***How to determine jurisdiction in accion publiciana and accion reinvindicatoria

(1) The actions of forcible entry and unlawful detainer are within the exclusive and original jurisdiction
of the MTC, MeTC and MCTC (Sec. 33[2], BP 129; RA 7691) and shall be governed by the rules on
summary procedure irrespective of the amount of damages or rental sought to be recovered (Sec. 3, Rule
70).
(2) In actions for forcible entry, two allegations are mandatory for the MTC to acquire jurisdiction: (a)
plaintiff must allege his prior physical possession of the property; and (b) he must also allege that he was
deprived of his possession by force, intimidation, strategy, threat or stealth. If the alleged dispossession
did not occur by any of these means, the proper recourse is to file not an action for forcible entry but a
plenary action to recover possession (Benguet Corp. Cordillera Caraballo Mission, GR 155343, Sept. 2,
2005).
(3) Both actions must be brought within one year from the date of actual entry on the land, in case of
forcible entry, and from the date of last demand, in case of unlawful detainer (Valdez vs. CA, GR 132424,
May 2, 2006).
(4) Jurisdiction is determined by the allegations of the complaint. The mere raising of the issue of
tenancy does not automatically divest the court of jurisdiction because the jurisdiction of the court is
determined by the allegations of the complaint and is not dependent upon the defenses set up by the
defendant (Marino, Jr. vs. Alamis, 450 SCRA 198 [2005]).

THIRD DIVISION

ESTATE OF SOLEDAD MANANTAN, G.R. No. 145867

herein represented by GILBERT
MANANTAN, Present:
Petitioner,
YNARES-SANTIAGO,
Chairperson,
CARPIO MORALES,*
- versus – CHICO-NAZARIO,
NACHURA, and
PERALTA, JJ.

ANICETO SOMERA, Promulgated:

Respondent.
April 7, 2009
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION
CHICO-NAZARIO, J.:

Before Us is a Petition[1] for Review on Certiorari under Rule 45 of the Rules of Court seeking to
reverse the Decision[2] dated 10 May 2000 and Resolution[3]dated 18 October 2000 of the Court of
Appeals in CA-G.R. SP No. 55891.

The facts gathered from the records are as follows:

On 10 March 1998, Soledad Manantan filed with the Municipal Trial Court in Cities (MTCC),
Baguio City, Branch 1, a Complaint for ejectment and damages against respondent Aniceto Somera and
a certain Presentacion Tavera (Tavera),[4] docketed as Civil Case No. 10467.

Manantan alleged in her Complaint that she was the owner of a 214- square meter parcel of land
located in Fairview Subdivision, Baguio City (subject property), as evidenced by Transfer Certificate of
Title No. 54672, issued in her name by the Registry of Deeds of Baguio City. After causing a relocation
survey of the subject property, she discovered that respondent and Tavera occupied certain portions
thereof [disputed portions]. Manantan advised respondent and Tavera to vacate the disputed portions as
soon as she would decide to sell the subject property to an interested buyer. Later, a prospective buyer
approached Manantan about the subject property. However, upon learning that respondent and Tavera
occupied some portions of the subject property, the prospective buyer decided not to proceed with the
sale until after respondent and Tavera vacated the same. Manantan repeatedly requested respondent
and Tavera to abandon the disputed portions of the subject property, but the two refused. Hence,
Manantan hired the services of a lawyer who immediately sent a formal letter of demand to respondent
and Tavera requesting them to leave the disputed portions. Respondent and Tavera, however, ignored
the demand letter. Manantan submitted the matter before the barangay justice system of Fairview
Subdivision, Baguio City, but the parties failed to reach a settlement. Upon issuance by
the barangay secretary of a Certificate to File Action, Manantan instituted Civil Case No. 10467.

In her Complaint in Civil Case No. 10467, Manantan prayed that respondent, Tavera, and all
persons claiming rights under them, be ordered to vacate the portions of the subject property they were
occupying; that respondent and Tavera be directed to pay her P600.00 and P400.00, respectively, every
month, as reasonable compensation for the use and occupation of the disputed portions of the subject
property, computed from the filing of the Complaint until possession of the said portions has been
restored to her; that respondent and Tavera be instructed to pay her P30,000.00 as actual
damages, P20,000.00 as attorney’s fees, litigation expenses, and costs of suit. [5]

Respondent and Tavera filed a Joint Answer to Manantan’s Complaint in Civil Case No. 10467. In
their Joint Answer, respondent and Tavera averred that the MTCC had no jurisdiction over Civil Case No.
10467, because it was neither an action for forcible entry nor for unlawful detainer. The Complaint did not
allege that Manantan was deprived of possession of the disputed portions by force, intimidation, threat,
strategy, or stealth, which would make a case for forcible entry. It also did not state that respondent and
Tavera withheld possession of the disputed portions from Manantan after expiration or termination of the
right to hold possession of the same by virtue of an express or implied contract, which would build a case
for unlawful detainer. Respondent and Tavera argued that even if there was dispossession, it was
evident from the face of the Complaint that it was not committed through any of the means enumerated
under Rule 70 of the Rules of Court and, thus, forcible entry or unlawful detainer could not be the proper
remedy for Manantan.[6]

Respondent claimed in the Joint Answer that he and his family had been using one of the
disputed portions of the subject property as driveway since the latter part of 1970. The said portion was
the only means by which he and his family could gain access to their residence. He even caused the
improvement and cementing of the same a long time ago. Tavera also explained in the Joint Answer that
she had been utilizing the other disputed portion of the subject property as an access road to her
residence. Her tenement, which consisted of concrete and permanent structures, bore witness to the fact
that her occupancy of the portion in dispute was continuous and uninterrupted. [7]

Respondent and Tavera additionally asseverated in their Joint Answer that it would be unjust to
prohibit them from using the disputed portions which serve as their only means of ingress or egress to or
from their respective residences from or to the main road. Their use of said portions had been
recognized by the Bayot family, Manantan’s predecessors-in-interest. It was only in 1997, after Manantan
bought the subject property from the Bayot family, that Manantan started to claim ownership even of the
portions they had been using. Respondent and Tavera contended that they could not just relinquish their
right to the disputed portions and yield to Manantan’s demand, considering that the latter’s claim was
based merely on a relocation survey. “[J]ust to buy peace of mind and maintain cordial relations” with
Mananatan, respondent and Tavera alleged that they “walked the proverbial mile and show[ed] their
interest to pay” Manantan the equivalent amount of the disputed portions, but Manantan ignored their
proposal and insisted that they buy the whole of the subject property.
 Respondent and Tavera alternatively argued in their Joint Answer that in case Manantan would
be declared as the lawful owner of the subject property, the MTCC should not disregard the fact that they
were “builders in good faith.” As builders in good faith, they should be allowed to pay a reasonable price
for theportions of the subject property on which their driveway/access road, and other improvements were
situated.

At the end of their Joint Answer, respondent and Tavera asked the MTCC to dismiss Manantan’s
Complaint; or in case their driveway/access road and other improvements were found to be encroaching
on Manantan’s property, to declare them builders in good faith who should be allowed to purchase
the portions on which their driveway/access road and other improvements were located and to award
them their counterclaims for moral damages and P35,000.00 attorney’s fees.[8]

After submission of the parties’ respective position papers and other pleadings, the MTCC
rendered a Decision[9] in Civil Case No. 10467 on 21 May 1999, favoring Manantan. The MTCC ruled
that it had jurisdiction over the case and that respondent and Tavera were not builders in good faith. It
ordered respondent and Tavera to pay Manantan the amount of P600.00 and P400.00, respectively, per
month, as reasonable compensation for the use and occupancy of the disputed portions of the subject
property, counted from the date of the filing of the Complaint up to the time respondent and Tavera would
actually vacate the same. It further ordered respondent and Tavera to jointly and severally pay Manantan
the amount of P20,000.00 as attorney’s fees and litigation expenses.

Respondent and Tavera appealed the MTCC Decision before the Regional Trial Court
(RTC), Baguio City, Branch 5. Their appeal was docketed as Civil Case No. 4435-R. On 29 October
1999, the RTC promulgated its Decision[10] affirming in toto the appealed MTCC Decision. Only
respondent elevated the case to the Court of Appeals since Tavera opted not to appeal anymore.

Respondent’s appeal before the Court of Appeals was docketed as CA-G.R. SP No.
55891. During its pendency, Manantan died on 20 January 2000.[11] Almost four months later, on 10 May
2000, the Court of Appeals rendered its Decision setting aside the Decisions of both the RTC and the
MTCC and dismissing Manantan’s Complaint in Civil Case No. 10467. The appellate court held that
Manantan’s Complaint before the MTCC failed to allege facts constitutive of forcible entry or unlawful
detainer. The allegations in the Complaint merely presented a controversy arising from a boundary
dispute, in which case, the appropriate remedy available to Manantan should have been the plenary
action for recovery of possession within the jurisdiction of the RTC. Consequently, the Court of Appeals
concluded that the MTCC had no jurisdiction over the Complaint in Civil Case No. 10467. [12]

The fallo of the Court of Appeals Decision reads:

WHEREFORE, prescinding from the foregoing disquisition, the petition for review
is hereby GIVEN DUE COURSE. The assailed Decision dated October 29, 1999 which
was rendered by Branch 5 of the Regional Trial Court of Baguio City, in Civil Case No.
4435-R, affirming in toto the other assailed Decision dated May 21, 1999 rendered by
the First Branch of the Municipal Trial Court in Cities of Baguio City in Civil Case No.
10467, entitled “SOLEDAD MANANTAN v. ANICETO SOMERA and PRESENTACION
TAVERA, and all persons claiming rights under them,” are hereby both REVERSED
AND SET ASIDE and another one entered DISMISSING said Civil Case No. 10467.

Accordingly, let a writ of injunction issue permanently enjoining public respondent

Judge Antonio M. Esteves and all persons acting in his behalf or orders to cease and
desist from further enforcing the assailed decisions.

Manantan’s counsel filed a Motion for Reconsideration[13] of the afore-mentioned Decision of the
Court of Appeals but it was denied by the same court in the Resolution dated 18 October 2000.

Hence, herein petitioner, Gilbert Manantan, representing the Estate of the late Soledad
Manantan, filed the instant Petition for Review[14] before us raising the following issues:

I.

WHETHER OR NOT THE MUNICIPAL TRIAL COURT IN CITIES, BAGUIO CITY,

BRANCH 1, HAD THE JURISDICTION OVER THE ACTION - EJECTMENT AND
DAMAGES ENTITLED “SOLEDAD MANANTAN, PLAINTIFF, V. ANICETA SOMERA
AND PRESENTACION TAVERA, AND ALL PERSONS CLAIMING RIGHTS UNDER
THEM, DEFENDANTS;

II.

WHETHER A PORTION OF PETITIONER’S LAND ENCROACHED BY RESPONDENT

CAN BE RECOVERED THROUGH AN ACTION [FOR] EJECTMENT.

In the main, petitioner argues that the Complaint is in the nature of an action for unlawful detainer
over which the MTCC had jurisdiction.[15]

An action for forcible entry or unlawful detainer is governed by Rule 70 of the Rules of Court,
Section 1 of 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 Courtagainst 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 ours.)

Unlawful detainer is a summary action for the recovery of possession of real property. [16] This
action may be filed by 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.[17]

In unlawful detainer cases, the possession of the defendant was originally legal, as his
possession was permitted by the plaintiff on account of an express or implied contract between
them. However, defendant’s possession became illegal when the plaintiff demanded that defendant
vacate the subject property due to the expiration or termination of the right to possess under their
contract, and defendant refused to heed such demand.[18]

A case for unlawful detainer must be instituted before the proper municipal trial court or
metropolitan trial court within one year from unlawful withholding of possession. Such one year period
should be counted from the date of plaintiff’s last demand on defendant to vacate the real property,
because only upon the lapse of that period does the possession become unlawful. [19]

Well-settled is the rule that the jurisdiction of the court, as well as the nature of the action, are
determined by the allegations in the complaint.[20] To vest the court with the jurisdiction to effect the
ejectment of an occupant from the land in an action for unlawful detainer, it is necessary that the
complaint should embody such a statement of facts clearly showing attributes of unlawful detainer cases,
as this proceeding is summary in nature.[21] The complaint must show on its face enough ground to give
the court jurisdiction without resort to parol testimony.[22]

Thus, in order that a municipal trial court or metropolitan trial court may acquire jurisdiction in an
action for unlawful detainer, it is essential that the complaint specifically allege the facts constitutive of
unlawful detainer.[23] The jurisdictional facts must appear on the face of the complaint. When the
complaint fails to aver facts constitutive of unlawful detainer, an action for unlawful detainer is not a
proper remedy and, thus, the municipal trial court or metropolitan trial court has no jurisdiction over the
case.[24]

The pertinent allegations in Manantan’s Complaint before the MTCC are faithfully reproduced
below:

3. That [Manantan] is the owner in fee simple of that parcel of land, situated in
Res. Section “K,” Baguio City, with an area of 214 square meters, designated as Lot 7,
Pcs-CAR-000062, and which may be more particularly described in and evidenced by
Transfer Certificate of Title No. T-54672 of the Registry of Deeds for the City of Baguio;

4. That when she caused the relocation survey of her said property above-
mentioned, she discovered that the [herein respondent and Tavera] had occupied
portions thereof, by reason of which she called their attention with a request that they
vacate their respective areas as soon as she would have need of the same, or when she
decides to sell the same to any interested buyer;

5. That only recently, she wanted to sell her property above-mentioned to an

interested buyer, but that upon knowing of the [respondent and Tavera’s] encroachments,
the prospective buyer decided not to proceed with the sale until after the property shall
have been first vacated by the [respondent and Tavera];

6. That she asked the [respondent and Tavera] to vacate her property, but that
they refused to do so, and that after making more demands which were all ignored by the
[respondent and Tavera], [Manantan] was forced to consult her lawyer, who immediately
wrote them a final formal demand to vacate her land, but to no avail;

7. That [Manantan] also brought her problem to the attention of the Barangay
Captain of Fairview Subdivision Barangay, by way of a letter, dated January 21 1998,
copy of which is attached hereto and made part hereof as Annex “A,” the same being
self-explanatory;

8. That despite efforts at the Barangay level of justice, no amicable settlement or

compromise agreement was arrived at, as may be evidenced by a Certification to File
Action, dated February 8, 1998, signed and issued by the Pangkat Secretary Shirley
Pagkangan and duly attested by the Pangkat Chairman Rogelio Laygo, copy of which is
hereto attached and made part hereof as Annex “B.”[25]

Noticeably, the Complaint does not allege facts showing compliance with the prescribed one
year period to file an action for unlawful detainer. It does not state the material dates that would have
established that it was filed within one year from the date of Manantan’s last demand upon respondent to
vacate the disputed portion of land. Such allegations are jurisdictional and crucial, because if the
complaint was filed beyond the prescribed one year period, then it cannot properly qualify as an action for
unlawful detainer over which the MTCC can exercise jurisdiction. It may be an accion
publiciana or accion reivindicatoria.

Accion publiciana is the plenary action to recover the right of possession, which should be
brought before the proper regional trial court when dispossession has lasted for more than one year. It
is an ordinary civil proceeding to determine the better right of possession of realty independently of title.
In other words, if at the time of the filing of the complaint, more than one year has lapsed since defendant
unlawfully withheld possession from plaintiff, the action will not be for illegal detainer, but an accion
publiciana. Accion reivindicatoria, meanwhile, is an action to recover ownership, as well as possession,
which should also be brought before the proper regional trial court in an ordinary civil proceeding.[26]

Further, it appears from the allegations in the Complaint that the respondent was already in
possession of the disputed portion at the time Manantan bought the subject property from the Bayot
family, and it was only after the conduct of a relocation survey, which supposedly showed that respondent
was encroaching on the subject property, did Manantan begin asserting her claim of ownership over the
portion occupied and used by respondent. Clearly, respondent’s possession of the disputed portion
was not pursuant to any contract, express or implied, with Manantan, and, resultantly, respondent’s
right of possession over the disputed portion is not subject to expiration or termination. At no point
can it be said that respondent’s possession of the disputed portion ceased to be legal and became an
unlawful withholding of the property from Manantan.[27]

Since the Complaint in Civil Case No. 10467 failed to satisfy on its face the jurisdictional
requirements for an action for unlawful detainer, the Court of Appeals was correct in holding that the
MTCC had no jurisdiction over the said Complaint and should have dismissed the same. There is no
possible argument around the lack of jurisdiction of MTCC over Civil Case No. 10467. In Laresma v.
Abellana,[28] the Court pronounced:

It is axiomatic that the nature of an action and the jurisdiction of a tribunal are
determined by the material allegations of the complaint and the law at the time the action
was commenced. Jurisdiction of the tribunal over the subject matter or nature of an
action is conferred only by law and not by the consent or waiver upon a court which,
otherwise, would have no jurisdiction over the subject matter or nature of an action. Lack
of jurisdiction of the court over an action or the subject matter of an action cannot be
cured by the silence, acquiescence, or even by express consent of the parties. If the
court has no jurisdiction over the nature of an action, it may dismiss the same ex mero
motu or motu proprio. A decision of the court without jurisdiction is null and void; hence,
it could never logically become final and executory. Such a judgment may be attacked
directly or collaterally.
 Petitioner raises a second issue before us: whether petitioner Estate of the late Soledad
Manantan can recover the portion of the subject property by an action for ejectment. [29] It bears to stress
that Manantan’s Complaint is dismissed herein for its defects, i.e., its failure to allege vital facts in an
action for unlawful detainer over which the MTCC has jurisdiction. Since Civil Case No. 10467 is already
dismissible upon this ground, it is no longer necessary to discuss whether petitioner availed itself of the
proper remedy to recover the disputed portion of land from respondent. Resolving the second issue shall
be a mere surplusage and obiter dictum. If petitioner seeks an answer to said issue as reference for its
future action, suffice it to say that we do not render advisory opinions. The determination of the remedy
to avail itself of must be done by petitioner with the guidance of its counsel, they being fully cognizant of
the facts giving rise to the controversy and the evidence on hand.

WHEREFORE, the Decision dated 10 May 2000 and Resolution dated 18 October 2000 of the
Court of Appeals in CA-G.R. SP No. 55891 are herebyAFFIRMED in toto. No cost.

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

CONCHITA CARPIO MORALES ANTONIO EDUARDO B. NACHURA

Associate Justice Associate Justice

DIOSDADO M. PERALTA
Associate Justice
 ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation before the case
was assigned to the writer of the opinion of the Court’s Division.

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, it
is hereby certified that the conclusions in the above Decision were reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO
Chief Justice

* Per Special Order No. 602, dated 20 March 2009, signed by Chief Justice Reynato S. Puno,
designating Associate Justice Conchita Carpio Morales to replace Associate Justice Ma. Alicia
Austria-Martinez, who is on official leave.
[1] Rollo, pp. 10-25.
[2] Penned by Associate Justice Martin S. Villarama, Jr. with Associate Justices Romeo J. Callejo
Sr. (retired member of this Court) and Renato C. Dacudao, concurring; rollo, pp. 29-33.
[3] Id. at 27.
[4] Id. at 48-51.
[5] Id.
[6] Id. at 52-56.
[7] Id.
[8] Id.
[9] Records, pp. 127-131.
[10] Id. at 190-196.
[11] Rollo, p. 10.
[12] Id. at 33.
[13] CA rollo, pp. 219-226.
[14] Rollo, p. 14.
[15] Id. at 14-18.
[16] Valdez, Jr. v. Court of Appeals, G.R. No. 132424, 4 May 2006, 489 SCRA 369, 377-378.
[17] Section 1, Rule 70 of the Revised Rules of Court.
[18] Valdez, Jr. v. Court of Appeals, supra note 16 at 378; Sarmiento v. Court of Appeals, G.R. No.
116192, 16 November 1995, 250 SCRA 108, 114; Espiritu v. Court of Appeals, 368 Phil. 669,
674-675 (1999).
[19] Sarmiento v. Court of Appeals, id. at 115; Lopez v. David, Jr., G.R. No. 152145, 30 March
2004, 426 SCRA 535, 542; Varona v. Court of Appeals, G.R. No. 124148, 20 May 2004, 428
SCRA 577, 583-584.
[20] Sarmiento v. Court of Appeals, id. at 114; Espiritu v. Court of Appeals, supra note 18 at
675; Lopez v. David, Jr., id. at 540.
[21] Valdez, Jr. v. Court of Appeals, supra note 16 at 378; Sarmiento v. Court of Appeals, id. at
116; Lopez v. David, Jr., id. at 542.
[22] Id.
[23] Sarona v. Villegas, 131 Phil. 365, 373 (1968); Munoz v. Court of Appeals, G.R. No. 102693, 23
September 1992, 214 SCRA 216, 223-224.
[24] Valdez, Jr. v. Court of Appeals, supra note 16 at 379; Sarmiento v. Court of Appeals, supra
note 18 at 117.
[25] Records, pp. 1-2.
[26] Valdez, Jr. v. Court of Appeals, supra note 16 at 376-377; Sarmiento v. Court of
Appeals, supra note 18 at 117; Lopez v. David, Jr., supra note 19 at 543.
[27] Dela Paz v. Panis, 315 Phil. 238, 245-246 (1995).
[28] G.R. No. 140973, 11 November 2004, 442 SCRA 156, 169.
[29] The two forms of ejectment suit are actions for forcible entry and actions for unlawful detainer.
(See Habagat Grill v. DMC-Urban Property Developer, Inc., G.R. No. 155110, 31 March 2005,
454 SCRA 653, 670-671.)

SECOND DIVISION

[G.R. No. 174346, September 12, 2008]

FERNANDA GEONZON VDA. DE BARRERA AND JOHNNY OCO, JR., PETITIONERS, VS. HEIRS OF
VICENTE LEGASPI, REPRESENTED BY PEDRO LEGASPI, RESPONDENTS.

DECISION

CARPIO MORALES, J.:

Under review before this Court is the July 31, 2006 Decision of the Court of Appeals, [1] which affirmed that
of the Regional Trial Court, Branch 16, of Tangub City in Civil Case No. TC-97-001, ordering the
defendants-petitioners herein, Fernanda Geonzon vda. de Barrera and Johnny Oco. Jr. to return
possession of the subject property to the plaintiffs-herein respondents, Heirs of Vicente Legaspi.

On October 1, 1996, petitioner Johnny Oco Jr. (Oco), said to be a "peace officer connected with the
PNP," accompanied by "unidentified CAFGU members," forced his way into respondents' 0.9504-hectare
irrigated farmland located at Liloan, Bonifacio, Misamis Occidental. After dispossessing respondents of
the property, Oco and company used a tractor to destroy the planted crops, took possession of the land,
and had since tended it.[2]
Respondents thus filed on February 7, 1997 a complaint before the Regional Trial Court of Tangub City
for Reconveyance of Possession with Preliminary Mandatory Injunction and Damages[3] against
petitioners.

In their Answer, petitioners claimed that the subject land forms part of a three-hectare property described
in OCT No. P-447 issued on February 10, 1956 in the name of Andrea Lacson who sold a 2-hectare
portion thereof to Eleuterio Geonzon who, in turn, sold 1.1148 thereof to his sister petitioner Fernanda
Geonzon vda. de Barrera (Fernanda).[4]

Respondents, on the other hand, asserted that the land was occupied, possessed and cultivated by their
predecessor-in-interest Vicente Legaspi and his wife Lorenza since 1935;[5] after a subdivision survey
was conducted in November 30, 1976, it was found out that the land formed part of the titled property of
Andrea Lacson;[6] and despite this discovery, they never filed any action to recover ownership thereof
since they were left undisturbed in their possession,[7] until October 1, 1996 when petitioners forced their
way into it.

Petitioners raised the issue of ownership as a special affirmative defense. [8] In their Memorandum,
however, they questioned the jurisdiction of the RTC over the subject matter of the complaint,
the assessed value of the land being only P11,160,[9] as reflected in Tax Declaration No. 7565.[10]

By Decision of November 27, 1998, the trial court found for respondents, disposing as follows:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs [herein respondents] and against the
defendants [-herein petitioners]:

1. Ordering the latter to return the possession of the land in question to the plaintiffs and

2. Ordering the latter to desist from further depriving and disturbing plaintiffs' peaceful possession
thereof, unless there be another court judgment to the contrary.

SO ORDERED.
On the issue of jurisdiction over the subject matter, the trial court, maintaining that it had, held:
The Court is not persuaded by [the defendants'] arguments. What determines the nature of the action as
well as the jurisdiction of the [c]ourt are the facts alleged in the complaint and not those alleged in the
answer of the defendants.

xxxx

In [p]ar. 2 of plaintiffs' complaint, the land in question was described as a riceland "situated at Liloan,
Bonifacio, Misamis Occ. and declared under [T]ax [D]eclaration No. 7564 in the name of Vicente Legaspi
and bounded on the north by a creek, on the east Sec. 12, on the south Lot No. 007 and on the west also
by Lot No. 007 which tax declaration cancels former [T]ax [D]eclaration No. 12933 under the name of
Lorenza Bacul Legaspi which likewise cancels [T]ax [D]eclaration No. 5454 covering the bigger portion of
the land under which the land described under [T]ax [D]eclaration No. 7565 is part and parcel thereof
[sic]; the present estimated value being P50,000."[11] (Emphasis and underscoring supplied)
Petitioners thereupon appealed to the Court of Appeals which affirmed the trial court's disposition of the
issue of jurisdiction over the subject matter.

On the merits, the appellate court affirmed too the trial court's decision, finding that "both testimonial and
documentary evidence on record established that appellees, through their predecessors-in-interest, have
been in peaceful, continuous, public and actual possession of the property in dispute even before the
year 1930."[12]

The appellate court emphasized that in an accion publiciana, the only issue involved is the determination
of possession de jure.[13]

Hence, the present petition for review which raises the following issues:
I. . . . WHETHER OWNERSHIP AND TITLE CANNOT BE AN ISSUE TO DETERMINE WHO HAS A
BETTER RIGHT [TO] THE PORTION LITIGATED; AND

II. WHETHER . . . THE NATURE OF THE ACTION AS WELL AS THE JURISDICTION OF THE COURT
DEPEND ON THE FACTS AS ALLEGED IN THE COMPLAINT.[14]
For obvious reasons, the issue of lack of jurisdiction over the subject matter shall be first considered.

Section 33 of Batas Pambansa Bilang 129, (the Judiciary Reorganization Act of 1980), as amended by
Republic Act No. 7691 provides for the jurisdiction of metropolitan trial courts, municipal trial courts and
municipal circuit trial courts, to wit:
xxxx

(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real
property, or any interest therein where the assessed value of the property or interest therein does
not exceed Twenty thousand pesos (P20,000.00)or, in civil actions in Metro Manila, where such
assessed value does not exceed Fifty thousand pesos (P50,000.00) exclusive of interest, damages of
whatever kind, attorney's fees, litigation expenses and costs: Provided, That in cases of land not declared
for taxation purposes, the value of such property shall be determined by the assessed value of the
adjacent lots. (Emphasis, italics and underscoring supplied)
Before the amendments introduced by Republic Act No. 7691, the plenary action ofaccion publiciana was
to be brought before the regional trial court.[15] With the modifications introduced by R.A. No. 7691 in
1994, the jurisdiction of the first level courts has been expanded to include jurisdiction over other real
actions where the assessed value does not exceed P20,000, P50,000 where the action is filed in Metro
Manila. The first level courts thus have exclusive original jurisdiction over accion publiciana and accion
reivindicatoria where the assessed value of the real property does not exceed the aforestated amounts.
Accordingly, the jurisdictional element is the assessed value of the property.

Assessed value is understood to be "the worth or value of property established by taxing authorities on
the basis of which the tax rate is applied. Commonly, however, it does not represent the true or market
value of the property."[16]

The subject land has an assessed value of P11,160 as reflected in Tax Declaration No. 7565, a common
exhibit of the parties. The bare claim of respondents that it has a value of P50,000 thus fails. The case,
therefore, falls within the exclusive original jurisdiction of the municipal trial court.

It was error then for the RTC to take cognizance of the complaint based on the allegation that "the
present estimated value [of the land is] P50,000," which allegation is, oddly, handwritten on the printed
pleading. The estimated value, commonly referred to as fair market value, [17] is entirely different from the
assessed value of the property.

Lack of jurisdiction is one of those excepted grounds where the court may dismiss a claim or a case at
any time when it appears from the pleadings or the evidence on record that any of those grounds exists,
even if they were not raised in the answer or in a motion to dismiss. [18] That the issue of lack of jurisdiction
was raised by petitioners only in their Memorandum filed before the trial court did not thus render them in
estoppel.

En passant, the Court notes that respondents' cause of action - accion publiciana is a wrong mode. The
dispossession took place on October 1, 1996 and the complaint was filed four months thereafter or on
February 7, 1997. Respondents' exclusion from the property had thus not lasted for more than one year
to call for the remedy of accion publiciana.

In fine, since the RTC has no jurisdiction over the complaint filed by respondents, all the proceedings
therein as well as the Decision of November 27, 1998, are null and void. The complaint should perforce
be dismissed. This leaves it unnecessary to still dwell on the first issue.

WHEREFORE, the petition is hereby GRANTED. The challenged July 31, 2006 Decision of the Court of
Appeals is SET ASIDE. The decision of Branch 16 of the Regional Trial Court of Tangub City in Civil
Case No. TC-97-001 is declared NULL and VOID for lack of jurisdiction.

SO ORDERED.

Quisumbing, (Chairperson), Tinga, Velasco, Jr., and Brion, JJ., concur.

Republic of the Philippines

Supreme Court

Manila

THIRD DIVISION
 G.R. No. 164560

Present:

YNARES-SANTIAGO, J.,

Chairperson,

CHICO-NAZARIO,

VELASCO, JR.,

NACHURA, and

PERALTA, JJ.

ANA DE GUIA SAN PEDRO

and ALEJO DOPEÑO,
Petitioners,

- versus -

HON. FATIMA G. ASDALA, in her capacity as

the Presiding Judge of the Regional Trial Court
of Quezon City, Branch 87; HON. MANUEL
TARO, in his capacity as the Presiding Judge
of the Metropolitan Trial Court of Quezon City,
Branch 42; and the HEIRS OF SPOUSES
APOLONIO V. DIONISIO and VALERIANA
DIONISIO (namely, ALLAN GEORGE R.
DIONISIO and ELEANOR R. DIONISIO, herein
represented by ALLAN GEORGE R. DIONISIO), Promulgated:
Respondents.
July 22, 2009
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

PERALTA, J.:
 This resolves the petition for certiorari under Rule 65 of the Rules of Court, praying that the
Resolutions[1] of the Court of Appeals (CA) dated September 15, 2003 and June 1, 2004, respectively, in
CA-G.R. SP No. 78978, be reversed and set aside.

The antecedent facts are as follows.

Sometime in July 2001, private respondents, heirs of spouses Apolonio and Valeriana Dionisio,
filed with the Metropolitan Trial Court (MeTC) of Quezon City, Branch 42, a Complaint[2] against herein
petitioners and Wood Crest Residents Association, Inc., for Accion Reivindicatoria, Quieting of Title and
Damages, with Prayer for Preliminary Mandatory Injunction. Private respondents alleged that subject
property located in Batasan Hills, Quezon City, with an assessed value ofP32,100.00, was titled in the
name of spouses Apolonio and Valeriana Dionisio; but petitioners, with malice and evident bad faith,
claimed that they were the owners of a parcel of land that encompasses and covers subject
property. Private respondents had allegedly been prevented from entering, possessing and using subject
property. It was further alleged in the Complaint that petitioners' Transfer Certificate of Title over their
alleged property was spurious. Private respondents then prayed that they be declared the sole and
absolute owners of the subject property; that petitioners be ordered to surrender possession of subject
property to them; that petitioners and Wood Crest and/or its members be ordered to pay actual and moral
damages, and attorney's fees.

Petitioners, for their part, filed a Motion to Dismiss [3] said complaint on the ground that the MeTC
had no jurisdiction over the subject matter of the action, as the subject of litigation was incapable of
pecuniary estimation.

The MeTC then issued an Order[4] dated July 4, 2002 denying the motion to dismiss, ruling
that, under Batas Pambansa (B.P.) Blg. 129, as amended, the MeTC had exclusive original jurisdiction
over actions involving title to or possession of real property of small value.

Petitioners' Motion for Reconsideration of said Order dated July 4, 2002 was denied.
 Petitioners assailed the aforementioned Order by filing a petition for certiorari with the Regional
Trial Court (RTC) of Quezon City, Branch 87. However, in its Decision[5] dated March 10, 2003, the RTC
dismissed the petition, finding no grave abuse of discretion on the part of the MeTC Presiding
Judge. The RTC sustained the MeTC ruling, stating that, in accordance with Section 33(3) of Republic
Act (R.A.) No. 7691, amending B.P. Blg. 129, the MeTC had jurisdiction over the complaint for Accion
Reivindicatoria, as it involves recovery of ownership and possession of real property located in Quezon
City, with an assessed value not exceeding P50,000.00. A Motion for Reconsideration[6] of the Decision
was filed by petitioners, but was denied in an Order[7] dated July 3, 2003.

Petitioners then filed with the Court of Appeals another petition for certiorari, insisting that both the
MeTC and RTC acted with grave abuse of discretion amounting to lack or excess of jurisdiction by not
ordering the dismissal of the complaint for Accion Reivindicatoria, for lack of jurisdiction over the
same. In the assailed CA Resolution dated September 15, 2003, the CA dismissed the petition outright,
holding that certiorari was not available to petitioners as they should have availed themselves of the
remedy of appeal. Petitioners' motion for reconsideration of the resolution of dismissal was denied per
Resolution[8] dated June 1, 2004.

Thus, petitioners filed the instant petition and, in support thereof, they allege that:

THE HONORABLE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF

DISCRETION AMOUNTING TO LACK OR IN (SIC) EXCESS OF JURISDICTION IN
DENYING THE PETITION FOR CERTIORARI AND FOR FAILURE TO RESOLVE THE
ISSUE RAISED IN THE CERTIORARI REGARDING THE JURISDICTION OF THE
METROPOLITAN TRIAL COURT TO TAKE COGNIZANCE OF A CASE OF ACCION
REINVINDICATORIA.

THE HONORABLE PUBLIC RESPONDENT FATIMA GONZALES-ASDALA, AS

PRESIDING JUDGE OF RTC BRANCH 87, QUEZON CITY, ACTED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF (SIC)
JURISDICTION IN DISMISSING THE PETITION FOR CERTIORARI AND IN
RESOLVING THAT A CASE OF ACCION REINVINDICATORIA IS WITHIN THE
JURISDICTION OF THE METROPOLITAN TRIAL COURT.
 THE HONORABLE PUBLIC RESPONDENT MANUEL TARO AS PRESIDING JUDGE
MeTC, BRANCH 42, QUEZON CITY, ACTED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR IN (SIC) EXCESS OF JURISDICTION IN SO TAKING
COGNIZANCE OF THE COMPLAINT FOR ACCION REINVINDICATORIA IN CIVIL
CASE NO. 27434 ENTITLED, “HEIRS OF SPS. APOLONIO V. DIONISIO AND
VALERIANA DIONISIO, ETC. VS. ANA DE GUIA SAN PEDRO, ET. AL.”[9]

The present Petition for Certiorari is doomed and should not have been entertained from the very
beginning.

The settled rule is that appeals from judgments or final orders or resolutions of the CA should be by
a verified petition for review on certiorari, as provided for under Rule 45 of the Revised Rules of Civil
Procedure. Thus, in Pasiona, Jr. v. Court of Appeals,[10] the Court expounded as follows:

The aggrieved party is proscribed from assailing a decision or final order of the
CA via Rule 65, because such recourse is proper only if the party has no plain, speedy
and adequate remedy in the course of law. In this case, petitioner had an adequate
remedy, namely, a petition for review on certiorari under Rule 45 of the Rules of
Court. A petition for review on certiorari, not a special civil action
for certiorari was, therefore, the correct remedy.

xxxx

Settled is the rule that where appeal is available to the aggrieved party, the
special civil action for certiorari will not be entertained – remedies of appeal
and certiorari are mutually exclusive, not alternative or successive. Hence, certiorari is
not and cannot be a substitute for a lost appeal, especially if one's own negligence or
error in one's choice of remedy occasioned such loss or lapse. One of the requisites
of certiorari is that there be no available appeal or any plain, speedy and adequate
remedy. Where an appeal was available, as in this case, certiorari will not prosper,
even if the ground therefor is grave abuse of discretion. Petitioner's resort to this
Court by Petition for Certiorari was a fatal procedural error, and the instant petition must,
therefore, fail.[11]
 For the very same reason given above, the CA, therefore, acted properly when it dismissed the
petition for certiorari outright, on the ground that petitioners should have resorted to the remedy of appeal
instead of certiorari. Verily, the present Petition for Certiorari should not have been given due course at
all.

Moreover, since the period for petitioners to file a petition for review on certiorari had lapsed by the
time the instant petition was filed, the assailed CA Resolutions have attained finality.

Nevertheless, just to put the matter to rest, the Court reiterates the ruling in Heirs of Valeriano S.
Concha, Sr. v. Spouses Lumocso,[12] to wit:

In a number of cases, we have held that actions for reconveyance of or for

cancellation of title to or to quiet title over real property are actions that fall under the
classification of cases that involve “title to, or possession of, real property, or any interest
therein.”

xxxx

x x x Thus, under the old law, there was no substantial effect on jurisdiction
whether a case is one, the subject matter of which was incapable of pecuniary
estimation, under Section 19(1) of B.P. 129, or one involving title to property under
Section 19(2). The distinction between the two classes became crucial with the
amendment introduced by R.A. No. 7691 in 1994, which expanded the exclusive original
jurisdiction of the first level courts to include "all civil actions which involve title to, or
possession of, real property, or any interest therein where the assessed value of the
property or interest therein does not exceed Twenty thousand pesos (P20,000.00)
or, in civil actions in Metro Manila, where such assessed value does not exceed
Fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind,
attorney's fees, litigation expenses and costs." Thus, under the present law,
original jurisdiction over cases the subject matter of which involves "title to,
possession of, real property or any interest therein" under Section 19(2) of B.P.
129 is divided between the first and second level courts, with the assessed value
of the real property involved as the benchmark. This amendment was introduced to
"unclog the overloaded dockets of the RTCs which would result in the speedier
administration of justice."[13]

Clearly, the RTC and the CA ruled correctly that the MeTC had jurisdiction over private
respondents' complaint for Accion Reivindicatoria.
 IN VIEW OF THE FOREGOING, the petition is DISMISSED for utter lack of merit. The Resolutions
of the Court of Appeals in CA-G.R. SP No. 78978, dated September 15, 2003 and June 1, 2004,
are AFFIRMED.

SO ORDERED.

DIOSDADO M. PERALTA

Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO

Associate Justice

Chairperson

MINITA V. CHICO-NAZARIO PRESBITERO J. VELASCO, JR.

Associate Justice Associate Justice

 ANTONIO EDUARDO B. NACHURA

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.

CONSUELO YNARES-SANTIAGO

Associate Justice

Third Division, Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I
certify that the conclusions in the above Decision were reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.
 REYNATO S. PUNO

Chief Justice

[1] Penned by Associate Justice Delilah Vidallon-Magtolis, with Associate Justices Jose L. Sabio,
Jr. and Hakim S. Abdulwahid, concurring; rollo, pp. 27 & 29.
[2] Rollo, pp. 37-48.
[3] Id. at 78-84.
[4] Id. at 99-100.
[5] Penned by Judge Fatima Gonzales-Asdala; id. at 194-195.
[6] Rollo, pp. 196-199.
[7] Id. at 255.
[8] Id. at 29.
[9] Id. at 14-15.
[10] G.R. No. 165471, July 21, 2008, 559 SCRA 137, citing Iloilo La Filipina Uycongco
Corporationv. Court of Appeals, 539 SCRA 178, (2007).
[11] Id. at 151-142. (Emphasis and underscoring supplied).
[12] G.R. No. 158121, December 21, 2007, 540 SCRA 1.
[13] Id. at 16-18. (Emphasis supplied).

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-33213 June 29, 1979

ARTEMIO C. REYES and HILARION C. REYES, petitioners,

vs.
HON. ANDRES STA. MARIA, Presiding Judge, Court of First Instance of Bulacan, Branch II,
HILARIA SANTOS VDA. DE LOPEZ and PILAR SANTOS, respondents.

E. M. Reyes for petitioner.

Ruben T. Reyes for respondents.

TEEHANKEE, J.:

The Court sets aside the lower court's Order which dismissed petitioners-plaintiffs' complaint filed before it
for recovery of the property in the possession of respondents-defendants and for declaration of ownership
thereof as against said respondents' contrary claim of ownership on the ground of alleged lack of
jurisdiction. Such action was clearly an accion publiciana for the recovery of the right to possess
(possesion de jure) (if not an accion reivindicatoria) falling within the lower court's jurisdiction and not a
mere action for detainer to recover physical possession (possession de facto) which would fall within the
jurisdiction of the municipal court (if filed within one year after unlawful deprivation or withholding of
possession) as erroneously held by the lower court in its dismissal order.

Petitioners as plaintiffs in the Court of First Instance of Bulacan had filed on April 1, 1968 an action which
they termed as one to quiet title to a certain residential lot in Barrio San Sebastian, Hagonoy, Bulacan
with an area of 368.5 square meters and to recover the possession thereof from respondents as
defendants, 1 wherein they made the following averments:

2. That plaintiffs are owners pro-indiviso of a certain residential lot situated in the Barrio
of San Sebastian, Hagonoy, Bulacan, and more particularly bounded and described as
follows:

(Description omitted)

3. That through the tolerance and goodwill of plaintiffs, thru the intervention and entreaty
of one Maximo Santos, father of the defendants, the latter used and occupied said land
free of charge, under the following conditions, to wit: (a) that instead of paying rentals on
the premises defendants undertook to pay the corresponding real estate taxes on the
land; and (b) that said defendants will leave and vacate the premises anytime the
plaintiffs so demand;

4. That sometime in February, 1968, plaintiffs verbally notified defendants that said
plaintiffs were in need of the land, hence, said defendants should vacate and leave the
same, but said defendants unreasonably refused at the same time claiming ownership of
the property, and alleging further that they bought the same from a certain Pablo
Aguinaldo;

5. That in order to quiet the title of ownership over this land, the plaintiffs have been
compelled to institute the present action and, as a consequence, she suffered damages
in the sum of One Thousand Pesos (P1,000.00), Philippine Currency, as attorney's fees;

6. That the defendants thru their acts stated above have therefore maliciously and
unlawfully detained the land of plaintiffs since February, 1968; and

7. That for the unlawful occupation of the land, an estimate of Fifty (P50.00) Pesos
monthly rental is hereby claimed as reasonable damages suffered by plaintiffs since
February, 1968. 2

Petitioners accordingly prayed in their complaint for judgment (a) "declaring [them] to be the owners of the
property described ... "; (b) "ordering the defendants to vacate the premises and return the possession of
the same to plaintiffs;" (c) "ordering the defendants to pay plaintiffs, jointly and severally, the sum of Fifty
Pesos (P50.00), Philippine Currency, rental or damages every month effective the first day of February,
1968, until the possession of the premises is finally restored in favor of plaintiffs;" and further ordering
defendants to pay them (d) P1,000.00 attorney's fees and (e) costs of suit.

Upon respondents' motion to dismiss the complaint on the ground that "the court has no jurisdiction over
the nature of the action or suit" and that the action embodied in petitioners' complaint "is actually one for
ejectment or unlawful detainer. Consequently, the case falls within the original exclusive jurisdiction of the
inferior court or municipal court" as against petitioners? opposition that "plaintiffs' complaint is principally
one to quiet title to property, the question of possession being merely reduced to an incidental issue," the
lower court issued its appealed order of August 15, 1968, finding the motion to dismiss to be "well
founded" and dismissing the case "for lack of jurisdiction".The lower court reasoned that:

A perusal of the actual averments of facts in the complaint do not reveal any allegation of
ultimate facts which could sufficiently support an action to quiet title. Upon the other
hand, it is plain that the allegations of facts are only constitutive of an action for unlawful
detainer. The allegation in paragraph 5 of said complaint 'that in order to quiet the title of
ownership over this land, the plaintiffs have been compelled to institute the present action
... is not sufficient by itself to consider this case as an action for quieting title under Article
476 of the New Civil Code. Neither does the prayer of said complaint asking that the
plaintiffs be declared the owners of the property in question constitute a cause of action.

Hence, the present petition for review and setting aside of the dismissal order, which the Court finds to be
meritorious. The lower court was clearly in error in issuing its dismissal order on its mistaken notion "that
the allegations of facts are only constitutive of an action for unlawful detainer" since the complaint shows
on its face that respondents' refusal to deliver the possession of the property was due to their adverse
claim of ownership of the same property and their counter-allegation that they had bought the same from
a certain Pablo Aguinaldo, and, therefore, petitioners' action was clearly one for recovery of their right to
possess the property (possessionde jure) as well as to be declared the owners thereof as against the
contrary claim of respondents.

As restated by the late Chief Justice Moran: "There are three kinds of actions for the recovery of
possession of real pro. property, namely, (1) the summary action for forcible entry or detainer
(denominated accion interdictalunder the former law of procedure, Ley de Enjuiciamiento Civil) which
seeks the recovery of physical possession only and is brought within one year in the justice of the peace
court; (2) the accion publiciana which is for the recovery of the right to possess and is a plenary action in
an ordinary civil proceeding in a Court of First Instance; and (3) accion de reivindicacion which seeks the
recovery of ownership (which of course includes the jus utendi and the jus fruendi also brought in the
Court of First Instance. 3

It has been said that "(T)he only issue in forcible entry and detainer cases is the physical possession of
real property possession de facto and not possession de jure If plaintiff can prove a prior possession in
himself, he may recover such possession even from the owner himself. Whatever may be the character of
his prior possession, if he has in his favor priority of time, he has the security that entitles him to stay on
the property until he is lawfully ejected by a person having a better right by either accion publiciana or
accion reivindicatoria. 4Petitioners' action was not merely for recovery of possession de facto. Their action
was clearly one of accion publiciana for recovery of possession de jure if not one of accion
reivindicatoria for declaration of their ownership of the land.

As reaffirmed by the Court in the analogous case of Aguilon vs. Bohol 5 petitioners action is at least "an
accion publiciana, which action 'correspondent al que tiene derecho a la possession, contra el que posee
sin derecho o' con titulo menos firme para que se ponga la cosa en poder del actor con todas las
accesiones, frutos ets' (I Enciclopedia Juridica Espanola 450)," and such accion publiciana or the plenary
action in an ordinary civil proceeding to determine the better and legal right to possess (independently of
title) clearly falls within the jurisdiction of the Courts of First Instance and not of the Municipal Courts. The
Court further underscored therein "that an action for recovery of possession is an urgent matter which
must be decided promptly to forestall breaches of peace, violence or even loss of life and, therefore, the
court should act swiftly and expeditiously in cases of that nature.

Petitioners, therefore, correctly filed their accion publiciana before the lower court as against respondents!
claim that they should instead have filed a summary action for detainer in the municipal court. Having
been fully apprised of respondents' refusal to surrender possession and their contrary claim of ownership
of the same property, petitioners properly filed their accion publiciana with the Court of First Instance to
avoid getting enmeshed in what would certainly have been another jurisdictional dispute, since they could
reasonably foresee that if indeed they had filed a summary action for illegal detainer instead in the
municipal court, respondents would then have contended, contrary to their present claim, that the
municipal court is without jurisdiction over the detainer case by virtue of their contrary claim of ownership
of the property. 6

ACCORDINGLY, judgment is hereby rendered, setting aside the lower court's dismissal order of August
15, 1968 and the case is remanded to respondent Court of First Instance with instructions to expedite the
proceedings and trial and determination thereof on the merits. With costs against respondents. This
decision is immediately executory.

Makasiar, Fernandez, Guerrero, De Castro and Melencio-Herrera, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 181303 September 17, 2009

CARMEN DANAO MALANA, MARIA DANAO ACORDA, EVELYN DANAO, FERMINA DANAO,
LETICIA DANAO and LEONORA DANAO, the last two are represented herein by their Attorney-in-
Fact, MARIA DANAO ACORDA, Petitioners,
vs.
BENIGNO TAPPA, JERRY REYNA, SATURNINO CAMBRI and SPOUSES FRANCISCO AND MARIA
LIGUTAN,Respondents.

DECISION

CHICO-NAZARIO, J.:

This is a Petition for Certiorari under Rule 65 of the Rules of Court, assailing the Orders1 dated 4 May
2007, 30 May 2007, and 31 October 2007, rendered by Branch 3 of the Regional Trial Court (RTC) of
Tuguegarao City, which dismissed, for lack of jurisdiction, the Complaint of petitioners Carmen Danao
Malana, Leticia Danao, Maria Danao Accorda, Evelyn Danao, Fermina Danao, and Leonora Danao,
against respondents Benigno Tappa, Jerry Reyna, Saturnino Cambri, Francisco Ligutan and Maria
Ligutan, in Civil Case No. 6868.

Petitioners filed before the RTC their Complaint for Reivindicacion, Quieting of Title, and
Damages2 against respondents on 27 March 2007, docketed as Civil Case No. 6868. Petitioners alleged
in their Complaint that they are the owners of a parcel of land covered by Transfer Certificate of Title
(TCT) No. T-1279373 situated in Tuguegarao City, Cagayan (subject property). Petitioners inherited the
subject property from Anastacio Danao (Anastacio), who died intestate. 4 During the lifetime of Anastacio,
he had allowed Consuelo Pauig (Consuelo), who was married to Joaquin Boncad, to build on and occupy
the southern portion of the subject property. Anastacio and Consuelo agreed that the latter would vacate
the said land at any time that Anastacio and his heirs might need it.5

Petitioners claimed that respondents, Consuelo’s family members,6 continued to occupy the subject
property even after her death, already building their residences thereon using permanent materials.
Petitioners also learned that respondents were claiming ownership over the subject property. Averring
that they already needed it, petitioners demanded that respondents vacate the same. Respondents,
however, refused to heed petitioners’ demand.7

Petitioners referred their land dispute with respondents to the Lupong Tagapamayapa of Barangay
Annafunan West for conciliation. During the conciliation proceedings, respondents asserted that they
owned the subject property and presented documents ostensibly supporting their claim of ownership.

According to petitioners, respondents’ documents were highly dubious, falsified, and incapable of proving
the latter’s claim of ownership over the subject property; nevertheless, they created a cloud upon
petitioners’ title to the property. Thus, petitioners were compelled to file before the RTC a Complaint to
remove such cloud from their title.8 Petitioners additionally sought in their Complaint an award against
respondents for actual damages, in the amount of P50,000.00, resulting from the latter’s baseless claim
over the subject property that did not actually belong to them, in violation of Article 19 of the Civil Code on
Human Relations.9 Petitioners likewise prayed for an award against respondents for exemplary damages,
in the amount of P50,000.00, since the latter had acted in bad faith and resorted to unlawful means to
establish their claim over the subject property. Finally, petitioners asked to recover from
respondents P50,000.00 as attorney’s fees, because the latter’s refusal to vacate the property
constrained petitioners to engage the services of a lawyer. 10

Before respondents could file their answer, the RTC issued an Order dated 4 May 2007 dismissing
petitioners’ Complaint on the ground of lack of jurisdiction. The RTC referred to Republic Act No.
7691,11 amending Batas Pambansa Blg. 129, otherwise known as the Judiciary Reorganization Act of
1980, which vests the RTC with jurisdiction over real actions, where the assessed value of the property
involved exceeds P20,000.00. It found that the subject property had a value of less than P20,000.00;
hence, petitioners’ action to recover the same was outside the jurisdiction of the RTC. The RTC decreed
in its 4 May 2007 Order that:

The Court has no jurisdiction over the action, it being a real action involving a real property with assessed
value less than P20,000.00 and hereby dismisses the same without prejudice.12

Petitioners filed a Motion for Reconsideration of the aforementioned RTC Order dismissing their
Complaint. They argued that their principal cause of action was for quieting of title; the accion
reivindicacion was included merely to enable them to seek complete relief from respondents. Petitioner’s
Complaint should not have been dismissed, since Section 1, Rule 63 of the Rules of Court13 states that
an action to quiet title falls under the jurisdiction of the RTC. 14

In an Order dated 30 May 2007, the RTC denied petitioners’ Motion for Reconsideration. It reasoned that
an action to quiet title is a real action. Pursuant to Republic Act No. 7691, it is the Municipal Trial Court
(MTC) that exercises exclusive jurisdiction over real actions where the assessed value of real property
does not exceedP20,000.00. Since the assessed value of subject property per Tax Declaration No, 02-
48386 was P410.00, the real action involving the same was outside the jurisdiction of the RTC.15

Petitioners filed another pleading, simply designated as Motion, in which they prayed that the RTC Orders
dated 4 May 2007 and 30 May 2007, dismissing their Complaint, be set aside. They reiterated their earlier
argument that Section 1, Rule 63 of the Rules of Court states that an action to quiet title falls under the
exclusive jurisdiction of the RTC. They also contended that there was no obstacle to their joining the two
causes of action, i.e., quieting of title and reivindicacion, in a single Complaint, citing Rumarate v.
Hernandez.16 And even if the two causes of action could not be joined, petitioners maintained that the
misjoinder of said causes of action was not a ground for the dismissal of their Complaint.17

The RTC issued an Order dated 31 October 2007 denying petitioners’ Motion. It clarified that their
Complaint was dismissed, not on the ground of misjoinder of causes of action, but for lack of jurisdiction.
The RTC dissected Section 1, Rule 63 of the Rules of Court, which provides:

Section 1. Who may file petition. Any person interested under a deed, will, contract or other written
instrument, or whose rights are affected by a statute, executive order or regulation, ordinance, or any
other governmental regulation may, before breach or violation thereof, bring an action in the appropriate
Regional Trial Court to determine any question of construction or validity arising, and for a declaration of
his rights or duties, thereunder.

An action for the reformation of an instrument, to quiet title to real property or remove clouds therefrom, or
to consolidate ownership under Article 1607 of the Civil Code, may be brought under this Rule.

The RTC differentiated between the first and the second paragraphs of Section 1, Rule 63 of the Rules of
Court. The first paragraph refers to an action for declaratory relief, which should be brought before the
RTC. The second paragraph, however, refers to a different set of remedies, which includes an action to
quiet title to real property. The second paragraph must be read in relation to Republic Act No. 7691,
which vests the MTC with jurisdiction over real actions, where the assessed value of the real property
involved does not exceed P50,000.00 in Metro Manila and P20,000.00 in all other places.18 The
dispositive part of the 31 October 2007 Order of the RTC reads:

This Court maintains that an action to quiet title is a real action. [Herein petitioners] do not dispute the
assessed value of the property at P410.00 under Tax Declaration No. 02-48386. Hence, it has no
jurisdiction over the action.

In view of the foregoing considerations, the Motion is hereby denied. 19

Hence, the present Petition, where petitioners raise the sole issue of:

WHETHER OR NOT THE RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION IN

DISMISSING THE COMPLAINT OF THE PETITIONERS MOTU PROPRIO.20

Petitioners’ statement of the issue is misleading. It would seem that they are only challenging the fact that
their Complaint was dismissed by the RTC motu proprio. Based on the facts and arguments set forth in
the instant Petition, however, the Court determines that the fundamental issue for its resolution is whether
the RTC committed grave abuse of discretion in dismissing petitioners’ Complaint for lack of jurisdiction.

The Court rules in the negative.

An action for declaratory relief should be filed by a person interested under a deed, a will, a contract or
other written instrument, and whose rights are affected by a statute, an executive order, a regulation or an
ordinance. The relief sought under this remedy includes the interpretation and determination of the
validity of the written instrument and the judicial declaration of the parties’ rights or duties thereunder. 21

Petitions for declaratory relief are governed by Rule 63 of the Rules of Court. The RTC correctly made a
distinction between the first and the second paragraphs of Section 1, Rule 63 of the Rules of Court.
The first paragraph of Section 1, Rule 63 of the Rules of Court, describes the general circumstances in
which a person may file a petition for declaratory relief, to wit:

Any person interested under a deed, will, contract or other written instrument, or whose rights are affected
by a statute, executive order or regulation, ordinance, or any other governmental regulation may, before
breach or violation thereof, bring an action in the appropriate Regional Trial Court to determine any
question of construction or validity arising, and for a declaration of his rights or duties, thereunder.
(Emphasis ours.)

As the afore-quoted provision states, a petition for declaratory relief under the first paragraph of Section
1, Rule 63 may be brought before the appropriate RTC.

Section 1, Rule 63 of the Rules of Court further provides in its second paragraph that:

An action for the reformation of an instrument, to quiet title to real property or remove clouds therefrom, or
to consolidate ownership under Article 1607 of the Civil Code, may be brought under this Rule.
(Emphasis ours.)

The second paragraph of Section 1, Rule 63 of the Rules of Court specifically refers to (1) an action for
the reformation of an instrument, recognized under Articles 1359 to 1369 of the Civil Code; (2) an action
to quiet title, authorized by Articles 476 to 481 of the Civil Code; and (3) an action to consolidate
ownership required by Article 1607 of the Civil Code in a sale with a right to repurchase. These three
remedies are considered similar to declaratory relief because they also result in the adjudication of the
legal rights of the litigants, often without the need of execution to carry the judgment into effect. 22

To determine which court has jurisdiction over the actions identified in the second paragraph of Section 1,
Rule 63 of the Rules of Court, said provision must be read together with those of the Judiciary
Reorganization Act of 1980, as amended.

It is important to note that Section 1, Rule 63 of the Rules of Court does not categorically require that an
action to quiet title be filed before the RTC. It repeatedly uses the word "may" – that an action for quieting
of title "may be brought under [the] Rule" on petitions for declaratory relief, and a person desiring to file a
petition for declaratory relief "may x x x bring an action in the appropriate Regional Trial Court." The use
of the word "may" in a statute denotes that the provision is merely permissive and indicates a mere
possibility, an opportunity or an option.23

In contrast, the mandatory provision of the Judiciary Reorganization Act of 1980, as amended, uses the
word "shall" and explicitly requires the MTC to exercise exclusive original jurisdiction over all civil actions
which involve title to or possession of real property where the assessed value does not
exceed P20,000.00, thus:

Section 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:

xxxx

(3) Exclusive original jurisdiction in all civil actions which involve title to, possession of, real property, or
any interest therein where the assessed value of the property or interest therein does not exceed Twenty
thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed value does not
exceeds Fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney’s
fees, litigation expenses and costs: x x x (Emphasis ours.)
As found by the RTC, the assessed value of the subject property as stated in Tax Declaration No. 02-
48386 is only P410.00; therefore, petitioners’ Complaint involving title to and possession of the said
property is within the exclusive original jurisdiction of the MTC, not the RTC.

Furthermore, an action for declaratory relief presupposes that there has been no actual breach of the
instruments involved or of rights arising thereunder.24 Since the purpose of an action for declaratory relief
is to secure an authoritative statement of the rights and obligations of the parties under a statute, deed, or
contract for their guidance in the enforcement thereof, or compliance therewith, and not to settle issues
arising from an alleged breach thereof, it may be entertained only before the breach or violation of the
statute, deed, or contract to which it refers. A petition for declaratory relief gives a practical remedy for
ending controversies that have not reached the state where another relief is immediately available; and
supplies the need for a form of action that will set controversies at rest before they lead to a repudiation of
obligations, an invasion of rights, and a commission of wrongs. 25

Where the law or contract has already been contravened prior to the filing of an action for declaratory
relief, the courts can no longer assume jurisdiction over the action. In other words, a court has no more
jurisdiction over an action for declaratory relief if its subject has already been infringed or transgressed
before the institution of the action.26

In the present case, petitioners’ Complaint for quieting of title was filed after petitioners already demanded
and respondents refused to vacate the subject property. In fact, said Complaint was filed only subsequent
to the latter’s express claim of ownership over the subject property before the Lupong Tagapamayapa, in
direct challenge to petitioners’ title.

Since petitioners averred in the Complaint that they had already been deprived of the possession of their
property, the proper remedy for them is the filing of an accion publiciana or an accion reivindicatoria, not a
case for declaratory relief. An accion publiciana is a suit for the recovery of possession, filed one year
after the occurrence of the cause of action or from the unlawful withholding of possession of the realty. An
accion reivindicatoria is a suit that has for its object one’s recovery of possession over the real property
as owner.271avvphi1

Petitioners’ Complaint contained sufficient allegations for an accion reivindicatoria. Jurisdiction over such
an action would depend on the value of the property involved. Given that the subject property herein is
valued only atP410.00, then the MTC, not the RTC, has jurisdiction over an action to recover the same.
The RTC, therefore, did not commit grave abuse of discretion in dismissing, without prejudice, petitioners’
Complaint in Civil Case No. 6868 for lack of jurisdiction.

As for the RTC dismissing petitioners’ Complaint motu proprio, the following pronouncements of the Court
inLaresma v. Abellana28 proves instructive:

It is axiomatic that the nature of an action and the jurisdiction of a tribunal are determined by the material
allegations of the complaint and the law at the time the action was commenced. Jurisdiction of the tribunal
over the subject matter or nature of an action is conferred only by law and not by the consent or waiver
upon a court which, otherwise, would have no jurisdiction over the subject matter or nature of an action.
Lack of jurisdiction of the court over an action or the subject matter of an action cannot be cured by the
silence, acquiescence, or even by express consent of the parties. If the court has no jurisdiction over the
nature of an action, it may dismiss the same ex mero motu or motu proprio. x x x. (Emphasis supplied.)

Since the RTC, in dismissing petitioners’ Complaint, acted in complete accord with law and jurisprudence,
it cannot be said to have done so with grave abuse of discretion amounting to lack or excess of
jurisdiction. An act of a court or tribunal may only be considered to have been committed in grave abuse
of discretion when the same was performed in a capricious or whimsical exercise of judgment, which is
equivalent to lack of jurisdiction. The abuse of discretion must be so patent and gross as to amount to an
evasion of a positive duty or to a virtual refusal to perform a duty enjoined by law or to act at all in
contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason of
passion or personal hostility.29 No such circumstances exist herein as to justify the issuance of a writ
of certiorari.

IN VIEW OF THE FOREGOING, the instant Petition is DISMISSED. The Orders dated 4 May 2007, 30
May 2007 and 31 October 2007 of the Regional Trial Court of Tuguegarao City, Branch 3, dismissing the
Complaint in Civil Case No. 6868, without prejudice, are AFFIRMED. The Regional Trial Court is ordered
to REMAND the records of this case to the Municipal Trial Court or the court of proper jurisdiction for
proper disposition. Costs against the petitioners.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

Republic of the Philippines cralaw

Supreme Court cralaw

Manila cralaw

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THIRD DIVISION cralaw

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 G.R. No. 164560

Present:

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YNARES-SANTIAGO, J., cralaw

Chairperson, cralaw

CHICO-NAZARIO, cralaw

VELASCO, JR., cralaw

ANA DE GUIA SAN PEDRO NACHURA, and cralaw

and ALEJO DOPEO,

PERALTA, JJ. cralaw
Petitioners,
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- versus -
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HON. FATIMA G. ASDALA, in her capacity as
the Presiding Judge of the Regional Trial Court
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of Quezon City, Branch 87; HON. MANUEL
TARO, in his capacity as the Presiding Judge
of the Metropolitan Trial Court of Quezon City, cralaw
Branch 42; and the HEIRS OF SPOUSES
APOLONIO V. DIONISIO and VALERIANA cralaw
DIONISIO (namely, ALLAN GEORGE R.
DIONISIO and ELEANOR R. DIONISIO, herein
cralaw
represented by ALLAN GEORGE R. DIONISIO),

Respondents. Promulgated:

July 22, 2009

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x cralaw

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D E C I S I O N cralaw

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PERALTA, J.:

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This resolves the petition for certiorari under Rule 65 of the Rules of Court, praying that the
Resolutions [1] of the Court of Appeals (CA) dated September 15, 2003 and June 1, 2004, respectively, in
CA-G.R. SP No. 78978, be reversed and set aside. cralaw

The antecedent facts are as follows. cralaw

cralaw

Sometime in July 2001, private respondents, heirs of spouses Apolonio and Valeriana Dionisio, filed with
the Metropolitan Trial Court (MeTC) of Quezon City, Branch 42, a Complaint [2] against herein petitioners
and Wood Crest Residents Association, Inc., for Accion Reivindicatoria, Quieting of Title and Damages,
with Prayer for Preliminary Mandatory Injunction. Private respondents alleged that subject property
located in Batasan Hills, Quezon City, with an assessed value of P32,100.00, was titled in the name of
spouses Apolonio and Valeriana Dionisio; but petitioners, with malice and evident bad faith, claimed that
they were the owners of a parcel of land that encompasses and covers subject property. Private
respondents had allegedly been prevented from entering, possessing and using subject property. It was
further alleged in the Complaint that petitioners' Transfer Certificate of Title over their alleged property
was spurious. Private respondents then prayed that they be declared the sole and absolute owners of the
subject property; that petitioners be ordered to surrender possession of subject property to them; that
petitioners and Wood Crest and/or its members be ordered to pay actual and moral damages, and
attorney's fees. cralaw

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Petitioners, for their part, filed a Motion to Dismiss [3] said complaint on the ground that the MeTC had no
jurisdiction over the subject matter of the action, as the subject of litigation was incapable of pecuniary
estimation. cralaw

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The MeTC then issued an Order [4] dated July 4, 2002 denying the motion to dismiss, ruling that,
under Batas Pambansa (B.P.) Blg. 129, as amended, the MeTC had exclusive original jurisdiction over
actions involving title to or possession of real property of small value. cralaw

cralaw
Petitioners' Motion for Reconsideration of said Order dated July 4, 2002 was denied. cralaw

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Petitioners assailed the aforementioned Order by filing a petition for certiorari with the Regional Trial
Court (RTC) of Quezon City, Branch 87. However, in its Decision [5] dated March 10, 2003, the RTC
dismissed the petition, finding no grave abuse of discretion on the part of the MeTC Presiding Judge. The
RTC sustained the MeTC ruling, stating that, in accordance with Section 33(3) of Republic Act (R.A.) No.
7691, amending B.P. Blg. 129, the MeTC had jurisdiction over the complaint for Accion
Reivindicatoria, as it involves recovery of ownership and possession of real property located in Quezon
City, with an assessed value not exceeding P50,000.00. A Motion for Reconsideration [6] of the Decision
was filed by petitioners, but was denied in an Order [7]dated July 3, 2003. cralaw

cralaw

Petitioners then filed with the Court of Appeals another petition for certiorari, insisting that both the MeTC
and RTC acted with grave abuse of discretion amounting to lack or excess of jurisdiction by not ordering
the dismissal of the complaint for Accion Reivindicatoria, for lack of jurisdiction over the same.In the
assailed CA Resolution dated September 15, 2003, the CA dismissed the petition outright, holding
that certiorari was not available to petitioners as they should have availed themselves of the remedy of
appeal. Petitioners' motion for reconsideration of the resolution of dismissal was denied per
Resolution[8] dated June 1, 2004. cralaw

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Thus, petitioners filed the instant petition and, in support thereof, they allege that: cralaw

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THE HONORABLE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF

DISCRETION AMOUNTING TO LACK OR IN (SIC) EXCESS OF JURISDICTION IN
DENYING THE PETITION FOR CERTIORARI AND FOR FAILURE TO RESOLVE THE
ISSUE RAISED IN THE CERTIORARI REGARDING THE JURISDICTION OF THE
METROPOLITAN TRIAL COURT TO TAKE COGNIZANCE OF A CASE OF ACCION
REINVINDICATORIA. cralaw

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THE HONORABLE PUBLIC RESPONDENT FATIMA GONZALES-ASDALA, AS

PRESIDING JUDGE OF RTC BRANCH 87, QUEZON CITY, ACTED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF (SIC)
JURISDICTION IN DISMISSING THE PETITION FOR CERTIORARIAND IN
RESOLVING THAT A CASE OF ACCION REINVINDICATORIA IS WITHIN THE
JURISDICTION OF THE METROPOLITAN TRIAL COURT. cralaw

cralaw
 THE HONORABLE PUBLIC RESPONDENT MANUEL TARO AS PRESIDING JUDGE
MeTC, BRANCH 42, QUEZON CITY, ACTED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR IN (SIC) EXCESS OF JURISDICTION IN SO TAKING
COGNIZANCE OF THE COMPLAINT FOR ACCION REINVINDICATORIA IN CIVIL
CASE NO. 27434 ENTITLED, HEIRS OF SPS. APOLONIO V. DIONISIO AND
VALERIANA DIONISIO, ETC. VS. ANA DE GUIA SAN PEDRO, ET. AL. [9] cralaw

cralaw

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The present Petition for Certiorari is doomed and should not have been entertained from the very
beginning. cralaw

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The settled rule is that appeals from judgments or final orders or resolutions of the CA should be by a
verified petition for review on certiorari, as provided for under Rule 45 of the Revised Rules of Civil
Procedure. Thus, in Pasiona, Jr. v. Court of Appeals, [10] the Court expounded as follows: cralaw

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The aggrieved party is proscribed from assailing a decision or final order of the CA via
Rule 65, because such recourse is proper only if the party has no plain, speedy and
adequate remedy in the course of law. In this case, petitioner had an adequate
remedy, namely, a petition for review on certiorari under Rule 45 of the Rules of
Court. A petition for review on certiorari, not a special civil action
for certiorari was, therefore, the correct remedy. cralaw

cralaw

x x x x cralaw

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Settled is the rule that where appeal is available to the aggrieved party, the special civil
action for certiorari will not be entertained remedies of appeal and certiorari are mutually
exclusive, not alternative or successive. Hence, certiorari is not and cannot be a
substitute for a lost appeal, especially if one's own negligence or error in one's choice
of remedy occasioned such loss or lapse. One of the requisites of certiorari is that there
be no available appeal or any plain, speedy and adequate remedy. Where an appeal
was available, as in this case, certiorari will not prosper, even if the ground
therefor is grave abuse of discretion. Petitioner's resort to this Court by Petition
for Certiorari was a fatal procedural error, and the instant petition must, therefore, fail. [11]

For the very same reason given above, the CA, therefore, acted properly when it dismissed the petition
for certiorari outright, on the ground that petitioners should have resorted to the remedy of appeal instead
of certiorari. Verily, the present Petition for Certiorari should not have been given due course at all.
Moreover, since the period for petitioners to file a petition for review on certiorari had lapsed by the time
the instant petition was filed, the assailed CA Resolutions have attained finality.

Nevertheless, just to put the matter to rest, the Court reiterates the ruling in Heirs of Valeriano S. Concha,
Sr. v. Spouses Lumocso, [12] to wit:

In a number of cases, we have held that actions for reconveyance of or for cancellation of
title to or to quiet title over real property are actions that fall under the classification of
cases that involve title to, or possession of, real property, or any interest therein.
xxxx

x x x Thus, under the old law, there was no substantial effect on jurisdiction
whether a case is one, the subject matter of which was incapable of pecuniary
estimation, under Section 19(1) of B.P. 129, or one involving title to property under
Section 19(2). The distinction between the two classes became crucial with the
amendment introduced by R.A. No. 7691 in 1994, which expanded the exclusive original
jurisdiction of the first level courts to include "all civil actions which involve title to, or
possession of, real property, or any interest therein where the assessed value of the
property or interest therein does not exceed Twenty thousand pesos (P20,000.00)
or, in civil actions in Metro Manila, where such assessed value does not exceed
Fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind,
attorney's fees, litigation expenses and costs." Thus, under the present law,
original jurisdiction over cases the subject matter of which involves "title to,
possession of, real property or any interest therein" under Section 19(2) of B.P.
129 is divided between the first and second level courts, with the assessed value
of the real property involved as the benchmark. This amendment was introduced to
"unclog the overloaded dockets of the RTCs which would result in the speedier
administration of justice." [13] cralaw

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Clearly, the RTC and the CA ruled correctly that the MeTC had jurisdiction over private respondents'
complaint for Accion Reivindicatoria. cralaw

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IN VIEW OF THE FOREGOING, the petition is DISMISSED for utter lack of merit. The Resolutions of the
Court of Appeals in CA-G.R. SP No. 78978, dated September 15, 2003 and June 1, 2004,
are AFFIRMED. cralaw

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SO ORDERED. cralaw
 BONGATO V. MALVAR
387 SCRA 327

FACTS:
Spouses Malvar filed a complaint for forcible entry against Bongato, for allegedly unlawfully
entering a parcel of land and constructed a house of light materials thereon. The trial court
orderedpetitioner to vacate the lot
and thereafter issued an order insofar as to determine the location of the houses involved in the civil case
is the same with the one in the criminal case for anti-squatting. The judge made a warning that there
will be no extension granted for the submission of the survey and failure to do so would prompt
the issuance of the writ of execution. Upon failure of petitioner to submit a survey report, the
judge ordered the return of the records of the case to the court of origin for disposal.

HELD:
In forcible entry, one employs FISTS to deprive another physical possession of land or
building. Thus, plaintiff must allege and prove prior physical possession of the property in litigation
until deprived thereof by defendant. Sole question for resolution hinges on the physical or material
possession of the property. Neither a claim of juridical possession nor an averment of ownership by the
defendant can outrightly prevent the court from taking cognizance of the case. Ejectment
cases proceed independently of any claim of ownership and the plaintiff needs merely to prove prior
possession de facto and undue deprivation thereof.

In the present case, the lower court lacked jurisdiction in this case. First, the house of petitioner was
actually situated in the lot subject of the anti-squatting case and not on the lot of the spouses. Second,
the house has been in existence prior to the alleged date of forcible entry. Third, the respondents
had knowledge of the existence of the house long before the alleged date of entry.

Forcible entry is a quieting process, and that the restrictive time bar is prescribed to complement
the summary nature of the process. Indeed, the one-year period within which to bring an action for
forcible entry is generally counted from the date of actual entry to the land. However, when entry
is made through stealth, then the one-year period is counted from the time plaintiff knew about it.
after the lapse of the one-year period, the party dispossessed of a parcel of land may file either
anaccion publiciana, which is a plenary action to recover the right to possession, or
an accion reivindicatoria, which is an action to recover ownership as well as possession.

SECOND DIVISION

ROSS RICA SALES CENTER, G.R. No. 132197

INC. and JUANITO KING &

SONS, INC., Present:

Petitioners,
PUNO, J.,

Chairman,

AUSTRIA-MARTINEZ,

- versus - CALLEJO, SR.,

TINGA, and

CHICO-NAZARIO, JJ.

SPOUSES GERRY ONG and

ELIZABETH ONG, Promulgated:

Respondents.

August 16, 2005

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

DECISION

Tinga, J.:

In a Decision[1] dated 6 January 1998, the Former First Division of the Court of Appeals overturned the
decisions of the Municipal Trial Court (MTC) and the Regional Trial Court (RTC) of Mandaue City, ruling
instead that the MTC had no jurisdiction over the subject complaint for unlawful detainer. This petition for
review prays for the reversal of the aforesaid Court of Appeals’ Decision.

The case originated from a complaint for ejectment filed by petitioners against respondents, docketed as
Civil Case No. 2376, before the MTC of Mandaue City, Branch I. In the complaint, petitioners alleged the
fact of their ownership of three (3) parcels of land covered by Transfer Certificates of Title (TCT) Nos.
36466, 36467 and 36468. Petitioners likewise acknowledged respondent Elizabeth Ong’s ownership of
the lots previous to theirs. On 26 January 1995, Atty. Joseph M. Baduel, representing Mandaue Prime
Estate Realty, wrote respondents informing them of its intent to use the lots and asking them to vacate
within thirty (30) days from receipt of the letter. But respondents refused to vacate, thereby unlawfully
withholding possession of said lots, so petitioners alleged.

Ross Rica Sales Center, Inc. and Juanito King and Sons, Inc. (petitioners) had acquired the lands from
Mandaue Prime Estate Realty through a sale made on 23 March 1995. In turn, it appears that Mandaue
Prime Estate Realty had acquired the properties from the respondents through a Deed of Absolute Sale
dated 14 July 1994. However, this latter deed of sale and the transfers of title consequential thereto were
subsequently sought to be annulled by respondents in a complaint filed on 13 February 1995 before the
Mandaue RTC against Mandaue Prime Estate Realty.[2] Per record, this case is still pending resolution.
Meanwhile, the MYC resolved the ejectment case on 24 April 1996, with the decision ordering
respondents to vacate the premises in question and to peacefully turn over possession thereof to
petitioners.

On appeal, the RTC rendered on 1 March 1997 a judgment affirming the MTC’s decision in its entirety.

On 8 May 1997, respondents filed a notice of appeal. However, on the following day, they filed a motion
for reconsideration.

On 23 June 1997, the RTC issued an Order which concurrently gave due course to respondents’ notice of
appeal filed on 8 May 1997; denied their motion for reconsideration dated 9 May 1997,[3] and granted
petitioners’ motion for immediate execution pending appeal.

In a Petition for Certiorari with Injunction filed with the Court of Appeals and treated as a Petition for
Review, the appellate court ruled that the MTC had no jurisdiction over said case as there was no
contract between the parties, express or implied, as would qualify the same as one for unlawful detainer.
Thus, the assailed Orders of the MTC and RTC were set aside.

Petitioners then took this recourse via Petition for Review under Rule 45 of the Rules of Court. The
principal issues raised before this Court are: (i) whether the RTC decision has already become final and
executory at the time the petition for review was filed; (ii) whether the allegations in the complaint
constitute a case for unlawful detainer properly cognizable by the MTC; and, (iii) whether petitioners, as
registered owners, are entitled to the possession of the subject premises.

We resolve the first argument to be without merit.

The following sequence of events is undisputed:

(1) On 1 March 1997, the RTC rendered the questioned decision affirming the
judgment of the MTC.

(2) On 28 April 1997, respondents received a copy of the aforementioned

decision.

(3) On 8 May 1997, respondents filed a Notice of Appeal with the RTC.

(4) On 9 May 1997, respondents filed likewise with the RTC a Motion for
Reconsideration of the aforementioned 1 March 1997 decision.

(5) On 23 June 1997, the RTC of Mandaue issued an Order denying

respondents’ Motion for Reconsideration.

(6) On 9 July 1997, respondents received a copy of the aforementioned 23 June

1997 Order.

(7) On 24 July 1997, respondents filed with the Court of Appeals their motion for
an additional period of ten (10) days within which to file their Petition for Review.
(8) On 30 July 1997, respondents filed with the Court of Appeals their Petition for
Review.

Petitioners assert that the Petition for Review was filed beyond the fifteen (15)-day period for appeal.
They theorize that the period started running on 28 April 1995, the date of receipt of the RTC decision,
and ended on 13 May 1997. According to them, this reglementary period could not have been interrupted
by the filing on 9 May 1997 of the Motion for Reconsiderationbecause of the filing one day earlier of
the Notice of Appeal. This Notice of Appeal dated 8 May 1997, albeit the wrong mode of appeal,
expressly manifested their intention to file a petition for review to either the Court of Appeals or the
Supreme Court.[4]

Petitioners further argue that respondents, after having filed the Notice of Appeal which was given due
course by the RTC, cannot take an inconsistent stand such as filing a Motion for Reconsideration. Such
filing, therefore, did not toll the fifteen (15)-day period which started running from the date of receipt of the
RTC decision on 28 April 1997 and ended on 13 May 1997.

Respondents, in their Comment,[5] submit that the filing of theNotice of Appeal dated 8 May 1997 was
improper, and as such did not produce any legal effect. Therefore, the filing of theMotion for
ReconsiderationMotion for Reconsideration on the ground that the respondents had already filed a Notice
of Appeal. The Order dated 23 June 1997 stated: immediately on the following day cured this defect.
The RTC refused to subscribe respondents’ position. It justified the denial of the

On record is a Notice of Appeal by Certiorari filed by Defendants on May 8, 1997.

Likewise filed by Defendants on May 9, 1997 is a Motion for Reconsideration.

Considering the Notice of Appeal filed earlier which the court hereby approves, the Motion for
Reconsideration is DENIED.

The Motion for Immediate Execution Pending Appeal being meritorious, is GRANTED.[6] (Emphasis in
the original.)

Strangely enough, the Court of Appeals passed no comment on this point when it took cognizance of
respondents’ position and reversed the RTC. But does this necessarily mean that the RTC was correct
when it declared that the Motion for Reconsideration was barred by the filing of the Notice of Appeal, no
matter how erroneous the latter mode was?

Rule 42 governs the mode of appeal applicable in this case. Sec. 1 provides:

Section 1. How appeal taken; time for filing. -- A party desiring to appeal from a decision of the RTC
rendered in the exercise of its appellate jurisdiction may file a verified petition for review with the Court of
Appeals, paying at the same time to the clerk of said court the corresponding docket and other lawful
fees, depositing the amount of P500.00 for costs, and furnishing the Regional Trial Court and the adverse
party with a copy of the petition. The petition shall be filed and served within fifteen (15) days from notice
of the decision sought to be reviewed or of the denial of petitioner’s motion for new trial or reconsideration
filed in due time after judgment. Upon proper motion and the payment of the full amount of the docket
and other lawful fees and the deposit for costs before the expiration of the reglementary period, the Court
of Appeals may grant an additional period of fifteen (15) days only within which to file the petition for
review. No further extension shall be granted except for the most compelling reason and in no case to
exceed fifteen (15) days.

Since the unlawful detainer case was filed with the MTC and affirmed by the RTC, petitioners should have
filed a Petition for Review with the Court of Appeals and not a Notice of Appealwith the RTC. However,
we consider this to have been remedied by the timely filing of the Motion for Reconsiderationon the
following day. Section 3, Rule 50 of the Rules of Court allows the withdrawal of appeal at any time, as a
matter of right, before the filing of the appellee’s brief. Applying this rule contextually, the filing of
the Motion for Reconsideration may be deemed as an effective withdrawal of the defective Notice of
Appeal.

Perforce, the period of appeal was tolled by the Motion for Reconsideration and started to run again from
the receipt of the order denying the Motion for Reconsideration. A Motion for Additional Time to File the
Petition was likewise filed with the Court of Appeals. Counting fifteen (15) days from receipt of the denial
of the Motion for Reconsideration and the ten (10)-day request for additional period, it is clear that
respondents filed their Petition for Review on time.

Petitioners invoke to the ruling in People v. De la Cruz[7] that once a notice of appeal is filed, it cannot be
validly withdrawn to give way to a motion for reconsideration. The factual circumstances in the two cases
are different.

De la Cruz is a criminal case, governed by criminal procedure. Section 3, Rule 122 of the Rules of Court
provides that the proper mode of appeal from a decision of the RTC is a notice of appeal and an appeal is
deemed perfected upon filing of the notice of appeal.

In the case at bar, a petition for review before the Court of Appeals is the proper mode of appeal from a
decision of the RTC. Since the filing of the notice of appeal is erroneous, it is considered as if no appeal
was interposed.

Now on the second and more important issue raised by petitioners: whether the Complaint satisfies the
jurisdictional requirements for a case of unlawful detainer properly cognizable by the MTC.

The MTC considered itself as having jurisdiction over the ejectment complaint and disposed of the same
in favor of petitioners. Said ruling was affirmed by the RTC. The Court of Appeals reversed the lower
courts and found the complaint to be one not for unlawful detainer based on two (2) grounds, namely: that
the allegations fail to show that petitioners were deprived of possession by force, intimidation, threat,
strategy or stealth; and that there is no contract, express or implied, between the parties as would qualify
the case as one of unlawful detainer.

We disagree with the Court of Appeals.

The complaint for unlawful detainer contained the following material allegations:

....
3. That plaintiffs are the owners of Lot No. 2, which is covered by T.C.T. No. 36466 of the Register of
Deeds of Mandaue City, Lot No. 1-A which is covered by T.C.T. No. 36467 of the Register of Deeds of
Mandaue City and Lot No. 86-A which is covered by T.C.T. No. 36468 of the Register of Deeds of
Mandaue City, all situated in the City of Mandaue. Copies of said Transfer Certificate of Titles are hereto
attached as Annexes “A”, “B”, and “C” respectively and made an integral part hereof;

4. That defendant Elizabeth Ong is the previous registered owner of said lots;

5. That as the previous registered owner of said lots, defendant Elizabeth Ong and her husband and
co-defendant Jerry Ong have been living in the house constructed on said lots;

6. That on May 6, 1995, plaintiffs, through the undersigned counsel, wrote defendants a letter
informing them or their intent to use said lots and demanded of them to vacate said lots within 30 days
from receipt of said letter. Copy of said letter is hereto attached as Annex “D” and made an integral part
thereof;

7. That despite demand to vacate, the defendants have refused and still refuse to vacate said lots,
thus, unlawfully withholding possession of said lots from plaintiffs and depriving plaintiffs of the use of
their lots;

8. That in unlawfully withholding the possession of said lots from the plaintiffs, plaintiffs have suffered
damages in the form of unearned rentals in the amount of P10,000.00 a month

. . . .[8]

Well-settled is the rule that what determines the nature of an action as well as which court has jurisdiction
over it are the allegations of the complaint and the character of the relief sought.[9]

Respondents contend that the complaint did not allege that petitioners’ possession was originally lawful
but had ceased to be so due to the expiration of the right to possess by virtue of any express or implied
contract.

The emphasis placed by the Court of Appeals on the presence of a contract as a requisite to qualify the
case as one of unlawful detainer contradicts the various jurisprudence dealing on the matter.

In Javelosa v. Court of the Appeals,[10] it was held that the allegation in the complaint that there was
unlawful withholding of possession is sufficient to make out a case for unlawful detainer. It is equally
settled that in an action for unlawful detainer, an allegation that the defendant is unlawfully withholding
possession from the plaintiff is deemed sufficient, without necessarily employing the terminology of the
law.[11]

Hence, the phrase "unlawful withholding" has been held to imply possession on the part of defendant,
which was legal in the beginning, having no other source than a contract, express or implied, and which
later expired as a right and is being withheld by defendant.[12] In Rosanna B. Barba v. Court of
Appeals,[13] we held that a simple allegation

that the defendant is unlawfully withholding possession from plaintiff is sufficient.

Based on this premise, the allegation in the Complaint that:

. . . . despite demand to vacate, the defendants have refused and still refuse to vacate said lots, thus,
unlawfully withholding possession of said lots from plaintiffs and depriving plaintiffs of the use of their
lots;[14]

is already sufficient to constitute an unlawful detainer case.

In the subject complaint, petitioners alleged that they are the registered owners of the lots covered by
TCT Nos. 36466, 36467 and 36468. By their implied tolerance, they have allowed respondents, the
former owners of the properties, to remain therein. Nonetheless, they eventually sent a letter to
respondents asking that the latter vacate the said lots. Respondents refused, thereby depriving
petitioners of possession of the lots. Clearly, the complaint establishes the basic elements of an unlawful
detainer case, certainly sufficient for the purpose of vesting jurisdiction over it in the MTC.

Respondents would like to capitalize on the requisites as cited in the case of Raymundo dela Paz v.
Panis.[15][16] of the Rules of Court. The case doesid not provide for rigid standards in the drafting of the
ejectment complaint. The case of Co Tiamco v. Diaz[17] justifies a more liberal approach, thus: But the
citation is a mere reiteration of Sec. 1, Rule 70

. . . The principle underlying the brevity and simplicity of pleadings in forcible entry and unlawful detainer
cases rests upon considerations of public policy. Cases of forcible entry and detainer 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.[18]

Moreover, petitioners fail to mention any of the incidents of the pending case involving the annulment of
deed of sale and title over said property. Petitioners know better than to question this in an ejectment
proceeding, which brings us to the nature of the action in this case.

Respondents insist that the RTC, and not the MTC, had jurisdiction over the action, it being an accion
reivindicatoriaaccording to them, on the ground that petitioners were constantly claiming ownership over
the lands in the guise of filing an action for ejectment. In their Comment,[19] respondents maintain that
they occupy the subject lots as the legal owners. Petitioners, on the other hand, are seeking recovery of
possession under a claim of ownership which is tantamount to recovery of possession based on alleged
title to the lands, and therefore is within the original jurisdiction of the RTC, so respondents conclude.

This contention is not tenable.

The issue involved in accion reivindicatoria is the recovery of ownership of real property. This differs
from accion publicianawhere the issue is the better right of possession or possessionde jure, and accion
interdictalde facto. In an action for unlawful detainer, the question of possession is primordial while the
issue of ownership is generally unessential.[20] where the issue is material possession or possession

Neither the allegation in petitioners’ complaint for ejectment nor the defenses thereto raised by
respondents sufficiently convert this case into an accion reivindicatoria which is beyond the province of
the MTC to decide. Petitioners did not institute the complaint for ejectment as a means of claiming or
obtaining ownership of the properties. The acknowledgment in their pleadings of the fact of prior
ownership by respondents does not constitute a recognition of respondents’ present ownership. This is
meant only to establish one of the necessary elements for a case of unlawful detainer, specifically the
unlawful withholding of possession. Petitioners, in all their pleadings, only sought to recover physical
possession of the subject property. The mere fact that they claim ownership over the parcels of land as
well did not deprive the MTC of jurisdiction to try the ejectment case.

Even if respondents claim ownership as a defense to the complaint for ejectment, the conclusion would
be the same for mere assertion of ownership by the defendant in an ejectment case will not therefore oust
the municipal court of its summary jurisdiction.[21] This Court in Ganadin

v. Ramos[22] stated that if what is prayed for is ejectment or recovery of possession, it does not matter if
ownership is claimed by either party. Therefore, the pending actions for declaration of nullity of deed of
sale and Transfer Certificates of Title and quieting of title in Civil Case No. MAN-2356 will not abate the
ejectment case.

In Drilon v. Gaurana,[23] this Court ruled that the filing of an action for reconveyance of title over the
same property or for annulment of the deed of sale over the land does not divest the MTC of its
jurisdiction to try the forcible entry or unlawful detainer case before it, the rationale being that, while there
may be identity of parties and subject matter in the forcible entry case and the suit for annulment of title
and/or reconveyance, the rights asserted and the relief prayed for are not the same.[24]

In Oronce v. Court of Appeals,[25] this Court held that the fact that respondents had previously filed a
separate action for the reformation of a deed of absolute sale into one of pacto de retro sale or equitable
mortgage in the same

Court of First Instance is not a valid reason to frustrate the summary remedy of ejectment afforded by law
to the plaintiff. Consequently, an adjudication made in an ejectment proceeding regarding the issue of
ownership should be regarded as merely provisional and, therefore, would not bar or prejudice an action
between the same parties involving title to the land. The foregoing doctrine is a necessary consequence
of the nature of forcible entry and unlawful detainer cases where the only issue to be settled is the
physical or material possession over the real property, that is, possession de facto and not possession de
jure.

The Court reiterated this in the case of Tecson v. Gutierrez[26] when it ruled:

We must stress, however, that before us is only the initial determination of ownership over the lot in
dispute, for the purpose of settling the issue of possession, although the issue of ownership is inseparably
linked thereto. As such, the lower court's adjudication of ownership in the ejectment case is merely
provisional, and our affirmance of the trial courts' decisions as well, would not bar or prejudice an action
between the same parties involving title to the property, if and when such action is brought seasonably
before the proper forum.

The long settled rule is that the issue of ownership cannot be subject of a collateral attack.
In Apostol v. Court of Appeals,[27] this Court had the occasion to clarify this:

. . . Under Section 48 of Presidential Decree No. 1529, a certificate of title shall not be subject to collateral
attack. It cannot be altered, modified or cancelled, except in a direct proceeding for that purpose in
accordance with law. The issue of the validity of the title of the respondents can only be assailed in an
action expressly instituted for that purpose. Whether or not the petitioners have the right to claim
ownership over the property is beyond the power of the court a quo to determine in an action for unlawful
detainer.[28]

With the conclusion of the second issue in favor of petitioners, there is no need to discuss the third
assignment of error which is related to the second issue.

WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals dated 6 January 1998 is
REVERSED and SET ASIDE and the Decision dated 24

April 1996 of the Municipal Trial Court of Mandaue City REINSTATED and AFFIRMED. Costs against
respondents.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 96107 June 19, 1995

CORAZON JALBUENA DE LEON, petitioner,

vs.
HON. COURT OF APPEALS (SPECIAL SECOND DIVISION) and ULDARICO INAYAN, respondents.

ROMERO, J.:

In this petition for review, we are asked to set aside the amended decision of the Court of Appeals dated
November 8, 1990 in "Corazon Jalbuena de Leon v. Uldarico Inayan," (CA-G.R. CV No. 19777) 1 which
reversed its original decision dated May 24, 1990. 2

The subject property in the case at bench involves two parcels of irrigated riceland covering an area of
117,785 square meters located in Barangays Guintas and Bingke, Napnod, Leganes, Iloilo. Jesus
Jalbuena, the owner of the land, entered into a verbal lease contract in 1970 with Uldarico Inayan, for one
year renewable for the same period. Inayan, private respondent herein, bound himself to deliver 252
cavans of palay each year as rental to be paid during the first ten days of January. Private respondent
who was a godson of Jesus Jalbuena, was allowed to continue with the lease from year to year.

Petitioner Corazon Jalbuena de Leon is the daughter of Jesus Jalbuena and the transferee of the subject
property.

Although private respondent cultivated the subject property through hired men, the cavans of palay were
paid annually until 1983 when Inayan ceased paying the agreed rental and instead, asserted dominion
over the land. When asked by the petitioner to vacate the land, he refused to do so, prompting the latter
to bring an action in court.

In March 1984, herein petitioner filed a complaint against private respondent before the Regional Trial
Court of Iloilo City for "Termination of Civil Law Lease; Recovery of Possession, Recovery of Unpaid
Rentals and Damages."

Private respondent, in his Answer, claimed that the land had been tenanted by his father since 1938 and
that he has already been issued Certificates of Land Transfer (CLT) for the subject property. These
Certificates of Land Transfer were subsequently canceled by the then Ministry of Agrarian Reform on
November 22, 1983 upon a finding that said lands were owned by Jesus Jalbuena and that the CLTs
were erroneously issued. 3

On April 11, 1984, the lower court issued an order adopting the procedure in agrarian cases.

The dispositive portion of the trial court's decision dated February 26, 1988 in favor of petitioner De Leon
reads:

WHEREFORE, Premises considered, judgment is hereby rendered:

1. Declaring the lease contract between plaintiff and defendant as a civil law lease, and
that the same has already been terminated due to defendant's failure to pay his rentals
from 1983 up to the present;

2. Ordering defendant Uldarico Inayan and his privies and successors-in-interest to

immediately vacate the land subject-matter of this complaint and to return possession
thereof to plaintiff;

3. Ordering defendant Uldarico Inayan to pay plaintiff Corazon Jalbuena de Leon, one
thousand two hundred sixty (1,260) cavans of palay representing unpaid rentals from
1983 up to 1987, or its money equivalent computed at the current market price of palay,
less whatever amount may have been deposited by defendant with the Court during the
pendency of this case, which deposit should be released in favor of plaintiff;

4. Ordering defendant Inayan to pay to plaintiff Jalbuena de Leon the sum of P38,501.28
representing the unpaid irrigation fees, and all fees thereafter until possession of the land
has been transferred to the plaintiff;

5. Ordering defendant Inayan to pay to plaintiff Jalbuena de Leon the sum of P3,000.00
as attorney' s fees; P1,000.00 as litigation expenses, and P2,000.00 as moral damages,
plus costs; and

6. Dismissing defendant's counterclaim for lack of merit. 4

On appeal to the Court of Appeals, private respondent raised the sole issue of jurisdiction and alleged
that the lower court, acting as Court of Agrarian Relations, had no jurisdiction over the action.

The respondent appellate court, on May 24, 1990, affirmed the trial court's decision, disposing as follows:

WHEREFORE, premises considered, the decision appealed from should be, as it is

hereby AFFIRMED, with a MODIFICATION that the period within which appellant should
be ordered to pay the rentals in arrears now covers the years 1983 to 1990. Costs
against appellant. 5

It held that while jurisdiction must exist as a matter of law, private respondent's attack on the jurisdiction
of the lower court must fail for he is guilty of estoppel. 6 Despite several opportunities to question the
jurisdiction of the lower court, he failed to do so. Moreover, it was he who insisted, through his
misrepresentations, that the case, involving, as it does, purely agrarian issues, should be referred to the
Ministry of Agrarian Reform. 7 Finally, the appellate court held that since regional trial courts, by express
provision of B.P. 129, Section 24, now have exclusive original jurisdiction over agrarian cases, but still
applying the special rules of agrarian procedure, it was no error for the court below, even if acting as an
agrarian court, to resolve a controversy involving a civil lease. 8

Private respondent's motion to reconsider the above decision was granted by the Court of Appeals on
November 8, 1990. Respondent court then set aside its earlier decision and dismissed the civil case filed
by petitioner below (Civil Case No. 15628) for want of jurisdiction. In its amended decision, the appellate
court held that petitioner's complaint below was anchored on acción interdictal, a summary action for
recovery of physical possession that should have been brought before the proper inferior court. To make
private respondent a deforciant so that the unlawful detainer suit may be properly filed, it is necessary to
allege when demand to pay rent and to vacate were made. The court found that this requisite was not
specifically met in petitioner's complaint below. Such failure on her part is fatal to her cause since the
one-year period within which a detainer suit may be instituted had not yet elapsed when Civil Case No.
15628 was filed. Therefore, the court below was devoid of jurisdiction to entertain the case. 9

Hence this petition for review.

It is petitioner's contention that the Court of Appeals erred in holding that the case below is an unlawful
detainer action. Since the parties did not confine themselves to issues pertaining solely to possession but
also to the nature of the lease contract, the case is not one of unlawful detainer but one incapable of
pecuniary estimation.

Next, petitioner argues that the issue of lack of jurisdiction should not have been resolved in favor of
private respondent who had voluntarily submitted to the jurisdiction of the court a quo and raised the
issue only after an adverse decision was rendered against him.

Aside from emphasizing the correctness of respondent court's ruling that the case below was a mere
ejectment case, private respondent raises the issue of res judicata in his comment.

Private respondent Inayan claims that the issue in the instant petition, i.e. whether or not the trial court,
acting as an agrarian court, had jurisdiction over the unlawful detainer suit filed by petitioner, had already
been ruled upon by the Court of Appeals in CA G.R. SP No. 15700 entitled "Uldarico Inayan v. Hon.
Alonsagay and Corazon Jalbuena" and the petition for review of said decision had already been denied
by this Court in G.R. No. 89312. 10

The petition is impressed with merit.

The primary issue presented here revolves around the jurisdiction of the trial court, then acting as a court
of agrarian relations employing agrarian procedure, to try the suit filed by petitioner.

11
Jurisdiction of the court over the subject matter is conferred only by the Constitution or by law. It is
determinable on the basis of allegations in the complaint. 12

An error in jurisdiction can be raised at any time and even for the first time on appeal. 13 Barring highly
meritorious and exceptional circumstances, 14 neither estoppel nor waiver may be raised as defenses to
such an error. 15

In order to determine whether the court below had jurisdiction, it is necessary to first ascertain the nature
of the complaint filed before it.

A study of the complaint instituted by petitioner in the lower court reveals that the case is, contrary to the
findings of the respondent appellate court, not one of unlawful detainer.

An unlawful detainer suit (acción interdictal) together with forcible entry are the two forms of an ejectment
suit that may be filed to recover possession of real property. Aside from the summary action of
ejectment, acción publicianaor the plenary action to recover the right of possession and acción
reivindicatoria or the action to recover ownership which includes recovery of possession, make up the
three kinds of actions to judicially recover possession. 16

Illegal detainer consists in withholding by a person from another of the possession of a land or building to
which the latter is entitled after the expiration or termination of the former's right to hold possession by
virtue of a contract, express or implied. 17 An ejectment suit is brought before the proper inferior court to
recover physical possession only or possession de facto and not possession de jure, where
dispossession has lasted for not more than one year. Forcible entry and unlawful detainer are quieting
processes and the one-year time bar to the suit is in pursuance of the summary nature of the
action. 18 The use of summary procedure in ejectment cases is intended to provide an expeditious means
of protecting actual possession or right to possession of the property. They are not processes to
determine the actual title to an estate. If at all, inferior courts are empowered to rule on the question of
ownership raised by the defendant in such suits, only to resolve the issue of possession. 19 Its
determination on the ownership issue is, however, not conclusive.

Acción publiciana is the plenary action to recover the right of possession when dispossession has lasted
for more than one year or when dispossession was effected by means other than those mentioned in
Rule 70. 20 Under
these circumstances, a plenary action 21 may be brought before the regional trial court. 22

Acción reivindicatoria, which is an action to recover ownership, including the recovery of possession,
should also be filed in the regional trial court.

Petitioner's complaint was for "Termination of Civil Law Lease; Recovery of Possession; Recovery of
Unpaid Rentals and Damages" 23 After alleging the facts regarding the lease of the subject property,
including Inayan's refusal to pay rent and to vacate, petitioner prayed that the trial court declare the civil
law lease (and not "tenancy or agricultural lease") terminated. Plaintiff likewise prayed that defendant be
ordered to vacate the premises, pay back rentals, unpaid irrigation fees, moral and exemplary damages
and litigation fees.

Clearly, the case involves more than just the issue of possession. It was necessary for the trial court
below to determine whether the lease was civil and not an agricultural or tenancy relationship and
whether its termination was in order. More specifically, the complaint emphasized, in paragraph 4:
 That in entering into the contract, Jesus Jalbuena and defendant Uldarico Inayan
definitely agreed that the contract was to be CIVIL LAW LEASE NOT TENANCY OR
AGRICULTURAL LEASE, for a period of one (1) year renewable for the same period at
the option and agreement of the parties; 24

As correctly determined by the trial court, one of the issues in the case below was whether or not the
contract entered into by the plaintiff and defendant was a civil law lease or an agricultural lease. If the
former, the next issue was whether the lease contract between the parties had been terminated in 1983
for failure of defendant to pay his annual rental. 25

A detainer suit exclusively involves the issue of physical possession. The case below, however, did not
concern merely the issue of possession but as well, the nature of the lease contracted by petitioner's
predecessor-in-interest and private respondent. It likewise involved the propriety of terminating the
relationship contracted by said parties, as well as the demand upon defendant to deliver the premises
and pay unpaid rentals, damages and incidental fees.

Where the issues of the case extend beyond those commonly involved in unlawful detainer suits, such as
for instance, the respective rights of parties under various contractual arrangements and the validity
thereof, the case is converted from a mere detainer suit to one "incapable of pecuniary estimation,"
thereby placing it under the exclusive original jurisdiction of the regional trial courts (formerly the courts of
first instance). 26

Not being merely a case of ejectment, the regional trial court possessed jurisdiction to try and resolve the
case.

Still on the question of jurisdiction, private respondent Inayan, as appellant before the respondent court,
claimed that the trial court, acting as a court of agrarian relations, did not have jurisdiction over the
complaint filed by petitioner because the latter did not concern itself with tenancy or agrarian matters. The
Court of Appeals, in its original decision, ruled that private respondent was guilty of estoppel. Accordingly,
he can not successfully raise the issue.

In the past, the principle of estoppel has been used by the courts to avoid a clear case of injustice. Its use
as a defense to a jurisdictional error is more of an exception rather than the rule. The circumstances
outlining estoppel must be unequivocal and intentional, for it is an exception to standard legal norms and
is generally applied only in highly exceptional and justifiable cases. 27

We find that the situation in the case at bench falls within the ambit of justifiable cases where estoppel
may be applied. The trial court's recourse to agrarian procedure was undoubtedly provoked by private
respondent Inayan's insistence on the existence of a tenancy relationship with petitioner. Private
respondent cannot now use these same misrepresentations to assert the court's lack of jurisdiction. He
cannot invoke the court's jurisdiction to secure affirmative relief against petitioner and, after failing to
obtain such relief, repudiate or question that same jurisdiction. 28

Participation in judicial proceedings where the court was devoid of jurisdiction is not normally considered
as estoppel because the jurisdiction of a court is mandated by law. Estoppel is likewise not appreciated
where a mistaken belief in the court's jurisdiction is maintained.

But private respondent's case is different for it does not involve an honest mistake. He is directly
responsible for the trial court's use of the special rules of agrarian procedure. His insistence brought
about the want of jurisdiction he conveniently asserted before the appellate court, and only after an
adverse decision was leveled against him. Private respondent cannot be allowed to seek refuge under
the protective mantle of the law after he has abused and made a mockery of it. He is, therefore,
considered estopped from asserting the court's want of jurisdiction to try the case.
Moreover, the case was ostensibly one that involved agrarian matters, as alleged by private respondent.
Hence the trial court cannot be faulted for its use of agrarian procedure.

The respondent court also correctly held:

Finally, and more importantly, while it is true that when the trial court decreed that the
procedure outlined in P.D. 946 was to be observed at the trial of the case at bar, it, in
effect assumed its character as an agrarian court which is a court of limited jurisdiction,
and that since agrarian matters are solely cognizable by agrarian courts in the exercise of
their limited jurisdiction (Depositario vs. Herbas 121 SCRA 756) conversely, agrarian
courts have no jurisdiction in cases where there is no tenancy relation between the
parties (Dumlao vs. De Guzman, 1 SCRA 144). We believe, however, that the dictum
enunciated in the Dumlao case obtains only when, as before, the then C.F.I. and C.A.R.
are two separate and distinct entities. Consequently, the foregoing legal principle no
longer finds much relevance under the present system, said agrarian courts having been
integrated into the Regional Trial Courts which, by express mandate of Section 24 of B.P.
129, shall have exclusive original jurisdiction over agrarian cases although they are
ordained to continue applying the special rules of procedure provided for said cases. This
being the case, it is no error for the court below, acting as an agrarian court, to resolve a
controversy involving a civil lease since it is already a settled rule that inasmuch as the
RTC is a court of general jurisdiction, whether a particular matter should be resolved by it
in the exercise of its general jurisdiction, or in its limited jurisdiction, or in its limited
jurisdiction, is not a jurisdictional question but a procedural question involving a mode of
practice which, therefore, may be waived (Manalo vs. Mariano, L-33850, Jan. 22, 1976;
Santos vs. Banayo, L-31854, Sept. 9, 1982). 29 (Emphasis ours.)

On the matter of res judicata raised by private respondent, we conclude that the same does not find
application in instant petition. The issues herein and in the petition in G.R. No. 89312 30 are not the same.
In the latter, the issue involved execution pending appeal granted by the trial court judge to petitioner
Jalbuena De Leon. The Court of Appeals 31 enjoined the respondent judge from enforcing the execution
pending appeal after having found no valid and compelling reason to justify said execution. Then too,
private respondent asserted, and the appellate court found, that an agrarian court has no jurisdiction in a
case where there exists no tenancy relation between the parties. The court said:

In any event, the matter of jurisdiction of respondent court having been impugned and
said issue permeating and going as it does into the very competence of the trial court to
act on CAR Case No. 15628, it behooves us to tread softly and give the benefit of the
doubt to petitioner, for should execution pending appeal be allowed and the judgment is
later ordered vacated on the ground that the trial court had no jurisdiction to hear the
case, then it would be well-nigh impossible to restore petitioner to his former status. 32

From the foregoing quote, we find that the decision of the appellate court did not categorically rule on the
matter of jurisdiction but only made mention of it in passing and in ruling upon the real issue of the
correctness of execution pending appeal ordered by the respondent judge. The decision in CA-G.R. SP
No. 15700 became final after the petition for review of said decision was dismissed by the Court for failure
to pay the prescribed legal fees and to attach duplicate original or certified true copies of the questioned
decision. 33

In sum, we have concluded that the case filed by petitioner below, not being one of unlawful detainer, the
regional trial court had jurisdiction to hear and try the case.

Moreover, as shown in the foregoing paragraphs, private respondent is estopped from asserting the lower
court's lack of jurisdiction.
WHEREFORE, the petition is GRANTED. The amended decision of the Court of Appeals dated
November 8, 1990 in CA G.R. CV No. 19777 ("Corazon Jalbuena de Leon v. Uldarico Inayan") is SET
ASIDE and the original decision dated May 24, 1990 is REINSTATED.

Costs against private respondent.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 125055 October 30, 1998

A. FRANCISCO REALTY AND DEVELOPMENT CORPORATION, petitioner,

vs.
COURT OF APPEALS and SPOUSES ROMULO S.A. JAVILLONAR and ERLINDA P.
JAVILLONAR, respondents.

MENDOZA, J.:

This is a petition for review on certiorari of the decision rendered on February 29, 1996 by the Court of
Appeals 1reversing, in toto, the decision of the Regional Trial Court of Pasig City in Civil Case No. 62290,
as well as the appellate court's resolution of May 7, 1996 denying reconsideration.

Petitioner A. Francisco Realty and Development Corporation granted a loan of P7.5 Million to private
respondents, the spouses Romulo and Erlinda Javillonar, in consideration of which the latter executed the
following documents: (a) a promissory note, dated November 27, 1991, stating an interest charge of 4%
per month for six months; (b) a deed of mortgage over realty covered by TCT No. 58748, together with
the improvements thereon; and (c) an undated deed of sale of the mortgaged property in favor of the
mortgagee, petitioner A. Francisco Realty. 2

The interest on the said loan was to be paid in four installments: half of the total amount agreed upon
(P900,000.00) to be paid in advance through a deduction from the proceeds of the loan, while the
balance to be paid monthly by means of checks post-dated March 27, April 27, and May 27, 1992. The
promissory note expressly provided that upon "failure of the MORTGAGOR (private respondents) to pay
the interest without prior arrangement with the MORTGAGEE (petitioner), full possession of the property
will be transferred and the deed of sale will be registered. 3 For this purpose, the owner's duplicate of TCT
No. 58748 was delivered to petitioner A. Francisco Realty.

Petitioner claims that private respondents failed to pay the interest and, as a consequence, it registered
the sale of the land in its favor on February 21, 1992. As a result, TCT No. 58748 was cancelled and in
lieu thereof TCT No. PT-85569 was issued in the name of petitioner A. Francisco Realty. 4
Private respondents subsequently obtained an additional loan of P2.5 Million from petitioner on March 13,
1992 for which they signed a promissory note which reads:

PROMISSORY NOTE

For value received I promise to pay A. FRANCISCO REALTY AND DEVELOPMENT

CORPORATION, the additional sum of Two Million Five Hundred Thousand Pesos
(P2,500,000.00) on or before April 27, 1992, with interest at the rate of four percent (4%)
a month until fully paid and if after the said date this note and/or the other promissory
note of P7.5 Million remains unpaid and/or unsettled, without any need for prior demand
or notification, I promise to vacate voluntarily and willfully and/or allow A.FRANCISCO
REALTY AND DEVELOPMENT CORPORATION to appropriate and occupy for their
exclusive use the real property located at 56 Dragonfly, Valle Verde VI, Pasig, Metro
Manila. 5

Petitioner demanded possession of the mortgaged realty and the payment of 4% monthly interest from
May 1992, plus surcharges. As respondent spouses refused to vacate, petitioner filed the present action
for possession before the Regional Trial Court in Pasig City. 6

In their answer, respondents admitted liability on the loan but alleged that it was not their intent to sell the
realty as the undated deed of sale was executed by them merely as an additional security for the
payment of their loan. Furthermore, they claimed that they were not notified of the registration of the sale
in favor of petitioner A. Francisco Realty and that there was no interest then unpaid as they had in fact
been paying interest even subsequent to the registration of the sale. As an alternative defense,
respondents contended that the complaint was actually for ejectment and, therefore, the Regional Trial
Court had no jurisdiction to try the case. As counterclaim, respondents sought the cancellation of TCT No.
PT-85569 as secured by petitioner and the issuance of a new title evidencing their ownership of the
property. 7

On December 19, 1992, the Regional Trial Court rendered a decision, the dispositive portion of which
reads as follows:

WHEREFORE, prescinding from the foregoing considerations, judgment is hereby

rendered declaring as legal and valid, the right of ownership of A. Francisco Realty Find
Development Corporation, over the property subject of this case and now registered in its
name as owner thereof, under TCT No. 85569 of the Register of Deeds of Rizal, situated
at No. 56 Dragonfly Street, Valle Verde VI, Pasig, Metro Manila.

Consequently, defendants are hereby ordered to cease and desist from further
committing acts of dispossession or from withholding possession from plaintiff of the said
property as herein described and specified.

Claim for damages in all its forms, however, including attorney's fees, are hereby denied,
no competent proofs having been adduced on record, in support thereof. 8

Respondent spouses appealed to the Court of Appeals which reversed the decision of the trial court and
dismissed the complaint against them. The appellate court ruled that the Regional Trial Court had no
jurisdiction over the case because it was actually an action for unlawful detainer which is exclusively
cognizable by municipal trial courts. Furthermore, it ruled that, even presuming jurisdiction of the trial
court, the deed of sale was void for being in fact a pactum commissorium which is prohibited by Art. 2088
of the Civil Code.
Petitioner A. Francisco Realty filed a motion for reconsideration, but the Court of Appeals denied the
motion in its resolution, dated May 7, 1996. Hence, this petition for review on certiorari raising the
following issues:

WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT THE

REGIONAL TRIAL COURT HAD NO JURISDICTION OVER THE COMPLAINT FILED
BY THE PETITIONER.

WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT THE

CONTRACTUAL DOCUMENTS SUBJECT OF THE INSTANT CASE ARE
CONSTITUTIVE OF PACTUM COMMISSORIUM AS DEFINED UNDER ARTICLE 2088
OF THE CIVIL CODE OF THE PHILIPPINES.

On the first issue, the appellate court stated:

Ostensibly, the cause of action in the complaint indicates a case for unlawful detainer, as
contra-distinguished from accion publiciana. As contemplated by Rule 70 of the Rules of
Court, an action for unlawful detainer which falls under the exclusive jurisdiction of the
Metropolitan or Municipal Trial Courts, is defined as withholding from by a person from
another for not more than one year, the possession of the land or building to which the
latter is entitled after the expiration or termination of the supposed rights to hold
possession by virtue of a contract, express or implied. (Tenorio vs. Gamboa, 81 Phil. 54;
Dikit vs. Dicaciano, 89 Phil. 44). If no action is initiated for forcible entry or unlawful
detainer within the expiration of the 1 year period, the case may still be filed under the
plenary action to recover possession by accion publiciana before the Court of First
Instance (now the Regional Trial Court) (Medina vs. Valdellon, 63 SCRA 278). In plain
language, the case at bar is a legitimate ejectment case filed within the 1 year period
from the jurisdictional demand to vacate. Thus, the Regional Trial Court has no
jurisdiction over the case. Accordingly, under Section 33 of B.P. Blg. 129 Municipal Trial
Courts are vested with the exclusive original jurisdiction over forcible entry and unlawful
detainer case. (Sen Po Ek Marketing Corp. vs. CA, 212 SCRA 154 [1990]) 9

We think the appellate court is in error. What really distinguishes an action for unlawful detainer from a
possessory action (accion publiciana) and from a reivindicatory action (accion reivindicatoria) is that the
first is limited to the question of possession de facto.

An unlawful detainer suit (accion interdictal) together with forcible entry are the two forms
of an ejectment suit that may be filed to recover possession of real property. Aside from
the summary action of ejectment, accion publiciana or the plenary action to recover the
right of possession andaccion reivindicatoria or the action to recover ownership which
includes recovery of possession, make up the three kinds of actions to judicially recover
possession.

Illegal detainer consists in withholding by a person from another of the possession of a

land or building to which the latter is entitled after the expiration or termination of the
former's right to hold possession by virtue of a contract, express or implied. An ejectment
suit is brought before the proper inferior court to recover physical possession only or
possession de facto and not possession de jure, where dispossession has lasted for not
more than one year. Forcible entry and unlawful detainer are quieting processes and the
one-year time bar to the suit is in pursuance of the summary nature of the action. The
use of summary procedure in ejectment cases is intended to provide an expeditious
means of protecting actual possession or right to possession of the property. They are
not processes to determine the actual title to an estate. If at all, inferior courts are
empowered to rule on the question of ownership raised by the defendant in such suits,
 only to resolve the issue of possession. Its determination on the ownership issue is,
however, not conclusive. 10

The allegations in both the original and the amended complaints of petitioner before the trial court clearly
raise issues involving more than the question of possession, to wit: (a) the validity of the Transfer of
ownership to petitioner; (b) the alleged new liability of private respondents for P400,000.00 a month from
the time petitioner made its demand on them to vacate; and (c) the alleged continuing liability of private
respondents under both loans to pay interest and surcharges on such. As petitioner A. Francisco Realty
alleged in its amended complaint:

5. To secure the payment of the sum of 7.5 Million together with the monthly interest, the
defendant spouses agreed to execute a Deed of Mortgage over the property with the
express condition that if and when they fail to pay monthly interest or any infringement
thereof they agreed to convert the mortgage into a Deed of Absolute Sale in favor of the
plaintiff by executing Deed of Sale thereto, copy of which is hereto attached and
incorporated herein as Annex "A";

6. That in order to authorize the Register of Deeds into registering the Absolute Sale and
transfer to the plaintiff, defendant delivered unto the plaintiff the said Deed of Sale
together with the original owner's copy of Transfer Certificate of Title No. 58748 of the
Registry of Rizal, copy of which is hereto attached and made an integral part herein as
Annex "B";

7. That defendant spouses later secured from the plaintiff an additional loan of P2.5
Million with the same condition as aforementioned with 4% monthly interest;

8. That defendants spouses failed to pay the stipulated monthly interest and as per
agreement of the parties, plaintiff recorded and registered the Absolute Deed of Sale in
its favor on and was issued Transfer Certificate of Title No. PT-85569, copy of which is
hereto attached and incorporated herein as Annex "C";

9. That upon registration and transfer of the Transfer Certificate of Title in the name of the
plaintiff, copy of which is hereto attached and incorporated herein as Annex "C", plaintiff
demanded the surrender of the possession of the above-described parcel of land
together with the improvements thereon, but defendants failed and refused to surrender
the same to the plaintiff without justifiable reasons thereto; Neither did the defendants
pay the interest of 4% a month from May, 1992 plus surcharges up to the present;

10. That it was the understanding of the parties that if and when the defendants shall fail
to pay the interest due and that the Deed of Sale be registered in favor of plaintiff, the
defendants shall pay a monthly rental of P400,000.00 a month until they vacate the
premises, and that if they still fail to pay as they are still failing to pay the amount of
P400,000.00 a month as rentals and/or interest, the plaintiff shall take physical
possession of the said property; 11

It is therefore clear from the foregoing that petitioner A. Francisco Realty raised issues which involved
more than a simple claim for the immediate possession of the subject property. Such issues range across
the full scope of rights of the respective parties under their contractual arrangements. As held in an
analogous case:

The disagreement of the parties in Civil Case No. 96 of the Justice of the Peace of
Hagonoy, Bulacan extended far beyond the issues generally involved in unlawful detainer
suits. The litigants therein did not raise merely the question of who among them was
entitled to the possession of the fishpond of Federico Suntay. For all judicial purposes,
 they likewise prayed of the court to rule on their respective rights under the various
contractual documents — their respective deeds of lease, the deed of assignment and
the promissory note — upon which they predicate their claims to the possession of the
said fishpond. In other words, they gave the court no alternative but to rule on the validity
or nullity of the above documents. Clearly, the case was converted into the determination
of the nature of the proceedings from a mere detainer suit to one that is "incapable of
pecuniary estimation" and thus beyond the legitimate authority of the Justice of the
Peace Court to rule on. 12

Nor can it be said that the compulsory counterclaim filed by respondent spouses challenging the title of
petitioner A. Francisco Realty was merely a collateral attack which would bar a ruling here on the validity
of the said title.

A counterclaim is considered a complaint, only this time, it is the original defendant who
becomes the plaintiff (Valisno v. Plan, 143 SCRA 502 (1986). It stands on the same
footing and is to be tested by the same rules as if it were an independent action. Hence,
the same rules on jurisdiction in an independent action apply to a counterclaim (Vivar v.
Vivar, 8 SCRA 847 (1963); Calo v. Ajar International, Inc. v. 22 SCRA 996 (1968); Javier
v. Intermediate Appellate Court, 171 SCRA 605 (1989); Quiason, Philippine Courts and
Their Jurisdictions, 1993 ed., p. 203). 13

On the second issue, the Court of Appeals held that, even "on the assumption that the trial court has
jurisdiction over the instant case," petitioner's action could not succeed because the deed of sale on
which it was based was void, being in the nature of a pactum commissorium prohibited by Art. 2088 of the
Civil Code which provides:

Art. 2088. The creditor cannot appropriate the things given by way to pledge or mortgage,
or dispose of them. Any stipulation to the contrary is null and void.

With respect to this question, the ruling of the appellate court should be affirmed. Petitioner denies,
however, that the promissory notes contain a pactum commissorium. It contends that —

What is envisioned by Article 2088 of the Civil Code of the Philippines is a provision in
the deed of mortgage providing for the automatic conveyance of the mortgaged property
in case of the failure of the debtor to pay the loan (Tan v. West Coast Life Assurance Co.,
54 Phil. 361). A pactum commissorium is a forfeiture clause in a deed of
mortgage (Hechanova v. Adil, 144 SCRA 450; Montevergen v. Court of Appeals, 112
SCRA 641; Report of the Code Commission, 156).

Thus, before Article 2088 can find application herein, the subject deed of mortgage must
be scrutinized to determine if it contains such a provision giving the creditor the right "to
appropriate the things given by way of mortgage without following the procedure
prescribed by law for the foreclosure of the mortgage" (Ranjo v. Salmon, 15 Phil. 436). IN
SHORT, THE PROSCRIBED STIPULATION SHOULD BE FOUND IN THE MORTGAGE
DEED ITSELF. 14

The contention is patently without merit. To sustain the theory of petitioner would be to allow a subversion
of the prohibition in Art. 2088.

In Nakpil v. Intermediate Appellate Court, 15 which involved the violation of a constructive trust, no deed of
mortgage was expressly executed between the parties in that case: Nevertheless, this Court ruled that an
agreement whereby property held in trust was ceded to the trustee upon failure of the beneficiary to pay
his debt to the former as secured by the said property was void for being a pactum commissorium. Itwas
there held:
 The arrangement entered into between the parties, whereby Pulong Maulap was to be
"considered sold to him (respondent) . . ." in case petitioner fails to reimburse Valdes,
must then be construed as tantamount to apactum commissorium which is expressly
prohibited by Art. 2088 of the Civil Code. For, there was to be automatic appropriation of
the property by Valdez in the event of failure of petitioner to pay the value of the
advances. Thus, contrary to respondent's manifestations, all the elements of a pactum
commissorium were present: there was a creditor-debtor relationship between the
parties; the property was used as security for the loan; and, there was automatic
appropriation by respondent of Pulong Maulap in case of default of petitioner.16

Similarly, the Court has struck down such stipulations as contained in deeds of sale purporting to
be pacto de retro sales but found actually to be equitable mortgages.

It has been consistently held that the presence of even one of the circumstances
enumerated in Art. 1602 of the New Civil Code is sufficient to declare a contract of sale
with right to repurchase an equitable mortgage. This is so because pacto de retro sales
with the stringent and onerous effects that accompany them are not favored. In case of
doubt, a contract purporting to be a sale with the right to repurchase shall be construed
as an equitable mortgage.

Petitioner, to prove her claim, cannot rely on the stipulation in the contract providing that
complete and absolute title shall be vested on the vendee should the vendors fail to
redeem the property on the specified date. Such stipulation that the ownership of the
property would automatically pass to the vendee in case no redemption was effected
within the stipulated period is void for being a pactum commissorium which enables the
mortgagee to acquire ownership of the mortgaged property without need of foreclosure.
Its insertion in the contract is an avowal of the intention to mortgage rather that to sell the
property. 17

Indeed, in Reyes v. Sierra 18 this Court categorically ruled that a mortgagee's mere act of registering the
mortgaged property in his own name upon the mortgagor's failure to redeem the property amounted to
the exercise of the privilege of a mortgagee in a pactum commissorium.

Obviously, from the nature of the transaction, applicant's a predecessor-in-interest is a

mere mortgagee, and ownership of the thing mortgaged is retained by Basilia Beltran, the
mortgagor. The mortgagee, however, may recover the loan, although the mortgage
document evidencing the loan was nonregistrable being a purely private instrument.
Failure of mortgagor to redeem the property does not automatically vest ownership of the
property to the mortgagee, which would grant the latter the right to appropriate the thing
mortgaged or dispose of it. This violates the provision of Article 2088 of the New Civil
Code, which reads:

The creditor cannot appropriate the things given by way of pledge or mortgage, or
dispose by them. Any stipulation to the contrary is null and void.

The act of applicant in registering the property in his own name upon mortgagor's failure
to redeem the property would to a pactum commissorium which is against good morals
and public policy. 19

Thus, in the case at bar, the stipulations in the promissory notes providing that, upon failure of respondent
spouses to pay interest, ownership of the property would be automatically transferred to petitioner A.
Francisco Realty and the deed of sale in its favor would be registered, are in substance a pactum
commissorium. They embody the two elements of pactum commissorium as laid down in Uy Tong v.
Court of Appeals, 20 to wit:
 The prohibition on pactum commissorium stipulations is provided for by Article 2088 of
the Civil Code:

Art. 2088. The creditor cannot appropriate the things given by way of pledge or
mortgagee, or dispose of the same. Any stipulation to the contrary is null and void.

The aforequoted provision furnishes the two elements for pactum commissorium to exist:
(1) that there should be a pledge or mortgage wherein a property is pledged or
mortgaged by way of security for the payment of the principal obligation; and (2) that
there should be a stipulation for an automatic appropriation by the creditor of the thing
pledged or mortgaged in the event of non-payment of the principal obligation within the
stipulated period. 21

The subject transaction being void, the registration of the deed of sale, by virtue of which petitioner A.
Francisco Realty was able to obtain TCT No. PT-85569 covering the subject lot, must also be declared
void, as prayed for by respondents in their counterclaim.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED, insofar as it dismissed petitioner's
complaint against respondent spouses on the ground that the stipulations in the promissory notes are
void for being apactum commissorium, but REVERSED insofar as it ruled that the trial court had no
jurisdiction over this case. The Register of Deeds of Pasig City is hereby ORDERED to CANCEL TCT No.
PT-85569 issued to petitioner and ISSUE a new one in the name of respondent spouses.

SO ORDERED.

SECOND DIVISION

[G.R. No. 125055. October 30, 1998]

A. FRANCISCO REALTY AND DEVELOPMENT CORPORATION,petitioner, vs. COURT OF

APPEALS and SPOUSES ROMULO S.A. JAVILLONAR and ERLINDA P. JAVILLONAR,respondents.

DECISION

MENDOZA, J.:

This is a petition for review on certiorari of the decision rendered on February 29, 1996 by the Court of
Appeals[1] reversing, in toto, the decision of the Regional Trial Court of Pasig City in Civil Case No.
62290, as well as the appellate court’s resolution of May 7, 1996 denying reconsideration.

Petitioner A. Francisco Realty and Development Corporation granted a loan of P7.5 Million to private
respondents, the spouses Romulo and Erlinda Javillonar, in consideration of which the latter executed the
following documents: (a) a promissory note, dated November 27, 1991, stating an interest charge of 4%
per month for six months; (b) a deed of mortgage over realty covered by TCT No. 58748, together with
the improvements thereon; and (c) an undated deed of sale of the mortgaged property in favor of the
mortgagee, petitioner A. Francisco Realty.[2]
The interest on the said loan was to be paid in four installments: half of the total amount agreed upon
(P900,000.00) to be paid in advance through a deduction from the proceeds of the loan, while the
balance to be paid monthly by means of checks post-dated March 27, April 27, and May 27, 1992. The
promissory note expressly provided that upon “failure of the MORTGAGOR [private respondents] to pay
the interest without prior arrangement with the MORTGAGEE [petitioner], full possession of the property
will be transferred and the deed of sale will be registered.”[3] For this purpose, the owner’s duplicate of
TCT No. 58748 was delivered to petitioner A. Francisco Realty.

Petitioner claims that private respondents failed to pay the interest and, as a consequence, it registered
the sale of the land in its favor on February 21, 1992. As a result, TCT No. 58748 was cancelled and in
lieu thereof TCT No. PT-85569 was issued in the name of petitioner A. Francisco Realty.[4]

Private respondents subsequently obtained an additional loan ofP2.5 Million from petitioner on March 13,
1992 for which they signed a promissory note which reads:

PROMISSORY NOTE

For value received, I promise to pay A. FRANCISCO REALTY AND DEVELOPMENT CORPORATION,
the additional sum of Two Million Five Hundred Thousand Pesos (P2,500,000.00) on or before April 27,
1992, with interest at the rate of four percent (4%) a month until fully paid and if after the said date this
note and/or the other promissory note of P7.5 Million remains unpaid and/or unsettled, without any need
for prior demand or notification, I promise to vacate voluntarily and willfully and/or allow A. FRANCISCO
REALTY AND DEVELOPMENT CORPORATION to appropriate and occupy for their exclusive use the
real property located at 56 Dragonfly, Valle Verde VI, Pasig, Metro Manila.[5]

Petitioner demanded possession of the mortgaged realty and the payment of 4% monthly interest from
May 1992, plus surcharges. As respondent spouses refused to vacate, petitioner filed the present action
for possession before the Regional Trial Court in Pasig City.[6]

In their answer, respondents admitted liability on the loan but alleged that it was not their intent to sell the
realty as the undated deed of sale was executed by them merely as an additional security for the
payment of their loan. Furthermore, they claimed that they were not notified of the registration of the sale
in favor of petitioner A. Francisco Realty and that there was no interest then unpaid as they had in fact
been paying interest even subsequent to the registration of the sale. As an alternative defense,
respondents contended that the complaint was actually for ejectment and, therefore, the Regional Trial
Court had no jurisdiction to try the case. As counterclaim, respondents sought the cancellation of TCT No.
PT-85569 as secured by petitioner and the issuance of a new title evidencing their ownership of the
property.[7]

On December 19, 1992, the Regional Trial Court rendered a decision, the dispositive portion of which
reads as follows:

WHEREFORE, prescinding from the foregoing considerations, judgment is hereby rendered declaring as
legal and valid, the right of ownership of A. Francisco Realty And Development Corporation, over the
property subject of this case and now registered in its name as owner thereof, under TCT No. 85569 of
the Register of Deeds of Rizal, situated at No. 56 Dragonfly Street, Valle Verde VI, Pasig, Metro Manila.
Consequently, defendants are hereby ordered to cease and desist from further committing acts of
dispossession or from withholding possession from plaintiff, of the said property as herein described and
specified.

Claim for damages in all its forms, however, including attorney’s fees, are hereby denied, no competent
proofs having been adduced on record, in support thereof.[8]

Respondent spouses appealed to the Court of Appeals which reversed the decision of the trial court and
dismissed the complaint against them. The appellate court ruled that the Regional Trial Court had no
jurisdiction over the case because it was actually an action for unlawful detainer which is exclusively
cognizable by municipal trial courts. Furthermore, it ruled that, even presuming jurisdiction of the trial
court, the deed of sale was void for being in fact a pactum commissorium which is prohibited by Art. 2088
of the Civil Code.

Petitioner A. Francisco Realty filed a motion for reconsideration, but the Court of Appeals denied the
motion in its resolution, dated May 7, 1996. Hence, this petition for review on certiorari raising the
following issues:

WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT THE REGIONAL TRIAL
COURT HAD NO JURISDICTION OVER THE COMPLAINT FILED BY THE PETITIONER.

WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT THE CONTRACTUAL
DOCUMENTS SUBJECT OF THE INSTANT CASE ARE CONSTITUTIVE OF PACTUM
COMMISSORIUMAS DEFINED UNDER ARTICLE 2088 OF THE CIVIL CODE OF THE PHILIPPINES.

On the first issue, the appellate court stated:

Ostensibly, the cause of action in the complaint indicates a case for unlawful detainer, as contra-
distinguished from accion publiciana. As contemplated by Rule 70 of the Rules of Court, an action for
unlawful detainer which falls under the exclusive jurisdiction of the Metropolitan or Municipal Trial Courts,
is defined as withholding from by a person from another for not more than one year, the possession of the
land or building to which the latter is entitled after the expiration or termination of the supposed rights to
hold possession by virtue of a contract, express or implied. (Tenorio vs. Gamboa, 81 Phil. 54; Dikit vs.
Dicaciano, 89 Phil. 44). If no action is initiated for forcible entry or unlawful detainer within the expiration
of the 1 year period, the case may still be filed under the plenary action to recover possession by accion
publiciana before the Court of First Instance (now the Regional Trial Court) (Medina vs. Valdellon, 63
SCRA 278). In plain language, the case at bar is a legitimate ejectment case filed within the 1 year
period from the jurisdictional demand to vacate. Thus, the Regional Trial Court has no jurisdiction over
the case. Accordingly, under Section 33 of B.P. Blg. 129 Municipal Trial Courts are vested with the
exclusive original jurisdiction over forcible entry and unlawful detainer case. (Sen Po Ek Marketing Corp.
vs. CA, 212 SCRA 154 [1990])[9]

We think the appellate court is in error. What really distinguishes an action for unlawful detainer from a
possessory action (accion publiciana) and from a reivindicatory action (accion reivindicatoria) is that the
first is limited to the question of possession de facto.
An unlawful detainer suit (accion interdictal) together with forcible entry are the two forms of an ejectment
suit that may be filed to recover possession of real property. Aside from the summary action of
ejectment, accion publiciana or the plenary action to recover the right of possession and accion
reivindicatoria or the action to recover ownership which includes recovery of possession, make up the
three kinds of actions to judicially recover possession.

Illegal detainer consists in withholding by a person from another of the possession of a land or building to
which the latter is entitled after the expiration or termination of the former’s right to hold possession by
virtue of a contract, express or implied. An ejectment suit is brought before the proper inferior court to
recover physical possession only or possession de facto and not possession de jure, where
dispossession has lasted for not more than one year. Forcible entry and unlawful detainer are quieting
processes and the one-year time bar to the suit is in pursuance of the summary nature of the action. The
use of summary procedure in ejectment cases is intended to provide an expeditious means of protecting
actual possession or right to possession of the property. They are not processes to determine the actual
title to an estate. If at all, inferior courts are empowered to rule on the question of ownership raised by
the defendant in such suits, only to resolve the issue of possession. Its determination on the ownership
issue is, however, not conclusive.[10]

The allegations in both the original and the amended complaints of petitioner before the trial court clearly
raise issues involving more than the question of possession, to wit: (a) the validity of the transfer of
ownership to petitioner; (b) the alleged new liability of private respondents for P400,000.00 a month from
the time petitioner made its demand on them to vacate; and (c) the alleged continuing liability of private
respondents under both loans to pay interest and surcharges on such. As petitioner A. Francisco Realty
alleged in its amended complaint:

5. To secure the payment of the sum of P7.5 Million together with the monthly interest, the defendant
spouses agreed to execute a Deed of Mortgage over the property with the express condition that if and
when they fail to pay monthly interest or any infringement thereof they agreed to convert the mortgage
into a Deed of Absolute Sale in favor of the plaintiff by executing Deed of Sale thereto, copy of which is
hereto attached and incorporated herein as Annex “A”;

6. That in order to authorize the Register of Deeds into registering the Absolute Sale and transfer to the
plaintiff, defendant delivered unto the plaintiff the said Deed of Sale together with the original owner’s
copy of Transfer Certificate of Title No. 58748 of the Registry of Rizal, copy of which is hereto attached
and made an integral part herein as Annex “B”;

7. That defendant spouses later secured from the plaintiff an additional loan of P2.5 Million with the same
condition as aforementioned with 4% monthly interest;

8. That defendants spouses failed to pay the stipulated monthly interest and as per agreement of the
parties, plaintiff recorded and registered the Absolute Deed of Sale in its favor on and was issued
Transfer Certificate of Title No. PT-85569, copy of which is hereto attached and incorporated herein as
Annex “C”;

9. That upon registration and transfer of the Transfer Certificate of Title in the name of the plaintiff, copy
of which is hereto attached and incorporated herein as Annex “C”, plaintiff demanded the surrender of the
possession of the above-described parcel of land together with the improvements thereon, but
defendants failed and refused to surrender the same to the plaintiff without justifiable reasons thereto;
Neither did the defendants pay the interest of 4% a month from May, 1992 plus surcharges up to the
present;

10. That it was the understanding of the parties that if and when the defendants shall fail to pay the
interest due and that the Deed of Sale be registered in favor of plaintiff, the defendants shall pay a
monthly rental of P400,000.00 a month until they vacate the premises, and that if they still fail to pay as
they are still failing to pay the amount of P400,000.00 a month as rentals and/or interest, the plaintiff shall
take physical possession of the said property;[11]

It is therefore clear from the foregoing that petitioner A. Francisco Realty raised issues which involved
more than a simple claim for the immediate possession of the subject property. Such issues range across
the full scope of rights of the respective parties under their contractual arrangements. As held in an
analogous case:

The disagreement of the parties in Civil Case No. 96 of the Justice of the Peace of Hagonoy, Bulacan
extended far beyond the issues generally involved in unlawful detainer suits. The litigants therein did not
raise merely the question of who among them was entitled to the possession of the fishpond of Federico
Suntay. For all judicial purposes, they likewise prayed of the court to rule on their respective rights under
the various contractual documents ¾ their respective deeds of lease, the deed of assignment and the
promissory note ¾ upon which they predicate their claims to the possession of the said fishpond. In other
words, they gave the court no alternative but to rule on the validity or nullity of the above documents.
Clearly, the case was converted into the determination of the nature of the proceedings from a mere
detainer suit to one that is “incapable of pecuniary estimation” and thus beyond the legitimate authority of
the Justice of the Peace Court to rule on.[12]

Nor can it be said that the compulsory counterclaim filed by respondent spouses challenging the title of
petitioner A. Francisco Realty was merely a collateral attack which would bar a ruling here on the validity
of the said title.

A counterclaim is considered a complaint, only this time, it is the original defendant who becomes the
plaintiff (Valisno v. Plan, 143 SCRA 502 (1986). It stands on the same footing and is to be tested by the
same rules as if it were an independent action. Hence, the same rules on jurisdiction in an independent
action apply to a counterclaim (Vivar v. Vivar, 8 SCRA 847 (1963); Calo v. Ajax International, Inc. v. 22
SCRA 996 (1968); Javier v. Intermediate Appellate Court, 171 SCRA 605 (1989); Quiason, Philippine
Courts and Their Jurisdictions, 1993 ed., p. 203).[13]

On the second issue, the Court of Appeals held that, even “on the assumption that the trial court has
jurisdiction over the instant case,” petitioner’s action could not succeed because the deed of sale on
which it was based was void, being in the nature of a pactum commissorium prohibited by Art. 2088 of the
Civil Code which provides:

ART. 2088. The creditor cannot appropriate the things given by way to pledge or mortgage, or dispose of
them. Any stipulation to the contrary is null and void.

With respect to this question, the ruling of the appellate court should be affirmed. Petitioner denies,
however, that the promissory notes contain a pactum commissorium. It contends that ¾
What is envisioned by Article 2088 of the Civil Code of the Philippines is a provision in the deed of
mortgage providing for the automatic conveyance of the mortgaged property in case of the failure of the
debtor to pay the loan (Tan v. West Coast Life Assurance Co., 54 Phil. 361). A pactum
commissorium is a forfeiture clause in a deed of mortgage (Hechanova v. Adil, 144 SCRA 450;
Montevergen v. Court of Appeals, 112 SCRA 641; Report of the Code Commission, 156).

Thus, before Article 2088 can find application herein, the subject deed of mortgage must be scrutinized to
determine if it contains such a provision giving the creditor the right “to appropriate the things given by
way of mortgage without following the procedure prescribed by law for the foreclosure of the mortgage”
(Ranjo v. Salmon, 15 Phil. 436). IN SHORT, THE PROSCRIBED STIPULATION SHOULD BE FOUND
IN THE MORTGAGE DEED ITSELF.[14]

The contention is patently without merit. To sustain the theory of petitioner would be to allow a subversion
of the prohibition in Art. 2088.

In Nakpil v. Intermediate Appellate Court,[15] which involved the violation of a constructive trust, no deed
of mortgage was expressly executed between the parties in that case. Nevertheless, this Court ruled that
an agreement whereby property held in trust was ceded to the trustee upon failure of the beneficiary to
pay his debt to the former as secured by the said property was void for being a pactum commissorium. It
was there held:

The arrangement entered into between the parties, whereby Pulong Maulap was to be “considered sold
to him (respondent) x x x” in case petitioner fails to reimburse Valdes, must then be construed as
tantamount to a pactum commissorium which is expressly prohibited by Art. 2088 of the Civil Code. For,
there was to be automatic appropriation of the property by Valdez in the event of failure of petitioner to
pay the value of the advances. Thus, contrary to respondent’s manifestations, all the elements of
a pactum commissorium were present: there was a creditor-debtor relationship between the parties; the
property was used as security for the loan; and, there was automatic appropriation by respondent
of Pulong Maulap in case of default of petitioner.[16]

Similarly, the Court has struck down such stipulations as contained in deeds of sale purporting to
be pacto de retro sales but found actually to be equitable mortgages.

It has been consistently held that the presence of even one of the circumstances enumerated in Art. 1602
of the New Civil Code is sufficient to declare a contract of sale with right to repurchase an equitable
mortgage. This is so because pacto de retro sales with the stringent and onerous effects that accompany
them are not favored. In case of doubt, a contract purporting to be a sale with right to repurchase shall be
construed as an equitable mortgage.

Petitioner, to prove her claim, cannot rely on the stipulation in the contract providing that complete and
absolute title shall be vested on the vendee should the vendors fail to redeem the property on the
specified date. Such stipulation that the ownership of the property would automatically pass to the vendee
in case no redemption was effected within the stipulated period is void for being a pactum
commissoriumwhich enables the mortgagee to acquire ownership of the mortgaged property without need
of foreclosure. Its insertion in the contract is an avowal of the intention to mortgage rather that to sell the
property.[17]
Indeed, in Reyes v. Sierra[18] this Court categorically ruled that a mortgagee’s mere act of registering the
mortgaged property in his own name upon the mortgagor’s failure to redeem the property amounted to
the exercise of the privilege of a mortgagee in a pactum commissorium.

Obviously, from the nature of the transaction, applicant’s predecessor-in-interest is a mere mortgagee,
and ownership of the thing mortgaged is retained by Basilia Beltran, the mortgagor. The mortgagee,
however, may recover the loan, although the mortgage document evidencing the loan was nonregistrable
being a purely private instrument. Failure of mortgagor to redeem the property does not automatically
vest ownership of the property to the mortgagee, which would grant the latter the right to appropriate the
thing mortgaged or dispose of it. This violates the provision of Article 2088 of the New Civil Code, which
reads:

The creditor cannot appropriate the things given by way of pledge or mortgage, or dispose by them. Any
stipulation to the contrary is null and void.

The act of applicant in registering the property in his own name upon mortgagor’s failure to redeem the
property would amount to a pactum commissorium which is against good morals and public policy.[19]

Thus, in the case at bar, the stipulations in the promissory notes providing that, upon failure of respondent
spouses to pay interest, ownership of the property would be automatically transferred to petitioner A.
Francisco Realty and the deed of sale in its favor would be registered, are in substance a pactum
commissorium. They embody the two elements of pactum commissorium as laid down in Uy Tong v.
Court of Appeals,[20] to wit:

The prohibition on pactum commissorium stipulations is provided for by Article 2088 of the Civil Code:

Art. 2088. The creditor cannot appropriate the things given by way of pledge or mortgagee, or dispose of
the same. Any stipulation to the contrary is null and void.

The aforequoted provision furnishes the two elements forpactum commissorium to exist: (1) that there
should be a pledge or mortgage wherein a property is pledged or mortgaged by way of security for the
payment of the principal obligation; and (2) that there should be a stipulation for an automatic
appropriation by the creditor of the thing pledged or mortgaged in the event of non-payment of the
principal obligation within the stipulated period.[21]

The subject transaction being void, the registration of the deed of sale, by virtue of which petitioner A.
Francisco Realty was able to obtain TCT No. PT-85569 covering the subject lot, must also be declared
void, as prayed for by respondents in their counterclaim.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED, insofar as it dismissed petitioner’s
complaint against respondent spouses on the ground that the stipulations in the promissory notes are
void for being a pactum commissorium,but REVERSED insofar as it ruled that the trial court had no
jurisdiction over this case. The Register of Deeds of Pasig City is hereby ORDERED to CANCEL TCT
No. PT-85569 issued to petitioner and ISSUE a new one in the name of respondent spouses.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-48612 January 27, 1983

CRESENCIO ESPEJO, Petitioner, vs. MARTINO MALATE and COURT OF FIRST INSTANCE OF
LEYTE, BRANCH I, Respondents.

VASQUEZ, J.: virtual law library

This is a petition for review on certiorari of the order of the Court of First Instance of Leyte in Civil Case
No. 5036, dismissing the case on the ground of lack of jurisdiction after the parties had rested their
respective cases.virtualawlibrary virtual law library

On January 31, 1974, the plaintiff Cresencio Espejo filed said civil case against defendant Martino Malate
entitled "Quieting of Title to and Possession of Real Property and Cancellation of Tax Declaration" before
the Court of First Instance of Leyte, Branch I then presided by Judge Gregorio Collantes. The complaint
alleged, among others, "that the plaintiff is the absolute owner and actual possessor of a parcel of
coconut land containing an area of 14 hectares, more or less, and assessed at P14,250.00, situated in
Barrio New Kawayan, Tacloban City, which is a portion of Lot No. 5329, Tacloban Cad. No. 220 ... "that
the plaintiff acquired said parcel of land by purchase on May 13, 1963 from the brothers Amando and
Saturnino Sa� osas and since then and up to the present time he has been in possession thereof in good
faith and with just title, in concept of owner, uninterruptedly and adversely against the claims of any
individual person or persons whomsoever, paying land taxes due thereon, and planting coconut trees and
introducing thereon other improvements"; "that the plaintiff's Possession tacked to that of his
predecessors-in-interest over the said land has been more than forty (40) years, and to proclaim this
possession, the plaintiff had this land declared in his name under Tax Declaration No. 18316 (which starts
with the year 1962) on May 15, 1963"; "that the defendant Martino Malate, a former tenant of the plaintiff
over the land, with evident bad faith, without-the knowledge, much less consent, of the plaintiff, on
December 29, 1964, had a portion of the land declared in his name under Tax Declaration No. 19484
(which starts with the year 1963); that the above-cited tax declaration of the defendant, embracing as it
does a portion included within the limits of the land described in paragraph 3 of the complaint, coupled
with the defendant's claim of ownership of 9.8 hectares therein as described in tax declaration and his
attempt to assume possession thereof by clearing the land and gathering the coconut therefrom, the
latest of which was in December, 1973, has cast a cloud upon the ownership and possession by the
plaintiff of the lot described in paragraph 3 of the complaint"; "that plaintiff's Tax Declaration No. 18316,
being based on a bona fide claim of ownership and actual possession which started on May 13, 1963,
and being the older tax declaration, should prevail over Tax Declaration No. 19484 of the defendant; the
cancellation of the latter tax declaration is in order"; "that a judicial declaration as to who is the owner and
entitled to possession of the parcel of land is imperative to forestall breaches of the peace, bodily injury to
persons, mayhem or perhaps even loss of life"; and "that the plaintiff is entitled to have the cloud cast
upon his ownership and lawful possession of the land by the defendant removed thru a judicial
declaration that the plaintiff is the owner thereof and legally entitled to the possession thereto." (Rollo,
page 27, Record on Appeal, pp. 2-5.) virtual law library
The defendant Martino Malate, on February 20, 1974, answered the complaint denying specifically all the
allegations therein and counter-alleged "that he is the absolute and exclusive owner of the land and had
been in actual and physical possession thereof, in the concept of an owner since 1926 introducing
improvement thereon." He also alleged affirmative special defenses and
counterclaims.virtualawlibrary virtual law library

On November 4, 1974, the defendant filed a motion to dismiss on the ground: "(a) that the court has no
jurisdiction over the subject of the action or suit; and (b) that the court has no jurisdiction over the nature
of the action or suit.virtualawlibrary virtual law library

With respect to the first ground, the defendant argued "that the subject matter of the above-entitled case
is a portion of Lot No. 5329, Tacloban Cad. No. 220, which is a public land hence, its disposition is
governed by the Public Land Act. Section 4 of Commonwealth Act No. 141, as amended, provides that
'subject to said control, the Director of Lands shall have direct control of survey, classification, lease, sale
or any other form of concession or disposition and management of the lands of the public domain, and his
decision as to questions of facts shall be conclusive when approved by the Secretary of Agriculture and
Natural Resources.' It is clear that the Director of Lands has the jurisdiction over said subject matter,
being a public land. " (Rollo, p. 27, Record on Appeal, pp. 16-17.) The defendant further concluded that
the plaintiff had not exhausted the administrative remedy available to him of filing the claim in the Bureau
of Lands.virtualawlibrary virtual law library

As to the second ground, the defendant argued that the action of the plaintiff was for forcible entry, and
was not properly filed, because when the plaintiff filed the case in January, 1974, it was only one year
from the accrual of the cause of action, which was in December, 1973, as may be gleaned from the
complaint; and that being a forcible entry case, it must be brought in the proper municipal or city court,
and not in the court of first instance.virtualawlibrary virtual law library

On November 18, 1974, the plaintiff filed an opposition to motion to dismiss arguing that the respondent
Court has jurisdiction over the land in dispute in the matter of deciding as to who, between the plaintiff or
the defendant, has the better right of possession.virtualawlibrary virtual law library

Plaintiff points out that the question of who has prior possession of the land is alleged in paragraphs 4 to
9 of the complaint, paragraphs 3 and 4 of the answer and paragraph 2 of the affirmative defenses; that he
has alleged that his possession tacked to that of his predecessors-in-interest has been for more than forty
years, while on the other hand, the defendant has averred that he has been in possession of the land in
question for more than forty- seven years; that the question presented, therefore, is as to who of them
has prior possession over the controverted land; and that the action, therefore, is an
accion publiciana over which the respondent Court has jurisdiction, as ruled by the Supreme Court
in Rallon vs. Ruiz, 28 SCRA 332.virtualawlibrary virtual law library

The respondent Court, on December- 5, 1974, denied the motion to dismiss. On July 16, 1975, it issued
an order requiring the plaintiff to amend the complaint in order to conform with their claim of possession
regarding the property. On July 31,1975, the plaintiff filed an amended complaint eliminating therefrom
the allegations as to his claim of ownership, and emphasizing instead his claim of
possession.virtualawlibrary virtual law library

The defendant filed his opposition to the motion to admit amended complaint on the following grounds.

A. That the amendment sought to be made is a complete change of the theory of the
case both in the complaint and the evidence so far adduced; virtual law library

B. That the amended complaint conferred jurisdiction on the Honorable Court but before
the said amendment the Honorable Court did not have jurisdiction to try the case as
 envisioned on the original complaint and the evidence so far adduced; and virtual law
library

C. That court cannot admit the said amended complaint for having no jurisdiction to act
on it and that the amended complaint does not conform to the evidence so far adduced
by the plaintiff.

On August 11, 1975, the Court issued an order admitting the amended complaint reasoning out as
follows:

... This court believes that the plaintiff wanted to emphasize who has the prior possession
of the land in question, the plaintiff or the defendant. It is admitted that the land in
question is a public land, and that the Director of Lands and the Secretary of Agriculture
and Natural Resources have jurisdiction over the disposition of the public land
conformably with Section 4 of Commonwealth Act No. 141. The question of ownership
will not be decided by this court.virtualawlibrary virtual law library

The only question that will be decided by this court in this case is, who has the prior
possession of the public land in question. Over this question as to who has prior
possession of the land in question and, therefore, entitled to the exclusion of the other,
this court has jurisdiction as shown by the decision of the Supreme Court ... (Rollo, p. 27,
Record on Appeal, pp. 45-46.)

For the second time, on September 27, 1975, another motion to dismiss was filed by the defendant on the
ground "that the Honorable Court has no jurisdiction over the subject-matter of the case as the plaintiff
has not exhausted the administrative remedies afforded." It was argued that "there is a pending
administrative investigation of the subject-matter of the case at bar between the plaintiff and defendant
and, therefore, the instant case should await the resolution of the administrative case." The defendant
was referring to a case wherein he is a protestant, in the administrative proceeding entitled Cresencio
Espejo vs. H. A. No. 206783 (E-121507) Felipe Mendiola Pastor( transferee), Delia Pastor
(transferee).virtualawlibrary virtual law library

The plaintiff filed his opposition to the motion to dismiss, arguing "that the second motion to dismiss filed
by the defendant was based on the same ground as that of the first motion to dismiss as well as his
opposition to the motion to admit amended complaint; and that the pendency of the case in the Bureau of
Lands is no bar to the present action involving merely the question of who has prior possession of the
land in question. " virtual law library

The court a quo denied the second motion to dismiss in an order dated December 16,
1975.virtualawlibrary virtual law library

On June 18, 1976, after the plaintiff had rested his case, the defendant filed a motion to dismiss on
demurrer to evidence reiterating the grounds raised in his two previous motions to
dismiss.virtualawlibrary virtual law library

The respondent Court, thru Judge Jesus N. Borromeo (temporarily presiding the sala vacated. by the
retirement of Judge Collantes), on September 10, 1976, issued an order denying the defendant's motion
for judgment on demurrer to evidence.virtualawlibrary virtual law library

After the defendant presented his evidence, the court, thru respondent Judge Jose P. Arro ,issued an
order dated January 23, 1978 dismissing the complaint for lack of jurisdiction and declaring the
proceedings taken therein as null and void.virtualawlibrary virtual law library
In this appeal, the plaintiff-petitioner raises the following assignment of errors:

I. The trial court erred in holding that, when the court issued an order to amend the
complaint so that the issue of ownership is deleted from the original complaint and for the
amended complaint to substantially alter the theory of the' tile complaint from- recovery of
the amended complaint does violence to the provision of Section 3, Rule 10 of the Rules
of Court.virtualawlibrary virtual law library

II. The trial court erred in holdieng that it is without jurisdiction and declaring the
proceeding in the case null and void.

The defendant-respondent commented that what was dismissed for lack of jurisdiction by the court a
quo was an action for reinvindicatoria or action for ownership; that the action being for ownership
or accion reinvindicatoria is shown by the contents of the prayers of the complaint itself; and that since
the original complaint failed to allege prior possession, the lower court has no power to place in the
original complaint the theory of prior possession by a mere stroke of an order to amend the
complaint.virtualawlibrary virtual law library

Both parties were required to submit their respective memoranda. Only the petitioner did, and the case
was submitted for decision without any memorandum for the respondents.virtualawlibrary virtual law
library

We agree with the petitioner that the question of who had prior possession of the land was brought out in
the original complaint. An examination thereof would reveal that there it contained enough allegations of
facts constitutive of the issue of prior possession The allegations relating to the length and nature of
possession by the plaintiff of the land in question, the tacking of the plaintiff's possession to that of his
predecessors-in-interest; the adverse claim by the defendant; and as to whose tax declaration should
prevail, support the contention of the petitioner that the question of "who has prior possession over the
controverted land and is, therefore, entitled to such possession to the exclusion 'of the other, is contained
in the original complaint.virtualawlibrary virtual law library

While the said complaint had categorically alleged a claim of ownership, this Court had had the occasion
to declare such kind of a complaint as an accion publiciana, and to regard the allegation of ownership
therein as a "mere surplusage." virtual law library

In Molina vs. De Bacud 19 SCRA 956, "(i)n her complaint before the Court of First Instance of the
province (Isabela), respondent alleged that she was the absolute owner and possessor of these lands,
having inherited them from her mother, Catalina Siccuan; that in her lifetime her mother was in
'continuous, public, quiet and adverse possession' of the lands, in the concept of an owner, and that in
1944 Julian Molina, employing violence, force, strategy and intimidation,' seized possession of Lot 1 and
a part of Lot 2 and cut the trees found therein. As relief, she asked the Court to declare her the owner of
the lands and to order Molina to deliver to her the lands and products and pay her
damages.virtualawlibrary virtual law library

The petitioners therein contended "that after finding that the lands in question are public lands, the trial
Court should have dismissed this case because under Section 4 of the Public Land Act (Commonwealth
Act No. 141), the authority to dispose of public lands is vested exclusively in the Director of
Lands.virtualawlibrary virtual law library

We struck down said argument as without merit because "the authority given to the Land Department
over the disposition of public land does not exclude the courts from their jurisdiction over possessory
actions, the public character of the land notwithstanding. This is such an action and the fact that on her
complaint respondent claimed the lands in ownership did not change the nature of her action. The
allegation of ownership should be regarded as a mere surplusage.virtualawlibrary virtual law library
In Diaz vs. Macalinao, 102 Phil. 999, involving substantially similar facts, this Court ruled that ... (t)he
action presented is not one of ownership, although plaintiffs allege ownership and pray that the land be
declared in their favor... The allegation of ownership and the prayer therefor may, therefore, be
considered as a mere surplusage and this case be considered as an action for
possession.virtualawlibrary virtual law library

In Reyes vs. Sta. Maria, 91 SCRA 164, an action to quiet title and to recover possession, it was held that
... (s)uch an action was clearly an accion publiciana for the recovery of the right to possess (possession
de jure (if not an accion reivindicatoria) falling within the lower court's jurisdiction....virtualawlibrary virtual
law library

The lower court was clearly in error in issuing its dismissal order on its mistaken notion 'that the
allegations of facts are merely constitutive of an action for unlawful detainer' since the complaint shows
on its face that respondents' refusal to deliver possession of the property was due to their adverse claim
of ownership of the same property and their counter allegation that they bought the same ... and,
therefore, petitioners' jurisdiction was clearly one for recovery of their right to possess the property
(possession de jure ... .)' (See also Medina vs. Valdellon, 63 SCRA 278; Ledesma v Marcos, 9 Phil.
618.) virtual law library

Scrutinizing the allegations in the original complaint in the light of foregoing pronouncements of this Court,
the conclusion comes easy that while the question of ownership was raised in the original complaint, the
said pleading likewise placed at issue the question of who had the better or prior right of possession. It
has been a recognized principle of law in our jurisdiction that the courts have jurisdiction to determine
who has prior possession of public land and entitled to be protected in such possession. (Rallon vs. Ruiz,
Jr., 28 SCRA 332; Pitargue vs. Sorella, 92 Phil 5; Molina vs. De Bacud 19 SCRA 956; Villaflor vs. Reyes,
22 SCRA 385; Madamba vs. Araneta, 106 Phil. 103; Bueno vs. Patanao, 9 SCRA 794: Angcao vs.
Punzalan, 12 SCRA 706; and Aguilon vs. Bohol, 79 SCRA 482.) virtual law library

Section 15 of Rule 6 of the Rules of Court provides that "all pleadings shall be liberally construed so as to
do substantial justice." The original complaint of the petitioner, entitled, "Quieting of Title to and
Possession of Real Property and Cancellation of Tax Declaration" could properly be construed as a
plenary action to recover possession or an accion publiciana in addition to its being one for recovery of
ownership.virtualawlibrary virtual law library

As the petitioner correctly argued, "there were two (2) issues brought out in the original complaint - the
principal one, the issue of ownership over the land in dispute, and the secondary but no less important
one, the issue of who has prior possession thereof. Over the first issue, the trial court undoubtedly has no
jurisdiction, the land in question being a public land, but over the second, the trial court undoubtedly has
jurisdiction.virtualawlibrary virtual law library

The lower court, therefore, erroneously held that it is devoid of jurisdiction over the subject matter of the
action in declaring that the petitioner's action is solely to quiet title or to recover ownership of real
property. The issue of who has the prior possession being unmistakably alleged in the original complaint,
the trial court acquired jurisdiction over the case insofar as said issue is concerned.virtualawlibrary virtual
law library

Jurisdiction of the courts is conferred and governed by law (Leoquinco vs. Canada Dry Bottling Co., 37
SCRA 535), and is determined by the pleadings (Pineda vs. CFI of Davao, 1 SCRA 1020), whether it be
jurisdiction over the subject, matter or jurisdiction over the nature of the action. "Jurisdiction of a court
over the subject matter ... should not be made to depend on the literal averments of the complaint-
indirectly on the ability of the parties to word or phrase their pleadings - where the actual issues are
evident from the record of the case." (Leoquinco vs. Canada Dry Bottling
Co., supra).virtualawlibrary virtual law library
The trial court having acquired jurisdiction over the subject matter as well as over the nature of the action
on the original complaint, it could validly issue an order to amend the original complaint. The deletion of
the issue of ownership from the original complaint and the amended complaint having limited the issue to
prior possession did not substantially alter the theory of the complaint.

In determining whether a different cause of action is introduced by amendments to the

complaint, what is to be ascertained is whether the defendants shall be required o
answer for a liability or legal obligation wholly different from that which was stated in the
original complaint. Any amendment will not be considered as stating a new cause of
action if the fact alleged in the amended complaint show substantially the same wrong
with respect to the same transaction, or if what is alleged refer to the same matter but are
more fully and differently stated, or where averment which were implied and made in
express, and the subject of the controversy or the liability sought to be enforced remains
the same. (Rubio vs. Mariano, 49 SCRA 319.)

Besides, a superficial examination of the original complaint, and the amended complaint would show that
both pleadings are virtually Identical. The only difference was that the words "absolute owner" were delete
from the original complaint, and "prior right of possession" emphasized and particularized in the
ammended complaint. As a matter of fact, notwithstanding the new reglementary period given to the
defendant within, which to answer the amended complaint, he opted not to file a new answer and instead
relied on his original answer.virtualawlibrary virtual law library

ACCORDINGLY, the petition for review on certiorari is hereby granted.virtualawlibrary virtual law library

The order dated January 23, 1978 of the respondent Judge is hereby annulled and set-aside, and the trial
court is ordered to render judgment on the merits of the case.virtualawlibrary virtual law library

Costs against private respondent.virtualawlibrary virtual law library

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 180394 September 29, 2008

MARJORIE B. CADIMAS, by her Attorney-In-Fact, VENANCIO Z. ROSALES,

vs.
MARITES CARRION and GEMMA HUGO, Respondents.

DECISION

TINGA, J.:

This is a petition for review on certiorari1 under Rule 45 of the 1997 Rules of Civil Procedure, assailing the
Decision2 and Resolution3 of the Court of Appeals in CA-G.R. SP No. 98572. The appellate court set
aside two orders4 of the Regional Trial Court (RTC), Branch 85, Quezon City issued in Civil Case No. Q-
04-53581 on the ground that the trial court had no jurisdiction over the case.

The instant petition stemmed from the complaint5 for accion reivindicatoria and damages filed by
petitioner Marjorie B. Cadimas, through her attorney-in-fact, Venancio Z. Rosales, against respondents
Marites Carrion and Gemma Hugo. The complaint was docketed as Civil Case No. Q-04-53581 and
raffled to Branch 85 of the RTC of Quezon City.

In the complaint, petitioner averred that she and respondent Carrion were parties to a Contract To Sell
dated 4 August 2003, wherein petitioner sold to respondent Carrion a town house located at Lot 4-F-1-12
No. 23 Aster Street, West Fairview Park Subdivision, Quezon City for the sum of P330,000.00 to be paid
in installments. According to petitioner, Carrion had violated paragraph 8 of said contract when she
transferred ownership of the property to respondent Hugo under the guise of a special power of attorney,
which authorized the latter to manage and administer the property for and in behalf of respondent
Carrion. Allegedly, petitioner asked respondent Carrion in writing to explain the alleged violation but the
latter ignored petitioner’s letter, prompting petitioner to demand in writing that Carrion and Hugo vacate
the property and to cancel the contract.6

On 28 October 2004, petitioner filed a Motion To Declare Defendant Marites Carrion In Default, 7 alleging
that despite the service of summons and a copy of the complaint, respondent Carrion failed to file a
responsive pleading within the reglementary period.

Respondent Hugo filed a Motion To Dismiss8 on her behalf and on behalf of respondent Carrion on 18
November 2004, citing the grounds of lack of jurisdiction to hear the case on the part of the RTC and
estoppel and/or laches on the part of petitioner. Respondent Hugo argued that the Housing and Land Use
Regulatory Board (HLURB) has jurisdiction over the complaint because ultimately, the sole issue to be
resolved was whether petitioner, as the owner and developer of the subdivision on which the subject
property stood, was guilty of committing unsound real estate business practices.

In the same motion, respondent Hugo averred that the RTC had not acquired jurisdiction over the person
of respondent Carrion for not complying with Section 16, Rule 14 of the Rules of Court on the proper
service of summons on a non-resident defendant. However, attached to the motion was a special power
of attorney, whereby respondent Carrion had authorized respondent Hugo, among others, to manage and
administer the subject property and to prosecute and defend all suits to protect her rights and interest in
said property.9

After petitioner filed a comment on the motion to dismiss, the RTC issued an Omnibus Order 10 on 21
March 2005, which denied the motion to dismiss. The RTC held that the court’s jurisdiction is not
determined by the defenses set up in the answer or the motion to dismiss.

In the same omnibus order, the RTC ruled that summons was served properly, thus, the court had
acquired jurisdiction over respondent Carrion. The RTC noted that respondent Hugo’s failure to disclose
at the outset that she was equipped with a special power of attorney was an act constitutive of misleading
the court. Thus, the RTC declared respondent Carrion in default, directed petitioner to present
evidence ex-parte against respondent Carrion, and respondent Hugo to file an answer.

On 18 April 2005, respondent Hugo filed an answer on her behalf and as the attorney-in-fact of
respondent Carrion.11 The answer pleaded a compulsory counterclaim for damages. The following day,
petitioner presented evidence ex-parte against respondent Carrion. Thus, on 22 April 2005, respondent
Hugo sought a reconsideration of the omnibus order, praying for the dismissal of the complaint, the
cancellation of the presentation of evidence ex-parte, the lifting of the order of default against respondent
Carrion and the issuance of an order directing the extraterritorial service of summons on respondent
Carrion.12
On 17 January 2007, the RTC issued an order, upholding its jurisdiction over petitioner’s complaint. Citing
the interest of substantial justice, the RTC lifted the order of default against respondent Carrion and set
the pre-trial conference of the case.13

However, respondents elevated the matter to the Court of Appeals via a special civil action for certiorari,
praying that the Omnibus Order dated 21 March 2005 and Order dated 17 January 2007 issued by Judge
Teodoro T. Riel be reversed and set aside and that the complaint in Civil Case No. Q-04-53581 be
dismissed for lack of jurisdiction.

On 27 September 2007, the Court of Appeals rendered the assailed Decision granting respondents’
petition for certiorari. The appellate court set aside the assailed orders of the RTC and ordered the
dismissal of petitioner’s complaint for lack of jurisdiction. In its Resolution dated 9 November 2007, the
Court of Appeals denied petitioner’s motion for reconsideration.

Hence, the instant petition, raising the following arguments: (1) based on the allegations in the complaint,
the RTC has jurisdiction over Civil Case No. Q-04-53581; (2) in any case, respondents have expressly
submitted to or recognized the jurisdiction of the RTC by filing an answer with counterclaim; and (3)
respondents erroneously availed of a Rule 65 petition instead of filing a timely appeal from the order
denying their motion to dismiss.14

Essentially, petitioner argues that based on the allegations in the complaint and the reliefs sought, the
RTC has jurisdiction over the matter. In any case, the compulsory counterclaim pleaded in the answer of
respondents was an express recognition on their part of the jurisdiction of the RTC over the complaint
foraccion reivindicatoria, petitioner adds.

The petition is meritorious.

The nature of an action and the jurisdiction of a tribunal are determined by the material allegations of the
complaint and the law at the time the action was commenced. Jurisdiction of the tribunal over the subject
matter or nature of an action is conferred only by law and not by the consent or waiver upon a court
which, otherwise, would have no jurisdiction over the subject matter or nature of an action. 15

An examination of Section 1 of Presidential Decree (P.D.) No. 1344, 16 which enumerates the regulatory
functions of the HLURB,17

readily shows that its quasi-judicial function is limited to hearing only the following specific cases:

SECTION 1. In the exercise of its functions to regulate the real estate trade and business and in addition
to its powers provided for in Presidential Decree No. 957, the National Housing Authority shall have
exclusive jurisdiction to hear and decide cases of the following nature:

A. Unsound real estate business practices;

B. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer
against the project owner, developer, dealer, broker, or salesman; and

C. Cases involving specific performance of contractual and statutory obligations filed by buyers of
subdivision lot or condominium unit against the owner, developer, dealer or salesman.

The aforequoted provision must be read in the light of the statute’s preamble or the introductory or
preparatory clause that explains the reasons for its enactment or the contextual basis for its interpretation.
The scope of the regulatory authority thus lodged in the National Housing Authority (NHA) [now HLURB]
is indicated in the second and third preambular paragraphs of the statute which provide:
"WHEREAS, numerous reports reveal that many real estate subdivision owners, developers, operators,
and/or sellers have reneged on their representations and obligations to provide and maintain properly
subdivision roads, drainage, sewerage, water systems, lighting systems and other similar basic
requirements, thus endangering the health and safety of home and lot buyers;

WHEREAS, reports of alarming magnitude also show cases of swindling and fraudulent manipulations
perpetrated by unscrupulous subdivision and condominium sellers and operators, such as failure to
deliver titles to the buyers or titles free from liens and encumbrances, and to pay real estate taxes, and
fraudulent sales of the same subdivision lots to different innocent purchasers for value ."18

The boom in the real estate business all over the country resulted in more litigation between subdivision
owners/developers and lot buyers with the issue of the jurisdiction of the NHA or the HLURB over such
controversies as against that of regular courts. In the cases that reached this Court, the ruling has
consistently been that the NHA or the HLURB has jurisdiction over complaints arising from contracts
between the subdivision developer and the lot buyer or those aimed at compelling the subdivision
developer to comply with its contractual and statutory obligations to make the subdivision a better place to
live in.19

We agree with the ruling of the RTC that it has jurisdiction over the case based on the allegations of the
complaint. Nothing in the complaint or in the contract to sell suggests that petitioner is the proper party to
invoke the jurisdiction of the HLURB. There is nothing in the allegations in the complaint or in the terms
and conditions of the contract to sell that would suggest that the nature of the controversy calls for the
application of either P.D. No. 957 or P.D. No. 1344 insofar as the extent of the powers and duties of the
HLURB is concerned.

Note particularly paragraphs (b) and (c) of Sec. 1, P.D. No. 1344 as worded, where the HLURB’s
jurisdiction concerns cases commenced by subdivision lot or condominium unit buyers. As to paragraph
(a), concerning "unsound real estate practices," the logical complainants would be the buyers and
customers against the sellers (subdivision owners and developers or condominium builders and realtors),
and not vice versa.20

The complaint does not allege that petitioner is a subdivision lot buyer. The contract to sell does not
contain clauses which would indicate that petitioner has obligations in the capacity of a subdivision lot
developer, owner or broker or salesman or a person engaged in real estate business. From the face of
the complaint and the contract to sell, petitioner is an ordinary seller of an interest in the subject property
who is seeking redress for the alleged violation of the terms of the contract to sell. Petitioner’s complaint
alleged that a contract to sell over a townhouse was entered into by and between petitioner and
respondent Carrion and that the latter breached the contract when Carrion transferred the same to
respondent Hugo without petitioner’s consent.21 Thus, petitioner sought

the cancellation of the contract and the recovery of possession and ownership of the town house. Clearly,
the complaint is well within the jurisdiction of the RTC.

In Javellana v. Hon. Presiding Judge, RTC, Branch 30, Manila,22 the Court affirmed the jurisdiction of the
RTC over the complaint for accion publiciana and sum of money on the ground that the complaint did not
allege that the subject lot was part of a subdivision project but that the sale was an ordinary sale on an
installment basis. Even the mere assertion that the defendant is a subdivision developer or that the
subject lot is a subdivision lot does not automatically vest jurisdiction on the HLURB. On its face, the
complaint must sufficiently describe the lot as a subdivision lot and sold by the defendant in his capacity
as a subdivision developer to fall within the purview of P.D. No. 957 and P.D. No. 1344 and thus within
the exclusive jurisdiction of the HLURB.23

In their comment, respondents cite Antipolo Realty Corp. v. National Housing Authority,24 to bolster the
argument that the HLURB has jurisdiction over controversies involving the determination of the rights of
the parties under a contract to sell a subdivision lot. Antipolo Realty is not squarely applicable to the
instant controversy. The issue in said case called for the determination of whether the developer complied
with its obligations to complete certain specified improvements in the subdivision within the specified
period of time, a case that clearly falls under Section 1, paragraph (c) of P.D. No. 1344.

In the instances where the jurisdiction of the HLURB was upheld, the allegations in the complaint clearly
showed that the case involved the determination of the rights and obligations of the parties in a sale of
real estate under P.D. No. 957,25 or the complaint for specific performance sought to compel the
subdivision developer to comply with its undertaking under the contract to sell, 26 or the claim by the
subdivision developer would have been properly pleaded as a counterclaim in the HLURB case filed by
the buyer against the developer to avoid splitting causes of action. 27

The statement in Suntay v. Gocolay28 to the effect that P.D. No. 957 encompasses all questions
regarding subdivisions and condominiums, which was cited by the Court of Appeals in the assailed
decision, is a mere obiter dictum. As a matter of fact, the Court in Suntay nullified the orders issued by the
HLURB over the action for the annulment of an auction sale, cancellation of notice of levy and damages
on the ground of lack of jurisdiction. P.D. No. 957 and P.D. No. 1344 were not the applicable laws
because the action was brought against a condominium buyer and not against the developer, seller, or
broker contemplated under P.D. No. 1344. The action likewise involved the determination of ownership
over the disputed condominium unit, which by its nature does not fall under the classes of disputes
cognizable by the HLURB under Section 1 of P.D. No. 1344.

The Court of Appeals held that the provision in the contract to sell mandating membership of the buyer of
the housing unit in a housing corporation was a strong indication that the property purchased by
respondent Carrion from petitioner was part of a tract of land subdivided primarily for residential
purposes. Thus, the appellate court concluded that the HLURB has jurisdiction over the controversy
because the property subject thereof was part of a subdivision project.

Not every controversy involving a subdivision or condominium unit falls under the competence of the
HLURB29 in the same way that the mere allegation of relationship between the parties, i.e., that of being
subdivision owner/developer and subdivision lot buyer, does not automatically vest jurisdiction in the
HLURB. For an action to fall within the exclusive jurisdiction of the HLURB, the decisive element is the
nature of the action as enumerated in Section 1 of P.D. No. 1344.30 Notably, in Spouses Dela Cruz v.
Court of Appeals,31 the Court upheld the jurisdiction of the RTC over the complaint for cancellation of the
contract to sell of a subdivision house and lot because the case did not fall under any of the cases
mentioned in Section 1, P.D. No. 1344. In interpreting said provision, the Court explained, thus:

On this matter, we have consistently held that the concerned administrative agency, the National Housing
Authority (NHA) before and now the HLURB, has jurisdiction over complaints aimed at compelling the
subdivision developer to comply with its contractual and statutory obligations.

For their part, respondents claim that the resolution of the case ultimately calls for the interpretation of the
contract to sell and the determination of whether petitioner is guilty of committing unsound real estate
business practices, thus, the proper forum to hear and decide the matter is the HLURB. The argument
does not impress.

It is an elementary rule of procedural law that jurisdiction of the court over the subject matter is
determined by the allegations of the complaint irrespective of whether or not the plaintiff is entitled to
recover upon all or some of the claims asserted therein. As a necessary consequence, the jurisdiction of
the court cannot be made to depend upon the defenses set up in the answer or upon the motion to
dismiss, for otherwise, the question of jurisdiction would almost entirely depend upon the defendant. What
determines the jurisdiction of the court is the nature of the action pleaded as appearing from the
allegations in the complaint. The averments in the complaint and the character of the relief sought are the
matters to be consulted.32 Thus, the allegations in respondents’ motion to dismiss on the unsound real
estate business practices allegedly committed by petitioner, even if proved to be true, cannot serve to
oust the RTC of its jurisdiction over actions for breach of contract and damages which has been conferred
to it by law.

WHEREFORE, the instant petition for review on certiorari is GRANTED and the Decision dated 27
September 2007 and Resolution dated 9 November 2007 of the Court of Appeals in CA-G.R. SP No.
98572 are REVERSED and SET ASIDE. The orders dated 21 March 2005 and 17 January 2007 of the
Regional Trial Court, Branch 85, Quezon City in Civil Case No. Q-04-53581 are REINSTATED. The
Regional Trial Court is ORDERED to resume the proceedings in and decide Civil Case No. Q-04-53581
with deliberate speed. Costs against respondents.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-48050 October 10, 1994

FELICIDAD JAVIER, Petitioner, vs. HON. REGINO T. VERIDIANO II, Presiding Judge, Branch I, Court
of First Instance of Zambales and REINO ROSETE, Respondents.

BELLOSILLO, J.: virtual law library

Petitioner Felicidad Javier questions before us the order of a regional trial court citing the final decision of
the city court previously dismissing her complaint for forcible entry, and on the basis thereof, dismissed
her petition to quiet title on the ground of res judicata. We summon the time-honored remedies accion
interdictal, accion publiciana and accion reivindicatoria or accion de reivindicacion to resolve the issues
presented in the petition.virtualawlibrary virtual law library

It appears that on 25 January 1963, petitioner filed a Miscellaneous Sales Application for Lot No. 1641,
Ts-308 of the Olongapo Townsite Subdivision, Lower Kalaklan, Olongapo City, with the District Land
Officer, Bureau of Lands, Olongapo City. Sometime in December 1970, alleging that she was forcibly
dispossessed of a portion of the land by a certain Ben Babol, she instituted a complaint for forcible entry
before the City Court of Olongapo City, docketed as Civil Case No. 926, stating in pars. 2 and 3 therein
that -

. . . plaintiff is the true, lawful and in actual, prior physical possession of a certain parcel
of land situated at Lower Kalaklan, City of Olongapo, said lot being designated as Lot No.
1641, Ts-308 of the Olongapo Townsite Subdivision since 1961 and up to the present
time, until the day and incidents hereinafter narrated. . . . Sometime on December 12,
1970, the defendant, without express consent of plaintiff and without lawful authority,
through scheme, strategy and stealth, forcibly entered a portion on the southwestern part
of Lot No. 1641, Ts-308, with the assistance of hired helpers, started construction of
riprap along the Kalaklan River perimeter of said portion of land; said entry was further
augmented by removing plaintiff's chain link, fence with galvanized iron posts embedded
in concrete, likewise destroying plants introduced by plaintiff by removing existing BL
 (Bureau of Lands) monuments thereon, and by these actions, defendant started
exercising illegal possession of said portion of land which contains an area of 200 square
meters, more or less. 1 virtual law library

On 7 November 1972 the City Court of Olongapo City, Br. 4, 2 dismissed Civil Case No. 926 on the
ground that "it appears to the Court that the Bureau of Lands has considered the area in question to be
outside Lot 1641 of the plaintiff. . . ." 3 The Decision of the City Court of Olongapo City became final and
executory on 30 April 1973 when the then Court of First Instance of Zambales and Olongapo City, Br.
3, 4 dismissed the appeal and affirmed the findings and conclusions of the City Court holding that
appellant (herein petitioner) failed to give sufficient evidence to prove that the area in question was within
the boundaries of Lot No. 1641. 5 virtual law library

Subsequently, on 17 December 1973, petitioner was granted Miscellaneous Sales Patent No. 5548 and
issued Original Certificate of Title No. P-3259 covering Lot No. 1641. Meanwhile, Ben Babol who was the
defendant and appellee in the complaint for forcible entry had sold the property he was occupying,
including the portion of about 200 square meters in question, to a certain Reino Rosete. Thus petitioner
demanded the surrender of the same area in dispute from Reino Rosete who repeatedly refused to
comply with the demand.virtualawlibrary virtual law library

On 29 June 1977, or after about four (4) years from the finality of the dismissal of Civil Case No. 926,
petitioner instituted a complaint for quieting of title and recovery of possession with damages against Ben
Babol and Reino Rosete before the then Court of First Instance of Zambales and Olongapo City,
docketed as Civil Case No. 2203-0, alleging in pars. 2 and 3 therein that -

. . . plaintiff is the absolute owner in fee simple of a parcel of land identified as Lot No.
1641, Ts-308, Olongapo Townsite Subdivision . . . covered by Original Certificate of Title
No. P-3259, issued by the Register of Deeds for the province of Zambales. . . . Sometime
in December,
1970, and until present, defendants, relying on an application filed on December 23,
1969, with the Bureau of Lands, however have squatted, illegally occupied and unlawfully
possessed the southwestern portion of plaintiff's above-described property of about 200
square meters, then by defendant BEN BABOL and now by defendant REINO ROSETE,
the former having sold the entirety of his property to the latter, including the portion in
question. . . . 6 virtual law library

Instead of filing a responsive pleading, therein defendant Reino Rosete (private respondent herein)
moved to dismiss the complaint on the ground of res judicata. Defendant Ben Babol did not file any
pleading.virtualawlibrary virtual law library

In its Order dated 27 January 1978, 7 the then Court of First Instance of Zambales, Br. 1, 8 sustained the
argument of Rosete and granted his motion to dismiss. Thereafter, petitioner's motion for reconsideration
was denied. 9 Hence, this petition for review on certiorari.virtualawlibrary virtual law library

Petitioner contends that res judicata cannot apply in the instant case since there is no identity of parties
and causes of action between her complaint for forcible entry, which had long become final and
executory, and her subsequent petition for quieting of title. She argues that private respondent Reino
Rosete, who invokes the defense or res judicata, was never impleaded in the forcible entry case, which is
an action in personam; neither was he a purchaser pendente lite who, perhaps, could have validly
invoked the defense of res judicata. With regard to the cause of action, she maintains that there is no
identity of causes of action since the first case was for forcible entry, which is merely concerned with the
possession of the property, whereas the subsequent case was for quieting of title, which looks into the
ownership of the disputed land.virtualawlibrary virtual law library
Private respondent however submits that there is identity of parties in the two cases since he is a
successor in interest by title of the defendant in the first case after the commencement of the first action.
On the issue of identity of causes of action, he simply states that neither of the two cases, i.e., the
complaint for forcible entry and the subsequent petition for quieting of title, alleges a cause of action.
Thus, private respondent continues, both cases have to be dismissed.virtualawlibrary virtual law library

Time and again it has been said that for res judicata to bar the institution of a subsequent action the
following requisites must concur: (1) There must be a final judgment or order; (2) The court rendering the
judgment must have jurisdiction over the subject matter; (3) The former judgment is a judgment on the
merits; and, (4) There is between the first and second actions identity of parties, of subject matter and of
causes of action. 10 The presence of the first three requirements and the identity of subject matter in the
fourth requirement are not disputed. Hence, the only issues remaining are whether as between Civil Case
No. 926 and Civil Case No. 2203-0 there is identity of parties and of causes of action which would bar the
institution of Civil Case No. 2203-0.virtualawlibrary virtual law library

Petitioner's argument that there is no identity of parties between the two actions is without merit. We have
repeatedly ruled that for res judicata to apply, what is required is not absolute but only substantial identity
of parties. 11 It is fundamental that the application of res judicata may not be evaded by simply including
additional parties in a subsequent litigation. In fact we have said that there is still identity of parties
although in the second action there is one party who was not joined in the first action, if it appears that
such party is not
a necessary party either in the first or second action, 12 or is a mere nominal party. 13 Thus, Sec. 49, par.
(b), Rule 39, Rules of Court, provides that ". . . the judgment or order is, with respect to the matter directly
adjudged or as to any other matter that could have been raised in relation thereto, conclusive between
the parties and their successors in interest by title subsequent to the commencement of the action or
special proceeding, litigating for the same thing and under the same title and in the same capacity." virtual
law library

In the case at bench, it is evident that private respondent Reino Rosete is a successor in interest of Ben
Babol by title subsequent to the commencement and termination of the first action. Hence, there is actual,
if not substantial, identity of the parties between the two actions. But, there is merit in petitioner's
argument that there is no identity of causes of action between Civil Case
No. 926 and Civil Case No. 2203-0.virtualawlibrary virtual law library

Civil Case No. 926 is a complaint for forcible entry, where what is at issue is prior possession, regardless
of who has lawful title over the disputed property. 14 Thus, "[t]he only issue in an action for forcible entry is
the physical or material possession of real property, that is, possession de facto and not possession de
jure. The philosophy underlying this remedy is that irrespective of the actual condition of the title to the
property, the party in peaceable quiet possession shall not be turned out by strong hand, violence or
terror." 15 And, a judgment rendered in a case for recovery of possession is conclusive only on the
question of possession and not on the ownership. It does not in any way bind the title or affect the
ownership of the land or building. 16 virtual law library

On the other hand, Civil Case No. 2203-0 while inaccurately captioned as an action for "Quieting of Title
and Recovery of Possession with Damages" is in reality an action to recover a parcel of land or an accion
reivindicatoria under Art. 434 17 of the Civil Code, and should be distinguished from Civil Case No. 926,
which is an accion interdictal. From the averments of the complaint in Civil Case No. 2203-0, plaintiff
therein (petitioner herein) clearly sets up title to herself and prays that respondent Rosete be ejected from
the disputed land and that she be declared the owner and given possession thereof. Certainly, the
allegations partake of the nature of an accion reivindicatoria. 18 virtual law library

The doctrine in Emilia v. Bado, 19, decided more than twenty-five years ago, is still good law and has
preserved the age-old remedies available under existing laws and jurisprudence to recover possession of
real property, namely accion interdictal, which is the summary action for forcible entry (detentacion) where
the defendant's possession of the property is illegal ab initio, or the summary action for unlawful detainer
(desahuico) where the defendant's possession was originally lawful but ceased to be so by the expiration
of his right to possess, both of which must be brought within one year from the date of actual entry on the
land, in case of forcible entry, and from the date of last demand, in case of unlawful detainer, in the
proper municipal trial court or metropolitan trial court; 20 accion publiciana which is a plenary action for
recovery of the right to possess and which should be brought in the proper regional trial court when the
dispossession has lasted for more than one year; and, accion reivindicatoria or accion de
reivindicacion which seeks the recovery of ownership and includes the jus utendi and the jus
fruendibrought in the proper regional trial court.

Accion reivindicatoria or accion de reivindicacion is thus an action whereby plaintiff alleges ownership
over a parcel of land and seeks recovery of its full possession. 21 It is different fromaccion
interdictal or accion publiciana where plaintiff merely alleges proof of a better right to possess without
claim of title. 22 virtual law library

In Civil Case No. 926 petitioner merely claimed a better right or prior possession over the disputed area
without asserting title thereto. It should be distinguished from Civil Case No. 2203-0 where she expressly
alleged ownership, specifically praying that she be declared the rightful owner and given possession of
the disputed portion. Hence, in Civil Case No. 926 petitioner merely alleged that she was "the true, lawful
(possessor) and in actual, prior physical possession" of the subject parcel of land, whereas in Civil Case
No. 2203-0 she asserted that she was "the absolute owner in fee simple" of the parcel of land "covered by
Original Transfer Certificate of Title No. P-3259." The complaint in Civil Case No. 2203-0 definitely raises
the question of ownership and clearly gives defendants therein notice of plaintiff's claim of exclusive and
absolute ownership, including the right to possess which is an elemental attribute of such ownership.
Thus, this Court has ruled that a judgment in forcible entry or detainer case disposes of no other issue
than possession and declares only who has the right of possession, but by no means constitutes a bar to
an action for determination of who has the right or title of ownership. 23 virtual law library

And, applying the ruling of the Court En Banc in Quimpo v. De la Victoria, 24 even if we treat Civil Case
No. 2203-0 as a petition to quiet title, as its caption suggests, still it has a cause of action different from
that for ejectment. Consequently, there being no identity of causes of action between Civil Case No. 926
and Civil Case No. 2203-0, the prior complaint for ejectment cannot bar the subsequent action for
recovery, or petition to quiet title.virtualawlibrary virtual law library

WHEREFORE, the petition is GRANTED. The Order dated 27 January 1978 of the then Court of First
Instance of Zambales, Br. I, with station in Olongapo City, dismissing Civil Case No. 2203-0, and its
subsequent Order denying reconsideration of the dismissal are REVERSED and SET
ASIDE.virtualawlibrary virtual law library

The Clerk of Court is directed to remand the records immediately to the court of a quo and the latter to
proceed with the trial of Civil Case No. 2203-0 with deliberate dispatch. This decision is immediately
executory.virtualawlibrary virtual law library

SO ORDERED.