De Vera v. CA

G.R. No. 110297 (August 7, 1996)

Facts:

Petitioner Consolacion de Vera was a tenant of an apartment unit located at 1067 Bilbao St., Tondo, Manila, having leased the unit since 1967 from its original owner, Llantos, Lim & Sons, Inc. The initial monthly rental was P150.00, which increased to P924.00 by the lease's termination on December 30, 1990. In 1990, the apartment was sold to Quayalay Realty Corporation, which notified Consolacion on December 5, 1990, that the month-to-month lease would not be renewed upon expiration. Consolacion was advised to negotiate with the new owner if she wished to continue her tenancy.

On December 29, 1990, Consolacion received a notice from Quayalay Realty demanding that she vacate the premises by January 5, 1991. When she refused to leave, Quayalay Realty filed an ejectment suit against her and other tenants on January 9, 1991, in the Metropolitan Trial Court (MeTC) of Manila. The case was consolidated in Branch 25 of the MeTC. Quayalay Realty argued that the month-to-month lease had expired and that demand for vacating the premises had been made.

Consolacion contended that the oral lease was for an indefinite period, thus it did not expire at the end of the month, and claimed that Quayalay Realty had no cause of action against her. On March 22, 1991, the MeTC ruled in favor of Quayalay Realty, stating that the lease was indeed month-to-month and had not been renewed, ordering Consolacion to vacate and pay rentals and attorney's fees. Consolacion appealed to the Regional Trial Court (RTC), which affirmed the MeTC's decision but increased the attorney's fees. The Court of Appeals also affirmed the RTC's decision, deleting the attorney's fees award. Consolacion's motion for reconsideration was dismissed, leading to her petition for review on certiorari.

Legal Issues:

1. Whether the oral contract of lease was on a month-to-month basis, which would terminate at the end of each month.
2. Whether the grounds for judicial ejectment under Batas Pambansa Blg. 877 were applicable in this case.
3. Whether Quayalay Realty was bound to respect the existing lease contract despite the change in ownership.
4. Whether the appellate court had the authority to fix the period of the lease.

Arguments:

• Petitioner (Consolacion de Vera):

  • Argued that the oral lease was for an indefinite period and thus did not expire at the end of December 1990.
  • Contended that the grounds for ejectment under Batas Pambansa Blg. 877 were not present, and therefore, she could not be ejected solely based on the expiration of the lease.
  • Claimed that Quayalay Realty was aware of the existing lease and was bound to respect it.
  • Asserted that the appellate court improperly fixed the lease period without a request from the parties.

• Respondent (Quayalay Realty Corporation):

  • Maintained that the lease was on a month-to-month basis and had expired, justifying the ejectment.
  • Argued that the expiration of the lease was a valid ground for ejectment under Batas Pambansa Blg. 877.
  • Contended that with the lease's expiration, there was no binding contract for the new owner to respect.
  • Asserted that the courts had the authority to determine the lease's nature based on the payment terms.

Court's Decision and Legal Reasoning:

The Supreme Court ruled that the oral contract of lease was indeed on a month-to-month basis, which is considered a lease with a definite period under Article 1687 of the Civil Code. The Court clarified that the lease expired at the end of each month, and since Consolacion was notified of the expiration, her right to occupy the premises ended.

The Court also noted that the grounds for ejectment under Batas Pambansa Blg. 877 included the expiration of the lease, which applied regardless of whether the lease was written or oral. The Court emphasized that the new owner, Quayalay Realty, was not bound by the lease once it expired.

Furthermore, the Court explained that it was not the appellate court that fixed the lease period; rather, it was the nature of the lease itself, as defined by law, that established it as month-to-month. The Court concluded that Consolacion had ample time to find alternative housing, given the duration of the case proceedings.

Significant Legal Principles Established:

1. A month-to-month lease is considered a lease with a definite period, which can be terminated at the end of each month.
2. The expiration of a lease is a valid ground for ejectment under Batas Pambansa Blg. 877, applicable to both written and oral leases.
3. A new owner of a property is not bound by the terms of a lease that has expired prior to their ownership.