G.R. No. 207500. November 14, 2016.
EFREN S. QUESADA, ET AL., Petitioners, vs. BONANZA RESTAURANTS, INC., Respondent.

FACTS

Respondent Bonanza Restaurants, Inc. (Bonanza) is the registered owner of a parcel of land in Quezon City. In 2003, Bonanza, represented by its then-President Miguel Quesada (brother of petitioner Efren Quesada), entered into a Contract of Lease with Efren. The lease was stated to be effective until the land was sold and required Efren to include a 60-day pre-termination clause in any sublease agreements. Efren subsequently entered into subleases with various petitioners. In February 2008, Bonanza’s Board of Directors rescinded the lease contract, alleging that Efren had violated its terms by failing to include the required pre-termination clause in the subleases and by constructing improvements without consent, thereby frustrating the sale of the property. Bonanza sent demand letters to Efren and the sublessees to vacate. Upon their refusal, Bonanza filed an unlawful detainer complaint before the Metropolitan Trial Court (MeTC).
The MeTC dismissed the complaint, ruling that Bonanza’s cause of action was premised on a unilateral rescission which had not been judicially established, making the ejectment suit premature. It held that Bonanza should have first filed an action for rescission before the Regional Trial Court (RTC). On appeal, the RTC reversed the MeTC, finding that the allegations of possession, demand to vacate, and refusal to vacate within one year were sufficient to confer jurisdiction for unlawful detainer. The RTC also declared the lease contract simulated. The Court of Appeals affirmed the RTC’s decision.

ISSUE

Whether the MeTC had jurisdiction over the unlawful detainer case, or whether Bonanza was required to first secure a judicial declaration of rescission from the RTC before filing the ejectment suit.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals. The MeTC validly acquired jurisdiction over the unlawful detainer case. Jurisdiction in ejectment cases is determined by the allegations in the complaint concerning the nature of the defendant’s possession and the timing of the demand and filing. Bonanza’s complaint sufficiently alleged that Efren’s possession, initially lawful by virtue of the lease, became unlawful upon the termination of the lease and his subsequent refusal to vacate after demand. These allegations squarely fell within the scope of an unlawful detainer action.
The Court clarified that a judicial action for rescission is not a prerequisite for filing an ejectment case. A lessor may resort to the summary remedy of ejectment under Article 1673 of the Civil Code when the lease is for a definite period and that period has expired, or when the lease is for an indefinite period and a proper demand to vacate has been made. Here, the lease contract, stating it was effective “until such time that the parcel of land is sold,” created an indefinite period. Bonanza’s act of rescinding the contract and demanding vacatur constituted a termination of the period, rendering Efren’s continued possession without authority. His refusal to leave upon demand made his detainer unlawful. The summary nature of ejectment proceedings is not defeated by the defendant’s mere assertion of a right to possess based on a contract; such defenses do not oust the MeTC’s jurisdiction but are to be resolved within the confines of the summary proceeding. The findings of the RTC and CA that the lease was simulated, while not necessary for the jurisdictional issue, further supported the conclusion that Efren’s possession had no legal basis.