Estate of Valeriano C. Bueno and Genoveva I. Bueno vs. Justice Eduardo B. Peralta, Jr.

An unlawful detainer action grounded on mere tolerance fails absent proof of overt acts showing how and when entry was permitted and possession became unlawful; a prior final judgment on ownership is res judicata, and the one-year period is reckoned from the original demand, not subsequent reminders.

The property at No. 3450 Magistrado Villamor St., Lourdes Subdivision, Sta. Mesa, Manila was registered in the name of Spouses Valeriano C. Bueno and Genoveva I. Bueno under Transfer Certificate of Title No. 47603 (RT-192). The Peralta family occupied the property beginning in the early 1960s, a period when Atty. Eduardo M. Peralta, Sr. served as one of the lawyers of the Bueno spouses and their corporations. A separate case, Estate of Bueno vs. Estate of Peralta, Sr., later adjudicated the ownership of the property in favor of the Peralta estate, a final judgment that became central to the present ejectment dispute.

The subject property is a residential house and lot at No. 3450 Magistrado Villamor St., Lourdes Subdivision, Sta. Mesa, Manila, covered by Transfer Certificate of Title No. 47603 (RT-192) in the names of Spouses Valeriano C. Bueno and Genoveva I. Bueno. During their lifetime, the spouses engaged Atty. Eduardo M. Peralta, Sr., father of respondent Associate Justice Eduardo B. Peralta, Jr., as one of their lawyers for personal and business dealings. According to the Estate of Bueno, the spouses, out of kindness, tolerance, and generosity, allowed Atty. Peralta and his family to occupy the property without any contract; no rentals were collected, but the Peralta family paid water and electricity bills and real property taxes. This arrangement continued after Atty. Peralta died on December 23, 1983 and his wife died on July 9, 1990, with their children remaining on the property.

Before Bueno passed away, he personally notified the heirs of Spouses Peralta to vacate the property. Instead of complying, the Peralta heirs filed numerous criminal and civil suits against Bueno, including a complaint for specific performance by the Estate of Peralta, represented by Dr. Edgardo B. Peralta, to compel Bueno to execute a deed of conveyance over the property in favor of the Estate of Peralta.

Several years after the first unheeded demand, the Estate of Bueno again demanded that the Peralta heirs vacate. On May 16, 2001, it made a final demand on Edgardo and Edmundo B. Peralta to vacate and pay P5,000.00 monthly rental from July 10, 1990 until turnover. When they disregarded the demand, the Estate filed an unlawful detainer complaint against Edgardo and Edmundo, docketed as Civil Case No. 170694. On June 29, 2001, the MeTC dismissed the case upon motion of Edgardo and Edmundo after finding that the actual occupant and possessor was Associate Justice Peralta. The Estate’s motion for reconsideration was denied, as was its motion to implead Associate Justice Peralta and admit an amended complaint. On October 28, 2003, after several pleadings, the MeTC dismissed Civil Case No. 170694 without prejudice. Edgardo and Edmundo moved for reconsideration seeking dismissal with prejudice, but this was denied; their elevation to the RTC was dismissed, the CA affirmed, and the Supreme Court denied their petition in a Resolution dated March 3, 2010.

On February 28, 2011, the Estate sent another demand letter, this time addressed to Associate Justice Peralta, requiring him to vacate the property and pay P5,000.00 per month beginning July 10, 1990 until he finally vacated. When he did not heed the demand, the Estate instituted the present complaint for unlawful detainer before the MeTC of Manila. The Estate alleged that the Spouses Bueno had allowed the Peralta family to occupy the property by mere tolerance and that Associate Justice Peralta’s possession became unlawful upon demand.

Associate Justice Peralta denied the tolerance claim and insisted that the property was payment or partial consideration for the legal services rendered by his father as one of the Bueno family’s lawyers. He contended that ownership and possession had been explicitly conveyed by the Bueno family to his family since the early 1960s, citing family entries in a Holy Bible, his father’s assertion in a suit filed by Philippine Bank of Communication that Bueno had given the premises as a Christmas gift and in consideration of legal services, and testimonies in Civil Case No. 96-76696. He also pointed to his family’s substantial improvements and payment of utility and other bills as indicia of exclusive dominion. The MeTC found that no evidence showed how and when entry or dispossession began, while the CA found that the Peralta family had occupied the property since 1962, paid utility bills and real property taxes, and made improvements, exercising open, adverse, public, and continuous possession in the concept of an owner.

• Ownership and Right to Possession: Petitioner argued that as the registered owner of the disputed property and the party that had declared it for taxation purposes, it is entitled to possession over the subject property.
• Tolerance: Petitioner maintained that Associate Justice Peralta and his predecessors were allowed to occupy the disputed property by mere tolerance borne out of the Estate’s benevolence and generosity, and that failure to institute an action to compel the Estate to execute a deed of conveyance showed that the Peralta family acquired no right of ownership.
• Unlawful Possession Upon Demand: Petitioner contended that Associate Justice Peralta’s possession became unlawful from the moment he was demanded to vacate on February 28, 2011.
• Inapplicability of Reyes, Sr. vs. Heirs of Forlales: Petitioner argued that the CA’s reliance on Reyes, Sr. vs. Heirs of Forlales was misplaced because the May 16, 2001 demand and the earlier unlawful detainer case were brought against Edgardo and Edmundo, not against Associate Justice Peralta; thus, the one-year period could not be reckoned from the first demand, and the February 28, 2011 demand was not made to circumvent the one-year limitation period.

• Procedural Defect: Respondent countered that the petition must be dismissed outright for being procedurally defective as it raises a factual question beyond the province of a petition for review on certiorari under Rule 45.
• Insufficiency of the Complaint: Respondent argued that the complaint was inadequate because it failed to state factual matters concerning when entry or occupation by tolerance started, how his family obtained possession, and how and when dispossession started.
• Failure to Prove Tolerance: Respondent maintained that the Estate utterly failed to prove that he or the Peralta family came into possession by mere tolerance; on the contrary, the family’s occupancy since 1962, coupled with overt acts of dominion through improvements, negated tolerance.
• Title and Tax Declarations: Respondent argued that the reconstituted title and tax declarations adduced by the Estate were not indicative of ownership, and that even assuming they were proofs of ownership, the Estate failed to establish by preponderant evidence that it was entitled to physical possession.
• Prior Ownership Judgment: Respondent contended that the Supreme Court in Estate of Bueno vs. Estate of Peralta, Sr. had finally resolved that the rightful owner of the disputed property is the Peralta family; since the Estate is not the owner, it had no power to tolerate the Peralta family’s possession.

• Sufficiency of Complaint: Whether the complaint sufficiently alleged a cause of action for unlawful detainer.
• Proof of Tolerance: Whether petitioner proved that respondent’s possession was initially by mere tolerance.
• Res Judicata: Whether the prior final judgment in Estate of Bueno vs. Estate of Peralta, Sr. barred petitioner’s claim of ownership and tolerance.
• Effect of Rental Demand: Whether petitioner’s prayer for rental payments contradicted its claim of possession by tolerance.
• One-Year Limitation: Whether the unlawful detainer complaint was filed within one year from the original demand to vacate.
• Proper Remedy: Whether the CA correctly ruled that the proper remedy was accion publiciana or accion reivindicatoria.

• Sufficiency of Complaint: Yes. The complaint sufficiently alleged the jurisdictional facts of unlawful detainer, including initial possession by tolerance, demand, continued possession, and institution of the suit within one year from the last demand.
• Proof of Tolerance: No. Petitioner failed to prove overt acts of tolerance; no evidence showed how and when respondent or his predecessors entered the property or how and when permission to occupy was given.
• Res Judicata: Yes. The prior final judgment recognizing the Peralta estate as the rightful owner constitutes res judicata by conclusiveness of judgment and bars petitioner’s claim of ownership as basis for tolerance.
• Effect of Rental Demand: Yes. The prayer for P5,000.00 monthly rentals contradicted the existence of possession by tolerance and implied that tolerance had ceased as early as 2001.
• One-Year Limitation: No. The one-year period is reckoned from the original demand on August 30, 2002, not from subsequent reminder demands; the present suit was filed beyond one year.
• Proper Remedy: Yes. The proper remedy to recover possession based on ownership is accion publiciana or accion reivindicatoria, not the summary action of unlawful detainer.

• Sufficiency of Complaint: Under Hidalgo vs. Velasco, a complaint sufficiently alleges a cause of action for unlawful detainer if it recites that the defendant’s possession was initially by contract or tolerance, that such possession became illegal upon notice of termination, that the defendant remained in possession and deprived the plaintiff of enjoyment, and that the plaintiff instituted the complaint within one year from the last demand. These averments are jurisdictional and must appear on the face of the complaint. The complaint contained these allegations, so it made out a case for unlawful detainer. However, the allegations still had to be proven.
• Proof of Tolerance: Unlawful detainer requires that possession was initially lawful, and if the claim is that possession was by mere tolerance, the acts of tolerance must be proved by overt acts indicative of the plaintiff’s tolerance or permission. Mere allegation is not evidence. No evidence was adduced to show how and when respondent or his predecessors entered the subject lot, or how and when permission to occupy was given. The fact that respondent’s father served as one of the lawyers of the Bueno spouses and their corporations did not, by itself, prove that the occupation was out of benevolence or kindness. No affidavit of the Spouses Bueno or any document attested to the alleged tolerance. The CA correctly found that tolerance was not proven with convincing evidence.
• Res Judicata: In Estate of Bueno vs. Estate of Peralta, Sr., the Court recognized that the oral contract between Bueno and Atty. Peralta for the transfer of the subject property as consideration for legal services had been validly ratified through the failure of the Estate of Bueno to object to the presentation of oral evidence and by its acceptance of benefits, thereby removing the contract from the application of the Statute of Frauds. The Court affirmed the decision ordering the Estate of Bueno to execute a deed of conveyance in favor of the Estate of Peralta, Sr. That decision had attained finality after the denial of the motion for reconsideration and the directive for entry of judgment. It was rendered by the Court in the exercise of appellate jurisdiction, after due consideration of the evidence, and involved parties with identity of interest. All elements of res judicata by conclusiveness of judgment are present. The Court must take judicial notice of its own final decision, and petitioner cannot feign ignorance of it. Thus, petitioner’s basis—ownership over the disputed property—to justify its claim of tolerance has no leg to stand on.
• Effect of Rental Demand: Petitioner sought payment of P5,000.00 for the use and occupation of the property from May 16, 2001 until the property is finally vacated. In Heirs of Melchor vs. Melchor, the Court ruled that a prayer for rental payment contradicts the existence of possession by tolerance. Such a claim implies that as early as 2001, possession by tolerance had ceased to exist.
• One-Year Limitation: Even if the Court were to disregard the foregoing and take petitioner’s claim of tolerance at face value, the complaint was still not filed within one year from the time petitioner was unlawfully deprived of the property. While the one-year period cannot be reckoned from May 16, 2001 because the demand at that time was not addressed to respondent, the counting cannot begin only on February 28, 2011. Records disclose that as early as August 30, 2002, petitioner already sent a final demand upon respondent to vacate the subject premises. In Racaza vs. Gozum, the Court ruled that subsequent demands that are merely reminders or reiterations of the original demand do not operate to renew the one-year reglementary period, and the period is still reckoned from the date of the original demand. Reyes, Sr. vs. Heirs of Forlales explained that this rule prevents the circumvention of the one-year limitation period by sending demand letter after demand letter. Petitioner had one year from August 30, 2002 within which to file a complaint for unlawful detainer against respondent. The present ejectment suit was filed beyond that period.
• Proper Remedy: Because ownership was adjudicated to the Peralta estate, possession by tolerance was not proven, and more than one year had elapsed, the summary action of unlawful detainer was improper. The CA correctly ruled that petitioner availed of the wrong remedy in its pursuit to recover possession of the disputed property, and that the proper remedy is accion publiciana or accion reivindicatoria.

• Unlawful Detainer (Accion Interdictal) — Unlawful detainer is a summary action where one illegally withholds possession of real property after the expiration or termination of the right to hold possession under a contract, express or implied. The complaint must allege, as jurisdictional facts, that possession was initially lawful by contract or tolerance, that it became illegal upon notice of termination, that the defendant remained in possession and deprived the plaintiff of enjoyment, and that the complaint was filed within one year from the last demand. In this case, the complaint sufficiently alleged these facts, but the action still failed because the allegations were not proven.
• Possession by Tolerance — When a plaintiff claims that the defendant’s possession is by mere tolerance, the acts of tolerance must be proved by overt acts indicative of the plaintiff’s tolerance or permission. Bare allegations are not evidence. A prayer for rental payment contradicts the existence of possession by tolerance because it implies that tolerance has ceased. Here, no evidence showed how and when entry or permission was given, and the prayer for P5,000.00 monthly rentals further negated tolerance.
• Res Judicata by Conclusiveness of Judgment — Res judicata has two concepts: bar by prior judgment under Section 47(b) of Rule 39, and conclusiveness of judgment under Section 47(c). Bar by prior judgment requires identity of parties, subject matter, and causes of action. Conclusiveness of judgment requires only identity of parties and issues; it precludes the relitigation of a fact or issue already judicially determined in a prior final judgment. The elements are: (1) the prior judgment is final; (2) it was rendered by a court with jurisdiction over the subject matter and parties; (3) it is a judgment on the merits; and (4) there is identity of parties, subject matter, and causes of action for bar by prior judgment, or identity of parties and issues for conclusiveness of judgment. The prior final judgment recognizing the Peralta estate as owner barred petitioner’s claim of ownership and tolerance.
• One-Year Limitation in Unlawful Detainer — The one-year period to file an unlawful detainer suit is reckoned from the date of the original demand to vacate. Subsequent demands that are merely reminders or reiterations of the original demand do not renew the one-year reglementary period. This rule prevents a plaintiff from circumventing the limitation period by sending successive demand letters. The Court applied this rule and counted the period from the August 30, 2002 final demand, not from the February 28, 2011 demand.
• Judicial Notice of Court Records — Courts will take judicial notice of their own acts and records in the same case, of facts established in prior proceedings in the same case, and of the record, pleadings, or judgment of another case between the same parties or involving one of the same parties. The Court took judicial notice of its final decision in Estate of Bueno vs. Estate of Peralta, Sr.
• Actions to Recover Possession of Real Property — There are three kinds of actions to recover possession: accion interdictal (forcible entry and unlawful detainer), accion publiciana (plenary action to recover the right of possession), and accion reivindicatoria (action to recover ownership and full possession). Accion interdictal is summary and must be brought within one year; accion publiciana and accion reivindicatoria are ordinary civil actions cognizable by the RTC. Because the issue involved ownership and more than one year had elapsed, the proper remedy was not unlawful detainer.

• "Acts of tolerance must be proved by showing the overt acts indicative of petitioner's tolerance or permission for such person to occupy the disputed property." — This passage states the evidentiary requirement for an unlawful detainer claim grounded on tolerance; the Court applied it to find that petitioner failed to prove how and when entry or permission was given.
• "In other words, res judicata through bar by prior judgment precludes the filing of a second case when it involves the same parties, same subject, and the same cause of action, or otherwise prays for the same relief as the first case. Res judicata by conclusiveness of judgment, on the other hand, precludes the questioning of a fact or issue in a second case if the fact or issue has already been judicially determined in the first case between the same parties." — This passage distinguishes the two concepts of res judicata and supports the Court’s application of conclusiveness of judgment based on the prior ownership ruling.
• "In Racaza v. Gozum, this Court has categorically ruled that subsequent demands that are merely in the nature of reminders or reiterations of the original demand do not operate to renew the one-year reglementary period within which to commence an ejectment suit, and the said period will still be reckoned from the date of the original demand." — This passage states the controlling rule on the one-year limitation period, which the Court applied to bar the present suit.
• "In Heirs of Melchor v. Melchor, this Court categorically ruled that the prayer for rental payment contradicts the existence of possession by tolerance. Such claim implies that as early as 2001, possession by tolerance has ceased to exist." — This passage explains why petitioner’s claim for P5,000.00 monthly rentals undermined its own theory of tolerance.

• Heirs of Yusingco vs. Busilak, 824 Phil. 454 (2019) — Explained the three actions to recover possession of real property: accion interdictal, accion publiciana, and accion reivindicatoria.
• Hidalgo vs. Velasco, 831 Phil. 190 (2018) — Laid down the jurisdictional averments required for a sufficient unlawful detainer complaint.
• Estate of Bueno vs. Estate of Peralta, Sr., G.R. No. 205810, September 9, 2020 — Prior final judgment recognizing the Peralta estate as the rightful owner; served as the basis for res judicata by conclusiveness of judgment.
• Degayo vs. Magbanua-Dinglasan, 757 Phil. 376 (2015) — Defined res judicata and explained its rationale.
• Spouses Antonio vs. Sayman Vda. De Monje, 646 Phil. 90 (2010) — Distinguished bar by prior judgment from conclusiveness of judgment.
• Heirs of Melchor vs. Melchor, 461 Phil. 437 (2003) — Held that a prayer for rental payment contradicts the existence of possession by tolerance.
• Racaza vs. Gozum, 523 Phil. 694 (2006) — Held that subsequent demand letters do not renew the one-year period for filing an ejectment suit.
• Reyes, Sr. vs. Heirs of Forlales, 787 Phil. 541 (2016) — Explained the rationale for counting the one-year period from the original demand.
• Republic vs. Court of Appeals, 343 Phil. 428 (1997) — Supported the taking of judicial notice of the Court’s own final decision.
• Perez vs. Rasaceña, 797 Phil. 369 (2016) — Required proof of overt acts of tolerance in unlawful detainer cases.
• Javelosa vs. Tapuz, 835 Phil. 576 (2018) — Reiterated that mere allegation is not evidence and is not equivalent to proof.
• Igot vs. Valenzona, G.R. No. 230687, December 5, 2018, 888 SCRA 525 — Enumerated the elements of res judicata.

• Section 47(b), Rule 39, Rules of Court — Defines bar by prior judgment, which precludes a second action involving the same parties, subject matter, and cause of action. The Court discussed this concept in distinguishing it from conclusiveness of judgment.
• Section 47(c), Rule 39, Rules of Court — Defines conclusiveness of judgment, which precludes the relitigation of a fact or issue actually and necessarily adjudged in a prior final judgment between the same parties. This was the basis for applying res judicata to petitioner’s claim of ownership and tolerance.
• Rule 45, Rules of Court — Governs petitions for review on certiorari. Respondent argued that the petition raised factual questions beyond the scope of Rule 45, but the Court resolved the petition on the merits.
• Statute of Frauds — In the prior case Estate of Bueno vs. Estate of Peralta, Sr., the oral contract for the transfer of the property was held to have been ratified by the failure of the Estate of Bueno to object to oral evidence and by its acceptance of benefits, thereby removing the contract from the application of the Statute of Frauds.

Leonen, SAJ. (Chairperson), Hernando, and M. Lopez, JJ., concur. Kho, Jr., J., on leave. (Additional member, vice J. Javier per Raffle dated July 6, 2022.)