GR 175497; (October, 2011) (Digest)
G.R. No. 175497; October 19, 2011
MARY JOY ANNE GUSTILO and BONIFACIO M. PEÑA, Petitioners, vs. JOSE VICENTE GUSTILO III and TERESITA YOUNG also known as TITA SY YOUNG, Respondents.
FACTS
Petitioner Mary Joy Anne Gustilo and respondent Jose Vicente Gustilo III are heirs of their late father, Atty. Armando Gustilo. Following their father’s death, they entered into a Memorandum of Agreement (MOA) on August 31, 1993, adjudicating his properties. Hacienda Imelda was assigned to Mary Joy, although its title remained in the name of A.G. Agro-Industrial Corporation (A.G. Agro). Mary Joy immediately took possession of the land through her mother and planted sugarcane. In 1997, Jose Vicente, as president of A.G. Agro, leased Hacienda Imelda to respondent Tita Sy Young for five agricultural years. When the lease was about to expire, Mary Joy demanded Young surrender the land, but Young refused and continued cultivation. Mary Joy filed an action for recovery of possession, cancellation of the lease contract, and damages before the Regional Trial Court (RTC) of Cadiz City. Jose Vicente moved to dismiss, arguing the RTC lacked jurisdiction as the dispute was intra-corporate, belonging to a specially designated commercial court. The RTC granted the motion and dismissed the complaint. The Court of Appeals affirmed the dismissal.
ISSUE
Whether or not Mary Joy’s action presents an intra-corporate dispute that belongs to the jurisdiction of a specially designated commercial court.
RULING
No. The Supreme Court ruled that the action is not an intra-corporate dispute but a plenary action for recovery of possession, which falls under the jurisdiction of the regular courts. Jurisdiction is determined by the allegations in the complaint. Mary Joy’s complaint principally alleged recovery of possession, stating she had prior peaceable possession since 1993, which was disturbed when Young, with force, took over the property in 1997. The Court held that a party in prior peaceable possession can recover such possession even against the owner, and an action to recover possession is an ordinary civil proceeding to determine the better right to possess, independently of title. While the issue of ownership may be provisionally passed upon to resolve possession, such adjudication is not final or binding on ownership and does not convert the action into an intra-corporate case. Any intra-corporate issues regarding ownership may be threshed out in a separate proceeding in the proper commercial court. The Supreme Court granted the petition, reversed the Court of Appeals decision, and ordered the respondents to answer the complaint in the RTC.