FELIX LIM AND JOSE LEE, PETITIONERS, VS. HON. COURT OF APPEALS, SPOUSES ROY PO LAM AND JOSEFA ONG PO LAM, RESPONDENTS.

The instant petitions for review involve the decisions of the
Court of Appeals promulgated on February 18, 1988 in AC-G.R. No. 08533-CV
entitled “Felix Lim, alias Lim Han Chiong,
represented by Jose Lee, Plaintiff-Appellants v. Lim Kok
Chiong, Legaspi Avenue
Hardware Co., (LAHCO), and Spouses Roy Po Lam and Josefa
Ong, Defendants-Appellees;”
(p. 25, Rollo) and in CA-G.R. No. 12316-SP entitled
“Jose Lee and Felix Lim, Petitioners v. Hon. Presiding Judge of Branch 2
of the Regional Trial Court in Legazpi City; The Hon.
Presiding Judge of Branch I of the Municipal Trial Court in the City of Legazpi; and Josefa Ong Po Lam, Respondents”
(p. 43, Rollo), as well as the resolution of
respondent court denying petitioners’ joint motion for reconsideration.

The facts are not disputed.

On December 10, 1964, petitioner Lim filed with the then CFI (now
RTC) of Albay Civil Case No. 2953 (p. 136, Rollo) against his brother Lim Kok
Chiong and Legaspi Avenue
Hardware Co. (LAHCO), to annul two deeds of sale executed by his brother in
favor of LAHCO, covering lots No. 1557 and 1558 of the cadastral survey of Albay, on the ground that the sale included the 3/14 pro-indiviso portion of the lots which he inherited by will
from his foster parents.

On November 3, 1968,
the trial court on motion of petitioner Lim dropped the case against his
brother.  Trial on the merits proceeded
only against defendant LAHCO.  During its
pendency, specifically on January 27, 1965, petitioner Lim filed with the
Registry of Deeds of Albay a notice of lis pendens which
was inscribed at the dorsal side of TCT No. 2580 issued to LAHCO after the
execution of the sale covering lot 1557. 
On March 15, 1969,
the trial court rendered a decision declaring LAHCO as the absolute owner of
Lots 1557 and 1558.  Pursuant to the
decision, the notice of lis pendens was cancelled on May 26, 1969.  On May 28, 1970, LAHCO sold the lots to
private respondents.  Thereafter, TCT
Nos. 8102 and 13711 were issued to private respondents, covering lots 1557 and
1558, respectively.  Petitioner Lim
appealed to respondent Court which affirmed the decision on April 29, 1980 in CA-G.R. No. 44770-R
(p. 146, Rollo). 
On May 16, 1980, petitioner
Lim’s counsel received a copy of the judgment of affirmance.  By registered mail on May 23, 1980, counsel for petitioner Lim filed a
motion for extension of time to file motion for reconsideration (p. 154, Rollo).  Respondent
court gave petitioner Lim up to June
20, 1980 to file one.  On June 17, 1980, petitioner filed his
first motion for reconsideration (p. 155, Rollo).  On June
25, 1980, respondent Court denied the motion (p. 158, Rollo) for lack of merit. 
After he received the denial on July
12, 1980, petitioner Lim without leave filed on July 14, 1980 a second motion for
reconsideration.  On March 11, 1981, respondent court issued a
resolution setting aside its April 29,
1980 decision.  The dispositive portion of the resolution reads:

” x
x x.

“(3)    Declaring plaintiff entitled to exercise the
right of redemption of said properties which were sold by Lim Kok Chiong to defendant Legazpi Avenue Hardware by returning to said vendee within
thirty (30) days from receipt of notice from the Clerk of Court of the Court of
First Instance of Albay of the records of this case
from this Court pursuant to Section 11 of Rule 52 of the Rules of Court, the
sum of P20,000.00 plus expenses of the contract and other legitimate payments
made by defendants by reason of the sale and such necessary and useful expenses
that may have been made on the properties by defendant;

“(4)    In the event that the parties cannot agree
on the amount of the expenses of the contract and other legitimate payments
made by reason of the sale and the necessary and useful expenses made by
defendant on the properties, the Court a quo shall receive the evidence of the
parties solely for the purpose of determining said accounts to be paid by plaintiff
in addition to the P20,000.00.  Pending determination of said amount and upon
payment by plaintiff of the sum of P20,000.00 to
defendant within the aforesaid period of thirty (30) days above-mentioned,
defendants shall execute an appropriate deed of conveyance in favor of
plaintiff of the properties in question without prejudice to the determination
of the additional amounts to be paid by plaintiff to defendant.  Should defendant refuse or fail to execute
said deed of conveyance within thirty (30) days, the Court a quo shall order
its clerk of Court to execute said deed of
conveyance.  No pronouncement as
to costs.” (p. 205, Rollo)

LAHCO came to this Court asking for extension of time to file a
petition for review but it never filed one (G.R. No. 57369).  Accordingly, the Court remanded the case to
the trial court for execution.

Meanwhile, in June,
1970, private respondents and petitioner Lee entered into a written contract of
lease for one (1) year over the
commercial building erected on Lot No. 1557. 
After the contract expired, petitioner Lee continued to occupy the
premises paying the monthly rental. 
However, he refused to pay the rentals after September 15, 1981 and he informed private
respondents that he will deposit the same in court as petitioner Lim had
promised to sell the property to him. 
This prompted private respondents to notify him to vacate the premises
for failure to comply with their demand. 
Then private respondents, on September
2, 1981, filed with the City
Court of Legaspi City
a complaint for unlawful detainer docketed as Civil
Case No. 2687.  On November 12, 1981, petitioner Lim filed therein
an answer in intervention questioning the right of private respondents to
collect the rentals using as basis the March
11, 1981 resolution of respondent court in AC G.R. No.
44770-R.  After trial on the merits, the
MTC of Legaspi City rendered a decision on December 19, 1983, the decretal part of which states:

“WHEREFORE, judgment is hereby rendered; (1) declaring the
plaintiffs (now respondent?spouses) as lawful owners of and rightfully
entitled to the immediate possession of the leased commercial building and lot
1557 covered by TCT No. 8102 (formerly TCT 2580) as described in paragraph 2 of
the complaint; (2) directing the defendant (now petitioner Jose Lee), his
agent, or anyone acting in his behalf, to vacate said leased building and lot
and to restore the actual possession thereof, to the plaintiffs; (3) ordering
the defendant to pay directly the
plaintiffs the whole rentals which accrued, from October, 1981 up to the time
he shall have vacated the leased premises, at the rate of P2,500.00 a month,
minus the amounts already deposited with the City Treasurer’s Office of Legaspi, which amounts
are hereby allowed to be withdrawn by the plaintiff, their counsel or
representative; (4) directing the defendant to also pay the plaintiffs the
amounts of (a) P2,500.00 and P1,200.00 as exemplary damages and attorney’s fee,
respectively; and (b) the costs of the suit.

“The intervenor’s (now co-petitioner
Felix Lim’s) claim and prayer are denied for lack of merit.

“x x x                         x x
x                             x
x x

“IT IS SO ORDERED.” (p. 78, Rollo)

The MTC of Legaspi City in passing upon
the issue of the validity of respondent court’s resolution of March 11, 1981 in AC-G.R. No. 44770-R
reasoned out:

“Therefore, the inescapable conclusion is that, on June 21, 1980, the first day after the last day (June 20, 1980) for
filing Felix Lim’s first and second motions for reconsideration
of the CA decision (promulgated on April 29, 1980), said CA decision has already become final and executory,
beyond the CA jurisdiction to either alter, modify, set aside or reconsider
(Pfleider v. Victoriano, 98
SCRA 491, 497), x x x, Corollarily, the CA had then no jurisdiction to entertain intervenor Felix Lim’s late second motion for
reconsideration, filed without prior leave of court; neither had the CA
then jurisdiction to thereafter issue its Resolutions promulgated March 11,
1981 (exhs. K & I), setting aside its final
decision of April 29, 1980,
and June 25, 1981 (exh. O), (pp. 6-7, Annex A, petition, July 6, 1987).

From this decision, petitioners
appealed to respondent court which affirmed the same.  After denial of his motion for
reconsideration, petitioners challenged the affirmance
by filing with this Court a petition for certiorari and mandamus
docketed as G.R. No. 68789.  On November 10, 1986, the Court
remanded the case to the proper appellate court which is the Regional
Trial Court of
Legaspi City.  On June
24, 1987, the RTC affirmed the decision of the lower court.  It said among others:

“On the issue of
possession, it is undisputed and admitted by the appellant Jose
Lee in his Memorandum that he had entered into a contract of lease with the
plaintiffs-appellees over the questioned premises and
paid the agreed rentals on the premises. 
He cannot now deny the title of the appellees
based on the doctrine of estoppel in pais.  (Sec. 3 [b], Rule 135, Rules of Court).

“And the fact that the contract of lease had already expired,
the action for ejectment is the most appropriate, and
prior physical possession of the plaintiffs is not an indispensable requirement
in an unlawful detainer case brought by a vendee or
other person against whom the possession of any land is unlawfully withheld
after the expiration or termination of a right to hold possession, (Roxas v. Alcantara, 113 SCRA 21,
26 [1982]).  After a lease contract
expires, the lessee becomes a usurper (Republic v. Diaz, 92 SCRA 535).  And after demand from the lessee to vacate,
the possession becomes illegal (PNB v. Animas, 117 SCRA 735).  Hence, appellant Lee is not entitled to continue
in his lease and possession of the premises.

“Appellant Lee also invoked the provisions of P.D. No. 20
which is unavailing to him, for this law was already repealed by Batas Blg. 25; and the subject matter herein is a commercial lot
and building, and both said laws cover only residential units rented at not
more than P300.00 a month.

“x x x                         x x
x                             x
x x

“The Court further sustains the view of the Court of origin
that the ‘reliance of the appellant-intervenor on the
Court of Appeals’ Resolutions of March
11, 1981 (exhs. K & I) and June 25, 1981 (Exhs.
0 & II), called by them as ‘final decision’ in CA No. 44770-R, is
misplaced.  The subject Resolutions are
neither persuasive nor conclusive in this case.” (pp. 6-7, Annex G, Petition, July 6, 1987) (pp, 82-83, Rollo).

This decision was the subject of petitioners’ appeal to respondent
court docketed as AC-G.R. No. 12316-SP.

In the meantime, petitioner Lim on November 12, 1981, filed in Civil Case No. 2953 a motion
to annotate the resolution of March
11, 1981 issued in AC G.R. No. 44770-R on the certificates of title
of private respondents covering the lots in question.  He likewise moved for the issuance of a writ
of execution to enforce the resolution but the writ initially granted was met
with a third party claim filed by respondents. 
He also filed a motion praying that the Clerk of Court be ordered to execute in his favor a
deed of conveyance of the disputed lots. 
All the motions were denied in one order issued by the trial court on February 4, 1982.  It disposed of the motions as follows:

“WHEREFORE, reserving to the party-plaintiff the right to institute an action on whether or
not the acquisition of the properties in question by spouses Roy
Po Lam and Josefa Ong were made in good
faith or bad faith; or
whether in the process the cooperation of the Register of Deeds paved the way for such transfer, the writ
of execution issued under and by virtue of the Order dated October 20, 1981 is
hereby ordered quashed.

“Consequently, likewise, the motion filed by the
party-plaintiff to have the Court of Appeals’ (Resolution of March 11, 1981)
annotated on T.C.T. Nos. 8102 and 13711) of the Register of Deeds of Legazpi, registered in the names of Roy Po Lam and Josefa Ong are hereby denied for
being premature sans a finding of bad faith on the part of the latter.

“And the motion to require the party-plaintiff to execute the deed of
conveyance or in his stead, the Clerk of Court are hereby denied for the
ground of impossibility of performance.” (p. 32, Rollo)
(Underscoring Supplied)

Instead of an appeal from this order, petitioner Lim on February 9, 1982, filed Civil Case No.
6767 for reconveyance and annulment of the sale and
titles of the lots.  On September 19, 1985, he again filed in
Civil Case No. 2953 a motion to include private respondents as party-defendants
therein and a motion to execute the March
11, 1981 resolution of respondent court in AC-G.R. No.
44770-R.  These motions were also denied
by the trial court on October 16,
1985.  From the order of denial
petitioner Lim appealed to respondent court. 
His appeal was docketed as AC-G.R.
No. 08533-CV.  Respondent court, on February 18, 1988, affirmed the
questioned order.  On the same date,
respondent court in AC-G.R. No. 12316-SP also affirmed the decision of the RTC
which sustained the decision of the MTC in the ejectment
case (Civil Case No. 2687) against petitioner Lee.

In agreement with the trial courts’ order of dismissal of
petitioner Lim’s motion for execution of the March 11, 1981 resolution in AC-G.R.
No. 44770-R, as well as his motion to include private respondents as defendants
in Civil Case No. 2953, respondent court in AC-G.R. No. 08533-CV ruled that its
decision of April 29, 1980 has become final and executory,
hence beyond its power to reverse.  It
further ruled that since petitioner Lim thru counsel received on May 16, 1980 a
copy of the notice of judgment and a copy of the April 29, 1980 decision, under
Rule 45, he had 15 days to perfect his appeal by certiorari to this
Court or to file within that period a motion for reconsideration but instead of
so doing, he improperly filed a motion for extension of time to file motion for
reconsideration which was erroneously granted. 
It concluded that the extension granted to petitioner Lim did not arrest
the running of the 15 day period; and considering that the motion for extension
of time to file motion for reconsideration is not sanctioned under the rule
laid down in Habaluyas v. Japson
(G.R. No. 70895, August 5, 1985, 138 SCRA
46) later reiterated in Lacsamana v. IAC, G.R. Nos.
73146-47, August 26, 1986, the
resolution of March 11, 1981 is tainted with jurisdictional infirmity.  It likewise disregarded the issue of whether or not private respondent are
transferees of the lots pendente lite by invoking Section 79 of Act No. 496 as amended
by Section 76 of P.D. 1529 and, also, the absence of a notice of lis pendens at the
time the lots were sold to
private respondents.  It declared that
for failure of petitioner Lim to appeal from the order of February 4, 1982 in Civil Case No. 2953, the same
become final and executory and his admission that he
filed Civil Case No. 6767 pursuant to said order imply his comformity
thereto.  It justified the order denying
the motion to include private respondents as defendants in Civil Case No. 2953 stating that private
respondent’s third party claim is sanctioned by Sec. 14, Rule 39 and such claim
cannot be basis for their inclusion in the case so as to bring them
within the operation of the March 11, 1981 resolution for they were never impleaded as parties?litigants therein or in AC-G.R.
No. 44770-R.

In AC-G.R. No. 12316-SP, it ruled that Lee’s unjustified refusal
to pay rent and his failure to vacate are grounds for ejectment;
that he cannot deny or question the ownership of private respondents over the
lease premises.  It also found out that
the leased premises is a commercial building and therefore excluded from the
operation of P.D. No. 20 as amended by B.P. Blg. 25;
that the original written lease contract had expired so that his occupation of
the premises was on a month-to-month basis hence the lease was with a specific
and definite period which expires at the end of each month and therefore
outside the suspension imposed in Section 4 of PD 20 as amended by PD 25.  It also affirmed the denial of petitioner
Lim’s intervention in the ejectment case (Civil Case
No. 2687) by adopting its own ratiocination in A.C. G.R. No. 08533-CV regarding
the applicability of the rule laid down in Habaluyas
v. Japson (supra). 
In both cases, petitioners filed a joint motion for reconsideration
which was denied by respondent court on June
15, 1988.  Hence
the petitions.

Petitioners fault respondent court for concluding that its
resolution of March 11, 1981
in AC G.R. No. 44770-R is null and void. 
They claim that said resolution could not have been assailed
collaterally but only by a direct proceeding for its annulment; that the
reliance placed by respondent court in the cases of Roque
v. Gunigundo (A.M. Case No. 1664, March 30, 1979) and
Habaluyas v. Japson (supra)
is unwarranted because the Court, on May 30, 1986 clarified that the ruling
laid down in the latter case should be complied with strictly effective June
30, 1986 (Ipapo v. Suarez and CA, G.R. No. 72740,
January 27, 1987, 147 SCRA 208) and therefore said rulings cannot be applied
retroactively to the March 11, 1981 resolution in G.R. No. 44770-R which has
become final and executory and beyond re-­examination;
and that the pronouncements made in said resolution became the law of the case
which may no longer be modified or disturbed. 
Taking exception to the pronouncement of respondent court that the said
resolution cannot be executed by reason of the cancellation of the notice of lis pendens after the dismissal of Civil Case No.
2953, petitioners argue that said pronouncement contravenes the basic principle
that the actual registration of documents affecting land constitutes the
operative act which makes the instrument evidencing the transaction valid as
against third persons and binding on the land itself.  They allege that the cancellation was
contrary to law because the decision in Civil Case No. 2953 did not attain
finality as it was in fact reversed by respondent court in CA G.R. No. 44770-R
by its resolution of March 11, 1981; that
without such final
decision and since petitioner (Lim) did not cause the cancellation, the only
recognized means to cancel the lis pendens was the issuance of a special order
from a competent court to that effect as provided for under Sec. 77, of P.D. 1529.

They assail the conclusion
reached by respondent court that respondents
were buyers in good faith as contrary to the evidence presented.  They claim that private respondents cannot be
considered as having bought Lot No. 1558 in good faith because it was only on
May 20, 1974 that a similar annotation on TCT No. 2581 was cancelled and the
sale of the lots took place on May 28, 1970;
that the non-inclusion of private respondents as parties in Civil Case No. 2953
and in CA G.R. No. 44770-R has no procedural significance as they are
transferees pendente lite.  They assert that respondent court erred in
sustaining the erroneous decision of the trial courts which ruled on the issue
of ownership of lot no. 1557 and the building standing thereon contrary to the
principle that in ejectment cases only the issue of
possession is determined.

Petitioners added that private respondents did not notify
petitioner Lee to vacate by reason of expiration of the lease contract but for
the reason that they are allegedly going to use the premises and that the
notice was not presented as evidence during the trial.  According to them, there was no lawful demand
to vacate.  They further assert that
after the lease contract expired, the relationship of petitioner Lee and
private respondents is governed by Article 1670 of the Civil Code and therefore
the period of the lease should have been fixed by the trial courts in
accordance with Article 1687 of the same Code.

We find the petitions to be impressed with merit.

The Court in a subsequent resolution in Habaluyas
v. Japson (G.R. No. 70895, dated May 30, 1986, 142
SCRA 208), declared that the filing of a motion for extension of time to file
motion for new trial or reconsideration of a final order or judgment of a
Metropolitan or Municipal Trial Court, Regional Trial Court and the Court of
Appeals, is not expressly prohibited by law or the rules.  The Court clarified therein that in Gibbs v.
CFI of Manila (80 Phil 160) it was not held that a motion for extension of time
to file motion for new trial or reconsideration could not be granted and that
the Gibbs decision was cited by a division of the Court in Roque
v. Gunigundo (Adm. Case No. 1664, March 30, 1979, 89
SCRA 178) merely to support a statement that such kind of motion is not in order.  The Court further stated that “the
interest of justice would be better served if the original decision were
applied prospectively” beginning June
30, 1986.  With the aforesaid
pronouncement, all previous rulings on the matter were deemed abandoned or at
least superseded.  So that when
petitioner Lim filed thru registered mail on May 23, 1980 his motion for extension of time to file a
motion for reconsideration, the motion was deemed properly filed contrary to
respondent court’s ruling that it was a prohibited pleading.  The motion therefore suspended the running of
the period for him to appeal from the April
29, 1980 decision in AC-G.R. No. 44770-R.  However, it must be noted that petitioner Lim
was granted by respondent court a new period (20 days) to file a motion for
reconsideration.  The motion which he
filed barely 3 days before the expiration of the period given him was
denied.  Instead of taking an appeal
after receipt of the denial, he filed a second motion for reconsideration which
was the basis of the March 11, 1981
resolution.  The filing of the second
motion is clearly contrary to Rule 52 of the Rules of Court because it was made
without leave and after the lapse of the extension granted him and also
contrary to Sec. 4 of the Interim Rules which prohibits the filing of a second
motion for reconsideration of a final order or judgment.  But one does not have any vested right in
technicalities.  In meritorious cases, a liberal
not literal interpretation of the rules becomes imperative and technicalities
should not be resorted to in derogation of the intent of the rules which is the
proper and just determination of litigations. 
Litigations should, as much as possible be decided on their merits and
not on technicality.  x
x x.  As has been the constant ruling of this
Court, every party-litigant should be afforded the amplest opportunity for the
proper and just disposition of his cause free from the constraints of
technicalities (Fonseca v. CA, G.R. No. L-36035, 30 August 1988; Hernandez v. Quirtan, G.R. No. L-48457, 29 November 1988, 168 SCRA
99).  Furthermore, private
respondents failed to raise the issue of failure to comply with the rules.  Their failure has the effect of a waiver
(Republic v. Judge Villanueva, G.R. No. 83333, February 2, 1989, En Banc,
Minute Resolution).

The reversal made by respondent Court of its April 29, 1980 decision in AC-G.R. No. 44770-R
thru its March 11, 1981
resolution was the result of a thorough deliberation and evaluation of the
evidence of the parties.  The Court takes
cognizance of the fact that private respondents were directed to comment on the
second motion for reconsideration and after they filed one, the motion was
calendared for hearing (Resolution in AC-G.R. No. 44770-R dated September 10,
1980), after which respondent court, taking a hard look at the evidence, found
out that one of the partners of LAHCO (Francisco Uy
Cheng Co) used to live with the family of petitioner Lim and after the death of
his foster parents said partner became the encargado
of the lots in question so that in such
capacity he knew of the heirs of the lots as petitioner usually demanded from
him his share from the rentals.  It
properly ruled that LAHCO was not
a buyer in good faith and since petitioner never executed in favor of his brother, any deed of conveyance
waiving his 3/14 interest in the properties in question, the document he signed
entrusting to his brother his two (2) children with his common law wife and
also the monthly income he was receiving from him for his children’s support,
cannot be considered as renunciation of his interest but merely an assignment of the income earned by
him.  Respondent court also doubted the
testimony of Cherry Lim that petitioner Lim knew of the sale as she heard them
talking about it.  Respondent
court noting that, although said witness understood Chinese language, she did
not know how to speak the same so that when the petitioner Lim and his brother
were conversing, they could have spoken purely in Chinese and it is doubtful if
said witness fully understood what they were talking about.

The Court agrees with the contention of petitioners that the
resolution of March 11, 1981
in AC-G.R. No. 44770-R could not be collaterally attacked both in Civil Case
No. 2687 and in the appeal from the decision in Civil Case 2953.  The nature of the resolution is such that it
is entirely regular in form as the defect was procedural which is not apparent
on its face.  Therefore, the only cognizable
remedy against it is the filing of an independent action or proceeding to
vacate or have it set aside (Banco Espanol Filipino v. Palanca, 37
Phil. 921; Ramos v. Manalac, 89 Phil 270).

From the foregoing, it was error for respondent court to have
reversed its March 11, 1981
resolution in AC-G.R. No. 44770-R.  And
for failure of LAHCO to appeal from said resolution, the same became
final.  Once a decision becomes final,
the issues therein raised should be laid
to rest (Zansibarian Residents Asso. v. Municipality of Makati,
G.R. No. 62136, February 28, 1985, 135 SCRA 235).  The resolution, however, does not constitute
the law of the case which should govern all subsequent proceedings
thereon.  This doctrine which is
necessary to end repeated appeals simply states that:  “x x x where there have been two (2) appeals in the same case
between the same parties and the facts are the same, nothing decided on the
first appeal can be re-examined
on a second appeal.  Right or wrong, it
is binding on both the trial court and the appellate court and it is not
subject to re-examination by the other. 
For the purpose of that case, though only for that case, the decision of
the first appeal is the law x x x”
(Steirman v. Clinchfield
Coal Corp., 121 Vol. 611, 620, 93 SE 684, cited in Francisco, Section 49, Rule 39, Rules of Court,
Volume II, p. 849).  It is quite apparent
that the parties involved in these cases and those in AC-G.R. No. 44770-R are
different aside from the fact that they have dissimilar factual backgrounds.

Thus, there was no reversible error committed by respondent court
in affirming the denial of petitioner Lim’s motion to include respondents as
party-defendants in Civil Case No. 2953 as well as his motion to annotate the
resolution of March 11, 1981
on private respondents title to the lots.  Respondents were never parties-litigants in
Civil Case No. 2953 and CA-G.R. No. 44770-R. 
They could not be affected by the proceedings held thereon because they
were strangers thereto (Polaris Marketing v. Plan, 69 SCRA 36, 390.  The motion to annotate is likewise not
sanctioned under the rules.  That is why
the trial court reserved for petitioner Lim, thru its order dated February 4, 1982, the right to file an
action to determine once and for all the validity of the acquisition of the
lots by respondents and he exercised it by filing Civil Case No. 6767 which is
still pending.  The pendency
of the latter case which was aimed primarily to reconvey
to petitioner Lim his 3/14 pro indiviso share
over the lots by reason of the alleged questionable sale thereof by LAHCO to
private respondents, should have restrained respondent court from resolving the
issue of the correctness of the cancellation of lis
pendens on Certificate of Title No. 1557 as well
as the factual issue that the private respondents were buyers in bad
faith.  It was error therefore for
respondent court to have passed upon these issues.

There was, however, no error committed by respondent court in
sustaining the ejectment of petitioner Lee.  First, petitioner Lee had
no right to question or deny the title of private respondents over the
leased premises (Art. 1436, Civil Code). 
There is no dispute that the one year period of the original lease
expired but he continued to stay in the leased premises by paying the monthly
rentals.  Thus, an implied new lease or tacita reconduccion
was created between him and private respondents (Art. 1670, Civil Code).  The period of the new lease is established by
Article 1687 of the Civil Code under which the new lease must be deemed from
month to month, the rental being payable on a monthly basis.  There being a period, the second paragraph of
the same article is not
applicable.  Private respondents have the
right to terminate the lease after each month with due notice which was given
him.  After the notice, his right to
continue in possession ceases and his possession becomes one of detainer (Balucanag v. Francisco,
G.R. No. L-33422, May 30, 1983,
122 SCRA 498).  In
addition, he cannot seek protection under BP 125.  The premises in question being a commercial
building said law is not applicable.

The alleged illegality of
the notice to vacate is untenable. 
Such notice is sufficient under
BP 25 provided one of the grounds under Section 5 thereof is present (Zablan v. CA,
57844, September 30, 1987, 154 SCRA 487). 
There is no doubt that petitioner
was given a notice to vacate the premises because private respondents
wanted to use the same.  The conditions imposed by law having
been complied with, petitioner Lee’s ejectment is proper.

As to the imputed lack of jurisdiction of the MTCC of Legaspi City to decide the issue of ownership in an ejectment case,
the same has been passed upon in
G.R. No. 68789 entitled “Jose Lee and
Felix Lim v. Presiding Judge, Br. I-MTC, Legaspi City,
et al.” (145
SCRA 408, 415), where it was held that
respondent trial court had jurisdiction to rule upon such issue.

ACCORDINGLY, the
decisions appealed from are modified.  The portions of the appealed decisions dealing with the March 11, 1981 resolution in AC-G.R. No. 44770-R are
reversed and set aside and the said resolution is ordered reinstated.  The decisions are affirmed in all other
respects.  Costs
against private respondents.

SO ORDERED.

Narvasa, (Chairman), Cruz, Gancayco, and Griño-Aquino, JJ., concur.