Primary Holding

The Petition for Review is granted; the Court of Appeals' Decision and Resolution are set aside; the action for forcible entry is deemed to have prescribed, and the Municipal Trial Court in Cities had no jurisdiction over the case.

Background

Citi Appliance, owner of a land in Cebu City, discovered underground telephone lines, cables, and manholes installed by PLDT while excavating for a parking lot for its planned commercial building. These installations were preventing Citi Appliance from fully utilizing its property. Citi Appliance sought to have PLDT remove these installations or pay for parking exemption fees, leading to a forcible entry case when PLDT refused.

Facts

• 1. Citi Appliance owned a land in Cebu City since 1992.
• 2. PLDT installed underground telephone lines, cables, and manholes on the property sometime in 1983.
• 3. In 2003, Citi Appliance decided to construct a 16-storey commercial building and needed to excavate for parking.
• 4. During excavation, Citi Appliance discovered PLDT's underground installations obstructing construction.
• 5. Citi Appliance applied for parking exemption, initially granted but later denied, requiring payment of a fee.
• 6. Citi Appliance demanded PLDT remove installations or shoulder the parking fee.
• 7. PLDT refused, claiming its installations were on public sidewalk and asserted right of eminent domain.
• 8. Citi Appliance filed a forcible entry case more than one year after discovering the installations.
• 9. Citi Appliance's title to the property was issued on December 22, 1992.

Arguments of the Petitioners

• 1. The Municipal Trial Court in Cities lacked jurisdiction because the action for forcible entry had prescribed.
• 2. The one-year prescriptive period should be reckoned from the discovery of the alleged unlawful entry in May 2003, not from the last demand to vacate in May 2004, thus the suit filed in October 2004 was beyond the prescriptive period.
• 3. Lower courts misconstrued jurisprudence regarding the reckoning of the prescriptive period for forcible entry based on stealth.
• 4. Citi Appliance did not have prior physical possession because PLDT installed the lines before Citi Appliance owned the property.
• 5. PLDT has the right of eminent domain and should be allowed to exercise it or rights as a builder in good faith under Article 448 of the Civil Code.
• 6. The lines are under the sidewalk, not on Citi Appliance's property, requiring a public survey to determine location.
• 7. The Municipal Trial Court in Cities cannot order payment of rentals or immediate ejectment.

Arguments of the Respondents

• 1. PLDT waived the issue of jurisdiction of the Municipal Trial Court in Cities by not raising it properly in its initial Answer.
• 2. Assuming jurisdiction can be raised, the lower courts correctly reckoned the prescriptive period from the last demand to vacate, making the action timely filed.
• 3. Citi Appliance has prior physical possession by virtue of its ownership and Certificate of Title.
• 4. PLDT's claims of right as builder in good faith and eminent domain were belatedly raised on appeal.
• 5. The Municipal Trial Court in Cities had jurisdiction as the case was filed within five months after the last demand to vacate.

Issues

• 1. Whether or not the issue of lack of jurisdiction was deemed waived by PLDT.
• 2. Whether or not the Municipal Trial Court in Cities had jurisdiction over the case, specifically concerning:(1) Whether prior physical possession by Citi Appliance was present. (2) Whether the one-year prescriptive period for forcible entry based on stealth should be reckoned from the discovery of unlawful entry or the last demand to vacate.
• 3. Whether or not PLDT may exercise its right of eminent domain and its rights as a builder in good faith within the forcible entry case.

Ruling

• 1. The Supreme Court ruled that the issue of jurisdiction over the subject matter is not waived by failure to raise it in the initial Answer and can be raised at any stage.
• 2. The Municipal Trial Court in Cities lacked jurisdiction because the action for forcible entry had prescribed. The prescriptive period for forcible entry based on stealth is counted from the date of discovery of the unlawful entry, not from the last demand to vacate. Citi Appliance discovered the encroachment in April 2003, and filed the suit in October 2004, exceeding the one-year period.
• 3. Citi Appliance failed to prove prior physical possession, merely alleging ownership which is insufficient for forcible entry cases that require proof of actual or material possession.
• 4. PLDT’s right to eminent domain and rights as a builder in good faith are not properly resolved within a forcible entry case, which is summary in nature and focused on possession de facto. Expropriation requires a separate action.

Doctrines

• 1. Jurisdiction over the subject matter vs. Jurisdiction over the remedy: Jurisdiction over subject matter is conferred by law and cannot be waived, while jurisdiction over remedy relates to court competence over the process and can be waived if objections are not seasonably made.
• 2. Doctrine of Estoppel by Laches (Tijam v. Sibonghanoy): Prevents a party from raising lack of jurisdiction belatedly after actively participating in the trial, especially if it causes undue prejudice to the other party. This doctrine was deemed inapplicable in this case as PLDT seasonably raised the jurisdictional issue.
• 3. Doctrine of Prior Physical Possession in Forcible Entry: Forcible entry requires the plaintiff to prove prior physical possession of the property, which was not sufficiently demonstrated by Citi Appliance based on mere ownership.
• 4. Prescriptive Period for Forcible Entry: The one-year prescriptive period for forcible entry, especially in cases of stealth, is reckoned from the date of discovery of the unlawful entry, to maintain the summary nature of ejectment proceedings.
• 5. Eminent Domain: The inherent right of the state to condemn private property for public use upon payment of just compensation; not properly litigable in a summary action for forcible entry but requires a separate expropriation proceeding.
• 6. Rights of a Builder in Good Faith (Article 448 of the Civil Code): Pertains to a person who builds on land believing they are the owner. PLDT’s claim as builder in good faith was deemed untenable as it claimed the land was public sidewalk or owned by another entity, not asserting ownership itself.
• 7. Rights of Land Ownership (Article 437 of the Civil Code): Land ownership extends to the surface and everything underneath and the airspace above it, reinforcing Citi Appliance's right over the subterranean space where PLDT's installations were placed.

Key Excerpts

• 1. "An action for forcible entry must be filed within one (1) year from the date of actual entry on the land. However, when the entry was done through stealth, the one-year time bar is reckoned from the time the entry was discovered."
• 2. "In contrast to unlawful detainer suits, no previous demand to vacate is required before an action for forcible entry may be filed."
• 3. "Possession in ejectment cases means nothing more than physical or material possession, not legal possession."
• 4. "The one-year prescriptive period is a jurisdictional requirement consistent with the summary nature of ejectment suits."

Precedents Cited

• 1. Diaz v. Spouses Punzalan: Used to define the one-year period for forcible entry and its reckoning point.
• 2. Dikit v. Ycasiano: Distinguishes between forcible entry and unlawful detainer.
• 3. Philippine Overseas Telecommunications v. Gutierrez: Lower courts relied on this, but Supreme Court distinguished it and clarified prescriptive period reckoning.
• 4. Elane v. Court of Appeals: Discussed in detail to clarify the reckoning point for prescriptive period in forcible entry by stealth and to correct misinterpretations.
• 5. Ganancial v. Atillo: Used to illustrate that prescriptive period starts from the date of illegal entry, not demand to vacate.
• 6. Vda. de Prieto v. Reyes: Analyzed to explain the confusion regarding "possession by tolerance" and rectify its erroneous application to forcible entry.
• 7. Tijam v. Sibonghanoy: Doctrine of estoppel by laches in jurisdiction.
• 8. Amoguis v. Ballado: Clarified application of Tijam doctrine, limiting it to cases with long years of litigation.
• 9. Pitargue v. Sorilla: Explained the nature of forcible entry as a summary proceeding based on actual possession.
• 10. Quizon v. Juan: Emphasized prior physical possession as an indispensable element in forcible entry.
• 11. Dela Cruz v. Spouses Hermano: Explained that proof of ownership is insufficient to prove prior physical possession in forcible entry.
• 12. Mercado v. Court of Appeals: Defined builder in good faith as possessor in concept of owner.
• 13. Republic v. Court of Appeals: Reinforced rights of landowner to everything underneath.
• 14. National Power Corporation v. Ibrahim & National Power Corporation v. Jocson: Discussed eminent domain and expropriation as requiring separate proceedings and not litigable in forcible entry cases.
• 15. Spouses Barnachea v. Court of Appeals, Spouses Ong v. Parel, Sarona v. Villegas, Canlas v. Tubil, Spouses Gonzaga v. Court of Appeals, Spouses Maninang v. Court of Appeals, Heirs of Laurora v. Sterling Technopark III, Mangaser v. Ugay, Spouses Tirona v. Alejo, Forfom Development Corporation v. Philippine National Railways, Heirs of Pidacan v. ATO, Pecson v. Court of Appeals, Bardillon v. Barangay Masili of Calamba, Laguna, Eversley Childs Sanitarium v. Spouses Barbarona, Go, Jr. v. Court of Appeals, Pajuyo v. Court of Appeals, City Mayor v. Garcia, Buenaventura v. Uy, Spouses Muñoz v. Court of Appeals, Cajayon v. Spouses Batuyong: Used to support various points regarding forcible entry, jurisdiction, prescriptive periods, and related doctrines.

Statutory and Constitutional Provisions

• 1. Rule 70, Section 1 of the Rules of Court: Governs actions for ejectment and the one-year prescriptive period.
• 2. Article 1147 of the Civil Code: Provides for the one-year prescriptive period for actions to recover possession.
• 3. Article 448 of the Civil Code: Rights of a builder in good faith.
• 4. Article 526 of the Civil Code: Definition of good faith.
• 5. Article 437 of the Civil Code: Rights of the owner of a parcel of land to surface and subsurface.
• 6. Article 438 of the Civil Code: Hidden treasure belongs to the landowner.
• 7. Article VIII, Section 5(5) of the Constitution: Powers of the Supreme Court to promulgate rules of procedure.