Republic of the Philippines Supreme Court

Manila
FIRST DIVISION

DAVAO LIGHT & POWER CO., INC., Petitioner, - versus -

G.R. No. 147058

Present:

HON. JUDGE OF THE PANGANIBAN, CJ., Chairperson, REGIONAL TRIAL COURT YNARES-SANTIAGO, DAVAO CITY, BRANCH 8, AUSTRIA-MARTINEZ, ATTY. SERAFIN S. OSABEL, CALLEJO, SR. and NEOCEDA NOVAL-OSABEL, CHICO-NAZARIO, JJ. MARIE JOHANNA OSABELGARCIA, VICTORIA LUZ OSABEL-DACUYCUY, ANNA Promulgated: CHRISTIA OSABEL and SERAFIN OSABEL, JR., March 10, 2006 Respondents. x------------------------------------------------x

DECISION

AUSTRIA-MARTINEZ, J.:

Petitioner, an electric utility with franchise to distribute electricity in Davao City and other areas, assails in the present petition for review under Rule 45 of the Rules of Court the Decision dated October 6, 2000 and the Resolution dated February 6, 2001 rendered by the Court of Appeals (CA) in CA-G.R. SP No. 50234.[1]

Petitioner and private respondents are the contending parties in two separate civil cases before the lower courts. Civil Case No. 3452-F-96 is for Sum of Money, Damages and Attorneys Fees pending before the Municipal Trial Court in Cities (MTCC) of Davao City, Branch 6, where petitioner is the plaintiff while private respondent Atty. Serafin Osabel (Atty. Osabel) and Alfredo Rubin (Rubin) are the defendants. On the other hand, Civil Case No. 25,086-97 is for Damages and Attorneys Fees with Prayer for a Writ of Preliminary Mandatory Injunction filed before the Regional Trial Court (RTC) of Davao City, Branch 8, with private respondents as plaintiffs and petitioner as defendant. In Civil Case No. 3452-F-96, petitioner alleged in its Amended Complaint that: it entered into an electric service contract with Rubin; despite notice, Rubin failed to pay his electric bills from September 1990 to May 1993 until it amounted to P35,154.17, prompting petitioner to cut off electrical service on October 14, 1993; petitioner discovered that during said period, Rubins electricity service was extended beyond his property line to a certain Ronald Donguila, who, in turn, sold his property to Atty. Osabel; petitioner also discovered that Atty. Osabel was using the electrical service of a certain Maria Mercedes Villarosa (Villarosa); petitioner tried to collect from Atty. Osabel but the latter refused and instead, informed petitioner that he is consigning the payment of his current consumption to the court; petitioner tried to collect the amount consigned to the court but was informed by the Clerk of Court that he needed an order to do so; petitioner gave Atty. Osabel an opportunity to settle his obligation under his present consumption but the latter ignored petitioners communications; because of private respondents failure to pay the arrears, petitioner disconnected the service on February 6, 1997, and in view of the termination of the contract, removed the meter from the premises.[2] Thus, petitioner prayed for the payment of the sums sought to be collected, damages and attorneys fees.[3] Meanwhile, in Civil Case No. 25,086-97, Atty. Osabel, together with his coprivate respondents wife and children, presented three causes of action for damages due to petitioners (1) failure to give notices of disconnection in two instances between February 1996 and December 1996; (2) disconnection of private respondents electric services on February 6, 1997; and (3) removal of the electric meter by petitioner in full view of their neighbors and the public on February 21, 1997.[4]

Private respondents alleged in their complaint that: in 1994 and with petitioners knowledge, they leased a residential house owned by Villarosa including the use of Electric Meter No. 86817 under Account No. 091-13848; some time in December 1995, they received from petitioner a letter demanding payment of P18,900.17 for the electrical consumption made under the name of Rubin; Atty. Osabel replied and informed petitioner that his obligation under Account No. 091-13848 has been settled, and the demand for payment for the consumption made in Rubins name is illegal for which he cannot be held liable, and that he is tendering payment in the amount of P189.41 as full payment for his March 1996 account; petitioner wrote back to Atty. Osabel, informing him that the unpaid account in Rubins name was transferred to his name under Account No. 091-13848, and that a conference was scheduled on May 22, 1996 so that the matter may be settled; Atty. Osabel declined to attend the conference, reiterated his objection to the transfer of Rubins account to his name, and requested for a statement of account for May 1996 so that he could deposit the amount with the Office of the Clerk of Court of the MTCC; several communications were exchanged between petitioner and Atty. Osabel until the electrical service to the Osabels was twice disconnected, in February and December 1996, without notice and warning; Atty. Osabel made deposits with the MTCC Office of the Clerk of Court for their account due from March 1996 to December 1996; on January 1997, petitioner wrote Villarosa claiming the amount of P9,633.32 as outstanding balance as of January 1997, without prejudice to its recovery of the amount of P18,900.17 against Atty. Osabel; Atty. Osabel then made another deposit of P1,008.44 with the MTCC Office of the Clerk of Court for their January 1997 consumption, notifying petitioner of the same in a Notice of Consignation dated February 3, 1997; petitioner refused to acknowledge the consignation and decided to terminate its service contract on February 6, 1997, and removed its electric meter on February 21, 1997.[5] In each of the three causes of action, the Osabels prayed for the award of moral, nominal and exemplary damages as well as attorneys fees and litigation expenses in their favor. They also prayed for the deletion of the amount of P9,633.32 from Account No. 091-13848.[6] Petitioner filed an Amended Motion to Dismiss Civil Case No. 25,086-97 on grounds of lack of jurisdiction, lack of cause of action, and that a valid consignation needs a judicial action in the MTC for the complaint to

prosper.[7] With regard to lack of jurisdiction, petitioner argued that the claim for moral damages is only for P80,000.00, and as such, it is below the jurisdictional amount cognizable by the RTC. Petitioner also argued that since private respondents other causes of action pertain to their consignation of P7,912.62 before the MTCC, and the damages prayed for are mere incidents to it, then the RTC has no jurisdiction over the case. On the issue of the lack of cause of action, petitioner contended that private respondents, who alleged that the case is one for damages and not consignation, failed to allege in their complaint that there was a valid consignation made in order for them to validly claim the damages sought. Petitioner also contended that private respondents are not even the realparty-in-interest inasmuch as they are mere lessees of Villarosa and the contract of service was with the latter. Finally, petitioner claimed that the consignation made with the clerk of court is ineffective in the absence of a complaint or case made in court.[8] Private respondents filed their opposition to the amended motion to dismiss, refuting petitioners arguments. Respondents essentially claimed that the case before the trial court is for damages and does not depend on the issue of consignation.[9] On June 19, 1997, the RTC issued its Order denying the motion to dismiss. The RTC ruled thus:
In this regard, this Court notes that the instant claim is for the recovery of damages for the alleged and oppressive act of defendant in cutting of power in plaintiffs abode which this Court finds to be incapable of pecuniary estimation for as stated in Raymundo vs. Court of Appeals, et al., 213 SCRA 457, (I)n determining whether an action is one the subject matter of which is not capable of pecuniary estimation this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether it is in the municipal court [now municipal trial courts] or in the courts of first instance [now regional trial courts] would depend on the amount of the claim. However, where the basic issue is something other than the right to recover a sum of money, or where the money claim is purely incidental to, or a consequence of, the principal relief sought, this Court has considered such action as cases where the subject of litigation may not be estimated in terms of money, and are cognizable exclusively by courts of first instance [now regional trial courts]. Anent the second, defendant asserts that the complaint fails to state a cause of action upon plaintiffs failure to allege a valid consignation, which, it stresses, is a matter upon which their claim is hinged.

This Court appreciates the logic of defendants arguments. The argument, however, assumes that plaintiffs claim depend on a valid consignation or that the consignation made by plaintiffs was ineffective. Suffice it to state that these are matters better ventilated at the trial on the merits.[10]

Petitioner filed a motion for reconsideration of the RTCs denial, which was denied by the RTC in its Order dated November 10, 1998.[11] Petitioner then brought the RTC orders to the CA via petition for certiorari and prohibition with preliminary injunction, but the CA denied this in the assailed Decision datedOctober 6, 2000. The decretal portion of the Decision reads:
WHEREFORE, premises considered, the petition is DISMISSED for lack of merit; and the assailed Orders of the respondent Judge in Civil Case No. 25,086-97 are AFFIRMED en toto. The petitioner is hereby ordered to file its Answer before the court a quo. SO ORDERED.[12]

The CA found that the RTC has jurisdiction over the case inasmuch as the action before the RTC seeks to compel petitioner to accept payment of the consigned amounts, and therefore one for specific performance, which is incapable of pecuniary estimation.[13] Petitioner sought reconsideration of the CAs decision but this was denied by the CA in the assailed Resolution dated February 6, 2001.[14] Hence, the present petition, with petitioners setting forth basically the same arguments it raised before the RTC and the CA.[15] According to petitioner, based on the allegations and the relief prayed for in the complaint, the action before the RTC is a consignation case or an action to compel the creditor to accept payment; and following the ruling in Ascue v. Court of Appeals, 196 SCRA 804, the amount consigned is below the jurisdiction of the RTC. Petitioner also argues that the case before the RTC is not a proper consignation case as it is not lodged with the proper forum where the consignation or deposit is at the disposal of judicial authority, the deposits having been made with the MTCC Office of the Clerk of Court. Lastly,

petitioner contends that since it is not the proper case, then it is dismissible for lack of jurisdiction, lack of or failure to state a cause of action and litis pendentia. It has long been settled that an order denying a motion to dismiss is an interlocutory order. It neither terminates nor finally disposes of a case, as it leaves something to be done by the court before the case is finally decided on the merits, and as such, the general rule is that the denial of a motion to dismiss cannot be questioned in a special civil action for certiorari.[16] In order to justify the grant of the extraordinary remedy of certiorari, the denial of the motion to dismiss must have been tainted with grave abuse of discretion amounting to lack or excess of jurisdiction.[17] In this case, the Court finds none. Both the RTC and the CA found that Civil Case No. 25,086-97 is within the RTCs jurisdiction as the same is incapable of pecuniary estimation. But that is the only aspect where the two courts shared the same view. The RTC and the CA differed in characterizing respondents case. It was the opinion of the RTC that Civil Case No. 25,086-97 is one for damages, while the appellate court found that it was for specific performance. Given this divergence of opinion, it now devolves upon the Court to ascertain the nature of the case before the RTC and ultimately determine whether the RTC has jurisdiction over the same. The nature of an action is determined by the material averments in the complaint and the character of the relief sought.[18] In this case, the complaint filed in Civil Case No. 25,086-97 sufficiently established a case for DAMAGES, and not specific performance. Neither is it an action for consignation. This is evident from the reading of the allegations in the complaint and the reliefs prayed for. The complaint principally sought an award of moral, nominal and exemplary damages, as well as attorneys fees and litigation expenses, for the alleged damages suffered by respondents by reason of petitioners disconnection of their electrical service. The allegations regarding the consignation with the court of the amounts due to petitioner are mere factual premises from which respondents are basing their theory that petitioners disconnection of the electrical service and removal of the electric meter was unjustified. Also, the relief sought by respondents for the RTC to order petitioner to delete the amount of P9,633.32 from their account is merely incidental to their claim for damages. It is not the main cause of their claim.

Given that Civil Case No. 25,086-97 is an action for damages, the next question to be resolved is whether the RTC has jurisdiction over the case. Republic Act No. 7691, which took effect on April 15, 1994, provides that where the amount of the demand in civil cases exceeds P100,000.00, exclusive of interest, damages of whatever kind, attorneys fees, litigation expenses, and costs, the exclusive jurisdiction thereof is lodged with the RTC.[19] Where the amount of the demand in the complaint does not exceed P100,000.00, exclusive of interest, damages of whatever kind, attorneys fees, litigation expenses, and costs, the exclusive jurisdiction over the same is vested in the Metropolitan Trial Court, Municipal Trial Court and Municipal Circuit Trial Court.[20] On March 20, 1999, by virtue of Administrative Circular No. 21-99, the jurisdictional amount was increased to P200,000.00. Guidelines in the implementation of R.A. No. 7691 were laid out in Administrative Circular No. 09-94 dated June 14, 1994. Particularly, with regard to damages, paragraph 2 provides:
2. The exclusion of the term damages of whatever kind in determining the jurisdictional amount under Section 19 (8) and Section 33 (1) of B.P. Blg. 129, as amended by R.A. No. 7691, applies to cases where the damages are merely incidental to or a consequence of the main cause of action. However, in cases where the claim for damages is the main cause of action, or one of the causes of action, the amount of such claim shall be considered in determining the jurisdiction of the court. (Emphasis supplied)

Jurisdiction over the subject matter is determined by the allegations in the complaint, irrespective of whether or not the plaintiff is entitled to recover all or some of the claims or reliefs sought therein.[21] Jurisdiction should not be affected by the pleas or the theories set up by the defendant in an answer or a motion to dismiss. Otherwise, jurisdiction would become dependent almost entirely upon the whims of the defendant.[22] The complaint in Civil Case No. 25,086-97 was filed on March 3, 1997,[23] hence, R.A. No. 7691 and its implementing guidelines apply. In their prayer, respondents sought, among others, the following awards:
xxxx

C.

On the First Cause of Action: To condemn defendant to pay plaintiffs the sum of P80,000.00 moral damages, P20,000.00 nominal damages and P20,000.00 exemplary or corrective damages with interest at the legal rate from the date of filing of the complaint until fully paid. On the Second Cause of Action: To condemn the defendant to pay damages to the following plaintiffs, viz.: (1) To plaintiff Serafin S. Osabel: P200,000.00 moral damages 20,000.00 nominal damages 20,000.00 temperate damages 20,000.00 exemplary or corrective damages with interest at the legal rate from the date of filing of the complaint until fully paid. (2) To plaintiffs Neoceda Osabel, Marie Johanna Osabel-Garcia, Victoria Luz-Dacuycuy, Anna Christia Osabel and Serafin Osabel, Jr. P150,000.00 moral damages 25,000.00 nominal damages 25,000.00 exemplary or corrective damages with interest at the legal rate from the date of filing of the complaint until fully paid. (3) P6,163.13 actual or compensatory damages with interest at the legal rate from the date of the filing of the complaint until fully paid.

D.

E. On the Third Cause of Action: To condemn the defendant to pay plaintiffs the sum of P140,000.00 in damages itemized as follows: P100,000.00 moral damages 20,000.00 nominal damages 20,000.00 exemplary or corrective damages [24]

It is clear from the foregoing that respondents main action is for damages. Hence, all these claims must be included in determining the jurisdictional amount, and obviously, it falls within the jurisdiction of the RTC. Petitioners argument of lack of cause of action likewise cannot stand. Cause of action is defined as the act or omission by which a party violates a right of another.[25] A complaint is said to assert a sufficient cause of action if, admitting what appears solely on its face to be correct, the plaintiff would be entitled to the relief prayed for. Assuming the facts that are alleged to be true, the court should be able to render a valid judgment in accordance with the prayer in the complaint.[26]

The rule is that in a motion to dismiss, a defendant hypothetically admits the truth of the material allegations of the plaintiffs complaint. This hypothetical admission extends to the relevant and material facts pleaded in, and the inferences fairly deducible from, the complaint. Hence, to determine whether the sufficiency of the facts alleged in the complaint constitutes a cause of action, the test is as follows: admitting the truth of the facts alleged, can the court render a valid judgment in accordance with the prayer?[27] A perusal of the complaint discloses sufficient allegations of a legal right or interest enjoyed by respondents, which was allegedly violated by petitioner, thus causing damages and injury to the former. The issue of valid consignation raised by petitioner is a matter of defense that is best left to be established by proof and determined during the trial on the merits of the case, as was correctly ruled by the RTC. Lastly, with regard to the ground of litis pendentia as a ground for dismissal of the case, suffice it to say that petitioner never raised this issue before the RTC or the CA. It is being alleged for the first time only before the Court. The rule is that questions not raised in the lower courts cannot be raised for the first time on appeal.[28] Consequently, the Court will not dwell on said issue. WHEREFORE, the petition is DENIED. The Regional Trial Court (RTC) of Davao City, Branch 8, is ORDERED to proceed with Civil Case No. 25,086-97 with dispatch. SO ORDERED.

G.R. No. 174436 - Juanita Ermita, represented by her Attorney-in-fact, Isabelo Ermitao v. Lailanie M. Paglas

THIRD DIVISION G.R. No. 174436 : January 23, 2013 JUANITA ERMITAO, represented by her Attorney-in-Fact, ISABELO ERMITAO, Petitioner,v. LAILANIE M. PAGLAS, Respondent. DECISION PERALTA, J.: Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the Decision1 and Resolution2 dated September 8, 2004 and August 16, 2006, respectively, of the Court of Appeals (CA) in CA-G.R. SP No. 77617. On November 5, 1999, herein respondent and petitioner, through her representative, lsabelo R. Ermitao, executed a Contract of Lease wherein petitioner leased in favor of respondent a 336 square meter residential lot and a house standing thereon located at No. 20 Columbia St., Phase l, Doa Vicenta Village, Davao City. The contract period is one (1) year, which commenced on November 4, 1999, with a monthly rental rate of P13,500.00. Pursuant to the contract, respondent paid petitionerP2,000.00 as security deposit to answer for unpaid rentals and damage that may be cause to the leased unit. Subsequent to the execution of the lease contract, respondent received information that sometime in March 1999, petitioner mortgaged the subject property in favor of a certain Charlie Yap (Yap) and that the same was already foreclosed with Yap as the purchaser of the disputed lot in an extra-judicial foreclosure sale which was registered on February 22, 2000. Yap's brother later offered to sell the subject property to respondent. Respondent entertained the said offer and negotiations ensued. On June 1, 2000, respondent bought the subject property from Yap for P950,000.00. A Deed of Sale of Real Property was executed by the parties as evidence of the contract. However, it was made clear in the said Deed that the property was still subject to petitioner's right of redemption. Prior to respondent's purchase of the subject property, petitioner filed a suit for the declaration of nullity of the mortgage in favor of Yap as well as the sheriff's provisional certificate of sale which was issued after the disputed house and lot were sold on foreclosure. Meanwhile, on May 25, 2000, petitioner sent a letter demanding respondent to pay the rentals which are due and to vacate the leased premises. A second demand letter was sent on March 25, 2001. Respondent ignored both letters. On August 13, 2001, petitioner filed with the Municipal Trial Court in Cities (MTCC), Davao City, a case of unlawful detainer against respondent. In its Decision dated November 26, 2001, the MTCC, Branch 6, Davao City dismissed the case filed by petitioner and awarded respondent the amounts of P25,000.00 as attorney's fees and P2,000.00 as appearance fee. Petitioner filed an appeal with the Regional Trial Court (RTC) of Davao City. On February 14, 2003, the RTC rendered its Decision, the dispositive portion of which reads as follows:

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WHEREFORE, PREMISES CONSIDERED, the assailed Decision is AFFIRMED with MODIFICATION. AFFIRMED insofar as it dismissed the case for unlawful detainer but modified in that the award of attorney's fees in defendant's herein respondent's favor is deleted and that the defendant respondent is ordered to pay plaintiff herein petitioner the equivalent of ten months unpaid rentals on the property or the total sum of P135,000.00. SO ORDERED.3

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The RTC held that herein respondent possesses the right to redeem the subject property and that, pending expiration of the redemption period, she is entitled to receive the rents, earnings and income derived from the property. Aggrieved by the Decision of the RTC, petitioner filed a petition for review with the CA. On September 8, 2004, the CA rendered its assailed Decision disposing, thus:

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WHEREFORE, premises considered, the assailed Decision of the Regional Trial Court, Branch 16, 11th Judicial Region, Davao City is AFFIRMED with the MODIFICATIONS as follows:
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(a) Private respondent's obligation to pay the petitioner the amount of ONE HUNDRED THIRTY-FIVE THOUSAND PESOS (P135,000.00) equivalent of ten (10) months is hereby DELETED; (b) Attorney's fees and litigation expenses were correctly awarded by the trial court having compelled the private respondent to litigate and incur expenses to protect her interests by reason of the unjustified act of petitioner (Producers Bank of the Philippines v. Court of Appeals, 365 SCRA 326), Thus: litigation expenses of only TEN THOUSAND PESOS (P10,000.00) not TWENTY-FIVE THOUSAND PESOS (P25,000.00); and (c) Attorney's fees REI NSTAT ED in the amount of TEN THOUSAND PESOS (P10,000.00) instead of only TWO THOUSAND PESOS (P2,000.00).
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SO ORDERED.4

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Quoting extensively from the decision of the MTCC as well as on respondent's comment on the petition for review, the CA ruled that respondent did not act in bad faith when she bought the property in question because she had every right to rely on the validity of the documents evidencing the mortgage and the foreclosure proceedings. Petitioner filed a Motion for Reconsideration, but the CA denied it in its Resolution dated August 16, 2006. Hence, the instant petition for review on certiorari raising the following assignment of errors:

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A.WHETHER OR NOT THE COURT OF APPEALS ERRED IN DISMISSING THE UNLAWFUL DETAINER CASE BY RULING THAT A SHERIFF'S FINAL CERTIFICATE OF SALE WAS ALREADY ISSUED WHICH DECISION IS NOT BASED ON THE EVIDENCE AND IN ACCORDANCE WITH THE APPLICABLE LAWS AND JURISPRUDENCE. B. WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT RULED THAT PRIVATE RESPONDENT WAS A BUYER IN GOOD FAITH EVEN IF SHE WAS INFORMED BY PETITIONER THROUGH A LETTER ADVISING HER THAT THE REAL ESTATE MORTGAGE CONTRACT WAS SHAM, FICTITIOUS AS IT WAS A PRODUCT OF FORGERY BECAUSE PETITIONER'S PURPORTED SIGNATURE APPEARING THEREIN WAS SIGNED AND FALSIFIED BY A CERTAIN ANGELA CELOSIA. C. WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT AWARDED ATTORNEY'S FEES WHICH WAS DELETED BY RTC-BRANCH 16 OF DAVAO CITY DESPITE THE ABSENCE OF ANY EXPLANATION AND/OR JUSTIFICATION IN THE BODY OF THE DECISION.5
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At the outset, it bears to reiterate the settled rule that the only question that the courts 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.6 It does not even matter if a party's title to the property is questionable.7 In an unlawful detainer case, the sole issue for resolution is the physical or material possession of the property involved, independent of any claim of ownership by any of the party litigants.8 Where the issue of ownership is raised by any of the parties, the courts may pass upon the same in order to determine who has the right to possess the property.9 The adjudication is, however, merely provisional and would not bar or prejudice an action between the same parties involving title to the property.10
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In the instant case, pending final resolution of the suit filed by petitioner for the declaration of nullity of the real estate mortgage in favor of Yap, the MTCC, the RTC and the CA were unanimous in sustaining the presumption of validity of the real estate mortgage over the subject property in favor of Yap as well as the presumption of regularity in the performance of the duties of the public officers who subsequently conducted its foreclosure sale and issued a provisional certificate of sale. Based on the presumed validity of the mortgage and the subsequent foreclosure sale, the MTCC, the RTC and the CA also sustained the validity of respondent's purchase of the disputed property from Yap. The Court finds no cogent reason to depart from these rulings of the MTCC, RTC and CA. Thus, for purposes of resolving the issue as to who between petitioner and respondent is entitled to possess the subject property, this presumption stands.

Going to the main issue in the instant petition, it is settled that in unlawful detainer, one unlawfully withholds possession thereof after the expiration or termination of his right to hold possession under any contract, express or implied.11 In such case, the possession was originally lawful but became unlawful by the expiration or termination of the right to possess; hence, the issue of rightful possession is decisive for, in such action, the defendant is in actual possession and the plaintiffs cause of action is the termination of the defendants right to continue in possession.12
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In the instant petition, petitioner's basic postulate in her first and second assigned errors is that she remains the owner of the subject property. Based on her contract of lease with respondent, petitioner insists that respondent is not permitted to deny her title over the said property in accordance with the provisions of Section 2 (b), Rule 131 of the Rules of Court. The Court does not agree. The conclusive presumption found in Section 2 (b), Rule 131 of the Rules of Court, known as estoppel against tenants, provides as follows:
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Sec. 2. Conclusive presumptions. The following are instances of conclusive presumptions: xxx

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(b) The tenant is not permitted to deny the title of his landlord at the time of the commencement of the relation of landlord and tenant between them. (Emphasis supplied). It is clear from the abovequoted provision that what a tenant is estopped from denying is the title of his landlord at the time of the commencement of the landlord-tenant relation.13 If the title asserted is one that is alleged to have been acquired subsequent to the commencement of that relation, the presumption will not apply.14 Hence, the tenant may show that the landlord's title has expired or been conveyed to another or himself; and he is not estopped to deny a claim for rent, if he has been ousted or evicted by title paramount.15 In the present case, what respondent is claiming is her supposed title to the subject property which she acquired subsequent to the commencement of the landlord-tenant relation between her and petitioner. Hence, the presumption under Section 2 (b), Rule 131 of the Rules of Court does not apply. The foregoing notwithstanding, even if respondent is not estopped from denying petitioner's claim for rent, her basis for such denial, which is her subsequent acquisition of ownership of the disputed property, is nonetheless, an insufficient excuse from refusing to pay the rentals due to petitioner. There is no dispute that at the time that respondent purchased Yap's rights over the subject property, petitioner's right of redemption as a mortgagor has not yet expired. It is settled that during the period of redemption, it cannot be said that the mortgagor is no longer the owner of the foreclosed property, since the rule up to now is that the right of a purchaser at a foreclosure sale is merely inchoate until after the period of redemption has expired without the right being exercised.16 The title to land sold under mortgage foreclosure remains in the mortgagor or his grantee until the expiration of the redemption period and conveyance by the master's deed.17 Indeed, the rule has always been that it is only upon the expiration of the redemption period, without the judgment debtor having made use of his right of redemption, that the ownership of the land sold becomes consolidated in the purchaser.18
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Stated differently, under Act. No. 3135, the purchaser in a foreclosure sale has, during the redemption period, only an inchoate right and not the absolute right to the property with all the accompanying incidents.19 He only becomes an absolute owner of the property if it is not redeemed during the redemption period.20
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Pending expiration of the period of redemption, Section 7 of Act No. 3135,21 as amended, provides:

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Sec. 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of First Instance of the province or place where the property or any part thereof is situated, to give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without complying with the requirements of this Act. Such petition shall be made under oath and filed in [the] form of an ex parte motion in the registration or cadastral proceedings if the property is registered, or in special proceedings in the case of property registered under the Mortgage Law or under section one hundred and ninety-four of the Administrative Code, or of any other real property encumbered with a mortgage duly registered in the office of any register of deeds in accordance with any existing law, and in each case the clerk of the court shall, upon the filing of such petition, collect the fees specified in paragraph eleven of section one hundred and fourteen of Act Numbered Four hundred and ninety-six, as amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall execute said order immediately.

Thus, it is clear from the abovequoted provision of law that, as a consequence of the inchoate character of the purchaser's right during the redemption period, Act. No. 3135, as amended, allows the purchaser at the foreclosure sale to take possession of the property only upon the filing of a bond, in an amount equivalent to the use of the property for a period of twelve (12) months, to indemnify the mortgagor in case it be shown that the sale was made in violation of the mortgage or without complying with the requirements of the law. In Cua Lai Chu v. Laqui,22 this Court reiterated the rule earlier pronounced in Navarra v. Court of Appeals23 that the purchaser at an extrajudicial foreclosure sale has a right to the possession of the property even during the one-year redemption period provided the purchaser files an indemnity bond. That bond, nonetheless, is not required after the purchaser has consolidated his title to the property following the mortgagor's failure to exercise his right of redemption for in such a case, the former has become the absolute owner thereof.24
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It, thus, clearly follows from the foregoing that, during the period of redemption, the mortgagor, being still the owner of the foreclosed property, remains entitled to the physical possession thereof subject to the purchaser's right to petition the court to give him possession and to file a bond pursuant to the provisions of Section 7 of Act No. 3135, as amended. The mere purchase and certificate of sale alone do not confer any right to the possession or beneficial use of the premises.25
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In the instant case, there is neither evidence nor allegation that respondent, as purchaser of the disputed property, filed a petition and bond in accordance with the provisions of Section 7 of Act No. 3135. In addition, respondent defaulted in the payment of her rents. Thus, absent respondent's filing of such petition and bond prior to the expiration of the period of redemption, coupled with her failure to pay her rent, she did not have the right to possess the subject property. On the other hand, petitioner, as mortgagor and owner, was entitled not only to the possession of the disputed house and lot but also to the rents, earnings and income derived therefrom. In this regard, the RTC correctly cited Section 32, Rule 39 of the Rules of Court which provides as follows:
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Sec. 32. Rents, earnings and income of property pending redemption. The purchaser or a redemptioner shall not be entitled to receive the rents, earnings and income of the property sold on execution, or the value of the use and occupation thereof when such property is in the possession of a tenant. All rents, earnings and income derived from the property pending redemption shall belong to the judgment obligor until the expiration of his period of redemption. (Emphasis supplied) While the above rule refers to execution sales, the Court finds no cogent reason not to apply the same principle to a foreclosure sale, as in this case. The situation became different, however, after the expiration of the redemption period on February 23, 2001. Since there is no allegation, much less evidence, that petitioner redeemed the subject property within one year from the date of registration of the certificate of sale, respondent became the owner thereof. Consolidation of title becomes a right upon the expiration of the redemption period.26 Having become the owner of the disputed property, respondent is then entitled to its possession. As a consequence, petitioner's ejectment suit filed against respondent was rendered moot when the period of redemption expired on February 23, 2001 without petitioner having redeemed the subject property, for upon expiration of such period petitioner lost his possessory right over the same. Hence, the only remaining right that petitioner can enforce is his right to the rentals during the time that he was still entitled to physical possession of the subject property that is from May 2000 until February 23, 2001. In this regard, this Court agrees with the findings of the MTCC that, based on the evidence and the pleadings filed by petitioner, respondent is liable for payment of rentals beginning May 2000 until February 2001, or for a period of ten (10) months. However, it is not disputed that respondent already gave to petitioner the sum of P27,000.00, which is equivalent to two (2) months rental, as deposit to cover for any unpaid rentals. It is only proper to deduct this amount from the rentals due to petitioner, thus leaving P108,000.00 unpaid rentals. As to attorneys fees and litigation expenses, the Court agrees with the RTC that since petitioner is, in entitled to unpaid rentals, her complaint which, among others, prays for the payment of unpaid rentals, is justified. Thus, the award of attorney' and litigation expenses to respondent should be deleted. WHEREFORE, the Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 77617, dated September 8, 2004 and August 16, 2006, respectively, are AFFIRMED with the following MODIFICATIONS: (1) respondent is ORDERED to pay petitioner P108,000.00 as and for unpaid rentals; (2) the award of attorneys fees and litigation expenses to respondent is DELETED. SO ORDERED.