G.R. No. 185518; April 17, 2013
SPOUSES FELIX CHINGKOE AND ROSITA CHINGKOE, Petitioners, vs. SPOUSES FAUSTINO CHINGKOE AND GLORIA CHINGKOE, Respondents.

FACTS

Respondents Spouses Faustino and Gloria Chingkoe are the registered owners of a property in Quezon City. They claim that in 1990, out of tolerance and permission, they allowed respondent Faustino’s brother, petitioner Felix Chingkoe, and his wife Rosita, to inhabit the property. Due to the intercession of their mother, Tan Po Chu, Faustino agreed to sell the property to Felix on the conditions that the title would be delivered only after full payment of the purchase price and after respondents settled their mortgage obligations with RCBC. Upon further prodding from their mother and at Felix’s request, Faustino agreed to deliver in advance an incomplete draft of a Deed of Absolute Sale, which was not notarized. The parties agreed the document would only be completed after full payment.
On July 24, 2001, respondents sent a demand letter to petitioners to vacate the premises. Petitioners refused, prompting respondents to file a complaint for unlawful detainer with the Metropolitan Trial Court (MTC). In their Answer, petitioners presented a copy of a completed and notarized Deed of Absolute Sale dated October 10, 1994, claiming they had bought the property for ₱3,130,000, which they paid in full in cash on the same day. They alleged that due to respondents’ refusal to surrender the title, they were constrained to file a separate action for specific performance with the Regional Trial Court (RTC) on January 31, 1995.
The MTC dismissed the unlawful detainer complaint, giving weight to the Deed of Sale presented by petitioners and concluding that the issue of possession was intertwined with ownership. The RTC affirmed the MTC’s dismissal. The Court of Appeals (CA) reversed the lower courts, ruling that a mere plea of title cannot defeat an unlawful detainer action and that petitioners’ possession was merely tolerated, which they were no longer entitled to continue. The CA found the deed presented was merely a “document preparatory to an actual sale.” In its analysis, the CA cited and gave credence to the testimony of Tan Po Chu given in the separate specific performance case (Civil Case No. Q-95-22865), where she testified that she witnessed Felix sign a blank deed and that no payment was made for the property.

ISSUE

1. Whether the Court of Appeals committed reversible error in admitting and giving weight to testimony (that of Tan Po Chu) given in a different proceeding (the specific performance case) in resolving the unlawful detainer action.
2. Whether the Court of Appeals committed reversible error in ruling on the validity of a notarized Deed of Sale in a summary ejectment action.

RULING

The Supreme Court DENIED the petition and affirmed the Decision of the Court of Appeals.
1. On the first issue: The Court held that the CA did not err in considering the testimony from the separate specific performance case. While, as a general rule, courts are not authorized to take judicial notice of the contents of records of other cases, this rule admits of exceptions. Citing United States v. Claveria and Occidental Land Transportation Company, Inc. v. Court of Appeals, the Court ruled that in the absence of objection and as a matter of convenience, a court may properly treat all or part of the original record of a former case filed in its archives as read into the record of a pending case when reference is made to it. In this case, the testimony of Tan Po Chu was pertinent to determining the true nature of the Deed of Absolute Sale and the issue of possession. Furthermore, petitioners failed to object to the CA’s consideration of this testimony. Therefore, the CA’s action fell within the recognized exceptions to the general rule.
2. On the second issue: The Court held that the CA did not err in ruling on the validity of the deed within the context of the ejectment case. In an unlawful detainer case, the issue of ownership can be provisionally resolved for the sole purpose of determining who is entitled to possession de facto. The MTC and RTC erred in dismissing the complaint solely based on petitioners’ assertion of ownership via the deed. The CA correctly examined the deed not to make a definitive ruling on ownership (which is for the specific performance case), but to determine if petitioners’ claim of ownership was a valid defense to the ejectment action. Based on the evidence, including the testimony of Tan Po Chu, the CA found the deed was merely a draft or preparatory document and that no sale was consummated. Consequently, petitioners’ possession, which began by mere tolerance, became unlawful upon the termination of that tolerance by the demand to vacate. The summary nature of ejectment proceedings does not prevent the court from looking into the validity of a document presented to justify possession.
The dispositive portion of the Supreme Court’s Decision ordered petitioners to vacate the property and pay respondents reasonable compensation for its use, attorney’s fees, and costs of suit.