Spouses Dionio v. Intermediate Appellate Court
REITERATIONFacts
1. The Antecedents: The underlying dispute concerns the ejectment of spouses Cresenciano and Josefa Dionio from a building owned by Imelda C. Barrios. The Dionios had been leasing the building under a five-year contract that expired in September 1974. Following the expiration, Barrios verbally agreed to allow them to continue occupying the premises on a month-to-month basis, with the stipulation that she could terminate the lease with thirty days' written notice. The lease was later modified to cover only a portion of the ground floor at a reduced rental. Barrios eventually provided notice to vacate, citing plans for remodeling, but the Dionios refused to comply. 2. Procedural History: Imelda C. Barrios filed an ejectment complaint against the Dionios in the Municipal Court of Kalibo, Aklan, after the latter disregarded a formal notice to vacate. The Municipal Court ruled in favor of Barrios, ordering the ejectment and awarding damages, attorney's fees, and reimbursement for expenses. The Dionios appealed to the Court of First Instance of Aklan, which affirmed the Municipal Court's decision, albeit with a different reasoning regarding the applicability of Presidential Decree No. 20. The Dionios then sought review from the Intermediate Appellate Court, which also dismissed their petition for lack of merit, leading to the present petition before the Supreme Court. 3. The Petition: The spouses Dionio filed a petition for review with the Supreme Court, seeking to reverse the decision of the Intermediate Appellate Court. Their primary argument, as presented to the Supreme Court, appears to be that Batas Pambansa Blg. 25, which superseded Presidential Decree No. 20, limits ejectment on the ground of expiration of the lease period only to written leases, and that their lease was oral. However, the Court notes that the ejectment action accrued and the complaint was filed while Presidential Decree No. 20 was in effect, which did not distinguish between oral and written leases for this ground. The Court also emphasizes that a month-to-month lease is considered a lease with a definite period, and the parties' agreement for termination upon notice was a valid undertaking at the time it was entered into, protected by the constitutional prohibition against impairing the obligation of contracts.
Issue(s)
Whether a month-to-month lease, even if oral, is considered a lease with a definite period excluded from the suspension of ejectment under Presidential Decree No. 20. Whether Batas Pambansa Blg. 25, limiting ejectment on expiration of period to written leases, can be applied retroactively to a case where the cause of action accrued under Presidential Decree No. 20. Whether the constitutional prohibition against impairment of contracts is violated by applying PD 20 to a pre-existing month-to-month lease agreement with a stipulated termination clause.
Ruling
The petition is dismissed for lack of merit. The decision of the Intermediate Appellate Court is affirmed.
Ratio Decidendi
On the nature of a month-to-month lease and its exclusion from PD 20: The Court reiterated that a lease stipulated to be on a month-to-month basis is a lease with a definite or specific period. This was established in Rantael vs. Court of Appeals, which held that such a lease terminates at the end of each month and continues in cycles. Consequently, it falls under the express exception of Presidential Decree No. 20, which suspends ejectment on the ground of expiration of the lease period except when the lease is for a definite period. The Court clarified that PD 20's suspension applied to leases with no definite period where the law steps in to prescribe periods, or to leases arising from tacita reconduccion (implied renewal) under Article 1670 of the Civil Code. Therefore, the oral lease in this case, being on a month-to-month basis, was not covered by the suspension. On the retroactivity of Batas Pambansa Blg. 25: The Court held that the private respondent's cause of action to evict the petitioners arose and the complaint was filed while Presidential Decree No. 20 was in effect. Batas Pambansa Blg. 25, which petitioners invoked, was enacted later. The Court stated that the right to eject petitioners, which accrued under PD 20, was not affected by the subsequent enactment of BP Blg. 25, even if BP Blg. 25 were to be interpreted as limiting ejectment to written leases. The Court emphasized that the private respondent had a clear right to eject petitioners based on the expiration of their monthly lease and the stipulated notice to quit, which had been given and ignored. On the impairment of contracts: The Court invoked Cruz vs. Puno, Jr. to explain that the agreement for a thirty-day notice to terminate a month-to-month lease was a valid undertaking at the time it was entered into. To deny the lessor the right to terminate the lease under such an agreement would impair the obligation of contract, which is constitutionally protected. The Court reasoned that PD 20, while having social justice intent, could not ignore constitutional injunctions and must be construed prospectively to avoid constitutional repugnancy. Therefore, the lessor's right to terminate the lease, as agreed upon, was a valid contractual right that could not be impaired by the decree.
Main Doctrine
A lease on a month-to-month basis is considered a lease with a definite period, and thus, is not covered by the suspension of ejectment proceedings under Presidential Decree No. 20, even if the lease is oral. The right to terminate such a lease, once validly agreed upon, is a contractual undertaking that cannot be impaired by subsequent legislation.