Case Digest (G.R. No. 215922)
Facts:
Thelma C. Muller, Grace M. Grecia, Kurt Frederick Fritz C. Muller, and Hope C. Muller, in substitution of the late Fritz D. Muller v. Philippine National Bank, G.R. No. 215922, June 17, 2019, the Supreme Court First Division, Del Castillo, J., writing for the Court.
Petitioners (the Mullers) occupied two parcels of land with improvements in Abeto Subdivision, Manduriao, Iloilo City owned by respondent Philippine National Bank (PNB). The parties had a written lease that expired on June 1, 1987. PNB sent an extrajudicial demand for rental arrears on May 26, 1987 (PhP18,000), refused to renew the lease, and later sent further correspondence including a demand to vacate dated March 17, 1988 and a final demand dated July 17, 2006. The Mullers continued to occupy the premises and sought renewal and even proposed to buy the land; PNB declined.
PNB filed an ejectment complaint on March 26, 2007. The Municipal Trial Court in Cities (MTCC), Branch 3, Iloilo City rendered judgment on October 19, 2007 in favor of PNB, ordering the Mullers to vacate and awarding back rentals fixed at specified monthly rates (and PhP18,000 for the period June 1984–June 1987). The Mullers appealed to the Regional Trial Court (RTC), Branch 33, which on June 2, 2008 modified the MTCC judgment: it held that in unlawful detainer only rentals from receipt of the last demand may be awarded, criticized the MTCC’s taking of judicial notice of fair rental value, applied prescription principles, and fixed reasonable rental at PhP1,000 monthly reckoned only from receipt of the latest demand (June 17, 2006) until vacatur on August 1, 2007.
PNB appealed to the Court of Appeals (CA). On October 30, 2013 the CA in CA-G.R. S.P. No. 03731 reversed the RTC and reinstated the MTCC award, holding that reasonable compensation should be reckoned from the initial demand (May 26, 1987) rather than the last demand, that prescription did not bar recovery because possession after lease expiration was by tolerance and did not start prescriptive periods, and that the MTCC properly fixed rental amounts; the CA awarded interest at 6% from May 26, 1987 until finality and imposed 12% thereafter, plus attorney’s fees...(Subscriber-Only)
Issues:
- Whether rentals awarded in an ejectment case may be reckoned from a date prior to the latest demand to vacate.
- Whether the Court of Appeals correctly relied on its cited jurisprudence (e.g., Racaza v. Gozum and related authorities) to justify reckoning rentals retroactively beyond the latest demand.
- Whether PNB’s claim for rentals reckoned prior to t...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)