G.R. Nos. 84154-55 July 28, 1990
FELIX LIM and JOSE LEE, petitioners, vs. HON. COURT OF APPEALS, SPOUSES ROY PO LAM AND JOSEFA ONG PO LAM, respondents.

FACTS

The case originated from an action for annulment of sale filed by petitioner Felix Lim against Legaspi Avenue Hardware Co. (LAHCO) concerning two lots. A notice of lis pendens was annotated on the title. The trial court initially ruled in favor of LAHCO, leading to the cancellation of the lis pendens, and LAHCO subsequently sold the lots to respondent spouses. Lim appealed. The Court of Appeals initially affirmed the trial court but later, upon a second motion for reconsideration from Lim, issued a March 11, 1981 resolution setting aside its prior decision and granting Lim a right of redemption. LAHCO did not successfully appeal this resolution to the Supreme Court.
Meanwhile, petitioner Jose Lee had leased a commercial building on one lot from the respondent spouses. After the lease expired, Lee continued possession, creating a month-to-month implied new lease. The spouses eventually demanded he vacate, and when he refused, they filed an ejectment case. Lee and Lim resisted, with Lim intervening and claiming ownership based on the Court of Appeals’ March 1981 resolution granting redemption rights.

ISSUE

The primary issues were: (1) the validity and effect of the Court of Appeals’ March 11, 1981 resolution granting Lim a right of redemption, and (2) the propriety of Jose Lee’s ejectment from the leased premises.

RULING

The Supreme Court reinstated the Court of Appeals’ March 11, 1981 resolution. It held that the respondent Court of Appeals, in a later decision, erred in nullifying this resolution. Since LAHCO failed to perfect an appeal from that resolution to the Supreme Court, it became final and executory. Therefore, the resolution, which recognized Lim’s redemption right, must stand. The Court further ruled that the pendency of a separate reconveyance suit filed by Lim should have prevented the appellate court from adjudicating issues like the cancellation of the lis pendens and the spouses’ good faith, as these were matters for the trial court in that pending case.
Regarding the ejectment, the Court affirmed Lee’s removal. Upon the expiration of the original lease, his continued stay and payment created an implied month-to-month lease under Article 1670 of the Civil Code. The respondent spouses, as owners, validly terminated this periodic lease with due notice. Upon such notice, Lee’s right to possession ceased, and his continued occupancy constituted unlawful detainer. His defense, which essentially challenged the spouses’ title, was impermissible in an ejectment suit. The Court also found no applicable protective law for the commercial premises. The Municipal Trial Court had jurisdiction to resolve the issue of ownership insofar as it was necessary to determine the issue of possession.