Wednesday, February 22, 2012

Abaya Investments Corporation vs. Merit Philippines & Dominise, [G.R. No. 176324 April 16, 2008]

Facts: Petitioner leased a commercial building known as “Carmen Building” located at Sampaloc, Manila to respondents for the period September 1, 2000 to August 31, 2005. The contract contained a stipulation prohibiting respondents from subleasing any portion of the building. 

Thereafter, respondents failed to pay the rentals for the months of January, February, March and April 2001 but after several demands, respondents paid petitioner these rentals. 

However, respondents again failed to pay the rentals for the succeeding months. Petitioner also discovered that respondents subleased a portion of the building to a computer gaming entity without its consent. Hence, on July 30, 2001, petitioner sent a letter demanding respondents to pay the arrearages, electricity and water bills and to terminate the sublease. 

Respondents made payments in August and September, 2001. However, they again reneged on their obligation to pay the rents due and to terminate the sublease contract which compelled petitioner to send another demand letter dated October 22, 2001. Petitioner categorically demanded payment of the balance due and for respondents to vacate the premises. 

Respondents made partial payments in November and December, 2001. However, with the accrual of rentals, interest, and electricity bill, respondents’ obligation amounted to P352,232.70. Finally, on January 2, 2002, petitioner filed a Complaint for Unlawful Detainer against respondents for non-payment of rentals and illegal subleasing before the Metropolitan Trial Court of Manila. 

On December 10, 2002, the Metropolitan Trial Court of Manila rendered a Decision in favor of petitioner. 

The RTC affirmed the decision of the MeTC; however, on appeal to the CA, the court reversed the decision stating that the trial court was without jurisdiction when it took cognizance of the complaint filed before it since the issue was not one of possession but rather rescission of contracts over which the Metropolitan Trial Court is without jurisdiction. 

Hence, this petition for review on certiorari. 

Issue: Whether the Complaint involves a case of unlawful detainer and therefore within the jurisdiction of the Metropolitan Trial Court 

Held: YES. A review of the averments of the Complaint reveals that there is an allegation that respondents’ occupancy of the premises was by virtue of a lease contract and that infractions were committed which served as basis for terminating the same and for respondents to vacate the premises. Clearly, the complaint avers ultimate facts required for a cause of action in an unlawful detainer case which is within the jurisdiction of the Metropolitan Trial Court. 

In instituting an action for unlawful detainer, Section 2, Rule 70 of the Rules of Court requires the lessor to make a demand upon the lessee to comply with the conditions of the lease and to vacate the premises. The refusal of the lessee violates the owner's right of possession giving rise to an action for unlawful detainer. A lessor is not required to bring first an action for rescission but could ask the Court to do so and simultaneously seek to eject the lessee in a single action for illegal detainer. 

Therefore, since the Complaint involves a case of unlawful detainer, the same is within the jurisdiction of the Metropolitan Trial Court.

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