THIRD DIVISION

[G.R. No. 137013. May 6, 2005]

RUBEN SANTOS, petitioner, vs. SPOUSES TONY AYON and MERCY AYON, respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
For our resolution is the petition for review on certiorari assailing the Decision[1] of the Court of
Appeals dated October 5, 1998 in CA-G.R. SP No. 4735 and its Resolution[2] dated December 11,
1998 denying the motion for reconsideration.
The petition alleges that on November 6, 1996, Ruben Santos, petitioner, filed with the Municipal
Trial Court in Cities (MTCC), Branch 2, Davao City a complaint for illegal detainer against
spouses Tony and Mercy Ayon, respondents, docketed as Civil Case No. 3506-B-96.
In his complaint, petitioner averred that he is the registered owner of three lots situated at
Lanzona Subdivision, Matina, Davao City, covered by Transfer Certificates of Title (TCT) Nos.
108174, 108175, and 108176. Respondent spouses are the registered owners of an adjacent
parcel of land covered by TCT No. T-247792. The previous occupant of this property built a
building which straddled both the lots of the herein parties. Respondents have been using the
building as a warehouse.
Petitioner further alleged in his complaint that in 1985, when he bought the three lots, he
informed respondents that the building occupies a portion of his land. However, he allowed them
to continue using the building. But in 1996, he needed the entire portion of his lot, hence, he
demanded that respondents demolish and remove the part of the building encroaching his
property and turn over to him their possession. But they refused. Instead, they continued
occupying the contested portion and even made improvements on the building. The dispute was
then referred to the barangay lupon, but the parties failed to reach an amicable settlement.
Accordingly, on March 27, 1996, a certification to file action was issued.
In their answer, respondents sought a dismissal of this case on the ground that the court has no
jurisdiction over it since there is no lessor-lessee relationship between the parties. Respondents
denied they were occupying petitioners property by mere tolerance, claiming they own the
contested portion and have been occupying the same long before petitioner acquired his lots in
1985.
On July 31, 1997, the MTCC rendered its Decision in favor of petitioner, thus:
WHEREFORE, judgment is rendered in favor of the plaintiff and against the defendants
ordering the latter, their successors-in-interest and other persons acting in their behalf to vacate
the portion of the subject properties and peacefully surrender possession thereof to plaintiff as
well as dismantle/remove the structures found thereon.

Defendants are further ordered to pay reasonable value for the use and occupation of the
encroached area in the amount of One Thousand Pesos (P1,000.00) a month beginning September
1996 and the subsequent months thereafter until premises are vacated; to pay attorneys fees of
Ten Thousand Pesos (P10,000.00); and to pay the costs of suit.
SO ORDERED.[3]
On appeal, the Regional Trial Court (RTC), Branch 11, Davao City, in its Decision dated
February 12, 1998 in Civil Case No. 25, 654-97, affirmed in toto the MTCC judgment.[4] The
RTC upheld the finding of the MTCC that respondents occupation of the contested portion was
by mere tolerance. Hence, when petitioner needed the same, he has the right to eject them
through court action.
Respondents then elevated the case to the Court of Appeals through a petition for review. In its
Decision dated October 5, 1988 now being challenged by petitioner, the Court of Appeals held
that petitioners proper remedy should have been an accion publiciana before the RTC, not an
action for unlawful detainer, thus:
In this case, petitioners were already in possession of the premises in question at the time private
respondent bought three (3) lots at the Lanzona Subdivision in 1985, a portion of which is
occupied by a building being used by the former as a bodega. Apart from private respondents
bare claim, no evidence was alluded to show that petitioners possession was tolerated by (his)
predecessor-in-interest. The fact that respondent might have tolerated petitioners possession is
not decisive. What matters for purposes of determining the proper cause of action is the nature of
petitioners possession from its inception. And in this regard, the Court notes that the complaint
itself merely alleges that defendants-petitioners have been occupying a portion of the above
properties of the plaintiff for the past several years by virtue of the tolerance of the plaintiff.
Nowhere is it alleged that his predecessor likewise tolerated petitioners possession of the
premises. x x x.
Consequently, x x x, respondent should present his claim before the Regional Trial Court in an
accion publiciana and not before the Municipal Trial Court in a summary proceeding of unlawful
detainer.
WHEREFORE, the decision under review is hereby REVERSED and SET ASIDE. Accordingly,
the complaint for unlawful detainer is ordered DISMISSED.[5]
Petitioner filed a motion for reconsideration, but was denied by the Appellate Court in its
Resolution dated December 11, 1998.
Hence, the instant petition for review on certiorari ascribing to the Court of Appeals the
following errors:
I

THE HONORABLE COURT OF APPEALS MISAPPLIED THE LAW IN DISMISSING THE

INSTANT CASE ON THE GROUND THAT PETITIONER SHOULD PRESENT HIS CLAIM
BEFORE THE REGIONAL TRIAL COURT IN AN ACCION PUBLICIANA.
II
THE FINDINGS OF THE HONORABLE COURT OF APPEALS IS NOT IN CONSONANCE
WITH EXISTING LAWS AND JURISPRUDENCE.
The sole issue here is whether the Court of Appeals committed a reversible error of law in
holding that petitioners complaint is within the competence of the RTC, not the MTCC.
Petitioner contends that it is not necessary that he has prior physical possession of the questioned
property before he could file an action for unlawful detainer. He stresses that he tolerated
respondents occupancy of the portion in controversy until he needed it. After his demand that
they vacate, their continued possession became illegal. Hence, his action for unlawful detainer
before the MTCC is proper.
Respondents, in their comment, insisted that they have been in possession of the disputed
property even before petitioner purchased the same on April 10, 1985. Hence, he cannot claim
that they were occupying the property by mere tolerance because they were ahead in time in
physical possession.
We sustain the petition.
It is an elementary rule that the jurisdiction of a court over the subject matter is determined by the
allegations of the complaint and cannot be made to depend upon the defenses set up in the answer
or pleadings filed by the defendant.[6] This rule is no different in an action for forcible entry or
unlawful detainer.[7] All actions for forcible entry or unlawful detainer shall be filed with the
proper Metropolitan Trial Courts, the Municipal Trial Courts and the Municipal Circuit Trial
Courts, which actions shall include not only the plea for restoration of possession but also all
claims for damages and costs arising therefrom.[8] The said courts are not divested of jurisdiction
over such cases even if the defendants therein raises the question of ownership over the litigated
property in his pleadings and the question of possession cannot be resolved without deciding the
issue of ownership.[9]
Section 1, Rule 70 on forcible entry and unlawful detainer of the 1997 Rules of Civil Procedure,
as amended, reads:
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.
Under the above provision, there are two entirely distinct and different causes of action, to wit:
(1) a case for forcible entry, which is an action to recover possession of a property from the
defendant whose occupation thereof is illegal from the beginning as he acquired possession by
force, intimidation, threat, strategy or stealth; and (2) a case for unlawful detainer, which is an
action for recovery of possession from defendant whose possession of the property was
inceptively lawful by virtue of a contract (express or implied) with the plaintiff, but became
illegal when he continued his possession despite the termination of his right thereunder.[10]
Petitioners complaint for unlawful detainer in Civil Case No. 3506-B-96 is properly within the
competence of the MTCC. His pertinent allegations in the complaint read:
4. That defendants (spouses) have constructed an extension of their residential house as well
as other structures and have been occupying a portion of the above PROPERTIES of the plaintiff
for the past several years by virtue of the tolerance of the plaintiff since at the time he has no
need of the property;
5.
That plaintiff needed the property in the early part of 1996 and made demands to the
defendants to vacate and turn over the premises as well as the removal (of) their structures
found inside the PROPERTIES of plaintiff; that without any justifiable reasons, defendants
refused to vacate the portion of the PROPERTIES occupied by them to the damage and
prejudice of the plaintiff.
6.
Hence, plaintiff referred the matter to the Office of the Barangay Captain of Matina
Crossing 74-A, Davao City for a possible settlement sometime in the latter part of February
1996. The barangay case reached the Pangkat but no settlement was had. Thereafter, a
Certification To File Action dated March 27, 1996 was issued x x x;
x x x.[11] (underscoring ours)
Verily, petitioners allegations in his complaint clearly make a case for an unlawful detainer. We
find no error in the MTCC assuming jurisdiction over petitioners complaint. A complaint for
unlawful detainer is sufficient if it alleges that the withholding of the possession or the refusal to
vacate is unlawful without necessarily employing the terminology of the law.[12] Here, there is an
allegation in petitioners complaint that respondents occupancy on the portion of his property is
by virtue of his tolerance. Petitioners cause of action for unlawful detainer springs from
respondents failure to vacate the questioned premises upon his demand sometime in 1996.
Within one (1) year therefrom, or on November 6, 1996, petitioner filed the instant complaint.
It bears stressing that possession by tolerance is lawful, but such possession becomes unlawful
when the possessor by tolerance refuses to vacate upon demand made by the owner. Our ruling
in Roxas vs. Court of Appeals[13] is applicable in this case: A person who occupies the 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 against him.
WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution of the Court
of Appeals in CA-G.R. SP No. 47435 are hereby REVERSED and SET ASIDE. The Decision
dated February 12, 1998 of the Regional Trial Court, Branch 11, Davao City in Civil Case No.
25, 654-97, affirming the Decision dated July 31, 1997 of the Municipal Trial Court in Cities,
Branch 2, Davao City in Civil Case No. 3506-B-96, is hereby REINSTATED.
SO ORDERED.
Panganiban, (Chairman), Corona, Carpio-Morales, and Garcia, JJ., concur.

SECOND DIVISION
[G.R. No. 149599. May 16, 2005]
RUDY LAO, petitioner, vs. JAIME LAO, respondent.
DECISION
CALLEJO, SR., J.:
As early as 1956, the spouses Julian Lao and Anita Lao had constructed a building on a parcel of
land in Balasan, Iloilo City, owned by Alfredo Alava and covered by Transfer Certificate of Title
(TCT) No. 28382. They then occupied and leased the same without any written agreement
thereon. Anita Lao also put up her business in the premises.
On May 12, 1982, Alfredo Alava, as lessor, and Anita Lao, as lessee, executed a Contract of
Lease[1] over the said property. The parties agreed that the lease of the property was to be for a
period of 35 years, at an annual rental of P120.00. However, the contract of lease was not filed
with the Office of the Register of Deeds; hence, was not annotated at the dorsal portion of the
said title.
Aside from Anita Lao, petitioner Rudy Lao also leased another portion of the same property
where he put up his business.[2] In fact, Anita Laos building was adjacent to where the petitioner
conducted his business. At that time, the petitioner knew that Anita Lao and her husband were
the owners of the said building. He also knew that she had leased that portion of the property,
and that respondent Jaime Lao, their son, managed and maintained the building, as well as the
business thereon.
In the meantime, on March 21, 1995, the petitioner purchased the property from Alava, and was
later issued TCT No. 152,097 in his name. By then, the property had been classified as

commercial, but the yearly rental of P120.00 in the contract of lease between Alava and Anita
Lao subsisted.
On July 14, 1997, the petitioner filed a Complaint for Unlawful Detainer against the respondent
with the 1st Municipal Circuit Trial Court (MCTC) of Carles-Balasan, Iloilo City. The petitioner
alleged, inter alia, that the respondent had occupied a portion of his property without any lease
agreement and without paying any rentals therefor, and that the same was only through his
tolerance and generosity. The petitioner prayed that, after due proceedings, judgment be
rendered in his favor as follows:
1.
Ordering the defendant, his agents and/or representatives and all persons claiming under
him, to vacate the premises he occupies, remove all improvements thereon and restore
possession thereof to the plaintiff;
2.
Directing the defendant, his agents and/or representatives and all persons claiming under
him, when proper, jointly and severally, to pay plaintiff the sums of: P50,000.00 as attorneys
fees; at least P15,000.00 as miscellaneous litigation and necessary expenses; such compensation
for use of the portion she (sic) occupies, at the rate of P5,000.00 a month from January 24, 1997,
until the full and complete surrender thereof to the plaintiff; and
3.

The costs of this suit.[3]

In his answer to the complaint, the respondent alleged that the petitioner had no cause of action
against him, the truth being that the lessee of the property was his mother, Anita Lao, as
evidenced by a contract of lease executed by Alava, the former owner thereof. He further alleged
that she had been paying the annual rentals therefor, the last of which was on July 16, 1997 and
evidenced by a receipt.[4] He further alleged that she had designated him as manager to maintain
the building, pay rentals and operate the business. He then prayed for the dismissal of the
complaint.
During the preliminary conference, the respondent admitted that he was in actual possession of
the property. For his part, the petitioner admitted that he had been renting another portion of the
same property from Alava for years, and that his business establishment and that of Anita Laos
were adjacent to each other. He also admitted that Anita Lao had been renting the said portion of
the property for years before he bought it.
The respondent adduced in evidence the contract of lease[5] between his mother, Anita Lao, and
Alava.
On March 4, 1999, the MCTC rendered judgment in favor of the petitioner and against the
respondent. The fallo of the decision reads:
WHEREFORE, based on the foregoing circumstances, JUDGMENT is hereby rendered in favor
of the Plaintiff, Rudy Lao and as against defendant, Jaime Lao, as follows:

1.
Ordering defendant, Jaime Lao, his successors-in-interest, agents, members of his family,
privies or any person or persons claiming under his name to vacate the portion of Lot No. 3
occupied by him, and to deliver the physical possession thereof to plaintiff, Rudy Lao;
2.
Ordering defendant to pay plaintiff, Rudy Lao, the sum of P3,000.00 representing as the
monthly rentals of the premises occupied by defendant on Lot No. 3 starting the month of
January 1997, until the possession thereof is actually delivered and turned over to the plaintiff;
3.
Ordering defendant, Jaime Lao, to pay plaintiff the amount of P20,000.00 as attorneys
fees;
4.
Ordering defendant, Jaime Lao, to pay Plaintiff, Rudy Lao, the sum of P10,000.00
representing as litigation expenses; and to pay the costs of this suit.
SO ORDERED.[6]
The respondent appealed the decision to the Regional Trial Court (RTC) of Barotac Viejo, Iloilo
City, Branch 66, which rendered judgment on January 28, 2000 affirming the said decision with
modification. The fallo of the decision reads:
WHEREFORE, the decision appealed from this court is hereby affirmed with a modification that
defendant-appellant Jaime Lao is ordered to pay plaintiff-appellee Rudy Lao the sum of
P1,000.00 per month as reasonable use of the land subject of the case from January 1997 until
possession is turned over to the plaintiff; to pay Rudy Lao the sum of P10,000.00 attorneys fees
and P5,000.00 litigation expenses.
With cost against the defendant-appellant.
SO ORDERED.[7]
The RTC ruled that under Article 1676 of the New Civil Code, the petitioner was the purchaser
of the property and had the right to terminate the lease between Alava and Anita Lao, it
appearing that the lease contract was not registered with the Office of the Register of Deeds. Not
being the lessee, the respondent could not invoke the same provision. The trial court also held
that the respondent, not his mother, was the real party as defendant in the MCTC, since it was he
who was in actual possession of the property. The RTC maintained that if Anita Lao was sued as
defendant and was ordered evicted, the decision would not be binding on the respondent since he
was not impleaded as defendant.
The respondent filed a petition for review with the Court of Appeals (CA), asserting that
I.
THE HONORABLE REGIONAL TRIAL COURT SERIOUSLY ERRED IN
AFFIRMING THE ERRONEOUS FINDING OF THE MCTC THAT THIS CASE WAS
PROPERLY BROUGHT AGAINST THE DEFENDANT WHEN HE IS ONLY AN AGENT
OF THE REAL PARTY-IN-INTEREST, ANITA LAO.

II.
THE HONORABLE REGIONAL TRIAL COURT SERIOUSLY ERRED IN
AFFIRMING THE ERRONEOUS FINDING OF THE MCTC THAT THERE IS NO AGENCY
BETWEEN ANITA LAO AND THE DEFENDANT-APPELLANT BECAUSE THERE WAS
NO DOCUMENTARY EVIDENCE PRESENTED TO SHOW THE FACT OF AGENCY.
III.
THE HONORABLE REGIONAL TRIAL COURT SERIOUSLY ERRED IN
IGNORING THE FACT THAT THE MCTC BLATANTLY DISREGARDING (sic) THE PRETRIAL CONFERENCE ORDER IT ISSUED, ISSUING A DECISION CONTRARY TO THE
FACTS ADMITTED BY [THE] PARTIES THEMSELVES ESPECIALLY THE ADMISSION
OF THE PLAINTIFF-APPELLEE THAT HE KNOWS OF THE EXISTENCE OF THE
LEASE.[8]
On February 27, 2001, the CA rendered judgment setting aside and reversing the decision of the
RTC. The CA ruled that the real party-in-interest as defendant in the MCTC was Anita Lao, the
lessee of the property, and not the respondent who was merely the administrator/manager of
Anita Laos building and the occupant of the property.
The petitioners motion for the reconsideration of the decision having been denied by the
appellate court, he now comes to this Court for relief via a petition for review on certiorari,
claiming that:
The Hon. Court of Appeals committed a reversible error when it converted petitioners cause of
action against respondent into a cause of action against respondents mother; and on the basis
thereof, dismissed petitioners complaint for ejectment against respondent under the mistaken
finding that said ejectment case should have been filed against respondents mother.[9]
The petitioner avers that the respondent was the real party-in-interest as defendant in the
complaint for unlawful detainer because the respondents possession of the property was in his
personal capacity, and not as the caretaker of the property and the business in the building owned
by Anita Lao, the lessee thereon. The petitioner argues that, in an ejectment suit, the threshold
issue is who has the right to the material or de facto possession of the subject property as
distinguished from the de jure possession thereof; hence, the defendant in an ejectment case is
the person in actual physical possession of the property.
The petitioner insists that the respondent, having admitted in the MCTC that he was in actual
possession of the property and that in fact, Anita Lao was no longer staying in the property after
her husband died, is the real party-in-interest, as defendant. He posits that if he filed a complaint
for ejectment against Anita Lao, it would be dismissed because it was the respondent, and not his
mother, who was in actual possession of the property.
The petition has no merit.
We agree with the petitioner that, in ejectment cases, the word possession means nothing more
than actual physical possession, not legal possession, in the sense contemplated in civil law.[10]
The only issue in such cases is who is entitled to the physical or material possession of the

property involved, independent of any claim of ownership set forth by any of the partylitigants.[11]
We, likewise, conform to the petitioners contention that in an action for unlawful detainer, the
real party-in-interest as party-defendant is the person who is in possession of the property
without the benefit of any contract of lease and only upon the tolerance and generosity of its
owner. Such occupant is bound by an implied promise that he will vacate the premises upon
demand. This situation is analogous to that of a lessee or tenant whose term has expired, but
whose occupancy continued by mere tolerance of the owner.[12] He is the real party-in-interest as
defendant.[13]
However, the records in this case show that the respondent has been in possession of the property
subject of the complaint not by mere tolerance or generosity of the petitioner, but as the manager
of his mother, Anita Lao, who conducted her business in the building/warehouse which stood on
a portion of the property leased from Alava, the former owner. Contrary to the petitioners
claim, the respondents possession of the property was in behalf of his mother, the lessee thereof,
and not in his own right, independently of that of his mother.
The petitioner cannot feign ignorance of the existence of the lease of the subject property by
Anita Lao, the existence of the building and her business thereon, and the fact that the respondent
managed his mothers building and business. It must be stressed that during the preliminary
conference of the parties before the MCTC, the petitioner admitted his knowledge of the
foregoing facts.
While it is true that the contract of lease between Alava and Anita Lao was not filed in the Office
of the Register of Deeds and annotated at the dorsal portion of the petitioners title over the
property, nevertheless, the petitioner was bound by the terms and conditions of the said contract
of lease. The lease, in effect, became a part of the contract of sale.[14]
Under Section 2, Rule 70 of the Rules of Court, the petitioner, as the vendee of the property, had
the right to file an action for unlawful detainer against Anita Lao upon demand, but for breach of
the contract of lease:
SEC. 2. Lessor to proceed against lessee only after demand. Unless otherwise stipulated, such
action by the lessor shall be commenced only after demand to pay or comply with the conditions
of the lease and to vacate is made upon the lessee, or by serving written notice of such demand
upon the person found on the premises, or by posting such notice on the premises if no person be
found thereon, and the lessee fails to comply therewith after fifteen (15) days in the case of land
or five (5) days in the case of buildings.
If the petitioner had done so and judgment was rendered in his favor, ordering Anita Lao to
vacate the property, the respondent herein, who is in possession of the property for and in her
behalf, would then have to abide by the decision and vacate the same. This was the ruling of the
Court in Oro Cam Enterprises, Inc. v. Court of Appeals,[15] thus:

 It is well-settled that a judgment in an ejectment suit is binding not only upon the defendants
in the suit but also against those not made parties thereto, if they are:
a)
trespassers, squatters or agents of the defendant fraudulently occupying the property to
frustrate the judgment;
b)
guests or other occupants of the premises with the permission of the
defendant;
c)
transferees pendente lite;
d)
sublessee;
e)
co-lessees; or
f)
members of the family, relatives and other privies of the defendant.[16]
Apparently, the petitioner believed that it was unfair for Anita Lao to be paying an annual rental
of only P120.00 for the portion of the property leased by her, considering that the said lot had
already been classified as commercial property. Moreover, it was not Anita Lao who stayed in
the leased premises; it was her son. The petitioner had no cause of action for unlawful detainer
against Anita Lao because of the subsisting contract of lease; hence, he could not file the
complaint against her. What the petitioner had no right to do directly, he did indirectly by filing
a complaint for unlawful detainer against her son, the respondent, believing that by so doing, he
will be rid of Anita Laos lease contract.
The Court, thus, rules that the CA acted in accord with law when it ordered the dismissal of the
complaint.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. Costs
against the petitioner.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

FIRST DIVISION
[G.R. No. 150755. June 28, 2005]
RENE GANILA, EDUARDO DUMADA-OG, SR., RAFAEL GANILA, JOSE PASTRANA,
LOURDES GANILA, FLORENTINO GANILA, SERAFIN GANILA, LORETO ARELLANO,
CONRADO GANILA, VIVENCIO ALVIOR, EDUARDO GANTALA, AMPARO
VILLANUEVA, ELEUTERIO SILVA, ADELINA GANILA, FELIZARDO GANILA, SR.,
ENRIQUE GANILA, ABRAHAM TANONG, EMILIO ALFARAS, JR., BAPTIST
CHRISTIAN LEARNING CENTER, petitioners, vs. HON. COURT OF APPEALS AND
VIOLETA C. HERRERA, respondents.
DECISION

QUISUMBING, J.:
For review on certiorari are the Decision[1] dated March 30, 2001 of the Court of Appeals in
CA-G.R. SP No. 58191, and its Resolution[2] dated October 18, 2001 denying the motion for
reconsideration. The assailed decision denied the petition to set aside the Resolution[3] of the
Regional Trial Court (RTC) of San Miguel, Jordan, Guimaras, Branch 65, affirming the Order of
the Municipal Circuit Trial Court (MCTC) for the 19 petitioners to vacate the contested parcel of
land.
The facts are as follows:
On March 19, 1997, private respondent Violeta Herrera filed 21 ejectment Complaints[4] before
the 16th MCTC, Jordan-Buenavista-Nueva Valencia, Jordan, Guimaras. Private respondent
alleged that she owns Lot 1227 of the Cadastral Survey of Jordan, Guimaras, with an area of
43,210 square meters; that she inherited the lot from her parents; and that she only tolerated
petitioners to construct residential houses or other improvements on certain portions of the lot
without rental. Sometime in September or October 1996, private respondent demanded that the
petitioners vacate the lot and remove their houses and other improvements thereon. Petitioners
refused, despite offer of money by way of assistance to them. After the barangay conciliation
failed, private respondent filed the complaints.
In their Answers,[5] eight[6] of the petitioners claimed that Lot 1227 was formerly a shoreline
which they developed when they constructed their respective houses. Another eight[7] maintained
that their houses stood on Lot 1229 of the Cadastral Survey of Jordan, Guimaras. The other
three[8] asserted that Lot 1227 is a social forest area.
At the preliminary conference, the parties agreed to designate two geodetic engineers as
commissioners of the MCTC to conduct a relocation survey of Lot 1227 and to identify who
among the petitioners have houses within the lot.[9]
The commissioners reported that: (1) the house of Henry Gabasa, defendant in Civil Case No.
288-J, is almost outside Lot 1227; (2) the house of Ludovico Amatorio, defendant in Civil Case
No. 289-J, diagonally traversed the boundary; and (3) the houses of the 19 petitioners are inside
Lot 1227.[10]
Eight months after herein petitioners failure to comment on the manifestation of private
respondent to terminate the preliminary conference, the MCTC terminated the preliminary
conference.[11] Thereafter, petitioners counsel Atty. Nelia Jesusa L. Gonzales failed to file her
clients position papers and affidavits, even after they sought a 30-day extension to file the
same.[12]
Consequently, the MCTC decided the cases as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff
whereby each of the twenty-one (21) defendants are hereby ordered:

1.

To vacate Lot 1227 of the Cadastral Survey of Jordan, Guimaras;

2.

To pay Two Hundred Pesos (P200.00) per month from October, 1996 as compensation
for the use of the property until the same is vacated; and

3.

To pay Two Thousand Pesos (P2,000.00) as attorneys fees and litigation expenses.

SO ORDERED.[13]
Petitioners appealed to the RTC, Branch 65, at Jordan, Guimaras, which decided as follows:
WHEREFORE, premises considered, the decision in Civil Cases Nos. 0270-J, 0272-J, 0273-J,
0274-J, 0275-J, 0276-J, 0277-J, 0278-J, 0279-J, 0280-J, 0281-J, 0282-J, 0283-J, 0284-J, 0285-J,
0286-J, 0287-J, 0291-J and 0292-J are hereby affirmed.
The decision of the court below in Civil Cases Nos. 0288-J and 0289-J are set aside. Civil Cases
Nos. 0288-J and 0289-J are hereby DISMISSED.
SO ORDERED.[14]
The RTC ruled that the evidence showed the better right of private respondent to possess Lot
1227. Private respondents position paper, affidavit and tax declaration supported her allegations.
In addition, the commissioners report and sketch plan showed that indeed petitioners occupy Lot
1227. On the other hand, according to the RTC, the petitioners failed to present evidence which
would show that they are entitled to possess the lot.
Based on the sketch plan, the RTC dismissed the cases against Gabasa and Amatorio since their
houses occupy only a small area of Lot 1227. It declared that Gabasa and Amatorio believed in
good faith that the whole area they occupied was part of the seashore.
The 19 petitioners, who were ordered to vacate the lot, filed a joint petition for review with the
Court of Appeals. The appellate court denied the petition. Petitioners moved for reconsideration
and filed an amended petition. The Court of Appeals, however, affirmed the factual findings and
conclusions arrived at by the trial courts and denied the amended petition for lack of merit.[15] It
also denied the motion for reconsideration.
Petitioners are now before us, on a petition for review, alleging that:
The Honorable Court of Appeals, with due respect and deference, committed a reversible error in
the interpretation/application of the law in the instant case and in the appreciation of the facts and
evidence presented. The Court of Appeals gravely abused its discretion when it denied and
dismissed the petition filed by the petitioners.[16]
After considering the parties submissions, we find three basic issues: (1) Did the MCTC err in
taking jurisdiction over and deciding the cases? (2) Did the RTC err in sustaining the MCTCs

judgment? (3) Did the CA err in denying the petition for review filed by the 19 petitioners
ordered to be ejected?
Petitioners insist that private respondent should have filed an action to recover possession de
jure, not a mere complaint for ejectment, for two reasons. One, they possessed Lot 1227 in good
faith for more than 30 years in the concept of owners. And two, there was no withholding of
possession since private respondent was not in prior possession of the lot.
Private respondent states in her Comment before us that the allegations in her Complaints make
out a clear case of unlawful detainer which is cognizable by the MCTC. We are in agreement
with her stance. There was no error in the choice of the complainants remedy, a matter left to
her determination as the suitor. And the complaint itself is defined by the allegations therein, not
the allegations of the defendants.
At the outset, we note that petitioners question the MCTCs jurisdiction yet they admit in their
preliminary statement that the Complaints filed are indeed for unlawful detainer, and that the
only issue to be determined is mere physical possession (possession de facto) and not juridical
possession (possession de jure), much less ownership.[17]
While petitioners assert that this case involves only deprivation of possession, they confuse the
remedy of an action for forcible entry with that of unlawful detainer. In unlawful detainer, prior
physical possession by the plaintiff is not necessary. It is enough that plaintiff has a better right
of possession. Actual, prior physical possession of a property by a party is indispensable only in
forcible entry cases. 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.[18] Thus, the fact that petitioners are in possession of the lot
does not automatically entitle them to remain in possession. And the issue of prior lawful
possession by the defendants does not arise at all in a suit for unlawful detainer, simply because
prior lawful possession by virtue of contract or other reasons is given or admitted. Unlike in
forcible entry where defendants, by force, intimidation, threat, strategy or stealth, deprive the
plaintiff or the prior physical possessor of possession. Here there is no evidence to show that
petitioners entered the lot by any of these acts.
If only to stress the fundamental principles related to present controversy, jurisdiction over
unlawful detainer suits is vested in municipal trial courts.[19] And in ejectment cases, the
jurisdiction of the court is determined by the allegations of the complaint.[20]
In this case for ejectment, private respondents allegations sufficiently present a case of unlawful
detainer. She alleged that (1) she owns Lot 1227; (2) she tolerated petitioners to construct their
houses thereon; (3) she withdrew her tolerance; and (4) petitioners refused to heed her demand to
vacate the lot. The Complaints were also filed within one year from the date of her demand.
The cause of action for unlawful detainer between the parties springs from the failure of
petitioners to vacate the lot upon lawful demand of the private respondent. When they refused to
vacate the lot after her demand, petitioners continued possession became unlawful. Her
complaint for ejectment against respondent, to put it simply, is not without sufficient basis.

Petitioners contention that private respondent should have filed an action to recover possession
de jure with the RTC is not supported by law or jurisprudence. The distinction between a
summary action of ejectment and a plenary action for recovery of possession and/or ownership
of the land is settled in our jurisprudence.
What really distinguishes an action for unlawful detainer from a possessory action (accion
publiciana) and from a reinvindicatory action (accion reinvindicatoria) is that the first is limited
to the question of possession de facto. An unlawful detainer suit (accion interdictal) together
with forcible entry are the two forms of an ejectment suit that may be filed to recover possession
of real property. Aside from the summary action of ejectment, accion publiciana or the plenary
action to recover the right of possession and accion reinvindicatoria or the action to recover
ownership which includes recovery of possession, make up the three kinds of actions to
judicially recover possession.[21]
It is not up to defendants, now petitioners herein, to dictate upon plaintiff, now the private
respondent, what her initial recourse should be. Her choice of an action for ejectment against socalled squatters is well within her rights.
Petitioners cite the case of Bayubay v. Court of Appeals,[22] and argue that the MCTCs decision
was without jurisdictional or legal basis because the MCTC did not issue a preliminary
conference order. They assert that the 10-day period to file position papers and affidavits only
starts after the parties had received a preliminary conference order. They insist they were denied
due process when the MCTC decided the cases based merely on private respondents
Complaints and affidavit, without considering their Answers.
For her part, private respondent maintains that there was substantial compliance with the rules in
the MCTCs conduct of the preliminary conference, hence there was no violation of due process
nor disregard of its proper jurisdiction.
Petitioners present contention was first raised only in their appeal to the RTC. Raising it before
the appellate tribunal is barred by estoppel.[23] They should have raised it in the proceedings
before the MCTC. In our view, this issue is a mere afterthought, when the MCTC decided
against them. Basic rules of fair play, justice and due process require that as a rule an issue
cannot be raised by the petitioners for the first time on appeal.[24]
Besides, petitioners did not question initially the MCTCs Order dated February 19, 1999, when
they moved for an extension of time to file their position papers and affidavits. They wanted
another 30 days on top of the 30 days set by the MCTC, which strictly should have been 10 days
only. In this regard, petitioners could not claim that they were denied sufficient time to file their
position papers and affidavits before the trial court. Further, they cannot validly invoke our
ruling[25] in Bayubay, for in that case there was no order at all terminating the preliminary
conference and requiring the parties to submit position papers and affidavits.
We note with dismay petitioners insistence that we order the MCTC to conduct the requisite
preliminary conference. The summary character of ejectment suits will be disregarded if we
allow petitioners to further delay this case by allowing a second preliminary conference.

Ejectment by way of forcible entry and unlawful detainer cases are summary proceedings,
designed to provide an expeditious means of protecting actual possession or the right to
possession over the property involved. It is a timely procedure designed to remedy the delay in
the resolution of such cases.[26]
Lastly, petitioners aver that private respondent failed to prove her allegation of ownership of Lot
1227 as it is only based on a tax declaration which is not an evidence of ownership. They also
claim that their possession of the lot was not and could not be by mere tolerance. However, this
is a factual matter best left to the trial courts.
What we have now is sufficient evidence showing that private respondent has a better right to
possess Lot 1227. The commissioners report and sketch plan show that the 19 petitioners
occupy the lot, which corroborate private respondents allegation and disprove petitioners
defense that Lot 1227 is a shoreline; or that Lot 1227 is a social forest area. While not a
conclusive evidence of ownership, private respondents tax declaration constitutes proof that she
has a claim of title over the lot. It has been held that:
Although tax declarations or realty tax payment of property are not conclusive evidence of
ownership, nevertheless, they are good indicia of possession in the concept of owner for no
one in his right mind would be paying taxes for a property that is not in his actual or at
least constructive possession. They constitute at least proof that the holder has a claim of
title over the property. The voluntary declaration of a piece of property for taxation
purposes manifests not only ones sincere and honest desire to obtain title to the property
and announces his adverse claim against the State and all other interested parties, but also
the intention to contribute needed revenues to the Government. Such an act strengthens
ones bona fide claim of acquisition of ownership.[27]
The lower courts did not err in adjudicating the issue of possession. Mere absence of title over
the lot is not a ground for the courts to withhold relief from the parties in an ejectment case.
Plainly stated, the trial court has validly exercised its jurisdiction over the ejectment cases
below. The policy behind ejectment suits is to prevent breaches 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 she claims is hers. The party deprived of possession must not take the law into his or
her own hands.[28] For their part, herein petitioners could not be barred from defending
themselves before the court adequately, as a matter of law and right.
However, petitioners in their defense should show that they are entitled to possess Lot 1227. If
they had any evidence to prove their defenses, they should have presented it to the MCTC with
their position papers and affidavits. But they ignored the courts order and missed the given
opportunity to have their defenses heard, the very essence of due process.[29] Their allegations
were not only unsubstantiated but were also disproved by the plaintiffs evidence.
In sum, we find no reversible error much less any grave abuse of discretion committed by the
Court of Appeals. A person who occupies the 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

against him.[30] His status is analogous to that of a lessee or tenant whose term of lease has
expired but whose occupancy continued by tolerance of the owner. In such a case, the date of
unlawful deprivation or withholding of possession is to be counted from the date of the demand
to vacate.[31]
WHEREFORE, the instant petition is DENIED for lack of merit. The Decision of the Court of
Appeals dated March 30, 2001 and its Resolution dated October 18, 2001 are AFFIRMED.
Costs against petitioners.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.

SECOND DIVISION
ROSS RICA SALES CENTER,

G.R. No. 132197

INC. and JUANITO KING &

SONS, INC.,

Present:

Petitioners,
PUNO, J.,
Chairman,
AUSTRIA-MARTINEZ,
- versus -

CALLEJO, SR.,

TINGA, and
CHICO-NAZARIO, JJ.

SPOUSES GERRY ONG and

ELIZABETH ONG,

Promulgated:

Respondents.
August 16, 2005

x-------------------------------------------------------------------x

DECISION
TINGA, J.:

In a Decision[1] dated 6 January 1998, the Former First Division of the Court of Appeals
overturned the decisions of the Municipal Trial Court (MTC) and the Regional Trial Court
(RTC) of Mandaue City, ruling instead that the MTC had no jurisdiction over the subject
complaint for unlawful detainer. This petition for review prays for the reversal of the aforesaid
Court of Appeals Decision.

The case originated from a complaint for ejectment filed by petitioners against
respondents, docketed as Civil Case No. 2376, before the MTC of Mandaue City, Branch I. In
the complaint, petitioners alleged the fact of their ownership of three (3) parcels of land covered
by Transfer Certificates of Title (TCT) Nos. 36466, 36467 and 36468. Petitioners likewise

acknowledged respondent Elizabeth Ongs ownership of the lots previous to theirs. On 26

January 1995, Atty. Joseph M. Baduel, representing Mandaue Prime Estate Realty, wrote
respondents informing them of its intent to use the lots and asking them to vacate within thirty
(30) days from receipt of the letter. But respondents refused to vacate, thereby unlawfully
withholding possession of said lots, so petitioners alleged.

Ross Rica Sales Center, Inc. and Juanito King and Sons, Inc. (petitioners) had acquired
the lands from Mandaue Prime Estate Realty through a sale made on 23 March 1995. In turn, it
appears that Mandaue Prime Estate Realty had acquired the properties from the respondents
through a Deed of Absolute Sale dated 14 July 1994. However, this latter deed of sale and the
transfers of title consequential thereto were subsequently sought to be annulled by respondents in
a complaint filed on 13 February 1995 before the Mandaue RTC against Mandaue Prime Estate
Realty.[2] Per record, this case is still pending resolution.

Meanwhile, the MYC resolved the ejectment case on 24 April 1996, with the decision
ordering respondents to vacate the premises in question and to peacefully turn over possession
thereof to petitioners.

On appeal, the RTC rendered on 1 March 1997 a judgment affirming the MTCs decision
in its entirety.

On 8 May 1997, respondents filed a notice of appeal. However, on the following day,
they filed a motion for reconsideration.

On 23 June 1997, the RTC issued an Order which concurrently gave due course to
respondents notice of appeal filed on 8 May 1997; denied their motion for reconsideration dated
9 May 1997,[3] and granted petitioners motion for immediate execution pending appeal.

In a Petition for Certiorari with Injunction filed with the Court of Appeals and treated as
a Petition for Review, the appellate court ruled that the MTC had no jurisdiction over said case as
there was no contract between the parties, express or implied, as would qualify the same as one
for unlawful detainer. Thus, the assailed Orders of the MTC and RTC were set aside.

Petitioners then took this recourse via Petition for Review under Rule 45 of the Rules of
Court. The principal issues raised before this Court are: (i) whether the RTC decision has
already become final and executory at the time the petition for review was filed; (ii) whether the
allegations in the complaint constitute a case for unlawful detainer properly cognizable by the
MTC; and, (iii) whether petitioners, as registered owners, are entitled to the possession of the
subject premises.

We resolve the first argument to be without merit.

The following sequence of events is undisputed:

(1)

On 1 March 1997, the RTC rendered the questioned decision affirming

the judgment of the MTC.

(2)

On 28 April 1997, respondents received a copy of the aforementioned

decision.

(3)

On 8 May 1997, respondents filed a Notice of Appeal with the RTC.

(4)

On 9 May 1997, respondents filed likewise with the RTC a Motion for
Reconsideration of the aforementioned 1 March 1997 decision.

(5)

On 23 June 1997, the RTC of Mandaue issued an Order denying

respondents Motion for Reconsideration.

(6)

On 9 July 1997, respondents received a copy of the aforementioned 23

June 1997 Order.

(7)

On 24 July 1997, respondents filed with the Court of Appeals their

motion for an additional period of ten (10) days within which to file their Petition
for Review.

(8)

On 30 July 1997, respondents filed with the Court of Appeals their

Petition for Review.

Petitioners assert that the Petition for Review was filed beyond the fifteen (15)-day period
for appeal. They theorize that the period started running on 28 April 1995, the date of receipt of
the RTC decision, and ended on 13 May 1997. According to them, this reglementary period
could not have been interrupted by the filing on 9 May 1997 of the Motion for Reconsideration
because of the filing one day earlier of the Notice of Appeal. This Notice of Appeal dated 8 May
1997, albeit the wrong mode of appeal, expressly manifested their intention to file a petition for
review to either the Court of Appeals or the Supreme Court.[4]

Petitioners further argue that respondents, after having filed the Notice of Appeal which
was given due course by the RTC, cannot take an inconsistent stand such as filing a Motion for
Reconsideration. Such filing, therefore, did not toll the fifteen (15)-day period which started

running from the date of receipt of the RTC decision on 28 April 1997 and ended on 13 May
1997.

Respondents, in their Comment,[5] submit that the filing of the Notice of Appeal dated 8
May 1997 was improper, and as such did not produce any legal effect. Therefore, the filing of
the Motion for Reconsideration immediately on the following day cured this defect. The RTC
refused to subscribe respondents position.

It justified the denial of the Motion for

Reconsideration on the ground that the respondents had already filed a Notice of Appeal. The
Order dated 23 June 1997 stated:

On record is a Notice of Appeal by Certiorari filed by Defendants on May

8, 1997.
Likewise filed by Defendants on May 9, 1997 is a Motion for
Reconsideration.
Considering the Notice of Appeal filed earlier which the court hereby
approves, the Motion for Reconsideration is DENIED.
The Motion for Immediate Execution Pending Appeal being meritorious, is
GRANTED.[6] (Emphasis in the original.)

Strangely enough, the Court of Appeals passed no comment on this point when it took
cognizance of respondents position and reversed the RTC. But does this necessarily mean that
the RTC was correct when it declared that the Motion for Reconsideration was barred by the
filing of the Notice of Appeal, no matter how erroneous the latter mode was?

Rule 42 governs the mode of appeal applicable in this case. Sec. 1 provides:

Section 1. How appeal taken; time for filing. -- A party desiring to appeal from a
decision of the RTC rendered in the exercise of its appellate jurisdiction may file
a verified petition for review with the Court of Appeals, paying at the same time
to the clerk of said court the corresponding docket and other lawful fees,
depositing the amount of P500.00 for costs, and furnishing the Regional Trial
Court and the adverse party with a copy of the petition. The petition shall be filed
and served within fifteen (15) days from notice of the decision sought to be
reviewed or of the denial of petitioners motion for new trial or reconsideration
filed in due time after judgment. Upon proper motion and the payment of the full
amount of the docket and other lawful fees and the deposit for costs before the
expiration of the reglementary period, the Court of Appeals may grant an
additional period of fifteen (15) days only within which to file the petition for
review. No further extension shall be granted except for the most compelling
reason and in no case to exceed fifteen (15) days.

Since the unlawful detainer case was filed with the MTC and affirmed by the RTC,
petitioners should have filed a Petition for Review with the Court of Appeals and not a Notice of
Appeal with the RTC. However, we consider this to have been remedied by the timely filing of
the Motion for Reconsideration on the following day. Section 3, Rule 50 of the Rules of Court
allows the withdrawal of appeal at any time, as a matter of right, before the filing of the
appellees brief. Applying this rule contextually, the filing of the Motion for Reconsideration
may be deemed as an effective withdrawal of the defective Notice of Appeal.

Perforce, the period of appeal was tolled by the Motion for Reconsideration and started to
run again from the receipt of the order denying the Motion for Reconsideration. A Motion for
Additional Time to File the Petition was likewise filed with the Court of Appeals. Counting
fifteen (15) days from receipt of the denial of the Motion for Reconsideration and the ten (10)day request for additional period, it is clear that respondents filed their Petition for Review on
time.

Petitioners invoke to the ruling in People v. De la Cruz[7] that once a notice of appeal is
filed, it cannot be validly withdrawn to give way to a motion for reconsideration. The factual
circumstances in the two cases are different.

De la Cruz is a criminal case, governed by criminal procedure. Section 3, Rule 122 of the
Rules of Court provides that the proper mode of appeal from a decision of the RTC is a notice of
appeal and an appeal is deemed perfected upon filing of the notice of appeal.

In the case at bar, a petition for review before the Court of Appeals is the proper mode of
appeal from a decision of the RTC. Since the filing of the notice of appeal is erroneous, it is
considered as if no appeal was interposed.

Now on the second and more important issue raised by petitioners: whether the
Complaint satisfies the jurisdictional requirements for a case of unlawful detainer properly
cognizable by the MTC.

The MTC considered itself as having jurisdiction over the ejectment complaint and
disposed of the same in favor of petitioners. Said ruling was affirmed by the RTC. The Court of
Appeals reversed the lower courts and found the complaint to be one not for unlawful detainer
based on two (2) grounds, namely: that the allegations fail to show that petitioners were deprived
of possession by force, intimidation, threat, strategy or stealth; and that there is no contract,
express or implied, between the parties as would qualify the case as one of unlawful detainer.

We disagree with the Court of Appeals.

The complaint for unlawful detainer contained the following material allegations:

....
3. That plaintiffs are the owners of Lot No. 2, which is covered by T.C.T. No.
36466 of the Register of Deeds of Mandaue City, Lot No. 1-A which is covered
by T.C.T. No. 36467 of the Register of Deeds of Mandaue City and Lot No. 86-A
which is covered by T.C.T. No. 36468 of the Register of Deeds of Mandaue City,
all situated in the City of Mandaue. Copies of said Transfer Certificate of Titles
are hereto attached as Annexes A, B, and C respectively and made an
integral part hereof;
4. That defendant Elizabeth Ong is the previous registered owner of said lots;
5. That as the previous registered owner of said lots, defendant Elizabeth Ong
and her husband and co-defendant Jerry Ong have been living in the house
constructed on said lots;
6. That on May 6, 1995, plaintiffs, through the undersigned counsel, wrote
defendants a letter informing them or their intent to use said lots and demanded of
them to vacate said lots within 30 days from receipt of said letter. Copy of said
letter is hereto attached as Annex D and made an integral part thereof;
7. That despite demand to vacate, the defendants have refused and still refuse to
vacate said lots, thus, unlawfully withholding possession of said lots from
plaintiffs and depriving plaintiffs of the use of their lots;

8. That in unlawfully withholding the possession of said lots from the plaintiffs,
plaintiffs have suffered damages in the form of unearned rentals in the amount of
P10,000.00 a month
. . . .[8]

Well-settled is the rule that what determines the nature of an action as well as which court
has jurisdiction over it are the allegations of the complaint and the character of the relief
sought.[9]

Respondents contend that the complaint did not allege that petitioners possession was
originally lawful but had ceased to be so due to the expiration of the right to possess by virtue of
any express or implied contract.

The emphasis placed by the Court of Appeals on the presence of a contract as a requisite
to qualify the case as one of unlawful detainer contradicts the various jurisprudence dealing on
the matter.

In Javelosa v. Court of the Appeals,[10] it was held that the allegation in the complaint
that there was unlawful withholding of possession is sufficient to make out a case for unlawful

detainer. It is equally settled that in an action for unlawful detainer, an allegation that the
defendant is unlawfully withholding possession from the plaintiff is deemed sufficient, without
necessarily employing the terminology of the law.[11]

Hence, the phrase "unlawful withholding" has been held to imply possession on the part
of defendant, which was legal in the beginning, having no other source than a contract, express
or implied, and which later expired as a right and is being withheld by defendant.[12] In
Rosanna B. Barba v. Court of Appeals,[13] we held that a simple allegation

that the defendant is unlawfully withholding possession from plaintiff is sufficient.

Based on this premise, the allegation in the Complaint that:

. . . . despite demand to vacate, the defendants have refused and still refuse to
vacate said lots, thus, unlawfully withholding possession of said lots from
plaintiffs and depriving plaintiffs of the use of their lots;[14]

is already sufficient to constitute an unlawful detainer case.

In the subject complaint, petitioners alleged that they are the registered owners of the lots
covered by TCT Nos. 36466, 36467 and 36468. By their implied tolerance, they have allowed
respondents, the former owners of the properties, to remain therein. Nonetheless, they
eventually sent a letter to respondents asking that the latter vacate the said lots. Respondents

refused, thereby depriving petitioners of possession of the lots. Clearly, the complaint establishes
the basic elements of an unlawful detainer case, certainly sufficient for the purpose of vesting
jurisdiction over it in the MTC.

Respondents would like to capitalize on the requisites as cited in the case of Raymundo
dela Paz v. Panis.[15] But the citation is a mere reiteration of Sec. 1, Rule 70[16] of the Rules
of Court. The case doesid not provide for rigid standards in the drafting of the ejectment
complaint. The case of Co Tiamco v. Diaz[17] justifies a more liberal approach, thus:

. . . The principle underlying the brevity and simplicity of pleadings in forcible

entry and unlawful detainer cases rests upon considerations of public policy.
Cases of forcible entry and detainer are summary in nature, for they involve
perturbation of social order which must be restored as promptly as possible and,
accordingly, technicalities or details of procedure should be carefully
avoided.[18]

Moreover, petitioners fail to mention any of the incidents of the pending case involving
the annulment of deed of sale and title over said property. Petitioners know better than to
question this in an ejectment proceeding, which brings us to the nature of the action in this case.

Respondents insist that the RTC, and not the MTC, had jurisdiction over the action, it
being an accion reivindicatoria according to them, on the ground that petitioners were constantly
claiming ownership over the lands in the guise of filing an action for ejectment. In their
Comment,[19] respondents maintain that they occupy the subject lots as the legal owners.
Petitioners, on the other hand, are seeking recovery of possession under a claim of ownership

which is tantamount to recovery of possession based on alleged title to the lands, and therefore is
within the original jurisdiction of the RTC, so respondents conclude.

This contention is not tenable.

The issue involved in accion reivindicatoria is the recovery of ownership of real

property. This differs from accion publiciana where the issue is the better right of possession or
possession de jure, and accion interdictal where the issue is material possession or possession de
facto. In an action for unlawful detainer, the question of possession is primordial while the issue
of ownership is generally unessential.[20]

Neither the allegation in petitioners complaint for ejectment nor the defenses thereto
raised by respondents sufficiently convert this case into an accion reivindicatoria which is
beyond the province of the MTC to decide. Petitioners did not institute the complaint for
ejectment as a means of claiming or obtaining ownership of the properties. The acknowledgment
in their pleadings of the fact of prior ownership by respondents does not constitute a recognition
of respondents present ownership. This is meant only to establish one of the necessary elements
for a case of unlawful detainer, specifically the unlawful withholding of possession. Petitioners,
in all their pleadings, only sought to recover physical possession of the subject property. The
mere fact that they claim ownership over the parcels of land as well did not deprive the MTC of
jurisdiction to try the ejectment case.

Even if respondents claim ownership as a defense to the complaint for ejectment, the
conclusion would be the same for mere assertion of ownership by the defendant in an ejectment
case will not therefore oust the municipal court of its summary jurisdiction.[21] This Court in
Ganadin

v. Ramos[22] stated that if what is prayed for is ejectment or recovery of possession, it does not
matter if ownership is claimed by either party. Therefore, the pending actions for declaration of
nullity of deed of sale and Transfer Certificates of Title and quieting of title in Civil Case No.
MAN-2356 will not abate the ejectment case.

In Drilon v. Gaurana,[23] this Court ruled that the filing of an action for reconveyance
of title over the same property or for annulment of the deed of sale over the land does not divest
the MTC of its jurisdiction to try the forcible entry or unlawful detainer case before it, the
rationale being that, while there may be identity of parties and subject matter in the forcible entry
case and the suit for annulment of title and/or reconveyance, the rights asserted and the relief
prayed for are not the same.[24]

In Oronce v. Court of Appeals,[25] this Court held that the fact that respondents had
previously filed a separate action for the reformation of a deed of absolute sale into one of pacto
de retro sale or equitable mortgage in the same

Court of First Instance is not a valid reason to frustrate the summary remedy of ejectment
afforded by law to the plaintiff. Consequently, an adjudication made in an ejectment proceeding
regarding the issue of ownership should be regarded as merely provisional and, therefore, would
not bar or prejudice an action between the same parties involving title to the land. The foregoing
doctrine is a necessary consequence of the nature of forcible entry and unlawful detainer cases
where the only issue to be settled is the physical or material possession over the real property,
that is, possession de facto and not possession de jure.

The Court reiterated this in the case of Tecson v. Gutierrez[26] when it ruled:

We must stress, however, that before us is only the initial determination of

ownership over the lot in dispute, for the purpose of settling the issue of
possession, although the issue of ownership is inseparably linked thereto. As such,
the lower court's adjudication of ownership in the ejectment case is merely
provisional, and our affirmance of the trial courts' decisions as well, would not bar
or prejudice an action between the same parties involving title to the property, if
and when such action is brought seasonably before the proper forum.

The long settled rule is that the issue of ownership cannot be subject of a collateral
attack.

In Apostol v. Court of Appeals,[27] this Court had the occasion to clarify this:

. . . Under Section 48 of Presidential Decree No. 1529, a certificate of title shall

not be subject to collateral attack. It cannot be altered, modified or cancelled,
except in a direct proceeding for that purpose in accordance with law. The issue
of the validity of the title of the respondents can only be assailed in an action
expressly instituted for that purpose. Whether or not the petitioners have the right
to claim ownership over the property is beyond the power of the court a quo to
determine in an action for unlawful detainer.[28]

With the conclusion of the second issue in favor of petitioners, there is no need to discuss
the third assignment of error which is related to the second issue.

WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals dated
6 January 1998 is REVERSED and SET ASIDE and the Decision dated 24

April 1996 of the Municipal Trial Court of Mandaue City REINSTATED and AFFIRMED.
Costs against respondents.

SO ORDERED.

FIRST DIVISION
[G.R. No. 151815. February 23, 2005]
SPOUSES JUAN NUGUID AND ERLINDA T. NUGUID, petitioners, vs. HON. COURT
OF APPEALS AND PEDRO P. PECSON, respondents.
DECISION
QUISUMBING, J.:
This is a petition for review on certiorari of the Decision1[1] dated May 21, 2001, of the Court of
Appeals in CA-G.R. CV No. 64295, which modified the Order dated July 31, 1998 of the
Regional Trial Court (RTC) of Quezon City, Branch 101 in Civil Case No. Q-41470. The trial
court ordered the defendants, among them petitioner herein Juan Nuguid, to pay respondent
herein Pedro P. Pecson, the sum of P1,344,000 as reimbursement of unrealized income for the
period beginning November 22, 1993 to December 1997. The appellate court, however, reduced
the trial courts award in favor of Pecson from the said P1,344,000 to P280,000. Equally
assailed by the petitioners is the appellate courts Resolution2[2] dated January 10, 2002, denying
the motion for reconsideration.

Rollo, pp. 6-17. Penned by Associate Justice Fermin A. Martin, Jr., with Associate Justices
Portia Alio-Hormachuelos, and Mercedes Gozo-Dadole concurring.
1[1]

Id. at 19-20. Penned by Associate Justice Mercedes Gozo-Dadole, with Associate Justices
Portia Alio-Hormachuelos, and Rebecca de Guia-Salvador concurring.
2[2]

It may be recalled that relatedly in our Decision dated May 26, 1995, in G.R. No. 115814,
entitled Pecson v. Court of Appeals, we set aside the decision of the Court of Appeals in CAG.R. SP No. 32679 and the Order dated November 15, 1993, of the RTC of Quezon City, Branch
101 and remanded the case to the trial court for the determination of the current market value of
the four-door two-storey apartment building on the 256-square meter commercial lot.
The antecedent facts in this case are as follows:
Pedro P. Pecson owned a commercial lot located at 27 Kamias Road, Quezon City, on which he
built a four-door two-storey apartment building. For failure to pay realty taxes, the lot was sold
at public auction by the City Treasurer of Quezon City to Mamerto Nepomuceno, who in turn
sold it for P103,000 to the spouses Juan and Erlinda Nuguid.
Pecson challenged the validity of the auction sale before the RTC of Quezon City in Civil Case
No. Q-41470. In its Decision,3[3] dated February 8, 1989, the RTC upheld the spouses title but
declared that the four-door two-storey apartment building was not included in the auction sale.4[4]
This was affirmed in toto by the Court of Appeals and thereafter by this Court, in its Decision5[5]
dated May 25, 1993, in G.R. No. 105360 entitled Pecson v. Court of Appeals.
On June 23, 1993, by virtue of the Entry of Judgment of the aforesaid decision in G.R. No.
105360, the Nuguids became the uncontested owners of the 256-square meter commercial lot.
As a result, the Nuguid spouses moved for delivery of possession of the lot and the apartment
building.
In its Order6[6] of November 15, 1993, the trial court, relying upon Article 5467[7] of the Civil
Code, ruled that the Spouses Nuguid were to reimburse Pecson for his construction cost of
P53,000, following which, the spouses Nuguid were entitled to immediate issuance of a writ of
possession over the lot and improvements. In the same order the RTC also directed Pecson to

3[3]

Records, Vol. 1, pp. 501-510.

4[4]

Ibid.

5[5]

222 SCRA 580-586.

6[6]

Records, Vol. 2, pp. 578-580.

Art. 546. Necessary expenses shall be refunded to every possessor; but only the possessor in
good faith may retain the thing until he has been reimbursed therefor.
7[7]

Useful expenses shall be refunded only to the possessor in good faith with the
same right of retention, the person who has defeated him in the possession having the option of
refunding the amount of the expenses or of paying the increase in value which the thing may
have acquired by reason thereof.

pay the same amount of monthly rentals to the Nuguids as paid by the tenants occupying the
apartment units or P21,000 per month from June 23, 1993, and allowed the offset of the amount
of P53,000 due from the Nuguids against the amount of rents collected by Pecson from June 23,
1993 to September 23, 1993 from the tenants of the apartment.8[8]
Pecson duly moved for reconsideration, but on November 8, 1993, the RTC issued a Writ of
Possession,9[9] directing the deputy sheriff to put the spouses Nuguid in possession of the subject
property with all the improvements thereon and to eject all the occupants therein.
Aggrieved, Pecson then filed a special civil action for certiorari and prohibition docketed as CAG.R. SP No. 32679 with the Court of Appeals.
In its decision of June 7, 1994, the appellate court, relying upon Article 44810[10] of the Civil
Code, affirmed the order of payment of construction costs but rendered the issue of possession
moot on appeal, thus:
WHEREFORE, while it appears that private respondents [spouses Nuguid] have not yet
indemnified petitioner [Pecson] with the cost of the improvements, since Annex I shows that the
Deputy Sheriff has enforced the Writ of Possession and the premises have been turned over to
the possession of private respondents, the quest of petitioner that he be restored in possession of
the premises is rendered moot and academic, although it is but fair and just that private
respondents pay petitioner the construction cost of P53,000.00; and that petitioner be ordered to
account for any and all fruits of the improvements received by him starting on June 23, 1993,
with the amount of P53,000.00 to be offset therefrom.
IT IS SO ORDERED.11[11] [Underscoring supplied.]
Frustrated by this turn of events, Pecson filed a petition for review docketed as G.R. No. 115814
before this Court.

8[8]

Records, Vol. 2, p. 580.

9[9]

Id. at 587.

Art. 448. The owner of the land on which anything has been built, sown or planted in good
faith, shall have the right to appropriate as his own the works, sowing or planting, after payment
of the indemnity provided for in Articles 546 and 548, or to oblige the one who built or planted
to pay the price of the land, and the one who sowed, the proper rent. However, the builder or
planter cannot be obliged to buy the land if its value is considerably more than that of the
building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not
choose to appropriate the building or trees after proper indemnity. The parties shall agree upon
the terms of the lease and in case of disagreement, the court shall fix the terms thereof.
10[10]

11[11]

Records, Vol. 2, p. 744.

On May 26, 1995, the Court handed down the decision in G.R. No 115814, to wit:
WHEREFORE, the decision of the Court of Appeals in CA-G.R. SP No. 32679 and the Order of
15 November 1993 of the Regional Trial Court, Branch 101, Quezon City in Civil Case No. Q41470 are hereby SET ASIDE.
The case is hereby remanded to the trial court for it to determine the current market value of the
apartment building on the lot. For this purpose, the parties shall be allowed to adduce evidence
on the current market value of the apartment building. The value so determined shall be
forthwith paid by the private respondents [Spouses Juan and Erlinda Nuguid] to the petitioner
[Pedro Pecson] otherwise the petitioner shall be restored to the possession of the apartment
building until payment of the required indemnity.
No costs.
SO ORDERED.12[12] [Emphasis supplied.]
In so ruling, this Court pointed out that: (1) Article 448 of the Civil Code is not apposite to the
case at bar where the owner of the land is the builder, sower, or planter who then later lost
ownership of the land by sale, but may, however, be applied by analogy; (2) the current market
value of the improvements should be made as the basis of reimbursement; (3) Pecson was
entitled to retain ownership of the building and, necessarily, the income therefrom; (4) the Court
of Appeals erred not only in upholding the trial courts determination of the indemnity, but also
in ordering Pecson to account for the rentals of the apartment building from June 23, 1993 to
September 23, 1993.
On the basis of this Courts decision in G.R. No. 115814, Pecson filed a Motion to Restore
Possession and a Motion to Render Accounting, praying respectively for restoration of his
possession over the subject 256-square meter commercial lot and for the spouses Nuguid to be
directed to render an accounting under oath, of the income derived from the subject four-door
apartment from November 22, 1993 until possession of the same was restored to him.
In an Order13[13] dated January 26, 1996, the RTC denied the Motion to Restore Possession to the
plaintiff averring that the current market value of the building should first be determined.
Pending the said determination, the resolution of the Motion for Accounting was likewise held in
abeyance.

12[12]

Pecson v. Court of Appeals, G.R. No. 115814, 26 May 1995, 244 SCRA 407, 416-417.

13[13]

Records, Vol. 2, pp. 706-707.

With the submission of the parties assessment and the reports of the subject realty, and the
reports of the Quezon City Assessor, as well as the members of the duly constituted assessment
committee, the trial court issued the following Order14[14] dated October 7, 1997, to wit:
On November 21, 1996, the parties manifested that they have arrived at a compromise agreement
that the value of the said improvement/building is P400,000.00 The Court notes that the plaintiff
has already received P300,000.00. However, when defendant was ready to pay the balance of
P100,000.00, the plaintiff now insists that there should be a rental to be paid by defendants.
Whether or not this should be paid by defendants, incident is hereby scheduled for hearing on
November 12, 1997 at 8:30 a.m.
Meantime, defendants are directed to pay plaintiff the balance of P100,000.00.
SO ORDERED.15[15]
On December 1997, after paying the said P100,000 balance to Pedro Pecson the spouses Nuguid
prayed for the closure and termination of the case, as well as the cancellation of the notice of lis
pendens on the title of the property on the ground that Pedro Pecsons claim for rentals was
devoid of factual and legal bases.16[16]
After conducting a hearing, the lower court issued an Order dated July 31, 1998, directing the
spouses to pay the sum of P1,344,000 as reimbursement of the unrealized income of Pecson for
the period beginning November 22, 1993 up to December 1997. The sum was based on the
computation of P28,000/month rentals of the four-door apartment, thus:
The Court finds plaintiffs motion valid and meritorious. The decision of the Supreme Court in
the aforesaid case [Pecson vs. Court of Appeals, 244 SCRA 407] which set aside the Order of
this Court of November 15, 1993 has in effect upheld plaintiffs right of possession of the
building for as long as he is not fully paid the value thereof. It follows, as declared by the
Supreme Court in said decision that the plaintiff is entitled to the income derived therefrom, thus

. . .
Records show that the plaintiff was dispossessed of the premises on November 22, 1993 and that
he was fully paid the value of his building in December 1997. Therefore, he is entitled to the
income thereof beginning on November 22, 1993, the time he was dispossessed, up to the time of
said full payment, in December 1997, or a total of 48 months.

14[14]

Id. at 824.

15[15]

Ibid.

16[16]

Id. at 832-833.

The only question left is the determination of income of the four units of apartments per month.
But as correctly pointed out by plaintiff, the defendants have themselves submitted their
affidavits attesting that the income derived from three of the four units of the apartment building
is P21,000.00 or P7,000.00 each per month, or P28,000.00 per month for the whole four units.
Hence, at P28,000.00 per month, multiplied by 48 months, plaintiff is entitled to be paid by
defendants the amount of P1,344,000.00.17[17]
The Nuguid spouses filed a motion for reconsideration but this was denied for lack of merit.18[18]
The Nuguid couple then appealed the trial courts ruling to the Court of Appeals, their action
docketed as CA-G.R. CV No. 64295.
In the Court of Appeals, the order appealed from in CA-G.R. CV No. 64295, was modified. The
CA reduced the rentals from P1,344,000 to P280,000 in favor of the appellee.19[19] The said
amount represents accrued rentals from the determination of the current market value on January
31, 199720[20] until its full payment on December 12, 1997.
Hence, petitioners state the sole assignment of error now before us as follows:
THE COURT OF APPEALS ERRED IN HOLDING PETITIONERS LIABLE TO PAY RENT
OVER AND ABOVE THE CURRENT MARKET VALUE OF THE IMPROVEMENT WHEN
SUCH WAS NOT PROVIDED FOR IN THE DISPOSITIVE PORTION OF THE SUPREME
COURTS RULING IN G.R. No. 115814.
Petitioners call our attention to the fact that after reaching an agreed price of P400,000 for the
improvements, they only made a partial payment of P300,000. Thus, they contend that their
failure to pay the full price for the improvements will, at most, entitle respondent to be restored
to possession, but not to collect any rentals. Petitioners insist that this is the proper interpretation
of the dispositive portion of the decision in G.R. No. 115814, which states in part that [t]he
value so determined shall be forthwith paid by the private respondents [Spouses Juan and Erlinda
Nuguid] to the petitioner [Pedro Pecson] otherwise the petitioner shall be restored to the
possession of the apartment building until payment of the required indemnity.21[21]
Now herein respondent, Pecson, disagrees with herein petitioners contention. He argues that
petitioners are wrong in claiming that inasmuch as his claim for rentals was not determined in the

17[17]

Rollo, pp. 74-75; CA Rollo, pp. 25-26; Records, Vol. 2, pp. 836-837.

18[18]

Records, Vol. 2, p. 861.

19[19]

Rollo, p. 44.

20[20]

Records, Vol. 2, p. 805.

21[21]

Rollo, p. 37.

dispositive portion of the decision in G.R. No. 115814, it could not be the subject of execution.
He points out that in moving for an accounting, all he asked was that the value of the fruits of the
property during the period he was dispossessed be accounted for, since this Court explicitly
recognized in G.R. No. 115814, he was entitled to the property. He points out that this Court
ruled that [t]he petitioner [Pecson] not having been so paid, he was entitled to retain ownership
of the building and, necessarily, the income therefrom.22[22] In other words, says respondent,
accounting was necessary. For accordingly, he was entitled to rental income from the property.
This should be given effect. The Court could have very well specifically included rent (as fruit
or income of the property), but could not have done so at the time the Court pronounced
judgment because its value had yet to be determined, according to him. Additionally, he faults
the appellate court for modifying the order of the RTC, thus defeating his right as a builder in
good faith entitled to rental from the period of his dispossession to full payment of the price of
his improvements, which spans from November 22, 1993 to December 1997, or a period of more
than four years.
It is not disputed that the construction of the four-door two-storey apartment, subject of this
dispute, was undertaken at the time when Pecson was still the owner of the lot. When the
Nuguids became the uncontested owner of the lot on June 23, 1993, by virtue of entry of
judgment of the Courts decision, dated May 25, 1993, in G.R. No. 105360, the apartment
building was already in existence and occupied by tenants. In its decision dated May 26, 1995 in
G.R. No. 115814, the Court declared the rights and obligations of the litigants in accordance with
Articles 448 and 546 of the Civil Code. These provisions of the Code are directly applicable to
the instant case.
Under Article 448, the landowner is given the option, either to appropriate the improvement as
his own upon payment of the proper amount of indemnity or to sell the land to the possessor in
good faith. Relatedly, Article 546 provides that a builder in good faith is entitled to full
reimbursement for all the necessary and useful expenses incurred; it also gives him right of
retention until full reimbursement is made.
While the law aims to concentrate in one person the ownership of the land and the improvements
thereon in view of the impracticability of creating a state of forced co-ownership,23[23] it guards
against unjust enrichment insofar as the good-faith builders improvements are concerned. The
right of retention is considered as one of the measures devised by the law for the protection of
builders in good faith. Its object is to guarantee full and prompt reimbursement as it permits the
actual possessor to remain in possession while he has not been reimbursed (by the person who
defeated him in the case for possession of the property) for those necessary expenses and useful
improvements made by him on the thing possessed.24[24] Accordingly, a builder in good faith

22[22]

Supra, note 12 at 416.

2 EDGARDO L. PARAS, CIVIL CODE OF THE PHILIPPINES ANNOTATED 205 (1999

ed.) citing 3 Manresa 213 (4th Ed).
23[23]

24[24]

Ortiz v. Kayanan, No. L-32974, 30 July 1979, 92 SCRA 146, 159.

cannot be compelled to pay rentals during the period of retention25[25] nor be disturbed in his
possession by ordering him to vacate. In addition, as in this case, the owner of the land is
prohibited from offsetting or compensating the necessary and useful expenses with the fruits
received by the builder-possessor in good faith. Otherwise, the security provided by law would
be impaired. This is so because the right to the expenses and the right to the fruits both pertain to
the possessor, making compensation juridically impossible; and one cannot be used to reduce the
other.26[26]
As we earlier held, since petitioners opted to appropriate the improvement for themselves as
early as June 1993, when they applied for a writ of execution despite knowledge that the auction
sale did not include the apartment building, they could not benefit from the lots improvement,
until they reimbursed the improver in full, based on the current market value of the property.
Despite the Courts recognition of Pecsons right of ownership over the apartment building, the
petitioners still insisted on dispossessing Pecson by filing for a Writ of Possession to cover both
the lot and the building. Clearly, this resulted in a violation of respondents right of retention.
Worse, petitioners took advantage of the situation to benefit from the highly valued, incomeyielding, four-unit apartment building by collecting rentals thereon, before they paid for the cost
of the apartment building. It was only four years later that they finally paid its full value to the
respondent.
Petitioners interpretation of our holding in G.R. No. 115814 has neither factual nor legal basis.
The decision of May 26, 1995, should be construed in connection with the legal principles which
form the basis of the decision, guided by the precept that judgments are to have a reasonable
intendment to do justice and avoid wrong.27[27]
The text of the decision in G.R. No. 115814 expressly exempted Pecson from liability to pay
rentals, for we found that the Court of Appeals erred not only in upholding the trial courts
determination of the indemnity, but also in ordering him to account for the rentals of the
apartment building from June 23, 1993 to September 23, 1993, the period from entry of
judgment until Pecsons dispossession. As pointed out by Pecson, the dispositive portion of our
decision in G.R. No. 115814 need not specifically include the income derived from the
improvement in order to entitle him, as a builder in good faith, to such income. The right of
retention, which entitles the builder in good faith to the possession as well as the income derived
therefrom, is already provided for under Article 546 of the Civil Code.

25[25]

San Diego v. Hon. Montesa, No. L-17985, 29 September 1962, 116 Phil. 512, 515.

2 ARTURO M. TOLENTINO, COMMENTARIES AND JURISPRUDENCE ON THE

CIVIL CODE OF THE PHILIPPINES 261 (1983 ed.) citing 4 Manresa 290.
26[26]

See Republic of the Philippines v. Hon. De Los Angeles, G.R. No. L-26112, 4 October
1971, 148-B Phil. 902, 924.
27[27]

Given the circumstances of the instant case where the builder in good faith has been clearly
denied his right of retention for almost half a decade, we find that the increased award of rentals
by the RTC was reasonable and equitable. The petitioners had reaped all the benefits from the
improvement introduced by the respondent during said period, without paying any amount to the
latter as reimbursement for his construction costs and expenses. They should account and pay
for such benefits.
We need not belabor now the appellate courts recognition of herein respondents entitlement to
rentals from the date of the determination of the current market value until its full payment.
Respondent is clearly entitled to payment by virtue of his right of retention over the said
improvement.
WHEREFORE, the instant petition is DENIED for lack of merit. The Decision dated May 21,
2001 of the Court of Appeals in CA-G.R. CV No. 64295 is SET ASIDE and the Order dated July
31, 1998, of the Regional Trial Court, Branch 101, Quezon City, in Civil Case No. Q-41470
ordering the herein petitioners, Spouses Juan and Erlinda Nuguid, to account for the rental
income of the four-door two-storey apartment building from November 1993 until December
1997, in the amount of P1,344,000, computed on the basis of Twenty-eight Thousand
(P28,000.00) pesos monthly, for a period of 48 months, is hereby REINSTATED. Until fully
paid, said amount of rentals should bear the legal rate of interest set at six percent (6%) per
annum computed from the date of RTC judgment. If any portion thereof shall thereafter remain
unpaid, despite notice of finality of this Courts judgment, said remaining unpaid amount shall
bear the rate of interest set at twelve percent (12%) per annum computed from the date of said
notice. Costs against petitioners.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.

THIRD DIVISION
[G.R. No. 133705. March 31, 2005]
C-J YULO & SONS, INC., petitioner, vs. ROMAN CATHOLIC BISHOP OF SAN PABLO,
INC., respondent.
DECISION
GARCIA, J.:

Appealed to this Court by way of a petition for review on certiorari are the Decision[1] dated
December 19, 1997 and Resolution[2] dated April 30, 1998 of the Court of Appeals in CAG.R. CV No. 45392, reversing an earlier decision of the Regional Trial Court at Calamba,
Laguna, Branch 34, which ruled in favor of the herein petitioner C-J Yulo & Sons, Inc., in a suit
for revocation of donation with reconveyance of title, thereat commenced by the petitioner
against the herein respondent, Roman Catholic Bishop of San Pablo, Inc.
The facts are not at all disputed:
On September 24, 1977, petitioner donated unto respondent a parcel of land at Canlubang,
Calamba, Laguna with an area of 41,117 square meters and registered in its name under Transfer
Certificate of Title (TCT) No. T-82803. The deed of donation which also bears the acceptance
of the donee recites the considerations therefor and the conditions thereto attached, to wit:
WHEREAS, Donee is a religious corporation engaged in much (sic) humanitarian Christian
work in Laguna and elsewhere, educating and forming the young, caring for the infirm and the
aged in the fulfillment of its mission;
WHEREAS, Donor recognizes the need for a privately endowed institution that will care for the
homeless and destitute old people in the community, as well as the other senior citizens who for
some reason or other find themselves without family with whom to live the last years of their
life:
WHEREFORE, Donor is willing, in order to help establish and support such an institution to
donate the land necessary for its housing, as well as an area of land whereon it may raise crops
for its support and for the sustenance of its residents;
WHEREAS, Donee is willing and able, with the wanted help of Donor and of other benefactors,
to establish, operate and maintain such a home for the aged.
NOW, THEREFORE, in consideration of all the foregoing premises, Donor hereby transfers and
conveys to Donee by way of donation all its rights, title and interest in that certain parcel of land
covered by TCT No. T-82803 of the Land Records of Laguna, the technical descriptions of
which are recited above, subject to the following conditions and covenants, each of which is a
material consideration for this Deed:
1.
So much of the land as may be necessary shall be used for the construction of a home for
the aged and infirm, regardless of religion or creed, but preferably those coming from
Canlubang, Calamba, Laguna; provided that retired and/or aged priests may be admitted to the
home; and provided further that any senior citizen from the area who has retired from business or
work may likewise be admitted to the home, subject to the payment to the institution of such sum
as he may afford for his support.
2.
A Green Belt that is 15 meters wide shall be established and maintained by the Donor
along the length of the land to separate and insulate it from the projected highway.

3.
Such part of land as may not be needed for the residence and the Green Belt shall be
devoted by Donee with the help of such residents of the home as are able, to the raising of
agricultural crops for the consumption of the residents of the home, and of such other crops that
may be sold to defray the cost of running the home and feeding its residents; provided, that
should the area later become so fully urbanized as to make this limitation on use economically,
impractical, any portion of the land may, with the written consent of the Donor, be put to
commercial use by the Donee by leasing the same for wholesome and socially-acceptable
activities; provided further that the rentals from such commercial leases shall be used, first, to
meet the expenses of the home; second, to enlarge its population and expand its facilities; and
finally for other charitable purposes in Laguna, in that order.
4.
Donee acknowledges that Donors generous act will greatly aid Donee in accomplishing
its mission on earth, and, recognizing the generosity of the Yulo family as the reason for such
act, Donee undertakes to cause every year the celebration of masses for the intention of the
various members of the family of Mr. Jose Yulo, Sr., on festive and solemn occasions in the said
family.
5.
Except with prior written consent of the Donor or its successor, the Donee shall not use the
land except for the purpose as provided above in paragraph 1 hereof, nor sell or dispose the land
for any reason whatsoever, nor convey any portion of the same except in lease for commercial
use as provided above in paragraph 3 hereof, otherwise the said land with all real improvements
thereon shall revert in trust to the Donor for prompt disposition in favor of some other charitable
organization that Donor may deem best suited to the care of the aged. (Underscoring supplied).
On the basis of the same deed, TCT No. T-82803 of the donor was cancelled and replaced by
TCT No. T-91348 in the name of donee Roman Catholic Bishop of San Pablo, Inc.
Thereafter, or sometime in 1980, the donee, for purposes of generating funds to build the
perimeter fence on the donated property and the construction of a nucleus building for the aged
and the infirm, leased a portion of the donated property to one Martin Gomez who planted said
portion with sugar cane. There is no dispute that the lease agreement was entered into by the
donee without the prior written consent of the donor, as required in the deed of donation. The
lease to Gomez ended in 1985.
The following year, 1986, a portion of the donated property was again leased by the donee, this
time to one Jose Bostre who used the leased area as a ranch. As explained by the donee, it
entered into a lease agreement with Bostre to protect the premises from vandals and for the
electrification of the nucleus building of the home for the aged and in the infirm, which was
named as Casa dela Merced. As before, however, the donee executed the lease contract
without the prior written consent of the donor.
After the termination of the Bostre lease agreement, the donee, for the third time, leased a
portion of the donated property to one Rudy Caballes who used the leased area for fattening
cattles. The donee explained that the lease agreement with Bostre was also for the purposes of
generating funds for the completion of Casa dela Merced. Again, however, the donee did not
secure the prior written consent of the donor.

Hence, on September 20, 1990, pursuant to a board resolution, the donor, through its president
Miguel A. Yulo, addressed a letter to the donee informing the latter that it was revoking the
donation in accordance with Section 5 of the deed due to the donees non-compliance with and
material breach of the conditions thereunder stipulated. In the same letter, the donor requested
for the turn-over of the donees TCT No. T-91348 over the donated property.
In a reply-letter dated November 5, 1990, the donee, through Bishop Pedro N. Bantigue, D.D.,
denied any material breach of the conditions of the deed of donation and manifested its
continued and faithful compliance with the provisions thereof. In the same letter, the donee
refused the turn-over of its title to the donor.
It was against the foregoing backdrop of events when, on November 19, 1990, in the Regional
Trial Court at Calamba, Laguna the donor, alleging non-compliance with and violation by the
donee of the conditions of the deed of donation, filed its complaint in this case against donee
Roman Catholic Archbishop of San Pablo, Inc., therein reciting the imputed non-compliance and
violations by the donee of the terms and conditions of the deed of donation, as follows:
a) non-construction of the home for the aged and infirmed in the lot despite the lapse
of a reasonable and considerable length of time;
b) present land use of the area is a cattle farm, the owner of which has a lease contract
with the donee; and
c) no prior written consent of the donor has been obtained for the present and actual
use of the property donated,
and accordingly prayed that the subject deed of donation be adjudged revoked and void and the
donee ordered to return and/or reconvey the property donated.
In its answer, defendant donee alleged that it was doing its best to comply with the provisions of
the deed of donation relative to the establishment of the home for the aged and the infirm, adding
that the leases of portions of the land were with the express, albeit unwritten consent, of Jesus
Miguel Yulo himself. In the same answer, defendant donee interposed the defense that the
donors cause of action for revocation, if any, had already prescribed because the leases were
known to the latter since 1980.
In a decision dated December 22, 1995, the trial court rendered judgment for donor-plaintiff C-J
Yulo & Sons, Inc., thus:
WHEREFORE, judgment is hereby rendered for plaintiff and against the defendant, declaring
the Deed of Donation dated September 24, 1977 (Exh. C) REVOKED, affirming plaintiffs
revocation of the same in the letter dated September 20, 1990 (Exh. D).
Defendant and all persons claiming rights under them are hereby ordered to immediately vacate
the premises of the donated property and to hand over to plaintiff the peaceful possession of the
aforesaid premises.

To avoid multiplicity of suits, the Register of Deeds of Calamba, Laguna, is hereby ordered to
require the defendant to surrender Transfer Certificate of Title No. T-91348 (Exh. B) and
thereafter cancel the same and issue, upon payment of the required fees, a new Transfer
Certificate of Title in favor of plaintiffs, with cost against the defendant.
SO ORDERED.
Therefrom, donee-defendant Roman Catholic Bishop of San Pablo, Inc., went to the Court of
Appeals in CA-G.R. CV No. 45392.
In the herein assailed Decision dated December 19, 1997,[3] the Court of Appeals reversed that
of the trial court and upheld the donation in question, to wit:
WHEREFORE, the decision of the trial court dated December 22, 1993 is hereby REVERSED
and the donation dated September 24, 1977 (Exhibit C) which conveyed title to the donated
property in the appellees name is hereby UPHELD.
SO ORDERED.
Its motion for reconsideration having been denied by the same court in its Resolution of April
30, 1998,[4] donor C-J Yulo & Sons, Inc., has come to this Court via the present recourse on its
sole submission that
THE RULING OF THE COURT OF APPEALS (THAT THE REVOCATION OF THE
DONATION BY PETITIONER WAS IMPROPER) IS CONTRARY TO LAW AND
APPLICABLE JURISPRUDENCE.
We DENY.
The Court of Appeals sustained the trial courts finding that the donation is an onerous one since
the donee was burdened with the establishment on the donated property of a home for the aged
and the infirm. It likewise agreed with the trial court that there were violations of the terms and
conditions of the deed of donation when the donee thrice leased a portion of the property without
the prior written consent of the donor. Likewise upheld by the appellate court is the ruling of the
trial court that the prescriptive period of the donors right to revoke the donation is ten (10) years
based on Article 1144 of the Civil Code, instead of four (4) years per Article 764 of the same
Code, and therefore the action for revocation filed by the petitioner is not barred by prescription.
Even then, the Court of Appeals reversed the trial courts decision, the reversal being premised
on the appellate courts finding that the breaches thrice committed by the respondent were
merely casual breaches which nevertheless did not detract from the purpose of which the
donation was made: the establishment of a home for the aged and the infirm.
We agree.

Petitioner contends that the case at bar is similar to the 1995 case of Central Philippine
University vs. Court of Appeals,[5] where the donee failed for more than 50 years to establish, as
required, a medical school on the land donated, and where this Court declared the donation to
have been validly revoked.
To the mind of the Court, what is applicable to this case is the more recent [2001] case of
Republic vs. Silim,[6] where respondent Silim donated a 5,600-square meter parcel of land in
favor of the Bureau of Public Schools, Municipality of Malangas, Zamboanga del Sur with the
condition that the said property should be used exclusively and forever for school purposes only.
Although a school building was constructed on the property through the efforts of the ParentTeachers Association of Barangay Kauswagan, the funds for a Bagong Lipunan school building
could not be released because the government required that it be built on a one-hectare parcel of
land. This led the donee therein to exchange the donated property for a bigger one.
In Silim, the Court distinguished the four (4) types of donations:
Donations, according to its purpose or cause, may be categorized as: (1) pure or simple; (2)
remuneratory or compensatory; (3) conditional or modal; and (4) onerous. A pure or simple
donation is one where the underlying cause is plain gratuity. This is donation in its truest form.
On the other hand, a remuneratory or compensatory donation is one made for the purpose of
rewarding the donee for past services, which services do not amount to a demandable debt. A
conditional or modal donation is one where the donation is made in consideration of future
services or where the donor imposes certain conditions, limitations or charges upon the donee,
the value of which is inferior than that of the donation given. Finally, an onerous donation is that
which imposes upon the donee a reciprocal obligation or, to be more precise, this is the kind of
donation made for a valuable consideration, the cost of which is equal to or more than the thing
donated.
Of all the foregoing classifications, donations of the onerous type are the most distinct. This is
because, unlike the other forms of donation, the validity of and the rights and obligations of the
parties involved in an onerous donation is completely governed not by the law on donations but
by the law on contracts. In this regard, Article 733 of the New Civil Code provides:
ARTICLE 733 Donations with onerous cause shall be governed by the rules on contracts, and
remuneratory donations by the provisions of the present Title as regards that portion which
exceeds the value of the burden imposed.
The donation involved in the present controversy is one which is onerous since there is a burden
imposed upon the donee to build a school on the donated property.
Here, the Court of Appeals correctly applied the law on contracts instead of the law on donations
because the donation involved in this case is onerous, saddled as it is by a burden imposed upon
the donee to put up and operate a home for the aged and the infirm. We thus quote with approval
the terse ruling of the appellate court in the challenged decision:

First, the violations of the conditions of the donation committed by the donee were merely casual
breaches of the conditions of the donation and did not detract from the purpose by which the
donation was made, i.e., for the establishment of a home for the aged and the infirm. In order for
a contract which imposes a reciprocal obligation, which is the onerous donation in this case
wherein the donor is obligated to donate a 41,117 square meter property in Canlubang, Calamba,
Laguna on which property the donee is obligated to establish a home for the aged and the infirm
(Exhibit C), may be rescinded per Article 1191 of the New Civil Code, the breach of the
conditions thereof must be substantial as to defeat the purpose for which the contract was
perfected (Tolentino, Civil Code of the Philippines, Vol. IV, pp. 179-180; Universal Food
Corp. v. Court of Appeals, 33 SCRA 1, 18; Ocampo v. Court of Appeals, 233 SCRA 551, 562).
Thus, in the case of Ocampo v. C.A. (ibid), citing the case of Angeles v. Calasanz (135
SCRA 323, 330), the Supreme Court ruled:
The right to rescind the contract for non-performance of one of its stipulations x x x is not
absolute. In Universal Food Corp. v. Court of Appeals (33 SCRA 1) the Court stated that:
The general rule is that rescission of a contract will not be permitted for a slight or casual breach,
but only for such substantial and fundamental breach as would defeat the very object of the
parties in making the agreement (Song Fo & Co. v. Hawaiian-Philippine Co., 47 Phil. 821,827).
The question of whether a breach of a contract is substantial depends upon the attendant
circumstances (Corpus v. Hon. Alikpala, et al., L-23707 & L-23720, Jan. 17, 1968).
The above ruling of the Court of Appeals is completely in tune with this Courts disposition in
Republic vs. Silim, supra. The donor therein sought to revoke the donation on the ground that
the donee breached the condition to exclusively and forever use the land for school purpose only,
but this Court ruled in favor of the donee:
Without the slightest doubt, the condition for the donation was not in any way violated when the
lot donated was exchanged with another one. The purpose for the donation remains the same,
which is for the establishment of a school. The exclusivity of the purpose was not altered or
affected. In fact, the exchange of the lot for a much bigger one was in furtherance and
enhancement of the purpose of the donation. The acquisition of the bigger lot paved way for the
release of funds for the construction of Bagong Lipunan school building which could not be
accommodated by the limited area of the donated lot.
As in Silim, the three (3) lease contracts herein entered into by the donee were for the sole
purpose of pursuing the objective for which the donation was intended. In fact, such lease was
authorized by the donor by express provision in the deed of donation, albeit the prior written
consent therefor of the donor is needed. Hence, considering that the donees acts did not detract
from the very purpose for which the donation was made but precisely to achieve such purpose, a
lack of prior written consent of the donor would only constitute casual breach of the deed,
which will not warrant the revocation of the donation.
Besides, this Court cannot consider the requirement of a prior written consent by the donor for
all contracts of lease to be entered into by the donee as an absolute ground for revocation of the

donation because such a condition, if not correlated with the purpose of the donation, would
constitute undue restriction of the donees right of ownership over the donated property.
Instructive on this point is the ruling of this Court in The Roman Catholic Archbishop of Manila
vs. Court of Appeals,[7] viz:
Donation, as a mode of acquiring ownership, results in an effective transfer of title over the
property from the donor to the donee. Once a donation is accepted, the donee becomes the
absolute owner of the property donated. Although the donor may impose certain conditions in
the deed of donation, the same must not be contrary to law, morals, good customs, public order
and public policy.
x

In the case at bar, we hold that the prohibition in the deed of donation against the alienation of
the property for an entire century, being an unreasonable emasculation and denial of an integral
attribute of ownership, should be declared as an illegal or impossible condition within the
contemplation of Article 727 of the Civil Code. Consequently, as specifically stated in said
statutory provision, such condition shall be considered as not imposed. No reliance may
accordingly be placed on said prohibitory paragraph in the deed of donation. The net result is
that, absent said proscription, the deed of sale supposedly constitutive of the cause of action for
the nullification of the deed of donation is not in truth violative of the latter, hence, for lack of
cause of action, the case for private respondents must fail.
If petitioner would insist that the lack of prior written consent is a resolutory condition that is
absolute in character, the insistence would not stand the validity test under the foregoing
doctrine. What would have been casual breaches of the terms and conditions of the donation,
may, in that event, even be considered as no breach at all when the Court strikes down such
absolute condition of prior written consent by the donor in all instances without any exception
whatsoever. The Court, however, understands that such a condition was written with a specific
purpose in mind, which is, to ensure that the primary objective for which the donation was
intended is achieved. A reasonable construction of such condition rather than totally striking it
would, therefore, be more in accord with the spirit of the donation. Thus, for as long as the
contracts of lease do not detract from the purpose for which the donation was made, the
complained acts of the donee will not be deemed as substantial breaches of the terms and
conditions of the deed of donation to merit a valid revocation thereof by the donor.
Finally, anent petitioners contention that the Court of Appeals failed to consider that respondent
had abandoned the idea of constructing a home for the aged and infirm, the explanation in
respondents comment is enlightening. Petitioner relies on Bishop Bantigues letter[8] dated
June 21, 1990 as its basis for claiming that the donee had altogether abandoned the idea of
constructing a home for the aged and the infirm on the property donated. Respondent, however,
explains that the Bishop, in his letter, written in the vernacular, expressed his concern that the
surrounding area was being considered to be re-classified into an industrial zone where factories
are expected to be put up. There is no question that this will definitely be disadvantageous to the
health of the aged and the infirm. Thus, the Bishop asked permission from the donor for a

possible exchange or sale of the donated property to ultimately pursue the purpose for which the
donation was intended in another location that is more appropriate.
The Court sees the wisdom, prudence and good judgment of the Bishop on this point, to which it
conforms completely. We cannot accede to petitioners view, which attributed the exact
opposite meaning to the Bishops letter seeking permission to sell or exchange the donated
property.
In Silim, supra, this Court ruled that such exchange does not constitute breach of the terms and
conditions of the donation. We see no reason for the Court to think otherwise in this case. To
insist that the home for the aged and infirm be constructed on the donated property, if the
industrialization indeed pushes through, defies rhyme and reason. Any act by the donor to
prevent the donee from ultimately achieving the purpose for which the donation was intended
would constitute bad faith, which the Court will not tolerate.
WHEREFORE, the instant petition is DENIED and the assailed decision of the Court of
Appeals AFFIRMED in toto.
No pronouncement as to costs.
SO ORDERED.
Panganiban, (Chairman), Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

Philippine Supreme Court Jurisprudence > Year 1956 > June 1956 Decisions > [G.R. No.
L-8029. June 28, 1956.] EMILIA ESPIQUE and SANTIAGO ESPIQUE, PlaintiffsAppellants, vs. JACINTO ESPIQUE, Defendant-Appellee.:

EN BANC
[G.R. No. L-8029. June 28, 1956.]
EMILIA ESPIQUE and SANTIAGO ESPIQUE, Plaintiffs-Appellants, vs.
JACINTO ESPIQUE, Defendant-Appellee.
DECISION
BAUTISTA ANGELO, J.:
This is an action for partition of three parcels of land situated in Tayug, Pangasinan based
on the claim that they are owned in common and pro indiviso by Plaintiffs and
Defendant. Plaintiffs also pray for damages representing unenjoyed profits from 1916 to
1949, or a period of 33 years.

The defense of Defendant is that said lands were given to him and his wife by his parents
Basilio ESPIQUE and Maria Diaz as well as his grandfather Julian ESPIQUE by way of
a donation propter nuptias on May 8, 1906 and since then he and his wife have been in
possession and enjoyment thereof for a period of 44 years adversely and without
interruption. He pleaded prescription and lack of cause of action.
On the date set for hearing, the parties submitted a stipulation of facts wherein, among
other things, they agreed (1) that Plaintiffs and Defendant are the legitimate children of
Basilio ESPIQUE and Maria Diaz, the former being the legitimate son of Julian
ESPIQUE, and (2) that the properties in question were donated propter nuptias by Julian
ESPIQUE and the spouses Basilio ESPIQUE and Maria Diaz in favor of Jacinto
ESPIQUE and Victorina Abenojar, but the donation was merely made in a private
document executed on May 8, 1906.
In view of the above stipulation of facts, Defendant submitted a motion to dismiss, to
which Plaintiffs filed a reply and, thereafter, the court rendered judgment finding that
Plaintiffs complaint has no cause of action it appearing that the properties which are
sought to be partitioned were donated to Defendant since 1906 who has been in
possession thereof adversely and continuously for more than forty years and, hence, has
acquired title thereto by prescription. Consequently, the court dismissed the action
without pronouncement as to costs. Plaintiffs appealed from this decision in due course
but the Court of Appeals certified the case to this Court on the ground that it merely
involves questions of law.
The question to be determined is whether the lower court erred in concluding that
Plaintiffs complaint states no cause of action because, considering its allegations and the
stipulation of facts submitted by the parties, the properties in question were donated to
Defendant by his predecessors-in-interest way back in 1906 and since then he has been in
possession and enjoyment thereof adversely, openly and without interruption up to 1949,
or for a period of more than forty years.
Plaintiffs sustain the affirmative on the plain plea that the deed of donation which
Defendant claims as the basis of his title being one in consideration of marriage is null
and void and as such could not have conveyed or transferred any title, right or interest
over the lands in question to Defendant because it has not been executed in a public
document. And even if said donation may be said to be the basis of acquisitive
prescription, Plaintiffs contend that there is no evidence whatever showing that the
possession of Defendant has been continuous, public open and adverse for more than 30
years as found by the trial court.
There is no question that the donation in question is invalid because it involves an
immovable property and the donation was not made in a public document as required by
Article 633 of the old Civil Code, in connection with Article 1328 of the same Code
(concerning gifts propter nuptias), but it does not follow that said donation may not serve
as basis of acquisitive prescription when on the strength thereof the donee has taken
possession of the property adversely and in the concept of owner, for, as this Court well
said: While the verbal donation, under which the Defendants, and his predecessors in
interest have been in possession of the lands in question, is not effective as a transfer of
title, yet it is a circumstance which may explain the adverse and exclusive character of
chanroblesvirtuallawlibrary

the possession (Pensader vs. Pensader, 47 Phil., 959;

See also Dimaliwat vs.
Dimaliwat, 55 Phil., 673-680). That is also an action for partition. It was shown that the
donation of the property was made not even in a private document but only verbally. It
was also shown that the Defendants, through their predecessors-in-interest, were in
adverse and continuous possession of the lands for a period of over 30 years. Yet, the
court decided the case in favor of Defendants on the ground of acquisitive prescription.
There is also a close parallelism between the facts of this case and the present.
chan

roblesvirtualawlibrary

It is true that no evidence was presented showing the character of the possession held by
the Defendant of the lands in question, but such is unnecessary considering the
admissions made by Plaintiffs in the complaint and in the stipulation of facts. A careful
analysis of the admissions made in both pleadings would at once reveal that Defendant
has been in open, adverse and continuous possession of said lands since at least 1916 up
to 1949, or for a period of 33 years. Thus, it appears in paragraphs 4 and 5 of the first
cause of action that Defendant has been in possession of the lands in question and has
appropriated unto himself the whole produce of the aforementioned parcels of land,
from 1916 up to the present so much so that Plaintiffs prayed that they be given their
share of the produce during said period by way of damages in the total amount of
P22,000.
We do not need to stretch our mind to see that under such allegations Plaintiffs intended
to convey the idea that Defendant has possessed the lands openly, adversely and without
interruption from 1916 to 1949 for he is the one who has possessed them and reaped the
whole benefit thereof. As to the character of the possession held by Defendant during
that period one cannot also deny that it is in the concept of owner considering that the
lands were donated to him by his predecessors-in-interest on the occasion of his marriage
even if the same was not embodied in a public instrument. The essential elements
constituting acquisitive prescription are therefore present which negative the right of
Plaintiffs to ask for partition of said properties. On this point we find pertinent the
following observation of the trial court. Any person who claims right of ownership over
immovable properties and does not invoke that right but instead tolerated others in
possession for thirty years is guilty of laches and negligence and he must suffer the
consequences of his acts.
With regard to the contention that the trial court dismissed the case without first
receiving the evidence the Plaintiffs may desire to present in support of their contention,
it is true that this right was reserved by the parties in the stipulation of facts and Plaintiffs
asked in their motion for reconsideration that they be given a chance to prove some
additional facts, but they failed to state clearly what those facts are and the nature of the
evidence they would like to present, for which reason the court denied their request.
Undoubtedly, the trial court did not deem necessary any additional evidence considering
the admissions made by the Plaintiffs as above adverted to.
Considering the conclusion we have reached, we hold that the trial court did not err in
this respect.
Wherefore, the decision appealed from is affirmed, without pronouncement as to costs.
Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Labrador, Concepcion, Reyes, J.B.L., and
Endencia, JJ., concur.

THIRD DIVISION
[G.R. No. 134267. May 9, 2005]
DAVID G. DULA, petitioner, vs. DR. RESTITUTO MARAVILLA and TERESITA
MARAVILLA, respondents.
DECISION
GARCIA, J.:
Under consideration is this petition for review on certiorari under Rule 45 of the Rules of Court
to nullify and set aside the following issuances of the Court of Appeals in CA-G.R. SP No.
46736, to wit:
1)

Decision[1] dated May 14, 1998, affirming, with modification, an earlier decision of
the Regional Trial Court at Makati City in an appealed ejectment case commenced by
the herein respondents against the petitioner before the Metropolitan Trial Court
(MeTC) of Makati City; and

2)

Resolution[2] dated June 29, 1998, denying petitioners motion for reconsideration.

The factual milieu.

Sometime in November, 1993, herein respondents the spouses Restituto Maravilla and
Teresita Maravilla purchased a 5-door apartment building at No. 1849 Eureka Street, Makati
City, Unit A of which is occupied by herein petitioner, David G. Dula, since 1968 at a monthly
rental of P2,112.00 under an oral month-to-month contract of lease with the former owner.
On January 10, 1994, respondents addressed a notice to petitioner formally informing the latter
of the termination of his lease and giving him three (3) months from January 31, 1994 within
which to vacate the unit occupied by him and to surrender the possession thereof. Petitioner
refused. Hence, on September 29, 1994 in the Metropolitan Trial Court (MeTC) of Makati City,
a complaint for ejectment was filed against him by the respondents.
Resolving the case under the Rules on Summary Procedure, the MeTC, in a decision dated May
24, 1995,[3] rendered judgment for the respondents, thus:
There having been a substantial compliance with the requirements provided by law, judgment is
hereby rendered in favor of the plaintiff and against the defendant as follows:
(a)

Ordering the defendant DAVID DULA and all persons claiming right or
interest under him to vacate the leased premises in question and to turn over

the peaceful possession thereof to plaintiff or to its duly authorized

representative;
(b)

Ordering the defendant to pay plaintiff the sum of P2,112.00 a month from
September 1994 and every month thereafter until possession thereof should
have been peacefully surrendered to plaintiff;

(c)

Ordering defendant to pay plaintiff the sum of TWENTY THOUSAND

PESOS (P20,000.00) as and for attorneys fees; and,

(d)

to pay the costs of suit.

SO ORDERED.
In time, petitioner went on appeal to the Regional Trial Court (RTC) at Makati City, contending,
in the main, that the complaint filed against him failed to state a cause of action, and, therefore,
should have been dismissed outright by the MeTC.
After the parties have submitted their respective memoranda, the RTC came out with its decision
of August 27, 1997,[4] affirming in toto the appealed decision of the MeTC.
With his motion for reconsideration having been denied by the same court in its order of January
26, 1998,[5] petitioner elevated the case to the Court of Appeals whereat his recourse was
docketed as CA-G.R. SP No. 46736, therein raising the following arguments: (1) the ejectment
complaint is fatally flawed as it failed to state a cause of action because while it is based on the
need of the leased premises for the personal use of the respondents, the same complaint failed to
allege that respondents do not own any other residential unit in the same municipality, as
required by Section 5 (c) of Batas Pambansa (B.P.) Blg. 877; (2) both the MeTC and the RTC
erred in ordering petitioners ejectment on ground of expiration of the lease despite the fact that
such a ground is not pleaded in the complaint; and (3) even if alleged, the expiration of
petitioners month-to-month contract of lease cannot be a basis for ejectment because Section 6
of B.P. Blg. 877 suspended the application of Article 1687 of the Civil Code.
In the herein assailed decision dated May 14, 1998, the Court of Appeals affirmed the appealed
May 24, 1995 decision of the RTC minus the award of attorneys fees, thus:
WHEREFORE, with the exception of the deletion of the award for attorneys fees, the decision
herein appealed from is hereby AFFIRMED, without pronouncement as to costs.
SO ORDERED.
Undaunted, petitioner is now with us via the instant recourse raising the same issues already
passed upon by the three (3) courts below.
We DENY.

In the complaint[6] they filed against petitioner before the MeTC of Makati City, respondents, as
plaintiffs therein, alleged, inter alia, thus:
6.
That on January 10, 1994 plaintiffs through counsel made a written notice and demand that
the former is terminating the lease over the premises effective January 31, 1994 for the reason of
personal use and to pay rentals with three (3) months to vacate and surrender premises;
As may be gleaned from the foregoing allegations, two (2) grounds are relied upon by the
respondents in seeking petitioners ejectment from the premises in question, namely:
(a)

respondents need of the leased premises for their own personal use; and

(b)

expiration of the lease contract with the termination of the month-to-month lease
effective January 31, 1994.

In both instances, respondents gave petitioner a grace period of three (3) months within which to
vacate the place.
The aforementioned grounds for judicial ejectment are expressly provided for in B.P. Blg. 877,
entitled An Act Providing for the Stabilization and Regulation of Rentals of Certain Residential
Units and for other Purposes, which, by virtue of R.A. 7644, was in force until 1997. Section 5
thereof pertinently reads:
Section 5. Grounds for Judicial Ejectment. Ejectment shall be allowed on the following
grounds:
xxx

xxx

xxx

(c)
Legitimate need of owner/lessor to repossess his property for his own use or for the use
of any immediate member of his family as a residential unit, such owner or immediate member
not being the owner of any other available residential unit within the same city or municipality:
Provided, however, That the lease for a definite period has expired: Provided, further, That the
lessor has given the lessee formal notice three (3) months in advance of lessors intention to
repossess the property: and Provided, finally, That the owner/lessor is prohibited from leasing
the residential unit or allowing its use by a third party for at least one year.
xxx
(f)

xxx

xxx

Expiration of the period of the lease contract.

xxx

xxx

xxx

Anent the first ground under Section 5(c) above, which is the respondents need of the property
for their own use, petitioner contends that the complaint should be dismissed for lack of cause of
action because it failed to allege that the respondents had no other available residential unit
within the same city or municipality.

We agree with the Court of Appeals that there was here a substantial compliance with the
requirement of Section 5 (c) of B.P. Blg. 877 when respondents specifically averred in their
Supplemental to Position Paper that plaintiffs has (sic) no other property in Makati except that
property located at Eureka St., Makati, Metro Manila[7]. In much the same way that a complaint,
which fails to state a cause of action, may be cured by evidence presented during the trial in
regular procedure, a defective complaint in summary procedure may likewise be cured by the
allegations in the position paper. Thus, the MeTC cannot be faulted for not dismissing the case
for lack of cause of action.
The ground for judicial ejectment stated in Section 5 (c) of B.P. Blg. 877 may be reduced to the
following essential requisites:
(1)

the owners/lessors legitimate need to repossess the leased property for his own
personal use or for the use of any of his immediate family;

(2)

the owner/lessor does not own any other available residential unit within the same city
or municipality;

(3)

the lease for a definite period has expired;

(4)

there was formal notice at least three (3) months prior to the intended date to repossess
the property; and

(5)

the owner must not lease or allow the use of the property to a third party for at least one
year.

Thus far, we have noted and discussed the first and second requisites. The fact that there was
formal notice and that it was given at least three (3) months from intended date to repossess the
property, which is the fourth requisite, is not disputed.
Our discussion now brings us to the third element, which is the alleged expiration of the period
of lease.
It is acknowledged that there was neither any written nor verbal agreement as to a fixed period of
lease between the respondents and the petitioner. There was, however, a verbal agreement for
the payment of rental at P2,112.00 on a monthly basis. By express provision of Article 1687[8] of
the Civil Code, the term of the lease in the case at bar is from month-to-month. Admittedly,
there was a written notice served by the respondents on January 10, 1994 upon petitioner for the
termination of the lease effective January 31, 1994. Citing this Courts ruling in De Vera vs.
Court of Appeals,[9] the Court of Appeals held that the period of lease thereby expired by the end
of the month of January, 1994.
Petitioner, however, contends otherwise. He argues that the operation of Article 1687 was
suspended with the suspension of Article 1673 by Section 6 of B.P. Blg. 877, which states:

Section 6. Application of the Civil Code and Rules of Court of the Philippines. Except when
the lease is for a definite period, the provisions of paragraph (1) of Article 1673[10] of the Civil
Code of the Philippines, insofar as they refer to residential units covered by this Act, shall be
suspended during the effectivity of this Act, but other provisions of the Civil Code and the Rules
of Court on lease contracts, insofar as they are not in conflict with the provisions of this Act shall
apply.
The Court disagrees.
The Courts pronouncement in De Vera vs. Court of Appeals,[11] is enlightening:
x x x The issue in this case is whether the oral contract of lease was on a month-to-month basis
which is terminated at the end of every month. We hold that it is. We have already ruled in a
number of cases that a lease on a month-to-month basis is, under Art. 1687, a lease with a
definite period, upon the expiration of which upon demand made by the lessor on the lessee to
vacate, the ejectment of the lessee may be ordered.
Art. 1687 of the Civil Code provides:
Art. 1687. If the period for the lease has not been fixed, it is understood to be from year to year,
if the rent agreed upon is annual; from month to month, if it is monthly; from week to week, if
the rent is weekly; and from day to day, if the rent is to be paid daily. However, even though a
monthly rent is paid, and no period for the lease has been set, the Courts may fix a longer term
for the lease after the lessee has occupied the premises for over one year. If the rent is weekly,
the Courts may likewise determine a longer period after the lessee has been in possession for
over six months. In case of daily rent, the courts may also fix a longer period after the lessee has
stayed in the place for over one month.
This provision has not been affected by the suspension in 6 of B.P. Blg. 877 which provides:
6. Application of the Civil Code and Rules of Court of the Philippines. - Except when the lease
is for a definite period, the provisions of paragraph (1) of Article 1673 of the Civil Code of the
Philippines, in so far as they refer to residential units covered by this Act, shall be suspended
during the effectivity of this Act, but other provisions of the Civil Code and the Rules of Court
on lease contracts, in so far as they are not in conflict with the provisions of this Act shall apply.
Thus, what has been suspended by the Rent Control Law (6 of B.P. Blg. 877, formerly 6
of B.P. Blg. 25) is Art. 1673 and not Art. 1687 of the Civil Code. The effect of the suspension
[of Art. 1673] on Art. 1687 is only that the lessor cannot eject the tenant by reason alone of the
expiration of the period of lease as provided in said Art. 1687. Otherwise, Art. 1687 itself has not
been suspended. Hence, it can be used to determine the period of a lease agreement.
As petitioner was notified of the expiration of the lease effective December 30, 1990, her
right to stay in the premises came to an end. (Emphasis supplied.)

As early as 1986, in Rivera vs. Florendo,[12] the Court settled this issue on Section 6 of B.P. 877
(formerly Section 6, of B.P. 25) when it explained:
What is suspended under the aforequoted provision of law is Article 1673 of the Civil Code of
the Philippines and not Article 1687 of the same Code. The effect of said suspension is that
independently of the grounds for ejectment enumerated in Batas Pambansa Blg. 25, the
owner/lessor cannot eject the tenant by reason of the expiration of the period of lease as fixed or
determined under Article 1687. It does not mean that the provisions of Article 1687 itself had
been suspended. Thus, the determination of the period of a lease agreement can still be made in
accordance with said Article 1687.
Similar to the case at bar, in Rivera, there was admittedly no definite period of lease agreed upon
by the parties. However, it was established that the rent was paid on a monthly basis. The
Courts conclusion in Rivera that the period of lease is considered to be from month to month in
accordance with Article 1687 is, therefore, applicable to the present case as well.
When the respondent spouses gave petitioner notice on January 10, 1994 of their personal need
to use the property, demanding that petitioner vacate the same, the contract of lease is deemed to
have expired as of the end of that month or on January 31, 1994 as indicated in the said notice to
vacate.
In Baens vs. Court of Appeals,[13] we held:
x x x even if the month to month arrangement is on a verbal basis, if it is shown that the lessor
needs the property for his own use or for the use of an immediate member of the family or any
other statutory grounds to eject under Section 5 of Batas Pambansa Blg. 25 (later also Section 5
of B.P. Blg. 877), which happens to be applicable, then the lease is considered terminated as
of the end of the month, after proper notice or demand to vacate has been given. (See
Crisostomo v. Court of Appeals, 116 SCRA 199). (Emphasis supplied.)
The third element required in Section 5(c) of B.P. Blg. 877 which is the expiration of the lease
contract is definitely present in the instant case.
The fifth element, being in the nature of a condition, simply entails an undertaking by the
owner/lessor not to lease or allow a third party to use the property for at least one year.
All the elements required by Section 5(c) of B.P. Blg. 877 are extant in the present case. There
is, then, no other logical conclusion but to uphold the uniform ruling of the three (3) lower courts
mandating petitioners ejectment from the subject premises.
Anent the second ground for judicial ejectment under Section 5(f) of B.P. Blg. 877 which is the
expiration of the lease contract, this Court for the first time, through Justice Teodoro Padilla in
Uy Hoo and Sons Realty Development Corp. vs. Court of Appeals,[14] applied Article 1687 of the
Civil Code resulting in the expiration of the lease contract therein involved, so much so that even
if the lessor does not need the leased property for personal use under Section 5(c) of B.P. Blg.

877, such expiration of the lease term may be equally be used by the lessor to eject the tenant
based on Section 5(f) of B.P. 877, ratiocinating thus:
While it is true that the factual situations in the Miranda case and in the Rivera case it cites
involved a need by the lessor of the leased premises for his own use or that of an immediate
member of his family, yet, the thrust of the decisions in said cases appears to be that the
determination of the period of a lease agreement can still be made in accordance with said
Article 1687 and that, in a month to month lease situation, when petitioners (lessor) gave
private respondent (lessee) notice to vacate the premises in question, the contract of lease is
deemed to have expired as of the end of the month.
Besides, while Sec. 5(f) of BP Blg. 25 originally stated that expiration of the period of a written
lease contract is one of the grounds for judicial ejectment (like need of the leased premises by
the lessor under Sec. 5[c]). BP Blg. 877 amended Sec. 5(f) of BP Blg. 25 into stating that
expiration of the period of the lease contract is a ground for judicial ejectment: thus further
bolstering petitioners contention that a month to month lease under Art. 1687 is lease with a
definite period, the expiration of which, upon previous demand to vacate, can justify judicial
ejectment.
The ruling in Uy Hoo was applied by the Court in the succeeding cases of Palanca vs.
Intermediate Appellate Court,[15] Legar Management & Realty Corp. vs. Court of Appeals,[16]
and once again, in De Vera vs. Court of Appeals[17], where the Court ruled:
Second. Petitioner claims that none of the grounds enumerated in 5 of B. P. Blg. 877 is present
in this case for which reason, she could not be judicially ejected from the property by reason
alone of the expiration of the lease. The contention has no basis. The expiration of a period of
lease as a ground for ejectment is expressly provided in 5(f). Petitioner is in error in relying
on 5 of the original law, B.P. Blg. 25, which speaks of the expiration of written lease contract
as ground for ejectment implying that an oral lease contract like the one at bar is a lease contract
without a definite period. B.P. Blg. 877 5(f) now says expiration of the period of the lease
contract, thus removing the distinction between a written and oral contract of lease. Hence, the
ejectment of petitioner is justified. (Emphasis supplied.)
Recapitulating, the Court stresses that Article 1687 of the Civil Code has not been suspended by
Section 6 of Blg. 877, such that the period of the lease contract may be made deemed to expire in
accordance with Article 1687.[18] Accordingly, a lease agreement though not having a fixed
period, but rentals are paid monthly, is deemed to be from month to month, thereby considered
to be for a definite period, nonetheless. Such a lease contract expires after the last day of any
given 30-day period repeating the same cycle of the 30-day period until either party expresses his
intention to terminate the month-to-month lease agreement.[19]
All told, petitioner failed to show why the actions of the three courts which have passed upon the
same issue should be reversed. Likewise, he failed to show that said courts factual findings are
not based on substantial evidence or that their decisions are contrary to applicable law and
jurisprudence.

Finally, with this case having been unnecessarily prolonged from the time it was filed in 1994,
petitioners lease has in effect been extended long enough for him to find another place to stay
in. As in Rivera, supra, per then Justice (later Chief Justice) Marcelo Fernan, where the Court
said:
The instant case, which is summary in nature, had dragged on for over five (5) years. To
obviate further delay, the decision rendered herein is final and executory (Emphasis
supplied.),
this case which has dragged on not only for five (5) years but more than ten (10) years, will more
than justify this Court in suspending the Rules in the greater interest of substantial justice.
WHEREFORE, petition is DENIED. This judgment is immediately executory.
SO ORDERED.
Panganiban, (Chairman), Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION
G.R. No. L-57586 October 8, 1986
AQUILINO RIVERA, ISAMU AKASAKO and FUJIYAMA HOTEL & RESTAURANT, INC., petitioners,
vs.
THE HON. ALFREDO C. FLORENDO, as Judge of the Court of First Instance of Manila (Branch XXXVI),
LOURDES JUREIDINI and MILAGROS TSUCHIYA, respondents.

Bobby P. Yuseco for petitioners.

Arthur Canlas for private respondents.

PARAS, J.:

This is a petition for certiorari and prohibition with preliminary injunction seeking the annulment of
the following Orders of the then Court of First Instance of Manila, Branch XXXVI: (a) Order dated June 5,
1981 directing the issuance of a writ of preliminary mandatory injunction requiring petitioners Fujiyama
Hotel & Restaurant, Inc., Isamu Akasako and Aquilino Rivera to allow respondents Lourdes Jureidini and
Milagros Tsuchiya to manage the corporate property upon filing of a bond in the amount of P30,000.00
(Rollo, pp. 43-57) and (b) Order dated July 24, 1981 denying petitioners' motion for reconsideration and
motion to dismiss for lack of jurisdiction but increasing the bond to P120,000.00 (Rollo, p. 81).

Petitioner corporation was organized and register under Philippine laws with a capital stock of
P1,000,000.00 divided into 10,000 shares of P100.00 par value each by the herein petitioner Rivera and
four (4) other incorporators. Sometime thereafter petitioner Rivera increased his subscription from the
original 1,250 to a total of 4899 shares (Rollo, p. 4).

Subsequently, Isamu Akasako, a Japanese national and co-petitioner who is allegedly the real owner
of the shares of stock in the name of petitioner Aquilino Rivera, sold 2550 shares of the same to private
respondent Milagros Tsuchiya for a consideration of P440,000.00 with the assurance that Milagros
Tsuchiya will be made the President and Lourdes Jureidini a director after the purchase. Aquilino Rivera
who was in Japan also assured private respondents by overseas call that he will sign the stock
certificates because Isamu Akasako is the real owner. However, after the sale was consummated and
the consideration was paid with a receipt of payment therefor shown, Aquilino Rivera refused to make
the indorsement unless he is also paid. (Rollo, pp. 51-52).

It also appears that the other incorporators sold their shares to both respondent Jureidini and
Tsuchiya such that both respondents became the owners of a total of 3300 shares or the majority out of
5,649 outstanding subscribed shares of the corporation (Rollo, pp. 4-5), and that there was no dispute as
to the legality of the transfer of the stock certificate Exhibits "B-1" to "B-4" to Jureidini, all of which bear

the signatures of the president and the secretary as required by the Corporation Law with the proper
indorsements of the respective owners appearing thereon. Exhibits "B-1" to "B-4" are specifically
indorsed to her while Exhibits "B-2" and "B-3" are indorsed in blank. Aquilino Rivera admitted the
genuineness of an the signatures of the officers of the corporation and of an the indorsee therein.
(Order dated June 5, 1981, Civil Case No. 13273, Rollo, pp. 51-53).

Nonetheless, private respondents attempted several times to register their stock certificates with the
corporation but the latter refused to register the same. (Ibid., Rollo, pp. 54-55). Thus, private
respondents filed a special civil action for mandamus and damages with preliminary mandatory
injunction and/or receivership naming herein petitioners as respondents, docketed as Special Civil
Action No. 13273, "Lourdes Jureidini, et al. v. Fujiyama Hotel et al." of the Court of First Instance of
Manila, Branch XXXVI presided by respondent Judge. Petitioners' counsel Atty. Marcelino A. Bueno,
upon receipt of the summons and a copy of the aforesaid petition, filed an answer thereto with denials,
special and affirmative defenses and counterclaim. Thereafter, a hearing was held on the application for
preliminary mandatory injunction and/or receivership, after which respondent Judge issued an order for
a writ of preliminary mandatory injunction authorizing respondent Jureidini and Tsuchiya to manage the
corporation's hotel and restaurant, upon the filing of a bond in the amount of P30,000.00. Then through
another counsel Atty. Eriberto D. Ignacio in collaboration with their counsel of record, Atty. Marcelino A.
Bueno, petitioners (respondents therein) filed a motion to dismiss the petition on the ground that
respondent Judge has no jurisdiction to entertain the case, while through Atty. Bueno, they filed a
motion for reconsideration of the Order granting the issuance of a writ of mandatory preliminary
injunction. Private respondents filed their opposition to both motions and on July 24, 1981, respondent
Judge issued an Order denying both the motion for reconsideration and the motion to dismiss the
petition but increased the amount of the bond from P30,000.00 to P120,000.00 to sufficiently protect
the interests of herein petitioners. (Rollo, p. 81).

Hence, this petition.

After filing the petition, Atty. Eriberto D. Ignacio withdrew as counsel for petitioners on August 6,
1981. Such withdrawal was confirmed by petitioner Isamu Akasako (Rollo, p. 83). On August 10, 1981
the appearance of Isaca & Espiritu Law Offices as counsel in substitution of former counsel Attys.
Marcelino A. Bueno and Eriberto D. Ignacio was received by this Court. (Rollo, p. 84); all of which were
noted in the resolution of the First Division of this Court dated August 17, 1981. (Rollo, p. 160).

The new counsel filed a Manifestation and Motion praying that the therein attached Supplement and
certified copies of the questioned orders and writs be admitted and considered as part of petitioners'

original petition for certiorari and Prohibition with Preliminary injunction. (Rollo, pp. 85-131). On August
14, 1981 petitioners filed an Urgent Motion for Restraining Order and Other Provisional Injunctive
Reliefs (Rollo, pp. 154-159). In the same resolution of August 17, 1981, after deliberating on the petition
and supplemental to the petition, the Court Resolved: (a) to require the respondents to comment
thereon (not to file a motion to dismiss within ten (10) days from notice and (b) upon petitioners' filing
of an injunction bond in the amount of P30,000.00 to issue a Writ of Preliminary Injunction enjoining
respondents from enforcing the writ of preliminary mandatory injunction dated June 23, 1981 issued in
Civil Case No. 132673. (Rollo, p. 160). Said bond was filed on August 20, 1981 (Rollo, p. 161) and
accordingly, a writ of preliminary injunction was issued by this Court on August 21, 1981 (Rollo, pp. 172173).

Subsequently, petitioners filed a manifestation and urgent motion on August 28, 1981 praying that
private respondent Lourdes Jureidini and her counsel Atty. Arthur Canlas be declared in contempt of
court for the former's alleged defiant refusal: (a) to acknowledge receipt of the Writ of Preliminary
Injunction of August 21, 1981 and (b) to comply with the said writ issued by this Court. (Rollo, pp. 174180).

Comment thereon was filed by private respondents through counsel (Rollo, pp. 185-199) in
compliance with the resolution of the First Division dated August 17, 1981 (Rollo, p. 160), praying for the
immediate lifting of the preliminary injunction. Said comment of private respondents was noted in the
resolution of October 5, 1981 (Rollo, p. 200) which also required respondents to comment on the
supplement to the petition.

On October 2, 1981, comment on the manifestation and urgent motion to declare Jureidini and her
counsel in contempt of court was filed by counsel for private respondent (Reno, pp. 201-214) in
compliance with the resolution of September 14, 1981 (Rollo, p. 181).

In the resolution of October 26, 1981 (Reno, p. 215) the Court Resolved to require petitioners to file a
reply to aforesaid comment. (Rollo, p. 215).

Meanwhile, supplemental comment on the supplement to the petition was filed by private
respondents on October 14, 1981 (Rollo, pp. 216-222) reiterating their stand that it is the ordinary court
and not the Securities and Exchange Commission (SEC) that has jurisdiction to entertain the case as the
controversies did not arise from the intra-corporate relationship among the parties.

On October 21, 1981, petitioner filed: (a) motion for leave to file reply to comment of respondents on
the petition and supplemental petition required in the resolution of August 17, 1981 (Rollo, pp. 223-224)
and (b) the attached Reply (Rollo, pp. 225-241). On November 25, 1981, petitioners filed their Reply to
respondents' Comment on petitioners' manifestation and urgent motion to declare them in contempt.
(Rollo, pp. 246-257).

On December 7, 1981 Atty. Bobby P. Yuseco entered his appearance as collaborating counsel for
petitioners (Rollo, p. 258) and filed an urgent petition for early resolution of petitioners' motion to hold
private respondents in contempt and for issuance of Order clarifying Writ of Injunction dated August 21,
1981. (Rollo, pp. 259-261).

In the resolution of January 18, 1982, this case and all pending incidents were set for hearing on
February 3, 1982. (Rollo, p. 268).

On February 1, 1982, Lesaca and Espiritu Law Offices filed a Manifestation and Motion for Leave to
withdraw as counsel for petitioners. (Rollo, pp. 274-275).

When this case was called for hearing on February 3, 1982, counsel for both parties appeared and
argued their causes and both were required by the Court within an unextendible period of ten (10) days
to file their respective memoranda in support of their positions on an pending incidents of the case at
bar while the hearing on the contempt proceedings was reset for February 10, 1982 where the personal
appearance of private respondent Lourdes Jureidini through her counsel was required. (Rollo, p. 279).

On February 9, 1982, counsel for private respondent Jureidini filed an Urgent Motion and
Manifestation that he was informed by his client that she is physically exhausted and is beset with
hypertension and praying that she be excused from appearing at the hearing set for February 10, 1982,
that the hearing be cancelled and the contempt incident be considered submitted for decision on the
basis of pleadings previously filed. (Rollo, pp. 280-282).

On the same date, February 9, 1982, counsel for petitioners filed his Memorandum in support of his
oral argument at the hearing of February 3, 1982, (Rollo, pp. 283-287) while a supplement thereto was
filed on February 12, 1982. (Rollo, pp. 291-294).

At the hearing of February 10, 1982, private respondent Lourdes Jureidini and her counsel failed to
appear. Accordingly the Court Resolved: (a) to IMPOSE on said counsel Atty. Canlas a fine of P200.00 or
to suffer imprisonment if said fine is not paid; (b) to RESET the hearing on the contempt incidents on
March 3, 1982 and (c) to REQUIRE the presence of Atty. Canlas and respondent Lourdes Jureidini and of
complainants Attys. Bibiano P. Lasaca, Rodolfo A. Espiritu and Renato T. Paqui. (Resolution of February
10, 1982, Rollo, p. 290).

On February 15, 1982, private respondents file their memorandum in compliance with the resolution
of this Court of February 3, 1982 while petitioners on February 25, 1982 filed their reply thereto.

At the hearing of March 3, 1982, both counsel as well as private respondent Lourdes Jureidini, Attys.
Bibiano P. Lesaca, Rodolfo A. Espiritu and Renato R. Paguio appeared. Atty. Canlas, Lourdes Jureidini,
Atty. Lesaca and a representative of the petitioners were interpellated by the Court. Thereafter, the
incident was declared submitted for resolution. (Resolution of March 3, 1982, Rollo, p. 316).

On March 5, 1982, counsel for private respondents filed his compliance with the resolution of
February 10, 1982 enclosing a check payable to this Court in the amount of P200.00 in payment of the
fine imposed with motion for reconsideration explaining why he should not be declared in contempt
and praying that the aforesaid resolution of February 10, 1982 be set aside, (Rollo, pp. 312-314).
However, in the resolution of March 10, 1982, (Rollo, p. 317) the Court acting on the compliance of Atty.
Arthur Canlas with motion for reconsideration, denied the motion and required the Chief of the Docket
Division to return to Atty. Canlas the check in the amount of P200.00 it being an out of town check, and
Atty. Canlas to pay the fine in cash, and to show cause why he should not be disciplinary dealt with or
held in contempt for wilful delay in paying the fine by mail through an out of town check contrary to his
manifestation at the hearing that he had promptly paid the fine, both within forty eight hours from
notice.

Meanwhile, counsel for petitioners filed on April 6, 1982 an Urgent Petition for Permission to
Implement Injunction Writ issued on August 21, 1981 (Rollo, pp. 323-325) which was granted in the
resolution of May 26, 1982 (Rollo, p. 313). In the same resolution the Court ordered Lourdes Jureidini
and Milagros Tsuchiya to strictly and immediately comply with the Court's aforesaid writ of preliminary
injunction; indicated that it would resolve the pending incident for contempt against private respondent
Lourdes Jureidini when the Court decides the case on the merits; and gave the parties thirty (30) days
from notice within which to submit simultaneously their respective memoranda on the merits of the
case.

On May 31, 1982, counsel for private respondent Atty. Canlas filed in compliance with the resolution
of March 10, 1982, his explanation and manifestation why he should not be disciplinarily dealt with and
held in contempt of Court (Rollo, pp. 316-318). In the resolution of June 2, 1982, the Court Resolved to
set aside and lift the Order of Atty. Canlas' arrest and commitment it had issued on March 31, 1982 but
found the explanation and manifestation of Atty. Canlas dated May 29, 1982 unsatisfactory. In view
thereof, he was reprimanded for negligence and undue delay in complying with the Court's resolution.
(Rollo, p. 319).

On June 18, 1982, counsel for petitioners allegedly for purposes of clarification as to the laws involved
in the matter of contempt of Lourdes Jureidini, filed a pleading entitled "Re Incident of Contempt
against Lourdes Jureidini." (Rollo, pp. 320-326) which was noted by the Court in the resolution of July 7,
1982. (Rollo, p. 328).

Counsel for private respondents manifested (Rollo, p. 329), on July 12, 1982 that they are adopting
the memorandum submitted in the preliminary injunction incident as their memorandum in the main
case. Said manifestation was noted in the resolution of July 26, 1982. (Rollo, p. 331). Counsel for
petitioners manifested (Rollo, p. 333) that they are adopting their memorandum in support of argument
last February 3, 1982 as their combined memoranda on the merits of the case. Said manifestation was
noted in the resolution of September 15, 1982. (Rollo, p. 334). In the resolution of November 29, 1982,
this case was transferred to the Second Division. (Rollo, p. 336).

In their petition and supplemental petition, petitioners raised the following issues:

THE RESPONDENT COURT OF FIRST INSTANCE HAS NO JURISDICTION OVER THE PETITION FOR
mandamus AND RECEIVERSHIP "AS WELL AS IN PLACING THE CORPORATE ASSETS UNDER PROVISIONAL
RECEIVERSHIP IN THE GUISE OF A WRIT OF PRELIMINARY MANDATORY INJUNCTION.

II

EVEN FALSELY ASSUMING THAT THE RESPONDENT COURT HAD JURISDICTION, THE PRIVATE
RESPONDENTS' PRINCIPAL ACTION OF mandamus IS AN IMPROPER COURSE OF ACTION.

III

ASSUMING ARGUENDO THAT WHAT THE RESPONDENT COURT FOUND IS TRUE, NAMELY THAT
PRIVATE RESPONDENTS "ARE OUTSIDERS" AND "NOT YET STOCKHOLDERS," THUS, HAVING NO
PERSONALLY AT ALL, THEN PROVISIONAL RECEIVERSHIP, ALBEIT CLOTHED AS A "WRIT OF PRELIMINARY
MANDATORY INJUNCTION" WAS ILLEGALLY ISSUED DE HORS ITS JURISDICTION.

IV

ASSUMING ARGUENDO THAT THE RESPONDENT COURT HAD JURISDICTION OVER BOTH THE PETITION
FOR mandamus AS WELL AS THE PROVISIONAL RECEIVERSHIP STILL THE RESPONDENT COURT ACTED IN
EXCESS OF ITS JURISDICTION OR IN GRAVE ABUSE OF ITS DISCRETION TO GRANT RECEIVERSHIP OVER
THE MANAGEMENT OF THE CORPORATE BUSINESS AND ASSETS WHICH NEVER WAS NOR IS A SUBJECT
MATTER OF LITIGATION.

EVEN GRANTING FOR THE SAKE OF AGRGUMENT THAT THE RESPONDENT COURT HAD JURISDICTION
OVER THE SUBJECT MATTER OF THE CASE; NONETHELESS IT WAS IN GRAVE ABUSE OF ITS DISCRETION
TO UNILATERALLY GRANT TO A "PARTY-IN-LITIGATION," THE PRIVATE RESPONDENTS HEREIN, THE
MANAGEMENT OF THE CORPORATE BUSINESS. (Petition and Supplemental Petition; Rollo, pp. 2-18; 88131).

The crucial issue in this case is whether it is the regular court or the Securities and Exchange
Commission that has jurisdiction over the present controversy.

Presidential Decree No. 902-A provides:

Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange
Commission over corporations, partnerships and other forms of associations registered with it as
expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to hear
and decide cases involving

(a) ...

(b) Controversies arising out of intra-corporate or partnership relations and among stockholders,
members, or associates; between any or all of them and the corporation, partnership or association of
which they are stockholders, members, or associates, respectively and between such corporations,
partnership or association and the State insofar as it concerns their individual franchise or right to exist
as such entity.

It has already been settled that an intracorporate controversy would call for the jurisdiction of the
Securities and Exchange Commission. (Philippine School of Business Administration v. Lanao, 127 SCRA
781, February 24, 1984). On the other hand, an intra-corporate controversy has been defined as "one
which arises between a stockholder and the corporate. There is no distinction, qualification, nor any
exemption whatsoever." (Philex Mining Corporation v. Reyes, 118 SCRA 605, November 19, 1982). This
Court has also ruled that cases of private respondents who are not shareholders of the corporation,
cannot be a "controversy arising out of intracorporate or partnership relations between and among
stockholders, members or associates; between any or all of them and the corporation, partnership or
association, of which they are stockholders, members or associates, respectively." (Sunset View
Condominium Corporation v. Campos, Jr., 104 SCRA 303, April 27, 1981).

Under Batas Pambansa Blg. 68 otherwise known as "The Corporation Code of the Philippines," shares
of stock are transferred as follows:

SEC. 63. Certificate of stock and transfer of shares. The capital stock of stock corporations shall be
divided into shares for which certificates signed by the president or vice-president, countersigned by the
secretary or assistant secretary, and sealed with the seal of the corporation shall be issued in
accordance with the by-laws. Shares of stock so issued are personal property and may be transferred by
delivery of the certificate or certificates indorsed by the owner or his attorney-in- fact or other person

legally authorized to make the transfer. No transfer, however, shall be valid, except as between the
parties, until the transfer is recorded in the book of the corporation showing the names of the parties to
the transaction, the date of the transfer, the number of the certificate or certificates and the number of
shares transferred.

xxx xxx xxx

As confirmed by this Court, "shares of stock may be transferred by delivery to the transferee of the
certificate properly indorsed. 'Title may be vested in the transferee by delivery of the certificate with a
written assignment or indorsement thereof ' (18 C.J. S. 928). There should be compliance with the mode
of transfer prescribed by law (18 C.J.S. 930)' " (Nava v. Peers Marketing Corp. 74 SCRA 65, 69, Nov. 25,
1976)

As the bone of contention in this case, is the refusal of petitioner Rivera to indorse the shares of stock
in question and the refusal of the Corporation to register private respondents' shares in its books, there
is merit in the findings of the lower court that the present controversy is not an intracorporate
controversy; private respondents are not yet stockholders; they are only seeking to be registered as
stockholders because of an alleged sale of shares of stock to them. Therefore, as the petition is filed by
outsiders not yet members of the corporation, jurisdiction properly belongs to the regular courts.

II

On the other hand, there is merit in petitioners' contention that private respondents' principal action
of mandamus is an improper course of action.

It is evident that mandamus wig not lie in the instant case where the shares of stock in question are
not even indorsed by the registered owner Rivera who is specifically resisting the registration thereof in
the books of the corporation. Under the above ruling, even the shares of stock which were purchased by
private respondents from the other incorporators cannot also be the subject of mandamus on the
strength of mere indorsement of the supposed owners of said shares in the absence of express
instructions from them. The rights of the parties will have to be threshed out in an ordinary action.

III-V

Petitioners insist that what was issued was a provisional receivership, while private respondents
maintain that the trial court issued a Writ of Preliminary Mandatory Injunction. Be that as it may, it
appears obvious that from the abovementioned rulings of this Court, petitioners' contention that
respondent Judge in the issuance thereof committed acts of grave abuse of discretion, is well taken.

In the Order dated June 5, 1981, in Civil Case No. 132673, the basis of aforesaid Writ was as follows:

Finally, the Court, after assessing the evidence, finds that the issuance of a preliminary mandatory
injunction is proper. Respondents Isamu Akasako and Aquilino Rivera, thru their simulated relationship,
have succeeded for two years since 1979 to deprive the petitioners to participate in the profit and
management of the corporation of which they are the majority stockholders considering that the stocks
certificates appearing in the name of Aquilino Rivera (Exh. "8") is 55% to 75% of the total stocks of the
corporation by Isamu Akasako would only prolong the injustice committed against the petitioners and
the damages they would suffer would be irreparable. The Court is aware that preliminary mandatory
injunction is the exception rather than the rule, but according to the Code Commission, in its report on
page 98, "the writ of preliminary mandatory injunction is called for by the fact that there are at present
prolonged litigation between owner and usurper and the former is deprived of his possession even
when he has an immediate right thereto." In the instant case, the right of the petitioners is clear and
unmistakable on the law and the facts and there exists an urgent and paramount necessity for the
issuing of the writ in order to prevent extreme or rather serious damage which ensues from withholding
it. (43 C.J.S. 413)

WHEREFORE, in view of the foregoing circumstances, let a writ of preliminary mandatory injunction
issue requiring respondents to allow petitioners to manage the corporate property known as the
Fujiyama Hotel & Restauarant, Inc. upon petitioners' filing of a bond in the amount of P30,000.00.

A mandatory injunction is granted only on a showing (a) that the invasion of the right is material and
substantial; (b) the right of complainant is clear and unmistakable; and (c) there is an urgent and
permanent necessity for the writ to prevent serious damage. (Pelejo v. Court of Appeals, 117 SCRA 668,
Oct. 18, 1982).

A mandatory injunction which commands the performance of some specific act is regarded as of a
more serious nature than a mere prohibitive injunction, the latter being intended generally to maintain

the status quo only. While our courts, being both of law and equity, have jurisdiction to issue a
mandatory writ, it has always been held that its issuance would be justified only in clear cases; that it is
generally improper to issue it before final hearing because it tends to do more than maintain the status
quo; that it should be issued only where there is a willful and unlawful invasion of plaintiff's right and
that the latter's case is one free from doubt and dispute. (National Marketing v. Cloribel, 22 SCRA 1038,
March 13, 1968).

Respondent court in the instant case violated the fundamental rule of injunctions that a mandatory
injunction will not issue in favor of a party whose rights are not clear and free of doubt or as yet
undetermined. (Namarco v. Cloribel, 22 SCRA 1038-1039, March 13, 1968). It will be recalled that the
disputed shares of stock were purchased not from the registered owner but from a Japanese national
who allegedly was the real owner thereof. It was also alleged that the registered owner was only a
dummy of Akasako. it is also true that the trial court has already made findings to that effect at the
hearing for the issuance of the Order of June 5, 1981. Nonetheless, these are contentious issues that
should properly be ventilated at the trial on the merits. As correctly stated in petitioners' motion for
reconsideration, the Order of the trial court is in effect a judgment on the merits, declaring expressly or
impliedly that petitioners are stockholders of the Corporation at the hearing of only the incident for the
issuance of a Writ of Preliminary Injunction. On the other hand if the Order amounts to a judgment on
the merits, the lower court should first rule on what private respondents seek, the registration of their
shareholdings in the books of the corporation and the issuance of new stock certificates. It is only
thereafter that the subsequent act of management may be ordered and the period of finality of such a
judgment should be in accordance with the Rules of Court, giving the respondents the right to an appeal
or review and not be immediately executory as the Writ of Preliminary Mandatory Injunction would
infer. (Rollo, p. 65).

Another fundamental rule which appears to have been violated in the case at bar is that no advantage
may be given to one to the prejudice of the other, a court should not by means of a preliminary
injunction transfer the property in litigation from the possession of one party to another where the legal
title is in dispute and the party having possession asserts ownership thereto. (Rodulfo v. Alonso, 76 Phil.
225), February 28, 1946). Similarly, the primary purpose of an injunction is to preserve the status quo,
that is the last actual peaceable uncontested status which preceded the controversy. In the instant case,
petitioner Rivera is the registered majority and controlling stockholder of the corporation before the
ensuing events transpired. By the issuance of the Writ in question he appears to have been deprived of
his rights as stockholder thereof apart from his status as Chairman of the Board and President of the
corporation, with Akasako as the Manager of the two restaurants in this case; the same being the last
uncontested status which preceded the controversy. (Rollo, p. 127).

On the contempt incident involving private respondent Lourdes Jureidini, a Manifestation and Urgent
Motion was filed by petitioners to declare her in contempt of Court for allegedly refusing to
acknowledge receipt of the Writ of Preliminary Injunction issued by this Court and for allegedly refusing
to comply therewith. Attributed to her were the following statements: "I will not obey that ... Yes, I am
higher than the Supreme Court ... I will obey only what my lawyer tells me."

In her explanation however, filed through her counsel she denied having uttered the statements
alluded to her, the truth of the matter being that she was alone in the restaurant when this Court's
process server, accompanied by petitioners' lawyers, approached her and demanded that she vacate the
premises and surrender the management of the Restaurant. Fazed by the unusual display of lawyers she
requested that she be given time to confer with her counsel Said request allegedly precipitated the
remark from Petitioners' counsel that neither respondent herself, nor her counsel can be higher than
the Supreme Court and that any conference seeking to clarify the effect of the Writ of Preliminary
Injunction would be futile. (Rollo, pp. 174-175).

It was likewise explained that respondent Jureidini did not sign and acknowledge receipt of the Writ
because it was not addressed to her but to the lower court and to her counsel.

Respondent's counsel says that the incident was concocted and devised by the petitioners and their
counsel to serve no salutary purpose but to scare and harass respondent Jureidini. He also stated that "it
is equally improper, at least in practice, for lawyers to accompany officers of the Court in serving or
otherwise executing processes of said court as to create a seeming suspicion to the public that lawyers
are not involved only professionally in the case they handle but signify their personal interests as well."
(Rollo, pp. 208-209).

When this contempt incident was heard on March 3, 1982, Atty. Arthur A. Canlas, counsel for private
respondent Lourdes Jureidini, Jureidini herself, Atty. Bibiano P. Lesaca a representative of the
petitioners were interpellated by the Court. Thereafter, the incident was declared submitted for
resolution. (Resolution of March 3, 1982; Rollo, p. 316).

Thereafter, counsel for petitioner filed a pleading "The Incident of Contempt of Lourdes Jureidini" in
the form of a summation of the incident and reiteration of petitioners' charges of contempt.

Counsel for petitioner invokes the provisions of: Section 3, Rule 71 on Indirect Contempt and par. (b)
thereof, on Disobedience of or Resistance to a Lawful Writ, Process, Order, Judgement or Command of a
Court; or Injunction granted by a Court or Judge ... ; (2) Section 6, Rule 71 regarding punishment or
penalty thereof and (3) Section 5, Rule 135, par. (e) to compel obedience to its judgments, orders and
processes, and to the lawful orders of a judge out of Court, in a case pending therein.

On the incident itself, petitioners' counsel stressed that present when the writ was served were
attorneys for petitioners Bibiano P. Lesaca, and Renato P. Paguio in the company of petitioners Isamu
Akasako, Akasako's assistants Furnio, Fujihara and Isamu Tajewakai and this Court's process server,
before whose presence the alleged contemptuous acts were committed.

Counsel for petitioners also reminded the Court that the first summons of the Court were answered
only by counsel for private respondent Jureidini while the latter feigned sickness without a medical
certificate. The hearing for the contempt charge was reset but neither counsel for private respondent
nor the latter appeared for which non-appearance Atty. Canlas was fined P200.00 for contempt when
finally both counsel and client appeared on the third day, the hearing was set.

At that hearing, counsel for petitioners narrated that Attys. Lesaca and Paguio and two Japanese
nationals testified in unison that Lourdes Jureidini not only disregarded the writ but distinctly uttered
the complained of statements.

Petitioners' counsel laid emphasis on the fact that Lourdes Jureidini is a graduate of nursing, who
speaks in straight polished English, capable of understanding the Writ of Mandatory Injunction of the
Respondent Court served on petitioners by herself and a Deputy Sheriff of Manila, but incredibly unable
to understand the Writ issued by the Supreme Court. She was assessed as "overbearing to the point of
insolence" and capable of uttering "I am higher than the Supreme Court."

There is no question that disobedience or resistance to a lawful writ, process, order, judgment or
command of a court, or injunction granted by a court or judge, more particularly in this case, the
Supreme Court, constitutes Indirect Contempt punishable under Rule 71 of the Rules of Court. (Rule 71,
Section 3(b) and Section 6).

It has been held that contempt of court is a defiance of the authority, justice or dignity of the court,
such conduct as tends to bring the authority and administration of the law into disrespect or to interfere

with or prejudice parties litigant or their witnesses during litigation. It is defined as a disobedience to the
court by setting up an opposition to its authority justice and dignity. It signifies not only a willful
disregard or disobedience of the court's orders but such conduct as tends to bring the authority of the
court and the administration of law into disrepute or in some manner to impede the due administration
of justice (Halili v. Court of Industrial Relations, 136 SCRA 135, April 30, 1985).

However, it is also well settled that "the power to punish for contempt of court should be exercised
on the preservative and not on the vindictive principle. Only occasionally should the court invoke its
inherent power in order to retain that respect without which the administration of justice must falter or
fail." (Villavicencio v. Lukban, 39 Phil. 778 [1919]; Gamboa v. Teodoro, et al., 91 Phil. 274 [1952]; Sulit v.
Tiangco, 115 SCRA 207 [1982]; Lipata v. Tutaan, 124 SCRA 880 [1983]). "Only in cases of clear and
contumacious refusal to obey should the power be exercised. A bona fide misunderstanding of the
terms of the order or of the procedural rules should not immediately cause the institution of contempt
proceedings." "Such power 'being drastic and extra-ordinary in its nature ... should not be resorted to ...
unless necessary in the interest of justice.' " (Gamboa v. Teodoro, et al., supra).

In the case at bar, although private respondent Jureidini did not immediately comply with the Writ of
Injunction issued by this Court, it appears reasonable on her part to request that she be allowed to
confer with her lawyer first before she makes any move of her own. It is likewise reasonable for counsel
for private respondent to request that he be given time to file a motion for clarification with the
Supreme Court.

It will also be noted that the testimonies produced at the hearing to establish the fact that she had
uttered the alleged contemptuous statements alluded to her were those of Attys. Lesaca and Paguio and
two Japanese nationals, a one-sided version for the petitioners.

It appears to Us that the version of counsel for private respondent is more in accord with human
experience: Jureidini who was alone in the Restaurant was fazed by the unusual display of might and by
the presence of lawyers demanding that she vacate premises and surrender the management of the
Restaurant (Rollo, p. 204), this is more believable than the version of counsel for petitioners who
summed her up as a person "overbearing to the point of insolence" and capable of uttering" I am higher
than the Supreme Court." It would therefore be more reasonable to believe that what she uttered in
that situation where she felt threatened, was more in self-defense and not an open defiance of the
Supreme Court.

Jureidini cannot also be faulted for finding it difficult to understand the writ issued against her by the
Supreme Court as she believed that not only have she and her correspondent the legal right to manage
the restaurant but the equitable right as well, having been placed in possession of the corporate
property only after posting a bond of P120,000.00. (Rollo, pp. 197-198).

In connection with this incident, Jureidini through her counsel filed her comment on October 2, 1981
(Rollo, p. 201) contrary to the allegation of petitioners' counsel that it was only Atty. Canlas who filed his
comment.

WHEREFORE, the assailed orders of respondent Judge are SET ASIDE; the complaint (special civil
action for mandamus with damages, etc.) should ordinarily be dismissed without prejudice to the filing
of the proper action; but as all parties are already duly represented, We hereby consider the case as an
ordinary civil action for specific performance, and the case is therefore remanded to the lower court for
trial on the merits; the charge of contempt against respondent Jureidini is DISMISSED but the order of
Our Court restraining respondent from taking over the management of the restaurant remains until
after this case is decided.

SO ORDERED.

Feria (Chairman), Fernan, Alampay and Gutierrez, Jr., JJ., concur.

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