G.R. No. 159507 - Saludo, Jr. vs. American Express International, Inc.

Petitioners: Arturo P. Santos and Adelina Y. Santos, who are the legitimate tenants/lessees of an apartment in Manila.
Respondent: Aurora Gutierrez, the apartment owner who initiated an Unlawful Detainer case.
The action was filed on the grounds that petitioners were allegedly delinquent in rental payments, and respondent claimed the need of the premises for her personal use as well as for necessary repairs.

The petitioners admitted in their Answer with Counterclaim that they lease the apartment on a month-to-month basis at a rental rate of P250.00 per month.
There is an implication, based on the language of their admission, that the lease may be interpreted as having a definite period, subject to proper notice of termination, although issues later arise concerning its nature.
The controversy also involves the contention surrounding whether the lease, either embedded in a formal agreement or understood verbally, is of a definite period or merely a legal month-to-month tenancy determined by the provisions of Article 1687 of the Civil Code.

The City Court of Manila rendered a judgment ordering petitioners’ ejectment from the apartment and directed them to pay arrears in rentals, attorney’s fees, and costs of suit.
The Court of First Instance affirmed the City Court’s ruling, finding the evidence and the contract provisions conclusive.
The Court of Appeals, on a petition for review, also affirmed the decision by dismissing the petition for review for lack of merit and relying on substantial evidence supporting judicial ejectment.
Subsequently, petitioners elevated the case to the Supreme Court through a petition for review on certiorari.

Petitioners denied delinquency in rental payments, attributing the alleged deficiency to a failure by the rental collector and complications arising from the respondent’s unknown whereabouts, which forced them to deposit the payments in a bank.
They contended that the notice to vacate, delivered by registered mail under an incorrect name, did not satisfy the proper notice requirement.
Petitioners asserted that, having leased the apartment for 28 years, they were entitled to a preferential right to purchase under Presidential Decree No. 1517.
They argued that there was no genuine necessity for the respondent’s personal use of the premises.
It was further argued that the order for ejectment was erroneously rendered without compliance with both the mandatory requirements of Batas Pambansa Blg. 25 and the established ruling in Rantael vs. Llave.
Additional contentions included errors in the interpretation of month-to-month lease termination and an alleged improper change in the respondent’s theory on appeal.

Both the City Court and the Court of First Instance found that the lease, interpreted as having a definite period due to the agreement's terms and circumstances of occupancy, justified judicial ejectment upon expiration of the lease period.
The Court of Appeals affirmed these findings by noting that even on the strength of the Rantael doctrine, petitioners could be lawfully ejected regardless of the lessor’s motive.
The lower courts emphasized that under Article 1673 of the Civil Code, the lessor is entitled to eject the lessee when the agreed or fixed period of the lease expires.

Justice Melencio-Herrera, in his dissenting and concurring opinion, argued that the lease in question was not for a definite period but was a month-to-month contract subject to the provisions of Article 1687 of the Civil Code.
He contended that the suspension of Article 1673(1) by Batas Pambansa Blg. 25, which precludes ejectment solely upon the expiration of such period, should apply.
The dissent highlighted the distinction between a conventional lease via a formal written “Agreement on Occupancy of Apartment” and a legal lease arising from mere occupation, suggesting that the Rantael doctrine was not invocable in the present case.

Whether the lease was for a definite period, as indicated by the parties’ admission and the contractual terms, or if it was merely a month-to-month arrangement determined by Article 1687 of the Civil Code.

Whether petitioners were indeed delinquent in the payment of rentals, or if the alleged failure resulted from procedural or collection issues beyond their control.

Whether the sending of a notice to vacate by registered mail—despite being returned undelivered due to a wrong name—satisfied the jurisdictional requirement of proper notice.

Whether the respondent’s need for the premises for personal use and repairs was genuine and sufficient grounds for judicial ejectment.

Whether ordering ejectment without strict compliance with the mandatory requirements of Batas Pambansa Blg. 25 and the precedent in Rantael vs. Llave was legally valid.

Whether the ruling in Rantael, which supports termination at the end of a month for a definite lease, applies to the present facts given the character of the lease arrangement.

Whether petitioners’ claim to a preferential right to purchase under Presidential Decree No. 1517 is legally tenable given the circumstances of the lease.

Whether the change of theory by the respondent on appeal constitutes an error affecting the judicial ejectment decision.