G.R. No. 126711; March 14, 2003
CARLOS SUPER DRUG CORPORATION, petitioner, vs. HON. COURT OF APPEALS and BANK OF THE PHILIPPINE ISLANDS, respondents.

FACTS

Petitioner Carlos Super Drug Corporation (CSDC) leased two units from respondent Bank of the Philippine Islands (BPI). Following a dispute over unpaid rentals, BPI filed an unlawful detainer case (first case). The parties entered into a judicially approved compromise agreement on May 8, 1989, stipulating a new one-year lease term effective November 16, 1988, with a monthly rental of P26,116.39, and requiring the execution of a new contract. CSDC subsequently paid only the rental for one unit, claiming an oral understanding for relinquishment of the other. BPI moved for execution of the compromise judgment in the first case, seeking CSDC’s ejectment. The Metropolitan Trial Court (MeTC) Branch 35 denied the motion, ruling that ejectment was not a stipulated remedy and granting it would modify the final judgment.
BPI then filed a second unlawful detainer complaint (second case) before MeTC Branch 38, alleging expiration of the lease term and non-payment of rentals. CSDC contended that Branch 38 had no jurisdiction, as BPI was essentially seeking to enforce the compromise agreement from the first case, a matter within the exclusive purview of Branch 35. The MeTC Branch 38 dismissed the case but ordered CSDC to pay rentals. The Regional Trial Court affirmed the dismissal on the jurisdictional ground. The Court of Appeals reversed, upholding Branch 38’s jurisdiction and ordering CSDC to vacate and pay back rentals.

ISSUE

Whether the Court of Appeals erred in upholding the jurisdiction of MeTC Branch 38 over the second unlawful detainer case filed by BPI.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The second unlawful detainer case was a distinct and proper action. The first case concluded with a final compromise judgment. When BPI moved for execution to eject CSDC, Branch 35 correctly denied it because ejectment was not a term of their agreement, and granting it would unlawfully modify a final judgment. BPI’s remedy was not to seek modification but to file a new ejectment suit based on a new cause of action.
The cause of action in the second case was not merely to enforce the compromise agreement but was founded on the expiration of the one-year lease term stipulated therein on November 16, 1989, and CSDC’s subsequent failure to pay rentals and vacate the premises. An unlawful detainer action accrues upon the expiration of the right to hold possession. Since the lease under the compromise agreement had expired and CSDC continued in possession, BPI had a valid cause for a fresh ejectment suit. Jurisdiction over unlawful detainer is conferred by law (B.P. Blg. 129, as amended) upon the MeTC, and Branch 38 properly exercised it. CSDC’s claim of an oral modification for relinquishment of one unit was unsubstantiated and did not negate its obligation under the written compromise.