Facts:

Respondents Renato and Melba Zamora filed a complaint for unlawful detainer in the MTCC
against petitioner Macaslang, alleging that the petitioner sold to them a residential land and that
the petitioner requested to live in the house with a promise to vacate. The respondents demanded
for a year yet petitioner failed or refused to vacate.

Petitioner did not file an answer and she was declared in default. The MTCC ruled in favor of the
respondents Zamora. The petitioner appealed to the RTC and averred two reversible errors: (1)
extrinsic fraud was committed against her and (2) existence of her meritorious defense of nullity
of sale. The RTC resolved the appeal in favor of petitioner and dismissing the respondents’
complaint for failure to state a cause of action and lack of prior demand to vacate.

Respondent appeal to the CA and the RTC’s decision was reversed for ruling on grounds never
raised, assigned, or argued on by the petitioner.

Issues:

1. Whether or not the CA correctly found that the RTC committed reversible error in ruling
on issues not raised by the petitioner in her appeal
2. Whether or not the CA correctly found that the complaint stated a valid cause of action
3. Whether or not the CA erred in finding that there was a valid demand to vacate made by
the respondents on the petitioner
4. Whether or not there was a violation of the Rules on Summary procedure that must be
noted and corrected

Held

1. No
2. Yes
3. Yes
4. Yes

Ruling

1. The RTC in its appellate jurisdiction may rule upon an issue not raised on appeal. CA’s
contention might have been correct if the appeal had been the first appeal from the RTC
to the CA or another superior court, in which instance, Sec 8 of Rule 51 imposes the
express limitation of the review to only those specified in the assignment of errors, but
here, this is a, MTC to RTC appeal governed by a specific rule for unlawful detainer
cases. Sec 18 of Rule 70 provides that MTC judgment may be appealed to the RTC
which shall decide the same on the basis of the entire record. Consequently, the CA
improperly disallowed the consideration and resolution of the two errors despite their
being: (a) Necessary in arriving at a just decision and a complete resolution of the case;
 and (b) Matters of record having some bearing on the issues submitted that the lower
court ignored.
2. A complaint for unlawful detainer is sufficient if it alleges that the withholding of
possession or the refusal is unlawful without necessarily employing the terminology of
the law. Further, a complaint sufficiently alleges a cause of action for unlawful detainer if
it states the following:
a. Initially, the possession of the property by the defendant was by contract with or
by tolerance of the plaintiff;
b. Eventually, such possession became illegal upon notice by the plaintiff to the
defendant about the termination of the latters right of possession;
c. Thereafter, the defendant remained in possession of the property and deprived the
plaintiff of its enjoyment; and
d. Within one year from the making of the last demand to vacate the property on the
defendant, the plaintiff instituted the complaint for ejectment.
3. In resolving whether the complaint states a cause of action or not, only the facts alleged
in the complaint are considered. The test is whether the court can render a valid
judgment on the complaint based on the facts alleged and the prayer asked for. Also, the
demand not being to pay rent and to vacate did not render the cause of action deficient.
Based on the complaint, the petitioner’s possession was allegedly based on the
respondent’s tolerance, not on any contract between them. Hence, the demand to vacate
sufficed.
4. Ejectment was not proper due to defense of ownership being established. Respondent’s
cause of action is based on right to posses resulting from ownership but exhibits show
that the real transaction is one of equitable mortgage not sale when the land was sold for
P100,000 when the demand letter was for a sum of P1,600,000. Further, the
circumstances of the case are within the context of Article 1602 of the Civil Code.
5. MTC committed procedural lapses that must be noted and corrected. First, the MTCCs
granting of the respondents motion to declare the petitioner in default following her
failure to file an answer is expressly prohibited under Sec 13 Rule 70 of the Rules of
Court, the defendants failure to file an answer under Rule 70 of the Rules of Court might
result to a judgment by default, not to a declaration of default. Second, the MTCC’s
reception of the oral testimony of respondent Melba Zamora was in violation of Sec 10
and 11 of the same rule where it has envisioned the submission only of affidavits of the
witnesses (not oral testimony) and other proofs on the factual issues defined in the order
issued within five days from the termination of the preliminary conference, and has
permitted the trial court, should it find the need to clarify material facts, to thereafter
issue an order during the 30-day period from submission of the affidavits and other
proofs specifying the matters to be clarified, and requiring the parties to submit affidavits
or other evidence upon such matters within ten days from receipt of the order.

Petitioner for certiorari is granted and complaint for unlawful detainer is dismissed.