SECOND DIVISION
G.R. No. 205951, July 04, 2016
UNION BANK OF THE PHILIPPINES, Petitioner, v. PHILIPPINE RABBIT BUS LINES, INC., Respondent.
D E C I S I O N
DEL CASTILLO, J.:
An ejectment case is not limited to lease agreements or deprivations of possession by force, intimidation, threat, strategy, or stealth, It is as well an available remedy against one who withholds possession after the expiration or termination of his right of possession under an express or implied contract, such as a contract to sell
This Petition for Review on Certiorari1 assails the July 31, 2012 Decision2 of the Court of Appeals (CA) dismissing the Petition for Review3 in CA-G.R. SP No. 102065, and its January 25, 2013 Resolution4 denying reconsideration of the assailed Decision.
Factual Antecedents
Petitioner Union Bank of the Philippines is the owner of two parcels of land totaling 1,181 square meters, with improvements (subject property), in Poblacion, Alaminos, Pangasinan, covered by Transfer Certificates of Title Nos. 21895 and 21896.5 Respondent Philippine Rabbit Bus Lines, Inc. was the former owner of the lots but it lost the same by foreclosure to petitioner; nonetheless, respondent continued to occupy the same.
On November 8, 2001, petitioner and respondent executed a Contract to Sell6 covering the subject property for P12,208,633.57, payable within seven years in quarterly installments (principal and interest) of P824,757,97. The contract to sell stipulated, among others, that "[a]ll payments required under this Contract to Sell shall be made by the [buyer] without need of notice, demand, or any other act or deed, at the principal office address of the [seller];"7 and that should respondent fail to fully comply with the agreement or in case the contract is canceled or rescinded, all its installment payments "shall also be forfeited by way of penalty and liquidated damages"8 and "applied as rentals for [its] use and possession of the property without need for any judicial action or notice to or demand upon the [buyer] and without prejudice to such other rights as may be available to and at the option of the [seller] such as, but not limited to bringing an action in court to enforce payment of the Purchase Price or the balance thereof and/or for damages, or for any causes of action allowed by law."9ChanRoblesVirtualawlibrary
Respondent failed to fully pay the stipulated price in the contract to sell. Petitioner thus sent a December 10, 2003 notarized demand letter entitled "Demand to Pay with Rescission of Three (3) Contracts to Sell dated November 8, 2001,"10 which stated among others that -
Our records show that you have failed to pay your past due quarterly installment payments for August 31, 2003 and November 30, 2003 as per attached Statement of Account as of December 16, 2003 in the total amount of PESOS: NINE MILLION NINE HUNDRED FORTY THOUSAND ONE HUNDRED NINETY SEVEN & 36/100 (59,940,197.36) x x x:
xxxx
Correspondingly, you are hereby given a period of thirty (30) days from receipt hereof within which to pay your aforesaid past due installment payments, otherwise, your three (3) Contracts to Sell with UNION BANK OF THE PHILIPPINES over the properties x x x are deemed automatically rescinded effective thirty (30) days from the expiration of the 30-day period to update your past due installment payments without further notice.11
We write in connection with your proposal to purchase back the properties that are the subject of the three (3) Contracts to Sell executed on November 8, 200313 and were rescinded effective February 28, 2004. x x x
As you are aware, we deferred the sending of the Demand to Vacate over the said properties because of the three (3) postdated checks (PDC's) with an aggregate amount of P1.5 Million which you have tendered to the bank, as well as your proposal to purchase again the said properties after the Rescission of the Contracts to Sell last February 28, 2004. Unfortunately, out of the three (3) PDC's submitted to the bank, only one (1) check had cleared amounting to P500,000.00 which shall be applied as rental payment as mentioned in our letter dated March 17,2004.
Moreover, we wish to inform you that your proposal to purchase again the said properties as contained in your letter dated April 16, 2004 was never finalized nor presented for approval given that you failed to make good your promised payment of P1.5 Million. We have given you more than enough time but there is still no relief in sight.
For this reason, the bank has decided to exercise its right to take physical possession of the above-mentioned properties. As such, we are giving you fifteen (15) days upon receipt of this letter within which to vacate the said properties and surrender possession of the premises to the bank, otherwise, we will be constrained to refer your account for proper legal action.14
The demand required and contemplated in Sec. 2 of Rule 70 of the Revised Rules of Court is a demand for the defendant to pay the rentals due or to comply with the conditions of the lease and not only a demand to vacate the premises; and where the defendant does not comply with the said demand within the period provided by Sec. 2 then his possession becomes unlawful. Consequently, both demands to pay and to vacate are necessary to make the defendant a deforciant in order that Ejectment suit may be filed and the fact of such demands must be alleged in the complaint, otherwise the Inferior Court cannot acquire jurisdiction over the case.
Analyzing the above letter of demand sent by the plaintiff-appellant to the defendant-appellee, the same did not demand for the payment of the defendant-appellee's obligation. It was merely a demand to vacate without the demand to pay.
Hence, the Court is of the considered opinion that such demand is not sufficient compliance with Sec. 2 of Rule 70 of the Rules of Court. Furthermore, a Notice of Demand giving the lessee the alternative whether to pay the rental or vacate the premises does not comply with the above rule (Vda. de Murga vs. Chan, L-24-680, October 7, 1968). In the said letter of demand itself, it says: "As such, we are giving you fifteen (15) days upon receipt of this letter within which to vacate the said properties and surrender possession of the premises to the bank, otherwise we will be constrained to refer your account for proper legal action." To the mind of the Court, this is not the final demand contemplated under the same rule, because should the defendant fail to vacate, the plaintiff-appellant will still refer defendant-appellee's account for proper legal action which does not comply with the requirements of said Sec. 2 of Rule 70 of the Rules of Court.
Moreover, it was ruled in the case of Penas Jr. vs. Court of Appeals, G.R. 12734, July 7, 1994, that an alternative demand on either to renew the expired lease contract or vacate is not a definite demand to vacate and would be insufficient basis for the filing of an action for unlawful detainer. Hence, the Court rules that the demand letter x x x is not a definite demand to vacate because if it fails to vacate, the defendant-appellee's account would still be referred for proper legal action hence, insufficient basis for filing an action for unlawful detainer.
In such case, the jurisdictional requisite of demand to pay and to vacate was not complied with and the lower court did not acquire jurisdiction over the unlawful detainer case, hence, it was properly dismissed.
There is no more need to discuss the other issues raised as they are now moot and academic.
WHEREFORE, foregoing premises considered, the instant appeal is dismissed. Without cost.
SO ORDERED.23cralawred
SINCE THE CONTRACT TO SELL BETWEEN PETITIONER UBP AND RESPONDENT PRBL WAS ALREADY CANCELED DUE TO PRBL'S FAILURE TO PAY THE PURCHASE PRICE, IS IT STILL REQUIRED FOR THE PETITIONER UBP TO ISSUE A DEMAND TO PAY PRIOR TO THE FILING OF THE EJECTMENT CASE?
IF SUCH DEMAND TO PAY IS REQUIRED, WAS THE PETITIONER UBP ABLE TO COMPLY WITH THE SAME WHEN IT PREVIOUSLY MADE A DEMAND FOR THE RESPONDENT TO PAY THE AMOUNT DUE (EXHIBIT "B") BEFORE ISSUING THE DEMAND TO VACATE (EXHIBIT "C")?
ASSUMING EX-GRATIA ARGUMENT! THAT NO DEMAND TO PAY WAS ISSUED BY THE PETITIONER PRIOR TO THE FILING OF THIS CASE, WAS IT CORRECT FOR THE HONORABLE COURT TO HAVE CONSIDERED SUCH ISSUE EVEN IF THE SAME WAS NOT RAISED BY THE PARTIES DURING THE PRE-TRIAL CONFERENCE AND WAS NEVER TOUCHED BY THE PARTIES IN THEIR PLEADINGS?
SINCE THE ISSUE REGARDING UBP'S RIGHT TO EJECT PRBL FROM THE PREMISES HAD BEEN SETTLED WITH FINALITY IN ANOTHER CASE DECIDED BY THE HONORABLE COURT OF APPEALS, CAN THE SAID COURT IGNORE THE FINAL DECISION AND THEN RULE IN A CONTRARY MANNER?28cralawred
1. The defendant originally had lawful possession of the property, either by virtue of a contract or by tolerance of the plaintiff;
2. Eventually, the defendant's possession of the property became illegal or unlawful upon notice by the plaintiff to defendant of the expiration or the termination of the defendant's right of possession;
3. Thereafter, the defendant remained in possession of the property and deprived the plaintiff the enjoyment thereof; and
4. Within one year from the unlawful deprivation or withholding of possession, the plaintiff instituted the complaint for ejectment.32
Endnotes:
* Per Special Order No. 2357 dated June 28,2016.
1Rollo, pp. 9-35.
2 Id. at 177-191; penned by Associate Justice Michael P. Elbinias and concurred in by Associate Justices Isaias P. Dicdican and Nina G, Antonio-Valesizuela.
3 Id. at 150-175.
4 Id. at 193-194.
5 Id. at 47-50.
6 Id. at 51-54.
7 Id. at 51.
8 Id. at 52.
9 Id. at 51-52.
10 Id. at 56.
11 Id.
12 Id. at 58.
13 Should be "2001."
14 Rollo, p. 58.
15 Id. at 39-46.
16 Id. at 61-62.
17 Id. at 64-66.
18 Id. at 100-110; penned by Judge Borromeo R. Bustamante.
19 Id. at 109.
20 Id.
21 Branch 55.
22Rollo, pp. 111-115; Decision in Civil Case No. A-3115 penned by Judge Elpidio N. Abella.
23 Id. at 114-115.
24 Id. at 116-124.chanrobleslaw
25 Id. at 147-149.
26 Id. at 150-175.
27 Rule 70, Forcible Entry and Unlawful Detainer.
Sec. 2. Lessor to proceed against lessee only after demand. - Unless otherwise stipulated, such action by the lessor shall be commenced only after demand to pay or comply with the conditions of the lease and to vacate is made upon the lessee, or by serving written notice of such demand upon the person found on the premises, or by posting such notice on the premises if no person be found thereon, and the lessee fails to comply therewith after fifteen (15) days in the case of land or five (5) days in the case of buildings.
28Rollo, pp. 21-22.
29 Id. at 256-261.
30 692 Phil. 667 (2012).
31Rollo, pp. 242-245.
32Piedad v. Gurieza, G.R. No. 207525, June 18, 2014, 727 SCRA 71, 77; Union Bank of the Philippines v. Maunlad Homes, Inc., supra note 23 at 676.
33Union Bank of the Philippines v. Maimlad Homes, Inc., supra note 23; Nabus v. Spouses Pacson, 620 Phil. 344 (2009); Almocera v. Ong, 569 Phil. 497 (2008); Ayala Life Assurance, Inc. v. Ray Burton Development Corporation, 515 Phil. 431 (2006).