JURISPRUDENCE FOR AND AGAINST THE TRANSFER OF A COMMERCIAL CASE WRONGLY DOCKETED IN

AN ORDINARY TRIAL COURT TO A SPECIAL COMMERCIAL COURT

Laws and Issuances Supporting the Creation of Special Commercial Courts:

1. Batas Pambansa Blg. 129, Section 23:

Section 23. Special jurisdiction to try special cases. – The Supreme Court may designate certain branches
of the Regional Trial Courts to handle exclusively criminal cases, juvenile and domestic relations cases,
agrarian cases, urban land reform cases which do not fall under the jurisdiction of quasi-judicial bodies
and agencies, and/or such other special cases as the Supreme Court may determine in the interest of a
speedy and efficient administration of justice.

2. A.M. N0. 03-03-03-SC [JULY 01, 2003] RE: CONSOLIDATION OF INTELLECTUAL PROPERTY
COURTS WITH COMMERCIAL COURTS amended by subsequent issuances to include:
a. Cyber crimes
b. Cases governed by FRIA
c. Liquidation cases from administrative proceedings
d. Dissolution and liquidation of partnerships under the NCC

Note: There are only 70 Special Commercial Courts as of August 28, 2014:

 Branch 15, Laoag City under Judge TURGANO, BENJAMIN D. as per AM 00-11-03-SC / 11-21-00

Jurisprudence SUPPORTING the Transfer of Case to Special Commercial Court:

1. Gonzales vs. GJH Land, Inc., G.R. No. 202664, Nov. 20, 2015

Facts:

The case was mistakenly raffled to Branch 276, a regular branch of the Muntinlupa RTC. Acting on
respondents’ motion, Branch 276 dismissed the case for lack of jurisdiction because it was an
intracorporate dispute that should have been assigned to the designated Special Commercial Court
(Branch 256) of Muntinlupa.

Issue:

The issue before the Supreme Court (SC) was whether or not the case must be dismissed for lack of
jurisdiction by Branch 276 of the RTC of Muntinlupa.

Held:

The SC said regional trial courts are courts of general jurisdiction because “[a]ll cases, the jurisdiction
over which is not specifically provided for by law to be within the jurisdiction of any other court, fall
under the jurisdiction of the regional trial court.”
The SC said jurisdiction over intracorporate disputes belongs to regional trial courts in general and not to
particular branches of said courts. In the words of the SC, “one must be disabused of the notion that the
transfer of jurisdiction was made only in favor of particular RTC branches, and not to the RTCs in
general.”

Guidelines

This case is of paramount importance. It resolves with finality the long standing debate on whether it is
the RTC in general or the particular branch designated as special commercial court that was given
jurisdiction over intracorporate cases.

The ruling also applies to other commercial cases, such as for rehabilitation, liquidation in insolvency
and intellectual property cases, that may have been filed with or raffled to the wrong court.

For the guidance of the bench and the bar, this case provided guidelines not only for intracorporate
disputes but also for other commercial cases as follows:

If a commercial case filed before the proper RTC is wrongly raffled to its regular branch, the proper
courses of action are as follows:

1.1 If the RTC has only one branch designated as a Special Commercial Court, then the case shall be
referred to the Executive Judge for re-docketing as a commercial case, and thereafter, assigned to the
sole special branch;

1.2 If the RTC has multiple branches designated as Special Commercial Courts, then the case shall be
referred to the Executive Judge for re-docketing as a commercial case, and thereafter, raffled off among
those special branches; and

1.3 If the RTC has no internal branch designated as a Special Commercial Court, then the case shall be
referred to the nearest RTC with a designated Special Commercial Court branch within the judicial
region. Upon referral, the RTC to which the case was referred to should re-docket the case as a
commercial case, and then:

(a) If the said RTC has only one branch designated as a Special Commercial Court, assign the case to the
sole special branch; or

(b) if the said RTC has multiple branches designated as Special Commercial Courts, raffle off the case
among those special branches.

If an ordinary civil case filed before the proper RTC is wrongly raffled to its branch designated as a
Special Commercial Court, then the case shall be referred to the Executive Judge for re-docketing as an
ordinary civil case. Thereafter, it shall be raffled off to all courts of the same RTC (including its
designated special branches which, by statute, are equally capable of exercising general jurisdiction
same as regular branches), as provided for under existing rules.
All transfer/raffle of cases is subject to the payment of the appropriate docket fees in case of any
difference. On the other hand, all docket fees already paid shall be duly credited, and any excess,
refunded.

Finally, to avert any future confusion, all initiatory pleadings must state the action’s nature both in its
caption and body. Otherwise, the initiatory pleading may, upon motion or by order of the court motu
proprio (on its own), be dismissed without prejudice to its re-filing after due rectification. This last
procedural rule is prospective in application.

Laws, Issuances and Jurisprudence AGAINST the Transfer of Case to Special Commercial Court:

1. CALLEJA vs PANDAY G.R. No. 168696 February 28, 2006: RTC cannot remand the case to a co-
equal court; it may only dismiss the action on the ground of lack of jurisdiction.

“Such being the case, RTC-Br. 58 did not have the requisite authority or power to order the
transfer of the case to another branch of the Regional Trial Court. The only action that RTC-Br. 58 could
take on the matter was to dismiss the petition for lack of jurisdiction. In HLC Construction and
Development Corp. v. Emily Homes Subdivision Homeowners’ Association, the Court held that the trial
court, having no jurisdiction over the subject matter of the complaint, should dismiss the same so the
issues therein could be expeditiously heard and resolved by the tribunal which was clothed with
jurisdiction.”

2. Home Guaranty Builders vs. R-II Builders & NHA (2011)

Petition for review under R45
 19 March 1993, a Joint Venture Agreement (JVA) was entered into between respondents NHA and R-II
Builders for the implementation of the Smokey Mountain Development and Reclamation Project (SMDRP)
which was amended and restated after 11 months.
 11 August 1994, JVA was aimed at implementing a 2-phase conversion of the Smokey Mountain Dumpsite
“into a habitable housing project inclusive of the reclamation of the area across Radial Road 10 (R-10)”.
o R-II Builders, as developer, was entitled to own 79 hectares of reclaimed land and the 2.3 hectare
commercial area at the Smokey Mountain.
o NHA, as landowner/implementing agency, was entitled to own the 2,992 temporary housing
units agreed to be built in the premises, the cleared and fenced incinerator site consisting of 5
hectares, 3,520 units of permanent housing to be awarded to qualified on site residents, the
industrial area consisting of 3.2 hectares and the open spaces, roads and facilities within the
Smokey Mountain Area.
 26 September 1994, NHA and R-II Builders, alongside petitioner Housing Guaranty Corporation (HGC)
as guarantor and the PNB as trustee, entered into an Asset Pool Formation Trust Agreement which
provided the mechanics for the implementation of the project. To back the project, an Asset Pool was
created.
 The parties also executed a Contract of Guaranty whereby HGC, upon the call made by PNB and
conditions therein specified, undertook to redeem the regular Smokey Mountain Project Participation
Certificates (SMPPC) upon maturity and to pay the simple interest thereon to the extent of 8.5% per
annum. The foregoing agreements led to the securitization of the project through the issuance of 5,216
 SMPPCs upon the Asset Pool, with a par value of 1M each, classified and to be redeemed by the trustee
or, in case of call on its guaranty, by HGC.
 29 January 2001, subsequent to R-II Builders' infusion of P300M into the project, the issuance of the
SMPPCs and the termination of PNB’s services, NHA, R-II Builders and HGC agreed on the institution of
Planters Development Bank (PDB) as trustee.
 24 October 2002, all the Regular SMPPCs issued had reached maturity and, unredeemed, already
amounted to an aggregate face value of P2.513 Billion. The lack of liquid assets with which to effect
redemption of the regular SMPPCs prompted PDB to make a call on HGC’s guaranty and to execute in the
latter’s favor a Deed of Assignment and Conveyance (DAC) of the entire Asset Pool.

Procedure:
RTC Manila Branch 24, acting as Special Commercial Court (SCC)
1. R-II Builders filed the complaint against HGC and NHA contending that HGC’s failure to redeem the
outstanding regular SMPPCs despite obtaining possession of the Asset Pool ballooned the stipulated
interests and materially prejudiced its stake on the residual values of the Asset Pool. Deed of Assignment
and Conveyance (DAC) should be rescinded since PDB exceeded its authority in executing the same prior
to HGC’s redemption and payment of the guaranteed SMPPC… Assessed docket fees corresponding to an
action incapable of pecuniary estimation, the complaint sought the grant of the following reliefs:
(a) TRO/preliminary and permanent injunction, enjoining disposition/s of the properties in
the Asset Pool;
(b) the resolution or, in the alternative, the nullification of the DAC;
(c) R-II Builders' appointment as trustee pursuant to Rule 98 of the Rules of Court;
(d) HGC’s rendition of an accounting of the assets and the conveyance thereof in favor of R-II
Builders; (e) P500k in attorney’s fees.
2. RTC issued the writ of preliminary injunction sought by R-II Builders.
3. In the meantime, HGC, having filed its answer to the complaint, went on before the SC to move for the
conduct of a preliminary hearing on its affirmative defenses which included such grounds as lack of
jurisdiction, improper venue and the then pendency entitled Francisco Chavez vs. National Housing
Authority, et al., a case which challenged, among other matters, the validity of the JVA and its subsequent
amendments.
4. R-II Builders filed a motion to admit its Amended and Supplemental Complaint which deleted the prayer
for resolution of the DAC initially prayed for in its original complaint.
5. Manila RTC Branch 24 issued a clarificatory order holding that R-II Builders’ complaint was an ordinary civil
action and not an intra-corporate controversy and that it did not have the authority to hear the case.
6. Case was re-raffled to respondent Manila RTC Branch 22.

RTC Manila Br. 22

1. Issued the 19 May 2008 order which, having determined that the case is a real action, admitted the
aforesaid Amended and Supplemental Complaint, subject to R-II Builders’ payment of the “correct and
appropriate” docket fees.
2. But instead of paying docket fees, R-II Builders filed a motion to admit its Second Amended Complaint, on
the ground that its previous Amended and Supplemental Complaint had not yet been admitted in view of
the non-payment of the correct docket fees therefor. Said Second Amended Complaint notably
resurrected R-II Builders’ cause of action for resolution of the DAC, deleted its causes of action for
accounting and conveyance of title to and/or possession of the entire Asset Pool, reduced the claim for
attorney’s fees to P500k, sought its appointment as Receiver pursuant to Rule 59 of the Rules of
Court and, after an inventory in said capacity, prayed for approval of the liquidation and distribution of
the Asset Pool in accordance with the parties’ agreements.
3. HGC filed its opposition to the admission of R-II Builders’ Second Amended Complaint on the ground that
respondent RTC had no jurisdiction to act on the case until payment of the correct docket fees and that
 said pleading was intended for delay and introduced a new theory inconsistent with the original
complaint and the Amended and Supplemental Complaint. Claiming that R-II Builders had defied
respondent court’s 19 May 2008 order by refusing to pay the correct docket fees, HGC moved for the
dismissal of the case.
4. R-II Builders also filed an Urgent Ex-Parte Motion for Annotation of Lis Pendens on the titles of the
properties in the Asset Pool, on the ground that HGC had sold and/or was intending to dispose of portions
thereof, in violation of the writ of preliminary injunction issued in the premises.
5. Respondent RTC issued its first assailed order dated 3 March 2009 which: (a) denied HGC’s MTD; (b)
granted R-II Builders’ motion to admit its Second Amended Complaint; and, (c) noted R-II Builders’ Urgent
Ex-Parte Motion for Annotation of Lis Pendens, to which the attention of the Manila Register of Deeds was
additionally called.
6. Undaunted, HGC filed its MFR of the foregoing order, arguing that: (a) the case is real action and the
docket fees paid by R-II Builders were grossly insufficient because the estimated value of properties in
the Asset Pool exceeds P5B; (b) a complaint cannot be amended to confer jurisdiction when the court had
none; (c) the RTC should have simply denied the Urgent Ex-Parte Motion for Annotation of Lis
Pendens instead of rendering an advisory opinion thereon.
7. R-II Builders opposed the foregoing motion and on the theory that the Asset Pool was still in danger of
dissipation, filed an urgent motion to resolve its application for the appointment of a receiver and
submitted its nominees for said position.
8. Respondent RTC issued its second assailed order which (a) denied HGC’s motion for reconsideration; (b)
granted R-II Builders’ application for appointment of receiver and, for said purpose: [i] appointed Atty.
Danilo Concepcion as Receiver and, [ii] directed R-II Builders to post a bond in the sum of P10M.

CA Former Special Fifteenth Division

1. HGC filed Rule 65 petition for certiorari and prohibition imputing grave abuse of discretion against the
RTC for not dismissing the case and for granting R-II Builders’ application for receivership.
2. Petition denied and HGC’s MFR was denied for lack of merit. Hence, this petition.

Issues
1. WON RTC a quo had jurisdiction to proceed with the case. (NO jurisdiction)
A court acquires jurisdiction over a case only upon the payment of the prescribed filing and docket fees. R-II
Builders’ original complaint was initially docketed before RTC Manila Br. 24, a designated Special Commercial
Court. With HGC’s filing of a motion for a preliminary hearing on the affirmative defenses asserted in its answer
and R-II Builders’ filing of its Amended and Supplemental Complaint, said court issued an order ordering the re-
raffle of the case upon the finding that the same is not an intra-corporate dispute. With its acknowledged lack of
jurisdiction over the case, RTC Manila Br. 24 should have ordered the dismissal of the complaint, since a court
without subject matter jurisdiction cannot transfer the case to another court.

At the time of its surrender of jurisdiction, Br. 24 had already acted on the case and had in fact issued the writ of
preliminary injunction sought by herein respondent R-II Builders. At that point, there was absolutely no reason
which could justify a re-raffle of the case considering that the order that was supposed to have caused the re-raffle
was not an inhibition of the judge but a declaration of absence of jurisdiction. A re-raffle which causes a transfer of
the case involves courts with the same subject matter jurisdiction; it cannot involve courts which have different
jurisdictions exclusive of the other. More apt in this case, a re-raffle of a case cannot cure a jurisdictional
defect.

The jurisdictionally flawed transfer of the case from Branch 24, the SCC to Branch 22, the regular court, is topped
by another jurisdictional defect which is the non-payment of the correct docket fees. Granted that R-II Builders is
not claiming ownership of the Asset Pool because its continuing stake is, in the first place, limited only to the
residual value thereof, the conveyance and/or transfer of possession of the same properties sought in the original
complaint and Amended and Supplemental Complaint both presuppose a real action for which appropriate docket
fees computed on the basis of the assessed or estimated value of said properties should have been assessed and
paid.

For failure of R-II Builders to pay the correct docket fees for its original complaint or, for that matter, its Amended
and Supplemental Complaint as directed in respondent RTC's 19 May 2008 order, it stands to reason that
jurisdiction over the case had yet to properly attach.

CA decision REVERSED and SET ASIDE. RTC Branch 22’s & 24’s Orders are NULLIFIED. The complaint of R-
II Builders first before Br. 24 and thereafter before Br. 22 both of the RTC Manila is DISMISSED.

3. RA 9165, ARTICLE XI, Section 90. Jurisdiction. – The Supreme Court shall designate special
courts from among the existing Regional Trial Courts in each judicial region to exclusively try and
hear cases involving violations of this Act. The number of courts designated in each judicial
region shall be based on the population and the number of cases pending in their respective
jurisdiction.
4. A.M. No. 16-07-06-SC July 19, 2016: Ordering 240 Other Regional Trial Courts to Hear, Try and
Decide Newly-Filed Cases Under the Comprehensive Dangerous Drugs Act of 2002, As
Amended. Consequently, at present there are already 715 RTCs authorized to hear and decide
drug cases.

Note: There are now 955 new drug courts covering essentially all RTCs

CONCLUSION:

Despite recent jurisprudence ruling that the action of the court is to dismiss a case erroneously docketed
in an ordinary court, the prevailing guidelines were determined in the Gonzales Case which warrants the
referral of such case to the designated commercial courts. With the proliferation of drug cases and the
mass designation of RTCs as drug courts, this ruling may not bear special effects as compared to
Commercial Courts which only make up a small fraction of the total number of RTCs. The prevailing
jurisprudence is explicit in including intracorporate disputes as well as commercial cases as the
particular cases subject to the latest guidelines.