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146364 June 3, 2004
COLITO T. PAJUYO, petitioner, vs. COURT OF APPEALS and EDDIE GUEVARRA, respondents. DECISION CARPIO, J.: The Case Before us is a petition for of the 21 June 2000 Decision2 and 14 December 2000 Resolution of the Court of Appeals in CA-G.R. SP No. 43129. The Court of Appeals set aside the 11 November 1996 decision3 of the Regional Trial Court of Quezon City, Branch 81,4 affirming the 15 December 1995 decision5 of the Metropolitan Trial Court of Quezon City, Branch 31.6 The Antecedents In June 1979, petitioner Colito T. Pajuyo ("Pajuyo") paid P400 to a certain Pedro Perez for the rights over a 250-square meter lot in Barrio Payatas, Quezon City. Pajuyo then constructed a house made of light materials on the lot. Pajuyo and his family lived in the house from 1979 to 7 December 1985. On 8 December 1985, Pajuyo and private respondent Eddie Guevarra ("Guevarra") executed a Kasunduan or agreement. Pajuyo, as owner of the house, allowed Guevarra to live in the house for free provided Guevarra would maintain the cleanliness and orderliness of the house. Guevarra promised that he would voluntarily vacate the premises on Pajuyo’s demand. In September 1994, Pajuyo informed Guevarra of his need of the house and demanded that Guevarra vacate the house. Guevarra refused. Pajuyo filed an ejectment case against Guevarra with the Metropolitan Trial Court of Quezon City, Branch 31 ("MTC"). In his Answer, Guevarra claimed that Pajuyo had no valid title or right of possession over the lot where the house stands because the lot is within the 150 hectares set aside by Proclamation No. 137 for socialized housing. Guevarra pointed out that from December 1985 to September 1994, Pajuyo did not show up or communicate with him. Guevarra insisted that neither he nor Pajuyo has valid title to the lot. On 15 December 1995, the MTC rendered its decision in favor of Pajuyo. The dispositive portion of the MTC decision reads: WHEREFORE, premises considered, judgment is hereby rendered for the plaintiff and against defendant, ordering the latter to: A) vacate the house and lot occupied by the defendant or any other person or persons claiming any right under him; B) pay unto plaintiff the sum of THREE HUNDRED PESOS (P300.00) monthly as reasonable compensation for the use of the premises starting from the last demand; C) pay plaintiff the sum of P3,000.00 as and by way of attorney’s fees; and D) pay the cost of suit. SO ORDERED.7 Aggrieved, Guevarra appealed to the Regional Trial Court of Quezon City, Branch 81 ("RTC"). On 11 November 1996, the RTC affirmed the MTC decision. The dispositive portion of the RTC decision reads: WHEREFORE, premises considered, the Court finds no reversible error in the decision appealed from, being in accord with the law and evidence presented, and the same is hereby affirmed en toto. SO ORDERED.8 Guevarra received the RTC decision on 29 November 1996. Guevarra had only until 14 December 1996 to file his appeal with the Court of Appeals. Instead of filing his appeal with the Court of Appeals, Guevarra filed with the Supreme Court a "Motion for Extension of Time to File Appeal by Certiorari Based on Rule 42" ("motion for extension"). Guevarra theorized that his appeal raised pure questions of law. The Receiving Clerk of the Supreme Court received the motion for extension on 13 December 1996 or one day before the right to EJECTMENT AND LEASE Mariel Angela Piedad Soriano review1
appeal expired. On 3 January 1997, Guevarra filed his petition for review with the Supreme Court. On 8 January 1997, the First Division of the Supreme Court issued a Resolution9 referring the motion for extension to the Court of Appeals which has concurrent jurisdiction over the case. The case presented no special and important matter for the Supreme Court to take cognizance of at the first instance. On 28 January 1997, the Thirteenth Division of the Court of Appeals issued a Resolution10 granting the motion for extension conditioned on the timeliness of the filing of the motion. On 27 February 1997, the Court of Appeals ordered Pajuyo to comment on Guevara’s petition for review. On 11 April 1997, Pajuyo filed his Comment. On 21 June 2000, the Court of Appeals issued its decision reversing the RTC decision. The dispositive portion of the decision reads: WHEREFORE, premises considered, the assailed Decision of the court a quo in Civil Case No. Q-96-26943 is REVERSED and SET ASIDE; and it is hereby declared that the ejectment case filed against defendant-appellant is without factual and legal basis. SO ORDERED.11 Pajuyo filed a motion for reconsideration of the decision. Pajuyo pointed out that the Court of Appeals should have dismissed outright Guevarra’s petition for review because it was filed out of time. Moreover, it was Guevarra’s counsel and not Guevarra who signed the certification against forum-shopping. On 14 December 2000, the Court of Appeals issued a resolution denying Pajuyo’s motion for reconsideration. The dispositive portion of the resolution reads: WHEREFORE, for lack of merit, the motion for reconsideration is hereby DENIED. No costs. SO ORDERED.12 The Ruling of the MTC The MTC ruled that the subject of the agreement between Pajuyo and Guevarra is the house and not the lot. Pajuyo is the owner of the house, and he allowed Guevarra to use the house only by tolerance. Thus, Guevarra’s refusal to vacate the house on Pajuyo’s demand made Guevarra’s continued possession of the house illegal. The Ruling of the RTC The RTC upheld the Kasunduan, which established the landlord and tenant relationship between Pajuyo and Guevarra. The terms of the Kasunduan bound Guevarra to return possession of the house on demand. The RTC rejected Guevarra’s claim of a better right under Proclamation No. 137, the Revised National Government Center Housing Project Code of Policies and other pertinent laws. In an ejectment suit, the RTC has no power to decide Guevarra’s rights under these laws. The RTC declared that in an ejectment case, the only issue for resolution is material or physical possession, not ownership. The Ruling of the Court of Appeals The Court of Appeals declared that Pajuyo and Guevarra are squatters. Pajuyo and Guevarra illegally occupied the contested lot which the government owned. Perez, the person from whom Pajuyo acquired his rights, was also a squatter. Perez had no right or title over the lot because it is public land. The assignment of rights between Perez and Pajuyo, and the Kasunduan between Pajuyo and Guevarra, did not have any legal effect. Pajuyo and Guevarra are in pari delicto or in equal fault. The court will leave them where they are. The Court of Appeals reversed the MTC and RTC rulings, which held that the Kasunduan between Pajuyo and Guevarra created a legal tie akin to that of a landlord and tenant relationship. The Court of Appeals ruled that the Kasunduan is not a lease contract but a commodatum because the agreement is not for a price certain. Since Pajuyo admitted that he resurfaced only in 1994 to claim the property, the appellate court held that Guevarra has a better right over the property under Proclamation No. 137. President Corazon C. Aquino ("President Aquino") issued Proclamation No. 137 on 7 September 1987. At that time, Guevarra was in physical possession of the property. Under Article VI of the Code of Policies Beneficiary Selection and Disposition of Homelots and Structures in the National Housing Project ("the Code"), the actual occupant or caretaker of the lot shall have first priority as beneficiary of the project. The Court of Appeals concluded that Guevarra is first in the hierarchy of priority. EJECTMENT AND LEASE Mariel Angela Piedad Soriano
In denying Pajuyo’s motion for reconsideration, the appellate court debunked Pajuyo’s claim that Guevarra filed his motion for extension beyond the period to appeal. The Court of Appeals pointed out that Guevarra’s motion for extension filed before the Supreme Court was stamped "13 December 1996 at 4:09 PM" by the Supreme Court’s Receiving Clerk. The Court of Appeals concluded that the motion for extension bore a date, contrary to Pajuyo’s claim that the motion for extension was undated. Guevarra filed the motion for extension on time on 13 December 1996 since he filed the motion one day before the expiration of the reglementary period on 14 December 1996. Thus, the motion for extension properly complied with the condition imposed by the Court of Appeals in its 28 January 1997 Resolution. The Court of Appeals explained that the thirty-day extension to file the petition for review was deemed granted because of such compliance. The Court of Appeals rejected Pajuyo’s argument that the appellate court should have dismissed the petition for review because it was Guevarra’s counsel and not Guevarra who signed the certification against forum-shopping. The Court of Appeals pointed out that Pajuyo did not raise this issue in his Comment. The Court of Appeals held that Pajuyo could not now seek the dismissal of the case after he had extensively argued on the merits of the case. This technicality, the appellate court opined, was clearly an afterthought. The Issues Pajuyo raises the following issues for resolution: WHETHER THE COURT OF APPEALS ERRED OR ABUSED ITS AUTHORITY AND DISCRETION TANTAMOUNT TO LACK OF JURISDICTION: 1) in GRANTING, instead of denying, Private Respondent’s Motion for an Extension of thirty days to file petition for review at the time when there was no more period to extend as the decision of the Regional Trial Court had already become final and executory. 2) in giving due course, instead of dismissing, private respondent’s Petition for Review even though the certification against forum-shopping was signed only by counsel instead of by petitioner himself. 3) in ruling that the Kasunduan voluntarily entered into by the parties was in fact a commodatum, instead of a Contract of Lease as found by the Metropolitan Trial Court and in holding that "the ejectment case filed against defendantappellant is without legal and factual basis". 4) in reversing and setting aside the Decision of the Regional Trial Court in Civil Case No. Q-96-26943 and in holding that the parties are in pari delicto being both squatters, therefore, illegal occupants of the contested parcel of land. 5) in deciding the unlawful detainer case based on the so-called Code of Policies of the National Government Center Housing Project instead of deciding the same under the Kasunduan voluntarily executed by the parties, the terms and conditions of which are the laws between themselves.13 The Ruling of the Court The procedural issues Pajuyo is raising are baseless. However, we find merit in the substantive issues Pajuyo is submitting for resolution. Procedural Issues Pajuyo insists that the Court of Appeals should have dismissed outright Guevarra’s petition for review because the RTC decision had already become final and executory when the appellate court acted on Guevarra’s motion for extension to file the petition. Pajuyo points out that Guevarra had only one day before the expiry of his period to appeal the RTC decision. Instead of filing the petition for review with the Court of Appeals, Guevarra filed with this Court an undated motion for extension of 30 days to file a petition for review. This Court merely referred the motion to the Court of Appeals. Pajuyo believes that the filing of the motion for extension with this Court did not toll the running of the period to perfect the appeal. Hence, when the Court of Appeals received the motion, the period to appeal had already expired. We are not persuaded. Decisions of the regional trial courts in the exercise of their appellate jurisdiction are appealable to the Court of Appeals by petition for review in cases involving questions of fact or mixed questions of fact and law. 14 Decisions of the regional trial courts involving pure questions of law are appealable directly to this Court by petition for review.15 These modes of appeal are now embodied in Section 2, Rule 41 of the 1997 Rules of Civil Procedure. Guevarra believed that his appeal of the RTC decision involved only questions of law. Guevarra thus filed his motion for extension to file petition for review before this Court on 14 December 1996. On 3 January 1997, Guevarra then filed his petition for review with this Court. A perusal of Guevarra’s petition for review gives the impression that the issues he raised were pure questions of law. There is a question of law when the doubt or difference is on what the law is on a certain state of facts.16 There is a question of fact when the doubt EJECTMENT AND LEASE Mariel Angela Piedad Soriano
or difference is on the truth or falsity of the facts alleged.17 In his petition for review before this Court, Guevarra no longer disputed the facts. Guevarra’s petition for review raised these questions: (1) Do ejectment cases pertain only to possession of a structure, and not the lot on which the structure stands? (2) Does a suit by a squatter against a fellow squatter constitute a valid case for ejectment? (3) Should a Presidential Proclamation governing the lot on which a squatter’s structure stands be considered in an ejectment suit filed by the owner of the structure? These questions call for the evaluation of the rights of the parties under the law on ejectment and the Presidential Proclamation. At first glance, the questions Guevarra raised appeared purely legal. However, some factual questions still have to be resolved because they have a bearing on the legal questions raised in the petition for review. These factual matters refer to the metes and bounds of the disputed property and the application of Guevarra as beneficiary of Proclamation No. 137. The Court of Appeals has the power to grant an extension of time to file a petition for review. In Lacsamana v. Second Special Cases Division of the Intermediate Appellate Court,18 we declared that the Court of Appeals could grant extension of time in appeals by petition for review. In Liboro v. Court of Appeals,19 we clarified that the prohibition against granting an extension of time applies only in a case where ordinary appeal is perfected by a mere notice of appeal. The prohibition does not apply in a petition for review where the pleading needs verification. A petition for review, unlike an ordinary appeal, requires preparation and research to present a persuasive position.20 The drafting of the petition for review entails more time and effort than filing a notice of appeal. 21 Hence, the Court of Appeals may allow an extension of time to file a petition for review. In the more recent case of Commissioner of Internal Revenue v. Court of Appeals,22 we held that Liboro’s clarification of Lacsamana is consistent with the Revised Internal Rules of the Court of Appeals and Supreme Court Circular No. 1-91. They all allow an extension of time for filing petitions for review with the Court of Appeals. The extension, however, should be limited to only fifteen days save in exceptionally meritorious cases where the Court of Appeals may grant a longer period. A judgment becomes "final and executory" by operation of law. Finality of judgment becomes a fact on the lapse of the reglementary period to appeal if no appeal is perfected. 23 The RTC decision could not have gained finality because the Court of Appeals granted the 30-day extension to Guevarra. The Court of Appeals did not commit grave abuse of discretion when it approved Guevarra’s motion for extension. The Court of Appeals gave due course to the motion for extension because it complied with the condition set by the appellate court in its resolution dated 28 January 1997. The resolution stated that the Court of Appeals would only give due course to the motion for extension if filed on time. The motion for extension met this condition. The material dates to consider in determining the timeliness of the filing of the motion for extension are (1) the date of receipt of the judgment or final order or resolution subject of the petition, and (2) the date of filing of the motion for extension. 24 It is the date of the filing of the motion or pleading, and not the date of execution, that determines the timeliness of the filing of that motion or pleading. Thus, even if the motion for extension bears no date, the date of filing stamped on it is the reckoning point for determining the timeliness of its filing. Guevarra had until 14 December 1996 to file an appeal from the RTC decision. Guevarra filed his motion for extension before this Court on 13 December 1996, the date stamped by this Court’s Receiving Clerk on the motion for extension. Clearly, Guevarra filed the motion for extension exactly one day before the lapse of the reglementary period to appeal. Assuming that the Court of Appeals should have dismissed Guevarra’s appeal on technical grounds, Pajuyo did not ask the appellate court to deny the motion for extension and dismiss the petition for review at the earliest opportunity. Instead, Pajuyo vigorously discussed the merits of the case. It was only when the Court of Appeals ruled in Guevarra’s favor that Pajuyo raised the procedural issues against Guevarra’s petition for review. A party who, after voluntarily submitting a dispute for resolution, receives an adverse decision on the merits, is estopped from attacking the jurisdiction of the court.25 Estoppel sets in not because the judgment of the court is a valid and conclusive adjudication, but because the practice of attacking the court’s jurisdiction after voluntarily submitting to it is against public policy.26 In his Comment before the Court of Appeals, Pajuyo also failed to discuss Guevarra’s failure to sign the certification against forum shopping. Instead, Pajuyo harped on Guevarra’s counsel signing the verification, claiming that the counsel’s verification is insufficient since it is based only on "mere information." A party’s failure to sign the certification against forum shopping is different from the party’s failure to sign personally the verification. The certificate of non-forum shopping must be signed by the party, and not by counsel.27 The certification of counsel renders the petition defective.28 On the other hand, the requirement on verification of a pleading is a formal and not a jurisdictional requisite. 29 It is intended simply to EJECTMENT AND LEASE Mariel Angela Piedad Soriano
secure an assurance that what are alleged in the pleading are true and correct and not the product of the imagination or a matter of speculation, and that the pleading is filed in good faith. 30 The party need not sign the verification. A party’s representative, lawyer or any person who personally knows the truth of the facts alleged in the pleading may sign the verification.31 We agree with the Court of Appeals that the issue on the certificate against forum shopping was merely an afterthought. Pajuyo did not call the Court of Appeals’ attention to this defect at the early stage of the proceedings. Pajuyo raised this procedural issue too late in the proceedings. Absence of Title over the Disputed Property will not Divest the Courts of Jurisdiction to Resolve the Issue of Possession Settled is the rule that the defendant’s claim of ownership of the disputed property will not divest the inferior court of its jurisdiction over the ejectment case.32 Even if the pleadings raise the issue of ownership, the court may pass on such issue to determine only the question of possession, especially if the ownership is inseparably linked with the possession.33 The adjudication on the issue of ownership is only provisional and will not bar an action between the same parties involving title to the land. 34 This doctrine is a necessary consequence of the nature of the two summary actions of ejectment, forcible entry and unlawful detainer, where the only issue for adjudication is the physical or material possession over the real property.35 In this case, what Guevarra raised before the courts was that he and Pajuyo are not the owners of the contested property and that they are mere squatters. Will the defense that the parties to the ejectment case are not the owners of the disputed lot allow the courts to renounce their jurisdiction over the case? The Court of Appeals believed so and held that it would just leave the parties where they are since they are in pari delicto. We do not agree with the Court of Appeals. Ownership or the right to possess arising from ownership is not at issue in an action for recovery of possession. The parties cannot present evidence to prove ownership or right to legal possession except to prove the nature of the possession when necessary to resolve the issue of physical possession.36 The same is true when the defendant asserts the absence of title over the property. The absence of title over the contested lot is not a ground for the courts to withhold relief from the parties in an ejectment case. The only question that the courts must resolve in ejectment proceedings is - who is entitled to the physical possession of the premises, that is, to the possession de facto and not to the possession de jure.37 It does not even matter if a party’s title to the property is questionable,38 or when both parties intruded into public land and their applications to own the land have yet to be approved by the proper government agency.39 Regardless of the actual condition of the title to the property, the party in peaceable quiet possession shall not be thrown out by a strong hand, violence or terror.40 Neither is the unlawful withholding of property allowed. Courts will always uphold respect for prior possession. Thus, a party who can prove prior possession can recover such possession even against the owner himself. 41 Whatever may be the character of his possession, if he has in his favor prior possession in time, he has the security that entitles him to remain on the property until a person with a better right lawfully ejects him.42 To repeat, the only issue that the court has to settle in an ejectment suit is the right to physical possession. In Pitargue v. Sorilla,43 the government owned the land in dispute. The government did not authorize either the plaintiff or the defendant in the case of forcible entry case to occupy the land. The plaintiff had prior possession and had already introduced improvements on the public land. The plaintiff had a pending application for the land with the Bureau of Lands when the defendant ousted him from possession. The plaintiff filed the action of forcible entry against the defendant. The government was not a party in the case of forcible entry. The defendant questioned the jurisdiction of the courts to settle the issue of possession because while the application of the plaintiff was still pending, title remained with the government, and the Bureau of Public Lands had jurisdiction over the case. We disagreed with the defendant. We ruled that courts have jurisdiction to entertain ejectment suits even before the resolution of the application. The plaintiff, by priority of his application and of his entry, acquired prior physical possession over the public land applied for as against other private claimants. That prior physical possession enjoys legal protection against other private claimants because only a court can take away such physical possession in an ejectment case. While the Court did not brand the plaintiff and the defendant in Pitargue44 as squatters, strictly speaking, their entry into the disputed land was illegal. Both the plaintiff and defendant entered the public land without the owner’s permission. Title to the land remained with the government because it had not awarded to anyone ownership of the contested public land. Both the plaintiff and the defendant were in effect squatting on government property. Yet, we upheld the courts’ jurisdiction to resolve the issue of possession even if the plaintiff and the defendant in the ejectment case did not have any title over the contested land. Courts must not abdicate their jurisdiction to resolve the issue of physical possession because of the public need to preserve the basic EJECTMENT AND LEASE Mariel Angela Piedad Soriano
policy behind the summary actions of forcible entry and unlawful detainer. The underlying philosophy behind ejectment suits is to prevent breach of the peace and criminal disorder and to compel the party out of possession to respect and resort to the law alone to obtain what he claims is his.45 The party deprived of possession must not take the law into his own hands. 46 Ejectment proceedings are summary in nature so the authorities can settle speedily actions to recover possession because of the overriding need to quell social disturbances.47 We further explained in Pitargue the greater interest that is at stake in actions for recovery of possession. We made the following pronouncements in Pitargue: The question that is before this Court is: Are courts without jurisdiction to take cognizance of possessory actions involving these public lands before final award is made by the Lands Department, and before title is given any of the conflicting claimants? It is one of utmost importance, as there are public lands everywhere and there are thousands of settlers, especially in newly opened regions. It also involves a matter of policy, as it requires the determination of the respective authorities and functions of two coordinate branches of the Government in connection with public land conflicts. Our problem is made simple by the fact that under the Civil Code, either in the old, which was in force in this country before the American occupation, or in the new, we have a possessory action, the aim and purpose of which is the recovery of the physical possession of real property, irrespective of the question as to who has the title thereto. Under the Spanish Civil Code we had the accion interdictal, a summary proceeding which could be brought within one year from dispossession (Roman Catholic Bishop of Cebu vs. Mangaron, 6 Phil. 286, 291); and as early as October 1, 1901, upon the enactment of the Code of Civil Procedure (Act No. 190 of the Philippine Commission) we implanted the common law action of forcible entry (section 80 of Act No. 190), the object of which has been stated by this Court to be "to prevent breaches of the peace and criminal disorder which would ensue from the withdrawal of the remedy, and the reasonable hope such withdrawal would create that some advantage must accrue to those persons who, believing themselves entitled to the possession of property, resort to force to gain possession rather than to some appropriate action in the court to assert their claims." (Supia and Batioco vs. Quintero and Ayala, 59 Phil. 312, 314.) So before the enactment of the first Public Land Act (Act No. 926) the action of forcible entry was already available in the courts of the country. So the question to be resolved is, Did the Legislature intend, when it vested the power and authority to alienate and dispose of the public lands in the Lands Department, to exclude the courts from entertaining the possessory action of forcible entry between rival claimants or occupants of any land before award thereof to any of the parties? Did Congress intend that the lands applied for, or all public lands for that matter, be removed from the jurisdiction of the judicial Branch of the Government, so that any troubles arising therefrom, or any breaches of the peace or disorders caused by rival claimants, could be inquired into only by the Lands Department to the exclusion of the courts? The answer to this question seems to us evident. The Lands Department does not have the means to police public lands; neither does it have the means to prevent disorders arising therefrom, or contain breaches of the peace among settlers; or to pass promptly upon conflicts of possession. Then its power is clearly limited to disposition and alienation, and while it may decide conflicts of possession in order to make proper award, the settlement of conflicts of possession which is recognized in the court herein has another ultimate purpose, i.e., the protection of actual possessors and occupants with a view to the prevention of breaches of the peace. The power to dispose and alienate could not have been intended to include the power to prevent or settle disorders or breaches of the peace among rival settlers or claimants prior to the final award. As to this, therefore, the corresponding branches of the Government must continue to exercise power and jurisdiction within the limits of their respective functions. The vesting of the Lands Department with authority to administer, dispose, and alienate public lands, therefore, must not be understood as depriving the other branches of the Government of the exercise of the respective functions or powers thereon, such as the authority to stop disorders and quell breaches of the peace by the police, the authority on the part of the courts to take jurisdiction over possessory actions arising therefrom not involving, directly or indirectly, alienation and disposition. Our attention has been called to a principle enunciated in American courts to the effect that courts have no jurisdiction to determine the rights of claimants to public lands, and that until the disposition of the land has passed from the control of the Federal Government, the courts will not interfere with the administration of matters concerning the same. (50 C. J. 1093-1094.) We have no quarrel with this principle. The determination of the respective rights of rival claimants to public lands is different from the determination of who has the actual physical possession or occupation with a view to protecting the same and preventing disorder and breaches of the peace. A judgment of the court ordering restitution of the possession of a parcel of land to the actual occupant, who has been deprived thereof by another through the use of force or in any other illegal manner, can never be "prejudicial interference" with the disposition or alienation of public lands. On the other hand, if courts were deprived of jurisdiction of cases involving conflicts of possession, that threat of judicial action against breaches of the peace committed on public lands would be eliminated, and a state of lawlessness would probably be produced between applicants, occupants or squatters, where force or might, not right or justice, would rule. It must be borne in mind that the action that would be used to solve conflicts of possession between rivals or conflicting applicants or claimants would be no other than that of forcible entry. This action, both in England and the United States and in our jurisdiction, is a summary and expeditious remedy whereby one in peaceful and quiet possession may recover the possession of which he has been deprived by a stronger hand, by violence or terror; its ultimate object being to prevent breach EJECTMENT AND LEASE Mariel Angela Piedad Soriano
of the peace and criminal disorder. (Supia and Batioco vs. Quintero and Ayala, 59 Phil. 312, 314.) The basis of the remedy is mere possession as a fact, of physical possession, not a legal possession. (Mediran vs. Villanueva, 37 Phil. 752.) The title or right to possession is never in issue in an action of forcible entry; as a matter of fact, evidence thereof is expressly banned, except to prove the nature of the possession. (Second 4, Rule 72, Rules of Court.) With this nature of the action in mind, by no stretch of the imagination can conclusion be arrived at that the use of the remedy in the courts of justice would constitute an interference with the alienation, disposition, and control of public lands. To limit ourselves to the case at bar can it be pretended at all that its result would in any way interfere with the manner of the alienation or disposition of the land contested? On the contrary, it would facilitate adjudication, for the question of priority of possession having been decided in a final manner by the courts, said question need no longer waste the time of the land officers making the adjudication or award. (Emphasis ours) The Principle of Pari Delicto is not Applicable to Ejectment Cases The Court of Appeals erroneously applied the principle of pari delicto to this case. Articles 1411 and 1412 of the Civil Code48 embody the principle of pari delicto. We explained the principle of pari delicto in these words: The rule of pari delicto is expressed in the maxims ‘ex dolo malo non eritur actio’ and ‘in pari delicto potior est conditio defedentis.’ The law will not aid either party to an illegal agreement. It leaves the parties where it finds them.49 The application of the pari delicto principle is not absolute, as there are exceptions to its application. One of these exceptions is where the application of the pari delicto rule would violate well-established public policy.50 In Drilon v. Gaurana,51 we reiterated the basic policy behind the summary actions of forcible entry and unlawful detainer. We held that: It must be stated that the purpose of an action of forcible entry and detainer is that, regardless of the actual condition of the title to the property, the party in peaceable quiet possession shall not be turned out by strong hand, violence or terror. In affording this remedy of restitution the object of the statute is to prevent breaches of the peace and criminal disorder which would ensue from the withdrawal of the remedy, and the reasonable hope such withdrawal would create that some advantage must accrue to those persons who, believing themselves entitled to the possession of property, resort to force to gain possession rather than to some appropriate action in the courts to assert their claims. This is the philosophy at the foundation of all these actions of forcible entry and detainer which are designed to compel the party out of possession to respect and resort to the law alone to obtain what he claims is his.52 Clearly, the application of the principle of pari delicto to a case of ejectment between squatters is fraught with danger. To shut out relief to squatters on the ground of pari delicto would openly invite mayhem and lawlessness. A squatter would oust another squatter from possession of the lot that the latter had illegally occupied, emboldened by the knowledge that the courts would leave them where they are. Nothing would then stand in the way of the ousted squatter from re-claiming his prior possession at all cost. Petty warfare over possession of properties is precisely what ejectment cases or actions for recovery of possession seek to prevent. 53 Even the owner who has title over the disputed property cannot take the law into his own hands to regain possession of his property. The owner must go to court. Courts must resolve the issue of possession even if the parties to the ejectment suit are squatters. The determination of priority and superiority of possession is a serious and urgent matter that cannot be left to the squatters to decide. To do so would make squatters receive better treatment under the law. The law restrains property owners from taking the law into their own hands. However, the principle of pari delicto as applied by the Court of Appeals would give squatters free rein to dispossess fellow squatters or violently retake possession of properties usurped from them. Courts should not leave squatters to their own devices in cases involving recovery of possession. Possession is the only Issue for Resolution in an Ejectment Case The case for review before the Court of Appeals was a simple case of ejectment. The Court of Appeals refused to rule on the issue of physical possession. Nevertheless, the appellate court held that the pivotal issue in this case is who between Pajuyo and Guevarra has the "priority right as beneficiary of the contested land under Proclamation No. 137." 54 According to the Court of Appeals, Guevarra enjoys preferential right under Proclamation No. 137 because Article VI of the Code declares that the actual occupant or caretaker is the one qualified to apply for socialized housing. The ruling of the Court of Appeals has no factual and legal basis. First. Guevarra did not present evidence to show that the contested lot is part of a relocation site under Proclamation No. 137. Proclamation No. 137 laid down the metes and bounds of the land that it declared open for disposition to bona fide residents. The records do not show that the contested lot is within the land specified by Proclamation No. 137. Guevarra had the burden to prove EJECTMENT AND LEASE Mariel Angela Piedad Soriano
that the disputed lot is within the coverage of Proclamation No. 137. He failed to do so. Second. The Court of Appeals should not have given credence to Guevarra’s unsubstantiated claim that he is the beneficiary of Proclamation No. 137. Guevarra merely alleged that in the survey the project administrator conducted, he and not Pajuyo appeared as the actual occupant of the lot. There is no proof that Guevarra actually availed of the benefits of Proclamation No. 137. Pajuyo allowed Guevarra to occupy the disputed property in 1985. President Aquino signed Proclamation No. 137 into law on 11 March 1986. Pajuyo made his earliest demand for Guevarra to vacate the property in September 1994. During the time that Guevarra temporarily held the property up to the time that Proclamation No. 137 allegedly segregated the disputed lot, Guevarra never applied as beneficiary of Proclamation No. 137. Even when Guevarra already knew that Pajuyo was reclaiming possession of the property, Guevarra did not take any step to comply with the requirements of Proclamation No. 137. Third. Even assuming that the disputed lot is within the coverage of Proclamation No. 137 and Guevarra has a pending application over the lot, courts should still assume jurisdiction and resolve the issue of possession. However, the jurisdiction of the courts would be limited to the issue of physical possession only. In Pitargue,55 we ruled that courts have jurisdiction over possessory actions involving public land to determine the issue of physical possession. The determination of the respective rights of rival claimants to public land is, however, distinct from the determination of who has the actual physical possession or who has a better right of physical possession.56 The administrative disposition and alienation of public lands should be threshed out in the proper government agency.57 The Court of Appeals’ determination of Pajuyo and Guevarra’s rights under Proclamation No. 137 was premature. Pajuyo and Guevarra were at most merely potential beneficiaries of the law. Courts should not preempt the decision of the administrative agency mandated by law to determine the qualifications of applicants for the acquisition of public lands. Instead, courts should expeditiously resolve the issue of physical possession in ejectment cases to prevent disorder and breaches of peace.58 Pajuyo is Entitled to Physical Possession of the Disputed Property Guevarra does not dispute Pajuyo’s prior possession of the lot and ownership of the house built on it. Guevarra expressly admitted the existence and due execution of the Kasunduan. The Kasunduan reads: Ako, si COL[I]TO PAJUYO, may-ari ng bahay at lote sa Bo. Payatas, Quezon City, ay nagbibigay pahintulot kay G. Eddie Guevarra, na pansamantalang manirahan sa nasabing bahay at lote ng "walang bayad." Kaugnay nito, kailangang panatilihin nila ang kalinisan at kaayusan ng bahay at lote. Sa sandaling kailangan na namin ang bahay at lote, sila’y kusang aalis ng walang reklamo. Based on the Kasunduan, Pajuyo permitted Guevarra to reside in the house and lot free of rent, but Guevarra was under obligation to maintain the premises in good condition. Guevarra promised to vacate the premises on Pajuyo’s demand but Guevarra broke his promise and refused to heed Pajuyo’s demand to vacate. These facts make out a case for unlawful detainer. Unlawful detainer involves the withholding by a person from another of the possession of real property to which the latter is entitled after the expiration or termination of the former’s right to hold possession under a contract, express or implied.59 Where the plaintiff allows the defendant to use his property by tolerance without any contract, the defendant is necessarily bound by an implied promise that he will vacate on demand, failing which, an action for unlawful detainer will lie. 60 The defendant’s refusal to comply with the demand makes his continued possession of the property unlawful. 61 The status of the defendant in such a case is similar to that of a lessee or tenant whose term of lease has expired but whose occupancy continues by tolerance of the owner.62 This principle should apply with greater force in cases where a contract embodies the permission or tolerance to use the property. The Kasunduan expressly articulated Pajuyo’s forbearance. Pajuyo did not require Guevarra to pay any rent but only to maintain the house and lot in good condition. Guevarra expressly vowed in the Kasunduan that he would vacate the property on demand. Guevarra’s refusal to comply with Pajuyo’s demand to vacate made Guevarra’s continued possession of the property unlawful. We do not subscribe to the Court of Appeals’ theory that the Kasunduan is one of commodatum. In a contract of commodatum, one of the parties delivers to another something not consumable so that the latter may use the same for a certain time and return it.63 An essential feature of commodatum is that it is gratuitous. Another feature of commodatum is that the use of the thing belonging to another is for a certain period.64 Thus, the bailor cannot demand the return of the thing loaned until after expiration of the period stipulated, or after accomplishment of the use for which the commodatum is constituted.65 If the bailor should have urgent
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need of the thing, he may demand its return for temporary use. 66 If the use of the thing is merely tolerated by the bailor, he can demand the return of the thing at will, in which case the contractual relation is called a precarium. 67 Under the Civil Code, precarium is a kind of commodatum.68 The Kasunduan reveals that the accommodation accorded by Pajuyo to Guevarra was not essentially gratuitous. While the Kasunduan did not require Guevarra to pay rent, it obligated him to maintain the property in good condition. The imposition of this obligation makes the Kasunduan a contract different from a commodatum. The effects of the Kasunduan are also different from that of a commodatum. Case law on ejectment has treated relationship based on tolerance as one that is akin to a landlord-tenant relationship where the withdrawal of permission would result in the termination of the lease. 69 The tenant’s withholding of the property would then be unlawful. This is settled jurisprudence. Even assuming that the relationship between Pajuyo and Guevarra is one of commodatum, Guevarra as bailee would still have the duty to turn over possession of the property to Pajuyo, the bailor. The obligation to deliver or to return the thing received attaches to contracts for safekeeping, or contracts of commission, administration and commodatum.70 These contracts certainly involve the obligation to deliver or return the thing received.71 Guevarra turned his back on the Kasunduan on the sole ground that like him, Pajuyo is also a squatter. Squatters, Guevarra pointed out, cannot enter into a contract involving the land they illegally occupy. Guevarra insists that the contract is void. Guevarra should know that there must be honor even between squatters. Guevarra freely entered into the Kasunduan. Guevarra cannot now impugn the Kasunduan after he had benefited from it. The Kasunduan binds Guevarra. The Kasunduan is not void for purposes of determining who between Pajuyo and Guevarra has a right to physical possession of the contested property. The Kasunduan is the undeniable evidence of Guevarra’s recognition of Pajuyo’s better right of physical possession. Guevarra is clearly a possessor in bad faith. The absence of a contract would not yield a different result, as there would still be an implied promise to vacate. Guevarra contends that there is "a pernicious evil that is sought to be avoided, and that is allowing an absentee squatter who (sic) makes (sic) a profit out of his illegal act."72 Guevarra bases his argument on the preferential right given to the actual occupant or caretaker under Proclamation No. 137 on socialized housing. We are not convinced. Pajuyo did not profit from his arrangement with Guevarra because Guevarra stayed in the property without paying any rent. There is also no proof that Pajuyo is a professional squatter who rents out usurped properties to other squatters. Moreover, it is for the proper government agency to decide who between Pajuyo and Guevarra qualifies for socialized housing. The only issue that we are addressing is physical possession. Prior possession is not always a condition sine qua non in ejectment.73 This is one of the distinctions between forcible entry and unlawful detainer.74 In forcible entry, the plaintiff is deprived of physical possession of his land or building by means of force, intimidation, threat, strategy or stealth. Thus, he must allege and prove prior possession. 75 But in unlawful detainer, the defendant unlawfully withholds possession after the expiration or termination of his right to possess under any contract, express or implied. In such a case, prior physical possession is not required.76 Pajuyo’s withdrawal of his permission to Guevarra terminated the Kasunduan. Guevarra’s transient right to possess the property ended as well. Moreover, it was Pajuyo who was in actual possession of the property because Guevarra had to seek Pajuyo’s permission to temporarily hold the property and Guevarra had to follow the conditions set by Pajuyo in the Kasunduan. Control over the property still rested with Pajuyo and this is evidence of actual possession. Pajuyo’s absence did not affect his actual possession of the disputed property. Possession in the eyes of the law does not mean that a man has to have his feet on every square meter of the ground before he is deemed in possession. 77 One may acquire possession not only by physical occupation, but also by the fact that a thing is subject to the action of one’s will.78 Actual or physical occupation is not always necessary.79 Ruling on Possession Does not Bind Title to the Land in Dispute We are aware of our pronouncement in cases where we declared that "squatters and intruders who clandestinely enter into titled government property cannot, by such act, acquire any legal right to said property." 80 We made this declaration because the person who had title or who had the right to legal possession over the disputed property was a party in the ejectment suit and that party instituted the case against squatters or usurpers. In this case, the owner of the land, which is the government, is not a party to the ejectment case. This case is between squatters. Had the EJECTMENT AND LEASE Mariel Angela Piedad Soriano
government participated in this case, the courts could have evicted the contending squatters, Pajuyo and Guevarra. Since the party that has title or a better right over the property is not impleaded in this case, we cannot evict on our own the parties. Such a ruling would discourage squatters from seeking the aid of the courts in settling the issue of physical possession. Stripping both the plaintiff and the defendant of possession just because they are squatters would have the same dangerous implications as the application of the principle of pari delicto. Squatters would then rather settle the issue of physical possession among themselves than seek relief from the courts if the plaintiff and defendant in the ejectment case would both stand to lose possession of the disputed property. This would subvert the policy underlying actions for recovery of possession. Since Pajuyo has in his favor priority in time in holding the property, he is entitled to remain on the property until a person who has title or a better right lawfully ejects him. Guevarra is certainly not that person. The ruling in this case, however, does not preclude Pajuyo and Guevarra from introducing evidence and presenting arguments before the proper administrative agency to establish any right to which they may be entitled under the law.81 In no way should our ruling in this case be interpreted to condone squatting. The ruling on the issue of physical possession does not affect title to the property nor constitute a binding and conclusive adjudication on the merits on the issue of ownership.82 The owner can still go to court to recover lawfully the property from the person who holds the property without legal title. Our ruling here does not diminish the power of government agencies, including local governments, to condemn, abate, remove or demolish illegal or unauthorized structures in accordance with existing laws. Attorney’s Fees and Rentals The MTC and RTC failed to justify the award of P3,000 attorney’s fees to Pajuyo. Attorney’s fees as part of damages are awarded only in the instances enumerated in Article 2208 of the Civil Code. 83 Thus, the award of attorney’s fees is the exception rather than the rule. 84 Attorney’s fees are not awarded every time a party prevails in a suit because of the policy that no premium should be placed on the right to litigate.85 We therefore delete the attorney’s fees awarded to Pajuyo. We sustain the P300 monthly rentals the MTC and RTC assessed against Guevarra. Guevarra did not dispute this factual finding of the two courts. We find the amount reasonable compensation to Pajuyo. The P300 monthly rental is counted from the last demand to vacate, which was on 16 February 1995. WHEREFORE, we GRANT the petition. The Decision dated 21 June 2000 and Resolution dated 14 December 2000 of the Court of Appeals in CA-G.R. SP No. 43129 are SET ASIDE. The Decision dated 11 November 1996 of the Regional Trial Court of Quezon City, Branch 81 in Civil Case No. Q-96-26943, affirming the Decision dated 15 December 1995 of the Metropolitan Trial Court of Quezon City, Branch 31 in Civil Case No. 12432, is REINSTATED with MODIFICATION. The award of attorney’s fees is deleted. No costs. SO ORDERED. Davide, Jr., Panganiban, Ynares-Santiago, and Azcuna, JJ., concur.
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Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G..R. No. 132424 May 2, 2006
SPOUSES BONIFACIO R. VALDEZ, JR. and VENIDA M. VALDEZ, Petitioners, vs. HON. COURT OF APPEALS, SPOUSES GABRIEL FABELLA and FRANCISCA FABELLA, Respondents. DECISION CHICO-NAZARIO, J.: This petition for review under Rule 45 of the Rules of Court, filed by petitioners spouses Bonifacio R. Valdez, Jr. and Venida M. Valdez, seeks to nullify and set aside the 22 April 1997 decision1 and 30 January 1998 resolution of the Court of Appeals in CA-G.R. SP No. 43492, which reversed the judgment, dated 8 January 1997, of the Regional Trial Court of Antipolo, Rizal, Branch 74, in Civil Case No. 3607, which, in turn, affirmed in toto the decision rendered by the Municipal Trial Court of Antipolo, Rizal, Branch II, in Civil Case No. 2547. This case originated from a complaint for unlawful detainer filed by petitioners Bonifacio and Venida Valdez against private respondents Gabriel and Francisca Fabella before the Municipal Trial Court of Antipolo, Rizal. The complaint alleges these material facts: 2. That plaintiffs are the registered owner[s] of a piece of residential lot denominated as Lot [N]o. 3 Blk 19 located at Carolina Executive Village, Brgy. Sta. Cruz, Antipolo, Rizal which [they] acquired from Carolina Realty, Inc. Sometime [i]n November 1992 by virtue of Sales Contract, xerox copy of which is hereto attached marked as Annex "A" and the xerox copy of the Torrens Certificate of Title in her name marked as Annex "B"; 3. That defendants, without any color of title whatsoever occupie[d] the said lot by building their house in the said lot thereby depriving the herein plaintiffs rightful possession thereof; 4. That for several times, plaintiffs orally asked the herein defendants to peacefully surrender the premises to them, but the latter stubbornly refused to vacate the lot they unlawfully occupied; 5. That despite plaintiffs’ referral of the matter to the Barangay, defendants still refused to heed the plea of the former to surrender the lot peacefully; 6. That because of the unfounded refusal of the herein defendants to settle the case amicably, the Barangay Captain was forced to issue the necessary Certification to File Action in favor of the herein plaintiffs in order that the necessary cause of action be taken before the proper court, xerox copy of which is hereto attached marked as Annex "C"; 7. That by reason of the deliberate, malicious and unfounded refusal of the defendants to vacate/surrender the premises in question, the herein plaintiffs were constrained to engage the professional services of counsel thus incurring expenses amounting to TEN THOUSAND PESOS (P10,000.00) representing acceptance fee and additional ONE THOUSAND PESOS (P1,000.00) per appearance, who on July 12, 1994 sent a formal demand was likewise ignored, (sic) copy of which is hereto attached as Annex "D"; 8. That likewise by virtue of the adamant refusal of the defendants to vacate/surrender the said premises in question, plaintiff[s] suffered serious anxiety, sleepless nights, mental torture and moral erosion; x x x2 In their answer, private respondents contended that the complaint failed to state that petitioners had prior physical possession of the property or that they were the lessors of the former. In the alternative, private respondents claimed ownership over the land on the ground that they had been in open, continuous, and adverse possession thereof for more than thirty years, as attested by an ocular inspection report from the Department of Environment and Natural Resources. They also stressed that the complaint failed to comply with Supreme Court Circular No. 28-91 regarding affidavits against non-forum shopping. The Municipal Trial Court (MTC) rendered a decision in favor of the petitioners, ordering private respondents to vacate the property and to pay rent for the use and occupation of the same plus attorney’s fees. Private respondents appealed the MTC’s decision to the Regional Trial Court (RTC). The RTC, in a decision dated 8 January 1997, affirmed in toto the decision of the MTC. Undeterred, the private respondents filed a petition for review with the Court of Appeals on 10 March 1997 questioning the decision of the RTC. EJECTMENT AND LEASE Mariel Angela Piedad Soriano
In a decision dated 22 April 1997, the Court of Appeals reversed and set aside the decision of the RTC. It held that petitioners failed to make a case for unlawful detainer because they failed to show that they had given the private respondents the right to occupy the premises or that they had tolerated private respondents’ possession of the same, which is a requirement in unlawful detainer cases. It added that the allegations in petitioners’ complaint lack jurisdictional elements for forcible entry which requires an allegation of prior material possession. The Court of Appeals ratiocinated thus: An examination of the complaint reveals that key jurisdictional allegations that will support an action for ejectment are conspicuously lacking. In particular, an allegation of prior material possession is mandatory in forcible entry, xxx and the complaint is deficient in this respect. On the other hand, neither does there appear to be a case of unlawful detainer, since the private respondents failed to show that they had given the petitioners the right to occupy the premises, which right has now [been] extinguished. xxx In light of the foregoing, the conclusion is inevitable that the Municipal Trial Court before which the action for ejectment was filed had no jurisdiction over the case. Consequently, the dismissal thereof is in order. WHEREFORE, the Petition is hereby GIVEN DUE COURSE, and GRANTED. The decision dated 08 January 1997 rendered by the respondent court is hereby REVERSED and SET ASIDE, and judgment is hereby rendered DISMISSING the complaint in Civil Case No. 2547 of the Municipal Trial Court of Antipolo, Rizal for lack of jurisdiction.3 Petitioners filed a motion for reconsideration which was denied in a resolution dated 30 January 1998.4 Hence, the instant petition. Petitioners submit the following issues for the Court’s consideration5: A. WHETHER OR NOT THE ALLEGATIONS OF THE COMPLAINT CLEARLY MADE OUT A CASE FOR UNLAWFUL DETAINER. B. WHETHER OR NOT BASED ON THE ALLEGATION(S) OF THE COMPLAINT, THE MUNICIPAL TRIAL COURT OF ANTIPOLO, RIZAL, CLEARLY HAS ORIGINAL JURISDICTION OVER THE INSTANT COMPLAINT FILED BEFORE IT. Since the two issues are closely intertwined, they shall be discussed together. In the main, petitioners claim that the averments of their complaint make out a case for unlawful detainer having alleged that private respondents unlawfully withheld from them the possession of the property in question, which allegation is sufficient to establish a case for unlawful detainer. They further contend that the summary action for ejectment is the proper remedy available to the owner if another occupies the land at the former’s tolerance or permission without any contract between the two as the latter is bound by an implied promise to vacate the land upon demand by the owner. The petition is not meritorious. Under existing law and jurisprudence, there are three kinds of actions available to recover possession of real property: (a) accion interdictal; (b) accion publiciana; and (c) accion reivindicatoria.6 Accion interdictal comprises two distinct causes of action, namely, forcible entry (detentacion) and unlawful detainer (desahuico).7 In forcible entry, one is deprived of physical possession of real property by means of force, intimidation, strategy, threats, or stealth whereas in unlawful detainer, one illegally withholds possession after the expiration or termination of his right to hold possession under any contract, express or implied.8 The two are distinguished from each other in that in forcible entry, the possession of the defendant is illegal from the beginning, and that the issue is which party has prior de facto possession while in unlawful detainer, possession of the defendant is originally legal but became illegal due to the expiration or termination of the right to possess.9 The jurisdiction of these two actions, which are summary in nature, lies in the proper municipal trial court or metropolitan trial court. 10 Both actions must be brought within one year from the date of actual entry on the land, in case of forcible entry, and from the date of last demand, in case of unlawful detainer.11 The issue in said cases is the right to physical possession. Accion publiciana is the plenary action to recover the right of possession which should be brought in the proper regional trial court when dispossession has lasted for more than one year.12 It is an ordinary civil proceeding to determine the better right of possession of realty independently of title.13 In other words, if at the time of the filing of the complaint more than one year had elapsed since defendant had turned plaintiff out of possession or defendant’s possession had become illegal, the action will be, not one of the forcible entry or illegal detainer, but an accion publiciana. On the other hand, accion reivindicatoria is an action to recover ownership also brought in the proper EJECTMENT AND LEASE Mariel Angela Piedad Soriano
regional trial court in an ordinary civil proceeding.14 To justify an action for unlawful detainer, it is essential that the plaintiff’s supposed acts of tolerance must have been present right from the start of the possession which is later sought to be recovered. 15 Otherwise, if the possession was unlawful from the start, an action for unlawful detainer would be an improper remedy.16 As explained in Sarona v. Villegas17: But even where possession preceding the suit is by tolerance of the owner, still, distinction should be made. If right at the incipiency defendant’s possession was with plaintiff’s tolerance, we do not doubt that the latter may require him to vacate the premises and sue before the inferior court under Section 1 of Rule 70, within one year from the date of the demand to vacate. xxxx A close assessment of the law and the concept of the word "tolerance" confirms our view heretofore expressed that such tolerance must be present right from the start of possession sought to be recovered, to categorize a cause of action as one of unlawful detainer - not of forcible entry. Indeed, to hold otherwise would espouse a dangerous doctrine. And for two reasons: First. Forcible entry into the land is an open challenge to the right of the possessor. Violation of that right authorizes the speedy redress – in the inferior court - provided for in the rules. If one year from the forcible entry is allowed to lapse before suit is filed, then the remedy ceases to be speedy; and the possessor is deemed to have waived his right to seek relief in the inferior court. Second, if a forcible entry action in the inferior court is allowed after the lapse of a number of years, then the result may well be that no action of forcible entry can really prescribe. No matter how long such defendant is in physical possession, plaintiff will merely make a demand, bring suit in the inferior court – upon a plea of tolerance to prevent prescription to set in - and summarily throw him out of the land. Such a conclusion is unreasonable. Especially if we bear in mind the postulates that proceedings of forcible entry and unlawful detainer are summary in nature, and that the one year time-bar to suit is but in pursuance of the summary nature of the action.18 (Underlining supplied) It is the nature of defendant’s entry into the land which determines the cause of action, whether it is forcible entry or unlawful detainer. If the entry is illegal, then the action which may be filed against the intruder is forcible entry. If, however, the entry is legal but the possession thereafter becomes illegal, the case is unlawful detainer. Indeed, to vest the court jurisdiction to effect the ejectment of an occupant, it is necessary that the complaint should embody such a statement of facts as brings the party clearly within the class of cases for which the statutes provide a remedy, as these proceedings are summary in nature.19 The complaint must show enough on its face the court jurisdiction without resort to parol testimony.20 The jurisdictional facts must appear on the face of the complaint. When the complaint fails to aver facts constitutive of forcible entry or unlawful detainer, as where it does not state how entry was affected or how and when dispossession started, the remedy should either be an accion publiciana or an accion reivindicatoria in the proper regional trial court. 21 Thus, in Go, Jr. v. Court of Appeals, 22 petitioners filed an unlawful detainer case against respondent alleging that they were the owners of the parcel of land through intestate succession which was occupied by respondent by mere tolerance of petitioners as well as their deceased mother. Resolving the issue on whether or not petitioners’ case for unlawful detainer will prosper, the court ruled23: Petitioners alleged in their complaint that they inherited the property registered under TCT No. C-32110 from their parents; that possession thereof by private respondent was by tolerance of their mother, and after her death, by their own tolerance; and that they had served written demand on December, 1994, but that private respondent refused to vacate the property. x x x It is settled that one whose stay is merely tolerated becomes a deforciant illegally occupying the land the moment he is required to leave. It is essential in unlawful detainer cases of this kind, that plaintiff’s supposed acts of tolerance must have been present right from the start of the possession which is later sought to be recovered. This is where petitioners’ cause of action fails. The appellate court, in full agreement with the MTC made the conclusion that the alleged tolerance by their mother and after her death, by them, was unsubstantiated. x x x The evidence revealed that the possession of defendant was illegal at the inception and not merely tolerated as alleged in the complaint, considering that defendant started to occupy the subject lot and then built a house thereon without the permission and consent of petitioners and before them, their mother. xxx Clearly, defendant’s entry into the land was effected clandestinely, without the knowledge of the owners, consequently, it is categorized as possession by stealth which is forcible entry. As explained in Sarona vs. Villegas, cited in Muñoz vs. Court of Appeals [224 SCRA 216 (1992)] tolerance must be present right from the start of possession sought to be recovered, to categorize a cause of action as one of unlawful detainer not of forcible entry x x x. And in the case of Ten Forty Realty and Development Corp. v. Cruz,24 petitioner’s complaint for unlawful detainer merely contained the bare allegations that (1) respondent immediately occupied the subject property after its sale to her, an action merely tolerated by petitioner; and (2) her allegedly illegal occupation of the premises was by mere tolerance. The court, in finding that the alleged tolerance did not justify the action for unlawful detainer, held: To justify an action for unlawful detainer, the permission or tolerance must have been present at the beginning of the possession. x x x EJECTMENT AND LEASE Mariel Angela Piedad Soriano
xxxx In this case, the Complaint and the other pleadings do not recite any averment of fact that would substantiate the claim of petitioner that it permitted or tolerated the occupation of the property by Respondent Cruz. The complaint contains only bare allegations that 1) respondent immediately occupied the subject property after its sale to her, an action merely tolerated by petitioner; and 2) her allegedly illegal occupation of the premises was by mere tolerance. These allegations contradict, rather than support, petitioner’s theory that its cause of action is for unlawful detainer. First, these arguments advance the view that respondent’s occupation of the property was unlawful at its inception. Second, they counter the essential requirement in unlawful detainer cases that petitioner’s supposed act of sufferance or tolerance must be present right from the start of a possession that is later sought to be recovered.25 In the instant case, the allegations in the complaint do not contain any averment of fact that would substantiate petitioners’ claim that they permitted or tolerated the occupation of the property by respondents. The complaint contains only bare allegations that "respondents without any color of title whatsoever occupies the land in question by building their house in the said land thereby depriving petitioners the possession thereof." Nothing has been said on how respondents’ entry was effected or how and when dispossession started. Admittedly, no express contract existed between the parties. This failure of petitioners to allege the key jurisdictional facts constitutive of unlawful detainer is fatal.26 Since the complaint did not satisfy the jurisdictional requirement of a valid cause for unlawful detainer, the municipal trial court had no jurisdiction over the case.27 It is in this light that this Court finds that the Court of Appeals correctly found that the municipal trial court had no jurisdiction over the complaint. WHEREFORE, the petition is DENIED and the judgment of the Court of Appeals dismissing the complaint in Civil Case No. 2547 of the MTC Antipolo, Rizal for lack of jurisdiction is hereby AFFIRMED. No pronouncement as to costs. SO ORDERED.
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Republic of the Philippines SUPREME COURT ManilaSECOND DIVISION G.R. No. 83982 January 12, 1990 JESUS C. JAKIHACA, petitioner, vs. SPS. LILIA AQUINO and APOLONIO AQUINO, JOSE TORALDE, and HON. EMMA CENIDOZAONA, respondents. Romeo C. San Pedro for petitioner. Juan R. Moreno for respondents. PARAS, J.: On September 10, 1986, petitioner Jesus Jakihaca filed an ejectment suit against respondentsspouses Lilia Aquino and Apolonio Aquino, and Jose Toralde before the Municipal Trial Court of San Mateo, Rizal, docketed as Civil Case No. 616, on account of the latter's refusal to remove their houses which they have allegedly illegally constructed without the knowledge and consent and against the will of the former on a residential land situated in Buntong Palay, Ampid, San Mateo, covered by TCT No. N103650, despite verbal demand. Initially, the matter was referred to the Barangay Captain of Ampid, San Mateo, Rizal, for conciliation processes pursuant to the requirements of P.D. No. 1508. But due to repeated refusal of respondents to appear before the Barangay Lupon, the Lupon Chairman and Secretary thereafter issued a "certification to file action." Served with summons pursuant to the Rules on Summary Procedure, the defendants on November 3, 1986 filed an answer with Special and Affirmative Defenses alleging among others, that there was a verbal contract of tenancy between the defendants and the former owner of the land in question which they planted to fruit bearing trees and devoted the same primarily to rice and corn products, and so therefore, they can not be ejected under the Land Reform Law more particularly P.D. No. 1 from this land which they had occupied and cultivated for more than ten (10) years with the consent of the former owner Gloria Gener. In addition, they said that there is no showing that the case was first brought to the attention of the Ministry of Agrarian Reform for certification that this case is proper for trial before said Court. On December 22, 1987, the respondent trial court found that the private respondents are not agricultural tenantfarmers of the land in question, either through 'its former owner Gloria Gener or through the present ownerpetitioner Jesus Jakihaca that private respondents entered the premises some 10 to 20 years ago and built their houses thereon by tolerance from the former owner Gloria Gener and as such they are bound by their implied promise that they will vacate the land upon demand. Private respondents were ordered to: (1) remove their respective houses on the portion of the land occupied by them and surrender possession thereof to the petitioner; (2) pay the petitioner jointly and severally the amount of P 3,000.00 for attorney's fees; and (3) reimburse the petitioner for the cost of the suit. Their claim for moral and exemplary damages was dismissed for lack of merit. On appeal by the private respondents to the Regional Trial Court, said appellate court on April 8, 1988 dismissed the case on the ground that the lower court acted without jurisdiction as the complaint shows nothing when the verbal demand to remove the houses on the lot of the petitioner was made on the private respondents. (Decision of the RTC, p. 13, Rollo). Petitioner filed a motion for reconsideration of the order of dismissal on April 21, 1988 which was denied on June 25, 1988. Not satisfied, this petition was filed on July 12, 1988. On March 15, 1989, this Court in a minute resolution gave due course to the petition. Petitioner claims that the Regional Trial Court erred in dismissing Civil Case No. 616 for lack of jurisdiction of the Municipal Trial Court. On the other hand, private respondents contended that the petition was filed out of time; that the petition was filed with the wrong court; that the Municipal Trial Court has no jurisdiction over the subject matter of the action; and that there was no allegation in the complaint of prior physical possession of the land by the petitioner. The petition is impressed with merit. The records show that the complaint explicitly alleged that "plaintiff verbally asked the defendants to remove their houses on the lot of the former but the latter refused and still refuse to do so without just and lawful grounds." (p. 44, Rollo) Such is sufficient compliance with the jurisdictional requirements, in accordance with the doctrine laid down in the case of Hautea v. Magallon, 12 SCRA 514, to wit:
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
An allegation in an original complaint for illegal detainer that in spite of demands made by the plaintiff the defendants had refused to restore the land, is considered sufficient compliance with the jurisdictional requirement of previous demand. As to whether or not the demand was brought within the one year period, this We have to say. As a general rule, jurisdiction over the subject matter of a case may be objected to at any stage of the proceeding even on appeal, but this is not without exception. In the case of Tijam v. Sibonghanoy, 23 SCRA 30, cited in Tejones v. Cironella, 159 SCRA 104, We held: It is not right for a party who has affirmed and invoked the jurisdiction of a court in a particular matter to secure an affirmative relief to afterwards deny that same jurisdiction to escape penalty. Upon this same principle is what we said . . . to the effect that we frown upon the undesirable practice of a party submitting his case for decision and then accepting the judgment only if favorable and attacking it for lack of jurisdiction. Nowhere in the Answer of respondents contain an allegation attacking the jurisdiction of the Municipal Trial Court based on the issue on demand. Again, in PNB v. Intermediate Appellate Court, 143 SCRA 305, We held: While petitioners could have prevented the trial court from exercising jurisdiction over the case by seasonably taking exception thereto, they instead invoke the very same jurisdiction by filing an answer and seeking affirmative relief from it. What is more, they participated in the trial of the case by crossexamining respondent Planas. Upon that premise, petitioners cannot now be allowed belatedly to adopt an inconsistent posture by attacking the jurisdiction of the court to which they had submitted themselves voluntarily. (p. 48, Rollo) Another reason for the lower court's lack of jurisdiction over the subject matter as alleged by the respondents in their answer to the complaint filed with the Municipal Trial Court, was that said court has no jurisdiction to try the case as they are tenantsfarmers and that as such they cannot be ejected from their farmholdings without a certification by the Secretary of Agrarian Reform that the case is proper for hearing. On the other hand, petitioners argue that when the Municipal Trial Court required them to submit their respective position papers, respondent did not raise this particular issue anymore but instead centered on the issue of actual possession and the elements of forcible entry and illegal detainer. Petitioners, in their position paper, attached the report of Mr. Maines of the Agrarian Office which categorically states that there is no evidence whatsoever to show that the subject land is devoted to the production of rice and corn; that the occupants are not sharing with the present landowner, hence, they are classified as illegal occupants; that the subject land is not tenanted, not devoted to the production of palay and/or corn, hence, not covered by P.D. No27 or the Operation Land Transfer of the government (p. 47, Rollo). Considering the report of said office, the assumption of jurisdiction by the Municipal Trial Court of San Mateo, Rizal was proper. Respondents contend that the petition was filed out of time. They allege that when petitioner received the decision of the Regional Trial Court on April 20, 1988 and the appeal to this Court was filed only on July 12, 1988 or only after a 3 month period, such appeal was definitely outside the 15 day reglementary period within which to appeal. Respondents added that the motion for reconsideration filed with said Regional Trial Court did not stop the running of the period within which to validly file his appeal. The instant case, being an ejectment case was prosecuted under the Rule on Summary Procedure where it expressly prohibits a Motion for Reconsideration. (Memorandum for private respondents, p. 49, Rollo). Respondents are in error. The Rule on Summary Procedure applies only in cases filed before the Metropolitan Trial Court and Municipal Trial Courts, pursuant to Section 36 of Batas Pambansa Blg. 129. Summary procedures have no application to cases before the Regional Trial Courts. Hence, when the respondents appealed the decision of the Municipal Trial Court to the Regional Trial Court, the applicable rules are those of the latter court. Respondents likewise contend that the petition was filed with the wrong court. Again, they are mistaken. In the case of Lacsamana v. Second Special Cases Division of the Intermediate Appellate Court, 143 SCRA 643, We held that the final judgment or order of the Regional Trial Court in an appeal from the final judgment or order of the Metropolitan Trial Court, Municipal Trial Court and Municipal Circuit Trial Court, may be appealed to the Court of Appeals through a petition for review in accordance with Section 22 of the Interim Rules, or to the Supreme Court through a petition for review on certiorari in accordance with Rule 45 of the Rules of Court and Section 25 of the Interim Rules. Clearly, the petitioners filed this appeal with a proper court. PREMISES CONSIDERED, the petition is hereby GRANTED. The decision dated April 8, 1988 and the order dated June 25, 1988 both of the Regional Trial Court, Branch 76, San Mateo, Rizal, in Civil Case No. 415, are hereby SET ASIDE. The decision of the Municipal Trial Court of San Mateo, Rizal, dated December 22, 1987 in Civil Case No. 616 is hereby REINSTATED. SO ORDERED.
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 104828 January 16, 1997 SPOUSES RAFAEL BENITEZ AND AVELINA BENITEZ, petitioners, vs. COURT OF APPEALS, SPOUSES RENATO MACAPAGAL and ELIZABETH MACAPAGAL, respondents. PANGANIBAN, J.: May possession of a lot encroached upon by a part of another's house be recovered in an action for ejectment? This is the main question raised by the petition for review on certiorari assailing the Resolution 1 of the Court of Appeals, Sixth Division,
dated March 24, 1992, in CAG.R. SP No. 26853 denying due course to petitioner's appeal and affirming the decision of the Regional Trial Court of Pasig in Civil Case No. 61004, which in turn affirmed the decision of the Metropolitan Trial Court of San Juan, Metro Manila, Branch 58. The Facts On January 22, 1986, petitioners Rafael and Avelina Benitez purchased a 303squaremeter parcel of land with improvement from the Cavite Development Bank, covered by Transfer Certificate of Title No. 41961 (now, TCT No. 55864). Subsequently, private respondents Renato and Elizabeth Macapagal bought a 361squaremeter lot covered by TCT No. 40155. On September 18, 1986, they filed Civil Case No. 53835 with the Regional Trial Court of Pasig, Branch 157 against petitioners for the recovery of possession of an encroached portion of the lot they purchased. The parties were able to reach a compromise in which private respondents sold the encroached portion to petitioners at the acquisition cost of One Thousand Pesos (P1,000.00) per square meter. On July 17, 1989, private respondents purchased still another property, a 285.70 squaremeterlot covered by TCT No. 3249R, adjacent to that of petitioners. After a relocation survey was conducted, private respondents discovered that some 46.50 square meters of their property was occupied by petitioners' house. Despite verbal and written demands, petitioners refused to vacate. A last notice to vacate was sent to petitioners on October 26, 1989. On January 18, 1990, private respondents filed with the Metropolitan Trial Court of San Juan, Branch 58, Civil Case No. 61004 for ejectment against petitioners. The MeTC of San Juan decided in favor of the former, with the following disposition: 3 WHEREFORE, in view of all the foregoing, judgment is hereby rendered for the plaintiffs and against the defendants ordering them and all persons claiming rights under them to vacate and surrender possession of the subject premises to the plaintiffs as well as to pay the following: 1. The amount of P930.00 a month starting July 17, 1989 until they finally vacate the subject premises; 2. The amount of P5,000.00 for and as attorney's fees; and 3. Cost of suit. On appeal, the Regional Trial Court of Pasig, Branch 167, affirmed said decision. 4 The RTC said: 5 The controversy in this case is not an encroachment or overlapping of two (2) adjacent properties owned by the parties. It is a case where a part of the house of the defendants is constructed on a portion of the property of the plaintiffs. So that as new owner of the real property, who has a right to the full enjoyment and possession of the entire parcel covered by Transfer Certificate of Title No. 41961, plaintiffs have the right to demand that defendants remove the portion of the house standing on plaintiff's realty. . . The dispositive portion thereof reads: 6
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
WHEREFORE, finding no reversible error in the decision appealed from, it being more consistent with the facts and the law applicable, the same is hereby AFFIRMED in toto. Costs against the defendantappellants. SO ORDERED. On further appeal, the respondent Court found no merit in petitioners' plea. In a Resolution dated March 24, 1992, the Sixth Division of said Court found the petition to be a mere rehash of the issues and arguments presented before the lower courts. It ruled in part that: 7 3) Petitioners were fully aware that part of their house encroached on their neighbor's property, while respondents became aware of it only after purchasing said property. Petitioners cannot claim good faith as against the respondents. 4) Since petitioners are not builders in good faith, they cannot demand that respondents sell the disputed portion; what the law provides is that the builders in bad faith can be ordered to dismantle said structure at their own expense. In the interim period that petitioners' structure remains, they should pay reasonable rent until they remove the structure. The dispositive portion thereof reads: 8 For reasons indicated, We find the appeal without merit and deny it due course, with costs against the petitioners. SO ORDERED. Hence, this petition. The Issues The main issue is whether the possession of the portion of the private respondents' land encroached by petitioners' house can be recovered through an action of ejectment, not accion publiciana. Corollarily, petitioners question (a) the validity of the imposition of "rental" for the occupancy of the encroached portion, (b) the denial of their claimed preemptive right to purchase the encroached portion of the private respondents' land, and (c) the propriety of a factual review of the CA's finding of bad faith on the part of petitioners. In a nutshell, petitioners insist that the MeTC had no jurisdiction over the case at bar because its real nature is accion publiciana or recovery of possession, not unlawful detainer. It is not forcible entry because private respondents did not have prior possession of the contested property as petitioners possessed it ahead of private respondents. It is not unlawful detainer because petitioners were not the private respondents' tenants nor vendee unlawfully withholding possession thereof. Said court also has no jurisdiction to impose payment of "rentals" as there is no lessorlessee relationship between the parties. They pray for a review of the factual finding of bad faith, insisting that the facts uphold their position. Due to their alleged good faith, they claim the preemptive right to purchase the litigated portion as a matter of course. Finally, they insist that the award of attorney's fees is unwarranted as private respondents allegedly had knowledge of the encroachment prior to their acquisition of said land. Private respondents counter that petitioners are estopped from questioning the jurisdiction of the MeTC after they voluntarily participated in the trial on the merits and lost; that there is no law giving petitioners the option to buy the encroached property; and that petitioners acted in bad faith because they waived in their deed of sale the usual seller's warranty as to the absence of any and all liens and encumbrances on the property, thereby implying they had knowledge of the encroachment at the time of purchase. The Court's Ruling The petition lacks merit and should be denied. First Issue: MeTC Has Jurisdiction The jurisdictional requirements for ejectment, as borne out by the facts, are: after conducting a relocation survey, private respondents discovered that a portion of their land was encroached by petitioners' house; notices to vacate were sent to petitioners, the last one being dated October 26, 1989; and private respondents filed the ejectment suit against petitioners on January 18, 1990 or within one (1) year from the last demand. Private respondents' cause of action springs from Sec. 1, Rule 70 of the Revised Rules of Court, which provides: Sec. 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 landlord, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold possession, by virtue of any contract, express or implied, or the legal representatives or assigns of any such landlord, 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 inferior court against the person or persons unlawfully withholding or depriving of
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
possession, or any person or persons claiming under them, for the restitution of such possession, together with damages and costs. . . That petitioners occupied the land prior to private respondents' purchase thereof does not negate the latter's case for ejectment. Prior possession is not always a condition sine qua non in ejectment. 9 This is one of the distinctions between forcible entry and unlawful detainer. In forcible entry, the plaintiff is deprived of physical possession of his land or building by means of force, intimidation, threat, strategy or stealth; thus, he must allege and prove prior possession. But in unlawful detainer, the defendant unlawfully withholds possession after the expiration or termination of his right thereto under any contract, express or implied. In such a case, prior physical possession is not required. 10 Possession can also be acquired, not only by material occupation, but also by the fact that a thing is subject to the action of one's will or by the proper acts and legal formalities established for acquiring such right. 11 Possession of land can be acquired upon the execution of the deed of sale thereof by its vendor. Actual or physical occupation is not always necessary. In the case before us, considering that private respondents are unlawfully deprived of possession of the encroached land and that the action for the recovery of possession thereof was made within the oneyear reglementary period, ejectment is the proper remedy. 12 The MeTC of San Juan had jurisdiction. In addition, after voluntarily submitting themselves to its proceedings, petitioners are estopped from assailing the jurisdiction of the MeTC. 13 This Court will not allow petitioners to attack the jurisdiction of the trial court after receiving a decision adverse to their position. Second Issue: Compensation For Occupancy Petitioners erroneously construed the order of the MeTC to pay private respondents Nine Hundred Pesos (P930.00) a month starting July 17, 1989 until they (petitioners) finally vacate the subject premises as "rentals". Technically, such award is not rental, but damages. Damages are recoverable in ejectment cases under Section 8, Rule 70 of the Revised Rules of Court. 14 These damages arise from the loss of the use and occupation of the property, and not the damages which private respondents may have suffered but which have no direct relation to their loss of material possession. 15 Damages in the context of Section 8, Rule 70 is limited to "rent" or "fair rental value" for the use and occupation of the property. 16 There is no question that petitioners benefited from their occupation of a portion of private respondents' property. Such benefit justifies the award of the damages of this kind. Nemo cum alterius, detrimenti locupletari potest. No one shall enrich himself at the expense of another. Third Issue: Option To Sell Belongs To Owner Article 448 of the Civil Code 17 is unequivocal that the option to sell the land on which another in good faith builds, plants or sows on, belongs to the landowner. The option is to sell, not to buy, and it is the landowner's choice. Not even a declaration of the builder, planter, or sower's bad faith shifts this option to him per Article 450 of the Civil Code. 18 This advantage in Article 448 is accorded the landowner because "his right is older, and because, by the principle of accession, he is entitled to the ownership of the accessory thing." 19 There can be no preemptive right to buy even as a compromise, as this prerogative belongs solely to the landowner. No compulsion can be legally forced on him, contrary to what petitioners asks from this Court. Such an order would certainly be invalid and illegal. Thus, the lower courts were correct in rejecting the petitioners' offer to buy the encroached land. Fourth Issue: A Review of Factual Findings Is Unwarranted Petitioners ask this Court to review the alleged error of the respondent Court in appreciating bad faith on their part. According to them, this is contradictory to the fact that private respondents acquired their lot and discovered the encroachment after petitioners bought their house. After careful deliberation on this issue, this Court finds this petition for review inadequate as it failed to show convincingly a reversible error on the part of the respondent Court in this regard. Thus, for very good reasons, this Court has consistently and emphatically declared that review of the factual findings of the Court of Appeals is not a function that is normally undertaken in petitions for review under Rule 45 of the Rules of Court. Such findings, as a general rule, are binding and conclusive. 20 The jurisdiction of this Court is limited to reviewing errors of law unless there is a showing that the findings complained of are totally devoid of support in the records or that they are so glaringly erroneous as to constitute reversible error. 21
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
Even respondent Court has taken note of the inadequacy of the petition before it, as it wryly said: 22 The Petition for Review is not certainly a manifestation of clarity nor an example of a wellorganized summation of petitioners' cause of action. . . xxx xxx xxx A careful scrutiny of the above issues discloses that they are mere repetitions in a rehashed form of the same issues with the same supporting arguments raised by petitioners when they appealed from the decision of the (MeTC) to the RTC. . . This petition is no different. We share the foregoing sentiments of the respondent Court. In essence, respondent Court merely affirmed the decision of the MeTC. The Court of Appeal's finding of petitioners' bad faith did not alter nor affect the MeTC's disposition. Petitioners want this Court to declare them in good faith and to determine their rights under Article 448, Civil Code. However, the mere fact that they bought their property ahead of the private respondents does not establish this point. Nor does it prove that petitioners had no knowledge of the encroachment when they purchased their property. Reliance on the presumption in Article 526 of the Code is misplaced in view of the declaration of the respondent Court that petitioners are not builders in good faith. What petitioners presented are mere allegations and arguments, without sufficient evidence to support them. As such, we have no ground to depart from the general rule against factual review. In sum, the petition has not shown cogent reasons and sufficient grounds to reverse the unanimous ruling of the three lower courts. The MeTC, RTC and the Court of Appeals were all in agreement in sustaining private respondents' rights. And we uphold them. WHEREFORE, the petition is DENIED. The assailed Resolution is hereby AFFIRMED. SO ORDERED.
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 129313 October 10, 2001 SPOUSES MA. CRISTINA D. TIRONA and OSCAR TIRONA, SPOUSES MA. PAZ D. BAUTISTA and CESAR BAUTISTA, SPOUSES MA. ARANZAZU D. ORETA and CANUTO ORETA, SPOUSES MA. CORAZON D. BAUTISTA and PABLO S. BAUTISTA, JR., and DEO S. DIONISIO, petitioners, vs. HON. FLORO P. ALEJO as Presiding Judge, Regional Trial Court of Valenzuela, Metro Manila, Branch 172, JUANITO IGNACIO and LUIS NUÑEZ, respondents. QUISUMBING, J.: This petition for review assails the joint decision1 dated April 10, 1997, of the Regional Trial Court of Valenzuela, Branch 172, in Civil Cases Nos. 5169V97 and 5093V97. The factual background for this petition are culled from the records of the cases. A. Civil Case No. 5093V97: On March 25, 1996, herein petitioners sued private respondent Luis Nuñez before the Metropolitan Trial Court of Valenzuela, Branch 81. The suit was docketed as Civil Case No. 6633 for ejectment. Petitioners claimed to be owners of various fishpond lots located at Coloong, Valenzuela.2 They alleged, among others that: (1) on January 20, 1996, private respondent Nuñez, "by means of force, stealth, or strategy, unlawfully entered the said fishpond lots and occupied the same" against their will, thereby depriving them of possession of said fishpond; (2) Nuñez illegally occupied a house owned by and built on the lot of petitioner Deo Dionisio; and (3) Nuñez unlawfully operated and used petitioners's fishpond, despite their demands to vacate the same. Petitioners prayed that the court order Nuñez to vacate Dionisio's house; surrender possession of the fishpond to them; remove all milkfish fingerlings at his expense; and pay a monthly compensation of P29,000.00 from January 20, 1996 to the time he surrenders possession, with interest at twelve percent (12%) yearly until fully paid.1âwphi1.nêt Nuñez admitted in his answers that petitioners owned the fishponds, but denied the other allegations. He raised the following affirmative defenses: (1) the MeTC had no jurisdiction over the case, for petitioners' failure to allege prior physical possession in their complaint; (2) petitioners' action was premature in view of the pendency of a complaint he filed with the Department of Agrarian Reform Adjudication Board (DARAB), docketed as Case No. IVMM009995R, where the issue of possession in the concept of tenancy is the same as that raised by petitioners in Civil Case No. 6633; and (3) petitioners are guilty of forumshopping since by they were fully aware of the said DARAB case. He moved that the ejectment suit be dismissed. On October 1, 1996, the MeTC of Valenzuela, Branch 81, decided Civil Case No. 6633 as follows: WHEREFORE, premises considered, judgement is hereby rendered in favor of the plaintiffs and against the defendant and all persons claiming rights under him: 1. To peacefully vacate and surrender the subject premises to the plaintiffs: 2. To peacefully vacate and surrender the house belonging to plaintiff Deo S. Dionisio; 3. To pay the amount of P27,000.00 a month as reasonable compensation from January 20, 1996 up to the time he finally vacates the subject premises; 4. To pay the amount of P10,000.00 as and for attorney's fees; and 5. To pay the costs of suit. SO ORDERED.3 On November 15, 1996, Nuñez appealed said decision to the Regional Trial Court of Valenzuela, which docketed the appeal as Civil Case No. 5093V97. B. Civil Case No. 5169V97 EJECTMENT AND LEASE Mariel Angela Piedad Soriano
On March 25, 1996, petitioners also instituted Civil Case No. 6632 for ejectment against private respondent Juanito Ignacio with the Metropolitan Trial Court of Valenzuela, Branch 82. The allegations were essentially the same as those against private respondent Nuñez, except it is alleged that Ignacio "also illegally occupied the house constructed on the lot of, and belonging to the plaintiff Spouses Ma. Paz D. Bautista and Cesar Bautista." Petitioners sought the same relief prayed for in Civil Case No. 6633. Ignacio raised similar defenses as those offered by Nuñez in Civil Case No. 6633. Like Nuñez, he also moved for dismissal of the ejectment suit against him. On February 11, 1997, the MeTC of Valenzuela, Branch 82 issued an order dismissing Civil Case No. 6633 against Ignacio, thus: WHEREFORE, PREMISES CONSIDERED, defendant's motion to cite plaintiffs in contempt of court is denied, and his other motion to dismiss the case is hereby GRANTED. Accordingly, the aboveentitled case is DISMISSED without pronouncement as to costs. SO ORDERED.4 In granting Ignacio's Motion to Dismiss, the MeTC said: It is now clear to the mind of the Court that the issue of recovery of possession pursued by plaintiffs in this case is pending also for adjudication among other issues in DARAB Case No. IVMM009995. There is no dispute that both this case and the DARAB case involve the same real property or at least, adjoining lots covered by titles in the names of some of the plaintiffs, which lots are also involved in this case. x x x Clearly, said DARAB case is a prejudicial question to the case at bar, and or vice versa (stress in the original). The possibility that this Court and the DARAB may come up with two contradicting decisions on issue of possession shall always be there, and since the DARAB case was files first, there appears compelling necessity to halt proceedings in this case5 On February 27, 1997, petitioners appealed the foregoing Order to the Regional Trial Court of Valenzuela, which docketed their appeal as Civil Case No. 5169V97. Since Civil Cases Nos. 5093V97 and 5169V97 involved essentially the same parties, the same subject matter, and the same issues, the cases were jointly heard before Branch 172 of the RTC of Valenzuela. On April 10, 1997, Civil Cases Nos. 5093V97 and 5169V97 were jointly decided. WHEREFORE, judgment is hereby rendered as follows: 1. Affirming the appealed Order of the trial court dated February 11, 1997 dismissing Civil Case No. 6632, with the modification that the plaintiffs be made liable to pay the costs of suit; and 2. Reversing the appealed decision of the trial court dated October 1, 1996 in Civil Case No. 6633 and dismissing the above entitled case for the reasons stated above. The plaintiffs are ordered to pay the costs of suit. SO ORDERED.6 In ruling against herein petitioners, the RTC found: (1) As correctly pointed out by the counsel for the defendants in his memorandum on appeal, it is now settled that a complaint for forcible entry to fall within the jurisdiction of the inferior court must allege plaintiffs prior physical possession of the property by any of the means provided in Section 1 of Rule 70 of the Revised Rules of Court. Bare allegation in the complaint that the plaintiff was deprived of the possession of the property is insufficient to make the action one for forcible entry (citation omitted) In the instant case, while the complainants allege that the defendants (Ignacio in Civil Case No. 6632 and Nuñez in Civil Case No. 6633) by means of force, stealth or strategy "unlawfully entered the said fishpond lots and occupied the same against the will of the plaintiffs," there is no allegation that the plaintiffs had prior physical possession of the property in dispute. The complaint(s) in the aboveentitled case therefore did not fall within the jurisdiction of the trial courts. (2) The DARAB case (Case No. IVMM009995R) between the herein parties and covering the same subject matter was filed was ahead of the instant cases. The allegation in the DARAB complaint that the complainants are agricultural or share tenants is opposed to the claim of the respondents in their answer that the complainants are their industrial partners. The DARAB case EJECTMENT AND LEASE Mariel Angela Piedad Soriano
thus presented a dispute that is Agrarian Reform, thru the DARAB, is vested with exclusive jurisdiction over all agrarian reform matters or agrarian disputes. The principal issue in the instant cases for forcible entry – whether or not to eject the defendants from the fishponds – is necessarily connected with the agrarian dispute now pending resolution before the DARAB. It is therefore beyond the competence of the inferior court to resolve. x x x (3) The plaintiffs were less that honest in certifying under oath that they have no knowledge of any case pending before any tribunal or agency involving the same issues raised in the instant cases. At the time of their certification, there was pending before the DARAB of a case between the same parties with the same subject matter and where the issue of possession as raised in the instant cases is necessarily included in the larger issue of agricultural tenancy. The plaintiffs therefore violated Administrative Order No. 0494 of the Supreme Court, which is a ground for dismissal.7 On May 6, 1997, petitioners files with the RTC a joint Motion for Leave to Amend Complaint in Civil Cases Nos. 6632 and 6633 and a Motion for Reconsideration, together with the proposed Amended Complaints. On May 20,1997, the RTC denied the aforementioned motions. Hence, the instant petition. Petitioners assign the following as errors committed by the RTC: 1. THE LOWER COURT ERRED IN GIVING PRIME IMPORTANCE TO THE FAILURE OF PLAINTIFFS TO AVER THEIR COMPLAINT(S) THAT THEY WERE IN POSSESSION AT THE TIME OF THE FORCIBLE ENTRY MADE BY PRIVATE RESPONDENTS. 2. THE LOWER COURT ERRED IN FAILING TO MAKE A FINDING THAT PLAINTIFFS WERE IN POSSESSION OF THEIR PROPERTIES AT THE TIME OF FORCIBLE ENTRY THEREUNTO BY PRIVATE RESPONDENTS, FOR WHICH SHOULD HAVE BEEN GRANTED TO HEREIN PETITIONERS. 3. THE PENDENCY OF THE SUIT FILED BY PRIVATE RESPONDENTS IN THE DEPARTMENT OF AGRARIAN REFORM DID NOT PROSCRIBE THE INSTITUTION OF THE EJECTMENT CASE(S). 4. THERE HAD BEEN NO INFRACTION ON THE AFFIDAVIT OF NONFORUM SHOPPING REQUIREMENTS. The main issue for our resolution involves the jurisdiction of the metropolitan trial courts: was petitioner's failure to allege prior physical possession in a case for forcible entry fatal to the jurisdiction of the inferior courts? Ancillary thereto, we also must inquire (a) whether the pendency of the Case No. IVMM009995R before the DARAB barred the filing of Civil Cases Nos. 6632 and 6633 for forcible entry; and (b) whether petitioners violated Supreme Court Administrative Circular No. 0494 proscribing forum shopping. On the main issue, petitioners contend that the averment of the identities of the persons in possession of the disputed properties at the time of the forcible entry thereunto is not jurisdictional in character. Petitioners argue that the deficiency, if any, could have been remedied by amended or supplemental pleadings or by the submission of admissible evidence. They point out that the MeTC, Branch 81 in Civil Case No. 6633 had received evidence of petitioners' actual possession, resulting in a finding of fact of actual possession in its Decision of October 1, 1996. It was, therefore, an error for the RTC to have disregarded said finding of fact on the ground that the requisites for the MeTC to acquire jurisdiction over the forcible entry cases had not been complied with. It was likewise error for the RTC to have denied the admission of petitioners' Amended Complaints. Private respondents argue that a closer scrutiny of the allegations in the complaints in Civil Cases Nos. 6632 and 6633 filed with the court of origin will clearly show that there is no allegation whatsoever of prior physical possession on petitioners' part. All that is averred is unlawful deprivation by private respondents. They submit that this glaring defect is fatal enough to deprive the inferior court of jurisdiction over the forcible entry cases. With respect to the denial of admission of petitioners Amended Complaints, private respondents point out that amendments for the purpose of making the complaint confer jurisdiction upon the court are not allowed. The jurisdiction of a court is determined by the allegations of the complaint, and the rule is no different in actions for ejectment.8 Thus, in ascertaining whether or not the action is one for forcible entry falling within the exclusive of the inferior courts, the averments of the complaint and the character of the relief sought are to be examined. Petitioners' complaints in Civil Cases Nos. 6632 and 6633 are virtually identical, save as to the names of the defendants and the owners of the houses allegedly occupied by private respondents. The pertinent allegations in Civil Case No. 6633 read: 3) That plaintiffs in their individual rights, are respective owners in fee simple of fishpond lots located at Barangay Coloong, Municipality of Valenzuela, Metro Manila, With areas, lot numbers, and titles, xerox copies of which are Annexes hereto…
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
x x x 4) That on or about January 20, 1996, said defendant Luis Nuñez by means of force, stealth or strategy, unlawfully entered the said fishpond lots and occupied the same against the will of the plaintiffs thereby depriving said owners of the possession of the same; 5) That defendant Luis Nuñez also illegally occupied the house constructed on the lot of, and belonging to, plaintiff Deo S. Dionision. 6) That the said defendant also planted bangus fingerlings in the said fishponds and despite demands for them to remove the same and vacate the fishponds… still continue to unlawfully, illegally, and wantonly occupy said house and operate said fishponds to the great damage and prejudice of the plaintiffs.9 Petitioners submit that the phrase "thereby depriving said owners of the possession of the same" in paragraph 4 is tantamount to an averment of prior physical possession since private respondents could not have deprived them of possession unless the latter had been previously in possession of the subject properties. We are not persuaded. It cannot be inferred from the aforecited phrase that the possession that petitioners were supposedly deprived of is a prior physical possession. The question arises, what sort of prior physical possession is to averred? The word "possession" as used in forcible entry and unlawful detainer, means nothing more than physical possession, (stress supplied) not legal possession in the sense contemplated in civil law.10 The allegation must likewise show priority in time. Both requisites are wanting in the phrase relied upon by petitioners. A reading of the allegations in the complaints leads us to conclude that petitioners' action was once for forcible entry, not unlawful detainer. The distinctions between the two actions are: (1) In an action for forcible entry, the plaintiff must allege and prove that he was in prior physical possession of the premises until deprived thereof, while in illegal detainer, the plaintiff need not have been in prior physical possession; and (2) in forcible entry, the possession by the defendant is unlawful ab initio because he acquires possession by force, intimidation, threat, strategy, or stealth, while in unlawful detainer, possession is originally lawful but becomes illegal by reason of the termination of his right of possession under his contract with the plaintiff. In pleadings files in courts of special jurisdiction, the special facts giving the court jurisdiction must be specially alleged and set out. Otherwise, the complaint is demurrable.11 Hence, in actions for forcible entry, two allegations are mandatory for the municipal court to acquire jurisdiction: First, the plaintiff must allege his prior physical possession of the property. Second, he must also allege that he was deprived of his possession by any of the means provided for in Section 1, Rule 70 of the Rules of Court, namely: force, intimidation, threats, strategy, and stealth.12 Recall that the complaints in Civil Cases Nos. 6632 and 6633 failed to allege prior physical possession of the property on the part of petitioners. All that is alleged is unlawful deprivation of their possession by private respondents. The deficiency is fatal to petitioners' actions before the Metropolitan Trial Court of Valenzuela. Such bare allegation is insufficient for the MeTC to acquire jurisdiction. No reversible error was, therefore, committed by the RTC when it held that the Metropolitan Trial Court acquired no jurisdiction over Civil Cases Nos. 6632 and 6633 for failure of the complaints to aver physical possession by petitioners. But was the deficiency remedied, however, when petitioners submitted their Amended Complaints? The policy in this jurisdictions is that amendments to pleadings are favored and liberally allowed in the interests of substantial justice. Thus, amendments of the complaint may be allowed even if an order for its amendments of the complaint may be allowed even if an order for its dismissal has been issued so long as the motion to amend is filed before the order of dismissal acquired finality. 13 Note, however, that it is not a hard and fast rule. An amendment is not allowed where the court has no jurisdiction over the original complaint and the purpose of the amendment is to confer jurisdiction upon the court, 14 or where the action originally pleaded in the complaint was outside the jurisdiction of the court.15 We have carefully perused petitioners' proposed amendments and found them to include the allegation that petitioners were in prior physical possession of the disputed fishponds before said possession was allegedly disturbed. Clearly, the purpose is to sidestep the RTC ruling that MeTC had no jurisdiction. Over their complaints and allow the inferior court to acquire jurisdiction. This we cannot allow. Where the court of origin had no jurisdiction over the original complaint in the first place, amendments may not be had. It is axiomatic that before an amendment can be permitted, the trial court must have acquired jurisdiction over the case in the first instance.16 Regarding the second issue, petitioners contend that the DARAB had no jurisdiction over Case No. IVMM009995R. They submit that with the passage of Republic Act No. 788117 on February 20, 1995, private lands directly and exclusively used for prawn farms and fishponds are exempt from the coverage of the Comprehensive Agrarian Reform Law or Republic Act No. 6657. No agrarian relation thus subsisted between the parties for the DARAB to take cognizance of. Thus, litis pendentia did not bar the filing of Civil Cases Nos. 6632 and 6633. Stated differently, the pendency of Case No. IVMM009995R did not divest the MeTC of its jurisdiction to hear and try the EJECTMENT AND LEASE Mariel Angela Piedad Soriano
forcible entry cases. Private respondents contend that a comparison between DARAB Case No. IVMM009995R and Civil Cases Nos. 6632 and 6633 would show the same parties, the same subject matter of controversy, and the same issues. In other words, litis pendentia lies and may be availed of to dismiss the cases for forcible entry filed with the MeTC. At the outset, we must point out that petitioners' reliance upon Republic Act No. 7881 is off tangent. It is not disputed that at the time of the filing of Civil Cases Nos. 6632 and 6633, an agrarian relation's dispute was pending before the DARAB. The records show that private respondents as the complainants in Case No. IVMM009995R, were asserting tenancy rights, including the right to possession of the disputed fishponds or parts thereof, under Republic Act Nos. 384418 and 1199.19 Private respondents were thus claiming vested substantive rights, dating back to 1975 in the case of respondent Ignacio and 1979 in the case of respondent Nuñez, under substantive laws. A substantive law is a law, which creates, defines, or regulates rights concerning life, liberty, or property, or the powers of agencies or instrumentalities for the administration of public affairs.20 Republic Act No. 7881, in exempting prawn and fishponds from the coverage of the Comprehensive Agrarian Reform Law of 1988, is a substantive law. By its very nature and essence, substantive law operates prospectively21 and may not be construed retroactively without affecting previous or past rights. Hence, in view of the absence of a contrary intent in its provisions, Republic Act No. 7881 should be given a prospective operation and may not affect rights claimed under previous agrarian legislation. Under Rule 16, Section 1 of the Rules of Court, litis pendentia or pendency of another action is a ground for the dismissal of the second action. Recall that in the motions to dismiss filed by private respondents in Civil Cases No. 6632 and 6633, the pendency of the DARAB case was one of the grounds relied upon in seeking the dismissal of both actions. For litis of the grounds relied upon in seeking the dismissal of both actions. For litis pendentia to lie, the following requisites must be satisfied: 1. Identity of parties or representation in both cases; 2. Identity of rights asserted and relief prayed for ; 3. The relief must be founded on the same facts and the same basis; and 4. Identity of the two preceding particulars should be such that any judgment, which may be rendered in the other action, will, regardless of which party is successful, amount to res judicata on the action under consideration.22 These requisites, in our view, are present in this case. For one, the parties in the DARAB case and in the forcible entry cases filed with the MeTC are the same. Also, there is identity of rights asserted and reliefs prayed for. The action in Case No. IVMM009995R is for "declaration of tenancy, accounting, recovery of possession, specific performance, recovery of sum of money, plus damages" against petitioners. Note that the properties that private respondents seek to recover possession of in the DARAB case form part of the properties from which petitioners seek the ejectment of private respondents. The evident and logical conclusion then is that any decision that may be rendered in the DARAB case regarding the question of possession will also resolve the question of possession in the forcible entry cases. Undergirding the principle of litis pendentia is the theory that a party is not allowed to vex another more than once regarding the same subject matter and for the same cause of action. This theory is founded on the public policy that the same matter should not be subject of controversy in court more than once in order that possible conflicting judgments may be avoided, for the sake of the stability in the rights and status of persons. The MeTC of Valenzuela, Branch 82, recognized this doctrine when it dismissed Civil Case No. 6632 to avoid possibility of two contradictory decisions on the question of possession emanating from the DARAB and the trial court. In turn, the RTC was correct in finding that the issue of possession was inextricably intertwined with the agrarian dispute, an issue which was beyond the jurisdiction and competence of the inferior court to setlle. In so doing, the RTC deferred to the primary jurisdiction and administrative expertise of the DARAB to settle agrarian cases. Thus, we are constrained to conclude that under the concept of litis pendentia, the pendency of DARAB Case No. IVMM009995R served as a bar to the filing of Civil Cases Nos. 6632 and 6633. On the third issue, petitioners maintain that the petitioneraffiant who subscribed the requisite Affidavit of Nonforum Shopping understood that the issues pending resolution before the DARAB had no relation to petitioners' actions for forcible entry, and hence had seen no need to report anymore the pendency of the DARAB case. Moreover, private respondents claim that in their pleadings they early enough disclosed the pendency of the DARAB case to the courts hearing the ejectment cases. Hence, they aver that there was no violation whatsoever of the nonforum shopping requirements. Private respondents argue that petitioners' explanations on the matter amount to a mea culpa on account of wild speculation and assumption of the facts of the case. They ask us to affirm the findings below that petitioners violated the Court's Circular proscribing forum shopping. Supreme Court Administrative Circular No. 0494, imposing additional requisites in civil complaints, petitions, and other initiatory pleadings filed in all courts and agencies to prevent forum shopping, provides in part: EJECTMENT AND LEASE Mariel Angela Piedad Soriano
1. The plaintiff, petitioner, applicant or principal party seeking relief in the complaint, petition, application or other initiatory pleading shall certify under oath in such original pleading, or in a sworn certification annexed thereto and simultaneously filed therewith to the truth of the following facts and undertakings: (a) he has not theretofore commences any other action or proceeding involving the same issues in the Supreme Court, the Court of Appeals, or any other tribunal or agency; (b) to the best of his knowledge, no such action or proceeding is pending in the Supreme Court, the Court of Appeals, or any other tribunal or agency; (c) if there is any such action or proceeding which is either pending or may have been terminated, he must state the status thereof; and (d) if should thereafter learn that a similar action or proceeding has been filed or is pending before the Supreme Court, the Court of Appeals, or any other tribunal or agency, he undertakes to report that fact within five (5) days therefrom to the court or agency wherein the original pleading and sworn certificate contemplated herein have been filed. x x x 2. Any violation of this Circular shall be a cause for the dismissal of the complaint, petition, application or other initiatory pleading, upon motion and after hearing… That there was a DARAB case pending involving the same parties with the same subject matter at the time petitioners filed Civil Cases Nos. 6632 and 6633 is not contested. Petitioners admit that they assumed that the issues in the agrarian case and the forcible entry cases were different and hence saw no need to report the pendency of the former to the trial court in their certification of nonforum shopping. We fail to see the basis for this assumption. The records disclose that the issue of possession as raised in the forcible entry cases in necessarily included in the question of agricultural tenancy raised in the DARAB case. Note that petitioners actively participated in the latter case and thus, could not have been unaware that the possession of the subject fishponds or parts thereof was in issue before the Board. Petitioners' failure to see that paragraph 1(b), 1(c), or 1(d) of Administrative Circular No. 0494 applied to them is simply incomprehensible. We agree with the RTC in certifying under oath that they have no knowledge of any case pending before any other tribunal or agency involving the same issue raised in their forcible entry cases, petitioners were less than candid. To determine whether a party violated the rule against forum shopping, the test applied is whether the elements of litis pendentia are present or whether a final judgment in one case will amount to res judicata in another.23 Recall that as earlier discussed, the requisites of litis pendentia barred the filing of Civil Cases Nos. 6632 and 6633 given the pendency of DARAB Case No. IVMM009995R. Based thereon, the Regional Trial Court correctly dismissed the forcible entry cases on the additional ground of forum shopping.1âwphi1.nêt WHEREFORE, the instant petition is DENIED, and the Decision of the Regional Trial Court of Valenzuela, Branch 172, in Civil Cases Nos. 5093V97 and 5169V97 is AFFIRMED. Costs against petitioners. SO ORDERED.
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 153652 January 16, 2004 ALFREDO YASAY DEL ROSARIO, petitioner, vs. SPS. JOSE E. MANUEL and CONCORDIA MANUEL, represented by Attorneyinfact, PATRICIA ARIOLA, respondents. D E C I S I O N SANDOVALGUTIERREZ, J.: This is a petition for review on certiorari assailing the Court of Appeals Decision dated May 22, 2002 in CAG.R. SP No. 67902, entitled "Alfredo Yasay del Rosario, petitioner vs. Sps. Jose and Concordia Manuel, represented by Attorneyinfact, Patricia Ariola, MTC, Fourth Judicial Region, San Mateo, Rizal, and RTC, Fourth Judicial Region, Branch 77, San Mateo, Rizal." On August 12, 1999, spouses Jose and Concordia Manuel, respondents, filed with the Municipal Trial Court (MTC), San Mateo, Rizal a complaint1 for unlawful detainer against Alfredo Yasay del Rosario, petitioner, docketed as Civil Case No. 1360. They alleged that they are the true and lawful owners of a 251 square meter lot located at Sta. Ana, San Mateo, Rizal. Because of their compassion, they allowed petitioner, whose house was destroyed by a strong typhoon, to occupy their lot. They agreed that he could build thereon a temporary shelter of light materials. But without their consent, what he constructed was a house of concrete materials. In 1992, respondents asked petitioner to vacate the lot. This was followed by repeated verbal demands but to no avail, prompting them to bring the matter to the barangay. But the parties failed to reach an amicable settlement. On June 25, 1999, the barangay chairman issued a Certification to File Action. In his answer to the complaint, petitioner claimed that sometime in 1968, respondents allowed him to build his house on the lot, provided he would guard the premises to prevent landgrabbers and squatters from occupying the area. In 1995, when respondents visited this country, they agreed verbally to sell the portion on which his house was constructed. A year later, he made an offer to buy the 60 square meter portion occupied by him and to spend for its survey. But what respondents wanted to sell was the whole area containing 251 square meters. He then informed them that he would first consult his children and they said they will wait. Instead, they filed the instant complaint. On September 22, 2000, the trial court rendered a Decision in favor of respondents, thus: "WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffsspouses Jose and Concordia Manuel represented by their attorneyinfact Patricia Ariola and against defendant Alfredo Yasay del Rosario, ordering him and/ or all persons claiming rights under him to vacate the subject property covered by TCT No. N11399, and surrender possession thereof to the plaintiffs, to pay P500.00 per month as reasonable compensation for the use of said property from the date of filing of this Complaint on August 12, 1999 until the same is vacated and possession thereof surrendered to the plaintiffs and to pay the cost."2 On appeal, the Regional Trial Court (RTC) of San Mateo, Rizal rendered a Decision dated May 10, 2001 affirming in toto the Decision of the trial court. On November 29, 2001, herein petitioner filed with the Court of Appeals a petition for review, docketed as CA G.R. SP No. 67902. On May 22, 2002, Court of Appeals issued a Resolution dismissing the petition for having been filed out of time, to wit: "Considering the filing of the second motion for reconsideration is prohibited x x x hence, does not toll the running of the reglementary period to appeal; considering further that, the perfection of an appeal in the manner and within the period laid down by law is not only mandatory but also jurisdictional and failure to do so renders the questioned decision final and executory, depriving the appellate court or body of jurisdiction to alter the final judgment much less to entertain the appeal; considering finally that, in the instant case, petitioner who had fifteen (15) days from receipt of the Order dated 26 July 2001, denying his first motion for reconsideration within which to file a petition for review filed the present petition only on 29 November 2001, this Court resolves to DISMISS the instant petition for review, for having been filed out of time."3 Considering that the petition with the Court of Appeals was not seasonably filed, the instant petition should be dismissed outright. EJECTMENT AND LEASE Mariel Angela Piedad Soriano
Assuming arguendo that the petition before us is sufficient in form and substance, the same would still be dismissed for lack of merit. The petition raises the following issues: (1) whether or not the MTC has jurisdiction over the ejectment case; and (2) whether or not petitioner is a builder in good faith, hence, entitled to reimbursement under Article 448 of the Civil Code. Petitioner claimed that the trial court has no jurisdiction over the case considering that there is no allegation in the complaint that respondents have prior physical possession of the lot and that they were ousted therefrom by force, threat, strategy or stealth. Prior physical possession is not always a condition sine qua non in an ejectment case. We must distinguish the two kinds of ejectment, namely, forcible entry and unlawful detainer. In forcible entry, the plaintiff is deprived of physical possession of his land or building by means of force, intimidation, threat, strategy or stealth. In this light, he must allege and prove prior physical possession. In illegal detainer, the defendant unlawfully withholds possession after the expiration or termination of his right thereto under any contract, express or implied.4 What respondents filed is a complaint for unlawful detainer. Prior physical possession is not required. Hence, respondents need not allege the same in their complaint. As found by the trial court, petitioner’s possession of the land was by mere tolerance of the respondents. We have held in a number of cases that one whose stay is merely tolerated becomes a deforciant occupant the moment he is required to leave. 5 He is bound by his implied promise, in the absence of a contract, that he will vacate upon demand.6 Anent the second issue, petitioner is not a builder in good faith. Considering that he occupies the land by mere tolerance, he is aware that his occupation of the same may be terminated by respondents any time. WHEREFORE, the petition is hereby DENIED. The assailed Decision of the Court of Appeals is AFFIRMED. SO ORDERED. Vitug, (Chairman), Corona, and CarpioMorales, JJ., concur.
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
THIRD DIVISION G.R. No. 125799. August 21, 2003] DANILO CANSINO AND LINDA DE JESUS, Petitioners, v. COURT OF APPEALS, HON. JUDGE, RTC OF KALOOCAN CITY, BR. 120 AND SPS. FRANCISCO E. CASTRO and ROSARIO B. CASTRO and,CESAR L. CRUZ, SHERIFF IV, RTC KALOOKAN CITY, BR. 120, respondents. D E C I S I O N PUNO, J.: Having gone through the summary procedure in the Metropolitan Trial Court (MeTC), an appeal to the Regional Trial Court (RTC) and a petition for certiorari to the Court of Appeals (CA), this ejectment case is now before this Court on a Petition for Review on Certiorari. The case stemmed from a complaint for unlawful detainer filed by respondent spouses Francisco and Rosario Castro against Danilo Cansino, Linda de Jesus and Elena Mesa[1 before the Metropolitan Trial Court. The subject matter of the controversy is a parcel of land located at Maligaya Park Subdivision, Kalookan City. In their complaint, respondents alleged that petitioners, by strategy and stealth unlawfully constructed their respective houses inside plaintiffs() (herein respondents) aforementioned parcel of land.[2 In their answer with counterclaim, petitioners Cansino and de Jesus averred that their possession was premised upon the honest belief that the lot they were and are still occupying was a public land; that they had been in possession of the subject premises ever since 1977; and that the failure (of herein respondents) to allege when possession of defendants (herein petitioners) started and taken cognizance of by plaintiffs (herein respondents) created (sic) doubts as to the jurisdiction of the MeTC.[3 The MeTC took cognizance of the case and treated the complaint as one for ejectment under the Rules on Summary Procedure. It ordered the parties to submit their respective affidavits and those of their witnesses along with their other evidence. Thereafter, the MeTC in its decision dated August 12, 1994, dismissed the complaint holding that in an ejectment case, the plaintiff has the burden of proving prior physical possession of the property. Respondents failed to discharge the burden.[4 On appeal with the RTC of Kalookan City, Br. 120, the court, on January 11, 1995, affirmed in toto the decision of the MeTC. It held that respondents were not able to present evidence of their actual possession of the property prior to that of petitioners, while the latter were able to prove their possession of the property since 1977.[5 Respondents filed a motion for reconsideration where they appended more documentary evidence showing their ownership over the subject property, as well as the ownership and possession of their predecessorsininterest. On March 14, 1995, the RTC reversed its previous decision. It ruled that respondents were able to prove the ownership and possession of their predecessorsininterest, which dated back to 1964, way before the 1977 possession of petitioners. Moreover, it rejected the claim of petitioners that the subject land is public property since it has been proven that the lot is titled and the title has been transferred to respondents on January 29, 1993. The title being incontrovertible after a year, petitioners can no longer assail it. The court considered petitioners as intruders or squatters on the subject lot. [6 Thus, petitioners filed a petition for review with the Court of Appeals. They assailed the right of the RTC to decide the issue of ownership without any fair trial and the propriety of the action of the RTC in considering the documentary evidence attached by respondents in their motion for reconsideration which were not made part of the position paper they (respondents) previously submitted.[7 The Court of Appeals affirmed the ruling of the RTC. It held that petitioners were unable to substantiate their possession of the property. Their occupancy is at best due to the tolerance of the registered owners, private respondent spouses. Moreover, since respondents had prior legal possession of the property, they had in their favor priority of time that legally entitles them to stay in the said property. [8 With regard to the action taken by the RTC in considering the documentary evidence attached only in the motion for reconsideration, the appellate court ruled that under Section 5, Rule 135 of the Revised Rules of Court, the RTC has the inherent power to amend and control its process and orders so as to make them conformable to law and justice.[9 Petitioners brought the case at bar to this Court on a petition for review on certiorari. They raise the following issues: I WHETHER OR NOT SECTION 5, RULE 135 OF THE REVISED RULES OF COURT IS APPLICABLE IN A MOTION FOR RECONSIDERATION WHERE DOCUMENTS IN THE MOTION FOR RECONSIDERATION ARE NOT TO BE CONSIDERED AS EVIDENCE TO PROVE SUPERVENING EVENTS. II WHETHER OR NOT THE PRIVATE RESPONDENTS HAVE A CLEAR RIGHT TO POSSESS THE SUBJECT LAND.[10 EJECTMENT AND LEASE Mariel Angela Piedad Soriano
Anent the first issue, Section 5, Rule 135 of the Revised Rules of Court provides: Sec. 5. Inherent powers of courts. Every court shall have the power: x x x (g) To amend and control its process and orders so as to make them conformable to law and justice; x x x The Court of Appeals upheld the RTC in reconsidering its prior decision on the basis of new evidence attached to the motion for reconsideration on the ground that it is the inherent right of the court to amend and control its processes. It further ruled that procedural technicalities should not override substantial justice.11 We disagree. It is true that the rules provide that courts have the inherent power to amend their decisions to make them conformable to law and justice. This prerogative, however, is not absolute. The rules do not contemplate amendments that are substantial in nature. 12 They merely cover formal changes or such that will not affect the crux of the decision, like the correction of typographical or clerical errors. Courts will violate due process if they make substantial amendments in their decisions without affording the other party the right to contest the new evidence presented in a motion for reconsideration. Under Rule 37 of the Revised Rules of Court, a party may file a motion for reconsideration on the ground, among others, that x x x, the evidence is insufficient to justify the decision or final order, or the decision or final order is contrary to law.[13 It requires the motion to point out specifically the findings or conclusions of the judgment or final order which are not supported by the evidence or which are contrary to law, making specific reference to the testimonial or documentary evidence presented or to the provisions of law alleged to be violated.14 It is implicitly clear from Rule 37 that a motion for reconsideration cannot be used as a vehicle to introduce new evidence. Petitioners correctly contend that if respondents wanted to present further evidence, they should have filed a motion for new trial based on newly discovered evidence. However, for newly discovered evidence to warrant a new trial, (a) it must have been discovered after trial, (b) it could not have been discovered or produced at the trial despite reasonable diligence, (c) it must be material and not merely collateral, cumulative, corroborative or purely for impeaching a witness, merely important evidence being not enough, and (d) if presented, would probably alter the result of the action.15 In the case at bar, respondents attached for the first time in their motion for reconsideration, evidence to prove their ownership over the parcel of land subject matter of this controversy. This cannot be countenanced. For one, possession is the only issue in a case for unlawful detainer.16 More importantly, there is no justification for the delay in presenting said evidence. We note that although it was respondents who filed an appeal to the RTC, they failed to submit their memorandum as required by the said court.[17 It was only after the RTC rendered an unfavorable decision that respondents filed a motion for reconsideration and appended their new evidence. Piecemeal presentation of evidence is not in accord with orderly justice. But considering the totality of evidence, we still rule in favor of petitioners. Respondents appended to its motion for reconsideration the following evidence: Transfer Certificate of Title No. T45212 issued on August 16, 1972 in the name of the predecessorsininterest of respondents, Estrella Crisostomo and Azucena Bantug;[18 Transfer Certificate of Title No. T262332 issued on January 29, 1993 in the name of respondent spouses Francisco and Rosario Castro;19 Contract to Sell between Maligaya Park and Leticia Flores and Estrella Crisostomo dated May 4, 1962;[20 Location Plan showing the site of the contested parcel of land; 21 and Real Property Tax Receipts for the years 198822 and 1993.23 The titles presented by respondents do not necessarily prove their right to possession, especially since there is a separate case for the investigation of the true status of the land formerly in the name of Biyaya Corporation from where respondents and their predecessorsin interest obtained their title.24 Neither will the contract to sell and the location plan prove possession. Lastly, the tax receipts presented by respondents covered only the years 1988 and 1993. The failure of respondents to present the receipts covering the years before 1988 and between 1988 and 1993, despite the claim that they and their predecessorsininterest had possession over the property during these years, creates doubt as to the validity of their claim of prior possession. It is fundamental that complainants in an ejectment case must allege and prove that they had prior physical possession of the property before they were unlawfully deprived thereof by defendants.25 Respondents, being the complainants before the lower court, had the burden of proving their claim of prior possession. They, however, failed to prove their claim. In light of our resolution of the first issue which clears the question of prior possession, it is unnecessary to discuss the second issue since petitioners argument touches on the ownership of the lot subject matter of this controversy. As discussed, the case at bar is an ejectment EJECTMENT AND LEASE Mariel Angela Piedad Soriano
case where the only issue is prior possession of the lot. Any controversy with regard to ownership should be ventilated in a separate action. IN VIEW WHEREOF, the decision of the Court of Appeals is REVERSED. The decision of the Metropolitan Trial Court of Kalookan City, Branch 50 and the January 11, 1995 decision of the Regional Trial Court of Kalookan City, Branch 120 are REINSTATED. SO ORDERED.
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 146815 April 9, 2003 HEIRS OF PEDRO LAURORA and LEONORA LAURORA, petitioners, vs. STERLING TECHNOPARK III and S.P. PROPERTIES, INC., respondents. PANGANIBAN, J.: The owners of a property have no authority to use force and violence to eject alleged usurpers who were in prior physical possession of it. They must file the appropriate action in court and should not take the law into their own hands. The Case Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to set aside the June 27, 2000 Decision 2 and the January 22, 2001 Resolution3 of the Court of Appeals4 (CA) in CAGR SP No. 54667. The dispositive part of the Decision reads: "WHEREFORE, the [P]etition is GRANTED and the RTC [D]ecision dated 06 May 1999 and the RTC [O]rder dated 03 August 1999 are hereby REVERSED and SET ASIDE, and corollarily, the MCTC [D]ecision is AFFIRMED." 5 The assailed Resolution denied petitoners’ Motion for Reconsideration. The Facts The factual antecedents are summarized by the CA as follows: "In a [C]omplaint for Forcible Entry with Damages filed on 27 September 1997 before the Fifth Municipal Circuit Trial Court of Carmona and Gen. Mariano Alvarez, plaintiffs therein, x x x Pedro Laurora and Leonora Laurora [herein petitioners] alleged that they [were] the owners of Lot 1315G, SWD40763 of the Yaptinchay Estate with an area of 39,771 sq. meters and located in Carmona, Cavite. Pedro Laurora planted trees and has possessed the land up to the present. On 15 September 1997, [respondents] Sterling Technopark III and S.P. Properties, Inc. x x x through their Engr. Bernie Gatchalian bulldozed and uprooted the trees and plants, and with the use of armed men and by means of threats and intimidation, succeeded in forcibly ejecting [petitioners]. As a result of their dispossession, [petitioners] suffered actual damages in the amount of P3,000,000.00 and P10,000.00 as attorney’s fees. "In their [A]nswer to the [C]omplaint, [respondents] averred that [petitioners were] not the owners of the land because they disposed of it sometime in 1976 as shown by legal documents. On 02 April 1969, the Land Authority issued an order of award in favor of [petitioners], approving the application of Pedro Laurora to buy the subject Lot 1315G from the government. On 01 March 1974, [petitioners] requested the Department of Agrarian Reform for the transfer of the lot to Juan Manaig. Favorably acted upon, the DAR issued a permit to transfer dated 03 June 1975 through its Regional Director Benjamin R. Estrellado. On 03 July 1975, Juan Manaig, as transferee and buyer, paid the required amount of P10,643.65 under Official Receipt No. 8304707 to the government as full payment for the transfer of said lot to him. On 26 March 1976, the [petitioners] as sellers and witnessed by their sons, Efren Laurora and Dominador Laurora, executed a ‘Kasulatan ng Paglilipatan ng Lupa’ transferring the land to Juan Manaig as buyer. On 11 June 1976, the [petitioners] again witnessed by their sons, Efren and Dominador, executed a ‘Kasulatan ng Bilihang Tuluyan’ or Deed of Sale wherein they sold Lot 1315G including all improvements therein, in favor of Juan Manaig. The Deed of Absolute Sale was approved by the Department of Agrarian Reform on 14 June 1976 in ‘DAR Approval of Transfer of Rights’ signed by DAR Regional Director, Benjamin R. Estrellado. After the approval of the sale from the [petitioners] to Juan Manaig, the latter paid its real estate taxes. The tax declarations of the land in the name of its previous owners, Yaptinchays, were cancelled and transferred in the name of [petitioner] Pedro Laurora as ownertransferee. Thereupon, the heirs of the late ‘JUAN MANAIG’ sold the land to Golden Mile Resources Development Corporation which likewise sold it to [respondent] S. P. Properties, Inc. "After summary proceedings in the MCTC, x x x, a judgment was rendered dismissing the complaint. The case was elevated to the Regional Trial Court. In due course, the said court rendered a decision reversing the MCTC judgment. x x x"6 Ruling of the Court of Appeals EJECTMENT AND LEASE Mariel Angela Piedad Soriano
The CA reversed the Regional Trial Court (RTC) and reinstated the Order of dismissal issued by the Municipal Circuit Trial Court (MCTC). It held that there was no evidence to support the claim of petitioners to the prior physical possession of the property. The evidence allegedly showed that they had already sold the land with the approval of the Department of Agrarian Reform (DAR). Accordingly, their subsequent entry into and possession of the land constituted plain usurpation, which could not be the source of any right to occupy it. Being planters in bad faith, they had no right to be reimbursed for improvements on the land, in accordance with Article 449 of the New Civil Code. Hence, this Petition.7 The Issue In their Memorandum,8 petitioners raise this sole issue for our consideration: "x x x [W]hether [p]rivate [r]espondent[s] ha[ve] a valid and legal right to forcibly eject petitioners from the premises despite their resistance and objection, through the use of arm[ed] men and by bulldozing, cutting, and destroying trees and plants planted by petitioners, without court order, to the damage and prejudice of the latter."9 The Court’s Ruling The Petition is meritorious. Main Issue: Physical Possession of the Land The only issue in forcible entry cases is the physical or material possession of real property possession de facto, not possession de jure.10 Only prior physical possession, not title, is the issue.11 If ownership is raised in the pleadings, the court may pass upon such question, but only to determine the question of possession.12 The ownership claim of respondents upon the land is based on the evidence they presented. Their evidence, however, did not squarely address the issue of prior possession. Even if they succeed in proving that they are the owners of the land,13 the fact remains that they have not alleged or proved that they physically possess it by virtue of such ownership. On the other hand, petitioners’ prior possession of the land was not disputed by the CA, which merely described it as usurpation.14 We stress that the issue of ownership in ejectment cases is to be resolved only when it is intimately intertwined with the issue of possession,15 to such an extent that the question of who had prior possession cannot be determined without ruling on the question of who the owner of the land is.16 No such intertwinement has been shown in the case before us. Since respondents’ claim of ownership is not being made in order to prove prior possession, the ejectment court cannot intrude or dwell upon the issue of ownership.17 Notwithstanding the actual condition of the title to the property, a person in possession cannot be ejected by force, violence or terror not even by the owners.18 If such illegal manner of ejectment is employed, as it was in the present case, the party who proves prior possession in this case, petitioners can recover possession even from the owners themselves. 19 Granting arguendo that petitioners illegally entered into and occupied the property in question, respondents had no right to take the law into their own hands and summarily or forcibly eject the occupants therefrom. Verily, even if petitioners were mere usurpers of the land owned by respondents, still they are entitled to remain on it until they are lawfully ejected therefrom. Under appropriate circumstances, respondents may file, other than an ejectment suit, an accion publiciana a plenary action intended to recover the better right to possess; 20 or an accion reivindicatoria an action to recover ownership of real property.21 The availment of the aforementioned remedies is the legal alternative to prevent breaches of peace and criminal disorder resulting from the use of force by claimants out to gain possession.22 The rule of law does not allow the mighty and the privileged to take the law into their own hands to enforce their alleged rights. They should go to court and seek judicial vindication. WHEREFORE, the Petition is GRANTED and the assailed Decision REVERSED and SET ASIDE. No costs. SO ORDERED.
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 124148 May 20, 2004 PACITA G. VARONA, ORLANDO AYSON, MILA CASTILLOSI and ANGELITA P. SABINO, petitioners, vs. COURT OF APPEALS and EVANGELINE LIM, respondents. D E C I S I O N AZCUNA, J.: Before us is a petition for review on certiorari of the decision of the Court of Appeals, in CAG.R. SP No. 37806, affirming the decision of the Regional Trial Court of Angeles City, Branch 59, in Civil Cases Nos. 77677770. The facts, as stated by the Court of Appeals, are as follows: On February 16, 1994, petitioners Orlando Ayson, Pacita Varona, Mila CastilloSi and Angelita Sabino were issued Mayor’s Permits to occupy Market Stalls Nos. 311, 312, 313, 314, respectively, in the New Pampang Public Market in Angeles City.1 By virtue of the Mayor’s Permits issued to them, petitioners sought to evict private respondent who was then the occupant of the disputed stalls. Thus, on March 8, 1994, petitioners Orlando Ayson and Pacita Varona filed Complaints for ejectment against private respondent before the Municipal Trial Court of Angeles City, Branch I, docketed as Civil Cases Nos. 9429 and 9430 respectively.2 In her Answers filed on March 25, 1994, private respondent alleged, inter alia, the following: That ever since the New Pampang Public Market commenced its operation, she has been the lawful and actual occupant of the subject market stalls; that petitioners’ occupancy of the market stalls was by virtue only of the Mayor’s Permits issued to them, which by no means automatically vest upon them the right to occupy the disputed market stalls since one has first to apply and secure an approval from the Market Administrator and a certification to the effect that the applicant is a legitimate stallholder which requirements have not been complied with by petitioners; that presently the City Government of Angeles is undertaking the recall and revocation of the permits issued to petitioners.3 On March 22, 1994, the Mayor’s Permits of petitioners Pacita Varona, Orlando Ayson, Mila CastilloSi and Angelita Sabino were revoked by Mayor Edgardo Pamintuan4 on the following grounds: (1) Their names did not appear in the Master List of Stallholders at said market; and (2) they did not apply for and secure from the Market Administrator the required clearance prior to the issuance of said permits. On March 29, 1994, despite revocation of their Mayor’s Permits, petitioners Mila CastilloSi and Angelita Sabino, invoking the same cause of action as that of Ayson and Varona, also filed Complaints for ejectment against private respondent before the same Municipal Trial Court, docketed as Civil Cases Nos. 9434 and 9435, respectively.5 In her Answers dated May 13, 1994, private respondent reiterated her allegations in the Answers she filed to the Complaints of petitioners Ayson and Varona, with the new allegation that the Mayor’s Permits issued to petitioners were already recalled or revoked on March 22, 1994.6 The Municipal Trial Court rendered four identical decisions7 (except for the names of the plaintiffs and the stall numbers involved) in favor of petitioners, ordering private respondent to: (1) Vacate Stalls Nos. 311, 312, 313 and 314 (Sarisari Section) of the New Pampang Public Market, Angeles City; (2) pay each of the petitioners attorney’s fee of P10,000, appearance fee of P500 per appearance, and P1,000 as reasonable fee for private respondent’s continued possession of the subject market stalls from February, 1994, until she finally vacates the stalls; and (3) pay the costs of the suit. Private respondent appealed the said decisions to the Regional Trial Court of Angeles City, docketed as Civil Cases Nos. 7767, 7768, 7769 and 7770, contending, among other things, that the Municipal Trial Court has no jurisdiction over the complaints; that the complaints have become moot and academic; and that the Municipal Trial Court rendered judgment in favor of the plaintiffs (petitioners) without factual and legal basis. The Regional Trial Court rendered a Joint Decision reversing and setting aside the decisions of the Municipal Trial Court, the dispositive portion of which reads: WHEREFORE, the judgment of the lower court particularly Municipal Trial Court, Branch I, Angeles City, in Civil Cases Nos. EJECTMENT AND LEASE Mariel Angela Piedad Soriano
9429; 9430; 9434; and 9435 (RTC Cases Nos. 7767, 7768, 7769 and 7770), are hereby reversed and set aside, and a new decision is hereby rendered, that appellant Evangeline Lim has a better right than the appellees to stay in possession of the market stalls of the Pampang Public Market particularly Stalls Nos. 312, 313, 314 and 315, here in Angeles City, without prejudice on the part of the appellees to file an action for recognition of their preferred rights to file an ordinary action in the proper forum. The supersedeas bond filed by the appellant is hereby dissolved and the amount of the same be reimbursed to the appellant, as well as the monthly rentals she had deposited. SO ORDERED.8 The Regional Trial Court held that the rule on forcible entry and unlawful detainer is not applicable in the instant case, there being no proof adduced by petitioners that private respondent forcibly entered and occupied the market stalls in question by intimidation, threat, strategy or stealth, or that the private respondent originally acquired possession of the stalls lawfully and thereafter unlawfully withheld the possession of the stalls, after the expiration or termination of the detainer’s right to hold possession by virtue of a contract, express or implied.9 Moreover, the Regional Trial Court found that petitioners Ayson and Varona filed Civil Cases Nos. 9429 and 9430 respectively in the Municipal Trial Court on March 8, 1994. On March 22, 1994, their Mayor’s Permits were revoked, pending trial in the inferior court. Hence, the court ruled that said cases are deemed moot and academic due to supervening event.10 In regard to petitioners CastilloSi and Sabino, the Regional Trial Court found that they filed Civil Cases Nos. 9434 and 9435 respectively in the inferior court on September 14, 1994 (should be March 29, 1994), when the Mayor’s Permits of said petitioners were already revoked on March 22, 1994. The court thus ruled that they have no more cause of action and their cases are moot and academic.11 Petitioners filed a petition for review of the Joint Decision of the Regional Trial Court in the Court of Appeals. The Court of Appeals ruled: It should be noted that in all the four (4) ejectment cases filed by petitioners against private respondent, their common cause of action is premised on the identical proposition that they are the rightful stallholders of the market stalls in the New Pampang Public Market by virtue of the Mayor’s Permits issued to them on February 16, 1994. As earlier stated, petitioners’ right to occupy the disputed market stalls was terminated by the revocation of their Mayor’s permits on March 22, 1994. And since there is nothing in the records to show that herein petitioners were subsequently issued new Mayor’s permits nor was there a showing that their revoked permits were reinstated, petitioners, therefore, [have] no cause of action against herein private respondent. Considering, therefore, that since the basis of petitioners’ cause of action ceased to exist, no practical or useful purpose would then be served by passing on the merits of the instant petition. The Court of Appeals pronounced judgment, thus: WHEREFORE, the instant petition for review is hereby DISMISSED. Accordingly, the decision of the RTC, Angeles City, Branch 59 in Civil Cases Nos. 77677770 is AFFIRMED. SO ORDERED.12 Hence, petitioners filed the instant petition. In their Memorandum, petitioners raised these issues: 1. WHETHER PETITIONERS AS TRANSFEREES IN GOOD FAITH HAVE VALID CAUSE OF ACTION AGAINST THE PRIVATE RESPONDENT. 2. WHETHER THE FINDINGS OF FACTS CONTAINED IN THE COURT OF APPEALS’ DECISION SUBJECT MATTER OF THE PETITION FOR REVIEW ON CERTIORARI ARE SUPPORTED BY SUBSTANTIAL EVIDENCE AS BASIS THEREOF.13 The main issue is whether or not the Municipal Trial Court had jurisdiction over the cases filed by petitioners, which have been treated as ejectment cases. The jurisdiction of a court over a specific case, as well as the nature of the action, is determined by the averments in the Complaint. 14 The EJECTMENT AND LEASE Mariel Angela Piedad Soriano
pertinent averments, found to be identical, in the Complaints of petitioners are as follows: x x x x x x x x x 2. That the plaintiff is the rightful and lawful stallholder of Stall No. x x x of the New Pampang Public Market, Angeles City; he was issued and he possesses the corresponding and necessary Mayor’s Permit and such other necessary permits, papers and/or documents relative to the said stall x x x; 3. That the plaintiff has been and is in dire need of the aforesaid stall and he accordingly requested and advised, both orally and in writing, the defendants to vacate the same, but the latter unreasonably and unjustifiably failed and refused, and still fail and refuse to vacate the subject stall, to the damage and prejudice of herein plaintiffs; a copy of a demand letter is hereto attached x x x; x x x x x x x x x 5. That due to the unreasonable and unjustifiable failure and refusal of the defendants to vacate the aforesaid stall, the plaintiff was constrained to file the instant action x x x15 In an action for forcible entry, two allegations are mandatory for the municipal court to acquire jurisdiction: First, the plaintiff must allege his prior physical possession of the property.16 Second, he must also allege that he was deprived of his possession by any of the means provided for in Section 1, Rule 7017 of the Rules of Court, namely: force, intimidation, threats, strategy, and stealth. 18 The action must be filed against the intruder within one year from illegal entry.19 In the instant case, petitioners did not allege in their Complaints that they were in prior physical possession of the subject market stalls and that private respondent deprived them of possession thereof through force, intimidation, threat, strategy or stealth. Hence, this case is not one of forcible entry. In an action for unlawful detainer, which must be filed within one year from the date of the last demand, one unlawfully withholds possession of any land or building after the expiration or termination of his right to hold possession under any contract, express or implied.20 The possession by defendant is originally lawful but becomes illegal by reason of the termination of his right of possession under his contract with the plaintiff.21 It is settled that a complaint for unlawful detainer is sufficient if it alleges that the withholding of possession or the refusal to vacate is unlawful without necessarily employing the terminology of the law.22 In this case, petitioners did not have any contract, express or implied, with private respondent for the possession of the subject market stalls. Hence, there can be no expiration or termination of private respondent’s right of possession over the subject stalls, and consequently, no unlawful withholding of possession thereof from petitioners. Moreover, it was undisputed by petitioners that the subject market stalls are the properties of the local government; that private respondent is a holder of a Mayor’s Permit in 1993 that was not renewed, but not revoked by the Office of the City Mayor, and that no notice to vacate was initiated by the local government.23 In addition, although petitioners were issued Mayor’s Permits to manage and operate a sarisari store in the subject market stalls of the Pampang Public Market in Angeles City from February 16, 1993 (should be 1994) up to December 31, 1994, said permits were revoked by the City Mayor on March 22, 1994. Based on the foregoing, this case is also not one of unlawful detainer. Since the complaints did not satisfy the jurisdictional requirements to constitute a valid cause of action for forcible entry or unlawful detainer, the Municipal Trial Court had no jurisdiction over the cases filed by petitioners. Accordingly, the Regional Trial Court should have simply reversed and set aside the decision of the Municipal Trial Court for lack of jurisdiction. The Court of Appeals, therefore, erred in affirming in full the decision of the Regional Trial Court, since the latter had no jurisdiction to render a decision of its own in the case and to state that the private respondent had a better right of possession over the petitioners. WHEREFORE, the petition is hereby GRANTED. The decision of the Court of Appeals in CAG.R. SP No. 37806 is MODIFIED in that the joint decision of the Regional Trial Court of Angeles City, Branch 59, in Civil Cases Nos. 77677770, is affirmed only insofar as it reversed and set aside the decisions of the Municipal Trial Court of Angeles City, Branch I, in Civil Cases Nos. 9429, 9430, 9434 and 9435, for lack of jurisdiction. Costs de oficio. SO ORDERED.
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
Republic of the Philippines SUPREME COURT Baguio City SECOND DIVISION G.R. No. 120941 April 18, 1997 NENA DE GUZMAN, petitioner, vs. COURT OF APPEALS, and IGNACIO RANESES, ET AL., respondents. PUNO, J.: This is a petition for review under Rule 45 of the Rules of Court to set aside the decision of the Court of Appeals in CA G.R. No. 40738 CV entitled Nena de Guzman v. Ignacio Raneses, Isagani Raneses and Hon. Lilian DinulosPamontongan, which affirmed the decision of Branch 76 of the Regional Trial Court of San Mateo, Rizal, ordering petitioner to vacate the premises subject of the petition. 1 The facts show that on July 6, 1988, an ejectment case, dated April 15, 1988 and docketed as Civil Case No. 717, was filed by private respondents Isagani and Ignacio Raneses against petitioner Nena de Guzman before the Municipal Trial Court of San Mateo, Rizal. 2 It was alleged that in 1986, petitioner, through stealth, unlawfully constructed a house within the 4.5 hectare lot owned by private respondents in Labahan, San Mateo, Rizal. 3 Despite receipt of two demand letters from private respondents, petitioner refused to vacate the premises. On July 27, 1988, a summons and a copy of the complaint were served on petitioner through her daughter Nancy de Guzman, a person of sufficient age and discretion. When petitioner failed to file her answer within the reglementary period, private respondents moved for summary judgment. 4 On August 17, 1988, a judgment by default was rendered by Municipal Trial Court Judge Apolinar T. Antazo ordering petitioner to vacate the disputed lots and to pay the private respondents P2,000.00 as attorney's fees and the costs of suit. 5 On October 18, 1988, the Municipal Trial Court issued a Writ of Execution against the petitioner. On October 27, 1988, petitioner's counsel filed a Motion for Reconsideration and/or to Set Aside the Decision. The Municipal Trial Court denied the Motion and granted the Writ of Execution. On January 19, 1989, petitioner filed with the Regional Trial Court of San Mateo, Rizal a Petition for Relief from Judgment, Injunction and Damages, docketed as Civil Case No. 540SM. Petitioner argued that she was denied due process of law because the summons was not properly served on her. 6 Allegedly, the deputy sheriff resorted to substituted service of summons without exerting any effort to find the petitioner. She also assailed the jurisdiction of the Municipal Trial Court to try the forcible entry case on the ground that the complaint was filed two years after her alleged unlawful entry into the premises. On February 23, 1989, private respondents filed their answer to the petition. After giving due course to the petition, the Regional Trial Court, on July 10, 1992, rendered its decision sustaining petitioner's contention that the service of summons was improper and the ejectment suit was filed out of time. It ruled that to enable the Municipal Trial Court to acquire jurisdiction over the person of the petitioner through substituted service of summons, it is necessary to show the impossibility of personal service which should be explained in the proof of service. 7 It also found undisputed that the forcible entry case was filed two years after the alleged occupation of the land through stealth by petitioner; hence, the action has prescribed. The Regional Trial Court further received evidence on the ownership of the disputed lot. 8 It held that the evidence showed that petitioner acquired her "rights" to the property by purchase from persons who were mere tenants on the property while private respondents' claim over the property was supported by documentary proofs of ownership. 9 Thus, it ordered petitioner to vacate the lot in dispute. Within the reglementary period, petitioner, through counsel, filed her appeal with the Court of Appeals contending that: THE TRIAL COURT ERRED IN DECIDING THE MERITS OF THE CASE AT ONCE WITHOUT ISSUING ANY PRIOR ORDER SETTING ASIDE THE DECISION OF THE MUNICIPAL TRIAL COURT. THE TRIAL COURT ERRED IN NOT DISMISSING THE FORCIBLE ENTRY CASE (PRINCIPAL ACTION) FILED BY THE APPELLEES AFTER IT DECLARED THAT THE SAID ACTION WAS FILED OUT OF TIME AND THAT THE LOWER COURT HAD NO JURISDICTION OVER THE SAME. THE TRIAL COURT ERRED IN RESOLVING THE ISSUE OF OWNERSHIP AND DECLARING THAT EJECTMENT AND LEASE Mariel Angela Piedad Soriano
APPELLEES ARE THE OWNERS OF THE PROPERTY SUBJECT OF THE EJECTMENT SUIT AND THAT THEY ARE ENTITLED TO ITS POSSESSION. On January 24, 1995, the Court of Appeals sustained the decision of the Regional Trial Court. It held that: (1) petitioner chose the wrong remedy when it filed its petition for relief from judgment for there was no indication of fraud, accident, mistake or excusable negligence on her petition which would merit relief from the decision of the Municipal Trial Court. It ruled that petitioner's proper remedy was appeal, and since it did not do so, the decision of the Municipal Court became final and executory; 10 and (2) petitioner failed to prove her ownership or any right to possess the disputed lot for her predecessorininterest was a mere squatter. 11 Petitioner's Motion for Reconsideration was denied in a Resolution dated June 27, 1955. Hence, this appeal with the following assignments of error: THE RESPONDENT COURT DECIDED A QUESTION OF SUBSTANCE NOT IN ACCORD WITH LAW AND THE APPLICABLE DECISIONS OF THIS HONORABLE COURT IN NOT RULING THAT THE REGIONAL TRIAL COURT ERRED IN NOT DISMISSING THE FORCIBLE ENTRY CASE (PRINCIPAL ACTION) AFTER IT DECLARED THAT THE SAID ACTION WAS FILED OUT OF TIME AND THAT THE LOWER COURT HAD NO JURISDICTION OVER THE SAME. THE RESPONDENT COURT DECIDED A QUESTION OF SUBSTANCE NOT IN ACCORD WITH LAW OR THE APPLICABLE DECISION OF THE HONORABLE COURT IN AFFIRMING THE DECISION OF THE REGIONAL TRIAL COURT ON THE MATTER OF POSSESSION OVER THE SUBJECT PROPERTY. The petition is meritorious. It is clear that petitioner was denied due process as she was not properly summoned before the Municipal Trial Court rendered judgment against her. It is also indubitable on the face of the Complaint for forcible entry that the action had already prescribed. The Complaint dated April 15, 1988 alleged that petitioner entered the property by stealth sometime in 1986. We have ruled that "forcible entry and unlawful detainer are quieting processes and the oneyear time bar to the suit is in pursuance of the summary nature of the action. 12 The one year period is counted from the time the entry by stealth was made by the defendant. 13 After the lapse of the oneyear period, the remedy of the party dispossessed of a land is to file an "accion publiciana." 14 Consequently, the respondent court committed reversible error when it sustained the ruling of the Regional Trial Court upholding the claim of ownership of the private respondents. IN VIEW WHEREOF, the Decision of the respondent Court of Appeals is set aside. The Complaint docketed as Civil Case No. 717 filed in the Municipal Trial Court of San Mateo, Rizal is ordered dismissed. No costs. SO ORDERED.
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 152145 March 30, 2004 SALUD D. LOPEZ, REMEDIOS LOPEZMARZAN, ROSE LOPEZCO, AMADO D. LOPEZ, CYNTHIA LOPEZ PORTUGAL, JOSE D. LOPEZ JR., and MAY LOPEZ RUEDA represented by SALUD D. LOPEZ, petitioners, vs. ROBERT P. DAVID JR. and CLEOPATRA DAVID CAMPORUIZ, respondents. D E C I S I O N PANGANIBAN, J.: Ejectment proceedings must observe jurisdictional requirements to complement their summary nature. Among them is the oneyear bar within which to bring the suit. After the lapse of this period, plaintiffs can no longer avail themselves of the summary suits in the Metropolitan Trial Court (MeTC) or the Municipal Trial Court (MTC), but must litigate in the Regional Trial Court in an ordinary action to recover possession. The Case Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to set aside the April 26, 2001 Decision 2 and the February 5, 2002 Resolution3 of the Court of Appeals (CA) in CAGR SP No. 59724. The assailed Decision disposed as follows: "WHEREFORE, the petition is GIVEN DUE COURSE. The appealed decision of the Regional Trial Court of Quezon City (Branch 95) is REVERSED and SET ASIDE and another rendered DISMISSING the ejectment case."4 On the other hand, the challenged Resolution denied petitioners’ Motion for Reconsideration. The Facts The facts of the case are narrated by the CA as follows: "Subject of an action for ejectment before the Metropolitan Trial Court [MeTC] of Quezon City (Branch 38) was a 540 square meter land (or ‘subject property’), located at No. 174 Sct. Fuentebella, Quezon City and covered by TCT No. RT109698 (26613) in the name of Jose C. Lopez (or ‘Lopez’). "The action was instituted on October 2, 1996 by Salud D. Lopez, Remedios LopezMarzan, Rose LopezCo, Amado D. Lopez, Cynthia LopezPortugal, Jose D. Lopez, Jr. and May LopezRueda [or ‘petitioners’] against Robert P. David and Cleopatra David CampoRuiz [or ‘respondents’]. It was predicated on the averments that [petitioners] are the owners of the subject property which was purchased from the People’s Homesite and Housing Corporation by Lopez, deceased husband of [petitioner] Salud D. Lopez (or ‘Salud’) and father of the rest of the [petitioners]; that in 1954, upon her request, Cirila Sadsad Vda. De David (or ‘Cirila’), Salud’s mother and [respondents’] grandmother, was allowed by Salud to build a residential house on the subject property and to stay thereon until she could find a suitable residence of her own; that upon Cirila’s death, [respondents] continued her occupancy of the subject property; that the possession of Cirila and [respondents] of the subject property, without paying rentals and a written contract, was upon tolerance of Salud; that [petitioners] withdrew their consent to [respondents] occupancy of the subject property per their lawyer’s letter dated August 10, 1995 demanding of them to vacate the same on or before September 15, 1995, which [respondents] did not heed. "In their defense, [respondents] alleged that the subject property is owned in common by Cirila’s children, Salud, Robert S. David, Sr. (father of [respondent] Robert P. David) and Celestina S. David (mother of the other [respondent]); that the subject property was placed in the name of Lopez upon the agreement that it would be held in trust for Cirila’s children; and that Salud, Ligaya S. David (mother of [respondent] Robert P. David) and Celestina S. David built a threedoor apartment on the subject property which equally belongs to them. "On August 15, 1997, the [MeTC] rendered a decision, the dispositive portion of which reads: ‘WHEREFORE, premises considered, judgment is hereby rendered in favor of [petitioners] and against [respondents]. Accordingly, the
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
latter is hereby ordered as follows: a) To vacate the disputed property, specifically located at No. 174 Sct. Fuentebella St., Diliman, Quezon City and completely surrender possession thereof to [petitioners]; b) To pay [petitioners] the amount of P10,000.00 as a reasonable amount of compensation or rental for the use and occupancy thereof per unit each month, to be reckoned from September 15, 1995 until they shall have vacated the same; c) To pay [petitioners] the sum of P10,000.00 as and for attorney’s fees; and d) To pay the costs of suit. The counterclaim of [respondents] is hereby dismissed for lack of merit. ‘SO ORDERED.’ "Petitioners appealed to the Regional Trial Court (or ‘RTC’) of Quezon City (Branch 95) which, on December 17, 1999, rendered a decision affirming en toto that of the [MeTC]. x x x."5 Ruling of the Court of Appeals The CA found that the MeTC erred in taking cognizance of the ejectment suit, since the case had been filed beyond one year from the withholding of possession.6 The appellate court ruled thus: "It appears that pursuant to the demand letter dated August 10, 1995 of [petitioners’] lawyer, [respondents] were given until September 15, 1995 within which to vacate the subject property and surrender possession thereof to [petitioners]. Under the situation, [respondents’] possession became unlawful on September 16, 1995, or upon expiration of the grace period, when they continued occupying the subject property. However, the ejectment suit was only instituted on October 2, 1996, or more than one year from expiration of the period given [respondents] to vacate the subject property. "The oneyear period provided for in Sec. 1, Rule 70 of the 1997 Rules of Civil Procedure commences from accrual of the cause of action or from the unlawful withholding of possession of the realty. In an action for unlawful detainer, as in the case at bench, it is counted from the last letter of demand to vacate. "Since the ejectment suit was instituted after a year from the demand to vacate, it is an accion publiciana which is cognizable by the RTC. Accion publiciana is the plenary action to recover the right of possession when the dispossession has lasted for more than one year. "Consequently, the MTC has no jurisdiction over the subject matter of the action. And in affirming the decision of the MTC, the RTC had committed a palpable error and/or had acted with grave abuse of discretion amounting to lack or excess of jurisdiction."7 (Citations omitted) In denying petitioners’ Motion for Reconsideration,8 the CA noted that "among the affirmative defenses pleaded in the Answer was that ‘this Honorable Court does not have any jurisdiction over the case’ because the real issue is ownership, while in the [pretrial] brief, [respondents] posed the issue of whether the court of origin ‘has jurisdiction over the subject matter of the case considering that there is no lessorlessee relationship between the parties."9 Hence, this Petition.10 The Issue In their Memorandum, petitioners raised this sole issue for our consideration: "Whether the Honorable Court of Appeals erred in dismissing the case for ejectment [on] the ground of lack of jurisdiction despite the submission of respondents to the MTC and RTC and all the proceedings therein."11 The Court’s Ruling The Petition is bereft of merit. Sole Issue: Jurisdiction Petitioners contend that, having participated in the trial of the case and having belatedly raised the issue of jurisdiction for the first time on
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
appeal with the CA, respondents are estopped from questioning the jurisdiction of the MeTC. Jurisdiction Lies with the RTC Wellsettled is the rule that the jurisdiction of the court and the nature of the action are determined by the averments in the complaint. 12 To give the court jurisdiction to effect the ejectment of an occupant or a deforciant from the land, it is necessary that the complaint should embody a statement of facts that brings the party clearly within the class of cases for which the statutes provide a remedy, as these proceedings are summary in nature.13 On its face, the complaint must show enough ground for the court to assume jurisdiction without resort to parol testimony.14 Pertinent allegations in petitioners’ complaint are as follows: "3. That [petitioners] x x x are coowners of a parcel of land located at Diliman, Quezon City x x x; "4. That sometime in 1954, [petitioner] SALUD D. LOPEZ’s mother, CIRILA SADSAD Vda. DE DAVID, requested herein [petitioners] to allow the former to temporarily build a residential house at [petitioners’] property and stay in the premises until her mother shall [have] found a suitable residence of her own; "5. That since then, [petitioners] allowed said Cirila David to occupy the premises without paying monthly rent and without the benefit of a written contract but thru sheer tolerance of the [petitioners]; "6. That upon the death of [petitioner] Salud D. Lopez’s mother, [respondents] continued to occupy the subject premises without paying any rentals and were allowed to continue to occupy two (2) separate units thru sheer generosity and mere tolerance of herein [petitioners]; "7. That subsequently, [petitioners] withdrew their consent and repeated demands were made upon [respondents] to vacate the subject premises but [respondents] refused and failed to heed the demand violative of [petitioners’] preferential right of possession over the subject 2 units; "8. That on August 4, 1995, [petitioners] were constrained to refer the matter to their previous lawyer for appropriate legal action, to which a letter of demand was sent to [respondents] to vacate the premises but x x x the latter refused x x x to vacate the subject premises; x x x"15 To summarize, petitioners aver that (1) they are the owners of the property; (2) they allowed respondents to occupy it by tolerance; (3) they withdrew their consent; and (4) they demanded that respondents leave the property, but the latter refused to do so. Based on the foregoing averments, the case at bar involves unlawful deprivation or withholding of possession. Hence, it could either be one for unlawful detainer cognizable by the MeTC under Rule 70 or one for accion publiciana, which is cognizable by the regional trial court.16 The Complaint filed by petitioners alleges that the demand letter required respondents to leave on September 15, 1995. The ejectment case was filed on September 24, 1996.17 Thus, the MeTC had no jurisdiction to hear the case. Under Section 1 of Rule 70,18 the oneyear period within which a complaint for unlawful detainer can be filed should be counted from the date of demand, because only upon the lapse of that period does the possession become unlawful.19 In the present case, it is undisputed that petitioners’ Complaint was filed beyond one year from the time that respondents’ possession allegedly became unlawful. We have ruled that "forcible entry and unlawful detainer are quieting processes and the oneyear time bar to the suit is in pursuance of the summary nature of the action."20 Thus, we have nullified proceedings in the MeTC when it improperly assumed jurisdiction of a case in which the unlawful deprivation or withholding of possession had exceeded one year.21 After the lapse of the oneyear period, the suit must be commenced in the RTC via an accion publiciana. 22 Accion publiciana is a suit for recovery of the right to possess. It is an ordinary civil proceeding to determine the better right of possession of realty independently of title.23 It also refers to an ejectment suit filed after the expiration of one year from the accrual of the cause of action or from the unlawful withholding of possession of the realty.24 The CA was thus correct in declaring that jurisdiction belonged to the RTC. Estoppel Does Not Apply It is settled that any decision rendered without jurisdiction is a total nullity and may be struck down at any time, even on appeal before this Court.25 Indeed, the general rule is that a question of jurisdiction may be raised at any time, provided that doing so does not result in the mockery of the tenets of fair play.26 An exception to this rule arises when the party is barred by estoppel, in which case the issue of EJECTMENT AND LEASE Mariel Angela Piedad Soriano
jurisdiction may not be raised.27 In bringing up the issue of estoppel, petitioners principally anchor their argument on Tijam v. Sibonghanoy. 28 Applying the rule on estoppel by laches, we declared therein that the failure to raise the question of jurisdiction at an earlier stage barred the party from questioning it later. We explained: "A party may be estopped or barred from raising a question in different ways and for different reasons. Thus, we speak of estoppel in pais, of estoppel by deed or by record, and of estoppel by laches. "Laches, in a general sense, is failure or neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it. "The doctrine of laches or of ‘stale demands’ is based upon grounds of public policy which requires, for the peace of society, the discouragement of stale claims and, unlike the statute of limitations, is not a mere question of time but is principally a question of the inequity or unfairness of permitting a right or claim to be enforced or asserted."29 We have applied this doctrine to succeeding cases by denying allegations of lack of jurisdiction if the question was not raised at an earlier stage, but brought up only after an adverse decision. 30 We have also stressed, however, that this doctrine is merely an exception to the general rule and timehonored principle that jurisdiction is not lost by waiver or by estoppel.31 Considering these established facts, we find that the Tijam doctrine is inapplicable. As defined in that case, estoppel by laches occurs when a party fails through negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it has abandoned or declined to assert it. Herein, respondents cannot be perceived to have warranted the presumption that they were abandoning or declining to assert the right to question the jurisdiction of the MeTC. From the beginning, they have been challenging its jurisdiction and asserting that the RTC, not the MeTC, had jurisdiction over the case. Thus, in their Answer with affirmative defenses and counterclaim, 32 they challenged the MeTC’s jurisdiction over the Complaint.33 The same objections were alleged and presented as issues in their pretrial Brief. 34 We also note that respondents consistently allege that they "have been in peaceful possession of the premises since 1951." 35 Their argument is that the MeTC has no jurisdiction, since the unlawful withholding of possession has already exceeded one year. In their Memorandum36 submitted on appeal to the RTC, respondents argued: "10. It is also an undisputed fact that [respondents] have been in continuous and uninterrupted possession of the premises from 1951 up to present time or [for] a period of forty seven years (47). x x x x x x x x x ‘Even if one is the owner of the property, the possession thereof cannot be wrested from another who had been in the physical or material possession of the same for more than one year by resorting to a summary action for ejectment. x x x’37 x x x x x x x x x ‘Accion publiciana is the plenary action to recover the right of possession when dispossession has lasted for more than one year or when dispossession was effected by means other than those mentioned in Rule 70 of the Rules of Court.’"38 It is apparent that respondents have been questioning the jurisdiction of the MeTC and alleging that the controversy was originally cognizable by the RTC, contrary to the contention of petitioners. Thus, we cannot countenance petitioners’ position that respondents are already estopped from raising the issue of jurisdiction or of whether the ejectment case was filed within the oneyear period after the withholding of possession. With regard to the lapse of the oneyear period from the date of demand, even assuming that respondents raised the issue only for the first time on appeal with the CA, the foregoing argument can be considered without violating fair play. This position is consistent with the theory adopted and constantly raised by respondents in the lower courts: that the MeTC had no jurisdiction. Finally, we find it necessary to apply the strict interpretation of the jurisdiction rule, given the fact that (1) respondents have been in possession of the property since 1954; (2) proceedings of forcible entry and unlawful detainer are summary in nature; and (3) the oneyear time bar to the suit is consistent with the summary nature of the action.39 WHEREFORE, this Petition is DENIED and the assailed Decision and Resolution AFFIRMED. Costs against petitioners. EJECTMENT AND LEASE Mariel Angela Piedad Soriano
Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 115307 July 8, 1997 MANUEL LAO, petitioner, vs. COURT OF APPEALS and BETTER HOMES REALTY & HOUSING CORPORATION, respondents. PANGANIBAN, J.: As a general rule, the main issue in an ejectment suit is possession de facto, not possession de jure. In the event the issue of ownership is raised in the pleadings, such issue shall be taken up only for the limited purpose of determining who between the contending parties has the better right to possession. However, where neither of the parties objects to the allegation of the question of ownership — which may be initially improvident or improper — in an ejectment suit and, instead, both present evidence thereon, argue the question in their various submissions and participate in all aspects of the trial without objecting to the Metropolitan (or Municipal) Trial Court's jurisdiction to decide the question of ownership, the Regional Trial Court — in the exercise of its original jurisdiction as authorized by Section 11, Rule 40 of the Rules of Court — may rule on the issue and the corollary question of whether the subject deed is one of sale or of equitable mortgage. These postulates are discussed by the Court as it resolves this petition under Rule 45 seeking a reversal of the December 21, 1993 Decision 1 and April 28, 1994 Resolution 2 of the Court of Appeals in CAG.R. SP No. 9214293. The Antecedent Facts The facts of this case are narrated by Respondent Court of Appeals as follows: 3 On June 24, 1992, (herein Private Respondent Better Homes Realty and Housing Corporation) filed with the Metropolitan Trial Court of Quezon City, a complaint for unlawful detainer, on the ground that (said private respondent) is the owner of the premises situated at Unit I, No. 21 N. Domingo Street, Quezon City, evidenced by Transfer Certificate of Title No. 22184 of the Registry of Deeds of Quezon City; that (herein Petitioner Manuel Lao) occupied the property without rent, but on (private respondent's) pure liberality with the understanding that he would vacate the property upon demand, but despite demand to vacate made by letter received by (herein petitioner) on February 5, 1992, the (herein petitioner) refused to vacate the premises. In his answer to the complaint, (herein petitioner) claimed that he is the true owner of the house and lot located at Unit I, No. 21 N. Domingo Street, Quezon City; that the (herein private respondent) purchased the same from N. Domingo Realty and Development Corporation but the agreement was actually a loan secured by mortgage; and that plaintiff's cause of action is for accion publiciana, outside the jurisdiction of an inferior court. On October 9, 1992, the Metropolitan Trial Court of Quezon City rendered judgment ordering the (petitioner) to vacate the premises located at Unit I, No. 21 N. Domingo Street, Quezon City; to pay (private respondent) the sum of P300.00 a day starting on January 31, 1992, as reasonable rent for the use and occupation of the premises; to pay plaintiff P5,000.00, as attorney's fees, and costs. On appeal to the Regional Trial Court of Quezon City, 4 on March 30, 1993, the latter court rendered a decision reversing that of the Metropolitan Trial Court, and ordering the dismissal of the (private respondent's) complaint for lack of merit, with costs taxed against (private respondent). In its decision, the Regional Trial Court held that the subject property was acquired by (private respondent) from N. Domingo Realty and Development Corporation, by a deed of sale, and (private respondent) is now the registered owner under Transfer Certificate of Title No. 316634 of the Registry of Deeds of Quezon City, but in truth the (petitioner) is the beneficial owner of the property because the real transaction over the subject property was not a sale but a loan secured by a mortgage thereon. EJECTMENT AND LEASE Mariel Angela Piedad Soriano
The dispositive portion of the Regional Trial Court's decision is quoted below: 5 WHEREFORE, judgment is hereby rendered reversing the appealed decision and ordering the dismissal of plaintiffs complaint for lack of merit, with the costs taxed against it. IT IS SO ORDERED. On April 28, 1993, private respondent filed an appeal with the Court of Appeals which reversed the decision of the Regional Trial Court. The Respondent Court ruled: The Metropolitan Trial Court has no jurisdiction to resolve the issue of ownership in an action for unlawful detainer (B.P. 129, Sec. 33 ; Cf. Alvir vs. Vera, 130 SCRA 357). The jurisdiction of a court is determined by the nature of the action alleged in the complaint (Ching vs. Malaya, l53 SCRA 412). In its complaint in the inferior court, the plaintiff alleged that it is the owner of the premises located at Unit I, No. 21 N. Domingo Street, Quezon City, and that defendant's occupation is rent free and based on plaintiffs pure liberality coupled with defendant's undertaking to vacate the premises upon demand, but despite demands, defendant has refused to vacate. The foregoing allegations suffice to constitute a cause of action for ejectment (Banco de Oro vs. Court of Appeals, 182 SCRA 464). The Metropolitan Trial Court is not ousted of jurisdiction simply because the defendant raised the question ownership (Bolus vs. Court of Appeals, 218 SCRA 798). The inferior court shall resolve the issue of ownership only to determine who is entitled to the possession of the premises (B.P. 129, Sec. 33; Bolus vs. Court of Appeals, supra). Here, the Metropolitan Trial Court ruled that as owner, plaintiff (herein private respondent Better Homes Realty and Housing Corporation) is entitled to the possession of the premises because the defendant's stay is by mere tolerance of the plaintiff (herein private respondent). On the other hand, the Regional Trial Court ruled that the subject property is owned by the defendant, (herein petitioner Manuel Lao) and, consequently, dismissed the complaint for unlawful detainer. Thus, the Regional Trial Court resolved the issue of ownership, as if the case were originally before it as an action for recovery of possession, or accion publiciana, within its original jurisdiction. In an appeal from a decision of the Municipal Trial Court, or Metropolitan Trial Court, in an unlawful detainer case, the Regional Trial Court is simply to determine whether the inferior court correctly resolved the issue of possession; it shall not delve into the issue of ownership (Manuel vs. Court of Appeals, 199 SCRA 603). What the Regional Trial Court did was to rule that the real agreement between the plaintiff and the previous owner of the property was not a sale, but an equitable mortgage. Defendant was only a director of the seller corporation, and his claim of ownership could not be true. This question could not be determined summarily. It was not properly in issue before the inferior court because, as aforesaid, the only issue was possession de facto (Manlapaz vs. Court of Appeals, 191 SCRA 795), or who has a better right to physical possession (Dalida vs. Court of Appeals, 117 SCRA 480). Consequently, the Regional Trial Court erred in reversing the decision of the Metropolitan Trial Court. WHEREFORE, the Court hereby REVERSES the decision of the Regional Trial Court. In lieu thereof, We affirm the decision of the Metropolitan Trial Court of Quezon City sentencing the defendant and all persons claiming right under him to vacate the premises situated at Unit I, No. 21 N. Domingo Street, Quezon City, and to surrender possession to the plaintiff; to pay plaintiff the sum of P300.00, a day starting on January 31, 1992, until defendant shall have vacated the premises; to pay plaintiff P5,000.00 as attorneys fees, and costs. SO ORDERED. 6 Manuel Lao's motion for reconsideration dated January 24, 1994 was denied by the Court of Appeals in its Resolution promulgated on April 28, 1994. Hence, this petition for review before this Court. 7 The Issues Petitioner Manuel Lao raises three issues: 3.1 Whether or not the lower court can decide on the issue of ownership in the present ejectment case. 3.2 Whether or not private respondent had acquired ownership over the property in question. 3.3 Whether or not petitioner should be ejected from the premises in question 8
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The Court's Ruling The petition for review is meritorious. First Issue: Jurisdiction to Decide the Issue of Ownership The Court of Appeals held that as a general rule, the issue in an ejectment suit is possession de facto, not possession de jure, and that in the event the issue of ownership is raised as a defense, the issue is taken up for the limited purpose of determining who between the contending parties has the better right to possession. Beyond this, the MTC acts in excess of its jurisdiction. However, we hold that this is not a hard and fast rule that can be applied automatically to all unlawful detainer cases. Section 11, Rule 40 of the Rules of Court provides that "[a] case tried by an inferior court without jurisdiction over the subject matter shall be dismissed on appeal by the Court of First Instance. But instead of dismissing the case, the Court of First Instance, in the exercise of its original jurisdiction, may try the case on the merits if the parties therein file their pleadings and go to the trial without any objection to such jurisdiction." After a thorough review of the records of this case, the Court finds that the respondent appellate court failed to apply this Rule and erroneously reversed the RTC Decision. Respondent Court cites Alvir vs. Vera to support its Decision. On the contrary, we believe such case buttresses instead the Regional Trial Court's decision. The cited case involves an unlawful detainer suit where the issue of possession was inseparable from the issue of transfer of ownership, and the latter was determinable only after an examination of a contract of sale involving the property in question. The Court ruled that where a "case was tried and heard by the lower court in the exercise of its original jurisdiction by common assent of the parties by virtue of the issues raised . . . and the proofs presented by them," any dismissal on the ground of lack of jurisdiction "would only lead to needless delays and multiplicity of suits." The Court held: In actions of forcible entry and detainer, the main issue is possession de facto, independently of any claim of ownership or possession de jure that either party may set forth in his pleading. . . . Defendant's claim of ownership of the property from which plaintiff seeks to eject him is not sufficient to divest the inferior court of its jurisdiction over the action of forcible entry and detainer. However, if it appears during the trial that the principal issue relates to the ownership of the property in dispute and any question of possession which maybe involved necessarily depends upon the result of the inquiry into the title, previous rulings of this Court are that the jurisdiction of the municipal or city court is lost and the action should be dismissed. We have at bar a case where, in effect, the question of physical possession could not properly be determined without settling that of lawful or de jure possession and of ownership and hence, following early doctrine, the jurisdiction of the municipal court over the ejectment case was lost and the action should have been dismissed. As a consequence, respondent court would have no jurisdiction over the case on appeal and it should have dismissed the case on appeal from the municipal trial court. However, in line with Section 11, Rule 40 of the Revised Rules of Court, which reads — Sec. 11. Lack of Jurisdiction. — A case tried by an inferior court without jurisdiction over the subject matter shall be dismissed on appeal by the Court of First Instance. But instead of dismissing the case, the Court of First Instance in the exercise of its original jurisdiction, may try the case on the merits if the parties therein file their pleadings and go to trial without objection to such jurisdiction. this Court held in Saliwan vs. Amores, 51 SCRA 329, 337, that dismissal "on the said ground of lack of appellate jurisdiction on the part of the lower court flowing from the municipal court's loss of jurisdiction would lead only to needless delay and multiplicity of suits in the attainment of the same result and ignores, as above stated, that the case was tried and heard by the lower court in the exercise of its original jurisdiction by common assent of the parties by virtue of the issues raised by the parties and the proof presented by them thereon." 9 This pronouncement was reiterated by this Court through Mr. Justice Teodoro R. Padilla in Consignado vs. Court of Appeals 10 as follows: As the MTC of Laguna had no jurisdiction over the unlawful detainer case in view of the raised question of title or ownership over the property in dispute, the RTC of Laguna also had no appellate jurisdiction to decide the case on the merits. It should have dismissed the appeal. However, it had original jurisdiction to pass upon the controversy. It is to be noted, in this connection, that in their respective memoranda filed with the RTC of Laguna, the petitioners and private respondents did not object to the said court exercising its original jurisdiction pursuant to the aforequoted provisions of Section 11, Rule 40 of the Rules of Court. xxx xxx xxx EJECTMENT AND LEASE Mariel Angela Piedad Soriano
Petitioners now contend, among others, that the Court of Appeals erred in resolving the question of ownership as if actual title, not mere possession of subject premises, is involved in the instant case. The petitioner's contention is untenable. Since the MTC and RTC of Laguna decided the question of ownership over the property in dispute, on appeal the Court of Appeals had to review and resolve also the issue of ownership. . . . It is clear, therefore, that although an action for unlawful detainer "is inadequate for the ventilation of issues involving title or ownership of controverted real property, [i]t is more in keeping with procedural due process that where issues of title or ownership are raised in the summary proceedings for unlawful detainer, said proceeding should be dismissed for lack of jurisdiction, unless, in the case of an appeal from the inferior court to the Court of First Instance, the parties agree to the latter Court hearing the case in its original jurisdiction in accordance with Section 11, Rule 40 . . ." 11 In the case at bar, a determination of the issue of ownership is indispensable to resolving the rights of both parties over the property in controversy, and is inseparable from a determination of who between them has the right to possess the same. Indeed, the very complaint for unlawful detainer filed in the Metropolitan Trial Court of Quezon City is anchored on the alleged ownership of private respondent over the subject premises. 12 The parties did not object to the incongruity of a question of ownership being brought in an ejectment suit. Instead they both submitted evidence on such question, and the Metropolitan Trial Court decided on the issue. These facts are evident in the Metropolitan Trial Court's decision: From the records of the case, the evidence presented and the various arguments advanced by the parties, the Court finds that the property subject matter of this case is in the name of (herein private respondent) Better Homes and Realty Housing Corporation; that the Deed of Absolute Sale which was the basis for the issuance of said TCT No. 22184 is between N. Domingo Realty and Development Corporation and Better Homes Realty and Housing Corporation which was signed by Artemio S. Lao representing the seller N. Domingo and Realty Development Corporation; that a Board Resolution of N. Domingo and Realty and Development Corporation (Exhibit "D" position paper) shows that the Directors of the Board of the N. Domingo Realty and Development Corporation passed a resolution selling apartment units I and F located at No. 21 N. Domingo St., Quezon City and designating the (herein petitioner) with his brother Artemio S. Lao as signatories to the Deed of Sale. The claim therefore of the (herein petitioner) that he owns the property is not true . . . 13 When the MTC decision was appealed to the Regional Trial Court, not one of the parties questioned the Metropolitan Trial Court's jurisdiction to decide the issue of ownership. In fact, the records show that both petitioner and private respondent discussed the issue in their respective pleadings before the Regional Trial Court. 14 They participated in all aspects of the trial without objection to its jurisdiction to decide the issue of ownership. Consequently, the Regional Trial Court aptly decided the issue based on the exercise of its original jurisdiction as authorized by Section 11, Rule 40 of the Rules of Court. This Court further notes that in both of the contending parties' pleadings filed on appeal before the Court of Appeals, the issue of ownership was likewise amply discussed. 15 The totality of evidence presented was sufficient to decide categorically the issue of ownership. These considerations, taken together with the fact that both the Metropolitan Trial Court and the Regional Trial Court decided the issue of ownership, justify the review of the lower courts' findings of fact and decision on the issue of ownership. This we now do, as we dispose of the second issue and decide the case with finality to spare the parties the time, trouble and expense of undergoing the rigors of another suit where they will have to present the same evidence all over again and where, in all probability, the same ultimate issue of ownership will be brought up on appeal. Second Issue: Absolute Sale or Equitable Mortgage? Private Respondent Better Homes Realty and Housing Corporation anchored its right in the ejectment suit on a contract of sale in which petitioner (through their family corporation) transferred the title of the property in question. Petitioner contends, however that their transaction was not an absolute sale, but an equitable mortgage. In determining the nature of a contract, the Court looks at the intent of the parties and not at the nomenclature used to describe it. Pivotal to deciding this issue is the true aim and purpose of the contracting parties as shown by the terminology used in the covenant, as well as "by their conduct, words, actions and deeds prior to, during and immediately after executing the agreement." 16 In this regard, parol evidence becomes admissible to prove the true intent and agreement of the parties which the Court will enforce even if the title of the property in question has already been registered and a new transfer certificate of title issued in the name of the transferee. In Macapinlac vs. Gutierrez Repide, which involved an identical question, the Court succintly stated:
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
. . . This conclusion is fully supported by the decision in Cuyugan vs. Santos (34 Phil., 100), where this court held that a conveyance in the form of a contract of sale with pacto de retro will be treated as a mere mortgage, if really executed as security for a debt, and that this fact can be shown by oral evidence apart from the instrument of conveyance, a doctrine which has been followed in the later cases of Villa vs. Santiago (38 Phil., 157), and Cuyugan vs. Santos (39 Phil., 970). xxx xxx xxx In the first place, it must be borne in mind that the equitable doctrine which has been so fully stated above, to the effect that any conveyance intended as security for a debt will be held in effect to be a mortgage, whether so actually expressed in the instrument or not, operates regardless of the form of the agreement chosen by the contracting parties as the repository of their will. Equity looks through the form and considers the substance; and no kind of engagement can be adopted which will enable the parties to escape from the equitable doctrine to which reference is made. In other words, a conveyance of land, accompanied by registration in the name of the transferee and the issuance of a new certificate, is no more secured from the operation of this equitable doctrine than the most informal conveyance that could be devised. 17 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 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. xxx xxx xxx 18 The foregoing presumption applies also to a "contract purporting to be an absolute sale." 19 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. 20 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." 21 Second, the option given to Manuel Lao to purchase the property in controversy had been extended twice 22 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, 88, 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." 23 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 abovequoted 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." 24 In fact, this Court, in various cases involving the same situation, had occasion to state: . . . In Jayme, et al. v. Salvador, et al., this Court upheld a judgment of the Court of First Instance of Iloilo which found the transaction between the parties to be a loan instead of a sale of real property notwithstanding the terminology used in the document, after taking into account the surrounding circumstances of the transaction. The Court through Justice Norberto Romualdez stated that while it was true that plaintiffs were aware of the contents of the contracts, the preponderance of the evidence showed however that they signed knowing that said contracts did not EJECTMENT AND LEASE Mariel Angela Piedad Soriano
express their real intention, and if they did so notwithstanding this, it was due to the urgent necessity of obtaining fund. "Necessitous men are not, truly speaking, free men; but to answer a present emergency, will submit to any terms that the crafty may impose upon them." 25 Moreover, since the borrower's urgent need for money places the latter at a disadvantage visavis the lender who can thus dictate the terms of their contract, the Court, in case of an ambiguity, deems the contract to be one which involves the lesser transmission of rights and interest over the property in controversy. 26 As aptly found and concluded by the regional trial court: The evidence of record indicates that while as of April 4, 1988 (the date of execution of the Deed of Absolute Sale whereby the N. Domingo and Realty & Development Corporation purportedly sold the townhouse and lot subject of this suit to [herein private respondent Better Homes Realty & Housing Corporation] for P100,000.000) said N. Domingo Realty & Development Corporation (NDRDC, for short) was the registered owner of the subject property under Transfer Certificate of Title (TCT) No. 316634 of the Registry of Deeds for Quezon City, (herein petitioner Manuel Lao) in fact was and has been since 1975 the beneficial owner of the subject property and, thus, the same was assigned to him by the NDRDC, the family corporation set up by his parents and of which (herein petitioner) and his siblings are directors. That the parties' real transaction or contract over the subject property was not one of sale but, rather, one of loan secured, by a mortgage thereon is unavoidably inferrable from the following facts of record, to (herein petitioner's) possession of the subject property, which started in 1975 yet, continued and remained even after the alleged sale of April 4, 1988; (herein private respondent) executed an option to purchase in favor (herein petitioner) as early as April 2, 1988 or two days before (herein private respondent) supposedly acquired ownership of the property; the said option was renewed several times and the price was increased with each renewal (thus, the original period for the exercise of the option was up to June 11, 1988 and the price was P109,000.00; then, on June 10, 1988, the option was extended for 60 days or until August 11, 1988 and the price was increased to P137,000.00; and then on August 11, 1988, the option was again extended until November 11,1988 and the price was increased to P158,840.00); and, the Deed of Absolute Sale of April 4, 1988 was registered and the property transferred in the name of (private respondent) only on May 10, 1989, per TCT No. 22184 of the Registry of Deeds for Quezon City (Arts. 1602, nos. 2, 3, & 6, & 1604, Civil Code). Indeed, if it were true, as it would have the Court believe, that (private respondent) was so appreciative of (petitioner's) alleged facilitation of the subject property's sale to it, it is quite strange why (private respondent) some two days before such supposed sale would have been minded and inclined to execute an option to purchase allowing (petitioner) to acquire the property — the very same property it was still hoping to acquire at the time. Certainly, what is more likely and thus credible is that, if (private respondent) was indeed thankful that it was able to purchase the property, it would not given (petitioner) any option to purchase at all . . . 27 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. Third Issue: Should Petitioner Be Ejected? We answer in the negative. An action for unlawful detainer is grounded on Section 1, Rule 70 of the Rules of Court which provides that: . . . a landlord, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold possession, by virtue of any contract, express or implied, or the legal representatives or assigns of any such landlord, 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 inferior 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 . . . . Based on the previous discussion, there was no sale of the disputed property. Hence, it still belongs to petitioner's family corporation, N. Domingo Realty & Development Corporation. Private respondent, being a mere mortgagee, has no right to eject petitioner. Private respondent, as a creditor and mortgagee, " . . . cannot appropriate the things given by way of pledge or mortgage, or dispose of them. Any stipulation to the contrary is null and void." 28 Other Matters Private respondent in his memorandum also contends that (1) petitioner is not the real party in interest and (2) the petition should be dismissed for "raising/stating facts not so found by the Court of Appeals." These deserve scant consideration. Petitioner was impleaded as party defendant in the ejectment suit by private respondent itself. Thus, private respondent cannot question his standing as a party. As EJECTMENT AND LEASE Mariel Angela Piedad Soriano
such party, petitioner should be allowed to raise defenses which negate private respondent's right to the property in question. The second point is really academic. This ponencia relies on the factual narration of the Court of Appeals and not on the "facts" supplied by petitioner. WHEREFORE, the petition is hereby GRANTED. The challenged Decision of the Court of Appeals is REVERSED and SET ASIDE. The decision of the Regional Trial Court of Quezon City ordering the dismissal of the complaint for ejectment is REINSTATED and AFFIRMED. No pronouncement as to costs. SO ORDERED.
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 121719 September 16, 1999 SPOUSES VICENTE and MA. ROSALIA MANINANG, SPOUSES CECILIO and MA. SOCORRO RUBIO, MA. THELMA P. MALLARI, ORLANDO F. PANDAY, JR., MA. VIVIAN P. GINGA, and H.J. RAMON F. PANDAY, petitioners, vs. COURT OF APPEALS, HON. GREGORIO E. MANIO, JR., and OSCAR J. MONTON, SR., respondents. QUISUMBING, J.: Before us is an appeal from the decision of the Court of Appeals 1 in C.A. G.R. SP No. 36948, which affirmed the decision of the Regional Trial Court 2 upholding the ruling of the Municipal Trial Court 3 declaring private respondent Oscar J. Monton, Sr. as the lawful possessor of the land covered by TCT No. 17957 and situated at Bgy. Bagong Bayan Grande, Naga City.1âwphi1.nêt The facts of the case are as follows: Private respondent Oscar J. Monton, Sr. filed a complaint for unlawful detainer against petitioners on August 31, 1992. 4 He alleged that he is the absolute and registered owner of a parcel of land situated at Bgy. Bagong Bayan Grande, Naga City and covered by TCT No. 17957. He claimed to have bought the land from Rosario Felipe Panday, mother of petitioners Rosalia, Socorro, Ma. Thelma, Orlando, Ma. Vivian, and Ramon. According to private respondent, he went to the disputed property sometime in August 1992 to construct a perimeter fence around it. However, he was prevented from doing so by petitioners. Private respondent demanded that petitioners vacate the property, to no avail. Hence, his complaint for unlawful detainer before the Municipal Trial Court. In their answer, petitioners assailed the validity of the deed of sale executed by Rosario in favor of private respondent, alleging that at the time of the sale, Rosario was suffering from schizophrenia and was incapacitated to enter into a contract. They claimed ownership of the property through succession. Petitioners, moreover, questioned the jurisdiction of the MTC over the case, since another case, 5 for annulment of sale with damages involving the same parties, was filed by petitioners before the Regional Trial Court. The MTC ruled in favor of private respondent, declaring him to be the lawful possessor of the disputed lands and ordering petitioners to vacate the premises and to pay back rentals. The dispositive portion of the MTC decision read: WHEREFORE, by preponderance of evidence, plaintiff OSCAR J. MONTON, SR. is hereby declared the lawful possessor of the premises in question and defendants are hereby ordered to vacate the same immediately and to deliver possession thereof to the plaintiff, to pay the reasonable rental thereof in the amount of P350.00 per month from August 13, 1992 until the premises are fully vacated and to pay the costs. The compulsory counterclaim not having been substantiated by evidence, the same is dismissed. 6 Petitioners appealed to the RTC, which, however, affirmed in toto the decision of the MTC. On appeal to the Court of Appeals, the latter court likewise affirmed the decision of the RTC and the MTC. Hence, the instant petition for review on certiorari. Petitioners raise the following issues for our consideration: I MAY THERE BE UNLAWFUL DETAINER WHEN RESPONDENT HAS NEVER BEEN IN POSSESSION OF THE LAND IN QUESTION AND RESPONDENT HAS NEVER BEEN RECOGNIZED BY PETITIONERS AS EJECTMENT AND LEASE Mariel Angela Piedad Soriano
TRUE AND LAWFUL OWNER OF THE LAND. II MAY THE CITY COURT TAKE JURISDICTION OVER AN UNLAWFUL DETAINER CASE AND RENDER JUDGMENT THEREON WHEN THE OWNERSHIP ISSUE AND THE RIGHT OF POSSESSION OVER THE LAND SUBJECT OF THE DETAINER IS BEING LITIGATED IN A CASE EARLIER FILED BEFORE THE REGIONAL TRIAL COURT. 7 Anent the first issue, the following rule which lays down the requirements for filing a complaint for unlawful detainer is pertinent: Sec. 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 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. 8 As correctly pointed out by respondent Court of Appeals, nowhere does it appear in the abovecited rule that, in an action for unlawful detainer, the person filing the complaint — in this case, private respondent as vendee — be in prior physical possession of the property. As we held in one case: Prior physical possession in the plaintiff is not an indispensable requirement in an unlawful detainer case brought by a vendee or other person against whom the possession of any land is unlawfully withheld after the expiration or termination of a right to hold possession. . . . . 9 Neither is it required that he be first recognized as the true and lawful owner of the property by the person against whom he asserts his right to possession. An action for unlawful detainer may be filed by one who is not an owner of the property in dispute. Petitioners assert that Rule 70, Section 1, of the Rules of Court is not applicable since it refers only "to a sale where the right of the vendor is not questioned." We fail to see that portion of the rule where this distinction may be gleaned. As regards the second issue, we have repeatedly held that the only issue for resolution in an action for unlawful detainer is possession of the disputed 10 property. Thus, contrary to petitioners' belief, it was but proper for the courts below not to put into consideration the validity of private respondent's title. It simply is not an issue in this case. The question of ownership is immaterial in an action for unlawful detainer. It is, thus, of no moment if, at the same time that an action for unlawful detainer is being litigated, there is another action respecting the same property and the same parties involving the issue of ownership. The rights asserted and the reliefs prayed for are different in the two cases. An action for annulment of sale like the one filed by petitioners against private respondent is not prejudicial to an action for unlawful detainer. 11 The question is, may the pendency of such an action for consignation or specific performance, or annulment of a sale, as in this case, be successfully pleaded in abatement of an action for unlawful detainer? This Court has invariably given a negative answer. 12 ACCORDINGLY, the instant petition is DISMISSED and the decision of the Court of Appeals in C.A. G.R. SP No. 36948 is hereby AFFIRMED. Costs against petitioners.1âwphi1.nêt SO ORDERED.
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 166714 February 9, 2007 AMELIA S. ROBERTS, Petitioner, vs. MARTIN B. PAPIO, Respondent. D E C I S I O N CALLEJO, SR., J.: Assailed in this petition for review on certiorari is the Decision1 of the Court of Appeals (CA), in CAG.R. CV No. 69034 which reversed and set aside the Decision2 of the Regional Trial Court (RTC), Branch 150, Makati City, in Civil Case No. 01431. The RTC ruling had affirmed with modification the Decision3 of the Metropolitan Trial Court (MeTC), Branch 64, Makati City in Civil Case No. 66847. The petition likewise assails the Resolution of the CA denying the motion for reconsideration of its decision. The Antecedents The spouses Martin and Lucina Papio were the owners of a 274squaremeter residential lot located in Makati (now Makati City) and covered by Transfer Certificate of Title (TCT) No. S44980. 4 In order to secure a P59,000.00 loan from the Amparo Investments Corporation, they executed a real estate mortgage on the property. Upon Papio’s failure to pay the loan, the corporation filed a petition for the extrajudicial foreclosure of the mortgage. Since the couple needed money to redeem the property and to prevent the foreclosure of the real estate mortgage, they executed a Deed of Absolute Sale over the property on April 13, 1982 in favor of Martin Papio’s cousin, Amelia Roberts. Of the P85,000.00 purchase price, P59,000.00 was paid to the Amparo Investments Corporation, while the P26,000.00 difference was retained by the spouses. 5 As soon as the spouses had settled their obligation, the corporation returned the owner’s duplicate of TCT No. S44980, which was then delivered to Amelia Roberts. Thereafter, the parties (Amelia Roberts as lessor and Martin Papio as lessee) executed a twoyear contract of lease dated April 15, 1982, effective May 1, 1982. The contract was subject to renewal or extension for a like period at the option of the lessor, the lessee waiving thereby the benefits of an implied new lease. The lessee was obliged to pay monthly rentals of P800.00 to be deposited in the lessor’s account at the Bank of America, Makati City branch.6 On July 6, 1982, TCT No. S44980 was cancelled, and TCT No. 114478 was issued in the name of Amelia Roberts as owner.7 Martin Papio paid the rentals from May 1, 1982 to May 1, 1984, and thereafter, for another year. 8 He then failed to pay rentals, but he and his family nevertheless remained in possession of the property for a period of almost thirteen (13) years. In a letter dated June 3, 1998, Amelia Roberts, through counsel, reminded Papio that he failed to pay the monthly rental of P2,500.00 from January 1, 1986 to December 31, 1997, and P10,000.00 from January 1, 1998 to May 31, 1998; thus, his total liability was P410,000.00. She demanded that Papio vacate the property within 15 days from receipt of the letter in case he failed to settle the amount. 9 Because he refused to pay, Papio received another letter from Roberts on April 22, 1999, demanding, for the last time, that he and his family vacate the property.10 Again, Papio refused to leave the premises. On June 28, 1999, Amelia Roberts, through her attorneyinfact, Matilde Aguilar, filed a Complaint 11 for unlawful detainer and damages against Martin Papio before the MeTC, Branch 64, Makati City. She alleged the following in her complaint: Sometime in 1982 she purchased from defendant a 274sqm residential house and lot situated at No. 1046 Teresa St., Brgy. Valenzuela, Makati City.12 Upon Papio’s pleas to continue staying in the property, they executed a twoyear lease contract 13 which commenced on May 1, 1982. The monthly rental was P800.00. Thereafter, TCT No. 11447814 was issued in her favor and she paid all the realty taxes due on the property. When the term of the lease expired, she still allowed Papio and his family to continue leasing the property. However, he took advantage of her absence and stopped payment beginning January 1986, and refused to pay despite repeated demands. In June 1998, she sent a demand letter15 through counsel requiring Papio to pay rentals from January 1986 up to May 1998 and to vacate the leased property. The accumulated arrears in rental are as follows: (a) P360,000.00 from January 1, 1986 to December 31, 1997 at P2,500.00 per EJECTMENT AND LEASE Mariel Angela Piedad Soriano
month; and (b) P50,000.00, from January 1, 1998 to May 31, 1998 at P10,000.00 per month.16 She came to the Philippines but all efforts at an amicable settlement proved futile. Thus, in April 1999, she sent the final demand letter to defendant directing him and his family to pay and immediately vacate the leased premises.17 Roberts appended to her complaint copies of the April 13, 1982 Deed of Absolute Sale, the April 15, 1982 Contract of Lease, and TCT No. 114478. In his Answer with counterclaim, Papio alleged the following: He executed the April 13, 1982 deed of absolute sale and the contract of lease. Roberts, his cousin who is a resident of California, United States of America (USA), arrived in the Philippines and offered to redeem the property. Believing that she had made the offer for the purpose of retaining his ownership over the property, he accepted. She then remitted P59,000.00 to the mortgagor for his account, after which the mortgagee cancelled the real estate mortgage. However, he was alarmed when the plaintiff had a deed of absolute sale over the property prepared (for P83,000.00 as consideration) and asked him to sign the same. She also demanded that the defendant turn over the owner’s duplicate of TCT No. S44980. The defendant was in a quandary. He then believed that if he signed the deed of absolute sale, Roberts would acquire ownership over the property. He asked her to allow him to redeem or reacquire the property at any time for a reasonable amount.18 When Roberts agreed, Papio signed the deed of absolute sale. Pursuant to the right to redeem/repurchase given him by Roberts, Papio purchased the property for P250,000.00. In July 1985, since Roberts was by then already in the USA, he remitted to her authorized representative, Perlita Ventura, the amount of P150,000.00 as partial payment for the property.19 On June 16, 1986, she again remitted P100,000.00, through Ventura. Both payments were evidenced by receipts signed by Ventura.20 Roberts then declared that she would execute a deed of absolute sale and surrender the title to the property. However, Ventura had apparently misappropriated P39,000.00 out of the P250,000.00 that she had received; Roberts then demanded that she pay the amount misappropriated before executing the deed of absolute sale. Thus, the sole reason why Roberts refused to abide by her promise was the failure of her authorized representative to remit the full amount of P250,000.00. Despite Papio’s demands, Roberts refused to execute a deed of absolute sale. Accordingly, defendant posited that plaintiff had no cause of action to demand payment of rental and eject him from the property. Papio appended to his Answer the following: (1) the letter dated July 18, 1986 of Perlita Ventura to the plaintiff wherein the former admitted having used the money of the plaintiff to defray the plane fares of Perlita’s parents to the USA, and pleaded that she be allowed to repay the amount within one year; (b) the letter of Eugene Roberts (plaintiff’s husband) to Perlita Ventura dated July 25, 1986 where he accused Ventura of stealing the money of plaintiff Amelia (thus preventing the latter from paying her loan on her house and effect the cancellation of the mortgage), and demanded that she deposit the balance;21 and (c) plaintiff’s letter to defendant Papio dated July 25, 1986 requesting the latter to convince Ventura to remit the balance of P39,000.00 so that the plaintiff could transfer the title of the property to the defendant.22 Papio asserted that the letters of Roberts and her husband are in themselves admissions or declarations against interest, hence, admissible to prove that he had reacquired the property although the title was still in her possession. In her Affidavit and Position Paper,23 Roberts averred that she had paid the real estate taxes on the property after she had purchased it; Papio’s initial right to occupy the property was terminated when the original lease period expired; and his continued possession was only by mere tolerance. She further alleged that the Deed of Sale states on its face that the conveyance of the property was absolute and unconditional. She also claimed that any right to repurchase the property must appear in a public document pursuant to Article 1358, Paragraph 1, of the Civil Code of the Phililppines. 24 Since no such document exists, defendant’s supposed real interest over the property could not be enforced without violating the Statute of Frauds. 25 She stressed that her Torrens title to the property was an "absolute and indefeasible evidence of her ownership of the property which is binding and conclusive upon the whole world." Roberts admitted that she demanded P39,000.00 from the defendant in her letter dated July 25, 1986. However, she averred that the amount represented his back rentals on the property. 26 She declared that she neither authorized Ventura to sell the property nor to receive the purchase price therefor. She merely authorized her to receive the rentals from defendant and to deposit them in her account. She did not know that Ventura had received P250,000.00 from Papio in July 1985 and on June 16, 1986, and had signed receipts therefor. It was only on February 11, 1998 that she became aware of the receipts when she received defendant Papio’s letter to which were appended the said receipts. She and her husband offered to sell the property to the defendant in 1984 for US$15,000.00 on a "take it or leave it" basis when they arrived in the Philippines in May 1984. 27 However, defendant refused to accept the offer. The spouses then offered to sell the property anew on December 20, 1997, for P670,000.00 inclusive of back rentals.28 However, defendant offered to settle his account with the spouses.29 Again, the offer came on January 11, 1998, but it was rejected. The defendant insisted that he had already purchased the property in July 1985 for P250,000.00. EJECTMENT AND LEASE Mariel Angela Piedad Soriano
Roberts insisted that Papio’s claim of the right to repurchase the property, as well as his claim of payment therefor, is belied by his own letter in which he offered to settle plaintiff’s claim for back rentals. Even assuming that the purchase price of the property had been paid through Ventura, Papio did not adduce any proof to show that Ventura had been authorized to sell the property or to accept any payment thereon. Any payment to Ventura could have no binding effect on her since she was not privy to the transaction; if at all, such agreement would be binding only on Papio and Ventura. She further alleged that defendant’s own inaction belies his claim of ownership over the property: first, he failed to cause any notice or annotation to be made on the Register of Deed’s copy of TCT No. 114478 in order to protect his supposed adverse claim; second, he did not institute any action against Roberts to compel the execution of the necessary deed of transfer of title in his favor; and third, the defense of ownership over the property was raised only after Roberts demanded him to vacate the property. Based solely on the parties’ pleadings, the MeTC rendered its January 18, 2001 Decision 30 in favor of Roberts. The fallo of the decision reads: WHEREFORE, premises considered, finding this case for the plaintiff, the defendant is hereby ordered to: 1. Vacate the leased premises known as 1046 Teresa St., Valenzuela, Makati City; 2. Pay plaintiff the reasonable rentals accrual for the period January 1, 1996 to December 13, 1997 at the rate equivalent to Php2,500.00 per month and thereafter, Php10,000.00 from January 1998 until he actually vacates the premises; 3. Pay the plaintiff attorney’s fees as Php20,000.00; and 4. Pay the costs SO ORDERED.31 The MeTC held that Roberts merely tolerated the stay of Papio in the property after the expiration of the contract of lease on May 1, 1984; hence, she had a cause of action against him since the only elements in an unlawful detainer action are the fact of lease and the expiration of its term. The defendant as tenant cannot controvert the title of the plaintiff or assert any right adverse thereto or set up any inconsistent right to change the existing relation between them. The plaintiff need not prove her ownership over the property inasmuch as evidence of ownership can be admitted only for the purpose of determining the character and extent of possession, and the amount of damages arising from the detention. The court further ruled that Papio made no denials as to the existence and authenticity of Roberts’ title to the property. It declared that "the certificate of title is indefeasible in favor of the person whose name appears therein and incontrovertible upon the expiration of the oneyear period from the date of issue," and that a Torrens title, "which enjoys a strong presumption of regularity and validity, is generally a conclusive evidence of ownership of the land referred to therein." As to Papio’s claim that the transfer of the property was one with right of repurchase, the MeTC held it to be bereft of merit since the Deed of Sale is termed as "absolute and unconditional." The court ruled that the right to repurchase is not a right granted to the seller by the buyer in a subsequent instrument but rather, a right reserved in the same contract of sale. Once the deed of absolute sale is executed, the seller can no longer reserve the right to repurchase; any right thereafter granted in a separate document cannot be a right of repurchase but some other right. As to the receipts of payment signed by Ventura, the court gave credence to Roberts’s declaration in her Affidavit that she authorized Ventura only to collect rentals from Papio, and not to receive the repurchase price. Papio’s letter of January 31, 1998, which called her attention to the fact that she had been sending people without written authority to collect money since 1985, bolstered the court’s finding that the payment, if at all intended for the supposed repurchase, never redounded to the benefit of the spouses Roberts. Papio appealed the decision to the RTC, alleging the following: I. THE LOWER COURT GRAVELY ERRED IN NOT DISMISSING THE CASE FOR EJECTMENT OUTRIGHT ON THE GROUND OF LACK OF CAUSE OF ACTION. II. THE LOWER COURT GRAVELY ERRED IN NOT CONSIDERING THE DOCUMENTARY EVIDENCE ADDUCED BY DEFENDANTAPPELLANT WHICH ESTABLISHED THAT A REPURCHASE TRANSACTION EXISTED EJECTMENT AND LEASE Mariel Angela Piedad Soriano
BETWEEN THE PARTIES ONLY THAT PLAINTIFFAPPELLEE WITHHELD THE EXECUTION OF THE ABSOLUTE DEED OF SALE AND THE TRANSFER OF TITLE OF THE SAME IN DEFENDANTAPPELLANT’S NAME. III. THE LOWER COURT GRAVELY ERRED IN NOT CONSIDERING THAT THE LETTERS OF PLAINTIFF [APPELLEE] AND OF HER HUSBAND ADDRESSED TO DEFENDANTAPPELLANT AND HIS WIFE ARE IN THEMSELVES ADMISSION AND/OR DECLARATION OF THE FACT THAT DEFENDANTAPPELLANT HAD DULY PAID PLAINTIFFAPPELLEE OF THE PURCHASE AMOUNT COVERING THE SUBJECT PROPERTY. IV. THE LOWER COURT GRAVELY ERRED IN NOT DISMISSING THE CASE FOR EJECTMENT OUTRIGHT CONSIDERING THAT PLAINTIFFAPPELLEE WHO IS [AN] AMERICAN CITIZEN AND RESIDENT THEREIN HAD NOT APPEARED IN COURT ONCE, NEITHER WAS HER ALLEGED ATTORNEYINFACT, MATILDE AGUILAR NOR [DID] THE LATTER EVER [FURNISH] THE LOWER COURT A SPECIAL POWER OF ATTORNEY AUTHORIZING HER TO APPEAR IN COURT IN BEHALF OF HER PRINCIPAL.32 Papio maintained that Roberts had no cause of action for eviction because she had already ceded her right thereto when she allowed him to redeem and reacquire the property upon payment of P250,000.00 to Ventura, her duly authorized representative. He also contended that Roberts’s claim that the authority of Ventura is limited only to the collection of the rentals and not of the purchase price was a mere afterthought, since her appended Affidavit was executed sometime in October 1999 when the proceedings in the MeTC had already started. On March 26, 2001, Roberts filed a Motion for Issuance of Writ of Execution.33 The court granted the motion in an Order34 dated June 19, 2001. Subsequently, a Writ of Execution35 pending appeal was issued on September 28, 2001. On October 29, 2001, Sheriff Melvin M. Alidon enforced the writ and placed Roberts in possession of the property. Meanwhile, Papio filed a complaint with the RTC of Makati City, for specific performance with damages against Roberts. Papio, as plaintiff, claimed that he entered into a contract of sale with pacto de retro with Roberts, and prayed that the latter be ordered to execute a Deed of Sale over `the property in his favor and transfer the title over the property to and in his name. The case was docketed as Civil Case No. 01851. On October 24, 2001, the RTC rendered judgment affirming the appealed decision of the MeTC. The fallo of the decision reads:36 Being in accordance with law and the circumstances attendant to the instant case, the court finds merit in plaintiffappellee’s claim. Wherefore, the challenged decision dated January 18, 2001 is hereby affirmed in toto. SO ORDERED.37 Both parties filed their respective motions for reconsideration. 38 In an Order39 dated February 26, 2002, the court denied the motion of Papio but modified its decision declaring that the computation of the accrued rentals should commence from January 1986, not January 1996. The decretal portion of the decision reads: Wherefore, the challenged decision dated January 18, 2001 is hereby affirmed with modification that defendant pay plaintiff the reasonable rentals accrued for the period January 1, 1986 to December [31, 1997] per month and thereafter and P10,000.00 [per month] from January 1998 to October 28, 2001 when defendantappellant actually vacated the subject leased premises. SO ORDERED.40 On February 28, 2002, Papio filed a petition for review 41 in the CA, alleging that the RTC erred in not finding that he had reacquired the property from Roberts for P250,000.00, but the latter refused to execute a deed of absolute sale and transfer the title in his favor. He insisted that the MeTC and the RTC erred in giving credence to petitioner’s claim that she did not authorize Ventura to receive his payments for the purchase price of the property, citing Roberts’ letter dated July 25, 1986 and the letter of Eugene Roberts to Ventura of even date. He also averred that the MeTC and the RTC erred in not considering his documentary evidence in deciding the case.
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
On August 31, 2004, the CA rendered judgment granting the petition. The appellate court set aside the decision of the RTC and ordered the RTC to dismiss the complaint. The decretal portion of the Decision42 reads: WHEREFORE, the judgment appealed from is hereby REVERSED and SET ASIDE and a new one entered: (1) rendering an initial determination that the "Deed of Absolute Sale" dated April 13, 1982 is in fact an equitable mortgage under Article 1603 of the New Civil Code; and (2) resolving therefore that petitioner Martin B. Papio is entitled to possession of the property subject of this action; (3) But such determination of ownership and equitable mortgage are not clothed with finality and will not constitute a binding and conclusive adjudication on the merits with respect to the issue of ownership and such judgment shall not bar an action between the same parties respecting title to the land, nor shall it be held conclusive of the facts therein found in the case between the same parties upon a different cause of action not involving possession. All other counterclaims for damages are hereby dismissed. Cost against the respondent. SO ORDERED.43 According to the appellate court, although the MeTC and RTC were correct in holding that the MeTC had jurisdiction over the complaint for unlawful detainer, they erred in ignoring Papio’s defense of equitable mortgage, and in not finding that the transaction covered by the deed of absolute sale by and between the parties was one of equitable mortgage under Article 1602 of the New Civil Code. The appellate court ruled that Papio retained the ownership of the property and its peaceful possession; hence, the MeTC should have dismissed the complaint without prejudice to the outcome of Civil Case No. 01851 relative to his claim of ownership over the property. Roberts filed a motion for reconsideration of the decision on the following grounds: I. Petitioner did not allege in his Answer the defense of equitable mortgage; hence, the lower courts [should] not have discussed the same; II. Even assuming that Petitioner alleged the defense of equitable mortgage, the MeTC could not have ruled upon the said defense, III. The M[e]TC and the RTC were not remiss in the exercise of their jurisdiction.44 The CA denied the motion. In this petition for review, Amelia SalvadorRoberts, as petitioner, avers that: I. THE HONORABLE COURT OF APPEALS GRIEVEOUSLY (SIC) ERRED IN DECLARING THAT THE M[e]TC AN(D) THE RTC WERE REMISS IN THE EXERCISE OF THAT JURISDICTION ACQUIRED BECAUSE IT DID NOT CONSIDER ALL PETITIONER’S DEFENSE OF EQUITABLE MORTGAGE. II. THE HONORABLE COURT OF APPEALS GRIEVEOUSLY (SIC) ERRED IN REQUIRING THE M[e]TC AND RTC TO RULE ON A DEFENSE WHICH WAS NEVER AVAILED OF BY RESPONDENT.45 Petitioner argues that respondent is barred from raising the issue of equitable mortgage because his defense in the MeTC and RTC was that he had repurchased the property from the petitioner; by such representation, he had impliedly admitted the existence and validity of the deed of absolute sale whereby ownership of the property was transferred to petitioner but reverted to him upon the exercise of said right. The respondent even filed a complaint for specific performance with damages, which is now pending in the RTC of Makati City, docketed as Civil Case No. 01851 entitled "Martin B. Papio vs. Amelia SalvadorRoberts." In that case, respondent claimed that his transaction with the petitioner was a sale with pacto de retro. Petitioner posits that Article 1602 of the Civil Code applies only when the defendant specifically alleges this defense. Consequently, the appellate court was proscribed from finding that petitioner and respondent had entered into an equitable mortgage under the deed of absolute sale. Petitioner further avers that respondent was ably represented by counsel and was aware of the difference between a pacto de retro sale and an equitable mortgage; thus, he could not have been mistaken in declaring that he repurchased the property from her. As to whether a sale is in fact an equitable mortgage, petitioner claims that the issue should be properly addressed and resolved by the RTC in an action to enforce ownership, not in an ejectment case before the MeTC where the main issue involved is possession de facto. According to her, the obvious import of the CA Decision is that, in resolving an ejectment case, the lower court must pass upon the issue of ownership (in this case, by applying the presumptions under Art. 1602) which, in effect, would use the same yardstick as though it is the main action. The procedure will not only promote multiplicity of suits but also place the new owner in the absurd position of having to first seek the declaration of ownership before filing an ejectment suit. Respondent counters that the defense of equitable mortgage need not be particularly stated to apprise petitioner of the nature and character of the repurchase agreement. He contends that he had amply discussed in his pleadings before the trial and appellate courts all the surrounding circumstances of the case, such as the relative situation of the parties at the time; their attitude, acts, conduct, and EJECTMENT AND LEASE Mariel Angela Piedad Soriano
declarations; and the negotiations between them that led to the repurchase agreement. Thus, he argues that the CA correctly ruled that the contract was one of equitable mortgage. He insists that petitioner allowed him to redeem and reacquire the property, and accepted his full payment of the property through Ventura, the authorized representative, as shown by the signed receipts. The threshold issues are the following: (1) whether the MeTC had jurisdiction in an action for unlawful detainer to resolve the issue of who between petitioner and respondent is the owner of the property and entitled to the de facto possession thereof; (2) whether the transaction entered into between the parties under the Deed of Absolute Sale and the Contract of Lease is an equitable mortgage over the property; and (3) whether the petitioner is entitled to the material or de facto possession of the property. The Ruling of the Court On the first issue, the CA ruling (which upheld the jurisdiction of the MeTC to resolve the issue of who between petitioner or respondent is the lawful owner of the property, and is thus entitled to the material or de facto possession thereof) is correct. Section 18, Rule 70 of the Rules of Court provides that when the defendant raises the defense of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession. The judgment rendered in an action for unlawful detainer shall be conclusive with respect to the possession only and shall in no wise bind the title or affect the ownership of the land or building. Such judgment would not bar an action between the same parties respecting title to the land or building.46 The summary nature of the action is not changed by the claim of ownership of the property of the defendant. 47 The MeTC is not divested of its jurisdiction over the unlawful detainer action simply because the defendant asserts ownership over the property. The sole issue for resolution in an action for unlawful detainer is material or de facto possession of the property. Even if the defendant claims juridical possession or ownership over the property based on a claim that his transaction with the plaintiff relative to the property is merely an equitable mortgage, or that he had repurchased the property from the plaintiff, the MeTC may still delve into and take cognizance of the case and make an initial or provisional determination of who between the plaintiff and the defendant is the owner and, in the process, resolve the issue of who is entitled to the possession. The MeTC, in unlawful detainer case, decides the question of ownership only if it is intertwined with and necessary to resolve the issue of possession.48 The resolution of the MeTC on the ownership of the property is merely provisional or interlocutory. Any question involving the issue of ownership should be raised and resolved in a separate action brought specifically to settle the question with finality, in this case, Civil Case No. 01851 which respondent filed before the RTC. The ruling of the CA, that the contract between petitioner and respondent was an equitable mortgage, is incorrect. The fact of the matter is that the respondent intransigently alleged in his answer, and even in his affidavit and position paper, that petitioner had granted him the right to redeem or repurchase the property at any time and for a reasonable amount; and that, he had, in fact, repurchased the property in July 1985 for P250,000.00 which he remitted to petitioner through an authorized representative who signed receipts therefor; he had reacquired ownership and juridical possession of the property after his repurchase thereof in 1985; and consequently, petitioner was obliged to execute a deed of absolute sale over the property in his favor. Notably, respondent alleged that, as stated in his letter to petitioner, he was given the right to reacquire the property in 1982 within two years upon the payment of P53,000.00, plus petitioner’s airfare for her trip to the Philippines from the USA and back; petitioner promised to sign the deed of absolute sale. He even filed a complaint against the petitioner in the RTC, docketed as Civil Case No. 01851, for specific performance with damages to compel petitioner to execute the said deed of absolute sale over the property presumably on the strength of Articles 1357 and 1358 of the New Civil Code. Certainly then, his claim that petitioner had given him the right to repurchase the property is antithetical to an equitable mortgage. An equitable mortgage is one that, although lacking in some formality, form or words, or other requisites demanded by a statute, nevertheless reveals the intention of the parties to change a real property as security for a debt and contain nothing impossible or contrary to law.49 A contract between the parties is an equitable mortgage if the following requisites are present: (a) the parties entered into a contract denominated as a contract of sale; and (b) the intention was to secure an existing debt by way of mortgage. 50 The decisive factor is the intention of the parties. In an equitable mortgage, the mortgagor retains ownership over the property but subject to foreclosure and sale at public auction upon failure of the mortgagor to pay his obligation.51 In contrast, in a pacto de retro sale, ownership of the property sold is immediately transferred to the vendee a retro subject only to the right of the vendor a retro to repurchase the property upon compliance with legal requirements for the repurchase. The failure of the vendor a retro to exercise the right to repurchase within the agreed time vests upon the vendee a retro, by operation of law, absolute title over the property.52
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
One repurchases only what one has previously sold. The right to repurchase presupposes a valid contract of sale between the same parties.53 By insisting that he had repurchased the property, respondent thereby admitted that the deed of absolute sale executed by him and petitioner on April 13, 1982 was, in fact and in law, a deed of absolute sale and not an equitable mortgage; hence, he had acquired ownership over the property based on said deed. Respondent is, thus, estopped from asserting that the contract under the deed of absolute sale is an equitable mortgage unless there is allegation and evidence of palpable mistake on the part of respondent;54 or a fraud on the part of petitioner. Respondent made no such allegation in his pleadings and affidavit. On the contrary, he maintained that petitioner had sold the property to him in July 1985 and acknowledged receipt of the purchase price thereof except the amount of P39,000.00 retained by Perlita Ventura. Respondent is thus bound by his admission of petitioner’s ownership of the property and is barred from claiming otherwise.55 Respondent’s admission that petitioner acquired ownership over the property under the April 13, 1982 deed of absolute sale is buttressed by his admission in the Contract of Lease dated April 15, 1982 that petitioner was the owner of the property, and that he had paid the rentals for the duration of the contract of lease and even until 1985 upon its extension. Respondent was obliged to prove his defense that petitioner had given him the right to repurchase, and that petitioner obliged herself to resell the property for P250,000.00 when they executed the April 13, 1982 deed of absolute sale. We have carefully reviewed the case and find that respondent failed to adduce competent and credible evidence to prove his claim. As gleaned from the April 13, 1982 deed, the right of respondent to repurchase the property is not incorporated therein. The contract is one of absolute sale and not one with right to repurchase. The law states that if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control. 56 When the language of the contract is explicit, leaving no doubt as to the intention of the drafters, the courts may not read into it any other intention that would contradict its plain import.57 The clear terms of the contract should never be the subject matter of interpretation. Neither abstract justice nor the rule of liberal interpretation justifies the creation of a contract for the parties which they did not make themselves, or the imposition upon one party to a contract or obligation to assume simply or merely to avoid seeming hardships. 58 Their true meaning must be enforced, as it is to be presumed that the contracting parties know their scope and effects.59 As the Court held in Villarica, et al. v. Court of Appeals:60 The right of repurchase is not a right granted the vendor by the vendee in a subsequent instrument, but is a right reserved by the vendor in the same instrument of sale as one of the stipulations of the contract. Once the instrument of absolute sale is executed, the vendor can no longer reserve the right to repurchase, and any right thereafter granted the vendor by the vendee in a separate instrument cannot be a right of repurchase but some other right like the option to buy in the instant case.61 In Ramos v. Icasiano,62 we also held that an agreement to repurchase becomes a promise to sell when made after the sale because when the sale is made without such agreement the purchaser acquires the thing sold absolutely; and, if he afterwards grants the vendor the right to repurchase, it is a new contract entered into by the purchaser as absolute owner. An option to buy or a promise to sell is different and distinct from the right of repurchase that must be reserved by means of stipulations to that effect in the contract of sale.63 There is no evidence on record that, on or before July 1985, petitioner agreed to sell her property to the respondent for P250,000.00. Neither is there any documentary evidence showing that Ventura was authorized to offer for sale or sell the property for and in behalf of petitioner for P250,000.00, or to receive the said amount from respondent as purchase price of the property. The rule is that when a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void64 and cannot produce any legal effect as to transfer the property from its lawful owner.65 Being inexistent and void from the very beginning, said contract cannot be ratified.66 Any contract entered into by Ventura for and in behalf of petitioner relative to the sale of the property is void and cannot be ratified by the latter. A void contract produces no effect either against or in favor of anyone.67 Respondent also failed to prove that the negotiations between him and petitioner has culminated in his offer to buy the property for P250,000.00, and that they later on agreed to the sale of the property for the same amount. He likewise failed to prove that he purchased and reacquired the property in July 1985. The evidence on record shows that petitioner had offered to sell the property for US$15,000 on a "take it or leave it" basis in May 1984 upon the expiration of the Contract of Lease68 —an offer that was rejected by respondent—which is why on December 30, 1997, petitioner and her husband offered again to sell the property to respondent for P670,000.00 inclusive of back rentals and the purchase price of the property under the April 13, 1982 Deed of absolute Sale.69 The offer was again rejected by respondent. The final offer appears to have been made on January 11, 199870 but again, like the previous negotiations, no contract was perfected between the parties. A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service.71 Under Article 1318 of the New Civil Code, there is no contract unless the following requisites concur: EJECTMENT AND LEASE Mariel Angela Piedad Soriano
(1) Consent of the contracting parties; (2) Object certain which is the subject matter of the contract; (3) Cause of the obligation which is established. Contracts are perfected by mere consent manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract.72 Once perfected, they bind the contracting parties and the obligations arising therefrom have the form of law between the parties which must be complied with in good faith. The parties are bound not only to the fulfillment of what has been expressly stipulated but also to the consequences which, according to their nature, may be in keeping with good faith, usage and law.73 There was no contract of sale entered into by the parties based on the Receipts dated July 1985 and June 16, 1986, signed by Perlita Ventura and the letter of petitioner to respondent dated July 25, 1986. By the contract of sale, one of the contracting parties obligates himself to transfer the ownership of and deliver a determinate thing and the other, to pay therefor a price certain in money or its equivalent. 74 The absence of any of the essential elements will negate the existence of a perfected contract of sale. As the Court ruled in Boston Bank of the Philippines v. Manalo:75 A definite agreement as to the price is an essential element of a binding agreement to sell personal or real property because it seriously affects the rights and obligations of the parties. Price is an essential element in the formation of a binding and enforceable contract of sale. The fixing of the price can never be left to the decision of one of the contracting parties. But a price fixed by one of the contracting parties, if accepted by the other, gives rise to a perfected sale.76 A contract of sale is consensual in nature and is perfected upon mere meeting of the minds. When there is merely an offer by one party without acceptance of the other, there is no contract.77 When the contract of sale is not perfected, it cannot, as an independent source of obligation, serve as a binding juridical relation between the parties.78 Respondent’s reliance on petitioner’s letter to him dated July 25, 1986 is misplaced. The letter reads in full: 72586 Dear Martin & Ising, Enclosed for your information is the letter written by my husband to Perlita. I hope that you will be able to convince your cousin that it’s to her best interest to deposit the balance of your payment to me of P39,000.00 in my bank acct. per our agreement and send me my bank book right away so that we can transfer the title of the property. Regards, Amie 79 We have carefully considered the letter of Perlita Ventura, dated July 18, 1986, and the letter of Eugene Roberts, dated July 25, 1986, where Ventura admitted having used the money of petitioner amounting to P39,000.00 without the latter’s knowledge for the plane fare of Ventura’s parents. Ventura promised to refund the amount of P39,000.00, inclusive of interests, within one year.80 Eugene Roberts berated Ventura and called her a thief for stealing his and petitioner’s money and that of respondent’s wife, Ising, who allegedly told petitioner that she, Ising, loaned the money to her parents for their plane fare to the USA. Neither Ventura nor Eugene Roberts declared in their letters that Ventura had used the P250,000.00 which respondent gave to her. Petitioner in her letter to respondent did not admit, either expressly or impliedly, having received P211,000.00 from Ventura. Moreover, in her letter to petitioner, only a week earlier, or on July 18, 1986, Ventura admitted having spent the P39,000.00 and pleaded that she be allowed to refund the amount within one (1) year, including interests. Naririto ang total ng pera mo sa bankbook mo, P55,000.00 pati na yong deposit na sarili mo at bale ang nagalaw ko diyan ay P39,000.00. Huwag kang magalala ibabalik ko rin sa iyo sa loob ng isang taon pati interest. Ate Per81 1awphi1.net It is incredible that Ventura was able to remit to petitioner P211,000.00 before July 25, 1986 when only a week earlier, she was pleading to
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
petitioner for a period of one year within which to refund the P39,000.00 to petitioner. It would have bolstered his cause if respondent had submitted an affidavit of Ventura stating that she had remitted P211,000.00 out of the P250,000.00 she received from respondent in July 1985 and June 20, 1986. IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed Decision of the Court of Appeals in CAG.R. CV No. 69034 is REVERSED and SET ASIDE. The Decision of the Metropolitan Trial Court, affirmed with modification by the Regional Trial Court, is AFFIRMED. SO ORDERED.
EJECTMENT AND LEASE Mariel Angela Piedad Soriano
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