FORT BONIFACIO DEVELOPMENT CORPORATION vs. HON. EDWIN D.

SORONGON and VALENTIN FONG

G.R. NO. 176709, May 8, 2009
TINGA, J.

Facts:
Petitioner Fort Bonifacio Development Corp is engaged real estate
development while Valentin Fong (respondent) under the name VF Industrial Sales
is the assignee of L & M Maxco Specialist Construction’s (Maxco) retention money
from the Bonifacio Ridge Condominium (BRC).
Petitioner entered a trade contract with Maxco where Maxco would undertake
the structural package of the BRC. Petitioner accused Maxco of delay in completion
of its work and sent them a notice of termination. In response, petitioner also
instructed Maxco to perform remedial measures prior to the contract expiration
pursuant to their contract. Later, Maxco got sued by its creditors including
respondent for matters not involving BRC.
To settle the suit, Maxco assigned its receivables worth P1,577,115.90.
Respondent asked about the receivables and petitioner informed the respondent
that Maxco did have receivables; however, these were not due and demandable
yet, moreover the amount had to be ascertained and liquidated.
Parties failed to settle the matter, so petitioner informed respondents that
there is no more amount due to Maxco from petitioner after the rectification of
defect as well as the satisfaction of notices of garnishment. Respondent filed a
complaint for a sum of money against petitioner and Maxco at RTC claiming that
there were enough residual amounts to pay the receivables of Maxco at the time he
served notice of the assignment.
The retention money became overdue, but petitioner did not pay the amount
subject of the deed of assignment despite demand. Instead, petitioner paid out the
retention money to other garnishing creditors of Maxco to the detriment of
respondent.
Petitioner filed a Motion to Dismiss on the ground of lack of jurisdiction over
the subject matter arguing that respondent merely stepped into the shoes of Maxco
as its assignee; hence, it was the CIAC and not the regular courts that had
jurisdiction over the dispute as provided in the Trade Contract. RTC Judge Edwin
Sorongon denied both petition and the motion for reconsideration. CA affirmed.
ISSUE: Which has jurisdiction, RTC or CIAC?
HELD: RTC has jurisdiction.
The adjudication of Civil Case involves the application of pertinent statutes
and jurisprudence to matters of assignment and preference of credits. According to
Fort Bonifacio Development Corporation v. Domingo, this task more is suited for a
trial court rather than CIAC, an arbitration body specifically devoted to construction
contracts.
Jurisdiction of the court over the subject matter is determined by the
allegations of the complaint. Thus, the jurisdiction of the court does not depend
upon the defenses pleaded in the answer or in the motion to dismiss, lest the
question of jurisdiction would almost entirely depend upon the defendant.
Fong’s cause of action springs from the assignment of Maxco’s retention
money to him and failure of petitioner to turn over the retention money not from
the contract the parties entered.
Fong’s claim is not even construction related as construction is defined as
referring to all on-site works on buildings or altering structures. Thus, petitioner’s
insistence on the application of the arbitration clause of the Trade Contract to Fong
is improper since the right to the retention money of Maxco under the Trade
Contract is not being impugned.