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G.R. No. 122544. January 28, 1999.
Actions; Leases; Where the rentals are paid monthly, the lease, even if verbal may be
deemed to be on a monthly basis, expiring at the end of every month pursuant to Article
1687, in relation to Article 1673 of the Civil Code, and in such case, a demand to vacate is
not even necessary for judicial action after the expiration of every month.—Admittedly, no
definite period beyond the one-year term of lease was agreed upon by petitioners and private
respondent. However, since the rent was paid on a monthly basis, the period of lease is
considered to be from month to month in accordance with Article 1687 of the New Civil
Code. Where the rentals are paid monthly, the lease, even if verbal may be deemed to be on
a monthly basis, expiring at the end of every month pursuant to Article 1687, in relation to
Article 1673 of the Civil Code. In such case, a demand to vacate is not even necessary for
judicial action after the expiration of every month.
Same; Same; Options to Purchase; Ejectment; Specific Performance; Jurisdiction; The
filing by the lessee of a suit with the Regional Trial Court for specific performance to
enforce the option to purchase does not divest the then City Court of its jurisdiction to take
cognizance of the ejectment case.—When private respondent failed to
________________
* FIRST DIVISION.
VOL. 302, JANUARY 28, 1999 289
pay the increased rental of P8,000.00 per month in June 1976, the petitioners had a cause of
action to institute an ejectment suit against the former with the then City Court. In this
regard, the City Court (now MTC) had exclusive jurisdiction over the ejectment suit. The
filing by private respondent of a suit with the Regional Trial Court for specific performance
to enforce the option to purchase did not divest the then City Court of its jurisdiction to take
cognizance over the ejectment case. Of note is the fact that the decision of the City Court
was affirmed by both the Intermediate Appellate Court and this Court.
Same; Same; Same; Where a lessee fails to exercise the option to purchase within the
stipulated period, he cannot enforce such option anymore.—Having failed to exercise the
option within the stipulated one-year period, private respondent cannot enforce its option to
purchase anymore. Moreover, even assuming arguendo that the right to exercise the option
still subsists at the time private respondent tendered the amount on June 20, 1975, the suit
for specific performance to enforce the option to purchase was filed only on October 7,
1985 or more than ten (10) years after accrual of the cause of action as provided under
Article 1144 of the New Civil Code.
Contracts; Leases; Options to Purchase; The other terms of the original contract of
lease which are revived in the implied new lease under Article 1670 of the New Civil Code
are only those terms which are germane to the lessee’s right of continued enjoyment of the
property leased—an implied new lease does not ipso facto carry with it any implied revival
of any option to purchase the leased premises.—In this case, there was a contract of lease
for one (1) year with option to purchase. The contract of lease expired without the private
respondent, as lessee, purchasing the property but remained in possession thereof. Hence,
there was an implicit renewal of the contract of lease on a monthly basis. The other terms
of the original contract of lease which are revived in the implied new lease under Article
1670 of the New Civil Code are only those terms which are germane to the lessee’s right of
continued enjoyment of the property leased. Therefore, an implied new lease does not ipso
facto carry with it any implied revival of private respondent’s option to purchase (as lessee
thereof) the leased premises. The provision entitling the lessee the option to purchase the
leased premises is not deemed incorporated in the impliedly renewed contract because it is
alien to the possession of the lessee.
290 SUPREME COURT REPORTS ANNOTATED
Same; Same; Same; Presumptions; If the presumed will of the parties refers to the
enjoyment of possession the presumption covers the other terms of the contract related to
such possession, such as the amount of rental, the date when it must be paid, the care of the
property, the responsibility for repairs, etc., but no such presumption may be indulged in
with respect to special agreements which by nature are foreign to the right of occupancy or
enjoyment inherent in a contract of lease.—Private respondent’s right to exercise the option
to purchase expired with the termination of the original contract of lease for one year. The
rationale of this Court is that: “This is a reasonable construction of the provision, which is
based on the presumption that when the lessor allows the lessee to continue enjoying
possession of the property for fifteen days after the expiration of the contract he is willing
that such enjoyment shall be for the entire period corresponding to the rent which is
customarily paid—in this case up to the end of the month because the rent was paid
monthly. Necessarily, if the presumed will of the parties refers to the enjoyment of
possession the presumption covers the other terms of the contract related to such
possession, such as the amount of rental, the date when it must be paid, the care of the
property, the responsibility for repairs, etc. But no such presumption may be indulged in
with respect to special agreements which by nature are foreign to the right of occupancy or
enjoyment inherent in a contract of lease.”
Same; Sales; Sale is a consensual contract and he who alleges it must show its
existence by competent proof.—Under Article 1475 of the New Civil Code, “the contract of
sale is perfected at the moment there is a meeting of minds upon the thing which is the
object of the contract and upon the price. From that moment, the parties may reciprocally
demand performance, subject to the provisions of the law governing the form of contracts.”
Thus, the elements of a contract of sale are consent, object, and price in money or its
equivalent. It bears stressing that the absence of any of these essential elements negates the
existence of a perfected contract of sale. Sale is a consensual contract and he who alleges it
must show its existence by competent proof.
Same; Same; Agency; The basis for agency is representation and a person dealing with
an agent is put upon inquiry and must discover upon his peril the authority of the agent.
—In an attempt to resurrect the lapsed option, private respondent gave P300,000.00 to
petitioners (thru Alice A. Dizon) on the erroneous presumption that the said
VOL. 302, JANUARY 28, 1999 291
amount tendered would constitute a perfected contract of sale pursuant to the contract of
lease with option to buy. There was no valid consent by the petitioners (as co-owners of the
leased premises) on the supposed sale entered into by Alice A. Dizon, as petitioners’ alleged
agent, and private respondent. The basis for agency is representation and a person dealing
with an agent is put upon inquiry and must discover upon his peril the authority of the agent.
As provided in Article 1868 of the New Civil Code, there was no showing that petitioners
consented to the act of Alice A. Dizon nor authorized her to act on their behalf with regard
to her transaction with private respondent. The most prudent thing private respondent
should have done was to ascertain the extent of the authority of Alice A. Dizon. Being
negligent in this regard, private respondent cannot seek relief on the basis of a supposed
agency.
PETITIONS for review on certiorari of the decisions and resolutions of the Court of
Appeals.
The facts are stated in the opinion of the Court.
M.M. Lazaro & Associates for petitioners.
Alexander G. Castro for private respondents.
MARTINEZ, J.:
Two consolidated petitions were filed before us seeking to set aside and annul the
decisions and resolutions of respondent Court of Appeals. What seemed to be a simple
ejectment suit was juxtaposed with procedural intricacies which finally found its way to
this Court.
On May 23, 1974, private respondent Overland Express Lines, Inc. (lessee) entered
1
into a Contract of Lease with Option to Buy with petitioners (lessors) involving a
1,755.80 square meter parcel of land situated at corner MacArthur
_______________
1 T he original petitioners were Fidela P . Dizon, Regina Dizon, Amparo D. Bartolome, Ester A. Dizon, Alice
A. Dizon and Fidelina D. Balza.
292 SUPREME COURT REPORTS ANNOTATED
Dizon vs. Court of Appeals
Highway and South “H” Street, Diliman, Quezon City. The term of the lease was for
one (1) year commencing from May 16, 1974 up to May 15, 1975. During this period,
private respondent was granted an option to purchase for the amount of P3,000.00 per
square meter. Thereafter, the lease shall be on a per month basis with a monthly rental
of P3,000.00.
For failure of private respondent to pay the increased rental of P8,000.00 per
month effective June 1976, petitioners filed an action for ejectment (Civil Case No.
VIII-29155) on November 10, 1976 before the then City Court (now Metropolitan
Trial Court) of Quezon City, Branch VIII. On November 22, 1982, the City Court
2
rendered judgment ordering private respondent to vacate the leased premises and to
pay the sum of P624,000.00 representing rentals in arrears and/or as damages in the
form of reasonable compensation for the use and occupation of the premises during the
period of illegal detainer from June 1976 to November 1982 at the monthly rental of
P8,000.00, less payments made, plus 12% interest per annum from November 18,
1976, the date of filing of the complaint, until fully paid, the sum of P8,000.00 a month
starting December 1982, until private respondent fully vacates the premises, and to pay
P20,000.00 as and by way of attorney’s fees.
Private respondent filed a certiorari petition praying for the issuance of a restraining
order enjoining the enforcement of said judgment and dismissal of the case for lack of
jurisdiction of the City Court.
3
On September 26, 1984, the then Intermediate Appellate Court (now Court of
4
Appeals) rendered a decision stating that:
________________
2 P er Judge Fernando Gorospe, Jr.
3 T he Intermediate Appellate Court took cognizance over the case after it was referred by the Supreme Court.
4 P enned by Justice Simeon M. Gopengco and concurred in by Justices Lino M. P atajo, Jose F. Racela, Jr. and
Fidel P . P urisima; Annex “ A” of P etition; Rollo, p. 60.
VOL. 302, JANUARY 28, 1999 293
Dizon vs. Court of Appeals
“x x x, the alleged question of whether petitioner was granted an extension of the option to
buy the property; whether such option, if any, extended the lease or whether petitioner
actually paid the alleged P300,000.00 to Fidela Dizon, as representative of private
respondents in consideration of the option and, whether petitioner thereafter offered to pay
the balance of the supposed purchase price, are all merely incidental and do not remove the
unlawful detainer case from the jurisdiction of respondent court. In consonance with the
ruling in the case of Teodoro, Jr. vs. Mirasol (supra), the above matters may be raised and
decided in the unlawful detainer suit as, to rule otherwise, would be a violation of the
principle prohibiting multiplicity of suits. (Original Records, pp. 38-39).”
The motion for reconsideration was denied. On review, this Court dismissed the
petition in a resolution dated June 19, 1985 and likewise denied private respondent’s
5
subsequent motion for reconsideration in a resolution dated September 9, 1985.
On October 7, 1985, private respondent filed before the Regional Trial Court
(RTC) of Quezon City (Civil Case No. Q-45541) an action for Specific Performance
and Fixing of Period for Obligation with prayer for the issuance of a restraining order
pending hearing on the prayer for a writ of preliminary injunction. It sought to compel
the execution of a deed of sale pursuant to the option to purchase and the receipt of the
partial payment, and to fix the period to pay the balance. In an Order dated October
25, 1985, the trial court denied the issuance of a writ of preliminary injunction on the
ground that the decision of the then City Court for the ejectment of the private
respondent, having been affirmed by the then
________________
5 “ Whatever claims petitioner (private respondent herein) may have as to what it allegedly paid to and
received by private respondent Fidela Dizon, under the receipt issued by Mrs. Alicia Dizon, or with regard to the
enforceability or non-enforceability of its stated option to buy, against the private respondents (petitioners
herein), which were matters merely raised as defenses of the petitioner in the unlawful detainer suit filed against it
may be better presented for ultimate resolution in a separate suit and before the proper forum”; Annex “ A” of
P etition in G.R. No. 124741; Rollo, p. 48.
294 SUPREME COURT REPORTS ANNOTATED
Dizon vs. Court of Appeals
Intermediate Appellate Court and the Supreme Court, has become final and executory.
Unable to secure an injunction, private respondent also filed before the RTC of
Quezon City, Branch 102 (Civil Case No. Q-46487) on November 15, 1985 a
complaint for Annulment of and Relief from Judgment with injunction and damages. In
6
its decision dated May 12, 1986, the trial court dismissed the complaint for annulment
on the ground of res judicata, and the writ of preliminary injunction previously issued
was dissolved. It also ordered private respondent to pay P3,000.00 as attorney’s fees.
As a consequence of private respondent’s motion for reconsideration, the preliminary
injunction was reinstated, thereby restraining the execution of the City Court’s judgment
on the ejectment case.
The two cases were thereafter consolidated before the RTC of Quezon City,
7
Branch 77. On April 28, 1989, a decision was rendered dismissing private
respondent’s complaint in Civil Case No. Q-45541 (specific performance case) and
denying its motion for reconsideration in Civil Case No. 46487 (annulment of the
ejectment case). The motion for reconsideration of said decision was likewise denied.
8 9
On appeal, respondent Court of Appeals rendered a decision upholding the
jurisdiction of the City Court of Quezon City in the ejectment case. It also concluded
that there was a perfected contract of sale between the parties on the leased premises
and that pursuant to the option to buy agreement, private respondent had acquired the
rights of a vendee in a contract of sale. It opined that the payment by private re-
______________
6 P er Judge Wilhelmo C. Fortun.
7 P er Judge Ignacio L. Salvador.
8 Docketed as CA-G.R. CV Nos. 25153-54, entitled “ OVERLAND EXP RESS LINES, INC., P laintiff-
Appellant vs. FIDELA P . DIZON, ET AL., Defendants-Appellees.”
9 CA Decision (Eighth Division) dated March 29, 1994, penned by Justice Eubulo G. Verzola, and concurred in
by Justice Ricardo J. Francisco, Chairman and Justice Serafin V.C. Guingona; Annex “ A” of P etition; Rollo, pp.
57-72.
VOL. 302, JANUARY 28, 1999 295
Dizon vs. Court of Appeals
spondent of P300,000.00 on June 20, 1975 as partial payment for the leased property,
which petitioners accepted (through Alice A. Dizon) and for which an official receipt
was issued, was the operative act that gave rise to a perfected contract of sale, and that
for failure of petitioners to deny receipt thereof, private respondent can therefore
assume that Alice A. Dizon, acting as agent of petitioners, was authorized by them to
receive the money in their behalf. The Court of Appeals went further by stating that in
fact, what was entered into was a “conditional contract of sale” wherein ownership
over the leased property shall not pass to the private respondent until it has fully paid
the purchase price. Since private respondent did not consign to the court the balance of
the purchase price and continued to occupy the subject premises, it had the obligation
to pay the amount of P1,700.00 in monthly rentals until full payment of the purchase
price. The dispositive portion of said decision reads:
“WHEREFORE, the appealed decision in Case No. 46487 is AFFIRMED. The appealed
decision in Case No. 45541 is, on the other hand, ANNULLED and SET ASIDE. The
defendants-appellees are ordered to execute the deed of absolute sale of the property in
question, free from any lien or encumbrance whatsoever, in favor of the plaintiff-appellant,
and to deliver to the latter the said deed of sale, as well as the owner’s duplicate of the
certificate of title to said property upon payment of the balance of the purchase price by the
plaintiff-appellant. The plaintiff-appellant is ordered to pay P1,700.00 per month from June
1976, plus 6% interest per annum, until payment of the balance of the purchase price, as
previously agreed upon by the parties.
SO ORDERED.”
Upon denial of the motion for partial reconsideration (Civil Case No. Q-45541) by
10
respondent Court of Appeals, petition-
______________
10 CA Resolution (Thirteenth Division) dated October 19, 1995, penned by Justice Eubulo G. Verzola, and
concurred in by Justice Justo P . T orres, Jr., Chairman and Justice Oswaldo D. Agcaoili; Annex “ B” of P etition;
Rollo, pp. 74-78.
296 SUPREME COURT REPORTS ANNOTATED
Dizon vs. Court of Appeals
ers elevated the case via petition for certiorari questioning the authority of Alice A.
Dizon as agent of petitioners in receiving private respondent’s partial payment
amounting to P300,000.00 pursuant to the Contract of Lease with Option to Buy.
Petitioners also assail the propriety of private respondent’s exercise of the option when
it tendered the said amount on June 20, 1975 which purportedly resulted in a perfected
contract of sale.
Petitioners filed with respondent Court of Appeals a motion to remand the records of
Civil Case No. 38-29155 (ejectment case) to the Metropolitan Trial Court (MTC),
11
then City Court of Quezon City, Branch 38, for execution of the judgment dated
November 22, 1982 which was granted in a resolution dated June 29, 1992. Private
respondent filed a motion to reconsider said resolution which was denied.
Aggrieved, private respondent filed a petition for certiorari, prohibition with
preliminary injunction and/or restraining order with this Court (G.R. Nos. 106750-51)
which was dismissed in a resolution dated September 16, 1992 on the ground that the
same was a refiled case previously dismissed for lack of merit. On November 26,
1992, entry of judgment was issued by this Court.
On July 14, 1993, petitioners filed an urgent ex-parte motion for execution of the
decision in Civil Case No. 38-29155 with the MTC of Quezon City, Branch 38. On
September 13, 1993, the trial court ordered the issuance of a third alias writ of
execution. In denying private respondent’s motion for reconsideration, it ordered the
immediate implementation of the third writ of execution without delay.
On December 22, 1993, private respondent filed with the Regional Trial Court
(RTC) of Quezon City, Branch 104 a petition for certiorari and prohibition with
preliminary in-
_______________
11 See note 2.
VOL. 302, JANUARY 28, 1999 297
Dizon vs. Court of Appeals
“The avowed purpose of this petition is to enjoin the public respondent from restraining the
ejectment of the private respondent. To grant the petition would be to allow the ejectment of
the private respondent. We cannot do that now in view of the decision of this Court in CA-
G.R. CV Nos. 25153-54. Petitioners’ alleged right to eject private respondent has been
demonstrated to be without basis in the said civil case. The petitioners have been shown,
after all, to have no right to eject private respondents.
WHEREFORE, the 15
petition is DENIED due course and is accordingly DISMISSED.
SO ORDERED.”
16
Petitioners’ motion for reconsideration was denied in a resolution by the Court of
Appeals stating that:
“This court in its decision in CA-G.R. CV Nos. 25153-54 declared that the plaintiff-appellant
(private respondent herein) acquired the rights of a vendee in a contract of sale, in effect,
recognizing the right of the private respondent to possess the subject premises. Considering
said decision, we should not allow ejectment; to do so would disturb the status quo of the
parties since the petitioners are not in possession of the subject property. It would be unfair
and unjust to deprive the private respondent of its possession of the subject property after
its rights have been established in a subsequent ruling.
____________
Justo P . T orres, Jr., Chairman and Justice Oswaldo D. Agcaoili; Annex “ A” of P etition; Rollo, pp. 46-53.
NOT E: CA-G.R. SP No. 33113 was transferred to the T hirteenth Division by virtue of the Resolution from
the Fifteenth Division dated January 16, 1994 (pursuant to Section 7, Rule 3 of the Revised Internal Rules of the
Court of Appeals) which states that a Special Case may be consolidated to the Justice to whom the civil case is
assigned for study or report when the cases involve the same parties and/or related questions of fact and/or law.
15 Ibid., Rollo, p. 52.
16 CA Resolution (Special Form er Thirteenth Division) dated April 23, 1997, penned by Justice Eubulo G.
Verzola, and concurred in by Justice Jaime M. Lantin (New member vice J. T orres, Jr.) and Justice B.A. Adefuin-
dela Cruz (Vice J. Agcaoili, pursuant to Office Order No. 19-96-DP ); Annex “ B” of P etition; Rollo, pp. 55-57.
VOL. 302, JANUARY 28, 1999 299
Dizon vs. Court of Appeals
20
necessary for judicial action after the expiration of every month.
When private respondent failed to pay the increased rental of P8,000.00 per month
in June 1976, the petitioners had a cause of action to institute an ejectment suit against
the former with the then City Court. In this regard, the City Court (now MTC) had
exclusive jurisdiction over the ejectment suit. The filing by private respondent of a suit
with the Regional Trial Court for specific performance to enforce the option to
purchase did not divest the then City Court of its jurisdiction to take cognizance over
the ejectment case. Of note is the fact that the decision of the City Court was affirmed
by both the Intermediate Appellate Court and this Court.
Second. Having failed to exercise the option within the stipulated one-year period,
private respondent cannot enforce its option to purchase anymore. Moreover, even
assuming arguendo that the right to exercise the option still subsists at the time private
respondent tendered the amount on June 20, 1975, the suit for specific performance to
enforce the option to purchase was filed only on October 7, 1985 or more than ten
(10) years after accrual
21
of the cause of action as provided under Article 1144 of the
New Civil Code.
In this case, there was a contract of lease for one (1) year with option to purchase.
The contract of lease expired without the private respondent, as lessee, purchasing the
property but remained in possession thereof. Hence, there was an implicit renewal of
the contract of lease on a monthly basis. The other terms of the original contract of
lease which are revived in the
_________________
(1) When the period agreed upon, or that which is fixed for the duration of lease under Articles 1682 and 1687, has expired; x x
x.”
20 Ibid., citing Racaza vs. Susan Realty, Inc., 18 SCRA 1172, 1176-1177 [1966].
21 “ Article 1144. T he following actions must be brought within ten years from the time the right of action
accrues:
xxx x x x.”
VOL. 302, JANUARY 28, 1999 301
Dizon vs. Court of Appeals
22
implied new lease under Article 1670 of the New Civil Code are only those terms 23
which are germane to the lessee’s right of continued enjoyment of the property leased.
Therefore, an implied new lease does not ipso facto carry with it any implied revival of
private respondent’s option to purchase (as lessee thereof) the leased premises. The
provision entitling the lessee the option to purchase the leased premises is not deemed
incorporated in the impliedly renewed contract because it is alien to the possession of
the lessee. Private respondent’s right to exercise the option to purchase expired with
the termination of the original contract of lease for one year. The rationale of this Court
is that:
“This is a reasonable construction of the provision, which is based on the presumption that
when the lessor allows the lessee to continue enjoying possession of the property for fifteen
days after the expiration of the contract he is willing that such enjoyment shall be for the
entire period corresponding to the rent which is customarily paid—in this case up to the end
of the month because the rent was paid monthly. Necessarily, if the presumed will of the
parties refers to the enjoyment of possession the presumption covers the other terms of the
contract related to such possession, such as the amount of rental, the date when it must be
paid, the care of the property, the responsibility for repairs, etc. But no such presumption
may be indulged in with respect to special agreements which by 24
nature are foreign to the
right of occupancy or enjoyment inherent in a contract of lease.”
Third. There was no perfected contract of sale between petitioners and private
respondent. Private respondent argued
_______________
22 “Article 1670. If at the end of the contract, the lessee should continue enjoying the thing leased for fifteen
days with the acquiescence of the lessor, and unless a notice to the contrary by either party has previously been
given, it is understood that there is an implied new lease, not for the period of the original contract, but for the
time established in Articles 1682 and 1687. T he other terms of the original contract shall be revived.”
23 Dizon vs. Magsaysay, 57 SCRA 250, 254 [1974].
24 Ibid.
302 SUPREME COURT REPORTS ANNOTATED
Dizon vs. Court of Appeals
that it delivered the check of P300,000.00 to Alice A. Dizon who acted as agent of
petitioners pursuant to the supposed authority given by petitioner Fidela Dizon, the
payee thereof. Private respondent further contended that petitioners’ filing of the
ejectment case against it based on the contract of lease with option to buy holds
petitioners in estoppel to question the authority of petitioner Fidela Dizon. It insisted
that the payment of P300,000.00 as partial payment of the purchase price constituted a
valid exercise of the option to buy.
Under Article 1475 of the New Civil Code, “the contract of sale is perfected at the
moment there is a meeting of minds upon the thing which is the object of the contract
and upon the price. From that moment, the parties may reciprocally demand
performance, subject to the provisions of the law governing the form of contracts.”
Thus, the elements of a contract of sale are consent, object, and price in money or its
equivalent. It bears stressing that the absence of any of these essential elements negates
the existence of a perfected contract of sale. Sale is a25consensual contract and he who
alleges it must show its existence by competent proof.
In an attempt to resurrect the lapsed option, private respondent gave P300,000.00
to petitioners (thru Alice A. Dizon) on the erroneous presumption that the said amount
tendered would constitute a perfected contract of sale pursuant to the contract of lease
with option to buy. There was no valid consent by the petitioners (as co-owners of the
leased premises) on the supposed sale entered into by Alice A. Dizon, as petitioners’
alleged agent, and private respondent. The basis for agency is representation and a
person dealing with an26 agent is put upon inquiry and must discover upon his peril27
the
authority of the agent. As provided in Article 1868 of the New Civil Code, there
was no showing that petitioners con-
________________
25 Villanueva vs. Court of Appeals, 267 SCRA 89, 101 [1997].
26 See Bordador vs. Luz, 283 SCRA 374, 382 [1997].
27 “Article 1868. By the contract of agency, a person binds himself to render some service or to do something
in representation or on behalf of another, with the consent or authority of the latter.”
VOL. 302, JANUARY 28, 1999 303
Dizon vs. Court of Appeals
sented to the act of Alice A. Dizon nor authorized her to act on their behalf with regard
to her transaction with private respondent. The most prudent thing private respondent
should have done was to ascertain the extent of the authority of Alice A. Dizon. Being
negligent in this regard, private respondent cannot seek relief on the basis of a
supposed agency. 28
In Bacaltos Coal Mines vs. Court of Appeals, we explained the rule in dealing
with an agent:
“Every person dealing with an agent is put upon inquiry and must discover upon his peril the
authority of the agent. If he does not make such inquiry, he is chargeable with knowledge of
the agent’s authority, and his ignorance of that authority will not be any excuse. Persons
dealing with an assumed agent, whether the assumed agency be a general or special one, are
bound at their peril, if they would hold the principal, to ascertain not only the fact of the
agency but also the nature and extent of the authority, and in case either is controverted, the
burden of proof is upon them to establish it.”
For the long years that private respondent was able to thwart the execution of the
ejectment suit rendered in favor of petitioners, we now write finis to this controversy
and shun further delay so as to ensure that this case would really attain finality.
WHEREFORE, in view of the foregoing, both petitions are GRANTED. The
decision dated March 29, 1994 and the resolution dated October 19, 1995 in CA-
G.R. CV Nos. 25153-54, as well as the decision dated December 11, 1995 and the
resolution dated April 23, 1997 in CA-G.R. SP No. 33113 of the Court of Appeals
are hereby REVERSED and SET ASIDE.
_____________
28 245 SCRA 460, 467 citing the cases of P ineda vs. Court of Appeals, 226 SCRA 754 [1993], Veloso vs. La
Urbana, 58 P hil. 681 [1933], Harry E. Keller Electric Co. vs. Rodriguez, 44 P hil. 19 [1922], Deen vs. P acific
Commercial Co., 42 P hil. 738 [1922], and Strong vs. Repide, 6 P hil. 680 [1906].
304 SUPREME COURT REPORTS ANNOTATED
Dizon vs. Court of Appeals
Let the records of this case be remanded to the trial court for immediate execution of
the judgment dated November 22, 1982 in Civil Case No. VIII-29155 of the then City
Court (now Metropolitan Trial Court) of Quezon City, Branch VIII as affirmed in the
decision dated September 26, 1984 of the then Intermediate Appellate Court (now
Court of Appeals) and in the resolution dated June 19, 1985 of this Court.
However, petitioners are ordered to REFUND to private respondent the amount of
P300,000.00 which they received through Alice A. Dizon on June 20, 1975.
SO ORDERED.
Davide, Jr. (C.J., Chairman), Melo, Kapunan and Pardo, JJ., concur.
Petitions granted.
Notes.—Tacit renewal under Art. 1670 of the Civil Code is limited only to the
terms of the contract which are germane to the lessee’s right of continued enjoyment of
the property and does not extend to alien matters, like the option to buy the leased
premises. (Vda. de Chua vs. Intermediate Appellate Court, 229 SCRA 99 [1994])
A lessor’s acquiescence to lessee’s continued possession of a personal property is
in effect a continuation of the contract under the concept of an implied new lease on a
month to month basis under Article 1670 of the Civil Code. (Manahan, Jr. vs. Court
of Appeals, 255 SCRA 202 [1996])
——o0o——