THE ESTATE OF VICTORIO VALLE, SUBSTITUTED BY ELEANOR R. VALLE-SIAPNO, BRENDA VALLE-CABANG, ALBERTO, MARIO, OCTAVIO AND OLIVER, ALL SURNAMED VALLE, PETITIONERS, VS. THE ESTATE OF…
LOPEZ, J.:
The factual milieu of the case is as follows:
The property subject of this case is a parcel of commercial land denominated as Lot No. 504-B situated in Magugpo, Tagum, Davao del Norte and consisting of 28,118 square meters, owned by the late Corazon Rojo (Corazon) as per Transfer Certificate of Title (TCT) No. 53453.[3] Such property was leased to Victorio Valle (Victorio) since the 1950s, wherein he and his wife (Luisa Valle) constructed a residential/commercial building and established their residence, as well as put up an eatery with a sari-sari store called Valle Lunch. In 1974, Victorio died but his heirs continued to lease the subject lot from Victoria, with its rent last fixed at One Thousand Pesos (P1,000.00) per month.
Eventually, Corazon died and her estate was administered by Evangeline Cuntapay. Thereafter, in a letter dated 15 December 2004, the Estate of Corazon Rojo (respondent), through counsel, informed the heirs of Victorio that it is no longer keen on continuing the lease of the subject lot to them as it intended to use the premises and, thus, demanded that they vacate and surrender possession of the same, as well as pay the amount of P161,000.00 constituting accumulated unpaid rentals as of December 2004.[4] These demands were reiterated in a letter dated 11 April 2005, additionally asking Victorio’s heirs to remove all the structures and improvements they had introduced on the leased premises. The latter, however, failed and refused to heed the said demands.
Hence, on 11 August 2005, respondent filed before the Municipal Trial Court in Cities (MTCC), Tagum City, Davao del Norte a complaint for Ejectment and Damages against the Estate of Victorio Valle (petitioner), represented by his heirs, which was docketed as Civil Case No. 6634-05.
In its complaint, respondent averred that the term of the lease was on a monthly basis because there was no agreement expressly fixing its period. Also, it alleged that petitioner had been remiss in paying the monthly rental of the subject lot and that Victorio’s heirs failed: (1) to pay the accumulated arrears; (2) to vacate and surrender possession of the leased premises; and (3) to remove all their structures thereon despite repeated demands. Respondent added that the former’s continued failure to comply with its demands had unlawfully deprived it of the possession and beneficial use of the subject lot. Hence, it prayed inter alia for their (Victorio’s heirs) ejectment therefrom.
Answering the complaint, petitioner denied being remiss in paying the subject lot’s rent, countering that it was constrained not to pay because respondent refused to receive its payments, the last of which was delivered sometime in year 2000 in the amount of P10,000.00. Petitioner likewise denied leasing the subject lot on a monthly basis, asserting that although its rent was computed at P1,000.00 per month, the same was not paid monthly but intermittently, sometimes on a three-month period or on annual basis, depending on the need of the lessor (Corazon) such as its payment made in June 1991 for P33,000.00, covering a period of thirty-three (33) months.
Petitioner alleged that its intermittent mode of paying the rent was tolerated by Corazon and by her estate thereafter because of the length of time that Victorio and his family had occupied the leased premises. On the other hand, petitioner contended that even if it leased the subject lot on a month-to-month basis, the monthly expiration of said lease is not a sufficient cause for ejectment, arguing that in cases where the lease period is not fixed, only the landowner’s intended use of the leased premises can be a valid ground for terminating the lease agreement.
Additionally, as special and/or affirmative defenses, petitioner contended that respondent is not entitled to the relief prayed for and that the complaint should be dismissed for lack of cause of action. The former averred that the latter has no cause of action for ejectment as it (petitioner) had been paying the rent and because a new verbal agreement had already been forged between one of Victorio’s heirs (Eleonor Valle-Siapno) and respondent’s administratrix (Cuntapay), following its (petitioner) receipt of the 11 April 2005 demand letter, by which the latter had extended its (petitioner) period of lease over the subject lot and even waived the back rentals in consideration of Luisa Vda. de Valle’s bedridden condition at that time.
On 26 June 2007, the MTCC rendered its Decision[5] in favor of respondent, holding that:
The case law is to the effect that the acceptance by the lessor of the payment by the lessee of the rentals in arrears does not constitute a waiver of the default in payment as a valid cause of action for ejectment. (citation omitted).
x x x x x x
As early as December 15, 2004 and reiterated on April 11, 2005, plaintiff has served notice to herein defendant to vacate the said premise (sic) because it is no longer keen on continuing the verbal lease agreement. The subsequent filing of the present case is therefore, well within, the one (1) year jurisdictional period of time to do so.
Clearly, therefore, plaintiff by preponderance of evidence has validly and sufficiently proved his cause of action to eject herein defendant.
WHEREFORE, judgment is hereby rendered ordering defendant ad (sic) follows:
- to vacate the subject premises and to surrender the peaceful possession of the same to the plaintiffs;
- to pay the monthly rentals in arrears from December 2004 in the amount of one thousand pesos (Php 1,000.00) until defendants have vacated the premised and surrendered the possession to the plaintiffs;
2. (sic) to pay attorney’s fee in the amount of five thousand pesos (Php 5,000.00) and cost of suit.
x x x
On appeal, the court a quo affirmed the foregoing findings in its assailed Decision dated 23 April 2008, ratiocinating in this wise:
x x x On the first assigned error, x x x, it is clear that the contract that was forged by the original parties, x x x, was a Contract of Lease. Apparently, no written nor (sic) verbal agreement as to the period or duration of the contract. But, it is clear that both parties agreed to fix the rental for One Thousand Pesos (P 1,000.00) per month. In fact an amount of Thirty-Three Thousand Pesos (P 33,000.00) was paid by defendant that covers Thirty-Three (33) months. Similarly, in the case of Dula versus Maravilla, G.R. No. 134267, May 9, 2005, the Court had the following findings, to wit:
“It is acknowledged that there was neither any written nor verbal agreement as to a fixed period of lease between the respondent and petitioner. There was, however, a verbal agreement for the payment of rental at P2,112.00 on a monthly basis. By express provision of Article 1687 of the Civil Code, the term of lease in the case at bar is month to month.”
Citing the case of De Vera versus Court of Appeals, 329 Phil 175, the Court continued saying that:
“x x x The issue in this case is whether the oral contract of lease was on a month-to-month basis which is terminated at the end of every month. We hold that it is. We have already ruled in a number of cases that a lease on a month-to-month basis is, under Article 1687, a lease with a definite period, upon the expiration of which upon demand made by the lessor on the lessee to vacate, the ejectment of the lessee may be ordered.
x x x
x x x
The allegation of defendant-appellee, that considerations were made with plaintiff-administratrix Cuntapay after the dialogue, finds no credence. x x x. As to whether or not a new agreement was forged upon during the alleged meeting, the same was not substantiated with clear and convincing evidence. Besides, the demands were clear that defendant should vacate the premises and pay the arrears. Considering that defendant failed to abide with the x x x demand letter, this present case was instituted.
Such findings, (sic) likewise resolves the second error assigned by appellant.
x x x The present action is clearly for an Unlawful Detainer. x x x. Similarly, after the receipt of the demand letter and with the refusal to adhere to the content of such valid and lawful demand, defendant’s possession of the subject property becomes illegal. Consequently, the demand to vacate terminates the verbal Contract of Lease earlier agreed upon by the parties. x x x.
As to the third error, appellant contended that the court a quo erred in failing to fix the lease contract. Be it noted that the aforequoted provision of the law, (sic) uses the word “may”, such that “the Courts may fix a longer term for the lease”. x x x. Being discretionary, the Court a quo not compelled to fix a longer term of lease.
WHEREFORE, finding no reversible error in the assailed decision, the same is hereby affirmed in toto.
SO ORDERED. (Underscoring ours)
Dissatisfied, the Estate of Victorio is now before Us through the present recourse, imputing on the court a quo the following errors:
- The RTC Branch 30 of Tagum City, Davao del Norte erred in affirming in toto the Decision of the Municipal Trial Court in Cities, Tagum City in finding that there was an unlawful detainer case;
- The RTC Branch 30 of Tagum City, Davao del Norte erred in disregarding the evidence presented on the lack of the requisites, i.e., failure to pay rent and a demand to vacate prior to the filing of the Unlawful Detainer case;
- The respondent courts erred in their failure to fixing the term of the lease. (Emphasis in the original)
Petitioner maintains that respondent has no cause of action for unlawful detainer because the two requisites to bring such suit in court are lacking, to wit: (1) there must be failure to pay rent or comply with the condition of the lease; and (2) there must be a demand both to pay or comply and to vacate within the period prescribed under Section 2 of Rule 70, Rules of Court.[6]
Petitioner argues that it had paid rentals to respondent, although intermittently, which the latter had accepted despite its lapses; hence, the first requisite for unlawful detainer is wanting. It (petitioner) also contends that the second requisite for such action no longer exist because following petitioner’s receipt of the April 2005 demand letter, a new verbal contract of lease was already negotiated and renewed between the parties wherein respondent’s administratrix had waived the demands for payment of back rentals and for Victorio’s heirs to vacate the leased premises.
Anent the third error, petitioner faults the court a quo for not applying Article 1670[7] in relation to Article 1687[8] of the New Civil Code, contending that it is incumbent upon the latter to fix a term of the lease agreement between the parties, consistent with Article 1197[9] of said Code.
Per Minute Resolution[10] dated 2 August 2011, respondent waived the filing of its comment on the petition.
After a judicious evaluation, We deny the present petition for being unmeritorious.
The core issue for resolution here is whether or not the court a quo committed reversible error in affirming the MTCC’s decision which held that respondent properly availed of an ejectment suit for unlawful detainer against petitioner. Specifically, We must determine: (1) whether respondent (lessor) had a valid cause of action for unlawful detainer against petitioner (lessee); and (2) whether the provision of Article 1687, stating “even though a monthly rent is paid, and no period for the lease has been set, the courts may fix a longer term for the lease after the lessee has occupied the premises for over one year”, is applicable to the case at bar.
On the first inquiry, We sustain both lower courts in finding that respondent has a valid cause of action for ejectment, i.e., unlawful detainer, against petitioner.
Unlawful detainer is a summary action for the recovery of possession of real property.[11] Such action exists when a person unlawfully withholds possession of any land or building against or from a lessor, vendor, vendee or other persons after the expiration or termination of the right to hold possession, by virtue of any contract, express or implied.[12] The possession by the defendant in unlawful detainer is originally legal, as his possession was permitted by the plaintiff on account of an express or implied contract between them. However, the defendant’s possession became illegal when the plaintiff demanded that the defendant vacate the subject property due to the expiration or termination of the right to possess under the contract, and the defendant refused to heed such demand.[13]
Unless otherwise stipulated, the action of the lessor shall commence only after a demand to pay or to comply with the conditions of the lease and to vacate is made upon the lessee; or after a written notice of that demand is served upon the person found on the premises, and the lessee fails to comply therewith within 15 days in the case of land or 5 days in the case of buildings.[14] The action for unlawful detainer must be brought before the proper metropolitan or municipal trial court (MTC) within one year from the date of last demand, and the issue in the case must be the right to physical possession.[15]
In Teraña v. Hon. Anotnio de Sagun,[16] the Supreme Court enumerated the essential requisites for a special civil action for unlawful detainer, to wit:
1) the fact of lease by virtue of a contract, express or implied;
2) the expiration or termination of the possessor’s right to hold possession;
3) withholding by the lessee of possession of the land or building after the expiration or termination of the right to possess;
4) letter of demand upon lessee to pay the rental or comply with the terms of the lease and vacate the premises; and
5) the filing of the action within one year from the date of the last demand received by the defendant.
In the case at bar, requisites 1, 4 and 5 have been duly established. The existence of a verbal contract of lease over the subject lot between petitioner as lessee and respondent as lessor since the 1950s is undisputed, by reason of which, the former obligated itself to pay rent to the latter at P1,000.00 per month and lawfully possessed the leased premises. Also, notices or letters of demand to pay the rent arrears and to vacate the leased premises had been sent to petitioner in December 2004 and April 2005, who admitted receipt of the latter notice. Lastly, respondent’s ejectment suit was filed on 11 August 2005, well within the one-year period from petitioner’s receipt of the last demand letter in April 2005.
Petitioner, however, disputes the existence of the second requisite by denying respondent’s claim that the term of their verbal lease agreement was on a monthly basis. It (petitioner) contends that no period of lease was set between them even though the rent was fixed at a monthly rate; hence, it called on the lower courts to fix the said term pursuant to Article 1687 of the Civil Code.
Petitioner’s contention does not hold water. Per its admission, the rent of the subject lot was computed monthly at the agreed rate of P1,000.00 per month, although the same was intermittently paid to and accepted by respondent. However, petitioner’s irregular payments of the rent did not in any way negate the parties’ agreement and intent for the rent to be paid monthly. This being the case, the court a quo is correct in declaring that the term of the verbal lease agreement over the subject lot is on a month-to-month basis.
The pertinent pronouncements in Lopez v. Umale-Cosme[17] are instructive, to wit:
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 recent case of Leo Wee v. De Castro[18] where the lease contract between the parties did not stipulate a fixed period, we ruled:
The rentals 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 operation of law. Without a lease contract, petitioner has no right of possession to the subject property and must vacate the same. Respondents, thus, should be allowed to resort to an action for ejectment before the MTC to recover possession of the subject property from petitioner.
Corollarily, petitioner’s ejectment, in this case, is only the reasonable consequence of his unrelenting refusal to comply with the respondents’ demand for the payment of rental increase agreed upon by both parties. x x x. (Underscoring Ours)
As reiterated in Fernandez v. Amagna,[19] 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.
Accordingly, with respondent’s final notice of demand to vacate the leased premises served on and received by petitioner in April 2005, their verbal lease agreement is deemed to have expired in the subsequent month of May 2005. Corollary thereto, absent any express contractual renewal of the lease agreement, petitioner’s continued occupation of the subject lot thereafter is already illegal and constitutes unlawful withholding of its possession from respondent. This complies with the third requisite for a valid cause of action for unlawful detainer.
Moreover, petitioner’s claim that it was not remiss in paying rent to respondent is negated by the admission in its pleadings that its last payment of rent was made sometime in the year 2000 in the amount of P10,000.00. This declaration constitutes judicial admission; hence, conclusive upon petitioner. Judicial admissions made by parties in the pleadings, or in the course of the trial or other proceedings in the same case are conclusive and so do not require further evidence to prove them. [20]
Anent petitioner’s allegation that following receipt of the second demand letter in April 2005, it had already negotiated a new verbal agreement with respondent’s administratrix by which the latter extended its lease over the subject lot and waived its payment for the rent arrears, the court a quo correctly held that the same is unsubstantiated and merely self-serving. Basic is the rule that he who alleges must prove his allegations.[21] Here, petitioner failed to prove such allegation; hence, it deserves scant consideration and unworthy of credence.
Resolving now the second inquiry, We hold that given Our finding that the verbal lease agreement between petitioner and respondent was for a definite period, it being on a month-to-month basis, petitioner’s invocation of the pertinent provision of Article 1687 of the Civil Code, stating “However, even though a monthly rent is paid, and no period for the lease has been set, the courts may fix a longer term for the lease after the lessee has occupied the premises for over one year.”, lacks factual and legal bases. To stress, such provision applies only when no period for the lease has been set, which is not the case here.
Besides, even granting ex gratia argumenti that such pertinent provision of Article 1867 is applicable, We find that the circumstances obtaining herein do not warrant the extension of lease as prayed by petitioner. The pronouncements in Yap v. Court of Appeals[22] are enlightening, thus:
The crux of the controversy is the proper application of Art. 1687 of the Civil Code –
x x x In this case, since payment of rentals is made monthly, the life of the lease contract expires at the end of every month and tacitly renewed (tacita reconduccion) every time the lessor accepts the monthly payment. At the end of October 1990, the lessor MLI opted, as is within its rights to do so, not to renew the lease nor accept payment. Thus, the lease was terminated ipso facto, and a demand to vacate was not even necessary for judicial action after the expiration of every month. The contract having expired, the lessee could not belatedly file a suit in equity to extend its term.
x x x In Acasio v. Corp. de los PP. Dominicos de Filipinas[23] this Court ruled that the power of the courts to “fix a longer term for the lease” is potestative or discretionary, to be exercised or not in accordance with the particular circumstances of the case; a longer term to be granted where equities come into play demanding extension, to be denied where none appears, always with due deference to the parties’ freedom to contract.
In Yek Seng Co.[24] we held: “The circumstance that the lessee has paid its rentals religiously during the past twenty (20) years is also not sufficient to justify the extension that it demands. Neither are the substantial improvements it allegedly made on the leased premises nor the difficulty of finding another place of business, on which it has not submitted any evidence at all.” While private respondents are correct in saying that Art. 1687 rewards a lessee for its loyalty, the law is not so lopsided as to disregard altogether the lessor’s right not to be deprived of possession for so many years. Basic common law principle of fairness and equity shuns property entailment that borders on perpetuity to the exclusion of the owner.[25]
x x x
At any rate, we note with disapproval that private respondents have already enjoyed a de facto extension of more than ten (10) years from the time the first demand to vacate was made. Their continued occupancy of the subject property is repugnant to the basic ideas of equity and fair play, and should no longer be countenanced by the courts. Indeed, the appellate court was made to play a key role in perpetuating this inequity by extending the lease contract for another three (3) years when, clearly, such extension had no basis in law and equity. (Emphasis ours)
In the present case, it is worth emphasizing that payment of rent was last made by petitioner way back in year 2000 and it had been occupying the leased premises since then without paying rent. Evidently, a period of more than four (4) years had already elapsed from said year until the first notice to vacate was served to petitioner in December 2004, throughout which, respondent had been deprived not only of its income from the subject lot but also of its beneficial use.
Moreover, with the first notice to vacate, petitioner was already apprised of respondent’s intent to terminate the lease over the subject lot. Yet, it (petitioner) continued to stay thereon. Hence, from the first demand until it received the second/last notice to vacate in April 2005, petitioner already enjoyed a three (3) month extension of its possession of the subject lot, which was then followed by another three (3) months of extended stay from April 2005 until the filing of the ejectment suit in court in August.
Considering such length of time that respondent has been deprived of the fruits and possession of its property, it would be highly unjust if We are to prolong its dispossession by extending the period of the lease over the subject lot.
All told, We find no reversible error committed by the court a quo in upholding the decision of the MTCC that respondent properly availed of the remedy of an ejectment suit because it has a valid cause of action for unlawful detainer against petitioner.
WHEREFORE, for lack of merit, the present petition is DENIED and the assailed 23 April 2008 Decision of the court a quo in Civil Case No. 3876 is AFFIRMED.
SO ORDERED.
CERTIFICATION
Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.
Camello, Chairperson and Inting, JJ., concur.
[1] Rollo, pp. 201-202.
[2] Id. at pp. 158-163, rendered by Judge Rowena Apao-Adlawan.
[3] Id. at p. 48.
[4] Id. At p. 53.
[5] Id. at pp. 121-123.
[6] Sec. 2. Lessor to proceed against lessee only after demand. – Unless otherwise stipulated, such action by the lessor shall be commenced only after demand to pay or comply with the conditions of the lease and to vacate is made upon the lessee, or by serving written notice of such demand upon the person found on the premises, or by posting such notice on the premises if no person be found thereon, and the lessee fails to comply therewith after fifteen (15) days in the case of land or five (5) days in the case of buildings.
[7] Art. 1670. If at the end of the contract the lessee should continue enjoying the thing leased for fifteen days with the acquiescence of the lessor, and unless a notice to the contrary by either party has previously been given, it is understood that there is an implied new lease, not for the period of the original contract, but for the time established in Articles 1682 and 1687. The other terms of the original contract shall be revived.
[8] Art. 1687. 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. However, even though a monthly rent is paid, and no period for the lease has been set, the courts may fix a longer term for the lease after the lessee has occupied the premises for over one year. If the rent is weekly, the courts may likewise determine a longer period after the lessee has been in possession for over six months. In case of daily rent, the courts may also fix a longer period after the lessee has stayed in the place for over one month.
[9] Art. 1197. If the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a period was intended, the courts may fix the duration thereof.
The courts shall also fix the duration of the period when it depends upon the will of the debtor.
In every case, the courts shall determine such period as may under the circumstances have been probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by them.
[10] Rollo, p. 254.
[11] Jose v. Alfuerto, G.R. No. 169380, November 26, 2012, citing Estate of Soledad Manantan v. Somera, G.R. No. 145867, April 7, 2009, 584 SCRA 81, 89-90.
[12] Samelo v. Manotok Services, Inc., G.R. No. 170509, June 27, 2012, citing Racaza v. Gozum, 523 Phil. 694, 707 (2006).
[13] Supra, note 11 (Alfuerto case).
[14] Rules of Court, Rule 70, Sec. 2.
[15] Republic v. Sunvar Realty Dev’t. Corp., G.R. No. 194880, June 20, 2012, citing Delos Reyes v. Spouses Odenes, G.R. No. 178096, 23 March 2011, 646 SCRA 328, 334.
[16] G.R. No. 152131, April 29, 2009, citing Pasricha v. Don Luis Dison Realty, Inc., G.R. No. 136409, March 14, 2008, 22 SCRA 215.
[17] G.R. No. 171891, February 24, 2009.
[18] G.R. No. 176405, August 20, 2008.
[19] G.R. No. 152614, September 30, 2009, citing Acab v. Court of Appeals, G.R. No. 112285, February 21, 1995, 241 SCRA 546..
[20] PLDT v. Pingol, G.R. No. 182622, September 8, 2010, citing Damasco v. NLRC, 400 Phil. 568, 586 (2000)
[21] Evangelista v. People, G.R. No. 163267, May 5, 2010, citing Samson v. Daway, 478 Phil. 784, 795 (2004).
[22] G.R. No. 140249, March 6, 2001.
[23] 100 Phil 523 (1956).
[24] Yek Seng v. Court of Appeals, G.R. No. 87415, 23 January 1992, 205 SCRA 305.
[25] Supra, note 22, citing Heirs of Manuel Suico v. Court of Appeals, G.R. No. 120615, 21 January 1997, 266 SCRA 444.