Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 204926 December 3, 2014

ANACLETO C. MANGASER, represented by his Attorney-in-fact EUSTAQUIO

DUGENIA, Petitioner,
vs.
DIONISIO UGAY, Respondent.

DECISION

MENDOZA, J.:

This is a petition for review on certiorari seeking to reverse and set aside the June 13, 2012
Decision1 and the December 5, 2012 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No.
122153, entitled "Dionisio Ugay v. Anacleto C. Mangaser, represented by his Attorney-in-fact
Eustaquio Dugenia, "a case of forcible entry and damages.

The Facts

On October 30, 2007, petitioner Anacleto Mangaser, represented by his attorney-in-fact, Eustaquio
Dugenia (petitioner), filed a complaint for Forcible Entry with Damages against respondent Dionisio
Ugay (respondent) before the Municipal Trial Court of Caba, La Union (MTC). In his complaint,
petitioner alleged that he was the registered owner and possessor of a parcel of land situated in
Santiago Sur, Caba, La Union, with an area of 10,632 square meters and covered by OCT No. RP-
174 (FP-13 787) and Tax Declaration No. 014-00707; that on October 31, 2006, petitioner,
discovered that respondent stealthy intruded and occupied a portion of his property by constructing a
residential house thereon without his knowledge and consent; that he referred the matter to the
Office of Lupong Tagapamayapa for conciliation, but no settlement was reached, hence, a
certification to file action was issued by the Lupon; and that demand letters were sent to respondent
but he still refused to vacate the premises, thus, he was constrained to seek judicial remedy.3

Respondent denied the material allegations of the complaint and put up the following defenses, to
wit: that he had been a resident of Samara, Aringay, La Union, since birth and when he reached the
age of reason, he started occupying a parcel of land in that place then known as Sta. Lucia, Aringay,
La Union; that years later, this parcel of land was designated as part of Santiago Sur, Caba, La
Union due to a survey made by the government; that he introduced more improvements on the
property by cultivating the land, and in March 2006, he put up a "bahay kubo"; that in October 2006,
he installed a fence made of "bolo" to secure the property; that in installing the fence, he was guided
by the concrete monuments which he knew to be indicators of the boundaries of petitioner's
property; that while he could not locate some of the monuments, he based the boundaries on his
recollection since he was around when these were installed; that he knew the boundaries of
petitioner's property because he knew the extent of the "iron mining" activities done by a company
on the said property; that petitioner was never in actual possession of the property occupied by him,
and it was only on October 31, 2006 when he discovered the al legccl intrusion; that it was not
correct to say that he refused to vacate and surrender the premises despite receipt of the demand
letters because in his letter-reply, he assured petitioner that he would voluntarily vacate the premises
if he would only be shown to have intruded into petitioner's titled lot after the boundaries were
pointed out to him; and that instead of shmving the boundaries to him, petitioner filed an action for
forcible entry before the MTC.4

MTC Ruling

On April 26, 2011, the MTC ruled in favor of respondent. It stated that petitioner failed to adduce any
evidence to prove that the lot occupied by respondent was within his lot titled under OCT No. RP-
174 (13 789). The MTC opined that petitioner could have presented a relocation survey, which would
have pinpointed the exact location of the house and fence put up by respondent, and resolved the
issue once and for all.6 It also explained that petitioner failed to prove his prior physical possession of
the subject property. The OCT No. RP-174(13789) registered under petitioner's name and the Tax
Declaration were not proof of actual possession of the property. The dispositive portion of which
reads:

WHEREFORE, the plaintiff (petitioner) having failed to establish his case by preponderance of
evidence, the complaint is hereby DISMISSED.7

RTC Ruling

Aggrieved, petitioner appealed to the Regional Trial Court of Bauang, La Union (RTC) and the case
was raffled to Branch 33.

In its August 23, 2011 Decision,8 the RTC reversed the MTC decision and ruled in favor of petitioner.
It relied on the cases of Barba v. Court of Appeals9 and Nunez v. SLTEAS Phoenix Solutions,
Inc.,10 which held that in ejectment cases, possession of the land did not only mean actual or physical
possession but also included the subject of the thing to the action of one's will or by the proper acts
and legal formalities established for acquiring such right. The RTC stated that petitioner had clearly
shown his possession of the property as evidenced by his OCT No. RP-174(13 789) issued in March
1987 and tax declaration, dating back as early as 1995.11 It added that the boundaries of the property
were clearly indicated in the title, thus, there was no need to conduct a survey. As the owner,
petitioner knew the exact metes and bounds of his property so that when respondent intruded
stealthily, he filed the subject suit.12 The dispositive portion of the RTC decision reads:

WHEREFORE, after a thorough perusal of the facts and evidence in this case, this Court reverses
the decision of the MTC, Caba, La Union, dated April 26, 2011 and rules in favor of plaintiffappellant
(petitioner) and against defendant-appellee (respondent), ordering the latter and all other persons
claiming rights under him to:

1. VACATE the portion of the subject property encroached by him;

2. SURRENDER actual physical possession of the subject portion peacefully to plaintiff-

appellant;

3. REMOVE all the improvements he introduced therein;

4. PAY attorney's fees in the amount Php20,000.00 to plaintiff-appellant, and pay the cost of
suit.

SO ORDERED.13

Undaunted, respondent appealed to the CA.

 CA Ruling

The CA reversed and set aside the decision of the RTC. Citing Quizon v. Juan,14 it emphasized that
petitioner must allege and prove that he was in prior physical possession of the property in dispute.
The word "possession," as used in forcible entry and unlawful detainer cases, meant nothing more
than physical possession, not legal possession in the sense contemplated in civil law. The CA wrote
that petitioner was not in physical possession despite the presentation of the OCT No. RP-
174(13789) and his tax declarations.15 It reiterated that when the law would speak of possession in
forcible entry cases, it is prior physical possession or possession de facto, as distinguished from
possession de Jure. What petitioner proved was legal possession, not his prior physical possession.
Furthermore, the CA stated that the RTC misquoted Nunez v. SLTEAS Pheonix Solutions16 by giving
the wrong notion of what kind of possession was contemplated in forcible entry cases. In other
words, physical possession was the crux in forcible entry, not possession that stemmed upon
ownership.17 The dispositive portion of the assailed decision reads:

WHEREFORE, premises considered, the Petition for Review is GRANTED, accordingly, the
Decision dated August 23, 2011 and Order dated October 25, 2011, of the RTC Branch 33, Bauang,
La Union in Civil Case No. 2029-BG are REVERSED and SET ASIDE. The Decision of the MTC
dated April 26, 2011 is hereby REINSTATED.

SO ORDERED.18

Petitioner filed a motion for reconsideration,19 dated July 6, 2012, but it was subsequently denied by
the CA in a Resolution,20 dated December 5, 2012. It reads:

This Court, after a meticulous study of the arguments set forth in the Motion for Reconsideration filed
by respondent, finds no cogent reason to revise, amend, much less reverse, the assailed Decision
dated June 13, 2012. The Motion for Reconsideration is, thus, DENIED

SO ORDERED.21

Hence, this petition, anchored on the following

STATEMENT OF ISSUES

WHETHER OR NOT THE COURT OF APPEALS FAILED TO CONSIDER THE EVIDENCE OF

OWNERSHIP OF PETITIONER WHICH MAY ESTABLISH PRIOR POSSESSION OVER THE
PROPERTY BY HEREIN PETITIONER.

II

WHETHER OR NOT THE RESOLUTION DATED DECEMBER 5, 2012 OF THE COURT OF

APPEALS, FORMER SPECIAL FOURTH DIVISION, DENYING THE MOTION FOR
RECONSIDERATION IS VALID.22

Petitioner argues that in ejectment cases, possession of the land does not only mean actual or
physical possession or occupation but also by the fact that a land is subject to the action of one's will
or by proper acts and legal formalities established for acquiring such right; that the CA should have
considered OCT No. RP-174(13789) his tax declaration as proofs of prior physical possession over
the property; and that the issuance of the same are considered to by law as proper acts and legal
formalities established for acquiring such right. Petitioner cited Tolentino, as one of the authors and
experts in Civil law, stating that the "proper acts and formalities" refer to juridical acts, or the
acquisition of possession by sufficient title, inter vivas or mortis causa, onerous or lucrative. These
are the acts which the law gives the force of acts of possession.

Petitioner also avers that the December 5, 2012 CA Resolution was not valid as it did not state the
legal basis required by the Constitution.

On May 28, 2013, respondent filed his Comment23 before this Court. He stated that the issues raised
and the arguments presented by petitioner have been thoroughly resolved and ruled upon by the CA.
The appellate court did not err in reversing the RTC decision because petitioner was never in prior
physical possession of the property in dispute. Respondent asserts that he has been in prior, actual,
continuous, public, notorious, exclusive and peaceful possession in the concept of an owner of the
property in dispute.24

On March 28, 2014, petitioner filed his Reply,25 reiterating the case of Nunez v. SLTEAS Phoenix
Solutions, Inc.,26where a party was able to demonstrate that it had exercised acts of ownership over
the property by having it titled in its name and by paying real property taxes on it. Petitioner also
laments the wrongful insistence of respondent that his possession over the property was one in the
concept of an owner. To petitioner's mind, respondent failed to adequately adduce evidence to show
proof of his right to possess the property when his possession came under attack with the filing of
the subject case.27

The Court's Ruling

The Court finds the petition meritorious.

For a forcible entry suit to prosper, the plaintiffs must allege and prove: (a) that they have prior
physical possession of the property; (b) that they were deprived of possession either by force,
intimidation, threat, strategy or stealth; and, (c) that the action was filed within one (1) year from the
time the owners or legal possessors learned of their deprivation of the physical possession of the
property.28

There is only one issue in ejectment proceedings: who is entitled to physical or material possession
of the premises, that is, to possession de facto, not possession de Jure? Issues as to the right of
possession or ownership are not involved in the action; evidence thereon is not admissible, except
only for the purpose of determining the issue of possession.29

As a rule, the word "possession" in forcible entry suits indeed refers to nothing more than prior
physical possession or possession de facto, not possession de Jure or legal possession in the sense
contemplated in civil law. Title is not the issue, and the absence of it "is not a ground for the courts to
withhold relief from the parties in an ejectment case."30

The Court, however, has consistently ruled in a number of cases31 that while prior physical
possession is an indispensable requirement in forcible entry cases, the dearth of merit in
respondent's position is evident from the principle that possession can be acquired not only by
material occupation, but also by the fact that a thing is subject to the action of one's will or by the
proper acts and legal formalities established for acquiring such right. The case of Quizon v.
Juan,32 which surprisingly was relied on by the CA, also stressed this doctrine.
Possession can be acquired by juridical acts. These are acts to which the law gives the force of acts
of possession. Examples of these are donations, succession, execution and registration of public
instruments, inscription of possessory information titles and the like.33 The reason for this exceptional
rule is that possession in the eyes of the law does not mean that a man has to have his feet on every
square meter of ground before it can be said that he is in possession.34 It is sufficient that petitioner
was able to subject the property to the action of his will.35 Here, respondent failed to show that he
falls under any of these circumstances. He could not even say that the subject property was leased
to him except that he promised that he would vacate it if petitioner would be able to show the
boundaries of the titled lot.

In the case of Nunez v. SLTEAS Phoenix Solutions, inc., 36 the subject parcel was acquired by the
respondent by virtue of the June 4, 1999 Deed of Assignment executed in its favor by Spouses Ong
Tiko and Emerenciana Sylianteng. The petitioner in the said case argued that, aside from the
admission in the complaint that the subject parcel was left idle and unguarded, the respondent's
claim of prior possession was clearly negated by the fact that he had been in occupancy thereof
since 1999. The Court disagreed with the petitioner and said: Although it did not immediately put the
same to active use, respondent appears to have additionally caused the property to be registered in
its name as of February 27, 2002 and to have paid the real property taxes due thereon alongside the
sundry expenses incidental thereto. Viewed in the light of the foregoing juridical acts, it consequently
did not matter that, by the time respondent conducted its ocular inspection in October 2003,
petitioner hml already been occupying the land since 1999.

[Emphasis and underscoring supplied]

Hence, in that case, the Court ruled that such juridical acts were sufficient to establish the
respondent's prior possession of the subject property.

The case of Habagat Grill v. DMC-Urban Property Developer, Inc.,37 also involves an action for
forcible entry. On June 11, 1981, David M. Consunji, Inc. acquired a residential lot situated in Matin
a, Davao City, which was covered by TCT No. T-82338. On June 13, 1981, it transferred the said lot
to respondent DMC. Alleging that the petitioner forcibly entered the property in December 1993, the
respondent filed on March 28, 1994 a complaint for forcible entry. One of the issues raised therein
was whether respondent DMC had prior possession of the subject property, to which the Court
answered in the affirmative. It ruled that:

Prior possession of the lot by respondent's predecessor was sufficiently proven by evidence of the
execution and registration of public instruments and by the fact that the lot was subject to its will from
then until December 1, 1993, when petitioner unlawfully entered the premises and deprived the
former of possession thereof.

[Emphasis and underscoring supplied]

In the case at bench, the Court finds that pet1t1oner acquired possession of the subject property by
juridical act, specifically, through the issuance of a free patent under Commonwealth Act No. 141
and its subsequent registration with the Register of Deeds on March 18, 1987.38

Before the Court continues any further, it must be determined first whether the issue of ownership is
material and relevant in resolving the issue of possession. The Rules of Court in fact expressly allow
this: Section 16, Rule 70 of the Rules of Court provides that the issue of ownership shall be resolved
in deciding the issue of possession if the question of possession is intertwined with the issue of
ownership. But this provision is only an exception and is allowed only in this limited instance - to
determine the issue of possession and only if the question of possession cannot be resolved without
deciding the issue of ownership.39

This Court is of the strong view that the issue of ownership should be provisionally determined in this
case. First, the juridical act from which the right of ownership of petitioner arise would be the
registration of the free patent and the issuance of OCT No. RP-174(13789). Apparently, the Torrens
title suggests ownership over the land. Second, respondent also asserts ownership over the land
based on his prior, actual, continuous, public, notorious, exclusive and peaceful possession in the
concept of an owner of the property in dispute.40 Because there are conflicting claims of ownership,
then it is proper to provisionally determine the issue of ownership to settle the issue of possession
de facto.

Returning to the case, this Court cannot agree with the CA that petitioner's OCT No. RP-174(13789)
and his tax declarations should absolutely be disregarded. The issuance of an original certificate of
title to the petitioner evidences ownership and from it, a right to the possession of the property flows.
Well-entrenched is the rule that a person who has a Torrens title over the property is entitled to the
possession thereof.41

Moreover, his claim of possession is coupled with tax declarations. While tax declarations are not
conclusive proof of possession of a parcel of land, they are good indicia of possession in the concept
of an owner, for no one in his right mind would be paying taxes for a property that is not in his actual
or constructive possession.42 Together with the Torrens title, the tax declarations dated 1995
onwards presented by petitioner strengthens his claim of possession over the land before his
dispossession on October 31, 2006 by respondent.

The CA was in error in citing the case of De Grano v. Lacaba43 to support its ruling. In that case, the
respondent tried to prove prior possession, by presenting only his tax declarations, tax receipt and a
certification from the municipal assessor attesting that he had paid real property tax from previous
years. The Court did not give credence to his claim because tax declarations and realty tax
payments are not conclusive proof of possession. The situation in the present case differs because
aside from presenting his tax declarations, the petitioner submitted OCT No. RP-174(13 789) which
is the best evidence of ownership from where his right to possession arises.

Against the Torrens title and tax declarations of petitioner, the bare allegations of respondent that he
had prior, actual, continuous, public, notorious, exclusive and peaceful possession in the concept of
an owner, has no leg to stand on. Thus, by provisionally resolving the issue of ownership, the Court
is satisfied that petitioner had prior possession of the subject property. When petitioner discovered
the stealthy intrusion of respondent over his registered prope1iy, he immediately filed a complaint
with the Lupong Tagapamayapa and subsequently filed an action for forcible entry with the MTC.
Instead of taking the law into his own hands and forcefully expelling respondent from his property,
petitioner composed himself and followed the established legal procedure to regain possession of
his land.

If the Court were to follow the ruling of the CA and disregard juridical acts to obtain prior possession,
then it would create an absurd situation. It would be putting premium in favor of land intruders
against Torrens title holders, who spent months, or even years, in order to register their land, and
who religiously paid real property taxes thereon. They cannot immediately repossess their properties
simply because they have to prove their literal and physical possession of their property prior to the
controversy. The Torrens title holders would have to resort to ordinary civil procedure by filing either
an accion publiciana or accion reinvidicatoria and undergo arduous and protracted litigation while the
intruders continuously enjoy and rip the benefits of another man's land. It will defeat the very
purpose of the summary procedure of an action for forcible entry.
The underlying philosophy behind ejectment suits is to prevent breach of the peace and criminal
disorder and to compel the party out of possession to respect and resort to the law alone to obtain
what he claims is his. Ejectment proceedings are summary in nature so the authorities can speedily
settle actions to recover possession because of the overriding need to quell social disturbances.44

As to the other requirements of an action for forcible entry, the Court agrees with the RTC that
petitioner had sufficiently complied with them. Petitioner proved that he was deprived of possession
of the property by stealth. The complaint was also filed on October 30, 2007, within the one year
1wphi1

reglementary period counted from the discovery of the stealthy entry by respondent to the property
on October 31, 2006.

The second issue raised is the validity of the CA Resolution dated December 5, 2012. Petitioner
alleges that the CA denied his reconsideration without indicating its legal basis in violation of the
mandate of Section 14, Article VIII of the Constitution, which provides that no petition for review or
motion for reconsideration of a decision of the court shall be refused due course or denied without
stating the legal basis therefor. This requirement, however, was complied with when the CA, in its
resolution denying petitioner's motion for reconsideration, stated that it "finds no cogent reason to
reverse, amend, much less reverse the assailed Decision, dated June 13, 2012."45

WHEREFORE, the petition is GRANTED. The June 13, 2012 Decision and the December 5, 2012
Resolution of the Court of Appeals in CA-G.R. SP No. 122153 are hereby REVERSED and SET
ASIDE. The August 23, 2011 Decision of the Regional Trial Court, Branch 33, Bauang, La Union, is
hereby REINSTATED.

SO ORDERED.

JOSE CATRAL MENDOZA

G.R. No. 107057 June 2, 1994

TEODORO ARAOS, ALEJANDRO LANGCAUAN, EUGENIA PITOY, Spouses PERFECTO

REYES and ROSARIO REYES, RUTH RAYCO, PROSPERO PERALTA, MYRNA MENDOZA, and
Spouses REDENTOR COMINTAN and LUCY COMINTAN, petitioners,
vs.
HON. COURT OF APPEALS and JOVAN LAND, INC., respondents.

Cirilo J. Nepuscua for petitioner.

Rufino T. Aguilar for private respondent.

DAVIDE, JR., J.:

This is a petition for review on certiorari seeking the reversal of the decision of the Court of Appeals
of 8 September 1992 in CA-G.R. SP No. 27819 1 which reversed the decision of the Regional Trial
Court (RTC) of Manila and reinstated the judgment of Branch 26 of the Metropolitan Trial Court
(MeTC) of Manila in several ejectment cases filed against the petitioners.

The petitioners are lessees of a ten-door apartment building located at No. 2222 Pedro Gil Street,
Sta. Ana, Manila, which they have been occupying for some 25 years. The building was originally
owned by one Vivien B. Bernardino with whom the petitioners had a written contract of lease which
expired on 31 January 1988. Nevertheless, after this period, the petitioners peacefully occupied their
respective units and the lessor continued to collect monthly rentals from the petitioners despite the
absence of a written contract.

On 11 July 1991, the apartment was sold to private respondent Jovan Land, Inc. Three days after, or
on 15 July 1991, demands to vacate the units the petitioners and other lessees were occupying were
made simultaneously by Bernardino and the private respondent. When the demands went unheeded,
ten separate cases for unlawful detainer were filed against the petitioners and other lessees by the
private respondent before the MeTC of Manila. 2The cases were assigned to Branch 26 of the said
court.

After the parties submitted their respective position papers, the MeTC rendered a joint
Judgment 3 holding that the contracts between the lessor and the lessees provided for a lease on a
month-to-month basis and, in the light of Article 1687 in relation to Article 1670 of the Civil Code, that
the lease period had expired. Accordingly, it ordered the defendants to vacate the premises and to
pay the following amounts:

Rental Arrearages Reasonable

from August to Compensation
October 1991 for the use and
occupancy of
the premises

TEODORO ARAOS P18,000.00 P6,000.00/mo

FLORENCIO JAVIER 13,500.00 4,500.00/mo
Spouses JESUS and
VILMA TAPEL 18,000.00 6,000.00/mo
EUGENIA PITOY 13,500.00 4,500.00/mo
PROSPERO PERALTA 13,500.00 4,500.00/mo
Spouses ALBERTO
and MYRNA MENDOZA 18,000.00 6,000.00/mo
RUTH RAYCO 13,500.00 4,500.00/mo
Spouses PERFECTO
and ROSARIO REYES 18,000.00 6,000.00/mo
Spouses REDENTOR
and LUCY COMINTAN 18,000.00 6,000.00/mo
ALEJANDRO LANGAUAN 13,500.00 4,500.00/mo

Each defendant was also ordered to pay P2,500.00 as attorneys fees and costs.

The MeTC rejected the lessees contention that since they have been occupying the property for
more than ten years, they are protected by P.D. No. 1517, 4 the law on Urban Land Reform, and
ruled that the subject matter is outside an Area of Priority Development (APD) Zone. 5

The abovenamed lessees (defendants) appealed the decision to the RTC of Manila. The cases were
assigned to Branch 38 thereof. 6

During the pendency of the appeal, the Tapel spouses 7 and Florencio Javier 8 vacated the premises
and their appeals were accordingly dismissed.
In its joint Decision of 7 April 1992, 9 the RTC reversed the decision of the MeTC on the ground that
the cases are covered by B.P. Blg. 25, as amended by B.P. Blg. 877, specifically Section 6 thereof,
which provides:

Sec. 6. Application of the Civil Code and the Rules of Court of the Philippines.
Except when the lease is for a definite period, the provisions of paragraph (1) of
Article 1673 of the Civil Code of the Philippines, insofar as they refer to residential
units covered by this Act, shall be suspended during the effectivity of this Act, but
other provisions of the Civil Code and the Rules of Court on lease contracts, insofar
as they are not in conflict with the provisions of this Act shall apply.

Paragraph 1, Article 1673 of the Civil Code refers to Article 1687 which states that if the period for
the lease has not been fixed, it is understood to be from month to month, if the rent agreed upon is
monthly. The RTC then concluded that even if the month-to-month lease under Article 1687 had
expired, the expiration cannot be a ground for judicial ejectment in view of the suspension of the
provision of paragraph 1 of Article 1673 by B.P. Blg. 25, as amended. It further considered the
increase in rental, as awarded by the MeTC, to be iniquitous and unconscionable. It opined that the
increase should not exceed 20% per year as provided for in R.A. No. 6828, the law which further
extended the effectivity of B.P. Blg. 877. 10

Dissatisfied with the RTC decision, the private respondent filed with the Court of Appeals a petition
for review. In its decision promulgated on 8 September 1992, 11 the Court of Appeals reversed the
decision of the RTC and affirmed the decision of the MeTC. It ruled that based on existing
jurisprudence an oral contract of lease on a month-to-month basis is a lease with a definite period
which expires upon previous demand by the lessor to vacate and thus can justify ejectment. 12 It also
relied on our pronouncement in Uy Hoo and Sons Realty Development Corporation vs. Court of
Appeals 13 where we said that while Section 5(f) of B.P. Blg. 25 originally stated that "expiration of the
period of a written contract" is a ground for judicial ejectment, the amendatory law, B.P. Blg. 877,
now merely states "expiration of the period of the lease contract," as a ground for judicial ejectment.

Hence, this petition which although initially denied in the Resolution of 31 March 1993 14 was
reinstated and given due course after our finding of a prima facie merit with respect to the issue on
rates of rentals. 15

The core issue for our resolution is the propriety and validity of the increase in the monthly rates of
rentals as decreed by the MeTC and sustained by the Court of Appeals.

The records show that the petitioners monthly rentals were increased as follows:

Former Increased
Rentals 16 Rentals 17

TEODORA ARAOS P945.00 P6,000.00

ALJANDRO LANCGCAUAN 760.00 4,500.00
EUGENIO PITOY 795.00 4,500.00
PROSPERO PERALTA 760.00 4,500.00
Spouses ALBERTO
and MYRNA MENDOZA 945.00 6,000.00
RUTH RAYCO 710.00 4,500.00
Spouses PERFECTO
and ROSARIO REYES 945.00 6,000.00
 Spouses REDENTOR
and LUCY COMINTAN 790.00 6,000.00

In increasing the rentals, the MeTC took into consideration the fact that the area where the
apartment is located is highly commercialized.

There is no basis for the increase in the rentals. The issue must then be resolved in favor of the
petitioners.

The rule is settled that in forcible entry or unlawful detainer cases, the only damage that can be
recovered is the fair rental value or the reasonable compensation for the use and occupation of the
leased property. 18 The reason for this is that in such cases, the only issue raised in ejectment cases
is that of rightful possession; hence, the damages which could be recovered are those which the
plaintiff could have sustained as a mere possessor, or those caused by the loss of the use and
occupation of the property, and not the damages which he may have suffered but which have no
direct relation to his loss of material possession. 19

It should be borne in mind that although the rent control laws allow unilateral increases in rentals by
the lessor within the period and the maximum rates provided therein, still the demand for such
increase must be made upon the lessee himself. The courts have no authority to fix the same for the
parties where no valid demand for an increased rent has been made by the lessor. Hence, in the
case of Orlino vs. Court of Appeals, 20 we reversed the MTCs award of increase in rental in
accordance with Section 1 of B.P. Blg. 877, after finding that the award was merely based on the
prayer in the complaint, although no previous demand was made on the defendant-lessee.

In the present case, the demand letters to vacate sent to the petitioners only mentioned the
purchase of the apartment units by the private respondent. Nothing in the record shows that there
were prior disputes on the rentals or that there was a demand for increased rentals made by the
private respondent or its predecessor on the petitioners. Hence, the MeTC did not have the authority
to decree the increase in rental rates.

WHEREFORE, the instant petition is hereby partly GRANTED. The challenged decision of the Court
of Appeals and that of the Metropolitan Trial Court in Civil Cases Nos. 136824-CV, 136826-CV to
136831-CV, inclusive, and 136857-CV are hereby MODIFIED by setting aside the increase in rentals
fixed therein and directing the petitioners to pay the accumulated rentals, from 15 July 1991 until
they shall have effectively vacated the leased premises, at the same monthly rates they were paying
before 15 July 1991, with interest thereon at the legal rate.

No pronouncement as to costs.

SO ORDERED.

Bellosillo and Quiason, JJ., concur.

ANILO DUMO and SUPREMA G.R. No. 141962

DUMO,
Petitioners,
Present:

PANGANIBAN, C.J., Chairman,

 - versus - YNARES-SANTIAGO,
AUSTRIA-MARTINEZ,
CALLEJO, and
CHICO-NAZARIO, JJ.
ERLINDA ESPINAS, JHEAN
PACIO, PHOL PACIO, MANNY
JUBINAL, CARLITO CAMPOS, Promulgated:
and SEVERA ESPINAS,
Respondents. January 25, 2006

x-----------------------------------------------------------x

DECISION

AUSTRIA-MARTINEZ, J.:

Before us is a petition for review on certiorari under Rule 45 of the Rules of

Court assailing the Decision of the Court of Appeals (CA) dated October 14, 1999
[1]

in CA-G.R. SP No. 50239, which set aside the Decision of the Regional Trial
Court (RTC) of Bauang, La Union, Branch 33, and reinstated with modification the
judgment of the Municipal Trial Court (MTC) of the same town and province; and
its Resolution of February 18, 2000, denying petitioners motion for
[2]

reconsideration.

The present case arose from a complaint for forcible entry with prayer for
the issuance of a temporary restraining order and/or preliminary injunction filed by
spouses Danilo and Suprema Dumo (petitioners) against Erlinda Espinas, Jhean
Pacio, Phol Pacio, Manny Jubinal, Carlito Campos and Severa Espinas
(respondents) with the MTC of Bauang, La Union. The case was docketed as Civil
Case No. 881. In their complaint, petitioners alleged:

2. That plaintiffs are the owners-possessors of a parcel of sandy land with

all the improvements standing thereon, located in Paringao, Bauang, La Union,
with an area of 1, 514 square meters, covered by Tax Declaration No. 22839, a
photocopy of the said tax declaration is hereto attached as Annex A;
 3. That on November 17, 1995, defendant Severa J. Espinas filed a civil
complaint before this same court, docketed as civil case no. 857, entitled Quieting
of Title and/or Ownership and Possession against spouses Sandy and Presnida
Saldana, subject matter of the case being the same real property mentioned in
paragraph 2 above, for which plaintiffs seeks (sic) that the Honorable Court takes
judicial notice of the same;

4. That although a decision has been rendered against the defendants in

civil case no. 857, the same was not enforced as per Sheriffs return dated
November 4, 1996, attached to the records of civil case no. 857;

5. That on October 30, 1996, at about 1:45 P.M., all defendants acting for
the interest of Severa Espinas, apparently disgruntled with the refusal of the
sheriff to put them in possession over the questioned real property, and in open
defiance with the official action taken by the sheriff, took it upon themselves,
employing force, intimidation, and threat, to enter the said question (sic) real
property, and despite protestations made by plaintiffs, who were there then
present and visibly outnumbered by defendants and their agents who were armed
with sticks, bolos, hammers, and other deadly weapons, successfully drove out
plaintiffs, and took over the premises; that arrogantly, the defendants were
boasting aloud that they were under instructions by the judge to do just that to
forcibly enter and take over the premises; that defendants while inside the
premises, demolished and totally tore down all the improvements standing
thereon, consisting of, but not limited to shed structures intended for rent to the
public;

6. That defendants are still in the premises to date, and have even started
putting and continuously putting up structures thereon;

7. That the plaintiff being the rightful owner of the disputed property and
not being a party in civil case no. 857, can never be bound by the proceedings
thereon; that the acts of defendants in forcibly entering the property of plaintiff,
and taking over the same without no lawful basis is patently a violation of her
proprietary rights, the commission and the continuance of the unlawful acts
aforementioned of defendants verily works injustice to plaintiffs;[3]

Petitioners prayed for the payment of actual damages in the amount of P75,000.00,
lost earnings of P5,000.00 per day, moral damages of P100,000.00 and attorneys
fees in the amount of P50,000.00. [4]

On November 12, 1996, the MTC issued a temporary restraining order

directing the defendants to cease and desist from destroying or demolishing the
improvements found on the subject land and from putting up structures thereon. In [5]

its Order of January 15, 1997, the MTC issued a writ of preliminary injunction. [6]
 In their Answer, respondents contended as part of their Special and
Affirmative Defenses:

1. That Sps. Marcelino and Severa Espinas purchased the questioned

parcel of land from Carlos Calica in 1943;

2. That said parcel of land has been declared for taxation purposes under
their name and the real estate taxes have [been] religiously paid;

3. That said parcel of land has been surveyed, which Plan Psu-202273 is
duly approved by the Director of Land, with an area of 1,065 sq. m. more or less;

4. That to remove and clear all doubts and cloud over the ownership of
said parcel of land, Civil Case No. 857 was filed and after hearing, decision was
rendered declaring herein defendants the lawful owners of said parcel of land;

5. That under and by virtue of said Decision, defendants entered, occupied

and possessed said land, and in the exercise of their right of ownership, cleaned
the same of illegally constructed structures which were done without the
knowledge and consent of herein defendants;[7]

After trial, the MTC rendered judgment holding that petitioners were able to
prove their right of possession over the subject property. The dispositive portion of
the MTC Decision reads as follows:

WHEREFORE, in view of the foregoing considerations, judgment is

rendered in favor of the plaintiffs spouses Danilo and Suprema Dumo and against
all the defendants and therefore, the Court declares the plaintiffs the priority of
possession or physical possession de-facto of the land subject matter of the suit.
The preliminary mandatory injunction heretofore issued by this Court is hereby
made permanent and if the defendants and their agents or any person acting in
their behalf are still in the premises are ordered to vacate said property. The
defendants are likewise ordered to pay jointly and severally the plaintiffs the
amount of P30,000.00 as actual damages plus P500.00 a day as lost earning of the
premises from October 30, 1996 up to the time defendants vacate the
premises; P30,000.00 as moral damages; P10,000.00 as exemplary damages;
and P30,000.00 as attorneys fee and to pay double cost.

SO ORDERED.[8]
 Aggrieved by the decision of the MTC, respondents appealed the case to the
RTC of Bauang, La Union. It was docketed as Civil Case No. 1099-BG.
[9]

In a letter filed with this Court dated July 24, 1998, RTC Judge Rose Mary
R. Molina-Alim who handles Civil Case No. 1099-BG, requested that she be
allowed to inhibit herself from further sitting in said case on the ground that the
petitioners have filed an administrative complaint against her for partiality, and by
reason of such complaint she honestly feels that she can no longer continue
deciding Civil Case No. 1099-BG without bias and unnecessary
pressure. However, in this Courts Resolution of September 15, 1998, Judge
[10]

Molina-Alims request was denied on the ground that the mere filing of an
administrative complaint does not preclude a judge from deciding a case submitted
to him/her for resolution. Hence, Judge Molina-Alim proceeded in deciding the
[11]

case.

In its Decision dated December 18, 1998, the RTC reversed and set aside the
Decision of the MTC and dismissed the case filed by the petitioners. The RTC [12]

ruled:

Prescinding from the above factual antecedents, as between defendant

Severa Espinas who acquired the property on October 18, 1943 through purchase
(Exhibit 1) and plaintiffs who allegedly possessed it on May 23, 1987 by virtue of
the deed of partition with absolute sale (Exhibit A), the former had a possession
antedating that of the latter. Even if the possession of plaintiffs predecessors-in-
interest, Sps. Pedro and Bernardo Trinidad since 1951, were to be considered, still,
defendant Severa Espinas enjoys the priority of possession long before the filing
of the instant case on October 30, 1996. Under these circumstances, priority in
time should be the pivotal cog in resolving the issue of possession.

What is more, defendant Severa Espinas was never divested of her

possession except in 1987 when the plaintiffs put up the retaining seawall on the
western portion and cyclone wire on the southern portion of the property without
her (Severa) consent. Despite the latters protestations, plaintiffs continued to
introduce these improvements and challenged her to file a suit in Court. (Minutes
of the ocular inspection, April 23, 1997). And lately, in Civil Case No. 857
(Exhibit 3), when defendants Saldy and Fresnida Saldaa tried to encroach on the
property claiming ownership thereof. What is more, the possession of defendant
Severa Espinas since 1943 was bolstered by the decision rendered in the land
registration case (Exhibit U), as well as in the civil case (Exhibit E), wherein she
was declared the owner of the property in question.

Hence, the MTC erred in finding plaintiffs to have priority of possession.

On the contrary, defendants (sic) evidence is very clear that defendant Severa
Espinas and her husband had been in actual, open, continuous, adverse in the
concept of owner, possession of the land since 1943. In addition, the evidence of
possession presented in the land registration and quieting of title cases (Exhibits U
and E) surely dispels any iota of doubt that may exist in regard to the possession
of defendant Severa Espinas over the subject property.

As regards the issue on the award of damages:

The rule is settled that in forcible entry or unlawful detainer

cases, the only damage that can be recovered is the fair rental value
or the reasonable compensation for the use and occupation of the
leased property. The reason for this is that in such cases, the only
issue raised in ejectment cases is that of rightful possession; hence,
the damages which could be recovered are those which the plaintiff
could have sustained as a mere possessor, or those caused by the
loss of the use and occupation of the property, and not the damages
which he may have suffered but which have no direct relation to
his loss of material possession (Araos vs. Court of Appeals, 232
SCRA 770).

Then too, under Section 17 of Rule 70 of the 1997 Rules of Civil

Procedure, in forcible entry and unlawful detainer, the monetary award is limited
to the sum justly due as arrears of rent or as reasonable compensation for the use
and occupation of the premises, attorneys fees and costs. In this case, the MTC
erred in awarding P30,000.00 as actual damages plus P500.00 a day as loss
earnings, P30,000.00 as moral damages, P10,000.00 as exemplary damages.
These damages are not the reasonable compensation for the use and occupation of
the property. Rather, these are damages which may have been suffered by
plaintiffs which have no direct relation to the use of material possession, hence,
should not have been awarded (Araos vs. C.A., supra).

Besides, the award of P30,000.00 as actual damages plus P500.00 a day as

loss earnings has no factual and legal basis, hence, should have been disallowed.

True, the aforecited rule now allows attorneys fees to be awarded, but the
grant of the same must be in accordance with Article 2208 of the Civil Code, thus:

Article 2208. In the absence of stipulation, attorneys fees cannot be

recovered except

1) In any other cases (sic) where the court deems it just and
equitable

In all cases must be reasonable.

 The award of attorneys fees by the MTC lacks basis. The body of the
appealed decision indeed does not show justification for the award. Hence, there
is no basis for such award, which, consequently, should have been removed. The
power of the Court to award attorneys fees under the above cited article, demands
factual, legal and equitable justification. Its basis cannot be left to speculation and
gesture (Morales vs. C.A. G.R. No. 117228, June 19, 1997).[13]

Petitioners then filed a petition for review with the CA. On October 14, 1999,
the CA promulgated the presently assailed Decision setting aside the judgment of
the RTC and reinstating with modification the decision of the MTC, by deleting
the awards for actual, moral and exemplary damages. The CA held that the MTC
[14]

correctly found that the petitioners were in possession of the subject land prior to
the time when respondents allegedly forcibly entered the property; that it is error
for the RTC to reach all the way back to 1943 to determine priority in possession
considering that prior possession means possession immediately prior to the act of
disturbance; that Civil Case No. 857, which was an action to quiet title filed by
respondent Severa Espinas against spouses Sandy and Presnida Saldana, is not
binding on petitioners; and, that the alleged difference in the identities of the lands
of petitioners and respondents was not raised as a defense in the Answer of
respondents. As regards the award of damages, the CA agreed with the ruling of
the RTC that in forcible entry and unlawful detainer cases, the only damage that
can be recovered is the fair rental value or the reasonable compensation for the use
and occupation of the property concerned; nonetheless, it sustained the award of
attorneys fees by the MTC.

Petitioners filed a Motion for Partial Reconsideration but the same was
denied by the CA in its Resolution dated February 18, 2000. [15]

Hence, the present petition with the following assignment of errors:

1. THAT THE COURT OF APPEALS, UNDER THE INSTANT

DECISION AND RESOLUTION, ANNEXES A AND B HEREOF,
COMMITTED A REVERSIBLE ERROR IN NOT DECLARING THE
DECISION OF RTC JUDGE ROSE MARY MOLINA ALIM AS NULL AND
VOID FOR BEING VIOLATIVE OF PETITIONERS CONSTITUTIONAL
RIGHT TO DUE PROCESS IN VIEW OF HER ADMITTED BIAS IN
DECIDING THE CASE.

2. MOREOVER, THE COURT OF APPEALS, UNDER THE SAID

DECISION AND RESOLUTION, ANNEXES A AND B HEREOF,
COMMITTED A REVERSIBLE ERROR IN DELETING THE AWARDS OF
 ACTUAL, MORAL AND EXEMPLARY DAMAGES MADE BY THE
MUNICIPAL TRIAL COURT, CONSIDERING THAT THE SAID AWARDS
ARE ALREADY RES JUDICATA BECAUSE:

(a) THAT, AS AFORESAID, THE DECISION OF JUDGE

ALIM WHICH INCLUDED THE DELETION OF THE SAID
DAMAGES IS NULL AND VOID, AND DID NOT AFFECT
THE MTC DECISION, AND,

(b) THAT, IN ANY EVENT, THE

HEREIN RESPONDENTS DID NOT QUESTION THE
AMOUNTS OF SAID AWARD IN THEIR APPEAL FROM THE
DECISION OF THE MUNICIPAL TRIAL COURT TO THE
REGIONAL TRIAL COURT THEREBY RENDERING SAID
AWARDS, FINAL AND RES JUDICATA.[16]

In their first assignment of error, petitioners contend that the Decision

rendered by the RTC dated December 18, 1998 is null and void because it violates
petitioners constitutional right to due process considering that Judge Rose Mary R.
Molina-Alim who sat during the trial and penned the questioned RTC decision had
previously admitted her bias against petitioners.

We do not agree.

In Gochan vs. Gochan, we have sufficiently discussed the matter of a

[17]

judges inhibition from hearing a case vis--vis the right of a party to due process, to
wit:

A critical component of due process is a hearing before a tribunal that is

impartial and disinterested. Every litigant is indeed entitled to nothing less than
the cold neutrality of an impartial judge. All the other elements of due process,
like notice and hearing, would be meaningless if the ultimate decision were to
come from a biased judge. Section 1 of Rule 137 of the Rules of Court provides:

SECTION 1. Disqualification of judges. - No judge or

judicial officer shall sit in any case in which he, or his wife or child,
is pecuniarily interested as heir, legatee, creditor or otherwise, or in
which he is related to either party within the sixth degree of
consanguinity or affinity, or to counsel within the fourth degree,
computed according to the rules of the civil law, or in which he has
been executor, administrator, guardian, trustee or counsel, or in
which he has presided in any inferior court when his ruling or
decision is the subject of review, without the written consent of all
parties in interest, signed by them and entered upon the record.
 A judge may, in the exercise of his sound discretion,
disqualify himself from sitting in a case, for just or valid reasons
other than those mentioned above.

The Rules contemplate two kinds of inhibition: compulsory and voluntary.

The instances mentioned in the first paragraph of the cited Rule conclusively
presume that judges cannot actively and impartially sit in a case. The second
paragraph, which embodies voluntary inhibition, leaves to the discretion of the
judges concerned whether to sit in a case for other just and valid reasons, with
only their conscience as guide.

To be sure, judges may not be legally prohibited from sitting in a litigation.

But when circumstances reasonably arouse suspicions, and out of such suspicions
a suggestion is made of record that they might be induced to act with prejudice for
or against a litigant, they should conduct a careful self-examination. Under the
second paragraph of the cited Section of the Rules of Court, parties have the right
to seek the inhibition or the disqualification of judges who do not appear to be
wholly free, disinterested, impartial or independent in handling a case. Whether
judges should inhibit themselves therefrom rests on their own sound discretion.
That discretion is a matter of conscience and is addressed primarily to their sense
of fairness and justice.

However, judges are exhorted to exercise their discretion in a way

that the peoples faith in the courts of justice would not be impaired. A
salutary norm for them to observe is to reflect on the possibility that the
losing parties might nurture at the back of their minds the thought that the
former have unmeritoriously tilted the scales of justice against them. Of
course, the judges right must be weighed against their duty to decide cases
without fear of repression.

Verily, the second paragraph of Section 1 of Rule 137 does not give
judges the unfettered discretion to decide whether to desist from hearing a
case. The inhibition must be for just and valid causes. The mere imputation
of bias or partiality is not enough ground for them to inhibit, especially when
the charge is without basis. This Court has to be shown acts or conduct
clearly indicative of arbitrariness or prejudice before it can brand them with
the stigma of bias or partiality.

In a string of cases, the Supreme Court has said that bias and prejudice, to
be considered valid reasons for the voluntary inhibition of judges, must be proved
with clear and convincing evidence. Bare allegations of their partiality will not
suffice. It cannot be presumed, especially if weighed against the sacred oaths of
office of magistrates, requiring them to administer justice fairly and equitably --
both to the poor and the rich, the weak and the strong, the lonely and the well-
connected.
 Equally important is the established doctrine that bias and prejudice
must be shown to have resulted in an opinion on the merits on the basis of an
extrajudicial source, not on what the judge learned from participating in the
case. As long as opinions formed in the course of judicial proceedings are based
on the evidence presented and the conduct observed by the magistrate, such
opinion -- even if later found to be erroneous -- will not prove personal bias or
prejudice on the part of the judge. While palpable error may be inferred from the
decision or the order itself, extrinsic evidence is required to establish bias, bad
faith, malice or corrupt purpose. At bottom, to disqualify a judge, the movant
must prove bias and prejudice by clear and convincing evidence.[18] (Emphasis
ours)

What makes the present case different from the usual cases passed upon by
this Court is the fact that, as stated earlier, Judge Molina-Alim herself manifested
in her letter-request for inhibition that in view of the administrative case filed by
herein petitioners charging her with partiality, she honestly feels that she can no
longer continue deciding the appealed case free from bias and unnecessary
pressure. Petitioners contend that Judge Molina-Alims manifestation is an
[19]

admission of bias. Hence, by reason of such admission, there is no longer any need
for them to prove the same. However, it must be emphasized that the Court denied
Judge Molina-
Alims request for inhibition holding that the mere filing of an administrative
complaint does not preclude a judge from deciding a case submitted to him/her for
resolution for there are judicial remedies available to the parties should there be an
adverse decision. It is clear from the Resolution that the Court was not persuaded
[20]

by the reason put forth by Judge Molina-Alim in her request for inhibition. It
should be clearly understood from the above-cited Resolution that the Court found
no sufficient basis to allow Judge Molina-Alim to inhibit herself from hearing
Civil Case No. 1099-BG. The Court ruled that the mere fact that an administrative
case for alleged partiality was filed against her by herein petitioners does not
justify her recusal. Indeed, a careful reading of the letter-request of Judge Molina-
Alim shows that her request for inhibition stems solely from the fact that herein
petitioners had filed an administrative case against her for partiality. There is no
other statement in said letter-request, categorical or implied, which would show
that her purported bias resulted from any other source. Notwithstanding Judge
Molina-Alims statements in her request for inhibition, we find that petitioners
allegations of bias and partiality remain unsubstantiated. Indeed, bare allegations
of partiality and prejudgment will not suffice in the absence of clear and
convincing evidence to overcome the presumption that the judge will undertake his
noble role to dispense justice according to law and evidence and without fear or
favor. There should be adequate evidence to prove the allegations, and there must
[21]

be showing that the judge had an interest, personal or otherwise, in the prosecution
of the case. [22]

To reiterate, the mere filing of an administrative case against a judge is not a

ground for disqualifying him from hearing the case, for if on every occasion the
party apparently aggrieved would be allowed to either stop the proceedings in
order to await the final decision on the desired disqualification, or demand the
immediate inhibition of the judge on the basis alone of his being so charged, many
cases would have to be kept pending or perhaps there would not be enough judges
to handle all the cases pending in all the courts. This Court has to be shown acts
[23]

or conduct of the judge clearly indicative of arbitrariness or prejudice before the

latter can be branded the stigma of being biased or partial. Moreover, while
[24]

judges are given wide latitude of discretion in determining if it is indeed proper for
them to hear or sit in a particular case, it should be emphasized that this choice is
not absolute and must be based on a just and valid cause and on a rational and
logical assessment of the circumstances prevailing in the case brought before
him. The option given to a judge to choose whether or not to handle a particular
[25]

case should be counter-balanced by the judges sworn duty to administer justice

without fear of repression.

In any case, petitioners contention that they have been deprived of due
process is denied by the fact that they were able to appeal the
questioned RTC Decision to the CA via a petition for review and, subsequently,
file a motion for reconsideration of the CA Decision. The essence of due process is
found in the reasonable opportunity to be heard and submit any evidence one may
have in support of one's defense. What the law proscribes is the lack of
[26]

opportunity to be heard. As long as a party is given the opportunity to defend his

[27]

interests in due course, he would have no reason to complain, for it is this

opportunity to be heard that makes up the essence of due process. [28]

In their second assignment of error, petitioners point out that in their petition
for review filed with the CA, they did not raise as an issue the award of damages
made by the MTC. Similarly, respondents did not specifically assign as error the
award of damages by the MTC when they appealed the case to the RTC; neither
did they file an appeal with the CA questioning the award of damages by the MTC.
On this basis, petitioners conclude that the award for damages not having been
appealed, the same had become final and executory. Hence, the RTC had no
authority to reverse the judgment of the MTC respecting the award of damages. In
the same way, petitioners contend that the CA did not have jurisdiction to rule on
the matter of damages because this issue was not raised in the appeal filed before it.
We are not persuaded.

We have held that an appellate court is clothed with ample authority to

review rulings even if they are not assigned as errors. This is especially so if the
[29]

court finds that their consideration is necessary in arriving at a just decision of the
case before it. We have consistently held that an unassigned error closely related
[30]

to an error properly assigned, or upon which a determination of the question raised

by the error properly assigned is dependent, will be considered by the appellate
court notwithstanding the failure to assign it as an error. Petitioners admit in the
[31]

present petition that herein respondents, in their appeal with the RTC, raised the
question of whether or not the prevailing party may be awarded damages. Since
this issue had been seasonably raised, it became open to further evaluation. It was
only logical and natural for the RTC to deal with the question of whether
petitioners are indeed entitled to the damages awarded by the MTC.

Moreover, even if the issue on damages was not raised by herein

respondents in their appeal with the RTC, it is not erroneous on the part of
the RTC to delete the award of damages in the MTC decision considering that the
RTC judgment reversed the decision of the MTC. It would be the height of
inconsistency if the RTC sustained the award of damages in favor of herein
petitioners when, in the same decision, it reversed the MTC judgment and
dismissed the complaint of petitioners.

Lastly, we agree with the CA and the RTC that there is no basis for the MTC
to award actual, moral and exemplary damages in view of the settled rule that
in ejectment cases, the only damage that can be recovered is the fair rental value or
the reasonable compensation for the use and occupation of the
property. Considering that the only issue raised in ejectment is that of rightful
[32]

possession, damages which could be recovered are those which the plaintiff could
have sustained as a mere possessor, or those caused by the loss of the use and
occupation of the property, and not the damages which he may have suffered but
which have no direct relation to his loss of material possession. Although the
[33]

MTCs order for the reimbursement to petitioners of their alleged lost earnings over
the subject premises, which is a beach resort, could have been considered as
compensation for their loss of the use and occupation of the property while it was
in the possession of the respondents, records do not show any evidence to sustain
the same. Thus, we find no error in the ruling of the RTC that the award for lost
earnings has no evidentiary or factual basis; and in the decision of the CA
affirming the same.

WHEREFORE, the instant petition is DENIED. The assailed Decision and

Resolution of the Court of Appeals dated October 14, 1999 and February 18, 2000,
respectively, are AFFIRMED.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

[G. R. No. 138258. January 18, 2002]

EDDIE HERRERA, ERNESTO T. TIJING, and CONRADO

BOLLOS, petitioners, vs. TEODORA BOLLOS and RICO
GO, respondents.

DECISION
PARDO, J.:

The Case

The case is a petition for review on certiorari of the decision of the Court of
Appeals affirming
[1]
that of the Regional Trial Court, Branch
44, Dumaguete City, which reversed the ruling of the municipal trial court that
it has jurisdiction over the case of forcible entry.

The Facts
 The facts, as found by the Court of Appeals, are as follows:

Ab initio, on August 5, 1993, Teodora Bollos commenced before the Municipal

Circuit Trial Court of Bayawan-Basay Civil Case No. 993, for forcible entry, solely
against Eddie Herrera alleging that the latter, sometime in the second week of 1993,
through stealth and strategy and taking advantage of the absence of Teodora, entered
and occupied her Sugarland known as Lot No. 20, GSS-615, located at Camandagan,
Maninyon, Bayawan, Negros Oriental. Teodora claims to have inherited said parcel,
being the only heir, from her deceased father, Alfonso Bollos, who died on December
10, 1992.

Defendant, Eddie Herrera, denied the allegations against him maintaining that he
entered and occupied not Lot No. 20, as claimed by Teodora, but Lot No. 21, GSS-
615, which is owned by Conrado Bollos, a brother of Teodoras father,
Alfonso. Further, Herrera said that his occupation of the property was not through
stealth or strategy but by virtue of a contract of lease executed between Conrado
Bollos, as lessor, and Ernesto Tijing, as lessee. Herrera is Tijings overseer on the land.

As a consequence, the complaint was twice amended, first, on March 23, 1994 to
include Ernesto T. Tijing as a party-defendant and much later on October 4, 1995, this
time to implead Conrado Bollos as an additional defendant.

After due proceedings, the first level court rendered its judgment dispositively ruling:

ACCORDINGLY, in the light of the foregoing considerations for plaintiffs failure to

make-out a forcible entry case because of lack of jurisdiction the above-entitled case
is hereby DISMISSED. Plaintiffs remedy should be reivendicatory (sic) action before
the proper forum.

SO ORDERED.

Given this 30 day of June, 1997, at Bayawan, Negros Oriental, Philippines.

th

(SGD.) RUDY T. ENRIQUEZ

Circuit Judge

(p. 11, MCTC Decision; p. 69, Rollo)

On Appeal to the Regional Trial Court of Dumaguete City, docketed as Civil Case No.
12014, the challenged verdict was reversed in a Decision dated October 21, 1997, the
decretal portion reads:
WHEREFORE, as prayed for by plaintiffs-appellants, judgment is hereby rendered
restoring Lot No. 20, GSS-615 to the plaintiffs and ejecting the defendants from the
said parcel of land. Defendants-appellees are condemned to solidarily pay plaintiffs-
appellants the following:

Actual Damages P50,000.00;

Moral Damages P25,000.00
Attorneys Fees - P 5,000.00

Reasonable rental/month from the date of this judgment of P2,000.00 and to pay the
costs.

SO ORDERED.

GIVEN this 21 day of October, 1997, in the City of Dumaguete, Philippines.

st

(SGD.) ALVIN L. TAN

Judge

(p. 13, RTC Decision; p. 27, Rollo) [2]

On March 12, 1998, petitioners filed with the Court of Appeals a petition
for review assailing the ruling of the regional trial court. [3]

On December 18, 1998, the Court of Appeals promulgated a decision, the

dispositive portion of which reads:

IN VIEW OF THE FOREGOING, the appealed decision is hereby affirmed, except

that the award of actual and moral damages therein contained are deleted. No
pronouncement as to costs.

SO ORDERED. [4]

On February 1, 1999, petitioners filed with the Court of Appeals a motion

for reconsideration of the above-cited decision. [5]

On March 8, 1999, the Court of Appeals denied the motion. [6]

Hence, this appeal. [7]

The Issues

The issues raised are:

 (a) Is the municipal trial court vested with jurisdiction over a second amended
complaint impleading a new defendant filed beyond one year from dispossession
alleging a case of forcible entry in the original action?
(b) May the regional trial court award moral and exemplary damages against
defendants in an appeal from a dismissal of the case for forcible entry by the lower
court? [8]

The Courts Ruling

We deny the petition.

Resolving the first issue, we emphasize the basic rule that jurisdiction of
the court over the subject matter of the action is determined by the allegations
of the complaint at the time of its filing, irrespective of whether or not the
plaintiff is entitled to recover upon all or some of the claims asserted
therein. What determines the jurisdiction of the court is the nature of the
[9]

action pleaded as appearing from the allegations in the complaint. The

averments therein and the character of the relief sought are the ones to be
consulted. [10]

In the case at bar, plaintiffs complaint, both original and amended,

contains sufficient allegations constituting an action for forcible entry, as
clearly alleged in paragraphs 4 and 5 of the complaint, to wit:

4. That plaintiffs and even their predecessor-in-interest Alfonso Bollos were in

peaceful, adverse, continuous possession of the property and in concepto de
dueno until the commission of the act or acts of dispossession or deprivation by the
defendant hereinafter mentioned.

5. That sometime in the second week of June, 1993, defendant pursuant to an

avaricious intent of enriching himself at the expense of the plaintiffs, through stealth
and strategy, and taking advantage of the absence of the latter, entered and occupied
the property in question and without any legal justification therefore, fertilized the
sugar cane rations growing thereon and planted the vacant portions with sugar cane. [11]

Thus, we find that the complaint alleged prior physical possession de

facto which the defendants disturbed by force, intimidation, threat, strategy or
stealth, against the will or without the consent of the plaintiffs, sufficient to
constitute a cause of action for forcible entry.
In fact, defendants admitted the truth of the foregoing facts in their answer
and first amended answer. The thrust of their defense was that they had
occupied Lot No. 21, not Lot No. 20, which is the land in question.
 On the second issue, the concept of damages in an action for forcible
entry and detainer cases is well defined in several cases. These damages
[12]

mean rents or the reasonable compensation for the use and occupation of the
premises, or fair rental value of the property. Temperate, actual, moral and
[13]

exemplary are neither rents nor reasonable compensation for the use and
occupation of the premises, nor fair rental value, and are not recoverable in
such cases. [14]

In the case at bar, the municipal trial court dismissed the case for lack of
jurisdiction, and the regional trial court reversed the dismissal but rendered
judgment ejecting the defendants from the parcel of land involved, and
condemning them to pay damages and attorneys fees. This is not correct. In
case of reversal, the case shall be remanded to the municipal trial court for
further proceedings. The regional trial court in reversing an appealed case
[15]

dismissing the action cannot decree the eviction of the defendants and award
damages. A court cannot take judicial notice of a factual matter in controversy.
The court may take judicial notice of matters of public knowledge, or which are
capable of unquestionable demonstration, or ought to be known to judges
because of their judicial functions. Before taking such judicial notice, the
[16]

court must allow the parties to be heard thereon. Hence, there can be no
[17]

judicial notice on the rental value of the premises in question without

supporting evidence.

The Judgment

IN VIEW WHEREOF, the Court DENIES the petition. However, the Court
SETS ASIDE the decisions of the Court of Appeals and the Regional Trial
[18]

Court. The Court remands the case to the municipal trial court for further
[19]

proceedings.
No costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Ynares-Santiago,
JJ., concur.
THIRD DIVISION

MAXIMO ALVAREZ, G.R. No. 143439

Petitioner,
Present:
 PANGANIBAN, J., Chairman,
SANDOVAL-GUTIERREZ,
- versus - CORONA,
CARPIO MORALES, and
GARCIA, JJ.

SUSAN RAMIREZ, Promulgated:

Respondent.
October 14, 2005
x---------------------------------------------------------------------------------------------x

DECISION

SANDOVAL-GUTIERREZ, J.:

Before us is a petition for review on certiorari[1] assailing the Decision[2] of the

Court of Appeals dated May 31, 2000 in CA-G.R. SP No. 56154,
entitled SUSAN RAMIREZ, petitioner, versus, HON. BENJAMIN M.
AQUINO, JR., as JUDGE RTC, MALABON, MM, BR. 72, and MAXIMO
ALVAREZ, respondents.

Susan Ramirez, herein respondent, is the complaining witness in Criminal

Case No. 19933-MN for arson[3] pending before the Regional Trial Court,
Branch 72, Malabon City. The accused is Maximo Alvarez, herein petitioner.
He is the husband of Esperanza G. Alvarez, sister of respondent.

On June 21, 1999, the private prosecutor called Esperanza Alvarez to the
witness stand as the first witness against petitioner, her husband. Petitioner and
his counsel raised no objection.

Esperanza testified as follows:

ATTY. ALCANTARA:

We are calling Mrs. Esperanza Alvarez, the wife of the

accused, Your Honor.

COURT:

Swear in the witness.

xxx

ATTY. MESIAH: (sic)

Your Honor, we are offering the testimony of this witness for

the purpose of proving that the accused Maximo Alvarez
committed all the elements of the crime being charged particularly
that accused Maximo Alvarez pour on May 29, 1998 gasoline in
the house located at Blk. 5, Lot 9, Phase 1-C, Dagat-dagatan,
Navotas, Metro Manila, the house owned by his sister-in-law
Susan Ramirez; that accused Maximo Alvarez after pouring the
gasoline on the door of the house of Susan Ramirez ignited and
set it on fire; that the accused at the time he successfully set the
house on fire (sic) of Susan Ramirez knew that it was occupied by
Susan Ramirez, the members of the family as well as Esperanza
Alvarez, the estranged wife of the accused; that as a
consequence of the accused in successfully setting the fire to the
house of Susan Ramirez, the door of said house was burned and
together with several articles of the house, including shoes, chairs
and others.

COURT:

You may proceed.

xxx

DIRECT EXAMINATION

ATTY. ALCANTARA:

xxx
 Q: When you were able to find the source, incidentally what was
the source of that scent?
A: When I stand by the window, sir, I saw a man pouring the
gasoline in the house of my sister (and witness pointing to
the person of the accused inside the court room).

Q: For the record, Mrs. Witness, can you state the name of that
person, if you know?
A: He is my husband, sir, Maximo Alvarez.

Q: If that Maximo Alvarez you were able to see, can you identify
him?
A: Yes, sir.

Q: If you can see him inside the Court room, can you please point
him?
A: Witness pointing to a person and when asked to stand and
asked his name, he gave his name as Maximo Alvarez.[4]

In the course of Esperanzas direct testimony against petitioner, the latter

showed uncontrolled emotions, prompting the trial judge to suspend the
proceedings.

On June 30, 1999, petitioner, through counsel, filed a motion[5] to disqualify

Esperanza from testifying against him pursuant to Rule 130 of the Revised
Rules of Court on marital disqualification.

Respondent filed an opposition[6] to the motion. Pending resolution of the

motion, the trial court directed the prosecution to proceed with the
presentation of the other witnesses.

On September 2, 1999, the trial court issued the questioned Order disqualifying
Esperanza Alvarez from further testifying and deleting her testimony from the
records.[7]The prosecution filed a motion for reconsideration but was denied in
the other assailed Order dated October 19, 1999.[8]

This prompted respondent Susan Ramirez, the complaining witness in

Criminal Case No. 19933-MN, to file with the Court of Appeals a petition
for certiorari[9]with application for preliminary injunction and temporary
restraining order.[10]

On May 31, 2000, the Appellate Court rendered a Decision nullifying and
setting aside the assailed Orders issued by the trial court.

Hence, this petition for review on certiorari.

The issue for our resolution is whether Esperanza Alvarez can testify
against her husband in Criminal Case No. 19933-MN.

Section 22, Rule 130 of the Revised Rules of Court provides:

Sec. 22. Disqualification by reason of marriage. During their

marriage, neither the husband nor the wife may testify for or against the
other without the consent of the affected spouse, except in a civil case by
one against the other, or in a criminal case for a crime committed by one
against the other or the latters direct descendants or ascendants.

The reasons given for the rule are:

1. There is identity of interests between husband and wife;

2. If one were to testify for or against the other, there is consequent
danger of perjury;
 3. The policy of the law is to guard the security and confidences of
private life, even at the risk of an occasional failure of justice, and to
prevent domestic disunion and unhappiness; and
4. Where there is want of domestic tranquility there is danger of
punishing one spouse through the hostile testimony of the other.[11]

But like all other general rules, the marital disqualification rule has its
own exceptions, both in civil actions between the spouses and in criminal cases
for offenses committed by one against the other. Like the rule itself, the
exceptions are backed by sound reasons which, in the excepted cases, outweigh
those in support of the general rule. For instance, where the marital and
domestic relations are so strained that there is no more harmony to be
preserved nor peace and tranquility which may be disturbed, the reason based
upon such harmony and tranquility fails. In such a case, identity of interests
disappears and the consequent danger of perjury based on that identity is non-
existent. Likewise, in such a situation, the security and confidences of private
life, which the law aims at protecting, will be nothing but ideals, which
through their absence, merely leave a void in the unhappy home.[12]

In Ordoo vs. Daquigan,[13] this Court held:

We think that the correct rule, which may be adopted in this

jurisdiction, is that laid down in Cargil vs. State, 35 ALR 133, 220
Pac. 64, 25 Okl. 314, wherein the court said:

The rule that the injury must amount to a

physical wrong upon the person is too narrow; and
the rule that any offense remotely or indirectly
affecting domestic harmony comes within the
exception is too broad. The better rule is that, when
an offense directly attacks, or directly and vitally
 impairs, the conjugal relation, it comes within the
exception to the statute that one shall not be a
witness against the other except in a criminal
prosecution for a crime committee (by) one against
the other.

Obviously, the offense of arson attributed to petitioner, directly impairs

the conjugal relation between him and his wife Esperanza. His act, as
embodied in the Information for arson filed against him, eradicates all the
major aspects of marital life such as trust, confidence, respect and love by
which virtues the conjugal relationship survives and flourishes.

As correctly observed by the Court of Appeals:

The act of private respondent in setting fire to the house of

his sister-in-law Susan Ramirez, knowing fully well that his wife
was there, and in fact with the alleged intent of injuring the latter,
is an act totally alien to the harmony and confidences of marital
relation which the disqualification primarily seeks to protect. The
criminal act complained of had the effect of directly and vitally
impairing the conjugal relation. It underscored the fact that the
marital and domestic relations between her and the accused-
husband have become so strained that there is no more harmony,
peace or tranquility to be preserved. The Supreme Court has held
that in such a case, identity is non-existent. In such a situation,
the security and confidences of private life which the law aims to
protect are nothing but ideals which through their absence, merely
leave a void in the unhappy home. (People v. Castaeda, 271
SCRA 504). Thus, there is no longer any reason to apply the
Marital Disqualification Rule.

It should be stressed that as shown by the records, prior to the

commission of the offense, the relationship between petitioner and his wife
was already strained. In fact, they were separated de facto almost six months
before the incident. Indeed, the evidence and facts presented reveal that the
preservation of the marriage between petitioner and Esperanza is no longer an
interest the State aims to protect.

At this point, it bears emphasis that the State, being interested in laying
the truth before the courts so that the guilty may be punished and the innocent
exonerated, must have the right to offer the direct testimony of Esperanza,
even against the objection of the accused, because (as stated by this Court
in Francisco[14]), it was the latter himself who gave rise to its necessity.

WHEREFORE, the Decision of the Court of Appeals is AFFIRMED. The

trial court, RTC, Branch 72, Malabon City, is ordered to allow Esperanza
Alvarez to testify against petitioner, her husband, in Criminal Case No. 19933-
MN. Costs against petitioner.

SO ORDERED.

ANGELINA SANDOVAL-GUTIERREZ
Associate Justice