Peña v. Tolentino
REITERATIONFacts
The Antecedents: Respondents, Spouses Armando and Leticia Tolentino, are the owners of three parcels of land in Tondo, Manila, leased on a month-to-month basis to petitioners Emiliana G. Peña, Amelia C. Mar, and Carmen Reyes. The oral lease agreements stipulated monthly rents, which as of October 9, 1995, were P570.00 for Peña, P840.00 for Mar, and P480.00 for Reyes. On August 15, 1995, the respondents sent demand letters to each petitioner, terminating the leases effective September 15, 1995, and demanding that they vacate the premises. The demand letters also warned that failure to vacate would result in a charge of P3,000.00 per month as reasonable compensation for the use and occupancy of the premises from October 1, 1995, until they vacated. Procedural History: Following the petitioners' refusal to vacate, the respondents filed three separate ejectment complaints against them in the Metropolitan Trial Court (MeTC) of Manila on October 9, 1995. The cases were consolidated. The MeTC ruled in favor of the respondents on May 17, 1996, ordering the petitioners to vacate and pay reasonable compensation for their continued occupancy, plus attorney's fees and costs. On appeal, the Regional Trial Court (RTC) modified the MeTC's decision on March 10, 1997, decreeing a two-year lease term from the date of its decision, after which the petitioners were to vacate. The RTC also ordered the continued payment of old monthly rentals, with gradual increases according to the Rent Control Law, and that both parties bear their respective attorney's fees. Both parties appealed to the Court of Appeals (CA). On March 31, 2000, the CA rendered a decision setting aside the RTC's ruling and reinstating the MeTC's decision, with a modification that the petitioners pay their respective agreed rentals, which could be gradually increased, for their use and occupancy from October 1, 1995, until they vacated. The CA denied the petitioners' motion for reconsideration on August 28, 2002, and granted the respondents' motion for execution pending appeal. The Petition: The petitioners, by petition for review on certiorari under Rule 45 of the Rules of Court, seek to reverse the CA's decision and resolution. They argue that their ejectment is violative of Presidential Decree (P.D.) No. 20 and that they cannot be ejected without violating the Urban Land Reform Code (P.D. 1517) and Republic Act (R.A.) No. 3516. Specifically, they contend that their lease contracts were for an indefinite period and thus protected by P.D. No. 20, and that they possess a right of first refusal to purchase the leased premises under P.D. 1517 and R.A. 3516, having resided on the land and built their homes there for many years. They assert that these legal provisions should have been considered by the lower courts, even if raised for the first time on appeal, to ensure a just determination of the case.
Issue(s)
Whether the lease contracts were for an indefinite period and protected by P.D. No. 20. Whether the petitioners could validly raise their alleged rights under P.D. 1517, R.A. 3516, and P.D. 2016 for the first time on appeal. Whether the Court of Appeals' reinstatement of the MeTC's decision on ejectment, with modification on rentals, was proper.
Ruling
The petition is denied for lack of merit. The Court modified the Court of Appeals' decision by reinstating the Metropolitan Trial Court's decision without qualification. Costs of suit to be paid by the petitioners.
Ratio Decidendi
On the issue of whether the contracts of lease were for an indefinite period: The Court held that the petitioners' reliance on P.D. No. 20 was misplaced because that law had been repealed by Batas Pambansa Blg. 25. Furthermore, even under subsequent rent control laws like B.P. Blg. 877, which was in effect when the complaints were filed, the expiration of the lease period remained a ground for judicial ejectment. The Court reiterated that Section 6 of B.P. Blg. 877 did not suspend the effects of Article 1687 of the Civil Code. Since no definite period was agreed upon in the oral lease agreements and rentals were paid monthly, the leases were deemed to be for a definite period, terminating at the end of each month pursuant to Article 1687. The demand to vacate further solidified the definite end of their right to stay. On the issue of raising rights under P.D. 1517, R.A. 3516, and P.D. 2016 for the first time on appeal: The Court ruled that the petitioners were precluded from invoking their supposed right of first refusal at such a late stage. They had not asserted this right from the filing of the ejectment complaints until their appeal to the Supreme Court, nor offered any explanation for the delay. The Court emphasized that changing a theory of the case on appeal is impermissible as it is unfair to the adverse party and deprives lower courts of the opportunity to rule on the issues. The Court cited Carantes v. Court of Appeals and Mon v. Court of Appeals to stress that defenses not pleaded in the answer may not be raised for the first time on appeal, and that points of law not brought to the attention of the lower court will not ordinarily be considered by a reviewing court. On the Court of Appeals' reinstatement of the MeTC's decision on ejectment with modification on rentals: While the Court agreed with the CA's reinstatement of the MeTC's order for ejectment, it found the modification regarding the payment of agreed rentals instead of reasonable compensation to be without sufficient elucidation. The Court noted that the MeTC's demand for reasonable compensation was based on the respondents' demand letters. The Court opted to reinstate the MeTC's decision without qualification, including the award of reasonable compensation, as it was more consistent with the finding that the leases had expired and fairer than pegging recovery to unadjusted rentals.
Main Doctrine
Lease agreements with no specified period, but with monthly rentals paid, are considered month-to-month leases, expiring at the end of each month upon proper notice to vacate. The defense of right of first refusal under P.D. 1517 cannot be raised for the first time on appeal.