Legar Management v. Court of Appeals
G.R. No. 117423 (January 24, 1996)
Facts:
Spouses Augusto and Celia Legasto owned an apartment building located at E. Rodriguez, Sr. Boulevard in Quezon City. They entered into a written lease agreement with private respondents Felipe Pascual and Dionisio Ancheta for unit 318-T of the building, which did not specify a definite lease period. In 1987, the Legasto spouses, along with their children, organized Legar Management & Realty Corporation and transferred all their rights, interests, and privileges over the apartment building to the corporation.
Following the transfer, the private respondents continued to occupy the apartment unit under a verbal lease agreement that was renewable on a month-to-month basis, with a monthly rental of One Thousand Five Hundred Forty-Five Pesos (P1,545.00). On April 21, 1992, the petitioner sent a formal notice to Pascual, requesting him to vacate the unit by the end of May 1992. A similar notice was sent to Ancheta on June 4, 1992, demanding vacation by the end of June 1992. Both private respondents refused to vacate the premises.
Consequently, the petitioner filed an ejectment case against the private respondents in the Metropolitan Trial Court (MTC) of Quezon City, which ruled in favor of the petitioner, stating that the verbal lease was on a month-to-month basis and could be terminated at the end of any month. The private respondents appealed the MTC's decision to the Regional Trial Court (RTC) of Quezon City, which reversed the MTC's ruling. The RTC held that the expiration of the month-to-month lease did not automatically justify ejectment under the Rent Control Law, requiring other grounds for ejectment as specified in Batas Pambansa Blg. 877.
The Court of Appeals upheld the RTC's decision, reiterating that the expiration of the lease period under Article 1687 of the Civil Code does not alone justify ejectment in cases governed by the Rent Control Law.
Legal Issues:
The primary legal issue was whether a lessee of a residential property covered by the Rent Control Law could be ejected solely based on the expiration of a verbal lease contract that provided for monthly rental payments.
Arguments:
Petitioner’s Argument: The petitioner contended that the verbal lease agreement was validly terminated after proper notice was given, and thus, the private respondents could be ejected based on the expiration of the lease. The petitioner cited previous jurisprudence, asserting that a month-to-month lease is considered to have a definite period that expires at the end of any given month upon proper demand for vacation.
Respondents’ Argument: The private respondents argued that the expiration of the lease period alone does not justify ejectment under the Rent Control Law. They maintained that the law requires the existence of specific grounds for ejectment, as enumerated in Batas Pambansa Blg. 877, which were not present in this case.
Court’s Decision and Legal Reasoning:
The Supreme Court granted the petition, reversing the decisions of the Court of Appeals and the RTC, and reinstating the MTC's ruling. The Court held that the verbal lease agreement was indeed on a month-to-month basis and could be terminated by the lessor upon proper notice. The Court emphasized that the provisions of Article 1687 of the Civil Code, which govern leases without a specified period, remain applicable even in the context of the Rent Control Law.
The Court clarified that the expiration of a month-to-month lease, following a notice to vacate, constitutes sufficient cause for ejectment under Section 5(f) of Batas Pambansa Blg. 877, which allows for ejectment upon the expiration of the lease contract. The Court also referenced previous cases, affirming that the determination of the lease period could be made in accordance with Article 1687, and that the lessor's notice to vacate effectively terminated the lease.
Significant Legal Principles Established:
- A month-to-month lease is considered to have a definite period and can be terminated by the lessor upon proper notice.
- The expiration of a lease contract, even under the Rent Control Law, can justify ejectment if proper notice is given.
- The provisions of the Civil Code regarding lease agreements remain applicable unless explicitly suspended by law.