Sales

case Ruling/ Doctrine

Carbonell v ca CONTRACTS; PURCHASE AND SALE OF REALTY; REGISTRATION; EFFECT OF
GOOD FAITH ON DOUBLE SALES. The buyer of realty must act in good faith in
registering his deed of sale to merit the protection of the second paragraph of Article 1544
of the New Civil Code. Unlike the first and third paragraphs of said Article which accords
preference to the one who first takes possession in good faith of personal or real property,
the second paragraph directs that ownership of immovable property should be recognized
in favor of one "who in good faith recorded" his right. Under the first and third paragraphs,
good faith must characterize prior possession. Under the second paragraph, good faith
must characterize the act of anterior registration. If there is no inscription, what is decisive
is prior possession in good faith. If there is inscription, prior registration in good faith is a
pre-condition to support title.

ID.; ID.; DOUBLE SALE ; FIRST BUYER IN GOOD FAITH WITH SUPERIOR RIGHT
OVER PROPERTY. Where the first buyer was not aware - and could not have been
aware - of any sale to another person as there was no such sale, the buyer's prior
purchase of the land was made in good faith. Her good faith subsisted and continued to
exist when she recorded her adverse claim four days prior to the registration of the second
buyer's deed of sale. The first buyer's good faith did not cease after the seller told her of
his second sale of the same lot to the second buyer. By reason thereof, she has superior
right to the land in question.

Dagupan Trading v Macam SALES; CONFLICTING SALES; ONE SALE BEFORE REGISTRATION OF LAND AND
THE OTHER AN EXECUTION SALE AFTER REGISTRATION OF LAND; LAW
GOVERNING. Where one of two conflicting sales of a piece of land was executed
before the land was registered, while the other was an execution sale in favor of the
judgment creditor of the owner made after the same property had been registered, what
should determine the issue are the provisions of the last paragraph of Section 35, Rule 39
of the Rules of Court to the effect that, upon the execution and delivery of the final
certificate of sale in favor of the purchaser of land sold in an execution sale, such
purchaser "shall be substituted to and acquire all the rights, title, interest and claim of the
judgment debtor to the property as of the time of the levy".

UNREGISTERED SALE CANNOT BE DEFEATED BY SUBSEQUENT EXECUTION SALE

AND REGISTRATION OF LATTER. Where for a considerable time prior to the levy on
execution the interest of the owner of the land levied upon had already been conveyed to
another who took possession thereof and introduced improvements therein, the aforesaid
levy is void. The prior sale, albeit unregistered, cannot be deemed automatically cancelled
upon the subsequent issuance of the Torrens title over the land.

David v Bandin UNREGISTERED LAND; DEFENSE OF BUYER IN GOOD FAITH CANNOT BE AVAILED
IN PURCHASES OF UNREGISTERED LAND; CASE AT BAR. As the record shows,
petitioners bought the property when it was still unregistered land. The defense of having
purchased the property in good faith may be availed of only where registered land is
involved and the buyer had relied in good faith on the clear title of the registered owner.
One who purchases an unregistered land does so at his peril. His claim of having bought
the land in good faith, i.e. without notice that some other person has a right to, or interest
in, the property, would not protect him if it turns out that the seller does not actually own
the property. This is what happened in the case at bar.

Olivares v Gonzales It would be more in keeping with substantial justice if the controversy between the parties
be resolved on the merits rather than on a procedural technicality in the light of the express
mandate of the Rules that they be "liberally construed in order to promote their object and
to assist the parties in obtaining just, speedy and inexpensive determination of every action
and proceeding."

Caram v Laureta The rule of caveat emptor requires the purchaser to be aware of the
supposed title of the vendor and one who buys without checking the
vendors title takes all the risks and losses consequent to such failure.
Cruz v Caban SALES; DOUBLE SALE OF REAL PROPERTY; OWNERSHIP OF PROPERTY
ACQUIRED BY VENDEE WHO FIRST REGISTERS SALE IN GOOD FAITH. As the
Court held in Carbonell vs. Court of Appeals, 69 SCRA 99 (1976), "it is essential that the
buyer of realty must act in good faith in registering his deed of sale to merit the protection
of the second paragraph of Article 1544 of the Civil Code." As the writer stressed in his
concurring opinion therein, "The governing principle here is prius tempore, potior jure (first
 in time, stronger in right). Knowledge gained by the first buyer of the second sale cannot
defeat the first buyer's right except only as provided by the Civil Code and that is where the
second buyer first registers in good faith the second sale ahead of the first. Such
knowledge of the first buyer does not bar her from availing of her rights under the law,
among them to register first her purchase as against the second buyer. But in converso
knowledge gained by the second buyer of the first sale defeats his rights even if he is first
to register the second sale, since such knowledge taints his prior registration with bad faith.
This is the price exacted by Article 1544 of the Civil Code of the second buyer being able
to displace the first buyer; that before the second buyer can obtain priority over the first, he
must show that he acted in good faith throughout (i.e. in ignorance of the first sale and of
the first buyer's rights) from the time of acquisition until the title is transferred to him by
registration or failing registration, by delivery of possession. The second buyer must show
continuing good faith and innocence or lack of knowledge of the first sale until his contract
ripens into full ownership through prior registration as provided by law."

KNOWLEDGE OF PRIOR SALE TAINTS SECOND PURCHASER'S PRIOR

REGISTRATION WITH BAD FAITH; CASE AT BAR. When petitioner Cruz succeeded
in registering the later sale in his favor, he knew and was informed of the prior sale in favor
of respondents-spouses. Respondents appellate court correctly held that such "knowledge
of a prior transfer of a registered property by a subsequent purchasers makes him a
purchaser in bad faith and his
knowledge of such transfer vitiates his title acquired by virtue of the latter instruments of
conveyance with creates no right as against the first purchaser."

Valdez v Ca The rule is clear that a prior right is accorded to the vendee who first recorded his right in
good faith over an immovable property
Nuguid v Ca SALE; RECONVEYANCE; NOT POSSIBLE WHERE PROPERTY WAS TRANSFERRED
TO AN INNOCENT PURCHASER FOR VALUE. An innocent purchaser for value is
protected such that when land has already passed into the hands of an innocent purchaser
for value, reconveyance of the same can no longer be made.

SALE OF IMMOVABLE PROPERTY TO DIFFERENT VENDEES; OWNERSHIP

BELONGS TO VENDEE WHO FIRST RECORDED THE SALE. It is an established fact
that the first sale to Juliana Salazar was not registered while the sale to the petitioners was
registered. The disputed property being immovable property, the ownership should belong
to the vendee who in good faith first recorded it in the Registry of Property, pursuant to the
same article.

Radiowealth Finance v Palileo
DOUBLE SALE OF IMMOVABLE PROPERTY; REGISTRATION IS THE OPERATIVE
ACT TO CONVEY OR AFFECT REGISTERED LANDS AS FAR AS THIRD PERSONS
ARE CONCERNED. Article 1544 of the Civil Code provides that in case of double sale
of an immovable property, ownership shall be transferred: (1) to the person acquiring it
who in good faith first recorded it in the Registry of Property; (2) in default thereof, to the
person who in good faith was first in possession; and (3) in default thereof, to the person
who presents the oldest title, provided there is good faith. There is no ambiguity regarding
the application of the law with respect to lands registered under the Torrens System.
Section 51 of Presidential Decree No. 1529 (amending Section 50 of Act No. 496 clearly
provides that the act of registration is the operative act to convey or affect registered lands
insofar as third persons are concerned. Thus, a person dealing with registered land is not
required to go behind the register to determine the condition of the property. He is only
charged with notice of the burdens on the property which are noted on the face of the
register or certificate of title. Following this principle, this Court has time and again held
that a purchaser in good faith of registered land (covered by a Torrens Title) acquires a
good title as against all the transferees thereof whose right is not recorded in the registry of
deeds at the time of the sale.

Under Act No. 3344, registration of instruments affecting unregistered lands is "without
prejudice to a third party with a better right". The aforequoted phrase has been held by this
Court to mean that the mere registration of a sale in one's favor does not give him any right
over the land if the vendor was not anymore the owner of the land having previously sold
the same to somebody else even if the earlier sale was unrecorded. The case of Carumba
vs. Court of Appeals is a case in point. It was held therein that Article 1644 of the Civil
Code has no application to land not registered under Act No. 496. Like in the case at bar,
Carumba dealt with a double sale of the same unregistered land. The first sale was made
by the original owners and was unrecorded while the second was an execution sale that
resulted from a complaint for a sum of money filed against the said original owners.
Applying Section 35, Rule 39 of the Revised Rules of Court, this Court held that Article
1544 of the Civil Code cannot be invoked to benefit the purchaser at the execution sale
though the latter was a buyer in good faith and even if this second sale was registered. It
 was explained that this is because the purchaser of unregistered land at a sheriff's
execution sale only steps into the shoes of the judgment debtor, and merely acquires the
latter's interest in the property sold as of the time the property was levied upon.

Tanedo v CA RULE ON PREFERENTIAL RIGHT OF VENDEES IN CASE OF DOUBLE SALE.

Petitioners contend that they were in possession of the property and that private
respondents never took possession thereof. As between two purchasers, the one who
registered the sale in his favor has a preferred right over the other who has not registered
his title, even if the latter is in actual possession of the immovable property.

Occena v Esponilla What is material is whether the second buyer first registers the second sale in good faith,
i.e. without knowledge of any defect in the title of the property sold. The defense of
indefeasibility of a Torrens title does not extend to a transferee who takes the certificate of
title in bad faith, without notice of a flaw.
Moles v IAC SALES; IMPLIED WARRANTY; DOES NOT APPLY TO SECONDHAND ARTICLES
SUBJECT TO INSPECTION AT THE TIME OF THE SALE. It is generally held that in
the sale of a designated and specific article sold as secondhand, there is no implied
warranty as to its quality or fitness for the purpose intended, at least where it is subject to
inspection at the time of the sale. On the other hand, there is also authority to the effect
that in a sale of a secondhand articles there may be, under some circumstances, an
implied warranty of fitness for the ordinary purpose of the article sold or for the particular
purpose of the buyer. In a line of decisions rendered by the United States Supreme Court,
it had theretofore been held that there is no implied warranty as to the condition,
adaptation, fitness, or suitability for the purpose for which made, or the quality, of an article
sold as and for a secondhand article. Thus, in finding for private respondent, the
respondent court cited the ruling in Sison vs. Ago, et al. to the effect that unless goods are
sold as to raise an implied warranty, as a general rule there is no implied warranty in the
sale of secondhand articles.

EXCEPTIONS. The general rule, however, is not without exceptions. Article 1562 of our
Civil Code, which was taken from the Uniform Sales Act, provides: "Art. 1562. In a sale of
goods, there is an implied warranty or condition as to the quality or fitness of the goods, as
follows: (1) Where the buyer, expressly or by implication, makes known to the seller the
particular purpose for which the goods are acquired, and it appears that the buyer relies on
the seller's skill or judgment (whether he be the grower or manufacturer or not), there is an
implied warranty that the goods shall be reasonably fit for such purpose;" Furthermore, and
of a more determinative role in this case, a perusal of past American decisions likewise
reveals a uniform pattern of rulings to the effect that an express warranty can be made by
and also be binding on the seller even in the sale of a secondhand article.

Engineering and Machinery Corp
v CA
REMEDY IN CASE OF VIOLATION OF THE WARRANTY AGAINST HIDDEN DEFECTS.
The obligations of a contractor for a piece of work are set forth in Articles 1714 and
1715 of the Civil Code. The provisions on warranty against hidden defects, referred to in
Art. 1714 are found in Articles 1561 and 1566. The remedy against violations of the
warranty against hidden defects is either to withdraw from the contract (redhibitory action)
or to demand a proportionate reduction of the price (accion quanti minoris), with damages
in either case.

Sonny Lo v CA VENDOR OR ASSIGNOR WARRANTS THE EXISTENCE AND LEGALITY OF THE

CREDIT AT TIME OF SALE OR ASSIGNMENT. Hence, it may well be that the
assignment of credit, which is in the nature of a sale of personal property, produced the
effects of a dation in payment which may extinguish the obligation. However, as in any
other contract of sale, the vendor or assignor is bound by certain warranties. More
specifically, the first paragraph of Article 1628 of the Civil Code provides: The vendor in
good faith shall be responsible for the existence and legality of the credit at the time of the
sale, unless it should have been sold as doubtful; but not for the solvency of the debtor,
unless it has been so expressly stipulated or unless the insolvency was prior to the sale
and of common knowledge. From the above provision, petitioner, as vendor or assignor, is
bound to warrant the existence and legality of the credit at the time of the sale or
assignment. When Jomero claimed that it was no longer indebted to petitioner since the
latter also had an unpaid obligation to it, it essentially meant that its obligation to petitioner
has been extinguished by compensation. In other words, respondent alleged the non-
existence of the credit and asserted its claim to petitioner's warranty under the assignment.
Therefore, it behooved on petitioner to make good its warranty and paid the obligation.
Catungal v Rodriguez

Ramos v CA EQUITABLE MORTGAGE; PRESUMPTION UNDER ART. 1602 OF THE CIVIL CODE;
EXISTENCE OF ANY ONE CIRCUMSTANCE SUFFICIENT. Settled is the rule that to
 create the presumption enunciated by Article 1602, the existence of one circumstance is
enough. The said article expressly provides therefor "in any of the following cases," hence
the existence of any of the circumstances enumerated therein, not a concurrence nor an
overwhelming number of such circumstances, suffices to give rise to the presumption that
the contract with the right of repurchase is an equitable mortgage.

SALE WITH A RIGHT TO REPURCHASE; NOT FAVORED. Sales with a right to

repurchase, as defined by the Civil Code, are not favored. We will not construe instruments
to be sales with a right to repurchase, with the stringent and onerous effects which follow,
unless the terms of the document and the surrounding circumstances require it. Whenever,
under the terms of the writing, any other construction can fairly and reasonably be made,
such construction will be adopted and the contract will be construed as a mere loan unless
the court can see that, if enforced according to its terms, it is not an unconscionable one.

REGARDED AS EQUITABLE MORTGAGE WHEN GIVEN AS SECURITY FOR A LOAN.

The contracts purport to be sales with pacto de retro; however, since the same were
actually executed in consideration of the aforesaid loans said contracts are indubitably
equitable mortgages. The rule is firmly settled that whenever it is clearly shown that a deed
of sale with pacto de retro, regular on its face, is given as security for a loan, it must be
regarded as an equitable mortgage.

De Leon v Salvador

Flores v So The pacto de retro sale between Gallano and Flores was executed when the Civil Code of
Spain was still in effect. It is provided in Art 1509 thereof that if the vendor does not comply
with the provisions of Art 1518 (i.e. to return the price, plus expenses) the vendee shall
acquire irrevocably the ownership of the thing sold.

Under the old Civil Code, the ownership was consolidated in the vendee a retro by
operation of law. Accordingly, upon the failure of Gallano, as the vendor a retro, to redeem
the property subject of the pacto de retro sale within the period agreen upon, the vendee a
retro, Flores, became the absolute owner of the subject property.

Alonzo v IAC CONTRACTS; PACTO DE RETRO SALE; EXCEPTION TO THE GENERAL RULE
ADOPTED IN CASE AT BAR. In arriving at our conclusion today, we are deviating from
the strict letter of the law, which the respondent court understandably applied pursuant to
existing jurisprudence. The said court acted properly as it had no competence to reverse
the doctrines laid down by this Court in the above-cited cases. In fact, and this should be
clearly stressed, we ourselves are not abandoning the De Conejero and Buttle doctrines.
What we are doing simply is adopting an exception to the general rule, in view of the
peculiar circumstances of this case. The co-heirs in this case were undeniably informed of
the sales although no notice in writing was given them. And there is no doubt either that
the 30-day period began and ended during the 14 years between the sales in question and
the filing of the complaint for redemption in 1977, without the co-heirs exercising their right
of redemption. These are the justifications for this exception.

Lao v CA EQUITABLE MORTGAGE, WHEN PRESUMED. The law enumerates when a contract
may be presumed to be an equitable mortgage: "(1) When the price of a sale with right to
repurchase is unusually inadequate; (2) When the vendor remains in possession as lessee
or otherwise; (3) When upon or after the expiration of the right to repurchase another
instrument extending the period of redemption or granting a new period is executed; (4)
When the purchaser retains for himself a part of the purchase price; (5) When the vendor
binds himself to pay the taxes on the thing sold; (6) In any other case where it may be fairly
inferred that the real intention of the parties is that the transaction shall secure the payment
of a debt or the performance of any other obligation. . ." The foregoing presumption applies
also to a "contract purporting to be an absolute sale."

CASE AT BAR. Applying the preceding principles to the factual milieu of this case, we
find the agreement between the private respondent and N. Domingo Realty & Housing
Corporation, as represented by petitioner, manifestly one of equitable mortgage. First,
possession of the property in the controversy remained with Petitioner Manuel Lao who
was the beneficial owner of the property, before, during and after the alleged sale. It is
settled that a "pacto de retro sale should be treated as a mortgage where the (property)
sold never left the possession of the vendors." Second, the option given to Manuel Lao to
purchase the property in controversy had been extended twice through documents
executed by Mr. Tan Bun Uy, President and Chairman of the Board of Better Homes
Realty & Housing Corporation. The wording of the first extension is a refreshing revelation
that indeed the parties really intended to be bound by a loan with mortgage, not by a pacto
de retro. It reads, "On June 10, 1988, this option is extended for another sixty days to
 expired (sic) on Aug. 11, 1988. The purchase price is increased to P137,000.00. Since Mr.
Lao borrow (sic) P20,000.00 from me." These extensions clearly represent the extension of
time to pay the loan given to Manuel Lao upon his failure to pay said loan on its maturity.
Mr. Lao was even granted an additional loan of P20,000.00 as evidenced by the above-
quoted document. Third, unquestionably, Manuel Lao, and his brother were in such "dire
need of money" that they mortgaged their townhouse units registered under the name of N.
Domingo Realty Corporation, the family corporation put up by their parents, to Private
Respondent Better Homes Realty & Housing Corporation. In retrospect, it is easy to blame
Petitioner Manuel Lao for not demanding a reformation of the contract to reflect the true
intent of the parties. But this seeming inaction is sufficiently explained by the Lao brothers'
desperate need for money, compelling them to sign the document purporting to be a sale
after they were told that the same was just for "formality." Based on the conduct of the
petitioner and private respondent and even the terminology of the second option to
purchase, we rule that the intent and agreement between them was undoubtedly one of
equitable mortgage and not of sale.

Lanuza v De Leon The stipulation in deed denominated by the parties as a "Deed of Sale With Right to
Repurchase" to the effect that if the vendor fails to pay the amount agreed upon within the
stipulated period, his right to repurchase the property shall be forfeited and the ownership
over the same would automatically pass to the vendee without need of court intervention,
is contrary to the nature of a true pacto de retro sale, under which a vendee acquires
ownership of the thing sold immediately upon execution of the sale, subject only to the
vendor's right of redemption. (See e.g., Guerrero vs. Yigo, 96 Phil., 37 [1954]; Floro vs.
Granada, 83 Phil., 486 (1949). Indeed, the stipulation which enables the mortgagee to
acquire ownership of the mortgaged property without need of foreclosure proceedings
establishes a pactum commissorium, and, being contrary to the provisions of Article 2080
of the Civil Code, is a nullity. Its insertion in the contract is an avowal of an intention to
mortgage rather than to sell. (Alcantara vs. Alinea, 8 Phil., 111 [1907]).

Between the unrecorded deed of Reyes and Navarro which we hold to be an equitable
mortgage, and the registered mortgage of De Leon, the latter must be preferred.
Preference of mortgage credits is determined by the priority of registration of the
mortgages, following the maxim "Prior tempore potior jure".

Capulong v Ca Where any of the circumstances defined in Article 1602 of the Civil Code is present, a
contract of sale with right to repurchase is presumed to be an equitable mortgage. As
stated by the Code Commission which drafted the new Civil Code, in practically all of the
so-called contracts of sale with right of repurchase, the real intention of the parties is that
the pretended purchase price is money loaned and in order to secure the payment of the
loan, a contract purporting to be a sale with pacts de retro is drawn up
Solid Homes v CA In a contract of sale with pacto de retro, the vendee has a right to the immediate
possession of the property sold, unless otherwise agreed upon. It is basic that in pacto de
retro sale, the title and ownership of the property sold are immediately vested in the
vendee a retro, subject only to the resolutory condition of repurchase by the vendor a retro
within the stipulated period.

Primary Structures Corp v Whenever a piece of rural land not exceeding one hectare is alienated, the law grants to
the adjoining owners a right of redemption except when the grantee or buyer does not own
Valencia any other rural land. In order that the right may arise, the land sought to be redeemed and
the adjacent property belonging to the person exercising the right of redemption must both
be rural lands. If one or both are urban lands, the right cannot be invoked. Here, the one or
both are urban lands, the right cannot be invoked. Here, the trial court found the lots
involved to be rural lands and respondents did not dispute it before the Court of Appeals.

.; EXCEPTION; WHEN BUYER DOES NOT OWN ANY OTHER RURAL LAND. Article
1621 of the Civil Code expresses that the right of redemption it grants to an adjoining
owner of the property conveyed may be defeated if it can be shown that the buyer or
grantee does not own any other rural land. The appellate court, sustaining the trial court,
has said that there has been no evidence proffered to show that respondents are not
themselves owners of rural lands for the exclusionary clause of the law to apply

MUST BE EXERCISED WITHIN 30 DAYS FROM NOTICE IN WRITING BY VENDOR;

AFFIDAVIT OF VENDOR TO THAT EFFECT BEFORE SALE RECORDED IN THE
REGISTRY OF PROPERTY, NOT SUFFICIENT. Article 1623 of the Civil Code provides
that the right of legal pre-emption or redemption shall not be exercised except within thirty
days from notice in writing by the prospective vendor, or by the vendor, as the case may
be. In stressing the mandatory character of the requirement, the law states that the deed of
sale shall not be recorded in the Registry of Property unless the same is accompanied by
an affidavit of the vendor that he has given notice thereof to all possible redemptioners.
The Court of Appeals has equated the statement in the deed of sale to the effect that the
 vendors have complied with the provisions of Article 1623 of the Civil Code, as being the
written affirmation under oath, as well as the evidence, that the required written notice to
petitioner under Article 1623 has been met. Respondents, like the appellate court, overlook
the fact that petitioner is not a party to the deed of sale between respondents and
Mendoza and has had no hand in the preparation and execution of the deed of sale. It
could not thus be considered a binding equivalent of the obligatory written notice
prescribed by the Code.
Etcuban v CA While it is true that written notice is required by the law (art 1623), it is equally true that the
same art 1623 does not prescribe any particular form of notice nor any distinctive method
for notifying the redemptioner. So long, therefore, as the latter is informed in writing of the
sale and the particulars thereof, the 30 days for redemption start running, and the
redemptioner has no real cause to complain.

A sworn statement or clause in a deed of sale to the effect that a written notice of sale
was given to possible redemptioners or co-owners might be used to determine whether an
offer to redeem was made on or out of time, or whether there was substantial compliance
with the requirement of said Art 1623.
Guzman, Bocalin & Co. v It was not necessary to secure the approval by the probate court of the Contract of Lease
because it did not involve an alienation of real property of the estate nor did the term of the
Bonnevie lease exceed one year so as to make it fall under Art 1878(8) of the Civil Code. Only if par
20 of the Contract of Lease was activated and the said property was intended to be sold
would it be required of the administratrix to secure the approval of the probate court
pursuant to rule 89 of the rules of court
Yak Seng Co. v CA The mere occupancy of the premises for a number of years, by itself is not sufficient. The
circumstance that the petitioner has paid its rentals religiously during the past twenty years
is also not sufficient to justify the extension it demands. Neither are the substantial
improvements it allegedly made on the leased premises nor the difficulty of finding another
place of business, on which it has not submitted any evidence at all.

As the rental was paid monthly and the term had not been expressly agreed upon, the
lease was understood under Article 1687 to be terminable from month to month. At the
time the petitioner was asked to vacate the leased premises, the lease contract had
already expired and therefore, could no longer be extended.

If the contract of lease had not yet expired, its extension would still be subject to the sound
discretion of the court and was by no means obligatory upon it as a merely ministerial duty.

"The power of the Courts to fix a longer term for lease is protestative or discretionary, 'may'
is the word to be exercised or not in accordance with the particular circumstances of the
case; a longer term to be granted where equities come into play demanding extension, to
be denied where none appears, always with due deference to the parties freedom to
contract."
Clutario v CA The acceptance by the lessor of the payment by the lessee of the rentals in arrears does
not constitute a waiver of the default in the payment of rentals as a valid cause of action
for ejectment

Proof of any one of the factors enumerated in Section 5 of B.P. Blg. 25 (1979) is sufficient
cause for judicial ejectment of a lessee. Having proved one of such grounds, i.e., arrears in
payment of rent for three (3) months at any one time, private respondents may legally eject
petitioners without having to prove the other grounds for ejectment. Nevertheless, to
bolster their action for ejectment, private respondents invoked in their complaint a second
ground for ejectment, namely, their need for the leased premises.

Yap v Cruz 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

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.

United Realty Corp v CA Since the lease agreement in question is for a definite period it follows that petitioner has a
right to judicially eject private respondent from the premises as an exception to the general
rule provided for in Section 4 of P.D. No. 20

under Section of 5(f) of B.P. Blg. 25 one of the grounds for ejectment is the expiration of
the period of a written lease contract. In this case, because of the failure of the private

Legar Management & Realty Corp
v CA
respondent to pay the increased rental demanded by petitioner, petitioner elected to
terminate the contract and asked the private respondent to vacate the premises. A lease
contract may be terminated at the end of any month, which shall be deemed terminated
upon the refusal to pay the increased monthly rental demanded by the petitioner, provided
the same is not exhorbitant. 8
the lease over the subject property was on a month-to-month basis, and that there was
proper notice of non-renewal of contract and demand for vacation of premises made by
petitioners on private respondent. Unquestionably, therefore, the verbal lease agreement
entered into by private respondent and petitioners' father and predecessor-in-interest has
been validly terminated, in which case there is sufficient cause for ejectment under Section
5(f) of Batas Pambansa Blg. 877
The determination of the period of a lease agreement can still be made in accordance with
said Article 1687, and that in a month to month lease situation, when petitioners (lessor)
gave private respondent (lessee) notice to vacate the premises in question, the contract of
lease is deemed to have expired as of the end of the month."