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G.R. No. 173915. February 22, 2010.* petitioners.

The complaint principally sought an award of moral and


IRENE SANTE AND REYNALDO SANTE, petitioners, vs. HON. exemplary damages, as well as attorneys fees and litigation expenses,
EDILBERTO T. CLARAVALL, in his capacity as Presiding Judge of for the alleged shame and injury suffered by respondent by reason of
Branch 60, Regional Trial Court of Baguio City, and VITA N. petitioners utterance while they were at a police station in Pangasinan.
KALASHIAN, respondents. It is settled that jurisdiction is conferred by law based on the facts
Actions; Jurisdiction; Jurisdictional Amount; In cases where the claim alleged in the complaint since the latter comprises a concise statement
for damages is the main cause of action, or one of the causes of action, of the ultimate facts constituting the plaintiffs causes of action. It is
the amount of such claim shall be considered in determining the clear, based on the allegations of the complaint, that respondents
jurisdiction of the court.But where damages is the main cause of main action is for damages. Hence, the other forms of damages being
action, should the amount of moral damages prayed for in the claimed by respondent, e.g., exemplary damages, attorneys fees and
complaint be the sole basis for determining which court has litigation expenses, are not merely incidental to or consequences of the
jurisdiction or should the total amount of all the damages claimed main action but constitute the primary relief prayed for in the
regardless of kind and nature, such as exemplary damages, nominal complaint.
damages, and attorneys fees, etc., be used? In this regard,
Administrative Circular No. 09-94 is instructive: x x x x 2. The exclusion Same; Same; It is a basic jurisprudential principle that an amendment
of the term damages of whatever kind in determining the cannot be allowed when the court has no jurisdiction over the original
jurisdictional amount under Section 19 (8) and Section 33 (1) of B.P. complaint and the purpose of the amendment is to confer jurisdiction
Blg. 129, as amended by R.A. No. 7691, applies to cases where the on the court.We find no error, much less grave abuse of discretion,
damages are merely incidental to or a consequence of the main cause on the part of the Court of Appeals in affirming the RTCs order
of action. However, in cases where the claim for damages is the main allowing the amendment of the original complaint from P300,000.00 to
cause of action, or one of the causes of action, the amount of such P1,000,000.00 despite the pendency of a petition for certiorari filed
claim shall be considered in determining the jurisdiction of the court. before the Court of Appeals. While it is a basic jurisprudential principle
that an amendment cannot be allowed when the court has no
Same; Same; Same; Where it is clear, based on the allegations of the jurisdiction over the original complaint and the purpose of the
complaint, that the main action is for damages, the other forms of amendment is to confer jurisdiction on the court, here, the RTC clearly
damages being claimed e.g., exemplary damages, attorneys fees and had jurisdiction over the original complaint and amendment of the
litigation expenses, are not merely incidental to or consequences of the complaint was then still a matter of right.
main action but constitute the primary relief prayed for in the
complaint.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
VILLARAMA, JR., J.: Leasing Corporation.7 The trial court held that the total claim of
Before this Court is a petition for certiorari1 under Rule 65 of the 1997 respondent amounted to P420,000.00 which was above the
Rules of Civil Procedure, as amended, filed by petitioners Irene and jurisdictional amount for MTCCs outside Metro Manila. The trial court
Reynaldo Sante assailing the Decision2 dated January 31, 2006 and the also later issued Orders on July 7, 20048 and July 19, 2004,9 respectively
Resolution3 dated June 23, 2006 of the Seventeenth Division of the reiterating its denial of the motion to dismiss and denying petitioners
Court of Appeals in CA-G.R. SP No. 87563. The assailed decision motion for reconsideration.
affirmed the orders of the Regional Trial Court (RTC) of Baguio City, Aggrieved, petitioners filed on August 2, 2004, a Petition for Certiorari
Branch 60, denying their motion to dismiss the complaint for damages and Prohibition,10 docketed as CA-G.R. SP No. 85465, before the
filed by respondent Vita Kalashian against them. Court of Appeals. Meanwhile, on July 14, 2004, respondent and her
The facts, culled from the records, are as follows: husband filed an Amended Complaint11 increasing the claim for moral
On April 5, 2004, respondent filed before the RTC of Baguio City a damages from P300,000.00 to P1,000,000.00. Petitioners filed a Motion
complaint for damages4 against petitioners. In her complaint, docketed to Dismiss with Answer Ad Cautelam and Counterclaim, but the trial
as Civil Case No. 5794-R, respondent alleged that while she was inside court denied their motion in an Order12 dated September 17, 2004.
the Police Station of Natividad, Pangasinan, and in the presence of Hence, petitioners again filed a Petition for Certiorari and
other persons and police officers, petitioner Irene Sante uttered words, Prohibition13 before the Court of Appeals, docketed as CA-G.R. SP No.
which when translated in English are as follows, "How many rounds of 87563, claiming that the trial court committed grave abuse of
sex did you have last night with your boss, Bert? You fuckin bitch!" discretion in allowing the amendment of the complaint to increase the
Bert refers to Albert Gacusan, respondents friend and one (1) of her amount of moral damages from P300,000.00 to P1,000,000.00. The
hired personal security guards detained at the said station and who is a case was raffled to the Seventeenth Division of the Court of Appeals.
suspect in the killing of petitioners close relative. Petitioners also On January 23, 2006, the Court of Appeals, Seventh Division,
allegedly went around Natividad, Pangasinan telling people that she is promulgated a decision in CA-G.R. SP No. 85465, as follows:
protecting and cuddling the suspects in the aforesaid killing. Thus, WHEREFORE, finding grave abuse of discretion on the part of [the]
respondent prayed that petitioners be held liable to pay moral Regional Trial Court of Baguio, Branch 60, in rendering the assailed
damages in the amount of P300,000.00; P50,000.00 as exemplary Orders dated June 24, 2004 and July [19], 2004 in Civil Case No. 5794-R
damages; P50,000.00 attorneys fees; P20,000.00 litigation expenses; the instant petition for certiorari is GRANTED. The assailed Orders are
and costs of suit. hereby ANNULLED and SET ASIDE. Civil Case No. 5794-R for damages
Petitioners filed a Motion to Dismiss5 on the ground that it was the is ordered DISMISSED for lack of jurisdiction.
Municipal Trial Court in Cities (MTCC) and not the RTC of Baguio, that SO ORDERED.14
had jurisdiction over the case. They argued that the amount of the The Court of Appeals held that the case clearly falls under the
claim for moral damages was not more than the jurisdictional amount jurisdiction of the MTCC as the allegations show that plaintiff was
of P300,000.00, because the claim for exemplary damages should be seeking to recover moral damages in the amount of P300,000.00,
excluded in computing the total claim. which amount was well within the jurisdictional amount of the MTCC.
On June 24, 2004,6 the trial court denied the motion to dismiss citing The Court of Appeals added that the totality of claim rule used for
our ruling in Movers-Baseco Integrated Port Services, Inc. v. Cyborg determining which court had jurisdiction could not be applied to the
instant case because plaintiffs claim for exemplary damages was not a OVER THE SUBJECT MATTER OF THE CASE DESPITE THE PENDENCY OF
separate and distinct cause of action from her claim of moral damages, A PETITION FOR CERTIORARI FILED AT THE COURT OF APPEALS,
but merely incidental to it. Thus, the prayer for exemplary damages SEVENTH DIVISION, DOCKETED AS CA G.R. NO. 85465.15
should be excluded in computing the total amount of the claim. In essence, the basic issues for our resolution are:
On January 31, 2006, the Court of Appeals, this time in CA-G.R. SP No. 1) Did the RTC acquire jurisdiction over the case? and
87563, rendered a decision affirming the September 17, 2004 Order of 2) Did the RTC commit grave abuse of discretion in allowing the
the RTC denying petitioners Motion to Dismiss Ad Cautelam. In the amendment of the complaint?
said decision, the appellate court held that the total or aggregate Petitioners insist that the complaint falls under the exclusive
amount demanded in the complaint constitutes the basis of jurisdiction of the MTCC. They maintain that the claim for moral
jurisdiction. The Court of Appeals did not find merit in petitioners damages, in the amount of P300,000.00 in the original complaint, is the
posture that the claims for exemplary damages and attorneys fees are main action. The exemplary damages being discretionary should not
merely incidental to the main cause and should not be included in the be included in the computation of the jurisdictional amount. And
computation of the total claim. having no jurisdiction over the subject matter of the case, the RTC
The Court of Appeals additionally ruled that respondent can amend acted with grave abuse of discretion when it allowed the amendment
her complaint by increasing the amount of moral damages of the complaint to increase the claim for moral damages in order to
from P300,000.00 to P1,000,000.00, on the ground that the trial court confer jurisdiction.
has jurisdiction over the original complaint and respondent is entitled In her Comment,16 respondent averred that the nature of her complaint
to amend her complaint as a matter of right under the Rules. is for recovery of damages. As such, the totality of the claim for
Unable to accept the decision, petitioners are now before us raising the damages, including the exemplary damages as well as the other
following issues: damages alleged and prayed in the complaint, such as attorneys fees
I. and litigation expenses, should be included in determining jurisdiction.
WHETHER OR NOT THERE WAS GRAVE ABUSE OF DISCRETION The total claim being P420,000.00, the RTC has jurisdiction over the
AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION ON THE PART complaint.
OF THE (FORMER) SEVENTEENTH DIVISION OF THE HONORABLE We deny the petition, which although denominated as a petition for
COURT OF APPEALS WHEN IT RESOLVED THAT THE REGIONAL TRIAL certiorari, we treat as a petition for review on certiorari under Rule
COURT OF BAGUIO CITY BRANCH 60 HAS JURISDICTION OVER THE 45 in view of the issues raised.
SUBJECT MATTER OF THE CASE FOR DAMAGES AMOUNTING Section 19(8) of Batas Pambansa Blg. 129,17 as amended by Republic
TO P300,000.00; Act No. 7691,18 states:
II. SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise
WHETHER OR NOT THERE WAS GRAVE ABUSE OF DISCRETION ON exclusive original jurisdiction:
THE PART OF THE HONORABLE RESPONDENT JUDGE OF THE xxxx
REGIONAL TRIAL COURT OF BAGUIO BRANCH 60 FOR ALLOWING THE (8) In all other cases in which the demand, exclusive of interest,
COMPLAINANT TO AMEND THE COMPLAINT (INCREASING THE damages of whatever kind, attorneys fees, litigation expenses, and
AMOUNT OF DAMAGES TO 1,000,000.00 TO CONFER JURISDICTION 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 damages are merely incidental to or a consequence of the
where the demand, exclusive of the abovementioned items exceeds main cause of action. However, in cases where the claim for damages is
Two hundred thousand pesos (P200,000.00). the main cause of action, or one of the causes of action, the amount of
Section 5 of Rep. Act No. 7691 further provides: such claim shall be considered in determining the jurisdiction of the
SEC. 5. After five (5) years from the effectivity of this Act, the court. (Emphasis ours.)
jurisdictional amounts mentioned in Sec. 19(3), (4), and (8); and Sec. In the instant case, the complaint filed in Civil Case No. 5794-R is for
33(1) of Batas Pambansa Blg. 129 as amended by this Act, shall be the recovery of damages for the alleged malicious acts of petitioners.
adjusted to Two hundred thousand pesos (P200,000.00). Five (5) years The complaint principally sought an award of moral and exemplary
thereafter, such jurisdictional amounts shall be adjusted further to damages, as well as attorneys fees and litigation expenses, for the
Three hundred thousand pesos (P300,000.00): Provided, however, That alleged shame and injury suffered by respondent by reason of
in the case of Metro Manila, the abovementioned jurisdictional petitioners utterance while they were at a police station in Pangasinan.
amounts shall be adjusted after five (5) years from the effectivity of this It is settled that jurisdiction is conferred by law based on the facts
Act to Four hundred thousand pesos (P400,000.00). alleged in the complaint since the latter comprises a concise statement
Relatedly, Supreme Court Circular No. 21-99 was issued declaring that of the ultimate facts constituting the plaintiffs causes of action.20 It is
the first adjustment in jurisdictional amount of first level courts outside clear, based on the allegations of the complaint, that respondents
of Metro Manila from P100,000.00 to P200,000.00 took effect on March main action is for damages. Hence, the other forms of damages being
20, 1999. Meanwhile, the second adjustment from P200,000.00 claimed by respondent, e.g., exemplary damages, attorneys fees and
to P300,000.00 became effective on February 22, 2004 in accordance litigation expenses, are not merely incidental to or consequences of the
with OCA Circular No. 65-2004 issued by the Office of the Court main action but constitute the primary relief prayed for in the
Administrator on May 13, 2004. complaint.1avvphi1
Based on the foregoing, there is no question that at the time of the In Mendoza v. Soriano,21 it was held that in cases where the claim for
filing of the complaint on April 5, 2004, the MTCCs jurisdictional damages is the main cause of action, or one of the causes of action,
amount has been adjusted to P300,000.00. the amount of such claim shall be considered in determining the
But where damages is the main cause of action, should the amount of jurisdiction of the court. In the said case, the respondents claim
moral damages prayed for in the complaint be the sole basis for of P929,000.06 in damages and P25,000 attorneys fees plus P500 per
determining which court has jurisdiction or should the total amount of court appearance was held to represent the monetary equivalent for
all the damages claimed regardless of kind and nature, such as compensation of the alleged injury. The Court therein held that the
exemplary damages, nominal damages, and attorneys fees, etc., be total amount of monetary claims including the claims for damages was
used? the basis to determine the jurisdictional amount.
In this regard, Administrative Circular No. 09-9419 is instructive: Also, in Iniego v. Purganan,22 the Court has held:
xxxx The amount of damages claimed is within the jurisdiction of the RTC,
2. The exclusion of the term "damages of whatever kind" in since it is the claim for all kinds of damages that is the basis of
determining the jurisdictional amount under Section 19 (8) and Section determining the jurisdiction of courts, whether the claims for damages
33 (1) of B.P. Blg. 129, as amended by R.A. No. 7691, applies to cases arise from the same or from different causes of action.
xxxx elapsed.A simple reading of Section 417 of the Local Government
Considering that the total amount of damages claimed Code readily discloses the two-tiered mode of enforcement of an
was P420,000.00, the Court of Appeals was correct in ruling that the amicable settlement. The provision reads: Section 417. Execution.
RTC had jurisdiction over the case.
The amicable settlement or arbitration award may be enforced by
Lastly, we find no error, much less grave abuse of discretion, on the
execution by the lupon within six (6) months from the date of the
part of the Court of Appeals in affirming the RTCs order allowing the
amendment of the original complaint from P300,000.00 settlement. After the lapse of such time, the settlement may be
to P1,000,000.00 despite the pendency of a petition for certiorari filed enforced by action in the appropriate city or municipal court.
before the Court of Appeals. While it is a basic jurisprudential principle [Emphasis ours] Under this provision, an amicable settlement or
that an amendment cannot be allowed when the court has no arbitration award that is not repudiated within a period of ten (10) days
jurisdiction over the original complaint and the purpose of the from the settlement may be enforced by: first, execution by the Lupon
amendment is to confer jurisdiction on the court,23 here, the RTC
within six (6) months from the date of the settlement; or second, by an
clearly had jurisdiction over the original complaint and amendment of
the complaint was then still a matter of right.24 action in the appropriate city or municipal trial court if more than six
WHEREFORE, the petition is DENIED, for lack of merit. The Decision and (6) months from the date of settlement has already elapsed.
Resolution of the Court of Appeals dated January 31, 2006 and June
23, 2006, respectively, are AFFIRMED. The Regional Trial Court of Same; Same; Under Section 416 of the Local Government Code (LGC),
Baguio City, Branch 60 is DIRECTED to continue with the trial the amicable settlement and arbitration award shall have the force and
proceedings in Civil Case No. 5794-R with deliberate dispatch.
effect of a final judgment of a court upon the expiration of ten (10)
No costs.
days from the date of its execution, unless the settlement or award has
SO ORDERED.
been repudiated or a petition to nullify the award has been filed before
G.R. No. 164594. April 22, 2015.* the proper city or municipal court.Under Section 416 of the Local
MICHAEL SEBASTIAN, petitioner, vs. ANNABEL LAGMAY NG, Government Code, the amicable settlement and arbitration award shall
represented by her Attorney-in-fact, ANGELITA LAGMAY, have the force and effect of a final judgment of a court upon the
respondent. expiration of ten (10) days from the date of its execution, unless the
Local Government Code; Amicable Settlement; An amicable settlement settlement or award has been repudiated or a petition to nullify the
or arbitration award that is not repudiated within a period of ten (10) award has been filed before the proper city or municipal court.
days from the settlement may be enforced by: first, execution by the Moreover, Section 14, Rule VI of the Katarungang Pambarangay
Lupon within six (6) months from the date of the settlement; or second, Implementing Rules states that the partys failure to repudiate the
by an action in the appropriate city or municipal trial court (MTC) if settlement within the period of ten (10) days shall be deemed a waiver
more than six (6) months from the date of settlement has already
of the right to challenge the settlement on the ground that his/her Ecija. She sought to collect from Michael the sum of P350,000.00 that
consent was vitiated by fraud, violence or intimidation. Annabel sent to Michael. She claimed that Annabel and Michael were
once sweethearts, and that they agreed to jointly invest their financial
resources to buy a truck. She alleged that while Annabel was working
Statutory Construction; A basic principle of interpretation is that words
in Hongkong, Annabel sent Michael the amount of P350,000.00 to
must be given their literal meaning and applied without attempted
purchase the truck. However, after Annabel and Michaels relationship
interpretation where the words of a statute are clear, plain and free has ended, Michael allegedly refused to return the money to Annabel,
from ambiguity.The law, as written, unequivocally speaks of the prompting the latter to bring the matter before the Barangay Justice.
appropriate city or municipal court as the forum for the execution of On July 9, 1997, the parties entered into an amicable settlement,
the settlement or arbitration award issued by the Lupon. Notably, in evidenced by a document denominated as "kasunduan"4 wherein
expressly conferring authority over these courts, Section 417 made no Michael agreed to pay Annabel the amount of P250,000.00 on specific
dates. The kasunduan was signed by Angelita (on behalf of Annabel),
distinction with respect to the amount involved or the nature of the
Michael, and the members of the pangkat ng tagapagkasundo. The
issue involved. Thus, there can be no question that the laws kasunduanreads: KASUNDUAN
intendment was to grant jurisdiction over the enforcement of Nagkasundo ang dalawang panig napagkayari ng labing apat na
settlement/arbitration awards to the city or municipal courts the buwan (14 months) simula ngayong July 9, 1997 hanggang September
regardless of the amount. A basic principle of interpretation is that 1998 ay kailangan ng maibigay ni Mr. Sebastian ang pera ni Ms.
words must be given their literal meaning and applied without Anabelle Lagmay.
At napagkasunduan ay dalawang hulog ang halagang P250,000.00 na
attempted interpretation where the words of a statute are clear, plain
pera ni Ms.Lagmay at simula ng pagbibigay ni Mr. Sebastian ay sa
and free from ambiguity.
buwan ng September 1998.
At upang may katunayan ang lahat ng napag usapan ay lumagda sa
BRION, J.:
ibaba nito at sa harap ng mga saksi ngayong ika-9 ng Hulyo, 1997
We resolve the petition for review on certiorari,1 filed by petitioner
Mrs. Angelita Lagmay (Lagda)
Michael Sebastian (Michael), assailing the March 31, 2004
Mr. Michael Sebastian (Lagda)
Decision,2 and the July 15, 2004 Resolution3 of the Court of Appeals
Saksi: Kagawad Rolando Mendizabal (Lagda)
(CA) in CA-G.R. SP No. 65450.
Hepe Quirino Sapon (Lagda)
The CA decision reversed and set aside the decision of the Regional
Benjamin Sebastian (Lagda)
Trial Court (RTC) of Palayan City, Branch 40, in SP. Proc. Case No. 0096-
Jun Roxas - (Lagda)
P.
Angelita alleged that the kasunduan was not repudiated within a
Factual Background
period of ten (10) days from the settlement, in accordance with the
Sometime in 1997, Angelita Lagmay (Angelita), acting as representative
Katarungang Pambarangay Law embodied in the Local Government
and attorney-in-fact of her daghter Annabel Lagmay Ng (Annabel),
Code of 1991 [Republic Act (R.A.) No. 7160], and Section 14 of its
filed a complaint before the Barangay Justice of Siclong, Laur, Nueva
Implementing Rules. When Michael failed to honor the kasunduan,
Angelita brought the matter back to the Barangay, but the Barangay the kasunduan, or to adduce any evidence to dispute Annabels claims
Captain failed to enforce the kasunduan, and instead, issued a or the applicability of the Implementing Rules and Regulations of R.A.
Certification to File Action. No. 7160. The dispositive portion of the decision reads:
After about one and a half years from the date of the execution of the WHEREFORE, the assailed Decision and Order of the lower court is
kasunduan or on January 15, 1999, Angelita filed with the Municipal hereby MODIFIED in that the appellant is ordered to pay the appellee
Circuit Trial Court (MCTC) of Laur and Gabaldon, Nueva Ecija, a Motion the amount of Two hundred Fifty Thousand pesos (P250,000.00) plus
for Execution of the kasunduan. twelve percent interest(12%) per annum from September,1998 up to
Michael moved for the dismissal of the Motion for Execution, citing as the time it is actually paid and fifty Thousand Pesos(P50,000.00)
a ground Angelitas alleged violation of Section 15, Rule 13 of the 1997 representing attorney's fees.
Rules of Civil Procedure. Michael filed a Motion for Reconsideration arguing that: (i) an amicable
On January 17, 2000, the MCTC rendered a decision5 in favor of settlement or arbitration award can be enforced by the Lupon within
Annabel, the dispositive portion of which reads, as follows: six (6) months from date of settlement or after the lapse of six (6)
WHEREFORE, the plaintiff through counsel has satisfactorily proven by months, by ordinary civil action in the appropriate City or Municipal
preponderance of evidence based on Exhibits "A," "B," "C," "D," and "F," Trial Court and not by a mere Motion for execution; and (ii) the MCTC
that defendant has obligation to the plaintiff in the amount does not have jurisdiction over the case since the amount
of P250,000.00. of P250,000.00 (as the subject matter of the kasunduan) is in excess of
IN VIEW OF THE FOREGOING, the Motion for Execution filed by the MCTCs jurisdictional amount of P200,000.00.7
plaintiff is hereby granted based on Sec. 2, Rule 7 of the Implementing In its March 13, 2001 Order, the RTC granted Michaels Motion for
Rules and Regulations of Republic Act No. 7160, and therefore, Reconsideration, and ruled that there is merit in the jurisdictional issue
defendant is hereby ordered within 15 days upon receipt of this he raised. It dismissed Angelitas Motion for Execution, and set aside
decision to pay the plaintiff the amount of P250,000.00 as evidenced the MCTC Decision. The dispositive portion of the said Order reads:
by the Kasunduan (Exhibit "C") with legal interests from July 9, 1997 WHEREFORE, the Motion for Reconsideration is GRANTED. The
until said obligation is fully paid, and to pay attorneys fees for the Decision of the Court dated November 13, 2000 is hereby SET ASIDE.
plaintiffs counsel in the amount of P15,000.00 and to pay the cost of The Decision of the Municipal Trial Court of Laur, Nueva Ecija dated
the suit. January 17, 2000 is likewise SET ASIDE and the Motion for Execution of
SO ORDERED. Kasunduan is DISMISSED, the said court having had no jurisdiction to
Michael filed an appeal with the RTC arguing that the MCTC hear and decide the matter.8
committed grave abuse of discretion in prematurely deciding the case. Angelita moved for the reconsideration of the March 13, 2001 Order,
Michael also pointed out that a hearing was necessary for the but the motion was subsequently denied. Aggrieved, she filed a
petitioner to establish the genuineness and due execution of the Petition for Review 9with the CA.
kasunduan. The Regional Trial Courts Ruling The Court of Appeals Ruling
In its November 13, 2000 Decision,6 the RTC, Branch 40 of Palayan City On August 2, 2001, the CA initially dismissed the petition for review on
upheld the MCTC decision, finding Michael liable to pay Annabel the a mere technical ground of failure to attach the Affidavit of Service.
sum of P250,000.00. It held that Michael failed to assail the validity of
Angelita moved for reconsideration, attaching in her motion the (9) the kasunduan was neither reported nor filed before the
Affidavit of Service. The CA granted the motion. MCTC; and
On March 31, 2004, the CA rendered its decision granting the petition, (10) Annabel, the real party in interest, did not personally
and reversing the RTCs decision. The CA declared that the appear before the Barangay as required by the law.
"appropriate local trial court" stated in Section 2, Rule VII of the Michael additionally claims that the kasunduan is merely in the nature
Implementing Rules of R.A. No. 7160 refers to the municipal trial of a private document. He also reiterates that since the amount
courts. Thus, contrary to Michaels contention, the MCTC has of P250,000.00 the subject matter of the kasunduan is in excess of
jurisdiction to enforce any settlement or arbitration award, regardless MCTCs jurisdictional amount of P200,000.00, the kasunduan is beyond
of the amount involved. the MCTCs jurisdiction to hear and to resolve. Accordingly, the
The CA also ruled that Michaels failure to repudiate the kasunduan in proceedings in the Barangay are all nullity.
accordance with the procedure prescribed under the Implementing The Issues
Rules of R.A. No. 7160, rendered the kasunduan final. Hence, Michael The issues to be resolved in the present petition are:
can no longer assail the kasunduan on the ground of forgery. 1. Whether or not the MCTC has the authority and jurisdiction
Michael moved to reconsider this decision, but the CA denied his to execute the kasunduan regardless of the amount involved;
motion in its resolution dated July 15, 2004. Hence, this petition. 2. Whether or not the kasunduan could be given the force and
The Petition effect of a final judgment; and
In the present petition for review on certiorari, Michael alleges that the 3. Whether or not the kasunduan can be enforced.
kasunduan cannot be given the force and effect of a final judgment The Courts Ruling
because it did not conform to the provisions of the Katarungang We deny the petition.
Pambarangay law embodied in Book III, Title One, Chapter 7 of R.A. A perusal of the body of the motion for
No. 7160. He points out the following irregularities in the kasunduans execution shows that it is actually in the
execution, and claims that the agreement forged between him and nature of an action for execution; hence, it
Angelita was fictitious and simulated: was a proper remedy;
(1) there was no record of the complaint in the Barangay; We note at the outset that Michael raised in his brief before the CA
(2) there was no notice of mediation sent to him; the issue of wrong remedy. He alleged that Angelitas recourse should
(3) there was no constitution of the Pangkat Ng have been to file a civil action, not a mere motion for execution, in a
Tagapagasundo; regular court. However, the CA failed to address this issue and only
(4) the parties were never called upon to choose the three (3) ruled on the issues of the kasunduans irregularities and the MCTCs
members from among the Lupon members; jurisdiction.
(5) he had no participation in the execution of the kasunduan; A simple reading of Section 417 of the Local Government Code readily
(6) his signature in the kasunduan was forged; discloses the two-tiered mode of enforcement of an amicable
(7) he did not personally appear before the Barangay; settlement. The provision reads:
(8) there was no attestation clause; Section 417. Execution.- The amicable settlement or arbitration award
may be enforced by execution by the lupon within six (6) months from
the date of the settlement. After the lapse of such time, the settlement the prayer for the MCTC to order the execution of the kasunduan; and
may be enforced by action in the appropriate city or municipal court. there was also a verification and certification against forum shopping.
[Emphasis ours.] Furthermore, attached to the motion are: 1) the authenticated special
Under this provision, an amicable settlement or arbitration award that power of attorney of Annabel, authorizing Angelita to file the present
is not repudiated within a period of ten (10) days from the settlement action on her behalf; and 2) the copy of the kasunduan whose contents
may be enforced by: first, execution by the Lupon within six (6) months were quoted in the body of the motion for execution.
from the date of the settlement; or second, by an action in the It is well-settled that what are controlling in determining the nature of
appropriate city or municipal trial court if more than six (6) months the pleading are the allegations in the body and not the caption.14
from the date of settlement has already elapsed. Thus, the motion for execution that Angelita filed was intended to be
Under the first mode of enforcement, the execution of an amicable an initiatory pleading or an original action that is compliant with the
settlement could be done on mere motion of the party entitled thereto requirement under Section 3, Rule 6 of the Rules of Court that the
before the Punong Barangay.10 The proceedings in this case are complaint should allege the plaintiffs cause of action and the names
summary in nature and are governed by the Local Government Code and residences of the plaintiff and the defendant.
and the Katarungang Pambarangay Implementing Rules and Angelitas motion could therefore be treated as an original action, and
Regulations. not merely as a motion/special proceeding. For this reason, Annabel
The second mode of enforcement, on the other hand, is judicial in has filed the proper remedy prescribed under Section 417 of the Local
nature and could only be resortedto through the institution of an Government Code.
action in a regular form before the proper City/Municipal Trial However, Angelita should pay the proper docket fees corresponding to
Court.11 The proceedings shall be governed by the provisions of the the filing of an action for execution. The docket fees shall be computed
Rules of Court. Indisputably, Angelita chose to enforce the kasunduan by the Clerk of Court of the MCTC, with due consideration, of course,
under the second mode and filed a motion for execution, which was of what Angelita had already paid when her motion for execution was
docketed as Special Proceedings No. 45-99. The question for our docketed as a special proceeding.
resolution is: Whether the MCTC, through Angelitas motion for The kasunduan has the force and effect of a final judgment.
execution, is expressly authorized to enforce the kasunduan under Under Section 416 of the Local Government Code, the amicable
Section 417 of the Local Government Code? settlement and arbitration award shall have the force and effect of a
The Court rules in the affirmative. final judgment of a court upon the expiration of ten (10) days from the
It is undisputed that what Angelita filed before the MCTC was date of its execution, unless the settlement or award has been
captioned "motion for execution," rather than a petition/complaint for repudiated or a petition to nullify the award has been filed before the
execution. proper city or municipal court.
A perusal of the motion for execution, however, shows that it contains Moreover, Section 14, Rule VI of the Katarungang Pambarangay
the material requirements of an initiatory action. Implementing Rules states that the partys failure to repudiate the
First, the motion is sufficient in form12 and substance.13 It is complete settlement within the period of ten (10) days shall be deemed a waiver
with allegations of the ultimate facts constituting the cause of action; of the right to challenge the settlement on the ground that his/her
the names and residences of the plaintiff and the defendant; it contains consent was vitiated by fraud, violence or intimidation.
In the present case, the records reveal that Michael never repudiated Laur and Gabaldon, Nueva Ecija, with due consideration of what she
the kasunduan within the period prescribed by the law.1wphi1 Hence, had paid when her motion for execution was docketed as a special
the CA correctly ruled that the kasunduan has the force and effect of a proceeding.
final judgment that is ripe for execution. SO ORDERED.
Furthermore, the irregularities in the kasunduans execution, and the
claim of forgery are deemed waived since Michael never raised these
defenses in accordance with the procedure prescribed under the Local G.R. No. 176492. October 20, 2014.*
Government Code. Thus, we see no reason to discuss these issues in MARIETTA N. BARRIDO, petitioner, vs. LEONARDO V. NONATO,
the present case.
respondent.
The MCTC has the authority and jurisdiction
Civil Law; Property Regimes of Void Marriages; Under this property
to enforce the kasunduan regardless of the amount involved.
The Court also finds that the CA correctly upheld the MCTCs regime, property acquired by both spouses through their work and
jurisdiction to enforce any settlement or arbitration award issued by industry shall be governed by the rules on equal co-ownership. Any
the Lupon. property acquired during the union is prima facie presumed to have
We again draw attention to the provision of Section 417 of the Local been obtained through their joint efforts. A party who did not
Government Code that after the lapse of the six (6) month period from participate in the acquisition of the property shall be considered as
the date of the settlement, the agreement may be enforced by action
having contributed to the same jointly if said partys efforts consisted
in the appropriate city or municipal court.
in the care and maintenance of the family household.The records
The law, as written, unequivocally speaks of the "appropriate city or
municipal court" as the forum for the execution of the settlement or reveal that Nonato and Barridos marriage had been declared void for
arbitration award issued by the Lupon. Notably, in expressly conferring psychological incapacity under Article 36 of the Family Code. During
authority over these courts, Section 417 made no distinction with their marriage, however, the conjugal partnership regime governed
respect to the amount involved or the nature of the issue involved. their property relations. Although Article 129 provides for the
Thus, there can be no question that the laws intendment was to grant procedure in case of dissolution of the conjugal partnership regime,
jurisdiction over the enforcement of settlement/arbitration awards to
Article 147 specifically covers the effects of void marriages on the
the city or municipal courts the regardless of the amount. A basic
principle of interpretation is that words must be given their literal spouses property relations. x x x This particular kind of co-ownership
meaning and applied without attempted interpretation where the applies when a man and a woman, suffering no illegal impediment to
words of a statute are clear, plain and free from ambiguity.15 marry each other, exclusively live together as husband and wife under
WHEREFORE, premises considered, we hereby DENY the petitioner's a void marriage or without the benefit of marriage. It is clear, therefore,
petition for review on certiorari, and AFFIRM the March 31, 2004 that for Article 147 to operate, the man and the woman: (1) must be
Decision of the Court of Appeals in CA-G.R. SP No. 65450.
capacitated to marry each other; (2) live exclusively with each other as
Angelita Lagmay is ORDERED to pay the proper docket fees to be
husband and wife; and (3) their union is without the benefit of
computed by the Clerk of Court of the Municipal Circuit Trial Court of
marriage or their marriage is void. Here, all these elements are present. PERALTA, J.:
The term capacitated in the first paragraph of the provision pertains For the Court's resolution is a Petition for Review filed by petitioner
to the legal capacity of a party to contract marriage. Any impediment Marietta N. Barrido questioning the Decision1 of the Court of Appeals
(CA), dated November 16, 2006, and its Resolution2 dated January 24,
to marry has not been shown to have existed on the part of either
2007 in CA-G.R. SP No. 00235. The CA affirmed the Decision3 of the
Nonato or Barrido. They lived exclusively with each other as husband Regional Trial Court (RTC) ofBacolod City, Branch 53, dated July 21,
and wife. However, their marriage was found to be void under Article 2004, in Civil Case No. 03-12123, which ordered the partition of the
36 of the Family Code on the ground of psychological incapacity. subject property.
Under this property regime, property acquired by both spouses The facts, as culled from the records, are as follows: In the course of
through their work and industry shall be governed by the rules on the marriage of respondent Leonardo V. Nonato and petitioner
Marietta N. Barrido,they were able to acquire a property situated in
equal co-ownership. Any property acquired during the union is prima
Eroreco, Bacolod City, consisting ofa house and lot, covered by
facie presumed to have been obtained through their joint efforts. A
Transfer Certificate of Title (TCT) No. T-140361. On March 15, 1996,
party who did not participate in the acquisition of the property shall be their marriage was declared void on the ground of psychological
considered as having contributed to the same jointly if said partys incapacity. Since there was no more reason to maintain their co-
efforts consisted in the care and maintenance of the family household. ownership over the property, Nonato asked Barrido for partition, but
Efforts in the care and maintenance of the family and household are the latter refused. Thus, on January 29, 2003, Nonato filed a Complaint
regarded as contributions to the acquisition of common property by for partition before the Municipal Trial Court in Cities (MTCC) of
Bacolod City, Branch 3.
one who has no salary or income or work or industry.
Barrido claimed, by way of affirmative defense, that the subject
property had already been sold to their children, Joseph Raymund and
Remedial Law; Evidence; Documentary Evidence; Private Documents; Joseph Leo. She likewise moved for the dismissal of the complaint
Without the notarial seal, a document remains to be private and because the MTCC lacked jurisdiction, the partition case being an
cannot be converted into a public document, making it inadmissible in action incapable of pecuniary estimation.
evidence unless properly authenticated.It must be noted that The Bacolod MTCC rendered a Decision dated September 17, 2003,
without the notarial seal, a document remains to be private and cannot applying Article 129 of the Family Code. It ruled in this wise:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered,
be converted into a public document, making it inadmissible in
ordering the conjugal property of the former Spouses Leonardo and
evidence unless properly authenticated. Unfortunately, Barrido failed to Marietta Nonato, a house and lot covered by TCT No. T-140361
prove its due execution and authenticity. In fact, she merely annexed located at Eroreco, Bacolod City, which was their conjugal dwelling,
said Deed of Sale to her position paper. Therefore, the subject property adjudicated to the defendant Marietta Nonato, the spouse with whom
remains to be owned in common by Nonato and Barrido, which should the majority of the common children choose to remain.
be divided in accordance with the rules on co-ownership. Furthermore, defendants counterclaim is hereby granted, ordering
plaintiff to pay defendant P10,000.00 as moral damages for the mental
anguish and unnecessary inconvenience brought about by this suit; II.
and an additional P10,000.00 as exemplary damages to deter others THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE
from following suit; and attorneys fees of P2,000.00 and litigation LOT COVERED BY TCT NO. T-140361 IS CONJUGAL AFTER BEING SOLD
expenses of P575.00. TO THE CHILDREN, JOSEPH LEO NONATO AND JOSEPH RAYMUND
SO ORDERED.4 NONATO.
Nonato appealed the MTCC Decision before the RTC. On July 21, 2004, III.
the Bacolod RTC reversed the ruling of the MTCC. It found that even THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT
though the MTCC aptly applied Article 129 of the Family Code, it ARTICLE 129 OF THE FAMILY CODE HAS NO APPLICATION IN THE
nevertheless made a reversible error in adjudicating the subject PRESENT CASE, ON THE ASSUMPTION
property to Barrido. Its dispositive portion reads: THAT THE TRIAL COURT HAD JURISDICTION OVER THE CASE.6
WHEREFORE, premises considered, the decision dated September 17, The petition lacks merit.
2003 is hereby REVERSED and SET ASIDE and a new judgment is Contrary to Barridos contention, the MTCC has jurisdiction to take
hereby rendered ordering the parties: cognizance of real actions or those affecting title to real property, or
(1) to equitably partition the house and lot covered by TCT No. for the recovery of possession, or for the partition or condemnation of,
T-140361; or foreclosure of a mortgage on real property.7 Section 33 of Batas
(2) to reimburse Joseph Raymund and Joseph Leo Nonato of Pambansa Bilang 1298 provides:
the amount advanced by them in payment of the debts and Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial
obligation of TCT No. T-140361 with Philippine National Bank; Courts and Municipal Circuit Trial Courts in civil cases. Metropolitan
(3) to deliver the presumptive legitimes of Joseph Raymund Trial Courts, Municipal Trial Courts, and Municipal Circuit
and Joseph Leo Nonato pursuant to Article 51 of the Family Trial Courts shall exercise:
Code. xxxx
SO ORDERED.5 (3) Exclusive original jurisdiction in all civil actions which involve title to,
Upon appeal, the CA affirmed the RTC Decision on November 16, 2006. or possession of, real property, or any interest therein where the
It held that since the propertys assessed value was only P8,080.00, it assessed value of the propertyor interest therein does not exceed
clearly fell within the MTCCs jurisdiction. Also, although the RTC erred Twenty thousand pesos (P20,000.00)or, in civil actions in Metro Manila,
in relying on Article 129 of the FamilyCode, instead of Article 147, the where such assessed value does not exceed Fifty thousand pesos
dispositive portion of its decision still correctly ordered the equitable (P50,000.00) exclusive of interest, damages of whatever kind, attorney's
partition of the property. Barrido filed a Motion for Reconsideration, fees, litigation expenses and costs: Provided, That value of such
which was, however, denied for lack of merit. property shall be determined by the assessed value of the adjacent
Hence, Barrido brought the case to the Court via a Petition for Review. lots. (as amended by R.A. No. 7691)9
She assigned the following errors in the CA Decision: Here, the subject propertys assessed value was merely P8,080.00, an
I. amount which certainly does not exceed the required limit
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE of P20,000.00 for civil actions outside Metro Manila tofall within the
MTCC HAD JURISDICTION TO TRY THE PRESENT CASE.
jurisdiction of the MTCC. Therefore, the lower court correctly took all cases, the forfeiture shall take place upon termination of the
cognizance of the instant case. cohabitation.
The records reveal that Nonatoand Barridos marriage had been This particular kind of co-ownership applies when a man and a woman,
declared void for psychological incapacity under Article 3610 of the suffering no illegal impedimentto marry each other, exclusively live
Family Code. During their marriage, however, the conjugal partnership together as husband and wife under a void marriage or without the
regime governed their property relations. Although Article benefit of marriage.12 It is clear, therefore, that for Article 147 to
12911 provides for the operate, the man and the woman: (1) must be capacitated to marry
procedure in case of dissolution of the conjugal partnership regime, each other; (2) live exclusively with each other as husband and wife;
Article 147 specifically covers the effects of void marriages on the and (3) their union is without the benefit of marriage or their marriage
spouses property relations. Article 147 reads: is void. Here, all these elements are present.13 The term "capacitated"
Art. 147. When a man and a woman who are capacitated to marry each inthe first paragraph of the provision pertains to the legal capacity of a
other, live exclusively with each other as husband and wife without the party to contract marriage.14 Any impediment to marry has not been
benefit of marriage or under a void marriage, their wages and salaries shown to have existed on the part of either Nonato or Barrido. They
shall be owned by them in equal shares and the property acquired by lived exclusively with each other as husband and wife. However, their
both of them through their work or industry shall be governed by the marriage was found to be void under Article 36 of the Family Code on
rules on co-ownership. the ground of psychological incapacity.15
In the absence of proof to the contrary, properties acquired while they Under this property regime, property acquired by both spouses
lived together shall be presumed tohave been obtained by their joint through their work and industry shall be governed by the rules on
efforts, work or industry, and shall beowned by them in equal shares. equal coownership. Any property acquired during the union is prima
For purposes of this Article, a party who did not participate in the faciepresumed to have been obtained through their joint efforts. A
acquisition by the other party of any property shall be deemed to have party who did not participate in the acquisition of the property shall be
contributed jointly in the acquisition thereof if the former's efforts considered as having contributed to the same jointly if said party's
consisted in the care and maintenance of the family and of the efforts consisted in the care and maintenance of the family
household. household.16 Efforts in the care and maintenance of the family and
Neither party can encumber or dispose by acts inter vivos of his or her household are regarded as contributions to the acquisition of common
share in the property acquired during cohabitation and owned in property by one who has no salary or income or work or industry.17
common, without the consent of the other, until after the termination In the analogous case of Valdez,18 it was likewise averred that the trial
of their cohabitation. court failed to apply the correct law that should govern the disposition
When only one of the parties to a void marriage is in good faith, the of a family dwelling in a situation where a marriage is declared void ab
share of the party in bad faith in the co-ownership shall be forfeited in initiobecause of psychological incapacity on the part of either or both
favor of their common children. In case of default of or waiver by any parties in the contract of marriage.The Court held that the court a
or all of the common children or their descendants, each vacant share quodid not commit a reversible error in utilizing Article 147 of the
shall belong to the respective surviving descendants. In the absence of Family Code and in ruling that the former spouses own the family
descendants, such share shall belong to the innocent party.1wphi1 In home and all their common property in equal shares, as well as in
concluding that, in the liquidation and partition of the property that G.R. No. 138896. June 20, 2000.*
they owned in common, the provisions on coownership under the Civil BARANGAY SAN ROQUE, TALISAY, CEBU, petitioner, vs. Heirs of
Code should aptly prevail.19 The rules which are set up to govern the FRANCISCO PASTOR, namely: EUGENIO SYLIANCO, TEODORO
liquidation of either the absolute community or the conjugal SYLIANCO, ISABEL SYLIANCO, EUGENIA S. ONG, LAWRENCE
partnership of gains, the property regimes recognized for valid and SYLIANCO, LAWSON SYLIANCO, LAWINA S. NOTARIO, LEONARDO
voidable marriages, are irrelevant to the liquidation of the co- SYLIANCO, JR. and LAWFORD SYLIANCO, respondents.
ownership that exists between common-law spousesor spouses of void
Actions; Eminent Domain; Expropriation; Jurisdiction; Courts; An
marriages.20
Here, the former spouses both agree that they acquired the subject expropriation suit is incapable of pecuniary estimation, and falls within
property during the subsistence of their marriage. Thus, it shall be the jurisdiction of the Regional Trial Courts.We agree with the
presumed to have been obtained by their joint efforts, work or petitioner that an expropriation suit is incapable of pecuniary
industry, and shall be jointly owned by them in equal shares. Barrido, estimation. The test to determine whether it is so was laid down by the
however, claims that the ownership over the property in question is Court in this wise: A review of the jurisprudence of this Court indicates
already vested on their children, by virtue of a Deed of Sale. But aside
that in determining whether an action is one the subject matter of
from the title to the property still being registered in the names of the
which is not capable of pecuniary estimation, this Court has adopted
former spouses, said document of safe does not bear a notarization of
a notary public. It must be noted that without the notarial seal, a the criterion of first ascertaining the nature of the principal action or
document remains to be private and cannot be converted into a public remedy sought. If it is primarily for the recovery of a sum of money, the
document,21 making it inadmissible in evidence unless properly claim is considered capable of pecuniary estimation, and whether
authenticated.22 Unfortunately, Barrido failed to prove its due jurisdiction is in the municipal courts or in the courts of first instance
execution and authenticity. In fact, she merely annexed said Deed of would depend on the amount of the claim. However, where the basic
Sale to her position paper. Therefore, the subject property remains to
issue is something other than the right to recover a sum of money, or
be owned in common by Nonato and Barrido, which should be divided
where the money claim is purely incidental to, or a consequence of, the
in accordance with the rules on co-ownership.
WHEREFORE, premises considered, the petition is DENIED. The principal relief sought, like in suits to have the defendant perform his
Decision of the Court of Appeals, dated November 16, 2006, as well as part of the contract (specific performance) and in actions for support,
its Resolution dated January 24, 2007 in CA-G.R. SP No. 00235, are or for annulment of a judgment or to foreclose a mortgage, this Court
hereby AFFIRMED. has considered such actions as cases where the subject of the litigation
SO ORDERED. may not be estimated in terms of money, and are cognizable
exclusively by courts of first instance. The rationale of the rule is plainly
that the second class cases, besides the determination of damages,
demand an inquiry into other factors which the law has deemed to be
more within the competence of courts of first instance, which were the
lowest courts of record at the time that the first organic laws of the too. It would finally dispose of the second stage of the suit, and leave
Judiciary were enacted allocating jurisdiction (Act 136 of the Philippine nothing more to be done by the Court regarding the issue, x x x
Commission of June 11, 1901).
Same; Same; Same; It should be stressed that the primary
Same; Same; Same; Two Phases of Expropriation Proceedings.In the consideration in an expropriation suit is whether the government or
present case, an expropriation suit does not involve the recovery of a any of its instrumentalities has complied with the requisites for the
sum of money. Rather, it deals with the exercise by the government of taking of private property.It should be stressed that the primary
its authority and right to take private property for public use. In consideration in an expropriation suit is whether the government or
National Power Corporation v. Jocson, the Court ruled that any of its instrumentalities has complied with the requisites for the
expropriation proceedings have two phases: The first is concerned taking of private property. Hence, the courts determine the authority of
with the determination of the authority of the plaintiff to exercise the the government entity, the necessity of the expropriation, and the
power of eminent domain and the propriety of its exercise in the observance of due process. In the main, the subject of an expropriation
context of the facts involved in the suit. It ends with an order, if not of suit is the governments exercise of eminent domain, a matter that is
dismissal of the action, of condemnation declaring that the plaintiff incapable of pecuniary estimation.
has a lawful right to take the property sought to be condemned, for
the public use or purpose described in the complaint, upon the PANGANIBAN, J.:
An expropriation suit is incapable of pecuniary estimation. Accordingly,
payment of just compensation to be determined as of the date of the
it falls within the jurisdiction of the regional trial courts, regardless of
filing of the complaint. An order of dismissal, if this be ordained,
the value of the subject property.
would be a final one, of course, since it finally disposes of the action The Case
and leaves nothing more to be done by the Court on the merits. So, Before us is a Petition for Review on Certiorari assailing the March 29,
too, would an order of condemnation be a final one, for thereafter as 1999 Order1 of the Regional Trial Court (RTC) of Cebu City (Branch 58)
the Rules expressly state, in the proceedings before the Trial Court, no in Civil Case No. CEB-21978, in which it dismissed a Complaint for
objection to the exercise of the right of condemnation (or the propriety eminent domain. It ruled as follows:
Premises considered, the motion to dismiss is hereby granted on the
thereof) shall be filed or heard. The second phase of the eminent
ground that this Court has no jurisdiction over the case. Accordingly,
domain action is concerned with the determination by the court of the
the Orders dated February 19, 1999 and February 26, 1999, as well as
just compensation for the property sought to be taken. This is done by the Writ of Possession issued by virtue of the latter Order are hereby
the Court with the assistance of not more than three (3) recalled for being without force and effect.2
commissioners. The order fixing the just compensation on the basis of Petitioner also challenges the May 14, 1999 Order of the RTC denying
the evidence before, and findings of, the commissioners would be final, reconsideration.
The Facts
Petitioner filed before the Municipal Trial Court (MTC) of Talisay, Cebu retired Justice Jose Y. Feria, thus, "Real actions are those affecting title
(Branch 1)3 a Complaint to expropriate a property of the respondents. to or possession of real property. These include partition or
In an Order dated April 8, 1997, the MTC dismissed the Complaint on condemnation of, or foreclosures of mortgage on, real property. . . ."5
the ground of lack of jurisdiction. It reasoned that "[e]minent domain is Aggrieved, petitioner appealed directly to this Court, raising a pure
an exercise of the power to take private property for public use after question of law.6 In a Resolution dated July 28, 1999, the Court denied
payment of just compensation. In an action for eminent domain, the Petition for Review "for being posted out of time on July 2, 1999,
therefore, the principal cause of action is the exercise of such power or the due date being June 2, 1999, as the motion for extension of time to
right. The fact that the action also involves real property is merely file petition was denied in the resolution of July 14, 1999."7 In a
incidental. An action for eminent domain is therefore within the subsequent Resolution dated October 6, 1999, the Court reinstated the
exclusive original jurisdiction of the Regional Trial Court and not with Petition.8
this Court."4 Issue
Assailed RTC Ruling In its Memorandum, petitioner submits this sole issue for the
The RTC also dismissed the Complaint when filed before it, holding consideration of this Court:
that an action for eminent domain affected title to real property; Which court, MTC or RTC, has jurisdiction over cases for eminent
hence, the value of the property to be expropriated would determine domain or expropriation where the assessed value of the subject
whether the case should be filed before the MTC or the RTC. property is below Twenty Thousand (P20,000.00) Pesos?9
Concluding that the action should have been filed before the MTC This Court's Ruling
since the value of the subject property was less than P20,000, the RTC The Petition is meritorious.
ratiocinated in this wise: Main Issue:
The instant action is for eminent domain. It appears from the current Jurisdiction over an Expropriation Suit
Tax Declaration of the land involved that its assessed value is only One In support of its appeal, petitioner cites Section 19 (1) of BP 129, which
Thousand Seven Hundred Forty Pesos (P1,740.00). Pursuant to Section provides that RTCs shall exercise exclusive original jurisdiction over "all
3, paragraph (3), of Republic Act No. 7691, all civil actions involving civil actions in which the subject of the litigation is incapable of
title to, or possession of, real property with an assessed value of less pecuniary estimation; . . . . ." It argues that the present action involves
than P20,000.00 are within the exclusive original jurisdiction of the the exercise of the right to eminent domain, and that such right is
Municipal Trial Courts. In the case at bar, it is within the exclusive incapable of pecuniary estimation.
original jurisdiction of the Municipal Trial Court of Talisay, Cebu, where Respondents, on the other hand, contend that the Complaint for
the property involved is located. Eminent Domain affects the title to or possession of real property.
The instant action for eminent domain or condemnation of real Thus, they argue that the case should have been brought before the
property is a real action affecting title to or possession of real property, MTC, pursuant to BP 129 as amended by Section 3 (3) of RA 7691. This
hence, it is the assessed value of the property involved which law provides that MTCs shall have exclusive original jurisdiction over all
determines the jurisdiction of the court. That the right of eminent civil actions that involve title to or possession of real property, the
domain or condemnation of real, property is included in a real action assessed value of which does not exceed twenty thousand pesos or, in
affecting title to or possession of real property, is pronounced by civil actions in Metro Manila, fifty thousand pesos exclusive of interest,
damages of whatever kind, attorney's fees, litigation expenses and public use. 11 In National Power Corporation v. Jocson, 12 the Court
costs. ruled that expropriation proceedings have two phases:
We agree with the petitioner that an expropriation suit is incapable of The first is concerned with the determination of the authority of
pecuniary estimation. The test to determine whether it is so was laid the plaintiff to exercise the power of eminent domain and the
down by the Court in this wise: propriety of its exercise in the context of the facts involved in
A review of the jurisprudence of this Court indicates that in the suit. It ends with an order, if not of dismissal of the action,
determining whether an action is one the subject matter of "of condemnation declaring that the plaintiff has a lawful right
which is not capable of pecuniary estimation, this Court has to take the property sought to be condemned, for the public
adopted the criterion of first ascertaining the nature of the use or purpose described in the complaint, upon the payment
principal action or remedy sought. If it is primarily for the of just compensation to be determined as of the date of the
recovery of a sum of money, the claim is considered capable of filing of the complaint." An order of dismissal, if this be
pecuniary estimation, and whether jurisdiction is in the ordained, would be a final one, of course, since it finally
municipal courts or in the courts of first instance would depend disposes of the action and leaves nothing more to be done by
on the amount of the claim. However, where the basic issue is the Court on the merits. So, too, would an order of
something other than the right to recover a sum of money, or condemnation be a final one, for thereafter as the Rules
where the money claim is purely incidental to, or a expressly state, in the proceedings before the Trial Court, "no
consequence of, the principal relief sought, like in suits to have objection to the exercise of the right of condemnation (or the
the defendant perform his part of the contract (specific propriety thereof) shall be filed or heard."
performance) and in actions for support, or for annulment of a The second phase of the eminent domain action is concerned
judgment or to foreclose a mortgage, this Court has considered with the determination by the court of "the just compensation
such actions as cases where the subject of the litigation may for the property sought to be taken." This is done by the Court
not be estimated in terms of money, and are cognizable with the assistance of not more than three (3) commissioners.
exclusively by courts of first instance. The rationale of the rule is The order fixing the just compensation on the basis of the
plainly that the second class cases, besides the determination evidence before, and findings of, the commissioners would be
of damages, demand an inquiry into other factors which the law final, too. It would finally dispose of the second stage of the
has deemed to be more within the competence of courts of suit, and leave nothing more to be done by the Court regarding
first instance, which were the lowest courts of record at the the issue. . . .
time that the first organic laws of the Judiciary were enacted It should be stressed that the primary consideration in an expropriation
allocating jurisdiction (Act 136 of the Philippine Commission of suit is whether the government or any of its instrumentalities has
June 11, 1901). 10 complied with the requisites for the taking of private property. Hence,
In the present case, an expropriation suit does not involve the recovery the courts determine the authority of the government entity, the
of a sum of money. Rather, it deals with the exercise by the necessity of the expropriation, and the observance of due process. 1 In
government of its authority and right to take private property for the main, the subject of an expropriation suit is the government's
exercise of eminent domain, a matter that is incapable of pecuniary "appropriate and control individual property for the public benefit, as
estimation. the public necessity, convenience or welfare may demand." 17
True, the value of the property to be expropriated is estimated in WHEREFORE, the Petition is hereby GRANTED and the assailed Orders
monetary terms, for the court is duty-bound to determine the just SET ASIDE. The Regional Trial Court is directed to HEAR the case. No
compensation for it.1avvphi1 This, however, is merely incidental to the costs.
expropriation suit. Indeed, that amount is determined only after the SO ORDERED.
court is satisfied with the propriety of the expropriation.
Verily, the Court held in Republic of the Philippines v. Zurbano that G.R. No. 202664. November 10, 2015.*
"condemnation proceedings are within the jurisdiction of Courts of MANUEL LUIS C. GONZALES and FRANCIS MARTIN D. GONZALES,
First Instance," 14 the forerunners of the regional trial courts. The said petitioners, vs. GJH LAND, INC. (formerly known as S.J. LAND,
case was decided during the effectivity of the Judiciary Act of 1948 INC.), CHANG HWAN JANG a.k.a. STEVE JANG, SANG RAK KIM,
which, like BP 129 in respect to RTCs, provided that courts of first
MARIECHU N. YAP, and ATTY. ROBERTO P. MALLARI II,
instance had original jurisdiction over "all civil actions in which the
respondents.
subject of the litigation is not capable of pecuniary estimation." 15 The
1997 amendments to the Rules of Court were not intended to change Mercantile Law; Corporations; Intra-Corporate Controversies; Special
these jurisprudential precedents. Commercial Courts; Jurisdiction; Applying the relationship test and the
We are not persuaded by respondents' argument that the present nature of the controversy test, the suit between the parties is clearly
action involves the title to or possession of a parcel of land. They cite rooted in the existence of an intra-corporate relationship and pertains
the observation of retired Justice Jose Y. Feria, an eminent authority in to the enforcement of their correlative rights and obligations under the
remedial law, that condemnation or expropriation proceedings are
Corporation Code and the internal and intra-corporate regulatory rules
examples of real actions that affect the title to or possession of a parcel
of the corporation, hence, intra-corporate, which should be heard by
of land. 16
Their reliance is misplaced. Justice Feria sought merely to distinguish the designated Special Commercial Court as provided under A.M. No.
between real and personal actions. His discussion on this point 03-03-03-SC dated June 17, 2003 in relation to Item 5.2, Section 5 of
pertained to the nature of actions, not to the jurisdiction of courts. In Republic Act (RA) No. 8799.Applying the relationship test and the
fact, in his pre-bar lectures, he emphasizes that jurisdiction over nature of the controversy test, the suit between the parties is clearly
eminent domain cases is still within the RTCs under the 1997 Rules. rooted in the existence of an intra-corporate relationship and pertains
To emphasize, the question in the present suit is whether the
to the enforcement of their correlative rights and obligations under the
government may expropriate private property under the given set of
Corporation Code and the internal and intra-corporate regulatory rules
circumstances. The government does not dispute respondents' title to
or possession of the same. Indeed, it is not a question of who has a of the corporation, hence, intra-corporate, which should be heard by
better title or right, for the government does not even claim that it has the designated Special Commercial Court as provided under A.M. No.
a title to the property. It merely asserts its inherent sovereign power to 03-03-03-SC dated June 17, 2003 in relation to Item 5.2, Section 5 of
RA 8799.
Same; Same; Same; Same; By virtue of Republic Act (RA) No. 8799, on January 23, 2001, the Court issued SC Administrative Circular No.
jurisdiction over cases enumerated in Section 5 of Presidential Decree 08-2001 directing the transfer of said cases to the designated courts
(PD) No. 902-A was transferred from the Securities and Exchange (commercial SEC courts). Later, or on June 17, 2003, the Court issued
Commission (SEC) to the Regional Trial Courts (RTCs), being courts of A.M. No. 03-03-03-SC consolidating the commercial SEC courts and
general jurisdiction.As a basic premise, let it be emphasized that a the intellectual property courts in one RTC branch in a particular
courts acquisition of jurisdiction over a particular cases subject matter locality, i.e., the Special Commercial Court, to streamline the court
is different from incidents pertaining to the exercise of its jurisdiction. structure and to promote expediency. Accordingly, the RTC branch so
Jurisdiction over the subject matter of a case is conferred by law, designated was mandated to try and decide SEC cases, as well as those
whereas a courts exercise of jurisdiction, unless provided by the law involving violations of intellectual property rights, which were,
itself, is governed by the Rules of Court or by the orders issued from thereupon, required to be filed in the Office of the Clerk of Court in the
time to time by the Court. In Lozada v. Bracewell, 720 SCRA 371 (2014), official station of the designated Special Commercial Courts.
it was recently held that the matter of whether the RTC resolves an
issue in the exercise of its general jurisdiction or of its limited Actions; Pleadings and Practice; So as to avert any future confusion, the
jurisdiction as a special court is only a matter of procedure and has Supreme Court (SC) requires henceforth, that all initiatory pleadings
nothing to do with the question of jurisdiction. Pertinent to this case is state the actions nature both in its caption and the body.According
RA 8799 which took effect on August 8, 2000. By virtue of said law, to jurisprudence, it is not the caption but the allegations in the
jurisdiction over cases enumerated in Section 5 of Presidential Decree complaint or other initiatory pleading which give meaning to the
No. 902-A was transferred from the Securities and Exchange pleading and on the basis of which such pleading may be legally
Commission (SEC) to the RTCs, being courts of general jurisdiction. characterized. However, so as to avert any future confusion, the Court
requires henceforth, that all initiatory pleadings state the actions
Same; Same; Same; Same; On June 17, 2003, the Supreme Court (SC) nature both in its caption and the body, which parameters are defined
issued A.M. No. 03-03-03-SC consolidating the commercial Securities in the dispositive portion of this Decision.
and Exchange Commission (SEC) courts and the intellectual property
courts in one (1) Regional Trial Court (RTC) branch in a particular Raffle of Cases; Regional Trial Courts; Special Commercial Courts; The
locality, i.e., the Special Commercial Court, to streamline the court erroneous raffling to a regular branch instead of to a Special
structure and to promote expediency.It was only on November 21, Commercial Court is only a matter of procedure that is, an incident
2000 that the Court designated certain RTC branches to try and decide related to the exercise of jurisdiction and, thus, should not negate
said SEC cases without, however, providing for the transfer of the cases the jurisdiction which the Regional Trial Court (RTC) of Muntinlupa City
already distributed to or filed with the regular branches thereof. Thus, had already acquired. In such a scenario, the proper course of action
was not for the commercial case to be dismissed; instead, Branch 276 has only one branch designated as a Special Commercial Court, assign
should have first referred the case to the Executive Judge for re- the case to the sole special branch; or (b) if the said RTC has multiple
docketing as a commercial case; thereafter, the Executive Judge should branches designated as Special Commercial Courts, raffle off the case
then assign said case to the only designated Special Commercial Court among those special branches.
in the station, i.e., Branch 256.The Court nonetheless deems that the
erroneous raffling to a regular branch instead of to a Special Same; Same; Same; Jurisdiction; The designation of Special Commercial
Commercial Court is only a matter of procedure that is, an incident Courts was merely intended as a procedural tool to expedite the
related to the exercise of jurisdiction and, thus, should not negate resolution of commercial cases in line with the courts exercise of
the jurisdiction which the RTC of Muntinlupa City had already acquired. jurisdiction.The Court finds it apt to point out that the same
In such a scenario, the proper course of action was not for the principles apply to the inverse situation of ordinary civil cases filed
commercial case to be dismissed; instead, Branch 276 should have first before the proper RTCs but wrongly raffled to its branches designated
referred the case to the Executive Judge for re-docketing as a as Special Commercial Courts. In such a scenario, the ordinary civil case
commercial case; thereafter, the Executive Judge should then assign should then be referred to the Executive Judge for re-docketing as an
said case to the only designated Special Commercial Court in the ordinary civil case; thereafter, the Executive Judge should then order
station, i.e., Branch 256. Note that the procedure would be different the raffling of the case to all branches of the same RTC, subject to
where the RTC acquiring jurisdiction over the case has multiple special limitations under existing internal rules, and the payment of the correct
commercial court branches; in such a scenario, the Executive Judge, docket fees in case of any difference. Unlike the limited
after re-docketing the same as a commercial case, should proceed to assignment/raffling of a commercial case only to branches designated
order its re-raffling among the said special branches. as Special Commercial Courts in the scenarios stated above, the re-
raffling of an ordinary civil case in this instance to all courts is
Same; Same; Same; If the Regional Trial Court (RTC) acquiring permissible due to the fact that a particular branch which has been
jurisdiction has no branch designated as a Special Commercial Court, designated as a Special Commercial Court does not shed the RTCs
then it should refer the case to the nearest RTC with a designated general jurisdiction over ordinary civil cases under the imprimatur of
Special Commercial Court branch within the judicial region.If the RTC statutory law, i.e., Batas Pambansa Bilang (BP) 129. To restate, the
acquiring jurisdiction has no branch designated as a Special designation of Special Commercial Courts was merely intended as a
Commercial Court, then it should refer the case to the nearest RTC with procedural tool to expedite the resolution of commercial cases in line
a designated Special Commercial Court branch within the judicial with the courts exercise of jurisdiction. This designation was not made
region. Upon referral, the RTC to which the case was referred to should by statute but only by an internal Supreme Court rule under its
re-docket the case as a commercial case, and then: (a) if the said RTC authority to promulgate rules governing matters of procedure and its
constitutional mandate to supervise the administration of all courts Remedial Law; Civil Procedure; Regional Trial Courts; Jurisdiction; View
and the personnel thereof. Certainly, an internal rule promulgated by that Section 5, Item 5.2 of Republic Act (RA) No. 8799 did not transfer
the Court cannot go beyond the commanding statute. But as a more the cases enumerated under Section 5 of Presidential Decree (PD) No.
fundamental reason, the designation of Special Commercial Courts is, 902-A to all the Regional Trial Courts (RTCs).Section 5, Item 5.2 of
to stress, merely an incident related to the courts exercise of R.A. No. 8799 did not transfer the cases enumerated under Section 5 of
jurisdiction, which, as first discussed, is distinct from the concept of P.D. No. 902-A to all the RTCs. If that was the legislative intention, then
jurisdiction over the subject matter. The RTCs general jurisdiction over the provision should have simply stated that such cases are hereby
ordinary civil cases is therefore not abdicated by an internal rule transferred to the Regional Trial Courts. The complete investiture is,
streamlining court procedure. however, on the courts of general jurisdiction or the appropriate
Regional Trial Court: Provided, that the Supreme Court, in the exercise
PEREZ, J., Dissenting Opinion: of its authority may designate the Regional Trial Court branches that
shall exercise jurisdiction over the cases. If the law is a general
Remedial Law; Civil Procedure; Regional Trial Courts; Jurisdictions; View conferment of jurisdiction on all RTC, then the phrase or the
that the ponencia proceeds from the wrong premise that the law appropriate Regional Trial Court is an inutile surplusage and the
vested jurisdiction over transferred Securities and Exchange proviso that the Supreme Court in the exercise of its authority may
Commission (SEC) cases on all the Regional Trial Courts (RTCs) and that designate the Regional Trial Court branches that shall exercise
the designation by the Supreme Court (SC) of Special Commercial jurisdiction over the cases is a purposeless appendage and wasted
Courts concern only an exercise of jurisdiction.With all due respect, words. A general grant to all RTCs renders irrelevant the Supreme
the ponencia proceeds from the wrong premise that the law vested Courts exercise of authority on the matter. Such a general grant
jurisdiction over transferred SEC cases on all the Regional Trial Courts renders meaningless the designation by the Supreme Court of the RTC
and that the designation by the Supreme Court of Special Commercial branches that shall exercise jurisdiction over the cases.
Courts concern only an exercise of jurisdiction. Same; Same; Same; Same; View that Section 5, Item 5.2 of Republic Act
Statutory Construction; View that it is first axiom in legal hermeneutics (RA) No. 8799 should therefore be read to mean that Securities and
that a statutory provision is read as a whole and not in disjointed Exchange Commissions (SECs) jurisdiction over all cases under Section
parts.It is first axiom in legal hermeneutics that a statutory provision 5 of Presidential Decree (PD) No. 902-A is transferred to the specific
is read as a whole and not in disjointed parts. The rule is as respected Regional Trial Court (RTC) branch designated by the Supreme Court
as it is ancient. Its sum and substance has not been diluted no matter (SC) in the exercise of its authority.Section 5, Item 5.2 of R.A. No.
how frequent the free paraphrases have been. 8799 should therefore be read to mean that SECs jurisdiction over all
cases under Section 5 of P.D. No. 902-A is transferred to the specific
RTC branch designated by the Supreme Court in the exercise of its can still exercise jurisdiction over regular cases if, as determined by the
authority. This is the reading of the Supreme Court as expressed with Supreme Court (SC), the caseloads necessitate such exercise.
precision in A.M. No. 00-11-03-SC dated 21 November 2000 which is Palpably, RTC caseloads and the need to equalize the caseloads among
aptly titled Resolution Designating Certain Branches of Regional Trial all branches determine the need for the Court to issue regulations
Courts To Try and Decide Cases Formerly Cognizable by the Securities regarding the Commercial Courts exercise of jurisdiction over
and Exchange Commission arising within their respective territorial non-commercial cases. In all, the RTC Commercial Court has exclusive
jurisdictions with respect to the National Capital Region and within the jurisdiction over commercial cases and can still exercise jurisdiction
respective provinces in the First to the Twelfth Judicial Regions. This over regular cases if, as determined by the Supreme Court, the
En Banc Resolution opened with a purpose clause reading to caseloads necessitate such exercise. While there may be arguments in
implement the provisions of Sec. 5.2 of Republic Act No. 8799 (The favor of a simpler arrangement whereby all the RTCs in all the Judicial
Securities Regulation Code). This is an unequivocal statement that the Districts are made Commercial Courts, such arguments cannot be
Court interprets the provision to mean that only the RTC Branches that submitted for resolution by the Court. The settlement is in the
it shall designate to hear and decide Special Commercial Court cases legislature.
can exercise jurisdiction over such cases. Same; Same; Same; Same; View that the designation of Special
Same; Same; Same; Same; View that absent such jurisdiction, the non- Commercial Courts, as implemented by the Supreme Court (SC)
Securities and Exchange Commission (SEC) Regional Trial Court (RTC) through its various rules, pertains to the statutorily conferred
cannot direct the case to the proper court.There has been, as just jurisdiction and not merely an incident related to the courts exercise of
enumerated, as many iterations by the court itself of its reading of jurisdiction.Plainly, the designation of Special Commercial Courts, as
Section 5, Item 5.2 of R.A. No. 8799 i.e., that the law transferred the SEC implemented by the Supreme Court through its various rules, pertains
jurisdiction over the cases listed in Sec. 5 of P.D. No. 902-A to the to the statutorily conferred jurisdiction and not merely an incident
particular branches of the RTCs designated by the Supreme Court as related to the courts exercise of jurisdiction. The ponencia fails to
such. Unavoidable, therefore, is the conclusion that all other Branches address an equally important precept on subject matter jurisdiction,
of the RTCs without the Supreme Court designation are without i.e., jurisdiction is determined by the averments and allegations of the
jurisdiction over SEC cases. And following unreversed rulings the other complaint which in this instance is inarguably a commercial case
Branches of the RTC before whom a SEC case is filed must dismiss such concerning subscription of shares in a corporation. From the onset,
case for want of jurisdiction. Furthermore, absent such jurisdiction, the petitioners, by the filing of their Complaint, supplied the occasion for
non-SEC RTC cannot direct the case to the proper court. the exercise of jurisdiction vested by law in a particular court. In short,
Same; Same; Same; Same; View that the Regional Trial Court (RTC) petitioners invoked the jurisdiction of the RTC (not as a court of
Commercial Court has exclusive jurisdiction over commercial cases and general jurisdiction), and with the allegations in their Complaint,
specifically invoked the RTC designated as a Special Commercial Court Same; Same; Same; Same; View that courts should not themselves
under Section 5.2 of R.A. No. 8799, implemented under A.M. No. 03- correct the procedural mistakes of pleaders.Indeed, We should, as
03-03-SC. Petitioners cannot just simply file their Complaint before the warranted, require from counsels disciplined knowledge of procedure.
RTC without any specificity, given the allegations contained therein and Courts should not themselves correct the procedural mistakes of
the reliefs they prayed for. pleaders. I cannot overemphasize, and ultimately revert to the fact, that
Same; Same; Same; Same; View that Branch 276 of the Regional Trial subject matter jurisdiction was conferred by law (Section 5.2 of R.A. No.
Court (RTC), to which the Complaint was consequently raffled, in the 8799) to the appropriate RTC as determined thru the designation by
exercise of its general jurisdiction, cannot order the transfer of the the Supreme Court.
Complaint to Branch 256, the designated Special Commercial Court.
Branch 276 cannot do so on the basis of authority over the case which LEONEN, J., Concurring Opinion:
it did not have. Neither does it have authority over a coequal court.
With the incorrect labeling of their Complaint and the wrong Remedial Law; Civil Procedure; Regional Trial Courts; Jurisdiction; View
invocation of the RTCs regular jurisdiction, the designated Special that the designation of certain Regional Trial Court (RTC) branches as
Commercial Court did not acquire jurisdiction over the Complaint by Special Commercial Courts does not work to confer jurisdiction over
the mere filing thereof with the multi sala RTC. Since petitioners had the branches designated as such.I concur with the ponencias
filed what they labeled as a Civil Case, they knowingly filed it pursuant conclusion that the designation of certain Regional Trial Court
to the general jurisdiction of the RTC under Sec. 19 of B.P. Blg. 129. The branches as Special Commercial Courts does not work to confer
mere filing of the Complaint before the Office of the Clerk of Court in jurisdiction over the branches designated as such. It was an error for
the RTC of Muntinlupa City, in the official station of the designated the Muntinlupa City Regional Trial Court, Branch 276, to dismiss the
Special Commercial Court as what occurred herein, is not equivalent to Complaint filed by petitioners. As the ponencia underscores, Branch
the correct and proper filing of the Complaint before the appropriate 276 should have instead transferred the case to the Muntinlupa City
Regional Trial Court specially designated by the Supreme Court to hear Regional Trial Court, Branch 256, the branch duly designated to
and decide cases enumerated under Section 5 of P.D. No. 902-A. perform the Muntinlupa City Regional Trial Courts functions as a
Branch 276 of the RTC, to which the Complaint was consequently Special Commercial Court. The present Petition must, thus, be granted.
raffled, in the exercise of its general jurisdiction, cannot order the Same; Same; Same; Same; View that jurisdiction over what the
transfer of the Complaint to Branch 256, the designated Special ponencia collectively refers to as Securities and Exchange Commission
Commercial Court. Branch 276 cannot do so on the basis of authority (SEC) Cases was vested by Republic Act (RA) No. 8799, otherwise
over the case which it did not have. Neither does it have authority over known as the Securities Regulation Code (SRC), in Regional Trial Courts
a coequal court. (RTCs) and is not limited to the RTC branches designated by the
Supreme Court (SC) as Special Commercial Courts.Jurisdiction over 1987 Constitution to define, prescribe, and apportion the jurisdiction
what the ponencia collectively refers to as SEC Cases was vested by of various courts[.] In contrast, the designation of Special Commercial
Republic Act No. 8799, otherwise known as the Securities Regulation Courts, through this courts November 21, 2000 Resolution in A.M. No.
Code, in Regional Trial Courts and is not limited to the Regional Trial 00-11-03-SC, was pursuant to this courts power under Article VIII,
Court branches designated by this court as Special Commercial Courts. Section 6 of the 1987 Constitution to exercise administrative
It is only the legislature that has the power to define, prescribe, and supervision over all courts. A.M. No. 00-11-03-SC did not work to
apportion the jurisdiction of various courts[.] As Congress does not confer jurisdiction independently of Section 5.2 of the Securities
share this power with this court, in relation with these issues, this Regulation Code. A.M. No. 00-11-03-SC itself declares that it was
courts competence is limited to administrative supervision over all adopted merely [t]o implement the provisions of Sec. 5.2 of Republic
courts[,] as well as the [p]romulgat[ion of] rules concerning . . . Act No. 8799[.]
pleading, practice, and procedure in all courts[.] It was purely in the Same; Same; Same; Same; View that the identity of Regional Trial
exercise of these powers, and not for the purpose of vesting Courts (RTCs) as courts of general jurisdiction is no bar to designating
jurisdiction where previously there was none, that this court designated certain RTC branches to focus on certain types of cases.The identity
certain Regional Trial Court branches as Special Commercial Courts. of Regional Trial Courts as courts of general jurisdiction is no bar to
Same; Same; Same; Same; View that jurisdiction over all cases designating certain Regional Trial Court branches to focus on certain
enumerated under Section 5 of Presidential Decree (PD) No. 902-A, types of cases. To the contrary, it is this identity which permits it.
which were previously under the jurisdiction of the Securities and Designating branches to focus on certain types of cases, in order to
Exchange Commission (SEC), was vested in Regional Trial Courts (RTCs) facilitate the efficient dispensation of justice, is well within their nature
by Section 5.2 of the Securities Regulation Code (SRC).Jurisdiction as courts competent to take cognizance of cases not falling under the
over all cases enumerated under Section 5 of Presidential Decree No. exclusive jurisdiction of any other court, tribunal, person, or body.
902-A, which were previously under the jurisdiction of the Securities Designating branches as such balances two considerations: on the one
and Exchange Commission, was vested in Regional Trial Courts by hand, their nature as courts, which because they have general
Section 5.2 of the Securities Regulation Code. jurisdiction, can exercise jurisdiction over the specific matter to which
Same; Same; Same; Same; View that A.M. No. 00-11-03-SC did not they were assigned; and on the other, their duty to speedily administer
work to confer jurisdiction independently of Section 5.2 of the justice.
Securities Regulation Code (SRC). A.M. No. 00-11-03-SC itself declares Same; Same; Same; Same; View that Section 5.2s qualification that this
that it was adopted merely [t]o implement the provisions of Sec. 5.2 of courts power to designate is necessarily only in the exercise of its
Republic Act (RA) No. 8799.This statutory provision was adopted authority is illuminating.Section 5.2s qualification that this courts
pursuant to the legislatures power under Article VIII, Section 2 of the power to designate is necessarily only in the exercise of its authority
is illuminating. It is to say that, in going about its task of designating, The Facts
this court cannot act in excess of its constitutional authority. This
affirms the Constitutions segregation of the competencies of Congress On August 4, 2011, petitioners Manuel Luis C. Gonzales4 and Francis
Martin D. Gonzales (petitioners) filed a Complaint5 for "Injunction with
from those of this court. It affirms the exclusivity of Congress power
prayer for Issuance of Status Quo Order, Three (3) and Twenty (20)-Day
to define, prescribe, and apportion the jurisdiction of various courts[.] Temporary Restraining Orders, and Writ of Preliminary Injunction with
This affirms the reality that, bereft of this power, this courts Damages" against respondents GJH Land, Inc. (formerly known as S.J.
competence is limited to administrative supervision over all courts[,] Land, Inc.), Chang Hwan Jang, Sang Rak Kim, Mariechu N. Yap, and
as well as the [p]romulgat[ion] [of] rules concerning . . . pleading, Atty. Roberto P. Mallari II6 (respondents) before the RTC of Muntinlupa
practice, and procedure in all courts[.] City seeking to enjoin the sale of S.J. Land, Inc.'s shares which they
purportedly bought from S.J. Global, Inc. on February 1, 2010.
Same; Same; Same; Same; View that in adopting A.M. No. 00-11-03-SC,
Essentially, petitioners alleged that the subscriptions for the said shares
this court was fully cognizant of how Section 5.2 limited its authority to
were already paid by them in full in the books of S.J. Land, Inc.,7 but
designate only in the exercise of its authority.A.M. No. 00-11-03-SC were nonetheless offered for sale on July 29, 2011 to the corporation's
did not create a new class of courts. Its purpose is operational stockholders,8 hence, their plea for injunction.
efficiency. In its own words, it was adopted to serve the interest of a
speedy and efficient administration of justice[.] It is, thus, but a The case was docketed as Civil Case No. 11-077 and raffled to Branch
procedural and administrative mechanism aimed (to echo the words of 276, which is not a Special Commercial Court. On August 9, 2011,
said branch issued a temporary restraining order,9 and later, in an
the ponencia) to promote expediency and efficiency in the exercise of
Order10 dated August 24, 2011, granted the application for a writ of
the [Regional Trial Courts] jurisdiction[.] Also in its own words, A.M.
preliminary injunction.
No. 00-11-03-SC was adopted only [t]o implement the provisions of
Sec. 5.2 of Republic Act No. 8799 [or the Securities Regulation Code]. After filing their respective answers11 to the complaint, respondents
Thus, in adopting A.M. No. 00-11-03-SC, this court was fully cognizant filed a motion to dismiss12 on the ground of lack of jurisdiction over
of how Section 5.2 limited its authority to designate only in the the subject matter, pointing out that the case involves an intra-
exercise of its authority[.] Indeed, this court could not have intended corporate dispute and should, thus, be heard by the designated Special
Commercial Court of Muntinlupa City.13
to overstep the constitutional limits of its authority.
The RTC Ruling

PERLAS-BERNABE, J.:
In an Order14 dated April 17, 2012, Branch 276 granted the motion to
This is a direct recourse to the Court, via a petition for review
dismiss filed by respondents. It found that the case involves an intra-
on certiorari,1 from the Orders dated April 17, 20122 and July 9,
corporate dispute that is within the original and exclusive jurisdiction
20123 of the Regional Trial Court (RTC) of Muntinlupa City, Branch 276
of the RTCs designated as Special Commercial Courts. It pointed out
(Branch 276) dismissing Civil Case No. 11-077 for lack of jurisdiction.
that the RTC of Muntinlupa City, Branch 256 (Branch 256) was
specifically designated by the Court as the Special Commercial Court, rights over the shares of stock offered for sale to other stockholders,
hence, Branch 276 had no jurisdiction over the case and cannot having paid the same in full. Applying the relationship test and
lawfully exercise jurisdiction on the matter, including the issuance of a the nature of the controversy test, the suit between the parties is
Writ of Preliminary Injunction.15 Accordingly, it dismissed the case. clearly rooted in the existence of an intra-corporate relationship and
pertains to the enforcement of their correlative rights and obligations
Dissatisfied, petitioners filed a motion for reconsideration,16 arguing under the Corporation Code and the internal and intra-corporate
that they filed the case with the Office of the Clerk of Court of the RTC regulatory rules of the corporation,24 hence, intra-corporate, which
of Muntinlupa City which assigned the same to Branch 276 should be heard by the designated Special Commercial Court as
by raffle.17 As the raffle was beyond their control, they should not be provided under A.M. No. 03-03-03-SC25 dated June 17, 2003 in relation
made to suffer the consequences of the wrong assignment of the case, to Item 5.2, Section 5 of RA 8799.
especially after paying the filing fees in the amount of P235,825.00 that
would be for naught if the dismissal is upheld.18 They further The present controversy lies, however, in the procedure to be
maintained that the RTC has jurisdiction over intra-corporate disputes followed when a commercial case - such as the instant intra-
under Republic Act No. (RA) 8799,19 but since the Court selected corporate dispute -has been properly filed in the official station of
specific branches to hear and decide such suits, the case must, at most, the designated Special Commercial Court but is, however, later
be transferred or raffled off to the proper branch.20 wrongly assigned by raffle to a regular branch of that station.

In an Order21 dated July 9, 2012, Branch 276 denied the motion for As a basic premise, let it be emphasized that a court's acquisition of
reconsideration, holding that it has no authority or power to order the jurisdiction over a particular case's subject matter is different from
transfer of the case to the proper Special Commercial Court, incidents pertaining to the exercise of its jurisdiction. Jurisdiction over
citing Calleja v. Panday22 (Calleja); hence, the present petition. the subject matter of a case is conferred by law, whereas a
The Issue Before the Court court's exercise of jurisdiction, unless provided by the law itself, is
governed by the Rules of Court or by the orders issued from time to
The essential issue for the Court's resolution is whether or not Branch time by the Court.26 In Lozada v. Bracewell,27 it was recently held
276 of the RTC of Muntinlupa City erred in dismissing the case for lack that the matter of whether the RTC resolves an issue in the
of jurisdiction over the subject matter. exercise of its general jurisdiction or of its limited jurisdiction as a
The Court's Ruling special court is only a matter of procedure and has nothing to do
with the question of jurisdiction.

The petition is meritorious. Pertinent to this case is RA 8799 which took effect on August 8, 2000.
By virtue of said law, jurisdiction over cases enumerated in Section
At the outset, the Court finds Branch 276 to have correctly categorized 528 of Presidential Decree No. 902-A29 was transferred from the
Civil Case No. 11-077 as a commercial case, more particularly, an intra- Securities and Exchange Commission (SEC) to the RTCs, being courts
corporate dispute,23 considering that it relates to petitioners' averred
of general jurisdiction. Item 5.2, Section 5 of RA 8799
provides:chanRoblesvirtualLawlibrary As enunciated in Durisol Philippines, Inc. v.
SEC. 5. Powers and Functionsof the Commission. - x x x CA:31chanroblesvirtuallawlibrary
The regional trial court, formerly the court of first instance, is a court of
xxxx general jurisdiction. All cases, the jurisdiction over which is not
specifically provided for by law to be within the jurisdiction of any
5.2 The Commission's jurisdiction over all cases enumerated under other court, fall under the jurisdiction of the regional trial
Section 5 of Presidential Decree No. 902-A is hereby transferred to court.32ChanRoblesVirtualawlibrary
the Courts of general jurisdiction or the appropriate Regional Trial cralawlawlibrary
Court: Provided, that the Supreme Court in the exercise of its
authority may designate the Regional Trial Court branches that To clarify, the word "or" in Item 5.2, Section 5 of RA 8799 was
shall exercise jurisdiction over the cases. The Commission shall intentionally used by the legislature to particularize the fact that the
retain jurisdiction over pending cases involving intra-corporate phrase "the Courts of general jurisdiction" is equivalent to the phrase
disputes submitted for final resolution which should be resolved within "the appropriate Regional Trial Court." In other words, the jurisdiction
one (1) year from the enactment of this Code. The Commission shall of the SEC over the cases enumerated under Section 5 of PD 902-A
retain jurisdiction over pending suspension of payments/rehabilitation was transferred to the courts of general jurisdiction, that is to say (or,
cases filed as of 30 June 2000 until finally disposed. (Emphasis otherwise known as), the proper Regional Trial Courts. This
supplied)cralawlawlibrary interpretation is supported by San Miguel Corp. v. Municipal
Council,33 wherein the Court held that:chanRoblesvirtualLawlibrary
The legal attribution of Regional Trial Courts as courts of general [T]he word "or" may be used as the equivalent of "that is to say" and
jurisdiction stems from Section 19 (6), Chapter II of Batas Pambansa gives that which precedes it the same significance as that which follows
Bilang (BP) 129,30 known as "The Judiciary Reorganization Act of it. It is not always disjunctive and is sometimes interpretative or
1980":chanRoblesvirtualLawlibrary expository of the preceding word.34cralawlawlibrary
Section 19. Jurisdiction in civil cases.- Regional Trial Courts shall
exercise exclusive original jurisdiction:chanRoblesvirtualLawlibrary Further, as may be gleaned from the following excerpt of the
Congressional deliberations:chanRoblesvirtualLawlibrary
xxxx Senator [Raul S.] Roco: x x x.

(6) In all cases not within the exclusive jurisdiction of any court, xxxx
tribunal, person or body exercising jurisdiction or any court, tribunal,
person or body exercising judicial or quasi-judicial functions; x x x x x x x. The first major departure is as regards the Securities and
cralawlawlibrary Exchange Commission. The Securities and Exchange Commission has
been authorized under this proposal to reorganize itself. As an
administrative agency, we strengthened it and at the same time we
take away the quasi-judicial functions. The quasi-judicial functions locality, i.e., the Special Commercial Court, to streamline the court
are now given back to the courts of general jurisdiction - the structure and to promote expediency.40 Accordingly, the RTC branch
Regional Trial Court, except for two categories of cases. so designated was mandated to try and decide SEC cases, as well as
those involving violations of intellectual property rights, which were,
In the case of corporate disputes, only those that are now submitted thereupon, required to be filed in the Office of the Clerk of Court in
for final determination of the SEC will remain with the SEC. So, all those the official station of the designated Special Commercial Courts, to
cases, both memos of the plaintiff and the defendant, that have been wit:chanRoblesvirtualLawlibrary
submitted for resolution will continue. At the same time, cases 1. The Regional Courts previously designated as SEC Courts through
involving rehabilitation, bankruptcy, suspension of payments and the: (a) Resolutions of this Court dated 21 November 2000, 4 July 2001,
receiverships that were filed before June 30, 2000 will continue with 12 November 2002, and 9 July 2002 all issued in A.M. No. 00-11-03-SC;
the SEC. in other words, we are avoiding the possibility, upon approval (b) Resolution dated 27 August 2001 in A.M. No. 01-5-298-RTC; and (c)
of this bill, of people filing cases with the SEC, in manner of speaking, Resolution dated 8 July 2002 in A.M. No. 01-12-656-RTC are hereby
to select their court.35 DESIGNATED and shall be CALLED as Special Commercial Courts to try
and decide cases involving violations of Intellectual Property Rights
x x x x (Emphasis supplied)cralawlawlibrary which fall within their jurisdiction and those cases formerly cognizable
by the Securities and Exchange
Therefore, one must be disabused of the notion that the transfer of Commission:chanRoblesvirtualLawlibrary
jurisdiction was made only in favor of particular RTC branches, and not
the RTCs in general. xxxx

Consistent with the foregoing, history depicts that when the transfer of 4. The Special Commercial Courts shall have jurisdiction over cases
SEC cases to the RTCs was first implemented, they were transmitted to arising within their respective territorial jurisdiction with respect to the
the Executive Judges of the RTCs for raffle between or among its National Capital Judicial Region and within the respective provinces
different branches, unless a specific branch has been designated as with respect to the First to Twelfth Judicial Regions. Thus, cases shall be
a Special Commercial Court, in which instance, the cases filed in the Office of the Clerk of Court in the official station of the
were transmitted to said branch.36 It was only on November 21, 2000 designated Special Commercial Court;41
that the Court designated certain RTC branches to try and decide said
SEC cases37 without, however, providing for the transfer of the cases x x x x (Underscoring supplied)cralawlawlibrary
already distributed to or filed with the regular branches thereof. Thus,
on January 23, 2001, the Court issued SC Administrative Circular No. It is important to mention that the Court's designation of Special
08-200138 directing the transfer of said cases to the designated courts Commercial Courts was made in line with its constitutional authority to
(commercial SEC courts). Later, or on June 17, 2003, the Court issued supervise the administration of all courts as provided under Section 6,
A.M. No. 03-03-03-SC consolidating the commercial SEC courts and Article VIII of the 1987 Constitution:chanRoblesvirtualLawlibrary
the intellectual property courts39 in one RTC branch in a particular
Section 6. The Supreme Court shall have administrative supervision allegations that clearly make out an intra-corporate
over all courts and the personnel thereof.cralawlawlibrary dispute:chanRoblesvirtualLawlibrary
16. To the surprise of MLCG and FMDG, however, in two identical
The objective behind the designation of such specialized courts is to letters both dated 13 May 2011, under the letterhead of GJH Land, Inc.,
promote expediency and efficiency in the exercise of the RTCs' Yap, now acting as its President, Jang and Kim demanded payment of
jurisdiction over the cases enumerated under Section 5 of PD 902-A. supposed unpaid subscriptions of MLCG and FMDG amounting to
Such designation has nothing to do with the statutory conferment of P10,899,854.30 and P2,625,249.41, respectively.
jurisdiction to all RTCs under RA 8799 since in the first place, the Court 16.1 Copies of the letters dated 13 May 2011 are attached hereto and
cannot enlarge, diminish, or dictate when jurisdiction shall be made integral parts hereof as Annexes "J" and "K", repectively.
removed, given that the power to define, prescribe, and apportion 17. On 29 July 2011, MLCG and FMDG received an Offer Letter
jurisdiction is, as a general rule, a matter of legislative addressed to stockholders of GJH Land, Inc. from Yap informing all
prerogative.42 Section 2, Article VIII of the 1987 Constitution stockholders that GJH Land, Inc. is now offering for sale the unpaid
provides:chanRoblesvirtualLawlibrary shares of stock of MLCG and FMDG. The same letter states that the
Section 2. The Congress shall have the power to define, prescribe, and offers to purchase these shares will be opened on 10 August 2011 with
apportion the jurisdiction of the various courts but may not deprive the payments to be arranged by deposit to the depository bank of GJH
Supreme Court of its jurisdiction over cases enumerated in Section 5 Land, Inc.
hereof. 17.1 A copy of the undated Offer Letter is attached hereto and made
and made an integral part hereof as Annex "L".
xxxx 18. The letter of GJH Land, Inc. through Yap, is totally without legal and
cralawlawlibrary factual basis because as evidenced by the Deeds of Assignment signed
and certified by Yap herself, all the S.J. Land, Inc. shares acquired by
Here, petitioners filed a commercial case, i.e., an intra-corporate MLCG and FMDG have been fully paid in the books of S.J. Land, Inc.
dispute, with the Office of the Clerk of Court in the RTC of Muntinlupa
City, which is the official station of the designated Special Commercial 19. With the impending sale of the alleged unpaid subscriptions on 10
Court, in accordance with A.M. No. 03-03-03-SC. It is, therefore, from August 2011, there is now a clear danger that MLCG and FMDG
the time of such filing that the RTC of Muntinlupa City acquired would be deprived of these shares without legal and factual basis.
jurisdiction over the subject matter or the nature of the
action.43 Unfortunately, the commercial case was wrongly raffled to 20. Furthermore, if they are deprived of these shares through the
a regular branch, e.g., Branch 276, instead of being assigned44to scheduled sale, both MLCG and FMDG would suffer grave and
the sole Special Commercial Court in the RTC of Muntinlupa City, irreparable damage incapable of pecuniary estimation.
which is Branch 256. This error may have been caused by a reliance
on the complaint's caption, i.e., "Civil Case for Injunction with prayer 21. For this reason, plaintiffs now come to the Honorable Court for
for Status Quo Order, TRO and Damages,"45 which, however, injunctive relief so that after trial on the merits, a permanent injunction
contradicts and more importantly, cannot prevail over its actual should be issued against the defendants preventing them from selling
the shares of the plaintiffs, there being no basis for such (a) if the said RTC has only one branch designated as a Special
sale.46cralawlawlibrary Commercial Court, assign the case to the sole special branch; or (b) if
the said RTC has multiple branches designated as Special Commercial
According to jurisprudence, "it is not the caption but the allegations in Courts, raffle off the case among those special branches.
the complaint or other initiatory pleading which give meaning to the
pleading and on the basis of which such pleading may be legally In all the above-mentioned scenarios, any difference regarding the
characterized."47 However, so as to avert any future confusion, the applicable docket fees should be duly accounted for. On the other
Court requires henceforth, that all initiatory pleadings state the action's hand, all docket fees already paid shall be duly credited, and any
nature both in its caption and the body, which parameters are defined excess, refunded.
in the dispositive portion of this Decision.
At this juncture, the Court finds it fitting to clarify that the RTC
Going back to the case at bar, the Court nonetheless deems that the mistakenly relied on the Calleja case to support its ruling. In Calleja, an
erroneous raffling to a regular branch instead of to a Special intra-corporate dispute49 among officers of a private corporation with
Commercial Court is only a matter of procedure - that is, an incident principal address at Goa, Camarines Sur, was filed with the RTC of San
related to the exercise of jurisdiction - and, thus, should not negate the Jose, Camarines Sur, Branch 58 instead of the RTC of Naga City, which
jurisdiction which the RTC of Muntinlupa City had already acquired. In is the official station of the designated Special Commercial Court for
such a scenario, the proper course of action was not for the Camarines Sur. Consequently, the Court set aside the RTC of San Jose,
commercial case to be dismissed; instead, Branch 276 should have Camarines Sur's order to transfer the case to the RTC of Naga City and
first referred the case to the Executive Judge for re-docketing as a dismissed the complaint considering that it was filed before a court
commercial case; thereafter, the Executive Judge should then which, having no internal branch designated as a Special Commercial
assign said case to the only designated Special Commercial Court Court, had no jurisdiction over those kinds of actions, i.e., intra-
in the station, i.e., Branch 256. corporate disputes. Calleja involved two different RTCs, i.e., the RTC
of San Jose, Camarines Sur and the RTC of Naga City, whereas
Note that the procedure would be different where the RTC acquiring the instant case only involves one RTC, i.e., the RTC of Muntinlupa
jurisdiction over the case has multiple special commercial court City, albeit involving two different branches of the same
branches; in such a scenario, the Executive Judge, after re-docketing court, i.e., Branches 256 and 276. Hence, owing to the variance in the
the same as a commercial case, should proceed to order its re-raffling facts attending, it was then improper for the RTC to rely on the Calleja
among the said special branches. ruling.

Meanwhile, if the RTC acquiring jurisdiction has no branch designated Besides, the Court observes that the fine line that distinguishes subject
as a Special Commercial Court, then it should refer the case to the matter jurisdiction and exercise of jurisdiction had been clearly blurred
nearest RTC with a designated Special Commercial Court branch within in Calleja. Harkening back to the statute that had conferred subject
the judicial region.48 Upon referral, the RTC to which the case was matter jurisdiction, two things are apparently clear: (a) that the
referred to should re-docket the case as a commercial case, and then: SEC's subject matter jurisdiction over intra-corporate cases under
Section 5 of Presidential Decree No. 902-A was transferred to the Muntinlupa City, subject to the parameters above-discussed is
Courts of general jurisdiction, i.e., the appropriate Regional Trial proper and will further the purposes stated in A.M. No. 03-03-03-
Courts; and (b) the designated branches of the Regional Trial Court, as SC of attaining a speedy and efficient administration of justice.
per the rules promulgated by the Supreme Court, shall exercise
jurisdiction over such cases. Item 5.2, Section 5 of RA 8799 For further guidance, the Court finds it apt to point out that the same
provides:chanRoblesvirtualLawlibrary principles apply to the inverse situation of ordinary civil cases filed
SEC. 5. Powers and Functions of the Commission. - x x x before the proper RTCs but wrongly raffled to its branches
designated as Special Commercial Courts. In such a scenario,
xxxx the ordinary civil case should then be referred to the Executive
Judge for re-docketing as an ordinary civil case; thereafter, the
5.2 The Commission's jurisdiction over all cases enumerated under Executive Judge should then order the raffling of the case to all
Section 5 of Presidential Decree No. 902-A is hereby transferred to branches of the same RTC, subject to limitations under existing
the Courts of general jurisdiction or the appropriate Regional Trial internal rules, and the payment of the correct docket fees in case
Court: Provided, that the Supreme Court in the exercise of its of any difference. Unlike the limited assignment/raffling of a
authority may designate the Regional Trial Court branches that commercial case only to branches designated as Special Commercial
shall exercise jurisdiction over the cases, x x x.cralawlawlibrary Courts in the scenarios stated above, the re-raffling of an ordinary civil
case in this instance to all courts is permissible due to the fact that a
In contrast, the appropriate jurisprudential reference to this case would particular branch which has been designated as a Special Commercial
be Tan v. Bausch & Lomb, Inc.,50 which involves a criminal complaint Court does not shed the RTC's general jurisdiction over ordinary civil
for violation of intellectual property rights filed before the RTC of Cebu cases under the imprimatur of statutory law, i.e., Batas Pambansa
City but was raffled to a regular branch thereof (Branch 21), and not to Bilang (BP) 129.52 To restate, the designation of Special Commercial
a Special Commercial Court. As it turned out, the regular branch Courts was merely intended as a procedural tool to expedite the
subsequently denied the private complainant's motion to transfer the resolution of commercial cases in line with the court's exercise of
case to the designated special court of the same RTC, on the ground jurisdiction. This designation was not made by statute but only by an
of lack of jurisdiction. The CA reversed the regular branch and, internal Supreme Court rule under its authority to promulgate rules
consequently, ordered the transfer of the case to the designated governing matters of procedure and its constitutional mandate to
special court at that time (Branch 9). The Court, affirming the CA, supervise the administration of all courts and the personnel
declared that the RTC had acquired jurisdiction over the subject thereof.53 Certainly, an internal rule promulgated by the Court cannot
matter. In view, however, of the designation of another court as the go beyond the commanding statute. But as a more fundamental
Special Commercial Court in the interim (Branch 11 of the same Cebu reason, the designation of Special Commercial Courts is, to stress,
City RTC), the Court accordingly ordered the transfer of the case and merely an incident related to the court's exercise of jurisdiction, which,
the transmittal of the records to said Special Commercial Court as first discussed, is distinct from the concept of jurisdiction over the
instead.51Similarly, the transfer of the present intra-corporate subject matter. The RTC's general jurisdiction over ordinary civil cases
dispute from Branch 276 to Branch 256 of the same RTC of is therefore not abdicated by an internal rule streamlining court
procedure. 1.3 If the RTC has no internal branch designated as a Special
Commercial Court, then the case shall be referred to the nearest RTC
In fine, Branch 276's dismissal of Civil Case No. 11-077 is set aside and with a designated Special Commercial Court branch within the judicial
the transfer of said case to Branch 256, the designated Special region. Upon referral, the RTC to which the case was referred to should
Commercial Court of the same RTC of Muntinlupa City, under the re- docket the case as a commercial case, and then: (a) if the said RTC
parameters above-explained, is hereby ordered. has only one branch designated as a Special Commercial Court, assign
the case to the sole special branch; or (b) if the said RTC has multiple
WHEREFORE, the petition is GRANTED. The Orders dated April 17, branches designated as Special Commercial Courts, raffle off the case
2012 and July 9, 2012 of the Regional Trial Court (RTC) of Muntinlupa among those special branches.
City, Branch 276 in Civil Case No. 11-077 are 2. If an ordinary civil case filed before the proper RTC is wrongly raffled
hereby REVERSED and SET ASIDE. Civil Case No. 11-077 to its branch designated as a Special Commercial Court, then the case
is REFERRED to the Executive Judge of the RTC of Muntinlupa City for shall be referred to the Executive Judge for re-docketing as an ordinary
re-docketing as a commercial case. Thereafter, the Executive Judge civil case. Thereafter, it shall be raffled off to all courts of the same RTC
shall ASSIGNsaid case to Branch 256, the sole designated Special (including its designated special branches which, by statute, are equally
Commercial Court in the RTC of Muntinlupa City, which is ORDERED to capable of exercising general jurisdiction same as regular branches), as
resolve the case with reasonable dispatch. In this regard, the Clerk of provided for under existing rules.
Court of said RTC shall DETERMINE the appropriate amount of docket
fees and, in so doing, ORDER the payment of any difference or, on the 3. All transfer/raffle of cases is subject to the payment of the
other hand, refund any excess. appropriate docket fees in case of any difference. On the other hand,
all docket fees already paid shall be duly credited, and any excess,
Furthermore, the Court hereby RESOLVES that henceforth, the refunded.
following guidelines shall be observed:
1. If a commercial case filed before the proper RTC is wrongly raffled to 4. Finally, to avert any future confusion, the Court requires that all
its regular branch, the proper courses of action are as follows: initiatory pleadings state the action's nature both in its caption and
1.1 If the RTC has only one branch designated as a Special Commercial body. Otherwise, the initiatory pleading may, upon motion or by order
Court, then the case shall be referred to the Executive Judge for re- of the court motu proprio, be dismissed without prejudice to its re-
docketing as a commercial case, and thereafter, assigned to the sole filing after due rectification. This last procedural rule is prospective in
special branch; application.

1.2 If the RTC has multiple branches designated as Special Commercial 5. All existing rules inconsistent with the foregoing are deemed
Courts, then the case shall be referred to the Executive Judge for re- superseded.cralawlawlibrary
docketing as a commercial case, and thereafter, raffled off among
those special branches; and SO ORDERED.

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