G.R. No.

L-36098 January 21, 1983

ORTIGAS & COMPANY, LIMITED PARTNERSHIP, petitioner,
vs.
JUDGE JOSE B. HERRERA, respondent.
R E S O L U T I O N

PER CURIAM:
G.R. No. L-36098 (Ortigas & Company, Limited Partnership vs. Judge Jose B. Herrera, City Court of
Manila, Branch II, and Emiliano Samson). On August 14, 1969, petitioner and private respondent
entered into an agreement thereby for and in consideration of P55,430.00, the former agreed to sell
to the latter a parcel of land with a special condition that should private respondent as purchaser
complete the construction including the painting of his residential house on said lot within two (2)
years from August 14, 1969, petitioner, as owner, has agreed to refund to private respondent the
amount of P10.00 per square meter. When the aforesaid special condition was fulfilled, private
respondent, on May 17, 1971 accordingly notified in writing the petitioner of the same and requested
for his refund amounting to P4,820.00.
Upon failure of petitioner to pay his obligation, private respondent on May 6, 1972 filed a complaint
for sum of money and damages with the City Court of Manila, Branch II, against petitioner docketed
as Civil Case No. 211673. A motion to dismiss was filed by petitioner on grounds of lack of
jurisdiction, failure of the complaint to state a cause of action and improper avenue. City Court Judge
Jose B. Herrera in his order dated June 27, 1972 held in abeyance the resolution on the motion until
after the trial of the case on the merits.
A reconsideration of the said order having been denied, petitioner on October 12, 1972 filed with the
Court of First Instance of Manila Branch XXVII, a special civil action for certiorari and prohibition with
preliminary injunction docketed as Civil Case No. 88510. A motion to dismiss was filed by private
respondent, and on November 17, 1972, the petition was dismissed on the ground that the claim of
private respondent in his complaint, being less than P10,000.00, is within the exclusive jurisdiction of
the city court.
Petitioner thus filed the present petition and argues among others that: (a) as determined from the
allegations of the complaint, the action is for specific performance of contract; and (b) actions in
which the subject of litigation is not capable of pecuniary estimation such as complaints for specific
performance of contract are exclusively cognizable by the Court of First Instance. Hence, the
decisive question to be resolved in this present petition is whether or not the City Court of Manila,
Branch II, has jurisdiction over the complaint.
The action involved in this case is one for specific performance and not for a sum of money and
wherefore incapable of pecuniary estimation because what private respondent seeks is the
performance of petitioner's obligation under a written contract to make a refund but under certain
specific conditions still to be proven or established. In a case for the recovery of a sum of money, as
the collection of a debt, the claim is considered capable of pecuniary estimation (Lapitan vs. Scandia
Inc., 24 SCRA 479) because the obligation to pay the debt is not conditioned upon any specific fact
or matter. But when a party to a contract has agreed to refund to the other party a sum of money
upon compliance by the latter of certain conditions and only upon compliance therewith may what is
legally due him under the written contract be demanded, the action is one not capable of pecuniary
estimation. The payment of a sum of money is only incidental which can only be ordered after a
determination of certain acts the performance of which being the more basic issue to be inquired
into.
Although private respondent's complaint in the court a quo is designated as one for a sum of money
and damages, an analysis of all the factual allegations of the complaint patently shows that what
private respondent seeks is the performance of petitioner's obligation under the written contract to
make the refund of the rate of P10.00 per square meter or in the total amount of P4,820.00, but only
after proof of having himself fulfilled the conditions that will give rise to petitioner's obligation, a
matter clearly incapable of pecuniary estimation.
In view of the foregoing, the Court RESOLVED to reverse the order appealed from and the
complaint filed with the City Court of Manila, Branch II, docketed as Civil Case No. 211673 is hereby
ordered dismissed for lack of jurisdiction.
[G.R. No. 97805. September 2, 1992.]

NILO H. RAYMUNDO, Petitioner, v. HON. COURT OF APPEALS, Sixteenth Division, Hon. Judge,
RTC, Br. 133, Makati, Metro Manila and GALLERIA DE MAGALLANES ASSOCIATION,
INC., Respondents.

The Barristers Law Office for Petitioner.

Leo M. Caubang for Respondents.


SYLLABUS


1. REMEDIAL LAW; REGIONAL TRIAL COURT; JURISDICTION IN CIVIL CASES NOT CAPABLE OF PECUNIARY
ESTIMATION. Private respondents complaint is an action to compel the petitioner to remove the illegal
and unauthorized installation of glasses at Unit AB-122 of the condominium which is not capable of
pecuniary estimation and falls under the exclusive jurisdiction of the Regional Trial Court Section 33 of Batas
Pambansa Bilang 129 is not applicable in the instant case, but paragraph (1), Section 19 and paragraph (1),
Section 21.

2. ID; ID.; ID.; CRITERION IN DETERMINING WHETHER AN ACTION IS ONE THE SUBJECT MATTER OF
WHICH IS NOT CAPABLE OF PECUNIARY ESTIMATION. A civil action in which the subject of the litigation
is incapable of pecuniary estimation has invariably been held to be within the exclusive original jurisdiction
of the Regional Trial Courts. "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 [now
municipal trial courts] or in the courts of first instance [now regional trial courts] would depend on the
amount of the claim. However, where the basic issue is something other than the right to recover a sum of
money, or where the money claim is purely incidental to, or a consequence of, the principal relief sought,
this Court has considered such actions as cases where the subject of the litigation may not be estimated in
terms of money, and are cognizable exclusively by courts of first instance [now regional trial courts]."cralaw virtua1aw li brary

3. ID.; PROVISIONAL REMEDIES; WRIT OF MANDATORY INJUNCTION; WHEN AVAILABLE. A writ for
mandatory injunction is a provisional remedy. It is provisional because it constitutes a temporary measure
availed of during the pendency of the main action and it is ancillary because it is a mere incident in and is
dependent upon the result of the main action.


D E C I S I O N


NOCON, J.:


This is a petition for certiorari and prohibition with restraining order and preliminary injunction to annul and
set aside the decision of the Court of Appeals dated March 11, 1991 1 dismissing petitioners petition
for certiorari and prohibition which assailed the Orders 2 dated June 1, 1990 3 and June 29, 1990 4 of the
trial court.chanrobles lawlibrary : rednad

It appears on record that on July 5, 1989, the administrator of the Galleria de Magallanes Condominium
discovered that petitioner Nilo Raymundo, who was an owner/occupant of Unit AB-122 of said condominium,
made an unauthorized installation of glasses at the balcony of his unit in violation of Article IV, Section 3
paragraph (d) of the Master Deed and Declaration of Restrictions of the Association, which states that:jgc:chanrobles.com.ph

"d. Nothing shall be done or placed in any unit or in the common areas which is beyond or will impair the
structural strength of the buildings or alter the original architecture, appearance and specifications of the
building, including the external facade thereof." 5

Thereafter, the administrator of said condominium reported said violation to the Board of Directors of the
private respondent Galleria de Magallanes Association, Inc. in a special meeting held on July 8, 1989 and the
former sent a letter dated July 12, 1989 6 to the petitioner demanding the latter to remove the illegal and
unauthorized installation of glasses at his unit.

Petitioner refused, consequently, private respondent filed a complaint for mandatory injunction against
petitioner on February 21, 1990 with the Regional Trial Court of Makati, Branch 133 in Civil Case No. 90-
490.

On March 12, 1990, petitioner filed a Motion for extension of time to file an Answer 7 as well as a Motion for
production of document 8 which were granted in an Order dated March 16, 1990. 9

However, on March 23, 1990, instead of an Answer, petitioner filed a Motion to Dismiss with the trial court
on the ground that said court has no jurisdiction over the present case since a complaint for mandatory
injunction is within the exclusive original jurisdiction of the Metropolitan Trial Court.chanrobl es virtual lawli brary

The Motion to Dismiss was denied in the Order of June 1, 1990, the pertinent portion of which reads:jgc:chanrobles. com.ph

"This is a suit for mandatory injunction. Under Sec. 21 of BP 129, as amended, it is the Regional Trial Court
which has the legal competence to issue the same. Corollarily, the second ground must be denied. The
action is essentially one which falls within the jurisdiction of the Regional Trial Court.

"WHEREFORE, the Motion to Dismiss is hereby denied, for lack of merit." 10

Likewise, petitioners Motion for Reconsideration was denied in the Order of June 29, 1990 which We quote,
to wit:jgc:chanrobles.com. ph

"As denominated in the complaint itself, this is a suit for mandatory injunction, and the nature of the action
as designated by the plaintiff is substantiated by the allegations of the complaint itself. Such being the case,
Sec. 21 of BP 129 governs. The claims for attorneys fees is incidental to the nature of the complaint as one
of mandatory injunction which is also attested by the prayer in the complaint "to remove the illegal and
unauthorized installation of glasses at Unit AB-122 of the Condominium within five (5) days from receipt of
the order . . ." and, therefore, does not affect the legal competence of the Court to act on the complaint."
11

On elevation to the appellate court in a petition for certiorari and prohibition with restraining order and
preliminary injunction, the petition was again dismissed on March 11, 1991.chanrobles.com. ph : virtual law l ibrary

Hence, this petition alleging want of jurisdiction of the trial court to hear and decide private respondents
complaint for mandatory injunction considering that private respondents sole pecuniary claim of P10,000.00
as attorneys fees in Civil Case No. 90-490 is within the original and exclusive jurisdiction of the Metropolitan
Trial Court as provided for under Section 33 of B.P. 129.

We do not agree.

The contention of the petitioner is devoid of merit because private respondents complaint is an action to
compel the petitioner to remove the illegal and unauthorized installation of glasses at Unit AB-122 of the
condominium which is not capable of pecuniary estimation and falls under the exclusive jurisdiction of the
Regional Trial Court Section 33 of Batas Pambansa Bilang 129 is not applicable in the instant case, but
paragraph (1), Section 19 and paragraph (1), Section 21 of said law which provide:jgc:chanrobles.com.ph

"Sec. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive original jurisdiction:chanrob1es vi rtual 1aw library

(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation;"
x x x


"Sec. 21. Original jurisdiction in other cases. Regional Trial Courts shall exercise original jurisdiction:chanrob1es vi rtual 1aw library

(1) In the issuance of writs of certiorari, prohibition, mandamus, quo warranto, habeas corpusand injunction
which may be enforced in any part of their respective regions;"

A civil action in which the subject of the litigation is incapable of pecuniary estimation has invariably been
held to be within the exclusive original jurisdiction of the Regional Trial Courts.chanrobles law library

"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 [now municipal trial courts] or in the courts of first
instance [now regional trial courts] would depend on the amount of the claim. However, where the basic
issue is something other than the right to recover a sum of money, or where the money claim is purely
incidental to, or a consequence of, the principal relief sought, this Court has considered such actions as
cases where the subject of the litigation may not be estimated in terms of money, and are cognizable
exclusively by courts of first instance [now regional trial courts]." 12

As correctly stated by the Court of Appeals, the question for resolution is whether or not the petitioner
violated the provisions of the Master Deed and Declaration of Restriction of the corporation, and if so, to
remove the illegal and unauthorized installation of glasses at Unit AB-122 of the Condominium. Clearly, the
issue is incapable of pecuniary estimation.

In the instant case. the claim of attorneys fees by the private respondent in the amount of P10,000.00 is
only incidental to its principal cause of action which is for the removal of the illegal and unauthorized
installation of the glasses made by the petitioner and therefore, said amount is not determinative of the
jurisdiction of the court.

Note should be taken. however, that the trial court had erroneously considered the complaint as one for
mandatory injunction, misled perhaps by the caption of the complaint.chanrobles.com:cralaw:red

A writ for mandatory injunction is a provisional remedy. It is provisional because it constitutes a temporary
measure availed of during the pendency of the main action and it is ancillary because it is a mere incident in
and is dependent upon the result of the main action. 13

WHEREFORE, the petition for certiorari and prohibition with restraining order and preliminary injunction is
hereby DISMISSED for lack of merit and the decision of the Court of Appeals promulgated on March 11,
1991 is hereby AFFIRMED.

SO ORDERED.

Narvasa, C.J., Padilla, Regalado and Melo, JJ., concur.



[G.R. No. 149243. October 28, 2002]
LOLITA B. COPIOSO, petitioner, vs. LAURO, DOLORES,
RAFAEL, ESTEBAN, and CORAZON, all surnamed COPIOSO,
and COURT OF APPEALS, respondents.
D E C I S I O N
BELLOSILLO, J.:
This petition for review assails the Decision
[1]
of the Court of Appeals in CA G.R. SP
No. 62090 which dismissed petitioner's petition for certiorari as well as its Resolution
denying reconsideration thereof.
On 4 July 2000 respondents Lauro, Dolores, Rafael, Esteban and Corazon, all
surnamed Copioso, filed a complaint
[2]
for reconveyance of two (2) parcels of coconut
land situated in Banilad, Nagcarlan, Laguna, against Lolita B. Copioso, spouses
Bernabe and Imelda Doria, and the estate of deceased Antonio Copioso, as well as
vendees Dolores Reduca, Mercedes Reduca, Rosario Pascua, Elvira Bombasi and
Federico Casabar.
Respondents alleged that they together with their deceased brother Antonio
Copioso were co-owners of the subject property having inherited the same from their
parents, and that through fraud and machination Antonio had the property transferred to
his name and that of spouses Bernabe and Imelda Doria who subsequently sold the
same to third parties. They thus prayed for the reconveyance of the property by virtue
of their being co-owners thereof.
When respondents claimed in a manifestation with motion for bill of particulars that
the assessed value of the subject property was P3,770.00, petitioner Lolita Copioso and
spouses Bernabe and Imelda Doria separately moved to dismiss the complaint on the
ground that it was the Municipal Trial Court (MTC) and not the Regional Trial Court
(RTC) that had jurisdiction over the case considering that the assessed value of the
property was lower than P20,000.00.
The trial court in its twin orders of 5 and 12 September 2000 denied the motions to
dismiss holding that since the subject matter of the action was beyond pecuniary
estimation it was properly within its jurisdiction.
[3]
Lolita Copioso's Motion for
Reconsideration was denied,
[4]
hence, she filed with the Court of Appeals a petition
for certiorari and prohibition praying for the annulment of the twin orders of the trial court
which denied the motions to dismiss and at the same time maintaining her position that
the RTC had no jurisdiction over the case because the assessed value of the property
was below P20,000.00.
The appellate court denied the petition thus affirming the jurisdiction of the RTC
over the complaint for reconveyance. Motion for reconsideration thereon was similarly
denied by the appellate court, hence this petition.
Petitioner Lolita Copioso anchors her argument on Sec. 33, par. (3), of B.P. Blg.
129 otherwise known as The Judiciary Reorganization Act of 1980 as amended by Sec.
3 of RA 7691 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: x 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, attorneys 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.
Petitioner argues that the complaint for reconveyance cannot be resolved unless
the trial court delves upon the issues of "title, possession and interests" of each of the
stakeholders over the subject parcels of land. She asserts that the allegations and relief
prayed for in the complaint coupled with the assessed value of the disputed property
place the action within the exclusive jurisdiction of the MTC and not the RTC.
In turn, private respondents anchor their position on Sec. 19, par. (1), of the same
law which provides -
Sec. 19. Jurisdiction in civil cases. The Regional Trial Courts shall exercise
exclusive original jurisdiction: In all civil actions in which the subject of the litigation
is incapable of pecuniary estimation: x x x
Simply, they claim that the instant complaint for reconveyance is a case of joinder of
causes of action which include the annulment of sale and other instruments of false
conveyance incapable of pecuniary estimation thus within the legal competence of the
RTC.
The law on jurisdiction of trial courts over civil cases is neither ambiguous nor
confusing. Sec. 33, par. (3), in relation to Sec. 19 par. (2) of B.P. 129 as amended by
RA 7691, deals with civil cases capable of pecuniary estimation. On the other hand,
Sec. 33, par. (3), in relation to Sec. 19, par. (1), applies to cases incapable of pecuniary
estimation.
Sec. 33, par. (3), in relation to Sec. 19, par. (2), of B.P. 129, as amended by RA
7691, provides that in civil cases involving sum of money or title to, possession of, or
any interest in real property, jurisdiction is determined on the basis of the amount of the
claim or the assessed value of the real property involved, such that where the sum of
money or the assessed value of the real property does not exceed P20,000.00,
or P50,000.00 in Metro Manila, jurisdiction lies with the MTC; and where it exceeds that
amount, jurisdiction is vested with the RTC.
Indeed, the present dispute pertains to the title, possession and interest of each of
the contending parties over the contested property the assessed value of which falls
within the jurisdictional range of the MTC. Nonetheless, the nature of the action filed,
the allegations set forth, and the reliefs prayed for, forestall its cognizance by the MTC.
As can be readily gleaned from the records, the complaint was for "Reconveyance
and/or Recovery of Common Properties Illegally Disposed, with Annulment of Sales and
other Instruments of False Conveyance, with Damages, and Restraining Order." Private
respondents alleged therein that they were co-owners of the property along with their
deceased brother Antonio Copioso; and that in or about 1998, with fraud and
machination, Antonio together with the spouses Bernabe and Imelda Doria made it
appear in a public document entitled Pagpapatunay ng Kusang Loob na
Pagbabahagi that they were the co-owners of the subject property and had divided the
same equally between themselves to the exclusion of private
respondents. Subsequently, they sold the subdivided lots to the other defendants
namely Dolores Reduca, Mercedes Reduca, Rosario Pascua, Elvira Bombasi and
Federico Casabar.
Private respondents also sought payment of moral damages, exemplary damages,
litigation expenses, attorney's fees plus appearance fees amounting to more or
less P286,500.00. They likewise applied for a TRO pending the issuance of a writ of
preliminary injunction restraining the defendants from further alienating the common
properties. They also prayed of the trial court to order the cancellation, annulment
and/or rescission of the four (4) deeds of absolute sale made in favor of the buyers, and
to order Lolita B. Copioso and the estate of Antonio Copioso to return the price that the
buyer-defendants had paid to them for the land sold.
Clearly, this is a case of joinder of causes of action which comprehends more than
the issue of title to, possession of, or any interest in the real property under contention
but includes an action to annul contracts, reconveyance or specific performance, and a
claim for damages, which are incapable of pecuniary estimation and thus properly within
the jurisdiction of the RTC.
As correctly opined by the appellate court, if the only issue involved herein is naked
possession or bare ownership, then petitioner Lolita Copioso would not be amiss in her
assertion that the instant complaint for reconveyance, considering the assessed value
of the disputed property, falls within the exclusive jurisdiction of the MTC. But as herein
before stated, the issue of title, ownership and/or possession thereof is intertwined with
the issue of annulment of sale and reconveyance hence within the ambit of the
jurisdiction of the RTC. The assessed value of the parcels of land thus becomes merely
an incidental matter to be dealt with by the court, when necessary, in the resolution of
the case but is not determinative of its jurisdiction.
WHEREFORE, the petition is DENIED. The 16 May 2001 Decision of the Court of
Appeals in CA-G.R. SP No. 62090 as well as its 30 July 2001 Resolution denying
reconsideration thereof is AFFIRMED. Costs against petitioner.
SO ORDERED.
Mendoza, and Quisumbing, JJ., concur.
Austria-Martinez, J., on leave.
Callejo, Sr., J., no part in deliberation.

G.R. No. 139031 October 18, 2004
MARIE ANTOINETTE R. SOLIVEN, petitioner,
vs.
FASTFORMS PHILIPPINES, INC., respondent.
D E C I S I O N
SANDOVAL-GUTIERREZ, J .:
For our resolution is the instant petition for review on certiorari
1
assailing the Decision
2
dated
February 8, 1999 and Resolution dated June 17, 1999, both issued by the Court of Appeals in
CA-G.R. CV No. 51946.
Records show that on May 20, 1994, Marie Antoinette R. Soliven, petitioner, filed with the
Regional Trial Court, Branch 60, Makati City a complaint for sum of money with damages
against Fastforms Philippines, Inc., respondent, docketed as Civil Case No. 94-1788.
The complaint alleges that on June 2, 1993, respondent, through its president Dr. Eduardo
Escobar, obtained a loan from petitioner in the amount of One Hundred Seventy Thousand
Pesos (P170,000.00), payable within a period of twenty-one (21) days, with an interest of 3%,
as evidenced by a promissory note
3
executed by Dr. Escobar as president of respondent. The
loan was to be used to pay the salaries of respondents employees. On the same day,
respondent issued a postdated check (dated June 25, 1993)
4
in favor of petitioner in the amount
of P175,000.00 (representing the principal amount of P170,000.00, plus P5,000.00 as interest).
It was signed by Dr. Escobar and Mr. Lorcan Harney, respondent's vice-president. About three
weeks later, respondent, through Dr. Escobar, advised petitioner not to deposit the postdated
check as the account from where it was drawn has insufficient funds. Instead, respondent
proposed to petitioner that the P175,000.00 be "rolled-over," with a monthly interest of 5%
(or P8,755.00). Petitioner agreed to the proposal. Subsequently, respondent, through Dr.
Escobar, Mr. Harney and Mr. Steve Singson, the new president, issued several checks in the
total sum of P76,250.00 in favor of petitioner as payment for interests corresponding to the
months of June, August, September, October and December, 1993. Later, despite petitioners
repeated demands, respondent refused to pay its principal obligation and interests due.
In her complaint, petitioner prays:
"WHEREFORE, premises considered, it is respectfully prayed of this Honorable Court that
judgment be rendered:
(a) holding/declaring defendant (now respondent) guilty of breach of contract x x x;
and
(b) ordering defendant to pay plaintiff (now petitioner) the following sums:
P195,155.00 as actual damages;
P200,000.00 as moral damages;
P100,000.00 as exemplary damages; and
P100,000.00 as attorneys fees, plus the costs of suit.
Plaintiff prays for such other relief just and equitable in the premises."
Respondent, in its answer with counterclaim,
5
denied that it obtained a loan from petitioner; and
that it did not authorize its then president, Dr. Eduardo Escobar, to secure any loan from
petitioner or issue various checks as payment for interests.
After trial on the merits, the court a quo rendered a Decision dated July 3, 1995
6
in favor of
petitioner, the dispositive portion of which reads:
"22. WHEREFORE, the court hereby renders judgment as follows:
22.1. The defendant FASTFORMS PHILS., INC. is ordered to pay the plaintiff,
MARIE ANTOINETTE R. SOLIVEN, the following amounts:
22.1.1. P175,000.00 the amount of the loan and its interest covered by the
check (Exh. 3);
22.1.2. Five (5%) percent of P175,000.00 a month from June 25, 1993 until
the P175,000.00 is fully paid less the sum of P76,250.00 as interest;
22.1.3. P50,000.00 as attorneys fees.
22.2. The COMPLAINT for MORAL and EXEMPLARY damages is DISMISSED.
22.3. The COUNTERCLAIM is DISMISSED; and
22.4. Costs is taxed against the defendant."
Respondent then filed a motion for reconsideration
7
questioning for the first time the trial courts
jurisdiction. It alleged that since the amount of petitioners principal demand (P195,155.00) does
not exceed P200,000.00, the complaint should have been filed with the Metropolitan Trial Court
pursuant to Republic Act No. 7691.
8

Petitioner opposed the motion for reconsideration, stressing that respondent is barred from
assailing the jurisdiction of the trial court since it has invoked the latters jurisdiction by seeking
affirmative relief in its answer to the complaint and actively participated in all stages of the trial.
9

In its Order dated October 11, 1995,
10
the trial court denied respondents motion for
reconsideration, holding that it has jurisdiction over the case because the totality of the claim
therein exceeds P200,000.00. The trial court also ruled that respondent, under the principle of
estoppel, has lost its right to question its jurisdiction.
On appeal, the Court of Appeals reversed the trial courts Decision on the ground of lack of
jurisdiction. The Appellate Court held that the case is within the jurisdiction of the Metropolitan
Trial Court, petitioners claim being only P195,155.00; and that respondent may assail the
jurisdiction of the trial court anytime even for the first time on appeal.
Petitioner filed a motion for reconsideration but was denied by the Court of Appeals in its
Resolution dated June 17, 1999.
11

Hence, this petition.
The fundamental issue for our resolution is whether the trial court has jurisdiction over Civil
Case No. 94-1788.
Section 1 of Republic Act No. 7691, which took effect on April 15, 1994
12
or prior to the
institution of Civil Case No. 94-1788, provides inter alia that where the amount of the demand in
civil cases instituted in Metro Manila exceeds P200,000.00, exclusive of interest, damages of
whatever kind, attorneys fees, litigation expenses, and costs, the exclusive original jurisdiction
thereof is lodged with the Regional Trial Court.
Under Section 3 of the same law, where the amount of the demand in the complaint instituted in
Metro Manila does not exceed P200,000.00, exclusive of interest, damages of whatever kind,
attorneys fees, litigation expenses, and costs, the exclusive original jurisdiction over the same
is vested in the Metropolitan Trial Court, Municipal Trial Court and Municipal Circuit Trial Court.
In Administrative Circular No. 09-94 dated March 14, 1994, we specified the guidelines in the
implementation of R.A. 7691. Paragraph 2 of the Circular provides:
"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." (underscoring ours)
Here, the main cause of action is for the recovery of sum of money amounting to
only P195,155.00. The damages being claimed by petitioner are merely the consequences of
this main cause of action. Hence, they are not included in determining the jurisdictional amount.
It is plain from R.A. 7691 and our Administrative Circular No. 09-94 that it is the Metropolitan
Trial Court which has jurisdiction over the instant case. As correctly stated by the Court of
Appeals in its assailed Decision:
"Conformably, since the action is principally for the collection of a debt, and the prayer for
damages is not one of the main causes of action but merely a consequence thereto, it should
not be considered in determining the jurisdiction of the court."
While it is true that jurisdiction may be raised at any time, "this rule presupposes that estoppel
has not supervened."
13
In the instant case, respondent actively participated in all stages of the
proceedings before the trial court and invoked its authority by asking for an affirmative relief.
Clearly, respondent is estopped from challenging the trial courts jurisdiction, especially when an
adverse judgment has been rendered. In PNOC Shipping and Transport Corporation vs. Court
of Appeals,
14
we held:
"Moreover, we note that petitioner did not question at all the jurisdiction of the lower court x x
x in its answers to both the amended complaint and the second amended complaint. It did so
only in its motion for reconsideration of the decision of the lower court after it had received an
adverse decision. As this Court held in Pantranco North Express, Inc. vs. Court of Appeals
(G.R. No. 105180, July 5, 1993, 224 SCRA 477, 491), participation in all stages of the case
before the trial court, that included invoking its authority in asking for affirmative relief,
effectively barred petitioner by estoppel from challenging the courts jurisdiction. Notably,
from the time it filed its answer to the second amended complaint on April 16, 1985,
petitioner did not question the lower courts jurisdiction. It was only on December 29, 1989
when it filed its motion for reconsideration of the lower courts decision that petitioner raised
the question of the lower courts lack of jurisdiction. Petitioner thus foreclosed its right to
raise the issue of jurisdiction by its own inaction." (underscoring ours)
Similarly, in the subsequent case of Sta. Lucia Realty and Development, Inc. vs. Cabrigas,
15
we
ruled:
"In the case at bar, it was found by the trial court in its 30 September 1996 decision in LCR
Case No. Q-60161(93) that private respondents (who filed the petition for reconstitution of
titles) failed to comply with both sections 12 and 13 of RA 26 and therefore, it had no
jurisdiction over the subject matter of the case. However, private respondents never
questioned the trial courts jurisdiction over its petition for reconstitution throughout the
duration of LCR Case No. Q-60161(93). On the contrary, private respondents actively
participated in the reconstitution proceedings by filing pleadings and presenting its evidence.
They invoked the trial courts jurisdiction in order to obtain affirmative relief the
reconstitution of their titles. Private respondents have thus foreclosed their right to raise the
issue of jurisdiction by their own actions.
"The Court has constantly upheld the doctrine that while jurisdiction may be assailed at any
stage, a litigants participation in all stages of the case before the trial court, including the
invocation of its authority in asking for affirmative relief, bars such party from challenging the
courts jurisdiction (PNOC Shipping and Transport Corporation vs. Court of Appeals, 297
SCRA 402 [1998]). A party cannot invoke the jurisdiction of a court to secure affirmative relief
against his opponent and after obtaining or failing to obtain such relief, repudiate or question
that same jurisdiction (Asset Privatization Trust vs. Court of Appeals, 300 SCRA 579 [1998];
Province of Bulacan vs. Court of Appeals, 299 SCRA 442 [1998]). The Court frowns upon
the undesirable practice of a party participating in the proceedings and submitting his case
for decision and then accepting judgment, only if favorable, and attacking it for lack of
jurisdiction, when adverse (Producers Bank of the Philippines vs. NLRC, 298 SCRA 517
[1998], citing Ilocos Sur Electric Cooperative, Inc. vs. NLRC, 241 SCRA 36 [1995])."
(underscoring ours)
WHEREFORE, the instant petition is GRANTED. The assailed Decision dated February 8, 1999
and Resolution dated June 17, 1999 of the Court of Appeals in CA-G.R. CV No. 51946
are REVERSED. The Decision dated July 3, 1995 and Resolution dated October 11, 1995 of
the Regional Trial Court, Branch 60, Makati City in Civil Case No. 94-1788 are
hereby AFFIRMED.
SO ORDERED.
Panganiban, Corona, and Carpio Morales
*
, JJ., concur.
G.R. No. 119347 March 17, 1999
EULALIA RUSSELL, PUPERTO TAUTHO, FRANCISCO TAUTHO, SUSANA T. REALES,
APITACIO TAUTHO, DANILO TAUTHO, JUDITHA PROS, GREGORIO TAUTHO, DEODITA T.
JUDILLA, AGRIPINO TAUTHO, FELIX TAUTHO, WILLIAM TAUTHO, AND MARILYN
PERALES, petitioners,
vs.
HONORABLE AUGUSTINE A. VESTlL, ADRIANO TAGALOG, MARCELO TAUTHO, JUANITA
MENDOZA, DOMINGO BANTILAN, RAUL BATALUNA AND ARTEMIO
CABATINGAN, respondent.

KAPUNAN, J .:
Before us is a Petition for Certiorari to set aside the Order dated January 12, 1995 issued by
respondent Judge Augustine A. Vestil of the Regional Trial Court of Mandaue City, Branch 56,
dismissing the complaint filed by petitioners on ground of lack of jurisdiction, as well as his Order
dated February 13, 1995 denying petitioners' Motion for Reconsideration of the order of dismissal.
The facts of the case are as follows:
On September 28, 1994, petitioners filed a complaint against private respondents, denominated
"DECLARATION OF NULLITY AND PARTITION," with the Regional Trial Court of Mandaue
City, Branch 56, docketed as Civil Case No. MAN-2275. The complaint, in substance, alleged
that petitioners are co-owners of that parcel of land, Lot 6149 situated in Liloan, Cebu and
containing an area of 56,977.40 square meters, more or less. The land was previously owned
by the spouses Casimero Tautho and Cesaria Tautho. Upon the death of said spouses, the
property was inherited by their legal heirs, herein petitioners and private respondents. Since
then, the lot had remained undivided until petitioners discovered a public document
denominated "DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF A PREVIOUS
ORAL AGREEMENT OF PARTITION," executed on June 6, 1990. By virtue of this deed, private
respondents divided the property among themselves to the exclusion of petitioners who are also
entitled to the said lot as heirs of the late spouses Casimero Tautho and Cesaria Tautho.
Petitioners claimed that the document was false and perjurious as the private respondents were
not the only heirs and that no oral partition of the property whatsoever had been made between
the heirs. The complaint prayed that the document be declared null and void and an order be
issued to partition the land among all the heirs.
1

On November 24, 1994, private respondents filed a Motion to Dismiss
2
the complaint on the
ground of lack of jurisdiction over the nature of the case as the total assessed value of the
subject land is P5,000.00 which under section 33 (3)
3
of Batas Pambansa Blg. 129, as
amended by R.A. No. 7691,
4
falls within the exclusive jurisdiction of the Municipal Circuit Trial
Curt of Liloan, Compostela.
5

Petitioners filed an Opposition to the Motion to Dismiss
6
saying that the Regional Trial Court
has jurisdiction over the case since the action is one which is incapable of pecuniary estimation
within the contemplation of Section 19(1) of B.P. 129, as amended.
7

On January 12, 1995, the respondent judge issued an Order granting the Motion to Dismiss.
8
A
Motion for Reconsideration of said order was filed by petitioners on January 30, 1995 alleging
that the same is contrary to law because their action is not one for recovery of title to or
possession of the land but an action to annul a document or declare it null and void,
9
hence,
one incapable of pecuniary estimation falling within the jurisdiction of the Regional Trial Court.
Private respondents did not oppose the motion for reconsideration.
On February 13, 1995, the respondent judge issued another Order denying the motion for
reconsideration.
10

Hence, this petition wherein the sole issue raised is whether or not the Regional Trial Court has
jurisdiction to entertain Civil Case No. MAN-2275.
We find merit in the petition.
Petitioners maintain the view that the complaint filed before the Regional Trial Court is for the
annulment of a document denominated as "DECLARATION OF HEIRS AND DEED OF
CONFIRMATION OF PREVIOUS ORAL PARTITION," which is clearly one incapable of pecuniary
estimation, thus, cognizable by the Regional Trial Court.
Private respondents, on the other hand, insists that the action is one for re-partition and since the
assessed value of the property as stated in the complaint is P5,000.00, then, the case falls within the
jurisdiction of the Municipal Circuit Trial Court of Liloan, Compostela, Cebu.
For better appreciation of the facts, the pertinent portions of the complaint are reproduced
hereunder:
xxx xxx xxx
3. That the plaintiffs and the defendants are the legal heirs of spouses Casimero
Tautho and Cesaria N. Tautho who died long time ago;
4. That in life the spouses became the owners in fee simple of a certain parcel of
land, which is more particularly described as follows:
A parcel of land containing 56,97740 square meters, more or less,
located at Cotcot, Liloan, Cebu.
designated as Lot 6149 per Technical Description and Certification issued by the
Office of the Land Management copy of which are hereto attached as Annexes "A"
and "A-1" and are made part hereof: total assessed value is P5,000.00;
5. That the passed to the children of the spouses (who are all deceased except for
defendant Marcelo Tautho), namely: Zacarias, Epifania, Vicenta, Felecisimo, Maria,
Lorencia and Marcelo, and which in turn passed to the plaintiffs and defendants upon
their death they being their descendants and legal heirs;
6. That the subject parcel of land has for year been undivided by and among the
legal heirs of said previous owners;
7. That, very recently, plaintiffs discovered a public document, which is a declaration
of heirs and deed of confirmation of a previous oral agreement of partition, affecting
the land executed by and among the defendants whereby defendants divided the
property among themselves to the exclusion of plaintiffs who are entitled thereto;
attached hereto as Annex "B" and is made part hereof is xerox copy of said
document;
8. That the instrument (Annex "B") is false and perjurious and is a complete nullity
because the defendants are not the only heirs of Casimero Tautho; plaintiffs are also
heirs and descendants of said deceased; moreover, there has been no oral partition
of the property;
9. That pursuant to said document (Annex "B"), defendants had procured tax
declarations of the land for their supposed "shares" to the great damage and
prejudice of plaintiffs;
10. That the property in controversy should be divided into seven (7) equal parts
since Casimero Tautho and Cesaria N. Tautho had seven children;
11. That the parties had failed to settle the controversy amicably at the barangay
level; attached hereto as Annex "C" is Certification to file Action;
12. That by reason of the foregoing unjust and illegal act of defendants, plaintiffs
were forced to bring instant action and contract the services of the undersigned
counsel with whom they bind themselves to pay P30,000.00 as attorney's fees.
WHEREFORE, it is most respectfully prayed of this Honorable Court to declare null
and void the document (Annex "B") of declaration of heirs and confirmation and to
order the partition of the land into seven (7) equal parts; each part shall respectively
go to the seven (7) children of Casimero Tautho and considering six (6) of them died
already the same shall go to their children or descendants, and to order the
defendants to pay plaintiffs attorney's fees in the amount of P30,000.00.
Plaintiffs further pray for such other reliefs and remedies just and equitable under the
premises.
11

We agree with petitioners.
The complaint filed before the Regional Trial Court is doubtless one incapable of
pecuniary estimation and therefore within the jurisdiction of said court.
In Singsong vs. Isabela Sawmill,
12
we had the occasion to rule that:
[I]n 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 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 where the subject of the litigation may not be estimated in
terms of money, and are cognizable exclusively by courts of first instance (now Regional
Trial Courts).
13

Examples of actions incapable of pecuniary estimation are those for specific performance,
support, or foreclosure of mortgage or annulment of judgment;
14
also actions questioning the
validity of a mortgage,
15
annulling a deed of sale or conveyance and to recover the price
paid
16
and for rescession, which is a counterpart of specific performance.
17

While actions under Sec. 33(3) of B.P. 129 are also incapable of pecuniary estimation, the law
specifically mandates that they are cognizable by the MTC, METC, or MCTC where the
assessed value of the real property involved does exceed P20,000.00 in Metro Manila, or
P50,000.00, if located elsewhere. If the value exceeds P20,000.00 or P50,000.00 as the case
may be, it is the Regional Trial Courts which have jurisdiction under Sec. 19(2).
18
However, the
subject matter of the complaint in this case is annulment of a document denominated as
"DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF PREVIOUS ORAL
PARTITION."
The main purpose of petitioners in filing the complaint is to declare null and void the document
in which private respondents declared themselves as the only heirs of the late spouses
Casimero Tautho and Cesaria Tautho and divided his property among themselves to the
exclusion of petitioners who also claim to be legal heirs and entitled to the property. While the
complaint also prays for the partition of the property, this is just incidental to the main action,
which is the declaration of nullity of the document above-described. It is axiomatic 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
plaintiff is entitled to all or some of the claims asserted therein.
19

WHEREFORE, premises considered, the petition is hereby GRANTED. The Order dismissing Civil
Case No. MAN-2275, as well as the Order denying the motion for reconsideration of said Order, is
SET ASIDE.
The Regional Trial Court, Branch 56, Mandaue City is ORDERED to proceed with dispatch in
resolving Civil Case No. MAN-2275. No costs.
SO ORDERED.
Davide, Jr., C.J., Melo and Pardo, JJ., concur.
G.R. No. 134230 July 17, 2002
JOVENAL OUANO, petitioner,
vs.
PGTT INTERNATIONAL INVESTMENT CORPORATION and HON. JUDGE RAMON G.
CODILLA, JR.,respondents.
SANDOVAL-GUTIERREZ, J .:
PGTT International Investment Corporation (PGTT), respondent, is a corporation duly organized
under existing laws, with address at YASCO Bldg., M. J. Cuenco Ave., Cebu City.
On December 11, 1997, PGTT filed with the Regional Trial Court (RTC), Branch 20, Cebu City,
a verified complaint against Jovenal Ouano, petitioner, docketed as Civil Case No. CEB- 21319,
entitled "PGTT INTERNATIONAL INVESTMENT CORPORATION, Plaintiff, vs. JUVENAL
OUANO, Defendant," for "Recovery of Ownership and Possession of Real Property and
Damages."
1
In its complaint, PGTT alleged that it is the owner of Lot Nos. 1-10, Block 2 of the
Sunnymeade Crescent Subdivision located at Pit-os, Talamban, Cebu City. Sometime in
October of 1996, PGTT found that Ouano uprooted the concrete monuments of the said lots,
plowed them and planted corn thereon. Despite PGTTs demand that he vacate the lots and
restore them to their original condition, Ouano refused, claiming he is the owner and lawful
possessor of the 380 square meters he occupied. Due to Ouanos wrongful act, PGTT was
deprived of the use of its property and suffered damages in the amount of P100,000.00 a year.
Likewise, PGTT was constrained to file the subject action and hired the services of his counsel
for P100,000.00. PGTT prayed:
"WHEREFORE, in view of all the foregoing, it is most respectfully prayed that after due
notice and hearing, judgment be rendered ordering defendant (Jovenal Ouano) to vacate the
premises and restore the lots to their original condition; pay plaintiff (PGTT) P100,000.00 as
damages per year, beginning October, 1996 until he shall have vacated the premises and
restored the lots to their original condition; payP100,000.00 as attorney's fees; and
pay P50,000.00 as expenses of litigation.
"Plaintiff prays for such other reliefs and remedies, just and equitable under the premises."
2

On February 5, 1998, Ouano filed a motion to dismiss the complaint on the ground that it is the
Municipal Trial Court (MTC), not the RTC, which has jurisdiction over it considering that
the assessed value of the lots involved is only P2,910, as indicated in the latest tax
declaration,
3
citing Section 19 (paragraph 2) and Section 33 (paragraph 3) of Batas Pambansa
Bilang 129 (The Judiciary Reorganization Act of 1980), as amended by Republic Act No. 7691.
4

In its opposition to Ouanos motion, PGTT contends that the RTC has jurisdiction since
the market value of the lots is P49,760.00.
5
Besides, the complaint is not only an action for
recovery of ownership and possession of real property, but also for damages
exceeding P100,000.00, over which claim the RTC has exclusive original jurisdiction under
Section 19 (paragraph 8) of the same law.
On March 6, 1998, the RTC, presided by Judge Ramon G. Codilla, Jr., issued an Order denying
the motion to dismiss, holding that:
"This court believes that this court has jurisdiction to try this case considering that the real
properties consist of ten parcels of land in a subdivision and the court takes note that there is
a discrepancy somewhere by the Office of the City Assessor in the Assessment of the
parcels of land for only less thanP2,000.00 and that the government is very much at a loss
by these unrealistic valuation."
6

Ouano filed a motion for reconsideration but was likewise denied by the RTC in its Order dated
May 27, 1998. The trial court ruled it has jurisdiction over the case because "(i)t is of judicial
knowledge that the real properties situated in Cebu City command a higher valuation than those
indicated in the tax declaration. The observation of plaintiffs (PGTTs) counsel as to the issue
on damages is likewise sustained considering that, being a corporation, it may have incurred
damages in the form of unrealized profits."
7

Hence the present petition for certiorari filed by Ouano under Rule 65 of the 1997 Rules of Civil
Procedure, as amended, assailing the Orders of respondent judge dated March 6, 1998 and
May 27, 1998 as having been issued with grave abuse of discretion amounting to lack or excess
of jurisdiction.
At the outset, it is necessary to stress that a direct recourse to this Court is highly improper, for it
violates the established policy of strict observance of the judicial hierarchy of courts.
8
We need
to reiterate, for the guidance of petitioner, that this Courts original jurisdiction to issue a writ of
certiorari (as well as prohibition, mandamus,quo warranto, habeas corpus and injunction)
is concurrent with the Court of Appeals (CA), as in the present case, and with the RTCs in
proper cases within their respective regions.
9
However, this concurrence of jurisdiction does not
grant a party seeking any of the extraordinary writs the absolute freedom to file his petition with
the court of his choice. This Court is a court of last resort, and must so remain if it is to
satisfactorily perform the functions assigned to it by the Constitution and immemorial
tradition.
10
The hierarchy of courts determines the appropriate forum for such petitions. Thus,
petitions for the issuance of such extraordinary writs against the first level ("inferior") courts
should be filed with the RTC, and those against the latter, with the CA.
11
A direct invocation of
this Courts original jurisdiction to issue these writs should be allowed only when there are
special and important reasons therefor, clearly and specifically set out in the petition. This is the
established policy. It is a policy that is necessary to prevent inordinate demands upon this
Courts time and attention which are better devoted to those matters within its exclusive
jurisdiction, and to prevent further over-crowding of its docket.
12
Unfortunately, the instant
petition does not allege any special and compelling reason to justify a direct recourse to this
Court. However, we deem it more appropriate and practical to resolve the controversy in order
to avoid further delay, but only in this instance.
The lone issue for our resolution is whether the RTC has jurisdiction over Civil Case No. CEB-
21319.
The complaint seeks to recover from private respondent the ownership and possession of the
lots in question and the payment of damages. Since the action involves ownership and
possession of real property, the jurisdiction over the subject matter of the claim is determined by
the assessed value, not the market value,thereof, pursuant to Batas Pambansa Blg. 129, as
amended by R.A. 7691. Section 33 (paragraph 3) of the said law 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:
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, attorneys 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.
x x x." (Emphasis ours)
Likewise, Section 19 (paragraph 2) of the same law reads:
"Sec. 19. Jurisdiction in civil cases. - The Regional Trial Court shall exercise exclusive
originaljurisdiction:
x x x.
(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." (Emphasis ours)
It is undisputed that the assessed value of the property involved, as shown by the
corresponding tax declaration, is only P2,910.00. As such, the complaint is well within the
MTCs P20,000.00 jurisdictional limit.
The finding of respondent judge that the value of the lots is higher than that indicated in the tax
declaration and that, therefore, the RTC has jurisdiction over the case is highly speculative. It is
elementary that the tax declaration indicating the assessed value of the property enjoys the
presumption of regularity as it has been issued by the proper government agency.
Respondent judge further held that since the complaint also seeks the recovery of damages
exceedingP100,000.00, then it is within the competence of the RTC pursuant to Section 19
(paragraph 8) of Batas Pambansa Blg. 129, as amended by R.A. 7691, which states:
"SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive original
jurisdiction:
x x x
"(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 above mentioned items exceeds Two hundred
thousand pesos (P200,000.00)." (Emphasis ours)
The above provision does not apply to the instant case. It is applicable only to "all other cases"
other than an action involving title to, or possession of real property in which the assessed
value is the controlling factor in determining the courts jurisdiction. Besides, the same
provision explicitly excludes from the determination of the jurisdictional amount the demand
for "interest, damages of whatever kind, attorneys fees, litigation expenses, and
costs". The exclusion of such damages is reiterated in Section 33, paragraph 3 of the
same Batas Pambansa Blg. 129, as amended, quoted earlier. The said damages are merely
incidental to, or a consequence of, the main cause of action for recovery of ownership and
possession of real property. In this connection, this Court issued Administrative Circular No. 09-
94 setting the guidelines in the implementation of R.A. 7691. Paragraph 2 states:
"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. 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)
We thus find that in issuing the assailed orders denying petitioners motion to dismiss, thus
taking cognizance of the case, the RTC committed grave abuse of discretion.
WHEREFORE, the instant petition is GRANTED. The assailed Orders issued by respondent
RTC on March 6, 1998 and May 27, 1998 in Civil Case No. CEB-21319 are SET ASIDE.
Accordingly, the complaint is orderedDISMISSED.
SO ORDERED.
Puno, Panganiban, and Carpio, JJ., concur.
[G.R. No. 136109. August 1, 2002]
RADIO COMMUNICATIONS OF THE PHILIPPINES, INC., petitioner, vs.
COURT OF APPEALS and MANUEL DULAWON, respondents.
D E C I S I O N
YNARES-SANTIAGO, J .:
This is a petition for review of the decision of the Court of Appeals
[1]
in CA-G.R. SP
No. 45987 dated April 30, 1998
[2]
and its resolution dated October 15, 1998
[3]
denying the
motion for reconsideration.
On June 18, 1997, private respondent Manuel Dulawon filed with the Regional Trial
Court of Tabuk, Kalinga, Branch 25, a complaint for breach of contract of lease with
damages against petitioner Radio Communications of the Philippines, Inc.
(RCPI). Petitioner filed a motion to dismiss the complaint for lack of jurisdiction
contending that it is the Municipal Trial Court which has jurisdiction as the complaint is
basically one for collection of unpaid rentals in the sum of P84,000.00, which does not
exceed the jurisdictional amount of P100,000.00 for Regional Trial Courts. The trial
court denied the motion to dismiss,
[4]
as well as petitioners motion for
reconsideration.
[5]
Hence, petitioner went to the Court of Appeals on a petition for
certiorari. On April 30, 1998, the Court of Appeals dismissed the petition. The
dispositive portion thereof reads:
WHEREFORE, the petition is hereby DENIED DUE COURSE and is
DISMISSED. Costs against petitioner.
SO ORDERED.
[6]

The motion for reconsideration of the foregoing decision was denied on October 15,
1998. Hence, this petition.
The issue for resolution in this petition is whether or not the Regional Trial Court has
jurisdiction over the complaint filed by private respondent.
Pertinent portion of Batas Pambansa Blg. 129, as amended by Republic Act No.
7691, provides:
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;
x x x x x x x x x
(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).
[7]

Corollary thereto, Administrative Circular No. 09-94, states:
x x x x x x x x x
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. 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.
x x x x x x x x x.
In Russell, et al., v. Vestil, et al.,
[8]
the Court held that in determining whether an
action is one the subject matter of which is not capable of pecuniary estimation, the
nature of the principal action or remedy sought must first be ascertained. If it is primarily
for the recovery of a sum of money, the claim is considered capable of pecuniary
estimation, and jurisdiction over the action will 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, the action is one where the subject of the litigation may not be
estimated in terms of money, which is cognizable exclusively by Regional Trial Courts.
It is axiomatic 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 plaintiff is entitled to all or some of the claims
asserted therein.
[9]

In the case at bar, the allegations in the complaint plainly show that private
respondents cause of action is breach of contract. The pertinent portion of the
complaint recites:
x x x x x x x x x
2. That sometime during the end of the year 1995, defendant through its
appropriate officials negotiated with plaintiff the lease of a portion of the latters
building x x x
3. That the lease contract was effective for a period of three (3) years of from
January 1, 1996 to January 1, 1998 with advance payment for the year 1996. The
advance was not however given in lump sum but on installment. One check that was
given in payment of one months rental for 1996 was even stale and had to be changed
only after demand;
4. That as per contract the monthly rental for 1997 was P3,300.00 while for 1998,
it is P3,700.00;
5. That the defendant surreptitiously removed its equipments and other
personalities from the leased premises and failed to pay rentals due for the months of
January to March 1997 to the damage and prejudice of plaintiff; that this failure and
refusal on the part of plaintiff accelerated the payment of all rentals for each month
for the years 1997 and 1998;
6. That the acts of defendant amounts to a breach of contract which is unlawful
and malicious, as in fact, it caused plaintiff serious anxiety, emotional stress, and
sleepless nights for which he is entitled to moral damages;
7. That plaintiff conveyed his feelings to Mr. Ronald C. Manalastas as evidenced
by a letter dated January 7, 1997 a copy of which is hereto attached to form part
hereof as Annex B. This was later followed by a letter of plaintiffs counsel a
machine copy of which is hereto attached to form part hereof and marked as Annex
C. Both these letters landed on deaf ears thereby aggravating the worries/anxieties
of plaintiff;
8. That the period agreed is for the benefit of both parties and any unilateral
termination constitutes breach of contract;
9. That defendant actually used the leased premises during the year 1996; that had
it not been for the contract, plaintiff could have leased the premises to other persons
for business purposes; that this unlawful and malicious breach of contract cannot be
lawfully countenanced hence defendant must be taught a lesson by being ordered to
pay exemplary damages;
x x x x x x x x x.
[10]

It is settled that a breach of contract is a cause of action either for specific
performance or rescission of contracts.
[11]
In Manufacturers Distributors, Inc. v. Siu
Liong,
[12]
the Court held that actions for specific performance are incapable of pecuniary
estimation and therefore fall under the jurisdiction of the Regional Trial Court.
[13]
Here,
the averments in the complaint reveal that the suit filed by private respondent was
primarily one for specific performance as it was aimed to enforce their three-year lease
contract which would incidentally entitle him to monetary awards if the court should find
that the subject contract of lease was breached. As alleged therein, petitioners failure
to pay rentals due for the period from January to March 1997, constituted a violation of
their contract which had the effect of accelerating the payment of monthly rentals for the
years 1997 and 1998. The same complaint likewise implied a premature and unilateral
termination of the term of the lease with the closure of and removal all communication
equipment in the leased premises.
[14]
Under the circumstances, the court has to
scrutinize the facts and the applicable laws in order to determine whether there was
indeed a violation of their lease agreement that would justify the award of rentals and
damages. The prayer, therefore, for the payment of unpaid rentals in the amount of
P84,000.00 plus damages consequent to the breach is merely incidental to the main
action for specific performance. Similarly, in Manufacturers Distributors Inc.,
[15]
the
Court explained
x x x x x x x x x
That plaintiffs complaint also sought the payment by the defendant of P3,376.00,
plus interest and attorneys fees, does not give a pecuniary estimation to the litigation,
for the payment of such amounts can only be ordered as a consequence of the specific
performance primarily sought. In other words, such payment would be but an incident
or consequence of defendant's liability for specific performance. If no such liability is
judicially declared, the payment can not be awarded. Hence, the amounts sought do
not represent the value of the subject of litigation.
Subject matter over which jurisdiction can not be conferred by consent, has
reference, not to the res or property involved in the litigation nor to a particular case,
but to the class of cases, the purported subject of litigation, the nature of the action
and of the relief sought (Appeal of Maclain, 176 NW. 817).
Specifically, it has been held that:
The Court has no jurisdiction of a suit for specific performance of a contract,
although the damages alleged for its breach, if permitted, are within the amount of
which that court has jurisdiction. (Mebane Cotton Breeding Station. vs. Sides, 257
SW. 302; 21 C.J.S. 59, note).
x x x x x x x x x
Clearly, the action for specific performance case, irrespective of the amount of
rentals and damages sought to be recovered, is incapable of pecuniary estimation,
hence cognizable exclusively by the Regional Trial Court. The trial court, therefore, did
not err in denying petitioners motion to dismiss.
WHEREFORE, in view of all the foregoing, the petition is DENIED and the assailed
decision of the Court of Appeals in CA-G.R. SP No. 45987 is AFFIRMED.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug, Kapunan, and Austria-Martinez, JJ., concur.
G.R. No. L-46000 March 18, 1985
GLICERIO AGUSTIN (Deceased) as Administrator of the Intestate Estate of Susana
Agustin, petitioner-plaintiff-appellant,
vs.
LAUREANO BACALAN and the PROVINCIAL SHERIFF OF CEBU, respondents-defendants-
appellees.

GUTIERREZ, JR., J .:
The precursor of this case was a complaint for ejectment with damages filed by plaintiff-appellant
Agustin, as adininistrator of the Intestate Estate of Susana Agustin, against defendant-appellee
Bacalan, before the City Court of Cebu.
Bacalan is a lessee of a one-door ground floor space in a building owned by the late Susana
Agustin. Due to nonpayment of rentals despite repeated demands an action to eject him was filed.
In his complaint, the plaintiff-appellant prayed that the defendant-appellee be ordered to immediately
vacate the place in question, to pay plaintiff-appellant the sum of P2,300.00 representing arrearages
in rentals plus the corresponding rentals until he actually vacates the place, attorney's fees,
expenses, and costs.
In his answer, the defendant-appellee included a counter-claim alleging that the present action was
"clearly unfounded and devoid of merits, as it is tainted with malice and bad faith on the part of the
plaintiff for the obvious reason that plaintiff pretty well knows that defendant does not have any
rentals in arrears due to the estate of Susana Agustin, but notwithstanding this knowledge, plaintiff
filed the present action merely to annoy, vex, embarrass and inconvenience the defendant." He
stated, "That by virtue of the unwarranted and malicious filing of this action by the plaintiff against the
defendant, the latter suffered, and will continue to suffer, actual and moral damages in the amount of
no less than P50,000.00; P10,000.00 in concept of exemplary damages. In addition, defendant has
been compelled to retain the services of undersigned counsel to resist plaintiffs' reckless, malicious
and frivolous claim and to protect and enforce his rights for which he obligated himself to pay the
further sum of P3,500.00 as attorney's fees."
The City Court of Cebu subsequently rendered judgment dismissing the counterclaim and ordering
the defendant to vacate the premises in question and to pay the plaintiff the sum of P3,887.10 as
unpaid back rentals and the sum of P150.00 as attorney's fees' From this decision, the defendant
filed an appeal with Branch Ill of the Court of First Instance of Cebu. The case was designated as
Civil Case No. R-12430.
Availing of Republic Act 6031 which does away with trials de novo in appeals before it, the Court of
First Instance rendered a decision, the dispositive portion of which reads:
WHEREFORE, based on all the foregoing considerations, the appealed judgment is
hereby set aside. Judgment is hereby required in favor of the defendant
1. Ordering the plaintiff to pay.
a) P10,000.00 as moral damages;
b) P5,000.00 as exemplary damages;
c) P1,000.00 as attorney's fees; and
2. With costs against plaintiff.
JUDGMENT REVERSED.
No appeal was taken by the plaintiff-appellant. The decision lapsed into finality and became
executory. A writ of execution was issued by virtue of which a notice to sell at public auction real
properties belonging to the estate of Susana Agustin was issued by the Deputy Sheriff to satisfy
judgment in the case. Plaintiff's counsel filed a motion for reconsideration, confessing his fault and
giving the reason why he failed to perfect the appeal on time. The motion was denied.
Thereafter, with the aid of new counsel, the plaintiff-appellant filed a complaint with Branch V, Court
of First Instance of Cebu, against the defendant and the Deputy Sheriff of Cebu for the declaration of
the nullity of the above-cited decision of Branch III, Court of First Instance of Cebu in the ejectment
case on the ground that the exercise of its appellate jurisdiction was null and void from the beginning
for the following reasons:
(a) It grants relief in the total sum of P16,000.00 (exclusive of costs) distributed thus:
P10,000.00 as moral damages
P5,000.00 as exemplary damages
P1,000.00 as attorney's fees
which is clearly beyond the jurisdiction of the City Court of Cebu; Section 88 of the
Judiciary Act of 1948, as amended by Rep. Acts Nos. 2613 and 3828, limits the
jurisdiction of the city courts in civil cases to P10,000.00 as the maximum amount of
the demand (exclusive of interest and costs);
(b) Moreover, said Decision (Annex "G") grants moral damages to the defendant in
the sum of P10,000.00 which constitutes a grave abuse of discretion amounting to
lack of jurisdiction, there being no evidence to support it and the subject matter of the
suit in Civil Case No. R-13504 being purely contractual where moral damages are
not recoverable.
A motion to dismiss was filed by the defendant on the grounds that the plaintiff has no cause of
action and that the court lacks jurisdiction to declare the nullity of a decision of another branch of the
Court of First Instance of Cebu.
While rejecting the second ground for the motion to dismiss, the court sustained the defendant and
ruled:
Clearly from a reading of the complaint, the plaintiff seeks the annulment of the
decision rendered by the Third Branch of this Court because the award exceeded the
jurisdiction amount cognizable by the City Court of Cebu and the said Branch III of
this Court has no jurisdiction to award the defendants herein (plaintiff in Civil Case
No. 12430) an amount more than P10,000.00;
It is the considered opinion of this Court that this allegation of the herein plaintiff
cannot be availed of as a ground for annulment of a judgment. It may perhaps, or at
most, be a ground for a petition for certiorari. But then, the remedy should be availed
of within the reglementary period to appeal. Nevertheless, even if the plaintiff did take
his cause by certiorari, just the same, it would have been futile....
xxx xxx xxx
In fine, this Court believes that the present complaint fails to allege a valid cause of
action as the same is only a clear attempt at utilizing the remedy for the annulment of
the judgment rendered by this Court in Civil Case No. 12430 to offset the adverse
effects of failure to appeal.
Plaintiff-appellant's motion for reconsideration was denied, prompting him to file an appeal before the
Court of Appeals, which, in a resolution, certified the same to us on the ground that it involves pure
questions of law.
We ruled in Macabingkil v. People's Homesite and Housing Corporation (72 SCRA 326, citing Reyes
v. Barretto-Datu, 94 Phil. 446, 448-449)-
Under our rules of procedure, the validity of a judgment or order of the court, which
has become final and executory, may he attacked only by a direct action or
proceeding to annul the same, or by motion in another case if, in the latter case, the
court had no jurisdiction to enter the order or pronounce the judgment (section 44,
Rule 39 of the Rules of Court). The first proceeding is a direct attack against the
order or judgment, because it is not incidental to, but is the main object of, the
proceeding. The other one is the collateral attack, in which the purpose of the
proceedings is to obtain some relief, other than the vacation or setting aside of the
judgment, and the attack is only an incident. (I Freeman on Judgments, sec. 306,
pages 607-608.) A third manner is by a petition for relief from the judgment order as
authorized by the statutes or by the rules, such as those expressly provided in Rule
38 of the Rules of Court, but in this case it is to be noted that the relief is granted by
express statutory authority in the same action or proceeding in which the judgment or
order was entered ...
The question is thus poised, whether or not the present action for the annulment of the judgment in
the ejectment case is the proper remedy after it has become final and executory.
To this procedural dilemma, the solution lies in the determination of the validity of the judgment
sought to be annulled, for against a void judgment, plaintiff-appellant's recourse would be proper.
There is no question as to the validity of the court's decision with respect to the issue of physical
possession of property, the defendant-appellee's right to the same having been upheld. However,
the plaintiff-appellant assails the money judgment handed down by the court which granted
damages to the defendant-appellee. By reason thereof, he seeks the declaration of the nullity of the
entire judgment.
It is the plaintiff-appellant's contention that moral damages may not properly be awarded in
ejectment cases, the only recoverable damages therein being the reasonable compensation for use
and occupancy of the premises and the legal measure of damages being the fair rental value of the
property.
Plaintiff-appellant loses sight of the fact that the money judgment was awarded the defendant-
appellee in the concept of a counterclaim. A defending party may set up a claim for money or any
other relief which he may have against the opposing party in a counterclaim (Section 6, Rule 6,
Revised Rules of Court). And the court may, if warranted, grant actual, moral, or exemplary
damages as prayed for. The grant of moral damages, in the case at bar, as a counterclaim, and not
as damages for the unlawful detention of property must be upheld. However, the amount thereof is
another matter.
Plaintiff-appellant raises the issue of whether or not the Court of First Instance may, in an appeal,
award the defendant-appellee's counterclaim in an amount exceeding or beyond the jurisdiction of
the court of origin.
It is well-settled that a court has no jurisdiction to hear and determine a set-off or counterclaim in
excess of its jurisdiction (Section 5, Rule 5, Revised Rules of Court; Ago v. Buslon, 10 SCRA 202). A
counterclaim beyond the court's jurisdiction may only be pleaded by way of defense, the purpose of
which, however, is only to defeat or weaken plaintiff's claim, but not to obtain affirmative relief
(Section 5, Rule 5, Revised Rules of Court). Nevertheless, the defendant-appellee, in the case at
bar, set up his claim in excess of the jurisdiction of the city court as a compulsory counterclaim.
What is the legal effect of such a move?
Pertinent to our disposition of this question is our pronouncement in the case of Hyson Tan, et al. v.
Filipinas Compania de Seguros, et al., (G.R. No. L-10096, March 23, 1956) later adopted
in Pindangan Agricultural Co., Inc. v. Dans (6 SCRA 14) and the later case of One Heart Club, Inc. v.
Court of Appeals (108 SCRA 416) to wit:
xxx xxx xxx
... An appellant who files his brief and submits his case to the Court of Appeals for
decision, without questioning the latter's jurisdiction until decision is rendered therein,
should be considered as having voluntarily waives so much of his claim as would
exceed the jurisdiction of said Appellate Court; for the reason that a contrary rule
would encourage the undesirable practice of appellants submitting their cases for
decision to the Court of Appeals in expectation of favorable judgment, but with intent
of attacking its jurisdiction should the decision be unfavorable. ...
Thus, by presenting his claim voluntarily before the City Court of Cebu, the defendant-appellee
submitted the same to the jurisdiction of the court. He became bound thereby. The amount of
P10,000.00 being the jurisdictional amount assigned the City Court of Cebu, whose jurisdiction the
defendant-appellee has invoked, he is thereby deemed to have waived the excess of his claim
beyond P10,000.00. It is as though the defendant-appellee had set up a counterclaim in the amount
of P10,000.00 only. May the Court of First Instance then, on appeal, award defendant-appellee's
counterclaim beyond that amount?
The rule is that a counterclaim not presented in the inferior court cannot be entertained in the Court
of First Instance on appeal (Francisco, The Revised Rules of Court in the Philippines, Vol. III, p. 26,
citing the cases of Bernardo v. Genato, 11 Phil. 603 and Yu Lay v. Galmes, 40 Phil. 651). As
explained in Yu Lay v. Galmes "Upon an appeal to a court of first instance from the judgment of a
justice of the peace, it is not possible, without changing the purpose of the appeal, to alter the nature
of the question raised by the complaint and the answer in the original action. There can be no doubt,
therefore, of the scope of the doctrine laid down in the several decisions of the Court. Consequently,
We hold that, upon an appeal to the Court of First Instance, the plaintiff as well as the defendant
cannot file any pleading or allegation which raises a question essentially distinct from that raised and
decided in the justice of the peace court. "This rule was reiterated in cases from Ng Cho Cio v. Ng
Diong (1 SCRA 275) to Development Bank of the Philippines v. Court of Appeals (116 SCRA 636).
Thus, the defendant-appellee's counterclaim beyond P10,000.00, the jurisdictional amount of the city
Court of Cebu, should be treated as having been deemed waived. It is as though it has never been
brought before trial court. It may not be entertained on appeal.
The amount of judgment, therefore, obtained by the defendant-appellee on appeal, cannot exceed
the jurisdiction of the court in which the action began. Since the trial court did not acquire jurisdiction
over the defendant's counterclaim in excess of the jurisdictional amount, the appellate court,
likewise, acquired no jurisdiction over the same by its decisions or otherwise. Appellate jurisdiction
being not only a continuation of the exercise of the same judicial power which has been executed in
the court of original jurisdiction, also presupposes that the original and appellate courts are capable
of participating in the exercise of the same judicial power (See 2 Am. Jur. 850; Stacey Cheese
Company v. R.E. Pipkin, Appt. 155 NC 394, 71 S.E. 442, 37 LRA 606) It is the essential criterion of
appellate jurisdiction that it revises and corrects the proceedings in a cause already instituted, and
does not create that cause (See 2 Am. Jur 850 citing Marbury v. Madison, 1 Cranch US, 137, 2 L.
ed. 60).
It is, of course, a well-settled rule that when court transcends the limits prescribed for it by law and
assumes to act where it has no jurisdiction, its adjudications will be utterly void and of no effect
either as an estoppel or otherwise (Planas v. Collector of Internal Revenue, 3 SCRA 395; Parades v.
Moya, 61 SCRA 526). The Court of First Instance, in the case at bar, having awarded judgment in
favor of the defendant-appellee in excess of its appellate jurisdiction to the extent of P6,000.00 over
the maximum allowable award of P10,000.00, the excess is null and void and of no effect. Such
being the case, an action to declare the nullity of the award as brought by the plaintiff-appellant
before the Court of First Instance of Cebu, Branch V is a proper remedy.
The nullity of such portion of the decision in question, however, is not such as to affect the
conclusions reached by the court in the main case for ejectment. As held in Vda. de Pamintuan
v. Tiglao (53 Phil. 1) where the amount set up by the defendant was not proper as a defense and it
exceeded the inferior court's jurisdiction, it cannot be entertained therein, but the court's jurisdiction
over the main action will remain unaffected. Consequently, the decision over the main action, in the
case at bar, must stand, best remembering that a counter-claim, by its very nature, is a cause of
action separate and independent from the plaintiff's claim against the defendant.
WHEREFORE, the decision of the Court of First Instance of Cebu, Branch III in Civil Case No. R-
12430 for ejectment is hereby DECLARED NULL AND VOID insofar as it awards damages on the
defendant-appellee's counterclaim in excess of P6,000.00 beyond its appellate jurisdiction. The
decision in all other respects is AFFIRMED. The order of the Court of First Instance of Cebu, Branch
V dismissing Civil Case No. R-13462 for declaration of nullity of judgment with preliminary injunction
is hereby MODIFIED, Civil Case No. R-13462 is ordered DISMISSED insofar as the decision sought
to be annulled upholds the defendant's right to possession of the disputed property. The defendant's
counterclaim for damages is GRANTED to the extent of TEN THOUSAND (P10,000.00) PESOS.
The grant of SIX THOUSAND (P6,000.00) PESOS in excess of such amount is hereby declared
NULL and VOID, for having been awarded beyond the jurisdiction of the court.
SO ORDERED.
Teehankee (Chairman), Melencio-Herrera, Plana, Relova, De la Fuente and Alampay, JJ., concur.
G.R. No. 83545 August 11, 1989
ADELFO MACEDA, petitioner,
vs.
HON. COURT OF APPEALS AND CEMENT CENTER, INC., respondents.
Charles S. Anastacio for petitioner.
F.M. Carpio & Associates for private respondent.

GRI;O-AQUINO, J .:
The issue raised in this case is the jurisdiction of the metropolitan trial court, in an ejectment case,
over the lessee's counterclaim for the value of improvements exceeding the court's jurisdictional limit
of P20,000. The Court of Appeals dismissed the counterclaim for lack of jurisdiction, hence, this
petition for review by the lessee, Adelfo Maceda.
The leased property originally belonged to the spouses Arturo Victoria and Maxima Monserrat, a
maternal aunt of the petitioner. After the spouses emigrated to the U.S. in 1970, they leased their
house and lot in San Juan, Metro Manila, to the petitioner for P200 per month in 1970. As the house
was old and run down, petitioner proposed to have it repaired and renovated subject to
reimbursement of his expenses. The lessors allowed him to do so (Exh. 3) and requested him to
send them pictures of the work accomplished (Exh. 3-a). He made extensive repairs, tearing down
rotten parts of the house, rebuilding and extending it up to the garage which he converted into a
dining room. He also moved the bathrooms around. The remodelling job cost P40,000. His aunt and
uncle were pleased with the pictures of the remodelled house and made plans to reimburse him for
his expenditures. But Maceda did not stop there. In what appears to be an orgy of building, he
introduced more improvements. He constructed a new driveway, a basketball court and raised the
ground level near the creek, elevated the fence, remodelled the gate, and landscaped the lawn.
In 1972, Arturo Victoria passed away in the United States. In 1973, his aunt's attorney-in-fact, Atty.
Rustico Zapata, Sr., promised to sell the property to him for P125,000 after the title should have
been transferred to his widowed aunt. On February 12, 1974, Atty. Zapata and a Mr. Gomez visited
the place and informed him that his aunt had sold the property to Mrs. Gomez so he should vacate it.
He refused to leave. As a result, Atty. Zapata filed an ejectment case against him on April 4, 1974, in
the Municipal Court of San Juan, Rizal (Civil Case No. 3773).lwph1.t It was dismissed on the plaintiffs own
motion.
In November 1974, Atty. Zapata informed the petitioner that the property had been sold to Pablo
Zubiri for P145,000. He was asked to vacate it. Again, he refused. Zubiri filed an ejectment case
against am (Civil Case No. 37781) in the Municipal Court of San Juan, Rizal. Petitioner insisted that
he was entitled to retain possession of the premises until his expenses were duly reimbursed to him.
The complaint was dismissed for failure to prosecute.
In 1978 Maxima Monserrat died in the United States.
On December 4, 1981, the property was sold by Zubiri to Cement Center, Inc. which obtained TCT
Nos. 30844 to 30845 for the property. The president of the company inspected the premises.
Maceda was asked to vacate the property because the company would build a housing project on it
for its employees. Maceda insisted on being reimbursed for his improvements as the original owners
had promised to do. Formal demands to vacate and for payment of P4,000 monthly rental from April
15, 1982 were sent to him by the company. On January 17, 1984, another ejectment suit was filed
against him in the Metropolitan Trial Court of San Juan, Metro Manila.
In his answer to the complaint, Maceda set up a counterclaim for P240,000, the alleged value of his
improvements.
In its decision, the Metropolitan Trial Court ordered him to vacate the premises and pay the plaintiff
P2,000 per month as reasonable compensation for his use of the premises until he actually vacates,
and P5,000 as attorney's fees. It ordered the plaintiff to pay the defendant P158,000 as the value of
his improvements and repairs, less his accrued rentals of P64,000 as of December 1985 and the
sum of P12,000 which he had earlier received as partial reimbursement.
Both parties appealed to the Regional Trial Court. The Regional Trial Court set aside the inferior
court's decision. On May 19, 1987, it dismissed the ejectment complaint, and ordered Cement
Center to pay Maceda P182,000 for as necessary and useful improvements (pp. 31-49, Rollo of CA-
G.R. No. 12536).
Cement Center filed a petition for review in the Court of Appeals (CA-G.R. SP No. 12536). On
February 17, 1988, the Court of Appeals rendered a decision, modifying the appealed decision, the
dispositive part of which leads thus:
PREMISES CONSIDERED, the decision appealed from is hereby AFFIRMED insofar
as it dismissed the complaint for ejectment filed by petitioner against private
respondent. However, the, portions of the decision declaring petitioner (plaintiff)
under obligation to pay private respondent the sum of P182,200.00 corresponding to
the value of the supposed necessary and useful improvement as well as the
pronouncement therein regarding private respondent's right of retention hereby SET
ASIDE. With costs against petitioner. (p. 35, Rollo.)
The reason for the Court of Appeals' denial of Maceda's claim for reimbursement of the cost of his
improvements was that the MTC lacked jurisdiction over the claim which exceeds P20,000. The
Court of Appeals said:
The Regional Trial Court, however, erred in declaring that petitioner is under
obligation to pay private respondents the sum of P182,200.00 supposedly
corresponding to the value of the necessary and useful improvements he had
introduced on the leased premises, with the right of retention until he shall have been
fully reimbursed therefor. The claim for reimbursement in the total amount of
P240,000.00 was alleged by private respondent by way of counterclaim in his answer
(pp. 40-41, Records). It is clear that the amount of counterclaim, is beyond the
jurisdiction of the Metropolitan Trial Court. Under Section 33, B.P. Blg. 129, the
Metropolitan Trial Court shall have exclusive original jurisdiction over civil actions
where the amount of the demand does not exceed P20,000.00 exclusive of interest
and costs but inclusive of damages of whatever kind. It goes without saying that the
Regional Trial Court has no authority to entertain the counterclaim because it took
cognizance of the case by virtue of its appellate jurisdiction.
Considering that the Metropolitan Trial Court did not have jurisdiction to adjudicate
the counterclaim, the decision of the Regional Trial Court on appeal giving private
respondent the right of retention is without legal basis. Besides, the right of retention
applies only to a possessor in good faith under Article 546 of the Civil Code. In lease,
the lessee knows that his occupancy of the premises continues only during the
lifetime of the lease contract. If he introduces improvements thereon, he does so at
his own risk (Imperial Insurance vs. Simon, 14 SCRA 855).lwph 1. t The rights of a lessee in
good faith, which do not include the right of retention, are defined in Article 1678, . . .
(pp. 34-35, Rollo.)
In his petition for review of that decision in this Court, Maceda assails the setting aside of the money
judgment or award for his improvements in the sum of P182,200, and the rejection of his claim to a
right of retention over the leased premises.
Maceda's petition for review (G.R. No. 83545) has no merit. The Court of Appeals correctly ruled that
the municipal trial court did not have original jurisdiction over his counterclaim as it exceeds
P20,000. Correspondingly, the regional trial court did not have appellate jurisdiction over the claim.
The decision of the Municipal Trial Court of San Juan awarding him P158,000 on his counterclaim,
and that of the Regional Trial Court raising the award to P182,200, were invalid for lack of
jurisdiction. The jurisdiction of the Metropolitan Trial Court in a civil action for sum of money
(Maceda's counterclaim for the value of his improvements is one such action) is limited to a demand
that "does not exceed twenty thousand pesos exclusive of interest and costs but inclusive of
damages of whatever kind." (Sec. 33, subpar. 1, B.P. Blg. 129.) A counterclaim in the municipal or
city court beyond that jurisdictional limit may be pleaded only by way of defense to weaken the
plaintiffs claim, but not to obtain affirmative relief. (Agustin vs. Bacalan, 135 SCRA 340).
Maceda was not a possessor in good faith, i.e., one who possesses in concept of an owner, hence
he had no right to retain possession of the leased premises pending reimbursement of his
improvements thereon. No mere lessee can claim to be a possessor in good faith. (Art. 546, Civil
Code; Eusebio vs. IAC, 144 SCRA 154; Laureano vs. Adil, 72 SCRA 148.)
The promise of the now deceased spouses Arturo Victoria and Maxima Monserrat, to reimburse
Maceda for his improvements was limited only to the initial remodelling job which cost P40,000,
pictures of which he sent to the Victorias and which they approved and promised to reimburse. No
similar promise to pay may be implied with regard to the additional improvements which he made
without their approval and which were evidently intended to improve them out of their property.
In any event, since the undertaking of the Victorias to reimburse Maceda for the P40,000 worth of
improvements which he introduced on their property was not recorded on their title, that promise did
not encumber the property nor bind the purchaser thereof or the successor-in-interest of the
Victorias (Mun. of Victorias vs. CA, 149 SCRA 32).lwph 1. t
While it is true that under B.P. Blg. 877 a lessee may not be ejected on account of the sale or
mortgage of the leased premises, the new owner's need of the premises for the construction of
dwellings for its employees, coupled with the lessee's failure to pay the rentals since December
1981, are, to our mind, a legitimate ground for the judicial ejectment of the lessee.
Maceda's original rental of P200 per month could not be increased by the new owner, Cement
Center, when it acquired the property on December 5, 1981 until B.P. Blg. 25 allowed a cumulative
and compounded 10% yearly increase effective April 15,1982, and a 20% increase effective April 15,
1985, pursuant to B.P. Blg. 867 and 887 and R.A. 6643. Based on those guidelines, the rentals due
from Maceda from December 4, 1981 were as follows:
Per Month Total
December 4, 1981 to April 14, 1982 P 200.00 P 900.00
+10%- April 15, 1982 to April 14, 1983 220.00 2,640.00
April 15, 1983 to April 14, 1984 242.00 2,904.00
Per Month Total
April 15, 1984 to April 14, 1985 P 266.20 P 3,194.40
+20%- April 15, 1985 to April 14, 1986 319.44 3,833.28
April 15, 1986 to April 14, 1987 383.32 4,599.84
April 15, 1987 to April 14, 1988 459.98 5,519.75
April 15, 1988 to April 14, 1989 551.97 6,623.64
April 15, 1989 to August 14, 1989 662.36 2,649.44
P32,864.36
WHEREFORE, the petition for review is granted with respect to the computation of the rentals due
from the petitioner. He is ordered to pay the unpaid rentals of P32,864.36 for his occupancy of the
private respondent's property from December 1981 to August 14, 1989 plus P662.36 monthly
thereafter until he vacates the premises. The dismissal of his counterclaim for the value of his
improvements is affirmed. No pronouncement as to costs.
SO ORDERED.
Narvasa, Cruz, Gancayno, and Medialdea, JJ., concur.
G.R. No. 85740 November 9, 1990
MANUEL P. PARCON, petitioner,
vs.
HON. COURT OF APPEALS, HON. NICOLAS SIAN MONTEBLANCO, in his capacity as
Presiding Judge of Branch XXXI, RTC, Iloilo, JESSIE E. BILLENA, ALFREDO T. JAVELLANA,
PRODUCERS BANK OF THE PHILIPPINES, respondents.
Sixto P. Demaisip for petitioner.
Nicolas P. Sonalan for Producers Bank of the Phil.
Tinga, Fuentes & Tagle Law Firm for J. Billena and A. Javellana.

PARAS, J .:
The sole issue presented for resolution in this case is whether or not the RTC of Iloilo can continue
to exercise jurisdiction over an action for the annulment of the decision of the then CFI (now RTC) of
Manila after the plaintiff therein (herein petitioner) had amended the complaint at a time when Batas
Pambansa Bilang 129 was already in effect.
On November 9, 1982, the petitioner filed a complaint with the respondent RTC of Iloilo Branch XXXI
docketed as Civil Case No. 14708 for the annulment of the decision dated October 28, 1980 of the
then CFI of Manila, Branch XXX in Civil Case No. 116500. The defendants named were Producers
Bank of the Philippines, the City Sheriff of Manila and the Branch Sheriff of the CFI of Manila,
Branch XXX.
On September 11, 1984, the petitioner filed an amended complaint impleading Jessie R. Billena, and
Alfredo T. Javellana, herein private respondents, together with the Intestate Estate of Federico
Salvador and Gregorio Hechanova, as additional defendants. The RTC of Iloilo subsequently
dismissed the amended complaint as against the said estate in view of the commencement of
administration proceedings therefor.
Meanwhile, on March 2, 1987, private respondents filed a motion to dismiss anchored on the ground
that the RTC of Iloilo no longer has jurisdiction over the case since at the time the amended
complaint was filed, jurisdiction over actions for the annulment of judgments of Regional Trial Courts
is already vested with the Court of Appeals under Batas Pambansa Bilang 129. The RTC of Iloilo
denied the motion to dismiss.
On appeal, however, the Court of Appeals rendered a decision,
1
the dispositive portion of which
reads:
WHEREFORE, this Court renders judgment:
1) declaring as null and void the order of respondent judge dated December 28,
1987;
2) declaring that Civil Case No. 14708 pending before respondent judge be
dismissed for lack of jurisdiction and that the plaintiff in said case be advised to bring
the complaint to the proper tribunal in accordance with Batas Pambansa Blg. 129. (p.
46, Rollo)
Hence, the instant petition.
Batas Pambansa Bilang 129, which took effect on January 18, 1983, divested the CFI (now RTC) of
its jurisdiction to hear and decide actions for the annulment of judgments of Regional Trial Courts,
the same being now within the exclusive jurisdiction of the Court of Appeals.
We are in complete agreement with the observations and conclusions of the Court of Appeals that:
From the records, We find that the original complaint was filed before the enactment
of Batas Pambansa Bilang 129. However, the complaint was amended by impleading
the petitioners after said law have taken effect. When a pleading is amended which
introduces a new cause of action or includes additional defendants, the original
pleading is deemed abandoned and the case now stands for trial on the amended
complaint only. (See Insular Veneer, Inc. v. Plan, 73 SCRA 9). Considering that the
amended complaint was filed after the effectivity of Batas Pambansa Blg. 129, the
case falls under the exclusive original jurisdiction of the Court of Appeals (formerly
Intermediate Appellate Court).
Section 9, paragraph 2 of Batas Pambansa Blg. 129 provides, among others:
Sec. 9, Jurisdiction. The Intermediate Appellate Court shall exercise:
xxx xxx xxx
(2) Exclusive original jurisdiction over actions for annulment of judgments of Regional
Trial Court:
xxx xxx xxx
Section 44 of Batas Pambansa Blg. 129 provides as follows:
The provisions of this Act shall be immediately carried out in
accordance with an Executive Order to be issued by the President.
The Court of Appeals, the Courts of First Instance, the Circuit
Criminal Courts, the Juvenile and Domestic Relations Courts, the
Courts of Agrarian Relations, the City Courts, the Municipal Courts,
and the Municipal Circuit Courts, shall continue to function as
presently constituted and organized, until the completion of the
reorganization provided in this Act as declared by the President.
Upon such declaration, the said courts shall be deemed automatically
abolished and the incumbents thereof shall cease to hold office. The
cases pending in the old Courts shall be transferred to the
appropriate Courts constituted pursuant to this Act, together with the
pertinent functions, records, equipment, property and the necessary
personnel. (Emphasis supplied)
xxx xxx xxx
(pp, 2-3, Decision)
Exclusive original jurisdiction having been conferred on the Court of Appeals, the RTC of Iloilo
cannot continue exercising jurisdiction over Civil Case No. 14708. Exclusive jurisdiction precludes
the Idea of co-existence and refers to jurisdiction possessed to the exclusion of others. (Ong v.
Parel, 156 SCRA 768)
WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals is hereby
AFFIRMED.
SO ORDERED.
Melencio-Herrera (Chairman), Padilla, Sarmiento and Regalado, JJ., concur.
G.R. No. 96630 May 15, 1991
NOTRE DAME DE LOURDES HOSPITAL, owned and operated by the SISTERS OF ST. PAUL
DE CHARTRES herein represented by SISTER MARIA LINDA TANALGO, SPC., petitioner,
vs.
HON. HEILLA S. MALLARE-PHILLIPS, Acting Presiding Judge, RTC, Branch 8, La Trinidad,
Benguet, ERNESTO F. BAYUGA, VICTORIA MANALO-CALOGNE, IRENE M. DIMALANTA,
ROSSANN STA. CRUZ, FELIPE TABANDA, RONALDO A. PARAAN, TEOFILA N. BAUTISTA,
GLORIA H. LOPEZ, Members of the Medical Staff of Notre Dame de Lourdes Hospital;
Resident Physicians LILYBETH BARTOLOME, JUDY YAN, FRANCES DE LA CUESTA,
TERESA ESTERA, VICTORIA SALINAS, ASUNCION CORAN, ARLENE NIEVES SESE, JOSEPH
SOTERO, DELFIN PALOR, MANUEL VALLO, of the Notre Dame de Lourdes Hospital; Medical
Interns JOHN ALMIROL, CONCESA BACAMANTE, ANTHONY BALMEO, GABRIEL CRUZ,
DENNEL FULIGA, MONTEMAYOR GONZALO, NEMECIO HERRERA, EDWIN IGNACIO,
ROMMEL MAPAGO, GLORY VALIENTE, SOCORRO ZARATE of the Notre Dame de Lourdes
Hospital and patients FELIPE TABANDA, SR., JULIET OFO-OG, MOHAMMED IBRAHIM,
MARTIN MALUTE, VIOLETA TONGSON and ORLANDO BRABANTE, presently confined at
Notre Dame de Lourdes Hospital, respondents.
Francisco S. Reyes Law Office for petitioners.
Cabato Law Office and Betty Lourdes F. Tabanda for respondents.

GRIO-AQUINO, J .:p
In this petition for certiorari, the petitioner, Notre Dame de Lourdes Hospital (or NDLH) of Baguio
city, owned and operated by the Sisters of St. Paul de Chartres, herein represented by sister Maria
Linda Tanalgo, SPC, as defendant in an injunction suit (Civil Case No. 90-CV-0541) which the
private respondents filed in the Regional Trial Court of Baguio and Benguet at La Trinidad, Benguet,
seeks a review of the trial court's order dated January 11, 1991, denying petitioner's motion to
dismiss the complaint for lack of jurisdiction and improper venue, upholding its jurisdiction over the
action and maintaining that the venue was properly laid.
The lone ground of the petition is that:
The Regional Trial Court, Branch VIII at La Trinidad, Benguet is without jurisdiction to
entertain or hear the complaint and has acted with grave abuse of discretion in
denying the motion to dismiss interposed by the petitioners. (p. 9, Rollo.)
The petition has no merit.
Pursuant to Section 18 of B.P. 129, which provides:
Sec. 18. Authority to define territory appurtenant to each branch.The Supreme
Court shall define the territory over which a branch of the Regional Trial Court shall
exercise its authority. The territory thus defined shall be deemed to be the territorial
area of the branch concerned for purposes of determining the venue of all suits,
proceedings or actions, whether civil or criminal, as well as determining the
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts
over which the said branch may exercise appellate jurisdiction. The power herein
granted shall be exercised with a view to making the courts readily accessible to the
people of the different parts of the region and making the attendance of litigants and
witnesses as inexpensive as possible.
the Supreme Court issued Administrative Order No. 7 defining the territorial jurisdiction of
every regional trial court. As later amended by Supreme Court Administrative Order No. 67,
the territorial jurisdiction of Branches III to VII of the Regional Trial Court of First Judicial
Region, with seat in the City of Baguio, extends over the City of Baguio alone, while that of
Branches VIII to X of the same court, with seat in La Trinidad, Benguet, covers all the
thirteen (13) municipalities of Benguet province, namely, Atok, Bokod, Buguias, Itogon,
Kabayan, Mankayan, Sablan, Tuba, Bakun, Kapanggan, Kibungan, La Trinidad, and Tublay.
The action for injunction filed by the private respondents is a civil action in which the subject of the
litigation is incapable of pecuniary estimation, hence, the regional trial court has exclusive original
jurisdiction over it (Sec. 19, B.P. Blg. 129). It is also a personal action because it does not affect the
title to, or possession of real property, nor asks for the partition, condemnation, or foreclosure of
mortgage on real property. As such, it may be commenced and tried where the defendant or any of
the defendants resides, or may be found, or where the plaintiffs or any of the plaintiffs resides, at the
election of the plaintiff (Sec. 2[b], Rule 4, Rules of Court).
Since two of the plaintiffs in Civil Case No. 90-CV-0541Drs. Felipe Tabanda, Jr. and Rosann Sta.
Cruzare residents of La Trinidad, Benguet (par. 1, Complaint), the complaint could properly be
filed in the Regional Trial Court at La Trinidad, Benguet. That choice of venue is sanctioned by Sec.
2(b), Rule 4 of the Rules of Court. It does not matter that Drs. Tabanda and Sta. Cruz are only two
among thirty-six (36) plaintiffs. It is of no moment that, according to the petitioner, Dr. Tabanda, an
employee of the Benguet Corporation, is not a real party in interest, and that Dr. Sta. Cruz, a
resident physician of NDLH, has no cause of action against the said hospital because she has been
assured that a certificate of residency will be issued to her even if the defendant closes its hospital.
What determines jurisdiction and venue are the allegations of the complaint, not the allegations in
defendant's answer (People vs. Grospe, 157 SCRA 154; Ching vs. Malaya, 153 SCRA 412).
Since the First Judicial Region consists of the provinces of Abra, Benguet, Ilocos Norte, Ilocos Sur,
La Union, Mountain Province, and Pangasinan, and the cities of Baguio, Dagupan, Laoag, and San
Carlos (Sec. 13, B.P. Blg. 129), a writ of injunction issued by the regional trial court sitting in La
Trinidad, Benguet, is enforceable in the City of Baguio. Section 21, sub-paragraph 1, B.P. Blg. 129
provides:
Sec. 21. Original jurisdiction in other cases.Regional Trial Courts shall exercise
original jurisdiction:
(1) In the issuance of writs of certiorari, prohibition, mandamus, quo
warranto, habeas corpus andinjunction which may be enforced in any part of their
respective regions: . . . (Emphasis supplied.)
Clearly, the Regional Trial Court, Branch VIII, in La Trinidad, Benguet, did not abuse its discretion in
denying the petitioner's motion to dismiss the complaint for injunction filed against NDLH, by the
private respondents, for that court does have jurisdiction over the action and the venue is properly
laid before it.
WHEREFORE, the petition for certiorari is dismissed for lack of merit. The temporary restraining
order which was issued by this Court on January 16, 1991 is hereby set aside. Costs against the
petitioner.
SO ORDERED.
Narvasa, Cruz, Gancayco and Medialdea, concur.
G.R. No. 101428 August 5, 1992
DR. ISABELITA VITAL-GOZON, in her official capacity as MEDICAL CENTER CHIEF OF THE
NATIONAL CHILDREN'S HOSPITAL, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and DR. ALEJANDRO S. DE LA
FUENTE, respondents.
Gregorio San Agustin for private respondent.

NARVASA, C.J .:
Whether or not the Court of Appeals has jurisdiction, in a special civil action
of mandamus against a public officer, to take cognizance of the matter of damages sought to be
recovered from the defendant officer, is the chief issue raised in the certiorari action at bar. Also
put the issue is whether or not the Solicitor General may represent the defendant public officer
in the mandamus suit, in so far as the claim for damages is concerned, in light of the Court's
rulings in Urbano , et al. v. Chavez, et al., and Co v. Regional Trial Court of Pasig, et al.
1

There is no dispute about the facts from which these issues arise.
In the early months of 1987 and pursuant to Executive Order No. 119 issued on January 30, 1987
by President Corazon Aquino reorganization of the various offices of the Ministry of Health
commenced; existing offices were abolished, transfers of personnel effected.
At the time of the reorganization, Dr. Alejandro S. de la Fuente was the Chief of the Clinics of the
National Children's Hospital, having been appointed to that position on December 20, 1978. Prior
thereto, he occupied the post of Medical Specialist II, a position to which he was promoted in 1977
after serving as Medical Specialist I of the same hospital for six (6) years (since 1971).
On February 4, 1988 Dr. de la Fuente received notice from the Department of Health that he
would be re-appointed "Medical Specialist II." Considering this is to be a demotion by no less
than two ranks from his post as Chief of Clinics, Dr. de la Fuente filed a protest with the DOH
Reorganization Board. When his protest was ignored, he brought his case to the Civil Service
Commission where it was docketed as CSC Case No. 4. In the meantime "the duties and
responsibilities pertaining to the position of Chief of Clinics were turned over to and were
allowed to be exercised by Dr. Jose D. Merencilla,
Jr."
2

Dr. de la Fuente's case was decided by the Civil Service Commission in a Resolution dated August
9, 1988. In that Resolution, the Commission made the following conclusion and disposition, to wit:
. . (The Commission) declares the demotion/transfer of appellant de la Fuente, Jr.
from Chief of Clinics to Medical Specialists II as null and void: hence, illegal.
Considering further that since the National Children's Hospital was not abolished and
the position therein remained intact although the title or the position of Chief of
Clinics was changed to "Chief of Medical Professional Staff" with substantially the
same functions and responsibilities, the Commission hereby orders that:
1. Appellant de la Fuente, Jr. be retained or considering as never having relinquished
his position of Chief of Clinics (now Chief of Medical Professional Staff) without loss
of seniority rights; and
2. He be paid back salaries, transportation, representation and housing allowances
and such other benefits withheld from him from the date of his illegal
demotion/transfer.
No motion for reconsideration of this Resolution was ever submitted nor appeal therefrom
essayed to the Supreme Court, within the thirty-day period prescribed therefor by the
Constitution.
3
Consequently, the resolution became final, on September 21, 1988.
De la Fuente thereupon sent two (2) letters to Dr. Vital-Gozon, the Medical Center Chief of
National Children's Hospital,
4
demanding the implementation of the Commission's decision. Dr.
Vital-Gozon referred "de la Fuente's claims to the Department of Health Assistant Secretary for
Legal Affairs for appropriate advice and/or action . . (She did this allegedly because, according
to the Solicitor General, she was) unaware when and how a CSC Resolution becomes final and
executory, whether such Resolution had in fact become final and executory and whether the
DOH Legal Department would officially assail the mentioned Resolution."
5
But she did not
answer Dr. de la Fuente's letters, not even to inform him of the referral thereof to the Assistant
Secretary. She chose simply to await "legal guidance from the DOH Legal Department." On the
other hand, no one in the DOH Legal Department bothered to reply to Dr. de la Fuente, or to
take steps to comply or otherwise advise compliance, with the final and executory Resolution of
the Civil Service Commission. In fact, de la Fuente claims that Vital-Gozon had "actually
threatened to stop paying . . . (his) salary and allowances on the pretext that he has as yet no
'approved' appointment even as 'Medical Specialist II' . . .
6

Three months having elapsed without any word from Vital-Gozon or anyone in her behalf, or
any indication whatever that the CSC Resolution of August 9, 1988 would be obeyed, and
apprehensive that the funds to cover the salaries and allowances otherwise due him would
revert to the General Fund, Dr. de al Fuente repaired to the Civil Service Commission and
asked it to enforce its judgment. He was however "told to file in court a petition
for mandamus because of the belief that the Commission had no coercive powers unlike a
court to enforceits final decisions/resolutions.
7

So he instituted in the Court of Appeals on December 28, 1988 an action of "mandamus and
damages with preliminary injunction" to compel Vital-Gozon, and the Administrative Officer, Budget
Officer and Cashier of the NCH to comply with the final and executory resolution of the Civil Service
Commission. He prayed for the following specific reliefs:
(1) (That) . . a temporary restraining order be issued immediately, ordering the
principal and other respondents to revert the funds the of the NCH corresponding to
the amounts necessary to implement the final resolution of the CSC in CSC Case
No. 4 in favor of herein petitioner, Dr. Alejandro S. de la Fuente, Jr., and to pay such
sums which have accrued and due and payable as of the date of said order;
(2) After hearing on the prayer for preliminary injunction, that the restraining order be
converted to a writ of preliminary injunction; and that a writ of preliminary mandatory
injunction be issued ordering principal respondent and the other respondents to
implement in full the said final resolution; and
(3) That, after hearing on the merits of the petition, that judgment be rendered
seeking (sic) permanent writs issued and that principal respondent be ordered and
commanded to comply with and implement the said final resolution without further
delay; and, furthermore, that the principal respondent be ordered to pay to the sums
of P100,000.00 and P20,000.00 as moral and exemplary damages, and P10,000.00
for litigation expenses and attorney's fees.
xxx xxx xxx
The Court of Appeals required the respondents to answer. It also issued a temporary restraining
order as prayed for, and required the respondent to show cause why it should not be converted
to a writ of preliminary injunction. The record shows that the respondents prayed for and were
granted an extension of fifteen (15) days to file their answer "through counsel, who," as the
Court of Appeals was later to point out, 8 "did not bother to indicate his address, thus notice was
sent to him through the individual respondents. . . . (However, no) answer was filed; neither was
there any show cause (sic) against a writ of preliminary injunction." It was a certain Atty. Jose
Fabia who appeared in Vital-Gozon's behalf.
9

About a month afterwards, de la Fuente filed with the same Court a "Supplemental/Amended
Petition" dated February 2, 1989. The second petition described as one for "quo warranto" aside
from "mandamus", added three respondents including Dr. Jose Merencilla, Jr.; and alleged inter
alia that he (de la Fuente) had "clear title" to the position in question in virtue of the final and
executory judgment of the Civil Service Commission; that even after the Commission's judgment had
become final and executory and been communicated to Vital-Gozon, the latter allowed "Dr.
Merencilla, Jr. as 'OIC Professional Service' to further usurp, intrude into and unlawfully hold and
exercise the public office/position of petitioner, (under a duly approved permanent appointment as
'Chief of Clinics' since 1978). De la Fuente thus prayed, additionally, for judgment:
(a) Declaring that principal respondent Dr. Jose D. Merencilla, Jr. is not legally
entitled to the office of "Chief of Clinics" (now retitled/known as "Chief of Medical
Professional Staff," NCH), ousting him therefrom and ordering said respondent to
immediately cease and desist from further performing as "OIC Professional Service"
any and all duties and responsibilities of the said office; (and)
(b) Declaring that the petitioner, Dr. Alejandro S. de la Fuente, Jr., is the lawful or de
jure Chief of Clinics (now known as "Chief of the Medical Professional Staff") and
placing him in the possession of said office/position, without the need of
reappointment or new appointment as held by the Civil Service Commission in its
resolution of August 9, 1988, in CSC Case No. 4.
xxx xxx xxx
Copy of the "Supplemental/Amended Petition" was sent to Atty. Jose A. Fabia, Counsel for
Respondents c/o Dr. Ma. Isabelita Vital-Gozon, etc., National Children's Hospital, E. Rodriguez
Ave., Quezon City (Atty. Fabia's address not being indicated or mentioned in his motion for
Extension of
Time).
10

Again the Court of Appeals required answer of the respondents. Again, none was filed. The
petitions were consequently "resolved on the basis of their allegations and the annexes." The
Appellate Court promulgated its judgment on June 9, 1989.
11
It held that
The question of whether petitioner may be divested of his position as Chief of Clinics
by the expedient of having him appointed to another, lower position is no longer an
issue. It ceased to be such when the resolution in CSC Case No. 4 became final.
The said resolution is explicit in its mandate; petitioner was declared the lawful
and de jure Chief of Clinics (Chief of the Medical Professional Staff) of the National
Children's Hospital, and by this token, respondent Dr. Jose D. Merencilla, Jr. is not
legally entitled to the office. Respondents, particularly Dr. Isabelita Vital-Gozon, had
no discretion or choice on the matter; the resolution had to be complied with. It was
ill-advised of principal respondent, and violative of the rule of law, that the resolution
has not been obeyed or implemented.
and accordingly ordered
. . . respondents, particularly Dr. Isabelita Vital-Gozon, . . . to forthwith comply with,
obey and implement the resolution CSC Case No. 4 (and) . . . Dr. Jose D. Merencilla,
Jr., who is not entitled to the office, . . . to immediately cease and desist from further
performing and acting as OIC Professional Service.
But de la Fuente's prayer for damages founded essentially on the refusal of Gozon, et al. to obey
the final and executory judgment of the Civil Service Commission, which thus compelled him to
litigate anew in a different forum was denied by the Court of Appeals on the ground that the
"petitions (for mandamus) are not the vehicle nor is the Court the forum for . . . (said) claim of
damages."
Gozon acknowledged in writing that she received a copy of the Appellate Tribunal's Decision of
June 9, 1989 on June 15, 1989.
12
Respondent de la Fuente acknowledged receipt of his own
copy on June 15, 1989.
13
Neither Vital-Gozon nor her co-party, Dr. Merencilla, Jr., moved for
reconsideration of, or attempted to appeal the decision.
It was de la Fuente who sought reconsideration of the judgment, by motion filed through new
counsel, Atty. Ceferino Gaddi.
14
He insisted that the Appellate Court had competence to award
damages in a mandamusaction. He argued that while such a claim for damages might not have
been proper in a mandamus proceeding in the Appellate Court "before the enactment of B.P.
Blg. 129 because the Court of Appeals had authority to issue such writs only 'in aid of its
appellate jurisdiction,'" the situation was changed by said BP 129 in virtue of which three levels
of courts the Supreme Court, the Regional Trial Court, and the Court of Appeals were
conferred concurrent original jurisdiction to issue said writs, and the Court of Appeals was given
power to conduct hearings and receive evidence to resolve factual issues. To require him to
separately litigate the matter of damages he continued, would lead to that multiplicity of suits
which is abhorred by the law.
While his motion for reconsideration was pending, de la Fuente sought to enforce the judgment
of the Court of Appeals of June 9, 1989 directing his reinstatement pursuant to the Civil
Service Commission's Resolution of August 9, 1988, supra. He filed on July 4, 1989 a "Motion
for Execution," alleging that the judgment of June 9, 1989 had become final and executory for
failure of Gozon, et al. served with notice thereof on June 16, 1989 to move for its
reconsideration or elevate the same to the Supreme Court.
15
His motion was granted by the
Court of Appeals in a Resolution dated July 7, 1989,
16
reading as follows:
The decision of June 9, 1989 having become final and executory, as prayed for, let
the writ of execution issue forthwith.
The corresponding writ of execution issued on July 13, 1989,
17
on the invoked authority of
Section 9, Rule 39.
18
The writ quoted the dispositive portion of the judgment of June 9, 1989,
including, as the Solicitor General's Office points out, the second paragraph to the effect that the
petitions "are not the vehicle nor is the Court the forum for the claim of damages; (hence,) the
prayer therefor is denied."
The writ of execution notwithstanding, compliance with the June 9, 1989 judgment was not
effected. Consequently, de la Fuente filed, on July 20, 1989, an "Urgent Ex Parte Manifestation
with Prayer to Cite Respondents for Contempt," complaining that although Gozon and her co-
parties had been served with the writ of execution on July 14, they had not complied therewith.
By Resolution dated July 26, 1989, the Court required Gozon and Merencilla to appear before it
on August 3, 1989 to answer the charge and show cause "why they should not be adjudged in
contempt for disobeying and/or resisting the judgment."
19

At the hearing Gozon and Merencilla duly presented themselves, accompanied by their
individual private lawyers one for Gozon (Felipe Hidalgo, Jr.), two for Merencilla (Bernardo S.
Nera and Moises S. Rimando). One other lawyer appeared in their behalf, from the Health
Department, Artemio Manalo, who stated that he was there "in behalf of Jose A. Fabia."
20
They
explained that they had no intention to defy the Court, they had simply referred the matter to
their superiors in good faith; and they were perfectly willing to comply with the judgment,
undertaking to do so "even in the afternoon" of that same day. The Court consequently ordered
them "to comply with their undertaking . . . without any further delay," and report the action
taken towards this end, within five (5) days.
On August 9, 1989, Gozon as "Medical Center Chief," sent a letter to Associate Justice Pedro
A. Ramirez, advising that under Hospital Special Order No. 31 dated August 3, 1989, de la
Fuente had been directed to assume the position of Chief of the Medical Professional Staff, and
that a voucher for the payment of his allowances had been prepared and was being
processed.
21

More than a month later, or more precisely on September 27, 1989, the Court of Appeals
promulgated another Resolution, this time resolving de la Fuente's motion for reconsideration of
June 29, 1989.
22
It modified the Decision of June 9, 1989 by (a) deleting its last paragraph
(disallowing the claim of damages, supra), (b) consequently describing and treating it as a
"PARTIAL DECISION," and (c) scheduling "further proceedings for the purpose of receiving
evidence (of damages)," since said question "cannot be resolved by mere reference to the
pleadings."
23
This was done in reliance on Section 3, Rule 65 of the Rules of Court, invoked by
de la Fuente, which reads as follows:
24

Sec. 3. Mandamus. When any tribunal, corporation, board, or person unlawfully
neglects the performance of an act which the law specifically enjoins as a duty
resulting from an office, trust, or station, or unlawfully excludes another from the use
and enjoyment of a right or office to which such other is entitled, and there is no other
plain, speedy and adequate remedy in the ordinary course of law, the person
aggrieved thereby may file a verified petition in the proper court alleging the facts
with certainty and praying that judgment be rendered commanding the defendant,
immediately or at some other specified time, to do the act required to be done to
protect the rights of the petitioner, and to pay the damages sustained by the
petitioner by reason of the wrongful acts of the defendant.
At about this time, yet another lawyer, Atty. Pedro F. Martinez entered his appearance for
Isabelita Gozon.
25
At his instance, the Court gave him an "opportunity to . . . file a motion for
reconsideration" of the Resolution of September 27, 1989.
26
That motion he filed by registered
mail on November 10, 1989.
27
His basic contentions were (a) that the decision of June 9, 1989
could no longer be altered, having become final and executory and having in fact been
executed, and (b) that under BP 129, the Appellate Court had no jurisdiction over the question
of damages in a mandamus action.
The Office of the Solicitor General also put in an appearance in Gozon's behalf at this juncture,
saying that the case had been referred to it only on November 14, 1989. It, too, sought
reconsideration of the Resolution of September 27, 1989. It filed on November 16, 1989 an
"Omnibus Motion; I. For Reconsideration of Resolution dated September 27, 1989; and II. To
defer hearing on petitioner's claims for damages."
28

Both motions were denied by the Court of Appeals in a Resolution dated January 11, 1991. In that
Resolution, the Court
1) declared that the amended decision had already become final and could no longer
be re-opened because, although "a copy of the amendatory resolution was received
by counsel who was representing Gozon on October 3, 1989," the first motion for
reconsideration was not mailed until November 10, 1989 and the Solicitor General's
"Omnibus Motion" was not filed until November 16, 1989; and
2) prohibited the Solicitor General from representing Gozon "in connection with . . .
(de la Fuente's) claim for damages," on the authority of this Court's ruling
promulgated on March 19, 1990 in G.R. No. 87977 (Urbano, et al. v. Chavez, et al.)
and G.R. No. 88578 (Co v. Regional Trial Court of Pasig).
29

Notice of this Resolution of January 11, 1991 was served on the Solicitor General's Office on
January 18, 1991.
30
Again the Solicitor General sought reconsideration, by motion dated
January 25, 1991 and filed on January 30, 1991.
31
Again it was rebuffed. In a Resolution
rendered on August 7, 1991,
32
served on the Solicitor General's Office on August 20,
1991,
33
the Court of Appeals denied the motion. It ruled that the "question of the authority of the
Solicitor General to appear as counsel for respondent Gozon . . . (had already) been extensively
discussed," and that its "jurisdiction . . . to hear and determine issues on damages proceeds
from Sec. 9, Batas Pambansa 129 as amended."
In an attempt to nullify the adverse dispositions of the Court of
Appeals and obtain "the ultimate and corollary relief of dismissing respondent de la Fuente's claim
for damages" the Solicitor General's Office had instituted the special civil action of certiorari at
bar. It contends that the Court of Appeals is not legally competent to take cognizance of and decide
the question of damages in a mandamus suit. It argues that
1) B.P. Blg. 129 does not confer jurisdiction upon the Court of Appeals to hear, as a trial court,
claims for moral and exemplary damages;
2) assuming that the Court of Appeals does have jurisdiction over the claims for damages, it lost the
power to take cognizance thereof after the Decision of June 9, 1989 had, by its own pronouncement,
become final and executory; and
3) the Urbano and Co doctrines cited by the Appellate Tribunal do not disqualify the Solicitor
General's Office from representing government officials sued in their official capacities and in
damage claims not arising from a felony.
It is in light of these facts, just narrated, that this Court will now proceed to deal with the legal issues
raised in this action. But first, a few brief observations respecting the proceedings in the Civil Service
Commission.
I
The record demonstrates that Vital-Gozon was fully aware of the following acts and events:
34

1) the proceedings commenced by de la Fuente in the Civil Service Commission in protest against
his demotion;
2) the Commission's Resolution of August 9, 1988 as well, particularly, as the direction therein that
de la Fuente be reinstated and paid all his back salaries and other monetary benefits otherwise due
him, this being couched in fairly simple language obviously understandable to persons of ordinary or
normal intelligence;
3) no less than two (2) written demands of de la Fuente for implementation of the CSC's aforesaid
Resolution of August 9, 1988;
4) the petition filed by de la Fuente in the Court of Appeals for enforcement of the CSC Resolution of
August 9, 1988;
5) the extension granted by said Court of Appeals within which to file answer, notice thereof having
been sent directly to her and her co-respondents since the attorney who sought the extension in
their behalf (Atty. Fabia) did not set out his address in his motion for extension;
6) the "supplemental/amended petition" subsequently presented by de la Fuente, copy of which was
sent to Atty. Fabia, c/o Dr. Vital-Gozon; and
7) the Decision and Amendatory Decision sent to her counsel on October 3, 1989.
To all these, her reaction, and that of the officials of the Department of Health concerned, was a
regrettably cavalier one, to say the least. Neither she nor the Health officials concerned accorded
said acts and events any importance. She never bothered to find out what was being done to contest
or negate de la Fuente's petitions and actions, notwithstanding that as time went by, de la Fuente's
efforts were being met with success.
Nothing in the record even remotely suggests that Vital-Gozon merits relief from the final and
executory Resolution of the Civil Service Commission. This Court will not disturb that Resolution. It is
satisfied that no procedural or substantive errors taint that Resolution, or its becoming final and
executory.
II
Now, final and executory judgments are enforced by writ of execution and not by another,
separate action, whether of mandamus or otherwise. Hence, execution of the Civil Service
Commission's decision of August 9, 1988 should have been ordered and effected by the
Commission itself, when de la Fuente filed a motion therefor. It declined to do so, however, on
the alleged ground, as de la Fuente claims he was told, that it "had no coercive powers
unlike a court to enforce its final decisions/resolutions."
35
That proposition, communicated to
de la Fuente, of the Commission's supposed lack of coercive power to enforce its final
judgments, is incorrect. It is inconsistent with previous acts of the Commission of actually
directing execution of its decisions and resolutions, which this Court has sanctioned in several
cases;
36
and it is not in truth a correct assessment of its powers under the Constitution and the
relevant laws.
In an En Banc Decision promulgated on October 15, 1991 in G.R. No. 96938 entitled
"Government Service Insurance System (GSIS) versus Civil Service Commission, et al.,"
37
this
Court declared that in light of the pertinent provisions of the Constitution and relevant statutes

. . . it would appear absurd to deny to the Civil Service Commission the power or
authority to enforce or order execution of its decisions, resolutions or orders which, it
should be stressed, it has been exercising through the years. It would seem quite
obvious that the authority to decide cases in inutile unless accompanied by the
authority to see that what has been decided is carried out. Hence, the grant to a
tribunal or agency of adjudicatory power, or the authority to hear and adjudge cases,
should normally and logically be deemed to include the grant of authority to enforce
or execute the judgments it thus renders, unless the law otherwise provides.
In any event, the Commission's exercise of that power of execution has been
sanctioned by this Court in several cases.
Be this as it may, the fact is that by reason of the Commission's mistaken refusal to execute its final
and executory Resolution of August 9, 1988, extended proceedings have taken place in the Court of
Appeals and certain issues have been expressly raised in relation thereto, supra. Those issues
appear to the Court to be important enough to deserve serious treatment and resolution, instead of
simply being given short shrift by a terse ruling that the proceedings in the Court Service
Commission actually had the power to execute its final and executory Resolution.
III
The first such issue is whether or not the Court of Appeals has jurisdiction to take cognizance of the
matter of damages in a special civil action of mandamus. The Solicitor General's Office argues that
since jurisdiction is conferred only by law, not by agreement of the parties, or acquiescence of the
court, and since the law conferring jurisdiction on the Court of Appeals, Section 9 of B.P. Blg. 129,
makes no reference to "actions for moral and exemplary damages, as those claimed by . . . (de la
Fuente)," it follows that the Court of Appeals has no competence to act on said claim of damages.
And Section 3 of Rule 65, which authorizes the petitioner in amandamus suit to pray for judgment
commanding the defendant inter alia "to pay the damages sustained by the petitioner by reason of
the wrongful acts of the defendant," is "nothing more than a procedural rule allowing joinder of
causes of action, i.e., mandamus and damages," and such an award of damages is allowable only in
actions commenced in Regional Trial Courts but not in the Court of Appeals or this Court.
The argument is specious. It cannot be sustained.
The Solicitor General's Office correctly identifies Section 9, B.P. 129 as the legal provision specifying
the original and appellate jurisdiction of the Court of Appeals. The section pertinently declares that
the "Intermediate Appellate Court (now the Court of Appeals) shall exercise . .," among others:
. . . Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus,
and quo warranto, and auxiliary writs or processes, whether or not in aid of its appellate
jurisdiction . . .
38

The Solicitor General's Office evidently searched said Section 9 for an explicit and specific statement
regarding "actions for moral and exemplary damages," and finding none, concluded that the Court of
Appeals had not been granted competence to assume cognizance of claims for such damages. The
conclusion is incorrect. Section 19, governing the exclusive original jurisdiction of Regional Trial
Courts in civil cases, contains no reference whatever to claims "for moral and exemplary damages,"
and indeed does not use the word "damages" at all; yet it is indisputable that said courts have power
to try and decide claims for moral, exemplary and other classes of damages accompanying any of
the types or kinds of cases falling within their specified jurisdiction. The Solicitor General's theory
that the rule in question is a mere procedural one allowing joinder of an action of mandamusand
another for damages, is untenable, for it implies that a claim for damages arising from the omission
or failure to do an act subject of a mandamus suit may be litigated separately from the latter, the
matter of damages not being inextricably linked to the cause of action for mandamus, which is
certainly not the case.
Now, at the time of the enactment of B.P. 129, the issuance of the extraordinary writs above
mentioned was controlled by the Rules of Court of 1964, as they continue to date to be so controlled.
More particularly, the principal writs of mandamus, prohibition and certiorari were (and continue to
be) governed by Rule 65; the writ ofhabeas corpus, by Rule 102; and the writ of quo warranto, by
Rule 66. The so-called auxiliary writs were (and continue to be) also governed by the same code
e.g., preliminary attachment, by Rule 57; preliminary injunction, by Rule 58, receivership, by Rule 59;
writ of seizure or delivery in a replevin suit, by Rule 60.
At that time, Section 3 of Rule 65 authorized (as it continues to authorize to date) rendition of
judgment in amandamus action "commanding the defendant, immediately or at some other
specified time, to do the act required to be done to protect the rights of the petitioner, and to pay
the damages sustained by the petitioner by reason of the wrongful acts of the defendant."
39
The
provision makes plain that the damages are an incident, or the result of, the defendant's
wrongful act in failing and refusing to do the act required to be done. It is noteworthy that the
Rules of 1940 had an identical counterpart provision.
40

Moreover, Section 4 of the same Rule 65 authorized, as it continues to authorize to date, the
filing of the petition "in the Supreme Court, or, if it relates to the acts or omissions of an inferior
court, or of a corporation, board, officer or person, in a Court of First Instance (now Regional
Trial Court) having jurisdiction thereof," as well as "inthe Court of Appeals (whether or not)
41
in
aid of its appellate jurisdiction."
Worthy of note, too, is that Rule 66 of the Rules of Court similarly authorizes the recovery of
damages in a quo warranto action against a corporate officer an action within the concurrent
jurisdiction of the Court of Appeals as follows:
42

Sec. 14. Liability of officer neglecting to deliver property of corporation to receiver.
An officer of such corporation who refuses or neglects, upon demand, to deliver over
to the receiver all money, property, books, deeds, notes, bills, obligations, and
papers of every description within his power or control, belonging to the corporation,
or in any wise necessary for the settlement of its affairs, or the discharge of its debts
and liabilities, may be punished for contempt as having disobeyed a lawful order of
the court, and shall be liable to the receiver for the value of all money or other things
so refused or neglected to be surrendered, together with all damages that may have
been sustained by the stockholders and creditors of the corporation, or any of them,
in consequence of such neglect or refusal.
An award of damages was and is also allowed in connection with the auxiliary writ of preliminary
attachment, preliminary injunction or receivership which the Court of Appeals has the power to
issue in common with the Supreme Court and the Regional Trial Courts,
43
payable by the
sureties of the bond given in support of the writ, upon seasonable application and summary
hearing.
44

Since it cannot but be assumed that in formulating, and incorporating in BP 129, the provision
governing the jurisdiction of the Intermediate Appellate Court, now Court of Appeals, the Batasang
Pambansa was fully cognizant of the relevant provisions of the Rules of Court just cited, as well as
the rule against multiplicity of actions, it follows that in conferring on the Court of Appeals original
jurisdiction over the special civil action ofmandamus, among others, as well as over the issuance of
auxiliary writs or processes, the Batasang Pambansa clearly intended that said Court should
exercise all the powers then possessed by it under the Rules of Court in relation to said action
of mandamus and auxiliary writs, including the adjudication of damages to the petitioner in the action
in appropriate cases.
IV
The next issue is whether or not the Solicitor General may properly represent a public official
like Dr. Vital-Gozon, who is sued for damages for allegedly refusing to comply with a lawful and
executory judgment of competent authority. The doctrine laid down in the Urbano and Co cases
already adverted to,
45
is quite clear:
. . . (T)he Office of the Solicitor General is not authorized to represent a public official
at any stage of a criminal case. . . .
This observation should apply as well to a public official who is haled to court on
a civil suit for damages arising from a felony allegedly committed by him (Article 100,
Revised Penal Code). Any pecuniary liability he may be held to account for on the
occasion of such civil suit is for his own account. The State is not liable for the same.
A fortiori, the Office of the Solicitor General likewise has no authority to represent him
in such a civil suit for damages.
It being quite evident that Dr. Vital-Gozon is not here charged with a crime, or civilly prosecuted for
damages arising from a crime, there is no legal obstacle to her being represented by the Office of
the Solicitor General.
V
The last issue is whether or not the decision of the Court of Appeals of June 9, 1989 could still be
modified after it was pronounced final and executory and was in fact executed with respect to de la
Fuente's reinstatement to his position and the payment of the salaries and allowances due him.
There would seem to be no question about the timeliness of de la Fuente's motion for
reconsideration of the June 9, 1989 decision. As already narrated, notice of said decision was
served on him on the 15th of June, and his motion for reconsideration was presented on June 29,
1989, or fourteen (14) days after receiving a copy of the judgment, i.e., within the fifteen-day period
prescribed by Section 1, Rule 37 of the Rules of Court for filing a motion for new trial
reconsideration.
This being so, it would certainly have been entirely within the authority of the Court of
Appeals, under normal circumstances, to rule on that motion for reconsideration and, in its
discretion, act favorably on it, as it did through its Resolution of September 27, 1991 by amending
the decision of June 9, 1989, declaring it a partial judgment, and setting a date for reception of
evidence on the la Fuente's claim for damages.
It would also appear that the motions for reconsideration of said Resolution of September 27,
1991 separately submitted in Gozon's behalf, by her own private attorney and by the Solicitor
General's Office, were filed way out of time. As also already pointed out, notice of that
Resolution of September 27, 1991 was served on Gozon's counsel on October 3, 1989 and on
Gozon herself on October 4, 1989; but the motion for reconsideration of Atty. Martinez (Gozon's
private lawyer) was not filed until November 10, 1989, thirty-eight (38) days afterwards, and that
of the Solicitor General, until November 16, 1989, or forty-four (44) days later. What is worse is
that, its motion for reconsideration of November 16, 1989 having been denied by a Resolution
dated January 11, 1991, notice of which it received on January 18, 1991, the Solicitor General's
Office filed still another motion for reconsideration on January 30, 1991, ostensibly directed
against that Resolution of January 11, 1991 but actually seeking the setting aside of the
Resolution of September 17, 1989. In effect it filed a second motion for reconsideration which,
of course, is prohibited by law.
46

However, disposition of the question simply and solely on the foregoing premises is precluded by the
fact that prior to the promulgation by the Appellate Court of its Resolution of September 27, 1989.
granting de la Fuente's motion for reconsideration of June 29, 1989 de la Fuente had asked for
and been granted by the Court of Appeals, authority to execute the decision of June 9, 1989 and had
in fact succeeded in bringing about satisfaction thereof, in so far as concerned his reinstatement to
the position from which he had been illegally ousted and the payment to him his salaries and
allowances.
It has therefore become essential to determine the effect of the execution of said decision of June 9,
1989 at de la Fuente's instance, on the power of the Court of Appeals to modify that judgment as
earlier prayed for by de la Fuente in such a way as to concede the latter's capacity to claim damages
in his mandamus action, and consequently authorize him to present evidence on the matter.
The general rule is that when a judgment has been satisfied, it passes beyond review,
satisfaction being the last act and end of the proceedings, and payment of satisfaction of the
obligation thereby established produces permanent and irrevocable discharge;
47
hence, a
judgment debtor who acquiesces in and voluntarily complies with the judgment, is estopped
from taking an appeal therefrom.
48

On the other hand the question of whether or not a judgment creditor is estopped from
appealing or seeking modification of a judgment which has been executed at his instance, is
one dependent upon the nature of the judgment as being indivisible or not. This is the doctrine
laid down by this Court in a case decided as early as 1925, Verches v. Rios.
49
In that case this
Court held that although "there are cases holding the contrary view,"where the judgment is
indivisible, "the weight of authority is to the effect that an acceptance of full satisfaction of the
judgment annihilates the right to further prosecute the appeal; . . . that a party who has
recovered judgment on a claim which cannot be split up and made the basis of several causes
of action, and afterwards coerced full satisfaction by writ of execution or authority of the court,
cannot maintain an appeal from the judgment against the objections of the judgment debtor;"
and that even partial execution by compulsory legal process at the instance of a party in whose
favor a judgment appealed from was rendered, places said party in estoppel to ask that the
judgment be amended, either "by appeal or answer to his adversary's appeal, or otherwise."
50

A converso, where the judgment is divisible, estoppel should not operate against the judgment
creditor who causes implementation of a part of the decision by writ of execution. This is the
clear import of Verches and the precedents therein invoked. It is an aspect of the principle
above mentioned that is fully consistent not only with the dissenting opinion that "(a)cceptance
of payment of . . . only the uncontroverted part of the claim . . . should not preclude the plaintiff
from prosecuting his appeal, to determine whether he should not have been allowed
more,"
51
but also with logic and common sense.
In this case, the amended judgment of the Court of Appeals is clearly divisible, satisfaction of which
may be "split up." One part has reference to the enforcement of the final and executory judgment of
the Civil Service Commission, that de la Fuente should be reinstated to the position of Chief of
Clinics (now Chief of Medical Professional Staff) without loss of seniority rights and that he be paid
his back salaries and all monetary benefits due him from the date of his illegal demotion. This part is
no longer issuable, and has not in truth been controverted by Gozon herself. The other part has
reference to the damages which de la Fuente contends he suffered as a result of the unjustified
refusal of Gozon and her co-parties to comply with the final and executory judgment of the Civil
Service Commission, and which the Appellate Tribunal has allowed him to prove. Obviously, the
second part cannot possibly affect the first. Whether de la Fuente succeeds or fails in his bid to
recover damages against Gozon, et al. because of their refusal to obey the judgment of the Civil
Service Commission, is a contingency that cannot affect the unalterable enforceability of that
judgment. Similarly, the enforcement of the Commission's judgment (already accomplished by writ of
execution of the Court of Appeals issued at de la Fuente's instance) cannot influence in any manner
the question whether or not there was culpable refusal on the part of Gozon, et al. to comply with
said judgment when first required so to do, and whether de la Fuente did in fact suffer compensable
injury thereby.
It bears stressing that the juridical situation in which de la Fuente finds himself is not of his making. It
is a consequence of circumstances not attributable to any fault on his part, i.e., the unwarranted
refusal or neglect of his superiors to obey the executory judgment of the Civil Service Commission;
the erroneous refusal of the Commission to execute its own decision which made necessary, in de la
Fuente's view, the filing of amandamus action in the Court of Appeals; the initial refusal of the latter
Court to acknowledge his right to damages in connection with the mandamus suit; and ultimately,
the change of view by the Court of Appeals, on de la Fuente's motion, as regards its competence to
take cognizance of the matter of damages in relation to themandamus proceeding.
Under these circumstances, there was no reason whatsoever to defer concession to de la Fuente of
the relief of reinstatement to which he
was indisputably already entitled in the meantime that issues arising after finality of the Civil
Service Commission's judgment were being ventilated and resolved these issues being, to repeat,
whether or not the refusal by Gozon, et al. obey said judgment of the Commission could be justified,
and whether or not, by reason of that refusal to obey, de la Fuente did in fact suffer compensable
injury.
It was therefore correct for the Court of Appeals, albeit by implication, to treat its judgment as
divisible, or capable of being enforced by parts, and to consider de la Fuente as not having been
placed in estoppel to pursue his claim for damages by seeking and obtaining authority for a partial
execution of the judgment. De la Fuente not being in estoppel, it follows that his motion for
reconsideration, timely filed, was not deemed abandoned or waived by the partial execution of the
judgment, and jurisdiction of the Court of Appeals to amend the judgment was retained and not lost.
It follows, too, that since no motion for reconsideration was filed against, or appeal attempted to be
taken from, the Resolution of the Court of Appeals amending its original judgment, within the time
prescribed therefor by law, said amendatory resolution has long since become final and immutable,
particularly in so far as it holds itself competent to take cognizance of the matter of damages and
authorizes the reception of evidence on de la Fuente's claim therefor.
WHEREFORE, the petition is DENIED, and the challenged Resolutions of September 27, 1989,
January 11, 1991 and August 7, 1991 are AFFIRMED, without pronouncement as to costs.
SO ORDERED.
Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Medialdea, Regalado, Davide, Jr.,
Romero, Nocon and Bellosillo, JJ., concur.
G.R. No. L-58877 March 15, 1982
PEPSI-COLA BOTTLING COMPANY, COSME DE ABOITIZ, and ALBERTO M.
DACUYCUY, petitioners,
vs.
HON. JUDGE ANTONIO M. MARTINEZ, in his official capacity, and ABRAHAM TUMALA,
JR., respondents.

ESCOLIN, J .:
This petition for certiorari, prohibition and mandamus raises anew the legal question often brought to
this Court: Which tribunal has exclusive jurisdiction over an action filed by an employee against his
employer for recovery of unpaid salaries, separation benefits and damages the court of general
jurisdiction or the Labor Arbiter of the National Labor Relations Commission [NLRC]?
The facts that gave rise to this petition are as follows:
On September 19, 1980, respondent Abraham Tumala, Jr. filed a complaint in the Court of First
Instance of Davao, docketed as Civil Case No. 13494, against petitioners Pepsi-Cola Bottling Co.,
Inc., its president Cosme de Aboitiz and other company officers. Under the first cause of action, the
complaint averred inter alia that Tumala was a salesman of the company in Davao City from 1977 up
to August 21, 1980; that in the annual "Sumakwel" contest conducted by the company in 1979,
Tumala was declared winner of the "Lapu-Lapu Award" for his performance as top salesman of the
year, an award which entitled him to a prize of a house and lot; and that petitioners, despite
demands, have unjustly refused to deliver said prize Under the second cause of action, it was
alleged that on August 21, 1980, petitioners, "in a manner oppressive to labor" and "without prior
clearance from the Ministry of Labor", "arbitrarily and ilegally" terminated his employment. He prayed
that petitioners be ordered, jointly and severally, to deliver his prize of house and lot or its cash
equivalent, and to pay his back salaries and separation benefits, plus moral and exemplary
damages, attorney's fees and litigation expenses. He did not ask for reinstatement.
Petitioners moved to dismiss the complaint on grounds of lack of jurisdiction and cause of action.
Petitioners further alleged that Tumala was not entitled to the "Sumakwel" prize for having misled the
company into declaring him top salesman for 1979 through various deceitful and fraudulent
manipulations and machinations in the performance of his duties as salesman and depot in-charge
of the bottling company in Davao City, which manipulations consisted of "unremitted cash
collections, fictitious collections of trade accounts, fictitious loaned empties, fictitious product deals,
uncollected loaned empties, advance sales confirmed as fictitious, and route shortages which
resulted to the damage and prejudice of the bottling company in the amount of P381,851.76." The
alleged commission of these fraudulent acts was also advanced by petitioners to justify Tumala's
dismissal.
The court below, sustaining its jurisdiction over the case, denied the motion for reconsideration.
Hence the present recourse.
We rule that the Labor Arbiter has exclusive jurisdiction over the case.
Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign
authority which organizes the court; and it is given only by law.
1
Jurisdiction is never presumed;
it must be conferred by law in words that do not admit of doubt.
2

Since the jurisdiction of courts and judicial tribunals is derived exclusively from the statutes of the
forum, the issue efore Us should be resolved on the basis of the law or statute now in force. We find
that law in Presidential Decree 1691 which took effect on May 1, 1980, Section 3 of which reads as
follows:
SEC. 3. Article 217, 222 and 262 of Book V of the Labor Code are hereby amended
to read as follows:
Article 217. Jurisdiction of Labor Arbiters and the Commission. The Labor Arbiters
shall have the original and exclusive jurisdiction to hear and decide the following
cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Unresolved issues in collective bargaining, including those that involve waged
hours of work and other terms and conditions of employment;
3. All money claims of workers, including those based on non-payment or
underpayment of wages, overtime compensation, separation pay and other benefits
provided by law or appropriate agreement, except claims for employees'
compensation, social security, medicare and maternity benefits;
4. Cases involving household services; and
5. All other claims arising from employer-employee relations, unless expressly
excluded by this Code.
Under paragraphs 3 and 5 of the above Presidential Decree, the case is exclusively cognizable by
the Labor Arbiters of the National Labor Relations Commission.
It is to be noted that P.D. 1691 is an exact reproduction of Article 217 of the Labor Code (P.D.
442), which took effect on May 1, 1974. In Garcia vs. Martinez
3
, an action filed on August 2,
1976 in the Court of First Instance of Davao by a dismissed employee against his employer for
actual, moral and exemplary damages, We held that under Article 217 of the Labor Code, the
law then in force, the case was within the exclusive jurisdiction of the Labor Arbiters and the
National Labor Relations Commission [NLRC]. This Court, per Justice Aquino, rational this
holding thus:
The provisions of paragraph 3 and 5 of Article 217 are broad and comprehensive
enough to cover Velasco's [employee's] claim for damages allegedly arising from his
unjustified dismissal by Garcia [employer]. His claim was a consequence of the
termination of their employer-employee relations [Compare with Ruby Industrial
Corporation vs. Court of First Instance of Manila, L- 38893, August 31, 1977, 78
SCRA 499].
Article 217 of the Labor Code words amended by P.D. 1367, which was promulgated on May 1,
1978, the full text of which is quoted as follows:
SECTION 1. Paragraph [a] of Art, 217 of the Labor Code as amended is hereby
further amended to read as follows:
[a] The Labor Arbiters shall have exclusive jurisdiction hear and decide the following
cases involving all workers, whether agricultural or non-agricultural:
1] Unfair labor practice cases;
2] Unresolved issues in collective bargaining, including those which
involve wages, hours of work, and other terms conditions of
employment; and
3] All other cases arising from employer-employee relations duly
indorsed by the Regional Directors in accordance with the provisions
of this Code.
Provided, that the Regional Directors shall not indorse and Labor Arbiters shall not
entertain claims for moral or other forms of damages.
It will be noted that paragraphs 3 and 5 of Article 217 were deleted from the text of the above decree
and a new provision incorporated therein, to wit: "Provided that the Regional Directors shall not
indorse and Labor Arbiters shall not en certain claims for moral or other forms of damages." This
amendatory act thus divested the Labor Arbiters of their competence to pass upon claims for
damages by employees against their employers.
However, on May 1, 1980, Article 217, as amended by P.D. 1367, was amended anew by P.D.
1691. This last decree, which is a verbatim reproduction of the original test of Article 217 of the
Labor Code, restored to the Labor Arbiters of the NLRC exclusive jurisdiction over claims, money or
otherwise, arising from employer-employee relations, except those expressly excluded therefrom.
In sustaining its jurisdiction over the case at bar, the respondent court relied on Calderon vs.
Court of Appeals
4
, where We ruled that an employee's action for unpaid salaries, alowances
and other reimbursable expenses and damages was beyond the periphery of the jurisdictional
competence of the Labor Arbiters. Our ruling in Calderon, however, no longer applaies to this
case because P.D. 1367, upon which said decision was based, had already been superceded
by P.D. 1691. As heretofore stated, P.D. 1691 restored to the Labor Arbiters their exlcusive
jurisdiction over said classes of claims.
Respondent Tumala maintains that his action for delivery of the house and lot, his prize as top
salesman of the company for 1979, is a civil controversy triable exclusively by the court of the
general jurisdiction. We do not share this view. The claim for said prize unquestionably arose from
an employer-employee relation and, therefore, falls within the coverage of par. 5 of P.D. 1691, which
speaks of "all claims arising from employer-employee relations, unless expressly excluded by this
Code." Indeed, Tumala would not have qualitfied for the content, much less won the prize, if he was
not an employee of the company at the time of the holding of the contest. Besides, the cause
advanced by petitioners to justify their refusal to deliver the prizethe alleged fraudulent
manipulations committed by Tumala in connection with his duties as salesman of the company
involves an inquiry into his actuations as an employee.
Besides, to hold that Tumala's claim for the prize should be passed upon by the regular court of
justice, independently and separately from his claim for back salaries, retirement benefits and
damages, would be to sanction split juridiction and multiplicity of suits which are prejudicial to the
orderly administration of justice.
One last point. Petitioners content that Tumala has no cause of action to as for back salaries
and damages because his dimissal was authorized by the Regional Director of the MInistry of
Labor. This question calls for the presentaiton of evidence and the same may well be entilated
before the labor Arbiter who has jurisdiction over the case. Besides, the issue raised is not for
Us to determine in this certiorari proceeding. The extraordinary remedy of certiorari proceeding.
The extraordinary remedy of certiorari offers only a limited form of review and its principal
function is to keep an inferior tribunal within its jurisdiction.
5

WHEREFORE, the petition is granted, and respondent judge is hereby directed to dismiss Civil Case
No. 13494, without prejudice to the right of respondent Tumala to refile the same with the Labor
Arbiter. No costs.
SO ORDERED.
Barredo (Chairman), Concepcion, Jr., De Castro and Ericta, JJ., concur.
Abad Santos, J., took no part.



Separate Opinions

AQUINO, J ., concurring:
I concur. Under Presidential Decree No. 1691, which took effect on May 1, 1980 and which
amended article 217 of the Labor Code by nullifying the amendment intorduced by Presidential
Decree No. 1367 (which took effect on May 1, 1978), that Labor Arbiters shall not etertain claims for
moral or other forms of damages," such claims may now be passed upon by Labor Arbiters just as
they had juristiction over such claims when the Labor Code took effect on October 1, 1974. (Garcia
vs. Martinez, L-47806-07, August 3, 1978, 84 SCRA 577, reconsidered in Resolution of May 28,
1979, 90 SCRA 331; Bengzon vs. Inciong, L-48706-07, June 29, 1979, 91 SCRA 248; Caderon vs.
Amor, et al. and Court of Appeals, G.R. No. 52235, October 28, 1980, 100 SCRA 459 and Abad vs.
Philippine American General Ins. Co., Inc., G.R. No. 50563, October 30, 1981).
G.R. No. 72644 December 14, 1987
ALFREDO F. PRIMERO, petitioner,
vs.
INTERMEDIATE APPELLATE COURT and DM TRANSIT, respondents.

NARVASA, J .:
The question on which the petitioner's success in the instant appeal depends, and to which he would
have us give an affirmative answer, is whether or not, having recovered separation pay by judgment
of the Labor Arbiter which held that he had been fired by respondent DM Transit Corporation
without just cause he may subsequently recover moral damages by action in a regular court,
upon the theory that the manner of his dismissal from employment was tortious and therefore his
cause of action was intrinsically civil in nature.
Petitioner Primero was discharged from his employment as bus driver of DM Transit
Corporation (hereafter, simply DM) in August, 1974 after having been employed therein for over
6 years. The circumstances attendant upon that dismissal are recounted by the Court of
Appeals 1 as follows:
Undisputably, since August 1, 1974, appellee's bus dispatcher did not assign any
bus to be driven by appellant Primero. No reason or cause was given by the
dispatcher to appellant for not assigning a bus to the latter for 23 days (pp. 6-14, 21-
22, tsn, May 15, 1979).
Also, for 23 days, appellant was given a run-around from one management official to
another, pleading that he be allowed to work as his family was in dire need of money
and at the same time inquiring (why) he was not allowed to work or drive a bus of the
company. Poor appellant did not only get negative results but was given cold
treatment, oftentimes evaded and given confusing information, or ridiculed,
humiliated, or sometimes made to wait in the offices of some management personnel
of the appellee (pp. 2-29, tsn, May 15, 1979).
(The) General Manager and (the) Vice-President and Treasurer ... wilfully and
maliciously made said appellant ... seesaw or ... go back and forth between them for
not less than ten (10) times within a period of 23 days ... but (he) got negative results
from both corporate officials. Worse, on the 23rd day of his ordeal appellant was
suddenly told by General Manager Briones to seek employment with other bus
companies because he was already dismissed from his job with appellee (without
having been) told of the cause of his hasty and capricious dismissal ... (pp. 8, 11-13,
25, tsn, May 15, 1979).
Impelled to face the harsh necessities of life as a jobless person and worried by his
immediate need for money, appellant pleaded with Corporate President Demetrio
Munoz, Jr. for his reinstatement and also asked P300.00 as financial assistance, but
the latter told the former that he (Munoz, Jr.) will not give him even one centavo and
that should appellant sue him in court, then that will be the time President Munoz, Jr.
will pay him, if Munoz, Jr. loses the case x x (pp. 21-22, tsn, May 15, 1979).
Appellant also advised (the) President of the oppressive, anti-social and inhumane
acts of subordinate officers ... (but) Munoz, Jr. did nothing to resolve appellant's
predicament and ... just told the latter to go back ... to ... Briones, who insisted that
appellant seek employment with other bus firms in Metro Manila ... (but) admitted
that the appellant has not violated any company rule or regulation ... (pp. 23-26, tsn,
May 15, 1979).
... In pursuance (of) defendant's determination to oppress plaintiff and cause further
loss, irreparable injury, prejudice and damage, (D.M. Transit) in bad faith and with
malice persuaded other firms (California Transit, Pascual Lines, De Dios Transit,
Negrita Corporation, and MD Transit) not to employ (appellant) in any capacity after
he was already unjustly dismissed by said defendant ... (paragraph 8 of plaintiff's
complaint).
These companies with whom appellant applied for a job called up the D.M. Transit
Office (which) ... told them ... that they should not accept (appellant) because (he)
was dismissed from that Office.
Primero instituted proceedings against DM with the Labor Arbiters of the Department of Labor,
for illegal dismissal, and for recovery of back wages and reinstatement. It is not clear from the
record whether these proceedings consisted of one or two actions separately filed. What is
certain is that he withdrew his claims for back wages and reinstatement, "with the end in view of
filing a damage suit" "in a civil court which has exclusive jurisdiction over his complaint for
damages on causes of action founded on tortious acts, breach of employment contract ... and
consequent effects (thereof ).
2

In any case, after due investigation, the Labor Arbiter rendered judgment dated January 24,
1977 ordering DM to pay complainant Primero P2,000.00 as separation pay in accordance with
the Termination Pay Law.
3
The judgment was affirmed by the National Labor Relations
Commission and later by the Secretary of Labor, the case having been concluded at this level
on March 3, 1978.
4

Under the provisions of the Labor Code in force at that time, Labor Arbiters had jurisdiction inter
alia over
1) claims involving non-payment or underpayment of wages, overtime compensation,
social security and medicare benefits, and
2) all other cases or matters arising from employer-employee relations, unless otherwise
expressly excluded.
5

And we have since held that under these "broad and comprehensive" terms of the law, Labor
Arbiters possessed original jurisdiction over claims for moral and other forms of damages in
labor disputes.
6

The jurisdiction of Labor Arbiters over such claims was however removed by PD 1367, effective
May 1, 1978, which explicitly provided that "Regional Directors shall not indorse and Labor
Arbiters shall not entertain claims for moral or other forms of damages."
7

Some three months afterwards, Primero brought suit against DM in the Court of First Instance of
Rizal seeking recovery of damages caused not only by the breach of his employment contract,
but also by the oppressive and inhuman, and consequently tortious, acts of his employer and its
officers antecedent and subsequent to his dismissal from employment without just cause.
8

While this action was pending in the CFI, the law governing the Labor Arbiters' jurisdiction was
once again revised. The amending act was PD 1691, effective May 1, 1980. It eliminated the
restrictive clause placed by PD 1367, that Regional Directors shall not indorse and Labor
Arbiters entertain claims for moral or other forms of damages. And, as we have had occasion to
declare in several cases, it restored the principle that "exclusive and original jurisdiction for
damages would once again be vested in labor arbiters;" eliminated "the rather thorny question
as to where in labor matters the dividing line is to be drawn between the power lodged in an
administrative body and a court;' " and, "in the interest of greater promptness in the disposition
of labor matters, ... spared (courts of) the often onerous task of determining what essentially is a
factual matter, namely, the damages that may be incurred by either labor or management as a
result of disputes or controversies arising from employer-employee relations."
9
Parenthetically,
there was still another amendment of the provision in question which, however, has no
application to the case at bar. The amendment was embodied in B.P. Blg. 227, effective June 1,
1982. 10
On August 11, 1980 the Trial Court rendered judgment dismissing the complaint on the ground of
lack of jurisdiction, for the reason that at the time that the complaint was filed. on August 17, 1978,
the law the Labor Code as amended by PD 1367, eff. May 1, 1978 conferred exclusive,
original jurisdiction over claims for moral or other damages, not on ordinary courts, but on Labor
Arbiters.
This judgment was affirmed by the Intermediate Appellate Court, by Decision rendered on June
29, 1984. This is the judgment now subject of the present petition for review on certiorari. The
decision was reached by a vote of 3 to 2. The dissenters, placing reliance on certain of our
pronouncements, opined that Primero's causes of action were cognizable by the courts, that
existence of employment relations was not alone decisive of the issue of jurisdiction, and that
such relations may indeed give rise to "civil" as distinguished from purely labor disputes, as
where an employer's right to dismiss his employee is exercised tortiously, in a manner
oppressive to labor, contrary to morals, good customs or public policy. 11
Primero has appealed to us from this judgment of the IAC praying that we overturn the majority view
and sustain the dissent.
Going by the literal terms of the law, it would seem clear that at the time that Primero filed his
complaints for illegal dismissal and recovery of backwages, etc. with the Labor Arbiter, the latter
possessed original and exclusive jurisdiction also over claims for moral and other forms of
damages; this, in virtue of Article 265 12 of PD 442, otherwise known as the Labor Code,
effective from May 1, 1974. In other words, in the proceedings before the Labor Arbiter, Primero
plainly had the right to plead and prosecute a claim not only for the reliefs specified by the Labor
Code itself for unlawful termination of employment, but also for moral or other damages under
the Civil Code arising from or connected with that termination of employment. And this was the
state of the law when he moved for the dismissal of his claims before the Labor Arbiter, for
reinstatement and recovery of back wages, so that he might later file a damage suit "in a civil
court which has exclusive jurisdiction over his complaint ... founded on tortious acts, breach of
employment contract ... and consequent effects (thereof)." 13
The legislative intent appears clear to allow recovery in proceedings before Labor Arbiters of
moral and other forms of damages, in all cases or matters arising from employer-employee
relations. This would no doubt include, particularly, instances where an employee has been
unlawfully dismissed. In such a case the Labor Arbiter has jurisdiction to award to the dismissed
employee not only the reliefs specifically provided by labor laws, but also moral and other forms
of damages governed by the Civil Code. Moral damages would be recoverable, for example,
where the dismissal of the employee was not only effected without authorized cause and/or due
process for which relief is granted by the Labor Code but was attended by bad faith or fraud,
or constituted an act oppressive to labor, or was done in a manner contrary to morals, good
customs or public policy 14 for which the obtainable relief is determined by the Civil
Code 15 (not the Labor Code). Stated otherwise, if the evidence adduced by the employee
before the Labor Arbiter should establish that the employer did indeed terminate the employee's
services without just cause or without according him due process, the Labor Arbiter's judgment
shall be for the employer to reinstate the employee and pay him his back wages or,
exceptionally, for the employee simply to receive separation pay. These are reliefs explicitly
prescribed by theLabor Code. 16 But any award of moral damages by the Labor Arbiter
obviously cannot be based on the Labor Code but should be grounded on the Civil Code. Such
an award cannot be justified solely upon the premise (otherwise sufficient for redress under the
Labor Code) that the employer fired his employee without just cause or due process. Additional
facts must be pleaded and proven to warrant the grant of moral damages under the Civil Code,
these being, to repeat, that the act of dismissal was attended by bad faith or fraud, or was
oppressive to labor, or done in a manner contrary to morals, good customs, or public policy;
and, of course, that social humiliation, wounded feelings, grave anxiety, etc., resulted
therefrom. 17
It is clear that the question of the legality of the act of dismissal is intimately related to the issue of
the legality of the manner by which that act of dismissal was performed. But while the Labor Code
treats of the nature of, and the remedy available as regards the first the employee's separation
from employment it does not at all deal with the second the manner of that separation which
is governed exclusively by the Civil Code. In addressing the first issue, the Labor Arbiter applies the
Labor Code; in addressing the second, the Civil Code. And this appears to be the plain and patent
intendment of the law. For apart from the reliefs expressly set out in the Labor Code flowing from
illegal dismissal from employment, no other damages may be awarded to an illegally dismissed
employee other than those specified by the Civil Code. Hence, the fact that the issue-of whether or
not moral or other damages were suffered by an employee and in the affirmative, the amount that
should properly be awarded to him in the circumstances-is determined under the provisions of the
Civil Code and not the Labor Code, obviously was not meant to create a cause of action
independent of that for illegal dismissal and thus place the matter beyond the Labor Arbiter's
jurisdiction.
Thus, an employee who has been illegally dismissed (i.e., discharged without just cause or
being accorded due process), in such a manner as to cause him to suffer moral damages (as
determined by the Civil Code), has a cause of action for reinstatement and recovery of back
wages and damages. When he institutes proceedings before the Labor Arbiter, he should make
a claim for all said reliefs. He cannot, to be sure, be permitted to prosecute his claims
piecemeal. He cannot institute proceedings separately and contemporaneously in a court of
justice upon the same cause of action or a part thereof. He cannot and should not be allowed to
sue in two forums: one, before the Labor Arbiter for reinstatement and recovery of back wages,
or for separation pay, upon the theory that his dismissal was illegal; and two, before a court of
justice for recovery of moral and other damages, upon the theory that the manner of his
dismissal was unduly injurious, or tortious. This is what in procedural law is known as splitting
causes of action, engendering multiplicity of actions. It is against such mischiefs that the Labor
Code amendments just discussed are evidently directed, and it is such duplicity which the Rules
of Court regard as ground for abatement or dismissal of actions, constituting either litis
pendentia (auter action pendant) or res adjudicata, as the case may be. 18 But this was
precisely what Primero's counsel did. He split Primero's cause of action; and he made one of
the split parts the subject of a cause of action before a court of justice. Consequently, the
judgment of the Labor Arbiter granting Primero separation pay operated as a bar to his
subsequent action for the recovery of damages before the Court of First Instance under the
doctrine of res judicata, The rule is that the prior "judgment or order is, with respect to the matter
directly adjudged or as to any other matter that could have been raised in relation thereto,
conclusive between the parties and their successors in interest by title subsequent to the
commencement of the action or special proceeding, litigating for the same thing and under the
same title and in the same capacity. 19
We are not unmindful of our previous rulings on the matter cited in the dissent to the decision of
the Court of Appeals subject of the instant petition,
20
notably, Quisaba v. Sta Ines-Melale
Veneer & Plywood Inc., where a distinction was drawn between the right of the employer to
dismiss an employee, which was declared to be within the competence of labor agencies to
pass upon, and the "manner in which the right was exercised and the effects flowing therefrom,"
declared to be a matter cognizable only by the regular courts because "intrinsically civil."
21
We
opine that it is this very distinction which the law has sought to eradicate as being so tenuous
and so difficult to observe,
22
and, of course, as herein pointed out, as giving rise to split
jurisdiction, or to multiplicity of actions, "a situation obnoxious to the orderly administration of
justice.
23
Actually we merely reiterate in this decision the doctrine already laid down in other
cases (Garcia v. Martinez, 84 SCRA 577; Ebon v. de Guzman, 13 SCRA 52; Bengzon v.
Inciong, 91 SCRA 248; Pepsi-Cola Bottling Co. v. Martinez, 112 SCRA 578; Aguda v. Vallejos,
113 SCRA 69; Getz v. C.A., 116 SCRA 86; Cardinal Industries v. Vallejos, 114 SCRA 471;
Sagmit v. Sibulo, 133 SCRA 359) to the effect that the grant of jurisdiction to the Labor Arbiter
by Article 217 of the Labor Code is sufficiently comprehensive to include claims for moral and
exemplary damages sought to be recovered from an employer by an employee upon the theory
of his illegal dismissal. Rulings to the contrary are deemed abandoned or modified accordingly.
WHEREFORE, the petition is DISMISSED, without pronouncement as to costs.
Teehankee, C.J., Cruz, Paras, * and Gancayco, JJ., concur.
G.R. No. 89621 September 24, 1991
PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC., represented by its Plant General
Manager ANTHONY B. SIAN, ELEAZAR LIMBAB, IRENEO BALTAZAR & JORGE
HERAYA, petitioners,
vs.
HON. LOLITA O. GAL-LANG, SALVADOR NOVILLA, ALEJANDRO OLIVA, WILFREDO
CABAAS & FULGENCIO LEGO, respondents.
Aurelio D. Menzon for petitioners.
Mario P. Nicolasora co-counsel for petitioners.
Papiano L. Santo for private respondents.

CRUZ, J .:p
The question now before us has been categorically resolved in earlier decisions of the Court that a
little more diligent research would have disclosed to the petitioners. On the basis of those cases and
the facts now before us, the petition must be denied.
The private respondents were employees of the petitioner who were suspected of complicity in the
irregular disposition of empty Pepsi Cola bottles. On July 16, 1987, the petitioners filed a criminal
complaint for theft against them but this was later withdrawn and substituted with a criminal
complaint for falsification of private documents. On November 26, 1987, after a preliminary
investigation conducted by the Municipal Trial Court of Tanauan, Leyte, the complaint was
dismissed. The dismissal was affirmed on April 8, 1988, by the Office of the Provincial Prosecutor.
Meantime, allegedly after an administrative investigation, the private respondents were dismissed by
the petitioner company on November 23, 1987. As a result, they lodged a complaint for illegal
dismissal with the Regional Arbitration Branch of the NLRC in Tacloban City on December 1, 1987,
and decisions manded reinstatement with damages. In addition, they instituted in the Regional Trial
Court of Leyte, on April 4, 1988, a separate civil complaint against the petitioners for damages
arising from what they claimed to be their malicious prosecution.
The petitioners moved to dismiss the civil complaint on the ground that the trial court had no
jurisdiction over the case because it involved employee-employer relations that were exclusively
cognizable by the labor arbiter. The motion was granted on February 6, 1989. On July 6, 1989,
however, the respondent judge, acting on the motion for reconsideration, reinstated the complaint,
saying it was "distinct from the labor case for damages now pending before the labor courts." The
petitioners then came to this Court for relief.
The petitioners invoke Article 217 of the Labor Code and a number of decisions of this Court to
support their position that the private respondents civil complaint for damages falls under the
jurisdiction of the labor arbiter. They particularly cite the case of Getz Corporation v. Court of
Appeals,
1
where it was held that a court of first instance had no jurisdiction over the complaint
filed by a dismissed employee "for unpaid salary and other employment benefits, termination
pay and moral and exemplary damages."
We hold at the outset that the case is not in point because what was involved there was a claim
arising from the alleged illegal dismissal of an employee, who chose to complain to the regular court
and not to the labor arbiter. Obviously, the claim arose from employee-employer relations and so
came under Article 217 of the Labor Code which then provided as follows:
ART. 217. Jurisdiction of Labor Arbiters and the Commission. (a) The Labor
Arbiters shall have the original and exclusive jurisdiction to hear and decide within
thirty (30) working days after submission of the case by the parties for decision, the
following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours of work and other terms and
conditions of employment;
3. All money claims of workers, including those based on non-payment or
underpayment of wages, overtime compensation, separation pay and other benefits
provided by law or appropriate agreement, except claims for employees'
compensation, social security, medicare and maternity benefits;
4. Cases involving household services; and
5. Cases arising from any violation of Article 265 of this Code, including questions
involving the legality of strikes and lockouts.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by
labor Arbiters.
2

It must be stressed that not every controversy involving workers and their employers can be
resolved only by the labor arbiters. This will be so only if there is a "reasonable causal connection"
between the claim asserted and employee-employer relations to put the case under the provisions of
Article 217. Absent such a link, the complaint will be cognizable by the regular courts of justice in the
exercise of their civil and criminal jurisdiction.
In Medina v. Castro-Bartolome,
3
two employees filed in the Court of First Instance of Rizal a
civil complaint for damages against their employer for slanderous remarks made against them
by the company president. On the order dismissing the case because it came under the
jurisdiction of the labor arbiters, Justice Vicente Abad Santos said for the Court:
It is obvious from the complaint that the plaintiffs have not alleged any unfair labor
practice. Theirs is a simple action for damages for tortious acts allegedly committed
by the defendants. Such being the case, the governing statute is the Civil Code and
not the Labor Code. It results that the orders under review are based on a wrong
premise.
In Singapore Airlines Ltd. v. Pao,
4
where the plaintiff was suing for damages for alleged
violation by the defendant of an "Agreement for a Course of Conversion Training at the Expense
of Singapore Airlines Limited," the jurisdiction of the Court of First Instance of Rizal over the
case was questioned. The Court, citing the earlier case of Quisaba v. Sta. Ines Melale Veneer
and Plywood, Inc.,
5
declared through Justice Herrera:
Stated differently, petitioner seeks protection under the civil laws and claims no
benefits under the Labor Code. The primary relief sought is for liquidated damages
for breach of a contractual obligation. The other items demanded are not labor
benefits demanded by workers generally taken cognizance of in labor disputes, such
as payment of wages, overtime compensation or separation pay. The items claimed
are the natural consequences flowing from breach of an obligation, intrinsically a civil
dispute.
In Molave Sales, Inc. v. Laron,
6
the same Justice held for the Court that the claim of the plaintiff
against its sales manager for payment of certain accounts pertaining to his purchase of vehicles
and automotive parts, repairs of such vehicles, and cash advances from the corporation was
properly cognizable by the Regional Trial Court of Dagupan City and not the labor arbiter,
because "although a controversy is between an employer and an employee, the Labor Arbiters
have nojurisdiction if the Labor Code is not involved."
The latest ruling on this issue is found in San Miguel Corporation v. NLRC,
7
where the above
cases are cited and the changes in Article 217 are recounted. That case involved a claim of an
employee for a P60,000.00 prize for a proposal made by him which he alleged had been
accepted and implemented by the defendant corporation in the processing of one of its beer
products. The claim was filed with the labor arbiter, who dismissed it for lack of jurisdiction but
was reversed by the NLRC on appeal. In setting aside the appealed decision and dismissing the
complaint, the Court observed through Justice Feliciano:
It is the character of the principal relief sought that appears essential, in this
connection. Where such principal relief is to be granted under labor legislation or a
collective bargaining agreement, the case should fall within the jurisdiction of the
Labor Arbiter and the NLRC, even though a claim for damages might be asserted as
an incident to such claim.
xxx xxx xxx
Where the claim to the principal relief sought is to be resolved not by reference to the
Labor Code or other labor relations statute or a collective bargaining agreement but
by the general civil law, the jurisdiction over the dispute belongs to the regular courts
of justice and not to the Labor Arbiter and the NLRC. In such situations, resolution of
the dispute requires expertise, not in labor management relations nor in wage
structures and other terms and conditions of employment, but rather in the
application of the general civil law. Clearly, such claims fall outside the area of
competence or expertise ordinarily ascribed to Labor Arbiters and the NLRC and the
rationale for granting jurisdiction over such claims to these agencies disappears.
xxx xxx xxx
While paragraph 3 above refers to "all money claims of workers," it is not necessary
to suppose that the entire universe of money claims that might be asserted by
workers against their employers has been absorbed into the original and exclusive
jurisdiction of Labor Arbiters.
xxx xxx xxx
For it cannot be presumed that money claims of workers which do not arise out of or
in connection with their employer-employee relationship, and which would therefore
fall within the general jurisdiction of the regular courts of justice, were intended by the
legislative authority to be taken away from the jurisdiction of the courts and lodged
with Labor Arbiters on an exclusive basis. The Court, therefore, believes and so
holds that the 'money claims of workers" referred to in paragraph 3 of Article 217
embraces money claims which arise out of or in connection with the employer-
employee relationship, or some aspect or incident of such relationship. Put a little
differently, that money claims of workers which now fall within the original and
exclusive jurisdiction of Labor Arbiters are those money claims which have some
reasonable causal connection with the employer-employee relationship (Ibid.).
The case now before the Court involves a complaint for damages for malicious prosecution which
was filed with the Regional Trial Court of Leyte by the employees of the defendant company. It does
not appear that there is a "reasonable causal connection" between the complaint and the relations of
the parties as employer and employees. The complaint did not arise from such relations and in fact
could have arisen independently of an employment relationship between the parties. No such
relationship or any unfair labor practice is asserted. What the employees are alleging is that the
petitioners acted with bad faith when they filed the criminal complaint which the Municipal Trial Court
said was intended "to harass the poor employees" and the dismissal of which was affirmed by the
Provincial Prosecutor "for lack of evidence to establish even a slightest probability that all the
respondents herein have committed the crime imputed against them." This is a matter which the
labor arbiter has no competence to resolve as the applicable law is not the Labor Code but the
Revised Penal Code.
"Talents differ, all is well and wisely put," so observed the philosopher-poet.
8
So it must be in
the case we here decide.
WHEREFORE, the order dated July 6, 1989, is AFFIRMED and the petition DENIED, with costs
against the petitioner.
SO ORDERED.
Narvasa (Chairman), Grio-Aquino and Medialdea, JJ., concur.
G.R. No. 101767 May 8, 1992
TERTULIANO ABEJARON, petitioner,
vs.
COURT OF APPEALS, (TWELFTH DIVISION) and PEPSI COLA BOTTLING CO., INC., respondents.
Ildefonso D. Lagcao and Marcelino R. Valdez for petitioner.
Emmanuel C. Carpio for private respondent.

CRUZ, J .:
In 1978, petitioner Tertuliano Abejaron was employed by private respondent Pepsi Cola Bottling Co., Inc. as a
salesman.
In May 1980, Pepsi suspended him without pay for an alleged unremitted collection of P67,945.70. A complaint for
estafa was also filed against him with the Provincial Fiscal of General Santos but this was subsequently dismissed for
lack of sufficient evidence.
Abejaron was reinstated on November 11, 1980, but in November 1982, he was served a warning on a second
charge that he had incurred questionable route shortages and had repeatedly failed and refused to remit his daily
collections. He was "grounded" pending investigation of this matter.
In 1983, Pepsi filed another complaint for estafa against Abejaron with the City Fiscal of General Santos City. This
time the corresponding information was filed with the Regional Trial Court of General Santos City and docketed as
Criminal Case No. 3067.
1

On August 29, 1986, the trial court acquitted Abejaron of the crime charged.
2
Nevertheless, Abejaron was eventually
separated by Pepsi on March 21, 1983.
Abejaron never filed any complaint with the Labor Department when he was suspended in 1980 and when he was
dismissed in 1983. Instead, he sued Pepsi for damages on November 24, 1986, for what he called the malicious filing
of the estafa charge against him. This complaint was docketed as Civil Case No. 3475 in the Regional Trial Court of
General Santos City.
On April 25, 1989, Judge Manuel Luis S. Gumban rendered a decision holding Pepsi liable for all the awards prayed
for in the complaint, to wit, P50,000 as actual damages, P65,317.87 as actual or compensatory damages, P35,000 as
attorney's fees, P200,000 as moral damages, and litigation
expenses.
3

In its appeal to the respondent court, Pepsi raised for the first time the sole issue of lack of jurisdiction of the trial
court over the case. It maintained that as the complaint was essentially a monetary claim arising from an employer-
employee relationship, jurisdiction was vested thereover in the Labor Arbiter.
The respondent court rejected this contention thus:
A cursory reading of the complaint filed by the appellee indubitably shows no trace of any fact
tending to establish that the game was based on the illegal termination from office of herein
appellee. Conversely, a scrutiny of the complaint reveals that the same was apparently filed to
recover damages on the basis of the alleged malicious prosecution and its consequence on the
part of the appellee.
The Court has carefully examined the allegations in the complaint and holds that the above pronouncement is
correct. The respondent court did not err in ruling that the case came under the jurisdiction of the Regional Trial Court
and not of the Labor Arbiter.
In Honiron Philippines, Inc., et al. v. Intermediate Appellate Court,
4
this Court declared:
Mendiola's action is founded essentially on "the highly malicious and grossly wanton acts and
omission" of defendants. Specifically, the administrative services manager's act of filing a complaint
for frustrated qualified theft against him out of personal resentment, the personnel manager's false,
malicious and slanderous imputation of the crime of theft against him leading to the termination by
Honiron of his services without clearance and while the case was still being investigated by the
police, and Honiron's insistence on prosecuting him for the alleged crime. The complaint was not
anchored on the termination of Mendiola's services per se, but rather on the manner and
consequent effects of such termination.
Mendiola's complaint being based on alleged violations of Civil Code provisions instead of the
Labor Code, his action is basically a civil dispute cognizable by the regular courts.
A more exhaustive discussion of this same issue is found in the case of Pepsi Cola Distributor of the Philippines,
Inc. v. Gal-lang,
5
where, after referring to the cases of Medina vs. Castro-Bartolome,
6
Singapore Airlines, Ltd.,
vs. Pao,
7
Molave Motor Sales, Inc. vs. Laron, 8 Quisaba vs. Sta. Ines Melale Veneer and Plywood, Inc.
9
and San
Miguel Corporation vs. NLRC,
10
we held as follows:
The case now before the Court involves a complaint for damages for malicious prosecution which
was filed with the Regional Trial Court of Leyte by the employees of the defendant company. It
does not appear that there is a "reasonable causal connection" between the complaint and the
relations of the parties as employer and employees. The complaint did not arise from such relations
and in fact could have arisen independently of an employment relationship between the parties. No
such relationship or any unfair labor practice is asserted. What the employees are alleging is that
the petitioners acted with bad faith when they filed the criminal complaint which the Municipal Trial
Court said was intended "to harass the poor employees" and the dismissal of which was affirmed
by the Provincial Prosecutor "for lack of evidence to establish even a slightest probability that all the
respondents herein have committed the crime imputed against them." This is a matter which the
labor arbiter has no competence to resolve as the applicable law is not the Labor Code but the
Revised Penal Code.
Significantly, Pepsi questioned the lack of jurisdiction of the trial court for the first time only on appeal to the
respondent court. While it is true that the question of jurisdiction may be raised at any time, there does not seem to
be any reason why the private respondent did not invoke the issue earlier.
What it should have done when the complaint was filed in the Regional Trial Court was move for its dismissal on the
ground of lack of jurisdiction over the subject-matter. If the motion was denied, it could have come to this Court
directly in a special civil action for certiorari alleging the same ground. Pepsi did neither of these. Instead, it willingly
proceeded to trial, saying naught a word about the issue of jurisdiction. Later, when the trial court rendered judgment
against it, it went to the Court of Appeals in an ordinary appeal under Rule 41 rather than directly to this Court order
Rule 65.
The petitioner now contends that as the appeal was based on the sole issue of jurisdiction, Pepsi sought the wrong
remedy in going to the Court of Appeals. Hence, upon receipt of its petition for review, the Court of Appeals should
have certified it to this Court on the ground that it involved a pure question of law which it had no authority to resolve.
True enough. But the trouble is that the petitioner did not interpose any serious opposition when the Court of Appeals
entertained the appeal and thereafter resolved it. The petitioner spiritedly debated the issue of jurisdiction with the
private respondent before the respondent court as if there was nothing amiss. He did not ask the respondent court to
certify the case to us. The petitioner was almost casual when he mentioned the procedural flaw and did not choose to
pursue it with vigor, as he should have. By his omission to fault an obvious error and his active participation in the
proceedings in the respondent court, he is now estopped from raising this objection at this late hour.
At any rate, the result would have been the same if the case had been referred to us by the Court of Appeals.
Following the cases abovecited, we would also have held that the petitioner's claim for damages was within the
jurisdiction of the Regional Trial Court and not the Labor Arbiter.
The respondent court did not stop with its ruling on the issue of jurisdiction. Although not assigned as an error, the
award to Abejaron was discussed and modified by it after finding that there was no convincing and preponderant
evidence to prove malice on the part of Pepsi when it charged Abejaron with estafa.
The respondent court thus held:
WHEREFORE, the decision appealed from dated April 25, 1989, is hereby REVERSED, and SET
ASIDE and a new one is entered absolving herein appellant Pepsi Cola Bottling Co., Inc. from
paying damages to the appellee. No costs.
The petitioner claims that the respondent could not rule upon the propriety of the award of damages because it had
not been assigned as an error by the appellant. He cites Rule 51, Sec. 7 of the Rules of Court, reading as follows:
Sec. 7. Questions that may be decided. No error which does not affect the jurisdiction over the
subject matter will be considered unless stated in the assignment of errors and properly argued in
the brief, save as the court, at its option, may notice plain errors not specified, and also clerical
errors.
There is more than meets the eye here. The above provision should not be read in the restrictive manner the
petitioner suggests.
Interpreting this rule in Vda. de Javellana v. Court of Appeals,
11
this Court held:
The general rule is that only errors which have been stated in the assignment of errors and properly
argued in the brief will be considered, except errors affecting jurisdiction over the subject-matter
and plain, as well as clerical, errors.
But while the petitioner Javellana did not assign as error the failure of the trial court to adjudge
recovery and to award damages, we feel that there is sufficient justification to set aside the
judgment in this respect. For the error is patent. Under Sec. 7, Rule 51 of the Revised Rules of
Court, the Court of Appeals is given an option to consider and pass upon a proven error
notwithstanding the fact that it was not specifically assigned and argued in the brief.
Besides, an unassigned error closely related to the error properly assigned, or upon which the
determination of the question raised by the error properly assigned is dependent, will be considered
by the appellate court notwithstanding the failure to assign it as error. (Hernandez vs. Andal, 78
Phil. 196).
At any rate, the Court is clothed with ample authority to review matters, even if they are not
assigned as errors in their appeal, if it finds that their consideration is necessary in arriving at a just
decision of the case (Ortigas vs. Lufthansa German Airlines, 64 SCRA 610).
A similar pronouncement was made in Baquiran vs. Court of Appeals,
12
to wit:
Issues, though not specifically raised in the pleadings in the appellate court, may, in the interest of
justice, be properly considered by said court in deciding a case, if they are questions raised in the
trial court and are matters of record having some bearing on the issue submitted which the parties
failed to raise or the lower court ignore(d).
This was an affirmation of the earlier case of Hernandez vs. Andal,
13
where we held:
While an assignment of error which is required by law or rule of court has been held essential to
appellate review, and only those assigned will be considered, there are a number of cases which
appear to accord to the appellate court a broad discretionary power to waive this lack of proper
assignment of errors and consider errors not assigned.
Accordingly, we hold that the respondent court was justified in ruling on the award of damages even if the issue was
not assigned as an error when the decision of the trial court was appealed. Consideration of this question was
necessary to the just and complete resolution of the case before it. There was enough in the record elevated to the
respondent court to enable it to reach its own conclusion on this particular matter.
This Court has also examined the evidence of the parties and agrees that the filing of the charge for estafa by Pepsi
against Abejaron was not made maliciously so as to entitle the petitioner to the relief he seeks. Pepsi cannot be
faulted for suing on what it believed to be an actionable wrong even it the suit was eventually dismissed. Its good faith
not having been successfully assailed, it cannot for this reason be held liable in the damages alleged by the
petitioner. The simple fact is that even if he did sustain them, he still could not be allowed to recover thereon for lack
of a legal basis. In short, this is a case of damnum absque injuria.
WHEREFORE. the challenged decision is AFFIRMED and the petition is DENIED, without any pronouncement as to
costs.
SO ORDERED.
Narvasa, C.J., Grio-Aquino, Medialdea and Bellosillo, JJ., concur.
G.R. No. L-65129 December 29, 1986
TOMAS AVERIA, JR., petitioner,
vs.
THE HONORABLE MILAGROS V. CAGUIOA, in her capacity as Judge of the Regional Trial
Court, Fourth Judicial Region, Branch LVII, Lucena City, and VERONICA
PADILLO, respondents.

CRUZ, J .:
We gave due course to this petition against a decision of the Court of First Instance of Lucena
City,
1
which is questioned on a pure questions of law, more specifically whether or not the court
has jurisdiction to order the registration of a deed of sale which is opposed on the ground of an
antecedent contract to sell.
The oppositor, petitioner herein, refused to participate in the hearing of the registration
proceedings below, claiming the respondent court, acting as a cadastral court, had no
competence to act upon the said case under Section 112 of Act 496, otherwise known as the
"Land Registration Act." The respondent court then held the hearing ex parte and later rendered
a decision ordering the registration prayed for on the basis of the evidence presented by the
private respondent herein.
2

In his petition for certiorari and prohibition with preliminary injunction, it is argued that the lower
court had no competence to act on the registration sought because of the absence of unanimity
among the parties as required under Section 112 of the Land Registration Act.
3
The petitioner
cites Fojas as v. Grey,
4
where this Court, through Justice Serafin Cuevas, declared:
The aforequoted provision of the Land Registration Act (Sec. 112) was relied upon by
appellant Apolinar Fojas in petitioning the court a quo for the annotation of the Deed of
Assignment. However, while he had the right to have the said Deed annotated in the owner's
duplicate of TCT No. T-2376, the serious objection of Saturnina de Grey to the same raises a
substantial controversy between the parties.
In a long line of decisions dealing with proceedings under Section 112 of the Land
Registration Act, it has been held that summary relief under Section 112 of Land Registration
Act can only be granted if there is unanimity among the parties, or there is no adverse claim
or serious objection on the part of any party in interest; otherwise, the case becomes
contentious and controversial which should be threshed out in an ordinary action or in any
case where the incident properly belongs.
5

While this was a correct interpretation of the said provision, the same is, however, not applicable to
the instant case. The reason is that this case arose in 1982, after the Land Registration Act had
been superseded by the Property Registration Decree, which became effective on June 11, 1979.
In Section 2 of the said P.D. No. 1529, it is clearly provided that:
SEC. 2. Nature of registration proceedings; jurisdiction of courts.-Judicial proceedings for the
registration of lands throughout the Philippines shall be in rem and shall be based on the
generally accepted principles underlying the Torrens system.
Courts of First Instance shall have exclusive jurisdiction over all applications for original
registration of title to lands, including improvements and interests therein, and over all
petitions filed after original registration of title, with power to hear and determine a questions
arising upon such applications or petitions. The court through its clerk of court shall furnish
the Land Registration Commission with two certified copies of all pleadings, exhibits, orders,
and decisions filed or issued in applications or petitions for land registration, with the
exception of stenographic notes, within five days from the filing or issuance thereof.
The above provision has eliminated the distinction between the general jurisdiction vested in the
regional trial court and the limited jurisdiction conferred upon it by the former law when acting merely
as a cadastral court. Aimed at avoiding multiplicity of suits, the change has simplified registration
proceedings by conferring upon the regional trial courts the authority to act not only on applications
for "original registration" but also "over all petitions filed after original registration of title, with power
to hear and determine all questions arising upon such applications or petitions."
Consequently, and specifically with reference to Section 112 of the Land Registration Act (now
Section 108 of P.D. No. 1529), the court is no longer fettered by its former limited jurisdiction which
enabled it to grant relief only in cases where there was "unanimity among the parties" or none of
them raised any "adverse claim or serious objection." Under the amended law, the court is now
authorized to hear and decide not only such non-controversial cases but even this contentious and
substantial issues, such as the question at bar, which were beyond its competence before.
It appears that the respondent court proceeded to hear the case below notwithstanding the
manifestation by the petitioner of his intention to elevate to this Court the question of jurisdiction
he had raised.
6
The trial court should have given him the opportunity to do so in the interest of
due process, pending a categorical ruling on the issue. As it happened, it arrived at its decision
after considering only the evidence of the private respondent and without regard to the evidence
of the petitioner.
7

WHEREFORE, the decision of the respondent court dated September 23, 1983, is set aside. Let a
new trial of Cadastral Case No. 1, GLRO Cad. Record No. 202, Lot No. 2810-B, Lucena Cadastre,
MC No. 374-82, be held, at which the petitioner, as well as other interested parties, shall be given
the opportunity to be heard. Our temporary restraining order of October 5, 1983, is hereby lifted
except as to the registration of the questioned deed of sale which shall depend on the outcome of
the said case.
SO ORDERED.
Yap (Chairman), Narvasa, Melencio-Herrera, and Feliciano, JJ., concur.
G.R. No. L-32621 July 29, 1987
ASSOCIATION OF BAPTISTS FOR WORLD EVANGELISM, INC., petitioner,
vs.
FIRST BAPTIST CHURCH and COURT OF APPEALS, respondents.
PADILLA, J .:
Review on certiorari of the Resolution
*
of the respondent Court of Appeals, dated 17 August
1970, issued in G.R. No. 37022-R, entitled: "Association of Baptists for World Evangelism, Inc.,
petitioner-appellee versus First Baptists Church, respondent-appellant," which dismissed
petitioner's application for cancellation of a notice of adverse claim.
The facts of the case which led to the filing of this petition are as follows:
On 30 September 1963, the parties entered into an agreement, denominated "Contract of
Purchase and Sale" wherein the petitioner agreed to sell to the respondent a parcel of land,
together with the building and improvement thereon, with an area of 735 Sq. meters, located at
the corner of Leon Guinto and Padre Faura Streets, Manila, and covered by TCT No. 62203 of
the Register of Deeds of Manila, for the amount of P293,506.25, payable in three (3)
installments, as follows:
1. The First installment shall be paid by the VENDEE to the VENDOR on or before
September 30, 1963 amounting to P29,350.62,
2. The Second Installment which shall be the sum of P66,038.90, shall be paid by the
VENDEE to the VENDOR on or before September 30, 1964.
3. The last and final installment which shall be the sum of P198,116.72, less the P25,000.00
deduction allowed by the VENDOR, shall be paid by the VENDEE to the VENDOR on or
before September 30, 1965.
The parties further agreed that:
All the foregoing payments shall be made by the VENDEE to the VENDOR's duly authorized
Resident Agent and attorney-in-fact in Manila, Philippines.
It is hereby expressly understood and agreed that immediately upon the execution of this
document and thereafter for a period of five (5) consecutive years so long as this agreement
is in force and effect, the VENDEE shall have the right to occupy and use the property for
church purposes but for no other purpose whatsoever.
Should the VENDEE fail to pay any or all the installments when due, this agreement shall
automatically be considered as rescinded and without force and effect and the VENDEE
shall, without further demand from the VENDOR peacefully return possession of the property
to the VENDOR; provided, however, that any installment which the VENDEE may have
already paid to the VENDOR shall be returned by the VENDOR to the VENDEE.1avvphi1
Upon final and complete payment of the stipulated purchase price the VENDOR shall
immediately execute and deliver to the VENDEE a final and absolute Deed of Sale of the
Property free and clear of all liens and encumbrances.
1

The first installment of the purchase price was duly paid and the respondent took possession of
the property. However, when the second installment became due on 30 September 1964, the
petitioner, upon request of the respondent, extended the period of its payment to 30 October
1964. For this purpose, the parties executed a document entitled: "Supplement to the Contract
of Purchase and Sale of September 30, 1963" with the stipulation that "all the provisions of the
original contract of purchase and sale of 30 September 1963 shall remain in full force and effect,
except as modified and supplemented."
2
The respondent, however, failed to pay the second
installment when it became due. Neither did it return the possession of the property to the
petitioner.
But, on 8 March 1965, the respondent caused to be recorded in the Office of tile Register of
Deeds of Manila a Notice of Adverse Claim on TCT No. 62203.
3
Upon learning of the burden
constituted on its certificate of title, the petitioner, on 6 June 1965, filed a petition with the Court
of First Instance of Manila for the cancellation of the said notice of adverse claim, on the ground
that when said notice of adverse claim was filed, the respondent had already lost its right to or
interest in the property, in view of the automatic rescission of the contract caused by the
respondent's failure to pay the second installment of the purchase price on 30 October 1964, as
agreed upon, so that the notice of adverse claim is invalid and should be cancelled.
4

The respondent filed its opposition to the petition for cancellation of notice of adverse claim
5
and
the case was then set for hearing. At the hearing on 14 August 1965, the petitioner presented its
evidence consisting of the Contract of Purchase and Sale, the Supplement thereto, and the
Notice of Adverse Claim. The respondent, upon the other hand, did not submit any evidence.
The court then declared the case submi tted " however, in an Order issued on the same day, the
court suspended the resolution of the petition to cancel the notice of adverse claim "until after
fifteen (15) days from today during which time counsel for respondent should file civil action in
order to thresh out the question involved in ordinary suit. If after the lapse of said period no civil
action is filed, this Court will be constrained to act on same."
6

The respondent failed to initiate the civil suit, as ordered, so that the petitioner, on 8 September
1965, filed a motion to give due course to its petition to cancel notice of adverse claim.
7
The
motion was set for hearing on 11 September 1965 and, on said date, the respondent manifested
in court that it was the prevailing opinion among its members that to file a suit against the
petitioner would be "unscriptural" and that they intend to do so only as a last recourse when it
becomes absolutely necessary that it be done.
8

On 15 September 1965, the lower court issued an order directing the cancellation of the notice
of adverse claim on TCT No. 62203 on the grounds that the basis of said notice of adverse
claim was no longer in force and effect inasmuch as the same was automatically rescinded
upon the failure of the respondent to pay the second installment when it became due, and for
failure of the respondent to file the civil action, as required by the court.
9

The respondent filed a motion for reconsideration of the Order claiming, for the first time, that
the trial court had no jurisdiction in that, as a land registration court, it cannot pass upon the
issue of whether or not the contract of purchase and sale has been rescinded or rendered
without force and effect,
10
but the trial court denied said motion.
11

Whereupon the respondent appealed to the Court of Appeals. On 25 May 1970, the appellate
court rendered judgment affirming the order of the lower court.
12
This decision, however, was set
aside by the appellate court in its Resolution dated 17 August 1970 on the ground that the lower
court, sitting as a land registration court, had no jurisdiction to resolve the issues presented
which should be litigated in a regular court. Accordingly, the respondent appellate court ordered
the dismissal of the petition to cancel notice of adverse claim.
13
Hence, the present recourse.
The issue raised is whether the Court of First Instance, now the Regional Trial Court, acting as
a land registration court, has jurisdiction to cancel an adverse claim based on a contract to sell
or promise to sell which can no longer be enforced because of non-payment of the agreed
purchase price.
This issue had been raised in view of the findings of the respondent Court of Appeals that the
court a quo, sitting as a land registration court, has limited jurisdiction and has no authority to
resolve controversial issues which should be litigated before a court of general jurisdiction.
Under existing laws, however, this concept no longer holds. Regional Trial Courts now have
exclusive jurisdiction, not only over applications for original registration of title to lands, including
improvements and interests therein, but also over petitions filed after original registration of title,
with power to hear and determine all questions arising upon such applications or petitions.
Section 2 of PD 1529, otherwise known as the Property Registration Decree, provides, as
follows:
SEC. 2. Nature of registration proceedings: jurisdiction of courts. Judicial proceedings for
the registration of lands throughout the Philippines shall be in rem and shall be based on the
generally accepted principles underlying the Torrens system.
Courts of First Instance shall have exclusive jurisdiction over all applications for original
registration of title to lands, including improvements and interests therein, and over all
petitions filed after original registration of title, with power to hear and determine all questions
arising upon such applications or petitions. The court through its clerk of court shall furnish
the Land Registration Commission with two certified copies of all pleadings, exhibits, orders,
and decisions filed or issued in applications or petitions for land registration, with the
exception of sten ographic notes, within five days from the filing or issuance thereof.
But, even under Act 496, the Land Registration Act, the court of first instance, sitting as a land
registration court, has the authority to conduct a hearing, receive evidence, and decide
controversial matters with a view to determining whether or not the filed notice of adverse clam
is valid. Section 110 of Act 496 provides:
SEC. 110. Whoever claims any part or interest in registered land adverse to the registered
owner, arising subsequent to the date of the original registration, may, if no other provision is
made in this Act for registering the same, make a statement in writing setting forth fully his
alleged right or interest, and how or under whom acquired, and a reference to the volume
and page of the certificate of title of the registered owner, and a description of the land in
which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimant's
residence, and designate a place at which all notices may be served upon him. This
statement shall be entitled to registration as an adverse claim, and the court, upon a petition
of any party in interest, shall grant a speedy hearing upon the question of the validity of such
adverse claim and shag enter such decree therein as justice and equity may require. If the
claim is adjudged to be invalid, the registration shall be cancelled. If, iii any case the court
after notice and hearing shall find that a claim thus registered was frivolous or vexatious, it
may tax the adverse claimant double or treble costs in its discretion.
At any rate, it appears that the disputed "Contract of Purchase and Sale" entered into by and
between the parties on 30 September 1963 had already been rescinded so that there is no
more basis for the continued annotation of the notice of adverse claim on the petitioner's TCT
No. 62203. Records show that the herein petitioner had filed an action against the respondent
for the rescission of said contract of purchase and sale on 1 August 1967 before the Court of
First Instance of Manila, docketed therein as Civil Case no. 70298, and after trial, the said
contract was ordered rescinded for reasons therein stated. On appeal to the Court of Appeals,
docketed therein as CA-G.R. No. 42467-R, the judgment was affirmed. The respondent then
appealed to this Court, docketed as G.R. No. L-35008; again, its petition was denied on 15 May
1972, "for being factual (insufficient showing that the findings of fact are unsupported by
substantial evidence) and for lack of merit." The judgment became final and executory on 14
August 1972.
WHEREFORE, the resolution of the respondent Court, dated 17 August 1970, is hereby set
aside. The notice of adverse claim annotated on petitioner's TCT No. 62203 by virtue of the
"Contract of Purchase and Sale" entered into by and between the parties on 30 September
1963 is hereby ordered cancelled. Without costs.
SO ORDERED.
Yap (Chairman), Melencio-Herrera, Paras and Sarmiento, JJ., concur.

ARTEMIO INIEGO,
[1]

Petitioner,


- versus -

The HONORABLE JUDGE
GUILLERMO G. PURGANAN,
in his official capacity as
Presiding Judge of the Regional
Trial Court, Branch 42, City of
Manila, and FOKKER C.
SANTOS,
Respondents.

G. R. No. 166876

Present:

PANGANIBAN, C.J.
Chairperson,
YNARES-SANTIAGO,
AUSTRIA-MARTINEZ,
CALLEJO, SR., and
CHICO-NAZARIO, JJ.


Promulgated:


March 24, 2006
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

D E C I S I O N


CHICO-NAZARIO, J.:


For this Court to grant this petition for review on certiorari under Rule 45 of
the Rules of Court, petitioner has to persuade us on two engaging questions of law.
First, he has to convince us that actions for damages based on quasi-delict are
actions that are capable of pecuniary estimation, and therefore would fall under the
jurisdiction of the municipal courts if the claim does not exceed the jurisdictional
amount of P400,000.00 in Metro Manila. Second, he has to convince us that the
moral and exemplary damages claimed by the private respondent should be
excluded from the computation of the above-mentioned jurisdictional amount
because they arose from a cause of action other than the negligent act of the
defendant.

Petitioner urges us to reverse the 28 October 2004 Decision and 26 January
2005 Resolution of the Court of Appeals, Eighth Division, in CA-G.R. SP No.
76206 denying due course to the petition for certiorari filed by petitioner under
Rule 65, elevating the 21 October 2002 Omnibus Order and the 21 January 2003
Order of the Regional Trial Court (RTC), Branch 42, City of Manila. The
dispositive portion of the 28 October 2004 Decision of the Court of Appeals reads:

WHEREFORE, the petition is DENIED DUE COURSE and
DISMISSED for lack of merit.
[2]



The factual and procedural antecedents of this case are as follows:

On 1 March 2002, private respondent Fokker Santos filed a complaint for
quasi-delict and damages against Jimmy T. Pinion, the driver of a truck involved in
a traffic accident, and against petitioner Artemio Iniego, as owner of the said truck
and employer of Pinion. The complaint stemmed from a vehicular accident that
happened on 11 December 1999, when a freight truck allegedly being driven by
Pinion hit private respondents jitney which private respondent was driving at the
time of the accident.

On 24 August 2002, private respondent filed a Motion to Declare defendant
in Default allegedly for failure of the latter to file his answer within the final
extended period. On 28 August 2002, petitioner filed a Motion to Admit and a
Motion to Dismiss the complaint on the ground, among other things, that the RTC
has no jurisdiction over the cause of action of the case.

On 21 October 2002, public respondent Judge Guillermo G. Purganan,
acting as presiding judge of the RTC, Branch 42, Manila, issued the assailed
Omnibus Order denying the Motion to Dismiss of the petitioner and the Motion to
Declare Defendant in Default of the private respondent. Pertinent portions of the
Omnibus Order and the dispositive portion thereof read:

In his opposition to the motion to declare him in default and his
Motion to Admit defendant IEGO alleged that he never received the
Order dated 12 August 2002. But believing in good faith, without being
presumptuous, that his 3
rd
Motion for additional Time to file or any
appropriate [pleading] would be granted, he filed the aforesaid Motion
received by the Court on 23 August 2002.

The explanation of defendant IEGO has merit. The order
dated 12 August 2002 was sent to a wrong address, thus defendant
IEGO did not receive it. Since it was not received, he was not aware
that the court would grant no further extension. The Motion to Admit
Motion to Dismiss has to be granted and the Motion to declare
Defendant IEGO [in default] has to be DENIED.

x x x x

The plaintiff opines that this court has exclusive jurisdiction
because the cause of action is the claim for damages, which
exceeds P400,000.00. The complaint prays for actual damages in the
amount of P40,000.00, moral damages in the amount of P300,000.00,
and exemplary damages in the amount of P150,000.00. Excluding
attorneys fees in the amount of P50,000.00, the total amount of damages
being claimed is P490,000.00.

Proceeding on the assumption that the cause of action is the claim
of (sic) for damages in the total amount of P490,000.00, this court has
jurisdiction. But is the main cause of action the claim for damages?

This court is of the view that the main cause of action is not the
claim for damages but quasi-delict. Damages are being claimed only as a
result of the alleged fault or negligence of both defendants under Article
2176 of the Civil Code in the case of defendant Pinion and under Article
2180 also of the Civil Code in the case of defendant Iniego. But since
fault or negligence (quasi-delicts) could not be the subject of pecuniary
estimation, this court has exclusive jurisdiction.

x x x x

WHEREFORE, in view of all the foregoing, the motion to declare
defendant Iniego in default and the said defendants motion to dismiss
are denied.
[3]


On 7 November 2002, petitioner filed a Motion for Reconsideration of the
Omnibus Order of 21 October 2002. On 21 January 2003, public respondent
issued an Order denying petitioners motion for reconsideration. Pertinent portions
of the 21 January 2003 Order are reproduced hereunder:

What this court referred to in its Order sought to be reconsidered
as not capable of pecuniary estimation is the CAUSE OF ACTION,
which is quasi-delict and NOT the amount of damage prayed for.

x x x x

WHEREFORE, in view of the foregoing, the motion for
reconsideration is DENIED.
[4]



Petitioner elevated the 21 October 2002 and 21 January 2003 Orders of the
RTC to the Court of Appeals on petition for certiorari under Rule 65 of the Rules
of Court. On 28 October 2004, the Court of Appeals promulgated the assailed
Decision, the dispositive portion thereof reads:

WHEREFORE, the petition is DENIED DUE COURSE and
dismissed for lack of merit.
[5]



On 22 November 2004, petitioner moved for reconsideration, which was
denied by the Court of Appeals on 26 January 2005. Hence, this present petition.

Petitioner claims that actions for damages based on quasi-delict are actions
that are capable of pecuniary estimation; hence, the jurisdiction in such cases falls
upon either the municipal courts (the Municipal Trial Courts, Metropolitan Trial
Courts, Municipal Trial Courts In Cities, And Municipal Circuit Trial Courts), or
the Regional Trial Courts, depending on the value of the damages claimed.

Petitioner argues further that should this Court find actions for damages
capable of pecuniary estimation, then the total amount of damages claimed by the
private respondent must exceed P400,000.00 in order that it may fall under the
jurisdiction of the RTC. Petitioner asserts, however, that the moral and exemplary
damages claimed by private respondent be excluded from the computation of the
total amount of damages for jurisdictional purposes because the said moral and
exemplary damages arose, not from the quasi-delict, but from the petitioners
refusal to pay the actual damages.

I

Actions for damages based on quasi-delicts are primarily and effectively
actions for the recovery of a sum of money for the damages suffered because
of the defendants alleged tortious acts, and are therefore capable of pecuniary
estimation.

In a recent case,
[6]
we did affirm the jurisdiction of a Municipal Circuit Trial
Court in actions for damages based on quasi-delict, although the ground used to
challenge said jurisdiction was an alleged forum shopping, and not the
applicability of Section 19(1) of Batas Pambansa Blg. 129.

According to respondent Judge, what he referred to in his assailed Order as
not capable of pecuniary estimation is the cause of action, which is a quasi-delict,
and not the amount of damage prayed for.
[7]
From this, respondent Judge
concluded that since fault or negligence in quasi-delicts cannot be the subject of
pecuniary estimation, the RTC has jurisdiction. The Court of Appeals affirmed
respondent Judge in this respect.
[8]


Respondent Judges observation is erroneous. It is crystal clear from
B.P. Blg. 129, as amended by Republic Act No. 7691, that what must be
determined to be capable or incapable of pecuniary estimation is not the cause of
action, but the subject matter of the action.
[9]
A cause of action is the delict or
wrongful act or omission committed by the defendant in violation of the primary
rights of the plaintiff.
[10]
On the other hand, the subject matter of the action is
the physical facts, the thing real or personal, the money, lands, chattels, and the
like, in relation to which the suit is prosecuted, and not the delict or wrong
committed by the defendant.
[11]


The case of Lapitan v. Scandia, Inc., et al.,
[12]
has guided this Court time and
again in determining whether the subject matter of the action is capable of
pecuniary estimation. InLapitan, the Court spoke through the eminent Mr. Justice
Jose B.L. Reyes:

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. I f 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
[now Regional Trial Courts] 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 like suits to have the
defendant perform his part of the contract (specific performance) and in
actions for support, or for annulment of a judgment or to foreclose a
mortgage, this court has considered such actions as cases where the
subject of the litigation may not be estimated in terms of money, and are
cognizable exclusively by courts of first instance [now Regional Trial
Courts]. x x x.
[13]
(Emphasis supplied.)


Actions for damages based on quasi-delicts are primarily and effectively
actions for the recovery of a sum of money for the damages suffered because of the
defendants allegedtortious acts. The damages claimed in such actions represent
the monetary equivalent of the injury caused to the plaintiff by the defendant,
which are thus sought to be recovered by the plaintiff. This money claim is the
principal relief sought, and is not merely incidental thereto or a consequence
thereof. It bears to point out that the complaint filed by private respondent before
the RTC actually bears the caption for DAMAGES.

Fault or negligence, which the Court of Appeals claims is not capable of
pecuniary estimation, is not actionable by itself. For such fault or negligence to be
actionable, there must be a resulting damage to a third person. The relief available
to the offended party in such cases is for the reparation, restitution, or payment of
such damage, without which any alleged offended party has no cause of action or
relief. The fault or negligence of the defendant, therefore, is inextricably
intertwined with the claim for damages, and there can be no action based on quasi-
delict without a claim for damages.

We therefore rule that the subject matter of actions for damages based on
quasi-delict is capable of pecuniary estimation.

II

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.


Despite our concurrence in petitioners claim that actions for damages based
on quasi-delict are actions that are capable of pecuniary estimation, we find that
the total amount of damages claimed by the private respondent nevertheless still
exceeds the jurisdictional limit of P400,000.00 and remains under the jurisdiction
of the RTC.

Petitioner argues that in actions for damages based on quasi-delict, claims
for damages arising from a different cause of action (i.e., other than the fault or
negligence of the defendant) should not be included in the computation of the
jurisdictional amount. According to petitioner, the moral and exemplary damages
claimed by the respondents in the case at bar are not direct and proximate
consequences of the alleged negligent act. Petitioner points out that the complaint
itself stated that such moral and exemplary damages arose from the alleged refusal
of defendants to honor the demand for damages, and therefore there is no
reasonable cause and effect between the fault or negligence of the defendant and
the claim for moral and exemplary damages.
[14]
If the claims for moral and
exemplary damages are not included in the computation for purposes of
determining jurisdiction, only the claim for actual damages in the amount
of P40,000.00 will be considered, and the MeTC will have jurisdiction.

We cannot give credence to petitioners arguments. The distinction he made
between damages arising directly from injuries in a quasi-delict and those arising
from a refusal to admit liability for a quasi-delict is more apparent than real, as the
damages sought by respondent originate from the same cause of action: the quasi-
delict. The fault or negligence of the employee and the juris tantum presumption
of negligence of his employer in his selection and supervision are the seeds of the
damages claimed, without distinction.

Even assuming, for the sake of argument, that the claims for moral and
exemplary damages arose from a cause of action other than the quasi-delict, their
inclusion in the computation of damages for jurisdictional purposes is still proper.
All claims for damages should be considered in determining the jurisdiction of the
court regardless of whether they arose from a single cause of action or several
causes of action. Rule 2, Section 5, of the Rules of Court allows a party to assert as
many causes of action as he may have against the opposing party. Subsection (d)
of said section provides that where the claims in all such joined causes of action
are principally for recovery of money, the aggregate amount claimed shall be the
test of jurisdiction.
[15]


Hence, whether or not the different claims for damages are based on a single
cause of action or different causes of action, it is the total amount thereof which
shall govern. Jurisdiction in the case at bar remains with the RTC, considering that
the total amount claimed, inclusive of the moral and exemplary damages claimed,
is P490,000.00.

In sum, actions for damages based on quasi-delicts are actions that
are capable of pecuniary estimation. As such, they fall within the jurisdiction of
either the RTC or the municipal courts, depending on the amount of damages
claimed. In this case, 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.

WHEREFORE, the petition for review on certiorari is
hereby DENIED for lack of merit. The Decision and Resolution of the Court of
Appeals dated 28 October 2004 and 26 January 2005, respectively,
are AFFIRMED insofar as they held that the Regional Trial Court has
jurisdiction. No costs.

SO ORDERED.

FLORDELIZA MENDOZA,
Petitioner,



- versus -



MUTYA SORIANO and Minor JULIE ANN
SORIANO duly represented by her natural
mother and guardian ad litem MUTYA
SORIANO,
Respondents.
G.R. No. 164012

Present:

QUISUMBING, J.,

Chairperson,
CARPIO,
CARPIO MORALES,

TINGA, and
VELASCO, JR., JJ.


Promulgated:

June 8, 2007
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DECISION
QUISUMBING, J.:
In this petition for review under Rule 45 of the Rules of Court, petitioner
asks this Court to reverse and set aside the Decision
[1]
dated November 17,
2003 and the Resolution
[2]
dated May 24, 2004 of the Court of Appeals in CA-G.R.
CV No. 69037. The appellate court found petitioner, as employer
of Lomer Macasasa, liable for damages.
The facts are as follows:
At around 1:00 a.m., July 14, 1997, Sonny Soriano, while
crossing Commonwealth Avenue near Luzon Avenue in Quezon City, was hit by a
speeding Tamaraw FX driven by Lomer Macasasa. Soriano was thrown five
meters away, while the vehicle only stopped some 25 meters from the point of
impact. Gerard Villaspin, one of Sorianos companions, asked Macasasa to bring
Soriano to the hospital, but after checking out the scene of the
incident, Macasasa returned to the FX, only to flee. A school bus brought Soriano
to EastAvenue Medical Center where he later died. Subsequently, the Quezon City
Prosecutor recommended the filing of a criminal case for reckless imprudence
resulting to homicide against Macasasa.
[3]

On August 20, 1997, respondents Mutya Soriano and Julie Ann Soriano,
Sorianos wife and daughter, respectively, filed a complaint for damages against
Macasasa and petitionerFlordeliza Mendoza, the registered owner of the vehicle. The
complaint was docketed as Civil Case No. C-18038 in
the Regional Trial Court of Caloocan City, Branch 121. Respondents prayed that
Macasasa and petitioner be ordered to pay them: P200,000 moral damages; P500,000
for lost income; P22,250 for funeral services; P45,000 for burial lot; P15,150 for
interment and lapida; P8,066 for hospitalization, other medical and transportation
expenses; P28,540 for food and drinks during the wake; P50,000 exemplary
damages; P60,000 indemnity for Sorianos death; and P25,000 for attorneys fees
plus P500 per court appearance.
[4]

In her answer, petitioner Mendoza maintained that she was not liable since
as owner of the vehicle, she had exercised the diligence of a good father of a
family over her employee, Macasasa.
Upon respondents motion, the complaint for damages against Macasasa was
dismissed.
After trial, the trial court also dismissed the complaint against
petitioner.
[5]
It found Soriano negligent for crossing Commonwealth Avenue by
using a small gap in the islands fencing rather than the pedestrian overpass. The
lower court also ruled that petitioner was not negligent in the selection and
supervision of Macasasa since complainants presented no evidence to support their
allegation of petitioners negligence.
[6]

Respondents appealed. The Court of Appeals reversed the trial
court. The dispositive portion of the appellate courts decision reads:
WHEREFORE, the judgment appealed from is REVERSED, and
another one is hereby rendered ordering [petitioner] Flordeliza Mendoza to
pay [respondents] Mutya Soriano and Julie Ann Soriano the following
amounts:
1. Hospital and Burial Expenses P80,926.25
2. Loss of earning capacity P77,000.00
3. Moral Damages P20,000.00
4. Indemnity for the death of Sonny Soriano P50,000.00
Actual payment of the aforementioned amounts should, however, be
reduced by twenty (20%) per cent due to the presence of contributory
negligence by the victim as provided for in Article 2179 of the Civil
Code.
SO ORDERED.
[7]

While the appellate court agreed that Soriano was negligent, it also found
Macasasa negligent for speeding, such that he was unable to avoid hitting the
victim. It observed thatSorianos own negligence did not preclude recovery of
damages from Macasasas negligence. It further held that since petitioner failed to
present evidence to the contrary, and conformably with Article 2180
[8]
of the Civil
Code, the presumption of negligence of the employer in the selection and
supervision of employees stood.
Petitioners motion for reconsideration was denied by the appellate court in a
Resolution
[9]
dated May 24, 2004.
Hence, this appeal where petitioner alleges that:
I.
THE TOTAL AMOUNT PRAYED FOR IN THE COMPLAINT IS
NOT WITHIN THE JURISDICTION OF THE REGIONAL TRIAL
COURT.
II.
[COROLLARILY], THE AWARD OF DAMAGES IN FAVOR OF
THE RESPONDENTS [HAS] NO BASIS IN LAW.
[10]

The issues are simple: (1) Did the Regional Trial Court have jurisdiction to try
the case? and (2) Was there sufficient legal basis to award damages?
Petitioner argues that the amount claimed by respondents is within the
jurisdiction of the Metropolitan Trial Court. She posits that to determine the
jurisdictional amount, what should only be considered are the
following: P22,250 for funeral services; P45,000 for burial lot; P15,150 for
interment and lapida; P8,066 for hospitalization and transportation;P28,540 for
food and drinks during the wake; and P60,000 indemnity for Sorianos death. She
maintains that the sum of these amounts, P179,006, is below the jurisdictional
amount of the Regional Trial Court. She states that under Section 19(8) of the
Judiciary Reorganization Act of 1980, the following claims of respondents must be
excluded: P200,000 moral damages, P500,000 for lost income; P50,000 exemplary
damages; P25,000 attorneys fees plus P500 per court appearance. Petitioner thus
prays that the decision of the Court of Appeals be reversed, and the dismissal of
the case by the trial court be affirmed on the ground of lack of jurisdiction.
Section 19(8) of Batas Pambansa Blg. 129,
[11]
as amended by Republic Act
No. 7691, states the pertinent law.
SEC. 19. Jurisdiction in civil cases.Regional Trial Courts shall exercise
exclusive original jurisdiction:
x x x x
(8) In all other cases in which the demand, exclusive of interest,
damages of whatever kind, attorney's fees, litigation expenses, and costs
or the value of the property in controversy exceeds One hundred
thousand pesos (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).
But relatedly, Administrative Circular No. 09-94
[12]
expressly states:
x x x x
2. The exclusion of the term damages of whatever kind in
determining the jurisdictional amount under Section 19(8) and Section
33(1) of BP Blg. 129, as amended by RA 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. (Underscoring supplied.)
Actions for damages based on quasi-delicts, as in this case, are primarily and
effectively actions for the recovery of a sum of money for the damages for tortious
acts.
[13]
In this case, respondents claim of P929,006 in damages and P25,000
attorneys fees plus P500 per court appearance represents the monetary equivalent for
compensation of the alleged injury. These money claims are the principal reliefs
sought by respondents in their complaint for damages.
[14]
Consequently then, we hold
that the Regional Trial Court of Caloocan City possessed and properly exercised
jurisdiction over the case.
[15]

Petitioner further argues that since respondents caused the dismissal of the
complaint against Macasasa, there is no longer any basis to find her liable. She
claims that no iota of evidence was presented in this case to
prove Macasasas negligence, and besides, respondents can recover damages in the
criminal case against him.
Respondents counter that as Macasasas employer, petitioner was presumed
negligent in selecting and supervising Macasasa after he was found negligent by
the Court of Appeals.
The records show that Macasasa violated two traffic rules under the Land
Transportation and Traffic Code. First, he failed to maintain a safe speed to avoid
endangering lives.
[16]
Both the trial and the appellate courts found
Macasasa overspeeding.
[17]
The records show also that Soriano was thrown five
meters away after he was hit.
[18]
Moreover, the vehicle stopped only some 25
meters from the point of impact.
[19]

Both circumstances support the conclusion that the FX vehicle driven
by Macasasa was overspeeding. Second, Macasasa, the vehicle driver, did not
aid Soriano, the accident victim, in violation of Section 55,
[20]
Article V of the Land
Transportation and Traffic Code. While Macasasa at first agreed to bring Soriano to
the hospital, he fled the scene in a hurry. Contrary to petitioners claim, there is no
showing of any factual basis that Macasasa fled for fear of the peoples wrath. What
remains undisputed is that he did not report the accident to a police officer, nor did
he summon a doctor. Under Article 2185
[21]
of the Civil Code, a person driving a
motor vehicle is presumed negligent if at the time of the mishap, he was violating
traffic regulations.
While respondents could recover damages from Macasasa in a criminal case
and petitioner could become subsidiarily liable, still petitioner, as owner and
employer, is directly and separately civilly liable for her failure to exercise due
diligence in supervising Macasasa.
[22]
We must emphasize that this damage suit is
for the quasi-delict of petitioner, as owner and employer, and not for
the delict of Macasasa, as driver and employee.
Under Article 2180 of the Civil Code, employers are liable for the damages
caused by their employees acting within the scope of their assigned tasks. The
liability arises due to the presumed negligence of the employers in supervising
their employees unless they prove that they observed all the diligence of a good
father of a family to prevent the damage.
In this case, we hold petitioner primarily and solidarily liable for the damages
caused by Macasasa.
[23]
Respondents could recover directly from petitioner
[24]
since
petitioner failed to prove that she exercised the diligence of a good father of a family
in supervising Macasasa.
[25]
Indeed, it is unfortunate that petitioner harbored the
notion that the Regional Trial Court did not have jurisdiction over the case and opted
not to present her evidence on this point.
Lastly, we agree that the Court of Appeals did not err in ruling
that Soriano was guilty of contributory negligence for not using the pedestrian
overpass while crossingCommonwealth Avenue. We even note that the respondents
now admit this point, and concede that the appellate court had properly reduced by
20% the amount of damages it awarded. Hence, we affirm the reduction
[26]
of the
amount earlier awarded, based on Article 2179 of the Civil Code which reads:
When the plaintiff's own negligence was the immediate and
proximate cause of his injury, he cannot recover damages. But if his
negligence was only contributory, the immediate and proximate cause of
the injury being the defendant's lack of due care, the plaintiff may
recover damages, but the courts shall mitigate the damages to be
awarded.
WHEREFORE, we DENY the petition for lack of merit and
hereby AFFIRM the Decision dated November 17, 2003 and the Resolution
dated May 24, 2004 of the Court of Appeals in CA-G.R. CV No. 69037.
Costs against petitioner.
SO ORDERED.
IRENE SANTE AND REYNALDO
SANTE,
Petitioners,


- versus -


HON. EDILBERTO T.
CLARAVALL, in his capacity as
Presiding Judge of Branch 60,
Regional Trial Court of Baguio City,
and VITA N. KALASHIAN,
Respondents.

G.R. No. 173915

Present:

PUNO, C.J., Chairperson,
CARPIO MORALES,
LEONARDO-DE CASTRO,
BERSAMIN, and
VILLARAMA, JR., JJ.

Promulgated:

February 22, 2010
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DECISION
VILLARAMA, JR., J .:
Before this Court is a petition for certiorari
[1]
under Rule 65 of the 1997 Rules
of Civil Procedure, as amended, filed by petitioners Irene and Reynaldo Sante
assailing the Decision
[2]
dated January 31, 2006 and the Resolution
[3]
dated 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 damages
[4]
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 Dismiss
[5]
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
to P420,000.00 which was above the jurisdictional amount for MTCCs outside
Metro Manila. The trial court also later issued Orders on July 7, 2004
[8]
and July
19, 2004,
[9]
respectively reiterating its denial of the motion to dismiss and denying
petitioners motion for reconsideration.
Aggrieved, petitioners filed on August 2, 2004, a Petition for Certiorari and
Prohibition,
[10]
docketed as CA-G.R. SP No. 85465, before the Court of Appeals.
Meanwhile, on July 14, 2004, respondent and her husband filed an Amended
Complaint
[11]
increasing the claim for moral damages from P300,000.00
to P1,000,000.00. Petitioners filed a Motion to Dismiss with Answer Ad
Cautelam and Counterclaim, but the trial court denied their motion in an
Order
[12]
dated September 17, 2004.
Hence, petitioners again filed a Petition for Certiorari and
Prohibition
[13]
before the Court of Appeals, docketed as CA-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
MTCC as the allegations show that plaintiff was seeking to recover moral damages in
the amount ofP300,000.00, which amount was well within the jurisdictional amount
of the MTCC. The Court of Appeals added that the totality of claim rule used for
determining which court had jurisdiction could not be applied to the instant case
because plaintiffs claim for exemplary damages was not a separate and distinct cause
of action from her claim of moral damages, but merely incidental to it. Thus, the
prayer for exemplary damages should be excluded in computing the total amount of
the claim.
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.
In her Comment,
[16]
respondent averred that the nature of her complaint is for
recovery of damages. As such, the totality of the claim for damages, including the
exemplary damages as well as the other damages alleged and prayed in the
complaint, such as attorneys fees and litigation expenses, should be included in
determining jurisdiction. The total claim being P420,000.00, the RTC has
jurisdiction over the complaint.
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:
x x x x
(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).
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) years thereafter, such
jurisdictional amounts shall be adjusted further to Three hundred thousand pesos
(P300,000.00): Provided, however, That in the case of Metro Manila, the
abovementioned jurisdictional amounts shall be adjusted after five (5) years from
the effectivity of this Act to Four hundred thousand pesos (P400,000.00).
Relatedly, Supreme Court Circular No. 21-99 was issued declaring that the
first adjustment in jurisdictional amount of first level courts outside of Metro
Manila fromP100,000.00 to P200,000.00 took effect on March 20,
1999. Meanwhile, the second adjustment from P200,000.00 to P300,000.00
became effective on February 22, 2004 in accordance with OCA Circular No. 65-
2004 issued by the Office of the Court Administrator on May 13, 2004.
Based on the foregoing, there is no question that at the time of the filing of
the complaint on April 5, 2004, the MTCCs jurisdictional amount has been
adjusted toP300,000.00.
But where damages is the main cause of action, should the amount of moral
damages prayed for in the complaint be the sole basis for determining which court
has jurisdiction or should the total amount of all the damages claimed regardless of
kind and nature, such as exemplary damages, nominal damages, and attorneys
fees, etc., be used?
In this regard, Administrative Circular No. 09-94
[19]
is instructive:
x x x x
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 of petitioners. The complaint
principally sought an award of moral and exemplary damages, as well as attorneys
fees and litigation expenses, for the alleged shame and injury suffered by respondent
by reason of petitioners utterance while they were at a police station in
Pangasinan. It is settled that jurisdiction is conferred by law based on the facts alleged
in the complaint

since the latter comprises a concise statement of the ultimate facts
constituting the plaintiffs causes of action.
[20]
It is clear, based on the allegations of
the complaint, that respondents main action is for damages. Hence, the other forms
of damages being claimed by respondent, e.g., exemplary damages, attorneys fees
and litigation expenses, are not merely incidental to or consequences of the main
action but constitute the primary relief prayed for in the complaint.
In Mendoza v. Soriano,
[21]
it was held that in cases where the claim for
damages is the main cause of action, or one of the causes of action, the amount of
such claim shall be considered in determining the jurisdiction of the court. In the
said case, the 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.
Also, in Iniego v. Purganan,
[22]
the Court has held:
The amount of damages claimed is within the jurisdiction of the RTC,
since it is the claim for all kinds of damages that is the basis of determining the
jurisdiction of courts, whether the claims for damages arise from the same or from
different causes of action.
x x x x
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]

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, areAFFIRMED. 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.
No costs.
SO ORDERED.
MARJORIE B. CADIMAS, G.R. No. 180394
by her Attorney-In-Fact,
VENANCIO Z. ROSALES,
Petitioner, Present:

QUISUMBING, J.,
Chairperson,
- versus - CARPIO MORALES,
TINGA,
VELASCO, JR., and
BRION, JJ.
MARITES CARRION and
GEMMA HUGO, Promulgated:
Respondents.
September 29, 2008
x -----------------------------------------------------------------------------------x

D E C I S I O N

TINGA, J.:

This is a petition for review on certiorari
[1]
under Rule 45 of the 1997 Rules
of Civil Procedure, assailing the Decision
[2]
and Resolution
[3]
of the Court of
Appeals in CA-G.R. SP No. 98572. The appellate court set aside two orders
[4]
of
the Regional Trial Court (RTC), Branch 85, Quezon City issued in Civil Case
No. Q-04-53581 on the ground that the trial court had no jurisdiction over the
case.

The instant petition stemmed from the
complaint
[5]
for accion reivindicatoria and damages filed by petitioner Marjorie
B. Cadimas, through her attorney-in-fact, Venancio Z. Rosales,
against respondents Marites Carrion and Gemma Hugo. The complaint was
docketed as Civil Case No. Q-04-53581 and raffled to Branch 85 of the RTC
of Quezon City.


In the complaint, petitioner averred that she and respondent Carrion were
parties to a Contract To Sell dated 4 August 2003, wherein petitioner sold to
respondent Carrion a town house located at Lot 4-F-1-12 No. 23 Aster Street, West
Fairview Park Subdivision, Quezon City for the sum of P330,000.00 to be paid in
installments. According to petitioner, Carrion had violated paragraph 8 of said
contract when she transferred ownership of the property to respondent Hugo under
the guise of a special power of attorney, which authorized the latter to manage and
administer the property for and in behalf of respondent Carrion. Allegedly,
petitioner asked respondent Carrion in writing to explain the alleged violation but
the latter ignored petitioners letter, prompting petitioner to demand in writing that
Carrion and Hugo vacate the property and to cancel the contract.
[6]







On 28 October 2004, petitioner filed a Motion To Declare
Defendant Marites Carrion In Default,
[7]
alleging that despite the service of
summons and a copy of the complaint, respondent Carrion failed to file a
responsive pleading within the reglementary period.


Respondent Hugo filed a Motion To Dismiss
[8]
on her behalf and on behalf
of respondent Carrion on 18 November 2004, citing the grounds of lack of
jurisdiction to hear the case on the part of the RTC and estoppel and/or laches on
the part of petitioner. Respondent Hugo argued that the Housing and Land Use
Regulatory Board (HLURB) has jurisdiction over the complaint because
ultimately, the sole issue to be resolved was whether petitioner, as the owner and
developer of the subdivision on which the subject property stood, was guilty of
committing unsound real estate business practices.


In the same motion, respondent Hugo averred that the RTC had not acquired
jurisdiction over the person of respondent Carrion for not complying with Section
16, Rule 14 of the Rules of Court on the proper service of summons on a non-
resident defendant. However, attached to the motion was a special power of
attorney, whereby respondent Carrion had authorized respondent Hugo, among
others, to manage and administer the subject property and to prosecute and defend
all suits to protect her rights and interest in said property.
[9]



After petitioner filed a comment on the motion to dismiss, the RTC issued
an Omnibus Order
[10]
on 21 March 2005, which denied the motion to dismiss. The
RTC held that the courts jurisdiction is not determined by the defenses set up in
the answer or the motion to dismiss.

In the same omnibus order, the RTC ruled that summons was served
properly, thus, the court had acquired jurisdiction over respondent Carrion. The
RTC noted that respondent Hugos failure to disclose at the outset that she was
equipped with a special power of attorney was an act constitutive of misleading the
court. Thus, the RTC declared respondent Carrion in default, directed petitioner to
present evidence ex-parte against respondent Carrion, and respondent Hugo to file
an answer.

On 18 April 2005, respondent Hugo filed an answer on her behalf and as the
attorney-in-fact of respondent Carrion.
[11]
The answer pleaded a compulsory
counterclaim for damages. The following day, petitioner presented evidence ex-
parte against respondent Carrion. Thus, on 22 April 2005, respondent Hugo sought
a reconsideration of the omnibus order, praying for the dismissal of the complaint,
the cancellation of the presentation of evidence ex-parte, the lifting of the order of
default against respondent Carrion and the issuance of an order directing the
extraterritorial service of summons on respondent Carrion.
[12]



On 17 January 2007, the RTC issued an order, upholding its jurisdiction
over petitioners complaint. Citing the interest of substantial justice, the RTC lifted
the order of default against respondent Carrion and set the pre-trial conference of
the case.
[13]


However, respondents elevated the matter to the Court of Appeals via a
special civil action for certiorari, praying that the Omnibus Order dated 21 March
2005 and Order dated 17 January 2007 issued by Judge Teodoro T. Riel be
reversed and set aside and that the complaint in Civil Case No. Q-04-
53581 be dismissed for lack of jurisdiction.

On 27 September 2007, the Court of Appeals rendered the assailed Decision
granting respondents petition for certiorari. The appellate court set aside the
assailed orders of the RTC and ordered the dismissal of petitioners complaint for
lack of jurisdiction. In its Resolution dated 9 November 2007, the Court of Appeals
denied petitioners motion for reconsideration.

Hence, the instant petition, raising the following arguments: (1) based on the
allegations in the complaint, the RTC has jurisdiction over Civil Case No. Q-04-
53581; (2) in any case, respondents have expressly submitted to or recognized the
jurisdiction of the RTC by filing an answer with counterclaim; and (3) respondents
erroneously availed of a Rule 65 petition instead of filing a timely appeal from the
order denying their motion to dismiss.
[14]


Essentially, petitioner argues that based on the allegations in the complaint
and the reliefs sought, the RTC has jurisdiction over the matter. In any case, the
compulsory counterclaim pleaded in the answer of respondents was an express
recognition on their part of the jurisdiction of the RTC over the complaint
for accion reivindicatoria, petitioner adds.

The petition is meritorious.

The nature of an action and the jurisdiction of a tribunal are determined by
the material allegations of the complaint and the law at the time the action was
commenced.Jurisdiction of the tribunal over the subject matter or nature of an
action is conferred only by law and not by the consent or waiver upon a court
which, otherwise, would have no jurisdiction over the subject matter or nature of
an action.
[15]


An examination of Section 1 of Presidential Decree (P.D.) No.
1344,
[16]
which enumerates the regulatory functions of the HLURB,
[17]


readily shows that its quasi-judicial function is limited to hearing only the
following specific cases:

SECTION 1. In the exercise of its functions to regulate the real estate
trade and business and in addition to its powers provided for in Presidential
Decree No. 957, the National Housing Authority shall have exclusive jurisdiction
to hear and decide cases of the following nature:

A. Unsound real estate business practices;
B. Claims involving refund and any other claims filed by subdivision lot
or condominium unit buyer against the project owner, developer,
dealer, broker, or salesman; and
C. Cases involving specific performance of contractual and statutory
obligations filed by buyers of subdivision lot or condominium unit
against the owner, developer, dealer or salesman.


The aforequoted provision must be read in the light of the statutes preamble
or the introductory or preparatory clause that explains the reasons for its enactment
or the contextual basis for its interpretation. The scope of the regulatory authority
thus lodged in the National Housing Authority (NHA) [now HLURB] is indicated
in the second and thirdpreambular paragraphs of the statute which provide:




WHEREAS, numerous reports reveal that many real estate subdivision
owners, developers, operators, and/or sellers have reneged on their representations
and obligations to provide and maintain properly subdivision roads, drainage,
sewerage, water systems, lighting systems and other similar basic requirements,
thus endangering the health and safety of home and lot buyers;

WHEREAS, reports of alarming magnitude also show cases of swindling
and fraudulent manipulations perpetrated by unscrupulous subdivision and
condominium sellers and operators, such as failure to deliver titles to the buyers
or titles free from liens and encumbrances, and to pay real estate taxes, and
fraudulent sales of the same subdivision lots to different innocent purchasers for
value.
[18]



The boom in the real estate business all over the country resulted in more
litigation between subdivision owners/developers and lot buyers with the issue of
the jurisdiction of the NHA or the HLURB over such controversies as against that
of regular courts. In the cases that reached this Court, the ruling has consistently
been that the NHA or the HLURB has jurisdiction over complaints arising from
contracts between the subdivision developer and the lot buyer or those aimed at
compelling the subdivision developer to comply with its contractual and statutory
obligations to make the subdivision a better place to live in.
[19]


We agree with the ruling of the RTC that it has jurisdiction over the case
based on the allegations of the complaint. Nothing in the complaint or in the
contract to sell suggests that petitioner is the proper party to invoke the jurisdiction
of the HLURB. There is nothing in the allegations in the complaint or in the terms
and conditions of the contract to sell that would suggest that the nature of the
controversy calls for the application of either P.D. No. 957 or P.D. No. 1344
insofar as the extent of the powers and duties of the HLURB is concerned.

Note particularly paragraphs (b) and (c) of Sec. 1, P.D. No. 1344 as worded,
where the HLURBs jurisdiction concerns cases commenced by subdivision lot or
condominium unit buyers. As to paragraph (a), concerning unsound real estate
practices, the logical complainants would be the buyers and customers against the
sellers (subdivision owners and developers or condominium builders and realtors),
and not vice versa.
[20]


The complaint does not allege that petitioner is a subdivision lot buyer. The
contract to sell does not contain clauses which would indicate that petitioner has
obligations in the capacity of a subdivision lot developer, owner or broker or
salesman or a person engaged in real estate business. From the face of the
complaint and the contract to sell, petitioner is an ordinary seller of an interest in
the subject property who is seeking redress for the alleged violation of the terms of
the contract to sell. Petitioners complaint alleged that a contract to sell over a
townhouse was entered into by and between petitioner and respondent Carrion and
that the latter breached the contract when Carrion transferred the same to
respondent Hugo without petitioners consent.
[21]
Thus, petitioner sought
the cancellation of the contract and the recovery of possession and ownership of
the town house. Clearly, the complaint is well within the jurisdiction of the RTC.

In Javellana v. Hon. Presiding Judge, RTC, Branch 30, Manila,
[22]
the Court
affirmed the jurisdiction of the RTC over the complaint for accion publiciana and
sum of money on the ground that the complaint did not allege that the subject lot
was part of a subdivision project but that the sale was an ordinary sale on an
installment basis. Even the mere assertion that the defendant is a subdivision
developer or that the subject lot is a subdivision lot does not automatically vest
jurisdiction on the HLURB. On its face, the complaint must sufficiently describe
the lot as a subdivision lot and sold by the defendant in his capacity as a
subdivision developer to fall within the purview of P.D. No. 957 and P.D. No.
1344 and thus within the exclusive jurisdiction of the HLURB.
[23]


In their comment, respondents cite Antipolo Realty Corp. v. National
Housing Authority,
[24]
to bolster the argument that the HLURB has jurisdiction
over controversies involving the determination of the rights of the parties under a
contract to sell a subdivision lot. Antipolo Realty is not squarely applicable to the
instant controversy. The issue in said case called for the determination of whether
the developer complied with its obligations to complete certain specified
improvements in the subdivision within the specified period of time, a case that
clearly falls under Section 1, paragraph (c) of P.D. No. 1344.

In the instances where the jurisdiction of the HLURB was upheld, the
allegations in the complaint clearly showed that the case involved the
determination of the rights and obligations of the parties in a sale of real estate
under P.D. No. 957,
[25]
or the complaint for specific performance sought to compel
the subdivision developer to comply with its undertaking under the contract to
sell,
[26]
or the claim by the subdivision developer would have been properly
pleaded as a counterclaim in the HLURB case filed by the buyer against the
developer to avoid splitting causes of action.
[27]


The statement in Suntay v. Gocolay
[28]
to the effect that P.D. No. 957
encompasses all questions regarding subdivisions and condominiums, which was
cited by the Court of Appeals in the assailed decision, is a mere obiter dictum. As a
matter of fact, the Court in Suntay nullified the orders issued by the HLURB over
the action for the annulment of an auction sale, cancellation of notice of levy and
damages on the ground of lack of jurisdiction. P.D. No. 957 and P.D. No. 1344
were not the applicable laws because the action was brought against a
condominium buyer and not against the developer, seller, or broker contemplated
under P.D. No. 1344. The action likewise involved the determination of ownership
over the disputed condominium unit, which by its nature does not fall under the
classes of disputes cognizable by the HLURB under Section 1 of P.D. No. 1344.

The Court of Appeals held that the provision in the contract to sell
mandating membership of the buyer of the housing unit in a housing corporation
was a strong indication that the property purchased by respondent Carrion from
petitioner was part of a tract of land subdivided primarily for residential purposes.
Thus, the appellate court concluded that the HLURB has jurisdiction over the
controversy because the property subject thereof was part of a subdivision project.

Not every controversy involving a subdivision or condominium unit falls
under the competence of the HLURB
[29]
in the same way that the mere allegation
of relationship between the parties, i.e., that of being subdivision owner/developer
and subdivision lot buyer, does not automatically vest jurisdiction in the HLURB.
For an action to fall within the exclusive jurisdiction of the HLURB, the decisive
element is the nature of the action as enumerated in Section 1 of P.D. No.
1344.
[30]
Notably, in Spouses Dela Cruz v. Court of Appeals,
[31]
the Court upheld
the jurisdiction of the RTC over the complaint for cancellation of the contract to
sell of a subdivision house and lot because the case did not fall under any of the
cases mentioned in Section 1, P.D. No. 1344. In interpreting said provision, the
Court explained, thus:

On this matter, we have consistently held that the concerned administrative
agency, the National Housing Authority (NHA) before and now the HLURB, has
jurisdiction over complaints aimed at compelling the subdivision developer to
comply with its contractual and statutory obligations.


For their part, respondents claim that the resolution of the case ultimately
calls for the interpretation of the contract to sell and the determination of whether
petitioner is guilty of committing unsound real estate business practices, thus, the
proper forum to hear and decide the matter is the HLURB. The argument does not
impress.


It is an elementary rule of procedural law that jurisdiction of the court over
the subject matter is determined by the allegations of the complaint irrespective of
whether or not the plaintiff is entitled to recover upon all or some of the claims
asserted therein. As a necessary consequence, the jurisdiction of the court cannot
be made to depend upon the defenses set up in the answer or upon the motion to
dismiss, for otherwise, the question of jurisdiction would almost entirely depend
upon the defendant. What determines the jurisdiction of the court is the nature of
the action pleaded as appearing from the allegations in the complaint. The
averments in the complaint and the character of the relief sought are the matters to
be consulted.
[32]
Thus, the allegations in respondents motion to dismiss on the
unsound real estate business practices allegedly committed by petitioner, even if
proved to be true, cannot serve to oust the RTC of its jurisdiction over actions for
breach of contract and damages which has been conferred to it by law.

WHEREFORE, the instant petition for review on certiorari is GRANTED
and the Decision dated 27 September 2007 and Resolution dated 9 November 2007
of the Court of Appeals in CA-G.R. SP No. 98572 are REVERSED and SET
ASIDE. The orders dated 21 March 2005 and 17 January 2007 of the Regional
Trial Court, Branch 85, Quezon City in Civil Case No. Q-04-
53581 are REINSTATED. The Regional Trial Court is ORDERED to resume the
proceedings in and decide Civil Case No. Q-04-53581 with deliberate speed. Costs
against respondents.

SO ORDERED.

PILAR DEVELOPMENT
CORPORATION,
Petitioner,



- versus -



SPS. CESAR VILLAR and
CHARLOTTE VILLAR and JOHN
DOES,
Respondents.
G.R. No. 158840

Present:

PUNO, J., Chairperson,
SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
GARCIA, JJ.

Promulgated:

October 27, 2006
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - x

D E C I S I O N

GARCIA, J .:

An ejectment suit originating from the Metropolitan Trial Court (MeTC) of
Las Pias City, Branch 79, therein docketed as Civil Case No. 5397, was decided
in favor of herein petitioner Pilar Development Corporation (PDC). However, on
appeal, the Regional Trial Court (RTC) of Las Pias City, Branch 253, in its
decision of April 25, 2002, reversed and set aside that of the MeTC and ordered the
dismissal of the case, allegedly for want of jurisdiction thereon on the part of the
MeTC. The RTC held that it is the Housing and Land Use Regulatory Board
(HLURB), not the regular courts, which has jurisdiction over the suit. Directly
elevating the issue to this Court on pure question of law, this petition for review
oncertiorari seeks the reversal of the RTC decision and the reinstatement of that of
the MeTC.

We GRANT.

But first, the undisputed facts as narrated by the RTC:
On December 28, 1994, a Contract to Sell (subject
contract/contract) was executed by and between the [petitioner] and the
[respondents] whereby the former sold to the latter a house and lot
located at Block 4, Lot 15, B.F. Resort Village Subdivision, Las Pias
City with an area of 253 square meters (subject property) for a
consideration of P960,750.00 payable on installment with a
downpayment of P288,255.00 and the balance of P672,525.00 in one
hundred twenty (120) monthly amortizations at P13,446.00 a
month. Parenthetically, the certificate of title over the subject property,
which is Transfer Certificate of Title (TCT) No. T-51834 of the Registry
of Deeds of Las Pias City, was issued in the name of the [petitioner]
only after the execution of the subject contract and the consolidation and
re-subdivision of a number of parcels of land enumerated in the contract.

[Respondents] paid the required downpayment and some monthly
amortizations up to October 1997 after which they defaulted in the
payment of the succeeding monthly amortizations. For this reason, the
[petitioner] cancelled the subject contract thru a Notice of
Cancellation dated August 31, 1997 (sic)
[1]
personally delivered and
received by a certain Corita Villar on September 5, 1998 and by Cathy
Villar, daughter of the [respondents] on September 7, 1998. The
[petitioner], however, did not refund the cash surrender value to the
[respondents].

Despite demands to vacate, the [respondents] still refused to
surrender possession of subject premises to the [petitioner].

In their Answer, the [respondents] primarily assailed the
jurisdiction of the court a quo over the subject matter and the propriety
of the cancellation of the subject contract. Further, the [respondents] put
in issue the identity of the property covered by TCT No. T-518314,
alleging that there was no showing that the residential lot stated therein
subject of the complaint is similar to that provided in the contract.

On January 28, 2000, the court a quo issued an Order requiring
the parties to submit their respective position papers and thereafter, the
case was deemed submitted for decision.

On June 21, 2000, the court a quo rendered the decision subject of
the appeal, the dispositive portion of which is herein quoted as follows:

WHEREFORE, PREMISES CONSIDERED, the
Court renders judgment for the plaintiff [now petitioner
PDC] and against the defendants and John Does [now
respondents], as follows:

1. Ordering defendants spouses, John Does, and all
persons claiming rights under them to vacate the
subject premises and deliver possession thereof to
the plaintiff;

2. Ordering defendants spouses, jointly and severally,
to pay plaintiff the sum of P7,000.00 by way of rental
for their use and occupation of the subject property
from the date of execution of the Contract to sell on
December 28, 1994 and every month thereafter until
the subject property is finally vacated and
possession thereof turned over to the plaintiff;

3. Ordering defendants spouses, jointly and severally,
to pay plaintiff by way of attorneys fees, the amount
of P30,000.00;

4. Ordering defendants spouses to pay the costs of this
case.

SO ORDERED.

On August 12, 2000, the [respondents] filed a Notice of
Appeal xxx. (Bracketed words supplied.)


While the respondents raised four (4) issues in their appeal before the RTC,
the said appellate court deemed it proper to limit its decision in favor of the
respondents on the issue of jurisdiction. Thus, after the denial of its motion for
reconsideration, the petitioner came directly to this Court via this petition for
review on certiorari on the sole legal question of whether it is the HLURB or the
regular courts that has jurisdiction over the subject matter of the case. It is the
petitioners submission that the MeTC correctly assumed jurisdiction over the suit.
In holding that jurisdiction lies on the HLURB and not on the MeTC, the
RTC explained:
[A]s borne out by the facts aforestated, the present controversy is
not a simple unlawful detainer case albeit denominated as such. This
Court takes cognizance of the fact that there are pending issues on the
validity of the cancellation of the subject contract based on the non-
payment of the cash surrender value and the right of the [respondents] to
refund thereof, the determination of which are exclusively lodged with
the Housing and Land Use Regulatory Board (HLURB) under
Presidential Decree Nos. 957 and 1344.
The RTC cited Presidential Decree (P.D.) No. 1344, which defines the
jurisdiction of the HLURB (formerly National Housing Authority), as follows:
Section 1. In the exercise of its functions to regulate the real
estate trade and business and in addition to its powers provided for in
Presidential Decree No. 957, the National Housing Authority shall have
exclusive jurisdiction to hear and decide cases of the following nature:
(a) Unsound real estate business practices;
(b) Claims involving refund and any other claims filed by
subdivision lot or condominium unit buyer against the project owner,
developer, dealer, broker or salesman; and
(c) Cases involving specific performance of contractual and
statutory obligations filed by buyers of subdivision lot or condominium
unit against the owner, developer, dealer, broker or salesman.
The issue of whether an action filed by a subdivision owner against a lot
buyer involving their contract to sell is within the jurisdiction of the HLURB is not
one of first impression. That issue had been previously resolved by this Court
in Roxas vs. Court of Appeals, 439 Phil. 966 (2002), citing earlier cases, to wit:
In our view, the mere relationship between the parties, i.e., that of
being subdivision owner/developer and subdivision lot buyer, does not
automatically vest jurisdiction in the HLURB. For an action to fall
within the exclusive jurisdiction of the HLURB, the decisive element is
the nature of the action as enumerated in Section 1 of P.D. 1344. On this
matter, we have consistently held that the concerned administrative
agency, the National Housing Authority (NHA) before and now
the HLURB, has jurisdiction over complaints aimed at compelling
the subdivision developer to comply with its contractual and
statutory obligations.
Thus, in Arranza vs. B.F. Homes, Inc., we sustained
the HLURBs jurisdiction over petitioners complaint for specific
performance to enforce their rights as purchasers of subdivision lots as
regards rights of way, water, open spaces, road and perimeter wall
repairs, and security. Also, in Que vs. CA,

we noted that:

the complaint against Que is distinct from the
complaint against GDREC and its officers before the
HLURB. The first basically pertains to non-performance
by the buyer of her obligations to Klaver, whereas the
second deals with non-performance by the seller of its own
obligations to the buyer, such that Klaver properly sued
them before different fora.
Accordingly, the second complaint by Klaver against GDREC and its
officers for unsound real estate practices consisting in their unwarranted
delay in the delivery of Unit No. 1902-A to him was properly lodged
with the HLURB. Moreover, in Siasoco vs. Narvaja, we ruled that it is
the HLURB, not the trial court that has jurisdiction over complaints for
specific performance filed against subdivision developers to compel the
latter to execute deeds of absolute sale and to deliver the certificates of
titles to buyers.
But the antecedent circumstances to the present petition are in
stark contrast to those in the cited cases of Arranza and Que. Perusal of
paragraphs (a), (b), and (c) of Sec. 1, P.D. 1344 abovecited,vis--vis the
allegations of the complaint for ejectment filed by Manotok Realty, Inc.
with the MeTC, shows clearly that the HLURB has no jurisdiction over
the complaint. Note particularly pars. (b) and (c) as worded, where
the HLURBs jurisdiction concerns cases commenced by subdivision
lot or condominium unit buyers. As to par. (a), concerning
unsound real estate practices, it would appear that the logical
complainant would be the buyers and customers against the sellers
(subdivision owners and developers or condominium builders and
realtors), and not vice versa. (Emphasis supplied.)

Here, it must be noted that the case was filed by the subdivision owner and
not the buyer of a subdivision lot, and the cause of action is one for recovery of
possession of the property on account of the cancellation of the parties contract to
sell for nonpayment by the respondent spouses of the monthly amortizations
pursuant to the terms and conditions stated in their written contract. The
respondent spouses, as buyers of the subdivision lot in question, had no cause of
action against petitioner PDC as subdivision owner, which may possibly give rise
to or constitute any actionable act under the aforequoted paragraphs (a), (b) and (c)
of Section 1, P.D. No. 1344. No jurisdiction could, therefore, be possibly vested
upon the HLURB.
In fine, the RTC erred in applying to this case the ruling in Francel Realty
Corporation vs. Court of Appeals,
[2]
where therein defendant buyers of the
subdivision lot had previously filed a case against therein plaintiff subdivision
owner for incomplete development of the subdivision, which infraction on the
part of therein plaintiff subdivision owner became the basis of the buyers to
discontinue their payment of the monthly amortization. Reliance on Francel is,
therefore, misplaced considering that the nonpayment by the spouses Villar as
subdivision lot buyers of the monthly amortization was not caused or preceded by
any breach on the part of the herein petitioner as subdivision
owner. Consequently, jurisdiction on the legal issue involving the right of
possession over the subject lot rightfully belongs to the regular courts, in this case
the MeTC of Las Pias City.
The MeTC correctly ruled that petitioner PDC has the right to possess the
subject property upon the effectivity of the cancellation of the contract to sell,
pursuant to the terms and conditions specified therein, insofar as those terms and
conditions are not contrary to the pertinent provisions of Republic Act (R.A.) No.
6552, otherwise known as Realty Installment Buyer Act.
According to R.A. 6552,
[3]
the cash surrender value, which in this case is
equivalent to fifty percent (50%) of the total payment made by the respondent
spouses, should be returned to them by the petitioner upon the cancellation of the
contract to sell on August 31, 1998 for the cancellation to take effect. Admittedly,
no such return was ever made by the petitioner. Thus, the said cash surrender
value is hereby ordered deducted from the award owing to the petitioner based on
the MeTC judgment, and cancellation takes effect by virtue of this judgment.
Finally, as regards the award of P7,000.00/month as rental payment decreed
by the MeTC for the use of the property in question from the time the respondent
spouses obtained possession thereof up to the time that its actual possession is
surrendered or restored to the petitioner, the Court finds the same just and
equitable to prevent the respondent spouses, who breached their contract to sell,
from unjustly enriching themselves at the expense of the petitioner which, for all
legal intents and purposes, never ceased to be the owner of the same property
because of the respondents non-fulfillment of the indispensable condition of full
payment of the purchase price, as embodied in the parties contract to
sell. However, as earlier explained, this sum is to be reduced by the cash surrender
value of the payments so far made by the spouses, and the resulting net amount
still owing as accrued rentals shall be subject to legal interest from finality of this
Decision up to the time of actual payment thereof.
WHEREFORE, the assailed RTC decision dated April 25,
2002 is REVERSED and SET ASIDE and that of the MeTC dated June 26, 2000,
as herein MODIFIED, isREINSTATED.

No pronouncement as to costs.

SO ORDERED.
FRANCEL REALTY G.R. No. 154684
CORPORATION,
Petitioner, Present:

Panganiban, J.,
Chairman,
Sandoval-Gutierrez,
- versus - Corona,
Carpio Morales,* and
Garcia, JJ.

Promulgated:
RICARDO T. SYCIP,
Respondent. September 8, 2005
x -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --- -- -- -- -- x

DECISION

PANGANIBAN, Acting CJ:

n general, lack of jurisdiction over the subject matter may be raised at
any stage of the proceeding, even on appeal. This defense may be
determined from the factual allegations of the complaint, regardless
of the answer or even before the answer is filed.
__________________
* On official business.
I

The Case

Before us is a Petition for Review on Certiorari
[1]
under Rule 45 of
the Rules of Court, assailing the February 2, 2001 Decision
[2]
and August
14, 2002 Resolution
[3]
of the Court of Appeals in CA-GR CV No.
55127. The CA disposed as follows:

It is not disputed that [petitioner] filed an illegal detainer case
against [respondent] docketed as Civil Case No. 1310 before the
Municipal Trial Court [MTC] of Bacoor, Cavite, which was
accordingly dismissed by the MTC (See answer, p. 28,
record). The filing of the instant case is another blatant attempt by
[petitioner] to circumvent the law. For it is well-settled that where a
complaint arises from the failure of a buyer [of real property] on
installment basis to pay based on a right to stop monthly
amortizations under Presidential Decree No. 957, as in the case at
bench, the determinative question is exclusively cognizable by the
Housing and Land Use Regulatory Board (HLURB) (Francel Realty
Corp. v. Court of Appeals, 252 SCRA 127 [1996]).

WHEREFORE, premises considered, the decision appealed
from is hereby AFFIRMED in toto.
[4]



The assailed Resolution denied petitioners Motion for
Reconsideration.

The Facts

The CA narrated the facts as follows:

x x x [I]n November, 1989, [petitioner] and [respondent]
entered into a contract to sell a house and lot covered by TCT No. T-
281788. Upon execution of the contract to sell, [respondent] made a
down payment of P119,700.00, which was considered as monthly
rentals at the rate of P2,686.00 per month. On March 16, 1990, the
townhouse subject of the contract to sell was transferred in the name
of [respondent] as evidenced by TCT No. T-281788. Despite the
transfer of the title in the name of [respondent], the latter refused to
pay the balance of P250,000.00. By applying the down payment
of P119,700.00 to defendants monthly rental starting from
December 1989, said amount has been reduced to nothing. Despite
several demands made by [petitioner] to [respondent], including the
demand dated December 12, 1991 made by [petitioners] counsel,
the [respondent] refused to reconvey the subject property to
[petitioner]. The [petitioner] suffered actual damages in the form of
repairs amounting to not less than P100,000.00 as well as moral and
exemplary damages, attorneys fees and litigation expenses. x x x.

The [respondent] filed a motion to dismiss on the ground of
lack of jurisdiction but the court below denied the motion stating that
the ground relied upon by [respondent did not appear to be]
indubitable.

Denying the material allegations of the complaint, the
[respondent] again invoked the courts lack of jurisdiction over the
subject matter of the case. Further, there is a pending case between
the same parties and involving the same townhouse before the
Housing and Land Use Regulatory Board for unsound real estate
business practices. Likewise, the [respondent] justified his refusal to
pay the amortizations alleging that the [petitioner] sold and delivered
to him a defective townhouse unit under Sec. 3 of Presidential
Decree No. [957].

After trial, the court below dismissed the case for lack of
jurisdiction.
[5]


Ruling of the Court of Appeals

Agreeing with the trial court, the CA held that the case involved not
just reconveyance and damages, but also a determination of the rights and
obligations of the parties to a sale of real estate under PD 957; hence, the
case fell exclusively under the jurisdiction of the HLURB. The appellate
court observed that respondent and other buyers of the townhouses had
notified petitioner of their intention to stop paying amortizations because
of defective structures and materials used in the construction; they had in
fact filed other cases, also before the HLURB, against petitioner for
unsound real estate business practice.

Noting that petitioners illegal detainer case against respondent had
been dismissed by the MTC, the appellate court concluded that the filing of
the instant case was another blatant attempt to circumvent the law.
Hence this Petition.
[6]


Issues

In its Memorandum, petitioner raises the following issues:

A. Whether or not the lower court can dismiss, after full blown
trial, Civil Case No. BCV-94-2 of the RTC, Imus, Cavite, on the
ground of lack of jurisdiction.

B. Whether or not the lower court can dismiss this case in
spite of the indisputable fact that respondent never secured HLURB
authority or clearance to stop payment of monthly rentals.
[7]



The Courts Ruling

The Petition lacks merit.


First Issue:
Dismissal for Lack of Jurisdiction



Before going into the jurisdictional question, we must at the outset
point out that, contrary to petitioners assignment of errors, the trial courts
Decision is not the proper subject of this Rule 45 Petition. Rather, it is the
Decision of the CA that is up for review by this Court. This mistake in
stating the issues could have been fatal to petitioners case, had it not
correctly restated them in its arguments and discussion.
[8]
That said, we
now proceed to the main issues.

Petitioner argues that the CAs affirmation of the trial courts
dismissal of its case was erroneous, considering that a full-blown trial had
already been conducted. In effect, it contends that lack of jurisdiction
could no longer be used as a ground for dismissal after trial had ensued and
ended.

The above argument is anchored on estoppel by laches, which has
been used quite successfully in a number of cases to thwart dismissals
based on lack of jurisdiction. Tijam v. Sibonghanoy,
[9]
in which this doctrine
was espoused, held that a party may be barred from questioning a courts
jurisdiction after being invoked to secure affirmative relief against its
opponent. In fine, laches prevents the issue of lack of jurisdiction from
being raised for the first time on appeal by a litigant whose purpose is to
annul everything done in a trial in which it has actively participated.
[10]


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 a presumption that the
party entitled to assert it either has abandoned it or declined to assert it.
[11]


The ruling in Sibonghanoy on the matter of jurisdiction is, however,
the exception rather than the rule.
[12]
Estoppel by laches may be invoked to
bar the issue of lack of jurisdiction only in cases in which the factual milieu
is analogous to that in the cited case. In such controversies, laches should
be clearly present; that is, lack of jurisdiction must have been raised so
belatedly as to warrant the presumption that the party entitled to assert it
had abandoned or declined to assert it.
[13]
ThatSibonghanoy applies only to
exceptional circumstances is clarified in Calimlim v. Ramirez,
[14]
which we
quote:

A rule that had been settled by unquestioned acceptance and
upheld in decisions so numerous to cite is that the jurisdiction of a
court over the subject-matter of the action is a matter of law and
may not be conferred by consent or agreement of the parties. The
lack of jurisdiction of a court may be raised at any stage of the
proceedings, even on appeal. This doctrine has been qualified by
recent pronouncements which stemmed principally from the ruling in
the cited case of Sibonghanoy. It is to be regretted, however, that
the holding in said case had been applied to situations which were
obviously not contemplated therein. The exceptional circumstance
involved in Sibonghanoy which justified the departure from the
accepted concept of non-waivability of objection to jurisdiction has
been ignored and, instead a blanket doctrine had been repeatedly
upheld that rendered the supposed ruling in Sibonghanoy not as the
exception, but rather the general rule, virtually overthrowing
altogether the time-honored principle that the issue of jurisdiction is
not lost by waiver or by estoppel.
[15]



Indeed, the general rule remains: a courts lack of jurisdiction may be
raised at any stage of the proceedings, even on appeal.
[16]
The reason is
that jurisdiction is conferred by law, and lack of it affects the very authority
of the court to take cognizance of and to render judgment on the
action.
[17]
Moreover, jurisdiction is determined by the averments of the
complaint, not by the defenses contained in the answer.
[18]


From the very beginning, the present respondent has been challenging
the jurisdiction of the trial court and asserting that the HLURB is the entity
that has proper jurisdiction over the case. Consonant with Section 1 of
Rule 16 of the Rules of Court, he had raised the issue of lack of jurisdiction
in his Motion to Dismiss. Even when the Motion was denied, he
continuously invoked lack of jurisdiction in his Answer with affirmative
defenses, his subsequent pleadings, and verbally during the trial. This
consistent and continuing objection to the trial courts jurisdiction defeats
petitioners contention that raising other grounds in a Motion to Dismiss is
considered a submission to the jurisdiction of the court.
[19]

We stress that Rule 9 of the Rules of Court requires that all defenses
and objections -- except lack of jurisdiction over the subject matter, litis
pendentia, bar by prior judgment and/or prescription -- must be pleaded in a
motion to dismiss or in an answer; otherwise, they are deemed
waived.
[20]
As to the excepted grounds, the court may dismiss a claim or a
case at any time when it appears from the pleadings or the evidence on
record that any of those grounds exists.

In the present case, the trial court at first denied the Motion to
Dismiss filed by respondent, because the grounds he had relied upon did
not appear to be indubitable. The ruling was made under the pre-1997
Rules of Civil Procedure, which then provided that the court, after
hearing x x x may deny or grant the motion or allow amendment of
pleading, or may defer the hearing and determination of the motion until
the trial if the ground alleged therein does not appear to be
indubitable.
[21]
Moreover, the factual allegations of the Complaint
[22]
that
petitioner filed below for reconveyance and damages sufficiently
conformed to thejurisdictional requisites for the exercise of the MTCs
authority. Thus, in accord with the procedures then prescribed, the court
conducted trial to allow all arguments and evidence to surface.

Significantly, petitioner has previously sued respondents brother
and co-complainant before the HLURB over the same subdivision
project. In Francel Realty v. Court of Appeals and Francisco
Sycip,
[23]
petitioners Complaint for unlawful detainer was premised on the
failure of respondents brother to pay monthly amortizations on the basis
of his right to stop paying them under PD 957. In that case, the Court had
ruled that the issue involved a determinative question x x x exclusively
cognizable by the HLURB; that is, a determination of the rights and
obligations of parties in a sale of real estate under P.D. 957.
[24]


Because an earlier Complaint had been filed by Sycip before the
HLURB against Francel Realty Corporation for unsound real estate
business practices, the Court dismissed petitioners cause of action. The
reason for the dismissal was that the Complaint should instead be filed as
a counterclaim in [the] HLURB [case] in accordance with Rule 6, Section 6
of the Rules of Court x x x.
[25]
For the same reason, this Court has ruled
that a suit to collect on a promissory note issued by a subdivision lot buyer
involves the sales of lots in commercial subdivisions; and that
jurisdiction over such case lies with the HLURB, not with the courts.
[26]


Further, the rules governing counterclaims
[27]
and the prohibition on
the splitting of causes of action (grounded on the policy against a
multiplicity of suits)
[28]
should effectively bar the Complaint for
reconveyance and damages filed by petitioner. Its Complaint came at the
heels of its unlawful detainer suit that had previously been dismissed by the
MTC of Imus, Cavite, and of the litigation filed by respondent against
Francel Realty before the HLURB. Petitioner avers that the present
controversy is not cognizable by the HLURB, because it was filed by the
developer rather than by the buyer, as provided under PD No.
1344.
[29]
Such pretension flies in the face of the ruling of the Court
in Francel Realty Corp. v. Court of Appeals and Francisco Sycip,
[30]
which we
quote:

x x x. In the case of Estate Developers and Investors Corporation v.
Antonio Sarte and Erlinda Sarte the developer filed a complaint to collect the
balance of the price of a lot bought on installment basis, but its complaint was
dismissed by the Regional Trial Court for lack of jurisdiction. It appealed the
order to this Court. In dismissing the appeal, we held:

The action here is not a simple action to collect on a
promissory note; it is a complaint to collect amortization payments
arising from or in connection with a sale of a subdivision lot under
P.D. Nos. 957 and 1344, and accordingly falls within the exclusive
original jurisdiction of the HLURB to regulate the real estate trade
and industry, and to hear and decide cases of unsound real estate
business practices. Although the case involving Antonio Sarte is
still pending resolution before the HLURB Arbiter, and there is as
yet no order from the HLURB authorizing suspension of
payments on account of the failure of plaintiff developer to make
good its warranties, there is no question to Our mind that the
matter of collecting amortizations for the sale of the subdivision lot
is necessarily tied up to the complaint against the plaintiff and it
affects the rights and correlative duties of the buyer of a
subdivision lot as regulated by NHA pursuant to P.D. 957 as
amended. It must accordingly fall within the exclusive original
jurisdiction of the said Board, and We find that the motion to
dismiss was properly granted on the ground that the regular court
has no jurisdiction to take cognizance of the complaint.
[31]


Petitioners strategy, if allowed, would open a convenient gateway
for a developer to subvert and preempt the rights of buyers by the mere
expediency of filing an action against them before the regular courts, as in
this case. Fortunately, the CA saw through the ruse. Contrary to
petitioners contention, the HLURB is not deprived of jurisdiction to hear
and decide a case merely on the basis that it has been initiated by the
developer and not by the buyer.

Petitioner cites Ayala Corporation v. Ray Burton Development
Corporation
[32]
and Fajardo Jr. v. Freedom to Build, Inc.,
[33]
which do not further
its cause either. These cases pertain to deed restrictions and restrictive
covenants in the sale of subdivision units; hence, they do not fall under any
of the cases over which the HLURB exercises exclusive
jurisdiction. Naturally, there was every reason for the courts in the said
cases to assume and exercise their jurisdiction.

Second Issue:
Authority to Stop Payment
of Monthly Rentals

The next proposition relates to the absence of a clearance from the
HLRUB authorizing respondent to stop payment of his amortizations. It
is petitioners position that under Section 23 of Rule VI of the Rules
implementing PD 957, clearance must first be secured from the Board
before the buyer of a subdivision lot or a home can lawfully withhold
monthly payments.

This contention is also unmeritorious.

First, Section 23 of PD 957 -- the law upon which the Implementing
Rule cited was based -- requires only due notice to the owner or developer
for stopping further payments by reason of the latters failure to develop
the subdivision according to the approved plans and within the time limit.
Section 23 provides as follows:

SECTION 23. Non-Forfeiture of Payments. No
installment payment made by a buyer in a subdivision or
condominium project for the lot or unit he contracted to buy shall be
forfeited in favor of the owner or developer when the buyer, after due
notice to the owner or developer, desists from further payment due to
the failure of the owner or developer to develop the subdivision or
condominium project according to the approved plans and within the
time limit for complying with the same. Such buyer may, at his option,
be reimbursed the total amount paid including amortization interests
but excluding [delinquency] interests, with interest thereon at the legal
rate. (Italics supplied)



To be valid, an administrative rule or regulation must conform, not
contradict, the provisions of the enabling law.
[34]
An implementing rule or
regulation cannot modify, expand, or subtract from the law it is intended
to implement. Any rule that is not consistent with the statute itself is null
and void.
[35]
Thus, the Court in People v. Maceren
[36]
explained as follows:

Administrative regulations adopted under legislative authority
by a particular department must be in harmony with the provisions of
the law, and should be for the sole purpose of carrying into effect its
general provisions. By such regulations, of course, the law itself
cannot be extended. x x x.

The rule making power must be confined to details for
regulating the mode or proceeding to carry into effect the law as it
has been enacted. The power cannot be extended to amending or
expanding the statutory requirements or to embrace matters not
covered by the statute. Rules that subvert the statute cannot be
sanctioned. x x x.



Plainly, therefore, Section 23 of Rule VI of the Implementing Rules
cannot rise higher than Section 23 of PD 957, which is the source of its
authority. For that matter, PD 957 would have expressly required the
written approval of the HLURB before any stoppage of amortization
payments if it so intended, in the same manner that the decree specifically
mandates written consent or approval by the NHA (now the HLURB) in
Section 18.
[37]


Section 18 has been held by the Court to be a prohibitory law; hence,
acts committed contrary to it are void,
[38]
pursuant to the intent of PD
957 to provide a protective mantle over helpless citizens who may fall
prey to the razzmatazz of what P.D. 957 termed unscrupulous subdivision
and condominium sellers.
[39]
The Court stressed that such construal
ensures the attainment of the purpose of the law: to protect lot buyers, so
that they do not end up still homeless despite having fully paid for their
home lots with their hard-earned cash.
[40]


Apropos, to require clearance from the HLURB before stopping
payment would not be in keeping with the intent of the law to protect
innocent buyers of lots or homes from scheming subdivision
developers. To give full effect to such intent, it would be fitting to treat
the right to stop payment to be immediately effective upon giving due
notice to the owner or developer or upon filing a complaint before the
HLRUB against the erring developer. Such course of action would be
without prejudice to the subsequent determination of its propriety and
consequences, should the suspension of payment subsequently be found
improper.

Significantly also, the Court has upheld the reliance of a buyer on
Section 23 of PD 957 when he ordered his bank to stop payment of the
checks he had issued, so that he could suspend amortization payments until
such time as the owner or developer would have fulfilled its
obligations.
[41]
In Antipolo Realty Corporation v. National Housing
Authority,
[42]
the exercise of a statutory right to suspend installment
payments was considered a valid defense against the purported violations
of Batas Pambansa (BP) Blg. 22 by the petitioner in that case. Such right
negated the third element the subsequent dishonor of the check without
valid cause. With more reason, then, should the buyers right to suspend
installment payments be considered a valid defense against the suit for
reconveyance and damages.

WHEREFORE, this Petition is hereby DENIED and the assailed
Decision and Resolution are AFFIRMED. Costs against petitioner.


SO ORDERED.