SECOND DIVISION

[G.R. NO. 134742 : September 22, 2004]

MELCHOR HILADO, CESAR ARAL, ADELA ARAL, ARTURO VILLARENA, TARCELO

MIRANO, ROBERTO PEDUHAN, ANTONIO SOLITO, MANUEL CANIENDO, FELIX
ORTEGA, ANTONIO BALLENTOS, SALVADOR MIRANO, VICENTE ONLAYAO,
FEDERICO ORLANO, ROGELIO SEMILLANO, SALVADOR DE GUZMAN, PACIFICO
TALIBUTAB, NESTOR BELLIRAN, SALUSTIANO BELLIRAN,EDGARDO CABRA,
and YOLANDA LESTINO, Petitioners, v. HON. ROLANDO CHAVEZ, PERPETUAL
HELP DEVELOPMENT AND REALTY CORP., represented by the Chairman of the
Board JULIETA C. SALGADO, Respondents.

DECISION

CALLEJO, SR., J.:

Before us is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, of the Decision1 and the Resolution2 of the Regional Trial Court
(RTC) of Kabankalan City, Branch 61, in Civil Case No. 830.

The Antecedents

Celso "Nene" Zayco was the owner of a large parcel of agricultural land with an area of
540,248 square meters, located in Kabankalan Poblacion, Negros Occidental, now
Kabankalan City. The property was identified as Lot No. 343 and was covered by
Transfer Certificate of Title (TCT) No. 133298, and portions thereof were occupied and
cultivated by tenants. Zayco mortgaged the property to the Pacific Banking Corporation
as security for a loan; however, the bank foreclosed the mortgage upon Zayco's failure
to pay his account. When the property was sold at public auction by the sheriff, the
bank was adjudged as the highest bidder. Zayco failed to redeem the property, and the
bank consolidated its title thereon; TCT No. 115264 was issued in its favor on March
20, 1980.3

On December 21, 1984, the bank sold the property to Julieta C. Salgado, the Chairman
of the Board of the respondent, Perpetual Help Development and Realty Corporation
(PHDRC). TCT No. 133298 was, thereafter, issued in favor of PHDRC on January 18,
1985. No liens or encumbrances whatsoever or any notice that the property had been
placed under the agrarian reform laws were annotated at the dorsal portion thereof.4

Subsequently, the Department of Agrarian Reform (DAR) granted Emancipation Patents

to the twenty (20) tenants on the property from April 28, 1988 to July 1, 1988 on the
basis of which titles were issued in their favor during the period of September 16, 1988
to August 24, 1990.5

The foregoing notwithstanding, the Sangguniang Bayan ng Kabankalan approved, on

February 14, 1996, Resolution No. 96-39, reclassifying the property partly as property
for light industry, and the rest as residential.6
On August 26, 1997, the respondent filed a complaint for unlawful detainer against the
twenty (20) petitioners, who were all occupants-farmers on the property, with the
Municipal Trial Court in Cities (MTCC) of Kabankalan City, docketed as Civil Case No.
034-97.

The respondent alleged, inter alia, in its complaint that on May 27, 1997, it obtained a
certified xerox copy of TCT No. 133298 from the Register of Deeds and discovered that
of the twenty (20) petitioners, seven (7) had been issued Emancipation Patents on July
1, 1988 which were inscribed at the dorsal portion of said title. Nevertheless, according
to the respondent, the petitioners were not agricultural tenants under the agrarian
reform laws because (a) they entered the property without its consent and did not pay
any consideration for the use of the land they occupied; and (b) the property was, as
resolved by the Sangguniang Bayan under Resolution No. 96-39 in 1996, partly for light
industry and partly residential.

The respondent prayed that, after due proceedings, judgment be rendered in its favor,
thus:

WHEREFORE, premises considered, it is respectfully prayed of the Honorable Court that,

after due notice and hearing, judgment be rendered in favor of plaintiff and against
defendants as follows:

1. Ordering defendants to vacate the areas they respectively occupy in Lot No. 343 and
to return the same to plaintiff;

2. Ordering defendants to pay to plaintiff P10,000.00 as litigation

expenses; P50,000.00 as attorney's fees, plus P1,000.00 for every court appearance
and P20,000.00 as exemplary damages.

Plaintiff prays for such other reliefs and remedies just and equitable in the premises.7

Appended to the complaint was a photocopy of TCT No. 133298.

In their answer with motion to dismiss the complaint, the petitioners, who were
represented by DAR lawyer Atty. Quirico Infante, alleged that the landholding had long
been placed under Operation Land Transfer, and that they became the owners thereof
under Presidential Decree No. 27. They interposed the following special and affirmative
defenses:

12. - That the landholding, subject matter of the case more particularly described as
Lot No. 343, has been placed within the ambit of the Operation Land Transfer program
per P.D. 27 as amended;

13. - That defendants herein are actual-occupants and tenant-tillers of the land
wayback in [the] 1970's, having been installed thereat by Lorenzo Zayco, the original
landowner with the defendants sharing [with] the landowner the produce of the land up
to 1981 as evidenced by receipts which will be presented in due time;
14. - That being bonafide tenant-tillers thereat, they were identified by the Department
of Agrarian Reform as qualified farmers-beneficiaries and consequently were issued
Emancipation Patents;

15. - That in 1982-83, the subject landholding was conveyed by way of sale by the
former landowner to J. Salgado;

16. - That despite the sale thereof to the plaintiff herein, defendants continued to
cultivate the land and extend payment of lease rentals to the new landowner thereof;

17. - That in 1988-1989, being beneficiaries of the program, caused to directly pay
their amortization to the Land Bank of the Philippines (LBP);

18. - That defendants, having been issued EPs, are therefore considered owners of the
land and now deemed full owners of the land they till as provided for under P.D. 27 and
E.O. 328 respectively, thus, cannot be ejected/ousted therefrom without circumventing
their right to [s]ecurity of tenure as amplified in the case of De Jesus v. IAC, SCRA 559
(sic) and Dolorfino v. CA, 191 SCRA 880, Dec. 3, 1990, where the Highest Tribunal
ruled that:

"Once a leasehold relation has been established, the agricultural lessee is entitled to
security of tenure. He has a right to continue working on the land and he may not be
ejected therefrom except for cause as provided by law.

The agricultural relationship is not extinguished by the sale, alienation or transfer of the
legal possession of the landholding. The purchaser or transferee is simply subjugated to
the rights and substituted to the obligations of the agricultural lessor." (Sec. 10, R.A.
3844) (Dolorfino v. Court of Appeals, supra).

19. - That granting that the property in question has already been classified as
residential, commercial and industrial zone per Res. No. 96-39, dated February 14,
1996, however, the landowner has failed to present a Conversion Order to be issued by
the DAR Secretary, thus, in absence thereof, the subject landholding remains
agricultural, in the light of A.O. 12, Series of 1994 the same provides and we quote:

"II. LEGAL MANDATE

A. - The Department of Agrarian Reform (DAR) is mandated to "approved (sic) or

disapproved (sic) applications for conversion, restructuring or readjustment of
agricultural lands into non-agricultural uses," pursuant to Section 4(j) of Executive
Order No. 129-A, Series of 1987.

B. - Section 5(1) of E.O. No. 129-A, Series of 1987, vests in the DAR, exclusive
authority to approve or disapprove applications for conversion of agricultural lands for
residential, commercial, industrial and other land uses."8

The petitioners prayed that the complaint be dismissed for lack of jurisdiction over the
subject matter of the action.
The court a quo applied the Rules of Summary Procedure. Instead of ruling on the
motion to dismiss, it ordered the parties to file their position papers. The petitioners
appended to their position paper, as Annexes "1" to "36," photocopies of sample
receipts purportedly signed by Celso Zayco and Julieta Salgado, acknowledging receipt
of their respective shares in the produce of the landholding.9

On December 18, 1997, after due proceedings, the court a quo rendered judgment in
favor of the respondent. The decretal portion of the decision reads:

WHEREFORE and upon the foregoing disquisitions, the Court hereby renders judgment
in favor of the plaintiff and against the defendants, to wit:

1. - Ordering the named defendants to vacate the portions they had been occupying of
Lot No. 343, situated in Sitio Lapui, Barangay Hilamanan, Kabankalan City, and to turn-
over the possession thereof to the plaintiff; andcralawlibrary

2. - Ordering the DISMISSAL of plaintiff's claims for litigation expenses, attorney's fees
and exemplary damages.

SO ORDERED.10

The court a quo ruled that the petitioners failed to prove that they were farmers-
beneficiaries on the landholding and that based on Resolution No. 96-39 of the
Municipal Council, the said property had already been reclassified as part residential
and part industrial/commercial areas. The court a quo also ruled that thirteen (13) of
the petitioners occupied portions of the landholding only by tolerance of the respondent
and its predecessors, and failed to pay any amount as consideration for their occupancy
of the petitioners' property. It rejected the petitioners' contention that the Department
of Agrarian Reform Adjudication Board (DARAB) had exclusive original jurisdiction over
the subject matter of the action, ruling that the action was one for unlawful detainer
over which it had exclusive original jurisdiction.

Aggrieved, the petitioners filed a notice of appeal dated January 19, 1998 on the
ground that grave errors were committed by the court a quo in its findings of facts and
conclusions of law in its decision.11

On February 6, 1998, a motion to disapprove the notice of appeal and for execution of
final judgment was filed by the respondent on its claim that the required appellate
docket and other lawful fees had not been paid to the clerk of court within the
reglementary period therefor. The court a quo issued an Order on March 31, 1998,
granting the motion of the respondent and disapproved the notice of appeal filed by the
petitioners.12 It also ordered the issuance of a writ of execution on its finding that its
decision had become final and executory, following the failure of the petitioners to
perfect their appeal to the RTC. On April 2, 1998 and April 21, 1998, writs of execution
were issued by the MTCC.

The petitioners did not assail the order of the MTCC. Instead, the petitioners filed on
April 23, 1998 a petition with the Regional Trial Court against the respondent for the
annulment of the decision of the MTC in Civil Case No. 034-97.
The petitioners alleged, inter alia, that they were agricultural tenants of the late Cesar
Zayco as evidenced by the receipts signed by him, where he acknowledged receipt of
their rentals over the portions of the landholding tenanted by them, respectively, and
the affidavit of Lorenzo Zayco, the son of Cesar Zayco, appended to the petition as
Annex "J" thereof. They also alleged, thus:

2. That subject landholding has the following farmers - beneficiaries, whose respective
farmholdings were identified under [the] Operation Land Transfer (OLT) program of the
government pursuant to PD 27 as follows:

1. Melchor Hilado 11. Federico Orlano

2. Cesar Aral 12. Felix Ortega
3. Adela Aral 13. Rogelio Semillano
4. Arturo Villarena 14. Antonio Ballentos
5. Salvador Mirano 15. Pacifico Talibutab
6. Tarcelo Mirano 16. Nestor Belliran
7. Roberto Pedulan 17. Salustiano Belliran
8. Antonio Solito 18. Salvador de Guzman
9. Vicente Onlayao 19. Edgardo Cabra
10. Manuel Caniendo 20. Yolanda Lestino

3. That when my father Celso "Nene" Zayco, during his lifetime, administered subject
landholding, he received yearly rental consideration in the amount fixed by humber
(sic) of cavans of palay, from the above-named farmer-beneficiaries. In fact, when my
father was already sickly I was assigned to collect yearly rentals from said farmers-
beneficiaries;

4. That in 1981, unfortunately, the Pacific Banking Corporation foreclosed said

farmholding of my late father and before the Zayco family knew it, it was already
purchased by Julieta C. Salgado, the latter likewise, as far as my knowledge is
concerned, also collected yearly rental consideration from the above-named parties.13

The petitioners also averred that, after she purchased the property in 1981, Julieta
Salgado received rentals over the landholding from them, as evidenced by the
receipts14 signed by her. They averred that in 1988, Emancipation Patents15 over their
respective landholdings were issued in their favor. The petitioners also claimed that
they had made partial payments to the Land Bank of the Philippines (LBP) for the price
of the lots covered by their respective patents, as evidenced by the certification
attached as Annex "BBB" of the petition. They also appended a Certification by the
Register of Deeds that thirteen (13) of them were issued Transfer Certificates of Title
based on the Emancipation Patents executed in their favor, viz:

EP TITLE NO. LOT NO. NAME OF FARMERS AREA/SQ.M.

EP-1716 343-9 Pacifico B. Talibutab 8,735
EP-1717 343-15 Felix S. Ortega 8,106
EP-1718 343-22 Roberto D. Peduhan 7,779
EP-1719 343-25 Arturo T. Villarena 8,346
EP-1720 343-19 Vicente C. Onlayao 7,709
EP-1722 343-11 Antonio E. Ballentos 9,066
EP-1723 343-29 Cesar C. Aral 8,485
EP-1724 343-18 Manuel P. Caniendo 10,110
EP-1725 343-24 Salvador G. Mirano 8,215
EP-1740 343-8 Salustiano P. Billeran 23,391
EP-1751 343-16 Federico L. Orlano 10,453
EP-1754 343-14 Rogelio U. Semillano 7,668
EP-1813 343-23 Tarcelo S. Mirano 7,92016

The petitioners asserted that the MTC had no jurisdiction over the subject matter of the
action of the respondent in Civil Case No. 034-97, it being an agrarian dispute between
the petitioners, as patentees, and the respondent; hence, the court a quo's decision
was null and void. They contended that the Provincial Agrarian Reform Adjudicatory
Board (PARAD) had exclusive jurisdiction over the action in Civil Case No. 034-97.

The RTC found the petition sufficient in form and substance and directed the
respondent to file its comment on or answer to the petition.17

In its verified answer to the petition, the respondent averred that the receipts
purportedly signed by Julieta C. Salgado were spurious. It also asserted that the
petitioners failed to submit the said receipts to the court a quo and, as such, they were
barred from submitting the same before the RTC. The respondent also countered that
the petitioners participated in the proceedings in the MTCC and were, thus, estopped
from assailing the jurisdiction of the court a quo. It posited that the petitioners were
not entitled to injunctive relief because the decision of the MTC had become final and
executory.

On April 29, 1998, the RTC issued an Order declaring that the case involved only
questions of law and not of facts, and ordered the parties to file their respective
memoranda.18 On May 26, 1998, the RTC rendered judgment dismissing the petition on
the ground that the MTCC had exclusive jurisdiction over the action of the plaintiff in
Civil Case No. 034-97 and over the persons of the defendants therein.19 The RTC also
held that the petitioners failed to file a motion to dismiss the complaint in the MTCC and
even participated in the proceedings therein; hence, they were estopped from assailing
the jurisdiction of the MTCC. The petitioners filed a motion for reconsideration of the
decision, but on June 26, 1998, the RTC issued an order denying the same.

The Present Petition

Instead of appealing the decision to the Court of Appeals by writ of error, the
petitioners filed their petition with this Court, under Rule 45 of the Rules of Court, as
amended, assailing the decision of the RTC on questions of law. They appended to their
petition, as Annexes "Q" to "JJ" thereof, certified true copies of the transfer certificates
of title issued to each of them during the period of September 16, 1988 to August 24,
1990 by the Register of Deeds based on Emancipation Patents executed by the
President of the Philippines, through the Secretary of Agrarian Reform, to prove that
long before the respondent filed its complaint with the MTCC, the Register of Deeds had
issued such titles to each of them, thus:

EMANCIPATION DATE OF TCT DATE OF

OWNER
PATENT APPROVAL NUMBER ISSUE
Federico L. September 20,
EP-1751 April 28, 1988 A-192817
Orlano 1988
Ma. Yolanda S. August 24,
EP - 5656 July 1, 1988 A-192802
Lestino 1990
September 16,
Felix S. Ortega EP-1717 April 28, 1988 A-192816
1988
Melchor T. March 21,
EP-5139 July 1, 1988 A-192831
Hilado 1990
Antonio D.
EP-5414 July 1, 1988 A-192821 July 12, 1990
Solito
Arturo T. September 16,
EP-1719 April 28, 1988 A-192826
Vellarena 1988
Antonio E. September 16,
EP-1722 April 28, 1988 A - 192812
Ballentos 1988
Salvador J. De
EP-5415 July 1, 1988 A-192808 July 12, 1990
Guzman
Rogelio U. September 20,
EP-1754 April 28, 1988 A-192815
Semellano 1988
Salustiano P. September 20,
EP-1740 April 28, 1988 A-192809
Billeran 1988
September 16,
Vicente Onlayao EP-1720 April 28, 1988 A-192820
1988
Salvador G. September 16,
EP-1725 April 28, 1988 A - 192825
Mirano 1988
Nestor P.
EP-5416 July 1, 1988 A-192804 July 12, 1990
Billeran
Tarcelo S. September 22,
EP-1813 April 28, 1988 A-192824
Mirano 1988
Pacifico P. September 16,
EP-1716 April 28, 1988 A-192810
Talibutab 1988
Edgardo D.
EP-5417 July 1, 1988 A-192807 July 12, 1990
Cabra
Manuel P. September 16,
EP-1724 April 28, 1988 A-192819
Caniendo 1988
August 24,
Adela O. Aral EP-5657 July 1, 1988 A-192827
1990
Roberto D. September 16,
EP-1718 April 28, 1988 A-192823
Peduhan 1988
September 16,
Cesar C. Aral EP-1723 April 28, 1988 A-192830
1988

The issues for resolution are the following:

1. Whether it is proper for the petitioners to file a Petition for Review under Rule 45 of
the Rules of Court with this Court from the decision of the RTC;

2. Whether the MTCC had exclusive jurisdiction over the action of the respondent; and,

3. Whether the decision of the MTCC is null and void

On the first issue, the petitioners assert that, instead of appealing the decision of the
RTC to the Court of Appeals, they filed their petition under Rule 45 of the Rules of Court
because the issues raised by them are only legal issues. They aver that the RTC erred
when it declared that instead of filing their answer to the respondent's complaint in the
MTCC, participating in the proceedings and praying for reliefs therein, the petitioners as
defendants in said case, should have filed a motion to dismiss the complaint. The
petitioners posit that they could not have filed such motion because the proceedings in
ejectment cases are summary in nature and such motion to dismiss the complaint is a
prohibited pleading. The petitioners point out that they incorporated in their answer to
the complaint a motion to dismiss the complaint for lack of jurisdiction over the subject
matter of the action which should be considered as a motion for a hearing on their
affirmative defenses. They also aver that the action filed before the MTCC is an agrarian
case involving agricultural land placed under Operation Land Transfer, for which they
were issued Emancipation Patents by the Secretary of Agrarian Reform even before
such complaint for ejectment was filed against them. They note that the issue involved
the validity of the Emancipation Patents issued to them, and was decisive of the issue
of jurisdiction in the MTCC; hence, the MTCC had no original jurisdiction over the action
of the respondent, conformably to Republic Act No. 6657, as amended, and the DARAB
Rules of Procedure. The petitioners assert that by virtue of Presidential Decree (P.D.)
No. 27 and the Emancipation Patents issued to them, they became owners of the
property and were entitled to the possession thereof.

For its part, the respondent asserts that, if at all, the RTC decision is appealable, the
proper remedy of the petitioners from the said decision was to appeal, by writ of error,
to the Court of Appeals under Rule 41 of the Rules of Court, as amended, and not via a
Petition for Review on Certiorari to this Court under Rule 45 of the said Rules. It
contends that, as gleaned from the petition, the petitioners raised factual issues. It
notes that the petitioners assailed the factual findings made by the MTCC that they (the
petitioners) are not agricultural tenants of the late Cesar Zayco and Julieta C. Salgado,
and that the subject landholding is residential and not agricultural.

In reply, the petitioners contend that this appeal via Rule 45 of the Rules of Court is
proper, considering that they raised purely legal issues in their petition. They note that
the RTC itself, per its Order on April 29, 1998, succinctly states that the issue raised by
the parties is one of law, namely, whether the MTCC had jurisdiction over the action of
the respondent against the petitioners. They point out that the RTC required the parties
to merely file their respective memoranda, instead of adducing evidence in their favor.

We agree with the respondent that the remedy of a party aggrieved by the decision of
the RTC, in the exercise of its original jurisdiction, is to appeal by writ of error to the
Court of Appeals under Rule 4120 of the Rules of Court, in which questions of facts
and/or of law may be raised by the parties. However, under Section 2(c),21 Rule 41 of
the Rules of Court, where only questions of law are raised or are involved, the appeal
shall be to the Supreme Court by Petition for Review on Certiorari under Rule 45 of the
Rules. However, even if only questions or issues are raised by the party in his appeal, it
should be made to the Court of Appeals and not to the Supreme Court, unless there are
compelling reasons to allow such appeal.

In Reyes v. Court of Appeals,22 we held that "for a question to be one of law, it must
involve no examination of the probative value of the evidence presented by the litigants
or any one of them." In an avuncular case, we held that there is a question of law in a
given case when the doubt or difference arises as to what the law is pertaining to a
certain set of facts, and there is a question of fact when the doubt arises as to the truth
or the falsity of alleged facts.23

We agree with the petitioners and the RTC that the issues before it were legal: (1)
whether the MTCC had properly exercised jurisdiction over the subject matter of the
action of the respondent based on the material allegations of said complaint, as well as
the relevant pleadings of the parties in said case; and (2) whether the petitioners were
estopped from assailing the decision of the MTCC on the ground of lack of jurisdiction.

We resolved to give due course to the petition. Indeed, unless the issues, which are
cogent and substantial, are resolved, in all likelihood, suits may again be filed by the
aggrieved parties in suits involving landholdings where the validity of the decision of the
MTCC is assailed for lack of jurisdiction.

On the issue of jurisdiction, Section 33, paragraph 2 of Batas Pambansa Blg. 129, as
amended by Section 3 of Rep. Act No. 7691 provides that Municipal Trial Court,
Municipal Circuit Trial Court and Metropolitan Trial Court, have exclusive original
jurisdiction over cases for unlawful detainer. The proceedings in ejectment cases are
covered by Rule 70 of the Rules of Court and the Rules on Summary Procedure.
However, such courts have no original jurisdiction to determine and adjudicate agrarian
disputes under Rep. Act No. 6657, as amended, and the Rules of Procedure issued by
the DARAB implementing said laws, which are within the exclusive original and
appellate jurisdiction of the DARAB, thus:

SECTION 1. Primary And Exclusive Original and Appellate Jurisdiction. The Board shall
have primary and exclusive jurisdiction, both original and appellate, to determine and
adjudicate all agrarian disputes involving the implementation of the Comprehensive
Agrarian Reform Program (CARP) under Republic Act No. 6657, Executive Order Nos.
228, and 129-A, Republic Act No. 3844 as amended by Republic Act No. 6389,
Presidential Decree No. 27 and other agrarian laws and their implementing rules and
regulations. Specifically, such jurisdiction shall include but not be limited to cases
involving the following:

a) The rights and obligations of persons, whether natural or juridical, engaged in the
management, cultivation and use of all agricultural lands covered by the CARP and
other agrarian laws;

f) Those involving the issuance, correction and cancellation of Certificates of Land

Ownership Award (CLOAs) and Emancipation Patents (EPs) which are registered with
the Land Registration Authority;

g) Those cases previously falling under the original and exclusive jurisdiction of the
defunct Court of Agrarian Relations under Section 12 of Presidential Decree No. 946,
except sub-paragraph (Q) thereof and Presidential Decree No. l 815.

It is understood that the aforementioned cases, complaints or petitions were filed with
the DARAB after August 29, 1987.

Matters involving strictly the administrative implementation of Republic Act No. 6657,
otherwise known as the Comprehensive Agrarian Reform Law (sic) (CARP) of 1988 and
other agrarian laws as enunciated by pertinent rules shall be the exclusive prerogative
of and cognizable by the Secretary of the DAR.

h) And such other agrarian cases, disputes, matters or concerns referred to it by the
Secretary of the DAR.

The DAR is vested with primary jurisdiction to determine and adjudicate agrarian
reform matters and shall have exclusive jurisdiction over all matters involving the
implementation of agrarian reform programs. The rule is that the DARAB has
jurisdiction to try and decide any agrarian dispute or any incident involving the
implementation of the Comprehensive Agrarian Reform Program.24 In Tirona v.
Alejo,25 we held that the MTCC has no jurisdiction over an ejectment case where the
issue of possession is inextricably interwoven with an agrarian dispute.

The well-entrenched principle is that the jurisdiction of the court over the subject
matter of the action is determined by the material allegations of the complaint and the
law, irrespective of whether or not the plaintiff is entitled to recover all or some of the
claims or reliefs sought therein.26 In Movers-Baseco Integrated Port Services, Inc. v.
Cyborg Leasing Corporation,27 we ruled that the jurisdiction of the court over the nature
of the action and the subject matter thereof cannot be made to depend upon the
defenses set up in the court or upon a motion to dismiss for, otherwise, the question of
jurisdiction would depend almost entirely on the defendant.28 Once jurisdiction is
vested, the same is retained up to the end of the litigation. We also held in Arcelona v.
Court of Appeals29 that in American jurisprudence, the nullity of a decision arising from
lack of jurisdiction may be determined from the record of the case, not necessarily from
the face of the judgment only.

The MTCC does not lose its jurisdiction over an ejectment case by the simple expedient
of a party raising as a defense therein the alleged existence of a tenancy relationship
between the parties.30 But it is the duty of the court to receive evidence to determine
the allegations of tenancy.31 If after hearing, tenancy had in fact been shown to be the
real issue, the court should dismiss the case for lack of jurisdiction.32

Earlier in Bayog v. Natino,33 we held that if a defendant in an action for ejectment

interposed the defense of being the agricultural tenant in the property subject of the
complaint, the MTCC should hear and receive the evidence for the purpose of
determining whether or not it possessed jurisdiction over the case, and if, upon such
hearing, tenancy is shown to be the issue, the MTCC should dismiss the case for lack of
jurisdiction. Our ruling in said case is a reiteration of our rulings in Ignacio v. CFI,34 and
in Concepcion v. Presiding Judge of CFI, Bulacan, Br. V.35

In this case, even on the basis of the material allegations of the complaint, more so if
the answer with motion to dismiss the petition and position papers of the parties are
considered, the DARAB, and not the MTCC, had primary and original jurisdiction over
the action of the respondent. The latter alleged, in its complaint, that seven (7) of the
petitioners were issued Emancipation Patents which were annotated at the dorsal
portion of TCT No. 133298, a copy of which is appended to the complaint. Indeed, the
title contains the following annotations:

ENTRY NO. EP LOT NO. AREA/SQ.M NAME OF FARMER

EP-1539 343-30 8,597 Melchor T. Hilado

The property described in this Title has been partially cancelled Emancipation Patent
Issued By Department of Agrarian Reform, containing an Area as stated to above.

Date of Instrument July 1, 1988.

Date of Inscription March 21, 1990.

(Sgd.) Illegible
Register of Deeds

ENTRY NO. EP LOT NO. AREA/SQ.M NAME OF FARMER

EP-5414 343-20 7,232 Antonio D. Solito
EP-5415 343-7 7,518 Salvador J. de Guzman
EP-5416 343-3 6,531 Nestor P. Billeran
EP-5417 343-6 14,529 Edgardo D. Cabra

The property described in this Transfer Certificate of Title has been PARTIALLY
CANCELLED by Emancipation Patent issued by Department of Agrarian Reform
containing an area of 35,810 SQ/M. as stated above.

Date of Instrument July 1, 1988.

Date of Inscription July 12, 1990.

(Sgd.) Illegible
Register of Deeds

ENTRY NO. EP LOT NO. AREA/SQ.M NAME OF FARMER

EP-5656 343-1 14,916 Maria Yolanda S. Lestino
EP-5657 343-26 9,558 Adela O. Aral

The property described in this Transfer Certificate of Title has been PARTIALLY
CANCELLED by Emancipation Patent issued by the Department of Agrarian Reform
containing an area of TWENTY-FOUR THOUSAND FOUR HUNDRED SEVENTY-FOUR
(24,474) SQ. METERS as stated to above..

Date of Instrument July 1, 1988.

Date of Inscription August 24, 1990.

(Sgd.) Illegible
Register of Deeds36

The foregoing annotation confirmed the claim of the petitioners in their answer with
motion to dismiss that the entirety of the landholding had been placed under the
Operation Land Transfer program under P.D. No. 27 and that the petitioners to whom
the said patents were granted by the government became the owners of the property
covered by the said patents. In fact, TCT No. 133298 had been partially cancelled by
the said patents. Consequently, the petitioners who were the beneficiaries under the
Emancipation Patents are entitled to possess the property covered by said patents.37

It bears stressing that before Emancipation Patents are issued to farmers-beneficiaries,

the DAR is mandated to comply with the requirements of P.D. No. 266 and the
procedural requirements set forth by Rep. Act No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL) of 1988.38 Conformably to our ruling in
Bayog v. Natino,39 the MTCC should not have applied the Rules on Summary Procedure;
it should have dismissed the complaint for lack of jurisdiction; or, at the very least,
should have proceeded to hear the parties on the petitioners' motion to dismiss and
receive their respective evidence on the issue of whether or not it had jurisdiction over
the subject matter of the action. Had the MTCC followed our ruling in Bayog, it would
have confirmed that, before the respondent filed its complaint, the property had long
been brought under Operation Land Transfer and that the Register of Deeds had issued
to all the petitioners their respective transfer certificates of title based on the
Emancipation Patents issued by the President of the Philippines, through the DAR.
However, the MTCC rendered judgment against the petitioners and ordered their
eviction on the following findings:

Firstly, they asseverate that they had been giving the original landowner Lorenzo Zayco
(but the owner was Celso Zayco) his shares of the produce from 191970 (sic) to 1981
and that in 1982-83, they had been paying the lease rentals to the new landowner
Julieta C. Salgado. Obviously, defendants predicate their tenurial rights on their
perceived landowner Lorenzo Zayco (sic) and that therefore, the new landowner Julieta
C. Salgado has assumed her liabilities to them as her alleged tenants. On this point,
there is not a shred of evidence proving that either Lorenzo Zayco or Julieta C. Salgado
had ever received their respective shares of the harvests.

Secondly, how was Celso Zayco (not Lorenzo Zayco, as erroneously claimed by
defendants) able to mortgage Lot No. 343 with the Pacific Banking Corporation (PBC),
despite this alleged tenancy relationship between him and the defendants? Equally
baffling to the Court is this undisputed fact: although the Emancipation Patents (EPs) in
the names of the seven (7) defendants were issued on July 1, 1988; yet, those were,
respectively, registered on plaintiff's title only on March 21, 1990, July 12, 1990 and
August 24, 1990.

Thirdly, of the other thirteen (13) defendants, plaintiff's Exhibit "A" clearly shows that
they had not been cultivating personally the portions occupied by them or with the help
of the immediate members of their families; but that they had been leasing such
portions to several persons.40

The MTCC even ignored the receipts appended by the petitioners to their position paper
showing that the landowner and/or Julieta C. Salgado received their share of the
produce of the landholding as "rental" of the petitioners.

The validity and efficacy of the Emancipation Patents were not negated by the Register
of Deeds' delay in the annotation thereof at the dorsal portion of TCT No. 133298. As
certified by the Register of Deeds, the failure to make the annotations in the following
patents earlier were inadvertent:

ENTRY NO. EP NAME OF FARMERS LOT NO. AREA/SQ.M.

EP-1716 343-9 Pacifico P. Talibutab 8,735
EP-1717 343-15 Felix S. Ortega 8,106
EP-1718 343-22 Roberto D. Peduhan 7,779
EP-1719 343-25 Arturo T. Villarena 8,346
EP-1720 343-19 Vicente C. Onlayao 7,709
EP-1722 343-11 Antonio E. Ballentos 9,066
EP-1723 343-29 Cesar C. Aral 8,485
EP-1724 343-18 Manuel P. Caniendo 10,110
EP-1725 343-24 Salvador G. Mirano 8,215
EP-1740 343-8 Salustiano P. Billeran 23,391
EP-1751 343-16 Federico L. Orlano 10,453
EP-1754 343-14 Rogelio U. Semellano 7,668
EP-1813 343-23 Tarcelo S. Mirano 7,92041

It must be underscored that the said patents were already annotated at the dorsal
portion of TCT No. 133298 long before the respondent filed its complaint with the MTCC
against the petitioners.

The MTCC also took into account and gave emphasis to Resolution No. 96-39 approved
by the Sangguniang Bayan on February 14, 1996, thus:

At this point, it bears stressing that in its Comprehensive Land Use Plan (CLUP), per
Resolution No. 96-39 dated February 14, 1996, the then Sangguniang Bayan of
Kabankalan, Negros Occidental, now a component city under R.A. No. 8297, had
reclassified Lot No. 343 into light industrial, commercial and residential areas. To the
mind of the Court, this reclassification falls squarely within the ambit of Title VI, B.2.b
of Administrative Order No. 07, Series of 1997 dated October 29, 1997 on the subject:
"Omnibus Rules and Procedures Governing Conversion of Agricultural Lands to Non-
Agricultural Uses." This provision is as follows:

B. General Guidelines

1. x x x x x x x x x.

2. x x x x x x x x x.

a) x x x x x x x x.

b) Conversion may be allowed if at the time of the application, the lands are reclassified
as commercial, industrial, residential or other non-agricultural in the new or revised
town plans promulgated by the Local Government Unit (LGU) and approved by the
Housing and Land Use Regulatory Board (HLURB) or by the Sangguniang Panglalawigan
(SP) after June 15, 1988 in accordance with Section 20 of R.A. No. 7160, as
implemented by M.C. No. 54, and Executive Order No. 72, Series of 1993 of the Office
of the President.42

The ruling of the MTCC is erroneous. Under Section 65 of Rep. Act No. 6657 which took
effect on June 15, 1988, agricultural lands may be reclassified only by the DAR after the
lapse of five (5) years from its award to the farmers-beneficiaries:

Section 65. Conversion of Lands. - After the lapse of five (5) years from its award,
when the land ceases to be economically feasible and sound for agricultural purposes,
or the locality has become urbanized and the land will have greater economic value for
residential, commercial or industrial purposes, the DAR, upon application of the
beneficiary or the landowner, with due notice to the affected parties, and subject to
existing laws, may authorize the reclassification of conversion of the land and its
disposition: Provided, That the beneficiary shall have fully paid his obligation.

In this case, there is no showing that the DAR ever approved the reclassification of the
property. It appears that the reclassification of the landholding was unilaterally made
by the Sangguniang Bayan despite the issuance to the petitioners of Emancipation
Patents and transfer certificates of title in their names over the portions of the
landholdings respectively occupied by them.

The petitioners appended to their petition in the RTC a Certification of the Register of
Deeds indicating that thirteen (13) of the petitioners were issued transfer certificates of
title based on the Emancipation Patents filed with said office, made of record in the
Primary Entry Book on September 16, 20, and 22, 1998; and an LBP certificate stating
that eighteen (18) of the petitioners had made advance payments for the portions of
the landholding occupied by them. And yet, the RTC dismissed the petition and affirmed
the ruling of the MTCC that it had jurisdiction over the subject matter of the complaint.

It is evident from the face of the complaint and the pleadings of the parties and the
appendages thereof that the issue of possession of the subject property was
inextricably interwoven with the issue of whether the Emancipation Patents issued by
the DAR to the petitioners were valid. Under the DAR Rules of Procedure, the DARAB
has primary and exclusive original jurisdiction over cases involving the issuance and
cancellation of Emancipation Patents. Moreover, the respondent claimed possession
over the property based on TCT No. 133298, which had already been partially cancelled
by the Emancipation Patents and Torrens titles issued to the petitioners.

On the third issue, we reject the contention of the respondent that the decision of the
MTCC had become final and executory because of the petitioners' failure to perfect the
appeal therefrom; hence, immutable. Neither do we agree with the respondent's
contention that by participating in the proceedings before the MTCC, the petitioners
were estopped from assailing the jurisdiction of the MTCC. As we held in Arevalo v.
Benedicto:43

[F]urthermore, the want of jurisdiction by a court over the subject-matter renders its
judgment void and a mere nullity, and considering that a void judgment is in legal
effect no judgment, by which no rights are divested, from which no rights can be
obtained, which neither binds nor bars any one, and under which all acts performed and
all claims flowing out of are void, and considering further, that the decision, for want of
jurisdiction of the court, is not a decision in contemplation of law, and, hence, can
never become executory, it follows that such a void judgment cannot constitute a bar
to another case by reason of res judicata.

Our ruling in Abbain v. Chua44 is also instructive:

In varying language, this Court has expressed its reprobation for judgments rendered
by a court without jurisdiction. Such a judgment is held to be "a dead limb on the
judicial tree, which should be lopped off or wholly disregarded as the circumstances
require." In the language of Mr. Justice Street: "Where a judgment or judicial order is
void in this sense it maybe said to be a lawless thing, which can be treated as an
outlaw and slain at sight, or ignored wherever and whenever it exhibits its head." And
in Gomez v. Concepcion, this Court quoted with approval the following from Freeman
on Judgments: "A void judgment is in legal effect no judgment. By it no rights are
divested. From it no rights can be obtained. Being worthless in itself, all proceedings
found upon it are equally worthless. It neither binds nor bars any one. All acts
performed under it and all claims flowing out of it are void. The parties attempting to
enforce it may be responsible as trespassers. The purchaser at a sale by virtue of its
authority finds himself without title and without redress."

Since the judgment here on its face is void ab initio, the limited periods for relief from
judgment in Rule 38 are inapplicable. That judgment is vulnerable to attack "in any way
and at any time, even when no appeal has been taken."

It is settled that jurisdiction over the judgment cannot be changed by agreement of the
parties or by the act or omission of each of them that will contravene the legislative
will. A party should not be allowed to divest a competent court of its jurisdiction,
whether erroneously or even deliberately in derogation of the law.45

In this case, the counsel of the petitioners opted to assail in a direct action the decision
of the MTCC, instead of perfecting their appeal or assailing the decision of the MTCC
disallowing their appeal. The petitioners believed that the decision of the MTCC was null
and void for want of jurisdiction over the subject matter of the action filed therein;
hence, they are not proscribed from assailing such decision in a direct action. The
remedy resorted to by their counsel should not prejudice and bar them from assailing
the MTCC decision before the RTC on a petition to annul the same for lack of
jurisdiction. Neither are they estopped from assailing the decision, simply because they
filed their answer and motion to dismiss the complaint on the ground of lack of
jurisdiction over the subject matter of the action. After all, the only relief prayed for by
them in their answer was the dismissal of the complaint. A propos is our ruling in
Calimlim v. Ramirez:46

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 v. 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.)

It bears stressing that the petitioners are now the registered owners of the portions of
the landholding and entitled to the possession thereof. For us to deny the petition and
affirm the decision of the RTC would be to sanction the eviction of the petitioners who
are the registered owners of the landholding and, as such, are entitled to the
possession thereof and allow the respondent to take possession thereof in derogation of
law. Not too long ago in Calimlim v. Ramirez47 we held that:

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.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The decisions of the

Municipal Trial Court in Cities and the Regional Trial Court are SET ASIDE and
declared NULL and VOID. The writ of execution issued by the MTCC is also set aside.
No costs.

SO ORDERED.

Puno*, Austria-Martinez, Tinga, and Chico-Nazario **, JJ., concur.

Endnotes:

*
 No part.

**
 On leave.

1
 Penned by Acting Presiding Judge Jose Y. Aguirre, Jr.; Annex "A," Rollo, pp. 31-38.

2
 Annex "B," Id. at 39.

3
 Records, p. 161.
4
Id. at 162.

5
 Annexes "Q" to "JJ," Rollo, pp. 135-173.

6
 Records, p. 158.

7
Id. at 153-154.

8
 Rollo, pp. 54-55.

9
 Records, p. 40-45.

10
Id. at 18-19.

11
 Rollo, pp. 71-72.

12
 Records, pp. 62-65.

13
 Records, p. 29.

14
 Annexes "K" to "HH," Id. at 31-58.

15
 Annexes "AAA-1," Id. at 59.

16
Id. at 59.

17
Id. at 66.

18
Id. at 96.

19
 Rollo, pp. 31-39.

20
 SECTION 2. Modes of appeal. - The appeal to the Court of Appeals in cases decided
by the Regional Trial Court in the exercise of its original jurisdiction shall be taken by
filing a notice of appeal with the court which rendered the judgment or final order
appealed from and serving a copy thereof upon the adverse party. No record on appeal
shall be required except in special appeals where the law or these Rules so require. In
such cases, the record on appeal shall be filed and served in like manner.

21
 (c) Appeal by certiorari. - In all cases where only questions of law are raised or
involved, the appeal shall be to the Supreme Court by Petition for Review
on  Certiorari  in accordance with Rule 45.

22
 258 SCRA 651 (1996).

23
Id. at 658.

24
Centeno v. Centeno, 343 SCRA 153 (2000).
25
 367 SCRA 17 (2001).

26
Cruz v. Torres, 316 SCRA 193 (1999).

27
 317 SCRA 327 (1999).

28
Boleyley v. Villanueva, 314 SCRA 364 (1999).

29
 280 SCRA 20 (1997).

30
Onquit v. Binamira-Parcia, 297 SCRA 354 (1998).

31
Ibid.

32
Cervantes v. Court of Appeals, supra; citing Isidro v. Court of Appeals, 228 SCRA 503
(1993).

33
 258 SCRA 378 (1998).

34
 42 SCRA 89 (1971).

35
 119 SCRA 222 (1982).

36
 Records, p. 164.

37
Daez v. Court of Appeals, 325 SCRA 856 (2000).

38
Roxas & Co., Inc. v. Court of Appeals, 321 SCRA 106 (1999); DAR Memo dated
September 5, 1976 provides the Operating Procedures for the issuance of an
Emancipation Patent; Administrative Order No. 3 revised by Administrative Order No. 9
governs voluntary offer to sell transactions; Administrative Order No. 12 governs the
Compulsory Acquisition of Agricultural Lands.

39
 Supra at note 33.

40
 Records, pp. 17-18.

41
Id. at 59.

42
Id. at 18.

43
 58 SCRA 186 (1974).

44
 22 SCRA 748 (1968).

45
Zamora v. Court of Appeals, 183 SCRA 279 (1990).

46
 118 SCRA 399 (1982).
47
Ibid.