DAVID G. DULA, PETITIONER, VS. DR. RESTITUTO MARAVILLA AND TERESITA MARAVILLA, RESPONDENTS.

Dula versus Maravilla

The Case

This is a petition for review on certiorari brought by David Dula against the spouses Restituto Maravilla and Teresita Maravilla, arising from an ejectment case over a residential unit in Makati City. The landlord spouses bought the apartment building where Dula had long been a tenant, terminated his oral month-to-month lease on the ground of personal need, and sued to eject him when he refused to leave. The case matters because it settles, in one clean ruling, how the Rent Control Law interacts with the Civil Code rule on leases without a fixed period: the suspension touches only the provision on judicial ejectment, not the provision that fixes the term of the lease. It is a staple for questions on lease, ejectment, and the requisites of judicial ejectment for personal use.

Procedural History

The spouses filed a complaint for ejectment before the Metropolitan Trial Court of Makati City, which tried the case under the Rules on Summary Procedure and rendered judgment for the spouses, ordering Dula to vacate, to pay monthly rentals from September 1994 until possession is surrendered, to pay attorney's fees, and to pay the costs. Dula appealed to the Regional Trial Court of Makati City, arguing mainly that the complaint failed to state a cause of action; the Regional Trial Court affirmed the Metropolitan Trial Court in full and denied his motion for reconsideration. Dula then went to the Court of Appeals, which affirmed the decision but deleted the award of attorney's fees. Still unsatisfied, Dula elevated the matter to the Supreme Court by petition for review on certiorari under Rule 45, raising the same issues already passed upon by the three courts below.

Facts

In November 1993, the spouses Restituto and Teresita Maravilla purchased a five-door apartment building on Eureka Street in Makati City. Unit A of that building had been occupied by David Dula since 1968, under an oral month-to-month contract of lease with the former owner, at a monthly rental of 2,112 pesos.

On January 10, 1994, the spouses served Dula a written notice formally informing him of the termination of his lease and giving him three months from January 31, 1994 within which to vacate the unit and surrender possession. Dula refused. On September 29, 1994, the spouses filed a complaint for ejectment against him before the Metropolitan Trial Court of Makati City.

The complaint rested on two grounds: the need of the spouses to use the leased premises for their own personal use, and the expiration of the lease with the termination of the month-to-month arrangement effective January 31, 1994. In their position paper, the spouses averred that they had no other property in Makati except the Eureka Street property.

Issues

• Whether or not the ejectment complaint failed to state a cause of action because it did not allege that the respondents own no other available residential unit within the same city or municipality, as required for judicial ejectment on the ground of personal use.
• Whether or not the lower courts erred in ordering ejectment on the ground of expiration of the lease when that ground was not pleaded in the complaint.
• Whether or not the expiration of a month-to-month lease can be a basis for ejectment, given that the Rent Control Law suspended the application of the Civil Code provision on judicial ejectment.

Applicable Provisions

Section 5, paragraph (c) of Batas Pambansa Blg. 877, on judicial ejectment for the owner's personal use, provides:

Section 5. Grounds for Judicial Ejectment. Ejectment shall be allowed on the following grounds: (c) Legitimate need of owner/lessor to repossess his property for his own use or for the use of any immediate member of his family as a residential unit, such owner or immediate member not being the owner of any other available residential unit within the same city or municipality: Provided, however, That the lease for a definite period has expired: Provided, further, That the lessor has given the lessee formal notice three (3) months in advance of lessor's intention to repossess the property: and Provided, finally, That the owner/lessor is prohibited from leasing the residential unit or allowing its use by a third party for at least one year.

This is the ground the spouses invoked, and its requisites frame the Court's entire analysis.

Section 5, paragraph (f) of the same law, on expiration of the lease, provides:

Section 5. Grounds for Judicial Ejectment. Ejectment shall be allowed on the following grounds: (f) Expiration of the period of the lease contract.

This is the second ground relied upon, and it is the provision that removes the distinction between written and oral leases.

Section 6 of Batas Pambansa Blg. 877, on the application of the Civil Code, provides:

Section 6. Application of the Civil Code and Rules of Court of the Philippines. Except when the lease is for a definite period, the provisions 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 this Act shall apply.

This is the provision Dula relied upon, and the Court construes it narrowly to suspend only Article 1673, not Article 1687.

Article 1687 of the Civil Code, on leases without a fixed period, provides:

Article 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.

This is the provision that fixes Dula's lease as one from month to month, and it remains fully operative despite the Rent Control Law.

Ruling

On the first issue, the Court held that there was substantial compliance with Section 5, paragraph (c). Although the complaint itself did not allege that the spouses owned no other residential unit in Makati, they specifically averred in their position paper that they had no other property in Makati except the Eureka Street property. The Court reasoned that just as a complaint failing to state a cause of action may be cured by evidence presented during trial in regular procedure, a defective complaint in summary procedure may likewise be cured by the allegations in the position paper. The Metropolitan Trial Court therefore cannot be faulted for not dismissing the case.

On the second issue, the Court held that the complaint did plead expiration of the lease. Two grounds were relied upon: the personal need of the spouses, and the expiration of the lease contract with the termination of the month-to-month lease effective January 31, 1994. The Court then reduced the ground of personal use under Section 5, paragraph (c) to five essential requisites: the owner's legitimate need to repossess for his own use or that of an immediate family member; the owner does not own any other available residential unit within the same city or municipality; the lease for a definite period has expired; there was formal notice at least three months prior to the intended date to repossess; and the owner must not lease or allow the use of the property to a third party for at least one year. The notice and its three-month lead time were not disputed, and the fifth element is merely a condition, an undertaking not to lease the property for at least one year.

On the third issue, the Court held that the expiration of the month-to-month lease is a valid basis for ejectment. There was no written or verbal agreement as to a fixed period, but rentals were paid monthly, so by express provision of Article 1687 the term of the lease is from month to month. The Court rejected Dula's argument that Section 6 of Batas Pambansa Blg. 877 suspended Article 1687, quoting its earlier ruling that what has been suspended is Article 1673 and not Article 1687, and that the effect of the suspension on Article 1687 is only that the lessor cannot eject the tenant by reason alone of the expiration of the period of lease. Article 1687 itself may still be used to determine the period of a lease agreement. The Court also stressed that Section 5, paragraph (f) now speaks of the expiration of the period of the lease contract, thus removing the distinction between a written and an oral contract of lease. When the spouses gave notice on January 10, 1994 of their personal need to use the property and demanded that Dula vacate, the contract of lease is deemed to have expired at the end of that month, on January 31, 1994. All the elements required by Section 5, paragraph (c) were present.

Doctrine

First, the suspension under Section 6 of Batas Pambansa Blg. 877 covers only Article 1673 of the Civil Code, the provision on judicial ejectment by the lessor. Article 1687 is not suspended and remains available to determine the period of a lease. The practical effect is that the lessor cannot eject the tenant by reason alone of the expiration of the period of lease, but the term of the lease may still be fixed under Article 1687.

Second, a lease with no fixed period but with rentals paid monthly is, under Article 1687, a lease from month to month, and therefore a lease with a definite period. It expires at the end of the month upon proper notice or demand to vacate, and its expiration is a ground for judicial ejectment under Section 5, paragraph (f) of Batas Pambansa Blg. 877.

Third, the requisites of judicial ejectment for personal use under Section 5, paragraph (c) are: legitimate need of the owner or lessor to repossess for his own use or that of an immediate family member; the owner does not own any other available residential unit within the same city or municipality; the lease for a definite period has expired; formal notice at least three months before the intended date of repossession; and the owner must not lease or allow the use of the property to a third party for at least one year.

Fourth, a complaint in summary procedure that fails to allege a required element may be cured by the allegations in the position paper, in the same way that a defective complaint in regular procedure may be cured by evidence at trial.

Disposition

The petition was denied, and the judgment was declared immediately executory, so the spouses won and Dula was ordered ejected from the premises.

Remember This

Memorize this line: what Section 6 of the Rent Control Law suspended is Article 1673, not Article 1687, so a month-to-month lease is still a lease with a definite period that expires upon notice to vacate. Examiners use this case for the requisites of judicial ejectment for personal use and for the rule that an oral month-to-month lease may be the basis of ejectment under the expiration ground.