FUNDADOR C. VENIEGAS, PETITIONER, VS. MARILYN C. FERNANDEZ, AND HON. JEAN MARIE A. BACORRO-VILLENA, PRESIDING JUDGE OF RTC 28, RESPONDENTS.

Veniegas versus Fernandez

The Case

This is a petition for review brought by Fundador Veniegas against Marilyn Fernandez and the presiding judge of Branch 28 of the Regional Trial Court of Manila. The action below was one for unlawful detainer over a parcel of land in Sampaloc, Manila. The case matters because it fixes a clean rule on the real party in interest in ejectment: a plaintiff who has already sold the property before filing suit cannot invoke the court's jurisdiction, and the dismissal of the complaint follows as a matter of course.

Procedural History

Marilyn Fernandez filed a complaint for unlawful detainer before the Metropolitan Trial Court of Manila, Branch 7. The Metropolitan Trial Court dismissed the complaint, holding that it was Allan Garcia, not Marilyn Fernandez, who had the legal personality to sue, because she had sold the property a day before filing. Marilyn Fernandez appealed to the Regional Trial Court of Manila, Branch 28. The Regional Trial Court reversed and set aside the dismissal. It ordered Fundador Veniegas to vacate the property, to pay five thousand pesos as reasonable compensation for the use of the property from demand to vacate, or from 15 February 2011, until actual vacation, and to pay fifteen thousand pesos as attorney's fees. Her motion for reconsideration was denied. Fundador Veniegas then came to the Supreme Court by petition for review.

Facts

The land, measuring 235.6 square meters more or less, was originally covered by Transfer Certificate of Title Number 44108 in the name of Cayetano Fernandez, married to Maria. Upon Cayetano's death, Marilyn Fernandez, claiming to be his sole heir, caused a new title to be issued in her name. She asserted that Fundador Veniegas occupied the lot only by the tolerance of Cayetano, and that Cayetano was never married to Maria but merely cohabited with her. After the deaths of Cayetano and Maria, she asked Fundador to leave, without success.

On 29 April 2011, Marilyn Fernandez filed the complaint for unlawful detainer. The records show that she had sold the disputed property to Hilda Empizo one day before filing the suit. Empizo later sold it to Allan Garcia, who caused a new title to be issued in his name.

For his part, Fundador Veniegas recounted that he was the son of Maria from a previous marriage, and that Cayetano loved and treated him like his own son. He insisted that he and his family had occupied the land since the 1950s, and that a copy of the original title had been entrusted to him by Maria before her death. He claimed surprise at learning that Marilyn had caused a new title to be issued in her own name.

Issues

• Whether or not Marilyn Fernandez, having sold the property before filing the complaint, is the real party in interest in the action for unlawful detainer.
• Whether or not the Regional Trial Court erred in reversing the dismissal and in ordering Fundador Veniegas to vacate the property and pay compensation and attorney's fees.
• Whether or not the courts may pass upon the issue of ownership and the validity of Marilyn Fernandez's title in the ejectment case.

Applicable Provisions

The decision defines the real party in interest in these terms:

Real party-in-interest is defined as the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit.

This definition governs who may sue, and it is the test applied to Marilyn Fernandez.

The decision also states the rule on who must prosecute an action:

Every action must be prosecuted or defended in the name of the real party in interest.

This is the jurisprudential basis for dismissing a complaint filed by one who has no right or interest to protect.

On possession, the decision lays down the presumption in favor of the registered owner:

The person who has a torrens title over real property is entitled to possession thereof.

This presumption, the Court held, lies in favor of Allan Garcia, not Marilyn Fernandez.

Ruling

On the first issue, the Court ruled that Marilyn Fernandez is not the real party in interest. She sold the lot even before she filed the action, so the effect of the judgment has no bearing on her; she will neither benefit nor be injured by the eventual resolution of the case. It is Allan Garcia who is the title holder, and the suit should have been commenced by him or in his name. The Court rejected the Regional Trial Court's reliance on cases where the property was transferred pending litigation, because here the transfer came before the action was filed.

On the second issue, the Court held that the Regional Trial Court erred. The letter from Allan Garcia expressing his agreement, interest, and consent was unnotarized and unverified, and Marilyn Fernandez showed no judicial affidavit or special power of attorney appointing her as his attorney in fact. Absent such proof, no presumption of better right of possession lies in her favor. The dismissal of the case follows as a matter of course.

On the third issue, the Court declined to pass upon ownership, in light of the pendency of the action for annulment of title lodged by Fundador Veniegas.

Doctrine

A plaintiff in ejectment must be the real party in interest at the time of filing. The real party in interest is the party who stands to be benefited or injured by the judgment, or the party entitled to the avails of the suit. One who has no right or interest to protect cannot invoke the jurisdiction of the court, because every action must be prosecuted or defended in the name of the real party in interest. A seller who disposes of the property before filing suit is not such a party, and the complaint must be dismissed. The registered owner under a torrens title is entitled to possession, and the presumption of better right lies in the registered owner's favor. An agent suing on the owner's behalf must show authority, such as a special power of attorney or a judicial affidavit; an unnotarized and unverified letter is not enough.

Disposition

The petition was granted; the Regional Trial Court's decision and resolution were reversed and set aside, the Metropolitan Trial Court's dismissal was reinstated, and the complaint for unlawful detainer was ordered dismissed.

Remember This

Memorize this line: the plaintiff who has sold the property before filing the ejectment suit is not the real party in interest, and the dismissal follows as a matter of course. Examiners use this case to test the real party in interest rule, the effect of a transfer before rather than during litigation, and the presumption of possession in favor of the registered owner.