G.R. No. 170575 ; June 8, 2011
Spouses Manuel and Florentina Del Rosario, Petitioners, vs. Gerry Roxas Foundation, Inc., Respondent.

FACTS

Petitioners Spouses Manuel and Florentina Del Rosario are the registered owners of a parcel of land in Roxas City covered by Transfer Certificate of Title No. T-18397. Sometime in 1991, respondent Gerry Roxas Foundation, Inc. took possession and occupancy of the land by virtue of a Memorandum of Agreement with the City of Roxas, as lessee. In February and March 2003, petitioners served notices upon the respondent to vacate the premises. The respondent refused, claiming a legal right to continue possession.
On July 7, 2003, petitioners filed a Complaint for Unlawful Detainer against the respondent before the Municipal Trial Court in Cities (MTCC) of Roxas City. The complaint alleged that the respondent took possession of the property without the petitioners’ consent and authority, used it for commercial purposes, and that petitioners had allowed such use only by tolerance. Petitioners demanded payment of rentals and to vacate, which the respondent refused, thereby unlawfully withholding possession.
In its Answer, the respondent admitted taking possession in 1991 but denied using the property for commercial purposes, claiming it was used for civic, non-profit endeavors. It specifically denied the allegations in paragraph 7 of the Complaint, asserting that its possession was lawful by virtue of Memorandums of Agreement with the City of Roxas, whom it claimed was the true and lawful owner. As an affirmative defense, the respondent alleged that petitioners had no cause of action because the property had been sold by the petitioners to the City of Roxas through a Deed of Absolute Sale dated February 19, 1981. While the title remained in the petitioners’ names, ownership had allegedly transferred to the City upon delivery, and the respondent, as lessee of the City, had the legal right to possession.
The respondent filed a Motion to Resolve its Defenses on Forum Shopping and Lack of Cause of Action. The MTCC, in an Order dated November 24, 2003, ruled that the petitioners had no cause of action against the respondent. The MTCC found that the respondent was the lessee of the City of Roxas, there was no previous contractual relationship between the petitioners and the respondent, and the respondent’s right to possession derived from its lease with the City. The MTCC noted the respondent’s defense of a prior sale to the City and that petitioners had not directly denied the existence or authenticity of the Deed of Absolute Sale.

ISSUE

Whether the MTCC correctly dismissed the Complaint for Unlawful Detainer on the ground that the petitioners had no cause of action against the respondent.

RULING

Yes. The Supreme Court affirmed the dismissal of the Complaint for Unlawful Detainer. The allegations in the complaint and the reliefs prayed for determine the nature of the action and which court has jurisdiction. An unlawful detainer action is a summary proceeding for the recovery of possession of real property based on the defendant’s unlawful withholding of possession after the expiration or termination of his right to hold under any contract, express or implied. The plaintiff must prove that he has a better right to the physical possession of the property.
In this case, the respondent, in its Answer, specifically denied the material allegations of the complaint and set up the affirmative defense that its possession was lawful as a lessee of the City of Roxas, the alleged true owner by virtue of a prior Deed of Absolute Sale. By asserting a right to possession based on a different source of title (the lease from the City), the respondent effectively placed in issue the question of ownership. The MTCC correctly held that the petitioners had no cause of action for unlawful detainer against the respondent. The respondent’s possession was not derived from the petitioners by tolerance or any contract, express or implied, between them. Its possession was based on a lease agreement with the City of Roxas. Therefore, there was no unlawful withholding of possession from the petitioners upon which an unlawful detainer action could be founded. The MTCC’s order of dismissal was proper.