SHEILA CLUTARIO AND JOCELYN BARBA (DOING BUSINESS AS TBJ MARKETING) PETITIONERS, VS. VILMA “VHEE” R. CARRASCAL (THRU HER ATTORNEY-IN-FACT) MARIANO B. BARANDA, JR., RESPONDENT.

Clutario versus Carrascal

The Case

This is a petition for review brought by Sheila Clutario and Jocelyn Barba, doing business as TBJ Marketing, against Vilma Carrascal, who is also known as Vhee Carrascal and who acts through her attorney-in-fact, Mariano Baranda, Junior. The respondent sued the petitioners for unlawful detainer over a leased stall in Tiwi-Malinao, Albay, after they stopped paying rent and refused to vacate. The case matters because it gathers in one decision the whole architecture of ejectment law: the limited issue of physical possession, the irrelevance of ownership once the lease is established, the conclusive presumption that bars a lessee from denying the lessor's title, and the statutory grounds for judicial ejectment. It is a compact review of what a Bar candidate must know about unlawful detainer.

Procedural History

The respondent filed a complaint for unlawful detainer before the Municipal Circuit Trial Court of Tiwi-Malinao, Albay. After the parties submitted their position papers and supporting documents, that court rendered judgment in favor of the respondent, ordering the petitioners to restore possession of the premises, to pay thirty-six thousand pesos representing unpaid rentals with legal interest from the filing of the complaint, to pay five thousand pesos as litigation expenses, and to pay the costs of suit.

The petitioners appealed to the Regional Trial Court of Tabaco City, Branch 18. The Regional Trial Court affirmed the decision of the lower court with modification, deleting the awards of litigation expenses and costs of suit. The petitioners moved for reconsideration, and the Regional Trial Court denied the motion.

The petitioners then came to the Supreme Court through a petition for review. After the respondent filed her comment and the period for the petitioners to file a reply lapsed without any reply being filed, the petitioners were deemed to have waived that filing, and the case was submitted for decision.

Facts

On the eighth of July 2010, the respondent and the petitioners entered into a written lease contract over a stall occupied by the petitioners for their business, the TBJ Marketing store. The petitioners agreed to pay a monthly rental of six thousand pesos, payable in advance within the first five days of each month. The lease was for a determinate period of one year, expiring on the thirtieth of September 2011.

The petitioners later stopped paying rent. The respondent made verbal and written demands, the last on the fifth of August 2011, asking them to vacate and to pay the arrears. As early as the twenty-ninth of July 2011, she had already written them that she no longer wished to renew the lease and that they would be charged ten thousand pesos per month should they remain after expiration.

The petitioners admitted the lease but claimed that the respondent had merely acted as agent of her nephew, Michael Riosa, whom they called the true owner. They asserted that Michael Riosa had revoked her authority by a letter dated the twenty-fifth of August 2011 and had executed a new lease with them from the first of September 2011. At the preliminary conference, the parties stipulated that the premises consisted of two stalls, Stall A and Stall B, each covered by a different lease contract, and that from the first of September 2011 the petitioners paid Michael Riosa instead of the respondent. Both lower courts found that Stall B, not Stall A, was the subject of the lease between the petitioners and the respondent.

Issues

• Whether or not the respondent had a cause of action for unlawful detainer against the petitioners.
• Whether or not the petitioners may defeat the ejectment by claiming that Michael Riosa is the true owner of the leased premises and that the respondent's authority to lease it out had been revoked.
• Whether or not the petitioners' failure to pay the stipulated monthly rental for September 2011 is a ground for judicial ejectment.

Applicable Provisions

Section 2, Rule 131 of the Rules of Court, on conclusive presumptions, provides:

Section 2. Conclusive presumptions. The following are instances of conclusive presumptions: (a) Whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing true, and to act upon such belief, he cannot, in any litigation arising out of such declaration, act or omission, be permitted to falsify it.

This is the provision that estops the petitioners from denying the respondent's title and authority as lessor after they had dealt with her as such.

Article 1673 of the Civil Code, on the causes for judicial ejectment, provides:

Article 1673. The lessor may judicially eject the lessee for any of the following causes: (1) When the period agreed upon, or that which is fixed for the duration of leases under Articles 1682 and 1687, has expired; (2) Lack of payment of the price stipulated; (3) Violation of any of the conditions agreed upon in the contract; (4) When the lessee devotes the thing leased to any used or service not stipulated which causes the deterioration thereof, or if he does not observe the requirements in Number 2 of Article 1657, as regards the use thereof.

This provision supplies the two grounds that sustain the ejectment: the expiration of the agreed period and the lack of payment of the stipulated price.

Ruling

On the first issue, the Court held that the respondent had a cause of action for unlawful detainer. It defined the action in these words:

An action for unlawful detainer exists when a person unlawfully withholds possession of any land or building against or from a lessor, vendor, vendee or other persons, after the expiration or termination of the right to hold possession, by virtue of any contract, express or implied.

The Court stressed that the only issue in such a case is physical or material possession, independent of any claim of ownership, and that once the relation of lessor and lessee is established, any attempt to inject the question of ownership is futile, except insofar as it might throw light on the right of possession. Here the lease was admitted in the answer. The lease over Stall B expired on the thirtieth of September 2011, and since it was for a determinate time, it ceased on the day fixed without need of further demand. The notice to vacate was an express act that the lessor no longer consented to the continued occupation.

On the second issue, the Court rejected the theory of revocation. The finding that Stall B was the leased premises made the revocation concerning Stall A irrelevant. More fundamentally, by entering into the contract over Stall B, the petitioners acknowledged the respondent's title and authority to lease it out. Having recognized the validity of that contract for eleven months, they were barred by the conclusive presumption in Section 2, Rule 131 from claiming that another person was the true owner with authority to contract a new lease.

On the third issue, the Court held that the admitted failure and refusal to pay the six thousand pesos due for September 2011, in contravention of the stipulation, was another reason to sustain the ejectment under Article 1673 of the Civil Code.

Doctrine

• The only issue in an unlawful detainer case is physical or material possession of the property, independent of any claim of ownership by any of the parties.
• When the relation of lessor and lessee is established, any attempt to inject the question of ownership is futile, except insofar as it might throw light on the right of possession.
• A lessee who has acknowledged the lessor's title and authority by entering into the lease is estopped, under the conclusive presumption in Section 2, Rule 131 of the Rules of Court, from later denying that title on the ground that another person is the true owner.
• A lease for a determinate period ceases on the day fixed without need of further demand, and a notice to vacate is an express act that the lessor no longer consents to the lessee's continued occupation.
• Under Article 1673 of the Civil Code, the lessor may judicially eject the lessee when the period agreed upon has expired and when there is lack of payment of the price stipulated.

Disposition

The Supreme Court denied the petition and affirmed the decision of the Regional Trial Court, which had affirmed the judgment of ejectment with the deletion of litigation expenses and costs of suit. The respondent won.

Remember This

Memorize the line that in unlawful detainer the only issue is physical possession, and that a lessee who has acknowledged the lessor's title cannot later deny it. Examiners use this case to test the limited issue in ejectment, the estoppel of a lessee against the lessor's title, and the grounds for judicial ejectment under Article 1673 of the Civil Code.