Bao v. Laperal
REITERATIONFacts
The Antecedents: Plaintiffs were tenants of defendant's apartment houses, occupying distinct units. On October 27, 1964, the defendant notified the plaintiffs of an increase in rentals effective January 1, 1965, giving them the option to agree to the increase or vacate. The plaintiffs were unwilling to do either. Procedural History: On January 5, 1965, the plaintiffs judicially consigned the amount of the old rentals and filed a complaint seeking to compel the defendant to accept the old rentals, fix the lease duration, and pay damages. The defendant, in her answer, asserted that the lease was on a month-to-month basis, allowing her to increase rentals at the end of each month and demanding that plaintiffs vacate if they disagreed. The Court of First Instance of Manila dismissed the plaintiffs' complaint and ordered them to vacate, pay back rentals at the old rates for a period, and then at the increased rates until they vacated. The Appeal: Plaintiffs appealed to the Supreme Court, arguing that the lower court erred in (1) holding the lease to be for a definite period, (2) failing to take judicial notice of a city ordinance limiting rental increases, (3) dismissing their complaint, and (4) ordering the execution of the decision pending appeal. They contended that a month-to-month lease should be considered indefinite and that the court should have fixed a longer term under Article 1687 of the Civil Code. They also argued that the increased rentals exceeded the limit set by Manila Ordinance No. 4841, Series of 1963, and that the execution pending appeal was improper as the case was not one of forcible entry and detainer.
Issue(s)
Whether the lower court erred in not fixing a longer term for the lease under Article 1687 of the Civil Code. Whether the lower court erred in failing to take judicial notice of Manila Ordinance No. 4841, Series of 1963, and in not holding that the increased rentals exceeded the limit fixed therein. Whether the lower court erred in dismissing the plaintiffs' complaint. Whether the lower court erred in ordering the execution of the decision appealed from during the pendency of the appeal.
Ruling
The Supreme Court affirmed the decision of the Court of First Instance of Manila. The Court ruled that the lower court did not err in dismissing the complaint and ordering the execution of the judgment pending appeal. The plaintiffs-appellants were ordered to pay the costs.
Ratio Decidendi
On Issue 1: The Court held that Article 1687 of the Civil Code, which allows a court to fix a longer term for a lease, vests discretion in the court and does not grant an absolute right to the lessee. The plaintiffs failed to demonstrate any abuse of discretion by the lower court in not extending the lease term. Furthermore, the Court noted that such an extension must be sought before the termination of the lease, and the present action was commenced five days after the lease expired according to the defendant's notice. On Issue 2: The Court found that even if judicial notice were taken of Manila Ordinance No. 4841, the plaintiffs failed to provide competent evidence on the assessed value of the building and land. Without this crucial information, the lower court had no basis to ascertain whether the increased rentals exceeded the limit prescribed by the ordinance. Therefore, the absence of such evidence rendered this argument moot. On Issue 3: Given that the arguments pertaining to the lease term and the rental increase ordinance were found to be without merit, the dismissal of the plaintiffs' complaint was deemed proper. The plaintiffs' core contentions, which formed the basis of their complaint, were not substantiated by law or evidence presented. On Issue 4: The Court ruled that the lower court did not err in ordering the execution of the decision pending appeal. It reasoned that the defendant's counterclaim or cross-claim contained all the elements of an unlawful detainer case, thus bringing Section 10 of Rule 70 of the Rules of Court into play. Even if the case were considered an ordinary action, the lower court retained jurisdiction under Rule 39, Section 2 of the Rules of Court to order execution upon motion filed before the approval of the record on appeal, as the approval was provisional and the court retained jurisdiction to resolve the motion for execution.
Main Doctrine
The Supreme Court affirmed that Article 1687 of the Civil Code, concerning the fixing of a longer term for a lease, vests discretion in the court, not an absolute right in the lessee, and such relief must be sought before the lease's termination. Additionally, the Court reiterated that a lower court retains jurisdiction to order execution pending appeal under Rule 39, Section 2 of the Rules of Court, even after a notice of appeal has been filed, provided the motion for execution is filed before the approval of the record on appeal and the order of execution is included in the records to be elevated.