to submit to the Church government and they are bound to submit to it.

DOCTRINE OF NON-INTERFERENCE

In the leading case of Fonacier v. Court of Appeals,[6] we enunciated the

DOMINADOR L. TARUC v. CA [G.R. No. 144801. March 10, 2005]
ISSUE: whether or not the courts have jurisdiction to hear a case involving the
expulsion/excommunication of members of a religious institution.
HELD: the courts do not.
Section 5, Article III or the Bill of Rights of the 1987 Constitution specifically
provides that:
Sec. 5. No law shall be made respecting an establishment of religion or
prohibiting the free exercise thereof. The free exercise and enjoyment of
religious profession and worship, without discrimination or preference, shall
forever be allowed. No religious test shall be required for the exercise of civil or
political rights.
In our jurisdiction, we hold the Church and the State to be separate and distinct
from each other. 'Give to Ceasar what is Ceasar's and to God what is God's . We
have, however, observed as early as 1928 that:
doctrine that in disputes involving religious institutions or organizations, there is
one area which the Court should not touch: doctrinal and disciplinary
differences.[7] Thus,
The amendments of the constitution, restatement of articles of religion and
abandonment of faith or abjuration alleged by appellant, having to do with faith,
practice, doctrine, form of worship, ecclesiastical law, custom and rule of a
church and having reference to the power of excluding from the church
those allegedly unworthy of membership, are unquestionably
ecclesiastical matters which are outside the province of the civil
Courts.
We would, however, like to comment on petitioners' claim that they were not
heard before they were expelled from their church. The records show that
Bishop de la Cruz pleaded with petitioners several times not to commit acts
inimical to the best interests of PIC. They were also warned of the consequences
of their actions, among them their expulsion/excommunication from PIC. Yet,
these pleas and warnings fell on deaf ears and petitioners went ahead with their
plans to defy their Bishop and foment hostility and disunity among the members
of PIC in Socorro, Surigao del Norte. They should now take full responsibility for
the chaos and dissension they caused.

upon the examination of the decisions it will be readily apparent that cases
involving questions relative to ecclesiastical rights have always received the
profoundest attention from the courts, not only because of their inherent
interest, but because of the far reaching effects of the decisions in human
society. [However,] courts have learned the lesson of conservatism in dealing
with such matters, it having been found that, in a form of government where
the complete separation of civil and ecclesiastical authority is insisted upon, the
civil courts must not allow themselves to intrude unduly in matters of an
ecclesiastical nature.

We agree with the Court of Appeals that the expulsion/excommunication of

members of a religious institution/organization is a matter best left to the
discretion of the officials, and the laws and canons, of said
institution/organization. It is not for the courts to exercise control over church
authorities in the performance of their discretionary and official functions.
Rather, it is for the members of religious institutions/organizations to conform to
just church regulations. In the words of Justice Samuel F. Miller[5]:

all who unite themselves to an ecclesiastical body do so with an implied consent


JURISDICTION : RETROACTIVE EFFECT
ELVIRA YU OH vs. COURT OF APPEALS, ET AL. G.R. No. 125297
June 6, 2003
The RTC finds the accused GUILTY of ten counts of violation of BP 22 and hereby
sentences her to a penalty of one year imprisonment for each count, or a total
of ten years, to be served in accordance with the limitation prescribed in par. 4,
Article 70 of the Revised Penal Code and to indemnify complainant the amount
of the checks in their totality, or in the amount of P500,000.00.Petitioner
appealed to the Court of Appeals alleging that: the RTC has no jurisdiction over
the offense charged in the ten informations; it overlooked the fact that no notice
of dishonor had been given to the appellant as drawer of the dishonored checks;
it failed to consider that the reason of "closed account" for the dishonor of the
ten checks in these cases is not the statutory cause to warrant prosecution,
much more a conviction, under B.P. Blg. 22; it failed to consider that there is
only one act which caused the offense, if any, and not ten separate cases; and it
disregarded the definition of what a 'check' is under Sec. 185 of the Negotiable
Instruments Law.9
Petitioner argues that: the failure of the appellate court to give retroactive
application to R.A. 7691 is a violation of Art. 22 of the Revised Penal Code which
provides that penal laws shall have retroactive effect insofar as they favor the
person guilty of the felony; R.A. 7691 is a penal law in the sense that it affects
the jurisdiction of the court to take cognizance of criminal cases; taken
separately, the offense covered by each of the ten Informations in this case falls
within the exclusive original jurisdiction of the Municipal Trial Court under Sec. 2
of R.A. 7691; and the Court of Appeals is guilty of judicial legislation in stating
that after the arraignment of petitioner, said cases could no longer be
transferred to the MTC without violating the rules on double jeopardy, because
that is not so provided in R.A. 7691.1
The Solicitor General, in its Comment, counters that the arguments of petitioner
are baseless contending that: penal laws are those which define crimes and
provides for their punishment; laws defining the jurisdiction of courts are
substantive in nature and not procedural for they do not refer to the manner of
trying cases but to the authority of the courts to hear and decide certain and
definite cases in the various instances of which they are susceptible; R.A. No.
7691 is a substantive law and not a penal law as nowhere in its provisions does
it define a crime neither does it provide a penalty of any kind; the purpose of
enacting R.A. No. 7691 is laid down in the opening sentence thereof as "An Act
Expanding the Jurisdiction of the Municipal Trial Courts, Municipal Circuit Trial
Courts and the Metropolitan Trial Court" whereby it reapportions the jurisdiction
of said courts to cover certain civil and criminal case, erstwhile tried exclusively
by the Regional Trial Courts; consequently, Art. 22 of the RPC finds no
application to the case at bar; jurisdiction is determined by the law in force at
the time of the filing of the complaint, and once acquired, jurisdiction is not
affected by subsequent legislative enactments placing jurisdiction in another
tribunal; in this case, the RTC was vested with jurisdiction to try petitioner's
cases when the same were filed in October 1992; at that time, R.A. No. 7691
was not yet effective;12 in so far as the retroactive effect of R.A. No. 7691 is
concerned, that same is limited only to pending civil cases that have not
reached pre-trial stage as provided for in Section 7 thereof and as clarified by
this Court in People vs. Yolanda Velasco13, where it was held: "[a] perusal of R.A.
No. 7691 will show that its retroactive provisions apply only to civil cases that
have not yet reached the pre-trial stage. Neither from an express proviso nor by
implication can it be understood as having retroactive application to criminal
cases pending or decided by the RTC prior to its effectivity."14
First issue – Whether or not the Court of Appeals erred in not giving retroactive
effect to R.A. 7690 in view of Article 22 of the RPC. - NO
On this point, the Court fully agrees with the Solicitor General and
holds that Article 22 of the Revised Penal Code finds no application to
the case at bar.
Said provision reads:
ART. 22. Retroactive effect of penal laws. – Penal laws shall have a
retroactive effect insofar as they favor the person guilty of a felony,
who is not a habitual criminal, as this term is defined in Rule 5 of
Article 62 of this Code, although at the time of the publication of such
laws a final sentence has been pronounced and the convict is serving
sentence.
A penal law, as defined by this Court, is an act of the legislature that prohibits
certain acts and establishes penalties for its violations. It also defines crime,
treats of its nature and provides for its punishment.15 R.A. No. 7691 does not
prohibit certain acts or provides penalties for its violation; neither
does it treat of the nature of crimes and its punishment. Consequently,
R.A. No. 7691 is not a penal law, and therefore, Art. 22 of the RPC does
not apply in the present case.
B. P. Blg. 22, which took effect on April 24, 1979, provides the penalty of
imprisonment of not less than thirty days but not more than one year or by a
fine of not less than but not more than double the amount of the check which
fine shall in no case exceed P200,000.00, or both such fine and imprisonment at
the discretion of the court.
R.A. No. 7691 which took effect on June 15, 1994, amended B.P. Blg. 129, and
vested on the Metropolitan, Municipal and Municipal Circuit Trial Courts
jurisdiction to try cases punishable by imprisonment of not more than six (6)
years.16 Since R.A. No. 7691 vests jurisdiction on courts, it is apparent that said
law is substantive.17
In the case of Cang vs. Court of Appeals,18 this Court held that "jurisdiction
being a matter of substantive law, the established rule is that the
statute in force at the time of the commencement of the action
determines the jurisdiction of the court."19 R.A. No. 7691 was not yet in
force at the time of the commencement of the cases in the trial court.
It took effect only during the pendency of the appeal before the Court of
Appeals.20 There is therefore no merit in the claim of petitioner that R.A. No.
7691 should be retroactively applied to this case and the same be remanded to
the MTC. The Court has held that a "law vesting additional jurisdiction
in the court cannot be given retroactive effect."
JURISDICTION : RETROACTIVE EFFECT
ISABELITA S. LAHOM vs. JOSE MELVIN SIBULO G.R. No. 143989
July 14, 2003
In December of 1999, Mrs. Lahom commenced a petition to rescind the decree
of adoption before the Regional Trial Court (RTC), Branch 22, of Naga City.
Prior to the institution of the case, specifically on 22 March 1998, Republic Act
(R.A.) No. 8552, also known as the Domestic Adoption Act, went into effect. The
new statute deleted from the law the right of adopters to rescind a decree of
adoption.
Section 19 of Article VI of R.A. No. 8552 now reads:
"SEC. 19. Grounds for Rescission of Adoption. — Upon petition of the
adoptee, with the assistance of the Department if a minor or if over
eighteen (18) years of age but is incapacitated, as guardian/counsel,
the adoption may be rescinded on any of the following grounds
committed by the adopter(s): (a) repeated physical and verbal
maltreatment by the adopter(s) despite having undergone counseling;
(b) attempt on the life of the adoptee; (c) sexual assault or violence; or
(d) abandonment and failure to comply with parental obligations.
"Adoption, being in the best interest of the child, shall not be subject to
rescission by the adopter(s). However, the adopter(s) may disinherit
the adoptee for causes provided in Article 919 of the Civil Code."
(emphasis supplied)
Jose Melvin moved for the dismissal of the petition, contending principally (a)
that the trial court had no jurisdiction over the case and (b) that the petitioner
had no cause of action in view of the aforequoted provisions of R.A. No. 8552.
Petitioner asseverated, by way of opposition, that the proscription in R.A. No.
8552 should not retroactively apply, i.e., to cases where the ground for
rescission of the adoption vested under the regime of then Article 3482 of the
Civil Code and Article 1923 of the Family Code.
Art. 348. The adopter may petition the court for revocation of the
adoption in any of these cases:
(1) If the adopted person has attempted against the life of the
adopter;
(2) When the adopted minor has abandoned the home of the
adopter for more than three years;
(3) When by other acts the adopted person has definitely
repudiated the adoption. (n)
Art. 192. The adopters may petition the court for the judicial rescission
of the adoption in any of the following cases:
(1) If the adopted has committed any act constituting a
ground for disinheriting a descendant; or
(2) When the adopted has abandoned the home of the
adopters during minority for at least one year, or, by some
other acts, has definitely repudiated the adoption. (41a, P.D.
No. 603)
ISSUE:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________
HELD:
It was months after the effectivity of R.A. No. 8552 that herein petitioner filed an
action to revoke the decree of adoption granted in 1975. By then, the new
law,22 had already abrogated and repealed the right of an adopter under the
Civil Code and the Family Code to rescind a decree of adoption. Consistently
with its earlier pronouncements, the Court should now hold that the action for
rescission of the adoption decree, having been initiated by petitioner after R.A.
No. 8552 had come into force, no longer could be pursued.
Interestingly, even before the passage of the statute, an action to set
aside the adoption is subject to the five-year bar rule under Rule
10023 of the Rules of Court and that the adopter would lose the right to
revoke the adoption decree after the lapse of that period. The exercise
of the right within a prescriptive period is a condition that could not fulfill the
requirements of a vested right entitled to protection. It must also be
acknowledged that a person has no vested right in statutory privileges.24 While
adoption has often been referred to in the context of a "right," the privilege to
adopt is itself not naturally innate or fundamental but rather a right merely
created by statute.25 It is a privilege that is governed by the state's
determination on what it may deem to be for the best interest and welfare of
the child.26 Matters relating to adoption, including the withdrawal of the right of
an adopter to nullify the adoption decree, are subject to regulation by the
State.27 Concomitantly, a right of action given by statute may be taken away at
anytime before it has been exercised.28
While R.A. No. 8552 has unqualifiedly withdrawn from an adopter a
consequential right to rescind the adoption decree even in cases where the
adoption might clearly turn out to be undesirable, it remains, nevertheless, the
bounden duty of the Court to apply the law. Dura lex sed lex would be the
hackneyed truism that those caught in the law have to live with. It is still
noteworthy, however, that an adopter, while barred from severing the legal ties
of adoption, can always for valid reasons cause the forfeiture of certain benefits
otherwise accruing to an undeserving child. For instance, upon the grounds
recognized by law, an adopter may deny to an adopted child his legitime and,
by a will and testament, may freely exclude him from having a share in the
disposable portion of his estate.
JURISDICTION OVER THE SUBJECT MATTER
JUSTINO LARESMA vs. ANTONIO P. ABELLANA G.R. No. 140973
November 11, 2004
On May 24, 1994, respondent Antonio P. Abellana filed a Complaint with the
Regional Trial Court (RTC) of Toledo, Cebu, Branch 29, against petitioner Justino
Laresma, a farmer, for recovery of possession of Lot 4-E of subdivision plan psd.
271428, a parcel of agricultural land located in Tampa-an, Aloguinsan, Cebu.
The lot had an area of 21,223 square meters covered by Transfer Certificate of
Title (TCT) No. 47171. He alleged, inter alia, that since 1985, the petitioner had
been a lessee of a certain Socorro Chiong, whose agricultural land adjoined his
own; and that sometime in 1985, the petitioner, by means of threat, strategy,
and stealth, took possession of his property and deprived him of its
possession.1 The respondent prayed that, after due proceedings, judgment be
rendered in his favor, ordering the petitioner to vacate the property and pay
him actual damages, attorney’s fees, and expenses of litigation.2 Appended to
the complaint was a contract of lease3 executed by the petitioner’s wife,
Praxedes Seguisabal Laresma, on March 1, 1977, over a parcel of land owned by
Socorro Chiong covered by Tax Declaration No. 05561.
The petitioner avers that he and his wife Praxedes became owners of Lot No.
00013 by virtue of CLT No. 0-031817 which was awarded in the latter’s favor. As
such, they are entitled to the possession of the lot. The petitioner contends that
unless and until CLT No. 0-031817 is nullified in a direct action for the said
purpose before the DARAB, they cannot be evicted from the said property. He
posits that the action of the respondent against him in the RTC for recovery of
possession of real property is, in reality, an indirect attack on the CLT issued to
his wife which is proscribed by the ruling of this Court in Miranda v. Court of
Appeals.29 He asserts that the decision of the trial court declaring him in illegal
possession of the property and not a de jure tenant of the respondent operates
as an illegal forfeiture or cancellation of the CLT.
For his part, the respondent asserts that his complaint against the petitioner did
not indirectly assail the CLT issued to the latter’s wife. He contends that his
action was one for the recovery of his possession of a portion of his property Lot
4-E covered by TCT No. 47171, and not that of Lot No. 00013 covered by CLT No.
0-031817 which is a portion of Lot 4-C owned by his aunt Socorro Chiong. He
notes that the petitioner himself admits that he has never been his agricultural
tenant over his property. Consequently, the respondent concludes, the trial
court correctly ruled that the dispute between him and the petitioner is civil in
nature and within its exclusive jurisdiction.
ISSUES:
whether the action of the respondent in the trial court is in reality an
indirect attack on the validity of CLT No. 0-031817 issued to Praxedes
Laresma in the guise of an action for recovery of possession (accion
publiciana) of the property covered by TCT No. 47171; (b) whether the
RTC had jurisdiction over the action of the respondent; and (c) whether
the petitioner is liable for damages in favor of the respondent.
HELD:
We agree with the respondent that the DARAB had no jurisdiction over his action
against the petitioner. The bone of contention of the parties and the decisive
issue in the trial court was whether or not Lot No. 00013 covered by CLT No. 0-
031817 is a portion of Lot 4-E covered by TCT No. 47171 under the name of the
respondent. This is the reason why the parties agreed to have Lot No. 00013
resurveyed in relation to Lot 4-C owned by Socorro Chiong and to Lot 4-E titled
in the name of the respondent. After a calibration of the evidence on record and
the reports of Epan and Navarro, the trial court ruled that Lot No. 00013 formed
part of Lot 4-C owned by Socorro Chiong and not of Lot 4-E titled in the name of
the respondent:
In view of the absence of the above-mentioned indispensable
requisites or any one of them in order to establish the existence of an
agricultural leasehold relationship between plaintiff and defendant, as
earlier mentioned, does not make defendant a de jure tenant under the
Land Reform Program of the government under existing tenancy laws.
[Caballes v. DAR, ibid.].31
The petitioner has not assailed the aforequoted findings of the trial court in the
petition at bar; hence, he is bound by the said findings.
We agree with the ruling of the RTC that, as gleaned from the material
averments of his complaint, the action of the respondent against the petitioner
is not an agrarian dispute within the exclusive jurisdiction of the
DARAB. The well-entrenched principle is that the jurisdiction of the court over
the subject matter of the action is determined by the material allegations of the
complaint and the law, irrespective of whether or not the plaintiff is entitled to
recover all or some of the claims or reliefs sought therein.32 In Movers-Baseco
Integrated Port Services, Inc. v. Cyborg Leasing Corporation,33 we ruled that the
jurisdiction of the court over the nature of the action and the subject matter
thereof cannot be made to depend upon the defenses set up in the court or
upon a motion to dismiss for, otherwise, the question of jurisdiction would
depend almost entirely on the defendant.34 Once jurisdiction is vested, the same
is retained up to the end of the litigation. We also held in Arcelona v. Court of
Appeals35 that, in American jurisprudence, the nullity of a decision arising from
lack of jurisdiction may be determined from the record of the case, not
necessarily from the face of the judgment only.
It must be stressed that the regular court does not lose its jurisdiction over an
ejectment case by the simple expedient of a party raising as a defense therein
the alleged existence of a tenancy relationship between the parties.36 But it is
the duty of the court to receive evidence to determine the allegations of
tenancy.37 If, after hearing, tenancy had, in fact, been shown to be the real
issue, the court should dismiss the case for lack of jurisdiction.38
It is axiomatic that the nature of an action and the jurisdiction of a
tribunal are determined by the material allegations of the complaint
and the law at the time the action was commenced. Jurisdiction of the
tribunal over the subject matter or nature of an action is conferred
only by law and not by the consent or waiver upon a court which,
otherwise, would have no jurisdiction over the subject matter or
nature of an action.39 Lack of jurisdiction of the court over an action or the
subject matter of an action cannot be cured by the silence, acquiescence, or
even by express consent of the parties.40 If the court has no jurisdiction over the
nature of an action, it may dismiss the same ex mero motu or motu proprio. A
decision of the court without jurisdiction is null and void; hence, it could never
logically become final and executory. Such a judgment may be attacked directly
or collaterally.
We agree with the ruling of the trial court that based on the material allegations
of the respondent’s complaint and even on the admission of the petitioner, the
latter had never been an agricultural tenant of the respondent. In fact, the
respondent claimed that based on the CLT issued to his wife, they became the
owner of the property covered therein. As such, the DARAB had no jurisdiction
over the said action.
For DARAB to have jurisdiction over a case, there must exist a
tenancy relationship between the parties. In order for a tenancy
agreement to take hold over a dispute, it would be essential to
establish all its indispensable elements to wit: 1) that the parties are
the landowner and the tenant or agricultural lessee; 2) that the subject
matter of the relationship is an agricultural land; 3) that there is
consent between the parties to the relationship; 4) that the purpose of
the relationship is to bring about agricultural production; 5) that there
is personal cultivation on the part of the tenant or agricultural lessee;
and 6) that the harvest is shared between the landowner and the
tenant or agricultural lessee. In Vda. de Tangub v. Court of Appeals
(191 SCRA 885), we held that the jurisdiction of the Department of
Agrarian Reform is limited to the following: a) adjudication of all
matters involving implementation of agrarian reform; b) resolution of
agrarian conflicts and land tenure-related problems; and c) approval
and disapproval of the conversion, restructuring or readjustment of
agricultural lands into residential, commercial, industrial, and other
non-agricultural uses.
Petitioners and private respondent have no tenurial, leasehold,
or any agrarian relations whatsoever that could have brought
this controversy under the ambit of the agrarian reform laws.
Consequently, the DARAB has no jurisdiction over the
controversy and should not have taken cognizance of private
respondent’s petition for injunction in the first place.42
However, we find and so hold that the RTC had no jurisdiction over the
action of the respondent. In this case, the respondent filed his
complaint against the petitioner on May 24, 1994. Hence, the
jurisdiction of the regular court over the nature of this action is
governed by Republic Act No. 7691, which took effect on April 15,
1994. Section 3 thereof amended Section 33 of Batas Pambansa (B.P.)
Blg. 129, and reads:
Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts
and Municipal Circuit Trial Courts in Civil Cases. – Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall
exercise:
…
(3) Exclusive original jurisdiction in all civil actions which involve title
to, or possession of, real property, or any interest therein where the
assessed value of the property or interest therein does not exceed
Twenty Thousand Pesos (P20,000.00) or, in civil actions in Metro
Manila, where such assessed value does not exceed Fifty Thousand
Pesos (P50,000.00) exclusive of interest, damages of whatever kind,
attorney’s fees, litigation expenses and costs: Provided, That in cases
of land not declared for taxation purposes, the value of such property
shall be determined by the assessed value of the adjacent lots.
On the other hand, Section 1 of the Rule amending Section 19 of B.P. Blg. 129
reads:
SEC. 19. Jurisdiction in civil cases. – Regional Trial Courts shall exercise
exclusive original jurisdictions:
…
(2) In all civil actions which involve the title to, or possession of, real
property, or any interest therein, where the assessed value of the
property involved exceeds Twenty Thousand Pesos (P20,000.00) or for
 civil actions in Metro Manila, where such value exceeds Fifty Thousand
Pesos (P50,000.00) ….
The actions envisaged in the aforequoted provisions are accion publiciana and
reinvindicatoria. To determine which court has jurisdiction over the action, the
complaint must allege the assessed value of the real property subject of the
complaint or the interest thereon. In this case, the complaint of the
respondent against the petitioner for recovery of possession of real
property (accion publiciana) reads:
3. That plaintiff is the owner and possessor of Lot 4-E covered by TCT
No. T-47171 of the Registry of Deeds of the Province of Cebu located at
Tampa-an, Aloguinsan, Cebu;
4. That defendant is the tenant of the land of Socorro P. Chiong, which
adjoins the parcel of land owned by the plaintiff as shown by a
leasehold contract hereto attached as Annex "A" and made an integral
part hereof;
5. That sometime in 1985, by means of threats, strategy, and stealth,
the herein defendant took possession of the parcel of land owned by
herein plaintiff, thus effectively depriving plaintiff of the possession
thereof;
6. That the defendants, while illegally occupying the land of herein
plaintiff, cut trees, and harvested the fruits of said land causing
damages to the plaintiff in the amount of P50,000.00;
7. That despite demand, defendant has refused to vacate said land and
return the possession thereof to herein plaintiff, thus compelling the
plaintiff to file the present action;
8. In filing the present action, the plaintiff engaged the services of
counsel for P10,000.00 and expects to incur expenses of litigation in
the amount of P5,000.00.43
The complaint does not contain any allegation of the assessed value of Lot 4-E
covered by TCT No. 47171. There is, thus, no showing on the face of the
complaint that the RTC had exclusive jurisdiction over the action of the
respondent. Moreover, as gleaned from the receipt of realty tax
payments issued to the respondent, the assessed value of the property
in 1993 was P8,300.00.44 Patently then, the Municipal Trial Court of
Aloguinsan, Cebu, and not the Regional Trial Court of Toledo City, had
exclusive jurisdiction over the action of the respondent.45 Hence, all
the proceedings in the RTC, including its decision, are null and void.
JURISDICTION OVER THE SUBJECT MATTER
INSULAR SAVINGS BANK VS. FAR EAST BANK & TRUST CO. G.R. No. 141818
June 22, 2006
On December 11, 1991, Far East Bank and Trust Company (Respondent) filed a
complaint against Home Bankers Trust and Company (HBTC)4 with the Philippine
Clearing House Corporation’s (PCHC) Arbitration Committee docketed as
Arbicom Case No. 91-069.5 Respondent sought to recover from the petitioner,
the sum of P25,200,000.00 representing the total amount of the three checks
drawn and debited against its clearing account. HBTC sent these checks to
respondent for clearing by operation of the PCHC clearing system. Thereafter,
respondent dishonored the checks for insufficiency of funds and returned the
checks to HBTC. However, the latter refused to accept them since the checks
were returned by respondent after the reglementary regional clearing period.6
Meanwhile, on January 17, 1992, before the termination of the arbitration
proceedings, respondent filed another complaint but this time with the Regional
Trial Court (RTC) in Makati City docketed as Civil Case No. 92-145 for Sum of
Money and Damages with Preliminary Attachment. The complaint was filed not
only against HBTC but also against Robert Young, Eugene Arriesgado and Victor
Tancuan (collectively known as Defendants), who were the president and
depositors of HBTC respectively.7 Aware of the arbitration proceedings between
respondent and petitioner, the RTC, in an Omnibus Order dated April 30,
1992,8 suspended the proceedings in the case against all the defendants
pending the decision of the Arbitration Committee.
Petitioner contends that Civil Case No. 92-145 was merely suspended to await
the outcome of the arbitration case pending before the PCHC. Thus, any petition
questioning the decision of the Arbitration Committee must be filed in Civil Case
No. 92-145 and should not be docketed as a separate action. Likewise,
petitioner avers that had it filed a separate action, "this would have resulted in
a multiplicity of suits, which is abhorred in procedure."
Meanwhile respondent avers that the RTC correctly dismissed the appeal from
the award of private arbitrators since there is no statutory basis for such appeal.
Respondent argues that petitioner’s claim that the parties by agreement had
conferred on the RTC appellate jurisdiction over decisions of private arbitrators
is erroneous because they cannot confer a non-existent jurisdiction on the RTC
or any court. Furthermore, the petition for review filed by petitioner violated the
rule on commencing an original action under Section 5, Rule 1, and the raffle of
cases under Section 2, Rule 20 of the Rules of Court, when it filed the same in
Branch 135 of the RTC of Makati where there was already a pending original
action, i.e., Civil Case No. 92-145.
The petition lacks merit.
The Philippine Clearing House Corporation was created to facilitate the clearing
of checks of member banks. Among these member banks exists
a compromissoire,25 or an arbitration agreement embedded in their contract
wherein they consent that any future dispute or controversy between its PCHC
participants involving any check would be submitted to the Arbitration
Committee for arbitration. Petitioner and respondent are members of PCHC,
thus they underwent arbitration proceedings.
The PCHC has its own Rules of Procedure for Arbitration (PCHC Rules). However,
this is governed by Republic Act No. 876, also known as The Arbitration
Law26 and supplemented by the Rules of Court.27 Thus, we first thresh out the
remedy of petition for review availed of by the petitioner to appeal the order of
the Arbitration Committee.
Sections 23, 24 and 29 of The Arbitration Law, and Section 13 of the PCHC
Rules, provide:
SEC. 23. Confirmation of award. – At any time within one month after the award
is made, any party to the controversy which was arbitrated may apply to the
court having jurisdiction, as provided in Section 28, for an order
confirming the award; and thereupon the court must grant such order
unless the award is vacated, modified or corrected, as prescribed
herein. Notice of such motion must be served upon the adverse party or his
attorney as prescribed by law for the service of such notice upon an attorney in
action in the same court.
SEC. 24. Grounds for vacating award. – In any one of the following cases, the
court must make an order vacating the award upon the petition of any party to
the controversy when such party proves affirmatively that in the arbitration
proceedings:
(a) The award was procured by corruption, fraud or other undue
means; or
(b) That there was evident partiality or corruption in the arbitrators or
any of them; or
(c) That the arbitrators were guilty of misconduct in refusing to
postpone the hearing upon sufficient cause shown, or in refusing to
hear evidence pertinent and material to the controversy; that one or
more of the arbitrators was disqualified to act as such under section
nine hereof, and willfully refrained from disclosing such disqualification
or of any other misbehavior by which the rights of any party have been
materially prejudiced; or
(d) That the arbitrators exceeded their powers, or so imperfectly
executed them, that a mutual, final and definite award upon the
subject matter submitted to them was not made.
xxxx
SEC. 25. Grounds for modifying or correcting award. – In any one of the
following cases, the court must make an order modifying or correcting the
award, upon the application of any party to the controversy which was
arbitrated:
(a) Where there was an evident miscalculation of figures, or an evident
mistake in the description of any person, thing or property referred to
in the award; or
(b) Where the arbitrators have awarded upon a matter not submitted
to them, not affecting the merits of the decision upon the matter
submitted; or
(c) Where the award is imperfect in a matter of form not affecting the
merits of the controversy, and if it had been a commissioner’s report,
the defect could have been amended or disregarded by the court.
The order may modify and correct the award so as to effect the intent thereof
and promote justice between the parties.
SEC. 29. Appeals. – An appeal may be taken from an order made in a
proceeding under this Act, or from judgment entered upon an award through
certiorari proceedings, but such appeals shall be limited to questions of law.
The proceedings upon such an appeal, including the judgment thereon shall be
governed by the Rules of Court insofar as they are applicable.
AMENDED ARBITRATION RULES OF PROCEDURE OF PCHC
Sec. 13. – The findings of facts of the decision or award rendered by the
Arbitration Committee or by the sole Arbitrator as the case may be
shall be final and conclusive upon all the parties in said arbitration
dispute. The decision or award of the Arbitration Committee or of the Sole
Arbitrator or of the Board of Directors, as the case may be, shall be appealable
only on questions of law to any of the Regional Trial Courts in the
National Capital Region where the Head Office of any of the parties is
located. The appellant shall perfect his appeal by filing a notice of appeal to
the Arbitration Secretariat and filing a Petition with the Regional Trial Court of
the National Capital Region for the review of the decision or award of the
committee or sole arbitrator or of the Board of Directors, as the case may be,
within a non-extendible period of fifteen (15) days from and after its receipt of
the order denying or granting said motion for reconsideration or new trial had
been filed, within a non-extendible period of fifteen (15) days from and after its
receipt of the order denying or granting said motion for reconsideration or of the
decision rendered after the new trial if one had been granted.
x x x x. (Emphasis supplied)
As provided in the PCHC Rules, the findings of facts of the decision or award
rendered by the Arbitration Committee shall be final and conclusive upon all the
parties in said arbitration dispute.28 Under Article 204429 of the New Civil Code,
the validity of any stipulation on the finality of the arbitrators’ award or decision
is recognized. However, where the conditions described in Articles
2038,30 203931 and 204032 applicable to both compromises and arbitrations are
obtaining, the arbitrators’ award may be annulled or rescinded.33 Consequently,
the decision of the Arbitration Committee is subject to judicial review.
Furthermore, petitioner had several judicial remedies available at its disposal
after the Arbitration Committee denied its Motion for Reconsideration. It may
petition the proper RTC to issue an order vacating the award on the grounds
provided for under Section 24 of the Arbitration Law.34 Petitioner likewise has proceedings are mainly governed by the Arbitration Law and suppletorily by the
the option to file a petition for review under Rule 43 of the Rules of Court with Rules of Court.
the Court of Appeals on questions of fact, of law, or mixed questions of fact and WHEREFORE, in light of the foregoing, the petition is DENIED. The November 9,
law.35 Lastly, petitioner may file a petition for certiorari under Rule 65 of the 1999 Order of the Regional Trial Court of Makati City, Branch 135, in Civil Case
Rules of Court on the ground that the Arbitrator Committee acted without or in No. 92-145 which dismissed the petition for review for lack of jurisdiction and
excess of its jurisdiction or with grave abuse of discretion amounting to lack or the February 1, 2000 Order denying its reconsideration, are AFFIRMED.
excess of jurisdiction. Since this case involves acts or omissions of a quasi-
judicial agency, the petition should be filed in and cognizable only by the Court SO ORDERED.
of Appeals.36
In this instance, petitioner did not avail of any of the abovementioned remedies
available to it. Instead it filed a petition for review with the RTC where Civil Case
No. 92-145 is pending pursuant to Section 13 of the PCHC Rules to sustain its
action. Clearly, it erred in the procedure it chose for judicial review of the
arbitral award.
Having established that petitioner failed to avail of the abovementioned
remedies, we now discuss the issue of the jurisdiction of the trial court with
respect to the petition for review filed by petitioner.
Jurisdiction is the authority to hear and determine a cause - the right to act in a
case.37 Jurisdiction over the subject matter is the power to hear and determine
the general class to which the proceedings in question belong. Jurisdiction over
the subject matter is conferred by law and not by the consent or acquiescence
of any or all of the parties or by erroneous belief of the court that it exists.38
In the instant case, petitioner and respondent have agreed that the PCHC Rules
would govern in case of controversy. However, since the PCHC Rules came
about only as a result of an agreement between and among member banks of
PCHC and not by law, it cannot confer jurisdiction to the RTC. Thus, the portion
of the PCHC Rules granting jurisdiction to the RTC to review arbitral awards, only
on questions of law, cannot be given effect.
Consequently, the proper recourse of petitioner from the denial of its motion for JURISDICTION OVER THE SUBJECT MATTER
reconsideration by the Arbitration Committee is to file either a motion to vacate
the arbitral award with the RTC, a petition for review with the Court of Appeals LUISA KHO MONTAÑER, ALEJANDRO MONTAÑER, JR., LILLIBETH
under Rule 43 of the Rules of Court, or a petition for certiorari under Rule 65 of MONTAÑER-BARRIOS, AND RHODORA ELEANOR MONTAÑER-
the Rules of Court. In the case at bar, petitioner filed a petition for review with DALUPAN, Petitioners, vs.
the RTC when the same should have been filed with the Court of Appeals under SHARI'A DISTRICT COURT, FOURTH SHARI'A JUDICIAL DISTRICT, MARAWI
Rule 43 of the Rules of Court. Thus, the RTC of Makati did not err in dismissing CITY, LILING DISANGCOPAN, AND ALMAHLEEN LILING S.
the petition for review for lack of jurisdiction but not on the ground that MONTAÑER, Respondents.
petitioner should have filed a separate case from Civil Case No. 92-145 but on G.R. No. 174975 January 20, 2009
the necessity of filing the correct petition in the proper court. It is immaterial On August 17, 1956, petitioner Luisa Kho Montañer, a Roman Catholic, married
whether petitioner filed the petition for review in Civil Case No. 92-145 as an Alejandro Montañer, Sr. at the Immaculate Conception Parish in Cubao, Quezon
appeal of the arbitral award or whether it filed a separate case in the RTC, City.3 Petitioners Alejandro Montañer, Jr., Lillibeth Montañer-Barrios, and Rhodora
considering that the RTC will only have jurisdiction over an arbitral award in Eleanor Montañer-Dalupan are their children.4 On May 26, 1995, Alejandro
cases of motions to vacate the same. Otherwise, as elucidated herein, the Court Montañer, Sr. died.5
of Appeals retains jurisdiction in petitions for review or in petitions for certiorari. On August 19, 2005, private respondents Liling Disangcopan and her daughter,
Consequently, petitioner’s arguments, with respect to the filing of separate Almahleen Liling S. Montañer, both Muslims, filed a "Complaint" for the judicial
action from Civil Case No. 92-145 resulting in a multiplicity of suits, cannot be partition of properties before the Shari’a District Court.6 The said complaint was
given due course. entitled "Almahleen Liling S. Montañer and Liling M. Disangcopan v. the Estates
Alternative dispute resolution methods or ADRs – like arbitration, mediation, and Properties of Late Alejandro Montañer, Sr., Luisa Kho Montañer, Lillibeth K.
negotiation and conciliation – are encouraged by the Supreme Court. By Montañer, Alejandro Kho Montañer, Jr., and Rhodora Eleanor K. Montañer," and
enabling parties to resolve their disputes amicably, they provide solutions that docketed as "Special Civil Action No. 7-05."7 In the said complaint, private
are less time-consuming, less tedious, less confrontational, and more productive respondents made the following allegations: (1) in May 1995, Alejandro
of goodwill and lasting relationships.39 It must be borne in mind that arbitration Montañer, Sr. died; (2) the late Alejandro Montañer, Sr. is a Muslim; (3)
petitioners are the first family of the decedent; (4) Liling Disangcopan is the the decedent, which are the very properties sought to be settled before a
widow of the decedent; (5) Almahleen Liling S. Montañer is the daughter of the probate court. Furthermore, the reliefs prayed for reveal that it is the intention
decedent; and (6) the estimated value of and a list of the properties comprising of the private respondents to seek judicial settlement of the estate of the
the estate of the decedent.8 Private respondents prayed for the Shari’a District decedent.24 These include the following: (1) the prayer for the partition of the
Court to order, among others, the following: (1) the partition of the estate of the estate of the decedent; and (2) the prayer for the appointment of an
decedent; and (2) the appointment of an administrator for the estate of the administrator of the said estate.
decedent.9 We cannot agree with the contention of the petitioners that the district court
Petitioners filed an Answer with a Motion to Dismiss mainly on the following does not have jurisdiction over the case because of an allegation in their answer
grounds: (1) the Shari’a District Court has no jurisdiction over the estate of the with a motion to dismiss that Montañer, Sr. is not a Muslim. Jurisdiction of a
late Alejandro Montañer, Sr., because he was a Roman Catholic; (2) private court over the nature of the action and its subject matter does not depend upon
respondents failed to pay the correct amount of docket fees; and (3) private the defenses set forth in an answer25 or a motion to dismiss.26 Otherwise,
respondents’ complaint is barred by prescription, as it seeks to establish filiation jurisdiction would depend almost entirely on the defendant27 or result in having
between Almahleen Liling S. Montañer and the decedent, pursuant to Article "a case either thrown out of court or its proceedings unduly delayed by simple
175 of the Family Code. stratagem.28 Indeed, the "defense of lack of jurisdiction which is dependent on a
n their Comment to the Petition for Certiorari, private respondents stress that question of fact does not render the court to lose or be deprived of its
the Shari’a District Court must be given the opportunity to hear and decide the jurisdiction."29
question of whether the decedent is a Muslim in order to determine whether it The same rationale applies to an answer with a motion to dismiss.30 In the case
has jurisdiction.20 at bar, the Shari’a District Court is not deprived of jurisdiction simply because
Jurisdiction: Settlement of the Estate of Deceased Muslims petitioners raised as a defense the allegation that the deceased is not a Muslim.
Petitioners’ first argument, regarding the Shari’a District Court’s jurisdiction, is The Shari’a District Court has the authority to hear and receive evidence to
dependent on a question of fact, whether the late Alejandro Montañer, Sr. is a determine whether it has jurisdiction, which requires an a priori determination
Muslim. Inherent in this argument is the premise that there has already been a that the deceased is a Muslim. If after hearing, the Shari’a District Court
determination resolving such a question of fact. It bears emphasis, however, determines that the deceased was not in fact a Muslim, the district court should
that the assailed orders did not determine whether the decedent is a Muslim. dismiss the case for lack of jurisdiction.
The assailed orders did, however, set a hearing for the purpose of resolving this
issue.
Article 143(b) of Presidential Decree No. 1083, otherwise known as the Code of
Muslim Personal Laws of the Philippines, provides that the Shari’a District Courts
have exclusive original jurisdiction over the settlement of the estate of
deceased Muslims:
ARTICLE 143. Original jurisdiction. — (1) The Shari'a District Court shall have
exclusive original jurisdiction over:
xxxx
(b) All cases involving disposition, distribution and settlement of the estate of
deceased Muslims, probate of wills, issuance of letters of administration or
appointment of administrators or executors regardless of the nature or the
aggregate value of the property.
The determination of the nature of an action or proceeding is controlled by the
averments and character of the relief sought in the complaint or petition.21 The
designation given by parties to their own pleadings does not necessarily bind
the courts to treat it according to the said designation. Rather than rely on
"a falsa descriptio or defective caption," courts are "guided by the substantive
JURISDICTION OVER THE SUBJECT MATTER
averments of the pleadings."22
Although private respondents designated the pleading filed before the Shari’a
ATTY. RESTITUTO G. CUDIAMAT, ERLINDA P. CUDIAMAT1 and CORAZON D.
District Court as a "Complaint" for judicial partition of properties, it is a petition
CUDIAMAT, Petitioners, vs.
for the issuance of letters of administration, settlement, and distribution of the
BATANGAS SAVINGS AND LOAN BANK, INC., and THE REGISTER OF DEEDS,
estate of the decedent. It contains sufficient jurisdictional facts required for the
NASUGBU, BATANGAS,Respondents G.R. No. 160892, November 22, 2005
settlement of the estate of a deceased Muslim,23 such as the fact of Alejandro
Montañer, Sr.’s death as well as the allegation that he is a Muslim. The said
petition also contains an enumeration of the names of his legal heirs, so far as Petitioner Atty. Restituto Cudiamat and his brother Perfecto were the registered
known to the private respondents, and a probable list of the properties left by co-owners of a 320 square meter parcel of land (the property) in Balayan,
Batangas, covered by TCT No. T-37889 of the Register of Deeds of Nasugbu,
Batangas. Restituto, who resided in Ozamiz City with his wife, entrusted the
custody of the title to who was residing in Balayan.
In 1979, Perfecto, without the knowledge and consent of Restituto, obtained a
loan from respondent Batangas Savings and Loan Bank, Inc. (the bank). To
secure the payment of the loan, Perfecto mortgaged the property for the
purpose of which he presented a Special Power of Attorney (SPA) purportedly
executed by Restituto, with the marital consent of his wife-herein co-petitioner
Erlinda Cudiamat.
On June 19, 1991, Restituto was informed, via letter2 dated June 7, 1991 from
the bank, that the property was foreclosed. He thus, by letter3 dated June 25,
1991, informed the bank that he had no participation in the execution of the
mortgage and that he never authorized Perfecto for the purpose.
In the meantime, Perfecto died in 1990. In 1998, as Perfecto’s widow petitioner
Corazon was being evicted from the property, she and her co-petitioner-spouses
Restituto and Erlinda filed on August 9, 1999 before the Regional Trial Court
(RTC) of Balayan a complaint4 "for quieting of title with damages" against the
bank and the Register of Deeds of Nasugbu, docketed as Civil Case No. 3618,
assailing the mortgage as being null and void as they did not authorize the
encumbrance of the property.
In its Answer to the complaint, the bank, maintaining the validity of the
mortgage, alleged that it had in fact secured a title in its name, TCT No. T-
48405, after Perfecto failed to redeem the mortgage; that the Balayan RTC had
no jurisdiction over the case as the bank had been placed under receivership
and under liquidation by the Philippine Deposit Insurance Corporation (PDIC);
that PDIC filed before the RTC of Nasugbu a petition for assistance in the
liquidation of the bank which was docketed as SP No. 576; and that jurisdiction
to adjudicate disputed claims against it is lodged with the liquidation court-RTC
Nasugbu.
By Decision of January 17, 2006,5 Branch 9 of the Balayan RTC rendered
judgment, in the complaint for quieting of title, in favor of the plaintiffs-herein
petitioners. It ordered respondent Register of Deeds of Nasugbu to cancel the
encumbrance annotated on TCT No. T-37889, and to cancel TCT No. T-48405
issued in the name of the bank and reinstate the former title. It also directed the
bank to return the property to petitioner spouses Restituto and Erlinda and to
pay P20,000 to all the petitioners to defray the costs of suit.
The bank appealed to the Court of Appeals, contending, inter alia, that the
Balayan RTC had no jurisdiction over petitioners’ complaint for quieting of title.
By the assailed Decision of December 21, 2007,6 the appellate court, ruling in
favor of the bank, dismissed petitioners’ complaint for quieting of title, without
prejudice to the right of petitioners to take up their claims with the Nasugbu RTC
sitting as a liquidation court.
To the appellate court, the Balayan RTC, as a court of general jurisdiction,
should have deferred to the Nasugbu RTC which sits as a liquidation court, given
that the bank was already under receivership when petitioners filed the
complaint for quieting of title.
Petitioners’ Motion for Reconsideration having been denied by the appellate
court by Resolution of March 27, 2008, they filed the present petition for review
on certiorari.1avvphi1
Assailing the appellate court’s ruling that the Balayan RTC had no jurisdiction
over their complaint, petitioners argue that their complaint was filed earlier
than PDIC’s petition for assistance in the liquidation; and that the bank is now
estopped from questioning the jurisdiction of the Balayan RTC because it
actively participated in the proceedings thereat.
The petition is impressed with merit.
Estoppel bars the bank from raising the issue of lack of jurisdiction of the
Balayan RTC.
In Lozon v. NLRC,7 the Court came up with a clear rule on when jurisdiction by
estoppel applies and when it does not:
The operation of estoppel on the question of jurisdiction seemingly depends on
whether the lower court actually had jurisdiction or not. If it had no
jurisdiction, but the case was tried and decided upon the theory that it had
jurisdiction, the parties are not barred, on appeal, from assailing such
jurisdiction, for the same "must exist as a matter of law, and may not be
conferred by the consent of the parties or by estoppel." However, if the lower
court had jurisdiction, and the case was heard and decided upon a given theory,
such, for instance, as that the court had no jurisdiction, the party who induced it
to adopt such theory will not be permitted, on appeal, to assume an
inconsistent position – that the lower court had jurisdiction… (underscoring
supplied)
The ruling was echoed in Metromedia Times Corporation v. Pastorin.8
In the present case, the Balayan RTC, sitting as a court of general jurisdiction,
had jurisdiction over the complaint for quieting of title filed by petitioners on
August 9, 1999. The Nasugbu RTC, as a liquidation court, assumed jurisdiction
over the claims against the bank only on May 25, 2000, when PDIC’s petition for
assistance in the liquidation was raffled thereat and given due course.
While it is well-settled that lack of jurisdiction on the subject matter can be
raised at any time and is not lost by estoppel by laches, the present case is
an exception. To compel petitioners to re-file and relitigate their claims before
the Nasugbu RTC when the parties had already been given the opportunity to
present their respective evidence in a full-blown trial before the Balayan RTC
which had, in fact, decided petitioners’ complaint (about two years before the
appellate court rendered the assailed decision) would be an exercise in futility
and would unjustly burden petitioners.
The Court, in Valenzuela v. Court of Appeals,9 held that as a general rule, if there
is a judicial liquidation of an insolvent bank, all claims against the bank should
be filed in the liquidation proceeding. The Court in Valenzuela, however, after
considering the circumstances attendant to the case, held that the general rule
should not be applied if to order the aggrieved party to refile or relitigate its
case before the litigation court would be "an exercise in futility." Among the
circumstances the Court considered in that case is the fact that the claimants
were poor and the disputed parcel of land was their only property, and the
parties’ claims and defenses were properly ventilated in and considered by the
judicial court.
In the present case, the Court finds that analogous considerations exist to
warrant the application of Valenzuela. Petitioner Restituto was 78 years old at
the time the petition was filed in this Court, and his co-petitioner-wife Erlinda
died10 during the pendency of the case. And, except for co-petitioner Corazon,
Restituto is a resident of Ozamis City. To compel him to appear and relitigate the
case in the liquidation court-Nasugbu RTC when the issues to be raised before it
are the same as those already exhaustively passed upon and decided by the
Balayan RTC would be superfluous.
WHEREFORE, the petition is GRANTED. The Decision of December 21, 2007
and Resolution dated March 27, 2008 of the Court of Appeals are SET ASIDE.
The Decision dated January 17, 2006 of the Regional Trial Court of Balayan,
Batangas, Branch 9 is REINSTATED.
SO ORDERED.
JURISDICTION : OVER PERSON OF PARTIES