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VICTORIA R. ARAMBULO vs EMERENCIANA R.

GUNGAB

For review on certiorari are the Decision [1] dated August 30, 2002 of the


Court of Appeals in CA-G.R. SP No. 65042, and its Resolution [2] dated
January 6, 2003, denying the motion for reconsideration. The Court of
Appeals ordered petitioners to vacate the property subject of this case. The
assailed Decision reversed and set aside the decision [3] of the Regional
Trial Court (RTC) which affirmed the joint decision [4] of the Metropolitan
Trial Court (MeTC) in two ejectment cases filed by respondent.

The facts are as follows:

Respondent Emerenciana R. Gungab is the registered owner of the contested


parcel of land with improvements located in Quezon City and covered by
Transfer Certificate of Title (TCT) No. 48330.

Petitioners are her sister Victoria R. Arambulo and nephew Miguel R.


Arambulo III.

In separate letters [5] dated October 19, 1998, respondent's counsel made a


formal demand to petitioners to vacate the subject property on or before
November 30, 1998. Petitioners refused. [6]

Respondent sought the assistance of the barangay authorities. However, no


amicable settlement was reached.

On February 2, 1999, respondent filed separate ejectment complaints against


the petitioners before the MeTC of Quezon City, docketed as Civil Case Nos.
21855 [7] and 21856. [8] Respondent alleged (1) that she owns the subject
property; (2) that she tolerated petitioners' occupancy of certain portions of the
subject property without rent; and (3) that despite her demands, they refused to
vacate the subject property.

Petitioners denied respondent's claim of sole ownership of the subject


property, asserting that petitioner Victoria Arambulo is a co-owner. They
stated (1) that after Pedro Reyes, father of respondent Emerenciana and
petitioner Victoria, died intestate in 1964, the property became part of the
common properties of the Reyes clan; (2) that during her lifetime, Anastacia
Reyes, wife of Pedro, allowed her daughter, petitioner Victoria, to use and
occupy a certain portion of the subject property; (3) that Victoria continuously
used and occupied this portion for the last 20 years; (4) that Anastacia also
allowed her grandson, petitioner Miguel, to use another portion of the subject
property since 15 years ago; and (5) that their 'use and possession of these
portions of the subject property had been with the knowledge, consent and
tolerance of all the other co-owners. [9]

Aside from these ejectment cases, there is also a pending case for annulment
of transfer and reconveyance of title before the RTC of Quezon City, which
Victoria and three of her brothers filed against respondent and her husband.

In its joint decision, [10] the MeTC of Quezon City, Branch 39, dismissed the
ejectment cases for lack of cause of action. It ruled that summary procedure
was not the proper procedure to resolve the cases. This ruling was based on
its findings (1) that respondent's allegation of tolerance was preposterous
since she failed to prove her proper acquisition of the subject property; and (2)
that petitioners were entitled to retain possession of the subject property
pursuant to Article 448 [11] of the Civil Code.

Respondent appealed, but the RTC of Quezon City, Branch 80, upheld the
MeTC's judgment, in toto. [12]

After her motion for reconsideration was denied, respondent filed a petition for
review with the Court of Appeals, which it disposed of as follows:

UPON THE VIEW WE TAKE OF THIS CASE, THUS, the


judgment appealed from must be, as it is hereby, REVERSED
and SET ASIDE, and a new one entered ordering [petitioners] to
vacate the portion of the subject property under their occupancy
or possession, and to surrender the same forthwith to
[respondent]. Without special pronouncement as to costs.

SO ORDERED. [13]

In reversing the RTC, the Court of Appeals, observing that both parties raised
the issue of ownership, provisionally resolved said issue to determine the issue
of possession. It noted the failure of the MeTC and RTC to evaluate thoroughly
the pieces of evidence submitted by the parties. The Court of Appeals held that
respondent had a preferred right to possess the property because she had a
genuine TCT. It rejected for being unsubstantiated, petitioners' claim that
Victoria was a co-owner of the subject property.
The Court of Appeals denied petitioners' motion for reconsideration.

Hence, this petition. Petitioners allege that:

(1)                           THE HONORABLE COURT OF APPEALS


COMMITTED SERIOUS ERROR IN RELYING SOLELY
ON THE TRANSFER CERTIFICATE OF TITLE IN THE
NAME OF RESPONDENT IN REVERSING THE
DECISION RENDERED BY THE REGIONAL TRIAL
COURT OF QUEZON CITY.

(2)                           THE HONORABLE COURT OF APPEALS


COMMITTED MANIFEST ERROR IN NOT CONSIDERING
THE CLEAR FACT THAT RESPONDENT WAS NEVER IN
POSSESSION OF THE PROPERTY IN QUESTION AND
ACCORDINGLY, THERE IS NO PHYSICAL
POSSESSION TO RESTORE AND PROTECT.

(3)                           THE HONORABLE COURT OF APPEALS


IGNORED THE CLEAR FACT THAT THERE ARE
EQUITABLE AND SPECIAL CIRCUMSTANCES
OBTAINING BETWEEN THE PARTIES, PARTICULARLY
THE INTENDED SALE OF THE SUBJECT PROPERTY
BY THE RESPONDENT, THAT IS LIKELY TO CREATE
CONFUSION, DISTURBANCE, AND EVEN BLOOD-
SHED, WHICH WILL JUSTIFY THE SUSPENSION OF
THE DECISION IN THE UNLAWFUL DETAINER CASE
RENDERED BY THE HONORABLE COURT OF
APPEALS TO AWAIT THE DISPOSITION IN THE
PENDING CIVIL ACTION FOR ANNULMENT OF
TRANSFER AND RECONVEYANCE OF TITLE OF THE
SAME PROPERTY.

(4)                           THE HONORABLE COURT OF APPEALS


ERRED IN RENDERING THE APPEALED DECISION
NOT IN ACCORD WITH LAW, EVIDENCE AND FACTS
OF THE CASE. [14]

The sole issue is, can respondent eject petitioners?

Petitioners contend that the Court of Appeals erred in reversing the RTC by
relying only on respondent's TCT without considering that respondent was
never in possession of the property. They insist that they were in possession
of the subject property and so there was no physical possession to restore
and protect. They pray that the Court suspend the Court of Appeals' Decision
pending resolution of the case for annulment of transfer and reconveyance of
title before the RTC.
Respondent counters that the Court of Appeals correctly reversed the
decision of the RTC since the best proof of ownership of a piece of land is the
certificate of title. She maintains that a pending civil action for annulment of
transfer and reconveyance of title in a separate proceeding is of no moment in
an ejectment case.

Pertinent to the instant case are the summary remedies of forcible entry and
unlawful detainer under Section 1, Rule 70 [15] of the Rules of Court. They
are distinguished from each other as follows:

. . . In forcible entry, one is deprived of physical possession of


land or building by means of force, intimidation, threat, strategy,
or stealth. 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. In
forcible entry, the possession is illegal from the beginning and
the basic inquiry centers on who has the prior possession de
facto. In unlawful detainer, 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
plaintiff's cause of action is the termination of the defendant's
right to continue in possession.

What determines the cause of action is the nature of defendant's


entry into the land. If the entry is illegal, then the action which
may be filed against the intruder within one year therefrom is
forcible entry. If, on the other hand, the entry is legal but the
possession thereafter became illegal, the case is one of unlawful
detainer which must be filed within one year from the date of the
last demand. [16]

Here, respondent's cause of action was not deprivation of possession of the


subject property by force, intimidation, threat, strategy or stealth. Rather,
these were for unlawful detainer since respondent alleged that (1) she owns
the subject property; (2) she allowed petitioners to occupy it by tolerance; (3)
she withdrew her consent and demanded that petitioners vacate it, but they
refused. Her complaints were also filed within one year from the date of her
last demand.

The sole issue for resolution in an unlawful detainer case is physical or


material possession. [17] But even if there was a claim of juridical
possession or an assertion of ownership by the defendant, the MeTC may still
take cognizance of the case. All that the trial court can do is to make an initial
determination of who is the owner of the property so that it can resolve who is
entitled to its possession absent other evidence to resolve ownership. [18] 
Courts in ejectment cases decide questions of ownership only as it is
necessary to decide the question of possession. The reason for this rule is to
prevent the defendant from trifling with the summary nature of an ejectment
suit by the simple expedient of asserting ownership over the disputed
property. [19]

In this case, the evidence showed that respondent has a Torrens Title over
the land. The Court of Appeals correctly ruled that respondent, as registered
owner, is preferred to possess it. The age-old rule is that the person who has
a Torrens Title over a land is entitled to possession thereof. [20] Except for
petitioners' unsubstantiated claim that Victoria Arambulo is a co-owner of the
property, they have not presented other justification for their continued stay
thereon.

We stress, however, that this determination of ownership is not final. It is only


an initial determination of ownership for the sole purpose of settling the issue
of possession. It would not prejudice the pending action in the RTC of Quezon
City between the same parties involving title to the property. [21]

Persons who occupy the land of another at the latter's tolerance or


permission, without any contract between them is bound by an implied
promise that they will vacate the same upon demand, failing which a summary
action for ejectment is the proper remedy against them. [22] Notably,
Anastacia Reyes only allowed petitioners to use and occupy certain portions
of the subject property. They admitted their 'use and possession of these
portions of the subject property 'had been with the knowledge, consent and
tolerance of all the other co-owners. Consequently, after respondent obtained
title to the subject property and withdrew her tolerance later on, petitioners'
refusal to vacate it rendered their possession thereof unlawful.

Since petitioners' occupation of the subject property was by mere tolerance,


they are not entitled to retain its possession under Article 448 [23] of the Civil
Code. They are aware that their tolerated possession may be terminated any
time and they cannot be considered as builders in good faith. [24] Moreover,
as aptly found by the Court of Appeals, petitioners have not presented
evidence to prove that they made improvements on the subject property and
defrayed the expenses therefor.
We also cannot sustain petitioners' contention that since they had possession
of the subject property, they are entitled to remain there. Again, they confuse
unlawful detainer with forcible entry. Prior physical possession by the plaintiff
is not necessary in an unlawful detainer case. It is enough that she has a
better right of possession. Prior physical possession of a property by a party is
indispensable only in forcible entry cases. [25] In unlawful detainer cases,
the defendant is necessarily in prior lawful possession of the property, but his
possession eventually becomes unlawful upon termination or expiration of his
right to possess. Thus, petitioners' prior physical possession of the property
does not automatically entitle them to continue in said possession and does
not give them a better right to the property.

Finally, petitioners cannot seek suspension of this case pending resolution of


the case for annulment of transfer and reconveyance of title before the RTC.
An action for reconveyance of property or accion reivindicatoria has no effect
on ejectment suits regarding the same property. Neither do suits for
annulment of sale, or title, or document affecting property operate to abate
ejectment actions respecting the same property. [26]

This case involves sisters and one of the sister's sons. However, we are
constrained to affirm the Court of Appeals' Decision, mindful of the
circumstances of this case. The alleged intended sale of the subject property
cannot likewise justify suspending this case. We found no factual basis for this
allegation, which was not even brought before the MeTC and RTC, but was
only brought to the Court of Appeals in petitioners' motion for reconsideration.

WHEREFORE , the petition is DENIED. The Decision dated August 30,


2002 and Resolution dated January 6, 2003 of the Court of Appeals
are AFFIRMED.

PS. NARCISO BARNACHEA and JULITA BARNACHEA (now heirs of


deceased Julita Barnachea), Petitioners,
vs.
HON. COURT OF APPEALS, HON. OSCAR C. HERRERA, JR., Presiding
Judge, RTC Branch 20, Malolos, Bulacan, HON., HORACIO T. VIOLA,
Presiding Judge, MTC Pulilan, Bulacan, and SPS. AVELINO and
PRISCILLA IGNACIO, Respondents.

DECISION
BRION, J.:

Before us is the Petition for Review by Certiorari filed by the spouses Narciso
and Julita Barnachea1 (petitioners) against the spouses Avelino and Priscilla
Ignacio (respondents), rooted in the ejectment complaint the respondents filed
against the petitioners before the Municipal Trial Court (MTC) of Pulilan,
Bulacan. The petition prays that we nullify the Decision 2 of the Court of
Appeals (CA) and its Resolution3 denying the motion for reconsideration, and
that we suspend the ejectment proceedings in light of a pending action for
quieting of title involving the disputed property.

BACKGROUND FACTS

The respondents filed their complaint for ejectment against the petitioners
before the MTC on October 20, 1998. The subject matter of the complaint
were lots titled in respondent Avelino Ignacio’s name (Subdivision Lot 16
covered by TCT No. 86821, and Subdivision Lot 17 covered by TCT No.
86822), which lots are adjacent to the property that the petitioners own and
occupy. These properties were originally part of a piece of land owned by a
certain Luis Santos and subsequently inherited by his daughter Purificacion
Santos Imperial. The land was subdivided and transferred to tenant-farmers
Santiago Isidro (EP No. A-050545 with TCT No. T-188-EP) and Procopio de
Guzman (EP No. 445440 with TCT No. T-185-EP). The property that the
petitioners own and occupy was derived from the land transferred to Santiago
Isidro. Respondent Ignacio’s properties were derived, on the other hand, from
the land originally transferred to Procopio de Guzman.

The complaint was dismissed on December 8, 1999, but was revived on April
5, 2000. The petitioners received summons on April 13, 2000 and, instead of
filing a new Answer, filed on April 18, 2000 a Motion for Extension of Time to
File Answer which the MTC denied on May 5, 2000. The petitioners
responded to this denial by filing a motion for reconsideration on May 23,
2000. Meanwhile, the respondents filed a Motion for the Issuance of a Writ of
Execution dated May 24, 2000, which the petitioners received on May 26,
2000.

To avert the implementation of the writ of execution, the petitioners filed a


Notice of Appeal. The MTC issued a subpoena dated June 5, 2000 setting the
hearing on the petitioners’ Motion for Reconsideration and the respondents’
Motion for Issuance of Writ of Execution on June 19, 2000. The petitioners
subsequently filed a Compliance that prayed, among others, that the pending
resolution on the incident and the Notice of Appeal be deemed to have been
filed ex abundanti cautela. The respondents, for their part, filed a
Manifestation and Motion praying, among others, that the petitioner’s Motion
for Reconsideration of the May 5, 2000 Order be denied for being moot and
academic.

On July 21, 2000, the MTC issued an order declaring the petitioners’ Motion
for Reconsideration abandoned because of the Notice of Appeal they
previously filed. Thereafter, the MTC forwarded the entire record of Civil Case
No. 818 to the Regional Trial Court, Branch 20 (RTC Branch 20), Malolos,
Bulacan. On August 24, 2000, petitioners submitted their Appeal
Memorandum to the RTC Branch 20 which affirmed the MTC decision on
September 20, 2000.

On October 5, 2000, the petitioner Julita's sister, Leticia, representing herself


to be the sole owner of EP No. A-050545 (TCT No. T-188-EP), filed a Petition
for Quieting of Title with the Regional Trial Court, Branch 19 (RTC Branch 19),
Malolos, Bulacan, docketed as Civil Case No. 694-M-2000. On October 9,
2000, prior to their receipt of the RTC Branch 20’s September 20, 2000
decision, the petitioners filed an Urgent Motion for the Suspension of
Proceedings (referred to for purposes of this decision as the urgent motion).

RTC Branch 20 denied on October 17, 2000 the petitioners’ urgent motion
and their subsequent Motion for Reconsideration. The petitioners brought the
denials to the CA via a petition for certiorari under Rule 65 of the Rules of
Court on the issue of "whether the pendency of an action involving the issue
of ownership is sufficient basis for [the] suspension of an ejectment
proceeding between the same parties and relating to the same subject
matter".

THE CA’S DECISION

The CA denied the petition and the petitioners' subsequent motion for
reconsideration, essentially on the grounds that (1) the issue in an ejectment
suit is limited to the physical possession of real property and is separate and
distinct from the issue of ownership and possession de jure that either party
may set forth in his or her pleading; (2) the pendency of an action for
reconveyance of title over the same property or for annulment of deed of sale
does not divest the MTC of its jurisdiction to try the forcible entry or unlawful
detainer case before it, and that ejectment actions generally cannot be
suspended pending the resolution of a case for quieting of title between the
same parties over the same subject property; and (3) the case does not fall
under the exception provided by the case of Amagan v. Marayag 4, where the
Court allowed the suspension of ejectment proceedings because of strong
reasons of equity applicable to the case – the demolition of the petitioner’s
house unless the proceedings would be suspended. The CA ruled that the
petitioners’ reliance on Amagan was inappropriate because the said case only
applies to unlawful detainer actions while the petitioners’ ejectment suit is an
action for forcible entry. To the CA, the initial tolerance on the part of the
private respondents did not convert the nature of their ejectment suit from
forcible entry into unlawful detainer, following the reasoning this Court applied
in Munoz v. Court of Appeals.5

ASSIGMENT OF ERRORS

The petitioners impute the following error to the CA:

[T]he Honorable Court of Appeals erred when it ruled that the said ejectment
proceeding was not a suit for illegal detainer but one of forcible entry, thus,
denied application to the exceptional rule on suspension of ejectment
proceedings, at any stage thereof, until the action on ownership is finally
settled.6

From this general assignment of error, the petitioners submitted in their


memorandum the following specific issues for our resolution:

1) whether or not the ejectment case filed by the respondents against


petitioners with the MTC of Pulilan is for unlawful detainer or for forcible entry;

2) whether the MTC of Pulilan had validly acquired and exercised jurisdiction
over the ejectment case considering that the complaint was filed beyond one
year from the demand to vacate the subject premises; and

3) whether or not the ejectment proceedings should be suspended at any


stage until the action on ownership of the disputed portion of the subject
property is finally settled.

OUR RULING

We find the petition without merit.

1. Nature of the Action before the MTC.

The best indicator of what the plaintiff in an ejectment case intends with
respect to the nature of his or her complaint can be found in the complaint
itself. In this case, the complaint states:7

"That plaintiffs are the registered owners in fee simple of several residential
lots identified as lots 16 and 17 covered by Certificate of Title Nos. 86821 and
86822 issued in the name of the spouses by the Register of Deeds of
Bulacan, with a total aggregate area of 254 square meters situated at Cutcut,
Pulilan, Bulacan. Copy of the said titles are hereto attached and marked as
Annex "A" and "A-1"

"That in a portion of the lots 16 and 17, a portion of the house of the
defendants was erected and built thus usurping the said portion and this was
made known to the defendants when the plaintiffs caused the relocation of the
subject lots, however, considering that the latter were not yet in need of that
portion, they allowed the former to stay on the portion by tolerance;

"That last July 1998, when the plaintiffs were in the process of fencing the
boundary of their lots, to their surprise, they were not allowed by the
defendants to extend the fence up to the portions they illegally occupied;

"That despite the advice given to them by several Geodetic Engineers


commissioned by both the plaintiffs and the herein defendants, for them to
give way and allow the plaintiffs to fence their lot, same proved futile as they
stubbornly refused to surrender possession of the subject portion;
The actions for forcible entry and unlawful detainer are similar because they
are both summary actions where the issue is purely physical
possession.8 Other than these commonalities, however, they possess
dissimilarities that are clear, distinct, and well established in law. 9

In forcible entry, (1) the plaintiff must prove that he was in prior physical
possession of the property until he was deprived of possession by the
defendant; (2) the defendant secures possession of the disputed property
from the plaintiff by means of force, intimidation, threat, strategy or stealth;
hence, his possession is unlawful from the beginning; (3) the law does not
require a previous demand by the plaintiff for the defendant to vacate the
premises; and (4) the action can be brought only within one-year from the
date the defendant actually and illegally entered the property. 10

In marked contrast, unlawful detainer is attended by the following features: (1)


prior possession of the property by the plaintiff is not necessary; (2)
possession of the property by the defendant at the start is legal but the
possession becomes illegal by reason of the termination of his right to
possession based on his or her contract or other arrangement with the
plaintiff; (3) the plaintiff is required by law to make a demand as a
jurisdictional requirement; and (4) the one-year period to bring the complaint
is counted from the date of the plaintiff’s last demand on the defendant. 11

Under these standards, we do not hesitate to declare the Court of Appeals in


error when it held that the present case involves forcible entry rather than
unlawful detainer. A plain reading of the complaint shows the respondents’
positions that the petitioners were in prior possession of the disputed property;
that the respondents allowed them to occupy the disputed property by
tolerance; that the respondents eventually made a demand that the petitioners
vacate the property (on August 26, 1998, which demand the petitioners
received on August 31, 1998); and that the petitioners refused to vacate the
property in light of the defenses they presented. Separately from the
complaint, the respondents characterized the action they filed against the
petitioners in the MTC as an unlawful detainer when they stated in their
memorandum that "as alleged in the complaint, what was filed by the
respondents [was] an ejectment suit for unlawful detainer." 12

A critical point for us in arriving at our conclusion is the complete absence of


any allegation of force, intimidation, strategy or stealth in the complaint with
respect to the petitioners’ possession of the respondents’ property. While
admittedly no express contract existed between the parties regarding the
petitioners’ possession, the absence does not signify an illegality in the entry
nor an entry by force, intimidation, strategy or stealth that would characterize
the entry as forcible. It has been held that a person who occupies land of
another at the latter’s tolerance or permission, without any contract between
them, is necessarily bound by an implied promise that he will vacate upon
demand, failing which a summary action for ejectment is the proper remedy.
The status of the defendant is analogous to that of a lessee or tenant whose
terms has expired but whose occupancy continues by tolerance of the
owner.13
To be sure, we are aware of the Munoz v. Court of Appeals 14 ruling that the
CA relied upon to reach the conclusion that the present case involves forcible
entry, not unlawful detainer. What the CA apparently misread in Munoz was
the allegation of stealth in the complaint; anchored on this finding, the Court
concluded that the defendant’s possession was illegal from the beginning so
that there could be no possession by tolerance. The allegation of stealth, of
course, is not present in the present case. On the contrary, tolerance was
alleged in the ejectment complaint itself. Thus, there is no reason for the
Munoz ruling to apply to the present case; there is no basis nor occasion to
conclude that the respondents filed a forcible entry case.

2. The Jurisdictional Issue –


Was the Ejectment Complaint
Seasonably Filed?

We point out at the outset that what the petitioners directly appealed to this
Court is the appellate court’s affirmation of the RTC’s refusal to suspend the
ejectment proceedings based on the quieting of title case the petitioners cited.
Hence, we are not reviewing the merits of the main ejectment case,
particularly the question of the MTC’s jurisdiction, as these aspects of the
case were not appealed to us. If we touch the jurisdictional aspect of the case
at all, it is only for purposes of fully responding to the parties’ arguments.

The petitioners’ jurisdictional argument cannot succeed as the respondents’


ejectment complaint was filed within the one-year period for bringing an action
for unlawful detainer or forcible entry that Section 1, Rule 70 of the Rules of
Court requires. Section 1 specifically states:

Section 1. Who may institute proceedings, and when.

Subject to the provisions of the next succeeding section, a person deprived of


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

On the basis of this provision, the petitioners argue that the respondents’
cause of action – whether for forcible entry or for unlawful detainer – had
prescribed when the ejectment complaint was filed on April 5, 2000. They
point out that the last demand letter (the reckoning date for unlawful
detainer15) was dated Aug. 26, 1998 and was received by the petitioners on
August 31, 1998; the complaint was only filed on April 5, 2000 or more than 1
year after August 31, 1998. On the other hand, if the action had been for
forcible entry, the prescriptive period commenced on the discovery of the
usurpation and the computation period would have commenced either during
the relocation survey of the lots or in July 1998 when the respondents were
prevented from fencing the disputed property.

The one-year period within which to commence an ejectment proceeding is a


prescriptive period as well as a jurisdictional requirement. Hence, Article 1155
of the Civil Code on the manner of reckoning the prescriptive period must
necessarily come into play. Under this Article, the filing of a complaint in court
interrupts the running of prescription of actions. As an action for unlawful
detainer, the one-year prescription period started running after August 31,
1998 – the date of receipt of the respondents’ demand letter. The period ran
for almost two months until it was interrupted on October 20, 1998 when the
respondents filed their ejectment complaint. This complaint, however, was
dismissed on December 8, 1999. Upon this dismissal, the prescriptive period
again began to run for about four months when another interruption
intervened – the revival of the complaint on April 5, 2000. Evidently, under
these undisputed facts, the period when the prescriptive period effectively ran
does not add up to the one-year prescriptive period that would jurisdictionally
bar the ejectment case.

3. Suspension of the Ejectment


Proceedings until Resolution
of the Ownership Issue.

The issue in an unlawful detainer case is limited to physical possession.


When a claim of ownership is used as a basis for de facto possession or to
assert a better possessory right, the court hearing the case may provisionally
rule on the issue of ownership. As a rule, however, a pending civil action
involving ownership of the same property does not justify the suspension of
the ejectment proceedings. Only in rare cases has this Court allowed a
suspension of the ejectment proceedings and one of these is in the case of
Amagan v. Marayag16 that the petitioners cite. To quote from Amagan –

[i]ndisputably, the execution of the MCTC Decision would have resulted in the
demolition of the house subject of the ejectment suit; thus, by parity of
reasoning, considerations of equity require suspension of the ejectment
proceedings. xxx [L]ike Vda. de Legaspi, the respondent’s suit is one of
unlawful detainer and not of forcible entry, and most certainly, the ejectment
of petitioners would mean a demolition of their house, a matter that is likely to
create "confusion, disturbance, inconvenience and expenses" mentioned in
the said exceptional case.1awphi1

Necessarily, the affirmance of the MCTC Decision would cause the


respondent to go through the whole gamut of enforcing it by physically
removing the petitioners from the premises they claim to have been occupying
since 1937. (Respondent is claiming ownership only of the land, not of the
house) Needlessly, the litigants as well as the courts will be wasting much
time and effort by proceeding at a stage wherein the outcome is at best
temporary, but the result of enforcement is permanent, unjust and probably
irreparable.17

However, we do not find these same circumstances present in this case for
the reasons we shall discuss in detail below.

First. In Amagan, the party refusing to vacate the disputed premises (or the
deforciant in the action for unlawful detainer) was the same party seeking to
quiet his title. In the present case, the petitioners are not parties to the civil
action (for quieting of title) whose result they seek to await; the plaintiff in the
quieting of title case is Leticia, the petitioner Julita’s sister. No proof
whatsoever was offered to show that petitioner Julita is asserting her own title
to the property; there is only the allegation that Leticia was appointed as the
representative of Julita and the other heirs of Isidro in their various recourses
at law to vindicate their landowners’ rights. 18 The respondents in fact actively
disputed petitioner Julita’s identification with the quieting of title case in their
Comment since Leticia claimed to be the sole owner of TCT No. T-188-EP in
her action to quiet title. The respondents also pointed to the document entitled
"Kasulatan ng Pagmamana ng Lupa sa Labas ng Hukuman na May
Pagtalikod sa Bahagi" executed on May 27, 1995, showing that Julita had
relinquished her share over TCT No. T-188-EP in favor of her sister Leticia. A
desperation argument the petitioners advanced in their Memorandum is that
the Kasulatan was only executed "pursuant to the agrarian reform policy
proscribing the parceling of the awarded landholding into smaller units to
preserve its viability".19 In other words, the petitioners are disavowing, for
purposes of this case, the representation they made in completing their
submission before the agrarian reform authorities. We cannot of course
recognize this line of argument as justification for the suspension of the
ejectment proceedings as the petitioners are bound by their representations
before the agrarian reform authorities and cannot simply turn their back on
these representations as their convenience requires. No less decisive against
the petitioners’ argument for suspension is the decision itself of RTC Branch
19 that the respondents attached to their Comment. This decision shows that
Civil Case No. 694-M-2000, instead of being a case for quieting of title, is in
fact a mere boundary dispute.20

Second. In Amagan, the MCTC decision involved the demolition of the


petitioners’ house – a result that this Court found to be "permanent, unjust and
probably irreparable"; in the present case, only a portion of the petitioners’
house is apparently affected as the petitioners occupy the lot adjoining the
disputed property. Significantly, the height, width and breadth of the portion of
the house that would be affected by the execution of the RTC Branch 20
decision does not appear anywhere in the records, thus, unavoidably inviting
suspicion that the potential damage to the petitioners is not substantial. More
important than the fact of omission is its implication; the omission constitutes
a missing link in the chain of equitable reasons for suspension that the
petitioners wish to establish. Thus, the equitable consideration that drove us
to rule as we did in Amagan does not obtain in the present case.
In the absence of a concrete showing of compelling equitable reasons at least
comparable and under circumstances analogous to Amagan, we cannot
override the established rule that a pending civil action for ownership shall not
ipso facto suspend an ejectment proceeding. Additionally, to allow a
suspension on the basis of the reasons the petitioners presented in this case
would create the dangerous precedent of allowing an ejectment suit to be
suspended by an action filed in another court by parties who are not involved
or affected by the ejectment suit.

WHEREFORE, premises considered, we hereby DISMISS the petition for lack


of merit. Costs against the petitioners.

VICTORIA FERNANDO, Petitioner, v. SPS. REGINALDO LIM and


ASUNCION LIM, Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the


Rules of Court, assailing the August 31, 2006 Decision 1 of the Court of
Appeals (CA) which affirmed the ejectment of Victoria Fernando (petitioner)
from the property of Spouses Reginaldo and Asuncion Lim; and the January
15, 2007 CA Resolution2 which denied the motion for reconsideration.

The relevant facts are of record.

Lim Kieh Tong and Sons, Inc. (LKTSI) was the owner of a parcel of land with
an area of 400 sq. meters, known as Lot 1 of the consolidation-subdivision
plan (LRC) Pcs-320, located at Blumentritt Street, Sta. Cruz, Manila and
registered in its name under Transfer Certificate of Title (TCT) No. 125241. 3

On the property are improvements registered in the name of LKTSI under Tax
Declaration No. 00198.4 Among these improvements is Unit 1682 which, as of
March 5, 2004, was being occupied by petitioner for a gross monthly rental
of P10,412.00 plus withholding tax of P520.60 or a total of P10,932.60.5

When it was about to be dissolved, LKTSI executed on April 1, 2004 a Deed


of Assignment of Real Property, 6 transferring by way of liquidating dividends
all its rights and interests in the property covered by TCT No. 125241 to its
stockholder, respondent Reginaldo Lim.

Spouses Reginaldo and Asuncion Lim (respondents) subdivided the assigned


property and registered their title to the larger portion under TCT No. 263331,
and to the smaller portion - - which covers Unit 1682 - - under TCT No.
264835.7 They also registered in their names the improvements on the
assigned property under Tax Declaration No. 00182. 8
In a letter dated April 29, 2004, respondents, through counsel, informed
petitioner that they were the new owners of Unit 1682 and that they were not
renewing her lease, thus:

We are writing you in behalf of our client, Mr. Reginaldo Lim, to


formally inform you that he is now the new owner of the property
you are presently leasing. Please find attached a copy of his title
to the said property.

Our client decided not to renew or extend any lease agreement


you may have entered with the previous owner. We understand
that your lease of the property is on a month-to-month basis.
Hence, your lease contract ends on April 30, 2004 and will no
longer be renewed. Any stay in the premises beyond the said
date should not be construed as a renewal of your monthly
lease, but merely by tolerance of our client. At any rate, you are
hereby given notice to vacate the premises of 1682 Blumentritt
St., Sta. Cruz, Manila within fifteen (15) days from receipt of this
letter. Your failure to do so will compel us to institute an
ejectment suit against you to enforce our clients' rights, and
charge you with attorney's fees and all attendant damages that
will be incurred by our client, including lost business
opportunities and income.

We trust that you will see yourself clear on this matter and surrender
peacefully the possession of the leased premises to our client. 9

As their demand went unheeded, respondents filed with the Metropolitan Trial
Court, Branch 16, Manila (MeTC) a Complaint 10 for Ejectment with Prayer for
Issuance of Injunction against petitioner, praying that the latter be ordered to
vacate Unit 1682 and to pay reasonable monthly rent of P25,000.00 and
attorney's fees.

In her Answer,11 petitioner questioned the jurisdiction of the MeTC in view of


an issue of title over Unit 1682 that she raised in a complaint 12 she filed with
the Regional Trial Court (RTC) to annul the April 1, 2004 deed of assignment
for violation of Sec. 6 of Presidential Decree No. 1517 (P.D. No. 1517), which
states:

Sec. 6. Land Tenancy in Urban Land Reform Areas. Within the


Urban Zones legitimate tenants who have resided on the land
for ten years or more who have built their homes on the land
and residents who have legally occupied the lands by contract,
continuously for the last ten years shall not be dispossessed of
the land and shall be allowed the right of first refusal to purchase
the same within a reasonable time and at reasonable prices,
under terms and conditions to be determined by the Urban Zone
Expropriation and Land Management Committee created by
Section 8 of this Decree.
She pointed out that the MeTC could not decide the complaint for ejectment
without determining whether the assignment of Unit 1682 to respondents
impinged on her preemptive rights under P.D. No. 1517; that the MeTC would
also have to determine whether respondents could legally eject her despite
the express prohibition against her dispossession under said law; and that,
therefore, as the issues of possession and title could not be adjudicated
separately, the case should have been brought before the RTC, not the
MeTC.13

Petitioner further argued that respondents had no cause of action for


ejectment because they did not serve on her a valid demand to pay rent and
vacate, or resort to barangay conciliation.14 Petitioner was never remiss in her
obligations under the monthly lease contract; and under the Rent Control Law,
expiration of contract is not a valid ground for ejectment. 15

After the parties submitted their position papers, the MeTC rendered a
Decision16 dated June 7, 2005, in favor of respondents, thus:

WHEREFORE, premises considered, judgment is hereby


rendered in favor of the plaintiff [respondents] and against the
defendant [petitioners]:

1. Ordering the defendant [petitioner] and all persons claiming


right under her to vacate the subject premises and peacefully
surrender possession of the property located at 1682
Blumentritt, Sta. Cruz, Manila;

2. Ordering the defendant [petitioner] to pay a reasonable


monthly rental of P25,000.00 to plaintiffs [respondents]
computed from the time the instant action was filed up to the
time the subject premises is completely vacated and
surrendered to plaintiffs [respondents];

3. Ordering the defendant [petitioner] to pay plaintiff the sum


of P20,000.00 as attorney's fees.

4. Without Costs.

SO ORDERED.17

Petitioner appealed to the RTC, Branch 20, Manila emphasizing that she
actually owns Unit 1682 because it was she who rebuilt it after it was
destroyed by fire,18 petitioner argued that respondents had no interest in or
title to Unit 1682; hence, they could not validly compel her to vacate the
property. Neither could they claim title to the land on which Unit 1682 stands
because the April 1, 2004 deed of assignment was of no effect, for it was in
violation of Sec. 6, P.D. No. 1517. 19 She reiterated that such issue of title
affecting Unit 1682 could only be resolved in an accion
reivindicatoria cognizable by the RTC.20
Moreover, in the event that the complaint for ejectment be found proper,
petitioner invoked the protection against ejectment provided under existing
rent control laws. She argued that, contrary to the ruling of the MeTC, said
laws were applicable to her because she had been using Unit 1682 not just as
her business office but also as a dwelling place. 21 Moreover, her lease on the
property started more than thirty (30) years ago; hence, the P7,500.00
threshold rent set by the Rent Control Law could not prejudice her. 22

Finally, petitioner questioned the MeTC's imposition of a P25,000.00 monthly


rent for lack of factual and legal basis.23

In a Decision dated December 16, 2005, the RTC affirmed the MeTC Decision
with modification, thus:

WHEREFORE, the assailed Decision dated June 7, 2005 of the Metropolitan


Trial Court Branch 20 is hereby MODIFIED as follows:

1. Ordering the defendant [petitioner] and all persons claiming


right under her to vacate the subject premises and peacefully
surrender possession of the property located at 1682
Blumentritt, Sta. Cruz, Manila to herein plaintiffs [respondents];

2. Ordering the defendant [petitioner] to pay a reasonable


monthly rental of P15,000.00 to plaintiffs [respondents]
computed from the time the instant action was filed up to the
time the subject premises is completely vacated and
surrendered to plaintiffs;

3. Ordering the defendant [petitioner] to pay plaintiffs


[respondents the sum of P20,000.00 as attorney's fees.

4. Without cost.

SO ORDERED.24

Petitioner filed a motion for reconsideration but the RTC denied it in its
Order25 dated January 20, 2006.

She then filed with the CA a Petition for Review under Rule 42 of the Rules of
Court in the August 31, 2006 Decision assailed herein. The CA affirmed the
RTC decision with modification:

WHEREFORE, in consideration of the foregoing, the instant


petition is perforce denied. Accordingly, we affirm with
modification the assailed decision dated 16 December 2005 of
the respondent court, in that the award of attorney's fees in the
amount of P20,000.00 is hereby deleted.

SO ORDERED.26
Her motion for reconsideration27 having been denied by the CA in its
Resolution28 dated January 15, 2007, petitioner filed the present Petition, with
application for temporary restraining order and writ of preliminary injunction to
enjoin enforcement of the assailed CA decision and resolution.

In a Resolution29 dated February 28, 2007, the Court issued a Temporary


Restraining Order (TRO) enjoining the CA, RTC, MeTC and respondents or
their agents and assigns from implementing or enforcing the August 31, 2006
Decision and January 15, 2007 Resolution of the CA. Petitioner posted a cash
bond in the amount of P100,000.00.30

Respondents filed a Motion to Lift the TRO or to Require Petitioners to Make


the Required Monthly Deposit,31 to which petitioner filed a Consolidated
Comment.32 In its Resolution33 of July 9, 2007, the Court denied respondents'
motion to lift the TRO, but granted their prayer that petitioner be required to
pay P10,932.60 monthly rental from the date of receipt by petitioner of the
MeTC decision, in accordance with Section 19, 34 Rule 70 of the Revised
Rules of Court.

In separate Certifications35 dated August 22, 2007, the MeTC and RTC


reported that petitioner did not make any rental deposit, although she posted
a supersedeas bond in the amount of P100,000.00. Hence, respondents filed
a Manifestation and Motion36 dated September 12, 2007 to lift the TRO for
failure of petitioner to comply with the Court's Resolution of July 9, 2007. The
Court, in a Resolution37 dated October 15, 2007, required petitioner to
comment.

In her January 28, 2008 Comment 38 to the September 12, 2007 Manifestation
and Motion, petitioner explained that she already complied with the July 9,
2007 Resolution of the Court by filing a supersedeas bond for P100,000.00,
and that she had filed with the RTC an urgent motion for computation of back
rentals but the same had remained unresolved, thus preventing her from
making the required monthly deposit.

Earlier, on January 23, 2008, respondents filed a Reiterative Motion to Lift the
Temporary Restraining Order39 for failure of petitioner to comply with the July
9, 2007 and October 15, 2007 Resolutions of the Court. On March 12, 2008,
the Court issued a Resolution 40 noting both the respondents' Reiterative
Motion and petitioner's Comment, and requiring petitioner to deposit to the
RTC the unpaid monthly rentals in the amount of P10,932.60 as directed in
the Court's July 9, 2007 Resolution and to submit proof of compliance within
ten (10) days from notice; otherwise, the temporary restraining order would be
lifted.

In a Manifestation and Compliance 41 dated March 9, 2008, petitioner


explained that her January 28, 2008 Comment was in compliance with both
the July 9, 2007 and October 15, 2007 Resolutions of the Court.

Based on court records, copy of the Resolution was mailed to petitioner on


March 18, 2008,42 and she received the same on April 28. 2008. 43 Yet, as per
Certification issued on May 12, 2008 by the RTC, petitioner had not made any
rental deposit.44 Hence, respondents filed another Manifestation 45 for the lifting
of the TRO.

The Court now resolves the main issues in the Petition, viz.:

1. Whether the pending action for annulment of transfer of title


on ground of violation of P.D. 1517 (granting right of first refusal
to the lessee and prohibiting dispossession of the property) filed
by the petitioner against private respondents and previous
lessor LKTSI constituteslitis pendentia or at the very least poses
legal questions warranting the suspension of the proceedings of
this ejectment suit.

2. Whether the court where the prior pending action involving


the issue of whether the lessee can be dispossessed has
exclusive and original jurisdiction to the exclusion of other courts
where the action for dispossession via ejectment suit is filed
after.

3. Whether the trial court a quo has jurisdiction over the


complaint.

4. Whether there is a lease relationship between the parties that


can entitle the lessor to file an ejectment case.

5. Whether there is a proper demand for purposes of ejectment


suit.

6. Whether the appellate court and the trial court a quo could
make an award for payment of monthly rental in such amount
more than if not other than the last agreed monthly rentals
between petitioner and LKTSI.46

To the foregoing set of issues, however, petitioner, in her Memorandum,


added several more, to wit:

1. Whether private respondents committed forum-shopping;

xxx

7. Whether on account of the foregoing issues, the application


for issuance of writ of preliminary injunction may be granted as
prayed for in the petition.

8. Whether ejectment proceedings which are summary in nature


can take precedence over an annulment action based upon a
violation of specific and express provision of law (PD 1517).
9. Whether the ejectment proceeding can be suspended when it
comes to direct conflict with an existing and applicable law;
andcralawlibrary

10. Whether which rights in the instant case must be


a priori protected - physical or material right of possession or
substantial issue of ownership which subsumes the issue of
possession pursuant to the existing and applicable provision of
law, 47

in arrant disregard of the July 9, 2007 Resolution of the Court, forbidding new
issues from being raised by the parties in their respective memoranda. 48 This
is a standard prohibition inserted into every Court order for submission of
memoranda, the purpose of which is to forestall surprise by one party upon
the other, who would have no opportunity to counter whatever new point of
law, theory, issue or argument may be belatedly raised. 49

Consequently, the Court will not resolve such new issues, except when they
are related to the issues raised in the Petition, which may actually be
condensed, thus:

First, whether the CA erred in affirming the RTC for sustaining the jurisdiction
of the MeTC over the ejectment complaint; andcralawlibrary

Second, whether the CA erred in affirming with modification the judgments of


the RTC and MeTC ordering the ejectment of petitioner.

Third, whether the temporary restraining order issued by the Court should be
lifted as prayed for by respondents.

On the issue of jurisdiction

The allegations in a complaint 50 and the character of the relief


sought51 determine the nature of the action and the court with jurisdiction over
it. The defenses set up in an answer are not determinative. 52

A complaint sufficiently alleges a cause of action for unlawful detainer if it


recites that: a) initially, possession of the property by the defendant was by
contract with or by tolerance of the plaintiff; b) eventually, such possession
became illegal upon notice by plaintiff to defendant of the termination of the
latter's right of possession; c) thereafter, defendant remained in possession of
the property and deprived plaintiff of the enjoyment thereof; and d) within one
year from the last demand on defendant to vacate the property, plaintiff
instituted the complaint for ejectment.53

The complaint for ejectment which respondents filed against petitioner


alleges:
3. Plaintiffs [respondents] are the absolute and registered
owners of the land located at No. 1682 Blumentritt St., Sta.
Cruz, Manila, including improvements therein xxx. crvll

xxx

5. xxx The first unit, designated as 1682 Blumentritt St., Sta.


Cruz, Manila xxx is presently being occupied by herein
defendant [petitioner].

6. Defendant's [petitioner's] lease of Unit 1682 xxx with LKT, sicas


with the others, was on a month-to-month basis. The property
was transferred to plaintiffs [respondents] on April 2, 2004.
Plaintiffs [respondents] have no plans to have the premises
leased as they acquired the property for some other urgent
business purpose in mind. Thus, plaintiffs [respondents] talked
to and appealed to the occupants of the building to voluntarily
vacate the premises and peacefully surrender possession
thereof to plaintiffs [respondents].

7. However, defendant [petitioner] did not cooperate and instead


stubbornly remained on the subject premises.

xxx

9. Thus, plaintiffs [respondents], through their counsel, formally


wrote to defendant Victoria Fernando [petitioner], informing the
latter that her lease of the aforegmentioned premises, which is
on a month-to-month basis, ended on April 30, 2004 and will no
longer be renewed. Defendant [petitioner] was also informed
that if she ever continued to stay in the premises beyond April
30, 2004, it should not be construed as a renewal of whatever
lease agreement defendant [petitioner] previously had with LKT.

10. Defendant, who duly received the letter, was given fifteen
(15) days to peacefully surrender possession of the subject
premises, particularly 1682 Blumentritt, St., Sta. Cruz, Manila, to
herein plaintiffs. A copy of said letter dated April 29, 2004 is
hereto attached and made an integral part hereof as "Annex C".

11. However, despite oral and written demands to vacate


subject premises, defendant failed and refused, and still fails
and refuses, without justifiable reason, to vacate the said subject
premises and to peacefully surrender possession thereof to
plaintiffs, to the damage and prejudice of the latter. 54

In essence, the complaint recites that when respondents acquired Unit 1682
from LKTSI, petitioner was still in possession of the property by virtue of a
month-to-month lease contract with LKTSI; that said lease contract was set to
expire on April 30, 2005; that respondents verbally informed petitioner that her
lease contract would not be renewed when it expired; and that respondents
also served a written demand dated April 29, 2004 on petitioner to vacate Unit
1682, but the latter refused to do so. By these allegations, the complaint
clearly drew up a case for unlawful detainer. It was therefore correctly filed
with the MeTC which has jurisdiction over ejectment cases. 55

Petitioner, however, has raised an issue of title, to question the jurisdiction of


the MeTC. She claims that respondents have no right to institute the action for
unlawful detainer because they did not validly acquire the property in view of
the prohibition under P.D. No. 1517 against her dispossession or the transfer
of the property without first offering it for sale to her. She insists that such
issue of title prevents the MeTC from acquiring jurisdiction over the case; it
should have deferred to the jurisdiction of the RTC where there is a pending
case for annulment of the title of respondents.

As a rule, the nature of a complaint for unlawful detainer and the jurisdiction of
a court over it are not altered by the mere claim of the defendant of title to the
property subject matter of the ejectment case. 56 Even a pending action
involving title to the property which the defendant may have instituted in
another court will not abate or suspend the summary proceedings for unlawful
detainer.57 The underlying reason for this rule is to prevent the defendant from
trifling with the summary nature of the case by the simple expedient of
asserting ownership over the disputed property. 58

Respondents cite Solanda Enterprises, Inc. v. Court of Appeals. 59 It involves


an action for ejectment filed by the vendee of a parcel of land against the
vendor's lessees on the property. In turn, the lessees filed an action for
annulment of the sale of the property between the vendor and vendee on the
ground that the sale violated their [lessees'] preemptive rights over the
property as guaranteed under P.D. No. 1517. The Court held that the action
for ejectment may proceed independently of the action for annulment, citing
the following reason:

xxx the consistent case law is that ejectment suits deal only with
the issue of physical possession. The pendency of an action for
the annulment of the sale and the reconveyance of the disputed
property may not be successfully pleaded in abatement of an
action for ejectment. Private respondent's alleged right of
possession is conditioned on his right to acquire ownership over
the land. His right of the possession is, at best, only inchoate. In
any event, the private respondent's expectation of being granted
the preemptive right to purchase the property neither establishes
his right to possess nor justifies the dismissal of the ejectment
case against him. [Emphasis added.]

It is important to bear in mind that in Solanda, it was conclusively found that


the property in dispute was not within the coverage of P.D. No. 1517 as
defined under Proclamation No. 1967 60 and certified to by the Housing and
Land Use Regulatory Board (HLURB).
But then, there have been two rare cases in which the Court allowed the
suspension of an action for unlawful detainer to make way for an action for
annulment of title.

In Vda. de Legaspi v. Avendaño,61 the Court suspended the enforcement of a


writ of demolition rendered in an ejectment case until after a case for
annulment of title involving the property to be demolished was decided. The
Court ratiocinated:

x x x. Where the action, therefore, is one of illegal detainer, as


distinguished from one of forcible entry, and the right of the
plaintiff to recover the premises is seriously placed in issue in a
proper judicial proceeding, it is more equitable and just and less
productive of confusion and disturbance of physical possession,
with all its concomitant inconvenience and expenses. For the
Court in which the issue of legal possession, whether involving
ownership or not, is brought to restrain, should a petition for
preliminary injunction be filed with it, the effects of any order or
decision in the unlawful detainer case in order to await the final
judgment in the more substantive case involving legal
possession or ownership. It is only where there has been
forcible entry that as a matter of public policy the right to
physical possession should be immediately set at rest in favor of
the prior possession regardless of the fact that the other party
might ultimately be found to have superior claim to the premises
involved, thereby to discourage any attempt to recover
possession thru force, strategy or stealth and without resorting
to the courts. (Emphasis supplied)cralawlibrary

More in point is Dulay v. Tabago,62 in which the Court sustained the RTC in
suspending the eviction of Spouses Tabago from the property of Spouses
Dulay in view of the issuance of Presidential Decree No. 2016, which placed
the disputed property under the coverage of P.D. No. 1517 and prohibited the
eviction of the tenants therein. As there was no dispute over the status of
Spouses Tabago as tenants on the property since 1959, or over the status of
the property as an urban land reform area, the Court therein held:

Sec. 2 of P.D. No. 2016, which was promulgated to forestall


violations of P.D. No. 1517, provides that "No tenant or occupant
family, residing for ten years or more, reckoned from the date of
issuance of Presidential Decree No. 1517 [June 11, 1978]
otherwise known as the Urban Land Reform Law, in land
proclaimed as Areas of Priority Development . . . shall be
evicted from the land or otherwise dispossessed" (emphasis
added). Considering that respondents have been occupants of
the lot in question since 1959 and in view of the subsequent
classification of the said land as an APD, petitioners' action for
ejectment cannot prosper.
To be entitled to the beneficence of P.D. No. 1517, a party must provide prima
facie evidence of the following facts: a) that the property being leased falls
within an Area for Priority Development and Urban Land Reform Zone; 63 b)
that the party is a tenant on said property as defined under Section 3 (f) 64 of
P.D. No. 1517;65 c) that the party built a house on said property; 66 and d) that
the party has been residing on the property continuously for the last ten (10)
years or more, reckoned from 1968.67

The question is, did petitioner establish the foregoing requisites as to avail
herself of the "suspensive" effect of P.D. No. 1517 as in Sps. Dulay and Vda.
de Legaspi ?cra lawlibrary

It is noted that the MeTC rejected the claim of petitioner to preferential rights
over the property, but petitioner objected on the ground that the MeTC had no
jurisdiction to resolve such subject matter.

Petitioner's objection was frivolous. Under Section 33 68 of Batas Pambansa


Blg. 129, the MeTC is conditionally vested with authority to resolve the
question of ownership raised as an incident in the case, the determination of
which is necessary for a complete adjudication of the issue of possession. 69 In
the present case, the MeTC's foray into the issue of whether under P.D. No.
1517, petitioner has preferential rights to the purchase and occupation of Unit
1682 as against respondents' rights was necessary to resolve the issue of
material possession.

The provisional ruling of the MeTC on said issue is that P.D. No. 1517 does
not apply to the case because there was no sale between LKTSI and
respondents but a mere distribution of liquidating dividends on account of the
dissolution of LKTSI.70

The share of each stockholder in the remaining assets of the corporation upon
liquidation, after the payment of all corporate debts and liabilities, is what is
known as liquidating dividend.71 In its interpretation of recent tax laws, the
Bureau of Internal Revenue viewed the distribution of liquidating dividends not
as a sale of asset by the liquidating corporation to its stockholder but as a sale
of shares by the stockholder to the corporation or the surrender of the
stockholder's interest in the corporation, in place of which said stockholder
receives property or money from the corporation about to be
dissolved.72 Thus, on the part of the stockholder, any gain or loss is subject to
tax, while on the part of the liquidating corporation, no tax is imposed on its
receipt of the shares surrendered by the stockholder or transfer of assets to
said stockholder because said transaction is not treated as a sale. 73

Preliminarily, therefore, the Court agrees with the view of the MeTC that the
April 1, 2004 assignment of Unit 1682 is not covered by the prohibition under
P.D. No. 1517. It should be emphasized that such interim ruling is without
prejudice to how the complaint for annulment of the April 1, 2004 deed of
assignment is resolved by the RTC.
In addition to the foregoing reason, the Court also finds no prima
facie evidence that petitioner qualifies as a tenant under P.D. No. 1517.

Respondents presented a Land Transaction Certificate issued by the HLURB,


stating that Unit 1682 is outside any Area for Priority
74
Development.  However, Proclamation No. 1967 identifies in Appendix
"J"75 thereof 244 sites in Metropolitan Manila that fall within the coverage of
P.D. No. 1517. In the West Sector (Manila), one identified site is "8. Sta. Clara
to Blumentritt." Thus, it would appear that Unit 1682, which is located in
Blumentritt Street, Sta. Cruz, Manila, is within the scope of P.D. No.
1517,76 the HLURB Certification to the contrary notwithstanding.

Moreover, petitioner had a month-to-month lease contract with LKTSI on Unit


1682, which expired on April 30, 2004. Thus, up to that time, petitioner was a
rightful occupant of the property as defined under Sec. 3 of P.D. No. 1517.

However, other than her bare claim that she owns the structure on Unit 1682
because she allegedly rebuilt it after it was burned down, petitioner offered no
concrete evidence of when the original structure was burned down and when
she rebuilt it. She presented no detail on how she spent for the construction of
the structure, or proof that LKTSI allowed her to claim ownership thereof. On
the other hand, it was respondents who presented Tax Declaration No. 00182
which indicates that they are the registered owners of the improvements,
including Unit 1682, on the land covered by TCT No. 264835.

Furthermore, except for her empty allegation - - which respondents dispute -


- 77 that she has been occupying Unit 1682 for more than thirty (30) years,
petitioner presented no concrete evidence of the exact period of her
occupation, even when she could have easily produced receipts of past rental
payments similar to the receipt78 she easily presented for her March 2004
rental payment. Such unexplained omission prevents an adjudication on
whether petitioner's period of occupation qualifies her to exercise the right of
first refusal under P.D. No. 1517.79

Therefore, unlike in Sps. Dulay or Guardacasa de Legaspi, there is no prima


facie showing in this case that petitioner is protected under P.D. No. 1517
from dispossession of Unit 1682, or that she has the right of first refusal in the
sale of said property. Petitioner, therefore, cannot invoke P.D. No. 1517 in
abatement of the complaint for unlawful detainer.

Another matter raised by petitioner relating to the jurisdiction of the MeTC is


the personality of respondents to give notice to vacate and to file an ejectment
case. The Court need not belabor the point for it is well-settled that, as
vendees of the property, respondents were placed in the shoes of the original
lessor LKTSI and vested with the right to evict petitioner as the lessee from
the premises.80 Whether the transfer of the property to respondents was valid
is of no moment, for all that is to be resolved in the ejectment case is whether
the latter are entitled to the material possession of the property. 81
All told, the Court sustains the CA in affirming the ruling of the RTC that the
MeTC correctly exercised jurisdiction over the complaint for unlawful detainer.

On the issue of the correctness of the judgment of eviction

Petitioner poses no serious challenge to the concurrent findings of the MeTC,


RTC and CA that her right to possession of Unit 1682 has expired; that her
continued possession thereof unlawfully deprives respondents of the
enjoyment of the property; and that, therefore, she must now peacefully
surrender possession thereof to respondents. Her remaining defense is that,
under the rent control laws, respondents cannot eject her because she has
been religiously paying her rent.

Republic Act No. 9161,82 otherwise known as the "Rental Reform Act of


2002," was the rent control law in force at the time the complaint for unlawful
detainer was filed. Sec. 7(e) thereof allows for judicial ejectment of a lessee
on the ground of expiration of the period of the lease contract. As already
discussed, the month-to-month lease contract of petitioner expired on April
30, 2004 and was not renewed by respondents; hence, the latter acted well
within their rights to file a complaint for unlawful detainer. 83

Petitioner has also questioned the award of reasonable rent of P15,000.00.


Trial courts are authorized to fix the reasonable value for the continued use
and occupancy of the leased premises after the termination of the lease
contract; and they are not bound by the stipulated rental in the contract of
lease, since it is equally settled that upon termination or expiration of said
contract, the rental stipulated therein may no longer be the reasonable value
for the use and occupation of the premises as a result or by reason of the
change or rise in values.84 As to what amount would constitute a reasonable
rent of Unit 1682, the same is a question of fact on which the determination of
the CA binds the Court, unless the latter finds reason to reverse it. 85 In the
present case, the CA reduced the award of reasonable rent from P25,000.00
to P15,000.00 based on the finding that such amount represents the
reasonable amount of lost opportunity income respondents would have
derived from the conversion of Unit 1682 into a San Miguel Food
shop.86 Petitioner has not adduced evidence in refutation of the factual
findings of the CA.

Considering that no error has been committed by the CA in its August 31,
2006 Decision and January 15, 2007 Resolution, the Court affirms the same.

On the issue of whether the temporary restraining order should be lifted

The Court finds respondents' September 12, 2007 Manifestation and Motion,
January 23, 2008 Reiterative Motion to Lift the Temporary Restraining Order
and May 13, 2008 Manifestation to be well-taken. It notes petitioner's January
28, 2008 Comment and March 9, 2008 Manifestation and Compliance, and
finds unsatisfactory the explanation put forth therein why she failed to deposit
to the RTC unpaid monthly rentals in the amount of P10,932.60 from date of
receipt of the MeTC Decision. It should be emphasized that while petitioner
may have questioned before the RTC the computation of back rentals, the
same cannot muddle the July 9, 2007 and March 12, 2008 Resolution of the
Court which are rather explicit in the amount of unpaid monthly rentals she is
required to pay. The Court further notes that petitioner utterly failed to show
proof of compliance with the foregoing resolutions.

WHEREFORE, the petition is DENIED. The temporary restraining order


issued by the court is LIFTED and SET ASIDE.

VICTORIANO M. ENCARNACION, Petitioner, v. NIEVES
AMIGO, Respondent.

DECISION

YNARES-SANTIAGO, J.:

This Petition for Review assails the June 30, 2005 Decision1 of the Court of
Appeals in CA-G.R. SP No. 73857, ordering the remand of Civil Case No. Br.
20-1194 to the Regional Trial Court of Cauayan, Isabela, Branch 20, for
further proceedings.

The antecedent facts are as follows:

Petitioner Victoriano M. Encarnacion is the registered owner of Lot No. 2121-


B-1, consisting of 100 square meters and covered by TCT No. T-256650; and
Lot No. 2121-B-2 consisting of 607 square meters with TCT No. T-256651,
located at District 1, National Hi-way, Cauayan, Isabela. Said two lots
originally form part of Lot No. 2121, a single 707 square meter track of land
owned by Rogelio Valiente who sold the same to Nicasio Mallapitan on
January 18, 1982. On March 21, 1985, Mallapitan sold the land to Victoriano
Magpantay. After the death of the latter in 1992, his widow, Anita N.
Magpantay executed an Affidavit of Waiver2 on April 11, 1995 waving her
right over the property in favor of her son-in-law, herein petitioner, Victoriano
Encarnacion. Thereafter, the latter caused the subdivision of the land into two
lots3 and the issuance of titles in his name on July 18, 1996.4

Respondent Nieves Amigo allegedly entered the premises and took


possession of a portion of the property sometime in 1985 without the
permission of the then owner, Victoriano Magpantay. Said occupation by
respondent continued even after TCT Nos. T-256650 and T-256651 were
issue to petitioner.

Consequently, petitioner, through his lawyer sent a letter5 dated Febuary 1,


2001 demanding that the respondent vacate the subject property. As
evidenced by the registry return receipt, the demand letter was delivered by
registered mail to the respondent on February 12, 2001. Notwithstanding
receipt of the demand letter, respondent still refused to vacate the subject
property. Thereafter, on March 2, 2001, petitioner filed a complaint6 for
ejectment, damages with injunction and prayer for restraining order with the
Municipal Trial Court in Cities of Isabela which was docketed as CV-01-030.
In his Answer, respondent alleged that he has been in actual possession and
occupation of a portion of the subject land since 1968 and that the issuance of
Free Patent and titles in the name of petitioner was tainted with irregularities.7

On October 24, 2001, the Municipal Trial Court in Cities rendered judgment,
which reads:

WHERE[FO]RE, there being a preponderance of evidence, a


JUDGMENT is hereby rendered in favor of the plaintiff
VICTORIANO M. ENCARNACION and against the defendant
NIEVES AMIGOE (sic) as follows:

a) ORDERING the defendant to vacate the portion of the parcels


of land described in Transfer Certificates of Title Nos. T-256650
and T-256651 he is now occupying and surrender it to the
plaintiff;

b) ORDERING the defendant to pay the plaintiff the sum of FIVE


THOUSAND PESOS (P5,000) as attorney's fees, and

c) ORDERING the defendant to pay rentals equivalent [to]


P500.00 per month from February, 2001 until the portion of the
land occupied by him is surrendered to the plaintiff.

COSTS against the defendant.

SO ORDERED.8

On appeal, the Regional Trial Court of Cauayan, Isabela, Branch 20, ruled as
follows:

WHEREFORE, judgment is hereby rendered dismissing the


case on the ground that as the Municipal Court had no
jurisdiction over the case, this Court acquired no appellate
jurisdiction thereof. Costs against plaintiff-appellee.

SO ORDERED.9

Aggrieved, petitioner filed a Petition for Review 10 under Rule 42 of the Rules


of Court before the Court of Appeals which promulgated the assailed Decision
remanding the case to the Regional Trial Court. The dispositive portion
thereof reads:
WHEREFORE, premises considered, this case is hereby
REMANDED to Branch 20, Regional Trial Court of Cauayan,
Isabela for further proceedings.

No costs.

SO ORDERED.11

Hence the present petition raising the sole issue:

[WHETHER] THE COURT OF APPEALS ERRED IN HOLDING


THAT THE PROPER ACTION IN THIS CASE IS ACCION
PUBLICIANA AND NOT UNLAWFUL DETAINER AS
DETERMINED BY THE ALLEGATIONS IN THE COMPLAINT
FILED BY PETITIONER.12

The petition lacks merit.

In this jurisdiction, the three kinds of actions for the recovery of possession of
real property are:

1. Accion interdictal, or an ejectment proceeding which may be


either that for forcible entry (detentacion) or unlawful detainer
(desahucio), which is a summary action for recovery of physical
possession where the dispossession has not lasted for more
than one year, and should be brought in the proper inferior
court;

2. Accion publiciana or the plenary action for the recovery of the


real right of possession, which should be brought in the proper
Regional Trial Court when the dispossession has lasted for
more than one year; andcralawlibrary

3. Accion reinvindicatoria or accion de reivindicacion, which is


an action for the recovery of ownership which must be brought
in the proper Regional Trial Court.13

Based on the foregoing distinctions, the material element that determines the
proper action to be filed for the recovery of the possession of the property in
this case is the length of time of dispossession. Under the Rules of Court, the
remedies of forcible entry and unlawful detainer are granted to a person
deprived of the possession of any land or building by force, intimidation,
threat, strategy, or stealth, or a lessor, vendor, vendee, or other person
against whom the possession of any land or building is unlawfully withheld
after the expiration or termination of the right to hold possession by virtue of
any contract, express or implied, or the legal representatives or assigns of any
such lessor, vendor, vendee, or other person. These remedies afford the
person deprived of the possession to file at any time within one year after
such unlawful deprivation or withholding of possession, an action in the proper
Municipal Trial Court against the person or persons unlawfully withholding or
depriving of possession, or any person or persons claiming under them, for
the restitution of such possession, together with damages and costs.14 Thus,
if the dispossession has not lasted for more than one year, an ejectment
proceeding is proper and the inferior court acquires jurisdiction. On the other
hand, if the dispossession lasted for more than one year, the proper action to
be filed is an accion publiciana which should be brought to the proper
Regional Trial Court.

After a careful evaluation of the evidence on record of this case, we find that
the Court of Appeals committed no reversible error in holding that the proper
action in this case is accion publiciana; and in ordering the remand of the
case to the Regional Trial Court of Cauayan, Isabela, Branch 20, for further
proceedings.

Well settled is the rule that jurisdiction of the court over the subject matter of
the action is determined by the allegations of the complaint at the time of its
filing, irrespective of whether or not the plaintiff is entitled to recover upon all
or some of the claims asserted therein. What determines the jurisdiction of the
court is the nature of the action pleaded as appearing from the allegations in
the complaint. The averments therein and the character of the relief sought
are the ones to be consulted.15 On its face, the complaint must show enough
ground for the court to assume jurisdiction without resort to parol testimony.16

From the allegations in the complaint, it appears that the petitioner became
the owner of the property on April 11, 1995 by virtue of the waiver of rights
executed by his mother-in-law. He filed the complaint for ejectment on March
2, 2001 after his February 1, 2001 letter to the respondent demanding that the
latter vacate the premises remained unheeded. While it is true that the
demand letter was received by the respondent on February 12, 2001, thereby
making the filing of the complaint for ejectment fall within the requisite one
year from last demand for complaints for unlawful detainer, it is also equally
true that petitioner became the owner of the subject lot in 1995 and has been
since that time deprived possession of a portion thereof. From the date of the
petitioner's dispossession in 1995 up to his filing of his complaint for ejectment
in 2001, almost 6 years have elapsed. The length of time that the petitioner
was dispossessed of his property made his cause of action beyond the ambit
of an accion interdictal and effectively made it one for accion publiciana. After
the lapse of the one-year period, the suit must be commenced in the Regional
Trial Court via an accion publiciana which is a suit for recovery of the right to
possess. It is an ordinary civil proceeding to determine the better right of
possession of realty independently of title. It also refers to an ejectment suit
filed after the expiration of one year from the accrual of the cause of action or
from the unlawful withholding of possession of the realty.17
Previously, we have held that if the owner of the land knew that another
person was occupying his property way back in 1977 but the said owner only
filed the complaint for ejectment in 1995, the proper action would be one
for accion publiciana and not one under the summary procedure on
ejectment. As explained by the Court:

We agree with the Court of Appeals that if petitioners are indeed


the owners of the subject lot and were unlawfully deprived of
their right of possession, they should present their claim before
the regional trial court in an accion publiciana or an accion
reivindicatoria, and not before the metropolitan trial court in a
summary proceeding for unlawful detainer or forcible entry. For
even if one is the owner of the property, the possession thereof
cannot be wrested from another who had been in physical or
material possession of the same for more than one year by
resorting to a summary action for ejectment.18

Hence, we agree with the Court of Appeals when it declared that:

The respondent's actual entry on the land of the petitioner was


in 1985 but it was only on March 2, 2001 or sixteen years after,
when petitioner filed his ejectment case. The respondent should
have filed an accion publiciana case which is under the
jurisdiction of the RTC.

However, the RTC should have not dismissed the case.

Section 8, Rule 40 of the Rules of Court provides:

SECTION 8. Appeal from orders dismissing case


without trial; lack of jurisdiction. - If an appeal is
taken from an order of the lower court dismissing
the case without a trial on the merits, the Regional
Trial Court may affirm or reverse it, as the case
may be. In case of affirmance and the ground of
dismissal is lack of jurisdiction over the subject
matter, the Regional Trial Court, if it has
jurisdiction thereover, shall try the case on the
merits as if the case was originally filed with it. In
case of reversal, the case shall be remanded for
further proceedings.
If the case was tried on the merits by the lower
court without jurisdiction over the subject matter,
the Regional Trial Court on appeal shall not
dismiss the case if it has original jurisdiction
thereof, but shall decide the case in accordance
with the preceding section, without prejudice to the
admission of amended pleadings and additional
evidence in the interest of justice.

The RTC should have taken cognizance of the case. If the


case is tried on the merits by the Municipal Court without
jurisdiction over the subject matter, the RTC on appeal may
no longer dismiss the case if it has original jurisdiction
thereof. Moreover, the RTC shall no longer try the case on
the merits, but shall decide the case on the basis of the
evidence presented in the lower court, without prejudice to
the admission of the amended pleadings and additional
evidence in the interest of justice.19

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals


dated June 30, 2005 in CA-G.R. SP No. 73857 ordering the remand of Civil
Case No. Br. 20-1194 to the Regional Trial Court of Cauayan, Isabela, Branch
20, for further proceedings, is AFFIRMED.

SPS. ALFREDO MENDOZA and ROSARIO F. MENDOZA, Petitioners,


vs.
MARIA CORONEL, represented by JUANITO CORONEL, Respondent.

DECISION

PUNO, J.:

On appeal are the Court of Appeals’ (CA’s) May 30, 2002 Decision 1 in CA-
G.R. SP No. 67157 and November 12, 2002 Resolution, 2 reversing the
September 17, 2001 Decision3 of the Regional Trial Court (RTC) of Malolos,
Bulacan in Civil Case No. 458-M-2001. The RTC of Malolos ruled that the
Municipal Trial Court (MTC) of Hagonoy, Bulacan, before which respondent
filed the ejectment case against petitioners, had no jurisdiction to decide the
case for failure of respondent to implead her co-owners of the disputed
property, the latter being indispensable parties to the ejectment suit.

The facts are as follows:


Respondent Maria Coronel is one of the co-owners of Lots 3250 and 3251
located at Sagrada Familia, Hagonoy, Bulacan. Petitioners, spouses Alfredo
and Rosario Mendoza, occupied said lots upon tolerance of respondent and
her co-owners without paying any rent. When respondent demanded that
petitioners vacate the premises, the latter refused. Thus, on December 27,
2000, respondent filed a case before the MTC of Hagonoy, Bulacan for
unlawful detainer against petitioners. The MTC ruled in favor of respondent,
ordering petitioners to vacate the disputed lots. The dispositive portion of its
May 29, 2001 Decision reads as follows:

WHEREFORE, premises considered, judgment is hereby rendered ordering


the defendants and all those claiming rights under them:

(1) to vacate the subject premises (lots 3250 and 3251) and to surrender
possession of the same to plaintiff[;]

(2) to pay plaintiff attorney’s fees and litigation expenses in the amount of
₱10,000.00 and to pay a monthly rental of ₱500 from receipt of this decision
until they shall have vacated the subject premises; and

(3) to pay the costs of suit.

SO ORDERED.4

Petitioners appealed to the RTC of Malolos, Bulacan which ruled in their


favor. It annulled and set aside the appealed decision for want of jurisdiction
of the MTC. It held that the co-owners of the subject lot should have been
impleaded as indispensable parties.

On appeal to the CA, respondent was successful as the appellate court


reversed and set aside the ruling of the RTC and revived the decision of the
MTC dated May 29, 2001. Petitioners’ Motion for Reconsideration was
denied.

Hence, this appeal.5

Petitioners assign the following errors:

I. The lower court erred in ruling that a co-owner can bring an action in
ejectment without impleading his co-owners, relying on an "Errata for pages
38-39 of Volume 280 SCRA," which appears to alter the original tenor of the
ruling in Arcelona vs. CA that co-owners are indispensable parties.

II. The lower court erred in not taking into account that the complaint was filed
by an attorney-in-fact authorized by only one of the co-owners to file the
ejectment suit.

III. The lower court erred in allowing the petition for review despite the fact
that the certification against forum-shopping was executed by an attorney-in-
fact, in violation of the requirement that parties must personally sign the same.
The main issue in the case at bar is whether any of the co-owners may bring
an action in ejectment.

The CA is correct in overruling the RTC. The latter court held that in Arcelona
v. Court of Appeals,6 we held that a co-owner cannot maintain an action in
ejectment without joining all the other co-owners, the latter being
indispensable parties.

In reversing the ruling of the RTC, the CA pointed out that the RTC relied on
the uncorrected Arcelona decision. The RTC overlooked the fact that the
decision has been corrected by an "ERRATA for pages 38-39" appearing on
the second leaf of volume 280 of the SCRA. Thus, the CA held:

Formerly, Article 487 of the old Civil Code provided that "any one of the co-
owners may bring an action in ejectment." It was subsequently held that a co-
owner could not maintain an action in ejectment without joining all the other
co-owners.

The foregoing statement was deleted and replaced with the following:

In the past, a co-owner could not even maintain an action in ejectment without
joining all the other co-owners. . .

While Article 487 of the Civil Code now provides that "any one of the co-
owners may bring an action in ejectment," former Chief Justice Moran also
stressed that all of them are necessary and proper parties . . .

We reiterate the Arcelona ruling that the controlling law is Article 487 of the


Civil Code which categorically states:

Any one of the co-owners may bring an action in ejectment. (n)

Article 487 is a departure from the rule laid down in the case of Palarca v.
Baguisi7 which held that an action for ejectment must be brought by all the
co-owners. As explained by Tolentino, the law now allows a co-owner to bring
an action for ejectment, which covers all kinds of actions for the recovery of
possession, including forcible entry and unlawful detainer, without the
necessity of joining all the other co-owners as co-plaintiffs, because the suit is
deemed to be instituted for the benefit of all. 8

We also reject petitioners’ second and third assignment of errors. Petitioners


claim that Juanito Coronel, attorney-in-fact of Maria Coronel, one of the co-
owners of the lots in dispute is not authorized to file the ejectment suit. They
insist that he should have obtained the authority and consent of all the co-
owners. But since Article 487 of the Civil Code authorizes any one of the co-
owners to bring an action for ejectment and the suit is deemed to be instituted
for the benefit of all, without the other co-owners actually giving consent to the
suit, it follows that an attorney-in-fact of the plaintiff co-owner does not need
authority from all the co-owners. He needs authority only from the co-owner
instituting the ejectment suit.
We likewise hold that the execution of the certification against forum shopping
by the attorney-in-fact in the case at bar is not a violation of the requirement
that the parties must personally sign the same. The attorney-in-fact, who has
authority to file, and who actually filed the complaint as the representative of
the plaintiff co-owner, pursuant to a Special Power of Attorney, is a party to
the ejectment suit. In fact, Section 1, Rule 70 of the Rules of Court 9 includes
the representative of the owner in an ejectment suit as one of the parties
authorized to institute the proceedings.

IN VIEW WHEREOF, petitioners’ appeal is DENIED. The Court of Appeals’


May 30, 2002 Decision in CA-G.R. SP No. 67157 and November 12, 2002
Resolution, reversing the September 17, 2001 Decision of the Regional Trial
Court of Malolos, Bulacan in Civil Case No. 458-M-2001 and reviving the May
29, 2001 Decision of the Municipal Trial Court of Hagonoy, Bulacan in Civil
Case No. 1308, are AFFIRMED.

COLITO T. PAJUYO, petitioner,
vs.
COURT OF APPEALS and EDDIE GUEVARRA, respondents.

DECISION

CARPIO, J.:

The Case

Before us is a petition for review 1 of the 21 June 2000 Decision 2 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 decision 3 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 ₱400 to a certain


Pedro Perez for the rights over a 250-square meter lot in Barrio Payatas,
Quezon City. Pajuyo then constructed a house made of light materials on the
lot. Pajuyo and his family lived in the house from 1979 to 7 December 1985.

On 8 December 1985, Pajuyo and private respondent Eddie Guevarra


("Guevarra") executed a Kasunduan or agreement. Pajuyo, as owner of the
house, allowed Guevarra to live in the house for free provided Guevarra
would maintain the cleanliness and orderliness of the house. Guevarra
promised that he would voluntarily vacate the premises on Pajuyo’s demand.

In September 1994, Pajuyo informed Guevarra of his need of the house and
demanded that Guevarra vacate the house. Guevarra refused.
Pajuyo filed an ejectment case against Guevarra with the Metropolitan Trial
Court of Quezon City, Branch 31 ("MTC").

In his Answer, Guevarra claimed that Pajuyo had no valid title or right of
possession over the lot where the house stands because the lot is within the
150 hectares set aside by Proclamation No. 137 for socialized housing.
Guevarra pointed out that from December 1985 to September 1994, Pajuyo
did not show up or communicate with him. Guevarra insisted that neither he
nor Pajuyo has valid title to the lot.

On 15 December 1995, the MTC rendered its decision in favor of Pajuyo. The
dispositive portion of the MTC decision reads:

WHEREFORE, premises considered, judgment is hereby rendered for the


plaintiff and against defendant, ordering the latter to:

A) vacate the house and lot occupied by the defendant or any other person or
persons claiming any right under him;

B) pay unto plaintiff the sum of THREE HUNDRED PESOS (₱300.00)


monthly as reasonable compensation for the use of the premises starting from
the last demand;

C) pay plaintiff the sum of ₱3,000.00 as and by way of attorney’s fees; and

D) pay the cost of suit.

SO ORDERED.7

Aggrieved, Guevarra appealed to the Regional Trial Court of Quezon City,


Branch 81 ("RTC").

On 11 November 1996, the RTC affirmed the MTC decision. The dispositive
portion of the RTC decision reads:

WHEREFORE, premises considered, the Court finds no reversible error in the


decision appealed from, being in accord with the law and evidence presented,
and the same is hereby affirmed en toto.

SO ORDERED.8

Guevarra received the RTC decision on 29 November 1996. Guevarra had


only until 14 December 1996 to file his appeal with the Court of Appeals.
Instead of filing his appeal with the Court of Appeals, Guevarra filed with the
Supreme Court a "Motion for Extension of Time to File Appeal by Certiorari
Based on Rule 42" ("motion for extension"). Guevarra theorized that his
appeal raised pure questions of law. The Receiving Clerk of the Supreme
Court received the motion for extension on 13 December 1996 or one day
before the right to appeal expired.
On 3 January 1997, Guevarra filed his petition for review with the Supreme
Court.

On 8 January 1997, the First Division of the Supreme Court issued a


Resolution9 referring the motion for extension to the Court of Appeals which
has concurrent jurisdiction over the case. The case presented no special and
important matter for the Supreme Court to take cognizance of at the first
instance.

On 28 January 1997, the Thirteenth Division of the Court of Appeals issued a


Resolution10 granting the motion for extension conditioned on the timeliness of
the filing of the motion.

On 27 February 1997, the Court of Appeals ordered Pajuyo to comment on


Guevara’s petition for review. On 11 April 1997, Pajuyo filed his Comment.

On 21 June 2000, the Court of Appeals issued its decision reversing the RTC
decision. The dispositive portion of the decision reads:

WHEREFORE, premises considered, the assailed Decision of the court a quo


in Civil Case No. Q-96-26943 is REVERSED and SET ASIDE; and it is
hereby declared that the ejectment case filed against defendant-appellant is
without factual and legal basis.

SO ORDERED.11

Pajuyo filed a motion for reconsideration of the decision. Pajuyo pointed out
that the Court of Appeals should have dismissed outright Guevarra’s petition
for review because it was filed out of time. Moreover, it was Guevarra’s
counsel and not Guevarra who signed the certification against forum-
shopping.

On 14 December 2000, the Court of Appeals issued a resolution denying


Pajuyo’s motion for reconsideration. The dispositive portion of the resolution
reads:

WHEREFORE, for lack of merit, the motion for reconsideration is


hereby DENIED. No costs.

SO ORDERED.12

The Ruling of the MTC

The MTC ruled that the subject of the agreement between Pajuyo and
Guevarra is the house and not the lot. Pajuyo is the owner of the house, and
he allowed Guevarra to use the house only by tolerance. Thus, Guevarra’s
refusal to vacate the house on Pajuyo’s demand made Guevarra’s continued
possession of the house illegal.

The Ruling of the RTC


The RTC upheld the Kasunduan, which established the landlord and tenant
relationship between Pajuyo and Guevarra. The terms of
the Kasunduan bound Guevarra to return possession of the house on
demand.

The RTC rejected Guevarra’s claim of a better right under Proclamation No.
137, the Revised National Government Center Housing Project Code of
Policies and other pertinent laws. In an ejectment suit, the RTC has no power
to decide Guevarra’s rights under these laws. The RTC declared that in an
ejectment case, the only issue for resolution is material or physical
possession, not ownership.

The Ruling of the Court of Appeals

The Court of Appeals declared that Pajuyo and Guevarra are squatters.
Pajuyo and Guevarra illegally occupied the contested lot which the
government owned.

Perez, the person from whom Pajuyo acquired his rights, was also a squatter.
Perez had no right or title over the lot because it is public land. The
assignment of rights between Perez and Pajuyo, and the Kasunduan between
Pajuyo and Guevarra, did not have any legal effect. Pajuyo and Guevarra are
in pari delicto or in equal fault. The court will leave them where they are.

The Court of Appeals reversed the MTC and RTC rulings, which held that
the Kasunduan between Pajuyo and Guevarra created a legal tie akin to that
of a landlord and tenant relationship. The Court of Appeals ruled that
the Kasunduan is not a lease contract but a commodatum because the
agreement is not for a price certain.

Since Pajuyo admitted that he resurfaced only in 1994 to claim the property,
the appellate court held that Guevarra has a better right over the property
under Proclamation No. 137. President Corazon C. Aquino ("President
Aquino") issued Proclamation No. 137 on 7 September 1987. At that time,
Guevarra was in physical possession of the property. Under Article VI of the
Code of Policies Beneficiary Selection and Disposition of Homelots and
Structures in the National Housing Project ("the Code"), the actual occupant
or caretaker of the lot shall have first priority as beneficiary of the project. The
Court of Appeals concluded that Guevarra is first in the hierarchy of priority.

In denying Pajuyo’s motion for reconsideration, the appellate court debunked


Pajuyo’s claim that Guevarra filed his motion for extension beyond the period
to appeal.

The Court of Appeals pointed out that Guevarra’s motion for extension filed
before the Supreme Court was stamped "13 December 1996 at 4:09 PM" by
the Supreme Court’s Receiving Clerk. The Court of Appeals concluded that
the motion for extension bore a date, contrary to Pajuyo’s claim that the
motion for extension was undated. Guevarra filed the motion for extension on
time on 13 December 1996 since he filed the motion one day before the
expiration of the reglementary period on 14 December 1996. Thus, the motion
for extension properly complied with the condition imposed by the Court of
Appeals in its 28 January 1997 Resolution. The Court of Appeals explained
that the thirty-day extension to file the petition for review was deemed granted
because of such compliance.

The Court of Appeals rejected Pajuyo’s argument that the appellate court
should have dismissed the petition for review because it was Guevarra’s
counsel and not Guevarra who signed the certification against forum-
shopping. The Court of Appeals pointed out that Pajuyo did not raise this
issue in his Comment. The Court of Appeals held that Pajuyo could not now
seek the dismissal of the case after he had extensively argued on the merits
of the case. This technicality, the appellate court opined, was clearly an
afterthought.

The Issues

Pajuyo raises the following issues for resolution:

WHETHER THE COURT OF APPEALS ERRED OR ABUSED ITS


AUTHORITY AND DISCRETION TANTAMOUNT TO LACK OF
JURISDICTION:

1) in GRANTING, instead of denying, Private Respondent’s Motion for an


Extension of thirty days to file petition for review at the time when there was
no more period to extend as the decision of the Regional Trial Court had
already become final and executory.

2) in giving due course, instead of dismissing, private respondent’s Petition for


Review even though the certification against forum-shopping was signed only
by counsel instead of by petitioner himself.

3) in ruling that the Kasunduan voluntarily entered into by the parties was in


fact a commodatum, instead of a Contract of Lease as found by the
Metropolitan Trial Court and in holding that "the ejectment case filed against
defendant-appellant is without legal and factual basis".

4) in reversing and setting aside the Decision of the Regional Trial Court in
Civil Case No. Q-96-26943 and in holding that the parties are in pari
delicto being both squatters, therefore, illegal occupants of the contested
parcel of land.

5) in deciding the unlawful detainer case based on the so-called Code of


Policies of the National Government Center Housing Project instead of
deciding the same under the Kasunduan voluntarily executed by the parties,
the terms and conditions of which are the laws between themselves. 13

The Ruling of the Court


The procedural issues Pajuyo is raising are baseless. However, we find merit
in the substantive issues Pajuyo is submitting for resolution.

Procedural Issues

Pajuyo insists that the Court of Appeals should have dismissed outright
Guevarra’s petition for review because the RTC decision had already become
final and executory when the appellate court acted on Guevarra’s motion for
extension to file the petition. Pajuyo points out that Guevarra had only one
day before the expiry of his period to appeal the RTC decision. Instead of
filing the petition for review with the Court of Appeals, Guevarra filed with this
Court an undated motion for extension of 30 days to file a petition for review.
This Court merely referred the motion to the Court of Appeals. Pajuyo
believes that the filing of the motion for extension with this Court did not toll
the running of the period to perfect the appeal. Hence, when the Court of
Appeals received the motion, the period to appeal had already expired.

We are not persuaded.

Decisions of the regional trial courts in the exercise of their appellate


jurisdiction are appealable to the Court of Appeals by petition for review in
cases involving questions of fact or mixed questions of fact and
law.14 Decisions of the regional trial courts involving pure questions of law are
appealable directly to this Court by petition for review. 15 These modes of
appeal are now embodied in Section 2, Rule 41 of the 1997 Rules of Civil
Procedure.

Guevarra believed that his appeal of the RTC decision involved only
questions of law. Guevarra thus filed his motion for extension to file petition
for review before this Court on 14 December 1996. On 3 January 1997,
Guevarra then filed his petition for review with this Court. A perusal of
Guevarra’s petition for review gives the impression that the issues he raised
were pure questions of law. There is a question of law when the doubt or
difference is on what the law is on a certain state of facts. 16 There is a
question of fact when the doubt or difference is on the truth or falsity of the
facts alleged.17

In his petition for review before this Court, Guevarra no longer disputed the
facts. Guevarra’s petition for review raised these questions: (1) Do ejectment
cases pertain only to possession of a structure, and not the lot on which the
structure stands? (2) Does a suit by a squatter against a fellow squatter
constitute a valid case for ejectment? (3) Should a Presidential Proclamation
governing the lot on which a squatter’s structure stands be considered in an
ejectment suit filed by the owner of the structure?

These questions call for the evaluation of the rights of the parties under the
law on ejectment and the Presidential Proclamation. At first glance, the
questions Guevarra raised appeared purely legal. However, some factual
questions still have to be resolved because they have a bearing on the legal
questions raised in the petition for review. These factual matters refer to the
metes and bounds of the disputed property and the application of Guevarra as
beneficiary of Proclamation No. 137.

The Court of Appeals has the power to grant an extension of time to file a
petition for review. In Lacsamana v. Second Special Cases Division of the
Intermediate Appellate Court,18 we declared that the Court of Appeals could
grant extension of time in appeals by petition for review. In Liboro v. Court of
Appeals,19 we clarified that the prohibition against granting an extension of
time applies only in a case where ordinary appeal is perfected by a mere
notice of appeal. The prohibition does not apply in a petition for review where
the pleading needs verification. A petition for review, unlike an ordinary
appeal, requires preparation and research to present a persuasive
position.20 The drafting of the petition for review entails more time and effort
than filing a notice of appeal. 21 Hence, the Court of Appeals may allow an
extension of time to file a petition for review.

In the more recent case of Commissioner of Internal Revenue v. Court of


Appeals,22 we held that Liboro’s clarification of Lacsamana is consistent
with the Revised Internal Rules of the Court of Appeals and Supreme Court
Circular No. 1-91. They all allow an extension of time for filing petitions for
review with the Court of Appeals. The extension, however, should be limited
to only fifteen days save in exceptionally meritorious cases where the Court of
Appeals may grant a longer period.

A judgment becomes "final and executory" by operation of law. Finality of


judgment becomes a fact on the lapse of the reglementary period to appeal if
no appeal is perfected.23 The RTC decision could not have gained finality
because the Court of Appeals granted the 30-day extension to Guevarra.

The Court of Appeals did not commit grave abuse of discretion when it
approved Guevarra’s motion for extension. The Court of Appeals gave due
course to the motion for extension because it complied with the condition set
by the appellate court in its resolution dated 28 January 1997. The resolution
stated that the Court of Appeals would only give due course to the motion for
extension if filed on time. The motion for extension met this condition.

The material dates to consider in determining the timeliness of the filing of the
motion for extension are (1) the date of receipt of the judgment or final order
or resolution subject of the petition, and (2) the date of filing of the motion for
extension.24 It is the date of the filing of the motion or pleading, and not the
date of execution, that determines the timeliness of the filing of that motion or
pleading. Thus, even if the motion for extension bears no date, the date of
filing stamped on it is the reckoning point for determining the timeliness of its
filing.

Guevarra had until 14 December 1996 to file an appeal from the RTC
decision. Guevarra filed his motion for extension before this Court on 13
December 1996, the date stamped by this Court’s Receiving Clerk on the
motion for extension. Clearly, Guevarra filed the motion for extension exactly
one day before the lapse of the reglementary period to appeal.
Assuming that the Court of Appeals should have dismissed Guevarra’s appeal
on technical grounds, Pajuyo did not ask the appellate court to deny the
motion for extension and dismiss the petition for review at the earliest
opportunity. Instead, Pajuyo vigorously discussed the merits of the case. It
was only when the Court of Appeals ruled in Guevarra’s favor that Pajuyo
raised the procedural issues against Guevarra’s petition for review.

A party who, after voluntarily submitting a dispute for resolution, receives an


adverse decision on the merits, is estopped from attacking the jurisdiction of
the court.25 Estoppel sets in not because the judgment of the court is a valid
and conclusive adjudication, but because the practice of attacking the court’s
jurisdiction after voluntarily submitting to it is against public policy. 26

In his Comment before the Court of Appeals, Pajuyo also failed to discuss
Guevarra’s failure to sign the certification against forum shopping. Instead,
Pajuyo harped on Guevarra’s counsel signing the verification, claiming that
the counsel’s verification is insufficient since it is based only on "mere
information."

A party’s failure to sign the certification against forum shopping is different


from the party’s failure to sign personally the verification. The certificate of
non-forum shopping must be signed by the party, and not by counsel. 27 The
certification of counsel renders the petition defective. 28

On the other hand, the requirement on verification of a pleading is a formal


and not a jurisdictional requisite. 29 It is intended simply to secure an
assurance that what are alleged in the pleading are true and correct and not
the product of the imagination or a matter of speculation, and that the
pleading is filed in good faith. 30 The party need not sign the verification. A
party’s representative, lawyer or any person who personally knows the truth of
the facts alleged in the pleading may sign the verification. 31

We agree with the Court of Appeals that the issue on the certificate against
forum shopping was merely an afterthought. Pajuyo did not call the Court of
Appeals’ attention to this defect at the early stage of the proceedings. Pajuyo
raised this procedural issue too late in the proceedings.

Absence of Title over the Disputed Property will not Divest the Courts of
Jurisdiction to Resolve the Issue of Possession

Settled is the rule that the defendant’s claim of ownership of the disputed
property will not divest the inferior court of its jurisdiction over the ejectment
case.32 Even if the pleadings raise the issue of ownership, the court may pass
on such issue to determine only the question of possession, especially if the
ownership is inseparably linked with the possession. 33 The adjudication on the
issue of ownership is only provisional and will not bar an action between the
same parties involving title to the land.34 This doctrine is a necessary
consequence of the nature of the two summary actions of ejectment, forcible
entry and unlawful detainer, where the only issue for adjudication is the
physical or material possession over the real property. 35
In this case, what Guevarra raised before the courts was that he and Pajuyo
are not the owners of the contested property and that they are mere
squatters. Will the defense that the parties to the ejectment case are not the
owners of the disputed lot allow the courts to renounce their jurisdiction over
the case? The Court of Appeals believed so and held that it would just leave
the parties where they are since they are in pari delicto.

We do not agree with the Court of Appeals.

Ownership or the right to possess arising from ownership is not at issue in an


action for recovery of possession. The parties cannot present evidence to
prove ownership or right to legal possession except to prove the nature of the
possession when necessary to resolve the issue of physical
possession.36 The same is true when the defendant asserts the absence of
title over the property. The absence of title over the contested lot is not a
ground for the courts to withhold relief from the parties in an ejectment case.

The only question that the courts must resolve in ejectment proceedings is -
who is entitled to the physical possession of the premises, that is, to the
possession de facto and not to the possession de jure.37 It does not even
matter if a party’s title to the property is questionable, 38 or when both parties
intruded into public land and their applications to own the land have yet to be
approved by the proper government agency. 39 Regardless of the actual
condition of the title to the property, the party in peaceable quiet possession
shall not be thrown out by a strong hand, violence or terror. 40 Neither is the
unlawful withholding of property allowed. Courts will always uphold respect for
prior possession.

Thus, a party who can prove prior possession can recover such possession
even against the owner himself. 41 Whatever may be the character of his
possession, if he has in his favor prior possession in time, he has the security
that entitles him to remain on the property until a person with a better right
lawfully ejects him.42 To repeat, the only issue that the court has to settle in an
ejectment suit is the right to physical possession.

In Pitargue v. Sorilla,43 the government owned the land in dispute. The


government did not authorize either the plaintiff or the defendant in the case
of forcible entry case to occupy the land. The plaintiff had prior possession
and had already introduced improvements on the public land. The plaintiff had
a pending application for the land with the Bureau of Lands when the
defendant ousted him from possession. The plaintiff filed the action of forcible
entry against the defendant. The government was not a party in the case of
forcible entry.

The defendant questioned the jurisdiction of the courts to settle the issue of
possession because while the application of the plaintiff was still pending, title
remained with the government, and the Bureau of Public Lands had
jurisdiction over the case. We disagreed with the defendant. We ruled that
courts have jurisdiction to entertain ejectment suits even before the resolution
of the application. The plaintiff, by priority of his application and of his entry,
acquired prior physical possession over the public land applied for as against
other private claimants. That prior physical possession enjoys legal protection
against other private claimants because only a court can take away such
physical possession in an ejectment case.

While the Court did not brand the plaintiff and the defendant in Pitargue44 as
squatters, strictly speaking, their entry into the disputed land was illegal. Both
the plaintiff and defendant entered the public land without the owner’s
permission. Title to the land remained with the government because it had not
awarded to anyone ownership of the contested public land. Both the plaintiff
and the defendant were in effect squatting on government property. Yet, we
upheld the courts’ jurisdiction to resolve the issue of possession even if the
plaintiff and the defendant in the ejectment case did not have any title over the
contested land.

Courts must not abdicate their jurisdiction to resolve the issue of physical
possession because of the public need to preserve the basic 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 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 Code 48 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 that the disputed lot
is within the coverage of Proclamation No. 137. He failed to do so.

Second. The Court of Appeals should not have given credence to Guevarra’s


unsubstantiated claim that he is the beneficiary of Proclamation No. 137.
Guevarra merely alleged that in the survey the project administrator
conducted, he and not Pajuyo appeared as the actual occupant of the lot.

There is no proof that Guevarra actually availed of the benefits of


Proclamation No. 137. Pajuyo allowed Guevarra to occupy the disputed
property in 1985. President Aquino signed Proclamation No. 137 into law on
11 March 1986. Pajuyo made his earliest demand for Guevarra to vacate the
property in September 1994.

During the time that Guevarra temporarily held the property up to the time that
Proclamation No. 137 allegedly segregated the disputed lot, Guevarra never
applied as beneficiary of Proclamation No. 137. Even when Guevarra already
knew that Pajuyo was reclaiming possession of the property, Guevarra did not
take any step to comply with the requirements of Proclamation No. 137.

Third. Even assuming that the disputed lot is within the coverage of


Proclamation No. 137 and Guevarra has a pending application over the lot,
courts should still assume jurisdiction and resolve the issue of possession.
However, the jurisdiction of the courts would be limited to the issue of physical
possession only.

In Pitargue,55 we ruled that courts have jurisdiction over possessory actions


involving public land to determine the issue of physical possession. The
determination of the respective rights of rival claimants to public land is,
however, distinct from the determination of who has the actual physical
possession or who has a better right of physical possession. 56 The
administrative disposition and alienation of public lands should be threshed
out in the proper government agency.57

The Court of Appeals’ determination of Pajuyo and Guevarra’s rights under


Proclamation No. 137 was premature. Pajuyo and Guevarra were at most
merely potential beneficiaries of the law. Courts should not preempt the
decision of the administrative agency mandated by law to determine the
qualifications of applicants for the acquisition of public lands. Instead, courts
should expeditiously resolve the issue of physical possession in ejectment
cases to prevent disorder and breaches of peace. 58

Pajuyo is Entitled to Physical Possession of the Disputed Property


Guevarra does not dispute Pajuyo’s prior possession of the lot and ownership
of the house built on it. Guevarra expressly admitted the existence and due
execution of the Kasunduan. The Kasunduan reads:

Ako, si COL[I]TO PAJUYO, may-ari ng bahay at lote sa Bo. Payatas, Quezon


City, ay nagbibigay pahintulot kay G. Eddie Guevarra, na pansamantalang
manirahan sa nasabing bahay at lote ng "walang bayad." Kaugnay nito,
kailangang panatilihin nila ang kalinisan at kaayusan ng bahay at lote.

Sa sandaling kailangan na namin ang bahay at lote, sila’y kusang aalis ng


walang reklamo.

Based on the Kasunduan, Pajuyo permitted Guevarra to reside in the house


and lot free of rent, but Guevarra was under obligation to maintain the
premises in good condition. Guevarra promised to vacate the premises on
Pajuyo’s demand but Guevarra broke his promise and refused to heed
Pajuyo’s demand to vacate.

These facts make out a case for unlawful detainer. Unlawful detainer involves
the withholding by a person from another of the possession of real property to
which the latter is entitled after the expiration or termination of the former’s
right to hold possession under a contract, express or implied.59

Where the plaintiff allows the defendant to use his property by tolerance
without any contract, the defendant is necessarily bound by an implied
promise that he will vacate on demand, failing which, an action for unlawful
detainer will lie.60 The defendant’s refusal to comply with the demand makes
his continued possession of the property unlawful. 61 The status of the
defendant in such a case is similar to that of a lessee or tenant whose term of
lease has expired but whose occupancy continues by tolerance of the
owner.62

This principle should apply with greater force in cases where a contract
embodies the permission or tolerance to use the property.
The Kasunduan expressly articulated Pajuyo’s forbearance. Pajuyo did not
require Guevarra to pay any rent but only to maintain the house and lot in
good condition. Guevarra expressly vowed in the Kasunduan that he would
vacate the property on demand. Guevarra’s refusal to comply with Pajuyo’s
demand to vacate made Guevarra’s continued possession of the property
unlawful.

We do not subscribe to the Court of Appeals’ theory that the Kasunduan is


one of commodatum.

In a contract of commodatum, one of the parties delivers to another


something not consumable so that the latter may use the same for a certain
time and return it.63 An essential feature of commodatum is that it is
gratuitous. Another feature of commodatum is that the use of the thing
belonging to another is for a certain period. 64 Thus, the bailor cannot demand
the return of the thing loaned until after expiration of the period stipulated, or
after accomplishment of the use for which the commodatum is constituted.65 If
the bailor should have urgent need of the thing, he may demand its return for
temporary use.66 If the use of the thing is merely tolerated by the bailor, he
can demand the return of the thing at will, in which case the contractual
relation is called a precarium.67 Under the Civil Code, precarium is a kind of
commodatum.68

The Kasunduan reveals that the accommodation accorded by Pajuyo to


Guevarra was not essentially gratuitous. While the Kasunduan did not require
Guevarra to pay rent, it obligated him to maintain the property in good
condition. The imposition of this obligation makes the Kasunduan a contract
different from a commodatum. The effects of the Kasunduan are also different
from that of a commodatum. Case law on ejectment has treated relationship
based on tolerance as one that is akin to a landlord-tenant relationship where
the withdrawal of permission would result in the termination of the lease. 69 The
tenant’s withholding of the property would then be unlawful. This is settled
jurisprudence.

Even assuming that the relationship between Pajuyo and Guevarra is one
of commodatum, Guevarra as bailee would still have the duty to turn over
possession of the property to Pajuyo, the bailor. The obligation to deliver or to
return the thing received attaches to contracts for safekeeping, or contracts of
commission, administration and commodatum. 70 These contracts certainly
involve the obligation to deliver or return the thing received. 71

Guevarra turned his back on the Kasunduan on the sole ground that like him,
Pajuyo is also a squatter. Squatters, Guevarra pointed out, cannot enter into a
contract involving the land they illegally occupy. Guevarra insists that the
contract is void.

Guevarra should know that there must be honor even between squatters.
Guevarra freely entered into the Kasunduan. Guevarra cannot now impugn
the Kasunduan after he had benefited from it. The Kasunduan binds
Guevarra.

The Kasunduan is not void for purposes of determining who between Pajuyo


and Guevarra has a right to physical possession of the contested property.
The Kasunduan is the undeniable evidence of Guevarra’s recognition of
Pajuyo’s better right of physical possession. Guevarra is clearly a possessor
in bad faith. The absence of a contract would not yield a different result, as
there would still be an implied promise to vacate.

Guevarra contends that there is "a pernicious evil that is sought to be avoided,
and that is allowing an absentee squatter who (sic) makes (sic) a profit out of
his illegal act."72 Guevarra bases his argument on the preferential right given
to the actual occupant or caretaker under Proclamation No. 137 on socialized
housing.

We are not convinced.


Pajuyo did not profit from his arrangement with Guevarra because Guevarra
stayed in the property without paying any rent. There is also no proof that
Pajuyo is a professional squatter who rents out usurped properties to other
squatters. Moreover, it is for the proper government agency to decide who
between Pajuyo and Guevarra qualifies for socialized housing. The only issue
that we are addressing is physical possession.

Prior possession is not always a condition sine qua non in ejectment.73 This is


one of the distinctions between forcible entry and unlawful detainer. 74 In
forcible entry, the plaintiff is deprived of physical possession of his land or
building by means of force, intimidation, threat, strategy or stealth. Thus, he
must allege and prove prior possession. 75 But in unlawful detainer, the
defendant unlawfully withholds possession after the expiration or termination
of his right to possess under any contract, express or implied. In such a case,
prior physical possession is not required.76

Pajuyo’s withdrawal of his permission to Guevarra terminated the Kasunduan.


Guevarra’s transient right to possess the property ended as well. Moreover, it
was Pajuyo who was in actual possession of the property because Guevarra
had to seek Pajuyo’s permission to temporarily hold the property and
Guevarra had to follow the conditions set by Pajuyo in the Kasunduan.
Control over the property still rested with Pajuyo and this is evidence of actual
possession.

Pajuyo’s absence did not affect his actual possession of the disputed
property. Possession in the eyes of the law does not mean that a man has to
have his feet on every square meter of the ground before he is deemed in
possession.77 One may acquire possession not only by physical occupation,
but also by the fact that a thing is subject to the action of one’s will. 78 Actual or
physical occupation is not always necessary. 79

Ruling on Possession Does not Bind Title to the Land in Dispute

We are aware of our pronouncement in cases where we declared that


"squatters and intruders who clandestinely enter into titled government
property cannot, by such act, acquire any legal right to said property." 80 We
made this declaration because the person who had title or who had the right
to legal possession over the disputed property was a party in the ejectment
suit and that party instituted the case against squatters or usurpers.

In this case, the owner of the land, which is the government, is not a party to
the ejectment case. This case is between squatters. Had the government
participated in this case, the courts could have evicted the contending
squatters, Pajuyo and Guevarra.

Since the party that has title or a better right over the property is not
impleaded in this case, we cannot evict on our own the parties. Such a ruling
would discourage squatters from seeking the aid of the courts in settling the
issue of physical possession. Stripping both the plaintiff and the defendant of
possession just because they are squatters would have the same dangerous
implications as the application of the principle of pari delicto. Squatters would
then rather settle the issue of physical possession among themselves than
seek relief from the courts if the plaintiff and defendant in the ejectment case
would both stand to lose possession of the disputed property. This would
subvert the policy underlying actions for recovery of possession.

Since Pajuyo has in his favor priority in time in holding the property, he is
entitled to remain on the property until a person who has title or a better right
lawfully ejects him. Guevarra is certainly not that person. The ruling in this
case, however, does not preclude Pajuyo and Guevarra from introducing
evidence and presenting arguments before the proper administrative agency
to establish any right to which they may be entitled under the law. 81

In no way should our ruling in this case be interpreted to condone squatting.


The ruling on the issue of physical possession does not affect title to the
property nor constitute a binding and conclusive adjudication on the merits on
the issue of ownership.82 The owner can still go to court to recover lawfully the
property from the person who holds the property without legal title. Our ruling
here does not diminish the power of government agencies, including local
governments, to condemn, abate, remove or demolish illegal or unauthorized
structures in accordance with existing laws.

Attorney’s Fees and Rentals

The MTC and RTC failed to justify the award of ₱3,000 attorney’s fees to
Pajuyo. Attorney’s fees as part of damages are awarded only in the instances
enumerated in Article 2208 of the Civil Code. 83 Thus, the award of attorney’s
fees is the exception rather than the rule. 84 Attorney’s fees are not awarded
every time a party prevails in a suit because of the policy that no premium
should be placed on the right to litigate. 85 We therefore delete the attorney’s
fees awarded to Pajuyo.

We sustain the ₱300 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 ₱300 monthly rental
is counted from the last demand to vacate, which was on 16 February 1995.

WHEREFORE, we GRANT the petition. The Decision dated 21 June 2000


and Resolution dated 14 December 2000 of the Court of Appeals in CA-G.R.
SP No. 43129 are SET ASIDE. The Decision dated 11 November 1996 of the
Regional Trial Court of Quezon City, Branch 81 in Civil Case No. Q-96-26943,
affirming the Decision dated 15 December 1995 of the Metropolitan Trial
Court of Quezon City, Branch 31 in Civil Case No. 12432,
is REINSTATED with MODIFICATION. The award of attorney’s fees is
deleted. No costs.

SPOUSES RAFAEL BENITEZ AND AVELINA


BENITEZ, Petitioners, v. COURT OF APPEALS, SPOUSES RENATO
MACAPAGAL and ELIZABETH MACAPAGAL, Respondents.
DECISION

PANGANIBAN, J.:

May possession of a lot encroached upon by a part of another's house be


recovered in an action for ejectment?

This is the main question raised by the petition for review


on certiorari assailing the Resolution1 of the Court of Appeals, Sixth
Division,2 dated March 24, 1992, in CA-G.R. SP No. 26853 denying due
course to petitioner's appeal and affirming the decision of the Regional Trial
Court of Pasig in Civil Case No. 61004, which in turn affirmed the decision of
the Metropolitan Trial Court of San Juan, Metro Manila, Branch 58.

The Facts

On January 22, 1986, petitioners Rafael and Avelina Benitez purchased a


303-square-meter parcel of land with improvement from the Cavite
Development Bank, covered by Transfer Certificate of Title No. 41961 (now,
TCT No. 55864).

Subsequently, private respondents Renato and Elizabeth Macapagal bought a


361-square-meter lot covered by TCT No. 40155. On September 18, 1986,
they filed Civil Case No. 53835 with the Regional Trial Court of Pasig, Branch
157 against petitioners for the recovery of possession of an encroached
portion of the lot they purchased. The parties were able to reach a
compromise in which private respondents sold the encroached portion to
petitioners at the acquisition cost of One Thousand Pesos (P1,000.00) per
square meter.

On July 17, 1989, private respondents purchased still another property, a


285.70 square-meter-lot covered by TCT No. 3249-R, adjacent to that of
petitioners. After a relocation survey was conducted, private respondents
discovered that some 46.50 square meters of their property was occupied by
petitioners' house. Despite verbal and written demands, petitioners refused to
vacate. A last notice to vacate was sent to petitioners on October 26, 1989.

On January 18, 1990, private respondents filed with the Metropolitan Trial
Court of San Juan, Branch 58, Civil Case No. 61004 for ejectment against
petitioners. The MeTC of San Juan decided in favor of the former, with the
following disposition:3

"WHEREFORE, in view of all the foregoing, judgment is hereby rendered for


the plaintiffs and against the defendants ordering them and all persons
claiming rights under them to vacate and surrender possession of the subject
premises to the plaintiffs as well as to pay the following:

1. The amount of P930.00 a month starting July 17, 1989 until they finally
vacate the subject premises;
2. The amount of P5,000.00 for and as attorney's fees; and

3. Cost of suit."

On appeal, the Regional Trial Court of Pasig, Branch 167, affirmed said
decision.4 The RTC said:5chanroblesvirtuallawlibrary

"The controversy in this case is not an encroachment or overlapping of two (2)


adjacent properties owned by the parties. It is a case where a part of the
house of the defendants is constructed on a portion of the property of the
plaintiffs. So that as new owner of the real property, who has a right to the full
enjoyment and possession of the entire parcel covered by Transfer Certificate
of Title No. 41961, plaintiffs have the right to demand that defendants remove
the portion of the house standing on plaintiff's realty...."

The dispositive portion thereof reads:6chanroblesvirtuallawlibrary

"WHEREFORE, finding no reversible error in the decision appealed from, it


being more consistent with the facts and the law applicable, the same is
hereby AFFIRMED in toto. Costs against the defendant-appellants.

SO ORDERED."

On further appeal, the respondent Court found no merit in petitioners' plea. In


a Resolution dated March 24, 1992, the Sixth Division of said Court found the
petition to be a mere rehash of the issues and arguments presented before
the lower courts. It ruled in part that: 7chanroblesvirtuallawlibrary

"3) Petitioners were fully aware that part of their house encroached on their
neighbor's property, while respondents became aware of it only after
purchasing said property. Petitioners cannot claim good faith as against the
respondents.

"4) Since petitioners are not builders in good faith, they cannot demand that
respondents sell the disputed portion; what the law provides is that the
builders in bad faith can be ordered to dismantle said structure at their own
expense. In the interim period that petitioners' structure remains, they should
pay reasonable rent until they remove the structure."

The dispositive portion thereof reads:8chanroblesvirtuallawlibrary

"For reasons indicated, We find the appeal without merit and deny it due
course, with costs against the petitioners.

SO ORDERED."

Hence, this petition.

The Issues
The main issue is whether the possession of the portion of the private
respondents' land encroached by petitioners' house can be recovered through
an action of ejectment, not accion publiciana. Corollarily, petitioners question
(a) the validity of the imposition of "rental" for the occupancy of the
encroached portion, (b) the denial of their claimed pre-emptive right to
purchase the encroached portion of the private respondents' land, and (c) the
propriety of a factual review of the CA's finding of bad faith on the part of
petitioners.

In a nutshell, petitioners insist that the MeTC had no jurisdiction over the case
at bar because its real nature is accion publiciana or recovery of possession,
not unlawful detainer. It is not forcible entry because private respondents did
not have prior possession of the contested property as petitioners possessed
it ahead of private respondents. It is not unlawful detainer because petitioners
were not the private respondents' tenants nor vendee unlawfully withholding
possession thereof. Said court also has no jurisdiction to impose payment of
"rentals" as there is no lessor-lessee relationship between the parties. They
pray for a review of the factual finding of bad faith, insisting that the facts
uphold their position. Due to their alleged good faith, they claim the pre-
emptive right to purchase the litigated portion as a matter of course. Finally,
they insist that the award of attorney's fees is unwarranted as private
respondents allegedly had knowledge of the encroachment prior to their
acquisition of said land.

Private respondents counter that petitioners are estopped from questioning


the jurisdiction of the MeTC after they voluntarily participated in the trial on the
merits and lost; that there is no law giving petitioners the option to buy the
encroached property; and that petitioners acted in bad faith because they
waived in their deed of sale the usual seller's warranty as to the absence of
any and all liens and encumbrances on the property, thereby implying they
had knowledge of the encroachment at the time of purchase.

The Court's Ruling

The petition lacks merit and should be denied.

First Issue: MeTC Has Jurisdiction

The jurisdictional requirements for ejectment, as borne out by the facts, are:
after conducting a relocation survey, private respondents discovered that a
portion of their land was encroached by petitioners' house; notices to vacate
were sent to petitioners, the last one being dated October 26, 1989; and
private respondents filed the ejectment suit against petitioners on January 18,
1990 or within one (1) year from the last demand.

Private respondents' cause of action springs from Sec. 1, Rule 70 of the


Revised Rules of Court, which provides:

"Section 1. Who may institute proceedings, and when -- Subject to the


provisions of the next succeeding section, a person deprived of the
possession of any land or building by force, intimidation, threat, strategy, or
stealth, or a landlord, vendor, vendee, or other person against whom the
possession of any land or building is unlawfully withheld after the expiration or
termination of the right to hold possession, by virtue of any contract, express
or implied, or the legal representatives or assigns of any such landlord,
vendor, vendee, or other person, may, at any time within one (1) year after
such unlawful deprivation or withholding of possession, bring an action in the
proper inferior court against the person or persons unlawfully withholding or
depriving of possession, or any person or persons claiming under them, for
the restitution of such possession, together with damages and costs...."

That petitioners occupied the land prior to private respondents' purchase


thereof does not negate the latter's case for ejectment. Prior possession is not
always a condition sine qua non in ejectment.9 This is one of the distinctions
between forcible entry and unlawful detainer. In forcible entry, the plaintiff is
deprived of physical possession of his land or building by means of force,
intimidation, threat, strategy or stealth; thus, he must allege and prove prior
possession. But in unlawful detainer, the defendant unlawfully withholds
possession after the expiration or termination of his right thereto under any
contract, express or implied. In such a case, prior physical possession is not
required. 10

Possession can also be acquired, not only by material occupation, but also by
the fact that a thing is subject to the action of one's will or by the proper acts
and legal formalities established for acquiring such right. 11 Possession of land
can be acquired upon the execution of the deed of sale thereof by its vendor.
Actual or physical occupation is not always necessary.

In the case before us, considering that private respondents are unlawfully
deprived of possession of the encroached land and that the action for the
recovery of possession thereof was made within the one- year reglementary
period, ejectment is the proper remedy. 12 The MeTC of San Juan had
jurisdiction.

In addition, after voluntarily submitting themselves to its proceedings,


petitioners are estopped from assailing the jurisdiction of the MeTC. 13 This
Court will not allow petitioners to attack the jurisdiction of the trial court after
receiving a decision adverse to their position.

Second Issue: Compensation For Occupancy

Petitioners erroneously construed the order of the MeTC to pay private


respondents Nine Hundred Thirty Pesos (P930.00) a month starting July 17,
1989 until they (petitioners) finally vacate the subject premises as "rentals".
Technically, such award is not rental, but damages. Damages are recoverable
in ejectment cases under Section 8, Rule 70 of the Revised Rules of
Court.14 These damages arise from the loss of the use and occupation of the
property, and not the damages which private respondents may have suffered
but which have no direct relation to their loss of material
possession.15 Damages in the context of Section 8, Rule 70 is limited to "rent"
or "fair rental value" for the use and occupation of the
property.16chanroblesvirtuallawlibrary

There is no question that petitioners benefited from their occupation of a


portion of private respondents' property. Such benefit justifies the award of the
damages of this kind. Nemo cum alterius, detrimenti locupletari potest. No
one shall enrich himself at the expense of another.

Third Issue: Option To Sell Belongs To Owner

Article 448 of the Civil Code 17 is unequivocal that the option to sell the land on
which another in good faith builds, plants or sows on, belongs to the
landowner.

The option is to sell, not to buy, and it is the landowner's choice. Not even a
declaration of the builder, planter, or sower's bad faith shifts this option to him
per Article 450 of the Civil Code.18 This advantage in Article 448 is accorded
the landowner because "his right is older, and because, by the principle of
accession, he is entitled to the ownership of the accessory thing." 19 There can
be no pre-emptive right to buy even as a compromise, as this prerogative
belongs solely to the landowner. No compulsion can be legally forced on him,
contrary to what petitioners asks from this Court. Such an order would
certainly be invalid and illegal. Thus, the lower courts were correct in rejecting
the petitioners' offer to buy the encroached land.

Fourth Issue: A Review of Factual Findings Is Unwarranted

Petitioners ask this Court to review the alleged error of the respondent Court
in appreciating bad faith on their part. According to them, this is contradictory
to the fact that private respondents acquired their lot and discovered the
encroachment after petitioners bought their house. After careful deliberation
on this issue, this Court finds this petition for review inadequate as it failed to
show convincingly a reversible error on the part of the respondent Court in
this regard. Thus, for very good reasons, this Court has consistently and
emphatically declared that review of the factual findings of the Court of
Appeals is not a function that is normally undertaken in petitions for review
under Rule 45 of the Rules of Court. Such findings, as a general rule, are
binding and conclusive.20 The jurisdiction of this Court is limited to reviewing
errors of law unless there is a showing that the findings complained of are
totally devoid of support in the records or that they are so glaringly erroneous
as to constitute reversible error.21chanroblesvirtuallawlibrary

Even respondent Court has taken note of the inadequacy of the petition
before it, as it wryly said:22

"The Petition for Review is not certainly a manifestation of clarity nor an


example of a well-organized summation of petitioners' cause of action......

xxx xxx xxx


A careful scrutiny of the above issues discloses that they are mere repetitions
in a rehashed form of the same issues with the same supporting arguments
raised by petitioners when they appealed from the decision of the (MeTC) to
the RTC. x x x."

This petition is no different. We share the foregoing sentiments of the


respondent Court. In essence, respondent Court merely affirmed the decision
of the MeTC. The Court of Appeal's finding of petitioners' bad faith did not
alter nor affect the MeTC's disposition. Petitioners want this Court to declare
them in good faith and to determine their rights under Article 448, Civil Code.
However, the mere fact that they bought their property ahead of the private
respondents does not establish this point. Nor does it prove that petitioners
had no knowledge of the encroachment when they purchased their property.
Reliance on the presumption in Article 526 of the Code is misplaced in view of
the declaration of the respondent Court that petitioners are not builders in
good faith.

What petitioners presented are mere allegations and arguments, without


sufficient evidence to support them. As such, we have no ground to depart
from the general rule against factual review.

In sum, the petition has not shown cogent reasons and sufficient grounds to
reverse the unanimous ruling of the three lower courts. The MeTC, RTC and
the Court of Appeals were all in agreement in sustaining private respondents'
rights. And we uphold them.

WHEREFORE, the petition is DENIED. The assailed Resolution is


hereby AFFIRMED.

SAMUEL MALABANAN, Petitioners, v. RURAL BANK OF CABUYAO,


INC., Respondent.

DECISION

TINGA, J.:

This Petition for Review on Certiorari 1 seeks to set aside the decision2 of the
Court of Appeals dated 7 May 2004 in CA-G.R. SP No. 82223 which
sustained the judgment3 of the Regional Trial Court (RTC), Branch 55,
Calamba City. The RTC, in the exercise of its appellate jurisdiction, reversed
an earlier decision of the Municipal Trial Court in Cities 4 (MTCC) and ordered
the ejectment of herein petitioner.

The following facts are uncontroverted.

Samuel Malabanan (petitioner) was indebted to the Rural Bank of Cabuyao


(respondent) in the amount of P5,000,000.00. To secure the payment of said
loan, petitioner executed a Real Estate Mortgage 5 (REM) on 18 April 1996 in
favor of respondent over a parcel of land in Calamba, Laguna, with an area of
1,021 square meters, covered by Transfer Certificate of Title (TCT) No.
255916.6

When petitioner failed to settle his loan, he executed a dacion en pago over
the mortgaged property in favor of respondent on 12 November 2001. 7 By
virtue thereof, the transfer of registration of said property was effected and
TCT No. T-4935068 was subsequently issued in respondent's name. For
refusal of petitioner to surrender possession of subject property despite
repeated demands, respondent filed a complaint for unlawful detainer before
the MTCC.9 It also prayed for the award of reasonable rental amounting
to P100,000.00; another P100,000.00 as exemplary damages,
and P300,000.00 as attorney's fees.10

In his Answer,11 petitioner denied having executed a dacion en pago, stated


that he never appeared before the Notary Public, and that its Executive Vice-
President/General Manager, Renato Delfino, who purportedly represented
respondent, was no longer officially connected with the latter since 1999. He
also made a counterclaim for damages. 12

Prior to the filing of the ejectment case, however, petitioner had already filed
an action for an Annulment of the dacion en pago and TCT No. T-493506 and
reconveyance before Branch 35, RTC-Calamba. 13

In the preliminary conference held on 18 July 2003, the parties agreed and
stipulated on the following facts:

1. The execution of the real estate mortgage in favor of herein


plaintiff executed by defendant Samuel Malabanan.

2. That prior to the institution of this instant case, Civil Case No.
3316-2002 for the Annulment of Dacion En Pago and Transfer
Certificate of Title No. T-493506 and Reconveyance with
Damages and Temporary Restraining Order and/or Injunction
entitled Samuel [Malabanan] v. Rural Bank of Cabuyao Inc.,
Renato Delfino, Notary Public Ruben Avenido and The Register
of Deeds for Calamba City, Laguna was filed on September 25,
2002.

3. That the alleged Dacion en Pago refers to TCT-T-255916.

4. The existence and receipt of the demand letter dated August


12, 2002.14

On 8 September 2003, the MTCC dismissed the complaint, as well as the


counterclaim, for lack of merit. 15 The lower court noted that respondent was
not able to prove that petitioner's continued occupancy of the subject
premises was by mere tolerance in order to sustain a cause of action for
unlawful detainer.16
On appeal, the RTC reversed the MTCC decision and ordered petitioner to
vacate the subject property and to pay respondent P100,000.00 for rentals
and P20,000.00 as attorney's fees.17

Petitioner elevated the case to the Court of Appeals by way of Petition for
Review with Urgent Prayer for Issuance of a Temporary Restraining Order
and/or Writ of Preliminary Injunction. 18 Petitioner imputed error on the part of
the trial court in not dismissing the complaint for unlawful detainer on the
ground of litis pendencia. He also faulted the RTC for not simultaneously
resolving the ejectment case and the annulment of dacion en pago.

On 7 May 2004, the Fifth Division of the Court of Appeals promulgated the
assailed decision affirming in toto the RTC ruling. 19

In the present petition, petitioner raises substantially the same issues brought
before the Court of Appeals, which can be summarized into two: (1) whether
the complaint for unlawful detainer can be dismissed on ground of litis
pendencia and forum shopping; and (2) whether the allegations in the
complaint make out a case of unlawful detainer.20

Petitioner asserts that there is a pending case for annulment of dacion en


pago and TCT No. T-493506 before the RTC in which the issue to be
resolved also involves possession as in this case. The allegations and the
evidence to be presented in both complaints are identical. Hence, the instant
complaint for unlawful detainer must be dismissed on grounds of litis
pendencia and forum shopping.21 Assuming without conceding that the
complaint cannot be dismissed, petitioner urges at least the suspension of the
ejectment proceedings pending resolution of the annulment case.

The Court of Appeals squarely addressed this issue, viz:

It is established that in ejectment cases, the only issue for resolution is who is
entitled to the physical possession or material possession of the property
involved, independent of any claim of ownership set forth by any of the party-
litigants.

While it is true that both parties raised the issue of ownership over the subject
property, yet it is emphasized that in ejectment cases, even if the question of
ownership is raised in the pleadings, the court may pass upon such issue but
only to determine the question of possession especially if the former is
inseparably linked with the latter, but such determination of ownership is not
clothed with finality and neither will it affect ownership of the property nor
constitute a binding and conclusive adjudication on the merits with respect to
the issue of ownership. Therefore, the judgment in the present case would not
amount to res judicata in the other case which is the pending Annulment of
Dacion En Pago.22

Forum-shopping exists where the elements of litis pendentia are present,


namely: (a) identity of parties or at least such as representing the same
interests in both actions; (b) identity of rights asserted and reliefs prayed for,
the relief being founded on the same facts; and (c) the identity in the two
cases should be such that the judgment that may be rendered in one would,
regardless of which party is successful, amounts to res judicata in the other.23

Petitioner and respondent are the same parties in the annulment and
ejectment cases. The issue of ownership was likewise being contended, with
same set of evidence being presented in both cases. However, it cannot be
inferred that a judgment in the ejectment case would amount to res judicata in
the annulment case, and vice-versa.

This issue is hardly a novel one. It has been laid to rest by heaps of cases
iterating the principle that a judgment rendered in an ejectment case shall not
bar an action between the same parties respecting title to the land or building
nor shall it be conclusive as to the facts therein found in a case between the
same parties upon a different cause of action involving possession. 24

It bears emphasizing that in ejectment suits, the only 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. However, the issue of
ownership may be provisionally ruled upon for the sole purpose of
determining who is entitled to possession de facto. 25 Therefore, the
provisional determination of ownership in the ejectment case cannot be
clothed with finality.

Corollarily, the incidental issue of whether a pending action for annulment


would abate an ejectment suit must be resolved in the negative.

A pending action involving ownership of the same property does not bar the
filing or consideration of an ejectment suit, nor suspend the proceedings. This
is so because an ejectment case is simply designed to summarily restore
physical possession of a piece of land or building to one who has been
illegally or forcibly deprived thereof, without prejudice to the settlement of the
parties' opposing claims of juridical possession in appropriate proceedings. 26

The crux of the controversy centers on the propriety of the unlawful detainer
suit. 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.27 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 plaintiff's cause of action is the
termination of the defendant's right to continue in possession. 28

The pertinent allegations in the complaint read:

4. That on various occasion, defendant Samuel Malabanan


obtained loans from plaintiff in the total principal amount of FIVE
MILLION PESOS (P5,000,000.00) Philippine currency using as
collateral that parcel of land located in Bo. Parian, Calamba,
Laguna consisting of 1,021 sq. m. including all the
improvements found therein and covered by TCT No. T-265916
of the Registry of Deeds of Calamba, Laguna (hereinafter
referred to as "subject property" for brevity). x x x

5. Unfortunately, however, defendant Malabanan failed to pay


his loans with the plaintiff;

6. On November [12, 2001], to settle his loans with plaintiff,


defendant Samuel Malabanan executed a dacion en pago (deed
of assignment in payment of debt). x x x

7. Through the said dacion en pago, plaintiff was able to effect


[the] transfer of registration of the subject property in its name
on [February 14, 2002] as evidenced by TCT No. T-493506
issued by the Registry of Deeds of Calamba, Laguna in its
name. x x x

8. Under the circumstances, plaintiff is entitled to the immediate


possession of the subject property;

9. But through tolerance, plaintiff allowed defendant Malabanan


to remain in the subject property without requiring him to pay
any rentals;

10. However, when the need of the plaintiff for the subject
property arose, plaintiff has demanded unto defendant
Malabanan to peacefully surrender the possession of the subject
property, the last of which was received by defendant on
September [1, 2002] sent by [the] undersigned counsel which
was received by defendant on September 16, 2002. x x x

xxx

12. Defendant Malabanan has been unlawfully detaining the


subject property from plaintiff and defendant Malabanan and all
persons acting his authority should be ejected therefrom and
possession thereof surrendered to plaintiff;

x x x29

An examination of the complaint reveals that initially, petitioner exercised


possession over the subject property as the registered owner. He executed a
real estate mortgage in favor of respondent and for his failure to pay his
obligation, he purportedly executed a dacion en pago, whereby ownership
over the property was transferred to respondent. Subsequently, a new TCT
was issued in respondent's name. Thus, respondent became entitled to
possession.

Petitioner insists that the allegations in the complaint were not supported by
sufficient evidence to justify the remedy of an action for unlawful detainer. He
challenges the allegations of how respondent came "to possess" the subject
property and anchors his claim on the alleged simulated dacion en pago. To
prove fraud in the execution of said deed, petitioner points out that the subject
property is formerly covered by TCT No. T-265916 in his name while the
subject of the dacion en pago refers to TCT No. T-255916, registered in the
name of Ledesco Development Corporation.30

While petitioner harps on the supposed variance between the two certificate
of titles, he failed to explain why the supposed erroneous TCT No. T-255916
covers the property subject of the Real Estate Mortgage, which he himself
admitted to having executed. To bolster the reasonable conclusion that
indeed it was a mere typographical error, the technical description of the
mortgaged property clearly refers to the lot situated in Calamba, Laguna.

In dismissing petitioner's contention, the trial court observed that the variance
in the TCT numbers appearing on the title and the deed may be attributed to a
typographical oversight because the technical descriptions of the properties
covered by TCT No. T-255916 and TCT No. T-265916 would clearly show
that the properties covered therein refer to one and the same property, which
is the property in dispute.31 The appellate court added that what is controlling
is the technical description of the property. Moreover, petitioner admitted
having executed the Real Estate Mortgage which also bears the erroneous
TCT No. T-255916.32

Petitioner accuses respondent of employing fraudulent means and pretenses


in procuring his signature in the said deed as he never consented to its
execution. He further denies appearing before the Notary Public and that the
Community Tax Certificate Number appearing on the document was not his.

It can readily be inferred that petitioner is primarily asserting his ownership


over the subject property. It should be reiterated, at the point of being
repetitive, that in an unlawful detainer case, the only issue to be resolved is
who between the parties is entitled to the physical or material possession of
the property in dispute. The trial court and the appellate court were one in
saying that respondent had overwhelmingly established its right of possession
by virtue of the dacion en pago and the torrens title.ςηαñrοblεš νιrâ€
υαl lαω lιbrαrÿ

At this juncture, it may not be amiss to note that in a Petition for Review under
Rule 45 of the Rules of Court, only questions of law may be raised for the
simple reason that the Court is not a trier of facts. It is not duty-bound to
analyze and weigh again the evidence considered in the proceedings below.
The factual findings of the trial court, especially when adopted and affirmed by
the Court of Appeals as in the present case, are final and conclusive and may
not be reviewed on appeal.33

In the case at bar, both the trial court and the appellate court lent more
credence to the validity of the dacion en pago and respondent's title. This
determination, however, is regarded merely as provisional. It is a settled
doctrine that courts in ejectment cases may determine questions of ownership
whenever necessary to decide the question of possession. 34 In any case, we
sustain the finding that the respondents have the better right to possess the
subject property.

Well-established is the rule that if possession is by tolerance as has been


alleged in the complaint such possession becomes illegal upon demand to
vacate, with the possessor refusing to comply with such
35
demand.  Ï‚ηαñrοblεš νιr†υαl lαω lιbrαrÿ

Going over the allegations in the complaint, it is clear that respondent's action
for unlawful detainer is based on petitioner's possession by mere tolerance.
From the time the title to the property was transferred in the name of
respondent, petitioner's possession was converted into one by mere tolerance
of the owner. The forbearance ceased when respondent made a demand on
petitioner to vacate the lot. Thenceforth, petitioner's occupancy had become
unlawful.

A person who occupies the land of another with the latter's tolerance or
permission, without any contract between them, is necessarily bound by an
implied promise that he will vacate upon demand, failing which a summary
action for ejectment is the proper remedy against him. 36

There is no doubt that the plaintiff in an ejectment case is entitled to damages


caused by his loss of the use and possession of the premises. Damages in
the context of Section 17, Rule 70 of the 1997 Rules of Civil Procedure is
limited to "rent" or fair rental value or the reasonable compensation for the use
and occupation of the property.37

Respondent, as the plaintiff in the complaint for unlawful detainer brought


before the MTCC, had sought therein the award of P100,000.00 a month as
reasonable rental.38 Before this Court, petitioner asserts that respondent had
failed to prove his claim that the reasonable rental value is P100,000.00 a
month.39 Respondent, as the plaintiff in the complaint before the MTCC, had
the burden to adduce evidence to prove the fair rental value or reasonable
compensation for the subject property, 40 but it failed to discharge its burden.
All that it did was to make through his counsel a self-serving and
uncorroborated assertion in the unverified Position Paper 41 before the MCTC
that "(g)iven the size and strategic location of the subject property the
reasonable rentals" for its use "can be safely estimated at P100,000.00 a
month."42 Neither did the trial court make any ratiocination when it granted the
rentals rentals prayed for by respondent.

WHEREFORE, premises considered, the Petition is GRANTED IN PART. The


Decision dated 7 May 2004 of the Court of Appeals is AFFIRMED WITH
MODIFICATION in that its

affirmation of the Regional Trial Court's award of reasonable rentals in favor of


respondent is DELETED and SET ASIDE,