Regulus Dev. Inc. vs. De la Cruz, G.R. No. 198172, January 25, 2016

The petitioner is the owner of an apartment (San Juan Apartments) located at San Juan Street, Pasay City. Antonio dela Cruz (respondent) leased two units (Unit 2002-A and Unit 2002-B) of the San Juan Apartments in 1993 and 1994. The contract of lease for each of the two units similarly provides a lease period of one (1) month, subject to automatic renewals, unless terminated by the petitioner upon written notice.

The petitioner sent the respondent a letter to terminate the lease of the two subject units. Due to the respondent’s refusal to vacate the units, the petitioner filed a complaint for ejectment before the Metropolitan Trial Court (MTC) of Pasay City, Manila. The MTC resolved the case in the petitioner’s favor and ordered the respondent to vacate the premises and pay the rentals due until the respondent actually complies.

The respondent appealed to the Regional Trial Court (RTC). Pending appeal, the respondent consigned the monthly rentals to the RTC due to the petitioner’s refusal to receive the rentals. The RTC affirmed the decision of the MTC in toto and denied the motion for reconsideration filed by the respondent.

In a Petition for Review filed by the respondent, the CA reversed the lower courts’ decisions and dismissed the ejectment case. The dismissal of the case became final and executory.

The petitioner filed a motion (to withdraw funds deposited by the defendant-appellant as lessee) praying for the withdrawal of the rentals consigned by the respondent with the RTC. The RTC granted the petitioner’s motion. The RTC explained that the effect of the complaint’s dismissal would mean that there was no complaint filed at all. The petitioner, however, is entitled to the amount of rentals for the use and occupation of the subject units, as provided in the executed contracts of lease and on the basis of justice and equity.
CA affirmed the order RTC.

The petitioner returned to the RTC and moved for the issuance of a writ of execution to allow it to proceed against the supersedeas bond the respondent posted, representing rentals for the leased properties from May 2001 to October 2001, and to withdraw the lease payments deposited by respondent from November 2001 until August 2003. The RTC granted the motion.

Petitioner assailed the said order in the CA. CA reversed the decision of the RTC explaining that the RTC has no jurisdiction to levy the property of the respondent.

Whether the RTC has jurisdiction when it allowed the withdrawal of the bond and the execution of the levied property of the respondent.

Yes, the RTC exercised its equity jurisdiction. The appellate jurisdiction of courts is conferred by law. The appellate court acquires jurisdiction over the subject matter and parties when an appeal is perfected. On the other hand, equity jurisdiction aims to provide complete justice in cases where a court of law is unable to adapt its judgments to the special circumstances of a case because of a resulting legal inflexibility when the law is applied to a given situation. The purpose of the exercise of equity jurisdiction, among others, is to prevent unjust enrichment and to ensure restitution.

The RTC’s equity jurisdiction is separate and distinct from its appellate jurisdiction on the ejectment case. The RTC could not have issued its orders in the exercise of its appellate jurisdiction since there was nothing more to execute on the dismissed ejectment case. As the RTC orders explained, the dismissal of the ejectment case effectively and completely blotted out and cancelled the complaint. Hence, the RTC orders were clearly issued in the exercise of the RTC’s equity jurisdiction, not on the basis of its appellate jurisdiction.


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