Legar Management & Realty Corporation v. Court of Appeals
REITERATIONFacts
The Antecedents: Spouses Augusto and Celia Legasto owned an apartment building. They entered into a written contract of lease with no definite period with private respondents Pascual and Ancheta for unit 318-T. In 1987, the Legasto spouses organized petitioner Legar Management & Realty Corporation and transferred their rights to it. Petitioner then allowed private respondents to continue occupying the unit under a verbal contract of lease, renewable on a month-to-month basis, with a monthly rental of P1,545.00. Procedural History: On April 21, 1992, petitioner sent a formal notice to private respondent Pascual to vacate by the end of May 1992. A similar notice was sent to private respondent Ancheta on June 4, 1992, demanding vacation by the end of June 1992. Both refused to vacate. Petitioner filed an ejectment case with the Metropolitan Trial Court (MTC) of Quezon City, Branch 31. The MTC ruled in favor of petitioner, holding that a month-to-month lease is for a definite period and can be terminated at the end of any month. On appeal, the Regional Trial Court (RTC) of Quezon City, Branch 92, reversed the MTC decision, stating that under the Rent Control Law (B.P. Blg. 877), expiration of a month-to-month lease does not automatically warrant ejectment; other grounds enumerated in Section 5 of B.P. Blg. 877 are required. The Court of Appeals (CA) affirmed the RTC decision. The Petition: Petitioner seeks reversal of the CA decision, arguing it is contrary to law and jurisprudence.
Issue(s)
Whether a lessee of a residential property covered by the Rent Control Law can be ejected solely on the basis of the expiration of a month-to-month lease contract. Whether a month-to-month lease agreement under Article 1687 of the Civil Code is considered a lease with a definite period for purposes of ejectment under the Rent Control Law.
Ruling
The petition is granted. The decisions of the Court of Appeals and the Regional Trial Court are reversed and set aside. The decision of the Metropolitan Trial Court is reinstated, ordering the private respondents to vacate the premises and pay attorney's fees and costs.
Ratio Decidendi
On the issue of whether a lessee of a residential property covered by the Rent Control Law can be ejected solely on the basis of the expiration of a month-to-month lease contract: The Supreme Court ruled in the affirmative. Citing Acab vs. Court of Appeals, the Court held that Section 6 of Batas Pambansa Blg. 877 does not suspend the effects of Article 1687 of the New Civil Code. Lease agreements with no specified period but with monthly rentals are considered month-to-month leases, which are leases for a definite period. Upon proper demand and notice by the lessor to vacate, these leases expire, providing sufficient cause for ejectment under Section 5(f) of B.P. Blg. 877. The Court emphasized that the expiration of the lease contract is a valid ground for ejectment. On the issue of whether a month-to-month lease agreement under Article 1687 of the Civil Code is considered a lease with a definite period for purposes of ejectment under the Rent Control Law: The Supreme Court affirmed that a month-to-month lease, as contemplated under Article 1687 of the Civil Code, is indeed a lease with a definite period. The Court reiterated its holdings in Rivera vs. Florendo and Uy Hoo and Sons Realty Development Corporation vs. Court of Appeals, stating that such leases expire after the last day of any given thirty-day period upon proper demand and notice by the lessor to vacate. This expiration, when coupled with a demand to vacate, justifies ejectment. The Court clarified that even if the Miranda and Rivera cases involved the lessor's need for the premises, the principle that a month-to-month lease is a definite period whose expiration justifies ejectment upon notice remains applicable.
Main Doctrine
A month-to-month lease agreement for a residential property covered by the Rent Control Law is considered a lease with a definite period, and its expiration, upon proper notice and demand to vacate by the lessor, constitutes sufficient cause for ejectment under Section 5(f) of Batas Pambansa Blg. 877.