Republic Central Colleges 1

College of Business and Accountancy

G.R. No. 212690 SPOUSES ROMEO PAJARES and IDA T.

PAJARES vs. REMARKABLE LAUNDRY AND DRY CLEANING,

represented by ARCHEMEDES G. SOLIS

Leader:
Ainah Marielle F. Peco

Members:

Bano, Shiori B.

Bondoc, Jerald D.

Chuidian, Shawn Philip A.

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College of Business and Accountancy
G.R. No. 212690 SPOUSES ROMEO PAJARES and IDA T. PAJARES vs.

REMARKABLE LAUNDRY AND DRY CLEANING, represented by

ARCHEMEDES G. SOLIS

A. Facts

On September 3, 2012, Remarkable Laundry and Dry Cleaning

(respondent) filed a Complaint denominated as "Breach of Contract and

Damages" against spouses Romeo and Ida Pajares (petitioners) before

the RTC of Cebu City, which was docketed as Civil Case No. CEB-

39025 and assigned to Branch 17 of said court. Respondent alleged

that it entered into a Remarkable Dealer Outlet Contract with petitioners

whereby the latter, acting as a dealer outlet, shall accept and receive

items or materials for laundry which are then picked up and processed

by the former in its main plant or laundry outlet; that petitioners violated

Article IV (Standard Required Quota & Penalties) of said contract,

which required them to produce at least 200 kilos of laundry items each

week, when, on April 30, 2012, they ceased dealer outlet operations on

account of lack of personnel; that respondent made written demands

upon petitioners for the payment of penalties imposed and provided for

in the contract, but the latter failed to pay; and, that petitioners' violation

constitutes breach of contract. Respondent thus prayed, as follows:

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College of Business and Accountancy
WHEREFORE, premises considered, by reason of the above-

mentioned breach of the subject dealer contract agreement made by

the defendant, it is most respectfully prayed of the Honorable Court to

order the said defendant to pay the following incidental and

consequential damages to the plaintiff, to wit:

a) TWO HUNDRED THOUSAND PESOS (PHP200,000.00) plus legal

interest as incidental and consequential [sic] for violating Articles IV and

XVI of the Remarkable Laundry Dealer Contract dated 08 September

2011.

b) Thirty Thousand Pesos (₱30,000.00) as legal expenses.

c) Thirty Thousand Pesos (₱30,000.00) as exemplary damages.

d) Twenty Thousand Pesos (₱20,000.00) as cost of suit.

e) Such other reliefs that the Honorable Court deems as just and

equitable. (Italics in the original)

Petitioners submitted their Answer, to which respondent filed its Reply.

During pre-trial, the issue of jurisdiction was raised, and the parties

were required to submit their respective position papers.

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College of Business and Accountancy
Elements of Obligation:

Active Subject: Plaintiff Remarkable Laundry and Dry Cleaning

Services, is a sole proprietorship business owned by Archemedes Solis

with principal office address at PREDECO CMPD AS-Ostechi Bldg.

Banilad, Heman Cortes St., Mandaue City.

Passive Subject : Defendant or the Debtor Ida Pajares is of

legal age, Filipino, married with address at Hermag Village, Basak

Mandaue City where she can be served with summons and other

processes of the Honorable Court.

Juridical or legal tie: On 08 SEP 2011, parties entered and

signed a Remarkable Laundry Dealer Outlet Contract for the processing

of laundry materials, plaintiff being the owner of Remarkable Laundry

and the defendant being the authorized dealer of the said business.

Prestation: Under the contract, the debtors, spouses Romeo

Pajares and Ida T. Pajares, was required to produce at least 200 kilos

of laundry items each week.

1. Nature of obligation – Personal obligation or obligation to do is that in

which the subject is an act to be done.

2. Kind of obligation - Obligation with a penal clause is one which

contains an accessory undertaking to pay a previously stipulated

indemnity in case of breach of the principal prestation, intended

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College of Business and Accountancy
primarily to induce its fulfillment. Under the contract an obligation of

penal clause, it requires them to produce at least 200 kilos of laundry

items each week, which the debtor failed to do, due to lack of

personnel, and they failed to comply in penalty imposed and provided in

the contract.

B. Issues

In a June 29, 2015 Resolution,19 this Court resolved to give due

course to the Petition, which claims that the CA erred in declaring that

the RTC had jurisdiction over respondent's Complaint which, although

denominated as one for breach of contract, is essentially one for simple

payment of damages.

Articles Violated:

Article 1159 – Obligations arising from contracts have the force of law

between the contracting parties and should be complied with in good

faith. Both parties, spouses Romeo Pajares and Ida T. Pajares and

Remarkable Laundry and Dry cleaning, entered into agreement in the

form of contract with the non compliance of the debtors resulting into a

breach of contract with corresponding interests, damages including

penalties assigned by the court.

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College of Business and Accountancy
Article 1170 - Those who in the performance of their obligations are

guilty of fraud, negligence, or delay, and those who in any manner

contravene the tenor thereof are liable for damages.

In contracts and quasi-contracts, the damages for which the

obligor who acted in good faith is liable shall be those that are the

natural and probable consequences of the breach of obligation and

which the parties have foreseen or could have reasonably foreseen at

the time obligation was constituted.

In case of fraud, bad faith, malice or wanton attitude, the obligor

shall be responsible for all damages which may be reasonably

attributed to the non-performance of the obligation.

C. Decision by the court

On February 19, 2013, the RTC issued an Order dismissing Civil

Case No.CEB-39025 for lack of jurisdiction.

In the instant case, the plaintiffs complaint is for the recovery of

damages for the alleged breach of contract. The complaint sought the

award of ₱200,000.00 as incidental and consequential damages; the

amount of ₱30,000.00 as legal expenses; the amount of ₱30,000.00 as

exemplary damages; and the amount of ₱20,000.00 as cost of the suit, or

for the total amount of ₱280,000.00 as damages.

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College of Business and Accountancy
Under the provisions of Batas Pambansa Blg. 129 as amended by

Republic Act No. 7691, the amount of demand or claim in the complaint for

the Regional Trial Courts (RTCs) to exercise exclusive original jurisdiction

shall exceed ₱300,000.00; otherwise, the action shall fall under the

jurisdiction of the Municipal Trial Courts. In this case, the total amount of

demand in the complaint is only ₱280,000.00, which is less than the

jurisdictional amount of the RTCs. Hence, this Court (RTC) has no

jurisdiction over the instant case.

Wherefore, premises considered, the instant case is hereby dismissed

for lack of jurisdiction.

Respondent filed its Motion for Reconsideration, arguing that as

Civil Case No. CEB-39025 is for breach of contract, or one whose subject

is incapable of pecuniary estimation, jurisdiction thus falls with the RTC.

However, in an April 29, 2013 Order, the RTC held its ground.

C2. Comments/ Opinion on the Decision

C2-1. Group Leader – Ainah Marielle F. Peco

I and my group mates a greed in the decision of the Respondent

and the court. As a leader in this group I was satisfied with what they

said about this case study. The “SPOUSES ROMEO PAJARES AND

IDA T. PAJARES vs. Remarkable Laundry AND Dry Cleaning. We had

to admit that it`s not easy to do a case study at first but if you work as a
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College of Business and Accountancy
group it make it easier, And if I will sum up their opinions regarding our

case, it shows that we all agreed about the decisions of the court. In thi

case, the Spouses and the Petitioners failed to comply with their

contract with the respondent. Which was that the Remarkable Laundry

and Dry Cleaning and Remarkable Dealer Outlet Contract. The

respondent made written requests to petitioners for payment of

penalties, but failed to pay. Breach of the decision makers leads to

breach of contract. The Regional Trial Court (RTC) issued an order

dismissing Civil Case No. CEBB 39025 due to lack of jurisdiction. The

plaintiff`s complaint was for recovery the damages for alleged breach of

contract, 280,000.00 was the total amount of damages, which is below

the amount of provisions of Natural Law No. 129 as amended by

Republic Act No. 7691 that it must exceed 300,000.00 or otherwise it

fall under the jurisdiction of the Municipal Trial Court. This makes the

RTC unconstitutional, resulting in the dismissal of the case.

Respondent now contends that Civil Case No. CEB-39025 is for breach

of contract, thus filing a Motion for Reconsideration, and the RTC took

action. Nevertheless, we can still say that the Respondent has the right

to file a lawsuit for the Spouses for breach of contract, because the

contract must be followed and otherwise you will be given the penalty

you must need to pay and right to claim for the damages to the

Petitioners, even lack of jurisdiction. However, Justice should serve and

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College of Business and Accountancy
no on should unjustly enriched or benefited at the expense of others.

Lastly, can say that our group did comply on the tasked that was given

to them and we all did great!

C.2.2 Members – Shiori Bano

In the case of Remarkable Laundry & Dry Cleaning against the

spouses Romeo and Ida Pajares, the spouses or the petitioners failed

to comply in their contract with the respondent, which was the

Remarkable Laundry & Dry Cleaning which was the “Remarkable

Dealer Outlet Contract”. Included in the contract was the requirement to

produce 200 kilos of laundry items every week, which was not attained

by the petitioners, cause by the lack of personnel. The respondent then

made written demands to the petitioners for the payment of penalties,

but were failed to pay. Petitioners violation now leads to breach of

contract. Regional Trial Court (RTC) then issued an order to dismiss the

Civil Case No. CEBB-39025 for the lack of jurisdiction.

The reason is that the plaintiff complaint is for the recovery of

damages for the supposed breach of contract. The total amount of

damages is 280,000.00, which was below the amount of the provisions

of Batas Pambansa Blg. 129 as amended by Republic Act No. 7691

that it should exceed 300,000.00, or else it will fall under the jurisdiction

of the Municipal Trial Court. This makes the RTC have no jurisdiction,

resulting to the dismissal of the case. The respondent argues now that
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College of Business and Accountancy
the Civil Case No. CEB-39025 is for breach of contract, thus filing

Motion for Reconsideration. On April 29, 2013, RTC held its ground.

The Remarkable Laundry & Dry Cleaning was correct for filing

the case for breach of contract, it’s because when it comes to contract,

it should be comply and if not, payment for penalty is a must. But if

neither of the two was not done, then it wil constitute to the breach of

contract. It was just that the RTC dismissed the case is that the total of

damages was below the jurisdiction amount of the RTC. Therefore the

creation of Petition which was granted and the decision on December

11, 2013 and March 19 2014 Resolution of the Court of Appeals are

reversed and set aside. The dismissed Civil Case No. CEB-39025 is

reinstated. Justice should be serve and no one should unjustly benefit

at the expense of the other.

C.2.3 Members – Shawn Philip A. Chuidian

In the recent case of Spouses Pajares v. Remarkable Laundry &

Dry Cleaning, G.R. No. 212690. A cause for breach of contract for

rescission or specific performance is incapable of pecuniary estimation

regardless of the amount involved which is exclusively cognizable by

the Regional Trial Court. If the cause of action for breach of contract is

to recover damages, it is an ordinary action capable of pecuniary

estimation and jurisdiction is determined by the amount of damages

claimed. The RTC of Cebu was held bereaved of jurisdiction because

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College of Business and Accountancy
the amount claimed as damages is less than 300.000.00, which

exclusively falls under the jurisdiction of the Municipal Trial Court.

The Remarkable Laundry and Dry Cleaning filed a Complaint as

“Breach of Contract and Damages” contrary to the Spouses Romeo and

Ida Pajares, which the petitioners entered to a “Remarkable Dealer

Outlet Contract” which requires them to have at least 200 kilos of

laundry items per week, which they have failed, immediately stopped

the operation which is unlawful act. Seemingly in contract for which you

cannot cease the operation and either the contract. Now the

Respondents wants to get the penalty which is imposed to the contract,

still the latter failed to comply. Then the estimation occurs, the

Respondents responds with the total amount of 280,000 as damages,

but since the Regional Trial Court (RTC) dismissed the case due to the

lack of jurisdictional amount, hence no jurisdiction to RTC.

I can still say the Respondent has the right to claim for the

damages to the Petitioners, even lack of jurisdiction, but it falls to the

municipal trial court. Yes if the subject matter is incapable of pecuniary

estimation, then the jurisdiction will fall to RTC, but in the case of

damages the jurisdiction depends upon the total amount of the

damages claimed, for which the RTC required amount for damages of

300,000 or more. The Court uphold the decision was correct in refusing
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College of Business and Accountancy
to take notice of the case since it was lower than the expected claim for

damages.

C.2.4 Members – Jerald D. Bondoc

In my opinion, I can say that Remarkable Laundry and Dry

Cleaning, the respondents, have the right to file a complaint against

Romeo and Ida Perjures, the petitioners. They constitutes a serious

breach to the contract because they totally and grossly disregarded the

Remarkable Laundry Dealer Outlet Contract which it results to failure

on its part in obtaining the minimum purchase or delivery of 200 kilos

per week for the entire duration of its cessation of operations.

It was clearly stated in given information that they had entered

into a Remarkable Dealer Outlet Contract whereby the the respondents

are the one acting as a dealer outlet and shall accept and receive items

for laundry while the petitioners are the one who picked up and

processed the item into their main plant or laundry outlet. In this

situation I can say that respondents did the right thing to demand a

payment for the damages and legal interest such as incidental and

consequential damages to the petitioners.

It is supported by Article 1170 and 2226 stating that those who in

in the performance of their obligations are guilty of fraud, negligence or

delay and those who in manner contravene the tenor thereof are liable
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College of Business and Accountancy
for damages. Also in the first place, once you entered in an agreement

or contract with other people, you can not immediately cease or stop

it ,especially if the contract is related to business and if it’s still ongoing

operation, unless if the reason of rescision is acceptable and in good

faith.

When it comes to the decision of Court of Appeals, I can say that

Regional Trial Court should be the one to handle this case because it is

a breach of contract and its subject is incapable of pecuniary estimation

and the damages prayed for therein are merely incidental thereto. That

is why this case falls within the jurisdiction of the RTC. The decision of

the court should be fair on both parties so that no one is justly enriched

or benefited.