Felisa Chan v. Hon. Court of Appeals

Summary

This Supreme Court case involved a landlord-tenant dispute where Grace Cu filed a consignation case after landlord Felisa Chan refused rental payments and sought to terminate the lease. The Metropolitan Trial Court and Regional Trial Court ruled in favor of Cu, validating the consignation and extending the lease until June 30, 1992. However, the Court of Appeals reversed, dismissing the consignation case and ruling that ejectment claims cannot be raised via counterclaim. The Supreme Court granted Chan's petition, reinstating the lower courts' decisions. The Court held that Chan's ejectment counterclaim was proper as a compulsory counterclaim necessarily connected to the lease transaction, and that the Court of Appeals erred in addressing issues not raised before it. The decision clarified the procedural rules on consignation and counterclaims in landlord-tenant disputes, affirming the trial court's authority to extend lease periods under Civil Code Article 1687.