G.R. No. 194880 - Republic vs. Sunvar Realty Development Corporation

Case Summary (G.R. No. 194880)

Factual Background

Petitioners Republic of the Philippines and National Power Corporation leased four parcels of land, including the parcel covered by TCT No. 458365, to the Technology Resource Center Foundation, Inc. (TRCFI) on 26 December 1977 for a 25-year term commencing 01 January 1978 and ending 31 December 2002. TRCFI was expressly permitted under the main lease to sublease portions of the parcels. Respondent Sunvar Realty Development Corporation obtained possession through a series of sublease agreements with TRCFI that, although commencing on different dates, were all set to expire on 31 December 2002 and provided renewal at Sunvar’s exclusive option.

Change of Lessee and Notices of Nonrenewal

TRCFI was dissolved in 1987 and its functions were assumed by the Philippine Development Alternatives Foundation (PDAF). In April 2002 Sunvar sought to exercise its option to renew the subleases and proposed new rental terms. PDAF responded that it could not act until petitioners indicated their position. On 03 June 2002, petitioner National Power Corporation notified PDAF that it would not renew the lease. The Republic of the Philippines likewise notified PDAF that the main lease would not be renewed. PDAF communicated petitioners’ decisions to Sunvar. The main lease and the sublease agreements expired on 31 December 2002. Thereafter petitioners recovered their rights in the property and transferred the parcel to the Privatization Management Office for disposition.

Post-Expiration Occupation and Demands to Vacate

Despite expiration of the subleases, Sunvar continued to occupy and develop the property, having introduced commercial buildings and operated parking and leasable spaces. Petitioners, through the Office of the Solicitor General (OSG), served a Notice to Vacate dated 22 February 2008 requiring Sunvar to vacate within thirty days; Sunvar did not comply. Petitioners then served a final notice dated 03 February 2009 giving Sunvar fifteen days to vacate. The PMO prepared an Inspection and Appraisal Report dated 02 April 2009, estimating a fair rental value of P10,364,000 per month and claiming lost income of P630,123,700 from 01 January 2002 to 31 March 2009.

Metropolitan Trial Court Proceedings

On 23 July 2009 petitioners filed a Complaint for unlawful detainer with the Metropolitan Trial Court of Makati City, Civil Case No. 98708, seeking possession and damages. Sunvar moved to dismiss for lack of jurisdiction, asserting absence of privity with petitioners and, alternatively, arguing that the proper remedy was an accion publiciana in the RTC because alleged dispossession had lasted more than one year. The MeTC denied the Motion to Dismiss on 16 September 2009 and denied reconsideration on 08 December 2009. Sunvar filed an Answer and yet also filed a Rule 65 petition for certiorari in the RTC to assail the MeTC’s denial of the Motion to Dismiss.

RTC Proceedings and Decision

The Regional Trial Court of Makati City declined petitioners’ motion to dismiss the Rule 65 petition and, after hearings and memorandum submissions, granted Sunvar’s certiorari petition in an Order dated 01 December 2010. The RTC held that the one-year period to bring an unlawful detainer action had to be reckoned from expiration of the main lease and subleases on 31 December 2002, and therefore petitioners’ complaint filed in 2009 was untimely and constituted an accion publiciana properly cognizable by the RTC rather than an unlawful detainer within the MeTC’s summary jurisdiction.

Procedural Question Presented to the Supreme Court

Petitioners invoked Rule 45 to challenge the RTC Decision, raising only questions of law. The threshold issue for the Court was whether the RTC erred in entertaining and deciding a prohibited certiorari petition under the 1991 Revised Rules on Summary Procedure, Sec. 19(g), and whether the RTC correctly computed the one-year period for an unlawful detainer action.

Supreme Court on Proper Mode of Review

The Court held that petitioners’ resort to Rule 45 was procedurally proper because they raised only questions of law. The Court explained the distinction among modes of review from the RTC and that where only questions of law are involved, a petition for review on certiorari under Rule 45 to the Supreme Court is available. The Court then determined that the RTC erred in assuming jurisdiction over Sunvar’s Rule 65 petition. The Court emphasized that the 1991 Revised Rules on Summary Procedure, Sec. 19(g) expressly prohibit filing petitions for certiorari against interlocutory orders in summary proceedings and that the RTC should have dismissed Sunvar’s Rule 65 petition as a prohibited pleading.

RTC’s Reliance on Bayog and Go Distinguished

The Court examined Sunvar’s reliance on Bayog v. Natino and Go v. Court of Appeals and found both inapplicable. The Court explained that those precedents permitted pro hac vice relief only upon unusual or extraordinary circumstances: in Bayog to avoid grave injustice to an illiterate, sick tenant unable to timely answer; and in Go to fill a procedural void where a summary proceeding was suspended indefinitely. The Court found no comparable circumstances in Sunvar’s case. Sunvar had available an expeditious remedy before the MeTC—proceeding with summary hearings and filing an answer—and thus its certiorari petition to the RTC was both prohibited and superfluous.

One-Year Reckoning for Unlawful Detainer

The Court addressed the substantive issue whether petitioners’ action was a proper unlawful detainer in the MeTC or an accion publiciana in the RTC by determining the correct reckoning date for the one-year limitation. The Court reaffirmed the well-settled rule that an unlawful detainer action must be brought within one year from the last demand to vacate, per Rules of Court, Rule 70, Sec. 1 and Sec. 2, and consistent jurisprudence such as Leonin v. Court of Appeals. The Court held tha

Case Syllabus (G.R. No. 194880)

Parties and Procedural Posture

Republic of the Philippines and National Power Corporation filed this Rule 45 Petition seeking review of the RTC Decision dismissing their unlawful detainer complaint.
National Power Corporation and the Republic are co-owners of parcels of land in Makati City including the parcel covered by TCT No. 458365 which is the subject property.
The Privatization Management Office represented the petitioners in the prosecution and disposition of the subject property.
Sunvar Realty Development Corporation occupied the subject property by virtue of sublease agreements that expired on 31 December 2002.
The Metropolitan Trial Court of Makati City initially entertained the Complaint for unlawful detainer and denied Sunvar's Motion to Dismiss.
The Regional Trial Court of Makati City granted Sunvar's Rule 65 Petition and ordered the MeTC to dismiss the Complaint for lack of jurisdiction.
The petitioners elevated the RTC Decision to the Supreme Court by a petition for review on certiorari under Rule 45 raising only questions of law.

Key Factual Allegations

Petitioners leased four parcels of land, including the subject property, to Technology Resource Center Foundation, Inc. (TRCFI) for a twenty-five year term from 01 January 1978 to 31 December 2002.
The lease granted TRCFI the right to sublease the whole or part of the leased land, and TRCFI subleased most of the subject property to Sunvar under five sublease agreements.
The sublease agreements commenced on various dates but were all set to expire on 31 December 2002 and were stated to be renewable for another twenty-five years at Sunvar's exclusive option.
Sunvar constructed commercial buildings and used open spaces for parking during its occupation of the property.
TRCFI was dissolved in 1987 and Philippine Development Alternatives Foundation (PDAF) succeeded to its functions.
Sunvar sent letters dated 26 April 2002 expressing desire to renew the subleases and proposed increased rental rates for a further twenty-five year term.
PDAF replied on 10 May 2002 that it had not received authorization from petitioners and could not act on Sunvar's renewal proposal.
NPC and the Republic notified PDAF and Sunvar of their decision not to renew the lease, with NPC's notice dated 03 June 2002 and a memorandum from Senior Deputy Executive Secretary Flores advising nonrenewal.
The main lease and the sublease agreements expired on 31 December 2002, and petitioners recovered rights over the subject property while Sunvar remained in possession.
The Office of the Solicitor General served a notice to vacate on Sunvar dated 22 February 2008 and a final notice dated 26 January 2009 which Sunvar received on 03 February 2009.
The Privatization Management Office issued an Inspection and Appraisal Report dated 02 April 2009 valuing fair rental at P10,364,000 per month and claiming lost income of P630,123,700 from 01 January 2002 to 31 March 2009.
Petitioners filed a Complaint for unlawful detainer dated 26 May 2009 and filed in the MeTC on 23 July 2009 seeking possession and damages.

Procedural History

Sunvar filed a Motion to Dismiss the MeTC Complaint alleging lack of privity and that the proper remedy was accion publiciana in the RTC.
The MeTC denied Sunvar's Motion to Dismiss on 16 September 2009 and denied reconsideration on 08 December 2009.
Sunvar nevertheless filed a Rule 65 Petition for Certiorari with the RTC of Makati City to assail the MeTC's denial of its Motion to Dismiss.
The RTC declined petitioners' motion to dismiss the certiorari petition and proceeded to hear it on the ground of alleged extraordinary circumstances.
In its Order dated 01 December 2010, the RTC granted Sunvar's Rule 65 Petition and directed the MeTC to dismiss the Complaint for lack of jurisdiction.
Petitioners filed the present Petition for Review on Certiorari under Rule 45 on 14 February 2011, presenting exclusively questions of law to the Supreme Court.

Issues Presented

Whether the Regional Trial Co