Facts:

Marcelo L. Ongsitco was the lessee of a property located at 2044 Velasquez, Tondo, Manila, which was originally owned by Catalino Luciano. The property was foreclosed by China Banking Corporation due to Luciano's failure to pay his loan, and it was subsequently purchased by United Plaza Realty Corporation (United). There was no written lease agreement between Ongsitco and United.

Due to Ongsitco's failure to pay rent, United filed an ejectment suit against him in the Metropolitan Trial Court of Manila, which resulted in a judgment ordering Ongsitco to vacate the premises and pay substantial amounts for unpaid rent and attorney's fees. Ongsitco appealed the decision to the Regional Trial Court, which affirmed the lower court's ruling but modified the monthly rental amount.

After the Regional Trial Court's decision, Ongsitco filed a "Petition for Certiorari, Prohibition and Mandamus" in the Court of Appeals, which was beyond the 15-day reglementary period for filing a petition for review. Ongsitco died shortly after filing the petition, and his heirs sought to substitute him in the case. The Court of Appeals dismissed the petition, ruling that Ongsitco's death legally terminated the lease and that his heirs had no right to occupy the property. The court also held that certiorari could not be used as a substitute for a lost appeal.

Legal Issues:

  1. Did the Court of Appeals err in ruling that the lease was terminated upon Ongsitco's death and that his heirs had no right to occupy the property?
  2. Was the Court of Appeals correct in holding that certiorari could not be used as a substitute for a lost appeal?
  3. Did the Court of Appeals err in considering the negligence of Ongsitco's former counsel as binding on him?
  4. Were Ongsitco's heirs entitled to recover the expenses incurred for improvements made on the leased property?

Arguments:

Petitioners' Arguments:

  • The Court of Appeals misapplied the doctrine from Fausta Dimaculangan vs. Intermediate Appellate Court, arguing that leasehold rights are inheritable and that the death of Ongsitco should not terminate the lease.
  • They contended that the Court of Appeals erred in not applying exceptions to the rule that certiorari cannot substitute for a lost appeal, particularly given the alleged gross negligence of Ongsitco's former counsel.
  • They argued that Ongsitco should be entitled to recover the P5 million spent on improvements made to the property, as not allowing this would result in unjust enrichment for United.

Respondent's Arguments:

  • United argued that the lease was legally terminated upon Ongsitco's death, and his heirs had no colorable right to occupy the property.
  • They maintained that the petition for certiorari was improperly filed as a substitute for a lost appeal, which is not permissible under established jurisprudence.
  • United contended that Ongsitco's former counsel's negligence was binding and that the petitioners failed to demonstrate any reversible error by the Court of Appeals.

Court's Decision and Legal Reasoning:

The Supreme Court upheld the Court of Appeals' decision, affirming that:

  1. The lease was indeed terminated upon Ongsitco's death, and his heirs had no legal standing to claim occupancy of the property.
  2. Certiorari could not be used as a substitute for a lost appeal, as the proper remedy for Ongsitco would have been a petition for review, which he failed to file within the reglementary period.
  3. The negligence of Ongsitco's counsel was binding on him, and the court emphasized the principle that clients are responsible for the actions of their counsel.
  4. The claim for reimbursement of the P5 million for improvements was denied, as Ongsitco, being a lessee, could not be considered a builder in good faith and thus was not entitled to recover such expenses.

The Court reiterated that the extraordinary remedies of certiorari, prohibition, and mandamus are only available when there is no other adequate remedy in the ordinary course of law, which was not the case here.

Significant Legal Principles Established:

  • The principle that a lease is terminated upon the death of the lessee, and such rights are not inheritable unless otherwise stipulated.
  • The established rule that certiorari cannot serve as a substitute for a lost appeal, reinforcing the importance of adhering to procedural timelines and remedies.
  • The binding nature of a client's counsel's actions, emphasizing the need for diligence in pursuing legal remedies.