• This case clarifies the correct mode of appeal for a case that was wrongly filed in a Municipal Trial Court (MTC), decided on the merits, and then appealed to the Regional Trial Court (RTC), which then tried the case anew under its own jurisdiction. The Supreme Court ruled that a decision rendered by the RTC in such a scenario is still considered an exercise of its *appellate jurisdiction*. Therefore, the subsequent appeal to the Court of Appeals (CA) must be a Petition for Review under Rule 42, not an ordinary appeal under Rule 41. Filing the wrong mode of appeal is a fatal error.

• The Property Sale: Reynaldo San Pedro sold a property to the Spouses Trinidad through a Deed of Absolute Sale (DOAS).
• Forcible Entry Case: Despite the sale, Reynaldo remained in possession and later allegedly re-entered the property by force, strategy, and stealth. The Spouses Trinidad filed a forcible entry case against him in the MTC.
• Reynaldo's Defense: Reynaldo claimed he never gave up possession and that the real transaction was a loan, not a sale.

• MTC Ruling: The MTC dismissed the forcible entry case, finding that the Spouses Trinidad failed to prove their prior physical possession.
• RTC Ruling: On appeal, the RTC determined the MTC actually had no jurisdiction. Citing Rule 40, Section 8, the RTC did not dismiss the case but instead treated it as an *accion publiciana* (a plenary action to recover possession) and tried it on the merits "as if originally filed with it." The RTC ruled in favor of the Spouses Trinidad and ordered Reynaldo to vacate.
• CA Ruling: Reynaldo appealed the RTC decision to the CA by filing a Notice of Appeal. The CA dismissed his appeal outright for being the wrong mode of review, stating it should have been a Petition for Review under Rule 42.

• Was the RTC decision rendered in the exercise of its original or appellate jurisdiction?
• Was the CA correct in dismissing the appeal for being the wrong mode of review?

The Supreme Court denied the petition and affirmed the CA's dismissal of the appeal.

• RTC Acted in its Appellate Jurisdiction: The Court clarified that even when the RTC tries a case on the merits under Rule 40, Section 8, it is still acting in its *appellate capacity*. The case reached the RTC via appeal from the MTC, and that determines the nature of its jurisdiction. The phrase "as if the case was originally filed with it" is merely a procedural directive to avoid dismissal and re-filing, not a change in the nature of the jurisdiction being exercised.
• Wrong Mode of Appeal is Fatal: Since the RTC decision was rendered in its appellate capacity, the correct mode of appeal to the CA was a Petition for Review under Rule 42. Reynaldo's filing of a Notice of Appeal under Rule 41 was a fatal procedural error. The CA was correct in dismissing the appeal, which caused the RTC decision to become final.

• Rule 40, Section 8 (Rules of Court): When an MTC tries a case on the merits without jurisdiction, the RTC on appeal shall not dismiss it but shall decide the case as if it were originally filed with it. This is a procedural tool for efficiency.
• Appellate vs. Original Jurisdiction: A decision by the RTC on a case appealed from the MTC is rendered in the exercise of its appellate jurisdiction, regardless of whether it tried the case anew.
• Mode of Appeal (Rule 41 vs. Rule 42): An appeal from an RTC decision in its *original* jurisdiction goes to the CA via an ordinary appeal (Notice of Appeal under Rule 41). An appeal from an RTC decision in its *appellate* jurisdiction goes to the CA via a Petition for Review under Rule 42.