SECOND DIVISION

February 18, 2019

G.R. No. 212979

MA. ANTONETTE LOZANO, Petitioner
vs.
JOCELYN K. FERNANDEZ, Respondent

D E C I S I O N

REYES, J. JR., J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the November 22, 2013 Decision1 and the June 13, 2014 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 125107, which affirmed the November 3, 2011 Decision3 in Civil Case No. 38-0-2011 of the Regional Trial Court (RTC), Branch 72, Olongapo City.

The present controversy revolves around a parcel of land and its improvements in CM Subdivision, New Cabalan, Olongapo City currently declared for taxation purposes under the name of respondent Jocelyn K. Fernandez (Fernandez).

Respondent's position

On December 11, 2006, petitioner Ma. Antonette Lozano (Lozano) executed a Waiver and Transfer of Possessory Rights (Waiver)4 over the subject property in favor of Fernandez. After the execution of the document, Fernandez continued to tolerate Lozano's possession over the property. On July 15, 2009, she sent a demand letter5 to Lozano ordering her to vacate the premises. Because Lozano failed to leave the property, Fernandez was constrained to file an action for unlawful detainer against her before the Municipal Trial Court in Cities, Branch 2, Olongapo City (MTCC).6

Petitioner's position

Since 1996, Lozano had owned and possessed the subject property. She never recalled signing any Waiver in Fernandez's favor. Lozano explained that Fernandez duped her into signing a blank document, which was later converted to a Waiver. She denied having appeared before a notary public to notarize the said document. Lozano claimed that the real contract between her and Fernandez was a loan with mortgage as evidenced by the fact that she remained in possession of the property even after the execution of the said Waiver and that she had issued checks in payment of the loan. She pointed out that Fernandez was engaged in the business of lending imposing unconscionable interest and was in the practice of securing collateral from the lendee.7

MTCC Decision

In its February 16, 2011 Decision,8 the MTCC dismissed Fernandez's complaint for unlawful detainer. It explained that Fernandez only filed the present case for ejectment three years after she gained possessory rights over the property. The MTCC expounded that Fernandez's cause of action had prescribed as the complaint was filed after one year from the time the possession became unlawful. It added that Fernandez failed to prove that she tolerated Lozano's possession over the property. Thus, it disposed:

WHEREFORE, in view of the foregoing, judgment is hereby rendered in the following manner:

1. Ordering the dismissal of the complaint of the plaintiff for lack of cause of action and for want of merit; [and]

2. Ordering the Plaintiff to pay the Defendant reasonable attorney's fees in the amount of P20,000.00.

SO [ORDERED].9

Aggrieved, Fernandez appealed to the RTC.

RTC Decision

In its November 3, 2011 Decision, the RTC granted Fernandez's appeal. It explained that after the execution of the Waiver on December 11, 2006, Lozano's possession over the property was merely tolerated by Fernandez. The RTC noted that after the ten-day period to vacate stated in the demand letter, Lozano's continued possession over the land became illegal. It expounded that tolerance is presumed from the fact that after the execution of the Waiver, Fernandez did not ask Lozano to vacate the land. Thus, the RTC concluded that it was Fernandez who was entitled to attorney's fees under Article 2208 of the Civil Code. In addition, it awarded rentals in favor of Fernandez as a consequence of her being deprived of possession over the parcel of land. The RTC disposed:

WHEREFORE
, premises considered, the appeal is hereby GRANTED. The Decision dated February 16, 2011 of the Municipal Trial Court in Cities, Branch 2, Olongapo City in Civil Case No. 7238 for unlawful detainer is hereby RECONSIDERED, REVERSED AND SET ASIDE. Accordingly, judgment is hereby rendered in favor of the plaintiff and against the defendant, ordering:

1. The defendant and all persons claiming rights under it to vacate the premises located at CNI Subdivision, New Cabalan, Olongapo City it is presently occupying;

2. The defendant to pay plaintiff the amount of five thousand (₱5,000.00) pesos per month as rentals for use of the property from July 20, 2009 up to the time it actually vacates the place;

3. The defendant to pay the plaintiff the amount of twenty thousand (₱20,000.00) pesos as attorney's fees; and

4. To pay the cost of litigation.

SO ORDERED.10