G.R. No. 133564 ; July 10, 2007
SERGIO BARBOSA and JOVITA BARBOSA, Petitioners, vs. PILAR HERNANDEZ, LETICIA HUGHES, FELIX VILLANUEVA and NATIVIDAD SANGALANG, Respondents.

FACTS

Respondent Pilar Hernandez purchased a 100-square-meter lot in Batangas City from Felix Villanueva through his attorney-in-fact, Leticia Hughes, on August 11, 1983. Hernandez, who was working overseas, discovered in November 1987 that petitioners, the spouses Sergio and Jovita Barbosa, were occupying the lot and operating a motor repair shop on it. Petitioners had been lessees on Villanueva’s land since 1962 and were relocated to this specific lot in 1979 by subdivision developer Natividad Sangalang to give way to road construction. On November 16, 1983, Hughes sold petitioners a separate 200-square-meter portion of the land, which did not include the lot Hernandez had already purchased. Hernandez demanded that petitioners vacate her property, and upon their refusal, filed a complaint for recovery of possession and damages in the Regional Trial Court (RTC) of Batangas City on February 14, 1988.
In their defense, petitioners claimed they had a prior verbal promise from the respondents that they would have the preferential right to purchase the lot they occupied. They filed a third-party complaint against Hughes, Villanueva, and Sangalang, seeking damages and the annulment of the sale to Hernandez, with a prayer for reconveyance. The RTC dismissed the third-party complaint, ruling that no definite agreement was proven, and ordered petitioners to vacate the lot, remove their improvements, and pay monthly compensation to Hernandez. The Court of Appeals affirmed the RTC decision, prompting petitioners to elevate the case to the Supreme Court via certiorari.

ISSUE

The primary issues were (1) whether the RTC had jurisdiction over Hernandez’s complaint for recovery of possession, and (2) whether petitioners’ claim of a verbal promise to sell the lot was enforceable.

RULING

The Supreme Court denied the petition and affirmed the lower courts’ decisions. On jurisdiction, the Court held that the nature of an action is determined solely by the allegations in the complaint. Hernandez’s amended complaint alleged ownership and sought recovery of possession, constituting an accion publiciana, not an unlawful detainer case. An unlawful detainer suit requires allegations of unlawful withholding after the expiration of a contract and must be filed within one year. Hernandez’s complaint did not contain these specific allegations; it was filed as a plenary action for recovery of possession, which was within the RTC’s jurisdiction at the time of filing. The Court emphasized that jurisdiction is conferred by law based on the facts alleged in the complaint, not by evidence presented during trial.
Regarding the alleged promise to sell, the Court ruled it was unenforceable under the Statute of Frauds, which requires contracts for the sale of real property or an interest therein to be in writing to be enforceable. Petitioners failed to present any written evidence of such an agreement. Furthermore, the Court found no factual basis for the claim, as the evidence showed petitioners were aware the lot was for sale but did not act to purchase it, and the subsequent sale to them of an adjacent 200-square-meter parcel indicated the disputed lot was not included. The claim for reimbursement for improvements was also denied, as petitioners were builders in bad faith, having occupied the property without right after Hernandez’s purchase.