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JURISDICTION:

1. Sante v. Claravall (February 22,


2010)
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 173915
2010

February 22,

IRENE SANTE AND REYNALDO


SANTE, Petitioners,
vs.
HON. EDILBERTO T. CLARAVALL, in
his capacity as Presiding Judge of
Branch 60, Regional Trial Court of
Baguio City, and VITA N.
KALASHIAN, Respondents.
DECISION
VILLARAMA, JR., J.:
Before this Court is a petition for
certiorari1 under Rule 65 of the 1997
Rules of Civil Procedure, as amended,
filed by petitioners Irene and Reynaldo
Sante assailing the Decision2 dated
January 31, 2006 and the
Resolution3dated June 23, 2006 of the
Seventeenth Division of the Court of
Appeals in CA-G.R. SP No. 87563. The
assailed decision affirmed the orders of
the Regional Trial Court (RTC) of Baguio
City, Branch 60, denying their motion to
dismiss the complaint for damages filed
by respondent Vita Kalashian against
them.
The facts, culled from the records, are as
follows:
On April 5, 2004, respondent filed before
the RTC of Baguio City a complaint for

damages4 against petitioners. In her


complaint, docketed as Civil Case No.
5794-R, respondent alleged that while
she was inside the Police Station of
Natividad, Pangasinan, and in the
presence of other persons and police
officers, petitioner Irene Sante uttered
words, which when translated in English
are as follows, "How many rounds of sex
did you have last night with your boss,
Bert? You fuckin bitch!" Bert refers to
Albert Gacusan, respondents friend and
one (1) of her hired personal security
guards detained at the said station and
who is a suspect in the killing of
petitioners close relative. Petitioners also
allegedly went around Natividad,
Pangasinan telling people that she is
protecting and cuddling the suspects in
the aforesaid killing. Thus, respondent
prayed that petitioners be held liable to
pay moral damages in the amount
of P300,000.00; P50,000.00 as
exemplary damages; P50,000.00
attorneys fees; P20,000.00 litigation
expenses; and costs of suit.
Petitioners filed a Motion to Dismiss5 on
the ground that it was the Municipal Trial
Court in Cities (MTCC) and not the RTC
of Baguio, that had jurisdiction over the
case. They argued that the amount of the
claim for moral damages was not more
than the jurisdictional amount
of P300,000.00, because the claim for
exemplary damages should be excluded
in computing the total claim.
On June 24, 2004,6 the trial court denied
the motion to dismiss citing our ruling
in Movers-Baseco Integrated Port
Services, Inc. v. Cyborg Leasing
Corporation.7 The trial court held that the
total claim of respondent amounted
toP420,000.00 which was above the
jurisdictional amount for MTCCs outside
Metro Manila. The trial court also later
issued Orders on July 7, 20048 and July
19, 2004,9 respectively reiterating its
denial of the motion to dismiss and

denying petitioners motion for


reconsideration.

MTCC as the allegations show that


plaintiff was seeking to recover moral
damages in the amount of P300,000.00,
which amount was well within the
Aggrieved, petitioners filed on August 2,
jurisdictional amount of the MTCC. The
2004, a Petition for Certiorari and
Court of Appeals added that the totality of
Prohibition,10 docketed as CA-G.R. SP
claim rule used for determining which
No. 85465, before the Court of Appeals.
Meanwhile, on July 14, 2004, respondent court had jurisdiction could not be applied
to the instant case because plaintiffs
and her husband filed an Amended
11
Complaint increasing the claim for moral claim for exemplary damages was not a
separate and distinct cause of action
damages from P300,000.00
from her claim of moral damages, but
to P1,000,000.00. Petitioners filed a
merely incidental to it. Thus, the prayer
Motion to Dismiss with Answer Ad
Cautelam and Counterclaim, but the trial for exemplary damages should be
excluded in computing the total amount
court denied their motion in an
of the claim.
Order12 dated September 17, 2004.
Hence, petitioners again filed a Petition
for Certiorari and Prohibition13 before the
Court of Appeals, docketed asCA-G.R.
SP No. 87563, claiming that the trial
court committed grave abuse of
discretion in allowing the amendment of
the complaint to increase the amount of
moral damages from P300,000.00
to P1,000,000.00. The case was raffled
to the Seventeenth Division of the Court
of Appeals.
On January 23, 2006, the Court of
Appeals, Seventh Division, promulgated
a decision in CA-G.R. SP No. 85465, as
follows:
WHEREFORE, finding grave abuse of
discretion on the part of [the] Regional
Trial Court of Baguio, Branch 60, in
rendering the assailed Orders dated June
24, 2004 and July [19], 2004 in Civil
Case No. 5794-R the instant petition for
certiorari is GRANTED. The assailed
Orders are hereby ANNULLED and SET
ASIDE. Civil Case No. 5794-R for
damages is ordered DISMISSED for lack
of jurisdiction.
SO ORDERED.14
The Court of Appeals held that the case
clearly falls under the jurisdiction of the

On January 31, 2006, the Court of


Appeals, this time in CA-G.R. SP No.
87563, rendered a decision affirming the
September 17, 2004 Order of the RTC
denying petitioners Motion to Dismiss Ad
Cautelam. In the said decision, the
appellate court held that the total or
aggregate amount demanded in the
complaint constitutes the basis of
jurisdiction. The Court of Appeals did not
find merit in petitioners posture that the
claims for exemplary damages and
attorneys fees are merely incidental to
the main cause and should not be
included in the computation of the total
claim.
The Court of Appeals additionally ruled
that respondent can amend her
complaint by increasing the amount of
moral damages from P300,000.00
to P1,000,000.00, on the ground that the
trial court has jurisdiction over the original
complaint and respondent is entitled to
amend her complaint as a matter of right
under the Rules.
Unable to accept the decision, petitioners
are now before us raising the following
issues:
I.

WHETHER OR NOT THERE WAS


GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR IN EXCESS
OF JURISDICTION ON THE PART OF
THE (FORMER) SEVENTEENTH
DIVISION OF THE HONORABLE
COURT OF APPEALS WHEN IT
RESOLVED THAT THE REGIONAL
TRIAL COURT OF BAGUIO CITY
BRANCH 60 HAS JURISDICTION OVER
THE SUBJECT MATTER OF THE CASE
FOR DAMAGES AMOUNTING
TO P300,000.00;
II.
WHETHER OR NOT THERE WAS
GRAVE ABUSE OF DISCRETION ON
THE PART OF THE HONORABLE
RESPONDENT JUDGE OF THE
REGIONAL TRIAL COURT OF BAGUIO
BRANCH 60 FOR ALLOWING THE
COMPLAINANT TO AMEND THE
COMPLAINT (INCREASING THE
AMOUNT OF DAMAGES TO
1,000,000.00 TO CONFER
JURISDICTION OVER THE SUBJECT
MATTER OF THE CASE DESPITE THE
PENDENCY OF A PETITION FOR
CERTIORARI FILED AT THE COURT OF
APPEALS, SEVENTH DIVISION,
DOCKETED AS CA G.R. NO. 85465.15
In essence, the basic issues for our
resolution are:
1) Did the RTC acquire
jurisdiction over the case? and
2) Did the RTC commit grave
abuse of discretion in allowing
the amendment of the
complaint?
Petitioners insist that the complaint falls
under the exclusive jurisdiction of the
MTCC. They maintain that the claim for
moral damages, in the amount
of P300,000.00 in the original complaint,
is the main action. The exemplary

damages being discretionary should not


be included in the computation of the
jurisdictional amount. And having no
jurisdiction over the subject matter of the
case, the RTC acted with grave abuse of
discretion when it allowed the
amendment of the complaint to increase
the claim for moral damages in order to
confer jurisdiction.

Section 5 of Rep. Act No. 7691 further


provides:

SEC. 5. After five (5) years from the


effectivity of this Act, the jurisdictional
amounts mentioned in Sec. 19(3), (4),
and (8); and Sec. 33(1) of Batas
Pambansa Blg. 129 as amended by this
Act, shall be adjusted to Two hundred
thousand pesos (P200,000.00). Five (5)
In her Comment,16 respondent averred
years thereafter, such jurisdictional
that the nature of her complaint is for
amounts shall be adjusted further to
recovery of damages. As such, the
Three hundred thousand pesos
totality of the claim for damages,
(P300,000.00): Provided, however, That
including the exemplary damages as well in the case of Metro Manila, the
as the other damages alleged and
abovementioned jurisdictional amounts
prayed in the complaint, such as
shall be adjusted after five (5) years from
attorneys fees and litigation expenses,
the effectivity of this Act to Four hundred
should be included in determining
thousand pesos (P400,000.00).
jurisdiction. The total claim
being P420,000.00, the RTC has
Relatedly, Supreme Court Circular No.
jurisdiction over the complaint.
21-99 was issued declaring that the first
We deny the petition, which although
denominated as a petition for certiorari,
we treat as a petition for review on
certiorari under Rule 45 in view of the
issues raised.
Section 19(8) of Batas Pambansa Blg.
129,17 as amended by Republic Act No.
7691,18 states:
SEC. 19. Jurisdiction in civil cases.
Regional Trial Courts shall exercise
exclusive original jurisdiction:
xxxx
(8) In all other cases in which the
demand, exclusive of interest, damages
of whatever kind, attorneys fees,
litigation expenses, and costs or the
value of the property in controversy
exceeds One hundred thousand pesos
(P100,000.00) or, in such other cases in
Metro Manila, where the demand,
exclusive of the abovementioned items
exceeds Two hundred thousand pesos
(P200,000.00).

In this regard, Administrative Circular No.


09-9419 is instructive:
xxxx
2. The exclusion of the term "damages of
whatever kind" in determining the
jurisdictional amount under Section 19 (8)
and Section 33 (1) of B.P. Blg. 129, as
amended by R.A. No. 7691, applies to
cases where the damages are merely
incidental to or a consequence of the
main cause of action. However, in cases
where the claim for damages is the main
cause of action, or one of the causes of
action, the amount of such claim shall be
considered in determining the jurisdiction
of the court. (Emphasis ours.)

In the instant case, the complaint filed in


Civil Case No. 5794-R is for the recovery
of damages for the alleged malicious acts
adjustment in jurisdictional amount of first of petitioners. The complaint principally
level courts outside of Metro Manila
sought an award of moral and exemplary
from P100,000.00 to P200,000.00 took
damages, as well as attorneys fees and
effect on March 20, 1999. Meanwhile, the litigation expenses, for the alleged shame
second adjustment from P200,000.00
and injury suffered by respondent by
to P300,000.00 became effective on
reason of petitioners utterance while they
February 22, 2004 in accordance with
were at a police station in Pangasinan. It
OCA Circular No. 65-2004 issued by the is settled that jurisdiction is conferred by
Office of the Court Administrator on May law based on the facts alleged in the
13, 2004.
complaint since the latter comprises a
concise statement of the ultimate facts
Based on the foregoing, there is no
constituting the plaintiffs causes of
question that at the time of the filing of
action.20 It is clear, based on the
the complaint on April 5, 2004, the
allegations of the complaint, that
MTCCs jurisdictional amount has been
respondents main action is for damages.
adjusted to P300,000.00.
Hence, the other forms of damages being
claimed by respondent, e.g., exemplary
But where damages is the main cause of damages, attorneys fees and litigation
expenses, are not merely incidental to or
action, should the amount of moral
consequences of the main action but
damages prayed for in the complaint be
the sole basis for determining which court constitute the primary relief prayed for in
the complaint.
has jurisdiction or should the total
amount of all the damages claimed
regardless of kind and nature, such as
In Mendoza v. Soriano,21 it was held that
exemplary damages, nominal damages, in cases where the claim for damages is
and attorneys fees, etc., be used?
the main cause of action, or one of the
causes of action, the amount of such
claim shall be considered in determining
1avvphi1

the jurisdiction of the court. In the said


case, the respondents claim
of P929,000.06 in damages and P25,000
attorneys fees plus P500 per court
appearance was held to represent the
monetary equivalent for compensation of
the alleged injury. The Court therein held
that the total amount of monetary claims
including the claims for damages was the
basis to determine the jurisdictional
amount.

WHEREFORE, the petition is DENIED,


for lack of merit. The Decision and
Resolution of the Court of Appeals dated
January 31, 2006 and June 23, 2006,
respectively, are AFFIRMED. The
Regional Trial Court of Baguio City,
Branch 60 is DIRECTED to continue with
the trial proceedings in Civil Case No.
5794-R with deliberate dispatch.

Also, in Iniego v. Purganan,22 the Court


has held:

SO ORDERED.

The amount of damages claimed is within


the jurisdiction of the RTC, since it is the
claim for all kinds of damages that is the
basis of determining the jurisdiction of
courts, whether the claims for damages
arise from the same or from different
causes of action.

2. Heirs of Bautista v. Lindo


(March 10, 2014)

xxxx
Considering that the total amount of
damages claimed was P420,000.00, the
Court of Appeals was correct in ruling
that the RTC had jurisdiction over the
case.
Lastly, we find no error, much less grave
abuse of discretion, on the part of the
Court of Appeals in affirming the RTCs
order allowing the amendment of the
original complaint from P300,000.00
to P1,000,000.00 despite the pendency
of a petition for certiorari filed before the
Court of Appeals. While it is a basic
jurisprudential principle that an
amendment cannot be allowed when the
court has no jurisdiction over the original
complaint and the purpose of the
amendment is to confer jurisdiction on
the court,23 here, the RTC clearly had
jurisdiction over the original complaint
and amendment of the complaint was
then still a matter of right.24

BIENVENIDA JACINTO, IMELDA


a period of five years from the date of the
DAQUIGAN, LEO MA TIGA and ALICIA conveyance.
MATIGA, FLORENCIO ACEDO JR., and
LYLA VALERIO, Respondents.
Respondents, in their Answer, raised lack
of cause of action, estoppel, prescription,
DECISION
and laches, as defenses.
VELASCO, JR., J.:

Meanwhile, during the pendency of the


case, Bautista died and was substituted
by petitioner Epifania G. Bautista
(Epifania).

The Case

No costs.

Republic of the Philippines


SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 208232
2014

March 10,

SURVIVING HEIRS OF ALFREDO R.


BAUTISTA, namely: EPIFANIA G.
BAUTISTA and ZOEY G.
BAUTISTA,Petitioners,
vs.
FRANCISCO LINDO and WELHILMINA
LINDO; and HEIRS OF FILIPINA
DAQUIGAN, namely: MA. LOURDES
DAQUIGAN, IMELDA CATHERINE
DAQUIGAN, IMELDA DAQUIGAN and
CORSINO DAQUIGAN, REBECCA
QUIAMCO and ANDRES QUIAMCO,
ROMULO LORICA and DELIA LORICA,
GEORGE CAJES and LAURA CAJES,
MELIDA BANEZ and FRANCISCO
BANEZ, MELANIE GOFREDO, GERV
ACIO CAJES and ISABEL CAJES,
EGMEDIO SEGOVIA and VERGINIA
SEGOVIA, ELSA N. SAM, PEDRO M.
SAM and LINA SAM, SANTIAGO
MENDEZ and MINA MENDEZ, HELEN
M. BURTON and LEONARDO
BURTON, JOSE JACINTO and

This is a Petition for Review on Certiorari


under Rule 45 assailing the April 25,
2013 Order of the Regional Trial Court
(RTC) in Civil Case No. (1798)-021 as
well as its Order of July 3, 2013 denying
reconsideration.

Respondents Francisco and Welhilmina


Lindo later entered into a compromise
agreement with petitioners, whereby they
agreed to cede to Epifania a three
thousand two hundred and thirty square
meter (3,230 sq.m.)-portion of the
property as well as to waive, abandon,
The Facts
surrender, and withdraw all claims and
counterclaims against each other. The
Alfredo R. Bautista (Bautista), petitioners compromise was approved by the RTC in
its Decision dated January 27, 2011, the
predecessor, inherited in 1983 a freepatent land located in Poblacion, Lupon, fallo of which reads:
Davao Oriental and covered by Original
Certificate of Title (OCT) No. (1572) PWHEREFORE, a DECISION is hereby
6144. A few years later, he subdivided
rendered based on the above-quoted
the property and sold it to several
Compromise Agreement and the parties
vendees, herein respondents, via a
are enjoined to strictly comply with the
notarized deed of absolute sale dated
terms and conditions of the same.
May 30, 1991. Two months later, OCT
No. (1572) P-6144 was canceled and
Transfer Certificates of Title (TCTs) were SO ORDERED.
issued in favor of the vendees.
Other respondents, however, filed a
Motion to Dismiss dated February 4,
Three years after the sale, or on August
2013, alleging that the complaint failed to
5, 1994, Bautista filed a complaint for
state the value of the property sought to
repurchase against respondents before
be recovered. Moreover, they asserted
the RTC, Branch 32, Lupon, Davao
that the total selling price of all the
Oriental, docketed as Civil Case No.
properties is only sixteen thousand five
1798, anchoring his cause of action on
hundred pesos (PhP 16,500), and the
Section 119 of Commonwealth Act No.
(CA) 141, otherwise known as the "Public selling price or market value of a property
is always higher than its assessed value.
Land Act," which reads:
Since Batas Pambansa Blg. (BP) 129, as
amended, grants jurisdiction to the RTCs
SECTION 119. Every conveyance of land over civil actions involving title to or
acquired under the free patent or
possession of real property or interest
homestead provisions, when proper, shall therein where the assessed value is more
be subject to repurchase by the
than PhP 20,000, then the RTC has no
applicant, his widow, or legal heirs, within jurisdiction over the complaint in question
3

since the property which Bautista seeks


to repurchase is below the PhP 20,000
jurisdictional ceiling.
RTC Ruling

Acting on the motion, the RTC issued the


assailed order dismissing the complaint
for lack of jurisdiction. The trial court
found that Bautista failed to allege in his
complaint that the value of the subject
property exceeds 20 thousand pesos.
Furthermore, what was only stated
therein was that the total and full refund
of the purchase price of the property is
PhP 16,500. This omission was
considered by the RTC as fatal to the
case considering that in real actions,
jurisdictional amount is determinative of
whether it is the municipal trial court or
the RTC that has jurisdiction over the
case.

THE PUBLIC RESPONDENT RTC


ERRED IN ADMITTING THE MOTION
TO DISMISS DATED FEBRUARY 4,
2013, BELATEDLY FILED BY THE
PRIVATE RESPONDENTS IN THE
CASE.

THE PUBLIC RESPONDENT RTC


ERRED IN HOLDING THAT THE
INSTANT CASE FOR REPURCHASE IS
A REAL ACTION.

thus, the attempt to repurchase. This,


according to respondents, goes against
the policy and is not in keeping with the
spirit of CA 141 which is the preservation
of the land gratuitously given to
patentees by the State as a reward for
their labor in cultivating the property.
Also, the Deed of Absolute Sale
presented in evidence by Bautista was
unilaterally executed by him and was not
signed by respondents. Lastly,
respondents argue that repurchase is a
real action capable of pecuniary
estimation.

The Issue

Our Ruling

II

Stated differently, the issue for the


Courts resolution is: whether or not the
RTC erred in granting the motion for the
dismissal of the case on the ground of
lack of jurisdiction over the subject
matter.

The petition is meritorious.

conferred upon the Metropolitan


Trial Courts, Municipal Trial
Courts, and Municipal Circuit
Trial Courts.
On the other hand, jurisdiction of first
level courts is prescribed in Sec. 33 of BP
129, which provides:
Sec. 33. Jurisdiction of Metropolitan Trial
Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts in civil
cases.Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal
Circuit Trial Courts shall exercise:
xxxx

3) Exclusive original jurisdiction in all civil


actions which involve title to, or
possession of, real property, or any
interest therein where the assessed value
Jurisdiction of RTCs, as may be relevant of the property or interest therein does
With respect to the belated filing of the
to the instant petition, is provided in Sec. not exceed Twenty thousand pesos
Arguments
motion, the RTC, citing Cosco Philippines
19 of BP 129, which reads:
(P20,000.00) or, in civil actions in Metro
Shipping, Inc. v. Kemper Insurance
Manila, where such assessed value does
Company, held that a motion to dismiss
Petitioners argue that respondents
not exceed Fifty thousand pesos
Sec.
19.
Jurisdiction
in
civil
for lack of jurisdiction may be filed at any belatedly filed their Motion to Dismiss
(P50,000.00) exclusive of interest,
cases.Regional
Trial
Courts
shall
stage of the proceedings, even on
and are now estopped from seeking the
damages of whatever kind, attorneys
appeal, and is not lost by waiver or by
dismissal of the case, it having been filed exercise exclusive original jurisdiction:
fees, litigation expenses and costs:
estoppel. The dispositive portion of the
nine (9) years after the filing of the
Provided, That in cases of land not
assailed Order reads:
complaint and after they have actively
1) In all civil actions in which the declared for taxation purposes, the value
participated in the proceedings.
subject of the litigation is
of such property shall be determined by
Additionally,
they
allege
that
an
action
for
incapable of pecuniary
WHEREFORE, the complaint for
the assessed value of the adjacent lots.
repurchase is not a real action, but one
estimation;
Repurchase, Consignation, with
incapable of pecuniary estimation, it
Preliminary Injunction and Damages is
The core issue is whether the action filed
being founded on privity of contract
hereby dismissed for lack of jurisdiction.
2) In all civil actions which
by petitioners is one involving title to or
between the parties. According to
involve the title to, or
possession of real property or any
petitioners, what they seek is the
possession of, real property, or
SO ORDERED.
interest therein or one incapable of
enforcement of their right to repurchase
any interest therein, where the
pecuniary estimation.
the subject property under Section 119 of
assessed value of the property
Assignment of Errors
CA 141.
involved exceeds Twenty
The course of action embodied in the
thousand pesos (P20,000.00)
complaint by the present petitioners
Their motion for reconsideration having
Respondents, for their part, maintain that
or, for civil actions in Metro
predecessor, Alfredo R. Bautista, is to
been denied, petitioners now seek
since the land is no longer devoted to
Manila, where such value
enforce his right to repurchase the lots he
recourse before this Court with the
agriculture, the right of repurchase under
exceeds Fifty thousand pesos
following assigned errors:
said law can no longer be availed of,
(P50,000.00) except actions for formerly owned pursuant to the right of a
free-patent holder under Sec. 119 of CA
citing Santana v. Marias. Furthermore,
forcible entry into and unlawful
141 or the Public Land Act.
they suggest that petitioners intend to
detainer of lands or buildings,
I
resell the property for a higher profit,
original jurisdiction over which is
6

Jurisdiction of courts is granted by the


Constitution and pertinent laws.

The Court rules that the complaint to


redeem a land subject of a free patent is
a civil action incapable of pecuniary
estimation.

5. Those for the rescission or


reformation of contracts;
13

6. Interpretation of a contractual
stipulation.
14

It is a well-settled rule that jurisdiction of


the court is determined by the allegations
in the complaint and the character of the
relief sought. In this regard, the Court, in
Russell v. Vestil, wrote that "in
determining whether an action is one the
subject matter of which is not capable of
pecuniary estimation this Court has
adopted the criterion of first ascertaining
the nature of the principal action or
remedy sought. If it is primarily for the
recovery of a sum of money, the claim is
considered capable of pecuniary
estimation, and whether jurisdiction is in
the municipal courts or in the RTCs
would depend on the amount of the
claim." But 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,
hence, are incapable of pecuniary
estimation. These cases are cognizable
exclusively by RTCs.
10

The Court finds that the instant cause of


action to redeem the land is one for
specific performance.

11

12

Settled jurisprudence considers some


civil actions as incapable of pecuniary
estimation, viz:
1. Actions for specific
performance;
2. Actions for support which will
require the determination of the
civil status;
3. The right to support of the
plaintiff;
4. Those for the annulment of
decisions of lower courts;

The facts are clear that Bautista sold to


respondents his lots which were covered
by a free patent. While the deeds of sale
do not explicitly contain the stipulation
that the sale is subject to repurchase by
the applicant within a period of five (5)
years from the date of conveyance
pursuant to Sec. 119 of CA 141, still,
such legal provision is deemed integrated
and made part of the deed of sale as
prescribed by law. It is basic that the law
is deemed written into every
contract. Although a contract is the law
between the parties, the provisions of
positive law which regulate contracts are
deemed written therein and shall limit
and govern the relations between the
parties. Thus, it is a binding prestation in
favor of Bautista which he may seek to
enforce. That is precisely what he did. He
filed a complaint to enforce his right
granted by law to recover the lot subject
of free patent. Ergo, it is clear that his
action is for specific performance, or if
not strictly such action, then it is akin or
analogous to one of specific
performance. Such being the case, his
action for specific performance is
incapable of pecuniary estimation and
cognizable by the RTC.
15

16

Respondents argue that Bautistas action


is one involving title to or possession of
real property or any interests therein and
since the selling price is less than PhP
20,000, then jurisdiction is lodged with
the MTC. They rely on Sec. 33 of BP
129.

Republic Act No. 7691 amended Sec. 33


of BP 129 and gave Metropolitan Trial
Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts exclusive
original jurisdiction in all civil actions
which involve title to, or possession of,
real property, or any interest therein
where the assessed value of the property
or interest therein does not exceed
twenty thousand pesos (PhP 20,000) or,
in civil actions in Metro Manila, where
such assessed value does not exceed
fifty thousand pesos (PhP 50,000)
exclusive of interest, damages of
whatever kind, attorneys fees, litigation
expenses and costs.
17

will not hold water. This is because


respondents have actually participated in
the proceedings before the RTC and
aggressively defended their position, and
by virtue of which they are already barred
to question the jurisdiction of the RTC
following the principle of jurisdiction by
estoppel.
In Heirs of Jose Fernando v. De Belen, it
was held that the party raising defenses
to the complaint, actively participating in
the proceedings by filing pleadings,
presenting his evidence, and invoking its
authority by asking for an affirmative
relief is deemed estopped from
questioning the jurisdiction of the court.
18

At first blush, it appears that the action


filed by Bautista involves title to or
possession of the lots he sold to
respondents. Since the total selling price
is less than PhP 20,000, then the MTC,
not the RTC, has jurisdiction over the
case. This proposition is incorrect for the
re-acquisition of the lots by Bautista or
herein successors-in-interests, the
present petitioners, is but incidental to
and an offshoot of the exercise of the
right by the latter to redeem said lots
pursuant to Sec. 119 of CA 141. The
reconveyance of the title to petitioners is
solely dependent on the exercise of such
right to repurchase the lots in question
and is not the principal or main relief or
remedy sought. Thus, the action of
petitioners is, in reality, incapable of
pecuniary estimation, and the
reconveyance of the lot is merely the
outcome of the performance of the
obligation to return the property
conformably to the express provision of
CA 141.

Here, we note that aside from the belated


filing of the motion to dismissit having
been filed nine (9) years from the filing of
the complaintrespondents actively
participated in the proceedings through
the following acts:
1. By filing their Answer and
Opposition to the Prayer for
Injunction dated September 29,
1994 whereby they even
interposed counterclaims,
specifically: PhP 501,000 for
unpaid survey accounts, PhP
100,000 each as litigation
expenses, PhP 200,000 and
PhP 3,000 per daily appearance
by way of attorneys fees, PhP
500,000 as moral damages,
PhP 100,000 by way of
exemplary damages, and costs
of suit;
19

2. By participating in Pre-trial;
Even if we treat the present action as one
involving title to real property or an
interest therein which falls under the
jurisdiction of the first level court under
Sec. 33 of BP 129, as the total selling
price is only PhP 16,000 way below the
PhP 20,000 ceiling, still, the postulation
of respondents that MTC has jurisdiction

3. By moving for the


postponement of their
presentation of evidence;
4. By presenting their
witness; and
21

20

5. By submitting the
compromise agreement for
approval.

DECISION

22

PERALTA, J.:

Having fully participated in all stages of


the case, and even invoking the RTCs
authority by asking for affirmative reliefs,
respondents can no longer assail the
jurisdiction of the said trial court. Simply
put, considering the extent of their
participation in the case, they are, as
they should be, considered estopped
from raising lack of jurisdiction as a
ground for the dismissal of the action.
1wphi1

WHEREFORE, premises considered, the


instant petition is hereby GRANTED. The
April 25, 2013 and July 3, 2013 Orders of
the Regional Trial Court in Civil Case No.
(1798)-021 are hereby REVERSED and
SET ASIDE.
The Regional Trial Court, Branch 32 in
Lupon, Davao Oriental is ORDERED to
proceed with dispatch in resolving Civil
Case No. (1798)-021.
No pronouncement as to costs.
SO ORDERED.

3. Padlan v. Dinglasan (March 20,


2013)
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 180321
2013

March 20,

EDITHA PADLAN, Petitioner,


vs.
ELENITA DINGLASAN and FELICISIMO
DINGLASAN, Respondents.

This is a petition for review on certiorari


assailing the Decision1 dated June 29,
2007 of the Court of Appeals (CA) in CAG.R. CV No. 86983, and the
Resolution2 dated October 23, 2007
denying petitioner's Motion for
Reconsideration.3

After learning what had happened,


respondents demanded petitioner to
surrender possession of Lot No. 625-K,
but the latter refused. Respondents were
then forced to file a case before the
Regional Trial Court (RTC) of Balanga,
Bataan for the Cancellation of Transfer
Certificate of Title No. 137466, docketed
as Civil Case No. 438-ML. Summons
was, thereafter, served to petitioner
through her mother, Anita Padlan.

Not satisfied, respondents sought


recourse before the CA, docketed as CAG.R. No. CV No. 86983.
On June 29, 2007, the CA rendered a
Decision8 in favor of the respondent.
Consequently, the CA reversed and set
aside the Decision of the RTC and
ordered the cancellation of the TCT
issued in the name of Lorna and the
petitioner, and the revival of respondents
own title, to wit:

The factual and procedural antecedents


are as follows:

On December 13, 1999, respondents


moved to declare petitioner in default and WHEREFORE, in view of the foregoing,
prayed that they be allowed to present
the Decision dated July
evidence ex parte.4

Elenita Dinglasan (Elenita) was the


registered owner of a parcel of land
designated as Lot No. 625 of the Limay
Cadastre which is covered by Transfer
Certificate of Title (TCT) No. T-105602,
with an aggregate area of 82,972 square
meters. While on board a jeepney,
Elenitas mother, Lilia Baluyot (Lilia), had
a conversation with one Maura Passion
(Maura) regarding the sale of the said
property. Believing that Maura was a real
estate agent, Lilia borrowed the owners
copy of the TCT from Elenita and gave it
to Maura. Maura then subdivided the
property into several lots from Lot No.
625-A to Lot No. 625-O, under the name
of Elenita and her husband Felicisimo
Dinglasan (Felicisimo).

On January 17, 2000, petitioner, through


counsel, filed an Opposition to Declare
Defendant in Default with Motion to
Dismiss Case for Lack of Jurisdiction
Over the Person of Defendant.5 Petitioner
claimed that the court did not acquire
jurisdiction over her, because the
summons was not validly served upon
her person, but only by means of
substituted service through her mother.
Petitioner maintained that she has long
been residing in Japan after she married
a Japanese national and only comes to
the Philippines for a brief vacation once
every two years.

On April 5, 2001, Charlie Padlan, the


brother of petitioner, testified that his
Through a falsified deed of sale bearing
sister is still in Japan and submitted a
the forged signature of Elenita and her
copy of petitioners passport and an
husband Felicisimo, Maura was able to
envelope of a letter that was allegedly
sell the lots to different buyers. On April
sent by his sister. Nevertheless, on April
26, 1990, Maura sold Lot No. 625-K to
5, 2001, the RTC issued an
one Lorna Ong (Lorna), who later caused Order6 denying petitioners motion to
the issuance of TCT No. 134932 for the
dismiss and declared her in default.
subject property under her name. A few
Thereafter, trial ensued.
months later, or sometime in August
1990, Lorna sold the lot to petitioner
2005, the RTC rendered a
Editha Padlan for P4,000.00. Thus, TCT On July 1,
7
Decision
finding
petitioner to be a buyer
No. 134932 was cancelled and TCT No.
in good faith and, consequently,
137466 was issued in the name of
dismissed the complaint.
petitioner.

1, 2005 of the Regional Trial Court, Third


Judicial Region, Branch 4, Mariveles,
Bataan (Stationed in Balanga, Bataan) in
Civil Case No. 438-ML is hereby
REVERSED and SET ASIDE.
The Transfer Certificate of Title No.
134932 issued in the name of Lorna Ong
and Transfer Certificate of Title No.
137466 issued in the name of defendantappellee Editha Padlan are CANCELLED
and Transfer Certificate of Title No.
134785 in the name of the plaintiffsappellants is REVIVED.
SO ORDERED.9
The CA found that petitioner purchased
the property in bad faith from Lorna. The
CA opined that although a purchaser is
not expected to go beyond the title,
based on the circumstances surrounding
the sale, petitioner should have
conducted further inquiry before buying
the disputed property. The fact that Lorna
bought a 5,000-square-meter property for
only P4,000.00 and selling it after four
months for the same amount should have
put petitioner on guard. With the
submission of the Judgment in Criminal
Case No. 4326 rendered by the RTC,
Branch 2, Balanga, Bataan, entitled
People of the Philippines v. Maura
Passion10 and the testimonies of

respondents, the CA concluded that


respondents sufficiently established that
TCT No. 134932 issued in the name of
Lorna and TCT No. 137466 issued in the
name of petitioner were fraudulently
issued and, therefore, null and void.

Petitioner maintains that the case of


Tijam v. Sibonghanoy finds no application
in the case at bar, since the said case is
not on all fours with the present case.
Unlike in Tijam, wherein the petitioner
therein actively participated in the
proceedings, petitioner herein asserts
that she did not participate in any
Aggrieved, petitioner filed a Motion for
proceedings before the RTC because
Reconsideration. Petitioner argued that
not only did the complaint lacks merit, the she was declared in default.
lower court failed to acquire jurisdiction
over the subject matter of the case and
Petitioner insists that summons was not
the person of the petitioner.
validly served upon her, considering that
at the time summons was served, she
was residing in Japan. Petitioner
On October 23, 2007, the CA issued a
Resolution11 denying the motion. The CA contends that pursuant to Section 15,
Rule 14 of the Rules of Civil Procedure,
concluded that the rationale for the
when the defendant does not reside in
exception made in the landmark case of
Tijam v. Sibonghanoy12 was present in the the Philippines and the subject of the
action is property within the Philippines of
case. It reasoned that when the RTC
denied petitioners motion to dismiss the the defendant, service may be effected
out of the Philippines by personal service
case for lack of jurisdiction, petitioner
or by publication in a newspaper of
neither moved for a reconsideration of
the order nor did she avail of any remedy general circulation. In this case,
provided by the Rules. Instead, she kept summons was served only by substituted
service to her mother. Hence, the court
silent and only became interested in the
did not acquire jurisdiction over her
case again when the CA rendered a
person.
decision adverse to her claim.
Hence, the petition assigning the
following errors:
I
WHETHER OR NOT THE HONORABLE
COURT HAS JURISDICTION OVER
THE PERSON OF THE PETITIONER.
II

Also, petitioner posits that the court lacks


jurisdiction of the subject matter,
considering that from the complaint, it
can be inferred that the value of the
property was only P4,000.00, which was
the amount alleged by respondents that
the property was sold to petitioner by
Lorna.
Finally, petitioner stresses that she was a
buyer in good faith. It was Maura who
defrauded the respondents by selling the
property to Lorna without their authority.

WHETHER OR NOT THE HONORABLE


COURT HAS JURISDICTION OVER
THE SUBJECT MATTER OF THE CASE. Respondents, on the other hand, argue
that the CA was correct in ruling in their
favor.
III
WHETHER OR NOT PETITIONER IS A
BUYER IN GOOD FAITH AND FOR
VALUE.13

The petition is meritorious.

Respondents filed the complaint in 1999,


at the time Batas Pambansa Blg. (BP)
129, the Judiciary Reorganization Act of
1980, was already amended by Republic
Act (RA) No. 7691, An Act Expanding the
Jurisdiction of the Metropolitan Trial
Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts, amending
for the purpose BP Blg. 129.14

Section 3 of RA 7691 expanded the


exclusive original jurisdiction of the first
level courts, thus:

Section 1. Section 19 of Batas


Pambansa Blg. 129, otherwise known as
the "Judiciary Reorganization Act of
1980," is hereby amended to read as
follows:

xxxx

Section 3. Section 33 of the same law BP


Blg. 129 is hereby amended to read as
follows:

Sec. 33. Jurisdiction of Metropolitan Trial


Courts, Municipal Trial Courts and
Section 1 of RA 7691, amending BP Blg. Municipal Circuit Trial Courts in Civil
129, provides that the RTC shall exercise Cases. Metropolitan Trial Courts,
exclusive original jurisdiction on the
Municipal Trial Courts, and Municipal
following actions:
Circuit Trial Courts shall exercise:

Sec. 19. Jurisdiction in civil cases.


Regional Trial Courts shall exercise
exclusive original jurisdiction:
(1) In all civil actions in which
the subject of the litigation is
incapable of pecuniary
estimation;
(2) In all civil actions which
involve the title to, or
possession of, real property, or
any interest therein, where the
assessed value of the property
involved exceeds Twenty
Thousand Pesos (P20,000.00)
or for civil actions in Metro
Manila, where such value
exceeds Fifty Thousand Pesos
(P50,000.00), except actions for
forcible entry into and unlawful
detainer of lands or buildings,
original jurisdiction over which is
conferred upon the Metropolitan
Trial Courts, Municipal Trial
Courts, and Municipal Circuit
Trial Courts; x x x

(3) Exclusive original jurisdiction in all


civil actions which involve title to, or
possession of, real property, or any
interest therein where the assessed value
of the property or interest therein does
not exceed Twenty Thousand Pesos
(P20,000.00) or, in civil actions in Metro
Manila, where such assessed value does
not exceed Fifty Thousand Pesos
(P50,000.00) exclusive of interest,
damages of whatever kind, attorney's
fees, litigation expenses and costs:
Provided, That in cases of land not
declared for taxation purposes, the value
of such property shall be determined by
the assessed value of the adjacent lots.
Respondents filed their Complaint with
the RTC; hence, before proceeding any
further with any other issues raised by
the petitioner, it is essential to ascertain
whether the RTC has jurisdiction over the
subject matter of this case based on the
above-quoted provisions.
However, in order to determine which
court has jurisdiction over the action, an
examination of the complaint is essential.
Basic as a hornbook principle is that
jurisdiction over the subject matter of a
case is conferred by law and determined
by the allegations in the complaint which
comprise a concise statement of the

ultimate facts constituting the plaintiff's


cause of action. The nature of an action,
as well as which court or body has
jurisdiction over it, is determined based
on the allegations contained in the
complaint of the plaintiff, irrespective of
whether or not the plaintiff is entitled to
recover upon all or some of the claims
asserted therein. The averments in the
complaint and the character of the relief
sought are the ones to be consulted.
Once vested by the allegations in the
complaint, jurisdiction also remains
vested irrespective of whether or not the
plaintiff is entitled to recover upon all or
some of the claims asserted therein.15

revive TCT No. T-105602 which was


originally issued and registered in the
name of the respondents; and (b) to
order petitioner to pay attorneys fees in
the sum of P50,000.00 and litigation
expenses ofP20,000.00, plus cost of
suit.18

In no uncertain terms, the Court has


already held that a complaint must allege
the assessed value of the real property
subject of the complaint or the interest
thereon to determine which court has
jurisdiction over the action.21 In the case
at bar, the only basis of valuation of the
subject property is the value alleged in
An action "involving title to real property" the complaint that the lot was sold by
means that the plaintiff's cause of action Lorna to petitioner in the amount
of P4,000.00. No tax declaration was
is based on a claim that he owns such
property or that he has the legal rights to even presented that would show the
valuation of the subject property. In fact,
have exclusive control, possession,
in one of the hearings, respondents
enjoyment, or disposition of the same.
counsel informed the court that they will
Title is the "legal link between (1) a
present the tax declaration of the
person who owns property and (2) the
property in the next hearing since they
property itself." "Title" is different from a
What determines the jurisdiction of the
"certificate of title" which is the document have not yet obtained a copy22from the
court is the nature of the action pleaded
of ownership under the Torrens system of Provincial Assessors Office. However,
they did not present such copy.
as appearing from the allegations in the
registration issued by the government
complaint. The averments therein and the through the Register of Deeds. While title
character of the relief sought are the
is the claim, right or interest in real
To reiterate, where the ultimate objective
ones to be consulted.16
property, a certificate of title is the
of the plaintiffs is to obtain title to real
evidence of such claim.19
property, it should be filed in the proper
court having jurisdiction over the
17
Respondents Complaint narrates that
assessed value of the property subject
they are the duly registered owners of Lot In the present controversy, before the
thereof.23 Since the amount alleged in the
No. 625 of the Limay Cadastre which
relief prayed for by the respondents in
was covered by TCT No. T-105602.
their complaint can be granted, the issue Complaint by respondents for the
disputed lot is only P4,000.00, the MTC
Without their knowledge and consent, the of who between the two contending
land was divided into several lots under
parties has the valid title to the subject lot and not the RTC has jurisdiction over the
action. Therefore, all proceedings in the
their names through the fraudulent
must first be determined before a
RTC are null and void.24
manipulations of Maura. One of the lots
determination of who between them is
was Lot 625-K, which was covered by
legally entitled to the certificate of title
TCT No. 134785. On April 26, 1990,
covering the property in question.
Consequently, the remaining issues
Maura sold the subject lot to Lorna. By
raised by petitioner need not be
virtue of the fictitious sale, TCT No.
discussed further.
From the Complaint, the case filed by
134785 was cancelled and TCT No.
respondent is not simply a case for the
134932 was issued in the name of Lorna. cancellation of a particular certificate of
WHEREFORE, the petition is GRANTED.
Sometime in August 1990, Lorna sold the title and the revival of another. The
The Decision of the Court of Appeals in
lot to petitioner for a consideration in the determination of such issue merely
CA-G.R. CV No. 86983, dated June 29,
amount of P4,000.00. TCT No. 134932
follows after a court of competent
2007, and its Resolution dated October
was later cancelled and TCT No. 137466 jurisdiction shall have first resolved the
23, 2007, are REVERSED and SET
was issued in the name of petitioner.
matter of who between the conflicting
ASIDE. The Decision of the Regional
Despite demands from the respondents, parties is the lawful owner of the subject Trial Court, dated July I, 2005, is
petitioner refused to surrender
property and ultimately entitled to its
declared NULL and VOID. The complaint
possession of the subject property.
possession and enjoyment. The action is, in Civil Case No. 438-ML is dismissed
Respondents were thus constrained to
therefore, about ascertaining which of
without prejudice.
engage the services of a lawyer and
these parties is the lawful owner of the
incur expenses for litigation.
subject lot, jurisdiction over which is
SO ORDERED.
Respondents prayed for the RTC (a) to
determined by the assessed value of
declare TCT No. 137466 null and to
such lot.20
1wphi1

4. Genesis Investment v. Heirs of


Ebarasabal (November 20, 2013)
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 181622
2013

November 20,

GENESIS INVESTMENT, INC., CEBU


JAYA REALTY INC., and SPOUSES
RHODORA and LAMBERT
LIM,Petitioners,
vs.
HEIRS of CEFERINO
EBARASABAL,* NAMELY: ROGELIO
EBARASABAL, SPOUSES LIGAYA E.
GULIMLIM AND JOSE GULIMLIM,
SPOUSES VISITACION E. CONEJOS
and ELIAS CONEJOS, BEN TEJERO,
POCAS TEJERO, GERTRUDES
TEJERO, BANING HAYO, LACIO
EBARASABAL and JULIETA
EBARASABAL; HEIRS OF FLORO
EBARASABAL, namely: SOFIA
ABELONG, PEPITO EBARASABAL
AND ELPIDIO EBARASABAL; HEIRS
OF LEONA EBARASABAL- APOLLO,
namely: SILVESTRA A. MOJELLO and
MARCELINO APOLLO; HEIRS OF
PEDRO EBARASABAL, namely:
BONIFACIO EBARASABAL, SERGIO
EBARASABAL and JAIME
EBARASABAL; HEIRS of ISIDRO
EBARASABAL, NAMELY: SPOUSES
CARLOSA E. NUEVO and
FORTUNATO NUEVA;** HEIRS of
BENITO EBARASABAL, namely:
PAULO BAGAAN, SPOUSES
CATALINA A. MARIBAO and RENE
MARIBAO, VICENTE ABRINICA and
PATRON EBARASABAL; HEIRS of
JULIAN EBARASABAL, NAMELY:
ALFREDO BAGAAN, JUAN BAGAAN,
AVELINO BAGAAN, FERDINAND
BAGAAN, MAURO BAGAAN,
SPOUSES ROWENA B. LASACA and

FRANCISCO LACASA,*** SPOUSES


MARIA B. CABAG and EMILIO CABAG
and ESTELITA BAGAAN, all being
represented herein by VICTOR
MOJELLO, FEDERICO BAGAAN and
PAULINO EBARASABAL, as their
Attorneys-in-Fact, Respondents.

xxxx

of the property in question is involved


which together with all the other
remaining reliefs prayed for are but
And while the prayer of the plaintiffs for
the annulment of documents qualified the purely incidental to or as a consequence
of the foregoing principal relief sought.
case as one incapable of pecuniary
10

estimation thus, rendering it cognizable


supposedly by the second level courts
but considering that Republic Act No.
DECISION
7691 expressly provides to cover "all civil
actions" which phrase understandably is
to include those incapable of pecuniary
PERALTA, J.:
estimation, like the case at bar, this Court
is of the view that said law really finds
Before the Court is a petition for review
application here more so that the same
on certiorari under Rule 45 of the Rules
case also "involves title to, or possession
of Court seeking to reverse and set aside of, real property, or any interest therein."
the Decision and Resolution, dated July For being so, the assessed value of the
11, 2007 and January 10, 2008,
real property involved is determinative of
respectively, of the Court of Appeals (CA) which court has jurisdiction over the
in CA-G.R. CEB-SP No. 01017.
case. And the plaintiffs admitting that the
assessed value of the litigated area is
less thanP20,000.00, the defendants are
The antecedents of the case are as
correct in arguing that the case is beyond
follows:
this Court's jurisdiction.
1

On November 12, 2003, herein


respondents filed against herein
petitioners a Complaint for Declaration of
Nullity of Documents, Recovery of
Shares, Partition, Damages and
Attorney's Fees. The Complaint was filed
with the Regional Trial Court (RTC) of
Barili, Cebu.
3

On August 5, 2004, herein petitioners


filed a Motion to Dismiss contending,
among others, that the RTC has no
jurisdiction to try the case on the ground
that, as the case involves title to or
possession of real property or any
interest therein and since the assessed
value of the subject property does not
exceed P20,000.00 (the same being
only P11,990.00), the action falls within
the jurisdiction of the Municipal Trial
Court (MTC).
4

In its Order dated September 29, 2004,


the RTC granted petitioners' Motion to
Dismiss, holding as follows:
6

Respondents filed a Motion for Partial


Reconsideration, arguing that their
complaint consists of several causes of
action, including one for annulment of
documents, which is incapable of
pecuniary estimation and, as such, falls
within the jurisdiction of the RTC.

Petitioners filed a Motion for


Reconsideration, but the RTC denied it
in its Order dated June 23, 2005.
11

On March 17, 2005, the RTC issued an


Order granting respondents' Motion for
Partial Reconsideration and reversing its
earlier Order dated September 29, 2004.
The RTC ruled, thus:
On the issue of want of jurisdiction, this
court likewise finds to be with merit the
contention of the movants as indeed the
main case or the primary relief prayed for
by the movants is for the declaration of
nullity or annulment of documents which
unquestionably is incapable of pecuniary
estimation and thus within the exclusive
original jurisdiction of this court to try
although in the process of resolving the
controversy, claims of title or possession

1. Plaintiffs are all Filipino, of legal age,


surviving descendants either as
grandchildren or great grandchildren
and heirs and successors-in-interest of
deceased Roman Ebarsabal, who died
on 07 September 1952 x x x
xxxx

Aggrieved, petitioners filed a petition for


certiorari with the CA. However, the CA
dismissed the petition via its assailed
Decision dated July 11, 2007, holding
that the subject matter of respondents'
complaint is incapable of pecuniary
estimation and, therefore, within the
jurisdiction of the RTC, considering that
the main purpose in filing the action is to
declare null and void the documents
assailed therein.
12

Petitioners' Motion for Reconsideration


was, subsequently, denied in the CA
Resolution dated January 10, 2008.

xxxx

Hence, the instant petition for review on


certiorari raising the sole issue, to wit:
Whether or not the Honorable Court of
Appeals gravely erred in concluding that
the Regional Trial Court, Branch 60 of
Barili, Cebu has jurisdiction over the
instant case when the ALLEGATIONS IN
THE COMPLAINT clearly shows that the
main cause of action of the respondents
is for the Recovery of their Title, Interest,
and Share over a Parcel of Land, which
has an assessed value of P11,990.00
and thus, within the jurisdiction of the
Municipal Trial Court.
13

The petition lacks merit.


For a clearer understanding of the case,
this Court, like the CA, finds it proper to
quote pertinent portions of respondents'
Complaint, to wit:

8. During the lifetime of Roman


Ebarsabal, he acquired a parcel of land
situated in Basdaku, Saavedra, Moalboal,
Cebu, x x x.
xxxx
with a total assessed value of P2,890.00
x x x. However, for the year 2002, the
property was already having (sic) a total
assessed value of P11,990.00 x x x.
9. Upon the death of said Roman
Ebarsabal, his eight (8) children named in
par. 7 above, became co-owners of his
above-described property by hereditary
succession; taking peaceful possession
and enjoyment of the same in fee simple
pro indiviso, paying the real estate taxes
thereon and did not partition the said
property among themselves until all of
them likewise died, leaving, however,
their respective children and descendants
and/or surviving heirs and successors-ininterest, and who are now the abovenamed plaintiffs herein;
10. The plaintiffs who are mostly
residents in (sic) Mindanao and Manila,
have just recently uncovered the fact that
on 28th January 1997, the children and
descendants of deceased Gil Ebarsabal,
namely: Pelagio, Hipolito, Precela,
Fructuosa, Roberta, Florentino, Erlinda,
Sebastian, Cirilo, all surnamed
Ebarsabal, have executed among
themselves a Deed of Extrajudicial
Settlement with Sale of Roman

Ebarsabal's entire property described


above, by virtue of which they allegedly
extrajudicially settled the same and,
for P2,600,000.00 although only the
sum of P950,000.00 was reflected in their
Deed of Sale for reason only known to
them, they sold the whole property to
defendants Genesis Investment Inc.
represented by co-defendant Rhodora B.
Lim, the wife of Lambert Lim, without the
knowledge, permission and consent of
the plaintiffs who are the vendors' coowners of the lot in question, x x x.
11. Surprisingly, however, the defendant
Genesis managed to have the Tax
Declaration of the property issued in the
name of co-defendant Cebu Jaya Realty
Incorporated, a firm which, as already
intimated above, is also owned by
Spouses Lambert and Rhodora B. Lim,
instead of in the name of Genesis
Investment, Incorporated, which is
actually the vendee firm of the lot in
question.
xxxx
Hence, the reason why Cebu Jaya
Realty, Incorporated is joined and
impleaded herein as a co-defendant.

14. By representation, the plaintiffs, are


therefore, by law, entitled to their rightful
shares from the estate of the deceased
Roman Ebarsabal consisting of seven (7)
shares that would have been due as the
shares of seven (7) other children of
Roman Ebarsabal who are also now
deceased, namely: Ceferino, Floro,
Leona, Pedro, Isidoro, Julian and Benito,
all surnamed Ebarsabal.

13. Further, where as in this case, the


other heirs who are the plaintiffs herein,
did not consent to the sale of their ideal
shares in the inherited property, the sale
was only to be limited to the pro indiviso
share of the selling heirs.
xxxx

action is within the jurisdiction of the


RTC.

As stated above, it is clear from the


records that respondents' complaint was
for "Declaration of Nullity of Documents,
Recovery of Shares, Partition, Damages
and Attorney's Fees." In filing their
Complaint with the RTC, respondents
sought to recover ownership and
possession of their shares in the disputed
15. The defendants who had prior
parcel of land by questioning the due
(c) Tax Declaration of Real
knowledge of the existence of the other
execution and validity of the Deed of
Property issued to Cebu Jaya
heirs who are co-owners of the vendors
Extrajudicial Settlement with Sale as well
Realty, Inc., marked as Annexof the property they purchased, had
as the Memorandum of Agreement
D;
unlawfully acted in bad faith in insisting to
entered into by and between some of
buy the whole property in co-ownership,
their co-heirs and herein petitioners.
2 Ordering the defendants to make
only from the heirs and successors-inAside from praying that the RTC render
partition of the property in litigation with
interest of deceased Gil Ebarsabal, who
judgment declaring as null and void the
is only one (1) of the eight (8) children of the plaintiffs into eight (8) equal shares;
said Deed of Extrajudicial Settlement with
deceased Roman Ebarsabal, and without to get one (1) share thereof, which is the Sale and Memorandum of Agreement,
notifying thereof in whatever manner the only extent of what they allegedly
respondents likewise sought the
acquired by purchase as mentioned
plaintiffs who are the heirs and
following: (1) nullification of the Tax
above, and to transfer, restore or
successors-in-interest of the other coDeclarations subsequently issued in the
owners of the property-in-question; thus, reconvey and deliver to the plaintiffs,
name of petitioner Cebu Jaya Realty,
have compelled the plaintiffs herein to file seven (7) shares thereof, as pertaining to Inc.; (2) partition of the property in
and due for the latter as the heirs and
this instant case in court to protect their
litigation; (3) reconveyance of their
successors-in-interest of the seven (7)
interests, x x x.
respective shares; and (3) payment of
brothers and sister of deceased Gil
moral and exemplary damages, as well
Ebarsabal already named earlier in this
as attorney's fees, plus appearance
xxxx
complaint;
fees.
(b) Memorandum of Agreement
executed between Pedro
Ebarsabal and Genesis
Investment, Inc., represented by
Rhodora Lim dated 27 January,
which document is notarized;

1wphi1

PRAYER
12. Without the participation of the
plaintiffs who are co-owners of the lot in
question in the proceedings, the
aforementioned extrajudicial settlement
with sale cannot be binding upon the
plaintiff-co-owners.

represented by Rhodora Lim,


dated 28th of January, 1997,
marked as Annex-A;

WHEREFORE, in view of all the


foregoing, it is most respectfully prayed
of this Honorable Court that, after due
notice and hearing, judgment shall be
rendered in favor of the plaintiffs, as
follows, to wit:

xxxx
Further reliefs and remedies just and
equitable in the premises are also herein
prayed for.
xxxx

14

It is true that one of the causes of action


of respondents pertains to the title,
possession and interest of each of the
contending parties over the contested
property, the assessed value of which
(a) Deed of Extrajudicial
falls within the jurisdiction of the MTC.
Settlement with Sale executed
However, a complete reading of the
by and between the heirs of
complaint would readily show that, based
deceased Gil Ebarsabal headed on the nature of the suit, the allegations
by Pedro Ebarsabal, and
therein, and the reliefs prayed for, the
Genesis Investment, Inc.,

1 Declaring as null and void and not


binding upon the plaintiffs, the following
documents to wit:

Clearly, this is a case of joinder of causes


of action which comprehends more than
the issue of partition of or recovery of
shares or interest over the real property
in question but includes an action for
declaration of nullity of contracts and
documents which is incapable of
pecuniary estimation.
15

As cited by the CA, this Court, in the case


of Singson v. Isabela Sawmill, held that:
16

In determining whether an action is one


the subject matter of which is not capable
of pecuniary estimation, this Court has
adopted the criterion of first ascertaining
the nature of the principal action or
remedy sought. If it is primarily for the

recovery of a sum of money, the claim is


considered capable of pecuniary
estimation, and whether jurisdiction is in
the municipal courts or in the courts of
first instance would depend on the
amount of the claim. However, where the
basic issue is something other than the
right to recover a sum of money, 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 by courts
of first instance [now Regional Trial
Courts].

the same parties but pertain to different


venues or jurisdictions, the joinder may
be allowed in the RTC provided one of
the causes of action falls within the
jurisdiction of said court and the venue
lies therein. Thus, as shown above,
respondents complaint clearly falls within
the jurisdiction of the RTC.
WHEREFORE, the petition is DENIED.
The Decision and Resolution dated July
11, 2007 and January 10, 2008,
respectively, of the Court of Appeals in
CA-G.R. CEB-SP No. 01017 are
AFFIRMED.

17

This rule was reiterated in Russell v.


Vestil and Social Security System v.
Atlantic Gulf and Pacific Company of
Manila Inc.

SO ORDERED.

18

19

Contrary to petitioners contention, the


principal relief sought by petitioners is the
nullification of the subject Extrajudicial
Settlement with Sale entered into by and
between some of their co-heirs and
respondents, insofar as their individual
shares in the subject property are
concerned. Thus, the recovery of their
undivided shares or interest over the
disputed lot, which were included in the
sale, simply becomes a necessary
consequence if the above deed is
nullified. Hence, since the principal action
sought in respondents Complaint is
something other than the recovery of a
sum of money, the action is incapable of
pecuniary estimation and, thus,
cognizable by the RTC. Well entrenched
is the rule that jurisdiction over the
subject matter of a case is conferred by
law and is determined by the allegations
in the complaint and the character of the
relief sought, irrespective of whether the
party is entitled to all or some of the
claims asserted.
20

21

Moreover, it is provided under Section 5


(c), Rule 2 of the Rules of Court that
where the causes of action are between

5. Gomez v. Montalban (March 14,


2008)
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 174414
2008

March 14,

herein petitioner Elmer F. Gomezs


Motion for Reconsideration thereof .

1. P40,000.00 representing the


principal amount of the loan;

On 30 May 2003, petitioner filed a


Complaint3 with the RTC for a sum of
money, damages and payment of
attorneys fees against respondent,
docketed as Civil Case No. 29,717-03.
The Complaint alleged, among other
things, that: on or about 26 August 1998,
respondent obtained a loan from
petitioner in the sum of P40,000.00 with a
voluntary proposal on her part to pay
15% interest per month; upon receipt of
the proceeds of the loan, respondent
issued in favor of petitioner, as security,
Capitol Bank Check No. 0215632,
postdated 26 October 1998, in the sum
of P46,000.00, covering the P40,000.00
principal loan amount and P6,000.00
interest charges for one month; when the
check became due, respondent failed to
pay the loan despite several demands;
thus, petitioner filed the Complaint
praying for the payment of P238,000.00,
representing the principal loan and
interest charges, plus 25% of the amount
to be awarded as attorneys fees, as well
as the cost of suit.

2. P57,600.00 representing
interest at the rate of 24% per
annum reckoned from August
26, 1998 until the present; and

Summons was served, but despite her


receipt thereof, respondent failed to file
her Answer. Consequently, she was
ELMER F. GOMEZ, Petitioner,
declared4 in default and upon motion,
vs.
petitioner was allowed to present
MA. LITA A. MONTALBAN, Respondent.
evidence ex parte.
DECISION
CHICO-NAZARIO, J.:
This Petition for Review on Certiorari
seeks to reverse (1) the Order1 dated 20
June 2006 of the Regional Trial Court
(RTC) of Davao City, Branch 13, which
granted herein respondent Ma. Lita A.
Montalbans Petition for Relief from
Judgment and dismissed Civil Case No.
29,717-03 for lack of jurisdiction; and (2)
the Order2 dated 2 August 2006 denying

3. P15,000.00 representing
attorneys fees.
On 28 May 2004, respondent filed a
Petition for Relief from
Judgment6 alleging that there was no
effective service of summons upon her
since there was no personal service of
the same. The summons was received by
one Mrs. Alicia dela Torre, who was not
authorized to receive summons or other
legal pleadings or documents on
respondents behalf. Respondent
attributes her failure to file an Answer to
fraud, accident, mistake or excusable
negligence. She claimed that she had
good and valid defenses against
petitioner and that the RTC had no
jurisdiction as the principal amount being
claimed by petitioner was
only P40,000.00, an amount falling within
the jurisdiction of the Municipal Trial
Court (MTC).
After petitioner filed his Answer7 to the
Petition for Relief from Judgment and
respondent her Reply,8 the said Petition
was set for hearing.

After considering the evidence presented


After several dates were set and called
by petitioner, the RTC rendered a
Decision5 on 4 May 2004 in his favor, the for hearing, respondent, thru counsel,
failed to appear despite being duly
fallo of which reads:
notified; hence, her Petition for Relief was
dismissed9 for her apparent lack of
WHEREFORE, IN VIEW OF THE
interest to pursue the petition.
FOREGOING, the Court hereby decides
this case in favor of [herein petitioner]
and against [herein respondent], ordering Respondent filed a Motion for
Reconsideration10 of the dismissal of her
[respondent] to pay [petitioner] the
Petition for Relief, stating that her
following amounts:
counsels failure to appear was not
intentional, but due to human

shortcomings or frailties, constituting


honest mistake or excusable negligence.
On 18 November 2005, the RTC
granted11 respondents motion for
reconsideration, to wit:

damages and attorneys fees


where the principal amount of
the obligation is P40,000.00 but
the amount of the demand per
allegation of the complaint
is P238,000.00;

2. Whether or not respondents


In regard to the motion for
relief from judgment is proper
reconsideration file by [herein
during the period for filing a
respondent] of the order of the court
motion for reconsideration and
dismissing her petition for relief from
appeal.
judgment, the court, in the interest of
justice, shall give [respondent] one more
chance to present the merits of her
Before the Court dwells on the principal
position in a hearing. The dismissal of the issues, a few procedural matters must
petition is therefore reconsidered and set first be resolved.
aside.

resolution of the issue must rest solely on


what the law provides on the given set of
circumstances. Once it is clear that the
issue invites a review of the evidence
presented, the question posed is one of
fact. If the query requires a re-evaluation
of the credibility of witnesses, or the
existence or relevance of surrounding
circumstances and their relation to each
other, the issue in that query is factual.17

The first issue raised in the present


petition is one of jurisdiction of the court
over the subject matter - meaning, the
nature of the cause of action and of the
relief sought. Jurisdiction is the right to
act or the power and authority to hear
and determine a cause. It is a question of
Section 2(c), Rule 41 of the Rules of
law.18 The second issue refers to the
On 20 June 2006, the RTC granted
Court categorically provides that in all
aptness of the grant of a Petition for
respondents Petition for Relief from
cases where only questions of law are
Relief from Judgment. These questions
Judgment and set aside its Decision
raised, the appeal from a decision or
are undoubtedly one of law, as they
dated 4 May 2004 on the ground of lack
order of the RTC shall be to the Supreme concern the correct interpretation or
of jurisdiction. The fallo of the assailed
Court by petition for review oncertiorari in application of relevant laws and rules,
RTC Order reads:
accordance with Rule 45.15
without the need for review of the
evidences presented before the court a
WHEREFORE, the petition for relief is
The distinction between questions of law quo.
hereby GRANTED. The decision of this
and questions of fact has long been
court dated May 4, 2004 is
settled. A question of law exists when the Thus, with only questions of law raised in
RECONSIDERED and set aside for lack doubt or controversy concerns the
this Petition, direct resort to this Court is
of jurisdiction on the part of the court,
correct application of law or
proper.19
without prejudice to the case being refiled jurisprudence to a certain set of facts; or
in the proper Municipal Trial Courts.12
when the issue does not call for an
The Court shall now discuss whether the
examination of probative value of the
RTC has jurisdiction over Civil Case No.
evidence presented, the truth or
Petitioner filed a motion for
29,717-03.
falsehood
of
facts
being
admitted.
A
reconsideration of the afore-quoted
question of fact exists when the doubt or
Order, but the same was denied by the
difference arises as to the truth or
Petitioners Complaint before the RTC
RTC in another Order13 dated 2 August
falsehood
of
facts
or
when
the
query
reads:
2006.
invites calibration of the whole evidence
considering mainly the credibility of
3. On or about August 26, 1998,
Hence, the present Petition filed directly
witnesses, the existence and relevancy
[herein respondent] obtained
before this Court.
of specific surrounding circumstances, as
from the [herein petitioner] a
well as their relation to each other and to
loan for the principal sum of
the whole, and the probability of the
In his Memorandum,14 petitioner raises
FORTY THOUSAND PESOS
16
situation.
the following issues for the Courts
(P40,000.00) with a voluntary
consideration:
proposal on her part to pay as
Simple as it may seem, determining the
much as 15% interest per
true nature and extent of the distinction is
month. Machine copy of Cash
1. Whether or not the Regional
Voucher dated August 26, 1998
Trial Court has jurisdiction over sometimes complicated. In a case
involving a "question of law," the
this case for sum of money,
1avvphi1

is herewith attached as Annex


"A".
4. Upon receipt of the proceeds
of the said loan, [respondent]
issued in favor of the Plaintiff
Capitol Bank Check with check
nos. 0215632 postdated on
October 26, 1998 for the sum of
Forty Six Thousand Pesos
(P46,000.00) as security on the
loan with P6,000.00 as the first
month of interest charges. When
the check became due,
[respondent] defaulted to pay
her loan despite several
allowances of time and repeated
verbal demands from the
[petitioner]. The said check was
later on dishonored for the
reason: "Account Closed".
Machine copy of Capitol Bank
Check wit nos. 0215632 is
herewith attached as Annex "B".
5. On July 4, 2002, [petitioner]
engaged the services of the
undersigned counsel to collect
the account of the [respondent];
thus, on the same day, a
demand letter was sent to and
received by her on July 9, 2002.
And despite receipt thereof, she
failed and continues to evade
the payment of her obligations
to the damage and prejudice of
the [petitioner]. Thus, as of July
4, 2002, [respondent]s loan
obligation stood at TWO
HUNDRED THIRTY EIGHT
THOUSAND PESOS
(P 239,000.00), inclusive of
interest charges for 32 months.
Machine copy of Demand Letter
and its registry receipt and
return card is herewith attached
as Annexes "C"; "C-1" and C-2",
respectively.
6. In view of [respondent]s
refusal to pay her loan,

[petitioner] is constrained to
engage the services of counsel
to initiate the instant action for a
fee of 25% for whatever
amounts is collected as flat
attorneys fee. [Petitioner] will
likewise incur damages in the
form of docket fees.
PRAYER
WHERFORE, it is respectfully prayed of
the Honorable Court that Decision be
rendered ordering the [respondent] to
pay [petitioner] as follows:

determinable at the time of filing of the


Complaint, it must be included in the
determination of which court has the
jurisdiction over petitioners case. Using
as basis the P238,000.00 amount being
claimed by petitioner from respondent for
payment of the principal loan and
interest, this Court finds that it is well
within the jurisdictional amount fixed by
law for RTCs. 22
There can be no doubt that the RTC in
this case has jurisdiction to entertain, try,
and decide the petitioners Complaint.

To this Court, it is irrelevant that during


the course of the trial, it was proven that
1. The amount of P238,000.00
respondent is only liable to petitioner for
with interest charges at the
the amount of P40,000.00 representing
sound discretion of the
Honorable Court starting on July the principal amount of the
loan; P57,000.00 as interest thereon at
4, 2002 until paid in full;
the rate of 24% per annum reckoned
from 26 August 1998 until the present;
2. The sum equivalent to 25 %
and P15,000.00 as attorneys fees.
of the amount awarded as
Contrary to respondents contention,
attorneys fee;
jurisdiction can neither be made to
depend on the amount ultimately
substantiated in the course of the trial or
3. Cost of suit;
proceedings nor be affected by proof
showing that the claimant is entitled to
4. Other relief that the
recover a sum in excess of the
Honorable Court may find just
jurisdictional amount fixed by law.
and equitable under the
Jurisdiction is determined by the cause of
premises are likewise prayed
action as alleged in the complaint and not
20
for. [Emphasis ours.]
by the amount ultimately substantiated
and awarded.23
The Court gleans from the foregoing that
petitioners cause of action is the
Basic as a hornbook principle is that
respondents violation of their loan
jurisdiction over the subject matter of a
21
agreement. In that loan agreement,
case is conferred by law and determined
respondent expressly agreed to pay the
by the allegations in the complaint which
principal amount of the loan, plus 15%
monthly interest. Consequently, petitioner comprise a concise statement of the
ultimate facts constituting the plaintiffs
is claiming and praying for in his
cause of action.24 The nature of an action,
Complaint the total amount
as well as which court or body has
ofP238,000.00, already inclusive of the
jurisdiction over it, is determined based
interest on the loan which had accrued
from 1998. Since the interest on the loan on the allegations contained in the
is a primary and inseparable component complaint of the plaintiff, irrespective of
whether or not the plaintiff is entitled to
of the cause of action, not merely
recover upon all or some of the claims
incidental thereto, and already
asserted therein.25 The averments in the

complaint and the character of the relief


sought are the ones to be
consulted.26 Once vested by the
allegations in the complaint, jurisdiction
also remains vested irrespective of
whether or not the plaintiff is entitled to
recover upon all or some of the claims
asserted therein.27
On the propriety of the granting by the
RTC of respondents Petition for Relief
from Judgment, the Court finds and so
declares that the RTC did indeed commit
an error in doing so.
First of all, a petition for relief under Rule
38 of the Rules of Court is only available
against a final and executory
judgment.28 Since respondent
allegedly29 received a copy of the
Decision dated 4 May 2004 on 14 May
2004, and she filed the Petition for Relief
from Judgment on 28 May 2004,
judgment had not attained finality. The
15-day period to file a motion for
reconsideration or appeal had not yet
lapsed. Hence, resort by respondent to a
petition for relief from judgment under
Rule 38 of the Rules of Court was
premature and inappropriate.
Second, based on respondents
allegations in her Petition for Relief
before the RTC, she had no cause of
action for relief from judgment.
Section 1 of Rule 38 provides:
SECTION 1. Petition for relief from
judgment, order, or other proceedings.
When a judgment or final order is
entered, or any other proceeding is
thereafter taken against a party in any
court through fraud, accident, mistake, or
excusable negligence, he may file a
petition in such court and in the same
case praying that the judgment, order or
proceeding be set aside.

Under Section 1, Rule 38 of the Rules of


Court, the court may grant relief from
judgment only "[w]hen a judgment or final
order is entered, or any other proceeding
is taken against a party in any court
through fraud, accident, mistake, or
excusable negligence x x x."
In her Petition for Relief from Judgment
before the RTC, respondent contended
that judgment was entered against her
through "mistake or fraud," because she
was not duly served with summons as it
was received by a Mrs. Alicia dela Torre
who was not authorized to receive
summons or other legal processes on her
behalf.
As used in Section 1, Rule 38 of the
Rules of Court, "mistake" refers to
mistake of fact, not of law, which relates
to the case.30 The word "mistake," which
grants relief from judgment, does not
apply and was never intended to apply to
a judicial error which the court might have
committed in the trial. Such errors may
be corrected by means of an
appeal.31This does not exist in the case at
bar, because respondent has in no wise
been prevented from interposing an
appeal.
"Fraud," on the other hand, must be
extrinsic or collateral, that is, the kind
which prevented the aggrieved party from
having a trial or presenting his case to
the court,32or was used to procure the
judgment without fair submission of the
controversy.33This is not present in the
case at hand as respondent was not
prevented from securing a fair trial and
was given the opportunity to present her
case.
Negligence to be excusable must be one
which ordinary diligence and prudence
could not have guarded against.34 Under
Section 1, the "negligence" must be
excusable and generally imputable to the
party because if it is imputable to the

counsel, it is binding on the client.35 To


follow a contrary rule and allow a party to
disown his counsels conduct would
render proceedings indefinite, tentative,
and subject to reopening by the mere
subterfuge of replacing counsel. What
the aggrieved litigant should do is seek
administrative sanctions against the
erring counsel and not ask for the
reversal of the courts ruling.36
Third, the certificate of service of the
process server of the court a quo is prima
facie evidence of the facts as set out
therein.37 According to the Sheriffs
Return of Service,38 summons was issued
and served on respondent thru one Mrs.
Alicia dela Torre, thus:

proceedings thereafter held including the


decision, the writ of execution, and the
writ of garnishment issued by the RTC,
on the ground that it acted without
jurisdiction.39 Unfortunately, however,
respondent opted to file a Petition for
Relief from the Judgment of the RTC,
which, as the Court earlier determined,
was the wrong remedy.
In Tuason v. Court of Appeals,40 the Court
explained the nature of a petition for relief
from judgment:

A petition for relief from judgment is an


equitable remedy that is allowed only in
exceptional cases where there is no
other available or adequate
remedy. When a party has another
"THIS IS TO CERTIFY that on June 25,
remedy available to him, which may be
2003 at around 1:45 p.m. the
either a motion for new trial or appeal
undersigned sheriff caused the service of from an adverse decision of the trial
summons issued in the above-entitled
court, and he was not prevented by
case together with attached complaints
fraud, accident, mistake or excusable
and annexes for and in behalf of
negligence from filing such motion or
defendant [respondent] thru a certain
taking such appeal, he cannot avail
Mrs. Alicia Dela Torre inside their
himself of this petition. Indeed, relief
compound at the given address who
will not be granted to a party who seeks
acknowledged receipt by signature and
avoidance from the effects of the
notation of said dela Torre appearing
judgment when the loss of the remedy at
thereof.
law was due to his own
negligence;otherwise the petition for
Wherefore, this summons is respectfully relief can be used to revive the right to
returned to the Honorable Regional Trial appeal which had been lost thru
inexcusable negligence. (Emphasis
Court, Branch 13, Davao City, duly
SERVED for its records and information." and underscoring supplied; citations
omitted)
Finally, even assuming arguendo that the
RTC had no jurisdiction over respondent
on account of the non-service upon her
of the summons and complaint, the
remedy of the respondent was to file a
motion for the reconsideration of the 4
May 2004 Decision by default or a motion
for new trial within 15 days from receipt
of notice thereof. This is also without
prejudice to respondents right to file a
petition for certiorari under Rule 65 of the
Rules of Court for the nullification of the
order of default of the court a quo and the

Complaint, she did not immediately avail


herself of any of the remedies provided
by law. Lina v. Court of
Appeals41 enumerates the remedies
available to a party declared in default:

party in default, if grave abuse of


discretion attended such declaration.42

If respondent is really vigilant in


protecting her rights, she should have
exhausted all the legal remedies abovea) The defendant in default may, mentioned to nullify and set aside the
at any time after discovery
order of default against her, and should
thereof and before judgment, file no longer have waited for the judgment to
a motion, under oath, to set
be rendered. Respondent does not deny
aside the order of default on the that she did receive the summons,
ground that his failure to answer although she alleges that it was not
was due to fraud, accident,
properly served upon her, yet she chose
mistake or excusable
to sit on her rights and did not act
negligence, and that he has a
immediately. For respondents failure to
meritorious defense (Sec. 3,
act with prudence and diligence in
Rule 18 [now Sec. 3(b), Rule
protecting her rights, she cannot now
9]);
elicit this Courts sympathy.
b) If the judgment has already
been rendered when the
defendant discovered the
default, but before the same has
become final and executory, he
may file a motion for new
trial under Section 1 (a) of Rule
37;

Respondents petition for relief from


judgment is clearly without merit and
should not have been granted by the
RTC.

WHEREFORE, the instant petition is


herby GRANTED. Consequently, the
Decision dated 4 May 2006 of the
Regional Trial Court of Davao, Branch
c) If the defendant discovered
13, in Civil Case No. 29,717-03 is hereby
the default after the judgment
REINSTATED and the Order dated 20
has become final and executory, June 2006 granting the petition for relief
he may file a petition for
from judgment is hereby SET ASIDE.
relief under Section 2 [now
Section 1] of Rule 38; and
SO ORDERED.
d) He may also appeal from the
judgment rendered against him
as contrary to the evidence or to
the law, even if no petition to set
aside the order of default has
been presented by him (Sec. 2,
Rule 41). (Emphasis added)

In the case at bar, there being no fraud,


accident, mistake, or excusable
negligence that would have prevented
petitioner from filing either a motion for
reconsideration or a petition for review on
certiorari of the 4 May 2004 Decision of
the RTC, her resort to a Petition for Relief In addition, and as this Court earlier
mentioned, a petition for certiorari to
from Judgment was unwarranted.
declare the nullity of a judgment by
default is also available if the trial court
This Court also notes that when
improperly declared a party in default, or
respondent was declared in default for
even if the trial court properly declared a
her failure to file an Answer to the

6. Tumpag v. Tumpag (September


29, 2014)
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 199133
29, 2014

September

ESPERANZA TUMPAG, substituted by


her son, PABLITO TUMPAG BELNAS,
JR., Petitioner,
vs.
SAMUEL TUMPAG, Respondent.
DECISION
BRION, J.:
We resolve the petition for review on
certiorari assailing the November 30,
2010 decision and the September 28,
2011 resolution of the Court of Appeals
(CA), Cebu City in CA-G.R. CV No.
78155. The CA dismissed, without
prejudice, the complaint for recovery of
possession and damages that the
petitioner filed before the Regional Trial
Court (RTC) because the complaint failed
to allege the assessed value of the
disputed property in the case.
1

THOUSAND NINE HUNDRED


NINETY TWO (12,992)
SQUARE METERS, more or
less, situated in Barangay
Tuyom, Cauayan, Negros
Occidental, more particularly
bounded and described in
Transfer Certificate of Title No.
T-70184, dated April 27, 1983,
issued by the Register of Deeds
of Negros Occidental in favor of
Plaintiff, xerox copy of which is
hereto attached as ANNEX "A"
and made an integral part
hereof;
3) Defendant has been
occupying a portion of not less
than ONE THOUSAND (1,000)
SQUARE METERS ofthe
above-described parcel of land
of the Plaintiff for more than
TEN (10) years, at the tolerance
of Plaintiff;

Brief Statement of Facts


On March 13, 1995, Esperanza Tumpag
(petitioner) filed a complaint for recovery
of possession with damages (docketed
as Civil Case No. 666) against Samuel
Tumpag (respondent) before the RTC,
Branch 61, Kabankalan City, Negros
Occidental. The complaint alleged that:
1) Plaintiff (referring to the
petitioner) is of legal age, widow,
Filipino citizen and a resident of
Barangay Tuyom, Cauayan,
Negros Occidental, while
Defendant (referring to the
respondent) is also of legal age,
married, Filipino and a
residentof Barangay Tuyom,
Cauayan, Negros Occidental,
where he maybe served with
summons and other processes
of this Honorable Court; 2)
Plaintiff is the absolute owner of
a parcel of land, identified as Lot
No. 1880-A, Cauayan Cadastre,
containing an area of TWELVE

4) Sometime in 1987, Plaintiff


wanted to recover the portion
occupied by Defendant but
Defendant refused to return to
Plaintiff or vacate said portion
he has occupied inspite of
repeated demands from Plaintiff.
And, to prevent Plaintiff from
recovering the portion he has
occupied, Defendant instigated
his other relatives to file a case
against the herein Plaintiff, and,
in1988, herein Defendant
Samuel Tumpag, together with
Luz Tagle Vda. De Tumpag and
other relatives, filed a civil case,
number 400, before this court
against herein Plaintiff,
Esperanza Tumpag, for
cancellation of her title with
damages;
5) Said Civil Case No. 400 was
dismissed by this Honorable
Court through its Resolution,
dated October 11, 1989, penned

by the Presiding Judge, the late


Artemio L. Balinas, prompting
the Plaintiffs in said case to
elevate the said resolution of
thisHonorable Court to the Court
of Appeals, and their appeal is
identified as C.A. G.R. No. CV25699;
6) On June 28, 1991, the Court
of Appeals rendered a decision
in the said appealed case, the
dispositive portion of which
read:
"PREMISES CONSIDERED, the
appealed Resolution dated
October 11, 1989 is hereby
AFFIRMED."
and, that the same has become
final on March 11, 1994 and was
entered, on August 26, 1994, in
the Book of Entries of
Judgment, xerox copy of said
Entry of Judgment of the Court
of Appeals is hereto attached as
ANNEX "B" and made part
hereof;
7) Herein Plaintiff needs the
portion occupied by Defendant
and she has orally demanded
from Defendant of the return of
the same, but Defendant
refused and still refuses todo so.
Hence, Plaintiff brought the
matter before the Office of the
Barangay Captain of Barangay
Tuyom, Cauayan, Negros
Occidental, for conciliation, on
March 3, 1995. But,
unfortunately, Defendant
refused to vacate or return the
portion he occupies to Plaintiff.
Attached hereto as ANNEX "C,"
and made part hereof, is the
Certification of the Barangay
Captain of Barangay Tuyom,
Cauayan, Negros Occidental,

certifying that this matter was


brought to his attention for
conciliation;
8) Defendants refusal to return
the portion he occupies to
Plaintiff has caused Plaintiff to
suffer actual damages in the
amount of not less than TEN
THOUSAND PESOS
(P10,000.00), per annum;
9) Defendants unjustifiable
refusal to return the portion he
occupies to Plaintiff has caused
Plaintiff to suffer mental
anguish, embarrassment, untold
worries, sleepless nights, fright
and similar injuries, entitling her
to moral damages moderately
assessed at not less than FIFTY
THOUSAND PESOS
(P50,000.00);
10) To serve as deterrent (sic)
toother persons similarly
inclined and by way of example
for the public good, Defendant
should be made to pay
exemplary damages in the
amountof not less than
TWENTY FIVE THOUSAND
PESOS (P25,000.00);
11) The unjustifiable refusal of
Defendant to return the property
to the Plaintiff leaves Plaintiff no
other alternative but to file this
present action, forcing her to
incur litigation expenses
amounting to not less than ONE
THOUSAND PESOS
(P1,000.00), attorneys fees in
the amount of TWENTY
THOUSAND PESOS
(P20,000.00) plus ONE
THOUSAND PESOS
(P1,000.00) for every court
appearance.
4

xxxx

in its resolution dated September 28,


2011. The CAs ruling and denial of the
Together with his answer (which was later motion for reconsideration gave rise to
the present petition for review on
amended), the respondent moved to
certiorari filed with this Court.
dismiss the complaint on the following
grounds: failure to state a cause of
action; that the action was barred by prior The petitioner now argues that the
judgment; and lack of jurisdiction.
respondent, after having actively
participated in all stages of the
proceedings in Civil Case No. 666, is
The RTC, in an order dated January 16,
1996, denied the respondents motion to now estopped from assailing the RTCs
dismiss and proceeded with pre-trial and jurisdiction; that the subject case had
been litigated before the RTC for more
trial.
than seven (7) years and was pending
before the CA for almost eight (8) years.
During the pendency of the case, the
Further, she argues that the dismissal of
petitioner died and was substituted by
her complaint was not warranted
her son Pablito Tumpag Belnas, Jr.
considering that she had a meritorious
case as attached to her complaint was a
copy of a Declaration of Real Property
In a decision dated June 3, 2002, the
indicating that the assessed value of the
RTC ordered the respondent to return
disputed property is P20,790.00.
possession of the subject portion of the
property to the petitioner and to pay the
petitioner P10,000.00 as actual
Our Ruling
damages, P20,000.00 as moral
damages, and P10,000.00 as attorneys
We find MERIT in the present petition.
fees.
The CAs dismissal of the petitioners
complaint for recoveryof possession
In his appeal to the CA, among the
iserroneous and unwarranted.
grounds the respondent raised was the
issue of the RTCs lack of jurisdiction
It is well-settled that jurisdiction over a
over the case.
subject matter is conferred by law, not by
the parties action or conduct, and is,
In its assailed decision, the CA agreed
likewise, determined from the allegations
with the respondent and nullified the
in the complaint. Under Batas
RTCs June 3, 2002 decision and all
Pambansa Blg. 129, as amended by
proceedings before the trial court. It held Republic Act No. 7691, the jurisdiction of
that the petitioners failure to allege in her Regional Trial Courts over civil actions
complaint the assessed value of the
involving title to, or possession of, real
disputed property warranted the
property, orany interest therein, is limited
complaints dismissal, although without
to cases where the assessed value of the
prejudice, because the courts jurisdiction property involved exceeds Twenty
over the case should be "determined by
thousand pesos (P20,000.00) or, for civil
the material allegations of the
actions in Metro Manila, where such
complaint" and "cannot be made to
value exceeds Fifty thousand pesos
depend upon the defenses set up in court (P50,000.00), except actions for forcible
or upon a motion to dismiss for,
entry into and unlawful detainer of lands
otherwise, the question of jurisdiction
or buildings.
would depend almost entirely on the
defendant." The petitioner moved to
reconsider but the CA denied her motion
13

14

10

15

16

17

11

18

12

Here, the petitioner filed a complaint for


recovery of possession of real property
before the RTC but failed to allege in her
complaint the propertys assessed value.
Attached, however, to the petitioners
complaint was a copy of a Declaration of
Real Property showing that the subject
property has a market value
of P51,965.00 and assessed value
of P20,790.00. The CA was fully aware
ofthis attachment but still proceeded to
dismiss the petitioners complaint:

Property attachedto the complaint in


determining whether the RTC had
jurisdiction over the petitioners case. A
mere reference to the attached document
could faciallyresolve the question on
jurisdiction and would have rendered
lengthy litigation on this point
unnecessary.

In his comment to the present petition,


the respondent contends that the
assessed value of the property subjectof
the case is actually much below than the
Record shows that the complaint was
value stated in the attached Declaration
filed with the Regional Trial Court on
of Real Property. However, the test of the
December 13, 1995. There is no
sufficiency of the facts alleged in the
allegation whatsoever in the complaint for complaint is whether, admitting the facts
accion publiciana concerning the
alleged, the court can render a valid
assessed value of the property involved. judgment upon the complaint in
Attached however to the complaint is a
accordance withthe plaintiffs
copy of the Declaration of Real Property prayer. The defendant, in filing a motion
of subject land which was signed by the
to dismiss, hypothetically admits the truth
owner stating that its market
of the factual and material allegations in
valueis P51,965 and its assessed value
the complaint, as well as the documents
is P20,790.00.(Emphasis ours)
attached to a complaint whose due
execution and genuineness are not
Generally, the court should only look into denied under oath by the defendant;
these attachments mustbe considered as
the facts alleged in the complaint to
part of the complaint without need of
determine whether a suit is within its
introducing evidence thereon.
jurisdiction. There may be instances,
however, when a rigid application of this
rule may result in defeating substantial
Lastly, we note that the present
justice or in prejudice to a partys
petitioner's situation comes close with
substantial right. In Marcopper Mining
those of the respondents in Honorio
Corp. v. Garcia, we allowed the RTC to
Bernardo v. Heirs of Eusebio
consider, in addition to the complaint,
Villegas, where the Villegas heirs, in
other pleadings submitted by the parties filing their complaint for accion publiciana
in deciding whether or not the complaint before the RTC, failed to allege the
should be dismissed for lack of cause of assessed value of the subject property.
action. In Guaranteed Homes, Inc. v.
On the complaints omission, the
Heirs of Valdez, et al., we held that the
defendant questioned the RTCs
factual allegations in a complaint should jurisdiction in his answer to the complaint
be considered in tandem with the
and, again, in his appeal before the CA.
statements and inscriptions on the
documents attached to it as annexes or
In Bernardo v. Heirs of Villegas, we
integral parts.
affirmed the CA ruling that upheld the
24

25

26

19

27

20

21

22

28

23

29

In the present case, we find reason not to


strictly apply the abovementioned
general rule, and to consider the facts
contained in the Declaration of Real

RTCs jurisdiction over the case despite


the complaints failure to allege the
assessed value of the property because
the defendant-petitioner was found to
have actively participatedin the

proceedings before the trial court and


SO ORDERED.
was already estopped from assailing the
jurisdiction of the RTC. While we mention
7. Lu v. Lu Ym (February 15, 2011)
this case and its result, we cannot,
however, apply the principle of estoppel
(on the question of jurisdiction)to the
Republic of the Philippines
present respondent.
SUPREME COURT
Manila
We rule that the respondent is
notestopped from assailing the RTCs
EN BANC
jurisdiction over the subject civil
case. Records show that the respondent
G.R. No. 153690
February 15,
has consistently brought the issue of the
2011
court's lack of jurisdiction in his motions,
pleadings and submissions throughout
DAVID LU, Petitioner,
the proceedings, until the CA dismissed
vs.
the petitioner's complaint, not on the
PATERNO LU YM, SR., PATERNO LU
basis of a finding of lack of jurisdiction,
YM, JR., VICTOR LU YM, JOHN LU YM,
but due to the insufficiency of the
petitioner's complaint, i.e. failure to allege KELLY LU YM, and LUDO & LUYM
DEVELOPMENT
the assessed value of the subject
CORPORATION, Respondents.
property. Even in his comment filed
before this Court, the respondent
maintains that the RTC has no
x - - - - - - - - - - - - - - - - - - - - - - -x
jurisdiction over the subject matter of the
case.
G.R. No. 157381
1wphi1

Lack of jurisdiction over the subject


matter of the case can always be raised
anytime, even for the first time on
appeal, since jurisdictional issues, as a
rule, cannot be acquired through a waiver
or enlarged by the omission of the parties
or conferred by the acquiescence of the
court. Thus, the respondent is not
prevented from raising the question on
the court's jurisdiction in his appeal, if
any, to the June 3, 2002 decision of the
RTC in Civil Case No. 666.
WHEREFORE, premised considered, we
GRANT the present petition for review on
certiorari and SET ASIDE the decision
dated November 30, 2010 and resolution
dated September 28, 2011 of the Court of
Appeals, Cebu City in CA-G.R. CV No.
78155.
30

31

Accordingly, we REINSTATE the decision


dated June 3, 2002 of the Regional Trial
Court, Branch 61, Kabankalan City,
Negros Occidental in Civil Case No. 666.

RESOLUTION

Court En Banc was denied by minute


Resolution of September 23, 2009.

CARPIO MORALES, J.:


Following his receipt on October 19, 2009
of the minute Resolution, David Lu
By Decision of August 26, 2008, the
Court1 unanimously disposed of the three personally filed on October 30, 2009 a
Second Motion for Reconsideration and
present petitions as follows:
Motion to Refer Resolution to the
Court En Banc. On even date, he filed
WHEREFORE, premises considered, the through registered mail an
petitions in G.R. Nos. 153690 and
"Amended Second Motion for
157381 are DENIED for being moot and Reconsideration and Motion to Refer
academic; while the petition in G.R. No.
Resolution to the Court En Banc." And on
170889 is DISMISSED for lack of merit.
November 3, 2009, he filed a "Motion for
Consequently, the Status Quo Order
Leave to File [a] Motion for Clarification[,
dated January 23, 2006 is hereby
and the] Second Motion for
LIFTED.
Reconsideration and Motion to Refer
Resolution to the Court En Banc." He
later also filed a "Supplement to Second
The Court of Appeals is DIRECTED to
proceed with CA-G.R. CV No. 81163 and Motion for Reconsideration with Motion to
Dismiss" dated January 6, 2010.
to resolve the same with dispatch.
SO ORDERED[,]2

which Decision was, on motion for


reconsideration, the Court voting 41,3 reversed by Resolution of August 4,
2009, the dispositive portion of which
PATERNO LU YM, SR., PATERNO LU
YM, JR., VICTOR LU YM, JOHN LU YM, reads:
KELLY LU YM, and LUDO & LUYM
DEVELOPMENT
WHEREFORE, in view of the foregoing,
CORPORATION, Petitioners,
the Motion for Reconsideration filed by
vs.
John Lu Ym and Ludo & LuYm
DAVID LU, Respondent.
Development Corporation is GRANTED.
The Decision of this Court dated August
26, 2008 is RECONSIDERED and SET
x - - - - - - - - - - - - - - - - - - - - - - -x
ASIDE. The Complaint in SRC Case No.
021-CEB, now on appeal with the Court
G.R. No. 170889
of Appeals in CA-G.R. CV No. 81163, is
DISMISSED.
JOHN LU YM and LUDO & LUYM
DEVELOPMENT
All interlocutory matters challenged in
CORPORATION, Petitioners,
these consolidated petitions are DENIED
vs.
for being moot and academic.
THE HONORABLE COURT OF
APPEALS OF CEBU CITY (FORMER
SO ORDERED.4
TWENTIETH DIVISION), DAVID LU,
ROSA GO, SILVANO LUDO & CL
CORPORATION, Respondents.
David Lus Motion for Reconsideration
and Motion to Refer Resolution to the

John Lu Ym and Ludo & Luym


Development Corporation (LLDC),
meanwhile, filed with leave a Motion5 for
the Issuance of an Entry of Judgment of
February 2, 2010, which merited an
Opposition from David Lu.
In compliance with the Courts Resolution
of January 11, 2010, Kelly Lu Ym, Victor
Lu Ym and Paterno Lu Ym, Jr. filed a
Comment/Opposition of March 20, 2010,
while John Lu Ym and LLDC filed a
Consolidated Comment of March 25,
2010, a Supplement thereto of April 20,
2010, and a Manifestation of May 24,
2010.
The present cases were later referred to
the Court en banc by Resolution of
October 20, 2010.
Brief Statement of the Antecedents
The three consolidated cases stemmed
from the complaint for "Declaration of
Nullity of Share Issue, Receivership and
Dissolution" filed on August 14, 2000
before the Regional Trial Court (RTC) of

Cebu City by David Lu, et al.against


Paterno Lu Ym, Sr. and sons (Lu Ym
father and sons) and LLDC.
By Decision of March 1, 2004, Branch 12
of the RTC ruled in favor of David et
al. by annulling the issuance of the
shares of stock subscribed and paid by
Lu Ym father and sons at less than par
value, and ordering the dissolution and
asset liquidation of LLDC. The appeal of
the trial courts Decision remains pending
with the appellate court inCA-G.R. CV
No. 81163.
Several incidents arising from the
complaint reached the Court through the
present three petitions.
In G.R. No. 153690 wherein David, et
al. assailed the appellate courts
resolutions dismissing their complaint for
its incomplete signatory in the certificate
of non-forum shopping and consequently
annulling the placing of the subject
corporation under receivership pendente
lite, the Court, by Decision of August 26,
2008, found the issue to have been
mooted by the admission by the trial
court of David et al.s Amended
Complaint, filed by them pursuant to the
trial courts order to conform to the
requirements of the Interim Rules of
Procedure Governing Intra-Corporate
Controversies.
Since an amended pleading supersedes
the pleading that it amends, the original
complaint of David, et al. was deemed
withdrawn from the records.
The Court noted in G.R. No. 153690
that both parties admitted the
mootness of the issue and that the trial
court had already rendered a decision on
the merits of the case. It added that the
Amended Complaint stands since Lu Ym
father and sons availed of an improper
mode (via an Urgent Motion filed with this

Court) to assail the admission of the


Amended Complaint.
In G.R. No. 157381 wherein Lu Ym father
and sons challenged the appellate courts
resolution restraining the trial court from
proceeding with their motion to lift the
receivership order which was filed during
the pendency of G.R. No. 153690, the
Court, by Decision of August 26, 2008
resolved that the issue was mooted by
the amendment of the complaint and by
the trial courts decision on the merits.
The motion having been filed ancillary to
the main action, which main action was
already decided on the merits by the trial
court, the Court held that there was
nothing more to enjoin.
G.R. No. 170889 involved the denial by
the appellate court of Lu Ym father and
sons application in CA-G.R. CV No.
81163 for a writ of preliminary injunction.
By August 26, 2008 Decision, the Court
dismissed the petition after finding no
merit on their argument which they
raised for the first time in their motion for
reconsideration before the appellate
court of lack of jurisdiction for nonpayment of the correct RTC docket fees.
As reflected early on, the Court, in a
turnaround, by Resolution of August 4,
2009, reconsidered its position on the
matter of docket fees. It ruled that the
trial court did not acquire jurisdiction over
the case for David Lu, et al.s failure to
pay the correct docket fees, hence, all
interlocutory matters and incidents
subject of the present petitions must
consequently be denied.
Taking Cognizance of the Present
Incidents
The Internal Rules of the Supreme Court
(IRSC) states that the Court en
banc shall act on the following matters
and cases:

(a) cases in which the


constitutionality or validity of any
treaty, international or executive
agreement, law, executive order,
presidential decree,
proclamation, order, instruction,
ordinance, or regulation is in
question;

Presiding Justice, or any


Associate Justice of the collegial
appellate court;

(b) criminal cases in which the


appealed decision imposes the
death penalty or reclusion
perpetua;

(j) cases involving conflicting


decisions of two or more
divisions;

(c) cases raising novel


questions of law;
(d) cases affecting
ambassadors, other public
ministers, and consuls;
(e) cases involving decisions,
resolutions, and orders of the
Civil Service Commission, the
Commission on Elections, and
the Commission on Audit;
(f) cases where the penalty
recommended or imposed is the
dismissal of a judge, the
disbarment of a lawyer, the
suspension of any of them for a
period of more than one year, or
a fine exceeding forty thousand
pesos;
(g) cases covered by the
preceding paragraph and
involving the reinstatement in
the judiciary of a dismissed
judge, the reinstatement of a
lawyer in the roll of attorneys, or
the lifting of a judges
suspension or a lawyers
suspension from the practice of
law;

(i) cases where a doctrine or


principle laid down by the
Court en banc or by a Division
my be modified or reversed;

(k) cases where three votes in a


Division cannot be obtained;
(l) Division cases where the
subject matter has a huge
financial impact on businesses
or affects the welfare of a
community;
(m) Subject to Section 11 (b) of
this rule, other division cases
that, in the opinion of at least
three Members of the Division
who are voting and present, are
appropriate for transfer to the
Court en banc;
(n) cases that the Court en
banc deems of sufficient
importance to merit its attention;
and
(o) all matters involving policy
decisions in the administrative
supervision of all courts and
their personnel.6(underscoring
supplied)

The enumeration is an amalgamation of


SC Circular No. 2-89 (February 7, 1989),
as amended by En Banc Resolution of
November 18, 1993, and the
amplifications introduced by Resolution of
January 18, 2000 in A.M. No. 99-12-08(h) cases involving the discipline SC with respect to administrative cases
of a Member of the Court, or a
and matters.

The present cases fall under at least


three types of cases for consideration by
the Court En Banc. At least three
members of the Courts Second Division
(to which the present cases were
transferred,7 they being assigned to a
Member thereof) found, by Resolution of
October 20, 2010, that the cases were
appropriate for referral-transfer to the
Court En Banc which subsequently
accepted8 the referral in view of the
sufficiently important reason to resolve all
doubts on the validity of the challenged
resolutions as they appear to modify or
reverse doctrines or principles of law.
In Firestone Ceramics v. Court of
Appeals,9 the Court treated the
consolidated cases as En Banc cases
and set the therein petitioners motion for
oral argument, after finding that the
cases were of sufficient importance to
merit the Court En Bancs attention. It
ruled that the Courts action is a
legitimate and valid exercise of its
residual power.10
In Limketkai Sons Milling, Inc. v. Court of
Appeals, the Court conceded that it is not
infallible. Should any error of judgment
be perceived, it does not blindly adhere
to such error, and the parties adversely
affected thereby are not precluded from
seeking relief therefrom, by way of a
motion for reconsideration. In this
jurisdiction, rectification of an error, more
than anything else, is of paramount
importance.
xxxx
It bears stressing that where, as in the
present case, the Court En Banc
entertains a case for its resolution and
disposition, it does so without implying
that the Division of origin is incapable of
rendering objective and fair justice. The
action of the Court simply means that the
nature of the cases calls for en banc
attention and consideration. Neither can

it be concluded that the Court has taken


undue advantage of sheer voting
strength. It was merely guided by the
well-studied finding and sustainable
opinion of the majority of its actual
membership that, indeed, subject cases
are of sufficient importance meriting the
action and decision of the whole Court. It
is, of course, beyond cavil that all the
members of this highest Court of the land
are always embued with the noblest of
intentions in interpreting and applying the
germane provisions of law, jurisprudence,
rules and Resolutions of the Court to
the end that public interest be duly
safeguarded and rule of law be
observed.11
It is argued that the assailed Resolutions
in the present cases have already
become final,12 since a second motion for
reconsideration is prohibited except for
extraordinarily persuasive reasons and
only upon express leave first
obtained;13 and that once a judgment
attains finality, it thereby becomes
immutable and unalterable, however
unjust the result of error may appear.
The contention, however, misses an
important point. The doctrine of
immutability of decisions applies only
to final and executory decisions. Since
the present cases may involve a
modification or reversal of a Courtordained doctrine or principle, the
judgment rendered by the Special Third
Division may be considered
unconstitutional, hence, it can never
become final. It finds mooring in the
deliberations of the framers of the
Constitution:

decision would be invalid. Following


up, Father Bernas asked whether the
decision, if not challenged, could become
final and binding at least on the parties.
Romulo answered that, since such a
decision would be in excess of
jurisdiction, the decision on the case
could be reopened
anytime.14 (emphasis and underscoring
supplied)
A decision rendered by a Division of this
Court in violation of this constitutional
provision would be in excess of
jurisdiction and, therefore, invalid.15 Any
entry of judgment may thus be said to be
"inefficacious"16 since the decision is void
for being unconstitutional.
While it is true that the Court en
banc exercises no appellate jurisdiction
over its Divisions, Justice Minerva
Gonzaga-Reyes opined in Firestone and
concededly recognized that "[t]he only
constraint is that any doctrine or principle
of law laid down by the Court, either
rendered en banc or in division, may be
overturned or reversed only by the Court
sitting en banc."17
That a judgment must become final at
some definite point at the risk of
occasional error cannot be appreciated in
a case that embroils not only a general
allegation of "occasional error" but also a
serious accusation of a violation of the
Constitution, viz., that doctrines or
principles of law were modified or
reversed by the Courts Special Third
Division August 4, 2009 Resolution.

The law allows a determination at first


impression that a doctrine or principle
On proposed Section 3(4), Commissioner laid down by the court en banc or in
Natividad asked what the effect would be division may be modified or reversed in a
of a decision that violates the proviso that case which would warrant a referral to
"no doctrine or principle of law laid down the Court En Banc. The use of the word
by the court in a decision rendered en
"may" instead of "shall" connotes
banc or in division may be modified or
probability, not certainty, of modification
reversed except by the court en banc."
or reversal of a doctrine, as may be
The answer given was that such a

deemed by the Court. Ultimately, it is the


entire Court which shall decide on the
acceptance of the referral and, if so, "to
reconcile any seeming conflict, to reverse
or modify an earlier decision, and to
declare the Courts doctrine."18
The Court has the power and prerogative
to suspend its own rules and to exempt a
case from their operation if and when
justice requires it,19 as in the present
circumstance where movant filed a
motion for leave after the prompt
submission of a second motion for
reconsideration but, nonetheless, still
within 15 days from receipt of the last
assailed resolution.
Well-entrenched doctrines or principles of
law that went astray need to be steered
back to their proper course. Specifically,
as David Lu correctly points out, it is
necessary to reconcile and declare the
legal doctrines regarding actions that are
incapable of pecuniary estimation,
application of estoppel by laches in
raising an objection of lack of jurisdiction,
and whether bad faith can be deduced
from the erroneous annotation of lis
pendens.
Upon a considered, thorough
reexamination, the Court grants David
Lus Motion for Reconsideration. The
assailed Resolutions of August 4,
2009 and September 23, 2009, which
turn turtle settled doctrines, must be
overturned. The Court thus reinstates
the August 26, 2008 Decision wherein a
three-tiered approach was utilized to
analyze the issue on docket fees:
In the instant case, however, we cannot
grant the dismissal prayed for because of
the following reasons: First, the case
instituted before the RTC is one
incapable of pecuniary estimation.
Hence, the correct docket fees were
paid. Second, John and LLDC
are estopped from questioning the

jurisdiction of the trial court because of


their active participation in the
proceedings below, and because the
issue of payment of insufficient docket
fees had been belatedly raised before the
Court of Appeals, i.e., only in their motion
for reconsideration. Lastly, assuming that
the docket fees paid were truly
inadequate, the mistake was
committed by the Clerk of Court who
assessed the same and not imputable
to David; and as to the deficiency, if
any, the same may instead be
considered a lien on the judgment that
may thereafter be rendered.20 (italics in
the original; emphasis and underscoring
supplied)
The Value of the Subject Matter
Cannot be Estimated
On the claim that the complaint had for
its objective the nullification of the
issuance of 600,000 shares of stock of
LLDC, the real value of which based on
underlying real estate values, as alleged
in the complaint, stands
atP1,087,055,105, the Courts assailed
August 4, 2009 Resolution found:
Upon deeper reflection, we find that the
movants [Lu Ym father & sons] claim has
merit. The 600,000 shares of stock were,
indeed, properties in litigation. They were
the subject matter of the complaint, and
the relief prayed for entailed the
nullification of the transfer thereof and
their return to LLDC. David, et al., are
minority shareholders of the corporation
who claim to have been prejudiced by the
sale of the shares of stock to the Lu Ym
father and sons. Thus, to the extent of
the damage or injury they allegedly have
suffered from this sale of the shares of
stock, the action they filed can be
characterized as one capable of
pecuniary estimation. The shares of stock
have a definite value, which was
declared by plaintiffs [David Lu, et al.]
themselves in their complaint.
Accordingly, the docket fees should have

been computed based on this amount.


This is clear from the following version of
Rule 141, Section 7, which was in effect
at the time the complaint was
filed[.]21 (emphasis and underscoring
supplied)

in the original complaint and the


amended complaint is the same, that is,
to declare null and void the issuance of
600,000 unsubscribed and unissued
shares to Lu Ym father and sons, et
al. for a price of 1/18 of their real value,
for being inequitable, having been done
The said Resolution added that the value in breach of directors fiduciarys duty to
of the 600,000 shares of stock, which are stockholders, in violation of the minority
the properties in litigation, should be the stockholders rights, and with unjust
enrichment.
basis for the computation of the filing
fees. It bears noting, however,
that David, et al. are not claiming to own As judiciously discussed in the Courts
these shares. They do not claim to be the August 26, 2008 Decision, the test in
owners thereof entitled to be the
determining whether the subject matter of
transferees of the shares of stock. The
an action is incapable of pecuniary
mention of the real value of the shares of estimation is by ascertaining the nature
stock, over which David, et al. do not,
of the principal action or remedy sought.
it bears emphasis, interpose a claim
It explained:
of right to recovery, is merely narrative
or descriptive in order to emphasize the
x x x To be sure, the annulment of the
inequitable price at which the transfer
shares, the dissolution of the corporation
was effected.
and the appointment of

of 7(b) of Rule 141, as amended by the


Resolution of the Court dated September
12, 1990. Since private respondents
alleged that the land, in which they
claimed an interest as heirs, had been
sold for P4,378,000.00 to petitioners, this
amount should be considered the
estimated value of the land for the
purpose of determining the docket fees.
On the other hand, private respondents
counter that an action for annulment or
rescission of a contract of sale of real
property is incapable of pecuniary
estimation and, so, the docket fees
should be the fixed amount of P400.00 in
Rule 141, 7(b)(1). In support of their
argument, they cite the cases of Lapitan
v. Scandia, Inc. and Bautista v. Lim.
In Lapitan this Court, in an opinion by
Justice J.B.L. Reyes, held:

A review of the jurisprudence of this


Court indicates that in determining
The assailed August 4, 2009 Resolution
whether an action is one the subject
also stated that "to the extent of the
matter of which is not capable of
damage or injury [David, et al.] allegedly
pecuniary estimation, this Court has
have suffered from this sale," the action
adopted the criterion of first ascertaining
"can be characterized as one capable of
the nature of the principal action or
pecuniary estimation." The Resolution
remedy sought. If it is primarily for the
does not, however, explore the value of
recovery of a sum of money, the claim is
the extent of the damage or injury. Could
considered capable of pecuniary
it be the pro rata decrease (e.g., from
estimation, and whether jurisdiction is in
20% to 15%) of the percentage
the municipal courts or in the courts of
shareholding of David, et al. vis--vis to
first instance would depend on the
Actions which the Court has recognized
the whole?
amount of the claim. However, where the
as being incapable of pecuniary
basic issue is something other than the
estimation include legality of
right to recover a sum of money, or where
Whatever property, real or personal, that conveyances. In a case involving
would be distributed to the stockholders
annulment of contract, the Court found it the money claim is purely incidental to, or
a consequence of, the principal relief
would be a mere consequence of the
to be one which cannot be estimated:
sought, like in suits to have the defendant
main action. In the end, in the event
perform his part of the contract (specific
LLDC is dissolved, David, et
Petitioners argue that an action for
performance) and in actions for support,
al. would not be getting the value of the
annulment or rescission of a contract of
or for annulment of a judgment or to
600,000 shares, but only the value of
sale of real property is a real action and, foreclose a mortgage, this Court has
their minority number of shares, which
therefore, the amount of the docket fees considered such actions as cases where
are theirs to begin with.
to be paid by private respondent should
the subject of the litigation may not be
be based either on the assessed value of estimated in terms of money, and are
The complaint filed by David, et al. is one the property, subject matter of the action, cognizable exclusively by courts of first
for declaration of nullity of share
or its estimated value as alleged in the
instance. The rationale of the rule is
issuance. The main relief prayed for both complaint, pursuant to the last paragraph plainly that the second class cases,
receivers/management committee are
actions which do not consist in
the recovery of a sum of money. If, in
the end, a sum of money or real property
would be recovered, it would simply be
the consequence of such principal action.
Therefore, the case before the RTC
was incapable of pecuniary
estimation.22 (italics in the original,
emphasis and underscoring supplied)

besides the determination of


damages, demand an inquiry into
other factors which the law has
deemed to be more within the
competence of courts of first instance,
which were the lowest courts of record at
the time that the first organic laws of the
Judiciary were enacted allocating
jurisdiction (Act 136 of the Philippine
Commission of June 11, 1901).

or nullity of documents upon which


claims are predicated). Issues of the
same nature may be raised by a party
against whom an action for rescission
has been brought, or by the plaintiff
himself. It is, therefore, difficult to see
why a prayer for damages in an action for
rescission should be taken as the basis
for concluding such action as one
capable of pecuniary estimation a
prayer which must be included in the
main action if plaintiff is to be
Actions for specific performance of
compensated for what he may have
contracts have been expressly
pronounced to be exclusively cognizable suffered as a result of the breach
committed by defendant, and not later on
by courts of first instance: De Jesus vs.
precluded from recovering damages by
Judge Garcia, L-26816, February 28,
the rule against splitting a cause of action
1967; Manufacturer's Distributors, Inc.
multiplicity of
vs. Yu Siu Liong, L-21285, April 29, 1966. and discouraging
suits.23 (emphasis and underscoring
And no cogent reason appears, and
none is here advanced by the parties, supplied)
why an action for rescission (or
resolution) should be differently
IN FINE, the Court holds that David Lu,
treated, a "rescission" being a
et al.s complaint is one incapable of
counterpart, so to speak, of "specific
pecuniary estimation, hence, the correct
performance". In both cases, the court docket fees were paid. The Court thus
would certainly have to undertake an
proceeds to tackle the arguments on
investigation into facts that would
estoppel and lien, mindful that the
justify one act or the other. No award
succeeding discussions rest merely on a
for damages may be had in an action
contrary assumption, viz., that there was
for rescission without first conducting deficient payment.
an inquiry into matters which would
justify the setting aside of a contract,
Estoppel Has Set In
in the same manner that courts of first
instance would have to make findings of
Assuming arguendo that the docket fees
fact and law in actions not capable of
pecuniary estimation expressly held to be were insufficiently paid, the doctrine of
estoppel already applies.
so by this Court, arising from issues like
those raised in Arroz v. Alojado, et al., L22153, March 31, 1967 (the legality or
The assailed August 4, 2009 Resolution
illegality of the conveyance sought for cited Vargas v. Caminas24 on the nonand the determination of the validity of
applicability of the Tijam doctrinewhere
the money deposit made); De Ursua v.
the issue of jurisdiction was, in fact,
Pelayo, L-13285, April 18, 1950 (validity
raised before the trial court rendered its
of a judgment); Bunayog v. Tunas, Ldecision. Thus the Resolution explained:
12707, December 23, 1959 (validity of a
mortgage); Baito v. Sarmiento, L-13105, Next, the Lu Ym father and sons filed a
August 25, 1960 (the relations of the
motion for the lifting of the receivership
parties, the right to support created by
order, which the trial court had issued in
the relation, etc., in actions for
the interim. David, et al., brought the
support), De Rivera, et al. v. Halili, Lmatter up to the CA even before the trial
15159, September 30, 1963 (the validity court could resolve the motion.

Thereafter, David, at al., filed their Motion


to Admit Complaint to Conform to the
Interim Rules Governing Intra-Corporate
Controversies. It was at this point that the
Lu Ym father and sons raised the
question of the amount of filing fees paid.
They also raised this point again in the
CA when they appealed the trial courts
decision in the case below.
We find that, in the circumstances, the Lu
Ym father and sons are not estopped
from challenging the jurisdiction of the
trial court. They raised the insufficiency of
the docket fees before the trial court
rendered judgment and continuously
maintained their position even on appeal
to the CA. Although the manner of
challenge waserroneous they should
have addressed this issue directly to the
trial court instead of the OCA they
should not be deemed to have waived
their right to assail the jurisdiction of the
trial court.25 (emphasis and underscoring
supplied)
Lu Ym father and sons did not raise the
issue before the trial court. The narration
of facts in the Courts original decision
shows that Lu Ym father and sons merely
inquired from the Clerk of Court on the
amount of paid docket fees on January
23, 2004. They thereafter still
"speculat[ed] on the fortune of
litigation."26 Thirty-seven days later or on
March 1, 2004 the trial court rendered its
decision adverse to them.
Meanwhile, Lu Ym father and sons
attempted to verify the matter of docket
fees from the Office of the Court
Administrator (OCA). In their Application
for the issuance a writ of preliminary
injunction filed with the Court of Appeals,
they still failed to question the amount of
docket fees paid by David Lu, et al. It
was only in their Motion for
Reconsideration of the denial by the
appellate court of their application for
injunctive writ that they raised such issue.

Lu Ym father and sons further inquiry


from the OCA cannot redeem them. A
mere inquiry from an improper officeat
that, could not, by any stretch, be
considered as an act of having raised the
jurisdictional question prior to the
rendition of the trial courts decision. In
one case, it was held:
Here it is beyond dispute that
respondents paid the full amount of
docket fees as assessed by the Clerk of
Court of the Regional Trial Court of
Malolos, Bulacan, Branch 17, where they
filed the complaint. If petitioners believed
that the assessment was incorrect, they
should have questioned it before the trial
court. Instead, petitioners belatedly
question the alleged underpayment of
docket fees through this
petition, attempting to support their
position with the opinion and
certification of the Clerk of Court of
another judicial region. Needless to
state, such certification has no
bearing on the instant case.27 (italics in
the original; emphasis and underscoring
in the original)
The inequity resulting from the abrogation
of the whole proceedings at this late
stage when the decision subsequently
rendered was adverse to the father and
sons is precisely the evil being avoided
by the equitable principle of estoppel.
No Intent to Defraud the Government
Assuming arguendo that the docket fees
paid were insufficient, there is no proof of
bad faith to warrant a dismissal of the
complaint, hence, the following doctrine
applies:
x x x In Sun Insurance Office, Ltd.,
(SIOL) v. Asuncion, this Court ruled that
the filing of the complaint or appropriate
initiatory pleading and the payment of the
prescribed docket fee vest a trial court
with jurisdiction over the subject matter or

nature of the action. If the amount of


docket fees paid is insufficient
considering the amount of the claim, the
clerk of court of the lower court involved
or his duly authorized deputy has the
responsibility of making a deficiency
assessment. The party filing the case will
be required to pay the deficiency, but
jurisdiction is not automatically
lost.28 (underscoring supplied)
The assailed Resolution of August 4,
2009 held, however, that the abovequoted doctrine does not apply since
there was intent to defraud the
government, citing one attendant
circumstance the annotation of notices
of lis pendens on real properties owned
by LLDC. It deduced:
From the foregoing, it is clear that a
notice of lis pendens is availed of mainly
in real actions. Hence, when David,et al.,
sought the annotation of notices of lis
pendens on the titles of LLDC, they
acknowledged that the complaint they
had filed affected a title to or a right to
possession of real properties. At the very
least, they must have been fully aware
that the docket fees would be based on
the value of the realties involved. Their
silence or inaction to point this out to the
Clerk of Court who computed their docket
fees, therefore, becomes highly suspect,
and thus, sufficient for this Court to
conclude that they have crossed beyond
the threshold of good faith and into the
area of fraud. Clearly, there was an effort
to defraud the government in avoiding to
pay the correct docket fees.
Consequently, the trial court did not
acquire jurisdiction over the case.29
All findings of fraud should begin the
exposition with the presumption of good
faith. The inquiry is not whether there
was good faith on the part of David, et
al., but whether there was bad faith on
their part.

The erroneous annotation of a notice


of lis pendens does not negate good
faith. The overzealousness of a party in
protecting pendente lite his perceived
interest, inchoate or otherwise, in the
corporations properties from depletion or
dissipation, should not be lightly equated
to bad faith.

party, fourth-party, etc.


complaint, or a complaint in
intervention, and for all clerical
services in the same, if the
total sum claimed, exclusive of
interest, or thestated value of
the property in litigation, is:

The nature of the above mentioned cases


should first be ascertained. Section 3(a),
Rule 1 of the 1997 Rules of Civil
xxxx
Procedure defines civil action as one by
which a party sues another for the
enforcement or protection of a right, or
(b) For filing:
the prevention or redress of a wrong. It
further states that a civil action may either
be ordinary or special, both being
Actions where the value of the
governed by the rules for ordinary civil
subject matter cannot be
actions subject to the special rules
estimated
prescribed for special civil actions.
Section 3(c) of the same Rule, defines a
Special civil actions except judicial special proceeding as a remedy by which
foreclosure of mortgage which shall a party seeks to establish a status, a
be governed by paragraph (a) above right, or a particular fact.

That notices of lis pendens were


erroneously annotated on the titles does
not have the effect of changing the nature
of the action. The aggrieved party is not
left without a remedy, for they can move
1.
to cancel the annotations. The assailed
August 4, 2009 Resolution, however,
deemed such act as an
acknowledgement that the case they filed
2.
was a real action, concerning as it
indirectly does the corporate realties, the
titles of which were allegedly annotated.
This conclusion does not help much in
3. All other actions not involving
ascertaining the filing fees because the
property
value of these real properties and the
value of the 600,000 shares of stock are In a real action, the assessed value of
the property, or if there is none, the
different.
estimated value thereof shall be alleged
Further, good faith can be gathered from by the claimant and shall be the basis in
computing the fees.
the series of amendments on the
provisions on filing fees, that the Court
was even prompted to make a
clarification.

period of appeal in cases transferred


from the Securities and Exchange
Commission to particular Regional Trial
Courts.

x x x x31 (emphasis supplied)

Applying these definitions, the cases


covered by the Interim Rules for IntraCorporate Controversies should be
considered as ordinary civil actions.
These cases either seek the recovery
of damages/property or specific
performance of an act against a party
for the violation or protection of a
right. These cases are:

1avvphi1

When David Lu, et al. filed the Complaint


on August 14, 2000 or five days after the
effectivity of the Securities Regulation
Code or Republic Act No. 8799,30 the then
Section 7 of Rule 141 was the applicable
provision, without any restricted
reference to paragraphs (a) and (b) 1 &
3 or paragraph (a) alone. Said section
then provided:

The Court, by Resolution of September


4, 2001 in A. M. No. 00-8-10SC,32 clarified the matter of legal fees to
be collected in cases formerly cognizable
by the Securities and Exchange
Commission following their transfer to the
RTC.

Clarification has been sought on the legal


fees to be collected and the period of
appeal applicable in cases formerly
SEC. 7. Clerks of Regional Trial Courts. cognizable by the Securities and
Exchange Commission. It appears that
the Interim Rules of Procedure on
(a) For filing an action or a
Corporate Rehabilitation and the Interim
permissive counterclaim or
Rules of Procedure for Intra-Corporate
money claim against an estate
Controversies do not provide the basis
not based on judgment, or for
filing with leave of court a third- for the assessment of filing fees and the

(1) Devices or schemes


employed by, or any act of, the
board of directors, business
associates, officers or partners,
amounting to fraud or
misrepresentation which may be
detrimental to the interest of the
public and/or of the
stockholders, partners, or
members of any corporation,
partnership, or association;
(2) Controversies arising out of
intra-corporate, partnership, or
association relations, between
and among stockholders,
members or associates; and
between, any or all of them and

the corporation, partnership, or


association of which they are
stockholders, members or
associates, respectively;
(3) Controversies in the election
or appointment of directors,
trustees, officers, or managers
of corporations, partnerships, or
associations;
(4) Derivative suits; and
(5) Inspection of corporate
books.
On the other hand, a petition for
rehabilitation, the procedure for which is
provided in the Interim Rules of
Procedure on Corporate Recovery,
should be considered as a special
proceeding. It is one that seeks to
establish the status of a party or a
particular fact. As provided in section 1,
Rule 4 of the Interim Rules on Corporate
Recovery, the status or fact sought to be
established is the inability of the
corporate debtor to pay its debts when
they fall due so that a rehabilitation plan,
containing the formula for the successful
recovery of the corporation, may be
approved in the end. It does not seek a
relief from an injury caused by another
party.

The new Section 21(k) of Rule 141 of the


Rules of Court, as amended by A.M. No.
04-2-04-SC33 (July 20, 2004), expressly
provides that "[f]or petitions for
insolvency or other cases involving intracorporate controversies, the fees
prescribed under Section 7(a) shall
apply." Notatu dignum is
that paragraph (b) 1 & 3 of Section 7
thereof was omitted from the reference.
Said paragraph34 refers to docket fees for
filing "[a]ctions where the value of the
subject matter cannot be estimated" and
"all other actions not involving property."

Finally, assuming there was deficiency in


paying the docket fees and assuming
further that there was a mistake in
computation, the deficiency may be
considered a lien on the judgment that
may be rendered, there being no
established intent to defraud the
government.

By referring the computation of such


docket fees to paragraph (a) only, it
denotes that an intra-corporate
controversy always involves a property in
litigation, the value of which is always the
basis for computing the applicable filing
fees. The latest amendments seem to
imply that there can be no case of intracorporate controversy where the value of
the subject matter cannot be estimated.
Even one for a mere inspection of
corporate books.

The Court of Appeals is DIRECTED to


resume the proceedings and resolve the
remaining issues with utmost dispatch in
CA-G.R. CV No. 81163.

If the complaint were filed today, one


could safely find refuge in the express
phraseology of Section 21 (k) of Rule 141
that paragraph (a) alone applies.

In the present case, however, the original


Complaint was filed on August 14, 2000
during which time Section 7, without
Section 7 of Rule 141 (Legal Fees) of the qualification, was the applicable
Revised Rules of Court lays the amount
provision. Even the Amended Complaint
of filing fees to be assessed for actions or was filed on March 31, 2003 during which
proceedings filed with the Regional Trial
time the applicable rule expressed
Court. Section 7(a) and (b) apply to
that paragraphs (a) and (b) l & 3 shall be
ordinary civil actionswhile 7(d) and (g) the basis for computing the filing fees in
apply to special proceedings.
intra-corporate cases, recognizing that
there could be an intra-corporate
controversy where the value of the
In fine, the basis for computing the
subject matter cannot be estimated, such
filing fees in intra-corporate cases
as an action for inspection of corporate
shall be section 7(a) and (b) l & 3of
Rule 141. For petitions for rehabilitation, books. The immediate illustration shows
that no mistake can even be attributed to
section 7(d) shall be applied. (emphasis
the RTC clerk of court in the assessment
and underscoring supplied)
of the docket fees.

WHEREFORE, the assailed Resolutions


of August 4, 2009 and September 23,
2009 are REVERSED and SET ASIDE.
The Courts Decision of August 26, 2008
is REINSTATED.

SO ORDERED.
*opinions not included

8. Do-All Metal Industries Inc. v.


Security Bank Corp. (January 10,
2011)
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 176339
2011

January 10,

DO-ALL METALS INDUSTRIES, INC.,


SPS. DOMINGO LIM and LELY KUNG
LIM, Petitioners,
vs.
SECURITY BANK CORP., TITOLAIDO
E. PAYONGAYONG, EVYLENE C.
SISON, PHIL. INDUSTRIAL SECURITY
AGENCY CORP. and GIL
SILOS, Respondents.

DECISION
ABAD, J.:
This case is about the propriety of
awarding damages based on claims
embodied in the plaintiffs supplemental
complaint filed without prior payment of
the corresponding filing fees.
The Facts and the Case
From 1996 to 1997, Dragon Lady
Industries, Inc., owned by petitioner
spouses Domingo Lim and Lely Kung Lim
(the Lims) took out loans from
respondent Security Bank Corporation
(the Bank) that totaled P92,454,776.45.
Unable to pay the loans on time, the Lims
assigned some of their real properties to
the Bank to secure the same, including a
building and the lot on which it stands
(the property), located at M. de Leon St.,
Santolan, Pasig City.1
In 1998 the Bank offered to lease the
property to the Lims through petitioner
Do-All Metals Industries, Inc. (DMI)
primarily for business although the Lims
were to use part of the property as their
residence. DMI and the Bank executed a
two-year lease contract from October 1,
1998 to September 30, 2000 but the
Bank retained the right to pre-terminate
the lease. The contract also provided
that, should the Bank decide to sell the
property, DMI shall have the right of first
refusal.
On December 3, 1999, before the lease
was up, the Bank gave notice to DMI that
it was pre-terminating the lease on
December 31, 1999. Wanting to exercise
its right of first refusal, DMI tried to
negotiate with the Bank the terms of its
purchase. DMI offered to pay the
Bank P8 million for the property but the
latter rejected the offer, suggestingP15
million instead. DMI made a second offer

of P10 million but the Bank declined the


same.

The Bank denied, on the other hand, that


its guards harassed DMI and the Lims. To
protect its property, the Bank began
While the negotiations were on going, the posting guards at the building even
before it leased the same to DMI. Indeed,
Lims claimed that they continued to use
this arrangement benefited both parties.
the property in their business. But the
Bank posted at the place private security The Bank alleged that in October of
guards from Philippine Industrial Security 2000, when the parties could not come to
an agreement regarding the purchase of
Agency (PISA). The Lims also claimed
the property, DMI vacated the same and
that on several occasions in 2000, the
peacefully turned over possession to the
guards, on instructions of the Bank
Bank.
representatives Titolaido Payongayong
and Evylene Sison, padlocked the
entrances to the place and barred the
The Bank offered no objection to the
Lims as well as DMIs employees from
issuance of a TRO since it claimed that it
entering the property. One of the guards never prevented DMI or its employees
even pointed his gun at one employee
from entering or leaving the building. For
and shots were fired. Because of this,
this reason, the RTC directed the Bank to
DMI was unable to close several projects allow DMI and the Lims to enter the
and contracts with prospective clients.
building and get the things they left there.
Further, the Lims alleged that they were
The latter claimed, however, that on
unable to retrieve assorted furniture,
entering the building, they were unable to
equipment, and personal items left at the find the movable properties they left
property.
there. In a supplemental complaint, DMI
and the Lims alleged that the Bank
surreptitiously took such properties,
The Lims eventually filed a complaint
resulting in additional actual damages to
with the Regional Trial Court (RTC) of
them of over P27 million.
Pasig City for damages with prayer for
the issuance of a temporary restraining
order (TRO) or preliminary injunction
against the Bank and its co-defendants
Payongayong, Sison, PISA, and Gil
Silos.2 Answering the complaint, the Bank
pointed out that the lease contract
allowed it to sell the property at any time
provided only that it gave DMI the right of
first refusal. DMI had seven days from
notice to exercise its option. On
September 10, 1999 the Bank gave
notice to DMI that it intended to sell the
property to a third party. DMI asked for an
extension of its option to buy and the
Bank granted it. But the parties could not
agree on a purchase price. The Bank
required DMI to vacate and turnover the
property but it failed to do so. As a result,
the Banks buyer backed-out of the sale.
Despite what happened, the Bank and
DMI continued negotiations for the
purchase of the leased premises but they
came to no agreement.

right to present additional evidence and


deemed the case submitted for decision.
On September 30, 2004 the RTC
rendered a decision in favor of DMI and
the Lims. It ordered the Bank to pay the
plaintiffs P27,974,564.00 as actual
damages, P500,000.00 as moral
damages, P500,000 as exemplary
damages, and P100,000.00 as attorneys
fees. But the court absolved defendants
Payongayong, Sison, Silos and PISA of
any liability.
The Bank moved for reconsideration of
the decision, questioning among other
things the RTCs authority to grant
damages considering plaintiffs failure to
pay the filing fees on their supplemental
complaint. The RTC denied the motion.
On appeal to the CA, the latter found for
the Bank, reversed the RTC decision,
and dismissed the complaint as well as
the counterclaims.5 DMI and the Lims
filed a motion for reconsideration but the
CA denied the same, hence this petition.
The Issues Presented

allegedly lost after they were


barred from the property.
The Courts Rulings
One. On the issue of jurisdiction,
respondent Bank argues that plaintiffs
failure to pay the filing fees on their
supplemental complaint is fatal to their
action.
But what the plaintiffs failed to pay was
merely the filing fees for their
Supplemental Complaint. The RTC
acquired jurisdiction over plaintiffs action
from the moment they filed their original
complaint accompanied by the payment
of the filing fees due on the same. The
plaintiffs non-payment of the additional
filing fees due on their additional claims
did not divest the RTC of the jurisdiction it
already had over the case.6
Two. As to the claim that Banks
representatives and retained guards
harassed and intimidated DMIs
employees and the Lims, the RTC found
ample proof of such wrongdoings and
accordingly awarded damages to the
plaintiffs. But the CA disagreed,
discounting the testimony of the police
officers regarding their investigations of
the incidents since such officers were not
present when they happened. The CA
may be correct in a way but the plaintiffs
presented eyewitnesses who testified out
of personal knowledge. The police
officers testified merely to point out that
there had been trouble at the place and
their investigations yielded their findings.

The RTC set the pre-trial in the case for


The issues presented in this case are:
December 4, 2001. On that date,
however, counsel for the Bank moved to
reset the proceeding. The court denied
1. Whether or not the RTC
the motion and allowed DMI and the Lims
acquired jurisdiction to hear and
to present their evidence ex parte. The
adjudicate plaintiffs
court eventually reconsidered its order
supplemental complaint against
but only after the plaintiffs had already
the Bank considering their
presented their evidence and were about
failure to pay the filing fees on
to rest their case. The RTC declined to
the amounts of damages they
recall the plaintiffs witnesses for crossclaim in it;
examination but allowed the Bank to
present its evidence.3 This prompted the
2. Whether or not the Bank is
Bank to seek relief from the Court of
The Bank belittles the testimonies of the
liable for the intimidation and
Appeals (CA) and eventually from this
petitioners witnesses for having been
harassment committed against
Court but to no avail.4
DMI and its representatives; and presented ex parte before the clerk of
court. But the ex parte hearing, having
been properly authorized, cannot be
During its turn at the trial, the Bank got to
3. Whether or not the Bank is
assailed as less credible. It was the
present only defendant Payongayong, a
liable to DMI and the Lims for
Banks fault that it was unable to attend
bank officer. For repeatedly canceling the
the machineries, equipment,
the hearing. It cannot profit from its lack
hearings and incurring delays, the RTC
and other properties they
of diligence.
declared the Bank to have forfeited its

Domingo Lim and some employees of


DMI testified regarding the Bank guards
unmitigated use of their superior strength
and firepower. Their testimonies were
never refuted. Police Inspector Priscillo
dela Paz testified that he responded to
several complaints regarding shooting
incidents at the leased premises and on
one occasion, he found Domingo Lim
was locked in the building. When he
asked why Lim had been locked in, a
Bank representative told him that they
had instructions to prevent anyone from
taking any property out of the premises. It
was only after Dela Paz talked to the
Bank representative that they let Lim out.7
Payongayong, the Banks sole witness,
denied charges of harassment against
the Banks representatives and the
guards. But his denial came merely from
reports relayed to him. They were not
based on personal knowledge.
1avvphil

While the lease may have already


lapsed, the Bank had no business
harassing and intimidating the Lims and
their employees. The RTC was therefore
correct in adjudging moral damages,
exemplary damages, and attorneys fees
against the Bank for the acts of their
representatives and building guards.
Three. As to the damages that plaintiffs
claim under their supplemental
complaint, their stand is that the RTC
committed no error in admitting the
complaint even if they had not paid the
filing fees due on it since such fees
constituted a lien anyway on the
judgment award. But this after-judgment
lien, which implies that payment depends
on a successful execution of the
judgment, applies to cases where the
filing fees were incorrectly assessed or
paid or where the court has discretion to
fix the amount of the award.8 None of
these circumstances obtain in this case.

Here, the supplemental complaint


specified from the beginning the actual
damages that the plaintiffs sought against
the Bank. Still plaintiffs paid no filing fees
on the same. And, while petitioners claim
that they were willing to pay the
additional fees, they gave no reason for
their omission nor offered to pay the
same. They merely said that they did not
yet pay the fees because the RTC had
not assessed them for it. But a
supplemental complaint is like any
complaint and the rule is that the filing
fees due on a complaint need to be paid
upon its filing.9 The rules do not require
the court to make special assessments in
cases of supplemental complaints.

had remained in the premises and that


the bank was responsible for their loss.
The only evidence offered to prove the
loss was Domingo Lims testimony and
some undated and unsigned inventories.
These were self-serving and
uncorroborated.
WHEREFORE, the Court PARTIALLY
GRANTS the petition and REINSTATES
with modification the decision of the
Regional Trial Court of Pasig City in Civil
Case 68184. The Court DIRECTS
respondent Security Bank Corporation to
pay petitioners DMI and spouses
Domingo and Lely Kung Lim damages in
the following amounts: P500,000.00 as
moral damages, P500,000.00 as
exemplary damages, and P100,000.00
for attorneys fees. The Court DELETES
the award of actual damages
of P27,974,564.00.

To aggravate plaintiffs omission,


although the Bank brought up the
question of their failure to pay additional
filing fees in its motion for
reconsideration, plaintiffs made no effort
to make at least a late payment before
SO ORDERED.
the case could be submitted for decision,
assuming of course that the prescription
of their action had not then set it in.
9. Barrameda Vda, de Ballesteros
Clearly, plaintiffs have no excuse for their v. Rural Bank of Canaman, Inc.,
continuous failure to pay the fees they
(November 24, 2010)
owed the court. Consequently, the trial
court should have treated their
Republic of the Philippines
Supplemental Complaint as not filed.
SUPREME COURT
Manila
Plaintiffs of course point out that the Bank
itself raised the issue of non-payment of
additional filing fees only after the RTC
had rendered its decision in the case.
The implication is that the Bank should
be deemed to have waived its objection
to such omission. But it is not for a party
to the case or even for the trial court to
waive the payment of the additional filing
fees due on the supplemental complaint.
Only the Supreme Court can grant
exemptions to the payment of the fees
due the courts and these exemptions are
embodied in its rules.
Besides, as correctly pointed out by the
CA, plaintiffs had the burden of proving
that the movable properties in question

MENDOZA, J.:
This is a petition for review on certiorari
under Rule 45 of the Revised Rules of
Civil Procedure assailing the August 15,
2006 Decision1 of the Court of
Appeals (CA) in CA-G.R. No. 82711,
modifying the decision of the Regional
Trial Court of Iriga City, Branch 36 (RTCIriga), in Civil Case No. IR-3128, by
ordering the consolidation of the said civil
case with Special Proceeding Case No.
M-5290 (liquidation case) before the
Regional Trial Court of Makati City,
Branch 59 (RTC-Makati).
It appears from the records that on March
17, 2000, petitioner Lucia Barrameda
Vda. De Ballesteros (Lucia) filed a
complaint for Annulment of Deed of
Extrajudicial Partition, Deed of Mortgage
and Damages with prayer for Preliminary
Injunction against her children, Roy, Rito,
Amy, Arabel, Rico, Abe, Ponce Rex and
Adden, all surnamed Ballesteros, and the
Rural Bank of Canaman, Inc., Baao
Branch (RBCI) before the RTC-Iriga. The
case was docketed as Civil Case No. IR3128.

In her complaint, Lucia alleged that her


deceased husband, Eugenio, left two (2)
parcels of land located in San Nicolas,
Baao, Camarines Sur, each with an area
of 357 square meters; that on March 6,
SECOND DIVISION
1995, without her knowledge and
consent, her children executed a deed of
G.R. No. 176260
November 24, extrajudicial partition and waiver of the
2010
estate of her husband wherein all the
heirs, including Lucia, agreed to allot the
two parcels to Rico Ballesteros (Rico);
LUCIA BARRAMEDA VDA. DE
that, still, without her knowledge and
BALLESTEROS, Petitioner,
consent, Rico mortgaged Parcel B of the
vs.
estate in favor of RBCI which mortgage
RURAL BANK OF CANAMAN INC.,
was being foreclosed for failure to settle
represented by its Liquidator, the
the loan secured by the lot; and that
philippine deposit insurance
Lucia was occupying Parcel B and had
corporation, Respondent.
no other place to live. She prayed that
the deed of extrajudicial partition and
DECISION
waiver, and the subsequent mortgage in
favor of RBCI be declared null and void

having been executed without her


This resolves the Motion to Dismiss filed
knowledge and consent. She also prayed by the defendant Rural Bank of
for damages.
Canaman, Inc., premised on the ground
that this court has no jurisdiction over the
In its Answer, RBCI claimed that in 1979, subject matter of the action. This issue of
Lucia sold one of the two parcels to Rico jurisdiction was raised in view of the
which represented her share in the estate pronouncement of the Supreme Court in
Ong v. C.A. 253 SCRA 105 and in the
of her husband. The extrajudicial
case of Hernandez v. Rural Bank of
partition, waiver and mortgage were all
Lucena, Inc., G.R. No. L-29791 dated
executed with the knowledge and
January 10, 1978, wherein it was held
consent of Lucia although she was not
that "the liquidation court shall have
able to sign the document. RBCI further
jurisdiction to adjudicate all claims
claimed that Parcel B had already been
against the bank whether they be against
foreclosed way back in 1999 which fact
assets of the insolvent bank, for Specific
was known to Lucia through the
Performance, Breach of Contract,
auctioning notary public. Attorneys fees
Damages or whatever."
were pleaded as counterclaim.
The case was then set for pre-trial
conference. During the pre-trial, RBCIs
counsel filed a motion to withdraw after
being informed that Philippine Deposit
Insurance Corporation (PDIC) would
handle the case as RBCI had already
been closed and placed under the
receivership of the PDIC. Consequently,
on February 4, 2002, the lawyers of PDIC
took over the case of RBCI.

It is in view of this jurisprudential


pronouncement made by no less than the
Supreme Court, that this case is, as far
as defendant Rural Bank of Canaman
Inc., is concerned, hereby ordered
DISMISSED without prejudice on the part
of the plaintiff to ventilate their claim
before the Liquidation Court now, RTC
Branch 59, Makati City.

be liberally construed in order to promote


their object and to assist the parties in
obtaining just, speedy and inexpensive
determination of every action and
proceeding (Vallacar Transit, Inc. v. Yap,
126 SCRA 500 [1983]; Suntay v. Aguiluz,
209 SCRA 500 [1992] citing Ramos v.
Ebarle, 182 SCRA 245 [1990]). It would
be more in keeping with the demands of
equity if the cases are simply ordered
consolidated. Pursuant to Section 2, Rule
1, Revised Rules of Court, the rules on
consolidation should be liberally
construed to achieve the object of the
parties in obtaining just, speedy and
inexpensive determination of their cases
(Allied Banking Corporation v. Court of
Appeals, 259 SCRA 371 [1996]).
The dispositive portion of the decision
reads:

IN VIEW OF ALL THE FOREGOING, the


appealed decision is hereby MODIFIED,
in such a way that the dismissal of this
case (Civil Case No. IR-3128) is set
aside and in lieu thereof another one is
entered ordering the consolidation of said
SO ORDERED.
case with the liquidation case docketed
as Special Proceeding No. M-5290
On May 9, 2003, RBCI, through PDIC,
before Branch 59 of the Regional Trial
filed a motion to dismiss on the ground
Not in conformity, Lucia appealed the
Court of Makati City, entitled "In Re:
that the RTC-Iriga has no jurisdiction over RTC ruling to the CA on the ground that
Assistance in the Judicial Liquidation of
the subject matter of the action. RBCI
the RTC-Iriga erred in dismissing the
stated that pursuant to Section 30,
case because it had jurisdiction over Civil Rural Bank of Canaman, Camarines Sur,
Inc., Philippine Deposit Corporation,
Republic Act No. 7653(RA No.
Case No. IR-3128 under the rule on
Petitioner." No pronouncement as to cost.
7653), otherwise known as the "New
adherence of jurisdiction.
Central Bank Act," the RTC-Makati,
3
already constituted itself, per its Order
On August 15, 2006, the CA rendered the SO ORDERED.
dated August 10, 2001, as the liquidation questioned decision ordering the
court to assist PDIC in undertaking the
consolidation of Civil Case No. IR-3128
Lucia filed a motion for
liquidation of RBCI. Thus, the subject
and the liquidation case pending before
reconsideration4 but it was denied by the
matter of Civil Case No. IR-3128 fell
RTC-Makati. The appellate court
CA in its Resolution dated December 14,
within the exclusive jurisdiction of such
ratiocinated thus:
2006.5
liquidation court. Lucia opposed the
motion.
The consolidation is desirable in order Hence, the present petition for review on
to prevent confusion, to avoid multiplicity certiorari anchored on the following
On July 29, 2003, the RTC-Iriga issued
of suits and to save unnecessary cost
2
an order granting the Motion to Dismiss, and expense. Needless to add, this
GROUNDS
to wit:
procedure is well in accord with the
principle that the rules of procedure shall

(I)
THE COURT OF APPEALS
ERRED IN NOT FINDING THAT
THE REGIONAL TRIAL COURT
OF IRIGA CITY, BRANCH 36 IS
VESTED WITH JURISDICTION
TO CONTINUE TRYING AND
ULTIMATELY DECIDE CIVIL
CASE NO. IR-3128.
(II)
THE COURT OF APPEALS
ERRED AND GRAVELY
ABUSED ITS DISCRETION IN
ORDERING THE
CONSOLIDATION OF CIVIL
CASE NO. IR-3128 WITH THE
LIQUIDATION CASE
DOCKETED AS SPECIAL
PROCEEDINGS NO. M-5290
BEFORE BRANCH 59 OF THE
REGIONAL TRIAL COURT OF
MAKATI CITY.6
Given the foregoing arguments, the Court
finds that the core issue to be resolved in
this petition involves a determination of
whether a liquidation court can take
cognizance of a case wherein the main
cause of action is not a simple money
claim against a bank ordered closed,
placed under receivership of the PDIC,
and undergoing a liquidation proceeding.
Lucia contends that the RTC-Iriga is
vested with jurisdiction over Civil Case
No. 3128, the constitution of the
liquidation court notwithstanding.
According to her, the case was filed
before the RTC-Iriga on March 17, 2000
at the time RBCI was still doing business
or before the defendant bank was placed
under receivership of PDIC in January
2001.
She further argues that the consolidation
of the two cases is improper. Her case,
which is for annulment of deed of

partition and waiver, deed of mortgage


and damages, cannot be legally brought
before the RTC-Makati with the
liquidation case considering that her
cause of action against RBCI is not a
simple claim arising out of a creditordebtor relationship, but one which
involves her rights and interest over a
certain property irregularly acquired by
RBCI. Neither is she a creditor of the
bank, as only the creditors of the
insolvent bank are allowed to file and
ventilate claims before the liquidator,
pursuant to the August 10, 2001 Order of
the RTC-Makati which granted the
petition for assistance in the liquidation of
RBCI.
In its Comment,7 PDIC, as liquidator of
RBCI, counters that the consolidation of
Civil Case No. 3128 with the liquidation
proceeding is proper. It posits that the
liquidation court of RBCI, having been
established, shall have exclusive
jurisdiction over all claims against the
said bank.
After due consideration, the Court finds
the petition devoid of merit.
Lucias argument, that the RTC-Iriga is
vested with jurisdiction to continue trying
Civil Case No. IR-3128 until its final
disposition, evidently falls out from a
strained interpretation of the law and
jurisprudence. She contends that:
Since the RTC-Iriga has already obtained
jurisdiction over the case it should
continue exercising such jurisdiction until
the final termination of the case. The
jurisdiction of a court once attached
cannot be ousted by subsequent
happenings or events, although of a
character which would have prevented
jurisdiction from attaching in the first
instance, and the Court retains
jurisdiction until it finally disposes of the
case (Aruego Jr. v. Court of Appeals, 254
SCRA 711).

When a court has already obtained and


is exercising jurisdiction over a
controversy, its jurisdiction to proceed to
final determination of the case is not
affected by a new legislation transferring
jurisdiction over such proceedings to
another tribunal. (Alindao v. Joson, 264
SCRA 211). Once jurisdiction is vested,
the same is retained up to the end of the
litigation (Bernate v. Court of Appeals,
263 SCRA 323).8

xxx The requirement that all claims


against the bank be pursued in the
liquidation proceedings filed by the
Central Bank is intended to prevent
multiplicity of actions against the
insolvent bank and designed to establish
due process and orderliness in the
liquidation of the bank, to obviate the
proliferation of litigations and to avoid
injustice and arbitrariness (citing Ong v.
CA, 253 SCRA 105 [1996]). The
lawmaking body contemplated that for
The afore-quoted cases, cited by Lucia to convenience, only one court, if possible,
should pass upon the claims against the
bolster the plea for the continuance of
insolvent bank and that the liquidation
her case, find no application in the case
court should assist the Superintendents
at bench.
of Banks and regulate his operations
(citing Central Bank of the Philippines, et
Indeed, the Court recognizes the doctrine al. v. CA, et al., 163 SCRA 482 [1988]).9
on adherence of jurisdiction. Lucia,
however, must be reminded that such
As regards Lucias contention that
principle is not without exceptions. It is
jurisdiction already attached when Civil
well to quote the ruling of the CA on this
Case No. IR-3128 was filed with, and
matter, thus:
jurisdiction obtained by, the RTC-Iriga
prior to the filing of the liquidation case
This Court is not unmindful nor unaware before the RTC-Makati, her stance fails
of the doctrine on the adherence of
to persuade this Court. In refuting this
jurisdiction. However, the rule on
assertion, respondent PDIC cited the
adherence of jurisdiction is not absolute
case of Lipana v. Development Bank of
and has exceptions. One of the
Rizal10 where it was held that the time of
exceptions is that when the change in
the filing of the complaint is immaterial,
jurisdiction is curative in character
viz:
(Garcia v. Martinez, 90 SCRA 331
[1979]; Calderon, Sr. v. Court of Appeals,
It is the contention of petitioners,
100 SCRA 459 [1980]; Atlas Fertilizer
however, that the placing under
Corporation v. Navarro, 149 SCRA 432
receivership of Respondent Bank long
[1987]; Abad v. RTC of Manila, Br. Lll,
after the filing of the complaint removed it
154 SCRA 664 [1987]).
from the doctrine in the said Morfe Case.
For sure, Section 30, R.A. 7653 is
curative in character when it declared
that the liquidation court shall have
jurisdiction in the same proceedings to
assist in the adjudication of the disputed
claims against the Bank. The
interpretation of this Section (formerly
Section 29, R.A. 265) becomes more
obvious in the light of its intent. InManalo
v. Court of Appeals (366 SCRA 752,
[2001]), the Supreme Court says:

This contention is untenable. The time of


the filing of the complaint is immaterial. It
is the execution that will obviously
prejudice the other depositors and
creditors. Moreover, as stated in the said
Morfe case, the effect of the judgment is
only to fix the amount of the debt, and not
to give priority over other depositors and
creditors.

The cited Morfe case11 held that "after the


Monetary Board has declared that a bank
is insolvent and has ordered it to cease
operations, the Board becomes the
trustee of its assets for the equal benefit
of all the creditors, including depositors.
The assets of the insolvent banking
institution are held in trust for the equal
benefit of all creditors, and after its
insolvency, one cannot obtain an
advantage or a preference over another
by an attachment, execution or
otherwise."
Thus, to allow Lucias case to proceed
independently of the liquidation case, a
possibility of favorable judgment and
execution thereof against the assets of
RBCI would not only prejudice the other
creditors and depositors but would defeat
the very purpose for which a liquidation
court was constituted as well.
Anent the second issue, Lucia faults the
CA in directing the consolidation of Civil
Case No. IR-3128 with Special
Proceedings No. M-5290. The CA
committed no error. Lucias complaint
involving annulment of deed of mortgage
and damages falls within the purview of a
disputed claim in contemplation of
Section 30 of R.A. 7653 (The New
Central Bank Act). The jurisdiction should
be lodged with the liquidation court.
Section 30 provides:
Sec. 30. Proceedings in Receivership
and Liquidation. - Whenever, upon report
of the head of the supervising or
examining department, the Monetary
Board finds that a bank or quasi-bank:
(a) is unable to pay its liabilities
as they become due in the
ordinary course of business:
Provided, That this shall not
include inability to pay caused
by extraordinary demands
induced by financial panic in the
banking community;

(b) has insufficient realizable


assets, as determined by the
Bangko Sentral, to meet its
liabilities; or
(c) cannot continue in business
without involving probable
losses to its depositors or
creditors; or
(d) has wilfully violated a cease
and desist order under Section
37 that has become final,
involving acts or transactions
which amount to fraud or a
dissipation of the assets of the
institution; in which cases, the
Monetary Board may summarily
and without need for prior
hearing forbid the institution
from doing business in the
Philippines and designate the
Philippine Deposit Insurance
Corporation as receiver of the
banking institution.
For a quasi-bank, any person of
recognized competence in banking or
finance may be designated as receiver.
The receiver shall immediately gather
and take charge of all the assets and
liabilities of the institution, administer the
same for the benefit of its creditors, and
exercise the general powers of a receiver
under the Revised Rules of Court but
shall not, with the exception of
administrative expenditures, pay or
commit any act that will involve the
transfer or disposition of any asset of the
institution: Provided, That the receiver
may deposit or place the funds of the
institution in non-speculative
investments. The receiver shall
determine as soon as possible, but not
later than ninety (90) days from take
over, whether the institution may be
rehabilitated or otherwise placed in such
a condition that it may be permitted to
resume business with safety to its

depositors and creditors and the general


public: Provided, That any determination
for the resumption of business of the
institution shall be subject to prior
approval of the Monetary Board.
If the receiver determines that the
institution cannot be rehabilitated or
permitted to resume business in
accordance with the next preceding
paragraph, the Monetary Board shall
notify in writing the board of directors of
its findings and direct the receiver to
proceed with the liquidation of the
institution. The receiver shall:
(1) file ex parte with the proper
regional trial court, and without
requirement of prior notice or
any other action, a petition for
assistance in the liquidation of
the institution pursuant to a
liquidation plan adopted by the
Philippine Deposit Insurance
Corporation for general
application to all closed banks.
In case of quasi-banks, the
liquidation plan shall be adopted
by the Monetary Board. Upon
acquiring jurisdiction, the court
shall, upon motion by the
receiver after due notice,
adjudicate disputed
claims against the institution,
assist the enforcement of
individual liabilities of the
stockholders, directors and
officers, and decide on other
issues as may be material to
implement the liquidation plan
adopted. The receiver shall pay
the cost of the proceedings from
the assets of the institution.
(2) convert the assets of the
institution to money, dispose of
the same to creditors and other
parties, for the purpose of
paying the debts of such
institution in accordance with
the rules on concurrence and

preference of credit under the


Civil Code of the Philippines and
he may, in the name of the
institution, and with the
assistance of counsel as he
may retain, institute such
actions as may be necessary to
collect and recover accounts
and assets of, or defend any
action against, the institution.
The assets of an institution
under receivership or liquidation
shall be deemed in custodia
legis in the hands of the receiver
and shall, from the moment the
institution was placed under
such receivership or liquidation,
be exempt from any order of
garnishment, levy, attachment,
or execution. [Emphasis
supplied]
xxx
"Disputed claims" refers to all claims,
whether they be against the assets of the
insolvent bank, for specific performance,
breach of contract, damages, or
whatever.12 Lucias action being a claim
against RBCI can properly be
consolidated with the liquidation
proceedings before the RTC-Makati. A
liquidation proceeding has been
explained in the case of In Re: Petition
For Assistance in the Liquidation of the
Rural Bank of BOKOD (Benguet), Inc. v.
Bureau of Internal Revenue13 as follows:

proper or without basis. On the other


hand, it may also end with the liquidation
court allowing the claim. In the latter
case, the claim shall be classified
whether it is ordinary or preferred, and
thereafter included Liquidator. In either
case, the order allowing or disallowing a
particular claim is final order, and may be
appealed by the party aggrieved thereby.
The second phase involves the approval
by the Court of the distribution plan
prepared by the duly appointed liquidator.
The distribution plan specifies in detail
the total amount available for distribution
to creditors whose claim were earlier
allowed. The Order finally disposes of the
issue of how much property is available
for disposal. Moreover, it ushers in the
final phase of the liquidation proceeding payment of all allowed claims in
accordance with the order of legal priority
and the approved distribution plan.
xxx

A liquidation proceeding is commenced


by the filing of a single petition by the
Solicitor General with a court of
competent jurisdiction entitled, "Petition
for Assistance in the Liquidation of e.g.,
Pacific Banking Corporation." All
claims against the insolvent are required
to be filed with the liquidation court.
Although the claims are litigated in the
same proceeding, the treatment is
individual. Each claim is heard
separately. And the Order issued relative
A liquidation proceeding is a single
to a particular claim applies only to said
proceeding which consists of a number of claim, leaving the other claims
cases properly classified as "claims." It is unaffected, as each claim is considered
basically a two-phased proceeding. The
separate and distinct from the others. x x
first phase is concerned with the approval x [Emphasis supplied.]
and disapproval of claims. Upon the
approval of the petition seeking the
It is clear, therefore, that the liquidation
assistance of the proper court in the
court has jurisdiction over all claims,
liquidation of a closed entity, all money
including that of Lucia against the
claims against the bank are required to
insolvent bank. As declared in Miranda v.
be filed with the liquidation court. This
Philippine Deposit Insurance
phase may end with the declaration by
Corporation,14 regular courts do not have
the liquidation court that the claim is not

jurisdiction over actions filed by claimants


against an insolvent bank, unless there is
a clear showing that the action taken by
the BSP, through the Monetary Board, in
the closure of financial institutions was in
excess of jurisdiction, or with grave
abuse of discretion. The same is not
obtaining in this present case.
1avvphi1

The power and authority of the Monetary


Board to close banks and liquidate them
thereafter when public interest so
requires is an exercise of the police
power of the State. Police power,
however, is subject to judicial inquiry. It
may not be exercised arbitrarily or
unreasonably and could be set aside if it
is either capricious, discriminatory,
whimsical, arbitrary, unjust, or is
tantamount to a denial of due process
and equal protection clauses of the
Constitution.15
In sum, this Court holds that the
consolidation is proper considering that
the liquidation court has jurisdiction over
Lucias action. It would be more in
keeping with law and equity if Lucias
case is consolidated with the liquidation
case in order to expeditiously determine
whether she is entitled to recover the
property subject of mortgage from RBCI
and, if so, how much she is entitled to
receive from the remaining assets of the
bank.
WHEREFORE, the petition is DENIED.
SO ORDERED.

10. Lamsis v. Dong-e, (October 20,


2010)

Republic of the
Philippines

1980s, their children, petitioners Delfin


Lamsis (Delfin) and Agustin Kitma
(Agustin), took possession of certain
Factual antecedents
portions of Lot No. 1. Delfin possessed
4,000 square meters of Lot No. 1, while
This case involves a conflict of ownership Agustin occupied 5,000 square meters
and possession over an untitled parcel of thereof.12 Nevertheless, the heirs of
land, denominated as Lot No. 1, with an
Gilbert Semon tolerated the acts of their
area of 80,736 square meters. The
first cousins.
FIRST DIVISION
property is located along Km. 5 Asin
Road, Baguio City and is part of a larger
When Gilbert Semon died in 1983,13 his
parcel of land with an area of 186,090
G.R. No. 173021
October 20,
square meters. While petitioners are the children extrajudicially partitioned the
2010
property among themselves and allotted
actual occupants of Lot No. 1,
Lot No. 1 thereof in favor of
respondent
is
claiming
ownership
thereof
DELFIN LAMSIS, MAYNARD
Margarita.14 Since then, Margarita
MONDIGUING, JOSE VALDEZ, JR. and and is seeking to recover its possession
allegedly paid the realty tax over Lot No.
Heirs of AGUSTIN KITMA, represented from petitioners.
115 and occupied and improved the
by EUGENE KITMA, Petitioners,
property together with her husband; while
According to respondent Margarita
vs.
at the same time, tolerating her first
Semon Dong-E (Margarita), her familys
MARGARITA SEMON DONGcousins occupation of portions of the
ownership and occupation of Lot No. 1
E, Respondent.
same lot.
can be traced as far back as 1922 to her
late grandfather, Ap-ap.5 Upon Ap-aps
DECISION
This state of affairs changed when
death, the property was inherited by his
petitioners Delfin and Agustin allegedly
children, who obtained a survey plan in
began expanding their occupation on the
DEL CASTILLO, J.:
1964 of the 186,090-square meter
subject property and selling portions
property, which included Lot No. 1.6 On
thereof.16 Delfin allegedly sold a 400the same year, they declared the
There is laches when a party is aware,
square meter portion of Lot No. 1 to
property for taxation purposes in the
even in the early stages of the
17
7
name of "The Heirs of Ap-ap." The 1964 petitioner Maynard Mondiguing
proceedings, of a possible jurisdictional
(Maynard)
while
Agustin
sold another
tax declaration bears a notation that
objection, and has every opportunity to
portion
to
petitioner
Jose
Valdez (Jose).18
reads: "Reconstructed from an old Tax
raise said objection, but fails to do so,
Declaration No. 363 dated May 10, 1922
even on appeal.
per true of same presented."8
With such developments, Margarita filed
a complaint19 for recovery of ownership,
1
This is a Petition for Review assailing the
possession, reconveyance and damages
March 30, 2006 Decision2 of the Court of The heirs of Ap-ap then executed, for
against all four occupants of Lot No. 1
a P500.00 consideration, a Deed of
Appeals (CA) in CA-G.R. CV No. 78987
before the Regional Trial Court (RTC) of
9
Quitclaim
on
February
26,
1964
in
favor
as well as its May 26, 2006
Baguio City. The case was docketed as
of their brother Gilbert Semon
Resolution3 which denied petitioners
Civil Case No. 4140-R and raffled to
(Margaritas father).
motion for reconsideration. The
Branch 59. The complaint prayed for the
dispositive portion of the assailed
annulment of the sales to Maynard and
Decision reads:
Sometime between 1976 and
Jose and for petitioners to vacate the
1978,10 Gilbert Semon together with his
portions of the property which exceed the
wife Mary Lamsis, allowed his in-laws
WHEREFORE, in view of the foregoing,
areas allowed to them by
the appeal is hereby DISMISSED for lack Manolo Lamsis and Nancy Lamsis-Kitma, Margarita.20 Margarita claimed that, as
of merit and the judgment dated January to stay on a portion of Lot No. 1 together they are her first cousins, she is willing to
with their respective families.11 They were donate to Delfin and Agustin a portion of
8, 2003 of the Regional Trial Court of
allowed to erect their houses, introduce
Baguio City in Civil Case No. 4140-R is
Lot No. 1, provided that she retains the
improvements, and plant trees thereon.
AFFIRMED in toto.
power to choose such portion.21
When Manolo Lamsis and Nancy
Lamsis-Kitma died sometime in the

SUPREME
COURT
Manila

SO ORDERED.4

Petitioners denied Margaritas claims of


ownership and possession over Lot No.
1. According to Delfin and Agustin, Lot
No. 1 is a public land claimed by the
heirs of Joaquin Smith (not parties to the
case).22 The Smiths gave their permission
for Delfin and Agustins parents to occupy
the land sometime in 1969 or 1970. They
also presented their neighbors who
testified that it was Delfin and Agustin as
well as their respective parents who
occupied Lot No. 1, not Margarita and
her parents.

To bolster her claim of ownership and


possession, Margarita introduced as
evidence an unnumbered resolution of
the Community Special Task Force on
Ancestral Lands (CSTFAL) of the
Department of Environment and Natural
Resources (DENR), acting favorably on
her and her siblings ancestral land claim
over a portion of the 186,090-square
meter property.27 The said resolution
states:

It has been sufficiently substantiated by


the applicants that prior to and at the time
of the pendency of the land registration
case and henceforth up to and including
the present, the herein applicants by
themselves and through their
predecessor-in-interest have been in
exclusive, continuous, and material
possession and occupation of the said
parcel of land mentioned above under
claim of ownership, devoting the same
for residential and agricultural purposes.
The land subject of the instant application Found are the residential houses of the
applicants as well as those of their close
is the ancestral land of the herein
relatives, while the other areas planted to
Delfin and Agustin also assailed the
applicants. Well-established is the fact
fruit trees, coffee and banana, and
muniments of ownership presented by
that the land treated herein was first
seasonal crops. Also noticeable therein
Margarita as fabricated, unauthenticated, declared for taxation purposes in 1922
are permanent stone and earthen fences,
and invalid. It was pointed out that the
under Tax Declaration No. 363 by the
terraces, clearings, including irrigation
Deed of Quitclaim, allegedly executed by applicants grandfather Ap-Ap (one
gadgets.
all of Ap-aps children, failed to include
name). Said application was
two Rita Bocahan and Stewart
reconstructed in 1965 after the original
Sito.23 Margarita admitted during trial that got lost during the war. These tax
On the matter of the applicant[s]
Rita Bocahan and Stewart Sito were her declarations were issued and recorded in indiguinity [sic] and qualifications, there is
uncle and aunt, but did not explain why
the Municipality of Tuba, Benguet,
no doubt that they are members of the
they were excluded from the quitclaim.
considering that the land was then within National Cultural Communities,
the territorial jurisdiction of the said
particularly the Ibaloi tribe. They are the
municipality.
That
upon
the
death
of
legitimate grandchildren of Ap-Ap (one
According to Maynard and Jose, Delfin
declarant Ap-Ap his heirs x x x
name) who lived along the Asin Road
and Agustin were the ones publicly and
transferred
the
tax
declaration
in
their
area. His legal heirs are: Orani Ap-Ap,
openly in possession of the land and who
name, [which tax declaration is] now with married to Calado Salda; Rita Ap-Ap,
introduced improvements thereon. They
the City assessors office of Baguio.
married to Jose Bacacan; Sucdad Ap-Ap,
also corroborated Delfin and Agustins
married to Oragon Wakit; and Gilbert
allegation that the real owners of the
property are the heirs of Joaquin Smith.24 The land consisting of four (4) lots with a Semon, a former vice-mayor of Tuba,
Benguet, [who] adopted the common
total area of ONE HUNDRED EIGHTY
name of their father Semon, as it is the
SIX
THOUSAND
NINETY
(186,090)
In order to debunk petitioners claim that
customary practice among the early
SQUARE
METERS,
is
covered
by
Psuthe Smiths owned the subject property,
Ibalois. x x x
Margarita presented a certified copy of a 198317 duly approved by the Director of
Lands
on
October
4,
1963
in
the
name
of
Resolution from the Land Management
On the matter regarding the inheritance
Office denying the Smiths application for Ap-Ap (one name). In 1964, the same
recognition of the subject property as part land was the subject of a petition filed by of the heirs of Ap-Ap, it is important to
Gilbert Semon, as petitioner, before the
state [that] Gilbert Semon consolidated
of their ancestral land.25 The resolution
Court of First Instance of the City of
ownership thereof and became the sole
explains that the application had to be
Baguio in the reopening of Judicial
heir in 1964, by way of a "Deed of
denied because the Smiths did not
Proceedings
under
Civil
Case
No.
1,
Quitclaim" executed by the heirs in his
"possess, occupy or utilize all or a portion
GLRO Record No. 211 for the registration favor. As to the respective share of the
of the property x x x. The actual
and the issuance of Certificate of Title of applicants[] co-heirs, the same was
occupants (who were not named in the
said land. The land registration case was properly adjudicated in 1989 with the
resolution) whose improvements are
however overtaken by the decision of the execution of an "Extrajudicial Settlement/
visible are not in any way related to the
Supreme Court declaring such judicial
Partition of Estate with Waiver of Rights."
26
applicant or his co-heirs."
proceedings null and void because the
courts of law have no jurisdiction.

With regard to the overlapping issue, it is


pertinent to state that application No. BgL-066 of Thomas Smith has already been
denied by us in our Resolution dated
November 1997. As to the other adverse
claims therein by reason of previous
conveyances in favor of third parties, the
same were likewise excluded resulting in
the reduction of the area originally
applied from ONE HUNDRED EIGHTY
SIX THOUSAND NINETY (186,090)
SQUARE METERS, more or less to ONE
HUNDRED TEN THOUSAND THREE
HUNDRED FORTY TWO (110,342)
SQUARE METERS, more or less.
Considering the foregoing developments,
we find no legal and procedural obstacle
in giving due course to the instant
application.
Now therefore, we hereby [resolve] that
the application for Recognition of
Ancestral Land Claim filed by the Heirs of
Gilbert Semon, represented by Juanito
Semon, be granted [and] a Certificate of
Ancestral Land Claim (CALC) be issued
to the herein applicants by the Secretary,
Department of Environment and Natural
Resources, Visayas Avenue, Diliman,
Quezon City, through the Regional
Executive Director, DENR-CAR, Diego
Silang Street, Baguio City. The area of
the claim stated herein above is however
subject to the outcome of the final survey
to be forthwith executed.
Carried this 23rd day of June 1998.28
The resolution was not signed by two
members of the CSTFAL on the ground
that the signing of the unnumbered
resolution was overtaken by the
enactment of the Republic Act (RA) No.
8371 or the Indigenous Peoples Rights
Act of 1997 (IPRA). The IPRA removed
the authority of the DENR to issue
ancestral land claim certificates and
transferred the same to the National
Commission on Indigenous Peoples
(NCIP).29 The Ancestral Land Application
No. Bg-L-064 of the Heirs of Gilbert

Semon was transferred to the NCIP,


Cordillera Administrative Region, La
Trinidad, Benguet and re-docketed as
Case No. 05-RHO-CAR-03.30 The
petitioners filed their protest in the said
case before the NCIP. The same has
been submitted for resolution.

for the property from the Bureau of Lands


because there were pending ancestral
land claims over the property.34 Petitioner
Agustins Townsite Sales Application over
the property was held in abeyance
because of respondents own claim,
which was eventually favorably
considered by the CSTFAL.35

Ruling of the Regional Trial Court31


After summarizing the evidence
presented by both parties, the trial court
found that it preponderates in favor of
respondents long-time possession of and
claim of ownership over the subject
property.32 The survey plan of the subject
property in the name of the Heirs of Apap executed way back in 1962 and the
tax declarations thereafter issued to the
respondent and her siblings all support
her claim that her family and their
predecessors-in-interest have all been in
possession of the property to the
exclusion of others. The court likewise
gave credence to the documentary
evidence of the transfer of the land from
the Heirs of Ap-ap to respondents father
and, eventually to respondent herself.
The series of transfers of the property
were indications of the respondents and
her predecessors interest over the
property. The court opined that while
these pieces of documentary evidence
were not conclusive proof of actual
possession, they lend credence to
respondents claim because, "in the
ordinary course of things, persons will not
execute legal documents dealing with
real property, unless they believe, and
have the basis to believe, that they have
an interest in the property subject of the
legal documents x x x."33
In contrast, the trial court found nothing
on record to substantiate the allegations
of the petititioners that they and their
parents were the long-time possessors of
the subject property. Their own
statements belied their assertions.
Petitioner Maynard and Jose both
admitted that they could not secure title

The dispositive portion of the trial courts


Decision reads:
WHEREFORE, premises considered,
judgment is hereby rendered in favor of
the [respondent] and against the
[petitioners]
(1) Declaring the transfer of a
portion of Lot 1 of PSU 198317
made by the [petitioner] Delfin
Lamsis to Menard Mondiguing
and Jose Valdez, Jr. null and
void;
(2) Ordering the [petitioners]
Delfin Lamsis, Agustin Kitma,
Menard Mondiguing and Jose
Valdez, Jr., to vacate the area
they are presently occupying
that is within Lot 1 of PSU
198317 belonging to the
[respondent] and to surrender
possession thereof to the
[respondent];
(3) To pay [respondent]
attorneys fees in the amount
of P10,000.00; and
(4) To pay the costs of suit.
SO ORDERED.36

Ruling of the Court of Appeals39

pieces of evidence offered by


respondent. They maintain that the Deed
The sole issue resolved by the appellate of Quitclaim executed by the Heirs of Apcourt was whether the trial court erred in ap is spurious and lacks the parties and
ruling in favor of respondent in light of the witnesses signatures. Moreover, it is a
mere photocopy, which was never
adduced evidence. Citing the rule on
preponderance of evidence, the CA held authenticated by the notary public in
court and no reasons were proferred
that the respondent was able to
regarding the existence, loss, and
discharge her burden in proving her title
contents of the original copy.45 Under the
and interest to the subject property. Her
best evidence rule, the Deed of Quitclaim
documentary evidence were amply
supported by the testimonial evidence of is inadmissible in evidence and should
have been disregarded by the court.
her witnesses.
In contrast, petitioners only made bare
allegations in their testimonies that are
insufficient to overcome respondents
documentary evidence.
Petitioners moved for a
reconsideration40 of the adverse decision
but the same was denied.
Hence this petition, which was initially
denied for failure to show that the CA
committed any reversible error.41Upon
petitioners motion for
reconsideration,42 the petition was
reinstated in the Courts January 15,
2007 Resolution.43

Respondent did not prove that she and


her husband possessed the subject
property since time immemorial.
Petitioners argue that respondent
admitted possessing and cultivating only
the land that lies outside the subject
property.46
Petitioners next assail the weight to be
given to respondents muniments of
ownership, such as the tax declarations
and the survey plan. They insist that
these are not indubitable proofs of
respondents ownership over the subject
property given that there are other
claimants to the land (who are not parties
to this case) who also possess a survey
plan over the subject property.47

Petitioners arguments
Petitioners assign as error the CAs
appreciation of the evidence already
affirmed and considered by the trial court.
They maintain that the change in the
presiding judges who heard and decided
their case resulted in the appreciation of
what would otherwise be inadmissible
evidence.44 Petitioners ask that the Court
exempt their petition from the general
rule that a trial judges assessment of the
credibility of witnesses is accorded great
respect on appeal.

It appears that no motion for


reconsideration was filed before the trial
court. Nevetheless, the trial court issued
an Order37 allowing the petitioners Notice To support their claim that the trial and
appellate courts erred in ruling in favor of
of Appeal.38
respondent, they assailed the various

Petitioners then assert their superior right


to the property as the present possessors
thereof. They cite pertinent provisions of
the New Civil Code which presume good
faith possession on the part of the
possessor and puts the burden on the
plaintiff in an action to recover to prove
her superior title.48
Petitioners next assert that they have a
right to the subject property by the
operation of acquisitive prescription. They
posit that they have been in possession
of a public land publicly, peacefully,
exclusively and in the concept of owners
for more than 30 years. Respondents
assertion that petitioners are merely

possessors by tolerance is
unsubstantiated.49

Respondent also asserts that questions


of fact are prohibited in a Rule 45
petition.56 Thus, the appreciation and
consideration of the factual issues are no
Petitioners also maintain that the
57
reivindicatory action should be dismissed longer reviewable.
for lack of jurisdiction in light of the
enactment of the IPRA, which gives
The issue of lack of jurisdiction is raised
original and exclusive jurisdiction over
for the first time in the petition before this
disputes involving ancestral lands and
Court. It was never raised before the trial
domains to the NCIP.50 They assert that
court or the CA. Thus, respondent insists
the customary laws of the Ibaloi tribe of
that petitioners are now barred by laches
the Benguet Province should be applied from attacking the trial courts jurisdiction
to their dispute as mandated by Section
over the case. Citing Aragon v. Court of
65, Chapter IX of RA 8371, which states: Appeals,58 respondent argues that the
"When disputes involve
jurisdictional issue should have been
ICCs/IPs,51 customary laws and practices raised at the appellate level at the very
shall be used to resolve the dispute."
least so as to avail of the doctrine that
the ground lack of jurisdiction over the
In the alternative that jurisdiction over an subject matter of the case may be raised
of the proceedings even on
accion reivindicatoria is held to be vested at any stage
59
in the trial court, the petitioners insist that appeal.

circumstances in affirming the


trial courts decision;

establish a proposition in issue, are


without doubt questions of fact."64

2. Whether petitioners have


Since it raises essentially questions of
acquired the subject property by fact, this assignment of error must be
prescription;
dismissed for it is settled that only
questions of law may be reviewed in an
appeal by certiorari.65 There is a question
3. Whether the trial court has
jurisdiction to decide the case in of law when there is doubt as to what the
light of the effectivity of RA 8371 law is on a certain state of facts.
Questions of law can be resolved without
or the Indigenous Peoples
having to re-examine the probative value
Rights Act of 1997 at the time
of evidence presented, the truth or
that the complaint was
falsehood of facts being admitted.66 The
instituted;
instant case does not present a
compelling reason to deviate from the
4. If the trial court retains
foregoing rule, especially since both trial
jurisdiction, whether the
and appellate courts agree that
ancestral land claim pending
respondent had proven her claim of
before the NCIP should take
ownership as against petitioners claims.
precedence over the
Their factual findings, supported as they
62
reivindicatory action.
are by the evidence, should be accorded
the courts should dismiss the
great respect.
reivindicatory action on the ground of litis Respondent maintains that there is no
Our
Ruling
52
pendentia. They likewise argue that
room for the application of litis pendentia
NCIP has primary jurisdiction over
because the issues in the application for
In any case, even if petitioners
ancestral lands, hence, the courts should ancestral land claim are different from the Whether the appellate court disregarded arguments attacking the authenticity and
not interfere "when the dispute demands issue in a reivindicatory action. The issue
admissibility of the Deed of Quitclaim
material facts and circumstances in
the exercise of sound administrative
before the NCIP is whether the
executed in favor of respondents father
affirming the trial courts decision
discretion requiring special knowledge,
Government, as grantor, will recognize
are well-taken, it will not suffice to defeat
experience and services of the
the ancestral land claim of respondent
respondents claim over the subject
Both the trial and the appellate courts
administrative tribunal x x x In cases
over a public alienable land; while the
property. Even without the Deed of
ruled that respondent has proven her
where the doctrine of primary jurisdiction issue in the reivindicatory case before the claims of ownership and possession with Quitclaim, respondents claims of prior
is clearly applicable, the court cannot
trial court is ownership, possession, and a preponderance of evidence. Petitioners possession and ownership were
arrogate unto itself the authority to
right to recover the real property.60
adequately supported and corroborated
now argue that the two courts erred in
resolve a controversy, the jurisdiction
by her other documentary and testimonial
their appreciation of the evidence. They
over which is initially lodged with an
evidence. We agree with the trial courts
Given that the elements of lis pendens
ask the Court to review the evidence of
administrative body of special
are absent in case at bar, the allegation
both parties, despite the CAs finding that observation that, in the ordinary course of
competence."53 The courts should stand
things, people will not go to great lengths
of forum-shopping is also bereft of merit. the trial court committed no error in
aside in order to prevent the possibility of Any judgment to be rendered by the
to execute legal documents and pay
appreciating the evidence presented
creating conflicting decisions.54
realty taxes over a real property, unless
NCIP will not amount to res judicata in
during trial. Hence, petitioners seek a
they have reason to believe that they
61
the instant case.
review of questions of fact, which is
have an interest over the same.67
Respondents arguments
beyond the province of a Rule 45
Issues
Respondent opines that the appellate
court did not commit any reversible error
in affirming the trial courts decision. The
present petition is a mere dilatory tactic
to frustrate the speedy administration of
justice.55

The petitioners present the following


issues for our consideration:
1. Whether the appellate court
disregarded material facts and

petition. A question of fact exists if the


uncertainty centers on the truth or falsity
of the alleged facts.63 "Such questions as
whether certain items of evidence should
be accorded probative value or weight, or
rejected as feeble or spurious, or whether
the proofs on one side or the other are
clear and convincing and adequate to

The fact that respondents documents


traverse several decades, from the 1960s
to the 1990s, is an indication that she and
her family never abandoned their right to
the property and have continuously
exercised rights of ownership over the
same.

Moreover, respondents version of how


the petitioners came to occupy the
property coincides with the same timeline
given by the petitioners themselves. The
only difference is that petitioners maintain
they came into possession by tolerance
of the Smith family, while respondent
maintains that it was her parents who
gave permission to petitioners. Given the
context under which the parties
respective statements were made, the
Court is inclined to believe the
respondents version, as both the trial
and appellate courts have concluded,
since her version is corroborated by the
documentary evidence.

of repudiation sufficient for the reckoning


of the acquisitive prescription. At most,
we can find on record the sale by
petitioners Delfin and Agustin of parts of
the property to petitioners Maynard and
Jose; but the same was done only in
1998, shortly before respondent filed a
case against them. Hence, the 30-year
period necessary for the operation of
acquisitve prescription had yet to be
attained.

subject properties to enable the court to


resolve the said issue. x x x72 (Emphasis
supplied)

judicata in the other case."76 The third


element is missing, for any judgment in
the certification case would not constitute
res judicata or be conclusive on the
ownership issue involved in the
Likewise apropos is the following
reivindicatory case. Since there is no litis
explanation:
pendentia, there is no reason for the
reivindicatory case to be suspended or
The fact that the [respondents] were able dismissed in favor of the certification
to secure [TCTs over the property] did not case.
operate to vest upon them ownership of
the property. The Torrens system does
not create or vest title. It has never been Moreover, since there is no litis
Whether the ancestral land claim pending recognized as a mode of acquiring
pendentia, we cannot agree with
before the National Commission on
petitioners contention that respondent
ownership x x x If the [respondents]
Indigenous Peoples (NCIP) should take
committed forum-shopping. Settled is the
wished to assert their ownership, they
precedence over the reivindicatory action should have filed a judicial action for
rule that "forum shopping exists where
recovery of possession and not merely to the elements of litis pendentiaare present
Whether petitioners have acquired the
or where a final judgment in one case will
The application for issuance of a
have the land registered under their
subject property by prescription
amount to res judicata in the other."77
Certificate of Ancestral Land Title
respective names. x x x Certificates of
pending before the NCIP is akin to a
title do not establish
Assuming that the subject land may be
registration proceeding. It also seeks an ownership.73 (Emphasis supplied)
Whether the trial court has jurisdiction to
acquired by prescription, we cannot
official recognition of ones claim to a
decide the case in light of the effectivity
accept petitioners claim of acquisition by particular land and is also in rem. The
of RA 8371 or the Indigenous Peoples
A registration proceeding is not a
prescription. Petitioners admitted that
titling of ancestral lands is for the
Rights Act of 1997 at the time that the
conclusive adjudication of ownership. In
they had occupied the property by
purpose of "officially establishing" ones
complaint was instituted
fact,
if
it
is
later
on
found
in
another
case
tolerance of the owner thereof. Having
land as an ancestral land.69 Just like a
(where the issue of ownership is squarely
made this admission, they cannot claim
registration proceeding, the titling of
adjudicated) that the registrant is not the For the first time in the entire proceedings
that they have acquired the property by
ancestral lands does not vest
owner of the property, the real owner can of this case, petitioners raise the trial
70
prescription unless they can prove acts of ownership upon the applicant but only
file a reconveyance case and have the
courts alleged lack of jurisdiction over
repudiation. It is settled that possession, recognizes ownership71 that has already
title transferred to his name.74
the subject-matter in light of the
in order to ripen into ownership, must be vested in the applicant by virtue of his
effectivity78 of the IPRA at the time that
in the concept of an owner, public,
and his predecessor-in-interests
the complaint was filed in 1998. They
Given that a registration proceeding
peaceful and uninterrupted. Possession
possession of the property since time
maintain that, under the IPRA, it is the
(such
as
the
certification
of
ancestral
not in the concept of owner, such as the
immemorial. As aptly explained in
lands) is not a conclusive adjudication of NCIP which has jurisdiction over land
one claimed by petitioners, cannot ripen another case:
disputes involving indigenous cultural
ownership, it will not constitute litis
into ownership by acquisitive
pendentia on a reivindicatory case where communities and indigenous peoples.
prescription, unless the juridical relation
It bears stressing at this point that
the issue is ownership.75 "For litis
is first expressly repudiated and such
ownership should not be confused with a pendentia to be a ground for the
As a rule, an objection over subjectrepudiation has been communicated to
certificate of title. Registering land under dismissal of an action, the following
matter jurisdiction may be raised at any
the other party. Acts of possessory
the Torrens system does not create or
requisites must concur: (a) identity of
time of the proceedings. This is because
character executed due to license or by
vest title because registration is not a
parties,
or
at
least
such
parties
who
jurisdiction cannot be waived by the
mere tolerance of the owner are
mode of acquiring ownership. A
represent the same interests in both
parties or vested by the agreement of the
inadequate for purposes of acquisitive
certificate of title is merely an evidence of actions; (b) identity of rights asserted and parties. Jurisdiction is vested by law,
prescription. Possession by tolerance is
ownership or title over the particular
relief prayed for, the relief being founded which prevails at the time of the filing of
not adverse and such possessory acts,
property described therein. Corollarily,
on the same facts; and (c) the identity
the complaint.
no matter how long performed, do not
any question involving the issue of
with respect to the two preceding
start the running of the period of
ownership must be threshed out in a
particulars in the two cases is such that
prescription.68
An exception to this rule has been carved
separate suit x x x The trial court will then any judgment that may be rendered in
by jurisprudence. In the seminal case of
conduct a full-blown trial wherein the
the pending case, regardless of which
Tijam v. Sibonghanoy,79 the Court ruled
In the instant case, petitioners made no
parties will present their respective
party is successful, would amount to res that the existence of laches will prevent a
effort to allege much less prove any act
evidence on the issue of ownership of the

party from raising the courts lack of


jurisdiction. Laches is defined as the
"failure or neglect, for an unreasonable
and unexplained length of time, to do that
which, by exercising due diligence, could
or should have been done earlier; it is
negligence or omission to assert a right
within a reasonable time, warranting the
presumption that the party entitled to
assert it either has abandoned or
declined to assert it."80 Wisely, some
cases81 have cautioned against applying
Tijam, except for the most exceptional
cases where the factual milieu is similar
to Tijam.

RTC. They obviously neglected to take


the IPRA into consideration.

violation of Article 315, par. 2(a) of the


Revised Penal Code in relation to
Presidential Decree (P.D.) No. 1689.
Petitioner asserts that respondent judge
When the amended complaint was filed
erred in finding the existence of probable
in 1998, the petitioners no longer raised
cause that justifies the issuance of a
the issue of the trial courts lack of
warrant of arrest against him and his cojurisdiction. Instead, they proceeded to
trial, all the time aware of the existence of WHEREFORE, premises considered, the accused.
the IPRA as evidenced by the crosspetition is denied for lack of merit. The
examination82 conducted by petitioners
March 30, 2006 Decision of the Court of
Section 6, Rule 112 of the Revised Rules
lawyer on the CSTFAL Chairman
Appeals in CA-G.R. CV No. 78987 and
of Criminal Procedure provides:
Guillermo Fianza. In the crossits May 26, 2006 Resolution denying the
examination, it was revealed that the
motion for reconsideration are
Sec. 6. When warrant of arrest may
petitioners were aware that the DENR,
AFFIRMED.
issue. (a) By the Regional Trial
through the CSTFAL, had lost its
Court. Within ten (10) days from the
jurisdiction over ancestral land claims by SO ORDERED.
filing of the complaint or information, the
In Tijam, the surety could have raised the virtue of the enactment of the IPRA. They
judge shall personally evaluate the
issue of lack of jurisdiction in the trial
assailed the validity of the CSTFAL
resolution of the prosecutor and its
court but failed to do so. Instead, the
resolution favoring respondent on the
11. De Joya v. Marquez, GR No.
supporting evidence. He may
surety participated in the proceedings
ground that the CSTFAL had been
162416, January 31, 2006
immediately dismiss the case if the
and filed pleadings, other than a motion
rendered functus officio under the IPRA.
evidence on record clearly fails to
to dismiss for lack of jurisdiction. When
Inexplicably, petitioners still did not
establish probable cause. If he finds
Republic of the Philippines
the case reached the appellate court, the question the trial courts jurisdiction.
probable cause, he shall issue a
SUPREME
COURT
surety again participated in the case and
warrant of arrest, or a commitment
Manila
filed their pleadings therein. It was only
When petitioners recoursed to the
order if the accused has already been
after receiving the appellate courts
appellate court, they only raised as errors
arrested pursuant to a warrant issued
adverse decision that the surety awoke
SECOND DIVISION
the trial courts appreciation of the
by the judge who conducted the
from its slumber and filed a motion to
evidence and the conclusions that it
preliminary investigation or when the
dismiss, in lieu of a motion for
derived therefrom. In their brief, they
complaint or information was filed
G.R. No. 162416
January 31,
reconsideration. The CA certified the
once again assailed the CSTFALs
pursuant to section 7 of this Rule. In
2006
matter to this Court, which then ruled that resolution as having been rendered
case of doubt on the existence of
the surety was already barred by laches
functus officio by the enactment of
probable cause, the judge may order the
CHESTER DE JOYA, Petitioner,
from raising the jurisdiction issue.
IPRA.83 But nowhere did petitioners assail
prosecutor to present additional evidence
vs.
the trial courts ruling for having been
within five (5) days from notice and the
JUDGE PLACIDO C. MARQUEZ, in his
In case at bar, the application of the
rendered without jurisdiction.
issuance must be resolved by the court
capacity as Presiding Judge of Branch
Tijam doctrine is called for because the
within thirty (30) days from the filing of
40, Manila-RTC, PEOPLE OF THE
presence of laches cannot be ignored. If It is only before this Court, eight years
the complaint or information.
PHILIPPINES and THE SECRETARY
the surety in Tijam was barred by laches after the filing of the complaint, after the
OF THE DEPARTMENT OF
for raising the issue of jurisdiction for the trial court had already conducted a fullx x x1
JUSTICE, Respondents.
first time in the CA, what more for
blown trial and rendered a decision on
petitioners in the instant case who raised the merits, after the appellate court had
This Court finds from the records of
DECISION
the issue for the first time in their petition made a thorough review of the records,
Criminal Case No. 03-219952 the
before this Court.
and after petitioners have twice
following documents to support the
encountered adverse decisions from the AZCUNA, J.:
motion of the prosecution for the
At the time that the complaint was first
trial and the appellate courts that
issuance of a warrant of arrest:
filed in 1998, the IPRA was already in
petitioners now want to expunge all the
This is a petition for certiorari and
effect but the petitioners never raised the efforts that have gone into the litigation
prohibition that seeks the Court to nullify
1. The report of the National
same as a ground for dismissal; instead
and resolution of their case and start all
and set aside the warrant of arrest issued
Bureau of Investigation to Chief
they filed a motion to dismiss on the
over again. This practice cannot be
by respondent judge against petitioner in
State Prosecutor Jovencito R.
ground that the value of the property did allowed.
Criminal Case No. 03-219952 for
Zuo as regards their
not meet the jurisdictional value for the
1avvphi1

Thus, even assuming arguendo that


petitioners theory about the effect of
IPRA is correct (a matter which need not
be decided here), they are already barred
by laches from raising their jurisdictional
objection under the circumstances.

investigation on the complaint


filed by private complainant
Manuel Dy Awiten against Mina
Tan Hao @ Ma. Gracia Tan Hao
and Victor Ngo y Tan for
syndicated estafa. The report
shows that Hao induced Dy to
invest more than a hundred
million pesos in State
Resources Development
Management Corporation, but
when the latters investments
fell due, the checks issued by
Hao in favor of Dy as payment
for his investments were
dishonored for being drawn
against insufficient funds or that
the account was closed.2
2. Affidavit-Complaint of private
complainant Manuel Dy Awiten.3
3. Copies of the checks issued
by private complainant in favor
of State Resources
Corporation.4
4. Copies of the checks issued
to private complainant
representing the supposed
return of his investments in
State Resources.5
5. Demand letter sent by private
complainant to Ma. Gracia Tan
Hao.6

Ma. Gracia Hao and Danny S.


Hao.
Also included in the records are the
resolution issued by State Prosecutor
Benny Nicdao finding probable cause to
indict petitioner and his other co-accused
for syndicated estafa,8 and a copy of the
Articles of Incorporation of State
Resources Development Management
Corporation naming petitioner as
incorporator and director of said
corporation.
This Court finds that these documents
sufficiently establish the existence of
probable cause as required under
Section 6, Rule 112 of the Revised Rules
of Criminal Procedure. Probable cause to
issue a warrant of arrest pertains to facts
and circumstances which would lead a
reasonably discreet and prudent person
to believe that an offense has been
committed by the person sought to be
arrested. It bears remembering that "in
determining probable cause, the average
man weighs facts and circumstances
without resorting to the calibrations of our
technical rules of evidence of which his
knowledge is nil. Rather, he relies on the
calculus of common sense of which all
reasonable men have an
abundance."9 Thus, the standard used for
the issuance of a warrant of arrest is less
stringent than that used for establishing
the guilt of the accused. As long as the
evidence presented shows a prima
facie case against the accused, the trial
court judge has sufficient ground to issue
a warrant of arrest against him.

complainant, purportedly representing


the return of his investments; that said
checks were later dishonored for
insufficient funds and closed account;
that petitioner and his co-accused, being
incorporators and directors of the
corporation, had knowledge of its
activities and transactions. These are all
that need to be shown to establish
probable cause for the purpose of issuing
a warrant of arrest. It need not be shown
that the accused are indeed guilty of the
crime charged. That matter should be left
to the trial. It should be emphasized that
before issuing warrants of arrest, judges
merely determine personally the
probability, not the certainty, of guilt of an
accused. Hence, judges do not conduct
a de novo hearing to determine the
existence of probable cause. They just
personally review the initial determination
of the prosecutor finding a probable
cause to see if it is supported by
substantial evidence.10 In case of doubt
on the existence of probable cause, the
Rules allow the judge to order the
prosecutor to present additional
evidence. In the present case, it is
notable that the resolution issued by
State Prosecutor Benny Nicdao
thoroughly explains the bases for his
findings that there is probable cause to
charge all the accused with violation of
Article 315, par. 2(a) of the Revised
Penal Code in relation to P.D. No. 1689.

The general rule is that this Court does


not review the factual findings of the trial
court, which include the determination of
6. Supplemental Affidavit of
probable cause for the issuance of
private complainant to include
warrant of arrest. It is only in exceptional
the incorporators and members
cases where this Court sets aside the
of the board of directors of State The foregoing documents found in the
conclusions of the prosecutor and the
Resources Development
records and examined by respondent
trial judge on the existence of probable
Management Corporation as
judge tend to show that therein private
participants in the conspiracy to complainant was enticed to invest a large cause, that is, when it is necessary to
prevent the misuse of the strong arm of
commit the crime of syndicated sum of money in State Resources
the law or to protect the orderly
estafa. Among those included
Development Management Corporation;
was petitioner Chester De Joya.7 that he issued several checks amounting administration of justice. The facts
obtaining in this case do not warrant the
to P114,286,086.14 in favor of the
application of the exception.
7. Counter-Affidavits of Chester corporation; that the corporation, in turn,
De Joya and the other accused, issued several checks to private
lavvph!l.ne+

In addition, it may not be amiss to note


that petitioner is not entitled to seek relief
from this Court nor from the trial court as
he continuously refuses to surrender and
submit to the courts jurisdiction. Justice
Florenz D. Regalado explains the
requisites for the exercise of jurisdiction
and how the court acquires such
jurisdiction, thus:
x x x Requisites for the exercise of
jurisdiction and how the court acquires
such jurisdiction:
a. Jurisdiction over the plaintiff
or petitioner: This is acquired by
the filing of the complaint,
petition or initiatory pleading
before the court by the plaintiff
or petitioner.
b. Jurisdiction over the
defendant or respondent: This
is acquired by the voluntary
appearance or submission by
the defendant or respondent
to the court or by coercive
process issued by the court
to him, generally by the
service of summons.
c. Jurisdiction over the subject
matter: This is conferred by law
and, unlike jurisdiction over the
parties, cannot be conferred on
the court by the voluntary act or
agreement of the parties.
d. Jurisdiction over the issues of
the case: This is determined and
conferred by the pleadings filed
in the case by the parties, or by
their agreement in a pre-trial
order or stipulation, or, at times
by their implied consent as by
the failure of a party to object to
evidence on an issue not
covered by the pleadings, as
provided in Sec. 5, Rule 10.

e. Jurisdiction over the res (or


the property or thing which is
the subject of the litigation). This
is acquired by the actual or
constructive seizure by the court
of the thing in question, thus
placing it in custodia legis, as in
attachment or garnishment; or
by provision of law which
recognizes in the court the
power to deal with the property
or subject matter within its
territorial jurisdiction, as in land
registration proceedings or suits
involving civil status or real
property in the Philippines of a
non-resident defendant.
Justice Regalado continues to explain:
In two cases, the court acquires
jurisdiction to try the case, even if it has
not acquired jurisdiction over the person
of a nonresident defendant, as long as it
has jurisdiction over the res, as when the
action involves the personal status of the
plaintiff or property in the Philippines in
which the defendant claims an interest. In
such cases, the service of summons by
publication and notice to the defendant is
merely to comply with due process
requirements. Under Sec. 133 of the
Corporation Code, while a foreign
corporation doing business in the
Philippines without a license cannot sue
or intervene in any action here, it may be
sued or proceeded against before our
courts or administrative tribunals.11
Again, there is no exceptional reason in
this case to allow petitioner to obtain
relief from the courts without submitting
to its jurisdiction. On the contrary, his
continued refusal to submit to the courts
jurisdiction should give this Court more
reason to uphold the action of the
respondent judge. The purpose of a
warrant of arrest is to place the accused
under the custody of the law to hold him
for trial of the charges against him. His
evasive stance shows an intent to

circumvent and frustrate the object of this


legal process. It should be remembered
that he who invokes the courts
jurisdiction must first submit to its
jurisdiction.
WHEREFORE, the petition
is DISMISSED.
No costs.
SO ORDERED.