G.R. No. 147372 - Lanuza vs. Munoz

Petitioners: Caezar and Asteria Lanuza, who assert they are the lawful owners of the disputed property.
Respondent: Ma. Consuelo MuAoz, who claims ownership of a parcel of land in Alabang, Muntinlupa, evidenced by Transfer Certificate of Title No. 207017 and the nine-door apartment constructed thereon.

In 1996, respondent alleged that she acquired the property from the petitioners by executing a Deed of Absolute Sale.
The petitioners countered by alleging that the deed was executed under the persuasion of respondent’s father, Francisco MuAoz, Sr., as part of an arrangement to expedite the sale under an agreement made on August 6, 1996.
The agreement provided that the apartment would be repaired and remodeled and subsequently sold with profits shared among the parties after accounting for renovation expenses.
A letter dated January 24, 1997 from Francisco MuAoz, Sr. indicated the expiration of the profit-sharing arrangement and proposed renting the property if the petitioners preferred to continue occupancy.

At the time respondent acquired the title, petitioners were occupying specified doors of the apartment (door no. 2 and door no. 3).
In January 1997, respondent declared that her previous tolerance for the petitioners’ occupancy was withdrawn, setting conditions for continued stay by demanding rental payments starting February 1997 (P5,000.00 for door no. 2 and P6,000.00 for door no. 3).
Petitioners failed to pay the demanded rental amounts and did not vacate, prompting respondent to initiate legal action for unlawful detainer.

The respondent filed a complaint for unlawful detainer before the Metropolitan Trial Court (MTC) of Muntinlupa City in Civil Case No. 3749.
The MTC dismissed the complaint for lack of jurisdiction, reasoning that recovery of rentals requires a prior demand to vacate, a requirement applicable in lease (or lessor-lessee) relationships.
The Regional Trial Court (RTC) subsequently affirmed the MTC’s dismissal.
The Court of Appeals reversed the RTC ruling in CA-G.R. SP No. 53780 (Decision dated December 28, 2000) by finding that the real basis of the complaint was the cessation of the tolerance extended to the petitioners, and not non-payment of rentals.
The Court of Appeals remanded the case back to the MTC for further proceedings.
Petitioners also assailed the CA Resolution dated March 7, 2001, which denied their motion for reconsideration based on alleged misapplication of Section 2, Rule 70 of the 1997 Rules of Civil Procedure.

Whether the Court of Appeals erred in reversing the RTC’s dismissal by holding that a demand to vacate was unnecessary when the action was based on the withdrawal of tolerance rather than on non-payment of rentals.
Whether the absence of a contractual lease (and hence a lessor-lessee relationship) exempts the complaint for unlawful detainer from the jurisdictional requirement of a prior demand to vacate.

Whether remanding the case to the MTC for further proceedings was proper, given that the appellate court’s findings were confined to issues of law and not to the merits of possession or other factual controversies.
Whether the Court of Appeals should have resolved the case on the merits rather than remanding, in light of respondent’s contention that all necessary evidence was already on record.