8. Optimum Development Bank v.

Spouses Jovellanos, December 4, 2013 ownership based on the interpretation of the contract or agreement
FACTS:
1. April 26, 2005 - SPS Jovellanos entered into a Contract to Sell with
Palmera Homes Inc for the purchase of a residential house and lot
situated in Caloocan City for a consideration of Php 1, 015,000.00
2. SPS Jovellanos took possession of the property upon down payment of
Php 91,500, undertaking to pay the remaining balance of the contract
price in equal monthly installments of Php 13,107.00 for a period of 10
years starting in June 12, 2005
3. On August 22, 2006 - Palmera assigned its rights to the contract to sell
in favor of Petitioner Optimum Development Bank through a Deed of
Assignment of even date.
4. On April 10, 2006 - Optimum issued a Notice of Delinquency and
Cancellation of Contract of Sell due to Sps Jovellanos failure to pay their
monthly installments. On May 25, 2006 - Optimum required the
Jovellanos to vacate and deliver possession of the property within 7
days, but remained unheeded.
5. Nov 3, 2006 - Optimum filed a complaint for unlawful detainer before
the MeTC
6. SPS Jovellanos were served summons, but still failed to file their answer
within the prescribed reglementary period. Optimum moved for the
rendition of judgment.
7. Jovellanos filed their opposition with motion to admit answer
questioning the jurisdiction of the court. They also filed a Motion to
Reopen and Set the Case for Preliminary Conference. METC DENIED.
8. METC - ordered Jovellanos to vacate the property and pay Optimum for
the use of the property. The possession by Jovellanos was already
cancelled due to non-payment. Their continued possession constituted
an unlawful detainer.
9. Appeal to RTC - Failed to answer because of promised compromise
agreement. Also questioned the jurisdiction of the METC because the
issue arose from rights under contract to sell and not the unlawful
detainer.
10. RTC Ruling - Affirmed METC decision on default and jurisdiction
11. CA Ruling - Dismissed the complaint for lack of jurisdiction. Controversy
does not only involve the issue of possession but also the validity of the
cancellation of the Contract to Sell and the determination of the rights
of the parties. The subject is one which is incapable of pecuniary
estimation and is within the jurisdiction of the RTC.
12. MR of Optimum - denied
between the plaintiff and defendant.
6. Interpretation of the contract is inevitable because the contract grants
the right to possess the property and the basis of the claim of violations
to extinguishment, terminating the right to possess.
7. However, MeTCs ruling is merely provisional and is binding only with
respect to the issue of possession
8. In this case: the unlawful detainer suit is well within the jurisdiction of
the MeTC because action is premised upon the cancellation or
termination of the Contract to Sell and that the MeTC rightfully held that
due to non-payment, the spa Jovellanos does not anymore have the
right to possess.
9. In a contract to sell, all the seller is obligated to to is to sell the property
exclusively to the buyer, while the buyer is obligated to pay for the thing
he is buying. The full payment of the purchase price in a contract to sell
is a suspensive condition. if not fulfilled, the seller has no obligation to
convey title to the buyer.
10. The Contract to Sell is governed by RA 6552 or the Realty installment
Buyer Protection Act that provides the rights of the buyer in case of
default in the payment of installments. The pertinent provision of the
law to this cases provides that when the buyer pays less than two years,
the seller shall give the buyer a grace period of not less than 60 days
form he days the installment became due. If the buyer failed to pay the
installments and the grace period expires, the seller may cancel the
contract after 30 days from receipt of notice of cancellation of the
contract
11. In this case, Optimum complied with all the requisites and the Javellanos
still didnt pay. Thus, Javellanos lost possession and MeTC has
jurisdiction.

ISSUE: WON the case is an unlawful detainer and fall with the exclusive
original jurisdiction of the municipal trial courts?

HELD:
1. What determines the nature of the action and the jurisdiction are the
allegation in the complaint and the character of the relief sought.
2. A complaint alleges a cause of action for unlawful detainer if it recites:
a) initially, possession of the property by the defendant was by contract
with or by tolerance of the plaintiff; b) eventually, such possession
became illegal upon notice by plaintiff to defendant of the termination
of the latters right of possession; c) defendant remained in possession
of the property and deprived the plaintiff of the enjoyment and d) within
one year from the last demand on defendant to vacate the property,
plaintiff instituted the complaint for ejectment.
3. Optimums complaint alleges that by virtue of a contract to sell the
jovellanos were allowed to take possession, but because they failed to
pay the monthly installments, the contract was canceled and a notice of
delinquency was issued. Sps Jovellanos refused to vacate the property
despite demands. Thus, Optimum instituted the present action
4. The SC finds that MTC are conditionally vested with authority to resolve
the question of ownership raised as an incident in an ejectment case
where the determination is essential to complete adjudication of the
issue of possession.
5. The court in Oronce v CA found that MTCs are authorized to look into
the ownership of the property in controversy in ejectment cases. This is
because to resolve possession, courts must resolve the issue of