GR L 12949; (August, 1918)

EN BANC

G.R. No. L-12949; August 7, 1918

LOUIS OTTOFY, plaintiff-appellee,

vs.
JAMES S. DUNN, defendant-appellant.

Chas. A. McDonough for appellant.
H. V. Bamberger for appellee.

FISHER, J.:

This is an action by plaintiff against defendant to recover the sum of P37 alleged to be due him under the terms of a contract of lease. The suit was commenced in the court of the justice of the peace of Manila and carried from that court on appeal to the Court of First Instance. Judgment was rendered in favor of plaintiff for the amount demanded, with interest and costs. Defendant excepted to the judgment, moved for a new trial, excepted to the order denying his motion, and brought the case here by bill of exceptions.

The evidence shows and the court below found that on March 14, 1916, the plaintiff and the defendant entered into a written contract of lease in the following terms:

This agreement is entered into between Louis Ottofy, lessee of the premises at 54 A. Mabini, Ermita, Manila, and James S. Dunn, of Manila, regarding the rental of the lower floor of said premises:

1. The rent is fifty pesos (P50) per month, payable in advance on the first day of each month.

2. As the lessee is held responsible for the perfection of the property, including the water and sewer service with their connections, and is obliged to conform to police and sanitary regulations, the tenant of the lower floor, agrees on his part also, to comply with all requirements in like manner.

3. In addition to the quarters on the lower floor, the tenant is further entitled, (a) to the servant’s room immediately adjoining the said quarters, and (b) to the inclosed yard which is entered through said servant’s room, for laundry, cooking, etc.

4. If the tenant of the lower floor desires to vacate the premises, he shall give thirty days’ written notice, permit the posting of “for rent” notices at the same time, and permit from that time on, at reasonable times, the viewing of the premises on part of prospective tenants. On the other hand, the tenant shall not be caused to vacate the premises, unless thirty days’ written notice has been given him.

This agreement shall take effect April 1, 1916, and the receipt of one peso is hereby acknowledged as part payment toward the rent for the month of April, 1916.

The defendant took possession of the leased premises under the terms of the contract. On May 14, 1916, he gave the plaintiff notice in writing that he would vacate the premises on June 14, 1916. On or about June 1, 1916, the defendant offered to pay plaintiff P25 as rent up to June 15, 1916, but the offer was refused upon the ground that the rent was due and payable for the whole month of June. The defendant vacated the premises June 14, 1916, without having paid any part of the June rent, although he was willing to pay and offered to pay the portion of it corresponding to the first half of the month. The plaintiff succeeded in renting the premises to another tenant on or about June 23, 1916, and for the rent of that month collected the sum of P13, which sum deducted from P50 leaves a balance of P37, for the recovery of which plaintiff brings this action. Upon these facts the trial judge held that, under the terms of the contract, on the first day of each month the rent became due and payable in advance for the whole month; that the notice of intention to vacate took effect on the rent day next following the date upon which the notice was given; that the effect of the notice given by defendant on May 14, 1916, was to terminate the contract on the 30th day of June following and not on the fourteenth day of June, as contended by defendant. In disposing of defendant’s motion for a new trial in support of which it was argued that the decision was contrary to the provisions of articles 1566 and 1581 of the Civil Code, the trial judge said:

The attorney for the defendant has filed a motion for a new trial upon statutory grounds, and contends that, under the contract of lease in this case, the defendant was not liable for the whole month’s rent from and after June 1, 1916, because the lease term began April 1, 1916, and ended April 30, 1916, and that it must be considered as having been tacitly renewed for the month of May, 1916, as the defendant paid that month’s rent in advance and occupied the premises after the 15th of the month; but that this tacit renewal cannot be presumed as to the month of June, because notice was given on May 15th that the premises would be vacated on June 15th.

The defendant cites articles 1566 and 1581 of the Civil Code and contends that there was no renewal of the lease for the whole of the month of June because the premises were not occupied by the defendant after the 15th of that month. The court is of the opinion that the question of the renewal for each succeeding month did not depend upon whether or not the defendant held over after the 15th of the month under a contract making the rent payable monthly in advance on the first day of each month from and after April 1, 1916, unless thirty days’ of notice of the tenant’s intention to vacate was given, the rent for the month of May became due and payable of May 1, and for the rent for June became due and payable on June 1, in the absence of full thirty days’ notice under the contract of defendant’s intention to vacate the premises. Therefore, under the contract, the holding of the premises by the defendant for any part of June made him liable for the whole month of June. In other words, when the defendant held over into the month of June and the rent for that month became due and payable under the contract, the defendant’s obligation to pay the rent for June could not be satisfied by paying for part of the month and for that reason the notice given by the defendant on May 14 of his intention to vacate premises on June 15 was no more effective as thirty days’ notice under the contract than if it had been given on June 1, 1916.

The language quoted by the counsel from the case of Eleizegui vs. Manila Lawn Tennis Club (2 Phil. Rep., 309, 310) and from Gonzalez vs. Crisanto (2 Phil. Rep., 404, 405, 406, 409, 410, 411) is not in conflict with the decision in this case. Under the contract of lease in the first case the tenancy was subject to termination at the will of the tenant, and the lease shows that the rent for each month was not payable until the first five days of each month was not payable until the first five days of each succeeding month and in that case it was held by the Supreme Court that the tenant was not bound for each successive month, except by a tacit renewal, citing article 1566 of the Civil Code, and holding that this effect might be prevented by giving the required notice, and in the second case the lease had expired on May 1, 1897, and the tenant held over for several years, and the Supreme Court held that “this tenancy was the result of successive implied renewals from month to month since May, 1897, inasmuch as the rental agreed upon has been paid from month to month since that time,” and that “this renewal was finally concluded in January, 1902, by virtue of the notice to quit given on February 6, following.”

The amount involved in his case is small, but the question is important, and the parties decided to fight it out in the court. In the opinion of this court the law is with the plaintiff, and the court can find no just ground for depriving the successful party of this legal right to recover from the defeated party the costs allowed by law in such cases.

In view of the foregoing considerations, the court finds no merit in the grounds of the motion for a new trial, and the same is hereby overruled.

It is contended on behalf of appellant that the court below erred in his construction of the contract and in his interpretation of articles 1566 and 1581 of the Civil Code, as applied to them. We are constrained to agree with appellant. As we read the contract under consideration the tenancy created by it was not a tenancy from month to month governed by article 1581 of the Civil Code, but a tenancy at will governed by the terms of the agreement. A tenancy from day to day, month to month, or year to year, governed by article 1581 may arise in either of two ways. If the parties say nothing in the contract of lease as to its duration and make no provision for its termination upon notice the duration is determined by the agreement as the periods at which the rent is payable. At the end of each period, whether it be day, week, month or year, the term of the lease expires, without notice. If the tenant is permitted to commence a new period, there is a tacit renewal of the lease for a like term. Such a tenancy may also arise, under article 1566 of the Civil Code, if at the expiration of a lease for a definite period the tenant is permitted to hold over for fifteen days. That is to say, if by the terms of the lease the period of its duration was five years, for instance, and a monthly, quarterly, or yearly rental was reserved, and upon its expiration the tenant, with the acquiescence of the landlord, holds over for fifteen days, this does not bring about a tacit renewal of the lease for another term of five years, but creates a tenancy from month to month, from quarter to quarter, or from year to year, as the case may be, governed thereafter, as to duration and renewal, by article 1581. This article, therefore, provides a legal term by which to ascertain the duration of a lease when (a) the parties have made no agreement at all on the subject in their contract or (b) when they have made such an agreement, and the stipulated term has expired. But it is only when there is no conventional term that the legal term applies.

In the case of Eleizegui vs. Manila Lawn Tennis Club (2 Phil. Rep., 309), the lease was to continue “for all the time the members of the club” might desire to use the land. The trial court treated this contract as creating a lease from month to month ? the rent being payable monthly. This court held that this was error, saying:

. . . the judge has only to determine whether there is or is not a conventional term. If there be a conventional term, he cannot apply the legal term fixed in subsidium to cover a case in which the parties have made no agreement whatsoever with respect to the duration of the lease.

The agreement that the lease should continue at the will of the lessee was construed to create a conventional term of indefinite duration; that it was not terminable upon notice by the landlord, but that the courts might make the period definite, in an appropriate action, under article 1128 of the Civil Code.

In Gonzalez vs. Crisanto (2 Phil. Rep., 404, 409), it was contended by the tenant that upon the expiration of the term of three years for which the premises in question had been leased he was permitted to hold over for more than fifteen days, and that this had brought about a tacit renewal of the lease for another three years. The court held that the resulting tenancy was one from month to month only, under article 1566, a monthly rental having been reserved under the original contract.

In the case of Soriano vs. Heirs of Roxas (4 Phil. Rep., 638), it appeared that the property in question had been leased under an agreement for the payment of a monthly rental, the tenancy to continue at the will of the tenant. The original tenant died, and his heirs were permitted by the landlord to continue in possession of the leased property. As a defense to the action of the landlord for the recovery of possession of the premises, it was contended that the tenancy at will had been transmitted to the heirs of the original tenant. The court held that the conventional term expired at the death of the original tenant, and that “the occupation of the property by defendants after the death of their ancestor was by virtue of the tacit renewal mentioned in article 1566. By the terms of the original lease the rent was payable monthly, and this being urban property, article 1581 of the Civil Code is applicable. The defendants, therefore, since 1897 have been and are now in possession merely as tenants from month to month and plaintiff had the right to eject them at the end of any month . . . .”

It seems obvious, therefore, (a) that articles 1566 and 1581 are not applicable when the parties have stipulated a conventional term and (b) that it is not necessary, in order that a conventional term exist, that it be definite. It is true that according to article 1543 of the Civil Code, the contract of lease is defined as being an agreement by which one of the parties undertakes to give the other “the enjoyment or use of a thing for a definite period and for a certain price;” but, as Manresa observes (vol. 10, p. 505), this language is not to be construed literally in the sense of prohibiting leases of indefinite duration, for the possibility of the existence of such leases is of necessity implied in the language of article 1565 of the Code. This article provides that “If the lease has been made for a definite term, it expires upon the designated day, without the necessity of a demand.”

The rule established by this article being conditional, referring, as Manresa says (vol. 10, p. 546) to something which may or may not have been stipulated ? a definite term.

The conclusion is logical . . . that together with leases made for a definite term the Code recognizes these others in which this definiteness is lacking.

Examining the lease here in suit in the light of these considerations, the conclusion seems inevitable that it is one in which the parties have provided for a conventional term of indefinite duration ? that is, that it shall continue indefinitely unless and until one of the parties shall give the required notice. When that notice is given the term ceases to be indefinite, and upon the expiration of the period the contract ends. (art. 1565) To interpret the contract as does the court below is to disregard the valid stipulation of the parties which has the force of law between them (Civ. Cod. art. 1091) regarding its duration, and to substitute in place of the conventional term, a legal term which as we have demonstrated is only applicable in subsidium. If the fourth paragraph had been omitted from the contract unquestionably the rent for a whole month would have become due upon the beginning of each month. Had nothing been stipulated regarding the duration of the lease, the agreement to pay a monthly rental, due on the first of each month, would have created a tenancy from month to month, terminating at the end of each month, but extended for another month, by tacit renewal, by the mere fact of the continuation of possession by the tenant, no express notice to vacate having been given after the expiration of the term. It is not necessary that the occupancy should continue for fifteen days to bring about a tacit renewal. The requirement of possession for fifteen days (art. 1566) only applies in case of a holding over after the expiration of a lease for a definite term and with respect to the first period. That is to say, upon the expiration of the conventional term the tenant may be evicted at any time within fifteen days. But this right to evict him within fifteen days does not apply to the successive renewals of the term under article 1581. When the rent is payable monthly the right of the tenant to possession and of the landlord to his rent is fixed by the mere holding over the succeeding term. That the fifteen-day clause of article 1566 is not applicable to successive renewals under 1581 is clearly shown by the fact that the latter article regulates not only tenancies from year to year and month to month but also tenancies from day to day. It follows, therefore, that if nothing had been stipulated in the contract except that the rent was to be payable in advance on the first of each month, the liability for the payment of another month’s rent would have been rent would have been definitely imposed by the continued occupation of the premises after the end of each successive month. The court below held that the stipulation in the contract that the rent was to be “P50 per month, payable in advance on the first day of each month” imposed upon the tenant the obligation to pay a full month’s rent on the first of June, regardless of the fact that on the 14 of May he had given written notice of his intention to vacate the premises on the 14th of June. The effect of this construction is to abrogate the stipulation that the lease might be terminated on thirty days’ written notice, and leaves the contract as it would have been had the fourth clause been eliminated. We are of the opinion that the proper construction of the first clause is that is imposes upon the tenant the obligation of paying in advance on the first of each month whatever is due the lessor at that time. If notice of intention to vacate had not been given a full month’s rent would have been due. The tenant having given timely notice of his intention to vacate the premises on June 14, the amount of rent payable in advance on June 1 was the amount to accrue between that date and the date upon which the term of the lease was to expire. It is admitted that this amount was tendered.

For the reasons stated we are of the opinion that the lease was terminated on June 14, 1916, and that no rent was due from the tenant, in excess of the sum proportionate to the period between the 1st and the 14th of the month. Plaintiff is entitled to this amount but tender thereof having been made and refused before the commencement of the suit defendant is entitled to recover his costs.

The judgment of the court below is reversed. Judgment is hereby given in favor of plaintiff against defendant for the sum of P25, and of defendant against plaintiff for the costs of the action in court of the justice of the peace, the Court of First Instance, and this Court So ordered.

Arellano, C.J., Torres, Street, Malcolm and Avanceña, JJ., concur.

Batas Pinas