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DATALIFT MOVERS v. BELGRAVIA REALTY

FACTS:

Sampaguita Brokerage, Inc. and Belgravia Realty & Development Corporation filed an ejectment case against Datalift Movers, Inc. and Jaime B. Aquino. The disputed premises is a warehouse located in Santibañez Street corner Cristobal Street, Pandacan, Manila. The warehouse stands on a lot owned by the Philippine National Railways (PNR) and leased to Sampaguita. Belgravia, the sister company of Sampaguita, sublet the warehouse to Datalift.

Datalift initially entered a 1-year lease contract with Belgravia, but continued to occupy the warehouse after the expiration of the contract. Belgravia unilaterally increased the monthly rental from P60,000 to P130,000. Datalift stopped paying rent due to the rental increase. Sampaguita demanded payment of rental in arrears and the vacation of the warehouse. When the demands were not met, Sampaguita and Belgravia filed a complaint for ejectment.

Datalift and Aquino filed an Answer with Counterclaim, arguing that Sampaguita had no cause of action against them, citing that they were not privy to the Datalift-Belgravia lease contract. They also claimed that Sampaguita was prohibited from subleasing the property based on the PNR-Sampaguita lease contract. Datalift and Aquino counterclaimed for refund of rentals paid, exemplary damages, and litigation expenses.

The MeTC rendered a decision in favor of Sampaguita and Belgravia, ordering the defendants to vacate the warehouse and pay rental arrearages at a reduced amount. The MeTC also rejected the defendants' challenge against Belgravia's title over the PNR lot.

The defendants appealed the decision to the RTC and then to the Court of Appeals, but their appeals were denied. They filed a petition for review with the Supreme Court seeking the reversal of the CA decision.

ISSUES:

  1. Whether Sampaguita Brokerage, Inc. has a cause of action against the defendants who are not parties nor privy to the Datalift-Belgravia contract of lease.

  2. Whether the sublease made by Sampaguita to Belgravia is prohibited under the PNR-Sampaguita contract of lease.

  3. Whether the PNR-Sampaguita contract of lease has expired.

  4. Whether Belgravia has a cause of action against the defendants, being neither the owner nor lessee of the lot where the warehouse stands.

RULING:

  1. The court ruled in favor of the plaintiffs and ordered the defendants to vacate and surrender the warehouse and pay rental arrearages and unpaid rentals. The MeTC decision was affirmed, with modifications.

PRINCIPLES:

  • A lessee who continues in possession and enjoyment of the leased property after the expiration of the lease contract does so either by acquiescence of the lessor or by verbal understanding of the parties.

  • Unilateral increase in rental amount may be considered arbitrary, highly unconscionable, and beyond the ambit of equity and justice.

  • In a complaint for ejectment, it is sufficient that the possession by the defendants is unlawful or unauthorized, regardless of the source of their claim.