G.R. No.

192893 June 5, 2013 Sometime in 1985, CEDA offered for sale to MERALCO, its electric
distribution system, consisting of transformers and accessories, poles and
MANILA ELECTRIC COMPANY, Petitioner, hardware, wires, service drops, and customer meters and all rights and
vs. privileges necessary for providing electrical service in Cavite. This was
HEIRS OF SPOUSES DIONISIO DELOY and PRAXEDES embodied in a memorandum of agreement (MOA),7dated June 28, 1985,
MARTONITO, represented by POLICARPIO DELOY,Respondents. signed by the parties.

DECISION On the same date, June 28, 1985, after the approval of the MOA, CEDA and
MERALCO executed the Deed of Absolute Sale. Thereafter, MERALCO
MENDOZA, J.: occupied the subject land.

Before the Court is a petition for review on certiorari under Rule 45 of the On October 11, 1985, MERALCO, through its Assistant Vice President and
Rules of Court seeking the reversal of the November 9, 2009 Decision' and Head of the Legal Department, Atty. L.D. Torres (Atty. Torres), wrote a
the July 5, 2010 Resolution2 of the Court of Appeals (CA), in CA-G.R. SP letter8 to Dionisio requesting the latter’s permission for the continued use of
No. 96998. The challenged decision set aside the May 4, 2006 the subject land as a substation site.
Resolution3 and the September 27, 2006 Order4 of the Regional Trial Court,
Trece Martires City, Branch 23 (RTC), which affirmed the dismissal of an The parties were not able to reach any agreement. In an internal
unlawful detainer case by the Municipal Trial Court in Cities of Trece memorandum,9 dated December 16, 1985, from L.G. De La Paz of the Trece
Martires City (MTCC). Martires Substation of MERALCO to Atty. G.R. Gonzales and Atty. Torres
of the Realty Division of MERALCO, it was stated that the death of
The Facts Dionisio, the lack of agreement yet among the heirs, and a request that a
member of the Deloy family be employed by MERALCO were some of the
reasons.
On July 8, 2003, Domingo Deloy, Maria Deloy-Masicap, Zosimo Deloy,
Mario Deloy, Silveria Deloy-Mabiling, Norma Deloy, Milagros
Panganiban, Lino Deloy, Cornelio Deloy, Maricel Deloy, Adelina Banta, Meanwhile, respondents claimed that they had no immediate use for the
Rogelio Deloy, Evelyn Deloy, Edgardo Deloy, Cynthia Deloy, Donnabel subject land and that they were preoccupied with the judicial proceedings to
Deloy, Glenda Deloy, Arnel Deloy, Ronnio Deloy, Isagani L. Reyes, and rectify errors involving the reconstituted title of the Trece Martires property,
Policarpio Deloy (respondents), all heirs of Spouses Dionisio Deloy which included the subject land. On November 22, 2001, the proceedings
(Dionisio) and Praxedes Martonito-Deloy, represented by Policarpio Deloy, were terminated and the decision became final.10 Not long after,respondents
instituted the Complaint for Unlawful Detainer5 against Manila Electric offered to sell the subject land to MERALCO, but their offer was rejected.
Company (MERALCO) before the MTCC.
For said reason, in their letter,11 dated May 19, 2013, respondents demanded
Respondents are the owners, by way of succession, of a parcel of land that MERALCO vacate the subject land on or before June 15, 2003. Despite
consisting of 8,550 square meters located in Trece Martires City (Trece the written demand, MERALCO did not move out of the subject land. Thus,
Martires property). On November 12, 1965, Dionisio, respondents’ on July 8, 2003, respondents were constrained to file the complaint for
predecessor-in-interest, donated a 680-square meter portion (subject land) unlawful detainer.
of the 8,550 square meter property to the Communications and Electricity
Development Authority (CEDA) for the latter to provide cheap and Traversing respondents’ complaint, MERALCO countered that CEDA, as
affordable electric supply to the province of Cavite. A deed of donation6 was the owner of the subject land by virtue of the deed of donation executed by
executed to reflect and formalize the transfer. Dionisio, lawfully sold to it all rights necessary for the operation of the
electric service in Cavite by way of a deed of sale on June 28, 1985.

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MERALCO stressed that the condition of providing affordable electricity to TMCV-0055005, are hereby SET ASIDE and a new one rendered partially
the people of Cavite,12 imposed in the deed of donation between Dionisio granting Petitioners’ Complaint for Unlawful Detainer against Respondent.
and CEDA, was still being observed and complied with. Thus, MERALCO Accordingly, Respondent is ordered to vacate the subject property and to
claimed that, being CEDA’s successor-in-interest, it had legal justification pay Petitioners the amount of ₱50,0000.00 monthly rental counting from
to occupy the subject land. June 16, 2003, up to the time Respondent shall have fully vacated the subject
property, and ₱25,000.00 as attorney’s fees. Costs against Respondent.
On September 15, 2005, the MTCC rendered the decision13 dismissing
respondents’ complaint for unlawful detainer against MERALCO. SO ORDERED.14

The MTCC ruled that it had no jurisdiction over the case because it would In partially granting the appeal, the CA explained that an ejectment case,
require an interpretation of the deed of donation making it one not capable based on the allegation of possession by tolerance, would fall under the
of pecuniary estimation. Nevertheless, it opined that MERALCO was category of unlawful detainer. Unlawful detainer involved the person’s
entitled to the possession of the subject land. It was of the view that it would withholding from another of the possession of real property to which the
only be when the deed of donation would be revoked or the deed of sale latter was entitled, after the expiration or termination of the former’s right
nullified that MERALCO’s possession of the subject land would become to hold possession under a contract, either express or implied. Where the
unlawful. plaintiff allowed the defendant to use his/her property by tolerance without
any contract, the defendant was necessarily bound by an implied promise
Aggrieved, respondents appealed the MTCC ruling to the RTC. In its May that he/she would vacate on demand, failing which, an action for unlawful
4, 2006 Resolution, the RTC sustained the MTCC decision. detainer would lie.

The RTC pointed out that the only issue in an unlawful detainer case was As to the issue of possession, the CA stated that by seeking Dionisio’s
possession. It affirmed the MTCC ruling that the latter had no jurisdiction permission to continuously occupy the subject land, MERALCO expressly
to interpret contracts involving the sale of the subject land to MERALCO, acknowledged his paramount right of possession. MERALCO, thru its
after the latter raised the issue of ownership of the subject land. According representative, Atty. Torres, would not have asked permission from Dionisio
to the RTC, the interpretation of the deed of sale and the deed of donation if it had an unconditional or superior right to possess the subject land. The
was the main, not merely incidental, issue. CA considered the fact that this recognition of Dionisio’s right over the
subject land was amplified by another letter, dated December 16, 1985,15 by
Respondents moved for reconsideration but their motion was denied by the one L.G. De la Paz to Atty. Torres, expressly declaring Dionisio as the
RTC in its September 27, 2006 Order. owner of the subject land. MERALCO never disputed the declarations
contained in these letters. Neither did it claim that the same was made
through palpable mistake. Indeed, Meralco even marked these letters as
Not satisfied with the adverse ruling, respondents elevated the case before
documentary exhibits. Pursuant to Section 26, Rule 130 of the Rules of
the CA via a petition for review under Rule 42 of the Rules of Court.
Evidence, these admissions and/or declarations may be admitted against
Meralco.
In its November 9, 2001 Decision, the CA set aside the RTC ruling.
MERALCO moved for reconsideration but its motion was denied by the CA
The fallo of the decision reads: in its July 5, 2010 Resolution.

WHEREFORE, the instant Petition is GRANTED. The assailed Resolution, Hence, this petition for review.
dated May 4, 2006, and Order, dated September 27, 2006, both of the
Regional Trial Court of Trece Martires City, Branch 23, in Civil Case No.
ISSUES

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I MERALCO avers that it validly acquired title to the subject land by virtue
of the deed of sale executed by CEDA in its favor on June 28, 1985. As a
WHETHER OR NOT THE COMPLAINT STATES A CAUSE OF consequence, MERALCO contends that extrinsic or extraneous evidence,
ACTION FOR UNLAWFUL DETAINER. such as the letters, dated October 11, 1985 and December 6, 1985, cannot
contradict the terms of the deed of sale between CEDA and MERALCO
II pursuant to Section 9, Rule 13017 of the Rules of Court.

WHETHER OR NOT EVIDENCE ALIUNDE, SUCH AS THE LETTERS The Court’s Ruling
DATED 11 OCTOBER 1985 OF PETITIONER’S ASSISTANT VICE
PRESIDENT AND HEAD OF LEGAL DEPARTMENT, L.D. TORRES The petition lacks merit.
AND INTERNAL MEMORANDUM DATED 6 DECEMBER 1985 OF
PETITIONER’S L.G. DELA PAZ WHICH PURPORTEDLY Unlawful detainer is an action to recover possession of real property from
RECOGNIZED RESPONDENTS’ OWNERSHIP OF THE PROPERTY one who illegally withholds possession after the expiration or termination of
CAN PREVAIL OVER THE DEED OF ABSOLUTE SALE. his right to hold possession under any contract, express or implied. The
possession of the defendant in unlawful detainer is originally legal but
III became illegal due to the expiration or termination of the right to
possess.18 The only issue to be resolved in an unlawful detainer case is
WHETHER OR NOT TITLE TO THE PROPERTY DONATED TO CEDA physical or material possession of the property involved, independent of any
WAS VALIDLY TRANSFERRED TO THE PETITIONER. claim of ownership by any of the parties involved.19

IV An ejectment case, based on the allegation of possession by tolerance, falls

under the category of unlawful detainer. Where the plaintiff allows the
defendant to use his/her property by tolerance without any contract, the
WHETHER OR NOT THE SALE OF THE PROPERTY TO THE
defendant is necessarily bound by an implied promise that he/she will vacate
PETITIONER VIOLATED OR REVOKED THE DONATION TO CEDA.
on demand, failing which, an action for unlawful detainer will lie.20
V
Jurisdiction of the MTCC
WHETHER OR NOT THE COMPLAINT WAS BARRED BY
MERALCO contends that respondents’ complaint failed to make out a case
PRESCRIPTION AND LACHES.16
for unlawful detainer but, rather, one incapable of pecuniary estimation,
properly cognizable by the RTC and not the MTCC. It stresses the
Simply put, the vital issues for the Court’s consideration are: (1) whether an allegations in the complaint involve a prior determination on the issue of
action for unlawful detainer is the proper remedy in this case; and (2) if it is, ownership before the issue of possession can be validly resolved.
who has a better right of physical possession of the disputed property.
This contention fails to persuade.
In presenting its case before the Court, MERALCO argues that respondents’
complaint before the MTCC failed to state a cause of action for unlawful
When the issue of ownership is raised in an ejectment case, the first level
detainer, but for one incapable of pecuniary estimation, because the issue of
courts are not ipso facto divested of its jurisdiction. Section 33 (2) of Batas
physical possession is inextricably linked with the proper interpretation of
Pambansa (B.P.) Blg. 129, as amended by Republic Act (R.A.) No.
the deed of donation executed between Dionisio and CEDA. Thus, the
7691,21provides:
MTCC was without jurisdiction to hear and decide the case. Further,

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Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts, MERALCO posits that extrinsic evidence, such as the letter request, dated
and Municipal Circuit Trial Courts in Civil Cases. – Metropolitan Trial October 11, 1985, and the Internal Memorandum, dated December 6, 1985,
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall cannot contradict the terms of the deed of sale between CEDA and
exercise: MERALCO pursuant to Section 9, Rule 13022 of the Rules of Court.

xxxx The Court has combed the records and is not convinced.

(2) Exclusive original jurisdiction over cases of forcible entry and unlawful It is undisputed that on October 11, 1985 or four (4) months after the
detainer: Provided, That when, in such cases, the defendant raises the approval of the MOA and the corresponding Deed of Absolute Sale,
question of ownership in his pleadings and the question of possession cannot MERALCO, through its Assistant Vice President and Head of the Legal
be resolved without deciding the issue of ownership, the issue of ownership Department, Atty. Torres , sent a letter to Dionisio seeking his permission
shall be resolved only to determine the issue of possession. [Underscoring for the continued use of the subject land. The letter reads:
supplied.]
Mr. Dionisio Deloy
xxxx
Trece Martires City 2724
In this regard, Section 16, Rule 70 of the Rules of Court allows the first level
courts, in ejectment cases, to provisionally determine the issue of ownership Province of Cavite
for the sole purpose of resolving the issue of physical possession.
Dear Mr. Deloy:
Sec. 16. Resolving defense of ownership.–When the defendant raises the
defense of ownership in his pleadings and the question of possession cannot This has reference to the Deed of Donation (Inter-vivos) executed on
be resolved without deciding the issue of ownership, the issue of ownership November 12, 1965 between Communications and Electricity Development
shall be resolved only to determine the issue of possession. Authority (CEDA) and Dionisio D(e)loy for a 680-square meter of land used
as a substation site adjacent to A.B. Memorial Hospital x x x.
Accordingly, it is unquestionably clear that the first level courts are clothed
with the power to preliminarily resolve questions on the ownership of real In compliance with the franchise Nationalization program of the National
property, if necessary, to arrive at the proper and complete determination of Government, we wish to inform you that Meralco had taken over the electric
the question on physical possession or possession de facto. Thus, as operations in the province of Cavite being served by CEDA.
correctly ruled by the CA, the MTCC should have taken cognizance of the
complaint as it was well within its jurisdiction to do so. Moreover,
In view of this recent development, may we respectfully request you to
considering that B.P. Blg. 129, as amended, has distinctly defined and
please allow Manila Electric Company (Meralco) to continue the use of the
granted the MTCC with jurisdiction, it is the trial court’s duty and obligation
above-mentioned portion of land as a substation site, subject to the terms
to exercise the same when properly invoked.
and conditions which we may mutually agree upon.
Right of Possession
In the interest of public service, we shall highly appreciate your kind
cooperation on this matter and awaiting your reply.
As earlier stated, on the issue of possession, the CA opined that by seeking
Dionisio’s permission to occupy the subject land, MERALCO expressly
Very truly yours,
acknowledged his paramount right of possession.

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[Signed] It was unfortunate that when we went to see him on December 6, 1985, to
finalize the Contract of Lease, the man was already dead. His body laid at
L. D. TORRES state in his residence. He died on December 5, 1985. As it was not proper to
discuss things with the family, we asked the wife when the family would be
Assistant Vice-President available. She suggested that we should come back on December 21, 1985.
On that day, all the members of the family would be free to confer with us.
& Head, Legal Department23
There are some problems that may come up with the death of Mr. Deloy.
These are:
[Underscoring supplied]
1. the settlement of his estate among his heirs
Relative thereto, L.G. De La Paz of the Trece Martires Substation of
MERALCO sent the December 16, 1985 Internal Memorandum, addressed
to Atty. G.R. Gonzales and Atty. Torres, informing them of some obstacles 2. the desire to have more members of the family to be employed in Meralco
in reaching a lease agreement with the Deloys. The Internal Memorandum
reads: 3. the rent free use of the substation may not push through

ATTY. G.R. GONZALES 4. the proper signatories in the contract of lease to be drawn

ATTY. L.D. TORRES TRECE MARTIRES SUBTATION We do hope whatever the problem may be, we will be able to work it out.

REALTY SERVICES For your information.

DECEMBER 16, 1985 [Signed]

This refers to the proposed contract of lease with Mr. Dionisio Deloy, co- L.G. DE LA PAZ
owner of the lot wherein the Trece Martires Substation is located.
x x x x.
Mr. Deloy had donated the use of 680-sq. m. portion of his co-owned land
for CEDA’s substation in Trece Martires in 1966. Copy of the Donation is Evidently, by these two documents, MERALCO acknowledged that the
enclosed. On October 11, 1985, the company informed him through its letter owners of the subject land were the Deloys. It is clear as daylight. The first
of its intention of continuing with the use of the property as a result of its letter was written barely four (4) months after the deed of sale was
acquisition of CEDA’s franchise. He agreed to the request and proposed accomplished. As observed by the CA, MERALCO never disputed the
rental would be free provided one of his sons/grandsons would be employed declarations contained in these letters which were even marked as its own
by Meralco. Governor Remulla had favorably recommended Lino Deloy, exhibits. Pursuant to Section 26, Rule 130 of the Rules of Evidence, these
one of his grandsons, for a position in the company. A son, Mr. Policarpio admissions and/or declarations are admissible against MERALCO.
Deloy, former CEDA employee, had passed Meralco’s entrance
examination. According to PAD, his application papers were being SEC. 26. Admissions of a party – The act, declaration, or omission of a party
processed by the Branch Services Department. as to a relevant fact may be given in evidence against him.

In Heirs of Bernardo Ulep v. Ducat,24 it was written, thus:

Parol Evidence Rule

x x x Being an admission against interest, the documents are the best On a final note, the Court must stress that the ruling in this case is limited
evidence which affords the greatest certainty of the facts in dispute. The only to the determination as to who between the parties has a better right to
rationale for the rule is based on the presumption that no man would declare possession. This adjudication is not a final determination on the issue of
anything against himself unless such declaration was true. Thus, it is fair to ownership and, thus, will not bar any party from filing an action raising the
presume that the declaration corresponds with the truth, and it is his fault if matter of ownership.
it does not.
WHEREFORE, the petition is hereby DENIED.
Guided by the foregoing rules and jurisprudence, the Court holds that the
letter and the internal memorandum presented, offered and properly SO ORDERED.
admitted as part of the evidence on record by MERALCO itself, constitute
an admission against its own interest. Hence, MERALCO should
appropriately be bound by the contents of the documents.1âwphi1

Nevertheless, in this petition, MERALCO insists that extrinsic evidence,

such as the two documents, even if these were their own, cannot contradict
the terms of the deed of sale between CEDA and MERALCO pursuant to
Section 9, Rule 13025 of the Rules of Court.

The Court has read the MOA and the Deed of Absolute Sale but found
nothing that clearly stated that the subject land was included therein. What
were sold, transferred and conveyed were "its electric distribution facilities,
service drops, and customers' electric meters except those owned by the
VENDOR'S customers, x x x, and all the rights and privileges necessary for
the operation of the electric service x x x."26 No mention was made of any
land. Rights and privileges could only refer to franchises, permits and
authorizations necessary for the operation of the electric service. The land
on which the substation was erected was not included, otherwise, it would
have been so stated in the two documents. Otherwise, also, MERALCO
would not have written Dionisio to ask permission for the continued use of
the subject land.

At any rate, it is fundamental that a certificate of title serves as evidence of

an indefeasible and incontrovertible title to the property in favor of the
person whose name appears therein. It bears to emphasize that the titleholder
is entitled to all the attributes of ownership of the property, including
possession.1âwphi1 Thus, the Court must uphold the age-old rule that the
person who has a Torrens title over a land is entitled to its possession.27 In
Pascual v. Coronel,28 the Court reiterated the rule that a certificate of title
has a superior probative value as against that of an unregistered deed of sale
in ejectment cases.

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