G.R. Nos.

163972-77 March 28, 2008

JOSELITO RANIERO J. DAAN, Petitioner,

vs.
THE HON. SANDIGANBAYAN Respondent.

DECISION

AUSTRIA-MARTINEZ, J.:

Joselito Raniero J. Daan (petitioner), one of the accused in Criminal Cases Nos. 24167-24170,
24195-24196,1questions the denial by the Sandiganbayan of his plea bargaining proposal.

The antecedents facts are laid down by Sandiganbayan in its Resolution dated March 25, 2004, as
follows:

Said accused,2 together with accused Benedicto E. Kuizon, were charged before this Court for three
counts of malversation of public funds involving the sums of 3,293.00, 1,869.00, and 13,528.00,
respectively, which they purportedly tried to conceal by falsifying the time book and payrolls for given
period making it appear that some laborers worked on the construction of the new municipal hall
building of Bato, Leyte and collected their respective salaries thereon when, in truth and in fact, they
did not. Thus, in addition to the charge for malversation, the accused were also indicted before this
Court for three counts of falsification of public document by a public officer or employee.

In the falsification cases, the accused offered to withdraw their plea of "not guilty" and substitute the
same with a plea of "guilty", provided, the mitigating circumstances of confession or plea of guilt and
voluntary surrender will be appreciated in their favor. In the alternative, if such proposal is not
acceptable, said accused proposed instead to substitute their plea of "not guilty" to the crime of
falsification of public document by a public officer or employee with a plea of "guilty", but to the
lesser crime of falsification of a public document by a private individual. On the other hand, in the
malversation cases, the accused offered to substitute their plea of "not guilty" thereto with a plea of
"guilty", but to the lesser crime of failure of an accountable officer to render accounts.

Insofar as the falsification cases are concerned, the prosecution found as acceptable the proposal of
the accused to plead "guilty" to the lesser crime of falsification of public document by a private
individual. The prosecution explained:

"With respect to the falsification cases earlier mentioned, it appears that the act of the accused in
pleading guilty for a lesser offense of falsification by a private individual defined and penalized under
Article 172 of the Revised Penal code will strengthen our cases against the principal accused,
Municipal Mayor Benedicto Kuizon, who appears to be the master mind of these criminal acts."

Insofar as the malversation cases are concerned, the prosecution was likewise amenable to the offer
of said accused to plead "guilty" to the lesser crime of failure of an accountable officer to render
accounts because:

"x x x JOSELITO RANIERO J. DAAN has already restituted the total amount of 18,860.00 as per
official receipt issued by the provincial government of Leyte dated February 26, 2002. In short, the
damage caused to the government has already been restituted x x x.3
The Sandiganbayan, in the herein assailed Resolution,4 dated March 25, 2004, denied petitioners
Motion to Plea Bargain, despite favorable recommendation by the prosecution, on the main ground
that no cogent reason was presented to justify its approval.5

The Sandiganbayan likewise denied petitioner's Motion for Reconsideration in a Resolution dated
May 31, 2004.

This compelled petitioner to file the present case for certiorari and prohibition with prayer for the
issuance of a temporary restraining order and/ or writ of preliminary injunction under Rule 65 of the
Rules of Court.

Petitioner argues that the Sandiganbayan committed grave abuse of discretion in denying his plea
bargaining offer on the following grounds: first, petitioner is not an accountable officer and he merely
affixed his signature on the payrolls on a "routinary basis," negating any criminal intent; and that the
amount involved is only 18,860.00, which he already restituted.6

The petition is meritorious.

Plea bargaining in criminal cases is a process whereby the accused and the prosecution work out a
mutually satisfactory disposition of the case subject to court approval. It usually involves the
defendant's pleading guilty to a lesser offense or to only one or some of the counts of a multi-count
indictment in return for a lighter sentence than that for the graver charge.7

Plea bargaining is authorized under Section 2, Rule 116 of the Revised Rules of Criminal Procedure,
to wit:

SEC. 2. Plea of guilty to a lesser offense. At arraignment, the accused, with the consent of the
offended party and the prosecutor, may be allowed by the trial court to plead guilty to a lesser
offense which is necessarily included in the offense charged. After arraignment but before trial, the
accused may still be allowed to plead guilty to said lesser offense after withdrawing his plea of not
guilty. No amendment of the complaint or information is necessary. (sec. 4, cir. 38-98)

Ordinarily, plea bargaining is made during the pre-trial stage of the proceedings. Sections 1 and 2,
Rule 118 of the Rules of Court, require plea bargaining to be considered by the trial court at the pre-
trial conference,8 viz:

SEC. 1. Pre-trial; mandatory in criminal cases. In all criminal cases cognizable by

the Sandiganbayan, Regional Trial Court, Metropolitan Trial Court, Municipal Trial Court in Cities,
Municipal Trial Court and Municipal Circuit Trial Court, the court shall, after arraignment and within
thirty (30) days from the date the court acquires jurisdiction over the person of the accused, unless a
shorter period is provided for in special laws or circulars of the Supreme Court, order a pre-trial
conference to consider the following:

(a) plea bargaining;

(b) stipulation of facts;

(c) marking for identification of evidence of the parties;

(d) waiver of objections to admissibility of evidence;

 (e) modification of the order of trial if the accused admits the charge but interposes a lawful
defense; and

(f) such matters as will promote a fair and expeditious trial of the criminal and civil aspects of
the case.

SEC. 2. Pre-trial agreement. All agreements or admissions made or entered during the pre-trial
conference shall be reduced in writing and signed by the accused and counsel, otherwise, they
cannot be used against the accused. The agreements covering the matters referred to in section 1 of
this Rule shall be approved by the court. (Emphasis supplied)

But it may also be made during the trial proper and even after the prosecution has finished
presenting its evidence and rested its case. Thus, the Court has held that it is immaterial that plea
bargaining was not made during the pre-trial stage or that it was made only after the prosecution
already presented several witnesses.9

Section 2, Rule 116 of the Rules of Court presents the basic requisites upon which plea bargaining
may be made, i.e., that it should be with the consent of the offended party and the prosecutor,10 and
that the plea of guilt should be to a lesser offense which is necessarily included in the offense
charged. The rules however use word may in the second sentence of Section 2, denoting an
exercise of discretion upon the trial court on whether to allow the accused to make such plea.11 Trial
courts are exhorted to keep in mind that a plea of guilty for a lighter offense than that actually
charged is not supposed to be allowed as a matter of bargaining or compromise for the convenience
of the accused.12

In People of the Philippines v. Villarama,13 the Court ruled that the acceptance of an offer to plead
guilty to a lesser offense is not demandable by the accused as a matter of right but is a matter that is
addressed entirely to the sound discretion of the trial court,14 viz:

x x x In such situation, jurisprudence has provided the trial court and the Office of the Prosecutor
with a yardstick within which their discretion may be properly exercised. Thus, in People v.
Kayanan (L-39355, May 31, 1978, 83 SCRA 437, 450), We held that the rules allow such a plea only
when the prosecution does not have sufficient evidence to establish the guilt of the crime charged. In
his concurring opinion in People v. Parohinog (G.R. No. L-47462, February 28, 1980, 96 SCRA 373,
377), then Justice Antonio Barredo explained clearly and tersely the rationale or the law:

x x x (A)fter the prosecution had already rested, the only basis on which the fiscal and the court
could rightfully act in allowing the appellant to change his former plea of not guilty to murder to guilty
to the lesser crime of homicide could be nothing more nothing less than the evidence already in the
record. The reason for this being that Section 4 of Rule 118 (now Section 2, Rule 116) under which a
plea for a lesser offense is allowed was not and could not have been intended as a procedure for
compromise, much less bargaining.15 (Emphasis supplied)

However, Villarama involved plea bargaining after the prosecution had already rested its case.

As regards plea bargaining during the pre-trial stage, as in the present case, the trial court's exercise
of its discretion should neither be arbitrary nor should it amount to a capricious and whimsical
exercise of discretion. Grave abuse of discretion implies such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction or, in other words, where the power is exercised in an
arbitrary manner by reason of passion, prejudice, or personal hostility; and it must be so patent or
gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty
enjoined by law, or to act at all in contemplation of law.16
In the present case, the Sandiganbayan rejected petitioner's plea offer on the ground that petitioner
and the prosecution failed to demonstrate that the proposal would redound to the benefit of the
public. The Sandiganbayanbelieves that approving the proposal would "only serve to trivialize the
seriousness of the charges against them and send the wrong signal to potential grafters in public
office that the penalties they are likely to face would be lighter than what their criminal acts would
have merited or that the economic benefits they are likely to derive from their criminal activities far
outweigh the risks they face in committing them; thus, setting to naught the deterrent value of the
laws intended to curb graft and corruption in government."17 1avv phi 1

Apparently, the Sandiganbayan has proffered valid reasons in rejecting petitioner's plea offer.
However, subsequent events and higher interests of justice and fair play dictate that petitioner's plea
offer should be accepted. The present case calls for the judicious exercise of this Court's equity
jurisdiction -

Equity as the complement of legal jurisdiction seeks to reach and do complete justice where courts
of law, through the inflexibility of their rules and want of power to adapt their judgments to the special
circumstances of cases, are incompetent so to do. Equity regards the spirit of and not the letter, the
intent and not the form, the substance rather than the circumstance, as it is variously expressed by
different courts.18

and of its power of control and supervision over the proceedings of lower courts,19 in order to afford
equal justice to petitioner.

In People of the Philippines v. Estrada,20 the Sandiganbayan, in its Resolution dated March 14,
2007, approved the Plea Bargaining Agreement entered into by the prosecution and one of the
accused, Charlie "Atong" Ang. The agreement provided that the accused undertakes to assist in the
prosecution of the case and promises to return the amount of 25,000,000.00. In approving the Plea
Bargaining Agreement, the Sandiganbayan took into consideration the timeliness of the plea
bargaining and whether the agreement complied with the requirements of Section 2, Rule 116 of the
Rules of Court. The Sandigabayan noted that the accused had already withdrawn his earlier plea of
"not guilty"; and that the prosecution consented to the plea of guilt to a lesser offense; and the lesser
offense, which is Corruption of Public Officials in relation to Indirect Bribery, is necessarily included
in the offense charged, which is Plunder.21

The Court sees no reason why the standards applied by the Sandiganbayan to Estrada should not
be applied to the present case. Records show that there was a favorable recommendation by the
Office of the Special Prosecutor to approve petitioner's motion to plea bargain. Thus, in its
Memorandum dated August 16, 2002, the Office of the Special Prosecutor rationalized:

In the cases at bar, there is no dispute that JOSELITO RANIERO J. DAAN has already restituted the
total amount of 18,860.00 as per official receipt issued by the provincial government of Leyte dated
February 26, 2002. In short, the damage caused to the government has already been restituted by
the accused.

There is also no dispute that accused DAAN voluntarily surrendered in the instant cases. Moreover,
the accused is also willing to plead guilty to a lesser offense which to our mind, merits consideration.

With respect to the falsification cases earlier mentioned, it appears that the act of the accused in
pleading guilty for a lesser offense of falsification by private individual defined and penalized under
Article 172 of the Revised Penal Code will strengthen our cases against the principal accused, the
Municipal Mayor Benedicto Kuizon, who appears to be the master mind of these criminal acts. After
all, the movants herein JOSELITO RANIERO J. DAAN was merely designated as draftsman detailed
as foreman/timekeeper of the Municipality of Bato, Leyte.22

Moreover, the lesser offenses of Falsification by Private Individuals and Failure to Render Account
by an Accountable Officer are necessarily included in the crimes of Falsification of Public Documents
and Malversation of Public Funds, respectively, with which petitioner was originally charged.

Under Article 171, paragraph 4 of the Revised Penal Code, for the crime of Falsification of Public
Documents through an untruthful narration of facts to be established, the following elements must
concur: (a) the offender makes in a document untruthful statements in a narration of facts; (b) the
offender has a legal obligation to disclose the truth of the facts narrated; (c) the facts narrated by the
offender are absolutely false; and (d) the perversion of truth in the narration of facts was made with
the wrongful intent of injuring a third person.23

On the other hand, Falsification by Private Individuals penalized under Article 172, paragraph 1 of
the Revised Penal Code has the following elements: (a) the offender is a private individual or a
public officer or employee who did not take advantage of his official position; (b) the offender
committed any of the acts of falsification enumerated under Article 171 of the Revised Penal Code;
and (c) the falsification was committed in a public or official or commercial document.24

As regards the crime of Malversation of Public Funds defined and penalized under Article 217 of the
Revised Penal Code, with which petitioner was also charged, the elements are as follows: (a) the
offender is a public officer; (b) he has custody or control of funds or property by reason of the duties
of his office; (c) the funds or property involved are public funds or property for which he is
accountable; and (d) he has appropriated, taken or misappropriated, or has consented to, or through
abandonment or negligence permitted, the taking by another person of such funds or
property.25 Article 217 also provides that the failure of the public officer to have duly forthcoming
such public funds or property, upon demand by a duly authorized officer, "shall be prima
facie evidence that he has put such missing funds or property to personal use." In this regard, it has
been ruled that once such presumption is rebutted, then it is completely destroyed; in fact, the
presumption is never deemed to have existed at all.26

Meanwhile, under Article 218 of the Revised Penal Code, Failure to Render Account by an
Accountable Officer, the lesser offense which petitioner seeks to plead guilty of, the following
elements must concur: (a) the offender is a public officer; (b) the offender must be an accountable
officer for public funds or property; (c) the offender is required by law or regulation to render
accounts to the COA or to a provincial auditor; and (d) the offender fails to render an account for a
period of two months after such accounts should be rendered.27

Section 5, Rule 120 of the Rules of Court states when an offense includes or is included in the other,
to wit:

SEC. 5. When an offense includes or is included in another. An offense charged necessarily

includes the offense proved when some of the essential elements or ingredients of the former, as
alleged in the complaint or information, constitute the latter. And an offense charged is necessarily
included in the offense proved, when the essential ingredients of the former constitute or form part of
those constituting the latter.

An offense may be said to necessarily include another when some of the essential elements or
ingredients of the former as alleged in the complaint or information constitute the latter. And
vice versa, an offense may be said to be necessarily included in another when the essential
ingredients of the former constitute or form part of those constituting the latter.28
In this case, the allegations in the Informations filed against petitioner are sufficient to hold petitioner
liable for the lesser offenses. Thus, in the charge for Falsification of Public Documents, petitioner
may plead guilty to the lesser offense of Falsification by Private Individuals inasmuch as it does not
appear that petitioner took advantage of his official position in allegedly falsifying the timebook and
payroll of the Municipality of Bato, Leyte. In the same vein, with regard to the crime of Malversation
of Public Funds, while the Informations contain allegations which make out a case for Malversation
against petitioner, nevertheless, absent the element of conversion, theoretically, petitioner may still
be held liable for Failure to Render Account by an Accountable Officer if it is shown that the failure to
render account was in violation of a law or regulation that requires him to render such an accounting
within the prescribed period.

Given, therefore, that some of the essential elements of offenses charged in this case likewise
constitute the lesser offenses, then petitioner may plead guilty to such lesser offenses.

Finally, as propounded by petitioner, indeed, he is not an accountable officer in that the nature of his
duty as foreman/timekeeper does not permit or require possession or custody of local government
funds,29 not to mention that petitioner has already restituted the amount of 18,860.00 involved in
this case. Unlike Estrada which involves a crime punishable by reclusion perpetua to death,30 and a
whopping 25,000,000.00 taken from the public coffers, this case tremendously pales in
comparison.

Under the peculiar circumstances of the present case, where gross inequity will result in a
discriminatory dispensation of justice, the Court will not hesitate to intervene in order to equalize the
imbalance.

WHEREFORE, the petition is GRANTED. The Resolutions dated March 25, 2004 and May 31, 2004
are SETASIDE. The Sandiganbayan is hereby ORDERED to grant petitioner's Motion to Plea
Bargain. Let records of this case be REMANDED to the Sandiganbayan for further proceedings in
accordance with this Decision.

SO ORDERED.
G.R. No. 192893 June 5, 2013

MANILA ELECTRIC COMPANY, Petitioner,

vs.
HEIRS OF SPOUSES DIONISIO DELOY and PRAXEDES MARTONITO, represented by
POLICARPIO DELOY,Respondents.

DECISION

MENDOZA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking the
reversal of the November 9, 2009 Decision' and the July 5, 2010 Resolution2 of the Court of Appeals
(CA), in CA-G.R. SP No. 96998. The challenged decision set aside the May 4, 2006 Resolution3 and
the September 27, 2006 Order4 of the Regional Trial Court, Trece Martires City, Branch 23 (RTC),
which affirmed the dismissal of an unlawful detainer case by the Municipal Trial Court in Cities of
Trece Martires City (MTCC).

The Facts

On July 8, 2003, Domingo Deloy, Maria Deloy-Masicap, Zosimo Deloy, Mario Deloy, Silveria Deloy-
Mabiling, Norma Deloy, Milagros Panganiban, Lino Deloy, Cornelio Deloy, Maricel Deloy, Adelina
Banta, Rogelio Deloy, Evelyn Deloy, Edgardo Deloy, Cynthia Deloy, Donnabel Deloy, Glenda Deloy,
Arnel Deloy, Ronnio Deloy, Isagani L. Reyes, and Policarpio Deloy (respondents), all heirs of
Spouses Dionisio Deloy (Dionisio) and Praxedes Martonito-Deloy, represented by Policarpio Deloy,
instituted the Complaint for Unlawful Detainer5 against Manila Electric Company (MERALCO) before
the MTCC.

Respondents are the owners, by way of succession, of a parcel of land consisting of 8,550 square
meters located in Trece Martires City (Trece Martires property). On November 12, 1965, Dionisio,
respondents predecessor-in-interest, donated a 680-square meter portion (subject land) of the
8,550 square meter property to the Communications and Electricity Development Authority (CEDA)
for the latter to provide cheap and affordable electric supply to the province of Cavite. A deed of
donation6 was executed to reflect and formalize the transfer.

Sometime in 1985, CEDA offered for sale to MERALCO, its electric distribution system, consisting of
transformers and accessories, poles and hardware, wires, service drops, and customer meters and
all rights and privileges necessary for providing electrical service in Cavite. This was embodied in a
memorandum of agreement (MOA),7dated June 28, 1985, signed by the parties.

On the same date, June 28, 1985, after the approval of the MOA, CEDA and MERALCO executed
the Deed of Absolute Sale. Thereafter, MERALCO occupied the subject land.

On October 11, 1985, MERALCO, through its Assistant Vice President and Head of the Legal
Department, Atty. L.D. Torres (Atty. Torres), wrote a letter8 to Dionisio requesting the latters
permission for the continued use of the subject land as a substation site.

The parties were not able to reach any agreement. In an internal memorandum,9 dated December
16, 1985, from L.G. De La Paz of the Trece Martires Substation of MERALCO to Atty. G.R.
Gonzales and Atty. Torres of the Realty Division of MERALCO, it was stated that the death of
Dionisio, the lack of agreement yet among the heirs, and a request that a member of the Deloy
family be employed by MERALCO were some of the reasons.

Meanwhile, respondents claimed that they had no immediate use for the subject land and that they
were preoccupied with the judicial proceedings to rectify errors involving the reconstituted title of the
Trece Martires property, which included the subject land. On November 22, 2001, the proceedings
were terminated and the decision became final.10 Not long after,respondents offered to sell the
subject land to MERALCO, but their offer was rejected.

For said reason, in their letter,11 dated May 19, 2013, respondents demanded that MERALCO vacate
the subject land on or before June 15, 2003. Despite the written demand, MERALCO did not move
out of the subject land. Thus, on July 8, 2003, respondents were constrained to file the complaint for
unlawful detainer.

Traversing respondents complaint, MERALCO countered that CEDA, as the owner of the subject
land by virtue of the deed of donation executed by Dionisio, lawfully sold to it all rights necessary for
the operation of the electric service in Cavite by way of a deed of sale on June 28, 1985.

MERALCO stressed that the condition of providing affordable electricity to the people of
Cavite,12 imposed in the deed of donation between Dionisio and CEDA, was still being observed and
complied with. Thus, MERALCO claimed that, being CEDAs successor-in-interest, it had legal
justification to occupy the subject land.

On September 15, 2005, the MTCC rendered the decision13 dismissing respondents complaint for
unlawful detainer against MERALCO.

The MTCC ruled that it had no jurisdiction over the case because it would require an interpretation of
the deed of donation making it one not capable of pecuniary estimation. Nevertheless, it opined that
MERALCO was entitled to the possession of the subject land. It was of the view that it would only be
when the deed of donation would be revoked or the deed of sale nullified that MERALCOs
possession of the subject land would become unlawful.

Aggrieved, respondents appealed the MTCC ruling to the RTC. In its May 4, 2006 Resolution, the
RTC sustained the MTCC decision.

The RTC pointed out that the only issue in an unlawful detainer case was possession. It affirmed the
MTCC ruling that the latter had no jurisdiction to interpret contracts involving the sale of the subject
land to MERALCO, after the latter raised the issue of ownership of the subject land. According to the
RTC, the interpretation of the deed of sale and the deed of donation was the main, not merely
incidental, issue.

Respondents moved for reconsideration but their motion was denied by the RTC in its September
27, 2006 Order.

Not satisfied with the adverse ruling, respondents elevated the case before the CA via a petition for
review under Rule 42 of the Rules of Court.

In its November 9, 2001 Decision, the CA set aside the RTC ruling.

The fallo of the decision reads:

WHEREFORE, the instant Petition is GRANTED. The assailed Resolution, dated May 4, 2006, and
Order, dated September 27, 2006, both of the Regional Trial Court of Trece Martires City, Branch
23, in Civil Case No. TMCV-0055005, are hereby SET ASIDE and a new one rendered partially
granting Petitioners Complaint for Unlawful Detainer against Respondent. Accordingly, Respondent
is ordered to vacate the subject property and to pay Petitioners the amount of 50,0000.00 monthly
rental counting from June 16, 2003, up to the time Respondent shall have fully vacated the subject
property, and 25,000.00 as attorneys fees. Costs against Respondent.

SO ORDERED.14

In partially granting the appeal, the CA explained that an ejectment case, based on the allegation of
possession by tolerance, would fall under the category of unlawful detainer. Unlawful detainer
involved the persons withholding from another of the possession of real property to which the latter
was entitled, after the expiration or termination of the formers right to hold possession under a
contract, either express or implied. Where the plaintiff allowed the defendant to use his/her property
by tolerance without any contract, the defendant was necessarily bound by an implied promise that
he/she would vacate on demand, failing which, an action for unlawful detainer would lie.

As to the issue of possession, the CA stated that by seeking Dionisios permission to continuously
occupy the subject land, MERALCO expressly acknowledged his paramount right of possession.
MERALCO, thru its representative, Atty. Torres, would not have asked permission from Dionisio if it
had an unconditional or superior right to possess the subject land. The CA considered the fact that
this recognition of Dionisios right over the subject land was amplified by another letter, dated
December 16, 1985,15 by one L.G. De la Paz to Atty. Torres, expressly declaring Dionisio as the
owner of the subject land. MERALCO never disputed the declarations contained in these letters.
Neither did it claim that the same was made through palpable mistake. Indeed, Meralco even
marked these letters as documentary exhibits. Pursuant to Section 26, Rule 130 of the Rules of
Evidence, these admissions and/or declarations may be admitted against Meralco.

MERALCO moved for reconsideration but its motion was denied by the CA in its July 5, 2010
Resolution.

Hence, this petition for review.

ISSUES

WHETHER OR NOT THE COMPLAINT STATES A CAUSE OF ACTION FOR UNLAWFUL

DETAINER.

II

WHETHER OR NOT EVIDENCE ALIUNDE, SUCH AS THE LETTERS DATED 11 OCTOBER 1985
OF PETITIONERS ASSISTANT VICE PRESIDENT AND HEAD OF LEGAL DEPARTMENT, L.D.
TORRES AND INTERNAL MEMORANDUM DATED 6 DECEMBER 1985 OF PETITIONERS L.G.
DELA PAZ WHICH PURPORTEDLY RECOGNIZED RESPONDENTS OWNERSHIP OF THE
PROPERTY CAN PREVAIL OVER THE DEED OF ABSOLUTE SALE.

III
WHETHER OR NOT TITLE TO THE PROPERTY DONATED TO CEDA WAS VALIDLY
TRANSFERRED TO THE PETITIONER.

IV

WHETHER OR NOT THE SALE OF THE PROPERTY TO THE PETITIONER VIOLATED OR

REVOKED THE DONATION TO CEDA.

WHETHER OR NOT THE COMPLAINT WAS BARRED BY PRESCRIPTION AND LACHES.16

Simply put, the vital issues for the Courts consideration are: (1) whether an action for unlawful
detainer is the proper remedy in this case; and (2) if it is, who has a better right of physical
possession of the disputed property.

In presenting its case before the Court, MERALCO argues that respondents complaint before the
MTCC failed to state a cause of action for unlawful detainer, but for one incapable of pecuniary
estimation, because the issue of physical possession is inextricably linked with the proper
interpretation of the deed of donation executed between Dionisio and CEDA. Thus, the MTCC was
without jurisdiction to hear and decide the case. Further, MERALCO avers that it validly acquired title
to the subject land by virtue of the deed of sale executed by CEDA in its favor on June 28, 1985. As
a consequence, MERALCO contends that extrinsic or extraneous evidence, such as the letters,
dated October 11, 1985 and December 6, 1985, cannot contradict the terms of the deed of sale
between CEDA and MERALCO pursuant to Section 9, Rule 13017 of the Rules of Court.

The Courts Ruling

The petition lacks merit.

Unlawful detainer is an action to recover possession of real property from one who illegally withholds
possession after the expiration or termination of his right to hold possession under any contract,
express or implied. The possession of the defendant in unlawful detainer is originally legal but
became illegal due to the expiration or termination of the right to possess.18 The only issue to be
resolved in an unlawful detainer case is physical or material possession of the property involved,
independent of any claim of ownership by any of the parties involved.19

An ejectment case, based on the allegation of possession by tolerance, falls under the category of
unlawful detainer. Where the plaintiff allows the defendant to use his/her property by tolerance
without any contract, the defendant is necessarily bound by an implied promise that he/she will
vacate on demand, failing which, an action for unlawful detainer will lie.20

Jurisdiction of the MTCC

MERALCO contends that respondents complaint failed to make out a case for unlawful detainer but,
rather, one incapable of pecuniary estimation, properly cognizable by the RTC and not the MTCC. It
stresses the allegations in the complaint involve a prior determination on the issue of ownership
before the issue of possession can be validly resolved.

This contention fails to persuade.

When the issue of ownership is raised in an ejectment case, the first level courts are not ipso facto
divested of its jurisdiction. Section 33 (2) of Batas Pambansa (B.P.) Blg. 129, as amended by
Republic Act (R.A.) No. 7691,21provides:

Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts in Civil Cases. Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts shall exercise:

xxxx

(2) Exclusive original jurisdiction over cases of forcible entry and unlawful detainer: Provided, That
when, in such cases, the defendant raises the question of ownership in his pleadings and the
question of possession cannot be resolved without deciding the issue of ownership, the issue of
ownership shall be resolved only to determine the issue of possession. [Underscoring supplied.]

xxxx

In this regard, Section 16, Rule 70 of the Rules of Court allows the first level courts, in ejectment
cases, to provisionally determine the issue of ownership for the sole purpose of resolving the issue
of physical possession.

Sec. 16. Resolving defense of ownership.When the defendant raises the defense of ownership in
his pleadings and the question of possession cannot be resolved without deciding the issue of
ownership, the issue of ownership shall be resolved only to determine the issue of possession.

Accordingly, it is unquestionably clear that the first level courts are clothed with the power to
preliminarily resolve questions on the ownership of real property, if necessary, to arrive at the proper
and complete determination of the question on physical possession or possession de facto. Thus, as
correctly ruled by the CA, the MTCC should have taken cognizance of the complaint as it was well
within its jurisdiction to do so. Moreover, considering that B.P. Blg. 129, as amended, has distinctly
defined and granted the MTCC with jurisdiction, it is the trial courts duty and obligation to exercise
the same when properly invoked.

Right of Possession

As earlier stated, on the issue of possession, the CA opined that by seeking Dionisios permission to
occupy the subject land, MERALCO expressly acknowledged his paramount right of possession.

MERALCO posits that extrinsic evidence, such as the letter request, dated October 11, 1985, and
the Internal Memorandum, dated December 6, 1985, cannot contradict the terms of the deed of sale
between CEDA and MERALCO pursuant to Section 9, Rule 13022 of the Rules of Court.

The Court has combed the records and is not convinced.

It is undisputed that on October 11, 1985 or four (4) months after the approval of the MOA and the
corresponding Deed of Absolute Sale, MERALCO, through its Assistant Vice President and Head of
the Legal Department, Atty. Torres , sent a letter to Dionisio seeking his permission for the continued
use of the subject land. The letter reads:

Mr. Dionisio Deloy

Trece Martires City 2724

Province of Cavite

Dear Mr. Deloy:

This has reference to the Deed of Donation (Inter-vivos) executed on November 12, 1965 between
Communications and Electricity Development Authority (CEDA) and Dionisio D(e)loy for a 680-
square meter of land used as a substation site adjacent to A.B. Memorial Hospital x x x.

In compliance with the franchise Nationalization program of the National Government, we wish to
inform you that Meralco had taken over the electric operations in the province of Cavite being served
by CEDA.

In view of this recent development, may we respectfully request you to please allow Manila Electric
Company (Meralco) to continue the use of the above-mentioned portion of land as a substation site,
subject to the terms and conditions which we may mutually agree upon.

In the interest of public service, we shall highly appreciate your kind cooperation on this matter and
awaiting your reply.

Very truly yours,

[Signed]

L. D. TORRES

Assistant Vice-President

& Head, Legal Department23

[Underscoring supplied]

Relative thereto, L.G. De La Paz of the Trece Martires Substation of MERALCO sent the December
16, 1985 Internal Memorandum, addressed to Atty. G.R. Gonzales and Atty. Torres, informing them
of some obstacles in reaching a lease agreement with the Deloys. The Internal Memorandum reads:

ATTY. G.R. GONZALES

ATTY. L.D. TORRES TRECE MARTIRES SUBTATION

REALTY SERVICES

DECEMBER 16, 1985

This refers to the proposed contract of lease with Mr. Dionisio Deloy, co-owner of the lot wherein the
Trece Martires Substation is located.

Mr. Deloy had donated the use of 680-sq. m. portion of his co-owned land for CEDAs substation in
Trece Martires in 1966. Copy of the Donation is enclosed. On October 11, 1985, the company
informed him through its letter of its intention of continuing with the use of the property as a result of
its acquisition of CEDAs franchise. He agreed to the request and proposed rental would be free
provided one of his sons/grandsons would be employed by Meralco. Governor Remulla had
favorably recommended Lino Deloy, one of his grandsons, for a position in the company. A son, Mr.
Policarpio Deloy, former CEDA employee, had passed Meralcos entrance examination. According
to PAD, his application papers were being processed by the Branch Services Department.

It was unfortunate that when we went to see him on December 6, 1985, to finalize the Contract of
Lease, the man was already dead. His body laid at state in his residence. He died on December 5,
1985. As it was not proper to discuss things with the family, we asked the wife when the family would
be available. She suggested that we should come back on December 21, 1985. On that day, all the
members of the family would be free to confer with us.

There are some problems that may come up with the death of Mr. Deloy. These are:

1. the settlement of his estate among his heirs

2. the desire to have more members of the family to be employed in Meralco

3. the rent free use of the substation may not push through

4. the proper signatories in the contract of lease to be drawn

We do hope whatever the problem may be, we will be able to work it out.

For your information.

[Signed]

L.G. DE LA PAZ

x x x x.

Evidently, by these two documents, MERALCO acknowledged that the owners of the subject land
were the Deloys. It is clear as daylight. The first letter was written barely four (4) months after the
deed of sale was accomplished. As observed by the CA, MERALCO never disputed the declarations
contained in these letters which were even marked as its own exhibits. Pursuant to Section 26, Rule
130 of the Rules of Evidence, these admissions and/or declarations are admissible against
MERALCO.

SEC. 26. Admissions of a party The act, declaration, or omission of a party as to a relevant fact
may be given in evidence against him.

In Heirs of Bernardo Ulep v. Ducat,24 it was written, thus:

x x x Being an admission against interest, the documents are the best evidence which affords the
greatest certainty of the facts in dispute. The rationale for the rule is based on the presumption that
no man would declare anything against himself unless such declaration was true. Thus, it is fair to
presume that the declaration corresponds with the truth, and it is his fault if it does not.
Guided by the foregoing rules and jurisprudence, the Court holds that the letter and the internal
memorandum presented, offered and properly admitted as part of the evidence on record by
MERALCO itself, constitute an admission against its own interest. Hence, MERALCO should
appropriately be bound by the contents of the documents. 1w phi 1

Nevertheless, in this petition, MERALCO insists that extrinsic evidence, such as the two documents,
even if these were their own, cannot contradict the terms of the deed of sale between CEDA and
MERALCO pursuant to Section 9, Rule 13025 of the Rules of Court.

The Court has read the MOA and the Deed of Absolute Sale but found nothing that clearly stated
that the subject land was included therein. What were sold, transferred and conveyed were "its
electric distribution facilities, service drops, and customers' electric meters except those owned by
the VENDOR'S customers, x x x, and all the rights and privileges necessary for the operation of the
electric service x x x."26 No mention was made of any land. Rights and privileges could only refer to
franchises, permits and authorizations necessary for the operation of the electric service. The land
on which the substation was erected was not included, otherwise, it would have been so stated in
the two documents. Otherwise, also, MERALCO would not have written Dionisio to ask permission
for the continued use of the subject land.

At any rate, it is fundamental that a certificate of title serves as evidence of an indefeasible and
incontrovertible title to the property in favor of the person whose name appears therein. It bears to
emphasize that the titleholder is entitled to all the attributes of ownership of the property, including
possession. Thus, the Court must uphold the age-old rule that the person who has a Torrens title
1wphi1

over a land is entitled to its possession.27 In Pascual v. Coronel,28 the Court reiterated the rule that a
certificate of title has a superior probative value as against that of an unregistered deed of sale in
ejectment cases.

On a final note, the Court must stress that the ruling in this case is limited only to the determination
as to who between the parties has a better right to possession. This adjudication is not a final
determination on the issue of ownership and, thus, will not bar any party from filing an action raising
the matter of ownership.

WHEREFORE, the petition is hereby DENIED.

SO ORDERED.