G.R. No. L-6314. January 22, 1954

This is an appeal from the Court of First Instance of Bulacan
certified to this Court by the Court of Appeals for the reason that it
involves a purely legal question.

The case originated in the Justice of the Peace Court of Hagonoy,
Bulacan, with the filing of a complaint for the recovery of possession
of two parcels of land and a house thereon which were allegedly leased
by plaintiff to defendants and which the latter refused to vacate after
the expiration of the lease despite repeated demands. Answering the
complaint, defendants denied the alleged lease, and setting up title in
themselves, alleged that the house and land in question were merely
mortgaged by them to plaintiff as a security for a usurious loan, but
that to cover up the usury the transaction was given the form of a
fictitious and simulated contract of sale with right of repurchase,
which they consented to sign on the assurance that it was to be a mere
evidence of indebtedness and would not be enforced as a true pacto de retro
sale. After hearing the evidence presented by the parties, the justice
of the peace rendered his decision dismissing the case for want of
jurisdiction on the theory that the question of possession could not be
resolved without first deciding that of ownership. From this decision
plaintiff appealed to the Court of First Instance of Bulacan. There
defendant filed a motion to dismiss, alleging that the court had no
jurisdiction to try the case on the merits. But the motion was denied,
whereupon, defendants filed their answer to the complaint and
plaintiff, on his part, filed his reply to the answer. On the case
coming up for hearing defendants in open court again raised the
question of jurisdiction. But the court rendered an order holding that
the justice of the peace had jurisdiction and remanded the case to that
court for trial on the merits. It is from that order that defendants
have appealed.

It has been held time and again that the defendant in a case of
forcible entry and detainer in a justice of the peace court may not
divest that court of its jurisdiction by merely claiming ownership of
the property involved. It is, however, equally settled that “if it
appears during the trial that, by the nature of the proof presented,
the question of possession can not properly be determined without
settling that of ownership, then the jurisdiction of the court is lost
and the action should be dismissed.” (II Moran, Rules of Court, 1952
ed., p. 299, and cases therein cited.) So it is held that where
plaintiff’s claim to possession “is predicated upon a deed of sale
alleged to have been executed by the defendant, who in turn alleges
said document to be fictitious and fraudulent, and there are no
circumstances showing that this claim of defendant is unfounded, the
justice of the peace loses its jurisdiction.” (Ibid.)

The evidence presented in the justice of the peace court in the
present case is not before us. But from the answer filed by the
defendants in the Court of First Instance and plaintiff’s reply
thereto, it is evident that plaintiff’s pretended right to the
possession of the property in dispute ultimately rests upon his claim
of ownership, a claim based upon a purported contract of sale with
right of repurchase admittedly signed by defendants but claimed by them
to be a mere Simulation to cloak a mortgage obligation tainted with
usury. If this contract was really a sale subject to repurchase and the
repurchase has, as alleged by the plaintiff, not been made within the
time stipulated, plaintiff would already be the owner of the property
sold and, as such, entitled to its possession. On the other hand, if
the contract was, as defendants claim, in reality a mere mortgage, then
the defendants would still be the owner of the property and could not,
therefore, be regarded as mere lessees. In the final analysis then, the
case hinges on a question of ownership and is for that reason not
cognizable by the justice of the peace court.

The case at bar is to be distinguished from that of Sevilla vs.
Tolentino, 51 Phil., 333, cited by the learned trial judge in the order
appealed from. In that case, defendant was deemed to have impliedly
admitted being lessee of the property in dispute and could not for that
reason be allowed to claim ownership thereof in the same action. Such
is not the situation of the present defendants, who have in their
answer denied the alleged lease.

As the justice of the peace court of Hagonoy had no jurisdiction to
try the case on the merits, the order appealed from remanding the case
to that court must be, as it is hereby, revoked; and, in accord with
the precedent established in Cruz et al. vs. Garcia et al, 45 Off. Gaz.
227, and the decisions therein cited, the case is ordered returned to
the Court of First Instance of Bulacan for that court to proceed with
the trial in the exercise of its original jurisdiction. With costs
against the appellee.

Paras, C. J., Pablo, Bengzon, Padilla, Montemayor, Jugo, Bautista Angelo, and Labrador, JJ., concur.