Lozano v. Fernandez
REITERATIONFacts
The Antecedents: The underlying dispute concerns a parcel of land and its improvements in CM Subdivision, New Cabalan, Olongapo City. Petitioner Ma. Antonette Lozano (Lozano) claims she has owned and possessed the property since 1996 and that respondent Jocelyn K. Fernandez (Fernandez) duped her into signing a blank document that was later converted into a Waiver and Transfer of Possessory Rights in Fernandez's favor. Lozano alleges Fernandez is in the business of lending money at unconscionable interest rates and uses collateral from borrowers. Fernandez, on the other hand, asserts that Lozano executed a Waiver and Transfer of Possessory Rights in her favor on December 11, 2006, after which Fernandez tolerated Lozano's continued possession until July 15, 2009, when she sent a demand letter for Lozano to vacate. Procedural History: Following Lozano's failure to vacate, Fernandez filed an unlawful detainer case against her before the Municipal Trial Court in Cities (MTCC), Branch 2, Olongapo City. The MTCC dismissed Fernandez's complaint, finding that her cause of action had prescribed as it was filed more than one year after possession became unlawful and that Fernandez failed to prove tolerance. Fernandez appealed to the Regional Trial Court (RTC), Branch 72, Olongapo City, which reversed the MTCC's decision, finding that Lozano's possession was merely tolerated after the Waiver's execution and that her continued possession became illegal after the demand to vacate. The RTC ordered Lozano to vacate, pay rentals, and attorney's fees. Lozano appealed to the Court of Appeals (CA), which affirmed the RTC's decision, upholding the Waiver and the finding of tolerance, and consequently the awards of rentals and attorney's fees. Lozano's motion for reconsideration was denied by the CA. The Petition: Lozano filed a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to reverse the CA's decision. She argues that the CA erred in sustaining the RTC's order for ejectment, asserting that no tolerance in contemplation of law was proven. Lozano contends that her possession was not merely tolerated, as Fernandez's inaction after the Waiver's execution constitutes negligence, not permission, and that the affidavits presented by Fernandez lacked specific averments of tolerance. She also claims the unlawful detainer complaint was filed beyond the one-year prescriptive period. Furthermore, Lozano challenges the award of rentals and attorney's fees, arguing that Fernandez failed to provide sufficient proof for these claims and that the award of attorney's fees lacked a proper basis in the RTC's body.
Issue(s)
Whether the Court of Appeals gravely erred in sustaining the Decision of the RTC ordering the ejectment of the Petitioner from the subject property notwithstanding that there was no tolerance in contemplation of the law on ejectment that was proven; and whether the Waiver was valid, and if the cause of action prescribed. Whether the Court of Appeals gravely erred in sustaining the Decision of the RTC ordering the payment of reasonable rentals and attorney's fees in favor of the Respondent at the expense of the Petitioner notwithstanding the absence of proof of factual and legal basis therefor.
Ruling
The petition is GRANTED. The February 16, 2011 Decision of the Municipal Trial Court in Cities, Branch 2, Olongapo City in Civil Case No. 7238 is REINSTATED, dismissing Fernandez's complaint for unlawful detainer.
Ratio Decidendi
On the issue of tolerance, validity of the Waiver, and prescription of the cause of action: The Court held that in unlawful detainer cases based on tolerance, the acts of tolerance must be proved by positive acts, not mere silence or inaction. The Court emphasized that tolerance signifies permission and not merely silence or inaction, as the latter constitutes negligence. In this case, Fernandez's alleged tolerance was premised solely on her inaction after the Waiver was executed, which is insufficient to establish tolerance. The affidavits of Fernandez and her witness merely stated conclusions of tolerance without describing specific positive acts of permission. Therefore, even assuming the Waiver was valid, Fernandez's failure to assert her possessory rights did not amount to tolerance. The Court reiterated that the presumption of regularity of notarized documents can only be overcome by clear and convincing evidence, not by mere preponderance of evidence. Lozano's claim that she never appeared before a notary public and that the document was a loan with collateral, without supporting evidence, was insufficient to overcome this presumption. The Court found that Lozano's allegations were unsubstantiated and that the records were bereft of evidence indicating any irregularity in the document or its notarization. The MTCC dismissed the complaint for unlawful detainer on the ground that Fernandez's cause of action had prescribed, as it was filed more than one year after she gained possessory rights. While the RTC and CA did not directly rule on prescription, their findings on tolerance were crucial. The Supreme Court, in reinstating the MTCC decision, implicitly affirmed that the cause of action for unlawful detainer based on tolerance had not been sufficiently established within the prescriptive period, as the necessary element of tolerance was absent. On the award of rentals and attorney's fees: Since the unlawful detainer case was dismissed for lack of cause of action due to the absence of proven tolerance, the awards for rentals and attorney's fees, which were consequential to the finding of unlawful detainer, were also set aside. The Court noted that the award of attorney's fees by the RTC was not sufficiently explained in its body. The dismissal of the ejectment case rendered these awards moot.
Main Doctrine
In unlawful detainer cases based on tolerance, mere inaction or silence by the property owner after a waiver is executed does not constitute tolerance; there must be positive acts indicative of permission. Furthermore, the presumption of regularity of a notarized document can only be overcome by clear and convincing evidence, not mere preponderance of evidence.