#29 LEASE

G.R. No. 68021. February 20, 1989

HEIRS OF FAUSTA DIMACULANGAN, Petitioner, vs.
THE HONORABLE INTERMEDIATE APPELATE COURT and FELIMON  UY, Respondents.

FACTS:

Fausta Dimaculangan and her children, petitioners herein, occupy by lease an apartment at a monthly

rental of P250.00 since 1961. The family maintains a sari-sari store and bakes hot pandesal to sell to
the general public.

In July 1978, private respondent Uy sent Fausta a registered letter informing that the property they’re
leasing was sold to him and offer to sign a contract of lease for a period of 2 years with a monthly
rental of P1,500.00. Received no reply, respondent Uy sent a 2nd letter demanding payment of P750
covering  the  unpaid   months  of   August  to October 1978, but still he received no reply. An
ejectment case against Fausta was filed.

Fausta admitted that she received the first letter from Uy and sent a reply, however returned
undelivered because Uy’s address is distorted. She denied having been in default in her monthly
rentals to respondent Uy for she tried to pay. Respondent Uy did not want to collect the monthly
rentals, even in the form of money orders which were however, returned unclaimed.

It has been established that petitioners have been occupying the leased premises on a verbal contract
since 1961 at a monthly rent of P250.00, and that although no fixed period for the duration of the
lease has been agreed upon the original lessor and lessee, the rentals were paid monthly.

ISSUE:

Whether or not a trial court may alter the agreement of the parties by shortening the period of the
lease from an indefinite period to a fixed 2 years.

RULING:
YES. It is undisputed that the rentals are paid monthly, leases are deemed on a “month-to-month
basis”, provides for a definite period and may be terminated at the end of any month.

Even if that the agreement between the original lessor and lessee was unwritten, and difficult to
determine with certainty the terms and conditions agreed upon, Article 1687 of the Civil Code was
clear with indefinite or if the period for the lease has not been fixed:
Art. 1687
“x x x it is understood to be from year to year, if the rent agreed upon is annual; from month to
month, if  it is monthly; x x x”

The Court further pointed out the Rent Control Law now in force, BP 877, has erased the distinction
between oral and written leases insofar as expiration of the lease period as a ground for judicial
ejectment. Citing the case of Mabalot v Madela Jr., the CA ruled that the petition has been rendered
moot and academic by the death of the lessee, Fausta Dimaculangan, which terminated the lease in
her favor.