G.R. No. 148759 - RACAZA vs. GOZUM

Petitioners: Germelina Torres Racaza and Bernaldita Torres Paras, who are the registered co-owners (successors-in-interest) of a parcel of land identified by Transfer Certificate of Title No. PT-92411, upon which stands a 2-storey, 3-door apartment.
Respondent: Ernesto Gozum, who occupied the back portion of the property since 1981 under a verbal month-to-month lease arrangement at a monthly rental of Php3,500.00.

In 1981, Gozum began occupying the property’s back portion under a verbal lease contract with the parents of the petitioners.
The property originally belonged to the late Carlos Torres, the father of the petitioners.

After the death of Carlos Torres on December 26, 1993, the petitioners inherited the property rights.
On July 1, 1995, petitioners sent a letter demanding that Gozum vacate the premises, asserting that the verbal lease had expired as it was terminable on a month-to-month basis.

Following a failed barangay conciliation, petitioners filed an ejectment case on November 24, 1995 with the Metropolitan Trial Court, which was dismissed on technical grounds.
On May 27, 1997, petitioners issued a second formal demand letter to vacate, reiterating that the verbal lease had already expired and that Gozum’s failure to pay the rental (Php3,500.00 monthly) had led to accumulating arrears.

On June 4, 1997, petitioners filed a complaint for recovery of possession (accion publiciana) with the Regional Trial Court (RTC) of Pasig City, contending that the expiration of the lease rendered Gozum’s continued possession unlawful.
The RTC, in its decision on September 30, 1998, ruled in favor of petitioners, ordering respondent to vacate the premises and to pay rental arrears from July 1, 1995 until vacatur, along with attorney’s fees and costs.

Respondent filed a motion to dismiss based on lack of jurisdiction, arguing that since he possessed a purported 10-year written lease (executed on October 1, 1989 and expiring on September 30, 1999), the proper remedy should have been an action for unlawful detainer filed in a municipal or metropolitan trial court.
In his answer, respondent denied non-payment allegations and asserted rights under the alleged long-term lease, including a right of first refusal regarding an alleged sale of the property by petitioners.
The Court of Appeals (CA) reversed the RTC decision when respondent later filed a comment and later adopted the theory that the proper jurisdiction was lacking, basing their reasoning on the filing period relative to the second demand letter.
Petitioners argued that jurisdiction is determined by the original demand (July 1, 1995) and that respondent’s active participation throughout the lower court proceedings estopped him from raising jurisdictional defenses later.

The July 1, 1995 demand letter clearly indicated the termination of the verbal lease and required respondent to vacate within a specified period, thereby establishing the accrual of the cause of action as of that date.
The May 27, 1997 letter was essentially a reiteration of the original demand, not a fresh demand that could reset the filing period.

While respondent relied on a written lease allegedly executed between him and petitioners’ father (asserting a 10-year term), the trial court found this document to be spurious and non-binding.
The evidentiary record emphasized that the nature of the month-to-month lease implied automatic expiration at the end of each month without tacit renewal when a formal notice to vacate was served.

Whether the proper remedy to recover possession in this case is an action for unlawful detainer or an accion publiciana, particularly given the lapse of time and the nature of the notice served.
Whether the filing period should be reckoned from the original demand letter dated July 1, 1995 or from the subsequent demand dated May 27, 1997.

Whether the alleged 10-year written lease contract is valid and binding, in conflict with the established fact of a verbal month-to-month lease.
The impact of the true nature of the lease (month-to-month basis) on the right to terminate and the subsequent recovery of possession.

Whether respondent’s active participation in the trial court proceedings, including his acceptance of the court’s authority, prevents him from later challenging the jurisdiction of the trial court.
If the raising of a new jurisdictional theory by respondent in the appellate stage is barred by the doctrine of estoppel.