EDUARDO M. LESACA, PETITIONER, VS. HON. SERAFIN R. CUEVAS, AS JUDGE CFI OF MANILA, BRANCH IV, ET AL., RESPONDENTS.

This is a petition for review of the decision of the Court of
First Instance of Manila, Branch IV, which dismissed the complaint in the ejectment
case earlier filed with the City Court of Manila, Branch XIII. The respondent court reversed
the decision of the city court after finding the latter without jurisdiction
over the case on the ground that no demand was made by petitioner as required
by Section 2, Rule 70 of the Rules of Court. On a find­ing that
only a question of law was involved, the Court of Appeals certified the case to
us for deci­sion.

Petitioner Eduardo M. Lesaca is the
owner of the properties located at 80-0 Chica Street and 29-F, Isla de Romero, Quiapo, Manila,
both leased to respondent, Tan Chun, on a month-to-month basis, payable in
advance within the first five days of each month, at the rate of P770.00 and
P562.00 rentals per month respectively.

On April 15, 1974,
the petitioner sent two letters to the respondent, advising him of an increase
by 50% in the rentals for both premises, to take effect in May 1, 1974. The increased rate was subsequently
reduced to 25%, hence, 80-0 Chica
Street was raised from P562.00 to P702.50 and 29-F
Isla de Romero, from P770.00 to P962.50 rentals per
month.

On May 12, 1975,
the petitioner’s counsel sent two letters to respondent, both stating that:

xxx                xxx                   xxx

“Our client further informed us that as of May 5, 1975, the sche­duled date of monthly
rental payment for
May, you have not complied with the
above adjusted monthly rental.

“In the event that the above increased rental is not with your
approval, you should vacate the above-mentioned premises within the 1st 15 days
of the month of June, 1975, for our client is hereby terminating your
month-to-month lease effective May,
1975. This letter will therefore, serve as the demand to pay the increased
rental and/or to vacate said
premises.”

On June 25, 1975, the respondent sent by regis­tered mail to the
petitioner, a Metro Bank and Trust Company Check, dated June 25, 1975 in the
sum of P2,310.00 in payment for rentals in arrears for
the 29-F Isla
de Romero premises and a Consolidated Bank and Trust Company Check dated June
25, 1975 in the amount of P1,686.00 for the 80-0 Chica
premises. Both payments were based on the old rates.

Petitioner referred the matter to his lawyer who filed a complaint for ejectment before the City Court of Manila. The petitioner
alleged in his complaint that the premises are commercial in nature and that the respondent does business
under the names “Philippine Cotton Mop Manufacturing” and “Ever
Ready Hardware”.

In an amended decision, the above court rendered judgment ordering the respondent to
vacate the premises in question and to pay increased rentals beginning May,
1975 until he actually vacates said premises.

In his appeal to the Court of First Instance, the respondent
contended that “the inferior court erred in assuming jurisdiction over
this case and/or in not holding that the present action for ejectment
is premature.”

The questioned decision of the respondent court states inter alia:

xxx                xxx                   xxx

“The Court subscribes with the defendant-appellant’s view that the demand to vacate in the
instant case is almost identical and/or similar to
that sent by the plaintiff in the case of Vda. de Murga
vs. Chan, L-24680, Oct. 7, 1968,
Vol. 25, SCRA p. 441. The requisite
demand prescribe by law do not
exist, (sic) defendant-appellant being in the actual and physical possession of
the leased premises pursuant to a verbal contract of lease existing between them and the demand being in the alternative whereby a new
increased rental is charged and sought to be collected, an ejectment suit may
be instituted against said defendant, only upon default and/or failure to pay
the said increased rental after
a demand to vacate the same, subject to no condition, has been served upon said
defendant-appellant. The evidence on record, however, is totally bereft of any such demand made the plaintiff-appellee upon the defendant-appellant.

“UPON THE FOREGOING
CONSIDERATIONS, the Court, therefore, finds the Court a quo to be without jurisdiction over the case; consequently the decision
appealed from is, as it is
hereby set aside and reversed with costs against plaintiff-appellee.”

A motion for reconsideration filed by the peti­tioner was denied by the lower court, hence this petition for review.

The only question to be resolved in this petition is whether or
not the demand to vacate provided under Section 2,
Rule 70 of the Rules of Court in unlawful detainer
cases is required by the circumstances of the present case.

The above rule provides:

Rule 70, Sec. 2. – Landlord to proceed against tenant only after demand. No landlord, or his legal
representative or assign, shall bring such action against a tenant for failure to pay rent due or
to comply with the conditions of
his lease, unless the tenant shall have failed to pay such rent or comply with
such conditions for a period of
fifteen (15) days or five (5) days in
case of building, after demand therefore, made upon him personally, 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 persons be found thereon.

Petitioner maintains that the contract of lease between him and
the respondent is on a month-to-month basis which terminates at the end of each
month, with­out the necessity of a special demand. Therefore, the above-quoted
rule does not apply as the action instituted by him is for the termination of
the lease because of the expiration of its term. He cites the case of Co Tiamco v.
Diaz (75 Phil. 672) where the court ruled that “a demand is a
pre-requisite to an action for unlawful detainer,
when the action is ‘for failure to pay rent due or comply with the conditions
of his lease’, and not where the action is to termi­nate the lease because of
the expiration of its terms.”

The petition is impressed with merit.

A lease contract
“on a month-to-month basis” provides for a definite period and may be
terminated at the end of any month. (See Rantael
v. Court of Appeals, 97 SCRA 453; Cruz v. Puno, Jr.,
120 SCRA 497).

In the case at bar, when respondent Tan Chun refused to pay the
increased rentals for the month of May, 1975, the lease contract was deemed
terminated as of said month, not only because of the letters sent to him by the
petitioner informing him that the lease was to be terminated effective May,
1975, but more so by his refusal to pay the increased rate while remaining in
the premises. In the case of Vda. de Kraut v. Lontok, 7 SCRA 281, we ruled:

“x x x Considering that appellee was
occupying the premises in question on a month to month basis, it can not be
denied that appellant had the right to terminate the lease at the end of any
month. The contract bet­ween the
parties herein must therefore be deemed terminated upon appellee’s
refusal to pay the P60.00 monthly rental demanded by appellant — which does not appear to be exorbitant.”

Similarly, in Bulahan, et
al., v. Tuason, et al., 109
Phil. 251, we ruled:

“x x x The rule is settled that the owner of the land leased has the right not only to terminate the
lease at the expiration of the term, but
also to demand a new rate of rent. The tenant or lessee has the
option either to accept the new rent or vacate
the premises. (Iturralde v. Alfonso, 7 Phil., 576; Iturralde v.
Evangelista, 7 Phil., 588; Iturralde v. Magcauas,
9 Phil., 599; Cortez v. Ramos,
46 Phil., 189). As plaintiffs, after the termination of their lease, refused either to pay the new rent or to vacate the lots after the termination of their
lease, they have evidently become deforciants, and
can be ousted judicially without the need of a demand. (Citing
Co Tiamco v. Diaz,
75 Phil. 672; Art. 1669,
new Civil Code; reiterated in Gindoy v. Court of Appeals, 97 SCRA 453).”

We distinguish the facts of this petition from the Vda. de Murga case, 25 SCRA 441, where the Court applied the
ruling in Manotok v. Guinto,
101 Phil. 383, as follows:

“x
x x We, however,
do not find such notice (the alternative either to pay the increased rental
or otherwise to vacate the land) to be the demand contemplated by the Rules of Court in ‘unlawful detainer‘
cases. When after the notice the appellant elected to stay, he thereby merely
assumed the obligation of paying the new rental and could not be ejected until he defaulted in said obligation and necessary demand was first
made.”

Such was the ruling in Vda.
de Murga because in said case, the lease
contract provided that upon its expiration, the lessor
had the option to purchase the
improvements introduced by the lessee on the leased premises; but in the event that the lessor did not exercise such option, then the contract was
auto­matically renewed. Therefore, the court correctly ruled that a more definite demand to vacate was
necessary to give the lessor the right to eject the lessee from
the premises. However, in the present case, the petitioner had the right
to terminate the lease at the end of every month as he did so in May, 1975,
when the lessee refused to pay the increased rentals. The lessee, therefore,
had no alternative but to vacate the premises and his refusal made him a deforciant who could be ousted judicially without the need
of the more specific demand he insists upon. Furthermore, even assuming that
there was a need for such a demand in the instant case, we believe that the
alternative demand to pay the increased rental onto vacate the premises is
sufficient under the law to enable the lessor to
bring an ejectment case because as stated earlier,
the lessee lost all his rights to remain in the premises upon the expiration of
the lease contract in May, 1975. There is,
there­fore, no need for a more definite and unconditional demand to
vacate as he had no legal right to remain in
the premises. In PNB v.
Animas, (117 SCRA
735) where similarly, the possessor had no right to remain in the premises, we
ruled:

“x x x It is a fact that
private res­pondent was tolerated by herein
petitioner to stay in the
property after September 11, 1956.
It was only on December 12, 1968 when petitioner
wrote private respondent ‘to vacate the premises thereof, or to deliver plaintiff’s share of the
income derived from the fruits of the land.’ Thus, it was only after written
demand was made upon the defendant to leave the premises that her possession
became unlawful.”

In the above-cited case, we construed the demand made by the
petitioner to vacate the premises or to deliver the fruits of the land
sufficient to make the respondent’s possession of the premises illegal. The
demand in the case at bar should be construed in the same manner.

WHEREFORE, the decision of the Court of First Instance and
its order denying the motion for reconsideration are hereby reversed and set
aside. Respondent Tan Chun and any and all persons claiming under him are
ordered to vacate the premises located at 29-F Isla
de Romero, Quiapo, Manila,
and at 80-0 Chica Street,
Quiapo, Manila,
and to restore to the petitioner the possession thereof. The judgment of the
City Court of Manila in Civil Case No. 002526-CV, is ordered reinstated.

SO ORDERED.

Teehankee, (Chairman), Melencio-Herrera, Plana, and Relova, JJ., concur.