G.R. No. 193075 , June 20, 2016
Emmanuel Reyes, Sr. and Mutya M. Reyes, Petitioners, vs. Heirs of Deogracias Forlales, namely: Napoleon Forlales, Lita Helen Forlales-Fradejas, Jaime Forlales, Jr., Julius Forlales Fortuna, Horace Forlales, Galahad Forlales, Jr., Independence Forlales-Fetalvero, Meliton Forlales, Jr., Milagros V. Forlales and Mercedes Forlales-Bautista, Respondents.

FACTS

The case originated from an unlawful detainer suit filed by the respondents (Heirs of Deogracias Forlales) against the petitioners (Emmanuel Reyes, Sr. and Mutya M. Reyes) to vacate a portion of Lot No. 1408 in Odiongan, Romblon, which formed part of the estate adjudicated to Mercedes Forlales Bautista. The petitioners had been occupying the disputed portion since at least 1978. In an affidavit dated September 18, 1988, the petitioners acknowledged that their stay was with the permission of Independencia Forlales Fetalvero, the estate administrator, and was subject to the owner’s terms. On May 28, 1993, Independencia wrote to the petitioners demanding they vacate within six months. The respondents filed an unlawful detainer complaint (Civil Case No. OD-229) on August 28, 1997, which was dismissed on September 29, 1997, for being filed one year beyond the May 28, 1993 demand; this decision became final on October 15, 1997.
On May 16, 2005, the respondents filed a complaint at the barangay level. On May 27, 2005, Independencia sent another formal demand letter to vacate. After the barangay complaint remained unresolved, the respondents filed a new ejectment complaint before the Municipal Circuit Trial Court (MCTC) on October 27, 2005. The respondents alleged that the petitioners, despite the demands, had begun constructing a two-storey house in December 2004. The petitioners claimed ownership through previous owners Alejandra Forlales Fabella and Linda Fontamillas and argued that the action had prescribed and was barred by res judicata due to the prior dismissed case.
The MCTC ruled for the respondents, ordering the petitioners to vacate, remove improvements, and pay rental value from May 27, 2005. The Regional Trial Court (RTC) affirmed, holding that the petitioners’ possession from May 28, 1993, to May 27, 2005, was by mere tolerance, so the one-year prescriptive period for unlawful detainer started from the last demand (May 27, 2005). The Court of Appeals (CA) affirmed the lower courts’ decisions.

ISSUE

1. Whether the one-year prescriptive period for filing the unlawful detainer suit should be counted from the first demand (May 28, 1993) or the last demand (May 27, 2005).
2. Whether the principle of res judicata bars the present ejectment suit due to the prior dismissal of Civil Case No. OD-229.
3. Whether the petitioners are occupying a portion of Lot No. 1408 owned by the respondents.

RULING

1. On the prescriptive period: The Supreme Court ruled that the one-year period for filing the unlawful detainer case should be counted from the last demand to vacate on May 27, 2005. The petitioners’ possession from the first demand in 1993 until the last demand in 2005 was considered possession by mere tolerance. In such cases, the one-year prescriptive period is counted from the date of the last demand, as the possession becomes illegal only upon the withdrawal of that tolerance. The Court rejected the petitioners’ argument that this would allow plaintiffs to extend the period indefinitely by sending repeated demand letters, noting that tolerance must be positively proved and cannot be presumed. The respondents’ filing of the case on October 27, 2005, was within one year from the May 27, 2005 demand, thus timely.
2. On res judicata: The Court held that res judicata does not apply. The prior ejectment case (Civil Case No. OD-229) was dismissed because it was filed beyond the one-year prescriptive period from the 1993 demand, which is a dismissal based on a technicality (lack of jurisdiction) and not on the merits. For res judicata to apply, a prior judgment must be on the merits. Here, the dismissal was due to prescription, which is a jurisdictional matter, not an adjudication on the substantive rights of the parties.
3. On the identity of the property: The Court affirmed the lower courts’ factual finding that the petitioners are occupying a portion of Lot No. 1408 owned by the respondents. The petitioners’ own affidavit (September 18, 1988) and note to Mercedes acknowledged their temporary stay on the property owned by Mercedes. The Court emphasized that factual findings of the lower courts, when supported by evidence, are binding and not subject to review in a petition for review on certiorari under Rule 45, which is limited to questions of law.
The Supreme Court denied the petition and affirmed the CA decision, upholding the orders for the petitioners to vacate the property, remove improvements, and pay rental value from May 27, 2005.