**Facts:**
The case originated from a property dispute involving two parcels of land in Tarlac, Tarlac, owned originally by spouses Adriano Rivera and Aurora Mercado. In 1957, the Riveras sold the properties to the spouses Arsenio Dulay and Asuncion dela Rosa. The Dulays took possession except for portions occupied by Gideon dela Rosa (Asuncion’s brother) and his wife Angela, and Corazon Medina. The property was mortgaged to the GSIS by the Dulays to finance the purchase. Despite claims from Angela and Gideon dela Rosa indicating a shared financial contribution towards the property’s purchase, and subsequent demands for vacation of the premises by the Dulay heirs, Angela Dela Rosa and Corazon Medina refused to leave, leading to a series of legal actions.
Initially, a recovery of possession case (accion publiciana) was filed by the Dulays in 1982 against the occupants, which concluded in the Dulays’ favor but was overturned due to procedural issues related to amicable settlement efforts. Following the deaths of both Asuncion Dulay and Gideon Dela Rosa, and further failed attempts for amicable settlement, Arsenio Dulay and heirs filed an unlawful detainer case in 1996, asserting that Angela Dela Rosa and Corazon Medina’s occupation was by mere tolerance.
**Procedural Posture:**
Angela Dela Rosa filed a counter-suit in 1996, claiming ownership over half the property. The Municipal Trial Court initially deemed itself without jurisdiction, citing the matter as one of ownership rather than mere unlawful detainer. However, upon appeal, the Regional Trial Court reversed this, holding the issue as one suitable for an unlawful detainer action. The Court of Appeals affirmed the RTC’s decision, as did the Supreme Court, which focused on the legitimacy of the Dulays’ ownership and the subsequent unlawful detainment by Dela Rosa and Medina under tolerance.
**Issues:**
1. Jurisdiction of Municipal Trial Court over the unlawful detainer case despite claims of ownership by defendants.
2. The existence and enforcement of a supposed verbal trust agreement between the Dulays and Dela Rosas over the property.
3. Applicability of the doctrines of prescription and laches to the respondents’ action.
4. Entitlement of respondents to attorney’s fees.
**Court’s Decision:**
The Supreme Court denied the petition, upholding the decisions of the lower courts. It emphasized that the jurisdiction of a case is determined by the allegations of the complaint and the relief sought, not the defenses or motions by the defendants. The SC ruled that the Municipal Trial Court had jurisdiction over the unlawful detainer action, that no trust was created in favor of Angela Dela Rosa and Corazon Medina, that their action was indeed barred by prescription and laches, and that the award of attorney’s fees to the respondents was justified.
**Doctrine:**
The case reiterates that the nature of an action and the corresponding jurisdiction are determined by the allegations in the complaint. It upholds the principle that a title holder is presumed entitled to possession and that possession by tolerance does not confer an automatic right to the occupant against the owner’s wishes. It also underscores the applicability of prescription and laches in actions involving property rights and the awarding of attorney’s fees based on judicial discretion consonant with the circumstances.
**Class Notes:**
– Jurisdiction is determined by the complaint’s allegations and the desired relief.
– The possession by tolerance can lead to an unlawful detainer action if the occupant refuses to vacate upon the owner’s demand.
– The essentials for establishing a verbal trust include definitive proof beyond vague claims or insinuations.
– Awards for attorney’s fees are within the court’s discretion and are bounded by the requisites of the case rather than the limits imposed by certain procedural rules like those in Summary Procedure.
– Issues of ownership raised defensively in an unlawful detainer case do not divest the MTC of jurisdiction.
– Prescription and laches are critical defenses against actions that were delayed unreasonably, affecting the right to enforce property claims.
**Historical Background:**
This case illustrates the complexities of property disputes in the Philippines, particularly those involving familial relations and verbal agreements on property transactions. It also highlights the procedural intricacies in shifting between legal actions (e.g., accion publiciana to unlawful detainer) and the vital role of clear, documented agreements in property ownership and transfer.
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