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PHILIPPINE SUPREME COURT DECISIONS

SECOND DIVISION

[G.R. No. 117250. September 19, 1996.]

PATRICIA SANDEL, Petitioner, v. COURT OF APPEALS and ROBERTO Y. MARTINEZ, Respondents.


SYLLABUS


REMEDIAL LAW; CIVIL PROCEDURE; JURISDICTION; DETERMINED UPON THE ALLEGATIONS OF THE COMPLAINT. — Section 33 of Batas Pambansa Blg. 129 provides that Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise "exclusive original jurisdiction over cases of forcible entry and unlawful detainer: Provided, That when, in such cases, the defendant raises the question of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession. A court’s jurisdiction cannot be made to depend upon defenses set up in the answer or in a motion to dismiss but upon the allegations of the complaint. In Wilmon Auto Supply Corp. v. Court of Appeals, G.R. No. 97637, April 10, 1992, 208 SCRA 108 the pendency of such action will not affect the unlawful detainer suit, because the action in the Regional Trial Court did not involve physical or de facto possession, and the issues presented in such proceeding could quite as easily be set up as defenses in the ejectment action and there resolved. It may well be stressed that as the law now stands, even when, in forcible entry and unlawful detainer cases, the defendant raises the question of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts nevertheless, have the undoubted competence to resolve the issue of ownership only to determine the issue of possession.


D E C I S I O N


TORRES, JR., J.:


This is a petition for Review on Certiorari, filed by one Patricia Sandel (Sandel, for brevity) seeking the reversal of the judgment of the Court of Appeals dated September 22, 1994, 1 which affirmed the decision of the Regional Trial Court, declaring as null and void, for want of jurisdiction, the August 27, 1991 order of the Metropolitan Trial Court, NCR, Branch 123, Kalookan City, in Civil Case No. 19960, dismissing the petitioner’s action for unlawful detainer.

Petitioner Sandel originally filed her complaint 2 for unlawful detainer in the Metropolitan Trial Court of Kalookan City, Branch 53, presided by the Hon. Judge Romanito A. Amatong, on June 13, 1991, naming as defendant herein private respondent Roberto Y. Martinez (Martinez, for brevity), and praying that the court render judgment:jgc:chanrobles.com.ph

"a. Ordering defendant and all other persons claiming rights under him to vacate and peacefully surrender the leased premises to the plaintiff;

b. Sentencing the defendant to pay to the government the real property tax including penalties due on the building since January 1988 up to March 31, 1991, or to reimburse plaintiff of whatever amount she paid to the government as real property tax due on the building since January 1988 up to March 31, 1991;

c. Sentencing the defendant to pay the plaintiff the sum of P30,000.00 by way of and as attorney’s fees;

d. Sentencing the defendant to pay the plaintiff the sum of P20,000.00 a month starting April 1991 for the continuous use and occupation of the subject premises until defendant finally surrender and vacate plaintiff’s premises; and

e. The costs of this suit.

Plaintiff further prays for such other reliefs and remedies as the Honorable Court may deem just and equitable under the premises."cralaw virtua1aw library

The undisputed facts, as appearing on the record, are the following:chanrob1es virtual 1aw library

On February 27, 1984, petitioner Sandel, as absolute owner, leased for a term of seven (7) years from April, 1984 to private respondent Martinez, a parcel of land, described in the lease agreement as Lot No. 858-B of the Subdivision Plan PSD-20783, situated in Kalookan City and covered by Transfer Certificate of Title No. C-8844.

The pertinent provisions of the lease agreement 3 are:jgc:chanrobles.com.ph

"1. Term of the Lease: This Contract of Lease shall be for a period of seven(7) years beginning (April) 1, 1984 up to (March) 31, 1991.

2. Purpose of Lease: The LESSEE will construct in the leased premises a commercial building, according to plans and specifications, blue print copies of which are hereto attached and made an integral part hereof.

3. Securing Building Permit/s and other Licenses: The LESSEE shall secure the building permit/s and licenses necessary in the construction of the building.

4. Period to Construct Building: The LESSEE shall complete the construction of the building as mentioned in the attached plans and specifications within four (4) months from date hereof.

5. Monthly Rentals: The LESSEE for the first six (6) years of the contract shall pay to the Lessor the sum of P4,000.00 and thereafter or on the seventh (7th) year, the sum of P4,500.00, as monthly rentals for the leased premises payable within the first five (5) days of each calendar month, at the office of the Lessor or her authorized agent; Provided, however, that the LESSEE’s obligation to pay the rental shall start upon the completion of the building, but if it is not completed within four (4) months hereof as provided in the preceding paragraph, the monthly rental shall already accrue and shall be paid by the LESSEE.

6. Insurance: . . .

7. Transfer of Ownership: Upon the termination of this lease, the ownership and title of the building shall automatically transfer to and in favor of LESSOR without need for an implementing document therefor.

8. Taxes: Real Estate taxes on the land shall be borne by LESSOR while those on the building shall be paid by the LESSEE.

9. Repairs: . . .

10. Prohibitions against Sub-lease: . . .

11. Prohibition against Conveyance and Mortgages: . . .

12. Waiver: . . ."cralaw virtua1aw library

On June 13, 1991, Sandel filed a complaint for unlawful detainer, seeking to recover possession of the leased premises and the commercial building constructed thereon by Martinez, docketed as Civil Case No. 19960 in the Metropolitan Trial Court of Kalookan City.

The filing of the complaint was predicated on the occurrence of two events relative to the lease agreement between petitioner and the private respondent, viz., a) the private respondent’s failure to pay real estate taxes on the building constructed on the subject property, from January 1988 to March 1991, in violation of the stipulations in the parties’ lease agreement, and b) the expiration of the term of the contract of lease and the refusal of the private respondent to vacate the leased premises.

Martinez filed an answer with motion to dismiss, followed later by a separate and amplified motion to dismiss on the basis of the MTC’s purported lack of jurisdiction over the subject matter of the complaint.

On August 27, 1991, the MTC of Kalookan City issued its Order, denying, for lack of merit, Martinez’ motion to dismiss. Martinez filed a motion for reconsideration but the same was likewise denied on January 9, 1992.

Martinez filed a petition for certiorari and prohibition with prayer for temporary restraining order with the Regional Trial Court of Kalookan City, docketed as Civil Case No. C-266. The court gave due course to Martinez’s petition and enjoined the Kalookan MTC from proceeding with the hearing of Civil Case No. 19960 until the petition shall have been resolved or until further orders.

On September 3, 1992, the Regional Trial Court rendered its decision 4 granting Martinez’ Petition and declaring as null and void the orders of the Kalookan MTC dated August 27, 1991, and January 9, 1992.

Sandel appealed via petition for review to the Court of Appeals. The appellate court rendered its decision on September 22, 1984, denying the appeal and affirming the decision of the Regional Trial Court. The dispositive portion of the decision reads:jgc:chanrobles.com.ph

"WHEREFORE, and upon all the foregoing considerations, apart from the MODIFICATION that the second order declared null and void, should be that dated January 9, 1992 (instead of January 9, 1991 as therein stated), the decision appealed from is hereby AFFIRMED, with costs in this instance against private Respondent-Appellant.

SO ORDERED."cralaw virtua1aw library

Hence, this petition.

Petitioner assigns the following errors allegedly committed by the appellate court:chanrob1es virtual 1aw library

I


THAT RESPONDENT COURT ERRED IN UPHOLDING THE REGIONAL TRIAL COURT’S RULING THAT THE METROPOLITAN TRIAL COURT DOES NOT HAVE JURISDICTION ON THE EJECTMENT CASE BECAUSE THERE IS A NEED TO DETERMINE THE VALIDITY OF PARAGRAPH 7 OF THE CONTRACT OF LEASE.

II


THAT THE RESPONDENT COURT ERRED IN UPHOLDING THE REGIONAL TRIAL COURT IN GRANTING THE WRITS OF CERTIORARI AND PROHIBITION AGAINST THE METROPOLITAN TRIAL COURT. 5

Private respondent question the jurisdiction of the Metropolitan Trial Court to try the case, since the subject matter of the action filed is incapable of pecuniary estimation and, therefore, within the Regional Trial Court’s original jurisdiction under Batas Pambansa Blg. 129. Thus, it is necessary to determine the ownership of the premises sought to be recovered, and to arrive at this, resort must be made to the determination of the validity of the stipulations in the lease agreement, a function which is allegedly beyond the Metropolitan Trial Court’s jurisdiction.

Private respondent asserts in his comment 6 that Petitioner "alleged matters that are incapable of pecuniary estimation, thereby placing the jurisdiction of the MTC at issue," particularly:jgc:chanrobles.com.ph

"7.1. Under paragraph 2 thereof, she is the absolute and registered owner of the two (2) parcels of land under leased (sic) to PRIVATE RESPONDENT situated in A. Mabini St., Kalookan City, Metro Manila and covered by TCT No. T-134746 and T-134747 when in the Lease Contract itself what was reflected was TCT No. C-8844 which is a parcel of land designated as Lot 858-B.

7.2. Under paragraph 4, the Contract of Lease was executed pending formal exchange of Lot 858-A and presently covered by TCT No. 134743 with Lot 858-B-1 in possession of adjoining owner Pedro Sandel, which circumstance had not been described or indicated in the contract of lease.

7.3. Under paragraph 7, the PETITIONER upon termination of the contract shall become the automatic owner of the building without need of any implementing order, the validity of which provision is presently being assailed as contrary to law.

7.4. Under paragraph 8, the real estate taxes on the building shall be borne by the PRIVATE RESPONDENT, which only ratifies his ownership on the said building and whose efficacy is likewise being raised upon for the Metropolitan Trial Court’s determination."cralaw virtua1aw library

From these aforestated matters, private respondent posits his observation:jgc:chanrobles.com.ph

"that there are basic matters which the court has to consider like questions involving ownership, determination of the validity of certain provisions in the contract of lease (Annex "H"), the agreements as sted (sic) in the execution of the Deed of Exchange (Annex "I") all of which are crucial for the determination of the parties’ respective claims. Allegedly, these matters which the Metropolitan Trial Court certainly could not intrude into or exercise competent jurisdiction for they are issues incapable of pecuniary estimation as laid down by the Honorable Supreme Court in the case of De Rivera v. Halili (9 SCRA 59, 63-64) and Dy Sun v. Brillante (93 Phil 175)." 7

This submission appears to be predicated on the ruling of the Regional Trial Court:jgc:chanrobles.com.ph

"In the instant case, the allegations in the complaint as well as in the answer raised issues for the determination of the validity of the lease agreement containing provisions on automatic adjudication of a commercial building and whether the real property involved in the said lease is the same property covered by two new titles; whether one who is not the owner of property could encumber through lease agreement a property which does not belong to her; whether the deed of exchange with a certain Pedro Sandel who owns the property on which the commercial building was built was valid without notice to the defendant (herein petitioner) who is under the law entitled to the right of first refusal. Clearly, these matters brought before the Court for its determination cannot be assessed in terms of money. As aforementioned, the jurisdiction of a Metropolitan Trial Court does not extend to civil actions in which the subject of litigation is not capable of pecuniary estimation. The Regional Trial Courts has the exclusive original jurisdiction in such actions." 8

The private respondent’s reliance on the ruling enunciated in De Rivera v. Halili and Dy Sun v. Brillante is misplaced, for these cases were decided well before the effectivity of Batas Pambansa Blg. 129, the law on which the determination of the present issue rests. In De Halili v. Rivera, issued on September 30, 1963, it was held that the assertion of the parties of their respective rights to own the properties in controversy converted the litigation into an inquiry into the nullity or validity of the presented documents, or from a mere detainer suit to one that is incapable of pecuniary estimation and thus beyond the legitimation authority of the Justice of the Peace to rule on.

This rule has since been modified.

Section 33 of Batas Pambansa Blg. 129 provides that Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise "exclusive original jurisdiction over cases of forcible entry and unlawful detainer: Provided, That when, in such cases, the defendant raises the question of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession."cralaw virtua1aw library

Even if the defendant sets up the matter of ownership over the premises subject of the detainer suit, such fact is of no moment, because, the Metropolitan Trial Court is competent to determine ownership of the properties in question, for the purpose of determining possession de facto, though without prejudice to a plenary action to determine ownership.

There should be no question by now that what determines the nature of an action — and correspondingly, the court which has jurisdiction over it, — are the allegations made by the plaintiff in this case. 9

The appellate court’s observation that "the question anent the eviction of the appellee had been complicated by the desire of the appellant to have the appellee vacate not only the lot but the building as well," is not convincing, to say the least.

A reading of the complaint shows clearly that the action is one for unlawful detainer, since what is sought is the recovery of the possession of the leased premises, following the lapse of the term of the lease agreement of the parties. After the lapse of the lease contract, the lessee has no more right to remain in possession of the properties subject of the lease. It becomes his obligation to turn over the same to the lessor, or any other person succeeding to his right. 10

The defense raised by the defendant pertaining to matters delving into issues on the validity of certain provisions of the contract of lease (provision 7), are subject of a separate resolution by a court, which has jurisdiction to hear the same. The present suit may be allowed to continue until its final determination, apart from the said issues, as the matter of possession de facto is distinct and separate from the validity of the contractual stipulation regarding the transfer of ownership of the commercial building constructed, on the subject premises. Private respondent himself asserts that he has filed a direct action for the annulment of stipulation no. 7 of the contract of lease, and the same is pending before the Regional Trial Court, Branch 125, Kalookan City, Civil Case No. C-15477 "so that once, and for all, this issue could be appropriately resolved and settled." 11

Thus, even though the defendant sets up his own right to ownership (in the case of the building), or that of a third party (in the case of the parcel of land), over the premises subject of the unlawful detainer suit, such fact will not operate to deprive the Metropolitan Trial Court of jurisdiction. A court’s jurisdiction cannot be made to depend upon defenses set up in the answer or in a motion to dismiss but upon the allegations of the complaint. 12

As observed by the appellate court:jgc:chanrobles.com.ph

"Appellee set up the defense in the MTC that private appellant does not own the whole or portion of the leased premises — but this could not divest the Kalookan MTC of its jurisdiction to try the case for the reason that in an ejectment case, the mere filing of an answer raising the question of ownership will not deprive an inferior court of its jurisdiction." 13

Consequently, the mere assertion of ownership by the defendant in an ejectment (or detainer) case will not oust the municipal court of its summary jurisdiction. This has to be so, for were the principle otherwise, the ends of justice would be frustrated by making the efficiency of this kind of action dependent upon the defendant in all cases. 14

In Wilmon Auto Supply Corp. v. Court of Appeals, 15 the pendency of such action will not affect the unlawful detainer suit, because the action in the Regional Trial Court did not involve physical or de facto possession, and the issues presented in such proceeding could quite as easily be set up as defenses in the ejectment action and there resolved. It may well be stressed that as the law now stands, even when, in forcible entry and unlawful detainer cases, the defendant raises the question of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts nevertheless, have the undoubted competence to resolve the issue of ownership only to determine the issue of possession. Consistently and as lucidly stated in Spouses M. Refugia, et. al. v. Court of Appeals, Et Al., 16 we declared, viz.:jgc:chanrobles.com.ph

"In the same vein, where the resolution of the issue of possession hinges on a determination of the validity and interpretation of the document of title or any other contract on which the claim of possession is premised, the inferior court may likewise pass upon these issues. This is because, and it must be so understood, that any such pronouncement made affecting ownership of the disputed portion is to be regarded merely as provisional, hence, does not bar nor prejudice an action between the same parties involving title to the land (Semira v. Court of Appeals, 230 SCRA 577). Moreover, Section 7, Rule 70 of the Rules of Court expressly provides that the judgment rendered in an action for forcible entry or unlawful detainer shall be affective with respect to the possession only and in no wise bind the title or affect the ownership of the land or building."cralaw virtua1aw library

ACCORDINGLY , in view of the foregoing premises, the decision dated September 22, 1994 of the respondent Court of Appeals, affirming the decision of the RTC of Kalookan City Branch 123 in Civil Case No. C-266, is hereby REVERSED and SET ASIDE. The Order of the Regional Trial Court of Kalookan City, Branch 53, denying private respondent’s motion to dismiss is hereby MODIFIED in that the case is hereby REMANDED to the Metropolitan Trial Court of Kalookan City, for continuance and for further proceedings on the merits.

SO ORDERED.

Regalado, Romero, Puno and Mendoza, JJ., concur.

Endnotes:



1. Annex "B", Petition, Rollo, p. 31.

2. Annex "C", Ibid., p. 39.

3. Annex "H", Ibid. p. 64.

4. Rollo, p. 25.

5. Memorandum for Petitioner, p. 4.

6. Rollo, p. 79.

7. Ibid., p. 82.

8. RTC Decision, Rollo, p. 29.

9. Ching v. Malaya, etc. G.R. No. L-56449, August 31, 1987, 153 SCRA 412.

10. Articles 1669, 1673, Civil Code of the Philippines.

11. Memorandum for Private Respondent, p. 10.

12. Tinitigan v. Tinitigan, G.R. No. L-45418, October 30, 1980, 100 SCRA 619; Ching v. Malaya, supra.; Asset Privatization Trust v. Court of Appeals, G.R. No. 103277, February 3, 1994, 229 SCRA 627; Sumulong v. Court of Appeals, G.R. No. 108817, May 10, 1994, 232 SCRA 372.

13. Court of Appeals’ Decision , Rollo, p. 34.

14. Ching v. Malaya, supra.

15. G.R. No. 97637, April 10, 1992, 208 SCRA 108.

16. G.R. No. 118284, July 5, 1996.

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