G.R. No. 112734 July 7, 1994
SPOUSES NAZARIO P. PENAS, JR. represented by ELPIDIO R. VIERNES, ATTORNEY-IN-FACT, petitioners, vs. COURT OF APPEALS and LUPO CALAYCAY, respondents.

FACTS

The subject of the controversy is the premises at 24-B Scout Santiago Street, Quezon City. It was the object of a written month-to-month lease contract executed by the late Nazario Penas in favor of private respondent Lupo Calaycay on June 26, 1964. After the deaths of Nazario Penas, Sr. and later Concepcion P. Penas, their heirs, including petitioner Nazario Penas, Jr., executed extrajudicial settlements of their estates. The monthly rental had been gradually increased over time. In a letter dated January 18, 1990, petitioner-spouses, through counsel, notified private respondent that effective March 1990, they were terminating the month-to-month lease contract and demanded he vacate on or before February 28, 1990. The same letter gave private respondent the option to continue occupying the premises provided he execute a new one-year lease contract at an increased monthly rental of P2,500.00 (later reduced to P2,000.00). Private respondent failed to abide by the demand but continued staying on the leased premises. Effective March 1990, he deposited the monthly rentals at the old rate with the PNB in his name in trust for the petitioners. Petitioners did not withdraw these deposits. On August 10, 1992, petitioners sent another letter demanding that private respondent vacate and pay back rentals of P2,000.00 per month from March 1990. After barangay conciliation, petitioners filed a complaint for unlawful detainer on September 25, 1992. The Metropolitan Trial Court dismissed the complaint for lack of jurisdiction, finding it was filed more than one year after private respondent began unlawfully occupying the premises. The Regional Trial Court and the Court of Appeals upheld the dismissal, ruling that the proper remedy was an accion publiciana in the RTC since more than one year had elapsed from the initial demand.

ISSUE

Whether or not the Metropolitan Trial Court had jurisdiction over the complaint for unlawful detainer.

RULING

Yes, the Metropolitan Trial Court had jurisdiction. The Supreme Court set aside the decision of the Court of Appeals. The one-year period for filing an unlawful detainer complaint under Rule 70 of the Rules of Court should be counted from the last letter of demand to vacate. The first demand letter dated January 18, 1990, which gave private respondent the option to either vacate or agree to a new lease at an increased rental, was not the demand contemplated by the Rules. When a lessee elects to stay after such a notice, he assumes the new rental and cannot be ejected until he defaults and a necessary demand is made. Private respondent, by electing to remain after the January 18, 1990 letter, assumed the new rental rate. The proper demand was made on August 10, 1992, and the complaint was filed on September 25, 1992, which was within one year from that last demand. Therefore, the Metropolitan Trial Court had jurisdiction. The Supreme Court ordered private respondent to immediately vacate the premises, pay back rentals of P2,000.00 per month from March 1990 until he vacates, and pay attorney’s fees.