First DivisionAgenda for ____________________Item No. ___

G.R. No. 216568 – Constatino Morallo and Lilia Gil, Petitioners, v. Bagong Tanyag Homeowners Association, Inc., Respondent. x-------------------------------------------------------------------------------------------------------x

Pleadings filed: Petition

Nature: Petition for Review on Certiorari under Rule 45 of the Rules of Court

Facts:

A parcel of land located in Bagong Tanyag, Taguig City (disputed land) was originally titled on 1960 under Original Certificate of Title Nos. 2627, 2486, 2466 and 2627.1 In the year 1982 and 1990,2

respectively, Petitioner Constantino Morallo (Morallo) and Lilia Gil (Gil) occupied, possessed, and built their respective houses in the disputed land.3 Thereafter, or on September 11, 2006, respondent Bagong Tanyag Homeowners Association, Inc. purchased the disputed land, and became the registered owner thereof under TCT Nos. , 5962, 5963, 20959, 20960, 6249, 6174, 6175, and 6177, through a community mortgage program (CMP), wherein qualified occupants of lots will become awardees of the same lots, if possible, or the designated lots under an approved plan.4 The lots were subdivided into smaller lots to be awarded to the rightful member-beneficiaries of respondent.5

Initially, petitioners Morallo and Gil were members of respondent and became the beneficiary of Block 10, Lots 19 and 20, covered by TCT Nos. 5962 and 5963 and Block 17, Lots 34, 36, 33 and 8, covered by TCT Nos. 6175, 6177, 6174 and 6149, respectively.6 Due, allegedly, to the refusal of petitioners to comply with CMP related requirements, they were delisted by respondent from its list of prospective beneficiaries and they also became non-members of the association. The act of delisting was challenged by petitioners before the Home Insurance Guaranty Corporation (HIGC). While the decision of the HIGC favored petitioners, the same was reversed by the Court of Appeals declaring the delisting valid, which validity was sustained by the Supreme Court.7

Meanwhile, respondent merely tolerated petitioners' stay at the subject lots. However, on April 18, 2008, respondent demanded that petitioners vacate the subject lots in order for the former to award the same to the intended awardee. Despite demand, petitioners refused to vacate the subject lots. Respondent filed a complaint with the barangay but no settlement was reached. Hence, it filed a complaint for ejectment against petitioners before the Metropolitan Trial Court of Taguig City, Branch 74 (MeTC).8

Ruling of the MeTC

In an Amended Decision9 dated September 20, 2011, the MeTC found that there was prior referral of the case to the Lupon ng Tagapamayapa of Barangay Bagong Tanyag, Taguig, that Salvacion Poras was duly authorized to represent respondent and that the subject lots are portions of the property described in respondent's TCTs. It also declared the case to be one of unlawful detainer. It observed that petitioners' entry into the subject property was legal at the very onset. But, while petitioners were in possession of the subject lots even way before title thereto passed to respondent, they forfeited whatever rights they had as prospective beneficiaries after they failed to comply with the requirements demanded under the CMP, and were delisted. 10 Their continued occupation of the subject lots was by mere tolerance of respondent. After demand was made for petitioners to vacate the subject

1 Rollo, pp. 65-72.2 Erroneously stated as “1981” in the Answer with Compulsary Counterclaim; id. at 76.3 See Consolidated Memorandum; id. at 97.4 Id. at 27.5 Id. 30.6 Id. at 77-78 & 86-87.7 Id at. 27.8 See MeTC Amended Decision. Penned by Assisting Judge Marilou D. Runes-Tamang; id. 39-48.9 Id. 10 Id. at 46.

property, the tolerance was deemed withdrawn and the former's continued stay on the property made them deforciants unlawfully withholding possession from respondent.11

The MeTC ordered petitioners to vacate the subject lots and to pay P1,000.00 per month from May 2008 until the subject property is vacated, as well as P5,000.00 as attorneys' fees and the costs of suit.12

Aggrieved, petitioners appealed to the Regional Trial Court of Pasig City, Branch 70 (RTC).13

Ruling of the RTC

In a Joint Decision dated February 13, 201314 the RTC dismissed the appeal for utter lack of merit. (NOTE: There is no RTC decision appended to the Petition)

Petitioners filed a motion for reconsideration, which was denied by the RTC.15

Undeterred, petitioners elevated the case to the CA via Petition for Review under Rule 42.

Ruling of the CA

In a Decision16 dated September 8, 2014, the CA affirmed the RTC decision. It ruled that the action filed by respondent was one for unlawful detainer and the complaint contained sufficient allegations for a cause of action. It further declared that inasmuch as petitioners' possession of the subject lots was by mere tolerance, they cannot be considered as builders in good faith.

Dissatisfied, petitioners filed a motion for reconsideration, which the CA, however, denied in a Resolution17 dated January 21, 2015.

ISSUES: 1) Whether respondent has a valid cause of action; 2) whether Salvacion Poras has authority to lodge the complaint for ejectment and 3) whether petitioners are builders in good faith.

RECOMMENDED ACTION: DY PET. NRE. (See Res)

RESOLUTION

After a judicious review of the records, the Court resolves to DENY the instant petition and AFFIRM the Decision dated September 8, 2014 and Resolution dated January 21, 2015 of the Court of Appeals (CA) in CA-G.R. SP No. 131488 for failure to show that the latter committed any reversible error in upholding the ejectment of petitioners Constantino Morallo and Lilia Gil.

As correctly found by the CA, petitioners' possession of the subject lots was by mere tolerance of respondent or its predecessor, which became illegal when respondent demanded on April 16, 2008 that they vacate the same and refused to do so. In Esmaquel v. Coprada,18 the Court ruled that persons whose occupation of a realty is by sheer tolerance of its owners are not possessors in good faith. They are aware that their possession may be terminated any time and they cannot be considered as builders in good faith,19 as in this case.

SO ORDERED.

11 Id. at 47.12 Id. at 47-48.13 Id. at 30.14 Id. at 30 & 129.15 Id. at 49-5016 Id. at 26-35. Penned by Associate Justice Florito S. Macalino with Associate Justices Sesinando E. Villon and Pedro

B. Corales concurring.17 Id. at 52-53.18 Esmaquel v. Coprada, G.R. No. 152423, December 15, 2010, 638 SCRA 428, 442.19 Id.