G.R. No. L-57454 November 29, 1984
SPOUSES EPIFANIO DE LA CRUZ and LIBRADA PRINCIPE, petitioners, vs. HONORABLE COURT OF APPEALS and PHILIPPINE NATIONAL BANK, respondents.

FACTS

Petitioners obtained a loan from respondent Philippine National Bank (PNB) secured by a real estate mortgage over two lots. Upon default, PNB extrajudicially foreclosed the mortgage, purchased the properties at auction, and, after the redemption period, consolidated its titles. Years later, PNB sold the lots to third parties. As petitioners refused to vacate, PNB filed an ejectment suit in the Municipal Court of Bocaue. During its pendency, petitioners filed a separate action for reconveyance of title in the Court of First Instance.
The municipal court ruled in favor of PNB in the ejectment case. Petitioners appealed to the CFI, but their appeal was eventually dismissed for failure to prosecute, leading to a final judgment of ejectment. A writ of execution was issued. Petitioners then filed a petition for certiorari with the Court of Appeals, arguing the ejectment court lacked jurisdiction because ownership was in issue in the pending reconveyance suit. The CA dismissed their petition.

ISSUE

Whether the inferior court lacked jurisdiction over the ejectment case due to the pendency of a separate action for reconveyance of title.

RULING

The Supreme Court denied the petition, affirming the CA’s dismissal. The Court held that the municipal court retained jurisdiction over the ejectment case. The rule that an ejectment court loses jurisdiction when the resolution of the case hinges on a question of ownership applies only when ownership is genuinely in issue and seriously contested. Here, PNB’s ownership was established by a clear chain of events: valid foreclosure, auction sale, expiration of the redemption period, and consolidation of title. Petitioners’ action for reconveyance, filed nine years after title consolidation, constituted a mere claim without yet a judicial declaration nullifying PNB’s ownership.
The ejectment case could be resolved based on the fact of PNB’s prior possession derived from its ownership and the petitioners’ withholding of possession after the sale. The pendency of the reconveyance suit did not divest the inferior court of jurisdiction because the issue of ownership was not so intertwined with possession as to preclude a separate determination. The cases cited by petitioners were distinguished, as they involved situations where both parties asserted ownership and the issue was squarely presented and contested in the ejectment proceeding itself, which was not the circumstance here.