G.R. No. 162366 ; November 10, 2006
FEDERICA M. SERRANO, LUCILA M. RAZON, ARMANDO M. LAYUG AND ROMEO MORALES, Petitioners, vs. SPOUSES ANSELMO GUTIERREZ AND CARMELITA GUTIERREZ, Respondents.

FACTS

Respondents, the registered owners of an agricultural lot, filed a complaint for forcible entry against petitioners before the Metropolitan Trial Court (MTC). They alleged that in February 2000, petitioners, by strategy and stealth, entered the property, constructed concrete structures, and dumped filling materials without consent. Petitioners, in their answer, claimed to be heirs of a prior owner and asserted actual, adverse, and continuous possession. Both parties submitted evidence, with respondents presenting a Transfer Certificate of Title (TCT) and petitioners presenting tax declarations and receipts.
The MTC dismissed the case for lack of jurisdiction, ruling that the core issue involved a question of ownership, not mere de facto possession, which was beyond its jurisdiction in an ejectment case. On appeal, the Regional Trial Court (RTC) acknowledged the MTC’s lack of jurisdiction but, invoking the second paragraph of Section 8, Rule 40 of the Rules of Court, decided the case on the merits. It ruled in favor of the respondents, holding that their Torrens title was superior evidence of ownership, which carries the right to possession. The Court of Appeals affirmed the RTC’s decision.

ISSUE

Whether the RTC correctly assumed jurisdiction and adjudicated the issue of ownership on appeal from the MTC’s dismissal of the forcible entry case.

RULING

Yes. The Supreme Court affirmed the decisions of the RTC and the Court of Appeals. The legal logic proceeds from the application of procedural rules governing appeals. While the MTC correctly declined to rule on ownership, as ejectment cases are limited to determining physical or de facto possession, its dismissal for lack of jurisdiction was erroneous. Forcible entry cases fall under the original exclusive jurisdiction of first-level courts regardless of the parties’ assertions of ownership. The MTC should have proceeded to resolve the issue of prior physical possession.
However, on appeal, the RTC properly applied Section 8, Rule 40. This rule states that if an inferior court tries a case on the merits without jurisdiction, the RTC on appeal shall not dismiss it if it has original jurisdiction, but shall decide it on the merits. The RTC had original jurisdiction over the subject matter (the property’s value being within its threshold). Since the parties had already fully submitted their position papers and evidence before the MTC, the purpose of a remand—to receive evidence—was already served. Therefore, the RTC was justified in evaluating the evidence and resolving the case, including the intertwined issue of ownership necessary to settle the possession dispute. Its ruling, based on the superiority of the respondents’ Torrens title, was correct.