G.R. No. 97637 April 10, 1992; G.R. Nos. 98700-01 April 10, 1992
WILMON AUTO SUPPLY CORPORATION, ILOILO MULTI PARTS SUPPLY CORP., VIRGILIO ANG, SOUTHERN SALES CORP. and CHANG LIANG, JR., petitioners, vs. HON. COURT OF APPEALS and STAR GROUP RESOURCES AND DEVELOPMENT, INC., respondents. ( G.R. No. 97637 )

RAMON QUE, SOUTHERN SALES CORP. and HENRY TAN, petitioners, vs. HON. RICARDO M. ILARDE, Judge, RTC of Iloilo (Br. 26), and STAR GROUP RESOURCES AND DEVELOPMENT, INC., respondents. (G.R. Nos. 98700-01)

FACTS

Petitioners were lessees of a commercial building and bodegas in Iloilo City owned by several co-owners. Their lease contracts had a fixed term from September 1, 1987 to August 30, 1989, and contained a “reservation of rights” clause stating the lessor’s right to sell the property, provided the lessee is informed of the plan to sell. After the leases expired on August 30, 1989, the co-owners sold the property to respondent Star Group Resources and Development, Inc. on September 18, 1989. On November 22, 1989, Star Group filed separate unlawful detainer actions against the lessees in the Municipal Trial Court in Cities (MTCC) of Iloilo City. The lessees, in their answers, argued that their ejectment was improper because they were not accorded a right of preemption, the buyer was not required to honor the leases, and they were denied an option to renew. On December 1, 1989, some of the lessees filed a complaint in the Regional Trial Court (RTC) against Star Group and the co-owner-vendors, praying for the annulment of the sale, enforcement of their right of preemption/redemption, conveyance of title, and damages. In the MTCC ejectment cases, the lessees moved for dismissal or suspension based on litis pendentia due to the pending RTC case, but the MTCC denied their motions. Some lessees filed petitions for certiorari with the Supreme Court, which were referred to the RTC. The RTC (Judge Ilarde) dismissed these petitions, ruling that the MTCC had jurisdiction and the pendency of the RTC case did not warrant suspension. Other lessees filed a motion in the RTC (Branch 28) for a preliminary injunction to stop the MTCC proceedings, which was denied. They then filed a petition for certiorari with the Court of Appeals, which was dismissed. The lessees appealed to the Supreme Court.

ISSUE

The principal issue is whether an action for unlawful detainer filed in the Municipal Trial Court against a lessee, based on the expiration of the lease, should be abated or suspended by an action filed in the Regional Trial Court by the lessee claiming a right of preemption to purchase the premises and seeking to enforce that right.

RULING

The Supreme Court ruled that the unlawful detainer actions should not be abated or suspended. The Court affirmed the decisions of the Court of Appeals and the Regional Trial Court, dismissing the petitions. The Court held that the issue in the unlawful detainer cases is the de facto possession of the property, which is separate from the issue of ownership or the enforcement of a right of preemption raised in the RTC case. The expiration of the lease contracts gave the lessor, and subsequently the buyer Star Group, a clear right to possess the property. The pendency of an action involving ownership or annulment of sale in the RTC does not stay the proceedings in an ejectment case. The Municipal Trial Court has jurisdiction over the ejectment cases and, under the law (Batas Pambansa Blg. 129), even has the competence to resolve the issue of ownership but only for the purpose of determining the issue of possession. The claimed right of preemption, even if valid, does not affect the lessor’s right to eject the lessee upon termination of the lease; the right of preemption pertains to a privilege to purchase, not a right to continue possession. Therefore, the ejectment cases must proceed independently.