G.R. No.

109020 March 3, 1994

FELISA CHAN
vs.
HON. COURT OF APPEALS, and GRACE CU,

Facts:

On February 1, 1983, Felisa Chan and Grace Cu entered into a contract of lease whereby the
latter will occupy for residential purposes Room 401 and the roof top of Room 442 of a building
owned by the former located at Elcano corner Urbistondo, Manila. The term of the lease is one year.
Said contract of lease was renewed every year for two successive years or up to February 1, 1986.
After February 1, 1986, there was no written contract of lease executed by the parties, but Grace has
continuously occupied the premises as a learning center. Sometime in November, 1989, Felisa
padlock the way to the roof top. Grace insisted that she should be allowed to use the roof top of Room
442, while Felisa maintained that only Room 401 was leased and that the use of the roof was merely
tolerated. Eventually, Felisa terminated the lease, giving Grace until January 1, 1990 to vacate the
premises.
Because of the dispute between the parties, Felisa did not collect the rental for December and
refused to accept the check from Grace. So Grace's lawyer tendered the payment in cash in the same
amount of P3,310.56, with notice to Felisa that if she will not accept the payment, the same will be
deposited in court by way of consignation. At this juncture, Felisa allowed Grace to hold classes only
up the March, 1990.
On January 15, 1990, Grace filed Civil Case No. 131203 for consignation with the Metropolitan
Trial Court of Manila, Branch 15, alleging in her complaint that Felisa refused to accept, without
justifiable cause, the rentals for the premises in question. Felisa interposed in her answer a
counterclaim for ejectment, contending that the lease, being month to month, had expired but that
despite demand, Grace refused to vacate the premises.
On 18 December 1990, the MTC rendered its decision favouring Grace, it declared that the
rooftop is included in the lease and it extended the term of lease. Both parties appealed to the RTC of
Manila. Grace Cu maintained that the MTC should have fixed a longer period, while Felisa Chan
contended that the MTC erred in extending the term of the lease. The RTC affirmed the decision of
the MTC.
Grace then went to the Court of Appeals on a petition for review. The Court of Appeals
reversed and set aside the decisions of the MTC and the RTC. It likewise said that the MTC and the
RTC erred in passing upon the issue of ejectment raised in Felisa's counterclaim since an action for
ejectment can only be initiated through a verified complaint, not a counterclaim. The Court of Appeals
also held that Felisa's refusal to accept the rental was justified. As for the action for ejectment, CA
ruled that ejectment can only be initiated through a verified complaint, not counterclaim. Thus, the
said courts should not have fixed the terms of the lease.
Felisa maintains that the Court of Appeals should not have dismissed the counterclaim
because such dismissal would deny her justice and give undue advantage to Grace.
Hence, this petition.
Issue: Whether the Court of Appeals erred in ruling that Felisa Chan's cause of action for ejectment
should not be set up in a counterclaim.
Ruling:
Yes. A counterclaim is any claim for money or other relief which a defending party may have against
an opposing party. It need not diminish or defeat the recovery sought by the opposing party, but may
claim relief exceeding in amount or different in kind from that sought by the opposing party's
claim. ]Counterclaims are designed to enable the disposition of a whole controversy of interested
parties' conflicting claims, at one time and in one action, provided all the parties can be brought
before the court and the matter decided without prejudicing the rights of any party. A counterclaim
"is in itself a distinct and independent cause of action, so that when properly stated as such, the
defendant becomes, in respect to the matter stated by him, an actor, and there are two simultaneous
actions pending between the same parties, wherein each is at the same time both a plaintiff and a
defendant . . . A counterclaim stands on the same footing and is to be tested by the same rules, as if it
were an independent action." In short, the defendant is a plaintiff with respect to his counterclaim.
Chan's counterclaim for ejectment is a compulsary counterclaim because it is necessarily connected
with the transaction or occurrence which is the subject matter of Cu's complaint, viz., the lease
contract between them. Consequently, the Court of Appeals erred when it held that Chan's cause of
action for ejectment should not be set up in a counterclaim.
The Court of Appeals therefore should have confined itself to the principal error raised in Cu's
petition in CA-G.R. SP No. 28870, viz., the duration of the extended term of the lease fixed in the
decision of the MTC and affirmed by the RTC. As fixed, the term of the lease was extended to 30 June
1992. That period had expired six months before the Court of Appeals promulgated its challenged
decision. Considering that Chan did not file any petition for the review of the RTC decision and was,
therefore, deemed to have agreed to the extension; and considering further that Cu, as petitioner in
CA-G.R. SP No. 28870 , did not come to us on a petition for review to seek reversal of the decision
therein and should thus be considered to have agreed to the dismissal of her consignation case, the
parties must be deemed bound by the extended term, which has, nevertheless, already lapsed.
We hold that the MTC had the authority to extend the period of the lease. Article 1687 grants the
court the authority to fix the term of the lease depending on how the rentals are paid and on the
length of the lessee's occupancy of the leased premises. In the light of the special circumstances of
this case, we find the extended term fixed by the MTC to be reasonable.
WHEREFORE, the instant petition is GRANTED and the challenged Decision of 20 January 1993 of the
Court of Appeals in CA-G.R. SP No. 28870 is hereby SET ASIDE, and the Decisions of 27 March 1992
of Branch 11 of the Regional Trial Court of Manila in Civil Case No. 91-55879, and of 18 December
1990 of Branch 15 of the Metropolitan Trial Court of Manila in Civil Case No. 131203- CV are
REINSTATED.
Costs against the private respondent.
SO ORDERED.
 G.R. No. L-7076. April 28, 1955

ERIBERTO P. ROSARIO and PAZ UNTALAN DE ROSARIO

vs.
FILOMENO CARANDANG, ET AL.,

Facts:

On October 16, 1952, plaintiffs Eriberto P. Rosario and Paz Untalan de Rosario filed a
complaint against defendants Filomeno Carangdang, Et Al., specifically alleging therein that
plaintiffs-appellants are the owners and possessors of a parcel of land (lot No. 2, plan Psu-123111)
in Labrador, Pangasinan; that they have applied for the registration thereof in Registration Case No.
658, G.L.R.O. No. 2610, wherein defendants filed an opposition; that on or about October 3, 1952,
defendants illegally entered into the premises, destroyed the nipa plants thereon, and made dikes to
convert the place into a fishpond; that in spite of warnings and notices from plaintiffs-appellants,
defendants continued to possess and occupy the premises; and that as a result of defendants’ entry
into and possession of the land in question, plaintiffs have suffered damages in the amount of P2,000.

On November 3, 1952, defendants moved for the dismissal of the complaint, claiming (1) that
the Court had no jurisdiction of the case because it is one of forcible entry and detainer exclusively
cognizable by the Justice of the Peace Court, and furthermore, because the demand for damages does
not exceed P2,000; and (2) that there is another action pending between the same parties and for the
same cause in which the title and ownership of the parcel in question is involved and contested.
The lower Court found the motion to dismiss meritorious, and on November 7, 1952 ordered
the dismissal of the complaint. Plaintiffs moved for the reconsideration of the order of dismissal, and
prayed as well for the admission of an amended complaint, wherein they make specific allegation for
the first time that the defendants are claiming ownership of the land in question. Defendants opposed
the motion for reconsideration and the admission of an amended complaint, upon the ground that
the amended complaint would convert plaintiffs’ action from one of forcible entry and detainer to
one of recovery of ownership and possession. Again, defendants’ position was sustained by the Court
below; and later, it denied a motion for the reconsideration of the order of dismissal.
Hence, this appeal by the plaintiffs to this Court.
Issue: Whether the lower Court erred in denying their motion for reconsideration and in refusing
to admit their amended complaint.

Ruling:
No. We find this assignment of error to be without merit. While it is true that under the liberal
provisions of our Rules of Court, amendments to pleadings are favored and liberally allowed in the
furtherance of justice, it is obvious that when it appears from the very face of the complaint that the
Court has no jurisdiction over the subject-matter of the case, an amendment of the complaint can not
be allowed so as to confer jurisdiction upon the Court.
Appellants’ original complaint, as we have already determined, is one for forcible entry and detainer,
over which the Court below has no jurisdiction. Not having acquired jurisdiction over the case by the
filing of the original complaint, the lower court has neither the power nor the jurisdiction to act on
the motion for the admission of the amended complaint, much less to allow such amendment, since
it is elementary that the court must first acquire jurisdiction over the case in order to act validly
therein. Wherefore, the Court below did not err in refusing to admit plaintiffs-appellants’ amended
complaint.

The case might be different had the amendment been made before an answer or a motion to dismiss
had been filed, since the original complaint was then amendable, and the amendment could
supersede the original pleading, as of right, without leave of court being required, and without the
Court taking cognizance at all of the original complaint.

In view of the foregoing, the orders appealed from are affirmed, without prejudice to appellants’ filing
another case for reivindicacion. Costs against appellants.
 G.R. No. 182673 October 5, 2009
AQUALAB PHILIPPINES, INC.,
vs.
HEIRS OF MARCELINO PAGOBO
Facts:
Lot 6727 was once covered by Juan Pagobo’s homestead application. Upon his death on
January 18, 1947, his homestead application continued to be processed culminating in the issuance
on December 18, 1969 of Homestead Patent No. 128470 for Lot 6727. On the basis of this homestead
patent, OCT RO-2246 was issued in the name of Juan Pagobo. Apparently, from the description of the
subdivision lots of Lot 6727, particularly those of subject Lots 6727-Q and 6727-Y above, the mother
Lot 6727 was surveyed in 1963 and 1967 and eventually subdivided into 34 subdivision lots
denominated as Lots 6727-A to 6727-HH.
Incidentally, on the same date that OCT RO-2246 was issued covering Lot 6727, OCT RO-
1277 was likewise issued also covering Lot 6727 in the name of the late Juan Pagobo also pursuant
to Homestead Patent No. 128470. Subsequently, however, on August 10, 1977, OCT RO-1277 was
cancelled for being null and void pursuant to an Order issued on August 4, 1977 by the Court of First
Instance in Lapu-lapu City in view of the issuance of OCT RO-2246.
Shortly after OCT RO-1277 and OCT RO-2246 were issued, subject Lots 6727-Q and 6727-Y
were subsequently sold to Tarcela de Espina who then secured Transfer Certificate of Title No. (TCT)
3294 therefor on April 21, 1970. The purchase by Tarcela de Espina of subject Lot 6727-Y from the
heirs of Juan Pagobo and subject Lot 6727-Q from one Antonio Alcantara was duly annotated on the
Memorandum of Incumbrances of both OCT RO-1277 and OCT RO-2246.
Subsequently, Tarcela de Espina sold subject lots to Rene Espina who was issued, on
September 28, 1987, TCT 17830 for Lot 6727-Q and TCT 17831 for Lot 6727-Y. Thereafter, Rene
Espina sold subject lots to Anthony Gaw Kache, who in turn was issued TCT 17918 and TCT 18177,
respectively, on November 9, 1987.Finally, Aqualab acquired subject lots from Anthony Gaw Kache
and was issued TCT 18442 and TCT 18443, respectively, on May 4, 1988.
On August 10, 1994, respondents, alleging that Aqualab has disturbed their peaceful
occupation of subject lots in 1991, filed a Complaint for Partition, Declaration of Nullity of Documents,
Cancellation of Transfer Certificate of Titles, Reconveyance with Right of Legal Redemption, Damages
and Attorneys Fees against Aqualab, the Register of Deeds of Lapu-Lapu City, Cebu.
On September 12, 1994, Aqualab filed its Motion to Dismiss on the grounds of: (1)
prescription of the action for declaration of nullity of documents, cancellation of transfer certificates
of title, and reconveyance; and (2) no cause of action for partition and legal redemption of the mother
title of subject lots, i.e., OCT RO-2246 had already been subdivided and several conveyances made of
the subdivided lots.
RTC granted Aqualab’s motion and dismissed respondent’s complaint.
 The Court of Appeals reversed the Order of dismissal by the RTC and declared the sale of
subject lots as null and void, and remanded the case to the trial court for partition proceedings. The
Court of Appeals denied Aqualab’s motion for reconsideration.
Hence, we have this petition.

Issues: (1) Whether or not the complaint should be dismissed on the ground of lack of cause of action
(2) Whether or not the respondent’s cause of action has prescribed warranting the dismissal
of their complaint on the ground of prescription
Ruling:
(1) No. To sustain a motion to dismiss for lack of cause of action, the complaint must show that the
claim for relief does not exist rather than that a claim has been defectively stated or is ambiguous,
indefinite, or uncertain. However, a perusal of respondents Complaint before the RTC, in light of
Aqualabs motion to dismiss which hypothetically admitted the truth of the allegations in the
complaint, shows that respondents action before the RTC has sufficiently stated a cause of
action. Hypothetically admitting fraud in the transfers of subject lots, which indisputably were first
transferred in apparent violation of pertinent provisions in CA 141 prohibiting alienation of
homesteads within five years from the grant of the homestead patent, and the continuing possession
of respondents until 1991 of the subject lots, the action for reconveyance and nullification filed in
1994 not only sufficiently stated a cause of action but also has not yet prescribed.
Given the findings above, the trial court gravely committed an error of judgment in granting
Aqualab’s motion to dismiss.

(2.) No. From the foregoing premises, the trial court erred in finding prescription. Prescription, as a
ground for a motion to dismiss, is adequate when the complaint, on its face, shows that the action has
already prescribed. Such is not the case in this instance. Respondents have duly averred continuous
possession until 1991 when such was allegedly disturbed by Aqualab. Being in possession of the
subject lots hypothetically admitted by Aqualab respondents right to reconveyance or annulment of
title has not prescribed or is not time-barred.
Verily, an action for annulment of title or reconveyance based on fraud is imprescriptible where the
plaintiff is in possession of the property subject of the acts. And the prescriptive period for the
reconveyance of fraudulently registered real property is 10 years, reckoned from the date of the
issuance of the certificate of title, if the plaintiff is not in possession. Thus, one who is in actual
possession of a piece of land on a claim of ownership thereof may wait until his possession is
disturbed or his title is attacked before taking steps to vindicate his right.
In the instant case, as hypothetically admitted, respondents were in possession until 1991, and until
such possession is disturbed, the prescriptive period does not run. Since respondents filed their
complaint in 1994, or three years after their possession was allegedly disturbed, it is clear that
prescription has not set in, either due to fraud or constructive trust.