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G.R. No.

154684
FRANCEL REALTY CORPORATION vs. RICARDO T. SYCIP
September 8, 2005

Facts:
In November, 1989, petitioner and respondent entered into a contract to sell a house and lot
covered by TCT No. T-281788. Upon execution of the contract to sell, respondent made a down
payment of P119,700.00. On March 16, 1990, the townhouse subject of the contract to sell was
transferred in the name of respondent. However, despite the transfer of the title in the name of
respondent, the latter refused to pay the balance of P250,000.00. Despite several demands made by
petitioner to respondent, the respondent still refused to reconvey the subject property to petitioner.
The petitioner suffered actual damages in the form of repairs amounting to not less than P100,000.00
as well as moral and exemplary damages, attorney’s fees and litigation expenses.
The respondent filed a motion to dismiss on the ground of lack of jurisdiction but the RTC
denied the motion stating that the ground relied upon by respondent did not appear to be
indubitable.
Denying the material allegations of the complaint, the respondent again invoked the courts
lack of jurisdiction over the subject matter of the case. Further, there is a pending case between the
same parties and involving the same townhouse before the Housing and Land Use Regulatory Board
for unsound real estate business practices. Likewise, the respondent justified his refusal to pay the
amortizations alleging that the petitioner sold and delivered to him a defective townhouse unit under
Sec. 3 of Presidential Decree No. 957.
After trial, RTC dismissed the case for lack of jurisdiction.
CA agreed with the ruling of RTC. Hence, this Petition.
Issue:
Whether or not the lower court can dismiss, after full blown trial, Civil Case No. BCV-94-2 of
the RTC, Imus, Cavite, on the ground of lack of jurisdiction.
Ruling:
YES. Petitioner argues that the CAs affirmation of the trial courts dismissal of its case was
erroneous, considering that a full-blown trial had already been conducted. In effect, it contends that
lack of jurisdiction could no longer be used as a ground for dismissal after trial had ensued and ended.

The above argument is anchored on estoppel by laches, which has been used quite
successfully in a number of cases to thwart dismissals based on lack of jurisdiction. In such
controversies, laches should be clearly present; that is, lack of jurisdiction must have been raised so
belatedly as to warrant the presumption that the party entitled to assert it had abandoned or declined
to assert it.
Indeed, the general rule remains: a courts lack of jurisdiction may be raised at any stage
of the proceedings, even on appeal. The reason is that jurisdiction is conferred by law, and lack of
it affects the very authority of the court to take cognizance of and to render judgment on the
action. Moreover, jurisdiction is determined by the averments of the complaint, not by the defenses
contained in the answer.
From the very beginning, the present respondent has been challenging the jurisdiction of the
trial court and asserting that the HLURB is the entity that has proper jurisdiction over the case. This
consistent and continuing objection to the trial courts jurisdiction defeats petitioners contention that
raising other grounds in a Motion to Dismiss is considered a submission to the jurisdiction of the
court.
We stress that Rule 9 of the Rules of Court requires that all defenses and objections -- except
lack of jurisdiction over the subject matter, litis pendentia, bar by prior judgment and/or prescription
-- must be pleaded in a motion to dismiss or in an answer; otherwise, they are deemed waived. As to
the excepted grounds, the court may dismiss a claim or a case at any time when it appears from the
pleadings or the evidence on record that any of those grounds exists.
Significantly, petitioner has previously sued respondents brother and co-complainant before
the HLURB over the same subdivision project. Because an earlier Complaint had been filed by Sycip
before the HLURB against Francel Realty Corporation for unsound real estate business practices, the
Court dismissed petitioners cause of action. The reason for the dismissal was that the Complaint
should instead be filed as a counterclaim in [the] HLURB [case] in accordance with Rule 6, Section 6
of the Rules of Court x x x.[ For the same reason, this Court has ruled that a suit to collect on a
promissory note issued by a subdivision lot buyer involves the sales of lots in commercial
subdivisions; and that jurisdiction over such case lies with the HLURB, not with the courts.
We find that the motion to dismiss was properly granted on the ground that the regular court has no
jurisdiction to take cognizance of the complaint.
G.R. No. 110048.
SERVICEWIDE SPECIALISTS, INC. vs. COURT OF APPEALS, HILDA TEE, & ALBERTO M.
VILLAFRANCA
November 19, 1999
Facts:
On May 14, 1976, Leticia L. Laus of Quezon City purchased on credit a Colt Galant from
Fortune Motors (Phils.) Corporation. On the same date, she executed a promissory note for the
amount of P56,028.00, payable within a period of 48 months at a monthly installment of P1,167.25.
It was agreed upon that in case of default in the payment of any installment the total principal sum,
together with the interest, shall become immediately due and payable. As a security for the
promissory note, a chattel mortgage was constituted over the said motor vehicle, with a deed of
assignment incorporated therein such that the credit and mortgage rights were assigned by Fortune
Motors Corp. in favor of Filinvest Credit Corporation with the consent of the mortgagor-debtor Leticia
Laus. The vehicle was then registered in the name of Leticia L. Laus with the chattel mortgage
annotated on said certificate.
On September 25, 1978, Filinvest Credit Corporation in turn assigned the credit in favor of
Servicewide Specialists, Inc. transferring unto the latter all its rights under the promissory note and
the chattel mortgage with the corresponding notice of assignment sent to the registered car owner.
On April 18, 1977, Leticia Laus failed to pay the monthly installment for that month. The
installments for the succeeding 17 months were not likewise fully paid, hence on September 25,
1978, Servicewide demanded payment of the entire outstanding balance of P46,775.24 inclusive of
interests. Despite said formal demand, Leticia Laus failed to pay all the monthly installments due until
July 18, 1980.
As a result of the failure of Leticia Laus to settle her obligation, or at least to surrender
possession of the motor vehicle for the purpose of foreclosure, Servicewide instituted a complaint for
replevin, impleading Hilda Tee and John Dee in whose custody the vehicle was believed to be at the
time of the filing of the suit.
In its complaint, plaintiff alleged that it had superior lien over the mortgaged vehicle; that it
is lawfully entitled to the possession of the same together with all its accessories and equipments;
(sic) that Hilda Tee was wrongfully detaining the motor vehicle for the purpose of defeating its
mortgage lien; and that a sufficient bond had been filed in court. On July 30, 1984, the court approved
the replevin bond.
On August 1, 1984, Alberto Villafranca filed a third party claim contending that he is the
absolute owner of the subject motor vehicle duly evidenced by the Bureau of Land Transportations
Certificate of Registration. Upon motion of the plaintiff below, Alberto Villafranca was substituted as
defendant. Summons was served upon him.
On March 20, 1985, Alberto Villafranca moved for the dismissal of the complaint which was
granted by the court but subsequently the order of dismissal was reconsidered and set aside. For
failure to file his Answer as required by the court aquo, Alberto Villafranca was declared in default
and plaintiffs evidence was received ex parte.
On December 27, 1985, the lower court rendered a decision dismissing the complaint for
insufficiency of evidence. Its motion for reconsideration of said decision having been denied. In its
appeal to the Court of Appeals, petitioner theorized that a suit for replevin aimed at the foreclosure
of a chattel is an action quasi in rem, and does not require the inclusion of the principal obligor in the
Complaint. However, the appellate court affirmed the decision of the lower Court.
Petitioner presented a Motion for Reconsideration but the Court of Appeals denied the same,
taking notice of another case pending between the same parties relating to the very chattel mortgage
of the motor vehicle in litigation.
Hence, the present petition for review on certiorari under Rule 45.
Issue:
Whether or not a case for replevin may be pursued against the defendant, Alberto Villafranca,
without impleading the absconding debtor-mortgagor?
Ruling:
No. Rule 60 of the Revised Rules of Court requires that an applicant for replevin must show
that he is the owner of the property claimed, particularly describing it, or is entitled to the possession
thereof. Where the right of the plaintiff to the possession of the specified property is so conceded or
evident, the action need only be maintained against him who so possesses the property.
In a suit for replevin, a clear right of possession must be established. (Italics supplied) A
foreclosure under a chattel mortgage may properly be commenced only once there is default on the
part of the mortgagor of his obligation secured by the mortgage. The replevin in this case has been
resorted to in order to pave the way for the foreclosure of what is covered by the chattel
mortgage. The conditions essential for such foreclosure would be to show, firstly, the existence of the
chattel mortgage and, secondly, the default of the mortgagor. These requirements must be shown
because the validity of the plaintiffs exercise of the right of foreclosure is inevitably dependent
thereon.
Leticia Laus, being an indispensable party, should have been impleaded in the complaint for
replevin and damages. An indispensable party is one whose interest will be affected by the courts
action in the litigation, and without whom no final determination of the case can be had. The party’s
interest in the subject matter of the suit and in the relief sought are so inextricably intertwined with
the other parties that his legal presence as a party to the proceeding is an absolute necessity. In his
absence, there cannot be a resolution of the dispute of the parties before the Court which is effective,
complete, or equitable.
That petitioner could not locate the mortgagor, Leticia Laus, is no excuse for resorting to a
procedural short-cut. It could have properly availed of substituted service of summons under the
Revised Rules of Court. If it deemed such a mode to be unavailing, it could have proceeded in
accordance with Section 14 of the same Rule. Indeed, petitioner had other proper remedies, it could
have resorted to but failed to avail of. For instance, it could have properly impleaded the
mortgagor. Such failure is fatal to petitioners cause.
With the foregoing disquisition and conclusion, the other issues raised by petitioner need not be
passed upon.
WHEREFORE, the Petition is DENIED and the Decision of the Court of Appeals in CA-G.R. CV No.
19571 AFFIRMED. No pronouncement as to costs.
SO ORDERED.