G.R. No.
L-24680            October 7, 1968 On January 31, 1949, a contract of lease over said two lots was entered into by and
JESUSA VDA. DE MURGA, plaintiff-appellee,
vs.
JUANITO CHAN, defendant-appellant.
Jose Go and Fernando P. Blanco for plaintiff-appellee.
Abelardo A. Climaco, T. de los Reyes, Enrique A. Fernandez and Ernani Cruz Paño for
defendant-appellant.
ANGELES, J.:
In this appeal, two issues involving questions of law are posed for resolution: First,
whether or not the allegations in the complaint constitute a cause of action for unlawful
detainer, and confer jurisdiction over the case to the municipal court (now city court) of
Zamboanga City, under the provisions of Rule 70 of the Rules of Court and decisions
interpreting the same, when particularly considered in the light of the contexture of the
pertinent letter of demand to vacate the leased premises (Annex J of the Complaint),
couched in the following wise:
Please be advised further that we reiterate our demand made to you in our
registered letter dated February 4, 1959 (to vacate the leased premises) which
was received by you on the 10th instant, unless you pay the amount of Six
Hundred pesos (P600.00) or Seven Hundred pesos (P700.00) as new rental per
our letter of January 19, 1959, before the expiration of the 15-day period
granted you for vacating the same.
and, Second, whether or not the lessor and the lessee had agreed upon an automatic
renewal of the lease of the premises, under the stipulation in clause "7" of the
corresponding contract of lease, containing the following agreement:
7. — That upon the termination of the term of Ten (10) years above expressed,
the said Jesusa Vda. de Murga shall have the option to purchase the building or
buildings belonging to and constructed by the said Juanito Chan, and the price
of said building or buildings shall be determined by three commissioners, two
of whom shall be appointed by each of the parties, and the remainder
commissioner shall be appointed by both. However, in the event that the said
Jesusa Vda. de Murga shall not exercise the right granted her for any reason or
cause, this contract of lease shall be automatically renewed but the period for
said renewal shall, however, be fixed and adjusted again by the parties. It is
agreed further that in case of said renewal, the rental shall also be adjusted by
the parties depending on the business condition which shall then at that time
prevail. (Exhibit A.)
Jesusa Vda. de Murga was the owner of two parcels of land in the City of Zamboanga,
designated as lots 36 and 38 of the cadastral plan of the place, and covered by Transfer
Certificates of Title Nos. 3237 and 3238, respectively.
between Jesusa Vda. de Murga as lessor, and Juanito Chan as lessee, the basic terms of
which pertinent to the present case are: The period of the lease was ten (10) years from
January 31, 1949; the lessee to pay a monthly rent of P500.00 within the first ten days of
every month; with the consent of the lessor, the lessee may introduce improvements on
the land; and Clause "7" quoted hereinabove. (Exhibit A.)
Upon taking possession of the leased premises, with the consent of the lessor, the lessee
introduced improvements on the land consisting of buildings of the total costs of
P70,000.00. It is not disputed that the lessee paid in full the monthly rent during the ten-
year period of the lease.
As early as July 23, 1958, before the expiration of the ten-year period of the lease, there
had been intercourse of communications between the lessor and the lessee for the
renewal of the lease, but the parties failed to arrive at an agreement; hence, this action by
the lessor against the lessee.
Thus, on July 23, 1958, the lessor informed the lessee of her willingness to renew the
lease for five years at a monthly rent of P700.00. (Exhibit B.) In his reply the lessee said:
... Much as I am willing to consider the suggested increase of rental, however, I
would like to plead with you that due to very poor business at present, I may
not be able to consider your indicated increase. (Exhibit C.)
On August 1, 1958, the lessor advised the lessee that:
Beginning February 1, 1959, ... the rental of my lots ... will be P700.00. (Exhibit
D.)
On January 18, 1959, the lessee advised the lessor that she (lessor) should purchase the
buildings constructed on the land in accordance with the stipulation in the contract of
lease, and —
... In case you do not agree with the purchase of the aforesaid buildings, I am
willing to continue occupying the land and execute a new contract of lease, but I
am appealing to you to take into consideration the prevailing business
conditions by reducing the monthly rental to P400.00, ... (Exhibit L.)
On January 19, 1959, the lessor replied that —
... she rejects the option to purchase the buildings, ... and her present last offer
is: (a) Six hundred pesos (P600.00) rentals payable within the first fifteen days
of every month, without contract; or (b) Seven hundred pesos (P700.00)
rentals payable within the first fifteen days of every month, one year advanced
rental, with a five-year contract. (Exhibit F.)
On January 20, 1959, the lessor informed the lessee that the conditions stated in the
latter's letter of January 18, 1959, were not acceptable to her. (Exhibit G.)
On January 21, 1959, the lessee advised the lessor that he (lessee) cannot accept the
conditions stated in her (lessor's) letters of January 19 and 20, 1959 —
... y, insists que Vd. compre mis casas enclavadas en los lotes objeto de
arrendamiento. Y en caso de su negative seguire ocupando el solar bajo el pago
de un alquiler mensual de Quinientos pesos (P500.00) debido al negocio
reinante en estos dias, tal como esta dispuesto en el contrato de arrendamiento
firmado por Vd. y yo el dia 31 de Enero de 1949." (Exhibit H.)
On February 4, 1959, the lessor made demand on the lessee to vacate the premises —
... for the reason that the lease contract had expired on January 31, 1959, ... and
the lessor had waived the right to exercise the option granted her under
paragraph "7" of said contract, ... (Exhibit I.)
On February 16, 1959, the lessee sent his check for P500.00 to the lessor in payment of
the monthly rental corresponding to the month of February, 1959. (See Exhibit J.)
On February 19, 1959, the lessor returned to the lessee the check which the latter had
sent to the former, stating further in the letter that she was demanding that the leased
premises be vacated, if he (lessor) would not agree to pay the new rental of P600.00 or
P700.00 a month beginning February 1, 1959, as embodied in the letter, Exhibit J,
hereinabove quoted.
Disregarding the written demand of the lessor, dated February 19, 1959, Exhibit J, the
lessee chose to remain in the possession of the leased premises and insisted that the
contract of lease stipulated an automatic renewal of the lease, and conformably thereto,
he has a right to continue occupying the premises; and as token of his decision, he sent to
the lessor his check for P500.00 in payment of the monthly rent corresponding to the
month of February 1959. The lessor was undoubtedly not satisfied with the tendered
amount of P500.00, because she had demanded P600.00 or P700.00, as new monthly
rent as a condition for the renewal of the lease. And without any further definite demand
on the lessee to vacate the premises filed, on March 10, 1959, a complaint of unlawful
detainer in the municipal court of Zamboanga City against the lessee, Juanito Chan, to
eject the latter from the leased premises. The facts alleged in the complaint as cause of
action, consisted in reproducing and reiterating the substance of the correspondence
exchanged between lessor and lessee, as narrated above, and claiming that the
possession of the lessee of the premises had become illegal by his failure and refusal to
pay the increased new rental. For relief, the plaintiff prayed that the defendant be
ordered to vacate the premises, and "TO PAY THE NEW RENTS DEMANDED OF P600.00
or P700.00 FROM FEBRUARY 1, 1959 MONTHLY AS THE CASE MAY BE." Attached to the
complaint, as annexes thereto, were copies of the letters exchanged between the lessor
and the lessee, Exhibits B to J.
In his answer (as amended), the defendant admitting the genuineness and authenticity of
the letters annexed to the complaint, but traversing some of the allegations therein,
raised the defenses of lack of jurisdiction of the court over the case, and lack of cause of
action for unlawful detainer.
After a trial, decision was rendered ordering the defendant to vacate the premises, to pay
the plaintiff the sum of P600.00 as monthly rent from February 1, 1959, and P500.00 as
attorney's fees.
The defendant appealed from the decision to the Court of First Instance of Zamboanga
City. Before this Court, the defendant again raised the special defenses of lack of
jurisdiction of the municipal court and lack of cause of action for unlawful detainer.
Ruling on the issue of lack of jurisdiction, the court said:
With reference to the contention of defendant that the municipal court had no
jurisdiction to try this case because the interpretation, application and
enforcement of the terms of the Lease Agreement is within the competence of a
court higher than that of the municipal court, deserves hardly any discussion.
Suffice it to say that the jurisdiction of the municipal court is grounded on
Section 88 of the Judiciary Act of 1948.
After a trial, the Court of First Instance rendered judgment ordering the defendant to
vacate the premises, to pay the plaintiff the sum of P1,200.00 from February 1, 1959, as
monthly rental of the land, and P2,000.00 as attorney's fees.
From the foregoing decision, the defendant interposed a direct appeal to this Court.
Therefore, only questions of law may be considered in this appeal.
Among the four errors assigned by the appellant in his brief, the first two pose the issue
of lack of jurisdiction of the municipal Court and of the lack of cause of action for
unlawful detainer; the remaining errors delving on questions of fact which, by reason of
the nature of the appeal are, therefore, deemed admitted and may not be reviewed in this
appeal.
In relation to the issue of lack of jurisdiction of the municipal court over the case, it is to
be noted that, after the lessor and the lessee had failed to agree on the renewal of the
lease which terminated on January 31, 1959, the lessor, on February 19, 1959, sent the
demand letter hereinabove quoted, Exhibit J. It was, then, as it is now, the contention of
the lessee that such demand is not that kind of demand contemplated in the Rules of
Court as complying with the jurisdictional requirement — that demand to vacate is
indispensable in order to determine whether the tenant's possession has become illegal.
On this matter, the rulings in the following cases are pertinent and applicable:
The notice giving lessee the alternative either to pay the increased rental or
otherwise to vacate the land is not the demand contemplated by the Rules of
Court in unlawful detainer cases. When after such notice, the lessee elects to
stay, he thereby merely assumes the new rental and cannot be ejected until he
 defaults in said obligation and necessary demand is first made. (Manotok vs.
Guinto, L-9540, April 30, 1957.)
The lessor may, under Article 1569 of the Civil Code, judicially disposses the
lessee for default in the payment of the price agreed upon. But where such
default is based on the fact that the rent sought to be collected is not that
agreed upon, an action for ejectment cannot lie. (Belmonte vs. Martin, 42 Off.
Gaz. No. 10, 2146.)
In the case at bar, it clearly appears from the demand letter of February 19, 1959, that
the obligation to vacate the leased premises would be dependent on the failure of the
lessee to agree to the new rent demanded by the lessor. As the lessee, however, was in
the physical possession of the land by virtue of a prior contract of lease, and the demand
was in the alternative imposing a new rental, even without taking into account the
efficacy of the stipulation for an automatic renewal of the lease, which shall be discussed
hereafter, in the light of the ruling in Belmonte vs. Martin, supra, without any
subsequent definite demand to vacate the premises, subject to no condition, the lessee
did not incur in default which would give rise to a right on the part of the lessor to bring
an action of unlawful detainer.
Delving on the second special defense to wit, that the allegations in the complaint do not
constitute a cause of action of unlawful detainer, it is the contention of the lessee-
appellant that clause "7" of the contract of lease, quoted hereinabove, meant an express
grant to the lessee to renew the lease at his option, contrary to the claim of the lessor-
appellee that there must be a prior mutual agreement of the parties. As we read clause
"7", We find that it envisioned the happening of two eventualities at the expiration of the
lease on January 31, 1959 — either the lessor may purchase the improvements
constructed by the lessee on the land, or in case the lessor fails, for any cause or reason,
to exercise the option to buy, the lease shall be deemed automatically renewed. The
evidence has established that the lessor had refused to buy the buildings on the land. The
statement in said clause "7" that in case of renewal the duration of the lease and the new
rental to be paid shall be adjusted by the parties, is of no moment in the solution of the
issue, whether or not the facts alleged in the complaint constitute a cause of action of
unlawful detainer. The pleadings of the parties, and the annexes thereto, clearly show
that the jugular vein of the controversy hinges on the correct interpretation of clause "7"
of the contract of lease, a matter outside the jurisdiction of the municipal court. The
lessor-appellee maintains that the lease had terminated on January 31, 1959, renewable
only upon a new agreement of the parties; on the other hand, the lessee-appellant
contends that, inasmuch as the controversy hinges on the interpretation of clause "7" of
the contract, that is, whether or not said clause contemplated an automatic renewal of
the lease, the action was not for unlawful detainer but one not capable of pecuniary
estimation and, therefore, beyond the competence of the municipal court.
The contention of the lessee-appellant must be sustained.
In Cruz vs. Alberto, 39 Phil. 991, the contract of lease had the following provision:
That the term of this contract of lease shall be six years from the date of the
execution, and extendible for another six years agreed upon by both parties.
It was contended by the lessor that the lease cannot be extended except upon mutual
agreement. Ruling on the contention, the Supreme Court said:
We are of the opinion that the trial judge was entirely correct in his
interpretation of the contracts in question; and though it must be admitted that
this interpretation renders the words "agreed upon by both parties"
superfluous yet this does not involve any strain upon the meaning of the entire
passage. If the interpretation which the appellant would have us adopt be true,
the entire clause relative to the extension of the term would be superfluous, for
if the extension is only to be effective upon a new agreement of the parties to be
made at the expiration of the original term, why should anything at all be said
about an extension? Parties who are free to make one contract of lease are
certainly free to make a new one when the old has expired without being
reminded of their faculty to do so by the insertion of a clause of this kind in the
first lease. This would not only be superfluous but nonsensical. The clause
relative to the extension of the lease should, if possible, be so interpreted as to
give it some force.
As we interpret the contracts before us, the parties meant to express the fact
that they had already agreed that there might be an extension of the lease and
had agreed upon its duration, thus giving the defendant the right of election to
take for a second term or to quit upon the expiration of the original term. The
clause in question has the same meaning as if the words "agreed upon by both
parties" had been omitted and the passage had closed with a period after the
word "years" in the first contract and after "extension" in the third contract.
It has been held by this court that the word "extendible" standing without
qualification in a contract of lease, means that the term of the lease may be
extended and is equivalent to a promise to extend, made by the lessor to the
lessee, and, as unilateral stipulation, obliges the promisor to fulfill his promise.
(Legarda Koh vs. Ongsiako, 36 Phil. Rep. 185). Such a stipulation is supported
by the consideration which is at the basis of the contract of lease (16 R.C.L. pp.
883, 884) and obviously involves a mutuality of benefit, or reciprocity, between
the parties, notwithstanding the right of election is conceded solely to the
lessee. As a general rule, in construing provisions of this character, the tenant is
favored, where there is any uncertainty, and not the landlord, upon the
principle that a grant should be taken most strongly against the grantor. (15
R.C.L. p. 884, 24 Cyc. 915.)
In the case of Legarda Koh vs. Ongsiaco, 36 Phil. 189-190, the contract of lease had this
provision:
The term of the said contract shall be for one year, counting from the 1st of
December of the present year (1963) which term shall be extendible at the will
of both parties.
Said the Supreme Court:
 According to Article 1091 of the Civil Code, obligations arising from contracts
have legal force between the contracting parties and must be fulfilled in
accordance with their stipulation. Therefore, if the defendant bound himself to
lease his properties for the period of one year, which term should be
extendible, it is evident and strictly in accord with justice that the plaintiff-
lessee has a right, at the termination of the first period of one year, to have the
said contract of lease renewed in fulfillment of the stipulated extension of the
term of the lease; otherwise, the clause contained in the document Exhibit 1,
that the lease at its termination would be extendible, would be worthless.

The defendant-appellant is wrong in his contention that the renewal or

extension of the contract depended solely upon himself, notwithstanding the
stipulations contained in said contract, inasmuch as the renewal and
continuation of the lease could not be left wholly to the plaintiff's free will,
without counting on the defendant's consent — a consent expressly granted in
the promise that the term would be extended, which term, although its
duration was not fixed, should be understood to be for another year, a period
equal to and not greater than the term of the lease.

When a contract of lease provides that the term thereof is extendible, the
agreement is understood as being in favor of the lessee, and the latter is
authorized to renew the contract and to continue to occupy the leased
property, after notifying the lessor to that effect. The lessor can withdraw from
the said contract only after having fulfilled his promise to grant the extension of
time stipulated therein, unless the lessee has failed to comply with or has
violated the conditions of the contract. It is not necessary that the extension be
expressly conceded by the lessor because he consented thereto in the original
contract.

UPON THE FOREGOING CONSIDERATIONS, We declare that the municipal court (now
city court) of Zamboanga City had no jurisdiction over the case; therefore, the appealed
decision is set aside and reversed, with costs against the plaintiff-appellee.
 [G.R. NO. 158121 : December 12, 2007]
HEIRS OF VALERIANO S. CONCHA, SR. NAMELY: TERESITA CONCHA-PARAN,
VALERIANO P. CONCHA, JR., RAMON P. CONCHA, EDUARDO P. CONCHA,
REPRESENTED BY HIS LEGAL GUARDIAN, REYNALDO P. CONCHA, ALBERTO P.
CONCHA, BERNARDO P. CONCHA and GLORIA, Petitioners, v. SPOUSES GREGORIO J.
LUMOCSO1 and BIENVENIDA GUYA, CRISTITA J. LUMOCSO VDA. DE DAAN, AND
SPOUSES JACINTO J. LUMOCSO and BALBINA T. LUMOCSO, 2 Respondents.
DECISION
PUNO, C.J.:
On appeal by certiorari under Rule 45 of the Rules of Court are the decision3 and
resolution4 of the Court of Appeals (CA) in CA-G.R. SP No. 59499, annulling the
resolutions5 and order6 of the Regional Trial Court (RTC) of Dipolog City, Branch 9, in
Civil Case Nos. 5188, 5433 and 5434 which denied the separate motions to dismiss and
Joint Motion for Reconsideration filed by the respondents.
The relevant facts are undisputed.
Petitioners, heirs of spouses Dorotea and Valeriano Concha, Sr., claim to be the rightful
owners of Lot No. 6195 (Civil Case No. 5188), a one-hectare portion of Lot No. 6196-A
(Civil Case No. 5433), and a one-hectare portion of Lot Nos. 6196-B and 7529-A (Civil
Case No. 5434), all situated in Cogon, Dipolog City, under Section 48(b) of
Commonwealth Act No. 141 (C.A. No. 141), otherwise known as the Public Land Act.
Respondent siblings Gregorio Lumocso (Civil Case No. 5188), Cristita Lumocso Vda. de
Daan (Civil Case No. 5433) and Jacinto Lumocso (Civil Case No. 5434), are the patent
holders and registered owners of the subject lots.
The records show that on August 6, 1997, Valeriano Sr.7 and his children, petitioners
Valeriano Jr., Ramon, Eduardo, Alberto, Bernardo, Teresita, Reynaldo, and Gloria, all
surnamed Concha, filed a complaint for Reconveyance and/or Annulment of Title with
Damages against "Spouses Gregorio Lomocso and Bienvenida Guya." They sought to
annul Free Patent No. (IX-8)985 and the corresponding Original Certificate of Title (OCT)
No. P-22556 issued in the name of "Gregorio Lumocso" covering Lot No. 6195. The case
was raffled to the RTC of Dipolog City, Branch 9, and docketed as Civil Case No. 5188. In
their Amended Complaint, petitioners prayed that judgment be rendered:
1. Declaring Free Patent No. (IX-8)985 and Original Certificate of Title No. 22556 issued
to defendants as null and void ab initio;
2. Declaring Lot No. 6195 or 1.19122-hectare as private property of the plaintiffs under
Sec. 48(b) of CA No. 141 otherwise known as the Public Land Act as amended by RA
1942;
3. Ordering the defendant Lomocsos to reconvey the properties (sic) in question Lot No.
6195 or the 1.19122 hectares in favor of the plaintiffs within 30 days from the finality of
the decision in this case and if they refuse, ordering the Clerk of Court of this Honorable
Court to execute the deed of reconveyance with like force and effect as if executed by the
defendant[s] themselves;
4. Ordering defendant Lomocsos to pay P60,000.00 for the 21 forest trees illegally
cut; P50,000.00 for moral damages; P20,000.00 for Attorney's fees; P20,000.00 for
litigation expenses; and to pay the cost of the proceedings;
5. Declaring the confiscated three (sic) flitches kept in the area of the plaintiffs at
Dampalan San Jose, Dipolog with a total volume of 2000 board feet a[s] property of the
plaintiff [they] being cut, collected and taken from the land possessed, preserved, and
owned by the plaintiffs;
6. The plaintiffs further pray for such other reliefs and remedies which this Honorable
Court may deem just and equitable in the premises.8
On September 3, 1999, two separate complaints for Reconveyance with Damages were
filed by petitioners,9 this time against "Cristita Lomocso Vda. de Daan" for a one-hectare
portion of Lot No. 6196-A and "Spouses Jacinto Lomocso and Balbina T. Lomocso" for a
one-hectare portion of Lot Nos. 6196-B and 7529-A. The two complaints were also
raffled to Branch 9 of the RTC of Dipolog City and docketed as Civil Case Nos. 5433 and
5434, respectively. In Civil Case No. 5433, petitioners prayed that judgment be rendered:
1. Declaring [a] portion of Lot 6196-A titled under OCT (P23527) 4888 equivalent to one
hectare located at the western portion of Lot 4888 as private property of the plaintiffs
under Sec. 48(B) CA 141 otherwise known as Public Land OCT (sic) as amended by RA
No. 1942;
2. Ordering the defendant to reconvey the equivalent of one (1) hectare forested portion
of her property in question in favor of the plaintiffs within 30 days from the finality of
the decision in this case segregating one hectare from OCT (P23527) 4888, located at its
Western portion and if she refuse (sic), ordering the Clerk of Court of this Honorable
Court to execute the deed of reconveyance with like force and effect, as if executed by the
defenda[n]t herself;
3. Ordering defendant to pay P30,000.00 for the 22 forest trees illegally cut; P20,000.00
for moral damages; P20,000.00 for Attorney's fees; P20,000.00 for litigation expenses;
and to pay the cost of the proceedings.10
In Civil Case No. 5434, petitioners prayed that judgment be rendered:
1. Declaring [a] portion of Lot 7529-A under OCT (P-23207) 12870 and Lot 6196-B OCT
(P-20845) 4889 equivalent to one hectare located as (sic) the western portion of said
lots as private property of the plaintiffs under Sec. 48(b) of [C.A. No.] 141 otherwise
know[n] as the [P]ublic [L]and [A]ct as amended by RA 1942;
2. Ordering the defendants to reconvey the equivalent of one (1) hectare forested portion
of their properties in question in favor of the plaintiffs within 30 days from the finality of
the decision in this case segregating one hectare from OCT (P-23207) 12870 and OCT (T-
20845)-4889 all of defendants, located at its Western portion and if they refuse, ordering
the Clerk of Court of this Honorable Court to execute the deed of reconveyance with like
force and effect as if executed by the defendants themselves[;]
3. Ordering defendants to pay P20,000.00 for the six (6) forest trees illegally
cut; P20,000.00 for moral damages; P20,000.00 for Attorney's fees; P20,000.00 for
litigation expenses; and to pay the cost of the proceedings.11
The three complaints12 commonly alleged: a) that on May 21, 1958, petitioners' parents
(spouses Valeriano Sr. and Dorotea Concha) acquired by homestead a 24-hectare parcel
of land situated in Cogon, Dipolog City; b) that since 1931, spouses Concha "painstakingly
preserved" the forest in the 24-hectare land, including the excess four (4) hectares
"untitled forest land" located at its eastern portion; c) that they possessed this excess 4
hectares of land (which consisted of Lot No. 6195, one-hectare portion of Lot No. 6196-A
and one-hectare portion of Lot Nos. 6196-B and 7529-A) "continuously, publicly,
notoriously, adversely, peacefully, in good faith and in concept of the (sic) owner since
1931;" d) that they continued possession and occupation of the 4-hectare land after the
death of Dorotea Concha on December 23, 1992 and Valeriano Sr. on May 12, 1999; e)
that the Concha spouses "have preserved the forest trees standing in [the subject lots] to
the exclusion of the defendants (respondents) or other persons from 1931" up to
November 12, 1996 (for Civil Case No. 5188) or January 1997 (for Civil Case Nos. 5433
and 5434) when respondents, "by force, intimidation, [and] stealth forcibly entered the
premises, illegally cut, collected, [and] disposed" of 21 trees (for Civil Case No. 5188), 22
trees (for Civil Case No. 5433) or 6 trees (for Civil Case No. 5434); f) that "the land is
private land or that even assuming it was part of the public domain, plaintiffs had
already acquired imperfect title thereto" under Sec. 48(b) of C.A. No. 141, as amended by
Republic Act (R.A.) No. 1942; g) that respondents allegedly cut into flitches the trees
felled in Lot No. 6195 (Civil Case No. 5188) while the logs taken from the subject lots in
Civil Case Nos. 5433 and 5434 were sold to a timber dealer in Katipunan, Zamboanga del
Norte; h) that respondents "surreptitiously" filed free patent applications over the lots
despite their full knowledge that petitioners owned the lots; i) that the geodetic
engineers who conducted the original survey over the lots never informed them of the
survey to give them an opportunity to oppose respondents' applications; j) that
respondents' free patents and the corresponding OCTs were issued "on account of fraud,
deceit, bad faith and misrepresentation"; and k) that the lots in question have not been
transferred to an innocent purchaser.
On separate occasions, respondents moved for the dismissal of the respective cases
against them on the same grounds of: (a) lack of jurisdiction of the RTC over the subject
matters of the complaints; (b) failure to state causes of action for reconveyance; (c)
prescription; and (d) waiver, abandonment, laches and estoppel.13 On the issue of
jurisdiction, respondents contended that the RTC has no jurisdiction over the complaints
pursuant to Section 19(2) of Batas Pambansa Blg. (B.P.) 129, as amended by R.A. No.
7691, as in each case, the assessed values of the subject lots are less than P20,000.00.
Petitioners opposed,14 contending that the instant cases involve actions the subject
matters of which are incapable of pecuniary estimation which, under Section 19(1) of
B.P. 129, as amended by R.A. 7691, fall within the exclusive original jurisdiction of the
RTCs. They also contended that they have two main causes of action: for reconveyance
and for recovery of the value of the trees felled by respondents. Hence, the totality of the
claims must be considered which, if computed, allegedly falls within the exclusive
original jurisdiction of the RTC.
The trial court denied the respective motions to dismiss of respondents.15 The
respondents filed a Joint Motion for Reconsideration,16 to no avail.17
Dissatisfied, respondents jointly filed a Petition for Certiorari, Prohibition and
Preliminary Injunction with Prayer for Issuance of Restraining Order Ex Parte18 with the
CA, docketed as CA-G.R. SP No. 59499. In its Decision,19 the CA reversed the resolutions
and order of the trial court. It held that even assuming that the complaints state a cause
of action, the same have been barred by the statute of limitations. The CA ruled that an
action for reconveyance based on fraud prescribes in ten (10) years, hence, the instant
complaints must be dismissed as they involve titles issued for at least twenty-two (22)
years prior to the filing of the complaints. The CA found it unnecessary to resolve the
other issues.
Hence, this appeal in which petitioners raise the following issues, viz:
FIRST - WHETHER OR NOT RESPONDENT COURT OF APPEALS (FORMER FIRST
DIVISION) ERRED IN REVERSING THE ORDER OF THE COURT A QUO DENYING THE
MOTION FOR DISMISSAL, CONSIDERING THE DISMISSAL OF A PARTY COMPLAINT IS
PREMATURE AND TRIAL ON THE MERITS SHOULD BE CONDUCTED TO THRESH OUT
EVIDENTIARY MATTERS.
SECOND - WHETHER OR NOT THE RESPONDENT COURT OF APPEALS (FORMER FIRST
DIVISION) ERRED IN DISMISSING THE PETITIONERS' COMPLAINTS ON [THE] GROUND
OF PRESCRIPTION.
THIRD - WHETHER OR NOT THE RESPONDENT COURT OF APPEALS (FORMER FIRST
DIVISION) ERRED IN CONCLUDING THAT THERE IS NO DOCUMENTARY EVIDENCE ON
RECORD TO SHOW THAT PETITIONERS OWN THE SUBJECT FOREST PORTION OF THE
PROPERTIES ERRONEOUSLY INCLUDED IN THE TITLES OF PRIVATE RESPONDENTS.
FOURTH - WHETHER OR NOT THE PETITION OF HEREIN PRIVATE RESPONDENTS
FILED WITH THE RESPONDENT COURT OF APPEALS (FORMER FIRST DIVISION)
SHOULD HAVE BEEN DISMISSED OUTRIGHTLY FOR PRIVATE RESPONDENTS' THEREIN
FAILURE TO COMPLY WITH THE MANDATORY REQUIREMENT OF SECTION 1 RULE 65
OF THE RULES OF COURT TO SUBMIT CERTIFIED TRUE COPIES OF THE ASSAILED
ORDERS OF THE TRIAL COURT WHICH RENDERED THEIR PETITION (CA G.R. 59499)
DEFICIENT IN FORM AND SUBSTANCE CITING THE CASE OF CATUIRA v. COURT OF
APPEALS (172 SCRA 136).20
In their memorandum,21 respondents reiterated their arguments in the courts below
that: a) the complaints of the petitioners in the trial court do not state causes of action
for reconveyance; b) assuming the complaints state causes of action for reconveyance,
the same have already been barred by prescription; c) the RTC does not have jurisdiction
over the subject matter of the instant cases; d) the claims for reconveyance in the
complaints are barred by waiver, abandonment, or otherwise extinguished by laches and
estoppel; and e) there is no special reason warranting a review by this Court.
Since the issue of jurisdiction is determinative of the resolution of the instant case yet the
CA skirted the question, we resolved to require the parties to submit their respective
Supplemental Memoranda on the issue of jurisdiction.22
In their Supplemental Memorandum,23 petitioners contend that the nature of their
complaints, as denominated therein and as borne by their allegations, are suits for
reconveyance, or annulment or cancellation of OCTs and damages. The cases allegedly
involve more than just the issue of title and possession since the nullity of the OCTs
issued to respondents and the reconveyance of the subject properties were also raised as
issues. Thus, the RTC has jurisdiction under Section 19(1) of B.P. 129, which provides
that the RTC has jurisdiction "[i]n all civil actions in which the subject of the litigation is
incapable of pecuniary estimation." Petitioners cited: a) Raymundo v. CA24 which set the
criteria for determining whether an action is one not capable of pecuniary estimation;
b) Swan v. CA25 where it was held that an action for annulment of title is under the
jurisdiction of the RTC; c) Santos v. CA26 where it was similarly held that an action for
annulment of title, reversion and damages was within the jurisdiction of the RTC; and
d) Commodities Storage and ICE Plant Corporation v. CA 27 where it was held that
"[w]here the action affects title to the property, it should be filed in the RTC where the
property is located." Petitioners also contend that while it may be argued that the
assessed values of the subject properties are within the original jurisdiction of the
municipal trial court (MTC), they have included in their prayers "any interest included
therein" consisting of 49 felled natural grown trees illegally cut by respondents.
Combining the assessed values of the properties as shown by their respective tax
declarations and the estimated value of the trees cut, the total amount prayed by
petitioners exceeds twenty thousand pesos (P20,000.00). Hence, they contend that the
RTC has jurisdiction under Section 19(2) of B.P. 129.
Jurisdiction over the subject matter is the power to hear and determine cases of the
general class to which the proceedings in question belong.28 It is conferred by law and an
objection based on this ground cannot be waived by the parties.29 To determine whether
a court has jurisdiction over the subject matter of a case, it is important to determine the
nature of the cause of action and of the relief sought.30
The trial court correctly held that the instant cases involve actions for reconveyance.31 An
action for reconveyance respects the decree of registration as incontrovertible but seeks
the transfer of property, which has been wrongfully or erroneously registered in other
persons' names, to its rightful and legal owners, or to those who claim to have a better
right.32 There is no special ground for an action for reconveyance. It is enough that the
aggrieved party has a legal claim on the property superior to that of the registered
owner33 and that the property has not yet passed to the hands of an innocent purchaser
for value.34
The reliefs sought by the petitioners in the instant cases typify an action for
reconveyance. The following are also the common allegations in the three complaints
that are sufficient to constitute causes of action for reconveyance, viz:
(a) That plaintiff Valeriano S. Concha, Sr. together with his spouse Dorotea Concha have
painstakingly preserve[d] the forest standing in the area [of their 24-hectare homestead]
including the four hectares untitled forest land located at the eastern portion of the
forest from 1931 when they were newly married, the date they acquired this property by
occupation or possession;35
(b) That spouses Valeriano S. Concha Sr. and Dorotea P. Concha have preserved the
forest trees standing in [these parcels] of land to the exclusion of the defendants
Lomocsos or other persons from 1931 up to November 12, 1996 [for Civil Case No. 5188]
and January 1997 [for Civil Case Nos. 5433 and 5434] when defendants[,] by force,
intimidation, [and] stealth[,] forcibly entered the premises, illegal[ly] cut, collected,
disposed a total of [twenty-one (21) trees for Civil Case No. 5188, twenty-two (22) trees
for Civil Case No. 5433 and six (6) trees for Civil Case No. 5434] of various sizes;36
(c) That this claim is an assertion that the land is private land or that even assuming it
was part of the public domain, plaintiff had already acquired imperfect title thereto
under Sec. 48(b) of [C.A.] No. 141[,] otherwise known as the Public Land Act[,] as
amended by [R.A.] No. [7691];37
(d) That [respondents and their predecessors-in-interest knew when they]
surreptitiously filed38 [their respective patent applications and were issued their
respective] free patents and original certificates of title [that the subject lots belonged to
the petitioners];39
(e) [That respondents' free patents and the corresponding original certificates of titles
were issued] on account of fraud, deceit, bad faith and misrepresentation;40 and
(f) The land in question has not been transferred to an innocent purchaser.41
These cases may also be considered as actions to remove cloud on one's title as they are
intended to procure the cancellation of an instrument constituting a claim on petitioners'
alleged title which was used to injure or vex them in the enjoyment of their alleged title.42
Being in the nature of actions for reconveyance or actions to remove cloud on one's title,
the applicable law to determine which court has jurisdiction is Section 19(2) of B.P. 129,
as amended by R.A. No. 7691, viz:
Section 19. Jurisdiction in Civil Cases. - - Regional Trial Courts shall exercise exclusive
original jurisdiction: x x x
(2) In all civil actions which involve the title to, or possession of, real property, or any
interest therein, where the assessed value of the property involved exceeds Twenty
thousand pesos (P20,000.00) or for civil actions in Metro Manila, where such value
exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction over which is conferred
upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts;
x x x.
In the cases at bar, it is undisputed that the subject lots are situated in Cogon, Dipolog
City and their assessed values are less than P20,000.00, to wit:
Civil Case No. Lot No. Assessed Value
5188 6195 P1,030.00
5433 6196-A 4,500.00
5434 6196-B 4,340.00
7529-A 1,880.00.43
Hence, the MTC clearly has jurisdiction over the instant cases.
Petitioners' contention that this case is one that is incapable of pecuniary estimation
under the exclusive original jurisdiction of the RTC pursuant to Section 19(1) of B.P. 129
is erroneous.
In a number of cases, we have held that actions for reconveyance44 of or for cancellation
of title45 to or to quiet title46 over real property are actions that fall under the
classification of cases that involve "title to, or possession of, real property, or any interest
therein."
The original text of Section 19(2) of B.P. 129 as well as its forerunner, Section 44(b) of
R.A. 296,47 as amended, gave the RTCs (formerly courts of first instance) exclusive
original jurisdiction "[i]n all civil actions which involve the title to, or possession
of, real property, or any interest therein, except actions for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction over which is conferred
upon Metropolitan Trial Courts, [MTCs], and Municipal Circuit Trial Courts (conferred
upon the city and municipal courts under R.A. 296, as amended)." Thus, under the old
law, there was no substantial effect on jurisdiction whether a case is one, the subject
matter of which was incapable of pecuniary estimation, under Section 19(1) of B.P. 129
or one involving title to property under Section 19(2). The distinction between the two
classes became crucial with the amendment introduced by R.A. No. 769148 in 1994 which
expanded the exclusive original jurisdiction of the first level courts to include "all civil
actions which involve title to, or possession of, real property, or any interest
therein where the assessed value of the property or interest therein does not
exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila,
where such assessed value does not exceed Fifty thousand pesos (P50,000.00)
exclusive of interest, damages of whatever kind, attorney's fees, litigation
expenses and costs." Thus, under the present law, original jurisdiction over cases the
subject matter of which involves "title to, possession of, real property or any interest
therein" under Section 19(2) of B.P. 129 is divided between the first and second level
courts, with the assessed value of the real property involved as the benchmark. This
amendment was introduced to "unclog the overloaded dockets of the RTCs which would
result in the speedier administration of justice."49
The cases of Raymundo v. CA50 and Commodities Storage and ICE Plant Corporation
v. CA,51 relied upon by the petitioners, are inapplicable to the cases at
bar. Raymundo involved a complaint for mandatory injunction, not one for
reconveyance or annulment of title. The bone of contention was whether the case was
incapable of pecuniary estimation considering petitioner's contention that the pecuniary
claim of the complaint was only attorney's fees of P10,000, hence, the MTC had
jurisdiction. The Court defined the criterion for determining whether an action is one
that is incapable of pecuniary estimation and held that the issue of whether petitioner
violated the provisions of the Master Deed and Declaration of Restriction of the
Corporation is one that is incapable of pecuniary estimation. The claim for attorney's fees
was merely incidental to the principal action, hence, said amount was not determinative
of the court's jurisdiction. Nor can Commodities Storage and ICE Plant
Corporation provide any comfort to petitioners for the issue resolved by the Court in
said case was venue and not jurisdiction. The action therein was for damages, accounting
and fixing of redemption period which was filed on October 28, 1994, before the passage
of R.A. No. 7691. In resolving the issue of venue, the Court held that "[w]here the action
affects title to property, it should be instituted in the [RTC] where the property is
situated. The Sta. Maria Ice Plant & Cold Storage is located in Sta. Maria, Bulacan. The
venue in Civil Case No. 94-727076 was therefore improperly laid."
Worse, the cases of Swan v. CA52 and Santos v. CA53 cited by the petitioners, contradict
their own position that the nature of the instant cases falls under Section 19(1) of B.P.
129. The complaints in Swan and Santos were filed prior to the enactment of R.A. No.
7691. In Swan, the Court held that the action being one for annulment of title, the RTC
had original jurisdiction under Section 19(2) of B.P. 129. In Santos, the Court similarly
held that the complaint for cancellation of title, reversion and damages is also one that
involves title to and possession of real property under Section 19(2) of B.P. 129. Thus,
while the Court held that the RTC had jurisdiction, the Court classified actions for
"annulment of title" and "cancellation of title, reversion and damages" as civil actions
that involve "title to, or possession of, real property, or any interest therein" under
Section 19(2) of B.P. 129.
Petitioners' contention that the value of the trees cut in the subject properties
constitutes "any interest therein (in the subject properties)" that should be computed in
addition to the respective assessed values of the subject properties is unavailing. Section
19(2) of B.P. 129, as amended by R.A. No. 7691, is clear that the RTC shall exercise
jurisdiction "in all civil actions which involve the title to, or possession of, real property,
or any interest therein, where the assessed value of the property involved exceeds
Twenty thousand pesos (P20,000.00) or for civil actions in Metro Manila, where
such value exceeds Fifty thousand pesos (P50,000.00)." It is true that the recovery of
the value of the trees cut from the subject properties may be included in the term "any
interest therein." However, the law is emphatic that in determining which court has
jurisdiction, it is only the assessed value of the realty involved that should be
computed.54 In this case, there is no dispute that the assessed values of the subject
properties as shown by their tax declarations are less than P20,000.00. Clearly,
jurisdiction over the instant cases belongs not to the RTC but to the MTC.

IN VIEW WHEREOF, the decision of the Court of Appeals is hereby AFFIRMED that the
RTC of Dipolog City, Branch 9, has no jurisdiction in Civil Case Nos. 5188, 5433 and 5434.

SO ORDERED.