De Mesa v. Pulutan
REITERATIONFacts
The Antecedents: This case originated from a Complaint for Unlawful Detainer and Damages filed by Marlene D. De Mesa against Rudy D. Pulutan and Medy P. Bundalian. The petitioner claimed ownership of a house and lot, which she purchased from Amelia D. Pulutan, the mother of the respondents. A lease agreement was in place for the property, and after Amelia failed to repurchase the property and subsequently passed away, the petitioner demanded that the respondents vacate. The respondents refused, asserting that the transaction was an equitable mortgage and that Amelia remained the owner until her death. Procedural History: The Municipal Trial in Cities (MTCC) ruled in favor of the petitioner, finding the contract to be a sale and granting possession. The Regional Trial Court (RTC) affirmed this decision with a modification regarding the monthly rental amount. However, the Court of Appeals (CA) reversed the lower courts' rulings, annulling the decision and dismissing the complaint. The CA determined that the purported deed of sale was, in fact, an equitable mortgage, citing Amelia's continued possession of the property as evidence. The petitioner's motion for reconsideration was denied by the CA. The Petition: The petitioner seeks review of the CA's decision and resolution through a Petition for Review on Certiorari under Rule 45 of the Rules of Court. She argues that the CA erred in reversing the lower courts' findings and contends that the registered owner should have preferential rights to possession. The petitioner also asserts that the CA's ruling constitutes a collateral attack on her Transfer Certificate of Title (TCT) and would lead to multiplicity of suits. The respondents, in their opposition, argue that the petitioner is changing her theory of the case by introducing a new claim of ownership based on a Deed of Redemption, which was not raised in the lower courts.
Issue(s)
Whether the Court of Appeals erred in reversing the rulings of the lower courts. Whether the CA erred in finding the contract between petitioner and Amelia to be an equitable mortgage. Whether the CA's ruling constituted a collateral attack on petitioner's TCT. Whether sustaining the CA's judgment would lead to multiplicity of suits.
Ruling
The Petition for Review on Certiorari is DENIED. The Decision dated 6 March 2020 and the Resolution dated 20 January 2021 of the Court of Appeals in CA-G.R. SP No. 159665 are AFFIRMED.
Ratio Decidendi
On the issue of whether the CA erred in reversing the lower courts' rulings: The Court held that the CA did not err. While a registered owner is generally entitled to possession, an ejectment case is not automatically decided in their favor. The petitioner, as the registered owner, failed to sufficiently prove the jurisdictional averments for unlawful detainer, specifically that the respondents' possession was initially by contract or tolerance and became illegal upon notice. The CA correctly found that the contract between petitioner and Amelia was an equitable mortgage, not a sale, due to Amelia's continued possession as lessee and other badges of an equitable mortgage under Article 1602 of the Civil Code. Therefore, Amelia's possession was in the concept of an owner, not by mere tolerance, which undermined petitioner's claim of a better right to possession. On the issue of whether the CA erred in finding the contract to be an equitable mortgage: The Court affirmed the CA's finding. The CA correctly applied the rule that the issue of ownership can be provisionally resolved in ejectment cases when possession cannot be determined without it. The presence of Amelia's continued possession as lessee after the supposed sale, coupled with her failure to repurchase the property, strongly indicated an equitable mortgage. The Court noted that the petitioner did not assign any error regarding the CA's findings on the equitable mortgage, and that the question of whether a contract is an equitable mortgage is a question of fact generally not reviewable in a Rule 45 petition. The Court reiterated that the presence of even one circumstance under Article 1602 of the Civil Code suffices to convert a purported sale into an equitable mortgage, and Amelia's continued possession as lessee was a clear badge of such mortgage. On the issue of whether the CA's ruling constituted a collateral attack on petitioner's TCT: The Court held that there was no collateral attack. Citing Heirs of Cullado, the Court explained that the provisional determination of ownership in an ejectment case to resolve possession does not alter, modify, or cancel the certificate of title. Therefore, it is not a "real attack" on the title, whether direct or collateral. The resolution of ownership in ejectment suits is allowed by the Rules of Court on a provisional basis only and does not imperil the certificate of title. On the issue of whether sustaining the CA's judgment would lead to multiplicity of suits: The Court found this argument fundamentally flawed. It reiterated the distinction between unlawful detainer (possession de facto) and actions for recovery of ownership (accion reivindicatoria). While parties and subject matter may be the same, the causes of action and reliefs prayed for are different. The ruling in an ejectment case is limited to possession and does not bar a separate action for determination of ownership. Thus, there is no multiplicity of suits in the legal sense.
Main Doctrine
In an unlawful detainer case, while a registered owner is generally entitled to possession, the case will not necessarily be decided in their favor if the jurisdictional averments for ejectment are not sufficiently proven. The determination of ownership in ejectment cases is provisional and solely for resolving possession, and the Court may deem a purported deed of sale as an equitable mortgage if circumstances under Article 1602 of the Civil Code are present, thereby negating the seller's claim of ownership and the buyer's right to possession.