G.R. No. 109020, 3 March 1994


 On February 1, 1983, Petitioner Felisa Chan entered into a contract of lease with Grace Cu, private respondent, wherein the latter as the lessee and the former as the lessor. Petitioner rented two rooms for residential purposes. However, after several renewals of the contract it was agreed that the premises shall be used by the petitioner as a learning center. Despite of the absence of a written contract on the subsequent agreement, Grace has continuously occupied the premises as learning center. Sometime of November 1989, Felisa padlock the way to the other room which is in the roof top on the grounds that it poses danger to the students and that only one room was leased which is not the roof top. Felisa terminated the lease giving Grace until January 1, 1990 to vacate the premises.Felisa refuses to receive rents from the room in the roof top that causes Grace to consign the amounts as payment. In the ejectment case filed by  Felisa, the Municipal Trial Court rendered a decision declaring the room in the roof top as included in the Contract of Lease, fixes the term as to when Grace will vacate and declaring the consignation as valid. Both Parties appealed to the RTC which affirmed the decision of the MTC. Grace appealed to the Court of Appeals.

The CA then reversed and set aside the decisions of the MTC and the RTC and dismissed the complaint for consignation for lack of merit. However, the CA goes beyond the issues being raised in the petition.


Whether or not the CA erred in giving due course to Grace’s petition for review and in deciding upon issues which she never raised in her petition.


 Yes. After deliberating on the allegations, issues, and arguments raised by the parties in their pleadings, we find merit in the petition. It must be stressed that the validity of the consignation and the propriety of the counterclaim for ejectment were not raised before the Court of Appeals. As to the first, both the MTC and the RTC ruled that the consignation was valid.

Felisa filed no petition for the review of the RTC decision and had, therefore, accepted the said ruling. Grace did not, for obvious reasons, raise the issue on consignation in her petition for review. Since the validity of the consignation was not raised before it, the Court of Appeals seriously erred when it dismissed the complaint for consignation on the ground that it has no merit.

We also hold that the MTC had the authority to extend the period of the lease. The law grants the court the authority to fix the term of the lease depending on how the rentals are paid and on the length of the lessee’s occupancy of the leased premises. Article 1687 of the Civil Code provides that: “If the period for the lease has not been fixed, it is understood to be from year to year, if the rent agreed upon is annual; from month to month, if it is monthly; from week to week, if the rent is weekly; and from day to day, if the rent is to be paid daily. However, even though a monthly rent is paid, and no period for the lease has been set, the courts may fix a longer term for the lease after the lessee has occupied the premises for over one year. If the rent is weekly, the courts may likewise determine a longer period after the lessee has been in possession for over six months. In case of daily rent, the courts may also fix a longer period after the lessee has stayed in the place for over one month.” In the light of the special circumstances of this case, we find the extended term fixed by the MTC to be reasonable.

WHEREFORE, the instant petition is GRANTED and the challenged Decision Court of Appeals is hereby SET ASIDE, and the Decisions of the MTC and RTC are REINSTATED.

 * Case digest by Frilin Lomosad , LLB-1, Andres Bonifacio Law School, SY 2017-2018