Uy Hoo and Sons Realty Development Corporation v. Court of Appeals
REITERATIONFacts
1. The Antecedents: The underlying dispute concerns a residential apartment leased by petitioner Uy Hoo and Sons Realty Development Corporation to private respondent Thomas Kuan. The original lease contract was for one year, commencing July 1, 1966. Upon its expiration, the respondent continued occupying the premises with the lessor's acquiescence. In 1974, the original lessor died, and the respondent remained in possession with the petitioner's acquiescence, paying a monthly rental of P187.00. In July 1986, the petitioner informed the respondent of the termination of his month-to-month occupancy and demanded payment of back rentals from January 1982 to June 1986. 2. Procedural History: Following the respondent's refusal to vacate and alleged failure to pay back rentals, the petitioner filed an unlawful detainer complaint before the Metropolitan Trial Court (MTC) of Manila. The MTC ruled in favor of the petitioner, ordering the respondent to vacate and pay back rentals. The respondent appealed to the Regional Trial Court (RTC), which affirmed the MTC decision with a modification, removing the obligation to pay specific back rentals for 1984, evidently because these had been deposited in a separate court case. The respondent then filed a petition for review with the Court of Appeals (CA), which reversed the RTC decision, holding that rent control laws applied and the lease could not be terminated solely on the basis of expiration. 3. The Petition: The petitioner seeks review of the Court of Appeals' decision via a petition for certiorari under Rule 45. The petitioner argues that the CA erred in applying the general rule of rent control laws and not the exception for leases with a definite period. The petitioner contends that a month-to-month lease, as established by the continued occupancy after the original contract's expiration and the monthly payment of rent, constitutes a lease for a definite period (monthly) under Article 1687 of the Civil Code. Therefore, upon proper notice to vacate, the lease is deemed to have expired, allowing for judicial ejectment, notwithstanding the provisions of rent control laws like BP Blg. 877.
Issue(s)
Whether a month-to-month lease, under Article 1687 of the Civil Code, is considered a lease with a definite period for the purpose of ejectment proceedings, notwithstanding the provisions of rent control laws. Whether the lessor can judicially eject the lessee based on the expiration of a month-to-month lease after proper notice.
Ruling
The petition is GRANTED. The Court of Appeals decision is REVERSED and SET ASIDE. The decision of the Regional Trial Court of Manila, Branch X, dated November 3, 1987, is reinstated.
Ratio Decidendi
On the issue of whether a month-to-month lease is a lease with a definite period for ejectment purposes: The Court held that a month-to-month lease, as governed by Article 1687 of the Civil Code, is considered a lease with a definite period. This is because the period is understood to be from month to month, and the lease is deemed to have expired at the end of each month. The Court clarified that while Section 6 of BP Blg. 877 suspends Article 1673 of the Civil Code regarding judicial ejectment due to lease expiration, this suspension does not apply to leases with a definite period. Therefore, the determination of the lease period under Article 1687 remains valid and can serve as a ground for ejectment upon proper notice. On the issue of whether the lessor can judicially eject the lessee based on the expiration of a month-to-month lease after proper notice: The Court ruled in the affirmative. Citing Miranda v. Ortiz and Rivera v. Florendo, the Court reiterated that the determination of the lease period under Article 1687 is not suspended by rent control laws. Consequently, when a lessor gives a lessee of a month-to-month lease proper notice to vacate, the contract of lease is deemed to have expired as of the end of the month. This expiration, coupled with the notice, provides a valid ground for judicial ejectment, even if the lease is verbal and on a month-to-month basis. The Court emphasized that to hold otherwise would render rent control laws illusory for lessors who may need their property for their own use or for immediate family members, as provided in Section 5(c) of BP Blg. 25 (later amended in BP Blg. 877). The Court further noted that Section 5(f) of BP Blg. 877 explicitly lists the expiration of the lease contract as a ground for judicial ejectment, further supporting the petitioner's contention.
Main Doctrine
A month-to-month lease, under Article 1687 of the Civil Code, is considered a lease with a definite period for the purpose of ejectment proceedings, and the lessor may terminate the lease at the end of any month upon proper notice or demand to vacate, notwithstanding the provisions of rent control laws that suspend the effectivity of Article 1673 of the Civil Code, unless the lease is for a definite period.