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G.R. No.

124292 December 10, 1996

GREGORIO C. JAVELOSA, petitioner,


vs.
COURT OF APPEALS, SPOUSES CORAZON J. DE LEON & MELVIN DE
LEON, SPOUSES KRISTINE SOLINAP & ALFONSO SOLINAP, MARLINA J.
BALLEZA, MYRNA J. SERVANDO, respondents.

PUNO, J.:p

The subject land, with an area of 2,061 square meters, situated in Jaro, Iloilo
City, was originally owned by petitioner Gregorio Javelosa. Sometime in the 70's,
petitioner mortgaged said land to Jesus Jalbuena to secure several loans.
Petitioner failed to pay his loans and Jalbuena, as mortgagee, foreclosed on the
land and purchased it as highest bidder at the foreclosure sale.

During the one-year period of redemption, petitioner-mortgagor filed an action


against the mortgagee at the Regional Trial Court (RTC) of Iloilo City to annul the
mortgage contracts and public auction sale (Civil Case No. 16460). 1 He claimed
that the mortgage contracts were illegal and the conduct of the foreclosure sale
was irregular.

While the case was pending, the period of redemption prescribed. Consequently,
the mortgagee consolidated title over the land, caused the cancellation of the
mortgagor's title and the issuance of a new title in his name. Thereafter,
petitioner obtained an Order 2 from the RTC in Civil Case No. 16460 restraining
the mortgagee from further effecting the foreclosure sale of the property.

In the early part of December 1986, the mortgagee divided the subject land
among his married daughters (private respondents herein). On December 27,
1986, the mortgagee died. He was substituted by his heirs, private respondents,
in the pending RTC case for annulment of mortgage and foreclosure sale. On
January 19, 1987, title to the subject was issued in the names of private
respondents.

In the meantime, the RTC case for annulment of mortgage and foreclosure sale
continued to drag on. On June 1, 1993, private respondents, as registered
owners, sent a letter to petitioner-mortgagor demanding that the vacate the
subject premises within ten (10) days from receipt thereof. Despite receipt of the
demand letter on June 4, 1993, petitioner-mortgagor refused to vacate said lot.
Thus, on August 6, 1993, private respondents filed a complaint for illegal detainer
before the Municipal Trial Court (MTC) in Cities, Iloilo City, and sought to eject
petitioner from the premises.
Petitioner, in his Answer, 3 asserted his ownership over the disputed land. He
claimed that he had a TCT in his name but that the mortgagee (father and
predecessor-in-interest of private respondents), in bad faith, was able to cause
his title to be cancelled and a new title issued in his name despite the pendency
of the RTC case questioning the award of the subject land to the mortgagee in
the foreclosure proceedings. Thus, petitioner denied he was illegally occupying
the land. He claimed that he was legally entitled to the continued possession
thereof by virtue of pending legal incidents in his RTC case for annulment of
mortgage and foreclosure sale, from which transactions the mortgagee
(predecessor-in-interest of private respondents) derived his title.

The MTC decided the unlawful detainer case in favor of private respondents and
ordered petitioner to vacate the premises and pay reasonable rental. The MTC
held that the pendency of the case for annulment of mortgage in the RTC would
not abate the proceedings in the unlawful detainer case filed before it for the
issues in these cases are distinct from each other. 4

Petitioner elevated the case to the RTC. He alleged that the ejectment case was
improperly filed with the MTC for private respondents (plaintiffs therein) should
have prayed instead for the issuance of a writ of possession with the RTC where
the case for annulment of mortgage and foreclosure sale was pending.

Without ruling on the propriety of the filing of the ejectment case before the MTC,
the RTC reversed the MTC decision on a different ground. It held that the
complaint was filed out of time for under Section 1, Rule 70 of the Rules of Court,
an unlawful detainer case must be filed within one year from the time title was
issued in private respondents' name, i.e., from January 19, 1987, and not from
the last demand to vacate made by private respondents (plaintiffs therein). Thus,
the ejectment case initiated on August 6, 1993 was filed beyond the one-year
prescriptive period. The RTC dismissed the ejectment case. 5

In their appeal to the Court of Appeals, private respondents alleged that the RTC
erred in holding that the complaint for unlawful detainer was filed out of time. The
Court of Appeals reversed the RTC decision and reinstated the decision of the
MTC. It held that the complaint for unlawful detainer was filed on time for the
prescriptive period should be counted not from the issuance of title in the name
of plaintiffs (private respondents herein), but from the date of the last demand to
vacate made against the defendant. Moreover, the fact that private respondents
were never in prior physical possession of the subject land is of no moment for
prior physical possession is necessary only in forcible entry cases. The Court of
Appeals thus ordered the petitioner (defendant in the ejectment case) to vacate
the premises and pay reasonable rentals. 6

Hence, this petition for review on certiorari.


In this Court, petitioner does not raise the issue regarding the timeliness of the
filing of the ejectment case against him. For the first time, he puts in the issue the
nature of the suit filed against him. He contends that the complaint filed before
the MTC is not an unlawful detainer suit but one for accion publiciana cognizable
by the RTC. Petitioner argues that the reading of the complaint reveals there was
no allegation as to how entry on the land was made by petitioner-mortgagor or
when the latter unlawfully took possession of said land. Citing the case of Sarona
v. Villegas, 7 petitioner contends that the omission of these jurisdictional facts
stripped the MTC of jurisdiction over the case.

The petition is devoid of merit.

It is settled that jurisdiction of courts over the subject matter of the litigation is
determined by the allegations in the complaint. It is equally settled that an error in
jurisdiction can be raised at any time and even for the first time on appeal. 8

The issue of jurisdiction in the case at bar depends on the nature of the case filed
by private respondents in the MTC. If it is an unlawful detainer case, the action
was properly filed with the MTC. However, if the suit is one for accion publiciana,
jurisdiction is with the RTC and the complaint should be dismissed. To resolve
the issue, we should examine the specific allegations made by private
respondents in their complaint. The complaint for unlawful detainer 9 contained
the following material allegations, viz:

xxx xxx xxx

2. Plaintiffs (private respondents) are the registered owners of a parcel of


land . . . covered by Transfer Certificate of Title No.
T-74417 . . .;

3. Defendant (petitioner-mortgagor) has been illegally occupying the above


described property without the consent of the herein plaintiffs, thus unlawfully
withholding possession of the same from them who are the owners and the ones
entitled to the physical possession thereof;

4. On June 1, 1993, plaintiffs . . . sent a letter dated May 26, 1993 to the
defendant demanding that he vacate the premises within ten days from receipt of
the said letter . . .;

xxx xxx xxx

6. The said letter was received by the defendant on June 4, 1993 . . .;

xxx xxx xxx

8. Having received the demand to vacate the property in question, defendant is


now unlawfully withholding possession of the . . . property from the plaintiffs who
are entitled to the physical possession thereof;
9. As a consequence of the refusal of the defendant to vacate the premises . . .
the plaintiffs were constrained to file this action for illegal detainer against him in
order to take away the physical possession thereof from them and to place them
in de facto possession of the said property;

xxx xxx xxx

Clearly, private respondents (as plaintiffs therein) alleged in their complaint that
they are the registered owners of the subject land and therefore, entitled to
possession thereof; that petitioners were illegally occupying the premises without
their consent and thus unlawfully withholding possession from them; and, despite
receipt of their demand to vacate the premises, petitioner refused to leave the
property. On the face of the complaint, it also appears that private respondents
were seeking to recover merely the physical possession or possession de facto
of the subject land. Private respondents did not allege the incidents respecting
the mortgage of the land and the pending RTC case questioning the mortgage
contract as the issue involved therein is ownership which has no place in an
ejectment case. In fine, the allagations in the complaint make out a case for
unlawful detainer. We have ruled in a long line of cases 10 that "in an action for
unlawful detainer, a simple allegation that defendant is unlawfully withholding
possession from plaintiff is . . . sufficient for the words "unlawfully withholding"
imply possession on the part of defendant, which was legal in the beginning,
having no other source than a contract, express or implied, possession which
has later expired as a right and is being withheld by defendant." Thus, in the case
at bar, private respondents' allegation in their complaint that petitioner was
unlawfully withholding possession of the land from them is sufficient to make out
a case for unlawful detainer.

In Co Tiamco v. Diaz, 11 the Court emphasized that "the principle underlying the
brevity and simplicity of pleadings in forcible entry and unlawful detainer cases
rests upon considerations of public policy. Ejectment cases are summary in
nature for they involve perturbation of social order which must be restored as
promptly as possible and, accordingly, technicalities or details of procedure
should be carefully avoided."

The ruling in the Sarona case 12 cited by petitioner i.e., that a complaint for
unlawful detainer should alleged when and how entry on the land was made by
the defendant, finds no application to the case at bar. In Sarona, the main issue
was the timeliness of the filing of the complaint before the MTC. In forcible entry
cases, the prescriptive period is counted from the date of defendant's actual entry
on the land; in unlawful detainer, from the date of the last demand to vacate.
Hence, to determine whether the case was filed on time, there was a necessity to
ascertain whether the complaint was one for forcible entry or for unlawful
detainer. In light of these consideration, the Court ruled that since the main
distinction between the two actions is when and how defendant entered the land,
the determinative facts should be alleged in the complaint. Thus, in Sarona, the
jurisdiction of the MTC over the complaint was never issue for whether the
complaint was one for forcible entry or unlawful detainer, the MTC had
jurisdiction over it. The case at bar is different for at issue is the jurisdiction of the
MTC over the unlawful detainer case for petitioner (defendant therein) asserts
that the case is one for accion publiciana cognizable by the RTC.

Petitioner likewise insists that he is entitled to the physical possession of the


property since he has been in actual, continuous possession thereof as owner-
mortgagor. He contends that private respondents have never been in actual
physical possession of the land since they have not prayed for the issuance of a
writ of possession with the RTC where the case assailing the sale of the land
was pending and where the parties' adverse claims of ownership are being
litigated.

We find petitioner's contentions untenable.

Again, it is settled that prior physical possession is indispensable only in actions


for forcible entry but not in unlawful detainer. Since we have ruled that the MTC
case filed against petitioner is one for unlawful detainer, petitioner's prior
possession of the land is of no moment. Private respondents are entitled to its
passession from the time title was issued in their favor as registered owners. An
action for unlawful detainer may be filed when possession by a landlord, vendor,
vendee or other person against whom the possession of any land or building is
unlawfully withheld after the expiration or termination of their right to hold
possession, by virtue of a contract, express or implied. 13

Under the Rules, if the mortgaged property is not redeemed within one year from
the foreclosure sale, the purchaser at public auction is entitled to possession of
the property. 14 To obtain possession, the vendee or purchaser may either ask for
a writ of possession or bring an appropriate independent action, such as a suit
for ejectment, which private respondents did. The RTC case assailing the public
auction sale of the property and seeking annulment of mortgages did not
preclude the filing of an ejectment case against petitioner. 15 We have consistently
ruled that the pendency of an action for annulment of sale and reconveyance
(which necessarily involves the issue of ownership) may not be successfully
pleaded in abatement of an action for ejectment, the issue in the latter being
merely physical possession. 16 To be sure, private respondents' most effective
remedy was to file a separate action for unlawful detainer against petitioner. 17
They cannot ask for a writ of possession from the RTC where the case for
annulment of mortgage and foreclosure sale is pending because after the
mortgagee was able to consolidate his title on the land and a new title issued in
his name, petitioner was able to obtain an Order 18 from the RTC directing the
mortgagee, (predecessor-in-interest of private respondents) to desist from further
enforcing the foreclosure proceedings.

The case of Joven v. Court of Appeals 19 cited by petitioner is not on all fours with
the case at bar. In Joven, DBP as mortgagee was not able to consolidate its title
over the foreclosed land nor cause the cancellation of title in the mortgagor's
name. Although the title was still in the name of the mortgagor, DBP sold the land
to private respondents and the latter, without first securing a court order, took the
law into their own hands and entered said land. Hence, it was the mortgagor who
filed and successfully maintained an action for forcible entry against private
respondents, the transferees of the mortgagee.

The factual mould of the case at bar is different. The mortgagee (predecessor-in-
interest of private respondents) was able to consolidate his ownership over the
foreclosed land, cause the cancellation of title in the name of petitioner-
mortgagor and the issuance of a new title in his own name. It was this title that he
passed on to his daughters, private respondents herein. As aforestated, a
restraining order was issued by the RTC where the case for annulment of
foreclosure sale is pending after the mortgagee had consolidated his ownership
over the land, hence, private respondents were left with no choice but to file a
separate and independent action for unlawful detainer to recover physical
possession of the property. Unlike in the Joven case, private respondents did not
take the law into their own hands and entered the property without the benefit of
a court order. They sought the aid of the court precisely to settle the issue of
physical possession or possession de facto of the land when they filed the
ejectment case with the MTC.

We find that private respondents have adequately proved that they are entitled to
possess the subject land as the registered owners thereof. The age-old rule is
that the person who has a torrens title over a land is entitled to possession
thereof. 20 Except for the bare claim that the title of private respondents was
obtained in bad faith, petitioner has pointed to no right to justify his continued
possession of the subject property.

Be that as it may, we reiterate the rule that the award of possession de facto over
the subject land to private respondents would not constitute res judicata as to the
issue of ownership thereof, which issue is still being litigated before the RTC of
Iloilo City where the case for annulment of mortgages and foreclosure
proceeding is pending.

IN VIEW WHEREOF, the petitioner is DENIED. The Decision of the Court of


Appeals, dated January 17, 1996, is AFFIRMED in toto. No costs.

SO ORDERED.

G.R. No. 118284 July 5, 1996

SPOUSES MAMERTO REFUGIA and FELIZA PAYAD-REFUGIA, RODOLFO


REFUGIA, and CANDELARIA REFUGIA, petitioners,
vs.
COURT OF APPEALS and SPOUSES ARTURO REFUGIA and AURORA
TIMBANG-REFUGIA, respondents.

REGALADO, J.:p

This is an appeal by certiorari from the decision 1 of respondent Court of Appeals


in CA-G.R. No. 34647 promulgated on December 9, 1994 which reversed and
set aside the judgment 2 dated April 29, 1994 of the Regional Trial Court of
Valenzuela, Branch 172, in Civil Case No. 4347-V-94 affirming with some
modifications the decision 3 rendered by the Metropolitan Trial Court of
Valenzuela, Branch 81, in Civil Case No. 6089 on March 4, 1994.

The records en bloc of the aforesaid cases show that private respondent-
spouses Arturo Refugia and Aurora Timbang-Refugia are the registered owners
of a parcel of land and a duplex apartment building constructed thereon located
at No. 16 Meriales Street, Marulas, Valenzuela, as evidenced by Transfer
Certificate of Title No. 218979. Apparently, said title was issued pursuant to a
Deed of Absolute Sale executed on September 11, 1975 in favor of respondent
Arturo Refugia, but the purchase price of P20,000.00 was reportedly advanced
by his father, herein petitioner Mamerto Refugia. Thereafter, respondent Arturo
Refugia obtained a housing loan from the Social Security System, using the land
as collateral to secure payment thereof. In 1976, after the construction of the
duplex apartment building, herein petitioners immediately began to occupy one
door while respondents stayed in the other unit.

It appears, however, that things did not turn out well between petitioners and
private respondents, especially between petitioner Feliza Refugia and her
daughter-in-law, Aurora, such that in February of 1993, petitioners were told by
private respondents to vacate the unit that they were occupying because,
according to private respondents, the family of one of their children who is
married needed a place of their own. Petitioners refused to leave, claiming that
they own the unit they are occupying by reason of the fact that it was actually
Mamerto Refugia who bought the lot on which the duplex apartment stood.
Because of this, the matter was brought before the barangay court of conciliation.
No amicable settlement having been reached between the parties, private
respondents instituted an action for ejectment on October 20, 1993 in the
Metropolitan Trial Court of Valenzuela, Branch 81.

On March 4, 1994, the court a quo rendered judgment dismissing the complaint
for ejectment based on its finding that herein petitioners are the lawful occupants
of the premises. Thus, it held that:

Like in any other ejectment suit, the pivotal issue is whether the defendants are
unlawfully with(h)olding possession of the premises in question. The question
that perturbs the mind of the Court which is not fully explained by plaintiffs is
whether the stay of the defendants in the premises was indeed by plaintiffs'
tolerance alone. From the evidence on hand the Court is more disposed to
believe the position of the defendants that it was Mamerto who bought the lot
where the duplex apartment was constructed by plaintiff Arturo Refugia. As
stated earlier, the amount of P20,000.00 was withdrawn on September 11, 1975,
the date the Deed of Absolute Sale (Exhibits F and F-1) was executed. The
consideration of the sale is for P20,000.00. The fact that a two-door apartment
was indeed constructed likewise regenerates the claim of defendants that they
shall be co-owners of the lot and shall dwell in one of the doors of said
apartment. If the averment of plaintiffs that they exclusively own the property is
not to be trusted — what have motivated them to construct a two-door apartment
instead of a single and a larger house? These facts are small tributaries that lead
us to the bigger lake of truth, that is, the stay of the defendants in the premises is
not on the basis of mere tolerance.

It may also be pointed out that the certification to file action (Exhibit E) issued by
the Barangay is for Land Dispute not for ejectment. (Emphasis ours) In the
handwritten transcripts of the proceedings in the barangay, it appears that this
case is merely an off-shoot of a misunderstanding between plaintiff Aurora
Refugia and her in-laws. It was admitted by Aurora that she offered to pay the a
mount of P20,000.00 but that the defendants refused to accept the same. Then
and there plaintiff Aurora said that she would prefer to sell the unit to another and
that out of the proceeds of the sale, she will pay the defendants. These
circumstances lead the Court to conclude that it is not true that plaintiffs'
daughter is in need of the premises.

On appeal, the Regional Trial Court of Valenzuela, Branch 172, in its


aforementioned decision, affirmed with modification the judgment of the lower
court by declaring herein petitioners and private respondents co-owners of the lot
and the two-door apartment. Their motion for reconsideration having been
denied, private respondents duly filed a petition for review before respondent
Court of Appeals.

On December 9, 1994, said respondent court rendered its questioned judgment


which reversed and set aside the aforestated decisions of the Metropolitan Trial
Court and the Regional Trial Court, and thereafter ordered petitioners and their
privies to vacate the subject premises and to surrender possession thereof to
private respondents. In so ruling, respondent court declared that the Regional
Trial Court, in the exercise of its appellate jurisdiction over an ejectment case,
had no authority to resolve the issue of ownership and to declare herein
petitioners as co-owners because its power is limited only to a determination of
the issue of possession, that petitioners' bare allegation of ownership cannot
prevail over the transfer certificate of title and deed of sale in favor of private
respondents; and that petitioners have been occupying the subject premises by
mere tolerance.

Hence, this petition wherein petitioners aver that respondent Court of Appeals
erred: (a) in giving due course to respondents' appeal despite the fact that it was
filed beyond the fifteen (15) day reglementary period to appeal; (b) in
disregarding jurisprudence that factual findings of the trial court should not be
disturbed on appeal; (c) in holding that petitioners' claim of co-ownership of the
subject premises is a mere allegation unsupported by any concrete evidence; (d)
in ruling that the issue of ownership, as raised by petitioners, is foreign to the
issue of possession in an ejectment case; and (e) in reversing the decisions of
both lower courts and ordering petitioners' eviction from the disputed premises.

Anent the first issue, petitioners contend that private respondents received a
copy of the decision of the Regional Trial Court on May 4, 1994 and thus they
had until May 19, 1994 within which to file a petition for review before the Court
of Appeals. However, private respondents filed instead a Motion for
Reconsideration which was denied by the Regional Trial Court in its Order dated
June 21, 1994. Petitioners argue that since the motion for reconsideration is a
prohibited pleading under the Rule on Summary Procedure and that the filing
thereof did not interrupt the running of the prescriptive period, the petition for
review which was filed by private respondents only on July 21, 1994 was already
way beyond the 15-day reglementary period and should not have been given due
course by respondent court.

In the case of Jakihaca vs. Aquino, et al., 4 this Court categorically ruled that:

The Rule on Summary Procedure applies only in cases filed before the
Metropolitan Trial Court and Municipal Trial Courts, pursuant to Section 36 of
Batas Pambansa Blg. 129. Summary procedures have no application to cases
before the Regional Trial Courts. Hence, when the respondents appealed the
decision of the Municipal Trial Court to the Regional Trial Court, the applicable
rules are those of the latter court.

It is thus settled that a motion for reconsideration may be filed from a decision of
the Regional Trial Court in the exercise of its appellate jurisdiction over decisions
of the inferior courts in ejectment cases. Accordingly, this argument of petitioners
has to be rejected.

There is nonetheless appreciable merit in their contention that the petition for
review was belatedly filed in the Court of Appeals. This is because in case of a
judgment or final order of the Regional Trial Court rendered in an appeal from the
judgment or final order of an inferior court, the former may be appealed to the
Court of Appeals through a petition for review within fifteen days from receipt of
said judgment or final order. If a motion for reconsideration is filed, the losing
party has only the remaining period within which to file that petition for review.
The filing, therefore, of a motion for reconsideration has the effect of only
suspending the period to appeal. This rule has been clarified in the case of
Lacsamana, et. al. vs. The Honorable Second Special Cases Division of the
Intermediate Appellate Court, et. al., 5 as follows:

3) APPEALS BY PETITION FOR REVIEW TO THE COURT OF APPEALS

The final judgment or order of a regional trial court in an appeal from the final
judgment or order of a metropolitan trial court, municipal trial court and municipal
circuit trial court, may be appealed to the Court of Appeals through a petition for
review in accordance with Section 22 of BP No. 129 and Section 22 (b) of the
Interim Rules, or to this Court through a petition for review on certiorari in
accordance with Rule 45 of the Rules of Court and Section 25 of the Interim
Rules. The reason for extending the period for the filing of a record on appeal is
also applicable to the filing of a petition for review with the Court of Appeals. The
period for filing a petition for review is fifteen days. If a motion for reconsideration
is filed with and denied by a regional trial court, the movant has only the
remaining period within which to file a petition for review. Hence, it may
necessary to file a motion with the Court of Appeals for extension of time to file
such petition for review. (Emphasis supplied).

It is not disputed that private respondents received a copy of the decision of the
Regional Trial Court of Valenzuela on May 4, 1994, and that their motion for
reconsideration was filed with said court on the fifteenth day of the reglementary
period to appeal, that is, May 19, 1994. In such a case, the rule is that the
aggrieved party has only one day from receipt of the order denying the motion for
reconsideration within which to file a petition for review before the Court of
Appeals. 6 In the case at bar, private respondents received a copy of the order
denying their motion for reconsideration on July 6, 1994, and, without moving for
extension of time, were able to file their petition for review only on July 21, 1994;
hence their appeal was not seasonably perfected. Strictly speaking, therefore,
the appeal should not have been given due course, following the pronouncement
in the case of Miranda vs. Guanzon, et al. 7 to the effect that the requirement
regarding the perfection of an appeal within the reglementary period is not only
mandatory but jurisdictional.

This rule, however, has been relaxed in the latter case of Tijam, et al. vs.
Sibonghanoy, et al. 8 where it was held that a party, after voluntarily submitting a
cause, is estopped from attacking the jurisdiction of the court simply because it
thereafter obtained an adverse decision on the merits. The Court explained
therein that the "party is barred from such conduct not because the judgment or
order of the court is valid and conclusive as an adjudication, but for the reason
that such a practice cannot be tolerated — obviously for reasons of public policy."
It will be noted that the jurisdictional issue involved in the instant case was raised
only for the first time in the present petition for review on certiorari. The lack or
absence of appellate jurisdiction was never questioned by petitioners either in
their Comment 9 submitted with respondent court or in their Motion to Dismiss
Appeal 10 which was grounded solely on the fact that the petition for review filed
before said court was not verified.

Despite several opportunities to raise the issue of jurisdiction in the Court of


Appeals, petitioners did not challenge its appellate jurisdiction and did so only
after an adverse decision was rendered against them. To be more precise, they
raised the issue of jurisdiction, for the nullification of the decision of the Court of
Appeals, when the case was already on appeal before this Court. They are now
barred from doing so under the doctrine of estoppel by laches. 11 Additionally,
having participated actively in the proceedings before the appellate court,
petitioners can no longer question its authority. 12

The main issue in this case demands the determination of whether the
Metropolitan Trial Court, as well as the Regional Trial Court in the exercise of its
appellate jurisdiction, have jurisdiction to resolve the issue of ownership in an
action for unlawful detainer where the issue of possession cannot be resolved
without deciding the question of ownership. In the affirmative, it becomes
necessary to delineate the extent and legal effect of such adjudication.

Under Republic Act No. 296, or the Judiciary Act of 1948, as amended, the
jurisdiction of the then municipal and city courts over actions for forcible entry
and unlawful detainer was defined as follows:

Sec. 88. Original jurisdiction in civil cases. — . . . In forcible entry and detainer
proceedings, the municipal judge or judge of the city court shall have original
jurisdiction, but the said municipal judge or city judge may receive evidence upon
the question of title therein, whatever may be the value of the property, solely for
the purpose of determining the character and extent of possession and damages
for detention. In forcible entry proceedings, he may grant preliminary injunctions,
in accordance with the provisions of the Rules of Court, to prevent the defendant
from committing further acts of dispossession against the plaintiff. (As amended
by Republic Acts Nos. 2613 and 3828).

The law was subsequently amended by Republic Act No. 5967 13 which vested in
the city courts special jurisdiction to resolve the issue of ownership in conjunction
with the issue of possession whenever the question of ownership is brought in
issue by the pleadings, thus:

Sec. 3. Besides the civil cases over which the City Courts have jurisdiction under
Section eighty-eight of Republic Act Numbered Two hundred ninety-six, as
amended, it shall likewise have concurrent jurisdiction with the Court of First
Instance over the following:

xxx xxx xxx

(c) In ejection cases where the question of ownership is brought in issue in the
pleadings. The issue of ownership shall therein be resolved in conjunction with
the issue of possession.

This special jurisdiction of city courts was differentiated from the power ordinary
accorded the inferior courts to receive evidence of title only for the purpose of
determining the character or extent of the possession in dispute. This Court had
the occasion to apply and interpret the aforequoted statutory provision in Pelaez
vs. Reyes, et al. 14 which raised the issue of whether a decision of a city court in
an ejectment case involving the question of ownership was appealable to the
Regional Trial Court or to the Court of Appeals, in this wise:
In the light of these provisions, petitioner insists that respondents should have
appealed to the Court of First Instance. Specifically, his contention is that the
inclusion of the issue of ownership in the pleadings did not change the character
of the proceeding as an action of unlawful detainer over which city and municipal
courts have original exclusive jurisdiction. He claims that his contention is
supported by the very provision of Section 3, just quoted, to the effect that when
ownership is brought in issue in the pleadings in an ejection case before the city
courts, said courts are to resolve the issue of ownership only "in conjunction with
the issue of possession." In other words, he posits that since the action is one of
unlawful detainer, the main issue to be settled by the city court remains to be
possession, and that to resolve the issue of ownership "in conjunction with the
issue of possession" is not the same as resolving it in a judicial litigation where it
is the sole issue.

We are not impressed. Regardless of the juridical value of the significance


petitioner is trying to thus draw from the rather peculiar language of the statute,
We are of the considered opinion that the evident import of Section 3 above is to
precisely grant to the city courts concurrent original jurisdiction with the courts of
first instance over the cases enumerated therein, which include "ejection cases
where the question of ownership is brought in issue in the pleading." To sustain
petitioner's contention about the meaning of the last phrase of paragraph (c) of
said section regarding the resolution of the issue of ownership "in conjunction
with the issue of possession" is to disregard the very language of the main part of
the section which denotes unmistakably a conferment upon the city courts of
concurrent jurisdiction with the courts of first instance over ejection cases in
which ownership is brought in issue in the pleadings. It is to Us quite clear that
the fact that the issue of ownership is to be resolved "in conjunction with the
issue of possession" simply means that both the issues of possession and
ownership are to be resolved by the city courts. And the jurisdiction is concurrent
with the Courts of First Instance precisely because usually questions of title are
supposed to be resolved by superior courts. In other words, this grant of special
jurisdiction to city courts is to be distinguished from the power ordinarily accorded
to municipal courts to receive evidence of title only for the purpose of determining
the extent of the possession in dispute.

It being clear, therefore, that in the main ejection case, . . . , the issue of
ownership is involved as shown by the pleadings therein filed by the parties, and
that under Section 3 of Republic Act 5967, said city court exercised original
jurisdiction over the same concurrently with the Court of First Instance of Misamis
Oriental, the appeal of respondents was rightly made by them to the Court of
Appeals (Emphasis ours.)

However, on August 14, 1981, Batas Pambansa Blg. 129, or the Judiciary
Reorganization Act of 1980, was approved and it redefined the jurisdiction of the
Court of Appeals, the Regional Trial Courts and the inferior courts. Specifically,
the new law modified the power of inferior courts to resolve the issue of
ownership in forcible entry and unlawful detainer cases, subject, however, to the
qualification that a resolution thereof shall not be for the purpose of determining
the issue of possession, to wit:

Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts in Civil Cases. — Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise.
xxx xxx xxx

(2) Exclusive original jurisdiction over cases of forcible entry and unlawful
detainer: Provided, That when in such cases, the defendant raises the question
of ownership in his pleadings and the question of possession cannot be resolved
without deciding the issue of ownership, the issue of ownership shall be resolved
only to determine the issue of possession.

Subsequently, this Court promulgated its Interim Rules and Guidelines in the
implementation of Batas Pambansa Blg. 129, Section 10 of which provides:

10. Jurisdiction in ejectment cases. — Metropolitan trial courts, municipal trial


courts, and municipal circuit trial courts, without distinction, may try cases of
forcible entry and detainer even if the question of ownership is raised in the
pleadings and the question of possession could not be resolved without deciding
the issue of ownership, but the question of ownership shall be resolved only to
determine the issue of possession.

These issuances changed the former rule under Republic Act No. 296 which
merely allowed inferior courts to receive evidence upon the question of title solely
for the purpose of determining the extent and character of possession and
damages for detention, which thereby resulted in previous rulings of this Court to
the effect that if it appears during the trial that the principal issue relates to the
ownership of the property in dispute and any question of possession which may
be involved necessarily depends upon the result of the inquiry into the title, then
the jurisdiction of the municipal or city courts is lost and the action should be
dismissed. With the enactment of Batas Pambansa Blg. 129, the inferior courts
now retain jurisdiction over an ejectment case even if the question of possession
cannot be resolved without passing upon the issue of ownership, with the
express qualification that such issue of ownership shall be resolved only for the
purpose of determining the issue of possession. In other words, the fact that the
issues of ownership and possession de facto are intricately interwoven will not
cause the dismissal of the case for forcible entry and unlawful detainer on
jurisdictional grounds.

The intendment of the law was reinforced by the revision of the former Rule on
Summary Procedures involving special cases before the inferior courts, which
was promulgated pursuant to Section 36 of Batas Pambansa Blg. 129. The old
Rule, which took effect on August 1, 1983, stated that:

Sec. 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.
This Rule was revised pursuant to a resolution of the Court En Banc which took
effect on November 15, 1991, and the aforequoted provision now reads as
follows:

Sec. 1. Scope. — This rule shall govern the summary procedure in the
Metropolitan Trial Courts, the Municipal Trial Courts in Cities, the Municipal Trial
Courts, and the Municipal Circuit Trial Courts in the following cases falling within
their jurisdiction:

A. Civil Cases

(1) All cases of forcible entry and unlawful detainer, irrespective of the amount of
damages or unpaid rentals sought to be recovered. Where attorney's fees are
awarded, the same shall not exceed twenty thousand pesos (P20,000.00).

Under the original Rule, ejectment cases were covered by the summary rules
only where the unpaid rentals do not exceed P20,000.00 and no question of
ownership is involved. As presently formulated, however, all ejectment cases are
now unqualifiedly covered by the summary procedure, which necessarily implies
that even if there is a need to resolve the issued of ownership, such fact will not
deprive the inferior courts of jurisdiction over these cases.

Subsequently, Republic Act No. 7691, entitled "An Act Expanding the Jurisdiction
of the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit
Trial Courts, Amending for the Purpose Batas Pambansa Blg. 129, otherwise
known as the 'Judiciary Reorganization Act of 1980'", was passed and took effect
on April 15, 1994. 15 The jurisdiction of the inferior courts over forcible entry and
unlawful detainer cases as defined under Batas Pambansa Blg. 129 was
retained. In addition, they now exercise limited original jurisdiction over civil
actions involving title to, or possession of, real property or any interest therein
depending on the assessed value and location of the property.

Parenthetically, it might be argued that since inferior courts are anyway vested
with jurisdiction over real actions, then it can very well resolve the issue of
ownership raised in the ejectment case, under the conditions stated in Section
32(3) of Batas Pambansa Blg. 129, as amended by Republic Act No. 7691. It
must not be overlooked, however, that proceedings in ejectment cases are
summary in nature, whereas actions for recovery of ownership require a full-
blown trial on the merits. The difference in the procedure in special civil actions,
like ejectment, and in ordinary civil actions, such as accion reinvindicatoria,
inveigh against the consolidation of said cases or the joinder of the different
causes of action involved. It could also be violative under certain circumstances
of the rule on permissive joinder of causes of action since Section 6 of Rule 2
requires inter alia due observance of the rules on jurisdiction and joinder of
parties, and that said causes of action arise out of the same contract, transaction
or relation between the parties.
As the law on forcible entry and unlawful detainer cases now stands, even where
the defendant raises the question of ownership in his pleadings and the question
of possession cannot be resolved without deciding the issue of ownership, the
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts nevertheless have the undoubted competence to resolve the issue of
ownership albeit only to determine the issue of
possession. 16

On the bases of the foregoing disquisitions, it is clear that prior to the effectivity of
Batas Pambansa Blg. 129, the jurisdiction of inferior courts was confined to
receiving evidence of ownership in order to determine only the nature and extent
of possession, by reason of which such jurisdiction was lost the moment it
became apparent that the issue of possession was intricately interwoven with
that of ownership. The law, as revised, now provides instead that when the
question of possession cannot be resolved without deciding the issue of
ownership, the issue of ownership shall be resolved only to determine the issue
of possession. On its face, the new Rule on Summary Procedure was extended
to include within the jurisdiction of the inferior courts ejectment cases which
likewise involve the issue of ownership. This does not mean, however, that
blanket authority to adjudicate the issue of ownership in ejectment suits has been
thus conferred on the inferior courts.

At the outset, it must here be stressed that the resolution of this particular issue
concerns and applies only to forcible entry and unlawful detainer cases where
the issue of possession is intimately intertwined with the issue of ownership. It
finds no proper application where it is otherwise, that is, where ownership is not
in issue, or where the principal and main issue raised in the allegations of the
complaint as well as the relief prayed for make out not a case for ejectment but
one for recovery of ownership.

In the case of De la Santa vs. Court of Appeals, et al., 17 this Court, in making a
distinction between the reception of evidence and the resolution of the issue of
ownership, held that the inferior court may look into the evidence of title or
ownership and possession de jure insofar as said evidence would indicate or
determine the nature of possession. It cannot, however, resolve the issue of
ownership, that is, by declaring who among the parties is the true and lawful
owner of the subject property, because the resolution of said issue would effect
an adjudication on ownership which is not sanctioned in the summary action for
unlawful detainer. With this as a premise and taking into consideration the
amendment introduced by Batas Pambansa Blg. 129, it may be suggested that
inferior courts are now conditionally vested with adjudicatory power over the
issue of title or ownership raised by the parties in an ejectment suit.

Withal, it will be observed, that the passage of Batas Pambansa Blg. 129 has
spawned seemingly conflicting jurisprudence on the proper interpretation and
application thereof. Thus, in several cases decided by the Court after the
effectivity of this law, regardless of whether the complaint for ejectment was filed
with the inferior court prior thereto or otherwise, it was held that the jurisdiction of
the inferior court is lost and the ejectment case should be dismissed where the
issue of possession cannot be resolved without determining the issue of
ownership. 18 In all of these cases, the Court declared that inferior courts may
only admit evidence and proof of ownership but they cannot adjudicate on the
question of ownership. Conversely, in also not a few instances, the jurisdiction of
the inferior courts to resolve the issue of ownership in order to determine the
issue of possession was upheld by this Court. 19 Apparently, it could have been
some imprecision in language or a misperception of the statutory text which
generated the ostensible doctrinal variance.

After due deliberation, we find and so hold that by virtue of the express mandate
set forth in Section 33(2) of Batas Pambansa Blg. 129, inferior courts have
jurisdiction to resolve the question of ownership raised as an incident in an
ejectment case where a determination thereof is necessary for a proper and
complete adjudication of the issue of possession. Certain guidelines, however,
must be observed in the implementation of this legislative prescription, viz.:

1. The primal rule is that the principal issue must be that of possession, and that
ownership is merely ancillary thereto, in which case the issue of ownership may
be resolved but only for the purpose of determining the issue of possession.
Thus, as earlier stated, the legal provision under consideration applies only
where the inferior court believes and the preponderance of evidence shows that
a resolution of the issue of possession is dependent upon the resolution of the
question of ownership.

2. It must sufficiently appear from the allegations in the complaint that what the
plaintiff really and primarily seeks is the restoration of possession. 20
Consequently, where the allegations of the complaint as well as the reliefs
prayed for clearly establish a case for the recovery of ownership, and not merely
one for the recovery of possession de facto, or where the averments plead the
claim of material possession as a mere elemental attribute of such claim for
ownership, 21 or where the issue of ownership is the principal question to be
resolved, 22 the action is not one for forcible entry but one for title to real property.

3. The inferior court cannot adjudicate on the nature of ownership where the
relationship of lessor and lessee has been sufficiently established in the
ejectment case, 23 unless it is sufficiently established that there has been a
subsequent change in or termination of that relationship between the parties.
This is because under Section 2(b), Rule 131 of the Rules of Court, 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.

4. The rule in forcible entry cases, but not in those for unlawful detainer, is that a
party who can prove prior possession can recover such possession even against
the owner himself. Regardless of the actual condition of the title to the property
and whatever may be the character of his prior possession, if he has in his favor
priority in time, he has the security that entitles him to remain on the property
until he is lawfully ejected by a person having a better right through an accion
publiciana or accion reivindicatoria. 24 Corollarily, if prior possession may be
ascertained in some other way, then the inferior court cannot dwell upon or
intrude into the issue of ownership.

5. Where the question of who has prior possession hinges on the question of
who the real owner of the disputed portion is, the inferior court may resolve the
issue of ownership and make a declaration as to who among the contending
parties is the real owner. 25 In the same vein, where the resolution of the issue of
possession hinges on a determination of the validity and interpretation of the
document of title or any other contract on which the claim of possession is
premised, the inferior court may likewise pass upon these issues. This is
because, and it must be so understood, that any such pronouncement made
affecting ownership of the disputed portion is to be regarded merely as
provisional, hence, does not bar nor prejudice an action between the same
parties involving title to the land. 26 Moreover, Section 7, Rule 70 of the Rules of
Court expressly provides that the judgment rendered in an action for forcible
entry or unlawful detainer shall be effective with respect to the possession only
and in no wise bind the title or affect the ownership of the land or building.

The interpretative rules we have herein adopted are not without justification. It is
our considered opinion that they are more in keeping with the avowed objective
of actions for forcible entry and unlawful detainer which have purposely been
made summary in nature so that there may be a peaceful, speedy and
expeditious means of preventing an alleged illegal possessor of property from
unjustly continuing his possession for a long time, thereby insuring the
maintenance of peace and order in the community, as, otherwise, the party
illegally deprived of possession might feel the despair of long waiting and decide,
as a measure of self-protection, to take the law into his hands and seize the
same by force and violence. 27 And since the law discourages continued
wrangling over possession of property for they involve perturbation of social
disorder which must be restored as promptly as possible, technicalities or details
of procedure which may cause unnecessary delays should accordingly and
carefully be avoided. 28

As a matter of judicial experience, there have been cases where persons who
have failed to adduce any legal ground for their continued stay on property
belonging to another have nonetheless managed to stave off eviction for several
years through the improper use of procedural technicalities. 29 Conformably, if we
were to allow the dismissal of an ejectment case for the reason that the question
of ownership is incidentally involved in determining the question of possession,
we are in effect providing the defendants in ejectment cases with the opportunity
to prolong their occupancy of premises, over which they have ceased to have
any valid possessory right, during the time that an action for recovery of
ownership, which involves a more tedious and lengthy court proceeding, is
actually pending in court.

It is indeed ironic that a forcible entry or unlawful detainer case which is intended
to be disposed of in summary fashion has oftentimes proved to be the most
cumbersome and difficult to decide. It is thus about time that this situation be
remedied if only to contribute to the solution of the worsening problem of court
congestion, by refusing to edify these cases by giving them a full-blown treatment
in all the courts in the judicial structure, and thereby save the courts the
expenditure of precious time and energy which could otherwise be devoted to
more significant and vital litigations. 30

With these considerations in mind, we now proceed to the merits of the present
case. Petitioners claim to be co-owners of the subject premises on the basis of
an alleged verbal agreement between the parties to subdivide the property, as
well as the payment made by petitioner Mamerto Refugia for the purchase of the
lot in the amount of P20,000.00. On the other hand, private respondents' property
rights are supported by sufficient documents and muniments of ownership,
namely, the deed of absolute sale, transfer certificate of title, and building permit
in their names, the regularity in the issuance of which was never controverted nor
put in issue by petitioners.

The Metropolitan Trial Court and the Regional Trial Court are not in accord on
whether to treat the P20,000.00 as a loan or as payment for petitioners' share in
the subject premises, while respondent Court of Appeals believes that the same
is actually a loan. It bears significant notice that petitioners never refuted nor
denied, in any of their pleadings filed in this case from the court of origin and all
the way up to this Court, the allegation that private respondents gave P5,000.00
as partial payment for the loan. No countervailing explanation was advanced by
petitioners why such payment was made to and accepted by them as such.

Furthermore, the allegation of petitioners that there was a verbal agreement to


subdivide the property between them and private respondents is self-serving and
evidentiarily baseless at this stage. In addition, their theory of an "implied trust"
was not raised in issue in the trial court and cannot therefore be raised for the
first time in the present petition. 31 At most, it was merely alluded to in petitioners'
Rejoinder filed with the Court of Appeals, but petitioners never bothered to
expound on or substantiate the same. Consequently, it cannot now be raised as
an assignment of error in the present petition.

In sum, and as held by respondent court, the Regional Trial Court "overstepped
its bounds" in ruling that petitioners and private respondents are co-owners of the
property, which issue should be finally determined in the separate action for
specific performance reportedly pending between the parties. At this juncture,
however, the evidence conduces to a finding that private respondents are in
possession of the premises in the concept of and consequent to their being
owners thereof. Even on such prima facie showing, therefore, private
respondents can maintain the ejectment case involved.

While it may be argued that petitioners were able to prove prior possession,
such, however, is not the issue involved in this action for unlawful detainer. An
action for unlawful detainer is different from a forcible entry case in that the
former involves an act of unlawfully withholding the possession of the land or
building against or from a landlord, vendor or vendee or other person after the
expiration or termination of the detainer's right to hold possession by virtue of a
contract, express or implied, 32 and neither is prior physical possession of the
property by the plaintiff necessary; 33 whereas in the latter, the main issue is one
of priority of possession. 34

In the case at bar, petitioners failed to show that they were legally entitled to
continue occupying the unit in question. On the considerations hereinbefore
detailed, we agree with the position of respondent Court of Appeals that
petitioners would in effect be occupying the premises by mere tolerance. A
person who occupies the land of another at the latter's tolerance or permission,
without any contract between them, is necessarily bound by an implied promise
that he will vacate the same upon demand, failing which a summary action for
ejectment is the proper remedy against him. 35 The status of petitioners is
analogous to that of a lessee or tenant whose term of lease has expired but
whose occupancy continued by tolerance of the owner. 36

It has further been held that such tolerance must be present right from the start of
possession sought to be recovered, to categorize a cause of action as one of
unlawful detainer. 37 Here, it cannot be gainsaid that petitioners' possession was
by mere tolerance of private respondents from the very beginning. At any rate, it
has likewise not been denied by herein petitioners that one of their sons also
owns a residential house where they can live.

Notwithstanding the jurisdiction of the Regional Trial Court, and the Metropolitan
Trial Court for the matter, to qualifiedly resolve the issue of ownership raised in
the present ejectment suit, but their findings thereon being devoid of basis in fact
and in law, respondent Court of Appeals was fully justified in decreeing a reversal
of their judgments.

WHEREFORE, the judgment appealed from is hereby AFFIRMED in toto.

SO ORDERED.

THIRD DIVISION
G.R. No. 158231
BABY ARLENE LARANO,∗
Petitioner,
Present:

YNARES-SANTIAGO, J.,
- versus - Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO, and
NACHURA, JJ.
SPS. ALFREDO CALENDACION
Promulgated:
andRAFAELA T. CALENDACION,∗*

Respondents. June 19, 2007

x--------------------------------------------------x

DECISION

AUSTRIA-MARTINEZ, J.:

cralawBefore the Court is a Petition for Review on Certiorari under Rule 45 of the Revised
Rules of Court assailing the Decision1[1] dated May 13, 2003 of the Court of Appeals (CA) in
CA-G.R. SP No. 68272 which dismissed the complaint for unlawful detainer of Baby Arlene
Larao (petitioner) against Spouses Alfredo and Rafaela Calendacion (respondents).

The factual background of the case is as follows:

cralawPetitioner owns a parcel of riceland situated in Barangay Daniw, Municipality of


Victoria, Laguna covered by TCT No. 175241 of the Register of Deeds of Laguna. On September

*
*
1
14, 1998, petitioner and respondents executed a Contract to Sell whereby the latter agreed to buy
a 50,000-square meter portion of petitioner's riceland for P5Million, with P500,000.00 as down
payment and the balance payable in nine installments of P500,000.00 each, until September
2001.2[2]chanroblesvirtuallawlibrary

cralawPending full payment of the purchase price, possession of the riceland was
transferred to respondents under the condition that they shall account for and deliver the harvest
from said riceland to petitioner.Respondents, however, failed to pay the installments and to
account for and deliver the harvest from said riceland.3[3]

cralawOn March 7, 2000, petitioner sent respondents a demand letter 4[4] to vacate the
riceland within 10 days from receipt thereof, but as her demand went unheeded, she filed on April
5, 2000 a Complaint5[5] against respondents for unlawful detainer before the Municipal Trial
Court (MTC), Victoria, Laguna, docketed as Civil Case No. 826, praying that respondents be
directed to vacate the riceland and to pay P400,000.00 per year from September 1998 until they
vacate, as reasonable compensation for the use of the property, P120,000.00 as attorneys fees, and
P50,000.00 as litigation expenses.6[6]

cralawIn their Answer7[7] dated April 26, 2000, respondents admit the execution of the
Contract to Sell but deny that it contains all the agreements of the parties. They allege that
petitioner has no cause of action against them because the three-year period within which to pay
the purchase price has not yet lapsed; that the MTC has no jurisdiction over the case because the
complaint failed to allege that a demand to pay and to vacate the riceland was made upon them.8
[8]

2
3
4
5
6
7
8
cralawOn August 2, 2001, the MTC rendered a Decision, 9[9] the dispositive portion of
which reads:

WHEREFORE, judgment is hereby rendered ordering defendants, as


follows:

1.) To immediately vacate the premises in question;

2.) To pay the amount of THREE HUNDRED SIXTY FIVE THOUSAND


(P365,000.00) PESOS as a reasonable compensation for the use and
occupation of the property;

3.) To pay TWENTY THOUSAND (P20,000.00) PESOS for and


attorney's fees; and

4.) To pay FIVE THOUSAND (P5,000.00) PESOS as litigation expenses,


plus costs.

SO ORDERED.10[10]

cralawRespondents filed an appeal with the Regional Trial Court (RTC), Branch 26, Sta.
Cruz, Laguna, docketed as Civil Case No. SC-4141.11[11] On December 3, 2001, the RTC
rendered a Decision,12[12] the dispositive portion of which reads:

cralaw
WHEREFORE, the judgment of the trial court is hereby
cralaw
affirmed subject to the modification that defendants are ordered to pay
plaintiff the amount of FOUR HUNDRED THOUSAND (P400,000.00),
as yearly reasonable compensation for the use and occupation of said
riceland computed from 1999 until such time that defendants have actually
vacated the same.

SO ORDERED.13[13]

9
10
11
12
13
cralawUndaunted, respondents filed a Petition for Review with the CA.14[14]For failure to
file her comment despite receipt of CA Resolution15[15] dated May 8, 2002 which required her
to file a comment, petitioner was deemed to have waived her right to file comment to the petition
in CA Resolution dated August 28, 2002.16[16]

cralawOn May 13, 2003, the CA rendered a Decision17[17] setting aside the Decision of
the RTC and dismissing the complaint for unlawful detainer. The CA nullified the proceedings
before the MTC for want of jurisdiction.It held that the issues in the case - whether or not there
was a violation of the Contract to Sell, whether or not such violation gives the petitioner the right
to terminate the contract and consequently, the right to recover possession and the value of the
harvest from the riceland- extend beyond those commonly involved in unlawful detainer suits
where only the issue of possession is involved; that the case is not a mere detainer suit but one
incapable of pecuniary estimation, placing it under the exclusive original jurisdiction of the RTC,
not the MTC.

Dissatisfied, petitioner filed the present petition anchored on the following grounds:

1. The respondent Court of Appeals committed grave error in giving due


course to the private respondents' petition for review notwithstanding the
fact that said petition contains no verification to the effect that the
allegations therein were read and understood by the private respondents
and that they are true and correct of their own or personal knowledge or
based on authentic records, as required by the rules.

2. The respondent Court of Appeals grievously erred in dismissing the


case on the ground that the Municipal Trial Court has no jurisdiction over
the case for unlawful detainer, and thus the Regional Trial Court likewise
has no jurisdiction on appeal to decide the case for unlawful detainer,
which allegedly involves a matter incapable of pecuniary estimation.
14
15
16
17
3.The respondent Court of Appeals erred in not affirming the decision of
the Regional Trial Court dated December 3, 2001, modifying the decision
of the Municipal Trial Court dated August 2, 2000 both ordering the
eviction of private respondents from the subject property and payment of
the reasonable value of the use of the subject premises.18[18]

Petitioner contends that the CA should have dismissed outright the petition for review filed
before it since it contains no verification as required by the Rules; and that the CA, in finding that
the complaint before the MTC was not one for unlawful detainer but for specific performance,
did not limit itself to the allegations in the complaint but resorted to unrestrained references,
deductions and/or conjectures, unduly influenced by the allegations in the answer.

Respondents, on the other hand, contend that verification is just a formal requirement; that
petitioner waived her right to question the defect when she failed to submit her comment; that the
CA correctly pointed out that the present case involves one that is incapable of pecuniary
estimation since the crux of the matter is the rights of the parties based on the Contract to Sell.

The petition is bereft of merit.

As to the contention of petitioner that the CA should not have taken cognizance of the petition for
review because it was not verified, as required by the Rules, this Court has held in a number of
instances that such a deficiency can be excused or dispensed with in meritorious cases, the defect
being neither jurisdictional nor always fatal.19[19] The requirement regarding verification of a
pleading is formal.20[20] Such requirement is simply a condition affecting the form of pleading,
the non-compliance with which does not necessarily render the pleading fatally defective. 21[21]
Verification is simply intended to secure an assurance that the allegations in the pleading are true
18
19
20
21
and correct and not the product of the imagination or a matter of speculation, and that the
pleading is filed in good faith.22[22] The court may order the correction of the pleading if
verification is lacking or act on the pleading although it is not verified, if the attending
circumstances are such that strict compliance with the Rules may be dispensed with in order that
the ends of justice may thereby be served.23[23]

Besides, petitioner did not raise the issue of lack of verification before the CA.She did not file a
comment to the petition and it is too late in the day to assail such defect, as she is deemed to have
waived any objection to the formal flaws of the petition. Points of law, theories, issues and
arguments not brought to the attention of the lower court cannot be raised for the first time on
appeal.24[24]

The main issue being raised in the present petition is whether the complaint is one for unlawful
detainer.

cralawSettled is the rule that jurisdiction in ejectment cases is determined by the allegations
pleaded in the complaint.25[25] It cannot be made to depend upon the defenses set up in the
answer or pleadings filed by the defendant.26[26]Neither can it be made to depend on the
exclusive characterization of the case by one of the parties.27[27] The test for determining the
sufficiency of those allegations is whether, admitting the facts alleged, the court can render a
valid judgment in accordance with the prayer of the plaintiff.28[28]

22
23
24
25
26
27
28
cralawThe facts upon which an action for unlawful detainer can be brought are specially
mentioned in Section 1, Rule 70 of the Revised Rules of Court, which provides:

Section 1. Who may institute proceedings, and when. Subject to the provisions of
the next succeeding section, a person deprived of the possession of any land or
building by force, intimidation, threat, strategy, or stealth, or a lessor, vendor,
vendee, or other person against whom the possession of any land or building is
unlawfully withheld after the expiration or termination of the right to hold
possession, by virtue of any contract, express or implied, or the legal
representatives or assigns of any such lessor, vendor, vendee or other person
may, at any time within one (1) year after such unlawful deprivation or
withholding of possession, bring an action in the proper Municipal Trial Court
against the person or persons unlawfully withholding or depriving of possession,
or any person or persons claiming under them, for the restitution of such
possession, together with damages and costs.(Emphasis supplied)

In unlawful detainer, the possession was originally lawful but became unlawful by the expiration
or termination of the right to possess; hence, the issue of rightful possession is decisive for, in
such action, the defendant is in actual possession and the plaintiffs cause of action is the
termination of the defendants right to continue in possession.29[29]chanroblesvirtuallawlibrary

cralawApplied to the present case, petitioner, as vendor, must comply with two requisites
for the purpose of bringing an ejectment suit: (a) there must be failure to pay the installment due
or comply with the conditions of the Contract to Sell; and (b) there must be demand both to pay
or to comply and vacate within the periods specified in Section 2 30[30] of Rule 70, namely: 15
days in case of land and 5 days in case of buildings.The first requisite refers to the existence of
the cause of action for unlawful detainer, while the second refers to the jurisdiction requirement
of demand in order that said cause of action may be pursued.31[31]

cralawBoth demands to pay installment due or adhere to the terms of the Contract to Sell
and to vacate are necessary to make the vendee deforciant in order that an ejectment suit may be

29
30
31
filed.32[32] It is the vendor's demand for the vendee to vacate the premises and the vendee's
refusal to do so which makes unlawful the withholding of the possession. 33[33] Such refusal
violates the vendor's right of possession giving rise to an action for unlawful detainer.34[34]
However, prior to the institution of such action, a demand from the vendor to pay the installment
due or comply with the conditions of the Contract to Sell and to vacatethe premises is required
under the aforequoted rule.

cralawThus, mere failure to pay the installment due or violation of the terms of the Contract
to Sell does not automatically render a person's possession unlawful. Furthermore, the giving of
such demand must be alleged in the complaint; otherwise, the MTC cannot acquire jurisdiction
over the case.35[35]chanroblesvirtuallawlibrary

A review of the Complaint of petitioner discloses these pertinent allegations: petitioner owns the
subject riceland; she executed a Contract to Sell in favor of respondents; pending full payment of
the purchase price, possession of subject riceland was transferred to respondents subject to
accounting and delivery of the harvest to petitioner; respondents failed to pay the installments and
to account for and deliver the harvest; petitioner asked respondents to vacate the subject riceland,
but they failed to do so.Accordingly, petitioner prayed for judgment ordering respondents to
vacate the subject riceland and to pay P400,000.00 per year from September 1998 until they
vacate as reasonable compensation for the use of the property, P120,000.00 as attorney's fees, and
P50,000.00 as litigation expenses.

It is clear from the foregoing that the allegations in the Complaint failed to constitute a case of
unlawful detainer.What is clear is that in the Complaint, petitioner alleged that respondents had
violated the terms of the Contract to Sell.However, the Complaint failed to state that petitioner
made demands upon respondents to comply with the conditions of the contract the payment of the

32
33
34
35
installments and the accounting and delivery of the harvests from the subject riceland. The 10-day
period granted respondents to vacate even fell short of the 15-day period mandated by law.When
the complaint does not satisfy the jurisdictional requirements of a valid cause for unlawful
detainer, the MTC does not have jurisdiction to hear the case.36[36]chanroblesvirtuallawlibrary

An allegation of a violation of a contract or agreement in a detainer suit may be proved by the


presentation of competent evidence, upon which an MTC judge might make a finding to that
effect, but certainly, that court cannot declare and hold that the contract is rescinded.The
rescission of contract is a power vested in the RTC.37[37]The rescission of the contract is the
basis of, and therefore a condition precedent for, the illegality of a party's possession of a piece of
realty.38[38] Without judicial intervention and determination, even a stipulation entitling one
party to take possession of the land and building, in case the other party violates the contract,
cannot confer upon the former the right to take possession thereof, if that move is objected to. 39
[39]

Clearly, the basic issue raised in the complaint of petitioner is not of possession but interpretation,
enforcement and/or rescission of the contract, a matter that is beyond the jurisdiction of the MTC
to hear and determine.

WHEREFORE, the instant petition is DENIED.The Decision dated May 13, 2003 of the Court
of Appeals in CA-G.R. SP No. 68272 is AFFIRMED.Costs against petitioner.

SO ORDERED.

SPS. CARLOS AND EULALIA RAYMUNDO G.R. No. 171250


and SPS. ANGELITO AND JOCELYN
36
37
38
39
BUENAOBRA,

Petitioners,
Present:

YNARES-SANTIAGO, J.,
-versus-
Chairperson,

AUSTRIA-MARTINEZ,

CHICO-NAZARIO, and
SPS. DOMINADOR and ROSALIA
NACHURA, JJ.
BANDONG,

Respondents.
Promulgated:

July 4, 2007

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - -x

DECISION

CHICO-NAZARIO, J.:

cralawThis is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of
Court, filed by petitioners Spouses Carlos and Eulalia Raymundo and Spouses Angelito and
Jocelyn Buenaobra seeking the reversal and setting aside of the Decision 40[1] of the Court of

40
Appeals dated 26 September 2005 and its Resolution41[2] dated 24 January 2006 in CA-G.R. CV
No. 59557.The Court of Appeals, in its assailed Decision and Resolution, reversed the
Decision42[3] of the Regional Trial Court (RTC) dated 28 January 1998, in Civil Case No. C-
14980, declaring the Deed of Sale executed by respondent Dominador Bandong (Dominador) in
favor of petitioner Eulalia Raymundo (Eulalia) as valid and binding.The dispositive portion of the
asailed Court of Appeals Decision reads:

WHEREFORE, premises considered, we hereby GRANT the


cralaw
appeal.The January 28, 1998 decision of the RTC, Branch 126, Caloocan
City is hereby REVERSED and SET ASIDE and a new one entered:

1. ANNULLING the Deed of Absolute Sale dated


cralaw
February 3, 1989 as a deed of sale, and considering
it instead as a real estate mortgage of the disputed
property to secure the payment of the P70,000.00
the plaintiffs-appellants spouses Bandong owe the
defendants-appellees spouses Raymundo.The
spouses Bandong are given one (1) year from the
finality of this Decision within which to pay the
P70,000.00 owed to the spouses Raymundo, at 12%
interest per annum computed from July 17, 1991
until its full payment.

2. ANNULLING the Deed of Absolute Sale dated


cralaw
September 25, 1990, between the spouses
Raymundo as vendors and the spouses Buenaobra
as vendees.

3. ORDERING the Register of Deeds of


cralaw
Caloocan City to issue a new Transfer Certificate of
Title covering Lot 18, Block 2 of the subdivision
plan PSD 16599, a portion of Lot 1073 of the
Cadastral Survey of Caloocan, in the names of the
spouses Dominador and Rosalia Bandong, after the
cancellation pursuant to this Decision of TCT No.
222871 currently in the names of the spouses
Angelito and Jocelyn Buenaobra; and FURTHER
ORDERING the said Register of Deeds to annotate
in the new Transfer Certificate of Title in the names

41
42
of the spouses Bandong a real estate mortgage in
favor of the spouses Carlos and Eulalia Raymundo
reflecting the terms of this Decision.

4. AWARDING moral damages in the amount of


cralaw
P50,000.00; exemplary damages of P20,000.00; and
attorneys fees and expenses of litigation of
P20,000.00, plus P500.00 per proven appearance of
the plaintiffs-appellants counsel in court all
solidarily payable by the spouses Carlos and Eulalia
Raymundo and the spouses Angelito and Jocelyn
Buenaobra, to the spouses Dominador and Rosalia
Bandong.

5. ORDERING the payment of the costs of the


cralaw
suit, payable by the spouses Carlos and Eulalia
Raymundo and the spouses Angelito and Jocelyn
Buenaobra.43[4]

cralawThe factual and procedural backdrop of this case are as follows:

Eulalia was engaged in the business of buying and selling large cattle from different provinces
within the Philippines.For this purpose, she employed biyaheros whose primary task involved the
procuring of large cattle with the financial capital provided by Eulalia and delivering the procured
cattle to her for further disposal.In order to secure the financial capital she advanced for the
biyaheros, Eulalia required them to surrender the Transfer Certificates of Title (TCTs) of their
properties and to execute the corresponding Deeds of Sale in her favor.

Dominador had been working for Eulalia as one of her biyaheros for three decades.Considering
his long years of service without any previous derogatory record, Eulalia no longer required
Dominador to post any security in the performance of his duties.44[5]chanroblesvirtuallawlibrary

43
44
However, in 1989, Eulalia found that Dominador incurred shortage in his cattle procurement
operation in the amount of P70,000.00.Dominador and his wife Rosalia Bandong (Rosalia) then
executed a Deed of Sale45[6] in favor of Eulalia on 3 February 1989, covering a parcel of land
with an area of 96 square meters, more or less, located at Caloocan City and registered under
TCT No. 1421 (subject property), in the name of the Spouses Bandong.On the strength of the
aforesaid deed, the subject property was registered in the names of Eulalia and her husband
Carlos Raymundo (Carlos). The subject property was thereafter sold by the Spouses Raymundo
to Eulalias grandniece and herein co-petitioner, Jocelyn Buenaobra (Jocelyn).Thus, the subject
property came to be registered in the name of Jocelyn and her husband Angelito Buenaobra
(Angelito).

After the TCT of the subject property was transferred to their names, the Spouses Buenaobra
instituted before the Metropolitan Trial Court (MeTC) of Caloocan City, an action for ejectment
against the Spouses Bandong, docketed as Civil Case No. 20053, seeking the eviction of the
latter from the subject property, which the Spouses Bandong opposed on the ground that they are
the rightful owners and possessors thereof.The MeTC ruled in favor of the Spouses Buenaobra
which, on appeal, was affirmed in toto by the RTC46[7] and subsequently, by the Court of
Appeals.47[8]Finally, when the case was raised on appeal before us in G.R. No. 109422, we
issued a Resolution48[9] dated 12 July 1993, finding that no substantial arguments were raised
therein to warrant the reversal of the appealed decision.

To assert their right to the subject property, the Spouses Bandong instituted an action for
annulment of sale before the RTC against Eulalia and Jocelyn on the ground that their consent to
the sale of the subject property was vitiated by Eulalia after they were served by Jocelyns counsel
with the demand to vacate.This was docketed as Civil Case No. C-14980.The Spouses Bandong
alleged that there was no sale intended but only equitable mortgage for the purpose of securing
the shortage incurred by Dominador in the amount of P70,000 while employed as biyahero by
Eulalia.

45
46
47
48
Eulalia countered that Dominador received from her a significant sum of money, either as cash
advances for the purpose of procuring large cattle or as personal loan, and when he could no
longer pay his obligations, the Spouses Bandong voluntarily ceded the subject property to her by
executing the corresponding deed of sale in her favor.Indeed, the Spouses Bandong personally
appeared before the Notary Public and manifested that the deed was their own voluntary act and
deed.

For her part, Jocelyn maintained that she was a buyer in good faith and for value for she
personally inquired from the Register of Deeds of the presence of any liens and encumbrances on
the TCT of the subject property and found that the same was completely free therefrom.While she
admitted that she had previous notice that Dominador and a certain Lourdes Santos (Lourdes)
were in possession of the subject property, Jocelyn claimed that the said possessors already
acknowledged her ownership thereof and even asked for time to vacate.In the end, though, they
refused to leave the premises.

On 28 June 1998, the RTC rendered a Decision49[10] in Civil Case No. C-14980 in favor of
Eulalia and Jocelyn by declaring that the Deed of Sale between Dominador and Eulalia was valid
and binding and, consequently, the subsequent sale between Eulalia and Jocelyn was also lawful
absent any showing that Jocelyn was a buyer in bad faith.The dispositive portion of the said
decision reads:

WHEREFORE, judgment is hereby rendered DISMISSING the complaint


filed by the [Spouses Bandong] and ordering said [Spouses Bandong] to
pay [herein petitioners] spouses Raymundo and Buenaobra the amount of
P50,000 and P30,000, respectively, as attorneys fees and costs of the suit.

49
On appeal in CA-G.R. SP No. 59557, the Court of Appeals reversed the RTC Decision and found
that the transaction entered into by Dominador and Eulalia was not one of sale but an equitable
mortgage considering that the purchase price was grossly inadequate and the Spouses Bandong
remained as possessors of the subject property after Eulalias alleged purchase thereof.The
appellate court likewise charged Jocelyn with knowledge that the Spouses Raymundo were not
the absolute owners of the subject property negating the presumption that she was an innocent
purchaser for value.

The Court of Appeals found the Motion for Reconsideration filed by petitioners unmeritorious
and denied the same in its Resolution50[11] dated 24 January 2006.

Hence, this instant Petition for Review on Certiorari filed by the petitioners assailing the
Decision dated 26 September 2005 and the Resolution dated 24 January 2006 rendered by the
Court of Appeals.For the resolution of this Court are the following issues:

I.

WHETHER OR NOT THE DEED OF SALE BETWEEN DOMINADOR


AND EULALIA IS VALID AND BINDING.

II.

WHETHER OR NOT JOCELYN IS A BUYER IN GOOD FAITH.

In arguing that the sale between Dominador and Eulalia is valid, petitioners posit that gross
inadequacy of the price is not sufficient to invalidate the sale, and granting arguendothat
insufficient consideration may void a sale, it has not been proven that the consideration of sale
between Dominador and Eulalia was grossly inadequate.

50
Elaborating, petitioners maintain that the amount of P110,000.00 (which they claimed they have
given to Dominador), or even the sum of P70,000.00 (which respondents admitted receiving),
was a substantial consideration, sufficient to support a sale contract.Mere inadequacy of the price
is not sufficient to invalidate a sale; the price must be grossly inadequate or utterly shocking to
the conscience in order to avoid a contract of sale.

Petitioners further aver that the alleged market value of the subject property as submitted by the
appraiser, one of respondents witnesses, would not serve as an objective basis in determining the
actual value of the subject property, much less the supposed amount of its purchase price, in the
absence of any logical and valid basis for its determination.

Finally, petitioners contend that so long as the contract was voluntarily entered into by the parties
and in the absence of a clear showing that their consent thereto was vitiated by fraud, mistake,
violence or undue influence, such as in the case at bar, the said contract should be upheld.

cralawWe do not agree.

An equitable mortgage is one that - although lacking in some formality, forms and words, or
other requisites demanded by a statute - nevertheless reveals the intention of the parties to charge
a real property as security for a debt and contains nothing impossible or contrary to law.51
[12]chanroblesvirtuallawlibrary

The instances when a contract - regardless of its nomenclature - may be presumed to be an


equitable mortgage are enumerated in the Civil Code as follows:

51
Art. 1602. The contract shall be presumed to be an equitable mortgage, in
any of the following cases:

(1) When the price of a sale with right to repurchase is unusually


inadequate;

(2) When the vendor remains in possession as lessee or otherwise;

(3) When upon or after the expiration of the right to repurchase another
instrument extending the period of redemption or granting a new period is
executed;

(4) When the purchaser retains for himself a part of the purchase
price;

(5) When the vendor binds himself to pay the taxes on the thing sold.

(6)In any other case where it may be fairly inferred that the real intention
of the parties is that the transaction shall secure the payment of a debt or
the performance of any other obligation.

Art. 1604. The provisions of Article 1602 shall also apply to a contract
purporting to be an absolute sale.

For Articles 1602 and 1604 to apply, two requisites must concur: one, the parties entered into a
contract denominated as a contract of sale; and two, their intention was to secure an existing debt
by way of an equitable mortgage.52[13]chanroblesvirtuallawlibrary

There is no question that Dominador and Eulalia entered into a contract of sale as evidenced by
the document denominated as Deed of Sale53[14] signed by them.As to whether the parties
intended to transfer ownership of the subject property or merely to constitute a security for an
existing debt is an issue that needs to be addressed by this Court.

52
53
In resolving this kind of controversy, the doctrine in Reyes v. Court of Appeals54[15] directs us
to give utmost consideration to the intention of the parties in light of the relative situation of each
and the circumstances surrounding the execution of the contract, thus:

In determining whether a deed absolute in form is a mortgage, the court is


not limited to the written memorials of the transaction.The decisive factor
in evaluating such agreement is the intention of the parties, as shown
not necessarily by the terminology used in the contract but by all the
surrounding circumstances, such as the relative situation of the
parties at that time, the attitude acts, conduct, declarations of the parties,
the negotiations between them leading to the deed, and generally, all
pertinent facts having a tendency to fix and determine the real nature of
their design and understanding. x x x55[16] (Emphasis supplied.)

By applying the aforestated principle to the case at bar, we are constrained to rule that in
executing the said Deed of Sale, Dominador and Eulalia never intended the transfer of
ownership of the subject property but to burden the same with an encumbrance to secure
the indebtedness incurred by Dominador on the occasion of his employment with Eulalia.

By Eulalias own admission,56[17] it was her customary business practice to require her biyaheros
to deliver to her the titles to their real properties and to execute in her favor the corresponding
deeds of sale over the said properties as security for the money she provided for their cattle
procurement task, and since Dominador worked for Eulalias business for years, he was allowed to
advance the money without any security.Significantly, it was only after he incurred a shortage
that the sale contract was executed.

We are not inclined to believe the contention of the petitioners that Dominador ceded his property
to Eulalia as payment for his obligation for it is contrary to human experience that a person would

54
55
56
easily part with his property after sustaining a debt.Rather, he would first look for means to settle
his obligation, and the selling of a property on which the house that shelters him and his family
stands, would be his last resort.The only reasonable conclusion that may be derived from
Dominadors act of executing a Deed of Sale in favor of Eulalia is that the latter required him to
do so in order to ensure that he will subsequently pay his obligation to her.

This conclusion is in accord with the doctrine we enunciated in Aguirre v. Court of Appeals,57
[18] that:

The explicit provision of Article 1602 that any of those circumstances would
suffice to construe a contract of sale to be one of equitable mortgage is in
consonance with the rule that the law favors the least transmission of
property rights. To stress, the existence of any one of the conditions under
Article 1602, not a concurrence, or an overwhelming number of such
circumstances, suffices to give rise to the presumption that the contract is an
equitable mortgage.

While we agree in the petitioners insistence that inadequacy of the price is not sufficient to nullify
the contract of sale, their persistence is, however, misplaced.It is worthy to note that the factual
circumstances attendant in the case at bar call not for the application of the legal and
jurisprudential principles on annulment of contract per se, but more aptly, of the provisions of
Articles 1602 and 1604 of the Civil Code on the construction of the contract of sale as an
equitable mortgage.

Consequently, the agreement between Dominador and Eulalia was not avoided in its entirety so
as to prevent it from producing any legal effect at all.Instead, we construe that said transaction is
an equitable mortgage, thereby merely altering the relationship of the parties from seller and
buyer, to mortgagor and mortgagee, while the subject property is not transferred but subjected to
a lien in favor of the latter.

57
Moreover, granting that the purchase price is adequate, the fact that respondents remain in
possession of the subject property after its supposed sale is sufficient to support our finding that
the contract is one of equitable mortgage and not of sale.To reiterate, the existence of any one
of the conditions under Article 1602, not a concurrence, or an overwhelming number of
such circumstances, suffices to give rise to the presumption that the contract is an equitable
mortgage.58[19]

Having threshed the issue that there was no sale in


favor of Eulalia but an equitable mortgage leads us
to an inevitable conclusion that she has no right to
subsequently transfer ownership of the subject
property, in consonance with the principle that
nobody can dispose of what he does not have.59
60
[20]One of the exceptions [21] to this rule, however,

can be found in Article 1506 of the Civil Code,


wherein the seller has voidable title to a property
but his title has not yet been nullified at the time of
the sale, and the subsequent buyer of the property
was in good faith.

cralawAn innocent purchaser for value is one who buys the property of another, without
notice that some other person has a right or interest in the property, for which a full and fair price
is paid by the buyer at the time of the purchase or before receipt of any notice of claims or
interest of some other person in the property.61[22]chanroblesvirtuallawlibrary

58
59
60
61
Petitioners are harping on the contention that Jocelyn was an innocent purchaser for
value.Invoking the indefeasibility of a Torrens title, they assert that there is nothing in the
subject propertys TCT that should arouse Jocelyns suspicion as to put her on guard that
there is a defect in Eulalias title.

Again, we are not persuaded.The burden of proving the purchasers good faith lies in the one who
asserts the same.In discharging the burden, it is not enough to invoke the ordinary presumption of
good faith.62[23]In Arrofo v. Quio,63[24] we have elucidated that:

[A] person dealing with registered land, [is not required] to inquire further that
what the Torrens title on its face indicates.This rule, however, is not absolute but
admits of exceptions.

cralawThus, while it is true x x x that a person dealing with registered


lands need not go beyond the certificate of title, it is likewise a well-settled
rule that a purchaser or mortgagee cannot close his eyes to facts which
should put a reasonable man on his guard, and then claim that he acted in
good faith under the belief that there was no defect in the title of the vendor
or mortgagor.His mere refusal to face up to the fact that such defect exists, or
his willful closing of his eyes to the possibility of the existence of a defect in the
vendors or mortgagors title, will not make him an innocent purchaser for value, if
it afterwards develops that the title was in fact defective, and it appears that he
had such notice of the defect as would have led to its discovery had he acted with
the measure of precaution which may be required of a prudent man in a like
situation.

In the present case, we are not convinced by the petitioners incessant assertion that
Jocelyn is an innocent purchaser for value.To begin with, she is a grandniece of Eulalia
and resides in the same locality where the latter lives and conducts her principal
business.It is therefore impossible for her not to acquire knowledge of her grand aunts
business practice of requiring her biyaheros to surrender the titles to their properties and
to sign the corresponding deeds of sale over said properties in her favor, as security.This
alone should have put Jocelyn on guard for any possible abuses that Eulalia may commit
with the titles and the deeds of sale in her possession.

62
63
The glaring lack of good faith of Jocelyn is more apparent in her own admission that she
was aware that Dominador and a certain Lourdes were in possession of the subject
property.A buyer of real property that is in the possession of a person other than the seller
must be wary.A buyer who does not investigate the rights of the one in possession can
hardly be regarded as a buyer in good faith.64[25]Jocelyns self-serving statement that she
personally talked to Dominador and Lourdes about her acquisition of the subject property
and intention to take possession of the same, and that Dominador and Lourdes even
pleaded for time to vacate the subject property cannot be given credence in light of the
prompt filing by the Spouses Bandong of an action for the annulment of the sale contract
between Dominador and Eulalia after they received the demand to vacate from Jocelyns
lawyer.

In the last analysis, good faith, or the lack of it, is a question of intention.But in
ascertaining the intention that impels one on a given occasion, the courts are necessarily
controlled by the evidence as to the conduct and other outward acts by which the motive
may be safely determined.65[26]

Petitioners question further the belated filing by the Spouses Bandong of an action for the
annulment of sale, since the Spouses Bandong filed the same only after they received the
notice to vacate, and not immediately after the execution of the assailed Deed of Sale.We
have repeatedly held that the one who is in actual possession of a piece of land claiming
to be the owner thereof may await to vindicate his right.His undisturbed possession gives
him a continuing right to seek the aid of a court of equity to ascertain and determine the
nature of the adverse claim of a third party and its effect on his own title, which right can
be claimed only by one who is in possession.66[27]

Finally, we agree with the Court of Appeals that the ejectment case which had been
litigated to finality by the Spouses Buenaobra and the respondents need not alter our
conclusion in the present case.Well entrenched is the doctrine that in ejectment cases, the
sole question for resolution is the physical or material possession of the property in
question, so that neither the claim of juridical possession nor an averment of ownership
can outrightly prevent the court from taking cognizance of the case.67[28]In ejectment
cases, all the court may do is to resolve who is entitled to its possession although, in
doing so, it may make a determination of who is the owner of the property in order to
resolve the issue of possession.But such determination of ownership is not clothed with

64
65
66
67
finality.Neither will it affect ownership of the property or constitute a binding and
conclusive adjudication on the merits with respect to the issue of ownership.68[29]

WHEREFORE, IN VIEW OF THE FOREGOING, the instant Petition is DENIED.The


Decision dated 26 September 2005, and the Resolution dated 24 January 2006, rendered by the
Court of Appeals in CA-G.R. SP No. 59957, are hereby AFFIRMED. Costs against petitioner.

SO ORDERED.

G.R. No. 170916 April 27, 2007

CGR CORPORATION herein represented by its President ALBERTO RAMOS,


III, HERMAN M. BENEDICTO and ALBERTO R. BENEDICTO, Petitioners,
vs.
ERNESTO L. TREYES, JR., Respondent

DECISION

CARPIO MORALES, J.:

Assailed via petition for review are issuances of the Regional Trial Court (RTC), Branch
43, Bacolod City, in Civil Case No. 04-12284, to wit: Order1 dated August 26, 2005
which dismissed petitioners’ complaint for damages on the ground of prematurity, and
Order2 dated January 2, 2006 which denied petitioners’ motion for reconsideration.

In issue is one of law – whether a complainant in a forcible entry case can file an
independent action for damages arising after the act of dispossession had occurred.

CGR Corporation, Herman M. Benedicto and Alberto R. Benedicto (petitioners) claimed


to have occupied 37.3033 hectares of public land in Barangay Bulanon, Sagay City,
Negros Occidental even before the notarized separate Fishpond Lease Agreement Nos.
5674,3 56944 and 56955 in their respective favor were approved in October 2000 by the
Secretary of Agriculture for a period of twenty-five (25) years or until December 31,
2024.

On November 18, 2000, Ernesto L. Treyes, Jr. (respondent) allegedly forcibly and
unlawfully entered the leased properties and once inside barricaded the entrance to the
fishponds, set up a barbed wire fence along the road going to petitioners’ fishponds, and
harvested several tons of milkfish, fry and fingerlings owned by petitioners.

68
On November 22, 2000, petitioners promptly filed with the Municipal Trial Court (MTC)
in Sagay City separate complaints for Forcible Entry With Temporary Restraining Order
And/Or Preliminary Injunction And Damages, docketed as Civil Case Nos. 1331,6 13327
and 1333,8 against Ernesto M. Treyes, Sr. and respondent.

In a separate move, petitioners filed in March 2004 with the Bacolod RTC a complaint
for damages against respondent, docketed as Civil Case No, 04-12284, alleging, inter
alia,

xxxx

That prior to the issuance of the fishpond lease agreement in favor of the
plaintiffs, they had already been in open and continuous possession of the same
parcel of land;

VI

As lessee and in possession of the above[-]described fishpond, plaintiffs have


continuously occupied, cultivated and developed the said fishpond and since then,
had been regularly harvesting milkfish, shrimps, mud crabs and other produce of
the fishponds;1a\^/phi1.net

VII

That the yearly income of the fishpond of the plaintiff corporation is at least
P300,000.00 more or less, while the yearly income of the fishpond of plaintiff
Herman Benedicto, Sr. is at least P100,000.00 more or less, and the yearly income
of the fishpond of plaintiff Alberto Benedicto is at least P100,000.00 more or less;

VIII

That sometime last November 18, 2000 or thereabout, defendant Ernesto L.


Treyes, Jr. and his armed men and with the help of the blue guards from the
Negros Veterans Security Agency forcibly and unlawfully entered the fishponds
of the plaintiffs and once inside barricaded the entrance of the fishpond and set up
barb wire fence along the road going to plaintiffs fishpond and harvested the
milkfish and carted away several tons of milkfish owned by the plaintiffs;

IX

That on succeeding days, defendant’s men continued their forage on the fishponds
of the plaintiffs by carting and taking away the remaining full grown milkfish, fry
and fingerlings and other marine products in the fishponds. NOT ONLY THAT,
even the chapel built by plaintiff CGR Corporation was ransacked and destroyed
and the materials taken away by defendant’s men. Religious icons were also
stolen and as an extreme act of sacrilege, even decapitated the heads of some of
these icons;

xxxx

XIII

That the unlawful, forcible and illegal intrusion/destruction of defendant Ernesto


Treyes, Jr. and his men on the fishpond leased and possessed by the plaintiffs is
without any authority of law and in violation of Article 539 of the New Civil
Code which states:

"Art. 539. Every possessor has a right to be respected in his possession; and should he be
disturbed therein he shall be protected in or restored to said possession by the means
established by the laws and rules of the Court."9 (Underscoring supplied) and praying for
the following reliefs:

1) Ordering the defendant to pay plaintiff CGR Corporation the sum of at least
P900,000.00 and to plaintiffs Herman and Alberto Benedicto, the sum of at least
P300,000.00 each by way of actual damages and such other amounts as proved
during the trial;

2) Ordering the defendant to pay the plaintiffs the sum of P100,000.00 each as
moral damages;

3) Ordering the defendant to pay the plaintiffs the sum of P100,000.00 each as
exemplary damages;

4) Ordering the defendant to pay the plaintiffs the sum of P200,000.00 as


attorney’s fees, and to reimburse plaintiffs with all such sums paid to their counsel
by way of appearance fees.10 (Underscoring supplied)

Respondent filed a Motion to Dismiss11 petitioners’ complaint for damages on three


grounds – litis pendentia, res judicata and forum shopping.

By the assailed Order12 of August 26, 2005, Branch 43 of the Bacolod RTC dismissed
petitioners’ complaint on the ground of prematurity, it holding that a complaint for
damages may only be maintained "after a final determination on the forcible entry cases
has been made."

Hence, the present petition for review.

The only issue is whether, during the pendency of their separate complaints for forcible
entry, petitioners can independently institute and maintain an action for damages which
they claim arose from incidents occurring after the dispossession by respondent of the
premises.

Petitioners meet the issue in the affirmative. Respondents assert otherwise.

The petition is impressed with merit.

Section 17, Rule 70 of the Rules of Court provides:

SEC. 17. Judgment. – If after trial the court finds that the allegations of the complaint are
true, it shall render judgment in favor of the plaintiff for the restitution of the premises,
the sum justly due as arrears of rent or as reasonable compensation for the use and
occupation of the premises, attorney’s fees and costs. If it finds that said allegations are
not true, it shall render judgment for the defendant to recover his costs. If a counterclaim
is established, the court shall render judgment for the sum found in arrears from either
party and award costs as justice requires. (Emphasis supplied)

The recoverable damages in forcible entry and detainer cases thus refer to "rents" or "the
reasonable compensation for the use and occupation of the premises" or "fair rental value
of the property" and attorney’s fees and costs.13

The 2006 case of Dumo v. Espinas14 reiterates the long-established rule that the only form
of damages that may be recovered in an action for forcible entry is the fair rental value or
the reasonable compensation for the use and occupation of the property:

Lastly, we agree with the CA and the RTC that there is no basis for the MTC to award
actual, moral, and exemplary damages in view of the settled rule that in ejectment cases,
the only damage that can be recovered is the fair rental value or the reasonable
compensation for the use and occupation of the property. Considering that the only issue
raised in ejectment is that of rightful possession, damages which could be recovered are
those which the plaintiff could have sustained as a mere possessor, or those caused by the
loss of the use and occupation of the property, and not the damages which he may have
suffered but which have no direct relation to his loss of material possession. x x x15
(Emphasis, underscoring and italics supplied; citations omitted)

Other damages must thus be claimed in an ordinary action.16

In asserting the negative of the issue, respondent cites the 1999 case of Progressive
Development Corporation, Inc. v. Court of Appeals.17 In this case, Progressive
Development Corporation, Inc. (Progressive), as lessor, repossessed the leased premises
from the lessee allegedly pursuant to their contract of lease whereby it was authorized to
do so if the lessee failed to pay monthly rentals. The lessee filed a case for forcible entry
with damages against Progressive before the Metropolitan Trial Court (MeTC) of Quezon
City. During the pendency of the case, the lessee filed an action for damages before the
RTC, drawing Progressive to file a motion to dismiss based on litis pendentia. The RTC
denied the motion.
On appeal by Progressive, the Court of Appeals sustained the RTC order denying the
motion to dismiss.

Progressive brought the case to this Court. Citing Section 1, Rule 70 of the Rules of
Court, this Court reversed the lower courts’ ruling, it holding that "all cases for forcible
entry or unlawful detainer shall be filed before the Municipal Trial Court which shall
include not only the plea for restoration of possession but also all claims for damages and
costs therefrom." In other words, this Court held that "no claim for damages arising out
of forcible entry or unlawful detainer may be filed separately and independently of the
claim for restoration of possession."18 (Underscoring supplied)

In thus ruling, this Court in Progressive made a comparative study of the therein two
complaints, thus:

A comparative study of the two (2) complaints filed by private respondent against
petitioner before the two (2) trial courts shows that not only are the elements of res
adjudicata present, at least insofar as the claim for actual and compensatory damages is
concerned, but also that the claim for damages–moral and exemplary in addition to actual
and compensatory–constitutes splitting a single cause of action. Since this runs counter to
the rule against multiplicity of suits, the dismissal of the second action becomes
imperative.

The complaint for forcible entry contains the following pertinent allegations –

2.01 On 02 January 1989, plaintiff entered into a contract of lease with defendant PDC
over a property designated as Ground Floor, Seafood Market (hereinafter "Subject
Premises") situated at the corner of EDSA corner MacArthur Street, Araneta Center,
Cubao, Quezon City, for a period of ten (10) years from 02 January 1989 to 30 April
1998.

2.02 Immediately after having acquired actual physical possession of the Subject
Premises, plaintiff established and now operates thereon the now famous Seafood Market
Restaurant. Since then, plaintiff had been in actual, continuous, and peaceful physical
possession of the Subject Premises until 31 October 1992.

xxxx

3.02 Plaintiff, being the lessee of the Subject Premises, is entitled to the peaceful
occupation and enjoyment of the Subject Premises to the exclusion of all others,
including defendants herein.

3.03 Defendants’ resort to strong arms tactics to forcibly wrest possession of the Subject
Premises from plaintiff and maintain possession thereof through the use of force, threat,
strategy and intimidation by the use of superior number of men and arms amounts to the
taking of the law into their own hands.
3.04 Thus, defendants’ act of unlawfully evicting out plaintiff from the Subject Premises
it is leasing from defendant PDC and depriving it of possession thereof through the use of
force, threat, strategy and intimidation should be condemned and declared illegal for
being contrary to public order and policy.

3.05 Consequently, defendants should be enjoined from continuing with their illegal acts
and be ordered to vacate the Subject Premises and restore possession thereof, together
with its contents to plaintiff.

xxxx

4.07 Considering that defendants’ act of forcibly grabbing possession of the Subject
Premises from plaintiff is illegal and null and void, defendant should be adjudged liable
to plaintiff for all the aforedescribed damages which plaintiff incurred as a result thereof.

The amended complaint for damages filed by private respondent alleges basically the
same factual circumstances and issues as bases for the relief prayed for, to wit:

4. On May 28, 1991, plaintiff and defendant PDC entered into a Contract of Lease for a
period of ten years or from January 2, 1989 up to April 30, 1998 over a property
designated as Ground Floor, Seafood Market (hereinafter referred to as Subject Premises)
situated at the corner of EDSA corner McArthur Street, Araneta Center, Cubao, Quezon
City. A copy of the lease contract is attached hereto as Annex "A."

5. Immediately thereafter, plaintiff took over actual physical possession of Subject


Premises, and established thereon the now famous "Seafood Market Restaurant."

xxxx

7. On October 31, 1992 at around 8:30 p.m., defendant PDC, without the benefit of any
writ of possession or any lawful court order and with the aid of approximately forty (40)
armed security guards and policemen under the supervision of defendant Tejam, forcibly
entered the subject premises through force, intimidation, threats and stealth and relying
on brute force and in a thunderboltish manner and against plaintiff’s will,
unceremoniously drew away all of plaintiffs men out of the subject premises, thereby
depriving herein plaintiff of its actual, physical and natural possession of the subject
premises. The illegal high-handed manner of gestapo like take-over by defendants of
subject premises is more particularly described as follows: x x x x

8. To date, defendants continue to illegally possess and hold the Subject Premises,
including all the multi-million improvements, fixtures and equipment therein owned by
plaintiff, all to the damage and prejudice of plaintiff. The actuations of defendants
constitute an unlawful appropriation, seizure and taking of property against the will and
consent of plaintiff. Worse, defendants are threatening to sell at public auction and
without the consent, of plaintiff and without lawful authority, the multi-million fixtures
and equipment of plaintiff and at prices way below the market value thereof. Plaintiff
hereby attaches as Annex "B" the letter from defendants dated August 6, 1993 addressed
to plaintiff, informing the latter that the former intends to sell at an auction on August 19,
1993 at 2:00 p.m. properties of the plaintiff presently in defendants’ possession.

xxxx

12. Defendant’s unlawful takeover of the premises constitutes a violation of its obligation
under Art. 1654 of the New Civil Code requiring the lessor to maintain the lessee in
peaceful and adequate enjoyment of the lease for the entire duration of the contract.
Hence, plaintiff has filed the present suit for the recovery of damages under Art. 1659 of
the New Civil Code x x x x19 (Emphasis in the original; underscoring supplied)

Analyzing the two complaints, this Court, still in Progressive, observed:

Restated in its bare essentials, the forcible entry case has one cause of action, namely, the
alleged unlawful entry by petitioner into the leased premises out of which three (3) reliefs
(denominated by private respondent as its causes of action) arose: (a) the restoration by
the lessor (petitioner herein) of the possession of the leased premises to the lessee, (b) the
claim for actual damages due to the losses suffered by private respondent such as the
deterioration of perishable foodstuffs stored inside the premises and the deprivation of the
use of the premises causing loss of expected profits; and, (c) the claim for attorney’s fees
and costs of suit.

On the other hand, the complaint for damages prays for a monetary award consisting of
(a) moral damages of P500,000.00 and exemplary damages of another P500,000.00; (b)
actual damages of P20,000.00 and compensatory damages of P1,000,000.00 representing
unrealized profits; and, (c) P200,000.00 for attorney’s fees and costs, all based on the
alleged forcible takeover of the leased premises by petitioner. Since actual and
compensatory damages were already prayed for in the forcible entry case before the
MeTC, it is obvious that this cannot be relitigated in the damage suit before the RTC by
reason of res adjudicata.

The other claims for moral and exemplary damages cannot also succeed considering that
these sprung from the main incident being heard before the MeTC. x x x20 (Italics in the
original; Emphasis and underscoring supplied)

It bears noting, however, that as reflected in the earlier-quoted allegations in the


complaint for damages of herein petitioners, their claim for damages have no direct
relation to their loss of possession of the premises. It had to do with respondent’s alleged
harvesting and carting away several tons of milkfish and other marine products in their
fishponds, ransacking and destroying of a chapel built by petitioner CGR Corporation,
and stealing religious icons and even decapitating the heads of some of them, after the act
of dispossession had occurred.

Surely, one of the elements of litis pendentia - that the identity between the pending
actions, with respect to the parties, rights asserted and reliefs prayed for, is such that any
judgment rendered on one action will, regardless of which is successful, amount to res
judicata in the action under consideration - is not present, hence, it may not be invoked to
dismiss petitioners’ complaint for damages.21

Res judicata may not apply because the court in a forcible entry case has no jurisdiction
over claims for damages other than the use and occupation of the premises and attorney’s
fees.22

Neither may forum-shopping justify a dismissal of the complaint for damages, the
elements of litis pendentia not being present, or where a final judgment in the forcible
entry case will not amount to res judicata in the former.23

Petitioners’ filing of an independent action for damages other than those sustained as a
result of their dispossession or those caused by the loss of their use and occupation of
their properties could not thus be considered as splitting of a cause of action.

WHEREFORE, the Orders dated August 26, 2005 and January 2, 2006 issued by the
Regional Trial Court, Branch 43, Bacolod City, in Civil Case No. 04-12284 are
REVERSED and SET ASIDE.

The Regional Trial Court, Branch 43, Bacolod City, is directed to REINSTATE Civil
Case No. 04-12284 to its docket and to conduct proceedings thereon with dispatch.

SO ORDERED.

G.R. No. 160280 March 13, 2009

SOFIA ANIOSA SALANDANAN, Petitioner,


vs.
SPOUSES MA. ISABEL and BAYANI MENDEZ, Respondents.*

DECISION

AUSTRIA-MARTINEZ, J.:

This refers to the Petition for Review on Certiorari of the June 27, 2003 Decision1 of the
Court of Appeals (CA) and its September 3, 2003 Resolution2 in CA-G.R. SP No. 76336
denying the petition for clarification and intervention filed by Sofia Aniosa Salandanan
(petitioner) and affirming in toto the March 6, 2003 Decision of the Regional Trial Court
(RTC) of Manila, Branch 30 in Civil Case No. 02-104406 which affirmed the August 9,
2002 Decision of the Metropolitan Trial Court (MeTC) of Manila, Branch 15 in Civil
Case No. 172530 ordering Delfin Fernandez3 and Carmen Fernandez (Spouses
Fernandez) and all persons claiming rights under them to vacate and surrender possession
of a house and lot located at 1881 Antipolo St., corner Vision St., Sta. Cruz, Manila
(subject lot) to Spouses Bayani Mendez and Ma. Isabel S. Mendez (respondents) and to
pay the latter monthly rental of P5,000.00 from January 29, 2002 until they vacate the
property and P15,000.00 as attorney’s fees.

The case stemmed from a complaint for ejectment instituted by respondents against
Spouses Fernandez before the MeTC on April 18, 2002.

In their Complaint,4 respondents alleged that they are the owners of the subject property
as evidenced by Transfer Certificate of Title No. 246767 of the Registry of Deeds of
Manila; that they became the owners thereof by virtue of a deed of donation; that Spouses
Fernandez and their families were occupying the subject property for free through the
generosity of respondent Isabel’s father; that a letter of demand to vacate the subject
property was sent to Spouses Fernandez but they refused to vacate the same; that
respondents brought the matter to the Barangay Lupon for possible settlement but the
same failed.

In their Answer,5 Spouses Fernandez denied the allegations of the complaint and averred
that Spouses Pablo and Sofia Salandanan (Spouses Salandanan) are the registered owners
of the subject property and the improvements therein; that respondent Isabel is not a
daughter of Spouses Salandanan; that Delfin Fernandez (Delfin) is the nearest of kin of
Pablo Salandanan being the nephew of the latter; that Delfin has continuously occupied
the said property since time immemorial with the permission of Spouses Salandanan; that
they did not receive any notice to vacate the subject property either from respondents or
their counsel.

Further, Spouses Fernandez claimed that respondents were able to transfer the subject
property to their name through fraud; that sometime in November 1999, respondents
went to the house of Spouses Salandanan in Dasmariñas, Cavite and asked the latter to
sign a special power of attorney; that the supposed special power of attorney was in fact a
deed of donation wherein Spouses Salandanan was alleged to have donated in favor of
respondents the subject property; that said deed of donation was simulated and fictitious
and that by virtue of the alleged deed of donation, respondent Isabel was able to transfer
the title of the subject property in her name; that in fact, the subject property is the subject
of a separate case filed on July 31, 2001 before the RTC of Manila docketed as Civil
Case No. 011014876 for annulment, revocation and reconveyance of title. By way of
counterclaim, Spouses Fernandez prayed for moral damages and attorney’s fees.

On August 9, 2002 the MeTC rendered its decision in favor of respondents and against
Spouses Fernandez, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the
defendants, ordering the latter and all persons claiming rights under them to peacefully
vacate the premises and surrender possession thereof to the plaintiffs and for the
defendants to pay plaintiffs: 1) P5,000.00 a month beginning January 29, 2002 (when the
demand letter was received by defendants by registered mail) until they finally vacate the
premises and 2) the amount of P15,000.00 as and for attorney’s fees.
The counterclaim of the defendants is dismissed for lack of merit.

SO ORDERED.7

Dissatisfied, Spouses Fernandez appealed to the RTC. Respondents then filed a Motion
for Execution Pending Appeal with the RTC. On December 9, 2002, the RTC issued an
Order directing the issuance of a writ of execution to place respondents in possession of
the disputed property on the ground that Spouses Fernandez failed to periodically deposit
the monthly rentals as they fell due. The Writ of Execution was issued on January 10,
2003. The Spouses Fernandez moved for reconsideration of the Order for issuance of the
writ of execution, but the same was denied.

Thus, on February 20, 2003, the sheriff went to the subject premises to implement the
writ of execution but found the place padlocked. The sheriff also found the petitioner, an
old woman, all alone inside the house. Taking pity on the old woman, the sheriff was
unable to implement the writ. On the same day, respondents filed an Urgent Motion to
Break Open, alleging that Spouses Fernandez fetched petitioner earlier that day from her
residence in Dasmariñas, Cavite and purposely placed her inside the subject premises so
the old woman could plead for mercy from the executing sheriff.

On March 6, 2003, the RTC promulgated its Decision affirming the decision of the
MeTC of Manila,8 and on April 8, 2003, the RTC also issued an Order authorizing the
sheriff "to employ the necessary force to enable him to enter the subject premises and
place the plaintiffs-appellees in actual possession thereof."9

Meanwhile, on April 4, 2003, Spouses Fernandez filed before the CA a petition for
review with prayer for a temporary restraining order seeking to stay the immediate
execution pending appeal.10 In a Resolution dated April 15, 2003, the CA granted the
prayer for a Temporary Restraining Order.

On June 27, 2003, the CA rendered its Decision affirming in toto the decision of the RTC
and ordered Spouses Fernandez and all persons claiming rights under them including
petitioner to vacate the premises, ruling thus:

Verily, the only issue to be resolved in the present ejectment case is who between
petitioners [Spouses Fernandez] and respondents has the better right to possess the
disputed premises. The issue as to who between Sofia Aniosa Salandanan and
respondents is the real owner of subject premises could be properly threshed out in a
separate proceedings, which in this case is already pending resolution in another court.

Interestingly, nowhere in any pleadings of petitioners submitted below could We find any
allegations to the effect that their possession of the disputed premises sprung from their
claim of ownership over the same nor, at the very least, that they are in possession of any
document that would support their entitlement to enjoy the disputed premises.
As between respondents' Torrens Title to the premises juxtaposed that of petitioners'
barren claim of ownership and absence of any document showing that they are entitled to
possess the same, the choice is not difficult. Simply put, petitioners plainly have no basis
to insist that they have a better right to possess the premises over respondents who have a
Torrens Title over the same. Hence, the MTC, as well as the RTC, correctly ordered
petitioners to vacate the premises since respondents have a better right to possess the
same by virtue of the latter's Torrens Title.111avvphi1

The dispositive portion of the CA Decision reads as follows:

WHEREFORE, the instant appeal is DISMISSED for lack of merit. The assailed
Decision, dated 06 March 2003, of Hon. Judge Lucia Peña Purugganan of the Regional
Trial Court of Manila, Brach 50, affirming on appeal the Decision of the Metropolitan
Trial Court of Manila (MTC for brevity), Branch 15, is hereby AFFIRMED in toto.
Accordingly, the Temporary Restraining Order is hereby LIFTED. As a legal
consequence, petitioners and all persons claiming rights under them, including Sofia
Aniosa Salandanan, are hereby ORDERED to vacate the premises immediately
upon receipt hereof. Costs against petitioners.

SO ORDERED.12 (Emphasis supplied)

On July 29, 2003, Spouses Fernandez filed their motion for reconsideration.13

On even date, Sofia Salandanan (petitioner) filed a Motion for Clarification and
Intervention14 and attached a Motion for Reconsideration.15 In her motion for clarification
and intervention, she alleged that she and her deceased spouse are the real owners of the
subject property; that she was not a party to the case for ejectment and did not receive
any notice therefrom; and that by virtue of the said decision, she was about to be evicted
from her property without having participated in the entire process of the ejectment
proceeding.

Petitioner further claims that sometime in 1999, respondents went to their house and
showed certain papers purportedly copies of a special power of attorney but which turned
out to be a deed of donation involving the subject property; that by virtue of the said
donation, respondents were able to register the subject properties in their name and were
issued Transfer Certificate of Title No. 246767; that on July 31, 2001, Spouses
Salandanan with the assistance of Delfin, filed a civil case before the RTC of Manila for
Revocation/Annulment of the said title and Reconveyance; and that consequently,
petitioner was forced to intervene in order to protect her interests over the subject
property. Petitioner prayed for (1) clarification of the CA’s decision asking whether the
said decision applies to her as a relative of Spouses Fernandez claiming right under them
or as possessor of the subject property in her right as owner of the subject property; (2)
that she be allowed to intervene in the appeal; and (3) that the attached motion for
reconsideration be admitted.
In a Resolution dated September 3, 2003, the CA denied the motion for reconsideration
filed by Spouses Fernandez and petitioner’s motion for clarification and intervention, for
lack of merit,16 thus:

We have carefully perused petitioner’s Motion and find the arguments raised therein a
mere rehash, if not a repetition, of the arguments raised in their petition, which have
already been thoroughly discussed and passed upon in our Decision.

Anent the movant Sofia Salandanan’s Motion for Clarification and Intervention, We
hereby deny the same on the ground that it is belatedly filed by virtue of the rendition of
Our Decision on June 27, 2003.

Section 2, Rule 19 of 1997 Rules of Civil Procedure expressly provides:

Section 2. Time to Intervene. – The motion to intervene may be filed at any time before
rendition of judgment by the trial court. x x x

Moreover, it is undisputed that on 31 July 2001, movant Sofia Salandanan represented by


petitioner has already instituted a Civil Case for Revocation/ Annulment of T.C.T.
246767 and Reconveyance before the Regional Trial Court of Manila, Branch 50 and
docketed as Civil Case No. 01101487. As such We find movant’s motion to be wanting
of merit as her rights are already fully protected in said separate proceeding.

WHEREFORE, the Motion for Reconsideration and Motion for Clarification and
Intervention are hereby DENIED for lack of merit.

SO ORDERED.17

Hence, herein petition anchored on the following assignment of errors:

1. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION


AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT INCLUDED
PETITIONER IN ITS ADVERSE JUDGMENT IN VIOLATION OF THE LATTER’S
CONSTITUTIONAL RIGHT TO DUE PROCESS DESPITE THE FACT THAT
PETITIONER WAS NOT PRIVY TO THE INSTANT CASE AND DOES NOT
DERIVE HER RIGHT TO STAY IN THE CONTESTED PROPERTY FROM THE
SPOUSES DELFIN AND CARMEN FERNANDEZ.

2. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION


AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT DENIED THE
MOTION FOR INTERVENTION BY PETITIONER DESPITE THE FACT IT WAS
ONLY BY VIRTUE OF ITS DECISION DATED JUNE 27, 2003 THAT PETITIONER
WAS INCLUDED IN THE EJECTMENT PROCEEDINGS, AND THE EARLIEST
OPPURTUNE TIME WHEN PETITIONER COULD HAVE INTERVENED WAS
AFTER THE COURT OF APPEALS RULED AGAINST HER.
3. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT DID NOT
TAKE INTO ACCOUNT THE ISSUE OF OWNERSHIP IN RESOLVING THE ISSUE
OF WHO HAS BETTER POSSESSION.

4. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION


AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT DID NOT
SUSPEND THE CASE DESPITE THE EQUITABLE CIRCUMSTANCES PRESENT
IN THE CASE AT BAR IN THE LIGHT OF THE AMAGAN VS. MARAMAG
CASE.18

Petitioner contends that the CA committed grave abuse of discretion when it included
petitioner in its decision despite the fact that she is not a party in the ejectment case, thus,
violating her right to due process; and considering that the court did not acquire
jurisdiction over her person, she cannot be bound by the Decision of the CA.

Petitioner also asserts that the CA committed grave abuse of discretion amounting to lack
or excess of jurisdiction when it denied petitioner’s motion for clarification and
intervention. According to her, she was constrained to file a motion for clarification and
intervention because the CA included her in its decision in spite of the fact that she was
not impleaded as a party to the unlawful detainer case.

Petitioner ascribes grave abuse of discretion when the CA failed to resolve the issue of
ownership in order to determine the party who has the better right to possess the subject
property. She asserts that the CA should have suspended the unlawful detainer case since
the ownership of the subject property is in issue.

Finally, petitioner maintains that she is the owner of the property by virtue of Transfer
Certificate of Title No. 9937 issued on October 2, 1947 by the Register of Deeds of
Manila. Hence, as the owner of the subject property, she has all the right to use, the right
to allow others to use and the right to exclude others from using the same. Petitioner
further claims that respondents were able to transfer the title of the subject property in
their name through manipulation wherein respondents asked her and her deceased
husband to sign a special power of attorney but later turned out to be a deed of donation.
As a matter of fact, upon learning of the said transfer, petitioner filed before the RTC of
Manila a case for annulment and/or revocation of the title.

We find the petition unmeritorious.

Let us first tackle the issue of whether petitioner should have been allowed to intervene
even after the CA had promulgated its Decision.

Sections 1 and 2 of Rule 19 of the Rules of Court provide:

Section 1. Who may intervene. – A person who has a legal interest in the matter in
litigation, or in the success of either of the parties, or an interest against both, or is so
situated as to be adversely affected by a distribution or other disposition of property in
the custody of the court or of an officer thereof may, with leave of court, be allowed to
intervene in the action. The court shall consider whether or not the intervention will
unduly delay or prejudice the adjudication of the rights of the original parties, and
whether or not the intervenor’s rights may be fully protected in a separate
proceeding.

Section 2. Time to intervene. – The motion to intervene may be filed at any time before
rendition of judgment by the trial court. A copy of the pleading-in-intervention shall be
attached to the motion and served on the original parties.

As a rule, intervention is allowed at any time before rendition of judgment by the trial
court. After the lapse of this period, it will not be warranted anymore because
intervention is not an independent action but is ancillary and supplemental to an existing
litigation.19 The permissive tenor of the provision on intervention shows the intention of
the Rules to give to the court the full measure of discretion in permitting or disallowing
the same,20 but under Section 1, Rule 19 of the Rules of Court, the courts are nevertheless
mandated to consider several factors in determining whether or not to allow
intervention. The factors that should be reckoned are whether intervention will unduly
delay or prejudice the adjudication of the rights of the original parties and whether the
intervenor’s rights may be fully protected in a separate proceeding.

Keeping these factors in mind, the courts have to give much consideration to the fact that
actions for ejectment are designed to summarily restore physical possession to one who
has been illegally deprived of such possession.21 It is primarily a quieting process
intended to provide an expeditious manner for protecting possession or right to
possession without involvement of the title.22 In Five Star Marketing Co., Inc. v. Booc,23
the Court elucidated the purpose of actions for ejectment in this wise:

Forcible entry and unlawful detainer cases are summary proceedings designed to provide
for an expeditious means of protecting actual possession or the right to the possession of
the property involved. It does not admit of a delay in the determination thereof. It is a
"time procedure" designed to remedy the situation. Stated in another way, the avowed
objective of actions for forcible entry and unlawful detainer, which have purposely
been made summary in nature, is to provide a peaceful, speedy and expeditious
means of preventing an alleged illegal possessor of property from unjustly
continuing his possession for a long time, thereby ensuring the maintenance of peace
and order in the community; otherwise, the party illegally deprived of possession might
feel the despair of long waiting and decide as a measure of self-protection to take the law
into his hands and seize the same by force and violence. And since the law discourages
continued wrangling over possession of property for it involves perturbation of social
order which must be restored as promptly as possible, technicalities or details of
procedure which may cause unnecessary delays should accordingly and carefully be
avoided.24 (Emphasis supplied)

Thus, as stated above, ejectment cases must be resolved with great dispatch.
Moreover, petitioner's intervention in the ejectment case would not result in a complete
adjudication of her rights. The issue raised by petitioner is mainly that of ownership,
claiming that the property in dispute was registered and titled in the name of respondents
through the use of fraud. Such issue cannot even be properly threshed out in an action for
ejectment, as Section 18, Rule 70 provides that "[t]he judgment rendered in an action for
forcible entry or detainer shall be conclusive with respect to the possession only and shall
in no wise bind the title or affect the ownership of the land or building. x x x" In Malison
v. Court of Appeals,25 the Court held thus:

Verily, in ejectment cases, the word "possession" means nothing more than actual
physical possession, not legal possession, in the sense contemplated in civil law. The only
issue in such cases is who is entitled to the physical or material possession of the property
involved, independently of any claim of ownership set forth by any of the party-litigants.
It does not even matter if the party's title to the property is questionable.26 (Emphasis
supplied)

Hence, a just and complete determination of petitioner's rights could actually be had in
the action for annulment, revocation and reconveyance of title that she had previously
filed, not in the instant action for ejectment.

It is likewise for this reason that petitioner is not an indispensable party in the instant
case. The records bear out that the disputed property is in the possession of Spouses
Fernandez. Even petitioner does not allege that she was in the possession of subject
premises prior to or during the commencement of the ejectment proceedings. Since her
claim of ownership cannot be properly adjudicated in said action, she is, therefore, not an
indispensable party therein.

It is also misleading for petitioner to say that the earliest opportune time when petitioner
could have intervened was after the CA ordered her to vacate the subject property in its
Decision dated June 27, 2003. As early as when the sheriff attempted to implement the
writ of execution pending appeal issued by the RTC, when she pleaded not to be evicted
from the subject premises, she already became aware that the RTC had ordered to place
respondents in possession of the subject property pending appeal with the RTC. That
would have been the proper time for her to intervene if she truly believed that her
interests would be best protected by being a party to the ejectment case.

Verily, allowing petitioner's intervention at this late stage of the ejectment proceedings
would only cause undue delay without affording petitioner the relief sought since the
issue of ownership cannot be determined with finality in the unlawful detainer case.

There is also no merit to petitioner's argument that it was grave abuse of discretion for the
CA to include her in its Decision because she is not a party to the ejectment case, and
neither is she claiming right to possession under the Spouses Fernandez, but as its alleged
rightful owner.
Note that the MeTC, RTC, and the CA unanimously found that the disputed property is
presently registered under the Torrens System in the name of respondents. The lower
courts then concluded that respondents presented the best proof to establish the right to
possess the same. It should be borne in mind that unless the case falls under one of the
recognized exceptions, to wit:

(1) when the findings are grounded entirely on speculation, surmises or conjectures; (2)
when the inference made is manifestly mistaken, absurd or impossible; (3) when there is
grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts;
(5) when the findings of fact are conflicting; (6) when in making its findings the Court of
Appeals went beyond the issues of the case, or its findings are contrary to the admissions
of both the appellant and the appellee; (7) when the findings are contrary to the trial
court; (8) when the findings are conclusions without citation of specific evidence on
which they are based; (9) when the facts set forth in the petition as well as in the
petitioner’s main and reply briefs are not disputed by the respondent; (10) when the
findings of fact are premised on the supposed absence of evidence and contradicted by
the evidence on record; and (11) when the Court of Appeals manifestly overlooked
certain relevant facts not disputed by the parties, which, if properly considered, would
justify a different conclusion.27

factual findings of the trial court are conclusive on the parties and not reviewable by this
Court, more so when the CA affirms the factual findings of the trial court.28 This case
does not fall under any of the exceptions, thus, the factual finding of the lower courts,
that the new registered owners of the subject premises are respondents, must be respected
and upheld by this Court.

In Malison, the Court emphasized that when property is registered under the Torrens
system, the registered owner's title to the property is presumed legal and cannot be
collaterally attacked, especially in a mere action for unlawful detainer.29 In this particular
action where petitioner's alleged ownership cannot be established, coupled with the
presumption that respondents' title to the property is legal, then the lower courts are
correct in ruling that respondents are the ones entitled to possession of the subject
premises.

Petitioner's ownership not having been fully established in this case, she cannot,
therefore, claim that the lower court's decision divesting the Spouses Fernandez of
possession should not apply to her. In Stilgrove v. Sabas,30 the Court held that:

A judgment directing a party to deliver possession of a property to another is in


personam. x x x Any judgment therein is binding only upon the parties properly
impleaded and duly heard or given an opportunity to be heard. However, this rule
admits of the exception, such that even a non-party may be bound by the judgment
in an ejectment suit where he is any of the following: (a) trespasser, squatter or agent of
the defendant fraudulently occupying the property to frustrate the judgment; (b)
guest or occupant of the premises with the permission of the defendant; (c) transferee
pendente lite; (d) sublessee; (e) co-lessee; or (f) member of the family, relative or privy
of the defendant.31 (Emphasis supplied)

Of particular significance is the fact that in Spouses Fernandez's Answer, they never
alleged that petitioner was in actual possession of the disputed property. In fact, in said
Answer, they stated that it was Delfin Fernandez, Jr. who has continuously occupied the
premises since time immemorial and that petitioner resides in her house in Dasmariñas,
Cavite. Likewise worthy of note is the fact that the Spouses Fernandez never refuted in
their Opposition to Amended Motion to Break Open the allegation of respondents that
petitioner was merely fetched by the Spouses Fernandez from her residence in
Dasmariñas, Cavite on the day (February 20, 2003) that the sheriff was to implement the
writ of execution, and placed her inside the subject premises so the old woman could
plead for mercy from the executing sheriff. In the petition for review dated April 3, 2003
filed with the CA, Spouses Fernandez admitted that it was only after the RTC issued its
Order dated February 10, 2003, denying the motion for reconsideration of the Order for
issuance of the writ of execution, that petitioner took possession of the subject premises.32

Taking the foregoing into account, it is clear that petitioner, even though a non-party, is
bound by the judgment because aside from being a relative of or privy to Spouses
Fernandez, she is also acting as their agent when she occupied the property after the RTC
ordered execution pending appeal in order to frustrate the judgment.

WHEREFORE, the petition for review on certiorari is DENIED. The assailed Decision
of the Court of Appeals dated June 27, 2003 affirming the decision of the Regional Trial
Court and its Resolution dated September 3, 2003 in CA-G.R. SP No. 76336, denying the
petition for clarification and intervention filed by Sofia Aniosa Salandanan, are
AFFIRMED.

Cost against petitioner.

SO ORDERED.