Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=83902:58639&catid=1589&Itemid=566
Timestamp: 2019-04-24 16:45:39+00:00

Document:
PENTA PACIFIC REALTY CORPORATION, Petitioner, v. LEY CONSTRUCTION AND DEVELOPMENT CORPORATION, Respondents.
Jurisdiction over the subject matter of an action is determined from the allegations of the initiatory pleading.
The petitioner owned the 25th floor of the Pacific Star Building located in Makati City with an area of 1,068.67 square meters. The respondent leased 444.03 square meters of the premises (subject property) through the petitioner’s authorized agent, Century Properties Management, Inc. (Century Properties). Under the terms of the contract of lease dated January 31, 1997, the petitioner gave the respondent possession of the subject property under a stipulation to the effect that in case of the respondent’s default in its monthly rentals, the petitioner could immediately repossess the subject property.
After paying US$538,735.00, the respondent stopped paying the stipulated monthly amortizations. An exchange of letters ensued between Janet C. Ley, President of the respondent, or Efren Yap, Assistant to the President of the respondent, on one hand, and Jose B.E. Antonio, Vice-Chairman of the petitioner, and the petitioner’s counsel, Atty. Reynaldo Dizon, on the other.
In the September 23, 1997 letter,5 the respondent asked the petitioner to modify the terms of the reservation agreement to allow it to purchase only the subject property. In the February 5, 1998 letter,6 the petitioner’s counsel reminded the respondent of its US$961,546.50 liability to the petitioner under the terms of the reservation agreement. In another letter dated February 5, 1998,7 the petitioner’s counsel informed the respondent of its failure to pay its amortizations since August 1997, and demanded the payment of US$961,564.50.
Through its letter of February 17, 1998,8 the respondent submitted the following proposals, namely: (1) that the US$538,735.00 paid under the reservation agreement be applied as rental payments for the use and occupation of the subject property in the period from March 1997 to February 28, 1998; (2) that the balance of US$417,355.45 after deducting the rental payments from March 1997 to February 28, 1998 should be returned to it; and (3) that the respondent be allowed to lease the subject property beginning March 1998.
The petitioner, through its counsel’s letter of March 9, 1998,9 rejected the respondent’s proposals, and demanded the payment of US$3,310,568.00, representing the respondent’s unpaid balance (as of March 2, 1998) under the reservation agreement. The petitioner further evinced its intention to cancel the contract to sell, and to charge the respondent for the rentals of the subject property corresponding to the period from August 1997 to March 1998, during which no amortization payments were made.
In the letter dated February 4, 1999,10 the petitioner’s counsel informed the respondent of the cancellation of the reservation agreement and the forfeiture of the respondent’s payments; and demanded that respondent pay the rentals of P9,782,226.50 and vacate the subject property.
We write in behalf of our client, Penta Pacific Realty Corporation, regarding the Reservation Agreement and/or sale between you and our client over the latter’s unit located at the 25th Floor, Pacific Star Building, Sen. Gil Puyat Avenue corner Makati Avenue, Makati City.
We regret to inform you that in view of your continued refusal and/or failure to pay to our client the balance of the agreed-upon purchase price of the office unit you are currently occupying, our client is constrained to make a notarial cancellation of the Reservation Agreement and/or sale of the above-mentioned unit and to forfeit the payments you made in favor of our client.
In this connection, there is no more valid reason for you to continue occupying the subject premises. Hence, final and formal demand is hereby made upon you to peacefully and quietly vacate the same within ten (10) days from receipt hereof. Otherwise, we shall be constrained to file the appropriate legal action to protect our client’s interests.
Lastly, we would like to inform you that our client will also be constrained to charge you the amount of P9,782,226.50 corresponding to reasonable rentals and other charges as of January 22, 1999.
Trusting that you are guided accordingly.
On July 9, 1999, the petitioner filed the complaint for ejectment in the MeTC following the respondent’s failure to comply with the demands to pay and vacate.
The respondent appealed to the RTC.
In the meantime, on November 6, 2001, the respondent turned over the possession of the leased premises to the petitioner.
On June 10, 2002, the RTC rendered its judgment nullifying the MeTC’s decision on the ground of lack of jurisdiction, holding that the appropriate action was either accion publiciana or accion reivindicatoria over which the MeTC had no jurisdiction. It found that the basis of recovery of possession by the petitioner was the respondent’s failure to pay the amortizations arising from the violations of the reservation agreement; that the complaint did not specifically aver facts constitutive of unlawful detainer, i.e., it did not show how entry had been effected and how the dispossession had started; and that the requirement of formal demand had not been complied with by the petitioner.
Not in agreement with the decision of the CA, the petitioner filed the present petition.
The decisive question is whether the complaint was for unlawful detainer, or accion publiciana, or accion reivindicatoria.
The petitioner submits that the MeTC had jurisdiction because its complaint made out a clear case of unlawful detainer, emphasizing that the basis of the complaint was the failure of the respondent to pay the stipulated monthly rentals under the revived contract of lease; that even if the cause of action was upon the nonpayment of the purchase price under the reservation agreement, the MeTC still had jurisdiction over the action because an unlawful detainer case could also arise from a vendor-vendee relationship; and that, accordingly, the nonpayment of rentals or of the purchase price sufficiently established its better right to possess the subject property.
In contrast, the respondent maintains that it had not violated any existing contract of lease with the petitioner because the contract of lease dated January 31, 1997 was based on the agreement between the respondent and Century Properties; that it had entered into the possession of the subject property as the buyer-owner pursuant to the reservation agreement; and that the recovery of possession should have been by accion publiciana or accion reivindicatoria, not unlawful detainer.
There are three kinds of real actions affecting title to or possession of real property, or interest therein, namely: accion de reivindicacion, accion publiciana and accion interdictal. The first seeks the recovery of ownership as well as possession of realty.18 The second proposes to recover the right to possess and is a plenary action in an ordinary civil proceeding.19 The third refers to the recovery of physical or actual possession only (through a special civil action either for forcible entry or unlawful detainer).
If the dispossession is not alleged to take place by any of the means provided by Section 1,20 Rule 70, Rules of Court, or, if the dispossession allegedly took place by any of such means but the action is not brought within one year from deprivation of possession, the action is properly a plenary action of accion publiciana or accion de reivindicacion. The explanation is simply that the disturbance of the peace and quiet of the local community due to the dispossession did not materialize; hence, the possessor thus deprived has no need for the summary proceeding of accion interdictal under Rule 70.
Is this present action one for unlawful detainer?
A suit for unlawful detainer is premised on Section 1, Rule 70, 1997 Rules of Civil Procedure, of which there are two kinds, namely: (1) that filed against a tenant, and (2) that brought against a vendee or vendor, or other person unlawfully withholding possession of any land or building after the expiration or termination of the right to hold possession by virtue of any contract, express or implied.
Section 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.
3. On January 31, 1997, the defendant and the plaintiff’s authorized agent, Century Properties Management Inc. (CPMI), a corporation duly organized and existing under and by virtue of the laws of the x x x Philippines x x x entered into a Contract of Lease whereby the latter leased from the former a portion of the 25th Floor of the PSB (hereinafter referred to as the PROPERTY). x x x.
4. On March 19, 1997, the defendant decided to purchase from the plaintiff the 25th Floor of the PSB by virtue of a Reservation Agreement of the same date. x x x.
5. However, on August 1997, the defendant started to default in its amortization payments on the above-mentioned purchase. x x x.
8. Sometime in March 1999, the defendant requested from the plaintiff and CPMI that the Reservation Agreement be cancelled and in lieu thereof, the above-mentioned Contract of Lease be revived. The plaintiff and CPMI acceded to such request x x x.
9. However, contrary to the express provisions of the Contract of Lease, the defendant failed to pay to the plaintiff the rentals for the use of the PROPERTY when they fell due.
10. x x x the plaintiff also formally made a notarial cancellation of the aforementioned purchase and demanded that defendant peacefully vacate the PROPERTY. x x x.
After the demand went unheeded, the petitioner initiated this suit in the MeTC on July 9, 1999, well within the one-year period from the date of the last demand.
The aforequoted allegations of the complaint made out a case of unlawful detainer, vesting the MeTC with exclusive original jurisdiction over the complaint. As alleged therein, the cause of action of the petitioner was to recover possession of the subject property from the respondent upon the latter’s failure to comply with the former’s demand to vacate the subject property after the latter’s right to remain thereon terminated by virtue of the demand to vacate. Indeed, the possession of the latter, although lawful at its commencement, became unlawful upon its non-compliance with the former’s demand to vacate.
WHEREFORE, we REVERSE and SET ASIDE the decision promulgated on October 9, 2003 by the Court of Appeals affirming the decision rendered on June 10, 2002 by the Regional Trial Court of Makati City, Branch 58; REINSTATE the decision rendered on January 12, 2000 by the Metropolitan Trial Court, Branch 64, of Makati City; and ORDER the respondent to pay the costs of suit.
Sereno, (Chief Justice), Leonardo-De Castro, Villarama, Jr.,* and Perez, JJ., concur.
* Vice Associate Justice Estela M. Perlas-Bernabe per Special Order No. 1885 dated November 24, 2014.
1Rollo, pp. 28-34; penned by Associate Justice B.A. Adefuin-de la Cruz (retired), and concurred in by Associate Justice Eliezer R. de los Santos (retired/deceased) and Associate Justice Jose C. Mendoza (now a Member of this Court).
2 Id. at 54 – 67; penned by Judge Winlove M. Dumayas.
3 Id. at 80-87; penned by Judge Cesar D. Santamaria.
18Bishop of Cebu v. Mangaron, 6 Phil. 286, 290-291 (1906).
19Lagumen v. Abasolo, 94 Phil. 455, 456 (1954).
21An Act Expanding The Jurisdiction Of The Metropolitan Trial Courts, Municipal Trial Courts, And Municipal Circuit Trial Courts, Amending For The Purpose Batas Pambansa Blg. 129, Otherwise Known As The "Judiciary Reorganization Act Of 1980"
22Quinagoran v. Court of Appeals, G.R. No. 155179, August 24, 2007, 531 SCRA 104, 115.
23Banayos v. Susana Realty, Inc., No. L-30336, June 30, 1976, 71 SCRA 557, 561; Pasagui v. Villablanca, No. L-21998, November 10, 1975, 68 SCRA 18, 20; Arcaya v. Teleron, 57 SCRA 363.
25Mariategui v. Court of Appeals, G.R. No. 57062, 205 SCRA 337, 343; Baguioro v. Barrios, 77 Phil 120, 123 (1946).
26Chico v. Court of Appeals, G.R. No. 122704, January 5, 1998, 284 SCRA 33; Malayan Integrated Industries Corporation v. Mendoza, No. L-75238, September 30, 1987, 154 SCRA 548, 552.
27Caparros v. Court of Appeals, 170 SCRA 758; Alvir vs. Vera, No. L-39338, July 16, 1984, 130 SCRA 357, 361.
28Javelosa v. Court of Appeals, G.R. No. 124292, December 10, 1996, 265 SCRA 493, 502-503; Maddammu v. Judge, 74 Phil. 230 (1943); Aguilar v. Cabrera, 74 Phil. 658, 665-666 (1944).
29Refugia v. Court of Appeals, G.R. No. 118284, July 5, 1996, 258 SCRA 347, 364-366.
30German Management & Services, Inc. v. Court of Appeals, G.R. Nos. 76216 & 76217, September 14, 1989, 177 SCRA 495.
31Delos Reyes v. Odones, G.R. No. 178096, March 23, 2011, 646 SCRA 328, 334-335.
34Canlas v. Tubil, G.R. No. 184285, September 25, 2009, 601 SCRA 147, 158.
36Diu v. Ibajan, G.R. No. 132657, January 19, 2000, 322 SCRA 452, 458-459.
37 Section 16, Rule 70, Rules of Court; see also Wilmon Auto Supply Corp. v. Court of Appeals, G.R. Nos. 97637 and 98700-01, April 10, 1992, 208 SCRA 108.

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