G.R. No. 191251; September 7, 2011
EDNA LOPEZ DELICANO, EDUARDO ALBERTO LOPEZ, MARIO DIEZ CRUZ, HOWARD E. MENESES, and CORAZON E. MENESES, Petitioners, vs. PECHATEN CORPORATION, Respondent.

FACTS

Respondent Pechaten Corporation is the registered owner of a parcel of land in Sampaloc, Manila. In June 1993, it entered into a two-year lease contract with several individuals, who later waived their rights in favor of Virgilio Meneses. After the lease expired on 30 June 1995, Virgilio Meneses ignored offers to renew or purchase the property and stopped paying rent. On 6 October 1999, respondent sent a demand letter to vacate and pay accrued rent, and subsequently filed an unlawful detainer case against him. The Metropolitan Trial Court (MeTC) ruled in favor of respondent, ordering Virgilio Meneses to vacate and pay compensation. This was affirmed by the Regional Trial Court (RTC), Branch 37, Manila.
Meanwhile, the City of Manila filed an expropriation case over the same property (Civil Case No. 04-110675) before RTC Branch 11, which issued a Writ of Possession in favor of the City and later an Order of Expropriation. Upon Virgilio Meneses’s death, he was substituted by his heirs (the petitioners). Petitioners filed a motion for reconsideration in the unlawful detainer case before RTC Branch 37, arguing it was rendered moot by the Writ of Possession in the expropriation case and that the City had turned over the property to them. On 27 August 2008, RTC Branch 37 partially reconsidered its decision, setting aside the order to vacate as moot but maintaining the award for compensation and attorney’s fees.
Respondent filed a petition for review with the Court of Appeals. While the case was pending, the Court of Appeals-Special Sixth Division, in the related expropriation case (City of Manila v. Pechaten Corporation), reversed the RTC Branch 11’s order and dismissed the complaint for eminent domain, finding the expropriation was not for public use but for the sole benefit of Virgilio Meneses’s family. This decision became final and executory on 14 April 2009. Respondent presented this as a supervening event. The Court of Appeals, in an Amended Decision dated 13 November 2009, granted respondent’s motion for reconsideration, dissolved the writ of possession, and effectively reinstated the unlawful detainer judgment. Petitioners elevated the case to the Supreme Court.

ISSUE

Whether petitioners are still entitled to retain possession over the subject property despite the dismissal of the expropriation case.

RULING

No. The Supreme Court denied the petition and affirmed the Court of Appeals’ Amended Decision. The Court held that pursuant to Section 11, Rule 67 of the Rules of Civil Procedure, when an appellate court determines that the plaintiff has no right of expropriation, judgment shall be rendered ordering the restoration of possession to the defendant (the property owner). Since the Court of Appeals-Special Sixth Division’s decision in the expropriation case, which dismissed the complaint for lack of public use and became final and executory, constituted a supervening event, it is only proper that respondent Pechaten Corporation be restored to its rightful possession of the property. Accordingly, the Supreme Court reinstated the Decision dated 30 May 2008 of the Manila RTC, Branch 37, which affirmed the MeTC judgment in the unlawful detainer case.