Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-34362 November 19, 1982

MODESTA CALIMLIM AND LAMBERTO MAGALI IN HIS CAPACITY AS ADMINISTRATOR OF
THE ESTATE OF DOMINGO MAGALI, petitioners,
vs.
HON. PEDRO A. RAMIREZ IN HIS CAPACITY AS PRESIDING JUDGE OF THE COURT OF FIRST
INSTANCE OF PANGASINAN, BRANCH I, and FRANCISCO RAMOS, respondents.

Eugenio Ramos for petitioners.

Rogelio P. Closa for respondents.

VASQUEZ, J.:

The dismissal of Civil Case No. SCC-180 filed by the herein petitioners in the respondent Court against the private
respondent is sought to be annulled and set aside by this Petition For Review On Certiorari.

The antecedent material facts are not disputed. Sometime in 1961, a judgment for a sum of money was rendered in
favor of Independent Mercantile Corporation against a certain Manuel Magali by the Municipal Court of Manila in
Civil Case No. 85136. After said judgment became final, a writ of execution was issued on July 31, 1961. The
Notice of Levy made on September 21, 1961 on a parcel of land covered by Transfer Certificate of Title No. 9138
registered in the name of "Domingo Magali, married to Modesta Calimlim", specified that the said levy was only
against "all rights, title, action, interest and participation of the defendant Manuel Magali over the parcel of land
described in this title. " The Certificate of Sale executed by the Provincial Sheriff of Pangasinan on October 17,
1961 in favor of Independent Mercantile Corporation also stated that the sale referred only to the rights and interest
of Manuel Magali over the land described in TCT No. 9138. Manuel Magali is one of the several children of
Domingo Magali who had died in 1940 and herein petitioner Modesta Calimlim.

However, when the Sheriff issued the final Deed of Sale on January 25, 1963, it was erroneously stated therein that
the sale was with respect to "the parcel of land described in this title" (referring to TCT No. 9138) and not only over
the rights and interest of Manuel Magali in the same. The execution of the said final Deed of Sale was annotated at
the back of said title.

On February 23, 1967, Independent Mercantile Corporation filed a petition in the respondent Court to compel
Manuel Magali to surrender the owner's duplicate of TCT No. 9138 in order that the same may be cancelled and a
new one issued in the name of the said corporation. Not being the registered owner and the title not being in his
possession, Manuel Magali failed to comply with the order of the Court directing him to surrender the said title. On
June 20, 1967, Independent Mercantile Corporation filed an ex-parte petition to declare TCT No. 9138 as cancelled
and to issue a new title in its name. The said petition was granted by the respondent Court and in its Order dated July
13, 1967, it directed the issuance of a new certificate of title in the name of the Independent Mercantile Corporation
and the cancellation of TCT No. 9138. By virtue of said Order, the Register of Deeds of Pangasinan issued a new
title in the name of the corporation, Identified as TCT No. 68568.

On November 21, 1967, petitioner Modesta Calimlim, surviving spouse of Domingo Magali, upon learning that her
husband's title over the parcel of land had been cancelled, filed a petition with the respondent Court, sitting as a
cadastral court, praying for the cancellation of TCT No. 68568. An opposition to the said petition was filed by
Independent Mercantile Corporation. After the parties submitted their respective Memoranda, the respondent Court
issued an Order dated June 3, 1968 dismissing the petition. (Rollo, pp. 31-38.)

The herein petitioners did not appeal the dismissal of the petition they filed in LRC Record No. 39492 for the
cancellation of TCT No. 68568. Instead, on January 11, 1971, they filed the complaint in Civil Case No. SCC-180
praying for the cancellation of the conveyances and sales that had been made with respect to the property, covered
by TCT No. 9138 previously registered in the name of Domingo Magali, married to Modesta Calimlim. Named as
defendant in said civil case was herein private respondent Francisco Ramos who claimed to have bought the
property from Independent Mercantile Corporation on July 25, 1967. Private respondent Francisco Ramos, however,
failed to obtain a title over the property in his name in view of the existence of an adverse claim annotated on the
title thereof at the instance of the herein petitioners.

Private respondent Francisco Ramos filed a Motion To Dismiss Civil Case No. SCC-180 on the ground that the
same is barred by prior judgement or by statute of limitations (Rollo. pp. 42-45). Resolving the said Motion, the
respondent Court, in its Order dated April 21, 1971, dismissed Civil Case No. SCC- 180 on the ground of estoppel
by prior judgment. (Ibid., pp, 10-13.) A Motion For Reconsideration filed by the petitioners was denied by the
respondent Judge in his Order of September 2, 1971. (Ibid., pp. 13-15.) A second Motion For Reconsideration was
similarly denied in the Order dated September 29, 197 1. (Rollo, pp. 16-17.) Hence, this Petition.

We find merit in this appeal.

It is error to consider the dismissal of the petition filed by the herein petitioner in LRC Record No. 39492 for the
cancellation of TCT No. 68568 as a bar by prior judgment against the filing of Civil Case No. SCC-180. In order to
avail of the defense of res judicata, it must be shown, among others, that the judgment in the prior action must have
been rendered by a court with the proper jurisdiction to take cognizance of the proceeding in which the prior
judgment or order was rendered. If there is lack of jurisdiction over the subject-matter of the suit or of the parties,
the judgment or order cannot operate as an adjudication of the controversy. (2 Moran Comments on the Rules of
Court, 1970 Edition, p. 364.) This essential element of the defense of bar by prior judgment or res judicata does not
exist in the case presently considered.

The petition filed by the herein petitioners in LRC Record No. 39492 was an apparent invocation of the authority of
the respondent Court sitting as a land registration court, Although the said petition did not so state, that reliance was
apparently placed on Section 112 of the Land Registration Act. It has been settled by consistent rulings of this Court
that a court of first instance, acting as a land registration court, is a court of limited and special jurisdiction. As such,
its proceedings are not adequate for the litigation of issues pertaining to an ordinary civil action, such as, questions
involving ownership or title to real property. (Bareng vs. Shintoist Shrine and Japanese Charity Bureau, 83 SCRA
418; Manalo vs. Mariano, 69 SCRA 80; In re: Nicanor T Santos, 102 SCRA 747; Santos vs. Aquino, 101 SCRA
377.) In Hu chon Sunpongco vs. Heirs of Nicolas Ronquillo, L- 27040, December 19, 1970, 36 SCRA 395, we have
held that:

Section 112 of Act 496 confers authority upon the land registration court to order the cancellation,
alteration or amendment of a certificate of title but withdraws from the Court the power to pass
upon any question concerning ownership of the registered property, or any incident where the
issues involved have become controversial.

It may hardly be questioned that the issues raised by the petitioners in their petition to cancel TCT No. 68568 refer
to the ownership or title over the property covered thereby. The said petition presented before the respondent Court
in the exercise of its limited jurisdiction as a cadastral court, the question of who should be considered the true and
lawful owner of the parcel of land embraced in said title. The petitioners alleged therein that they are the true owners
of the property, and that TCT No. 68568 which they sought to cancel was issued as a result of the errors which were
not of their own making. In short, the petition raised a highly controversial matter which is beyond the judicial
competence of a cadastral court to pass upon or to adjudicate.
It may neither be claimed that the parties have mutually agreed to submit the aforesaid issues for the determination
by the court, it being a fact that herein private respondent was not a party in the petition in LRC Record No. 39492.
Incidentally, although the said petition was filed by the herein petitioners on November 21, 1967, the Opposition
filed by Independent Mercantile Corporation to the said petition made no mention of the alleged sale of the property
in question in favor of private respondent Francisco Ramos on July 5, 1967. This circumstance places in grave doubt
the sincerity of said sale and the claim that the private respondent was an innocent purchaser for value of the
property in question.

In the order of the respondent Judge dated September 29, 1971 denying the second motion for reconsideration, he
cited the case of Tijam vs. Sibonghanoy, 23 SCRA 29, to uphold the view that the petitioners are deemed estopped
from questioning the jurisdiction of the respondent Court in having taken cognizance of the petition for cancellation
of TCT No. 68568, they being the ones who invoked the jurisdiction of the said Court to grant the affirmative relief
prayed for therein. We are of the opinion that the ruling laid down in Sibonghanoy may not be applied herein.
Neither its factual backdrop nor the philosophy of the doctrine therein expounded fits the case at bar.

A rule that had been settled by unquestioned acceptance and upheld in decisions so numerous to cite is that the
jurisdiction of a court over the subject-matter of the action is a matter of law and may not be conferred by consent or
agreement of the parties. The lack of jurisdiction of a court may be raised at any stage of the proceedings, even on
appeal. This doctrine has been qualified by recent pronouncements which stemmed principally from the ruling in the
cited case of Sibonghanoy. It is to be regretted, however, that the holding in said case had been applied to situations
which were obviously not contemplated therein. The exceptional circumstance involved in Sibonghanoy which
justified the departure from the accepted concept of non-waivability of objection to jurisdiction has been ignored
and, instead a blanket doctrine had been repeatedly upheld that rendered the supposed ruling in Sibonghanoy not as
the exception, but rather the general rule, virtually overthrowing altogether the time-honored principle that the issue
of jurisdiction is not lost by waiver or by estoppel.

In Sibonghanoy, the defense of lack of jurisdiction of the court that rendered the questioned ruling was held to be
barred by estoppel by laches. It was ruled that the lack of jurisdiction having been raised for the first time in a
motion to dismiss filed almost fifteen (15) years after the questioned ruling had been rendered, such a plea may no
longer be raised for being barred by laches. As defined in said case, laches is "failure or neglect, for an unreasonable
and unexplained length of time, to do that which, by exercising due diligence, could or should have been done
earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the
party entitled to assert has abandoned it or declined to assert it."

The petitioners in the instant case may not be faulted with laches. When they learned that the title to the property
owned by them had erroneously and illegally been cancelled and registered in the name of another entity or person
who had no right to the same, they filed a petition to cancel the latter's title. It is unfortunate that in pursuing said
remedy, their counsel had to invoke the authority of the respondent Court as a cadastral court, instead of its capacity
as a court of general jurisdiction. Their petition to cancel the title in the name of Independent Mercantile
Corporation was dismissed upon a finding by the respondent Court that the same was "without merit." No
explanation was given for such dismissal nor why the petition lacked merit. There was no hearing, and the petition
was resolved solely on the basis of memoranda filed by the parties which do not appear of record. It is even a
possibility that such dismissal was in view of the realization of the respondent Court that, sitting as a cadastral court,
it lacked the authority to entertain the petition involving as it does a highly controversial issue. Upon such petition
being dismissed, the petitioners instituted Civil Case No. SCC-180 on January 1, 1971, or only two and one-half
years after the dismissal of their petition in LRC Record No. 39492. Hence, we see no unreasonable delay in the
assertion by the petitioners of their right to claim the property which rightfully belongs to them. They can hardly be
presumed to have abandoned or waived such right by inaction within an unreasonable length of time or inexcusable
negligence. In short, their filing of Civil Case No. SCC-180 which in itself is an implied non-acceptance of the
validity of the proceedings had in LRC Record No. 39492 may not be deemed barred by estoppel by laches.

It is neither fair nor legal to bind a party by the result of a suit or proceeding which was taken cognizance of in a
court which lacks jurisdiction over the same irrespective of the attendant circumstances. The equitable defense of
estoppel requires knowledge or consciousness of the facts upon which it is based. The same thing is true with
estoppel by conduct which may be asserted only when it is shown, among others, that the representation must have
been made with knowledge of the facts and that the party to whom it was made is ignorant of the truth of the matter.
(De Castro vs. Gineta, 27 SCRA 623.) The filing of an action or suit in a court that does not possess jurisdiction to
entertain the same may not be presumed to be deliberate and intended to secure a ruling which could later be
annulled if not favorable to the party who filed such suit or proceeding. Instituting such an action is not a one-sided
affair. It can just as well be prejudicial to the one who filed the action or suit in the event that he obtains a favorable
judgment therein which could also be attacked for having been rendered without jurisdiction. The determination of
the correct jurisdiction of a court is not a simple matter. It can raise highly debatable issues of such importance that
the highest tribunal of the land is given the exclusive appellate jurisdiction to entertain the same. The point simply is
that when a party commits error in filing his suit or proceeding in a court that lacks jurisdiction to take cognizance of
the same, such act may not at once be deemed sufficient basis of estoppel. It could have been the result of an honest
mistake, or of divergent interpretations of doubtful legal provisions. If any fault is to be imputed to a party taking
such course of action, part of the blame should be placed on the court which shall entertain the suit, thereby lulling
the parties into believing that they pursued their remedies in the correct forum. Under the rules, it is the duty of the
court to dismiss an action "whenever it appears that the court has no jurisdiction over the subject matter." (Sec. 2,
Rule 9, Rules of Court.) Should the court render a judgment without jurisdiction, such judgment may be impeached
or annulled for lack of jurisdiction (Sec. 30, Rule 132, Ibid), within ten (10) years from the finality of the same. (Art.
1144, par. 3, Civil Code.)

The inequity of barring the petitioners from vindicating their right over their property in Civil Case No. SCC-180 is
rendered more acute in the face of the undisputed fact that the property in question admittedly belonged to the
petitioners, and that the title in the name of the private respondent was the result of an error committed by the
Provincial Sheriff in issuing the deed of sale in the execution proceeding. The justness of the relief sought by herein
petitioners may not be ignored or rendered futile by reason of a doctrine which is of highly doubtful applicability
herein.

WHEREFORE, the Orders appealed from are hereby REVERSED and SET ASIDE. The Motion To Dismiss filed
by the private respondent in Civil Case No. SCC-180 shall be deemed denied and the respondent Court is ordered to
conduct further proceedings in the case. With costs against the private respondent.

SO ORDERED.

Teehankee (Chairman), Melencio-Herrera, Plana, Relova and Gutierrez, Jr., JJ., concur.

THIRD DIVISION

FRANCEL REALTY G.R. No. 154684

CORPORATION,

Petitioner, Present:

Panganiban, J.,
Chairman,

Sandoval-Gutierrez,

- versus - Corona,

Carpio Morales,* and

Garcia, JJ.

Promulgated:

RICARDO T. SYCIP,

Respondent. September 8, 2005

x -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --- -- -- -- -- x

DECISION

PANGANIBAN, Acting CJ:

n general, lack of jurisdiction over the subject matter may be raised at any stage of the proceeding, even on
appeal. This defense may be determined from the factual allegations of the complaint, regardless of the answer
or even before the answer is filed.

__________________
I
* On official business.
The Case

Before us is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court, assailing the February 2,
2001 Decision[2] and August 14, 2002 Resolution[3] of the Court of Appeals in CA-GR CV No. 55127. The CA
disposed as follows:

It is not disputed that [petitioner] filed an illegal detainer case against [respondent] docketed as Civil Case
No. 1310 before the Municipal Trial Court [MTC] of Bacoor, Cavite, which was accordingly dismissed by
the MTC (See answer, p. 28, record). The filing of the instant case is another blatant attempt by
[petitioner] to circumvent the law. For it is well-settled that where a complaint arises from the failure of a
buyer [of real property] on installment basis to pay based on a right to stop monthly amortizations under
Presidential Decree No. 957, as in the case at bench, the determinative question is exclusively cognizable
by the Housing and Land Use Regulatory Board (HLURB) (Francel Realty Corp. v. Court of Appeals, 252
SCRA 127 [1996]).

WHEREFORE, premises considered, the decision appealed from is hereby AFFIRMED in toto.[4]

The assailed Resolution denied petitioners Motion for Reconsideration.

The Facts

The CA narrated the facts as follows:

x x x [I]n November, 1989, [petitioner] and [respondent] entered into a contract to sell a house and lot covered by
TCT No. T-281788. Upon execution of the contract to sell, [respondent] made a down payment of P119,700.00,
which was considered as monthly rentals at the rate of P2,686.00 per month. On March 16, 1990, the townhouse
subject of the contract to sell was transferred in the name of [respondent] as evidenced by TCT No. T-281788.
Despite the transfer of the title in the name of [respondent], the latter refused to pay the balance of P250,000.00. By
applying the down payment of P119,700.00 to defendants monthly rental starting from December 1989, said amount
has been reduced to nothing. Despite several demands made by [petitioner] to [respondent], including the demand
dated December 12, 1991 made by [petitioners] counsel, the [respondent] refused to reconvey the subject property to
[petitioner]. The [petitioner] suffered actual damages in the form of repairs amounting to not less than P100,000.00
as well as moral and exemplary damages, attorneys fees and litigation expenses. x x x.
 

The [respondent] filed a motion to dismiss on the ground of lack of jurisdiction but the court below denied the
motion stating that the ground relied upon by [respondent did not appear to be] indubitable.

Denying the material allegations of the complaint, the [respondent] again invoked the courts lack of jurisdiction over
the subject matter of the case. Further, there is a pending case between the same parties and involving the same
townhouse before the Housing and Land Use Regulatory Board for unsound real estate business practices. Likewise,
the [respondent] justified his refusal to pay the amortizations alleging that the [petitioner] sold and delivered to him
a defective townhouse unit under Sec. 3 of Presidential Decree No. [957].

After trial, the court below dismissed the case for lack of jurisdiction.[5]

Ruling of the Court of Appeals

Agreeing with the trial court, the CA held that the case involved not just reconveyance and damages, but also a
determination of the rights and obligations of the parties to a sale of real estate under PD 957; hence, the case fell
exclusively under the jurisdiction of the HLURB. The appellate court observed that respondent and other buyers of
the townhouses had notified petitioner of their intention to stop paying amortizations because of defective structures
and materials used in the construction; they had in fact filed other cases, also before the HLURB, against petitioner
for unsound real estate business practice.

Noting that petitioners illegal detainer case against respondent had been dismissed by the MTC, the appellate court
concluded that the filing of the instant case was another blatant attempt to circumvent the law.
Hence this Petition.[6]

Issues

In its Memorandum, petitioner raises the following issues:

A. Whether or not the lower court can dismiss, after full blown trial, Civil Case No. BCV-
94-2 of the RTC, Imus, Cavite, on the ground of lack of jurisdiction.
 
B. Whether or not the lower court can dismiss this case in spite of the indisputable fact
that respondent never secured HLURB authority or clearance to stop payment of monthly rentals.
[7]

The Courts Ruling

The Petition lacks merit.

First Issue:

Dismissal for Lack of Jurisdiction

Before going into the jurisdictional question, we must at the outset point out that, contrary to petitioners assignment
of errors, the trial courts Decision is not the proper subject of this Rule 45 Petition. Rather, it is the Decision of the
CA that is up for review by this Court. This mistake in stating the issues could have been fatal to petitioners case,
had it not correctly restated them in its arguments and discussion.[8] That said, we now proceed to the main issues.
 

Petitioner argues that the CAs affirmation of the trial courts dismissal of its case was erroneous, considering that a
full-blown trial had already been conducted. In effect, it contends that lack of jurisdiction could no longer be used as
a ground for dismissal after trial had ensued and ended.

The above argument is anchored on estoppel by laches, which has been used quite successfully in a
number of cases to thwart dismissals based on lack of jurisdiction. Tijam v. Sibonghanoy,[9] in which this doctrine
was espoused, held that a party may be barred from questioning a courts jurisdiction after being invoked to secure
affirmative relief against its opponent. In fine, laches prevents the issue of lack of jurisdiction from being raised for
the first time on appeal by a litigant whose purpose is to annul everything done in a trial in which it has actively
participated.[10]
 
Laches is defined as the failure or neglect for an unreasonable and unexplained length of time, to do that
which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a
right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or
declined to assert it.[11]
 

The ruling in Sibonghanoy on the matter of jurisdiction is, however, the exception rather than the rule.[12]
Estoppel by laches may be invoked to bar the issue of lack of jurisdiction only in cases in which the factual milieu is
analogous to that in the cited case. In such controversies, laches should be clearly present; that is, lack of jurisdiction
must have been raised so belatedly as to warrant the presumption that the party entitled to assert it had abandoned or
declined to assert it. [13] That Sibonghanoy applies only to exceptional circumstances is clarified in Calimlim v.
Ramirez,[14] which we quote:
 
A rule that had been settled by unquestioned acceptance and upheld in decisions so
numerous to cite is that the jurisdiction of a court over the subject-matter of the action is a matter
of law and may not be conferred by consent or agreement of the parties. The lack of jurisdiction
of a court may be raised at any stage of the proceedings, even on appeal. This doctrine has been
qualified by recent pronouncements which stemmed principally from the ruling in the cited case
of Sibonghanoy. It is to be regretted, however, that the holding in said case had been applied to
situations which were obviously not contemplated therein. The exceptional circumstance involved
in Sibonghanoy which justified the departure from the accepted concept of non-waivability of
objection to jurisdiction has been ignored and, instead a blanket doctrine had been repeatedly
upheld that rendered the supposed ruling in Sibonghanoy not as the exception, but rather the
general rule, virtually overthrowing altogether the time-honored principle that the issue of
jurisdiction is not lost by waiver or by estoppel.[15]
 
 

Indeed, the general rule remains: a courts lack of jurisdiction may be raised at any stage of the
proceedings, even on appeal.[16] The reason is that jurisdiction is conferred by law, and lack of it affects the very
authority of the court to take cognizance of and to render judgment on the action.[17] Moreover, jurisdiction is
determined by the averments of the complaint, not by the defenses contained in the answer.[18] 

 
 From the very beginning, the present respondent has been challenging the jurisdiction of the trial court and
asserting that the HLURB is the entity that has proper jurisdiction over the case. Consonant with Section 1 of Rule
16 of the Rules of Court, he had raised the issue of lack of jurisdiction in his Motion to Dismiss. Even when the
Motion was denied, he continuously invoked lack of jurisdiction in his Answer with affirmative defenses, his
subsequent pleadings, and verbally during the trial. This consistent and continuing objection to the trial courts
jurisdiction defeats petitioners contention that raising other grounds in a Motion to Dismiss is considered a
submission to the jurisdiction of the court.[19]
We stress that Rule 9 of the Rules of Court requires that all defenses and objections -- except lack of jurisdiction
over the subject matter, litis pendentia, bar by prior judgment and/or prescription -- must be pleaded in a motion to
dismiss or in an answer; otherwise, they are deemed waived. [20] As to the excepted grounds, the court may dismiss
a claim or a case at any time when it appears from the pleadings or the evidence on record that any of those grounds
exists.

In the present case, the trial court at first denied the Motion to Dismiss filed by respondent, because the
grounds he had relied upon did not appear to be indubitable. The ruling was made under the pre-1997 Rules of Civil
Procedure, which then provided that the court, after hearing x x x may deny or grant the motion or allow
amendment of pleading, or may defer the hearing and determination of the motion until the trial if the ground
alleged therein does not appear to be indubitable.[21] Moreover, the factual allegations of the Complaint[22] that
petitioner filed below for reconveyance and damages sufficiently conformed to the jurisdictional requisites for the
exercise of the MTCs authority. Thus, in accord with the procedures then prescribed, the court conducted trial to
allow all arguments and evidence to surface.

Significantly, petitioner has previously sued respondents brother and co-complainant before the HLURB over the
same subdivision project. In Francel Realty v. Court of Appeals and Francisco Sycip,[23] petitioners Complaint for
unlawful detainer was premised on the failure of respondents brother to pay monthly amortizations on the basis of
his right to stop paying them under PD 957. In that case, the Court had ruled that the issue involved a determinative
question x x x exclusively cognizable by the HLURB; that is, a determination of the rights and obligations of parties
in a sale of real estate under P.D. 957.[24]

Because an earlier Complaint had been filed by Sycip before the HLURB against Francel Realty Corporation for
unsound real estate business practices, the Court dismissed petitioners cause of action. The reason for the dismissal
was that the Complaint should instead be filed as a counterclaim in [the] HLURB [case] in accordance with Rule 6,
Section 6 of the Rules of Court x x x.[25] For the same reason, this Court has ruled that a suit to collect on a
promissory note issued by a subdivision lot buyer involves the sales of lots in commercial subdivisions; and that
jurisdiction over such case lies with the HLURB, not with the courts.[26]

Further, the rules governing counterclaims[27] and the prohibition on the splitting of causes of action (grounded on
the policy against a multiplicity of suits)[28] should effectively bar the Complaint for reconveyance and damages
filed by petitioner. Its Complaint came at the heels of its unlawful detainer suit that had previously been dismissed
by the MTC of Imus, Cavite, and of the litigation filed by respondent against Francel Realty before the HLURB.
Petitioner avers that the present controversy is not cognizable by the HLURB, because it was filed by the developer
rather than by the buyer, as provided under PD No. 1344.[29] Such pretension flies in the face of the ruling of the
Court in Francel Realty Corp. v. Court of Appeals and Francisco Sycip,[30] which we quote:

x x x. In the case of Estate Developers and Investors Corporation v. Antonio Sarte and
Erlinda Sarte the developer filed a complaint to collect the balance of the price of a lot bought
on installment basis, but its complaint was dismissed by the Regional Trial Court for lack of
jurisdiction. It appealed the order to this Court. In dismissing the appeal, we held:
 
The action here is not a simple action to collect on a promissory note; it
is a complaint to collect amortization payments arising from or in connection
 with a sale of a subdivision lot under P.D. Nos. 957 and 1344, and accordingly
falls within the exclusive original jurisdiction of the HLURB to regulate the real
estate trade and industry, and to hear and decide cases of unsound real estate
business practices. Although the case involving Antonio Sarte is still pending
resolution before the HLURB Arbiter, and there is as yet no order from the
HLURB authorizing suspension of payments on account of the failure of
plaintiff developer to make good its warranties, there is no question to Our mind
that the matter of collecting amortizations for the sale of the subdivision lot is
necessarily tied up to the complaint against the plaintiff and it affects the rights
and correlative duties of the buyer of a subdivision lot as regulated by NHA
pursuant to P.D. 957 as amended. It must accordingly fall within the exclusive
original jurisdiction of the said Board, and We find that the motion to dismiss
was properly granted on the ground that the regular court has no jurisdiction to
take cognizance of the complaint.[31]

Petitioners strategy, if allowed, would open a convenient gateway for a developer to subvert and preempt the rights
of buyers by the mere expediency of filing an action against them before the regular courts, as in this case.
Fortunately, the CA saw through the ruse. Contrary to petitioners contention, the HLURB is not deprived of
jurisdiction to hear and decide a case merely on the basis that it has been initiated by the developer and not by the
buyer.

Petitioner cites Ayala Corporation v. Ray Burton Development Corporation[32] and Fajardo Jr. v.
Freedom to Build, Inc.,[33] which do not further its cause either. These cases pertain to deed restrictions and
restrictive covenants in the sale of subdivision units; hence, they do not fall under any of the cases over which the
HLURB exercises exclusive jurisdiction. Naturally, there was every reason for the courts in the said cases to assume
and exercise their jurisdiction.
 
 Second Issue:

Authority to Stop Payment

of Monthly Rentals

The next proposition relates to the absence of a clearance from the HLRUB authorizing respondent to stop payment
of his amortizations. It is petitioners position that under Section 23 of Rule VI of the Rules implementing PD 957,
clearance must first be secured from the Board before the buyer of a subdivision lot or a home can lawfully withhold
monthly payments.

This contention is also unmeritorious.

First, Section 23 of PD 957 -- the law upon which the Implementing Rule cited was based -- requires only

due notice to the owner or developer for stopping further payments by reason of the latters failure to develop the

subdivision according to the approved plans and within the time limit. Section 23 provides as follows:

 
SECTION 23. Non-Forfeiture of Payments. No installment payment made by a buyer in a
subdivision or condominium project for the lot or unit he contracted to buy shall be forfeited in
favor of the owner or developer when the buyer, after due notice to the owner or developer, desists
from further payment due to the failure of the owner or developer to develop the subdivision or
condominium project according to the approved plans and within the time limit for complying with
the same. Such buyer may, at his option, be reimbursed the total amount paid including amortization
interests but excluding [delinquency] interests, with interest thereon at the legal rate. (Italics
supplied)
 
 
 

To be valid, an administrative rule or regulation must conform, not contradict, the provisions of the
enabling law.[34] An implementing rule or regulation cannot modify, expand, or subtract from the law it is intended
to implement. Any rule that is not consistent with the statute itself is null and void.[35] Thus, the Court in People v.
Maceren[36] explained as follows:

 
Administrative regulations adopted under legislative authority by a particular department
must be in harmony with the provisions of the law, and should be for the sole purpose of carrying
into effect its general provisions. By such regulations, of course, the law itself cannot be extended. x
x x.
 
The rule making power must be confined to details for regulating the mode or proceeding
to carry into effect the law as it has been enacted. The power cannot be extended to amending or
 expanding the statutory requirements or to embrace matters not covered by the statute. Rules that
subvert the statute cannot be sanctioned. x x x.
 
 
 
Plainly, therefore, Section 23 of Rule VI of the Implementing Rules cannot rise higher than Section 23 of
PD 957, which is the source of its authority. For that matter, PD 957 would have expressly required the written
approval of the HLURB before any stoppage of amortization payments if it so intended, in the same manner that the
decree specifically mandates written consent or approval by the NHA (now the HLURB) in Section 18.[37]

Section 18 has been held by the Court to be a prohibitory law; hence, acts committed contrary to it are void,[38]
pursuant to the intent of PD 957 to provide a protective mantle over helpless citizens who may fall prey to the
razzmatazz of what P.D. 957 termed unscrupulous subdivision and condominium sellers.[39] The Court stressed that
such construal ensures the attainment of the purpose of the law: to protect lot buyers, so that they do not end up still
homeless despite having fully paid for their home lots with their hard-earned cash.[40]

Apropos, to require clearance from the HLURB before stopping payment would not be in keeping with the intent of
the law to protect innocent buyers of lots or homes from scheming subdivision developers. To give full effect to
such intent, it would be fitting to treat the right to stop payment to be immediately effective upon giving due notice
to the owner or developer or upon filing a complaint before the HLRUB against the erring developer. Such course of
action would be without prejudice to the subsequent determination of its propriety and consequences, should the
suspension of payment subsequently be found improper.

Significantly also, the Court has upheld the reliance of a buyer on Section 23 of PD 957 when he ordered his bank to
stop payment of the checks he had issued, so that he could suspend amortization payments until such time as the
owner or developer would have fulfilled its obligations.[41] In Antipolo Realty Corporation v. National Housing
Authority,[42] the exercise of a statutory right to suspend installment payments was considered a valid defense
against the purported violations of Batas Pambansa (BP) Blg. 22 by the petitioner in that case. Such right negated
the third element the subsequent dishonor of the check without valid cause. With more reason, then, should the
buyers right to suspend installment payments be considered a valid defense against the suit for reconveyance and
damages.

WHEREFORE, this Petition is hereby DENIED and the assailed Decision and Resolution are AFFIRMED. Costs
against petitioner.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 96107 June 19, 1995

CORAZON JALBUENA DE LEON, petitioner,

vs.
HON. COURT OF APPEALS (SPECIAL SECOND DIVISION) and ULDARICO INAYAN, respondents.

ROMERO, J.:

In this petition for review, we are asked to set aside the amended decision of the Court of Appeals dated November
8, 1990 in "Corazon Jalbuena de Leon v. Uldarico Inayan," (CA-G.R. CV No. 19777) 1 which reversed its original
decision dated May 24, 1990. 2

The subject property in the case at bench involves two parcels of irrigated riceland covering an area of 117,785
square meters located in Barangays Guintas and Bingke, Napnod, Leganes, Iloilo. Jesus Jalbuena, the owner of the
land, entered into a verbal lease contract in 1970 with Uldarico Inayan, for one year renewable for the same period.
Inayan, private respondent herein, bound himself to deliver 252 cavans of palay each year as rental to be paid during
the first ten days of January. Private respondent who was a godson of Jesus Jalbuena, was allowed to continue with
the lease from year to year.

Petitioner Corazon Jalbuena de Leon is the daughter of Jesus Jalbuena and the transferee of the subject property.

Although private respondent cultivated the subject property through hired men, the cavans of palay were paid
annually until 1983 when Inayan ceased paying the agreed rental and instead, asserted dominion over the land.
When asked by the petitioner to vacate the land, he refused to do so, prompting the latter to bring an action in court.

In March 1984, herein petitioner filed a complaint against private respondent before the Regional Trial Court of
Iloilo City for "Termination of Civil Law Lease; Recovery of Possession, Recovery of Unpaid Rentals and
Damages."

Private respondent, in his Answer, claimed that the land had been tenanted by his father since 1938 and that he has
already been issued Certificates of Land Transfer (CLT) for the subject property. These Certificates of Land
Transfer were subsequently canceled by the then Ministry of Agrarian Reform on November 22, 1983 upon a
finding that said lands were owned by Jesus Jalbuena and that the CLTs were erroneously issued. 3

On April 11, 1984, the lower court issued an order adopting the procedure in agrarian cases.

The dispositive portion of the trial court's decision dated February 26, 1988 in favor of petitioner De Leon reads:

WHEREFORE, Premises considered, judgment is hereby rendered:

 1. Declaring the lease contract between plaintiff and defendant as a civil law lease, and that the
same has already been terminated due to defendant's failure to pay his rentals from 1983 up to the
present;

2. Ordering defendant Uldarico Inayan and his privies and successors-in-interest to immediately
vacate the land subject-matter of this complaint and to return possession thereof to plaintiff;

3. Ordering defendant Uldarico Inayan to pay plaintiff Corazon Jalbuena de Leon, one thousand
two hundred sixty (1,260) cavans of palay representing unpaid rentals from 1983 up to 1987, or its
money equivalent computed at the current market price of palay, less whatever amount may have
been deposited by defendant with the Court during the pendency of this case, which deposit
should be released in favor of plaintiff;

4. Ordering defendant Inayan to pay to plaintiff Jalbuena de Leon the sum of P38,501.28
representing the unpaid irrigation fees, and all fees thereafter until possession of the land has been
transferred to the plaintiff;

5. Ordering defendant Inayan to pay to plaintiff Jalbuena de Leon the sum of P3,000.00 as
attorney' s fees; P1,000.00 as litigation expenses, and P2,000.00 as moral damages, plus costs; and

6. Dismissing defendant's counterclaim for lack of merit. 4

On appeal to the Court of Appeals, private respondent raised the sole issue of jurisdiction and alleged that the lower
court, acting as Court of Agrarian Relations, had no jurisdiction over the action.

The respondent appellate court, on May 24, 1990, affirmed the trial court's decision, disposing as follows:

WHEREFORE, premises considered, the decision appealed from should be, as it is hereby
AFFIRMED, with a MODIFICATION that the period within which appellant should be ordered to
pay the rentals in arrears now covers the years 1983 to 1990. Costs against appellant. 5

It held that while jurisdiction must exist as a matter of law, private respondent's attack on the jurisdiction of the
lower court must fail for he is guilty of estoppel. 6 Despite several opportunities to question the jurisdiction of the
lower court, he failed to do so. Moreover, it was he who insisted, through his misrepresentations, that the case,
involving, as it does, purely agrarian issues, should be referred to the Ministry of Agrarian Reform. 7 Finally, the
appellate court held that since regional trial courts, by express provision of B.P. 129, Section 24, now have exclusive
original jurisdiction over agrarian cases, but still applying the special rules of agrarian procedure, it was no error for
the court below, even if acting as an agrarian court, to resolve a controversy involving a civil lease. 8

Private respondent's motion to reconsider the above decision was granted by the Court of Appeals on November 8,
1990. Respondent court then set aside its earlier decision and dismissed the civil case filed by petitioner below (Civil
Case No. 15628) for want of jurisdiction. In its amended decision, the appellate court held that petitioner's complaint
below was anchored on acción interdictal, a summary action for recovery of physical possession that should have
been brought before the proper inferior court. To make private respondent a deforciant so that the unlawful detainer
suit may be properly filed, it is necessary to allege when demand to pay rent and to vacate were made. The court
found that this requisite was not specifically met in petitioner's complaint below. Such failure on her part is fatal to
her cause since the one-year period within which a detainer suit may be instituted had not yet elapsed when Civil
Case No. 15628 was filed. Therefore, the court below was devoid of jurisdiction to entertain the case. 9

Hence this petition for review.

It is petitioner's contention that the Court of Appeals erred in holding that the case below is an unlawful detainer
action. Since the parties did not confine themselves to issues pertaining solely to possession but also to the nature of
the lease contract, the case is not one of unlawful detainer but one incapable of pecuniary estimation.

Next, petitioner argues that the issue of lack of jurisdiction should not have been resolved in favor of private
respondent who had voluntarily submitted to the jurisdiction of the court a quo and raised the issue only after an
adverse decision was rendered against him.

Aside from emphasizing the correctness of respondent court's ruling that the case below was a mere ejectment case,
private respondent raises the issue of res judicata in his comment.

Private respondent Inayan claims that the issue in the instant petition, i.e. whether or not the trial court, acting as an
agrarian court, had jurisdiction over the unlawful detainer suit filed by petitioner, had already been ruled upon by the
Court of Appeals in CA G.R. SP No. 15700 entitled "Uldarico Inayan v. Hon. Alonsagay and Corazon Jalbuena"
and the petition for review of said decision had already been denied by this Court in G.R. No. 89312. 10

The petition is impressed with merit.

The primary issue presented here revolves around the jurisdiction of the trial court, then acting as a court of agrarian
relations employing agrarian procedure, to try the suit filed by petitioner.

Jurisdiction of the court over the subject matter is conferred only by the Constitution or by law. 11 It is determinable
on the basis of allegations in the complaint. 12

An error in jurisdiction can be raised at any time and even for the first time on appeal. 13 Barring highly meritorious
and exceptional circumstances, 14 neither estoppel nor waiver may be raised as defenses to such an error. 15

In order to determine whether the court below had jurisdiction, it is necessary to first ascertain the nature of the
complaint filed before it.

A study of the complaint instituted by petitioner in the lower court reveals that the case is, contrary to the findings of
the respondent appellate court, not one of unlawful detainer.

An unlawful detainer suit (acción interdictal) together with forcible entry are the two forms of an ejectment suit that
may be filed to recover possession of real property. Aside from the summary action of ejectment, acción publiciana
or the plenary action to recover the right of possession and acción reivindicatoria or the action to recover ownership
which includes recovery of possession, make up the three kinds of actions to judicially recover possession. 16

Illegal detainer consists in withholding by a person from another of the possession of a land or building to which the
latter is entitled after the expiration or termination of the former's right to hold possession by virtue of a contract,
express or implied. 17 An ejectment suit is brought before the proper inferior court to recover physical possession
only or possession de facto and not possession de jure, where dispossession has lasted for not more than one year.
Forcible entry and unlawful detainer are quieting processes and the one-year time bar to the suit is in pursuance of
the summary nature of the action. 18 The use of summary procedure in ejectment cases is intended to provide an
expeditious means of protecting actual possession or right to possession of the property. They are not processes to
determine the actual title to an estate. If at all, inferior courts are empowered to rule on the question of ownership
raised by the defendant in such suits, only to resolve the issue of possession. 19 Its determination on the ownership
issue is, however, not conclusive.

Acción publiciana is the plenary action to recover the right of possession when dispossession has lasted for more
than one year or when dispossession was effected by means other than those mentioned in Rule 70. 20 Under
these circumstances, a plenary action 21 may be brought before the regional trial court. 22
Acción reivindicatoria, which is an action to recover ownership, including the recovery of possession, should also be
filed in the regional trial court.

Petitioner's complaint was for "Termination of Civil Law Lease; Recovery of Possession; Recovery of Unpaid
Rentals and Damages" 23 After alleging the facts regarding the lease of the subject property, including Inayan's
refusal to pay rent and to vacate, petitioner prayed that the trial court declare the civil law lease (and not "tenancy or
agricultural lease") terminated. Plaintiff likewise prayed that defendant be ordered to vacate the premises, pay back
rentals, unpaid irrigation fees, moral and exemplary damages and litigation fees.

Clearly, the case involves more than just the issue of possession. It was necessary for the trial court below to
determine whether the lease was civil and not an agricultural or tenancy relationship and whether its termination was
in order. More specifically, the complaint emphasized, in paragraph 4:

That in entering into the contract, Jesus Jalbuena and defendant Uldarico Inayan definitely agreed
that the contract was to be CIVIL LAW LEASE NOT TENANCY OR AGRICULTURAL
LEASE, for a period of one (1) year renewable for the same period at the option and agreement of
the parties; 24

As correctly determined by the trial court, one of the issues in the case below was whether or not the contract
entered into by the plaintiff and defendant was a civil law lease or an agricultural lease. If the former, the next issue
was whether the lease contract between the parties had been terminated in 1983 for failure of defendant to pay his
annual rental. 25

A detainer suit exclusively involves the issue of physical possession. The case below, however, did not concern
merely the issue of possession but as well, the nature of the lease contracted by petitioner's predecessor-in-interest
and private respondent. It likewise involved the propriety of terminating the relationship contracted by said parties,
as well as the demand upon defendant to deliver the premises and pay unpaid rentals, damages and incidental fees.

Where the issues of the case extend beyond those commonly involved in unlawful detainer suits, such as for
instance, the respective rights of parties under various contractual arrangements and the validity thereof, the case is
converted from a mere detainer suit to one "incapable of pecuniary estimation," thereby placing it under the
exclusive original jurisdiction of the regional trial courts (formerly the courts of first instance). 26

Not being merely a case of ejectment, the regional trial court possessed jurisdiction to try and resolve the case.

Still on the question of jurisdiction, private respondent Inayan, as appellant before the respondent court, claimed that
the trial court, acting as a court of agrarian relations, did not have jurisdiction over the complaint filed by petitioner
because the latter did not concern itself with tenancy or agrarian matters. The Court of Appeals, in its original
decision, ruled that private respondent was guilty of estoppel. Accordingly, he can not successfully raise the issue.

In the past, the principle of estoppel has been used by the courts to avoid a clear case of injustice. Its use as a
defense to a jurisdictional error is more of an exception rather than the rule. The circumstances outlining estoppel
must be unequivocal and intentional, for it is an exception to standard legal norms and is generally applied only in
highly exceptional and justifiable cases. 27

We find that the situation in the case at bench falls within the ambit of justifiable cases where estoppel may be
applied. The trial court's recourse to agrarian procedure was undoubtedly provoked by private respondent Inayan's
insistence on the existence of a tenancy relationship with petitioner. Private respondent cannot now use these same
misrepresentations to assert the court's lack of jurisdiction. He cannot invoke the court's jurisdiction to secure
affirmative relief against petitioner and, after failing to obtain such relief, repudiate or question that same
jurisdiction. 28
Participation in judicial proceedings where the court was devoid of jurisdiction is not normally considered as
estoppel because the jurisdiction of a court is mandated by law. Estoppel is likewise not appreciated where a
mistaken belief in the court's jurisdiction is maintained.

But private respondent's case is different for it does not involve an honest mistake. He is directly responsible for the
trial court's use of the special rules of agrarian procedure. His insistence brought about the want of jurisdiction he
conveniently asserted before the appellate court, and only after an adverse decision was leveled against him. Private
respondent cannot be allowed to seek refuge under the protective mantle of the law after he has abused and made a
mockery of it. He is, therefore, considered estopped from asserting the court's want of jurisdiction to try the case.

Moreover, the case was ostensibly one that involved agrarian matters, as alleged by private respondent. Hence the
trial court cannot be faulted for its use of agrarian procedure.

The respondent court also correctly held:

Finally, and more importantly, while it is true that when the trial court decreed that the procedure
outlined in P.D. 946 was to be observed at the trial of the case at bar, it, in effect assumed its
character as an agrarian court which is a court of limited jurisdiction, and that since agrarian
matters are solely cognizable by agrarian courts in the exercise of their limited jurisdiction
(Depositario vs. Herbas 121 SCRA 756) conversely, agrarian courts have no jurisdiction in cases
where there is no tenancy relation between the parties (Dumlao vs. De Guzman, 1 SCRA 144). We
believe, however, that the dictum enunciated in the Dumlao case obtains only when, as before, the
then C.F.I. and C.A.R. are two separate and distinct entities. Consequently, the foregoing legal
principle no longer finds much relevance under the present system, said agrarian courts having
been integrated into the Regional Trial Courts which, by express mandate of Section 24 of B.P.
129, shall have exclusive original jurisdiction over agrarian cases although they are ordained to
continue applying the special rules of procedure provided for said cases. This being the case, it is
no error for the court below, acting as an agrarian court, to resolve a controversy involving a civil
lease since it is already a settled rule that inasmuch as the RTC is a court of general jurisdiction,
whether a particular matter should be resolved by it in the exercise of its general jurisdiction, or
in its limited jurisdiction, or in its limited jurisdiction, is not a jurisdictional question but a
procedural question involving a mode of practice which, therefore, may be waived (Manalo vs.
Mariano, L-33850, Jan. 22, 1976; Santos vs. Banayo, L-31854, Sept. 9, 1982). 29 (Emphasis ours.)

On the matter of res judicata raised by private respondent, we conclude that the same does not find application in
instant petition. The issues herein and in the petition in G.R. No. 89312 30 are not the same. In the latter, the issue
involved execution pending appeal granted by the trial court judge to petitioner Jalbuena De Leon. The Court of
Appeals 31 enjoined the respondent judge from enforcing the execution pending appeal after having found no valid
and compelling reason to justify said execution. Then too, private respondent asserted, and the appellate court found,
that an agrarian court has no jurisdiction in a case where there exists no tenancy relation between the parties. The
court said:

In any event, the matter of jurisdiction of respondent court having been impugned and said issue
permeating and going as it does into the very competence of the trial court to act on CAR Case
No. 15628, it behooves us to tread softly and give the benefit of the doubt to petitioner, for should
execution pending appeal be allowed and the judgment is later ordered vacated on the ground that
the trial court had no jurisdiction to hear the case, then it would be well-nigh impossible to restore
petitioner to his former status. 32

From the foregoing quote, we find that the decision of the appellate court did not categorically rule on the matter of
jurisdiction but only made mention of it in passing and in ruling upon the real issue of the correctness of execution
pending appeal ordered by the respondent judge. The decision in CA-G.R. SP No. 15700 became final after the
petition for review of said decision was dismissed by the Court for failure to pay the prescribed legal fees and to
attach duplicate original or certified true copies of the questioned decision. 33
In sum, we have concluded that the case filed by petitioner below, not being one of unlawful detainer, the regional
trial court had jurisdiction to hear and try the case.

Moreover, as shown in the foregoing paragraphs, private respondent is estopped from asserting the lower court's
lack of jurisdiction.

WHEREFORE, the petition is GRANTED. The amended decision of the Court of Appeals dated November 8, 1990
in CA G.R. CV No. 19777 ("Corazon Jalbuena de Leon v. Uldarico Inayan") is SET ASIDE and the original
decision dated May 24, 1990 is REINSTATED.

Costs against private respondent.

SO ORDERED.