Booc v. Five Star Marketing
REITERATIONFacts
The Antecedents: Five Star Marketing Co., Inc. (respondent) filed an unlawful detainer case against spouses Sheikding and Bily Booc (petitioners). Respondent alleged that it owned the land and building in Quezon Avenue, Iligan City, and that petitioners were occupying the third floor of the building. Respondent claimed that petitioners were initially allowed to occupy the premises rent-free, but this privilege was withdrawn on March 15, 1999, with a notice of rental rates and a requirement for interested occupants to enter into lease agreements. Petitioners were informed that the rental for the third floor would be P40,000.00 per month effective April 1, 1999. Despite demands, including a letter dated June 28, 1999, petitioners failed and refused to vacate the premises. Procedural History: Petitioners, in their Answer, asserted ownership over the occupied portion of the building, claiming it was owned in common with Sheikding's brother, Rufino Booc. They argued that the unlawful detainer case was a retaliatory action stemming from earlier complaints filed with the Securities and Exchange Commission (SEC) and a criminal complaint for falsification of public documents. The Municipal Trial Court in Cities (MTCC) of Iligan City dismissed the unlawful detainer case in favor of the petitioners, awarding them damages and attorney's fees. The Regional Trial Court (RTC) affirmed this decision with modification, also dismissing the complaint and awarding damages. However, the Court of Appeals (CA) reversed the RTC's decision, ordering petitioners to vacate the premises and pay monthly rentals. Petitioners' motion for reconsideration was denied by the CA. The Petition: Petitioners seek a review on certiorari under Rule 45 of the Rules of Court, assailing the CA's decision and resolution. Their assignments of error include the CA's failure to dismiss the petition for review due to respondent's alleged failure to attach supporting pleadings and material portions of the record, the CA's reliance on evidence not presented before the MTCC, the CA's erroneous holding that there was no evidence to prove an implied trust, and the CA's directive for petitioners to pay an exorbitant monthly rental of P40,000.00. The Supreme Court found the petition partly meritorious, modifying the CA's award of monthly rentals to P10,000.00, with applicable interest.
Issue(s)
Whether the Court of Appeals erred in not dismissing the petition for failure of the respondent to attach pleadings and material portions of the record. Whether the Court of Appeals erred in relying on evidence presented for the first time on appeal. Whether the Court of Appeals erred in holding that there was no evidence to prove the existence of an implied trust and related claims of ownership. Whether the Court of Appeals erred in directing the petitioners to pay an exorbitant monthly rental of P40,000.00.
Ruling
The Court denied the petition in part, affirming the CA's decision with modification. It directed petitioners to pay respondent P10,000.00 per month for their occupancy, with 6% interest per annum from April 1, 1999, until finality of the decision, and 12% thereafter until full payment.
Ratio Decidendi
On the failure to attach supporting documents: The Court reiterated its ruling in Atillo v. Bombay, stating that the phrase "as would support the allegations of the petition" in Section 2(d), Rule 42 of the Rules of Court implies the exercise of discretion by the petitioner in selecting relevant documents. It is ultimately the CA's role to determine if the submitted documents are sufficient to establish a prima facie case. In this instance, the CA was found to have acted within its discretion in proceeding with the petition based on the submitted documents, and no reversible error was committed. On the reliance on evidence presented for the first time on appeal: The Court agreed with the petitioners that the Joint Affidavit of Teodora and Preciosa dated December 1, 1999, should not have been considered as it was presented for the first time on appeal to the RTC and not before the MTCC. However, the CA's decision was not solely based on this affidavit. The CA also considered that no evidence was adduced by the respondents to prove they purchased the lot and constructed the building with their own money, and that the subject lot and building were titled and declared for taxation purposes in the name of the respondent. This broader consideration by the CA rendered the error regarding the single affidavit harmless. On the existence of implied trust and ownership: The Court held that the sole issue in an unlawful detainer case is physical possession, though claims of ownership may be considered to resolve possession. The party with the burden of proof must establish their case by a preponderance of evidence. Petitioners' claim of co-ownership and implied trust was anchored on a Joint Affidavit, which lacked corroborating competent evidence. This was contrasted with respondent's evidence, including a Deed of Sale, Transfer Certificate of Title, Tax Declarations, and Official Receipts for real property tax payments, all in its name. The Court emphasized that a Torrens title is conclusive evidence of ownership for purposes of possession, and tax declarations are good indicia of possession in the concept of an owner. Therefore, the CA's finding that respondent proved ownership by a preponderance of evidence was upheld. The Court stressed that this determination of ownership is provisional and only for settling possession, not barring a separate action for quieting of title. On the exorbitant monthly rental: The Court found no factual or evidentiary basis for the CA's award of P40,000.00 per month. While the CA's award was based on respondent's prayer in its complaint, the respondent had the burden to prove this claim by a preponderance of evidence. The Court noted that Section 17, Rule 70 of the Rules of Civil Procedure empowers the court to award reasonable compensation but requires it to be based on evidence. In the absence of sufficient proof for P40,000.00, the Court considered the undisputed fact that James paid P10,000.00 for one-half of the first floor until August 1998. Applying the customary practice that higher floors have cheaper rentals, the Court found P10,000.00 per month to be a fair rental value for the third floor occupied by petitioners. The Court also specified the interest rates applicable to the awarded rentals.
Main Doctrine
In unlawful detainer cases, the determination of ownership is provisional and solely for the purpose of settling the issue of possession, and does not bar a separate action for quieting of title. The party claiming ownership must prove their claim by a preponderance of evidence, with a Torrens title being conclusive evidence of ownership for purposes of possession.