G.R. No. L-47350. April 21, 1981.
F. S. DIVINAGRACIA AGRO-COMMERCIAL INC., petitioner, vs. HONORABLE COURT OF APPEALS and RUFINO FERNANDEZ, respondents.

FACTS

Private respondent Rufino Fernandez’s family had leased a commercial property since 1899. After the original owners sold the property to petitioner F.S. Divinagracia Agro-Commercial Inc. in July 1974, Fernandez continued as lessee under a verbal agreement with an increased monthly rental. In October 1975, the petitioner, through its representative, informed Fernandez that his lease would terminate on October 31, 1975. When Fernandez refused to vacate, petitioner sent a formal notice and subsequently filed an unlawful detainer case.
The City Court dismissed the complaint, fixed a reasonable rent, and extended the lease for seven and a half years. On appeal, the Court of First Instance modified this, extending the lease for only one year. Fernandez then sought review from the Court of Appeals, which further modified the decision by extending the lease for five years. Petitioner now assails this five-year extension via certiorari, arguing it constitutes a grave abuse of discretion under Article 1687 of the Civil Code.

ISSUE

Did the Court of Appeals commit a grave abuse of discretion in extending the lease period for five years pursuant to Article 1687 of the New Civil Code?

RULING

No. The Supreme Court affirmed the decision of the Court of Appeals, finding no grave abuse of discretion. Article 1687 of the Civil Code provides that if no period for the lease is fixed, it is understood to be from year to year, and the courts may fix a longer term for the lease after considering the circumstances of the case. The appellate court’s extension for five years was a valid exercise of its discretionary power under this provision.
The Court held that the appellate court properly considered the long-standing occupancy of the lessee’s family since 1899, spanning over seven decades, in the broader interest of justice and equity. The petitioner’s arguments—such as the change of ownership, the commercial nature of the property, and the fact that it was the petitioner who initiated the ejectment suit—were factual considerations already weighed by the lower courts. The Supreme Court emphasized that certiorari lies only for jurisdictional errors or when discretion is exercised in a grave, arbitrary, or despotic manner. The appellate court’s reasoned application of Article 1687, based on established jurisprudence and the peculiar circumstances of prolonged occupancy, was neither arbitrary nor capricious. Thus, the petition was denied.