Republic of the Philippines vs. Sereno public trust.
public trust. The complaint also alleged that respondent failed to make truthful
G.R. No. 237428
May 11, 2018
FACTS: The Respondent served as a professor at the U.P College of Law
until 2006, and thereafter as practitioner in various outfits including as legal
counsel for the Republic until 2009. She also submitted her application for the
position of Associate Justice of the Supreme Court in July 2010. A month after,
or on August 13, 2010, respondent was appointed by then President Benigno
C. Aquino III as Associate Justice, and on August 16, 2010, respondent took
her oath of office as such.
The position of the Chief Justice was declared vacant in 2012. The JBC
announcement was preceded by an En Banc meeting held on June 4, 2012
wherein the JBC agreed to require the applicants for the Chief Justice position
to submit, instead of the usual submission of the SALNs for the last two years
of public service, all previous SALNs up to December 31, 2011 for those I
government service.
Respondent accepted several nominations for the position of Chief Justice and
in support of her nomination, respondent submitted to the ORSN her SALNs
for the year 2009, 2010, and 2011. Respondent also executed a waiver of
confidentiality of her local and foreign bank accounts.
On the scheduled date of the interview on July 24, 2012, despite respondent’s
submission of only 3 SALNs, Atty. Pascual prepared a Report – Re:
Documentary Requirements and SALN of candidates for the Position of Chief
Justice of the Philippines wherein respondent was listed as applicant No. 14
with an opposite annotation that she has “COMPLETE REQUIREMENTS” and
a note stating “Letter 7/23/12 – considering that her government records in the
academe are more than 15 years old, it is reasonable to consider it infeasible
to retrieve all those files.”
A month after respondent’s acceptance of her nomination, or on August 24,
2012, respondent was appointed by then President Aquino III as Chief Justice
of the Supreme Court..
On August 30, 2017, or five years after respondent’s appointment as Chief
Justice, an impeachment complaint was filed by Atty. Larry Gadon against
respondent with the Committee on Justice of the House of Representatives for
culpable violation of the Constitution, corruption, high crimes, and betrayal of
declarations in her SALNs.
The Republic accordingly seeks the nullification of respondent’s appointment,
asserting that her failure to file the required disclosures and her failure to
submit the same to the Judicial and Bar Council show that she is not
possessed of “proven integrity” demanded of every aspirant to the Judiciary.
As such, Petitioner file a case for quo warranto against the incumbent Chief
Justice as ineligible to hold the highest post in the Judiciary for failing to
regularly disclose her assets, liabilities and net worth as a member of the
career service prior to her appointment as an Associate Justice, and later as
Chief Justice, of the Supreme Court, in violation of the Constitution, the Anti-
Graft Law, and the Code of Conduct and Ethical Standards for Public Officials
and Employees.
ISSUES:
1) Whether the Court can assume jurisdiction and give due recourse to the
instant petition for quo warranto against respondent who is an impeachable
officer and against whom an impeachment complaint has already been filed
with the House of Reipresentatives
2) Whether the petition is outrightly dismissible on the ground of prescription
3) Whether respondent failed to comply with the submission of SALNs as
required by the JBC; and if so, whether the failure to submit SALNs to the JBC
voids the nomination and appointment of respondent as Chief Justice
HELD:
1) The Court has jurisdiction over the instant Petition for Quo Warranto.
Section 5, Article VIII of the Constitution, in part, provides that the Supreme
Court shall exercise original jurisdiction over petitions for certiorari, prohibition,
mandamus, quo warranto, and habeas corpus. Relatedly, Section 7, Rule 66
of the Rules of Court provides that the venue of an action for quo warranto,
when commenced by the Solicitor General, is either the Regional Trial Court
in the City of Manila, in the Court of Appeals, or in Supreme Court. In the
instant case, direct resort to the Court is justified considering that the action
for quo warranto questions the qualification of no less than a Member of the
Court. The issue of whether a person usurps, intrudes into, or unlawfully holds
or exercises a public office is a matter of public concern over which the
government takes special interest as it obviously cannot allow an intruder or
impostor to occupy a public position. Further, it is apparent that the instant
petition is one of first impression and of paramount importance to the public in
the sense that the qualification, eligibility and appointment of an incumbent
Chief Justice, the highest official of the Judiciary, are being scrutinized through
an action for quo warranto.
Moreover, Quo warranto and impeachment can proceed independently and
simultaneously. The term “quo warranto” is Latin for “by what authority.”
Therefore, as the name suggests, quo warranto is a writ of inquiry. It
determines whether an individual has the legal right to hold the public office he
or she occupies. As such, judgment is limited to ouster or forfeiture and may
not be imposed retroactively upon prior exercise of official or corporate duties.
Quo warranto and impeachment are, thus, not mutually exclusive remedies
and may even proceed simultaneously. The existence of other remedies
against the usurper does not prevent the State from commencing a quo
warranto proceeding.
On another issue, there can be no forum shopping in this case despite the
pendency of the impeachment proceedings before the House of
Representatives. The cause of action in the two proceedings are unequivocally
different. Likewise, the reliefs sough in the two proceedings are different. In
short, respondent in a quo warranto proceeding shall be adjudged to cease
from holding a public office, which he/she is ineligible to hold. On the other
hand, in impeachment, a conviction for the charges of impeachable offenses
shall result to the removal of the respondent from the public office that he/she
is legally holding. In fine, forum shopping and litis pendentia are not present
and a final decision in one will not strictly constitute as res judicata to the other.
2) No. Prescription does not lie against the State. Reference must necessarily
be had to Section 3, Rule 66 which makes it compulsory for the Solicitor
General to commence a quo warranto action:
Sec. 2. When Solicitor General or public prosecutor must
commence action. – The Solicitor General or a public
prosecutor, when directed by the President of the Philippines,
or when upon complaint or otherwise he has good reason to
believe that any case specified in the preceding section can
be established by proof must commence such action.
In the case of People ex rel. Moloney v. Pullman’s Palace Car Co., the Court
emphasize that the State is not bound by statute of limitations nor by laches,
acquiescence or unreasonable delay on the part of its officer. Moreover,
jurisprudence across the United States likewise richly reflect that when the
Solicitor General files a quo warranto petition in behalf of the people and
where the interests of the public is involved, the lapse of time presents
no effective bar.
Lastly, prescription does not lie in this case which can be deduced from the
very purpose of an action for quo warranto. In People vs. City Whittier, it
explains that the remedy of quo warranto is intended to prevent a continuing
exercise of an authority unlawfully asserted. Indeed, quo warranto serves to
end a continuous usurpation. Thus, no statute of limitation applies to the
action. Needless to say, no prudent and just court would allow an unqualified
person to hold public office, much more the highest position in the Judiciary.
Finally, it bears to stress that this Court finds it more important to rule on the
merits of the novel issues imbued with public interest presented before the
Court than to dismiss the case outright merely on technicality.
3) Respondents chronically failed to file her SALNs and thus violated the
Constitution, the law and the Code of Judicial Conduct. A member of the
Judiciary who commits such violations cannot be deemed to be a person of
proven integrity. Also, the invalidity of respondent’s appointment springs from
her lack of qualifications. Her inclusion in the shortlist of candidates for the
position of Chief Justice does not negate, nor supply her with the requisite
proof of integrity. She should have been disqualified at the outset. It must be
underscored that the JBC En Banc included respondent in the shortlist for the
position of Chief Justice without deliberating her July 23, 2012 Letter. Without
prejudice to this Court’s ruling in A.M. No. 17-11-12-SC and A.M. No. 17-11-
17-SC, the JBC En Banc cannot be deemed to have considered respondent
eligible because it does not appear that respondent’s failure to submit her
SALNs was squarely addressed by the body. Her inclusion in the shortlist of
nominees and subsequent appointment to the position do not estop the
Republic or this Court from looking into her disqualifications. Verily, no
estoppel arises where the representation or conduct of the party sought to be
estopped is due to ignorance founded upon an innocent mistake. Again,
without prejudice to the outcome of the pending administrative matter, it
appears that respondent’s inclusion was made under the erroneous belief that
she complied with all the legal requirements concomitant to the position.
Moreover, as the qualification of proven integrity goes into the barest
standards set forth under the Constitution to qualify as a Member of the Court,
the subsequent nomination and appointment to the position will not qualify and
otherwise excluded candidate. In other words, the inclusion of respondent in
the shortlist of nominees submitted to the President cannot override the
minimum Constitutional qualifications. Neither will the President’s act of
appointment cause to qualify respondent. To reiterate with emphasis, when
the JBC mistakenly or wrongfully accepted and nominated respondent, the
President, through his alter egos in the JBC, commits the same mistake and
the President’s subsequent act to appoint respondent cannot have any
curative effect.
The Petition for Quo Warranto is GRANTED. Respondent Maria Lourdes
P.A Sereno is found DISQUALIFIED from and is hereby adjudged GUILTY of
UNLAFULLY HOLDING and EXERCISING THE OFFICE OF THE CHIEF
JUSTICE. Accordingly, Respondent is OUSTED and EXCLUDED therefrom.
Aznar Brothers Realty Company vs. Sps. Jose and Magdalena
Ybanez
G.R. No. 161380,
Private ownership of land – as when there is a prima facie proof of
ownership like a duly registered possessory information or a clear showing
of open, continuous, exclusive, and notorious possession, by present or
previous occupants – is not affected by the issuance of a free patent
over the same land, because the Public Land Law applies only to lands
of the public domain. The Director of Lands has no authority to grant
free patent to lands that have ceased to be public in character and have
passed to private ownership. Consequently, a certificate of title issued
pursuant to a homestead patent partakes of the nature of a certificate
issued in a judicial proceeding only if the land covered by it is really a
part of the disposable land of the public domain.
FACTS:
Casimiro Ybañez with the marital consent of Maria Daclan, executed a
Deed of Absolute Sale in favor of Aznar Brothers conveying an
unregistered agricultural land. The parties agreed to register the sale
under Act No. 3344.
Casimiro died intestate leaving as heirs his wife Maria, and their children.
On August 29, 1977, the heirs of Casimiro executed a document entitled
Extrajudicial Declaration of Heirs with an Extrajudicial Settlement of Estate
of Deceased Person and Deed of Absolute Sale, whereby they divided
and adjudicated among themselves Lot No. 18563. By the same
document, they sold the entire lot for P1,000.00 to their co-heir, Adriano
D. Ybañez. Adriano sold Lot No. 18563 to Jose R. Ybañez. Jose R.
Ybañez filed Free Patent Application in respect of the land he had bought
from Adriano. In due course, on July 20, 1979, Original Certificate of
Title (OCT) No. 2150 was issued to Jose R. Ybañez.
Aznar Brothers filed in the RTC a complaint against Jose R. Ybañez
claiming absolute ownership of Lot No. 18563 by virtue of the Deed of
Absolute Sale dated March 21, 1964 executed in its favor by Casimiro.
Jose R. Ybañez moved to dismiss the complaint of Aznar Brothers on
the ground of lack of cause of action, lack of jurisdiction over the nature
of the action, and estoppel by laches. After Aznar Brothers opposed,
the RTC denied the motion to dismiss.
Aznar Brothers amended its complaint a second time to implead Jose
R. Ybañez’s wife Magdalena Marcos-Ybañez as defendant, averring that
both defendants held “no legal right nor just title to apply for free patent
over the lot in question,” for the land was “no longer a public disposable
agricultural land but a private residential land” that it already owned.
Aznar Brothers sought a restraining order or a writ of preliminary
injunction to prevent the Spouses Ybañez from disposing of the land. It
further sought the declaration as null and void ab initio the Extrajudicial
Declaration of Heirs with Extrajudicial Settlement of Estate of Deceased
Person and Deed of Absolute Sale.
The RTC admitted the second amended complaint, emphasizing that the
original cause of action of accion publiciana would not be changed
because the second amended complaint would incorporate additional but
related causes of action, a change permitted only during the pre-trial
stage. The RTC rendered judgment declaring that the identity of the land
sold to Aznar Brothers by Casimiro and the land sold by the heirs of
Casimiro to Jose R. Ybañez was “not an issue anymore”.
ISSUE:
Whether or not the appeal will prosper.
RULING:
Identity of the lot in litis is no longer a proper issue herein The CA
and the RTC both held that the identity of the property in litis was no
longer an issue to be considered and determined because the parties
did not raise it at the pre-trial. The Spouses Ybañez insist herein,
however, that the RTC and the CA should have made such a finding
nonetheless in view of the materiality of whether the land claimed by
Aznar Brothers was different from Lot No. 18563, the land subject of
their OCT No. 2150.
We clarify that although the Spouses Ybañez’s non-appeal barred them
from assigning errors for purposes of this review, they are not prevented
from now insisting, if only to uphold the judgment of the CA against
Aznar Brothers, that the property in litis was not the same as Lot No.
18563, but they would not be accorded any relief upon those reasons,
even if the Court should find Aznar Brother’s appeal unmeritorious or
utterly frivolous.
Regardless, the holding by both lower courts was proper and correct.
The non-inclusion in the pre-trial order barred the identity of the property
in litis as an issue, for it is basic that any factual issue not included in
the pre-trial order will not be heard and considered at the trial, much
less, on appeal. The parties had the obligation to disclose during the
pre-trial all the issues they intended to raise during the trial, except
those involving privileged or impeaching matters, for the rule is that the
definition of issues during the pre-trial conference will bar the
consideration of others, whether during trial or on appeal.
The waiver of the identity of the property in litis as an issue did not
violate the right of any of the parties herein due to the Rules of Court
having forewarned them in Section 7, Rule 18 of the Rules of Court
that should the action proceed to trial, the pre-trial order would explicitly
define and limit the issues to be tried, and its contents would control
the subsequent course of the action, unless modified before trial to
prevent manifest injustice. Moreover, for the Spouses Ybañez to call
upon the Court now to analyze or weigh evidence all over again upon
such a factual matter would be impermissible considering that the Court
is not a trier of facts. There are exceptional instances in which the Court
has held itself competent to make its own appreciation of the facts.
However, none of the aforementioned exceptions obtains in this case.
Accordingly, the Court, just as the lower courts have been bound, shall
proceed upon the assumption that the property in litis and Lot No. 18563
were one and the same realty.
CA correctly concluded that Aznar Brothers owned Lot No. 18563;
and that the Spouses Ybañez were not buyers in good faith
In its assailed judgment, the CA concluded that the RTC erred in
holding in favor of the Spouses Ybañez observing that the trial court
erred when it held from the totality of the evidence adduced by the
parties, there is no preponderant evidence that the defendants had prior
knowledge of the previous sale of subject property to the plaintiff when
they bought the same from Adriano D. Ybañez.
The Deed of Absolute Sale (Exhibit F) in favor of plaintiff-appellant Aznar
was registered under Act 3344, as amended on March 23, 1964 with
the Register of Deeds of Cebu City. The registration of said deed gave
constructive notice to the whole world including defendant-appellees of
the existence of said deed of conveyance. Defendant-appellees cannot,
therefore, claim to be buyers in good faith of the land in question.
Resultantly, they merely stepped into the shoes of their sellers vis a vis
said land. Since their sellers were not owners of the property in question,
there was nothing that they could have sold to defendant-appellees.
We sustain the CA’s conclusion that the Spouses Ybañez were guilty of
bad faith, and that they acquired Lot No. 18563 from sellers who were
not the owners. Accordingly, we resolve the second error raised herein
in favor of Aznar Brothers. The CA correctly found, that the Spouses
Ybañez held no right to Lot No. 18563 because Adriano, their seller,
and his siblings were not the owners of Lot No. 18563. Indeed, Casimiro
had absolutely conveyed his interest in Lot No. 18563 to Aznar Brothers
under the Deed of Absolute Sale of March 21, 1964 with the marital
consent of Maria Daclan, Casimiro’s surviving spouse and the mother of
Adriano and his siblings.
There is also no question that the Spouses Ybañez were aware of the
conveyance of Lot No. 18563 by Casimiro to Aznar Brothers considering
that the Deed of Absolute Sale of March 21, 1964 between Casimiro
and Aznar Brothers was registered in the book of registry of unregistered
land on the same day pursuant to their agreement. Such registration
constituted a constructive notice of the conveyance on the part of the
Spouses Ybañez pursuant to Section 194 of the Revised Administrative
Code of 1917, as amended by Act No. 3344.
Estoppel by laches did not bar Aznar Brothers’ right over Lot No.
18563
Unexpectedly, the CA disregarded its aforecited correct conclusion on
Aznar Brothers’ ownership of Lot No. 18563, and instead ruled that
estoppel by laches had already barred Aznar Brothers’ “dominical claim”
over Lot No. 18563.
There is absolutely no doubt that in law, plaintiff-appellant had lost its
dominical and possessory claim over the land for its inaction from 1964
when it bought the land up to 1989 when it filed the Complaint in the
trial court – or a long period of 25 years. This is called estoppel by
laches. Aznar Brothers now assails this adverse ruling under its first
assigned error by pointing out that the CA erred in relying on estoppel
by laches, a rule of equity, to bar its “dominical claim” over Lot No.
18563. We hold and declare that the CA’s ruling in favor of the Spouses
Ybañez was devoid of legal and factual support, and should be rightfully
reversed. Laches is the failure or neglect for an unreasonable and
unexplained length of time to do that which by exerting due diligence a
party could and should have done earlier.
The CA incorrectly barred the claim of Aznar Brothers to Lot No. 18563
because of laches. For one, Aznar Brothers immediately registered the
purchase in accordance with Act No. 3344, the law then governing the
registration of unregistered land. Its action in that regard ensured the
protection of the law as to its ownership of the land, and evinced that
it did not abandon its ownership. Verily, its maintaining Lot No. 18563
as an unregistered land from then on should not prejudice its rights;
otherwise, its registration pursuant to law would be set at naught.
Secondly, the supposed acts of possession of Lot No. 18563 exercised
by the Spouses Ybañez from the time of their purchase from Adriano,
including causing it to be surveyed for purposes of the application for
free patent, did not prejudice Aznar Brothers’ interest because the
registration under Act No. 3344 had given constructive notice to the
Spouses Ybañez of its prior acquisition of the land.
Lot No. 18563, not being land of the public domain, was not subject
to the free patent issued to the Spouses Ybañez
The Spouses Ybañez’s position rests on their having been issued the
free patent and OCT No. 2150. The records do not support the position
of the Spouses Ybañez. Aznar Brothers acquired Lot No. 18563 as the
private land of Casimiro. In their Deed of Absolute Sale of March 21,
1964, Casimiro expressly warranted that the land was his “own exclusive
property.” With the ownership of Aznar Brothers being thus established,
the free patent issued to Jose R. Ybañez by the Government was invalid
for the reason that the Government had no authority to dispose of land
already in private ownership. The invalidity of the free patent necessarily
left OCT No. 2150 a patent nullity. As ruled in Heirs of Simplicio Santiago
v. Heirs of Mariano E. Santiago: The settled rule is that a free patent
issued over a private land is null and void, and produces no legal
effects whatsoever. Private ownership of land – as when there is a prima
facie proof of ownership like a duly registered possessory information or
a clear showing of open, continuous, exclusive, and notorious possession,
by present or previous occupants – is not affected by the issuance of
a free patent over the same land, because the Public Land Law applies
only to lands of the public domain. The Director of Lands has no
authority to grant free patent to lands that have ceased to be public in
character and have passed to private ownership. Consequently, a
certificate of title issued pursuant to a homestead patent partakes of the
nature of a certificate issued in a judicial proceeding only if the land G.R. No. 75919 May 7, 1987
covered by it is really a part of the disposable land of the public domain.
MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners,

vs.

COURT OF APPEALS, CITY LAND DEVELOPMENT CORPORATION,

STEPHEN ROXAS, ANDREW LUISON, GRACE LUISON and JOSE DE

MAISIP, respondents.

FACTS:

A complaint for specific performance was filed by Manchester Development

Corporation against City Land Development Corporation to compel the latter
to execute a deed of sale in favor Manchester. Manchester also alleged that
City Land forfeited the former’s tender of payment for a certain transaction
thereby causing damages to Manchester amounting to P78,750,000.00. This
amount was alleged in the BODY of their Complaint but it was

not reiterated in the PRAYER of same complaint. Manchester paid a docket

fee of P410.00 only. Said docket fee is premised on the allegation of
Manchester that their action is primarily for specific performance hence it is
incapable of pecuniary estimation. The court ruled that there is an under
assessment of docket fees hence it ordered Manchester to amend its
complaint. Manchester complied but what it did was to lower the amount of
claim for damages to P10M. Said amount was however again not stated in the
PRAYER.

ISSUE:

Whether or not the amended complaint should be

admitted.

HELD:

No. The docket fee, its computation, should be based on the original complaint.
A case is deemed filed only upon payment of the appropriate docket fee
regardless of the actual date of filing in court. Here, since the proper docket
fee was not paid for the original complaint, it’s as if there is no complaint to

speak of. As a consequence, there is no original complaint duly filed which can
be amended. So, any subsequent proceeding taken in consideration of the
amended complaint is void.
Manchester’s defense that this case is primarily an action for specific
performance is not merited. The Supreme Court ruled that based on the
allegations and the prayer of the complaint, this case is an action for damages
and for specific performance. Hence, it is capable of pecuniary estimation.
Further, the amount for damages in the original complaint was already
provided in the body of the complaint. Its omission in the PRAYER clearly
constitutes an attempt to evade the payment of the proper filing fees. To stop
the happenstance of similar irregularities in the future, the Supreme Court
ruled that from this case on, all complaints, petitions, answers and other similar
pleadings should specify the amount of damages being prayed for not only in
the body of the pleading but also in the prayer, and said damages shall be
considered in the assessment of the filing fees in any case. Any pleading that
fails to comply with this requirement shall not bib accepted nor admitted, or
shall otherwise be expunged from the record.
Sun Insurance vs Hon Asuncion
GR 79937-38 (Feb 13, 1980)
Nature: Petition to review the decision of the Court of Appeals
FACTS:
On 28 Feb 1984, petitioner Sun Insurance Office Ltd (SIOL) filed a complained
with the Makati RTC for the consignation of a premium refund on a fire
insurance policy with a prayer for judicial declaration of nullity against private
respondent Manuel Uy Po Tiong who was declared in default for failure to file
the required answer with the required period.
On 18 March 1984, Po Tiong filed a complaint in the RTC of Quezon City for
the refund of the premiums and the issuance of a writ of preliminary attachment
initially against petitioner SIOL, and thereafter including E.B. Philipps and D.J.
Warby as additional defendants where the complaint sought payment for
damages, INFERRED FROM THE BODY OF THE COMPLAINT to be about
P50million (complaint did not quantify the amount of damages sought)
however, only P210.00 was paid as docket fee, which prompted the objection
of the petitioners counsel; which was later disregarded by presiding Judge
Castro.
Upon the order of the SC, the records of the case and 22 other cases in the
RTC, QC which were under investigation for under-assessment of docket fees
were transmitted. These cases were re- raffled with the exclusion of Judge
Castro. RTC judges were later directed to reassess the docket fees in case of
deficiency and order its payment with a requirement that clerks of court to issue
certificates of re-assessment of docket fees, litigants were likewise required to
specify in their pleadings the amount sought to be recovered in their
complaints.
After the re-assessment of the claims for damages amounted to
P64,601,623.70, paying the corresponding docket fees amounting to
P182,824.90. Petitioner allege that while private respondent was able to pay
the docket fees, the docket fee that should be paid should amount to about
P257,810.49. Not having paid the total amount of docket fees, the petitioners’
claim that the complaint should be dismissed taking into account the latest
ruling of the Court in Manchester Development Corporation vs CA which
provides that “the Court acquires jurisdiction over any case ONLY UPON
PAYMENT OF THE PRESCRIBED DOCKET FEE. An amendment of the
complaint or similar pleading will not vest jurisdiction in the Court xxx”. Private
respondent contends that the ruling on Manchester cannot apply in this case
retroactively, hence this petition.
3. Where the trial court acquires jurisdiction over a claim by the filing of
the appropriate pleading and payment of the prescribed filing fee but
subsequently, the judgment awards a claim not specified in the
pleading, or if specified the same has been left for determination by
the court, the additional filing fee therefor shall constitute a lien on the
judgment. It shall be the responsibility of the Clerk of Court or his duly
authorized deputy to enforce said lien and assess and collect the
additional fee.

ISSUE:
Hence, the case is DISMISSED.
Whether or not the court was able to acquire jurisdiction over the case on the
ground of non-payment of correct and proper docket fee.

HELD:

Yes the Court was able to acquire jurisdiction over the case despite the non-
payment of correct and proper docket fee.

RULING: In the present case, a more liberal interpretation of the rules in is

called for considering that, unlike in Manchester, private respondent
demonstrated his willingness to abide by the rules by paying the additional
docket fees as required. In the question that the docket fee that was paid was
still insufficient, the Court ruled that it is a matter which the clerk of the lower
court and/or his duly authorized docket clerk or clerk-in-charge should
determine and thereafter, if any amount is found due, he must require the
private respondent to pay the same. Thus the Court laid out the following:

1. It is not simply the filing of the complaint but the payment of the
prescribed docket fee, that vests a trial court with jurisdiction over the
subject matter or nature of action. Where such filing is not
accompanied by payment of the docket fee, the court may allow
payment of the fee within a reasonable time but not beyond the
prescriptive period.
2. Same rule applies to permissive counterclaims, 3rd party claims and
similar pleadings. The court may allow payment of said fee within a
reasonable time but in no case beyond its applicable prescriptive
period or reglementary period.

BALLATAN vs. CA
G.R. No. 125683 March 2, 1999
FACTS:
The parties herein are owners of adjacent lots located at Block No. 3,
Poinsettia Street, Araneta University Village, Malabon, Metro Manila. Lot No.
24, is registered in the name of petitioners Eden Ballatan and spouses Betty
Martinez and Chong Chy Ling. Lots Nos. 25 and 26, are registered in the name
of respondent Gonzalo Go, Sr. On Lot No. 25, respondent Winston Go, son of
Gonzalo Go, Sr., constructed his house. Adjacent to Lot No. 26 is Lot No. 27,
and is registered in the name of respondent Li Ching Yao. In 1985, petitioner
Ballatan constructed her house on Lot No. 24. During the construction, she
noticed that the concrete fence and side pathway of the adjoining house of
respondent Winston Go encroached on the entire length of the eastern side of
her property.
On June 2, 1985, Engineer Quedding found that Lot No. 24 lost approximately
25 square meters on its eastern boundary that Lot No. 25, although found to
have encroached on Lot No. 24, did not lose nor gain any area; that Lot No.
26 lost some three (3) square meters which, however, were gained by Lot No.
27 on its western boundary. In short, Lots Nos. 25, 26 and 27 moved westward
to the eastern boundary of Lot No. 24. the AIA to the discrepancy of the land
area in her title and the actual land area received from them. The AIA
authorized another survey of the land by Engineer Jose N. Quedding.
On the basis of this survey, petitioner Ballatan made a written demand on
respondents Go to remove and dismantle their improvements on Lot No. 24.
Respondents Go refused. The parties including Li Ching Yao, however, met
several times to reach an agreement one matter. On April 1, 1986, petitioner
Ballatan instituted against respondents Go a Civil Case for recovery of
possession before the RTC, Malabon. The Go's filed their "Answer with Third-
Party Complaint" impleading as third-party defendants respondents Li Ching
Yao, the AIA and Engineer Quedding.
On August 23, 1990, RTC decided in favor of the Petitioners. Respondents
Go appealed. On March 25, 1996, the CA modified the decision of the trial
court. It affirmed the dismissal of the third-party complaint against the AIA but
reinstated the complaint against Li Ching Yao and Jose Quedding. Hence, this
petition for review on certiorari. admission by respondent CA of the third-party
complaint by respondents Go against Petitioners question the the AIA, Jose
Quedding and Li Ching Yao. Petitioners claim that the third-party complaint
should not have been considered by the Court of Appeals for lack of jurisdiction
due to third-party plaintiffs' failure to pay the docket and filing fees before the
trial court..
ISSUE:
WON CA erred in admitting the third party complaint despite the failure despite
the failure of respondents GO’s to pay the docket and filing fees before the trial
court.
RULING: The third-party complaint in the instant case arose from the
complaint of petitioners against respondents Go. The complaint filed was
foraccion publiciana, i.e., the recovery of possession of real property which is
a real action. The rule in this jurisdiction is that when an action is filed in court,
the complaint must be accompanied the payment of the requisite docket and
filing fees. In real actions, the docket and filing fees are based on the value of
the property and the amount of damages claimed, if any If the complaint is filed
but the fees are not paid at the time of filing, the court acquires jurisdiction
upon full payment of the fees within a reasonable time as the court may grant,
barring prescription. Where the fees prescribed for the real action have been
paid but the fees of certain related damages are not, the court, although having
jurisdiction over the real action, may not have acquired jurisdiction over the
accompanying claim for damages. Accordingly, the court may expunge those
claims for damages, or allow, on motion, a reasonable time for amendment of
the complaint so as to allege the precise amount of damages and accept
payment of the requisite legal fee. If there are unspecified claims, the
determination of which may arise after the filing of the complaint or similar
pleading, the additional filing fee thereon shall constitute a lien on the judgment
award. The same rule also applies to third-party claims and other similar
pleadings. In the case at bar, the third-party complaint filed by respondents Go
was incorporated in their answer to the complaint. The third-party complaint
sought the same remedy as the principal complaint but added a prayer for
attorney's fees and costs without specifying their amounts. The Court of
Appeal did not err in awarding damages despite the Go's failure to specify the
amount prayed for and pay the corresponding additional filing fees thereon.
The claim for attorney's fees refers to damages arising after the filing of the
complaint against the Go's. The additional filing fee on this claim is deemed to
constitute a lien on the judgment award.
FIRST SARMIENTO PROPERTY HOLDINGS vs. PBCOM
FACTS:
On June 19, 2002,First Sarmiento obtained from PBCOM a P40 million loan,
which was secured by a real estate mortgage over parcels of land. On
September 15, 2003, the loan was increased to P100,000,000.00. On January
2, 2006, PBCOM filed a Petition for Extrajudicial Foreclosure of Real Estate
Mortgage, claiming that it sent First Sarmiento several demand letters, yet First
Sarmiento still failed to pay the principal amount and accrued interest on the
loan.
On December 27, 2011, First Sarmiento attempted to file a Complaint for
annulment of real estate mortgage with the RTC. However, the Clerk of Court
refused to accept the Complaint in the absence of the mortgaged properties'
tax declarations, which would be used to assess the docket fees.On December
29, 2011, the mortgaged properties were auctioned and sold to PBCOM as
the highest bidder.
On January 2, 2012, First Sarmiento filed a Complaint for annulment of real
estate mortgage and paid a filing fee of P5,545.00. First Sarmiento claimed in
its Complaint that it never received the loan of P100 million from PBCOM, yet
the latter still sought the extrajudicial foreclosure of real estate mortgage. RTC
issued an ex-parte temporary restraining order for 72 hours, enjoining the
registration of the certificate of sale with the Registry of Deeds-Bulacan and
directed the parties to observe the status quo ante. PBCOM opposed that RTC
failed to acquire jurisdiction over First Sarmiento's Complaint because the
action for annulment of mortgage was a real action; thus, the filing fees filed
should have been based on the fair market value of the mortgaged properties.
On January 24, 2012, the Clerk of Court and Ex-Officio Sheriff of Malolos City,
Bulacan issued a certificate of sale to PBCOM. On April 3, 2012, RTC-Malolos
dismissed the Complaint for lack of jurisdiction and ruled that following the
ruling in the case of HGC vs. R. II Builders and NHA, that an action for
annulment or rescission of contract does not operate to efface the true
objective and nature of the action which is to recover real property.
ISSUE:
Whether or not RTC obtained jurisdiction over First Sarmiento's Complaint for
annulment of real estate mortgage.
RULING:
YES! In the case at bar, the underlying question for this Court's resolution
pertains to jurisdiction, or to be more precise, whether the Regional Trial Court
attained jurisdiction over petitioner's Complaint with the amount of docket fees
paid.
Annulment of real estate mortgage has a subject incapable of pecuniary
estimation because it was not intended to recover ownership or possession of
the mortgaged properties sold to respondent during the auction sale.
Jurisdiction is "the power and authority of a court to hear, try and decide a
case" brought before it for resolution. Courts exercise the powers conferred on
them with binding effect if they acquire jurisdiction over: "(a) the cause of action
or the subject matter of the case; (b) the thing or the res; (c) the parties; and
(d) the remedy."
Jurisdiction over the parties is the court's power to render judgment that are
binding on the parties. The courts acquire jurisdiction over the plaintiffs when
they file their initiatory pleading, while the defendants come under the court's
jurisdiction upon the valid service of summons or their voluntary appearance
in court.
Jurisdiction over the cause of action or subject matter of the case is the court's
authority to hear and determine cases within a general class where the
proceedings in question belong. This power is conferred by law and cannot be
acquired through stipulation, agreement between the parties, or implied waiver
due to the silence of a party.
Jurisdiction is conferred by the Constitution, with Congress given the plenary
power, for cases not enumerated in Article VIII, Section 5 of the Constitution,
to define, prescribe, and apportion the jurisdiction of various courts.
Batas Pambansa Blg. 129, or the Judiciary Reorganization Act of 1980 as
amended by Republic Act No. 7691, provided for the jurisdictional division
between the first and second level courts by considering the complexity of the
cases and the experience needed of the judges assigned to hear the cases.
In criminal cases, first level courts are granted exclusive original jurisdiction to
hear complaints on violations of city or municipal ordinances and offenses
punishable with imprisonment not exceeding six (6) years. In contrast, second
level courts, with more experienced judges sitting at the helm, are granted
exclusive original jurisdiction to preside over all other criminal cases not within
the exclusive jurisdiction of any other court, tribunal, or body.
The same holds true for civil actions and probate proceedings, where first level
courts have the power to hear cases where the value of personal property,
estate, or amount of the demand does not exceed P100,000.00 or
P200,000.00 if in Metro Manila. First level courts also possess the authority to
hear civil actions involving title to, possession of, or any interest in real property
where the value does not exceed P20,000.00 or P50,000.00 if the real property
is situated in Metro Manila. Second level courts then assume jurisdiction when
the values involved exceed the threshold amounts reserved for first level
courts or when the subject of litigation is incapable of pecuniary estimation.
First level courts were also conferred with the power to hear the relatively
uncomplicated cases of forcible entry and unlawful detainer, while second
level courts are authorized to hear all actions in admiralty and maritime
jurisdiction with claims above a certain threshold amount. Second level courts
are likewise authorized to hear all cases involving the contract of marriage and
marital relations,78 in recognition of the expertise and probity required in
deciding issues which traverse the marital sphere.
Section 19(1) of Batas Pambansa Blg. 129, as amended, provides Regional
Trial Courts with exclusive, original jurisdiction over "all civil actions in which
the subject of the litigation is incapable of pecuniary estimation."
Lapitan v. Scandia instructed that to determine whether the subject matter of
an action is incapable of pecuniary estimation, the nature of the principal action
or remedy sought must first be established. This finds support in this Court's
repeated pronouncement that jurisdiction over the subject matter is
determined by examining the material allegations of the complaint and the
relief sought.
A review of the jurisprudence of this Court indicates that in determining
whether an action is one the subject matter of which is not capable of
pecuniary estimation, this Court has adopted the criterion of first ascertaining
the nature of the principal action or remedy sought. If it is primarily for the
recovery of a sum of money, the claim is considered capable of pecuniary
estimation, and whether jurisdiction is in the municipal courts or in the courts
of first instance would depend on the amount of the claim. However, where the
basic issue is something other than the right to recover a sum of money, or
where the money claim is purely incidental to, or a consequence of, the
principal relief sought like in suits to have the defendant perform his part of the
contract (specific performance) and in actions for support, or for annulment of
a judgment or to foreclose a mortgage, this Court has considered such actions
as cases where the subject of the litigation may not be estimated in terms of
money, and are cognizable exclusively by courts of first instance.
Finally, there is a need to reassess the place of Home Guaranty v. R-II Builders
in our jurisprudence.
In Home Guaranty, R-II Builders, Inc. (R-II Builders) filed a Complaint for the
rescission of the Deed of Assignment and Conveyance it entered into with
Home Guaranty Corporation and National Housing Authority. The Complaint
was initially determined to have a subject that is incapable of pecuniary
estimation and the docket fees were assessed and paid accordingly.
R-II Builders later filed a motion to admit its Amended and Supplemental
Complaint, which deleted its earlier prayer for the resolution of its Deed of
Assignment and Conveyance, and prayed for the conveyance of title to and/or
possession of the entire Asset Pool. The Regional Trial Court ruled that the
Amended and Supplemental Complaint involved a real action and directed R-
II Builders to pay the correct docket fees.
Instead of paying the additional docket fees, R-II Builders withdrew its
Amended and Supplemental Complaint and instead filed a motion to admit its
Second Amended Complaint, which revived the prayer in its original Complaint
to resolve the Deed of Assignment and Conveyance and deleted the causes
of action for conveyance of title to and/or possession of the entire Asset Pool
in its Amended and Supplemental Complaint. The Regional Trial Court granted
the motion to admit the Second Amended Complaint, ratiocinating that the
docket fees to the original Complaint had been paid; that the Second Amended
Complaint was not intended to delay the proceedings; and that the Second
Amended Complaint was consistent with R-II Builders' previous pleadings.
The CA upheld the ruling of the RTC and reiterated that the case involved a
subject that was incapable of pecuniary estimation. However, Home Guaranty
reversed the CA Decision, ruling that the Complaint and the Amended and
Supplemental Complaint both involved prayers for the conveyance and/or
transfer of possession of the Asset Pool, causes of action which were
undoubtedly real actions. Thus, the correct docket fees had not yet been paid.
Granted that R-II Builders is not claiming ownership of the Asset Pool because
its continuing stake is, in the first place, limited only to the residual value
thereof, the conveyance and/or transfer of possession of the same properties
sought in the original complaint and Amended and Supplemental Complaint
both presuppose a real action for which appropriate docket fees computed on
the basis of the assessed or estimated value of said properties should have
been assessed and paid.
Home Guaranty stated that to determine whether an action is capable or
incapable of pecuniary estimation, the nature of the principal action or remedy
prayed for must first be determined. Nonetheless, in citing Ruby Shelter
Builders v. Formaran, Home Guaranty looked beyond R-II Builder's principal
action for annulment or rescission of contract to purportedly unmask its true
objective and nature of its action, which was to recover real property.
In a dissenting opinion in the Home Guaranty June 22, 2011 Resolution that
dismissed R-II Builders' motion for reconsideration, Associate Justice
Presbitero Velasco, Jr. stressed that one must first look at the principal action
of the case to determine if it is capable or incapable of pecuniary estimation:
Furthermore, the judge is not aware of the evidence to be presented by either
party when the complaint is filed; thus, there is no reliable basis that can be
used to infer the true objective of the complaint. It is imperative then that the
competing claims as basis of subject matter jurisdiction be textually based,
finding its basis in the body of the complaint and the relief sought without
reference to extraneous facts not alleged or evidence still to be presented.
The contrary rule espoused in Home Guaranty is thereby set aside.

Whether or not the case is a real action, and whether or not the proper docket
fees were paid, one must look to the main cause of action of the case. In all
instances, in the original Complaint, the Amended and Supplemental
Complaint and the Amended Complaint, it was all for the resolution or
rescission of the [Deed of Assignment and Conveyance], with the prayer for
the provisional remedy of injunction and the appointment of a trustee and
subsequently a receiver. In the Second Amended Complaint, the return of the
remaining assets of the asset pool, if any, to R-II Builders would only be the
result of the resolution or rescission of the Deed.

Even if real property in the Asset Pool may change hands as a result of the
case in the trial court, the fact alone that real property is involved does not
make that property the basis of computing the docket fees. This finds support
in numerous decisions where this Court proclaimed that the test to determine
whether an action is capable or incapable of pecuniary estimation is to
ascertain the nature of the principal action or relief sought. Thus, if the principal
relief sought is the recovery of a sum of money or real property, then the action
is capable of pecuniary estimation. However, if the principal relief sought is not
for the recovery of money or real property and the money claim is only a
consequence of the principal relief, then the action is incapable of pecuniary
estimation Considering that the principal remedy sought by R-II Builders was
the resolution of the Deed of Assignment and Conveyance, the action was
incapable of pecuniary estimation and Home

Guaranty erred in treating it as a real action simply because the principal action
was accompanied by a prayer for conveyance of real property.

It is clear that subject matter jurisdiction cannot be dependent on the supposed

ultimate motive or true objective of the complaint because this will require the
judge to speculate on the defenses of the plaintiff beyond the material
allegations contained in the complaint. Likewise, in attempting to pinpoint the
true objective of the complaint at the initial stages of trial, the judge might end
up dictating the result outside of the evidence still to be presented during the
trial, opening up the judge to charges of partiality and even impropriety.

Sante vs Claravall
Facts
Respondent filed before the RTC of Baguio City a complaint for damages4
against petitioners. In her complaint, respondent alleged that while she was
inside the Police Station of Natividad, Pangasinan, and in the presence of
other persons and police officers, petitioner Irene Sante uttered words, which
when translated in English are as follows, "How many rounds of sex did you
have last night with your boss, Bert? You fuckin’ bitch!" Bert refers to Albert
Gacusan, respondent’s friend and one (1) of her hired personal security
guards detained at the said station and who is a suspect in the killing of
petitioners’ close relative. Petitioners also allegedly went around Natividad,
Pangasinan telling people that she is protecting and cuddling the suspects in
the aforesaid killing. Thus, respondent prayed that petitioners be held liable to
pay moral damages in the amount of ₱300,000.00; ₱50,000.00 as exemplary
damages; ₱50,000.00 attorney’s fees; ₱20,000.00 litigation expenses; and
costs of suit.
Petitioners filed a Motion to Dismiss5 on the ground that it was the MTC and
not the RTC of Baguio, that had jurisdiction over the case. They argued that
the amount of the claim for moral damages was not more than the jurisdictional
amount of ₱300,000.00, because the claim for exemplary damages should be
excluded in computing the total claim.
RTC: Denied; the total claim of respondent amounted to ₱420,000.00 which
was above the jurisdictional amount for MTCCs outside Metro Manila. The trial
court also later issued Orders on July 7, 20048 and July 19, 2004,9
respectively reiterating its denial of the motion to dismiss and denying
petitioners’ motion for reconsideration.
Petitioners filed on August 2, 2004, a Petition for Certiorari and Prohibition,10
docketed as before the Court of Appeals.
Meanwhile, on July 14, 2004, respondent and her husband filed an Amended
Complaint11 increasing the claim for moral damages from ₱300,000.00 to
₱1,000,000.00. Petitioners filed a Motion to Dismiss with Answer Ad Cautelam
and Counterclaim, but the trial court denied their motion in an Order12 dated
September 17, 2004.
Hence, petitioners again filed a Petition for Certiorari and Prohibition13 before
the Court of Appeals, claiming that the trial court committed grave abuse of
discretion in allowing the amendment of the complaint to increase the amount
of moral damages from ₱300,000.00 to ₱1,000,000.00.
CA:
Petition granted; the case clearly falls under the jurisdiction of the MTCC as
the allegations show that plaintiff was seeking to recover moral damages in
the amount of ₱300,000.00, which amount was well within the jurisdictional
amount of the MTCC. The Court of Appeals added that the totality of claim rule
used for determining which court had jurisdiction could not be applied to the
instant case because plaintiff’s claim for exemplary damages was not a
separate and distinct cause of action from her claim of moral damages, but
merely incidental to it. Thus, the prayer for exemplary damages should be
excluded in computing the total amount of the claim.
CA (Motion to Dismiss Cautelam Petition): Denied
• That the total or aggregate amount demanded in the complaint
constitutes the basis of jurisdiction. The Court of Appeals did not find
merit in petitioners’ posture that the claims for exemplary damages
and attorney’s fees are merely incidental to the main cause and should
not be included in the computation of the total claim.
• The Court of Appeals additionally ruled that respondent can amend
her complaint by increasing the amount of moral damages from
₱300,000.00 to ₱1,000,000.00, on the ground that the trial court has
jurisdiction over the original complaint and respondent is entitled to
amend her complaint as a matter of right under the Rules.
Issues:
1. Whether or not RTC has jurisdiction.
2. Whether or not RTC committed grave abuse by allowing the amendment.
Ruling:
1. Yes.
Section 19(8) of Batas Pambansa Blg. 129,17 as amended by Republic Act
No. 7691,18 states:
SEC. 19. Jurisdiction in civil cases. – Regional Trial Courts shall exercise
exclusive original jurisdiction:
xxxx
(8) In all other cases in which the demand, exclusive of interest, damages of
whatever kind, attorney’s fees, litigation expenses, and costs or the value of
the property in controversy exceeds One hundred thousand pesos
(₱100,000.00) or, in such other cases in Metro Manila, where the demand,
exclusive of the abovementioned items exceeds Two hundred thousand pesos
(₱200,000.00).
Section 5 of Rep. Act No. 7691 further provides:
SEC. 5. After five (5) years from the effectivity of this Act, the jurisdictional
amounts mentioned in Sec. 19(3), (4), and (8); and Sec. 33(1) of Batas
Pambansa Blg. 129 as amended by this Act, shall be adjusted to Two hundred
thousand pesos (₱200,000.00). Five (5) years thereafter, such jurisdictional
amounts shall be adjusted further to Three hundred thousand pesos
(₱300,000.00): Provided, however, That in the case of Metro Manila, the
abovementioned jurisdictional amounts shall be adjusted after five (5) years
from the effectivity of this Act to Four hundred thousand pesos (₱400,000.00).
Relatedly, Supreme Court Circular No. 21-99 was issued declaring that the
first adjustment in jurisdictional amount of first level courts outside of Metro
Manila from ₱100,000.00 to ₱200,000.00 took effect on March 20, 1999.
Meanwhile, the second adjustment from ₱200,000.00 to ₱300,000.00 became
effective on February 22, 2004 in accordance with OCA Circular No. 65-2004
issued by the Office of the Court Administrator on May 13, 2004.
Based on the foregoing, there is no question that at the time of the filing of the
complaint on April 5, 2004, the MTCC’s jurisdictional amount has been
adjusted to ₱300,000.00.
But where damages is the main cause of action, should the amount of moral
damages prayed for in the complaint be the sole basis for determining which
court has jurisdiction or should the total amount of all the damages claimed
regardless of kind and nature, such as exemplary damages, nominal
damages, and attorney’s fees, etc., be used?
In this regard, Administrative Circular No. 09-94 is instructive:
2. The exclusion of the term "damages of whatever kind" in determining the
jurisdictional amount under Section 19 (8) and Section 33 (1) of B.P. Blg. 129,
as amended by R.A. No. 7691, applies to cases where the damages are
merely incidental to or a consequence of the main cause of action. However,
in cases where the claim for damages is the main cause of action, or one of
the causes of action, the amount of such claim shall be considered in
determining the jurisdiction of the court.
In the instant case, the complaint filed in Civil Case No. 5794-R is for the
recovery of damages for the alleged malicious acts of petitioners. The
complaint principally sought an award of moral and exemplary damages, as
well as attorney’s fees and litigation expenses, for the alleged shame and
injury suffered by respondent by reason of petitioners’ utterance while they
were at a police station in Pangasinan. It is settled that jurisdiction is conferred
by law based on the facts alleged in the complaint since the latter comprises
a concise statement of the ultimate facts constituting the plaintiff’s causes of
action.20 It is clear, based on the allegations of the complaint, that
respondent’s main action is for damages. Hence, the other forms of damages
being claimed by respondent, e.g., exemplary damages, attorney’s fees and
litigation expenses, are not merely incidental to or consequences of the main
action but constitute the primary relief prayed for in the complaint.1avvphi1
In Mendoza v. Soriano,21 it was held that in cases where the claim for
damages is the main cause of action, or one of the causes of action, the
amount of such claim shall be considered in determining the jurisdiction of the
court. In the said case, the respondent’s claim of ₱929,000.06 in damages and
₱25,000 attorney’s fees plus ₱500 per court appearance was held to represent
the monetary equivalent for compensation of the alleged injury. The Court
therein held that the total amount of monetary claims including the claims for
damages was the basis to determine the jurisdictional amount.
Also, in Iniego v. Purganan,22 the Court has held:
The amount of damages claimed is within the jurisdiction of the RTC, since it
is the claim for all kinds of damages that is the basis of determining the
jurisdiction of courts, whether the claims for damages arise from the same or
from different causes of action.
Considering that the total amount of damages claimed was ₱420,000.00, the
Court of Appeals was correct in ruling that the RTC had jurisdiction over the
case.
2. No.
Lastly, we find no error, much less grave abuse of discretion, on the part of the
Court of Appeals in affirming the RTC’s order allowing the amendment of the
original complaint from ₱300,000.00 to ₱1,000,000.00 despite the pendency
of a petition for certiorari filed before the Court of Appeals. While it is a basic
jurisprudential principle that an amendment cannot be allowed when the court
has no jurisdiction over the original complaint and the purpose of the
amendment is to confer jurisdiction on the court,23 here, the RTC clearly had
jurisdiction over the original complaint and amendment of the complaint was
then still a matter of right.
Gomez vs Montalban
G.R. No. 174414
March 14, 2008
FACTS:
In August 26, 1998 Ma. Lita Montalban obtained a loan from Elmer
Gomez in the sum of P40,000.00 with a voluntary proposal on her part to pay
15% interest per month. She issued a postdated check. When the loan was
due on October 26, 1998 the check was dishonored for reason “Account
Closed.” Despite repeated demands, Montalban failed to pay. On July 9, 2002,
Montalban’s loan obligation stood at P 239,000.00 inclusive of interest charges
for 32 months. Thus on May 30, 2003, Gomez filed a complaint in the RTC
Davao City and prays for the amount of P238, 000 with interest charges.
RTC rendered a decision in favor of Gomez and ordered Montalban
to pay P40,000 as principal amount, P57,600.00 representing interest
and P15,000.00 representing attorneys fees.
Montalban filed a Petition for Relief from Judgment alleging the following:
1. RTC had no jurisdiction as the principal amount being claimed by
petitioner was only P40,000.00, an amount falling within the
jurisdiction of the Municipal Trial Court.
2. There was no effective service of summons upon her since there was
no personal service of the same. The summons was received by one
Mrs. Alicia dela Torre, who was not authorized to receive summons or
other legal pleadings or documents on respondents
behalf. Respondent attributes her failure to file an Answer to fraud,
accident, mistake or excusable negligence.
RTC granted Montalban’s Petition for Relief of Judgment. Gomez now
filed the present petition for review on certiorari to the Supreme Court.
ISSUES:
1. Whether or not the Regional Trial Court has jurisdiction over the case,
damages and attorneys where the principal amount of the obligation
is P40,000.00 but the amount of the demand per allegation of the
complaint is P238,000.00.
2. Whether or not the RTC erred in granting Montalban’s Petition Relief
of Judgment.
HELD:
1. YES.
The jurisdiction of the court is determined by law and the averments in the
complaint and the character of the relief sought.
The Court gleans from the foregoing that petitioners cause of action is the
respondents violation of their loan agreement. In that loan agreement,
respondent expressly agreed to pay the principal amount of the loan, plus 15%
monthly interest. Consequently, petitioner is claiming and praying for in his
Complaint the total amount ofP238,000.00, already inclusive of the interest on
the loan which had accrued from 1998.Since the interest on the loan is a
primary and inseparable component of the cause of action, not merely
incidental thereto, and already determinable at the time of filing of the
Complaint, it must be included in the determination of which court has the
jurisdiction over petitioners case. Using as basis the P238,000.00 amount
being claimed by petitioner from respondent for payment of the principal loan
and interest, this Court finds that it is well within the jurisdictional amount fixed
by law for RTCs.
2. YES.
1. Petition for relief under Rule 38 of the Rules of Court is only available
against a final and executory judgment.
Since respondent allegedlyreceived a copy of the Decision dated 4 May
2004 on 14 May 2004, and she filed the Petition for Relief from Judgment
on 28 May 2004, judgment had not attained finality. The 15-day period to file
a motion for reconsideration or appeal had not yet lapsed. Hence, resort by
respondent to a petition for relief from judgment under Rule 38 of the Rules of
Court was premature and inappropriate.
2b. FRAUD. Fraud, on the other hand, must be extrinsic or collateral,
that is, the kind which prevented the aggrieved party from having a trial or
presenting his case to the court, or was used to procure the judgment without
fair submission of the controversy. This is not present in the case at hand as
respondent was not prevented from securing a fair trial and was given the
opportunity to present her case.
3. A petition for relief from judgment is an equitable remedy that is allowed only
in exceptional cases where there is no other available or adequate
remedy. When a party has another remedy available to him, which may be
either a motion for new trial or appeal from an adverse decision of the trial
court, and he was not prevented by fraud, accident, mistake or excusable
negligence from filing such motion or taking such appeal, he cannot avail
himself of this petition.
In this case, even assuming that the RTC had no jurisdiction over
respondent on account of the non-service upon her of the summons and
complaint, the remedy of the respondent was to file a motion for the
reconsideration of the 4 May 2004 Decision by default or a motion for new trial
within 15 days from receipt of notice thereof. This is also without prejudice to
respondents right to file a petition for certiorari under Rule 65 of the Rules of
Court for the nullification of the order of default of the court a quo and the
proceedings thereafter held including the decision, the writ of execution, and
the writ of garnishment issued by the RTC, on the ground that it acted without
jurisdiction.

2. Based on respondents allegations in her Petition for Relief before the RTC,
she had no cause of action for relief from judgment.
Based on Rule 38 of the Rules of Court, the court may grant relief from
judgment only when a judgment or final order is entered, or any other
proceeding is taken against a party in any court through fraud, accident,
mistake, or excusable negligence. In the case at bar, Montalban in her petition
for relief of judgment contended that judgment was entered against her
through mistake or fraud, because she was not duly served with summons as
it was received by a Mrs. Alicia dela Torre who was not authorized to receive
summons or other legal processes on her behalf.

2a. MISTAKE. As used in Section 1, Rule 38 of the Rules of Court,

mistake refers to mistake of fact, not of law, which relates to the case. The
word mistake, which grants relief from judgment, does not apply and was never
intended to apply to a judicial error which the court might have committed in
the trial. Such errors may be corrected by means of an appeal. This does not
exist in the case at bar, because respondent has in no wise been prevented
from interposing an appeal.

Heirs of Sebe vs. Heirs of Sevilla
G.R. No. 174497 October 12, 2009
Facts:
Spouses Generoso and Aurelia Sebe had been the owner for over 40
years of two unregistered lots in Dipolog City with a total assessed value of
P9,910.00. Sevilla then caused the Sebes to sign documents entitled affidavits
of quitclaim. Being illiterate, they relied on Sevilla’s explanation that what they
signed were "deeds of real estate mortgage" covering a loan that they got from
him. Although the documents which turned out to be deeds conveying
ownership over the two lots to Sevilla for P10,000.00 were notarized, the
Sebes did not appear before any notary public. Using the affidavits of
quitclaim, Sevilla applied for and obtained free patent titles covering the two
lots. Subsequently, he mortgaged the lots to Technology and Livelihood
Resource Center for P869,555.00.
Despite demands by the Sebes, Sevilla refused to return the lots,
forcing them to hire a lawyer and incur expenses of litigation. Spouses Sebe
and their daughter, Lydia filed with the RTC of Dipolog City a complaint against
defendants Sevilla and Technology and Livelihood Resources Center for
Annulment of Document, Reconveyance and Recovery of Possession of two
lots, which had a total assessed value of P9,910.00, plus damages. In his
Answer Sevilla insisted that he bought the lots from the Sebes in a regular
manner. While the case was pending before the RTC, Generoso died so his
wife and children substituted him. Parenthetically, with Sevilla’s death in 2006,
his heirs substituted him as respondents in this case.
The RTC dismissed the case for lack of jurisdiction over the subject
matter considering that the ultimate relief that the Sebes sought was the
reconveyance of title and possession over two lots that had a total assessed
value of less than P20,000.00. Under the law, said the RTC, it has jurisdiction
over such actions when the assessed value of the property exceeds
P20,000.00, otherwise, jurisdiction shall be with the first level courts. The RTC
concluded that the Sebes should have filed their action with the Municipal Trial
Court (MTC) of Dipolog City.
The Sebes then filed a motion for reconsideration. They pointed out
that the RTC mistakenly classified their action as one involving title to or
possession of real property when, in fact, it was a case for the annulment of
the documents and titles that Sevilla got. Since such an action for annulment
was incapable of pecuniary estimation, it squarely fell within the jurisdiction of
the RTC as provided in Sec. 19 of Batas Pambansa 129, as amended.
To prove their point the Sebes cited the cases of De Rivera and
Copioso. But the RTC denied the Sebes’ motion for reconsideration, pointing
out that the Copioso ruling had already been overturned by Spouses Huguete
v. Spouses Embudo. Before Huguete, cancellation of titles, declaration of
deeds of sale as null and void and partition were actions incapable of
pecuniary estimation. Now, however, the jurisdiction over actions of this
nature, said the RTC, depended on the valuation of the properties. In this case,
the MTC had jurisdiction because the assessed value of the lots did not exceed
P20,000.00.
Issue:
Whether the Sebes’s action involving the two lots falls within the
jurisdiction of the RTC?
Held:
No. The Sebes’ claim that their action is, first, for the declaration of
nullity of the documents of conveyance that Sevilla tricked them into signing
and, second, for the reconveyance of the certificate of title for the two lots that
Sevilla succeeded in getting. The subject of their action is, they conclude,
incapable of pecuniary estimation.
An action "involving title to real property" means that the plaintiff’s
cause of action is based on a claim that he owns such property or that he has
the legal rights to have exclusive control, possession, enjoyment, or
disposition of the same. Title is the "legal link between (1) a person who owns
property and (2) the property itself."
"Title" is different from a "certificate of title" which is the document of
ownership under the Torrens system of registration issued by the government
through the Register of Deeds. While title is the claim, right or interest in real
property, a certificate of title is the evidence of such claim.
Another way of looking at it is that, while "title" gives the owner the
right to demand or be issued a "certificate of title," the holder of a certificate of
title does not necessarily possess valid title to the real property. The issuance
of a certificate of title does not give the owner any better title than what he
actually has in law. Thus, a plaintiff’s action for cancellation or nullification of a
certificate of title may only be a necessary consequence of the defendant’s
lack of title to real property. Further, although the certificate of title may have
been lost, burned, or destroyed and later on reconstituted, title subsists and
remains unaffected unless it is transferred or conveyed to another or subjected
to a lien or encumbrance
 Thus the Sebes claim ownership because according to them, they
never transferred ownership of the same to anyone. Such title, they insist, has
remained with them untouched throughout the years, excepting only that in
1991 they constituted a real estate mortgage over it in Sevilla’s favor. The
Sebes alleged that Sevilla violated their right of ownership by tricking them into
signing documents of absolute sale, rather than just a real estate mortgage to
secure the loan that they got from him. Assuming that the Sebes can prove
that they have title to or a rightful claim of ownership over the two lots, they
would then be entitled, first, to secure evidence of ownership or certificates of
title covering the same and, second, to possess and enjoy them. The court, in
this situation, may in the exercise of its equity jurisdiction and without ordering
the cancellation of the Torrens titles issued to Sevilla, direct the latter to
reconvey the two lots and their corresponding Torrens titles to them as true
owners.
The present action is, therefore, not about the declaration of the nullity
of the documents or the reconveyance to the Sebes of the certificates of title
covering the two lots. These would merely follow after the trial court shall have
first resolved the issue of which between the contending parties is the lawful
owner of such lots, the one also entitled to their possession. Based on the
pleadings, the ultimate issue is whether or not defendant Sevilla defrauded the
Sebes of their property by making them sign documents of conveyance rather
than just a deed of real mortgage to secure their debt to him. The action is,
therefore, about ascertaining which of these parties is the lawful owner of the
subject lots, jurisdiction over which is determined by the assessed value of
such lots.
Here, the total assessed value of the two lots subject of the suit is
P9,910.00. Clearly, this amount does not exceed the jurisdictional threshold
value of P20,000.00 fixed by law. The other damages that the Sebes claim are
merely incidental to their main action and, therefore, are excluded in the
computation of the jurisdictional amount
Heirs of Concha vs. Spouses Lumocso
G.R. No. 158121
FACTS:
Petitioners, heirs of spouses Dorotea and Valeriano Concha, Sr., claim to be
the rightful owners of Lot Nos. 6195, 6196-A, 6196-B and 7529-A all situated
in Cogon, Dipolog City under Section 48(b) of Commonwealth Act No. 141.
Respondent siblings Gregorio Lumocso Cristita Lumocso Vda. de Daan and
Jacinto Lumocso are the patent holders and registered owners of the subject
lots.
Petitioners filed a complaint before the RTC for Reconveyance and/or
Annulment of Title with Damages against respondents alleging that
a) their parents have continuously, publicly, notoriously, adversely,
peacefully, in good faith and in concept of an owner possessed said
properties;
b) that respondents, by force, intimidation, and stealth forcibly entered the
premises, illegally cut, collected, and disposed of the trees therein; and
c) that respondents "surreptitiously" filed free patent applications over the lots
despite their full knowledge that petitioners owned the lots.
Respondents moved for the dismissal of the case on the ground of lack of
jurisdiction of the RTC over the subject matter. Respondents contended that
the RTC has no jurisdiction over the complaints pursuant to Section 19(2) of
Batas Pambansa Blg. 129, as amended by R.A. No. 7691 as the assessed
values of the subject lots are less than P20,000.00.
Petitioners opposed, contending that the instant cases involve actions the
subject matters of which are incapable of pecuniary estimation which, under
Section 19(1) of B.P. 129, as amended by R.A. 7691, fall within the exclusive
original jurisdiction of the RTCs. They also contended that they have two
main causes of action: for reconveyance and for recovery of the value of the
trees felled by respondents. Hence, the totality of the claims must be
considered which, if computed, allegedly falls within the exclusive original
jurisdiction of the RTC. In their Supplemental Memorandum, petitioners
contend that the nature of their complaints, as denominated therein and as
borne by their allegations, are suits for reconveyance, or annulment or
cancellation of OCTs and damages. The cases allegedly involve more than
just the issue of title and possession since the nullity of the OCTs issued to
respondents and the reconveyance of the subject properties were also raised
as issues. Thus, the RTC has jurisdiction
ISSUE:
Whether or not RTC has jurisdiction
HELD:
NO. To determine whether a court has jurisdiction over the subject matter of
a case, it is important to determine the nature of the cause of action and of
the relief sought.
The trial court correctly held that the instant cases involve actions for
reconveyance. An action for reconveyance respects the decree of
registration as incontrovertible but seeks the transfer of property, which has
been wrongfully or erroneously registered in other persons' names, to its
rightful and legal owners, or to those who claim to have a better right.
These cases may also be considered as actions to remove cloud on one's
title as they are intended to procure the cancellation of an instrument
constituting a claim on petitioners' alleged title which was used to injure or
vex them in the enjoyment of their alleged title.
Being in the nature of actions for reconveyance or actions to remove cloud
on one's title, the applicable law to determine which court has jurisdiction is
Section 19(2) of B.P. 129. In the cases at bar, it is undisputed that the
subject lots are situated in Cogon, Dipolog City and their assessed values
are less than P20,000.00, to wit:
6195 1,030.00 php. 6196-A 4,500.00 php
6196-B 4,340.00 php. 7529-A 1,880.00 php
Hence, the MTC clearly has jurisdiction over the instant cases.
Petitioners' contention that this case is one that is incapable of pecuniary
estimation under the exclusive original jurisdiction of the RTC pursuant to
Section 19(1) of B.P. 129 is erroneous.
In a number of cases, we have held that actions for reconveyance of or for
cancellation of title to or to quiet title over real property are actions that fall
under the classification of cases that involve "title to, or possession of, real
property, or any interest therein."
Lastly, it is true that the recovery of the value of the trees cut from the subject
properties may be included in the term "any interest therein." However, the
law is emphatic that in determining which court has jurisdiction, it is only the
assessed value of the realty involved that should be computed. In this case,
there is no dispute that the assessed values of the subject properties as
shown by their tax declarations are less than P20,000.00.
SPOUSES CLEMENCIO C. SABITSANA, JR. and MA. ROSARIO M.
SABITSANA, petitioners, vs. JUANITO F. MUERTEGUI, represented by
his Attorney-in-Fact DOMINGO A. MUERTEGUI, JR., respondent.
GR No. 181359 August 5, 2013 [WENCESLAO]
DOCTRINE: On the question of jurisdiction, it is clear under the rules that an
action for quieting of title may be instituted in the RTC, regardless of the
assessed value of the real property in dispute.
FACTS:
• Sept 2, 1981 – Alberto Garcia executed an unnotairzed Deed of Sale in favor
of respondent Juanito Muertegi over a 7,500 sqm parcel of unregistered land
located in Dalutan Island, Talahid, Almeira, Biliran, Leyte del Norte covered by
Tax Declaration no. 1996 issued in 1985 in Garcia;s name.
• Juanito’s father Domingo and brother Domingo Jr. took possession of the lots
and planted thereon coconut and ipil-ipil trees. They also paid the real property
taces on the lots for the years 1980 up to 1998.
• 1991 – Garcia sold the lot to the Muertegi Family lawyer, Atty. Clemencio
Sabitsana through a notarized deed of sale. The deed was registered and
eventually issued in Atty. Sabitsana’s name.
• As result, both Atty. Sabitsana and Juanito’s family (brother and father) have
been paying real estate taxes on the property.
• When Domingo (father Muertegi) passed away, his heirs applied for
registration and coverage of the lot under CA 141 or the Public Land Act.
• On the other hand, Sabitsana opposed such application and claimed that he
was the true owner of the lost and asked that the application be held in
abeyance until the issue of conflicting ownership be resolved.
• April 11, 2000 – Juanito, through his attorney-in- fact, Domingo, Jr. filed for
quieting of title against petitioner Sabitsana and his wife. Muertegis claim the
ff:
(a) the spouses bought the lot in bad faith and are exercising acts of
possession and ownership and thus, constitute a cloud over his title.
(b) The complaint also prayed for that the deed of sale be declared null and
void
(c) That Sps should respect Juanito’s title over the lot
(d) Claim for moral and exemplary damages
• Answer with Counterclaim of petititoners asserted mainly that the sale
between Garcia and Juanito was null and void ofr absence of marital consent
(Garcia’s wife). More importantly, they insisted that the RTC of Naval, Biliran
did not have jurisdiction over the case which involved title to or interest in a
parcel of land which has an assessed value of merely P1230.00.
• Evidence and testimonies during trial:
Muertegis: Atty. Sabitsana was the family lawyer of Muertegi at the itme Garcia
sold the lot to Juanito and that as such, he was consulted by the family before
the sale was executed. After such alleged sale, Domingo Sr. took actual
possession of the lot.
Sabitsana: After conducting investigations regarding the lot, he concluded that
such sale was not recorded due to the fact that the document of the sale was
missing. He discovered that the lot was still in the name of Garcia. Therefore,
he concluded that the Muertegis were merely bluffing and that they probably
did not want him to buy the property because they were interested in buying it
for themselves considering that it was adjacent to a lot which they owned.
• Lower courts’ decisions
RTC – Sale was valid, Muertegi won. Sabitsana ordered to pay the family
because he was not a buyer in good faith.
Þ after conducting an investigation, Atty. Sabitsana went on to purchase the
same lot and raced to registerd the sale ahead of the Muertegis expecting
thath is purchase and prior registration would prevail over that of his clients.
Applying the principle under Art. 1544 [double sales], Sabitsana’s registration
was not in good faith, preference should be given to the sale in favor of Juanito,
as he was the first to take possession of the lot in good faith. MR was filed but
was denied.
CA – Juanito is the rightful owner of the lot and possessed the requisite cause
of action to institute the suit for quieting of totle and obtain judgment in his
favor. RTC was affirmed.
ISSUE/S:
Main issue – who has the better right over the property?
Relevant to the topic – W/N CA erred in not holding that RTC did not ave
jurisdiction over the case at bar?
HELD:
1. Muertegi has a better right over the subject lot. [this is irrelevant but read
nalang in case she asks more details]
First, double sales [Art 1544] does not apply to sales invoking unregistered
land. Suffice it to state that the issue of the buyerÊs good or bad faith is
relevant only where the subject of the sale is registered land, and the
purchaser is buying the same from the registered owner whose title to the land
is clean. In such case, the purchaser who relies on the clean title of the
registered owner is protected if he is a purchaser in good faith for value.
Second, Muertegi has a better right to the lot!
The sale to respondent Juanito was executed on September 2, 1981 via an
unnotarized deed of sale, while the sale to petitioners was made via a
notarized document only on October 17, 1991, or ten years thereafter. Thus,
Juanito who was the first buyer has a better right to the lot, while the
subsequent sale to petitioners is null and void, because when it was made, the
seller Garcia was no longer the owner of the lot. Nemo dat quod non habet.
2. RTC has jurisdiction over the suit for quieting of title.
• On the question of jurisdiction, it is clear under the rules that an action
for quieting of title may be instituted in the RTC, regardless of the
assessed value of the real property in dispute. Under Rule 63, an
action to quiet title to real property or remove clouds therefrom may
be brought in the appropriate RTC.
 • In this case, the suit for quieting of title was prompted by petitioners’
August 24, 1998 letter-opposition to respondent’s application for
registration. Thus, in order to prevent a cloud from being cast upon his
application for a title, respondent filed this action for QT to obtain a
declaration of his rights. In this sense, the action is one for declaratory
relief, which falls within the jurisdiction of the RTC pursuant to R63.
FERNANDA GEONZON VDA. DE BARRERA v HEIRS OF VICENTE
LEGASPI
SUMMARY: Lack of Jurisdiction, assessed tax value less than 20k thus
jurisdiction with MTC not RTC, thus petition is granted.
FACTS:
• Under review before this Court is the Decision of the Court of Appeals
ordering Fernanda Geonzon vda. de Barrera and Johnny Oco. Jr. to return
possession of the subject property to the Heirs of Vicente Legaspi.
• Petitioner Oco Jr. said to be a “peace officer connected with the PNP,”
accompanied by “unidentified CAFGU members,” forced his way into
Legaspi’s irrigated farmland and used a tractor to destroy the planted crops,
took possession of the land, and had since tended it.
• Legaspi thus filed on a complaint before the Regional Trial Court of Tangub
City for Reconveyance of Possession with Preliminary Mandatory Injunction
and Damages against de Barrera & Oco.
• De Barrera & Oco claimed that the subject land forms part of a three-hectare
property described in OCT No. P-447 in the name of Lacson who sold a portion
thereof to Geonzon who, in turn, sold a portion thereof to Fernanda Geonzon
vda. de Barrera.
• Legaspi asserted that the land was occupied, possessed and cultivated by
their predecessor-in-interest Vicente Legaspi and his wife Lorenza since 1935;
after a subdivision survey was conducted in 1976, it was found out that the
land formed part of the titled property of Andrea Lacson; and despite this
discovery, they never filed any action to recover ownership thereof since they
were left undisturbed in their possession until October 1, 1996 when
petitioners forced their way into it.
• De Barrera & Oco, in their Memorandum, questioned the jurisdiction of the
RTC over the subject matter of the complaint, the assessed value of the land
being only P11,160.
• the trial court found for respondents (Legaspi) , and on the issue of jurisdiction
over the subject matter, the trial court, maintaining that it had jurisdiction. What
determines the nature of the action as well as the jurisdiction of the court are
the facts alleged in the complaint and not those alleged in the answer of the
defendants. The tax declaration stated the present estimated value being
P50,000.”
• De Barrera & Oco thereupon appealed to the CA which affirmed the trial
court’s disposition.
• Thus, this appeal.
ISSUES:
I. WHETHER . . . THE NATURE OF THE ACTION AS WELL AS THE
JURISDICTION OF THE COURT DEPEND ON THE FACTS AS ALLEGED
IN THE COMPLAINT.
HELD: Petition granted, Decision of the Court of Appeals is SET ASIDE, RTC
decision declared null and void for lack of jurisdiction.
RATIO:
• Section 33 of Batas Pambansa Bilang 129, (the Judiciary Reorganization Act
of 1980), as amended by Republic Act No. 7691 provides for the jurisdiction of
metropolitan trial courts, municipal trial courts and municipal circuit trial courts,
to wit: (3) Exclusive original jurisdiction in all civil actions which involve title to,
or possession of, real property, or any interest therein where the assessed
value of the property or interest therein does not exceed Twenty thousand
pesos (P20,000.00)…
• Thus, the jurisdiction of the first level courts has been expanded to include
jurisdiction over other real actions where the assessed value does not exceed
P20,000, P50,000 where the action is filed in Metro Manila.
• The first level courts thus have exclusive original jurisdiction over accion
publiciana and accion reivindicatoria where the assessed value of the real
property does not exceed the aforestated amounts. Accordingly, the
jurisdictional element is the assessed value of the property.
- The subject land has an assessed value of P11,160 as reflected in Tax
Declaration No. 7565, a common exhibit of the parties. The bare claim of
respondents that it has a value of P50,000 thus fails. The case, therefore, falls
within the exclusive original jurisdiction of the municipal trial court.
• It was error then for the RTC to take cognizance of the complaint based on
the allegation that “the present estimated value [of the land is] P50,000,” which
allegation is, oddly, handwritten on the printed pleading.
• Lack of jurisdiction is one of those excepted grounds where 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, even if they were not
raised in the answer or in a motion to dismiss.
• That the issue of lack of jurisdiction was raised by petitioners only in their
Memorandum filed before the trial court did not thus render them in estoppel.
• The Court notes that respondents’ cause of action – accion publiciana is a
wrong mode. Respondents’ exclusion from the property had thus not lasted for
more than one year to call for the remedy of accion publiciana. (4 months only)
• Since the RTC has no jurisdiction over the complaint filed by respondents, all
the proceedings therein are null and void.
NOTES:
Section 33 of Batas Pambansa Bilang 129, (the Judiciary Reorganization Act
of 1980), as amended by Republic Act No. 7691 provides for the jurisdiction of
metropolitan trial courts, municipal trial courts and municipal circuit trial courts,
to wit:
(3) Exclusive original jurisdiction in all civil actions which involve title to, or
possession of, real property, or any interest therein where the assessed value
of the property or interest therein does not exceed Twenty thousand pesos
(P20,000.00) or, in civil actions in Metro Manila, where such assessed value
does not exceed Fifty thousand pesos (P50,000.00) exclusive of interest,
damages of whatever kind, attorney’s fees, litigation expenses and costs:
Provided, That in cases of land not declared for taxation purposes, the value
of such property shall be determined by the assessed value of the adjacent
lots. (Emphasis, italics and underscoring supplied)
- Assessed value is understood to be “the worth or value of property
established by taxing authorities on the basis of which the tax rate is applied.
 MEDICAL PLAZA MAKATI CONDOMINIUM CORPORATION
vs.
ROBERT H. CULLEN
G.R. No. 181416 November 11, 2013
FACTS:
Respondent Robert H. Cullen purchased from Meridien Land Holding,
Inc.(MLHI) condominium Unit No. 1201 of the Medical Plaza Makati covered
by Condominium Certificate of Title No. 45808 of the Register of Deeds of
Makati. Said title was later cancelled and Condominium Certificate of Title No.
64218 was issued in the name of respondent.
On September 19, 2002, petitioner, through its corporate secretary,
Dr. Jose Giovanni E. Dimayuga, demanded from respondent payment for
alleged unpaid association dues and assessments amounting to P145,
567.42. Respondent disputed this demand claiming that he had been
religiously paying his dues shown by the fact that he was previously elected
president and director of petitioner. Petitioner, on the other hand, claimed that
respondent’s obligation was a carry-over of that of MLHI.Consequently,
respondent was prevented from exercising his right to vote and be voted for
during the 2002 election of petitioner’s Board of Directors. Respondent thus
clarified from MLHI the veracity of petitioner’s claim, but MLHI allegedly
claimed that the same had already been settled, this prompted respondent to
demand from petitioner an explanation why he was considered a delinquent
payer despite the settlement of the obligation. Petitioner failed to make such
explanation. Hence, the Complaint for Damages filed by respondent against
petitioner [MPMCC] and MLHI. The complaint states that defendant [MPMCC]
acted maliciously by insisting that plaintiff is a delinquent member when in fact,
defendant Meridien had already paid the said delinquency, if any. The
branding of plaintiff as delinquent member was willfully and deceitfully
employed so as to prevent plaintiff from exercising his right to vote or be voted
as director of the condominium corporation; 16. Defendant [MPMCC]’s
ominous silence when confronted with claim of payment made by defendant
Meridien is tantamount to admission that indeed, plaintiff is not really a
delinquent membe. Thus petitioner is asking for exemplary damages and
attorneys’ fees.
Petitioner and MLHI filed their separate motions to dismiss the
complaint on the ground of lack of jurisdiction. MLHI claims that it is the
Housing and Land Use Regulatory Board (HLURB) which is vested with the
exclusive jurisdiction to hear and decide the case. Petitioner, on the other
hand, raises the following specific grounds for the dismissal of the complaint:
(1) estoppel as respondent himself approved the assessment when he was
the president; (2) lack of jurisdiction as the case involves an intra-corporate
controversy; (3) prematurity for failure of respondent to exhaust all intra-
corporate remedies; and (4) the case is already moot and academic, the
obligation having been settled between petitioner and MLHI.
On September 9, 2005, the RTC rendered a Decision granting petitioner’s and
MLHI’s motions to dismiss and, consequently, dismissing respondent’s
complaint.
The trial court agreed with MLHI that the action for specific performance filed
by respondent clearly falls within the exclusive jurisdiction of the HLURB. As
to petitioner, the court held that the complaint states no cause of action,
considering that respondent’s obligation had already been settled by MLHI. It,
likewise, ruled that the issues raised are intra-corporate between the
corporation and member.
On appeal, the CA reversed and set aside the trial court’s decision
and remanded the case to the RTC for further proceedings. Contrary to the
RTC conclusion, the CA held that the controversy is an ordinary civil action for
damages which falls within the jurisdiction of regular courts. It explained that
the case hinged on petitioner’s refusal to confirm MLHI’s claim that the subject
obligation had already been settled as early as 1998 causing damage to
respondent. Petitioner’s and MLHI’s motions for reconsideration had also been
denied. Hence this petition.
ISSUE:
WON based on the complaint of the respondent, the controversy involve intra-
corporate issues as would fall within the jurisdiction of the RTC sitting as a
special commercial court.
RULING:
Yes the issue involved is an intra-corporate dispute, hence within the
jurisdiction of the RTC sitting as a special commercial court. In determining
whether a dispute constitutes an intra-corporate controversy, the Court uses
two tests, namely, the relationship test and the nature of the controversy test.
An intra-corporate controversy is one which pertains to any of the
following relationships: (1) between the corporation, partnership or association
and the public; (2) between the corporation, partnership or association and the
State insofar as its franchise, permit or license to operate is concerned; (3)
between the corporation, partnership or association and its stockholders,
partners, members or officers; and (4) among the stockholders, partners or
associates themselves. Thus, under the relationship test, the existence of any
of the above intra-corporate relations makes the case intra-corporate.
Under the nature of the controversy test, "the controversy must not
only be rooted in the existence of an intra-corporate relationship, but must as
well pertain to the enforcement of the parties’ correlative rights and obligations
under the Corporation Code and the internal and intra-corporate regulatory
rules of the corporation." In other words, jurisdiction should be determined by
considering both the relationship of the parties as well as the nature of the
question involved.
Applying the two tests, we find and so hold that the case involves intra-
corporate controversy. It obviously arose from the intra-corporate relations
between the parties, and the questions involved pertain to their rights and
obligations under the Corporation Code and matters relating to the regulation
of the corporation
Admittedly, petitioner is a condominium corporation duly organized
and existing under Philippine laws, charged with the management of the
Medical Plaza Makati. Respondent, on the other hand, is the registered owner
of Unit No. 1201 and is thus a stockholder/member of the condominium
corporation. Clearly, there is an intra-corporate relationship between the
corporation and a stockholder/member.
The nature of the action is determined by the body rather than the title of the
complaint. Though denominated as an action for damages, an examination of
the allegations made by respondent in his complaint shows that the case
principally dwells on the propriety of the assessment made by petitioner
against respondent as well as the validity of petitioner’s act in preventing
respondent from participating in the election of the corporation’s Board of
Directors. Respondent contested the alleged unpaid dues and assessments
demanded by petitioner.
Moreover, Presidential Decree No. 902-A enumerates the cases over which
the Securities and Exchange Commission (SEC) exercises exclusive
jurisdiction:
b) Controversies arising out of intra-corporate or partnership relations,
between and among stockholders, members or associates; between
any or all of them and the corporation, partnership or association of
which they are stockholders, members, or associates, respectively;
and between such corporation, partnership or association and the
State insofar as it concerns their individual franchise or right to exist
as such entity; and
c) Controversies in the election or appointment of directors, trustees,
officers, or managers of such corporations, partnerships, or
associations.
To be sure, this action partakes of the nature of an intra-corporate
controversy, the jurisdiction over which pertains to the SEC. Pursuant to
Section 5.2 of Republic Act No. 8799, otherwise known as the Securities
Regulation Code, the jurisdiction of the SEC over all cases enumerated under
Section 5 of Presidential Decree No. 902-A has been transferred to RTCs
designated by this Court as Special Commercial Courts. While the CA may be
correct that the RTC has jurisdiction, the case should have been filed not with
the regular court but with the branch of the RTC designated as a special
commercial court. Considering that the RTC of Makati City, Branch 58 was not
designated as a special commercial court, it was not vested with jurisdiction
over cases previously cognizable by the SEC. The CA, therefore, gravely erred
in remanding the case to the RTC for further proceedings.
To be sure, RA 4726 or the Condominium Act was enacted to
specifically govern a condominium. Said law sanctions the creation of the
condominium corporation which is especially formed for the purpose of holding
title to the common area, in which the holders of separate interests shall
automatically be members or shareholders, to the exclusion of others, in
proportion to the appurtenant interest of their respective units. The rights and
obligations of the condominium unit owners and the condominium corporation
are set forth in the above Act.
Clearly, condominium corporations are not covered by the
amendment. Thus, the intra-corporate dispute between petitioner and
respondent is still within the jurisdiction of the RTC sitting as a special
commercial court and not the HLURB. The doctrine laid down by the Court in
Chateau de Baie Condominium Corporation v. Moreno which in turn cited
Wack Wack Condominium Corporation, et al v. CA is still a good law.
WHEREFORE, we hereby GRANT the petition and REVERSE the
Court of Appeals Decision dated July 10, 2007 and Resolution dated January
25, 2008 in CA-G.R. CV No. 86614. The Complaint before the Regional Trial
Court of Makati City, Branch 58, which is not a special commercial court,
docketed as Civil Case No. 03-1018 is ordered DISMISSED for lack of
jurisdiction. Let the case be REMANDED to the Executive Judge of the
Regional Trial Court of Makati City for re-raffle purposes among the designated
special commercial courts.
MANUEL LUIS C. GONZALES and FRANCIS MARTIN D. GONZALES vs.
GJH LAND, INC. (formerly known as S.J. LAND, INC.) (G.R. No. 202664.
November 10, 2015)
FACTS:
On August 4, 2011, petitioners Manuel Luis C. Gonzales and Francis Martin
D. Gonzales (petitioners) filed a Complaint for "Injunction with prayer for
Issuance of Status Quo Order, Three (3) and Twenty (20)-Day Temporary
Restraining Orders, and Writ of Preliminary Injunction with Damages" against
respondents GJH Land, Inc. (formerly known as S.J. Land, Inc.), Chang Hwan
Jang, Sang Rak Kim, Mariechu N. Yap, and Atty. Roberto P. Mallari II
(respondents) before the RTC of Muntinlupa 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. Essentially, petitioners alleged that the subscriptions for
the said shares were already paid by them in full in the books of S.J. Land,
Inc., but were nonetheless offered for sale on July 29, 2011 to the corporation's
stockholders, hence, their plea for injunction.
After filing their respective answers to the complaint, respondents filed a
motion to dismiss on the ground of lack of jurisdiction over the subject matter,
pointing out that the case involves an intra-corporate dispute and should, thus,
be heard by the designated Special Commercial Court of Muntinlupa City. In
an Order 14 dated April 17, 2012, Branch 276 granted the motion to dismiss
filed by respondents. It found that the case involves an intra-corporate dispute
that is within the original and exclusive jurisdiction of the RTCs designated as
Special Commercial Courts. It pointed out that the RTC of Muntinlupa City,
Branch 256 (Branch 256) was specifically designated by the Court as the
Special Commercial Court, hence, Branch 276 had no jurisdiction over the
case and cannot lawfully exercise jurisdiction on the matter, including the
issuance of a Writ of Preliminary Injunction.
Dissatisfied, petitioners filed a motion for reconsideration, arguing that they
filed the case with the Office of the Clerk of Court of the RTC of Muntinlupa
City which assigned the same to Branch 276 by raffle. As the raffle was beyond
their control, they should not be made to suffer the consequences of the wrong
assignment of the case, especially after paying the filing fees in the amount of
P235,825.00 that would be for naught if the dismissal is upheld.
ISSUE:
whether or not Branch 276 of the RTC of Muntinlupa City erred in dismissing
the case for lack of jurisdiction over the subject matter
(The present controversy lies, however, in the procedure to be followed when
a commercial case — such as the instant intra-corporate dispute — has been
properly filed in the official station of the designated Special Commercial Court
but is, however, later wrongly assigned by raffle to a regular branch of that
station.)
HELD: Yes.
At the outset, the Court finds Branch 276 to have correctly categorized Civil
Case No. 11-077 as a commercial case, more particularly, an intra-corporate
dispute, considering that it relates to petitioners' averred rights over the shares
of stock offered for sale to other stockholders, having paid the same in full.
Applying the relationship test and the nature of the controversy test, the suit
between the parties is clearly rooted in the existence of an intra-corporate
relationship and pertains to the enforcement of their correlative rights and
obligations under the Corporation Code and the internal and intra-corporate
regulatory rules of the corporation, 24 hence, intra-corporate, which should be
heard by the designated Special Commercial Court as provided under A.M.
No. 03- 03-03-SC 25 dated June 17, 2003 in relation to Item 5.2, Section 5 of
RA 8799.
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 5 28 of Presidential
Decree No. 902- A was transferred from the Securities and Exchange
Commission (SEC) to the RTCs, being courts of general jurisdiction. The legal
attribution of Regional Trial Courts as courts of general jurisdiction stems from
Section 19 (6), Chapter II of Batas Pambansa Bilang (BP) 129, known as "The
Judiciary Reorganization Act of 1980". To clarify, the word "or" in Item 5.2,
Section 5 of RA 8799 was intentionally used by the legislature to particularize
the fact that the phrase "the Courts of general jurisdiction" is equivalent to the
phrase "the appropriate Regional Trial Court." In other words, the jurisdiction
of the SEC over the cases enumerated under Section 5 of PD 902-A was
transferred to the courts of general jurisdiction, that is to say (or, otherwise
known as), the proper Regional Trial Courts.
Consistent with the foregoing, history depicts that when the transfer of SEC
cases to the RTCs was first implemented, they were transmitted to the
Executive Judges of the RTCs for raffle between or among its different
branches, unless a specific branch has been designated as a Special
Commercial Court, in which instance, the cases were transmitted to said
branch. It was only on November 21, 2000 that the Court designated certain
RTC branches to try and decide said SEC cases without, however, providing
for the transfer of the cases already distributed to or filed with the regular
branches thereof. Thus, on January 23, 2001, the Court issued SC
Administrative Circular No. 08-2001 38 directing the transfer of said cases to
the designated courts (commercial SEC courts). Later, or on June 17, 2003,
the Court issued A.M. No. 03-03-03-SC consolidating the commercial SEC
courts and the intellectual property courts in one RTC branch in a particular
locality, i.e., the Special Commercial Court, to streamline the court structure
and to promote expediency. Accordingly, the RTC branch so designated was
mandated to try and decide SEC cases, as well as those involving violations
of intellectual property rights, which were, thereupon, required to be filed in the
Office of the Clerk of Court in the official station of the designated Special
Commercial Courts.
The objective behind the designation of such specialized courts is to promote
expediency and efficiency in the exercise of the RTCs' jurisdiction over the
cases enumerated under Section 5 of PD 902-A. Such designation has nothing
to do with the statutory conferment of jurisdiction to all RTCs under RA 8799
since in the first place, the Court cannot
enlarge, diminish, or dictate when jurisdiction shall be removed, given that the
power to define, prescribe, and apportion jurisdiction is, as a general rule, a
matter of legislative prerogative.
Here, petitioners filed a commercial case, i.e., an intra- corporate 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 Court, in accordance with
A.M. No. 03-03-03-SC. It is, therefore, from the time of such filing that the RTC
of Muntinlupa City acquired jurisdiction over the subject matter or the nature
of the action. Unfortunately, the commercial case was wrongly raffled to a
regular branch, i.e. , Branch 276, instead of being assigned 44 to the sole
Special Commercial Court in the RTC of Muntinlupa City, 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 for Status Quo Order, TRO and
Damages," which, however, contradicts and more importantly, cannot prevail
over its actual allegations that clearly make out an intra-corporate dispute.
The Court nonetheless deems that the erroneous raffling to a regular branch
instead of to a Special Commercial Court is only a matter of procedure — that
is, an incident related to the exercise of jurisdiction — and, thus, should not
negate the jurisdiction which the RTC of Muntinlupa City had already acquired.
In such a scenario, the proper course of action was not for the commercial
case to be dismissed; instead, Branch 276 should have first referred the case
to the Executive Judge for re-docketing as a commercial case; thereafter, the
Executive Judge should then assign said case to the only designated Special
Commercial Court in the station, i.e. , Branch 256.
Note that the procedure would be different where the RTC acquiring
jurisdiction over the case has multiple special commercial court branches; in
such a scenario, the Executive Judge, after re-docketing the same as a
commercial case, should proceed to order its re-raffling among the said special
branches. Meanwhile, if the RTC acquiring jurisdiction has no branch
designated as a Special Commercial Court, then it should refer the case to the
nearest RTC with a designated Special Commercial Court branch within the
judicial region. Upon referral, the RTC to which the case was referred to should
re-docket the case as a commercial case, and then: (a) if the said RTC 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 branches
designated as Special Commercial Courts, raffle off the case among those
special branches.
For further guidance, the Court finds it apt to point out that the same principles
apply to the inverse situation of ordinary civil cases filed before the proper
RTCs but wrongly raffled to its branches designated as Special Commercial
Courts. In such a scenario, the ordinary civil case should then be referred to
the Executive Judge for re-docketing as an ordinary civil case; thereafter, the
Executive Judge should then order the raffling of the case to all branches of
the same RTC, subject to limitations under existing internal rules, and the
payment of the correct docket fees in case of any difference. Unlike the limited
assignment/raffling of a commercial case only to branches designated as
Special
Commercial 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
particular branch which has been designated as a Special Commercial Court
does not shed the RTC's general jurisdiction over ordinary civil cases under
the imprimatur of statutory law.
Furthermore, the Court hereby RESOLVES that henceforth, the following
guidelines shall be observed:
1. If a commercial case filed before the proper RTC is wrongly raffled to its
regular branch, the proper courses of action are as follows:
1.1 If the RTC has only one branch designated as a Special Commercial Court,
then the case shall be referred to the Executive Judge for re-docketing as a
commercial case, and thereafter, assigned to the sole special branch;
1.2 If the RTC has multiple branches designated as Special Commercial
Courts, then the case shall be referred to the Executive Judge for re-docketing
as a commercial case, and thereafter, raffled off among those special
branches; and
4. Finally, to avert any future confusion, the Court requires that all initiatory
pleadings state the action's nature both in its caption and body. Otherwise, the
initiatory pleading may, upon motion or by order of the court motu proprio, be
dismissed without prejudice to its re-filing after due rectification. This last
procedural rule is prospective in application.
5. All existing rules inconsistent with the foregoing are deemed superseded.

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 with a designated
Special Commercial Court branch within the judicial region. Upon referral, the
RTC to which the case was referred to should re-docket the case as a
commercial case, and then: (a) if the said RTC 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 branches designated as Special Commercial
Courts, raffe off the case among those special branches.

2. If an ordinary civil case filed before the proper RTC is wrongly raffled to its
branch designated as a Special Commercial Court, then the case shall be
referred to the Executive Judge for re-docketing as an ordinary civil case.
Thereafter, it shall be raffled off to all courts of the same RTC (including its
designated special branches which, by statute, are equally capable of
exercising general jurisdiction same as regular branches), as provided for
under existing rules.

3. All transfer/raffle of cases is subject to the payment of the appropriate docket

fees in case of any difference. On the other hand, all docket fees already paid
shall be duly credited, and any excess, refunded.