G.R. No. 171858

THIRD DIVISION

REMINGTON INDUSTRIAL G.R. No. 171858

SALES CORPORATION,

Petitioner, Present:

Ynares-Santiago, J. (Chairperson),

- versus - Austria-Martinez,

Callejo, Sr., and

Chico-Nazario, JJ.

CHINESE YOUNG MEN’S

CHRISTIAN ASSOCIATION OF

THE PHIL. ISLANDS, doing Promulgated:

business under the name MANILA

DOWNTOWN YMCA,

Respondent. January 22, 2007

x ---------------------------------------------------------------------------------------- x

DECISION

YNARES-SANTIAGO, J.:

This Petition for Review on Certiorari[1] assails the October 17, 2005 Decision[2] of the Court of Appeals in CA-G.R. SP No. 88599, which set aside the Decision[3] of the Regional Trial Court of Manila (RTC-Manila), Branch 25 and reinstated the June 20, 2003 Decision[4] of the Metropolitan Trial Court of Manila (MeTC-Manila), Branch 17, as well as its March 7, 2006 Resolution[5] denying petitioner’s Motion for Reconsideration.

The antecedent facts show that petitioner Remington Industrial Sales Corporation (RISC) leased Units 964 and 966 on the ground floor and Unit 963 on the second floor of a building owned by respondent Manila Downtown YMCA in Binondo, Manila. Petitioner knocked down the partitions between the ground floor units and used the combined areas as its office, hardware store, and display shop for steel products. The combined units also served as a passageway to Unit 963, which in turn was utilized as petitioner’s staff room.

Because of a disagreement, petitioner sued respondent for the fixing of the period of the lease over the second floor unit.[6] Thereafter, respondent filed an action to evict[7] petitioner from said unit. The two cases were later consolidated before MeTC-Manila, Branch 26.

Meanwhile, on June 23, 1997, petitioner filed a Petition for Consignation of Rentals for the ground floor units at another branch of MeTC-Manila[8] because respondent allegedly refused to receive its rent payments without just cause.[9] However, during the hearing of the consignation case, petitioner filed a formal surrender of the two ground floor units effective on July 1, 1998,[10] to which respondent manifested a “No Objection to the Turn Over or Surrender of the Leased Premises.”[11] On July 9, 1998, after petitioner delivered two checks covering the rents due the ground floor units, the trial court issued an Order[12] declaring the consignation case closed.

Then, on August 11, 1998, the MeTC-Manila which heard the consolidated cases for the fixing of the lease period and ejectment rendered a Decision[13] dismissing the latter and extending the period of lease over unit 963 for three years. Immediately subsequent thereto, petitioner filed a Motion to Constitute Passageway,[14] alleging that Unit 963 does not have a direct access to the road except by passing through the vacated ground floor units.

On October 29, 1998, the trial court issued an Order directing a commissioner to conduct an ocular inspection of the subject building. After the commissioner had submitted a Report,[15] but without resolving the propriety of a passageway, the MeTC-Manila forwarded the consolidated case on appeal to RTC-Manila, Branch 30, which rendered judgment granting petitioner a longer extension period of five years and ordering respondent to provide a two-meter passageway between Units 964 and 966. Respondent filed an appeal with the Court of Appeals.[16]

On September 19, 2003, the appellate court held that the lower courts had authority to fix an extension of the lease period. It found that although the lease contract had expired, petitioner’s continued occupation of Unit 963 resulted to a new lease on a month-to-month basis which subsisted for over a year; thus, while respondent had the right to seek its termination, petitioner was entitled to a judicial lengthening of its period based on equity. Nonetheless, the appellate court ordered petitioner to vacate the subject premises as the continuation of the lease was no longer tenable after the lapse of six years since the parties’ formal contract expired. It also noted that since the petitioner has already transferred to its own building, there is no more reason to continue the lease. Subsequently, the Court of Appeals issued a Resolution[17] rendering petitioner’s Motion for Reconsideration moot as it has vacated the subject premises.[18]

Meanwhile, respondent filed two separate actions for ejectment of petitioner from Units 964 and 966 – the former before MeTC-Manila, Branch 20[19] and the latter before MeTC-Manila, Branch 17.[20] Respondent alleged that petitioner did not actually surrender the ground floor units on July 1, 1998; instead it padlocked the doors thereto, refused to surrender the keys, and failed to pay rent despite demand. Both branches of MeTC-Manila separately ordered petitioner to vacate the premises and pay reasonable rent and attorney’s fees to respondent.

On appeal, the RTC-Manila, Branch 25 reversed the decision of MeTC-Manila, Branch 17, holding that:

Indeed, Remington’s act of padlocking Units 964 and 966 is an act of self-preservation. Since it continued to lease Unit 963 at the second floor after the surrender of the ground floor units, it required YMCA to provide it with a passageway to and from the second floor. The needed passageway was confirmed by the court-appointed commissioner in the consolidated cases for fixing of lease period and unlawful detainer. As the lessor, it is the obligation of YMCA to make Units (sic) 963 tenantable by providing [a] passageway to Remington. But it did not. Remington, therefore, had no choice but to keep the keys at the ground floor units only for the purpose of going to the leased unit at the second floor. The fact of the existence of another lease unit at the second floor is the important fact that the lower court failed to consider when it said that “the continued padlocking of the subject premises constitutes an unlawful withholding of plaintiff’s property” (p. 4, MTC decision). At any rate, Remington had filed in the consignation case with Branch 24 of the MTC a motion formally surrendering Units 964 and 966 at the ground floor, with no objection on the part of YMCA. Remington, therefore, already surrendered the possession of Units 964 and 966 to YMCA. In fact, Branch 24 of the MTC had put an end to the issue of possession of Units 964 and 966 by considering the petition for consignation closed. Since none of the parties questioned that order, it is now final. Consequently, this ejectment case involving Unit 966 at the ground floor is an indirect attack on the final decision in the consignation case, a re-adjudication of similar issues involving the ground floor units that have been decided with finality.

x x x x

Consequently, YMCA’s claim for back rentals from July 1, 1998 is also baseless.

WHEREFORE, the decision of the lower court dated June 20, 2003 is hereby reversed and set aside. Consequently, the complaint for unlawful detainer involving Unit 966 at the ground floor of Manila Downtown YMCA Building, Benavidez St., Binondo, Manila is also dismissed for lack of merit.

SO ORDERED.[21]

Respondent filed a motion for reconsideration but was denied, hence it filed a petition for review before the Court of Appeals which reversed and set aside the October 11, 2004 Decision of the RTC-Manila and reinstated the Decision of MeTC-Manila. The Court of Appeals held that:

x x x Despite the RTC’s finding, however, the uncontroverted fact remains that RISC failed to surrender possession of the disputed units despite having manifested its willingness to do so under the Formal Surrender of Leased Premises. There is no escaping the fact that RISC continued to exercise control over the subject premises, which it admittedly used as a means of ingress and egress in going to Unit 963. It has been invariably held that actual possession consists in the manifestation of acts of dominion over property of such nature as a party would naturally exercise over his own, as when petitioner, in this particular case, is physically in occupation of the property (Republic vs. David, 436 SCRA 577 [2004], citing Republic vs. Court of Appeals, 335 SCRA 693 [2000]), Reyes vs. Court of Appeals, 315 SCRA 626 [1999]). For one, RISC’s claim of self-preservation is antithecal to disclaiming possession of the controversial premises.

Appropriately, considering that petitioner was effectively deprived of possession of the subject units through respondent’s act of padlocking the subject premises, petitioner had a cause of action to file a case for ejectment against RISC. x x x[22]

Petitioner’s Motion for Reconsideration was denied, hence this Petition for Review on Certiorari, raising the following issues:

1. Whether or not RISC’s formal surrender on July 1, 1998 of the ground floor units, coupled with YMCA’s subsequent acts, constitutes effective surrender of those units;

2. Whether or not the use by RISC’s staffs, who held office at the second floor, of the key of the ground floor door, their only passageway to the street, is antithetical to RISC[‘s] surrender of the ground floor units; and

3. Whether or not respondent YMCA is guilty of forum shopping.[23]

In a contract of lease, one of the parties binds himself to give to another the enjoyment or use of a thing for a price certain, and for a period which may be definite or indefinite.[24] Upon its termination, the lessee shall return the thing leased and the lessor shall resume possession thereto.[25]

Under the law, possession is acquired by the material occupation of a thing or the exercise of a right, or by the fact that it is subject to the action of our will, or by the proper acts and legal formalities established for acquiring such right.[26] In short, possession can be either actual or merely constructive.[27]

Actual possession consists in the manifestation of acts of dominion over property of such a nature as a party would naturally exercise over his own – as when respondent himself is physically in occupation of the property, or even when another person who recognizes the former’s rights as owner is in occupancy.[28] Constructive possession on the other hand, may be had through succession, donation, execution of public instruments, or the possession by a sheriff by virtue of a court order.[29]

In the instant case, petitioner had effectively surrendered possession of Units 964 and 966 to respondent. It must be recalled that petitioner filed a “Formal Surrender of Leased Premises” effective July 1, 1998 at MeTC-Manila, Branch 24 to which respondent manifested a “No Objection to the Turn Over or Surrender of the Leased Premises at #954 [sic] and 966 Benavidez St., Binondo, Manila.” On even date and in compliance with its stated undertaking, petitioner actually emptied and vacated the leased premises.

Respondent maintains that the padlocking of the main door of the ground floor units and the continued use thereof as petitioner’s passageway to and from the second floor unit virtually denied it of its right to possess Units 964 and 966.

We find otherwise. Petitioner’s “Formal Surrender of Leased Premises” on July 1, 1998 showed its intention to relinquish in favor of respondent its possession over Units 964 and 966. The filing of the same at MeTC-Manila, Branch 24 constitutes petitioner’s constructive delivery of the said premises effective July 1, 1998. Thereafter, petitioner actually emptied and vacated the premises. Therefore, from July 1, 1998, respondent could have taken legal and actual possession of Units 964 and 966. Respondent could have easily removed the padlock and occupied the premises in view of petitioner’s unconditional surrender of the premises.

On the other hand, petitioner’s request for a passageway was necessary to its adequate use of Unit 963, considering that it has no direct access to the road except through the ground floor units. However, respondent did not immediately start the construction of a passageway. It was therefore understandable, as found by the RTC-Manila, that petitioner kept the key to the door at the ground floor units because it was its only means of access to the road and to its rented unit at the second floor.

In view of the foregoing, the RTC-Manila properly dismissed respondent’s Complaint for Unlawful Detainer and claim for back rentals of Units 964 and 966.

On the issue of forum-shopping, we find that respondent is not guilty of forum shopping when it filed the ejectment cases despite the closure of the consignation case involving the same premises.

Forum-shopping is an act of a party against whom an adverse judgment or order has been rendered in one forum of seeking and possibly getting a favorable opinion in another forum, other than by appeal or special civil action for certiorari. It may also be the institution of two or more actions or proceedings grounded on the same cause on the supposition that one or the other court would make a favorable disposition. For it to exist, there should be (a) identity of parties, or at least such parties as would represent the same interest in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) identity of the two preceding particulars such that any judgment rendered in the other action will, regardless of which party is successful, amount to res judicata in the action under consideration.[30] Where the elements of litis pendentia are not present or where a final judgment in one case will not amount to res judicata in the other, there is no forum-shopping.[31]

In the instant case, although the parties and the subject premises in the instant case are the same with those in Civil Case No. 155897-CV, the causes of action in both cases are separate and distinct. The present case involves ejectment of petitioner from the leased premises, while the latter dealt with consignation of rents without any judicial ruling regarding the matter of possession of Units 964 and 966. Hence, respondent is not guilty of forum-shopping.

WHEREFORE, the instant petition is GRANTED. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 88599 are SET ASIDE. The Decision of the Regional Trial Court of Manila, Branch 25 in Civil Case No. 03-107655 dismissing the unlawful detainer case for lack of merit is hereby REINSTATED and AFFIRMED.

SO ORDERED.

CONSUELO YNARES-SANTIAGO

Associate Justice

WE CONCUR:

MA. ALICIA AUSTRIA-MARTINEZ ROMEO J. CALLEJO, SR.

Associate Justice Associate Justice

MINITA V. CHICO-NAZARIO

Associate Justice

ATTESTATION

I attest that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

CONSUELO YNARES-SANTIAGO

Associate Justice

Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO

Chief Justice

[2] Id. at 34-41; penned by Associate Justice Conrado M. Vasquez, Jr. with Associate Justices Juan Q. Enriquez, Jr. and Vicente Q. Roxas, concurring.

[3] Id. at 102-110; penned by Presiding Judge Aida Rangel-Roque.

[4] Id. at 78-81; penned by Presiding Judge Germano Francisco D. Legaspi.

[12] Id. at 53; penned by Judge Aida Rangel Roque of Metropolitan Trial Court of Manila, Branch 24.

[13] Id. at 57-60; penned by Presiding Judge Reinato G. Quilala of Metropolitan Trial Court of Manila, Branch 26.

[15] Id. at 61-62:

During the ocular inspection, it was learned up to the present, Remington Industrial Sales Corporation is still in possession of the keys to the two (2) rooms located at the ground floor of Downtown YMCA Bldg., known and designated as No. 964 and 966 Benavides St., Binondo, Manila. The representative of the YMCA alleged that they will continue to bill Remington the monthly rental for the said premises from July 1, 1998 until the latter surrender the possession of the said leased premises. The Court as well as the defendant were furnished of the statement of account dated February 4, 1999 prepared by YMCA. On the other hand defendant thru its representative averred that the keys of the two (2) subject rooms were not surrendered or turned-over because YMCA did not provide an adequate passageway to and from the leased premises at No. 963 second floor of the YMCA building anywhere from its ground floor area. Mr. Raymond Dacia, the representative of Remington further manifested that they are using the leased premises at the second floor as extension of their office and there are documents kept inside the said premises, so he advised us not to proceed at the 2^nd floor of the building. As it now appears that the second floor leased premises is without any definite entrance from the ground floor area, lessee Remington is asking that a 2-meter wide passageway between No. 964 and No. 966 starting from the main entrance up to the end of the wall going to the second floor be constituted as the designated passageway going up the second leased premises.

[27] Republic of the Philippines v. David, G.R. No. 155634, August 16, 2004, 436 SCRA 577, 587.

[29] Edgardo L. Paras, Civil Code of the Philippines Annotated, 417 (15^th Edition, Volume II, 2002).

[30] Santos v. Commission on Elections, 447 Phil. 760, 770-771 (2003).

[31] Bangko Silangan Development Bank v. Court of Appeals, 412 Phil. 755, 771 (2001).