FIRST DIVISION [ G.R. No.
212690 (Formerly UDK-15080), February 20, 2017 ] In the instant case, the plaintiff's complaint is for the recovery of damages for the alleged
SPOUSES ROMEO PAJARES AND IDA T. PAJARES, PETITIONERS, V. REMARKABLE LAUNDRY AND
DRY CLEANING, REPRESENTED BY ARCHEMEDES G. SOLIS, RESPONDENT.
Breach of contract may give rise to an action for specific performance or rescission of contract.[1] It may
also be the cause of action in a complaint for damages filed pursuant to Art. 1170 of the Civil Code. [2] In
the specific performance and rescission of contract cases, the subject matter is incapable of pecuniary
estimation, hence jurisdiction belongs to the Regional Trial Court (RTC). In the case for damages, however,
the court that has jurisdiction depends upon the total amount of the damages claimed.
Assailed in this Petition for Review on Certiorari[3] is the December 11, 2013 Decision[4] of the Court of
Appeals (CA) in CA-G.R. CEB SP No. 07711 that set aside the February 19, 2013 Order[5] of the RTC, Branch
17, Cebu City dismissing Civil Case No. CEB-39025 for lack of jurisdiction.
Factual Antecedents
On September 3, 2012, Remarkable Laundry and Dry Cleaning (respondent) filed a Complaint
denominated as "Breach of Contract and Damages"[6] against spouses Romeo and Ida Pajares (petitioners)
before the RTC of Cebu City, which was docketed as Civil Case No. CEB-39025 and assigned to Branch 17
of said court. Respondent alleged that it entered into a Remarkable Dealer Outlet Contract [7] with
petitioners whereby the latter, acting as a dealer outlet, shall accept and receive items or materials for
laundry which are then picked up and processed by the former in its main plant or laundry outlet; that
petitioners violated Article IV (Standard Required Quota & Penalties) of said contract, which required
them to produce at least 200 kilos of laundry items each week, when, on April 30, 2012, they ceased dealer
outlet operations on account of lack of personnel; that respondent made written demands upon
petitioners for the payment of penalties imposed and provided for in the contract, but the latter failed to
pay; and, that petitioners' violation constitutes breach of contract. Respondent thus prayed, as fol1ows:
WHEREFORE, premises considered, by reason of the above-mentioned breach of the subject dealer
contract agreement made by the defendant, it is most respectfully prayed of the Honorable Court to order
the said defendant to pay the following incidental and consequential damages to the plaintiff., to wit:
a) TWO HUNDRED THOUSAND PESOS (PHP200,000.00) plus legal interest as incidental and consequential
[sic] for violating Articles IV and XVI of the Remarkable Laundry Dealer Contract dated 08 September
2011.
b) Thirty Thousand Pesos (P30,000.00) as legal expenses.
c) Thirty Thousand Pesos (P30,000.00) as exemplary damages.
d) Twenty Thousand Pesos (P20,000.00) as cost of suit.
e) Such other reliefs that the Honorable Court deems as just and equitable.[8] (Italics in the original)
Petitioners submitted their Answer,[9] to which respondent filed its Reply.[10]
During pre-trial, the issue of jurisdiction was raised, and the parties were required to submit their
respective position papers.
Ruling of the Regional Trial Court
On February 19, 2013, the RTC issued an Order dismissing Civil Case No. CEB-39025 for lack of jurisdiction,
stating:
breach of contract. The complaint sought the award of P200,000.00 as incidental and
consequential damages; the amount of P30,000.00 as legal expenses; the amount of
P30,000.00 as exemplary damages; and the amount of P20,000.00 as cost of the suit, or for
the total amount of P280,000.00 as damages.
Under the provisions of Batas Pambansa Blg. 129 as amended by Republic Act No. 7691, the
amount of demand or claim in the complaint for the Regional Trial Courts (RTCs) to exercise
exclusive original jurisdiction shall exceed P300,000.00; otherwise, the action shall fall under
the jurisdiction of the Municipal Trial Courts. In this case, the total amount of demand in the
complaint is only P280,000.00, which is less than the jurisdictional amount of the RTCs. Hence,
this Court (RTC) has no jurisdiction over the instant case.
WHEREFORE, premises considered, the instant case is hereby DISMISSED for lack of
jurisdiction.
Notify the counsels.
SO ORDERED.[11] (Emphasis in the original)
Respondent filed its Motion for Reconsideration,[12] arguing that as Civil Case No. CEB-39025 is for breach
of contract, or one whose subject is incapable of pecuniary estimation, jurisdiction thus falls with the RTC.
However, in an April29, 2013 Order,[13] the RTC held its ground.
Ruling of the Court of Appeals
Respondent filed CA-G.R. CEB SP No. 07711, a Petition for Certiorari[14] seeking to nullify the RTC's
February 19, 2013 and April 29, 2013 Orders. It argued that the RTC acted with grave abuse of discretion
in dismissing Civil Case No. CEB-39025. According to respondent, said case is one whose subject matter
is incapable of pecuniary estimation and that the damages prayed for therein are merely incidental
thereto. Hence, Civil Case No. CEB-39025 falls within the jurisdiction of the RTC pursuant to Section 19 of
Batas Pambansa Blg. 129, as Amended (BP 129).
On December 11, 2013, the CA rendered the assailed Decision setting aside the February 19, 2013 Order
of the RTC and remanding the case to the court a quo for further proceedings. It held as follows:
In determining the jurisdiction of an action whose subject is incapable of pecuniary estimation,
the nature of the principal action or remedy sought must first be ascertained. If it is primarily for
the recovery of a sum of money, the claim is considered capable of pecuniary estimation and the
jurisdiction of the court depends on the amount of the claim. But, where the primary issue is
something other than the right to recover a sum of money, where the money claim is purely
incidental to, or a consequence of the principal relief sought, such are actions whose subjects are
incapable of pecuniary estimation, hence cognizable by the RTCs.[15]
xxxx
Verily, what determines the nature of the action and which court has jurisdiction over it are the
allegations of the complaint and the character of the relief sought.[16]
 In our considered view, the complaint, is one incapable of pecuniary estimation; thus, one within
the RTC's jurisdiction. x x x
xxxx
A case for breach of contract [sic] is a cause of action either for specific performance or rescission
of contracts. An action for rescission of contract, as a counterpart of an action for specific
performance, is incapable of pecuniary estimation, and therefore falls under the jurisdiction of the
RTC.[17]
Thus, the totality of damages principle finds no application in the instant case since the same
applies only when damages is principally and primarily demanded in accordance with the
specification in Administrative Circular No. 09-94 which reads: 'in cases where the claim for
damages is the main cause of action...the amount of such claim shall be considered in determining
the jurisdiction of the court.'
Thus, the court a quo should not have dismissed the instant case.
WHEREFORE, in view of the foregoing, the Order dated February 19, 2013 of the Regional Trial
Court, 7th Judicial Region, Branch 17, Cebu City in Civil Case No. CEB-39025 for Breach of Contract
and Damages is hereby REVERSED and SET ASIDE. This case is hereby REMANDED to the RTC
which is ORDERED to PROCEED with the trial on the merits with dispatch.
SO ORDERED.[18]
Petitioners sought to reconsider, but were denied. Hence, the present Petition.
Issue
[19]
In a June 29, 2015 Resolution, this Court resolved to give due course to the Petition, which claims that
the CA erred in declaring that the RTC had jurisdiction over respondent's Complaint which, although
denominated as one for breach of contract, is essentially one for simple payment of damages.
Petitioners' Arguments
In praying that the assailed CA dispositions be set aside and that the RTC's February 19, 2013 Order
dismissing Civil Case No. CEB-39025 be reinstated, petitioners in their Petition and Reply[20] espouse the
original findings of the RTC that Civil Case No. CEB-39025 is for the recovery of a sum of money in the
form of damages. They asserted that in determining jurisdiction over the subject matter, the allegations
in the Complaint and the principal relief in the prayer thereof must be considered; that since respondent
merely prayed for the payment of damages in its Complaint and not a judgment on the claim of breach
of contract, then jurisdiction should be determined based solely on the total amount of the claim or
demand as alleged in the prayer; that while breach of contract may involve a claim for specific
performance or rescission, neither relief was sought in respondent's Complaint; and, that respondent
"chose to focus his [sic] primary relief on the payment of damages,"[21] which is "the true, actual, and
principal relief sought, and is not merely incidental to or a consequence of the alleged breach of
contract."[22] Petitioners conclude that, applying the totality of claims rule, respondent's Complaint should
be dismissed as the claim stated therein is below the jurisdictional amount of the RTC.
Respondent's Arguments
Respondent, on the other hand, counters in its Comment[23] that the CA is correct in declaring that Civil
Case No. CEB-39025 is primarily based on breach of contract, and the damages prayed for are merely
incidental to the principal action; that the Complaint itself made reference to the Remarkable Dealer
Outlet Contract and the breach committed by petitioners, which gave rise to a cause of action against the
latter; and, that with the filing of the case, the trial court was thus called upon to determine whether
petitioners violated the dealer outlet contract, and if so, the amount of damages that may be adjudged
in respondent's favor.
Our Ruling
The Court grants the Petition. The RTC was correct in categorizing Civil Case No. CEB-39025 as an action
for damages seeking to recover an amount below its jurisdictional limit.
Respondent's complaint denominated as one for ''Breach of Contract & Damages" is neither an
action for specific performance nor a complaint for rescission of contract.
In ruling that respondent's Complaint is incapable of pecuniary estimation and that the RTC has
jurisdiction, the CA comported itself with the following ratiocination:
A case for breach of contract [sic] is a cause of action either for specific performance or rescission of
contracts. An action for rescission of contract, as a counterpart of an action for specific performance, is
incapable of pecuniary estimation, and therefore falls under the jurisdiction of the RTC.[24]
without, however, determining whether, from the four corners of the Complaint, respondent actually
intended to initiate an action for specific performance or an action for rescission of contract. Specific
performance is ''[t]he remedy of requiring exact performance of a contract in the specific form in which it
was made, or according to the precise terms agreed upon. [It is t]he actual accomplishment of a contract
by a party bound to fulfill it."[25] Rescission of contract under Article 1191 of the Civil Code, on the other
hand, is a remedy available to the obligee when the obligor cannot comply with what is incumbent upon
him.[26] It is predicated on a breach of faith by the other party who violates the reciprocity between them.
Rescission may also refer to a remedy granted by law to the contracting parties and sometimes even to
third persons in order to secure reparation of damages caused them by a valid contract, by means of
restoration of things to their condition in which they were prior to the celebration of the contract.[27]
In a line of cases, this Court held 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 trial 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, where the money claim is purely incidental to, or a consequence of, the principal
relief sought, 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 (now Regional
Trial Courts).[28]
To write finis to this controversy, therefore, it is imperative that we first determine the real nature of making the whole business endeavor totally dependent upon their [sic] whims and caprices. (Attached
respondent's principal action, as well as the relief sought in its Complaint, which we quote in haec verba: and marked as Annex "B" is a copy of letter of the defendant dated April 24, 2012.)
REPUBLIC OF THE PHILIPPNES
REGIONAL TRIAL COURT 6. The aforementioned act of unilateral cessation of operation by the defendant constitutes a serious
BRANCH ____ breach to [sic] the contract because it totally, whimsically and grossly disregarded the Remarkable Laundry
CEBUCITY Dealer Outlet Contract, which resulted to [sic] failure on its part in obtaining the minimum purchase or
Remarkable Laundry delivery of 200 kilos per week for the entire duration of its cessation of operations.
Civil Case No. ____
and Dry Cleaning
herein represented by 7. Under the aforementioned Dealer Contract, specifically m Article XV of the same are classified as
For: Breach of Contract & Damages
Archemedes G. Solis, BREACH BY THE OUTLETS:
Plaintiff,
'The parties agree that the happening of any of the stipulation and events by the dealer outlet is otherwise
[sic] in default of any of its obligations or violate any of the terms and condition under this agreement.
vs.

Any violation of the above-mentioned provisions shall result in the immediate termination of this
Spouses Romeo Pajares agreement, without prejudice to any of the RL Main Operators rights or remedies granted to it by law.
and Ida T. Pajares,
Defendants. THE DEALER OUTLET SHALL ALSO BE LIABLE TO PAY A FINE OF TWENTY FIVE THOUSAND PESOS,
(P25,000.00) FOR EVERY VIOLATION AND PHP 50,000 IF PRE-TERMINATION BY THE RL MAIN OPERATOR
-------------------------------------------------------------------------------- DUE TO BREACH OF THIS AGREEMENT.'

COMPLAINT 8. Likewise it is provided in the said contract that:

Plaintiff, by counsels, to the Honorable Court most respectfully states THAT:
l. Plaintiff Remarkable Laundry and Dry Cleaning Services, is a sole proprietorship business owned by
Archemedes Solis with principal office address at PREDECO CMPD AS-Ostechi Bldg. Banilad, Hernan
Cortes St., Mandaue City.
... The DEALER OUTLET must have a minimum 200 kilos on a six-day or per week pick-up for the entire
duration of the contract to free the dealer outlet from being charge[d] Php 200/week on falling below
required minimum kilos per week of laundry materials. Automatic charging shall become part of the
billing on the services of the dealer outlet on cases where the minimum requirements on required kilos
are not met.[']

2. Defendant Ida Pajares is of legal age, Filipino, married with address at Hermag Village, Basak Mandaue
City where she can be served with summons and other processes of the Honorable Court.
3. On 08 SEP 2011, parties entered and signed a Remarkable Laundry Dealer Outlet Contract for the
processing of laundry materials, plaintiff being the owner of Remarkable Laundry and the defendant being
the authorized dealer of the said business. (Attached and marked as Annex "A" is a copy of the Remarkable
Laundry Dealer Outlet Contract.)
CAUSES OF ACTION:
4. Sometime on [sic] the second (2nd) quarter of 2012, defendant failed to follow the required standard
purchase quota mentioned in Article IV of the subject dealership agreement.
9. The cessation of operation by the defendant, which is tantamount to gross infraction to [sic] the subject
contract, resulted to [sic] incidental damages amounting to Two Hundred Thousand Pesos
(PHP200,000.00). Defendant should have opted to comply with the Pre-termination clause in the subject
contract other than its [sic] unilateral and whimsical cessation of operations.
10. The plaintiff formally reminded the defendant of her obligations under the subject contract through
demand letters, but to no avail. The defendant purposely ignored the letters by [sic] the plaintiff. (Attached
and marked as Annex "C" to "C-2" are the Demand Letters dated May 2, 2012, June 2, 2012 and June 19,
2012 respectively.)
11. To reiterate, the defendant temporarily stopped its business operation prior to the two-year contract
duration had elapsed to the prejudice of the plaintiff, which is a clear disregard of its two-year obligation
to operate the business unless a pre-termination is called.

5. Defendant through a letter dated April 24, 2012 said it [sic] would CEASE OPERATION. It [sic] further 12. Under Article 1159 of the Civil Code of the Philippines provides [sic]:
stated that they [sic] would just notify or advise the office when they are [sic] ready for the business again
'Obligations arising from contracts have the force of law between the contracting parties and should be
complied with in good faith'
13. Likewise, Article 1170 of the Civil Code of the Philippines [provides] that:
'Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those
who in any manner contravene the tenor thereof are liable for damages.'
14. That the above-mentioned violations by the defendant to the Remarkable Laundry Dealer Contract,
specifically Articles IV and XVI thereof constitute gross breach of contract which are unlawful and
malicious under the Civil Code of the Philippines, which caused the plaintiff to incur incidental and
consequential damages as found in the subject dealer contract in the total amount of Two Hundred
Thousand Pesos (PHP200,000.00) and incidental legal expenses to protect its rights in the amount of
P30,000.00
PRAYER:
WHEREFORE, premises considered, by reason of the above-mentioned breach of the subject dealer
contract agreement made by the defendant, it is most respectfully prayed of the Honorable Court to order
the said defendant to pay the following incidental and consequential damages to the plaintiff, to wit:
a) TWO HUNDRED THOUSAND PESOS (PHP200,000.00) plus legal interest as incidental and consequential
[damages] for violating Articles IV and XVI of the Remarkable Laundry Dealer Contract dated 08 SEP 2011;
b) Thirty Thousand Pesos (P30,000.00) as legal expenses;
c) Thirty Thousand Pesos (P30,000.00) as exemplary damages;
d) Twenty Thousand Pesos (P20,000.00) as cost of suit;
e) Such other reliefs that the Honorable Court deems as just and equitable.
August 31, 2012, Cebu City, Philippines.[29]
An analysis of the factual and material allegations in the Complaint shows that there is nothing therein
which would support a conclusion that respondent's Complaint is one for specific performance or
rescission of contract. It should be recalled that the principal obligation of petitioners under the
Remarkable Laundry Dealership Contract is to act as respondent's dealer outlet. Respondent, however,
neither asked the RTC to compel petitioners to perform such obligation as contemplated in said contract
nor sought the rescission thereof. The Complaint's body, heading, and relief are bereft of such allegation.
In fact, neither phrase appeared on or was used in the Complaint when, for purposes of clarity,
respondent's counsels, who are presumed to be learned in law, could and should have used any of those
phrases to indicate the proper designation of the Complaint. To the contrary, respondent's counsels
designated the Complaint as one for "Breach of Contract & Damages," which is a misnomer and
inaccurate. This erroneous notion was reiterated in respondent's Memorandum[30] wherein it was stated
that "the main action of CEB 39025 is one for a breach of contract."[31] There is no such thing as an "action
for breach of contract." Rather, "[b]reach of contract is a cause of action,[32] but not the action or relief
itself"[33] Breach of contract may be the cause of action in a complaint for specific performance or
rescission of contract, both of which are incapable of pecuniary estimation and, therefore, cognizable by
the RTC. However, as will be discussed below, breach of contract may also be the cause of action in a
complaint for damages.
A complaint primarily seeking to enforce the accessory obligation contained in the penal clause
is actually an action for damages capable of pecuniary estimation.
Neither can we sustain respondent's contention that its Complaint is incapable of pecuniary estimation
since it primarily seeks to enforce the penal clause contained in Article IV of the Remarkable Dealer Outlet
Contract, which reads:
Article IV: STANDARD REQUIRED QUOTA & PENALTIES
In consideration [sic] for such renewal of franchise-dealership rights, the dealer outlet must have a
minimum 200 kilos on a six-day or per week pick-up for the entire duration of the contract to FREE the
dealer outlet from being charge [sic] Php200/week on falling below required minimum kilos per week of
laundry materials. Automatic charging shall become part of the billing on the services of the dealer outlet
on cases where the minimum requirements on required kilos are not met.
The RL Main Operator has the option to cancel, terminate this dealership outlet contract, at its option
should [sic] in the event that there are unpaid services equivalent to a two-week minimum required
number of kilos of laundry materials but not P8,000 worth of collectibles, for services performed by the
RL Main Operator or its assigned Franchise Outlet, unpaid bills on ordered and delivered support
products, falling below required monthly minimum number of kilos.
Ten [percent] (10%) interest charge per month will be collected on all unpaid obligations but should not
be more than 45 days or an additional 10% on top of uncollected amount shall be imposed and shall earn
additional 10% on the next succeeding months if it still remains unpaid. However, if the cause of default
is due to issuance of a bouncing check the amount of such check shall earn same penalty charge with
additional 5% for the first two weeks and 10% for the next two weeks and its succeeding two weeks
thereafter from the date of dishonor until fully paid without prejudice to the filling of appropriate cases
before the courts of justice. Violation of this provision if remained unsettled for two months shall be
considered as violation [wherein] Article XV of this agreement shall be applied.[34]
To Our mind, petitioners' responsibility under the above penal clause involves the payment of liquidated
damages because under Article 2226[35] of the Civil Code the amount the parties stipulated to pay in case
of breach are liquidated damages. "It is attached to an obligation in order to ensure performance and has
a double function:(1) to provide for liquidated damages, and (2) to strengthen the coercive force of the
obligation by the threat of greater responsibility in the event of breach."[36]
Concomitantly, what respondent primarily seeks in its Complaint is to recover aforesaid liquidated
damages (which it termed as "incidental and consequential damages") premised on the alleged breach
of contract committed by the petitioners when they unilaterally ceased business operations. Breach of
contract may also be the cause of action in a complaint for damages filed pursuant to Article 1170 of the
Civil Code. It provides:
Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and
those who in any manner contravene the tenor thereof; are liable for damages. (Emphasis supplied)
In Pacmac, Inc. v. Intermediate Appellate Court,[37] this Court held that the party who unilaterally
terminated the exclusive distributorship contract without any legal justification can be held liable for
damages by reason of the breach committed pursuant to Article 1170.
In sum, after juxtaposing Article IV of the Remarkable Dealer Outlet Contract vis-à-vis the prayer sought
in respondent's Complaint, this Court is convinced that said Complaint is one for damages. True, breach
of contract may give rise to a complaint for specific performance or rescission of contract. In which case,
the subject matter is incapable of pecuniary estimation and, therefore, jurisdiction is lodged with the RTC.
However, breach of contract may also be the cause of action in a complaint for damages. Thus, it is not
correct to immediately conclude, as the CA erroneously did, that since the cause of action is breach of
contract, the case would only either be specific performance or rescission of contract because it may
happen, as in this case, that the complaint is one for damages.
In an action for damages, the court which has jurisdiction is determined by the total amount of
damages claimed.
Having thus determined the nature of respondent's principal action, the next question brought to fore is
whether it is the RTC which has jurisdiction over the subject matter of Civil Case No. CEB-39025.
Paragraph 8, Section 19[38] of BP 129, as amended by Republic Act No. 7691,[39] provides that where the
amount of the demand exceeds P100,000.00, exclusive of interest, damages of whatever kind, attorney's
fees, litigation expenses, and costs, exclusive jurisdiction is lodged with the RTC. Otherwise, jurisdiction
belongs to the Municipal Trial Court.[40]
The above jurisdictional amount had been increased to P200,000.00 on March 20, 1999 and further raised
to P300,000.00 on February 22, 2004 pursuant to Section 5 of RA 7691.[41]
Then in Administrative Circular No. 09-94[42] this Court declared that "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 other words, where the complaint primarily seeks to recover
damages, all claims for damages should be considered in determining which court has jurisdiction over
the subject matter of the case regardless of whether they arose from a single cause of action or several
causes of action.
Since the total amount of the damages claimed by the respondent in its Complaint filed with the RTC on
September 3, 2012 amounted only to P280,000.00, said court was correct in refusing to take cognizance
of the case.
WHEREFORE, the Petition is GRANTED and the December 11, 2013 Decision and March 19, 2014
Resolution of the Court of Appeals in CA-G.R. CEB SP No. 07711 are REVERSED and SET ASIDE. The
February 19, 2013 Order of the Regional Trial Court, Branch 17, Cebu City dismissing Civil Case No. CEB-
39025 for lack of jurisdiction is REINSTATED.
SO ORDERED.
FIRST DIVISION [ G.R. No. 189950*, April 24, 2017 ]
BERNADETTE S. BILAG, ERLINDA BILAG-SANTILLAN, DIXON BILAG, REYNALDO B. SUELLO, HEIRS
OF LOURDES S. BILAG, HEIRS OF LETICIA BILAG-HANAOKA, AND HEIRS OF NELLIE BILAG,
PETITIONERS, VS. ESTELA AY-AY, ANDRES ACOP, JR., FELICITAS AP-AP, SERGIO AP-AP, JOHN
NAPOLEON A. RAMIREZ, JR., AND MA. TERESA A. RAMIREZ, RESPONDENTS.
Assailed in this petition for review on certiorari[1] are the Decision[2] dated March 19, 2009 and the
Resolution[3] dated September 3, 2009 of the Court of Appeals (CA) in CA-G.R. CV No. 86266, which set
aside the Order[4] dated October 10, 2005 of the Regional Trial Court of Baguio City, Branch 61 (RTC Br.
61), and consequently, remanded the case to the latter court for trial.
The Facts
The instant case stemmed from a Complaint[5] dated August 12, 2004 for Quieting of Title with Prayer for
Preliminary Injunction filed by respondents Estela Ay-Ay, Andres Acop, Jr., Felicitas Ap-Ap, Sergio Ap-Ap,
John Napoleon A. Ramirez, Jr., and Ma. Teresa A. Ramirez (respondents) against petitioners Bernadette S.
Bilag, Erlinda Bilag-Santillan, Dixon Bilag, Reynaldo B. Suello, Heirs of Lourdes S. Bilag, Heirs of Leticia
Bilag-Hanaoka, and Heirs of Nellie Bilag before the RTC Br. 61, docketed as Civil Case No. 5881-R.
Essentially, respondents alleged that Iloc Bilag, petitioners' predecessor-in-interest, sold to them
separately various portions of a 159,496-square meter parcel of land designated by the Bureau of Lands
as Approved Plan No. 544367, Psu 189147 situated at Sitio Benin, Baguio City (subject lands), and that
they registered the corresponding Deeds of Sale[6] with the Register of Deeds of Baguio City. According
to respondents, Iloc Bilag not only acknowledged full payment and guaranteed that his heirs, successors-
in-interest, and executors are to be bound by such sales, but he also caused the subject lands to be
removed from the Ancestral Land Claims. Respondents further alleged that they have been in continuous
possession of the said lands since 1976 when they were delivered to them and that they have already
introduced various improvements thereon. Despite the foregoing, petitioners refused to honor the
foregoing sales by asserting their adverse rights on the subject lands. Worse, they continued to harass
respondents, and even threatened to demolish their improvements and dispossess them thereof. Hence,
they filed the instant complaint to quiet their respective titles over the subject lands and remove the cloud
cast upon their ownership as a result of petitioners' refusal to recognize the sales.[7]
For their part, petitioners filed a Motion to Dismiss[8] dated November 4, 2004 on the grounds of lack of
jurisdiction, prescription/laches/estoppel, and res judicata. Anent the first ground, petitioners averred that
the subject lands are untitled, unregistered, and form part of the Baguio Townsite Reservation which were
long classified as lands of the public domain. As such, the RTC has no jurisdiction over the case as it is the
Land Management Bureau (formerly the Bureau of Lands) which is vested with the authority to determine
issues of ownership over unregistered public lands.[9]
As to the second ground, petitioners argued that it is only now, or more than 27 years from the execution
of the Deeds of Sale, that respondents seek to enforce said Deeds; thus, the present action is already
barred by prescription and/or laches.[10]
Regarding the final ground, petitioners pointed out that on January 27, 1998, respondents had already
filed a complaint against them for injunction and damages, docketed as Civil Case No. 3934-R before the
Regional Trial Court of Baguio City, Branch 5 (RTC Br. 5), wherein they principally asserted their ownership
over the subject lands. However, RTC Br. 5 dismissed Civil Case No. 3934-R for lack of merit on the ground
of respondents' failure to show convincing proof of ownership over the same,[11] which Order of dismissal
was then affirmed by the CA on appeal.[12] Eventually, the Court issued a Resolution dated January 21,
2004[13] declaring the case closed and terminated for failure to file the intended petition subject of the
Motion for Extension to file the same. In view of the foregoing, petitioners contended that due to the final
and executory ruling in Civil Case No. 3934-R, the filing of Civil Case No. 5881-R seeking to establish the
ownership thereof is already barred by res judicata.[14]
The RTC Br. 61 Ruling
In an Order[15] dated October 10, 2005, the RTC Br. 61 ruled in petitioners' favor, and consequently,
ordered the dismissal of Civil Case No. 5881-R on the following grounds: (a) it had no authority to do so;
(b) the Deeds of Sale in respondents' favor could not as yet be considered title to the subject lands, noting
the failure of respondents to perfect their title or assert ownership and possession thereof for the past 27
years; and (c) the filing of the instant case is barred by res judicata considering the final and executory
Decision dismissing the earlier filed Civil Case No. 3934-R where respondents similarly sought to be
declared the owners of the subject lands.[16]
Aggrieved, respondents appealed to the CA.[17]
The CA Ruling
In a Decision[18] dated March 19, 2009, the CA set aside the dismissal of Civil Case No. 5881-R, and
accordingly, remanded the case to the court a quo for trial.[19] It held that Civil Case No. 3934-R was an
action for injunction where respondents sought to enjoin petitioners' alleged entry into the subject lands
and their introduction of improvements thereat; whereas Civil Case No. 5881-R is an action to quiet title
where respondents specifically prayed, inter alia, for the removal of the cloud upon their ownership and
possession of the subject lands. In this light, the CA concluded that while these cases may involve the
same properties, the nature of the action differs; hence, res judicata is not a bar to the present suit. On
the issue of laches, prescription or estoppel, the CA pointed out that in view of respondents' allegation
that they have been in possession of the subject lands since 1976, their action to quiet title is
imprescriptible.[20]
Dissatisfied, petitioners moved for reconsideration[21] which was, however, denied in a Resolution[22] dated
September 3, 2009; hence, this petition.
The Issue Before the Court
The issue for the Court's resolution is whether or not the CA correctly set aside the dismissal of Civil Case
No. 5881-R, and accordingly, remanded the case to the court a quo for trial.
The Court's Ruling
The petition is meritorious.
At the outset, it must be stressed that in setting aside the Order of dismissal of Civil Case No. 5881-R due
to the inapplicability of the grounds of res judicata and prescription/laches, the CA notably omitted from
its discussion the first ground relied upon by petitioners, which is lack of jurisdiction.
Jurisprudence has consistently held that "[j]urisdiction is defined as the power and authority of a court to
hear, try, and decide a case. 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. 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. Thus, when a court has no jurisdiction
over the subject matter, the only power it has is to dismiss the action."[23] Perforce, it is important that a
court or tribunal should first determine whether or not it has jurisdiction over the subject matter presented
before it, considering that any act that it performs without jurisdiction shall be null and void, and without
any binding legal effects. The Court's pronouncement in Tan v. Cinco,[24] is instructive on this matter, to
wit:
A judgment rendered by a court without jurisdiction is null and void and may be attacked anytime. It
creates no rights and produces no effect. It remains a basic fact in law that the choice of the proper
forum is crucial, as the decision of a court or tribunal without jurisdiction is a total nullity. A void
judgment for want of jurisdiction is no judgment at all. All acts performed pursuant to it and all claims
emanating from it have no legal effect.[25]
Now, on the issue of jurisdiction, a review of the records shows that the subject lands form part of a
159,496-square meter parcel of land designated by the Bureau of Lands as Approved Plan No. 544367,
Psu 189147 situated at Sitio Benin, Baguio City. Notably, such parcel of land forms part of the Baguio
Townsite Reservation, a portion of which, or 146, 428 square meters, was awarded to Iloc Bilag due to the
reopening of Civil Reservation Case No. 1, GLRO Record No. 211, as evidenced by a Decision [26] dated
April 22, 1968 promulgated by the then-Court of First Instance of Baguio City.
In a catena of cases,[27] and more importantly, in Presidential Decree No. (PD) 1271,[28] it was expressly
declared that all orders and decisions issued by the Court of First Instance of Baguio and Benguet in
connection with the proceedings for the reopening of Civil Reservation Case No. 1, GLRO Record 211,
covering lands within the Baguio Townsite Reservation are null and void and without force and effect.
While PD 1271 provides for a means to validate ownership over lands forming part of the Baguio Townsite
Reservation, it requires, among others, that a Certificate of Title be issued on such lands on or before July
31, 1973.[29] In this case, records reveal that the subject lands are unregistered and untitled, as petitioners'
assertion to that effect was not seriously disputed by respondents. Clearly, the award of lots 2 and 3 of
the 159,496-square meter parcel of land designated by the Bureau of Lands as Approved Plan No. 544367,
Psu 189147 – which includes the subject lands – to Iloc Bilag by virtue of the reopening of Civil Reservation
Case No. 1, GLRO Record 211, is covered by the blanket nullification provided under PD 1271, and
consistently affirmed by the prevailing case law. In view of the foregoing, it is only reasonable to conclude
that the subject lands should be properly classified as lands of the public domain as well.
Therefore, since the subject lands are untitled and unregistered public lands, then petitioners correctly
argued that it is the Director of Lands who has the authority to award their ownership. [30] Thus, the RTC
Br. 61 correctly recognized its lack of power or authority to hear and resolve respondents' action for
quieting of title.[31] In Heirs of Pocdo v. Avila,[32] the Court ruled that the trial court therein correctly
dismissed an action to quiet title on the ground of lack of jurisdiction for lack of authority to determine
who among the parties have better right over the disputed property, which is admittedly still part of public
domain for being within the Baguio Townsite Reservation, viz.:
The DENR Decision was affirmed by the Office of the President which held that lands within the Baguio
Townsite Reservation belong to the public domain and are no longer registrable under the Land
Registration Act. The Office of the President ordered the disposition of the disputed property in
accordance with the applicable rules of procedure for the disposition of alienable public lands within the
Baguio Townsite Reservation, particularly Chapter X of Commonwealth Act No. 141 on Townsite
Reservations and other applicable rules.
Having established that the disputed property is public land, the trial court was therefore correct
in dismissing the complaint to quiet title for lack of jurisdiction. The trial court had no jurisdiction
to determine who among the parties have better right over the disputed property which is
admittedly still part of the public domain. As held in Dajunos v. Tandayag:
x x x The Tarucs' action was for "quieting of title" and necessitated determination of the respective rights
of the litigants, both claimants to a free patent title, over a piece of property, admittedly public land. The
law, as relied upon by jurisprudence, lodges "the power of executive control, administration, disposition
and alienation of public lands with the Director of Lands subject, of course, to the control of the Secretary
of Agriculture and Natural Resources."
In sum, the decision rendered in civil case 1218 on October 28, 1968 is a patent nullity. The court below
did not have power to determine who (the Firmalos or the Tarucs) were entitled to an award of
free patent title over that piece of property that yet belonged to the public domain. Neither did it
have power to adjudge the Tarucs as entitled to the "true equitable ownership" thereof, the latter's effect
being the same: the exclusion of the Firmalos in favor of the Tarucs.
In an action for quieting of title, the complainant is seeking for "an adjudication that a claim of title or
interest in property adverse to the claimant is invalid, to free him from the danger of hostile claim, and to
remove a cloud upon or quiet title to land where stale or unenforceable claims or demands exist." Under
Articles 476 and 477 of the Civil Code, the two indispensable requisites in an action to quiet title are: (1)
that the plaintiff has a legal or equitable title to or interest in the real property subject of the action; and
(2) that there is a cloud on his title by reason of any instrument, record, deed, claim, encumbrance or
proceeding, which must be shown to be in fact invalid or inoperative despite its prima facie appearance
of validity.
In this case, petitioners, claiming to be owners of the disputed property, allege that respondents are
unlawfully claiming the disputed property by using void documents, namely the "Catulagan" and the
Deed of Waiver of Rights. However, the records reveal that petitioners do not have legal or equitable
title over the disputed property, which forms part of Lot 43, a public land within the Baguio
Townsite Reservation. It is clear from the facts of the case that petitioners' predecessors-in-
interest, the heirs of Pocdo Pool, were not even granted a Certificate of Ancestral Land Claim over
Lot 43, which remains public land. Thus, the trial court had no other recourse but to dismiss the
case.[33] (Emphases and underscoring supplied)
In conclusion, RTC Br. 61 has no jurisdiction over Civil Case No. 5881-R as the plaintiffs therein (herein
respondents) seek to quiet title over lands which belong to the public domain. Necessarily, Civil Case No.
5881-R must be dismissed on this ground. It should be stressed that the court a quo's lack of subject
matter jurisdiction over the case renders it without authority and necessarily obviates the resolution of
the merits of the case. To reiterate, when a court has no jurisdiction over the subject matter, the only
power it has is to dismiss the action, as any act it performs without jurisdiction is null and void, and without
any binding legal effects. In this light, the Court finds no further need to discuss the other grounds relied
upon by petitioners in this case.
WHEREFORE, the petition is GRANTED. The Decision dated March 19, 2009 and the Resolution dated
September 3, 2009 of the Court of Appeals in CA-G.R. CV No. 86266 are hereby REVERSED and SET
ASIDE. Accordingly, Civil Case No. 5881-R is DISMISSED on the ground of lack of jurisdiction on the part
of the Regional Trial Court of Baguio City, Branch 61.
SO ORDERED.
[ G.R. No. 201614, January 12, 2016 ]
SHERYL M. MENDEZ, PETITIONER, VS. SHARI'A DISTRICT COURT, 5th SHARI'A DISTRICT, COTABATO
CITY, RASAD G. BALINDONG (ACTING PRESIDING JUDGE); 1st SHARI'A CIRCUIT COURT, 5th SHARI'A
DISTRICT, COTABATO CITY, MONTANO K. KALIMPO (PRESIDING JUDGE); AND DR. JOHN O.
MALIGA, RESPONDENTS.
Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing
the March 30, 2012 Decision[1] of the Shari'a District Court, 5th Shari'a District, Cotabato City
(ShDQ, in ShDC Appealed Case No. 2011-19. The assailed decision affirmed the August 19, 2011
Order[2] of the 1st Shari'a Circuit Court, Cotabato City (ShCC), in ShCC Civil Case No. 2010-559,
confirming the talaq[3] (divorce) between petitioner Sheryl M. Mendez (Mendez) and private
respondent Dr. John O. Maliga (Maliga); awarding the custody of their minor child to Maliga;
and ordering him to give a mut'a (consolatory gift) to Mendez.
The Facts
From the records, it appears that on April 9, 2008, Mendez and Maliga were married under
Muslim rites. Prior to their marriage, the couple was already blessed with a daughter, Princess
Fatima M. Maliga (Princess Fatima). Their marriage, however, soured shortly after their wedding.
On November 2, 2010, Maliga filed with the ShCC a petition[4] for the judicial confirmation of
talaq from Mendez, with a prayer for the grant of probational custody of their minor child
pending the resolution of the case. According to Maliga, Mendez was a Roman Catholic and
she only embraced the Islamic faith on the date of their marriage. Shortly after being married,
he claimed that he started to doubt the sincerity of his wife's submission to Islam, having noticed
no changes in her moral attitude and social lifestyle despite his guidance. Maliga added that
despite his pleas for her to remain faithful to the ways of Islam, she remained defiant. He alleged
that sometime in December 2008, Mendez reverted to Christianity. Maliga went on to add that
she went to Manila a few days after their wedding and brought Princess Fatima with her without
his knowledge and consent. In Manila, she taught their daughter how to practice Christianity by
enrolling her in a Catholic school. Maliga, thus, prayed for probational custody considering the
unsafe religious growth and values repugnant to Islam.
Before Mendez could file her answer, Maliga filed his urgent motion [5] reiterating his plea to be
awarded temporary custody of Princess Fatima. He claimed that considering such factors as
moral values, social upliftment, behavioral growth, and religious consideration, he should have
custody of their child.
On November 12, 2010, the ShCC issued the order[6] granting Maliga's urgent motion. The ShCC
deemed it proper for Princess Fatima to stay with her father because of his social, financial and
religious standing, and considering that she was then under his custody; that he raised her as a
good Muslim daughter as evidenced by her appearance; and that her parents were married
under Islamic rites.
On November 18, 2010, Mendez filed her Answer.[7] She alleged that she followed the religion of
her Muslim grandfather, and denied Maliga's allegations that she was not sincere in her practice
of Islam. She averred that she became pregnant before she married Maliga and had been
raising their daughter on her own since her birth and that he had been totally remiss in his
material and moral obligations to support her and their child. She opposed his prayer for
custody, arguing that she had been raising Princess Fatima since she was born; that Maliga had
several wives and three other children and was very busy with his profession as a physician; and
that the custody of children below seven years old should belong to the mother.
Mendez added that on October 21, 2010, she left their daughter in Maliga's custody for a visit,
with the understanding that he would bring her back the following day. On October 22, 2010,
she went with her cousin to fetch her daughter but Maliga threatened to kill them and displayed
his bodyguards clad in police uniforms and firearms. This prompted her to file a complaint-
affidavit for kidnapping and failure to return a minor with the National Bureau of Investigation.[8]
On November 22, 2010, Mendez filed her opposition[9] to Maliga's urgent motion for issuance of
temporary custody. She argued that the motion did not contain the requisite notice of hearing
and was, therefore, a mere scrap of paper. She pointed out that the motion was filed on
October 9, 2010, prior to the filing of the main case on November 2, 2010. She contended that
she never received the summons in connection with the urgent motion and, furthermore, she
never received a copy of the November 12, 2010 Order granting temporary custody to Maliga,
which she had only picked up from the court herself on November 18, 2010, the day she filed
her answer.
In its Order,[10] dated December 3, 2010, the ShCC partially reconsidered its initial order awarding
temporary custody to Maliga by granting the right of visitation to Mendez, as follows:
WHEREFORE, in the light of the foregoing, PRINCESS FATIMA, daughter of the herein parties is
hereby ordered be placed under the CARE and CUSTODY of the Petitioner, DR. JOHN O.
MALIGA, pending the resolution of the above-entitled case, effective immediately, WITH THE
RIGHT OF VISITATION BY THE RESPONDENT, SHERYL M. MENDEZ TO HER DAUGHTER PRINCESS
FATIMA M. MALIGA, ANY REASONABLE TIME OF THE DAY AND NIGHT, AND/OR BORROW HER
(PRINCESS FATIMA M. MALIGA) PROVIDED THAT IT MUST BE ONLY WITHIN THE VICINITY OF
COTABATO CITY AND THEREAFTER, RETURN HER TO THE PETITIONER, DR. JOHN O. MALIGA, UPON
PROPER COORDINATION AND ARRANGEMENT FROM THE ABOVE-NAMED PETITIONER OR HIS
DULY AUTHORIZED REPRESENTATIVE.
SO ORDERED.[11]
Mendez filed a motion for reconsideration of the December 3, 2010 order, arguing that the
question of custody was within the exclusive original jurisdiction of the ShDC, and not the ShCC,
and praying that the said order be declared null and void.[12]
On January 19, 2011, the ShCC constituted an Agama Arbitration Council[13] which, after its own
hearing and meeting, submitted the case for hearing on the merits because the parties failed
to arrive at an amicable settlement and because "the [d]ivorce was moot and academic." [14]
The Ruling of the Shari 'a Circuit Court
On August 19, 2011, the ShCC issued the order[15] confirming the talaq pronounced by Maliga
against Mendez and awarded to him the care and custody of Princess Fatima. In the same
order, the ShCC granted visitation rights to Mendez and ordered Maliga to give her a mut 'a
(consolatory gift) in the amount of P24,000.00. Thus:
WHEREFORE, in the light of the foregoing, it is hereby ORDERED, that:
1. The pronounced Talaq (Divorce) by herein Petitioner DR. JOHN O. MALIGA against
respondent SHERYL M. MENDEZ is hereby CONFIRMED and considering that the Iddah
(cooling-off/waiting period) had long been lapsed, she may now be allowed to use
her former maiden name in all personal and official transactions;
2. The care and custody of the PARTIES' minor daughter PRINCESS FATIMA shall remain
with Petitioner DR. JOHN O. MALIGA with a right of visitation by respondent SHERYL M.
MENDEZ any reasonable time of the day and night and/or borrow her and thereafter,
return her (PRINCESS FATIMA) to petitioner DR. JOHN O. MALIGA, provided it is only
within the vicinity of Cotabato City and provided further that there should be a proper
coordination with the above-named Petitioner, and the petitioner is hereby ordered
to observe such rights of visitation and/or borrow of by the respondent SHERYL M.
MENDEZ; and
3. Petitioner DR. JOHN O. MALIGA is hereby ordered upon receipt hereof, to give
consolatory gift (mut'a) to respondent SHERYL M. MENDEZ in the amount of TWENTY
FOUR THOUSAND PESOS (Php. 24,000.00) as provided by law as contained in the
petitioner's prayer which amounts of money must be coursed/consigned to this Court.
Let the copy of this Order be furnished to the Office of the Shari'a Circuit Registrar of this Court
for record and registration purposes, and/or ANNOTATION of the PARTIES' marriage contract as
DIVORCED.
SO ORDERED.[16]
In its ruling, the ShCC noted that Mendez never questioned the validity of the talaq and found
that it was caused by the irreconcilable religious differences between the spouses as to the
upbringing of their daughter. For said reason, it ruled that, in the best interest of the child in all
aspects of life - economic, social and religious, the care and custody of Princess Fatima should
remain with Maliga.[17]
The Ruling of the Shari 'a District Court
Mendez appealed the ShCC order to the ShDC only with respect to the ruling on custody. In her
memorandum[18] before the ShDC, Mendez argued that the order of the ShCC was null and void
for its failure to state the facts and law on which its findings were based in accordance with
Section 1, Rule 36 of the Rules of Court. She reiterated that the urgent motion filed by Maliga did
not contain the requisite notice of hearing, and that the mother had the right of custody if the
child was under seven years of age. She asserted that the question of custody was within the
exclusive original jurisdiction of the ShDC only, and that an order of a court not vested with
jurisdiction was null and void.[19]
On March 30, 2012, the ShDC issued the assailed decision,[20] affirming the August 19, 2011 Order
of the ShCC. Giving credence to Maliga's allegation that Mendez had reverted to Christianity,
the ShDC ruled that in Shari'a Law, a mother might be legally disentitled to the custody of her
child if she turned apostate, and disqualified until she returned to the Islamic faith; and that the
father, as a Muslim, was in a better position to take care of the child's well-being and raise her
as a Muslim. Affirming the ShCC ruling, the ShDC found that Princess Fatima should remain with
her father for her best interest in all aspects of life, economically, socially and religiously.
Hence, this petition where Mendez argues the following:
ASSIGNMENT OF ERRORS
A. THE HONORABLE PRESIDING JUDGE OF 1st SHARI'A CIRCUIT, COTABATO CITY, 5th SHARIA
[DISTRICT], MONTANO K. KALIMPO, GRAVELY AND SERIOUSLY ERRED IN DECIDING IN
FAVOR OF THE PETITIONER-APPELLEE IN SHCC CIVIL CASE NO. 2010-559, DR. JOHN O.
MALIGA FOR CARE AND CUSTODY [OF] MINOR CHILD AGAINST HEREIN RESPONDENT-
APPELLANT AS THE HONORABLE JUDGE, GRAVELY ABUSES HIS AUTHORITY AMOUNTED TO
LACK OF JURISDICTION OVER THE CASE.
B. WERE THE ORDER OF THE HONORABLE PRESIDING JUDGE MONTANO K. KALIMPO OF 1st
SHARI'A CIRCUIT COURT, COTABATO CITY DATED NOVEMBER 12, 2010 AND DECEMBER
03, 2010 AWARDED THE CARE AND CUSTODY IN FAVOR OF PETITIONER-APPELLEE SHCC
CIVIL CASE NO. 2010-559 FOR BEING UNREASONABLE, IN VIOLATION OF RULE 15,
SECTIONS 4, 5, 6 REVISED RULES OF CIVIL PROCEDURE 1997, ARTICLE 143, PAR. 1, SECTION
a OF THE P.D. 1083, ARTICLE 78, P.D. 1083 AS WELL AS JURISDICTION.
C. WERE THE DECISION OF THE HONORABLE SHARI'A DISTRICT COURT, 5th SHARI'A DISTRICT
COTABATO CITY, PROMULGATED ON MARCH 30, 2011, AFFIRMED ASSAILED ORDER
DATED AUGUST 19, 2011 OF THE SHARI'A CIRCUIT COTABATO CITY, FOR BEING
UNREASONABLE.[21]
Mendez argues that the ShCC acted in excess of jurisdiction when it ruled on Maliga's urgent
motion for issuance of temporary custody, considering that the motion was a mere scrap of
paper for lack of notice of hearing. She reiterates that she never received any summons in
connection with the urgent motion. She never received a copy of the ShCC order granting the
said motion either.[22]
Mendez goes on to contend that the ShCC had no jurisdiction to hear, try and decide the issue
of Princess Fatima's custody, considering that under Article 143(1)(a) of Presidential Decree
(P.D.) No. 1083,[23] it is the ShDC which has the exclusive original jurisdiction over all cases
involving custody. She argues the rule that any decision rendered without jurisdiction is a total
nullity and may be struck down at any time, even on appeal.[24]
Finally, she asserts that she should have been awarded custody under Article 78 of P.D. No.
1083,. as Princess Fatima was not above seven years old at the time the ShCC order was
promulgated. As to Maliga's claim that she was disqualified to have custody over Princess
Fatima for becoming apostate to the Islamic faith, Mendez argues that while the same may be
a ground for disinheritance under the Muslim Law, the same law does not provide that being
apostate is a ground to be denied of the care and custody of her minor child.[25] Besides, she
professes that she is still a Muslim.
In the July 9, 2012 Resolution,[26] the Court initially denied the subject petition for various
procedural defects.
On November 12, 2012, acting on the motion for reconsideration filed by Mendez, the Court
reinstated the petition.[27] Thereafter, Maliga and Mendez filed their respective pleadings.
In his Comment,[28] dated January 17, 2013, Maliga countered that a mother may be deprived
of the custody of her child below seven years of age for compelling reasons. He alleged that
Mendez was unemployed and was financially dependent on him for all the needs of Princess
Fatima since her conception. He reiterated that a Muslim mother may be legally disentitled to
the custody of her minor child if she turned apostate and should remain disqualified until she
return to the Islamic faith. Maliga noted that although the Family Code would now apply to
Mendez, who was no longer a Muslim, the application of the Family Code would defeat the
purpose of the Muslim law on disqualification to inheritance by virtue of apostasy. Finally, he
claimed that he was fit and qualified to have custody of his child as he was a prominent medical
practitioner with resources to meet all her needs. He pointed out that, under his care, Princess
Fatima's academic performance dramatically improved from the lowest ranking to the top six
in her 3rd grade class.
In her Reply,[29] dated April 26, 2013, Mendez countered that Maliga only filed his petition for
talaq when he discovered that she had filed a complaint-affidavit against him for kidnapping
and failure to return a minor;[30] that he had been totally remiss in his material and moral
obligations to his daughter;[31] that he was unfit to take care of Princess Fatima as his numerous
wives had been confusing the child;[32] and that she was not unemployed as she was a
registered nurse who could provide for all the needs of her child and who, in fact, had cared for
her from birth until she was six (6) years old and sent her to an exclusive school, all without the
assistance of Maliga.[33]
ISSUES
As can be gleaned from the pleadings, the issues at hand are the following:
1. Whether or not the ShCC erred in acting on Maliga's urgent motion for issuance of
temporary custody;
2. Whether or not the ShCC and the ShDC had jurisdiction to rule on the issue of custody;
and
3. Whether or not custody was properly granted to Maliga.
Opinion of Amicus Curiae
On March 11, 2014, the Court appointed Secretary-CEO Mehol K. Sadain (Secretary Sadain) of
the National Commission on Muslim Filipinos (NCMF) and Dr. Hamid A. Barra of the King Faisal
Center for Islamic, Arabic and Asian Studies, as amid curiae, and directed them to submit their
respective opinions on the matter of jurisdiction with respect to the issue of custody,[34] in view of
the fact that the exclusive original jurisdiction over divorce and custody pertains to two separate
courts, namely, the ShCC and the ShDC, respectively.
In compliance, Secretary Sadain submitted his opinion,[35] calling on the Court to apply the
darurah-oriented principle of liberal construction in order to promote the objective of securing
a just, speedy and inexpensive disposition of every action and proceeding, in accordance with
the Rules of Court, which applies to P.D. No. 1083 in a suppletory manner. He explained that
Islamic law subscribes to the same objective of dispensing speedy and equitable justice, as well
as its own darurah-orientsd liberal construction for the sake of promoting equitable or weighty
public interests. He elucidated that under the doctrine of darurah (necessity), prohibited actions
may be allowed or restrictive rules may be relaxed if such would serve a greater and more
primordial interest, such as the preservation of life and property, or the higher pursuit of justice.
He cited as an example the prohibition on the eating of pork by a Muslim which could be
temporarily set aside if he was faced with the choice of starving to death or eating pork to
survive. Another example given was the allowance of the internal use of alcohol-based
products if ingested in the form of life-preserving medicine.
In consonance with the above principles, Secretary Sadain was of the view that strict procedural
requirements could be relaxed if such would result in a speedy, fair and beneficial disposition of
a pending legal question. He noted that determining the custody of a child was an ancillary
matter, which unavoidably would arise in divorce proceedings, and would usually involve
delving into matters of child welfare and interest, as well as the fitness of the person/s seeking
custody. He noted that the speedy resolution of divorce and custody proceedings had an effect
on the general welfare of the child and was in the child's best interest. He cited that the Islamic
legal jurisdiction in Pakistan had ruled that, in guardianship proceedings, the Court exercised
parental jurisdiction, and technicalities of pleadings or strict formalities need not be enforced
because the State took charge of the rights of the child to safeguard their welfare by deciding
the question of custody as expeditiously as possible.
Secretary Sadain, thus, opined that the rule on jurisdiction under P.D. No. 1083 may be relaxed
considering that the issue of custody arose as an ancillary matter in the divorce proceedings,
which must be addressed in the same court in order to protect the welfare, rights and interest
of the child as expeditiously as possible. He also pointed out that allowing the ShCC to decide
on the matter of custody would avoid multiplicity of suits and delay in the judicial proceedings.
Lastly, he noted that because the ShDC had passed judgment on the case appealed from the
ShCC, the need for a separate case had been moot and the jurisdictional and procedural
defects had been cured.
Dr. Hamid Barra, despite repeated requests, did not submit an opinion.[36]
The Ruling of the Court
Appellate Jurisdiction of the Court in Shari 'a Cases
At the outset, the Court notes that this petition has been correctly instituted with this Court. It has
been recognized that decades after the 1989 enactment of the law [37] creating the Shari'a
Appellate Court and after the Court authorized its creation in 1999,[38] it has yet to be organized.
Pending the organization of the Shari'a Appellate Court, appeals or petitions from final orders or
decisions of the ShDC shall be filed with the Court of Appeals (CA) and referred to a Special
Division to be organized in any of the CA stations preferably to be composed of Muslim CA
Justices. For cases where only errors or questions of law are raised or involved, the appeal shall
be to this Court via a petition for review on certiorari under Rule 45 of the Rules of Court pursuant
to Article VIII, Section 5 of the Constitution and Section 2 of Rule 41 of the Rules.[39] As the present
petition involves only questions of law, it has been properly filed before this Court.
Jurisdiction of Shari 'a Courts
Jurisdiction is the power and authority of a court to hear, try and decide a case.[40] In order for
the court to have authority to dispose of a case on the merits, it must acquire jurisdiction over
the subject matter and the parties.[41] The Congress has the power to define, prescribe and
apportion the jurisdiction of various courts,[42] and courts are without authority to act where
jurisdiction has not been conferred by law.[43] Jurisdiction is conferred only by the Constitution or
the law. It cannot be acquired through a waiver or enlarged by the omission of the parties or
conferred by the acquiescence of the court, and may be raised at any stage of the
proceedings, even for the first time on appeal.[44]
The law which confers jurisdiction on the Shari'a courts is P.D. No. 1083. The pertinent articles of
the law as to the original jurisdiction of the Shari'a courts are as follows:
Art. 143. Original jurisdiction. —
(1) The Shari'a District Court shall have exclusive original jurisdiction over:
(a) All cases involving custody, guardianship, legitimacy, paternity and filiation arising under
this Code;
(b) All cases involving disposition, distribution and settlement of the estate of deceased
Muslims, probate of wills, issuance of letters of administration or appointment of
administrators or executors regardless of the nature or the aggregate value of the
property;
(c) Petitions for the declaration of absence and death and for the cancellation or correction
of entries in the Muslim Registries mentioned in Title VI of Book Two of this Code;
(d) All actions arising from customary contracts in which the parties are Muslims, if they have
not specified which law shall govern their relations; and
(e) All petitions for mandamus, prohibition, injunction, certiorari, habeas corpus, and all other
auxiliary writs and processes in aid of its appellate jurisdiction.
(2) Concurrently with existing civil courts, the Shari'a District Court shall have original jurisdiction
over:
(a) Petitions by Muslims for the constitution of a family home, change of name and
commitment of an insane person to an asylum;
(b) All other personal and real actions not mentioned in paragraph 1 (d) wherein the parties
involved are Muslims except those for forcible entry and unlawful detainer, which shall
fall under the exclusive original jurisdiction of the Municipal Circuit Court; and
(c) All special civil actions for interpleader or declaratory relief wherein the parties are
Muslims or the property involved belongs exclusively to Muslims.
xxxx
Art. 155. Jurisdiction. — The Shari'a Circuit Courts shall have exclusive original jurisdiction over:
(1) All cases involving offenses defined and punished under this Code.
(2) All civil actions and proceedings between parties who are Muslims or have been married in
accordance with Article 13 involving disputes relating to:
(a) Marriage;
(b) Divorce recognized under this Code;
 (c) Betrothal or breach of contract to marry;
(d) Customary dower (mahr);
(e) Disposition and distribution of property upon divorce;
(f) Maintenance and support, and consolatory gifts, (mut'a); and
(g) Restitution of marital rights.
(3) All cases involving disputes relative to communal properties.
[Emphases and Underscoring Supplied]
It is clear that the ShCC has exclusive original jurisdiction over civil actions between parties who
have been married in accordance with the Muslim law, involving disputes relating to divorce
under P.D. No. 1083. There is, therefore, no doubt that the ShCC had jurisdiction to confirm the
talaq between Mendez and Maliga.
Jurisdiction in Custody Case
Article 143 above, however, clearly provides that the ShDC has exclusive original jurisdiction
over all cases involving custody under P.D. No. 1083. Exclusive jurisdiction is the power of the
court to take cognizance of and decide certain cases to the exclusion of any other courts.[45]
Original jurisdiction is the power of the court to take judicial cognizance of a case instituted for
judicial action for the first time under conditions provided by law.
On the other hand, appellate jurisdiction is the authority of a court higher in rank to re-examine
the final order of judgment of a lower court which tried the case now elevated for judicial
review.[46] Since the two jurisdictions are exclusive of each other, each must be expressly
conferred by law. One does not flow from, nor is inferred from the other.[47]
Implication of Article 54
As opined by Secretary Sadain,[48] the ShCC does seem to have ancillary jurisdiction over
custody issues as they relate to a divorce decree. Under Article 155, it is provided that the SHCC
shall have exclusive original jurisdiction over all civil actions and proceedings involving disputes
relating to divorce. To quote once more:
Article 155. Jurisdiction. The Shari'a Circuit Court shall have exclusive original jurisdiction over
(1) All cases involving offenses defined and punished under this Code.
(2) All civil actions and proceedings between parties who are Muslims or have been married in
accordance with Article 13 involving disputes relating to:
(a) xxx.
(b) Divorce recognized under this Code,
xxxx
Clearly, the provision above clothes the ShCC with power to hear and decide civil actions
relating to a talaq or divorce. It cannot be denied that the issue of custody is a necessary
consequence of a divorce proceeding. As Article 54 of P.D. No. 1083 provides:
Article 54. Effects of irrevocable talaq or faskh. A talaq or faskh, as soon as it becomes
irrevocable, shall have the following effects:
(a) The marriage bond shall be severed and the spouses may contract another marriage in
accordance with this Code;
(b)The spouses shall lose their mutual rights of inheritance;
(c) The custody of children shall be determined in accordance with Article 78 of this Code;
(d) The wife shall be entitled to recover from the jusband her whole dower in case the talaq
has been effected after the consummation of the marriage, or one-half thereof if
effected before its consummation;
(e) The husband shall not be discharged from his obligation to give support in accordance
with Article 67; and
(f) The conjugal partnership, if stipulated in the marriage settlements, shall be dissolved and
liquidated.
Though Article 54 does not directly confer jurisdiction to the ShCC to rule on the issue of custody,
the Court, nevertheless grants the ShCC ancillary jurisdiction to resolve issues related to divorce.
The above-quoted provision states categorically that as a consequent effect of divorce, the
custody of children shall be determined in accordance with Article 78 of the Code. In turn,
Article 78 states that the care and custody of children below seven whose parents are divorced
shall belong to the mother, and the minor above seven but below the age of puberty may
choose the parent with whom he/she wants to stay.[49]
To rule that the ShCC is without jurisdiction to resolve issues on custody after it had decided on
the issue of divorce, simply because it appears to contravene Article 143 of P.D. No. 1083, would
be antithetical to the doctrine of ancillary jurisdiction. "While a court may be expressly granted
the incidental powers necessary to effectuate its jurisdiction, a grant of jurisdiction, in the
absence of prohibitive legislation, implies the necessary and usual incidental powers essential
to effectuate it, and, subject to existing laws and constitutional provisions, every regularly
constituted court has power to do all things that are reasonably necessary for the administration
of justice within the scope of its jurisdiction and for the enforcement of its judgments and
mandates. Hence, demands, matters or questions ancillary or incidental to, or growing out of,
the main action, and coming within the above principles, may be taken cognizance of by the
court and determined, since such jurisdiction is in aid of its authority over the principal matter,
even though the court may thus be called on to consider and decide matters which, as original
causes of action, would not be within its cognizance."[50]
Following the doctrine, the ShCC, in cases involving divorce, possesses the power to resolve the
issue of custody, it being a related issue to the main cause of action.
At this juncture, the question must be asked: By recognizing the power of the ShCC to rule on
the issue of custody, would this effectively render Article 143 of P.D. No. 1083 meaningless,
considering that the same is unequivocal in providing that the ShDC has the exclusive original
jurisdiction to decide on all cases involving custody?
The Court rules in the negative.
A distinction must be made between a case for divorce wherein the issue of custody is an
ancillary issue and a case where custody is the main issue. Jurisdiction in the former, as discussed
above, lies with the ShCC, as the main cause of action is divorce. The latter on the other hand,
where the main cause of action is one of custody, the same must be filed with the ShDC,
pursuant to Article 143 of P.D. No. 1083.
Violation of Due Process; No Notice of Hearing; and Absence of Hearing
Notwithstanding the foregoing, the award of custody to Maliga by the ShCC was void as it was
rendered in violation of the constitutional right of Mendez to due process.
Mendez pointed out that Maliga's urgent motion for issuance of temporary custody was filed on
October 9, 2010, even before the main petition for talaq was filed on November 2, 2010, and
that she never received a summons pertaining to the urgent motion. Indeed, a review of the
records reveals that the date of filing was handwritten on the said motion as "October 9, 2010."
The motion itself and the registry receipt attached thereto, however, were dated "November 9,
2010." The Court is, thus, of the view that the month "October" was mistakenly written by the
receiving clerk instead of "November," and that the motion was filed subsequent to the main
petition for talaq as an ancillary matter.
The Court, nonetheless, agrees with Mendez that the urgent motion lacked the requisite notice
of hearing. It is immediately evident from the face of the motion that it did not contain the notice
of hearing required by the Rules of Court which has suppletory application to the present case.
Section 4 of Rule 15 provides that every written motion shall be set for hearing by the applicant.
Every written motion is required to be heard and the notice of hearing shall be served in such
manner as to insure its receipt by the other party at least three (3) days before the date of
hearing, unless the court for good cause sets the hearing on shorter notice.[51] The notice of
hearing is intended to prevent surprise and to afford the adverse party a chance to be heard
before the motion is resolved by the court. A seasonable service of a copy of the motion on the
adverse party with a notice of hearing indicating the time and place of hearing is a mandatory
requirement that cannot be dispensed with as this is the minimum requirement of procedural
due process.[52]
A motion that does not contain a notice of hearing is a mere scrap of paper and presents no
question which merits the attention and consideration of the court. It is not even a motion for it
does not comply with the rules, and, hence, even the clerk has no right to receive it. [53]
Award of Custody; No Basis
Not only was the award of custody violative of the constitutional right of Mendez to due process,
but also both the orders of the ShCC and the ShDC awarding custody of Princess Fatima to
Maliga were without evidentiary basis because no hearing was actually conducted prior to the
issuance of the order granting the urgent motion. Moreover, there was no explanation given as
to why the motion was resolved without notice to, or the participation of, Mendez.
In awarding custody to Maliga, the ShCC merely wrote:
On the issue of CARE AND CUSTODY of the PARTIES' minor daughter PRINCESS FATIMA, this Court
after closely scrutinizing the evidence on hand, deemed it just and proper and/or is convinced
that it should be under status quo, remains (sic) with Petitioner DR. JOHN O. MALIGA, for her
(PRINCESS FATIMA) best interest in all aspects of life, economically, socially and religiously etc
WITHOUT prejudice of the rights of visitation of respondent SHERYL M. MENDEZ any reasonable
time of the day and right (sic), and borrow her (PRINCESS FATIMA) provided that it is only within
the vicinity of Cotabato City and thereafter, return her, with proper coordination with Petitioner
DR. JOHN O. MALIGA, and the latter (DR. JOHN O. MALIGA) is hereby ordered to observe such
rights afforded to respondent SHERYL M. MENDEZ.[54]
Although the ShCC stated that, in deciding on the custody case, it scrutinized the evidence on
hand, it was remiss in its duty to state the precise factual and legal basis on which its ruling
awarding custody to Maliga was based. Section 14, Article VIII of the 1987 Constitution
mandates that decisions must clearly and distinctly state the facts and the law on which they
are based. The decisions of courts must be able to address the issues raised by the parties
through the presentation of a comprehensive analysis or account of factual and legal findings
of the court.[55] It is evident that the ShCC failed to comply with these requirements. It merely
stated that it was in Princess Fatima's "best interest in all aspects of life, economically, socially
and religiously" that custody be awarded to her father. There was no express finding that
Mendez was unfit in any way, or a hint of an explanation as to why Maliga was in a better
position to take custody of Princess Fatima.
The ShDC, on the other hand, in affirming the findings of the ShCC, stated that Mendez was
disentitled to custody because she had turned apostate, and held that she would remain
disqualified until she return to the Islamic faith in accordance with the Muslim Law. It appears,
however, that disqualification due to apostasy under the Muslim Code pertains to disinheritance
under Article 93 of the Muslim Code,[56] and not to the custody of children.
WHEREFORE, the petition is PARTIALLY GRANTED. The following are declared NULL and VOID:
1. the November 12, 2010 and December 3, 2010 Orders of the Shari'a Circuit Court in
ShCC Civil Case No. 2010-559, insofar as the ruling on custody and visitation is
concerned;
2. the August 19, 2011 Order of the Shari'a Circuit Court in ShCC Civil Case No. 2010-559,
insofar as the ruling on custody is concerned; and
3. the March 30, 2012 Decision of the Shari'a District Court in SDC Appealed Case No.
2011-19, insofar as the ruling on custody is concerned.
In the August 19, 2011 Order of the Shari'a Circuit Court in ShCC Civil Case No. 2010-559,
confirming the pronouncement of Talaq (Divorce) by petitioner Dr. John O. Maliga against
respondent Sheryl M. Mendez and the giving of consolatory gift (mut'a) to her in the amount of
P24,000.00 is maintained.
The records of the case are hereby ordered REMANDED to the Shari'a Circuit Court for
appropriate proceedings on the motion of Dr. John O. Maliga for the determination of custody
of Princess Fatima M. Maliga.
SO ORDERED.
 [ G.R. No. 192270, January 26, 2015 ]
IRENE D. OFILADA, PETITIONER, VS. SPOUSES RUBEN ANDAL AND MIRAFLOR
ANDAL, RESPONDENTS.
This Petition for Review on Certiorari[1] assails the July 13, 2009 Decision[2] of the Court of
Appeals (CA) in CA-G.R. CV[3] No. 101603 which: (1) granted the Petition for Review[4] filed
therein; (2) reversed and set aside the August 28, 2007 Decision[5] of the Regional Trial
Court (RTC), Lucena City, Branch 56 in SPEC. CIV. ACTION 2007-01-A, affirming in toto the
February 27, 2007 Decision[6] of the Municipal Trial Court (MTC) of San Antonio, Quezon in
Civil Case No. 188 which, in turn, ordered the ejectment of respondents spouses Ruben
Andal and Miraflor Andal (spouses Andal) from the properties of petitioner Irene Ofilada
(Irene); and, (3) declared the said MTC Decision null and void for lack of jurisdiction.
Also questioned in this Petition is the CA’s May 6, 2010 Resolution[7] denying Irene’s Motion
for Reconsideration of the assailed CA Decision.
Factual Antecedents
Irene, together with her husband Carlos Ofilada (Carlos), bought from the heirs of Teresita
Liwag (Teresita) a 27,974-square meter parcel of land principally planted with rambutan, a
number of coconut trees and other fruit-bearing plants located in Barrio Puri, Tiaong,
Quezon. The sale is evidenced by a February 13, 1997 Extra-Judicial Settlement of Estate
with Absolute Sale[8] wherein respondent Miraflor Andal (Miraflor), who brokered the sale of
the property, signed as ‘tenant.’ Apparently, ten days prior to the sale, Miraflor appeared
before Anastacio Lajara (Anastacio), the then Barangay Agrarian Reform Council (BARC)
Chairman of Barangay Puri, San Antonio, and executed a Pagpapatunay[9] stating that:
Sa kinauukulan:
Ito ay pagpapatunay na si Miraflor Andal ay kusang[-]loob na dumulog sa aking
tanggapan upang ipagbigay[-]alam na ang lupa na pag-aari ni TERESITA LIWAG x x x
ay walang “tenant” o magtatrabaho at hiniling niya na ang nasabing lupa ay mapalipat
sa pangalan ng mga bumili na walang iba kundi sina Carlos at Irene Ofilada.
Pinagtitibay nya na wala na siyang paghahabol na ano man laban sa may-ari o kahalili
nito sa karapatan sapagkat siya ay tumanggap na ng kaukulang halaga hinggil sa naging
pagtatrabaho niya sa nasabing lupa at gayon din ang kanyang mga magulang.
SA KATUNAYAN NG LAHAT NG ITO ay ako ay nagbibigay ng pahintulot na ang nasabing
lupa ay mapagbili na at mapatala sa bagong may-ari na ligtas sa ano mang
pananagutan.[10]
Two weeks after the sale or on February 27, 1997, Miraflor, with the consent of her
husband, respondent Ruben Andal (Ruben), executed a Sinumpaang Salaysay[11]
wherein she acknowledged Irene and Carlos as the new owners of the property. While it
was stated therein that she will continue to take care of the property, she nevertheless
waived any tenancy rights that she and her husband might have over the land, viz.:
1. NA AKO ang [n]agtatrabaho o “tenant” sa lupang pag-aari ni TERESITA LIWAG at
ang nasabing lupa ay matatagpuan sa Brgy. Puri, San Antonio, Quezon x x x
2. NA AKO ay kusang loob na nag-alok sa tagapagmana ng may-ari ng lupa na
pinangatawanan ni Ginoong JOSE LIWAG na ipagbili na ang nasabing lupa sa
mag-asawang CARLOS OFILADA at IRENE OFILADA sapagkat magpapatuloy
naman ang aking pangangalaga sa nasabing lupa;
3. NA AKO at ang aking asawa ay kusang loob na sumang[-]ayon na ang Titulo ng
[na]sabing lupa ay mapalipat sa mga bumili at simula sa araw na ito ay
matahimik kong isinusulit ang pamomosesyon sa mga bagong may-ari;
4. NA kami ay kusang[-]loob na tumatalikod na sa karapatan ko bilang “tenant” na
kahit kailan [ay] hindi na maghahabol laban sa dating may-ari o sa kaniyang mga
tagapagmana sapagkat wala silang ano mang pananagutan sa amin at
gayon[din] ang bagong may-ari na mag-asawang CARLOS OFILADA at IRENE
OFILADA;[12]
Eventually, the land was registered in the names of Irene and Carlos.[13]
Eight years later or in October 2005, Irene filed against the spouses Andal a Complaint[14]
for Ejectment and Damages before the MTC of San Antonio, Quezon. She averred that aside
from the aforementioned property, she and Carlos also acquired an 8,640-square meter
ricefield located in Pulo, San Antonio, Quezon. For humanitarian reasons, she acceded to
the spouses Andal’s request to take care of her two parcels of land, provided that they would
not be considered as tenants. To stress the fact that neither she nor the spouses Andal
intended that the latter be deemed as tenants, Irene pointed to the following: (1) the
condition for her purchase of the property in Tiaong that the same should not have any
tenants; and (2) Miraflor’s execution of a Sinumpaang Salaysay wherein she waived any
tenancy rights that she and her husband might have over the said property.
In their Answer,[15] the spouses Andal denied Irene’s allegations and claimed that they were
tenants of Irene’s predecessor-in-interest and continued to be such despite the transfer of
ownership of the properties to Irene. They likewise contended that since the suit is an action
to dispossess them as tenants, it is not the MTC which has jurisdiction over the complaint
but the Department of Agrarian Reform Adjudication Board (DARAB).
Rejecting the tenancy claim, Irene averred in her Memorandum[16] that her real properties
are not covered by agrarian reform laws as they are within the retention limit allowed by
law. She again stressed that the spouses Andal had already voluntarily surrendered their
rights as tenants way back in 1997 as evidenced by the Pagpapatunay and the Sinumpaang
Salaysay. She added the said spouses voluntarily waived their rights and received P1.1
million as commission for brokering the sale of the Tiaong property to her. This was after
Irene made clear that the sale would not materialize and, consequently spouses Andal would
not get the commission, if the property has tenants. Irene averred that the spouses Andal’s
receipt of the said amount of money, being advantageous to them, is a valid ground for
termination of tenancy relations.
Ruling of the Municipal Trial Court
Prior to the preliminary conference, the MTC heard the respective sides of the parties for a
preliminary determination of the existence of tenancy.
The spouses Andal, in support of their claim that the controversy should be resolved by the
DARAB because of the issue of tenancy, submitted the following evidence to prove their
status as Irene’s tenants: (1) their December 19, 2005 Affidavit[17] attesting that: a) they
agreed to act as agents for the sale of the lands on the condition that they would remain as
tenants; b) they personally cultivated Irene’s lands and; c) they have been receiving 1/4
shares of the proceeds of the sales of the coconut, rambutan, and harvested palay; (2) the
December 19, 2005 Affidavit[18] of Anastacio corroborating the spouses Andal’s statements
in their affidavit of even date; (3) a receipt[19] dated July 27, 2005 showing that Irene
received from the spouses Andal P9,694.00 as her share in the harvest equivalent to 30
sacks of palay and; 4) a February 27, 1997 Affidavit of Landholding[20] executed by Irene
and Carlos, the second paragraph of which provides:
2. That we hereby testify that said parcel of land containing an area of 27,974 Square
Meters is the only parcel of agricultural land registered in our names; and we hereby
agree that the same tenant Miraflor Andal, will continue as a tenant, over the
said parcel of land. (Emphasis supplied)
On the other hand, Irene insisted that the spouses Andal are not tenants but mere
caretakers of her lands. She disputed the documentary evidence of the said spouses as
follows: (1) it is the Pagpapatunay issued by Anastacio in 1997 and furnished the Registry
of Deeds of Lucena City and Department of Agrarian Reform (DAR) which must be
considered as more credible evidence over his apparently fabricated affidavit executed at a
later time (2005); (2) the share in the produce of the lands as reflected in the receipt was
the only share given to her by the spouses Andal throughout the eight years that they took
care of her properties; and, (3) the copy of the Affidavit of Landholding presented by the
spouses Andal contained in the second paragraph thereof an insertion made through a
manual typewriter. Irene claimed that the said insertion which reads “and we [Irene and
Carlos] hereby agree, that the same tenant Miraflor Andal, will continue as a tenant, over
the said parcel of land,” was made without her knowledge and consent. In fact, her copy[21]
of the said document does not contain such inserted portion.
In its August 14, 2006 Order,[22] the MTC found no prima facie showing of tenancy relations
between the parties and proceeded with the case.
On February 27, 2007, the MTC rendered its Decision[23] holding that spouses Andal failed
to adduce proof that they are tenants. It gave weight to the Pagpapatunay issued by
Anastacio in 1997 as against the affidavit he executed in 2005 which it found ambivalent as
to whether spouses Andal are working as tenants on the lands of Irene. The MTC did not
also accord any evidentiary weight to the copy of the Affidavit of Landholding presented by
spouses Andal because of the doubtful insertion. Hence, it concluded that the spouses Andal
were in possession of the properties by mere tolerance of Irene. It ultimately ruled:
WHEREFORE, on the basis of the foregoing findings, the Court hereby renders judgment
in favor of the plaintiff and against the defendants, ordering:
a) Defendants and all other persons living in said premises without permission of the
plaintiff, to vacate and restore to the plaintiff the peaceful possession and
occupation of the landholdings in question;
b) Defendants to pay the plaintiff the amount of P30,000.00 as attorney’s and
appearance fees[;]
c) Defendants to pay the plaintiff the amount of P80,000.00 as actual damages.
SO ORDERED.[24]
Ruling of the Regional Trial Court
Resolving the appeal of the spouses Andal, the RTC in its August 28, 2007
Decision[25] affirmed in toto the MTC ruling. The motion for reconsideration thereto was also
denied in the RTC Resolution[26] dated November 22, 2007.
Ruling of the Court of Appeals
The CA, on the other hand, took a different view of the case. In its assailed Decision[27] of
July 13, 2009, the CA ratiocinated that since the existence of tenancy relations between the
previous owners of the properties and the spouses Andal is undisputed, the question of
whether the said spouses may be dispossessed therefrom constitutes an agrarian dispute
despite the severance of such relations. This is considering that severance of the tenurial
arrangement does not render the action beyond the ambit of an agrarian dispute and, hence,
jurisdiction over the same remains with the DARAB. In support of its conclusion, the CA
cited the cases of Rivera v. David[28] and Spouses Amurao v. Spouses Villalobos.[29]
The dispositive portion of the CA Decision reads:
WHEREFORE, the instant petition for review is GRANTED. The assailed Decision of the
Regional Trial Court of Lucena City, Branch 56, in Special Civil Case No. 2007-01-A, is
hereby REVERSED and SET ASIDE. The Decision dated 27 February 2007 of the Municipal
Trial Court of San Antonio, Quezon in Civil Case No. 188, is declared NULL and VOID for
lack of jurisdiction.
SO ORDERED.[30]
Irene filed a Motion for Reconsideration,[31] which was denied in the CA Resolution[32] dated
May 6, 2010.
Hence, this Petition.
The Issue
Forcible entry and unlawful detainer cases fall under the exclusive original jurisdiction of the
metropolitan trial courts, municipal trial courts, and the municipal circuit trial courts.[33] On
the other hand, the DAR is vested with primary jurisdiction to determine and adjudicate
agrarian reform matters and has exclusive original jurisdiction over all matters involving the
implementation of agrarian reform.[34] As DAR’s adjudicating arm,[35] it is the DARAB that
has exclusive and original jurisdiction involving all agrarian disputes. Republic Act (RA) No.
6657, Section 3(d) defines an ‘agrarian dispute’ as follows:
(d) Agrarian Dispute refers to any controversy relating to tenurial arrangements,
whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture,
including disputes concerning farmworkers’ associations or representation of persons in
negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of
such tenurial arrangements.
It includes any controversy relating to compensation of lands acquired under this Act and
other terms and conditions of transfer of ownership from landowners to farmworkers,
tenants and other agrarian reform beneficiaries, whether the disputants stand in the
proximate relation of farm operator and beneficiary, landowner and tenant, or lessor and
lessee.
The term also “refers to any controversy relating to, among others, tenancy over lands
devoted to agriculture.”[36]
Significantly, Rule II of the 2009 DARAB Rules of Procedure reads:
SECTION 1. Primary and Exclusive Original and Appellate Jurisdiction. – The Board shall
have primary and exclusive jurisdiction, both original and appellate, to determine and
adjudicate all agrarian disputes involving the implementation of the Comprehensive
Agrarian Reform Program (CARP) under R.A. No. 6657, as amended by R.A. No. 9700, E.O.
Nos. 228, 229, and 129-A, R.A. No. 3844 as amended by R.A. No. 6389, Presidential Decree
No. 27 and other agrarian laws and their Implementing Rules and Regulations. Specifically,
such jurisdiction shall include but not be limited to cases involving the following:
a. The rights and obligations of persons, whether natural or juridical, engaged in the
management, cultivation, and use of all agricultural lands covered by R.A. No.
 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL), as
amended, and other related agrarian laws; x x x
xxxx
d. Those cases involving the ejectment and dispossession of tenants and/or
leaseholders;
With the above points on jurisdictions having been laid, the Court now resolves the crucial
issue in the case of whether tenancy relationship between Irene and the spouses Andal
exists as to strip off the MTC of its jurisdiction over Irene’s suit for unlawful detainer.
Our Ruling
We grant the Petition.
The factual circumstances in Rivera and Amurao clearly make out cases involving agrarian
dispute.
As the CA relied on Rivera and Amurao, it is wise to revisit the factual milieu of the said
cases.
In its assailed Decision, the CA quoted the following pronouncement which was restated[37]
in Rivera, viz:
Even if the tenurial arrangement has been severed, the action still involves an incident
arising from the landlord and tenant relationship. Where the case involves the dispossession
by a former landlord of a former tenant of the land claimed to have been given as
compensation in consideration of the renunciation of the tenurial rights, there clearly exists
an agrarian dispute. On this point the Court has already ruled:
Indeed, Section 21 of Republic Act No. 1199, provides that ‘all cases involving the
dispossession of a tenant by the landlord or by a third party and/or the settlement and
disposition of disputes arising from the relationship of landlord and tenant … shall be under
the original and exclusive jurisdiction of the Court of Agrarian Relations.’ This jurisdiction
does not require the continuance of the relationship of landlord and tenant – at the time
of the dispute. The same may have arisen, and oftentimes arises, precisely from the
previous termination of such relationship. If the same existed immediately, or shortly,
before the controversy and the subject matter thereof is whether or not said relationship
has been lawfully terminated, or if the dispute otherwise springs or originates from the
relationship of landlord and tenant, the litigation is (then) cognizable only by the Court of
Agrarian Relations…[38]
In the said case, Agustin Rivera (Agustin) was in possession of a 1.8-hectare portion of the
5-hectare lot owned in common by the heirs of Cristino and Consolacion David, and these
heirs demanded that he vacate the premises. Thus, Agustin filed a Complaint to Maintain
Peaceful Possession before the Provincial Agrarian Reform Adjudication Board (PARAB). He
averred that his possession of the property was, originally, as registered tenant of the said
heirs’ predecessor-in-interest, Cristino, as evidenced by the certification issued by the
Municipal Agrarian Reform Office (MARO). Subsequently in 1957, he became the lot owner
because the spouses Cristino and Consolacion David gave him the 1.8-hectare land as his
‘disturbance compensation,’ in exchange for the renunciation of his tenurial rights. On the
other hand, Nemesio David (Nemesio), one of the heirs, argued that the DAR has no
jurisdiction over the case as the same only involves the issue of ownership of the land.
The DAR (thru the PARAB and the DARAB) assumed jurisdiction over the case and went on
to render judgments in favor of Agustin. The CA, however, ruled that the DAR no longer had
any jurisdiction on the ground that the alleged tenancy, per Agustin’s own admission, had
already ended in 1957. Thus, it set aside the respective decisions of the PARAB and the
DARAB. The Court, though, did not agree with the CA on the issue of jurisdiction. Although
it denied Agustin’s appeal because he was not able to sufficiently prove his ownership of the
land, DAR’s jurisdiction over the case was nevertheless upheld. And it was at that point that
the above-quoted pronouncement was restated.
Indeed in Rivera, the severance of the tenancy relations when the suit was filed did not
matter because the prior agricultural tenancy served as the juridical tie which compelled the
characterization of the controversy as an agrarian dispute. This is due to the fact that the
land from which Agustin was being dispossessed was claimed to have been owned by him
by way of disturbance compensation given to him as a former tenant by his former landlord.
On the other hand, in Amurao, the spouses Amurao bought in 1987 from a certain Ruperto
Endozo a parcel of land which was then tenanted by the spouses Villalobos. The spouses
Amurao allowed the spouses Villalobos to continue working on the land until such time that
their need for the same arises. In 1994, the therein parties executed a Kasulatan in which
the spouses Villalobos promised to surrender the possession of the lot should the spouses
Amurao need it, while the latter, in return, bound themselves to give the spouses Villalobos
a 1,000-sqm. portion of the land. But because the spouses Villalobos reneged on their
promise in accordance with the Kasulatan, the spouses Amurao filed an ejectment case
against them before the Municipal Circuit Trial Court (MCTC). On the defense that the issue
concerns an agrarian dispute, the spouses Villalobos questioned the trial court’s jurisdiction.
Both the MCTC and the RTC upheld their jurisdiction over the case but the CA ruled
otherwise.
Before this Court, the spouses Amurao argued that the tenancy relationship between them
and the spouses Villalobos was terminated upon the execution of the Kasulatan. Hence,
there can be no agrarian dispute between them over which the DAR can take cognizance
of. The Court held:
The instant case undeniably involves a controversy involving tenurial arrangements because
the Kasulatan will definitely modify, nay terminate the same. Even assuming that the
tenancy relationship between the parties had ceased due to the Kasulatan, there still exists
an agrarian dispute because the action involves an incident arising from the landlord and
tenant relationship.
xxxx
In the case at bar, petitioners’ claim that the tenancy relationship has been terminated by
the Kasulatan is of no moment. As long as the subject matter of the dispute is the legality
of the termination of the relationship, or if the dispute originates from such relationship, the
case is cognizable by the DAR, through the DARAB. The severance of the tenurial
arrangement will not render the action beyond the ambit of an agrarian dispute.[39]
To restate, what brought Rivera under the ambit of an agrarian dispute is the fact that the
land from which Agustin was being dispossessed of by the heirs of his former landlord is
claimed to have been given to him by the said former landlord as consideration for the
renunciation of his tenurial rights. While in Amurao, it was the issue of whether the
Kasulatan entered into by the parties terminated the landlord-tenant relationship between
them. Clearly, as the action in both cases involved an incident arising from landlord-tenant
relationship, the severance or alleged severance of such relationship did not take them
beyond the ambit of an agrarian dispute and, consequently, it is DAR which has jurisdiction
over the said cases.
Rivera and Amurao are not on all fours with the present case.
Here, Irene claims that there can be no agrarian dispute since there exists no landlord-
tenant relationship between her and the spouses Andal. If ever such a relationship existed,
it was between the former owner of the properties and the spouses Andal and the same had
already been renounced by Miraflor prior to Irene’s acquisition of the properties. The CA,
however, ruled that even if the landlord-tenant relationship between the previous owner
and the spouses Andal had already ceased, the action to dispossess the latter from the
subject properties still involves an agrarian dispute, as held in Rivera and Amurao.
Suffice it to say, however, that the present case is not on all fours with Rivera and Amurao.
As already discussed, in Rivera, the land involved is claimed to have been given to the
former tenant by the former landlord by way of disturbance compensation. Hence, even if
the landlord-tenant relationship was asserted to have been severed as early as 1957, the
Court considered the action as arising from an agrarian dispute, the rightful possession of
the land being an incident of such previous landlord-tenant relationship. In the present case,
there is no claim that the subject properties were given to the spouses Andal by their former
landlord as a form of disturbance compensation. While the spouses Andal in this case refuse
to surrender the properties to Irene on the ground that they are tenants of the same just
like in Amurao, it cannot be gainsaid that in Amurao, the tenancy relations between the
former owners of the property involved therein and the spouses Villalobos, had,
undisputedly, been continued by and between the said spouses and the spouses Amurao
when the latter acquired the property. And it was on that supposition that the Court held
that even if the Kasulatan executed by the spouses Amurao and the spouses Villalobos
terminated the tenancy relationship between them, the action of the former to dispossess
the latter from the property tenanted involved an agrarian dispute. However, in this case,
unlike in Amurao the severance of the tenancy relations between the former owners of the
properties and the spouses Andal, as well as the non-existence of a similar relationship
between the said spouses and Irene as the new owner, were sufficiently shown as will be
discussed below. Hence, the said pronouncement made in Amurao finds no application in
this case.
The tenancy relationship between the former owners of the properties and the spouses
Andal was clearly severed prior to Irene’s purchase of the same; no such relationship was
subsequently created between Irene and the spouses Andal.
Certainly telling are the Pagpapatunay and the Sinumpaang Salaysay which were voluntarily
executed and never impugned by the spouses Andal. Both contain express declarations that
at the time Irene and her husband bought the property, the tenancy then existing between
the heirs of Teresita as former owners and the spouses Andal as tenants had already ceased,
and that no tenancy relations would continue between the latter and the new owner, Irene.
Notably, the Sinumpaang Salaysay, being a public document, is evidence of the facts in the
clear unequivocal manner therein expressed and has in its favor the presumption of
regularity.[40] The spouses Andal are bound by their admissions against their own interest.
Indeed, while a tenancy relationship cannot be extinguished by the sale, alienation, or
transfer of the legal possession of the landholding,[41] the same may nevertheless be
terminated due to circumstances more advantageous to the tenant and his/her family.[42]
Here, records show that Miraflor, who brokered the sale between the heirs of Teresita and
Irene, voluntarily executed, days prior to the Extrajudicial Settlement of Estate with
Absolute Sale, her Pagpapatunay before the BARC Chairman stating that she and her
parents have already received a ‘sufficient consideration’ for her to release her former
landlord and the purchaser of the lot from liability. As later disclosed by Irene during trial,
such ‘sufficient consideration’ amounted to P1.1 million by way of disturbance
compensation, a factual allegation which was again never refuted by the spouses Andal
before the lower court and was found to be an uncontroverted fact by the CA. To the Court,
the said amount is adequate enough for the spouses Andal to relinquish their rights as
tenants. In fine, it can be reasonably concluded that the tenancy relationship between the
previous owners and the spouses Andal had already been severed.
The next question now is whether a new tenancy relationship between Irene and the spouses
Andal was subsequently formed. This becomes crucial because for the DARAB to have
jurisdiction over the case, there must be a tenancy relationship between the parties.[43]
Evidence is necessary to prove the allegation of tenancy. “The principal factor in determining
whether a tenancy relationship exists is intent. Tenancy is not a purely factual relationship
dependent on what the alleged tenant does upon the land. It is also a legal relationship.”[44]
An allegation of tenancy before the MTC does not automatically deprive the court of its
jurisdiction. Basic is the rule that:
x x x the material averments in the complaint determine the jurisdiction of a court. x x x a
court does not lose jurisdiction over an ejectment suit by the simple expedient of a party
raising as a defense therein the alleged existence of a tenancy relationship between the
parties. The court continues to have the authority to hear and evaluate the evidence,
precisely to determine whether or not it has jurisdiction, and, if, after hearing, tenancy is
shown to exist, it shall dismiss the case for lack of jurisdiction.[45]
The Court agrees with the conclusion of both the MTC and the RTC that for dearth of
evidence, tenurial relationship between the parties was not sufficiently shown. Thus, the
said courts correctly assumed jurisdiction over the ejectment case.
The fact alone of working on another’s landholding does not raise a presumption of the
existence of agricultural tenancy. For tenancy to be proven, all indispensable elements must
be established, the absence of one or more requisites will not make the alleged tenant a de
facto one. These are: 1) the parties are the landowner and the tenant; 2) the subject is
agricultural land; 3) there is consent by the landowner; 4) the purpose is agricultural
production; 5) there is personal cultivation; and 6) there is sharing of the harvests.[46]
The Pagpapatunay and the Sinumpaang Salaysay both support Irene’s claim that she
purchased the landholdings only on the condition that there will be no tenants. Her refusal
to give her consent to any tenancy relationship is glaring. On the other hand, the spouses
Andal, in their attempt to prove tenancy, submitted their copy of the February 27, 1997
Affidavit of Landholding, which contains an inserted statement that Irene and Carlos agree
“that the same tenant Miraflor Andal, will continue as tenant, over the said parcel of land.”
However, serious doubt is cast on the authenticity of said inserted statement considering
that it does not bear the respective initials/signatures of Carlos and Irene attesting their
conformity thereto. More importantly, Irene’s copy of the said document does not contain
the same insertion.
Anent the proof of sharing of harvest, what the spouses Andal merely presented was a single
receipt dated July 27, 2005 representing Irene’s ‘share’ in the harvest. This even militates
against the spouses Andal’s claim of tenancy considering that they did not present the
receipts for the alleged sharing system prior to 2005 or from 1997, the year when Irene
purchased the land. Notably, the receipt they submitted is dated July 27, 2005 or just a few
months before the filing of the complaint. To the Court’s mind, such act of the spouses Andal
to give Irene a share is a mere afterthought, the same having been done during the time
that Irene was already making serious demands for them to account for the produce of the
lands and vacate the properties. Be that as it may, the Court stresses “that it is not unusual
for a landowner to receive the produce of the land from a caretaker who sows thereon. The
fact of receipt, without an agreed system of sharing, does not ipso facto create a
tenancy.”[47]
In sum, the Court holds that absent any tenurial relationship between them, the spouses
Andal’s possession of Irene’s properties was by mere tolerance of the latter. The action to
dispossess the spouses Andal therefrom is therefore a clear case of summary action for
ejectment cognizable by the regular courts.
WHEREFORE, the Petition is GRANTED. The July 13, 2009 Decision and May 6, 2010
Resolution of the Court of Appeals in CA-G.R. CV No. 101603 are REVERSED and SET
ASIDE. The August 28, 2007 Decision of the Regional Trial Court, Lucena City, Branch 56
in SPEC CIV. ACTION 2007-01-A affirming in toto the February 27, 2007 Decision of the
Municipal Trial Court of San Antonio, Quezon in Civil Case No. 188, is REINSTATED and
AFFIRMED.
SO ORDERED.
FIRST DIVISION
[ G.R. No. 209830, June 17, 2015 ]
MITSUBISHI MOTORS PHILIPPINES CORPORATION, PETITIONER, VS. BUREAU OF
CUSTOMS, RESPONDENT.
Assailed in this petition for review on certiorari[1] are the Resolutions dated June 7, 2013[2]
and November 4, 2013[3] of the Court of Appeals (CA) in CA-G.R. CV No. 99594, which
referred the records of the instant case to the Court of Tax Appeals (CTA) for proper
disposition of the appeal taken by respondent Bureau of Customs (respondent).
The Facts
The instant case arose from a collection suit[4] for unpaid taxes and customs duties in the
aggregate amount of P46,844,385.00 filed by respondent against petitioner Mitsubishi
Motors Philippines Corporation (petitioner) before the Regional Trial Court of Manila, Branch
17 (RTC), docketed as Civil Case No. 02-103763 (collection case).
Respondent alleged that from 1997 to 1998, petitioner was able to secure tax credit
certificates (TCCs) from various transportation companies; after which, it made several
importations and utilized said TCCs for the payment of various customs duties and taxes in
the aggregate amount of P46,844,385.00.[5] Believing the authenticity of the TCCs,
respondent allowed petitioner to use the same for the settlement of such customs duties
and taxes. However, a post-audit investigation of the Department of Finance revealed that
the TCCs were fraudulently secured with the use of fake commercial and bank documents,
and thus, respondent deemed that petitioner never settled its taxes and customs duties
pertaining to the aforesaid importations.[6] Thereafter, respondent demanded that petitioner
pay its unsettled tax and customs duties, but to no avail. Hence, it was constrained to file
the instant complaint.[7]
In its defense,[8] petitioner maintained, inter alia, that it acquired the TCCs from their
original holders in good faith and that they were authentic, and thus, their remittance to
respondent should be considered as proper settlement of the taxes and customs duties it
incurred in connection with the aforementioned importations.[9]
Initially, the RTC dismissed[10] the collection case due to the continuous absences of
respondent’s counsel during trial.[11] On appeal to the CA,[12] and eventually the Court,[13]
the said case was reinstated and trial on the merits continued before the RTC.[14]
After respondent’s presentation of evidence, petitioner filed a Demurrer to Plaintiff’s
Evidence[15] on February 10, 2012, essentially contending that respondent failed to prove
by clear and convincing evidence that the TCCs were fraudulently procured,[16] and thus,
prayed for the dismissal of the complaint.[17] In turn, respondent filed an Opposition[18] dated
March 7, 2012 refuting petitioner’s contentions.
The RTC Ruling
In an Order[19] dated April 10, 2012, the RTC granted petitioner’s Demurrer to Plaintiff’s
Evidence, and accordingly, dismissed respondent’s collection case on the ground of
insufficiency of evidence.[20] It found that respondent had not shown any proof or substantial
evidence of fraud or conspiracy on the part of petitioner in the procurement of the TCCs.[21]
In this connection, the RTC opined that fraud is never presumed and must be established
by clear and convincing evidence, which petitioner failed to do, thus, necessitating the
dismissal of the complaint.[22]
Respondent moved for reconsideration,[23] which was, however, denied in an Order[24] dated
August 3, 2012. Dissatisfied, it appealed[25] to the CA.
The CA Ruling
In a Resolution[26] dated June 7, 2013, the CA referred the records of the collection case to
the CTA for proper disposition of the appeal taken by respondent. While the CA admitted
that it had no jurisdiction to take cognizance of respondent’s appeal, as jurisdiction is
properly lodged with the CTA, it nevertheless opted to relax procedural rules in not
dismissing the appeal outright.[27] Instead, the CA deemed it appropriate to simply refer the
matter to the CTA, considering that the government stands to lose the amount of
P46,844,385.00 in taxes and customs duties which can then be used for various public
works and projects.[28]
Aggrieved, petitioner filed a motion for reconsideration[29] on June 23, 2013, arguing that
since the CA does not have jurisdiction over respondent’s appeal, it cannot perform any
action on it except to order its dismissal.[30] The said motion was, however, denied in a
Resolution[31] dated November 4, 2013, hence, this petition.
The Issue Before the Court
The core issue for the Court’s resolution is whether or not the CA correctly referred the
 records of the collection case to the CTA for proper disposition of the appeal taken by
respondent.
The Court’s Ruling
The petition is meritorious.
Jurisdiction is defined as the power and authority of a court to hear, try, and decide a
case.[32] 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.[33]
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.[34] Thus, when a court has no jurisdiction over the subject matter, the
only power it has is to dismiss the action.[35]
Guided by the foregoing considerations and as will be explained hereunder, the Court finds
that the CA erred in referring the records of the collection case to the CTA for proper
disposition of the appeal taken by respondent.
Section 7 of Republic Act No. (RA) 1125,[36] as amended by RA 9282,[37] reads:
Sec. 7. Jurisdiction. – The CTA shall exercise:
xxxx
c. Jurisdiction over tax collection cases as herein provided:
xxxx
2. Exclusive appellate jurisdiction in tax collection cases:
a. Over appeals from the judgments, resolutions or orders of the Regional Trial Courts in
tax collection cases originally decided by them in their respective territorial jurisdiction.
xxxx
Similarly, Section 3, Rule 4 of the Revised Rules of the Court of Tax Appeals, as amended,[38]
states:
Sec. 3. Cases within the jurisdiction of the Court in Divisions. – The Court in Divisions shall
exercise:
xxxx
c. Exclusive jurisdiction over tax collections cases, to wit:
xxxx
2. Appellate jurisdiction over appeals from the judgments, resolutions or orders of the
Regional Trial Courts in tax collection cases originally decided by them within their
respective territorial jurisdiction.
Verily, the foregoing provisions explicitly provide that the CTA has exclusive appellate
jurisdiction over tax collection cases originally decided by the RTC.
In the instant case, the CA has no jurisdiction over respondent’s appeal; hence, it cannot
perform any action on the same except to order its dismissal pursuant to Section 2, Rule
50[39] of the Rules of Court. Therefore, the act of the CA in referring respondent’s wrongful
appeal before it to the CTA under the guise of furthering the interests of substantial justice
is blatantly erroneous, and thus, stands to be corrected. In Anderson v. Ho,[40] the Court
held that the invocation of substantial justice is not a magic wand that would readily dispel
the application of procedural rules,[41] viz.:
x x x procedural rules are designed to facilitate the adjudication of cases. Courts and litigants
alike are enjoined to abide strictly by the rules. While in certain instances, we allow a
relaxation in the application of the rules, we never intend to forge a weapon for
erring litigants to violate the rules with impunity. The liberal interpretation and
application of rules apply only in proper cases of demonstrable merit and under
justifiable causes and circumstances. While it is true that litigation is not a game
of technicalities, it is equally true that every case must be prosecuted in
accordance with the prescribed procedure to ensure an orderly and speedy
administration of justice. Party litigants and their counsels are well advised to abide by
rather than flaunt, procedural rules for these rules illumine the path of the law and
rationalize the pursuit of justice. [42] (Emphasis and underscoring supplied)
Finally, in view of respondent’s availment of a wrong mode of appeal via notice of appeal
stating that it was elevating the case to the CA – instead of appealing by way of a petition
for review to the CTA within thirty (30) days from receipt of a copy of the RTC’s August 3,
2012 Order, as required by Section 11 of RA 1125, as amended by Section 9 of RA 9282[43]
– the Court is constrained to deem the RTC’s dismissal of respondent’s collection case
against petitioner final and executory. It is settled that the perfection of an appeal in the
manner and within the period set by law is not only mandatory, but jurisdictional as well,
and that failure to perfect an appeal within the period fixed by law renders the judgment
appealed from final and executory.[44] The Court’s pronouncement in Team Pacific
Corporation v. Daza[45] is instructive on this matter, to wit:[46]
Although appeal is an essential part of our judicial process, it has been held, time and again,
that the right thereto is not a natural right or a part of due process but is merely a statutory
privilege. Thus, the perfection of an appeal in the manner and within the period prescribed
by law is not only mandatory but also jurisdictional and failure of a party to conform to the
rules regarding appeal will render the judgment final and executory. Once a decision attains
finality, it becomes the law of the case irrespective of whether the decision is erroneous or
not and no court — not even the Supreme Court — has the power to revise, review, change
or alter the same. The basic rule of finality of judgment is grounded on the fundamental
principle of public policy and sound practice that, at the risk of occasional error, the
judgment of courts and the award of quasi-judicial agencies must become final at some
definite date fixed by law.
WHEREFORE, the petition is GRANTED. Accordingly, the Resolutions dated June 7, 2013
and November 4, 2013 of the Court of Appeals (CA) in CA-G.R. CV No. 99594 are hereby
REVERSED and SET ASIDE. Accordingly, a new one is entered DISMISSING the appeal
of respondent Bureau of Customs to the Court of Appeals.
SO ORDERED.