G.R. No. 97749. March 19, 1993.
SALVADOR BUAZON, NICK BALDAZO AND NOLASCO BALDAZO, petitioners, vs. COURT OF APPEALS, BAGONG BARRIO HOUSING SERVICE COOPERATIVE, INC., represented by NICANOR R. SANTOS, respondents.

FACTS

The Bagong Barrio Housing Service Cooperative, Inc., represented by Nicanor R. Santos, filed an unlawful detainer complaint (Civil Case No. 18068) in the Metropolitan Trial Court (MTC) of Caloocan City against Salvador Buazon and tenants Nick and Nolasco Baldazo. The Cooperative claimed ownership of a residential building constructed in 1973 through the initiative of then-President Salvador Buazon, with construction costs advanced by Maximo Cabal and later repaid by the Cooperative from rental income. Buazon had previously filed ejectment cases (Civil Case Nos. 14435 and 14436) against lessees Mercedita Mabalay and Cresencia Villanueva, where the Cooperative testified in favor of the lessees. The MTC in those cases declared Buazon the owner and lessor, a decision affirmed on appeal. After those decisions became final and the lessees vacated, Buazon leased the units to the Baldazos. The Cooperative then demanded that Buazon and the Baldazos vacate, and upon refusal, filed the unlawful detainer case. The MTC ruled in favor of the Cooperative. On appeal, the Regional Trial Court (RTC) reversed the MTC, sustaining Buazon’s defense of res judicata based on the prior ejectment judgments. The Court of Appeals reversed the RTC and reinstated the MTC decision.

ISSUE

1. Whether the MTC lacked jurisdiction over the unlawful detainer case due to the Cooperative’s alleged non-compliance with Section 5(c) of B.P. Blg. 25.
2. Whether the MTC erred in applying the Rule on Summary Procedure despite the question of ownership being raised.
3. Whether the principle of res judicata bars the Cooperative’s unlawful detainer action.

RULING

1. No. The MTC had exclusive original jurisdiction over the unlawful detainer case as determined by law. Any non-compliance with Section 5(c) of B.P. Blg. 25 was at best a ground for dismissal for lack of cause of action or an affirmative defense to be alleged in the answer. Petitioners failed to raise this ground in a motion to dismiss or in their answer, thereby waiving it.
2. No. The MTC correctly applied the Rule on Summary Procedure. Under Section 1(A)(1) of the Rule and Section 33(2) of B.P. 129, inferior courts have exclusive original jurisdiction over forcible entry and unlawful detainer cases. The jurisdiction is not divested even if the defendant raises a question of ownership; the court can resolve the issue of ownership if only to determine the issue of possession.
3. No. The principle of res judicata does not apply. The Cooperative was not a party (whether as defendant, third-party defendant, or intervenor) in the prior ejectment cases (Civil Case Nos. 14435 and 14436), nor was it a successor-in-interest or real party in interest. It cannot be bound by a decision where it was not a party. Furthermore, under Section 7, Rule 70 of the Rules of Court, a judgment in an ejectment suit is conclusive only with respect to possession and does not bind or affect title or ownership. The prior judgment declaring Buazon the owner and lawful possessor was conclusive only against the defendants in that case (Mabalay and Villanueva) on the issue of possession, not against the Cooperative on the issue of ownership.
The Court of Appeals decision reinstating the MTC judgment was affirmed.