Explore the landmark case of Cetus Development, Inc. vs. Limcaoco, where the Supreme Court of the Philippines protected tenant rights by ruling that a landlord cannot file an ejectment suit without a proper cause of action and demand for payment. Gain insights into the legal doctrines and implications of this decision on tenant-landlord relationships.
FACTS: Private respondents were lessees of premises located at No. 512 Quezon Boulevard, Quiapo, Manila, under month-to-month verbal leases. Susana Realty sold the leased premises to petitioner Cetus Development, Inc. in March 1984. Respondents continued to pay their monthly rentals to a collector sent by the petitioner until July, August, and September 1984, when no collector came. On October 9, 1984, the petitioner sent letters demanding that the respondents vacate the premises and pay back rentals within 15 days. Upon receipt of the demand letters, the respondents paid the arrearages, which the petitioner accepted subject to the condition that it was without prejudice to filing an ejectment suit.
ISSUES: (1) Whether a cause of action for unlawful detainer exists, and (2) Whether the acceptance of the tendered payment constitutes a waiver of the cause of action for ejectment
RESOLUTION: The court held that no cause of action for ejectment accrued, as there was no failure yet on the part of the private respondents to pay rents for three consecutive months. The demand for payment of rentals when the obligation matured was not proven, and the respondents cannot be held guilty of delay in the payment of rentals. When the petitioner first demanded the payment of the 3-month arrearages, and the private respondents promptly made tender and payment, which the petitioner accepted, the cause of action for ejectment did not accrue. Hence, the demand to vacate was premature as it was an exercise of a non-existing right to rescind.
Says the Supreme Court: "We hold that the demand required and contemplated in Section 2, aforequoted, is a jurisdictional requirement for the purpose of bringing an unlawful detainer suit for failure to pay rent or comply with the conditions of lease. It partakes of an extrajudicial remedy that must be pursued before resorting for judicial action so much so that when there is full compliance with the demand, there arises no necessity for court action."
The court also clarified that the acceptance of the tendered payment does not constitute a waiver of the cause of action for ejectment, especially when accepted with the written condition that it was "without prejudice to the filing of an ejectment suit." However, this argument presupposes that a cause of action for ejectment has already accrued, which is not true in this case.
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