Delicano v. Pechaten Corporation
REITERATIONFacts
1. The Antecedents: Respondent Pechaten Corporation (Pechaten) is the registered owner of a parcel of land. In June 1993, Pechaten entered into a two-year lease agreement for this property with Teodoro Alberto, Honorata Salmorin, Aquilina Hizon, and Dalmacia Meneses. The lessees subsequently waived their rights in favor of Virgilio Meneses. Upon the expiration of the lease on June 30, 1995, Virgilio Meneses failed to pay rentals and ignored Pechaten's offer to renew the lease or purchase the property. Pechaten sent a demand letter on October 6, 1999, for Virgilio Meneses to vacate and pay accrued rentals, which he refused, leading to an unlawful detainer case. 2. Procedural History: The Metropolitan Trial Court (MeTC) ruled in favor of Pechaten, ordering Virgilio Meneses to vacate and pay rentals and attorney's fees. The Regional Trial Court (RTC) affirmed the MeTC's decision, finding the unlawful detainer suit filed within the one-year reglementary period from the last demand. Meanwhile, the City of Manila filed an expropriation case for the property, obtaining a Writ of Possession. Virgilio Meneses' heirs, the petitioners herein, moved to dismiss the unlawful detainer case, arguing it was moot due to the expropriation. The RTC partially reconsidered its decision, setting aside the order to vacate but maintaining the monetary awards. Pechaten appealed to the Court of Appeals (CA), which initially affirmed the RTC's modified decision. However, upon Pechaten's motion for reconsideration, and considering the CA's subsequent decision in the expropriation case which dismissed the City of Manila's complaint, the CA amended its decision, dissolving the writ of possession and ruling in favor of Pechaten. 3. The Petition: The petitioners, heirs of Virgilio Meneses, seek review of the Court of Appeals' Amended Decision. They argue that the dismissal of the expropriation case by the CA's Special Sixth Division, which became final and executory, should not warrant the restoration of possession to Pechaten. The core issue is whether the petitioners are still entitled to retain possession of the property despite the finality of the decision in the expropriation case that denied the City of Manila the right to expropriate the property for public use. The petitioners are essentially challenging the CA's application of Section 11, Rule 67 of the Rules of Civil Procedure, which mandates the restoration of possession to the owner if expropriation is denied.
Issue(s)
Whether petitioners are still entitled to retain possession over the subject property despite the dismissal of the expropriation case. Whether the dismissal of the expropriation case constitutes a supervening event warranting the reconsideration of the unlawful detainer case.
Ruling
The petition is denied. The Amended Decision of the Court of Appeals dated November 13, 2009, is affirmed. The Decision dated May 30, 2008, of the Manila Regional Trial Court, Branch 37, in Civil Case No. 04-108960, affirming the February 12, 2002 Judgment of the Manila Metropolitan Trial Court, Branch 2, is reinstated.
Ratio Decidendi
On the issue of entitlement to possession despite dismissal of expropriation: The Court held that petitioners are not entitled to retain possession. Section 11, Rule 67 of the Rules of Civil Procedure explicitly states that if an appellate court determines that the plaintiff has no right of expropriation, it shall order the Regional Trial Court to forthwith enforce the restoration to the defendant of the possession of the property. In this case, the Court of Appeals-Special Sixth Division found that the expropriation was not for public use, but for the sole benefit of the family of Virgilio Meneses, leading to the dismissal of the eminent domain complaint. This decision became final and executory, triggering the application of Section 11, Rule 67. Therefore, the rightful owner, Pechaten Corporation, should be restored to its possession. On the issue of supervening event: The Court affirmed the Court of Appeals' finding that the dismissal of the expropriation case was a supervening event. A supervening event is one that occurs subsequent to a final order or judgment and brings about a material change in the situation of the parties. The finality of the decision in the expropriation case, which reversed the order of expropriation and dismissed the complaint, fundamentally altered the legal basis for the City of Manila's possession and, consequently, the petitioners' possession derived from it. This change in circumstance necessitated a re-evaluation of the unlawful detainer case to ensure justice and adherence to the law regarding property ownership and possession.
Main Doctrine
When an expropriation case is dismissed on appeal for failure to establish public use, the defendant is entitled to the restoration of possession of the property, and any prior writ of possession issued in favor of the plaintiff is dissolved.