G.R. No. 85985 - Philippine Airlines, Inc. vs. National Labor Relations Commission

The dispute involves a house and lot in P.B. Constantino Subdivision, Tagaytay City, covered by Transfer Certificate of Title (TCT) No. T-24503, registered in the names of Antonio O. Hermano and Remedios Hermano.
On 13 June 2002, respondents filed a Complaint for ejectment and damages against petitioner Marcela M. Dela Cruz in the Municipal Trial Court in Cities (Branch 1, Tagaytay City).
The Complaint alleged that:

Respondents were the registered and lawful owners of the property.
Petitioner unlawfully occupied the property on or about 1 September 2001 based on an alleged Memorandum of Agreement with a certain Don Mario Enciso Benitez, without the consent of the respondents.
The property was being used by respondents as a rest house/vacation place.
Respondents had issued a formal demand (with a specified monthly rental demand of ₱20,000.00) for petitioner to vacate and surrender the property starting from September 2001.

In her Answer with Counterclaim, petitioner did not deny the existence of TCT No. T-24503 but contended that:

The true and actual owner of the property was Don Enciso Benitez.
Respondents had previously sold the property to Benitez, who in turn sold it to petitioner by way of a Deed of Absolute Sale executed on 1 March 2001.
Antonio (respondent) was aware of this sale and acquiesced to petitioner’s occupation.
Estoppel had set in, given that respondent’s conduct (allowing the use and management of the property by petitioner’s caretakers) indicated a relinquishment of any contest to petitioner’s possession.

The Municipal Trial Court in Cities (MTCC) rendered a Decision on 21 November 2002 dismissing the ejectment case for lack of jurisdiction.

The MTCC ruled that because the title transfer to petitioner was subject to an unfulfilled condition involving a subsequent real estate transaction, the possession issue was not apt for a summary ejectment proceeding but should be addressed in an action for recovery.

Respondents appealed to the Regional Trial Court (RTC), Branch 18, Tagaytay City, which affirmed the MTCC Decision on 18 March 2003.

The RTC noted ambiguity in whether the suit was for forcible entry or unlawful detainer, but ultimately recognized it as an ejectment case.
Subsequent pleadings suggested that the proper remedy should be a vindicatory action rather than ejectment; hence, the dismissal for lack of jurisdiction was considered proper.

On 10 April 2003, respondents filed a Petition for Review with the Court of Appeals (CA).

The case was indeed an ejectment complaint for forcible entry.
The allegations sufficiently proved respondents’ prior physical possession and that petitioner’s entry was by stealth.
The filing of the Complaint was timely within the one-year period provided for under the Rules, counting from the time petitioner learned of the illegal possession.

The Complaint alleged that petitioner’s entry into the property was unauthorized and executed by stealth.
Prior physical possession by respondents was alleged based on their long-standing use of the property as a rest house and vacation place.

Petitioner countered this by presenting the affidavit of her caretaker, which corroborated that she had occupied the property as early as March 2001.
Respondents relied on documents such as the title and Tax Declaration to support their claim, although these were determined to be evidence of ownership rather than actual, de facto possession.

The Supreme Court, in reviewing the case, noted divergent findings between the lower courts.
It reevaluated the factual issues regarding whether respondents sufficiently proved “prior physical possession” as required in forcible entry cases.
Ultimately, while the CA had found the allegations sufficient, the Supreme Court examined all the evidence and concluded that respondents failed to present competent and corroborative evidence to establish actual or material possession prior to petitioner’s entry.

Whether respondents (Antonio and Remedios Hermano) adequately alleged and proved the essential element of prior physical possession in an action for forcible entry.
Whether the Complaint’s allegations, which focused on possession by stealth and subsequent unlawful hold, were sufficient to invoke the summary remedy provided under Section 1, Rule 70 of the Revised Rules of Court in forcible entry cases.