Malabanan v. Rural Bank of Cabuyao
REITERATIONFacts
The Antecedents: Samuel Malabanan (petitioner) obtained a loan of P5,000,000.00 from Rural Bank of Cabuyao, Inc. (respondent). To secure this loan, Malabanan executed a Real Estate Mortgage on April 18, 1996, over a parcel of land in Calamba, Laguna, covered by TCT No. 255916. Upon failure to settle the loan, Malabanan executed a dacion en pago (deed of assignment in payment of debt) on November 12, 2001, transferring ownership of the mortgaged property to the respondent. Consequently, a new Transfer Certificate of Title, TCT No. T-493506, was issued in the respondent's name. The respondent filed a complaint for unlawful detainer after Malabanan refused to surrender possession of the property despite repeated demands. Procedural History: The Municipal Trial Court in Cities (MTCC) initially dismissed the unlawful detainer complaint for lack of merit, finding that the respondent failed to prove that Malabanan's occupancy was by mere tolerance. On appeal, the Regional Trial Court (RTC) reversed the MTCC's decision, ordering Malabanan to vacate the property and pay rentals and attorney's fees. Malabanan then elevated the case to the Court of Appeals (CA) via a Petition for Review, arguing litis pendencia and forum shopping due to a pending annulment case concerning the dacion en pago and title. The CA affirmed the RTC's ruling. This petition for review on certiorari seeks to set aside the CA's decision. The Petition: Petitioner Samuel Malabanan seeks review under Rule 45 of the Rules of Court, raising two main issues: (1) whether the unlawful detainer complaint should be dismissed on grounds of litis pendencia and forum shopping, and (2) whether the allegations in the complaint sufficiently establish a case for unlawful detainer. Malabanan contends that a pending case for annulment of the dacion en pago and title, involving the same parties and issues of possession and ownership, should abate the ejectment suit. He argues that the CA erred in not dismissing the unlawful detainer case and in not suspending its proceedings pending the resolution of the annulment case. The petition also questions the sufficiency of the evidence presented by the respondent to support the claim for reasonable rentals.
Issue(s)
Whether the complaint for unlawful detainer can be dismissed on the ground of litis pendencia and forum shopping. Whether the allegations in the complaint make out a case of unlawful detainer. Whether the award of reasonable rentals is proper.
Ruling
The Supreme Court granted the petition in part, affirming the Court of Appeals' decision but modifying it by deleting the award of reasonable rentals in favor of the respondent.
Ratio Decidendi
On the issue of litis pendencia and forum shopping: The Court held that a pending action involving ownership of the same property does not bar the filing or consideration of an ejectment suit, nor does it suspend the proceedings. An ejectment case is designed to summarily restore physical possession to one who has been illegally or forcibly deprived thereof, without prejudice to the settlement of the parties' opposing claims of juridical possession in appropriate proceedings. The determination of ownership in an ejectment case is provisional and does not amount to res judicata in the annulment case. Therefore, the Court of Appeals correctly ruled that the ejectment case should not be dismissed on the grounds of litis pendencia and forum shopping. On whether the allegations make out a case of unlawful detainer: The Court found that the allegations in the complaint sufficiently established a case for unlawful detainer. The complaint alleged that petitioner obtained loans secured by a REM, executed a dacion en pago to settle the debt, and that a new TCT was issued in the respondent's name. It further alleged that respondent allowed petitioner to remain in possession by mere tolerance, and that petitioner's possession became unlawful upon demand to vacate, which he refused. The Court reiterated that in unlawful detainer, possession was initially lawful but became unlawful upon the termination of the right to possess, making the issue of rightful possession decisive. On the award of reasonable rentals: The Court ruled that the respondent failed to discharge its burden of proving the fair rental value or reasonable compensation for the use and occupation of the property. The assertion of ₱100,000.00 per month as reasonable rental in the unverified Position Paper was deemed self-serving and uncorroborated. Neither did the trial court provide any ratiocination for granting the rentals. Consequently, the award of reasonable rentals in favor of the respondent was deleted and set aside.
Main Doctrine
A pending action involving ownership of the same property does not bar the filing or consideration of an ejectment suit, nor suspend the proceedings, as an ejectment case is designed to summarily restore physical possession without prejudice to the settlement of opposing claims of juridical possession in appropriate proceedings. Furthermore, the award of reasonable rentals in an unlawful detainer case requires proof of fair rental value or reasonable compensation, which cannot be based solely on a self-serving and uncorroborated assertion.