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No.

5794-R, respondent alleged that while she was


inside the Police Station of Natividad, Pangasinan,
and in the presence of other persons and police
1. Sante v. Claravall (February 22, 2010)
officers, petitioner Irene Sante uttered words, which
when translated in English are as follows, "How
many rounds of sex did you have last night with your
Republic of the Philippines
boss, Bert? You fuckin bitch!" Bert refers to Albert
SUPREME COURT
Gacusan, respondents friend and one (1) of her
Manila
hired personal security guards detained at the said
station and who is a suspect in the killing of
FIRST DIVISION
petitioners close relative. Petitioners also allegedly
went around Natividad, Pangasinan telling people
G.R. No. 173915
February 22, 2010
that she is protecting and cuddling the suspects in
the aforesaid killing. Thus, respondent prayed that
petitioners be held liable to pay moral damages in
IRENE SANTE AND REYNALDO
the amount of P300,000.00; P50,000.00 as
SANTE, Petitioners,
exemplary damages; P50,000.00 attorneys
vs.
HON. EDILBERTO T. CLARAVALL, in his capacity fees; P20,000.00 litigation expenses; and costs of
suit.
as Presiding Judge of Branch 60, Regional Trial
Court of Baguio City, and VITA N.
KALASHIAN, Respondents.
Petitioners filed a Motion to Dismiss5 on the ground
that it was the Municipal Trial Court in Cities (MTCC)
and not the RTC of Baguio, that had jurisdiction over
DECISION
the case. They argued that the amount of the claim
for moral damages was not more than the
VILLARAMA, JR., J.:
jurisdictional amount of P300,000.00, because the
claim for exemplary damages should be excluded in
Before this Court is a petition for certiorari1 under
computing the total claim.
Rule 65 of the 1997 Rules of Civil Procedure, as
amended, filed by petitioners Irene and Reynaldo
On June 24, 2004,6 the trial court denied the motion
Sante assailing the Decision2 dated January 31,
2006 and the Resolution3dated June 23, 2006 of the to dismiss citing our ruling in Movers-Baseco
Services, Inc. v. Cyborg Leasing
Seventeenth Division of the Court of Appeals in CA- Integrated Port
Corporation.7 The trial court held that the total claim
G.R. SP No. 87563. The assailed decision affirmed
of respondent amounted toP420,000.00 which was
the orders of the Regional Trial Court (RTC) of
above the jurisdictional amount for MTCCs outside
Baguio City, Branch 60, denying their motion to
Metro Manila. The trial court also later issued Orders
dismiss the complaint for damages filed by
on July 7, 20048 and July 19, 2004,9 respectively
respondent Vita Kalashian against them.
reiterating its denial of the motion to dismiss and
denying petitioners motion for reconsideration.
The facts, culled from the records, are as follows:

JURISDICTION:

On April 5, 2004, respondent filed before the RTC of


Baguio City a complaint for damages4 against
petitioners. In her complaint, docketed as Civil Case

Aggrieved, petitioners filed on August 2, 2004, a


Petition for Certiorari and Prohibition,10 docketed
as CA-G.R. SP No. 85465, before the Court of
Appeals. Meanwhile, on July 14, 2004, respondent

and her husband filed an Amended


Complaint11 increasing the claim for moral damages
from P300,000.00 to P1,000,000.00. Petitioners filed
a Motion to Dismiss with Answer Ad Cautelam and
Counterclaim, but the trial court denied their motion
in an Order12 dated September 17, 2004.
Hence, petitioners again filed a Petition for Certiorari
and Prohibition13 before the Court of Appeals,
docketed asCA-G.R. SP No. 87563, claiming that
the trial court committed grave abuse of discretion in
allowing the amendment of the complaint to increase
the amount of moral damages from P300,000.00
to P1,000,000.00. The case was raffled to the
Seventeenth Division of the Court of Appeals.
On January 23, 2006, the Court of Appeals, Seventh
Division, promulgated a decision in CA-G.R. SP No.
85465, as follows:
WHEREFORE, finding grave abuse of discretion on
the part of [the] Regional Trial Court of Baguio,
Branch 60, in rendering the assailed Orders dated
June 24, 2004 and July [19], 2004 in Civil Case No.
5794-R the instant petition for certiorari is
GRANTED. The assailed Orders are hereby
ANNULLED and SET ASIDE. Civil Case No. 5794-R
for damages is ordered DISMISSED for lack of
jurisdiction.
SO ORDERED.14
The Court of Appeals held that the case clearly falls
under the jurisdiction of the MTCC as the allegations
show that plaintiff was seeking to recover moral
damages in the amount of P300,000.00, which
amount was well within the jurisdictional amount of
the MTCC. The Court of Appeals added that the
totality of claim rule used for determining which court
had jurisdiction could not be applied to the instant
case because plaintiffs claim for exemplary
damages was not a separate and distinct cause of
action from her claim of moral damages, but merely

incidental to it. Thus, the prayer for exemplary


damages should be excluded in computing the total
amount of the claim.

WHETHER OR NOT THERE WAS GRAVE ABUSE


OF DISCRETION ON THE PART OF THE
HONORABLE RESPONDENT JUDGE OF THE
REGIONAL TRIAL COURT OF BAGUIO BRANCH
60 FOR ALLOWING THE COMPLAINANT TO
AMEND THE COMPLAINT (INCREASING THE
AMOUNT OF DAMAGES TO 1,000,000.00 TO
CONFER JURISDICTION OVER THE SUBJECT
MATTER OF THE CASE DESPITE THE
PENDENCY OF A PETITION FOR CERTIORARI
FILED AT THE COURT OF APPEALS, SEVENTH
DIVISION, DOCKETED AS CA G.R. NO. 85465.15

On January 31, 2006, the Court of Appeals, this time


in CA-G.R. SP No. 87563, rendered a decision
affirming the September 17, 2004 Order of the RTC
denying petitioners Motion to Dismiss Ad Cautelam.
In the said decision, the appellate court held that the
total or aggregate amount demanded in the
complaint constitutes the basis of jurisdiction. The
Court of Appeals did not find merit in petitioners
posture that the claims for exemplary damages and
attorneys fees are merely incidental to the main
In essence, the basic issues for our resolution are:
cause and should not be included in the computation
of the total claim.
1) Did the RTC acquire jurisdiction over the
case? and
The Court of Appeals additionally ruled that
respondent can amend her complaint by increasing
the amount of moral damages from P300,000.00
to P1,000,000.00, on the ground that the trial court
has jurisdiction over the original complaint and
respondent is entitled to amend her complaint as a
matter of right under the Rules.
Unable to accept the decision, petitioners are now
before us raising the following issues:
I.
WHETHER OR NOT THERE WAS GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OR IN
EXCESS OF JURISDICTION ON THE PART OF
THE (FORMER) SEVENTEENTH DIVISION OF
THE HONORABLE COURT OF APPEALS WHEN IT
RESOLVED THAT THE REGIONAL TRIAL COURT
OF BAGUIO CITY BRANCH 60 HAS
JURISDICTION OVER THE SUBJECT MATTER OF
THE CASE FOR DAMAGES AMOUNTING
TO P300,000.00;
II.

2) Did the RTC commit grave abuse of


discretion in allowing the amendment of the
complaint?
Petitioners insist that the complaint falls under the
exclusive jurisdiction of the MTCC. They maintain
that the claim for moral damages, in the amount
of P300,000.00 in the original complaint, is the main
action. The exemplary damages being discretionary
should not be included in the computation of the
jurisdictional amount. And having no jurisdiction over
the subject matter of the case, the RTC acted with
grave abuse of discretion when it allowed the
amendment of the complaint to increase the claim
for moral damages in order to confer jurisdiction.
In her Comment,16 respondent averred that the
nature of her complaint is for recovery of damages.
As such, the totality of the claim for damages,
including the exemplary damages as well as the
other damages alleged and prayed in the complaint,
such as attorneys fees and litigation expenses,
should be included in determining jurisdiction. The
total claim being P420,000.00, the RTC has
jurisdiction over the complaint.

We deny the petition, which although denominated


as a petition for certiorari, we treat as a petition for
review on certiorari under Rule 45 in view of the
issues raised.
Section 19(8) of Batas Pambansa Blg. 129,17 as
amended by Republic Act No. 7691,18 states:
SEC. 19. Jurisdiction in civil cases. Regional Trial
Courts shall exercise exclusive original jurisdiction:
xxxx
(8) In all other cases in which the demand, exclusive
of interest, damages of whatever kind, attorneys
fees, litigation expenses, and costs or the value of
the property in controversy exceeds One hundred
thousand pesos (P100,000.00) or, in such other
cases in Metro Manila, where the demand, exclusive
of the abovementioned items exceeds Two hundred
thousand pesos (P200,000.00).
Section 5 of Rep. Act No. 7691 further provides:
SEC. 5. After five (5) years from the effectivity of this
Act, the jurisdictional amounts mentioned in Sec.
19(3), (4), and (8); and Sec. 33(1) of Batas
Pambansa Blg. 129 as amended by this Act, shall be
adjusted to Two hundred thousand pesos
(P200,000.00). Five (5) years thereafter, such
jurisdictional amounts shall be adjusted further to
Three hundred thousand pesos
(P300,000.00): Provided, however, That in the case
of Metro Manila, the abovementioned jurisdictional
amounts shall be adjusted after five (5) years from
the effectivity of this Act to Four hundred thousand
pesos (P400,000.00).
Relatedly, Supreme Court Circular No. 21-99 was
issued declaring that the first adjustment in
jurisdictional amount of first level courts outside of
Metro Manila from P100,000.00 to P200,000.00 took

effect on March 20, 1999. Meanwhile, the second


adjustment from P200,000.00 to P300,000.00
became effective on February 22, 2004 in
accordance with OCA Circular No. 65-2004 issued
by the Office of the Court Administrator on May 13,
2004.
Based on the foregoing, there is no question that at
the time of the filing of the complaint on April 5,
2004, the MTCCs jurisdictional amount has been
adjusted to P300,000.00.
But where damages is the main cause of action,
should the amount of moral damages prayed for in
the complaint be the sole basis for determining
which court has jurisdiction or should the total
amount of all the damages claimed regardless of
kind and nature, such as exemplary damages,
nominal damages, and attorneys fees, etc., be
used?
In this regard, Administrative Circular No. 09-9419 is
instructive:
xxxx
2. The exclusion of the term "damages of whatever
kind" in determining the jurisdictional amount under
Section 19 (8) and Section 33 (1) of B.P. Blg. 129, as
amended by R.A. No. 7691, applies to cases where
the damages are merely incidental to or a
consequence of the main cause of action. However,
in cases where the claim for damages is the main
cause of action, or one of the causes of action, the
amount of such claim shall be considered in
determining the jurisdiction of the court. (Emphasis
ours.)
In the instant case, the complaint filed in Civil Case
No. 5794-R is for the recovery of damages for the
alleged malicious acts of petitioners. The complaint
principally sought an award of moral and exemplary
damages, as well as attorneys fees and litigation

expenses, for the alleged shame and injury suffered


by respondent by reason of petitioners utterance
while they were at a police station in Pangasinan. It
is settled that jurisdiction is conferred by law based
on the facts alleged in the complaint since the latter
comprises a concise statement of the ultimate facts
constituting the plaintiffs causes of action.20 It is
clear, based on the allegations of the complaint, that
respondents main action is for damages. Hence, the
other forms of damages being claimed by
respondent, e.g., exemplary damages, attorneys
fees and litigation expenses, are not merely
incidental to or consequences of the main action but
constitute the primary relief prayed for in the
complaint.
1avvphi1

In Mendoza v. Soriano,21 it was held that in cases


where the claim for damages is the main cause of
action, or one of the causes of action, the amount of
such claim shall be considered in determining the
jurisdiction of the court. In the said case, the
respondents claim of P929,000.06 in damages
and P25,000 attorneys fees plus P500 per court
appearance was held to represent the monetary
equivalent for compensation of the alleged injury.
The Court therein held that the total amount of
monetary claims including the claims for damages
was the basis to determine the jurisdictional amount.

correct in ruling that the RTC had jurisdiction over


the case.
Lastly, we find no error, much less grave abuse of
discretion, on the part of the Court of Appeals in
affirming the RTCs order allowing the amendment of
the original complaint from P300,000.00
to P1,000,000.00 despite the pendency of a petition
for certiorari filed before the Court of Appeals. While
it is a basic jurisprudential principle that an
amendment cannot be allowed when the court has
no jurisdiction over the original complaint and the
purpose of the amendment is to confer jurisdiction
on the court,23 here, the RTC clearly had jurisdiction
over the original complaint and amendment of the
complaint was then still a matter of right.24
WHEREFORE, the petition is DENIED, for lack of
merit. The Decision and Resolution of the Court of
Appeals dated January 31, 2006 and June 23, 2006,
respectively, are AFFIRMED. The Regional Trial
Court of Baguio City, Branch 60 is DIRECTED to
continue with the trial proceedings in Civil Case No.
5794-R with deliberate dispatch.
No costs.
SO ORDERED.

Also, in Iniego v. Purganan,22 the Court has held:


The amount of damages claimed is within the
jurisdiction of the RTC, since it is the claim for all
kinds of damages that is the basis of determining the
jurisdiction of courts, whether the claims for
damages arise from the same or from different
causes of action.

2. Heirs of Bautista v. Lindo (March 10,


2014)
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION

xxxx
Considering that the total amount of damages
claimed was P420,000.00, the Court of Appeals was

G.R. No. 208232

March 10, 2014

SURVIVING HEIRS OF ALFREDO R. BAUTISTA,


namely: EPIFANIA G. BAUTISTA and ZOEY G.
BAUTISTA,Petitioners,
vs.
FRANCISCO LINDO and WELHILMINA LINDO;
and HEIRS OF FILIPINA DAQUIGAN, namely: MA.
LOURDES DAQUIGAN, IMELDA CATHERINE
DAQUIGAN, IMELDA DAQUIGAN and CORSINO
DAQUIGAN, REBECCA QUIAMCO and ANDRES
QUIAMCO, ROMULO LORICA and DELIA
LORICA, GEORGE CAJES and LAURA CAJES,
MELIDA BANEZ and FRANCISCO BANEZ,
MELANIE GOFREDO, GERV ACIO CAJES and
ISABEL CAJES, EGMEDIO SEGOVIA and
VERGINIA SEGOVIA, ELSA N. SAM, PEDRO M.
SAM and LINA SAM, SANTIAGO MENDEZ and
MINA MENDEZ, HELEN M. BURTON and
LEONARDO BURTON, JOSE JACINTO and
BIENVENIDA JACINTO, IMELDA DAQUIGAN, LEO
MA TIGA and ALICIA MATIGA, FLORENCIO
ACEDO JR., and LYLA VALERIO, Respondents.

dated May 30, 1991. Two months later, OCT No.


SO ORDERED.
(1572) P-6144 was canceled and Transfer
Certificates of Title (TCTs) were issued in favor of the Other respondents, however, filed a Motion to
vendees.
Dismiss dated February 4, 2013, alleging that the
complaint failed to state the value of the property
Three years after the sale, or on August 5, 1994,
sought to be recovered. Moreover, they asserted that
Bautista filed a complaint for repurchase against
the total selling price of all the properties is only
respondents before the RTC, Branch 32, Lupon,
sixteen thousand five hundred pesos (PhP 16,500),
Davao Oriental, docketed as Civil Case No.
and the selling price or market value of a property is
1798, anchoring his cause of action on Section 119 always higher than its assessed value. Since Batas
of Commonwealth Act No. (CA) 141, otherwise
Pambansa Blg. (BP) 129, as amended, grants
known as the "Public Land Act," which reads:
jurisdiction to the RTCs over civil actions involving
title to or possession of real property or interest
therein where the assessed value is more than PhP
SECTION 119. Every conveyance of land acquired
under the free patent or homestead provisions, when 20,000, then the RTC has no jurisdiction over the
complaint in question since the property which
proper, shall be subject to repurchase by the
applicant, his widow, or legal heirs, within a period of Bautista seeks to repurchase is below the PhP
20,000 jurisdictional ceiling.
five years from the date of the conveyance.
3

Respondents, in their Answer, raised lack of cause of RTC Ruling


action, estoppel, prescription, and laches, as
defenses.
Acting on the motion, the RTC issued the assailed
DECISION
order dismissing the complaint for lack of jurisdiction.
The trial court found that Bautista failed to allege in
Meanwhile, during the pendency of the case,
VELASCO, JR., J.:
his complaint that the value of the subject property
Bautista died and was substituted by petitioner
exceeds 20 thousand pesos. Furthermore, what was
Epifania G. Bautista (Epifania).
The Case
only stated therein was that the total and full refund
of the purchase price of the property is PhP 16,500.
Respondents Francisco and Welhilmina Lindo later
This omission was considered by the RTC as fatal to
This is a Petition for Review on Certiorari under Rule entered into a compromise agreement with
45 assailing the April 25, 2013 Order of the Regional petitioners, whereby they agreed to cede to Epifania the case considering that in real actions,
jurisdictional amount is determinative of whether it is
Trial Court (RTC) in Civil Case No. (1798)-021 as
a three thousand two hundred and thirty square
the municipal trial court or the RTC that has
well as its Order of July 3, 2013 denying
meter (3,230 sq.m.)-portion of the property as well
jurisdiction over the case.
reconsideration.
as to waive, abandon, surrender, and withdraw all
claims and counterclaims against each other. The
With respect to the belated filing of the motion, the
The Facts
compromise was approved by the RTC in its
RTC, citing Cosco Philippines Shipping, Inc. v.
Decision dated January 27, 2011, the fallo of which
Kemper Insurance Company, held that a motion to
reads:
Alfredo R. Bautista (Bautista), petitioners
dismiss for lack of jurisdiction may be filed at any
predecessor, inherited in 1983 a free-patent land
stage of the proceedings, even on appeal, and is not
located in Poblacion, Lupon, Davao Oriental and
WHEREFORE, a DECISION is hereby rendered
lost by waiver or by estoppel. The dispositive portion
covered by Original Certificate of Title (OCT) No.
based on the above-quoted Compromise Agreement of the assailed Order reads:
(1572) P-6144. A few years later, he subdivided the
and the parties are enjoined to strictly comply with
property and sold it to several vendees, herein
the terms and conditions of the same.
respondents, via a notarized deed of absolute sale
5

WHEREFORE, the complaint for Repurchase,


Consignation, with Preliminary Injunction and
Damages is hereby dismissed for lack of jurisdiction.
SO ORDERED.

of pecuniary estimation, it being founded on privity of


contract between the parties. According to
petitioners, what they seek is the enforcement of
their right to repurchase the subject property under
Section 119 of CA 141.

Respondents, for their part, maintain that since the


land is no longer devoted to agriculture, the right of
repurchase under said law can no longer be availed
Their motion for reconsideration having been denied, of, citing Santana v. Marias. Furthermore, they
petitioners now seek recourse before this Court with suggest that petitioners intend to resell the property
the following assigned errors:
for a higher profit, thus, the attempt to repurchase.
This, according to respondents, goes against the
policy and is not in keeping with the spirit of CA 141
I
which is the preservation of the land gratuitously
given to patentees by the State as a reward for their
THE PUBLIC RESPONDENT RTC ERRED IN
labor in cultivating the property. Also, the Deed of
ADMITTING THE MOTION TO DISMISS DATED
Absolute Sale presented in evidence by Bautista
FEBRUARY 4, 2013, BELATEDLY FILED BY THE
was unilaterally executed by him and was not signed
PRIVATE RESPONDENTS IN THE CASE.
by respondents. Lastly, respondents argue that
repurchase is a real action capable of pecuniary
II
estimation.
Assignment of Errors

THE PUBLIC RESPONDENT RTC ERRED IN


HOLDING THAT THE INSTANT CASE FOR
REPURCHASE IS A REAL ACTION.
8

The Issue
Stated differently, the issue for the Courts resolution
is: whether or not the RTC erred in granting the
motion for the dismissal of the case on the ground of
lack of jurisdiction over the subject matter.
Arguments
Petitioners argue that respondents belatedly filed
their Motion to Dismiss and are now estopped from
seeking the dismissal of the case, it having been
filed nine (9) years after the filing of the complaint
and after they have actively participated in the
proceedings. Additionally, they allege that an action
for repurchase is not a real action, but one incapable

Our Ruling
The petition is meritorious.
Jurisdiction of courts is granted by the Constitution
and pertinent laws.
Jurisdiction of RTCs, as may be relevant to the
instant petition, is provided in Sec. 19 of BP 129,
which reads:
Sec. 19. Jurisdiction in civil cases.Regional Trial
Courts shall exercise exclusive original jurisdiction:
1) In all civil actions in which the subject of
the litigation is incapable of pecuniary
estimation;

2) In all civil actions which involve the title


to, or possession of, real property, or any
interest therein, where the assessed value
of the property involved exceeds Twenty
thousand pesos (P20,000.00) or, for civil
actions in Metro Manila, where such value
exceeds Fifty thousand pesos (P50,000.00)
except actions for forcible entry into and
unlawful detainer of lands or buildings,
original jurisdiction over which is conferred
upon the Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit
Trial Courts.
On the other hand, jurisdiction of first level courts is
prescribed in Sec. 33 of BP 129, which provides:
Sec. 33. Jurisdiction of Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial
Courts in civil cases.Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial
Courts shall exercise:
xxxx
3) Exclusive original jurisdiction in all civil actions
which involve title to, or possession of, real property,
or any interest therein where the assessed value of
the property or interest therein does not exceed
Twenty thousand pesos (P20,000.00) or, in civil
actions in Metro Manila, where such assessed value
does not exceed Fifty thousand pesos (P50,000.00)
exclusive of interest, damages of whatever kind,
attorneys fees, litigation expenses and costs:
Provided, That in cases of land not declared for
taxation purposes, the value of such property shall
be determined by the assessed value of the adjacent
lots.
The core issue is whether the action filed by
petitioners is one involving title to or possession of
real property or any interest therein or one incapable
of pecuniary estimation.

The course of action embodied in the complaint by


the present petitioners predecessor, Alfredo R.
Bautista, is to enforce his right to repurchase the lots
he formerly owned pursuant to the right of a freepatent holder under Sec. 119 of CA 141 or the Public
Land Act.
The Court rules that the complaint to redeem a land
subject of a free patent is a civil action incapable of
pecuniary estimation.
It is a well-settled rule that jurisdiction of the court is
determined by the allegations in the complaint and
the character of the relief sought. In this regard, the
Court, in Russell v. Vestil, wrote that "in determining
whether an action is one the subject matter of which
is not capable of pecuniary estimation this Court has
adopted the criterion of first ascertaining the nature
of the principal action or remedy sought. If it is
primarily for the recovery of a sum of money, the
claim is considered capable of pecuniary estimation,
and whether jurisdiction is in the municipal courts or
in the RTCs would depend on the amount of the
claim." But where the basic issue is something other
than the right to recover a sum of money, where the
money claim is purely incidental to, or a
consequence of, the principal relief sought, this
Court has considered such actions as cases where
the subject of the litigation may not be estimated in
terms of money, and, hence, are incapable of
pecuniary estimation. These cases are cognizable
exclusively by RTCs.

4. Those for the annulment of decisions of


lower courts;

Republic Act No. 7691 amended Sec. 33 of BP 129


and gave Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts exclusive
5. Those for the rescission or reformation of original jurisdiction in all civil actions which involve
title to, or possession of, real property, or any interest
contracts;
therein where the assessed value of the property or
interest therein does not exceed twenty thousand
6. Interpretation of a contractual
pesos (PhP 20,000) or, in civil actions in Metro
stipulation.
Manila, where such assessed value does not exceed
fifty thousand pesos (PhP 50,000) exclusive of
interest, damages of whatever kind, attorneys fees,
The Court finds that the instant cause of action to
litigation expenses and costs.
redeem the land is one for specific performance.
17

13

14

The facts are clear that Bautista sold to respondents


his lots which were covered by a free patent. While
the deeds of sale do not explicitly contain the
stipulation that the sale is subject to repurchase by
the applicant within a period of five (5) years from
the date of conveyance pursuant to Sec. 119 of CA
141, still, such legal provision is deemed integrated
and made part of the deed of sale as prescribed by
law. It is basic that the law is deemed written into
every contract. Although a contract is the law
between the parties, the provisions of positive law
which regulate contracts are deemed written therein
and shall limit and govern the relations between the
parties. Thus, it is a binding prestation in favor of
Bautista which he may seek to enforce. That is
precisely what he did. He filed a complaint to enforce
his right granted by law to recover the lot subject of
free patent. Ergo, it is clear that his action is for
specific performance, or if not strictly such action,
then it is akin or analogous to one of specific
performance. Such being the case, his action for
Settled jurisprudence considers some civil actions as specific performance is incapable of pecuniary
incapable of pecuniary estimation, viz:
estimation and cognizable by the RTC.
10

11

15

16

At first blush, it appears that the action filed by


Bautista involves title to or possession of the lots he
sold to respondents. Since the total selling price is
less than PhP 20,000, then the MTC, not the RTC,
has jurisdiction over the case. This proposition is
incorrect for the re-acquisition of the lots by Bautista
or herein successors-in-interests, the present
petitioners, is but incidental to and an offshoot of the
exercise of the right by the latter to redeem said lots
pursuant to Sec. 119 of CA 141. The reconveyance
of the title to petitioners is solely dependent on the
exercise of such right to repurchase the lots in
question and is not the principal or main relief or
remedy sought. Thus, the action of petitioners is, in
reality, incapable of pecuniary estimation, and the
reconveyance of the lot is merely the outcome of the
performance of the obligation to return the property
conformably to the express provision of CA 141.

12

1. Actions for specific performance;


2. Actions for support which will require the
determination of the civil status;
3. The right to support of the plaintiff;

Even if we treat the present action as one involving


title to real property or an interest therein which falls
under the jurisdiction of the first level court under
Sec. 33 of BP 129, as the total selling price is only
PhP 16,000 way below the PhP 20,000 ceiling, still,
the postulation of respondents that MTC has
Respondents argue that Bautistas action is one
involving title to or possession of real property or any jurisdiction will not hold water. This is because
respondents have actually participated in the
interests therein and since the selling price is less
than PhP 20,000, then jurisdiction is lodged with the proceedings before the RTC and aggressively
defended their position, and by virtue of which they
MTC. They rely on Sec. 33 of BP 129.
are already barred to question the jurisdiction of the

RTC following the principle of jurisdiction by


estoppel.
In Heirs of Jose Fernando v. De Belen, it was held
that the party raising defenses to the complaint,
actively participating in the proceedings by filing
pleadings, presenting his evidence, and invoking its
authority by asking for an affirmative relief is deemed
estopped from questioning the jurisdiction of the
court.
18

Here, we note that aside from the belated filing of the


motion to dismissit having been filed nine (9)
years from the filing of the complaintrespondents
actively participated in the proceedings through the
following acts:

considering the extent of their participation in the


Appeals (CA) in CA-G.R. CV No. 86983, and the
case, they are, as they should be, considered
Resolution2 dated October 23, 2007 denying
estopped from raising lack of jurisdiction as a ground petitioner's Motion for Reconsideration.3
for the dismissal of the action.
1wphi1

WHEREFORE, premises considered, the instant


petition is hereby GRANTED. The April 25, 2013 and
July 3, 2013 Orders of the Regional Trial Court in
Civil Case No. (1798)-021 are hereby REVERSED
and SET ASIDE.
The Regional Trial Court, Branch 32 in Lupon,
Davao Oriental is ORDERED to proceed with
dispatch in resolving Civil Case No. (1798)-021.
No pronouncement as to costs.

1. By filing their Answer and Opposition to


SO ORDERED.
the Prayer for Injunction dated September
29, 1994 whereby they even interposed
counterclaims, specifically: PhP 501,000 for 3. Padlan v. Dinglasan (March 20, 2013)
unpaid survey accounts, PhP 100,000 each
as litigation expenses, PhP 200,000 and
Republic of the Philippines
PhP 3,000 per daily appearance by way of
SUPREME COURT
attorneys fees, PhP 500,000 as moral
Manila
damages, PhP 100,000 by way of
exemplary damages, and costs of suit;
THIRD DIVISION
19

2. By participating in Pre-trial;

G.R. No. 180321

3. By moving for the postponement of their


presentation of evidence;
20

4. By presenting their witness; and


21

EDITHA PADLAN, Petitioner,


vs.
ELENITA DINGLASAN and FELICISIMO
DINGLASAN, Respondents.

5. By submitting the compromise


agreement for approval.

DECISION

22

Having fully participated in all stages of the case,


and even invoking the RTCs authority by asking for
affirmative reliefs, respondents can no longer assail
the jurisdiction of the said trial court. Simply put,

March 20, 2013

PERALTA, J.:
This is a petition for review on certiorari assailing the
Decision1 dated June 29, 2007 of the Court of

The factual and procedural antecedents are as


follows:
Elenita Dinglasan (Elenita) was the registered owner
of a parcel of land designated as Lot No. 625 of the
Limay Cadastre which is covered by Transfer
Certificate of Title (TCT) No. T-105602, with an
aggregate area of 82,972 square meters. While on
board a jeepney, Elenitas mother, Lilia Baluyot
(Lilia), had a conversation with one Maura Passion
(Maura) regarding the sale of the said property.
Believing that Maura was a real estate agent, Lilia
borrowed the owners copy of the TCT from Elenita
and gave it to Maura. Maura then subdivided the
property into several lots from Lot No. 625-A to Lot
No. 625-O, under the name of Elenita and her
husband Felicisimo Dinglasan (Felicisimo).
Through a falsified deed of sale bearing the forged
signature of Elenita and her husband Felicisimo,
Maura was able to sell the lots to different buyers.
On April 26, 1990, Maura sold Lot No. 625-K to one
Lorna Ong (Lorna), who later caused the issuance of
TCT No. 134932 for the subject property under her
name. A few months later, or sometime in August
1990, Lorna sold the lot to petitioner Editha Padlan
for P4,000.00. Thus, TCT No. 134932 was cancelled
and TCT No. 137466 was issued in the name of
petitioner.
After learning what had happened, respondents
demanded petitioner to surrender possession of Lot
No. 625-K, but the latter refused. Respondents were
then forced to file a case before the Regional Trial
Court (RTC) of Balanga, Bataan for the Cancellation
of Transfer Certificate of Title No. 137466, docketed
as Civil Case No. 438-ML. Summons was,
thereafter, served to petitioner through her mother,
Anita Padlan.

On December 13, 1999, respondents moved to


declare petitioner in default and prayed that they be
allowed to present evidence ex parte.4

1, 2005 of the Regional Trial Court, Third Judicial


Region, Branch 4, Mariveles, Bataan (Stationed in
Balanga, Bataan) in Civil Case No. 438-ML is hereby
REVERSED and SET ASIDE.

present in the case. It reasoned that when the RTC


denied petitioners motion to dismiss the case for
lack of jurisdiction, petitioner neither moved for a
reconsideration of the order nor did she avail of any
remedy provided by the Rules. Instead, she kept
The Transfer Certificate of Title No. 134932 issued in silent and only became interested in the case again
when the CA rendered a decision adverse to her
the name of Lorna Ong and Transfer Certificate of
claim.
Title No. 137466 issued in the name of defendantappellee Editha Padlan are CANCELLED and
Transfer Certificate of Title No. 134785 in the name
Hence, the petition assigning the following errors:
of the plaintiffs-appellants is REVIVED.

On January 17, 2000, petitioner, through counsel,


filed an Opposition to Declare Defendant in Default
with Motion to Dismiss Case for Lack of Jurisdiction
Over the Person of Defendant.5 Petitioner claimed
that the court did not acquire jurisdiction over her,
because the summons was not validly served upon
her person, but only by means of substituted service
through her mother. Petitioner maintained that she
has long been residing in Japan after she married a SO ORDERED.9
Japanese national and only comes to the Philippines
for a brief vacation once every two years.
The CA found that petitioner purchased the property
in bad faith from Lorna. The CA opined that although
On April 5, 2001, Charlie Padlan, the brother of
a purchaser is not expected to go beyond the title,
petitioner, testified that his sister is still in Japan and based on the circumstances surrounding the sale,
submitted a copy of petitioners passport and an
petitioner should have conducted further inquiry
envelope of a letter that was allegedly sent by his
before buying the disputed property. The fact that
sister. Nevertheless, on April 5, 2001, the RTC
Lorna bought a 5,000-square-meter property for
6
issued an Order denying petitioners motion to
only P4,000.00 and selling it after four months for the
dismiss and declared her in default. Thereafter, trial
same amount should have put petitioner on guard.
ensued.
With the submission of the Judgment in Criminal
Case No. 4326 rendered by the RTC, Branch 2,
On July 1, 2005, the RTC rendered a
Balanga, Bataan, entitled People of the Philippines v.
Decision7 finding petitioner to be a buyer in good
Maura Passion10 and the testimonies of respondents,
faith and, consequently, dismissed the complaint.
the CA concluded that respondents sufficiently
established that TCT No. 134932 issued in the name
of Lorna and TCT No. 137466 issued in the name of
Not satisfied, respondents sought recourse before
petitioner were fraudulently issued and, therefore,
the CA, docketed as CA-G.R. No. CV No. 86983.
null and void.
On June 29, 2007, the CA rendered a Decision8 in
favor of the respondent. Consequently, the CA
reversed and set aside the Decision of the RTC and
ordered the cancellation of the TCT issued in the
name of Lorna and the petitioner, and the revival of
respondents own title, to wit:

Aggrieved, petitioner filed a Motion for


Reconsideration. Petitioner argued that not only did
the complaint lacks merit, the lower court failed to
acquire jurisdiction over the subject matter of the
case and the person of the petitioner.

WHEREFORE, in view of the foregoing, the Decision On October11 23, 2007, the CA issued a
Resolution denying the motion. The CA concluded
dated July
that the rationale for the exception made in the
landmark case of Tijam v. Sibonghanoy12 was

I
WHETHER OR NOT THE HONORABLE COURT
HAS JURISDICTION OVER THE PERSON OF THE
PETITIONER.
II
WHETHER OR NOT THE HONORABLE COURT
HAS JURISDICTION OVER THE SUBJECT
MATTER OF THE CASE.
III
WHETHER OR NOT PETITIONER IS A BUYER IN
GOOD FAITH AND FOR VALUE. 13
Petitioner maintains that the case of Tijam v.
Sibonghanoy finds no application in the case at bar,
since the said case is not on all fours with the
present case. Unlike in Tijam, wherein the petitioner
therein actively participated in the proceedings,
petitioner herein asserts that she did not participate
in any proceedings before the RTC because she was
declared in default.
Petitioner insists that summons was not validly
served upon her, considering that at the time
summons was served, she was residing in Japan.
Petitioner contends that pursuant to Section 15, Rule
14 of the Rules of Civil Procedure, when the

defendant does not reside in the Philippines and the Sec. 19. Jurisdiction in civil cases. Regional Trial
subject of the action is property within the Philippines Courts shall exercise exclusive original jurisdiction:
of the defendant, service may be effected out of the
Philippines by personal service or by publication in a
(1) In all civil actions in which the subject of
newspaper of general circulation. In this case,
the litigation is incapable of pecuniary
summons was served only by substituted service to
estimation;
her mother. Hence, the court did not acquire
jurisdiction over her person.
(2) In all civil actions which involve the title
to, or possession of, real property, or any
Also, petitioner posits that the court lacks jurisdiction
interest therein, where the assessed value
of the subject matter, considering that from the
of the property involved exceeds Twenty
complaint, it can be inferred that the value of the
Thousand Pesos (P20,000.00) or for civil
property was only P4,000.00, which was the amount
actions in Metro Manila, where such value
alleged by respondents that the property was sold to
exceeds Fifty Thousand Pesos
petitioner by Lorna.
(P50,000.00), except actions for forcible
entry into and unlawful detainer of lands or
Finally, petitioner stresses that she was a buyer in
buildings, original jurisdiction over which is
good faith. It was Maura who defrauded the
conferred upon the Metropolitan Trial
respondents by selling the property to Lorna without
Courts, Municipal Trial Courts, and
their authority.
Municipal Circuit Trial Courts; x x x
Respondents, on the other hand, argue that the CA
was correct in ruling in their favor.
The petition is meritorious.
Respondents filed the complaint in 1999, at the time
Batas Pambansa Blg. (BP) 129, the Judiciary
Reorganization Act of 1980, was already amended
by Republic Act (RA) No. 7691, An Act Expanding
the Jurisdiction of the Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial
Courts, amending for the purpose BP Blg. 129.14

Section 1. Section 19 of Batas Pambansa Blg. 129,


otherwise known as the "Judiciary Reorganization
Act of 1980," is hereby amended to read as follows:

Respondents filed their Complaint with the RTC;


hence, before proceeding any further with any other
issues raised by the petitioner, it is essential to
ascertain whether the RTC has jurisdiction over the
subject matter of this case based on the abovequoted provisions.

However, in order to determine which court has


jurisdiction over the action, an examination of the
complaint is essential. Basic as a hornbook principle
is that jurisdiction over the subject matter of a case is
conferred by law and determined by the allegations
in the complaint which comprise a concise statement
of the ultimate facts constituting the plaintiff's cause
of action. The nature of an action, as well as which
Section 3 of RA 7691 expanded the exclusive
court or body has jurisdiction over it, is determined
original jurisdiction of the first level courts, thus:
based on the allegations contained in the complaint
of the plaintiff, irrespective of whether or not the
Section 3. Section 33 of the same law BP Blg. 129 is plaintiff is entitled to recover upon all or some of the
hereby amended to read as follows:
claims asserted therein. The averments in the
complaint and the character of the relief sought are
the ones to be consulted. Once vested by the
Sec. 33. Jurisdiction of Metropolitan Trial Courts,
allegations in the complaint, jurisdiction also remains
Municipal Trial Courts and Municipal Circuit Trial
vested irrespective of whether or not the plaintiff is
Courts in Civil Cases. Metropolitan Trial Courts,
entitled to recover upon all or some of the claims
Municipal Trial Courts, and Municipal Circuit Trial
asserted therein.15
Courts shall exercise:
xxxx

Section 1 of RA 7691, amending BP Blg. 129,


provides that the RTC shall exercise exclusive
original jurisdiction on the following actions:

exclusive of interest, damages of whatever kind,


attorney's fees, litigation expenses and costs:
Provided, That in cases of land not declared for
taxation purposes, the value of such property shall
be determined by the assessed value of the adjacent
lots.

What determines the jurisdiction of the court is the


nature of the action pleaded as appearing from the
allegations in the complaint. The averments therein
and the character of the relief sought are the ones to
be consulted.16

(3) Exclusive original jurisdiction in all civil actions


which involve title to, or possession of, real property,
or any interest therein where the assessed value of
the property or interest therein does not exceed
Respondents Complaint17 narrates that they are the
Twenty Thousand Pesos (P20,000.00) or, in civil
actions in Metro Manila, where such assessed value duly registered owners of Lot No. 625 of the Limay
does not exceed Fifty Thousand Pesos (P50,000.00) Cadastre which was covered by TCT No. T-105602.

Without their knowledge and consent, the land was


divided into several lots under their names through
the fraudulent manipulations of Maura. One of the
lots was Lot 625-K, which was covered by TCT No.
134785. On April 26, 1990, Maura sold the subject
lot to Lorna. By virtue of the fictitious sale, TCT No.
134785 was cancelled and TCT No. 134932 was
issued in the name of Lorna. Sometime in August
1990, Lorna sold the lot to petitioner for a
consideration in the amount of P4,000.00. TCT No.
134932 was later cancelled and TCT No. 137466
was issued in the name of petitioner. Despite
demands from the respondents, petitioner refused to
surrender possession of the subject property.
Respondents were thus constrained to engage the
services of a lawyer and incur expenses for litigation.
Respondents prayed for the RTC (a) to declare TCT
No. 137466 null and to revive TCT No. T-105602
which was originally issued and registered in the
name of the respondents; and (b) to order petitioner
to pay attorneys fees in the sum of P50,000.00 and
litigation expenses ofP20,000.00, plus cost of suit.18

From the Complaint, the case filed by respondent is


not simply a case for the cancellation of a particular
certificate of title and the revival of another. The
determination of such issue merely follows after a
court of competent jurisdiction shall have first
resolved the matter of who between the conflicting
parties is the lawful owner of the subject property
and ultimately entitled to its possession and
enjoyment. The action is, therefore, about
ascertaining which of these parties is the lawful
owner of the subject lot, jurisdiction over which is
determined by the assessed value of such lot.20

In no uncertain terms, the Court has already held


that a complaint must allege the assessed value of
the real property subject of the complaint or the
interest thereon to determine which court has
jurisdiction over the action.21 In the case at bar, the
only basis of valuation of the subject property is the
value alleged in the complaint that the lot was sold
by Lorna to petitioner in the amount of P4,000.00.
No tax declaration was even presented that would
show the valuation of the subject property. In fact, in
An action "involving title to real property" means that one of the hearings, respondents counsel informed
the plaintiff's cause of action is based on a claim that the court that they will present the tax declaration of
he owns such property or that he has the legal rights the property in the next hearing since they have not
to have exclusive control, possession, enjoyment, or yet obtained a copy from the Provincial Assessors
disposition of the same. Title is the "legal link
Office.22 However, they did not present such copy.
between (1) a person who owns property and (2) the
property itself." "Title" is different from a "certificate of To reiterate, where the ultimate objective of the
title" which is the document of ownership under the
plaintiffs is to obtain title to real property, it should be
Torrens system of registration issued by the
filed in the proper court having jurisdiction over the
government through the Register of Deeds. While
assessed value of the property subject
title is the claim, right or interest in real property, a
thereof.23 Since the amount alleged in the Complaint
certificate of title is the evidence of such claim.19
by respondents for the disputed lot is
In the present controversy, before the relief prayed
for by the respondents in their complaint can be
granted, the issue of who between the two
contending parties has the valid title to the subject lot
must first be determined before a determination of
who between them is legally entitled to the certificate
of title covering the property in question.
1wphi1

only P4,000.00, the MTC and not the RTC has


jurisdiction over the action. Therefore, all
proceedings in the RTC are null and void.24
Consequently, the remaining issues raised by
petitioner need not be discussed further.

WHEREFORE, the petition is GRANTED. The


Decision of the Court of Appeals in CA-G.R. CV No.
86983, dated June 29, 2007, and its Resolution
dated October 23, 2007, are REVERSED and SET
ASIDE. The Decision of the Regional Trial Court,
dated July I, 2005, is declared NULL and VOID. The
complaint in Civil Case No. 438-ML is dismissed
without prejudice.
SO ORDERED.

4. Genesis Investment v. Heirs of Ebarasabal


(November 20, 2013)
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 181622

November 20, 2013

GENESIS INVESTMENT, INC., CEBU JAYA


REALTY INC., and SPOUSES RHODORA and
LAMBERT LIM,Petitioners,
vs.
HEIRS of CEFERINO EBARASABAL,* NAMELY:
ROGELIO EBARASABAL, SPOUSES LIGAYA E.
GULIMLIM AND JOSE GULIMLIM, SPOUSES
VISITACION E. CONEJOS and ELIAS CONEJOS,
BEN TEJERO, POCAS TEJERO, GERTRUDES
TEJERO, BANING HAYO, LACIO EBARASABAL
and JULIETA EBARASABAL; HEIRS OF FLORO
EBARASABAL, namely: SOFIA ABELONG,
PEPITO EBARASABAL AND ELPIDIO
EBARASABAL; HEIRS OF LEONA
EBARASABAL- APOLLO, namely: SILVESTRA A.
MOJELLO and MARCELINO APOLLO; HEIRS OF
PEDRO EBARASABAL, namely: BONIFACIO
EBARASABAL, SERGIO EBARASABAL and
JAIME EBARASABAL; HEIRS of ISIDRO
EBARASABAL, NAMELY: SPOUSES CARLOSA E.

NUEVO and FORTUNATO NUEVA;** HEIRS of


BENITO EBARASABAL, namely: PAULO
BAGAAN, SPOUSES CATALINA A. MARIBAO and
RENE MARIBAO, VICENTE ABRINICA and
PATRON EBARASABAL; HEIRS of JULIAN
EBARASABAL, NAMELY: ALFREDO BAGAAN,
JUAN BAGAAN, AVELINO BAGAAN, FERDINAND
BAGAAN, MAURO BAGAAN, SPOUSES
ROWENA B. LASACA and FRANCISCO
LACASA,*** SPOUSES MARIA B. CABAG and
EMILIO CABAG and ESTELITA BAGAAN, all
being represented herein by VICTOR MOJELLO,
FEDERICO BAGAAN and PAULINO
EBARASABAL, as their Attorneys-inFact, Respondents.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari
under Rule 45 of the Rules of Court seeking to
reverse and set aside the Decision and
Resolution, dated July 11, 2007 and January 10,
2008, respectively, of the Court of Appeals (CA) in
CA-G.R. CEB-SP No. 01017.
1

only P11,990.00), the action falls within the


jurisdiction of the Municipal Trial Court (MTC).

In its Order dated September 29, 2004, the RTC


granted petitioners' Motion to Dismiss, holding as
follows:
6

xxxx

relief prayed for by the movants is for the declaration


of nullity or annulment of documents which
unquestionably is incapable of pecuniary estimation
and thus within the exclusive original jurisdiction of
this court to try although in the process of resolving
the controversy, claims of title or possession of the
property in question is involved which together with
all the other remaining reliefs prayed for are but
purely incidental to or as a consequence of the
foregoing principal relief sought.
10

And while the prayer of the plaintiffs for the


annulment of documents qualified the case as one
incapable of pecuniary estimation thus, rendering it
cognizable supposedly by the second level courts
but considering that Republic Act No. 7691 expressly
provides to cover "all civil actions" which phrase
understandably is to include those incapable of
pecuniary estimation, like the case at bar, this Court
is of the view that said law really finds application
here more so that the same case also "involves title
to, or possession of, real property, or any interest
therein." For being so, the assessed value of the real
property involved is determinative of which court has
jurisdiction over the case. And the plaintiffs admitting
that the assessed value of the litigated area is less
thanP20,000.00, the defendants are correct in
arguing that the case is beyond this Court's
jurisdiction.

Petitioners filed a Motion for Reconsideration, but


the RTC denied it in its Order dated June 23, 2005.
11

Aggrieved, petitioners filed a petition for certiorari


with the CA. However, the CA dismissed the petition
via its assailed Decision dated July 11, 2007, holding
that the subject matter of respondents' complaint is
incapable of pecuniary estimation and, therefore,
within the jurisdiction of the RTC, considering that
the main purpose in filing the action is to declare null
and void the documents assailed therein.
12

Petitioners' Motion for Reconsideration was,


subsequently, denied in the CA Resolution dated
January 10, 2008.

The antecedents of the case are as follows:


On November 12, 2003, herein respondents filed
against herein petitioners a Complaint for
Declaration of Nullity of Documents, Recovery of
Shares, Partition, Damages and Attorney's Fees.
The Complaint was filed with the Regional Trial
Court (RTC) of Barili, Cebu.
3

On August 5, 2004, herein petitioners filed a Motion


to Dismiss contending, among others, that the RTC
has no jurisdiction to try the case on the ground that,
as the case involves title to or possession of real
property or any interest therein and since the
assessed value of the subject property does not
exceed P20,000.00 (the same being
4

Respondents filed a Motion for Partial


Reconsideration, arguing that their complaint
consists of several causes of action, including one
for annulment of documents, which is incapable of
pecuniary estimation and, as such, falls within the
jurisdiction of the RTC.

Hence, the instant petition for review on certiorari


raising the sole issue, to wit:

On March 17, 2005, the RTC issued an Order


granting respondents' Motion for Partial
Reconsideration and reversing its earlier Order
dated September 29, 2004. The RTC ruled, thus:

Whether or not the Honorable Court of Appeals


gravely erred in concluding that the Regional Trial
Court, Branch 60 of Barili, Cebu has jurisdiction over
the instant case when the ALLEGATIONS IN THE
COMPLAINT clearly shows that the main cause of
action of the respondents is for the Recovery of their
Title, Interest, and Share over a Parcel of Land,
which has an assessed value of P11,990.00 and
thus, within the jurisdiction of the Municipal Trial
Court.
13

On the issue of want of jurisdiction, this court


likewise finds to be with merit the contention of the
movants as indeed the main case or the primary

The petition lacks merit.

For a clearer understanding of the case, this Court,


Florentino, Erlinda, Sebastian, Cirilo, all surnamed
like the CA, finds it proper to quote pertinent portions Ebarsabal, have executed among themselves a
of respondents' Complaint, to wit:
Deed of Extrajudicial Settlement with Sale of Roman
Ebarsabal's entire property described above, by
virtue of which they allegedly extrajudicially settled
xxxx
the same and, for P2,600,000.00 although only the
sum of P950,000.00 was reflected in their Deed of
1. Plaintiffs are all Filipino, of legal age, surviving
Sale for reason only known to them, they sold the
descendants either as grandchildren or great
whole property to defendants Genesis Investment
grandchildren and heirs and successors-in-interest Inc. represented by co-defendant Rhodora B. Lim,
of deceased Roman Ebarsabal, who died on 07
the wife of Lambert Lim, without the knowledge,
September 1952 x x x
permission and consent of the plaintiffs who are the
vendors' co-owners of the lot in question, x x x.
xxxx
11. Surprisingly, however, the defendant Genesis
managed to have the Tax Declaration of the property
8. During the lifetime of Roman Ebarsabal, he
issued in the name of co-defendant Cebu Jaya
acquired a parcel of land situated in Basdaku,
Realty Incorporated, a firm which, as already
Saavedra, Moalboal, Cebu, x x x.
intimated above, is also owned by Spouses Lambert
and Rhodora B. Lim, instead of in the name of
xxxx
Genesis Investment, Incorporated, which is actually
the vendee firm of the lot in question.
with a total assessed value of P2,890.00 x x x.
However, for the year 2002, the property was
xxxx
already having (sic) a total assessed value
of P11,990.00 x x x.
Hence, the reason why Cebu Jaya Realty,
Incorporated is joined and impleaded herein as a co9. Upon the death of said Roman Ebarsabal, his
eight (8) children named in par. 7 above, became co- defendant.
owners of his above-described property by
hereditary succession; taking peaceful possession
and enjoyment of the same in fee simple pro
indiviso, paying the real estate taxes thereon and did
not partition the said property among themselves
until all of them likewise died, leaving, however, their
respective children and descendants and/or
surviving heirs and successors-in-interest, and who
are now the above-named plaintiffs herein;
10. The plaintiffs who are mostly residents in (sic)
Mindanao and Manila, have just recently uncovered
the fact that on 28th January 1997, the children and
descendants of deceased Gil Ebarsabal, namely:
Pelagio, Hipolito, Precela, Fructuosa, Roberta,

12. Without the participation of the plaintiffs who are


co-owners of the lot in question in the proceedings,
the aforementioned extrajudicial settlement with sale
cannot be binding upon the plaintiff-co-owners.
13. Further, where as in this case, the other heirs
who are the plaintiffs herein, did not consent to the
sale of their ideal shares in the inherited property,
the sale was only to be limited to the pro indiviso
share of the selling heirs.
xxxx

14. By representation, the plaintiffs, are therefore, by


law, entitled to their rightful shares from the estate of
the deceased Roman Ebarsabal consisting of seven
(7) shares that would have been due as the shares
of seven (7) other children of Roman Ebarsabal who
are also now deceased, namely: Ceferino, Floro,
Leona, Pedro, Isidoro, Julian and Benito, all
surnamed Ebarsabal.
15. The defendants who had prior knowledge of the
existence of the other heirs who are co-owners of
the vendors of the property they purchased, had
unlawfully acted in bad faith in insisting to buy the
whole property in co-ownership, only from the heirs
and successors-in-interest of deceased Gil
Ebarsabal, who is only one (1) of the eight (8)
children of deceased Roman Ebarsabal, and without
notifying thereof in whatever manner the plaintiffs
who are the heirs and successors-in-interest of the
other co-owners of the property-in-question; thus,
have compelled the plaintiffs herein to file this instant
case in court to protect their interests, x x x.
xxxx
PRAYER
WHEREFORE, in view of all the foregoing, it is most
respectfully prayed of this Honorable Court that, after
due notice and hearing, judgment shall be rendered
in favor of the plaintiffs, as follows, to wit:
1 Declaring as null and void and not binding upon
the plaintiffs, the following documents to wit:
(a) Deed of Extrajudicial Settlement with
Sale executed by and between the heirs of
deceased Gil Ebarsabal headed by Pedro
Ebarsabal, and Genesis Investment, Inc.,
represented by Rhodora Lim, dated 28th of
January, 1997, marked as Annex-A;

(b) Memorandum of Agreement executed


between Pedro Ebarsabal and Genesis
Investment, Inc., represented by Rhodora
Lim dated 27 January, which document is
notarized;
(c) Tax Declaration of Real Property issued
to Cebu Jaya Realty, Inc., marked as
Annex-D;
2 Ordering the defendants to make partition of the
property in litigation with the plaintiffs into eight (8)
equal shares; to get one (1) share thereof, which is
the only extent of what they allegedly acquired by
purchase as mentioned above, and to transfer,
restore or reconvey and deliver to the plaintiffs,
seven (7) shares thereof, as pertaining to and due
for the latter as the heirs and successors-in-interest
of the seven (7) brothers and sister of deceased Gil
Ebarsabal already named earlier in this complaint;

Complaint with the RTC, respondents sought to


recover ownership and possession of their shares in
the disputed parcel of land by questioning the due
execution and validity of the Deed of Extrajudicial
Settlement with Sale as well as the Memorandum of
Agreement entered into by and between some of
their co-heirs and herein petitioners. Aside from
praying that the RTC render judgment declaring as
null and void the said Deed of Extrajudicial
Settlement with Sale and Memorandum of
Agreement, respondents likewise sought the
following: (1) nullification of the Tax Declarations
subsequently issued in the name of petitioner Cebu
Jaya Realty, Inc.; (2) partition of the property in
litigation; (3) reconveyance of their respective
shares; and (3) payment of moral and exemplary
damages, as well as attorney's fees, plus
appearance fees.
1wphi1

and are cognizable by courts of first instance [now


Regional Trial Courts].
17

This rule was reiterated in Russell v. Vestil and


Social Security System v. Atlantic Gulf and Pacific
Company of Manila Inc.
18

19

Contrary to petitioners contention, the principal relief


sought by petitioners is the nullification of the subject
Extrajudicial Settlement with Sale entered into by
and between some of their co-heirs and
respondents, insofar as their individual shares in the
subject property are concerned. Thus, the recovery
of their undivided shares or interest over the
disputed lot, which were included in the sale, simply
becomes a necessary consequence if the above
deed is nullified. Hence, since the principal action
sought in respondents Complaint is something other
than the recovery of a sum of money, the action is
incapable of pecuniary estimation and, thus,
cognizable by the RTC. Well entrenched is the rule
that jurisdiction over the subject matter of a case is
conferred by law and is determined by the
allegations in the complaint and the character of the
relief sought, irrespective of whether the party is
entitled to all or some of the claims asserted.

Clearly, this is a case of joinder of causes of action


which comprehends more than the issue of partition
of or recovery of shares or interest over the real
xxxx
property in question but includes an action for
declaration of nullity of contracts and documents
Further reliefs and remedies just and equitable in the which is incapable of pecuniary estimation.
premises are also herein prayed for.
As cited by the CA, this Court, in the case of Singson
v. Isabela Sawmill, held that:
xxxx
Moreover, it is provided under Section 5 (c), Rule 2
of the Rules of Court that where the causes of action
In determining whether an action is one the subject
are between the same parties but pertain to different
It is true that one of the causes of action of
matter of which is not capable of pecuniary
venues or jurisdictions, the joinder may be allowed in
respondents pertains to the title, possession and
estimation, this Court has adopted the criterion of
the RTC provided one of the causes of action falls
interest of each of the contending parties over the
contested property, the assessed value of which falls first ascertaining the nature of the principal action or within the jurisdiction of said court and the venue lies
remedy sought. If it is primarily for the recovery of a
therein. Thus, as shown above, respondents
within the jurisdiction of the MTC. However, a
sum of money, the claim is considered capable of
complaint clearly falls within the jurisdiction of the
complete reading of the complaint would readily
pecuniary estimation, and whether jurisdiction is in
RTC.
show that, based on the nature of the suit, the
the municipal courts or in the courts of first instance
allegations therein, and the reliefs prayed for, the
would depend on the amount of the claim. However, WHEREFORE, the petition is DENIED. The Decision
action is within the jurisdiction of the RTC.
where the basic issue is something other than the
and Resolution dated July 11, 2007 and January 10,
right to recover a sum of money, where the money
2008, respectively, of the Court of Appeals in CAAs stated above, it is clear from the records that
claim is purely incidental to, or a consequence of,
G.R. CEB-SP No. 01017 are AFFIRMED.
respondents' complaint was for "Declaration of
Nullity of Documents, Recovery of Shares, Partition, the principal relief sought, this Court has considered
such actions as cases where the subject of the
Damages and Attorney's Fees." In filing their
SO ORDERED.
litigation may not be estimated in terms of money,
20

15

21

14

16

5. Gomez v. Montalban (March 14, 2008)


Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 174414

March 14, 2008

ELMER F. GOMEZ, Petitioner,


vs.
MA. LITA A. MONTALBAN, Respondent.
DECISION
CHICO-NAZARIO, J.:
This Petition for Review on Certiorari seeks to
reverse (1) the Order1 dated 20 June 2006 of the
Regional Trial Court (RTC) of Davao City, Branch 13,
which granted herein respondent Ma. Lita A.
Montalbans Petition for Relief from Judgment and
dismissed Civil Case No. 29,717-03 for lack of
jurisdiction; and (2) the Order2 dated 2 August 2006
denying herein petitioner Elmer F. Gomezs Motion
for Reconsideration thereof .
On 30 May 2003, petitioner filed a Complaint3 with
the RTC for a sum of money, damages and payment
of attorneys fees against respondent, docketed as
Civil Case No. 29,717-03. The Complaint alleged,
among other things, that: on or about 26 August
1998, respondent obtained a loan from petitioner in
the sum of P40,000.00 with a voluntary proposal on
her part to pay 15% interest per month; upon receipt
of the proceeds of the loan, respondent issued in
favor of petitioner, as security, Capitol Bank Check
No. 0215632, postdated 26 October 1998, in the
sum of P46,000.00, covering the P40,000.00
principal loan amount and P6,000.00 interest
charges for one month; when the check became

due, respondent failed to pay the loan despite


several demands; thus, petitioner filed the Complaint
praying for the payment of P238,000.00,
representing the principal loan and interest charges,
plus 25% of the amount to be awarded as attorneys
fees, as well as the cost of suit.

against petitioner and that the RTC had no


jurisdiction as the principal amount being claimed by
petitioner was only P40,000.00, an amount falling
within the jurisdiction of the Municipal Trial Court
(MTC).
After petitioner filed his Answer7 to the Petition for
Relief from Judgment and respondent her Reply,8 the
said Petition was set for hearing.

Summons was served, but despite her receipt


thereof, respondent failed to file her Answer.
Consequently, she was declared4 in default and upon
motion, petitioner was allowed to present evidence
After several dates were set and called for hearing,
ex parte.
respondent, thru counsel, failed to appear despite
being duly notified; hence, her Petition for Relief was
After considering the evidence presented by
dismissed9 for her apparent lack of interest to pursue
5
petitioner, the RTC rendered a Decision on 4 May
the petition.
2004 in his favor, the fallo of which reads:
WHEREFORE, IN VIEW OF THE FOREGOING, the
Court hereby decides this case in favor of [herein
petitioner] and against [herein respondent], ordering
[respondent] to pay [petitioner] the following
amounts:
1. P40,000.00 representing the principal
amount of the loan;
2. P57,600.00 representing interest at the
rate of 24% per annum reckoned from
August 26, 1998 until the present; and
3. P15,000.00 representing attorneys fees.
On 28 May 2004, respondent filed a Petition for
Relief from Judgment6 alleging that there was no
effective service of summons upon her since there
was no personal service of the same. The summons
was received by one Mrs. Alicia dela Torre, who was
not authorized to receive summons or other legal
pleadings or documents on respondents behalf.
Respondent attributes her failure to file an Answer to
fraud, accident, mistake or excusable negligence.
She claimed that she had good and valid defenses

Respondent filed a Motion for Reconsideration10 of


the dismissal of her Petition for Relief, stating that
her counsels failure to appear was not intentional,
but due to human shortcomings or frailties,
constituting honest mistake or excusable negligence.
On 18 November 2005, the RTC
granted11 respondents motion for reconsideration, to
wit:
In regard to the motion for reconsideration file by
[herein respondent] of the order of the court
dismissing her petition for relief from judgment, the
court, in the interest of justice, shall give
[respondent] one more chance to present the merits
of her position in a hearing. The dismissal of the
petition is therefore reconsidered and set aside.
On 20 June 2006, the RTC granted respondents
Petition for Relief from Judgment and set aside its
Decision dated 4 May 2004 on the ground of lack of
jurisdiction. The fallo of the assailed RTC Order
reads:
WHEREFORE, the petition for relief is hereby
GRANTED. The decision of this court dated May 4,

2004 is RECONSIDERED and set aside for lack of


jurisdiction on the part of the court, without prejudice
to the case being refiled in the proper Municipal Trial
Courts.12
Petitioner filed a motion for reconsideration of the
afore-quoted Order, but the same was denied by the
RTC in another Order13 dated 2 August 2006.
Hence, the present Petition filed directly before this
Court.

certain set of facts; or when the issue does not call


Petitioners Complaint before the RTC reads:
for an examination of probative value of the evidence
presented, the truth or falsehood of facts being
3. On or about August 26, 1998, [herein
admitted. A question of fact exists when the doubt or
respondent] obtained from the [herein
difference arises as to the truth or falsehood of facts
petitioner] a loan for the principal sum of
or when the query invites calibration of the whole
FORTY THOUSAND PESOS (P40,000.00)
evidence considering mainly the credibility of
with a voluntary proposal on her part to pay
witnesses, the existence and relevancy of specific
as much as 15% interest per month.
surrounding circumstances, as well as their relation
Machine copy of Cash Voucher dated
to each other and to the whole, and the probability of
August 26, 1998 is herewith attached as
the situation.16
Annex "A".

Simple as it may seem, determining the true nature


and extent of the distinction is sometimes
complicated. In a case involving a "question of law,"
the resolution of the issue must rest solely on what
the law provides on the given set of circumstances.
1. Whether or not the Regional Trial Court
Once it is clear that the issue invites a review of the
has jurisdiction over this case for sum of
money, damages and attorneys fees where evidence presented, the question posed is one of
fact. If the query requires a re-evaluation of the
the principal amount of the obligation
credibility of witnesses, or the existence or relevance
is P40,000.00 but the amount of the
of surrounding circumstances and their relation to
demand per allegation of the complaint
each other, the issue in that query is factual.17
is P238,000.00;

In his Memorandum,14 petitioner raises the following


issues for the Courts consideration:

2. Whether or not respondents relief from


judgment is proper during the period for
filing a motion for reconsideration and
appeal.
Before the Court dwells on the principal issues, a
few procedural matters must first be resolved.

The first issue raised in the present petition is one of


jurisdiction of the court over the subject matter meaning, the nature of the cause of action and of the
relief sought. Jurisdiction is the right to act or the
power and authority to hear and determine a cause.
It is a question of law.18 The second issue refers to
the aptness of the grant of a Petition for Relief from
Judgment. These questions are undoubtedly one of
law, as they concern the correct interpretation or
application of relevant laws and rules, without the
need for review of the evidences presented before
the court a quo.

Section 2(c), Rule 41 of the Rules of Court


categorically provides that in all cases where only
questions of law are raised, the appeal from a
decision or order of the RTC shall be to the Supreme
Court by petition for review oncertiorari in
Thus, with only questions of law raised in this
accordance with Rule 45.15
Petition, direct resort to this Court is proper.19
1avvphi1

The distinction between questions of law and


questions of fact has long been settled. A question of The Court shall now discuss whether the RTC has
jurisdiction over Civil Case No. 29,717-03.
law exists when the doubt or controversy concerns
the correct application of law or jurisprudence to a

4. Upon receipt of the proceeds of the said


loan, [respondent] issued in favor of the
Plaintiff Capitol Bank Check with check nos.
0215632 postdated on October 26, 1998 for
the sum of Forty Six Thousand Pesos
(P46,000.00) as security on the loan
with P6,000.00 as the first month of interest
charges. When the check became due,
[respondent] defaulted to pay her loan
despite several allowances of time and
repeated verbal demands from the
[petitioner]. The said check was later on
dishonored for the reason: "Account
Closed". Machine copy of Capitol Bank
Check wit nos. 0215632 is herewith
attached as Annex "B".
5. On July 4, 2002, [petitioner] engaged the
services of the undersigned counsel to
collect the account of the [respondent];
thus, on the same day, a demand letter was
sent to and received by her on July 9, 2002.
And despite receipt thereof, she failed and
continues to evade the payment of her
obligations to the damage and prejudice of
the [petitioner]. Thus, as of July 4, 2002,
[respondent]s loan obligation stood at TWO
HUNDRED THIRTY EIGHT THOUSAND
PESOS (P 239,000.00), inclusive of interest
charges for 32 months. Machine copy of
Demand Letter and its registry receipt and

return card is herewith attached as Annexes already determinable at the time of filing of the
"C"; "C-1" and C-2", respectively.
Complaint, it must be included in the determination
of which court has the jurisdiction over petitioners
case. Using as basis the P238,000.00 amount being
6. In view of [respondent]s refusal to pay
claimed by petitioner from respondent for payment of
her loan, [petitioner] is constrained to
the principal loan and interest, this Court finds that it
engage the services of counsel to initiate
is well within the jurisdictional amount fixed by law
the instant action for a fee of 25% for
for RTCs. 22
whatever amounts is collected as flat
attorneys fee. [Petitioner] will likewise incur
damages in the form of docket fees.
PRAYER
WHERFORE, it is respectfully prayed of the
Honorable Court that Decision be rendered ordering
the [respondent] to pay [petitioner] as follows:
1. The amount of P238,000.00 with interest
charges at the sound discretion of the
Honorable Court starting on July 4, 2002
until paid in full;
2. The sum equivalent to 25 % of the
amount awarded as attorneys fee;
3. Cost of suit;

There can be no doubt that the RTC in this case has


jurisdiction to entertain, try, and decide the
petitioners Complaint.
To this Court, it is irrelevant that during the course of
the trial, it was proven that respondent is only liable
to petitioner for the amount of P40,000.00
representing the principal amount of the
loan; P57,000.00 as interest thereon at the rate of
24% per annum reckoned from 26 August 1998 until
the present; and P15,000.00 as attorneys fees.
Contrary to respondents contention, jurisdiction can
neither be made to depend on the amount ultimately
substantiated in the course of the trial or
proceedings nor be affected by proof showing that
the claimant is entitled to recover a sum in excess of
the jurisdictional amount fixed by law. Jurisdiction is
determined by the cause of action as alleged in the
complaint and not by the amount ultimately
substantiated and awarded.23

4. Other relief that the Honorable Court may


find just and equitable under the premises
Basic as a hornbook principle is that jurisdiction over
are likewise prayed for.20 [Emphasis ours.]
the subject matter of a case is conferred by law and
determined by the allegations in the complaint which
The Court gleans from the foregoing that petitioners comprise a concise statement of the ultimate facts
cause of action is the respondents violation of their
constituting the plaintiffs cause of action.24 The
loan agreement.21 In that loan agreement,
nature of an action, as well as which court or body
respondent expressly agreed to pay the principal
has jurisdiction over it, is determined based on the
amount of the loan, plus 15% monthly interest.
allegations contained in the complaint of the plaintiff,
Consequently, petitioner is claiming and praying for
irrespective of whether or not the plaintiff is entitled
in his Complaint the total amount ofP238,000.00,
to recover upon all or some of the claims asserted
already inclusive of the interest on the loan which
therein.25 The averments in the complaint and the
had accrued from 1998. Since the interest on the
character of the relief sought are the ones to be
loan is a primary and inseparable component of the consulted.26 Once vested by the allegations in the
cause of action, not merely incidental thereto, and
complaint, jurisdiction also remains vested

irrespective of whether or not the plaintiff is entitled


to recover upon all or some of the claims asserted
therein.27
On the propriety of the granting by the RTC of
respondents Petition for Relief from Judgment, the
Court finds and so declares that the RTC did indeed
commit an error in doing so.
First of all, a petition for relief under Rule 38 of the
Rules of Court is only available against a final and
executory judgment.28 Since respondent
allegedly29 received a copy of the Decision dated 4
May 2004 on 14 May 2004, and she filed the Petition
for Relief from Judgment on 28 May 2004, judgment
had not attained finality. The 15-day period to file a
motion for reconsideration or appeal had not yet
lapsed. Hence, resort by respondent to a petition for
relief from judgment under Rule 38 of the Rules of
Court was premature and inappropriate.
Second, based on respondents allegations in her
Petition for Relief before the RTC, she had no cause
of action for relief from judgment.
Section 1 of Rule 38 provides:
SECTION 1. Petition for relief from judgment, order,
or other proceedings. When a judgment or final
order is entered, or any other proceeding is
thereafter taken against a party in any court through
fraud, accident, mistake, or excusable negligence,
he may file a petition in such court and in the same
case praying that the judgment, order or proceeding
be set aside.
Under Section 1, Rule 38 of the Rules of Court, the
court may grant relief from judgment only "[w]hen a
judgment or final order is entered, or any other
proceeding is taken against a party in any court
through fraud, accident, mistake, or excusable
negligence x x x."

In her Petition for Relief from Judgment before the


RTC, respondent contended that judgment was
entered against her through "mistake or fraud,"
because she was not duly served with summons as
it was received by a Mrs. Alicia dela Torre who was
not authorized to receive summons or other legal
processes on her behalf.

Third, the certificate of service of the process server


of the court a quo is prima facie evidence of the facts
as set out therein.37 According to the Sheriffs Return
of Service,38 summons was issued and served on
respondent thru one Mrs. Alicia dela Torre, thus:

A petition for relief from judgment is an equitable


remedy that is allowed only in exceptional cases
where there is no other available or adequate
remedy. When a party has another remedy
available to him, which may be either a motion
for new trial or appeal from an adverse decision
of the trial court, and he was not prevented by
"THIS IS TO CERTIFY that on June 25, 2003 at
around 1:45 p.m. the undersigned sheriff caused the fraud, accident, mistake or excusable negligence
from filing such motion or taking such appeal, he
As used in Section 1, Rule 38 of the Rules of Court, service of summons issued in the above-entitled
"mistake" refers to mistake of fact, not of law, which
case together with attached complaints and annexes cannot avail himself of this petition. Indeed, relief
will not be granted to a party who seeks avoidance
relates to the case.30 The word "mistake," which
for and in behalf of defendant [respondent] thru a
grants relief from judgment, does not apply and was certain Mrs. Alicia Dela Torre inside their compound from the effects of the judgment when the loss of the
remedy at law was due to his own
never intended to apply to a judicial error which the
at the given address who acknowledged receipt by
negligence;otherwise the petition for relief can be
court might have committed in the trial. Such errors
signature and notation of said dela Torre appearing
used to revive the right to appeal which had been
31
may be corrected by means of an appeal. This does thereof.
lost thru inexcusable negligence. (Emphasis and
not exist in the case at bar, because respondent has
underscoring supplied; citations omitted)
in no wise been prevented from interposing an
Wherefore, this summons is respectfully returned to
appeal.
the Honorable Regional Trial Court, Branch 13,
In the case at bar, there being no fraud, accident,
Davao City, duly SERVED for its records and
mistake, or excusable negligence that would have
"Fraud," on the other hand, must be extrinsic or
information."
prevented petitioner from filing either a motion for
collateral, that is, the kind which prevented the
reconsideration or a petition for review on certiorari
aggrieved party from having a trial or presenting his Finally, even assuming arguendo that the RTC had
of the 4 May 2004 Decision of the RTC, her resort to
case to the court,32or was used to procure the
no jurisdiction over respondent on account of the
a Petition for Relief from Judgment was
judgment without fair submission of the
non-service upon her of the summons and
33
controversy. This is not present in the case at hand complaint, the remedy of the respondent was to file a unwarranted.
as respondent was not prevented from securing a
motion for the reconsideration of the 4 May 2004
fair trial and was given the opportunity to present her Decision by default or a motion for new trial within 15 This Court also notes that when respondent was
case.
declared in default for her failure to file an Answer to
days from receipt of notice thereof. This is also
the Complaint, she did not immediately avail herself
without prejudice to respondents right to file a
of any of the remedies provided by law. Lina v. Court
Negligence to be excusable must be one which
petition for certiorari under Rule 65 of the Rules of
41
ordinary diligence and prudence could not have
Court for the nullification of the order of default of the of Appeals enumerates the remedies available to a
party declared in default:
guarded against.34 Under Section 1, the "negligence" court a quo and the proceedings thereafter held
must be excusable and generally imputable to the
including the decision, the writ of execution, and the
party because if it is imputable to the counsel, it is
writ of garnishment issued by the RTC, on the
a) The defendant in default may, at any time
binding on the client.35 To follow a contrary rule and
ground that it acted without
after discovery thereof and before
allow a party to disown his counsels conduct would jurisdiction.39 Unfortunately, however, respondent
judgment, file a motion, under oath, to set
render proceedings indefinite, tentative, and subject opted to file a Petition for Relief from the Judgment
aside the order of default on the ground that
to reopening by the mere subterfuge of replacing
of the RTC, which, as the Court earlier determined,
his failure to answer was due to fraud,
counsel. What the aggrieved litigant should do is
was the wrong remedy.
accident, mistake or excusable negligence,
seek administrative sanctions against the erring
and that he has a meritorious defense (Sec.
counsel and not ask for the reversal of the courts
3, Rule 18 [now Sec. 3(b), Rule 9]);
40
In Tuason v. Court of Appeals, the Court explained
ruling.36
the nature of a petition for relief from judgment:

b) If the judgment has already been


rendered when the defendant discovered
the default, but before the same has
become final and executory, he may file
a motion for new trial under Section 1 (a) of
Rule 37;
c) If the defendant discovered the default
after the judgment has become final and
executory, he may file a petition for
relief under Section 2 [now Section 1] of
Rule 38; and

WHEREFORE, the instant petition is herby


GRANTED. Consequently, the Decision dated 4 May
2006 of the Regional Trial Court of Davao, Branch
13, in Civil Case No. 29,717-03 is hereby
REINSTATED and the Order dated 20 June 2006
granting the petition for relief from judgment is
hereby SET ASIDE.
SO ORDERED.

6. Tumpag v. Tumpag (September 29, 2014)


Republic of the Philippines
SUPREME COURT
Manila

d) He may also appeal from the judgment


rendered against him as contrary to the
evidence or to the law, even if no petition to
set aside the order of default has been
presented by him (Sec. 2, Rule 41).
(Emphasis added)
In addition, and as this Court earlier mentioned, a
petition for certiorari to declare the nullity of a
judgment by default is also available if the trial court
improperly declared a party in default, or even if the
trial court properly declared a party in default, if
grave abuse of discretion attended such
declaration.42
If respondent is really vigilant in protecting her rights,
she should have exhausted all the legal remedies
above-mentioned to nullify and set aside the order of
default against her, and should no longer have
waited for the judgment to be rendered. Respondent
does not deny that she did receive the summons,
although she alleges that it was not properly served
upon her, yet she chose to sit on her rights and did
not act immediately. For respondents failure to act
with prudence and diligence in protecting her rights,
she cannot now elicit this Courts sympathy.
Respondents petition for relief from judgment is
clearly without merit and should not have been
granted by the RTC.

SECOND DIVISION
G.R. No. 199133

September 29, 2014

ESPERANZA TUMPAG, substituted by her son,


PABLITO TUMPAG BELNAS, JR., Petitioner,
vs.
SAMUEL TUMPAG, Respondent.
DECISION
BRION, J.:
We resolve the petition for review on
certiorari assailing the November 30, 2010
decision and the September 28, 2011 resolution of
the Court of Appeals (CA), Cebu City in CA-G.R. CV
No. 78155. The CA dismissed, without prejudice, the
complaint for recovery of possession and damages
that the petitioner filed before the Regional Trial
Court (RTC) because the complaint failed to allege
the assessed value of the disputed property in the
case.
1

Brief Statement of Facts

On March 13, 1995, Esperanza Tumpag (petitioner)


filed a complaint for recovery of possession with
damages (docketed as Civil Case No. 666) against
Samuel Tumpag (respondent) before the RTC,
Branch 61, Kabankalan City, Negros Occidental. The
complaint alleged that:
1) Plaintiff (referring to the petitioner) is of
legal age, widow, Filipino citizen and a
resident of Barangay Tuyom, Cauayan,
Negros Occidental, while Defendant
(referring to the respondent) is also of legal
age, married, Filipino and a residentof
Barangay Tuyom, Cauayan, Negros
Occidental, where he maybe served with
summons and other processes of this
Honorable Court; 2) Plaintiff is the absolute
owner of a parcel of land, identified as Lot
No. 1880-A, Cauayan Cadastre, containing
an area of TWELVE THOUSAND NINE
HUNDRED NINETY TWO (12,992)
SQUARE METERS, more or less, situated
in Barangay Tuyom, Cauayan, Negros
Occidental, more particularly bounded and
described in Transfer Certificate of Title No.
T-70184, dated April 27, 1983, issued by
the Register of Deeds of Negros Occidental
in favor of Plaintiff, xerox copy of which is
hereto attached as ANNEX "A" and made
an integral part hereof;
3) Defendant has been occupying a portion
of not less than ONE THOUSAND (1,000)
SQUARE METERS ofthe above-described
parcel of land of the Plaintiff for more than
TEN (10) years, at the tolerance of Plaintiff;
4) Sometime in 1987, Plaintiff wanted to
recover the portion occupied by Defendant
but Defendant refused to return to Plaintiff
or vacate said portion he has occupied
inspite of repeated demands from Plaintiff.
And, to prevent Plaintiff from recovering the
portion he has occupied, Defendant

instigated his other relatives to file a case


against the herein Plaintiff, and, in1988,
herein Defendant Samuel Tumpag, together
with Luz Tagle Vda. De Tumpag and other
relatives, filed a civil case, number 400,
before this court against herein Plaintiff,
Esperanza Tumpag, for cancellation of her
title with damages;
5) Said Civil Case No. 400 was dismissed
by this Honorable Court through its
Resolution, dated October 11, 1989,
penned by the Presiding Judge, the late
Artemio L. Balinas, prompting the Plaintiffs
in said case to elevate the said resolution of
thisHonorable Court to the Court of
Appeals, and their appeal is identified as
C.A. G.R. No. CV-25699;
6) On June 28, 1991, the Court of Appeals
rendered a decision in the said appealed
case, the dispositive portion of which read:
"PREMISES CONSIDERED, the appealed
Resolution dated October 11, 1989 is
hereby AFFIRMED."
and, that the same has become final on
March 11, 1994 and was entered, on
August 26, 1994, in the Book of Entries of
Judgment, xerox copy of said Entry of
Judgment of the Court of Appeals is hereto
attached as ANNEX "B" and made part
hereof;
7) Herein Plaintiff needs the portion
occupied by Defendant and she has orally
demanded from Defendant of the return of
the same, but Defendant refused and still
refuses todo so. Hence, Plaintiff brought the
matter before the Office of the Barangay
Captain of Barangay Tuyom, Cauayan,
Negros Occidental, for conciliation, on

March 3, 1995. But, unfortunately,


Defendant refused to vacate or return the
portion he occupies to Plaintiff. Attached
hereto as ANNEX "C," and made part
hereof, is the Certification of the Barangay
Captain of Barangay Tuyom, Cauayan,
Negros Occidental, certifying that this
matter was brought to his attention for
conciliation;
8) Defendants refusal to return the portion
he occupies to Plaintiff has caused Plaintiff
to suffer actual damages in the amount of
not less than TEN THOUSAND PESOS
(P10,000.00), per annum;

xxxx
Together with his answer (which was later
amended), the respondent moved to dismiss the
complaint on the following grounds: failure to state a
cause of action; that the action was barred by prior
judgment; and lack of jurisdiction.
5

The RTC, in an order dated January 16, 1996,


denied the respondents motion to dismiss and
proceeded with pre-trial and trial.
6

During the pendency of the case, the petitioner died


and was substituted by her son Pablito Tumpag
Belnas, Jr.
7

9) Defendants unjustifiable refusal to return


the portion he occupies to Plaintiff has
caused Plaintiff to suffer mental anguish,
embarrassment, untold worries, sleepless
nights, fright and similar injuries, entitling
her to moral damages moderately assessed
at not less than FIFTY THOUSAND PESOS
(P50,000.00);
10) To serve as deterrent (sic) toother
persons similarly inclined and by way of
example for the public good, Defendant
should be made to pay exemplary damages
in the amountof not less than TWENTY
FIVE THOUSAND PESOS (P25,000.00);

In a decision dated June 3, 2002, the RTC ordered


the respondent to return possession of the subject
portion of the property to the petitioner and to pay
the petitioner P10,000.00 as actual
damages, P20,000.00 as moral damages,
and P10,000.00 as attorneys fees.
8

In his appeal to the CA, among the grounds the


respondent raised was the issue of the RTCs lack of
jurisdiction over the case.
9

In its assailed decision, the CA agreed with the


respondent and nullified the RTCs June 3, 2002
decision and all proceedings before the trial court. It
held that the petitioners failure to allege in her
11) The unjustifiable refusal of Defendant to complaint the assessed value of the disputed
property warranted the complaints dismissal,
return the property to the Plaintiff leaves
although without prejudice, because the courts
Plaintiff no other alternative but to file this
present action, forcing her to incur litigation jurisdiction over the case should be "determined by
the material allegations of the complaint" and
expenses amounting to not less than ONE
"cannot be made to depend upon the defenses set
THOUSAND PESOS (P1,000.00),
up in court or upon a motion to dismiss for,
attorneys fees in the amount of TWENTY
otherwise, the question of jurisdiction would depend
THOUSAND PESOS (P20,000.00) plus
almost entirely on the defendant." The petitioner
ONE THOUSAND PESOS (P1,000.00) for
moved to reconsider but the CA denied her motion in
every court appearance.
its resolution dated September 28, 2011. The CAs
ruling and denial of the motion for reconsideration
10

11

12

13

gave rise to the present petition for review on


certiorari filed with this Court.

Property showing that the subject property has a


market value of P51,965.00 and assessed value
of P20,790.00. The CA was fully aware ofthis
attachment but still proceeded to dismiss the
petitioners complaint:

In his comment to the present petition, the


respondent contends that the assessed value of the
property subjectof the case is actually much below
than the value stated in the attached Declaration of
The petitioner now argues that the respondent, after
Real Property. However, the test of the sufficiency of
having actively participated in all stages of the
the facts alleged in the complaint is whether,
proceedings in Civil Case No. 666, is now estopped
admitting the facts alleged, the court can render a
from assailing the RTCs jurisdiction; that the subject Record shows that the complaint was filed with the
case had been litigated before the RTC for more
Regional Trial Court on December 13, 1995. There is valid judgment upon the complaint in accordance
than seven (7) years and was pending before the CA no allegation whatsoever in the complaint for accion withthe plaintiffs prayer. The defendant, in filing a
motion to dismiss, hypothetically admits the truth of
for almost eight (8) years. Further, she argues that
publiciana concerning the assessed value of the
the dismissal of her complaint was not warranted
property involved. Attached however to the complaint the factual and material allegations in the
complaint, as well as the documents attached to a
considering that she had a meritorious case as
is a copy of the Declaration of Real Property of
complaint whose due execution and genuineness
attached to her complaint was a copy of a
subject land which was signed by the owner stating
are not denied under oath by the defendant; these
Declaration of Real Property indicating that the
that its market valueis P51,965 and its assessed
attachments mustbe considered as part of the
assessed value of the disputed property
value is P20,790.00.(Emphasis ours)
complaint without need of introducing evidence
is P20,790.00.
thereon.
Generally, the court should only look into the facts
Our Ruling
alleged in the complaint to determine whether a suit
Lastly, we note that the present petitioner's situation
is within its jurisdiction. There may be instances,
comes close with those of the respondents in
however, when a rigid application of this rule may
We find MERIT in the present petition. The CAs
Honorio Bernardo v. Heirs of Eusebio
result
in
defeating
substantial
justice
or
in
prejudice
dismissal of the petitioners complaint for recoveryof
Villegas, where the Villegas heirs, in filing their
to a partys substantial right. In Marcopper Mining
possession iserroneous and unwarranted.
Corp. v. Garcia, we allowed the RTC to consider, in complaint for accion publiciana before the RTC,
addition to the complaint, other pleadings submitted failed to allege the assessed value of the subject
property. On the complaints omission, the defendant
It is well-settled that jurisdiction over a subject matter by the parties in deciding whether or not the
questioned the RTCs jurisdiction in his answer to the
is conferred by law, not by the parties action or
complaint should be dismissed for lack of cause of
conduct, and is, likewise, determined from the
action. In Guaranteed Homes, Inc. v. Heirs of Valdez, complaint and, again, in his appeal before the CA.
allegations in the complaint. Under Batas
et al., we held that the factual allegations in a
Pambansa Blg. 129, as amended by Republic Act
complaint should be considered in tandem with the
In Bernardo v. Heirs of Villegas, we affirmed the CA
No. 7691, the jurisdiction of Regional Trial Courts
statements and inscriptions on the documents
ruling that upheld the RTCs jurisdiction over the
over civil actions involving title to, or possession of,
attached to it as annexes or integral parts.
case despite the complaints failure to allege the
real property, orany interest therein, is limited to
assessed value of the property because the
cases where the assessed value of the property
defendant-petitioner was found to have actively
In
the
present
case,
we
find
reason
not
to
strictly
involved exceeds Twenty thousand pesos
participatedin the proceedings before the trial court
apply the abovementioned general rule, and to
(P20,000.00) or, for civil actions in Metro Manila,
and was already estopped from assailing the
consider
the
facts
contained
in
the
Declaration
of
where such value exceeds Fifty thousand pesos
jurisdiction of the RTC. While we mention this case
Real Property attachedto the complaint in
(P50,000.00), except actions for forcible entry into
and its result, we cannot, however, apply the
determining whether the RTC had jurisdiction over
and unlawful detainer of lands or buildings.
principle of estoppel (on the question of
the petitioners case. A mere reference to the
attached document could faciallyresolve the question jurisdiction)to the present respondent.
Here, the petitioner filed a complaint for recovery of
on jurisdiction and would have rendered lengthy
possession of real property before the RTC but failed litigation on this point unnecessary.
We rule that the respondent is notestopped from
to allege in her complaint the propertys assessed
assailing the RTCs jurisdiction over the subject civil
value. Attached, however, to the petitioners
case. Records show that the respondent has
complaint was a copy of a Declaration of Real
consistently brought the issue of the court's lack of
24

25

26

19

27

20

28

21

22

14

15

23

16

29

17

18

1wphi1

jurisdiction in his motions, pleadings and


submissions throughout the proceedings, until the
CA dismissed the petitioner's complaint, not on the
basis of a finding of lack of jurisdiction, but due to the
insufficiency of the petitioner's complaint, i.e. failure
to allege the assessed value of the subject property.
Even in his comment filed before this Court, the
respondent maintains that the RTC has no
jurisdiction over the subject matter of the case.
Lack of jurisdiction over the subject matter of the
case can always be raised anytime, even for the first
time on appeal, since jurisdictional issues, as a rule,
cannot be acquired through a waiver or enlarged by
the omission of the parties or conferred by the
acquiescence of the court. Thus, the respondent is
not prevented from raising the question on the
court's jurisdiction in his appeal, if any, to the June 3,
2002 decision of the RTC in Civil Case No. 666.
WHEREFORE, premised considered, we GRANT
the present petition for review on certiorari and SET
ASIDE the decision dated November 30, 2010 and
resolution dated September 28, 2011 of the Court of
Appeals, Cebu City in CA-G.R. CV No. 78155.
30

31

Accordingly, we REINSTATE the decision dated


June 3, 2002 of the Regional Trial Court, Branch 61,
Kabankalan City, Negros Occidental in Civil Case
No. 666.
SO ORDERED.

DAVID LU, Petitioner,


vs.
PATERNO LU YM, SR., PATERNO LU YM, JR.,
VICTOR LU YM, JOHN LU YM, KELLY LU YM, and
LUDO & LUYM DEVELOPMENT
CORPORATION, Respondents.

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. 153690

February 15, 2011

The Court of Appeals is DIRECTED to proceed with


CA-G.R. CV No. 81163 and to resolve the same with
dispatch.

x - - - - - - - - - - - - - - - - - - - - - - -x
SO ORDERED[,]2
G.R. No. 157381
PATERNO LU YM, SR., PATERNO LU YM, JR.,
VICTOR LU YM, JOHN LU YM, KELLY LU YM, and
LUDO & LUYM DEVELOPMENT
CORPORATION, Petitioners,
vs.
DAVID LU, Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 170889
JOHN LU YM and LUDO & LUYM DEVELOPMENT
CORPORATION, Petitioners,
vs.
THE HONORABLE COURT OF APPEALS OF
CEBU CITY (FORMER TWENTIETH DIVISION),
DAVID LU, ROSA GO, SILVANO LUDO & CL
CORPORATION, Respondents.
RESOLUTION

7. Lu v. Lu Ym (February 15, 2011)

No. 170889 is DISMISSED for lack of merit.


Consequently, the Status Quo Order dated January
23, 2006 is hereby LIFTED.

CARPIO MORALES, J.:

which Decision was, on motion for reconsideration,


the Court voting 4-1,3 reversed by Resolution
of August 4, 2009, the dispositive portion of which
reads:
WHEREFORE, in view of the foregoing, the Motion
for Reconsideration filed by John Lu Ym and Ludo &
LuYm Development Corporation is GRANTED. The
Decision of this Court dated August 26, 2008 is
RECONSIDERED and SET ASIDE. The Complaint
in SRC Case No. 021-CEB, now on appeal with the
Court of Appeals in CA-G.R. CV No. 81163, is
DISMISSED.
All interlocutory matters challenged in these
consolidated petitions are DENIED for being moot
and academic.
SO ORDERED.4
David Lus Motion for Reconsideration and Motion to
Refer Resolution to the Court En Banc was denied
by minute Resolution of September 23, 2009.

Following his receipt on October 19, 2009 of the


minute Resolution, David Lu personally filed on
October 30, 2009 a Second Motion for
Reconsideration and Motion to Refer Resolution to
the Court En Banc. On even date, he filed through
WHEREFORE, premises considered, the petitions in registered mail an "Amended Second Motion for
G.R. Nos. 153690 and 157381 are DENIED for
Reconsideration and Motion to Refer Resolution to
being moot and academic; while the petition in G.R. the Court En Banc." And on November 3, 2009, he
By Decision of August 26, 2008, the
Court1 unanimously disposed of the three present
petitions as follows:

filed a "Motion for Leave to File [a] Motion for


Clarification[, and the] Second Motion for
Reconsideration and Motion to Refer Resolution to
the Court En Banc." He later also filed a
"Supplement to Second Motion for Reconsideration
with Motion to Dismiss" dated January 6, 2010.

Several incidents arising from the complaint reached


the Court through the present three petitions.

G.R. No. 170889 involved the denial by the appellate


court of Lu Ym father and sons application in CAG.R. CV No. 81163 for a writ of preliminary
injunction. By August 26, 2008 Decision, the Court
In G.R. No. 153690 wherein David, et al. assailed
dismissed the petition after finding no merit on their
the appellate courts resolutions dismissing their
argument which they raised for the first time in
complaint for its incomplete signatory in the
their motion for reconsideration before the appellate
certificate of non-forum shopping and consequently
John Lu Ym and Ludo & Luym Development
annulling the placing of the subject corporation under court of lack of jurisdiction for non-payment of the
Corporation (LLDC), meanwhile, filed with leave a
receivership pendente lite, the Court, by Decision of correct RTC docket fees.
5
Motion for the Issuance of an Entry of Judgment of
August 26, 2008, found the issue to have been
February 2, 2010, which merited an Opposition from mooted by the admission by the trial court of
As reflected early on, the Court, in a turnaround, by
David Lu.
David et al.s Amended Complaint, filed by them
Resolution of August 4, 2009, reconsidered its
pursuant to the trial courts order to conform to the
position on the matter of docket fees. It ruled that the
trial court did not acquire jurisdiction over the case
In compliance with the Courts Resolution of January requirements of the Interim Rules of Procedure
Governing
Intra-Corporate
Controversies.
for David Lu, et al.s failure to pay the correct docket
11, 2010, Kelly Lu Ym, Victor Lu Ym and Paterno Lu
fees, hence, all interlocutory matters and incidents
Ym, Jr. filed a Comment/Opposition of March 20,
subject of the present petitions must consequently
2010, while John Lu Ym and LLDC filed a
Since an amended pleading supersedes the
be denied.
Consolidated Comment of March 25, 2010, a
pleading that it amends, the original complaint of
Supplement thereto of April 20, 2010, and a
David, et al. was deemed withdrawn from the
Manifestation of May 24, 2010.
records.
Taking Cognizance of the Present Incidents
The present cases were later referred to the
Court en banc by Resolution of October 20, 2010.

The Court noted in G.R. No. 153690 that both


The Internal Rules of the Supreme Court (IRSC)
parties admitted the mootness of the issue and that
states that the Court en banc shall act on the
the trial court had already rendered a decision on the following matters and cases:
merits of the case. It added that the Amended
Complaint stands since Lu Ym father and sons
(a) cases in which the constitutionality or
availed of an improper mode (via an Urgent Motion
validity of any treaty, international or
filed with this Court) to assail the admission of the
executive agreement, law, executive order,
Amended Complaint.
presidential decree, proclamation, order,

Brief Statement of the Antecedents


The three consolidated cases stemmed from
the complaint for "Declaration of Nullity of Share
Issue, Receivership and Dissolution" filed on August
14, 2000 before the Regional Trial Court (RTC) of
Cebu City by David Lu, et al.against Paterno Lu Ym,
Sr. and sons (Lu Ym father and sons) and LLDC.

In G.R. No. 157381 wherein Lu Ym father and sons


challenged the appellate courts resolution
restraining the trial court from proceeding with their
motion to lift the receivership order which was filed
By Decision of March 1, 2004, Branch 12 of the RTC during the pendency of G.R. No. 153690, the Court,
ruled in favor of David et al. by annulling the
by Decision of August 26, 2008 resolved that the
issuance of the shares of stock subscribed and paid issue was mooted by the amendment of the
by Lu Ym father and sons at less than par value, and complaint and by the trial courts decision on the
ordering the dissolution and asset liquidation of
merits. The motion having been filed ancillary to the
LLDC. The appeal of the trial courts Decision
main action, which main action was already decided
remains pending with the appellate court inCA-G.R. on the merits by the trial court, the Court held
CV No. 81163.
that there was nothing more to enjoin.

instruction, ordinance, or regulation is in


question;
(b) criminal cases in which the appealed
decision imposes the death penalty
or reclusion perpetua;
(c) cases raising novel questions of law;
(d) cases affecting ambassadors, other
public ministers, and consuls;

(e) cases involving decisions, resolutions,


and orders of the Civil Service Commission,
the Commission on Elections, and the
Commission on Audit;
(f) cases where the penalty recommended
or imposed is the dismissal of a judge, the
disbarment of a lawyer, the suspension of
any of them for a period of more than one
year, or a fine exceeding forty thousand
pesos;

are voting and present, are appropriate for


transfer to the Court en banc;
(n) cases that the Court en banc deems of
sufficient importance to merit its attention;
and
(o) all matters involving policy decisions in
the administrative supervision of all courts
and their personnel.6(underscoring
supplied)

blindly adhere to such error, and the parties


adversely affected thereby are not precluded from
seeking relief therefrom, by way of a motion for
reconsideration. In this jurisdiction, rectification of an
error, more than anything else, is of paramount
importance.
xxxx

It bears stressing that where, as in the present case,


the Court En Banc entertains a case for its resolution
and disposition, it does so without implying that the
(g) cases covered by the preceding
The enumeration is an amalgamation of SC Circular Division of origin is incapable of rendering objective
paragraph and involving the reinstatement
and fair justice. The action of the Court simply
No. 2-89 (February 7, 1989), as amended by En
in the judiciary of a dismissed judge, the
means that the nature of the cases calls for en banc
Banc Resolution of November 18, 1993, and the
reinstatement of a lawyer in the roll of
attention and consideration. Neither can it be
amplifications introduced by Resolution of January
attorneys, or the lifting of a judges
concluded that the Court has taken undue
18, 2000 in A.M. No. 99-12-08-SC with respect to
suspension or a lawyers suspension from
advantage of sheer voting strength. It was merely
administrative cases and matters.
the practice of law;
guided by the well-studied finding and sustainable
opinion of the majority of its actual membership
The present cases fall under at least three types of
that, indeed, subject cases are of sufficient
(h) cases involving the discipline of a
cases for consideration by the Court En Banc. At
importance meriting the action and decision of the
Member of the Court, or a Presiding
least three members of the Courts Second Division whole Court. It is, of course, beyond cavil that all the
Justice, or any Associate Justice of the
(to which the present cases were transferred,7 they
members of this highest Court of the land are always
collegial appellate court;
being assigned to a Member thereof) found, by
embued with the noblest of intentions in interpreting
Resolution of October 20, 2010, that the cases were and applying the germane provisions of law,
(i) cases where a doctrine or principle laid
appropriate for referral-transfer to the Court En
jurisprudence, rules and Resolutions of the Court to
down by the Court en banc or by a Division Banc which subsequently accepted8 the referral in
the end that public interest be duly safeguarded and
my be modified or reversed;
view of the sufficiently important reason to resolve all rule of law be observed.11
doubts on the validity of the challenged resolutions
as they appear to modify or reverse doctrines or
(j) cases involving conflicting decisions of
It is argued that the assailed Resolutions in the
principles of law.
two or more divisions;
present cases have already become final,12 since a
second motion for reconsideration is prohibited
In Firestone Ceramics v. Court of Appeals,9 the Court except for extraordinarily persuasive reasons and
(k) cases where three votes in a Division
treated the consolidated cases as En Banc cases
only upon express leave first obtained;13 and that
cannot be obtained;
and set the therein petitioners motion for oral
once a judgment attains finality, it thereby becomes
argument, after finding that the cases were of
immutable and unalterable, however unjust the result
(l) Division cases where the subject matter sufficient importance to merit the Court En Bancs
of error may appear.
has a huge financial impact on businesses attention. It ruled that the Courts action is a
or affects the welfare of a community;
legitimate and valid exercise of its residual power.10
The contention, however, misses an important point.
The doctrine of immutability of decisions applies only
(m) Subject to Section 11 (b) of this rule,
In Limketkai Sons Milling, Inc. v. Court of Appeals,
to final and executory decisions. Since the present
other division cases that, in the opinion of at the Court conceded that it is not infallible. Should
cases may involve a modification or reversal of a
least three Members of the Division who
any error of judgment be perceived, it does not

Court-ordained doctrine or principle, the judgment


rendered by the Special Third Division may be
considered unconstitutional, hence, it can never
become final. It finds mooring in the deliberations of
the framers of the Constitution:
On proposed Section 3(4), Commissioner Natividad
asked what the effect would be of a decision that
violates the proviso that "no doctrine or principle of
law laid down by the court in a decision rendered en
banc or in division may be modified or reversed
except by the court en banc." The answer given was
that such a decision would be invalid. Following
up, Father Bernas asked whether the decision, if not
challenged, could become final and binding at least
on the parties. Romulo answered that, since such a
decision would be in excess of jurisdiction, the
decision on the case could be reopened
anytime.14 (emphasis and underscoring supplied)
A decision rendered by a Division of this Court in
violation of this constitutional provision would be in
excess of jurisdiction and, therefore, invalid.15 Any
entry of judgment may thus be said to be
"inefficacious"16 since the decision is void for being
unconstitutional.
While it is true that the Court en banc exercises no
appellate jurisdiction over its Divisions, Justice
Minerva Gonzaga-Reyes opined in Firestone and
concededly recognized that "[t]he only constraint is
that any doctrine or principle of law laid down by the
Court, either rendered en banc or in division, may be
overturned or reversed only by the Court sitting en
banc."17
That a judgment must become final at some definite
point at the risk of occasional error cannot be
appreciated in a case that embroils not only a
general allegation of "occasional error" but also a
serious accusation of a violation of the
Constitution, viz., that doctrines or principles of law

were modified or reversed by the Courts Special


Third Division August 4, 2009 Resolution.

In the instant case, however, we cannot grant the


dismissal prayed for because of the following
reasons: First, the case instituted before the RTC is
one incapable of pecuniary estimation. Hence, the
The law allows a determination at first impression
that a doctrine or principle laid down by the court en correct docket fees were paid. Second, John and
banc or in division may be modified or reversed in a LLDC are estopped from questioning the
jurisdiction of the trial court because of their active
case which would warrant a referral to the Court En
participation in the proceedings below, and because
Banc. The use of the word "may" instead of "shall"
connotes probability, not certainty, of modification or the issue of payment of insufficient docket fees had
been belatedly raised before the Court of
reversal of a doctrine, as may be deemed by the
Appeals, i.e., only in their motion for
Court. Ultimately, it is the entire Court which shall
reconsideration. Lastly, assuming that the docket
decide on the acceptance of the referral and, if so,
fees paid were truly inadequate, the mistake was
"to reconcile any seeming conflict, to reverse or
modify an earlier decision, and to declare the Courts committed by the Clerk of Court who assessed
the same and not imputable to David; and as to
doctrine."18
the deficiency, if any, the same may instead be
considered a lien on the judgment that may
The Court has the power and prerogative to suspend thereafter be rendered.20 (italics in the original;
its own rules and to exempt a case from their
emphasis and underscoring supplied)
operation if and when justice requires it,19 as in the
present circumstance where movant filed a motion
The Value of the Subject Matter Cannot be
for leave after the prompt submission of a second
Estimated
motion for reconsideration but, nonetheless, still
within 15 days from receipt of the last assailed
resolution.
On the claim that the complaint had for its objective
the nullification of the issuance of 600,000 shares of
stock of LLDC, the real value of which based on
Well-entrenched doctrines or principles of law that
underlying real estate values, as alleged in the
went astray need to be steered back to their proper
course. Specifically, as David Lu correctly points out, complaint, stands atP1,087,055,105, the Courts
assailed August 4, 2009 Resolution found:
it is necessary to reconcile and declare the legal
doctrines regarding actions that are incapable of
pecuniary estimation, application of estoppel
by laches in raising an objection of lack of
jurisdiction, and whether bad faith can be deduced
from the erroneous annotation of lis pendens.
Upon a considered, thorough reexamination, the
Court grants David Lus Motion for
Reconsideration. The assailed Resolutions of
August 4, 2009 and September 23, 2009, which
turn turtle settled doctrines, must be
overturned. The Court thus reinstates the August
26, 2008 Decision wherein a three-tiered approach
was utilized to analyze the issue on docket fees:

Upon deeper reflection, we find that the movants [Lu


Ym father & sons] claim has merit. The 600,000
shares of stock were, indeed, properties in litigation.
They were the subject matter of the complaint, and
the relief prayed for entailed the nullification of the
transfer thereof and their return to LLDC. David, et
al., are minority shareholders of the corporation who
claim to have been prejudiced by the sale of the
shares of stock to the Lu Ym father and sons. Thus,
to the extent of the damage or injury they allegedly
have suffered from this sale of the shares of stock,
the action they filed can be characterized as one
capable of pecuniary estimation. The shares of stock
have a definite value, which was declared by

plaintiffs [David Lu, et al.] themselves in their


complaint. Accordingly, the docket fees should have
been computed based on this amount. This is clear
from the following version of Rule 141, Section 7,
which was in effect at the time the complaint was
filed[.]21 (emphasis and underscoring supplied)
The said Resolution added that the value of the
600,000 shares of stock, which are the properties in
litigation, should be the basis for the computation of
the filing fees. It bears noting, however,
that David, et al. are not claiming to own these
shares. They do not claim to be the owners thereof
entitled to be the transferees of the shares of stock.
The mention of the real value of the shares of
stock, over which David, et al. do not, it bears
emphasis, interpose a claim of right to recovery,
is merely narrative or descriptive in order to
emphasize the inequitable price at which the transfer
was effected.

declare null and void the issuance of 600,000


unsubscribed and unissued shares to Lu Ym father
and sons, et al. for a price of 1/18 of their real value,
for being inequitable, having been done in breach of
directors fiduciarys duty to stockholders, in violation
of the minority stockholders rights, and with unjust
enrichment.
As judiciously discussed in the Courts August 26,
2008 Decision, the test in determining whether the
subject matter of an action is incapable of pecuniary
estimation is by ascertaining the nature of the
principal action or remedy sought. It explained:

The complaint filed by David, et al. is one


for declaration of nullity of share issuance. The
main relief prayed for both in the original complaint
and the amended complaint is the same, that is, to

On the other hand, private respondents counter that


an action for annulment or rescission of a contract of
sale of real property is incapable of pecuniary
estimation and, so, the docket fees should be the
fixed amount of P400.00 in Rule 141, 7(b)(1). In
support of their argument, they cite the cases
of Lapitan v. Scandia, Inc. and Bautista v. Lim.
In Lapitan this Court, in an opinion by Justice J.B.L.
Reyes, held:

A review of the jurisprudence of this Court indicates


that in determining whether an action is one the
subject matter of which is not capable of pecuniary
estimation, this Court has adopted the criterion of
first ascertaining the nature of the principal action or
remedy sought. If it is primarily for the recovery of a
sum of money, the claim is considered capable of
pecuniary estimation, and whether jurisdiction is in
the municipal courts or in the courts of first instance
would depend on the amount of the claim.
However, where the basic issue is something other
than the right to recover a sum of money, or where
the money claim is purely incidental to, or a
consequence of, the principal relief sought, like in
suits to have the defendant perform his part of the
contract (specific performance) and in actions for
support, or for annulment of a judgment or to
foreclose a mortgage, this Court has considered
such actions as cases where the subject of the
Petitioners argue that an action for annulment or
litigation may not be estimated in terms of money,
rescission of a contract of sale of real property is a
and are cognizable exclusively by courts of first
real action and, therefore, the amount of the docket
instance. The rationale of the rule is plainly that
fees to be paid by private respondent should be
the second class cases, besides the
based either on the assessed value of the property,
determination of damages, demand an inquiry
subject matter of the action, or its estimated value as into other factors which the law has deemed to
alleged in the complaint, pursuant to the last
be more within the competence of courts of first
paragraph of 7(b) of Rule 141, as amended by the instance, which were the lowest courts of record at
Resolution of the Court dated September 12, 1990.
the time that the first organic laws of the Judiciary
Since private respondents alleged that the land, in
were enacted allocating jurisdiction (Act 136 of the
which they claimed an interest as heirs, had been
Philippine Commission of June 11, 1901).
sold for P4,378,000.00 to petitioners, this amount

x x x To be sure, the annulment of the shares, the


dissolution of the corporation and the appointment of
receivers/management committee are actions
which do not consist in the recovery of a sum of
money. If, in the end, a sum of money or real
property would be recovered, it would simply be the
consequence of such principal action. Therefore, the
The assailed August 4, 2009 Resolution also stated
case before the RTC was incapable of pecuniary
that "to the extent of the damage or injury [David, et estimation.22 (italics in the original, emphasis and
al.] allegedly have suffered from this sale," the action underscoring supplied)
"can be characterized as one capable of pecuniary
estimation." The Resolution does not, however,
Actions which the Court has recognized as being
explore the value of the extent of the damage or
incapable of pecuniary estimation include legality of
injury. Could it be the pro rata decrease (e.g., from
conveyances. In a case involving annulment of
20% to 15%) of the percentage shareholding of
contract, the Court found it to be one which cannot
David, et al. vis--vis to the whole?
be estimated:
Whatever property, real or personal, that would be
distributed to the stockholders would be a mere
consequence of the main action. In the end, in the
event LLDC is dissolved, David, et al. would not be
getting the value of the 600,000 shares, but only the
value of their minority number of shares, which are
theirs to begin with.

should be considered the estimated value of the land


for the purpose of determining the docket fees.

Actions for specific performance of contracts have


been expressly pronounced to be exclusively
cognizable by courts of first instance: De Jesus vs.
Judge Garcia, L-26816, February 28,
1967; Manufacturer's Distributors, Inc. vs. Yu Siu
Liong, L-21285, April 29, 1966. And no cogent
reason appears, and none is here advanced by
the parties, why an action for rescission (or
resolution) should be differently treated, a
"rescission" being a counterpart, so to speak, of
"specific performance". In both cases, the court
would certainly have to undertake an
investigation into facts that would justify one act
or the other. No award for damages may be had
in an action for rescission without first
conducting an inquiry into matters which would
justify the setting aside of a contract, in the same
manner that courts of first instance would have to
make findings of fact and law in actions not capable
of pecuniary estimation expressly held to be so by
this Court, arising from issues like those raised
in Arroz v. Alojado, et al., L-22153, March 31, 1967
(the legality or illegality of the conveyance sought
for and the determination of the validity of the money
deposit made); De Ursua v. Pelayo, L-13285, April
18, 1950 (validity of a judgment); Bunayog v. Tunas,
L-12707, December 23, 1959 (validity of a
mortgage); Baito v. Sarmiento, L-13105, August 25,
1960 (the relations of the parties, the right to support
created by the relation, etc., in actions for
support), De Rivera, et al. v. Halili, L-15159,
September 30, 1963 (the validity or nullity of
documents upon which claims are predicated).
Issues of the same nature may be raised by a party
against whom an action for rescission has been
brought, or by the plaintiff himself. It is, therefore,
difficult to see why a prayer for damages in an action
for rescission should be taken as the basis for
concluding such action as one capable of pecuniary
estimation a prayer which must be included in the
main action if plaintiff is to be compensated for what
he may have suffered as a result of the breach
committed by defendant, and not later on precluded
from recovering damages by the rule against splitting

a cause of action and discouraging multiplicity of


suits.23 (emphasis and underscoring supplied)
IN FINE, the Court holds that David Lu, et al.s
complaint is one incapable of pecuniary estimation,
hence, the correct docket fees were paid. The Court
thus proceeds to tackle the arguments on estoppel
and lien, mindful that the succeeding discussions
rest merely on a contrary assumption, viz., that there
was deficient payment.
Estoppel Has Set In
Assuming arguendo that the docket fees were
insufficiently paid, the doctrine of estoppel already
applies.

have addressed this issue directly to the trial court


instead of the OCA they should not be deemed to
have waived their right to assail the jurisdiction of the
trial court.25 (emphasis and underscoring supplied)
Lu Ym father and sons did not raise the issue before
the trial court. The narration of facts in the Courts
original decision shows that Lu Ym father and sons
merely inquired from the Clerk of Court on the
amount of paid docket fees on January 23, 2004.
They thereafter still "speculat[ed] on the fortune of
litigation."26 Thirty-seven days later or on March 1,
2004 the trial court rendered its decision adverse to
them.

Meanwhile, Lu Ym father and sons attempted to


verify the matter of docket fees from the Office of the
Court Administrator (OCA). In their Application for
The assailed August 4, 2009 Resolution
the issuance a writ of preliminary injunction filed with
cited Vargas v. Caminas24 on the non-applicability of the Court of Appeals, they still failed to question the
the Tijam doctrinewhere the issue of jurisdiction was, amount of docket fees paid by David Lu, et al. It was
in fact, raised before the trial court rendered its
only in their Motion for Reconsideration of the denial
decision. Thus the Resolution explained:
by the appellate court of their application for
injunctive writ that they raised such issue.
Next, the Lu Ym father and sons filed a motion for
the lifting of the receivership order, which the trial
Lu Ym father and sons further inquiry from the OCA
court had issued in the interim. David, et al., brought cannot redeem them. A mere inquiry from
the matter up to the CA even before the trial court
an improper officeat that, could not, by any stretch,
could resolve the motion. Thereafter, David, at al.,
be considered as an act of having raised the
filed their Motion to Admit Complaint to Conform to
jurisdictional question prior to the rendition of the trial
the Interim Rules Governing Intra-Corporate
courts decision. In one case, it was held:
Controversies. It was at this point that the Lu Ym
father and sons raised the question of the amount of
Here it is beyond dispute that respondents paid the
filing fees paid. They also raised this point again in
the CA when they appealed the trial courts decision full amount of docket fees as assessed by the Clerk
of Court of the Regional Trial Court of Malolos,
in the case below.
Bulacan, Branch 17, where they filed the
complaint. If petitioners believed that the
We find that, in the circumstances, the Lu Ym father assessment was incorrect, they should have
and sons are not estopped from challenging the
questioned it before the trial court. Instead,
jurisdiction of the trial court. They raised the
petitioners belatedly question the alleged
insufficiency of the docket fees before the trial court underpayment of docket fees through this
rendered judgment and continuously maintained
petition, attempting to support their position with
their position even on appeal to the CA. Although the the opinion and certification of the Clerk of Court
manner of challenge waserroneous they should

of another judicial region. Needless to state,


such certification has no bearing on the instant
case.27 (italics in the original; emphasis and
underscoring in the original)

acknowledged that the complaint they had filed


affected a title to or a right to possession of real
properties. At the very least, they must have been
fully aware that the docket fees would be based on
the value of the realties involved. Their silence or
inaction to point this out to the Clerk of Court who
The inequity resulting from the abrogation of the
computed their docket fees, therefore, becomes
whole proceedings at this late stage when the
decision subsequently rendered was adverse to the highly suspect, and thus, sufficient for this Court to
father and sons is precisely the evil being avoided by conclude that they have crossed beyond the
threshold of good faith and into the area of fraud.
the equitable principle of estoppel.
Clearly, there was an effort to defraud the
government in avoiding to pay the correct docket
No Intent to Defraud the Government
fees. Consequently, the trial court did not acquire
jurisdiction over the case.29
Assuming arguendo that the docket fees paid were
insufficient, there is no proof of bad faith to warrant a All findings of fraud should begin the exposition with
dismissal of the complaint, hence, the following
the presumption of good faith. The inquiry is not
doctrine applies:
whether there was good faith on the part of David, et
al., but whether there was bad faith on their part.
x x x In Sun Insurance Office, Ltd., (SIOL) v.
Asuncion, this Court ruled that the filing of the
The erroneous annotation of a notice of lis
complaint or appropriate initiatory pleading and the
pendens does not negate good faith. The
payment of the prescribed docket fee vest a trial
overzealousness of a party in protecting pendente
court with jurisdiction over the subject matter or
lite his perceived interest, inchoate or otherwise, in
nature of the action. If the amount of docket fees
the corporations properties from depletion or
paid is insufficient considering the amount of the
dissipation, should not be lightly equated to bad
claim, the clerk of court of the lower court involved or faith.
his duly authorized deputy has the responsibility of
making a deficiency assessment. The party filing the
That notices of lis pendens were erroneously
case will be required to pay the deficiency, but
annotated on the titles does not have the effect of
jurisdiction is not automatically lost.28 (underscoring
changing the nature of the action. The aggrieved
supplied)
party is not left without a remedy, for they can move
to cancel the annotations. The assailed August 4,
The assailed Resolution of August 4, 2009 held,
2009 Resolution, however, deemed such act as an
however, that the above-quoted doctrine does not
acknowledgement that the case they filed was a real
apply since there was intent to defraud the
action, concerning as it indirectly does the corporate
government, citing one attendant circumstance the realties, the titles of which were allegedly annotated.
annotation of notices of lis pendens on real
This conclusion does not help much in ascertaining
properties owned by LLDC. It deduced:
the filing fees because the value of these real
properties and the value of the 600,000 shares of
stock are different.
From the foregoing, it is clear that a notice of lis
pendens is availed of mainly in real actions. Hence,
when David,et al., sought the annotation of notices
of lis pendens on the titles of LLDC, they

Further, good faith can be gathered from the series


of amendments on the provisions on filing fees, that
the Court was even prompted to make a
clarification.
1avvphi1

When David Lu, et al. filed the Complaint on August


14, 2000 or five days after the effectivity of the
Securities Regulation Code or Republic Act No.
8799,30 the then Section 7 of Rule 141 was the
applicable provision, without any restricted reference
to paragraphs (a) and (b) 1 & 3 or paragraph (a)
alone. Said section then provided:
SEC. 7. Clerks of Regional Trial Courts.
(a) For filing an action or a permissive
counterclaim or money claim against an
estate not based on judgment, or for filing
with leave of court a third-party, fourth-party,
etc. complaint, or a complaint in
intervention, and for all clerical services in
the same, if the total sum claimed,
exclusive of interest, or thestated value of
the property in litigation, is:
xxxx
(b) For filing:
1.

Actions where the value of the


subject matter cannot be
estimated

... x
xx

2.

Special civil actions except judicial


foreclosure of mortgage which shall .....
be governed by paragraph (a) above x x x

3.

All other actions not involving


property

.
xxx

In a real action, the assessed value of the property,


or if there is none, the estimated value thereof shall

be alleged by the claimant and shall be the basis in


computing the fees.
x x x x31 (emphasis supplied)
The Court, by Resolution of September 4, 2001 in A.
M. No. 00-8-10-SC,32 clarified the matter of legal fees
to be collected in cases formerly cognizable by the
Securities and Exchange Commission following their
transfer to the RTC.
Clarification has been sought on the legal fees to be
collected and the period of appeal applicable in
cases formerly cognizable by the Securities and
Exchange Commission. It appears that the Interim
Rules of Procedure on Corporate Rehabilitation and
the Interim Rules of Procedure for Intra-Corporate
Controversies do not provide the basis for the
assessment of filing fees and the period of appeal in
cases transferred from the Securities and Exchange
Commission to particular Regional Trial Courts.
The nature of the above mentioned cases should
first be ascertained. Section 3(a), Rule 1 of the 1997
Rules of Civil Procedure defines civil action as one
by which a party sues another for the enforcement or
protection of a right, or the prevention or redress of a
wrong. It further states that a civil action may either
be ordinary or special, both being governed by the
rules for ordinary civil actions subject to the special
rules prescribed for special civil actions. Section 3(c)
of the same Rule, defines a special proceeding as a
remedy by which a party seeks to establish a status,
a right, or a particular fact.

(1) Devices or schemes employed by, or


any act of, the board of directors, business
associates, officers or partners, amounting
to fraud or misrepresentation which may be
detrimental to the interest of the public
and/or of the stockholders, partners, or
members of any corporation, partnership, or
association;
(2) Controversies arising out of intracorporate, partnership, or association
relations, between and among
stockholders, members or associates; and
between, any or all of them and the
corporation, partnership, or association of
which they are stockholders, members or
associates, respectively;
(3) Controversies in the election or
appointment of directors, trustees, officers,
or managers of corporations, partnerships,
or associations;

assessed for actions or proceedings filed with the


Regional Trial Court. Section 7(a) and (b) apply to
ordinary civil actionswhile 7(d) and (g) apply to
special proceedings.
In fine, the basis for computing the filing fees in
intra-corporate cases shall be section 7(a) and
(b) l & 3of Rule 141. For petitions for rehabilitation,
section 7(d) shall be applied. (emphasis and
underscoring supplied)
The new Section 21(k) of Rule 141 of the Rules of
Court, as amended by A.M. No. 04-2-04-SC33 (July
20, 2004), expressly provides that "[f]or petitions
for insolvency or other cases involving intracorporate controversies, the fees prescribed
under Section 7(a) shall apply." Notatu dignum is
that paragraph (b) 1 & 3 of Section 7 thereof
was omitted from the reference. Said
paragraph34 refers to docket fees for filing "[a]ctions
where the value of the subject matter cannot be
estimated" and "all other actions not involving
property."

(4) Derivative suits; and

By referring the computation of such docket fees


to paragraph (a) only, it denotes that an intra(5) Inspection of corporate books.
corporate controversy always involves a property in
litigation, the value of which is always the basis for
On the other hand, a petition for rehabilitation, the
computing the applicable filing fees. The latest
procedure for which is provided in the Interim Rules amendments seem to imply that there can be no
of Procedure on Corporate Recovery, should be
case of intra-corporate controversy where the value
considered as a special proceeding. It is one that
of the subject matter cannot be estimated. Even one
seeks to establish the status of a party or a particular for a mere inspection of corporate books.
fact. As provided in section 1, Rule 4 of the Interim
Rules on Corporate Recovery, the status or fact
If the complaint were filed today, one could safely
sought to be established is the inability of the
find refuge in the express phraseology of Section 21
Applying these definitions, the cases covered by
corporate debtor to pay its debts when they fall due
(k) of Rule 141 that paragraph (a) alone applies.
the Interim Rules for Intra-Corporate
so that a rehabilitation plan, containing the formula
Controversies should be considered as ordinary for the successful recovery of the corporation, may
civil actions. These cases either seek the
be approved in the end. It does not seek a relief from In the present case, however, the original Complaint
recovery of damages/property or specific
an injury caused by another party.
was filed on August 14, 2000 during which time
performance of an act against a party for the
Section 7, without qualification, was the applicable
violation or protection of a right. These cases are: Section 7 of Rule 141 (Legal Fees) of the Revised
provision. Even the Amended Complaint was filed on
March 31, 2003 during which time the applicable rule
Rules of Court lays the amount of filing fees to be

expressed that paragraphs (a) and (b) l & 3 shall be


the basis for computing the filing fees in intracorporate cases, recognizing that there could be an
intra-corporate controversy where the value of the
subject matter cannot be estimated, such as an
action for inspection of corporate books. The
immediate illustration shows that no mistake can
even be attributed to the RTC clerk of court in the
assessment of the docket fees.

DO-ALL METALS INDUSTRIES, INC., SPS.


DOMINGO LIM and LELY KUNG LIM, Petitioners,
vs.
SECURITY BANK CORP., TITOLAIDO E.
PAYONGAYONG, EVYLENE C. SISON, PHIL.
INDUSTRIAL SECURITY AGENCY CORP. and GIL
SILOS, Respondents.

the lease on December 31, 1999. Wanting to


exercise its right of first refusal, DMI tried to
negotiate with the Bank the terms of its purchase.
DMI offered to pay the Bank P8 million for the
property but the latter rejected the offer,
suggestingP15 million instead. DMI made a second
offer of P10 million but the Bank declined the same.

DECISION

Finally, assuming there was deficiency in paying the


docket fees and assuming further that there was a
mistake in computation, the deficiency may be
considered a lien on the judgment that may be
rendered, there being no established intent to
defraud the government.

ABAD, J.:

While the negotiations were on going, the Lims


claimed that they continued to use the property in
their business. But the Bank posted at the place
private security guards from Philippine Industrial
Security Agency (PISA). The Lims also claimed that
on several occasions in 2000, the guards, on
instructions of the Bank representatives Titolaido
Payongayong and Evylene Sison, padlocked the
entrances to the place and barred the Lims as well
as DMIs employees from entering the property. One
of the guards even pointed his gun at one employee
and shots were fired. Because of this, DMI was
unable to close several projects and contracts with
prospective clients. Further, the Lims alleged that
they were unable to retrieve assorted furniture,
equipment, and personal items left at the property.

This case is about the propriety of awarding


damages based on claims embodied in the plaintiffs
supplemental complaint filed without prior payment
of the corresponding filing fees.

WHEREFORE, the assailed Resolutions of August 4,


The Facts and the Case
2009 and September 23, 2009
are REVERSED and SET ASIDE. The Courts
Decision of August 26, 2008 is REINSTATED.
From 1996 to 1997, Dragon Lady Industries, Inc.,
owned by petitioner spouses Domingo Lim and Lely
Kung Lim (the Lims) took out loans from respondent
The Court of Appeals is DIRECTED to resume the
Security Bank Corporation (the Bank) that
proceedings and resolve the remaining issues with
totaled P92,454,776.45. Unable to pay the loans on
utmost dispatch in CA-G.R. CV No. 81163.
time, the Lims assigned some of their real properties
to the Bank to secure the same, including a building
SO ORDERED.
and the lot on which it stands (the property), located
at M. de Leon St., Santolan, Pasig City.1
*opinions not included

8. Do-All Metal Industries Inc. v. Security


Bank Corp. (January 10, 2011)
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 176339

January 10, 2011

The Lims eventually filed a complaint with the


Regional Trial Court (RTC) of Pasig City for
damages with prayer for the issuance of a temporary
restraining order (TRO) or preliminary injunction
against the Bank and its co-defendants
Sison, PISA, and Gil
In 1998 the Bank offered to lease the property to the Payongayong,
2
Silos.
Answering
the complaint, the Bank pointed
Lims through petitioner Do-All Metals Industries, Inc.
(DMI) primarily for business although the Lims were out that the lease contract allowed it to sell the
property at any time provided only that it gave DMI
to use part of the property as their residence. DMI
the right of first refusal. DMI had seven days from
and the Bank executed a two-year lease contract
from October 1, 1998 to September 30, 2000 but the notice to exercise its option. On September 10, 1999
the Bank gave notice to DMI that it intended to sell
Bank retained the right to pre-terminate the lease.
the property to a third party. DMI asked for an
The contract also provided that, should the Bank
extension of its option to buy and the Bank granted
decide to sell the property, DMI shall have the right
it. But the parties could not agree on a purchase
of first refusal.
price. The Bank required DMI to vacate and turnover
the property but it failed to do so. As a result, the
On December 3, 1999, before the lease was up, the Banks buyer backed-out of the sale. Despite what
Bank gave notice to DMI that it was pre-terminating
happened, the Bank and DMI continued negotiations

for the purchase of the leased premises but they


came to no agreement.
The Bank denied, on the other hand, that its guards
harassed DMI and the Lims. To protect its property,
the Bank began posting guards at the building even
before it leased the same to DMI. Indeed, this
arrangement benefited both parties. The Bank
alleged that in October of 2000, when the parties
could not come to an agreement regarding the
purchase of the property, DMI vacated the same and
peacefully turned over possession to the Bank.

delays, the RTC declared the Bank to have forfeited


its right to present additional evidence and deemed
the case submitted for decision.

allegedly lost after they were barred from


the property.
The Courts Rulings

On September 30, 2004 the RTC rendered a


decision in favor of DMI and the Lims. It ordered the
Bank to pay the plaintiffs P27,974,564.00 as actual
damages, P500,000.00 as moral
damages, P500,000 as exemplary damages,
and P100,000.00 as attorneys fees. But the court
absolved defendants Payongayong, Sison, Silos and
PISA of any liability.

One. On the issue of jurisdiction, respondent Bank


argues that plaintiffs failure to pay the filing fees on
their supplemental complaint is fatal to their action.

But what the plaintiffs failed to pay was merely the


filing fees for their Supplemental Complaint. The
RTC acquired jurisdiction over plaintiffs action from
the moment they filed their original complaint
The Bank offered no objection to the issuance of a
The Bank moved for reconsideration of the decision, accompanied by the payment of the filing fees due
TRO since it claimed that it never prevented DMI or
questioning among other things the RTCs authority on the same. The plaintiffs non-payment of the
its employees from entering or leaving the building.
to grant damages considering plaintiffs failure to pay additional filing fees due on their additional claims
For this reason, the RTC directed the Bank to allow
the filing fees on their supplemental complaint. The
did not divest the RTC of the jurisdiction it already
DMI and the Lims to enter the building and get the
RTC denied the motion. On appeal to the CA, the
had over the case.6
things they left there. The latter claimed, however,
latter found for the Bank, reversed the RTC decision,
that on entering the building, they were unable to
and dismissed the complaint as well as the
Two. As to the claim that Banks representatives and
find the movable properties they left there. In a
counterclaims.5 DMI and the Lims filed a motion for
retained guards harassed and intimidated DMIs
supplemental complaint, DMI and the Lims alleged
reconsideration but the CA denied the same, hence
employees and the Lims, the RTC found ample proof
that the Bank surreptitiously took such properties,
this petition.
of such wrongdoings and accordingly awarded
resulting in additional actual damages to them of
damages to the plaintiffs. But the CA disagreed,
over P27 million.
The Issues Presented
discounting the testimony of the police officers
regarding their investigations of the incidents since
The RTC set the pre-trial in the case for December
The issues presented in this case are:
such officers were not present when they happened.
4, 2001. On that date, however, counsel for the Bank
The CA may be correct in a way but the plaintiffs
moved to reset the proceeding. The court denied the
presented eyewitnesses who testified out of personal
1. Whether or not the RTC acquired
motion and allowed DMI and the Lims to present
knowledge. The police officers testified merely to
jurisdiction
to
hear
and
adjudicate
plaintiffs
their evidence ex parte. The court eventually
point out that there had been trouble at the place
supplemental complaint against the Bank
reconsidered its order but only after the plaintiffs had
and their investigations yielded their findings.
considering
their
failure
to
pay
the
filing
already presented their evidence and were about to
fees on the amounts of damages they claim
rest their case. The RTC declined to recall the
in it;
The Bank belittles the testimonies of the petitioners
plaintiffs witnesses for cross- examination but
witnesses for having been presented ex parte before
allowed the Bank to present its evidence.3 This
the clerk of court. But the ex parte hearing, having
prompted the Bank to seek relief from the Court of
2. Whether or not the Bank is liable for the
been properly authorized, cannot be assailed as less
Appeals (CA) and eventually from this Court but to
intimidation and harassment committed
credible. It was the Banks fault that it was unable to
4
no avail.
against DMI and its representatives; and
attend the hearing. It cannot profit from its lack of
diligence.
During its turn at the trial, the Bank got to present
3. Whether or not the Bank is liable to DMI
only defendant Payongayong, a bank officer. For
and the Lims for the machineries,
Domingo Lim and some employees of DMI testified
repeatedly canceling the hearings and incurring
equipment, and other properties they
regarding the Bank guards unmitigated use of their

superior strength and firepower. Their testimonies


were never refuted. Police Inspector Priscillo dela
Paz testified that he responded to several complaints
regarding shooting incidents at the leased premises
and on one occasion, he found Domingo Lim was
locked in the building. When he asked why Lim had
been locked in, a Bank representative told him that
they had instructions to prevent anyone from taking
any property out of the premises. It was only after
Dela Paz talked to the Bank representative that they
let Lim out.7

gave no reason for their omission nor offered to pay


the same. They merely said that they did not yet pay
the fees because the RTC had not assessed them
for it. But a supplemental complaint is like any
complaint and the rule is that the filing fees due on a
complaint need to be paid upon its filing.9 The rules
do not require the court to make special
assessments in cases of supplemental complaints.

WHEREFORE, the Court PARTIALLY GRANTS the


petition and REINSTATES with modification the
decision of the Regional Trial Court of Pasig City in
Civil Case 68184. The Court DIRECTS respondent
Security Bank Corporation to pay petitioners DMI
and spouses Domingo and Lely Kung Lim damages
in the following amounts: P500,000.00 as moral
damages, P500,000.00 as exemplary damages,
and P100,000.00 for attorneys fees. The Court
DELETES the award of actual damages
of P27,974,564.00.

To aggravate plaintiffs omission, although the Bank


brought up the question of their failure to pay
additional filing fees in its motion for reconsideration,
Payongayong, the Banks sole witness, denied
plaintiffs made no effort to make at least a late
SO ORDERED.
charges of harassment against the Banks
payment before the case could be submitted for
representatives and the guards. But his denial came decision, assuming of course that the prescription of
9. Barrameda Vda, de Ballesteros v. Rural
merely from reports relayed to him. They were not
their action had not then set it in. Clearly, plaintiffs
based on personal knowledge.
have no excuse for their continuous failure to pay the Bank of Canaman, Inc., (November 24,
fees they owed the court. Consequently, the trial
2010)
court should have treated their Supplemental
While the lease may have already lapsed, the Bank
had no business harassing and intimidating the Lims Complaint as not filed.
Republic of the Philippines
and their employees. The RTC was therefore correct
SUPREME COURT
in adjudging moral damages, exemplary damages,
Plaintiffs of course point out that the Bank itself
Manila
and attorneys fees against the Bank for the acts of
raised the issue of non-payment of additional filing
their representatives and building guards.
fees only after the RTC had rendered its decision in
SECOND DIVISION
the case. The implication is that the Bank should be
deemed
to
have
waived
its
objection
to
such
Three. As to the damages that plaintiffs claim under
November 24, 2010
omission. But it is not for a party to the case or even G.R. No. 176260
their supplemental complaint, their stand is that the
for the trial court to waive the payment of the
RTC committed no error in admitting the complaint
additional filing fees due on the supplemental
LUCIA BARRAMEDA VDA. DE
even if they had not paid the filing fees due on it
complaint. Only the Supreme Court can grant
BALLESTEROS, Petitioner,
since such fees constituted a lien anyway on the
exemptions to the payment of the fees due the
vs.
judgment award. But this after-judgment lien, which
courts and these exemptions are embodied in its
RURAL BANK OF CANAMAN INC., represented
implies that payment depends on a successful
rules.
by its Liquidator, the philippine deposit
execution of the judgment, applies to cases where
1avvphil

the filing fees were incorrectly assessed or paid or


where the court has discretion to fix the amount of
the award.8 None of these circumstances obtain in
this case.
Here, the supplemental complaint specified from the
beginning the actual damages that the plaintiffs
sought against the Bank. Still plaintiffs paid no filing
fees on the same. And, while petitioners claim that
they were willing to pay the additional fees, they

insurance corporation, Respondent.


Besides, as correctly pointed out by the CA, plaintiffs
had the burden of proving that the movable
DECISION
properties in question had remained in the premises
and that the bank was responsible for their loss. The
only evidence offered to prove the loss was Domingo MENDOZA, J.:
Lims testimony and some undated and unsigned
inventories. These were self-serving and
This is a petition for review on certiorari under Rule
uncorroborated.
45 of the Revised Rules of Civil Procedure assailing
the August 15, 2006 Decision1 of the Court of
Appeals (CA) in CA-G.R. No. 82711, modifying the

decision of the Regional Trial Court of Iriga City,


Branch 36 (RTC-Iriga), in Civil Case No. IR-3128, by
ordering the consolidation of the said civil case with
Special Proceeding Case No. M-5290 (liquidation
case) before the Regional Trial Court of Makati City,
Branch 59 (RTC-Makati).

she was not able to sign the document. RBCI further


claimed that Parcel B had already been foreclosed
way back in 1999 which fact was known to Lucia
through the auctioning notary public. Attorneys fees
were pleaded as counterclaim.

insolvent bank, for Specific Performance, Breach of


Contract, Damages or whatever."

It is in view of this jurisprudential pronouncement


made by no less than the Supreme Court, that this
case is, as far as defendant Rural Bank of Canaman
The case was then set for pre-trial conference.
Inc., is concerned, hereby ordered DISMISSED
It appears from the records that on March 17, 2000, During the pre-trial, RBCIs counsel filed a motion to without prejudice on the part of the plaintiff to
petitioner Lucia Barrameda Vda. De
withdraw after being informed that Philippine Deposit ventilate their claim before the Liquidation Court
Ballesteros (Lucia) filed a complaint for Annulment
Insurance Corporation (PDIC) would handle the case now, RTC Branch 59, Makati City.
of Deed of Extrajudicial Partition, Deed of Mortgage as RBCI had already been closed and placed under
and Damages with prayer for Preliminary
the receivership of the PDIC. Consequently, on
SO ORDERED.
Injunction against her children, Roy, Rito, Amy,
February 4, 2002, the lawyers of PDIC took over the
Arabel, Rico, Abe, Ponce Rex and Adden, all
case of RBCI.
Not in conformity, Lucia appealed the RTC ruling to
surnamed Ballesteros, and the Rural Bank of
the CA on the ground that the RTC-Iriga erred in
Canaman, Inc., Baao Branch (RBCI) before the
On May 9, 2003, RBCI, through PDIC, filed a motion dismissing the case because it had jurisdiction over
RTC-Iriga. The case was docketed as Civil Case No. to dismiss on the ground that the RTC-Iriga has no
Civil Case No. IR-3128 under the rule on adherence
IR-3128.
jurisdiction over the subject matter of the action.
of jurisdiction.
RBCI stated that pursuant to Section 30, Republic
In her complaint, Lucia alleged that her deceased
Act No. 7653(RA No. 7653), otherwise known as the
On August 15, 2006, the CA rendered the
husband, Eugenio, left two (2) parcels of land
"New Central Bank Act," the RTC-Makati, already
questioned decision ordering the consolidation of
located in San Nicolas, Baao, Camarines Sur, each
constituted itself, per its Order dated August 10,
Civil Case No. IR-3128 and the liquidation case
with an area of 357 square meters; that on March 6, 2001, as the liquidation court to assist PDIC in
pending before RTC-Makati. The appellate court
1995, without her knowledge and consent, her
undertaking the liquidation of RBCI. Thus, the
ratiocinated thus:
children executed a deed of extrajudicial partition
subject matter of Civil Case No. IR-3128 fell within
and waiver of the estate of her husband wherein all
the exclusive jurisdiction of such liquidation court.
the heirs, including Lucia, agreed to allot the two
Lucia opposed the motion.
The consolidation is desirable in order to prevent
parcels to Rico Ballesteros (Rico); that, still, without
confusion, to avoid multiplicity of suits and to save
her knowledge and consent, Rico mortgaged Parcel On July 29, 2003, the RTC-Iriga issued an
unnecessary cost and expense. Needless to add,
B of the estate in favor of RBCI which mortgage was order2 granting the Motion to Dismiss, to wit:
this procedure is well in accord with the principle that
being foreclosed for failure to settle the loan secured
the rules of procedure shall be liberally construed in
by the lot; and that Lucia was occupying Parcel B
order to promote their object and to assist the parties
This resolves the Motion to Dismiss filed by the
and had no other place to live. She prayed that the
in obtaining just, speedy and inexpensive
defendant Rural Bank of Canaman, Inc., premised
deed of extrajudicial partition and waiver, and the
determination of every action and proceeding
on the ground that this court has no jurisdiction over (Vallacar Transit, Inc. v. Yap, 126 SCRA 500 [1983];
subsequent mortgage in favor of RBCI be declared
the subject matter of the action. This issue of
null and void having been executed without her
Suntay v. Aguiluz, 209 SCRA 500 [1992]
jurisdiction was raised in view of the pronouncement citing Ramos v. Ebarle, 182 SCRA 245 [1990]). It
knowledge and consent. She also prayed for
of the Supreme Court in Ong v. C.A. 253 SCRA 105 would be more in keeping with the demands of
damages.
and in the case of Hernandez v. Rural Bank of
equity if the cases are simply ordered consolidated.
Lucena, Inc., G.R. No. L-29791 dated January 10,
Pursuant to Section 2, Rule 1, Revised Rules of
In its Answer, RBCI claimed that in 1979, Lucia sold 1978, wherein it was held that "the liquidation court
one of the two parcels to Rico which represented her shall have jurisdiction to adjudicate all claims against Court, the rules on consolidation should be liberally
construed to achieve the object of the parties in
share in the estate of her husband. The extrajudicial the bank whether they be against assets of the
obtaining just, speedy and inexpensive
partition, waiver and mortgage were all executed
determination of their cases (Allied Banking
with the knowledge and consent of Lucia although

Corporation v. Court of Appeals, 259 SCRA 371


[1996]).
The dispositive portion of the decision reads:
IN VIEW OF ALL THE FOREGOING, the appealed
decision is hereby MODIFIED, in such a way that the
dismissal of this case (Civil Case No. IR-3128) is set
aside and in lieu thereof another one is entered
ordering the consolidation of said case with the
liquidation case docketed as Special Proceeding No.
M-5290 before Branch 59 of the Regional Trial Court
of Makati City, entitled "In Re: Assistance in the
Judicial Liquidation of Rural Bank of Canaman,
Camarines Sur, Inc., Philippine Deposit Corporation,
Petitioner." No pronouncement as to cost.
SO ORDERED.3
Lucia filed a motion for reconsideration4 but it was
denied by the CA in its Resolution dated December
14, 2006.5
Hence, the present petition for review on certiorari
anchored on the following
GROUNDS
(I)
THE COURT OF APPEALS ERRED IN
NOT FINDING THAT THE REGIONAL
TRIAL COURT OF IRIGA CITY, BRANCH
36 IS VESTED WITH JURISDICTION TO
CONTINUE TRYING AND ULTIMATELY
DECIDE CIVIL CASE NO. IR-3128.
(II)
THE COURT OF APPEALS ERRED AND
GRAVELY ABUSED ITS DISCRETION IN

ORDERING THE CONSOLIDATION OF


CIVIL CASE NO. IR-3128 WITH THE
LIQUIDATION CASE DOCKETED AS
SPECIAL PROCEEDINGS NO. M-5290
BEFORE BRANCH 59 OF THE REGIONAL
TRIAL COURT OF MAKATI CITY.6
Given the foregoing arguments, the Court finds that
the core issue to be resolved in this petition involves
a determination of whether a liquidation court can
take cognizance of a case wherein the main cause
of action is not a simple money claim against a bank
ordered closed, placed under receivership of the
PDIC, and undergoing a liquidation proceeding.

established, shall have exclusive jurisdiction over all


claims against the said bank.
After due consideration, the Court finds the petition
devoid of merit.
Lucias argument, that the RTC-Iriga is vested with
jurisdiction to continue trying Civil Case No. IR-3128
until its final disposition, evidently falls out from a
strained interpretation of the law and jurisprudence.
She contends that:

Since the RTC-Iriga has already obtained jurisdiction


over the case it should continue exercising such
jurisdiction until the final termination of the case. The
Lucia contends that the RTC-Iriga is vested with
jurisdiction of a court once attached cannot be
jurisdiction over Civil Case No. 3128, the constitution ousted by subsequent happenings or events,
of the liquidation court notwithstanding. According to although of a character which would have prevented
her, the case was filed before the RTC-Iriga on
jurisdiction from attaching in the first instance, and
March 17, 2000 at the time RBCI was still doing
the Court retains jurisdiction until it finally disposes of
business or before the defendant bank was placed
the case (Aruego Jr. v. Court of Appeals, 254 SCRA
under receivership of PDIC in January 2001.
711).
She further argues that the consolidation of the two
cases is improper. Her case, which is for annulment
of deed of partition and waiver, deed of mortgage
and damages, cannot be legally brought before the
RTC-Makati with the liquidation case considering
that her cause of action against RBCI is not a simple
claim arising out of a creditor-debtor relationship, but
one which involves her rights and interest over a
certain property irregularly acquired by RBCI.
Neither is she a creditor of the bank, as only the
creditors of the insolvent bank are allowed to file and
ventilate claims before the liquidator, pursuant to the
August 10, 2001 Order of the RTC-Makati which
granted the petition for assistance in the liquidation
of RBCI.
In its Comment,7 PDIC, as liquidator of RBCI,
counters that the consolidation of Civil Case No.
3128 with the liquidation proceeding is proper. It
posits that the liquidation court of RBCI, having been

When a court has already obtained and is exercising


jurisdiction over a controversy, its jurisdiction to
proceed to final determination of the case is not
affected by a new legislation transferring jurisdiction
over such proceedings to another tribunal. (Alindao
v. Joson, 264 SCRA 211). Once jurisdiction is
vested, the same is retained up to the end of the
litigation (Bernate v. Court of Appeals, 263 SCRA
323).8
The afore-quoted cases, cited by Lucia to bolster the
plea for the continuance of her case, find no
application in the case at bench.
Indeed, the Court recognizes the doctrine on
adherence of jurisdiction. Lucia, however, must be
reminded that such principle is not without
exceptions. It is well to quote the ruling of the CA on
this matter, thus:

This Court is not unmindful nor unaware of the


doctrine on the adherence of jurisdiction. However,
the rule on adherence of jurisdiction is not absolute
and has exceptions. One of the exceptions is that
when the change in jurisdiction is curative in
character (Garcia v. Martinez, 90 SCRA 331
[1979]; Calderon, Sr. v. Court of Appeals, 100 SCRA
459 [1980]; Atlas Fertilizer Corporation v. Navarro,
149 SCRA 432 [1987]; Abad v. RTC of Manila, Br.
Lll, 154 SCRA 664 [1987]).
For sure, Section 30, R.A. 7653 is curative in
character when it declared that the liquidation court
shall have jurisdiction in the same proceedings to
assist in the adjudication of the disputed claims
against the Bank. The interpretation of this Section
(formerly Section 29, R.A. 265) becomes more
obvious in the light of its intent. InManalo v. Court of
Appeals (366 SCRA 752, [2001]), the Supreme
Court says:

it was held that the time of the filing of the complaint


is immaterial, viz:
It is the contention of petitioners, however, that the
placing under receivership of Respondent Bank long
after the filing of the complaint removed it from the
doctrine in the said Morfe Case.
This contention is untenable. The time of the filing of
the complaint is immaterial. It is the execution that
will obviously prejudice the other depositors and
creditors. Moreover, as stated in the said Morfe
case, the effect of the judgment is only to fix the
amount of the debt, and not to give priority over
other depositors and creditors.

The cited Morfe case11 held that "after the Monetary


Board has declared that a bank is insolvent and has
ordered it to cease operations, the Board becomes
the trustee of its assets for the equal benefit of all the
creditors, including depositors. The assets of the
xxx The requirement that all claims against the bank insolvent banking institution are held in trust for the
be pursued in the liquidation proceedings filed by the equal benefit of all creditors, and after its insolvency,
Central Bank is intended to prevent multiplicity of
one cannot obtain an advantage or a preference
actions against the insolvent bank and designed to
over another by an attachment, execution or
establish due process and orderliness in the
otherwise."
liquidation of the bank, to obviate the proliferation of
litigations and to avoid injustice and arbitrariness
Thus, to allow Lucias case to proceed independently
(citing Ong v. CA, 253 SCRA 105 [1996]). The
lawmaking body contemplated that for convenience, of the liquidation case, a possibility of favorable
judgment and execution thereof against the assets of
only one court, if possible, should pass upon the
RBCI would not only prejudice the other creditors
claims against the insolvent bank and that the
liquidation court should assist the Superintendents of and depositors but would defeat the very purpose for
which a liquidation court was constituted as well.
Banks and regulate his operations (citing Central
Bank of the Philippines, et al. v. CA, et al., 163
SCRA 482 [1988]).9
Anent the second issue, Lucia faults the CA in
directing the consolidation of Civil Case No. IR-3128
with Special Proceedings No. M-5290. The CA
As regards Lucias contention that jurisdiction
committed no error. Lucias complaint involving
already attached when Civil Case No. IR-3128 was
filed with, and jurisdiction obtained by, the RTC-Iriga annulment of deed of mortgage and damages falls
within the purview of a disputed claim in
prior to the filing of the liquidation case before the
RTC-Makati, her stance fails to persuade this Court. contemplation of Section 30 of R.A. 7653 (The New
In refuting this assertion, respondent PDIC cited the Central Bank Act). The jurisdiction should be lodged
case of Lipana v. Development Bank of Rizal10 where with the liquidation court. Section 30 provides:

Sec. 30. Proceedings in Receivership and


Liquidation. - Whenever, upon report of the head of
the supervising or examining department, the
Monetary Board finds that a bank or quasi-bank:
(a) is unable to pay its liabilities as they
become due in the ordinary course of
business: Provided, That this shall not
include inability to pay caused by
extraordinary demands induced by financial
panic in the banking community;
(b) has insufficient realizable assets, as
determined by the Bangko Sentral, to meet
its liabilities; or
(c) cannot continue in business without
involving probable losses to its depositors
or creditors; or
(d) has wilfully violated a cease and desist
order under Section 37 that has become
final, involving acts or transactions which
amount to fraud or a dissipation of the
assets of the institution; in which cases, the
Monetary Board may summarily and
without need for prior hearing forbid the
institution from doing business in the
Philippines and designate the Philippine
Deposit Insurance Corporation as receiver
of the banking institution.
For a quasi-bank, any person of recognized
competence in banking or finance may be
designated as receiver.
The receiver shall immediately gather and take
charge of all the assets and liabilities of the
institution, administer the same for the benefit of its
creditors, and exercise the general powers of a
receiver under the Revised Rules of Court but shall
not, with the exception of administrative
expenditures, pay or commit any act that will involve

the transfer or disposition of any asset of the


institution: Provided, That the receiver may deposit
or place the funds of the institution in nonspeculative investments. The receiver shall
determine as soon as possible, but not later than
ninety (90) days from take over, whether the
institution may be rehabilitated or otherwise placed
in such a condition that it may be permitted to
resume business with safety to its depositors and
creditors and the general public: Provided, That any
determination for the resumption of business of the
institution shall be subject to prior approval of the
Monetary Board.
If the receiver determines that the institution cannot
be rehabilitated or permitted to resume business in
accordance with the next preceding paragraph, the
Monetary Board shall notify in writing the board of
directors of its findings and direct the receiver to
proceed with the liquidation of the institution. The
receiver shall:

(2) convert the assets of the institution to


money, dispose of the same to creditors
and other parties, for the purpose of paying
the debts of such institution in accordance
with the rules on concurrence and
preference of credit under the Civil Code of
the Philippines and he may, in the name of
the institution, and with the assistance of
counsel as he may retain, institute such
actions as may be necessary to collect and
recover accounts and assets of, or defend
any action against, the institution. The
assets of an institution under receivership
or liquidation shall be deemed in custodia
legis in the hands of the receiver and shall,
from the moment the institution was placed
under such receivership or liquidation, be
exempt from any order of garnishment,
levy, attachment, or execution. [Emphasis
supplied]
xxx

(1) file ex parte with the proper regional trial


court, and without requirement of prior
notice or any other action, a petition for
assistance in the liquidation of the
institution pursuant to a liquidation plan
adopted by the Philippine Deposit
Insurance Corporation for general
application to all closed banks. In case of
quasi-banks, the liquidation plan shall be
adopted by the Monetary Board. Upon
acquiring jurisdiction, the court shall, upon
motion by the receiver after due notice,
adjudicate disputed claims against the
institution, assist the enforcement of
individual liabilities of the stockholders,
directors and officers, and decide on other
issues as may be material to implement the
liquidation plan adopted. The receiver shall
pay the cost of the proceedings from the
assets of the institution.

not proper or without basis. On the other hand, it


may also end with the liquidation court allowing the
claim. In the latter case, the claim shall be classified
whether it is ordinary or preferred, and thereafter
included Liquidator. In either case, the order allowing
or disallowing a particular claim is final order, and
may be appealed by the party aggrieved thereby.
The second phase involves the approval by the
Court of the distribution plan prepared by the duly
appointed liquidator. The distribution plan specifies in
detail the total amount available for distribution to
creditors whose claim were earlier allowed. The
Order finally disposes of the issue of how much
property is available for disposal. Moreover, it ushers
in the final phase of the liquidation proceeding payment of all allowed claims in accordance with the
order of legal priority and the approved distribution
plan.
xxx

A liquidation proceeding is commenced by the filing


of a single petition by the Solicitor General with a
court of competent jurisdiction entitled, "Petition for
Assistance in the Liquidation of e.g., Pacific Banking
Corporation." All claims against the insolvent are
required to be filed with the liquidation court.
Although the claims are litigated in the same
proceeding, the treatment is individual. Each claim is
heard separately. And the Order issued relative to a
particular claim applies only to said claim, leaving
the other claims unaffected, as each claim is
considered separate and distinct from the others. x x
A liquidation proceeding is a single proceeding which x [Emphasis supplied.]
consists of a number of cases properly classified as
"claims." It is basically a two-phased proceeding.
It is clear, therefore, that the liquidation court has
The first phase is concerned with the approval and
jurisdiction over all claims, including that of Lucia
disapproval of claims. Upon the approval of the
against the insolvent bank. As declared in Miranda v.
petition seeking the assistance of the proper court in Philippine Deposit Insurance Corporation,14 regular
the liquidation of a closed entity, all money claims
courts do not have jurisdiction over actions filed by
against the bank are required to be filed with the
claimants against an insolvent bank, unless there is
liquidation court. This phase may end with the
a clear showing that the action taken by the BSP,
declaration by the liquidation court that the claim is
"Disputed claims" refers to all claims, whether they
be against the assets of the insolvent bank, for
specific performance, breach of contract, damages,
or whatever.12 Lucias action being a claim against
RBCI can properly be consolidated with the
liquidation proceedings before the RTC-Makati. A
liquidation proceeding has been explained in the
case of In Re: Petition For Assistance in the
Liquidation of the Rural Bank of BOKOD (Benguet),
Inc. v. Bureau of Internal Revenue13 as follows:

through the Monetary Board, in the closure of


financial institutions was in excess of jurisdiction, or
with grave abuse of discretion. The same is not
obtaining in this present case.

FIRST DIVISION
G.R. No. 173021

October 20, 2010

1avvphi1

The power and authority of the Monetary Board to


close banks and liquidate them thereafter when
public interest so requires is an exercise of the police
power of the State. Police power, however, is subject
to judicial inquiry. It may not be exercised arbitrarily
or unreasonably and could be set aside if it is either
capricious, discriminatory, whimsical, arbitrary,
unjust, or is tantamount to a denial of due process
and equal protection clauses of the Constitution.15
In sum, this Court holds that the consolidation is
proper considering that the liquidation court has
jurisdiction over Lucias action. It would be more in
keeping with law and equity if Lucias case is
consolidated with the liquidation case in order to
expeditiously determine whether she is entitled to
recover the property subject of mortgage from RBCI
and, if so, how much she is entitled to receive from
the remaining assets of the bank.
WHEREFORE, the petition is DENIED.
SO ORDERED.

10. Lamsis v. Dong-e, (October 20, 2010)

Republic of the
Philippines
SUPREME COURT
Manila

Asin Road, Baguio City and is part of a larger parcel


of land with an area of 186,090 square meters. While
petitioners are the actual occupants of Lot No. 1,
respondent is claiming ownership thereof and is
seeking to recover its possession from petitioners.

DELFIN LAMSIS, MAYNARD MONDIGUING, JOSE


VALDEZ, JR. and Heirs of AGUSTIN KITMA,
According to respondent Margarita Semon Dong-E
represented by EUGENE KITMA, Petitioners,
(Margarita), her familys ownership and occupation of
vs.
Lot No. 1 can be traced as far back as 1922 to her
MARGARITA SEMON DONG-E, Respondent.
late grandfather, Ap-ap.5 Upon Ap-aps death, the
property was inherited by his children, who obtained
DECISION
a survey plan in 1964 of the 186,090-square meter
property, which included Lot No. 1.6 On the same
year, they declared the property for taxation
DEL CASTILLO, J.:
purposes in the name of "The Heirs of Ap-ap."7 The
1964 tax declaration bears a notation that reads:
There is laches when a party is aware, even in the
"Reconstructed from an old Tax Declaration No. 363
early stages of the proceedings, of a possible
8
jurisdictional objection, and has every opportunity to dated May 10, 1922 per true of same presented."
raise said objection, but fails to do so, even on
appeal.
This is a Petition for Review1 assailing the March 30,
2006 Decision2 of the Court of Appeals (CA) in CAG.R. CV No. 78987 as well as its May 26, 2006
Resolution3 which denied petitioners motion for
reconsideration. The dispositive portion of the
assailed Decision reads:

The heirs of Ap-ap then executed, for a P500.00


consideration, a Deed of Quitclaim9 on February 26,
1964 in favor of their brother Gilbert Semon
(Margaritas father).

Sometime between 1976 and 1978,10 Gilbert Semon


together with his wife Mary Lamsis, allowed his inlaws Manolo Lamsis and Nancy Lamsis-Kitma, to
stay on a portion of Lot No. 1 together with their
respective families.11 They were allowed to erect their
WHEREFORE, in view of the foregoing, the appeal
houses, introduce improvements, and plant trees
is hereby DISMISSED for lack of merit and the
thereon. When Manolo Lamsis and Nancy Lamsisjudgment dated January 8, 2003 of the Regional
Trial Court of Baguio City in Civil Case No. 4140-R is Kitma died sometime in the 1980s, their children,
petitioners Delfin Lamsis (Delfin) and Agustin Kitma
AFFIRMED in toto.
(Agustin), took possession of certain portions of Lot
No. 1. Delfin possessed 4,000 square meters of Lot
SO ORDERED.4
No. 1, while Agustin occupied 5,000 square meters
thereof.12 Nevertheless, the heirs of Gilbert Semon
tolerated the acts of their first cousins.
Factual antecedents
This case involves a conflict of ownership and
possession over an untitled parcel of land,
denominated as Lot No. 1, with an area of 80,736
square meters. The property is located along Km. 5

When Gilbert Semon died in 1983,13 his children


extrajudicially partitioned the property among
themselves and allotted Lot No. 1 thereof in favor of
Margarita.14 Since then, Margarita allegedly paid the

realty tax over Lot No. 115 and occupied and


improved the property together with her husband;
while at the same time, tolerating her first cousins
occupation of portions of the same lot.
This state of affairs changed when petitioners Delfin
and Agustin allegedly began expanding their
occupation on the subject property and selling
portions thereof.16 Delfin allegedly sold a 400-square
meter portion of Lot No. 1 to petitioner
Maynard17 Mondiguing (Maynard) while Agustin sold
another portion to petitioner Jose Valdez (Jose).18
With such developments, Margarita filed a
complaint19 for recovery of ownership, possession,
reconveyance and damages against all four
occupants of Lot No. 1 before the Regional Trial
Court (RTC) of Baguio City. The case was docketed
as Civil Case No. 4140-R and raffled to Branch 59.
The complaint prayed for the annulment of the sales
to Maynard and Jose and for petitioners to vacate
the portions of the property which exceed the areas
allowed to them by Margarita.20 Margarita claimed
that, as they are her first cousins, she is willing to
donate to Delfin and Agustin a portion of Lot No. 1,
provided that she retains the power to choose such
portion.21

Ap-aps children, failed to include two Rita


Bocahan and Stewart Sito.23 Margarita admitted
during trial that Rita Bocahan and Stewart Sito were
her uncle and aunt, but did not explain why they
were excluded from the quitclaim.
According to Maynard and Jose, Delfin and Agustin
were the ones publicly and openly in possession of
the land and who introduced improvements thereon.
They also corroborated Delfin and Agustins
allegation that the real owners of the property are the
heirs of Joaquin Smith.24
In order to debunk petitioners claim that the Smiths
owned the subject property, Margarita presented a
certified copy of a Resolution from the Land
Management Office denying the Smiths application
for recognition of the subject property as part of their
ancestral land.25 The resolution explains that the
application had to be denied because the Smiths did
not "possess, occupy or utilize all or a portion of the
property x x x. The actual occupants (who were not
named in the resolution) whose improvements are
visible are not in any way related to the applicant or
his co-heirs."26

To bolster her claim of ownership and possession,


Margarita introduced as evidence an unnumbered
Petitioners denied Margaritas claims of ownership
resolution of the Community Special Task Force on
and possession over Lot No. 1. According to Delfin
Ancestral Lands (CSTFAL) of the Department of
and Agustin, Lot No. 1 is a public land claimed by the Environment and Natural Resources (DENR), acting
heirs of Joaquin Smith (not parties to the case).22 The favorably on her and her siblings ancestral land
Smiths gave their permission for Delfin and Agustins claim over a portion of the 186,090-square meter
parents to occupy the land sometime in 1969 or
property.27 The said resolution states:
1970. They also presented their neighbors who
testified that it was Delfin and Agustin as well as their The land subject of the instant application is the
respective parents who occupied Lot No. 1, not
ancestral land of the herein applicants. WellMargarita and her parents.
established is the fact that the land treated herein
Delfin and Agustin also assailed the muniments of
ownership presented by Margarita as fabricated,
unauthenticated, and invalid. It was pointed out that
the Deed of Quitclaim, allegedly executed by all of

was first declared for taxation purposes in 1922


under Tax Declaration No. 363 by the applicants
grandfather Ap-Ap (one name). Said application was
reconstructed in 1965 after the original got lost
during the war. These tax declarations were issued

and recorded in the Municipality of Tuba, Benguet,


considering that the land was then within the
territorial jurisdiction of the said municipality. That
upon the death of declarant Ap-Ap his heirs x x x
transferred the tax declaration in their name, [which
tax declaration is] now with the City assessors office
of Baguio.
The land consisting of four (4) lots with a total area
of ONE HUNDRED EIGHTY SIX THOUSAND
NINETY (186,090) SQUARE METERS, is covered
by Psu-198317 duly approved by the Director of
Lands on October 4, 1963 in the name of Ap-Ap (one
name). In 1964, the same land was the subject of a
petition filed by Gilbert Semon, as petitioner, before
the Court of First Instance of the City of Baguio in
the reopening of Judicial Proceedings under Civil
Case No. 1, GLRO Record No. 211 for the
registration and the issuance of Certificate of Title of
said land. The land registration case was however
overtaken by the decision of the Supreme Court
declaring such judicial proceedings null and void
because the courts of law have no jurisdiction.
It has been sufficiently substantiated by the
applicants that prior to and at the time of the
pendency of the land registration case and
henceforth up to and including the present, the
herein applicants by themselves and through their
predecessor-in-interest have been in exclusive,
continuous, and material possession and occupation
of the said parcel of land mentioned above under
claim of ownership, devoting the same for residential
and agricultural purposes. Found are the residential
houses of the applicants as well as those of their
close relatives, while the other areas planted to fruit
trees, coffee and banana, and seasonal crops. Also
noticeable therein are permanent stone and earthen
fences, terraces, clearings, including irrigation
gadgets.
On the matter of the applicant[s] indiguinity [sic] and
qualifications, there is no doubt that they are
members of the National Cultural Communities,

particularly the Ibaloi tribe. They are the legitimate


grandchildren of Ap-Ap (one name) who lived along
the Asin Road area. His legal heirs are: Orani Ap-Ap,
married to Calado Salda; Rita Ap-Ap, married to
Jose Bacacan; Sucdad Ap-Ap, married to Oragon
Wakit; and Gilbert Semon, a former vice-mayor of
Tuba, Benguet, [who] adopted the common name of
their father Semon, as it is the customary practice
among the early Ibalois. x x x

Executive Director, DENR-CAR, Diego Silang Street,


Baguio City. The area of the claim stated herein
above is however subject to the outcome of the final
survey to be forthwith executed.
Carried this 23rd day of June 1998.28

The resolution was not signed by two members of


the CSTFAL on the ground that the signing of the
unnumbered resolution was overtaken by the
On the matter regarding the inheritance of the heirs
enactment of the Republic Act (RA) No. 8371 or the
of Ap-Ap, it is important to state [that] Gilbert Semon Indigenous Peoples Rights Act of 1997 (IPRA). The
consolidated ownership thereof and became the sole IPRA removed the authority of the DENR to issue
heir in 1964, by way of a "Deed of Quitclaim"
ancestral land claim certificates and transferred the
executed by the heirs in his favor. As to the
same to the National Commission on Indigenous
respective share of the applicants[] co-heirs, the
Peoples (NCIP).29 The Ancestral Land Application
same was properly adjudicated in 1989 with the
No. Bg-L-064 of the Heirs of Gilbert Semon was
execution of an "Extrajudicial Settlement/ Partition of transferred to the NCIP, Cordillera Administrative
Estate with Waiver of Rights."
Region, La Trinidad, Benguet and re-docketed as
Case No. 05-RHO-CAR-03.30 The petitioners filed
With regard to the overlapping issue, it is pertinent to their protest in the said case before the NCIP. The
state that application No. Bg-L-066 of Thomas Smith same has been submitted for resolution.
has already been denied by us in our Resolution
dated November 1997. As to the other adverse
Ruling of the Regional Trial Court31
claims therein by reason of previous conveyances in
favor of third parties, the same were likewise
After summarizing the evidence presented by both
excluded resulting in the reduction of the area
originally applied from ONE HUNDRED EIGHTY SIX parties, the trial court found that it preponderates in
THOUSAND NINETY (186,090) SQUARE METERS, favor of respondents long-time possession of and
claim of ownership over the subject property.32 The
more or less to ONE HUNDRED TEN THOUSAND
survey plan of the subject property in the name of
THREE HUNDRED FORTY TWO (110,342)
the Heirs of Ap-ap executed way back in 1962 and
SQUARE METERS, more or less. Considering the
the tax declarations thereafter issued to the
foregoing developments, we find no legal and
respondent and her siblings all support her claim that
procedural obstacle in giving due course to the
her family and their predecessors-in-interest have all
instant application.
been in possession of the property to the exclusion
of others. The court likewise gave credence to the
Now therefore, we hereby [resolve] that the
documentary evidence of the transfer of the land
application for Recognition of Ancestral Land Claim
from the Heirs of Ap-ap to respondents father and,
filed by the Heirs of Gilbert Semon, represented by
eventually to respondent herself. The series of
Juanito Semon, be granted [and] a Certificate of
transfers of the property were indications of the
Ancestral Land Claim (CALC) be issued to the
respondents and her predecessors interest over the
herein applicants by the Secretary, Department of
property. The court opined that while these pieces of
Environment and Natural Resources, Visayas
documentary evidence were not conclusive proof of
Avenue, Diliman, Quezon City, through the Regional

actual possession, they lend credence to


respondents claim because, "in the ordinary course
of things, persons will not execute legal documents
dealing with real property, unless they believe, and
have the basis to believe, that they have an interest
in the property subject of the legal documents x x
x."33
In contrast, the trial court found nothing on record to
substantiate the allegations of the petititioners that
they and their parents were the long-time
possessors of the subject property. Their own
statements belied their assertions. Petitioner
Maynard and Jose both admitted that they could not
secure title for the property from the Bureau of Lands
because there were pending ancestral land claims
over the property.34 Petitioner Agustins Townsite
Sales Application over the property was held in
abeyance because of respondents own claim, which
was eventually favorably considered by the
CSTFAL.35
The dispositive portion of the trial courts Decision
reads:
WHEREFORE, premises considered, judgment is
hereby rendered in favor of the [respondent] and
against the [petitioners]
(1) Declaring the transfer of a portion of Lot
1 of PSU 198317 made by the [petitioner]
Delfin Lamsis to Menard Mondiguing and
Jose Valdez, Jr. null and void;
(2) Ordering the [petitioners] Delfin Lamsis,
Agustin Kitma, Menard Mondiguing and
Jose Valdez, Jr., to vacate the area they are
presently occupying that is within Lot 1 of
PSU 198317 belonging to the [respondent]
and to surrender possession thereof to the
[respondent];

(3) To pay [respondent] attorneys fees in


the amount of P10,000.00; and
(4) To pay the costs of suit.
SO ORDERED.36
It appears that no motion for reconsideration was
filed before the trial court. Nevetheless, the trial court
issued an Order37 allowing the petitioners Notice of
Appeal.38
Ruling of the Court of Appeals39
The sole issue resolved by the appellate court was
whether the trial court erred in ruling in favor of
respondent in light of the adduced evidence. Citing
the rule on preponderance of evidence, the CA held
that the respondent was able to discharge her
burden in proving her title and interest to the subject
property. Her documentary evidence were amply
supported by the testimonial evidence of her
witnesses.
In contrast, petitioners only made bare allegations in
their testimonies that are insufficient to overcome
respondents documentary evidence.
Petitioners moved for a reconsideration40 of the
adverse decision but the same was denied.
Hence this petition, which was initially denied for
failure to show that the CA committed any reversible
error.41Upon petitioners motion for
reconsideration,42 the petition was reinstated in the
Courts January 15, 2007 Resolution.43
Petitioners arguments
Petitioners assign as error the CAs appreciation of
the evidence already affirmed and considered by the

trial court. They maintain that the change in the


presiding judges who heard and decided their case
resulted in the appreciation of what would otherwise
be inadmissible evidence.44 Petitioners ask that the
Court exempt their petition from the general rule that
a trial judges assessment of the credibility of
witnesses is accorded great respect on appeal.
To support their claim that the trial and appellate
courts erred in ruling in favor of respondent, they
assailed the various pieces of evidence offered by
respondent. They maintain that the Deed of
Quitclaim executed by the Heirs of Ap-ap is spurious
and lacks the parties and witnesses signatures.
Moreover, it is a mere photocopy, which was never
authenticated by the notary public in court and no
reasons were proferred regarding the existence,
loss, and contents of the original copy.45 Under the
best evidence rule, the Deed of Quitclaim is
inadmissible in evidence and should have been
disregarded by the court.

Petitioners next assert that they have a right to the


subject property by the operation of acquisitive
prescription. They posit that they have been in
possession of a public land publicly, peacefully,
exclusively and in the concept of owners for more
than 30 years. Respondents assertion that
petitioners are merely possessors by tolerance is
unsubstantiated.49
Petitioners also maintain that the reivindicatory
action should be dismissed for lack of jurisdiction in
light of the enactment of the IPRA, which gives
original and exclusive jurisdiction over disputes
involving ancestral lands and domains to the
NCIP.50 They assert that the customary laws of the
Ibaloi tribe of the Benguet Province should be
applied to their dispute as mandated by Section 65,
Chapter IX of RA 8371, which states: "When
disputes involve ICCs/IPs,51 customary laws and
practices shall be used to resolve the dispute."

In the alternative that jurisdiction over an accion


reivindicatoria is held to be vested in the trial court,
the petitioners insist that the courts should dismiss
the reivindicatory action on the ground of litis
pendentia.52 They likewise argue that NCIP has
primary jurisdiction over ancestral lands, hence, the
courts should not interfere "when the dispute
demands the exercise of sound administrative
Petitioners next assail the weight to be given to
discretion requiring special knowledge, experience
respondents muniments of ownership, such as the
tax declarations and the survey plan. They insist that and services of the administrative tribunal x x x In
cases where the doctrine of primary jurisdiction is
these are not indubitable proofs of respondents
ownership over the subject property given that there clearly applicable, the court cannot arrogate unto
itself the authority to resolve a controversy, the
are other claimants to the land (who are not parties
jurisdiction over which is initially lodged with an
to this case) who also possess a survey plan over
administrative body of special competence."53 The
47
the subject property.
courts should stand aside in order to prevent the
possibility of creating conflicting decisions.54
Petitioners then assert their superior right to the
property as the present possessors thereof. They
cite pertinent provisions of the New Civil Code which Respondents arguments
presume good faith possession on the part of the
possessor and puts the burden on the plaintiff in an
Respondent opines that the appellate court did not
action to recover to prove her superior title.48
commit any reversible error in affirming the trial
Respondent did not prove that she and her husband
possessed the subject property since time
immemorial. Petitioners argue that respondent
admitted possessing and cultivating only the land
that lies outside the subject property.46

courts decision. The present petition is a mere


dilatory tactic to frustrate the speedy administration
of justice.55

1. Whether the appellate court disregarded


material facts and circumstances in
affirming the trial courts decision;

Respondent also asserts that questions of fact are


prohibited in a Rule 45 petition.56 Thus, the
appreciation and consideration of the factual issues
are no longer reviewable.57

2. Whether petitioners have acquired the


subject property by prescription;

The issue of lack of jurisdiction is raised for the first


time in the petition before this Court. It was never
raised before the trial court or the CA. Thus,
respondent insists that petitioners are now barred by
laches from attacking the trial courts jurisdiction over
the case. Citing Aragon v. Court of
Appeals,58 respondent argues that the jurisdictional
issue should have been raised at the appellate level
at the very least so as to avail of the doctrine that the
ground lack of jurisdiction over the subject matter of
the case may be raised at any stage of the
proceedings even on appeal.59
Respondent maintains that there is no room for the
application of litis pendentia because the issues in
the application for ancestral land claim are different
from the issue in a reivindicatory action. The issue
before the NCIP is whether the Government, as
grantor, will recognize the ancestral land claim of
respondent over a public alienable land; while the
issue in the reivindicatory case before the trial court
is ownership, possession, and right to recover the
real property.60
Given that the elements of lis pendens are absent in
case at bar, the allegation of forum-shopping is also
bereft of merit. Any judgment to be rendered by the
NCIP will not amount to res judicata in the instant
case.61
Issues
The petitioners present the following issues for our
consideration:

3. Whether the trial court has jurisdiction to


decide the case in light of the effectivity of
RA 8371 or the Indigenous Peoples Rights
Act of 1997 at the time that the complaint
was instituted;
4. If the trial court retains jurisdiction,
whether the ancestral land claim pending
before the NCIP should take precedence
over the reivindicatory action.62
Our Ruling
Whether the appellate court disregarded material
facts and circumstances in affirming the trial courts
decision
Both the trial and the appellate courts ruled that
respondent has proven her claims of ownership and
possession with a preponderance of evidence.
Petitioners now argue that the two courts erred in
their appreciation of the evidence. They ask the
Court to review the evidence of both parties, despite
the CAs finding that the trial court committed no
error in appreciating the evidence presented during
trial. Hence, petitioners seek a review of questions of
fact, which is beyond the province of a Rule 45
petition. A question of fact exists if the uncertainty
centers on the truth or falsity of the alleged
facts.63 "Such questions as whether certain items of
evidence should be accorded probative value or
weight, or rejected as feeble or spurious, or whether
the proofs on one side or the other are clear and
convincing and adequate to establish a proposition
in issue, are without doubt questions of fact."64

Since it raises essentially questions of fact, this


assignment of error must be dismissed for it is
settled that only questions of law may be reviewed in
an appeal by certiorari.65 There is a question of law
when there is doubt as to what the law is on a
certain state of facts. Questions of law can be
resolved without having to re-examine the probative
value of evidence presented, the truth or falsehood
of facts being admitted.66 The instant case does not
present a compelling reason to deviate from the
foregoing rule, especially since both trial and
appellate courts agree that respondent had proven
her claim of ownership as against petitioners claims.
Their factual findings, supported as they are by the
evidence, should be accorded great respect.
In any case, even if petitioners arguments attacking
the authenticity and admissibility of the Deed of
Quitclaim executed in favor of respondents father
are well-taken, it will not suffice to defeat
respondents claim over the subject property. Even
without the Deed of Quitclaim, respondents claims
of prior possession and ownership were adequately
supported and corroborated by her other
documentary and testimonial evidence. We agree
with the trial courts observation that, in the ordinary
course of things, people will not go to great lengths
to execute legal documents and pay realty taxes
over a real property, unless they have reason to
believe that they have an interest over the same.67
The fact that respondents documents traverse
several decades, from the 1960s to the 1990s, is an
indication that she and her family never abandoned
their right to the property and have continuously
exercised rights of ownership over the same.
Moreover, respondents version of how the
petitioners came to occupy the property coincides
with the same timeline given by the petitioners
themselves. The only difference is that petitioners
maintain they came into possession by tolerance of
the Smith family, while respondent maintains that it
was her parents who gave permission to petitioners.

Given the context under which the parties respective


statements were made, the Court is inclined to
believe the respondents version, as both the trial
and appellate courts have concluded, since her
version is corroborated by the documentary
evidence.

Whether the ancestral land claim pending before the


National Commission on Indigenous Peoples (NCIP)
should take precedence over the reivindicatory
action

The application for issuance of a Certificate of


Ancestral Land Title pending before the NCIP is akin
Whether petitioners have acquired the subject
to a registration proceeding. It also seeks an official
property by prescription
recognition of ones claim to a particular land and is
also in rem. The titling of ancestral lands is for the
purpose of "officially establishing" ones land as an
Assuming that the subject land may be acquired by
ancestral land.69 Just like a registration proceeding,
prescription, we cannot accept petitioners claim of
ancestral lands does not vest
acquisition by prescription. Petitioners admitted that the titling of
ownership70 upon the applicant but only recognizes
they had occupied the property by tolerance of the
ownership71 that has already vested in the applicant
owner thereof. Having made this admission, they
cannot claim that they have acquired the property by by virtue of his and his predecessor-in-interests
possession of the property since time immemorial.
prescription unless they can prove acts of
As aptly explained in another case:
repudiation. It is settled that possession, in order to
ripen into ownership, must be in the concept of an
owner, public, peaceful and uninterrupted.
It bears stressing at this point that ownership should
Possession not in the concept of owner, such as the not be confused with a certificate of title. Registering
one claimed by petitioners, cannot ripen into
land under the Torrens system does not create or
ownership by acquisitive prescription, unless the
vest title because registration is not a mode of
juridical relation is first expressly repudiated and
acquiring ownership. A certificate of title is merely an
such repudiation has been communicated to the
evidence of ownership or title over the particular
other party. Acts of possessory character executed
property described therein. Corollarily, any question
due to license or by mere tolerance of the owner are involving the issue of ownership must be threshed
inadequate for purposes of acquisitive prescription.
out in a separate suit x x x The trial court will then
Possession by tolerance is not adverse and such
conduct a full-blown trial wherein the parties will
possessory acts, no matter how long performed, do
present their respective evidence on the issue of
not start the running of the period of prescription.68
ownership of the subject properties to enable the
court to resolve the said issue. x x x72 (Emphasis
supplied)
In the instant case, petitioners made no effort to
allege much less prove any act of repudiation
sufficient for the reckoning of the acquisitive
prescription. At most, we can find on record the sale
by petitioners Delfin and Agustin of parts of the
property to petitioners Maynard and Jose; but the
same was done only in 1998, shortly before
respondent filed a case against them. Hence, the 30year period necessary for the operation of acquisitve
prescription had yet to be attained.

possession and not merely to have the land


registered under their respective names. x x x
Certificates of title do not establish
ownership.73 (Emphasis supplied)
A registration proceeding is not a conclusive
adjudication of ownership. In fact, if it is later on
found in another case (where the issue of ownership
is squarely adjudicated) that the registrant is not the
owner of the property, the real owner can file a
reconveyance case and have the title transferred to
his name.74

Likewise apropos is the following explanation:

Given that a registration proceeding (such as the


certification of ancestral lands) is not a conclusive
adjudication of ownership, it will not constitute litis
pendentia on a reivindicatory case where the issue is
ownership.75 "For litis pendentia to be a ground for
the dismissal of an action, the following requisites
must concur: (a) identity of parties, or at least such
parties who represent the same interests in both
actions; (b) identity of rights asserted and relief
prayed for, the relief being founded on the same
facts; and (c) the identity with respect to the two
preceding particulars in the two cases is such that
any judgment that may be rendered in the pending
case, regardless of which party is successful, would
amount to res judicata in the other case."76 The third
element is missing, for any judgment in the
certification case would not constitute res judicata or
be conclusive on the ownership issue involved in the
reivindicatory case. Since there is no litis pendentia,
there is no reason for the reivindicatory case to be
suspended or dismissed in favor of the certification
case.

The fact that the [respondents] were able to secure


[TCTs over the property] did not operate to vest upon
them ownership of the property. The Torrens system
does not create or vest title. It has never been
recognized as a mode of acquiring ownership x x x If
the [respondents] wished to assert their ownership,
they should have filed a judicial action for recovery of

Moreover, since there is no litis pendentia, we


cannot agree with petitioners contention that
respondent committed forum-shopping. Settled is the
rule that "forum shopping exists where the elements
of litis pendentiaare present or where a final
judgment in one case will amount to res judicata in
the other."77

Whether the trial court has jurisdiction to decide the


case in light of the effectivity of RA 8371 or the
Indigenous Peoples Rights Act of 1997 at the time
that the complaint was instituted
For the first time in the entire proceedings of this
case, petitioners raise the trial courts alleged lack of
jurisdiction over the subject-matter in light of the
effectivity78 of the IPRA at the time that the complaint
was filed in 1998. They maintain that, under the
IPRA, it is the NCIP which has jurisdiction over land
disputes involving indigenous cultural communities
and indigenous peoples.
As a rule, an objection over subject-matter
jurisdiction may be raised at any time of the
proceedings. This is because jurisdiction cannot be
waived by the parties or vested by the agreement of
the parties. Jurisdiction is vested by law, which
prevails at the time of the filing of the complaint.
An exception to this rule has been carved by
jurisprudence. In the seminal case of Tijam v.
Sibonghanoy,79 the Court ruled that the existence of
laches will prevent a party from raising the courts
lack of jurisdiction. Laches is defined as the "failure
or neglect, for an unreasonable and unexplained
length of time, to do that which, by exercising due
diligence, could or should have been done earlier; it
is negligence or omission to assert a right within a
reasonable time, warranting the presumption that the
party entitled to assert it either has abandoned or
declined to assert it."80 Wisely, some cases81 have
cautioned against applying Tijam, except for the
most exceptional cases where the factual milieu is
similar to Tijam.

case and filed their pleadings therein. It was only


after receiving the appellate courts adverse decision
that the surety awoke from its slumber and filed a
motion to dismiss, in lieu of a motion for
reconsideration. The CA certified the matter to this
Court, which then ruled that the surety was already
barred by laches from raising the jurisdiction issue.

appreciation of the evidence and the conclusions


that it derived therefrom. In their brief, they once
again assailed the CSTFALs resolution as having
been rendered functus officio by the enactment of
IPRA.83 But nowhere did petitioners assail the trial
courts ruling for having been rendered without
jurisdiction.

In case at bar, the application of the Tijam doctrine is


called for because the presence of laches cannot be
ignored. If the surety in Tijam was barred by laches
for raising the issue of jurisdiction for the first time in
the CA, what more for petitioners in the instant case
who raised the issue for the first time in their petition
before this Court.

It is only before this Court, eight years after the filing


of the complaint, after the trial court had already
conducted a full-blown trial and rendered a decision
on the merits, after the appellate court had made a
thorough review of the records, and after petitioners
have twice encountered adverse decisions from the
trial and the appellate courts that petitioners now
want to expunge all the efforts that have gone into
the litigation and resolution of their case and start all
over again. This practice cannot be allowed.

At the time that the complaint was first filed in 1998,


the IPRA was already in effect but the petitioners
never raised the same as a ground for dismissal;
instead they filed a motion to dismiss on the ground
that the value of the property did not meet the
jurisdictional value for the RTC. They obviously
neglected to take the IPRA into consideration.

When the amended complaint was filed in 1998, the


petitioners no longer raised the issue of the trial
courts lack of jurisdiction. Instead, they proceeded
to trial, all the time aware of the existence of the
IPRA as evidenced by the crossexamination82 conducted by petitioners lawyer on the
CSTFAL Chairman Guillermo Fianza. In the crossexamination, it was revealed that the petitioners
were aware that the DENR, through the CSTFAL,
had lost its jurisdiction over ancestral land claims by
virtue of the enactment of the IPRA. They assailed
the validity of the CSTFAL resolution favoring
respondent on the ground that the CSTFAL had
been rendered functus officio under the IPRA.
In Tijam, the surety could have raised the issue of
lack of jurisdiction in the trial court but failed to do so. Inexplicably, petitioners still did not question the trial
courts jurisdiction.
Instead, the surety participated in the proceedings
and filed pleadings, other than a motion to dismiss
for lack of jurisdiction. When the case reached the
When petitioners recoursed to the appellate court,
appellate court, the surety again participated in the
they only raised as errors the trial courts
1avvphi1

Thus, even assuming arguendo that petitioners


theory about the effect of IPRA is correct (a matter
which need not be decided here), they are already
barred by laches from raising their jurisdictional
objection under the circumstances.
WHEREFORE, premises considered, the petition is
denied for lack of merit. The March 30, 2006
Decision of the Court of Appeals in CA-G.R. CV No.
78987 and its May 26, 2006 Resolution denying the
motion for reconsideration are AFFIRMED.
SO ORDERED.

11. De Joya v. Marquez, GR No. 162416,


January 31, 2006
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 162416

January 31, 2006

CHESTER DE JOYA, Petitioner,


vs.
JUDGE PLACIDO C. MARQUEZ, in his capacity
as Presiding Judge of Branch 40, Manila-RTC,
PEOPLE OF THE PHILIPPINES and THE
SECRETARY OF THE DEPARTMENT OF
JUSTICE, Respondents.
DECISION
AZCUNA, J.:
This is a petition for certiorari and prohibition that
seeks the Court to nullify and set aside the warrant
of arrest issued by respondent judge against
petitioner in Criminal Case No. 03-219952 for
violation of Article 315, par. 2(a) of the Revised
Penal Code in relation to Presidential Decree (P.D.)
No. 1689. Petitioner asserts that respondent judge
erred in finding the existence of probable cause that
justifies the issuance of a warrant of arrest against
him and his co-accused.
Section 6, Rule 112 of the Revised Rules of Criminal
Procedure provides:
Sec. 6. When warrant of arrest may issue. (a)
By the Regional Trial Court. Within ten (10) days
from the filing of the complaint or information, the
judge shall personally evaluate the resolution of the
prosecutor and its supporting evidence. He may
immediately dismiss the case if the evidence on
record clearly fails to establish probable cause. If he
finds probable cause, he shall issue a warrant of
arrest, or a commitment order if the accused has
already been arrested pursuant to a warrant
issued by the judge who conducted the
preliminary investigation or when the complaint
or information was filed pursuant to section 7 of
this Rule. In case of doubt on the existence of
probable cause, the judge may order the prosecutor

to present additional evidence within five (5) days


from notice and the issuance must be resolved by
the court within thirty (30) days from the filing of the
complaint or information.
x x x1
This Court finds from the records of Criminal Case
No. 03-219952 the following documents to support
the motion of the prosecution for the issuance of a
warrant of arrest:
1. The report of the National Bureau of
Investigation to Chief State Prosecutor
Jovencito R. Zuo as regards their
investigation on the complaint filed by
private complainant Manuel Dy Awiten
against Mina Tan Hao @ Ma. Gracia Tan
Hao and Victor Ngo y Tan for syndicated
estafa. The report shows that Hao induced
Dy to invest more than a hundred million
pesos in State Resources Development
Management Corporation, but when the
latters investments fell due, the checks
issued by Hao in favor of Dy as payment for
his investments were dishonored for being
drawn against insufficient funds or that the
account was closed.2
2. Affidavit-Complaint of private
complainant Manuel Dy Awiten.3
3. Copies of the checks issued by private
complainant in favor of State Resources
Corporation.4
4. Copies of the checks issued to private
complainant representing the supposed
return of his investments in State
Resources.5

5. Demand letter sent by private


complainant to Ma. Gracia Tan Hao.6
6. Supplemental Affidavit of private
complainant to include the incorporators
and members of the board of directors of
State Resources Development
Management Corporation as participants in
the conspiracy to commit the crime of
syndicated estafa. Among those included
was petitioner Chester De Joya.7
7. Counter-Affidavits of Chester De Joya
and the other accused, Ma. Gracia Hao and
Danny S. Hao.
Also included in the records are the resolution issued
by State Prosecutor Benny Nicdao finding probable
cause to indict petitioner and his other co-accused
for syndicated estafa,8 and a copy of the Articles of
Incorporation of State Resources Development
Management Corporation naming petitioner as
incorporator and director of said corporation.
This Court finds that these documents sufficiently
establish the existence of probable cause as
required under Section 6, Rule 112 of the Revised
Rules of Criminal Procedure. Probable cause to
issue a warrant of arrest pertains to facts and
circumstances which would lead a reasonably
discreet and prudent person to believe that an
offense has been committed by the person sought to
be arrested. It bears remembering that "in
determining probable cause, the average man
weighs facts and circumstances without resorting to
the calibrations of our technical rules of evidence of
which his knowledge is nil. Rather, he relies on the
calculus of common sense of which all reasonable
men have an abundance."9 Thus, the standard used
for the issuance of a warrant of arrest is less
stringent than that used for establishing the guilt of
the accused. As long as the evidence presented
shows a prima facie case against the accused, the

trial court judge has sufficient ground to issue a


warrant of arrest against him.
The foregoing documents found in the records and
examined by respondent judge tend to show that
therein private complainant was enticed to invest a
large sum of money in State Resources
Development Management Corporation; that he
issued several checks amounting
to P114,286,086.14 in favor of the corporation; that
the corporation, in turn, issued several checks to
private complainant, purportedly representing the
return of his investments; that said checks were later
dishonored for insufficient funds and closed account;
that petitioner and his co-accused, being
incorporators and directors of the corporation, had
knowledge of its activities and transactions. These
are all that need to be shown to establish probable
cause for the purpose of issuing a warrant of arrest.
It need not be shown that the accused are indeed
guilty of the crime charged. That matter should be
left to the trial. It should be emphasized that before
issuing warrants of arrest, judges merely determine
personally the probability, not the certainty, of guilt of
an accused. Hence, judges do not conduct a de
novo hearing to determine the existence of probable
cause. They just personally review the initial
determination of the prosecutor finding a probable
cause to see if it is supported by substantial
evidence.10 In case of doubt on the existence of
probable cause, the Rules allow the judge to order
the prosecutor to present additional evidence. In the
present case, it is notable that the resolution issued
by State Prosecutor Benny Nicdao thoroughly
explains the bases for his findings that there is
probable cause to charge all the accused with
violation of Article 315, par. 2(a) of the Revised
Penal Code in relation to P.D. No. 1689.
The general rule is that this Court does not review
the factual findings of the trial court, which include
the determination of probable cause for the issuance
of warrant of arrest. It is only in exceptional cases
where this Court sets aside the conclusions of the

prosecutor and the trial judge on the existence of


probable cause, that is, when it is necessary to
prevent the misuse of the strong arm of the law or to
protect the orderly administration of justice. The facts
obtaining in this case do not warrant the application
of the exception.
lavvph!l.ne+

In addition, it may not be amiss to note that petitioner


is not entitled to seek relief from this Court nor from
the trial court as he continuously refuses to
surrender and submit to the courts jurisdiction.
Justice Florenz D. Regalado explains the requisites
for the exercise of jurisdiction and how the court
acquires such jurisdiction, thus:
x x x Requisites for the exercise of jurisdiction and
how the court acquires such jurisdiction:

to evidence on an issue not covered by the


pleadings, as provided in Sec. 5, Rule 10.
e. Jurisdiction over the res (or the property
or thing which is the subject of the
litigation). This is acquired by the actual or
constructive seizure by the court of the
thing in question, thus placing it in custodia
legis, as in attachment or garnishment; or
by provision of law which recognizes in the
court the power to deal with the property or
subject matter within its territorial
jurisdiction, as in land registration
proceedings or suits involving civil status or
real property in the Philippines of a nonresident defendant.
Justice Regalado continues to explain:

a. Jurisdiction over the plaintiff or


petitioner: This is acquired by the filing of
the complaint, petition or initiatory pleading
before the court by the plaintiff or petitioner.

In two cases, the court acquires jurisdiction to try the


case, even if it has not acquired jurisdiction over the
person of a nonresident defendant, as long as it has
jurisdiction over the res, as when the action involves
the personal status of the plaintiff or property in the
b. Jurisdiction over the defendant or
Philippines in which the defendant claims an interest.
respondent: This is acquired by the
voluntary appearance or submission by In such cases, the service of summons by
the defendant or respondent to the court publication and notice to the defendant is merely to
comply with due process requirements. Under Sec.
or by coercive process issued by the
court to him, generally by the service of 133 of the Corporation Code, while a foreign
corporation doing business in the Philippines without
summons.
a license cannot sue or intervene in any action here,
it may be sued or proceeded against before our
c. Jurisdiction over the subject matter: This courts or administrative tribunals.11
is conferred by law and, unlike jurisdiction
over the parties, cannot be conferred on the
Again, there is no exceptional reason in this case to
court by the voluntary act or agreement of
allow petitioner to obtain relief from the courts
the parties.
without submitting to its jurisdiction. On the contrary,
his continued refusal to submit to the courts
d. Jurisdiction over the issues of the case:
jurisdiction should give this Court more reason to
This is determined and conferred by the
uphold the action of the respondent judge. The
pleadings filed in the case by the parties, or purpose of a warrant of arrest is to place the
by their agreement in a pre-trial order or
accused under the custody of the law to hold him for
stipulation, or, at times by their implied
trial of the charges against him. His evasive stance
consent as by the failure of a party to object

shows an intent to circumvent and frustrate the


object of this legal process. It should be remembered
that he who invokes the courts jurisdiction must first
submit to its jurisdiction.
WHEREFORE, the petition is DISMISSED.
No costs.
SO ORDERED.