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Republic of the Philippines Supreme Court Manila

Before this Court is a Petition for Certiorari[1] under Rule 65 of the Rules of Civil Procedure, seeking the reversal of the Court of Appeals (CA) Decision[2] dated August 22, 2007.

SECOND DIVISION

Culled from the records, the facts, as narrated by the CA, are as follows:

ESMERALDO C. ROMULLO, PEDRO MANGUNDAYAO, MAXIMO BELARMINO, GIMENEZ, CELSO LIBRANDO, MICHAEL DELA CRUZ, and ANES, ELVIRA BONZA, GARCIA, ROBERTO ZAIDA In its Complaint, ng respondent Bayanihan [Samahang Compound

Magkakapitbahay

TELESPORO

BETH

Homeowners Association, Inc., represented by its President, Paquito Quitalig] alleged that since it was qualified to avail of the benefits under the Community Mortgage Program of the government, it secured a

ROBERTO ARAWAG, Petitioners,

loan from the National Home Mortgage Finance Corporation Development Fund (NHMFCDF) for the

- versus -

purchase of a land known as Bayanihan Compound located in Santan Street, Parang, Marikina. Said land

SAMAHANG MAGKAKAPITBAHAY NG BAYANIHAN COMPOUND HOMEOWNERS

would

thereafter

be

distributed

to

members/beneficiaries of the respondent under its housing program. After the sale was consummated,

ASSOCIATION, INC., represented by its President, PAQUITO QUITALIG, Respondent. G.R. No. 180687

two Transfer Certificates of Title were issued in the name of the respondent and the land was distributed in portions to respondents members/beneficiaries. However, despite demand, petitioners [Esmeraldo C.

Present:

Romullo, Pedro Mangundayao, Maximo Anes, Elvira Bonza, Roberto Belarmino, Telesporo Garcia, Beth

VELASCO, JR., J.,* NACHURA,** Acting Chairperson, PERALTA, MENDOZA, and SERENO,***JJ.

Zaida Gimenez, Celso Librando, Michael dela Cruz, and Roberto Arawag] refused to pay their monthly dues and legal fees for as well as the deposits and

amortizations Resultantly, expelling

their

respective lot approved as its a

allocations. Resolution and

respondent the petitioners

members

disqualifying them as beneficiaries of the housing project and in another Resolution, also approved the substitution Promulgated: October 6, 2010 x-----------------------------------------------------------------------------------x DECISION NACHURA, J.: Despite notice of disqualification, petitioners continued to occupy the lots alloted to them and refused to execute a waiver of their lot allotments. The matter was referred to the barangay for of petitioners by qualified

members/beneficiaries in accordance with the Rules and Regulations Implementing the Community

Mortgage Program.

conciliation but still no settlement was reached. Thus, final and formal demands were made by respondent on each of the petitioners to vacate and surrender peacefully [the] possession and control of their lots. Still, petitioners refused and failed to comply.

the RTC on appeal. RTCs Decision reads:

The dispositive portion of the

WHEREFORE, foregoing premises considered, the appealed Decision of the Metropolitan Trial Court of Marikina City, Branch 75 in Civil Case No. 04-7591 is hereby REVERSED. The plaintiff-appellant is hereby

Ultimately, respondent sought the eviction of the petitioners based on the provisions of the

declared the lawful possessor of the premises in question and judgment is hereby rendered against the defendants-appellees, as follows: 1. Ordering the defendants-appellees and all persons claiming rights and interest under them to vacate the lots they are occupying located at Bayanihan

Implementing Corporate Circular of the NHMFCDF on Community Mortgage Program under RA [No.] 7279, specifically Sections 8.5.4 and 12.3.5 by filing an ejectment case against the petitioners praying that they vacate the premises and pay the sum of PhP3,000.00 as reasonable compensation until such time that they vacate the lots in question. In their Answer with Compulsory respondent

Compound, Santan Street, Parang, Marikina City and surrender peaceful possession thereof unto the

plaintiff-appellant; 2. Ordering the defendants-appellees to pay plaintiffappellant the amount of P1,000.00 each per month as reasonable compensation for the use of the lots they occupy starting February 19, 2004, until such time that possession appellant; 3. Ordering the defendants-appellees to pay the thereof is restored to the plaintiff-

Counterclaim, petitioners alleged that

neither informed them of the status of the housing project and its scheduled meetings, nor were they notified of respondents registration with the Home Insurance Guaranty Corporation (HIGC), wherein some of them were excluded in the master list of

members/beneficiaries. Petitioners further argued that the board resolutions expelling them as members and disqualifying them as beneficiaries of the respondents housing project were null and void as the terms of office of the members of the Board of Directors who passed the said resolutions had already expired at the time the meeting was held. Moreover, they

amount of P20,000.00, as and by way of attorneys fees plus costs of the suit. SO ORDERED.[3]

Aggrieved, petitioners went to the CA with a prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction, claiming that the Regional Trial Court (RTC) erred in not affirming the dismissal of the complaint by the Metropolitan Trial Court (MeTC) for lack of jurisdiction.

maintained that the case should have been suspended due to a prejudicial question brought about by the filing of another suit by some of them with the Housing and Land Use Regulatory Board (HLURB) entitled Esmeraldo C. Romul[l]o, et al. v. Paquito Quitalig, et al. As counterclaims, petitioners sought

awards of moral and exemplary damages as well as litigation expenses. In its Decision, the M[e]TC gave more weight to the arguments raised by the petitioners and the Complaint was dismissed without prejudice for alleged lack of jurisdiction in view of the pending case before the HLURB involving the same parties and issues. Petitioners counterclaims were likewise dismissed for lack of merit. However, this judgment was reversed by

On August 22, 2007, the CA ruled in favor of respondent. The CA held that the complaint filed by respondent against petitioners contained assertions that clearly established a cause of action for unlawful detainer which was well within the jurisdiction of the MeTC. Undaunted, petitioners and their counsel filed two separate Motions for Reconsideration which the CA both denied in its Resolution[4]dated November 22, 2007 for lack of merit.

course Hence, this petition. as issues: Petitioners assign the following

in

this

case

is

to

hold

the

ejectment

proceedings in abeyance until after the determination of the administrative case because of the intimate correlation between the two proceedings, stemming from the fact that petitioners' ejectment from the

I.

WHETHER OR NOT THE COURT OF APPEALS

property depends primarily on the resolution of the administrative case.[8]

COMMITTED A REVERSIBLE ERROR IN HOLDING THAT THE LOWER COURT HAD JURISDICTION TO TRY THE INSTANT CASE; AND

On the other hand, respondent asserts that the complaint filed before the MeTC contains ample

II. WHETHER OR NOT THE HON. COURT OF APPEALS ERRED IN NOT SUSTAINING PETITIONERS' ARGUMENT THAT THE RULING OF THE RTC MUST BE SET ASIDE DUE TO THE PENDENCY OF A CASE BEFORE THE HLURB INVOLVING THE SAME PARTIES AND

allegations for the latter to exercise jurisdiction over the case in accordance with the rules and prevailing jurisprudence. Respondent also claims that the issue involves questions of fact which were adequately passed upon by both the RTC and the CA when they made the finding that petitioners failed to perform their obligation under the Community Mortgage Program by refusing to pay their monthly dues,

ISSUES.[5]

At the outset, petitioners manifest that the Housing and Land Use Regulatory Board (HLURB) case is on appeal before the Office of the President (OP).[6] Petitioners asseverate that the CA arrogated unto itself, as the RTC did, the task of resolving the issue on the legality and propriety of petitioners' alleged disqualification as members/beneficiaries of

deposits, and amortizations for their allotted portions over the community property. Respondent insists that the factual findings of both the RTC and the CA must not only be accorded respect but also finality. Moreover, respondent stands by the ruling of the RTC and the CA that there exist no issues of litis pendentia and prejudicial question in this case since the HLURB case and the ejectment proceedings do not involve the same issues nor pray for the same reliefs.[9] Finally, respondent manifests that the HLURB case filed by petitioners was already dismissed, which the OP affirmed on appeal.[10] Thus, any matter related thereto has become moot and academic. Respondent submits that this case is a simple ejectment case which is well within the MeTC's jurisdiction.

respondent despite the fact that the determination of such issue is necessarily intertwined with the issue of whether or not a case of ejectment would prosper against petitioners. Petitioners opine that the CA is devoid of competence to decide on the following issues, namely: officers who i) whether or not the corporate passed the board resolution their their

expelling/disqualifying membership with

petitioners acted

from within

respondent

authority; and (ii) whether or not the disqualification was valid and legal. It is petitioners position that

The petition is bereft of merit.

these issues could have been best resolved by the HLURB and/or the Home Insurance Guaranty

A party desiring to appeal by certiorari from a judgment, final order, or resolution of the CA, as in this case, may file before this Court a verified petition for review on certiorari under Rule 45 of the Rules of Civil Procedure within 15 days from notice of the judgment, final order, or resolution appealed from. Petitioners, instead of a petition for review on

Corporation, considering the administrative agencies' expertise on the matter and considering the pendency of petitioners case against respondent before these bodies. Invoking the same ruling in Quiambao v. Hon. Osorio,[7] petitioners claim that the more prudent

certiorari under Rule 45, filed with this Court the instant petition for certiorari under Rule 65, an improper remedy. By availing of a wrong or

possession after the expiration or termination of his right to hold possession under any contract, express or implied. The possession of the defendant in unlawful detainer is originally legal but became illegal due to the expiration or termination of the right to possess. An unlawful detainer proceeding is summary

inappropriate mode of appeal, the petition merits outright dismissal.[11]

Even on the merits, the petition must fail.

in nature, jurisdiction of which lies with the proper municipal trial court or metropolitan trial court. The

Settled is the rule that jurisdiction in ejectment cases is determined by the allegations pleaded in the complaint. It cannot be made to depend on the defenses set up in the answer or pleadings filed by the defendant. Neither can it be made to depend on the exclusive characterization of the case by one of the parties. The test for determining the sufficiency of those allegations is whether, admitting the facts alleged, the court can render a valid judgment in accordance with the prayer of the plaintiff.[12]

action must be brought within one year from the date of last demand; and the issue in said case is the right to physical possession.[13]

Based on the foregoing, we have held that a complaint sufficiently alleges a cause of action for unlawful detainer if it recites the following:

(1)

initially, possession of property by the defendant

was by contract with or by tolerance of the plaintiff; An action for forcible entry or unlawful detainer is governed by Rule 70 of the Rules of Court, Section 1 of which provides: (2) eventually, such possession became illegal upon

notice by plaintiff to defendant of the termination of the latter's right of possession; (3) thereafter, the defendant remained in possession

SECTION 1. Who may institute proceedings, and when. Subject to the provisions of the next succeeding section, a person deprived of the possession of any land or building by force, intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expiration or

of the property and deprived the plaintiff of the enjoyment thereof; and (4) within one year from the last demand on to vacate the property, the plaintiff

defendant

instituted the complaint for ejectment.[14]

In this case, respondent's allegations in the complaint clearly make a case for unlawful detainer, essential to confer jurisdiction on the MeTC over the subject matter. Thus, we accord respect to the CA's findings, to wit:

termination of the right to hold possession, by virtue of any contract, express or implied, or the legal representatives or assigns of any such lessor, vendor, vendee, or other person, may, at any time within one (1) year after such unlawful deprivation or withholding of possession, bring an action in the proper Municipal Trial Court against the person or persons unlawfully withholding or depriving of possession, or any person or persons claiming under them, for the restitution of such possession, together with damages and costs.

A review of the Complaint readily reveals that land titles were issued in the name of the respondent after it purchased the land referred to as the Bayanihan Compound through the Community Mortgage

Program (CMP) of the National Home Mortgage Finance Corporation. The lots allocated to the

Unlawful detainer is an action to recover possession of real property from one who illegally withholds

petitioners formed part of the Bayanihan Compound which they received as members/beneficiaries of the

respondent. However, their refusal to pay the monthly amortizations despite demands resulted in their

respondent, which was their community association; (2) a call for regular annual meetings; (3) elections for board of directors; ([4]) an accounting of funds; and ([5]) the annulment of the board resolutions which expelled them as members and disqualified them to be beneficiaries of the housing program. On the

expulsion as members and loss of recognition as beneficiaries of the lots in question. Even when the

case was referred to the barangay, no settlement was reached. Petitioners likewise did not conform to

respondents demand to vacate the premises and return its possession. As such, respondent sought to recover possession of the said lots by filing a case for ejectment within a year after final demand.[15]

other hand, the ejectment case has in issue the better right of the petitioners or of the respondent to the physical possession of the lots occupied by petitioners. Clearly, therefore, no identity of the rights asserted and the reliefs prayed for exist in both cases.[17]

Moreover,

this

Court

rejects

the

contention

of In sum, we find no grave abuse of discretion, amounting to lack or excess of jurisdiction, on the part of the CA, which would warrant the reversal and/or modification of the assailed Decision.

petitioners that the RTC and the CA erred in not dismissing the complaint of respondent on the ground of litis pendentia, in view of the pendency of the HLURB case.

WHEREFORE, the instant petition is DISMISSED, and The requisites of litis pendentia are the following: (a) identity of parties, or at least such as representing the same interests in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) identity of the two cases such that judgment in one, regardless of which party is successful, would amount to res judicata in the other.[16] EDUARDO B. NACHURA Associate Justice The causes of action and, logically, the issues in the two cases, are clearly different, each requiring Chairperson Acting ANTONIO SO ORDERED. the Court of Appeals Decision dated August 22, 2007 is AFFIRMED. No costs.

divergent adjudication. In short, while there is identity of parties, there are different issues, causes of action, and reliefs prayed for between them. Contrary to petitioners posture, not all the elements of litis pendentia are present.

Appropos is the CA's ruling:

The suit filed with the HLURB involves:

(1) the

reinstatement of the petitioners as members of the

G.R. No.

187751

Present:

CARPIO MORALES, J., Chairperson, BRION, BERSAMIN, VILLARAMA, JR., and SERENO, JJ.

Promulgated:

November 22, 2010

x------------------------------------------------ x

DECISION

CARPIO MORALES, J.

The residents of a parcel of land owned by HiMarketing Corporation situated in Magnolia Extension Street, Barangay Sta. Monica, Novaliches, Quezon City, organized themselves into a community association, the Sta. Monica Riverside Homeowners Association EDNA EUGENIO, MARY JEAN GREGORIO, PAJARILLO, VILLAMOR, Petitioners, RENATO ROGELIO (respondent), registered with the Housing and Land Use Regulatory Board (HLURB) for the purpose of acquiring Program land (CMP) under of the Community Housing Mortgage Finance

the

Social

Corporation (SHFC).

CMP, as a mode of land acquisition was introduced by - versus Republic Act No. 7279, AN ACT TO PROVIDE FOR A COMPREHENSIVE AND CONTINUING URBAN

DEVELOPMENT AND HOUSING PROGRAM, ESTABLISH THE MECHANISM AND FOR ITS IMPLEMENTATION STA. MONICA RIVERSIDE HOMEOWNERS ASSOCIATION, Respondent. AND OTHER PURPOSES. Section 33 of the Act specifies that beneficiaries of the Program shall be responsible for their organization into associations to

manage their subdivisions or places of residence, to secure housing loans under existing Community

Since only members of an association are allowed to avail of the benefits under the CMP, respondent invited petitioners anew to join but petitioners declined, prompting respondent to issue a formal demand for petitioners to leave their respective

Mortgage Program and such other projects beneficial to them.

The mortgage financing program of the National Home Mortgage Finance Corporation (NHMFC) assists legally organized associations of underprivileged and homeless citizens to purchase and develop a tract of land under the concept of community ownership.[1]

premises.

Petitioners ignored respondents demand to leave, hence, respondent filed a complaint for

ejectment/eviction against them before the HLURB.

Under the CMP, the landowner executes a contract to sell the property In in favor the of the community association

Petitioners denied refusing to join the association. They questioned respondents membership as

association.

turn,

community

composed of non-residents which is contrary to the CMP guidelines. They also questioned the leadership, and alleged illegal activities of respondents president Erlinda Manalo, as well as the propriety of HLURBs cognizance of the complaint and prayed for its dismissal for lack of jurisdiction.

executes an agreement with the SHFC for the collection and remittance of shares in monthly

amortization from its member-borrowers, and is under obligation to keep tab of paid and unpaid

amortization of its member-borrowers. In the event a member-borrower defaults, the community association has the responsibility to find a qualified substitute who shall assume the obligations of the memberborrower in default.

By Decision of July 14, 2005, Housing and Land Use Arbiter Joselito F. Melchor ordered

petitioners exclusion from the benefits of the CMP and consequently to surrender them and vacate the

When respondent commenced negotiations with Hi-Marketing Corporation for purchase of the land, it invited Edna Eugenio,[2] Mary Jean Gregorio, Renato Pajarillo and Rogelio Villamor (petitioners) who are occupying a portion of the land to become its members (respondents) but that they refused, having formed another organization which was not

premises. On the issue of jurisdiction, Arbiter Melchor ruled:

x x x The law vested HLURB the power to regulate and supervise the activities and operations of homeowners association. Beyond cavil, HLURB exercises principal jurisdiction on issues affecting the homeowners

accredited, however, by the HLURB for lack of a Memorandum Corporation. of Agreement with Hi-Marketing

association. Consequently, complainants [respondent] present causes of action against respondents are incidental or collateral to the enforcement of interests of the members of the complainant which matters

Hi-Marketing Corporation agreed to sell the land, and respondent complied with all the necessary requirements under the CMP implementing rules and regulations. Ordinance The Quezon City Council in fact passed No. SP-1303 approving respondents

clearly fall under the primary jurisdiction of HLURB. In other words, HLURBs greater power of regulation and control over homeowners associations carries with it incidental powers such as the power of exclusion from benefits of CMP non members like respondents here.[3]

subdivision plan.

x x x x (emphasis and underscoring supplied)

In the main, petitioners assail the jurisdiction of the HLURB, inviting attention to Rule II of the Disputes On appeal, the Board of Commissioners triable by HIGC[6]/Nature of Proceedings:

affirmed the Arbiters Decision.

Petitioners elevated Section 1. Types of Disputes. The HIGC or any person, officer, body, board or committee duly

the case to the Office of the President which, by Decision of July 2, 2007, affirmed the Decision of the Board of Commissioners in this wise:

designated or created by it shall have jurisdiction to hear and decide cases involving the following:

The following factual findings of the ENCRFO which were adopted and affirmed by the HLURB should, likewise, be given respect in the absence of any clear showing that it overlooked, misunderstood and (9) Controversies between arising and out of intra-corporate of the xxxx

misapplied some facts or circumstances of weight and substance which would alter the result, namely:

relations

among

members

association of which they are members; and between such association and the state/general public or other

1.

The HLURB exercises principal jurisdiction on

entity insofar as it concerns its right to exist as a corporate entity. (underscoring supplied)

issues affecting homeowners association; 2. Such exercise of jurisdiction carries with it the

incidental power of excluding non-members of the association from the benefits of the CMP; 3. project In order to facilitate the CMP services on the site, appellants may be evicted and

Petitioners argue that the HLURB does not have jurisdiction over the case as it does not fall under the category of an intra-corporate controversy, their being non-members having been established and acknowledged by respondent. Likewise, they argue that the case cannot be deemed a controversy between the association and the general public since the main issue does not pertain to respondents juridical personality.

dispossessed of their present occupancy, and the SMRHOA through its Board of Directors may evict appellants therein; 4. Questions of policy and management are left to

the honest decision of the associations officers and board of directors and the courts, under the business judgment rule, is without authority to substitute its judgment of the said Board. (Citing PSE vs. Court of Appeals, 281 SCRA 232); and, 5. Appellants have not established any real right or

Petitioners add that Batas Pambansa Blg. 129,[7] as amended, vests exclusive jurisdiction over cases of forcible entry and unlawful detainer on first level courts, such as the Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts.

interest over the property in question, thus for lack of legal personality, appellants have no right to question SMRHOAs prerogative.[4]

The petition is bereft of merit. On petitioners petition for review, the Court of Appeals, by Decision of October 24, 2008[5] denied the petition for lack of merit as it did deny their Motion for Reconsideration by Resolution of April 28, 2009. Hence, the present petition. Upon conferment of quasi-judicial functions to an administrative agency, all controversies relating to the subject matter which pertain to its specialization are deemed included within its jurisdiction.[8] Since the

HLURB is vested by law with jurisdiction to regulate and supervise homeowner associations, respondent

correctly lodged their complaint with the HLURB. Republic Act No. 8763[9] provides:

d.

Harassment of the child (child abuse) of one of

the actual occupant who was deleted from the beneficiaries. (please refer to the medical certificate marked as Annex C)

Section 26. Powers over Homeowners Associations. The powers authorities and responsibilities vested in the Corporation (formerly Home Insurance Guaranty Corporation) with respect to homeowners association under Republic Act No. 580, as amended by executive Order No. 535[10] is hereby transferred to the Housing and Land use Regulatory Board (HLURB). (underscoring supplied)

e.

Majority of the names of officers and members

as submitted to HLURB are not the actual occupants (please refer to the master list submitted to the City Government Planning Office marked as Annex D)[11] (underscoring supplied)

If

petitioners

refuse

to

recognize

respondents

legitimacy, respondent will not be able to fulfill its obligation to collect and account for the monthly amortizations with SHFC. Individual titling would not

Petitioners in fact, in their reply to the complaint, acknowledged the HLURBs jurisdiction when they challenged respondents right to exist as a corporate entity, viz:

thus be completed and the laudable objectives of the CMP would not be fully attained.

Undoubtedly, the case is within the competence of HLURB to decide. While the SHFC is the main

(5)

That complainants statements from

government agency tasked to administer the CMP, its authority pertains only to the administrative and financing aspects of the States social housing

number 6-12 in reference to that of the respondents are already terminated and non members and non program beneficiaries of the CMP would not hold water. At this point, respondent in this instance, would like to emphasize that they are not opposing the implementation of the Community Mortgage Program. They are only questioning the legitimacy and the illegal activities of Erlinda Manalo, highlighted

program schemes, i.e., evaluation of the community association and originator based on the submitted documents, site inspection, releasing of funds for land acquisition, site development and housing assistance, collection of monthly amortizations from community associations and foreclosure of mortgages.

hereunder, to wit: While a complaint for ejectment, which raises a. Complainant have been collecting money since the issue of who has a better right of possession, falls within the exclusive and original jurisdiction of first level courts, the right of possession in the present case is, however, necessarily determination of rights and intertwined with a privileges under a

year 2000 from actual occupants and occupants not covered by the Community Mortgage Program. This is illegal for the simple reason that she has no juridical personality in the absence of a SEC registration. Please take note of their half hazard (sic) registration with HLURB dated only September 25, 2003 (please refer to the receipts of collection marked as Annex B) b. c. No election to legitimize her presidency. Non-consultation of the majority actual

distinctive social housing concept such as CMP, which falls within the expertise of the HLURB.

The foregoing discussions leave it unnecessary to delve on petitioners assigned error respecting their extrajudicial and summary eviction from the lots they occupy. It is settled that eviction is a necessary

occupants on which she used the names in her intent of registering with HLURB the so called Sta. Monica Riverside Homeowners Association.

consequence

of

petitioners

exclusion

from

the

vs. THE COURT OF APPEALS and MEDEL COMPOUND TENANTS ASSOCIATION, INC., respondents.

benefits of the CMP.

Villareal Law Offices for petitioners.

Cesar O. Untalan for private respondent.

WHEREFORE, the petition is hereby DENIED. NOCON, J.: SO ORDERED. It is ironic that the association, principally organized so that its members may own the respective lots they were leasing, turned out in so far as the three CONCHITA CARPIO MORALES defendants are concerned, as having worked against their welfare. 1 Associate Justice was the observation by the Metropolitan Trial Court 2 in its joints decision dated October 30, 1990 in Civil Case Nos. 12961-63, affirmed by the Regional Trial Court 3 and reaffirmed by the Court of Appeals. 4

The defendants referred to above are the very petitioners in the present case. They were ordered by the MTC to vacate the premises they were leasing at Medel Compound, a thickly populated tenanted 5parcel residential land in Mandaluyong with an area of 31,052.5 square meters.

The lower courts were consistent in their finding of Republic of the Philippines SUPREME COURT Manila facts. In 1986, the tenants of Medel Compound, desirous of owning the land they were leasing, which some of them have been occupying since their birth, organized themselves to form the Medel Compound SECOND DIVISION Tenants Association, Inc. The Association was later registered with the Securities and Exchange

Commission with some 300 or so original members, including herein petitioners. G.R. No. 107293 March 2, 1994 With MARIANO TORIO, MARIA BAUTISTA, FLORENTINA, BAUTISTA AND RENATO BAUTISTA, petitioners, the full support and assistance of the

Mandaluyong Municipal Government and the National Home Mortgage Finance Corp (NHMFC), the land was

finally acquired and its five titles were transferred in favor of the Association in February 1989. The land was subdivided among the Association members pursuant to the guidelines set by the NHMFC in relation to the Community Mortgage Program of the government.

without giving the tenants the right of first refusal. In this case, however, the Medels sold the property to the tenants' association and not to anybody else. 9

On

appeal,

petitioners

questioned

the

MTC's

jurisdiction over the case, arguing that since the controversy is between the Association and its

In October 27, 1989, spouses Mariano Torio and Maria Bautista, Florentina Bautista, and Renato Bautista, were sent a letter by the Association, through its lawyer, demanding that they vacate Lot Nos. 135, 145, and 147, which were respectively held by them as tenantlessees. When petitioners refused to do so,

members, the case should have been adjudicated before the Securities and Exchange Commission (SEC) pursuant to P.D. 902-A. 10 The RTC, however, upheld the MTC stating that jurisdiction over the subject matter is determined by the allegations in the complaint and not the facts averred in the answer or opposition of the adverse party. The case filed being for unlawful detainer, the MTC was sustained in assuming jurisdiction.

respondent filed a complaint for "Unlawful Detainer with Damages." Respondent alleged that petitioners never became active members and refused to

participate in the acquisition of the lot, that although they were one of the incorporators of the Association, they did not pay a single centavo of the membership dues, other assessments, the critical downpayment for the respective lots they were leasing and rentals despite demands and grace period given them. The RTC also agreed with the MTC that respondent can rightly demand for petitioners to vacate the premises on the strength of Article 1687 11 of the Civil Code, considering that the period of the lease was on a month to month basis. The RTC, however, rejected MTC's application of Sec. 5(c) of B.P. Blg. 877, On the other hand, petitioners raised as defense that they never relinquished their membership. However, they could not immediately pay their obligation to the Association because they allegedly had to put up the money to pay their dues. When they were ready to pay, the Association allegedly ignored them. They further claimed that they never received any formal notices of deadline for payment of membership dues as most of the time they were staying in Wawa, Baras, Rizal. Anent the first issue, said court referred to the case of Ruling in favor of the respondent Association, the MTC rejected petitioner's proposition that they were protected by Sec. 5, 2nd paragraph, of B.P. Blg. 877 5, noting that the complaint was based on termination of the lease 6 and need of the premises 7. Likewise, the trial court dismissed petitioners' reliance on P.D. 1517, Sec. 6 8 on the rationale the said provision prohibits the Medels from selling their property to third person Rivera vs. Florendo 14 where it was held that the determination of the period of the lease can still be made in accordance with Article 1687, because what is suspended by Section 6 of B.P. Blg. 25 is Article 1673 and not Article 1687. 15 As to the application of P.D. 2016, the Court of Appeals cited with approval the ratiocination of the MTC, as follows: In their appeal to the appellate court, petitioners raised as issues RTC's reliance on Article 1687 of the Civil Code and its failure to apply P.D. 2016 13 which prohibits the eviction of occupant families from land identified as areas for priority development. on the need of the premises by the immediate member of the family of the lessor, as this particular provision is intended to cover only natural persons. 12

This (provision) is an injunction against the owner, in this case the Medels, to sell the lot to others without giving the tenants the right of first refusal. But the Medels sold it to the tenants' association and to nobody else. The provision aforequoted has not been violated. 16

It should be obvious that not every conflict between a corporation and its stockholders involves corporate matters that only the SEC can resolve in the exercise of its adjudicatory or quasi judicial powers. If, for example, a person leases an apartment owned by a corporation of which he is a stockholder, there should be no question that a complaint for his ejectment for

The court a quo further observed that:

non-payment of rentals would still come under the jurisdiction of the regular courts and not of the SEC.

Finally, petitioners were not bona fide occupants of the lots in question because, admittedly, they were most of the time residing at Baras, Rizal. And what is worse, petitioners were renting out their houses erected on subject lots to other people. 17

20

Indeed a contrary interpretation would distort the meaning and intent of P.D. 902-A, the law

reorganizing the Securities and Exchange Commission. The better policy in determining which body has

In a vain hope to get a reversal of the referred decisions, petitioners now filed this present petition for review on certiorari on the same arguments they have raised in the lower courts, as follows:

jurisdiction over a case would be to consider not only the relationship of the parties but also the nature of the question that is the subject of their controversy.

Petitioners tried to substantiate their second argument The respondent court seriously erred in not dismissing the complaints for ejectment for lack of jurisdiction. with the proposition that the contract between the Association and its members is not a lease contract, but a contract of sale on installment and presented as Assuming such jurisdiction, the respondent court seriously erred and gravely abused its discretion amounting to lack or excess of jurisdiction in proof a purposed purported contract signed by the Association President and one of its members. 21 Petitioners specifically pointed out the provisions in the said contract which states:

upholding the ejectment of petitioners based on the expiration of the period of the lease contract.

SECTION 11. The respondent court seriously erred and gravely abused its discretion amounting to lack or excess of jurisdiction in disregarding the prohibition against the ejectment of petitioners by the lessor's successors-ininterest to whom the property was sold. 18

SPECIAL CONDITIONS

It is hereby agreed by the parties that all rental payments shall be considered as installment payment of the purchase price of the unit awarded to the LESSEE. Upon the expiration of the lease term, and payment by the LESSEE of all rentals due and payable

We find the petition unmeritorious.

including penalties and surcharges, full title and ownership shall vest unto the LESSEE. The LESSOR or

On the question of jurisdiction, we cite the decision in Viray vs. Court of Appeals, 19 penned by Mr. Justice Isagani Cruz, which states that:

its Assignee shall execute the necessary Deed of Absolute Sale, and all rental payments shall be credited against the purchase price. 22

The contract, however, also provides as follows:

SECTION 2.

TERM

which does not even name the lessor and is bare of other essential facts. 24

xxx

xxx

xxx In short, there is nothing in the record to show that

2.2.

Subject to the LESSOR's right of termination

petitioners entered into a Lease/Purchase Agreement with the Association and that petitioners never paid their rent to the Association, despite demands and grace period given them. Hence, even if, for the sake of argument, we are to apply the provisions of the purported contract to petitioners, as they want us to do, it is but right to evict them having defaulted in their payments.

under Section 4 and other applicable provisions hereunder and the LESSEE's exercise of his/her right of option to purchase under Section 11 hereof, it being understood that the payment of the aggregate rental for the full period of this lease is the very essence and special consideration of this Agreement. (emphasis supplied)

xxx

xxx

xxx

Petitioner's third argument is a mere reiteration of their argument in the trial court to apply Section 5,

SECTION 10.

EVENTS OF DEFAULT.

2nd paragraph, of B.P. Blg. 877 which we have previously disposed of.

a.

failure of the LESSEE to pay the equivalent of As aptly observed by the MTC:

at least three (3) consecutive monthly rentals.

xxx

xxx

xxx

. . . But then, where were they (petitioners) when their help was most needed. Had they put in their share

10.2. each

Effects of Default. Upon default by the LESSEE, of the following remedies shall accrue

into

the

concerted toward goal?

communal the

effort

of of

the the be

membership association's rewarded?

attainment their

immediately to the LESSOR.

Should

indifference

Understandably,

defendants

having

b.

The lease shall be terminated and the LESSEE

transferred their residence to Baras, Rizal long before the acquisition process had reached its peak, they could be the least concerned. To them, the project would not really mean land for the poor. Having rented out their houses, it is more of the

shall voluntarily surrender possession of the PROPERTY to the LESSOR/ITS ASSIGNEE and if the LESSEE fails to do so, the LESSEE may be summarily ejected and the LESSOR/ITS ASSIGNEE may enter the premises where the property is located. . . 23 (emphasis supplied)

entrepreneur's instinct that moved them to hold on to the premises. 25

We

are

not

persuaded

by

petitioner's

second WHEREFORE, the petition is hereby DISMISSED for want of merit. The decision of the court a quo is AFFIRMED in toto.

argument for the following reasons: 1) the alleged contract was not presented in the trial court thus its genuineness, authenticity and due execution was not established; 2) if petitioners had entered into such a Lease/Purchase Agreement with the respondent, they should have attached to the complaint said document which they allegedly signed, but this they did not do; and 3) the document presented to sustain their allegation is a pro-forma lease/purchase agreement

SO ORDERED.

Narvasa, C.J., Padilla, Regalado and Puno, JJ., concur.