G.R. No. L-41162 September 5, 1975
JAMES JUDITH, MANUEL JUDITH AND TERESITA JUDITH LOZADA, plaintiffs-appellants, vs. MELCHOR ABRAGAN AND CONCHITA DE ABRAGAN, defendants-appellees.

FACTS

The plaintiffs-appellants, the Judith siblings, purchased a property from the defendants-appellees, the Abragans, via a deed of absolute sale on October 27, 1964. They subsequently leased the property back to the Abragans under a verbal agreement. After the Abragans allegedly failed to pay rentals, the Judiths filed a complaint for illegal detainer before the City Court of Cagayan de Oro on August 23, 1965, seeking eviction and payment of back rentals. The Abragans, in their answer, contested the action by asserting that the true agreement was either a real estate mortgage or a sale with right to repurchase, not an absolute sale, and that they had always remained in physical possession. They also noted a pending case for reformation of the deed in the Court of First Instance (CFI).
The City Court denied the Abragans’ motions to dismiss, proceeded to trial, and ruled in favor of the Judiths. On appeal, the CFI of Misamis Oriental, after the plaintiffs rested their case, granted the defendants’ demurrer to evidence and dismissed the ejectment case. The CFI held that the City Court lacked original jurisdiction because the core issue involved a question of ownership over the property, which was already the subject of the pending reformation case (Civil Case No. 2563) before another branch of the CFI.

ISSUE

The main issue is whether the Court of First Instance, in the exercise of its appellate jurisdiction, correctly dismissed the illegal detainer case on the ground that the City Court lacked original jurisdiction due to the involvement of a question of title.

RULING

The Supreme Court reversed the decision of the CFI and remanded the case for further proceedings. The Court reiterated the settled rule that jurisdiction over the subject matter is determined by the allegations in the complaint and the character of the relief sought at the time of its filing. The complaint in this case expressly alleged a lessor-lessee relationship founded on a deed of sale and a subsequent verbal lease, and it prayed for the recovery of physical possession and unpaid rentals. This squarely constituted an action for unlawful detainer, which was within the original jurisdiction of the City Court under the then-prevailing law (Section 88, par. 1 of Republic Act No. 296 , as amended).
The Court emphasized that a defendant cannot oust the city or municipal court of its jurisdiction over a possessory action by merely asserting ownership or claiming that the deed is not what it purports to be. The condition that defeats such jurisdiction is the necessity to adjudicate the question of title as a prerequisite to resolving possession. Here, the City Court could receive evidence on the issue of title solely for the purpose of determining the character and extent of possession, without making a definitive ruling on ownership. Therefore, the CFI erred in dismissing the appeal for lack of jurisdiction; it retained appellate jurisdiction to review the City Court’s decision on the merits. The pending reformation case in the CFI did not divest the City Court of its jurisdiction over the ejectment suit.