1191. Zulueta v. Marinano.

gr 29360(1982)
Facts: Petitioner Zulueta, owner of a house and lot, entered into a Contract to Sell for the said property
with private respondent, a movie director. The said property cost P75,000 payable in 20years with
respondent buyer assuming to pay a down payment of P5,000 and a monthly installment of P630 payable
in advance before the 5th day of the corresponding month, starting with December,1964.One of their
stipulations was that upon failure of the buyer to fulfill any of the conditions being stipulated, the
buyer automatically and irrevocably authorizes owner to recover extra-judicially, physical
possession of the land, building and other improvements, which were the subject of the said contract, and
to take possession also extra-judicially whatever personal properties may be found within the aforesaid
premises from the date of said failure to answer for whatever unfulfilled monetary obligations buyer may
have with owner. Demand was also waived. On the allegation that private respondent failed to comply
with the monthly amortizations stipulated in the contract, despite demands to pay and to vacate the
premises, and that thereby the contract was converted into one of lease, petitioner commenced an
Ejectment suit against respondent before the Municipal Court of Pasig, praying that judgment be rendered
ordering respondent to 1)vacate the premises; 2) pay petitioner the sum of P11, 751.30 representing
respondents balance owing as of May, 1966; 3) pay petitioner the sum of P630 every month after May,
1966, and costs. Private respondent contended that the Municipal Court had no jurisdiction over the
nature of the action as it involved the interpretation and/or rescission of the contract.
Issue: Was the action before the Municipal Court essentially one for rescission or annulment of acontract?
Ruling: Yes. According to the Supreme Court, ...proof of violation is a condition precedent tore solution
or rescission. It is only when the violation has been established that the contract can be declared resolved
or rescinded. Upon such rescission in turn, hinges a pronouncement that possession of the
realty has become unlawful. The Supreme Court, in Nera vs. Vacante (3 SCRA 505), also said, A
violation by a party of any of the stipulations of a contract on agreement to sell real property would entitle
the other party to resolved or rescind it. Also, according to the book of Tolentino, Civil Code of the Phil.,
Vol. IV, 1962 ed. P. 168,citing Magdalena Estate vs. Myrick, 71 Phil. 344 (1941), extra-judicial rescission
has legal effect when the parties does not oppose it. If it is objected to, judicial determination of the issue
is still necessary.
With regards to the jurisdictions of inferior courts, the Supreme Court said that the CFIcorrectly ruled that
the Municipal Court had no jurisdiction over the case and correctly dismissed theappeal. However, the
CFI erred in assuming original jurisdiction, in the face of the objectioninterposed by petitioner. Section
11, Rule 40, leaves no room for doubt on this point.Section 11 of Rule 40:
Section 11. Lack of jurisdiction. A case tried by an inferior court without jurisdictionover the
subject matter shall be dismissed on appeal by the Court of First Instance. But instead ofdismissing the
case, the Court of First Instance may try the case on the merits, if the parties thereinfile their pleadings
and go to trial without any objection to such jurisdiction.