De Guzman-Fuerte vs. Spouses Estomo

A complaint for unlawful detainer must specifically allege that the defendant’s possession was initially lawful—by contract or tolerance—and became unlawful only upon notice terminating that right; absent such jurisdictional allegations, the municipal trial court acquires no jurisdiction over the ejectment action. A bare claim of tolerance, unsupported by allegations or proof of overt acts of permission, does not suffice.

Fatima O. De Guzman-Fuerte asserted ownership of a parcel in Birmingham Homes, Dalig City 1, Antipolo City, covered by TCT No. R-55253, through foreclosure of a mortgage executed by Manuela Co. The Spouses Silvino S. Estomo and Concepcion C. Estomo asserted a prior claim to the same property, having acquired it from Homeowners Development Corporation through a Contract to Sell and registered it under TCT No. 407613. The dispute implicated the summary ejectment remedy under Rule 70 of the Rules of Court, under which municipal trial courts exercise limited jurisdiction over unlawful detainer only when the complaint alleges that possession was initially lawful and later withheld after termination of the right to possess.

Fatima O. De Guzman-Fuerte claimed ownership of the property at Block 3, Lot 2, Birmingham Homes, Dalig City 1, Antipolo City, covered by Transfer Certificate of Title No. R-55253. According to Fuerte, Manuela Co executed a Deed of Real Estate Mortgage over the property in her favor; when Co failed to pay the loan, Fuerte caused foreclosure proceedings and eventually obtained ownership. A writ of possession was issued, but it was returned unsatisfied because Co no longer resided at the property and the Spouses Estomo and their family occupied it. Fuerte alleged that only upon the return of the writ did she discover and verify that the Spouses Estomo were in possession. In a letter dated December 1, 2008, she demanded that they vacate and surrender possession and pay corresponding compensation; they refused.

In their Answer, the Spouses Estomo denied illegally occupying the property and denied the existence of the December 1, 2008 letter. They averred that they acquired the property from Homeowners Development Corporation on February 15, 1999 through a Contract to Sell, registered it under their names under TCT No. 407613, and had used it as their family home since 2000. Sometime in 2006, Concepcion sought the services of Co, a real estate broker, to assist her in securing a loan. Co obtained the certificate of title to show to potential creditors but never returned it. The TCT was cancelled by an alleged Absolute Sale of Real Property executed on June 22, 2006, when Silvino was out of the country as a seaman, and TCT No. R-39632 was then issued under Co’s name. On July 13, 2006, Co mortgaged the property for ₱800,000.00.

Consequently, the Spouses Estomo filed an annulment case against Co and Fuerte on January 30, 2007. When they were served with the writ of possession in Fuerte’s favor, they filed a terceria with the sheriff, a motion to recall the writ of possession, and asked for consolidation of the land registration case with the annulment case on August 5, 2008. In Orders dated October 28, 2008 and October 30, 2008, the trial court quashed the writ and directed consolidation of the cases.

The Spouses Estomo prayed that the complaint be dismissed on the ground that its allegations were insufficient to establish a cause of action for unlawful detainer. They argued that, by Fuerte’s own allegation, their entry to the property was unlawful from the beginning; that the case could not be considered forcible entry because it was never alleged that their entry was by means of force, intimidation, threat, stealth, or strategy; and that prescription had set because Fuerte was aware of their possession when they filed the annulment case on January 30, 2007.

Fuerte filed her unlawful detainer complaint dated August 10, 2009. The MTCC found that she failed to attach a copy of the demand letter and to establish that it was duly received by the spouses. The RTC later found that the December 1, 2008 demand letter existed and was sent through registered mail under Registry Receipt No. 5209 of the Antipolo City Post Office. The Supreme Court’s analysis turned on the complaint’s own allegations, which stated that the Spouses Estomo were occupying the property without Fuerte’s consent, permission, or approval and that she demanded they vacate; the December 1, 2008 demand letter likewise characterized their occupancy as without her consent, permission, and approval and therefore unlawful. The complaint contained no allegation that Fuerte or her predecessor-in-interest tolerated the spouses’ possession under an express or implied contract, nor any overt act of permission for them to occupy the property.

• Nature of Complaint and Jurisdiction: Petitioner argued that the CA erred in ruling that the complaint did not constitute unlawful detainer and that the MTCC had no jurisdiction; she maintained that the CA’s conclusion lacked legal and factual basis.
• Tolerance and Demand: Petitioner maintained that a purchaser from a vendor no longer occupying the property need not prove how the present possessor came into occupation; as long as she fulfills the demand to vacate, she may bring an unlawful detainer action; prior to the expiration of the period she granted, the spouses’ occupation was by mere tolerance, which became illegal upon expiration.
• Remand under Section 8, Rule 40: Petitioner asseverated that the CA’s dismissal defied Section 8, Rule 40, Rules of Court, and that the CA should have remanded the case to the RTC as the appellate court with original and exclusive jurisdiction over the nature and subject matter of the complaint; dismissal invited multiplicity of suits.

• Insufficient Cause of Action: Respondents prayed that the complaint be dismissed on the ground that the allegations were insufficient to establish a cause of action for unlawful detainer; by Fuerte’s own allegation, their entry was unlawful from the beginning.
• Forcible Entry Not Alleged: Respondents argued that the case could not be considered forcible entry because it was never alleged that their entry was by means of force, intimidation, threat, stealth, or strategy.
• Prescription: Respondents argued that prescription had set because Fuerte was aware that they possessed the property when they filed the annulment of deed of absolute sale and real estate mortgage against Co and Fuerte on January 30, 2007.
• Ownership and Possession: Respondents denied illegal occupation and denied the December 1, 2008 letter; they averred that they acquired the property from Homeowners Development Corporation on February 15, 1999 through a Contract to Sell, registered it under TCT No. 407613, and had used it as their family home since 2000; Co later obtained and failed to return the title, leading to cancellation under an alleged Absolute Sale and mortgage to Fuerte.

• Cause of Action and Jurisdiction: Whether the complaint sufficiently alleged a cause of action for unlawful detainer so as to vest the MTCC with jurisdiction.
• Initial Lawful Possession/Tolerance: Whether Fuerte sufficiently alleged and proved that the Spouses Estomo’s possession was initially lawful by tolerance or contract and became illegal upon demand.
• Remand and Multiplicity: Whether the CA should have remanded the case to the RTC under Section 8, Rule 40 instead of dismissing it, and whether dismissal invites multiplicity of suits.

• Cause of Action and Jurisdiction: No. The complaint failed to state a cause of action for unlawful detainer because it did not allege the jurisdictional fact that possession was initially lawful; the MTCC therefore did not acquire jurisdiction.
• Initial Lawful Possession/Tolerance: No. The bare claim of tolerance was unsupported; acts of tolerance must be proved by overt acts, and the complaint and demand letter characterized the spouses’ possession as unlawful from the start.
• Remand and Multiplicity: No. Dismissal did not invite multiplicity; an ejectment judgment is conclusive only on possession and does not bar a separate action on ownership, and Section 8, Rule 40 did not require remand because the RTC exercised appellate jurisdiction and could not be vested with original jurisdiction by the parties’ participation.

• Cause of Action and Jurisdiction: Jurisdiction over the subject matter is conferred by law and determined by the allegations in the complaint, which must contain a concise statement of the ultimate facts constituting the plaintiff’s cause of action. The nature of the action and the court’s jurisdiction are determined by the averments and the relief sought, irrespective of whether the plaintiff is entitled to recover on all or some claims; once vested, jurisdiction remains. Unlawful detainer is an action to recover possession from one who illegally withholds possession after the expiration or termination of the right to hold possession under any contract, express or implied. The defendant’s possession is originally legal but becomes illegal due to the expiration or termination of the right to possess. A complaint sufficiently alleges unlawful detainer if it states that (a) the defendant’s possession was initially by contract with or by tolerance of the plaintiff; (b) it became illegal upon notice of termination; (c) the defendant remained in possession and deprived the plaintiff of enjoyment; and (d) the complaint was instituted within one year from the last demand. Here, the complaint alleged that the Spouses Estomo were occupying the property illegally and without Fuerte’s consent, permission, or approval; it did not allege that Fuerte or her predecessor tolerated their possession under an express or implied contract, nor any overt act of permission. The demand letter likewise stated that their occupancy was without consent, permission, and approval and therefore unlawful. The complaint thus contradicted the requirement that possession be initially lawful. Because the complaint fell short of the jurisdictional facts, the MTCC failed to acquire jurisdiction, and the CA correctly dismissed the unlawful detainer case.
• Initial Lawful Possession/Tolerance: To show that possession was initially lawful, the basis of such lawful possession must be established. Acts of tolerance must be proved by overt acts indicative of the plaintiff’s or predecessor’s tolerance or permission for the defendant to occupy the disputed property. There must be supporting evidence showing when the respondents entered the property, who granted them entry, and how the entry was effected. Without such allegations and evidence, a bare claim of tolerance cannot be upheld. Fuerte’s December 1, 2008 demand letter demanded that the spouses immediately vacate, contrary to her claim that she granted them a period during which she tolerated their possession. She therefore failed to satisfy the requirement that the supposed act of tolerance was present from the start of the Spouses Estomo’s possession. The absence of this first requisite was significant in light of the spouses’ claim that they occupied the property as owners and had filed an annulment of sale and real estate mortgage against Co and Fuerte even before foreclosure.
• Remand and Multiplicity: A summary action for ejectment is distinct from a plenary action for recovery of possession or ownership. Unlawful detainer is limited to the question of possession de facto. Unlawful detainer and forcible entry are the two forms of ejectment suit that may be filed to recover possession of real property. Accion publiciana is the plenary action to recover the right of possession, while accion reivindicatoria is the action to recover ownership, including recovery of possession. Ejectment suits are designed to summarily restore physical possession without prejudice to the settlement of opposing claims of juridical possession in appropriate proceedings. A judgment in forcible entry or unlawful detainer does not bar an action between the same parties respecting title or ownership because there is no identity of causes of action between ejectment and accion reivindicatoria; such judgment is conclusive only as to possession and does not bind title or affect ownership. Thus, dismissal of the unlawful detainer case did not invite multiplicity of suits. As to Section 8, Rule 40, the first paragraph contemplates an appeal from an order of dismissal without trial on the merits, while the second paragraph deals with an appeal from an order of dismissal after the case was tried on the merits; both involve lack of jurisdiction. The provision ordains the RTC not to dismiss cases appealed to it from the first-level court which tried the same albeit without jurisdiction, but to decide the case on the merits. In this case, the RTC treated the case as an appeal and discussed the merits; the CA decided the case based on the RTC judgment issued in the exercise of its appellate jurisdiction. Jurisdiction over the subject matter is conferred only by law and cannot be determined or set aside by the courts or the parties; neither active participation nor estoppel can confer original and exclusive jurisdiction where the court or tribunal only wields appellate jurisdiction. Although a registered owner is entitled to possession, the owner cannot simply wrest possession from the actual occupant; the owner must resort to the proper remedy and satisfy the conditions necessary for that action to prosper. Fuerte chose unlawful detainer but failed to sufficiently allege the facts necessary to vest the MTCC with jurisdiction. The CA therefore did not commit reversible error in dismissing the complaint.

• Jurisdiction Determined by Allegations in the Complaint — Jurisdiction over the subject matter is conferred by law and determined by the allegations in the complaint, including the character of the relief sought; it is not dependent on whether the plaintiff ultimately proves entitlement, and once vested it remains. The Court applied this by examining the complaint’s averments, finding no allegation of initial lawful possession or tolerance, and concluding the MTCC never acquired jurisdiction over the unlawful detainer case.
• Requisites of Unlawful Detainer — A complaint sufficiently alleges unlawful detainer if it states: (a) the defendant’s possession was initially by contract with or by tolerance of the plaintiff; (b) possession became illegal upon notice of termination of the right to possess; (c) the defendant remained in possession and deprived the plaintiff of enjoyment; and (d) the complaint was instituted within one year from the last demand to vacate. The Court found the first requisite absent because the complaint and demand letter characterized the spouses’ occupancy as unlawful from the start.
• Tolerance Must Be Proved by Overt Acts — A bare claim of tolerance is insufficient; acts of tolerance must be proved by overt acts indicative of the plaintiff’s or predecessor’s tolerance or permission, and there must be supporting evidence of when the defendant entered, who granted entry, and how entry was effected. The Court held Fuerte’s unsupported tolerance claim could not sustain the unlawful detainer complaint.
• Ejectment vs. Accion Publiciana vs. Accion Reivindicatoria — Unlawful detainer and forcible entry are summary ejectment actions limited to possession de facto; accion publiciana is a plenary action to recover the right of possession; accion reivindicatoria is an action to recover ownership, including possession. A judgment in forcible entry or unlawful detainer is conclusive only as to possession and does not bind title or ownership, and there is no identity of causes of action between ejectment and an ownership action. The Court used this distinction to reject the argument that dismissal of the unlawful detainer case would invite multiplicity of suits.
• Section 8, Rule 40 and Lack of Jurisdiction — The first paragraph of Section 8, Rule 40 governs an appeal from an order dismissing a case without trial on the merits, while the second paragraph governs an appeal from an order of dismissal after trial on the merits; both involve lack of jurisdiction. The provision directs the RTC not to dismiss cases appealed from the first-level court that tried the case without jurisdiction, but to decide the case on the merits if it has original jurisdiction. The Court held that the RTC exercised appellate jurisdiction and that jurisdiction over the subject matter cannot be conferred by the parties’ participation or estoppel.
• Registered Owner Must Resort to the Proper Remedy — A registered owner is entitled to possession, but cannot simply wrest possession from whoever is in actual occupation; the owner must resort to the proper remedy and satisfy the conditions necessary for that action to prosper. The Court applied this by holding that Fuerte chose unlawful detainer but failed to allege the jurisdictional facts required for that remedy.

• "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 latter's 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." — This passage states the four requisites of a sufficient unlawful detainer complaint and is the doctrinal framework the Court applied to find the first requisite absent.
• "As the allegations in the complaint determine both the nature of the action and the jurisdiction of the court, the complaint must specifically allege the facts constituting unlawful detainer. In the absence of these factual allegations, an action for unlawful detainer is not the proper remedy and the municipal trial court does not have jurisdiction over the case." — This is the ratio decidendi on jurisdiction: because the complaint did not allege initial lawful possession, the MTCC had no authority to entertain the ejectment suit.
• "Acts of tolerance must be proved showing the overt acts indicative of his or his predecessor's tolerance or permission for them to occupy the disputed property." — This defines the evidentiary requirement for tolerance and explains why Fuerte’s bare allegation of tolerance failed.
• "A judgment rendered in a forcible entry case, or an unlawful detainer as in this case, will not bar an action between the same parties respecting title or ownership because between a case for forcible entry or unlawful detainer and an accion reinvindicatoria, there is no identity of causes of action." — This passage rejects the multiplicity-of-suits argument by distinguishing ejectment from an ownership action and confirming that a detainer judgment binds only possession.

• Padlan vs. Dinglasan, 707 Phil. 83, 91 (2013) — Cited for the rule that jurisdiction over the subject matter is conferred by law and determined by the allegations in the complaint.
• Spouses Norberte vs. Spouses Mejia, 755 Phil. 234, 240 (2015) — Cited for the summary nature of ejectment suits and the exclusive original jurisdiction of municipal trial courts over unlawful detainer and forcible entry.
• Canlas vs. Tubil, 616 Phil. 915, 924 (2009) — Cited for the definition of unlawful detainer as an action to recover possession from one who illegally withholds possession after expiration or termination of the right to hold possession.
• Macaslang vs. Spouses Zamora, 644 Phil. 337, 351 (2011) — Cited for the four requisites of a sufficient complaint for unlawful detainer.
• Spouses Golez vs. Heirs of Bertuldo, 785 Phil. 801, 812 (2016) — Cited for the rule that absence of factual allegations of unlawful detainer means the action is not the proper remedy and the municipal trial court lacks jurisdiction.
• Quijano vs. Amante, 745 Phil. 40, 52 (2014) — Cited for the requirement that the basis of the defendant’s initially lawful possession must be established.
• Ocampo vs. Heirs of Bernardino Dionisio, 744 Phil. 716, 724 (2014) — Cited for the requirement of supporting evidence on when the respondents entered, who granted entry, and how entry was effected.
• Echanes vs. Spouses Hailar, G.R. No. 203880, August 10, 2016, 800 SCRA 93, 103 — Cited for the rule that a bare claim of tolerance cannot be upheld without allegations and evidence.
• Heirs of Casilang, Sr. vs. Casilang-Dizon, 704 Phil. 397, 410 (2013) — Cited for the three kinds of actions to judicially recover possession: ejectment, accion publiciana, and accion reivindicatoria.
• Barrientos vs. Rapal, 669 Phil. 438, 444, 447 (2011) — Cited for the purpose of ejectment suits to summarily restore physical possession without prejudice to juridical possession.
• Spouses Ocampo vs. Heirs of Dionisio, 744 Phil. 716, 728 (2014) — Cited for the rule that a judgment in forcible entry or unlawful detainer does not bind title or ownership and does not bar a separate ownership action.
• Serrano vs. Spouses Gutierrez, 537 Phil. 187, 197 (2006) — Cited for the interpretation of Section 8, Rule 40, distinguishing appeals from dismissals without trial and after trial on the merits.
• Maslag vs. Monzon, 711 Phil. 274, 285 (2013) — Cited for the rule that jurisdiction over the subject matter is conferred only by law and cannot be conferred by the parties’ active participation or estoppel.
• Suarez vs. Sps. Emboy, 729 Phil. 315, 329 (2014) — Cited for the rule that a registered owner must resort to the proper remedy and satisfy its conditions to recover possession from an actual occupant.

• Section 1, Rule 70, Rules of Court — Defines who may institute proceedings for forcible entry and unlawful detainer and the one-year period. The Court applied it by requiring the complaint to embody facts bringing the plaintiff clearly within the provision; because the complaint did not allege initially lawful possession, it failed to vest jurisdiction in the MTCC.
• Section 2, Rule 70, Rules of Court — Requires the lessor to proceed against the lessee only after demand to pay or comply and to vacate, with specified modes of service. The RTC relied on this in finding that registered mail service of the December 1, 2008 demand was substantial compliance, but the Supreme Court’s affirmance of the dismissal rested on the complaint’s failure to state a cause of action for unlawful detainer.
• Section 8, Rule 40, Rules of Court — Governs appeal from orders dismissing a case without trial and lack of jurisdiction. The Court explained that the first paragraph covers dismissal without trial on the merits, while the second covers dismissal after trial on the merits; both involve lack of jurisdiction. It held that the RTC exercised appellate jurisdiction and that jurisdiction cannot be conferred by the parties’ participation or estoppel.
• Section 18, Rule 70, Rules of Court — Provides that a judgment in forcible entry or detainer is conclusive only as to possession and does not bind title or affect ownership. The Court used this to hold that dismissal of the unlawful detainer case would not bar a separate ownership action and did not invite multiplicity of suits.

Antonio T. Carpio (Acting Chief Justice, Chairperson), Estela M. Perlas-Bernabe, Alfredo Benjamin S. Caguioa, and Andres B. Reyes, Jr.