Lina Lim Lao vs CA
Facts:
On June 24, 1992, (herein Private Respondent Better Homes Realty and Housing Corporation) filed with
the Metropolitan Trial Court of Quezon City, a complaint for unlawful detainer, on the ground that (said
private respondent) is the owner of the premises situated at Unit I, No. 21 N. Domingo Street, Quezon
City, evidenced by Transfer Certificate of Title No. 22184 of the Registry of Deeds of Quezon City; that
(herein Petitioner Manuel Lao) occupied the property without rent, but on (private respondent's) pure
liberality with the understanding that he would vacate the property upon demand, but despite demand to
vacate made by letter received by (herein petitioner) on February 5, 1992, the (herein petitioner) refused
to vacate the premises.
In his answer to the complaint, (herein petitioner) claimed that he is the true owner of the house and lot
located at Unit I, No. 21 N. Domingo Street, Quezon City; that the (herein private respondent) purchased
the same from N. Domingo Realty and Development Corporation but the agreement was actually a loan
secured by mortgage; and that plaintiff's cause of action is for accion publiciana, outside the jurisdiction of
an inferior court.
On October 9, 1992, the Metropolitan Trial Court of Quezon City rendered judgment ordering the
(petitioner) to vacate the premises located at Unit I, No. 21 N. Domingo Street, Quezon City; to pay
(private respondent) the sum of P300.00 a day starting on January 31, 1992, as reasonable rent for the
use and occupation of the premises; to pay plaintiff P5,000.00, as attorney's fees, and costs.
On appeal to the Regional Trial Court of Quezon City, 4 on March 30, 1993, the latter court rendered a
decision reversing that of the Metropolitan Trial Court, and ordering the dismissal of the (private
respondent's) complaint for lack of merit, with costs taxed against (private respondent).
In its decision, the Regional Trial Court held that the subject property was acquired by (private
respondent) from N. Domingo Realty and Development Corporation, by a deed of sale, and (private
respondent) is now the registered owner under Transfer Certificate of Title No. 316634 of the Registry of
Deeds of Quezon City, but in truth the (petitioner) is the beneficial owner of the property because the real
transaction over the subject property was not a sale but a loan secured by a mortgage thereon.
Issue:
Does determining ownership, makes the MTC acts in excess of its jurisdiction?
Held:
We hold that this is not a hard and fast rule that can be applied automatically to all unlawful detainer
cases.
In the case at bar, a determination of the issue of ownership is indispensable to resolving the rights of
both parties over the property in controversy, and is inseparable from a determination of who between
them has the right to possess the same. Indeed, the very complaint for unlawful detainer filed in the
Metropolitan Trial Court of Quezon City is anchored on the alleged ownership of private respondent over
the subject premises. 12 The parties did not object to the incongruity of a question of ownership being
brought in an ejectment suit. Instead they both submitted evidence on such question, and the
Metropolitan Trial Court decided on the issue.
When the MTC decision was appealed to the Regional Trial Court, not one of the parties questioned the
Metropolitan Trial Court's jurisdiction to decide the issue of ownership. In fact, the records show that
both petitioner and private respondent discussed the issue in their respective pleadings before the
Regional Trial Court. 14 They participated in all aspects of the trial without objection to its jurisdiction to
decide the issue of ownership. Consequently, the Regional Trial Court aptly decided the issue based on
the exercise of its original jurisdiction as authorized by Section 11, Rule 40 of the Rules of Court.
These considerations, taken together with the fact that both the Metropolitan Trial Court and the
Regional Trial Court decided the issue of ownership, justify the review of the lower courts' findings of fact
and decision on the issue of ownership. This we now do, as we dispose of the second issue and decide the
case with finality to spare the parties the time, trouble and expense of undergoing the rigors of another
suit where they will have to present the same evidence all over again and where, in all probability, the
same ultimate issue of ownership will be brought up on appeal.
