G.R. No. 164349 - Radio Communications of the Philippines, Inc. vs. Verchez

Spouses Augusto and Celia Legasto originally owned an apartment building along E. Rodriguez, Sr. Boulevard in Quezon City.
They entered into a written lease contract with private respondents (Pascual and Ancheta) covering unit 318-T.
The Legasto spouses later organized Legar Management & Realty Corporation and transferred all their rights, interests, and privileges over the property to the petitioner.
After the transfer, petitioner continued the lease arrangement with respondents based on a verbal, month-to-month contract in which the monthly rental was P1,545.00.

Although originally set up as a verbal contract, the lease was interpreted as a month-to-month arrangement under Article 1687 of the New Civil Code, rendering it a lease with a definite period.
Petitioner, relying on the established month-to-month period, issued formal termination notices:

To private respondent Pascual on April 21, 1992 – directing vacation of unit 318-T by the end of May 1992.
To private respondent Ancheta on June 4, 1992 – directing vacation of unit 318-T by the end of June 1992.

Private respondents refused to vacate the premises and continued occupying the leased unit.

Petitioner instituted an ejectment case in the Metropolitan Trial Court (MTC) of Quezon City (Civil Case No. 6011).
The MTC ruled in favor of petitioner, holding that the month-to-month lease, being for a definite period, was properly terminated upon petitioner's notice, thereby justifying ejectment.
On appeal, the Regional Trial Court (RTC) reversed the MTC decision, reasoning that under Section 6 of Batas Pambansa Blg. 877 (as amended) the mere expiration of a month-to-month lease does not automatically authorize ejectment unless other grounds pursuant to Section 5 of the same statute are present.
The Court of Appeals upheld the RTC decision, emphasizing prior decisions which suggested that, for residential properties covered by the Rent Control Law, expiration alone was insufficient to justify ejectment unless additional grounds were met.

Petitioner elevated the case to the Supreme Court, contesting the decisions of the lower courts by asserting that the expiration of a month-to-month lease, upon proper notice, constitutes sufficient ground for ejectment.
The Supreme Court revisited established jurisprudence, including its own decision in Acab vs. Court of Appeals, which maintained that the expiration of a month-to-month lease (as governed by Article 1687) is definitive and permits ejectment.
The Court also cited earlier cases like Rivera vs. Florendo, Miranda vs. Ortiz, and Palanca vs. Intermediate Appellate Court to highlight that a verbal lease contract with monthly rentals is inherently for a definite period that expires upon the last day of the pertinent month if proper notice is given.

Whether a month-to-month verbal lease agreement is to be treated as a lease with a definite period subject to expiration.

Analysis of whether Article 1687 of the New Civil Code categorizes such leases as definite.
The implications of such classification on the termination and consequent ejectment of the tenant.

Whether the mere expiration of the lease period, upon proper notice of termination, can serve as sufficient ground for ejectment under the Rent Control Law and Batas Pambansa Blg. 877.

Whether the provisions of Section 6 of BP 877 (and its amendments) suspend the application of Article 1687 with respect to the determination of the lease period.
The necessity (or lack thereof) of additional grounds enumerated in Section 5 of BP 877 for justifying ejectment in residential lease cases.