Republic of the Philippines and National Power Corporation vs. Sunvar Realty Development Corporation

A Rule 65 petition for certiorari against an interlocutory order in a case covered by the Rules on Summary Procedure is a prohibited pleading, and the one-year period for an unlawful detainer suit is counted from the date of the last demand to vacate, not from the expiration of the lease.

Petitioners Republic and NPC are registered co-owners of four parcels of land in Makati City, including the subject property covered by TCT No. 458365, with 80% owned by the Republic and 20% by NPC. The PMO represents them in the administration and disposal of government assets. Sunvar’s occupancy originated from sublease agreements under a main lease granted to TRCFI, later succeeded by PDAF. The dispute falls under the Rules on Summary Procedure for unlawful detainer, which prohibit certiorari against interlocutory orders and require the action to be brought within one year from the last demand to vacate.

Petitioners Republic of the Philippines and National Power Corporation are registered co-owners of several parcels of land along Pasong Tamo Extension and Vito Cruz in Makati City, covered by four Transfer Certificates of Title. The subject property is the parcel covered by TCT No. 458365, with an area of approximately 22,294 square meters; 80% is owned by the Republic and 20% by NPC. The Privatization Management Office represents petitioners in the administration and disposal of government assets. Respondent Sunvar Realty Development Corporation occupied the subject property by virtue of sublease agreements that had expired.

On 26 December 1977, petitioners leased the four parcels, including the subject property, to the Technology Resource Center Foundation, Inc. (TRCFI) for 25 years beginning 01 January 1978 and ending 31 December 2002. The main lease contract granted TRCFI the right to sublease any portion of the land. TRCFI subleased a majority of the subject property to Sunvar through several sublease agreements. Although the agreements commenced on different dates, they all contained common provisions and were set to expire on 31 December 2002, subject to renewal at Sunvar's exclusive option. Sunvar agreed to return or surrender the subleased land without delay upon termination or expiration. During its sublease, Sunvar introduced useful improvements, including commercial buildings, and used open spaces as parking areas.

In 1987, TRCFI was dissolved and the Philippine Development Alternatives Foundation (PDAF) was created, assuming TRCFI's functions. On 26 April 2002, less than a year before expiration, Sunvar wrote PDAF expressing its desire to renew the sublease and proposing an increased rental rate and another 25-year term. It also wrote the Office of the President, the Department of Environment and Natural Resources, and NPC. On 10 May 2002, PDAF informed Sunvar that it had sent the renewal notice to petitioners but had received no response, and that it could not yet act on the proposal or accept rental payments. Sunvar acknowledged the letter and requested updates. On 03 June 2002, NPC notified PDAF of its decision not to renew the lease; PDAF informed Sunvar. The Republic, through Senior Deputy Executive Secretary Waldo Q. Flores, likewise notified PDAF of its decision not to renew, reasoning that the parties had agreed to shorten PDAF's corporate life and transfer its assets to the Republic for sale. On 25 June 2002, PDAF informed Sunvar of the Republic's decision.

On 31 December 2002, the main lease and the sublease agreements expired. Petitioners recovered all rights over the subject property, and the Republic transferred it to the PMO for disposition. Sunvar nevertheless continued to occupy the property. On 22 February 2008, six years after expiration, the Republic, through the Office of the Solicitor General, advised Sunvar to completely vacate within 30 days. Sunvar received the notice by registered mail but did not vacate. On 03 February 2009, Sunvar received a final notice from the OSG to vacate within 15 days. It again refused and remained on the property. On 02 April 2009, the PMO issued an Inspection and Appraisal Report; using the market comparison approach, it determined a fair rental value of ₱10,364,000 per month and total income loss of ₱630,123,700 from 01 January 2002 to 31 March 2009.

On 23 July 2009, petitioners filed a Complaint dated 26 May 2009 for unlawful detainer with the Metropolitan Trial Court of Makati City, praying that Sunvar vacate the subject property and pay damages: ₱630,123,700 for illegal and unauthorized use and occupation from 01 January 2003 to 31 March 2009, and ₱10,364,000 per month from 01 April 2008 until the property and improvements were completely vacated and surrendered. The material facts as found below were that Sunvar initially held possession under sublease agreements, that those agreements expired on 31 December 2002, that Sunvar continued in possession, and that it received the final notice to vacate on 03 February 2009.

• Mode of Review: Petitioners maintained that their Rule 45 Petition was proper because they raised only questions of law, specifically the correct application of the Rules on Summary Procedure and the jurisdiction of the RTC over Sunvar's certiorari petition.
• Propriety of Certiorari in Summary Proceedings: Petitioners argued that the RTC had no jurisdiction over Sunvar's Rule 65 Petition because the Rules on Summary Procedure expressly prohibited a petition for certiorari against interlocutory orders of the MeTC, and they prayed for its outright dismissal.
• Unlawful Detainer and Reckoning Period: Petitioners argued that their action was a proper unlawful detainer suit within the MeTC's jurisdiction because the one-year period should be counted from Sunvar's receipt on 03 February 2009 of the Final Notice to Vacate, making the Complaint filed on 23 July 2009 timely.

• Improper Mode of Review: Sunvar argued that petitioners' resort to Rule 45 was improper; they should have filed a Rule 65 Petition because the RTC Decision was an order dismissing the Complaint, from which no appeal can be taken except by certiorari.
• Lack of Privity / Not Unlawful Detainer: Sunvar moved to dismiss, arguing that the allegations did not constitute an action for unlawful detainer since no privity of contract existed between it and petitioners.
• Accion Publiciana / Jurisdiction: In the alternative, Sunvar argued that the cause of action was more properly an accion publiciana within the RTC, not the MeTC, because the alleged dispossession had lasted more than one year.
• Extraordinary Circumstances: Sunvar relied on Bayog vs. Natino and Go vs. Court of Appeals to justify certiorari review by the RTC owing to extraordinary circumstances.

• Mode of Review: Whether petitioners' resort to a Rule 45 Petition for Review on Certiorari is the proper mode to challenge the RTC Decision dismissing the Complaint.
• Propriety of Rule 65 in Summary Proceedings: Whether the RTC erred in taking cognizance of and granting Sunvar's Rule 65 Petition for Certiorari against the MeTC's interlocutory order denying its Motion to Dismiss in an unlawful detainer case covered by the Rules on Summary Procedure.
• Reckoning of One-Year Period in Unlawful Detainer: Whether the Complaint is an action for unlawful detainer within the jurisdiction of the MeTC, with the one-year period reckoned from the final demand to vacate on 03 February 2009, or an accion publiciana within the RTC, with the period reckoned from the expiration of the lease on 31 December 2002.

• Mode of Review: Yes. A Rule 45 petition is proper where only questions of law are raised, as here, involving the correct application of the Rules on Summary Procedure.
• Propriety of Rule 65 in Summary Proceedings: No. The RTC erred; a Rule 65 certiorari petition against an interlocutory order in a summary proceeding is a prohibited pleading under Section 19(g) of the 1991 Revised Rules on Summary Procedure. The Bayog and Go exceptions do not apply.
• Reckoning of One-Year Period in Unlawful Detainer: Yes. The action is a proper unlawful detainer suit; the one-year period is counted from the last demand to vacate on 03 February 2009, so the Complaint filed on 23 July 2009 was timely and within MeTC jurisdiction.

• Mode of Review: Rule 41, Section 1(g) states that no appeal may be taken from an order dismissing an action without prejudice, but Rule 41, Section 2(c) allows an appeal by certiorari to the Supreme Court where only questions of law are raised. Republic vs. Malabanan clarified the three modes of appeal from RTC decisions; the third mode is a Rule 45 petition elevated to the Supreme Court only on questions of law. A question of law exists when the issue does not call for an examination of the probative value of the evidence or of the truth or falsehood of the facts, and the doubt concerns the correct application of law and jurisprudence. Petitioners raised only questions of law regarding the RTC's jurisdiction to entertain a certiorari petition against the MeTC's interlocutory order in an unlawful detainer suit, which involved the proper interpretation of the Rules on Summary Procedure. The Rule 45 Petition was therefore properly lodged.
• Propriety of Rule 65 in Summary Proceedings: Under Section 19(g) of the 1991 Revised Rules on Summary Procedure, a certiorari petition under Rule 65 against an interlocutory order issued by the court in a summary proceeding is a prohibited pleading. The RTC should have dismissed outright Sunvar's Rule 65 Petition, especially since petitioners had already alerted it to this legal bar and prayed for dismissal. Bayog vs. Natino and Go vs. Court of Appeals are not comparable. In Bayog, an illiterate tenant-lessee stricken with pulmonary tuberculosis filed his answer three days late and was allowed to file a prohibited petition for relief pro hac vice because he would otherwise suffer grave injustice and irreparable injury. In Go, a procedural void existed because the summary proceeding was suspended indefinitely, and certiorari was allowed to give spirit and life to the Rules on Summary Procedure. Here, Sunvar filed a certiorari petition in a pending ejectment suit, and the subject matter was the denial of its Motion to Dismiss, which was an interlocutory order. No deprivation of reasonable opportunity or procedural void existed; Sunvar's proper remedy was to proceed with the summary hearings and file its answer, which it did. Relaxing the rule would inundate the RTCs with similar petitions and defeat the goal of expeditious and inexpensive determination of unlawful detainer suits. The assailed RTC Decision was therefore annulled.
• Reckoning of One-Year Period in Unlawful Detainer: Rule 70, Section 1 allows a lessor to bring an action for unlawful detainer within one year after the unlawful deprivation of possession, and Section 2 requires a demand to vacate and failure to comply within 15 days in the case of land. Delos Reyes vs. Spouses Odenes defines unlawful detainer as an action to recover possession from one who illegally withholds possession after the expiration or termination of the right to hold possession; the possession is originally legal but becomes illegal upon expiration or termination, the proceeding is summary, and the action must be brought within one year from the date of the last demand. The elements are: (1) initially, possession by the defendant was by contract with or by tolerance of the plaintiff; (2) possession became illegal upon notice of termination of the right of possession; (3) the defendant remained in possession and deprived the plaintiff of enjoyment; and (4) within one year from the last demand to vacate, the plaintiff instituted the complaint. Accion publiciana, on the other hand, is the plenary action to recover the right of possession in the RTC when dispossession has lasted for more than one year. The first three requisites were present: Sunvar initially derived its right from sublease agreements; upon expiration on 31 December 2002, it lost possessory rights; it continued occupying the property; and petitioners made a final demand on 03 February 2009. The fourth requisite was also present because the one-year period is counted from the last demand, not from the expiration of the lease. Estate of Soledad Manantan vs. Somera and Leonin vs. Court of Appeals hold that the period is reckoned from the date of the plaintiff's last demand to vacate, and if several demands are made, from the last demand. Although petitioners had earlier served a Notice to Vacate on 22 February 2008, they could be deemed to have waived their right of action and continued to tolerate Sunvar's occupation; the final notice on 03 February 2009 gave Sunvar another opportunity to comply. Respondent failed to raise in the proceedings below the factual issue that the 2009 Notice was a mere reminder of the 2008 Notice, and such factual determination is beyond the scope of a Rule 45 Petition. The Complaint filed on 23 July 2009 was well within one year from 03 February 2009, or until 02 February 2010. The MeTC therefore had jurisdiction.

• Prohibited Pleading in Summary Procedure — Section 19(g) of the 1991 Revised Rules on Summary Procedure bars a petition for certiorari, mandamus, or prohibition against any interlocutory order issued by the court in a summary proceeding. The Court applied this rule to hold that the RTC should have dismissed outright Sunvar's Rule 65 Petition against the MeTC's denial of its Motion to Dismiss.
• Bayog and Go Exceptions — Although prohibited pleadings are generally barred in summary proceedings, the Court may allow them pro hac vice under extraordinary circumstances: in Bayog vs. Natino, to prevent grave injustice and irreparable injury to an illiterate tenant who lost his home through no fault; in Go vs. Court of Appeals, to fill a procedural void where a summary proceeding was suspended indefinitely. The Court distinguished both because Sunvar had an available remedy and no procedural void existed.
• Unlawful Detainer — Unlawful detainer is a summary action to recover physical possession from one whose possession was originally legal but became illegal upon expiration or termination of the right to possess. It must be brought within one year from the date of the last demand to vacate, and the issue is the right to physical possession. The Court applied this to Sunvar, whose sublease expired on 31 December 2002 and whose possession became unlawful upon the final demand on 03 February 2009.
• Reckoning of the One-Year Period from Last Demand — The one-year period for filing an unlawful detainer suit is counted from the date of the plaintiff's last demand to vacate, because only upon the lapse of that period does possession become unlawful; if several demands are made, the period is reckoned from the last demand. The Court applied this to hold that the Complaint filed on 23 July 2009 was timely from the 03 February 2009 final notice.
• Accion Publiciana — Accion publiciana is the plenary action to recover the right of possession, brought in the RTC when dispossession has lasted for more than one year; it determines the better right of possession independently of title. The Court held it was not the proper action because the one-year period had not elapsed from the last demand.
• Question of Law for Rule 45 — A question of law exists when the issue does not call for an examination of the probative value of the evidence or the truth or falsehood of the facts, and the doubt concerns the correct application of law and jurisprudence. The Court applied this to allow the Rule 45 Petition, which raised only the proper interpretation of the Rules on Summary Procedure.

• "Under the Rules on Summary Procedure, a certiorari petition under Rule 65 against an interlocutory order issued by the court in a summary proceeding is a prohibited pleading." — This states the core prohibition applied against Sunvar's Rule 65 Petition.
• "The RTC should have dismissed outright respondent Sunvar’s Rule 65 Petition, considering that it is a prohibited pleading." — This applies the prohibition and explains why the RTC's assumption of jurisdiction was erroneous.
• "The Court rules that the final requisite is likewise availing in this case, and that the one-year period should be counted from the final demand made on 03 February 2009." — This is the holding on the reckoning period for the unlawful detainer complaint.
• "Such one year period should be counted from the date of plaintiff’s last demand on defendant to vacate the real property, because only upon the lapse of that period does the possession become unlawful." — This is the canonical formulation of the reckoning rule for unlawful detainer.

• Republic vs. Malabanan, G.R. No. 169067, 06 October 2010, 632 SCRA 338 — Cited to clarify the three modes of appeal from RTC decisions and to support that a Rule 45 petition is proper where only questions of law are raised.
• Bayog vs. Natino, 327 Phil. 1019 (1996) — Cited by respondent but distinguished; allowed a prohibited petition for relief pro hac vice due to grave injustice and irreparable injury, circumstances absent here.
• Go vs. Court of Appeals, 358 Phil. 214 (1998) — Cited by respondent but distinguished; allowed certiorari despite summary procedure because of a procedural void, which did not exist here.
• Delos Reyes vs. Spouses Odenes, G.R. No. 178096, 23 March 2011, 646 SCRA 328 — Cited to define unlawful detainer and the one-year period from the last demand.
• Leonin vs. Court of Appeals, G.R. No. 141418, 27 September 2006, 503 SCRA 423 — Followed to reckon the one-year period from the latest demand letter, not an earlier demand.
• Estate of Soledad Manantan vs. Somera, G.R. No. 145867, 07 April 2009, 584 SCRA 81 — Cited for the rule that the one-year period is counted from the date of the last demand.
• Canlas vs. Tubil, G.R. No. 184285, 25 September 2009, 601 SCRA 147 — Cited to define accion publiciana as the plenary action for right of possession when dispossession has lasted more than one year.
• Spouses Beltran vs. Nieves, G.R. No. 175561, 20 October 2010, 634 SCRA 242 — Cited for the implied promise of an occupant without contract to vacate upon demand, making summary ejectment the proper remedy.
• Racaza vs. Gozum, 523 Phil. 694 (2006) — Cited for the rule that subsequent demands merely reminding of the original demand do not renew the one-year period; not applied because respondent failed to raise the factual issue.

• Section 19(g), 1991 Revised Rules on Summary Procedure — Prohibits certiorari, mandamus, or prohibition against interlocutory orders in summary proceedings; applied to bar Sunvar's Rule 65 Petition.
• Rule 70, Sections 1 and 2, Rules of Court — Govern unlawful detainer; allow action within one year after unlawful deprivation and require demand to vacate with 15-day compliance for land; applied to count from the final demand.
• Rule 41, Sections 1 and 2(c), Rules of Court — Provide that no appeal may be taken from an order dismissing an action without prejudice, but appeal by certiorari to the Supreme Court lies where only questions of law are raised; applied to allow the Rule 45 Petition.
• Rule 45, Rules of Court — Petition for review on certiorari; applied as the proper mode because only questions of law were involved.
• Section 36, B.P. Blg. 129 — Mandates expeditious and inexpensive determination of cases subject to summary procedure; cited in the discussion of the purpose of the Rules on Summary Procedure.
• Executive Order No. 323 dated 06 December 2000, Article III, Section 2 — Cited as basis for the PMO's representation in the administration and disposal of government assets.

Antonio T. Carpio, Arturo D. Brion, Jose Portugal Perez, Bienvenido L. Reyes.