This is a petition for review on certiorari of the Resolution^[1] promulgated on February 8, 1991 of the Court of Appeals^[2] in CA-G.R. SP No. 24069 denying herein petitioners' Petition for Review as well as the June 28, 1991 Resolution^[3] of the same court denying petitioners' Motion for Reconsideration.

The undisputed facts are as follows:

Private respondents Dorotea Bautista, Elpidio Bautista, Aniceto Bautista, Veronica B. Alvarez, Cornelio Bautista, Jr. and Filomeno Bautista are the heirs of the late Cornelio Bautista, registered owner of a property designated as Lot 3, Block 15 situated at 3020 3rd Street, Guadalcanal Street, Sta. Mesa, Manila covered by TCT No. 51930.

Sometime in 1958, Cornelio Bautista allowed petitioners Sofronio Martinada (now deceased), David Martinada, Andres Martinada, Jr., Lilia Martinada Yepes, Lydia Martinada Macarisas, Marino Martinada and Zenaida Martinada Modesto to occupy the subject property for a monthly consideration of P100.00.

On April 29, 1980, Cornelio Bautista filed an ejectment case against petitioners with the then City Court of Manila on the ground that the latter were not paying their monthly rentals since July 15, 1958.

Petitioners, however, alleged that they have been occupying the subject property since 1956 when it was still vacant, swampy and ownerless; that the National Housing Authority disapproved their application to purchase the subject property but instead awarded it to Cornelio Bautista; that sometime in 1958, Cornelio Bautista had verbally agreed to lease the subject property to them through petitioner Sofronio Martinada for a monthly consideration of P100.00 which can be offset by whatever expenses they may incur for the improvement of the subject property; that they have spent P60,000.00 for the filling materials to improve the condition of the subject property; and that sometime in 1980, private respondents demanded that they vacate the subject property but they refused unless they were reimbursed for the expenses they had incurred in the improvement of the subject property.

On May 2, 1990, the Municipal Trial Court rendered its decision, the dispositive portion of which reads, as follows:

"WHEREFORE, judgment is hereby rendered;

"1. Ordering the defendants and all persons claiming rights under them to vacate the premises situated at Lot 3, Block 15, 3020, 3rd Street, Guadalcanal, Sta. Mesa, Manila and turn over the possession thereof to the plaintiffs.

"2. Ordering defendants to pay the sum of One Hundred (P100.00) a month starting July 15, 1958, less whatever payments, if any, made by the defendants to the plaintiff, representing the rental due the premises; up to and until defendants shall have vacated the premises;

"3. Ordering the defendants to pay the amount of P2,000.00 as Attorney's Fees, plus costs of this suit."^[4]

On appeal by the petitioners to the Regional Trial Court, said appellate court on December 27, 1990 modified the decision of the trial court, the dispositive portion of which reads, as follows:

"WHEREFORE, the Court AFFIRMS the appealed decision with the modification that defendants and all persons claiming rights under them are ordered to vacate the premises situated at Lot 3, Block 15, 3020 3rd Street, Guadalcanal Street, Sta. Mesa, Manila, and to surrender possession thereof to the plaintiffs; to pay plaintiffs the sum of P100.00 a month from February 15, 1980 until they vacate the premises, and to pay plaintiffs P2,000.00 as attorney's fees and costs."^[5]

Not satisfied with said decision, petitioners filed a Petition for Review with the respondent Court of Appeals which was denied in a Resolution promulgated on February 8, 1991.

Thereafter, petitioners filed a Motion for Reconsideration which was likewise denied by the respondent Court of Appeals in a Resolution promulgated on June 28, 1991. Hence, this instant petition.

We find the petition unmeritorious.

Time and again, we have adhered to the principle that the appellate jurisdiction of the Supreme Court is limited to reviewing errors of law that may have been committed by the lower court. The Supreme Court is not a trier of facts. It leaves these matters to the lower court, which has the opportunity and the facilities to examine these matters. The Court has repeatedly declared its policy of deferring to the factual findings of the trial judge, who has the advantage of directly observing the witnesses on the stand and to determine their demeanor whether they are telling or distorting the truth.^[6] Findings of fact of the Court of Appeals are final and binding upon this Court unless it is shown that they are grounded entirely on speculations, surmises or conjectures.^[7] In the instant case, we have carefully reviewed the records and found the findings of facts of the lower courts to be fully supported by the evidence.

Petitioners' contention that they have a better right to the subject property having been in prior possession, cannot operate to divest private respondents of their rights as the registered owners. The fact that private respondents did not reimburse petitioners for the alleged expenses they incurred for the improvement of the subject property is no justification for their refusal to vacate the property. As held by the respondent appellate court:

"Second, x x x. The evidence shows that the premises belong to the plaintiff (herein private respondent Cornelio Bautista), covered as it is by TCT No. 51930. The property was awarded by the National Housing Authority to the plaintiff sometime in 1958. Defendants (herein petitioners) claimed the property as prior occupants but the NHA did not validate their claim.

"Third, We cannot subscribe to defendants' contention that they should not be ejected because they were allowed to stay in the premises by a certain Mr. Sofronio Martinada who had a verbal contract of lease with the titled owner, Mr. Cornelio Bautista. Allegedly, pursuant to this verbal contract, defendants can stay in the premises at a monthly rental of P100.00 which can be offset by whatever they would spend for its improvement. The evidence to support this allegation is scant, to say the least. The petition does not show the authority of Mr. Martinada to sub-lease the premises. Indeed, the claim of a verbal contract can be easily concocted.

"Fourth, the trial court correctly held that the stay of the defendants in the premises is due to the tolerance of the plaintiffs. The tolerance ended in 1980 when plaintiffs formally demanded they vacate the premises. Defendants cannot cling to the premises by asking that they be paid for the improvements they made in the premises. They rely on Article 546 of the Civil Code. The reliance is misplaced. The Article does not apply to lease relationships.

Moreover, the alleged improvements worth P60,000.00 has not been clearly established in the petition."^[8]

WHEREFORE, the instant Petition for Review on certiorari is hereby DISMISSED. The questioned resolutions of the respondent appellate court are AFFIRMED in toto. Costs against petitioners.

SO ORDERED.

Narvasa, C.J., (Chairman), Padilla, and Regalado, JJ., concur.
Puno, J., no part.

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^[1] Rollo, pp. 10-11.

^[2] Fifth Division; Penned by Justice Reynato S. Puno with the concurrence of Justice Oscar M. Herrera and Justice Abelardo M. Dayrit.

^[3] Rollo, p. 13.

^[4] Id., at p. 16.

^[5] Court of Appeals' Rollo, p. 19.

^[6] Bernardo, et al. vs. Court of Appeals, G.R. 101680, December 7, 1992.

^[7] Consolidated Dairy Products Co. vs. Court of Appeals, 212 SCRA 810 [1992].

^[8] Rollo, pp. 10-11.