondents paid their three months’ arrearages upon receipt of the demand on October 10, 1984, and petitioner accepted the payments subject to the unilateral notation that acceptance was “without prejudice to the filing of an ejectment suit.” Subsequent monthly payments were likewise accepted under the same reservation. The respondents, however, did not vacate, and petitioner filed six separate complaints for unlawful detainer in the Metropolitan Trial Court of Manila.

Trial Court Proceedings

The six ejectment complaints were consolidated and assigned to the Metropolitan Trial Court, Branch XII. The consolidated defendants answered, alleging regular prior payment through the lessor’s collector and explaining that their nonpayment for July through September resulted from petitioner’s failure to send a collector and their consequent uncertainty where to remit. The trial court found that at the time of filing the complaints all rentals had been paid; it held that acceptance of the back rentals before filing removed petitioner’s cause of action even if acceptance was “without prejudice,” noted the small amounts involved and humanitarian equities, and dismissed the consolidated complaints on June 4, 1985 without pronouncement as to costs. The defendants’ counterclaim for litigation expenses was likewise dismissed.

Regional Trial Court Proceedings

Petitioner appealed to the Regional Trial Court of Manila, Branch IX, which, in a decision dated November 19, 1985, dismissed the appeal for lack of merit. The Regional Trial Court affirmed the trial court’s dismissal on the merits.

Court of Appeals Proceedings

Petitioner sought relief in the Court of Appeals by petition for review. The Court of Appeals framed the principal issue as whether a cause of action for unlawful detainer existed at the time the complaints were filed, given that respondents promptly tendered and petitioner accepted the three months’ arrears after the demand. Relying on Sec. 2, Rule 70, Rules of Court, the Court of Appeals concluded that a landlord’s right to bring an ejectment action accrues only after the tenant failed to pay rent following a demand therefor, and that where tender and acceptance followed the demand before filing, no cause of action accrued. The Court of Appeals dismissed the petition on January 30, 1987.

Issues Presented to the Supreme Court

Petitioner assigned errors contending principally that the Court of Appeals committed grave abuse of discretion by holding that no cause of action existed when the complaints were filed because respondents tendered payment within the fifteen-day period and petitioner accepted the payments; that the courts erred in dismissing the complaints despite valid grounds for judicial ejectment; and that the cases were not an attempt to circumvent rent-control legislation. The dispositive legal question before the Supreme Court was whether a landlord’s demand and acceptance of tender made within the statutory period extinguished a cause of action for unlawful detainer or whether the landlord retained the right to eject the tenant notwithstanding such acceptance.

Parties’ Contentions

Petitioner argued that acceptance of the tendered arrearages, even when accompanied by a written reservation that acceptance was “without prejudice to the filing of an ejectment suit,” did not waive the cause of action for ejectment and that the failure to send a collector did not excuse respondents’ nonpayment because the lessor had no obligation under Article 1654, New Civil Code to provide a collector. The respondents maintained that they had customarily paid through a collector, that petitioner failed to provide a collector in July through September 1984, and that petitioner only first demanded payment on October 9, 1984; they contended that upon immediate tender and acceptance of arrears there was no existing cause of action for unlawful detainer at the time of filing.

Legal Analysis by the Supreme Court

The Supreme Court held that the demand required by Sec. 2, Rule 70, Rules of Court is a jurisdictional prerequisite to the bringing of an unlawful detainer action and that it functions as an extrajudicial remedy which, when fully complied with, obviates judicial action. The Court distinguished between the demand contemplated by Rule 70—a jurisdictional notice to the tenant to pay or to comply and to vacate where the lessor elects rescission under Article 1659, New Civil Code—and the general demand required to constitute delay under Article 1169, New Civil Code, which gives rise to mora solvendi. The Court explained that where the lessor elects rescission, the Rule 70 demand must include both payment and vacatur, but where the lessor seeks only specific performance, the demand need only require payment or compliance. The Court further observed that a cause of action accrues only when there is failure to pay after demand. The Court found on the record that petitioner had not demonstrated a prior demand for payment at the maturity of the

...continue reading

Analyze Cases Smarter, Faster
Jur helps you analyze cases smarter to comprehend faster, building context before diving into full texts. AI-powered analysis, always verify critical details.

About Privacy Terms