G.R. No. 194880 ; June 20, 2012
REPUBLIC OF THE PHILIPPINES and NATIONAL POWER CORPORATION, represented by the PRIVATIZATION MANAGEMENT OFFICE, Petitioners, vs. SUNVAR REALTY DEVELOPMENT CORPORATION, Respondent.

FACTS

Petitioners Republic of the Philippines and National Power Corporation (NPC) are co-owners of a parcel of land in Makati. They leased this property to the Technology Resource Center Foundation, Inc. (TRCFI) for 25 years, from 1978 to 2002, with a right to sublease. TRCFI subleased the majority of the property to respondent Sunvar Realty Development Corporation under several agreements, all set to expire on 31 December 2002, coinciding with the main lease’s end. The sublease agreements contained a renewal clause exercisable at Sunvar’s exclusive option. In 2002, Sunvar expressed its desire to renew. However, both the Republic and NPC formally notified TRCFI’s successor, the Philippine Development Alternatives Foundation (PDAF), of their decision not to renew the main lease contract. PDAF relayed this decision to Sunvar. The main lease and all subleases expired on 31 December 2002.
Despite the expiration, Sunvar continued to occupy the property. On 22 February 2008, petitioners, through the Office of the Solicitor General, sent Sunvar a demand to vacate. Sunvar refused. On 23 July 2009, petitioners filed a Complaint for unlawful detainer with the Metropolitan Trial Court (MeTC). The MeTC dismissed the case, a ruling affirmed by the Regional Trial Court (RTC), which held that the one-year period to file an unlawful detainer action had prescribed. The RTC reasoned that the cause of action accrued upon the lease’s expiration on 31 December 2002, and the complaint filed in 2009 was far beyond the one-year reglementary period.

ISSUE

Whether the filing of the Complaint for unlawful detainer was within the one-year prescriptive period from the date of last demand, thereby vesting the MeTC with jurisdiction over the case.

RULING

Yes. The Supreme Court reversed the RTC and reinstated the MeTC’s jurisdiction. The Court clarified the accrual of the cause of action in unlawful detainer. A detainer action prescribes one year from the date of last demand to vacate. The one-year period does not run from the mere expiration of the contract, but from the date the lessor makes a demand to vacate and the lessee refuses. In this case, the leases expired on 31 December 2002, but petitioners tolerated Sunvar’s possession thereafter. The cause of action accrued only upon the unequivocal act of demand and subsequent refusal. Petitioners’ first written demand was made on 22 February 2008. Sunvar’s refusal to comply gave rise to the cause of action at that point. The Complaint filed on 23 July 2009 was well within one year from the February 2008 demand. Therefore, the action was timely filed, and the MeTC properly acquired jurisdiction over the unlawful detainer case. The RTC erred in computing the period from the lease’s expiration instead of from the date of demand.