Petition for review on certiorari of the order dated August 15, 1984 of the then Intermediate Appellate Court dismissing petitioners' appeal and the two (2) subsequent orders dated September 14, 1984 and October 17, 1984 denying their motions for reconsideration.

Sometime in 1970, petitioner spouses Dionisio and Teresita Sinuhin filed an action for ejectment against private respondents Patricio and Teodoro Estanislao with the Municipal Court of Pila, Laguna.^[1] Similarly, petitioner Gavina Dona filed an ejectment case against Reynaldo Estanislao and the other private respondents Paterno and Angeles Estanislao before the same court.^[2] Disputed were certain portions of land located along the shores of Laguna de Bay.

Private respondents filed their answers and subsequently moved for the outright dismissal of the two (2) unlawful detainer cases for lack of jurisdiction.  They claimed that the parcels of land they were occupying formed part of the seashore along Laguna de Bay and therefore belonged to the patrimony of the State.^[3] In its order of January 22, 1971, the inferior court denied the motion to dismiss.^[4]

Apparently, the two cases were consolidated by the inferior court.  After trial, it rendered a joint decision dated December 2, 1973 ordering private respondents to vacate the premises, remove the duck sheds and other structures they had built on the lands in question and to pay rentals to petitioners from February, 1970 until they would have finally vacated said premises.^[5]

Private respondents appealed to the then Court of First Instance of Laguna.  With their eventual filing of the much-delayed supersedeas bond, the immediate execution of the judgment under appeal was stayed.

Citing private respondents' claim that a cadastral team report indicated that the lands in dispute were actually part of the public domain and therefore did not belong to petitioners, the trial court issued an order on October 18, 1976 which stated in part:

"Now on the question of ownership it is the view of this Court that it has become inextricably linked to this issue of alleged illegal detainer by the defendants.  It becomes necessary to determine this issue of ownership in order to ascertain whether or not the defendants may continue in possession of the premises in question despite their refusal to pay the plaintiffs the agreed rentals in view of their belief, brought about by the information given to them by government men, that the lands they are occupying are public lands and do not belong to the plaintiffs.  In other words, the right of the defendants to remain in possession of the premises in question without the obligation to pay rentals to the plaintiffs cannot be decided without first settling the issue of ownership of the plaintiffs.

"This would therefore take this case out of the jurisdiction of the court a quo.  However, Sec. 11 of Rule 40 of the New Rules of Court provides that while the Court of First Instance should dismiss such a case if brought before it on appeal, it may instead try the case on the merits in the exercise of its original jurisdiction if the parties therein file their pleadings and go to trial without objection to such jurisdiction.  This rule which, according to the Supreme Court x x x is of ancient respectability, has earned judicial acceptance ever since.  x x x

"Both the plaintiffs-appellees and the defendants-appellants have filed their respective memoranda without objecting to the jurisdiction of this Court.  So this Court, in the exercise of its original jurisdiction, will now proceed to resolve this issue of whether or not the plaintiffs are owners of the premises occupied by each of the defendants and therefore entitled to recover their possession because of the refusal of the defendants to pay the rentals they had earlier agreed to pay to plaintiffs.

"To resolve this issue, however, there is need for a trial de novo because the evidence submitted by the parties in the Municipal Court, although recorded, cannot be considered by this Court now as it is resolving this case under its original jurisdiction and not by virtue of its appellate jurisdiction.  Moreover, the proceedings in the lower court are deemed null and void for they were made in a proceeding wherein the said court of origin had no jurisdiction.

"WHEREFORE, premises considered, the decision of the Municipal Court of Pila in Civil Cases No. 93 and 94 are hereby set aside and vacated and these two cases are hereby set for trial de novo before this Court as though these cases were brought on appeal prior to the approval of Rep. Act No. 6031 on August 4, 1969."^[6]

Said order did not sit well with private respondents who promptly moved for the dismissal of the two cases^[7] on the ground that the Laguna trial court had no judicial authority to try the cases de novo.^[8] This was denied by the lower court on June 10, 1977.^[9] But in a later order, dated December 6, 1977, the court relented, though somewhat vaguely, on its stand and allowed the parties to submit simultaneous memoranda "to show whether pursuant to said Section 11 of Rule 40 the parties herein did file pleadings and proceeded to trial without objection to said jurisdiction so that th(e) Court may try these cases on the merits."^[10]

This particular question was never resolved.  On June 8, 1983, the aforesaid cases were ordered dismissed "for lack of interest." This was the trial court's instantaneous reaction to the non-appearance of both parties when the two cases were called for hearing on said date.^[11] Petitioners moved for a reconsideration of the dismissal order.  Upon denial by the lower court of said motion for reconsideration, petitioners appealed from the order of dismissal and filed a notice of appeal with the then Intermediate Appellate Court.

On August 15, 1984, the Appellate Court dismissed petitioners' appeal and held that the proper course of action taken in these cases should have been a petition for review under Section 22 (b) of the Interim Rules and Guidelines and not an ordinary appeal under Rule 41 of the Rules.  Thus:

"Considering the report of the Judicial Records Division which reads as follows:

'The cases emanated from the MTC then Municipal Court of Pila (Joint Decision).  Defendants on both cases appealed (Joint Motion of Appeal) to the Regional Trial Court, then Court of First Instance of Laguna.  RTC ordered the dismissal of both cases on the ground for (sic) lack of interest.

'Plaintiffs appealed the order of dismissal on both cases to this Court for review under the provision of Rule 41 of the Rules of Court.  (ordinary appeal).

'The cases fall under provisions of Republic Act 6031, Sec. 22 (b) Title E of the Interim Rules & Guidelines promulgated by the Supreme Court on January 11, 1982.'

"the Court RESOLVED to dismiss the appeal in this case.  Under Chapter Il, Sec. 22, Batas Pambansa Blg. 129, The Judiciary Reorganization Act of 1980, which re-stated in Sec. 22 (b) of the Interim Rules & Guidelines, Rules of Court, promulgated by the Supreme Court on January 11, 1983, petition for review, not ordinary appeal under Rule 41 Rules of Court, the proper course of action to be taken in cases of this nature."^[12]

On August 29, 1984, petitioners filed a motion for reconsideration praying that they be allowed to file a petition for review pursuant to the said resolution.  This was rejected by respondent Appellate Court in its resolution of September 4, 1984 because the period to file said pleading has already lapsed and the decision to be reviewed has become final and executory.

Petitioners filed a second motion for reconsideration on October 14, 1984, pointing out that the report of the Judicial Records Division of the Appellate Court was "erroneous" consider­ing the fact that the two ejectment cases were tried by the lower court "in the exercise of its original jurisdiction." This motion was however denied by respondent Court in its resolution of September 14, 1984.  A second motion for reconsideration met the same fate on October 17, 1984.  Hence the instant petition for review which raises the sole issue of whether the appeal by petitioners was proper.

Petitioners contend that it was error in law for the respondent Appellate Court to rule that the proper mode of review in the two cases at bar was to file with it a petition for review and not an ordinary appeal under Rule 41 of the Rules of Court.  They stressed that although the ejectment cases emanated from the municipal court and appealed to the then Court of First Instance, the latter court (later the Regional Trial Court) tried the cases de novo in the exercise of its original jurisdiction because it considered the municipal court as devoid of jurisdiction since the cases involved the question of ownership of Laguna Lake shorelands.  The Court of First Instance, therefore, in its order of October 18, 1976 set aside and vacated the joint decision and proceeded to hear the cases as though they were originally brought before it.

On the other hand, private respondents maintain that the Appellate Court was legally right in dismissing the appeal.  They argue that decisions of the courts of first instance on appeal in cases triable exclusively by courts inferior to them are final in all cases, pursuant to Republic Act No. 6031 and the subsequent rules on the matter, regardless of whether the decisions affirm, reverse or modify the inferior courts.  Republic Act No. 6031 does not allow an appeal by record on appeal but by petition for review.

To properly resolve the issue presented in the instant petition, let us go back to the proceedings held in the Laguna trial court.

In assuming original jurisdiction over the two ejectment cases brought on appeal, the trial court followed the procedure in Section 11, Rule 40 of the Rules of Court which states:

"Sec. 11.  Lack of jurisdiction.  - A case tried by an inferior court without jurisdiction over the subject matter shall be dismissed on appeal by the Court of First Instance.  But instead of dismissing the case, the Court of First Instance in the exercise of its original jurisdiction, may try the case on the merits if the parties therein file their pleadings and go to the trial without any objection to such jurisdiction."

While the lower Court did err in not summarily dismissing the appeal at the early stage of the proceedings on account of the adversary posture taken by private respondents, that error was rectified by the subsequent actions of private respondents when they submitted pleadings, cross-examined witnesses and sought postponements which clearly indicated their acceptance of the court's exercise of original jurisdiction.  To be sure, the trial court sidetracked the question of original jurisdiction and instead continued with the proceedings and heard evidence on the issue of ownership of the Laguna foreshore lands.  The trial, which dragged for almost ten years, was marked by innumerable postponements and a succession of judges.  Nothing was definitively resolved until the June 8, 1983 dismissal order which brought an entirely new dimension to the case at bar.

When the lower court issued the unqualified order of dismissal, albeit on a technicality (for lack of interest), it was no different in effects and consequences from a dismissal on the merits and operated as a final disposition of the case from which an appeal would lie.^[13]

There are two modes by which cases decided by the then Court of First Instance in their original jurisdiction may be reviewed:  (a) by ordinary appeal either to the Supreme Court or to the Court of Appeals, and (b) by appeal on certiorari directly to the Supreme Court on sole error or question of law.^[14]

Rule 20 of the Interim Rules provides:

"Rule 20.  Procedure for taking appeal.  - An appeal from the metropolitan trial courts, municipal trial courts or municipal circuit trial courts to the regional trial courts, and from the regional trial courts to the Intermediate Appellate Court in actions or proceedings originally filed in the former shall be taken by filing a notice of appeal with the court that rendered the judgment or order appealed from." (Underscoring supplied).

Thus, in the light of the indubitable fact that the trial court proceeded to hear the erstwhile unlawful detainer cases under its original jurisdiction, then review by ordinary appeal was the proper recourse for the aggrieved parties and the Appellate Court erred in dismissing petitioners' appeal.

Indeed, the Court feels that the Appellate Court acted precipitately in outrightly rejecting petitioners' appeal.  As long as the steps formally required for the perfection of an appeal have been taken within the prescribed period, the better policy is to give due course to the appeal without prejudice to requiring the appellants to file the proper petition, as the case may be.^[15] The stringent stance assumed by respondent court has needlessly prolonged the procedural impasse in the disposition of an otherwise simple case.

WHEREFORE, in view of the foregoing, the assailed orders of the then Intermediate Appellate Court, now Court of Appeals, dated August 15, 1984, September 14, 1984 and October 17, 1984 are hereby SET ASIDE.  The Court of Appeals is directed to accept the appeal interposed by petitioners from the order of dismissal dated June 8, 1984 of the Regional Trial Court of Sta. Cruz, Laguna, Branch 27, and to proceed in its disposition with deliberate dispatch.  This decision is immediately executory.

So ordered.

Gutierrez, Jr., Bidin, and Cortes, JJ., concur.
Feliciano, J., on leave.

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^[1] Civil Case No. 93.

^[2] Civil Case No. 94.

^[3] Civil Case No. SC-2661, Original Record, p. 26.

^[4] Ibid, p. 31.

^[5] Ibid, p. 116.

^[6] Ibid, pp. 242-244.

^[7] Then denominated as Civil Cases Nos. SC-1261 and 1262.

^[8] Ibid, p. 249.

^[9] lbid,p. 266.

^[10] Ibid, pp. 283-284.

^[11] Ibid, p. 370.

^[12] Rollo, Annex A, p. 12.

^[13] See General Offset Press, Inc. vs. Anatolio, No. L-20468, July 26, 1966, 17 SCRA 688, 691.

^[14] Realty Sales Enterprise, Inc. vs. Intermediate Appellate Court, G.R. No. 67451, September 28, 1987, 154 SCRA 328.

^[15] See People v. Resuello, No. L-30165, August 22, 1969, 29 SCRA 35, 37.