G.R. No. L-186 - Guanzon vs. Ang Ban

Case Summary (G.R. No. L-186)

Lease Contract and Possession After Abandonment

On February 24, 1941, Epifania Vda. de Guanzon and Tan Kue entered into a written contract of lease covering the property at Nos. 1008 and 1010 Lavezares, Binondo, Manila. The lease fixed a monthly rental of P130, effective March 15, 1941, and running until March 15, 1946. The lease period and rental obligation thus extended beyond the end of the wartime disturbances.

The Supreme Court found that Tan Kue abandoned the property in December 1944. He evacuated with his family to Batangas and failed to pay the monthly rentals beginning January 1945. After this abandonment, the plaintiffs alleged that Ang Ban and Ang Chung were occupying the premises without any legal ground at all, and that their continued possession was unlawful.

Filing of the Ejectment Complaint and Subsequent Amendments

The original complaint was filed on April 28, 1945. It sought the ejectment of Ang Ban and Ang Chung, alleged to be occupying the abandoned premises unlawfully. During the course of the case, the plaintiffs amended the pleadings and later included Tan Kue among the defendants.

In the amended complaint dated May 21, 1945, Tan Kue was sued not for ejectment but for the payment of a sum of money, which included unpaid rents, liquidated damages, attorney’s fees, and costs. The Court treated this amendment as controlling for purposes of the procedural objections raised on appeal.

Trial Court Decision

The Court of First Instance of Manila declared terminated the lease contract between Epifania Vda. de Guanzon and Tan Kue. It ordered the defendants to move out of the premises and to pay jointly and severally the sum of P130 per month from January 1945 until the property is vacated, plus costs. The trial court’s ruling thus recognized a continuing monetary liability for rentals accruing after the default, while also ordering removal from the premises.

Issues Raised on Appeal

On appeal, the defendants assigned two principal errors.

First, they argued that the trial court failed to dismiss the complaint despite plaintiffs’ alleged failure to serve the notice required by section 2 of Rule 72 of the Rules of Court. Second, they argued that the trial court failed to declare that Tan Kue’s failure to pay rentals was due to force majeure.

Appellate Court’s Treatment of Rule 72 Notice

The Supreme Court held that section 2 of Rule 72 was not applicable. It reasoned that Tan Kue could not invoke the notice requirement because the case, as to him, was not an ejectment action under Rule 72. As established by the amended complaint of May 21, 1945, Tan Kue was sued only for a money claim consisting of unpaid rents, liquidated damages, attorney’s fees, and costs.

The Court further held that Ang Ban and Ang Chung could not invoke the same procedural requirement. They were not shown to be tenants of plaintiffs under the lease. Instead, the Court considered them mere intruders occupying the premises without contractual right against the lessors. Consequently, the Court treated the statutory notice rule as inapplicable to their situation.

Force Majeure Argument Deemed Immaterial

The Supreme Court also treated the force majeure issue as immaterial. It declared that whether Tan Kue’s failure to pay rentals was due to force majeure did not affect the determination of his obligation to pay rentals due at the time the lower court decided the case. The Court reasoned that the obligation was not denied by any party; the question was not whether rentals were owed but whether Tan Kue could avoid liability by attributing the late payment to external circumstances.

The Court explained that, even assuming a reason existed for delay earlier, “now there is none any more.” It thus focused on the fact that the lessee remained bound to pay rental obligations and did not justify continued nonpayment at the relevant time.

Liability of Tan Kue for Occupancy of Co-defendants

From the evidence, the Supreme Court found that Tan Kue had something to do with his co-defendants’ unjustifiable occupation of the premises. This factual finding led the Court to conclude that Tan Kue was equally responsible for the rents until Ang Ban and Ang Chung shall have completely vacated the property. The Court therefore upheld the trial court’s imposition of continuing rental responsibility, anchored in the terminated lease arrangement and the parties’ relationship to the premises and its possession.

Consideration of Moratorium on Rentals

The Court noted that rentals due up to March 10, 1945 were subject to a moratorium under Executive Order No. 32 and Presidential Proclamation No. 6. This recognition operated as a qualification to the rental award for the early portion of the post-abandonment period, consistent with the wartime and immediate post-war legal framework reflected in those issuances.

Modification Regarding Ejectment of Tan Kue

While affirming the trial court in substance, the Supreme Court modified the decision. It held that it was unnecessary to order the ejectment of defendant Tan Kue because he had already ceased to occupy the premises since December 1944. It also emphasized that the lease contract had been terminated in accordance with the facts and the terms of the contract itself. In consequence, the disposition required the payment obligations and costs to stand, but it removed the need for an ejectment directive against a party no longer in possession.

Dispositive Ruling

The Supreme Court affirmed the decision of the Court of First Instance of Manila with the sole modification concerning ejectment against Tan Kue, and it maintained the imposition of costs against the appellants. The Court’s award of rental liability was consistent with the continuing obligation found by the trial court, while respecting the moratorium applicable to rentals up to March 10, 1945.

Concurring Opinion and Doctrinal Emphasis

In a concurring opinion, Padilla, J. agreed in the result and elaborated on the legal basis for dispossession and rental liability. He stated that Ang Ban and Ang Chung occupied illegally and lacked any contractual relation with the plaintiffs. He rejected the claim that Ang Ban was merely a caretaker of the lessee as an afterthought, noting that Ang Ban’s house had been burned and that Ang Ban and Ang Chung moved into the premises when they found them empty.

Padilla further emphasized that Tan Kue, as lessee under a five-year lease contract (identified as Exhibit A), was no longer entitled to hold the premises once he defaulted. He cited Article 1569 of the Civil Code, particularly that the lessor may dispossess the lessee by suit for causes that include default in payment of the rent. He addressed Section 2, Rule 72, stating that although no demand had been made personally, it could be inferred from the evidence that a written notice of demand (Exhibit B) was handed to the lessee on or before May 4, 1945, and that the statutory notice was complied with by the time of the amended complaint joining the lessee on May 21. He also rejected the force majeure claim as without merit, pointing to the lessee’s inexcusable failure to pay after liberation of Manila and his return in March 1945 to engage in a profitable business.

Finally, the concurring opinion stressed that Tan Kue’s obligation to pay rentals from January 1945 until the premises shall have been vacated complete arose from the lease obligation to pay rentals until the premises were returned to the lessors, consistent with

Case Syllabus (G.R. No. L-186)

Parties and Procedural Posture

Horacio A. Guanzon, et al. acted as plaintiffs and appellees in an action seeking ejectment and payment of unpaid rentals.
Ang Ban, Ang Chung, and Tan Kue acted as defendants and appellants, and they challenged the adverse decision on appeal.
The case began in the Court of First Instance of Manila, where Judge Mariano L. de la Rosa rendered judgment terminating the lease and ordering payment of rentals and compliance with the judgment.
The original complaint sought the ejectment of Ang Ban and Ang Chung from premises they occupied without any legal ground.
By amendments to the pleadings, Tan Kue was later included among the defendants.
On appeal, the defendants assigned errors on the trial court’s refusal to dismiss for lack of statutory notice and its refusal to recognize force majeure as an excuse for nonpayment.
The Court affirmed the lower court’s decision with a limited modification regarding ejectment as to Tan Kue.

Key Contract and Occupancy Facts

On February 24, 1941, Epifania Vda. de Guanzon and Tan Kue executed a written lease of the property located at Nos. 1008 and 1010 Lavezares, Binondo, Manila.
The lease fixed a monthly rental of P130, effective March 15, 1941, and running until March 15, 1946.
Tan Kue abandoned the property in December, 1944, because he evacuated with his family to Batangas and he failed to pay monthly rentals beginning January, 1945.
Ang Ban and Ang Chung occupied the premises that Tan Kue abandoned, and the plaintiffs alleged they did so without any legal ground.
The plaintiffs’ action targeted Ang Ban and Ang Chung because of their continued occupation of the abandoned premises.
In his testimony, Tan Kue claimed that he returned to Manila in March 1945 and resided with his family at 1522-24 Oroquieta, Manila, where he kept a business.
Tan Kue testified that he failed to offer the plaintiffs the rents in arrears because he was very busy.
Horacio A. Guanzon testified that Ang Ban and Ang Chung transferred to the premises after their house was burnt, that he required them to move out, and that on May 4, 1945, Tan Kue asked him for another lease while promising to sue Ang Ban and Ang Chung.
The trial evidence also showed that Tan Kue had something to do with his co-defendants’ unjustified occupation of the premises.

Causes of Action and Relief Sought

The original complaint sought ejectment of Ang Ban and Ang Chung from the leased premises occupied without legal ground.
Through pleading amendments, the plaintiffs included Tan Kue as a defendant.
In the amended complaint of May 21, 1945, Tan Kue was sued for a sum of money consisting of unpaid rents, liquidated damages, attorney’s fees, and costs.
The lower court terminated the lease contract between Epifania Vda. de Guanzon and Tan Kue.
The lower court ordered the defendants to move out of the premises and to pay jointly and severally the sum of P130 per month from January, 1945 until the property was vacated, plus the costs.

Issues Raised on Appeal

The appellants argued that the lower court erred in not dismissing the complaint due to plaintiffs’ failure to serve the notice required by Section 2 of Rule 72 of the Rules of Court.
The appellants also argued that the lower court erred in not declaring that Tan Kue’s failure to pay the rents was due to force majeure.
The Court framed the controversy around whether Rule 72, Sec. 2 applied to the plaintiffs’ action against the various defendants.
The Court further addressed whether force majeure could affect the obligation to pay rentals that had become due.

Statutory and Rule-Based Framework

Section 2, Rule 72 of the Rules of Court provides that no landlord may bring an action against a tenant for failure to pay rent due or comply with lease conditions unless the tenant failed to pay or comply for five days after a demand.
The demand under Rule 72, Sec. 2 may be made personally, served through written notice on the person found on the premises, or made by posting the notice if no persons are found.
Article 1569 of the Civil Code provides that the lessor may dispossess the lessee by suit for causes including default in the payment of the rent agreed upon and breach of conditions stipulated in the contract.
The decision addressed the impact of wartime and postwar relief measures on rent recovery by noting that rents due up to March 10, 1945 were subject to moratorium under Executive Order No. 32 and Presidential Proclamation No. 6.

Court’s Treatment of Rule 72 Notice

The Court held that Section 2 of Rule 72 was not applicable on the facts of the case.
The Court held that Tan Kue could not invoke Rule 72, Sec. 2 because he was not sued for ejectment in accordance with Rule 72.
The Court observed that, in the