G.R. No. 173351 - BF Citiland Corp. vs. Otake

Case Summary (G.R. No. 173351)

Factual Background

Petitioner asserted ownership and sought judicial recovery of possession over its titled land. On 13 October 2000, it filed in the Metropolitan Trial Court (Branch 77) a complaint for accion publiciana, praying that respondent be ordered to vacate the subject lot and that respondent be directed to pay P15,000.00 per month as reasonable compensation for use and occupancy, from the filing of the case until actual vacation.

The complaint alleged that, according to the tax declaration on file with the Office of the Assessor, the lot had an assessed value of P48,000.00. A copy of the tax declaration was attached as Annex “B” of the complaint.

Metropolitan Trial Court Proceedings

On 25 April 2003, the Metropolitan Trial Court rendered judgment in favor of petitioner. It ordered respondent to vacate Lot 2, Block 101 and to surrender peaceful possession to petitioner. It further directed respondent to pay P10,000.00 per month as reasonable compensation for use and occupancy from the filing of the case until complete vacation, plus P20,000.00 as attorney’s fees and the costs of suit.

Respondent moved for reconsideration on the theory that she was a lawful possessor and buyer in good faith. The Metropolitan Trial Court denied the motion in an Order dated 20 June 2003 for lack of merit and lack of the requisite notice of hearing. The court then issued a writ of execution.

Respondent subsequently filed a motion to quash the writ of execution, arguing that the Metropolitan Trial Court had no jurisdiction over accion publiciana cases. The Metropolitan Trial Court denied the motion on 30 January 2004, holding that under Section 33 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7691, it had exclusive original jurisdiction in civil actions involving title to or possession of real property where the assessed value did not exceed P50,000.00 in Metro Manila.

Petitioner then moved for a special order of demolition, alleging that respondent’s possession involved improvements. Respondent opposed the motion as premature and sought reconsideration of the 30 January 2004 order. She argued that although the MeTC might have jurisdiction over accion publiciana, the total value of the lot together with the residential house built on it exceeded P50,000.00. The Metropolitan Trial Court, in an Order dated 23 July 2004, ruled that because the lot’s assessed value was P48,000.00, it fell within its jurisdictional grant under Section 33. The court also held that since the action was only for recovery of the lot, the residential house respondent built should not be included in computing the assessed value of the property. It granted petitioner’s demolition motion and denied respondent’s motion for reconsideration.

Rule 65 Petition in the Regional Trial Court

Respondent filed in the Regional Trial Court (Branch 257) a petition for certiorari under Rule 65, seeking dismissal of the accion publiciana case for lack of jurisdiction. The Regional Trial Court ruled that accion publiciana lay within the exclusive original jurisdiction of regional trial courts and that the amendment to Batas Pambansa Blg. 129 did not change the doctrine that accion publiciana belongs to the RTC regardless of value.

In its Decision dated 29 December 2004, the RTC made permanent the preliminary injunction previously issued and dismissed the accion publiciana case. It ruled that the Metropolitan Trial Court had no jurisdiction over the case and that its orders and decision were therefore void or without force and effect.

Motion for Reconsideration and Appeal to the Court of Appeals

Petitioner moved for reconsideration, reiterating that the assessed value determination required by Section 33 of Batas Pambansa Blg. 129, as amended, governed jurisdiction. Petitioner also argued that respondent had become estopped from assailing the Metropolitan Trial Court’s jurisdiction, considering respondent’s participation throughout the proceedings and her failure to timely object.

In denying the motion for reconsideration, the Regional Trial Court maintained that it had correctly found jurisdiction to lie with the regional trial courts.

Thereafter, petitioner filed in the Court of Appeals a petition for review under Rule 42, contending that the Regional Trial Court erred in ruling that the MeTC had no jurisdiction. Respondent opposed and maintained that the MeTC lacked jurisdiction and that lack of jurisdiction could be raised anytime.

Court of Appeals Disposition: Wrong Mode of Appeal

In a 28 July 2005 Resolution, the Court of Appeals dismissed petitioner’s petition for review. It held that, because the Regional Trial Court decision was rendered in the exercise of its original jurisdiction in a Rule 65 certiorari petition, the proper mode of appeal was a notice of appeal, not a petition for review under Rule 42. It reasoned that petition for review under Rule 42 could be used only when the Regional Trial Court decision was rendered in the exercise of its appellate jurisdiction.

The Court of Appeals denied petitioner’s motion for reconsideration in a 5 July 2006 Resolution. Petitioner then filed the instant petition for review before the Supreme Court.

Issues for Resolution

The Supreme Court framed two principal issues: first, whether a petition for review under Rule 42 was the proper mode of appeal from a Regional Trial Court decision in a Rule 65 certiorari proceeding; and second, whether the Regional Trial Court correctly ruled that the Metropolitan Trial Court had no jurisdiction over accion publiciana cases.

Legal Basis and Reasoning of the Supreme Court

On the procedural issue, the Supreme Court held that under Section 2, Rule 41 of the Rules of Court, the rule is categorical: when the Regional Trial Court decided a case in the exercise of its original jurisdiction, the appeal to the Court of Appeals must be taken by filing a notice of appeal. Conversely, when the Regional Trial Court exercised appellate jurisdiction, the appeal is taken by a petition for review under Rule 42.

The Court explained that a petition for certiorari under Rule 65 is an original action, and that it does not interrupt the course of the principal case unless a temporary restraining order or a writ of preliminary injunction was issued against the public respondent. Because the Regional Trial Court decision was rendered in an original Rule 65 certiorari proceeding, the proper appeal should have been a notice of appeal, not a Rule 42 petition for review. Thus, the Court of Appeals’ ruling on the technical mode was aligned with the general rule.

However, the Supreme Court applied the doctrine of liberal construction. It emphasized that dismissal of appeals purely on technical grounds is frowned upon, and that substantial justice required that the case not be remanded into a “new round” of litigation between the same parties for the same cause and subject matter merely due to an incorrect procedural label. The Court thus ruled that despite the wrong mode of appeal, the Court of Appeals should not have dismissed the petition without reaching its merits.

On the jurisdictional issue, the Supreme Court addressed the substantive question of which court had authority to hear accion publiciana based on assessed value thresholds under Batas Pambansa Blg. 129, as amended by Republic Act No. 7691. It recalled that under BP 129, accion publiciana as a plenary action must be brought before the regional trial courts, but that RA 7691 limited the jurisdiction of regional trial courts by distributing real actions depending on the assessed value of the property. Under Section 33, the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts exercise exclusive original jurisdiction in civil actions involving title to or possession of real property or any interest therein where the assessed value does not exceed P20,000.00, or, for cases in Metro Manila, where the assessed value does not exceed P50,000.00, excluding certain specified components.

The Supreme Court held that, under BP 129 as amended, jurisdiction even in acc

Case Syllabus (G.R. No. 173351)

BF Citiland Corporation petitioned the Supreme Court to review the Court of Appeals Resolutions dated 28 July 2005 and 5 July 2006 in CA-G.R. SP No. 88995.
The 28 July 2005 Resolution dismissed BF Citiland Corporation’s petition for review challenging a Regional Trial Court (Branch 257) Decision dated 29 December 2004.
The 5 July 2006 Resolution denied BF Citiland Corporation’s motion for reconsideration.

Parties and Procedural Posture

BF Citiland Corporation was the registered owner of the subject property and was the petitioner before the Supreme Court.
Marilyn B. Otake was the respondent and the defendant in the accion publiciana case filed before the Metropolitan Trial Court (Branch 77) of Paranaque City.
The procedural path included a Rule 65 petition for certiorari filed with the RTC, followed by a Rule 42 petition for review filed with the Court of Appeals.
The Court of Appeals dismissed the Rule 42 petition on the procedural ground that the appeal mode used was allegedly improper.
The Supreme Court granted the petition, reversed the appellate dismissals, and reinstated the MeTC rulings.

Key Factual Allegations

BF Citiland Corporation claimed ownership over Lot 2, Block 101 in Brisbane Street, Phase III, BF Homes Subdivision, Paranaque City, covered by TCT No. 52940.
The lot carried an assessed value of P48,000.00 based on a tax declaration filed with the Office of the Assessor.
Marilyn B. Otake purchased the adjoining Lot 1, Block 101 covered by TCT No. 77549 on 24 February 1987.
Records showed that Otake occupied not only the purchased lot but also encroached upon BF Citiland Corporation’s lot.
BF Citiland Corporation alleged that Otake’s occupation amounted to wrongful possession warranting recovery of possession and compensation.

Civil Action for Accion Publiciana

On 13 October 2000, BF Citiland Corporation filed an accion publiciana complaint in the MeTC (Branch 77) seeking the vacation of the subject lot and surrender of possession.
The complaint prayed for payment of P15,000.00 per month as reasonable compensation for use and occupancy.
The MeTC rendered judgment ordering Otake to vacate and surrender peaceful possession to BF Citiland Corporation.

MeTC Decision and Orders

In its 25 April 2003 Decision, the MeTC ruled for BF Citiland Corporation and ordered:
Otake and persons claiming rights under her to vacate Lot 2, Block 101 and surrender peaceful possession to the plaintiff.
Otake to pay P10,000.00 per month as reasonable compensation from the filing of the case until full vacation.
Otake to pay P20,000.00 as attorney’s fees and pay costs of the suit.
Otake moved for reconsideration, arguing she was a lawful possessor and buyer in good faith.
The MeTC denied the motion for reconsideration in an Order dated 20 June 2003, citing lack of merit and lack of requisite notice of hearing.
The MeTC issued a writ of execution after denial of reconsideration.

Jurisdictional Challenges in MeTC

Otake moved to quash the writ of execution on the theory that the MeTC lacked jurisdiction over accion publiciana cases.
In its 30 January 2004 Order, the MeTC denied the motion to quash, relying on Section 33 of Batas Pambansa Blg. 129 as amended by Republic Act 7691.
The MeTC held that under BP 129, as amended, it had exclusive original jurisdiction over civil actions involving title to or possession of real property whose assessed value did not exceed P50,000.00 for Metro Manila.
BF Citiland Corporation then sought a special order of demolition on the allegation that improvements introduced by Otake were present in the executed lot.
In a 23 July 2004 Order, the MeTC held that because the lot had an assessed value of P48,000.00, it fell within the jurisdictional limit.
The MeTC ruled that where the action was only for recovery of the lot, the residential house built on the lot should not be included in computing the assessed value for jurisdiction.

RTC Certiorari Ruling

Otake filed a Rule 65 petition for certiorari with the Regional Trial Court (Branch 257) to seek dismissal of the accion publiciana case for lack of MeTC jurisdiction.
In its 29 December 2004 Decision, the RTC held that accion publiciana was within the exclusive original jurisdiction of regional trial courts.
The RTC also ruled that BP 129, as amended, did not alter the jurisprudential doctrine that accion publiciana falls under RTC exclusive original jurisdiction.
The RTC made its earlier injunction permanent, held the MeTC case void for lack of jurisdiction, and dismissed the action.

RTC Reconsideration and Appeal Issues

BF Citiland Corporation moved for reconsideration, asserting:
The accion publiciana was a civil action involving title to or possession of real property contemplated in Section 33 of BP 129, as amended.
Otake was estopped from questioning jurisdiction due to her participation in MeTC proceedings and her failure to timely object.
Otake countered that:
Accion publiciana conferred jurisdiction on the RTC regardless of the property value.
Lack of jurisdiction could be raised anytime, so estoppel should not apply.
After denial of reconsideration, BF Citiland Corporation filed with the Court of Appeals a Rule 42 petition for review.
The Court of Appeals dismissed the petition, reasoning that appeals from a RTC decision rendered in original jurisdiction should proceed via notice of appeal, not Rule 42.

Court of Appeals Dismissal Rationale

The Court of Appeals treated the RTC’s Rule 65 certiorari disposition as a dec