GR 87415; (January, 1992) (Digest)
G.R. No. 87415 . January 23, 1992.
YEK SENG CO., petitioner, vs. THE HONORABLE COURT OF APPEALS, DEWEY VELOSO YAP and DAVID T. VELOSO YAP, respondents.
FACTS
The private respondents, as lessors, filed an ejectment complaint against the petitioner-lessee, Yek Seng Co., in the Municipal Trial Court (MTC) of Manila. The basis was a verbal contract of lease for a portion of a building on Ylaya Street, used by the petitioner for its general merchandise business for over twenty years at a monthly rental of P3,000.00. The lessors notified the petitioner on December 12, 1985, of their intention to terminate the lease to renovate and personally use the building. The petitioner refused to vacate and filed a petition for consignation of rentals.
The MTC ruled in favor of the lessors, ordering ejectment and awarding attorney’s fees. This decision was affirmed by the Regional Trial Court (RTC) and subsequently by the Court of Appeals.
ISSUE
Whether the courts below erred in not granting the petitioner an extension of the lease under Article 1687 of the Civil Code.
RULING
The Supreme Court denied the petition and affirmed the lower courts’ decisions. The Court held that Article 1687, which allows courts to fix a longer lease term when no period is fixed and the lessee has occupied for over a year, is not automatically applicable. The provision is permissive, not mandatory, and its application depends on the presence of justifiable circumstances warranting an extension.
The petitioner’s sole claim for extension was its over twenty-year occupancy. The Court found this insufficient, distinguishing the case from Divino v. Marcos, where an extension was granted due to peculiar circumstances: an assurance from the lessors of indefinite stay as long as rent was paid, and the lessee’s construction of substantial improvements with the lessors’ consent. No such assurances or improvements were proven here. The RTC correctly noted the petitioner submitted no evidence of circumstances justifying an extension beyond mere long-term occupancy.
The Court also upheld the award of attorney’s fees due to the petitioner’s unreasonable refusal to vacate after proper termination, which compelled the lessors to litigate. It strongly admonished against the practice of filing groundless appeals merely to delay ejectment, noting the petitioner had gained a de facto extension of almost six years through litigation, to the prejudice of the lessors’ renovation plans.