GR 116854; (November, 1996) (Digest)
G.R. No. 116854 November 19, 1996
AIDA G. DIZON, petitioner, vs. COURT OF APPEALS and ELIZABETH SANTIAGO, respondents.
FACTS
Petitioner Aida Dizon mortgaged her property to Monte de Piedad Bank, which foreclosed it. Dizon asked private respondent Elizabeth Santiago to repurchase the property. Santiago paid the bank, and Dizon executed a Deed of Absolute Sale over the property in favor of Santiago and her siblings. On the same day, a separate agreement granted Dizon an “option to buy back” the property within three months, stipulating that if she failed, she would vacate and turn over possession to the Santiagos. Dizon’s title was cancelled, and a new one issued to the Santiagos.
The option period lapsed without Dizon repurchasing the property. The Santiagos demanded she vacate, but she refused, prompting an ejectment suit. Dizon defended by claiming ownership and alleging the deed of sale was an equitable mortgage. The Metropolitan Trial Court (MTC) ordered Dizon to vacate. The Regional Trial Court (RTC), on appeal, reversed the MTC and surprisingly ordered the cancellation of the Santiagos’ title and reinstatement of Dizon’s. The Court of Appeals, upon reconsideration, reinstated the MTC’s ejectment order.
ISSUE
Whether a court, in an ejectment case, can order the cancellation of a Transfer Certificate of Title and make a final adjudication on the issue of ownership.
RULING
No. The Supreme Court affirmed the Court of Appeals, denying Dizon’s petition. The ruling is anchored on the fundamental nature of an ejectment suit, which is limited to determining physical or de facto possession, not legal ownership or de jure possession. While courts may provisionally examine the issue of ownership when it is intertwined with and necessary to resolve the question of possession, such a determination is merely provisional and without finality. It cannot conclusively settle title or justify the cancellation of a certificate of title.
Consequently, the RTC exceeded its jurisdiction in ordering the cancellation of the Santiagos’ title. In this ejectment suit, the Santiagos’ certificate of title constitutes prima facie evidence of ownership, entitling them to possession. Dizon’s right to possess was expressly conditioned on her repurchase under the separate agreement. Her failure to exercise the option within the stipulated period rendered her continued possession unlawful, obligating her to vacate. The unresolved question of whether the deed of sale was an equitable mortgage is immaterial to the possessory issue, as her right to stay was definitively terminated by the contract she signed.