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SYLLABUS CIVIL PROCEDURE SECOND YEAR WMSU COLLEGE OF LAW BY: ATTY. FLORIZA P. SALES I. INTRODUCTION JURISDICTION OF MTC. MCTC, MTCC, MeTC and RTC in Civil Cases: Republic Act No. 7691 March 25, 1994

AN ACT EXPANDING THE JURISDICTION OF THE METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL COURTS, AND MUNICIPAL CIRCUIT TRIAL COURTS, AMENDING FOR THE PURPOSE BATAS PAMBANSA, BLG. 129, OTHERWISE KNOWN AS THE "JUDICIARY REORGANIZATION ACT OF 1980" Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of 1980", is hereby amended to read as follows: "Sec. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive original jurisdiction. "(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation; "(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000,00) or, for civil actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts; "(3) In all actions in admiralty and maritime jurisdiction where the demand or claim exceeds One hundred thousand pesos (P100,000.00) (now, P300,000.00) or, in Metro Manila, where such demand or claim exceeds Two hundred thousand pesos (P200,000.00) (now, P400,000.00); "(4) In all matters of probate, both testate and intestate, where the gross value of the estate exceeds One hundred thousand pesos (P100,000.00) or (P300,000.00) in probate matters in Metro Manila, where such gross value exceeds Two Hundred thousand pesos (P200,000.00) (P400,000); "(5) In all actions involving the contract of marriage and marital relations; "(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising jurisdiction of any court, tribunal, person or body exercising judicial or quasi-judicial functions; "(7) In all civil actions and special proceedings falling within the exclusive original jurisdiction of a Juvenile and Domestic Relations Court and of the Court of Agrarian Relations as now provided by law; and

"(8) In all other cases in which the demand, exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses, and costs or the value of the property in controversy exceeds One hundred thousand pesos (P100,000.00) or, in such other cases in Metro Manila, where the demand exclusive of the abovementioned items exceeds Two Hundred thousand pesos (P200,000.00)." Section 2. Section 32 of the same law is hereby amended to read as follows: "Sec. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Criminal Cases. Except in cases falling within the exclusive original jurisdiction of Regional Trial Courts and of the Sandiganbayan, the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise: "(1) Exclusive original jurisdiction over all violations of city or municipal ordinances committed within their respective territorial jurisdiction; and "(2) Exclusive original jurisdiction over all offenses punishable with imprisonment not exceeding six (6) years irrespective of the amount of fine, and regardless of other imposable accessory or other penalties, including the civil liability arising from such offenses or predicated thereon, irrespective of kind, nature, value or amount thereof: Provided, however, That in offenses involving damage to property through criminal negligence, they shall have exclusive original jurisdiction thereof." Section 3. Section 33 of the same law is hereby amended to read as follows: "Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise: "(1) Exclusive original jurisdiction over civil actions and probate proceedings, testate and intestate, including the grant of provisional remedies in proper cases, where the value of the personal property, estate, or amount of the demand does not exceed One hundred thousand pesos (P100,000.00) or, in Metro Manila where such personal property, estate, or amount of the demand does not exceed Two hundred thousand pesos (P200,000.00), exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses, and costs, the amount of which must be specifically alleged: Provided, That interest, damages of whatever kind, attorney's fees, litigation expenses, and costs shall be included in the determination of the filing fees: Provided, further, That where there are several claims or causes of actions between the same or different parties, embodied in the same complaint, the amount of the demand shall be the totality of the claims in all the causes of action, irrespective of whether the causes of action arose out of the same or different transactions; "(2) Exclusive original jurisdiction over cases of forcible entry and unlawful detainer: Provided, That when, in such cases, the defendant raises the questions of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession; and

"(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." Section 4. Section 34 of the same law is hereby amended to read as follows: "Sec. 34. Delegated Jurisdiction in Cadastral and Land Registration Cases. Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts may be assigned by the Supreme Court to hear and determine cadastral or land registration cases covering lots where there is no controversy or opposition, or contested lots where the value of which does not exceed One hundred thousand pesos (P100,000.00), such value to be ascertained by the affidavit of the claimant or by agreement of the respective claimants if there are more than one, or from the corresponding tax declaration of the real property. Their decisions in these cases shall be appealable in the same manner as decisions of the Regional Trial Courts."

II. ILLUSTRATIVE CASES: A. Not Capable of Pecuniary Estimation: 1) G.R. No. 119347, March 17, 1999, Russel vs. Vestil EULALIA RUSSELL, PUPERTO TAUTHO, FRANCISCO TAUTHO, SUSANA T. REALES, APITACIO TAUTHO, DANILO TAUTHO, JUDITHA PROS, GREGORIO TAUTHO, DEODITA T. JUDILLA, AGRIPINO TAUTHO, FELIX TAUTHO, WILLIAM TAUTHO, AND MARILYN PERALES versus THE HONORABLE AUGUSTINE A. VESTlL, ADRIANO TAGALOG, MARCELO TAUTHO, JUANITA MENDOZA, DOMINGO BANTILAN, RAUL BATALUNA AND ARTEMIO CABATINGAN. KAPUNAN, J.: Before us is a Petition for Certiorari to set aside the Order dated January 12, 1995 issued by respondent Judge Augustine A. Vestil of the Regional Trial Court of Mandaue City, Branch 56, dismissing the complaint filed by petitioners on ground of lack of jurisdiction, as well as his Order dated February 13, 1995 denying petitioners' Motion for Reconsideration of the order of dismissal. The facts of the case are as follows: On September 28, 1994, petitioners filed a complaint against private respondents, denominated "DECLARATION OF NULLITY AND PARTITION," with the Regional Trial Court of Mandaue City, Branch 56, docketed as Civil Case No. MAN-2275. The complaint, in substance, alleged that petitioners are co-owners of that parcel of land, Lot 6149 situated in Liloan, Cebu and containing an area of 56,977.40 square meters, more or less. The land was previously owned by the spouses Casimero Tautho and Cesaria Tautho. Upon the death of

said spouses, the property was inherited by their legal heirs, herein petitioners and private respondents. Since then, the lot had remained undivided until petitioners discovered a public document denominated "DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF A PREVIOUS ORAL AGREEMENT OF PARTITION," executed on June 6, 1990. By virtue of this deed, private respondents divided the property among themselves to the exclusion of petitioners who are also entitled to the said lot as heirs of the late spouses Casimero Tautho and Cesaria Tautho. Petitioners claimed that the document was false and perjurious as the private respondents were not the only heirs and that no oral partition of the property whatsoever had been made between the heirs. The complaint prayed that the document be declared null and void and an order be issued to partition the land among all the heirs. 1 On November 24, 1994, private respondents filed a Motion to Dismiss 2 the complaint on the ground of lack of jurisdiction over the nature of the case as the total assessed value of the subject land is P5,000.00 which under section 33 (3) 3 of Batas Pambansa Blg. 129, as amended by R.A. No. 7691, 4 falls within the exclusive jurisdiction of the Municipal Circuit Trial Curt of Liloan, Compostela. 5 Petitioners filed an Opposition to the Motion to Dismiss 6 saying that the Regional Trial Court has jurisdiction over the case since the action is one which is incapable of pecuniary estimation within the contemplation of Section 19(1) of B.P. 129, as amended. 7 On January 12, 1995, the respondent judge issued an Order granting the Motion to Dismiss. 8 A Motion for Reconsideration of said order was filed by petitioners on January 30, 1995 alleging that the same is contrary to law because their action is not one for recovery of title to or possession of the land but an action to annul a document or declare it null and void, 9 hence, one incapable of pecuniary estimation falling within the jurisdiction of the Regional Trial Court. Private respondents did not oppose the motion for reconsideration. On February 13, 1995, the respondent judge issued another Order denying the motion for reconsideration. 10 Hence, this petition wherein the sole issue raised is whether or not the Regional Trial Court has jurisdiction to entertain Civil Case No. MAN-2275. We find merit in the petition. Petitioners maintain the view that the complaint filed before the Regional Trial Court is for the annulment of a document denominated as "DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF PREVIOUS ORAL PARTITION," which is clearly one incapable of pecuniary estimation, thus, cognizable by the Regional Trial Court. Private respondents, on the other hand, insists that the action is one for repartition and since the assessed value of the property as stated in the complaint is P5,000.00, then, the case falls within the jurisdiction of the Municipal Circuit Trial Court of Liloan, Compostela, Cebu. The complaint filed before the Regional Trial Court is doubtless one incapable of pecuniary estimation and therefore within the jurisdiction of said court. In Singsong vs. Isabela Sawmill, 12 we had the occasion to rule that: [I]n determining whether an action is one the subject matter of which is not capable of pecuniary estimation this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If it is primarily

for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts or in instance would depend on the amount of the claim. However, where the basic issue is something other than the right to recover a sum of money, where the money claim is purely incidental to, or a consequence of, the principal relief sought, this Court has considered such where the subject of the litigation may not be estimated in terms of money, and are cognizable exclusively by courts of first instance (now Regional Trial Courts). 13 Examples of actions incapable of pecuniary estimation are those for specific performance, support, or foreclosure of mortgage or annulment of judgment; 14 also actions questioning the validity of a mortgage, 15 annulling a deed of sale or conveyance and to recover the price paid 16 and for rescission, which is a counterpart of specific performance. 17 While actions under Sec. 33(3) of B.P. 129 are also incapable of pecuniary estimation, the law specifically mandates that they are cognizable by the MTC, METC, or MCTC where the assessed value of the real property involved does exceed P20,000.00 in Metro Manila, or P50,000.00, if located elsewhere. If the value exceeds P20,000.00 or P50,000.00 as the case may be, it is the Regional Trial Courts which have jurisdiction under Sec. 19(2). 18 However, the subject matter of the complaint in this case is annulment of a document denominated as "DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF PREVIOUS ORAL PARTITION." The main purpose of petitioners in filing the complaint is to declare null and void the document in which private respondents declared themselves as the only heirs of the late spouses Casimero Tautho and Cesaria Tautho and divided his property among themselves to the exclusion of petitioners who also claim to be legal heirs and entitled to the property. While the complaint also prays for the partition of the property, this is just incidental to the main action, which is the declaration of nullity of the document above-described. It is axiomatic that jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations in the complaint and the character of the relief sought, irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein. 19 WHEREFORE, premises considered, the petition is hereby GRANTED. The Order dismissing Civil Case No. MAN-2275, as well as the Order denying the motion for reconsideration of said Order, is SET ASIDE. The Regional Trial Court, Branch 56, Mandaue City is ORDERED to proceed with dispatch in resolving Civil Case No. MAN-2275. No costs. 2) G.R. No. 165777, July 25, 2011, Ungria, et al vs. CA, et al. CEFERINA DE UNGRIA [DECEASED], substituted by her HEIRS, represented by LOLITA UNGRIA SAN JUAN-JAVIER, and RHODORA R. PELOMIDA as their Attorney-in-fact versus THE HONORABLE COURT OF APPEALS, THE HONORABLE REGIONAL TRIAL COURT OF GENERAL SANTOS CITY, BRANCH 35, ROSARIO DIDELES VDA. DE CASTOR, NEPTHALIE CASTOR ITUCAS, FEROLYN CASTOR FACURIB, RACHEL DE CASTOR, LEA CASTOR DOLLOLOSA, and ROSALIE CASTOR BENEDICTO, PERALTA, J.:

Assailed in this petition for review on certiorari are the Decision 1 dated May 26, 2004 and the Resolution2 dated September 17, 2004 of the Court of Appeals (CA) in CA-G.R. SP No. 60764. On August 26, 1999, respondents Rosario Dideles Vda. de Castor (Rosario), Nepthalie Castor Itucas, Ferolyn Castor Facurib (Ferolyn), Rachel De Castor, Lea Castor Dollolosa and Rosalie Castor Benedicto, filed with the Regional Trial Court (RTC) of General Santos City a Complaint3 for ownership, possession and damages, and alternative causes of action either to declare two documents as patent nullities, and/or for recovery of Rosario's conjugal share with damages or redemption of the subject land against petitioner Ceferina de Ungria, defendants Avelino Gumban, Dolores Cagaitan, Zacasio Poutan, PO1 Jonas Montales, Ignacio Olarte and alias Dory. Respondent Rosario is the surviving wife of the late Fernando Castor, while the rest of the respondents are their legitimate children. The documents they sought to annul are (1) the Deed of Transfer of Rights and Interest including Improvements thereon dated October 3, 1960 allegedly executed by Fernando in favor of Eugenio de Ungria, petitioner's father; and (2) the Affidavit of Relinquishment dated November 23, 1960 executed by Eugenio in favor of petitioner. Petitioner Ceferina filed a Motion to Dismiss4 (Ex-Abundante Ad Cautelam) on the following grounds: (1) the claim or demand has been extinguished by virtue of the valid sale of Lot No. 1615 to Eugenio; (2) the action is barred by extraordinary acquisitive prescription; (3) the action is barred by laches; and (4) plaintiff failed to state a cause of action, or filed the case prematurely for failure to resort to prior barangay conciliation proceedings. Petitioner also filed an Addendum to the Motion to Dismiss 5 raising the following additional grounds: (1) plaintiffs have no legal capacity to sue; and (2) the court has no jurisdiction over the case for failure of plaintiffs to pay the filing fee in full. Respondents filed their Opposition thereto. On November 19, 1999, the RTC issued an Order6 denying the motion to dismiss, to wit: After the motion to dismiss and its addendum have been received, it is now ripe for resolution. One of the grounds alleged in the complaint is for the recovery of conjugal share on Lot No. 1615, of Pls-209 D with damages. It is alleged that the late Fernando Castor and Rosario Dideles Vda. de Castor were married on September 15, 1952, and the application to the land was dated January 17, 1952 and the patent was issued by the President on November 19, 1954. The said land was sold to the defendant on October 3, 1960 (Annex C) and an Affidavit of Relinquishment dated November 23, 1960 which was made a part thereof as Annex "D." Considering the marriage of September 15, 1992, the said land became conjugal as of the date of the marriage and, therefore, thereof belongs to the wife, Rosario Dideles Vda. de Castor. Thus, considering the above, the motion to dismiss is DENIED.7 Petitioner Ceferina filed a Motion for Reconsideration, 8 which the RTC denied in an Order9 dated February 4, 2000. Petitioner filed an Omnibus Motion10 asking the RTC to resolve the issues of (1) whether or not the complaint should be dismissed or expunged from the records

pursuant to Supreme Court (SC) Circular No. 7; (2) reconsidering the findings contained in the Order dated February 4, 2000; and (3) holding in abeyance the submission of the answer to the complaint. Pending resolution of the motion, respondents filed a Motion to Allow11 them to continue prosecuting this case as indigent litigants. On March 8, 2000, the RTC resolved the Omnibus Motion in an Order 12 that read in this wise: On the omnibus motion regarding filing fees, the plaintiffs asserted in its motion that they are charging defendant actual and compensatory damages such as are proved during the hearing of this case. So also are attorneys fees and moral damages, all to be proved during the hearing of this case. Since there was no hearing yet, they are not in a possession (sic) to determine how much is to be charged. At any rate, if after hearing the Clerk of Court determine that the filing fees is still insufficient, considering the total amount of the claim, the Clerk of Court should determine and, thereafter, if any amount is found due, he must require the private respondent to pay the same x x x. As to the second issue, the same has already been decided in its order dated February 4, 2000. WHEREFORE, premises considered, the omnibus motion is DENIED. The defendant shall file their answer within fifteen (15) days from receipt of this order.13 From this Order, petitioner filed a motion for reconsideration and clarification on whether plaintiffs should be allowed to continue prosecuting the case as indigent litigants. On March 30, 2000, the RTC issued a Clarificatory Order14 reading as follows: As has been said, the plaintiff asserted in its motion that they are charging defendants actual and compensatory damages as has been proved during the hearing of this case. So also are attorney's fees and moral damages all to be proved during the hearing of this case. Since there was no hearing yet, they are not in a possession (sic) to determine how much is to be charged. At any rate, after hearing, the Clerk of Court determines that the filing fee is still insufficient, the same shall be considered as lien on the judgment that may be entered. As to the motion seeking from the Honorable Court allowance to allow plaintiff to continue prosecuting this case as indigent litigants, suffice it to say that the same is already provided for in this order. WHEREFORE, the defendants shall file their answer within fifteen (15) days from receipt of this Order.15

In an Order dated May 31, 2000, the RTC again denied petitioner's motion for reconsideration. Petitioner filed with the CA a petition for certiorari and prohibition with prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction. Petitioner sought the nullification of the Order dated November 19, 1999 and the subsequent orders issued by the RTC thereto for having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction. Respondents filed their Comment thereto. In a Decision dated May 26, 2004, the CA dismissed the petition. The CA found that SC Circular No. 7 would not apply where the amount of damages or value of the property was immaterial; that the Circular could be applied only in cases where the amount claimed or the value of the personal property was determinative of the court's jurisdiction citing the case of Tacay v. RTC of Tagum, Davao del Norte.16 The CA found that respondents had paid the corresponding docket fees upon the filing of the complaint, thus, the RTC had acquired jurisdiction over the case despite the failure to state the amount of damages claimed in the body of the complaint or in the prayer thereof. The CA found that the RTC did not commit grave abuse of discretion amounting to lack of jurisdiction when it denied petitioner's motion to dismiss. It noted that the RTC's Clarificatory Order dated March 30, 2000, which stated that "if after hearing the Clerk of Court determines that the filing fee is still insufficient, the same shall be considered as lien on the judgment that may be entered" was in accordance with the rule laid down in Sun Insurance Office, Ltd. v. Asuncion. 17 The CA proceeded to state that a judicious examination of the complaint pointed to a determination of the respective rights and interests of the parties over the property based on the issues presented therein which could only be determined in a full-blown trial on the merits of the case. Petitioner filed a Motion for Reconsideration, which the CA denied in a Resolution dated September 17, 2004. The CA ruled, among others, that the defenses of acquisitive prescription and laches were likewise unavailing. It found that the subject property is covered by a Torrens title (OCT No. V-19556); thus, it is axiomatic that adverse, notorious and continuous possession under a claim of ownership for the period fixed by law is ineffective against a Torrens title; that unless there are intervening rights of third persons which may be affected or prejudiced by a decision directing the return of the lot to petitioner, the equitable defense of laches will not apply as against the registered owner. Hence, this petition for review on certiorari where petitioner raises the following assignment of errors: THE COURT OF APPEALS ERRED IN NOT FINDING THAT RESPONDENT TRIAL COURT COMMITTED GRAVE ABUSE OF DISCRETION IN DENYING PETITIONER'S MOTION TO DISMISS DESPITE RESPONDENTS' NON-PAYMENT OF THE CORRECT DOCKET FEES. THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE ACTION OF PRIVATE RESPONDENTS IS BARRED BY LACHES AND EXTRAORDINARY ACQUISITIVE PRESCRIPTION.18 We find the petition without merit. Preliminarily, although not raised as an issue in this petition, we find it necessary to discuss the issue of jurisdiction over the subject matter of this case.

Respondents' complaint was filed in 1999, at the time Batas Pambansa Blg. (BP) 129, the Judiciary Reorganization Act of 1980, was already amended by Republic Act (RA) No. 7691, An Act Expanding the Jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts, amending for the purpose BP Blg. 129.19 Section 1 of RA 7691, amending BP Blg. 129, provides that the RTC shall exercise exclusive original jurisdiction on the following actions: Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of 1980," is hereby amended to read as follows: Sec. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive original jurisdiction: (1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation; (2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty Thousand Pesos (P20,000.00) or for civil actions in Metro Manila, where such value exceeds Fifty Thousand Pesos (P50,000.00), except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts; x x x Section 3 of RA No. 7691 expanded the exclusive original jurisdiction of the first level courts, thus: Section 3. Section 33 of the same law (BP Blg. 129) is hereby amended to read as follows: Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise: 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. Respondents filed their Complaint with the RTC; hence, we would first determine whether the RTC has jurisdiction over the subject matter of this case based on the above-quoted provisions. The Complaint filed by respondents in the RTC was for ownership, possession and damages, and alternative causes of action either to declare two documents as patent nullities and/or for recovery of conjugal share on the subject land with damages or redemption of the subject land. I n their Complaint, respondents claimed that Rosario and Fernando are the registered owners of the subject land with an assessed value of P12,780.00; that the couple

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left the cultivation and enjoyment of the usufruct of the subject land to Fernando's mother and her second family to augment their means of livelihood; that respondent Rosario and Fernando thought that when the latter's mother died in 1980, the subject land was in the enjoyment of the second family of his mother, but later learned that the subject land was leased by petitioner Ceferina; that sometime in August 1999, respondents learned of the existence of the Deed of Transfer of Rights and Interest including Improvements thereon dated October 3, 1960, where Fernando had allegedly transferred his rights and interests on the subject land in favor of Eugenio, petitioner Ceferina's father, as well as an Affidavit of Relinquishment dated November 23, 1960 executed by Eugenio in favor of petitioner Ceferina; that Fernando's signature in the Deed of Transfer was not his but a forgery; and the Affidavit of Relinquishment was also void as it was a direct result of a simulated Deed of Transfer. Respondents prayed that they be declared as absolute and lawful owners of the subject land and to order petitioner and the other defendants to vacate the premises and restore respondents to its possession and enjoyment therefore. On their second cause of action, they prayed that the Deed of Transfer of Rights and Interest Including Improvements Thereon be declared as a forgery, purely simulated and without any consideration; hence, inexistent, void ab initio and/or a patent nullity, as well as the Affidavit of Relinquishment which was the direct result of the Deed of Transfer. Respondents also prayed in the alternative that if the Deed be finally upheld as valid, to order petitioner to reconvey to respondent Rosario the undivided one-half portion of the subject land as conjugal owner thereof and to account and reimburse her of its usufruct; and/or to allow them to redeem the subject land. It would appear that the first cause of action involves the issue of recovery of possession and interest of the parties over the subject land which is a real action. Respondents alleged that the assessed value of the subject land was P12,780.00 based on Tax Declaration No. 15272. Thus, since it is a real action with an assessed value of less than P20,000.00, the case would fall under the jurisdiction of the MTC as provided under the above-quoted Section 33 (3) of BP 129, as amended. Notably, however, respondents in the same Complaint filed alternative causes of action assailing the validity of the Deed of Transfer of Rights and Interest executed by Fernando in favor of petitioner's father. Respondents also sought for the reconveyance to respondent Rosario of the undivided one-half portion of the subject land as conjugal owner thereof in case the Deed of Transfer of Rights and Interest will be upheld as valid; and/or for redemption of the subject land. Clearly, this is a case of joinder of causes of action which comprehends more than the issue of possession of, or any interest in the real property under contention, but includes an action to annul contracts and reconveyance which are incapable of pecuniary estimation and, thus, properly within the jurisdiction of the RTC.20 In Singson v. Isabela Sawmill,21 we held that: In determining whether an action is one the subject matter of which is not capable of pecuniary estimation this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts of first instance would depend on the amount of the claim. However, where the basic issue is something other than the right to recover a sum of money, where the money claim is purely incidental to, or a consequence of, the principal relief

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sought, this Court has considered such actions as cases where the subject of the litigation may not be estimated in terms of money, and are cognizable exclusively by courts of first instance (now Regional Trial Courts).22 Thus, respondents correctly filed their Complaint with the RTC. It is a settled rule in this jurisdiction that when an action is filed in court, the complaint must be accompanied by the payment of the requisite docket and filing fees.23 It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action.24 Section 7(b)(1) of Rule 141 of the Rules of Court provides: SEC. 7. Clerks of Regional Trial Courts. - (a) For filing an action or a permissive counter-claim or money claim against an estate not based on judgment, or for filing with leave of court a third-party, fourth-party, etc. complaint, or a complaintin-intervention, and for all clerical services in the same, if the total-sum claimed, exclusive of interest, or the stated value of the property in litigation, is: xxxx (b) For filing: 1. Actions where the value of the subject matter cannot be estimated ........ P400.00 2. x x x In a real action, the assessed value of the property, or if there is none, the estimated value thereof shall be alleged by the claimant and shall be the basis in computing the fees.25 Since we find that the case involved the annulment of contract which is not susceptible of pecuniary estimation, thus, falling within the jurisdiction of the RTC, the docket fees should not be based on the assessed value of the subject land as claimed by petitioner in their memorandum, but should be based on Section 7(b)(1) of Rule 141. A perusal of the entries in the Legal Fees Form attached to the records would reflect that the amount of P400.00 was paid to the Clerk of Court, together with the other fees, as assessed by the Clerk of Court. Thus, upon respondents' proof of payment of the assessed fees, the RTC has properly acquired jurisdiction over the complaint. Jurisdiction once acquired is never lost, it continues until the case is terminated. 26 Notably, petitioners claim that the RTC did not acquire jurisdiction in this case is premised on her contention that respondents violated SC Circular No. 7 issued on March 24, 1998 requiring that all complaints must specify the amount of damages sought not only in the body of the pleadings but also in the prayer to be accepted and admitted for filing. Petitioner argues that respondents alleged in paragraph 13 of their Complaint that: (T)he reasonable rental for the use of the [subject] land is P2,000.00 per hectare, every crop time, once every four months, or P6,000.00 a year per hectare; that defendants in proportion and length of time of their respective occupancy is and/or are jointly and severally liable to plaintiffs of the produce thereby in the following proportions, viz: (a) for defendant Ceferina de Ungria for a period of

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time claimed by her as such; (b) for defendants Dolores Cagautan, a certain alias "Dory," and PO1 Jonas Montales, of an undetermined area, the latter having entered the area sometime in 1998 and defendant alias "Dory," only just few months ago; that defendant Ignacio Olarte and Zacasio Puutan of occupying about one-half hectare each.27 and in their prayer asked: x x x Ordering the defendants, jointly and severally, in proportion to the length and area of their respective occupancy, to pay reasonable rentals to the plaintiffs in the proportion and amount assessed in paragraph 13 of the First Cause of Action. xxxx (a) Ordering the defendants, jointly and severally, to pay plaintiffs actual and compensatory damages such as are proved during the hearing of this case; (b) Ordering the defendants, jointly and severally, to pay plaintiffs attorneys' fees and moral damages, all to be proved during the hearing of this case.28 Thus, the RTC should have dismissed the case, since respondents did not specify the amount of damages in their prayer. We are not persuaded. SC Circular No. 7 was brought about by our ruling in Manchester Development Corporation v. Court of Appeals,29 where we held that a pleading which does not specify in the prayer the amount of damages being asked for shall not be accepted or admitted, or shall otherwise be expunged from the record; and that the Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. However, in Sun Insurance Office, Ltd. v. Asuncion,30 we laid down the following guidelines in the payment of docket fees, to wit: 1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. 2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. 3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall

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be the responsibility of the Clerk of Court or his duly-authorized deputy to enforce said lien and assess and collect the additional fee. Subsequently, in Heirs of Bertuldo Hinog v. Melicor,31 we said: Furthermore, the fact that private respondents prayed for payment of damages "in amounts justified by the evidence" does not call for the dismissal of the complaint for violation of SC Circular No. 7, dated March 24, 1988 which required that all complaints must specify the amount of damages sought not only in the body of the pleadings but also in the prayer in order to be accepted and admitted for filing. Sun Insurance effectively modified SC Circular No. 7 by providing that filing fees for damages and awards that cannot be estimated constitute liens on the awards finally granted by the trial court. x x x judgment awards which were left for determination by the court or as may be proven during trial would still be subject to additional filing fees which shall constitute a lien on the judgment. It would then be the responsibility of the Clerk of Court of the trial court or his duly-authorized deputy to enforce said lien and assess and collect the additional fees.32 A reading of the allegations in the complaint would show that the amount of the rental due can only be determined after a final judgment, since there is a need to show supporting evidence when the petitioner and the other defendants started to possess the subject land. Thus, we find no reversible error committed by the CA when it ruled that there was no grave abuse of discretion committed by the RTC in issuing its Order dated March 30, 2000, where the RTC stated that "since there was no hearing yet, respondents are not in a position to determine how much is to be charged and that after hearing, the Clerk of Court determines that the filing fee is still insufficient, the same shall be considered as lien on the judgment that may be entered." x x x WHEREFORE, the petition for review is DENIED. 3) G.R. No. 176858, September 15, 2010, Padilla vs. Magdua. HEIRS OF JUANITA PADILLA, represented by CLAUDIO PADILLA versus DOMINADOR MAGDUA. CARPIO, J.: The Case Before the Court is a petition for review on certiorari1 assailing the Orders dated 8 September 20062 and 13 February 20073 of the Regional Trial Court (RTC) of Tacloban City, Branch 34, in Civil Case No. 2001-10-161. The Facts Juanita Padilla (Juanita), the mother of petitioners, owned a piece of land located in San Roque, Tanauan, Leyte. After Juanitas death on 23 March 1989, petitioners, as legal heirs of Juanita, sought to have the land partitioned. Petitioners sent word to their eldest brother Ricardo Bahia (Ricardo) regarding their plans for the partition of the land. In a letter dated 5 June 1998 written by Ricardo addressed to them, petitioners were surprised to find out that Ricardo had declared the land for himself, prejudicing their rights as co-heirs. It was then

14

discovered that Juanita had allegedly executed a notarized Affidavit of Transfer of Real Property4 (Affidavit) in favor of Ricardo on 4 June 1966 making him the sole owner of the land. The records do not show that the land was registered under the Torrens system. On 26 October 2001, petitioners filed an action with the RTC of Tacloban City, Branch 34, for recovery of ownership, possession, partition and damages. Petitioners sought to declare void the sale of the land by Ricardos daughters, Josephine Bahia and Virginia Bahia-Abas, to respondent Dominador Magdua (Dominador). The sale was made during the lifetime of Ricardo. Petitioners alleged that Ricardo, through misrepresentation, had the land transferred in his name without the consent and knowledge of his co-heirs. Petitioners also stated that prior to 1966, Ricardo had a house constructed on the land. However, when Ricardo and his wife Zosima separated, Ricardo left for Inasuyan, Kawayan, Biliran and the house was leased to third parties. Petitioners further alleged that the signature of Juanita in the Affidavit is highly questionable because on 15 May 1978 Juanita executed a written instrument stating that she would be leaving behind to her children the land which she had inherited from her parents. Dominador filed a motion to dismiss on the ground of lack of jurisdiction since the assessed value of the land was within the jurisdiction of the Municipal Trial Court of Tanauan, Leyte. In an Order dated 20 February 2006,5 the RTC dismissed the case for lack of jurisdiction. The RTC explained that the assessed value of the land in the amount of P590.00 was less than the amount cognizable by the RTC to acquire jurisdiction over the case.6 Petitioners filed a motion for reconsideration. Petitioners argued that the action was not merely for recovery of ownership and possession, partition and damages but also for annulment of deed of sale. Since actions to annul contracts are actions beyond pecuniary estimation, the case was well within the jurisdiction of the RTC. Dominador filed another motion to dismiss on the ground of prescription. In an Order dated 8 September 2006, the RTC reconsidered its previous stand and took cognizance of the case. Nonetheless, the RTC denied the motion for reconsideration and dismissed the case on the ground of prescription pursuant to Section 1, Rule 9 of the Rules of Court. The RTC ruled that the case was filed only in 2001 or more than 30 years since the Affidavit was executed in 1966. The RTC explained that while the right of an heir to his inheritance is imprescriptible, yet when one of the co-heirs appropriates the property as his own to the exclusion of all other heirs, then prescription can set in. The RTC added that since prescription had set in to question the transfer of the land under the Affidavit, it would seem logical that no action could also be taken against the deed of sale executed by Ricardos daughters in favor of Dominador. The dispositive portion of the order states: WHEREFORE, premises considered, the order of the Court is reconsidered in so far as the pronouncement of the Court that it has no jurisdiction over the nature of the action. The dismissal of the action, however, is maintained not by reason of lack of jurisdiction but by reason of prescription.

15

SO ORDERED.7 Petitioners filed another motion for reconsideration which the RTC denied in an Order dated 13 February 2007 since petitioners raised no new issue. Hence, this petition. The Issue x x x With regard to the issue of the jurisdiction of the RTC, we hold that the RTC did not err in taking cognizance of the case. Under Section 1 of Republic Act No. 7691 (RA 7691), 14 amending Batas Pambansa Blg. 129, the RTC shall exercise exclusive jurisdiction on the following actions: Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of 1980", is hereby amended to read as follows: "Sec. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive original jurisdiction. "(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation; "(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty Thousand Pesos (P20,000.00) or, for civil actions in Metro Manila, where such value exceeds Fifty Thousand Pesos (P50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts; x x x On the other hand, Section 3 of RA 7691 expanded the jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts over all civil actions which involve title to or possession of real property, or any interest, outside Metro Manila where the assessed value does not exceed Twenty thousand pesos (P20,000.00). The provision states: Section 3. Section 33 of the same law is hereby amended to read as follows: "Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. - Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Trial Circuit Trial Courts shall exercise: xxx "(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, attorneys 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."

16

In the present case, the records show that the assessed value of the land was P590.00 according to the Declaration of Property as of 23 March 2000 filed with the RTC. Based on the value alone, being way below P20,000.00, the MTC has jurisdiction over the case. However, petitioners argued that the action was not merely for recovery of ownership and possession, partition and damages but also for annulment of deed of sale. Since annulment of contracts are actions incapable of pecuniary estimation, the RTC has jurisdiction over the case.151avvphi1 Petitioners are correct. In Singson v. Isabela Sawmill,16 we held that: In determining whether an action is one the subject matter of which is not capable of pecuniary estimation this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts of first instance would depend on the amount of the claim. However, where the basic issue is something other than the right to recover a sum of money, where the money claim is purely incidental to, or a consequence of, the principal relief sought, this Court has considered such actions as cases where the subject of the litigation may not be estimated in terms of money, and are cognizable by courts of first instance (now Regional Trial Courts). When petitioners filed the action with the RTC they sought to recover ownership and possession of the land by questioning (1) the due execution and authenticity of the Affidavit executed by Juanita in favor of Ricardo which caused Ricardo to be the sole owner of the land to the exclusion of petitioners who also claim to be legal heirs and entitled to the land, and (2) the validity of the deed of sale executed between Ricardos daughters and Dominador. Since the principal action sought here is something other than the recovery of a sum of money, the action is incapable of pecuniary estimation and thus cognizable by the RTC. Well-entrenched is the rule that jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations in the complaint and the character of the relief sought, irrespective of whether the party is entitled to all or some of the claims asserted.17 In sum, we find that the Affidavit, as the principal evidence relied upon by the RTC to dismiss the case on the ground of prescription, insufficiently established Dominadors rightful claim of ownership to the land. Thus, we direct the RTC to try the case on the merits to determine who among the parties are legally entitled to the land. 4) G.R. No. 104796 March 6, 1998, De Leon vs. Court of Appeals SPOUSES ROSALINA S. DE LEON and ALEJANDRO L. DE LEON versus THE COURT OF APPEALS, GLICERIO MA. ELAYDA II, FEDERICO ELAYDA and DANILO ELAYDA MENDOZA, J.: The question for decision is whether in assessing the docket fees to be paid for the filing of an action for annulment or rescission of a contract of sale, the value of the real property, subject matter of the contract, should be used as basis, or whether the action should be considered as one which is not capable of pecuniary estimation and therefore the fee charged should be a flat rate of P400.00 as provided in Rule 141, 7(b)(1) of the Rules of Court. The trial court held the fees should be based on the value of the property, but the Court of

17

Appeals reversed and held that the flat rate should be charged. Hence this petition for review on certiorari. The facts are as follows: On August 8, 1991, private respondents filed in the Regional Trial Court of Quezon City a complaint for annulment or rescission of a contract of sale of two (2) parcels of land against petitioners, praying for the following reliefs: 1. Ordering the nullification or rescission of the Contract of Conditional Sale (Supplementary Agreement) for having violated the rights of plaintiffs (private respondents) guaranteed to them under Article 886 of the Civil Code and/or violation of the terms and conditions of the said contract. 2. Declaring void ab initio the Deed of Absolute Sale for being absolutely simulated; and 3. Ordering defendants (petitioners) to pay plaintiffs (private respondents) attorney's fees in the amount of P100,000.00. Other reliefs and remedies as are just and equitable in the premises are also prayed for. 1 Upon the filing of the complaint, the clerk of court required private respondents to pay docket and legal fees in the total amount of P610.00, broken down as follows: P450.00 Docket fee for the Judicial Development Fund under Official Receipt No. 1877773 150.00 Docket fee for the General Fund under Official Receipt No. 6834215 10.00 for the Legal Research Fund under Official Receipt No. 6834450. 2 On September 26, 1991, petitioners moved for the dismissal of the complaint on the ground that the trial court did not acquire jurisdiction over the case by reason of private respondents' nonpayment of the correct amount of docket fees. Petitioners contended that in addition to the fees already paid based on the claim for P100,000.00 for attorney's fees, private respondents should have paid docket fees in the amount of P21,640.00, based on the alleged value of the two (2) parcels of land subject matter of the contract of sale sought to be annulled. 3 On September 30, 1991, private respondents filed opposition to the motion to dismiss, arguing that outright dismissal of their complaint was not warranted on the basis of the alleged nonpayment of the correct amount of docket fees, considering that the amount paid by them was that assessed by the clerk of court. 4 On October 9, 1991, petitioners filed a reply to which private respondents filed, on October 17, 1991, a rejoinder. On October 21, 1991, the trial court 5 denied petitioners' motion to dismiss but required private respondents to pay the amount of docket fees based on the estimated value of the parcels of land in litigation as stated in the complaint. Private respondents filed a motion for reconsideration but their motion was denied by the trial court. They therefore, brought the matter to the Court of

18

Appeals which, on February 26, 1992, rendered a decision 6 annulling the orders of the trial court. The appellate court held that an action for rescission or annulment of contract is not susceptible of pecuniary estimation and, therefore, the docket fees should not be based on the value of the real property, subject matter of the contract sought to be annulled or rescinded. Petitioners moved for reconsideration, but their motion was denied in a resolution dated March 25, 1992 of the appellate court. Hence, the petition for review on certiorari. Rule 141 of the Rules of Court provides: Sec. 7. Clerks of Regional Trial Courts. (a) For filing an action or a permissive counter-claim or money claim against an estate not based on judgment, or for filing with leave of court a third-party, fourth-party, etc. complaint, or a complaint in intervention, and for all clerical services in the same, if the total-sum claimed, exclusive of interest, or the stated value of the property in litigation, is: 1. Not more than P20,000.00 P120.00 2. More than P20,000.00 but less than P40,000.00 150.00 3. P40,000.00 or more but less than P60,000.00 200.00 4. P60,000.00 or more but less than P80,000.00 250.00 5. P80,000.00 or more but less than P100,000.00 400.00 6. P100,000.00 or more but less than P150,000.00 600.00 7. For each P1,000.00 in excess of P150,000.00 5.00 (b) For filing: 1. Actions where the value cannot be estimated P400.00 of the subject matter

2. Special civil actions except judicial foreclosure of mortgage which shall be governed by paragraph (a) above 400.00 3. All other actions not involving property 400.00 In a real action, the assessed value of the property, or if there is none, the estimated value thereof shall be alleged by the claimant and shall be the basis in computing the fees. (emphasis added) Petitioners argue that an action for annulment or rescission of a contract of sale of real property is a real action and, therefore, the amount of the docket fees to be paid by private respondent should be based either on the assessed value of the property, subject matter of the action, or its estimated value as alleged in the complaint, pursuant to the last paragraph of 7(b) of Rule 141, as amended by the Resolution of the Court dated September 12, 1990. Since private respondents alleged that the land, in which they claimed an interest as heirs, had been sold for P4,378,000.00 to petitioners, this amount should be considered the estimated value of the land for the purpose of determining the docket fees.

19

On the other hand, private respondents counter that an action for annulment or rescission of a contract of sale of real property is incapable of pecuniary estimation and, so, the docket fees should be the fixed amount of P400.00 in Rule 141, 7(b)(1). In support of their argument, they cite the cases of Lapitan v. Scandia, Inc. and Bautista v. Lim. In Lapitan this Court, in an opinion by Justice J.B.L. Reyes, held: A review of the jurisprudence of this Court indicates that in determining whether an action is one the subject matter of which is not capable of pecuniary estimation, this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts of first instance would depend on the amount of the claim. However, where the basic issue is something other than the right to recover a sum of money, or where the money claim is purely incidental to, or a consequence of, the principal relief sought, like in suits to have the defendant perform his part of the contract (specific performance) and in actions for support, or for annulment of a judgment or to foreclose a mortgage, this Court has considered such actions as cases where the subject of the litigation may not be estimated in terms of money, and are cognizable exclusively by courts of first instance. The rationale of the rule is plainly that the second class cases, besides the determination of damages, demand an inquiry into other factors which the law has deemed to be more within the competence of courts of first instance, which were the lowest courts of record at the time that the first organic laws of the Judiciary were enacted allocating jurisdiction (Act 136 of the Philippine Commission of June 11, 1901). Actions for specific performance of contracts have been expressly pronounced to be exclusively cognizable by courts of first instance: De Jesus vs. Judge Garcia, L-26816, February 28, 1967; Manufacturer's Distributors, Inc. vs. Yu Siu Liong, L-21285, April 29, 1966. And no cogent reason appears, and none is here advanced by the parties, why an action for rescission (or resolution) should be differently treated, a "rescission" being counterpart, so to speak, of "specific performance". In both cases, the court would certainly have to undertake an investigation into facts that would justify one act or the other. No award for damages may be had in an action for rescission without first conducting an inquiry into matters which would justify the setting aside of a contract, in the same manner that courts of first instance would have to make findings of fact and law in actions not capable of pecuniary estimation expressly held to be so by this Court, arising from issues like those raised in Arroz v. Alojado, et al., L22153, March 31, 1967 (legality or illegality of the conveyance sought for and the determination of the validity of the money deposit made); De Ursua v. Pelayo, L-13285, April 18, 1950 (validity of a judgment); Bunayog v. Tunas, L-12707, December 23, 1959 (validity of mortgage); Baito v. Sarmiento, L-13105, August 25, 1960 (the relations of the parties, the right to support created by the relation, etc., in actions for support); De Rivera, et al. v. Halili, L-15159, September 30, 1963 (the validity or nullity of documents upon which claims are predicated). Issues of the same nature may be raised by a party against whom an action for rescission has been brought, or by the plaintiff himself. It is, therefore, difficult to see why a prayer for damages in an action for rescission should be taken as the basis for concluding such action as one capable of pecuniary estimation a prayer which must be included in the main action if plaintiff is to be compensated for what he may have suffered as a result of the breach

20

committed by defendant, and not later on precluded from recovering damages by the rule against splitting a cause of action and discouraging multiplicity of suits. Conformably with this discussion of actions "where the value of the case cannot be estimated," the Court in Bautista v. Lim, held that an action for rescission of contract is one which cannot be estimated and therefore the docket fee for its filing should be the flat amount of P200.00 as then fixed in the former Rule 141, 141, 5(10). Said this Court: We hold that Judge Dalisay did not err in considering Civil Case No. V-144 as basically one for rescission or annulment of contract which is not susceptible of pecuniary estimation (1 Moran's Comments on the Rules of Court, 1970 Ed, p. 55; Lapitan vs. Scandia, Inc., L-24668, July 31, 1968, 24 SCRA 479, 781-483). Consequently, the fee for docketing it is P200, an amount already paid by plaintiff, now respondent Matilda Lim. (She should pay also the two pesos legal research fund fee, if she has not paid it, as required in Section 4 of Republic Act No. 3870, the charter of the U.P. Law Center). Thus, although eventually the result may be the recovery of land, it is the nature of the action as one for rescission of contract which is controlling. The Court of Appeals correctly applied these cases to the present one. As it said: We would like to add the observations that since the action of petitioners [private respondents] against private respondents [petitioners] is solely for annulment or rescission which is not susceptible of pecuniary estimation, the action should not be confused and equated with the "value of the property" subject of the transaction; that by the very nature of the case, the allegations, and specific prayer in the complaint, sans any prayer for recovery of money and/or value of the transaction, or for actual or compensatory damages, the assessment and collection of the legal fees should not be intertwined with the merits of the case and/or what may be its end result; and that to sustain private respondents' [petitioners'] position on what the respondent court may decide after all, then the assessment should be deferred and finally assessed only after the court had finally decided the case, which cannot be done because the rules require that filing fees should be based on what is alleged and prayed for in the face of the complaint and paid upon the filing of the complaint. WHEREFORE, the decision of the Court of Appeals is AFFIRMED. 5) G.R. No. 158121, December 12, 2007, Heirs of Valeriano Concha, Sr., et al vs. Sps. Gregorio Lumocso and Bienvenida Guya, et al. HEIRS OF VALERIANO S. CONCHA, SR. NAMELY: TERESITA CONCHAPARAN, VALERIANO P. CONCHA, JR., RAMON P. CONCHA, EDUARDO P. CONCHA, REPRESENTED BY HIS LEGAL GUARDIAN, REYNALDO P. CONCHA, ALBERTO P. CONCHA, BERNARDO P. CONCHA and GLORIA versus SPOUSES GREGORIO J. LUMOCSO1 and BIENVENIDA GUYA, CRISTITA J. LUMOCSO VDA. DE DAAN, AND SPOUSES JACINTO J. LUMOCSO and BALBINA T. LUMOCSO. DECISION PUNO, C.J.:

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On appeal by certiorari under Rule 45 of the Rules of Court are the decision 3 and resolution4 of the Court of Appeals (CA) in CA-G.R. SP No. 59499, annulling the resolutions5 and order6 of the Regional Trial Court (RTC) of Dipolog City, Branch 9, in Civil Case Nos. 5188, 5433 and 5434 which denied the separate motions to dismiss and Joint Motion for Reconsideration filed by the respondents. The relevant facts are undisputed. Petitioners, heirs of spouses Dorotea and Valeriano Concha, Sr., claim to be the rightful owners of Lot No. 6195 (Civil Case No. 5188), a one-hectare portion of Lot No. 6196-A (Civil Case No. 5433), and a one-hectare portion of Lot Nos. 6196-B and 7529-A (Civil Case No. 5434), all situated in Cogon, Dipolog City, under Section 48(b) of Commonwealth Act No. 141 (C.A. No. 141), otherwise known as the Public Land Act. Respondent siblings Gregorio Lumocso (Civil Case No. 5188), Cristita Lumocso Vda. de Daan (Civil Case No. 5433) and Jacinto Lumocso (Civil Case No. 5434), are the patent holders and registered owners of the subject lots. The records show that on August 6, 1997, Valeriano Sr. 7 and his children, petitioners Valeriano Jr., Ramon, Eduardo, Alberto, Bernardo, Teresita, Reynaldo, and Gloria, all surnamed Concha, filed a complaint for Reconveyance and/or Annulment of Title with Damages against "Spouses Gregorio Lomocso and Bienvenida Guya." They sought to annul Free Patent No. (IX-8)985 and the corresponding Original Certificate of Title (OCT) No. P-22556 issued in the name of "Gregorio Lumocso" covering Lot No. 6195. The case was raffled to the RTC of Dipolog City, Branch 9, and docketed as Civil Case No. 5188. In their Amended Complaint, petitioners prayed that judgment be rendered: 1. Declaring Free Patent No. (IX-8)985 and Original Certificate of Title No. 22556 issued to defendants as null and void ab initio; 2. Declaring Lot No. 6195 or 1.19122-hectare as private property of the plaintiffs under Sec. 48(b) of CA No. 141 otherwise known as the Public Land Act as amended by RA 1942; 3. Ordering the defendant Lomocsos to reconvey the properties (sic) in question Lot No. 6195 or the 1.19122 hectares in favor of the plaintiffs within 30 days from the finality of the decision in this case and if they refuse, ordering the Clerk of Court of this Honorable Court to execute the deed of reconveyance with like force and effect as if executed by the defendant[s] themselves; 4. Ordering defendant Lomocsos to pay P60,000.00 for the 21 forest trees illegally cut; P50,000.00 for moral damages; P20,000.00 for Attorneys fees; P20,000.00 for litigation expenses; and to pay the cost of the proceedings; 5. Declaring the confiscated three (sic) flitches kept in the area of the plaintiffs at Dampalan San Jose, Dipolog with a total volume of 2000 board feet a[s] property of the plaintiff [they] being cut, collected and taken from the land possessed, preserved, and owned by the plaintiffs; 6. The plaintiffs further pray for such other reliefs and remedies which this Honorable Court may deem just and equitable in the premises. 8 On September 3, 1999, two separate complaints for Reconveyance with Damages were filed by petitioners,9 this time against "Cristita Lomocso Vda. de Daan" for a one-hectare portion of Lot No. 6196-A and "Spouses Jacinto

22

Lomocso and Balbina T. Lomocso" for a one-hectare portion of Lot Nos. 6196-B and 7529-A. The two complaints were also raffled to Branch 9 of the RTC of Dipolog City and docketed as Civil Case Nos. 5433 and 5434, respectively. In Civil Case No. 5433, petitioners prayed that judgment be rendered: 1. Declaring [a] portion of Lot 6196-A titled under OCT (P23527) 4888 equivalent to one hectare located at the western portion of Lot 4888 as private property of the plaintiffs under Sec. 48(B) CA 141 otherwise known as Public Land OCT (sic) as amended by RA No. 1942; 2. Ordering the defendant to reconvey the equivalent of one (1) hectare forested portion of her property in question in favor of the plaintiffs within 30 days from the finality of the decision in this case segregating one hectare from OCT (P23527) 4888, located at its Western portion and if she refuse (sic), ordering the Clerk of Court of this Honorable Court to execute the deed of reconveyance with like force and effect, as if executed by the defenda[n]t herself; 3. Ordering defendant to pay P30,000.00 for the 22 forest trees illegally cut; P20,000.00 for moral damages; P20,000.00 for Attorney's fees; P20,000.00 for litigation expenses; and to pay the cost of the proceedings. 10 In Civil Case No. 5434, petitioners prayed that judgment be rendered: 1. Declaring [a] portion of Lot 7529-A under OCT (P-23207) 12870 and Lot 6196B OCT (P-20845) 4889 equivalent to one hectare located as (sic) the western portion of said lots as private property of the plaintiffs under Sec. 48(b) of [C.A. No.] 141 otherwise know[n] as the [P]ublic [L]and [A]ct as amended by RA 1942; 2. Ordering the defendants to reconvey the equivalent of one (1) hectare forested portion of their properties in question in favor of the plaintiffs within 30 days from the finality of the decision in this case segregating one hectare from OCT (P23207) 12870 and OCT (T-20845)-4889 all of defendants, located at its Western portion and if they refuse, ordering the Clerk of Court of this Honorable Court to execute the deed of reconveyance with like force and effect as if executed by the defendants themselves[;] 3. Ordering defendants to pay P20,000.00 for the six (6) forest trees illegally cut; P20,000.00 for moral damages; P20,000.00 for Attorney's fees; P20,000.00 for litigation expenses; and to pay the cost of the proceedings.11 The three complaints12 commonly alleged: a) that on May 21, 1958, petitioners' parents (spouses Valeriano Sr. and Dorotea Concha) acquired by homestead a 24-hectare parcel of land situated in Cogon, Dipolog City; b) that since 1931, spouses Concha "painstakingly preserved" the forest in the 24-hectare land, including the excess four (4) hectares "untitled forest land" located at its eastern portion; c) that they possessed this excess 4 hectares of land (which consisted of Lot No. 6195, one-hectare portion of Lot No. 6196-A and one-hectare portion of Lot Nos. 6196-B and 7529-A) "continuously, publicly, notoriously, adversely, peacefully, in good faith and in concept of the (sic) owner since 1931;" d) that they continued possession and occupation of the 4-hectare land after the death of Dorotea Concha on December 23, 1992 and Valeriano Sr. on May 12, 1999; e) that the Concha spouses "have preserved the forest trees standing in [the subject lots] to the exclusion of the defendants (respondents) or other persons from 1931" up to November 12, 1996 (for Civil Case No. 5188) or January 1997 (for Civil Case Nos. 5433 and 5434) when respondents, "by force, intimidation, [and] stealth forcibly entered the premises, illegally cut, collected, [and] disposed" of 21 trees (for Civil Case No. 5188), 22 trees (for Civil Case No. 5433) or 6 trees

23

(for Civil Case No. 5434); f) that "the land is private land or that even assuming it was part of the public domain, plaintiffs had already acquired imperfect title thereto" under Sec. 48(b) of C.A. No. 141, as amended by Republic Act (R.A.) No. 1942; g) that respondents allegedly cut into flitches the trees felled in Lot No. 6195 (Civil Case No. 5188) while the logs taken from the subject lots in Civil Case Nos. 5433 and 5434 were sold to a timber dealer in Katipunan, Zamboanga del Norte; h) that respondents "surreptitiously" filed free patent applications over the lots despite their full knowledge that petitioners owned the lots; i) that the geodetic engineers who conducted the original survey over the lots never informed them of the survey to give them an opportunity to oppose respondents' applications; j) that respondents' free patents and the corresponding OCTs were issued "on account of fraud, deceit, bad faith and misrepresentation"; and k) that the lots in question have not been transferred to an innocent purchaser. On separate occasions, respondents moved for the dismissal of the respective cases against them on the same grounds of: (a) lack of jurisdiction of the RTC over the subject matters of the complaints; (b) failure to state causes of action for reconveyance; (c) prescription; and (d) waiver, abandonment, laches and estoppel.13 On the issue of jurisdiction, respondents contended that the RTC has no jurisdiction over the complaints pursuant to Section 19(2) of Batas Pambansa Blg. (B.P.) 129, as amended by R.A. No. 7691, as in each case, the assessed values of the subject lots are less than P20,000.00. Petitioners opposed,14 contending that the instant cases involve actions the subject matters of which are incapable of pecuniary estimation which, under Section 19(1) of B.P. 129, as amended by R.A. 7691, fall within the exclusive original jurisdiction of the RTCs. They also contended that they have two main causes of action: for reconveyance and for recovery of the value of the trees felled by respondents. Hence, the totality of the claims must be considered which, if computed, allegedly falls within the exclusive original jurisdiction of the RTC. The trial court denied the respective motions to dismiss of respondents. 15 The respondents filed a Joint Motion for Reconsideration,16 to no avail.17 In their Supplemental Memorandum,23 petitioners contend that the nature of their complaints, as denominated therein and as borne by their allegations, are suits for reconveyance, or annulment or cancellation of OCTs and damages. The cases allegedly involve more than just the issue of title and possession since the nullity of the OCTs issued to respondents and the reconveyance of the subject properties were also raised as issues. Thus, the RTC has jurisdiction under Section 19(1) of B.P. 129, which provides that the RTC has jurisdiction "[i]n all civil actions in which the subject of the litigation is incapable of pecuniary estimation." Petitioners cited: a) Raymundo v. CA24 which set the criteria for determining whether an action is one not capable of pecuniary estimation; b) Swan v. CA25 where it was held that an action for annulment of title is under the jurisdiction of the RTC; c) Santos v. CA26 where it was similarly held that an action for annulment of title, reversion and damages was within the jurisdiction of the RTC; and d) Commodities Storage and ICE Plant Corporation v. CA27 where it was held that "[w]here the action affects title to the property, it should be filed in the RTC where the property is located." Petitioners also contend that while it may be argued that the assessed values of the subject properties are within the original jurisdiction of the municipal trial court (MTC), they have included in their prayers "any interest included therein" consisting of 49 felled natural grown trees illegally cut by respondents. Combining the assessed values of the properties as shown by their respective tax declarations and the estimated value of the trees cut, the total amount prayed by petitioners exceeds twenty

24

thousand pesos (P20,000.00). Hence, they contend that the RTC has jurisdiction under Section 19(2) of B.P. 129. Jurisdiction over the subject matter is the power to hear and determine cases of the general class to which the proceedings in question belong.28 It is conferred by law and an objection based on this ground cannot be waived by the parties. 29 To determine whether a court has jurisdiction over the subject matter of a case, it is important to determine the nature of the cause of action and of the relief sought.30 The trial court correctly held that the instant cases involve actions for reconveyance.31 An action for reconveyance respects the decree of registration as incontrovertible but seeks the transfer of property, which has been wrongfully or erroneously registered in other persons' names, to its rightful and legal owners, or to those who claim to have a better right. 32 There is no special ground for an action for reconveyance. It is enough that the aggrieved party has a legal claim on the property superior to that of the registered owner 33 and that the property has not yet passed to the hands of an innocent purchaser for value. 34 The reliefs sought by the petitioners in the instant cases typify an action for reconveyance. The following are also the common allegations in the three complaints that are sufficient to constitute causes of action for reconveyance, viz: (a) That plaintiff Valeriano S. Concha, Sr. together with his spouse Dorotea Concha have painstakingly preserve[d] the forest standing in the area [of their 24-hectare homestead] including the four hectares untitled forest land located at the eastern portion of the forest from 1931 when they were newly married, the date they acquired this property by occupation or possession;35 (b) That spouses Valeriano S. Concha Sr. and Dorotea P. Concha have preserved the forest trees standing in [these parcels] of land to the exclusion of the defendants Lomocsos or other persons from 1931 up to November 12, 1996 [for Civil Case No. 5188] and January 1997 [for Civil Case Nos. 5433 and 5434] when defendants[,] by force, intimidation, [and] stealth[,] forcibly entered the premises, illegal[ly] cut, collected, disposed a total of [twenty-one (21) trees for Civil Case No. 5188, twenty-two (22) trees for Civil Case No. 5433 and six (6) trees for Civil Case No. 5434] of various sizes;36 (c) That this claim is an assertion that the land is private land or that even assuming it was part of the public domain, plaintiff had already acquired imperfect title thereto under Sec. 48(b) of [C.A.] No. 141[,] otherwise known as the Public Land Act[,] as amended by [R.A.] No. [7691]; 37 (d) That [respondents and their predecessors-in-interest knew when they] surreptitiously filed38 [their respective patent applications and were issued their respective] free patents and original certificates of title [that the subject lots belonged to the petitioners];39 (e) [That respondents' free patents and the corresponding original certificates of titles were issued] on account of fraud, deceit, bad faith and misrepresentation; 40 and (f) The land in question has not been transferred to an innocent purchaser.41 These cases may also be considered as actions to remove cloud on one's title as they are intended to procure the cancellation of an instrument constituting a claim on petitioners' alleged title which was used to injure or vex them in the enjoyment of their alleged title.42

25

Being in the nature of actions for reconveyance or actions to remove cloud on one's title, the applicable law to determine which court has jurisdiction is Section 19(2) of B.P. 129, as amended by R.A. No. 7691, viz: Section 19. Jurisdiction in Civil Cases.-- Regional Trial Courts shall exercise exclusive original jurisdiction: x x x (2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or for civil actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts; x x x. In the cases at bar, it is undisputed that the subject lots are situated in Cogon, Dipolog City and their assessed values are less than P20,000.00, to wit: Civil Case 5188 5433 5434 No. Lot No. 6195 6196-A 6196-B 7529-A Assessed Value P1,030.00 4,500.00 4,340.00 1,880.00.43

Hence, the MTC clearly has jurisdiction over the instant cases. Petitioners' contention that this case is one that is incapable of pecuniary estimation under the exclusive original jurisdiction of the RTC pursuant to Section 19(1) of B.P. 129 is erroneous. In a number of cases, we have held that actions for reconveyance44 of or for cancellation of title45 to or to quiet title46 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." The original text of Section 19(2) of B.P. 129 as well as its forerunner, Section 44(b) of R.A. 296,47 as amended, gave the RTCs (formerly courts of first instance) exclusive original jurisdiction "[i]n all civil actions which involve the title to, or possession of, real property, or any interest therein , except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon Metropolitan Trial Courts, [MTCs], and Municipal Circuit Trial Courts (conferred upon the city and municipal courts under R.A. 296, as amended)." 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. 769148 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

26

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."49 The cases of Raymundo v. CA50 and Commodities Storage and ICE Plant Corporation v. CA,51 relied upon by the petitioners, are inapplicable to the cases at bar. Raymundo involved a complaint for mandatory injunction, not one for reconveyance or annulment of title. The bone of contention was whether the case was incapable of pecuniary estimation considering petitioner's contention that the pecuniary claim of the complaint was only attorney's fees of P10,000, hence, the MTC had jurisdiction. The Court defined the criterion for determining whether an action is one that is incapable of pecuniary estimation and held that the issue of whether petitioner violated the provisions of the Master Deed and Declaration of Restriction of the Corporation is one that is incapable of pecuniary estimation. The claim for attorney's fees was merely incidental to the principal action, hence, said amount was not determinative of the court's jurisdiction. Nor can Commodities Storage and ICE Plant Corporation provide any comfort to petitioners for the issue resolved by the Court in said case was venue and not jurisdiction. The action therein was for damages, accounting and fixing of redemption period which was filed on October 28, 1994, before the passage of R.A. No. 7691. In resolving the issue of venue, the Court held that "[w]here the action affects title to property, it should be instituted in the [RTC] where the property is situated. The Sta. Maria Ice Plant & Cold Storage is located in Sta. Maria, Bulacan. The venue in Civil Case No. 94-727076 was therefore improperly laid." Worse, the cases of Swan v. CA52 and Santos v. CA53 cited by the petitioners, contradict their own position that the nature of the instant cases falls under Section 19(1) of B.P. 129. The complaints in Swan and Santos were filed prior to the enactment of R.A. No. 7691. In Swan, the Court held that the action being one for annulment of title, the RTC had original jurisdiction under Section 19(2) of B.P. 129. In Santos, the Court similarly held that the complaint for cancellation of title, reversion and damages is also one that involves title to and possession of real property under Section 19(2) of B.P. 129. Thus, while the Court held that the RTC had jurisdiction, the Court classified actions for "annulment of title" and "cancellation of title, reversion and damages" as civil actions that involve "title to, or possession of, real property, or any interest therein" under Section 19(2) of B.P. 129. Petitioners' contention that the value of the trees cut in the subject properties constitutes "any interest therein (in the subject properties)" that should be computed in addition to the respective assessed values of the subject properties is unavailing. Section 19(2) of B.P. 129, as amended by R.A. No. 7691, is clear that the RTC shall exercise jurisdiction "in all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or for civil actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00)." It is true that the recovery of the value of the trees cut from the subject properties may be included in the term "any interest therein." However, the law is emphatic that in determining which court has jurisdiction, it is only the assessed value of the realty involved that should be computed.54 In this case, there is no dispute that the assessed values of the subject properties as shown by their tax declarations are less than P20,000.00. Clearly, jurisdiction over the instant cases belongs not to the RTC but to the MTC.

27

IN VIEW WHEREOF, the decision of the Court of Appeals is hereby AFFIRMED that the RTC of Dipolog City, Branch 9, has no jurisdiction in Civil Case Nos. 5188, 5433 and 5434. SO ORDERED. 6) G.R. No. 149243, October 28, 2002, Copioso vs. Copioso, et al. LOLITA B. COPIOSO versus LAURO, DOLORES, RAFAEL, ESTEBAN, and CORAZON, all surnamed COPIOSO, and COURT OF APPEALS. BELLOSILLO, J.: This petition for review assails the Decision1 of the Court of Appeals in CA G.R. SP No. 62090 which dismissed petitioner's petition for certiorari as well as its Resolution denying reconsideration thereof. On 4 July 2000 respondents Lauro, Dolores, Rafael, Esteban and Corazon, all surnamed Copioso, filed a complaint2 for reconveyance of two (2) parcels of coconut land situated in Banilad, Nagcarlan, Laguna, against Lolita B. Copioso, spouses Bernabe and Imelda Doria, and the estate of deceased Antonio Copioso, as well as vendees Dolores Reduca, Mercedes Reduca, Rosario Pascua, Elvira Bombasi and Federico Casabar. Respondents alleged that they together with their deceased brother Antonio Copioso were co-owners of the subject property having inherited the same from their parents, and that through fraud and machination Antonio had the property transferred to his name and that of spouses Bernabe and Imelda Doria who subsequently sold the same to third parties. They thus prayed for the reconveyance of the property by virtue of their being co-owners thereof. When respondents claimed in a manifestation with motion for bill of particulars that the assessed value of the subject property was P3,770.00, petitioner Lolita Copioso and spouses Bernabe and Imelda Doria separately moved to dismiss the complaint on the ground that it was the Municipal Trial Court (MTC) and not the Regional Trial Court (RTC) that had jurisdiction over the case considering that the assessed value of the property was lower than P20,000.00. The trial court in its twin orders of 5 and 12 September 2000 denied the motions to dismiss holding that since the subject matter of the action was beyond pecuniary estimation it was properly within its jurisdiction. 3 Lolita Copioso's Motion for Reconsideration was denied,4 hence, she filed with the Court of Appeals a petition for certiorari and prohibition praying for the annulment of the twin orders of the trial court which denied the motions to dismiss and at the same time maintaining her position that the RTC had no jurisdiction over the case because the assessed value of the property was below P20,000.00. The appellate court denied the petition thus affirming the jurisdiction of the RTC over the complaint for reconveyance. Motion for reconsideration thereon was similarly denied by the appellate court, hence this petition. Petitioner Lolita Copioso anchors her argument on Sec. 33, par. (3), of B.P. Blg. 129 otherwise known as The Judiciary Reorganization Act of 1980 as amended by Sec. 3 of RA 7691 which provides Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts shall exercise: x x x x (3)

28

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, attorneys 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. Petitioner argues that the complaint for reconveyance cannot be resolved unless the trial court delves upon the issues of "title, possession and interests" of each of the stakeholders over the subject parcels of land. She asserts that the allegations and relief prayed for in the complaint coupled with the assessed value of the disputed property place the action within the exclusive jurisdiction of the MTC and not the RTC. In turn, private respondents anchor their position on Sec. 19, par. (1), of the same law which provides Sec. 19. Jurisdiction in civil cases. The Regional Trial Courts shall exercise exclusive original jurisdiction: In all civil actions in which the subject of the litigation is incapable of pecuniary estimation: x x x Simply, they claim that the instant complaint for reconveyance is a case of joinder of causes of action which include the annulment of sale and other instruments of false conveyance incapable of pecuniary estimation thus within the legal competence of the RTC. The law on jurisdiction of trial courts over civil cases is neither ambiguous nor confusing. Sec. 33, par. (3), in relation to Sec. 19 par. (2) of B.P. 129 as amended by RA 7691, deals with civil cases capable of pecuniary estimation. On the other hand, Sec. 33, par. (3), in relation to Sec. 19, par. (1), applies to cases incapable of pecuniary estimation. Sec. 33, par. (3), in relation to Sec. 19, par. (2), of B.P. 129, as amended by RA 7691, provides that in civil cases involving sum of money or title to, possession of, or any interest in real property, jurisdiction is determined on the basis of the amount of the claim or the assessed value of the real property involved, such that where the sum of money or the assessed value of the real property does not exceed P20,000.00, or P50,000.00 in Metro Manila, jurisdiction lies with the MTC; and where it exceeds that amount, jurisdiction is vested with the RTC. Indeed, the present dispute pertains to the title, possession and interest of each of the contending parties over the contested property the assessed value of which falls within the jurisdictional range of the MTC. Nonetheless, the nature of the action filed, the allegations set forth, and the reliefs prayed for, forestall its cognizance by the MTC. As can be readily gleaned from the records, the complaint was for "Reconveyance and/or Recovery of Common Properties Illegally Disposed, with Annulment of Sales and other Instruments of False Conveyance, with Damages, and Restraining Order." Private respondents alleged therein that they were coowners of the property along with their deceased brother Antonio Copioso; and that in or about 1998, with fraud and machination, Antonio together with the spouses Bernabe and Imelda Doria made it appear in a public document entitled Pagpapatunay ng Kusang Loob na Pagbabahagi that they were the co-owners of the subject property and had divided the same equally between themselves to the exclusion of private respondents. Subsequently, they sold the subdivided lots

29

to the other defendants namely Dolores Reduca, Mercedes Reduca, Rosario Pascua, Elvira Bombasi and Federico Casabar. Private respondents also sought payment of moral damages, exemplary damages, litigation expenses, attorney's fees plus appearance fees amounting to more or less P286,500.00. They likewise applied for a TRO pending the issuance of a writ of preliminary injunction restraining the defendants from further alienating the common properties. They also prayed of the trial court to order the cancellation, annulment and/or rescission of the four (4) deeds of absolute sale made in favor of the buyers, and to order Lolita B. Copioso and the estate of Antonio Copioso to return the price that the buyer-defendants had paid to them for the land sold. Clearly, this is a case of joinder of causes of action which comprehends more than the issue of title to, possession of, or any interest in the real property under contention but includes an action to annul contracts, reconveyance or specific performance, and a claim for damages, which are incapable of pecuniary estimation and thus properly within the jurisdiction of the RTC. As correctly opined by the appellate court, if the only issue involved herein is naked possession or bare ownership, then petitioner Lolita Copioso would not be amiss in her assertion that the instant complaint for reconveyance, considering the assessed value of the disputed property, falls within the exclusive jurisdiction of the MTC. But as herein before stated, the issue of title, ownership and/or possession thereof is intertwined with the issue of annulment of sale and reconveyance hence within the ambit of the jurisdiction of the RTC. The assessed value of the parcels of land thus becomes merely an incidental matter to be dealt with by the court, when necessary, in the resolution of the case but is not determinative of its jurisdiction. WHEREFORE, the petition is DENIED. The 16 May 2001 Decision of the Court of Appeals in CA-G.R. SP No. 62090 as well as its 30 July 2001 Resolution denying reconsideration thereof is AFFIRMED. Costs against petitioner. B. ILLUSTRATIVE CASES Real Actions: 1) G. R. No. 76431 October 16, 1989, Fortune Motors, (Phils.)., Inc. vs. CA FORTUNE MOTORS, (PHILS.) INC. VERSUS THE HONORABLE COURT OF APPEALS, METROPOLITAN BANK and TRUST COMPANY. PARAS, J.: This is a petition for review on certiorari seeking the reversal of: (a) the July 30, 1986 decision of the Court of Appeals in AC-G.R. SP No. 09255 entitled "Metropolitan Bank & Trust Co. v. Hon. Herminio C. Mariano, et al." dismissing Civil Case No. 8533218 entitled "Fortune Motors (Phils.) Inc. v. Metropolitan Bank & Trust Co." filed in the Regional Trial Court of Manila, Branch IV for improper venue and (b) the resolution dated October 30, 1986 denying petitioner's motion for reconsideration. The undisputed facts of the case are as follows: On March 29,1982 up to January 6,1984, private respondent Metropolitan Bank extended various loans to petitioner Fortune Motors in the total sum of

30

P32,500,000.00 (according to the borrower; or P34,150,000.00 according to the Bank) which loan was secured by a real estate mortgage on the Fortune building and lot in Makati, Rizal. (Rollo, pp. 60-62) Due to financial difficulties and the onslaught of economic recession, the petitioner was not able to pay the loan which became due. (Rollo, p. 62) For failure of the petitioner to pay the loans, the respondent bank initiated extrajudicial foreclosure proceedings. After notices were served, posted, and published, the mortgaged property was sold at public auction for the price of P47,899,264.91 to mortgagee Bank as the highest bidder. (Rollo, p. 11) The sheriff's certificate of sale was registered on October 24, 1984 with the oneyear redemption period to expire on October 24,1985. (Rollo, p. 12) On October 21, 1985, three days before the expiration of the redemption period, petitioner Fortune Motors filed a complaint for annulment of the extrajudicial foreclosure sale alleging that the foreclosure was premature because its obligation to the Bank was not yet due, the publication of the notice of sale was incomplete, there was no public auction, and the price for which the property was sold was "shockingly low". (Rollo, pp. 60-68) Before summons could be served private respondent Bank filed a motion to dismiss the complaint on the ground that the venue of the action was improperly laid in Manila for the realty covered by the real estate mortgage is situated in Makati, therefore the action to annul the foreclosure sale should be filed in the Regional Trial Court of Makati. (Rollo, pp. 67-71-A ) The motion was opposed by petitioner Fortune Motors alleging that its action "is a personal action" and that "the issue is the validity of the extrajudicial foreclosure proceedings" so that it may have a new one year period to redeem. (Rollo, pp. 72-73) On January 8, 1986 an order was issued by the lower court reserving the resolution of the Bank's motion to dismiss until after the trial on the merits as the grounds relied upon by the defendant were not clear and indubitable. (Rollo, p. 81) The Bank filed a motion for reconsideration of the order dated January 8, 1986 but it was denied by the lower court in its order dated May 28, 1986. (Rollo, Annex "L" pp. 93-96; Annex "N" p. 99) On June 11, 1986 the respondent Bank filed a petition for certiorari and prohibition in the Court of Appeals. (Rollo, Annex "O" pp. 100-115) And on July 30, 1986, a decision was issued by the Court of Appeals, the dispositive part of which reads as follows:
WHEREFORE, the petition for certiorari and prohibition is granted. The complaint in the Civil Case No. 85-33218 is dismissed without prejudice to its being filed in the proper venue. Costs against the private respondent. SO ORDERED. (Rollo, p. 15)

A motion for reconsideration was filed on August 11, 1986 on the said decision and on October 30, 1986 a resolution was issued denying such motion for reconsideration. (Rollo, Annex "O" pp. 121-123; Annex "S" p. 129)

31

Hence, the petition for review on certiorari. On June 10, 1987 the Court gave due course to the petition, required the parties to file their respective memoranda within twenty (20) days from the notice hereof, and pay deposit for costs in the amount of P80.40. Both parties have filed their respective memoranda, and the case was submitted for Court's resolution in the resolution dated December 14, 1987. (Rollo,Metrobank's Memorandum pp. 45-59; petitioner's memorandum pp.130136; Res. p. 138) The only issue in this case is whether petitioner's action for annulment of the real estate mortgage extrajudicial foreclosure sale of Fortune Building is a personal action or a real action for venue purposes. In a real action, the plaintiff seeks the recovery of real property, or as indicated in Sec. 2 (a) of Rule 4, a real action is an action affecting title to real property, or for the recovery of possession, or for the partition or condemnation of, or foreclosure of a mortgage on real property. (Comments on the Rules of Court by Moran, Vol. 1, p. 122) Real actions or actions affecting title to, or for the recovery of possession, or for the partition or condemnation of, or foreclosure of mortgage on real property, must be instituted in the Court of First Instance of the province where the property or any part thereof lies. (Enriquez v. Macadaeg, 84 Phil. 674,1949; Garchitorena v. Register of Deeds, 101 Phil. 1207, 1957) Personal actions upon the other hand, may be instituted in the Court of First Instance where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff (Sec. 1, Rule 4, Revised Rules of Court). A prayer for annulment or rescission of contract does not operate to efface the true objectives and nature of the action which is to recover real property. (Inton, et al., v. Quintan, 81 Phil. 97, 1948) An action for the annulment or rescission of a sale of real property is a real action. Its prime objective is to recover said real property. (Gavieres v. Sanchez, 94 Phil. 760,1954) An action to annul a real estate mortgage foreclosure sale is no different from an action to annul a private sale of real property. (Munoz v. Llamas, 87 Phil. 737,1950) While it is true that petitioner does not directly seek the recovery of title or possession of the property in question, his action for annulment of sale and his claim for damages are closely intertwined with the issue of ownership of the building which, under the law, is considered immovable property, the recovery of which is petitioner's primary objective. The prevalent doctrine is that an action for the annulment or rescission of a sale of real property does not operate to efface the fundamental and prime objective and nature of the case, which is to recover said real property. It is a real action. Respondent Court, therefore, did not err in dismissing the case on the ground of improper venue (Sec. 2, Rule 4) which was timely raised (Sec. 1, Rule 16). (Punzalan, Jr. v. Vda. de Lacsamana, 121 SCRA 336, [1983]).

32

Thus, as aptly decided by the Court of Appeals in a decision penned by then Court of Appeals Associate Justice now Associate Justice of the Supreme Court Carolina C. Grio-Aquino, the pertinent portion reads: "Since an extrajudicial foreclosure of real property results in a conveyance of the title of the property sold to the highest bidder at the sale, an action to annul the foreclosure sale is necessarily an action affecting the title of the property sold. It is therefore a real action which should be commenced and tried in the province where the property or part thereof lies." PREMISES CONSIDERED, the instant petition is DENIED for lack of merit and the assailed decision of the respondent Court of Appeals is AFFIRMED. SO ORDERED. 2) G.R. No. 132424, May 2, 2006, Spouses Valdez vs.CA. SPOUSES BONIFACIO R. VALDEZ, JR. and VENIDA M. VALDEZ VERSUS HON. COURT OF APPEALS, SPOUSES GABRIEL FABELLA and FRANCISCA FABELLA DECISION CHICO-NAZARIO, J.: This petition for review under Rule 45 of the Rules of Court, filed by petitioners spouses Bonifacio R. Valdez, Jr. and Venida M. Valdez, seeks to nullify and set aside the 22 April 1997 decision1 and 30 January 1998 resolution of the Court of Appeals in CA-G.R. SP No. 43492, which reversed the judgment, dated 8 January 1997, of the Regional Trial Court of Antipolo, Rizal, Branch 74, in Civil Case No. 3607, which, in turn, affirmed in toto the decision rendered by the Municipal Trial Court of Antipolo, Rizal, Branch II, in Civil Case No. 2547. This case originated from a complaint for unlawful detainer filed by petitioners Bonifacio and Venida Valdez against private respondents Gabriel and Francisca Fabella before the Municipal Trial Court of Antipolo, Rizal. The complaint alleges these material facts: 2. That plaintiffs are the registered owner[s] of a piece of residential lot denominated as Lot [N]o. 3 Blk 19 located at Carolina Executive Village, Brgy. Sta. Cruz, Antipolo, Rizal which [they] acquired from Carolina Realty, Inc. Sometime [i]n November 1992 by virtue of Sales Contract, xerox copy of which is hereto attached marked as Annex "A" and the xerox copy of the Torrens Certificate of Title in her name marked as Annex "B"; 3. That defendants, without any color of title whatsoever occupie[d] the said lot by building their house in the said lot thereby depriving the herein plaintiffs rightful possession thereof; 4. That for several times, plaintiffs orally asked the herein defendants to peacefully surrender the premises to them, but the latter stubbornly refused to vacate the lot they unlawfully occupied; 5. That despite plaintiffs referral of the matter to the Barangay, defendants still refused to heed the plea of the former to surrender the lot peacefully;

33

6. That because of the unfounded refusal of the herein defendants to settle the case amicably, the Barangay Captain was forced to issue the necessary Certification to File Action in favor of the herein plaintiffs in order that the necessary cause of action be taken before the proper court, xerox copy of which is hereto attached marked as Annex "C"; 7. That by reason of the deliberate, malicious and unfounded refusal of the defendants to vacate/surrender the premises in question, the herein plaintiffs were constrained to engage the professional services of counsel thus incurring expenses amounting to TEN THOUSAND PESOS (P10,000.00) representing acceptance fee and additional ONE THOUSAND PESOS (P1,000.00) per appearance, who on July 12, 1994 sent a formal demand was likewise ignored, (sic) copy of which is hereto attached as Annex "D"; 8. That likewise by virtue of the adamant refusal of the defendants to vacate/surrender the said premises in question, plaintiff[s] suffered serious anxiety, sleepless nights, mental torture and moral erosion; x x x2 In their answer, private respondents contended that the complaint failed to state that petitioners had prior physical possession of the property or that they were the lessors of the former. In the alternative, private respondents claimed ownership over the land on the ground that they had been in open, continuous, and adverse possession thereof for more than thirty years, as attested by an ocular inspection report from the Department of Environment and Natural Resources. They also stressed that the complaint failed to comply with Supreme Court Circular No. 28-91 regarding affidavits against non-forum shopping. The Municipal Trial Court (MTC) rendered a decision in favor of the petitioners, ordering private respondents to vacate the property and to pay rent for the use and occupation of the same plus attorneys fees. Private respondents appealed the MTCs decision to the Regional Trial Court (RTC). The RTC, in a decision dated 8 January 1997, affirmed in toto the decision of the MTC. Undeterred, the private respondents filed a petition for review with the Court of Appeals on 10 March 1997 questioning the decision of the RTC. In a decision dated 22 April 1997, the Court of Appeals reversed and set aside the decision of the RTC. It held that petitioners failed to make a case for unlawful detainer because they failed to show that they had given the private respondents the right to occupy the premises or that they had tolerated private respondents possession of the same, which is a requirement in unlawful detainer cases. It added that the allegations in petitioners complaint lack jurisdictional elements for forcible entry which requires an allegation of prior material possession. The Court of Appeals ratiocinated thus: An examination of the complaint reveals that key jurisdictional allegations that will support an action for ejectment are conspicuously lacking. In particular, an allegation of prior material possession is mandatory in forcible entry, xxx and the complaint is deficient in this respect. On the other hand, neither does there appear to be a case of unlawful detainer, since the private respondents failed to show that they had given the petitioners the right to occupy the premises, which right has now [been] extinguished. xxx

34

In light of the foregoing, the conclusion is inevitable that the Municipal Trial Court before which the action for ejectment was filed had no jurisdiction over the case. Consequently, the dismissal thereof is in order. WHEREFORE, the Petition is hereby GIVEN DUE COURSE, and GRANTED. The decision dated 08 January 1997 rendered by the respondent court is hereby REVERSED and SET ASIDE, and judgment is hereby rendered DISMISSING the complaint in Civil Case No. 2547 of the Municipal Trial Court of Antipolo, Rizal for lack of jurisdiction.3 Petitioners filed a motion for reconsideration which was denied in a resolution dated 30 January 1998.4 Hence, the instant petition. Petitioners submit the following issues for the Courts consideration5: A. WHETHER OR NOT THE ALLEGATIONS OF THE COMPLAINT CLEARLY MADE OUT A CASE FOR UNLAWFUL DETAINER. B. WHETHER OR NOT BASED ON THE ALLEGATION(S) OF THE COMPLAINT, THE MUNICIPAL TRIAL COURT OF ANTIPOLO, RIZAL, CLEARLY HAS ORIGINAL JURISDICTION OVER THE INSTANT COMPLAINT FILED BEFORE IT. Since the two issues are closely intertwined, they shall be discussed together. In the main, petitioners claim that the averments of their complaint make out a case for unlawful detainer having alleged that private respondents unlawfully withheld from them the possession of the property in question, which allegation is sufficient to establish a case for unlawful detainer. They further contend that the summary action for ejectment is the proper remedy available to the owner if another occupies the land at the formers tolerance or permission without any contract between the two as the latter is bound by an implied promise to vacate the land upon demand by the owner. The petition is not meritorious. Under existing law and jurisprudence, there are three kinds of actions available to recover possession of real property: (a) accion interdictal; (b) accion publiciana; and (c) accion reivindicatoria.6 Accion interdictal comprises two distinct causes of action, namely, forcible entry (detentacion) and unlawful detainer (desahuico).7 In forcible entry, one is deprived of physical possession of real property by means of force, intimidation, strategy, threats, or stealth whereas in unlawful detainer, one illegally withholds possession after the expiration or termination of his right to hold possession under any contract, express or implied.8 The two are distinguished from each other in that in forcible entry, the possession of the defendant is illegal from the beginning, and that the issue is which party has prior de facto possession while in unlawful detainer, possession of the defendant is originally legal but became illegal due to the expiration or termination of the right to possess. 9 The jurisdiction of these two actions, which are summary in nature, lies in the proper municipal trial court or metropolitan trial court.10 Both actions must be brought within one year from the date of actual entry on the land, in case of

35

forcible entry, and from the date of last demand, in case of unlawful detainer. 11 The issue in said cases is the right to physical possession. Accion publiciana is the plenary action to recover the right of possession which should be brought in the proper regional trial court when dispossession has lasted for more than one year.12 It is an ordinary civil proceeding to determine the better right of possession of realty independently of title. 13 In other words, if at the time of the filing of the complaint more than one year had elapsed since defendant had turned plaintiff out of possession or defendants possession had become illegal, the action will be, not one of the forcible entry or illegal detainer, but an accion publiciana. On the other hand, accion reivindicatoria is an action to recover ownership also brought in the proper regional trial court in an ordinary civil proceeding.14 To justify an action for unlawful detainer, it is essential that the plaintiffs supposed acts of tolerance must have been present right from the start of the possession which is later sought to be recovered.15 Otherwise, if the possession was unlawful from the start, an action for unlawful detainer would be an improper remedy.16 As explained in Sarona v. Villegas17: But even where possession preceding the suit is by tolerance of the owner, still, distinction should be made. If right at the incipiency defendants possession was with plaintiffs tolerance, we do not doubt that the latter may require him to vacate the premises and sue before the inferior court under Section 1 of Rule 70, within one year from the date of the demand to vacate. xxxx A close assessment of the law and the concept of the word "tolerance" confirms our view heretofore expressed that such tolerance must be present right from the start of possession sought to be recovered, to categorize a cause of action as one of unlawful detainer - not of forcible entry. Indeed, to hold otherwise would espouse a dangerous doctrine. And for two reasons: First. Forcible entry into the land is an open challenge to the right of the possessor. Violation of that right authorizes the speedy redress in the inferior court - provided for in the rules. If one year from the forcible entry is allowed to lapse before suit is filed, then the remedy ceases to be speedy; and the possessor is deemed to have waived his right to seek relief in the inferior court. Second, if a forcible entry action in the inferior court is allowed after the lapse of a number of years, then the result may well be that no action of forcible entry can really prescribe. No matter how long such defendant is in physical possession, plaintiff will merely make a demand, bring suit in the inferior court upon a plea of tolerance to prevent prescription to set in - and summarily throw him out of the land. Such a conclusion is unreasonable. Especially if we bear in mind the postulates that proceedings of forcible entry and unlawful detainer are summary in nature, and that the one year time-bar to suit is but in pursuance of the summary nature of the action. 18 (Underlining supplied) It is the nature of defendants entry into the land which determines the cause of action, whether it is forcible entry or unlawful detainer. If the entry is illegal, then the action which may be filed against the intruder is forcible entry. If, however, the entry is legal but the possession thereafter becomes illegal, the case is unlawful detainer.

36

Indeed, to vest the court jurisdiction to effect the ejectment of an occupant, it is necessary that the complaint should embody such a statement of facts as brings the party clearly within the class of cases for which the statutes provide a remedy, as these proceedings are summary in nature. 19 The complaint must show enough on its face the court jurisdiction without resort to parol testimony. 20 The jurisdictional facts must appear on the face of the complaint. When the complaint fails to aver facts constitutive of forcible entry or unlawful detainer, as where it does not state how entry was affected or how and when dispossession started, the remedy should either be an accion publiciana or an accion reivindicatoria in the proper regional trial court.21 Thus, in Go, Jr. v. Court of Appeals,22 petitioners filed an unlawful detainer case against respondent alleging that they were the owners of the parcel of land through intestate succession which was occupied by respondent by mere tolerance of petitioners as well as their deceased mother. Resolving the issue on whether or not petitioners case for unlawful detainer will prosper, the court ruled23: Petitioners alleged in their complaint that they inherited the property registered under TCT No. C-32110 from their parents; that possession thereof by private respondent was by tolerance of their mother, and after her death, by their own tolerance; and that they had served written demand on December, 1994, but that private respondent refused to vacate the property. x x x It is settled that one whose stay is merely tolerated becomes a deforciant illegally occupying the land the moment he is required to leave. It is essential in unlawful detainer cases of this kind, that plaintiffs supposed acts of tolerance must have been present right from the start of the possession which is later sought to be recovered. This is where petitioners cause of action fails. The appellate court, in full agreement with the MTC made the conclusion that the alleged tolerance by their mother and after her death, by them, was unsubstantiated. x x x The evidence revealed that the possession of defendant was illegal at the inception and not merely tolerated as alleged in the complaint, considering that defendant started to occupy the subject lot and then built a house thereon without the permission and consent of petitioners and before them, their mother. xxx Clearly, defendants entry into the land was effected clandestinely, without the knowledge of the owners, consequently, it is categorized as possession by stealth which is forcible entry. As explained in Sarona vs. Villegas, cited in Muoz vs. Court of Appeals [224 SCRA 216 (1992)] tolerance must be present right from the start of possession sought to be recovered, to categorize a cause of action as one of unlawful detainer not of forcible entry x x x. And in the case of Ten Forty Realty and Development Corp. v. Cruz, 24 petitioners complaint for unlawful detainer merely contained the bare allegations that (1) respondent immediately occupied the subject property after its sale to her, an action merely tolerated by petitioner; and (2) her allegedly illegal occupation of the premises was by mere tolerance. The court, in finding that the alleged tolerance did not justify the action for unlawful detainer, held: To justify an action for unlawful detainer, the permission or tolerance must have been present at the beginning of the possession. x x x xxxx In this case, the Complaint and the other pleadings do not recite any averment of fact that would substantiate the claim of petitioner that it permitted or tolerated the occupation of the property by Respondent Cruz. The complaint contains only

37

bare allegations that 1) respondent immediately occupied the subject property after its sale to her, an action merely tolerated by petitioner; and 2) her allegedly illegal occupation of the premises was by mere tolerance. These allegations contradict, rather than support, petitioners theory that its cause of action is for unlawful detainer. First, these arguments advance the view that respondents occupation of the property was unlawful at its inception. Second, they counter the essential requirement in unlawful detainer cases that petitioners supposed act of sufferance or tolerance must be present right from the start of a possession that is later sought to be recovered. 25 In the instant case, the allegations in the complaint do not contain any averment of fact that would substantiate petitioners claim that they permitted or tolerated the occupation of the property by respondents. The complaint contains only bare allegations that "respondents without any color of title whatsoever occupies the land in question by building their house in the said land thereby depriving petitioners the possession thereof." Nothing has been said on how respondents entry was effected or how and when dispossession started. Admittedly, no express contract existed between the parties. This failure of petitioners to allege the key jurisdictional facts constitutive of unlawful detainer is fatal. 26 Since the complaint did not satisfy the jurisdictional requirement of a valid cause for unlawful detainer, the municipal trial court had no jurisdiction over the case. 27 It is in this light that this Court finds that the Court of Appeals correctly found that the municipal trial court had no jurisdiction over the complaint. WHEREFORE, the petition is DENIED and the judgment of the Court of Appeals dismissing the complaint in Civil Case No. 2547 of the MTC Antipolo, Rizal for lack of jurisdiction is hereby AFFIRMED. No pronouncement as to costs. SO ORDERED. 3) G.R. No. 197725, July 31, 2013, Esteban vs. Spouses MarceloMARK ANTHONY ESTEBAN (in substitution of the deceased GABRIEL O. ESTEBAN) VERSUS SPOUSES RODRIGO C. MARCELO and CARMEN T. MARCELO. BRION, J.: Before the Court is a petition for review on certiorari,1 filed under Rule 45 of the Rules of Court, assailing the decision2 dated January 17, 2011 and the resolution3 dated July 15, 2011 of the Court of Appeals (CA) in CA G.R. SP No. 112609. The Facts The late Gabriel O. Esteban, substituted by his son, petitioner Mark Anthony Esteban,4 had been in possession of a piece of land located at 702 Tiaga St., Barangka Drive, Mandaluyong City, since the 1950s.5 In the 1960s, the late Esteban's sister constructed a foundry shop at the property. In the 1970s, after the foundry operations had proven unproductive, the respondents-spouses Rodrigo and Carmen Marcelo were allowed to reside therein, for a monthly rental fee of P50.00. Since March 2001, the respondents-spouses have stopped paying the rental fee (which by that time amounted to P160.00). On October 31, 2005, the late Esteban, through a lawyer, sent the respondents-spouses a demand

38

letter requiring them to settle their arrears and to vacate within five (5) days from receipt thereof.6 For failure to comply with the demand to pay and to vacate, the late Esteban instituted an unlawful detainer case against the respondentsspouses on December 6, 2005. The MeTCs and RTCs Rulings In its April 23, 2009 decision,7 the Metropolitan Trial Court (MeTC) ruled that there was a valid ground for ejectment; with the jurisdictional demand to vacate complied with, the respondents-spouses must vacate the property, pursuant to paragraphs 1 and 2, Article 1673 of the New Civil Code, 8 on the grounds of expiration of the lease and nonpayment of monthly rentals. The MeTC likewise ordered the respondents-spouses to pay back rentals and rentals, plus legal interest until they shall have vacated the property, attorneys fees and cost of the suit. On appeal, the Regional Trial Court (RTC) fully affirmed the MeTC ruling.9 The CA Ruling The respondents-spouses appealed the RTCs ruling to the CA. In its January 17, 2011 decision,10 the CA reversed the RTC. The CA ruled that from the year of dispossession in 2001 when the respondents-spouses stopped paying rent, until the filing of the complaint for ejectment in 2005, more than a year had passed; hence, the case no longer involved an accion interdictal11 cognizable by the MeTC, but an accion publiciana 12 that should have been filed before the RTC.13 Therefore, the MeTC had no jurisdiction over the case so that its decision was a nullity. Likewise, the Court ruled that the respondents-spouses cannot be evicted as they are protected by Section 6 of Presidential Decree No. (P.D.) 1517.14 Finally, the CA ruled that the respondents-spouses qualifies as beneficiary under Section 16 of Republic Act No. (RA) 7279.15 In its July 15, 2011 resolution, the CA denied the respondents-spouses partial motion for reconsideration anchored on the petitioners failure to effect a substitution of parties upon the death of the late Esteban. The CA reasoned out that mere failure to substitute a deceased party is not a sufficient ground to nullify a trial courts decision.16 The CA also reiterated its finding against the petitioner that since the time of dispossession, more than one year had passed; hence, the case was an accion publiciana that should have been commenced before the RTC.17 The Parties Arguments The petitioner filed the present petition for review on certiorari to assail the CA rulings. The petitioner argues that the case has been properly filed as an accion interdictal cognizable by the MeTC and was filed on December 6, 2005, or within the one-year prescriptive period counted from the date of the last demand on October 31, 2005; hence, the MeTC had proper jurisdiction over the case. The petitioner further argues that contrary to the CAs findings, the failure to pay did not render the possession unlawful; it was the failure or refusal to vacate after demand and failure to pay that rendered the occupancy unlawful. 18 The Courts Ruling The Court finds the petition meritorious. The one-year prescription period

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is counted from the last demand to pay and vacate As correctly pointed out by the petitioner, there should first be a demand to pay or to comply with the terms of the lease and a demand to vacate before unlawful detainer arises. The Revised Rules of Court clearly so state.20 Since 1947, case law has consistently upheld this rule. "Mere failure to pay rents does not ipso facto make unlawful tenant's possession of the premises. It is the owner's demand for tenant to vacate the premises, when the tenant has failed to pay the rents on time, and tenants refusal or failure to vacate, which make unlawful withholding of possession." In 2000, we reiterated this rule when we declared: "It is therefore clear that before the lessor may institute such action, he must make a demand upon the lessee to pay or comply with the conditions of the lease and to vacate the premises. It is the owners demand for the t enant to vacate the premises and the tenants refusal to do so which makes unlawful the withholding of possession. Such refusal violates the owners right of possession giving rise to an action for unlawful detainer."22 Furthermore, in cases where there were more than one demand to pay and vacate, the reckoning point of one year for filing the unlawful detainer is from the last demand as the lessor may choose to waive his cause of action and let the defaulting lessee remain in the premises.23 Any one of the co-owners may bring an action for ejectment We see no merit in the respondents-spouses observation that the present petition is irregular because the other compulsory heirs (or co-owners) have not been impleaded. The present petition has been properly filed under the express provision of Article 487 of the Civil Code.28 In the recent case of Rey Catigador Catedrilla v. Mario and Margie Lauron, 29 we explained that while all co-owners are real parties in interest in suits to recover properties, anyone of them may bring an action for the recovery of co-owned properties. Only the co-owner who filed the suit for the recovery of the co-owned property becomes an indispensable party thereto; the other co-owners are neither indispensable nor necessary parties. WHEREFORE, in view of the foregoing, the Court GRANTS the petition for review on certiorari. The decision dated January 1 7, 2011 and the resolution dated July 15, 20 II of the Court of Appeals in CA-G.R. SP No. 112609 are hereby REVERSED and SET ASIDE. The decision dated January 13, 2010 of the Regional Trial Court, Branch 211, Mandaluyong City, in Civil Case No. 20270, is hereby REINSTATED. Costs against the respondents spouses Rodrigo and Carmen Marcelo. SO ORDERED. 4) G.R. No. 17901, April 15, 2013, Catedrilla vs. Lauron REY CASTIGADOR CATEDRILLA VERSUS MARIO and MARGIE1 LAURON, PERALTA, J.: Assailed in this petition for review on certiorari is the Decision 2 dated February 28, 2007 of the Court of Appeals ((A) in CA-G.R. SP No. 00939, as well as its

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Resolution3dated reconsideration.

July

11,

2007

which

denied

petitioner's

motion

for

On February 12, 2003, petitioner Rey Castigador Catedrilla filed with the Municipal Trial Court (MTC) of Lambunao, Iloilo a Complaint 4 for ejectment against the spouses Mario and Margie Lauron alleging as follows: that Lorenza Lizada is the owner of a parcel of land known as Lot 183, located in Mabini Street, Lambunao, Iloilo, which was declared for taxation purposes in her name under Tax Declaration No. 0363;5 that on February 13, 1972, Lorenza died and was succeeded to her properties by her sole heir Jesusa Lizada Losaes, who was married to Hilarion Castigador (Castigador); that the spouses Jesusa and Hilarion Castigador had a number of children, which included Lilia Castigador (Lilia), who was married to Maximo Catedrilla (Maximo); that after the death of the spouses Castigador, their heirs agreed among themselves to subdivide Lot 183 and, pursuant to a consolidation subdivision plan 6 dated January 21, 1984, the parcel of lot denominated as Lot No. 5 therein was to be apportioned to the heirs of Lilia since the latter already died on April 9, 1976; Lilia was succeeded by her heirs, her husband Maximo and their children, one of whom is herein petitioner; that petitioner filed the complaint as a co-owner of Lot No. 5; that sometime in 1980, respondents Mario and Margie Lauron, through the tolerance of the heirs of Lilia, constructed a residential building of strong materials on the northwest portion of Lot No. 5 covering an area of one hundred square meters; that the heirs of Lilia made various demands for respondents to vacate the premises and even exerted earnest efforts to compromise with them but the same was unavailing; and that petitioner reiterated the demand on respondents to vacate the subject lot on January 15, 2003, but respondents continued to unlawfully withhold such possession. In their Answer,7 respondents claimed that petitioner had no cause of action against them, since they are not the owners of the residential building standing on petitioner's lot, but Mildred Kascher (Mildred), sister of respondent Margie, as shown by the tax declaration in Mildred's name; 8 that in 1992, Mildred had already paid P10,000.00 as downpayment for the subject lot to Teresito Castigador;9 that there were several instances that the heirs of Lilia offered the subject Lot 183 for sale to respondents and Mildred and demanded payment, however, the latter was only interested in asking money without any intention of delivering or registering the subject lot; that in 1998, Maximo, petitioner's father, and respondent Margie entered into an amicable settlement10 before the Barangay Lupon of Poblacion Ilawod, Lambunao, Iloilo wherein Maximo offered the subject lot to the spouses Alfons and Mildred Kascher in the amount of P90,000.00 with the agreement that all documents related to the transfer of the subject lot to Maximo and his children be prepared by Maximo, but the latter failed to comply; and that the amicable settlement should have the force and effect of a final judgment of a court, hence, the instant suit is barred by prior judgment. Respondents counterclaimed for damages. On November 14, 2003, the MTC rendered its Decision,11 the dispositive portion of which reads: WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of the plaintiff ordering the defendants: 1. To vacate the lot in question and restore possession to the plaintiff; 2. To pay plaintiff in the reduced amount of TWENTY THOUSAND PESOS (P20,000.00) as Atty's fees, plus ONE THOUSAND (P1,000.00) per Court appearance;

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3. To pay plaintiff reasonable compensation for the use of the lot in question ONE THOUSAND (P1,000.00) pesos yearly counted from the date of demand; 4. To pay the cost of litigation. No award of moral and exemplary damages. Defendants' counterclaim is hereby dismissed for lack of sufficient evidence.12 The MTC found that from the allegations and evidence presented, it appeared that petitioner is one of the heirs of Lilia Castigador Catedrilla, the owner of the subject lot and that respondents are occupying the subject lot; that petitioner is a party who may bring the suit in accordance with Article 487 13 of the Civil Code; and as a co-owner, petitioner is allowed to bring this action for ejectment under Section 1, Rule 7014 of the Rules of Court; that respondents are also the proper party to be sued as they are the occupants of the subject lot which they do not own; and that the MTC assumed that the house standing on the subject lot has been standing thereon even before 1992 and only upon the acquiescence of the petitioner and his predecessor-in-interest. The MTC found that respondents would like to focus their defense on the ground that Mildred is an indispensable party, because she is the owner of the residential building on the subject lot and that there was already a perfected contract to sell between Mildred and Maximo because of an amicable settlement executed before the Office of the Punong Barangay. However, the MTC, without dealing on the validity of the document and its interpretation, ruled that it was clear that respondent Margie was representing her parents, Mr. and Mrs. Bienvenido Loraa, in the dispute presented with the Punong Barangay. It also found that even Mildred's letter to petitioner's father Maximo recognized the title of petitioner's father over the subject lot and that it had not been established by respondents if Teresito Castigador, the person who signed the receipt evidencing Mildred's downpayment of P10,000.00 for the subject lot, is also one of the heirs of Lilia. The MTC concluded that respondents could not be allowed to deflect the consequences of their continued stay over the property, because it was their very occupation of the property which is the object of petitioner's complaint; that in an action for ejectment, the subject matter is material possession or possession de facto over the real property, and the side issue of ownership over the subject lot is tackled here only for the purpose of determining who has the better right of possession which is to prove the nature of possession; that possession of Lot 183 should be relinquished by respondents to petitioner, who is a co-owner, without foreclosing other remedies that may be availed upon by Mildred in the furtherance of her supposed rights. Respondents filed their appeal with the Regional Trial Court (RTC) of Iloilo City, raffled off to Branch 26. On March 22, 2005, the RTC rendered its Order, 15 the dispositive portion of which reads: WHEREFORE, circumstances herein-above considered, the decision of the court dated November 14, 2003 is hereby AFFIRMED, except for the payment of P20,000.00 as attorney's fees. SO ORDERED.16 The RTC found that petitioner, being one of the co-owners of the subject lot, is the proper party in interest to prosecute against any intruder thereon. It found

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that the amicable settlement signed and executed by the representatives of the registered owner of the premises before the Lupon is not binding and unenforceable between the parties. It further ruled that even if Mildred has her name in the tax declaration signifying that she is the owner of the house constructed on the subject lot, tax declarations are not evidence of ownership but merely issued to the declarant for purposes of payment of taxes; that she cannot be considered as an indispensable party in a suit for recovery of possession against respondents; that Mildred should have intervened and proved that she is an indispensable party because the records showed that she was not in actual possession of the subject lot. The RTC deleted the attorney's fees, since the MTC decision merely ordered the payment of attorney's fees without any basis. Respondents' motion for reconsideration was denied in an Order 17 dated June 8, 2005. Dissatisfied, respondents filed with the CA a petition for review. Petitioner filed his Comment thereto. On February 28, 2007, the CA issued its assailed decision, the dispositive portion of which reads: IN LIGHT OF ALL THE FOREGOING, this petition for review is GRANTED. The assailed decision of the Regional Trial Court, Br. 26, Iloilo City, dated March 22, 2005, that affirmed the MTC Decision dated November 14, 2003, is REVERSED and SET ASIDE. Consequently, the complaint for ejectment of the respondent is DISMISSED.18 The CA found that only petitioner filed the case for ejectment against respondents and ruled that the other heirs should have been impleaded as plaintiffs citing Section 1,19 The CA also ruled that while petitioner asserted that the proper parties to be sued are the respondents as they are the actual possessors of the subject lot and not Mildred, petitioner still cannot disclaim knowledge that it was to Mildred to whom his co-owners offered the property for sale, thus, he knew all along that the real owner of the house on the subject lot is Mildred and not respondents; that Mildred even paid P10,000.00 out of the total consideration for the subject lot and required respondents' relatives to secure the documents that proved their ownership over the subject lot; that Maximo and Mildred had previously settled the matter regarding the sale of the subject lot before the Barangay as contained in an amicable settlement signed by Maximo and respondent Margie. Thus, the question in this case extends to mere possessory rights and non-inclusion of indispensable parties made the complaint fatally defective. From the facts obtaining in this case, ejectment being a summary remedy is not the appropriate action to file against the alleged deforciant of the property. Hence, this petition for review wherein petitioner raises the following issues: I THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION WHEN IT HELD THAT THE DECISION OF THE TRIAL COURT WAS A NULLITY . II

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THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION WHEN IT HELD THAT PETITIONER KNEW ALL ALONG THAT MILDRED KASCHER, AND NOT RESPONDENTS, WERE THE REAL OWNERS OF THE RESIDENTIAL BUILDING.21 The CA found that petitioner's co-heirs to the subject lot should have been impleaded as co-plaintiffs in the ejectment case against respondents, since without their presence, the trial court could not validly render judgment and grant relief in favor of petitioner. We do not concur. Petitioner can file the action for ejectment without impleading his co-owners. In Wee v. De Castro,22 wherein petitioner therein argued that the respondent cannot maintain an action for ejectment against him, without joining all his co-owners, we ruled in this wise: Article 487 of the New Civil Code is explicit on this point: ART. 487. Any one of the co-owners may bring an action in ejectment. This article covers all kinds of action for the recovery of possession, i.e., forcible entry and unlawful detainer (accion interdictal), recovery of possession (accion publiciana), and recovery of ownership (accion de reivindicacion). As explained by the renowned civilest, Professor Arturo M. Tolentino: A co-owner may bring such an action, without the necessity of joining all the other co-owners as co-plaintiffs, because the suit is deemed to be instituted for the benefit of all. If the action is for the benefit of the plaintiff alone, such that he claims possession for himself and not for the co-ownership, the action will not prosper. In the more recent case of Carandang v. Heirs of De Guzman, this Court declared that a co-owner is not even a necessary party to an action for ejectment, for complete relief can be afforded even in his absence, thus: In sum, in suits to recover properties, all co-owners are real parties in interest. However, pursuant to Article 487 of the Civil Code and the relevant jurisprudence, any one of them may bring an action, any kind of action for the recovery of co-owned properties. Therefore, only one of the co-owners, namely the co-owner who filed the suit for the recovery of the co-owned property, is an indispensable party thereto. The other co-owners are not indispensable parties. They are not even necessary parties, for a complete relief can be afforded in the suit even without their participation, since the suit is presumed to have been filed for the benefit of all co-owners.23 In this case, although petitioner alone filed the complaint for unlawful detainer, he stated in the complaint that he is one of the heirs of the late Lilia Castigador, his mother, who inherited the subject lot, from her parents. Petitioner did not claim exclusive ownership of the subject lot, but he filed the complaint for the purpose of recovering its possession which would redound to the benefit of the coowners. Since petitioner recognized the existence of a co-ownership, he, as a coowner, can bring the action without the necessity of joining all the other coowners as co-plaintiffs. Petitioner contends that the CA committed a reversible error in finding that Mildred Kascher is an indispensable party and that her non-inclusion as a party

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defendant in the ejectment case made the complaint fatally defective, thus, must be dismissed. We agree with petitioner. The CA based its findings that Mildred is an indispensable party because it found that petitioner knew all along that Mildred is the owner of the house constructed on the subject lot as shown in the affidavits24 of Maximo and petitioner stating that petitioner's co-owners had offered for sale the subject lot to Mildred, and that Maximo, petitioner's father, and Mildred had previously settled before the Barangay the matter regarding the sale of the subject lot to the latter as contained in the amicable settlement. We find that the affidavits of Maximo and petitioner merely stated that the lot was offered for sale to Mildred, but nowhere did it admit that Mildred is the owner of the house constructed on the subject lot. Also, it appears that the amicable settlement25 before the Barangay wherein it was stated that Maximo will sell the subject lot to the spouses Alfons and Mildred Kascher was signed by Maximo on behalf of his children and respondent Margie on behalf of Mr. and Mrs. Bienvenido Loraa. Thus, there is no basis for the CA's conclusion that it was Mildred and Maximo who had previously settled the sale of the subject lot. In ejectment cases, the only issue to be resolved is who is entitled to the physical or material possession of the property involved, independent of any claim of ownership set forth by any of the party-litigants.31 In an action for unlawful detainer, the real party-in-interest as party-defendant is the person who is in possession of the property without the benefit of any contract of lease and only upon the tolerance and generosity of its owner. 32 Well settled is the rule that a person who occupies the land of another at the latters tolerance or permission, without any contract between them, is bound by an implied promise that he will vacate the same upon demand, failing which a summary action for ejectment is the proper remedy against him.33 His status is analogous to that of a lessee or tenant whose term of lease has expired but whose occupancy continued by tolerance of the owner.34 Here, records show that the subject lot is owned by petitioner's mother, and petitioner, being an heir and a co-owner, is entitled to the possession of the subject lot. On the other hand, respondent spouses are the occupants of the subject lot which they do not own. Respondents' possession of the subject lot was without any contract of lease as they failed to present any, thus lending credence to petitioner's claim that their stay in the subject lot is by mere tolerance of petitioner and his predecessors.1wphi1 It is indeed respondents spouses who are the real parties-in-interest who were correctly impleaded as defendants in the unlawful detainer case filed by petitioner. WHEREFORE, premises considered, the petition is hereby GRANTED. The Decision dated February 28, 2007 and the Resolution dated July 11, 2007 of the Court of Appeals are hereby REVERSED and SET ASIDE. The Order dated March 22, 2005 of the Regional Trial Court, Branch 26, Iloilo City, in Civil Case No. 04-27978, is hereby REINSTATED. SO ORDERED. 5) G.R. No. 180269 ,February 20, 2013, Casilang, Sr. vs. Casilang, et al. -

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JOSE Z. CASILANG, SR., substituted by his heirs, namely: FELICIDAD CUD lAMA T VDA. DE CASILANG, JOSE C. CASILANG, JR., RICARDO C. CASILANG, MARIA LOURDES C. CASILANG, CHRISTOPHER C. CASILANG, BEN C. CASILANG, DANTE C. CASILANG, GREGORIO C. CASILANG, HERALD C. CASILANG; and FELICIDAD Z. CASILANG, MARCELINA Z. CASILANG, JACINTA Z. CASILANG, BONIFACIO Z. CASILANG, LEONORA Z. CASILANG, and FLORA Z. CASILANG VS. ROSARIO Z. CASILANG-DIZON, MARIO A. CASILANG, ANGELO A. CASILANG, RODOLFO A. CASILANG, and ATTY. ALICIA B. FABIA, in her capacity as Clerk of Court and Ex-Officio Sheriff of Pangasinan and/or her duly authorized representative. REYES, J.: Before us is a petition for review of the Decision 1 dated July 19, 2007 of the Court of Appeals (CA) in CA-G.R. CV No. 79619, which reversed and set aside the Decision2 dated April 21, 2003 of the Regional Trial Court (RTC) of Dagupan City, Branch 41, in Civil Case No. 98-02371-D. Antecedent Facts The late spouses Liborio Casilang (Liborio) and Francisca Zacarias (Francisca) had eight (8) children, namely: Felicidad Casilang (Felicidad), Ireneo Casilang (Ireneo), Marcelina Casilang (Marcelina), Jacinta Casilang (Jacinta), Bonifacio Casilang (Bonifacio), Leonora Casilang (Leonora), Jose Casilang (Jose) and Flora Casilang (Flora). Liborio died intestate on October 11, 1982 at the age of 83, followed not long after by his wife Francisca on December 25, 1982. Their son Bonifacio also died in 1986, survived by his child Bernabe Casilang (Bernabe), while son Ireneo died on June 11, 1992, survived by his four (4) children, namely: Mario Casilang (Mario), Angelo Casilang (Angelo), Rosario Casilang-Dizon (Rosario) and Rodolfo Casilang (Rodolfo), herein respondents. The estate of Liborio, which left no debts, consisted of three (3) parcels of land located in Barangay Talibaew, Calasiao, Pangasinan, namely: (1) Lot No. 4676, with an area of 4,164 square meters; (2) Lot No. 4704, containing 1,164 sq m; and (3) Lot No. 4618, with 897 sq m. On May 26, 1997, respondent Rosario filed with the Municipal Trial Court (MTC) of Calasiao, Pangasinan a complaint for unlawful detainer, docketed as Civil Case No. 847, to evict her uncle, petitioner Jose from Lot No. 4618 . Rosario claimed that Lot No. 4618 was owned by her father Ireneo, as evidenced by Tax Declaration (TD) No. 555 issued in 1994 under her fathers name. On April 3, 1997, the respondents executed a Deed of Extrajudicial Partition with Quitclaim3 whereby they adjudicated Lot No. 4618 to themselves. In the same instrument, respondents Mario, Angelo and Rodolfo renounced their respective shares in Lot No. 4618 in favor of Rosario. In his Answer, Jose raised the defense that he was the "lawful, absolute, exclusive owner and in actual possession" of the said lot, and that he acquired the same "through intestate succession from his late father." 4 For some reason, however, he and his lawyer, who was from the Public Attorneys Office, failed to appear at the scheduled pre-trial conference, and Jose was declared in default; thus, the adverse judgment against him.5 On February 18, 1998, the MTC rendered judgment finding Rosario to be the owner of Lot No. 4618, and ordering Jose to remove his house, vacate Lot No. 4618, and pay Rosario P500.00 in monthly rentals from the filing of the complaint until she was placed in possession, plus attorneys fees of P5,000.00, litigation

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expenses and costs. On March 23, 1998, the MTC issued a writ of execution; and on August 28, 1998, a Writ of Demolition6 was issued. On June 2, 1998, the petitioners, counting 7 of the 8 children of Liborio and Francisca,7 filed with the RTC of Dagupan City a Complaint,8 docketed as Civil Case No. 98-02371-D for "Annulment of Documents, Ownership and Peaceful Possession with Damages" against the respondents. On June 10, 1998, the petitioners moved for the issuance of a writ of preliminary injunction or temporary restraining order, which the RTC however denied on June 23, 1998. Among the documents sought to be annulled was the 1997 Deed of Extrajudicial Partition executed by Ireneos children over Lot No. 4618, as well as TD No. 555, and by necessary implication its derivatives, TD No. 15177 (for the lot) and TD No. 15176 (for the house), both of which were issued in 1998 in the name of Rosario Casilang-Dizon.9 The petitioners alleged in their complaint that all eight (8) children of Liborio entered into a verbal partition of his estate, pursuant to which Jose was allotted Lot No. 4618 as his share; that Ireneo never claimed ownership of Lot No. 4618, nor took possession of it, because his share was the southwestern 1/5 portion of Lot No. 4676, containing an area of 1,308 sq m, 10 of which he took exclusive possession during his lifetime; that Jose has always resided in Lot No. 4618 since childhood, where he built his familys semi-concrete house just a few steps away from his parents old bamboo hut; that he took in and cared for his aged parents in his house until their deaths in 1982; that one of his children has also built a house on the lot.11 Jose, said to be the most educated of the Casilang siblings, worked as an insurance agent.12 The complete disposition of the intestate estate of Liborio per the parties verbal partition appears as follows: 1. Lot No. 4676, with 4,164 sq m, declared under TD No. 534 in Liborios name,13 was verbally partitioned among Marcelina (236 sq m), Leonora (1,965 sq m), Flora (655 sq m), and Ireneo, represented by his children, the herein respondents-defendants (1,308 sq m), as shown in a Deed of Extrajudicial Partition with Quitclaim dated January 8, 1998, subsequently executed by all the Casilang siblings and their representatives. 2. Lot No. 4704, with 1,164 sq m, declared under TD No. 276 in Liborios name,14 was divided among Jacinta and Bonifacio, who died in 1986 and is now represented by his son Bernabe; and 3. Lot No. 4618, containing 897 sq m, declared since 1994 under TD No. 555 in Ireneos name,15 is now the subject of the controversy below. Jose insists that he succeeded to it per verbal partition, and that he and his family have always occupied the same peacefully, adversely and exclusively even while their parents were alive.16 For her part, Rosario alleged in her answer with counterclaim,17 which she filed on September 15, 1998, that: a) She is the actual and lawful owner of Lot No. 4618 with an area of 897 square meters, having acquired the same by way of a Deed of Extra judicial Partition with Quitclaim dated 3 April 1997 which was duly executed among herein Appellant ROSARIO and her brothers, namely, MARIO, ANGELO and RODOLFO, all surnamed CASILANG; b) Her ownership over subject property could be traced back to her late father IR[E]NEO which the latter inherited by way of intestate succession

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from his deceased father LIBORIO sometime in 1992; that the residential house described in herein Appellee JOSEs complaint is an ill egal structure built by him in 1997 without her (ROSARIOs) knowledge and consent; that in fact, an ejectment suit was filed against Appellee JOSE with the Municipal Trial Court in Calasiao, Pangasinan in Civil Case No. 847; c) The subject lot is never a portion of Appellee JOSEs share from the intestate of his deceased father, LIBORIO; that on the contrary, the lot is his deceased brother IR[E]NEOs share from the late LIBORIOs intestate estate; that in fact, the property has long been declared in the name of the late IRENEO as shown by Tax Declaration No. 555 long before his children ROSARIO DIZON, MARIO, ANGELO and RODOLFO, all surnamed CASILANG, executed the Deed of Partition dated 18 February 1998; that Appellee JOSE had actually consumed his shares which he inherited from his late father, and after a series of sales and dispositions of the same made by him, he now wants to take Appellants property; d) Appellee JOSE is never the rightful owner of the lot in question and has not shown any convincing proof of his supposed ownership; that the improvements introduced by him, specifically the structures he cited are the subject of a Writ of Demolition dated 28 August 1998 pursuant to the Order dated 17 August 1998 of the MTC of Calasiao, Pangasinan; e) No protestation or objection was ever made by Appellee JOSE in Civil Case No. 847 (Unlawful Detainer case) where he was the defendant; that the truth was that his possession of the subject property was upon the tolerance and benevolence of his late brother IRE NEO during the latters lifetime and that Appellant ROSARIO; f) The RTC Clerk of Court and Ex-officio Provincial Sheriff would just be doing her job if she and her deputies would implement the writ of execution/demolition issued by the MTC of Calasiao, Pangasinan since it is its ministerial duty to do so; g) The Appellees have no cause of action; not having shown in their complaint the basis, the reason and the very core of their claim as to why the questioned document should be nullified.18 (Citation omitted) In their reply19 to Rosarios aforesaid answer, the petitioners asserted that the MTC committed a grave error in failing to consider a material fact-that Jose had long been in prior possession under a claim of title which he obtained by partition. At the pre-trial conference in Civil Case No. 98-02371-D, the parties entered into the following stipulations: 1. That the late LIBORIO is the father of FELICIDAD, MARCELINA, JUANITA, LEONORA, FLORA and IRENEO, all surnamed CASILANG; 2. That the late LIBORIO died in 1982; That the late LIBORIO and his family resided on Lot [No.] 4618 up to his death in 1982; That the house of the late LIBORIO is located on Lot [No.] 4618; 3. That Plaintiff JOSE used to reside on the lot in question because there was a case for ejectment filed against him;

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4. That the house which was demolished is the family house of the late LIBORIO and FRANCISCA ZACARIAS with the qualification that it was given to the defendants; 5. That the action involves members of the same family; and 6. That no earnest efforts were made prior to the institution of the case in court.20 Ruling of the RTC After a full trial on the merits, the RTC in its Decision 21 dated April 21, 2003 decreed as follows: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs and against the defendants as follows: 1. Declaring the Deed of Extrajudicial Partition with Quitclaim dated April 3, 1997 null and void; 2. Declaring plaintiff Jose Z. Casilang Sr. as the lawful owner and possessor of the subject Lot No. 4618 and as such, entitled to the peaceful possession of the same; 3. Ordering the defendants to pay to plaintiff Jose Z. Casilang Sr. attorneys fees in the amount of P20,000.00 and litigation expenses in the amount of P5,000.00, and to pay the costs of suit. SO ORDERED.22 The RTC affirmed Joses ownership and possession of Lot No. 4618 by virtue of the oral partition of the estate of Liborio by all the siblings. In the Deed of Extrajudicial Partition with Quitclaim23 dated January 8, 1998, subsequently executed by all the eight (8) Casilang siblings and their legal representativeswith Ireneo represented by his four (4) children, and Bonifacio by his son Bernabepetitioners Jose, Felicidad, Jacinta and Bernabe, acknowledged that they had already received their respective shares of inheritance in advance,"24 and therefore, renounced their claims over Lot No. 4676 in favor of co-heirs Marcelina, Leonora, Flora and Ireneo, as follows: We hereby RENOUNCED, WAIVED AND QUITCLAIM, all our rights, interests and participations over the WHOLE parcel of land [Lot No. 4676], left by the late, LIBORIO CASILANG, in favor of our coheirs, namely: MARCELINA Z. CASILANG-PARAYNO, LEONORA Z. CASILANG-SARMIENTO, FLORA Z. CASILANG, MARIO A. CASILANG, ANGELO A. CASILANG, ROSARIO A. CASILANGDIZON AND RODOLFO A. CASILANG.25 Thus, Jose expressly renounced his share in Lot No. 4676, which has an area of 4,164 sq m, because he had already received in advance his share in his fathers estate, Lot No. 4618 with 897 sq m: To the mind of the court, Jose Casilang could have not [sic] renounced and waived his rights and interests over Lot [No.] 4676 if he believes that Lot [No.] 4618 is not his, while the other lot, Lot [No.] 470[4], was divided between sister Jacinta Casilang and brother Bonifacio Casilang[,] Sr., who was represented by his son. In the same [way] as testified to by plaintiffs Felicidad Casilang and Jacinta Casilang, they signed the Deed of Extrajudicial Partition with Quitclaim

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wherein they waived and renounced their rights and interests over Lot [No.] 4676 because they have already received their share, which is Lot [No.] 470[4]. 26 The RTC found baseless the claim of Rosario that Lot No. 4618 was an inheritance of her father Ireneo considering that a tax declaration is not conclusive proof of ownership. The RTC even noted that the tax declaration of Ireneo started only in 1994, although he had been dead since 1992. "Such being the case, the heirs of Ir[e]neo Casilang has [sic] no basis in adjudicating unto themselves Lot No. 4618 and partitioning the same by executing the Deed of Extrajudicial Partition with Quitclaim."27 Appeal to the CA Undeterred, Rosario appealed to the CA averring that: (1) the lower court erred in declaring the Deed of Extrajudicial Partition with Quitclaim dated April 3, 1997 as null and void; and (2) the lower court erred in declaring Jose as the lawful owner and possessor of the subject Lot No. 4618.28 In the now assailed decision, the CA reversed the RTC by relying mainly on the factual findings and conclusions of the MTC in Civil Case No. 847, viz: Per the records, the above described property was subject of Civil Case No. 847 decided by the MTC of Calasiao, First Judicial Region, Province of Pangasinan which rendered a judgment, supra, in favor of Appellant ROSARIO ordering herein Appellee JOSE and all persons claiming rights under him to vacate the land of Appellant ROSARIO. It was found by the MTC that the latter is the owner of the subject parcel of land located at Talibaew, Calasiao, Pangasinan; that the former owner of the land is the late IRENEO (who died on 11 June 1992), father of Appellant ROSARIO; that Extra Judicial Partition with Quitclaim was executed by and among the heirs of the late IRENEO; that MAURO [sic], ANGELO and RODOLFO, all surnamed CASILANG waived and quitclaimed their respective shares over the subject property in favor of Appellant ROSARIO; that Appellee JOSE was allowed by the late IRENEO during his lifetime to occupy a portion of the land without a contract of lease and no rentals being paid by the former; that Appellant ROSARIO allowed Appellee JOSE to continue occupying the land after the Extra Judicial Partition with Quitclaim was executed.29 Moreover, noting that the decision in Civil Case No. 847 in favor of Rosario was issued on February 18, 1998 while the petitioners complaint in Civil Case No. 98-02371-D was filed on June 2, 1998, the CA concluded that the latter case was a mere afterthought: If the latter has really a strong and valid reason to question the validity of the Deed of Extra Judicial Partition with Quitclaim, supra, he could have done it soon after the said Deed was executed on 3 April 1997. However, curiously enough, it was only when the MTC ordered his eviction from the subject property that he decided to file the instant case against the Appellants. 30 Petition for Review in the Supreme Court Now in this petition for review on certiorari, petitioners maintain that: IN UPHOLDING THE LEGALITY [OF] THE DEED OF EXTRAJUDICIAL PARTITION AND QUITCLAIM DATED APRIL 3, 1997, THE HONORABLE COURT OF APPEALS GROSSLY VIOLATED THE SUBSTANTIVE RIGHT OF JOSE Z. CASILANG, SR. AS DIRECT COMPULSORY HEIR.31

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Our Ruling and Discussions There is merit in the petition. Inferior courts are empowered to rule on the question of ownership raised by the defendant in an ejectment suit, but only to resolve the issue of possession; its determination is not conclusive on the issue of ownership. It is well to be reminded of the settled distinction between a summary action of ejectment and a plenary action for recovery of possession and/or ownership of the land. What really distinguishes an action for unlawful detainer from a possessory action (accion publiciana) and from a reinvindicatory action (accion reinvindicatoria) is that the first is limited to the question of possession de facto. Unlawful detainer suits (accion interdictal) together with forcible entry are the two forms of 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 reinvindicatoria or the action to recover ownership which also includes recovery of possession, make up the three kinds of actions to judicially recover possession.32 Under Section 3 of Rule 70 of the Rules of Court, the Summary Procedure governs the two forms of ejectment suit, the purpose being 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 and its determination on the ownership issue is not conclusive. 33 As thus provided in Section 16 of Rule 70: Sec. 16. Resolving defense of ownership.When the defendant raises the defense of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession. It is apropos, then, to note that in contrast to Civil Case No. 847, which is an ejectment case, Civil Case No. 98-02371-D is for "Annulment of Documents, Ownership and Peaceful Possession;" it is an accion reinvindicatoria, or action to recover ownership, which necessarily includes recovery of possession 34 as an incident thereof. 6) G.R. No. 190071, August 15, 2012, Union Bank of the Phil. Vs. Maunlad Homes, Inc. et al. UNION BANK OF THE PHILIPPINES vs. MAUNLAD HOMES, INC. and all other persons or entities claiming rights under it . DECISION BRION, J.: Before the Court is the petition for review on certiorari1 under Rule 45 of the Rules of Court filed by petitioner Union Bank of the Philippines (Union Bank), assailing the decision dated October 28, 2009 2 of the Court of Appeals (CA) in CA-G.R. SP No. 107772. THE FACTS

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Union Bank is the owner of a commercial complex located in Malolos, Bulacan, known as the Maunlad Shopping Mall. Sometime in August 2002, Union Bank, as seller, and respondent Maunlad Homes, Inc. (Maunlad Homes), as buyer, entered into a contract to sell3 involving the Maunlad Shopping Mall. The contract set the purchase price at P151 million, P2.4 million of which was to be paid by Maunlad Homes as down payment payable on or before July 5, 2002, with the balance to be amortized over the succeeding 180-month period.4 Under the contract, Union Bank authorized Maunlad Homes to take possession of the property and to build or introduce improvements thereon. The parties also agreed that if Maunlad Homes violates any of the provisions of the contract, all payments made will be applied as rentals for the use and possession of the property, and all improvements introduced on the land will accrue in favor of Union Bank. 5 In the event of rescission due to failure to pay or to comply with the terms of the contract, Maunlad Homes will be required to immediately vacate the property and must voluntarily turn possession over to Union Bank.6 When Maunlad Homes failed to pay the monthly amortization, Union Bank sent the former a Notice of Rescission of Contract7 dated February 5, 2003, demanding payment of the installments due within 30 days from receipt; otherwise, it shall consider the contract automatically rescinded. Maunlad Homes failed to comply. Hence, on November 19, 2003, Union Bank sent Maunlad Homes a letter demanding payment of the rentals due and requiring that the subject property be vacated and its possession turned over to the bank. When Maunlad Homes continued to refuse, Union Bank instituted an ejectment suit before the Metropolitan Trial Court (MeTC) of Makati City, Branch 64, on February 19, 2004. Maunlad Homes resisted the suit by claiming, among others, that it is the owner of the property as Union Bank did not reserve ownership of the property under the terms of the contract. 8 By virtue of its ownership, Maunlad Homes claimed that it has the right to possess the property. On May 18, 2005, the MeTC dismissed Union Banks ejectment comp laint.9 It found that Union Banks cause of action was based on a breach of contract and that both parties are claiming a better right to possess the property based on their respective claims of ownership of the property. The MeTC ruled that the appropriate action to resolve these conflicting claims was an accion reivindicatoria, over which it had no jurisdiction. On appeal, the Regional Trial Court (RTC) of Makati City, Branch 139, affirmed the MeTC in its decision dated July 17, 2008; 10 it agreed with the MeTC that the issues raised in the complaint extend beyond those commonly involved in an unlawful detainer suit. The RTC declared that the case involved a determination of the rights of the parties under the contract. Additionally, the RTC noted that the property is located in Malolos, Bulacan, but the ejectment suit was filed by Union Bank in Makati City, based on the contract stipulation that "the venue of all suits and actions arising out or in connection with the Contract to Sell shall be in Makati City."11 The RTC ruled that the proper venue for the ejectment action is in Malolos, Bulacan, pursuant to the second paragraph of Section 1, Rule 4 of the Rules of Court, which states: Section 1. Venue of real actions. - Actions affecting title to or possession of real property, or interest therein, shall be commenced and tried in the proper court which has jurisdiction over the area wherein the real property involved, or a portion thereof, is situated. Forcible entry and detainer actions shall be commenced and tried in the municipal trial court of the municipality or city wherein the real property involved, or a portion thereof, is situated. [emphasis ours]

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The RTC declared that Union Bank cannot rely on the waiver of venue provision in the contract because ejectment is not an action arising out of or connected with the contract. Union Bank appealed the RTC decision to the CA through a petition for review under Rule 42 of the Rules of Court. The CA affirmed the RTC decision in its October 28, 2009 decision,12 ruling that Union Banks claim of possession is based on its claim of ownership which in turn is based on its interpretation of the terms and conditions of the contract, particularly, the provision on the consequences of Maunlad Homes breach of contract. The CA determined that Union Banks cause of action is premised on the interpretation and enforcement of the contract and the determination of the validity of the rescission, both of which are matters beyond the jurisdiction of the MeTC. Therefore, it ruled that the dismissal of the ejectment suit was proper. The CA, however, made no further ruling on the issue of venue of the action. From the CAs judgment, Union Bank appealed to the Court by filing the present petition for review on certiorari under Rule 45 of the Rules of Court. THE PARTIES ARGUMENTS Union Bank disagreed with the CAs finding that it is claiming ownership over the property through the ejectment action. It claimed that it never lost ownership over the property despite the execution of the contract, since only the right to possess was conceded to Maunlad Homes under the contract; Union Bank never transferred ownership of the property to Maunlad Homes. Because of Maunlad Homes failure to comply with the terms of the contract, Union Bank believes that it rightfully rescinded the sale, which rescission terminated Maunlad Homes right to possess the subject property. Since Maunlad Homes failed to turn over the possession of the subject property, Union Bank believes that it correctly instituted the ejectment suit. The Court initially denied Union Banks petition in its Resolution dated March 17, 2010.13 Upon motion for reconsideration filed by Union Bank, the Court set aside its Resolution of March 17, 2010 (in a Resolution dated May 30, 2011 14) and required Maunlad Homes to comment on the petition. Maunlad Homes contested Union Banks arguments, invoking the rulings of the lower courts. It considered Union Banks action as based on the propriety of the rescission of the contract, which, in turn, is based on a determination of whether Maunlad Homes indeed failed to comply with the terms of the contract; the propriety of the rescission, however, is a question that is within the RTCs jurisdiction. Hence, Maunlad Homes contended that the dismissal of the ejectment action was proper. THE COURTS RULING We find the petition meritorious. The authority of the MeTC to interpret contracts in an unlawful detainer action In any case involving the question of jurisdiction, the Court is guided by the settled doctrine that the jurisdiction of a court is determined by the nature of the action pleaded by the litigant through the allegations in his complaint.15

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Unlawful detainer is an action to recover possession of real property from one who unlawfully withholds possession after the expiration or termination of his right to hold possession under any contract, express or implied. The possession of the defendant in unlawful detainer is originally legal but became illegal due to expiration or termination of the right to possess. 16 Under Section 1, Rule 70 of the Rules of Court, the action must be filed "within one (1) year after the unlawful deprivation or withholding of possession." Thus, to fall within the jurisdiction of the MeTC, the complaint must allege that 1. the defendant originally had lawful possession of the property, either by virtue of a contract or by tolerance of the plaintiff; 2. eventually, the defendants possession of the property becameillegal or unlawful upon notice by the plaintiff to defendant of the expiration or the termination of the defendants right of possession; 3. thereafter, the defendant remained in possession of the property and deprived the plaintiff the enjoyment thereof; and 4. within one year from the unlawful deprivation or withholding of possession, the plaintiff instituted the complaint for ejectment.17 Contrary to the findings of the lower courts, all four requirements were alleged in Union Banks Complaint. Union Bank alleged that Maunlad Homes "maintained possession of the subject properties" pursuant to the Contract to Sell. 18 Maunlad Homes, however, "failed to faithfully comply with the terms of payment," prompting Union Bank to "rescind the Contract to Sell in a Notice of Rescission dated February 5, 2003."19 When Maunlad Homes "refused to turn over and vacate the subject premises,"20 Union Bank sent another Demand Letter on November 19, 2003 to Maunlad Homes requiring it (1) "to pay the equivalent rentals-in-arrears as of October 2003 in the amount of P15,554,777.01 and monthly thereafter until the premises are fully vacated and turned over" to Union Bank, and (2) to vacate the property peacefully and turn over possession to Union Bank.21 As the demand went unheeded, Union Bank instituted an action for unlawful detainer before the MeTC on February 19, 2004, within one year from the date of the last demand. These allegations clearly demonstrate a cause of action for unlawful detainer and vested the MeTC jurisdiction over Union Banks action. Maunlad Homes denied Union Banks claim that its possession of the property had become unlawful. It argued that its failure to make payments did not terminate its right to possess the property because it already acquired ownership when Union Bank failed to reserve ownership of the property under the contract. Despite Maunlad Homes claim of ownership of the property, the Court rules that the MeTC retained its jurisdiction over the action; a defendant may not divest the MeTC of its jurisdiction by merely claiming ownership of the property.22 Under Section 16, Rule 70 of the Rules of Court, "when the defendant raises the defense of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession." Section 18, Rule 70 of the Rules of Court, however, states that "the judgment x x x shall be conclusive with respect to the possession only and shall in no wise bind the title or affect the ownership of the land or building." The authority granted to the MeTC to preliminarily resolve the issue of ownership to determine the issue of possession ultimately allows it to interpret and enforce the contract or agreement between the plaintiff and

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the defendant. To deny the MeTC jurisdiction over a complaint merely because the issue of possession requires the interpretation of a contract will effectively rule out unlawful detainer as a remedy. As stated, in an action for unlawful detainer, the defendants right to possess the property may be by virtue of a contract, express or implied; corollarily, the termination of the defendants right to possess would be governed by the terms of the same contract. Interpretation of the contract between the plaintiff and the defendant is inevitable because it is the contract that initially granted the defendant the right to possess the property; it is this same contract that the plaintiff subsequently claims was violated or extinguished, terminating the defendants right to possess. We ruled in Sps. Refugia v. CA23 that where the resolution of the issue of possession hinges on a determination of the validity and interpretation of the document of title or any other contract on which the claim of possession is premised, the inferior court may likewise pass upon these issues. The MeTCs ruling on the rights of the parties based on its interpretation of their contract is, of course, not conclusive, but is merely provisional and is binding only with respect to the issue of possession. Thus, despite the CAs opinion that Union Banks "case involves a determination of the rights of the parties under the Contract to Sell," 24 it is not precluded from resolving this issue. Having acquired jurisdiction over Union Banks action, the MeTC can resolve the conflicting claims of the parties based on the facts presented and proved. The right to possess the property was extinguished when the contract to sell failed to materialize Maunlad Homes acquired possession of the property based on its contract with Union Bank. While admitting that it suspended payment of the installments, 25 Maunlad Homes contended that the suspension of payment did not affect its right to possess the property because its contract with Union Bank was one of sale and not to sell; hence, ownership of the property has been transferred to it, allowing it to retain possession notwithstanding nonpayment of installments. The terms of the contract, however, do not support this conclusion. Section 11 of the contract between Union Bank and Maunlad Homes provides that "upon payment in full of the Purchase Price of the Property x x x, the SELLER shall execute and deliver a Deed of Absolute Sale conveying the Property to the BUYER."26 "Jurisprudence has established that where the seller promises to execute a deed of absolute sale upon the completion by the buyer of the payment of the price, the contract is only a contract to sell." 27 The presence of this provision generally identifies the contract as being a mere contract to sell.28 After reviewing the terms of the contract between Union Bank and Maunlad Homes, we find no reasonable ground to exempt the present case from the general rule; the contract between Union Bank and Maunlad Homes is a contract to sell.1wphi1 In a contract to sell, the full payment of the purchase price is a positive suspensive condition whose non-fulfillment is not a breach of contract, but merely an event that prevents the seller from conveying title to the purchaser. "The nonpayment of the purchase price renders the contract to sell ineffective and without force and effect."29 Maunlad Homes act of withholding the installment payments rendered the contract ineffective and without force and effect, and ultimately deprived itself of the right to continue possessing Maunlad Shopping Mall.

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The propriety of filing the unlawful detainer action in Makati City pursuant to the venue stipulation in the contract Maunlad Homes questioned the venue of Union Banks unlawful detainer action which was filed in Makati City while the contested property is located in Malolos, Bulacan. Citing Section 1, Rule 4 of the Rules of Court, Maunlad Homes claimed that the unlawful detainer action should have been filed with the municipal trial court of the municipality or city where the real property involved is situated. Union Bank, on the other hand, justified the filing of the complaint with the MeTC of Makati City on the venue stipulation in the contract which states that "the venue of all suits and actions arising out of or in connection with this Contract to Sell shall be at Makati City."30 While Section 1, Rule 4 of the Rules of Court states that ejectment actions shall be filed in "the municipal trial court of the municipality or city wherein the real property involved x x x is situated," Section 4 of the same Rule provides that the rule shall not apply "where the parties have validly agreed in writing before the filing of the action on the exclusive venue thereof." Precisely, in this case, the parties provided for a different venue. In Villanueva v. Judge Mosqueda, etc., et al.,31 the Court upheld the validity of a stipulation in a contract providing for a venue for ejectment actions other than that stated in the Rules of Court. Since the unlawful detainer action is connected with the contract, Union Bank rightfully filed the complaint with the MeTC of Makati City.1wphi1 WHEREFORE, we hereby GRANT the petition and SET ASIDE the decision dated October 28, 2009 of the Court of Appeals in CA-G.R. SP No. 107772. Respondent Maunlad Homes, Inc. is ORDERED TO VACATE the Maunlad Shopping Mall, the property subject of the case, immediately upon the finality of this Decision. Respondent Maunlad Homes, Inc. is further ORDERED TO PAY the rentals-in-arrears, as well as rentals accruing in the interim until it vacates the property. The case is REMANDED to the Metropolitan Trial Court of Makati City, Branch 64, to determine the amount of rentals due. In addition to the amount determined as unpaid rent, respondent Maunlad Homes, Inc. is ORDERED TO PAY legal interest of six percent (6o/o) per annum, from November 19, 2003, when the demand to pay and to vacate was made, up to the finality of this Decision. Thereafter, an interest of twelve percent ( 12%) per annum shall be imposed on the total amount due until full payment is made. SO ORDERED. ARTURO D. BRION Associate Justice 7) G.R. No. 169793, September 15, 2006, Encarnacion vs. Amigo VICTORIANO M. ENCARNACION vs. NIEVES AMIGO.

YNARES-SANTIAGO, J.: This petition for review assails the June 30, 2005 Decision 1 of the Court of Appeals in CA-G.R. SP No. 73857, ordering the remand of Civil Case No. Br. 20-

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1194 to the Regional Trial Court of Cauayan, Isabela, Branch 20, for further proceedings. The antecedent facts are as follows: Petitioner Victoriano M. Encarnacion is the registered owner of Lot No. 2121-B-1, consisting of 100 square meters and covered by TCT No. T-256650; and Lot No. 2121-B-2 consisting of 607 square meters with TCT No. T-256651, located at District 1, National Hi-way, Cauayan, Isabela. Said two lots originally form part of Lot No. 2121, a single 707 square meter track of land owned by Rogelio Valiente who sold the same to Nicasio Mallapitan on January 18, 1982. On March 21, 1985, Mallapitan sold the land to Victoriano Magpantay. After the death of the latter in 1992, his widow, Anita N. Magpantay executed an Affidavit of Waiver 2 on April 11, 1995 waving her right over the property in favor of her son-in-law, herein petitioner, Victoriano Encarnacion. Thereafter, the latter caused the subdivision of the land into two lots3 and the issuance of titles in his name on July 18, 1996. 4 Respondent Nieves Amigo allegedly entered the premises and took possession of a portion of the property sometime in 1985 without the permission of the then owner, Victoriano Magpantay. Said occupation by respondent continued even after TCT Nos. T-256650 and T-256651 were issue to petitioner. Consequently, petitioner, through his lawyer sent a letter5 dated Febuary 1, 2001 demanding that the respondent vacate the subject property. As evidenced by the registry return receipt, the demand letter was delivered by registered mail to the respondent on February 12, 2001. Notwithstanding receipt of the demand letter, respondent still refused to vacate the subject property. Thereafter, on March 2, 2001, petitioner filed a complaint6 for ejectment, damages with injunction and prayer for restraining order with the Municipal Trial Court in Cities of Isabela which was docketed as CV-01-030. In his Answer, respondent alleged that he has been in actual possession and occupation of a portion of the subject land since 1968 and that the issuance of Free Patent and titles in the name of petitioner was tainted with irregularities.7 On October 24, 2001, the Municipal Trial Court in Cities rendered judgment, which reads: WHERE[FO]RE, there being a preponderance of evidence, a JUDGMENT is hereby rendered in favor of the plaintiff VICTORIANO M. ENCARNACION and against the defendant NIEVES AMIGOE (sic) as follows: a) ORDERING the defendant to vacate the portion of the parcels of land described in Transfer Certificates of Title Nos. T-256650 and T-256651 he is now occupying and surrender it to the plaintiff; b) ORDERING the defendant to pay the plaintiff the sum of FIVE THOUSAND PESOS (P5,000) as attorney's fees, and c) ORDERING the defendant to pay rentals equivalent [to] P500.00 per month from February, 2001 until the portion of the land occupied by him is surrendered to the plaintiff. COSTS against the defendant. SO ORDERED.8 On appeal, the Regional Trial Court of Cauayan, Isabela, Branch 20, ruled as follows:

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WHEREFORE, judgment is hereby rendered dismissing the case on the ground that as the Municipal Court had no jurisdiction over the case, this Court acquired no appellate jurisdiction thereof. Costs against plaintiff-appellee. SO ORDERED.9 Aggrieved, petitioner filed a petition for review10 under Rule 42 of the Rules of Court before the Court of Appeals which promulgated the assailed Decision remanding the case to the Regional Trial Court. The dispositive portion thereof reads: WHEREFORE, premises considered, this case is hereby REMANDED to Branch 20, Regional Trial Court of Cauayan, Isabela for further proceedings. No costs. SO ORDERED.11 Hence the present petition raising the sole issue: [WHETHER] THE COURT OF APPEALS ERRED IN HOLDING THAT THE PROPER ACTION IN THIS CASE IS ACCION PUBLICIANA AND NOT UNLAWFUL DETAINER AS DETERMINED BY THE ALLEGATIONS IN THE COMPLAINT FILED BY PETITIONER.12 The petition lacks merit. In this jurisdiction, the three kinds of actions for the recovery of possession of real property are: 1. Accion interdictal, or an ejectment proceeding which may be either that for forcible entry (detentacion) or unlawful detainer (desahucio), which is a summary action for recovery of physical possession where the dispossession has not lasted for more than one year, and should be brought in the proper inferior court; 2. Accion publiciana or the plenary action for the recovery of the real right of possession, which should be brought in the proper Regional Trial Court when the dispossession has lasted for more than one year; and 3. Accion reinvindicatoria or accion de reivindicacion, which is an action for the recovery of ownership which must be brought in the proper Regional Trial Court.13 Based on the foregoing distinctions, the material element that determines the proper action to be filed for the recovery of the possession of the property in this case is the length of time of dispossession. Under the Rules of Court, the remedies of forcible entry and unlawful detainer are granted to 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. These remedies afford the person deprived of the possession to file at any time within one year after such unlawful deprivation or withholding of possession, an action in the proper Municipal Trial Court against the person or persons unlawfully withholding or depriving of possession, or any person or persons claiming under them, for the restitution of such possession, together with damages and costs.14 Thus, if the dispossession has not lasted for more than one year, an ejectment proceeding is proper and the inferior court acquires jurisdiction. On the other hand, if the dispossession lasted for more than one year, the proper action to be filed is an accion publiciana which should be

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brought to the proper Regional Trial Court. After a careful evaluation of the evidence on record of this case, we find that the Court of Appeals committed no reversible error in holding that the proper action in this case is accion publiciana; and in ordering the remand of the case to the Regional Trial Court of Cauayan, Isabela, Branch 20, for further proceedings. Well settled is the rule that jurisdiction of the court over the subject matter of the action is determined by the allegations of the complaint at the time of its filing, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. What determines the jurisdiction of the court is the nature of the action pleaded as appearing from the allegations in the complaint. The averments therein and the character of the relief sought are the ones to be consulted.15 On its face, the complaint must show enough ground for the court to assume jurisdiction without resort to parol testimony.16 From the allegations in the complaint, it appears that the petitioner became the owner of the property on April 11, 1995 by virtue of the waiver of rights executed by his mother-in-law. He filed the complaint for ejectment on March 2, 2001 after his February 1, 2001 letter to the respondent demanding that the latter vacate the premises remained unheeded. While it is true that the demand letter was received by the respondent on February 12, 2001, thereby making the filing of the complaint for ejectment fall within the requisite one year from last demand for complaints for unlawful detainer, it is also equally true that petitioner became the owner of the subject lot in 1995 and has been since that time deprived possession of a portion thereof. From the date of the petitioner's dispossession in 1995 up to his filing of his complaint for ejectment in 2001, almost 6 years have elapsed. The length of time that the petitioner was dispossessed of his property made his cause of action beyond the ambit of an accion interdictal and effectively made it one for accion publiciana. After the lapse of the one-year period, the suit must be commenced in the Regional Trial Court via an accion publiciana which is a suit for recovery of the right to possess. It is an ordinary civil proceeding to determine the better right of possession of realty independently of title. It also refers to an ejectment suit filed after the expiration of one year from the accrual of the cause of action or from the unlawful withholding of possession of the realty.17 Previously, we have held that if the owner of the land knew that another person was occupying his property way back in 1977 but the said owner only filed the complaint for ejectment in 1995, the proper action would be one for accion publiciana and not one under the summary procedure on ejectment. As explained by the Court: We agree with the Court of Appeals that if petitioners are indeed the owners of the subject lot and were unlawfully deprived of their right of possession, they should present their claim before the regional trial court in an accion publiciana or an accion reivindicatoria, and not before the metropolitan trial court in a summary proceeding for unlawful detainer or forcible entry. For even if one is the owner of the property, the possession thereof cannot be wrested from another who had been in physical or material possession of the same for more than one year by resorting to a summary action for ejectment.18 Hence, we agree with the Court of Appeals when it declared that: The respondent's actual entry on the land of the petitioner was in 1985 but it was only on March 2, 2001 or sixteen years after, when petitioner filed his ejectment case. The respondent should have filed an accion publiciana case which is under the jurisdiction of the RTC.

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However, the RTC should have not dismissed the case. Section 8, Rule 40 of the Rules of Court provides: SECTION 8. Appeal from orders dismissing case without trial; lack of jurisdiction. If an appeal is taken from an order of the lower court dismissing the case without a trial on the merits, the Regional Trial Court may affirm or reverse it, as the case may be. In case of affirmance and the ground of dismissal is lack of jurisdiction over the subject matter, the Regional Trial Court, if it has jurisdiction thereover, shall try the case on the merits as if the case was originally filed with it. In case of reversal, the case shall be remanded for further proceedings. If the case was tried on the merits by the lower court without jurisdiction over the subject matter, the Regional Trial Court on appeal shall not dismiss the case if it has original jurisdiction thereof, but shall decide the case in accordance with the preceding section, without prejudice to the admission of amended pleadings and additional evidence in the interest of justice. The RTC should have taken cognizance of the case. If the case is tried on the merits by the Municipal Court without jurisdiction over the subject matter, the RTC on appeal may no longer dismiss the case if it has original jurisdiction thereof. Moreover, the RTC shall no longer try the case on the merits, but shall decide the case on the basis of the evidence presented in the lower court, without prejudice to the admission of the amended pleadings and additional evidence in the interest of justice.19 WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated June 30, 2005 in CA-G.R. SP No. 73857 ordering the remand of Civil Case No. Br. 20-1194 to the Regional Trial Court of Cauayan, Isabela, Branch 20, for further proceedings, is AFFIRMED. No costs.