Respondent Cosme is the owner of an apartment building located in Quezon City while petitioner is a lessee of one of the units therein.
On April 1999, respondent filed a complaint for unlawful detainer against petitioner on the grounds of expiration of contract of lease and nonpayment of rentals from December 1998.
The MeTC ruled in favor of respondent. On the other hand, the RTC reversed the decision of the MeTC and ruled that the contract of lease between the parties lacked a definite period.
On appeal, the CA found merit in respondent’s petition. The appellate court found that the apartment unit was leased to petitioner on a month to month basis. It based its ruling on Articles 1673 (1) and 1687 of the Civil Code as well as Section 6 of B.P. Blg. 877.
Article 1673 (1) of the Civil Code provides that the lessor may judicially eject the lessee when the period agreed upon, or that which is fixed for the duration of leases under Articles 1682 and 1687, has expired.
Meanwhile, Article 1687 of the same Code states that if the period for the lease has not been fixed, it is understood to be from year to year, if the rent agreed upon is annual; from month to month, if it is monthly; from week to week, if the rent is weekly; and from day to day, if the rent is to be paid daily.
Lastly, Sec. 6 of B.P. Blg. 877 expounds on the application of the Civil Code and Rules of Court of the Philippines in relation to said law. It provides that except when the lease is for a definite period, the provision of paragraph (1) of Article 1673 of the Civil Code of the Philippines, insofar as they refer to residential units covered by this Act, shall be suspended during the effectivity of this Act, but other provisions of the Civil Code and the Rules of Court on lease contracts, insofar as they are not in conflict with the provisions of the Act shall apply.
In addition, it is settled in Arab v. CA that Sec. 6 of B.P. Blg. 877 does not suspend the effects of Article 1687 of the Civil Code. Lease agreements with no specified period, but in which rentals are paid monthly, are considered to be on a month-to-month basis. They are for a definite period and expire after the last day of any given thirty day period, upon proper demand and notice by the lessor to vacate.
Issue:
Whether a contract of lease, which is verbal and on a monthly basis, is one with a definite period
Ruling:
The petition was denied.
It is well-settled that where a contract of lease is verbal and on a monthly basis, the lease is one with a definite period which expires after the last day of any given thirty-day period. In the case at bar, it has been sufficiently established that no written contract existed between the parties and that rent was being paid by petitioner to respondent on a month-to-month basis.
In Leo Wee v. De Castro wherein the lease contract did not stipulate a fixed period, it is settled that where the rentals are being paid monthly, the period of such lease is deemed terminated at the end of each month. Thus, respondents have every right to demand the ejectment of petitioners at the end of each month, the contract having expired by the operation of law. Without a lease contract, petitioner has no right of possession to the subject property and must vacate the same.
Petitioner’s ejectment is only the reasonable consequence of his unrelenting refusal to comply with respondent’s demand for the payment of rental increase agreed upon by both parties.
The lessor’s right to rescind the contract of lease for non-payment of the demanded increased rental was recognized by the Court in Chua v. Victorio. In said case, the right of rescission is statutorily recognized in reciprocal obligations, such as contracts of lease. Under Article 1659 of the Civil Code, the aggrieve party may, at his option, ask for (1) rescission of the contract; (2) rescission and indemnification of damages; or (3) only indemnification for damages, allowing the contract to remain in force.
