GR L 50998; (January, 1983) (Digest)
G.R. No. L-50998. January 31, 1983.
FELIPE V. CRUZ, petitioner, vs. Hon. ISAAC S. PUNO, JR., as Judge, CFI of Manila, Branch XXXV, et al, respondents.
FACTS
Petitioner Felipe V. Cruz filed an ejectment suit against private respondents Rogelio and Erlinda Gundayao, lessees of a one-door apartment on a month-to-month basis. The lease contract stipulated it could be terminated by either party via a written thirty-day notice. Cruz sent such a notice on October 16, 1975, demanding vacation of the premises. The lessees refused, contending the ejectment was a ruse to violate Presidential Decree No. 20, which suspended a lessor’s right to eject under Article 1673 of the Civil Code for leases without a definite period. They argued their month-to-month lease was indefinite. The City Court ruled for Cruz, but the Court of First Instance reversed, holding the lease was for an indefinite period and thus governed by P.D. No. 20, barring ejectment.
ISSUE
Whether a month-to-month lease contract terminable on thirty-day notice is a lease for a “definite period” exempt from the suspension of ejectment under Section 4 of P.D. No. 20.
RULING
Yes. The Supreme Court granted the petition and reinstated the City Court’s ejectment decision. The lease contract, being on a month-to-month basis and terminable on a thirty-day notice, constitutes a lease for a definite period. This interpretation aligns with the precedent in Rantael vs. Court of Appeals. More critically, the contractual right to terminate via notice was a valid, binding obligation mutually assumed by the parties when the contract was executed, long before P.D. No. 20 took effect. To apply P.D. No. 20 to nullify this pre-existing contractual right would impair the obligation of contracts, violating the constitutional prohibition. The decree, aimed at social justice and regulating leases during an economic crisis, must be construed prospectively to avoid constitutional infirmity. It restricts the freedom to contract for future agreements but cannot retroactively invalidate the enforceable obligations of a valid pre-existing contract. Therefore, Cruz could legally enforce the termination clause.