Dizon v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioner Aida Dizon mortgaged her house and lot to Monte de Piedad Bank. Upon failure to pay, the property was foreclosed. Dizon then asked private respondent Elizabeth Santiago to repurchase the property. On May 28, 1987, Santiago paid P550,000.00 to the bank. The next day, Dizon signed a Deed of Absolute Sale over the property in favor of the Santiagos. On the same day, another agreement was signed, granting Dizon an "option to buy back" the property within 3 months, with a stipulation that if she failed to do so, she shall vacate the premises. Dizon's Transfer Certificate of Title (TCT) was cancelled and a new one was issued in favor of the Santiagos. Dizon remained in possession during the option period. Procedural History: Dizon failed to exercise her option to buy back the property. The Santiagos demanded she vacate, but Dizon refused. The Santiagos filed an ejectment suit before the Metropolitan Trial Court (MTC). The MTC ordered Dizon to vacate. On appeal, the Regional Trial Court (RTC) set aside the MTC ruling, cancelled the Santiagos' TCT, and reinstated Dizon's TCT. The Santiagos appealed to the Court of Appeals (CA), arguing that the RTC could not cancel their title in an ejectment case. The CA initially affirmed the RTC but later reinstated the MTC ruling and set aside the RTC judgment. The Petition: Dizon filed a petition for review with the Supreme Court, questioning the CA's ruling which reinstated the MTC decision. The core issue is whether a court can order the cancellation of a TCT and definitively rule on ownership in an ejectment case.
Issue(s)
Whether the court can order the cancellation of a Transfer Certificate of Title (TCT) and definitively rule on the issue of ownership in an ejectment case. Whether the Santiagos are entitled to the possession of the property.
Ruling
The Supreme Court denied the petition for review for lack of merit and affirmed the amended resolution of the Court of Appeals, which reinstated the Metropolitan Trial Court's ruling ordering Aida Dizon to vacate the premises.
Ratio Decidendi
On the issue of whether the court can order the cancellation of a TCT and definitively rule on ownership in an ejectment case: The Court reiterated the well-settled rule that in an ejectment suit, the only issue is possession de facto or physical possession, not possession de jure. While the court may pass upon the issue of ownership to determine possession, especially when linked, it cannot definitively adjudicate ownership. Such determination is not clothed with finality and does not affect ownership or constitute a binding adjudication, nor does it bar a later action to settle ownership. Therefore, the RTC erred in ordering the cancellation of the Santiagos' TCT and reinstating Dizon's TCT, as these actions go beyond the scope of an ejectment suit. The issue of ownership or title is generally immaterial and foreign to an ejectment suit, except to resolve the question of possession. On the issue of whether the Santiagos are entitled to the possession of the property: The Court held that the Santiagos, as registered owners under a TCT, are entitled to possession. This entitlement arises from the time Dizon failed to exercise her option to buy back the property within the stipulated period. Her possession ceased to be legal from that moment. Furthermore, the second contract (Exh. C) explicitly stipulated that Dizon would vacate if she failed to buy back the property within the agreed period. Her failure to comply with this condition rendered her possession illegal and subject to ouster. The Court found it unnecessary to determine whether the Deed of Absolute Sale (Exh. B) was an equitable mortgage, as Dizon's right to possession was governed by the stipulations of the subsequent contract (Exh. C).
Main Doctrine
In an ejectment suit, the court may pass upon the issue of ownership only to determine the question of possession, but it cannot definitively adjudicate ownership, as such issue is generally immaterial and foreign to an ejectment suit, except to shed light on the question of possession.