ORTIGAS & COMPANY, LIMITED PARTNERSHIP, PETITIONER, VS. COURT OF APPEALS AND MAXIMO F. BELMONTE, RESPONDENTS.

Petition for review of the decision of the Court of Appeals dated
October 12, 1979, in CA-G.R. No. 08609-SP, which set aside the decision of the
Court of First Instance of Rizal dated September 22,
1978, in Civil Case No. 28389, which had affirmed in toto
the judgment on the pleadings rendered by the Municipal Court of San Juan, Rizal, dated December 19, 1976, in Civil Case No. 3773.

On March 25, 1974, Ortigas and Company,
Limited Partnership, hereinafter referred to as Ortigas, filed with the
Municipal Court of San Juan, Rizal, a complaint for
unlawful detainer against Maximo
F. Belmonte, praying that after hearing, judgment be
rendered – (1) ordering the defendant, his heirs, assigns or
successors-in-interests to vacate the subject lot and surrender full control
thereof to the plaintiff; (2) declaring the residential building constructed on
the lot by the defendant as forfeited in plaintiff’s favor; and (3) condemning
the defendant to pay a monthly rent of P5,000.00 from July 18, 1971, up to the
time he vacates the premises; attorney’s fees in the amount of P7,000.00;
exemplary damages in such amount as the court may fix; and the costs.  The complaint was docketed as Civil Case No.
3773.

After the defendant had
filed his answer, the Municipal Court of San Juan, upon motion of the
plaintiff, rendered a judgment on the pleadings dated December
19, 1976, the dispositive portion of which reads as follows:

“WHEREFORE, premises considered, this Court hereby grants
plaintiff-partnership’s Motion for Judgment on the Pleadings dated January 31,
1975, as follows:

(1)  Ordering the defendant and all persons
claiming right under him to vacate the premises designated as Lot 6, Block 31,
Psd-66759 with an area of 840 square meters, more or less, situated at Greenhills Subdivision 4, San Juan, Rizal
and surrender possession of the same to the plaintiff-partnership;

(2)  Declaring all the improvements constructed in
the said premises forfeited in favor of the plaintiff-partnership;

(3)  Ordering the defendant to pay the monthly
rental of P2,500.00 a month starting from July 18, 1971 up to the time
defendant actually vacates said premises; and

(4)  Ordering the defendant to pay attorney’s fees
in the amount of P5,000.00 and to pay the costs of
suit.

“SO ORDERED.”

After a motion for reconsideration was denied, Belmonte appealed to the Court of First Instance of Rizal which docketed the same as Civil Case No. 28389.  Instead of filing a memorandum in support of
his appeal, Belmonte filed on February 13, 1978, a motion to dismiss under Sec.
11, Rule 40 of the Rules of Court which provides:

“SEC. 11.  LACK OF JURISDICTION.  – A case tried by an inferior court without
jurisdiction over the subject matter shall be dismissed on appeal by the Court of First Instance.  But instead of dismissing the case, the Court
of First Instance in the exercise of its original jurisdiction, may try the
case on the merits if the parties therein file their pleadings and go to the
trial without any objection to such jurisdiction.”

Alleging lack of jurisdiction of the
Municipal Court of San Juan and manifesting his objection to the exercise by
the Court of First Instance of Rizal of its original
jurisdiction, Belmonte sought the dismissal of Civil
Case No. 3773.  The Court of First
Instance of Rizal, however, denied the motion to
dismiss and subsequently rendered a decision dated September 22, 1978, affirming in toto the judgment of the Municipal Court of San
Juan.  Said Court of First Instance of Rizal likewise issued a writ of execution dated November 7, 1978.

On December 1, 1978,
Belmonte simultaneously filed with the Court of First
Instance of Rizal a notice of appeal and with the
Court of Appeals a motion to extend
time to file petition for review.  In a
resolution dated December 7, 1978, the Court of Appeals granted Belmonte an extension of twenty (20) days from December
4, 1978, within
which to file a petition for review.  On
December 20, 1978, Belmonte filed with the Court of
Appeals a petition for certiorari and prohibition, with preliminary
injunction, assailing:  (a) the
jurisdiction of the Municipal Court of San Juan and the Court of First Instance
of Rizal; (b) the propriety or validity of the
judgment on the pleadings rendered by the Municipal Court of San Juan; and (c)
the propriety or validity of the Writ of Execution issued by the Court of First
Instance of Rizal.

Docketed as CA-G.R. No.
08609-SP, the petition was given due course by the Court of Appeals which
subsequently rendered a decision dated October 12, 1979, the dispositive
portion of which reads as follows:

“PREMISES CONSIDERED, the decision of the municipal court of
San Juan, Metro-Manila, as well as the decision of the Court of First Instance
of Rizal aforesaid, are hereby SET ASIDE.  No costs.”

The Court of Appeals held that the
Municipal Court of San Juan had no jurisdiction over the case nor the power to resolve controverted
issues on the pleadings.

A motion for reconsideration was filed by Ortigas
but the same was denied by the Court of Appeals in its resolution dated January 15, 1980.  Hence, Ortigas
filed with this Court the present petition for review of the decision of the Court of Appeals.

After analyzing the issues raised by Belmonte
before the Court of Appeals and resolved by said court in the decision under
review, namely:  (a) the jurisdiction of
the Municipal Court of San Juan and of the Court of First Instance of Rizal; (b) the propriety or validity of the judgment on the
pleadings rendered by the Municipal Court of Rizal;
and (c) the propriety or validity of the Writ of Execution issued by the Court
of First Instance of Rizal, We find that the same are
purely legal in nature.  Since appellate
jurisdiction over cases involving purely legal questions is exclusively vested
in this Court by Sec. 17 of the Judiciary Act (R. A. No. 296), it is readily
apparent that the decision under review was rendered by the Court of Appeals
without jurisdiction and should, therefore, be set aside.  It is for this reason that We
resolved on June 8, 1981, to
give due course to the petition for review and to consider the same as
submitted for decision.

But as We set aside the decision of the Court of Appeals dated
October 12, 1979, for having been rendered without jurisdiction, We proceed
with the review of the decision of the Court of First Instance of Rizal dated September 22, 1978, and the judgment of the
Municipal Court of San Juan dated December 19, 1976, which said decision
affirmed in toto, considering that the
appeal therefrom was perfected on time, albeit
erroneously brought to the Court of Appeals. 
This is in consonance with the spirit of Sec. 31 of the Judiciary Act
(R. A. No. 296, as amended) which provides that “(a)ll cases which may be erroneously brought to the
Supreme Court or to the Court of Appeals shall be sent to the proper court
which shall hear the same as if it has originally been brought before it.”

In support of his contention that the Municipal Court of San
Juan, Rizal, did not have jurisdiction over the case
filed by Ortigas, Maximo F.
Belmonte cited in his comment to Ortigas‘
petition for review (which We considered as his answer to the petition) the
case of FUENTES AND GO TEK vs. HON. MUÑOZ-PALMA, ETC., AND AYALA SECURITIES,
INC. (G.R. No. L-15074, May 31, 1960,
108 Phil. 640).  We have reviewed
Our decision in said case and We find the material facts thereof to be almost
identical to those of the case at bar, namely: 
(1) both cases involved complaints for unlawful detainer
filed against defendants who acquired possession of the subject lots by virtue
of agreements whereby the plaintiffs had contracted to sell the subject lots
and the defendants had in turn bound themselves to pay the downpayments
and the subsequent monthly installments on the purchase prices of said lots;
(2) the agreements in both cases allowed the purchasers to take possession of
the subject lots and to construct thereon buildings and/or other permanent improvements
but specified that before full payment of the purchase prices, the purchasers
would be considered as mere tenants or lessees of the subject lots; (3) the
agreements in both cases further provided that should the purchasers fail to
pay any of the monthly installments within ninety (90) days from its due date,
the contracts shall automatically be cancelled and all sums of money paid under
the same shall be considered as rentals on the property and the purchasers may
be ejected therefrom by the means provided for by law
for trespassers or unlawful detainers; (4) in both
cases, the purchasers took possession of the subject lots after having made the
downpayment and constructed thereon buildings and/or
other permanent improvements; (5) in both cases, the purchasers failed to pay
the monthly installments which became due, prompting the plaintiffs to file the
complaints for unlawful detainer which sought to
eject the purchasers-defendants from the subject lots; and (6) the complaints
for unlawful detainer in both cases contained prayers
affecting the property rights of the parties in the permanent improve­ments
constructed on the subject lots – in the cited case, Ayala Securities, Inc.
prayed for the removal of the warehouses, garages and other permanent
improvements constructed by defendant Fuentes on the subject lots while in the
case at bar, Ortigas prayed that the residential
building constructed by defendant Belmonte on the
subject lot be declared forfeited in its favor.

After noting that “(a)n action for unlawful detainer, which is a summary proceeding to wrest possession
from one who has no right thereto, is applicable only when the issue is that of
possession; but rights of property in the land created by the Agreements,
especially the relative rights and obligations of the parties to the
improvements are directly involved”, this Court held in the cited case
that the Justice of the Peace Court (now Municipal Court) of Makati did not have jurisdiction over the action filed by
Ayala Securities, Inc., as the same involved rights over real property, other
than mere right of possession.  Thus, this Court declared null and void the
proceedings in the court below and dismissed the unlawful detainer
case filed by Ayala Securities, Inc.

We find the above ruling applicable to the case at bar.

As stated, the complaint for unlawful detainer
filed with the Municipal Court of San Juan sought not only the ejectment of the defendant from the subject lot, but
likewise prayed that the residential building constructed by him on the same
lot be declared forfeited in plaintiff’s favor. 
Clearly, the issues raised before said inferior court did not only
involve possession of the lot but also
the rights and obligations of the parties to the residential building which
under Art. 415 (1) of the Civil Code is considered real property.  Plaintiff’s prayer that said building be
declared forfeited in its favor directly puts in issue the ownership of said
real property.

Since the issues raised
by Ortigas before the Municipal Court of San Juan in
Civil Case No. 3773 exceeded the allowable scope of an unlawful detainer suit which should be limited to the issue of
possession of real property, the case could not qualify as an exception to the
jurisdiction of the Court of First Instance under Sec. 44(b) of the Judiciary
Act which provides:

“SEC. 44.  ORIGINAL JURISDICTION.  – Courts of First Instance shall have
original jurisdiction:

x x x              x x x                 x x x

(b)  In all civil actions which involve the title
to or possession of real property, or any interest therein, or the legality of
any tax, impost or assessment, except actions of forcible entry into and detainer on lands or
buildings, original jurisdiction of which is conferred by this Act upon city
and municipal courts;”

Consequently, the Municipal Court of San
Juan, Rizal, did not have jurisdiction over Civil
Case No. 3773.  Its judgment dated December 19, 1976, should therefore
be set aside.

Since Civil Case No. 3773 was decided by the Municipal Court of
San Juan without jurisdiction over the subject matter thereof, said case should have been dismissed by the Court
of First Instance of Rizal when the same was brought
before it on appeal.  Section 11, Rule 40
of the Rules of Court, which We have heretofore
quoted, provides for an instance when the Court of First Instance of Rizal (to which original jurisdiction over the case filed
by Ortigas properly belonged) could have validly
assumed original jurisdiction over the case. 
But that provision is inapplicable to the case at bar since Belmonte expressly objected to assumption of jurisdiction
by the Court of First Instance of Rizal.  Accordingly, the decision of the Court of
First Instance dated September 22, 1978, should likewise be set aside for lack of
jurisdiction.

WHEREFORE, without prejudice to the right of Ortigas to file the proper action with the proper court,
the following are hereby set aside for lack of jurisdiction:  (1) the decision of the Court of Appeals
dated October 12, 1979, in CA-G.R. No. 08609-SP; (2) the decision of the Court
of First Instance of Rizal dated September 22, 1978,
in Civil Case No. 28389; and (3) the judgment on the pleadings rendered by the
Municipal Court of San Juan, Rizal, in Civil Case No.
3773.  No pronouncement as to costs.

SO ORDERED.

Barredo, (Chairman), Aquino, Concepcion, Jr., and De Castro, JJ., concur.