G.R. No. 176413 ; November 25, 2009
SPOUSES DANILO T. SAMONTE and ROSALINDA N. SAMONTE, Petitioners, vs. CENTURY SAVINGS BANK, Respondent.

FACTS

Petitioners obtained a loan from respondent bank, secured by a real estate mortgage over their property. Due to their failure to pay, the mortgage was extrajudicially foreclosed, and the property was sold at public auction to respondent as the highest bidder. After failing to redeem, petitioners entered into a Contract of Lease with respondent, acknowledging respondent’s ownership and agreeing to pay monthly rentals for their continued occupation from January 16, 2001, to January 16, 2002. Respondent subsequently consolidated its ownership, and a new title was issued in its name. Petitioners paid only ₱40,000.00 of the agreed rentals. Upon respondent’s demand to pay arrears and vacate, petitioners refused, prompting an ejectment complaint.
In their defense, petitioners admitted the lease but claimed it was void due to vitiated consent, alleging they were made to believe it was a requirement for loan restructuring. They justified non-payment and refusal to vacate by insisting on the nullity of the foreclosure proceedings, for which they had filed a separate action for nullification. They argued the ejectment case should be suspended pending the resolution of that nullification case.

ISSUE

Whether the ejectment case should be suspended pending the resolution of the separate action for nullity of the foreclosure proceedings.

RULING

No. The Supreme Court denied the petition and affirmed the lower courts’ decisions. The legal logic is anchored on the nature of ejectment proceedings and the established rule that such summary actions for possession cannot be abated or suspended by the mere filing of another action raising the issue of ownership. Ejectment cases, being designed to provide a swift remedy for the restoration of physical possession (possession de facto), proceed independently of questions regarding title. The Court cited numerous precedents where actions like those for injunction, accion publiciana, quieting of title, specific performance, reformation of instrument, and reconveyance did not suspend ejectment suits.
Here, respondent’s better right to possession was firmly established. The lease contract, wherein petitioners explicitly acknowledged respondent’s ownership, created a landlord-tenant relationship. Petitioners’ failure to pay rent constituted a violation justifying ejectment. Their challenge to the foreclosure’s validity, while potentially affecting ultimate ownership, does not undermine the prior and distinct juridical possession derived from the lease agreement. The ejectment court correctly limited itself to the issue of material possession based on the expiration and breach of the lease. The pendency of the nullification case is irrelevant to the summary determination of who has the present right to possess the property. The awards for unpaid rentals and reasonable compensation for continued use were also upheld as correct.