Optima Realty v. Hertz
REITERATIONFacts
The Antecedents: Optima Realty Corporation (Optima) and Hertz Phil. Exclusive Cars, Inc. (Hertz) entered into a Contract of Lease for a commercial unit and parking slot. The lease period was initially three years but was later amended to two years and five months, ending on February 28, 2006. During renovations, Hertz experienced a sales drop and requested a rent discount, which Optima granted for specific months. However, Hertz failed to pay rentals for seven months and utility bills for four months. Optima reminded Hertz that lease renewal required a written notice at least 90 days prior to termination. Hertz belatedly expressed its desire to negotiate an extension, but Optima did not entertain it due to the missed deadline. Hertz filed a Complaint for Specific Performance, Injunction, and Damages against Optima. Subsequently, Optima sent a demand letter for Hertz to vacate and pay arrearages, but Hertz refused. Optima then filed a Complaint for Unlawful Detainer and Damages. Procedural History: The Metropolitan Trial Court (MeTC) ruled in favor of Optima, ordering Hertz to vacate, pay back rentals and utility charges, and pay monthly compensation for continued occupancy, plus attorney's fees and costs. The Regional Trial Court (RTC) affirmed the MeTC's decision. The Court of Appeals (CA) reversed the RTC and MeTC decisions, ruling that the MeTC lacked jurisdiction over Hertz due to improper service of summons, and remanded the case for proper service. Optima filed the instant petition with the Supreme Court. The Petition: Optima assails the CA's decision, arguing that the MeTC properly acquired jurisdiction over Hertz, that the unlawful detainer case is not barred by litis pendentia, and that the ejectment and award of damages were proper.
Issue(s)
Whether the MeTC properly acquired jurisdiction over the person of respondent Hertz. Whether the unlawful detainer case is barred by litis pendentia. Whether the ejectment of Hertz and the award of damages, attorneys fees and costs are proper.
Ruling
The Supreme Court granted the petition, reversed the Court of Appeals' decision, and reinstated the Regional Trial Court's decision affirming the Metropolitan Trial Court's ruling. The Court held that the MeTC acquired jurisdiction over Hertz through its voluntary appearance, the unlawful detainer case was not barred by litis pendentia, and the ejectment and award of damages were proper.
Ratio Decidendi
On the issue of jurisdiction over the person of respondent Hertz: The Court ruled that the MeTC acquired jurisdiction over Hertz by reason of its voluntary appearance. The Court reiterated the principle that jurisdiction over the person is acquired either by service of summons or by voluntary appearance. It emphasized that filing a motion for leave to file an answer with counterclaim, without raising the defense of improper service of summons and instead asserting its own counterclaim, constitutes a voluntary submission to the court's jurisdiction. The Court cited Philippine Commercial International Bank v. Spouses Dy to support the rule that a party seeking affirmative relief is deemed to have submitted to the court's jurisdiction, unless a special appearance is made to challenge jurisdiction. Hertz's actions, including the statement in its motion acknowledging defective service but opting to file an answer with counterclaim, and the defenses pleaded in its answer, demonstrated a voluntary submission to the MeTC's authority. On the issue of litis pendentia: The Court disagreed with Hertz's contention that the unlawful detainer case was barred by litis pendentia due to the pendency of its Complaint for Specific Performance. The Court explained that litis pendentia requires the identity of parties, rights asserted, and reliefs prayed for, such that a judgment in one case would be res judicata in the other. In this instance, while the parties were the same, the rights asserted and reliefs sought were different. The Complaint for Specific Performance aimed to compel Optima to renegotiate the lease, reconnect utilities, and pay damages, whereas the unlawful detainer case sought ejectment and collection of rental and utility arrears. Therefore, the pendency of the specific performance case did not bar the unlawful detainer action. On the issue of eviction and award of damages: The Court found the RTC's ruling upholding Hertz's eviction to be proper on two grounds. Firstly, Hertz failed to pay rental arrearages and utility bills, which constituted an event of default under the Contract of Lease, entitling Optima to terminate the lease and judicially eject Hertz. Secondly, the lease contract expired on February 28, 2006, due to Hertz's failure to request a renegotiation at least 90 days prior to its termination, as stipulated in the contract. The Court noted that Hertz had until November 30, 2005, to express its intent to negotiate an extension but failed to do so. The expiry of the lease period is also a ground for judicial ejectment under the Civil Code. The Court also upheld the award of monthly compensation for Hertz's continued occupancy after the lease expiration, finding the lease price of P54,200 per month to be reasonable. Finally, the award of attorney's fees and judicial costs was deemed proper due to Hertz's unjustifiable retention of the premises, forcing Optima to litigate.
Main Doctrine
A defendant voluntarily submits to the jurisdiction of the court by filing a motion for leave to file an answer with counterclaim, even if there was a defective service of summons, especially when the answer filed does not raise the defense of improper service of summons and instead asserts its own counterclaim.