Espiritu vs. Cipriano

A statute regulating rentals affects substantive rights and must be construed prospectively, absent an express legislative intent for retroactive application.

Petitioners are the owners of a parcel of land leased to private respondent since 1954, on which the latter built his house. The lease was originally on a year-to-year basis. The dispute arose when petitioners increased the rental and converted the lease to a month-to-month basis effective January 1969, which private respondent refused to pay, prompting an unlawful detainer suit.

Petitioners Primitivo Espiritu and Leonora A. de Espiritu own a parcel of land in Pasig, Rizal, which they have leased to private respondent Ricardo Cipriano since 1954. With petitioners' knowledge and consent, Cipriano built his house on the property pursuant to an oral contract of lease. Prior to 1969, the lease was on a year-to-year basis, with rentals payable at or before the end of the year. The rental rates increased over time, starting at P12.00 a year from 1954 to 1957, and eventually reaching P48.00 a year from 1967 to 1968.

Effective January 1969, petitioners converted the lease to a month-to-month basis and increased the rental to P30.00 a month. Cipriano remained in possession of the property but did not pay the rental at the new monthly rate from January 1969 onwards. On March 22, 1969, petitioners sent a formal notice to vacate to Cipriano by registered mail, which he received.

On May 30, 1969, petitioners filed an unlawful detainer case against Cipriano in the Municipal Court of Pasig, Rizal. An adverse judgment was rendered against Cipriano, who then appealed to the Court of First Instance of Rizal, where the case was docketed as Civil Case No. 338-M. The parties submitted a stipulation of facts. Cipriano moved to dismiss the complaint, invoking Republic Act No. 6126, which prohibited the increase of rentals for dwelling units not exceeding P300.00 a month for one year from March 31, 1970. The trial court sustained the motion to dismiss on August 4, 1970, and denied the motion for reconsideration on October 16, 1970, prompting petitioners to elevate the case to the Supreme Court via certiorari.

• Retroactivity: Petitioners argued that Republic Act No. 6126 should not be applied retroactively to the case, as the rental increase was effected in January 1969, a year and a half before the law took effect on June 17, 1970.

• Lack of Consent: Respondent argued that there was no perfected contract covering the increased rental rate because he did not give his consent to the new rate, meaning the new contract of lease was never agreed upon.
• Remedial Nature: Respondent contended that Republic Act No. 6126 is a remedial law and may, therefore, be given retroactive effect.

• Retroactivity of R.A. No. 6126: Whether Republic Act No. 6126, the Rental Law, may be applied retroactively to a case involving a rental increase effected prior to the law's approval.
• Validity of the Rental Increase: Whether private respondent's lack of consent to the increased rental rate renders the new contract of lease ineffective.

• Retroactivity of R.A. No. 6126: No. Republic Act No. 6126 cannot be applied retroactively because it affects substantive rights and lacks express legislative intent for retroactive application.
• Validity of the Rental Increase: No. The lack of consent does not invalidate the rental increase because the prior yearly contract had already expired, giving the lessor the right to fix a higher rental.

• Retroactivity of R.A. No. 6126: The law affects substantive rights, not merely procedural remedies, requiring a strict and prospective construction pursuant to Article 4 of the New Civil Code. The law's express terms limit its operation to a one-year period from March 31, 1970, and do not purport to give retroactive operation. The rule of statutory construction "Expressium facit cessare tacitum" applies, meaning no reasonable implication of retroactive intent may be accorded. Congressional deliberations further confirmed that the sponsors intended the law to freeze current, not past, rentals.
• Validity of the Rental Increase: The stipulation of facts does not show that respondent's consent to the rental increase was essential to its validity. The previous year-to-year lease had already expired when the increase took effect in January 1969. The lessor was thus free to fix a higher amount, and if the lessee disagreed, his remedy was to vacate the premises, not to retain possession while refusing to pay the increased rate.

• Prospectivity of Laws — Laws shall have no retroactive effect unless the contrary is provided, as ordained by Article 4 of the New Civil Code. Statutes affecting substantive rights are construed prospectively unless retroactive intent is expressly declared or necessarily implied from the language of the enactment.
• Expressium facit cessare tacitum — "That which is expressed puts an end to that which is implied." This principle of statutory construction dictates that when a law expressly provides for its scope and period of operation, no implied retroactive effect may be read into it.

• "A close study of the provisions discloses that far from being remedial, the statute affects substantive rights and hence a strict and prospective construction thereof is in order. Article 4 of the New Civil Code ordains that laws shall have no retroactive effect unless the contrary is provided and that where the law is clear, Our duty is equally plain. We must apply it to the facts as found." — This passage articulates the ratio decidendi, establishing that the Rental Law is substantive in nature and therefore subject to the rule on prospectivity of laws.
• "There was no more subsisting yearly contract of lease at a fixed amount. It had already expired when the increase and conversion into monthly payments took effect in January, 1969. The lessor was free to fix a higher amount than that previously paid by the lessee (private respondent herein) and if the latter did not agree to the increased amount, he could have vacated the premises and thus rendered himself free from liability." — This explains the Court's reasoning on the validity of the rental increase despite the lessee's lack of consent, emphasizing the lessor's right upon the expiration of the previous lease.

• La Previsora Filipina, Mutual Building and Loan Association vs. Felix Ledda, 66 Phil. 573 — Cited as controlling precedent for the principle that civil laws have no retroactive effect unless otherwise provided, and that the applicability of a law is determined by the date the contract was entered into, not the date of a subsequent event.

• Article 4, Civil Code of the Philippines — Provides that laws shall have no retroactive effect unless the contrary is provided. Applied to hold that Republic Act No. 6126 must be construed prospectively.
• Section 1, Republic Act No. 6126 (Rental Law) — Prohibits lessors from increasing monthly rental agreed upon prior to the Act's approval for one year from March 31, 1970. Interpreted to apply only prospectively from its effectivity.

Makalintal, C.J., Castro, Teehankee, Makasiar and Muñoz Palma, JJ.