Yap vs. Cruz

Yap vs. Cruz

G.R. No. 89307, May 8, 1992

MEDIALDEA, J.:

Parties of the Case:

DR. MA. WENDELYN V. YAP, EVELIA H. BADIAGAN, TERESITA A. BALADAD and FLORENCIA C. DE VERA (petitioners)

DR. VERGEL G. CRUZ, THE HON. MARCELO R. OBIEN, as Presiding Judge of the Regional Trial Court of Manila, Br. 44, and THE HON. COURT OF APPEALS (respondents)

Nature: This petition seeks the reversal of the decision of respondent Court of Appeals in dismissing the petition for review and affirming the decision of the Regional Trial Court of Manila, Branch 44 in which in turn affirmed the decision of the Metropolitan Trial Court of Manila, Branch 27 in Civil Case No. 113298.

Keywords: tenant, malate veterinary clinic, forcible entry, new lease contract

Summary: Dr. Cruz is a tenant in good standing and offered in good will the sale of his veterinary clinic to Dr. Yap, thus introducing him to the landowners during negotiations. When the said sale failed to marterialize, Dr. Yap and the Landlord came into an agreement to lease the property to the former without notice to Dr. Cruz who was at the time the current lease holder. Dr. Cruz then filed an action for Forcivle Entry with Damages.

MTC, RTC, CA: Decided in favor of Dr. Cruz

Facts:

Dr. Vergel G. Cruz, the private respondent in this case was the bonafide tenant of Amado Q. Bugayon, Jr. for almost five years in the premises in question just before this controversy started. He religiously paid the monthly rentals of P1,400.00, introduced several improvements and operated a veterinary clinic known as Malate Veterinary Clinic. Sometime in the latter part of July, 1985, he offered for sale the goodwill of the veterinary clinic and some of its equipment to Dr. Wendelyn V. Yap, Evelia H. Badiagan, Teresita A. Baladad and Florencia C. de Vera, the petitioners herein. During the period of negotiations, private respondent Cruz introduced to the landlord Dr. Wendelyn V. Yap at the person interested in taking over the clinic. However, the negotiations did not materialize but the petitioners managed to enter into a contract of lease for the said premises at a monthly rental of P1,800.00 with the landlord. As a result, private respondent Cruz brought an action for "Forcible Entry with Damages" with the Metropolitan Trial Court of Manila, Branch 27 against petitioners herein and the landlord.

MTC: rendered its decision in favor of private respondent Cruz, the dispositive portion of which states: defendant to vacate the premises and surrender possession to the plaintiff, and the landlord to pay damages

RTC: affirmed the decision of the MTC

CA: dismissed the petition for review of petitioners and affirmed the decision of the RTC

Issue: WON the CA erred in ruling that the lower courts were correct in their decision that the petitioners must vacate the premises and turn over the possession thereof to the private respondent despite the fact that the private respondent had already failed and refused to pay for the rentals thereof, thus, did not have any right thereto, and the petitioners had a valid lease agreement thereof with the owner of the premises

HELD:

We rule in favor of private respondent. When the petitioners and the landlord executed a new contract of lease, the lease of private respondent was still valid and subsisting. There is no question that private respondent has not effectively relinquished his leasehold rights over the premises in question in view of the failure of negotiations for the sale of the goodwill. Clearly, the transfer of the leasehold rights is conditional in nature and has no force and effect if the condition is not complied with.

True, the lease of private respondent is on a month-to-month basis and may be terminated at the end of any month after proper notice or demand to vacate has been given (Rivera v. Florendo, G.R. No. 60066, July 31, 1986, 143 SCRA 278; Zablan v. CA, G.R. No. 57844, September 30, 1987, 154 SCRA 487; Uy Hoo and Sons Realty Development Corp. v. CA, G.R. No. 83263, June 14, 1989, 174 SCRA 100; Palanca v. IAC, G.R. No. 71566, December 15, 1989, 180 SCRA 119). In the case at bar, however, the lack of proper notice or demand to vacate upon the private respondent is clearly evident. In the absence of such notice, the lease of private respondent continues to be in force and can not be deemed to have expired as of the end of the month automatically. Neither can the non-payment of the rent for the month of August, 1985 be a ground for termination of the lease without a demand to pay and to vacate. The instant case can easily be differentiated from the case of Vda. de Kraut v. Lontok, G.R. No. L-18374, February 27, 1963, 7 SCRA 281, which was cited by petitioners in support of their contention that a lease on a month-to-month basis may be terminated at the end of any month and shall be deemed terminated upon the lessee's refusal to pay the increased rental because here there was neither demand on the part of the landlord to pay the rental nor refusal on the part of the private respondent to pay the same as in fact he made a tender of his rental payment in the latter part of August, 1985. Thus, when the landlord and the petitioners entered into a new contract of lease effectively depriving the private respondent of his lease, they were clearly guilty of forcible entry in view of the subsisting lease of private respondent.

Ruling: ACCORDINGLY, the petition is hereby DENIED and the questioned decision of the Court of Appeals is AFFIRMED.