G.R. No. 115763 . May 29, 1997.
PIO Q. PATERNO, petitioner, vs. COURT OF APPEALS and ANGELINA REYES, respondents.

FACTS

Petitioner Pio Paterno owned an apartment unit in Manila. In 1964, he entered into a one-year written lease contract with Lydia Lim. The contract expired in August 1965, but Lim continued to occupy the premises and pay monthly rentals, thereby creating an implied new lease under Article 1670 of the Civil Code. Sometime in 1969, Lim immigrated to the United States, leaving her sister, private respondent Angelina Reyes, in possession of the apartment. Reyes continued to pay the rent, with receipts issued in Lim’s name. Paterno alleged he was unaware of Lim’s absence until December 1991. In January 1992, he sent Reyes a notice to vacate. Upon her refusal, he filed a forcible entry case in the Metropolitan Trial Court (MeTC), which ruled in his favor, finding Reyes’s possession by “strategy or stealth.”
The Regional Trial Court (RTC) reversed the MeTC, holding that an implied month-to-month lease with Lydia Lim subsisted and had not been validly terminated, as no notice to vacate was served upon Lim, the lessee. It considered Reyes merely a caretaker. The Court of Appeals affirmed the RTC with modification, deleting an award of attorney’s fees. It found no forcible entry, as Reyes did not occupy the premises in her own right through force, strategy, or stealth.

ISSUE

Whether the Court of Appeals erred in dismissing the forcible entry case and in upholding the existence of a subsisting implied lease with Lydia Lim, thereby barring Paterno’s action to recover possession.

RULING

The Supreme Court granted the petition, reversing the Court of Appeals and reinstating the MeTC judgment. The legal logic proceeds as follows: First, upon the expiration of the original fixed-term lease in 1965, Lim’s continued possession with Paterno’s acquiescence created an implied new lease under Article 1670, which is on a month-to-month basis, terminable at the end of any month by a demand to vacate. Second, the right to possess under this implied lease is personal to the original lessee, Lydia Lim. The Civil Code prohibits the assignment of the lease without the lessor’s consent. By leaving the country and ceding physical possession and rental payment responsibility to her sister Reyes since 1969 without Paterno’s knowledge or consent, Lim effectively assigned the lease. This constituted an unauthorized sublease or assignment, which is a valid ground for judicial ejectment under Article 1688(7) in relation to Article 1649. Reyes’s possession was therefore not derived from a lawful relation with Paterno after Lim’s departure.
Consequently, Paterno’s action for ejectment was properly filed against the actual occupant, Reyes. The Court further exercised its discretion under Article 1687, noting that Reyes had been in possession for over 28 years, and deemed no further extension of the lease term necessary. Thus, Paterno was entitled to restitution of possession.