Professional Documents
Culture Documents
DECISION
CARPIO MORALES, J : p
JOCELYN MODOMO and DR.
ROMY MODOMO, petitioners, vs. SPOUSES MOISES P. LAYUG,
JR. and FELISARIN ** E. LAYUG; MOISES P. LAYUG, JR.,
substituted by his heirs, namely: his wife, FELISARIN E.
LAYUG, and children, MA. CELESTE LAYUG CO, EUGENE
ESPINOSA LAYUG, FRANCIS ESPINOSA LAYUG and SHERYL
ESPINOSA LAYUG, respondents.
DECISION
CAGUIOA, ** J :p
The Case
This is a petition for review on certiorari 1 (Petition) filed under Rule 45
of the Rules of Court against the Decision 2 dated March 22, 2011 (assailed
Decision) and Resolution 3 dated July 20, 2011 (assailed Resolution) in CA-
G.R. SP No. 113807 rendered by the Court of Appeals (CA).
The assailed Decision and Resolution affirm the lower courts' uniform
rulings which ordered petitioners Dr. Romy Modomo and
Jocelyn Modomo (collectively, Spouses Modomo) to immediately surrender
possession of a certain parcel of land covered by Transfer Certificate of Title
(TCT) No. 208683 registered in the name of respondents Moises P. Layug, Jr.
and Felisarin E. Layug (collectively, Spouses Layug). 4
The Facts
The facts, as narrated by the Metropolitan Trial Court (MeTC) of Makati
City, Branch 64, and subsequently adopted by the CA, are as follows:
[Spouses Layug filed] a complaint for [e]jectment x x x before
the [MeTC], Branch 65 of Makati on July 23, 2008 which was raffled off
to [Branch 64] after a failed Mediation and Judicial Dispute Resolution
(JDR) x x x.
xxx xxx xxx
[Spouses Layug] alleged among others that[:] they are the
registered owner[s] and legal possessors of a parcel of land located at
No. 1038 A.P. Reyes Street corner Cristobal Street, Barangay Tejeros,
Makati City covered by [Transfer Certificate of Title (TCT)] No. 208683.
Aforesaid property was leased to [Spouses Modomo] for a period of
seven (7) years. Pursuant to the [Contract of Lease 5 dated February
11, 2005 (Contract of Lease), Spouses Modomo agreed to] pay the
amount of Php170,000.00 as monthly rentals subject to an escalation
of 10% for the second and third year, 15% on the fourth and fifth year
and 20% on the sixth and seventh year. It was also agreed by the
parties that real estate taxes on the property shall be paid by
[Spouses Modomo]. In view of [these] stipulation[s], an Addendum to
the Contract was executed by the parties [also] on February 11, 2005
regarding the terms and conditions of payment of
rentals. Subsequently, [Spouses Modomo] defaulted in the
payment of the escalation of [rental fees] commencing from the
year 2006 up to [the filing of the complaint for ejectment on July
23, 2008]. [Spouses Modomo] also failed to pay their rentals for the
year 2008 which would have been paid in advance. [Spouses Layug]
also alleged, that [Spouses Modomo] failed to pay the real estate taxes
due on the property x x x which [Spouses Layug] paid in
[Spouses Modomo's] behalf. [Spouses Layug sent a] letter x x x to
[Spouses Modomo] [demanding that they] settle their unpaid monthly
rentals x x x but to no avail. Ultimately, [a] letter dated March 24,
2008 was sent to [Spouses Modomo] terminating the [C]ontract
[of Lease] and containing therein a demand for
[Spouses Modomo] to vacate the premises. To thresh out the
matter, the case was referred to the Barangay of Tejeros for
conciliation but to no avail. Hence, a certification to file action was
issued. To protect [their] interest, [Spouses Layug] instituted the
present suit claiming that [Spouses Modomo] should vacate the
premises, x x x pay [Spouses Layug] rental arrearages, attorney's
fees and costs of suit. aCIHcD
In its Decision 12 dated January 28, 2010, the RTC affirmed the findings
of the MeTC in toto, disposing the case in these words:
After a careful consideration of the pleadings and the evidence
on record, this Court finds that the court-a-quo did not commit an error
in rendering judgment in favor of [Spouses Layug].
WHEREFORE, premises considered, the appealed decision is
hereby AFFIRMED with costs against [Spouses Modomo].
SO ORDERED. 13
Like the MeTC, the RTC also harped on the Parole Evidence Rule set
forth in Rule 130 of the Rules of Court 14 and held that if the parties' real
intention was to "cancel" the original Contract of Lease, they should have
executed a new Contract of Lease expressing "their intention to eliminate the
stipulation[s] regarding the escalation clause and the provision on real estate
tax." 15
The RTC also noted that while Spouses Layug accepted
Spouses Modomo's monthly rental payments in the reduced amount of
Php150,000.00 without escalation, they did not do so unconditionally. As
basis, the RTC cited Spouses Layug's letters dated December 7, 2006,
February 6, 2007 and January 9, 2008 objecting to Spouses Modomo's
deficient payments. 16
Spouses Modomo filed a motion for reconsideration, which the RTC
denied on April 6, 2010. 17
CA Proceedings
The Issues
The issues submitted for the Court's resolution are:
1. Whether the provisions of the Contract of Lease governing rental
fees, escalation and real estate tax payment have been partially
novated by the parties' alleged subsequent verbal agreement;
2. Whether the principle of estoppel in pais applies so as to preclude
Spouses Layug from denying the partial novation of the Contract
of Lease; and
3. Whether Spouses Modomo are entitled to reimbursement for useful
improvements made upon the leased property.
The Court's Decision
The Petition is granted in part.
Partial Novation
The records are replete with evidence confirming the modification of the
monthly rental fee through the subsequent verbal agreement of the parties.
Foremost, the Spouses Layug served upon Spouses Modomo several
Statements of Account 42 reflecting the latter's unpaid balance. These
statements show that Spouses Layug consistently computed
Spouses Modomo's unpaid balance on the basis of the lowered monthly rental
fee of Php150,000.00, instead of Php170,000.00. IDTSEH
Lessors Lessee
Total Php3,119,200.00 59
DECISION
DEL CASTILLO, J : p
Issues
Our Ruling
SYLLABUS
DECISION
CRUZ, J :
p
The simple question raised in the case at bar could have been definitely resolved
on the lowest level of the judiciary and did not have to reach the highest tribunal.
If we have given the petition due course, it was only for the purpose of settling it
once and for all and avoiding future needless impositions on the time of this
Court.
The subject of the petition is a verbal contract of lease over a portion of a building
belonging to the private respondents and occupied by the petitioner as lessee. It
is situated on Ylaya Street in Manila. The leased premises have been used by
the petitioner for its general merchandise business for more than twenty years.
The agreed monthly rental was P3,000.00.
On December 12, 1985, the lessors notified the petitioner that they were
terminating the lease as they intended to renovate the building and thereafter use
it themselves. The petitioner refused to vacate. The private respondents then
filed a complaint for ejectment against the petitioner in the Municipal Trial Court
of Manila on January 22, 1986. For its part, the petitioner filed a petition for
consignation of the monthly rentals which it claimed had been refused by the
lessors.
In his decision dated July 2, 1987, 1 Judge Tirso C. Briones disposed thus:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and
against the defendant, ordering the latter and all persons claiming rights
under it, to vacate the premises specifically described in the amended
complaint; to pay plaintiffs the sum of P3,000.00 as rental for the
reasonable we and occupancy of the premises commencing January,
1986 and monthly thereafter, until the same shall have been finally
surrendered to the plaintiffs, less whatever payments that may have
been made during the pendency of the case; the sum of P10,000.00 as
and for attorney's fees plus costs of suit.
The petition for consignation is hereby denied for lack of merit.
This decision was affirmed by the Regional Trial Court of Manila, 2 which was in
turn sustained by the Court of Appeals. 3 In this petition for review
on certiorari, the principal submission is that the courts below erred in not giving
the petitioner an extension of its lease in accordance with Article 1687 of the Civil
Code.
This article provides as follows:
ARTICLE 1687. If the period for the lease has not been fixed, it is
understood to be from year to year, if the rent agreed upon is annual;
from month to month, if it is monthly; from week to week, if the rent is
weekly, and from day to day, if the rent is to be paid daily. However,
even though a monthly rent is paid, and no period for the lease has been
set, the courts may fix a longer term for the lease after the lessee has
occupied the premises for over one year. If the rent is weekly, the courts
may likewise determine a longer period after the lessee has been in
possession for over six months. In case of daily rent, the courts may also
fix a longer period after the lessee has stayed in the place for over one
month.
In support of its position, the petitioner cites the cases of Araneta v. De Mesa, 35
SCRA 137, and Divino v. Marcos, 4 SCRA 186.
The Court can only wonder why the petitioner has invoked the first case at all as
it is clearly inapplicable. A little study would have readily revealed this. The
appeal was dismissed in that case simply because the question raised had
already become moot and academic; no ruling was made on the merits.
In the second case, the Court upheld the extension of the lease because of the
peculiar circumstances involved, as related thus by the trial court:
When the plaintiffs petition was called for hearing, the parties agreed
that judgment be rendered on the pleadings in connection with such
petition. According to the pleadings, there is no controversy that plaintiff
has been occupying the lot in question since May 7, 1936, when he
purchased from one Antonio Castro the house constructed thereon. It
also appears that plaintiff was assured by the defendants that the house
bought would remain thereon as long as plaintiff continues paying his
rents. It further appears that on March 19, 1947, plaintiff constructed an
addition to the house with the knowledge and consent of the defendants.
Said addition cost the plaintiff the amount of P20,000.00.
There is no written agreement as to the duration of the lease between
plaintiff and defendants. The fact remains that plaintiff entered the
premises with the knowledge and consent of the defendants and with the
assurance of the latter that the plaintiff could remain occupying the lot as
long as he pays the corresponding rents.
Sustaining this finding, this Court made the following additional observations:
The lot in question has been rented to the petitioner for about 20 years
and his predecessor in interest for more. Even though rentals had been
paid monthly, still no period for the duration of the lease had been set.
The lease had been consistently and tacitly renewed ("tacita
reconduccion") until the ejectment case was filed (Co Tiam v. Diaz, 75
Phil. 672; Villanueva v. Canlas, 77 Phil. 381; Art. 1670, N.C.C.; Art.
1566, Old Civil Code). Having made substantial or additional
improvements on the lot, and considering the difficulty of looking for
another place to which petitioner could transfer such improvements, and
the length of his occupancy of the lot (since 1936), and the impression
acquired by him that he could stay on the premises, as long as he could
pay the rentals, it would seem that there exists just grounds for granting
the extension of lease and that the extension of two years granted by the
trial court, is both fair and equitable.
It was considered important in that case that: 1) the plaintiff had been occupying
the leased premises for more than twenty years; 2) he was assured by the
defendants that he could remain in the house as long as he continued paying the
rentals; and 3) he made improvements on the house costing P20,000.00 with the
consent of the defendants. The petitioner in the case at bar has not pointed to
similar circumstances other than the claim that it has been occupying the subject
premises for more than twenty years. On this point, Judge Roberto M. Lagman of
the Regional Trial Court correctly held:
On the second issue, the Court noted that the parties did not submit any
evidence on the basic of the stipulation of the facts earlier narrated.
Thus, there is nothing in the record which would show any fact or
circumstance which justifies the extension of the lease. The mere
occupancy of the premises for a number of years, by itself is not
sufficient.
The circumstance that the petitioner has paid its rentals religiously during the
past twenty years is also not sufficient to justify the extension it demands. Neither
are the substantial improvements it allegedly made on the leased premises nor
the difficulty of finding another place of business, on which it has not submitted
any evidence at all. The Court makes the wry observation that the petitioner has
only itself to blame if, being engaged in business, it did not take the necessary
precautions against its possible and even abrupt displacement because of the
termination of the month-to-month lease. As for the argument that the private
respondents had not yet secured a building permit for the alleged intended
renovation, it is obviously no argument at all and deserves no further comment.
In the view of the Court, the applicable case is Cruz v. Intermediate Appellate
Court, 4 where it was held:
Ricardo Cruz further maintains that the lease contract with Roman
Legarda So is one with an indefinite period, no specific term having been
agreed upon by the parties, hence the court can legally fix a longer term.
He invokes the second sentence of Article 1687 of the Civil Code which
states that even though a monthly rental is paid, and no period for the
lease has been set, the courts may fix a longer term for the lease after
the lessee has occupied the premises for over one year.
We reject such proposition.
As earlier stated, the contract of Ricardo Cruz, being on a month-to-
month basis, is a lease with a definite period. Since the contract of lease
is for a definite term, the lessee cannot avail of the benefits under Article
1687 which applies only if there is no definite term. And, even
assuming arguendo that Article 1687 applies, Ricardo Cruz would still
not be entitled to have the term fixed for a longer period since his action
was filed only after the contract had expired.
As held in Vda. de Prieto vs. Santos, et al. (88 Phil. 509 [1956]):
"Under this provision, if the period of a lease contract has not
been specified by the parties therein, it is understood to be from
month to month, if the rent agreed upon is monthly, as in the
cases at bar. Consequently, the contract expires at the end of
such month, unless, prior thereto, the extension of said term has
been sought by appropriate action and judgment is, eventually,
rendered therein granting said relief.
"Defendants herein maintain that their lease contracts did not,
and could not, come to an end until after the court has fixed its
lifetime and the term thus fixed has expired. This view, is, to our
mind, untenable. To begin with, defendants assume that their
contracts are without term, prior to the judicial action authorized in
said Article 1687, whereas the same provides that the duration of
lease contracts shall be yearly, monthly, weekly, or daily
depending upon whether the rental agreed upon is annual,
monthly, weekly, or daily. In other words, said contracts have a
term fixed by law, and are not indefinite in duration, before said
judicial intervention. Secondly, said Article 1687 merely gives the
court discretion to extend the period of the lease. The court is not
bound to extend said term. It may legally refuse to do so, if the
circumstances surrounding the case warrants such action . . . "
(Emphasis reproduced).
Conformably, we hold that as the rental in the case at bar was paid monthly and
the term had not been expressly agreed upon, the lease was understood under
Article 1687 to be terminable from month to month. At the time the petitioner was
asked to vacate the leased premises, the lease contract had already expired and
therefore, following the above-quoted decisions, could no longer be extended. In
fact, even if such contract had not yet expired, its extension would still be subject
to the sound discretion of the court and was by no means obligatory upon it as a
merely ministerial duty.
To quote again from the decision of the Regional Trial Court:
As correctly cited by the plaintiffs, "The power of the Courts to fix a
longer term for lease is protestative or discretionary, 'may' is the word —
to be exercised or not in accordance with the particular circumstances of
the case; a longer term to be granted where equities come into play
demanding extension, to be denied where none appears, always with
due deference to the parties freedom to contract." (Divino v. Marcos,
January 31, 1962, 5 SCRA 186.) Moreover, the lease had already
expired when the extension was sought. In the case of Prieto v. Santos,
98 Phil. 509 cited in Alegre v. Laperal, 22 SCRA 934, it was held that "an
extension of the lease may be sought by the tenant before, not after the
termination of the lease." At any rate, whatever extension the defendant
may be entitled to has already been dissipated by the length of time — 2
years — that this case has been pending.
The petitioner also contends that it was denied its day in court when judgment
was rendered against it without the benefit of a trial on the merits. This posture is
likewise unacceptable. Contrary to its submission, the case was not decided by
Summary Procedure but in accordance with Rule 20, Section 3, and Rule 30,
Section 2, of the Rules of Court. There was no trial on the merits because, as the
record will show, the petitioner's counsel agreed to submit the case for decision
on the basis of the stipulations of the parties at the pre-trial conference.
Judgment was rendered on that basis.
It must be added that even if there was indeed no trial before the Municipal Trial
Court, the petitioner was heard nonetheless when it appealed to the Regional
Trial Court, when it filed its motion for reconsideration of the decision, and when
it appealed to the respondent court. The petitioner cannot pretend that it was
unable to fully argue its case before that court, for the fact is that it did so, not
only in its brief but also when it filed a motion for reconsideration of its decision
and also a motion for a hearing or that motion.
The respondent court did not err in sustaining the award of attorney's fees in the
sum of P10,000.00, taking into account the fact that the petitioner unreasonably
resisted the private respondent's demand to vacate the property following the
termination of their lease contract. The petitioner's intransigence made it
necessary for the latter to litigate for the enforcement of their just and valid claim
and thus incur the expenses that must now be justly charged to it.
Judge Lagman acutely observed that the petitioner had already enjoyed a de
facto extension of two years during the period the ejectment case was pending,
first before the Municipal Trial Court and then before his court. We note with
disapproval that by appealing to the Court of Appeals and later to this Court, the
petitioner gained another extension of more than three years, for a total of almost
six years from the time the amended complaint was filed on June 17, 1986.
It is an economic fact that construction costs rose considerably during that
period, thus increasing the expenses of the renovation intended by the private
respondents. Such increase could have been also awarded against the petitioner
as part of the actual damages of the private respondents except that no evidence
of this has been presented.
Many lessees are able to defer their deserved ejectment through the simple
expedient of appealing their lost cause all the way up to even this Court. This
transparent gambit is all-too-familiar, The delay entailed in deciding these
appeals is usually unavoidable because the courts of justice are saddled by a
heavy load of cases and cannot dispose of them as fast as might be desired. It is
common knowledge of this difficulty that has encouraged the filing of groundless
appeals by "clever" lawyers who know from the start that they are doomed to fail.
Counsel are admonished against abusing the judicial process by lodging appeals
intended merely to unduly prolong a case and so "buy time" for their clients. In
the future, this Court will take a sterner view of such tactics and impose severe
sanctions upon lawyers who, for money or malice, would cynically frustrate the
ends of the law and the speedy administration of justice by deliberately delaying
the final disposition of their hopeless cases. Atty. Ismael M. Estella, the
petitioner's counsel, is particularly enjoined to take serious heed of this warning.
WHEREFORE, the petition is DENIED and the appealed decision AFFIRMED in
toto, with triple costs against the petitioner.
SO ORDERED.
(Yek Seng Co. v. Court of Appeals, G.R. No. 87415, [January 23, 1992], 282
|||
PHIL 313-322)
[G.R. No. 62603. March 27, 1990.]
UNITED REALTY CORPORATION, petitioner, vs. HON. COURT OF
APPEALS and REVEREND FATHER JOSE TORRALBA
SY, respondents.
SYLLABUS
DECISION
GANCAYCO, J : p
Whether the contract of lease is for a definite or indefinite period of time
and the applicability of the provisions of Presidential Decree No. 20 and Batas
Pambansa Bilang 25 are the issues in this case.
The facts are undisputed.
In March 1964 and December 1964 petitioner and private respondent
Rev. Father Jose Torralba Sy, entered into separate contracts of lease over
two apartments located at 913-E and 913-F Josefina Street, Sampaloc,
Manila, with the common provision covering its duration as follows: cdll
"To hold the same for one month from the (15th day of March, 1964 for
Apt. No. 913 -E and 1st day of January, 1965 for Apt. No. 913-F) and so
on from month to month at a rent of TWO HUNDRED PESOS (P200.00),
Philippine Currency, per month, payable in advance on the first TEN (10)
days of each calendar month, until the lease shall terminate, which
termination shall be determined by either party giving FIVE (5) days
notice in writing." 1
It was further stipulated in the two contracts that "in case the lessee
shall continuously withhold possession of the apartments after he or she has
been properly notified of the termination of his or her right to occupy the
same, the lessor shall be entitled to collect P400.00 every month or fraction
thereof, as reasonable compensation for the use of the place and as
damages."
Private respondent removed the portion separating the two apartments
and converted the same principally for use as a Buddhist chapel.
On August 1, 1970, petitioner leased to private respondent the
apartment at 937-E Josefina Street, Sampaloc, Manila, effective August 1,
1970 for the monthly rental of P300.00, 2 payable in advance within the first
ten (10) days of the month for his use as residence only. It was also stipulated
in said contract that "in case the lessee shall continuously withhold
possession of the apartments after he/she has been notified of the termination
of his/her right to occupy the same, the lessor shall be entitled to collect
P500.00 every month or fraction thereof, as reasonable compensation for the
use of the place and as damages."
On September 24, 1975, petitioner sent a letter to private respondent
that effective November 1, 1975 the new rental for the two apartments will be
P500.00 per door or P1,000.00 for the two doors, likewise payable in advance
within the first ten (10) days of the calendar month, with the request that
petitioner be informed of private respondent's decision as to the new rate not
later than October 25, 1975 so that it may be guided accordingly. 3 Instead
private respondent complained to the Department of Public Information,
Malacañang, Manila. In the confrontation between the parties, the Presidential
Complaint and Action Committee found that there was no violation of P.D. No.
20 as the subject premises are being used principally as a Buddhist Temple
and therefore are not covered. Private respondent then sent a letter-complaint
thru counsel dated November 13, 1975 to then Asst. Executive Secretary
Ronaldo E. Zamora who in response issued Opinion No. 480, Series of 1975
dated November 20, 1975 signed by Deputy Executive Secretary Roberto V.
Reyes. 4 Therein it was held that the increase in rental demanded was in
violation of P.D. No. 20 and that as 1/4 of the two-door apartments is being
used likewise as a chapel incidental to the calling of the private respondent as
a monk it cannot be called as a commercial or public establishment or as a
place for the exercise of one's profession because the same is not for profit. cdll
Hence, petitioner filed a complaint for unlawful detainer in the City Court
of Manila on March 7, 1977. After the issues were joined and the trial on the
merits, a decision was rendered on February 16, 1981 dismissing the
complaint and counterclaim without pronouncement as to costs. Both parties
asked for a reconsideration of the decision but the same was denied. Hence,
both parties appealed to the Court of First Instance of Manila, wherein in due
course a decision was rendered on December 28, 1981 affirming the
judgment of the City Court with the modification finding private respondent
entitled to moral damages in the amount of P4,000.00, exemplary damages in
the amount of P2,000.00 and attorney's fees of P2,000.00 and the costs of the
suit. A motion for reconsideration filed by petitioner was denied by the trial
court in an order of February 25, 1982.
Hence, a petition for review was filed by petitioner with the Court of
Appeals, wherein after the issues were joined, a decision was rendered on
October 7, 1982 dismissing the petition with costs against petitioner. 6 A
motion for reconsideration filed by petitioner of the decision was denied in a
resolution of November 17, 1982.
Thus, this petition.
A reading of the two contracts of lease entered into between petitioner
and private respondent hereinabove reproduced show that its period is from
month to month and that the lease may be terminated when either party gives
a 5 days notice in writing.
No doubt such a stipulation between the parties demonstrates that the
agreement of lease is for a definite period and not for an indefinite period as
held by the appellate court.
In Rantael vs. CA, 7 involving a similar contract of lease between the
parties this Court found that a lease on a month to month basis expires after
the last day of the 30th day period repeating the same cycle of the 30-day
period until either party express their prerogative under their agreement to
terminate the same. llcd
The only difference between Rantael and the present case is that in the
former the parties may terminate the agreement upon 30 days notice while in
this case, the agreement is that the termination by either party may be upon 5
days notice. Such difference is of no moment. And such agreement is binding
and is the law between the parties.
Since the lease agreement in question is for a definite period it follows
that petitioner has a right to judicially eject private respondent from the
premises as an exception to the general rule provided for in Section 4 of P.D.
No. 20 which provides as follows:
"Except when the lease is for a definite period, the provisions of
paragraph (1) of Article 1673 of the Civil Code of the Philippines insofar
as they refer to dwelling unit or land on which another's dwelling is
located shall be suspended until otherwise provided; but other provisions
of the Civil Code and the Rules of Court of the Philippines on lease
contracts insofar as they are not in conflict with the provisions of this Act,
shall apply." (Emphasis supplied.)
Moreover, under Section 5(f) of B.P. Blg. 25 one of the grounds for
ejectment is the expiration of the period of a written lease contract. In this
case, because of the failure of the private respondent to pay the increased
rental demanded by petitioner, petitioner elected to terminate the contract and
asked the private respondent to vacate the premises. A lease contract may be
terminated at the end of any month, which shall be deemed terminated upon
the refusal to pay the increased monthly rental demanded by the petitioner,
provided the same is not exorbitant. 8
Further, there is no question in this case that the two apartments
subject of litigation if not a greater portion thereof is not used by private
respondent as his residence but for a Buddhist Temple. Thus, it is with more
reason that this lease agreement does not fall within the protective mantle of
the provision of P.D. No. 20 and B.P. No. 25 which covers only dwelling
units.
LLpr
Lastly, considering that during the pendency of this appeal, the private
respondent died on August 23, 1987, thus the said lease agreements were
effectively terminated by the death of private respondent who is the lessee of
the premises in question.
WHEREFORE, the petition is GRANTED. The decision of the Court of
Appeals dated October 7, 1982 and its Resolution dated November 17, 1982
are hereby reversed and set aside and another judgment is hereby rendered
ordering private respondent and/or his heirs or successors-in-interest to
immediately vacate the premises of the property in question and to pay the
unpaid rentals thereof of P1,000.00 a month for the two apartments until they
vacate the premises, with costs against private respondent.
SO ORDERED
(United Realty Corp. v. Court of Appeals, G.R. No. 62603, [March 27, 1990],
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SYLLABUS
DECISION
PUNO, J :p
This is an appeal from the Decision, dated July 6, 1994, of the Court of
Appeals, 1 affirming the reversal by the Regional Trial Court of Quezon City,
Branch 92, of the Decision 2 of the Metropolitan Trial Court of Quezon City,
Branch 31, the dispositive portion of which reads, as follows:
"In view of the foregoing, this Court finds the plaintiff's (herein
petitioner's) claim to have been duly established against defendants
(herein private respondents) Felipe Pascual and Dionisio Ancheta, and
therefore renders judgment against (them), ordering said defendants
(private respondents), as follows:
1. Ordering the defendants (private respondents) and all persons
claiming rights under them to vacate the premises at No. 318-T E.
Rodriguez, Sr. Blvd., Quezon City and surrender possession thereof to
plaintiff (petitioner);
2. Ordering the defendants (private respondents) to pay the sum
of TWO THOUSAND PESOS (P2,000.00) as and for, attorney's fees;
and
3. Ordering the defendants (private respondents) to pay the costs
of suit.
"SO ORDERED." 3
The facts are undisputed.
Spouses Augusto and Celia Legasto owned an apartment building located
along E. Rodriguez, Sr. Boulevard in Quezon City. They entered into a written
contract of lease with no definite period with private respondents Pascual and
Ancheta, covering unit 318-T of the building. Sometime in 1987, the Legasto
spouses and their children organized petitioner Legar Management & Realty
Corporation, and transferred and assigned thereto all their rights, interests, and
privileges over certain properties, including the subject apartment building.
Thereafter, petitioner allowed private respondents to continue occupying
their apartment unit by virtue of a verbal contract of lease which was renewable
on a month-to-month basis. Pursuant to their verbal lease agreement, private
respondents were to pay petitioner a monthly rental of One Thousand Five
Hundred Forty-Five Pesos (P1,545.00).
On April 21, 1992, petitioner wrote private respondent Pascual a formal
notice of termination, requesting him to vacate unit 318-T by the end of May,
1992. A similar formal notice was sent to private respondent Ancheta on June 4,
1992, demanding vacation of the same unit by the end of June, 1992. Both
refused to heed petitioner's demand and did not vacate the subject premises.
Petitioner instituted an ejectment case against private respondents with the
Metropolitan Trial Court of Quezon City. The case was docketed as Civil Case
No. 6011, and raffled to Branch 31 of the court. 4
At the end of trial, the MTC found for petitioner and held that the verbal
lease contract between the parties, being on a month-to-month basis, is for a
definite period, and may be terminated at the end of any month. On appeal, the
Regional Trial Court of Quezon City, Branch 92, 5 reversed the MTC Decision,
holding that "the mere expiration of the month-to-month lease period in
accordance with Article 1687 of the New Civil Code does not automatically give
rise to an ejectment in cases governed by the Rent Control Law, in view of
Section 6 of Batas Pambansa Blg. 877, as amended. There is need for existence
of other grounds enumerated under Section 5 of B.P. Blg. 877, as amended, in
order to eject a lessee."
The RTC Decision was upheld by the Court of Appeals which ruled, inter
alia, that:
"As held in Rivera vs. Florendo . . . , reiterated in Miranda vs.
Ortiz . . ., independently of the grounds for ejectment enumerated
in Batas Pambansa Blg. 25 (now Batas Pambansa Blg. 877, extended
by Republic Act Nos. 6643 and 6828), the owner/lessor cannot eject the
tenant by reason of the expiration of the period of lease as fixed or
determined under Article 1687 of the Civil Code. Even if in the instant
case the month-to-month period is deemed to have expired at the end of
the month after notice of demand to vacate . . . , (private) respondents'
eviction cannot be allowed without regard to the grounds for ejectment
enumerated in Section 5 of Batas Pambansa Blg. 877." (Citation
omitted.)
Petitioner now impugns the Decision of the Court of Appeals as against
existing law and jurisprudence.
The petition is meritorious.
The issue is whether the lessee of a residential property covered by the
Rent Control Law can be ejected on the basis alone of the expiration of the
verbal lease contract under which rentals are paid monthly. We resolved this
issue in the affirmative in the case of Acab vs. Court of Appeals, G.R. No.
112285, February 21, 1995, 241 SCRA 546. We held:
"Section 6 of Batas Pambansa Blg. 877, which is exactly the
same as Section 6 of Batas Pambansa Blg. 25, provides that:
'Sec. 6: Application of the Civil Code and Rules of Court of
the Philippines. — Except when the lease is for a definite period,
the provisions of paragraph (1) of Article 1673 of the Civil Code of
the Philippines, insofar as they refer to residential units covered
by this Act, shall be suspended during the effectivity of this Act,
but other provisions of the Civil Code and the Rules of Court on
lease contracts, insofar as they are not in conflict with the
provisions of the Act shall apply.'
In a long line of cases, . . . beginning with Rivera v. Florendo, 143
SCRA 278 (1986), this Court has held that said provision does not
suspend the effects of Article 1687 of the New Civil Code which provides
as follows:
'Art. 1687. If the period for the lease has not been fixed, it
is understood to be from year to year, if the rent agreed upon is
annual; from month to month, if it is monthly; from week to week,
if it is weekly; and from day to day, if the rent is to be paid daily.
However, even though a monthly rent is paid, and no period for
the lease has been set, the courts may fix a longer term for the
lease after the lessee has occupied the premises for over one
year. If the rent is weekly, the courts may likewise determine a
longer period after the lessee has been in possession for over six
months. In case of daily rent, the courts may fix a longer period
after the lessee has stayed in the place for over one month.'
Thus, we have held that lease agreements with no specified
period, but in which rentals are paid monthly, are considered to be on a
month-to-month basis. . . . They are for a definite period and expire after
the last day of any given thirty-day period, upon proper demand and
notice by the lessor to vacate. . . .
"In the case at bench, it was found by all three lower courts that
the lease over the subject property was on a month-to-month basis, and
that there was proper notice of non-renewal of contract and demand for
vacation of premises made by petitioners on private respondent.
Unquestionably, therefore, the verbal lease agreement entered into by
private respondent and petitioners' father and predecessor-in-interest
has been validly terminated, in which case there is sufficient cause for
ejectment under Section 5(f) of Batas Pambansa Blg. 877 which reads:
'Section 5: Grounds for Judicial Ejectment. — Ejectment
shall be allowed on the following grounds:
'xxx xxx xxx
(f) Expiration of the period of the lease contract.'
This is in line with Our holding in the case of Palanca v.
Intermediate Appellate Court, 180 SCRA 119 (1989), that:
'In the recently decided case of Uy Hoo and Sons Realty
Development Corporation v. Court of Appeals and Thomas
Kuan , . . ., 7 this Court ruled that a month-to-month lease under
Article 1687 is a lease with a definite period, the expiration of
which upon previous demand by the lessor to vacate, can justify
ejectment.
"The Court noted that notwithstanding the fact that
the Miranda 8 case and the Rivera 9 case quoted therein involved
a need for the lessor to re-possess the leased premises for his
own use, (which fact is not present in this case), the Court applied
the ruling therein on the ground that:
'. . . the thrust of the decision in said cases appears
to be that 'the determination of the period of a lease
agreement can still be made in accordance with said
Article 1687, and that in a month to month lease situation,
when petitioners (lessor) gave private respondent (lessee)
notice to vacate the premises in question, the contract of
lease is deemed to have expired as of the end of the
month.' "
IN VIEW WHEREOF, the petition is GRANTED. The Decisions of the
Court of Appeals in CA-G.R. SP No. 32152, dated July 6, 1994, and of the
Regional Trial Court of Quezon City, Branch 92 in Civil Case No. Q-93-15330,
dated August 26, 1993, are REVERSED AND SET ASIDE. The Decision, dated
February 2, 1993, of the Metropolitan Trial Court of Quezon City, Branch 31, is
REINSTATED. No costs.
SO ORDERED.
(Legar Management & Realty Corp. v. Court of Appeals, G.R. No. 117423,
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