Provisional ruling

As a rule, unlawful detainer or ejectment cases are resolved on the issue of possession or who has the better right to possess, and not who owns the property. But in this particular case between Albert and Billy, the issue of ownership is also resolved.

Albert entered into a partnership agreement with Billy and his brother Jimmy to engage in business under the name of Noah’s Ark Group of Companies (Noah’s Ark). Their partnership then acquired a sugar refinery which they named Noah’s Ark Sugar Refinery. After four years of operation, Billy was appointed chief of staff of the sugar refinery and was allowed to occupy the townhouse in Gilmore Townhomes, Granada Street, Quezon City registered in the name of Albert.  In furtherance of their partnership business, Albert and Jimmy later on entered into another agreement.

Twelve years after, Albert sent a demand letter to Billy asking him to vacate the townhouse. When Jimmy learned of such demand, he filed an adverse claim over the townhouse property annotating his interest in the property as a co-owner. Jimmy claimed that the townhouse was bought using funds from Noah’s Ark, and hence, part of the property of the partnership. On the strength of his brother’s adverse claim, Billy refused to vacate the townhouse. He also claimed that his occupation of the townhouse is part of the benefits of being chief of staff.

Because of this refusal, Albert filed a complaint for “Unlawful Detainer” against Billy before the Metropolitan Trial Court (MeTC). To prove his case, he presented as evidence the Transfer of Certificate of Title (TCT) No. 108763 over the property issued in his name. He alleged that Billy’s occupation over the townhouse was merely by tolerance, with the understanding that he should vacate the property upon demand. In answer to the complaint, Billy presented the partnership agreements, the contract to sell of the townhouse, and the cash voucher evidencing payment for the acquisition of the property.

After due notice and hearing, the MeTC rendered a decision in favor of Albert ruling that he had the right to the possession of the said townhouse as its registered owner. On appeal to the Regional Trial Court (RTC), said ruling was reversed and another decision was rendered in favor of Billy. The RTC held that the property was purchased in the name of Noah’s Ark and that Albert merely held TCT No. 108763 only for expediency. The RTC also gave credence to the un-rebutted affidavit and authorization executed by Jimmy wherein it is stated that Billy’s authority to occupy the disputed property was part of his privilege as chief of staff of Noah’s Ark.

The Court of Appeals (CA) reversed the decision of the RTC and ruled in favor of Albert. It held that the issue of possession could not be resolved without ruling on the claim of ownership. And since the TCT presented by Albert unequivocally showed that he owned the property, he was entitled to its possession, the CA ruled. Was the CA correct?

Yes. According to the Supreme Court, the issue of ownership may be ruled upon in an ejectment case if the defendant raises it in his pleadings and adduces evidence in support thereof. A registered owner has the superior right to possess the property in unlawful detainer cases. It is an age-old rule that the person who has a Torrens Title over a land is entitled to its possession. When the property is registered under the Torrens system, the registered owner’s title to the property is presumed legal and cannot be collaterally attacked, especially in a mere action for unlawful detainer. Itt does not even matter if the party’s title to the property is questionable.

Albert’s TCT over the property is an indefeasible title and therefore he is entitled to its possession as a matter of right. The partnership agreements and other documentary evidence presented by Billy, are not, by themselves, enough to offset Albert’s right as registered owner.

But this adjudication on ownership is merely provisional and would not bar an action between Albert and Jimmy involving their claimed shares in the property (William T. Go vs. Alberto T. Looyuko, et al., G.R. No. 196529, July 1, 2013).

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