JURISDICTION cases set 5 1

JUAN B. BANEZ, JR., Petitioner, vs. HON. CRISANTO C. CONCEPCION, IN HIS CAPACITY AS THE PRESIDING JUDGE
OF THE RTC-BULACAN, MALOLOS CITY, AND THE ESTATE OF THE LATE RODRIGO GOMEZ, REPRESENTED BY ITS
ADMINISTRATRIX, TSUI YUK YING, Respondents.
G.R. No. 159508 | 2012-08-29
FIRST DIVISION

DECISION

BERSAMIN, J.:

The petitioner has directly come to the Court via petition for certiorari1 filed on September 4, 2003 to assail the
orders dated March 24, 2003 (reversing an earlier order issued on February 18, 2003 granting his motion to dismiss
on the ground of the action being already barred by prescription, and reinstating the action),2 April 21, 2003 (denying
his motion for reconsideration),3and August 19, 2003 (denying his second motion for reconsideration and ordering
him to file his answer within 10 days from notice despite the principal defendant not having been yet validly served
with summons and copy of the complaint),4 all issued by the Regional Trial Court (RTC), Branch 12, in Malolos City
in Civil Case No. 722-M-2002,5 an action for the recovery of ownership and possession. He alleges that respondent
Presiding Judge thereby acted with grave abuse of discretion amounting to lack or excess of jurisdiction.

Antecedents

The present controversy started almost four decades ago when Leodegario B. Ramos (Ramos), one of the defendants
in Civil Case No. 722-M-2002, discovered that a parcel of land with an area of 1,233 square meters, more or less,
which was a portion of a bigger tract of land with an area of 3,054 square meters, more or less, located in
Meycauayan, Bulacan that he had adjudicated solely to himself upon his mother's death on November 16, 1982 had
been earlier transferred by his mother to one Ricardo Asuncion, who had, in turn, sold it to the late Rodrigo Gomez.

On February 1, 1990, Ramos, alleging that Gomez had induced him to sell the 1,233 square meters to Gomez on the
understanding that Gomez would settle Ramos' obligation to three other persons, commenced in the RTC in
Valenzuela an action against Gomez, also known as Domingo Ng Lim, seeking the rescission of their contract of sale
and the payment of damages, docketed as Civil Case No. 3287-V-90 entitled Leodegario B. Ramos v. Rodrigo Gomez,
a.k.a. Domingo Ng Lim.6

On October 9, 1990, before the Valenzuela RTC could decide Civil Case No. 3287-V-90 on the merits, Ramos and
Gomez entered into a compromise agreement.7 The RTC approved their compromise agreement through its decision
rendered on the same date.8

The petitioner, being then the counsel of Ramos in Civil Case No. 3287-V-90, assisted Ramos in entering into the
compromise agreement "to finally terminate this case." The terms and conditions of the compromise agreement
were as follows:

COME NOW, the Parties, assisted by their respective counsels, and before this Honorable Court, most respectfully
submit this COMPROMISE AGREEMENT for approval, as to finally terminate this case, the terms and conditions of
which being as follows:

1. That out of the total area of Three Thousand and Fifty Four (3,054) sq. m., more or less, covered by formerly O.C.T.
No. P-2492 (M), Registry of Deeds of Bulacan, known as Lot No. 6821, Cad-337 Lot 4020-E, Csd-04-001618-D, and
now by the Reconstituted Transfer Certificate of Title No. T-10179-P (M) defendant shall cause survey of said

1
JURISDICTION cases set 5 2

property, at its own expense, to segregate the area of One Thousand Two Hundred Thirty-Three, (1,233) sq. m. more
or less, to take along lines two (2) to three (3), then to four (4) and up to five (5) of said plan, Csd-04-001618-D;

2. That upon completion of the technical survey and plan, defendant shall cause the registration of the Deed of
Absolute Sale executed by plaintiff over the 1,233 sq. m. in his favor and that defendant shall deliver the survey and
plan pertaining to the 1,821 sq, m. to the plaintiff with both parties defraying the cost of registration and titling over
their respective shares;

3. That to carry out the foregoing, plaintiff shall entrust the Owner's Duplicate of said TCT No. T-10179-P (M), Registry
of Deeds of Meycauayan, Bulacan, to the defendant, upon approval of this COMPROMISE AGREEMENT by the Court;

4. That upon the approval of this Compromise Agreement plaintiff shall execute a Deed of Absolute Sale in favor of
defendant over the 1,233 sq. m. surveyed and segregated from the 1,821 sq. m. which should remain with the
plaintiff and to be titled in his name;

5. That plaintiff obligates himself to return his loan obligation to the defendant, in the principal sum of P 80,000.00
plus P 20,000.00 for the use thereof, and an additional sum of P 10,000.00 in the concept of attorney's fees, which
sums shall be guaranteed by a post-dated check, in the amount of P 110,000.00 in plaintiff's name with his prior
endorsement, drawn and issued by plaintiff's counsel, for a period of Sixty (60) days from October 9, 1990;

6. That in the event the check issued pursuant to paragraph 5 hereof, is dishonored for any reason whatsoever, upon
presentment for payment, then this Compromise Agreement, shall be considered null and void and of no effect
whatsoever;

7. That upon faithful compliance with the terms and conditions of this COMPROMISE AGREEMENT and the Decision
based thereon, the parties hereto shall have respectively waived, conceded and abandoned all claims and rights of
action of whatever kind or nature, against each other over the subject property.

WHEREFORE, premises considered, the parties hereto hereby jointly and severally pray before this Honorable Court
to approve this COMPROMISE AGREEMENT and thereupon render its Decision based thereon terminating the case.

One of the stipulations of the compromise agreement was for Ramos to execute a deed of absolute sale in favor of
Gomez respecting the parcel of land with an area of 1,233 square meters, and covered by Transfer Certificate of Title
(TCT) No. T-13005 P(M) in the name of Ramos.9 Another stipulation was for the petitioner to issue post-dated checks
totaling P 110,000.00 to guarantee the payment by Ramos of his monetary obligations towards Gomez as stated in
the compromise agreement broken down as follows: (a) P 80,000.00 as Ramos' loan obligation to Gomez; (b) P
20,000.00 for the use of the loan; and (c) P 10,000.00 as attorney's fees. Of these amounts, only P 80,000.00 was
ultimately paid to Gomez, because the petitioner's check dated April 23, 1991 for the balance of P 30,000.00 was
dishonored for insufficiency of funds.

Gomez meanwhile died on November 7, 1990. He was survived by his wife Tsui Yuk Ying and their minor children
(collectively to be referred to as the Estate of Gomez). The Estate of Gomez sued Ramos and the petitioner for
specific performance in the RTC in Caloocan City to recover the balance of P 30,000.00 (Civil Case No. C-15750). On
February 28, 1994, however, Civil Case No. C-15750 was amicably settled through a compromise agreement,
whereby the petitioner directly bound himself to pay to the Estate of Gomez P 10,000.00 on or before March 15,
1994; P 10,000.00 on or before April 15, 1994; and P 10,000.00 on or before May 15, 1994.

The Estate of Gomez performed the obligations of Gomez under the first paragraph of the compromise agreement
of October 9, 1990 by causing the survey of the bigger tract of land containing an area of 3,054 square meters, more
or less, in order to segregate the area of 1,233 square meters that should be transferred by Ramos to Gomez in
accordance with Ramos' undertaking under the second paragraph of the compromise agreement of October 9, 1990.
But Ramos failed to cause the registration of the deed of absolute sale pursuant to the second paragraph of the
compromise agreement of October 9, 1990 despite the Estate of Gomez having already complied with Gomez's

2
JURISDICTION cases set 5 3

undertaking to deliver the approved survey plan and to shoulder the expenses for that purpose. Nor did Ramos
deliver to the Estate of Gomez the owner's duplicate copy of TCT No. T-10179 P(M) of the Registry of Deeds of
Meycauayan, Bulacan, as stipulated under the third paragraph of the compromise agreement of October 9, 1990.
Instead, Ramos and the petitioner caused to be registered the 1,233 square meter portion in Ramos's name under
TCT No. T-13005-P(M) of the Registry of Deeds of Meycauayan, Bulacan.

Accordingly, on July 6, 1995, the Estate of Gomez brought a complaint for specific performance against Ramos and
the petitioner in the RTC in Valenzuela (Civil Case No. 4679-V-95)10 in order to recover the 1,233 square meter lot.
However, the Valenzuela RTC dismissed the complaint on April 1, 1996 upon the motion of Ramos and the petitioner
on the ground of improper venue because the objective was to recover the ownership and possession of realty
situated in Meycauayan, Bulacan, and because the proper recourse was to enforce the judgment by compromise
Agreement rendered on October 9, 1990 through a motion for execution.

The Estate of Gomez appealed the order of dismissal to the Court of Appeals (CA), which ruled on July 24, 2001 to
affirm the Valenzuela RTC and to dismiss the appeal (CA-G.R. CV No. 54231).

On September 20, 2002, the Estate of Gomez commenced Civil Case No. 722-M-2002 in the Valenzuela RTC,
ostensibly to revive the judgment by compromise rendered on October 9, 1990 in Civil Case No. 3287-V-90, praying
that Ramos be ordered to execute the deed of absolute sale covering the 1,233 square meter lot pursuant to the
fourth stipulation of the compromise agreement of October 9, 1990. The petitioner was impleaded as a party-
defendant because of his having guaranteed the performance by Ramos of his obligation and for having actively
participated in the transaction.

On January 8, 2003, the petitioner moved for the dismissal of Civil Case No. 722-M-2002, alleging that the action was
already barred by res judicata and by prescription; that he was not a real party-in-interest; and that the amount he
had guaranteed with his personal check had already been paid by Ramos with his own money.11

Initially, on February 18, 2003,12 the RTC granted the petitioner's motion to dismiss, finding that the right of action
had already prescribed due to more than 12 years having elapsed from the approval of the compromise agreement
on October 9, 1990, citing Article 1143 (3) of the Civil Code (which provides a 10-year period within which a right of
action based upon a judgment must be brought from).

On March 24, 2003,13 however, the RTC reversed itself upon motion of the Estate of Gomez and set aside its order
of February 18, 2003. The RTC reinstated Civil Case No. 722-M-2002, holding that the filing of the complaint for
specific performance on July 6, 1995 in the Valenzuela RTC (Civil Case No. 4679-V-95) had interrupted the
prescriptive period pursuant to Article 1155 of the Civil Code.

The petitioner sought reconsideration, but the RTC denied his motion for that purpose on April 21, 2003.

On May 12, 2003, the petitioner filed a second motion for reconsideration, maintaining that the Estate of Gomez's
right of action had already prescribed; and that the judgment by compromise of October 9, 1990 had already settled
the entire controversy between the parties.

On August 19, 2003,14 the RTC denied the second motion for reconsideration for lack of merit.

Hence, this special civil action for certiorari commenced on September 4, 2003 directly in this Court.

Issues

The petitioner insists that:

xxx the lower court acted with grave abuse of discretion, amounting to lack of, or in excess of jurisdiction, when,
after having correctly ordered the dismissal of the case below, on the ground of prescription under Art. 1144, par.

3
JURISDICTION cases set 5 4

3, of the Civil Code, it reconsidered and set aside the same, on the factually baseless and legally untenable Motion
for Reconsideration of Private Respondent, insisting, with grave abuse of discretion, if not bordering on ignorance
of law, and too afraid to face reality, that it is Art. 1155 of the same code, as invoked by Private Respondents, that
applies, and required herein petitioner to file his answer, despite petitioner's first Motion for Reconsideration, which
it treated as a mere scrap of paper, yet, at the same [sic] again it insisted that Article 1155 of the Civil Code should
apply, and, thereafter when, with like, if not greater grave abuse of discretion, amounting to lack, or in excess of
jurisdiction, it again denied petitioner's Second Motion for Reconsideration for lack of merit, and giving petitioner a
non-extendible period of ten 10 days from notice, to file his answer.15

In his reply to the Estate of Gomez's comment,16 the petitioner elucidated as follows:

1) Whether or not, the Honorable public respondent Judge gravely abused his discretion, amounting to lack of, or in
excess of jurisdiction, when, after ordered the dismissal of Civil Case No. 722-M-2002, as prescription has set in,
under Art. 1143 of the Civil Code, he set aside and reconsidered his said Order, on motion of plaintiff, by thereafter
denied petitioner's Motion for Reconsideration, and Second Motion for Reconsideration, insisting, despite his being
presumed to know the law, that the said action is not barred by prescription, under Art. 1145 of the Civil Code;

2) Whether or not, the present pending action, Civil Case No. 722-M-2002, before Branch 12 of the Regional Trial
Court of Malolos, Bulacan, is barred, and should be ordered be dismissed, on the ground of prescription, under the
law and the rules, and applicable jurisprudence.

3) Whether or not, the same action may be dismissed on other valid grounds.17

The petitioner submits that Civil Case No. 722-M-2002 was one for the revival of the judgment upon a compromise
agreement rendered in Civil Case No. 3287-V-90 that attained finality on October 9, 1990; that considering that an
action for revival must be filed within 10 years from the date of finality, pursuant to Article 1144 of the Civil Code,18
in relation to Section 6, Rule 39 of the Rules of Court,19 Civil Case No. 722-M-2002 was already barred by
prescription, having been filed beyond the 10-year prescriptive period; that the RTC gravely abused its discretion in
reinstating the complaint despite prescription having already set in; that the dismissal of Civil Case No. 722-M-2002
was proper also because the judgment had already been fully satisfied; that the claim relative to the 1,233 square
meter lot under the compromise agreement had been waived, abandoned, or otherwise extinguished on account of
the failure of the Estate of Gomez's counsel to move for the issuance of a writ of execution; and that the Estate of
Gomez could not rely upon the pendency and effects of the appeal from the action for specific performance after its
dismissal had been affirmed by the CA on grounds of improper venue, the plaintiff's lack of personality, and improper
remedy (due to the proper remedy being by execution of the judgment).

The Estate of Gomez countered that the filing on July 6, 1995 of the action for specific performance in the RTC in
Valenzuela stopped the running of the prescriptive period; that the period commenced to run again after the CA
dismissed that action on July 24, 2001; that the total elapsed period was only five years and 11 months; and that the
action for the revival of judgment filed on September 20, 2002 was within the period of 10 years to enforce a final
and executory judgment by action.

Ruling

We dismiss the petition for certiorari.

The orders that the petitioner seeks to challenge and to annul are the orders denying his motion to dismiss. It is
settled, however, that an order denying a motion to dismiss, being merely interlocutory, cannot be the basis of a
petition for certiorari. An interlocutory order is not the proper subject of a certiorari challenge by virtue of its not
terminating the proceedings in which it is issued. To allow such order to be the subject of review by certiorari not
only delays the administration of justice, but also unduly burdens the courts.20

4
JURISDICTION cases set 5 5

But a petition for certiorari may be filed to assail an interlocutory order if it is issued without jurisdiction, or with
excess of jurisdiction, or in grave abuse of discretion amounting to lack or excess of jurisdiction. This is because as
to such order there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law. Rule 65
of the Rules of Court expressly recognizes the exception by providing as follows:

Section 1. Petition for certiorari. - When any tribunal, board or officer exercising judicial or quasi-judicial functions
has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess
of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a
person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying
that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting
such incidental reliefs as law and justice may require.

The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof,
copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum
shopping as provided in the third paragraph of section 3, Rule 46. (1a)

The exception does not apply to this challenge. The petitioner has not demonstrated how the assailed orders could
have been issued without jurisdiction, or with excess of jurisdiction, or in grave abuse of discretion amounting to
lack or excess of jurisdiction. Nor has he convinced us that he had no plain, speedy, and adequate remedy in the
ordinary course of law. In fact and in law, he has, like filing his answer and going to pre-trial and trial. In the end,
should he still have the need to seek the review of the decision of the RTC, he could also even appeal the denial of
the motion to dismiss. That, in reality, was his proper remedy in the ordinary course of law.

Yet another reason to dismiss the petition for certiorari exists. Although the Court, the CA and the RTC have
concurrence of jurisdiction to issue writs of certiorari, the petitioner had no unrestrained freedom to choose which
among the several courts might his petition for certiorari be filed in. In other words, he must observe the hierarchy
of courts, the policy in relation to which has been explicitly defined in Section 4 of Rule 65 concerning the petitions
for the extraordinary writs of certiorari, prohibition and mandamus, to wit:

Section 4. When and where petition filed. - The petition shall be filed not later than sixty (60) days from notice of
the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such
motion is required or not, the sixty (60) day period shall be counted from notice of the denial of the said motion.

The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a lower court or of a
corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the territorial area as
defined by the Supreme Court. It may also be filed in the Court of Appeals whether or not the same is in the aid
of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves the acts
or omissions of a quasi-judicial agency, unless otherwise provided by law or these rules, the petition shall be filed
in and cognizable only by the Court of Appeals.

No extension of time to file the petition shall be granted except for compelling reason and in no case exceeding
fifteen (15) days. (4a)21 (Emphasis supplied)

Accordingly, his direct filing of the petition for certiorari in this Court instead of in the CA should be disallowed
considering that he did not present in the petition any special and compelling reasons to support his choice of this
Court as the forum.

The Court must enjoin the observance of the policy on the hierarchy of courts, and now affirms that the policy is not
to be ignored without serious consequences. The strictness of the policy is designed to shield the Court from having
to deal with causes that are also well within the competence of the lower courts, and thus leave time to the Court
to deal with the more fundamental and more essential tasks that the Constitution has assigned to it. The Court may
act on petitions for the extraordinary writs of certiorari, prohibition and mandamus only when absolutely necessary

5
JURISDICTION cases set 5 6

or when serious and important reasons exist to justify an exception to the policy. This was why the Court stressed in
Vergara, Sr. v. Suelto:22

xxx. The Supreme Court is a court of last resort, and must so remain if it is to satisfactorily perform the functions
assigned to it by the fundamental charter and immemorial tradition. It cannot and should not be burdened with the
task of dealing with causes in the first instance. Its original jurisdiction to issue the so-called extraordinary writs
should be exercised only where absolutely necessary or where serious and important reasons exist therefor. Hence,
that jurisdiction should generally be exercised relative to actions or proceedings before the Court of Appeals, or
before constitutional or other tribunals, bodies or agencies whose acts for some reason or another are not
controllable by the Court of Appeals. Where the issuance of an extraordinary writ is also within the competence of
the Court of Appeals or a Regional Trial Court, it is in either of these courts that the specific action for the writ's
procurement must be presented. This is and should continue to be the policy in this regard, a policy that courts and
lawyers must strictly observe. (Emphasis supplied)

In People v. Cuaresma,23 the Court has also amplified the need for strict adherence to the policy of hierarchy of
courts. There, noting "a growing tendency on the part of litigants and lawyers to have their applications for the so-
called extraordinary writs, and sometimes even their appeals, passed upon and adjudicated directly and immediately
by the highest tribunal of the land," the Court has cautioned lawyers and litigants against taking a direct resort to
the highest tribunal, viz:

xxx. This Court's original jurisdiction to issue writs of certiorari (as well as prohibition, mandamus, quo warranto,
habeas corpus and injunction) is not exclusive. It is shared by this Court with Regional Trial Courts x x x, which may
issue the writ, enforceable in any part of their respective regions. It is also shared by this Court, and by the Regional
Trial Court, with the Court of Appeals x x x, although prior to the effectivity of Batas Pambansa Bilang 129 on August
14, 1981, the latter's competence to issue the extraordinary writs was restricted to those "in aid of its appellate
jurisdiction." This concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the
writs an absolute, unrestrained freedom of choice of the court to which application therefor will be directed. There
is after all a hierarchy of courts. That hierarchy is determinative of the venue of appeals, and should also serve as a
general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard for that
judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level
("inferior") courts should be filed with the Regional Trial Court, and those against the latter, with the Court of
Appeals. A direct invocation of the Supreme Court's original jurisdiction to issue these writs should be allowed only
when there are special and important reasons therefor, clearly and specifically set out in the petition. This is
established policy. It is a policy that is necessary to prevent inordinate demands upon the Court's time and attention
which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of
the Court's docket. Indeed, the removal of the restriction on the jurisdiction of the Court of Appeals in this regard,
supraâ€" resulting from the deletion of the qualifying phrase, "in aid of its appellate jurisdiction" â€" was
evidently intended precisely to relieve this Court pro tanto of the burden of dealing with applications for the
extraordinary writs which, but for the expansion of the Appellate Court corresponding jurisdiction, would have had
to be filed with it.

xxxx

The Court therefore closes this decision with the declaration for the information and evidence of all concerned, that
it will not only continue to enforce the policy, but will require a more strict observance thereof. (Emphasis supplied)

There being no special, important or compelling reason that justified the direct filing of the petition for certiorari in
this Court in violation of the policy on hierarchy of courts, its outright dismissal is unavoidable.

Still, even granting that the petition for certiorari might be directly filed in this Court, its dismissal must also follow
because its consideration and resolution would unavoidably demand the consideration and evaluation of evidentiary
matters. The Court is not a trier of facts, and cannot accept the petition for certiorari for that reason.

6
JURISDICTION cases set 5 7

Although commenced ostensibly for the recovery of possession and ownership of real property, Civil Case No. 722-
M-2002 was really an action to revive the judgment by compromise dated October 9, 1990 because the ultimate
outcome would be no other than to order the execution of the judgment by compromise. Indeed, it has been held
that "there is no substantial difference between an action expressly called one for revival of judgment and an action
for recovery of property under a right adjudged under and evidenced by a final judgment."24 In addition, the parties
themselves have treated the complaint in Civil Case No. 722-M-2002 as one for revival. Accordingly, the parties
should be fully heard on their respective claims like in any other independent action.

The petitioner's defense of prescription to bar Civil Case No. 722-M-2002 presents another evidentiary concern.
Article 1144 of the Civil Code requires, indeed, that an action to revive a judgment must be brought before it is
barred by prescription, which was ten years from the accrual of the right of action.25 It is clear, however, that such
a defense could not be determined in the hearing of the petitioner's motion to dismiss considering that the complaint
did not show on its face that the period to bring the action to revive had already lapsed. An allegation of prescription,
as the Court put it in Pineda v. Heirs of Eliseo Guevara,26 "can effectively be used in a motion to dismiss only when
the complaint on its face shows that indeed the action has already prescribed, [o]therwise, the issue of prescription
is one involving evidentiary matters requiring a full blown trial on the merits and cannot be determined in a mere
motion to dismiss."

At any rate, the mere lapse of the period per se did not render the judgment stale within the context of the law on
prescription, for events that effectively suspended the running of the period of limitation might have intervened. In
other words, the Estate of Gomez was not precluded from showing such events, if any. The Court recognized this
possibility of suspension in Lancita v. Magbanua:27

In computing the time limited for suing out of an execution, although there is authority to the contrary, the general
rule is that there should not be included the time when execution is stayed, either by agreement of the parties for a
definite time, by injunction, by the taking of an appeal or writ of error so as to operate as a supersedeas, by the
death of a party or otherwise. Any interruption or delay occasioned by the debtor will extend the time within which
the writ may be issued without scire facias.

Verily, the need to prove the existence or non-existence of significant matters, like supervening events, in order to
show either that Civil Case No. 722-M-2002 was batTed by prescription or not was present and undeniable.
Moreover, the petitioner himself raised factual issues in his motion to dismiss, like his averment of full payment or
discharge of the obligation of Ramos and the waiver or abandonment of rights under the compromise agreement.
The proof thereon cannot be received in certiorari proceedings before the Court, but should be established in the
RTC.

WHEREFORE, the Court DISMISSES the petition for certiorari; and DIRECTS the petitioner to pay the cost of suit.

SO ORDERED

7
JURISDICTION cases set 5 8

BARANGAY PIAPI, herein represented by its chairman ANDRES L. LUGNASIN and LIBERATO LARGO, RITA LARGO,
SABAS MONTECALBO, SR., CARLOS ZAMORA, DONATA SESICAN, DIZAR CASTILLO, ALEJANDOR GICALE,
SALVACION SALE, PABLO MORASTIL, JOSE JAVELOSA, ISIDRA BERNAL, FELIX EGHOT, CORAZON EGHOT,
ROSALINA REMONDE, ROA EGHOT, CEFERINA LAGROSA, MARIO ARANEZ, ALBERTO CAMARILLO, BOBBY
DULAOTO, NOEL ZAMORA, MARTINO MORALLAS, DANILO FAILAGA, MARITA BRAGAT, NATIVIDAD LAGRAMON,
RAQUEL GEROZAGA, SHIRLY CESAR, PIO ZAMORA, ANDRES LUGNASIN, ELPIDIO SESICAN, CRESENTA BORJA,
CARLITO TANEZA, JR., MARCIAL RELLON, JEANILITO SUMALINOG, ALBERTO ZAMORA, and LUISITO LAGROSA,
Petitioners, versus IGNACIO TALIP representing the HEIRS OF JUAN JAYAG, Respondent.
G.R. No. 138248 | 2005-09-07
Tagged under keywords

THIRD DIVISION

DECISION

SANDOVAL-GUTIERREZ, J.:

Before us is a petition for review on certiorari[1] assailing the Orders dated January 12, 1999[2] and April 20, 1999[3]
of the Regional Trial Court (RTC), Branch 18, Digos, Davao del Sur in Civil Case No. 3715 filed by the above-named
petitioners against respondent Ignacio Talip representing the heirs of Juan Jayag.

The factual antecedents as borne by the records are:

On August 28, 1998, petitioners filed with the said RTC a complaint for reconveyance and damages with prayer for
issuance of a temporary restraining order and/or writ of preliminary injunction against respondent, docketed as Civil
Case No. 3715.

The complaint alleges that petitioners and their predecessors-in-interest have been in actual, peaceful, continuous
and open possession for more than 30 years of a parcel of land consisting of 3.2 hectares situated in Piapi, Padada,
Davao del Sur. It is covered by Original Certificate of Title (OCT) No. P-(3331)-4244 of the Registry of Deeds, same
province, issued in the name of Juan Jayag and has a market value of P15,000.00. The same land was subdivided
into lots consisting of 100 square meters each, where the individual petitioners built their houses. On the remaining
portion were constructed their barangay center, multi-purpose gym and health center. Respondent fraudulently
obtained from the said Registry of Deeds a Transfer Certificate of Title (TCT) in his name. In 1998, he paid real estate
taxes and subsequently, he threatened to build a barb-wire fence around the land.

Instead of filing an answer, respondent moved to dismiss the complaint on the ground that the RTC has no
jurisdiction over the case considering that the assessed value of the land is only P6,030.00. Respondent, citing
Section 33 (3) of BP Blg. 129, as amended by R.A. No. 7691,[4] maintains that the case falls within the exclusive
jurisdiction of the Municipal Circuit Trial Court of Padada-Kiblawan, Davao del Sur.

In their opposition to the motion to dismiss, petitioners alleged that jurisdiction is vested in the RTC considering that
the total assessed value of the property is P41,890.00, as shown by a Real Property Field Appraisal and Assessment
Sheet dated August 20, 1996 issued by Atty. Marcos D. Risonar, Jr., Provincial Assessor of Davao del Sur.[5]

On January 12, 1999, the trial court issued an Order dismissing the complaint for lack of jurisdiction.

8
JURISDICTION cases set 5 9

Petitioners then filed a motion for reconsideration but was denied in an Order dated April 20, 1999.

Hence, petitioners directly filed with this Court the instant petition for review on certiorari assailing the trial court's
Order dismissing the complaint for lack of jurisdiction.

Petitioners contend that under Section 19 (1) of BP Blg. 129, as amended, the RTC has jurisdiction over the complaint
for reconveyance since it is incapable of pecuniary estimation.

The contention is bereft of merit. This case is analogous to Huguete vs. Embudo.[6] There, petitioners argued that a
complaint for annulment of a deed of sale and partition is incapable of pecuniary estimation, and thus falls within
the exclusive jurisdiction of the RTC. However, we ruled that "the nature of an action is not determined by what is
stated in the caption of the complaint but by the allegations of the complaint and the reliefs prayed for. Where the
ultimate objective of the plaintiffs, like petitioners herein, is to obtain title to real property, it should be filed in
the proper court having jurisdiction over the assessed value of the property subject thereof."

Indeed, basic as a hornbook principle is that the nature of an action, as well as which court or body has jurisdiction
over it, is determined based on the allegations contained in the complaint of the plaintiff, irrespective of whether or
not the plaintiff is entitled to recover upon all or some of the claims asserted therein.[7]

Let us examine the pertinent allegations in petitioners' complaint below:

"x x x x x x

2. Plaintiffs by themselves and/or thru their predecessors-in-interest have been in actual possession, in the concept
of an owner, in good faith and in a manner that is open, peaceful, uninterrupted, public, adverse and continuous,
for more than 30 years, the following described parcel of land, viz:

'A parcel of land containing an area of 3.2 hectares, more of less, covered by OCT No. P-(3331)-4244, in the name of
Juan Jayag and situated in Piapi, Padada, Davao del Sur.'

2a. The market value of the above-described land is Fifteen Thousand Pesos (P15,000.00).

3. The respective areas that private plaintiffs occupy consisted of an average of 100 square meters on which their
homes and houses are built while a large chunk of the above-described property has been used or set aside for the
barangay site of and other infrastructures for Piapi, Padada, Davao del Sur.

xxxxxx

5. Defendant or his predecessor-in-interest has never been in possession, of the land in suit and except for the year
1998, has not paid taxes thereon nor declared the same for taxation purposes - a clear index that defendant's title
over the same is not genuine.

6. Defendant, in procuring title to the land in suit did so by fraud, mistake and/or misrepresentation, hence, he holds
the title for the benefit and in trust of the landowner - that is, herein plaintiffs.

7. Defendant is by law under obligation to reconvey the land in suit in favor of herein plaintiffs, x x x."

It can easily be discerned that petitioners' complaint involves title to, or possession of, real property. However, they
failed to allege therein the assessed value of the subject property. Instead, what they stated is the market value of
the land at P15,000.00.

Section 19 (2) of Batas Pambansa Blg. 129, as amended provides:

9
JURISDICTION cases set 5 10

"SEC. 19. Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive original jurisdiction:

xxxxxx

(2) In all civil actions which involve the title to, or possession of, real property, or any interest thereon, where the
assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or for civil actions in Metro
Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts."

The Rule requires that "the assessed value of the property, or if there is none, the estimated value thereof, shall
be alleged by the claimant."[8] It bears reiterating that what determines jurisdiction is the allegations in the
complaint and the reliefs prayed for. Petitioners' complaint is for reconveyance of a parcel of land. Considering that
their action involves the title to or interest in real property, they should have alleged therein its assessed value.
However, they only specified the market value or estimated value, which is P15,000.00. Pursuant to the provision
of Section 33 (3) quoted earlier, it is the Municipal Circuit Trial Court of Padada-Kiblawan, Davao del Sur, not the
RTC, which has jurisdiction over the case.

WHEREFORE, the petition is DENIED. The assailed Orders dated January 12, 1999 and April 20, 1999 of the Regional
Trial Court, Branch 18, Digos, Davao del Sur in Civil Case No. 3715 are hereby AFFIRMED. Costs against petitioners.

SO ORDERED.

10
JURISDICTION cases set 5 11

G.R. No. 176492 October 20, 2014

MARIETTA N. BARRIDO, Petitioner,

vs.
LEONARDO V. NONATO, Respondent.

DECISION

PERALTA, J.:

For the Court's resolution is a Petition for Review filed by petitioner Marietta N. Barrido questioning the
Decision1 of the Court of Appeals (CA), dated November 16, 2006, and its Resolution 2 dated January 24, 2007 in
CA-G.R. SP No. 00235. The CA affirmed the Decision 3 of the Regional Trial Court (RTC) ofBacolod City, Branch 53,
dated July 21, 2004, in Civil Case No. 03-12123, which ordered the partition of the subject property.

The facts, as culled from the records, are as follows: 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 ofa 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:

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 ₱10,000.00 as moral
damages for the mental anguish and unnecessary inconvenience brought about by this suit; and an additional
₱10,000.00 as exemplary damages to deter others from following suit; and attorney’s fees of ₱2,000.00 and
litigation expenses of ₱575.00.

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:

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;

11
JURISDICTION cases set 5 12

(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 ₱8,080.00, it clearly fell within the MTCC’s jurisdiction. Also, although the RTC erred in relying on
Article 129 of the FamilyCode, 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.

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 1298 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:

xxxx

(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 propertyor interest therein does not exceed Twenty thousand
pesos (₱20,000.00)or, in civil actions in Metro Manila, where such assessed value does not exceed Fifty thousand

12
JURISDICTION cases set 5 13

pesos (₱50,000.00) 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 ₱8,080.00, an amount which certainly does not exceed the
required limit of ₱20,000.00 for civil actions outside Metro Manila tofall within the jurisdiction of the MTCC.
Therefore, the lower court correctly took cognizance of the instant case.

The records reveal that Nonatoand Barrido’s marriage had been declared void for psychological incapacity under
Article 3610 of the Family Code. During their marriage, however, the conjugal partnership regime governed their
property relations. Although Article 12911 provides for the

procedure in case of dissolution of the conjugal partnership regime, Article 147 specifically covers the 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.

In the absence of proof to the contrary, properties acquired while they lived together shall be presumed tohave
been obtained by their joint efforts, work or industry, and shall beowned 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.1âwphi1 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 impedimentto 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" inthe
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 coownership. Any property acquired during the union is prima faciepresumed 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

13
JURISDICTION cases set 5 14

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 initiobecause
of psychological incapacity on the part of either or both parties in the contract of marriage.The Court held that the
court a quodid 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 coownership 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 spousesor 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 safe 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.

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.

SO ORDERED.

14
JURISDICTION cases set 5 15

EULALIA RUSSELL, RUPERTO TAUTHO, FRANCISCO TAUTHO, SUSANA T. REALES, APITACIO TAUTHO, DANILO
TAUTHO, JUDITHA PROS, GREGORIO TAUTHO, DEODITA T. JUDILLA, AGRIPINO TAUTHO, FELIX TAUTHO,
WILLIAM TAUTHO, AND MARILYN PERALES, petitioners, vs. HONORABLE AUGUSTINE A. VESTIL, ADRIANO
TAGALOG, MARCELO TAUTHO, JUANITA MENDOZA, DOMINGO BANTILAN, RAUL BATALUNA AND ARTEMIO
CABATINGAN, respondents.
G.R. No. 119347 | 1999-03-17
Tagged under keywords

DECISION

KAPUNAN, J.:

Before us is a Petition for Certiorari to set aside the Order dated January 12, 1995 issued by respondent Judge
Augustine A. Vestil of the Regional Trial Court of Mandaue City, Branch 56, dismissing the complaint filed by
petitioners on ground of lack of jurisdiction, as well as his Order dated February 13, 1995 denying petitioners'
Motion for Reconsideration of the order of dismissal.

The facts of the case are as follows:

On September 28, 1994, petitioners filed a complaint against private respondents, denominated "DECLARATION
OF NULLITY AND PARTITION," with the Regional Trial Court of Mandaue City, Branch 56, docketed as Civil Case No.
MAN 2275. The complaint, in substance, alleged that petitioners are co-owners of that parcel of land, Lot 6149
situated in Liloan, Cebu and containing an area of 56,977.40 square meters, more or less. The land was previously
owned by the spouses Casimero Tautho and Cesaria Tautho. Upon the death of said spouses, the property was
inherited by their legal heirs, herein petitioners and private respondents. Since then, the lot had remained
undivided until petitioners discovered a public document denominated "DECLARATION OF HEIRS AND DEED OF
CONFIRMATION OF A PREVIOUS ORAL AGREEMENT OF PARTITION," executed on June 6, 1990. By virtue of this
deed, private respondents divided the property among themselves to the exclusion of petitioners who are also
entitled to the said lot as heirs of the late spouses Casimero Tautho and Cesaria Tautho. Petitioners claimed that
the document was false and perjurious as the private respondents were not the only heirs and that no oral
partition of the property whatsoever had been made between the heirs. The complaint prayed that the document
be declared null and void and an order be issued to partition the land among all the heirs.1 [Rollo pp. 13-17.]

On November 24, 1994, private respondents filed a Motion to Dismiss2 [Id., at 21.] the complaint on the ground of
lack of jurisdiction over the nature of the case as the total assessed value of the subject land is P5,000.00 which
under section 33 (3)3 [Sec. 3. Section 33 of the same law is hereby amended to read as follows:

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 Trial Courts, and Municipal Circuit Trial
Courts shall exercise:

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:

15
JURISDICTION cases set 5 16

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.] of Batas Pambansa Blg. 129, as amended by R.A. No. 7691,4 [An Act
Expanding the Jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts, Amending for the purpose Batas Pambansa Blg. 129, otherwise known as the Judiciary Reorganization Act
of 1980.] falls within the exclusive jurisdiction of the Municipal Circuit Trial Court of Liloan, Compostela.5 [Id., at
21.]

Petitioners filed an Opposition to the Motion to Dismiss6 [Id., at 22-23.] saying that the Regional Trial Court has
jurisdiction over the case since the action is one which is incapable of pecuniary estimation within the
contemplation of Section 19(l) of B.P. 129, as amended.7 [Sec. 19. Jurisdiction in civil cases. - Regional Trial Courts
shall exercise exclusive original jurisdiction:

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

x x x.]

On January 12, 1995, the respondent judge issued an Order granting the Motion to Dismiss.8 [Id., at 24.] A Motion
for Reconsideration of said order was filed by petitioners on January 30, 1995 alleging that the same is contrary to
law because their action is not one for recovery of title to or possession of the land but an action to annul a
document or declare it null and void,9 [Id., at 26-28.] hence, one incapable of pecuniary estimation failing within
the jurisdiction of the Regional Trial Court. Private respondents did not oppose the motion for reconsideration.

On February 13, 1995, the respondent judge issued another Order denying the motion for reconsideration.10 [Id.,
at 29.]

Hence, this petition wherein the sole issue raised is whether or not the Regional Trial Court has jurisdiction to
entertain Civil Case No. MAN-2275.

We find merit in the petition.

Petitioners maintain the view that the complaint filed before the Regional Trial Court is for the annulment of a
document denominated as "DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF PREVIOUS ORAL
PARTITION," which is clearly one incapable of pecuniary estimation, thus, cognizable by the Regional Trial Court.

Private respondents, on the other hand, insists that the action is one for re-partition and since the assessed value
of the property as stated in the complaint is P5,000.00, then, the case falls within the jurisdiction of the Municipal
Circuit Trial Court of Liloan, Compostela, Cebu.

For better appreciation of the facts, the pertinent portions of the complaint are reproduced hereunder:

xxx

3. That the plaintiffs and the defendants are the legal heirs of spouses Casimero Tautho and Cesaria N. Tautho who
died long time ago;

4. That in life the spouses became the owners in fee simple of a certain parcel of land, which is more particularly
described as follows:

A parcel of land containing 56,977.40 square meters, more or less, located at Cotcot, Liloan, Cebu.

designated as Lot 6149 per Technical Description and Certification issued by the Office of the Land Management
copy of which are hereto attached as Annexes "A" and "A-1" and are made part hereof: total assessed value is
P5,000.00;

16
JURISDICTION cases set 5 17

5. That the land passed to the children of the spouses.(who are all deceased except for defendant Marcelo
Tautho), namely: Zacarias, Epifania, Vicenta, Felicisimo, Maria, Lorencia and Marcelo, and which in turn passed to
the plaintiffs and defendants upon their death they being their descendants and legal heirs;

6. That the subject parcel of land has for year been undivided by and among the legal heirs of said previous
owners;

7. That, very recently, plaintiffs discovered a public document, which is a declaration of heirs and deed of
confirmation of a previous oral agreement, of partition, affecting the land executed by and among the defendants
whereby defendants divided the property among themselves to the exclusion of plaintiffs who are entitled
thereto; attached hereto as Annex "B" and is made part hereof is xerox copy of said document;

8. That the instrument (Annex "B") is false and perjurious and is a complete nullity because the defendants are not
the only heirs of Casimero Tautho; plaintiffs are also legal heirs and descendants of said deceased; moreover, there
has been no oral partition of the property;

9. That pursuant to said document (Annex "B"), defendants had procured tax declarations of the land for their
supposed "shares" to the great damage and prejudice of plaintiffs;

10. That the property in controversy should be divided into seven (7) equal parts since Casimero Tautho and
Cesaria N. Tautho had seven children;

11. That the parties had failed to settle the controversy amicably at the barangay level; attached hereto as Annex
"C" is Certification to file Action;

12. That by reason of the foregoing unjust and illegal act of defendants, plaintiffs were forced to bring instant
action and contract the services of the undersigned counsel with whom they bind themselves to pay P30,000.00 as
attorney's fees.

WHEREFORE, it is most respectfully prayed of this Honorable Court to declare null and void the document (Annex
"B") of declaration of heirs and confirmation and to order the partition of the land into seven (7) equal parts; each
part shall respectively go to the seven (7) children of Casimero Tautho and considering six (6) of them died already
the same shall go to their children or descendants, and to order the defendants to pay plaintiffs attorney's fees in
the amount of P30,000.00.

Plaintiffs further pray for such other reliefs and remedies just and equitable under the premises.11 [Id., at 14-16.]

We agree with petitioners.

The complaint filed before the Regional Trial Court is doubtless one incapable of pecuniary estimation and
therefore within the jurisdiction of said court.

In Singsong vs. Isabela Sawmill,12 [88 SCRA 623 (1979)] we had the occasion to rule that:

(I)n determining whether an action is one the subject matter of which is not capable of pecuniary estimation this
Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If it is
primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and
whether jurisdiction is in the municipal courts or in 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, where the
money claim is purely incidental to, or a consequence of, the principal relief sought, this Court has considered such
actions as cases where the subject of the litigation may not be estimated in terms of money, and are cognizable
exclusively by courts of first instance (now Regional Trial Courts).13 [See also: Raymundo v. Court of Appeals, 213

17
JURISDICTION cases set 5 18

SCRA 457 (1992)]

Examples of actions incapable of pecuniary estimation are those for specific performance, support, or foreclosure
of mortgage or annulment of judgment;14 [Amorganda v. Court of Appeals, 166 SCRA 203; De Jesus v. Garcia, 19
SCRA 554.] also actions questioning the validity of a mortgage,15 [Bunayog v. Tunos, 106 Phil. 715.] annulling a
deed of sale or conveyance and to recover the price paid16 [Philippine Farming Corporation, Ltd. v. Lianos, 14
SCRA 949; Arroz v. Alojada, 19 SCRA 711.] and for rescession, which is a counterpart of specific performance.17
[Lapitan v. Scandia, 24 SCRA 479.]

While actions under Sec. 33(3) of B.P. 129 are also incapable of pecuniary estimation, the law specifically mandates
that they are cognizable by the MTC, METC, or MCTC where the assessed value of the real property involved does
exceed P20,000.00 in Metro Manila, or P50,000.00, if located elsewhere. If the value exceeds P20,000.00 or
P50,000.00 as the case may be, it is the Regional Trial Courts which have jurisdiction under Sec. 19(2).18 [Sec. 19.
Jurisdiction in civil cases.- Regional Trial Courts shall exercise exclusive original jurisdiction:

xxx

(2) In all civil actions which involve title to, or possession of real property, or any interest therein, where the
assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or, for civil actions in Metro
Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial
Courts, Municipal Trial Courts and Municipal Circuit Trial Courts;

xxx.]

However, the subject matter of the complaint in this case is annulment of a document denominated as
"DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF PREVIOUS ORAL PARTITION."

The main purpose of petitioners in filing the complaint is to declare null and void the document in which private
respondents declared themselves as the only heirs of the late spouses Casimero Tautho and Cesaria Tautho and
divided his property among themselves to the exclusion of petitioners who also claim to be legal heirs and entitled
to the property. While the complaint also prays for the partition of the property, this is just incidental to the main
action, which is the declaration of nullity of the document above-described. It is axiomatic that jurisdiction over
the subject matter of a case is conferred by law and is determined by the allegations in the complaint and the
character of the relief sought, irrespective of whether the plaintiff is entitled to all or some of the claims asserted
therein.19 [Garcia v. Court of Appeals, 273 SCRA 239; Caniza v. Court of Appeals, 268 SCRA 640.]

WHEREFORE, premises considered, the petition is hereby GRANTED. The Order dismissing Civil Case No. MAN-
2275, as well as the Order denying the motion for reconsideration of said Order, is SET ASIDE.

Davide, Jr., C.J., (Chairman), Melo, Kapunan, and Pardo, JJ., concur.

18
JURISDICTION cases set 5 19

HEIRS OF VALERIANO S. CONCHA, SR. NAMELY: TERESITA CONCHA-PARAN, VALERIANO P. CONCHA, JR., RAMON
P. CONCHA, EDUARDO P. CONCHA, REPRESENTED BY HIS LEGAL GUARDIAN, REYNALDO P. CONCHA, ALBERTO P.
CONCHA, BERNARDO P. CONCHA and GLORIA P. CONCHA-NUNAG, Petitioners, versus SPOUSES GREGORIO J.
LUMOCSO[1] and BIENVENIDA GUYA, CRISTITA J. LUMOCSO VDA. DE DAAN, AND SPOUSES JACINTO J. LUMOCSO
and BALBINA T. LUMOCSO,[2] Respondents.
G.R. No. 158121 | 2007-12-12
DECISION

PUNO, C.J.:

On appeal by certiorari under Rule 45 of the Rules of Court are the decision[3] and resolution[4] of the Court of
Appeals (CA) in CA-G.R. SP No. 59499, annulling the resolutions[5] and order[6] of the Regional Trial Court (RTC) of
Dipolog City, Branch 9, in Civil Case Nos. 5188, 5433 and 5434 which denied the separate motions to dismiss and
Joint Motion for Reconsideration filed by the respondents.

The relevant facts are undisputed.

Petitioners, heirs of spouses Dorotea and Valeriano Concha, Sr., claim to be the rightful owners of Lot No. 6195 (Civil
Case No. 5188), a one-hectare portion of Lot No. 6196-A (Civil Case No. 5433), and a one-hectare portion of Lot Nos.
6196-B and 7529-A (Civil Case No. 5434), all situated in Cogon, Dipolog City, under Section 48(b) of Commonwealth
Act No. 141 (C.A. No. 141), otherwise known as the Public Land Act. Respondent siblings Gregorio Lumocso (Civil
Case No. 5188), Cristita Lumocso Vda. de Daan (Civil Case No. 5433) and Jacinto Lumocso (Civil Case No. 5434), are
the patent holders and registered owners of the subject lots.

The records show that on August 6, 1997, Valeriano Sr.[7] and his children, petitioners Valeriano Jr., Ramon, Eduardo,
Alberto, Bernardo, Teresita, Reynaldo, and Gloria, all surnamed Concha, filed a complaint for Reconveyance and/or
Annulment of Title with Damages against "Spouses Gregorio Lumocso and Bienvenida Guya." They sought to annul
Free Patent No. (IX-8)985 and the corresponding Original Certificate of Title (OCT) No. P-22556 issued in the name
of "Gregorio Lumocso" covering Lot No. 6195. The case was raffled to the RTC of Dipolog City, Branch 9, and docketed
as Civil Case No. 5188. In their Amended Complaint, petitioners prayed that judgment be rendered:

1. Declaring Free Patent No. (IX-8)985 and Original Certificate of Title No. 22556 issued to defendants as null and
void ab initio;

2. Declaring Lot No. 6195 or 1.19122-hectare as private property of the plaintiffs under Sec. 48(b) of CA No. 141
otherwise known as the Public Land Act as amended by RA 1942;

3. Ordering the defendant Lumocsos to reconvey the properties (sic) in question Lot No. 6195 or the 1.19122
hectares in favor of the plaintiffs within 30 days from the finality of the decision in this case and if they refuse,
ordering the Clerk of Court of this Honorable Court to execute the deed of reconveyance with like force and effect
as if executed by the defendant[s] themselves;

4. Ordering defendant Lomocsos to pay P60,000.00 for the 21 forest trees illegally cut; P50,000.00 for moral
damages; P20,000.00 for Attorney's fees; P20,000.00 for litigation expenses; and to pay the cost of the proceedings;

5. Declaring the confiscated three (sic) flitches kept in the area of the plaintiffs at Dampalan San Jose, Dipolog with
a total volume of 2000 board feet a[s] property of the plaintiff [they] being cut, collected and taken from the land
possessed, preserved, and owned by the plaintiffs;

19
JURISDICTION cases set 5 20

6. The plaintiffs further pray for such other reliefs and remedies which this Honorable Court may deem just and
equitable in the premises.[8]

On September 3, 1999, two separate complaints for Reconveyance with Damages were filed by petitioners,[9] this
time against "Cristita Lomocso Vda. de Daan" for a one-hectare portion of Lot No. 6196-A and "Spouses Jacinto
Lomocso and Balbina T. Lomocso" for a one-hectare portion of Lot Nos. 6196-B and 7529-A. The two complaints
were also raffled to Branch 9 of the RTC of Dipolog City and docketed as Civil Case Nos. 5433 and 5434, respectively.
In Civil Case No. 5433, petitioners prayed that judgment be rendered:

1. Declaring [a] portion of Lot 6196-A titled under OCT (P23527) 4888 equivalent to one hectare located at the
western portion of Lot 4888 as private property of the plaintiffs under Sec. 48(B) CA 141 otherwise known as Public
Land OCT (sic) as amended by RA No. 1942;

2. Ordering the defendant to reconvey the equivalent of one (1) hectare forested portion of her property in question
in favor of the plaintiffs within 30 days from the finality of the decision in this case segregating one hectare from
OCT (P23527) 4888, located at its Western portion and if she refuse (sic), ordering the Clerk of Court of this
Honorable Court to execute the deed of reconveyance with like force and effect, as if executed by the defenda[n]t
herself;

3. Ordering defendant to pay P30,000.00 for the 22 forest trees illegally cut; P20,000.00 for moral damages;
P20,000.00 for Attorney's fees; P20,000.00 for litigation expenses; and to pay the cost of the proceedings.[10]

In Civil Case No. 5434, petitioners prayed that judgment be rendered:

1. Declaring [a] portion of Lot 7529-A under OCT (P-23207) 12870 and Lot 6196-B OCT (P-20845) 4889 equivalent to
one hectare located as (sic) the western portion of said lots as private property of the plaintiffs under Sec. 48(b) of
[C.A. No.] 141 otherwise know[n] as the [P]ublic [L]and [A]ct as amended by RA 1942;

2. Ordering the defendants to reconvey the equivalent of one (1) hectare forested portion of their properties in
question in favor of the plaintiffs within 30 days from the finality of the decision in this case segregating one hectare
from OCT (P-23207) 12870 and OCT (T-20845)-4889 all of defendants, located at its Western portion and if they
refuse, ordering the Clerk of Court of this Honorable Court to execute the deed of reconveyance with like force and
effect as if executed by the defendants themselves[;]

3. Ordering defendants to pay P20,000.00 for the six (6) forest trees illegally cut; P20,000.00 for moral damages;
P20,000.00 for Attorney's fees; P20,000.00 for litigation expenses; and to pay the cost of the proceedings.[11]

The three complaints[12] commonly alleged: a) that on May 21, 1958, petitioners' parents (spouses Valeriano Sr.
and Dorotea Concha) acquired by homestead a 24-hectare parcel of land situated in Cogon, Dipolog City; b) that
since 1931, spouses Concha "painstakingly preserved" the forest in the 24-hectare land, including the excess four (4)
hectares "untitled forest land" located at its eastern portion; c) that they possessed this excess 4 hectares of land
(which consisted of Lot No. 6195, one-hectare portion of Lot No. 6196-A and one-hectare portion of Lot Nos. 6196-
B and 7529-A) "continuously, publicly, notoriously, adversely, peacefully, in good faith and in concept of the (sic)
owner since 1931;" d) that they continued possession and occupation of the 4-hectare land after the death of
Dorotea Concha on December 23, 1992 and Valeriano Sr. on May 12, 1999; e) that the Concha spouses "have
preserved the forest trees standing in [the subject lots] to the exclusion of the defendants (respondents) or other
persons from 1931" up to November 12, 1996 (for Civil Case No. 5188) or January 1997 (for Civil Case Nos. 5433 and
5434) when respondents, "by force, intimidation, [and] stealth forcibly entered the premises, illegally cut, collected,
[and] disposed" of 21 trees (for Civil Case No. 5188), 22 trees (for Civil Case No. 5433) or 6 trees (for Civil Case No.
5434); f) that "the land is private land or that even assuming it was part of the public domain, plaintiffs had already
acquired imperfect title thereto" under Sec. 48(b) of C.A. No. 141, as amended by Republic Act (R.A.) No. 1942; g)
that respondents allegedly cut into flitches the trees felled in Lot No. 6195 (Civil Case No. 5188) while the logs taken
from the subject lots in Civil Case Nos. 5433 and 5434 were sold to a timber dealer in Katipunan, Zamboanga del

20
JURISDICTION cases set 5 21

Norte; h) that respondents "surreptitiously" filed free patent applications over the lots despite their full knowledge
that petitioners owned the lots; i) that the geodetic engineers who conducted the original survey over the lots never
informed them of the survey to give them an opportunity to oppose respondents' applications; j) that respondents'
free patents and the corresponding OCTs were issued "on account of fraud, deceit, bad faith and misrepresentation";
and k) that the lots in question have not been transferred to an innocent purchaser.

On separate occasions, respondents moved for the dismissal of the respective cases against them on the same
grounds of: (a) lack of jurisdiction of the RTC over the subject matters of the complaints; (b) failure to state causes
of action for reconveyance; (c) prescription; and (d) waiver, abandonment, laches and estoppel.[13] On the issue of
jurisdiction, respondents contended that the RTC has no jurisdiction over the complaints pursuant to Section 19(2)
of Batas Pambansa Blg. (B.P.) 129, as amended by R.A. No. 7691, as in each case, the assessed values of the subject
lots are less than P20,000.00.

Petitioners opposed,[14] contending that the instant cases involve actions the subject matters of which are incapable
of pecuniary estimation which, under Section 19(1) of B.P. 129, as amended by R.A. 7691, fall within the exclusive
original jurisdiction of the RTCs. They also contended that they have two main causes of action: for reconveyance
and for recovery of the value of the trees felled by respondents. Hence, the totality of the claims must be considered
which, if computed, allegedly falls within the exclusive original jurisdiction of the RTC.

The trial court denied the respective motions to dismiss of respondents.[15] The respondents filed a Joint Motion
for Reconsideration,[16] to no avail.[17]

Dissatisfied, respondents jointly filed a Petition for Certiorari, Prohibition and Preliminary Injunction with Prayer for
Issuance of Restraining Order Ex Parte[18] with the CA, docketed as CA-G.R. SP No. 59499. In its Decision,[19] the
CA reversed the resolutions and order of the trial court. It held that even assuming that the complaints state a cause
of action, the same have been barred by the statute of limitations. The CA ruled that an action for reconveyance
based on fraud prescribes in ten (10) years, hence, the instant complaints must be dismissed as they involve titles
issued for at least twenty-two (22) years prior to the filing of the complaints. The CA found it unnecessary to resolve
the other issues.

Hence, this appeal in which petitioners raise the following issues, viz:

FIRST - WHETHER OR NOT RESPONDENT COURT OF APPEALS (FORMER FIRST DIVISION) ERRED IN REVERSING THE
ORDER OF THE COURT A QUO DENYING THE MOTION FOR DISMISSAL, CONSIDERING THE DISMISSAL OF A PARTY
COMPLAINT IS PREMATURE AND TRIAL ON THE MERITS SHOULD BE CONDUCTED TO THRESH OUT EVIDENTIARY
MATTERS.

SECOND - WHETHER OR NOT THE RESPONDENT COURT OF APPEALS (FORMER FIRST DIVISION) ERRED IN DISMISSING
THE PETITIONERS' COMPLAINTS ON [THE] GROUND OF PRESCRIPTION.

THIRD - WHETHER OR NOT THE RESPONDENT COURT OF APPEALS (FORMER FIRST DIVISION) ERRED IN CONCLUDING
THAT THERE IS NO DOCUMENTARY EVIDENCE ON RECORD TO SHOW THAT PETITIONERS OWN THE SUBJECT FOREST
PORTION OF THE PROPERTIES ERRONEOUSLY INCLUDED IN THE TITLES OF PRIVATE RESPONDENTS.

FOURTH - WHETHER OR NOT THE PETITION OF HEREIN PRIVATE RESPONDENTS FILED WITH THE RESPONDENT
COURT OF APPEALS (FORMER FIRST DIVISION) SHOULD HAVE BEEN DISMISSED OUTRIGHTLY FOR PRIVATE
RESPONDENTS' THEREIN FAILURE TO COMPLY WITH THE MANDATORY REQUIREMENT OF SECTION 1 RULE 65 OF
THE RULES OF COURT TO SUBMIT CERTIFIED TRUE COPIES OF THE ASSAILED ORDERS OF THE TRIAL COURT WHICH
RENDERED THEIR PETITION (CA G.R. 59499) DEFICIENT IN FORM AND SUBSTANCE CITING THE CASE OF CATUIRA VS.
COURT OF APPEALS (172 SCRA 136).[20]

In their memorandum,[21] respondents reiterated their arguments in the courts below that: a) the complaints of
the petitioners in the trial court do not state causes of action for reconveyance; b) assuming the complaints state

21
JURISDICTION cases set 5 22

causes of action for reconveyance, the same have already been barred by prescription; c) the RTC does not have
jurisdiction over the subject matter of the instant cases; d) the claims for reconveyance in the complaints are barred
by waiver, abandonment, or otherwise extinguished by laches and estoppel; and e) there is no special reason
warranting a review by this Court.

Since the issue of jurisdiction is determinative of the resolution of the instant case yet the CA skirted the question,
we resolved to require the parties to submit their respective Supplemental Memoranda on the issue of
jurisdiction.[22]

In their Supplemental Memorandum,[23] petitioners contend that the nature of their complaints, as denominated
therein and as borne by their allegations, are suits for reconveyance, or annulment or cancellation of OCTs and
damages. The cases allegedly involve more than just the issue of title and possession since the nullity of the OCTs
issued to respondents and the reconveyance of the subject properties were also raised as issues. Thus, the RTC has
jurisdiction under Section 19(1) of B.P. 129, which provides that the RTC has jurisdiction "[i]n all civil actions in which
the subject of the litigation is incapable of pecuniary estimation." Petitioners cited: a) Raymundo v. CA[24] which set
the criteria for determining whether an action is one not capable of pecuniary estimation; b) Swan v. CA[25] where
it was held that an action for annulment of title is under the jurisdiction of the RTC; c) Santos v. CA[26] where it was
similarly held that an action for annulment of title, reversion and damages was within the jurisdiction of the RTC;
and d) Commodities Storage and ICE Plant Corporation v. CA[27] where it was held that "[w]here the action affects
title to the property, it should be filed in the RTC where the property is located." Petitioners also contend that while
it may be argued that the assessed values of the subject properties are within the original jurisdiction of the
municipal trial court (MTC), they have included in their prayers "any interest included therein" consisting of 49 felled
natural grown trees illegally cut by respondents. Combining the assessed values of the properties as shown by their
respective tax declarations and the estimated value of the trees cut, the total amount prayed by petitioners exceeds
twenty thousand pesos (P20,000.00). Hence, they contend that the RTC has jurisdiction under Section 19(2) of B.P.
129.

Jurisdiction over the subject matter is the power to hear and determine cases of the general class to which the
proceedings in question belong.[28] It is conferred by law and an objection based on this ground cannot be waived
by the parties.[29] To determine whether a court has jurisdiction over the subject matter of a case, it is important
to determine the nature of the cause of action and of the relief sought.[30]

The trial court correctly held that the instant cases involve actions for reconveyance.[31] An action for reconveyance
respects the decree of registration as incontrovertible but seeks the transfer of property, which has been wrongfully
or erroneously registered in other persons' names, to its rightful and legal owners, or to those who claim to have a
better right.[32] There is no special ground for an action for reconveyance. It is enough that the aggrieved party has
a legal claim on the property superior to that of the registered owner[33] and that the property has not yet passed
to the hands of an innocent purchaser for value.[34]

The reliefs sought by the petitioners in the instant cases typify an action for reconveyance. The following are also
the common allegations in the three complaints that are sufficient to constitute causes of action for reconveyance,
viz:

(a) That plaintiff Valeriano S. Concha, Sr. together with his spouse Dorotea Concha have painstakingly preserve[d]
the forest standing in the area [of their 24-hectare homestead] including the four hectares untitled forest land
located at the eastern portion of the forest from 1931 when they were newly married, the date they acquired this
property by occupation or possession;[35]

(b) That spouses Valeriano S. Concha Sr. and Dorotea P. Concha have preserved the forest trees standing in [these
parcels] of land to the exclusion of the defendants Lomocsos or other persons from 1931 up to November 12, 1996
[for Civil Case No. 5188] and January 1997 [for Civil Case Nos. 5433 and 5434] when defendants[,] by force,
intimidation, [and] stealth[,] forcibly entered the premises, illegal[ly] cut, collected, disposed a total of [twenty-one
(21) trees for Civil Case No. 5188, twenty-two (22) trees for Civil Case No. 5433 and six (6) trees for Civil Case No.

22
JURISDICTION cases set 5 23

5434] of various sizes;[36]

(c) That this claim is an assertion that the land is private land or that even assuming it was part of the public domain,
plaintiff had already acquired imperfect title thereto under Sec. 48(b) of [C.A.] No. 141[,] otherwise known as the
Public Land Act[,] as amended by [R.A.] No. [7691];[37]

(d) That [respondents and their predecessors-in-interest knew when they] surreptitiously filed[38] [their respective
patent applications and were issued their respective] free patents and original certificates of title [that the subject
lots belonged to the petitioners];[39]

(e) [That respondents' free patents and the corresponding original certificates of titles were issued] on account of
fraud, deceit, bad faith and misrepresentation;[40] and

(f) The land in question has not been transferred to an innocent purchaser.[41]

These cases may also be considered as actions to remove cloud on one's title as they are intended to procure the
cancellation of an instrument constituting a claim on petitioners' alleged title which was used to injure or vex them
in the enjoyment of their alleged title.[42]

Being in the nature of actions for reconveyance or actions to remove cloud on one's title, the applicable law to
determine which court has jurisdiction is Section 19(2) of B.P. 129, as amended by R.A. No. 7691, viz:

Section 19. Jurisdiction in Civil Cases.-- Regional Trial Courts shall exercise exclusive original jurisdiction: x x x

(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the
assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or for civil actions in Metro
Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts;

x x x.

In the cases at bar, it is undisputed that the subject lots are situated in Cogon, Dipolog City and their assessed values
are less than P20,000.00, to wit:

Civil Case No. Lot No. Assessed Value

5188 6195 P1,030.00

5433 6196-A 4,500.00

5434 6196-B 4,340.00

7529-A 1,880.00.[43]

Hence, the MTC clearly has jurisdiction over the instant cases.

Petitioners' contention that this case is one that is incapable of pecuniary estimation under the exclusive original
jurisdiction of the RTC pursuant to Section 19(1) of B.P. 129 is erroneous.

In a number of cases, we have held that actions for reconveyance[44] of or for cancellation of title[45] to or to quiet
title[46] over real property are actions that fall under the classification of cases that involve "title to, or possession
of, real property, or any interest therein."

23
JURISDICTION cases set 5 24

The original text of Section 19(2) of B.P. 129 as well as its forerunner, Section 44(b) of R.A. 296,[47] as amended,
gave the RTCs (formerly courts of first instance) exclusive original jurisdiction "[i]n all civil actions which involve the
title to, or possession of, real property, or any interest therein, except actions for forcible entry into and unlawful
detainer of lands or buildings, original jurisdiction over which is conferred upon Metropolitan Trial Courts, [MTCs],
and Municipal Circuit Trial Courts (conferred upon the city and municipal courts under R.A. 296, as amended)." Thus,
under the old law, there was no substantial effect on jurisdiction whether a case is one, the subject matter of which
was incapable of pecuniary estimation, under Section 19(1) of B.P. 129 or one involving title to property under
Section 19(2). The distinction between the two classes became crucial with the amendment introduced by R.A. No.
7691[48] in 1994 which expanded the exclusive original jurisdiction of the first level courts to include "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." Thus, under the present law, original jurisdiction over
cases the subject matter of which involves "title to, possession of, real property or any interest therein" under
Section 19(2) of B.P. 129 is divided between the first and second level courts, with the assessed value of the real
property involved as the benchmark. This amendment was introduced to "unclog the overloaded dockets of the
RTCs which would result in the speedier administration of justice."[49]

The cases of Raymundo v. CA[50] and Commodities Storage and ICE Plant Corporation v. CA,[51] relied upon by the
petitioners, are inapplicable to the cases at bar. Raymundo involved a complaint for mandatory injunction, not one
for reconveyance or annulment of title. The bone of contention was whether the case was incapable of pecuniary
estimation considering petitioner's contention that the pecuniary claim of the complaint was only attorney's fees of
P10,000, hence, the MTC had jurisdiction. The Court defined the criterion for determining whether an action is one
that is incapable of pecuniary estimation and held that the issue of whether petitioner violated the provisions of the
Master Deed and Declaration of Restriction of the Corporation is one that is incapable of pecuniary estimation. The
claim for attorney's fees was merely incidental to the principal action, hence, said amount was not determinative of
the court's jurisdiction. Nor can Commodities Storage and ICE Plant Corporation provide any comfort to petitioners
for the issue resolved by the Court in said case was venue and not jurisdiction. The action therein was for damages,
accounting and fixing of redemption period which was filed on October 28, 1994, before the passage of R.A. No.
7691. In resolving the issue of venue, the Court held that "[w]here the action affects title to property, it should be
instituted in the [RTC] where the property is situated. The Sta. Maria Ice Plant & Cold Storage is located in Sta. Maria,
Bulacan. The venue in Civil Case No. 94-727076 was therefore improperly laid."

Worse, the cases of Swan v. CA[52] and Santos v. CA[53] cited by the petitioners, contradict their own position that
the nature of the instant cases falls under Section 19(1) of B.P. 129. The complaints in Swan and Santos were filed
prior to the enactment of R.A. No. 7691. In Swan, the Court held that the action being one for annulment of title,
the RTC had original jurisdiction under Section 19(2) of B.P. 129. In Santos, the Court similarly held that the complaint
for cancellation of title, reversion and damages is also one that involves title to and possession of real property under
Section 19(2) of B.P. 129. Thus, while the Court held that the RTC had jurisdiction, the Court classified actions for
"annulment of title" and "cancellation of title, reversion and damages" as civil actions that involve "title to, or
possession of, real property, or any interest therein" under Section 19(2) of B.P. 129.

Petitioners' contention that the value of the trees cut in the subject properties constitutes "any interest therein (in
the subject properties)" that should be computed in addition to the respective assessed values of the subject
properties is unavailing. Section 19(2) of B.P. 129, as amended by R.A. No. 7691, is clear that the RTC shall exercise
jurisdiction "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)." It is true that the recovery of the
value of the trees cut from the subject properties may be included in the term "any interest therein." However, the
law is emphatic that in determining which court has jurisdiction, it is only the assessed value of the realty involved
that should be computed.[54] In this case, there is no dispute that the assessed values of the subject properties as
shown by their tax declarations are less than P20,000.00. Clearly, jurisdiction over the instant cases belongs not to

24
JURISDICTION cases set 5 25

the RTC but to the MTC.

IN VIEW WHEREOF, the decision of the Court of Appeals is hereby AFFIRMED that the RTC of Dipolog City, Branch 9,
has no jurisdiction in Civil Case Nos. 5188, 5433 and 5434.

No costs.

SO ORDERED.

25
JURISDICTION cases set 5 26

FILOMENA CABLING, Petitioner,

vs.

RODRIGO DANGCALAN, Respondent.

Present:

SERENO, CJ, Chairperson,

LEONARDO-DE CASTRO,
BERSAMIN,
PERLAS-BERNABE and
CAGUIOA,JJ
G.R. No. 187696 | 2016-06-15
DECISION

SERENO, CJ:

Before this Court is a Petition for Review on Certiorari assailing the Court of Appeals (CA) Decision 1 declaring void
for lack jurisdiction the Decision2 issued by the 2nd Municipal Circuit Trial Court (MCTC) of Malitbog-Tomas Oppus,
Southern Leyte, as well as the Decision3 rendered by Branch 25, Regional Trial Court (RTC) of Maasin City, Southern
Leyte.

ANTECEDENT FACTS

This case stemmed from the Complaint for recovery of possession and damages filed by Filomena Cabling (petitioner)
against Rodrigo Dangcalan (respondent) over respondent's alleged encroachment on petitioner's property.

In her Complaint,4 petitioner alleged that she owned a 125-squaremeter parcel of land located at San Vicente,
Malitbog, Southern Leyte. It was denominated as Lot No. 5056 and had an assessed value of P2, 100. Adjoining her
property was a parcel of land that respondent had bought from her brother, Gerardo Montajes. Despite knowing
the boundaries of their respective properties, however, respondent constructed a perimeter fence that encroached
on petitioner's land. After several unheeded demands for respondent to remove the encroachment and a failed
conference before the Lupong Tagapamayapa, petitioner filed the Complaint before the MCTC in May 2001.5

Respondent denied any encroachment on petitioner's property and raised prescription as an affirmative
defense.6 He claimed that he had constructed the perimeter fence together with his house way back in 1987, and
that petitioner knew about it. She had actually observed some phases of the construction to ensure that it would
not exceed their property boundaries. Yet, petitioner filed her Complaint only in 2001, which was beyond the 10-
year period for acquisitive prescription under Article 1134 of the New Civil Code.7

RULINGS OF THE MCTC AND THE RTC

After trial, the MCTC rendered judgment in favor of petitioner. Relying on the sketch plan and the testimony of the

26
JURISDICTION cases set 5 27

court-appointed commissioner, it ruled that respondent's perimeter fence had indeed encroached on some 13
square meters of petitioner's property. The court further ruled that respondent was a builder in bad faith, because
he did not verify the actual boundaries of the lot that he had purchased from petitioner's brother. Respondent had
the lot titled under his name in 1988, but it was surveyed only in August 2001. 8

The dispositive portion of the MCTC Decision reads:

WHEREFORE, in the light of the foregoing considerations, the Court hereby renders judgment in favor of the plaintiff,
ordering the defendant of the following to wit:

1. Surrendering the defendant's possession of the portion of land in question to plaintiff, the true owner of the
portion of land, and as defendant is a builder in bad faith loses what was built on said portion without right to
indemnity. (Art. 448, Civil Code of the Philippines);

2. To pay the plaintiff of the monthly rental at P50.00 per month for the possession of said portion in question
starting from the time the defendant demanded by the plaintiff to vacate up to the time the former actually vacate;
and

3. To pay the plaintiff for moral damages in the amount of P20,000, exemplary damages in the amount of Pl 0,000
and actual damages in the amount of P2,000.00 and

4. To pay the costs of suit.9

Upon appeal by respondent, however, the RTC ruled differently. Unlike the MCTC, it did not give credence to the
commissioner's sketch plan. The RTC noted that the sketch plan had no accompanying Commissioner's Report, and
that the basis of the survey was not clear. It also ruled that the MCTC should have first ruled on the issue of
prescription because respondent had raised it in a timely manner, albeit via an Amended Answer. 10

The dispositive portion of the RTC Decision reads:

WHEREFORE, judgment is hereby rendered reversing the decision of the lower court declaring:

1. That the action has already prescribed and/or that plaintiff was already in laches when this action was filed in
1990, and defendant has already acquired the portion in litigation by prescription;

2. That when defendant built the concrete perimeter fence on the lot in litigation in August 1987, he was a builder
in good faith;

3. No pronouncement as to damages and costs. 11

CA RULING

Petitioner then filed a Petition for Review under Rule 42 before the CA, 12raising the following issues:

WHETHER THE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT OF THE PETITIONER ON THE GROUND OF
ACQUISITIVE PRESCRIPTION AND EXTINCTIVE PRESCRIPTION.

II

WHETHER THE TRIAL COURT ERRED IN DECLARING THAT THE COMPLAINT OF THE PETITIONER IS BARRED BY
LACHES.

27
JURISDICTION cases set 5 28

III

WHETHER THE TRIAL COURT ERRED IN DECLARING THAT THE RESPONDENT IS A BUILDER IN GOOD FAITH. 13

On 24 January 2008, the CA denied the Petition and annulled both the RTC and MCTC Decisions for lack of
jurisdiction.14 Instead of ruling on the issues presented by petitioner, the appellate court held that the threshold
question was whether the MCTC had jurisdiction over petitioner's complaint. After examining the averments therein,
the CA ruled that the MCTC had no jurisdiction because the Complaint was clearly an accion publiciana. As such, it
was a plenary action for the recovery of the real right of possession, which properly fell under the RTC's jurisdiction.
Accordingly, all proceedings in petitioner's Complaint, including her appeal before the RTC, were invalid and the
decisions rendered thereon could be struck down at any time. 15

The dispositive portion of the CA Decision reads:

WHEREFORE, the petition is DENIED. The Decision of the 2nd Municipal Circuit Trial Court (MCTC) of Malitbog-Tomas
Oppus, Southern Leyte dated June 2, 2004 and the January 17, 2005 Decision of the Regional Trial Court, 8th Judicial
Region, Branch 25, Maasin City reversing the Decision of the MCTC are BOTH declared NULL and VOID for lack of
jurisdiction, and the instant Complaint for recovery of possession with damages is DISMISSED without prejudice. 16

On 1 April 2009, the CA denied petitioner's Motion for Reconsideration. 17Hence, this Petition.

ISSUE

The only legal issue We shall resolve is whether the CA erred in nullifying the RTC and the MCTC Decisions on the
ground that the MCTC had no jurisdiction over petitioner's Complaint for accion publiciana.

COURT RULING

We GRANT the petition.

It is no longer good law that all cases for recovery of possession or accion publiciana lie with the RTC, regardless of
the value of the property.18

As early as 2001, this Court had already declared that all cases involving title to or possession of real property with
an assessed value of less than P20,000, if outside Metro Manila, fall under the original jurisdiction of the municipal
trial court.19 This pronouncement was based on Republic Act No. 7691, 20 which was approved by Congress on 25
March 1994.

Jurisdiction over civil actions involving title to or possession of real property or interest therein, as set forth in
Sections 19 (2) and 33 (3) of Batas Pambansa Bilang (B.P. Big.) 129, 21 as amended by Republic Act No. 7691, is as
follows:

SECTION 19. Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive original jurisdiction:

xx xx

(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 [t]wenty thousand pesos (P20,000.00) or for civil actions in Metro
Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts;

28
JURISDICTION cases set 5 29

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:

xx xx

(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 [t]wenty 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.

In Laresma v. A be Ilana,22 We clarified that the actions envisaged in the aforequoted provisions are accion
publiciana and reivindicatoria. To determine which court has jurisdiction over the action, the complaint must allege
the assessed value of the real property subject of the complaint. The Court explained further in Penta Pacific Realty
Corporation v. Ley Construction and Development Corporation 23 that its jurisdiction would now be determined by
the assessed value of the disputed land, or of the adjacent lots if it is not declared for taxation purposes. If the
assessed value is not alleged in the complaint, the action should be dismissed for lack of jurisdiction. The reason
behind this rule is that the trial court is not afforded the means of determining from the allegations of the basic
pleading whether jurisdiction over the subject matter of the action pertains to it or to another court. After all, courts
cannot take judicial notice of the assessed or market value oflands. 24

Clearly, the CA erred in nullifying both the RTC and the MCTC decisions.

Jurisdiction over the subject matter of a case is conferred by law and determined by the allegations in the complaint,
as well as by the character of the reliefs sought. Once it is vested by the allegations in the complaint, jurisdiction
remains vested in the trial court irrespective of whether or not the plaintiff is entitled to recover upon all or some of
the claims asserted therein.25As the CA has correctly held, the allegations in the Complaint filed by petitioner
sufficiently made out a case for recovery of possession or accion publiciana. The same cannot be said, however, of
the ultimate outcome of her appeal from the RTC Decision. The MCTC correctly exercised its exclusive and original
jurisdiction in finding for petitioner as the plaintiff. On the other hand, the appeal of respondent, as the defendant,
properly fell under the appellate jurisdiction of the RTC, under Section 22 of B.P. Blg. 129 as amended. Hence, neither
decision can be struck down for being a total nullity.

Petitioner now argues that the CA's dismissal of her Complaint without prejudice to the filing of another case before
the RTC, would only force her to re-litigate the same issues that the MCTC has already thoroughly considered.
Additionally, she contends that the RTC Decision was not in accord with the applicable provisions of the New Civil
Code. She claims that respondent cannot be deemed a builder in good faith, because he failed to verify the actual
boundaries of his property prior to the construction of his perimeter fence. Further, neither prescription nor laches
applies, because petitioner filed her Complaint in 2001, which was well within the 30-year prescriptive period set
forth in Article 1141 of the New Civil Code for real actions over immovables. 26For these reasons, she urges us to
reinstate the MCTC Decision.27

Respondent, on the other hand, has not filed any comment despite Our repeated directives to his counsel on
record.28

Suffice it to say that the errors ascribed by petitioner to the RTC Decision are factual issues that properly belong to
the jurisdiction of the CA. The test of whether a question is one of law or of fact is whether the appellate court can
determine the issue raised without reviewing or evaluating the evidence. If so, it is a question of law; otherwise it is
a question of fact.29

29
JURISDICTION cases set 5 30

Good faith is a question of fact that must be proved.30 Similarly, the question of prescription of an action involves
the ascertainment of factual matters, such as the date when the period to bring the action commenced to run. 31

We resolve only questions of law; We do not try facts or examine testimonial or documentary evidence on
record.32 We may have at times opted for the relaxation of the application of procedural rules, but we have resorted
to this option only under exceptional circumstances, such as when:

(a) the findings are grounded entirely on speculation, surmises, or conjectures;

(b) the inference made is manifestly mistaken, absurd, or impossible;

(c) there is grave abuse of discretion;

(d) the judgment is based on a misapprehension of facts;

(e) the findings of fact are conflicting;

(f) in making its findings, the CA went beyond the issues of the case, or its findings are contrary to the admissions of
both the appellant and the appellee;

(g)the CA's findings are contrary to those of the trial court;

(h) the findings are conclusions without a citation of the specific evidence on which they are based;

(i) the facts set forth in the petition, as well as in the petitioner's main and reply briefs, are not disputed by the
respondent;

(j) the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on
record; or

(k) the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered,
would justify a different conclusion.33

None of the above circumstances, however, are extant in this case. The simple reason is that the CA opted to gloss
over the factual issues raised by petitioner on the wrong premise that the decisions of the trial courts were void.

WHEREFORE, premises considered, the Petition for Review on Certiorari is GRANTED. The Court of Appeals Decision
dated 24 January 2008 and Resolution dated 1 April 2009 in CA-G.R. SP No. 88408 are REVERSED and SET ASIDE. The
case is REMANDED to the Court of Appeals for the prompt resolution of the case on the merits.

SO ORDERED.

30
JURISDICTION cases set 5 31

HEIRS OF SPOUSES TEOFILO M. RETERTA and ELISA RETERTA, namely: EDUARDO M. RETERTA, CONSUELO M.
RETERTA, and AVELINA M. RETERTA, Petitioners,vs.SPOUSES LORENZO MORES and VIRGINIA LOPEZ,
Respondents.
G.R. No. 159941 | 2011-08-17
FIRST DIVISION
DECISION

BERSAMIN, J.:

The original and exclusive jurisdiction over a complaint for quieting of title and reconveyance involving friar land
belongs to either the Regional Trial Court (RTC) or the Municipal Trial Court (MTC). Hence, the dismissal of such a
complaint on the ground of lack of jurisdiction due to the land in litis being friar land under the exclusive jurisdiction
of the Land Management Bureau (LMB) amounts to manifest grave abuse of discretion that can be corrected through
certiorari.

The petitioners, whose complaint for quieting of title and reconveyance the RTC had dismissed, had challenged the
dismissal by petition for certiorari, but the Court of Appeals (CA) dismissed their petition on the ground that certiorari
was not a substitute for an appeal, the proper recourse against the dismissal. They now appeal that ruling of the CA
promulgated on April 25, 2003.1

Antecedents

On May 2, 2000, the petitioners commenced an action for quieting of title and reconveyance in the RTC in Trece
Martires City (Civil Case No. TM-983),2averring that they were the true and real owners of the parcel of land (the
land) situated in Trez Cruzes, Tanza, Cavite, containing an area of 47,708 square meters, having inherited the land
from their father who had died on July 11, 1983; that their late father had been the grantee of the land by virtue of
his occupation and cultivation; that their late father and his predecessors in interest had been in open, exclusive,
notorious, and continuous possession of the land for more than 30 years; that they had discovered in 1999 an
affidavit dated March 1, 1966 that their father had purportedly executed whereby he had waived his rights, interests,
and participation in the land; that by virtue of the affidavit, Sales Certificate No. V-769 had been issued in favor of
respondent Lorenzo Mores by the then Department of Agriculture and Natural Resources; and that Transfer
Certificate of Title No. T-64071 had later issued to the respondents.

On August 1, 2000, the respondents, as defendants, filed a motion to dismiss, insisting that the RTC had no
jurisdiction to take cognizance of Civil Case No. TM-983 due to the land being friar land, and that the petitioners had
no legal personality to commence Civil Case No. TM-983.

On October 29, 2001, the RTC granted the motion to dismiss, holding:3

Considering that plaintiffs in this case sought the review of the propriety of the grant of lot 2938 of the Sta. Cruz de
Malabon Friar Lands Estate by the Lands Management Bureau of the defendant Lorenzo Mores through the use of
the forged Affidavit and Sales Certificate No. V-769 which eventually led to the issuance of T.C.T. No. T-64071 to
defendant Lorenzo Mores and wife Virginia Mores, and considering further that the land subject of this case is a friar
land and not land of the public domain, consequently Act No. 1120 is the law prevailing on the matter which gives
to the Director of Lands the exclusive administration and disposition of Friar Lands. More so, the determination
whether or not fraud had been committed in the procurement of the sales certificate rests to the exclusive power

31
JURISDICTION cases set 5 32

of the Director of Lands. Hence this Court is of the opinion that it has no jurisdiction over the nature of this action.
On the second ground relied upon by the defendants in their Motion To Dismiss, suffice it to state that the Court
deemed not to discuss the same.

IN VIEW OF THE FOREGOING, let this instant case be dismissed as it is hereby dismissed.

SO ORDERED.

The petitioners then timely filed a motion for reconsideration, but the RTC denied their motion for reconsideration
on February 21, 2002.4

On May 15, 2002, therefore, the petitioners assailed the dismissal via petition for certiorari, but the CA dismissed
the petition on April 25, 2003, holding: 5

Thus, the basic requisite for the special civil action of certiorari to lie is that there is no appeal, nor any plain, speedy
and adequate remedy in the ordinary course of law.

In the case at bench, when the court rendered the assailed decision, the remedy of the petitioners was to have
appealed the same to this Court. But petitioners did not. Instead they filed the present special civil action for
certiorari on May 15, 2002 after the decision of the court a quo has become final.

The Order dismissing the case was issued by the court a quo on 29 October 2001, which Order was received by the
petitioners on November 16, 2001. Petitioners filed a motion for reconsideration dated November 26, 2001 but the
same was denied by the court a quo on 21 February 2002. The Order denying the motion for reconsideration was
received by the petitioners on 20 March 2002.

Petitioners filed this petition for certiorari on May 15, 2002. Certiorari, however cannot be used as a substitute for
the lost remedy of appeal.

In Bernardo vs. Court of Appeals, 275 SCRA 423, the Supreme Court had the following to say:

"We have time and again reminded members of the bench and bar that a special civil action for certiorari under Rule
65 lies only when "there is no appeal nor plain, speedy and adequate remedy in the ordinary course of law."
Certiorari cannot be allowed when a party to a case fails to appeal a judgment despite the availability of that remedy,
certiorari not being a substitute for lost appeal. The remedies of appeal and certiorari are mutually exclusive and not
alternative or successive."

WHEREFORE, in view of the foregoing, the instant petition is hereby DISMISSED.

SO ORDERED.

On September 9, 2003, the CA denied the petitioners' motion for reconsideration. 6

32
JURISDICTION cases set 5 33

Hence, this appeal.

Issues

The petitioners submit that:

I.
IT IS REVERSIBLE ERROR OF THE HONORABLE COURT OF APPEALS TO DISREGARD THE PROVISIONS OF SECTION 1,
RULE 41, SECOND PARAGRAPH, SUBPARAGRAPH (a), AND SECTION 9, RULE 37, 1997 RULES OF COURT;

II.
IT IS REVERSIBLE ERROR FOR THE HONORABLE COURT OF APPEALS TO APPLY THE RULING IN THE CASE OF ROSETE
vs. COURT OF APPEALS, 339 SCRA 193, 199, NOTWITHSTANDING THE FACT THAT THE 1997 RULES OF CIVIL
PROCEDURE ALREADY TOOK EFFECT ON JULY 1, 1997.

III.
IT IS REVERSIBLE ERROR FOR THE HONORABLE COURT OF APPEALS IN NOT FINDING THAT THE TRIAL JUDGE GRAVELY
ABUSED ITS DISCRETION WHEN IT DISMISSED THE COMPLAINT RULING THAT IT HAS NO JURISDICTION OVER THE
NATURE OF THE ACTION, AND IN NOT FINDING THAT THE TRIAL JUDGE HAS JURISDICTION OVER THE SAME. 7

Briefly stated, the issue is whether or not the CA erred in dismissing the petition for certiorari.

Ruling

The appeal is meritorious.

1.
Propriety of certiorari as remedy
against dismissal of the action

The CA seems to be correct in dismissing the petition for certiorari, considering that the order granting the
respondents' motion to dismiss was a final, as distinguished from an interlocutory, order against which the proper
remedy was an appeal in due course. Certiorari, as an extraordinary remedy, is not substitute for appeal due to its
being availed of only when there is no appeal, or plain, speedy and adequate remedy in the ordinary course of law. 8

Nonetheless, the petitioners posit that a special civil action for certiorari was their proper remedy to assail the order
of dismissal in light of certain rules of procedure, specifically pointing out that the second paragraph of Section 1 of
Rule 37 of the Rules of Court ("An order denying a motion for new trial or reconsideration is not appealable, the
remedy being an appeal from the judgment or final order") prohibited an appeal of a denial of the motion for
reconsideration, and that the second paragraph of Section 1 of Rule 41 of the Rules of Court ( "No appeal may be
taken from: xxx An order denying a motion for new trial or reconsideration") expressly declared that an order
denying a motion for reconsideration was not appealable. They remind that the third paragraph of Section 1 of Rule
41 expressly provided that in the instances "where the judgment or final order is not appealable, the aggrieved party
may file an appropriate special civil action under Rule 65."

The petitioners' position has no basis.

33
JURISDICTION cases set 5 34

For one, the order that the petitioners really wanted to obtain relief from was the order granting the respondents'
motion to dismiss, not the denial of the motion for reconsideration. The fact that the order granting the motion to
dismiss was a final order for thereby completely disposing of the case, leaving nothing more for the trial court to do
in the action, truly called for an appeal, instead of certiorari, as the correct remedy.

The fundamental distinction between a final judgment or order, on one hand, and an interlocutory order, on the
other hand, has been outlined in Investments, Inc. v. Court of Appeals,9 viz:

The concept of 'final' judgment, as distinguished from one which has 'become final' (or 'executory' as of right [final
and executory]), is definite and settled. A 'final' judgment or order is one that finally disposes of a case, leaving
nothing more to be done by the Court in respect thereto, e.g., an adjudication on the merits which, on the basis of
the evidence presented at the trial declares categorically what the rights and obligations of the parties are and which
party is in the right; or a judgment or order that dismisses an action on the ground, for instance, of res judicata or
prescription. Once rendered, the task of the Court is ended, as far as deciding the controversy or determining the
rights and liabilities of the litigants is concerned. Nothing more remains to be done by the Court except to await the
parties' next move (which among others, may consist of the filing of a motion for new trial or reconsideration, or the
taking of an appeal) and ultimately, of course, to cause the execution of the judgment once it becomes 'final' or, to
use the established and more distinctive term, 'final and executory.'

xxx

Conversely, an order that does not finally dispose of the case, and does not end the Court's task of adjudicating the
parties' contentions and determining their rights and liabilities as regards each other, but obviously indicates that
other things remain to be done by the Court, is 'interlocutory,' e.g., an order denying a motion to dismiss under Rule
16 of the Rules, or granting a motion for extension of time to file a pleading, or authorizing amendment thereof, or
granting or denying applications for postponement, or production or inspection of documents or things, etc. Unlike
a 'final' judgment or order, which is appealable, as above pointed out, an 'interlocutory' order may not be questioned
on appeal except only as part of an appeal that may eventually be taken from the final judgment rendered in the
case.

Moreover, even Section 9 of Rule 37 of the Rules of Court, cited by the petitioners, indicates that the proper remedy
against the denial of the petitioners' motion for reconsideration was an appeal from the final order dismissing the
action upon the respondents' motion to dismiss. The said rule explicitly states thusly:

Section 9. Remedy against order denying a motion for new trial or reconsideration. - An order denying a motion for
new trial or reconsideration is not appealable, the remedy being an appeal from the judgment or final order.

The restriction against an appeal of a denial of a motion for reconsideration independently of a judgment or final
order is logical and reasonable. A motion for reconsideration is not putting forward a new issue, or presenting new
evidence, or changing the theory of the case, but is only seeking a reconsideration of the judgment or final order
based on the same issues, contentions, and evidence either because: (a) the damages awarded are excessive; or (b)
the evidence is insufficient to justify the decision or final order; or (c) the decision or final order is contrary to
law.10 By denying a motion for reconsideration, or by granting it only partially, therefore, a trial court finds no reason
either to reverse or to modify its judgment or final order, and leaves the judgment or final order to stand. The remedy
from the denial is to assail the denial in the course of an appeal of the judgment or final order itself.

34
JURISDICTION cases set 5 35

The enumeration of the orders that were not appealable made in the 1997 version of Section 1, Rule 41 of the Rules
of Court - the version in force at the time when the CA rendered its assailed decision on May 15, 2002 - included an
order denying a motion for new trial or motion for reconsideration, to wit:

Section 1. Subject of appeal. - An appeal may be taken from a judgment or final order that completely disposes of
the case, or of a particular matter therein when declared by these Rules to be appealable.

No appeal may be taken from:

(a) An order denying a motion for new trial or reconsideration;

(b) An order denying a petition for relief or any similar motion seeking relief from judgment;

(c) An interlocutory order;

(d) An order disallowing or dismissing an appeal;

(e) An order denying a motion to set aside a judgment by consent, confession or compromise on the ground of fraud,
mistake or duress, or any other ground vitiating consent;

(f) An order of execution;

(g) A judgment or final order for or against one or more of several parties or in separate claims, counterclaims, cross-
claims and third-party complaints, while the main case is pending, unless the court allows an appeal therefrom; and

(h) An order dismissing an action without prejudice.

In all the above instances where the judgment or final order is not appealable, the aggrieved party may file an
appropriate special civil action under Rule 65. (n)

It is true that Administrative Matter No. 07-7-12-SC, effective December 27, 2007, has since amended Section 1,
Rule 41, supra, by deleting an order denying a motion for new trial or motion for reconsideration from the
enumeration of non-appealable orders, and that such a revision of a procedural rule may be retroactively applied.
However, to reverse the CA on that basis would not be right and proper, simply because the CA correctly applied the
rule of procedure in force at the time when it issued its assailed final order.

2.
RTC or MTC has jurisdiction over the action

The settled rule precluding certiorari as a remedy against the final order when appeal is available notwithstanding,
the Court rules that the CA should have given due course to and granted the petition for certiorari for two
exceptional reasons, namely: (a) the broader interest of justice demanded that certiorari be given due course to
avoid the undeserved grossly unjust result that would befall the petitioners otherwise; and (b) the order of the RTC

35
JURISDICTION cases set 5 36

granting the motion to dismiss on ground of lack of jurisdiction over the subject matter evidently constituted grave
abuse of discretion amounting to excess of jurisdiction.

On occasion, the Court has considered certiorari as the proper remedy despite the availability of appeal, or other
remedy in the ordinary course of law. In Francisco Motors Corporation v. Court of Appeals,11 the Court has declared
that the requirement that there must be no appeal, or any plain speedy and adequate remedy in the ordinary course
of law admits of exceptions, such as: (a) when it is necessary to prevent irreparable damages and injury to a party;
(b) where the trial judge capriciously and whimsically exercised his judgment; (c) where there may be danger of a
failure of justice; (d) where an appeal would be slow, inadequate, and insufficient; (e) where the issue raised is one
purely of law; (f) where public interest is involved; and (g) in case of urgency.

Specifically, the Court has held that the availability of appeal as a remedy does not constitute sufficient ground to
prevent or preclude a party from making use of certiorari if appeal is not an adequate remedy, or an equally
beneficial, or speedy remedy. It is inadequacy, not the mere absence of all other legal remedies and the danger of
failure of justice without the writ, that must usually determine the propriety of certiorari.12 A remedy is plain, speedy
and adequate if it will promptly relieve the petitioner from the injurious effects of the judgment, order, or resolution
of the lower court or agency.13 It is understood, then, that a litigant need not mark time by resorting to the less
speedy remedy of appeal in order to have an order annulled and set aside for being patently void for failure of the
trial court to comply with the Rules of Court.14

Nor should the petitioner be denied the recourse despite certiorari not being available as a proper remedy against
an assailed order, because it is better on balance to look beyond procedural requirements and to overcome the
ordinary disinclination to exercise supervisory powers in order that a void order of a lower court may be controlled
to make it conformable to law and justice.15Verily, the instances in which certiorari will issue cannot be defined,
because to do so is to destroy the comprehensiveness and usefulness of the extraordinary writ. The wide breadth
and range of the discretion of the court are such that authority is not wanting to show that certiorari is more
discretionary than either prohibition or mandamus, and that in the exercise of superintending control over inferior
courts, a superior court is to be guided by all the circumstances of each particular case "as the ends of justice may
require." Thus, the writ will be granted whenever necessary to prevent a substantial wrong or to do substantial
justice.16

The petitioners' complaint - self-styled as being for the "quieting of title and reconveyance, declaration of nullity of
affidavit & Sales Certificate, reconveyance and damages" - would challenge the efficacy of the respondents'
certificate of title under the theory that there had been no valid transfer or assignment from the petitioners'
predecessor in interest to the respondents of the rights or interests in the land due to the affidavit assigning such
rights and interests being a forgery and procured by fraud.

The petitioners' cause of action for reconveyance has support in jurisprudence bearing upon the manner by which
to establish a right in a piece of friar land. According to Arayata v. Joya,17 in order that a transfer of the rights of a
holder of a certificate of sale of friar lands may be legally effective, it is necessary that a formal certificate of transfer
be drawn up and submitted to the Chief of the Bureau of Public Lands for his approval and registration. The law
authorizes no other way of transferring the rights of a holder of a certificate of sale of friar lands. In other words,
where a person considered as a grantee of a piece of friar land transfers his rights thereon, such transfer must
conform to certain requirements of the law. Under Director of Lands v. Rizal,18 the purchaser in the sale of friar lands
under Act No. 1120 is already treated by law as the actual owner of the lot purchased even before the payment of
the full payment price and before the execution of the final deed of conveyance, subject to the obligation to pay in
full the purchase price, the role or position of the Government becoming that of a mere lien holder or mortgagee. 19

36
JURISDICTION cases set 5 37

Thus, pursuant to Section 16 of Act No. 1120,20 had grantee Teofilo Reterta perfected his title, the petitioners as his
heirs would have succeeded him and taken title from him upon his death. By law, therefore, should the execution
of the deed in favor of the respondents be held invalid, the interests of Teofilo Reterta should descend to the
petitioners and the deed should issue in their favor. Adding significance to the petitioners' claim was their allegation
in the complaint that they were in possession of the land. Moreover, as alleged in the petitioners' opposition to the
motion to dismiss of the respondents, Teofilo Reterta had partially paid the price of the land.21

Given the foregoing, the petitioners' complaint made out a good case for reconveyance or reversion, and its
allegations, if duly established, might well warrant the reconveyance of the land from the respondents to the
petitioners. It did not matter that the respondents already held a certificate of title in their names. In essence, an
action for reconveyance respects the incontrovertibility of the decree of registration but seeks the transfer of the
property to its rightful and legal owner on the ground of its having been fraudulently or mistakenly registered in
another person's name. There is no special ground for an action for reconveyance, for it is enough that the aggrieved
party asserts a legal claim in the property superior to the claim of the registered owner, and that the property has
not yet passed to the hands of an innocent purchaser for value. 22 On this score, it is also worthy to stress that the
title of a piece of a friar land obtained by a grantee from the Government without conforming with the requirements
set by the law may be assailed and nullified.

Was the petitioners' action for reconveyance within the jurisdiction of the regular court?

We answer the query in the affirmative.

The law governing jurisdiction is Section 19 (2) of Batas Pambansa Blg. 129,23as amended by Republic Act No.
7691,24 which provides:

Section 19. Jurisdiction in Civil Cases. - Regional Trial Courts shall exercise exclusive original jurisdiction: xxx

xxx

(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the
assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or for civil actions in Metro
Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts;

xxx

Conformably with the provision, because an action for reconveyance or to remove a cloud on one's title involves the
title to, or possession of, real property, or any interest therein, exclusive original jurisdiction over such action
pertained to the RTC, unless the assessed value of the property did not exceed P20,000.00 (in which instance the
MTC having territorial jurisdiction would have exclusive original jurisdiction). Determinative of which regular court
had jurisdiction would be the allegations of the complaint (on the assessed value of the property) and the principal
relief thereby sought.25

37
JURISDICTION cases set 5 38

The respondents' reliance on Section 12 and Section 18 of Act No. 1120 to sustain their position that the Bureau of
Public Lands (now LMB) instead had exclusive jurisdiction was without basis. The provisions read:

Section 12. xxx the Chief of the Bureau of Public Lands shall give the said settler and occupant a certificate which
shall set forth in detail that the Government has agreed to sell to such settler and occupant the amount of land so
held by him, at the price so fixed, payable as provided in this Act at the office of the Chief of Bureau of Public Lands
xxx and that upon the payment of the final installment together with all accrued interest the Government will convey
to such settler and occupant the said land so held by him by proper instrument of conveyance, which shall be issued
and become effective in the manner provided in section one hundred and twenty-two of the Land Registration Act
xxx.

Section 18. No lease or sale made by Chief of the Bureau of Public Lands under the provisions of this Act shall be
valid until approved by the Secretary of the Interior.

As the provisions indicate, the authority of LMB under Act No. 1120, being limited to the administration and
disposition of friar lands, did not include the petitioners' action for reconveyance. LMB ceases to have jurisdiction
once the friar land is disposed of in favor of a private person and title duly issues in the latter's name. By ignoring
the petitioners' showing of its plain error in dismissing Civil Case No. TM-983, and by disregarding the allegations of
the complaint, the RTC acted whimsically and capriciously.

Given all the foregoing, the RTC committed grave abuse of discretion amounting to lack of jurisdiction. The term
grave abuse of discretion connotes whimsical and capricious exercise of judgment as is equivalent to excess, or lack
of jurisdiction.26 The abuse must be so patent and gross as to amount to an evasion of a positive duty or to a virtual
refusal to perform a duty enjoined by law, or to act at all in contemplation of law as where the power is exercised in
an arbitrary and despotic manner by reason of passion or hostility. 27

The dismissal of Civil Case No. TM-983, unless undone, would leave the petitioners bereft of any remedy to protect
their substantial rights or interests in the land. As such, they would suffer grave injustice and irreparable damage. In
that situation, the RTC's dismissal should be annulled through certiorari, for the task of the remedy was to do justice
to the unjustly aggrieved.28

WHEREFORE, the Court grants the petition for certiorari; sets aside the decision the Court of Appeals promulgated
on April 25, 2003; and directs Branch 23 of the Regional Trial Court in Trece Martires City to resume the proceedings
in Civil Case No. TM-983 with dispatch.

The respondents shall pay the costs of suit.

SO ORDERED.

38
JURISDICTION cases set 5 39

SURVIVING HEIRS OF ALFREDO

R. BAUTISTA, namely: EPIFANIA
G. BAUTISTA and ZOEY G.
BAUTISTA,
Petitioners,
vs.
FRANCISCO LINDO and
WELHILMINA LINDO; and HEIRS
OF FILIPINA DAQUIGAN, namely:
MA. LOURDES DAQUIGAN,
IMELDA CATHERINE
DAQUIGAN, IMELDA DAQUIGAN
and CORSINO DAQUIGAN,
REBECCA QUIAMCO and
ANDRES QUIAMCO, ROMULO
LORICA and DELIA LORICA,
GEORGE CAJES and LAURA
CAJES, MELIDA BANEZ and
FRANCISCO BANEZ, MELANIE
GOFREDO, GERV ACIO CAJES and
ISABEL CAJES, EGMEDIO
SEGOVIA and VERGINIA
SEGOVIA, ELSA N. SAM, PEDRO
M. SAM and LINA SAM,
SANTIAGO MENDEZ and MINA
MENDEZ, HELEN M. BURTON and
LEONARDO BURTON, JOSE
JACINTO and BIENVENIDA
JACINTO, IMELDA DAQUIGAN,
LEO MA TIGA and ALICIA
MATIGA, FLORENCIO ACEDO
JR., and LYLA VALERIO,
Respondents.
G.R. No. 208232 | 2014-03-10

39
JURISDICTION cases set 5 40

THIRD DIVISION

DECISION

VELASCO, JR., J.:

The Case

This is a Petition for Review on Certiorari under Rule 45 assailing the April 25, 2013 Order of the Regional Trial Court
(RTC) in Civil Case No. (1798)-021 as well as its Order of July 3, 2013 denying reconsideration.

The Facts

Alfredo R. Bautista (Bautista), petitioner’s predecessor, inherited in 1983 a free-patent land located in Poblacion,
Lupon, Davao Oriental and covered by Original Certificate of Title (OCT) No. (1572) P-6144. A few years later, he
subdivided the property and sold it to several vendees, herein respondents, via a notarized deed of absolute sale
dated May 30, 1991. Two months later, OCT No. (1572) P-6144 was canceled and Transfer Certificates of Title (TCTs)
were issued in favor of the vendees.1

Three years after the sale, or on August 5, 1994, Bautista filed a complaint for repurchase against respondents before
the RTC, Branch 32, Lupon, Davao Oriental, docketed as Civil Case No. 1798,2 anchoring his cause of action on Section
119 of Commonwealth Act No. (CA) 141, otherwise known as the “Public Land Act,” which reads:

SECTION 119. Every conveyance of land acquired under the free patent or homestead provisions, when proper, shall
be subject to repurchase by the applicant, his widow, or legal heirs, within a period of five years from the date of
the conveyance.

Respondents, in their Answer, raised lack of cause of action, estoppel, prescription, and laches, as defenses.

Meanwhile, during the pendency of the case, Bautista died and was substituted by petitioner Epifania G. Bautista
(Epifania).

Respondents Francisco and Welhilmina Lindo later entered into a compromise agreement with petitioners, whereby
they agreed to cede to Epifania a three thousand two hundred and thirty square meter (3,230 sq.m.)-portion of the
property as well as to waive, abandon, surrender, and withdraw all claims and counterclaims against each other. The
compromise was approved by the RTC in its Decision dated January 27, 2011, the fallo of which reads:

WHEREFORE, a DECISION is hereby rendered based on the above-quoted Compromise Agreement and the parties
are enjoined to strictly comply with the terms and conditions of the same.

SO ORDERED.3

Other respondents, however, filed a Motion to Dismiss4 dated February 4, 2013, alleging that the complaint failed
to state the value of the property sought to be recovered. Moreover, they asserted that the total selling price of all
the properties is only sixteen thousand five hundred pesos (PhP 16,500), and the selling price or market value of a
property is always higher than its assessed value. Since Batas Pambansa Blg. (BP) 129, as amended, grants jurisdiction
to the RTCs over civil actions involving title to or possession of real property or interest therein where the assessed
value is more than PhP 20,000, then the RTC has no jurisdiction over the complaint in question since the property
which Bautista seeks to repurchase is below the PhP 20,000 jurisdictional ceiling.

RTC Ruling5

40
JURISDICTION cases set 5 41

Acting on the motion, the RTC issued the assailed order dismissing the complaint for lack of jurisdiction. The trial
court found that Bautista failed to allege in his complaint that the value of the subject property exceeds 20 thousand
pesos. Furthermore, what was only stated therein was that the total and full refund of the purchase price of the
property is PhP 16,500. This omission was considered by the RTC as fatal to the case considering that in real actions,
jurisdictional amount is determinative of whether it is the municipal trial court or the RTC that has jurisdiction over
the case.

With respect to the belated filing of the motion, the RTC, citing Cosco Philippines Shipping, Inc. v. Kemper Insurance
Company,6 held that a motion to dismiss for lack of jurisdiction may be filed at any stage of the proceedings, even
on appeal, and is not lost by waiver or by estoppel. The dispositive portion of the assailed Order reads:

WHEREFORE, the complaint for Repurchase, Consignation, with Preliminary Injunction and Damages is hereby
dismissed for lack of jurisdiction.

SO ORDERED.7

Assignment of Errors

Their motion for reconsideration having been denied, petitioners now seek recourse before this Court with the
following assigned errors:

I
THE PUBLIC RESPONDENT RTC ERRED IN ADMITTING THE MOTION TO DISMISS DATED FEBRUARY 4, 2013,
BELATEDLY FILED BY THE PRIVATE RESPONDENTS IN THE CASE.

II
THE PUBLIC RESPONDENT RTC ERRED IN HOLDING THAT THE INSTANT CASE FOR REPURCHASE IS A REAL ACTION.8

The Issue

Stated differently, the issue for the Court’s resolution is: whether or not the RTC erred in granting the motion for
the dismissal of the case on the ground of lack of jurisdiction over the subject matter.

Arguments

Petitioners argue that respondents belatedly filed their Motion to Dismiss and are now estopped from seeking the
dismissal of the case, it having been filed nine (9) years after the filing of the complaint and after they have actively
participated in the proceedings. Additionally, they allege that an action for repurchase is not a real action, but one
incapable of pecuniary estimation, it being founded on privity of contract between the parties. According to
petitioners, what they seek is the enforcement of their right to repurchase the subject property under Section 119
of CA 141.

Respondents, for their part, maintain that since the land is no longer devoted to agriculture, the right of repurchase
under said law can no longer be availed of, citing Santana v. Mariñas.9 Furthermore, they suggest that petitioners
intend to resell the property for a higher profit, thus, the attempt to repurchase. This, according to respondents,
goes against the policy and is not in keeping with the spirit of CA 141 which is the preservation of the land
gratuitously given to patentees by the State as a reward for their labor in cultivating the property. Also, the Deed of
Absolute Sale presented in evidence by Bautista was unilaterally executed by him and was not signed by
respondents. Lastly, respondents argue that repurchase is a real action capable of pecuniary estimation.

Our Ruling

The petition is meritorious.

41
JURISDICTION cases set 5 42

Jurisdiction of courts is granted by the Constitution and pertinent laws.

Jurisdiction of RTCs, as may be relevant to the instant petition, is provided in Sec. 19 of BP 129, which reads:

Sec. 19. Jurisdiction in civil cases.?Regional Trial Courts shall exercise exclusive original jurisdiction:

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

2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the
assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or, for civil actions in Metro
Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts.

On the other hand, jurisdiction of first level courts is prescribed in Sec. 33 of BP 129, which provides:

Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in civil
cases.?Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise:

xxxx

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.

The core issue is whether the action filed by petitioners is one involving title to or possession of real property or any
interest therein or one incapable of pecuniary estimation.

The course of action embodied in the complaint by the present petitioners’ predecessor, Alfredo R. Bautista, is to
enforce his right to repurchase the lots he formerly owned pursuant to the right of a free-patent holder under Sec.
119 of CA 141 or the Public Land Act.

The Court rules that the complaint to redeem a land subject of a free patent is a civil action incapable of pecuniary
estimation.

It is a well-settled rule that jurisdiction of the court is determined by the allegations in the complaint and the
character of the relief sought.10 In this regard, the Court, in Russell v. Vestil,11 wrote 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 RTCs would depend on the amount of the claim.” But where the basic issue is something other than
the right to recover a sum of money, where the money claim is purely incidental to, or a consequence of, the principal
relief sought, this Court has considered such actions as cases where the subject of the litigation may not be estimated
in terms of money, and, hence, are incapable of pecuniary estimation. These cases are cognizable exclusively by
RTCs.12

Settled jurisprudence considers some civil actions as incapable of pecuniary estimation, viz:

1. Actions for specific performance;

42
JURISDICTION cases set 5 43

2. Actions for support which will require the determination of the civil status;
3. The right to support of the plaintiff;
4. Those for the annulment of decisions of lower courts;
5. Those for the rescission or reformation of contracts;13
6. Interpretation of a contractual stipulation.14

The Court finds that the instant cause of action to redeem the land is one for specific performance.

The facts are clear that Bautista sold to respondents his lots which were covered by a free patent. While the deeds
of sale do not explicitly contain the stipulation that the sale is subject to repurchase by the applicant within a period
of five (5) years from the date of conveyance pursuant to Sec. 119 of CA 141, still, such legal provision is deemed
integrated and made part of the deed of sale as prescribed by law. It is basic that the law is deemed written into
every contract.15 Although a contract is the law between the parties, the provisions of positive law which regulate
contracts are deemed written therein and shall limit and govern the relations between the parties.16 Thus, it is a
binding prestation in favor of Bautista which he may seek to enforce. That is precisely what he did. He filed a
complaint to enforce his right granted by law to recover the lot subject of free patent.

Ergo, it is clear that his action is for specific performance, or if not strictly such action, then it is akin or analogous to
one of specific performance. Such being the case, his action for specific performance is incapable of pecuniary
estimation and cognizable by the RTC.

Respondents argue that Bautista’s action is one involving title to or possession of real property or any interests
therein and since the selling price is less than PhP 20,000, then jurisdiction is lodged with the MTC. They rely on Sec.
33 of BP 129.

Republic Act No. 769117 amended Sec. 33 of BP 129 and gave Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts 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 (PhP 20,000) or, in civil actions in Metro Manila, where such assessed value does not exceed
fifty thousand pesos (PhP 50,000) exclusive of interest, damages of whatever kind, attorney’s fees, litigation
expenses and costs.

At first blush, it appears that the action filed by Bautista involves title to or possession of the lots he sold to
respondents. Since the total selling price is less than PhP 20,000, then the MTC, not the RTC, has jurisdiction over
the case. This proposition is incorrect for the re-acquisition of the lots by Bautista or herein successors-in-interests,
the present petitioners, is but incidental to and an offshoot of the exercise of the right by the latter to redeem said
lots pursuant to Sec. 119 of CA 141. The reconveyance of the title to petitioners is solely dependent on the exercise
of such right to repurchase the lots in question and is not the principal or main relief or remedy sought. Thus, the
action of petitioners is, in reality, incapable of pecuniary estimation, and the reconveyance of the lot is merely the
outcome of the performance of the obligation to return the property conformably to the express provision of CA
141.

Even if we treat the present action as one involving title to real property or an interest therein which falls under the
jurisdiction of the first level court under Sec. 33 of BP 129, as the total selling price is only PhP 16,000 way below the
PhP 20,000 ceiling, still, the postulation of respondents that MTC has jurisdiction will not hold water. This is because
respondents have actually participated in the proceedings before the RTC and aggressively defended their position,
and by virtue of which they are already barred to question the jurisdiction of the RTC following the principle of
jurisdiction by estoppel.

In Heirs of Jose Fernando v. De Belen, it was held that the party raising defenses to the complaint, actively
participating in the proceedings by filing pleadings, presenting his evidence, and invoking its authority by asking for
an affirmative relief is deemed estopped from questioning the jurisdiction of the court.18

43
JURISDICTION cases set 5 44

Here, we note that aside from the belated filing of the motion to dismiss––it having been filed nine (9) years from
the filing of the complaint––respondents actively participated in the proceedings through the following acts:

1. By filing their Answer and Opposition to the Prayer for Injunction19 dated September 29, 1994 whereby they even
interposed counterclaims, specifically: PhP 501,000 for unpaid survey accounts, PhP 100,000 each as litigation
expenses, PhP 200,000 and PhP 3,000 per daily appearance by way of attorney’s fees, PhP 500,000 as moral
damages, PhP 100,000 by way of exemplary damages, and costs of suit;
2. By participating in Pre-trial;
3. By moving for the postponement of their presentation of evidence;20
4. By presenting their witness;21 and
5. By submitting the compromise agreement for approval.22

Having fully participated in all stages of the case, and even invoking the RTC’s authority by asking for affirmative
reliefs, respondents can no longer assail the jurisdiction of the said trial court. Simply put, considering the extent of
their participation in the case, they are, as they should be, considered estopped from raising lack of jurisdiction as a
ground for the dismissal of the action.

WHEREFORE, premises considered, the instant petition is hereby GRANTED. The April 25, 2013 and July 3, 2013
Orders of the Regional Trial Court in Civil Case No. (1798)-021 are hereby REVERSED and SET ASIDE.

The Regional Trial Court, Branch 32 in Lupon, Davao Oriental is ORDERED to proceed with dispatch in resolving Civil
Case No. (1798)- 021.

No pronouncement as to costs.

SO ORDERED.

44
JURISDICTION cases set 5 45

BARANGAY SAN ROQUE, TALISAY, CEBU, petitioner, vs. Heirs of FRANCISCO PASTOR, namely: EUGENIO
SYLIANCO, TEODORO SYLIANCO, ISABEL SYLIANCO, EUGENIA S. ONG, LAWRENCE SYLIANCO, LAWSON SYLIANCO,
LAWINA S. NOTARIO, LEONARDO SYLIANCO JR. and LAWFORD SYLIANCO, respondents.
G.R. No. 138896 | 2000-06-20
DECISION

PANGANIBAN, J.:

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 Order1 [Penned by Judge Jose P.
Soberano Jr.] 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:

"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 [Rollo, p. 22.]

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 [Presided by Judge Mario V.
Manayon.] 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 [Rollo, pp. 20-21.]

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

45
JURISDICTION cases set 5 46

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 [Rollo, p. 22.]

Aggrieved, petitioner appealed directly to this Court, raising a pure question of law.6 [The case was deemed
submitted for decision on March 16, 2000, upon receipt by this Court of petitioner's Memorandum, signed by Atty.
Marino E. Martinquilla of the Cebu Provincial Legal Office. Respondents' Memorandum, signed by Atty. Eustacio Ch.
Veloso, was filed on March 8, 2000.] 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 [Rollo, p. 25.] In a subsequent Resolution dated
October 6, 1999, the Court reinstated the Petition.8 [Ibid., p. 31.]

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 [Lapitan v. Scandia,
Inc., 24 SCRA 479, 481, July 31, 1968, per Reyes, J.B.L., J.; cited in De Leon v. Court of Appeals, 287 SCRA 94, 99,
March 6, 1998.]

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 [Republic v. La Orden
de PP. Benedictinos de Filipinas, 1 SCRA 646, February 28, 1961.] In National Power Corporation v. Jocson,12 [206
SCRA 520, 536, February 25, 1992, per Davide Jr., J.] 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

46
JURISDICTION cases set 5 47

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.13
[Moday v. Court of Appeals, 268 SCRA 586, February 20, 1997.] 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 [105 Phil. 409, March 31, 1959, per Padilla, J.] 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 [Section 44, Judiciary Act of 1948.] The 1997
amendments to the Rules of Court were not intended to change these jurisprudential precedents.

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 [Jose Feria, 1997 Rules of Civil Procedure, p. 18.]

Their reliance is misplaced. Justice Feria sought merely to distinguish between real and personal actions. His
discussion on this point pertained to the nature of actions, not to the jurisdiction of courts. In fact, in his pre-bar
lectures, he emphasizes that jurisdiction over eminent domain cases is still within the RTCs under the 1997 Rules.

To emphasize, the question in the present suit is whether the government may expropriate private property under
the given set of circumstances. The government does not dispute respondents' title to or possession of the same.
Indeed, it is not a question of who has a better title or right, for the government does not even claim that it has a
title to the property. It merely asserts its inherent sovereign power to "appropriate and control individual property
for the public benefit, as the public necessity, convenience or welfare may demand."17 [Herrera, Remedial Law, Vol.
III, 1999 ed., p. 312, citing Cooley's Constitutional Limit, 8th ed., 1110.]

WHEREFORE, the Petition is hereby GRANTED and the assailed Orders SET ASIDE. The Regional Trial Court is directed
to HEAR the case. No costs.

SO ORDERED.

47
JURISDICTION cases set 5 48

PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR), represented by ATTY. CARLOS R. BAUTISTA,
JR., Petitioner, vs. Fontana Development Corporation, Respondent.
G.R. No. 187972 | 2010-06-29
Tagged under keywords

DECISION

VELASCO, JR., J.:

In this petition for review under Rule 45, the May 19, 2009 Decision of the Court of Appeals (CA) in CA-G.R. SP No.
107247 is questioned for not nullifying the November 18, 2008 Order of the Regional Trial Court (RTC) in Manila in
Civil Case No. 08-120338 that issued a temporary restraining order (TRO) against petitioner Philippine Amusement
and Gaming Corporation (PAGCOR), barring PAGCOR from committing acts that allegedly violate the rights of
respondent Fontana Development Corporation (FDC) under a December 23, 1999 Memorandum of Agreement
(MOA).

The antecedents as culled by the CA from the records are:

Petitioner Philippine Amusement and Gaming Corporation (PAGCOR) is a government owned and controlled
corporation created under Presidential Decree (PD) No. 1869 to enable the Government to regulate and centralize
all games of chance authorized by existing franchise or permitted by law. Section 10 thereof conferred on PAGCOR
a franchise of twenty-five (25) years or until July 11, 2008, renewable for another twenty-five (25) years. Under
Section 9 thereof, it was given regulatory powers over persons and/or entities with contract or franchise with it,
viz:

SECTION 9. Regulatory Power.-The Corporation shall maintain a Registry of the affiliated entities, and shall exercise
all the powers, authority and the responsibilities vested in the Securities and Exchange Commission over such
affiliated entities mentioned under the preceding section, including but not limited to amendments of Articles of
Incorporation and By-Laws, changes in corporate term, structure, capitalization and other matters concerning the
operation of the affiliating entities, the provisions of the Corporation Code of the Philippines to the contrary
notwithstanding, except only with respect to original incorporation.

On March 13, 1992, Republic Act No. 7227 was enacted to provide for the conversion and development of existing
military reservations, including former United States military bases in the Philippines, into Special Economic Zones
(SEZ). The law also provides for the creation of the Subic Bay Metropolitan Authority (SBMA).

On April 3, 1993, then President Fidel V. Ramos issued Executive Order (EO) No. 80. Under Section 5 thereof, the
Clark Special Economic Zone (CSEZ) was given all the applicable incentives granted to Subic Bay Special Economic
Zone (SSEZ), viz:

SECTION 5. Investments Climate in the CSEZ.-Pursuant to Section 5(m) and Section 15 of RA 7227, the BCDA shall
promulgate all necessary policies, rules and regulations governing the CSEZ, including investment incentives, in
consultation with the local government units and pertinent government departments for implementation by the
CDC.

Among others, the CSEZ shall have all the applicable incentives in the Subic Special Economic and Free Port Zone
under RA 7227 and those applicable incentives granted in the Export Processing Zones, the Omnibus Investments
Code of 1987, the Foreign Investments Act of 1991 and new investments laws which may hereinafter be enacted.

48
JURISDICTION cases set 5 49

The CSEZ Main Zone covering the Clark Air Base proper shall have all the aforecited investment incentives, while
the CSEZ Sub-Zone covering the rest of the CSEZ shall have limited incentives. The full incentives in the Clark SEZ
Main Zone and the limited incentives in the Clark SEZ Sub-Zone shall be determined by the BCDA.

On December 23, 1999, PAGCOR granted private respondent Fontana Development Corporation (FDC) (formerly
RN Development Corporation) the authority to operate and maintain a casino inside the CSEZ under a
Memorandum of Agreement (MOA), stating inter alia:

xxxx

1. RNDC Improvements

xxxx

4. Non-exclusivity, PAGCOR and RNDC agree that the license granted to RNDC to engage in gaming and amusement
operations within CSEZ shall be non-exclusive and co-terminus with the Charter of PAGCOR, or any extension
thereof, and shall be for the period hereinabove defined. (Emphasis supplied.)

xxxx

On April 12, 2000, Clark Development Corporation (CDC) issued Certificate of Registration No. 2000-24. Pursuant
to Article VII-11 thereof, the MOA was amended on July 28, 2000, September 6, 2000, December 6, 2001, June 3,
2002, October 13, 2003 and March 31, 2004.

Sometime in 2005, the Coconut Oil Refiners Association challenged before the Supreme Court the
constitutionality, among others, of EO No. 80 on the ground that the incentives granted to SSEZ under RA No. 7227
was exclusive and cannot be made applicable to CSEZ by a mere executive order. The case was decided in favor of
Coconut Oil Refiners Association and Section 5 aforequoted was declared of no legal force and effect.

On June 20, 2007, RA No. 9487 was enacted, extending PAGCOR's franchise up to July 10, 2033 renewable for
another twenty-five (25) years, viz:

SECTION 1. The Philippine Amusement and Gaming Corporation (PAGCOR) franchise granted under Presidential
Decree No. 1869, otherwise known as the PAGCOR Charter, is hereby further amended to read as follows:

(1) Section 10, Nature and Term of Franchise, is hereby amended to read as follows:

SEC. 10. Nature and Term of Franchise.-Subject to the terms and conditions established in this Decree, the
Corporation is hereby granted from the expiration of its original term on July 11, 2008, another period of twenty-
five (25) years, the rights, privileges and authority to operate and license gambling casinos, gaming clubs and other
similar recreation or amusement places, gaming pools, i.e., basketball, football, bingo, etc. except jai-alai, whether
on land or sea, within the territorial jurisdiction of the Republic of the Philippines: Provided, That the corporation
shall obtain the consent of the local government unit that has territorial jurisdiction over the area chosen as the
site for any of its operations.

xxxx

On July 18, 2008, PAGCOR informed FDC that it was extending the MOA on a month-to-month basis until the
finalization of the renewal of the contract. FDC protested, claiming that the extension of PAGCOR's franchise had
automatically extended the MOA: that the SC decisions, including RA Nos. 9400 and 9399, had no effect on the
authority of CDC to allow the establishment of a casino inside the CSEZ; and that in Coconut Oil Refiners
Association, Inc., the SC did not declare void the entire EO No. 80 but only Section 5 thereof.

49
JURISDICTION cases set 5 50

On October 6, 2008, after a series of dialogues and exchange of position papers, PAGCOR notified FDC that its
[new] standard Authority to Operate shall now govern and regulate FDC's casino operations in place of the
previous MOA. FDC moved for the reconsideration of the said decision but the same was denied. On November 5,
2008, PAGCOR instructed FDC to remit its franchise fees in accordance with the Authority to Operate.

On the same date of November 5, 2008, FDC filed before the RTC of Manila the instant complaint for Injunction
against PAGCOR, contending that it could not be covered by a month-to-month extension nor by the standard
Authority to Operate since the MOA was automatically renewed and extended up to 2033; that the MOA clearly
provided that the same was co-terminus with PAGCOR's franchise including any extension thereof; that it had
faithfully complied with the conditions under the MOA; that pursuant to the MOA, it had built a hotel-casino
complex and put up other investments equivalent to P1 Billion; that it had adopted a marketing strategy to attract
high roller casino players from Asia and had scrupulously met all its obligations to PAGCOR and other government
agencies; and that the provisions invalidated in Coconut Oil Refiners Association, Inc., principally pertained to tax
and customs duty, privileges or incentives which was thereafter restored by the enactment of RA No. 9400. The
complaint was docketed as the herein Civil Case No. 08-120338 and raffled to Branch 7.

The RTC summoned PAGCOR and set the hearing on the application for TRO. On November 13, 2008, PAGCOR filed
its Special Appearance (for Dismissal of the Petition and the Opposition to the Prayer for a Temporary Restraining
Order and/or Writ of Preliminary Injunction), praying that the complaint be dismissed for lack of jurisdiction.
PAGCOR contended that its decision to replace the MOA with the Authority to Operate was pursuant to its
regulatory powers under Sections 8 and 9 of PD No. 1869; that under the said provisions, it was given all the
powers, authority and responsibilities of the Securities and Exchange Commission (SEC) over corporations engaged
in gambling; that consequently, being the SEC of said corporations, the appeal or review of its decision should have
been made directly to the SC under PD No. 1869 in relation to the last paragraph of Section 6, PD No. 902-A;
PAGCOR argued that administrative agencies are co-equal with RTC's; that application or operation of presidential
decrees are appealable to the SC under Article VIII, Section 4(2) of the 1987 Constitution; and that there was no
basis for the issuance of TRO/Writ of Preliminary Injunction since the franchise or license granted to FDC was not a
property right but was merely a privilege and not a contract.

On November 18, 2008, the RTC issued the first assailed Order denying PAGCOR's motion to dismiss and granting
FDC's application for a TRO. The RTC held that the SC had no exclusive jurisdiction over cases involving PAGCOR;
that the cases of Del Mar vs. PAGCOR, Sandoval II vs. PAGCOR, Jaworski vs. PAGCOR were decided by the SC in the
exercise of its discretionary power to take cognizance of cases; that it had jurisdiction over the instant complaint
under Section 21(1) of Batas Pambansa (BP) No. 129 in relation to Article VIII, Section 5(1) of the 1987 Constitution
and the rule on hierarchy of courts; that although PAGCOR was granted regulatory powers, it was not extended
quasi-judicial functions; and that PAGCOR is not an administrative agency but a government owned and controlled
corporation. Upon the posting by FDC of the required bond of P500,000.00, the RTC issued on November 19, 2008
the second assailed Order, a TRO enjoining the implementation of the Standard Authority to Operate within a
period of twenty (20) days. PAGCOR's motion for reconsideration was denied in the third assailed Order.

On December 8, 2008, the RTC issued an Order likewise denying FDC's application for the issuance of a Writ of
Preliminary Injunction. The RTC ruled that FDC failed to present a clear legal right to justify its issuance; that
PAGCOR was granted with legislative right to franchise to other entities the operation of gambling casinos; and
that since what was granted was a license to operate and not a contract, no vested property right was at stake.

Both PAGCOR and Fontana moved for the reconsideration of the aforesaid Order. Fontana maintained that it was
entitled to a Writ of Preliminary Injunction while PAGCOR wanted deleted the finding that it had the authority to
issue casino license to FDC under PD No. 1869.[1]

On February 5, 2009, PAGCOR filed a petition for certiorari and prohibition before the CA docketed as CA-G.R. SP
No. 107247 entitled PAGCOR represented by Atty. Carlos R. Bautista, Jr. v. Hon. Ma. Theresa Dolores Estoesta and
Fontana Development Corporation, questioning the November 18, 2008 Order, the November 19, 2008 Order and

50
JURISDICTION cases set 5 51

the December 4, 2008 Order of respondent judge.

Meanwhile, on January 30, 2009, the RTC issued an order, which reconsidered its December 8, 2008 Order and
granted the writ of preliminary injunction in favor of FDC. The trial court held that since public interest is not
prejudiced, the license issued may not be revoked or rescinded by mere executive action. The fallo reads:

WHEREFORE, having sufficiently established a prima facie proof of violation of its right as a casino licensee under
the MOA, FDC's application for the issuance of a writ of preliminary injunction is GRANTED.

This reconsiders the Order dated December 8, 2008 insofar as it denied the issuance of a writ of preliminary
injunction.

Let a writ of preliminary injunction therefore ISSUE to become effective only upon posting of ONE HUNDRED
MILLION PESOS (P100,000,000.00).

SO ORDERED.

The Writ of Preliminary Injunction[2] was issued on February 25, 2009.

On February 17, 2009, PAGCOR filed its Motion for Reconsideration and to Dissolve the Preliminary Injunction for
Insufficiency of Bond and Irreparable Injury to the Government, which was opposed by FDC. By Order issued on
March 31, 2009, the RTC denied PAGCOR's motion for reconsideration of its Order dated January 30, 2009 that
granted a writ of preliminary injunction in favor of FDC.

On May 19, 2009, the CA rejected the petition in CA-G.R. SP No. 107247 for lack of merit.

In dismissing PAGCOR's petition, the CA threw out PAGCOR's postulation that the RTC had no jurisdiction over the
case and that the proper remedy is an original action before this Court, as the corporation is a body equal to the
Securities and Exchange Commission (SEC). The appellate court reasoned that nowhere in Presidential Decree No.
(PD) 1869 and Republic Act No. (RA) 9487 does it state that the instant petition can only be filed with this Court.
Moreover, under RA 8799, the quasi-judicial powers earlier granted to the SEC under PD 902-A were transferred to
the RTC, while the powers retained by the Commission are now subject to appeal to the CA.

An examination of the allegations of the complaint further revealed that it was an original action for injunction,
and under Batas Pampansa Blg. (BP) 129, the RTC shall exercise original jurisdiction over writs of injunction. Lastly,
the CA stressed that the case has been rendered moot and academic, as the TRO issued by Judge Estoesta lapsed
on December 9, 2008 and its issuance has ceased to be a justiciable controversy. On the other hand, PAGCOR did
not assail the writ of preliminary injunction issued by Judge Estoesta on February 25, 2009 after the CA petition
was filed.

In the instant petition, PAGCOR puts forward the following issues for the consideration of the Court, to wit:

-The Court a quo and the trial court decided the question of substance (i.e. What is the proper remedy available to
a party claiming to be aggrieved by PAGCOR in the exercise of its authority to operate games of chance/gambling
and to license and regulate others to operate games of chance/gambling?) not theretofore determined by the
Supreme Court.

-The trial court's TRO and later a Writ of Preliminary Injunction in favor of the private respondent prevented herein
Petitioner from implementing the standard Authority to Operate. In issuing such processes the trial court has so far
departed from the accepted and usual course of judicial proceedings, as to call for an exercise of the power of
supervision.

-The trial court's TRO and later a Writ of Preliminary Injunction in favor of private respondent prevented herein

51
JURISDICTION cases set 5 52

Petitioner from collecting Government revenues in the form of the new license fee from private respondent under
the standard Authority to Operate. In issuing such processes the trial court has so far departed from the accepted
and usual course of judicial proceedings, as to call for an exercise of the power of supervision.

-The Court a quo in declaring moot and academic the question of the TRO issued by the trial court had sanctioned
the trial court's departure from the accepted and usual course of judicial proceedings, as to call for an exercise of
the power of supervision.

-The trial court in declaring that herein Petitioner issued the license (MOA) to herein private respondent under the
authority of PD 1869 and not under E.O. 80, Section 5 decided such question of substance in a way not in accord
with law or with the applicable decisions of the Supreme Court.

We synthesize petitioner's issues to two core issues:

(1) Whether the Manila RTC or this Court has jurisdiction over FDC's complaint for injunction and specific
performance; and

(2) Did PAGCOR issue the license (MOA) under PD 1869 or under Executive Order No. (EO) 80, Section 5?

On the threshold issue of jurisdiction, PAGCOR insists lack of jurisdiction of the trial court over the complaint of
FDC and, hence, all the processes and writs issued by said court are null and void. It posits that the proper legal
remedy of FDC is not through an injunction complaint before the trial court, but a petition for review on purely
questions of law before this Court or an appeal to the Office of the President. It heavily relies on Sec. 9 of PD 1869,
which states that PAGCOR "shall exercise all the powers, authority and responsibilities vested in the Securities and
Exchange Commission," and Sec. 6 of PD 902-A which provides for a petition for review to this Court from SEC's
decisions.

We are not convinced.

Jurisdiction of a court over the subject matter of the action is a matter of law and is conferred only by the
Constitution or by statute.[3] It is settled that jurisdiction is determined by the allegations of the complaint or the
petition irrespective of whether plaintiff is entitled to all or some of the claims or reliefs asserted.[4]

A perusal of FDC's complaint in Civil Case No. 08-120338 easily reveals that it is an action for injunction based on
an alleged violation of contract-the MOA between the parties-which granted FDC the right to operate a casino
inside the Clark Special Economic Zone (CSEZ). As such, the Manila RTC has jurisdiction over FDC's complaint
anchored on Sec. 19, Chapter II of BP 129, which grants the RTCs original exclusive jurisdiction over "all civil actions
in which the subject of the litigation is incapable of pecuniary estimation." Evidently, a complaint for injunction or
breach of contract is incapable of pecuniary estimation. Moreover, the RTCs shall exercise original jurisdiction "in
the issuance of writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction which may
be enforced in any part of their respective regions" under Sec. 21 of BP 129.

PAGCOR's claim of jurisdiction of this Court over the complaint in question heavily leans on Sec. 9 of PD 1869,
PAGCOR's Charter, which provides:

Section 9. Regulatory Power.-The Corporation shall maintain a Registry of the affiliated entities and shall exercise
all the powers, authority and responsibilities vested in the Securities and Exchange Commission over such affiliated
entities x x x.

In view of the vestment to PAGCOR by PD 1869 of the powers, authority, and responsibilities of the SEC, PAGCOR
concludes that any decision or ruling it renders has to be brought to this Court via a petition for review based on
Sec. 6 of SEC's Charter, PD 902-A, which reads:

52
JURISDICTION cases set 5 53

The aggrieved party may appeal the order, decision or ruling of the Commission sitting en banc to the Supreme
Court by petition for review in accordance with the pertinent provisions of the Rules of Court.

This reasoning is flawed. A scrutiny of PD 1869 demonstrates that it has no procedure for the appeal or review of
PAGCOR's decisions or orders. Neither does it make any express reference to an exclusive remedy that can be
brought before this Court. Even a review of PD 1869's predecessor laws-PD 1067-A, 1067-B, 1067-C, 1399, and
1632, as well as its amendatory law, RA 9487--do not confer original jurisdiction to this Court to review PAGCOR's
actions and decisions.

PAGCOR, however, insists that this Court has jurisdiction over an action contesting its exercise of licensing and
regulatory powers, i.e., the revocation of FDC's license to operate a casino in CSEZ and that FDC's complaint is a
case of first impression.

PAGCOR's argument is bereft of merit.

A similar factual setting was presented by PAGCOR in PAGCOR v. Viola,[5] which involves the controversy between
PAGCOR and the Mimosa Regency Casino that operated inside the CSEZ. Mimosa filed a case for injunction and
prayed for the issuance of a TRO before the Pampanga RTC when PAGCOR decided to close down the casino. In
this case, PAGCOR likewise assailed the jurisdiction of the trial court by claiming that an original action before the
CA is the proper remedy.

In PAGCOR v. Viola, we ruled that PAGCOR, in the exercise of its licensing and regulatory powers, has no quasi-
judicial functions, as Secs. 8 and 9 of PD 1869 do not grant quasi-judicial powers to PAGCOR. As such, direct resort
to this Court is not allowed. While we allowed said recourse in Del Mar v. PAGCOR[6] and Jaworski v. PAGCOR,[7]
that is an exception to the principle of hierarchy of courts on the grounds of expediency and the importance of the
issues involved. More importantly, we categorically ruled in PAGCOR v. Viola that cases involving revocation of a
license falls within the original jurisdiction of the RTC, thus:

Having settled that PAGCOR's revocation of MONDRAGON's authority to operate a casino was not an exercise of
quasi-judicial powers then it follows that the case was properly filed before the Regional Trial Court. Hence, as the
Regional Trial Court had jurisdiction to take cognizance of the case, petitioner's contention that the temporary
restraining order and the preliminary injunction by the trial court are void must fail.[8]

Moreover, it is settled that the normal rule is to strictly follow the hierarchy of courts, thus:

The Supreme Court is a court of last resort, and must so remain if it is to satisfactorily perform the functions
assigned to it by the fundamental charter and immemorial tradition. A direct invocation of this Court's original
jurisdiction to issue said writs should be allowed only when there are special and important reasons therefor,
clearly and specifically set out in the petition. This is established policy-a policy that is necessary to prevent
inordinate demands upon the Court's time and attention which are better devoted to those matters within its
exclusive jurisdiction, and to prevent further over-crowding of the Court's docket.[9]

While it is the trial court that has original jurisdiction over FDC's complaint, PAGCOR nevertheless prays that this
Court "suspend the Rules and directly decide the entire controversy in this proceeding instead of remanding the
same to the trial court."[10]

In the exercise of its broad discretionary power, we will resolve FDC's complaint on the merits, instead of
remanding it to the trial court for further proceedings. Moreover, the dispute between the parties involves a
purely question of law-whether the license or MOA was issued pursuant to PD 1869 or Sec. 5, EO 80, in relation to
RA 7227, which does not necessitate a full blown trial. Demands of substantial justice and equity require the
relaxation of procedural rules.[11] In Lianga Bay v. Court of Appeals,[12] the Court held:

Remand of case to the lower court for further reception of evidence is not necessary where the court is in a

53
JURISDICTION cases set 5 54

position to resolve the dispute based on the records before it. On many occasions, the Court, in the public interest
and the expeditious administration of justice, has resolved actions on the merits instead of remanding them to the
trial court for further proceedings, such as where the ends of justice would not be subserved by the remand of the
case or when public interest demands an early disposition of the case or where the trial court had already received
all the evidence of the parties.

The core issue to be resolved is whether the trial court erred in declaring that PAGCOR issued the license (MOA) to
FDC under the authority of PD 1869 and not under EO 80, Sec. 5.

PAGCOR maintains that the license it issued to the FDC was based on Sec. 5 of EO 80 and that its charter PD 1869
should be read together with said EO. When Sec. 5 was nullified in Coconut Oil Refiners Association, Inc. v.
Torres,[13] the MOA it entered into with FDC was consequently voided.

Such postulation must fail.

Sec. 5 of EO 80 provides:

SECTION 5. Investments Climate in the CSEZ.-Pursuant to Section 5(m) and Section 15 of RA 7227, the BCDA shall
promulgate all necessary policies, rules and regulations governing the CSEZ, including investment incentives, in
consultation with the local government units and pertinent government departments for implementation by the
CDC.

Among others, the CSEZ shall have all the applicable incentives in the Subic Special Economic and Free Port Zone
under RA 7227 and those applicable incentives granted in the Export Processing Zones, the Omnibus Investments
Code of 1987, the Foreign Investments Act of 1991 and new investments laws which may hereinafter be enacted.

On the other hand, we quote Sec. 13 of RA 7227 in relation to Sec. 5 of EO 80:

Sec. 13. The Subic Bay Metropolitan Authority.-

(a) Creation of the Subic Bay Metropolitan Authority.-A body corporate to be known as the Subic Bay Metropolitan
Authority is hereby created as an operating and implementing arm of the Conversion Authority.

(b) Powers and functions of the Subic Bay Metropolitan Authority.-The Subic Bay Metropolitan Authority,
otherwise known as the Subic Authority, shall have the following powers and function:

xxxx

7) To operate directly or indirectly or license tourism related activities subject to priorities and standards set by the
Subic Authority including games and amusements, except horse racing, dog racing and casino gambling which shall
continue to be licensed by the Philippine Amusement and Gaming Corporation (PAGCOR) upon recommendation
of the Conversion Authority; to maintain and preserve the forested areas as a national park.

A reading of the aforequoted provisions does not point to any authority granted to PAGCOR to license casinos
within Subic, Clark, or any other economic zone. As a matter of fact, Sec. 13 of RA 7227 simply shows that SBMA
has no power to license or operate casinos. Rather, said casinos shall continue to be licensed by PAGCOR. Hence,
the source of PAGCOR's authority lies in its basic charter, PD 1869, as amended, and neither in RA 7227 nor its
extension, EO 80, for the latter merely recognizes PAGCOR's power to license casinos. Indeed, PD 1869 empowers
PAGCOR to regulate and control all games of chance within the Philippines, and clearly, RA 7227 or EO 80 cannot
be the source of its powers, but its basic charter, PD 1869.

Basco v. PAGCOR[14] points to PD 1869 as the source of authority for PAGCOR to regulate and centralize all games
of chance authorized by existing franchise or law, thus:

54
JURISDICTION cases set 5 55

P.D. 1869 was enacted pursuant to the policy of the government to "regulate and centralize thru an appropriate
institution all games of chance authorized by existing franchise or permitted by law" (1st Whereas Clause, PD
1869). As was subsequently proved, regulating and centralizing gambling operations in one corporate entity - the
PAGCOR, was beneficial not just to the Government but to society in general. It is a reliable source of much needed
revenue for the cash strapped Government. It provided funds for social impact projects and subjected gambling to
"close scrutiny, regulation, supervision and control of the Government" (4th Whereas Clause, PD 1869).

Lastly, only PD 1869, particularly Secs. 8 and 9 and not any other law, requires registration and affiliation of all
persons primarily engaged in gambling with PAGCOR. We quote Secs. 8 and 9:

TITLE III-AFFILIATION PROVISIONS

Section 8. Registration.-All persons primarily engaged in gambling, together with their allied business, with
contract or franchise from the Corporation, shall register and affiliate their businesses with the Corporation. The
Corporation shall issue the corresponding certificates of affiliation upon compliance by the registering entity with
the promulgated rules and regulations.

Section 9. Regulatory Power.-The Corporation shall maintain a Registry of the affiliated entities, and shall exercise
all the powers, authority and the responsibilities vested in the Securities and Exchange Commission over such
affiliated entities mentioned under the preceding section, including but not limited to amendments of Articles of
Incorporation and By-Laws, changes in corporate term, structure, capitalization and other matters concerning the
operation of the affiliating entities, the provisions of the Corporation Code of the Philippines to the contrary
notwithstanding, except only with respect to original incorporation.

In the light of the foregoing provisions, it is unequivocal that PAGCOR draws its authority and power to operate
and regulate casinos from PD 1869, and neither from Sec. 5 of EO 80 nor from RA 7227. Hence, since PD 1869
remains unaffected by the unconstitutionality of Sec. 5 of EO 80, then PAGCOR has no legal basis for nullifying or
recalling the MOA with FDC and replacing it with its new Standard Authority to Operate (SAO). There is no infirmity
in the MOA, as it was validly entered by PAGCOR under PD 1869 and remains valid until legally terminated in
accordance with the MOA.

The reliance of PAGCOR on Coconut Oil Refiners Association, Inc.[15] to buttress its position that the MOA with
FDC can be validly supplanted with the 10-year SAO is clearly misplaced. That case cannot be a precedent to the
instant case, as it dealt solely with the void grant of tax and duty-free incentives inside CSEZ. The Court ruled in
Coconut Oil Refiners Association, Inc. that the tax incentives within the CSEZ were an invalid exercise of quasi-
legislative powers, thus:

In the present case, while Section 12 of Republic Act No. 7227 expressly provides for the grant of incentives to the
SSEZ, it fails to make any similar grant in favor of other economic zones, including the CSEZ. Tax and duty-free
incentives being in the nature of tax exemptions, the basis thereof should be categorically and unmistakably
expressed from the language of the statute. Consequently, in the absence of any express grant of tax and duty-free
privileges to the CSEZ in Republic Act No. 7227, there would be no legal basis to uphold the questioned portions of
two issuances: Section 5 of Executive Order No. 80 and Section 4 of BCDA Board Resolution No. 93-05-034, which
both pertain to the CSEZ. (Emphasis supplied.)

Lastly, the Court has to point out that the issuance of the 10-year SAO by PAGCOR in lieu of the MOA with FDC is a
breach of the MOA. The MOA in question was validly entered into by PAGCOR and FDC on December 23, 1999. It
embodied the license and authority to operate a casino, the nature and extent of PAGCOR's regulatory powers
over the casino, and the rights and obligations of FDC. Thus, the MOA is a valid contract with all the essential
elements required under the Civil Code. The parties are then bound by the stipulations of the MOA subject to the
regulatory powers of PAGCOR. Well-settled is the rule that a contract voluntarily entered into by the parties is the
law between them and all issues or controversies shall be resolved mainly by the provisions thereof.[16]

55
JURISDICTION cases set 5 56

On the revocation, termination, or suspension of the license or grant of authority to operate a casino, PAGCOR
agreed to the following stipulations on the revocation or termination of the MOA, viz:

VI. REVOCATION/TERMINATION

1. This grant of authority may be revoked or suspended at any time at the sole option of PAGCOR by giving written
notice to RNDC [FDC] of such revocation or suspension stating therein the reason(s) for such revocation or
suspension, on any of the following grounds:

a. RNDC makes any default which PAGCOR considers material in the due and punctual performance or observance
of any of the obligations or undertakings contained in the Agreement, and RNDC shall fail to remedy such default,
within fifteen (15) working days after notice specifying the default. Should the default consist in the non-
remittance of the consideration as hereinabove specified, PAGCOR shall, in addition have the right to proceed
against the Surety Bond, unless RNDC was able to cure the default so specified by PAGCOR within seventy-two (72)
hours after notice specifying the default. RNDC shall be liable for interest at the prevailing commercial rates on all
or portion of the amounts due.

b. There shall be any failure on the part of RNDC which PAGCOR considers material to comply with any provision of
the Agreement and RNDC fails to remedy the same within fifteen (15) working days after notice specifying the
default;

c. RNDC has become bankrupt;

d. After the RNDC casino shall have formally commenced gaming and amusement operations within the CSEZ,
RNDC's continuous cumulative non-operation of the casino for a period of one (1) month except upon lawful order
of the Court or force majeure, provided that upon the cessation of such cause or causes, RNDC shall immediately
continue its casino operations, otherwise, such continuous non-operation for the period provided above shall be
sufficient ground for revocation or suspension;

e. Failure of RNDC to comply with and observe any pertinent law, rule, regulation and/or ordinance promulgated
by a competent authority, including PAGCOR, relative to the operation of the casino;

f. Such other situations analogous to the above.[17]

Central to the present controversy is the term or period of effectivity of the MOA, as provided under the definition
of terms in Title I and Title II, No. 4, which, for clarity, we reiterate in full:

"Period" refers to the period of time co-terminus with that of the franchise granted to PAGCOR in accordance with
Section 10 of Presidential Decree No. 1869 including any extension thereof;[18]

xxxx

4. Non-exclusivity. PAGCOR and RNDC agree that the license granted to RNDC to engage in gaming and amusement
operations within the CSEZ shall be non-exclusive and co-terminus with the Charter of PAGCOR, or any extension
thereof, and shall be for the period hereinabove defined.[19] (Emphasis supplied.)

As parties to the MOA, FDC and PAGCOR bound themselves to all its provisions. After all, the terms of a contract
have the force of law between the parties, and courts have no choice but to enforce such contract so long as they
are not contrary to law, morals, good customs, or public policy.[20] A stipulation for the term or period for the
effectivity of the MOA to be co-terminus with term of the franchise of PAGCOR including any extension is not
contrary to law, morals, good customs, or public policy.

56
JURISDICTION cases set 5 57

It is beyond doubt that PAGCOR did not revoke or terminate the MOA based on any of the grounds enumerated in
No. 1 of Title VI, nor did it terminate it based on the period of effectivity of the MOA specified in Title I and Title II,
No. 4 of the MOA. Without explicitly terminating the MOA, PAGCOR simply informed FDC on July 18, 2008 that it is
giving the latter an extension of the MOA on a month-to-month basis in gross contravention of the MOA. Worse,
PAGCOR informed FDC only on October 6, 2008 that the MOA is deemed expired on July 11, 2008 without an
automatic renewal and is replaced with a 10-year SAO. Clearly it is in breach of the MOA's stipulated effectivity
period which is co-terminus with that of the franchise granted to PAGCOR in accordance with Sec. 10 of PD 1869
including any extension. Hence, PAGCOR's disregard of the MOA is without legal basis and must be nullified.
PAGCOR has to respect the December 23, 1999 MOA it entered into with FDC, especially considering the huge
investment poured into the project by the latter in reliance and pursuant to the MOA in question.

WHEREFORE, the petition is hereby DENIED for lack of merit. The Decision dated May 19, 2009 of the CA in CA-G.R.
SP No. 107247 affirming the Orders dated November 18, 2008 and December 4, 2008 of the RTC, Branch 7 in
Manila is hereby AFFIRMED. The writ of injunction issued on February 25, 2009 by the trial court pursuant to the
January 30, 2009 Order in Civil Case No. 08-120338 is hereby made PERMANENT. PAGCOR is ordered to honor and
comply with the stipulations of the MOA dated December 23, 1999, as amended, that it executed with FDC.

SO ORDERED.

57