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DOLORES ADORA MACASLANG v. RENATO

FACTS:

The petitioner sold a residential land to the respondents and promised to vacate the house as soon as she found a new residence. However, she failed to do so despite the respondents' demand. The respondents filed an unlawful detainer complaint in the Municipal Trial Court (MTCC), which ruled in their favor and ordered the petitioner to vacate the premises and pay attorney's fees and monthly rental. The petitioner appealed to the Regional Trial Court (RTC), but the complaint was dismissed for failure to state a cause of action. The Court of Appeals (CA) reversed the RTC's decision and reinstated the MTCC's decision. The petitioner appealed to the Supreme Court, raising issues on the RTC's review of the appeal, the cause of action in an unlawful detainer case, and the violation of the Rules on Summary Procedure.

The petitioner's appeal to the RTC from the MTCC decision was governed by Section 18 of Rule 70 of the Rules of Court. The RTC could decide based on the entire record of the proceedings, as well as the memoranda or briefs submitted by the parties. This difference in procedures for deciding on review is due to Section 22 of Batas Pambansa Blg. 129, which grants regional trial courts appellate jurisdiction. The Court also promulgated the Revised Rules on Summary Procedure and the Rules of Civil Procedure to provide a quicker and more affordable determination of cases.

The case involved an appeal from the MTC to the RTC. The RTC decided the case based on the entire record of the proceedings in the MTC and the memoranda filed by the parties. However, the CA disallowed the consideration and resolution of certain issues, arguing that the review was limited to the errors assigned and argued in the appeal. The CA contended that the complaint failed to state a cause of action, but the Supreme Court disagreed and stated that the complaint established a cause of action against the defendant.

ISSUES:

  1. Whether or not the CA correctly found that the RTC committed reversible error in ruling on issues not raised by the petitioner in her appeal.

  2. Whether or not the CA correctly found that the complaint stated a valid cause of action.

  3. Whether or not the CA erred in finding that there was a valid demand to vacate made by the respondents on the petitioner.

  4. Whether or not the petitioner's defense of ownership was meritorious.

RULING:

The Supreme Court grants the petition for review.

  1. The RTC, in exercising appellate jurisdiction, was not limited to the errors assigned in the petitioner's appeal memorandum but could decide on the basis of the entire record of the proceedings had in the trial court and such memoranda and/or briefs as submitted by the parties or required by the RTC.

  2. The complaint stated a valid cause of action for unlawful detainer, as it sufficiently alleged that the possession of the property by the defendant became illegal upon the demand to vacate by the plaintiff.

  3. The demand made by the respondents constituted a valid demand to vacate.

  4. However, the Court found the equitable mortgage defense of the petitioner meritorious. The circumstances indicated that the transaction was an equitable mortgage, not a sale.

PRINCIPLES:

  1. Scope of Appellate Review: RTCs, in the exercise of their appellate jurisdiction, may consider the entire record of proceedings from the trial court and are not limited to errors assigned in the appeal.

  2. Cause of Action in Unlawful Detainer: Elements include initial lawful possession by lease or tolerance, subsequent illegal possession upon notice to vacate, and filing within one year from the last demand to vacate.

  3. Equitable Mortgage: Indicators include inadequate consideration, retention of possession, and continued obligation by the vendor to pay a debt, reflecting that the transaction secures the payment of a debt rather than an absolute sale.

  4. Substantive and Procedural Lapses: Procedural adherence is crucial; e.g., Rule 70 of the Rules of Court mandates strict procedures for summary proceedings, including the handling of affidavits and the prohibition of default judgments without express court orders.

  5. Title Determination in Ejectment: While possession issues may touch on ownership, such findings are not conclusive and do not determine title outside of the ejectment case.