28 Catungal v. Hao

FIRST DIVISION
[G.R. No. 134972. March 22, 2001.]
SPS. ERNESTO and MINA CATUNGAL, petitioners, vs. DORIS

HAO, respondent.
Gancayco Balasbas & Associates for petitioners.

Napoleon Uy Galit for private respondent.
SYNOPSIS
A three-storey building, located in a fully developed commercial/business

area in Baclaran, Parañaque, was leased to the Bank of the Philippine Islands
which subleased the ground floor to respondent. Subsequently, the second and
third floors were leased by the owner to respondent. During the effectivity of the
lease contract, the property was sold to petitioners. Respondent, invoking her
"right of first refusal," sought to annul the sale with the Regional Trial Court
(RTC) in Civil Case 88-491. After the lease contracts expired and respondents
failed to vacate, petitioners sued for ejectment. Respondent countered with an
action for injunction. The injunction and annulment cases were consolidated
wherein judgment was rendered granting the injunction and annulling the sale. The
decision was reversed by the Court of Appeals. It dismissed the annulment and
injunction cases. The MeTC, in the ejectment cases, rendered judgment ordering
respondent to vacate the premises and to pay petitioner P20,000 as rent. On
clarification, respondent was ordered to pay P8,000 for the first floor and P5,000
for the second and third floors. Petitioners moved for reconsideration. The MeTC,
instead of resolving the motion, treated the same as a notice of appeal, and
elevated the case to the RTC which increased the rent for the first floor to P20,000
and P10,000 each for the second and third floors. It applied the doctrine of judicial
notice. It took note that the prevailing rental rates in the area ranged from P20,000
and P30,000. The Court of Appeals, however, reduced the rent to P8,000 for the
first floor and to P5,000 each for the second and third floors. Hence, this recourse.
The plaintiff in an ejectment case is entitled to damages by his loss of the

use and possession of the premises. Damages is limited to "rent" or fair rental
value or the reasonable compensation for the use and occupation of the property.
The trial court has the authority to fix the reasonable value for the
Copyright 1994-2019 CD Technologies Asia, Inc. Jurisprudence 1901 to 2019 First Release 1
continued use and occupancy of the leased premises and can take judicial notice of
the general increase in rentals of real estate especially of business establishments.
In the case at bar, the Court found that the increased award of the rentals ruled by
the RTC was reasonable. IEHDAT
SYLLABUS
1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; EJECTMENT

PLAINTIFF ENTITLED TO RENT OR FAIR RENTAL VALUE FOR USE AND
OCCUPATION OF PROPERTY. — The plaintiff in an ejectment case is entitled
to damages caused by his loss of the use and possession of the premises. Damages
in the context of Section 17, Rule 70 of the 1997 Rules of Civil Procedure is
limited to "rent" or fair rental value or the reasonable compensation for the use and
occupation of the property.
2. ID.; EVIDENCE; JUDICIAL NOTICE, CONSTRUED. — Judicial

knowledge may be defined as the cognizance of certain facts which a judge under
rules of legal procedure or otherwise may properly take or act upon without proof
because they are already known to him, or is assumed to have, by virtue of his
office. Judicial cognizance is taken only of those matters that are "commonly"
known. The power of taking judicial notice is to be exercised by courts with
caution; care must be taken that the requisite notoriety exists; and every reasonable
doubt on the subject should be promptly resolved in the negative. Matters of
judicial notice have three material requisites: (1) the matter must be one of
common and general knowledge; (2) it must be well and authoritatively settled and
not doubtful or uncertain; and (3) it must be known to be within the limits of
jurisdiction of the court.
3. ID.; SPECIAL CIVIL ACTIONS; EJECTMENT; RENT; COURTS

MAY TAKE JUDICIAL NOTICE OF NATURE OF LEASED PROPERTY
BASED ON LOCATION AND COMMERCIAL VIABILITY. — The RTC
correctly took judicial notice of the nature of the leased property subject of the
case at bench based on its location and the commercial viability. The above quoted
assessment by the RTC of the Baclaran area, where the subject property is located,
is fairly grounded. Furthermore, the RTC also had factual basis in arriving at the
said conclusion, the same being based on testimonies of witnesses, such as real
estate broker.
4. ID.; ID.; ID.; ID.; COURTS MAY TAKE JUDICIAL NOTICE OF

GENERAL INCREASE IN RENTALS. — The RTC rightly modified the rental
award from P13,000.00 to P40,000.00, considering that it is settled jurisprudence
that courts may take judicial notice of the general increase in rentals of lease
contract renewals much more with business establishments.
5. ID.; EVIDENCE; BURDEN OF PROOF; BURDEN TO SHOW

RENT IS UNCONSCIONABLE RESTS UPON LESSEE. — The Court of
Appeals failed to justify its reduction of the P40,000.00 fair rental value as
determined by the RTC. Neither has respondent shown that the rental pegged by
the RTC is exorbitant or unconscionable. This is because the burden of proof to
show that the rental demanded is unconscionable or exorbitant rests upon private
respondent as the lessee. Here, respondent neither discharged this burden when she
omitted to present any evidence at all on what she considers to be fair rental value,
nor did she controvert the evidence submitted by petitioners by way of testimonies
of the real estate broker and petitioner Mina Catungal. SITCcE
6. ID.; ACTIONS; ESTOPPEL; PARTY ESTOPPED FOR FAILURE

TO OPPOSE IRREGULARITY IN THE TRIAL COURT'S PROCEEDINGS. —
When the MeTC referred petitioners' motion to the RTC for its disposition,
respondent could have opposed such irregularity in the proceeding. This
respondent failed to do. Before this Court, respondent now insists that the petition
should be denied on the ground that the Motion for Reconsideration filed before
the MeTC is a prohibited pleading and hence could not be treated as a notice of
appeal. Respondent is precluded by estoppel from doing so. To grant respondent's
prayer will not only do injustice to the petitioners, but also it will make a mockery
of the judicial process as it will result in the nullity of the entire proceedings
already had on a mere technicality, a practice frowned upon by the Court.
7. ID.; RULES ON SUMMARY PROCEDURE; DO NOT GOVERN

UNLAWFUL DETAINER CASES WHERE UNPAID RENTALS SOUGHT TO
BE RECOVERED EXCEEDED P20,000.00; CASE AT BAR. — Simply because
the case was one for ejectment does not automatically mean that the same was
triable under the Rules of Summary Procedure. At the time of the filing of the
complaint by petitioner in 1989, said Rules provide . . . that in (1) CASES OF
FORCIBLE ENTRY AND UNLAWFUL DETAINER, EXCEPT WHERE THE
QUESTION OF OWNERSHIP IS INVOLVED, OR WHERE THE DAMAGES
OR UNPAID RENTALS SOUGHT TO BE RECOVERED BY THE PLAINTIFF
EXCEED TWENTY THOUSAND PESOS (P20,000.00) AT THE TIME OF THE
FILING OF THE COMPLAINT. . . . In their complaint, petitioners prayed, among
others, for rentals for the period covering June, 1988 to April 1989, at a rate of
P20,000.00 for the first floor alone, as well as P10,000.00 for attorney's fees.
Clearly, considering the amount of rentals and damages claimed by petitioners,
said case before the MeTC was not governed by the Rules on Summary Procedure.
Said case was governed by the ordinary rules where the general proposition is that
the filing of a motion for reconsideration of a final judgment is allowed. In the
interest of substantial justice, in this particular case, we rule that the MeTC did not
err in treating the motion for reconsideration filed by petitioner as a notice of
appeal.
8. ID.; SPECIAL CIVIL ACTIONS; EJECTMENT; EXECUTION

PENDING APPEAL; WHEN ALLOWED. — In order to avoid further injustice to
a lawful possessor, an immediate execution of a judgment is mandated and the
court's duty to order such execution is practically ministerial. In City of Manila, et
al. vs. CA, et al., We held that "Section 8 (now Section 19), Rule 70, on execution
pending appeal, also applies even if the plaintiff-lessor appeals where, as in that
case, judgment was rendered in favor of the lessor but it was not satisfied with the
increased rentals granted by the trial court, hence the appeal . . . ."
9. ID.; ID.; ID.; BACK RENTALS; 12% INTEREST THEREON. —

The back rentals in this case being equivalent to a loan or forbearance of money,
the interest due thereon in twelve percent (12%) per annum from the time of
extra-judicial demand on September 27, 1988. IDaEHC
DECISION
KAPUNAN, J : p
This is a petition for review of the Decision of the Court of Appeals dated
10 March 1998 and Resolution dated 30 July 1998 in the case entitled Doris Hao
vs. Sps. Ernesto and Mina Catungal docketed as CA-G.R. SP No. 46158. Said
decision affirmed with modification the judgment rendered by the Regional Trial
Court.
The antecedents of this case are as follows:
On December 28, 1972, the original owner, Aniana Galang, leased a

three-storey building situated at Quirino Avenue, Baclaran, Parañaque, Metro
Manila, to the Bank of the Philippine Islands (BPI) for a period of about fifteen
(15) years, to expire on June 20, 1986. During the existence of the lease, BPI
subleased the ground floor of said building to respondent Doris Hao.
On August 24, 1984, Galang and respondent executed a contract of lease on

the second and third floors of the building The lease was for a term of four (4)
years commencing on August 15, 1984 and ending on August 15, 1988. On
August 15, 1986, petitioner spouses Ernesto and Mina Catungal bought the
property from Aniana Galang.
Invoking her "right of first refusal" purportedly based on the lease contract
between her and Aniana Galang, respondent filed a complaint for Annulment of
Sale with Damages docketed as Civil Case No. 88-491 of the Regional Trial Court
(RTC) of Makati, Metro Manila.
Meanwhile, the lease agreement between BPI and Galang expired.
Upon expiration of the lease agreements, petitioner spouses sent demand

letters to respondent for her to vacate the building. The demand letters were
unheeded by respondent causing petitioners to file two complaints for ejectment,
docketed as Civil Cases Nos. 7666 and 7667 of the Metropolitan Trial Court
(MeTC) of Parañaque, Metro Manila.
The institution of the ejectment cases prompted respondent to file an action

for injunction docketed as Civil Case No. 90-758 of the RTC of Makati, to stop the
MeTC of Parañaque from proceeding therewith pending the settlement of the issue
of ownership raised in Civil Case No. 88-491. These two cases for annulment of
sale and for injunction were also consolidated before Branch 63 of the RTC of
Makati which rendered a Decision dated September 19, 1991, granting the
injunction and annulling the contract of sale between Aniana Galang and
petitioners.
On appeal, 1(1) the Court of Appeals reversed and set aside the decision of
the RTC and the complaints in Civil Cases Nos. 88-491 and 90-758 were
accordingly dismissed.
Not satisfied, respondent elevated the above decision of the CA before this
Court. We, however, denied respondent's petition on April 10, 1996. 2(2)
The MeTC of Parañaque, after the reversal of the decision in Civil Case No.
90-758 for injunction, proceeded with the trial of the ejectment cases.
On January 22, 1997, the MeTC of Parañaque rendered a Decision, the

dispositive portion of which reads:
IN VIEW OF THE FOREGOING, judgment is hereby rendered

ordering the defendant Doris T. Hao who is in actual possession of the
property and all persons claiming rights under her to vacate the premises in
question and to pay the plaintiffs the amount of P20,000.00 a month from
June 28, 1988, until she finally vacates the premises and to pay attorney's
fees of P20,000.00. With costs against the defendant. 3(3)
Petitioners filed a motion for clarificatory or amended judgment on the

ground that although MeTC "ordered the defendant to vacate the entire subject
property, it only awarded rent or compensation for the use of said property and
attorney's fees for said ground floor and not the entire subject property.
Compensation for the use of the subject property's second and third floors and
attorney's fees as prayed for in Civil Case No. 7767 were not awarded." 4(4) In
response to said motion, the MeTC issued an Order dated March 3, 1997, the
dispositive portion of which reads:
IN VIEW OF THE FOREGOING, the Decision of this Court is

hereby clarified in such a way that the dispositive portion would read as
follows: "IN VIEW OF THE FOREGOING, judgment is hereby rendered
ordering the defendant Doris T. Hao who is in actual possession of the
property and all persons claiming rights under her to vacate the premises and
to pay the plaintiffs the amount of P8,000.00 a month in Civil Case No.
7666 for the use and occupancy of the first floor of the premises in question
from June 28, 1998 until she finally vacates the premises and to pay the
plaintiff a rental of P5,000.00 a month in Civil Case No. 7667 from June 28,
1988, until she finally vacates the premises and to pay attorney's fees of
P20,000.00. With costs against defendant.
SO ORDERED. 5(5)
Petitioners sought reconsideration of the above order, praying that

respondent be ordered to pay P20,000.00 monthly for the use and occupancy of the
ground floor and P10,000.00 each monthly for the second and third floors. HSEIAT
Respondent, on the other hand, filed a notice of appeal.
Instead of resolving the motion for reconsideration, on May 7, 1997, the

MeTC of Parañaque issued an Order, elevating the case to the Regional Trial
Court:
Considering the Motion for Reconsideration of the Order of this

Court dated March 3, 1997 and the Comment and Opposition thereto of the
counsel for the defendant, the Court finds that the said Motion for
Reconsideration should already be addressed to the Regional Trial Court
considering that whatever disposition that this Court will award will still be
subject to the appeal taken by the defendant and considering further that the
supersede as bond posted by the defendant covered the increased rental. 6(6)
On September 30, 1997, the RTC of Parañaque, Branch 259, rendered a

Decision modifying that of the MeTC, the dispositive portion of which reads:
IN THE LIGHT OF THE FOREGOING, the appealed decision,

being in accordance with law, is hereby AFFIRMED as to the order to
vacate the property in question and MODIFIED as to the amount of rentals
which is hereby increased to P20,000.00 a month for the ground floor
starting June 28, 1988 and P10,000.00 a month for the second floor and also
P10,000.00 a month for the third floor (or) a total of P40,000.00 monthly
rentals commencing June 28, 1988 until the subject property has been
vacated and possession thereof turner [sic] over to the plaintiffs-appellees; to
pay attorney's fees in the amount of P20,000.00; and with costs. 7(7)
In her Motion dated October 6, 1997, respondent sought a reconsideration

of the above ruling of the RTC. The same was denied on November 25, 1997.
Respondent elevated her case to the Court of Appeals. The CA rendered the
Decision subject of this petition the dispositive portion thereof reads:
WHEREFORE, the decision appealed from is hereby MODIFIED by

reducing the amount of rentals for both the second and third floors from
P20,000.00 to P10,000.00 monthly. With this modification, the judgment
below is AFFIRMED in all other respects. 8(8)
The parties filed their respective motions for reconsideration to the Court of
Appeals. Petitioners asked that the decision of the Regional Trial Court fixing the
total monthly rentals at P40,000.00 be sustained. On the other hand, respondent
sought a revival of the decision of the MeTC on the ground that since petitioners
did not interpose an appeal from the amended judgment of the MeTC, the RTC
could not validly increase the amount of rentals awarded by the former.
In its Resolution dated 30 July 1998, the Court of Appeals resolved the
parties' motions for reconsideration in favor of the respondent. It ruled that the
motion for reconsideration filed by the petitioners before the MeTC was a
prohibited pleading under the Rules of Summary Procedure. Such being the case,
said motion for reconsideration did not produce any legal effect and thus the
amended judgment of the MeTC had become final and executory insofar as the
petitioners are concerned. The dispositive portion of the CA's resolution reads as
follows:
WHEREFORE, the decision appealed from is hereby MODIFIED by

reducing the monthly rentals for the first/ground floor from P20,000.00 to
P8,000.00 and for the second and third floors from P10,000.00 each to
P5,000.00 for both floors. With this modification the judgment below is
AFFIRMED in all other respects.
No pronouncement as to costs.
SO ORDERED. 9(9)
Petitioners now come before this Court assigning the following errors:
A.
IN THE ASSAILED DECISION, THE HONORABLE COURT OF

APPEALS GRAVELY ERRED IN REVERSING THE FINDINGS OF
THE REGIONAL TRIAL COURT BY USING AS BASIS FOR
REDUCING THE RENTAL ONLY THE EVIDENCE SUBMITTED BY
THE PARTIES AND IGNORING CIRCUMSTANCES OF WHICH THE
REGIONAL TRIAL COURT PROPERLY TOOK JUDICIAL NOTICE.
B.
IN THE ASSAILED DECISION, THE HONORABLE COURT OF

APPEALS GRAVELY ERRED IN ITS FINDINGS THAT THE
REGIONAL TRIAL COURT HAD NO JURISDICTION TO MODIFY
THE APPEALED JUDGMENT BY INCREASING THE AWARD OF
MONTHLY RENTALS FROM P13,000.00 TO P40,000.00. 10(10)
We required respondent to comment on the petition. 11(11) In her

Comment/Compliance, respondent contends that the petition should be dismissed
and the resolution of the case should be based on the following issues:
1. DID THE RESPONDENT APPELLATE COURT

COMMITTED [sic] ANY REVERSIBLE ERROR WHEN IT
CONSIDERED PETITIONERS "MOTION FOR
RECONSIDERATION" (ANNEX "I"-PETITION) FILED
WITH THE MTC-COURT AS A PROHIBITIVE [sic]
PLEADING, IN A SUMMARY PROCEDURE CASE SUCH
AS THE ONE AT BAR[?]
2. DID THE RESPONDENT APPELLATE COURT

COMMITTED [sic] ANY REVERSIBLE ERROR WHEN IT
RESOLVED TO RESTORE, REINSTATE, AFFIRM AND
UPHOLD THE MTC — AMENDED JUDGMENT OF
MARCH 3, 1997 FIXING THE TOTAL AWARD OF
P13,000.00 GROUNDED ON A PROHIBITIVE [sic]
PLEADING AND FAILURE TO FILE A NOTICE OF
APPEAL[?]
3. DID THE APPELLATE COURT COMMITTED [SIC] ANY

REVERSIBLE ERROR WHEN IT RESOLVED TO SUSTAIN
RESPONDENT'S POSITION CONSISTENT WITH THE
LAW AND JURISPRUDENCE THAT FOR PETITIONERS'
FAILURE TO APPEAL AND HAVING FILED A
PROHIBITIVE [SIC] PLEADING, THEY CANNOT ASK
FOR AFFIRMATIVE RELIEF SUCH AS INCREASE IN
RENTAL[?] 12(12)
There is no question that after the expiration of the lease contracts which
respondent contracted with Aniana Galang and BPI, she lost her right to possess
the property since, as early as the actual expiration date of the lease contract,
petitioners were not negligent in enforcing their right of ownership over the
property.
While respondent was finally evicted from the leased premises, the amount
of monthly rentals which respondent should pay the petitioners as forced lessors of
said property from 20 June 1988 (for the ground floor) and 15 August 1988 until 6
January 1998 (for the second and third floors), or a period of almost ten years
remains to be resolved.
Petitioners, in the main, posit that there should be a reinstatement of the

decision of the regional trial court which fixed the monthly rentals to be paid by
herein respondent at the total of P40,000.00, P20,000.00 for the occupancy of the
first floor, and P10,000.00 each for the occupancy of the second and third floors of
the building, effective after the lapse of the original lease contract between
respondent and the original owner of the building.
On the other hand, respondent insists on the ruling of the Metropolitan Trial
Court, which was thereafter reinstated by the Court of Appeals in its 30 July 1998
Resolution, that the monthly rental rates of only P8,000.00 for the first floor and
P5,000.00 for each of the second and third floors should prevail.
At the outset, it should be recalled that there existed no consensual

lessor-lessee relationship between the parties. At most, what we have is a forced
lessor-lessee relationship inasmuch as the respondent, by way of detaining the
property without the consent of herein petitioners, was in unlawful possession of
the property belonging to petitioner spouses.
We cannot allow the respondent to insist on the payment of a measly sum

of P8,000 for the rentals of the first floor of the property in question and P5,000.00
for each of the second and the third floors of the leased premises. The plaintiff in
an ejectment case is entitled to damages caused by his loss of the use and
possession of the premises. 13(13) Damages in the context of Section 17, Rule 70
of the 1997 Rules of Civil Procedure is limited to "rent" or fair rental value or the
reasonable compensation for the use and occupation of the property. 14(14) What
therefore constitutes the fair rental value in the case at bench?
In ruling that the increased rental rates of P40,000.00 should be awarded the
petitioners, the regional trial court based its decision on the doctrine of judicial
notice. The RTC held, thus:
While this Court is fully in agreement with the Court of Origin that
plaintiffs-appellees have the better right to the possession of the premises in
question being the present owners and the contract of lease between the
former owner and herein defendant-appellant had already expired, the
amount of rentals as laid down in the Clarificatory Order dated 3 March
1997 is inadequate, if not unreasonable.
The Court a quo misappreciated the nature of the property, its
location and the business practice in the vicinity and indeed committed an
error in fixing the amount of rentals in the aforementioned Order. Said
premises is situated along Quirino Avenue, a main thoroughfare in Barangay
Baclaran, Parañaque, Metro Manila, a fully developed commercial area and
the place where the famous shrine of the Mother of Perpetual Help stands.
Withal, devotees, traders, tourists and practically people from all walks of
life visit said barangay making it suitable for commerce, not to mention
thousand of residents therein. Needless to say, every square meter of said
community is valuable for all kinds of business or commerce of man. AcICHD
Further, considering that the questioned property has three floors and
strategically located along the main road and consistent with the prevailing
rental rates in said business area which is between P20,000.00 and
P30,000.00 as testified to by Divina Q. Roco, a real estate agent and Mina
Catungal, this Court finds the amount of P20,000.00 a month for the ground
floor and P10,000.00 a month each for the second floor and third floor or a
total of P40,000.00 monthly rentals as appropriate and reasonable rentals for
the use and occupation of said premises.
Finally, worth mentioning here as parallel is [the] ruling of the

Supreme Court in the case of Manila Bay Club Corporation vs. Court of
Appeals, 245 SCRA 715 and 731-732 citing Licmay vs. Court of Appeals,
215 SCRA 1 (1992) and Commander Realty Inc. v. Court of Appeals, 168
SCRA 181. It reads as follows:
It is worth stressing at this juncture that the trial court had the
authority to fix the reasonable value for the continued use and
occupancy of the leased premises after the termination of the lease
contract, and that it was not bound by the stipulated rental in the
contract of lease since it is equally settled that upon termination or
expiration of the Contract of Lease, the rental stipulated therein may
no longer be the reasonable value for the use and occupation of the
premises as a result or by reason of the change or rise in values.
Moreover, the trial court can take judicial notice of the general
increase in rentals of real estate especially of business establishments
like the leased building owned by the private respondents. 15(15)
We find that the RTC correctly applied and construed the legal concept of
judicial notice in the case at bench. Judicial knowledge may be defined as the
cognizance of certain facts which a judge under rules of legal procedure or
otherwise may properly take or act upon without proof because they are already
known to him, or is assumed to have, by virtue of his office. 16(16) Judicial
cognizance is taken only of those matters that are "commonly" known. The power
of taking judicial notice is to be exercised by courts with caution; care must be
taken that the requisite notoriety exists; and every reasonable doubt on the subject
should be promptly resolved in the negative. 17(17) Matters of judicial notice have
three material requisites: (1) the matter must be one of common and general
knowledge; (2) it must be well and authoritatively settled and not doubtful or
uncertain; and (3) it must be known to be within the limits of jurisdiction of the
court.
The RTC correctly took judicial notice of the nature of the leased property
subject of the case at bench based on its location and the commercial viability. The
above quoted assessment by the RTC of the Baclaran area, where the subject
property is located, is fairly grounded.
Furthermore, the RTC also had factual basis in arriving at the said
conclusion, the same being based on testimonies of witnesses, such as real estate
broker Divina Roco and the petitioner Mina Catungal.
The RTC rightly modified the rental award from P13,000.00 to P40,000.00,
considering that it is settled jurisprudence that courts may take judicial notice of
the general increase in rentals of lease contract renewals much more with business
establishments. Thus, We held in Manila Bay Club Corporation vs. Court of
Appeals: 18(18)
It is worth stressing at this juncture that the trial court had the
authority to fix the reasonable value for the continued use and occupancy of
the leased premises after the termination of the lease contract, and that it was
not bound by the stipulated rental in the contract of lease since it is equally
settled that upon termination or expiration of the contract of lease, the rental
stipulated therein may no longer be the reasonable value for the use and
occupation of the premises as a result or by reason of the change or rise in
values. Moreover, the trial court can take judicial notice of the general
increase in rentals of real estate especially of business establishments like
the leased building owned by the private respondent. 19(19)
The increased award of rentals ruled by the RTC is reasonable given the
circumstances of the case at bench. We note that respondent was able to deny
petitioners the benefits, including possession, of their rightful ownership over the
subject property for almost a decade.
The Court of Appeals failed to justify its reduction of the P40,000.00 fair
rental value as determined by the RTC. Neither has respondent shown that the
rental pegged by the RTC is exorbitant or unconscionable. This is because the
burden of proof to show that the rental demanded is unconscionable or exorbitant
rests upon private respondent as the lessee. 20(20) Here, respondent neither
discharged this burden when she omitted to present any evidence at all on what she
considers to be fair rental value, nor did she controvert the evidence submitted by
petitioners by way of testimonies of the real estate broker and petitioner Mina
Catungal. Thus, in Sia v. CA, we ruled:
. . . On the contrary, the records bear out that the P5,000.00 monthly
rental is a reasonable amount, considering that the subject lot is prime
commercial real property whose value has significantly increased and that
P5,000.00 is within the range of prevailing rental rates in that vicinity.
Moreover, petitioner has not proffered controverting evidence to support
what he believes to be the fair rental value of the leased building since the
burden of proof to show that the rental demanded is unconscionable or
exorbitant rests upon the lessee. Thus, here and now we rule, as we did in
the case of Manila Bay Club v. Court of Appeals, that petitioner having
failed to prove its claim of excessive rentals, the valuation made by the
Regional Trial Court, as affirmed by the respondent Court of Appeals,
stands. 21(21)
The Court of Appeals merely anchored its decision to reduce the

P40,000.00 rental on procedural grounds. According to the Court of Appeals, the
motion for reconsideration filed by petitioners before the MeTC is a prohibited
pleading under the Rule on Summary Procedure and did not have any effect in
stalling the running of the period to appeal the decision nor could it be considered
as notice of appeal and consequently this affected the elevation of the case to the
RTC. Not having appealed the case to the RTC, the amended judgment of the
MeTC fixing the rental rate at P13,000.00 is final and executory as far as
petitioners are concerned.
We disagree. A reading of the order issued by the MeTC will show that said
court elevated the issue on the amount of rentals raised by the petitioner to the
RTC because the appeal of respondent had already been perfected, thus:
Considering the Motion for Reconsideration of the Order of this

Court dated March 3, 1997 and the Comment and Opposition thereto of the
counsel for the defendant, the Court finds the said Motion for
Reconsideration should already be addressed to the Regional Trial Court
considering that whatever disposition that this Court will award will still be
subject to the appeal taken by the defendant and considering further that the
supersede as bond posted by the defendant covered the increased rental.
In order that this case will be immediately forwarded to the Regional

Trial Court in view of the appeal of the defendant, the Court deemed it wise
not to act on the said motion for reconsideration and submit the matter to the
Regional Trial Court who has the final say on whether the rental or the
premises in question will be raised or not.
It will be to the advantage of both parties that this Court refrain from
acting on the said Motion for Reconsideration so as to expedite the
remanding (sic) of this Court to the Regional Trial Court. 22(22)
When the MeTC referred petitioners' motion to the RTC for its disposition,
respondent could have opposed such irregularity in the proceeding. This
respondent failed to do. Before this Court, respondent now insists that the petition
should be denied on the ground that the Motion for Reconsideration filed before
the MeTC is a prohibited pleading and hence could not be treated as a notice of
appeal. Respondent is precluded by estoppel from doing so. To grant respondent's
prayer will not only do injustice to the petitioners, but also it will make a mockery
of the judicial process as it will result in the nullity of the entire proceedings
already had on a mere technicality, a practice frowned upon by the Court. Our
ruling in Martinez, et al. vs. De la Merced, et al., 23(23) is illustrative:
. . . In fine, these are acts amounting to a waiver of the irregularity of

the proceedings. For it has been consistently held by this Court that while
lack of jurisdiction may be assailed at any stage, a party's active
participation in the proceedings before a court without jurisdiction will estop
such party from assailing such lack of jurisdiction.
The Court of Appeals in the assailed Decision correctly observed that the
"peculiar circumstances attendant to the ejectment cases warrant departure" from
the presumption that a party who did not interject an appeal is satisfied with the
adjudication made by the lower court:
As regard the issue on the propriety of the increase in the award of

damages/rentals made by the RTC, the Court notes that, while respondent
spouses did not formally appeal the decision in the ejectment cases, their
motion for reconsideration assailing the clarificatory order reducing the
award of damages/rentals was, by order of the MTC, referred to the RTC for
appropriate action.
Reason for such action is stated in the Order of May 7, 1997, thus:
xxx xxx xxx
Neither petitioner nor respondent spouses assailed the above order.

In fact, in their appeal memorandum, respondent spouses reiterated their
claim, first ventilated in their motion for reconsideration dated March 24,
1997, that the MTC grievously erred in finding that plaintiffs-appellees are
only entitled to a meager monthly rental of P8,000.00 for the ground floor
and P5,000.00 for the second and third floors. DETcAH
Hence, while the entrenched procedure in this jurisdiction is that a

party who has not himself appealed cannot obtain from the appellate court
affirmative relief other than those granted in the decision of the lower court,
the peculiar circumstances attendant to the ejectment cases warrant a
departure therefrom. The rule is premised on the presumption that a party
who did not interpose an appeal is satisfied with the adjudication made by
the lower court. Respondent spouses, far from showing satisfaction with the
clarificatory order of March 3, 1997, assailed it in their motion for
reconsideration which, however, was referred to the RTC for appropriate
action in view of the appeal taken by the petitioner. Clearly, the increase in
the damages/rentals awarded by the MTC was an issue the RTC could
validly resolve in the ejectment cases. 24(24)
Respondent, argues that ejectment cases are tried under the Revised Rule on
Summary Procedure, 25(25) hence, the motion for reconsideration filed by
petitioner was a prohibited pleading and could not take the place of the required
notice of appeal.
The argument by respondent is misleading. Simply because the case was

one for ejectment does not automatically mean that the same was triable under the
Rules of Summary Procedure. At the time of the filing of the complaint by
petitioner in 1989, said Rules provide:
SECTION 1. SCOPE — THIS RULE SHALL GOVERN

THE PROCEDURE IN THE METROPOLITAN TRIAL COURTS, THE
MUNICIPAL TRIAL COURTS, AND THE MUNICIPAL CIRCUIT
TRIAL COURTS IN THE FOLLOWING CASES:
A. CIVIL CASES:
(1) CASES OF FORCIBLE ENTRY AND UNLAWFUL

DETAINER, EXCEPT WHERE THE QUESTION OF OWNERSHIP IS
INVOLVED, OR WHERE THE DAMAGES OR UNPAID RENTALS
SOUGHT TO BE RECOVERED BY THE PLAINTIFF EXCEED
TWENTY THOUSAND PESOS (P20,000.00) AT THE TIME OF THE
FILING OF THE COMPLAINT. . . .
In their complaint, petitioners prayed, among others, for rentals for the
period covering June, 1988 to April 1989, at a rate of P20,000.00 for the first floor
alone, as well as P10,000.00 for attorney's fees. Clearly, considering the amount of
rentals and damages claimed by petitioners, said case before the MeTC was not
governed by the Rules on Summary Procedure. Said case was governed by the
ordinary rules where the general proposition is that the filing of a motion for
reconsideration of a final judgment is allowed. In the interest of substantial justice,
in this particular case, we rule that the MeTC did not err in treating the motion for
reconsideration filed by petitioner as a notice of appeal.
Finally, respondent questions why petitioners would want to reinstate the

RTC decision when in fact they had already applied for a writ of execution of the
8 March 1997 Decision. Respondent is of the view that since petitioners had
already moved for the execution of the decision awarding a smaller amount of
damages or fair rental value, the same is inconsistent with a petition asking for a
greater fair rental value and, therefore, a possible case of unjust enrichment in
favor of the petitioners. We are not persuaded.
In order to avoid further injustice to a lawful possessor, an immediate

execution of a judgment is mandated and the court's duty to order such execution
is practically ministerial. 26(26) In City of Manila, et al. vs. CA, et al., 27(27) We
held that "Section 8 (now Section 19), Rule 70, on execution pending appeal, also
applies even if the plaintiff-lessor appeals where, as in that case, judgment was
rendered in favor of the lessor but it was not satisfied with the increased rentals
granted by the trial court, hence the appeal . . . ."
As above discussed, the petitioners have long been deprived of the exercise
of their proprietary rights over the leased premises and the rightful amount of
rentals at the rate of P40,000.00 a month. Consequently, petitioners are entitled to
accrued monthly rentals of P27,000.00, which is the difference between
P40,000.00 awarded by the Regional Trial Court and P13,000.00 awarded by the
MeTC and affirmed by the Court of Appeals. Said amount of P27,000.00 should
rightly be the subject of another writ of execution being distinct from the subject
of the first writ of execution filed by petitioners.
The Court also awards interest in favor of petitioners. In Eastern Shipping

Lines, Inc. vs. Court of Appeals, we gave the following guidelines in the award of
interest:
xxx xxx xxx
II With regard particularly to an award of interest in the concept

of actual and compensatory damages, the rate of interest, as well as the
accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the payment

of a sum of money, i.e., a loan or forbearance of money, the interest due
should be that which may have been stipulated in writing. Furthermore, the
interest due shall itself earn legal interest from the time it is judicially
demanded. In the absence of stipulation, the rate of interest shall be 12% per
annum to be computed from default, i.e., from judicial or extrajudicial
demand under and subject to the provisions of Article 1169 of the Civil
Code.
The back rentals in this case being equivalent to a loan or forbearance of

money, the interest due thereon in twelve percent (12%) per annum from the time
of extra-judicial demand on September 27, 1988.
WHEREFORE, premises considered, judgment is hereby rendered in favor

of petitioners by REINSTATING the decision of the RTC, with modifications, and
ordering respondent to further PAY:
1. The sum of Twenty Seven Thousand Pesos (P27,000.00),
corresponding to the difference between the P40,000.00 awarded by the Regional
Trial Court and the P13,000.00 awarded by the Metropolitan Trial Court, as
monthly arrears, computed from respondent's unlawful detainer, 20 June 1988 (for
the ground floor) and 15 August 1988 (for the second and third floors) of the
subject property until the time she vacated the premises on 7 January 1998;
2. Legal interest of twelve percent (12%) per annum on the foregoing

sum from the date of notice of demand on 27 September 1988 until fully paid;
3. The sum of Twenty Thousand Pesos (P20,000.00) as and for attorney's

fees and;
4. The costs of suit.
SO ORDERED.
Davide, Jr., C.J., Puno, Pardo and Ynares-Santiago, JJ., concur.
Footnotes
1. CA-G.R. No. 35068, dated April 28, 1995, CA Rollo, p. 66.
2. G.R. No. 123500.
3. Rollo, p. 54.
4. Id., at 67.
5. Id., at 72.
6. CA Records, p. 317.
7. Rollo, pp. 48-49.
8. Id., at 37.
9. Id., at 41.
10. Id., at 15-16.
11. Id., at 82.
12. Id., at 84-85.
13. Santos vs. Santiago, 38 Phil. 575 (1918).
14. De Guzman vs. Court of Appeals, 195 SCRA 715 (1991); Hualam Construction
and Development Corporation vs. Court of Appeals, 214 SCRA 612 (1992);
Benitez vs. Court of Appeals, 266 SCRA 242 (1997); Felicidad vs. Judge
Villanueva, 139 SCRA 431 (1985); Reyes vs. CA, 38 SCRA 138 (1971); Ramirez
vs. Chit, 21 SCRA 1364 (1967).
15. Decision of the Regional Trial Court dated 30 September 1997, pp. 5-7; Rollo, pp.
43-49, emphasis supplied.
16. 20 Am. Jur., Sec. 16, p. 47.
17. State Prosecutors vs. Muro, 236 SCRA 505 (1994).
18. 245 SCRA 715 (1995).
19. Citing Licmay vs. Court of Appeals, 215 SCRA 1 (1992) and Commander Realty,
Inc. vs. Court of Appeals, 168 SCRA 181 (1988).
20. Vda. de Roxas vs. CA, 63 SCRA 302, 311 (1975).
21. 272 SCRA 141, 159-160 (1997).
22. CA Rollo, p. 317.
23. 174 SCRA 182 (1989).
24. CA Decision dated 10 March 1998, pp. 6-8; Rollo, pp. 31-37.
25. Heirs of Placido Miranda vs. Court of Appeals, 255 SCRA 368 (1996).
26. Punio vs. Go, 296 SCRA 1 (1998).
27. 149 SCRA 183 (1987).
Endnotes
1 (Popup - Popup)
1. CA-G.R. No. 35068, dated April 28, 1995, CA Rollo, p. 66.
2 (Popup - Popup)
2. G.R. No. 123500.
3 (Popup - Popup)
3. Rollo, p. 54.
4 (Popup - Popup)
4. Id., at 67.
5 (Popup - Popup)
5. Id., at 72.
6 (Popup - Popup)
6. CA Records, p. 317.
7 (Popup - Popup)
7. Rollo, pp. 48-49.
8 (Popup - Popup)
8. Id., at 37.
9 (Popup - Popup)
9. Id., at 41.
10 (Popup - Popup)
10. Id., at 15-16.
11 (Popup - Popup)
11. Id., at 82.
12 (Popup - Popup)
12. Id., at 84-85.
13 (Popup - Popup)
13. Santos vs. Santiago, 38 Phil. 575 (1918).
14 (Popup - Popup)
14. De Guzman vs. Court of Appeals, 195 SCRA 715 (1991); Hualam Construction
and Development Corporation vs. Court of Appeals, 214 SCRA 612 (1992);
Benitez vs. Court of Appeals, 266 SCRA 242 (1997); Felicidad vs. Judge
Villanueva, 139 SCRA 431 (1985); Reyes vs. CA, 38 SCRA 138 (1971); Ramirez
vs. Chit, 21 SCRA 1364 (1967).
15 (Popup - Popup)
15. Decision of the Regional Trial Court dated 30 September 1997, pp. 5-7; Rollo, pp.
43-49, emphasis supplied.
16 (Popup - Popup)
16. 20 Am. Jur., Sec. 16, p. 47.
17 (Popup - Popup)
17. State Prosecutors vs. Muro, 236 SCRA 505 (1994).
18 (Popup - Popup)
18. 245 SCRA 715 (1995).
19 (Popup - Popup)
19. Citing Licmay vs. Court of Appeals, 215 SCRA 1 (1992) and Commander Realty,
Inc. vs. Court of Appeals, 168 SCRA 181 (1988).
20 (Popup - Popup)
20. Vda. de Roxas vs. CA, 63 SCRA 302, 311 (1975).
21 (Popup - Popup)
21. 272 SCRA 141, 159-160 (1997).
22 (Popup - Popup)
22. CA Rollo, p. 317.
23 (Popup - Popup)
23. 174 SCRA 182 (1989).
24 (Popup - Popup)
24. CA Decision dated 10 March 1998, pp. 6-8; Rollo, pp. 31-37.
25 (Popup - Popup)
25. Heirs of Placido Miranda vs. Court of Appeals, 255 SCRA 368 (1996).
26 (Popup - Popup)
26. Punio vs. Go, 296 SCRA 1 (1998).
27 (Popup - Popup)
27. 149 SCRA 183 (1987).

28 Catungal v. Hao

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28 Catungal v. Hao

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FIRST DIVISION

[G.R. No. 134972. March 22, 2001.]

SPS. ERNESTO and MINA CATUNGAL, petitioners, vs. DORIS

Gancayco Balasbas & Associates for petitioners.

A three-storey building, located in a fully developed commercial/business

The plaintiff in an ejectment case is entitled to damages by his loss of the

1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; EJECTMENT

2. ID.; EVIDENCE; JUDICIAL NOTICE, CONSTRUED. — Judicial

3. ID.; SPECIAL CIVIL ACTIONS; EJECTMENT; RENT; COURTS

4. ID.; ID.; ID.; ID.; COURTS MAY TAKE JUDICIAL NOTICE OF

5. ID.; EVIDENCE; BURDEN OF PROOF; BURDEN TO SHOW

6. ID.; ACTIONS; ESTOPPEL; PARTY ESTOPPED FOR FAILURE

7. ID.; RULES ON SUMMARY PROCEDURE; DO NOT GOVERN

8. ID.; SPECIAL CIVIL ACTIONS; EJECTMENT; EXECUTION

9. ID.; ID.; ID.; BACK RENTALS; 12% INTEREST THEREON. —

The antecedents of this case are as follows:

On December 28, 1972, the original owner, Aniana Galang, leased a

On August 24, 1984, Galang and respondent executed a contract of lease on

Meanwhile, the lease agreement between BPI and Galang expired.

Upon expiration of the lease agreements, petitioner spouses sent demand

The institution of the ejectment cases prompted respondent to file an action

On January 22, 1997, the MeTC of Parañaque rendered a Decision, the

IN VIEW OF THE FOREGOING, judgment is hereby rendered

Petitioners filed a motion for clarificatory or amended judgment on the

IN VIEW OF THE FOREGOING, the Decision of this Court is

Petitioners sought reconsideration of the above order, praying that

Respondent, on the other hand, filed a notice of appeal.

Instead of resolving the motion for reconsideration, on May 7, 1997, the

Considering the Motion for Reconsideration of the Order of this

On September 30, 1997, the RTC of Parañaque, Branch 259, rendered a

IN THE LIGHT OF THE FOREGOING, the appealed decision,

In her Motion dated October 6, 1997, respondent sought a reconsideration

WHEREFORE, the decision appealed from is hereby MODIFIED by

WHEREFORE, the decision appealed from is hereby MODIFIED by

IN THE ASSAILED DECISION, THE HONORABLE COURT OF

IN THE ASSAILED DECISION, THE HONORABLE COURT OF

We required respondent to comment on the petition. 11(11) In her

1. DID THE RESPONDENT APPELLATE COURT

2. DID THE RESPONDENT APPELLATE COURT

3. DID THE APPELLATE COURT COMMITTED [SIC] ANY

Petitioners, in the main, posit that there should be a reinstatement of the

At the outset, it should be recalled that there existed no consensual

We cannot allow the respondent to insist on the payment of a measly sum

Finally, worth mentioning here as parallel is [the] ruling of the

The Court of Appeals merely anchored its decision to reduce the

Considering the Motion for Reconsideration of the Order of this

In order that this case will be immediately forwarded to the Regional

. . . In fine, these are acts amounting to a waiver of the irregularity of

As regard the issue on the propriety of the increase in the award of

xxx xxx xxx

Neither petitioner nor respondent spouses assailed the above order.

Hence, while the entrenched procedure in this jurisdiction is that a

The argument by respondent is misleading. Simply because the case was

SECTION 1. SCOPE — THIS RULE SHALL GOVERN

(1) CASES OF FORCIBLE ENTRY AND UNLAWFUL

Finally, respondent questions why petitioners would want to reinstate the

In order to avoid further injustice to a lawful possessor, an immediate

The Court also awards interest in favor of petitioners. In Eastern Shipping

xxx xxx xxx

II With regard particularly to an award of interest in the concept

1. When the obligation is breached, and it consists in the payment

The back rentals in this case being equivalent to a loan or forbearance of

WHEREFORE, premises considered, judgment is hereby rendered in favor

2. Legal interest of twelve percent (12%) per annum on the foregoing