Rivera vs. Florendo

In a verbal residential lease where rent is paid monthly and no definite period is stipulated, the period is from month to month under Article 1687 of the Civil Code; the suspension of Article 1673 under Batas Pambansa Blg. 25, Section 6 does not suspend Article 1687, and the lease is deemed terminated at the end of the month following proper notice, allowing the lessor to eject the lessee on the ground of need for own use under Section 5(c) of the same law.

Petitioners-spouses Felisa and Godofredo Rivera were the owners of apartment buildings on Quirino Avenue, Pandacan, Manila. Private respondent Pacifico Aquino began occupying unit No. 2034 under a verbal lease in 1965, agreeing to a monthly rent of ₱120.00 with no stipulation as to the period of lease. After judicially ejecting the tenant of unit No. 2036 in 1979, petitioners moved into that unit. In December 1979, however, they sold unit No. 2036 to raise money to pay a loan with Monte de Piedad Loan and Savings Bank and avert foreclosure of the entire apartment building. Petitioners then relocated to a rented apartment in Guadalupe, Makati, paying ₱500.00 monthly. On January 24, 1980, they notified private respondent of their need to use the premises for their own residence and demanded that he vacate within ninety days. Private respondent refused.

• The Lease: Sometime in 1965, private respondent Pacifico Aquino began occupying apartment unit No. 2034 at Quirino Avenue, Pandacan, Manila, owned by petitioners-spouses Felisa and Godofredo Rivera. The lease was verbal, the rent was set at ₱120.00 monthly, and no fixed term of duration was agreed upon.

• Change in Circumstances: In 1979, after judicially ejecting the tenant of their unit No. 2036, petitioners moved into that unit. In December 1979, to avert foreclosure of the entire apartment building, petitioners sold unit No. 2036 to raise funds to pay a loan with Monte de Piedad Loan and Savings Bank. Thereafter, petitioners rented an apartment in Guadalupe, Makati, at ₱500.00 a month.

• Notice and Refusal: On January 24, 1980, petitioners sent private respondent a letter notifying him of their need to repossess unit No. 2034 for their own use and asking him to vacate within ninety days. Private respondent refused to leave after the ninety-day period lapsed.

• City Court Decision: The City Court of Manila adjudged in favor of petitioners, ordering ejectment, payment of monthly rents from January 1981 at ₱120.00, attorney’s fees of ₱1,000.00, and costs.

• Court of First Instance Reversal: On appeal, the Court of First Instance held that since the lease had no definite period and Article 1673 of the Civil Code was suspended by Batas Pambansa Blg. 25, the lease period had not expired, and petitioners could not repossess the unit despite their need. It applied Salaria v. Buenviaje and concluded that the ground of expiration under Article 1673(1) was unavailable, leaving petitioners without a legal basis for ejectment.

• Subsequent Developments: During the pendency of the petition before the Supreme Court, private respondent and his son migrated to the United States, leaving the premises occupied by a relative without payment of rent. Petitioners repeatedly sought early resolution, citing privation and the urgent need for the premises.

• Expiration of the Verbal Lease: Petitioners contended that although the lease was verbal and without a fixed term, the monthly rental payments made it a month-to-month lease under Article 1687 of the Civil Code. Upon their notice to vacate and the lapse of the ninety-day period, the lease was terminated at the end of the month, satisfying the requirement under Section 5(c) of Batas Pambansa Blg. 25 that the period of lease has expired.

• Scope of Suspension under BP 25: Petitioners argued that Section 6 of Batas Pambansa Blg. 25 suspends only Article 1673, not Article 1687. Thus, the determination of the lease period remained governed by Article 1687, and the suspension of the right to eject based on expiration alone did not bar ejectment grounded on the owner’s need to repossess, provided the lease period had expired by operation of law.

• Legislative Intent to Correct Injustice: Petitioners asserted that Section 5(c) was included in Batas Pambansa Blg. 25 precisely to remedy the inequity created by Presidential Decree No. 20, which did not recognize the lessor’s need as a ground for ejectment. To adopt the lower court’s interpretation would render Section 5(c) illusory in all verbal, indefinite-term residential leases.

Private respondent Pacifico Aquino did not file an answer before the Supreme Court. However, the Court of First Instance decision in his favor effectively articulated his position:

• Lease Period Not Expired: Private respondent maintained that because the verbal lease had no fixed or definite period, and Article 1673 of the Civil Code—which governs the expiration of lease periods—was expressly suspended by Section 6 of Batas Pambansa Blg. 25 insofar as residential units are concerned, the lease agreement had not expired. Without expiration of the period, none of the statutory grounds for ejectment, including the owner’s need, could be invoked.

• Application of Salaria v. Buenviaje: Private respondent relied on the Court of First Instance’s reasoning that Salaria v. Buenviaje compelled dismissal because the only ground available to a lessor under a suspended Article 1673 was the expiration of the period, and that ground was unavailable during the effectivity of the rent control law.

• Expiration of Verbal Lease under BP 25: Whether the period of a verbal residential lease, where rent is paid monthly and no definite term was stipulated, had expired within the meaning of Section 5(c) of Batas Pambansa Blg. 25, such that the lessor could eject the lessee on the ground of need to repossess for personal use.

• Expiration of Verbal Lease under BP 25: The period of the lease had expired. Section 6 of Batas Pambansa Blg. 25 suspends only paragraph (1) of Article 1673 of the Civil Code—the ground of expiration of the agreed or legal period—but it does not suspend Article 1687. Article 1687 provides that when rent is paid monthly, the lease is from month to month. The giving of proper notice to vacate terminated the lease at the end of the month. Consequently, the condition precedent in Section 5(c) that “the period of lease has expired” was satisfied, and the lessor’s need for the premises constituted a valid ground for ejectment. The contrary interpretation adopted by the lower court would render Section 5(c) nugatory in all indefinite-term verbal leases, a result contrary to the legislative intent to correct the harshness of Presidential Decree No. 20. The case of Salaria v. Buenviaje was distinguished because it involved Presidential Decree No. 20, which did not include the lessor’s need as a ground for ejectment and thus left the lessor with only the suspended ground of expiration.

• Doctrine on Determination of Period in Verbal Month-to-Month Lease under Rent Control Law: In a residential lease where no definite period is fixed and rent is paid monthly, the period is from month to month pursuant to Article 1687 of the Civil Code. Section 6 of Batas Pambansa Blg. 25 suspends only the lessor’s right to eject based on the expiration of that period under Article 1673(1); it does not suspend the operation of Article 1687 for the purpose of determining whether the period has expired. Once the lessor gives the required three-month advance notice and the period expires at the end of the month, the lessor may invoke any of the statutory grounds for ejectment under Section 5 of Batas Pambansa Blg. 25, including the need to repossess for his own use or that of an immediate family member. To hold otherwise would render Section 5(c) illusory and defeat the law’s intent to balance the rights of tenants and small landowners. (Following Baens v. Court of Appeals, 125 SCRA 634, and Crisostomo v. Court of Appeals, 116 SCRA 199.)

• “What is suspended under the aforequoted provision of law is Article 1673 of the Civil Code of the Philippines and not Article 1687 of the same Code. The effect of said suspension is that independently of the grounds for ejectment enumerated in Batas Pambansa Blg. 25, the owner/lessor cannot eject the tenant by reason of the expiration of the period of lease as fixed or determined under Article 1687. It does not mean that the provisions of Article 1687 itself had been suspended. Thus, the determination of the period of a lease agreement can still be made in accordance with said Article 1687.”

• “[E]ven if the month to month arrangement is on a verbal basis, if it is shown that the lessor needs the property for his own use or for the use of an immediate member of the family or for any of the other statutory grounds to eject under Section 5 of Batas Pambansa Blg. 25, which happens to be applicable, then the lease is considered terminated as of the end of the month, after proper notice or demand to vacate has been given.”

• “To adopt, therefore, the construction given by respondent court is to render Section 5(c) of Batas Pambansa Blg. 25 illusory in cases where the lease agreement is verbal and for an indefinite period, because in this case, the owner/lessor, notwithstanding his pressing and urgent need for the premises could never successfully eject the tenant as the period of lease would never expire during the effectivity of Batas Pambansa Blg. 25.”

• Baens v. Court of Appeals, 125 SCRA 634 — Followed. Established that in a verbal month-to-month lease, the period expires at the end of the month after proper notice, allowing the lessor to invoke grounds for ejectment under Section 5 of Batas Pambansa Blg. 25.

• Crisostomo v. Court of Appeals, 116 SCRA 199 — Cited as supporting precedent for the same proposition.

• Salaria v. Buenviaje, 81 SCRA 722 — Distinguished. That case involved Presidential Decree No. 20, which did not provide for the ground of owner’s need; the only possible ground—expiration under Article 1673—was suspended, leaving no legal basis for ejectment. In contrast, Batas Pambansa Blg. 25 expressly allows ejectment for the lessor’s own use, and the suspension of Article 1673 does not bar the operation of Article 1687.

• Onchengco v. City Court of Zamboanga, 92 SCRA 313 and Sinclair v. Court of Appeals, 115 SCRA 318 — Cited in support of the principle that the property rights of small landowners/lessors are protected by the fundamental law even during the effectivity of rent control legislation.

• Section 5(c), Batas Pambansa Blg. 25 — Allows judicial ejectment on the ground of need of the owner/lessor to repossess the property for his own use or that of an immediate family member, subject to the provisos that the period of lease has expired, three months’ advance notice has been given, and the owner or immediate member stays in the unit for at least one year except for justifiable cause. Applied to uphold the right to repossess upon satisfaction of all conditions, including expiration of the period under Article 1687.

• Section 6, Batas Pambansa Blg. 25 — Suspends paragraph (1) of Article 1673 of the Civil Code insofar as it refers to residential units during the effectivity of the Act, except when the lease is for a definite period. Other provisions of the Civil Code and Rules of Court on lease contracts apply if not in conflict with the Act. The provision was interpreted to suspend only the ground for ejectment based on expiration of the period under Article 1673, leaving Article 1687 operative for determining the period of the lease.

• Article 1673(1), Civil Code — Provides that the lessor may judicially eject the lessee when the period agreed upon or fixed under Articles 1682 and 1687 has expired. Its suspension under BP 25 was held to bar ejectment solely on the ground of expiration, not to prevent the period from expiring by operation of Article 1687.

• Article 1687, Civil Code — States that if the period for the lease has not been fixed, it is understood to be from month to month when the rent is paid monthly. Applied to determine that the verbal lease was on a month-to-month basis and expired at the end of the month following proper notice.

Feria (Chairman), Alampay, Gutierrez, Jr., and Paras, JJ., concurred.

None. The decision was unanimous.