REGINA P. DIZON, AMPARO D. BARTOLOME, FIDELINA D.

BLAZA, ESTER
ABAD DIZON and JOSEPH ANTHONY DIZON, RAYMUND A. DIZON,
GERARD A. DIZON, and JOSE A. DIZON, JR., petitioners,
vs.
COURT OF APPEALS and OVERLAND EXPRESS LINES, INC., respondents.
G.R. No. 124741 January 28, 1999
REGINA P. DIZON, AMPARO D. BARTOLOME, FIDELINA D. BALZA, ESTER
ABAD DIZON and JOSEPH ANTHONY DIZON, RAYMUND A. DIZON,
GERARD A. DIZON, and Jose A. DIZON, JR., petitioners,
vs.
COURT OF APPEALS, HON. MAXIMIANO C. ASUNCION, and OVERLAND
EXPRESS LINES, INC.,respondents.

MARTINEZ, J.:
Two consolidated petitions were filed before us seeking to set aside and annul the
decisions and resolutions of respondent Court of Appeals. What seemed to be a simple
ejectment suit was juxtaposed with procedural intricacies which finally found its way to
this Court.
G.R. No. 122544:
On May 23, 1974, private respondent Overland Express Lines, Inc. (lessee) entered into a
Contract of Lease with Option to Buy with petitioners 1 (lessors) involving a 1,755.80
square meter parcel of land situated at corner MacArthur Highway and South "H" Street,
Diliman, Quezon City. The term of the lease was for one (1) year commencing from May
16, 1974 up to May 15, 1975. During this period, private respondent was granted an
option to purchase for the amount of P3,000.00 per square meter. Thereafter, the lease
shall be on a per month basis with a monthly rental of P3,000.00.
For failure of private respondent to pay the increased rental of P8,000.00 per month
effective June 1976, petitioners filed an action for ejectment (Civil Case No. VIII-29155)
on November 10, 1976 before the then City Court (now Metropolitan Trial Court) of
Quezon City, Branch VIII. On November 22, 1982, the City Court rendered
judgment 2 ordering private respondent to vacate the leased premises and to pay the sum
of P624,000.00 representing rentals in arrears and/or as damages in the form of
reasonable compensation for the use and occupation of the premises during the period of
illegal detainer from June 1976 to November 1982 at the monthly rental of P8,000.00,
less payments made, plus 12% interest per annum from November 18, 1976, the date of
filing of the complaint, until fully paid, the sum of P8,000.00 a month starting December
1982, until private respondent fully vacates the premises, and to pay P20,000.00 as and
by way of attorney's fees.

Private respondent filed a certiorari petition praying for the issuance of a restraining
order enjoining the enforcement of said judgment and dismissal of the case for lack of
jurisdiction of the City Court.
On September 26, 1984, the then Intermidiate Appellate Court 3 (now Court of Appeals)
rendered a decision 4 stating that:
. . ., the alleged question of whether petitioner was granted an extension of the option to
buy the property; whether such option, if any, extended the lease or whether petitioner
actually paid the alleged P300,000.00 to Fidela Dizon, as representative of private
respondents in consideration of the option and, whether petitioner thereafter offered to
pay the balance of the supposed purchase price, are all merely incidental and do not
remove the unlawful detainer case from the jurisdiction or respondent court. In
consonance with the ruling in the case of Teodoro, Jr. vs. Mirasol (supra), the above
matters may be raised and decided in the unlawful detainer suit as, to rule otherwise,
would be a violation of the principle prohibiting multiplicity of suits. (Original Records,
pp. 38-39).
The motion for reconsideration was denied. On review, this Court dismissed the petition
in a resolution dated June 19, 1985 and likewise denied private respondent's subsequent
motion for reconsideration in a resolution dated September 9, 1985. 5
On October 7, 1985, private respondent filed before the Regional Trial Court (RTC) of
Quezon City (Civil Case No. Q-45541) an action for Specific Performance and Fixing of
Period for Obligation with prayer for the issuance of a restraining order pending hearing
on the prayer for a writ of preliminary injunction. It sought to compel the execution of a
deed of sale pursuant to the option to purchase and the receipt of the partial payment, and
to fix the period to pay the balance. In an Order dated October 25, 1985, the trial court
denied the issuance of a writ of preliminary injunction on the ground that the decision of
the then City Court for the ejectment of the private respondent, having been affirmed by
the then Intermediate Appellate Court and the Supreme Court, has become final and
executory.
Unable to secure an injunction, private respondent also filed before the RTC of Quezon
City, Branch 102 (Civil Case No. Q-46487) on November 15, 1985 a complaint for
Annulment of and Relief from Judgment with injunction and damages. In its
decision 6 dated May 12, 1986, the trial court dismissed the complaint for annulment on
the ground of res judicata, and the writ of preliminary injunction previously issued was
dissolved. It also ordered private respondent to pay P3,000.00 as attorney's fees. As a
consequence of private respondent's motion for reconsideration, the preliminary
injunction was reinstated, thereby restraining the execution of the City Court's judgment
on the ejectment case.
The two cases were the after consolidated before the RTC of Quezon City, Branch 77. On
April 28, 1989, a decision 7 was rendered dismissing private respondent's complaint in
Civil Case No. Q-45541 (specific performance case) and denying its motion for

reconsideration in Civil Case No. 46487 (annulment of the ejectment case). The motion
for reconsideration of said decision was likewise denied.
On appeal, 8 respondent Court of Appeals rendered a decision 9 upholding the jurisdiction
of the City Court of Quezon City in the ejectment case. It also concluded that there was a
perfected contract of sale between the parties on the leased premises and that pursuant to
the option to buy agreement, private respondent had acquired the rights of a vendee in a
contract of sale. It opined that the payment by private respondent of P300,000.00 on June
20, 1975 as partial payment for the leased property, which petitioners accepted (through
Alice A. Dizon) and for which an official receipt was issued, was the operative act that
gave rise to a perfected contract of sale, and that for failure of petitioners to deny receipt
thereof, private respondent can therefore assume that Alice A. Dizon, acting as agent of
petitioners, was authorized by them to receive the money in their behalf. The Court of
Appeals went further by stating that in fact, what was entered into was a "conditional
contract of sale" wherein ownership over the leased property shall not pass to the private
respondent until it has fully paid the purchase price. Since private respondent did not
consign to the court the balance of the purchase price and continued to occupy the subject
premises, it had the obligation to pay the amount of P1,700.00 in monthly rentals until
full payment of the purchase price. The dispositive portion of said decision reads:
WHEREFORE, the appealed decision in Case No. 46387 is AFFIRMED. The appealed
decision in Case No. 45541 is, on the other hand, ANNULLED and SET ASIDE. The
defendants-appellees are ordered to execute the deed of absolute sale of the property in
question, free from any lien or encumbrance whatsoever, in favor of the plaintiffappellant, and to deliver to the latter the said deed of sale, as well as the owner's duplicate
of the certificate of title to said property upon payment of the balance of the purchase
price by the plaintiff-appellant. The plaintiff-appellant is ordered to pay P1,700.00 per
month from June 1976, plus 6% interest per annum, until payment of the balance of the
purchase price, as previously agreed upon by the parties.
SO ORDERED.
Upon denial of the motion for partil reconsideration (Civil Case No. Q-45541) by
respondent Court of Appeals, 10petitioners elevated the case via petition
for certiorari questioning the authority of Alice A. Dizon as agent of petitioners in
receiving private respondent's partial payment amounting to P300,000.00 pursuant to the
Contract of Lease with Option to Buy. Petitioner also assail the propriety of private
respondent's exercise of the option when it tendered the said amount on June 20, 1975
which purportedly resulted in a perfected contract of sale.
G.R. No. 124741:
Petitioners filed with respondent Court of Appeals a motion to remand the records of
Civil Case No. 38-29155 (ejectment case) to the Metropolitan Trial Court (MTC), then
City Court of Quezon City, Branch 38, for execution of the judgment 11 dated November

22, 1982 which was granted in a resolution dated June 29, 1992. Private respondent filed
a motion to reconsider said resolution which was denied.
Aggrieved, private respondent filed a petition for certiorari, prohibition with preliminary
injunction and/or restraining order with this Court (G.R. Nos. 106750-51) which was
dismissed in a resolution dated September 16, 1992 on the ground that the same was a
refiled case previously dismissed for lack of merit. On November 26, 1992, entry of
judgment was issued by this Court.
On July 14, 1993, petitioners filed an urgent ex-parte motion for execution of the
decision in Civil Case No. 38-29155 with the MTC of Quezon City, Branch 38. On
September 13, 1993, the trial court ordered the issuance of a third alias writ of execution.
In denying private respondent's motion for reconsideration, it ordered the immediate
implementation of the third writ of execution without delay.
On December 22, 1993, private respondent filed with the Regional Trial Court (RTC) of
Quezon City, Branch 104 a petition for certiorari and prohibition with preliminary
injunction/restraining order (SP. PROC. No. 93-18722) challenging the enforceability and
validity of the MTC judgment as well as the order for its execution.
On January 11, 1994, RTC of Quezon City, Branch 104 issued an
order 12 granting the issuance of a writ of preliminary injunction upon private
respondent's' posting of an injunction bond of P50,000.00.
Assailing the aforequoted order after denial of their motion for partial reconsideration,
petitioners filed a petition 13for certiorari and prohibition with a prayer for a temporary
restraining order and/or preliminary injunction with the Court of Appeals. In its
decision, 14 the Court of Appeals dismissed the petition and ruled that:
The avowed purpose of this petition is to enjoin the public respondent from restraining
the ejectment of the private respondent. To grant the petition would be to allow the
ejectment of the private respondent. We cannot do that now in view of the decision of this
Court in CA-G.R. CV Nos. 25153-54. Petitioners' alleged right to eject private
respondent has been demonstrated to be without basis in the said civil case. The
petitioners have been shown, after all, to have no right to eject private respondents.
WHEREFORE, the petition is DENIED due course and is accordingly DISMISSED.
SO ORDERED. 15
Petitioners' motion for reconsideration was denied in a resolution 16 by the Court of
Appeals stating that:
This court in its decision in CA-G.R. CV Nos. 25153-54 declared that the plaintiffappellant (private respondent herein) acquired the rights of a vendee in a contract of sale,
in effect, recognizing the right of the private respondent to possess the subject premises.

Considering said decision, we should not allow ejectment; to do so would disturb

the status quo of the parties since the petitioners are not in possession of the subject
property. It would be unfair and unjust to deprive the private respondent of its possession
of the subject property after its rights have been established in a subsequent ruling.
WHEREFORE, the motion for reconsideration is DENIED for lack of merit.
SO ORDERED. 17
Hence, this instant petition.
We find both petitions impressed with merit.
First. Petitioners have established a right to evict private respondent from the subject
premises for non-payment of rentals. The term of the Contract of Lease with Option to
Buy was for a period of one (1) year (May 16, 1974 to May 15, 1975) during which the
private respondent was given an option to purchase said property at P3,000.00 square
meter. After the expiration thereof, the lease was for P3,000.00 per month.
Admittedly, no definite period beyond the one-year term of lease was agreed upon by
petitioners and private respondent. However, since the rent was paid on a monthly basis,
the period of lease is considered to be from month to month in accordance with Article
1687 of the New Civil Code. 18 Where the rentals are paid monthly, the lease, even if
verbal may be deemed to be on a monthly basis, expiring at the end of every month
pursuant to Article 1687, in relation to Article 1673 of the Civil Code. 19 In such case, a
demand to vacate is not even necessary for judicial action after the expiration of every
month. 20
When private respondent failed to pay the increased rental of P8,000.00 per month in
June 1976, the petitioners had a cause of action to institute an ejectment suit against the
former with the then City Court. In this regard, the City Court (now MTC) had exclusive
jurisdiction over the ejectment suit. The filing by private respondent of a suit with the
Regional Trial Court for specific performance to enforce the option to purchase did not
divest the then City Court of its jurisdiction to take cognizance over the ejectment case.
Of note is the fact that the decision of the City Court was affirmed by both the
Intermediate Appellate Court and this Court.
Second. Having failed to exercise the option within the stipulated one-year period, private
respondent cannot enforce its option to purchase anymore. Moreover, even
assuming arguendo that the right to exercise the option still subsists at the time private
respondent tendered the amount on June 20, 1975, the suit for specific performance to
enforce the option to purchase was filed only on October 7, 1985 or more than ten (10)
years after accrual of the cause of action as provided under Article 1144 of the New Civil
Code. 21

In this case, there was a contract of lease for one (1) year with option to purchase. The
contract of lease expired without the private respondent, as lessee, purchasing the
property but remained in possession thereof. Hence, there was an implicit renewal of the
contract of lease on a monthly basis. The other terms of the original contract of lease
which are revived in the implied new lease under Article 1670 of the New Civil
Code 22 are only those terms which are germane to the lessee's right of continued
enjoyment of the property leased. 23 Therefore, an implied new lease does not ipso
facto carry with it any implied revival of private respondent's option to purchase (as
lessee thereof) the leased premises. The provision entitling the lessee the option to
purchase the leased premises is not deemed incorporated in the impliedly renewed
contract because it is alien to the possession of the lessee. Private respondent's right to
exercise the option to purchase expired with the termination of the original contract of
lease for one year. The rationale of this Court is that:
This is a reasonable construction of the provision, which is based on the presumption that
when the lessor allows the lessee to continue enjoying possession of the property for
fifteen days after the expiration of the contract he is willing that such enjoyment shall be
for the entire period corresponding to the rent which is customarily paid in this case up
to the end of the month because the rent was paid monthly. Necessarily, if the presumed
will of the parties refers to the enjoyment of possession the presumption covers the other
terms of the contract related to such possession, such as the amount of rental, the date
when it must be paid, the care of the property, the responsibility for repairs, etc. But no
such presumption may be indulged in with respect to special agreements which by nature
are foreign to the right of occupancy or enjoyment inherent in a contract of lease. 24
Third. There was no perfected contract of sale between petitioners and private
respondent. Private respondent argued that it delivered the check of P300,000.00 to Alice
A. Dizon who acted as agent of petitioners pursuant to the supposed authority given by
petitioner Fidela Dizon, the payee thereof. Private respondent further contended that
petitioners' filing of the ejectment case against it based on the contract of lease with
option to buy holds petitioners in estoppel to question the authority of petitioner Fidela
Dizon. It insisted that the payment of P300,000.00 as partial payment of the purchase
price constituted a valid exercise of the option to buy.
Under Article 1475 of the New Civil Code, "the contract of sale is perfected at the
moment there is a meeting of minds upon the thing which is the object of the contract and
upon the price. From that moment, the parties may reciprocally demand performance,
subject to the provisions of the law governing the form of contracts." Thus, the elements
of a contract of sale are consent, object, and price in money or its equivalent. It bears
stressing that the absence of any of these essential elements negates the existence of a
perfected contract of sale. Sale is a consensual contract and he who alleges it must show
its existence by competent proof. 25
In an attempt to resurrect the lapsed option, private respondent gave P300,000.00 to
petitioners (thru Alice A. Dizon) on the erroneous presumption that the said amount
tendered would constitute a perfected contract of sale pursuant to the contract of lease

with option to buy. There was no valid consent by the petitioners (as co-owners of the
leased premises) on the supposed sale entered into by Alice A. Dizon, as petitioners'
alleged agent, and private respondent. The basis for agency is representation and a person
dealing with an agent is put upon inquiry and must discover upon his peril the authority
of the agent. 26 As provided in Article 1868 of the New Civil Code, 27there was no
showing that petitioners consented to the act of Alice A. Dizon nor authorized her to act
on their behalf with regard to her transaction with private respondent. The most prudent
thing private respondent should have done was to ascertain the extent of the authority of
Alice A. Dizon. Being negligent in this regard, private respondent cannot seek relief on
the basis of a supposed agency.
In Bacaltos Coal Mines vs. Court of Appeals, 28 we explained the rule in dealing with an
agent:
Every person dealing with an agent is put upon inquiry and must discover upon his peril
the authority of the agent. If he does not make such inquiry, he is chargeable with
knowledge of the agent's authority, and his ignorance of that authority will not be any
excuse. Persons dealing with an assumed agency, whether the assumed agency be a
general or special one, are bound at their peril, if they would hold the principal, to
ascertain not only the fact of the agency but also the nature and extent of the authority,
and in case either is controverted, the burden of proof is upon them to establish it.
For the long years that private respondent was able to thwart the execution of the
ejectment suit rendered in favor of petitioners, we now write finis to this controversy and
shun further delay so as to ensure that this case would really attain finality.
WHEREFORE, in view of the foregoing, both petitions are GRANTED. The decision
dated March 29, 1994 and the resolution dated October 19, 1995 in CA-G.R. CV No.
25153-54, as well as the decision dated December 11, 1995 and the resolution dated April
23, 1997 in CA-G.R. SP No. 33113 of the Court of Appeals are hereby REVERSED and
SET ASIDE.
Let the records of this case be remanded to the trial court for immediate execution of the
judgment dated November 22, 1982 in Civil Case No. VIII-29155 of the then City Court
(now Metropolitan Trial Court) of Quezon City, Branch VIII as affirmed in the decision
dated September 26, 1984 of the then Intermediate Appellate Court (now Court of
Appeals) and in the resolution dated June 19, 1985 of this Court.
However, petitioners are ordered to REFUND to private respondent the amount of
P300,000.00 which they received through Alice A. Dizon on June 20, 1975.1wphi1.nt
SO ORDERED.
VIEGELY SAMELO, represented by Attorneyin-Fact CRISTINA SAMELO,

G.R. No. 170509

Petitioner,

Present:
CARPIO, J., Chairperson,
BRION,
PEREZ,
SERENO, and
REYES, JJ.

- versus -

MANOTOK SERVICES, INC., allegedly

represented by PERPETUA BOCANEGRA
(deceased),
Respondent.

Promulgated:
June 27, 2012

x------------------------------------------------------------------------------------x
DECISION
BRION, J.:

Before us is the petition for review on certiorari[1] filed by Viegely Samelo

(petitioner), represented by her attorney-in-fact Cristina Samelo, to challenge the decision
dated June 21, 2005[2] and the resolution dated November 10, 2005[3] of the Court of
Appeals (CA) in CA-G.R. SP No. 85664.

Background Facts
Manotok Services, Inc. (respondent) alleged that it is the administrator of a parcel
of land known as Lot 9-A, Block 2913, situated at 2882 Dagupan Extension, Tondo,
Manila. On January 31, 1997, the respondent entered into a contract with the petitioner
for the lease of a portion of Lot 9-A, Block 2913, described as Lot 4, Block 15 (subject
premises). The lease contract was for a period of one (1) year, with a monthly rental
of P3,960.00. After the expiration of the lease contract on December 31, 1997, the
petitioner continued occupying the subject premises without paying the rent. [4] On August
5, 1998, the respondent, thru its President Rosa Manotok, sent a letter to the petitioner
demanding that she vacate the subject premises and pay compensation for its use and
occupancy.[5] The petitioner, however, refused to heed these demands.
On November 18, 1998, the respondent filed a complaint for unlawful detainer
against the petitioner before the Metropolitan Trial Court (MeTC), Branch 3, Manila.
[6]
The case was docketed as Civil Case No. 161588-CV. The respondent prayed, among
others, that the petitioner and those claiming rights under her be ordered to vacate the
subject premises, and to pay compensation for its use and occupancy.
In her answer, the petitioner alleged that the respondent had no right to collect rentals
because the subject premises are located inside the property of the Philippine National
Railways (PNR). She also added that the respondent had no certificate of title over the
subject premises. The petitioner further claimed that her signature in the contract of lease
was obtained through the respondents misrepresentation. She likewise maintained that
she is now the owner of the subject premises as she had been in possession since 1944.[7]
The MeTC Ruling
The MeTC, in its judgment[8] of March 28, 2002, decided in favor of the
respondent, and ordered the petitioner to vacate the subject premises and to deliver their
peaceful possession to the respondent. The MeTC held that the only issue to be resolved
in an unlawful detainer case is physical possession or possession de facto, and that the
respondent had established its right of possession over the subject premises. It added that
the petitioners right under the lease contract already ceased upon the expiration of the
said contract. It further ruled that the petitioner is already estopped from questioning the
right of the respondent over the subject premises when she entered into a contract of lease
with the respondent. The dispositive portion of the MeTC judgment reads:
WHEREFORE, premises considered, judgment is hereby rendered
for the plaintiff and against defendant, ordering the latter and all persons
claiming rights under her:
1.

To vacate the premises located at 2882 Dagupan Extension,

Tondo, Manila, and deliver the peaceful possession thereof to
the plaintiff[;]

2.

To pay plaintiff the sum of P40,075.20 as compensation for

the use and occupancy of the premises from January 1, 1998 to
August 30, 1998, plus P4,554.00 a month starting September 1,
1998, until defendant and all person[s] claiming rights under
her to finally vacate the premises[;]

3.

To pay plaintiff the sum of P5,000.00 for and as attorneys

fees; and

4.

To pay the cost of suit.[9]

The RTC Decision

The petitioner filed an appeal[10] with the Regional Trial Court (RTC), Branch 50,
Manila. The RTC, in its decision [11] of July 1, 2004, set aside the MeTCs decision, and
dismissed the complaint for unlawful detainer. The RTC held, among others, that the
respondent had no right to collect rentals as it failed to show that it had authority to
administer the subject premises and to enter into a contract of lease with the petitioner. It
also ruled that the subject premises, which were formerly owned by the PNR, are now
owned by the petitioner by virtue of her possession and stay in the premises since 1944.
The CA Decision
Aggrieved by the reversal, the respondent filed a petition for review with the CA,
docketed as CA-G.R. SP No. 85664.[12] The CA, in its decision of June 21, 2005, reversed
and set aside the RTC decision, and reinstated the MeTC judgment. The CA held that the
petitioner is now estopped from questioning the right of the respondent over the subject
property. It explained that in an action involving the possession of the subject premises, a
tenant cannot controvert the title of his landlord or assert any rights adverse to that title,
without first delivering to the landlord the premises acquired by virtue of the agreement
between themselves. The appellate court added that the petitioner cannot claim that she
repudiated the lease contract, in the absence of any unequivocal acts of repudiation.
The CA further held that the only issue in an ejectment suit is physical or material
possession, although the trial courts may provisionally resolve the issue of ownership for
the sole purpose of determining the issue of possession. It explained that the issue of
ownership is not required to determine the issue of possession since the petitioner tacitly
admitted that she is a lessee of the subject premises.[13]
The petitioner moved to reconsider this decision, but the CA denied her motion in
its resolution dated November 10, 2005.[14]

In presenting her case before this Court, the petitioner argued that the CA erred in
ruling that a tenant is not permitted to deny the title of his landlord. She maintained that
the respondent is not the owner or administrator of the subject premises, and insisted that
she had been in possession of the land in question since 1944. She further added that she
repudiated the lease contract by filing a case for fraudulent misrepresentation,
intimidation, annulment of lease contract, and quieting of title with injunction before
another court.[15]
The Courts Ruling
We find the petition unmeritorious.

Respondent has a better right of possession over the subject premises

An action for unlawful detainer exists when a person unlawfully withholds
possession of any land or building against or from a lessor, vendor, vendee or other
persons, after the expiration or termination of the right to hold possession, by virtue of
any contract, express or implied.[16] The only issue to be resolved in an unlawful
detainer case is physical or material possession of the property involved, independent of
any claim of ownership by any of the parties involved. [17] Thus, when the relationship of
lessor and lessee is established in an unlawful detainer case, any attempt of the parties to
inject the question of ownership into the case is futile, except insofar as it might throw
light on the right of possession.[18]
In the present case, it is undisputed that the petitioner and the respondent entered
into a contract of lease. We note in this regard that in her answer with affirmative
defenses and counterclaim before the MeTC, the petitioner did not deny that she signed
the lease contract (although she maintained that her signature was obtained through the
respondents misrepresentations). Under the lease contract, the petitioner obligated herself
to pay a monthly rental to the respondent in the amount of P3,960.00. The lease period
was for one year, commencing on January 1, 1997 and expiring on December 31, 1997. It
bears emphasis that the respondent did not give the petitioner a notice to vacate upon the
expiration of the lease contract in December 1997 (the notice to vacate was sent only on
August 5, 1998), and the latter continued enjoying the subject premises for more than 15
days, without objection from the respondent. By the inaction of the respondent as lessor,
there can be no inference that it intended to discontinue the lease contract. [19] An implied
new lease was therefore created pursuant to Article 1670 of the Civil Code, which
expressly provides:
Article 1670. If at the end of the contract the lessee should
continue enjoying the thing leased for fifteen days with the acquiescence
of the lessor, and unless a notice to the contrary by either party has
previously been given, it is understood that there is an implied new lease,
not for the period of the original contract, but for the time established in
Articles 1682 and 1687. The other terms of the original contract shall be
revived.
An implied new lease or tacita reconduccion will set in when the following
requisites are found to exist: a) the term of the original contract of lease has expired; b)
the lessor has not given the lessee a notice to vacate; and c) the lessee continued enjoying
the thing leased for fifteen days with the acquiescence of the lessor.[20] As earlier
discussed, all these requisites have been fulfilled in the present case.
Article 1687 of the Civil Code on implied new lease provides:

Article 1687. If the period for the lease has not been fixed, it is
understood to be from year to year, if the rent agreed upon is annual; from
month to month, if it is monthly; from week to week, if the rent is weekly;
and from day to day, if the rent is to be paid daily.
Since the rent was paid on a monthly basis, the period of lease is considered to be
from month to month, in accordance with Article 1687 of the Civil Code. [A]lease from
month to month is considered to be one with a definite period which expires at the end of
each month upon a demand to vacate by the lessor.[21] When the respondent sent a
notice to vacate to the petitioner on August 5, 1998, the tacita reconduccion was aborted,
and the contract is deemed to have expired at the end of that month. [A] notice to vacate
constitutes an express act on the part of the lessor that it no longer consents to the
continued occupation by the lessee of its property.[22] After such notice, the lessees right
to continue in possession ceases and her possession becomes one of detainer.[23]
Estoppel of tenant
We find no merit in the petitioners allegation that the respondent had no authority
to lease the subject premises because the latter failed to prove that it is its owner or
administrator.
The Rules of Court protects the respondent, as lessor, from being questioned by
the petitioner, as lessee, regarding its title or better right of possession over the subject
premises. Section 2(b), Rule 131 of the Rules of Court states that the tenant is not
permitted to deny the title of his landlord at the time of the commencement of the relation
of landlord and tenant between them. Article 1436 of the Civil Code likewise states that a
lessee or a bailee is estopped from asserting title to the thing leased or received, as against
the lessor or bailor.
These provisions bar the petitioner from contesting the respondents title over the
subject premises. The juridical relationship between x x x [a] lessor and x x x [a lessee]
carries with it a recognition of the lessor's title. As [lessee, the petitioner is] estopped
[from denying the] landlord's title, or to assert a better title not only in [herself], but also
in some third person while [she remains] in possession of the subject premises and until
[she surrenders] possession to the landlord. This estoppel applies even though the lessor
had no title at the time the relation of [the] lessor and [the] lessee was created, and may
be asserted not only by the original lessor, but also by those who succeed to his title.
[24]
Once a contact of lease is shown to exist between the parties, the lessee cannot by any
proof, however strong, overturn the conclusive presumption that the lessor has a valid
title to or a better right of possession to the subject premises than the lessee.
The Court thus explained in Tamio v. Ticson:[25]

Indeed, the relation of lessor and lessee does not depend on the
formers title but on the agreement between the parties, followed by the
possession of the premises by the lessee under such agreement. As long as
the latter remains in undisturbed possession, it is immaterial whether the
lessor has a valid title or any title at all at the time the relationship was
entered into. [citations omitted]
The issue of ownership
We are likewise unpersuaded by the petitioners claim that she has acquired
possessory rights leading to ownership[26] over the subject premises, having been in
possession thereof since 1944. We emphasize that aside from her self-serving allegation,
the petitioner did not present any documentary evidence to substantiate her claim that she
stayed on the subject premises since 1944. That the petitioner presented certificates of
title of the Manila Railroad Company over certain properties in Tondo, Manila, which
allegedly cover the subject premises, is of no moment. One cannot recognize the right of
another, and at the same time claim adverse possession which can ripen to ownership,
thru acquisitive prescription. For prescription to set in, the possession must be adverse,
continuous, public, and to the exclusion of [others].[27] Significantly, the RTC decision
failed to state its basis for concluding that the petitioner stayed in the subject premises
since 1944.
At any rate, we hold that no need exists to resolve the issue of ownership in this
case, since it is not required to determine the issue of possession; the execution of the
lease contract between the petitioner, as lessee, and the respondent, as lessor, belies the
formers claim of ownership. We reiterate that the fact of the lease and the expiration of its
term are the only elements in an action for unlawful detainer. The defense of ownership
does not change the summary nature of [this] action. x x x. Although a wrongful
possessor may at times be upheld by the courts, this is merely temporary and solely for
the maintenance of public order. The question of ownership is to be settled in the proper
court and in a proper action.[28]
Interest on rentals due
Additionally, the petitioner is liable to pay interest by way of damages for her failure to
pay the rentals due for the use of the subject premises. [29] We reiterate that the respondents
extrajudicial demand on the petitioner was made on August 5, 1998. Thus, from this date,
the rentals due from the petitioner shall earn interest at 6% per annum, until the judgment
in this case becomes final and executory. After the finality of judgment, and until full
payment of the rentals and interests due, the legal rate of interest to be imposed shall be
12%.
WHEREFORE, in light of all the foregoing, we DENY the petition. The decision and
the resolution of the Court of Appeals dated June 21, 2005 and November 10, 2005,

respectively,
in
CA-G.R.
SP
No.
85664
are AFFIRMED with
the MODIFICATION that the unpaid rentals shall earn a corresponding interest of six
percent (6%) per annum, to be computed from August 5, 1998 until the finality of this
decision. After this decision becomes final and executory, the rate of legal interest shall
be computed at twelve percent (12%) per annum from such finality until its satisfaction.
SO ORDERED.