(Sante v. Claravall, G.R. No. 173915, [February 22, 2010], 627 PHIL Civil Case No.
Civil Case No. 5794-R for damages is ordered
141-151)
|||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, respondent's 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 attorney's 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. EIDaAH
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.
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 of
P300,000.00, 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
plaintiff's 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 attorney's fees are
merely incidental to the main cause and should not be included
in the computation of the total claim. EASCDH
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 attorney's 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. aDSHCc
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:
xxx xxx xxx
(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).
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 from
P100,000.00 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 MTCC's
jurisdictional amount has been adjusted to P300,000.00.
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
attorney's fees, etc., be used?
In this regard, Administrative Circular No. 09-94 19 is
instructive: AICDSa
xxx xxx xxx
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 attorney's 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 plaintiff's causes of action. 20 It is clear,
based on the allegations of the complaint, that respondent's
main action is for damages. Hence, the other forms of damages
being claimed by respondent, e.g., exemplary damages,
attorney's 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 respondent's claim of P929,000.06 in damages and
P25,000 attorney's 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.
 xxx xxx xxx

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

SO ORDERED.

|||
 (Sebastian v. Lagmay-Ng, G.R. No. 164594, [April 22, 2015], 759
PHIL 54-68)
Sometime in 1997, Angelita Lagmay (Angelita), acting
as representative and attorney-in-fact of her daughter Annabel
Lagmay Ng (Annabel), filed a complaint before
the Barangay Justice of Siclong, Laur, Nueva Ecija. She sought to
collect from Michael the sum of P350,000.00 that Annabel sent
to Michael. She claimed that Annabel and Michael were once
sweethearts, and that they agreed to jointly invest their financial
resources to buy a truck. She alleged that while Annabel was
working in Hongkong, Annabel sent Michael the amount of
P350,000.00 to purchase the truck. However, after Annabel and
Michael's relationship has ended, Michael allegedly refused to
return the money to Annabel, prompting the latter to bring the
matter before the Barangay Justice.
On July 9, 1997, the parties entered into an amicable
settlement, evidenced by a document denominated as
"kasunduan" 4 wherein Michael agreed to pay Annabel the
amount of P250,000.00 on specific dates. The kasunduan was
signed by Angelita (on behalf of Annabel), Michael, and the
members of the pangkat ng tagapagkasundo.
The kasunduan reads:
KASUNDUAN
Nagkasundo ang dalawang panig
na pagkayari ng labing apat na buwan (14
months) simula ngayong July 9, 1997
hanggang September 1998 ay kailangan ng
maibigay ni Mr. Sebastian ang pera ni Ms.
Anabelle Lagmay.
At napagkasunduan ay dalawang
hulog ang halagang P250,000.00 na pera ni
Ms. Lagmay at simula ng pagbibigay ni
Mr. Sebastian ay sa buwan ng September
1998.
At upang may katunayan ang lahat
ng napag usapan ay lumagda sa ibaba nito at
sa harap ng mga saksi ngayong ika-9 ng
Hulyo, 1997.
Mrs. Angelita Lagmay — (Lagda)
Mr. Michael Sebastian — (Lagda)
Saksi: Kagawad Rolando Mendizabal — (Lagda)
Hepe Quirino Sapon — (Lagda)
Benjamin Sebastian — (Lagda)
Jun Roxas — (Lagda)
Angelita alleged that the kasunduan was not
repudiated within a period of ten (10) days from the settlement,
in accordance with the Katarungang Pambarangay Law
embodied in the Local Government Code of 1991 [Republic Act
(R.A.) No. 7160], and Section 14 of its Implementing Rules. When
Michael failed to honor the kasunduan, Angelita brought the
matter back to the Barangay, but the Barangay Captain failed to
enforce the kasunduan, and instead, issued a Certification to File
Action.
After about one and a half years from the date of the
execution of the kasunduan or on January 15, 1999, Angelita
filed with the Municipal Circuit Trial Court (MCTC) of Laur and
Gabaldon, Nueva Ecija, a Motion for Execution of the kasunduan.
Michael moved for the dismissal of the Motion for
Execution, citing as a ground Angelita's alleged violation of
Section 15, Rule 13 of the 1997 Rules of Civil Procedure.
On January 17, 2000, the MCTC rendered a
decision 5 in favor of Annabel, the dispositive portion of which
reads, as follows:
WHEREFORE, the plaintiff through
counsel has satisfactorily proven by
preponderance of evidence based on
Exhibits "A," "B," "C," "D," and "F," that
defendant has obligation to the plaintiff in
the amount of P250,000.00.
IN VIEW OF THE FOREGOING, the
Motion for Execution filed by the plaintiff is
hereby granted based on Sec. 2, Rule 7 of the
Implementing Rules and Regulations of
Republic Act No. 7160, and therefore,
defendant is hereby ordered within 15 days
upon receipt of this decision to pay the
plaintiff the amount of P250,000.00 as
evidenced by the Kasunduan (Exhibit "C")
with legal interests from July 9, 1997 until
said obligation is fully paid, and to pay
attorney's fees for the plaintiff's counsel in
the amount of P15,000.00 and to pay the
cost of the suit.
SO ORDERED.
Michael filed an appeal with the RTC arguing that the
MCTC committed grave abuse of discretion in prematurely
deciding the case. Michael also pointed out that a hearing was
necessary for the petitioner to establish the genuineness and
due execution of the kasunduan.
The Regional Trial Court's Ruling
In its November 13, 2000 Decision, 6 the RTC, Branch
40 of Palayan City upheld the MCTC decision, finding Michael
liable to pay Annabel the sum of P250,000.00. It held that
Michael failed to assail the validity of the kasunduan, or to
adduce any evidence to dispute Annabel's claims or the
applicability of the Implementing Rules and Regulations of R.A.
No. 7160. The dispositive portion of the decision reads:
WHEREFORE, the assailed Decision
and Order of the lower court is hereby
MODIFIED in that the appellant is ordered to
pay the appellee the amount of Two
Hundred Fifty Thousand pesos (P250,000.00)
plus twelve percent interest (12%) per
annum from September, 1998 up to the time
it is actually paid and fifty Thousand Pesos
(P50,000.00) representing attorney's fees.
Michael filed a Motion for Reconsideration arguing
that: (i) an amicable settlement or arbitration award can be
enforced by the Lupon within six (6) months from date of
settlement or after the lapse of six (6) months, by ordinary civil
action in the appropriate City or Municipal Trial Court and not by
a mere Motion for execution; and (ii) the MCTC does not have
jurisdiction over the case since the amount of P250,000.00 (as
the subject matter of the kasunduan) is in excess of MCTC's
jurisdictional amount of P200,000.00. 7
In its March 13, 2001 Order, the RTC granted Michael's
Motion for Reconsideration, and ruled that there is merit in the
jurisdictional issue he raised. It dismissed Angelita's Motion for
Execution, and set aside the MCTC Decision. The dispositive
portion of the said Order reads:
WHEREFORE, the Motion for
Reconsideration is GRANTED. The Decision
of the Court dated November 13, 2000 is
hereby SET ASIDE. The Decision of the
Municipal Trial Court of Laur, Nueva Ecija
dated January 17, 2000 is likewise SET ASIDE
and the Motion for Execution
of Kasunduan is DISMISSED, the said court
having had no jurisdiction to hear and decide
the matter. 8
Angelita moved for the reconsideration of the March
13, 2001 Order, but the motion was subsequently denied.
Aggrieved, she filed a Petition for Review 9 with the CA.
The Court of Appeal's Ruling
On August 2, 2001, the CA initially dismissed the
petition for review on a mere technical ground of failure to
attach the Affidavit of Service. Angelita moved for
reconsideration, attaching in her motion the Affidavit of Service.
The CA granted the motion.
On March 31, 2004, the CA rendered its decision
granting the petition, and reversing the RTC's decision. The CA
declared that the "appropriate local trial court" stated in Section
2, Rule VII of theImplementing Rules of R.A. No. 7160 refers to
the municipal trial courts. Thus, contrary to Michael's
contention, the MCTC has jurisdiction to enforce any settlement
or arbitration award, regardless of the amount involved.
The CA also ruled that Michael's failure to repudiate
the kasunduan in accordance with the procedure prescribed
under the Implementing Rules of R.A. No. 7160, rendered
the kasunduan final. Hence, Michael can no longer assail
the kasunduan on the ground of forgery.
Michael moved to reconsider this decision, but the CA
denied his motion in its resolution dated July 15, 2004. Hence,
this petition.
The Petition
In the present petition for review on certiorari,
Michael alleges that the kasunduan cannot be given the force
and effect of a final judgment because it did not conform to the
provisions of the Katarungang Pambarangay law embodied in
Book III, Title One, Chapter 7 of R.A. No. 7160. He points out the
following irregularities in the kasunduan's execution, and claims
that the agreement forged between him and Angelita was
fictitious and simulated:
(1) there was no record of the complaint in
the Barangay;
(2) there was no notice of mediation sent to him;
(3) there was no constitution of the Pangkat Ng
Tagapagkasundo;
(4) the parties were never called upon to choose the
three (3) members from among
the Lupon members;
(5) he had no participation in the execution of
the kasunduan;
(6) his signature in the kasunduan was forged;
(7) he did not personally appear before the Barangay;
(8) there was no attestation clause;
(9) the kasunduan was neither reported nor filed
before the MCTC; and
(10) Annabel, the real party in interest, did not
personally appear before the Barangay as
required by the law.
Michael additionally claims that the kasunduan is
merely in the nature of a private document. He also reiterates
that since the amount of P250,000.00 — the subject matter of
the kasunduan — is in excess of MCTC's jurisdictional amount of
P200,000.00, the kasunduan is beyond the MCTC's jurisdiction
to hear and to resolve. Accordingly, the proceedings in
the Barangay are all nullity.
The Issues
The issues to be resolved in the present petition are:
1. Whether or not the MCTC has the authority and
jurisdiction to execute
the kasunduan regardless of the amount
involved;
2. Whether or not the kasunduan could be given the
force and effect of a final judgment; and
3. Whether or not the kasunduan can be enforced.
The Court's Ruling
We deny the petition.
A perusal of the body of the motion for
execution shows that it is actually in the
nature of an action for execution; hence, it
was a proper remedy;
We note at the outset that Michael raised — in his brief
before the CA — the issue of wrong remedy. He alleged that
Angelita's recourse should have been to file a civil action, not a
mere motion for execution, in a regular court. However, the CA
failed to address this issue and only ruled on the issues of
the kasunduan's irregularities and the MCTC's jurisdiction.
A simple reading of Section 417 of the Local
Government Code readily discloses the two-tiered mode of
enforcement of an amicable settlement. The provision reads:
Section 417. Execution. — The
amicable settlement or arbitration award
may be enforced by execution by
the lupon within six (6) months from the
date of the settlement. After the lapse of
such time, the settlement may be
enforced by action in the appropriate city or
municipal court. [Emphasis ours.]
Under this provision, an amicable settlement or
arbitration award that is not repudiated within a period of ten
(10) days from the settlement may be enforced by: first,
execution by the Lupon within six (6) months from the date of
the settlement; or second, by an action in the appropriate city or
municipal trial court if more than six (6) months from the date of
settlement has already elapsed.
Under the first mode of enforcement, the execution of
an amicable settlement could be done on mere motion of the
party entitled thereto before the Punong Barangay. 10 The
proceedings in this case are summary in nature and are governed
by the Local Government Code and the Katarungang
Pambarangay Implementing Rules and Regulations.
The second mode of enforcement, on the other hand,
is judicial in nature and could only be resorted to through the
institution of an action in a regular form before the proper
City/Municipal Trial Court. 11 The proceedings shall be governed
by the provisions of the Rules of Court.
Indisputably, Angelita chose to enforce
the kasunduan under the second mode and filed a motion for
execution, which was docketed as Special Proceedings No. 45-
99. The question for our resolution is:Whether the MCTC,
through Angelita's motion for execution, is expressly authorized
to enforce the kasunduan under Section 417 of the Local
Government Code?
The Court rules in the affirmative.
It is undisputed that what Angelita filed before the
MCTC was captioned "motion for execution," rather than a
petition/complaint for execution.
A perusal of the motion for execution, however, shows
that it contains the material requirements of an initiatory action.
First, the motion is sufficient in form 12 and
substance. 13 It is complete with allegations of the ultimate facts
constituting the cause of action; the names and residences of the
plaintiff and the defendant; it contains the prayer for the MCTC
to order the execution of the kasunduan; and there was also a
verification and certification against forum shopping.
Furthermore, attached to the motion are: 1) the
authenticated special power of attorney of Annabel, authorizing
Angelita to file the present action on her behalf; and 2) the copy
of the kasunduan whose contents were quoted in the body of
the motion for execution.
It is well-settled that what are controlling in
determining the nature of the pleading are the allegations in the
body and not the caption. 14
Thus, the motion for execution that Angelita filed was
intended to be an initiatory pleading or an original action that
is compliant with the requirement under Section 3, Rule 6 of
the Rules of Court that the complaint should allege the
plaintiff's cause of action and the names and residences of the
plaintiff and the defendant.
Angelita's motion could therefore be treated as an
original action, and not merely as a motion/special proceeding.
For this reason, Annabel has filed the proper remedy prescribed
under Section 417 of the Local Government Code.
However, Angelita should pay the proper docket fees
corresponding to the filing of an action for execution. The docket
fees shall be computed by the Clerk of Court of the MCTC, with
due consideration, of course, of what Angelita had already paid
when her motion for execution was docketed as a special
proceeding.
The kasunduan has the force and effect of a final judgment.
Under Section 416 of the Local Government Code, the
amicable settlement and arbitration award shall have the force
and effect of a final judgment of a court upon the expiration of
ten (10) days from the date of its execution, unless the
settlement or award has been repudiated or a petition to nullify
the award has been filed before the proper city or municipal
court.
Moreover, Section 14, Rule VI of the Katarungang
Pambarangay Implementing Rules states that the party's failure
to repudiate the settlement within the period of ten (10) days
shall be deemed a waiver of the right to challenge the settlement
on the ground that his/her consent was vitiated by fraud,
violence or intimidation.
In the present case, the records reveal that Michael
never repudiated the kasunduan within the period prescribed by
the law. Hence, the CA correctly ruled that the kasunduan has
the force and effect of a final judgment that is ripe for execution.
Furthermore, the irregularities in the kasunduan's
execution, and the claim of forgery are deemed waived since
Michael never raised these defenses in accordance with the
procedure prescribed under the Local Government Code. Thus,
we see no reason to discuss these issues in the present case.
The MCTC has the authority and jurisdiction
to enforce the kasunduan regardless of the amount involved.
The Court also finds that the CA correctly upheld the
MCTC's jurisdiction to enforce any settlement or arbitration
award issued by the Lupon.
We again draw attention to the provision of Section
417 of the Local Government Code that after the lapse of the six
(6) month period from the date of the settlement, the
agreement may be enforced by action in the appropriate city or
municipal court.
The law, as written, unequivocally speaks of the
"appropriate city or municipal court" as the forum for the
execution of the settlement or arbitration award issued by
the Lupon. Notably, in expressly conferring authority over these
courts, Section 417 made no distinction with respect to the
amount involved or the nature of the issue involved. Thus, there
can be no question that the law's intendment was to grant
jurisdiction over the enforcement of settlement/arbitration
awards to the city or municipal courts regardless of the amount.
A basic principle of interpretation is that words must be given
their literal meaning and applied without attempted
interpretation where the words of a statute are clear, plain and
free from ambiguity. 15
WHEREFORE, premises considered, we
hereby DENY the petitioner's petition for review on certiorari,
and AFFIRM the March 31, 2004 Decision of the Court of Appeals
in CA-G.R. SP No. 65450.
Angelita Lagmay is ORDERED to pay the proper docket
fees to be computed by the Clerk of Court of the Municipal
Circuit Trial Court of Laur and Gabaldon, Nueva Ecija, with due
consideration of what she had paid when her motion for
execution was docketed as a special proceeding.
SO ORDERED.
||| (Barrido v. Nonato, G.R. No. 176492, [October 20, 2014], 745
PHIL 608-617)
In the course of the marriage of respondent
Leonardo V. Nonato and petitioner Marietta N. Barrido, they were
able to acquire a property situated in Eroreco, Bacolod City, consisting
of a house and lot, covered by Transfer Certificate of Title (TCT) No. T-
140361. On March 15, 1996, their marriage was declared void on the
ground of psychological incapacity. Since there was no more reason
to maintain their co-ownership over the
property, Nonato asked Barrido for partition, but the latter refused.
Thus, on January 29, 2003, Nonato filed a Complaint for partition
before the Municipal Trial Court in Cities (MTCC) of Bacolod City,
Branch 3.
Barrido claimed, by way of affirmative defense, that the
subject property had already been sold to their children, Joseph
Raymund and Joseph Leo. She likewise moved for the dismissal of the
complaint because the MTCC lacked jurisdiction, the partition case
being an action incapable of pecuniary estimation.
The Bacolod MTCC rendered a Decision dated September
17, 2003, applying Article 129 of the Family Code. It ruled in this
wise: EISCaD
WHEREFORE, PREMISES
CONSIDERED, judgment is hereby rendered,
ordering the conjugal property of the former
Spouses Leonardo and Marietta Nonato, a
house and lot covered by TCT No. T-140361
located at Eroreco, Bacolod City, which was
their conjugal dwelling, adjudicated to the
defendant Marietta Nonato, the spouse with
whom the majority of the common children
choose to remain.
Furthermore, defendant's
counterclaim is hereby granted, ordering
plaintiff to pay defendant P10,000.00 as moral
damages for the mental anguish and
unnecessary inconvenience brought about by
this suit; and an additional P10,000.00 as
exemplary damages to deter others from
following suit; and attorney's fees of P2,000.00
and litigation expenses of P575.00.
SO ORDERED. 4
Nonato appealed the MTCC Decision before the RTC. On
July 21, 2004, the Bacolod RTC reversed the ruling of the MTCC. It
found that even though the MTCC aptly applied Article 129 of
the Family Code, it nevertheless made a reversible error in
adjudicating the subject property to Barrido. Its dispositive portion
reads: EHACcT
WHEREFORE, premises considered,
the decision dated September 17, 2003 is
hereby REVERSED and SET ASIDE and a new
judgment is hereby rendered ordering the
parties:
(1) to equitably partition the house
and lot covered by TCT No. T-140361;
(2) to reimburse Joseph Raymund
and Joseph Leo Nonato of the amount
advanced by them in payment of the debts and
obligation of TCT No. T-140361 with Philippine
National Bank;
(3) to deliver the presumptive
legitimes of Joseph Raymund and Joseph
Leo Nonato pursuant to Article 51 of the Family
Code.
SO ORDERED. 5
Upon appeal, the CA affirmed the RTC Decision on
November 16, 2006. It held that since the property's assessed value
was only P8,080.00, it clearly fell within the MTCC's jurisdiction. Also,
although the RTC erred in relying on Article 129 of the Family Code,
instead of Article 147, the dispositive portion of its decision still
correctly ordered the equitable partition of the property. Barrido filed
a Motion for Reconsideration, which was, however, denied for lack of
merit.
Hence, Barrido brought the case to the Court via a Petition
for Review. She assigned the following errors in the CA Decision:
I.
THE HONORABLE COURT OF APPEALS
ERRED IN HOLDING THAT THE MTCC HAD
JURISDICTION TO TRY THE PRESENT CASE.
II.
THE HONORABLE COURT OF APPEALS
ERRED IN HOLDING THAT THE LOT COVERED BY
TCT NO. T-140361 IS CONJUGAL AFTER BEING
SOLD TO THE CHILDREN, JOSEPH
LEO NONATO AND JOSEPH
RAYMUND NONATO.
III.
THE HONORABLE COURT OF APPEALS
ERRED IN HOLDING THAT ARTICLE 129 OF THE
FAMILY CODE HAS NO APPLICATION IN THE
PRESENT CASE, ON THE ASSUMPTION THAT
THE TRIAL COURT HAD JURISDICTION OVER
THE CASE. 6
The petition lacks merit. EHaCTA
Contrary to Barrido's contention, the MTCC has jurisdiction
to take cognizance of real actions or those affecting title to real
property, or for the recovery of possession, or for the partition or
condemnation of, or foreclosure of a mortgage on real
property. 7 Section 33 of Batas Pambansa Bilang 129 8 provides:
Section 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:
xxx xxx xxx
(3) Exclusive original
jurisdiction in all civil actions which
involve title to, or possession of, real
property, or any interest therein
where the assessed value of the
property or interest therein does not
exceed Twenty thousand pesos
(P20,000.00) or, in civil actions in
Metro Manila, where such assessed
 value does not exceed Fifty thousand
pesos (P50,000.00) exclusive of
interest, damages of whatever kind,
attorney's fees, litigation expenses
and costs: Provided, That value of
such property shall be determined by
the assessed value of the adjacent
lots. (as amended by R.A. No. 7691) 9
Here, the subject property's assessed value was merely
P8,080.00, an amount which certainly does not exceed the required
limit of P20,000.00 for civil actions outside Metro Manila to fall within
the jurisdiction of the MTCC. Therefore, the lower court correctly took
cognizance of the instant case.
The records reveal that Nonato and Barrido's marriage had
been declared void for psychological incapacity under Article 36 10 of
the Family Code. During their marriage, however, the conjugal
partnership regime governed their property relations. Although
Article 129 11 provides for the procedure in case of dissolution of the
conjugal partnership regime, Article 147 specifically covers he effects
of void marriages on the spouses' property relations. Article 147
reads:
Art. 147. When a man and a woman
who are capacitated to marry each other, live
exclusively with each other as husband and
wife without the benefit of marriage or under a
void marriage, their wages and salaries shall be
owned by them in equal shares and the
property acquired by both of them through
their work or industry shall be governed by the
rules on co-ownership. aSITDC
In the absence of proof to the
contrary, properties acquired while they lived
together shall be presumed to have been
obtained by their joint efforts, work or
industry, and shall be owned by them in equal
shares. For purposes of this Article, a party who
did not participate in the acquisition by the
other party of any property shall be deemed to
have contributed jointly in the acquisition
thereof if the former's efforts consisted in the
care and maintenance of the family and of the
household.
Neither party can encumber or
dispose by acts inter vivos of his or her share in
the property acquired during cohabitation and
owned in common, without the consent of the
other, until after the termination of their
cohabitation.
When only one of the parties to a
void marriage is in good faith, the share of the
party in bad faith in the co-ownership shall be
forfeited in favor of their common children. In
case of default of or waiver by any or all of the
common children or their descendants, each
vacant share shall belong to the respective
surviving descendants. In the absence of
descendants, such share shall belong to the
innocent party. In all cases, the forfeiture shall
take place upon termination of the
cohabitation.
This particular kind of co-ownership applies when a man
and a woman, suffering no illegal impediment to marry each other,
exclusively live together as husband and wife under a void marriage
or without the benefit of marriage. 12 It is clear, therefore, that for
Article 147 to operate, the man and the woman: (1) must be
capacitated to marry each other; (2) live exclusively with each other
as husband and wife; and (3) their union is without the benefit of
marriage or their marriage is void. Here, all these elements are
present. 13 The term "capacitated" in the first paragraph of the
provision pertains to the legal capacity of a party to contract
marriage. 14 Any impediment to marry has not been shown to have
existed on the part of either Nonato or Barrido. They lived exclusively
with each other as husband and wife. However, their marriage was
found to be void under Article 36 of the Family Code on the ground of
psychological incapacity. 15
Under this property regime, property acquired by both
spouses through their work and industry shall be governed by the
rules on equal co-ownership. Any property acquired during the union
is prima facie presumed to have been obtained through their joint
efforts. A party who did not participate in the acquisition of the
property shall be considered as having contributed to the same jointly
if said party's efforts consisted in the care and maintenance of the
family household. 16 Efforts in the care and maintenance of the
family and household are regarded as contributions to the acquisition
of common property by one who has no salary or income or work or
industry. 17
In the analogous case of Valdez, 18 it was likewise averred
that the trial court failed to apply the correct law that should govern
the disposition of a family dwelling in a situation where a marriage is
declared void ab initio because of psychological incapacity on the part
of either or both parties in the contract of marriage. The Court held
that the court a quo did not commit a reversible error in utilizing
Article 147 of the Family Code and in ruling that the former spouses
own the family home and all their common property in equal shares,
as well as in concluding that, in the liquidation and partition of the
property that they owned in common, the provisions on co-
ownership under the Civil Code should aptly prevail. 19 The rules
which are set up to govern the liquidation of either the absolute
community or the conjugal partnership of gains, the property regimes
recognized for valid and voidable marriages, are irrelevant to the
liquidation of the co-ownership that exists between common-law
spouses or spouses of void marriages. 20
Here, the former spouses both agree that they acquired the
subject property during the subsistence of their marriage. Thus, it
shall be presumed to have been obtained by their joint efforts, work
or industry, and shall be jointly owned by them in equal
shares. Barrido, however, claims that the ownership over the
property in question is already vested on their children, by virtue of a
Deed of Sale. But aside from the title to the property still being
registered in the names of the former spouses, said document of sale
does not bear a notarization of a notary public. It must be noted that
without the notarial seal, a document remains to be private and
cannot be converted into a public document, 21 making it
inadmissible in evidence unless properly
authenticated. 22 Unfortunately, Barrido failed to prove its due
execution and authenticity. In fact, she merely annexed said Deed of
Sale to her position paper. Therefore, the subject property remains to
be owned in common by Nonato and Barrido, which should be
divided in accordance with the rules on co-ownership. TSHIDa
WHEREFORE, premises considered, the petition is DENIED.
The Decision of the Court of Appeals, dated November 16, 2006, as
well as its Resolution dated January 24, 2007 in CA-G.R. SP No. 00235,
are hereby AFFIRMED.
||| (Barangay San Roque v. Heirs of Pastor, G.R. No. 138896, [June
20, 2000], 389 PHIL 466-474)
SYNOPSIS
This Petition for Review on Certiorari questioned the March
29, 1999 order of the Regional Trial Court (RTC) of Cebu City
dismissing a complaint for eminent domain. According to the RTC, an
action for eminent domain affected title to real property and since
the value of the subject property was less than P20,000.00, the action
should have been filed before the Municipal Trial Court.
The subject of an expropriation suit is the government's
exercise of eminent domain, a matter that is incapable of pecuniary
estimation. Accordingly, it falls within the jurisdiction of the regional
trial courts, regardless of the value of the subject property.
SYLLABUS
1. REMEDIAL LAW; JURISDICTION OF COURTS; CIVIL
ACTIONS; SUBJECT INCAPABLE OF PECUNIARY ESTIMATION. — The
test to determine whether a suit is incapable of pecuniary estimation
was laid down by the Court in this wise: "A review of the jurisprudence
of this Court indicates that in determining whether an action is one
the subject matter of which is not capable of pecuniary estimation,
this Court has adopted the criterion of first ascertaining the nature of
the principal action or remedy sought. If it is primarily for the recovery
of a sum of money, the claim is considered capable of pecuniary
estimation, and whether jurisdiction is in the municipal courts or in
the courts of first instance would depend on the amount of the claim.
However, where the basic issue is something other than the right to
recover a sum of money, or where the money claim is purely
incidental to, or a consequence of, the principal relief sought, like in
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. The rationale of the rule is plainly that the second
class cases, besides the determination of damages, demand an
inquiry into other factors which the law has deemed to be more
within the competence of courts of first instance, which were the
lowest courts of record at the time that the first organic laws of the
Judiciary were enacted allocating jurisdiction (Act 136 of the
Philippine Commission of June 11, 1901)."
2. ID.; ID.; ID.; ID.; EXPROPRIATION. — In the present case,
an expropriation suit does not involve the recovery of a sum of
money. Rather, it deals with the exercise by the government of its
authority and right to take private property for public use. In National
Power Corporation v. Jocson, the Court ruled that expropriation
proceedings have two phases: "The first is concerned with the
determination of the authority of the plaintiff to exercise the power
of eminent domain and the propriety of its exercise in the context of
the facts involved in the suit. It ends with an order, if not of dismissal
of the action, 'of condemnation declaring that the plaintiff has a
lawful right to take the property sought to be condemned, for the
public use or purpose described in the complaint, upon the payment
of just compensation to be determined as of the date of the filing of
the complaint.' An order of dismissal, if this be ordained, would be a
final one, of course, since it finally disposes of the action and leaves
nothing more to be done by the Court on the merits. So, too, would
an order of condemnation be a final one, for thereafter as the Rules
expressly state, in the proceedings before the Trial Court, 'no
objection to the exercise of the right of condemnation (or the
propriety thereof) shall be filed or heard.' "The second phase of the
eminent domain action is concerned with the determination by the
court of 'the just compensation for the property sought to be taken.'
This is done by the Court with the assistance of not more than three
(3) commissioners. The order fixing the just compensation on the
basis of the evidence before, and findings of, the commissioners
would be final, too. It would finally dispose of the second stage of the
suit, and leave nothing more to be done by the Court regarding the
issue. . . ."' It should be stressed that the primary consideration in an
expropriation suit is whether the government or any of its
instrumentalities has complied with the requisites for the taking of
private property. Hence, the courts determine the authority of the
government entity, the necessity of the expropriation, and the
observance of due process. In the main, the subject of an
expropriation suit is the government's exercise of eminent domain, a
matter that is incapable of pecuniary estimation. True, the value of
the property to be expropriated is estimated in monetary terms, for
the court is duty-bound to determine the just compensation for it.
This, however, is merely incidental to the expropriation suit. Indeed,
that amount is determined only after the court is satisfied with the
propriety of the expropriation. aHTcDA
DECISION
PANGANIBAN, J p:
An expropriation suit is incapable of pecuniary estimation.
Accordingly, it falls within the jurisdiction of the regional trial courts,
regardless of the value of the subject property.
The Case
Before us is a Petition for Review on Certiorari assailing the
March 29, 1999 Order 1 of the Regional Trial Court (RTC) of Cebu City
(Branch 58) in Civil Case No. CEB-21978, in which it dismissed a
Complaint for eminent domain. It ruled as follows: prcd
"Premises considered, the motion to
dismiss is hereby granted on the ground that
this Court has no jurisdiction over the case.
Accordingly, the Orders dated February 19,
1999 and February 26, 1999, as well as the Writ
of Possession issued by virtue of the latter
Order are hereby recalled for being without
force and effect." 2
Petitioner also challenges the May 14, 1999 Order of the
RTC denying reconsideration.
The Facts
Petitioner filed before the Municipal Trial Court (MTC) of
Talisay, Cebu (Branch 1) 3 a Complaint to expropriate a property of
the respondents. In an Order dated April 8, 1997, the MTC dismissed
the Complaint on the ground of lack of jurisdiction. It reasoned that
"[e]minent domain is an exercise of the power to take private
property for public use after payment of just compensation. In an
action for eminent domain, therefore, the principal cause of action is
the exercise of such power or right. The fact that the action also
involves real property is merely incidental. An action for eminent
domain is therefore within the exclusive original jurisdiction of the
Regional Trial Court and not with this Court." 4
Assailed RTC Ruling
The RTC also dismissed the Complaint when filed before it,
holding that an action for eminent domain affected title to real
property; hence, the value of the property to be expropriated would
determine whether the case should be filed before the MTC or the
RTC. Concluding that the action should have been filed before the
MTC since the value of the subject property was less than P20,000,
the RTC ratiocinated in this wise:
"The instant action is for eminent
domain. It appears from the current Tax
declaration of the land involved that its
assessed value is only One Thousand Seven
Hundred Forty Pesos (P1,740.00). Pursuant to
Section 3, paragraph (3), of Republic Act No.
7691, all civil actions involving title to, or
possession of, real property with an assessed
value of less than P20,000.00 are within the
exclusive original jurisdiction of the Municipal
Trial Courts. In the case at bar, it is within the
exclusive original jurisdiction of the Municipal
Trial Court of Talisay, Cebu, where the property
involved is located.
"The instant action for eminent
domain or condemnation of real property is a
real action affecting title to or possession of
real property, hence, it is the assessed value of
the property involved which determines the
jurisdiction of the court. That the right of
eminent domain or condemnation of real
property is included in a real action affecting
title to or possession of real property, is
pronounced by retired Justice Jose Y. Feria,
thus, 'Real actions are those affecting title to or
possession of real property. These include
partition or condemnation of, or foreclosures
of mortgage on, real property. . . . '" 5
Aggrieved, petitioner appealed directly to this Court, raising
a pure question of law. 6 In a Resolution dated July 28, 1999, the
Court denied the Petition for Review "for being posted out of time on
July 2, 1999, the due date being June 2, 1999, as the motion for
extension of time to file petition was denied in the resolution of July
14, 1999." 7 In a subsequent Resolution dated October 6, 1999, the
Court reinstated the Petition. 8
Issue
In its Memorandum, petitioner submits this sole issue for
the consideration of this Court:
"Which court, MTC or RTC, has
jurisdiction over cases for eminent domain or
expropriation where the assessed value of the
subject property is below Twenty Thousand
(P20,000.00) Pesos?" 9
This Court's Ruling
The Petition is meritorious.
Main Issue:
Jurisdiction over an Expropriation Suit
In support of its appeal, petitioner cites Section 19 (1) of BP
129, which provides that RTCs shall exercise exclusive original
jurisdiction over "all civil actions in which the subject of the litigation
is incapable of pecuniary estimation; . . . ." It argues that the present
action involves the exercise of the right to eminent domain, and that
such right is incapable of pecuniary estimation.
Respondents, on the other hand, contend that the
Complaint for Eminent Domain affects the title to or possession of
real property. Thus, they argue that the case should have been
brought before the MTC, pursuant to BP 129 as amended by Section
3 (3) of RA 7691. This law provides that MTCs shall have exclusive
original jurisdiction over all civil actions that involve title to or
possession of real property, the assessed value of which does not
exceed twenty thousand pesos or, in civil actions in Metro Manila,
fifty thousand pesos exclusive of interest, damages of whatever kind,
attorney's fees, litigation expenses and costs.
We agree with the petitioner that an expropriation suit is
incapable of pecuniary estimation. The test to determine whether it
is so was laid down by the Court in this wise:
"A review of the jurisprudence of this
Court indicates that in determining whether an
action is one the subject matter of which is not
capable of pecuniary estimation, this Court has
adopted the criterion of first ascertaining the
nature of the principal action or remedy
sought. If it is primarily for the recovery of a
sum of money, the claim is considered capable
of pecuniary estimation, and whether
jurisdiction is in the municipal courts or in the
courts of first instance would depend on the
amount of the claim. However, where the basic
issue is something other than the right to
recover a sum of money, or where the money
claim is purely incidental to, or a consequence
of, the principal relief sought, like in 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. The
rationale of the rule is plainly that the second
class cases, besides the determination of
damages, demand an inquiry into other factors
which the law has deemed to be more within
the competence of courts of first instance,
which were the lowest courts of record at the
time that the first organic laws of the Judiciary
were enacted allocating jurisdiction (Act 136 of
the Philippine Commission of June 11,
1901)." 10
In the present case, an expropriation suit does not involve
the recovery of a sum of money. Rather, it deals with the exercise by
the government of its authority and right to take private property for
public use. 11 In National Power Corporation v. Jocson, 12 the Court
ruled that expropriation proceedings have two phases:
"'The first is concerned with the
determination of the authority of the plaintiff
to exercise the power of eminent domain and
the propriety of its exercise in the context of
 the facts involved in the suit. It ends with an Their reliance is misplaced. Justice Feria sought merely to
order, if not of dismissal of the action, 'of distinguish between real and personal actions. His discussion on this
condemnation declaring that the plaintiff has a point pertained to the nature of actions, not to the jurisdiction of
lawful right to take the property sought to be courts. In fact, in his pre-bar lectures, he emphasizes that jurisdiction
condemned, for the public use or purpose over eminent domain cases is still within the RTCs under the 1997
described in the complaint, upon the payment Rules.
of just compensation to be determined as of
the date of the filing of the complaint.' An order To emphasize, the question in the present suit is whether
of dismissal, if this be ordained, would be a final the government may expropriate private property under the given set
one, of course, since it finally disposes of the of circumstances. The government does not dispute respondents' title
action and leaves nothing more to be done by to or possession of the same. Indeed, it is not a question of who has
the Court on the merits. So, too, would an a better title or right, for the government does not even claim that it
order of condemnation be a final one, for has a title to the property. It merely asserts its inherent sovereign
thereafter as the Rules expressly state, in the power to "appropriate and control individual property for the public
proceedings before the Trial Court, 'no benefit, as the public necessity, convenience or welfare may
objection to the exercise of the right of demand." 17 cdasia
condemnation (or the propriety thereof) shall WHEREFORE, the Petition is hereby GRANTED and the
be filed or heard.' assailed Orders SET ASIDE. The Regional Trial Court is directed to
"The second phase of the eminent HEAR the case. No costs.
domain action is concerned with the
determination by the court of 'the just
compensation for the property sought to be
taken.' This is done by the Court with the
assistance of not more than three (3)
commissioners. The order fixing the just
compensation on the basis of the evidence
before, and findings of, the commissioners
would be final, too. It would finally dispose of
the second stage of the suit, and leave nothing
more to be done by the Court regarding the
issue. . . .'"

It should be stressed that the primary consideration in an

expropriation suit is whether the government or any of its
instrumentalities has complied with the requisites for the taking of
private property. Hence, the courts determine the authority of the
government entity, the necessity of the expropriation, and the
observance of due process. 13 In the main, the subject of an
expropriation suit is the government's exercise of eminent domain, a
matter that is incapable of pecuniary estimation.

True, the value of the property to be expropriated is

estimated in monetary terms, for the court is duty-bound to
determine the just compensation for it. This, however, is merely
incidental to the expropriation suit. Indeed, that amount is
determined only after the court is satisfied with the propriety of the
expropriation.

Verily, the Court held in Republic of the Philippines v.

Zurbano that "condemnation proceedings are within the jurisdiction
of Courts of First Instance," 14 the forerunners of the regional trial
courts. The said case was decided during the effectivity of the
Judiciary Act of 1948 which, like BP 129 in respect to RTCs, provided
that courts of first instance had original jurisdiction over "all civil
actions in which the subject of the litigation is not capable of
pecuniary estimation." 15 The 1997 amendments to the Rules of
Court were not intended to change these jurisprudential
precedents. cdphil

We are not persuaded by respondents' argument that the

present action involves the title to or possession of a parcel of land.
They cite the observation of retired Justice Jose Y. Feria, an eminent
authority in remedial law, that condemnation or expropriation
proceedings are examples of real actions that affect the title to or
possession of a parcel of land. 16
||| (Gonzales v. GJH Land, Inc., G.R. No. 202664, [November 10,
2015], 772 PHIL 483-556)
On August 4, 2011, petitioners Manuel Luis
C. Gonzales 4 and Francis Martin D. Gonzales (petitioners) filed a
Complaint 5 for "Injunction with prayer for Issuance of Status
Quo Order, Three (3) and Twenty (20)-Day Temporary
Restraining Orders, and Writ of Preliminary Injunction with
Damages" against respondents GJH Land, Inc. (formerly known
as S.J. Land, Inc.),Chang Hwan Jang, Sang Rak Kim, Mariechu N.
Yap, and Atty. Roberto P. Mallari II 6 (respondents) before the
RTC of Muntinlupa City seeking to enjoin the sale of S.J. Land,
Inc.'s shares which they purportedly bought from S.J. Global, Inc.
on February 1, 2010. Essentially, petitioners alleged that the
subscriptions for the said shares were already paid by them in
full in the books of S.J. Land, Inc.,7 but were nonetheless offered
for sale on July 29, 2011 to the corporation's
stockholders, 8 hence, their plea for injunction.
The case was docketed as Civil Case No. 11-077 and
raffled to Branch 276, which is not a Special Commercial
Court.On August 9, 2011, said branch issued a temporary
restraining order, 9 and later, in an Order 10 dated August 24,
2011, granted the application for a writ of preliminary injunction.
After filing their respective answers 11 to the
complaint, respondents filed a motion to dismiss 12 on the
ground of lack of jurisdiction over the subject matter,pointing
out that the case involves an intra-corporate dispute and
should, thus, be heard by the designated Special Commercial
Court of Muntinlupa City. 13 EATCcI
The RTC Ruling
In an Order 14 dated April 17, 2012, Branch 276
granted the motion to dismiss filed by respondents. It found that
the case involves an intra-corporate dispute that is within the
original and exclusive jurisdiction of the RTCs designated as
Special Commercial Courts. It pointed out that the RTC of
Muntinlupa City, Branch 256 (Branch 256) was specifically
designated by the Court as the Special Commercial Court, hence,
Branch 276 had no jurisdiction over the case and cannot lawfully
exercise jurisdiction on the matter, including the issuance of a
Writ of Preliminary Injunction. 15 Accordingly, it dismissed the
case.
Dissatisfied, petitioners filed a motion for
reconsideration, 16 arguing that they filed the case with the
Office of the Clerk of Court of the RTC of Muntinlupa City which
assigned the same to Branch 276 by raffle.17 As the raffle was
beyond their control, they should not be made to suffer the
consequences of the wrong assignment of the case, especially
after paying the filing fees in the amount of P235,825.00 that
would be for naught if the dismissal is upheld. 18 They further
maintained that the RTC has jurisdiction over intra-corporate
disputes under Republic Act No. (RA) 8799, 19 but since the
Court selected specific branches to hear and decide such suits,
the case must, at most, be transferred or raffled off to the proper
branch. 20
In an Order 21 dated July 9, 2012, Branch 276 denied
the motion for reconsideration, holding that it has no authority
or power to order the transfer of the case to the proper Special
Commercial Court, citing Calleja v. Panday 22 (Calleja);hence,
the present petition.
The Issue Before the Court
The essential issue for the Court's resolution is
whether or not Branch 276 of the RTC of Muntinlupa City erred
in dismissing the case for lack of jurisdiction over the subject
matter.
The Court's Ruling
The petition is meritorious.
At the outset, the Court finds Branch 276 to have
correctly categorized Civil Case No. 11-077 as a commercial case,
more particularly, an intra-corporate dispute, 23 considering
that it relates to petitioners' averred rights over the shares of
stock offered for sale to other stockholders, having paid the
same in full. Applying the relationship test and the nature of the
controversy test, the suit between the parties is clearly rooted in
the existence of an intra-corporate relationship and pertains to
the enforcement of their correlative rights and obligations under
the Corporation Code and the internal and intra-corporate
regulatory rules of the corporation, 24 hence, intra-corporate,
which should be heard by the designated Special Commercial
Court as provided under A.M. No. 03-03-03-SC 25 dated June 17,
2003 in relation to Item 5.2, Section 5 of RA 8799.
The present controversy lies, however, in the
procedure to be followed when a commercial case — such as
the instant intra-corporate dispute — has been properly filed in
the official station of the designated Special Commercial Court
but is, however, later wrongly assigned by raffle to a regular
branch of that station.
As a basic premise, let it be emphasized that a court's
acquisition of jurisdiction over a particular case's subject matter
is different from incidents pertaining to the exercise of its
jurisdiction. Jurisdiction over the subject matter of a case
is conferred by law,whereas a court's exercise of
jurisdiction, unless provided by the law itself, is governed by
the Rules of Court or by the orders issued from time to time by
the Court. 26 In Lozada v. Bracewell,27 it was recently held
that the matter of whether the RTC resolves an issue in the
exercise of its general jurisdiction or of its limited jurisdiction
as a special court is only a matter of procedure and has nothing
to do with the question of jurisdiction.
Pertinent to this case is RA 8799 which took effect on
August 8, 2000. By virtue of said law, jurisdiction over cases
enumerated in Section 5 28 of Presidential Decree No. 902-
A 29 was transferred from the Securities and Exchange
Commission (SEC) to the RTCs, being courts of general
jurisdiction. Item 5.2, Section 5 of RA 8799 provides:
SEC. 5. Powers and Functions of the
Commission. — ...
xxx xxx xxx
5.2 The Commission's jurisdiction over all
cases enumerated under Section 5 of
Presidential Decree No. 902-A is hereby
transferred to the Courts of general
jurisdiction or the appropriate Regional
Trial Court: Provided, that the Supreme
Court in the exercise of its authority may
designate the Regional Trial Court branches
that shall exercise jurisdiction over the
cases. The Commission shall retain
jurisdiction over pending cases involving
intra-corporate disputes submitted for final
resolution which should be resolved within
 one (1) year from the enactment of this
Code. The Commission shall retain
jurisdiction over pending suspension of
payments/rehabilitation cases filed as of 30
June 2000 until finally disposed. (Emphasis
supplied)
The legal attribution of Regional Trial Courts as courts
of general jurisdiction stems from Section 19 (6), Chapter II
of Batas Pambansa Bilang (BP) 129, 30 known as "The Judiciary
Reorganization Act of 1980":
Section 19. Jurisdiction in civil cases.—
Regional Trial Courts shall exercise exclusive
original jurisdiction:
xxx xxx xxx
(6) In all cases not within the exclusive
jurisdiction of any court, tribunal, person or
body exercising jurisdiction or any court,
tribunal, person or body exercising judicial or
quasi-judicial functions; .... DHITCc
As enunciated in Durisol Philippines, Inc. v. CA:31
The regional trial court, formerly
the court of first instance, is a court of
general jurisdiction. All 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. 32
To clarify, the word "or" in Item 5.2, Section 5 of RA
8799 was intentionally used by the legislature to particularize
the fact that the phrase "the Courts of general jurisdiction" is
equivalent to the phrase "the appropriate Regional Trial Court."
In other words, the jurisdiction of the SEC over the cases
enumerated under Section 5 of PD 902-A was transferred to the
courts of general jurisdiction, that is to say (or, otherwise known
as), the proper Regional Trial Courts. This interpretation is
supported by San Miguel Corp. v. Municipal Council,33 wherein
the Court held that:
[T]he word "or" may be used as the
equivalent of "that is to say" and gives that
which precedes it the same significance as
that which follows it. It is not always
disjunctive and is sometimes interpretative
or expository of the preceding word. 34
Further, as may be gleaned from the following excerpt
of the Congressional deliberations:
Senator [Raul S.] Roco: ....
xxx xxx xxx
....The first major departure is as regards the
Securities and Exchange Commission. The
Securities and Exchange Commission has
been authorized under this proposal to
reorganize itself. As an administrative
agency, we strengthened it and at the same
time we take away the quasi-judicial
functions. The quasi-judicial functions are
now given back to the courts of general
jurisdiction — the Regional Trial
Court, except for two categories of cases.
In the case of corporate disputes,
only those that are now submitted for final
determination of the SEC will remain with
the SEC. So, all those cases, both memos of
the plaintiff and the defendant, that have
been submitted for resolution will continue.
At the same time, cases involving
rehabilitation, bankruptcy, suspension of
payments and receiverships that were filed
before June 30, 2000 will continue with the
SEC. In other words, we are avoiding the
possibility, upon approval of this bill, of
people filing cases with the SEC, in manner
of speaking, to select their court. 35
xxx xxx xxx (Emphasis supplied)
Therefore, one must be disabused of the notion that
the transfer of jurisdiction was made only in favor of particular
RTC branches, and not the RTCs in general.
Consistent with the foregoing, history depicts that
when the transfer of SEC cases to the RTCs was first
implemented, they were transmitted to the Executive Judges of
the RTCs for raffle between or among its different
branches, unless a specific branch has been designated as a
Special Commercial Court, in which instance, the cases
were transmitted to said branch. 36 It was only on November
21, 2000 that the Court designated certain RTC branches to try
and decide said SEC cases 37 without, however, providing for the
transfer of the cases already distributed to or filed with the
regular branches thereof. Thus, on January 23, 2001, the Court
issued SC Administrative Circular No. 08-2001 38 directing the
transfer of said cases to the designated courts (commercial SEC
courts). Later, or on June 17, 2003, the Court issued A.M. No. 03-
03-03-SC consolidating the commercial SEC courts and the
intellectual property courts 39 in one RTC branch in a particular
locality,i.e.,the Special Commercial Court, to streamline the
court structure and to promote expediency.40 Accordingly, the
RTC branch so designated was mandated to try and decide SEC
cases, as well as those involving violations of intellectual
property rights, which were, thereupon, required to be filed in
the Office of the Clerk of Court in the official station of the
designated Special Commercial Courts,to wit:
1. The Regional Courts previously
designated as SEC Courts through the: (a)
Resolutions of this Court dated 21 November
2000, 4 July 2001, 12 November 2002, and 9
July 2002 all issued in A.M. No. 00-11-03-SC;
(b) Resolution dated 27 August 2001 in A.M.
No. 01-5-298-RTC; and (c) Resolution dated
8 July 2002 in A.M. No. 01-12-656-RTC are
hereby DESIGNATED and shall be CALLED
as Special Commercial Courts to try and
decide cases involving violations of
Intellectual Property Rights which fall within
their jurisdiction and those cases formerly
cognizable by the Securities and Exchange
Commission;
xxx xxx xxx
4. The Special Commercial Courts
shall have jurisdiction over cases arising
within their respective territorial jurisdiction
 with respect to the National Capital Judicial
Region and within the respective provinces
with respect to the First to Twelfth Judicial
Regions. Thus, cases shall be filed in the
Office of the Clerk of Court in the official
station of the designated Special
Commercial Court;41
xxx xxx xxx (Underscoring supplied)
It is important to mention that the Court's designation
of Special Commercial Courts was made in line with its
constitutional authority to supervise the administration of all
courts as provided under Section 6, Article VIII of the 1987
Constitution:
Section 6. The Supreme Court shall
have administrative supervision over all
courts and the personnel thereof. cEaSHC
The objective behind the designation of such
specialized courts is to promote expediency and efficiency in
the exercise of the RTCs' jurisdiction over the cases enumerated
under Section 5 of PD 902-A. Such designation has nothing to do
with the statutory conferment of jurisdiction to all RTCs
under RA 8799 since in the first place, the Court cannot enlarge,
diminish, or dictate when jurisdiction shall be removed, given
that the power to define, prescribe, and apportion jurisdiction
is, as a general rule, a matter of legislative
prerogative.42 Section 2, Article VIII of the 1987
Constitution provides:
Section 2. The Congress shall have
the power to define, prescribe, and
apportion the jurisdiction of the various
courts but may not deprive the Supreme
Court of its jurisdiction over cases
enumerated in Section 5 hereof.
xxx xxx xxx
Here, petitioners filed a commercial case, i.e.,an intra-
corporate dispute, with the Office of the Clerk of Court in the RTC
of Muntinlupa City, which is the official station of the designated
Special Commercial Court, in accordance with A.M. No. 03-03-
03-SC. It is, therefore, from the time of such filing that the RTC
of Muntinlupa City acquired jurisdiction over the subject
matter or the nature of the action. 43 Unfortunately, the
commercial case was wrongly raffled to a regular
branch, i.e.,Branch 276, instead of being assigned 44 to the sole
Special Commercial Court in the RTC of Muntinlupa City, which
is Branch 256. This error may have been caused by a reliance on
the complaint's caption, i.e.,"Civil Case for Injunction with prayer
for Status Quo Order, TRO and Damages," 45 which, however,
contradicts and more importantly, cannot prevail over its actual
allegations that clearly make out an intra-corporate dispute:
16. To the surprise of MLCG and
FMDG, however, in two identical letters both
dated 13 May 2011, under the letterhead
of GJH Land, Inc.,Yap, now acting as its
President, Jang and Kim demanded
payment of supposed unpaid
subscriptions of MLCG and FMDG
amounting to P10,899,854.30 and
P2,625,249.41, respectively.
16.1 Copies of
the letters dated 13 May
2011 are attached
hereto and made
integral parts hereof as
Annexes "J" and
"K",respectively.
17. On 29 July 2011, MLCG and
FMDG received an Offer Letter addressed to
stockholders of GJH Land, Inc. from Yap
informing all stockholders that GJH Land,
Inc. is now offering for sale the unpaid shares
of stock of MLCG and FMDG. The same letter
states that the offers to purchase these
shares will be opened on 10 August 2011
with payments to be arranged by deposit to
the depository bank of GJHLand, Inc.
17.1 A copy of
the undated Offer Letter
is attached hereto and
made an integral part
hereof as Annex "L".
18. The letter of GJH Land, Inc.
through Yap, is totally without legal and
factual basis because as evidenced by the
Deeds of Assignment signed and certified by
Yap herself, all the S.J. Land, Inc. shares
acquired by MLCG and FMDG have been fully
paid in the books of S.J. Land, Inc.
19. With the impending sale of the
alleged unpaid subscriptions on 10 August
2011, there is now a clear danger that MLCG
and FMDG would be deprived of these
shares without legal and factual basis.
20. Furthermore, if they are
deprived of these shares through the
scheduled sale, both MLCG and FMDG would
suffer grave and irreparable damage
incapable of pecuniary estimation.
21. For this reason, plaintiffs now
come to the Honorable Court for injunctive
relief so that after trial on the merits, a
permanent injunction should be issued
against the defendants preventing them
from selling the shares of the plaintiffs, there
being no basis for such sale. 46
According to jurisprudence, "it is not the caption but
the allegations in the complaint or other initiatory pleading
which give meaning to the pleading and on the basis of which
such pleading may be legally characterized." 47 However, so as
to avert any future confusion, the Court requires henceforth,
that all initiatory pleadings state the action's nature both in its
caption and the body, which parameters are defined in the
dispositive portion of this Decision.
Going back to the case at bar, the Court nonetheless
deems that the erroneous raffling to a regular branch instead of
to a Special Commercial Court is only a matter of procedure —
that is, an incident related to the exercise of jurisdiction — and,
thus, should not negate the jurisdiction which the RTC of
Muntinlupa City had already acquired. In such a scenario, the
proper course of action was not for the commercial case to be
dismissed; instead, Branch 276 should have first referred the
case to the Executive Judge for re-docketing as a commercial
case; thereafter, the Executive Judge should then assign said
case to the only designated Special Commercial Court in the
station, i.e.,Branch 256.
Note that the procedure would be different where the
RTC acquiring jurisdiction over the case has multiple special
commercial court branches; in such a scenario, the Executive
Judge, after re-docketing the same as a commercial case, should
proceed to order its re-raffling among the said special branches.
Meanwhile, if the RTC acquiring jurisdiction has no
branch designated as a Special Commercial Court, then it
should refer the case to the nearest RTC with a designated
Special Commercial Court branch within the judicial
region. 48 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. CTIEac
In all the above-mentioned scenarios, any difference
regarding the applicable docket fees should be duly accounted
for. On the other hand, all docket fees already paid shall be duly
credited, and any excess, refunded.
At this juncture, the Court finds it fitting to clarify that
the RTC mistakenly relied on the Calleja case to support its
ruling. In Calleja, an intra-corporate dispute 49 among officers of
a private corporation with principal address at Goa, Camarines
Sur, was filed with the RTC of San Jose, Camarines Sur, Branch 58
instead of the RTC of Naga City, which is the official station of the
designated Special Commercial Court for Camarines Sur.
Consequently, the Court set aside the RTC of San Jose, Camarines
Sur's order to transfer the case to the RTC of Naga City and
dismissed the complaint considering that it was filed before a
court which, having no internal branch designated as a Special
Commercial Court, had no jurisdiction over those kinds of
actions, i.e.,intra-corporate disputes. Calleja involved two
different RTCs,i.e.,the RTC of San Jose, Camarines Sur and the
RTC of Naga City, whereas the instant case only involves one
RTC,i.e.,the RTC of Muntinlupa City, albeit involving two
different branches of the same court, i.e.,Branches 256 and 276.
Hence, owing to the variance in the facts attending, it was then
improper for the RTC to rely on the Calleja ruling.
Besides, the Court observes that the fine line that
distinguishes subject matter jurisdiction and exercise of
jurisdiction had been clearly blurred in Calleja. Harkening back
to the statute that had conferred subject matter jurisdiction, two
things are apparently clear: (a) that the SEC's subject matter
jurisdiction over intra-corporate cases under Section 5
of Presidential Decree No. 902-A was transferred to the Courts
of general jurisdiction, i.e.,the appropriate Regional Trial Courts;
and (b) the designated branches of the Regional Trial Court, as
per the rules promulgated by the Supreme Court, shall exercise
jurisdiction over such cases. Item 5.2, Section 5 of RA
8799 provides:
SEC. 5. Powers and Functions of the
Commission. — ...
xxx xxx xxx
5.2 The Commission's jurisdiction over all
cases enumerated under Section 5
of Presidential Decree No. 902-A is hereby
transferred to the Courts of general
jurisdiction or the appropriate Regional
Trial Court: Provided, that the Supreme
Court in the exercise of its authority may
designate the Regional Trial Court branches
that shall exercise jurisdiction over the
cases.....
In contrast, the appropriate jurisprudential reference
to this case would be Tan v. Bausch & Lomb, Inc.,50 which
involves a criminal complaint for violation of intellectual
property rights filed before the RTC of Cebu City but was raffled
to a regular branch thereof (Branch 21),and not to a Special
Commercial Court. As it turned out, the regular branch
subsequently denied the private complainant's motion to
transfer the case to the designated special court of the same
RTC,on the ground of lack of jurisdiction. The CA reversed the
regular branch and, consequently, ordered the transfer of the
case to the designated special court at that time (Branch 9).The
Court, affirming the CA, declared that the RTC had acquired
jurisdiction over the subject matter. In view, however, of the
designation of another court as the Special Commercial Court in
the interim (Branch 11 of the same Cebu City RTC),the Court
accordingly ordered the transfer of the case and the transmittal
of the records to said Special Commercial Court
instead. 51Similarly, the transfer of the present intra-corporate
dispute from Branch 276 to Branch 256 of the same RTC of
Muntinlupa City, subject to the parameters above-discussed is
proper and will further the purposes stated in A.M. No. 03-03-
03-SC of attaining a speedy and efficient administration of
justice.
For further guidance, the Court finds it apt to point out
that the same principles apply to the inverse situation of
ordinary civil cases filed before the proper RTCs but wrongly
raffled to its branches designated as Special Commercial
Courts.In such a scenario, the ordinary civil case should then be
referred to the Executive Judge for re-docketing as an ordinary
civil case; thereafter, the Executive Judge should then order the
raffling of the case to all branches of the same RTC, subject to
limitations under existing internal rules, and the payment of
the correct docket fees in case of any difference. Unlike the
limited assignment/raffling of a commercial case only to
branches designated as Special Commercial Courts in the
scenarios stated above, the re-raffling of an ordinary civil case in
this instance to all courts is permissible due to the fact that a
particular branch which has been designated as a Special
Commercial Court does not shed the RTC's general jurisdiction
over ordinary civil cases under the imprimatur of statutory
law, i.e., Batas Pambansa Bilang (BP) 129. 52 To restate, the
designation of Special Commercial Courts was merely intended
as a procedural tool to expedite the resolution of commercial
cases in line with the court's exercise of jurisdiction. This
designation was not made by statute but only by an internal
Supreme Court rule under its authority to promulgate rules
governing matters of procedure and its constitutional mandate
to supervise the administration of all courts and the personnel
thereof. 53 Certainly, an internal rule promulgated by the Court
cannot go beyond the commanding statute. But as a more
fundamental reason, the designation of Special Commercial
Courts is, to stress, merely an incident related to the court's
exercise of jurisdiction, which, as first discussed, is distinct from
the concept of jurisdiction over the subject matter. The RTC's
general jurisdiction over ordinary civil cases is therefore not
abdicated by an internal rule streamlining court procedure.
 In fine, Branch 276's dismissal of Civil Case No. 11-077 designated as a Special
is set aside and the transfer of said case to Branch 256, the Commercial Court,
designated Special Commercial Court of the same RTC of assign the case to the
Muntinlupa City, under the parameters above-explained, is sole special branch;
hereby ordered. or (b) if the said RTC has
multiple branches
WHEREFORE, the petition is GRANTED.The Orders
designated as Special
dated April 17, 2012 and July 9, 2012 of the Regional Trial Court
Commercial Courts,
(RTC) of Muntinlupa City, Branch 276 in Civil Case No. 11-077 are
raffle off the case among
hereby REVERSED and SET ASIDE.Civil Case No. 11-077
those special branches.
is REFERRED to the Executive Judge of the RTC of Muntinlupa
City for re-docketing as a commercial case. Thereafter, the 2. If an ordinary civil case filed before the
Executive Judge shall ASSIGN said case to Branch 256, the sole proper RTC is wrongly raffled to its branch
designated Special Commercial Court in the RTC of Muntinlupa designated as a Special Commercial Court,
City, which is ORDERED to resolve the case with reasonable then the case shall be referred to the
dispatch. In this regard, the Clerk of Court of said RTC Executive Judge for re-docketing as an
shall DETERMINE the appropriate amount of docket fees and, in ordinary civil case. Thereafter, it shall be
so doing, ORDER the payment of any difference or, on the other raffled off to all courts of the same RTC
hand, refund any excess. SaCIDT (including its designated special branches
which, by statute, are equally capable of
Furthermore, the Court hereby RESOLVES that
exercising general jurisdiction same as
henceforth, the following guidelines shall be observed:
regular branches),as provided for under
1. If a commercial case filed before the existing rules.
proper RTC is wrongly raffled to its regular
3. All transfer/raffle of cases is subject to the
branch, the proper courses of action are as
payment of the appropriate docket fees in
follows:
case of any difference. On the other hand, all
1.1 If the RTC has only docket fees already paid shall be duly
one branch designated credited, and any excess, refunded.
as a Special Commercial
4. Finally, to avert any future confusion, the
Court, then the case
Court requires that all initiatory pleadings
shall be referred to the
state the action's nature both in its caption
Executive Judge for re-
and body. Otherwise, the initiatory pleading
docketing as a
may, upon motion or by order of the
commercial case, and
court motu proprio,be dismissed without
thereafter, assigned to
prejudice to its re-filing after due
the sole special branch;
rectification. This last procedural rule is
1.2 If the RTC has prospective in application.
multiple branches
5. All existing rules inconsistent with the
designated as Special
foregoing are deemed superseded.
Commercial Courts, then
the case shall be SO ORDERED.
referred to the Executive
Judge for re-docketing
as a commercial case, ||| (Tijam v. Sibonghanoy, G.R. No. L-21450, [April
and thereafter, raffled 15, 1968], 131 PHIL 556-568)
off among those special
branches; and REMEDIAL LAW; COURTS; JURISDICTION; PARTY
GUILTY OF LACHES MAY NOT INVOKE LACK OF JURISDICTION ON
1.3 If the RTC has no APPEAL AS IN INSTANT CASE. — It is undisputed fact that the
internal branch action commenced by appellees in the Court of First Instance of
designated as a Special Cebu against the Sibonghanoy spouses was for the recovery of
Commercial Court, then the sum of P1,908.00 only — an amount within the original
the case shall be exclusive jurisdiction of inferior courts in accordance with the
referred to the nearest provisions of the Judiciary Act of 1948 which had taken effect
RTC with a designated about a month prior to the date when the action was
Special Commercial commenced. True also is the rule that jurisdiction over the
Court branch within the subject matter is conferred upon the courts exclusively by law,
judicial region. Upon and as the lack of it affects the very authority of the court to take
referral, the RTC to cognizance of the case, the objection may be raised at any stage
which the case was of the proceedings. However, considering the facts and
referred to should re- circumstances of the present case, We are of the opinion that
docket the case as a the Surety is now barred by laches from invoking this plea at this
commercial case, and late hour for the purpose of annulling everything done
then: (a) if the said RTC heretofore in the case with its active participation.
has only one branch
 2. ID.; ESTOPPEL; DIFFERENT WAYS A PARTY MAY BE
BARRED FROM RAISING QUESTION. — A party may be estopped
or barred from raising a question in different ways and for
different reasons. Thus we speak of estoppel in pais, of estoppel
by deed or by record, and of estoppel by laches.
3. ID.; LACHES; DEFINITION. — Laches, in a general
sense, is 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. cdasia
4. ID.; ID.; BASIS. — The doctrine of laches or of "stale
demands" is based upon grounds of public policy which requires,
for the peace of society, the discouragement of stale claims and,
unlike the statute of limitations, is not a mere question of time
but is principally a question of the inequity or unfairness of
permitting a right or claim to be enforced or asserted.
5. ID.; ID.; INSTANCES WHEN PARTY MAY BE ESTOPPED
FROM INVOKING QUESTION OF JURISDICTION. — 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. The question
whether the court had jurisdiction either of the subject matter
of the action or of the parties was not important in such cases
because the party is barred from such conduct not because the
judgment or order of the court is valid and conclusive as an
adjudication, but for the reason that such a practice cannot be
tolerated — obviously for reasons of public policy.
6. ID.; ID.; FAILURE TO RAISE QUESTION OF
JURISDICTION AT AN EARLIER STAGE BARS PARTY FROM
QUESTIONING IT LATER. — Where from the time the Surety
became a quasi-party on July 31, 1948, it could have raised the
question of the lack of jurisdiction of the Court of First Instance
of Cebu by reason of the sum of money involved which was
within the original exclusive jurisdiction of inferior courts but
failed to do so and instead, at several stages of the proceedings
in the court a quo as well as in the Court of Appeals, it invoked
the jurisdiction of said courts to obtain affirmative relief and
submitted its case for a final adjudication on the merits, and it
was only after an adverse decision was rendered by the Court of
Appeals that it finally raised said question of jurisdiction, to
sanction such conduct on its part would in effect be declaring as
useless all the proceedings had in the present case since it was
commenced on July 19, 1948 and compel the judgment creditors
to go up their Calvary once more. The inequity and unfairness of
this is not only patent but revolting.
DECISION
DIZON, J p:
On July 19, 1948 — barely one month after the
effectivity of Republic Act No. 296 known as the Judiciary Act of
1948 — the spouses Serafin Tijam and Felicitas Tagalog
commenced Civil Case No. R-660 in the Court of First Instance of
Cebu against the spouses Magdaleno Sibonghanoy and Lucia
Baguio to recover from them the sum of P1,908.00, with legal
interest thereon from the date of the filing of the complaint until
the whole obligation is paid, plus costs. As prayed for in the
complaint, a writ of attachment was issued by the court against
defendants' properties, but the same was soon dissolved upon
the filing of a counter-bond by defendants and the Manila Surety
and Fidelity Co., Inc. hereinafter referred to as the Surety, on the
31st of the same month.
After being duly served with summons the defendants
filed their answer in which, after making some admissions and
denials of the material averments of the complaint, they
interposed a counterclaim. This counterclaim was answered by
the plaintiffs.
After trial upon the issues thus joined, the Court
rendered judgment in favor of the plaintiffs and, after the same
had become final and executory, upon motion of the latter, the
Court issued a writ of execution against the defendants. The writ
having been returned unsatisfied, the plaintiffs moved for the
issuance of a writ of execution against the Surety's bond (Rec. on
Appeal pp. 46-49), against which the Surety filed a written
opposition (Id. pp. 49) upon two grounds, namely, (1) Failure to
prosecute and (2) Absence of a demand upon the Surety for the
payment of the amount due under the judgment. Upon these
grounds the Surety prayed the Court not only to deny the motion
for execution against its counter-bond but also the
following affirmative relief : "to relieve the herein bonding
company of its liability, if any, under the bond in question" (Id. p.
54) The Court denied this motion on the ground solely that no
previous demand had been made on the Surety for the
satisfaction of the judgment. Thereafter the necessary demand
was made, and upon failure of the Surety to satisfy the judgment,
the plaintiffs filed a second motion for execution against the
counter-bond. On the date set for the hearing thereon, the
Court, upon motion of the Surety's counsel, granted the latter a
period of five days within which to answer the motion. Upon its
failure to file such answer, the Court granted the motion for
execution and the corresponding writ was issued. llpr
Subsequently, the Surety moved to quash the writ on
the ground that the same was issued without the required
summary hearing provided for in Section 17 of Rule 59 of the
Rules of Court. As the Court denied the motion, the Surety
appealed to the Court of Appeals from such order of denial and
from the one denying its motion for reconsideration (Id. p. 97).
Its record on appeal was then printed as required by the Rules,
and in due time it filed its brief raising therein no other question
but the ones covered by the following assignment of errors:
"I. That the Honorable Court a
quo erred in issuing its order dated November
2, 1957, by holding the incident as submitted
for resolution, without a summary hearing and
compliance with the other mandatory
requirements provided for in Section 17, Rule
59 of the Rules of Court.
"II. That the Honorable Court a
quo erred in ordering the issuance of execution
against the herein bonding company-appellant.
"III. That the Honorable Court a
quo erred in denying the motion to quash the
writ of execution filed by the herein bonding
company- appellant as well as its subsequent
motion for reconsideration, and/or in not
quashing or setting aside the writ of
execution."
 Not one of the assignment of errors — it is obvious —
raises the question of lack of jurisdiction, neither directly nor
indirectly. dctai
Although the appellees failed to file their brief, the
Court of Appeals, on December 11, 1962, decided the case
affirming the orders appealed from.
On January 8, 1963 — five days after the Surety
received notice of the decision, it filed a motion asking for
extension of time within which to file a motion for
reconsideration. The Court of Appeals granted the motion in its
resolution of January 10 of the same year. Two days later the
Surety filed a pleading entitled MOTION TO DISMISS, alleging
substantially that appellees' action was filed in the Court of First
Instance of Cebu on July 19, 1948 for the recovery of the sum of
P1,908.00 only; that a month before that date Republic Act No.
296, otherwise known as the Judiciary Act of 1948, had already
become effective, Section 88 of which placed within the original
exclusive jurisdiction of inferior courts all civil actions where the
value of the subject-matter or the amount of the demand does
not exceed P2,000.00, exclusive of interest and costs; that the
Court of First Instance therefore had no jurisdiction to try and
decide the case. Upon these premises the Surety's motion
prayed the Court of Appeals to set aside its decision and to
dismiss the case. By resolution of January 16, 1963 the Court of
Appeals required the appellees to answer the motion to dismiss,
but they failed to do so. Whereupon, on May 20 of the same
year, the Court resolved to set aside its decision and to certify
the case to Us. The pertinent portions of its resolution read as
follows:
"It would indeed appear from the
record that the action at bar, which is a suit for
collection of money in the sum of exactly
P1,908.00 exclusive of interest, was originally
instituted in the Court of First Instance of Cebu
on July 19, 1948. But about a month prior to the
filing of the complaint, more specifically on
June 17, 1948, the Judiciary Act of 1948 took
effect, depriving the Court of First Instance of
original jurisdiction over cases in which the
demand, exclusive of interest, is not more than
P2,000.00 (Secs. 44[c] and 86[b], R.A. No. 296.).
"We believe, therefore, that the
point raised in appellant's motion is an
important one which merits serious
consideration. As stated, the complaint was
filed on July 19, 1948. This case therefore has
been pending now for almost 15 years, and
throughout the entire proceeding appellant
never raised the question of jurisdiction until
after receipt of this Court's adverse decision.
"There are three cases decided by
the Honorable Supreme Court which may be
worthy of consideration in connection with this
case, namely: Tyson Tan, et al. vs. Filipinas
Compañia de Seguros, et al., G. R. No. L-10096,
March 23, 1956; Pindañgan Agricultural Co.,
Inc. vs. Jose P. Dans, etc., et al., G. R. No. L-
14591, September 26, 1962; and Alfredo
Montelibano, et al. vs. Bacolod-Murcia Milling
Co., Inc., G. R. No. L-15092, September 29,
1962, wherein the Honorable Supreme Court
frowned upon the 'undesirable practice' of
appellants submitting their case for decision
and then accepting the judgment, if favorable,
but attacking it for lack of jurisdiction when
adverse.
"Considering, however, that the
Supreme Court has the 'exclusive' appellate
jurisdiction over 'all cases in which the
jurisdiction of any inferior court is in issue' (Sec.
1, Par. 3[3], Judiciary Act of 1948, as amended),
we have no choice but to certify, as we hereby
do certify; this case to the Supreme Court.
"ACCORDINGLY, pursuant to Section
31 of the Judiciary Act of 1948 as amended, let
the record of this case be forwarded to the
Supreme Court."
It is an undisputed fact that the action commenced by
appellees in the Court of First Instance of Cebu against the
Sibonghanoy spouses was for the recovery of the sum of
P1,908.00 only — an amount within the original exclusive
jurisdiction of inferior courts in accordance with the provisions
of the Judiciary Act of 1948 which had taken effect about a
month prior to the date when the action was commenced. True
also is the rule that jurisdiction over the subject-matter is
conferred upon the courts exclusively by law, and as the lack of
it affects the very authority of the court to take cognizance of the
case, the objection may be raised at any stage of the
proceedings. However, considering the facts and circumstances
of the present case — which shall forthwith be set forth — We
are of the opinion that the Surety is now barred by laches from
invoking this plea at this late hour for the purpose of annulling
everything done heretofore in the case with its active
participation. As already stated, the action was commenced in
the Court of First Instance of Cebu on July 19, 1948, that is,
almost fifteen years before the Surety filed its motion to dismiss
on January 12, 1963 raising the question of lack of jurisdiction for
the first time.
It must be remembered that although the action,
originally, was exclusively against the Sibonghanoy spouses, the
Surety became a quasi-party therein since July 31, 1948 when it
filed a counter-bond for the dissolution of the writ of attachment
issued by the court of origin (Record on Appeal, pp. 15-19). Since
then, it acquired certain rights and assumed specific obligations
in connection with the pending case, in accordance with Sections
12 and 17, Rule 57, Rules of Court (Bautista vs. Joaquin, 46 Phil.
885; Kimpang & Co. vs. Javier, 65 Phil. 170).
Upon the filing of the first motion for execution against
the counter-bond the Surety not only filed a written opposition
thereto praying for its denial but also asked for an
additional affirmative relief — that it be relieved of its liability
under the counter-bond upon the grounds relied upon in
support of its opposition — lack of jurisdiction of the court a
quo not being one of them. cdrep
Then, at the hearing on the second motion for
execution against the counter-bond, the Surety appeared,
through counsel, to ask for time within which to file an answer
or opposition thereto. This motion was granted, but instead of
such answer or opposition, the Surety filed the motion to dismiss
mentioned heretofore.
A party may be estopped or barred from raising a
question in different ways and for different reasons. Thus we
speak of estoppel in pais, of estoppel by deed or by record, and
of estoppel by laches.
Laches, in a general sense, is 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.
The doctrine of laches or of "stale demands" is based
upon grounds of public policy which requires, for the peace of
society, the discouragement of stale claims and, unlike the
statute of limitations, is not a mere question of time but is
principally a question of the inequity or unfairness of permitting
a right or claim to be enforced or asserted.
It has been held that 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 (Dean vs. Dean, 136
Or. 694, 86 A.L.R. 79). In the case just cited, by way of explaining
the rule, it was further said that the question whether the court
had jurisdiction either of the subject-matter of the action or of
the parties was not important in such cases because the party is
barred from such conduct not because the judgment or order of
the court is valid and conclusive as an adjudication, but for the
reason that such a practice cannot be tolerated — obviously for
reasons of public policy.
Furthermore, it has also been held that after
voluntarily submitting a cause and encountering an adverse
decision on the merits, it is too late for the loser to question the
jurisdiction or power of the court (Pease vs. Rathbun-Jones etc.
243 U.S. 273, 61 L. Ed. 715, 37 S. Ct. 283; St. Louis
etc. vs. McBride, 141 U.S. 127, 35 L. Ed. 659). And in
Littleton vs. Burgess, 16 Wyo. 58, the Court said that it is not
right for a party who has affirmed and invoked the jurisdiction of
a court in a particular matter to secure an affirmative relief, to
afterwards deny that same jurisdiction to escape a penalty.
Upon this same principle is what We said in the three
cases mentioned in the resolution of the Court of Appeals of May
20, 1963 (supra) — to the effect that we frown upon the
"undesirable practice" of a party submitting his case for decision
and then accepting the judgment, only if favorable, and attacking
it for lack of jurisdiction, when adverse — as well as in Pindañgan
etc. vs. Dans et al., G. R. L-14591, September 26, 1962;
Montelibano et al. vs. Bacolod-Murcia Milling Co., Inc., G. R. L-
15092; Young Men Labor Union etc. vs. the Court of Industrial
Relations et al., G. R. L-20307, Feb. 26, 1965, and Mejia vs.Lucas,
100 Phil. p. 277.
The facts of this case show that from the time the
Surety became a quasi-party on July 31, 1948, it could have
raised the question of the lack of jurisdiction of the Court of First
Instance of Cebu to take cognizance of the present action by
reason of the sum of money involved which, according to the law
then in force, was within the original exclusive jurisdiction of
inferior courts. It failed to do so. Instead, at several stages of the
proceedings in the court a quo as well as in the Court of Appeals,
it invoked the jurisdiction of said courts to obtain affirmative
relief and submitted its case for a final adjudication on the
merits. It was only after an adverse decision was rendered by the
Court of Appeals that it finally woke up to raise the question of
jurisdiction. Were We to sanction such conduct on its part, We
would in effect be declaring as useless all the proceedings had in
the present case since it was commenced on July 19, 1948 and
compel the judgment creditors to go up their Calvary once more.
The inequity and unfairness of this is not only patent but
revolting.
Coming now to the merits of the appeal: after going
over the entire record, We have become persuaded that We can
do nothing better than to quote in toto, with approval the
decision rendered by the Court of Appeals on December 11, 1962
as follows:
"In Civil Case No. R-660 of the Court
of First Instance of Cebu, which was a suit for
collection of a sum of money, a writ of
attachment was issued against defendants'
properties. The attachment, however, was
subsequently discharged under Section 12 of
Rule 59 upon the filing by defendants of a bond
subscribed by Manila Surety & Fidelity Co., Inc.
"After trial, judgment was rendered in favor of
plaintiffs.
"The writ of execution against
defendants having been returned totally
unsatisfied, plaintiffs moved, under Section 17
of Rule 59, for issuance of writ of execution
against Manila Surety & Fidelity Co., Inc. to
enforce the obligation of the bond. But the
motion was, upon the surety's opposition,
denied on the ground that there was 'no
showing that a demand had been made by the
plaintiffs to the bonding company for payment
of the amount due under the
judgment'(Record on Appeal, p. 60).
"Hence, plaintiffs made the
necessary demand upon the surety for
satisfaction of the judgment, and upon the
latter's failure to pay the amount due, plaintiffs
again filed a motion dated October 31, 1957,
for issuance of writ of execution against the
surety, with notice of hearing on November 2,
1957. On October 31, 1957, the surety received
copy of said motion and notice of
hearing. cdasia
"It appears that when the motion
was called on November 2, 1957, the surety's
counsel asked that he be given time within
which to answer the motion, and so an order
was issued in open court, as follows:
'As prayed for, Atty. Jose P.
Soberano, Jr. counsel for the Manila Surety &
Fidelity Co., Inc., Cebu Branch, is given until
Wednesday, November 6, 1957, to file his
answer to the motion for the issuance of a writ
of execution dated October 30, 1957 of the
plaintiffs, after which this incident shall be
deemed submitted for resolution.
'SO ORDERED
'Given in open court, this 2nd day of
Nov. 1957, at Cebu City, Philippines.
'(SGD.) JOSE M. MENDOZA
Judge
 (Record on Appeal,
pp. 64-65, emphasis supplied)
"Since the surety's counsel failed to
file any answer or objection within the period
given him, the court, on December 7, 1957,
issued an order granting plaintiffs' motion for
execution against the surety; and on December
12, 1957, the corresponding writ of execution
was issued.
"On December 24, 1957, the surety
filed a motion to quash the writ of execution on
the ground that the same was 'issued without
the requirements of Section 17, Rule 59 of the
Rules of Court having been complied with,'
more specifically, that the same was issued
without the required 'summary hearing'. This
motion was denied by order of February 10,
1958.
"On February 25, 1958, the surety
filed a motion for reconsideration of the above-
stated order of denial; which motion was
likewise denied by order of March 26, 1958.
"From the above-stated orders of
February 10, 1958 and March 26, 1958 —
denying the surety's motion to quash the writ
of execution and motion for reconsideration,
respectively — the surety has interposed the
appeal on hand.
"The surety insists that the lower
court should have granted its motion to quash
the writ of execution because the same was
issued without the summary hearing required
by Section 17 of Rule 59, which reads:
SECTION 17. When
execution returned unsatisfied,
recovery had upon bond. — if the
execution be returned unsatisfied in
whole or in part, the surety or
sureties on any bond given pursuant
to the provisions of this role to secure
the payment of the judgment shall
become finally charged on such
bond, and bound to pay to the
plaintiff upon demand the amount
due under the judgment, which
amount may be recovered from such
surety or sureties after notice
and summary hearing in the same
action.'(Emphasis supplied).
"Summary hearing is 'not intended to
be carried on in the formal manner in which
ordinary actions are prosecuted' (83 C.J.S. 792).
It is, rather, a procedure by which a question is
resolved 'with dispatch, with the least possible
delay, and in preference to ordinary legal and
regular judicial proceedings' (Ibid, p. 790).
What is essential is that 'the defendant is
notified or summoned to appear and is given
an opportunity to hear what is urged upon him,
and to interpose a defense, after which follows
an adjudication of the rights of the parties'
(Ibid., pp. 793-794); and as to the extent and
latitude of the hearing, the same will naturally
lie upon the discretion of the court, depending
upon the attending circumstances and the
nature of the incident up for consideration.
"In the case at bar, the surety had
been notified of the plaintiffs' motion for
execution and of the date when the same
would be submitted for consideration. In fact,
the surety's counsel, was present in court when
the motion was called, and it was upon his
request that the court a quo gave him a period
of four days within which to file an answer. Yet
he allowed that period to lapse without filing
an answer or objection. The surety cannot now,
therefore, complain that it was deprived of its
day in court.
"It is argued that the surety's counsel
did not file an answer to the motion 'for the
simple reason that all its defenses can be set up
during the hearing of the motion even if the
same are not reduced to writing' (Appellant's
brief, p. 4). There is obviously no merit in this
pretense because, as stated above, the record
will show that when the motion was called,
what the surety's counsel did was to ask that he
be allowed and given time to file an answer.
Moreover, it was stated in the order given in
open court upon request of the surety's
counsel that after the four-day period within
which to file an answer, 'the incident shall be
deemed submitted for resolution'; and counsel
apparently agreed, as the order was issued
upon his instance and he interposed no
objection thereto.
"It is also argued that although
according to Section 17 of Rule 59, supra, there
is no need for a separate action, there must,
however, be a separate judgment against the
surety in order to hold it liable on the bond
(Appellant's Brief, p, 15). Not so, in our opinion.
A bond filed for discharge of attachment is, per
Section 12 of Rule 59, 'to secure the payment
to the plaintiff of any judgment he may recover
in the action,' and stands 'in place of the
property so released.' Hence, after the
judgment for the plaintiff has become
executory and the execution is 'returned
unsatisfied' (Section. 17, Rule 59), as in this
case, the liability of the bond automatically
attaches and, in failure of the surety to satisfy
the judgment against the defendant despite
demand therefor, writ of execution may issue
against the surety to enforce the obligation of
the bond." cdll
UPON ALL THE FOREGOING, the orders appealed from
are hereby affirmed, with costs against the appellant Manila
Surety and Fidelity Company, Inc.