G.R. No. 140798 - Quevada vs. Court of Appeals

Case Summary (G.R. No. 140798)

Facts of the Case

Juanito N. Villaverde (private respondent) was the lessor of a parcel of land with a residential house. In 1994, he and Marcelito Quevada (petitioner) entered into a lease contract for a 96-square meter portion of the house, from August 15, 1994, to August 15, 1995, at a monthly rent of ₱2,500. They executed an extension until April 15, 1996. After the lease’s expiration, Quevada continued occupying the premises without paying any compensation. Despite repeated demands to vacate, he refused and repudiated an agreement to vacate by December 31, 1997, reached during barangay conciliation. Villaverde served a written notice to vacate on January 20, 1998, which was ignored, prompting an ejectment suit.

Petitioner’s Contentions

Petitioner argued he had built the house on the land starting in 1985 and occupied it from 1986. In 1994, Villaverde negotiated to buy the land from a previous owner, and petitioner also offered to purchase it for ₱1,000,000 but failed to raise the funds. Villaverde purportedly assured petitioner he would transfer the title once payment was made. To secure occupancy, a lease contract was executed with the agreement that rent would be ₱2,500 monthly for the land only since the house belonged to petitioner. Petitioner maintained an implied trust relationship, contending Villaverde was holding the title in trust for him. He also opened a trust account for monthly rental payments, which Villaverde refused to accept. Petitioner claimed entitlement to possession under this implied trust or, alternatively, reimbursement for the value of the house he built.

Lower Court Decisions

The Metropolitan Trial Court (MeTC) ruled in favor of Villaverde, ordering petitioner to vacate and pay reasonable compensation for occupancy from May 1996 until surrender. The Regional Trial Court (RTC) affirmed the MeTC decision. The Court of Appeals (CA) likewise upheld the rulings and denied the petitioner’s motion for reconsideration.

Issues Presented

The Supreme Court identified four main issues:

Whether the ejectment action was proper.
Whether Villaverde, not being the titled owner, could bring the ejectment action.
Whether petitioner was entitled to reimbursement for the value of the house on the leased lot.
Whether an implied trust existed in favor of petitioner.

Proper Proceedings and Jurisdiction on Ejectment Action

Under Section 1, Rule 70 of the Rules of Court, a lessor may institute an ejectment action within one year following unlawful withholding of possession by a lessee after lease expiration. The MeTC has jurisdiction to hear such summary ejectment cases under the 1991 Revised Rule on Summary Procedure. Villaverde, as lessor, was unlawfully deprived of possession upon Quevada’s refusal to vacate after lease expiry and repudiation of the barangay agreement to vacate. The demand and written notice requirements were met. The action was filed within one year from the unlawful withholding, counted from the notice to vacate, with tolling of the prescriptive period during barangay conciliation. Even if the expired lease was impliedly renewed on a month-to-month basis, proper notice terminated petitioner’s right to stay.

Right of Non-Titled Lessors to File Action for Unlawful Detainer

The ejectment action aims to recover actual physical possession, not to settle ownership. Philippine jurisprudence recognizes the right of any person entitled to possession—including lessors without title—to file an ejectment suit. The absence of ownership or title does not preclude recovery of possession and cannot be raised as a defense in such summary proceedings. This expedites restoration of possession and avoids breach of peace, leaving ownership disputes for plenary suits.

Reimbursement for the Value of the House

Article 448 of the Civil Code applies where a builder in good faith erects structures on land owned by another, entitling the builder to indemnity or payment from the landowner or to pay rent if the landowner appropriates the structures. Petitioner is not the owner but a lessee; no evidence shows prior owner consent or agreement to pay for the land. Good faith in construction is presumed, and petitioner’s refusal to vacate is not shown to be in bad faith. Villaverde refuses to sell the land. The Court ruled that petitioner must pay reasonable rent for continued occupancy post lease expiration but may be reimbursed for the value of the leased portion of the house. The case was remanded to the trial court to assess the value so it could be offset against rentals due to prevent unjust enrichment.

Absence of Implied Trust

An impl

Case Syllabus (G.R. No. 140798)

Background and Facts of the Case

The petitioner, Marcelito D. Quevada, leased a portion (96 square meters) of a residential house and land located in Sampaloc, Manila, from respondent Juanito N. Villaverde.
The first lease covered the period from August 15, 1994 to August 15, 1995, at a monthly rent of ₱2,500.
The parties extended the lease from August 15, 1995 to April 15, 1996.
After this extension expired, petitioner continued possession without paying any rent or compensation.
Respondent made multiple demands for petitioner to vacate, which were refused.
At the barangay court, petitioner repudiated an agreement to vacate the premises as of December 31, 1997.
On January 20, 1998, respondent served a formal fifteen-day notice to vacate and demanded back rent of ₱5,000 from May 1996 onward until vacation.
Petitioner claimed to have built the house in 1985-1986 on the lot occupied and asserted an implied agreement with respondent regarding the purchase of the land, including trust relations and offers to pay purchase price of ₱1,000,000, which respondent declined.
Petitioner deposited monthly rent payments in trust due to respondent's refusal to accept them.
The Metropolitan Trial Court (MeTC) ruled in favor of respondent, ordering petitioner to vacate and pay reasonable compensation.
The Regional Trial Court (RTC) and the Court of Appeals (CA) affirmed the lower courts' decisions.
Petitioner filed a petition for review bringing four primary issues for resolution concerning the propriety of ejectment, respondent's right to sue, reimbursement for house value, and existence of implied trust.

Jurisdiction and Proper Venue of the Action

The action for ejectment (unlawful detainer or desahucio) is properly filed in the Metropolitan Trial Court (MeTC).
According to Section 1, Rule 70 of the Rules of Court, a lessor whose right to possession was unlawfully withheld after expiration or termination of lease may bring ejectment within one year.
Section 2, Rule 70 requires a lessor to demand payment or lease compliance and to serve notice to vacate before instituting ejectment.
Petitioner’s continued possession without contract was by mere tolerance of respondent, which lawfully terminated upon the demand to vacate.
The filing of action was within the one-year prescriptive period, which was tolled during barangay conciliation proceedings as per Section 410(c) of the Local Government Code.
The implied renewal of lease after April 15, 1996 was monthly and terminable upon notice, which respondent properly served before instituting the action.
Petitioner’s refusal to vacate following demand made his possession unlawful, justifying ejectment.

Right of the Lessor to File Action Despite Not Being Titled Owner

The action for unlawful detainer focuses solely on recovery of physical possession, independent of ownership or legal