G.R. No. 187696 - Cabling vs. Dangcalan

Filomena Cabling (petitioner) filed a Complaint for recovery of possession and damages against Rodrigo Dangcalan (respondent).
The dispute involved alleged encroachment by respondent on petitioner’s property, a 125-square-meter parcel of land designated as Lot No. 5056 in San Vicente, Malitbog, Southern Leyte, with an assessed value of ₱2,100.
Respondent had purchased an adjoining parcel of land from petitioner’s brother, Gerardo Montajes.

Petitioner alleged respondent constructed a perimeter fence encroaching on her lot, despite knowledge of boundaries. Petitioner’s demands and mediation attempts were unsuccessful.
Respondent denied encroachment and raised prescription as an affirmative defense, claiming he built the fence and his house since 1987, observed by petitioner, and thus the complaint filed only in 2001 was beyond the 10-year acquisitive prescription period under Article 1134, New Civil Code.

The 2nd Municipal Circuit Trial Court (MCTC) of Malitbog-Tomas Oppus ruled in favor of petitioner, holding:

Respondent encroached on about 13 square meters.
Respondent was a builder in bad faith for failing to verify boundaries.
Petitioner's right to possession was affirmed and respondent ordered to remove the encroachment, pay monthly rental, damages (moral ₱20,000, exemplary ₱10,000, actual ₱2,000), and costs.

Branch 25, Regional Trial Court (RTC) of Maasin City, on appeal by respondent, reversed the MCTC decision on grounds that:

The MCTC commissioner’s sketch plan lacked a report and clarity.
Prescription should have been resolved first, as respondent had timely raised it.
Respondent was a builder in good faith; action prescribed or plaintiff barred by laches.

On January 24, 2008, the CA denied the petition and annulled both RTC and MCTC decisions for lack of jurisdiction, holding:

The MCTC lacked jurisdiction because petition was an accion publiciana, a plenary action properly under RTC jurisdiction.
All proceedings and decisions were void; complaint dismissed without prejudice.

Petitioner filed a Petition for Review on Certiorari before the Supreme Court, challenging the CA’s jurisdictional ruling and seeking reinstatement of the MCTC decision.
Petitioner argued:

Dismissal forces re-litigation of issues already resolved.
RTC decision contravened applicable New Civil Code provisions on good faith and prescription.

Whether the Court of Appeals erred in nullifying the RTC and MCTC decisions due to alleged lack of jurisdiction of the MCTC over petitioner’s accion publiciana complaint for recovery of possession.