Case Summary (G.R. No. 175554)
Background of Lease Agreement
On October 10, 1975, Ortigas entered into a lease agreement with La Paz for a period of 25 years from January 1, 1976, to December 31, 2000. Under this agreement, La Paz was obligated to build a commercial building known as GSA. La Paz complied and subleased various units, including Unit No. 26, Level A to Liga. After the lease expired in December 2000, Liga and other stallholders sought to extend their lease without success.
Execution of New Lease
Despite the expiration of La Paz's lease, Ortigas allowed Liga to remain in possession. On August 30, 2001, Ortigas informed Liga of a new lease agreement with Allegro, which took effect on September 1, 2001. Allegro subsequently entered into a sublease agreement with Liga, with rent set at P40,000 per month. Liga made initial payments but subsequently defaulted on her rental obligations.
Ejectment Suit and Trial Court's Decision
Allegro filed an ejectment complaint against Liga in the Metropolitan Trial Court (MeTC) on March 15, 2002, due to Liga's non-payment of rent. The MeTC ruled in favor of Allegro, determining that Liga held the property only by Ortigas's tolerance. Liga was ordered to vacate and pay back rentals to Allegro for her occupancy post-lease expiration.
Regional Trial Court's Modification
Liga appealed the MeTC’s decision to the Regional Trial Court (RTC), which modified the ruling. The RTC extended Liga's lease for two years at a reduced rental rate of P20,000 per month, and adjusted the back rental payments. Allegro subsequently appealed this modification to the Court of Appeals.
Court of Appeals Decision
On January 25, 2006, the Court of Appeals favored Allegro, reinforcing that Liga's occupancy was contingent only on tolerance following the lease expiration. It overturned the RTC’s modifications, mandating Liga to pay back rentals to both Ortigas and Allegro, with the appellate court emphasizing the correctness of the original rental terms in the sublease agreement.
Legal Arguments Presented
Liga challenged the appellate court's decision, arguing mainly that:
- The court erred in ordering her to pay back rentals owed to Ortigas, as Ortigas was not a party to the ejectment case.
- Allegro was estopped from claiming the higher rental rate after filing a motion connoting acceptance of a lower rate.
- She should not be liable for attorney's fees due to her willingness to pay the disputed amounts.
Court's Rationale and Holdings
On review, the Court ruled in favor of Liga regarding the back rentals owed to Ortigas, clarifying that no relief could be granted to a non-party in the case. It acknowledged that the judgment must conform to the issues presented; thus, the order to pay Ortigas was set aside.
Conversely, the Court upheld Allegro's entitlement to the payment of P40,000 monthly r
...continue readingCase Syllabus (G.R. No. 175554)
Case Background
- The case involves a petition for review under Rule 45 of the Rules of Court filed by Edsel Liga against Allegro Resources Corporation, assailing the Decision dated January 25, 2006, and Resolution dated November 22, 2006, of the Court of Appeals in CA-G.R. SP No. 86331.
- On October 10, 1975, Ortigas & Company, Limited Partnership (Ortigas) leased a parcel of land in San Juan, Metro Manila, to La Paz Investment & Realty Corporation (La Paz) for a period of 25 years, expiring on December 31, 2000.
- La Paz constructed the Greenhills Shopping Arcade (GSA), which was subdivided into stalls for subleasing.
- Liga was a sub-lessee of Unit No. 26, Level A in the GSA. After the expiration of La Paz's lease, the stallholders, including Liga, sought an extension of their leasehold rights, which Ortigas denied.
- Despite the expiration, Liga was allowed to remain in possession until Ortigas informed the Greenhills Shoppesville Unit Lessees’ Association, Inc. (GSULAI) about leasing the GSA to Allegro.
Lease Agreement with Allegro
- On September 3, 2001, Ortigas and Allegro executed a Contract of Lease, which allowed Allegro to take immediate possession of the premises.
- Allegro subsequently offered to sublease Unit No. 26 to Liga, who agreed to a monthly rental of P40,000, starting September 1, 2001, and to pay back rentals to Ortigas for January to August 2001.
- Liga paid P80,000 as one month’s advance rental and one m