Optima Realty Corporation vs. Hertz Phil. Exclusive Cars, Inc., 688 SCRA 317, January 09, 2013

SUPREME COURT REPORTS ANNOTATED VOLUME 688
5/10/14, 7:15 AM
G.R. No. 183035.January 9, 2013.*
OPTIMA REALTY CORPORATION, petitioner, vs. HERTZ

PHIL. EXCLUSIVE CARS, INC., respondent.
Remedial Law; Civil Procedure; Courts; Jurisdiction; In civil
cases, jurisdiction over the person of the defendant may be acquired
either by service of summons or by the defendants voluntary
appearance in court and submission to its authority.In civil cases,
jurisdiction over the person of the defendant may be acquired either
by service of summons or by the defendants voluntary appearance
in court and submission to its authority. In this case, the MeTC
acquired jurisdiction over the person of respondent Hertz by reason
of the latters voluntary appearance in court. In Philippine
Commercial
_______________
* FIRST DIVISION.
318
318
SUPREME COURT REPORTS ANNOTATED
Optima Realty Corporation vs. Hertz Phil. Exclusive Cars, Inc.

International Bank v. Spouses Dy, 588 SCRA 612 (2009), we had
occasion to state: Preliminarily, jurisdiction over the defendant in a
civil case is acquired either by the coercive power of legal processes
exerted over his person, or his voluntary appearance in court. As a
general proposition, one who seeks an affirmative relief is deemed
to have submitted to the jurisdiction of the court. It is by reason of
this rule that we have had occasion to declare that the filing of
motions to admit answer, for additional time to file answer, for
reconsideration of a default judgment, and to lift order of default
with motion for reconsideration, is considered voluntary submission
to the courts jurisdiction. This, however, is tempered by the concept
of conditional appearance, such that a party who makes a special
appearance to challenge, among others, the courts jurisdiction over
his person cannot be considered to have submitted to its authority.
Same; Same; Litis Pendentia; Elements of.Litis pendentia
requires the concurrence of the following elements: (1) Identity of
parties, or at least their representation of the same interests in both
actions; (2) Identity of rights asserted and reliefs prayed for, the
relief being founded on the same facts; and (3) Identity with respect
to the two preceding particulars in the two cases, such that any
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judgment that may be rendered in the pending case, regardless of

which party is successful, would amount to res judicata in the other
case.
PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Picazo, Buyco, Tan, Fider & Santos for petitioner.
Jesus, Christopher PB Belandres for respondent.
SERENO,C.J.:
Before us is a Rule 45 Petition assailing the Decision1
and
_______________
1 Rollo, pp. 39-48; CA Decision dated 17 March 2008, penned by
Associate Justice Vicente Q. Roxas and concurred in by Associate
Justices Josefina Guevara-Salonga and Ramon R. Garcia.
319
VOL. 688, JANUARY 9, 2013
319
Optima Realty Corporation vs. Hertz Phil. Exclusive Cars,

Inc.
Resolution2 of the Court of Appeals (CA) in CA-GR SP No.
99890, which reversed the Decision3 and Resolution4 of the
Regional Trial Court (RTC), Branch 137, Makati City in
Civil Case No. 06-672. The RTC had affirmed in toto the 22
May 2006 Decision5 of the Metropolitan Trial Court
(MeTC), Branch 64, Makati City in Civil Case No. 90842
evicting respondent Hertz Phil. Exclusive Cars, Inc. (Hertz)
and ordering it to pay back rentals and other arrearages to
petitioner Optima Realty Corporation (Optima).
Optima is engaged in the business of leasing and renting
out commercial spaces and buildings to its tenants. On 12
December 2002, it entered into a Contract of Lease with
respondent over a 131-square-meter office unit and a
parking slot in the Optima Building for a period of three
years commencing on 1 March 2003 and ending on 28
February 2006.6 On 9 March 2004, the parties amended
their lease agreement by shortening the lease period to two
years and five months, commencing on 1 October 2003 and
ending on 28 February 2006.7
Renovations in the Optima Building commenced in
January and ended in November 2005.8 As a result, Hertz
alleged that it experienced a 50% drop in monthly sales
and a signifi_______________
2 Id., at p. 38; CA Resolution dated 20 May 2008, penned by Associate
Justice Vicente Q. Roxas and concurred in by Associate Justices Josefina
Guevara-Salonga and Ramon R. Garcia.
Page 2 of 12
5/10/14, 7:15 AM
3 Id., at pp. 49-61; RTC Decision dated 16 March 2007, penned by

Presiding Judge Jenny Lind R. Aldecoa-Delorino.
4 CA Rollo, pp. 47-49; RTC Resolution dated 18 June 2007, penned by
Presiding Judge Jenny Lind R. Aldecoa-Delorino.
5 Id., at pp. 205-209; MeTC Decision dated 22 May 2006, penned by
Judge Dina Pestao Teves.
6 Id., at pp. 84-85; Contract of Lease dated 12 December 2002.
7 Id., at pp. 153-154; Amendment to the Contract of Lease dated 9
March 2004.
8 Id., at p. 68; Complaint of Exclusive Cars, Inc. dated 30 January
2006.
320
320

Inc.
cant decrease in its personnels productivity. It then
requested a 50% discount on its rent for the months of May,
June, July and August 2005.9
On 8 December 2005, Optima granted the request of
Hertz.10 However, the latter still failed to pay its rentals for
the months of August to December of 2005 and January to
February 2006,11 or a total of seven months. In addition,
Hertz likewise failed to pay its utility bills for the months
of November and December of 2005 and January and
February of 2006,12 or a total of four months.
On 8 December 2005, Optima wrote another letter to
Hertz,13 reminding the latter that the Contract of Lease
could be renewed only by a new negotiation between the
parties and upon written notice by the lessee to the lessor
at least 90 days prior to the termination of the lease
period.14 As no letter was received from Hertz regarding its
intention to seek negotiation and extension of the lease
contract within the 90-day period, Optima informed it that
the lease would expire on 28 February 2006 and would not
be renewed.15
On 21 December 2005, Hertz wrote a letter belatedly
advising Optima of the formers desire to negotiate and
extend the lease.16 However, as the Contract of Lease
provided that the notice to negotiate its renewal must be
given by the lessee at least 90 days prior to the expiration
of the contract, petitioner no longer entertained
respondents notice.
_______________
9 Id., at p. 97.
10 Id., at p. 105; letter of Optima dated 8 December 2005.
11 Id., at p. 114; Complaint (With Application for Temporary
Restraining Order and/or Preliminary Mandatory Injunction) dated 10
March 2006.
12 Id.
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5/10/14, 7:15 AM

14 Id., at p. 86; Contract of Lease dated 12 December 2002.
16 Id., at p. 104; letter of Hertz dated 21 December 2005.
321
321

Inc.
On 30 January 2006, Hertz filed a Complaint for Specific
Performance, Injunction and Damages and/or Sum of
Money with prayer for the issuance of a Temporary
Restraining Order (TRO) and Writ of Preliminary
Injunction (Complaint for Specific Performance) against
Optima. In that Complaint, Hertz prayed for the issuance
of a TRO to enjoin petitioner from committing acts that
would tend to disrupt respondents peaceful use and
possession of the leased premises; for a Writ of Preliminary
Injunction ordering petitioner to reconnect its utilities; for
petitioner to be ordered to renegotiate a renewal of the
Contract of Lease; and for actual, moral and exemplary
damages, as well as attorneys fees and costs.
On 1 March 2006, Optima, through counsel, wrote Hertz
a letter requiring the latter to surrender and vacate the
leased premises in view of the expiration of the Contract of
Lease on 28 February 2006.17 It likewise demanded
payment of the sum of P420,967.28 in rental arrearages,
unpaid utility bills and other charges.18 Hertz, however,
refused to vacate the leased premises.19 As a result,
Optima was constrained to file before the MeTC a
Complaint for Unlawful Detainer and Damages with
Prayer for the Issuance of a TRO and/or Preliminary
Mandatory Injunction (Unlawful Detainer Complaint)
against Hertz.20
On 14 March 2006, Summons for the Unlawful Detainer
Complaint was served on Henry Bobiles, quality control
supervisor of Hertz, who complied with the telephone
instruction of manager Rudy Tirador to receive the
Summons.21
_______________
17 Id., at pp. 159-160; letter of Picazo Buyco Tan Fider & Santos dated
1 March 2006.
18 Id., at p. 160.
19 Id., at p. 117; Complaint (With Application for Temporary
Restraining Order and/or Preliminary Mandatory Injunction) dated 10
March 2006.
20 Id., at pp. 111-122.
21 Id., at p. 352; Sheriff s Return dated 15 March 2006.
322
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322
5/10/14, 7:15 AM

Inc.
On 28 March 2006, or 14 days after service of the
Summons, Hertz filed a Motion for Leave of Court to file
Answer with Counterclaim and to Admit Answer with
Counterclaim (Motion for Leave to File Answer).22 In that
Motion, Hertz stated that, in spite of the defective service
of summons, [it] opted to file the instant Answer with
Counterclaim with Leave of Court.23 In the same Motion,
it likewise prayed that, in the interest of substantial
justice, the Answer with Counterclaim attached to the
Motion for Leave to File Answer should be admitted
regardless of its belated filing, since the service of
summons was defective.24
On 22 May 2006, the MeTC rendered a Decision,25
ruling that petitioner Optima had established its right to
evict Hertz from the subject premises due to nonpayment of
rentals and the expiration of the period of lease.26 The
dispositive portion of the Decision reads:
WHEREFORE, premises considered, the Court hereby renders
judgment for the plaintiff and against the defendant, ordering:
1.the defendant corporation and all persons claiming rights from it to
immediately vacate the leased premises and to surrender
possession thereof to the plaintiff;
2. the defendant corporation to pay the plaintiff the amount of Four
Hundred Twenty Thousand Nine Hundred Sixty Seven Pesos and
28/100 (P420,967.28) representing its rentals arrearages and
utility charges for the period of August 2005 to February 2006,
deducting therefrom defendants security deposit;
3.the defendant corporation to pay the amount of Fifty Four
Thousand Two Hundred Pesos (P54,200.00) as a reasonable
monthly compensation for the use and occu_______________
22 Id., at pp. 175-177.
23 Id., at p. 176; Motion for Leave of Court to file Answer with
Counterclaim and to Admit Answer with Counterclaim.
24 Id.
25 Id., at pp. 205-209.
26 Id., at p. 208.
323
323

Inc.
pancy of the premises starting from March 2006 until
possession thereof is restored to the plaintiff; and
4.the defendant corporation to pay the amount of Thirty Thousand
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5/10/14, 7:15 AM
Pesos (P30,000.00) as and for attorneys fees; and

5.the cost of suit.
SO ORDERED.27
Hertz appealed the MeTCs Decision to the RTC.28

Finding no compelling reason to warrant the reversal of
the MeTCs Decision, the RTC affirmed it by dismissing the
appeal in a Decision29 dated 16 March 2007.
On 18 June 2007, the RTC denied respondents Motion
for Reconsideration of its assailed Decision.30
Hertz thereafter filed a verified Rule 42 Petition for
Review on Certiorari with the CA.31
On appeal, the CA ruled that, due to the improper
service of summons, the MeTC failed to acquire jurisdiction
over the person of respondent Hertz. The appellate court
thereafter reversed the RTC and remanded the case to the
MeTC to ensure the proper service of summons.
Accordingly, the CA issued its 17 March 2008 Decision, the
fallo of which reads:
WHEREFORE, premises considered, the May 22, 2006 Decision
of the Metropolitan Trial Court of Makati City, Branch 64, in Civil
Case No. 90842, and both the March 16, 2007 Decision, as well as
the June 18, 2007 Resolution, of the Regional Trial Court of Makati
City, Branch 137, in Civil Case No. 06-672, are hereby
REVERSED, ANNULLED and SET ASIDEdue to lack of
jurisdiction over the person of the defendant corporation HERTZ.
This case
_______________
27 Id., at pp. 208-209.
28 Id., at p. 210; Notice of Appeal dated 20 June 2006.
29 Id., at pp. 33-45.
30 Id., at pp. 47-49; Resolution dated 18 June 2007.
31 Id., at pp. 2-29; Petition dated 25 July 2007.
324
324

is hereby REMANDED to the Metropolitan Trial Court of Makati
City, Branch 64, in Civil Case No. 90842, which is DIRECTED to
ensure that its Sheriff properly serve summons to only those
persons listed in Sec. 11, Rule 14 of the Rules of Civil Procedure in
order that the MTC could acquire jurisdiction over the person of the
defendant corporation HERTZ.
SO ORDERED.32
Petitioners Motion for Reconsideration of the CAs

Decision was denied in a Resolution dated 20 May 2008.33
Aggrieved by the ruling of the appellate court, petitioner
then filed the instant Rule 45 Petition for Review on
Certiorari with this Court.34
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5/10/14, 7:15 AM
The Issues
As culled from the records, the following issues are
submitted for resolution by this Court:
1.Whether the MeTC properly acquired jurisdiction over
the person of respondent Hertz;
2.Whether the unlawful detainer case is barred by litis
pendentia; and
3.Whether the ejectment of Hertz and the award of
damages, attorneys fees and costs are proper.
The Courts Ruling
We grant the Petition and reverse the assailed Decision
and Resolution of the appellate court.
_______________
32 Rollo, pp. 47-48.
33 Id., at p. 38.
34 Id., at pp. 13-32; Petition for Review on Certiorari (Under Rule 45
of the Rules of Court) dated 27 June 2008.
325
325

Inc.
I
The MeTC acquired jurisdiction over the person
of respondent Hertz.
In civil cases, jurisdiction over the person of the
defendant may be acquired either by service of summons or
by the defendants voluntary appearance in court and
submission to its authority.35
In this case, the MeTC acquired jurisdiction over the
person of respondent Hertz by reason of the latters
voluntary appearance in court.
In Philippine Commercial International Bank v. Spouses
Dy,36 we had occasion to state:
Preliminarily, jurisdiction over the defendant in a civil case is
acquired either by the coercive power of legal processes exerted over his
person, or his voluntary appearance in court. As a general proposition,
one who seeks an affirmative relief is deemed to have submitted to the
jurisdiction of the court. It is by reason of this rule that we have had
occasion to declare that the filing of motions to admit answer, for
additional time to file answer, for reconsideration of a default judgment,
and to lift order of default with motion for reconsideration, is considered
voluntary submission to the courts jurisdiction. This, however, is
tempered by the concept of conditional appearance, such that a party
who makes a special appearance to challenge, among others, the courts
Page 7 of 12
5/10/14, 7:15 AM
jurisdiction over his person cannot be considered to have submitted to its

authority.
Prescinding from the foregoing, it is thus clear that:
(1)Special appearance operates as an exception to the general rule on
voluntary appearance;
(2)Accordingly, objections to the jurisdiction of the court over
the person of the defendant must be ex_______________
35 Santos v. National Labor Relations Commission, 325 Phil. 145; 254
SCRA 673, 681 (1996).
36 G.R. No. 171137, 5 June 2009, 588 SCRA 612, 627-628.
326
326

Inc.
plicitly made, i.e., set forth in an unequivocal manner; and
(3)Failure to do so constitutes voluntary submission to the
jurisdiction of the court, especially in instances where a
pleading or motion seeking affirmative relief is filed and
submitted to the court for resolution. (Emphases supplied)
In this case, the records show that the following

statement appeared in respondents Motion for Leave to
File Answer:
[I]n spite of the defective service of summons, the defendant
opted to file the instant Answer with Counterclaim with
Leave of Court, upon inquiring from the office of the clerk of court
of this Honorable Court and due to its notice of hearing on March
29, 2005 application for TRO/Preliminary Mandatory Injunction
was received on March 26, 2006. (Emphasis supplied)37
Furthermore, the Answer with Counterclaim filed by

Hertz never raised the defense of improper service of
summons. The defenses that it pleaded were limited to litis
pendentia, pari delicto, performance of its obligations and
lack of cause of action.38 Finally, it even asserted its own
counterclaim against Optima.39
Measured against the standards in Philippine
Commercial International Bank, these actions lead to no
other conclusion than that Hertz voluntarily appeared
before the court a quo.
We therefore rule that, by virtue of the voluntary
appearance of respondent Hertz before the MeTC, the trial
court acquired jurisdiction over respondents.
_______________
37 CA Rollo, p. 176.
38 Id., at pp. 178-185.
39 Id., at pp. 185-186.
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327
327

Inc.
II
The instant ejectment case is not barred
by litis pendentia.
Hertz contends that the instant case is barred by litis
pendentia because of the pendency of its Complaint for
Specific Performance against Optima before the RTC.
We disagree.
Litis pendentia requires the concurrence of the following
elements:
(1)Identity of parties, or at least their representation of
the same interests in both actions;
(2)dentity of rights asserted and reliefs prayed for, the
relief being founded on the same facts; and
(3)Identity with respect to the two preceding particulars
in the two cases, such that any judgment that may be
rendered in the pending case, regardless of which
party is successful, would amount to res judicata in
the other case.40
Here, while there is identity of parties in both cases, we
find that the rights asserted and the reliefs prayed for
under the Complaint for Specific Performance and those
under the present Unlawful Detainer Complaint are
different. As aptly found by the trial court:
[T]he Complaint for Specific Performance] seeks to compel
plaintiff-appellee Optima to: (1) renegotiate the contract of lease; (2)
reconnect the utilities at the leased premises; and (3) pay damages.
On the other hand, the unlawful detainer case sought the ejectment
of defendant-appellant Hertz from the leased premises and to
collect arrears in rentals and utility bills.41
_______________
40 Ssangyong Corp. v. Unimarine Shipping Lines, Inc., 512 Phil. 171;
475 SCRA 523 (2005).
41 CA Rollo, p. 43; RTC Decision dated 16 March 2007.
328
328

Inc.
As the rights asserted and the reliefs sought in the two
cases are different, we find that the pendency of the
Complaint for Specific Performance is not a bar to the
institution of the present case for ejectment.
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5/10/14, 7:15 AM
III
The eviction of respondent and the award of
damages, attorneys fees and costs were proper.
We find that the RTCs ruling upholding the ejectment of
Hertz from the building premises was proper. First,
respondent failed to pay rental arrearages and utility bills
to Optima; and, second, the Contract of Lease expired
without any request from Hertz for a renegotiation thereof
at least 90 days prior to its expiration.
On the first ground, the records show that Hertz failed
to pay rental arrearages and utility bills to Optima. Failure
to pay timely rentals and utility charges is an event of
default under the Contract of Lease,42 entitling the lessor
to terminate the lease.
Moreover, the failure of Hertz to pay timely rentals and
utility charges entitles the lessor to judicially eject it under
the provisions of the Civil Code.43
On the second ground, the records likewise show that
the lease had already expired on 28 February 2006 because
of Hertzs failure to request a renegotiation at least 90 days
prior to the termination of the lease period.
The pertinent provision of the Contract of Lease reads:
x x x. The lease can be renewed only by a new negotiation between
the parties upon written notice by the LESSEE to be given to the
_______________
42 Id., at p. 93; Contract of Lease dated 12 December 2002.
43 Civil Code, Art. 1673 (2).
329
329

LESSOR at least 90 days prior to termination of the above lease
period.44
As the lease was set to expire on 28 February 2006,

Hertz had until 30 November 2005 within which to express
its interest in negotiating an extension of the lease with
Optima. However, Hertz failed to communicate its
intention to negotiate for an extension of the lease within
the time agreed upon by the parties. Thus, by its own
provisions, the Contract of Lease expired on 28 February
2006.
Under the Civil Code, the expiry of the period agreed
upon by the parties is likewise a ground for judicial
ejectment.45
As to the award of monthly compensation, we find that
Hertz should pay adequate compensation to Optima, since
the former continued to occupy the leased premises even
after the expiration of the lease contract. As the lease price
during the effectivity of the lease contract was P54,200 per
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5/10/14, 7:15 AM
month, we find it to be a reasonable award.

Finally, we uphold the award of attorneys fees in the
amount of P30,000 and judicial costs in the light of Hertzs
unjustifiable and unlawful retention of the leased premises,
thus forcing Optima to file the instant case in order to
protect its rights and interest.
From the foregoing, we find that the MeTC committed
no reversible error in its 22 May 2006 Decision, and that
the RTC committed no reversible error either in affirming
the MeTCs Decision.
WHEREFORE, in view of the foregoing, the instant Rule
45 Petition for Review is GRANTED. The assailed Decision
and Resolution of the Court of Appeals in CA-G.R. SP No.
99890 are hereby REVERSED and SET ASIDE. The
Decision of the Regional Trial Court, Branch 137, Makati
City in Civil
_______________
44 CA Rollo, p. 86; Contract of Lease dated 12 December 2002.
45 CIVIL CODE, Art. 1673 (1).
330
330

Inc.
Case No. 06-672 affirming in toto the Decision of the
Metropolitan Trial Court, Branch 64, Makati City in Civil
Case No. 90842 is hereby REINSTATED and AFFIRMED.
SO ORDERED.
Leonardo-De Castro, Bersamin, Villarama, Jr. and
Reyes, JJ., concur.
Petition granted, judgment and resolution reversed and
set aside.
Notes.The issue of jurisdiction over the person of the
defendant must be seasonably raised. (Atiko Trans, Inc. vs.
Prudential Guarantee and Assurance, Inc., 655 SCRA 625
[2011])
A person who was not impleaded in the complaint cannot
be bound by the decision rendered therein, for no man shall
be affected by a proceeding in which he is a stranger.
(Garcia vs. Garcia, 660 SCRA 1 [2011])
o0o
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SUPREME COURT REPORTS ANNOTATED VOLUME 688

G.R. No. 183035.January 9, 2013.*

OPTIMA REALTY CORPORATION, petitioner, vs. HERTZ

SUPREME COURT REPORTS ANNOTATED