G.R. No. 150025

July 23, 2008

SPS. 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 Decision2 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 Ignacios 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 Ignacios 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 petitioners 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 20s 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 CAS 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. Marayag4, where the Court allowed the suspension of

ejectment proceedings because of strong reasons of equity applicable to the case the demolition of the petitioners 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

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"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 plaintiffs 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 latters 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 Appeals14 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 defendants 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 courts affirmation of the RTCs 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 MTCs 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,2|P a g e

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 respondents 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 Julitas 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 Julitas 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. SO ORDERED.

G.R. No. 176282 August 22, 2008 VICTORIA FERNANDO, petitioner, vs. 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 Decision1 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 ofP10,932.60.5 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.3|P a g e

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 Complaint10 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 ofP25,000.00 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 complaint12 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.14Petitioner 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

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, 20074|P a g e

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

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 ofP100,000.00. 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 Comment38 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 Resolution40 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 Compliance41 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 Manifestation45 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 constitutes litis 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, Memorandum, added several more, to wit: petitioner, in her

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; and 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 complaint50 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 petitioner alleges: ejectment which respondents filed against

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; and

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.5|P a g e

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, [sic] as 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. 196760 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. Avendao,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) 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 otherwise6|P a g e

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 ? 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 3368 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 Development.74 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 the7|P a g e

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 isLIFTED and SET ASIDE. G.R. No. 118284 July 5, 1996 SPOUSES MAMERTO REFUGIA and FELIZA PAYAD-REFUGIA, RODOLFO REFUGIA, and CANDELARIA REFUGIA,petitioners, vs. COURT OF APPEALS and SPOUSES ARTURO REFUGIA and AURORA TIMBANG-REFUGIA, respondents. REGALADO, J.:p This is an appeal by certiorari from the decision 1 of respondent Court of Appeals in CA-G.R. No. 34647 promulgated on December 9, 1994 which reversed and set aside the judgment 2 dated April 29, 1994 of the Regional Trial Court of Valenzuela, Branch 172, in Civil Case No. 4347-V-94 affirming with some modifications the decision 3 rendered by the Metropolitan Trial Court of Valenzuela, Branch 81, in Civil Case No. 6089 on March 4, 1994. The records en bloc of the aforesaid cases show that private respondent-spouses Arturo Refugia and Aurora Timbang-Refugia are

the registered owners of a parcel of land and a duplex apartment building constructed thereon located at No. 16 Meriales Street, Marulas, Valenzuela, as evidenced by Transfer Certificate of Title No. 218979. Apparently, said title was issued pursuant to a Deed of Absolute Sale executed on September 11, 1975 in favor of respondent Arturo Refugia, but the purchase price of P20,000.00 was reportedly advanced by his father, herein petitioner Mamerto Refugia. Thereafter, respondent Arturo Refugia obtained a housing loan from the Social Security System, using the land as collateral to secure payment thereof. In 1976, after the construction of the duplex apartment building, herein petitioners immediately began to occupy one door while respondents stayed in the other unit. It appears, however, that things did not turn out well between petitioners and private respondents, especially between petitioner Feliza Refugia and her daughter-in-law, Aurora, such that in February of 1993, petitioners were told by private respondents to vacate the unit that they were occupying because, according to private respondents, the family of one of their children who is married needed a place of their own. Petitioners refused to leave, claiming that they own the unit they are occupying by reason of the fact that it was actually Mamerto Refugia who bought the lot on which the duplex apartment stood. Because of this, the matter was brought before the barangay court of conciliation. No amicable settlement having been reached between the parties, private respondents instituted an action for ejectment on October 20, 1993 in the Metropolitan Trial Court of Valenzuela, Branch 81. On March 4, 1994, the court a quo rendered judgment dismissing the complaint for ejectment based on its finding that herein petitioners are the lawful occupants of the premises. Thus, it held that: Like in any other ejectment suit, the pivotal issue is whether the defendants are unlawfully with(h)olding possession of the premises in question. The question that perturbs the mind of the Court which is not fully explained by plaintiffs is whether the stay of the defendants in the premises was indeed by plaintiffs' tolerance alone. From the evidence on hand the Court is more disposed to believe the position of the defendants that it was Mamerto who bought the lot where the duplex apartment was constructed by plaintiff Arturo Refugia. As stated earlier, the amount of P20,000.00 was withdrawn on September 11, 1975, the date the Deed of Absolute Sale (Exhibits F and F-1) was executed. The consideration of the sale is for P20,000.00. The fact that a two-door apartment was indeed constructed likewise regenerates the claim of defendants that they shall be co-owners of the lot and shall dwell in one of the doors of said apartment. If the averment of plaintiffs that they exclusively own the property is not to be trusted what have motivated them to construct a two-door apartment instead of a single and a larger house? These facts are small tributaries that lead us to the bigger lake of truth, that is, the stay of the defendants in the premises is not on the basis of mere tolerance.

It may also be pointed out that the certification to file action (Exhibit E) issued by the Barangay is for Land Dispute not for ejectment. (Emphasis ours) In the handwritten transcripts of the proceedings in the barangay, it appears that this case is merely an off-shoot of a misunderstanding between plaintiff Aurora Refugia and her in-laws. It was admitted by Aurora that she offered to pay the a mount of P20,000.00 but that the defendants refused to accept the same. Then and there plaintiff Aurora said that she would prefer to sell the unit to another and that out of the proceeds of the sale, she will pay the defendants. These circumstances lead the Court to conclude that it is not true that plaintiffs' daughter is in need of the premises. On appeal, the Regional Trial Court of Valenzuela, Branch 172, in its aforementioned decision, affirmed with modification the judgment of the lower court by declaring herein petitioners and private respondents co-owners of the lot and the two-door apartment. Their motion for reconsideration having been denied, private respondents duly filed a petition for review before respondent Court of Appeals. On December 9, 1994, said respondent court rendered its questioned judgment which reversed and set aside the aforestated decisions of the Metropolitan Trial Court and the Regional Trial Court, and thereafter ordered petitioners and their privies to vacate the subject premises and to surrender possession thereof to private respondents. In so ruling, respondent court declared that the Regional Trial Court, in the exercise of its appellate jurisdiction over an ejectment case, had no authority to resolve the issue of ownership and to declare herein petitioners as co-owners because its power is limited only to a determination of the issue of possession, that petitioners' bare allegation of ownership cannot prevail over the transfer certificate of title and deed of sale in favor of private respondents; and that petitioners have been occupying the subject premises by mere tolerance. Hence, this petition wherein petitioners aver that respondent Court of Appeals erred: (a) in giving due course to respondents' appeal despite the fact that it was filed beyond the fifteen (15) day reglementary period to appeal; (b) in disregarding jurisprudence that factual findings of the trial court should not be disturbed on appeal; (c) in holding that petitioners' claim of co-ownership of the subject premises is a mere allegation unsupported by any concrete evidence; (d) in ruling that the issue of ownership, as raised by petitioners, is foreign to the issue of possession in an ejectment case; and (e) in reversing the decisions of both lower courts and ordering petitioners' eviction from the disputed premises. Anent the first issue, petitioners contend that private respondents received a copy of the decision of the Regional Trial Court on May 4, 1994 and thus they had until May 19, 1994 within which to file a petition for review before the Court of Appeals. However, private respondents filed instead a Motion for Reconsideration which was denied by the Regional Trial Court in its Order dated June 21, 1994.8|P a g e

Petitioners argue that since the motion for reconsideration is a prohibited pleading under the Rule on Summary Procedure and that the filing thereof did not interrupt the running of the prescriptive period, the petition for review which was filed by private respondents only on July 21, 1994 was already way beyond the 15-day reglementary period and should not have been given due course by respondent court. In the case of Jakihaca vs. Aquino, et al., ruled that:4

with the Court of Appeals. The period for filing a petition for review is fifteen days. If a motion for reconsideration is filed with and denied by a regional trial court, the movant has only the remaining period within which to file a petition for review. Hence, it may necessary to file a motion with the Court of Appeals for extension of time to file such petition for review. (Emphasis supplied). It is not disputed that private respondents received a copy of the decision of the Regional Trial Court of Valenzuela on May 4, 1994, and that their motion for reconsideration was filed with said court on the fifteenth day of the reglementary period to appeal, that is, May 19, 1994. In such a case, the rule is that the aggrieved party has only one day from receipt of the order denying the motion for reconsideration within which to file a petition for review before the Court of Appeals. 6 In the case at bar, private respondents received a copy of the order denying their motion for reconsideration on July 6, 1994, and, without moving for extension of time, were able to file their petition for review only on July 21, 1994; hence their appeal was not seasonably perfected. Strictly speaking, therefore, the appeal should not have been given due course, following the pronouncement in the case of Miranda vs. Guanzon, et al. 7 to the effect that the requirement regarding the perfection of an appeal within the reglementary period is not only mandatory but jurisdictional. This rule, however, has been relaxed in the latter case of Tijam, et al. vs. Sibonghanoy, et al. 8 where it was held that a party, after voluntarily submitting a cause, is estopped from attacking the jurisdiction of the court simply because it thereafter obtained an adverse decision on the merits. The Court explained therein that the "party is barred from such conduct not because the judgment or order of the court is valid and conclusive as an adjudication, but for the reason that such a practice cannot be tolerated obviously for reasons of public policy." It will be noted that the jurisdictional issue involved in the instant case was raised only for the first time in the present petition for review on certiorari. The lack or absence of appellate jurisdiction was never questioned by petitioners either in their Comment 9 submitted with respondent court or in their Motion to Dismiss Appeal 10 which was grounded solely on the fact that the petition for review filed before said court was not verified. Despite several opportunities to raise the issue of jurisdiction in the Court of Appeals, petitioners did not challenge its appellate jurisdiction and did so only after an adverse decision was rendered against them. To be more precise, they raised the issue of jurisdiction, for the nullification of the decision of the Court of Appeals, when the case was already on appeal before this Court. They are now barred from doing so under the doctrine of estoppel by laches. 11 Additionally, having participated actively in the proceedings before the appellate court, petitioners can no longer question its authority. 12

The main issue in this case demands the determination of whether the Metropolitan Trial Court, as well as the Regional Trial Court in the exercise of its appellate jurisdiction, have jurisdiction to resolve the issue of ownership in an action for unlawful detainer where the issue of possession cannot be resolved without deciding the question of ownership. In the affirmative, it becomes necessary to delineate the extent and legal effect of such adjudication. Under Republic Act No. 296, or the Judiciary Act of 1948, as amended, the jurisdiction of the then municipal and city courts over actions for forcible entry and unlawful detainer was defined as follows: Sec. 88. Original jurisdiction in civil cases. . . . In forcible entry and detainer proceedings, the municipal judge or judge of the city court shall have original jurisdiction, but the said municipal judge or city judge may receive evidence upon the question of title therein, whatever may be the value of the property, solely for the purpose of determining the character and extent of possession and damages for detention. In forcible entry proceedings, he may grant preliminary injunctions, in accordance with the provisions of the Rules of Court, to prevent the defendant from committing further acts of dispossession against the plaintiff. (As amended by Republic Acts Nos. 2613 and 3828). The law was subsequently amended by Republic Act No. 5967 13 which vested in the city courts special jurisdiction to resolve the issue of ownership in conjunction with the issue of possession whenever the question of ownership is brought in issue by the pleadings, thus: Sec. 3. Besides the civil cases over which the City Courts have jurisdiction under Section eighty-eight of Republic Act Numbered Two hundred ninety-six, as amended, it shall likewise have concurrent jurisdiction with the Court of First Instance over the following: xxx xxx xxx (c) In ejection cases where the question of ownership is brought in issue in the pleadings. The issue of ownership shall therein be resolved in conjunction with the issue of possession. This special jurisdiction of city courts was differentiated from the power ordinary accorded the inferior courts to receive evidence of title only for the purpose of determining the character or extent of the possession in dispute. This Court had the occasion to apply and interpret the aforequoted statutory provision in Pelaez vs. Reyes, et al. 14 which raised the issue of whether a decision of a city court in an ejectment case involving the question of ownership was appealable to the Regional Trial Court or to the Court of Appeals, in this wise:

this Court categorically

The Rule on Summary Procedure applies only in cases filed before the Metropolitan Trial Court and Municipal Trial Courts, pursuant to Section 36 of Batas Pambansa Blg. 129. Summary procedures have no application to cases before the Regional Trial Courts. Hence, when the respondents appealed the decision of the Municipal Trial Court to the Regional Trial Court, the applicable rules are those of the latter court. It is thus settled that a motion for reconsideration may be filed from a decision of the Regional Trial Court in the exercise of its appellate jurisdiction over decisions of the inferior courts in ejectment cases. Accordingly, this argument of petitioners has to be rejected. There is nonetheless appreciable merit in their contention that the petition for review was belatedly filed in the Court of Appeals. This is because in case of a judgment or final order of the Regional Trial Court rendered in an appeal from the judgment or final order of an inferior court, the former may be appealed to the Court of Appeals through a petition for review within fifteen days from receipt of said judgment or final order. If a motion for reconsideration is filed, the losing party has only the remaining period within which to file that petition for review. The filing, therefore, of a motion for reconsideration has the effect of only suspending the period to appeal. This rule has been clarified in the case of Lacsamana, et. al. vs.The Honorable Second Special Cases Division of the Intermediate Appellate Court, et. al., 5 as follows: 3) APPEALS BY PETITION FOR REVIEW TO THE COURT OF APPEALS The final judgment or order of a regional trial court in an appeal from the final judgment or order of a metropolitan trial court, municipal trial court and municipal circuit trial court, may be appealed to the Court of Appeals through a petition for review in accordance with Section 22 of BP No. 129 and Section 22 (b) of the Interim Rules, or to this Court through a petition for review on certiorari in accordance with Rule 45 of the Rules of Court and Section 25 of the Interim Rules. The reason for extending the period for the filing of a record on appeal is also applicable to the filing of a petition for review

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In the light of these provisions, petitioner insists that respondents should have appealed to the Court of First Instance. Specifically, his contention is that the inclusion of the issue of ownership in the pleadings did not change the character of the proceeding as an action of unlawful detainer over which city and municipal courts have original exclusive jurisdiction. He claims that his contention is supported by the very provision of Section 3, just quoted, to the effect that when ownership is brought in issue in the pleadings in an ejection case before the city courts, said courts are to resolve the issue of ownership only "in conjunction with the issue of possession." In other words, he posits that since the action is one of unlawful detainer, the main issue to be settled by the city court remains to be possession, and that to resolve the issue of ownership "in conjunction with the issue of possession" is not the same as resolving it in a judicial litigation where it is the sole issue. We are not impressed. Regardless of the juridical value of the significance petitioner is trying to thus draw from the rather peculiar language of the statute, We are of the considered opinion that the evident import of Section 3 above is to precisely grant to the city courts concurrent original jurisdiction with the courts of first instance over the cases enumerated therein, which include "ejection cases where the question of ownership is brought in issue in the pleading." To sustain petitioner's contention about the meaning of the last phrase of paragraph (c) of said section regarding the resolution of the issue of ownership "in conjunction with the issue of possession" is to disregard the very language of the main part of the section which denotes unmistakably a conferment upon the city courts of concurrent jurisdiction with the courts of first instance over ejection cases in which ownership is brought in issue in the pleadings. It is to Us quite clear that the fact that the issue of ownership is to be resolved "in conjunction with the issue of possession" simply means that both the issues of possession and ownership are to be resolved by the city courts. And the jurisdiction is concurrent with the Courts of First Instance precisely because usually questions of title are supposed to be resolved by superior courts. In other words, this grant of special jurisdiction to city courts is to be distinguished from the power ordinarily accorded to municipal courts to receive evidence of title only for the purpose of determining the extent of the possession in dispute. It being clear, therefore, that in the main ejection case, . . . , the issue of ownership is involved as shown by the pleadings therein filed by the parties, and that under Section 3 of Republic Act 5967, said city court exercised original jurisdiction over the same concurrently with the Court of First Instance of Misamis Oriental, the appeal of respondents was rightly made by them to the Court of Appeals (Emphasis ours.) However, on August 14, 1981, Batas Pambansa Blg. 129, or the Judiciary Reorganization Act of 1980, was approved and it redefined

the jurisdiction of the Court of Appeals, the Regional Trial Courts and the inferior courts. Specifically, the new law modified the power of inferior courts to resolve the issue of ownership in forcible entry and unlawful detainer cases, subject, however, to the qualification that a resolution thereof shall not be for the purpose of determining the issue of possession, to wit: Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise. xxx xxx xxx (2) Exclusive original jurisdiction over cases of forcible entry and unlawful detainer: Provided, That when in such cases, the defendant raises the question of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession. Subsequently, this Court promulgated its Interim Rules and Guidelines in the implementation of Batas Pambansa Blg. 129, Section 10 of which provides: 10. Jurisdiction in ejectment cases. Metropolitan trial courts, municipal trial courts, and municipal circuit trial courts, without distinction, may try cases of forcible entry and detainer even if the question of ownership is raised in the pleadings and the question of possession could not be resolved without deciding the issue of ownership, but the question of ownership shall be resolved only to determine the issue of possession. These issuances changed the former rule under Republic Act No. 296 which merely allowed inferior courts to receive evidence upon the question of title solely for the purpose of determining the extent and character of possession and damages for detention, which thereby resulted in previous rulings of this Court to the effect that if it appears during the trial that the principal issue relates to the ownership of the property in dispute and any question of possession which may be involved necessarily depends upon the result of the inquiry into the title, then the jurisdiction of the municipal or city courts is lost and the action should be dismissed. With the enactment of Batas Pambansa Blg. 129, the inferior courts now retain jurisdiction over an ejectment case even if the question of possession cannot be resolved without passing upon the issue of ownership, with the express qualification that such issue of ownership shall be resolved only for the purpose of determining the issue of possession. In other words, the fact that the issues of ownership and possession de facto are intricately interwoven will not cause the dismissal of the case for forcible entry and unlawful detainer on jurisdictional grounds. The intendment of the law was reinforced by the revision of the former Rule on Summary Procedures involving special cases before

the inferior courts, which was promulgated pursuant to Section 36 of Batas Pambansa Blg. 129. The old Rule, which took effect on August 1, 1983, stated that: Sec. 1. Scope This Rule shall govern the procedure in the Metropolitan Trial Courts, the Municipal Trial Courts, and the Municipal Circuit Trial Courts in the following cases: A. Civil Cases (1) Cases of forcible entry and unlawful detainer, except where the question of ownership is involved, or where the damages or unpaid rentals sought to be recovered by the plaintiff exceed twenty thousand pesos (P20,000.00) at the time of the filing of the complaint. This Rule was revised pursuant to a resolution of the Court En Banc which took effect on November 15, 1991, and the aforequoted provision now reads as follows: Sec. 1. Scope. This rule shall govern the summary procedure in the Metropolitan Trial Courts, the Municipal Trial Courts in Cities, the Municipal Trial Courts, and the Municipal Circuit Trial Courts in the following cases falling within their jurisdiction: A. Civil Cases (1) All cases of forcible entry and unlawful detainer, irrespective of the amount of damages or unpaid rentals sought to be recovered. Where attorney's fees are awarded, the same shall not exceed twenty thousand pesos (P20,000.00). Under the original Rule, ejectment cases were covered by the summary rules only where the unpaid rentals do not exceed P20,000.00 and no question of ownership is involved. As presently formulated, however, all ejectment cases are now unqualifiedly covered by the summary procedure, which necessarily implies that even if there is a need to resolve the issued of ownership, such fact will not deprive the inferior courts of jurisdiction over these cases. Subsequently, Republic Act No. 7691, entitled "An Act Expanding the Jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts, Amending for the Purpose Batas Pambansa Blg. 129, otherwise known as the 'Judiciary Reorganization Act of 1980'", was passed and took effect on April 15, 1994. 15 The jurisdiction of the inferior courts over forcible entry and unlawful detainer cases as defined under Batas Pambansa Blg. 129 was retained. In addition, they now exercise limited original jurisdiction over civil actions involving title to, or possession of, real property or any interest therein depending on the assessed value and location of the property. Parenthetically, it might be argued that since inferior courts are anyway vested with jurisdiction over real actions, then it can very10 | P a g e

well resolve the issue of ownership raised in the ejectment case, under the conditions stated in Section 32(3) of Batas Pambansa Blg. 129, as amended by Republic Act No. 7691. It must not be overlooked, however, that proceedings in ejectment cases are summary in nature, whereas actions for recovery of ownership require a full-blown trial on the merits. The difference in the procedure in special civil actions, like ejectment, and in ordinary civil actions, such as accion reinvindicatoria, inveigh against the consolidation of said cases or the joinder of the different causes of action involved. It could also be violative under certain circumstances of the rule on permissive joinder of causes of action since Section 6 of Rule 2 requires inter alia due observance of the rules on jurisdiction and joinder of parties, and that said causes of action arise out of the same contract, transaction or relation between the parties. As the law on forcible entry and unlawful detainer cases now stands, even where the defendant raises the question of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts nevertheless have the undoubted competence to resolve the issue of ownership albeit only to determine the issue of possession. 16 On the bases of the foregoing disquisitions, it is clear that prior to the effectivity of Batas Pambansa Blg. 129, the jurisdiction of inferior courts was confined to receiving evidence of ownership in order to determine only the nature and extent of possession, by reason of which such jurisdiction was lost the moment it became apparent that the issue of possession was intricately interwoven with that of ownership. The law, as revised, now provides instead that when the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession. On its face, the new Rule on Summary Procedure was extended to include within the jurisdiction of the inferior courts ejectment cases which likewise involve the issue of ownership. This does not mean, however, that blanket authority to adjudicate the issue of ownership in ejectment suits has been thus conferred on the inferior courts. At the outset, it must here be stressed that the resolution of this particular issue concerns and applies only to forcible entry and unlawful detainer cases where the issue of possession is intimately intertwined with the issue of ownership. It finds no proper application where it is otherwise, that is, where ownership is not in issue, or where the principal and main issue raised in the allegations of the complaint as well as the relief prayed for make out not a case for ejectment but one for recovery of ownership. In the case of De la Santa vs. Court of Appeals, et al., 17 this Court, in making a distinction between the reception of evidence and the resolution of the issue of ownership, held that the inferior court may look into the evidence of title or ownership and possession de

jure insofar as said evidence would indicate or determine the nature of possession. It cannot, however, resolve the issue of ownership, that is, by declaring who among the parties is the true and lawful owner of the subject property, because the resolution of said issue would effect an adjudication on ownership which is not sanctioned in the summary action for unlawful detainer. With this as a premise and taking into consideration the amendment introduced by Batas Pambansa Blg. 129, it may be suggested that inferior courts are now conditionally vested with adjudicatory power over the issue of title or ownership raised by the parties in an ejectment suit. Withal, it will be observed, that the passage of Batas Pambansa Blg. 129 has spawned seemingly conflicting jurisprudence on the proper interpretation and application thereof. Thus, in several cases decided by the Court after the effectivity of this law, regardless of whether the complaint for ejectment was filed with the inferior court prior thereto or otherwise, it was held that the jurisdiction of the inferior court is lost and the ejectment case should be dismissed where the issue of possession cannot be resolved without determining the issue of ownership. 18 In all of these cases, the Court declared that inferior courts may only admit evidence and proof of ownership but they cannot adjudicate on the question of ownership. Conversely, in also not a few instances, the jurisdiction of the inferior courts to resolve the issue of ownership in order to determine the issue of possession was upheld by this Court. 19 Apparently, it could have been some imprecision in language or a misperception of the statutory text which generated the ostensible doctrinal variance. After due deliberation, we find and so hold that by virtue of the express mandate set forth in Section 33(2) of Batas Pambansa Blg. 129, inferior courts have jurisdiction to resolve the question of ownership raised as an incident in an ejectment case where a determination thereof is necessary for a proper and complete adjudication of the issue of possession. Certain guidelines, however, must be observed in the implementation of this legislative prescription, viz.: 1. The primal rule is that the principal issue must be that of possession, and that ownership is merely ancillary thereto, in which case the issue of ownership may be resolved but only for the purpose of determining the issue of possession. Thus, as earlier stated, the legal provision under consideration applies only where the inferior court believes and the preponderance of evidence shows that a resolution of the issue of possession is dependent upon the resolution of the question of ownership. 2. It must sufficiently appear from the allegations in the complaint that what the plaintiff really and primarily seeks is the restoration of possession. 20 Consequently, where the allegations of the complaint as well as the reliefs prayed for clearly establish a case for the recovery of ownership, and not merely one for the recovery of possession de facto, or where the averments plead the claim of material possession as a mere elemental attribute of such claim for

ownership, 21 or where the issue of ownership is the principal question to be resolved, 22 the action is not one for forcible entry but one for title to real property. 3. The inferior court cannot adjudicate on the nature of ownership where the relationship of lessor and lessee has been sufficiently established in the ejectment case, 23 unless it is sufficiently established that there has been a subsequent change in or termination of that relationship between the parties. This is because under Section 2(b), Rule 131 of the Rules of Court, the tenant is not permitted to deny the title of his landlord at the time of the commencement of the relation of landlord and tenant between them. 4. The rule in forcible entry cases, but not in those for unlawful detainer, is that a party who can prove prior possession can recover such possession even against the owner himself. Regardless of the actual condition of the title to the property and whatever may be the character of his prior possession, if he has in his favor priority in time, he has the security that entitles him to remain on the property until he is lawfully ejected by a person having a better right through an accion publiciana oraccion reivindicatoria. 24 Corollarily, if prior possession may be ascertained in some other way, then the inferior court cannot dwell upon or intrude into the issue of ownership. 5. Where the question of who has prior possession hinges on the question of who the real owner of the disputed portion is, the inferior court may resolve the issue of ownership and make a declaration as to who among the contending parties is the real owner. 25 In the same vein, where the resolution of the issue of possession hinges on a determination of the validity and interpretation of the document of title or any other contract on which the claim of possession is premised, the inferior court may likewise pass upon these issues. This is because, and it must be so understood, that any such pronouncement made affecting ownership of the disputed portion is to be regarded merely as provisional, hence, does not bar nor prejudice an action between the same parties involving title to the land. 26 Moreover, Section 7, Rule 70 of the Rules of Court expressly provides that the judgment rendered in an action for forcible entry or unlawful detainer shall be effective with respect to the possession only and in no wise bind the title or affect the ownership of the land or building. The interpretative rules we have herein adopted are not without justification. It is our considered opinion that they are more in keeping with the avowed objective of actions for forcible entry and unlawful detainer which have purposely been made summary in nature so that there may be a peaceful, speedy and expeditious means of preventing an alleged illegal possessor of property from unjustly continuing his possession for a long time, thereby insuring the maintenance of peace and order in the community, as, otherwise, the party illegally deprived of possession might feel the despair of long waiting and decide, as a measure of self-protection, to take the law into his hands and seize the same by force and violence. 27A