G.R. No. 44911 ; November 21, 1938
ALEJANDRO IBARRA, plaintiff-appellant, vs. SEGUNDO AGUSTIN, defendant-appellee.

FACTS

Alejandro Ibarra filed an action for illegal detainer and damages against Segundo Agustin in the justice of the peace court of Camiling, Tarlac. Ibarra claimed ownership of a parcel of land with a house, alleging that Agustin had been occupying it as a tenant since July 5, 1934, and refused to vacate despite demand. Agustin contested the court’s jurisdiction, arguing that the complaint was not properly sworn before the justice of the peace and that the deed of sale with a right of repurchase (pacto de retro) in Ibarra’s favor was actually a usurious loan disguising a mortgage. The justice of the peace court assumed jurisdiction, ruled in favor of Ibarra, and ordered Agustin to vacate and pay rent. Agustin appealed to the Court of First Instance of Tarlac, which dismissed the case after finding the transaction to be a usurious loan and that Agustin remained in possession as owner, not as a tenant.

ISSUE

Whether the justice of the peace court (and the Court of First Instance on appeal) had jurisdiction over the illegal detainer case despite the defendant raising the question of ownership.

RULING

Yes, the courts had jurisdiction. Under the amended law (Act No. 3881), a justice of the peace court is not divested of jurisdiction in forcible entry or unlawful detainer cases even when the question of ownership is raised. However, on the merits, the Court of First Instance correctly found that the deed of sale with pacto de retro was actually a usurious loan secured by a mortgage, and Agustin never became a tenant but remained in possession as owner. Therefore, the action for illegal detainer failed, and the dismissal of the case was affirmed.

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