Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No.

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 Pajuyos 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 attorneys 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 EJECTMENTANDLEASE 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 Guevaras 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 Guevarras petition for review because it was filed out of time. Moreover, it was Guevarras counsel and not Guevarra who signed the certification against forum-shopping. On 14 December 2000, the Court of Appeals issued a resolution denying Pajuyos 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, Guevarras refusal to vacate the house on Pajuyos demand made Guevarras 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 Guevarras 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 Guevarras 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. EJECTMENTANDLEASE Mariel Angela Piedad Soriano

In denying Pajuyos motion for reconsideration, the appellate court debunked Pajuyos claim that Guevarra filed his motion for extension beyond the period to appeal. The Court of Appeals pointed out that Guevarras motion for extension filed before the Supreme Court was stamped "13 December 1996 at 4:09 PM" by the Supreme Courts Receiving Clerk. The Court of Appeals concluded that the motion for extension bore a date, contrary to Pajuyos 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 Pajuyos argument that the appellate court should have dismissed the petition for review because it was Guevarras 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 Respondents 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 respondents 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 Guevarras petition for review because the RTC decision had already become final and executory when the appellate court acted on Guevarras 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 Guevarras 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 EJECTMENTANDLEASE 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. Guevarras 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 squatters 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 Liboros 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 Guevarras 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 Courts 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 Guevarras 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 Guevarras favor that Pajuyo raised the procedural issues against Guevarras 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 courts jurisdiction after voluntarily submitting to it is against public policy.26 In his Comment before the Court of Appeals, Pajuyo also failed to discuss Guevarras failure to sign the certification against forum shopping. Instead, Pajuyo harped on Guevarras counsel signing the verification, claiming that the counsels verification is insufficient since it is based only on "mere information." A partys failure to sign the certification against forum shopping is different from the partys 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 EJECTMENTANDLEASE 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 partys 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 defendants 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 partys 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 owners 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 EJECTMENTANDLEASE 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 EJECTMENTANDLEASE 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 EJECTMENTANDLEASE 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 Guevarras 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 Guevarras 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 Pajuyos 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, silay 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 Pajuyos demand but Guevarra broke his promise and refused to heed Pajuyos 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 formers 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 defendants 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 Pajuyos 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. Guevarras refusal to comply with Pajuyos demand to vacate made Guevarras 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

EJECTMENTANDLEASE Mariel Angela Piedad Soriano

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 tenants 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 Guevarras recognition of Pajuyos 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 Pajuyos withdrawal of his permission to Guevarra terminated the Kasunduan. Guevarras 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 Pajuyos 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. Pajuyos 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 ones 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 EJECTMENTANDLEASE 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. Attorneys Fees and Rentals The MTC and RTC failed to justify the award of P3,000 attorneys fees to Pajuyo. Attorneys fees as part of damages are awarded only in the instances enumerated in Article 2208 of the Civil Code. 83 Thus, the award of attorneys fees is the exception rather than the rule. 84 Attorneys 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 attorneys 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 attorneys fees is deleted. No costs. SO ORDERED. Davide, Jr., Panganiban, Ynares-Santiago, and Azcuna, JJ., concur.

EJECTMENTANDLEASE Mariel Angela Piedad Soriano

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 attorneys fees. Private respondents appealed the MTCs 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. EJECTMENTANDLEASE 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 Courts 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 formers 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 defendants 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 EJECTMENTANDLEASE 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 plaintiffs 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 defendants possession was with plaintiffs 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 defendants 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 plaintiffs 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, defendants 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 Muoz 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 petitioners 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 EJECTMENTANDLEASE 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, petitioners theory that its cause of action is for unlawful detainer. First, these arguments advance the view that respondents occupation of the property was unlawful at its inception. Second, they counter the essential requirement in unlawful detainer cases that petitioners 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.

EJECTMENTANDLEASE Mariel Angela Piedad Soriano

Republic of the Philippines SUPREME COURT ManilaSECONDDIVISION G.R.No.83982January12,1990 JESUSC.JAKIHACA,petitioner, vs. SPS.LILIAAQUINOandAPOLONIOAQUINO,JOSETORALDE,andHON.EMMACENIDOZAONA,respondents. RomeoC.SanPedroforpetitioner. JuanR.Morenoforrespondents. PARAS,J.: OnSeptember10,1986,petitionerJesusJakihacafiledanejectmentsuitagainstrespondentsspousesLiliaAquinoandApolonioAquino, andJoseToraldebeforetheMunicipalTrialCourtofSanMateo,Rizal,docketedasCivilCaseNo.616,onaccountofthelatter'srefusal toremovetheirhouseswhichtheyhaveallegedlyillegallyconstructedwithouttheknowledgeandconsentandagainstthewillofthe formeronaresidentiallandsituatedinBuntongPalay,Ampid,SanMateo,coveredbyTCTNo.N103650,despiteverbaldemand. Initially, the matter was referred to the Barangay Captain of Ampid, San Mateo, Rizal, for conciliation processes pursuant to the requirementsofP.D.No.1508.ButduetorepeatedrefusalofrespondentstoappearbeforetheBarangayLupon,theLuponChairmanand Secretarythereafterissueda"certificationtofileaction." ServedwithsummonspursuanttotheRulesonSummaryProcedure,thedefendantsonNovember3,1986filedananswerwithSpecial andAffirmativeDefensesallegingamongothers,thattherewasaverbalcontractoftenancybetweenthedefendantsandtheformerowner ofthelandinquestionwhichtheyplantedtofruitbearingtreesanddevotedthesameprimarilytoriceandcornproducts,andsotherefore, theycannotbeejectedundertheLandReformLawmoreparticularlyP.D.No.1fromthislandwhichtheyhadoccupiedandcultivated formorethanten(10)yearswiththeconsentoftheformerownerGloriaGener.Inaddition,theysaidthatthereisnoshowingthatthe casewasfirstbroughttotheattentionoftheMinistryofAgrarianReformforcertificationthatthiscaseisproperfortrialbeforesaid Court. OnDecember22,1987,therespondenttrialcourtfoundthattheprivaterespondentsarenotagriculturaltenantfarmersofthelandin question,eitherthrough'itsformerownerGloriaGenerorthroughthepresentownerpetitionerJesusJakihacathatprivaterespondents enteredthepremisessome10to20yearsagoandbuilttheirhousesthereonbytolerancefromtheformerownerGloriaGenerandassuch theyareboundbytheirimpliedpromisethattheywillvacatethelandupondemand.Privaterespondentswereorderedto:(1)removetheir respectivehousesontheportionofthelandoccupiedbythemandsurrenderpossessionthereoftothepetitioner;(2)paythepetitioner jointlyandseverallytheamountofP3,000.00forattorney'sfees;and(3)reimbursethepetitionerforthecostofthesuit.Theirclaimfor moralandexemplarydamageswasdismissedforlackofmerit. OnappealbytheprivaterespondentstotheRegionalTrialCourt,saidappellatecourtonApril8,1988dismissedthecaseontheground thatthelowercourtactedwithoutjurisdictionasthecomplaintshowsnothingwhentheverbaldemandtoremovethehousesonthelotof thepetitionerwasmadeontheprivaterespondents.(DecisionoftheRTC,p.13,Rollo). PetitionerfiledamotionforreconsiderationoftheorderofdismissalonApril21,1988whichwasdeniedonJune25,1988.Notsatisfied, thispetitionwasfiledonJuly12,1988.OnMarch15,1989,thisCourtinaminuteresolutiongaveduecoursetothepetition. PetitionerclaimsthattheRegionalTrialCourterredindismissingCivilCaseNo.616forlackofjurisdictionoftheMunicipalTrialCourt. Ontheotherhand,privaterespondentscontendedthatthepetitionwasfiledoutoftime;thatthepetitionwasfiledwiththewrongcourt; thattheMunicipalTrialCourthasnojurisdictionoverthesubjectmatteroftheaction;andthattherewasnoallegationinthecomplaintof priorphysicalpossessionofthelandbythepetitioner. Thepetitionisimpressedwithmerit. Therecordsshowthatthecomplaintexplicitlyallegedthat"plaintiffverballyaskedthedefendantstoremovetheirhousesonthelotofthe formerbutthelatterrefusedandstillrefusetodosowithoutjustandlawfulgrounds."(p.44,Rollo)Suchissufficientcompliancewith thejurisdictionalrequirements,inaccordancewiththedoctrinelaiddowninthecaseofHauteav.Magallon,12SCRA514,towit:

EJECTMENTANDLEASE Mariel Angela Piedad Soriano

Anallegationinanoriginalcomplaintforillegaldetainerthatinspiteofdemandsmadebytheplaintiffthedefendants hadrefusedtorestoretheland,isconsideredsufficientcompliancewiththejurisdictionalrequirementofprevious demand. Astowhetherornotthedemandwasbroughtwithintheoneyearperiod,thisWehavetosay.Asageneralrule,jurisdictionoverthe subjectmatterofacasemaybeobjectedtoatanystageoftheproceedingevenonappeal,butthisisnotwithoutexception.Inthecaseof Tijamv.Sibonghanoy,23SCRA30,citedinTejonesv.Cironella,159SCRA104,Weheld: Itisnotrightforapartywhohasaffirmedandinvokedthejurisdictionofacourtinaparticularmattertosecurean affirmativerelieftoafterwardsdenythatsamejurisdictiontoescapepenalty.Uponthissameprincipleiswhatwesaid ...totheeffectthatwefrownupontheundesirablepracticeofapartysubmittinghiscasefordecisionandthen acceptingthejudgmentonlyiffavorableandattackingitforlackofjurisdiction. NowhereintheAnswerofrespondentscontainanallegationattackingthejurisdictionoftheMunicipalTrialCourtbasedonthe issueondemand.Again,inPNBv.IntermediateAppellateCourt,143SCRA305,Weheld: Whilepetitionerscouldhavepreventedthetrialcourtfromexercisingjurisdictionoverthecasebyseasonablytaking exceptionthereto,theyinsteadinvoketheverysamejurisdictionbyfilingananswerandseekingaffirmativerelief fromit.Whatismore,theyparticipatedinthetrialofthecasebycrossexaminingrespondentPlanas.Uponthat premise,petitionerscannotnowbeallowedbelatedlytoadoptaninconsistentposturebyattackingthejurisdictionof thecourttowhichtheyhadsubmittedthemselvesvoluntarily.(p.48,Rollo) Anotherreasonforthelowercourt'slackofjurisdictionoverthesubjectmatterasallegedbytherespondentsintheiranswertothe complaintfiledwiththeMunicipalTrialCourt,wasthatsaidcourthasnojurisdictiontotrythecaseastheyaretenantsfarmersandthat assuchtheycannotbeejectedfromtheirfarmholdingswithoutacertificationbytheSecretaryofAgrarianReformthatthecaseisproper forhearing.Ontheotherhand,petitionersarguethatwhentheMunicipalTrialCourtrequiredthemtosubmittheirrespectiveposition papers,respondentdidnotraisethisparticularissueanymorebutinsteadcenteredontheissueofactualpossessionandtheelementsof forcibleentryandillegaldetainer.Petitioners,intheirpositionpaper,attachedthereportofMr.MainesoftheAgrarianOfficewhich categoricallystatesthatthereisnoevidencewhatsoevertoshowthatthesubjectlandisdevotedtotheproductionofriceandcorn;that theoccupantsarenotsharingwiththepresentlandowner,hence,theyareclassifiedasillegaloccupants;thatthesubjectlandisnot tenanted,notdevotedtotheproductionofpalayand/orcorn,hence,notcoveredbyP.D.No27ortheOperationLandTransferofthe government(p.47,Rollo).Consideringthereportofsaidoffice,theassumptionofjurisdictionbytheMunicipalTrialCourtofSanMateo, Rizalwasproper. Respondentscontendthatthepetitionwasfiledoutoftime.TheyallegethatwhenpetitionerreceivedthedecisionoftheRegionalTrial CourtonApril20,1988andtheappealtothisCourtwasfiledonlyonJuly12,1988oronlyaftera3monthperiod,suchappealwas definitelyoutsidethe15dayreglementaryperiodwithinwhichtoappeal.Respondentsaddedthatthemotionforreconsiderationfiled withsaidRegionalTrialCourtdidnotstoptherunningoftheperiodwithinwhichtovalidlyfilehisappeal.Theinstantcase,beingan ejectment case was prosecuted under the Rule on Summary Procedure where it expressly prohibits a Motion for Reconsideration. (Memorandumforprivaterespondents,p.49,Rollo). Respondentsareinerror.TheRuleonSummaryProcedureappliesonlyincasesfiledbeforetheMetropolitanTrialCourtandMunicipal TrialCourts,pursuanttoSection36ofBatasPambansaBlg.129.SummaryprocedureshavenoapplicationtocasesbeforetheRegional TrialCourts.Hence,whentherespondentsappealedthedecisionoftheMunicipalTrialCourttotheRegionalTrialCourt,theapplicable rulesarethoseofthelattercourt. Respondentslikewisecontendthatthepetitionwasfiledwiththewrongcourt.Again,theyaremistaken. InthecaseofLacsamanav.SecondSpecialCasesDivisionoftheIntermediateAppellateCourt,143SCRA643,Weheldthatthefinal judgmentororderoftheRegionalTrialCourtinanappealfromthefinaljudgmentororderoftheMetropolitanTrialCourt,Municipal TrialCourtandMunicipalCircuitTrialCourt,maybeappealedtotheCourtofAppealsthroughapetitionforreviewinaccordancewith Section22oftheInterimRules,ortotheSupremeCourtthroughapetitionforreviewoncertiorariinaccordancewithRule45ofthe RulesofCourtandSection25oftheInterimRules.Clearly,thepetitionersfiledthisappealwithapropercourt. PREMISESCONSIDERED,thepetitionisherebyGRANTED.ThedecisiondatedApril8,1988andtheorderdatedJune25,1988both oftheRegionalTrialCourt,Branch76,SanMateo,Rizal,inCivilCaseNo.415,areherebySETASIDE.ThedecisionoftheMunicipal TrialCourtofSanMateo,Rizal,datedDecember22,1987inCivilCaseNo.616isherebyREINSTATED. SOORDERED.

EJECTMENTANDLEASE Mariel Angela Piedad Soriano

RepublicofthePhilippines SUPREMECOURT Manila THIRDDIVISION G.R.No.104828January16,1997 SPOUSESRAFAELBENITEZANDAVELINABENITEZ,petitioners, vs. COURTOFAPPEALS,SPOUSESRENATOMACAPAGALandELIZABETHMACAPAGAL,respondents. PANGANIBAN,J.: Maypossessionofalotencroacheduponbyapartofanother'shouseberecoveredinanactionforejectment? ThisisthemainquestionraisedbythepetitionforreviewoncertiorariassailingtheResolution1oftheCourtofAppeals,SixthDivision,
2

datedMarch24,1992,inCAG.R.SPNo.26853denyingduecoursetopetitioner'sappealandaffirmingthedecisionoftheRegional TrialCourtofPasiginCivilCaseNo.61004,whichinturnaffirmedthedecisionoftheMetropolitanTrialCourtofSanJuan,Metro Manila,Branch58. TheFacts OnJanuary22,1986,petitionersRafaelandAvelinaBenitezpurchaseda303squaremeterparceloflandwithimprovementfromthe CaviteDevelopmentBank,coveredbyTransferCertificateofTitleNo.41961(now,TCTNo.55864). Subsequently, private respondents Renato and Elizabeth Macapagal bought a 361squaremeter lot covered by TCT No. 40155. On September18,1986,theyfiledCivilCaseNo.53835withtheRegionalTrialCourtofPasig,Branch157againstpetitionersforthe recoveryofpossessionofanencroachedportionofthelottheypurchased.Thepartieswereabletoreachacompromiseinwhichprivate respondentssoldtheencroachedportiontopetitionersattheacquisitioncostofOneThousandPesos(P1,000.00)persquaremeter. OnJuly17,1989,privaterespondentspurchasedstillanotherproperty,a285.70squaremeterlotcoveredbyTCTNo.3249R,adjacentto that ofpetitioners.After arelocationsurvey wasconducted,privaterespondentsdiscoveredthatsome46.50squaremetersoftheir propertywasoccupiedbypetitioners'house.Despiteverbalandwrittendemands,petitionersrefusedtovacate.Alastnoticetovacatewas senttopetitionersonOctober26,1989. OnJanuary18,1990,privaterespondentsfiledwiththeMetropolitanTrialCourtofSanJuan,Branch58,CivilCaseNo.61004for ejectmentagainstpetitioners.TheMeTCofSanJuandecidedinfavoroftheformer,withthefollowingdisposition:3 WHEREFORE,inviewofalltheforegoing,judgmentisherebyrenderedfortheplaintiffsandagainstthedefendantsordering themandallpersonsclaimingrightsunderthemtovacateandsurrenderpossessionofthesubjectpremisestotheplaintiffsas wellastopaythefollowing: 1.TheamountofP930.00amonthstartingJuly17,1989untiltheyfinallyvacatethesubjectpremises; 2.TheamountofP5,000.00forandasattorney'sfees;and 3.Costofsuit. Onappeal,theRegionalTrialCourtofPasig,Branch167,affirmedsaiddecision.4TheRTCsaid:5 Thecontroversyinthiscaseisnotanencroachmentoroverlappingoftwo(2)adjacentpropertiesownedbytheparties.Itisa casewhereapartofthehouseofthedefendantsisconstructedonaportionofthepropertyoftheplaintiffs.Sothatasnew owneroftherealproperty,whohasarighttothefullenjoymentandpossessionoftheentireparcelcoveredbyTransfer CertificateofTitleNo.41961,plaintiffshavetherighttodemandthatdefendantsremovetheportionofthehousestandingon plaintiff'srealty... Thedispositiveportionthereofreads:6

EJECTMENTANDLEASE Mariel Angela Piedad Soriano

WHEREFORE,findingnoreversibleerrorinthedecisionappealedfrom,itbeingmoreconsistentwiththefactsandthelaw applicable,thesameisherebyAFFIRMEDintoto.Costsagainstthedefendantappellants. SOORDERED. Onfurtherappeal,therespondentCourtfoundnomeritinpetitioners'plea.InaResolutiondatedMarch24,1992,theSixthDivisionof saidCourtfoundthepetitiontobeamererehashoftheissuesandargumentspresentedbeforethelowercourts.Itruledinpartthat:7 3)Petitionerswerefullyawarethatpartoftheirhouseencroachedontheirneighbor'sproperty,whilerespondentsbecameaware ofitonlyafterpurchasingsaidproperty.Petitionerscannotclaimgoodfaithasagainsttherespondents. 4)Sincepetitionersarenotbuildersingoodfaith,theycannotdemandthatrespondentssellthedisputedportion;whatthelaw providesisthatthebuildersinbadfaithcanbeorderedtodismantlesaidstructureattheirownexpense.Intheinterimperiod thatpetitioners'structureremains,theyshouldpayreasonablerentuntiltheyremovethestructure. Thedispositiveportionthereofreads:8 Forreasonsindicated,Wefindtheappealwithoutmeritanddenyitduecourse,withcostsagainstthepetitioners. SOORDERED. Hence,thispetition. TheIssues Themainissueiswhetherthepossessionoftheportionoftheprivaterespondents'landencroachedbypetitioners'housecanberecovered throughanactionofejectment,notaccionpubliciana.Corollarily,petitionersquestion(a)thevalidityoftheimpositionof"rental"forthe occupancyoftheencroachedportion,(b)thedenialoftheirclaimedpreemptiverighttopurchasetheencroachedportionoftheprivate respondents'land,and(c)theproprietyofafactualreviewoftheCA'sfindingofbadfaithonthepartofpetitioners. Inanutshell,petitionersinsistthattheMeTChadnojurisdictionoverthecaseatbarbecauseitsrealnatureis accionpubliciana or recoveryofpossession,notunlawfuldetainer.Itisnotforcibleentrybecauseprivaterespondentsdidnothavepriorpossessionofthe contestedpropertyaspetitionerspossesseditaheadofprivaterespondents.Itisnotunlawfuldetainerbecausepetitionerswerenotthe privaterespondents'tenantsnorvendeeunlawfullywithholdingpossessionthereof.Saidcourtalsohasnojurisdictiontoimposepayment of"rentals"asthereisnolessorlesseerelationshipbetweentheparties.Theyprayforareviewofthefactualfindingofbadfaith,insisting thatthefactsupholdtheirposition.Duetotheirallegedgoodfaith,theyclaimthepreemptiverighttopurchasethelitigatedportionasa matterofcourse.Finally,theyinsistthattheawardofattorney'sfeesisunwarrantedasprivaterespondentsallegedlyhadknowledgeofthe encroachmentpriortotheiracquisitionofsaidland. PrivaterespondentscounterthatpetitionersareestoppedfromquestioningthejurisdictionoftheMeTCaftertheyvoluntarilyparticipated inthetrialonthemeritsandlost;thatthereisnolawgivingpetitionerstheoptiontobuytheencroachedproperty;andthatpetitioners acted inbad faithbecause theywaivedin theirdeedofsaletheusualseller'swarrantyastotheabsenceofanyandallliensand encumbrancesontheproperty,therebyimplyingtheyhadknowledgeoftheencroachmentatthetimeofpurchase. TheCourt'sRuling Thepetitionlacksmeritandshouldbedenied. FirstIssue:MeTCHasJurisdiction Thejurisdictionalrequirementsforejectment,asborneoutbythefacts,are:afterconductingarelocationsurvey,privaterespondents discoveredthataportionoftheirlandwasencroachedbypetitioners'house;noticestovacateweresenttopetitioners,thelastonebeing datedOctober26,1989;andprivaterespondentsfiledtheejectmentsuitagainstpetitionersonJanuary18,1990orwithinone(1)year fromthelastdemand. Privaterespondents'causeofactionspringsfromSec.1,Rule70oftheRevisedRulesofCourt,whichprovides: Sec.1.Whomayinstituteproceedings,andwhenSubjecttotheprovisionsofthenextsucceedingsection,apersondeprived ofthepossessionofanylandorbuildingbyforce,intimidation,threat,strategy,orstealth,oralandlord,vendor,vendee,orother personagainstwhomthepossessionofanylandorbuildingisunlawfullywithheldaftertheexpirationorterminationofthe righttoholdpossession,byvirtueofanycontract,expressorimplied,orthelegalrepresentativesorassignsofanysuch landlord,vendor,vendee,orotherperson,may,atanytimewithinone(1)yearaftersuchunlawfuldeprivationorwithholdingof possession,bringanactionintheproperinferiorcourtagainstthepersonorpersonsunlawfullywithholdingordeprivingof

EJECTMENTANDLEASE Mariel Angela Piedad Soriano

possession,oranypersonorpersonsclaimingunderthem,fortherestitutionofsuchpossession,togetherwithdamagesand costs... Thatpetitionersoccupiedthelandpriortoprivaterespondents'purchasethereofdoesnotnegatethelatter'scaseforejectment.Prior possessionisnotalwaysacondition sinequanon inejectment. 9 Thisisoneofthedistinctionsbetweenforcibleentryandunlawful detainer.Inforcibleentry,theplaintiffisdeprivedofphysicalpossessionofhislandorbuildingbymeansofforce,intimidation,threat, strategy or stealth; thus, he must allege and prove prior possession. But in unlawful detainer, the defendant unlawfully withholds possessionaftertheexpirationorterminationofhisrighttheretounderanycontract,expressorimplied.Insuchacase,priorphysical possessionisnotrequired.10 Possessioncanalsobeacquired,notonlybymaterialoccupation,butalsobythefactthatathingissubjecttotheactionofone'swillorby theproperactsandlegalformalitiesestablishedforacquiringsuchright. 11Possessionoflandcanbeacquiredupontheexecutionofthe deedofsalethereofbyitsvendor.Actualorphysicaloccupationisnotalwaysnecessary. Inthecasebeforeus,consideringthatprivaterespondentsareunlawfullydeprivedofpossessionoftheencroachedlandandthatthe actionfortherecoveryofpossessionthereofwasmadewithintheoneyearreglementaryperiod,ejectmentistheproperremedy. 12The MeTCofSanJuanhadjurisdiction. Inaddition,aftervoluntarilysubmittingthemselvestoitsproceedings,petitionersareestoppedfromassailingthejurisdictionofthe MeTC. 13 ThisCourtwillnotallowpetitionerstoattackthejurisdictionofthetrialcourtafterreceivingadecisionadversetotheir position. SecondIssue:CompensationForOccupancy PetitionerserroneouslyconstruedtheorderoftheMeTCtopayprivaterespondentsNineHundredPesos(P930.00)amonthstartingJuly 17,1989untilthey(petitioners)finallyvacatethesubjectpremisesas"rentals".Technically,suchawardisnotrental,butdamages. DamagesarerecoverableinejectmentcasesunderSection8,Rule70oftheRevisedRulesofCourt. 14Thesedamagesarisefromtheloss oftheuseandoccupationoftheproperty,andnotthedamageswhichprivaterespondentsmayhavesufferedbutwhichhavenodirect relationtotheirlossofmaterialpossession.15DamagesinthecontextofSection8,Rule70islimitedto"rent"or"fairrentalvalue"for theuseandoccupationoftheproperty.16 Thereisnoquestionthatpetitionersbenefitedfromtheiroccupationofaportionofprivaterespondents'property.Suchbenefitjustifies theawardofthedamagesofthiskind.Nemocumalterius,detrimentilocupletaripotest.Nooneshallenrichhimselfattheexpenseof another. ThirdIssue:OptionToSellBelongsToOwner Article448oftheCivilCode17isunequivocalthattheoptiontosellthelandonwhichanotheringoodfaithbuilds,plantsorsowson, belongstothelandowner. Theoptionistosell,nottobuy,anditisthelandowner'schoice.Notevenadeclarationofthebuilder,planter,orsower'sbadfaithshifts thisoptiontohimperArticle450oftheCivilCode. 18ThisadvantageinArticle448isaccordedthelandownerbecause"hisrightis older,andbecause,bytheprincipleofaccession,heisentitledtotheownershipoftheaccessorything." 19Therecanbenopreemptive righttobuyevenasacompromise,asthisprerogativebelongssolelytothelandowner.Nocompulsioncanbelegallyforcedonhim, contrarytowhatpetitionersasksfromthisCourt.Suchanorderwouldcertainlybeinvalidandillegal.Thus,thelowercourtswerecorrect inrejectingthepetitioners'offertobuytheencroachedland. FourthIssue:AReviewofFactualFindingsIsUnwarranted PetitionersaskthisCourttoreviewtheallegederroroftherespondentCourtinappreciatingbadfaithontheirpart.Accordingtothem, thisiscontradictorytothefactthatprivaterespondentsacquiredtheirlotanddiscoveredtheencroachmentafterpetitionersboughttheir house.Aftercarefuldeliberationonthisissue,thisCourtfindsthispetitionforreviewinadequateasitfailedtoshowconvincinglya reversible error on the part of the respondent Court in this regard. Thus, for very good reasons, this Court has consistently and emphaticallydeclaredthatreviewofthefactualfindingsoftheCourtofAppealsisnotafunctionthatisnormallyundertakeninpetitions forreviewunderRule45oftheRulesofCourt.Suchfindings,asageneralrule,arebindingandconclusive. 20Thejurisdictionofthis Courtislimitedtoreviewingerrorsoflawunlessthereisashowingthatthefindingscomplainedofaretotallydevoidofsupportinthe recordsorthattheyaresoglaringlyerroneousastoconstitutereversibleerror.21

EJECTMENTANDLEASE Mariel Angela Piedad Soriano

EvenrespondentCourthastakennoteoftheinadequacyofthepetitionbeforeit,asitwrylysaid:22 ThePetitionforReviewisnotcertainlyamanifestationofclaritynoranexampleofawellorganizedsummationofpetitioners' causeofaction... xxxxxxxxx Acarefulscrutinyoftheaboveissuesdisclosesthattheyaremererepetitionsinarehashedformofthesameissueswiththe samesupportingargumentsraisedbypetitionerswhentheyappealedfromthedecisionofthe(MeTC)totheRTC... Thispetitionisnodifferent.WesharetheforegoingsentimentsoftherespondentCourt.Inessence,respondentCourtmerelyaffirmedthe decisionoftheMeTC.TheCourtofAppeal'sfindingofpetitioners'badfaithdidnotalternoraffecttheMeTC'sdisposition.Petitioners wantthisCourttodeclarethemingoodfaithandtodeterminetheirrightsunderArticle448,CivilCode.However,themerefactthatthey boughttheirpropertyaheadoftheprivaterespondentsdoesnotestablishthispoint.Nordoesitprovethatpetitionershadnoknowledgeof theencroachmentwhentheypurchasedtheirproperty.RelianceonthepresumptioninArticle526oftheCodeismisplacedinviewofthe declarationoftherespondentCourtthatpetitionersarenotbuildersingoodfaith. Whatpetitionerspresentedaremereallegationsandarguments,withoutsufficientevidencetosupportthem.Assuch,wehavenoground todepartfromthegeneralruleagainstfactualreview. Insum,thepetitionhasnotshowncogentreasonsandsufficientgroundstoreversetheunanimousrulingofthethreelowercourts.The MeTC,RTCandtheCourtofAppealswereallinagreementinsustainingprivaterespondents'rights.Andweupholdthem. WHEREFORE,thepetitionisDENIED.TheassailedResolutionisherebyAFFIRMED. SOORDERED.

EJECTMENTANDLEASE Mariel Angela Piedad Soriano

RepublicofthePhilippines SUPREMECOURT Manila SECONDDIVISION G.R.No.129313October10,2001 SPOUSESMA.CRISTINAD.TIRONAandOSCARTIRONA,SPOUSESMA.PAZD.BAUTISTAandCESARBAUTISTA, SPOUSESMA.ARANZAZUD.ORETAandCANUTOORETA,SPOUSESMA.CORAZOND.BAUTISTAandPABLOS. BAUTISTA,JR.,andDEOS.DIONISIO,petitioners, vs. HON.FLOROP.ALEJOasPresidingJudge,RegionalTrialCourtofValenzuela,MetroManila,Branch172,JUANITO IGNACIOandLUISNUEZ,respondents. QUISUMBING,J.: Thispetitionforreviewassailsthejointdecision1datedApril10,1997,oftheRegionalTrialCourtofValenzuela,Branch172,inCivil CasesNos.5169V97and5093V97. Thefactualbackgroundforthispetitionareculledfromtherecordsofthecases. A.CivilCaseNo.5093V97: OnMarch25,1996,hereinpetitionerssuedprivaterespondentLuisNuezbeforetheMetropolitanTrialCourtofValenzuela,Branch81. ThesuitwasdocketedasCivilCaseNo.6633forejectment.PetitionersclaimedtobeownersofvariousfishpondlotslocatedatColoong, Valenzuela.2Theyalleged,amongothersthat:(1)onJanuary20,1996,privaterespondentNuez,"bymeansofforce,stealth,orstrategy, unlawfully entered the said fishpond lots and occupied the same" against their will, thereby depriving them of possession of said fishpond;(2)NuezillegallyoccupiedahouseownedbyandbuiltonthelotofpetitionerDeoDionisio;and(3)Nuezunlawfully operatedandusedpetitioners'sfishpond,despitetheirdemandstovacatethesame.PetitionersprayedthatthecourtorderNueztovacate Dionisio's house; surrender possession of the fishpond to them; removeallmilkfishfingerlingsathisexpense;andpayamonthly compensationofP29,000.00fromJanuary20,1996tothetimehesurrenderspossession,withinterestattwelvepercent(12%)yearlyuntil fullypaid.1wphi1.nt Nuezadmittedinhisanswersthatpetitionersownedthefishponds,butdeniedtheotherallegations.Heraisedthefollowingaffirmative defenses:(1)theMeTChadnojurisdictionoverthecase,forpetitioners'failuretoallegepriorphysicalpossessionintheircomplaint;(2) petitioners'actionwasprematureinviewofthependencyofacomplainthefiledwiththeDepartmentofAgrarianReformAdjudication Board(DARAB),docketedasCaseNo.IVMM009995R,wheretheissueofpossessionintheconceptoftenancyisthesameasthat raisedbypetitionersinCivilCaseNo.6633;and(3)petitionersareguiltyofforumshoppingsincebytheywerefullyawareofthesaid DARABcase.Hemovedthattheejectmentsuitbedismissed. OnOctober1,1996,theMeTCofValenzuela,Branch81,decidedCivilCaseNo.6633asfollows: WHEREFORE,premisesconsidered,judgementisherebyrenderedinfavoroftheplaintiffsandagainstthedefendantandall personsclaimingrightsunderhim: 1.Topeacefullyvacateandsurrenderthesubjectpremisestotheplaintiffs: 2.TopeacefullyvacateandsurrenderthehousebelongingtoplaintiffDeoS.Dionisio; 3.TopaytheamountofP27,000.00amonthasreasonablecompensationfromJanuary20,1996uptothetimehefinallyvacates thesubjectpremises; 4.TopaytheamountofP10,000.00asandforattorney'sfees;and 5.Topaythecostsofsuit. SOORDERED.3 OnNovember15,1996,NuezappealedsaiddecisiontotheRegionalTrialCourtofValenzuela,whichdocketedtheappealasCivilCase No.5093V97. B.CivilCaseNo.5169V97 EJECTMENTANDLEASE Mariel Angela Piedad Soriano

OnMarch25,1996,petitionersalsoinstitutedCivilCaseNo.6632forejectmentagainstprivaterespondentJuanitoIgnaciowiththe MetropolitanTrialCourtofValenzuela,Branch82.TheallegationswereessentiallythesameasthoseagainstprivaterespondentNuez, exceptitisallegedthatIgnacio"alsoillegallyoccupiedthehouseconstructedonthelotof,andbelongingtotheplaintiffSpousesMa.Paz D.BautistaandCesarBautista."PetitionerssoughtthesamereliefprayedforinCivilCaseNo.6633. IgnacioraisedsimilardefensesasthoseofferedbyNuezinCivilCaseNo.6633.LikeNuez,healsomovedfordismissalofthe ejectmentsuitagainsthim. OnFebruary11,1997,theMeTCofValenzuela,Branch82issuedanorderdismissingCivilCaseNo.6633againstIgnacio,thus: WHEREFORE,PREMISESCONSIDERED,defendant'smotiontociteplaintiffsincontemptofcourtisdenied,andhisother motiontodismissthecaseisherebyGRANTED. Accordingly,theaboveentitledcaseisDISMISSEDwithoutpronouncementastocosts. SOORDERED.4 IngrantingIgnacio'sMotiontoDismiss,theMeTCsaid: ItisnowcleartothemindoftheCourtthattheissueofrecoveryofpossessionpursuedbyplaintiffsinthiscaseispendingalso foradjudicationamongotherissuesinDARABCaseNo.IVMM009995.Thereisnodisputethatboththiscaseandthe DARABcaseinvolvethesamerealpropertyoratleast,adjoininglotscoveredbytitlesinthenamesofsomeoftheplaintiffs, whichlotsarealsoinvolvedinthiscase. xxx Clearly,saidDARABcaseisaprejudicialquestiontothecaseatbar,andorviceversa(stressintheoriginal).Thepossibility thatthisCourtandtheDARABmaycomeupwithtwocontradictingdecisionsonissueofpossessionshallalwaysbethere,and sincetheDARABcasewasfilesfirst,thereappearscompellingnecessitytohaltproceedingsinthiscase5 OnFebruary27,1997,petitionersappealedtheforegoingOrdertotheRegionalTrialCourtofValenzuela,whichdocketedtheirappealas CivilCaseNo.5169V97. SinceCivilCasesNos.5093V97and5169V97involvedessentiallythesameparties,thesamesubjectmatter,andthesameissues,the caseswerejointlyheardbeforeBranch172oftheRTCofValenzuela. OnApril10,1997,CivilCasesNos.5093V97and5169V97werejointlydecided. WHEREFORE,judgmentisherebyrenderedasfollows: 1. Affirming the appealed Order of the trial court dated February 11, 1997 dismissing Civil Case No. 6632, with the modificationthattheplaintiffsbemadeliabletopaythecostsofsuit;and 2.ReversingtheappealeddecisionofthetrialcourtdatedOctober1,1996inCivilCaseNo.6633anddismissingtheabove entitledcaseforthereasonsstatedabove.Theplaintiffsareorderedtopaythecostsofsuit. SOORDERED.6 Inrulingagainsthereinpetitioners,theRTCfound: (1)Ascorrectlypointedoutbythecounselforthedefendantsinhismemorandumonappeal,itisnowsettledthatacomplaint forforcibleentrytofallwithinthejurisdictionoftheinferiorcourtmustallegeplaintiffspriorphysicalpossessionofthe propertybyanyofthemeansprovidedinSection1ofRule70oftheRevisedRulesofCourt.Bareallegationinthecomplaint thattheplaintiffwasdeprivedofthepossessionofthepropertyisinsufficienttomaketheactiononeforforcibleentry(citation omitted) Intheinstantcase,whilethecomplainantsallegethatthedefendants(IgnacioinCivilCaseNo.6632andNuezinCivilCase No.6633)bymeansofforce,stealthorstrategy"unlawfullyenteredthesaidfishpondlotsandoccupiedthesameagainstthe willoftheplaintiffs,"thereisnoallegationthattheplaintiffshadpriorphysicalpossessionofthepropertyindispute.The complaint(s)intheaboveentitledcasethereforedidnotfallwithinthejurisdictionofthetrialcourts. (2)TheDARABcase(CaseNo.IVMM009995R)betweenthehereinpartiesandcoveringthesamesubjectmatterwasfiled wasaheadoftheinstantcases.TheallegationintheDARABcomplaintthatthecomplainantsareagriculturalorsharetenantsis opposedtotheclaimoftherespondentsintheiranswerthatthecomplainantsaretheirindustrialpartners.TheDARABcase EJECTMENTANDLEASE Mariel Angela Piedad Soriano

thuspresentedadisputethatisAgrarianReform,thrutheDARAB,isvestedwithexclusivejurisdictionoverallagrarianreform mattersoragrariandisputes. Theprincipalissueintheinstantcasesforforcibleentrywhetherornottoejectthedefendantsfromthefishpondsis necessarily connected with the agrarian dispute now pending resolution before the DARAB. It is therefore beyond the competenceoftheinferiorcourttoresolve. xxx (3)Theplaintiffswerelessthathonestincertifyingunderoaththattheyhavenoknowledgeofanycasependingbeforeany tribunaloragencyinvolvingthesameissuesraisedintheinstantcases.Atthetimeoftheircertification,therewaspending beforetheDARABofacasebetweenthesamepartieswiththesamesubjectmatterandwheretheissueofpossessionasraised in the instant cases is necessarily included in the larger issue of agricultural tenancy. The plaintiffs therefore violated AdministrativeOrderNo.0494oftheSupremeCourt,whichisagroundfordismissal.7 OnMay6,1997,petitionersfileswiththeRTCajointMotionforLeavetoAmendComplaintinCivilCasesNos.6632and6633anda MotionforReconsideration,togetherwiththeproposedAmendedComplaints.OnMay20,1997,theRTCdeniedtheaforementioned motions. Hence,theinstantpetition.PetitionersassignthefollowingaserrorscommittedbytheRTC: 1.THELOWERCOURTERREDINGIVINGPRIMEIMPORTANCETOTHEFAILUREOFPLAINTIFFSTOAVER THEIRCOMPLAINT(S)THATTHEYWEREINPOSSESSIONATTHETIMEOFTHEFORCIBLEENTRYMADEBY PRIVATERESPONDENTS. 2.THELOWERCOURTERREDINFAILINGTOMAKEAFINDINGTHATPLAINTIFFSWEREINPOSSESSIONOF THEIRPROPERTIESATTHETIMEOFFORCIBLEENTRYTHEREUNTOBYPRIVATERESPONDENTS,FORWHICH SHOULDHAVEBEENGRANTEDTOHEREINPETITIONERS. 3. THE PENDENCY OF THE SUIT FILED BY PRIVATE RESPONDENTS IN THE DEPARTMENT OF AGRARIAN REFORMDIDNOTPROSCRIBETHEINSTITUTIONOFTHEEJECTMENTCASE(S). 4.THEREHADBEENNOINFRACTIONONTHEAFFIDAVITOFNONFORUMSHOPPINGREQUIREMENTS. Themainissueforourresolutioninvolvesthejurisdictionofthemetropolitantrialcourts:waspetitioner'sfailuretoallegepriorphysical possessioninacaseforforcibleentryfataltothejurisdictionoftheinferiorcourts?Ancillarythereto,wealsomustinquire(a)whether thependencyoftheCaseNo.IVMM009995RbeforetheDARABbarredthefilingofCivilCasesNos.6632and6633forforcible entry;and(b)whetherpetitionersviolatedSupremeCourtAdministrativeCircularNo.0494proscribingforumshopping. Onthemainissue,petitionerscontendthattheavermentoftheidentitiesofthepersonsinpossessionofthedisputedpropertiesatthetime oftheforcibleentrythereuntoisnotjurisdictionalincharacter.Petitionersarguethatthedeficiency,ifany,couldhavebeenremediedby amendedorsupplementalpleadingsorbythesubmissionofadmissibleevidence.TheypointoutthattheMeTC,Branch81inCivilCase No.6633hadreceivedevidenceofpetitioners'actualpossession,resultinginafindingoffactofactualpossessioninitsDecisionof October1,1996.Itwas,therefore,anerrorfortheRTCtohavedisregardedsaidfindingoffactonthegroundthattherequisitesforthe MeTCtoacquirejurisdictionovertheforcibleentrycaseshadnotbeencompliedwith.ItwaslikewiseerrorfortheRTCtohavedenied theadmissionofpetitioners'AmendedComplaints. PrivaterespondentsarguethatacloserscrutinyoftheallegationsinthecomplaintsinCivilCasesNos.6632and6633filedwiththecourt oforiginwillclearlyshowthatthereisnoallegationwhatsoeverofpriorphysicalpossessiononpetitioners'part.Allthatisaverredis unlawful deprivation by private respondents. They submit that this glaring defect is fatal enough to deprive the inferior court of jurisdictionovertheforcibleentrycases.WithrespecttothedenialofadmissionofpetitionersAmendedComplaints,privaterespondents pointoutthatamendmentsforthepurposeofmakingthecomplaintconferjurisdictionuponthecourtarenotallowed. Thejurisdictionofacourtisdeterminedbytheallegationsofthecomplaint,andtheruleisnodifferentinactionsforejectment.8Thus,in ascertainingwhetherornottheactionisoneforforcibleentryfallingwithintheexclusiveoftheinferiorcourts,theavermentsofthe complaintandthecharacterofthereliefsoughtaretobeexamined.Petitioners'complaintsinCivilCasesNos.6632and6633are virtuallyidentical,saveastothenamesofthedefendantsandtheownersofthehousesallegedlyoccupiedbyprivaterespondents.The pertinentallegationsinCivilCaseNo.6633read: 3)Thatplaintiffsintheirindividualrights,arerespectiveownersinfeesimpleoffishpondlotslocatedatBarangayColoong, MunicipalityofValenzuela,MetroManila,Withareas,lotnumbers,andtitles,xeroxcopiesofwhichareAnnexeshereto

EJECTMENTANDLEASE Mariel Angela Piedad Soriano

xxx 4)ThatonoraboutJanuary20,1996,saiddefendantLuisNuezbymeansofforce,stealthorstrategy,unlawfullyenteredthe saidfishpondlotsandoccupiedthesameagainstthewilloftheplaintiffstherebydeprivingsaidownersofthepossessionofthe same; 5)ThatdefendantLuisNuezalsoillegallyoccupiedthehouseconstructedonthelotof,andbelongingto,plaintiffDeoS. Dionision. 6)Thatthesaiddefendantalsoplantedbangusfingerlingsinthesaidfishpondsanddespitedemandsforthemtoremovethe same and vacate the fishponds still continue to unlawfully, illegally, and wantonly occupy said house and operate said fishpondstothegreatdamageandprejudiceoftheplaintiffs.9 Petitionerssubmitthatthephrase"therebydeprivingsaidownersofthepossessionofthesame"inparagraph4istantamounttoan avermentofpriorphysicalpossessionsinceprivaterespondentscouldnothavedeprivedthemofpossessionunlessthelatterhadbeen previouslyinpossessionofthesubjectproperties. Wearenotpersuaded.Itcannotbeinferredfromtheaforecitedphrasethatthepossessionthatpetitionersweresupposedlydeprivedofisa priorphysicalpossession.Thequestionarises,whatsortofpriorphysicalpossessionistoaverred?Theword"possession"asusedin forcibleentryandunlawfuldetainer,meansnothingmorethan physicalpossession, (stresssupplied)notlegalpossessioninthesense contemplatedincivillaw.10Theallegationmustlikewiseshowpriorityintime.Bothrequisitesarewantinginthephraserelieduponby petitioners. Areadingoftheallegationsinthecomplaintsleadsustoconcludethatpetitioners'actionwasonceforforcibleentry,notunlawful detainer.Thedistinctionsbetweenthetwoactionsare:(1)Inanactionforforcibleentry,theplaintiffmustallegeandprovethathewasin priorphysicalpossessionofthepremisesuntildeprivedthereof,whileinillegaldetainer,theplaintiffneednothavebeeninpriorphysical possession;and(2)inforcibleentry,thepossessionbythedefendantisunlawful abinitio becauseheacquirespossessionbyforce, intimidation,threat,strategy,orstealth,whileinunlawfuldetainer,possessionisoriginallylawfulbutbecomesillegalbyreasonofthe terminationofhisrightofpossessionunderhiscontractwiththeplaintiff.Inpleadingsfilesincourtsofspecialjurisdiction,thespecial factsgivingthecourtjurisdictionmustbespeciallyallegedandsetout.Otherwise,thecomplaintisdemurrable.11Hence,inactionsfor forcibleentry,twoallegationsaremandatoryforthemunicipalcourttoacquirejurisdiction:First,theplaintiffmustallegehisprior physicalpossessionoftheproperty.Second,hemustalsoallegethathewasdeprivedofhispossessionbyanyofthemeansprovidedfor inSection1,Rule70oftheRulesofCourt,namely:force,intimidation,threats,strategy,andstealth.12RecallthatthecomplaintsinCivil CasesNos.6632and6633failedtoallegepriorphysicalpossessionofthepropertyonthepartofpetitioners.Allthatisallegedis unlawfuldeprivationoftheirpossessionbyprivaterespondents.Thedeficiencyisfataltopetitioners'actionsbeforetheMetropolitanTrial Court of Valenzuela. Such bare allegation is insufficient for the MeTC to acquire jurisdiction. No reversible error was, therefore, committedbytheRTCwhenitheldthattheMetropolitanTrialCourtacquirednojurisdictionoverCivilCasesNos.6632and6633for failureofthecomplaintstoaverphysicalpossessionbypetitioners. Butwasthedeficiencyremedied,however,whenpetitionerssubmittedtheirAmendedComplaints? Thepolicyinthisjurisdictionsisthatamendmentstopleadingsarefavoredandliberallyallowedintheinterestsofsubstantialjustice. Thus,amendmentsofthecomplaintmaybeallowedevenifanorderforitsamendmentsofthecomplaintmaybeallowedevenifanorder foritsdismissalhasbeenissuedsolongasthemotiontoamendisfiledbeforetheorderofdismissalacquiredfinality. 13Note,however, thatitisnotahardandfastrule.Anamendmentisnotallowedwherethecourthasnojurisdictionovertheoriginalcomplaintandthe purposeoftheamendmentistoconferjurisdictionuponthecourt, 14orwheretheactionoriginallypleadedinthecomplaintwasoutside thejurisdictionofthecourt.15Wehavecarefullyperusedpetitioners'proposedamendmentsandfoundthemtoincludetheallegationthat petitionerswereinpriorphysicalpossessionofthedisputedfishpondsbeforesaidpossessionwasallegedlydisturbed.Clearly,thepurpose istosidesteptheRTCrulingthatMeTChadnojurisdiction.Overtheircomplaintsandallowtheinferiorcourttoacquirejurisdiction. Thiswecannotallow.Wherethecourtoforiginhadnojurisdictionovertheoriginalcomplaintinthefirstplace,amendmentsmaynotbe had.Itisaxiomaticthatbeforeanamendmentcanbepermitted,thetrialcourtmusthaveacquiredjurisdictionoverthecaseinthefirst instance.16 Regardingthesecondissue,petitionerscontendthattheDARABhadnojurisdictionoverCaseNo.IVMM009995R.Theysubmitthat withthepassageofRepublicActNo.788117 onFebruary20,1995,privatelandsdirectlyandexclusivelyusedforprawnfarmsand fishpondsareexemptfromthecoverageoftheComprehensiveAgrarianReformLaworRepublicActNo.6657.Noagrarianrelationthus subsistedbetweenthepartiesfortheDARABtotakecognizanceof.Thus,litispendentiadidnotbarthefilingofCivilCasesNos.6632 and6633.Stateddifferently,thependencyofCaseNo.IVMM009995RdidnotdivesttheMeTCofitsjurisdictiontohearandtrythe EJECTMENTANDLEASE Mariel Angela Piedad Soriano

forcibleentrycases. PrivaterespondentscontendthatacomparisonbetweenDARABCaseNo.IVMM009995RandCivilCasesNos.6632and6633would showthesameparties,thesamesubjectmatterofcontroversy,andthesameissues.Inotherwords,litispendentialiesandmaybeavailed oftodismissthecasesforforcibleentryfiledwiththeMeTC. Attheoutset,wemustpointoutthatpetitioners'relianceuponRepublicActNo.7881isofftangent.Itisnotdisputedthatatthetimeof thefilingofCivilCasesNos.6632and6633,anagrarianrelation'sdisputewaspendingbeforetheDARAB.Therecordsshowthat privaterespondentsasthecomplainantsinCaseNo.IVMM009995R,wereassertingtenancyrights,includingtherighttopossessionof thedisputedfishpondsorpartsthereof,underRepublicActNos.384418 and1199.19 Privaterespondentswerethusclaimingvested substantiverights,datingbackto1975inthecaseofrespondentIgnacioand1979inthecaseofrespondentNuez,undersubstantive laws.Asubstantivelawisalaw,whichcreates,defines,orregulatesrightsconcerninglife,liberty,orproperty,orthepowersofagencies orinstrumentalitiesfortheadministrationofpublicaffairs.20RepublicActNo.7881,inexemptingprawnandfishpondsfromthecoverage oftheComprehensiveAgrarianReformLawof1988,isasubstantivelaw.Byitsverynatureandessence,substantivelawoperates prospectively21 andmaynotbeconstruedretroactivelywithoutaffectingpreviousorpastrights.Hence,inviewoftheabsenceofa contraryintentinitsprovisions,RepublicActNo.7881shouldbegivenaprospectiveoperationandmaynotaffectrightsclaimedunder previousagrarianlegislation. UnderRule16,Section1oftheRulesofCourt,litispendentiaorpendencyofanotheractionisagroundforthedismissalofthesecond action.RecallthatinthemotionstodismissfiledbyprivaterespondentsinCivilCasesNo.6632and6633,thependencyoftheDARAB casewasoneofthegroundsrelieduponinseekingthedismissalofbothactions.For litis ofthegroundsrelieduponinseekingthe dismissalofbothactions.Forlitispendentiatolie,thefollowingrequisitesmustbesatisfied: 1.Identityofpartiesorrepresentationinbothcases; 2.Identityofrightsassertedandreliefprayedfor; 3.Thereliefmustbefoundedonthesamefactsandthesamebasis;and 4.Identityofthetwoprecedingparticularsshouldbesuchthatanyjudgment,whichmayberenderedintheotheraction,will, regardlessofwhichpartyissuccessful,amounttoresjudicataontheactionunderconsideration.22 Theserequisites,inourview,arepresentinthiscase.Forone,thepartiesintheDARABcaseandintheforcibleentrycasesfiledwiththe MeTCarethesame.Also,thereisidentityofrightsassertedandreliefsprayedfor.TheactioninCaseNo.IVMM009995Risfor "declarationoftenancy,accounting,recoveryofpossession,specificperformance,recoveryofsumofmoney,plusdamages"against petitioners.NotethatthepropertiesthatprivaterespondentsseektorecoverpossessionofintheDARABcaseformpartoftheproperties fromwhichpetitionersseektheejectmentofprivaterespondents.Theevidentandlogicalconclusionthenisthatanydecisionthatmaybe renderedintheDARABcaseregardingthequestionofpossessionwillalsoresolvethequestionofpossessionintheforcibleentrycases. Undergirdingtheprincipleoflitispendentiaisthetheorythatapartyisnotallowedtovexanothermorethanonceregardingthesame subjectmatterandforthesamecauseofaction.Thistheoryisfoundedonthepublicpolicythatthesamemattershouldnotbesubjectof controversyincourtmorethanonceinorderthatpossibleconflictingjudgmentsmaybeavoided,forthesakeofthestabilityintherights andstatusofpersons.TheMeTCofValenzuela,Branch82,recognizedthisdoctrinewhenitdismissedCivilCaseNo.6632toavoid possibilityoftwocontradictorydecisionsonthequestionofpossessionemanatingfromtheDARABandthetrialcourt.Inturn,theRTC wascorrectinfindingthattheissueofpossessionwasinextricablyintertwinedwiththeagrariandispute,anissuewhichwasbeyondthe jurisdictionandcompetenceoftheinferiorcourttosetlle.Insodoing,theRTCdeferredtotheprimaryjurisdictionandadministrative expertiseoftheDARABtosettleagrariancases.Thus,weareconstrainedtoconcludethatundertheconceptof litispendentia, the pendencyofDARABCaseNo.IVMM009995RservedasabartothefilingofCivilCasesNos.6632and6633. On the third issue, petitioners maintain that the petitioneraffiant who subscribed the requisite Affidavit of Nonforum Shopping understoodthattheissuespendingresolutionbeforetheDARABhadnorelationtopetitioners'actionsforforcibleentry,andhencehad seennoneedtoreportanymorethependencyoftheDARABcase.Moreover,privaterespondentsclaimthatintheirpleadingstheyearly enoughdisclosedthependencyoftheDARABcasetothecourtshearingtheejectmentcases.Hence,theyaverthattherewasnoviolation whatsoeverofthenonforumshoppingrequirements. Private respondents argue that petitioners' explanations on the matter amount to a mea culpa on account of wild speculation and assumptionofthefactsofthecase.TheyaskustoaffirmthefindingsbelowthatpetitionersviolatedtheCourt'sCircularproscribing forumshopping. Supreme Court Administrative Circular No. 0494, imposingadditionalrequisites in civil complaints, petitions, andother initiatory pleadingsfiledinallcourtsandagenciestopreventforumshopping,providesinpart: EJECTMENTANDLEASE Mariel Angela Piedad Soriano

1.Theplaintiff,petitioner,applicantorprincipalpartyseekingreliefinthecomplaint,petition,applicationorotherinitiatory pleadingshallcertifyunderoathinsuchoriginalpleading,orinasworncertificationannexedtheretoandsimultaneouslyfiled therewith to the truth of the following facts and undertakings: (a) he has not theretofore commences any other action or proceedinginvolvingthesameissuesintheSupremeCourt,theCourtofAppeals,oranyothertribunaloragency;(b)tothebest ofhisknowledge,nosuchactionorproceedingispendingintheSupremeCourt,theCourtofAppeals,oranyothertribunalor agency;(c)ifthereisanysuchactionorproceedingwhichiseitherpendingormayhavebeenterminated,hemuststatethe statusthereof;and(d)ifshouldthereafterlearnthatasimilaractionorproceedinghasbeenfiledorispendingbeforethe SupremeCourt,theCourtofAppeals,oranyothertribunaloragency,heundertakestoreportthatfactwithinfive(5)days therefromtothecourtoragencywhereintheoriginalpleadingandsworncertificatecontemplatedhereinhavebeenfiled. xxx 2.AnyviolationofthisCircularshallbeacauseforthedismissalofthecomplaint,petition,applicationorotherinitiatory pleading,uponmotionandafterhearing ThattherewasaDARABcasependinginvolvingthesamepartieswiththesamesubjectmatteratthetimepetitionersfiledCivilCases Nos.6632and6633isnotcontested.Petitionersadmitthattheyassumedthattheissuesintheagrariancaseandtheforcibleentrycases weredifferentandhencesawnoneedtoreportthependencyoftheformertothetrialcourtintheircertificationofnonforumshopping. Wefailtoseethebasisforthisassumption.Therecordsdisclosethattheissueofpossessionasraisedintheforcibleentrycasesin necessarilyincludedinthequestionofagriculturaltenancyraisedintheDARABcase.Notethatpetitionersactivelyparticipatedinthe lattercaseandthus,couldnothavebeenunawarethatthepossessionofthesubjectfishpondsorpartsthereofwasinissuebeforethe Board. Petitioners'failure to see that paragraph 1(b), 1(c), or 1(d) of AdministrativeCircularNo. 0494 applied to them is simply incomprehensible.WeagreewiththeRTCincertifyingunderoaththattheyhavenoknowledgeofanycasependingbeforeanyother tribunaloragencyinvolvingthesameissueraisedintheirforcibleentrycases,petitionerswerelessthancandid. Todeterminewhetherapartyviolatedtheruleagainstforumshopping,thetestappliediswhethertheelementsof litispendentia are presentorwhetherafinaljudgmentinonecasewillamounttoresjudicatainanother.23Recallthatasearlierdiscussed,therequisitesof litispendentiabarredthefilingofCivilCasesNos.6632and6633giventhependencyofDARABCaseNo.IVMM009995R.Based thereon,theRegionalTrialCourtcorrectlydismissedtheforcibleentrycasesontheadditionalgroundofforumshopping.1wphi1.nt WHEREFORE,theinstantpetitionisDENIED,andtheDecisionoftheRegionalTrialCourtofValenzuela,Branch172,inCivilCases Nos.5093V97and5169V97isAFFIRMED.Costsagainstpetitioners. SOORDERED.

EJECTMENTANDLEASE Mariel Angela Piedad Soriano

RepublicofthePhilippines SUPREMECOURT Manila THIRDDIVISION G.R.No.153652January16,2004 ALFREDOYASAYDELROSARIO,petitioner, vs. SPS.JOSEE.MANUELandCONCORDIAMANUEL,representedbyAttorneyinfact,PATRICIAARIOLA,respondents. DECISION SANDOVALGUTIERREZ,J.: ThisisapetitionforreviewoncertiorariassailingtheCourtofAppealsDecisiondatedMay22,2002inCAG.R.SPNo.67902,entitled "AlfredoYasaydelRosario,petitionervs.Sps.JoseandConcordiaManuel,representedbyAttorneyinfact,PatriciaAriola,MTC,Fourth JudicialRegion,SanMateo,Rizal,andRTC,FourthJudicialRegion,Branch77,SanMateo,Rizal." OnAugust12,1999,spousesJoseandConcordiaManuel,respondents,filedwiththeMunicipalTrialCourt(MTC),SanMateo,Rizala complaint1forunlawfuldetaineragainstAlfredoYasaydelRosario,petitioner,docketedasCivilCaseNo.1360.Theyallegedthatthey arethetrueandlawfulownersofa251squaremeterlotlocatedatSta.Ana,SanMateo,Rizal.Becauseoftheircompassion,theyallowed petitioner,whosehousewasdestroyedbyastrongtyphoon,tooccupytheirlot.Theyagreedthathecouldbuildthereonatemporary shelteroflightmaterials.Butwithouttheirconsent,whatheconstructedwasahouseofconcretematerials. In1992,respondentsaskedpetitionertovacatethelot.Thiswasfollowedbyrepeatedverbaldemandsbuttonoavail,promptingthemto bringthemattertothebarangay.Butthepartiesfailedtoreachanamicablesettlement.OnJune25,1999,thebarangaychairmanissueda CertificationtoFileAction. Inhisanswertothecomplaint,petitionerclaimedthatsometimein1968,respondentsallowedhimtobuildhishouseonthelot,provided hewouldguardthepremisestopreventlandgrabbersandsquattersfromoccupyingthearea.In1995,whenrespondentsvisitedthis country,theyagreedverballytoselltheportiononwhichhishousewasconstructed.Ayearlater,hemadeanoffertobuythe60square meterportionoccupiedbyhimandtospendforitssurvey.Butwhatrespondentswantedtosellwasthewholeareacontaining251square meters.Hetheninformedthemthathewouldfirstconsulthischildrenandtheysaidtheywillwait.Instead,theyfiledtheinstant complaint. OnSeptember22,2000,thetrialcourtrenderedaDecisioninfavorofrespondents,thus: "WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffsspouses Jose and Concordia ManuelrepresentedbytheirattorneyinfactPatriciaAriolaandagainstdefendantAlfredoYasaydelRosario,orderinghimand/ orallpersonsclaimingrightsunderhimtovacatethesubjectpropertycoveredbyTCTNo.N11399,andsurrenderpossession thereoftotheplaintiffs,topay P500.00permonthasreasonablecompensationfortheuseofsaidpropertyfromthedateof filingofthisComplaintonAugust12,1999untilthesameisvacatedandpossessionthereofsurrenderedtotheplaintiffsandto paythecost."2 Onappeal,theRegionalTrialCourt(RTC)ofSanMateo,RizalrenderedaDecisiondatedMay10,2001affirmingintototheDecisionof thetrialcourt. OnNovember29,2001,hereinpetitionerfiledwiththeCourtofAppealsapetitionforreview,docketedasCAG.R.SPNo.67902. OnMay22,2002,CourtofAppealsissuedaResolutiondismissingthepetitionforhavingbeenfiledoutoftime,towit: "Consideringthefilingofthesecondmotionforreconsiderationisprohibitedxxxhence,doesnottolltherunningofthe reglementaryperiodtoappeal;consideringfurtherthat,theperfectionofanappealinthemannerandwithintheperiodlaid down by law is not only mandatory but also jurisdictionalandfailure todosorenders the questioneddecisionfinal and executory,deprivingtheappellatecourtorbodyofjurisdictiontoalterthefinaljudgmentmuchlesstoentertaintheappeal; consideringfinallythat,intheinstantcase,petitionerwhohadfifteen(15)daysfromreceiptoftheOrderdated26July2001, denyinghisfirstmotionforreconsiderationwithinwhichtofileapetitionforreviewfiledthepresentpetitiononlyon29 November2001,thisCourtresolvestoDISMISStheinstantpetitionforreview,forhavingbeenfiledoutoftime."3 ConsideringthatthepetitionwiththeCourtofAppealswasnotseasonablyfiled,theinstantpetitionshouldbedismissedoutright. EJECTMENTANDLEASE Mariel Angela Piedad Soriano

Assumingarguendothatthepetitionbeforeusissufficientinformandsubstance,thesamewouldstillbedismissedforlackofmerit.The petitionraisesthefollowingissues:(1)whetherornottheMTChasjurisdictionovertheejectmentcase;and(2)whetherornotpetitioner isabuilderingoodfaith,hence,entitledtoreimbursementunderArticle448oftheCivilCode. Petitionerclaimedthatthetrialcourthasnojurisdictionoverthecaseconsideringthatthereisnoallegationinthecomplaintthat respondentshavepriorphysicalpossessionofthelotandthattheywereoustedtherefrombyforce,threat,strategyorstealth. Priorphysicalpossessionisnotalwaysaconditionsinequanoninanejectmentcase.Wemustdistinguishthetwokindsofejectment, namely,forcibleentryandunlawfuldetainer.Inforcibleentry,theplaintiffisdeprivedofphysicalpossessionofhislandorbuildingby meansofforce,intimidation,threat,strategyorstealth.Inthislight,hemustallegeandprovepriorphysicalpossession.Inillegaldetainer, thedefendantunlawfullywithholdspossessionaftertheexpirationorterminationofhisrighttheretounderanycontract,expressor implied.4Whatrespondentsfiledisacomplaintforunlawfuldetainer.Priorphysicalpossessionisnotrequired.Hence,respondentsneed notallegethesameintheircomplaint. Asfoundbythetrialcourt,petitionerspossessionofthelandwasbymeretoleranceoftherespondents.Wehaveheldinanumberof casesthatonewhosestayismerelytoleratedbecomesadeforciantoccupantthemomentheisrequiredtoleave. 5 Heisboundbyhis impliedpromise,intheabsenceofacontract,thathewillvacateupondemand.6 Anentthesecondissue,petitionerisnotabuilderingoodfaith.Consideringthatheoccupiesthelandbymeretolerance,heisawarethat hisoccupationofthesamemaybeterminatedbyrespondentsanytime. WHEREFORE,thepetitionisherebyDENIED.TheassailedDecisionoftheCourtofAppealsisAFFIRMED. SOORDERED. Vitug,(Chairman),Corona,andCarpioMorales,JJ.,concur.

EJECTMENTANDLEASE Mariel Angela Piedad Soriano

THIRDDIVISION G.R.No.125799.August21,2003] DANILOCANSINOANDLINDADEJESUS,Petitioners,v.COURTOFAPPEALS,HON.JUDGE,RTCOFKALOOCANCITY, BR.120ANDSPS.FRANCISCOE.CASTROandROSARIOB.CASTROand,CESARL.CRUZ,SHERIFFIV,RTCKALOOKAN CITY,BR.120,respondents. DECISION PUNO,J.: HavinggonethroughthesummaryprocedureintheMetropolitanTrialCourt(MeTC),anappealtotheRegionalTrialCourt(RTC)anda petitionforcertioraritotheCourtofAppeals(CA),thisejectmentcaseisnowbeforethisCourtonaPetitionforReviewonCertiorari. ThecasestemmedfromacomplaintforunlawfuldetainerfiledbyrespondentspousesFranciscoandRosarioCastroagainstDanilo Cansino,LindadeJesusandElenaMesa[1beforetheMetropolitanTrialCourt.Thesubjectmatterofthecontroversyisaparcelofland locatedatMaligayaParkSubdivision,KalookanCity.Intheircomplaint,respondentsallegedthatpetitioners,bystrategyandstealth unlawfullyconstructedtheirrespectivehousesinsideplaintiffs()(hereinrespondents)aforementionedparcelofland.[2 Intheiranswer withcounterclaim,petitionersCansinoanddeJesusaverredthattheirpossessionwaspremiseduponthehonestbeliefthatthelotthey wereandarestilloccupyingwasapublicland;thattheyhadbeeninpossessionofthesubjectpremiseseversince1977;andthatthe failure(ofhereinrespondents)toallegewhenpossessionofdefendants(hereinpetitioners)startedandtakencognizanceofbyplaintiffs (hereinrespondents)created(sic)doubtsastothejurisdictionoftheMeTC.[3 TheMeTCtookcognizanceofthecaseandtreatedthecomplaintasoneforejectmentundertheRulesonSummaryProcedure.Itordered thepartiestosubmittheirrespectiveaffidavitsandthoseoftheirwitnessesalongwiththeirotherevidence.Thereafter,theMeTCinits decisiondatedAugust12,1994,dismissedthecomplaintholdingthatinanejectmentcase,theplaintiffhastheburdenofprovingprior physicalpossessionoftheproperty.Respondentsfailedtodischargetheburden.[4 OnappealwiththeRTCofKalookanCity,Br.120,thecourt,onJanuary11,1995,affirmedintotothedecisionoftheMeTC.Itheldthat respondentswerenotabletopresentevidenceoftheiractualpossessionofthepropertypriortothatofpetitioners,whilethelatterwere abletoprovetheirpossessionofthepropertysince1977.[5 Respondentsfiledamotionforreconsiderationwheretheyappendedmoredocumentaryevidenceshowingtheirownershipoverthe subjectproperty,aswellastheownershipandpossessionoftheirpredecessorsininterest.OnMarch14,1995,theRTCreversedits previousdecision.Itruledthatrespondentswereabletoprovetheownershipandpossessionoftheirpredecessorsininterest,whichdated backto1964,waybeforethe1977possessionofpetitioners.Moreover,itrejectedtheclaimofpetitionersthatthesubjectlandispublic propertysinceithasbeenproventhatthelotistitledandthetitlehasbeentransferredtorespondentsonJanuary29,1993.Thetitlebeing incontrovertibleafterayear,petitionerscannolongerassailit.Thecourtconsideredpetitionersasintrudersorsquattersonthesubjectlot. [6 Thus,petitionersfiledapetitionforreviewwiththeCourtofAppeals.TheyassailedtherightoftheRTCtodecidetheissueofownership withoutanyfairtrialandtheproprietyoftheactionoftheRTCinconsideringthedocumentaryevidenceattachedbyrespondentsintheir motionforreconsiderationwhichwerenotmadepartofthepositionpaperthey(respondents)previouslysubmitted.[7 TheCourtofAppealsaffirmedtherulingoftheRTC.Itheldthatpetitionerswereunabletosubstantiatetheirpossessionoftheproperty. Theiroccupancyisatbestduetothetoleranceoftheregisteredowners,privaterespondentspouses.Moreover,sincerespondentshad priorlegalpossessionoftheproperty,theyhadintheirfavorpriorityoftimethatlegallyentitlesthemtostayinthesaidproperty. [8With regardtotheactiontakenbytheRTCinconsideringthedocumentaryevidenceattachedonlyinthemotionforreconsideration,the appellatecourtruledthatunderSection5,Rule135oftheRevisedRulesofCourt,theRTChastheinherentpowertoamendandcontrol itsprocessandorderssoastomakethemconformabletolawandjustice.[9 PetitionersbroughtthecaseatbartothisCourtonapetitionforreviewoncertiorari.Theyraisethefollowingissues: I WHETHERORNOTSECTION5,RULE135OFTHEREVISEDRULESOFCOURTISAPPLICABLEINAMOTIONFOR RECONSIDERATIONWHEREDOCUMENTSINTHEMOTIONFORRECONSIDERATIONARENOTTOBECONSIDEREDAS EVIDENCETOPROVESUPERVENINGEVENTS. II WHETHERORNOTTHEPRIVATERESPONDENTSHAVEACLEARRIGHTTOPOSSESSTHESUBJECTLAND.[10 EJECTMENTANDLEASE Mariel Angela Piedad Soriano

Anentthefirstissue,Section5,Rule135oftheRevisedRulesofCourtprovides: Sec.5.Inherentpowersofcourts.Everycourtshallhavethepower: xxx (g)Toamendandcontrolitsprocessandorderssoastomakethemconformabletolawandjustice; xxx TheCourtofAppealsupheldtheRTCinreconsideringitspriordecisiononthebasisofnewevidenceattachedtothemotionfor reconsiderationonthegroundthatitistheinherentrightofthecourttoamendandcontrolitsprocesses.Itfurtherruledthatprocedural technicalitiesshouldnotoverridesubstantialjustice.11 Wedisagree.Itistruethattherulesprovidethatcourtshavetheinherentpowertoamendtheirdecisionstomakethemconformabletolaw andjustice.Thisprerogative,however,isnotabsolute.Therulesdonotcontemplateamendmentsthataresubstantialinnature. 12They merelycoverformalchangesorsuchthatwillnotaffectthecruxofthedecision,likethecorrectionoftypographicalorclericalerrors. Courtswillviolatedueprocessiftheymakesubstantialamendmentsintheirdecisionswithoutaffordingtheotherpartytherightto contestthenewevidencepresentedinamotionforreconsideration. UnderRule37oftheRevisedRulesofCourt,apartymayfileamotionforreconsiderationontheground,amongothers,thatxxx,the evidenceisinsufficienttojustifythedecisionorfinalorder,orthedecisionorfinalorderiscontrarytolaw.[13Itrequiresthemotionto pointoutspecificallythefindingsorconclusionsofthejudgmentorfinalorderwhicharenotsupportedbytheevidenceorwhichare contrarytolaw,makingspecificreferencetothetestimonialordocumentaryevidencepresentedortotheprovisionsoflawallegedtobe violated.14 ItisimplicitlyclearfromRule37thatamotionforreconsiderationcannotbeusedasavehicletointroducenewevidence.Petitioners correctlycontendthatifrespondentswantedtopresentfurtherevidence,theyshouldhavefiledamotionfornewtrialbasedonnewly discoveredevidence.However,fornewlydiscoveredevidencetowarrantanewtrial,(a)itmusthavebeendiscoveredaftertrial,(b)it couldnothavebeendiscoveredorproducedatthetrialdespitereasonablediligence,(c)itmustbematerialandnotmerelycollateral, cumulative,corroborativeorpurelyforimpeachingawitness,merelyimportantevidencebeingnotenough,and(d)ifpresented,would probablyaltertheresultoftheaction.15 Inthecaseatbar,respondentsattachedforthefirsttimeintheirmotionforreconsideration,evidencetoprovetheirownershipoverthe parceloflandsubjectmatterofthiscontroversy.Thiscannotbecountenanced.Forone,possessionistheonlyissueinacaseforunlawful detainer.16Moreimportantly,thereisnojustificationforthedelayinpresentingsaidevidence.Wenotethatalthoughitwasrespondents whofiledanappealtotheRTC,theyfailedtosubmittheirmemorandumasrequiredbythesaidcourt.[17 ItwasonlyaftertheRTC rendered an unfavorable decision that respondents filed a motion for reconsideration and appended their new evidence. Piecemeal presentationofevidenceisnotinaccordwithorderlyjustice. Butconsideringthetotalityofevidence,westillruleinfavorofpetitioners.Respondentsappendedtoitsmotionforreconsiderationthe followingevidence:TransferCertificateofTitleNo.T45212issuedonAugust16,1972inthenameofthepredecessorsininterestof respondents,EstrellaCrisostomoandAzucenaBantug;[18TransferCertificateofTitleNo.T262332issuedonJanuary29,1993inthe nameofrespondentspousesFranciscoandRosarioCastro;19 ContracttoSellbetweenMaligayaParkandLeticiaFloresandEstrella CrisostomodatedMay4,1962;[20LocationPlanshowingthesiteofthecontestedparcelofland; 21andRealPropertyTaxReceiptsfor theyears198822and1993.23 Thetitlespresentedbyrespondentsdonotnecessarilyprovetheirrighttopossession,especiallysincethereisaseparatecaseforthe investigationofthetruestatusofthelandformerlyinthenameofBiyayaCorporationfromwhererespondentsandtheirpredecessorsin interestobtainedtheirtitle.24Neitherwillthecontracttosellandthelocationplanprovepossession.Lastly,thetaxreceiptspresentedby respondentscoveredonlytheyears1988and1993.Thefailureofrespondentstopresentthereceiptscoveringtheyearsbefore1988and between1988and1993,despitetheclaimthattheyandtheirpredecessorsininteresthadpossessionoverthepropertyduringtheseyears, createsdoubtastothevalidityoftheirclaimofpriorpossession. Itisfundamentalthatcomplainantsinanejectmentcasemustallegeandprovethattheyhadpriorphysicalpossessionoftheproperty beforetheywereunlawfullydeprivedthereofbydefendants.25 Respondents,beingthecomplainantsbeforethelowercourt,hadthe burdenofprovingtheirclaimofpriorpossession.They,however,failedtoprovetheirclaim. Inlightofourresolutionofthefirstissuewhichclearsthequestionofpriorpossession,itisunnecessarytodiscussthesecondissuesince petitionersargumenttouchesontheownershipofthelotsubjectmatterofthiscontroversy.Asdiscussed,thecaseatbarisanejectment EJECTMENTANDLEASE Mariel Angela Piedad Soriano

casewheretheonlyissueispriorpossessionofthelot.Anycontroversywithregardtoownershipshouldbeventilatedinaseparate action. INVIEWWHEREOF,thedecisionoftheCourtofAppealsisREVERSED.ThedecisionoftheMetropolitanTrialCourtofKalookan City,Branch50andtheJanuary11,1995decisionoftheRegionalTrialCourtofKalookanCity,Branch120areREINSTATED. SOORDERED.

EJECTMENTANDLEASE Mariel Angela Piedad Soriano

RepublicofthePhilippines SUPREMECOURT Manila THIRDDIVISION G.R.No.146815April9,2003 HEIRSOFPEDROLAURORAandLEONORALAURORA,petitioners, vs. STERLINGTECHNOPARKIIIandS.P.PROPERTIES,INC.,respondents. PANGANIBAN,J.: Theownersofapropertyhavenoauthoritytouseforceandviolencetoejectallegedusurperswhowereinpriorphysicalpossessionofit. Theymustfiletheappropriateactionincourtandshouldnottakethelawintotheirownhands. TheCase BeforeusisaPetitionforReview1underRule45oftheRulesofCourt,seekingtosetasidetheJune27,2000Decision 2andtheJanuary 22,2001Resolution3oftheCourtofAppeals4(CA)inCAGRSPNo.54667.ThedispositivepartoftheDecisionreads: "WHEREFORE,the[P]etitionisGRANTEDandtheRTC[D]ecisiondated06May1999andtheRTC[O]rderdated03August 1999areherebyREVERSEDandSETASIDE,andcorollarily,theMCTC[D]ecisionisAFFIRMED."5 TheassailedResolutiondeniedpetitonersMotionforReconsideration. TheFacts ThefactualantecedentsaresummarizedbytheCAasfollows: "Ina[C]omplaintforForcibleEntrywithDamagesfiledon27September1997beforetheFifthMunicipalCircuitTrialCourtof CarmonaandGen.MarianoAlvarez,plaintiffstherein,xxxPedroLauroraandLeonoraLaurora[hereinpetitioners]alleged thatthey[were]theownersofLot1315G,SWD40763oftheYaptinchayEstatewithanareaof39,771sq.metersandlocated in Carmona, Cavite. Pedro Laurora planted trees and has possessed the land up to the present. On 15 September 1997, [respondents]SterlingTechnoparkIIIandS.P.Properties,Inc.xxxthroughtheirEngr.BernieGatchalianbulldozedand uprootedthetreesandplants,andwiththeuseofarmedmenandbymeansofthreatsandintimidation,succeededinforcibly ejecting[petitioners].Asaresultoftheirdispossession,[petitioners]sufferedactualdamagesintheamountofP3,000,000.00 andP10,000.00asattorneysfees. "Intheir[A]nswertothe[C]omplaint,[respondents]averredthat[petitionerswere]nottheownersofthelandbecausethey disposedofitsometimein1976asshownbylegaldocuments.On02April1969,theLandAuthorityissuedanorderofawardin favorof[petitioners],approvingtheapplicationofPedroLauroratobuythesubjectLot1315Gfromthegovernment.On01 March1974,[petitioners]requestedtheDepartmentofAgrarianReformforthetransferofthelottoJuanManaig.Favorably actedupon,theDARissuedapermittotransferdated03June1975throughitsRegionalDirectorBenjaminR.Estrellado.On03 July1975,JuanManaig,astransfereeandbuyer,paidtherequiredamountofP10,643.65underOfficialReceiptNo.8304707to thegovernmentasfullpaymentforthetransferofsaidlottohim.On26March1976,the[petitioners]assellersandwitnessed bytheirsons,EfrenLauroraandDominadorLaurora,executedaKasulatanngPaglilipatanngLupatransferringthelandto JuanManaigasbuyer.On11June1976,the[petitioners]againwitnessedbytheirsons,EfrenandDominador,executeda KasulatanngBilihangTuluyanorDeedofSalewhereintheysoldLot1315Gincludingallimprovementstherein,infavorof JuanManaig.TheDeedofAbsoluteSalewasapprovedbytheDepartmentofAgrarianReformon14June1976inDAR ApprovalofTransferofRightssignedbyDARRegionalDirector,BenjaminR.Estrellado.Aftertheapprovalofthesalefrom the[petitioners]toJuanManaig,thelatterpaiditsrealestatetaxes.Thetaxdeclarationsofthelandinthenameofitsprevious owners,Yaptinchays,werecancelledandtransferredinthenameof[petitioner]PedroLauroraasownertransferee.Thereupon, theheirsofthelateJUANMANAIGsoldthelandtoGoldenMileResourcesDevelopmentCorporationwhichlikewisesoldit to[respondent]S.P.Properties,Inc. "AftersummaryproceedingsintheMCTC,xxx,ajudgmentwasrendereddismissingthecomplaint.Thecasewaselevatedto theRegionalTrialCourt.Induecourse,thesaidcourtrenderedadecisionreversingtheMCTCjudgment.xxx"6 RulingoftheCourtofAppeals EJECTMENTANDLEASE Mariel Angela Piedad Soriano

TheCAreversedtheRegionalTrialCourt(RTC)andreinstatedtheOrderofdismissalissuedbytheMunicipalCircuitTrialCourt (MCTC).Itheldthattherewasnoevidencetosupporttheclaimofpetitionerstothepriorphysicalpossessionoftheproperty.The evidence allegedly showed that they had already sold the land with the approval of the Department of Agrarian Reform (DAR). Accordingly,theirsubsequententryintoandpossessionofthelandconstitutedplainusurpation,whichcouldnotbethesourceofany righttooccupyit.Beingplantersinbadfaith,theyhadnorighttobereimbursedforimprovementsontheland,inaccordancewithArticle 449oftheNewCivilCode. Hence,thisPetition.7 TheIssue IntheirMemorandum,8petitionersraisethissoleissueforourconsideration: "xxx[W]hether[p]rivate[r]espondent[s]ha[ve]avalidandlegalrighttoforciblyejectpetitionersfromthepremisesdespite theirresistanceandobjection,throughtheuseofarm[ed]menandbybulldozing,cutting,anddestroyingtreesandplants plantedbypetitioners,withoutcourtorder,tothedamageandprejudiceofthelatter."9 TheCourtsRuling ThePetitionismeritorious. MainIssue: PhysicalPossessionoftheLand Theonlyissueinforcibleentrycasesisthephysicalormaterialpossessionofrealpropertypossession defacto,notpossession de jure.10 Onlypriorphysicalpossession,nottitle,istheissue.11 Ifownershipisraisedinthepleadings,thecourtmaypassuponsuch question,butonlytodeterminethequestionofpossession.12 Theownershipclaimofrespondentsuponthelandisbasedontheevidencetheypresented.Theirevidence,however,didnotsquarely addresstheissueofpriorpossession.Eveniftheysucceedinprovingthattheyaretheownersoftheland,13thefactremainsthattheyhave notallegedorprovedthattheyphysicallypossessitbyvirtueofsuchownership.Ontheotherhand,petitionerspriorpossessionofthe landwasnotdisputedbytheCA,whichmerelydescribeditasusurpation.14 Westressthattheissueofownershipinejectmentcasesistoberesolvedonlywhenitisintimatelyintertwinedwiththeissueof possession,15tosuchanextentthatthequestionofwhohadpriorpossessioncannotbedeterminedwithoutrulingonthequestionofwho theownerofthelandis.16Nosuchintertwinementhasbeenshowninthecasebeforeus.Sincerespondentsclaimofownershipisnot beingmadeinordertoprovepriorpossession,theejectmentcourtcannotintrudeordwellupontheissueofownership.17 Notwithstandingtheactualconditionofthetitletotheproperty,apersoninpossessioncannotbeejectedbyforce,violenceorterrornot evenbytheowners.18Ifsuchillegalmannerofejectmentisemployed,asitwasinthepresentcase,thepartywhoprovespriorpossession inthiscase,petitionerscanrecoverpossessionevenfromtheownersthemselves.19 Grantingarguendothatpetitionersillegallyenteredintoandoccupiedthepropertyinquestion,respondentshadnorighttotakethelaw intotheirownhandsandsummarilyorforciblyejecttheoccupantstherefrom. Verily,evenifpetitionersweremereusurpersofthelandownedbyrespondents,stilltheyareentitledtoremainonituntiltheyare lawfullyejectedtherefrom.Underappropriatecircumstances,respondentsmayfile,otherthananejectmentsuit,anaccionpublicianaa plenaryactionintendedtorecoverthebetterrighttopossess; 20 oran accionreivindicatoria anactiontorecoverownershipofreal property.21 Theavailmentoftheaforementionedremediesisthelegalalternativetopreventbreachesofpeaceandcriminaldisorderresultingfrom theuseofforcebyclaimantsouttogainpossession.22Theruleoflawdoesnotallowthemightyandtheprivilegedtotakethelawinto theirownhandstoenforcetheirallegedrights.Theyshouldgotocourtandseekjudicialvindication. WHEREFORE,thePetitionisGRANTEDandtheassailedDecisionREVERSEDandSETASIDE.Nocosts. SOORDERED.

EJECTMENTANDLEASE Mariel Angela Piedad Soriano

RepublicofthePhilippines SUPREMECOURT Manila FIRSTDIVISION G.R.No.124148May20,2004 PACITAG.VARONA,ORLANDOAYSON,MILACASTILLOSIandANGELITAP.SABINO,petitioners, vs. COURTOFAPPEALSandEVANGELINELIM,respondents. DECISION AZCUNA,J.: BeforeusisapetitionforreviewoncertiorariofthedecisionoftheCourtofAppeals,inCAG.R.SPNo.37806,affirmingthedecision oftheRegionalTrialCourtofAngelesCity,Branch59,inCivilCasesNos.77677770. Thefacts,asstatedbytheCourtofAppeals,areasfollows: OnFebruary16,1994,petitionersOrlandoAyson,PacitaVarona,MilaCastilloSiandAngelitaSabinowereissuedMayors PermitstooccupyMarketStallsNos.311,312,313,314,respectively,intheNewPampangPublicMarketinAngelesCity.1 ByvirtueoftheMayorsPermitsissuedtothem,petitionerssoughttoevictprivaterespondentwhowasthentheoccupantofthedisputed stalls.Thus,onMarch8,1994,petitionersOrlandoAysonandPacitaVaronafiledComplaintsforejectmentagainstprivaterespondent beforetheMunicipalTrialCourtofAngelesCity,BranchI,docketedasCivilCasesNos.9429and9430respectively.2 InherAnswersfiledonMarch25,1994,privaterespondentalleged,interalia,thefollowing:ThateversincetheNewPampangPublic Marketcommenceditsoperation,shehasbeenthelawfulandactualoccupantofthesubjectmarketstalls;thatpetitionersoccupancyof themarketstallswasbyvirtueonlyoftheMayorsPermitsissuedtothem,whichbynomeansautomaticallyvestuponthemtherightto occupythedisputedmarketstallssinceonehasfirsttoapplyandsecureanapprovalfromtheMarketAdministratorandacertificationto theeffectthattheapplicantisalegitimatestallholderwhichrequirementshavenotbeencompliedwithbypetitioners;thatpresentlythe CityGovernmentofAngelesisundertakingtherecallandrevocationofthepermitsissuedtopetitioners.3 OnMarch22,1994,theMayorsPermitsofpetitionersPacitaVarona,OrlandoAyson,MilaCastilloSiandAngelitaSabinowererevoked byMayorEdgardoPamintuan4onthefollowinggrounds:(1)TheirnamesdidnotappearintheMasterListofStallholdersatsaidmarket; and(2)theydidnotapplyforandsecurefromtheMarketAdministratortherequiredclearancepriortotheissuanceofsaidpermits. OnMarch29,1994,despiterevocationoftheirMayorsPermits,petitionersMilaCastilloSiandAngelitaSabino,invokingthesame causeofactionasthatofAysonandVarona,alsofiledComplaintsforejectmentagainstprivaterespondentbeforethesameMunicipal TrialCourt,docketedasCivilCasesNos.9434and9435,respectively.5 InherAnswersdatedMay13,1994,privaterespondentreiteratedherallegationsintheAnswersshefiledtotheComplaintsofpetitioners AysonandVarona,withthenewallegationthattheMayorsPermitsissuedtopetitionerswerealreadyrecalledorrevokedonMarch22, 1994.6 TheMunicipalTrialCourtrenderedfouridenticaldecisions7 (exceptforthenamesoftheplaintiffsandthestallnumbersinvolved)in favorofpetitioners,orderingprivaterespondentto:(1)VacateStallsNos.311,312,313and314(SarisariSection)oftheNewPampang PublicMarket,AngelesCity;(2)payeachofthepetitionersattorneysfeeofP10,000,appearancefeeofP500perappearance,andP1,000 asreasonablefeeforprivaterespondentscontinuedpossessionofthesubjectmarketstallsfromFebruary,1994,untilshefinallyvacates thestalls;and(3)paythecostsofthesuit. PrivaterespondentappealedthesaiddecisionstotheRegionalTrialCourtofAngelesCity,docketedasCivilCasesNos.7767,7768,7769 and7770,contending,amongotherthings,thattheMunicipalTrialCourthasnojurisdictionoverthecomplaints;thatthecomplaintshave becomemootandacademic;andthattheMunicipalTrialCourtrenderedjudgmentinfavoroftheplaintiffs(petitioners)withoutfactual andlegalbasis. TheRegionalTrialCourtrenderedaJointDecisionreversingandsettingasidethedecisionsoftheMunicipalTrialCourt,thedispositive portionofwhichreads: WHEREFORE,thejudgmentofthelowercourtparticularlyMunicipalTrialCourt,BranchI,AngelesCity,inCivilCasesNos. EJECTMENTANDLEASE Mariel Angela Piedad Soriano

9429;9430;9434;and9435(RTCCasesNos.7767,7768,7769and7770),areherebyreversedandsetaside,andanew decisionisherebyrendered,thatappellantEvangelineLimhasabetterrightthantheappelleestostayinpossessionofthe market stallsof thePampangPublic MarketparticularlyStallsNos. 312,313, 314and315,hereinAngelesCity,without prejudiceonthepartoftheappelleestofileanactionforrecognitionoftheirpreferredrightstofileanordinaryactioninthe properforum. Thesupersedeasbondfiledbytheappellantisherebydissolvedandtheamountofthesamebereimbursedtotheappellant,as wellasthemonthlyrentalsshehaddeposited. SOORDERED.8 TheRegionalTrialCourtheldthattheruleonforcibleentryandunlawfuldetainerisnotapplicableintheinstantcase,therebeingno proofadducedbypetitionersthatprivaterespondentforciblyenteredandoccupiedthemarketstallsinquestionbyintimidation,threat, strategyorstealth,orthattheprivaterespondentoriginallyacquiredpossessionofthestallslawfullyandthereafterunlawfullywithheld thepossessionofthestalls,aftertheexpirationorterminationofthedetainersrighttoholdpossessionbyvirtueofacontract,expressor implied.9 Moreover,theRegionalTrialCourtfoundthatpetitionersAysonandVaronafiledCivilCasesNos.9429and9430respectivelyinthe MunicipalTrialCourtonMarch8,1994.OnMarch22,1994,theirMayorsPermitswererevoked,pendingtrialintheinferiorcourt. Hence,thecourtruledthatsaidcasesaredeemedmootandacademicduetosuperveningevent.10 In regard to petitioners CastilloSi and Sabino, the Regional Trial Court found that they filed Civil Cases Nos. 9434 and 9435 respectivelyintheinferiorcourtonSeptember14,1994(shouldbeMarch29,1994),whentheMayorsPermitsofsaidpetitionerswere alreadyrevokedonMarch22,1994.Thecourtthusruledthattheyhavenomorecauseofactionandtheircasesaremootandacademic.11 PetitionersfiledapetitionforreviewoftheJointDecisionoftheRegionalTrialCourtintheCourtofAppeals. TheCourtofAppealsruled: Itshouldbenotedthatinallthefour(4)ejectmentcasesfiledbypetitionersagainstprivaterespondent,theircommoncauseof actionispremisedontheidenticalpropositionthattheyaretherightfulstallholdersofthemarketstallsintheNewPampang PublicMarketbyvirtueoftheMayorsPermitsissuedtothemonFebruary16,1994. Asearlierstated,petitionersrighttooccupythedisputedmarketstallswasterminatedbytherevocationoftheirMayors permitsonMarch22,1994.Andsincethereisnothingintherecordstoshowthathereinpetitionersweresubsequentlyissued newMayorspermitsnorwasthereashowingthattheirrevokedpermitswerereinstated,petitioners,therefore,[have]nocause ofactionagainsthereinprivaterespondent. Considering,therefore,thatsincethebasisofpetitionerscauseofactionceasedtoexist,nopracticalorusefulpurposewould thenbeservedbypassingonthemeritsoftheinstantpetition. TheCourtofAppealspronouncedjudgment,thus: WHEREFORE,theinstantpetitionforreviewisherebyDISMISSED.Accordingly,thedecisionoftheRTC,AngelesCity, Branch59inCivilCasesNos.77677770isAFFIRMED. SOORDERED.12 Hence,petitionersfiledtheinstantpetition. IntheirMemorandum,petitionersraisedtheseissues: 1.WHETHERPETITIONERSASTRANSFEREESINGOODFAITHHAVEVALIDCAUSEOFACTIONAGAINSTTHE PRIVATERESPONDENT. 2.WHETHERTHEFINDINGSOFFACTSCONTAINEDINTHECOURTOFAPPEALSDECISIONSUBJECTMATTER OFTHEPETITIONFORREVIEWONCERTIORARIARESUPPORTEDBYSUBSTANTIALEVIDENCEASBASIS THEREOF.13 ThemainissueiswhetherornottheMunicipalTrialCourthadjurisdictionoverthecasesfiledbypetitioners,whichhavebeentreatedas ejectmentcases. Thejurisdictionofacourtoveraspecificcase,aswellasthenatureoftheaction,isdeterminedbytheavermentsintheComplaint. 14The EJECTMENTANDLEASE Mariel Angela Piedad Soriano

pertinentaverments,foundtobeidentical,intheComplaintsofpetitionersareasfollows: xxxxxxxxx 2.ThattheplaintiffistherightfulandlawfulstallholderofStallNo.xxxoftheNewPampangPublicMarket,AngelesCity;he wasissuedandhepossessesthecorrespondingandnecessaryMayorsPermitandsuchothernecessarypermits,papersand/or documentsrelativetothesaidstallxxx; 3.Thattheplaintiffhasbeenandisindireneedoftheaforesaidstallandheaccordinglyrequestedandadvised,bothorallyand inwriting,thedefendantstovacatethesame,butthelatterunreasonablyandunjustifiablyfailedandrefused,andstillfailand refusetovacatethesubjectstall,tothedamageandprejudiceofhereinplaintiffs;acopyofademandletterisheretoattachedx xx; xxxxxxxxx 5.Thatduetotheunreasonableandunjustifiablefailureandrefusalofthedefendantstovacatetheaforesaidstall,theplaintiff wasconstrainedtofiletheinstantactionxxx15 Inanactionforforcibleentry,twoallegationsaremandatoryforthemunicipalcourttoacquirejurisdiction:First,theplaintiffmustallege hispriorphysicalpossessionoftheproperty.16Second,hemustalsoallegethathewasdeprivedofhispossessionbyanyofthemeans providedforinSection1,Rule7017oftheRulesofCourt,namely:force,intimidation,threats,strategy,andstealth. 18Theactionmustbe filedagainsttheintruderwithinoneyearfromillegalentry.19 Intheinstantcase,petitionersdidnotallegeintheirComplaintsthattheywereinpriorphysicalpossessionofthesubjectmarketstallsand thatprivaterespondentdeprivedthemofpossessionthereofthroughforce,intimidation,threat,strategyorstealth.Hence,thiscaseisnot oneofforcibleentry. Inanactionforunlawfuldetainer,whichmustbefiledwithinoneyearfromthedateofthelastdemand,oneunlawfullywithholds possessionofanylandorbuildingaftertheexpirationorterminationofhisrighttoholdpossessionunderanycontract,expressor implied.20Thepossessionbydefendantisoriginallylawfulbutbecomesillegalbyreasonoftheterminationofhisrightofpossession underhiscontractwiththeplaintiff.21Itissettledthatacomplaintforunlawfuldetainerissufficientifitallegesthatthewithholdingof possessionortherefusaltovacateisunlawfulwithoutnecessarilyemployingtheterminologyofthelaw.22 Inthiscase,petitionersdidnothaveanycontract,expressorimplied,withprivaterespondentforthepossessionofthesubjectmarket stalls. Hence, there can be no expiration or termination of private respondents right of possession over the subject stalls, and consequently,nounlawfulwithholdingofpossessionthereoffrompetitioners. Moreover,itwasundisputedbypetitionersthatthesubjectmarketstallsarethepropertiesofthelocalgovernment;thatprivaterespondent isaholderofaMayorsPermitin1993thatwasnotrenewed,butnotrevokedbytheOfficeoftheCityMayor,andthatnonoticetovacate wasinitiatedbythelocalgovernment.23 Inaddition,althoughpetitionerswereissuedMayorsPermitstomanageandoperateasarisaristoreinthesubjectmarketstallsofthe PampangPublicMarketinAngelesCityfromFebruary16,1993(shouldbe1994)uptoDecember31,1994,saidpermitswererevokedby theCityMayoronMarch22,1994. Basedontheforegoing,thiscaseisalsonotoneofunlawfuldetainer. Sincethecomplaintsdidnotsatisfythejurisdictionalrequirementstoconstituteavalidcauseofactionforforcibleentryorunlawful detainer,theMunicipalTrialCourthadnojurisdictionoverthecasesfiledbypetitioners.Accordingly,theRegionalTrialCourtshould havesimplyreversedandsetasidethedecisionoftheMunicipalTrialCourtforlackofjurisdiction.TheCourtofAppeals,therefore, erredinaffirminginfullthedecisionoftheRegionalTrialCourt,sincethelatterhadnojurisdictiontorenderadecisionofitsowninthe caseandtostatethattheprivaterespondenthadabetterrightofpossessionoverthepetitioners. WHEREFORE,thepetitionisherebyGRANTED.ThedecisionoftheCourtofAppealsinCAG.R.SPNo.37806isMODIFIEDin thatthejointdecisionoftheRegionalTrialCourtofAngelesCity,Branch59,inCivilCasesNos.77677770,isaffirmedonlyinsofarasit reversedandsetasidethedecisionsoftheMunicipalTrialCourtofAngelesCity,BranchI,inCivilCasesNos.9429,9430,9434and 9435,forlackofjurisdiction. Costsdeoficio. SOORDERED.

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RepublicofthePhilippines SUPREMECOURT BaguioCity SECONDDIVISION G.R.No.120941April18,1997 NENADEGUZMAN,petitioner, vs. COURTOFAPPEALS,andIGNACIORANESES,ETAL.,respondents. PUNO,J.: ThisisapetitionforreviewunderRule45oftheRulesofCourttosetasidethedecisionoftheCourtofAppealsinCAG.R.No.40738 CVentitledNenadeGuzmanv.IgnacioRaneses,IsaganiRanesesandHon.LilianDinulosPamontongan,whichaffirmedthedecisionof Branch76oftheRegionalTrialCourtofSanMateo,Rizal,orderingpetitionertovacatethepremisessubjectofthepetition.1 ThefactsshowthatonJuly6,1988,anejectmentcase,datedApril15,1988anddocketedasCivilCaseNo.717,wasfiledbyprivate respondentsIsaganiandIgnacioRanesesagainstpetitionerNenadeGuzmanbeforetheMunicipalTrialCourtofSanMateo,Rizal. 2It was alleged that in 1986, petitioner, through stealth, unlawfully constructed a house within the 4.5 hectare lot owned by private respondentsinLabahan,SanMateo,Rizal.3Despitereceiptoftwodemandlettersfromprivaterespondents,petitionerrefusedtovacate thepremises.OnJuly27,1988,asummonsandacopyofthecomplaintwereservedonpetitionerthroughherdaughterNancyde Guzman,apersonofsufficientageanddiscretion.Whenpetitionerfailedtofileheranswerwithinthereglementaryperiod,private respondentsmovedforsummaryjudgment.4OnAugust17,1988,ajudgmentbydefaultwasrenderedbyMunicipalTrialCourtJudge ApolinarT.AntazoorderingpetitionertovacatethedisputedlotsandtopaytheprivaterespondentsP2,000.00asattorney'sfeesandthe costsofsuit.5OnOctober18,1988,theMunicipalTrialCourtissuedaWritofExecutionagainstthepetitioner.OnOctober27,1988, petitioner'scounselfiledaMotionforReconsiderationand/ortoSetAsidetheDecision.TheMunicipalTrialCourtdeniedtheMotion andgrantedtheWritofExecution.OnJanuary19,1989,petitionerfiledwiththeRegionalTrialCourtofSanMateo,RizalaPetitionfor RelieffromJudgment,InjunctionandDamages,docketedasCivilCaseNo.540SM.Petitionerarguedthatshewasdenieddueprocessof lawbecausethesummonswasnotproperlyservedonher. 6 Allegedly,thedeputysheriffresortedtosubstitutedserviceofsummons withoutexertinganyefforttofindthepetitioner.ShealsoassailedthejurisdictionoftheMunicipalTrialCourttotrytheforcibleentry caseonthegroundthatthecomplaintwasfiledtwoyearsafterherallegedunlawfulentryintothepremises.OnFebruary23,1989, privaterespondentsfiledtheiranswertothepetition.Aftergivingduecoursetothepetition,theRegionalTrialCourt,onJuly10,1992, rendereditsdecisionsustainingpetitioner'scontentionthattheserviceofsummonswasimproperandtheejectmentsuitwasfiledoutof time.ItruledthattoenabletheMunicipalTrialCourttoacquirejurisdictionoverthepersonofthepetitionerthroughsubstitutedservice ofsummons,itisnecessarytoshowtheimpossibilityofpersonalservicewhichshouldbeexplainedintheproofofservice. 7Italsofound undisputedthattheforcibleentrycasewasfiledtwoyearsaftertheallegedoccupationofthelandthroughstealthbypetitioner;hence,the actionhasprescribed. TheRegionalTrialCourtfurtherreceivedevidenceontheownershipofthedisputedlot. 8Itheldthattheevidenceshowedthatpetitioner acquiredher"rights"tothepropertybypurchasefrompersonswhoweremeretenantsonthepropertywhileprivaterespondents'claim overthepropertywassupportedbydocumentaryproofsofownership.9Thus,itorderedpetitionertovacatethelotindispute. Withinthereglementaryperiod,petitioner,throughcounsel,filedherappealwiththeCourtofAppealscontendingthat: THETRIALCOURTERREDINDECIDINGTHEMERITSOFTHECASEATONCEWITHOUTISSUINGANY PRIORORDERSETTINGASIDETHEDECISIONOFTHEMUNICIPALTRIALCOURT. THE TRIALCOURT ERREDINNOTDISMISSINGTHEFORCIBLEENTRYCASE(PRINCIPALACTION) FILEDBYTHEAPPELLEESAFTERITDECLAREDTHATTHESAIDACTIONWASFILEDOUTOFTIME ANDTHATTHELOWERCOURTHADNOJURISDICTIONOVERTHESAME. THE TRIAL COURT ERRED IN RESOLVING THE ISSUE OF OWNERSHIP AND DECLARING THAT EJECTMENTANDLEASE Mariel Angela Piedad Soriano

APPELLEESARETHEOWNERSOFTHEPROPERTYSUBJECTOFTHEEJECTMENTSUITANDTHAT THEYAREENTITLEDTOITSPOSSESSION. OnJanuary24,1995,theCourtofAppealssustainedthedecisionoftheRegionalTrialCourt.Itheldthat:(1)petitionerchosethewrong remedywhenitfileditspetitionforrelieffromjudgmentfortherewasnoindicationoffraud,accident,mistakeorexcusablenegligence onherpetitionwhichwouldmeritrelieffromthedecisionoftheMunicipalTrialCourt.Itruledthatpetitioner'sproperremedywas appeal,andsinceitdidnotdoso,thedecisionoftheMunicipalCourtbecamefinalandexecutory;10and(2)petitionerfailedtoproveher ownership or any right to possess the disputed lot for her predecessorininterest was a mere squatter. 11 Petitioner's Motion for ReconsiderationwasdeniedinaResolutiondatedJune27,1955.Hence,thisappealwiththefollowingassignmentsoferror: THERESPONDENTCOURTDECIDEDAQUESTIONOFSUBSTANCENOTINACCORDWITHLAWAND THEAPPLICABLEDECISIONSOFTHISHONORABLECOURTINNOTRULINGTHATTHEREGIONAL TRIALCOURTERREDINNOTDISMISSINGTHEFORCIBLEENTRYCASE(PRINCIPALACTION)AFTER ITDECLAREDTHATTHESAIDACTIONWASFILEDOUTOFTIMEANDTHATTHELOWERCOURTHAD NOJURISDICTIONOVERTHESAME. THERESPONDENTCOURTDECIDEDAQUESTIONOFSUBSTANCENOTINACCORDWITHLAWOR THE APPLICABLE DECISION OF THE HONORABLE COURT IN AFFIRMING THE DECISION OF THE REGIONALTRIALCOURTONTHEMATTEROFPOSSESSIONOVERTHESUBJECTPROPERTY. Thepetitionismeritorious. ItisclearthatpetitionerwasdenieddueprocessasshewasnotproperlysummonedbeforetheMunicipalTrialCourtrenderedjudgment againsther.ItisalsoindubitableonthefaceoftheComplaintforforcibleentrythattheactionhadalreadyprescribed.TheComplaint datedApril15,1988allegedthatpetitionerenteredthepropertybystealthsometimein1986.Wehaveruledthat"forcibleentryand unlawfuldetainerarequietingprocessesandtheoneyeartimebartothesuitisinpursuanceofthesummarynatureoftheaction. 12The oneyearperiodiscountedfromthetimetheentrybystealthwasmadebythedefendant. 13Afterthelapseoftheoneyearperiod,the remedyofthepartydispossessedofalandistofilean"accionpubliciana." 14Consequently,therespondentcourtcommittedreversible errorwhenitsustainedtherulingoftheRegionalTrialCourtupholdingtheclaimofownershipoftheprivaterespondents. INVIEWWHEREOF,theDecisionoftherespondentCourtofAppealsissetaside.TheComplaintdocketedasCivilCaseNo.717filed intheMunicipalTrialCourtofSanMateo,Rizalisordereddismissed.Nocosts. SOORDERED.

EJECTMENTANDLEASE Mariel Angela Piedad Soriano

RepublicofthePhilippines SUPREMECOURT Manila FIRSTDIVISION G.R.No.152145March30,2004 SALUDD.LOPEZ,REMEDIOSLOPEZMARZAN,ROSELOPEZCO,AMADOD.LOPEZ,CYNTHIALOPEZ PORTUGAL,JOSED.LOPEZJR.,andMAYLOPEZRUEDArepresentedbySALUDD.LOPEZ,petitioners, vs. ROBERTP.DAVIDJR.andCLEOPATRADAVIDCAMPORUIZ,respondents. DECISION PANGANIBAN,J.: Ejectmentproceedingsmustobservejurisdictionalrequirementstocomplementtheirsummarynature.Amongthemistheoneyearbar withinwhichtobringthesuit.Afterthelapseofthisperiod,plaintiffscannolongeravailthemselvesofthesummarysuitsinthe MetropolitanTrialCourt(MeTC)ortheMunicipalTrialCourt(MTC),butmustlitigateintheRegionalTrialCourtinanordinaryaction torecoverpossession. TheCase BeforeusisaPetitionforReview1 underRule45oftheRulesofCourt,seekingtosetasidetheApril26,2001Decision 2 andthe February5,2002Resolution3oftheCourtofAppeals(CA)inCAGRSPNo.59724.TheassailedDecisiondisposedasfollows: "WHEREFORE,thepetitionisGIVENDUECOURSE.TheappealeddecisionoftheRegionalTrialCourtofQuezonCity(Branch95)is REVERSEDandSETASIDEandanotherrenderedDISMISSINGtheejectmentcase."4 Ontheotherhand,thechallengedResolutiondeniedpetitionersMotionforReconsideration. TheFacts ThefactsofthecasearenarratedbytheCAasfollows: "SubjectofanactionforejectmentbeforetheMetropolitanTrialCourt[MeTC]ofQuezonCity(Branch38)wasa540square meterland(orsubjectproperty),locatedatNo.174Sct.Fuentebella,QuezonCityandcoveredbyTCTNo.RT109698 (26613)inthenameofJoseC.Lopez(orLopez). "TheactionwasinstitutedonOctober2,1996bySaludD.Lopez,RemediosLopezMarzan,RoseLopezCo,AmadoD.Lopez, CynthiaLopezPortugal,JoseD.Lopez,Jr.andMayLopezRueda[orpetitioners]againstRobertP.DavidandCleopatra David CampoRuiz [or respondents]. It was predicatedontheavermentsthat[petitioners]arethe owners of the subject propertywhichwaspurchasedfromthePeoplesHomesiteandHousingCorporationbyLopez,deceasedhusbandof[petitioner] SaludD.Lopez(orSalud)andfatheroftherestofthe[petitioners];thatin1954,uponherrequest,CirilaSadsadVda.De David(orCirila),Saludsmotherand[respondents]grandmother,wasallowedbySaludtobuildaresidentialhouseonthe subjectpropertyandtostaythereonuntilshecouldfindasuitableresidenceofherown;thatuponCirilasdeath,[respondents] continuedheroccupancyofthesubjectproperty;thatthepossessionofCirilaand[respondents]ofthesubjectproperty,without payingrentalsandawrittencontract,wasupontoleranceofSalud;that[petitioners]withdrewtheirconsentto[respondents] occupancyofthesubjectpropertypertheirlawyersletterdatedAugust10,1995demandingofthemtovacatethesameonor beforeSeptember15,1995,which[respondents]didnotheed. "Intheirdefense,[respondents]allegedthatthesubjectpropertyisownedincommonbyCirilaschildren,Salud,RobertS. David,Sr.(fatherof[respondent]RobertP.David)andCelestinaS.David(motheroftheother[respondent]);thatthesubject propertywasplacedinthenameofLopezupontheagreementthatitwouldbeheldintrustforCirilaschildren;andthatSalud, LigayaS.David(motherof[respondent]RobertP.David)andCelestinaS.Davidbuiltathreedoorapartmentonthesubject propertywhichequallybelongstothem. "OnAugust15,1997,the[MeTC]renderedadecision,thedispositiveportionofwhichreads: WHEREFORE,premisesconsidered,judgmentisherebyrenderedinfavorof[petitioners]andagainst[respondents].Accordingly,the

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latterisherebyorderedasfollows: a)Tovacatethedisputedproperty,specificallylocatedatNo.174Sct.FuentebellaSt.,Diliman,QuezonCityandcompletely surrenderpossessionthereofto[petitioners]; b)Topay[petitioners]theamountofP10,000.00asareasonableamountofcompensationorrentalfortheuseandoccupancy thereofperuniteachmonth,tobereckonedfromSeptember15,1995untiltheyshallhavevacatedthesame; c)Topay[petitioners]thesumofP10,000.00asandforattorneysfees;and d)Topaythecostsofsuit. Thecounterclaimof[respondents]isherebydismissedforlackofmerit. SOORDERED. "PetitionersappealedtotheRegionalTrialCourt(orRTC)ofQuezonCity(Branch95)which,onDecember17,1999,rendereda decisionaffirmingentotothatofthe[MeTC].xxx."5 RulingoftheCourtofAppeals TheCAfoundthattheMeTCerredintakingcognizanceoftheejectmentsuit,sincethecasehadbeenfiledbeyondoneyearfromthe withholdingofpossession.6Theappellatecourtruledthus: "ItappearsthatpursuanttothedemandletterdatedAugust10,1995of[petitioners]lawyer,[respondents]weregivenuntil September15,1995withinwhichtovacatethesubjectpropertyandsurrenderpossessionthereofto[petitioners].Underthe situation,[respondents]possessionbecameunlawfulonSeptember16,1995,oruponexpirationofthegraceperiod,whenthey continuedoccupyingthesubjectproperty.However,theejectmentsuitwasonlyinstitutedonOctober2,1996,ormorethanone yearfromexpirationoftheperiodgiven[respondents]tovacatethesubjectproperty. "TheoneyearperiodprovidedforinSec.1,Rule70ofthe1997RulesofCivilProcedurecommencesfromaccrualofthecause ofactionorfromtheunlawfulwithholdingofpossessionoftherealty.Inanactionforunlawfuldetainer,asinthecaseatbench, itiscountedfromthelastletterofdemandtovacate. "Sincetheejectmentsuitwasinstitutedafterayearfromthedemandtovacate,itisanaccionpublicianawhichiscognizableby theRTC.Accionpublicianaistheplenaryactiontorecovertherightofpossessionwhenthedispossessionhaslastedformore thanoneyear. "Consequently,theMTChasnojurisdictionoverthesubjectmatteroftheaction.AndinaffirmingthedecisionoftheMTC,the RTC had committed a palpable error and/or had acted with grave abuse of discretion amounting to lack or excess of jurisdiction."7(Citationsomitted) IndenyingpetitionersMotionforReconsideration,8theCAnotedthat"amongtheaffirmativedefensespleadedintheAnswerwasthat thisHonorableCourtdoesnothaveanyjurisdictionoverthecasebecausetherealissueisownership,whileinthe[pretrial]brief, [respondents]posedtheissueofwhetherthecourtoforiginhasjurisdictionoverthesubjectmatterofthecaseconsideringthatthereis nolessorlesseerelationshipbetweentheparties."9 Hence,thisPetition.10 TheIssue IntheirMemorandum,petitionersraisedthissoleissueforourconsideration: "WhethertheHonorableCourtofAppealserredindismissingthecaseforejectment[on]thegroundoflackofjurisdiction despitethesubmissionofrespondentstotheMTCandRTCandalltheproceedingstherein."11 TheCourtsRuling ThePetitionisbereftofmerit. SoleIssue: Jurisdiction Petitionerscontendthat,havingparticipatedinthetrialofthecaseandhavingbelatedlyraisedtheissueofjurisdictionforthefirsttimeon

EJECTMENTANDLEASE Mariel Angela Piedad Soriano

appealwiththeCA,respondentsareestoppedfromquestioningthejurisdictionoftheMeTC. JurisdictionLieswiththeRTC Wellsettledistherulethatthejurisdictionofthecourtandthenatureoftheactionaredeterminedbytheavermentsinthecomplaint. 12 Togivethecourtjurisdictiontoeffecttheejectmentofanoccupantoradeforciantfromtheland,itisnecessarythatthecomplaintshould embodyastatementoffactsthatbringsthepartyclearlywithintheclassofcasesforwhichthestatutesprovidearemedy,asthese proceedingsaresummaryinnature.13Onitsface,thecomplaintmustshowenoughgroundforthecourttoassumejurisdictionwithout resorttoparoltestimony.14 Pertinentallegationsinpetitionerscomplaintareasfollows: "3.That[petitioners]xxxarecoownersofaparceloflandlocatedatDiliman,QuezonCityxxx; "4.Thatsometimein1954,[petitioner]SALUDD.LOPEZsmother,CIRILASADSADVda.DEDAVID,requestedherein [petitioners]toallowtheformertotemporarilybuildaresidentialhouseat[petitioners]propertyandstayinthepremisesuntil hermothershall[have]foundasuitableresidenceofherown; "5.Thatsincethen,[petitioners]allowedsaidCirilaDavidtooccupythepremiseswithoutpayingmonthlyrentandwithoutthe benefitofawrittencontractbutthrusheertoleranceofthe[petitioners]; "6.Thatuponthedeathof[petitioner]SaludD.Lopezsmother,[respondents]continuedtooccupythesubjectpremiseswithout payinganyrentalsandwereallowedtocontinuetooccupytwo(2)separateunitsthrusheergenerosityandmeretoleranceof herein[petitioners]; "7.Thatsubsequently,[petitioners]withdrewtheirconsentandrepeateddemandsweremadeupon[respondents]tovacatethe subject premises but [respondents] refused and failed to heed the demand violative of [petitioners] preferential right of possessionoverthesubject2units; "8.ThatonAugust4,1995,[petitioners]wereconstrainedtoreferthemattertotheirpreviouslawyerforappropriatelegal action,towhichaletterofdemandwassentto[respondents]tovacatethepremisesbutxxxthelatterrefusedxxxtovacate thesubjectpremises;xxx"15 Tosummarize,petitionersaverthat(1)theyaretheownersoftheproperty;(2)theyallowedrespondentstooccupyitbytolerance;(3) theywithdrewtheirconsent;and(4)theydemandedthatrespondentsleavetheproperty,butthelatterrefusedtodoso. Basedontheforegoingaverments,thecaseatbarinvolvesunlawfuldeprivationorwithholdingofpossession.Hence,itcouldeitherbe oneforunlawfuldetainercognizablebytheMeTCunderRule70oroneforaccionpubliciana,whichiscognizablebytheregionaltrial court.16 TheComplaintfiledbypetitionersallegesthatthedemandletterrequiredrespondentstoleaveonSeptember15,1995.Theejectmentcase wasfiledonSeptember24,1996.17Thus,theMeTChadnojurisdictiontohearthecase. UnderSection1ofRule70,18theoneyearperiodwithinwhichacomplaintforunlawfuldetainercanbefiledshouldbecountedfromthe dateofdemand,becauseonlyuponthelapseofthatperioddoesthepossessionbecomeunlawful.19Inthepresentcase,itisundisputed thatpetitionersComplaintwasfiledbeyondoneyearfromthetimethatrespondentspossessionallegedlybecameunlawful. Wehaveruledthat"forcibleentryandunlawfuldetainerarequietingprocessesandtheoneyeartimebartothesuitisinpursuanceofthe summarynatureoftheaction."20Thus,wehavenullifiedproceedingsintheMeTCwhenitimproperlyassumedjurisdictionofacasein whichtheunlawfuldeprivationorwithholdingofpossessionhadexceededoneyear.21 Afterthelapseoftheoneyearperiod,thesuitmustbecommencedintheRTCviaanaccionpubliciana. 22Accionpublicianaisasuitfor recoveryoftherighttopossess.Itisanordinarycivilproceedingtodeterminethebetterrightofpossessionofrealtyindependentlyof title.23Italsoreferstoanejectmentsuitfiledaftertheexpirationofoneyearfromtheaccrualofthecauseofactionorfromtheunlawful withholdingofpossessionoftherealty.24TheCAwasthuscorrectindeclaringthatjurisdictionbelongedtotheRTC. EstoppelDoesNotApply Itissettledthatanydecisionrenderedwithoutjurisdictionisatotalnullityandmaybestruckdownatanytime,evenonappealbeforethis Court.25Indeed,thegeneralruleisthataquestionofjurisdictionmayberaisedatanytime,providedthatdoingsodoesnotresultinthe mockeryofthetenetsoffairplay.26 Anexceptiontothisruleariseswhenthepartyisbarredbyestoppel,inwhichcasetheissueof EJECTMENTANDLEASE Mariel Angela Piedad Soriano

jurisdictionmaynotberaised.27 Inbringinguptheissueofestoppel,petitionersprincipallyanchortheirargumentonTijamv.Sibonghanoy. 28 Applyingtheruleon estoppelbylaches,wedeclaredthereinthatthefailuretoraisethequestionofjurisdictionatanearlierstagebarredthepartyfrom questioningitlater.Weexplained: "Apartymaybeestoppedorbarredfromraisingaquestionindifferentwaysandfordifferentreasons.Thus,wespeakof estoppelinpais,ofestoppelbydeedorbyrecord,andofestoppelbylaches. "Laches,inageneralsense,isfailureorneglect,foranunreasonableandunexplainedlengthoftime,todothatwhich,by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonabletime,warrantingapresumptionthatthepartyentitledtoassertiteitherhasabandoneditordeclinedtoassertit. "Thedoctrineoflachesorofstaledemandsisbasedupongroundsofpublicpolicywhichrequires,forthepeaceofsociety,the discouragementofstaleclaimsand,unlikethestatuteoflimitations,isnotamerequestionoftimebutisprincipallyaquestion oftheinequityorunfairnessofpermittingarightorclaimtobeenforcedorasserted."29 Wehaveappliedthisdoctrinetosucceedingcasesbydenyingallegationsoflackofjurisdictionifthequestionwasnotraisedatanearlier stage,butbroughtuponlyafteranadversedecision. 30Wehavealsostressed,however,thatthisdoctrineismerelyanexceptiontothe generalruleandtimehonoredprinciplethatjurisdictionisnotlostbywaiverorbyestoppel.31 Consideringtheseestablishedfacts,wefindthattheTijamdoctrineisinapplicable. Asdefinedinthatcase,estoppelbylachesoccurswhenapartyfailsthroughnegligenceoromissiontoassertarightwithina reasonabletime,warrantingapresumptionthatthepartyentitledtoassertithasabandonedordeclinedtoassertit. Herein,respondentscannotbeperceivedtohavewarrantedthepresumptionthattheywereabandoningordecliningtoasserttherightto questionthejurisdictionoftheMeTC.Fromthebeginning,theyhavebeenchallengingitsjurisdictionandassertingthattheRTC,notthe MeTC,hadjurisdictionoverthecase.Thus,intheirAnswerwithaffirmativedefensesandcounterclaim, 32theychallengedtheMeTCs jurisdictionovertheComplaint.33ThesameobjectionswereallegedandpresentedasissuesintheirpretrialBrief.34 We also note that respondents consistently allege that they"havebeeninpeacefulpossessionofthepremises since 1951." 35 Their argumentisthattheMeTChasnojurisdiction,sincetheunlawfulwithholdingofpossessionhasalreadyexceededoneyear.Intheir Memorandum36submittedonappealtotheRTC,respondentsargued: "10.Itisalsoanundisputedfactthat[respondents]havebeenincontinuousanduninterruptedpossessionofthepremisesfrom1951upto presenttimeor[for]aperiodoffortysevenyears(47). xxxxxxxxx Evenifoneistheowneroftheproperty,thepossessionthereofcannotbewrestedfromanotherwhohadbeeninthephysicalormaterial possessionofthesameformorethanoneyearbyresortingtoasummaryactionforejectment.xxx37 xxxxxxxxx Accionpublicianaistheplenaryactiontorecovertherightofpossessionwhendispossessionhaslastedformorethanoneyearorwhen dispossessionwaseffectedbymeansotherthanthosementionedinRule70oftheRulesofCourt."38 ItisapparentthatrespondentshavebeenquestioningthejurisdictionoftheMeTCandallegingthatthecontroversywasoriginally cognizablebytheRTC,contrarytothecontentionofpetitioners.Thus,wecannotcountenancepetitionerspositionthatrespondentsare alreadyestoppedfromraisingtheissueofjurisdictionorofwhethertheejectmentcasewasfiledwithintheoneyearperiodafterthe withholdingofpossession. Withregardtothelapseoftheoneyearperiodfromthedateofdemand,evenassumingthatrespondentsraisedtheissueonlyforthefirst timeonappealwiththeCA,theforegoingargumentcanbeconsideredwithoutviolatingfairplay.Thispositionisconsistentwiththe theoryadoptedandconstantlyraisedbyrespondentsinthelowercourts:thattheMeTChadnojurisdiction. Finally,wefinditnecessarytoapplythestrictinterpretationofthejurisdictionrule,giventhefactthat(1)respondentshavebeenin possessionofthepropertysince1954;(2)proceedingsofforcibleentryandunlawfuldetaineraresummaryinnature;and(3)theoneyear timebartothesuitisconsistentwiththesummarynatureoftheaction.39 WHEREFORE,thisPetitionisDENIEDandtheassailedDecisionandResolutionAFFIRMED.Costsagainstpetitioners. EJECTMENTANDLEASE Mariel Angela Piedad Soriano

RepublicofthePhilippines SUPREMECOURT Manila THIRDDIVISION G.R.No.115307July8,1997 MANUELLAO,petitioner, vs. COURTOFAPPEALSandBETTERHOMESREALTY&HOUSINGCORPORATION,respondents. PANGANIBAN,J.: Asageneralrule,themainissueinanejectmentsuitispossessiondefacto,notpossessiondejure.Intheeventtheissueofownershipis raisedinthepleadings,suchissueshallbetakenuponlyforthelimitedpurposeofdeterminingwhobetweenthecontendingpartieshas thebetterrighttopossession.However,whereneitherofthepartiesobjectstotheallegationofthequestionofownershipwhichmay beinitiallyimprovidentorimproperinanejectmentsuitand,instead,bothpresentevidencethereon,arguethequestionintheirvarious submissionsandparticipateinallaspectsofthetrialwithoutobjectingtotheMetropolitan(orMunicipal)TrialCourt'sjurisdictionto decidethequestionofownership,theRegionalTrialCourtintheexerciseofitsoriginaljurisdictionasauthorizedbySection11,Rule 40oftheRulesofCourtmayruleontheissueandthecorollaryquestionofwhetherthesubjectdeedisoneofsaleorofequitable mortgage. ThesepostulatesarediscussedbytheCourtasitresolvesthispetitionunderRule45seekingareversaloftheDecember21,1993Decision 1 andApril28,1994Resolution2oftheCourtofAppealsinCAG.R.SPNo.9214293. TheAntecedentFacts ThefactsofthiscasearenarratedbyRespondentCourtofAppealsasfollows: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)istheownerofthepremisessituatedatUnitI,No.21N.DomingoStreet,QuezonCity,evidencedby TransferCertificateofTitleNo.22184oftheRegistryofDeedsofQuezonCity;that(hereinPetitionerManuelLao) occupiedthepropertywithoutrent,buton(privaterespondent's)pureliberalitywiththeunderstandingthathewould vacatethepropertyupondemand,butdespitedemandtovacatemadebyletterreceivedby(hereinpetitioner)on February5,1992,the(hereinpetitioner)refusedtovacatethepremises. Inhisanswertothecomplaint,(hereinpetitioner)claimedthatheisthetrueownerofthehouseandlotlocatedatUnit I,No.21N.DomingoStreet,QuezonCity;thatthe(hereinprivaterespondent)purchasedthesamefromN.Domingo RealtyandDevelopmentCorporationbuttheagreementwasactuallyaloansecuredbymortgage;andthatplaintiff's causeofactionisforaccionpubliciana,outsidethejurisdictionofaninferiorcourt. OnOctober9,1992,theMetropolitanTrialCourtofQuezonCityrenderedjudgmentorderingthe(petitioner)to vacatethepremiseslocatedatUnitI,No.21N.DomingoStreet,QuezonCity;topay(privaterespondent)thesumof P300.00adaystartingonJanuary31,1992,asreasonablerentfortheuseandoccupationofthepremises;topay plaintiffP5,000.00,asattorney'sfees,andcosts. OnappealtotheRegionalTrialCourtofQuezonCity, 4 onMarch30,1993,thelattercourtrenderedadecision reversingthatoftheMetropolitanTrialCourt,andorderingthedismissalofthe(privaterespondent's)complaintfor lackofmerit,withcoststaxedagainst(privaterespondent). Initsdecision,theRegionalTrialCourtheldthatthesubjectpropertywasacquiredby(privaterespondent)fromN. DomingoRealtyandDevelopmentCorporation,byadeedofsale,and(privaterespondent)isnowtheregistered owner underTransferCertificate ofTitleNo.316634oftheRegistryofDeedsofQuezonCity,butintruththe (petitioner)isthebeneficialownerofthepropertybecausetherealtransactionoverthesubjectpropertywasnotasale butaloansecuredbyamortgagethereon. EJECTMENTANDLEASE Mariel Angela Piedad Soriano

ThedispositiveportionoftheRegionalTrialCourt'sdecisionisquotedbelow:5 WHEREFORE,judgmentisherebyrenderedreversingtheappealeddecisionandorderingthedismissalofplaintiffs complaintforlackofmerit,withthecoststaxedagainstit. ITISSOORDERED. OnApril28,1993,privaterespondentfiledanappealwiththeCourtofAppealswhichreversedthedecisionoftheRegionalTrialCourt. TheRespondentCourtruled: TheMetropolitanTrialCourthasnojurisdictiontoresolvetheissueofownershipinanactionforunlawfuldetainer (B.P.129,Sec.33[2];Cf.Alvirvs.Vera,130SCRA357).Thejurisdictionofacourtisdeterminedbythenatureof theactionallegedinthecomplaint(Chingvs.Malaya,l53SCRA412).Initscomplaintintheinferiorcourt,the plaintiffallegedthatitistheownerofthepremiseslocatedatUnitI,No.21N.DomingoStreet,QuezonCity,andthat defendant'soccupationisrentfreeandbasedonplaintiffspureliberalitycoupledwithdefendant'sundertakingto vacatethepremisesupondemand,butdespitedemands,defendanthasrefusedtovacate.Theforegoingallegations sufficetoconstituteacauseofactionforejectment(BancodeOrovs.CourtofAppeals,182SCRA464). TheMetropolitanTrialCourtisnotoustedofjurisdictionsimplybecausethedefendantraisedthequestionownership (Bolusvs.CourtofAppeals,218SCRA798).Theinferiorcourtshallresolvetheissueofownershiponlytodetermine whoisentitledtothepossessionofthepremises(B.P.129,Sec.33[2];Bolusvs.CourtofAppeals,supra). Here,theMetropolitanTrialCourtruledthatasowner,plaintiff(hereinprivaterespondentBetterHomesRealtyand HousingCorporation)isentitledtothepossessionofthepremisesbecausethedefendant'sstayisbymeretoleranceof theplaintiff(hereinprivaterespondent). On the other hand, the Regional Trial Court ruled that the subject property is owned by the defendant, (herein petitionerManuelLao)and,consequently,dismissedthecomplaintforunlawfuldetainer.Thus,theRegionalTrial Courtresolvedtheissueofownership,asifthecasewereoriginallybeforeitasanactionforrecoveryofpossession, or accionpubliciana,withinitsoriginaljurisdiction.InanappealfromadecisionoftheMunicipalTrialCourt,or MetropolitanTrialCourt,inanunlawfuldetainercase,theRegionalTrialCourtissimplytodeterminewhetherthe inferiorcourtcorrectlyresolvedtheissueofpossession;itshallnotdelveintotheissueofownership(Manuelvs. CourtofAppeals,199SCRA603).WhattheRegionalTrialCourtdidwastorulethattherealagreementbetweenthe plaintiffandthepreviousownerofthepropertywasnotasale,butanequitablemortgage.Defendantwasonlya directorofthesellercorporation,andhisclaimofownershipcouldnotbetrue.Thisquestioncouldnotbedetermined summarily.Itwasnotproperlyinissuebeforetheinferiorcourtbecause,asaforesaid,theonlyissuewaspossessionde facto(Manlapazvs.CourtofAppeals,191SCRA795),orwhohasabetterrighttophysicalpossession(Dalidavs. CourtofAppeals,117SCRA480).Consequently,theRegionalTrialCourterredinreversingthedecisionofthe MetropolitanTrialCourt. WHEREFORE,theCourtherebyREVERSESthedecisionoftheRegionalTrialCourt.Inlieuthereof,Weaffirmthe decisionoftheMetropolitanTrialCourtofQuezonCitysentencingthedefendantandallpersonsclaimingrightunder himtovacatethepremisessituatedatUnitI,No.21N.DomingoStreet,QuezonCity,andtosurrenderpossessionto theplaintiff;topayplaintiffthesumofP300.00,adaystartingonJanuary31,1992,untildefendantshallhavevacated thepremises;topayplaintiffP5,000.00asattorneysfees,andcosts. SOORDERED.6 ManuelLao'smotionforreconsiderationdatedJanuary24,1994wasdeniedbytheCourtofAppealsinitsResolutionpromulgatedon April28,1994.Hence,thispetitionforreviewbeforethisCourt.7 TheIssues PetitionerManuelLaoraisesthreeissues: 3.1Whetherornotthelowercourtcandecideontheissueofownershipinthepresentejectment case. 3.2Whetherornotprivaterespondenthadacquiredownershipoverthepropertyinquestion. 3.3Whetherornotpetitionershouldbeejectedfromthepremisesinquestion8

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TheCourt'sRuling Thepetitionforreviewismeritorious. FirstIssue:JurisdictiontoDecidetheIssueofOwnership TheCourtofAppealsheldthatasageneralrule,theissueinanejectmentsuitispossessiondefacto,notpossessiondejure,andthatin theeventtheissueofownershipisraisedasadefense,theissueistakenupforthelimitedpurposeofdeterminingwhobetweenthe contendingpartieshasthebetterrighttopossession.Beyondthis,theMTCactsinexcessofitsjurisdiction.However,weholdthatthisis notahardandfastrulethatcanbeappliedautomaticallytoallunlawfuldetainercases. Section11,Rule40oftheRulesofCourtprovidesthat"[a]casetriedbyaninferiorcourtwithoutjurisdictionoverthesubjectmattershall bedismissedonappealbytheCourtofFirstInstance.Butinsteadofdismissingthecase,theCourtofFirstInstance,intheexerciseofits originaljurisdiction,maytrythecaseonthemeritsifthepartiesthereinfiletheirpleadingsandgotothetrialwithoutanyobjectionto suchjurisdiction."Afterathoroughreviewoftherecordsofthiscase,theCourtfindsthattherespondentappellatecourtfailedtoapply thisRuleanderroneouslyreversedtheRTCDecision. RespondentCourtcitesAlvirvs.VeratosupportitsDecision.Onthecontrary,webelievesuchcasebuttressesinsteadtheRegionalTrial Court'sdecision.Thecitedcaseinvolvesanunlawfuldetainersuitwheretheissueofpossessionwasinseparablefromtheissueoftransfer ofownership,andthelatterwasdeterminableonlyafteranexaminationofacontractofsaleinvolvingthepropertyinquestion.TheCourt ruledthatwherea"casewastriedandheardbythelowercourtintheexerciseofitsoriginaljurisdictionbycommonassentoftheparties byvirtueoftheissuesraised...andtheproofspresentedbythem,"anydismissalonthegroundoflackofjurisdiction"wouldonlylead toneedlessdelaysandmultiplicityofsuits."TheCourtheld: In actions of forcible entry and detainer, the main issue is possession de facto, independently of any claim of ownershiporpossessiondejurethateitherpartymaysetforthinhispleading....Defendant'sclaimofownershipof thepropertyfromwhichplaintiffseekstoejecthimisnotsufficienttodivesttheinferiorcourtofitsjurisdictionover theactionofforcibleentryanddetainer.However,ifitappearsduringthetrialthattheprincipalissuerelatestothe ownershipofthepropertyindisputeandanyquestionofpossessionwhichmaybeinvolvednecessarilydependsupon theresultoftheinquiryintothetitle,previousrulingsofthisCourtarethatthejurisdictionofthemunicipalorcity courtislostandtheactionshouldbedismissed. Wehaveatbaracasewhere,ineffect,thequestionofphysicalpossessioncouldnotproperlybedeterminedwithout settlingthatoflawfulordejurepossessionandofownershipandhence,followingearlydoctrine,thejurisdictionof themunicipalcourtovertheejectmentcasewaslostandtheactionshouldhavebeendismissed.Asaconsequence, respondentcourtwouldhavenojurisdictionoverthecaseonappealanditshouldhavedismissedthecaseonappeal fromthemunicipaltrialcourt.However,inlinewithSection11,Rule40oftheRevisedRulesofCourt,which reads Sec.11. LackofJurisdiction.Acasetriedbyaninferiorcourtwithoutjurisdictionoverthe subject matter shall be dismissed on appeal by the Court of First Instance. But instead of dismissingthecase,theCourtofFirstInstanceintheexerciseofitsoriginaljurisdiction,maytry thecaseonthemeritsifthepartiesthereinfiletheirpleadingsandgototrialwithoutobjectionto suchjurisdiction. thisCourtheldin Saliwan vs. Amores,51SCRA329,337,thatdismissal"onthesaidgroundoflackofappellate jurisdictiononthepartofthelowercourtflowingfromthemunicipalcourt'slossofjurisdictionwouldleadonlyto needlessdelayandmultiplicityofsuitsintheattainmentofthesameresultandignores,asabovestated,thatthecase wastriedandheardbythelowercourtintheexerciseofitsoriginaljurisdictionbycommonassentofthepartiesby virtueoftheissuesraisedbythepartiesandtheproofpresentedbythemthereon."9 ThispronouncementwasreiteratedbythisCourtthroughMr.JusticeTeodoroR.PadillainConsignadovs.CourtofAppeals10asfollows: AstheMTCofLagunahadnojurisdictionovertheunlawfuldetainercaseinviewoftheraisedquestionoftitleor ownershipoverthepropertyindispute,theRTCofLagunaalsohadnoappellatejurisdictiontodecidethecaseonthe merits.Itshouldhavedismissedtheappeal.However,ithadoriginaljurisdictiontopassuponthecontroversy.Itisto benoted,inthisconnection,thatintheirrespectivememorandafiledwiththeRTCofLaguna,thepetitionersand privaterespondentsdidnotobjecttothesaidcourtexercisingitsoriginaljurisdictionpursuanttotheaforequoted provisionsofSection11,Rule40oftheRulesofCourt. xxxxxxxxx EJECTMENTANDLEASE Mariel Angela Piedad Soriano

Petitionersnowcontend,amongothers,thattheCourtofAppealserredinresolvingthequestionofownershipasif actualtitle,notmerepossessionofsubjectpremises,isinvolvedintheinstantcase. Thepetitioner'scontentionisuntenable.SincetheMTCandRTCofLagunadecidedthequestionofownershipover thepropertyindispute,onappealtheCourtofAppealshadtoreviewandresolvealsotheissueofownership.... Itisclear,therefore,thatalthoughanactionforunlawfuldetainer"isinadequatefortheventilationofissuesinvolvingtitleorownershipof controvertedrealproperty,[i]tismoreinkeepingwithproceduraldueprocessthatwhereissuesoftitleorownershipareraisedinthe summaryproceedingsforunlawfuldetainer,saidproceedingshouldbedismissedforlackofjurisdiction,unless,inthecaseofanappeal fromtheinferiorcourttotheCourtofFirstInstance,thepartiesagreetothelatterCourthearingthecaseinitsoriginaljurisdictionin accordancewithSection11,Rule40..."11 Inthecaseatbar,adeterminationoftheissueofownershipisindispensabletoresolvingtherightsofbothpartiesoverthepropertyin controversy,andisinseparablefromadeterminationofwhobetweenthemhastherighttopossessthesame.Indeed,theverycomplaint forunlawfuldetainerfiledintheMetropolitanTrialCourtofQuezonCityisanchoredontheallegedownershipofprivaterespondentover thesubjectpremises. 12 Thepartiesdidnotobjecttotheincongruityofaquestionofownershipbeingbroughtinanejectmentsuit. Insteadtheybothsubmittedevidenceonsuchquestion,andtheMetropolitanTrialCourtdecidedontheissue.Thesefactsareevidentin theMetropolitanTrialCourt'sdecision: Fromtherecordsofthecase,theevidencepresentedandthevariousargumentsadvancedbytheparties,theCourt findsthatthepropertysubjectmatterofthiscaseisinthenameof(hereinprivaterespondent)BetterHomesand RealtyHousingCorporation;thattheDeedofAbsoluteSalewhichwasthebasisfortheissuanceofsaidTCTNo. 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;thataBoardResolutionofN.DomingoandRealtyandDevelopmentCorporation(Exhibit"D"position paper) showsthat the DirectorsoftheBoardoftheN.DomingoRealtyandDevelopmentCorporationpasseda resolutionsellingapartmentunitsIandFlocatedatNo.21N.DomingoSt.,QuezonCityanddesignatingthe(herein petitioner)withhisbrotherArtemioS.LaoassignatoriestotheDeedofSale.Theclaimthereforeofthe(herein petitioner)thatheownsthepropertyisnottrue...13 WhentheMTCdecisionwasappealedtotheRegionalTrialCourt,notoneofthepartiesquestionedtheMetropolitanTrialCourt's jurisdictiontodecidetheissueofownership.Infact,therecordsshowthatbothpetitionerandprivaterespondentdiscussedtheissuein their respective pleadings before the Regional Trial Court. 14 They participated in all aspects of the trial without objection to its jurisdictiontodecidetheissueofownership.Consequently,theRegionalTrialCourtaptlydecidedtheissuebasedontheexerciseofits originaljurisdictionasauthorizedbySection11,Rule40oftheRulesofCourt. ThisCourtfurthernotesthatinbothofthecontendingparties'pleadingsfiledonappealbeforetheCourtofAppeals,theissueof ownership was likewise amply discussed. 15 The totality of evidence presented was sufficient to decide categorically the issue of ownership. Theseconsiderations,takentogetherwiththefactthatboththeMetropolitanTrialCourtandtheRegionalTrialCourtdecidedtheissueof ownership,justifythereviewofthelowercourts'findingsoffactanddecisionontheissueofownership.Thiswenowdo,aswedispose ofthesecondissueanddecidethecasewithfinalitytosparethepartiesthetime,troubleandexpenseofundergoingtherigorsofanother suitwheretheywillhavetopresentthesameevidencealloveragainandwhere,inallprobability,thesameultimateissueofownership willbebroughtuponappeal. SecondIssue:AbsoluteSaleorEquitableMortgage? PrivateRespondentBetterHomesRealtyandHousingCorporationanchoreditsrightintheejectmentsuitonacontractofsaleinwhich petitioner(throughtheirfamilycorporation) transferredthetitleofthepropertyinquestion.Petitionercontends,howeverthattheir transactionwasnotanabsolutesale,butanequitablemortgage. Indeterminingthenatureofacontract,theCourtlooksattheintentofthepartiesandnotatthenomenclatureusedtodescribeit.Pivotal todecidingthisissueisthetrueaimandpurposeofthecontractingpartiesasshownbytheterminologyusedinthecovenant,aswellas "bytheirconduct,words,actionsanddeedspriorto,duringandimmediatelyafterexecutingtheagreement." 16 Inthisregard,parol evidencebecomesadmissibletoprovethetrueintentandagreementofthepartieswhichtheCourtwillenforceevenifthetitleofthe propertyinquestionhasalreadybeenregisteredandanewtransfercertificateoftitleissuedinthenameofthetransferee.InMacapinlac vs.GutierrezRepide,whichinvolvedanidenticalquestion,theCourtsuccintlystated:

EJECTMENTANDLEASE Mariel Angela Piedad Soriano

...ThisconclusionisfullysupportedbythedecisioninCuyuganvs.Santos(34Phil.,100),wherethiscourtheldthat aconveyanceintheformof acontractofsalewithpactoderetrowillbetreatedasameremortgage,ifreally executed as security for a debt, and that this fact can be shown by oral evidence apart from the instrument of conveyance,adoctrinewhichhasbeenfollowedinthelatercasesofVillavs.Santiago(38Phil.,157),andCuyugan vs.Santos(39Phil.,970). xxxxxxxxx Inthefirstplace,itmustbeborneinmindthattheequitabledoctrinewhichhasbeensofullystatedabove,tothe effectthatanyconveyanceintendedassecurityforadebtwillbeheldineffecttobeamortgage,whethersoactually expressedintheinstrumentornot,operatesregardlessoftheformoftheagreementchosenbythecontractingparties astherepositoryoftheirwill.Equitylooksthroughtheformandconsidersthesubstance;andnokindofengagement canbeadoptedwhichwillenablethepartiestoescapefromtheequitabledoctrinetowhichreferenceismade.Inother words,aconveyanceofland,accompaniedbyregistrationinthenameofthetransfereeandtheissuanceofanew certificate,isnomoresecuredfromtheoperationofthisequitabledoctrinethanthemostinformalconveyancethat couldbedevised.17 Thelawenumerateswhenacontractmaybepresumedtobeanequitablemortgage: (1)Whenthepriceofasalewithrighttorepurchaseisunusuallyinadequate; (2)Whenthevendorremainsinpossessionaslesseeorotherwise; (3)Whenuponoraftertheexpirationoftherightrepurchaseanotherinstrumentextendingthe periodofredemptionorgrantinganewperiodisexecuted; (4)Whenthepurchaserretainsforhimselfapartofthepurchaseprice; (5)Whenthevendorbindshimselftopaythetaxesonthethingsold; (6)Inanyothercasewhereitmaybefairlyinferredthattherealintentionofthepartiesisthatthe transactionshallsecurethepaymentofadebtortheperformanceofanyotherobligation. xxxxxxxxx18 Theforegoingpresumptionappliesalsotoa"contractpurportingtobeanabsolutesale."19 Applyingtheprecedingprinciplestothefactualmilieuofthiscase,wefindtheagreementbetweentheprivaterespondentandN. DomingoRealty&HousingCorporation,asrepresentedbypetitioner,manifestlyoneofequitablemortgage. First,possessionofthe propertyinthecontroversyremainedwithPetitionerManuelLaowhowasthebeneficialowneroftheproperty,before,duringandafter theallegedsale. 20 Itissettledthata "pactoderetro saleshouldbetreatedasamortgagewherethe(property)soldneverleftthe possessionofthevendors."21Second,theoptiongiventoManuelLaotopurchasethepropertyincontroversyhadbeenextendedtwice22 throughdocumentsexecutedbyMr.TanBunUy,PresidentandChairmanoftheBoardofBetterHomesRealty&HousingCorporation. Thewordingofthefirstextensionisarefreshingrevelationthatindeedthepartiesreallyintendedtobeboundbyaloanwithmortgage, notbyapactoderetro.Itreads,"OnJune10,88,thisoptionisextendedforanothersixtydaystoexpired(sic)onAug.11,1988.The purchasepriceisincreasedtoP137,000.00.SinceMr.Laoborrow(sic)P20,000.00fromme."23Theseextensionsclearlyrepresentthe extensionoftimetopaytheloangiventoManuelLaouponhisfailuretopaysaidloanonitsmaturity.Mr.Laowasevengrantedan additionalloanofP20,000.00asevidencedbytheabovequoteddocument. Third,unquestionably,ManuelLaoandhisbrotherwerein such"direneedofmoney"thattheymortgagedtheirtownhouseunitsregisteredunderthenameofN.DomingoRealtyCorporation,the familycorporationputupbytheirparents,toPrivateRespondentBetterHomesRealty&HousingCorporation.Inretrospect,itiseasyto blamePetitionerManuelLaofornotdemandingareformationofthecontracttoreflectthetrueintentoftheparties.Butthisseeming inactionissufficientlyexplainedbytheLaobrothers'desperateneedformoney,compellingthemtosignthedocumentpurportingtobea saleaftertheyweretoldthatthesamewasjustfor"formality."24Infact,thisCourt,invariouscasesinvolvingthesamesituation,had occasiontostate: ...In Jayme, etal. v. Salvador, etal.,thisCourtupheldajudgmentoftheCourtofFirstInstanceofIloilowhich found the transaction between the parties to be a loan instead of a sale of real property notwithstanding the terminologyusedinthedocument,aftertakingintoaccountthesurroundingcircumstancesofthetransaction.The CourtthroughJusticeNorbertoRomualdezstatedthatwhileitwastruethatplaintiffswereawareofthecontentsofthe contracts,thepreponderanceoftheevidenceshowedhoweverthattheysignedknowingthatsaidcontractsdidnot EJECTMENTANDLEASE Mariel Angela Piedad Soriano

expresstheirrealintention,andiftheydidsonotwithstandingthis,itwasduetotheurgentnecessityofobtainingfund. "Necessitousmenarenot,trulyspeaking,freemen;buttoanswerapresentemergency,willsubmittoanytermsthat thecraftymayimposeuponthem."25 Moreover,sincetheborrower'surgentneedformoneyplacesthelatteratadisadvantage visavis thelenderwhocanthusdictatethe termsoftheircontract,theCourt,incaseofanambiguity,deemsthecontracttobeonewhichinvolvesthelessertransmissionofrights andinterestoverthepropertyincontroversy.26 Asaptlyfoundandconcludedbytheregionaltrialcourt: TheevidenceofrecordindicatesthatwhileasofApril4,1988(thedateofexecutionoftheDeedofAbsoluteSale wherebytheN.DomingoandRealty&DevelopmentCorporationpurportedlysoldthetownhouseandlotsubjectof this suit to [herein private respondent Better Homes Realty & Housing Corporation] for P100,000.000) said N. DomingoRealty&DevelopmentCorporation(NDRDC,forshort)wastheregisteredownerofthesubjectproperty underTransferCertificateofTitle(TCT)No.316634oftheRegistryofDeedsforQuezonCity,(hereinpetitioner ManuelLao)infactwasandhasbeensince1975thebeneficialownerofthesubjectpropertyand,thus,thesamewas assignedtohimbytheNDRDC,thefamilycorporationsetupbyhisparentsandofwhich(hereinpetitioner)andhis siblingsaredirectors.Thattheparties'realtransactionorcontractoverthesubjectpropertywasnotoneofsalebut, rather,oneofloansecured,byamortgagethereonisunavoidablyinferrablefromthefollowingfactsofrecord,to (hereinpetitioner's)possessionofthesubjectproperty,whichstartedin1975yet,continuedandremainedevenafter theallegedsaleofApril4,1988;(hereinprivaterespondent)executedanoptiontopurchaseinfavor(hereinpetitioner) as early as April 2, 1988 or two days before (herein private respondent) supposedly acquired ownership of the property;thesaidoptionwasrenewedseveraltimesandthepricewasincreasedwitheachrenewal(thus,theoriginal periodfortheexerciseoftheoptionwasuptoJune11,1988andthepricewasP109,000.00;then,onJune10,1988, theoptionwasextendedfor60daysoruntilAugust11,1988andthepricewasincreasedtoP137,000.00;andthenon August11,1988,theoptionwasagainextendeduntilNovember11,1988andthepricewasincreasedtoP158,840.00); and,theDeedofAbsoluteSaleofApril4,1988wasregisteredandthepropertytransferredinthenameof(private respondent)onlyonMay10,1989,perTCTNo.22184oftheRegistryofDeedsforQuezonCity(Arts.1602,nos.2,3, &6,&1604,CivilCode).Indeed,ifitweretrue,asitwouldhavetheCourtbelieve,that(privaterespondent)wasso appreciativeof(petitioner's)allegedfacilitationofthesubjectproperty'ssaletoit,itisquitestrangewhy(private respondent)sometwodaysbeforesuchsupposedsalewouldhavebeenmindedandinclinedtoexecuteanoptionto purchaseallowing(petitioner)toacquirethepropertytheverysamepropertyitwasstillhopingtoacquireatthe time.Certainly,whatismorelikelyandthuscredibleisthat,if(privaterespondent)wasindeedthankfulthatitwas abletopurchasetheproperty,itwouldnotgiven(petitioner)anyoptiontopurchaseatall...27 Basedontheconductofthepetitionerandprivaterespondentandeventheterminologyofthesecondoptiontopurchase,werulethatthe intentandagreementbetweenthemwasundoubtedlyoneofequitablemortgageandnotofsale. ThirdIssue:ShouldPetitionerBeEjected? Weanswerinthenegative.AnactionforunlawfuldetainerisgroundedonSection1,Rule70oftheRulesofCourtwhichprovidesthat: ...alandlord,vendor,vendee,orotherpersonagainstwhomthepossessionofanylandorbuildingisunlawfully withheldaftertheexpirationorterminationoftherighttoholdpossession,byvirtueofanycontract,expressor implied,orthelegalrepresentativesorassignsofanysuchlandlord,vendor,vendee,orotherperson,may,atanytime withinone(1)yearaftersuchunlawfuldeprivationorwithholdingofpossession,bringanactionintheproperinferior courtagainstthepersonorpersonsunlawfullywithholdingordeprivingofpossession,oranypersonorpersons claimingunderthem,fortherestitutionofsuchpossession,togetherwithdamagesandcosts.... Basedonthepreviousdiscussion,therewasnosaleofthedisputedproperty.Hence,itstillbelongstopetitioner'sfamilycorporation,N. Domingo Realty& Development Corporation.Privaterespondent, beingameremortgagee,hasnorighttoejectpetitioner.Private respondent, as a creditor and mortgagee, " . . . cannot appropriate the things given by way of pledge ormortgage,ordisposeofthem.Anystipulationtothecontraryisnullandvoid."28 OtherMatters Privaterespondentinhismemorandumalsocontendsthat(1)petitionerisnottherealpartyininterestand(2)thepetitionshouldbe dismissedfor"raising/statingfactsnotsofoundbytheCourtofAppeals."Thesedeservescantconsideration.Petitionerwasimpleadedas partydefendantintheejectmentsuitbyprivaterespondentitself.Thus,privaterespondentcannotquestionhisstandingasaparty.As EJECTMENTANDLEASE Mariel Angela Piedad Soriano

suchparty,petitionershouldbeallowedtoraisedefenseswhichnegateprivaterespondent'srighttothepropertyinquestion.Thesecond point isreallyacademic.This ponencia relieson thefactualnarrationoftheCourtofAppealsandnotonthe"facts" suppliedby petitioner. WHEREFORE,thepetitionisherebyGRANTED.ThechallengedDecisionoftheCourtofAppealsisREVERSEDandSETASIDE. ThedecisionoftheRegionalTrialCourtofQuezonCityorderingthedismissalofthecomplaintforejectmentisREINSTATEDand AFFIRMED.Nopronouncementastocosts. SOORDERED.

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RepublicofthePhilippines SUPREMECOURT Manila SECONDDIVISION G.R.No.121719September16,1999 SPOUSESVICENTEandMA.ROSALIAMANINANG,SPOUSESCECILIOandMA.SOCORRORUBIO,MA.THELMAP. MALLARI, ORLANDO F. PANDAY, JR., MA. VIVIAN P. GINGA, and H.J. RAMON F. PANDAY, petitioners, vs. COURTOFAPPEALS,HON.GREGORIOE.MANIO,JR.,andOSCARJ.MONTON,SR.,respondents. QUISUMBING,J.: BeforeusisanappealfromthedecisionoftheCourtofAppeals 1 inC.A.G.R.SPNo.36948,whichaffirmedthedecisionofthe RegionalTrialCourt2upholdingtherulingoftheMunicipalTrialCourt3declaringprivaterespondentOscarJ.Monton,Sr.asthelawful possessorofthelandcoveredbyTCTNo.17957andsituatedatBgy.BagongBayanGrande,NagaCity.1wphi1.nt Thefactsofthecaseareasfollows: PrivaterespondentOscarJ.Monton,Sr.filedacomplaintforunlawfuldetaineragainstpetitionersonAugust31,1992.4Heallegedthat heistheabsoluteandregisteredownerofaparceloflandsituatedatBgy.BagongBayanGrande,NagaCityandcoveredbyTCTNo. 17957.HeclaimedtohaveboughtthelandfromRosarioFelipePanday,motherofpetitionersRosalia,Socorro,Ma.Thelma,Orlando,Ma. Vivian,andRamon. Accordingtoprivaterespondent,hewenttothedisputedpropertysometimeinAugust1992toconstructaperimeterfencearoundit. However,hewaspreventedfromdoingsobypetitioners.Privaterespondentdemandedthatpetitionersvacatetheproperty,tonoavail. Hence,hiscomplaintforunlawfuldetainerbeforetheMunicipalTrialCourt. Intheiranswer,petitionersassailedthevalidityofthedeedofsaleexecutedbyRosarioinfavorofprivaterespondent,allegingthatatthe timeofthesale,Rosariowassufferingfromschizophreniaandwasincapacitatedtoenterintoacontract.Theyclaimedownershipofthe propertythroughsuccession. Petitioners,moreover,questionedthejurisdictionoftheMTCoverthecase,sinceanothercase, 5 forannulmentofsalewithdamages involvingthesameparties,wasfiledbypetitionersbeforetheRegionalTrialCourt. TheMTCruledinfavorofprivaterespondent,declaringhimtobethelawfulpossessorofthedisputedlandsandorderingpetitionersto vacatethepremisesandtopaybackrentals. ThedispositiveportionoftheMTCdecisionread: WHEREFORE,bypreponderanceofevidence,plaintiffOSCARJ.MONTON,SR.isherebydeclaredthelawful possessorofthepremisesinquestionanddefendantsareherebyorderedtovacatethesameimmediatelyandtodeliver possessionthereoftotheplaintiff,topaythereasonablerentalthereofintheamountofP350.00permonthfrom August13,1992untilthepremisesarefullyvacatedandtopaythecosts.Thecompulsorycounterclaimnothaving beensubstantiatedbyevidence,thesameisdismissed.6 PetitionersappealedtotheRTC,which,however,affirmedintotothedecisionoftheMTC.OnappealtotheCourtofAppeals,thelatter courtlikewiseaffirmedthedecisionoftheRTCandtheMTC. Hence,theinstantpetitionforreviewoncertiorari. Petitionersraisethefollowingissuesforourconsideration: I MAYTHEREBEUNLAWFULDETAINERWHENRESPONDENTHASNEVERBEENINPOSSESSIONOF THELANDINQUESTIONANDRESPONDENTHASNEVERBEENRECOGNIZEDBYPETITIONERSAS EJECTMENTANDLEASE Mariel Angela Piedad Soriano

TRUEANDLAWFULOWNEROFTHELAND. II MAYTHECITYCOURTTAKEJURISDICTIONOVERANUNLAWFULDETAINERCASEANDRENDER JUDGMENTTHEREONWHENTHEOWNERSHIPISSUEANDTHERIGHTOFPOSSESSIONOVERTHE LANDSUBJECTOFTHEDETAINERISBEINGLITIGATEDINACASEEARLIERFILEDBEFORETHE REGIONALTRIALCOURT.7 Anentthefirstissue,thefollowingrulewhichlaysdowntherequirementsforfilingacomplaintforunlawfuldetainerispertinent: Sec.1.Whomayinstituteproceedings,andwhen.Subjecttotheprovisionsofthenextsucceedingsection,aperson deprivedofthepossessionofanylandorbuildingbyforce,intimidation,threat,strategy,orstealth,oralessor,vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expirationorterminationoftherighttoholdpossession,byvirtueofanycontract,expressorimplied,orthelegal representativesorassignsofanysuchlessor,vendor,vendee,orotherperson,may,atanytimewithinone(1)year aftersuchunlawfuldeprivationorwithholdingofpossession,bringanactionintheproperMunicipalTrialCourt againstthepersonorpersonsunlawfullywithholdingordeprivingofpossession,oranypersonorpersonsclaiming underthem,fortherestitutionofsuchpossession,togetherwithdamagesandcosts.8 AscorrectlypointedoutbyrespondentCourtofAppeals,nowheredoesitappearintheabovecitedrulethat,inanactionforunlawful detainer,thepersonfilingthecomplaintinthiscase,privaterespondentasvendeebeinpriorphysicalpossessionoftheproperty. Asweheldinonecase: Priorphysicalpossessionintheplaintiffisnotanindispensablerequirementinanunlawfuldetainercasebroughtbya vendee or other person against whom the possession of any land is unlawfully withheld after the expiration or terminationofarighttoholdpossession.....9 Neitherisitrequiredthathebefirstrecognizedasthetrueandlawfulownerofthepropertybythepersonagainstwhomheassertshis righttopossession.Anactionforunlawfuldetainermaybefiledbyonewhoisnotanownerofthepropertyindispute. PetitionersassertthatRule70,Section1,oftheRulesofCourtisnotapplicablesinceitrefersonly"toasalewheretherightofthevendor isnotquestioned."Wefailtoseethatportionoftherulewherethisdistinctionmaybegleaned. Asregardsthesecondissue,wehaverepeatedlyheldthattheonlyissueforresolutioninanactionforunlawfuldetainerispossessionof the disputed 10 property. Thus,contrarytopetitioners'belief,itwasbutproperforthecourtsbelownottoputintoconsiderationthevalidityofprivate respondent'stitle.Itsimplyisnotanissueinthiscase. Thequestionofownershipisimmaterialinanactionforunlawfuldetainer.Itis,thus,ofnomomentif,atthesametimethatanactionfor unlawfuldetainerisbeinglitigated,thereisanotheractionrespectingthesamepropertyandthesamepartiesinvolvingtheissueof ownership.Therightsassertedandthereliefsprayedforaredifferentinthetwocases. Anactionforannulmentofsaleliketheonefiledbypetitionersagainstprivaterespondentisnotprejudicialtoanactionforunlawful detainer.11 Thequestionis,maythependencyofsuchanactionforconsignationorspecificperformance,orannulmentofasale, asinthiscase,besuccessfullypleadedinabatementofanactionforunlawfuldetainer?ThisCourthasinvariably givenanegativeanswer.12 ACCORDINGLY,theinstantpetitionisDISMISSEDandthedecisionoftheCourtofAppealsinC.A.G.R.SPNo.36948ishereby AFFIRMED. Costsagainstpetitioners.1wphi1.nt SOORDERED.

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RepublicofthePhilippines SUPREMECOURT Manila THIRDDIVISION G.R.No.166714February9,2007 AMELIAS.ROBERTS,Petitioner, vs. MARTINB.PAPIO,Respondent. DECISION CALLEJO,SR.,J.: AssailedinthispetitionforreviewoncertiorariistheDecision1oftheCourtofAppeals(CA),inCAG.R.CVNo.69034whichreversed andsetasidetheDecision2oftheRegionalTrialCourt(RTC),Branch150,MakatiCity,inCivilCaseNo.01431.TheRTCrulinghad affirmedwithmodificationtheDecision3oftheMetropolitanTrialCourt(MeTC),Branch64,MakatiCityinCivilCaseNo.66847.The petitionlikewiseassailstheResolutionoftheCAdenyingthemotionforreconsiderationofitsdecision. TheAntecedents ThespousesMartinandLucinaPapioweretheownersofa274squaremeterresidentiallotlocatedinMakati(nowMakatiCity)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,theyexecutedarealestatemortgageontheproperty.UponPapiosfailuretopaytheloan,thecorporationfiledapetitionfor theextrajudicialforeclosureofthemortgage. Sincethecoupleneededmoneytoredeemthepropertyandtopreventtheforeclosureoftherealestatemortgage,theyexecutedaDeedof AbsoluteSaleoverthepropertyonApril13,1982infavorofMartinPapioscousin,AmeliaRoberts.OftheP85,000.00purchaseprice, P59,000.00waspaidtotheAmparoInvestmentsCorporation,whiletheP26,000.00differencewasretainedbythespouses. 5Assoonas thespouseshadsettledtheirobligation,thecorporationreturnedtheownersduplicateofTCTNo.S44980,whichwasthendeliveredto AmeliaRoberts. Thereafter,theparties(AmeliaRobertsaslessorandMartinPapioaslessee)executedatwoyearcontractofleasedatedApril15,1982, effectiveMay1,1982.Thecontractwassubjecttorenewalorextensionforalikeperiodattheoptionofthelessor,thelesseewaiving therebythebenefitsofanimpliednewlease.ThelesseewasobligedtopaymonthlyrentalsofP800.00tobedepositedinthelessors accountattheBankofAmerica,MakatiCitybranch.6 OnJuly6,1982,TCTNo.S44980wascancelled,andTCTNo.114478wasissuedinthenameofAmeliaRobertsasowner.7 MartinPapiopaidtherentalsfromMay1,1982toMay1,1984,andthereafter,foranotheryear. 8Hethenfailedtopayrentals,butheand hisfamilyneverthelessremainedinpossessionofthepropertyforaperiodofalmostthirteen(13)years. InaletterdatedJune3,1998,AmeliaRoberts,throughcounsel,remindedPapiothathefailedtopaythemonthlyrentalofP2,500.00from January1,1986toDecember31,1997,andP10,000.00fromJanuary1,1998toMay31,1998;thus,histotalliabilitywasP410,000.00. ShedemandedthatPapiovacatethepropertywithin15daysfromreceiptoftheletterincasehefailedtosettletheamount. 9Becausehe refusedtopay,PapioreceivedanotherletterfromRobertsonApril22,1999,demanding,forthelasttime,thatheandhisfamilyvacate theproperty.10Again,Papiorefusedtoleavethepremises. OnJune28,1999,AmeliaRoberts,throughherattorneyinfact,MatildeAguilar,filedaComplaint 11forunlawfuldetaineranddamages againstMartinPapiobeforetheMeTC,Branch64,MakatiCity.Sheallegedthefollowinginhercomplaint: Sometimein1982shepurchasedfromdefendanta274sqmresidentialhouseandlotsituatedatNo.1046TeresaSt.,Brgy.Valenzuela, MakatiCity.12 UponPapiospleastocontinuestayingintheproperty,theyexecutedatwoyearleasecontract 13 whichcommencedon May1,1982.ThemonthlyrentalwasP800.00.Thereafter,TCTNo.11447814wasissuedinherfavorandshepaidalltherealtytaxesdue ontheproperty.Whenthetermoftheleaseexpired,shestillallowedPapioandhisfamilytocontinueleasingtheproperty.However,he tookadvantageofherabsenceandstoppedpaymentbeginningJanuary1986,andrefusedtopaydespiterepeateddemands.InJune1998, shesentademandletter15throughcounselrequiringPapiotopayrentalsfromJanuary1986uptoMay1998andtovacatetheleased property.Theaccumulatedarrearsinrentalareasfollows:(a)P360,000.00fromJanuary1,1986toDecember31,1997atP2,500.00per EJECTMENTANDLEASE Mariel Angela Piedad Soriano

month;and(b)P50,000.00,fromJanuary1,1998toMay31,1998atP10,000.00permonth.16ShecametothePhilippinesbutallefforts atanamicablesettlementprovedfutile.Thus,inApril1999,shesentthefinaldemandlettertodefendantdirectinghimandhisfamilyto payandimmediatelyvacatetheleasedpremises.17 RobertsappendedtohercomplaintcopiesoftheApril13,1982DeedofAbsoluteSale,theApril15,1982ContractofLease,andTCT No.114478. InhisAnswerwithcounterclaim,Papioallegedthefollowing: HeexecutedtheApril13,1982deedofabsolutesaleandthecontractoflease.Roberts,hiscousinwhoisaresidentofCalifornia,United StatesofAmerica(USA),arrivedinthePhilippinesandofferedtoredeemtheproperty.Believingthatshehadmadetheofferforthe purposeofretaininghisownershipovertheproperty,heaccepted.ShethenremittedP59,000.00tothemortgagorforhisaccount,after whichthemortgageecancelledtherealestatemortgage.However,hewasalarmedwhentheplaintiffhadadeedofabsolutesaleoverthe propertyprepared(forP83,000.00asconsideration)andaskedhimtosignthesame.Shealsodemandedthatthedefendantturnoverthe ownersduplicateofTCTNo.S44980.Thedefendantwasinaquandary.Hethenbelievedthatifhesignedthedeedofabsolutesale, Robertswouldacquireownershipovertheproperty.Heaskedhertoallowhimtoredeemorreacquirethepropertyatanytimefora reasonableamount.18WhenRobertsagreed,Papiosignedthedeedofabsolutesale. Pursuanttotherighttoredeem/repurchasegivenhimbyRoberts,Papiopurchasedthepropertyfor P250,000.00.InJuly1985,since RobertswasbythenalreadyintheUSA,heremittedtoherauthorizedrepresentative,PerlitaVentura,theamountof P150,000.00as partialpaymentfortheproperty.19OnJune16,1986,sheagainremittedP100,000.00,throughVentura.Bothpaymentswereevidencedby receiptssignedbyVentura.20Robertsthendeclaredthatshewouldexecuteadeedofabsolutesaleandsurrenderthetitletotheproperty. However,VenturahadapparentlymisappropriatedP39,000.00outoftheP250,000.00thatshehadreceived;Robertsthendemandedthat shepaytheamountmisappropriatedbeforeexecutingthedeedofabsolutesale.Thus,thesolereasonwhyRobertsrefusedtoabidebyher promisewasthefailureofherauthorizedrepresentativetoremitthefullamountof P250,000.00.DespitePapiosdemands,Roberts refusedtoexecuteadeedofabsolutesale.Accordingly,defendantpositedthatplaintiffhadnocauseofactiontodemandpaymentof rentalandejecthimfromtheproperty. PapioappendedtohisAnswerthefollowing:(1)theletterdatedJuly18,1986ofPerlitaVenturatotheplaintiffwhereintheformer admittedhavingusedthemoneyoftheplaintifftodefraytheplanefaresofPerlitasparentstotheUSA,andpleadedthatshebeallowed torepaytheamountwithinoneyear;(b)theletterofEugeneRoberts(plaintiffshusband)toPerlitaVenturadatedJuly25,1986wherehe accusedVenturaofstealingthemoneyofplaintiffAmelia(thuspreventingthelatterfrompayingherloanonherhouseandeffectthe cancellationofthemortgage),anddemandedthatshedepositthebalance;21 and(c)plaintiffslettertodefendantPapiodatedJuly25, 1986requestingthelattertoconvinceVenturatoremitthebalanceof P39,000.00sothattheplaintiffcouldtransferthetitleofthe propertytothedefendant.22 PapioassertedthatthelettersofRobertsandherhusbandareinthemselvesadmissionsordeclarationsagainstinterest,hence,admissible toprovethathehadreacquiredthepropertyalthoughthetitlewasstillinherpossession. InherAffidavitandPositionPaper,23Robertsaverredthatshehadpaidtherealestatetaxesonthepropertyaftershehadpurchasedit; Papiosinitialrighttooccupythepropertywasterminatedwhentheoriginalleaseperiodexpired;andhiscontinuedpossessionwasonly bymeretolerance.ShefurtherallegedthattheDeedofSalestatesonitsfacethattheconveyanceofthepropertywasabsoluteand unconditional.ShealsoclaimedthatanyrighttorepurchasethepropertymustappearinapublicdocumentpursuanttoArticle1358, Paragraph1,oftheCivilCodeofthePhililppines. 24Sincenosuchdocumentexists,defendantssupposedrealinterestovertheproperty couldnotbeenforcedwithoutviolatingtheStatuteofFrauds. 25ShestressedthatherTorrenstitletothepropertywasan"absoluteand indefeasibleevidenceofherownershipofthepropertywhichisbindingandconclusiveuponthewholeworld." Robertsadmittedthatshedemanded P39,000.00fromthedefendantinherletterdatedJuly25,1986.However,sheaverredthatthe amountrepresentedhisbackrentalsontheproperty. 26ShedeclaredthatsheneitherauthorizedVenturatosellthepropertynortoreceive thepurchasepricetherefor.Shemerelyauthorizedhertoreceivetherentalsfromdefendantandtodeposittheminheraccount.Shedid notknowthatVenturahadreceivedP250,000.00fromPapioinJuly1985andonJune16,1986,andhadsignedreceiptstherefor.Itwas onlyonFebruary11,1998thatshebecameawareofthereceiptswhenshereceiveddefendantPapioslettertowhichwereappendedthe saidreceipts.Sheandherhusbandofferedtosellthepropertytothedefendantin1984forUS$15,000.00ona"takeitorleaveit"basis whentheyarrivedinthePhilippinesinMay1984. 27However,defendantrefusedtoaccepttheoffer.Thespousesthenofferedtosellthe propertyanewonDecember20,1997,forP670,000.00inclusiveofbackrentals.28However,defendantofferedtosettlehisaccountwith thespouses.29Again,theoffercameonJanuary11,1998,butitwasrejected.Thedefendantinsistedthathehadalreadypurchasedthe propertyinJuly1985forP250,000.00. 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RobertsinsistedthatPapiosclaimoftherighttorepurchasetheproperty,aswellashisclaimofpaymenttherefor,isbeliedbyhisown letterinwhichheofferedtosettleplaintiffsclaimforbackrentals.Evenassumingthatthepurchasepriceofthepropertyhadbeenpaid throughVentura,PapiodidnotadduceanyprooftoshowthatVenturahadbeenauthorizedtosellthepropertyortoacceptanypayment thereon.AnypaymenttoVenturacouldhavenobindingeffectonhersinceshewasnotprivytothetransaction;ifatall,suchagreement wouldbebindingonlyonPapioandVentura. Shefurtherallegedthatdefendantsowninactionbelieshisclaimofownershipovertheproperty:first,hefailedtocauseanynoticeor annotationtobemadeontheRegisterofDeedscopyofTCTNo.114478inordertoprotecthissupposedadverseclaim;second,hedid notinstituteanyactionagainstRobertstocompeltheexecutionofthenecessarydeedoftransferoftitleinhisfavor;andthird,thedefense ofownershipoverthepropertywasraisedonlyafterRobertsdemandedhimtovacatetheproperty. Basedsolelyonthepartiespleadings,theMeTCrendereditsJanuary18,2001Decision 30infavorofRoberts.Thefalloofthedecision reads: WHEREFORE,premisesconsidered,findingthiscasefortheplaintiff,thedefendantisherebyorderedto: 1.Vacatetheleasedpremisesknownas1046TeresaSt.,Valenzuela,MakatiCity; 2.PayplaintiffthereasonablerentalsaccrualfortheperiodJanuary1,1996toDecember13,1997attherateequivalentto Php2,500.00permonthandthereafter,Php10,000.00fromJanuary1998untilheactuallyvacatesthepremises; 3.PaytheplaintiffattorneysfeesasPhp20,000.00;and 4.Paythecosts SOORDERED.31 TheMeTCheldthatRobertsmerelytoleratedthestayofPapiointhepropertyaftertheexpirationofthecontractofleaseonMay1,1984; hence,shehadacauseofactionagainsthimsincetheonlyelementsinanunlawfuldetaineractionarethefactofleaseandtheexpiration ofitsterm.Thedefendantastenantcannotcontrovertthetitleoftheplaintifforassertanyrightadversetheretoorsetupanyinconsistent righttochangetheexistingrelationbetweenthem.Theplaintiffneednotproveherownershipoverthepropertyinasmuchasevidenceof ownershipcanbeadmittedonlyforthepurposeofdeterminingthecharacterandextentofpossession,andtheamountofdamagesarising fromthedetention. ThecourtfurtherruledthatPapiomadenodenialsastotheexistenceandauthenticityofRobertstitletotheproperty.Itdeclaredthat "thecertificateoftitleisindefeasibleinfavorofthepersonwhosenameappearsthereinandincontrovertibleupontheexpirationofthe oneyearperiodfromthedateofissue,"andthataTorrenstitle,"whichenjoysastrongpresumptionofregularityandvalidity,isgenerally aconclusiveevidenceofownershipofthelandreferredtotherein." AstoPapiosclaimthatthetransferofthepropertywasonewithrightofrepurchase,theMeTCheldittobebereftofmeritsincethe DeedofSaleistermedas"absoluteandunconditional."Thecourtruledthattherighttorepurchaseisnotarightgrantedtothesellerby thebuyerinasubsequentinstrumentbutrather,arightreservedinthesamecontractofsale.Oncethedeedofabsolutesaleisexecuted, thesellercannolongerreservetherighttorepurchase;anyrightthereaftergrantedinaseparatedocumentcannotbearightofrepurchase butsomeotherright. AstothereceiptsofpaymentsignedbyVentura,thecourtgavecredencetoRobertssdeclarationinherAffidavitthatsheauthorized VenturaonlytocollectrentalsfromPapio,andnottoreceivetherepurchaseprice.PapiosletterofJanuary31,1998,whichcalledher attentiontothefactthatshehadbeensendingpeoplewithoutwrittenauthoritytocollectmoneysince1985,bolsteredthecourtsfinding thatthepayment,ifatallintendedforthesupposedrepurchase,neverredoundedtothebenefitofthespousesRoberts. PapioappealedthedecisiontotheRTC,allegingthefollowing: I. THELOWERCOURTGRAVELYERREDINNOTDISMISSINGTHECASEFOREJECTMENTOUTRIGHTON THEGROUNDOFLACKOFCAUSEOFACTION. II. THELOWERCOURTGRAVELYERREDINNOTCONSIDERINGTHEDOCUMENTARYEVIDENCEADDUCED BY DEFENDANTAPPELLANT WHICH ESTABLISHED THAT A REPURCHASE TRANSACTION EXISTED EJECTMENTANDLEASE Mariel Angela Piedad Soriano

BETWEEN THE PARTIES ONLY THAT PLAINTIFFAPPELLEE WITHHELD THE EXECUTION OF THE ABSOLUTEDEEDOFSALEANDTHETRANSFEROFTITLEOFTHESAMEINDEFENDANTAPPELLANTS NAME. III. THE LOWER COURT GRAVELY ERRED IN NOT CONSIDERING THAT THE LETTERS OF PLAINTIFF [APPELLEE]ANDOFHERHUSBANDADDRESSEDTODEFENDANTAPPELLANTANDHISWIFEAREIN THEMSELVESADMISSIONAND/ORDECLARATIONOFTHEFACTTHATDEFENDANTAPPELLANTHAD DULYPAIDPLAINTIFFAPPELLEEOFTHEPURCHASEAMOUNTCOVERINGTHESUBJECTPROPERTY. IV. THE LOWER COURT GRAVELY ERRED IN NOT DISMISSING THE CASE FOR EJECTMENT OUTRIGHT CONSIDERINGTHATPLAINTIFFAPPELLEEWHOIS[AN]AMERICANCITIZENANDRESIDENTTHEREIN 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 ATTORNEYAUTHORIZINGHERTOAPPEARINCOURTINBEHALFOFHERPRINCIPAL.32 PapiomaintainedthatRobertshadnocauseofactionforevictionbecauseshehadalreadycededherrighttheretowhensheallowedhim toredeemandreacquirethepropertyuponpaymentofP250,000.00toVentura,herdulyauthorizedrepresentative.Healsocontendedthat RobertssclaimthattheauthorityofVenturaislimitedonlytothecollectionoftherentalsandnotofthepurchasepricewasamere afterthought,sinceherappendedAffidavitwasexecutedsometimeinOctober1999whentheproceedingsintheMeTChadalready started. OnMarch26,2001,RobertsfiledaMotionforIssuanceofWritofExecution.33ThecourtgrantedthemotioninanOrder34datedJune19, 2001.Subsequently,aWritofExecution35pendingappealwasissuedonSeptember28,2001.OnOctober29,2001,SheriffMelvinM. AlidonenforcedthewritandplacedRobertsinpossessionoftheproperty. Meanwhile,PapiofiledacomplaintwiththeRTCofMakatiCity,forspecificperformancewithdamagesagainstRoberts.Papio,as plaintiff,claimedthatheenteredintoacontractofsalewithpactoderetrowithRoberts,andprayedthatthelatterbeorderedtoexecutea DeedofSaleover`thepropertyinhisfavorandtransferthetitleoverthepropertytoandinhisname.ThecasewasdocketedasCivilCase No.01851. OnOctober24,2001,theRTCrenderedjudgmentaffirmingtheappealeddecisionoftheMeTC.Thefalloofthedecisionreads:36 Beinginaccordancewithlawandthecircumstancesattendanttotheinstantcase,thecourtfindsmeritinplaintiffappelleesclaim. Wherefore,thechallengeddecisiondatedJanuary18,2001isherebyaffirmedintoto. SOORDERED.37 Bothpartiesfiledtheirrespectivemotionsforreconsideration. 38InanOrder39datedFebruary26,2002,thecourtdeniedthemotionof PapiobutmodifieditsdecisiondeclaringthatthecomputationoftheaccruedrentalsshouldcommencefromJanuary1986,notJanuary 1996.Thedecretalportionofthedecisionreads: Wherefore, the challenged decision dated January 18, 2001 is hereby affirmed with modification that defendant pay plaintiff the reasonablerentalsaccruedfortheperiodJanuary1,1986toDecember[31,1997]permonthandthereafterandP10,000.00[permonth] fromJanuary1998toOctober28,2001whendefendantappellantactuallyvacatedthesubjectleasedpremises. SOORDERED.40 OnFebruary28,2002,Papiofiledapetitionforreview 41intheCA,allegingthattheRTCerredinnotfindingthathehadreacquiredthe propertyfromRobertsfor P250,000.00,butthelatterrefusedtoexecuteadeedofabsolutesaleandtransferthetitleinhisfavor.He insistedthattheMeTCandtheRTCerredingivingcredencetopetitionersclaimthatshedidnotauthorizeVenturatoreceivehis paymentsforthepurchasepriceoftheproperty,citingRobertsletterdatedJuly25,1986andtheletterofEugeneRobertstoVenturaof evendate.HealsoaverredthattheMeTCandtheRTCerredinnotconsideringhisdocumentaryevidenceindecidingthecase.

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OnAugust31,2004,theCArenderedjudgmentgrantingthepetition.TheappellatecourtsetasidethedecisionoftheRTCandordered theRTCtodismissthecomplaint.ThedecretalportionoftheDecision42reads: WHEREFORE,thejudgmentappealedfromisherebyREVERSEDandSETASIDEandanewoneentered:(1)renderinganinitial determinationthatthe"DeedofAbsoluteSale"datedApril13,1982isinfactanequitablemortgageunderArticle1603oftheNewCivil Code;and(2)resolvingthereforethatpetitionerMartinB.Papioisentitledtopossessionofthepropertysubjectofthisaction;(3)But suchdeterminationofownershipandequitablemortgagearenotclothedwithfinalityandwillnotconstituteabindingandconclusive adjudicationonthemeritswithrespecttotheissueofownershipandsuchjudgmentshallnotbaranactionbetweenthesameparties respectingtitletotheland,norshallitbeheldconclusiveofthefactsthereinfoundinthecasebetweenthesamepartiesuponadifferent causeofactionnotinvolvingpossession.Allothercounterclaimsfordamagesareherebydismissed.Costagainsttherespondent. SOORDERED.43 Accordingtotheappellatecourt,althoughtheMeTCandRTCwerecorrectinholdingthattheMeTChadjurisdictionoverthecomplaint forunlawfuldetainer,theyerredinignoringPapiosdefenseofequitablemortgage,andinnotfindingthatthetransactioncoveredbythe deedofabsolutesalebyandbetweenthepartieswasoneofequitablemortgageunderArticle1602oftheNewCivilCode.Theappellate courtruledthatPapioretainedtheownershipofthepropertyanditspeacefulpossession;hence,theMeTCshouldhavedismissedthe complaintwithoutprejudicetotheoutcomeofCivilCaseNo.01851relativetohisclaimofownershipovertheproperty. Robertsfiledamotionforreconsiderationofthedecisiononthefollowinggrounds: I.PetitionerdidnotallegeinhisAnswerthedefenseofequitablemortgage;hence,thelowercourts[should]nothavediscussed thesame; II.EvenassumingthatPetitionerallegedthedefenseofequitablemortgage,theMeTCcouldnothaveruleduponthesaid defense, III.TheM[e]TCandtheRTCwerenotremissintheexerciseoftheirjurisdiction.44 TheCAdeniedthemotion. Inthispetitionforreview,AmeliaSalvadorRoberts,aspetitioner,aversthat: I.THEHONORABLECOURTOFAPPEALSGRIEVEOUSLY(SIC)ERREDINDECLARINGTHATTHEM[e]TCAN(D) THE RTC WERE REMISS IN THE EXERCISE OF THAT JURISDICTION ACQUIRED BECAUSE IT DID NOT CONSIDERALLPETITIONERSDEFENSEOFEQUITABLEMORTGAGE. II.THEHONORABLECOURTOFAPPEALSGRIEVEOUSLY(SIC)ERREDINREQUIRINGTHEM[e]TCANDRTCTO RULEONADEFENSEWHICHWASNEVERAVAILEDOFBYRESPONDENT.45 PetitionerarguesthatrespondentisbarredfromraisingtheissueofequitablemortgagebecausehisdefenseintheMeTCandRTCwas thathehadrepurchasedthepropertyfromthepetitioner;bysuchrepresentation,hehadimpliedlyadmittedtheexistenceandvalidityof thedeedofabsolutesalewherebyownershipofthepropertywastransferredtopetitionerbutrevertedtohimupontheexerciseofsaid right.Therespondentevenfiledacomplaintforspecificperformancewithdamages,whichisnowpendingintheRTCofMakatiCity, docketedasCivilCaseNo.01851entitled "MartinB.Papiovs.AmeliaSalvadorRoberts." Inthatcase,respondentclaimedthathis transactionwiththepetitionerwasasalewithpactoderetro.PetitionerpositsthatArticle1602oftheCivilCodeappliesonlywhenthe defendantspecificallyallegesthisdefense.Consequently,theappellatecourtwasproscribedfromfindingthatpetitionerandrespondent hadenteredintoanequitablemortgageunderthedeedofabsolutesale. Petitionerfurtheraversthatrespondentwasablyrepresentedbycounselandwasawareofthedifferencebetweenapactoderetrosaleand anequitablemortgage;thus,hecouldnothavebeenmistakenindeclaringthatherepurchasedthepropertyfromher. Astowhetherasaleisinfactanequitablemortgage,petitionerclaimsthattheissueshouldbeproperlyaddressedandresolvedbythe RTCinanactiontoenforceownership,notinanejectmentcasebeforetheMeTCwherethemainissueinvolvedispossessiondefacto. Accordingtoher,theobviousimportoftheCADecisionisthat,inresolvinganejectmentcase,thelowercourtmustpassupontheissue ofownership(inthiscase,byapplyingthepresumptionsunderArt.1602)which,ineffect,wouldusethesameyardstickasthoughitis themainaction.Theprocedurewillnotonlypromotemultiplicityofsuitsbutalsoplacethenewownerintheabsurdpositionofhavingto firstseekthedeclarationofownershipbeforefilinganejectmentsuit. Respondentcountersthatthedefenseofequitablemortgageneednotbeparticularlystatedtoapprisepetitionerofthenatureandcharacter oftherepurchaseagreement.Hecontendsthathehadamplydiscussedinhispleadingsbeforethetrialandappellatecourtsallthe surrounding circumstances of the case, such as the relative situation of the parties at the time; their attitude, acts, conduct, and EJECTMENTANDLEASE Mariel Angela Piedad Soriano

declarations;andthenegotiationsbetweenthemthatledtotherepurchaseagreement.Thus,hearguesthattheCAcorrectlyruledthatthe contractwasoneofequitablemortgage.Heinsiststhatpetitionerallowedhimtoredeemandreacquiretheproperty,andacceptedhisfull paymentofthepropertythroughVentura,theauthorizedrepresentative,asshownbythesignedreceipts. Thethresholdissuesarethefollowing:(1)whethertheMeTChadjurisdictioninanactionforunlawfuldetainertoresolvetheissueof whobetweenpetitionerandrespondentistheownerofthepropertyandentitledtothedefactopossessionthereof;(2)whetherthe transactionenteredintobetweenthepartiesundertheDeedofAbsoluteSaleandtheContractofLeaseisanequitablemortgageoverthe property;and(3)whetherthepetitionerisentitledtothematerialordefactopossessionoftheproperty. TheRulingoftheCourt Onthefirstissue,theCAruling(whichupheldthejurisdictionoftheMeTCtoresolvetheissueofwhobetweenpetitionerorrespondent isthelawfulowneroftheproperty,andisthusentitledtothematerialordefactopossessionthereof)iscorrect.Section18,Rule70ofthe RulesofCourtprovidesthatwhenthedefendantraisesthedefenseofownershipinhispleadingsandthequestionofpossessioncannotbe resolvedwithoutdecidingtheissueofownership,theissueofownershipshallberesolvedonlytodeterminetheissueofpossession.The judgmentrenderedinanactionforunlawfuldetainershallbeconclusivewithrespecttothepossessiononlyandshallinnowisebindthe titleoraffecttheownershipofthelandorbuilding.Suchjudgmentwouldnotbaranactionbetweenthesamepartiesrespectingtitletothe landorbuilding.46 Thesummarynatureoftheactionisnotchangedbytheclaimofownershipofthepropertyofthedefendant. 47TheMeTCisnotdivested ofitsjurisdictionovertheunlawfuldetaineractionsimplybecausethedefendantassertsownershipovertheproperty. Thesoleissueforresolutioninanactionforunlawfuldetainerismaterialordefactopossessionoftheproperty.Evenifthedefendant claimsjuridicalpossessionorownershipoverthepropertybasedonaclaimthathistransactionwiththeplaintiffrelativetothepropertyis merely an equitable mortgage, or that he had repurchasedtheproperty from the plaintiff, the MeTCmaystill delveinto and take cognizanceofthecaseandmakeaninitialorprovisionaldeterminationofwhobetweentheplaintiffandthedefendantistheownerand, intheprocess,resolvetheissueofwhoisentitledtothepossession.TheMeTC,inunlawfuldetainercase,decidesthequestionof ownershiponlyifitisintertwinedwithandnecessarytoresolvetheissueofpossession.48TheresolutionoftheMeTContheownership ofthepropertyismerelyprovisionalorinterlocutory.Anyquestioninvolvingtheissueofownershipshouldberaisedandresolvedina separateactionbroughtspecificallytosettlethequestionwithfinality,inthiscase,CivilCaseNo.01851whichrespondentfiledbefore theRTC. TherulingoftheCA,thatthecontractbetweenpetitionerandrespondentwasanequitablemortgage,isincorrect.Thefactofthematteris thattherespondentintransigentlyallegedinhisanswer,andeveninhisaffidavitandpositionpaper,thatpetitionerhadgrantedhimthe righttoredeemorrepurchasethepropertyatanytimeandforareasonableamount;andthat,hehad,infact,repurchasedthepropertyin July1985for P250,000.00whichheremittedtopetitionerthroughanauthorizedrepresentativewhosignedreceiptstherefor;hehad reacquiredownershipandjuridicalpossessionofthepropertyafterhisrepurchasethereofin1985;andconsequently,petitionerwas obligedtoexecuteadeedofabsolutesaleoverthepropertyinhisfavor. Notably,respondentallegedthat,asstatedinhislettertopetitioner,hewasgiventherighttoreacquirethepropertyin1982withintwo yearsuponthepaymentofP53,000.00,pluspetitionersairfareforhertriptothePhilippinesfromtheUSAandback;petitionerpromised to sign the deed ofabsolutesale.HeevenfiledacomplaintagainstthepetitionerintheRTC,docketedasCivilCaseNo.01851,forspecificperformance withdamagestocompelpetitionertoexecutethesaiddeedofabsolutesaleoverthepropertypresumablyonthestrengthofArticles1357 and1358oftheNewCivilCode.Certainlythen,hisclaimthatpetitionerhadgivenhimtherighttorepurchasethepropertyisantithetical toanequitablemortgage. An equitable mortgage is one that, although lacking in some formality, form or words, or other requisites demanded by a statute, neverthelessrevealstheintentionofthepartiestochangearealpropertyassecurityforadebtandcontainnothingimpossibleorcontrary tolaw.49 Acontractbetweenthepartiesisanequitablemortgageifthefollowingrequisitesarepresent:(a)thepartiesenteredintoa contractdenominatedasacontractofsale;and(b)theintentionwastosecureanexistingdebtbywayofmortgage. 50Thedecisivefactor istheintentionoftheparties. Inanequitablemortgage,themortgagorretainsownershipoverthepropertybutsubjecttoforeclosureandsaleatpublicauctionupon failureofthemortgagortopayhisobligation.51 Incontrast,inapactoderetrosale,ownershipofthepropertysoldisimmediately transferredtothevendeearetrosubjectonlytotherightofthevendoraretrotorepurchasethepropertyuponcompliancewithlegal requirementsfortherepurchase.Thefailureofthevendoraretrotoexercisetherighttorepurchasewithintheagreedtimevestsuponthe vendeearetro,byoperationoflaw,absolutetitleovertheproperty.52

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Onerepurchasesonlywhatonehaspreviouslysold.Therighttorepurchasepresupposesavalidcontractofsalebetweenthesame parties.53Byinsistingthathehadrepurchasedtheproperty,respondenttherebyadmittedthatthedeedofabsolutesaleexecutedbyhim andpetitioneronApril13,1982was,infactandinlaw,adeedofabsolutesaleandnotanequitablemortgage;hence,hehadacquired ownershipoverthepropertybasedonsaiddeed.Respondentis,thus,estoppedfromassertingthatthecontractunderthedeedofabsolute saleisanequitablemortgageunlessthereisallegationandevidenceofpalpablemistakeonthepartofrespondent;54orafraudonthepart ofpetitioner.Respondentmadenosuchallegationinhispleadingsandaffidavit.Onthecontrary,hemaintainedthatpetitionerhadsold thepropertytohiminJuly1985andacknowledgedreceiptofthepurchasepricethereofexcepttheamountofP39,000.00retainedby Perlita Ventura. Respondent is thus bound by his admission of petitioners ownership of the property and is barred from claiming otherwise.55 RespondentsadmissionthatpetitioneracquiredownershipoverthepropertyundertheApril13,1982deedofabsolutesaleisbuttressed byhisadmissionintheContractofLeasedatedApril15,1982thatpetitionerwastheowneroftheproperty,andthathehadpaidthe rentalsforthedurationofthecontractofleaseandevenuntil1985uponitsextension.Respondentwasobligedtoprovehisdefensethat petitionerhadgivenhimtherighttorepurchase,andthatpetitionerobligedherselftoresellthepropertyfor P250,000.00whenthey executedtheApril13,1982deedofabsolutesale. Wehavecarefullyreviewedthecaseandfindthatrespondentfailedtoadducecompetentandcredibleevidencetoprovehisclaim. AsgleanedfromtheApril13,1982deed,therightofrespondenttorepurchasethepropertyisnotincorporatedtherein.Thecontractis oneofabsolutesaleandnotonewithrighttorepurchase.Thelawstatesthatifthetermsofacontractareclearandleavenodoubtupon theintentionofthecontractingparties,theliteralmeaningofitsstipulationsshallcontrol. 56Whenthelanguageofthecontractisexplicit, leavingnodoubtastotheintentionofthedrafters,thecourtsmaynotreadintoitanyotherintentionthatwouldcontradictitsplain import.57Thecleartermsofthecontractshouldneverbethesubjectmatterofinterpretation.Neitherabstractjusticenortheruleofliberal interpretationjustifiesthecreationofacontractforthepartieswhichtheydidnotmakethemselves,ortheimpositionupononepartytoa contractorobligationtoassumesimplyormerelytoavoidseeminghardships. 58 Theirtruemeaningmustbeenforced,asitistobe presumedthatthecontractingpartiesknowtheirscopeandeffects.59AstheCourtheldinVillarica,etal.v.CourtofAppeals:60 Therightofrepurchaseisnotarightgrantedthevendorbythevendeeinasubsequentinstrument,butisarightreservedbythevendorin thesameinstrumentofsaleasoneofthestipulationsofthecontract.Oncetheinstrumentofabsolutesaleisexecuted,thevendorcanno longerreservetherighttorepurchase,andanyrightthereaftergrantedthevendorbythevendeeinaseparateinstrumentcannotbearight ofrepurchasebutsomeotherrightliketheoptiontobuyintheinstantcase.61 InRamosv.Icasiano,62wealsoheldthatanagreementtorepurchasebecomesapromisetosellwhenmadeafterthesalebecausewhen thesaleismadewithoutsuchagreementthepurchaseracquiresthethingsoldabsolutely;and,ifheafterwardsgrantsthevendortheright torepurchase,itisanewcontractenteredintobythepurchaserasabsoluteowner.Anoptiontobuyorapromisetosellisdifferentand distinctfromtherightofrepurchasethatmustbereservedbymeansofstipulationstothateffectinthecontractofsale.63 Thereisnoevidenceonrecordthat,onorbeforeJuly1985,petitioneragreedtosellherpropertytotherespondentfor P250,000.00. NeitheristhereanydocumentaryevidenceshowingthatVenturawasauthorizedtoofferforsaleorsellthepropertyforandinbehalfof petitionerforP250,000.00,ortoreceivethesaidamountfromrespondentaspurchasepriceoftheproperty.Theruleisthatwhenasaleof apieceoflandoranyinterestthereinisthroughanagent,theauthorityofthelattershallbeinwriting;otherwise,thesaleshallbevoid64 andcannotproduceanylegaleffectastotransferthepropertyfromitslawfulowner.65Beinginexistentandvoidfromtheverybeginning, saidcontractcannotberatified.66AnycontractenteredintobyVenturaforandinbehalfofpetitionerrelativetothesaleofthepropertyis voidandcannotberatifiedbythelatter.Avoidcontractproducesnoeffecteitheragainstorinfavorofanyone.67 Respondentalsofailedtoprovethatthenegotiationsbetweenhimandpetitionerhasculminatedinhisoffertobuythepropertyfor P250,000.00,andthattheylateronagreedtothesaleofthepropertyforthesameamount.Helikewisefailedtoprovethathepurchased andreacquiredthepropertyinJuly1985.TheevidenceonrecordshowsthatpetitionerhadofferedtosellthepropertyforUS$15,000ona "takeitorleaveit"basisinMay1984upontheexpirationoftheContractofLease68anofferthatwasrejectedbyrespondentwhichis whyonDecember30,1997,petitionerandherhusbandofferedagaintosellthepropertytorespondentforP670,000.00inclusiveofback rentals and the purchase price of the property underthe April13, 1982 Deedof absoluteSale.69 The offer was againrejectedby respondent.ThefinalofferappearstohavebeenmadeonJanuary11,199870butagain,likethepreviousnegotiations,nocontractwas perfectedbetweentheparties. Acontractisameetingofmindsbetweentwopersonswherebyonebindshimself,withrespecttotheother,togivesomethingortorender someservice.71UnderArticle1318oftheNewCivilCode,thereisnocontractunlessthefollowingrequisitesconcur: EJECTMENTANDLEASE Mariel Angela Piedad Soriano

(1)Consentofthecontractingparties; (2)Objectcertainwhichisthesubjectmatterofthecontract; (3)Causeoftheobligationwhichisestablished. Contractsareperfectedbymereconsentmanifestedbythemeetingoftheofferandtheacceptanceuponthethingandthecausewhichare toconstitutethecontract.72Onceperfected,theybindthecontractingpartiesandtheobligationsarisingtherefromhavetheformoflaw betweenthepartieswhichmustbecompliedwithingoodfaith.Thepartiesareboundnotonlytothefulfillmentofwhathasbeen expresslystipulatedbutalsototheconsequenceswhich,accordingtotheirnature,maybeinkeepingwithgoodfaith,usageandlaw.73 TherewasnocontractofsaleenteredintobythepartiesbasedontheReceiptsdatedJuly1985andJune16,1986,signedbyPerlita VenturaandtheletterofpetitionertorespondentdatedJuly25,1986. Bythecontractofsale,oneofthecontractingpartiesobligateshimselftotransfertheownershipofanddeliveradeterminatethingand theother,topaythereforapricecertaininmoneyoritsequivalent. 74 Theabsenceofanyoftheessentialelementswillnegatethe existenceofaperfectedcontractofsale.AstheCourtruledinBostonBankofthePhilippinesv.Manalo:75 Adefiniteagreementastothepriceisanessentialelementofabindingagreementtosellpersonalorrealpropertybecauseitseriously affectstherightsandobligationsoftheparties.Priceisanessentialelementintheformationofabindingandenforceablecontractofsale. Thefixingofthepricecanneverbelefttothedecisionofoneofthecontractingparties.Butapricefixedbyoneofthecontracting parties,ifacceptedbytheother,givesrisetoaperfectedsale.76 Acontractofsaleisconsensualinnatureandisperfecteduponmeremeetingoftheminds.Whenthereismerelyanofferbyoneparty withoutacceptanceoftheother,thereisnocontract.77Whenthecontractofsaleisnotperfected,itcannot,asanindependentsourceof obligation,serveasabindingjuridicalrelationbetweentheparties.78 RespondentsrelianceonpetitionerslettertohimdatedJuly25,1986ismisplaced.Theletterreadsinfull: 72586 DearMartin&Ising, EnclosedforyourinformationistheletterwrittenbymyhusbandtoPerlita.Ihopethatyouwillbeabletoconvinceyour cousinthatitstoherbestinteresttodepositthebalanceofyourpaymenttomeofP39,000.00inmybankacct.perour agreementandsendmemybankbookrightawaysothatwecantransferthetitleoftheproperty. Regards, Amie79 WehavecarefullyconsideredtheletterofPerlitaVentura,datedJuly18,1986,andtheletterofEugeneRoberts,datedJuly25,1986, whereVenturaadmittedhavingusedthemoneyofpetitioneramountingtoP39,000.00withoutthelattersknowledgefortheplanefareof Venturasparents.VenturapromisedtorefundtheamountofP39,000.00,inclusiveofinterests,withinoneyear.80EugeneRobertsberated Venturaandcalledherathiefforstealinghisandpetitionersmoneyandthatofrespondentswife,Ising,whoallegedlytoldpetitionerthat she,Ising,loanedthemoneytoherparentsfortheirplanefaretotheUSA.NeitherVenturanorEugeneRobertsdeclaredintheirletters thatVenturahadusedtheP250,000.00whichrespondentgavetoher. Petitionerinherlettertorespondentdidnotadmit,eitherexpresslyorimpliedly,havingreceivedP211,000.00fromVentura.Moreover,in herlettertopetitioner,onlyaweekearlier,oronJuly18,1986,VenturaadmittedhavingspenttheP39,000.00andpleadedthatshebe allowedtorefundtheamountwithinone(1)year,includinginterests. Nariritoangtotalngperamosabankbookmo,P55,000.00patinayongdepositnasarilimoatbaleangnagalawkodiyanayP39,000.00. Huwagkangmagalalaibabalikkorinsaiyosaloobngisangtaonpatiinterest. AtePer811awphi1.net ItisincrediblethatVenturawasabletoremittopetitionerP211,000.00beforeJuly25,1986whenonlyaweekearlier,shewaspleadingto

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petitionerforaperiodofoneyearwithinwhichtorefundtheP39,000.00topetitioner. ItwouldhavebolsteredhiscauseifrespondenthadsubmittedanaffidavitofVenturastatingthatshehadremittedP211,000.00outofthe P250,000.00shereceivedfromrespondentinJuly1985andJune20,1986. INLIGHTOFALLTHEFOREGOING,thepetitionisGRANTED.TheassailedDecisionoftheCourtofAppealsinCAG.R.CVNo. 69034isREVERSEDandSETASIDE.TheDecisionoftheMetropolitanTrialCourt,affirmedwithmodificationbytheRegionalTrial Court,isAFFIRMED. SOORDERED.

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