PHARMA INDUSTRIES, INC., PETITIONER, VS. HONORABLE MELITON PAJARILLAGA OF THE CITY COURT OF CABANATUAN CITY, NUEVA ECIJA, BRANCH II, SERGIA A. DEL ROSARIO AND “JOHN DOE/S”, RESP…

Pharma Industries versus Pajarillaga

The Case

This is a petition for certiorari brought by Pharma Industries, Incorporated against Judge Meliton Pajarillaga of the City Court of Cabanatuan City, Branch Two, and against Sergia del Rosario and persons unnamed. Pharma Industries had sued to eject Del Rosario from a parcel of land it had acquired through a deed of sale with right to repurchase. The city court dismissed the complaint for lack of jurisdiction, treating the action as one for recovery of the right to possess, which it believed belonged to the Court of First Instance. The case matters because it draws the boundary between the summary action of ejectment under Rule 70 and the plenary action known as accion publiciana, and because it teaches that a vendee may sue the vendor for unlawful detainer once the vendor's right to possess has expired.

Procedural History

Pharma Industries commenced an action for ejectment in the City Court of Cabanatuan City. Del Rosario answered, and Pharma Industries moved for judgment on the pleadings. Del Rosario opposed that motion and moved to dismiss on the ground that jurisdiction lay with the Court of First Instance. In a decision dated January 7, 1980, the respondent judge dismissed the case for lack of jurisdiction, reasoning that the complaint was really one for recovery of the right to possess, an accion publiciana, which must be filed in the Court of First Instance. A motion for reconsideration was denied. Pharma Industries then came to the Supreme Court on a petition for certiorari to review the actuations of the respondent judge.

Facts

On November 12, 1977, Sergia del Rosario executed in favor of Pharma Industries a deed of sale with right to repurchase over a registered parcel of land in Cabanatuan City, together with its improvements. The right to repurchase expired on November 12, 1978, and Del Rosario did not exercise it. Despite notice, she did not pay, and Pharma Industries filed a petition for consolidation of ownership.

On April 3, 1979, the court in that consolidation proceeding rendered a decision in favor of Pharma Industries, declaring it the full owner of the property and ordering the Register of Deeds to cancel the old title and issue a new one in its name. On June 8, 1979, Pharma Industries sent a letter demanding that Del Rosario and all persons claiming under her vacate the premises. She received the demand on June 13, 1979, but refused to vacate.

On October 22, 1979, Pharma Industries filed the ejectment complaint. Del Rosario admitted the material averments but claimed that her representative had verbally agreed with the plaintiff's counsel that, after recomputation of what she called an enormous and unconscionable amount, she would pay her obligation, an agreement she said the plaintiff dishonored. She also later filed, on August 25, 1980, a separate action in the Court of First Instance to declare the deed of sale with right to repurchase an equitable mortgage.

Issues

• Whether or not the city court has jurisdiction over the complaint, that is, whether the action is a summary action for unlawful detainer under Rule 70 rather than a plenary accion publiciana for recovery of the right to possess.
• Whether or not prior possession by the plaintiff must be alleged in an action for unlawful detainer.
• Whether or not the pendency of the later action in the Court of First Instance to declare the deed an equitable mortgage bars the ejectment suit.

Applicable Provisions

Section 1 of Rule 70 of the Rules of Court 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 landlord, 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 landlord, vendor, vendee, or other persons, may, at any time within one (1) year after such unlawful deprivation or withholding of possession, bring an action in the proper inferior 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. The complaint must be verified.

This provision supplies the two distinct causes of action, forcible entry and unlawful detainer, and fixes the one-year period and the inferior court that give the city court jurisdiction here.

Article 531 of the Civil Code provides:

Possession is acquired by the material occupation of a thing or the exercise of a right, or by the fact that it is subject to the action of our will, or by the proper acts and legal formalities established for acquiring such right.

This provision supports the Court's holding that Pharma Industries acquired possession through the deed of sale with right to repurchase and the confirmation of its title, so that prior possession may be attributed to it.

Ruling

On the first issue, the Court held that the proper remedy is ejectment under Rule 70, not accion publiciana, and granted the petition. The summary action is one to obtain possession only, filed in a municipal court within one year after the unlawful withholding of possession. The remedy covers two distinct causes of action: forcible entry, where the defendant's possession is illegal from the beginning, and unlawful detainer, where the possession was originally lawful but ceased to be so upon the expiration of the right to possess. This case is one for unlawful detainer, because Del Rosario, the vendor a retro, failed to repurchase, the consolidation of title in favor of the vendee a retro was confirmed, and she refused to vacate upon demand after her right to possess had ceased to be lawful. The demand was made on June 13, 1979, and the action was filed on October 22, 1979, well within the one-year period.

The respondent judge's mistake was to believe that the cause of action was forcible entry, which requires an allegation of prior possession and forcible deprivation. In unlawful detainer it is enough to allege that the defendant is unlawfully withholding possession from the plaintiff.

On the second issue, the Court held that where the cause of action is unlawful detainer, prior possession is not always a condition sine qua non, that is, an indispensable requirement. This is especially so where a vendee seeks to obtain possession of the thing sold from the vendor. But if prior possession be insisted upon, Pharma Industries had it before the suit was filed, since it acquired possession when Del Rosario executed the deed of sale with right to repurchase and its title was confirmed upon her failure to repurchase.

On the third issue, the Court held that the later suit in the Court of First Instance to declare the deed an equitable mortgage is not a bar to the ejectment suit.

Doctrine

First, the summary action under Rule 70 lies to obtain possession only, and it embraces two distinct causes of action: forcible entry, where possession is illegal from the beginning, and unlawful detainer, where possession was originally lawful but ceased to be lawful upon the expiration of the right to hold. Second, in unlawful detainer it is sufficient to allege that the defendant is unlawfully withholding possession; prior possession by the plaintiff is not always indispensable, especially where a vendee sues the vendor. Third, a vendee a retro whose title has been consolidated may eject the vendor who refuses to vacate after demand, and the one-year period runs from the unlawful withholding. Fourth, a separate action to annul or reform the deed does not bar the ejectment suit.

Disposition

The petition was granted, and the respondent judge was ordered to take cognizance of the ejectment case and to resolve the petitioner's motion for judgment on the pleadings, with no special pronouncement as to costs.

Remember This

Memorize the line that unlawful detainer requires no prior possession in the plaintiff where the suit is by a vendee against a vendor whose right to possess has expired. Examiners use this case to test the distinction between forcible entry, unlawful detainer, and accion publiciana, and the jurisdiction of city courts over ejectment.