1.) G.R. No. 122191, Oct.

8, 1998

o Jurisdiction is based on allegations on the pleading

o State of the Most Significant Relationship Theory
o Conflicts of Laws Problem
o Points of Contact

FACTS:

Plaintiff Morada is a flight attendant for defendant SAUDIA’s airlines based in Jeddah. On April 27, 1990,
while on a lay-over in Jakarta, Indonesia, Morada became a victim of attempted rape by fellow crewmembers,
Thamer and Allah, who are both Saudi nationals. The two were eventually arrested and deported back to Saudi
Arabia while Morada was transferred to Manila. On various dates after the incident, Morada was summoned to
Jeddah by her employer in order to sign documents, purporting to be statements dropping the case against
Thamer and Allah. However, it turned out that a case was in fact filed against her before the Saudi court, which
later found her guilty of (1) adultery; (2) going to a disco, dancing and listening to the music in violation of
Islamic laws; and (3) socializing with the male crew, in contravention of Islamic tradition.

Hence, Morada filed this complaint for damages based on Article 21 of the New Civil Code against SAUDIA
and its country manager.

ISSUE:

o Whether or not the trial court has jurisdiction over the case
o Whether the proper law applicable is Philippine law or the law of the Kingdom of Saudi Arabia
o Whether or not the case involves a ‘conficts problem’

HELD:

Is there a ‘conflicts’ case?

The Supreme Court held in the affirmative.

A factual situation that cuts across territorial lines and is affected by the diverse laws of two or more states is
said to contain a “foreign element.” The presence of a foreign element is inevitable since social and economic
affairs of individuals and associations are rarely confined to the geographic limits of their birth or conception.

The forms in which this foreign element may appear are many. The foreign element may simply consist in the
fact that one of the parties to a contract is an alien or has a foreign domicile, or that a contract between nationals
of one State involves properties situated in another State. In other cases, the foreign element may assume a
complex form.

In the instant case, the foreign element consisted in the fact that private respondent Morada is a resident
Philippine national, and that petitioner SAUDIA is a resident foreign corporation. Also, by virtue of the
employment of Morada with the petitioner SAUDIA as a flight stewardess, events did transpire during her
many occasions of travel across national borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia,
 and vice versa, that caused a “conflicts” situation to arise.

Applicability of Art. 19 and 21, NCC and Jurisdiction of Quezon City RTC

The Supreme Court held that private respondent aptly predicated her cause of action on Articles 19 and 21 of
the New Civil Code. Although Article 19 merely declares a principle of law, Article 21 gives flesh to its
provisions. Thus, violations of Articles 19 and 21 are actionable, with judicially enforceable remedies in the
municipal forum.

Based on the allegations in the Amended Complaint, read in the light of the Rules of Court on jurisdiction, the
Supreme Court found that the RTC of Quezon City possesses jurisdiction over the subject matter of the suit. Its
authority to try and hear the case is provided under Section 1 of RA 7691. Venue was also held to be proper.
Furthermore, jurisdiction over the person of the plaintiff and defendant were properly acquired.

Choice-of-law Problem

Choice-of-law problems seek to answer two important questions: (1) What legal system should control a given
situation where some of the significant facts occurred in two or more states; and (2) to what extent should the
chosen legal system regulate the situation.

Before a choice can be made, it is necessary for us to determine under what category a certain set of facts or
rules fall. This process is known as “characterization,” or the “doctrine of qualification.” It is the “process of
deciding whether or not the facts relate to the kind of question specified in a conflicts rule.” The purpose of
“characterization” is to enable the forum to select the proper law.

Our starting point of analysis here is not a legal relation, but a factual situation, event or operative fact. An
essential element of conflict rules is the indication of a “test” or “connecting factor” or “point of contact.”
Choice-of-law rules invariably consist of factual relationship (such as property right, contract claim) and a
connecting factor or point of contract, such as the situs of the res, the place of celebration, the place of
performance, or the place of wrongdoing.

Note that one or more circumstances may be present to serve as the possible test for the determination of the
applicable law. These “test factors” or “points of contact” or “connecting factors” could be any of the following:

1. The nationality of a person, his domicile, his residence, his place of sojourn, or his origin;
2. The seat of a legal or juridical person, such as a corporation;
3. The situs of a thing, that is, the place where a thing is, or is deemed to be situated. In particular, the lex
situs is decisive when real rights are involved;
4. The place where an act has been done, the locus actus, such as the place where a contract has been
made, a marriage celebrated, a will signed or a tort committed. The lex loci actus is particularly important in
contracts and torts;
5. The place where an act is intended to come into effect, e.g. the place of performance of contractual
duties, or the place where a power of attorney is to be exercised;
6. The intention of the contracting parties as to the law that should govern their agreement, the lex loci
intentionis;
7. The place where judicial or administrative proceedings are instituted or done. The lex fori – the law of
the forum – is particularly important because, as we have seen earlier, matters of ‘procedure’ not going to the
substance of the claim involved are governed by it; and because the lex fori applies whenever the content of the
otherwise applicable foreign law is excluded from application in a given case for the reason that it falls under
one of the exceptions to the applications of foreign law; and
8. The flag of the ship, which in many cases is decisive of practically all legal relationships of the ship and
of its master or owner as such. It also covers contractual relationships particularly contracts of affreightment.”

Considering that the complaint in the court a quo is one involving torts, the “connecting factor” or “point of
contact” could be the place or places where the tortious conduct or lex loci actus occurred. And applying the
torts principle in a conflicts case, we find that the Philippines could be said as a situs of the tort (the place where
the alleged tortious conduct took place). This is because it is in the Philippines where petitioner allegedly
deceived private respondent, a Filipina residing and working here. According to her, she had honestly believed
that petitioner would, in the exercise of its rights and in the performance of its duties, “act with justice, give her
her due and observe honesty and good faith.” Instead, petitioner failed to protect her, she claimed. That certain
acts or parts of the injury allegedly occurred in another country is of no moment. For in our view what is
important here is the place where the over-all harm or the fatality of the alleged injury to the person, reputation,
social standing and human rights of the complainant, had lodged, according to the plaintiff below (herein
private respondent). All told, it is not without basis to identify the Philippines as the situs of the alleged tort.

Moreover, with the widespread criticism of the traditional rule of lex loci delicti commissi, modern theories and
rules on tort liability have been advanced to offer fresh judicial approaches to arrive at just results. In keeping
abreast with the modern theories on tort liability, we find here an occasion to apply the “State of the most
significant relationship” rule, which in our view should be appropriate to apply now, given the factual context
of this case.

In applying said principle to determine the State which has the most significant relationship, the following
contacts are to be taken into account and evaluated according to their relative importance with respect to the
particular issue: (a) the place where the injury occurred; (b) the place where the conduct causing the injury
occurred; (c) the domicile, residence, nationality, place of incorporation and place of business of the parties; and
(d) the place where the relationship, if any, between the parties is centered.

Over-all injury occurred in the Philippines

As already discussed, there is basis for the claim that over-all injury occurred and lodged in the Philippines.
There is likewise no question that private respondent is a resident Filipina national, working with petitioner, a
resident foreign corporation engaged here in the business of international air carriage. Thus, the “relationship”
between the parties was centered here, although it should be stressed that this suit is not based on mere labor
law violations. From the record, the claim that the Philippines has the most significant contact with the matter in
this dispute, raised by private respondent as plaintiff below against defendant (herein petitioner), in our view,
has been properly established.

1.) Saudi Arabian Airlines vs. Court of Appeals,

Morada and Ortiz | G.R. No. 122191 October 8, 1998

SAUDI ARABIAN AIRLINES, petitioner, 

vs.
COURT OF APPEALS, MILAGROS P. MORADA and HON. RODOLFO A. ORTIZ, in his capacity
as Presiding Judge of Branch 89, Regional Trial Court of Quezon City, respondents.

Facts:
Milagros Morada was hired as a flight attendant of SAUDIA and was based in Jeddah, Saudi
Arabia. During a lay-over in Indonesia, Morada, together with other crew members -
Thamer and Allah went disco dancing. The three of them returned to their hotels when it
was almost morning and agreed to have breakfast in the room of Thamer. However, Thamer
attempted to rape Morada. Hotel personnels rescued Morada while Thamer and Allah were
both arrested by the Indonesian police. 

Upon Morada's return to Jeddah, she was interrogated by SAUDIA officials regarding the
incident. They even requested for her to help arrange the release of the two in Indonesia -
to which she refused to do so. Later, she learned that after two weeks of imprisonment,
Thamer and Allah were allowed to deported through the help of the Saudi Arabian
government. Eventually, the two were again in service at SAUDI while Morada was
transferred to the Philippines. When Morada was requested by her superiors, her passport
was taken from her and was pressured to drop the case or her passport will not be
returned. She eventually agreed to such request just to get her passport back.

Years later, Morada was once again summoned by SAUDIA to Jeddah for further
investigation. Morada agreed when she received assurance from SAUDIA's Manila
Manager, Aslam Saleemi, that the investigation was routinary and that it posed no danger
to her. She was once again interrogated by the judge about the incident.

When she was about to board her flight back to the Philippines, she was forbidden by the
authorities, was escorted back to court, interrogated and was sentenced to 5 months
imprisonment and 286 lashes due to violation of Islamic laws on dancing and socializing with
men.

She sought help from the Philippine Embassy in Jeddah. To earn her upkeep, she worked on
domestic flights of SAUDIA while Thamer and Allah continued to serve in international
flights.

Since Morada was wrongfully convicted, the Prince of Makkah dismissed the case and
allowed her to leave Saudi Arabia. However, shortly before her return to Manila, her
services were terminated by SAUDIA, without being informed of the cause.

Thus, Morada filed a case for damages against SAUDIA and its country manager.

SAUDIA field a motion to dismiss contending that:

(1) that the Complaint states no cause of action against Saudia;
(2) that the claim or demand set forth in the Complaint has been waived, abandoned or
otherwise extinguished; and
(3) that the trial court has no jurisdiction to try the case.

Issues:
(1) Whether the case involves conflict of laws - YES
(2) Whether the trial court has jurisdiction over the case - YES.

Ruling: 
Conflict of Laws
There is a foreign element in this case, hence, it involves a conflict of laws question.

Foreign elements may appear in different forms. It may simply consist of the fact that one
of the parties to the contract is an alien or has a foreign domicile or that a contract
between nationals of one State involves properties situated in another State. In other
cases, the foreign element may assume a complex form.

Here, the foreign element comes from the fact that the plaintiff, Morada was a resident
Philippine National while SAUDIA is a resident foreign corporation. Moreover, through
Morada's employment as a flight stewardess of SAUDIA, the occurrences surrounding the
case transpired while she was on her travels which was across national borders. This caused
a "conflicts" situation to arise.

Jurisdiction
Weighing the relative claims of the parties, the court found it best to hear the case in the
Philippines. If it refused to take cognizance of the case, it would be forcing Morada to seek
remedial action elsewhere, i.e. in the Kingdom of Saudi Arabia where she no longer
maintains substantial connections. That would have caused a fundamental unfairness to
her.

Moreover, by hearing the case in the Philippines no unnecessary difficulties and

inconvenience have been shown by either of the parties. The choice of forum of the Morada
should be upheld.

Similarly, the trial court has also acquired jurisdiction over the persons of the parties in this
case. By filing her Complaint and Amended Complaint with the trial court, Morada has
voluntary submitted herself to the jurisdiction of the court. Similarly, SAUDIA has filed
several motions asking the court for relief. This indicates that SAUDIA indeed has submitted
to the jurisdiction of the trial court.

Discussion as to what applicable law in case of conflict of laws; Choice-of-laws

As to the choice of applicable law, we note that choice-of-law problems seek to answer two
important questions:
(1) What legal system should control a given situation where some of the significant facts
occurred in two or more states; and
(2) to what extent should the chosen legal system regulate the situation.

Several theories have been propounded in order to identify the legal system that should
ultimately control. Although ideally, all choice-of-law theories should intrinsically advance
both notions of justice and predictability, they do not always do so. The forum is then
faced with the problem of deciding which of these two important values should be stressed.

Before a choice can be made, it is necessary for us to determine under what category a
certain set of facts or rules fall. This process is known as "characterization", or the
"doctrine of qualification". It is the "process of deciding whether or not the facts relate to
the kind of question specified in a conflicts rule."  The purpose of "characterization" is to
enable the forum to select the proper law.

Our starting point of analysis here is not a legal relation, but a factual situation, event, or
operative fact.  An essential element of conflict rules is the indication of a "test" or
"connecting factor" or "point of contact". Choice-of-law rules invariably consist of a factual
relationship (such as property right, contract claim) and a connecting factor or point of
contact, such as the situs of the res, the place of celebration, the place of performance, or
the place of wrongdoing.

The relevant point of contact in this case is Lex Loci Actus.

(4) the place where an act has been done, the locus actus, such as the place where a
contract has been made, a marriage celebrated, a will signed or a tort committed. The lex
loci actus is particularly important in contracts and torts.

Considering that the complaint in the court a quo is one involving torts, the "connecting
factor" or "point of contact" could be the place or places where the tortious conduct or lex
loci actus occurred. And applying the torts principle in a conflicts case, we find that the
Philippines could be said as a situs of the tort (the place where the alleged tortious conduct
took place). This is because it is in the Philippines where petitioner allegedly deceived
private respondent, a Filipina residing and working here.

According to her, she had honestly believed that petitioner would, in the exercise of its
rights and in the performance of its duties, "act with justice, give her due and observe
honesty and good faith." Instead, petitioner failed to protect her, she claimed. That certain
acts or parts of the injury allegedly occurred in another country is of no moment. For in our
view what is important here is the place where the over-all harm or the totality of the
alleged injury to the person, reputation, social standing and human rights of complainant,
had lodged, according to the plaintiff below (herein private respondent). All told, it is not
without basis to identify the Philippines as the situs of the alleged tort.

Other point of contacts: 

(1) The nationality of a person, his domicile, his residence, his place of sojourn, or his
origin;

(2) the seat of a legal or juridical person, such as a corporation;

(3) the situs of a thing, that is, the place where a thing is, or is deemed to be situated. In
particular, the lex situs is decisive when real rights are involved;

(4) the place where an act has been done, the locus actus, such as the place where a
contract has been made, a marriage celebrated, a will signed or a tort committed. The lex
loci actus is particularly important in contracts and torts;

(5) the place where an act is intended to come into effect, e.g., the place of performance
of contractual duties, or the place where a power of attorney is to be exercised;
(6) the intention of the contracting parties as to the law that should govern their
agreement, the lex loci intentionis;

(7) the place where judicial or administrative proceedings are instituted or done. The lex
forithe law of the forumis particularly important because, as we have seen earlier, matters
of procedure not going to the substance of the claim involved are governed by it; and
because the lex fori applies whenever the content of the otherwise applicable foreign law
is excluded from application in a given case for the reason that it falls under one of the
exceptions to the applications of foreign law; and

(8) the flag of a ship, which in many cases is decisive of practically all legal relationships of
the ship and of its master or owner as such. It also covers contractual relationships
particularly contracts of affreightment

2.) KAZUHIRO HASEGAWA and NIPPON ENGINEERING

CONSULTANTS CO., LTD.,
vs 
MINORU KITAMURA
G.R. No. 149177
November 23, 2007
 
FACTS:

Nippon Engineering Consultants (Nippon), a Japanese consultancy firm

providing technical and management support in the infrastructure projects
national permanently residing in the Philippines. The agreement provides that
Kitamaru was to extend professional services to Nippon for a year. Nippon
assigned Kitamaru to work as the project manager of the Southern Tagalog
Access Road (STAR) project. When the STAR project was near completion,
DPWH engaged the consultancy services of Nippon, this time for the detailed
engineering & construction supervision of the Bongabon-Baler Road
Improvement (BBRI) Project. Kitamaru was named as the project manger in
the contract.
Hasegawa, Nippon’s general manager for its International Division, informed
Kitamaru that the company had no more intention of automatically renewing
his ICA. His services would be engaged by the company only up to the
substantial completion of the STAR Project.

Kitamaru demanded that he be assigned to the BBRI project. Nippon insisted

that Kitamaru’s contract was for a fixed term that had expired. Kitamaru then
filed for specific performance & damages w/ the RTC of Lipa City. Nippon filed a
MTD.

Nippon’s contention: The ICA had been perfected in Japan & executed by &
between Japanese nationals. Thus, the RTC of Lipa City has no jurisdiction. The
claim for improper pre-termination of Kitamaru’s ICA could only be heard &
ventilated in the proper courts of Japan following the principles of lex loci
celebrationis & lex contractus. 

The RTC denied the motion to dismiss. The CA ruled hat the principle of lex loci
celebrationis was not applicable to the case, because nowhere in the pleadings
was the validity of the written agreement put in issue. It held that the RTC was
correct in applying the principle of lex loci solutionis.

ISSUE:

Whether or not the subject matter jurisdiction of Philippine courts in civil cases
for specific performance & damages involving contracts executed outside the
country by foreign nationals may be assailed on the principles of lex loci
celebrationis, lex contractus, “the state of the most significant relationship
rule,” or forum non conveniens.

HELD:

NO. In the judicial resolution of conflicts problems, 3 consecutive phases are

involved: jurisdiction, choice of law, and recognition and enforcement of
judgments. Jurisdiction & choice of law are 2 distinct concepts.Jurisdiction
considers whether it is fair to cause a defendant to travel to this state; choice
of law asks the further question whether the application of a substantive law
w/c will determine the merits of the case is fair to both parties. The power to
exercise jurisdiction does not automatically give a state constitutional
authority to applyforum law. While jurisdiction and the choice of the lex
fori  will often coincide, the “minimum contacts” for one do not always provide
the necessary “significant contacts” for the other. The question of whether the
law of a state can be applied to a transaction is different from the question of
whether the courts of that state have jurisdiction to enter a judgment.

In this case, only the 1st phase is at issue—jurisdiction. Jurisdiction, however,

has various aspects. For a court to validly exercise its power to adjudicate a
controversy, it must have jurisdiction over the plaintiff/petitioner, over the
defendant/respondent, over the subject matter, over the issues of the case
and, in cases involving property, over the res or the thing w/c is the subject of
the litigation. In assailing the trial court's jurisdiction herein, Nippon is actually
referring to subject matter jurisdiction.

Jurisdiction over the subject matter in a judicial proceeding is conferred by the

sovereign authority w/c establishes and organizes the court. It is given only by
law and in the manner prescribed by law. It is further determined by the
allegations of the complaint irrespective of whether the plaintiff is entitled to
all or some of the claims asserted therein. To succeed in its motion for the
dismissal of an action for lack of jurisdiction over the subject matter of the
claim, the movant must show that the court or tribunal cannot act on the
matter submitted to it because no law grants it the power to adjudicate the
claims.

In the instant case, Nippon, in its MTD, does not claim that the RTC is not
properly vested by law w/ jurisdiction to hear the subject controversy for a
civil case for specific performance & damages is one not capable of
pecuniary estimation & is properly cognizable by the RTC of Lipa City. What
they rather raise as grounds to question subject matter jurisdiction are the
principles of lex loci celebrationis and lex contractus,  and the “state of the
most significant relationship rule.” The Court finds the invocation of these
grounds unsound.

Lex loci celebrationis relates to the “law of the place of the ceremony” or the
law of the place where a contract is made. The doctrine of lex contractus  or lex
loci contractus  means the “law of the place where a contract is executed or to
be performed.” It controls the nature, construction, and validity of the
contract and it may pertain to the law voluntarily agreed upon by the parties or
the law intended by them either expressly or implicitly.Under the “state of the
most significant relationship rule,” to ascertain what state law to apply to
a dispute, the court should determine which state has the most substantial
connection to the occurrence and the parties. In a case involving a contract,
the court should consider where the contract was made, was negotiated, was
to be performed, and the domicile, place of business, or place of incorporation
of the parties. This rule takes into account several contacts and evaluates them
according to their relative importance with respect to the particular issue to be
resolved.

Since these 3 principles in conflict of laws make reference to the

law applicable to a dispute, they are rules proper for the 2 nd phase, the choice
of law. They determine which state's law is to be applied in resolving the
substantive issues of a conflicts problem. Necessarily, as the only issue in this
case is that of jurisdiction, choice-of-law rules are not only inapplicable but
also not yet called for. 

Further, Nippon’s premature invocation of choice-of-law rules is exposed by the

fact that they have not yet pointed out any conflict between the laws of Japan
and ours. Before determining which law should apply, 1st there should exist a
conflict of laws situation requiring the application of the conflict of laws
rules. Also, when the law of a foreign country is invoked to provide the proper
rules for the solution of a case, the existence of such law must be pleaded and
proved.

It should be noted that when a conflicts case, one involving a foreign element,
is brought before a court or administrative agency, there are 3 alternatives
open to the latter in disposing of it: (1) dismiss the case, either because of lack
of jurisdiction or refusal to assume jurisdiction over the case; (2) assume
jurisdiction over the case and apply the internal law of the forum; or (3)
assume jurisdiction over the case and take into account or apply the law of
some other State or States. The court’s power to hear cases and controversies
is derived from the Constitution and the laws. While it may choose to recognize
laws of foreign nations, the court is not limited by foreign sovereign law short
of treaties or other formal agreements, even in matters regarding rights
provided by foreign sovereigns.

Neither can the other ground raised, forum non conveniens, be used to deprive
the RTC of its jurisdiction. 1st, it is not a proper basis for a motion
to dismissbecause Sec. 1, Rule 16 of the Rules of Court does not include it as a
ground. 2nd, whether a suit should be entertained or dismissed on the basis of
the said doctrinedepends largely upon the facts of the particular case and is
addressed to the sound discretion of the RTC. In this case, the RTC decided to
assume jurisdiction. 3rd, the propriety of dismissing a case based on this
principle requires a factual determination; hence, this conflicts principle is
more properly considered a matter of defense.

3.) [ G.R. No. 221815, November 29, 2017 ]

GLYNNA FORONDA-CRYSTAL, PETITIONER, V. ANIANA LAWAS SON, RESPONDENT.

DECISION
REYES, JR., J:
In law, nothing is as elementary as the concept of jurisdiction, for the same is the foundation upon which the courts exercise their power
of adjudication, and without which, no rights or obligation could emanate from any decision or resolution.
The Case
Challenged before this Court  via this Petition for Review on  Certiorari under Rule 45 of the Rules of Court is the Decision[1] of the Court
of Appeals (CA) in CA-G.R. CV No. 02226 promulgated on March 12, 2015, which affirmedin toto the Decision[2] dated November 24,
2006 of the Regional Trial Court (RTC), Branch 55 of Mandaue City. Likewise challenged is the subsequent Resolution[3] promulgated
on October 19, 2015 which upheld the earlier decision. 
The Antecedent Facts
Petitioner is the daughter of Eddie Foronda, the registered owner of a parcel of land located in Barrio Magay, Municipality of
Compostela, Province of Cebu. The latter derived his title over the property from a successful grant of a Free Patent (Free Patent No.
VII-519533), which is covered by Original Certificate of Title (OCT) No. OP-37324, more particularly described as follows: 

A PARCEL OF LAND (lot 1280, Case 3, Pls .962) situated in the Barrio of Magay, Municipality of Compostela, Province of Cebu, Island
of Cebu. Bounded on the SE., along line 1-2 by Lot 707 (As 07-01-000033-amended); along line 2-3 by Lot 1275; on the SW., along
line 3-4 by Lot 1281; on the NW., along line 4-5 by Lot 1315; along line 5-6 by Lot 1314; on the NE., along line 6-7 by Lot 1392, along
line 7-1 by Lot 1279, all of Compostela, Cadastre x x x.[4]
On March 15, 1999, Aniana Lawas Son (respondent) instituted an action for reconveyance and damages against Glynna Foronda-
Crystal (petitioner) alleging that, for twelve and a half years, she has been the lawful owner and possessor of the subject lot. She
alleged that she purchased the same from a certain Eleno T. Arias (Arias) on August 4, 1986 for a sum of P200,000.00. According to
her, since her acquisition, she has been religiously paying real property taxes thereon as evidenced by Tax Declaration No. 16408A,
which was issued under her name.[5]
According to the respondent, the issuance of the Free Patent in favor of the petitioner's father was "due to gross error or any other
cause."[6] In support thereof, the respondent alleged that "there is no tax declaration in the name of patentee Eddie Foronda" and that
this "goes to show that Eddie Foronda is not the owner of lot 1280 and neither has payment of real estate taxes been made by him
when he was still alive or by his heirs."[7]
 On April 13, 1999, herein petitioner filed a motion to dismiss on the grounds of (1) lack of jurisdiction, (2) venue is improperly laid, (3)
action has prescribed, and, (4) lack of cause of action. A week thereafter, the RTC issued an Order dated April 20, 1999,[8] which
dismissed the case for lack of jurisdiction. The RTC asserted that the "market value of the subject property per Tax Declaration No.
16408 (Annex B, Complaint) is P2,830.00" and thus, jurisdiction over the case lies with the Municipal Circuit Trial Court of Liloan-
Compostela, Cebu. 
However, in yet another Order[9] dated July 23, 1999, issued by the RTC following herein respondent's motion for reconsideration, the
RTC reconsidered and set aside its earlier ruling based on the following ratiocination: (1) Paragraph III of the Complaint stated that the
property was worth P200,000.00; (2) the Court has "judicial knowledge that under the BIR zonal valuation, the property located at
Magay, Compostela, Cebu carries the value that may summed (sic) up to more than P20,000.00 for the property with an area of 1,570
square meters";[10] and (3) the "tax declaration, sometimes being undervalued, is not controlling."[11] Hence, trial ensued.
On November 24, 2006, the RTC rendered its Decision in favor of the respondent. The Register of Deeds of Cebu was ordered to
cancel OCT No. OP-37324, and to issue, in lieu thereof, a new one under the name of the respondent. The dispositive portion of the
decision reads: 

WHEREFORE, premises considered, judgment in favor of the plaintiff and against the defendants:

1) Declaring the issuance of Original Certificate of Title No. OP-37324 (Free Patent No. VII-519533) in the name of Eddie Foronda a
grave error since he is not the owner of Lot 1280, and therefore null and void; 

2) Ordering the Register of Deeds of Cebu to cancel Original Certificate of Title No. OP-37324 (Free Patent No. VII-519533) and to
issue, in lieu thereof, a new one in the name of Aniana Lawas Son of Compostela, Cebu. No pronouncement as to damages and costs
of the suit.

SO ORDERED.[12]
Aggrieved, petitioner herein elevated the case to the CA. The material allegations that she presented included the following: (1) the
RTC rendered its decision with undue haste considering that the same was promulgated even before the expiration of the period within
which the parties' respective memoranda were to be filed; (2) the respondent was not able to prove that the lot she acquired from Arias
was Lot No. 1280; (3) the respondent failed to prove that she was in actual physical possession of the subject property whereas the
petitioner was able to do so since 1972; (4) the RTC erred in its order to cancel OCT No. OP-37324 and to issue, in lieu thereof, a new
title in herein respondent's name; and (5) the action filed by the respondent was already barred by prescription and laches.

On March 12, 2015, the CA rendered the assailed Decision, which affirmed the RTC decision. The fallo of CA decision reads: 
WHEREFORE, premises considered, the instant appeal is DENIED. The Decision of the Regional Trial Court, Branch 55, Mandaue City
dated November 24, 2006 in Civil Case No. MAN-3498, is hereby AFFIRMED.

SO ORDERED.[13]
On October 19, 2015, the Resolution[14] issued by the CA denied the petitioner's motion for reconsideration. Hence, this petition for
review on certiorari under Rule 45 of the Rules of Court.
The Issues
The petitioner anchors her plea for the reversal of the assailed decision on the following grounds:[15]
I. THE COURT OF APPEALS ERRED IN NOT DISMISSING THIS CASE ON THE GROUND OF LACK OF JURISDICTION OF
THE RTC OF MANDAUE CITY OVER THIS CASE AS THE ASSESSED VALUE OF THE PROPERTY SUBJECT OF THIS CASE
IS P1,030.00 AND THE PROPERTY IS LOCATED IN COMPOSTELA, CEBU. 

II. THE COURT OF APPEALS ERRED IN NOT DECLARING THE PROCEEDINGS AS WELL AS THE JUDGMENT
RENDERED BY THE RTC AS VOID 

III. THE COURT OF APPEALS ERRED IN NOT APPLYING ARTICLE 434 OF THE CIVIL CODE TO THE CASE AT BAR

IV. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT LOT NO. 1280 WAS A PUBLIC GRANT TO WHICH EDDIE
FORONDA WAS ISSUED A FREE PATENT 

V. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE ACTION IS BARRED BY PRESCRIPTION VI. THE
COURT OF APPEALS ERRED IN NOT HOLDING THAT THE ACTION IS BARRED BY PRESCRIPTION (SIC) VII. THE COURT
OF APPEALS ERRED IN NOT HOLDING THAT THE VALIDITY AND INTEGRITY OF THE DECISION OF THE RTC IS
QUESTIONABLE BECAUSE IT WAS RENDERED WITH UNDUE HASTE. 
The foregoing assignment of errors could be summarized in three main issues: (1) whether or not the RTC validly acquired jurisdiction
over the case, and whether or not the RTC decision was void ab initio; (2) whether or not the Original Certificate of Title issued under
the name of petitioner's father should be canceled and set aside on the strength of the respondent's allegations of ownership over the
same; and (3) whether or not the action is already barred by prescription.
The Court's Ruling
The petition is impressed with merit. 

On the Issue of Jurisdiction

Jurisdiction is defined as the power and authority of a court to hear, try, and decide a case.[16] In order for the court or an adjudicative
body to have authority to dispose of the case on the merits, it must acquire, among others, jurisdiction over the subject matter.[17] It is
axiomatic that jurisdiction over the subject matter is the power to hear and determine the general class to which the proceedings in
question belong; it is conferred by law and not by the consent or acquiescence of any or all of the parties or by erroneous belief of the
court that it exists.[18]
What is relevant in this case, therefore, is the delineation provided for by law which separates the jurisdictions of the second level
courts—the Regional Trial Courts—and the first level courts—the Metropolitan Trial Courts (MeTC), Municipal Trial Courts (MTC),
Municipal Circuit Trial Courts (MCTC), and Municipal Trial Courts in the Cities (MTCC). 

This can be easily ascertained through a reading of the Judiciary Reorganization Act of 1980, as amended by Republic Act No. 7691.[19]
According to this law, in all civil actions which involve title to, or possession of, real property, or any interest therein, the RTC shall
exercise exclusive original jurisdiction where the assessed value of the property exceeds P20,000.00 or, for civil actions in Metro
Manila, where such value exceeds P50,000.00.[20] For those below the foregoing threshold amounts, exclusive jurisdiction lies with the
MeTC, MTC, MCTC, or MTCC.[21]
For a full discourse on the resolution of the present petition, emphasis must be given on the assessed values[22]—not the fair market
values—of the real properties concerned.
According to the case of Heirs of Concha, Sr. v. Spouses Lumocso,[23] 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. Heirs of Concha, Sr. averred this definitive
ruling by tracing the history of the The Judiciary Reorganization Act of 1980, as amended. It said: 
The original text of Section 19(2) of B.P. 129 as well as its forerunner, Section 44(b) of R.A. 296, as amended, gave the RTCs x x x
exclusive original jurisdiction. x x x Thus, under the old law, there was no substantial effect on jurisdiction whether a case is one, the
subject matter of which was incapable of pecuniary estimation, under Section 19(1) of B.P. 129 or one involving title to property under
Section 19(2).

The distinction between the two classes became crucial with the amendment introduced by R.A. No. 7691 in 1994 which expanded the
exclusive original jurisdiction of the first level courts. x x x. Thus, under the present law, original jurisdiction over cases the subject
matter of which involves "title to, possession of, real property or any interest therein" under Section 19(2) of B.P. 129 is divided between
the first and second level courts, with the assessed value of the real property involved as the benchmark. This amendment was
introduced to "unclog the overloaded dockets of the RTCs which would result in the speedier administration of justice."[24] (Emphasis,
underscoring and formatting supplied, citations omitted)
Time and again, this Court has continuously upheld Heirs of Concha, Sr.'s ruling on this provision of law.[25] In fact, in Malana, et al. v.
Tappa, et al.[26] the Court said that "the Judiciary Reorganization Act of 1980, as amended, uses the word 'shall' and explicitly requires
the MTC to exercise exclusive original jurisdiction over all civil actions which involve title to or possession of real property where the
assessed value does not exceed P20,000.00."[27]
To determine the assessed value, which would in turn determine the court with appropriate jurisdiction, an examination of the
allegations in the complaint is necessary. It is a hornbook doctrine that the court should only look into the facts alleged in the complaint
to determine whether a suit is within its jurisdiction.[28] According to the case of Spouses Cruz v. Spouses Cruz, et al.,[29] only these facts
can be the basis of the court's competence to take cognizance of a case, and that one cannot advert to anything not set forth in the
complaint, such as evidence adduced at the trial, to determine the nature of the action thereby initiated.[30]
It is not a surprise, therefore, that a failure to allege the assessed value of a real property in the complaint would result to a dismissal of
the case. This is because absent any allegation in the complaint of the assessed value of the property, it cannot be determined whether
the RTC or the MTC has original and exclusive jurisdiction over the petitioner's action. Indeed, the courts cannot take judicial notice of
the assessed or market value of the land.[31] This is the same ratio put forth by the Court in the case of Spouses Cruz v. Spouses Cruz,
et al.,[32] where the case was dismissed partly on the basis of the following: 
The complaint did not contain any such allegation on the assessed value of the property. There is no showing on the face of the
complaint that the RTC had jurisdiction over the action of petitioners. Indeed, absent any allegation in the complaint of the assessed
value of the property, it cannot be determined whether it is the RTC or the MTC which has original and exclusive jurisdiction over the
petitioners' action.[33] (Citations omitted)
In Quinagoran v. Court of Appeals,[34] the Court had no qualms in dismissing the case for failing to allege the assessed value of the
subject property. Similar to  Spouses Cruz,[35] Quinagoran[36] held that: "Considering that the respondents failed to allege in their
complaint the assessed value of the subject property, the RTC seriously erred in denying the motion to dismiss. Consequently, all
proceedings in the RTC are null and void, and the CA erred in affirming the RTC."
This is not to say, however, that there is no room for a liberal interpretation of this rule. In Tumpag v. Tumpag,[37] the Court, through
Justice Brion, provided for an instance when an exception to the strict application could be allowed. It said: 
Generally, the court should only look into the facts alleged in the complaint to determine whether a suit is within its jurisdiction. There
may be instances, however, when a rigid application of this rule may result in defeating substantial justice or in prejudice to a party's
substantial right.[38]
In that case, there was also no allegation of the assessed value of the property. However, the Court pointed out that the facts contained
in the Declaration of Real Property, which was attached to the complaint, could have facially resolved the question on jurisdiction and
would have rendered the lengthy litigation on that very point unnecessary.[39] In essence, the Court said that the failure to allege the real
property's assessed value in the complaint would not be fatal if, in the documents annexed to the complaint, an allegation of the
assessed value could be found.
A reading of the quoted cases would reveal a pattern which would invariably guide both the bench and the bar in similar situations.
Based on the foregoing, the rule on determining the assessed value of a real property, insofar as the identification of the jurisdiction of
the first and second level courts is concerned, would be two-tiered: 

First, the general rule is that jurisdiction is determined by the assessed value of the real property as alleged in the complaint; and 
Second, the rule would be liberally applied if the assessed value of the property, while not alleged in the complaint, could still be
identified through a facial examination of the documents already attached to the complaint. 

Indeed, it is by adopting this two-tiered rule that the Court could dispense with a catena of cases specifically dealing with issues
concerning jurisdiction over real properties.

In upholding these afore-quoted rule, however, the Court is not unmindful of the cases of Barangay Piapi v. Talip[40]and Trayvilla v.
Sejas[41] where the market value of the property, instead of the assessed value thereof, was used by the Court as basis for determining
jurisdiction.
In Barangay Piapi,[42] the complaint did not allege the assessed value of the subject property. What it alleged was the market value
thereof. The Court held that, in the absence of an allegation of assessed value in the complaint, the Court shall consider the alleged
market value to determine jurisdiction.
Notably, this case referred to Section 7(b), Rule 141 of the Rules of Court, which deals with Legal Fees, to justify its reliance on the
market value. It said: 

The Rule requires that "the assessed value of the property, or if there is none, the estimated value thereof, shall be alleged by
the claimant." It bears reiterating that what determines jurisdiction is the allegations in the complaint and the reliefs prayed for.
Petitioners' complaint is for reconveyance of a parcel of land. Considering that their action involves the title to or interest in real
property, they should have alleged therein its assessed value. However, they only specified the market value or estimated value, which
is P15,000.00. Pursuant to the provision of Section 33 (3) quoted earlier, it is the Municipal Circuit Trial Court of Padada-Kiblawan,
Davao del Sur, not the RTC, which has jurisdiction over the case.[43] (Italics in the original, and emphasis supplied, citations omitted)
However, the rule alluded to above, while originally containing the sentence: "In a real action, the assessed value of the property, or if
there is none, the estimated value thereof shall be alleged by the claimant and shall be the basis in computing the fees," has already
been deleted through an amendment by A.M. No. 04-2-04-SC. As it currently stands, Section 7 of Rule 141 of the Rules of Court
reads: 

Section 7 Clerks of Regional Trial Courts.— 

a) For filing an action or a permissive OR COMPULSORY counter-claim, CROSS-CLAIM, or money claim against an estate not based
on judgment, or for filing a third-party, fourth-party, etc. complaint, or a complaint-in-intervention, if the total sum claimed, INCLUSIVE
OF INTERESTS, PENALTIES, SURCHARGES, DAMAGES OF WHATEVER KIND, AND ATTORNEY'S FEES, LITIGATION
EXPENSES AND COSTS and/or in cases involving property, the FAIR MARKET value of the REAL property in
litigation STATED IN THE CURRENT TAX DECLARATION OR CURRENT ZONAL VALUATION OF THE BUREAU OF INTERNAL
REVENUE, WHICHEVER IS HIGHER, OR IF THERE IS NONE, THE STATED VALUE OF THE PROPERTY IN LITIGATION OR THE
VALUE OF THE PERSONAL PROPERTY IN LITIGATION AS ALLEGED BY THE CLAIMANT, is: x x x (Emphasis and underscoring
supplied)
Two things must be said of this: first, Rule 141 of the Rules of Court concerns the amount of the prescribed filing and docket fees, the
payment of which bestows upon the courts the jurisdiction to entertain the pleadings to be filed;[44]and second, the latest iteration of the
same provision already deleted the phrase "estimated value thereof," such that the determination of the amount of prescribed filing and
docket fees are now based on the following: (a) the fair market value of the real property in litigation stated in the current tax declaration
or current zonal valuation of the Bureau of Internal Revenue; or (b) the stated value of the real or personal property in litigation as
alleged by the claimant.
A reading of the discourse on this would indicate that the jurisdiction referred to above does not deal with the delineation of the
jurisdictions of the first and second level courts, but with the acquisition of jurisdiction by the courts through the payment of the
prescribed filing and docket fees.

This is the same tenor of the Court's decision in Trayvilla. In that case, where no assessed value was likewise alleged in the complaint,
the Court determined jurisdiction by considering the actual amount by which the property was purchased and as written in the Amended
Complaint. The Court stated that: 
However, the CA failed to consider that in determining jurisdiction, it could rely on the declaration made in the Amended Complaint that
the property is valued at P6,000,00. The handwritten document sued upon and the pleadings indicate that the property was
purchased by petitioners for the price of P6,000.00. For purposes of filing the civil case against respondents, this amount
should be the stated value of the property in the absence of a current tax declaration or zonal valuation of the BIR.[45] (Emphasis
supplied)
But then again, like the discussion on Barangay Piapi above, Trayvilla was one which dealt with the payment of the required filing and
docket fees. The crux of the case was the acquisition of jurisdiction by payment of docket fees, and not the delineation of the jurisdiction
of the first and second level courts. In fact, Trayvilla interchangeably used the terms "assessed value" and "market value" in a
manner that does not even recognize a difference.
Like Barangay Piapi, therefore, Spouses Trayvilla must not be read in the context of jurisdiction of first and second level courts as
contemplated in the Judiciary Reorganization Act of 1980, as amended,[46] where the assessed values of the properties are required.
These cases must perforce be read in the context of the determination of the actual amount of prescribed filing and docket fees
provided for in Rule 141 of the Rules of Court.
Having laid out the essential rules in determining the jurisdiction of the first and second level courts for civil actions which involve title to,
or possession of, real property, or any interest therein, the Court now shifts focus to the specific circumstances that surround the
current case.
In here, the respondent failed to allege in her complaint the assessed value of the subject property. Rather, what she included therein
was an allegation of its market value amounting to P200,000.00.[47] In the course of the trial, the petitioner asserted that the assessed
value of the property as stated in the tax declaration was merely P1,030.00, and therefore the RTC lacked jurisdiction.
The question thus posed before this Court was whether or not the RTC should have dismissed the case for lack of jurisdiction, and in
the affirmative, whether or not the RTC decision should be rendered void for being issued without jurisdiction.

As discussed above, settled is the requirement that the Judiciary Reorganization Act of 1980, as amended, required the allegation of
the real property's assessed value in the complaint. That the complaint in the present case did not aver the assessed value of the
property is a violation of the law, and generally would be dismissed because the court which would exercise jurisdiction over the case
could not be identified.

However, a liberal interpretation of this law, as opined by the Court in Tumpag,[48] would necessitate an examination of the documents
annexed to the complaint. In this instance, the complaint referred to Tax Declaration No. 16408A, attached therein as Annex "B," which
naturally would contain the assessed value of the property. A perusal thereof would reveal that the property was valued at P2,826.00.
On this basis, it is clear that it is the MTC, and not the RTC, that has jurisdiction over the case. The RTC should have upheld its Order
dated November 8, 2006 which dismissed the same. Consequently, the decision that it rendered is null and void.

In the case of Maslag v. Monzon,[49] the Court had occasion to rule that an order issued by a court declaring that it has original and
exclusive jurisdiction over the subject matter of the case when under the law it has none cannot likewise be given effect. It amounts to
usurpation of jurisdiction which cannot be countenanced. Since the Judiciary Reorganization Act of 1980, as amended, already
apportioned the jurisdiction of the MTC and the RTC in cases involving title to property, neither the courts nor the petitioner could alter
or disregard the same.
In yet another case, Diona v. Balangue,[50] the Court ruled that void judgment for want of jurisdiction is no judgment at all. It cannot be
the source of any right nor the creator of any obligation. No legal rights can emanate from a resolution that is null and void. As said by
the Court in Cañero v. University of the Philippines:[51]
A void judgment is not entitled to the respect accorded to a valid judgment, but may be entirely disregarded or declared inoperative by
any tribunal in which effect is sought to be given to it. It has no legal or binding effect or efficacy for any purpose or at any place. It
cannot affect, impair or create rights. It is not entitled to enforcement and is, ordinarily, no protection to those who seek to enforce. In
other words, a void judgment is regarded as a nullity, and the situation is the same as it would be if there was no judgment.[52]
Thus, considering the foregoing, it would be proper for the Court to immediately dismiss this case without prejudice to the parties' filing
of a new one before the MTC that has jurisdiction over the subject property. Consequently, the other issues raised by the petitioner
need not be discussed further.

WHEREFORE, premises considered, the assailed Decision in CA-G.R. CV No. 02226 dated March 12, 2015, and the Resolution dated
October 19, 2015 of the Court of Appeals, as well as the Decision dated November 24, 2006 of the Regional Trial Court, Branch 55 of
Mandaue City, are hereby ANNULLED and SET ASIDE for being issued without jurisdiction. This is without prejudice to the filing of the
parties of the proper action before the proper court.
SO ORDERED.

4.) El
Banco Espanol-Filipino vs. Vicente Palanca G.R. No. L-
11390, March 26, 1918
El Banco Espanol-Filipino vs. Palanca
G.R. No. L-11390, March 26, 1918

* JURISDICTION, HOW ACQUIRED: Jurisdiction over the property which is the subject of the litigation may result either
from a seizure of the property under legal process, whereby it is brought into the actual custody of the law, or it may result
from the institution of legal proceedings wherein, under special provisions of law, the power of the court over the property
is recognized and made effective.
* The action to foreclose a mortgage is said to be a proceeding quasi in rem, by which is expressed the idea that while it is
not strictly speaking an action in rem yet it partakes of that nature and is substantially such.
* DUE PROCESS IN FORECLOSURE PROCEEDINGS: Property is always assumed to be in the possession of its owner,
in person or by agent; and he may be safely held, under certain conditions, to be affected with knowledge that
proceedings have been instituted for its condemnation and sale.

FACTS:

Engracio Palanca Tanquinyeng y Limquingco mortgaged various parcels of real property in Manila to El Banco Espanol-
Filipino. Afterwards, Engracio returned to China and there he died on January 29, 1810 without returning again to the
Philippines. The mortgagor then instituted foreclosure proceeding but since defendant is a non-resident, it was necessary
to give notice by publication. The Clerk of Court was also directed to send copy of the summons to the defendant’s last
known address, which is in Amoy, China. It is not shown whether the Clerk complied with this requirement. Nevertheless,
after publication in a newspaper of the City of Manila, the cause proceeded and judgment by default was rendered. The
decision was likewise published and afterwards sale by public auction was held with the bank as the highest bidder. On
August 7, 1908, this sale was confirmed by the court. However, about seven years after the confirmation of this sale, a
motion was made by Vicente Palanca, as administrator of the estate of the original defendant, wherein the applicant
requested the court to set aside the order of default and the judgment, and to vacate all the proceedings subsequent
thereto. The basis of this application was that the order of default and the judgment rendered thereon were void because
the court had never acquired jurisdiction over the defendant or over the subject of the action.

ISSUE:

* Whether or not the lower court acquired jurisdiction over the defendant and the subject matter of the action
* Whether or not due process of law was observed

RULING:

On Jurisdiction

The word “jurisdiction” is used in several different, though related, senses since it may have reference (1) to the authority
of the court to entertain a particular kind of action or to administer a particular kind of relief, or it may refer to the power of
the court over the parties, or (2) over the property which is the subject to the litigation.

The sovereign authority which organizes a court determines the nature and extent of its powers in general and thus fixes
its competency or jurisdiction with reference to the actions which it may entertain and the relief it may grant.

How Jurisdiction is Acquired

Jurisdiction over the person is acquired by the voluntary appearance of a party in court and his submission to its authority,
or it is acquired by the coercive power of legal process exerted over the person.

Jurisdiction over the property which is the subject of the litigation may result either from a seizure of the property under
legal process, whereby it is brought into the actual custody of the law, or it may result from the institution of legal
proceedings wherein, under special provisions of law, the power of the court over the property is recognized and made
effective. In the latter case the property, though at all times within the potential power of the court, may never be taken
into actual custody at all. An illustration of the jurisdiction acquired by actual seizure is found in attachment proceedings,
where the property is seized at the beginning of the action, or some subsequent stage of its progress, and held to abide
the final event of the litigation. An illustration of what we term potential jurisdiction over the res, is found in the proceeding
to register the title of land under our system for the registration of land. Here the court, without taking actual physical
control over the property assumes, at the instance of some person claiming to be owner, to exercise a jurisdiction in rem
over the property and to adjudicate the title in favor of the petitioner against all the world.

In the terminology of American law the action to foreclose a mortgage is said to be a proceeding quasi in rem, by which is
expressed the idea that while it is not strictly speaking an action in rem yet it partakes of that nature and is substantially
such. The expression "action in rem" is, in its narrow application, used only with reference to certain proceedings in courts
of admiralty wherein the property alone is treated as responsible for the claim or obligation upon which the proceedings
are based. The action quasi rem differs from the true action in rem in the circumstance that in the former an individual is
named as defendant, and the purpose of the proceeding is to subject his interest therein to the obligation or lien burdening
the property. All proceedings having for their sole object the sale or other disposition of the property of the defendant,
whether by attachment, foreclosure, or other form of remedy, are in a general way thus designated. The judgment entered
in these proceedings is conclusive only between the parties.

It is true that in proceedings of this character, if the defendant for whom publication is made appears, the action becomes
as to him a personal action and is conducted as such. This, however, does not affect the proposition that where the
defendant fails to appear the action is quasi in rem; and it should therefore be considered with reference to the principles
governing actions in rem.

5.)