RUBEN SANTOS, PETITIONER, VS. SPOUSES TONY AYON AND MERCY AYON, RESPONDENTS.

Santos versus Ayon

The Case

This is a petition for review on certiorari brought by Ruben Santos against the spouses Tony Ayon and Mercy Ayon. Santos sued the spouses for illegal detainer before the Municipal Trial Court in Cities of Davao City, claiming that the spouses had been occupying a portion of his registered lots by his mere tolerance, and that their continued possession became unlawful when they refused to vacate upon his demand. The case matters because it draws the line between two distinct ejectment actions, forcible entry and unlawful detainer, and reminds us that the jurisdiction of the court over the subject matter is fixed by the allegations of the complaint, not by the defenses raised in the answer.

Procedural History

Santos filed his complaint for illegal detainer before the Municipal Trial Court in Cities, Branch 2, Davao City. The spouses moved to dismiss on the ground that the court had no jurisdiction, there being no lessor-lessee relationship between the parties. The trial court denied the motion and, on July 31, 1997, rendered judgment in favor of Santos, ordering the spouses to vacate the portion of the subject properties, to surrender possession peacefully, to dismantle the structures found thereon, to pay reasonable value for the use and occupation of the encroached area at 1,000 pesos a month beginning September 1996 until the premises are vacated, to pay attorney's fees of 10,000 pesos, and to pay the costs of suit.

On appeal, the Regional Trial Court, Branch 11, Davao City, affirmed the trial court's judgment in toto, upholding the finding that the spouses' occupation of the contested portion was by mere tolerance, and that Santos had the right to eject them through court action when he needed the property. The spouses then elevated the case to the Court of Appeals through a petition for review. The Court of Appeals reversed and set aside the decision under review and ordered the complaint for unlawful detainer dismissed, holding that Santos's proper remedy should have been an accion publiciana before the Regional Trial Court, not an action for unlawful detainer. Santos's motion for reconsideration was denied. Hence, this petition for review on certiorari before the Supreme Court.

Facts

Santos is the registered owner of three lots situated at Lanzona Subdivision, Matina, Davao City, covered by Transfer Certificates of Title. The respondent spouses are the registered owners of an adjacent parcel of land. The previous occupant of the spouses' property built a building that straddled both the lots of the parties, and the spouses have been using the building as a warehouse.

In 1985, when Santos bought the three lots, he informed the spouses that the building occupied a portion of his land. He nevertheless allowed them to continue using the building. In 1996, Santos needed the entire portion of his lot, so he demanded that the spouses demolish and remove the part of the building encroaching on his property and turn over possession to him. The spouses refused. They continued occupying the contested portion and even made improvements on the building.

The dispute was referred to the barangay lupon, but the parties failed to reach an amicable settlement, and on March 27, 1996, a certification to file action was issued. On November 6, 1996, Santos filed his complaint for illegal detainer before the Municipal Trial Court in Cities. In their answer, the spouses denied that they were occupying Santos's property by mere tolerance, claiming they owned the contested portion and had been occupying it long before Santos acquired his lots in 1985.

Issues

• Whether or not the Court of Appeals committed a reversible error of law in holding that Santos's complaint falls within the competence of the Regional Trial Court in an accion publiciana rather than the Municipal Trial Court in Cities in a summary action for unlawful detainer.
• Whether or not the Municipal Trial Court in Cities properly acquired jurisdiction over the complaint for unlawful detainer based on the allegations therein.

Applicable Provisions

Section 1, Rule 70 on forcible entry and unlawful detainer of the 1997 Rules of Civil Procedure, as amended, provides:

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.

This provision supplies the two distinct causes of action, forcible entry and unlawful detainer, and fixes the one-year period within which the action must be brought before the Municipal Trial Court.

Ruling

On the first issue, the Court sustained the petition. It held 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. This rule is no different in an action for forcible entry or unlawful detainer. The Court explained that under Section 1 of Rule 70 there are two entirely distinct and different causes of action: forcible entry, where the defendant's occupation is illegal from the beginning because he acquired possession by force, intimidation, threat, strategy, or stealth; and unlawful detainer, where the defendant's possession 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.

On the second issue, the Court held that Santos's complaint for unlawful detainer is properly within the competence of the Municipal Trial Court in Cities. His allegations clearly make out a case for unlawful detainer: that the spouses had been occupying a portion of his properties for the past several years by virtue of his tolerance, that he needed the property in the early part of 1996 and demanded that they vacate and turn over the premises and remove their structures, and that they refused without justifiable reason. The Court stressed that a complaint for unlawful detainer is sufficient if it alleges that the withholding of possession or the refusal to vacate is unlawful, without necessarily employing the terminology of the law. Santos's cause of action springs from the spouses' failure to vacate upon his demand in 1996, and within one year therefrom, on November 6, 1996, he filed the complaint.

The Court underscored 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. It quoted its ruling in Roxas versus Court of Appeals:

A person who occupies the land of another at the latter's 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.

Doctrine

A Bar candidate should retain these rules. First, jurisdiction over the subject matter is determined by the allegations of the complaint, not by the defenses set up in the answer; this holds true in forcible entry and unlawful detainer cases, and the Municipal Trial Courts are not divested of jurisdiction even if the defendant raises the question of ownership. Second, Section 1 of Rule 70 yields two distinct causes of action: forcible entry, where possession is illegal from the beginning because acquired by force, intimidation, threat, strategy, or stealth; and unlawful detainer, where possession was inceptively lawful by virtue of an express or implied contract but became illegal upon the termination of the right to hold possession. Third, a complaint for unlawful detainer is sufficient if it alleges that the withholding of possession or refusal to vacate is unlawful, without necessarily employing the terminology of the law. Fourth, possession by tolerance is lawful, but becomes unlawful when the possessor refuses to vacate upon demand by the owner, and the summary action for ejectment is the proper remedy.

Disposition

The petition was granted; the decision and resolution of the Court of Appeals were reversed and set aside, and the decision of the Regional Trial Court affirming the judgment of the Municipal Trial Court in Cities was reinstated. Santos won.

Remember This

The single line worth memorizing is that possession by tolerance is lawful, but becomes unlawful when the possessor refuses to vacate upon demand, making a summary action for ejectment the proper remedy. Examiners like to use this case to test the distinction between forcible entry and unlawful detainer, and the rule that jurisdiction is determined by the allegations of the complaint rather than the defenses in the answer.