Facts:

The case involves Marlene Madriaga as the petitioner and Mila Hatanaka as the respondent, with the decision rendered by the Court of Appeals on October 8, 1986. The events leading to the case began in 1973 when Madriaga leased a two-storey commercial building located at the corner of San Andres and Leveriza Streets in Manila from the Rodriguezes and Chicos. The primary purpose of the lease was to establish her pharmaceutical business. To accommodate her growing needs, she subleased portions of the upper floor: one to Dr. Rogelio Sangalang in August 1973 for a monthly rental of P300.00, which he used as a dental clinic, and another to Hatanaka in 1974, also at P300.00 monthly, which Hatanaka utilized as her residence. The sublease agreements were temporary, stipulating that Madriaga could reclaim the premises upon notifying the sublessees if she required them for her business. By 1978, Madriaga's business had flourished, prompting her to renew her lease and terminate the s...

Facts:

1. Lease Agreement and Sublease

   • Petitioner Marlene Madriaga leased a two-storey commercial building in Manila from the Rodriguezes and Chicos starting in 1973.
   • She subleased portions of the upper floor to Dr. Rogelio Sangalang (for a dental clinic) and private respondent Mila Hatanaka (for residential purposes) at P300.00 monthly rental each.
   • The sublease agreements were temporary, with the understanding that Madriaga could reclaim the premises if needed for her business.

2. Termination of Sublease

   • In 1978, Madriaga's business prospered, and she renewed her lease for the building.
   • She notified Sangalang and Hatanaka to vacate the premises as she needed the space for her expanding business.
   • Sangalang complied, but Hatanaka refused to vacate.

3. Legal Proceedings

   • Madriaga filed an ejectment case against Hatanaka in the City Court of Manila, which dismissed the complaint.
   • On appeal, the Regional Trial Court reversed the decision and ordered Hatanaka's eviction.
   • Hatanaka appealed to the Court of Appeals, which reversed the RTC decision and dismissed the complaint.
   • Madriaga then filed a petition for review with the Supreme Court.

Issue:

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Ruling:

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Ratio:

1. Termination of Lease Agreement as Ground for Ejectment

   • The termination of a lease agreement is a valid ground for ejectment under Article 1673 of the Civil Code and Section 6 of B.P. Blg. 25.
   • Since the lease was on a month-to-month basis, it could be terminated at the end of any month.

2. Application of Rent Control Law

   • The Court held that the Rent Control Law (B.P. Blg. 25) applies to the premises because Hatanaka used the subleased portion for residential purposes.
   • However, the law does not prevent ejectment if the lessor (Madriaga) needs the premises for her business, as agreed upon in the sublease contract.

3. Enforceability of the Agreement

   • The agreement between Madriaga and Hatanaka allowed for the termination of the sublease if Madriaga needed the premises for her business.
   • This agreement was valid and enforceable, and Madriaga's notification to Hatanaka effectively terminated the sublease.

4. Character of the Premises

   • The Court emphasized that the character of the premises is determined by its use. Since Hatanaka used the premises for residential purposes, it was considered a residential unit under the Rent Control Law.
   • However, the temporary nature of the sublease and the agreement between the parties took precedence over the residential character of the premises.

Conclusion:

The Supreme Court ruled in favor of Madriaga, holding that the termination of the lease agreement was valid and enforceable. The Rent Control Law did not bar the ejectment of Hatanaka, as the agreement allowed for termination if Madriaga needed the premises for her business.