G.R. No. L-24664 May 29, 1968
CORAZON ALEGRE, ET AL., plaintiffs, MARCIANO BAO, RAFAEL ADELAN, SALUD LUALHATI, ELENA MORALES, PEDRO MARCELO, WILLIAM SANOSA, MILAGROS SANTIAGO, VIOLETA TAN, TOMAS IGNACIO, MARIANO SY, PAULINO FRANCISCO, BERNABE LOPEZ, JAMES TAN and CLARA BATALLER, plaintiffs-appellants, vs. VICTORIA G. DE LAPERAL, defendant-appellee.

FACTS

Defendant Victoria G. de Laperal owned apartment houses in Manila. The plaintiffs were her tenants, occupying separate apartments. On October 27, 1964, defendant notified plaintiffs that effective January 1, 1965, they must pay increased rentals or vacate the premises. Plaintiffs refused both options. On January 5, 1965, they judicially consigned the old rental amounts and filed an action in the Court of First Instance of Manila, praying that defendant be ordered to accept rentals at the old rates, that the lease duration be fixed, and that defendant pay damages. Defendant, in her answer, alleged the contracts were on a month-to-month basis, entitling her to increase rentals at each month’s expiration, and that plaintiffs must vacate if unwilling to pay. The lower court dismissed the complaint, ordered plaintiffs to vacate, and to pay back rentals at the old rates up to 30 days from notice of judgment, and thereafter at the increased rates until vacating. Plaintiffs appealed. The lower court later authorized execution of its judgment pending appeal because plaintiffs failed to deposit the monthly rentals as ordered. Plaintiffs moved for a preliminary injunction in the Supreme Court to restrain execution, which was denied.

ISSUE

1. Whether the lower court erred in deciding the lease contract was for a definite period.
2. Whether the lower court erred in failing to take judicial notice of Manila Ordinance No. 4841, Series of 1963, and to hold the increased rentals exceeded its limit.
3. Whether the lower court erred in dismissing the complaint.
4. Whether the lower court erred in ordering execution of the decision pending appeal.

RULING

1. The lower court did not err. Article 1687 of the Civil Code, which allows courts to fix a longer term for leases not for a fixed period, does not grant lessees a positive right to demand a longer term; it vests discretionary authority in the court. Plaintiffs did not show an abuse of discretion. Furthermore, such extension must be sought before the lease termination, not after. The case was filed five days after the lease contract expired per defendant’s notice.
2. The lower court did not err. While the Manila ordinance limits rental increases to 10% per annum of the assessed value of the property, there was no competent evidence on the assessed value in the record. Thus, the court had no means to ascertain whether the increases exceeded the limit, even if judicial notice of the ordinance were taken.
3. The dismissal of the complaint was proper, as the issues raised by plaintiffs were devoid of merit.
4. The lower court did not err in ordering execution pending appeal. Defendant’s counterclaim pleaded all elements of an unlawful detainer case (unlawful withholding of possession after termination of right), making Section 10 of Rule 70 applicable. Since plaintiffs failed to deposit the rentals fixed in the decision, execution was proper under Rule 70. Alternatively, even considering the case as an ordinary action, the lower court retained jurisdiction to order execution under Rule 39, Section 2, as the motion was filed before the final approval of the record on appeal. The approval of the record on appeal was merely provisional, as the motion for execution was still pending.
The decision appealed from was affirmed.