SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

G.R. No. 174414. March 14, 2008.*

ELMER F. GOMEZ, petitioner, vs. MA. LITA A.

MONTALBAN, respondent.

Appeals; Certiorari; Pleadings and Practice; Words and

Phrases; „Questions of Law‰ and „Questions of Fact,‰ Distinguished;
Section 2(c), Rule 41 of the Rules of Court categorically provides that
in all cases where only questions of law are raised, the appeal from a
decision or order of the Regional Trial Court shall be to the Supreme
Court by petition for review on certiorari in accordance with Rule 45;
Simple as it may seem, determining the true nature and extent of the
distinction is sometimes complicated.·Section 2(c), Rule 41 of the
Rules of Court categorically provides that in all cases where only
questions of law are raised, the appeal from a decision or order of
the RTC shall be to the Supreme Court by petition for review on
certiorari in accordance with Rule 45. The distinction between
questions of law and questions of fact has long been settled. A
question of law exists when the doubt or controversy concerns the
correct application of law or jurisprudence to a certain set of facts;
or when the issue does not call for an examination of probative
value of the evidence presented, the truth or falsehood of facts being
admitted. A question of fact exists when the doubt or difference
arises as to the truth or falsehood of facts or when the query invites
calibration of the whole evidence considering mainly the credibility
of witnesses, the existence and relevancy of specific surrounding
circumstances, as well as their relation to each other and to the
whole, and the probability of the situation. Simple as it may seem,
determining the true nature and extent of the distinction is
sometimes complicated. In a case involving a „question of law,‰ the
resolution of the issue must rest solely on what the law provides on
the given set of circumstances. Once it is clear that the issue invites
a review of the evidence presented, the question posed is one of fact.
If the query requires a re-evaluation of the credibility of witnesses,

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 1 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

or the existence or relevance of surrounding circumstances and

their relation to each other, the issue in that query is factual.
Same; Jurisdictions; Words and Phrases; Jurisdiction is the
right to act or the power and authority to hear and determine a

_______________

* THIRD DIVISION.

694

694 SUPREME COURT REPORTS ANNOTATED

Gomez vs. Montalban

cause·it is a question of law.·The first issue raised in the present

petition is one of jurisdiction of the court over the subject matter·
meaning, the nature of the cause of action and of the relief sought.
Jurisdiction is the right to act or the power and authority to hear
and determine a cause. It is a question of law. The second issue
refers to the aptness of the grant of a Petition for Relief from
Judgment. These questions are undoubtedly one of law, as they
concern the correct interpretation or application of relevant laws
and rules, without the need for review of the evidences presented
before the court a quo. Thus, with only questions of law raised in
this Petition, direct resort to this Court is proper.
Same; Same; Where the interest on the loan is a primary and
inseparable component of the cause of action, not merely incidental
thereto, and already determinable at the time of filing of the
Complaint, it must be included in the determination of which court
has the jurisdiction over such case.·The Court gleans from the
foregoing that petitionerÊs cause of action is the respondentÊs
violation of their loan agreement. In that loan agreement,
respondent expressly agreed to pay the principal amount of the
loan, plus 15% monthly interest. Consequently, petitioner is
claiming and praying for in his Complaint the total amount of
P238,000.00, already inclusive of the interest on the loan which had
accrued from 1998. Since the interest on the loan is a primary and
inseparable component of the cause of action, not merely incidental
thereto, and already determinable at the time of filing of the

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 2 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

Complaint, it must be included in the determination of which court

has the jurisdiction over petitionerÊs case. Using as basis the
P238,000.00 amount being claimed by petitioner from respondent
for payment of the principal loan and interest, this Court finds that
it is well within the jurisdictional amount fixed by law for RTCs.
Same; Same; Jurisdiction can neither be made to depend on the
amount ultimately substantiated in the course of the trial or
proceedings nor be affected by proof showing that the claimant is
entitled to recover a sum in excess of the jurisdictional amount fixed
by law·jurisdiction is determined by the cause of action as alleged
in the complaint and not by the amount ultimately substantiated
and awarded; Basic as a hornbook principle is that jurisdiction over
the subject matter of a case is conferred by law and determined by
the allegations in the complaint which comprise a concise statement
of

695

VOL. 548, MARCH 14, 2008 695

Gomez vs. Montalban

the ultimate facts constituting the plaintiffÊs cause of action.·To

this Court, it is irrelevant that during the course of the trial, it was
proven that respondent is only liable to petitioner for the amount of
P40,000.00 representing the principal amount of the loan;
P57,000.00 as interest thereon at the rate of 24% per annum
reckoned from 26 August 1998 until the present; and P15,000.00 as
attorneyÊs fees. Contrary to respondentÊs contention, jurisdiction can
neither be made to depend on the amount ultimately substantiated
in the course of the trial or proceedings nor be affected by proof
showing that the claimant is entitled to recover a sum in excess of
the jurisdictional amount fixed by law. Jurisdiction is determined
by the cause of action as alleged in the complaint and not by the
amount ultimately substantiated and awarded. Basic as a hornbook
principle is that jurisdiction over the subject matter of a case is
conferred by law and determined by the allegations in the
complaint which comprise a concise statement of the ultimate facts
constituting the plaintiff Ês cause of action. 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

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 3 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

upon all or some of the claims asserted therein. The averments in

the complaint and the character of the relief sought are the ones to
be consulted. Once vested by the allegations in the complaint,
jurisdiction also remains vested irrespective of whether or not the
plaintiff is entitled to recover upon all or some of the claims
asserted therein.
Relief from Judgment; Pleadings and Practice; A petition for
relief under Rule 38 of the Rules of Court is only available against a
final and executory judgment.·On the propriety of the granting by
the RTC of respondentÊs Petition for Relief from Judgment, the
Court finds and so declares that the RTC did indeed commit an
error in doing so. First of all, a petition for relief under Rule 38 of
the Rules of Court is only available against a final and executory
judgment. Since respondent allegedly received a copy of the
Decision dated 4 May 2004 on 14 May 2004, and she filed the
Petition for Relief from Judgment on 28 May 2004, judgment had
not attained finality. The 15-day period to file a motion for
reconsideration or appeal had not yet lapsed. Hence, resort by
respondent to a petition for relief from judgment under Rule 38 of
the Rules of Court was premature and inappropriate.

696

696 SUPREME COURT REPORTS ANNOTATED

Gomez vs. Montalban

Same; Words and Phrases; As used in Section 1, Rule 38 of the

Rules of Court, „mistake‰ refers to mistake of fact, not of law·the
word „mistake,‰ which grants relief from judgment, does not apply
and was never intended to apply to a judicial error which the court
might have committed in the trial; „Fraud,‰ on the other hand, must
be extrinsic or collateral, that is, the kind which prevented the
aggrieved party from having a trial or presenting his case to the
court, or was used to procure the judgment without fair submission
of the controversy.·In her Petition for Relief from Judgment before
the RTC, respondent contended that judgment was entered against
her through „mistake or fraud,‰ because she was not duly served
with summons as it was received by a Mrs. Alicia dela Torre who
was not authorized to receive summons or other legal processes on
her behalf. As used in Section 1, Rule 38 of the Rules of Court,

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 4 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

„mistake‰ refers to mistake of fact, not of law, which relates to the

case. The word „mistake,‰ which grants relief from judgment, does
not apply and was never intended to apply to a judicial error which
the court might have committed in the trial. Such errors may be
corrected by means of an appeal. This does not exist in the case at
bar, because respondent has in no wise been prevented from
interposing an appeal. „Fraud,‰ on the other hand, must be
extrinsic or collateral, that is, the kind which prevented the
aggrieved party from having a trial or presenting his case to the
court, or was used to procure the judgment without fair submission
of the controversy. This is not present in the case at hand as
respondent was not prevented from securing a fair trial and was
given the opportunity to present her case.
Same; Attorneys; Under Section 1, Rule 38, the „negligence‰
must be excusable and generally imputable to the party because if it
is imputable to the counsel, it is binding on the client·what the
aggrieved litigant should do is seek administrative sanctions against
the erring counsel and not ask for the reversal of the courtÊs ruling.·
Negligence to be excusable must be one which ordinary diligence
and prudence could not have guarded against. Under Section 1, the
„negligence‰ must be excusable and generally imputable to the
party because if it is imputable to the counsel, it is binding on the
client. To follow a contrary rule and allow a party to disown his
counselÊs conduct would render proceedings indefinite, tentative,
and subject to reopening by the mere subterfuge of replacing
counsel. What the aggrieved litigant should do is seek
administrative sanctions against the erring counsel and not ask for
the reversal of the courtÊs ruling.

697

VOL. 548, MARCH 14, 2008 697

Gomez vs. Montalban

Court Personnel; Process Servers; The certificate of service of the

process server of the court a quo is prima facie evidence of the facts
as set out therein.·The certificate of service of the process server of
the court a quo is prima facie evidence of the facts as set out
therein. According to the Sheriff Ês Return of Service, summons was
issued and served on respondent thru one Mrs. Alicia dela Torre,

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 5 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

thus: „THIS IS TO CERTIFY that on June 25, 2003 at around 1:45

p.m. the undersigned sheriff caused the service of summons issued
in the above-entitled case together with attached complaints and
annexes for and in behalf of defendant [respondent] thru a certain
Mrs. Alicia Dela Torre inside their compound at the given address
who acknowledged receipt by signature and notation of said dela
Torre appearing thereof.
Same; Default; Pleadings and Practice; Remedies Available to
Party Declared in Default.·This Court also notes that when
respondent was declared in default for her failure to file an Answer
to the Complaint, she did not immediately avail herself of any of the
remedies provided by law. Lina v. Court of Appeals, 135 SCRA 637
(1985), enumerates the remedies available to a party declared in
default: a) The defendant in default may, at any time after discovery
thereof and before judgment, file a motion, under oath, to set aside
the order of default on the ground that his failure to answer was
due to fraud, accident, mistake or excusable negligence, and that he
has a meritorious defense (Sec. 3, Rule 18 [now Sec. 3(b), Rule 9]);
b) If the judgment has already been rendered when the defendant
discovered the default, but before the same has become final and
executory, he may file a motion for new trial under Section 1 (a) of
Rule 37; c) If the defendant discovered the default after the
judgment has become final and executory, he may file a petition for
relief under Section 2 [now Section 1] of Rule 38; and d) He may
also appeal from the judgment rendered against him as contrary to
the evidence or to the law, even if no petition to set aside the order
of default has been presented by him (Sec. 2, Rule 41). (Emphasis
added) In addition, and as this Court earlier mentioned, a petition
for certiorari to declare the nullity of a judgment by default is also
available if the trial court improperly declared a party in default, or
even if the trial court properly declared a party in default, if grave
abuse of discretion attended such declaration.

698

698 SUPREME COURT REPORTS ANNOTATED

Gomez vs. Montalban

PETITION for review on certiorari of the orders of the

Regional Trial Court of Davao City, Br. 13.
The facts are stated in the opinion of the Court.

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 6 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

The Mindanao-Davao Law Firm of Avisado & Maypa,

Co. for petitioner.
Amado L. Cantos for respondent.

CHICO-NAZARIO, J.:
This Petition for Review on Certiorari seeks to reverse
(1) the Order1 dated 20 June 2006 of the Regional Trial
Court (RTC) of Davao City, Branch 13, which granted
herein respondent Ma. Lita A. MontalbanÊs Petition for
Relief from Judgment and dismissed Civil Case No. 29,717-
03 for lack of jurisdiction; and (2) the Order2 dated 2
August 2006 denying herein petitioner Elmer F. GomezÊs
Motion for Reconsideration thereof.
On 30 May 2003, petitioner filed a Complaint3 with the
RTC for a sum of money, damages and payment of
attorneyÊs fees against respondent, docketed as Civil Case
No. 29,717-03. The Complaint alleged, among other things,
that: on or about 26 August 1998, respondent obtained a
loan from petitioner in the sum of P40,000.00 with a
voluntary proposal on her part to pay 15% interest per
month; upon receipt of the proceeds of the loan, respondent
issued in favor of petitioner, as security, Capitol Bank
Check No. 0215632, postdated 26 October 1998, in the sum
of P46,000.00, covering the P40,000.00 principal loan
amount and P6,000.00 interest charges for one month;
when the check became due, respondent failed to pay the
loan despite several demands; thus, petitioner filed the
Complaint praying for the payment of P238,000.00,
representing the principal loan and interest

_______________

1 Rollo, pp. 7-9.

2 Id., at pp. 10-11.
3 Id., at pp. 37-39.

699

VOL. 548, MARCH 14, 2008 699

Gomez vs. Montalban

charges, plus 25% of the amount to be awarded as

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 7 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

attorneyÊs fees, as well as the cost of suit.

Summons was served, but despite her receipt thereof,
respondent failed to file her Answer. Consequently, she was
declared4 in default and upon motion, petitioner was
allowed to present evidence ex parte.
After considering the evidence presented by petitioner,
the RTC rendered a Decision5 on 4 May 2004 in his favor,
the fallo of which reads:

„WHEREFORE, IN VIEW OF THE FOREGOING, the Court

hereby decides this case in favor of [herein petitioner] and against
[herein respondent], ordering [respondent] to pay [petitioner] the
following amounts:
1. P40,000.00 representing the principal amount of the loan;
2. P57,600.00 representing interest at the rate of 24% per
annum reckoned from August 26, 1998 until the present; and
3. P15,000.00 representing attorneyÊs fees.

On 28 May 2004, respondent filed a Petition for Relief

from Judgment6 alleging that there was no effective service
of summons upon her since there was no personal service of
the same. The summons was received by one Mrs. Alicia
dela Torre, who was not authorized to receive summons or
other legal pleadings or documents on respondentÊs behalf.
Respondent attributes her failure to file an Answer to
fraud, accident, mistake or excusable negligence. She
claimed that she had good and valid defenses against
petitioner and that the RTC had no jurisdiction as the
principal amount being claimed by petitioner was only
P40,000.00, an amount falling within the jurisdiction of the
Municipal Trial Court (MTC).

_______________

4 Id., at p. 47.
5 Id., at pp. 49-51.
6 Id., at pp. 52-54.

700

700 SUPREME COURT REPORTS ANNOTATED

Gomez vs. Montalban

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 8 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

After petitioner filed his Answer7 to the Petition for

Relief from Judgment and respondent her Reply,8 the said
Petition was set for hearing.
After several dates were set and called for hearing,
respondent, thru counsel, failed to appear despite being
duly notified; hence, her Petition for Relief was dismissed9
for her apparent lack of interest to pursue the petition.
Respondent filed a Motion for Reconsideration10 of the
dismissal of her Petition for Relief, stating that her
counselÊs failure to appear was not intentional, but due to
human shortcomings or frailties, constituting honest
mistake or excusable negligence.
On 18 November 2005, the RTC granted11 respondentÊs
motion for reconsideration, to wit:

„In regard to the motion for reconsideration file by [herein

respondent] of the order of the court dismissing her petition for
relief from judgment, the court, in the interest of justice, shall give
[respondent] one more chance to present the merits of her position
in a hearing. The dismissal of the petition is therefore reconsidered
and set aside.‰

On 20 June 2006, the RTC granted respondentÊs Petition

for Relief from Judgment and set aside its Decision dated 4
May 2004 on the ground of lack of jurisdiction. The fallo of
the assailed RTC Order reads:

„WHEREFORE, the petition for relief is hereby GRANTED. The

decision of this court dated May 4, 2004 is RECONSIDERED and
set aside for lack of jurisdiction on the part of the court, without

_______________

7 Id., at pp. 58-65.

8 Id., at pp. 72-74.
9 Id., at p. 77.
10 Id., at p. 78.
11 Id., at p. 81.

701

VOL. 548, MARCH 14, 2008 701

Gomez vs. Montalban

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 9 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

prejudice to the case being refiled in the proper Municipal Trial

Courts.‰12

Petitioner filed a motion for reconsideration of the afore-

quoted Order, but the same was denied by the RTC in
another Order13 dated 2 August 2006.
Hence, the present Petition filed directly before this
Court.
In his Memorandum,14 petitioner raises the following
issues for the CourtÊs consideration:

„1. Whether or not the Regional Trial Court has jurisdiction

over this case for sum of money, damages and attorneyÊs fees where
the principal amount of the obligation is P40,000.00 but the amount
of the demand per allegation of the complaint is P238,000.00;
2. Whether or not respondentÊs relief from judgment is proper
during the period for filing a motion for reconsideration and
appeal.‰

Before the Court dwells on the principal issues, a few

procedural matters must first be resolved.
Section 2(c), Rule 41 of the Rules of Court categorically
provides that in all cases where only questions of law are
raised, the appeal from a decision or order of the RTC shall
be to the Supreme Court by petition for review on certiorari
in accordance with Rule 45.15
The distinction between questions of law and questions
of fact has long been settled. A question of law exists when
the doubt or controversy concerns the correct application of
law or jurisprudence to a certain set of facts; or when the
issue does not call for an examination of probative value of
the evidence presented, the truth or falsehood of facts being
admitted. A question of fact exists when the doubt or
difference arises as

_______________

12 Id., at p. 9.
13 Id., at pp. 10-11.
14 Id., at p. 129.
15 Bukidnon DoctorsÊ Hospital, Inc. v. Metropolitan Bank and Trust
Co., G.R. No. 161882, 8 July 2005, 463 SCRA 222, 232.

702

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 10 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

702 SUPREME COURT REPORTS ANNOTATED

Gomez vs. Montalban

to the truth or falsehood of facts or when the query invites

calibration of the whole evidence considering mainly the
credibility of witnesses, the existence and relevancy of
specific surrounding circumstances, as well as their
relation to each other and to the whole, and the probability
of the situation.16
Simple as it may seem, determining the true nature and
extent of the distinction is sometimes complicated. In a
case involving a „question of law,‰ the resolution of the
issue must rest solely on what the law provides on the
given set of circumstances. Once it is clear that the issue
invites a review of the evidence presented, the question
posed is one of fact. If the query requires a re-evaluation of
the credibility of witnesses, or the existence or relevance of
surrounding circumstances and their relation to each other,
the issue in that query is factual.17
The first issue raised in the present petition is one of
jurisdiction of the court over the subject matter·meaning,
the nature of the cause of action and of the relief sought.
Jurisdiction is the right to act or the power and authority
to hear and determine a cause. It is a question of law.18 The
second issue refers to the aptness of the grant of a Petition
for Relief from Judgment. These questions are undoubtedly
one of law, as they concern the correct interpretation or
application of relevant laws and rules, without the need for
review of the evidences presented before the court a quo.
Thus, with only questions of law raised in this Petition,
direct resort to this Court is proper.19

_______________

16 Chiang Kai Shek College v. Court of Appeals, G.R. No. 152988, 24

August 2004, 437 SCRA 171, 183.
17 Microsoft Corporation v. Maxicorp, Inc., G.R. No. 140946, 13
September 2004, 438 SCRA 224, 231.
18 Municipality of Kananga v. Judge Madrona, 450 Phil. 392, 396; 402
SCRA 330, 334 (2003).

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 11 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

19 Bukidnon DoctorsÊ Hospital, Inc. v. Metropolitan Bank and Trust

Co., supra note 15 at p. 234.

703

VOL. 548, MARCH 14, 2008 703

Gomez vs. Montalban

The Court shall now discuss whether the RTC has

jurisdiction over Civil Case No. 29,717-03.
PetitionerÊs Complaint before the RTC reads:

„3. On or about August 26, 1998, [herein respondent] obtained

from the [herein petitioner] a loan for the principal sum of
FORTY THOUSAND PESOS (P40,000.00) with a voluntary
proposal on her part to pay as much as 15% interest per month.
Machine copy of Cash Voucher dated August 26, 1998 is herewith
attached as Annex „A.‰
4. Upon receipt of the proceeds of the said loan, [respondent]
issued in favor of the Plaintiff Capitol Bank Check with check nos.
0215632 postdated on October 26, 1998 for the sum of Forty Six
Thousand Pesos (P46,000.00) as security on the loan with P6,000.00
as the first month of interest charges. When the check became due,
[respondent] defaulted to pay her loan despite several allowances of
time and repeated verbal demands from the [petitioner]. The said
check was later on dishonored for the reason: „Account Closed‰.
Machine copy of Capitol Bank Check wit nos. 0215632 is herewith
attached as Annex „B.‰
5. On July 4, 2002, [petitioner] engaged the services of the
undersigned counsel to collect the account of the [respondent]; thus,
on the same day, a demand letter was sent to and received by her on
July 9, 2002. And despite receipt thereof, she failed and continues
to evade the payment of her obligations to the damage and
prejudice of the [petitioner]. Thus, as of July 4, 2002,
[respondent]Ês loan obligation stood at TWO HUNDRED
THIRTY EIGHT THOUSAND PESOS (P 239,000.00), inclusive
of interest charges for 32 months. Machine copy of Demand
Letter and its registry receipt and return card is herewith attached
as Annexes „C‰; „C-1‰ and C-2,‰ respectively.
6. In view of [respondent]Ês refusal to pay her loan, [petitioner]
is constrained to engage the services of counsel to initiate the
instant action for a fee of 25% for whatever amounts is collected as

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 12 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

flat attorneyÊs fee. [Petitioner] will likewise incur damages in the

form of docket fees.

704

704 SUPREME COURT REPORTS ANNOTATED

Gomez vs. Montalban

PRAYER
„WHEREFORE, it is respectfully prayed of the Honorable Court
that Decision be rendered ordering the [respondent] to pay
[petitioner] as follows:
1. The amount of P238,000.00 with interest charges at the
sound discretion of the Honorable Court starting on July 4, 2002
until paid in full;
2. The sum equivalent to 25 % of the amount awarded as
attorneyÊs fee;
3. Cost of suit;
4. Other relief that the Honorable Court may find just and
equitable under the premises are likewise prayed for.20 [Emphasis
ours.]‰

The Court gleans from the foregoing that petitionerÊs

cause of action is the respondentÊs violation of their loan
agreement.21 In that loan agreement, respondent expressly
agreed to pay the principal amount of the loan, plus 15%
monthly interest. Consequently, petitioner is claiming and
praying for in his Complaint the total amount of
P238,000.00, already inclusive of the interest on the loan
which had accrued from 1998. Since the interest on the
loan is a primary and inseparable component of the cause
of action, not merely incidental thereto, and already
determinable at the time of filing of the Complaint, it must
be included in the determination of which court has the
jurisdiction over petitionerÊs case. Using as basis the
P238,000.00 amount being claimed by petitioner from
respondent for payment of the principal loan and interest,
this Court finds that it is well within the jurisdictional
amount fixed by law for RTCs.22

_______________

20 Rollo, pp. 37-38.

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 13 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

21 Cause of action is the act or omission by which a party violates a

right of another (Section 2, Rule 2 of the Rules of Court).
22 Section 1(8) of Republic Act No. 7691 otherwise known as „An Act
Expanding the Jurisdiction of the Metropolitan Trial Courts, Municipal
Trial Courts and Municipal Circuit Trial Courts, Amend-

705

VOL. 548, MARCH 14, 2008 705

Gomez vs. Montalban

There can be no doubt that the RTC in this case has

jurisdiction to entertain, try, and decide the petitionerÊs
Complaint.
To this Court, it is irrelevant that during the course of
the trial, it was proven that respondent is only liable to
petitioner for the amount of P40,000.00 representing the
principal amount of the loan; P57,000.00 as interest
thereon at the rate of 24% per annum reckoned from 26
August 1998 until the present; and P15,000.00 as
attorneyÊs fees. Contrary to respondentÊs contention,
jurisdiction can neither be made to depend on the amount
ultimately substantiated in the course of the trial or
proceedings nor be affected by proof showing that the
claimant is entitled to recover a sum in excess of the
jurisdictional amount fixed by law. Jurisdiction is
determined by the cause of action as alleged in the
complaint and not by the amount ultimately substantiated
and awarded.23
Basic as a hornbook principle is that jurisdiction over
the subject matter of a case is conferred by law and
determined by the allegations in the complaint which
comprise a concise statement of the ultimate facts
constituting the plaintiff Ês

_______________

ing for the Purpose Batas Pambansa Blg. 129, Otherwise Known as the
„Judiciary Reorganization Act of 1980,‰ provides:

SECTION  1. Section 19 of Batas Pambansa Blg. 129,

otherwise known as the „Judiciary Reorganization Act of 1980,‰ is

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 14 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

hereby amended as follows:

xxxx
8) In all other cases in which the demand, exclusive of
interest, damages of whatever kind, attorneyÊs fees, litigation
expenses, and costs or the value of the property in controversy
exceeds One hundred thousand pesos (P100,000.00) or such other
cases in Metro Manila, where the demand, exclusive of the
abovementioned items exceeds Two Hundred Thousand Pesos
(P200,000.00).
23 Dionisio v. Puerto, 158 Phil. 671, 677; 60 SCRA 471, 477 (1974).

706

706 SUPREME COURT REPORTS ANNOTATED

Gomez vs. Montalban

cause of action.24 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.25 The averments in the complaint and the
character of the relief sought are the ones to be consulted.26
Once vested by the allegations in the complaint,
jurisdiction also remains vested irrespective of whether or
not the plaintiff is entitled to recover upon all or some of
the claims asserted therein.27
On the propriety of the granting by the RTC of
respondentÊs Petition for Relief from Judgment, the Court
finds and so declares that the RTC did indeed commit an
error in doing so.
First of all, a petition for relief under Rule 38 of the
Rules of Court is only available against a final and
executory judgment.28 Since respondent allegedly29
received a copy of the Decision dated 4 May 2004 on 14
May 2004, and she filed the Petition for Relief from
Judgment on 28 May 2004, judgment had not attained
finality. The 15-day period to file a motion for
reconsideration or appeal had not yet lapsed. Hence, resort
by respondent to a petition for relief from judgment under

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 15 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

_______________

24 Dimo Realty & Development, Inc. v. Dimaculangan, 469 Phil. 373,

381-382; 425 SCRA 376, 382 (2004).
25 Barangay Piapi v. Talip, G.R. No. 138248, 7 September 2005, 469
SCRA 409, 413; Deltaventures Resources, Inc. v. Hon. Cabato, 384 Phil.
252, 260; 327 SCRA 521, 528 (2000).
26 Serdoncillo v. Benolirao, G.R. No. 118328, 8 October 1998, 297
SCRA 448, 459; Umpoc v. Mercado, G.R. No. 158166, 21 January 2005,
449 SCRA 220, 232; Lacierda v. Platon, G.R. No. 157141, 31 August
2005, 468 SCRA 650, 660-662.
27 Barrazona v. Regional Trial Court, Branch 61, Baguio City, G.R.
No. 154282, 7 April 2006, 486 SCRA 555, 560.
28 Aboitiz International Forwarders, Inc. v. Court of Appeals, G.R. No.
142272, 2 May 2006, 488 SCRA 492, 506.
29 Rollo, pp. 52-57.

707

VOL. 548, MARCH 14, 2008 707

Gomez vs. Montalban

Rule 38 of the Rules of Court was premature and

inappropriate.
Second, based on respondentÊs allegations in her Petition
for Relief before the RTC, she had no cause of action for
relief from judgment.
Section 1 of Rule 38 provides:

„SECTION 1. Petition for relief from judgment, order, or other

proceedings.·When a judgment or final order is entered, or any
other proceeding is thereafter taken against a party in any court
through fraud, accident, mistake, or excusable negligence, he may
file a petition in such court and in the same case praying that the
judgment, order or proceeding be set aside.‰

Under Section 1, Rule 38 of the Rules of Court, the court

may grant relief from judgment only „[w]hen a judgment or
final order is entered, or any other proceeding is taken
against a party in any court through fraud, accident,
mistake, or excusable negligence x x x.‰
In her Petition for Relief from Judgment before the RTC,
respondent contended that judgment was entered against
http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 16 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

her through „mistake or fraud,‰ because she was not duly

served with summons as it was received by a Mrs. Alicia
dela Torre who was not authorized to receive summons or
other legal processes on her behalf.
As used in Section 1, Rule 38 of the Rules of Court,
„mistake‰ refers to mistake of fact, not of law, which relates
to the case.30 The word „mistake,‰ which grants relief from
judgment, does not apply and was never intended to apply
to a judicial error which the court might have committed in
the trial. Such errors may be corrected by means of an
appeal.31 This does not exist in the case at bar, because
respondent has in no wise been prevented from interposing
an appeal.

_______________

30 Agan v. Heirs of Sps. Nueva, 463 Phil. 834, 840-841; 418 SCRA 421,
426 (2003).
31 Guevara v. Tuason and Co., 1 Phil. 27, 28 (1901).

708

708 SUPREME COURT REPORTS ANNOTATED

Gomez vs. Montalban

„Fraud,‰ on the other hand, must be extrinsic or

collateral, that is, the kind which prevented the aggrieved
party from having a trial or presenting his case to the
court,32 or was used to procure the judgment without fair
submission of the controversy.33 This is not present in the
case at hand as respondent was not prevented from
securing a fair trial and was given the opportunity to
present her case.
Negligence to be excusable must be one which ordinary
diligence and prudence could not have guarded against.34
Under Section 1, the „negligence‰ must be excusable and
generally imputable to the party because if it is imputable
to the counsel, it is binding on the client.35 To follow a
contrary rule and allow a party to disown his counselÊs
conduct would render proceedings indefinite, tentative, and
subject to reopening by the mere subterfuge of replacing
counsel. What the aggrieved litigant should do is seek

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 17 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

administrative sanctions against the erring counsel and not

ask for the reversal of the courtÊs ruling.36
Third, the certificate of service of the process server of
the court a quo is prima facie evidence of the facts as set
out therein.37 According to the Sheriff Ês Return of Service,38
nummons was issued and served on respondent thru one
Mrs. Alicia dela Torre, thus:

_______________

32 Garcia v. Court of Appeals, G.R. No. 96141, 2 October 1991, 202

SCRA 228, 233-234.
33 Magno v. Court of Appeals, 194 Phil. 271, 278; 107 SCRA 285
(1981).
34 Regalado v. Regalado, G.R. No. 134154, 28 February 2006, 483
SCRA 473, 484.
35 Insular Life Savings and Trust Company v. Runes, Jr., G.R. No.
152530, 12 August 2004, 436 SCRA 317, 324-325.
36 Que v. Court of Appeals, G.R. No. 150739, 18 August 2005, 467
SCRA 358, 368.
37 Aboitiz International Forwarders, Inc. v. Court of Appeals, supra
note 28 at pp. 506-507.
38 Rollo, p. 44.

709

VOL. 548, MARCH 14, 2008 709

Gomez vs. Montalban

„THIS IS TO CERTIFY that on June 25, 2003 at around 1:45 p.m.

the undersigned sheriff caused the service of summons issued in the
above-entitled case together with attached complaints and annexes
for and in behalf of defendant [respondent] thru a certain Mrs.
Alicia Dela Torre inside their compound at the given address who
acknowledged receipt by signature and notation of said dela Torre
appearing thereof.
Wherefore, this summons is respectfully returned to the Honorable
Regional Trial Court, Branch 13, Davao City, duly SERVED for its
records and information.‰

Finally, even assuming arguendo that the RTC had no

jurisdiction over respondent on account of the non-service

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 18 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

upon her of the summons and complaint, the remedy of the

respondent was to file a motion for the reconsideration of
the 4 May 2004 Decision by default or a motion for new
trial within 15 days from receipt of notice thereof. This is
also without prejudice to respondentÊs right to file a
petition for certiorari under Rule 65 of the Rules of Court
for the nullification of the order of default of the court a quo
and the proceedings thereafter held including the decision,
the writ of execution, and the writ of garnishment issued
by the RTC, on the ground that it acted without
jurisdiction.39 Unfortunately, however, respondent opted to
file a Petition for Relief from the Judgment of the RTC,
which, as the Court earlier determined, was the wrong
remedy.
In Tuason v. Court of Appeals,40 the Court explained the
nature of a petition for relief from judgment:

„A petition for relief from judgment is an equitable remedy that

is allowed only in exceptional cases where there is no other
available or adequate remedy. When a party has another remedy
available to him, which may be either a motion for new trial

_______________

39
40 G.R. No. 116607, 10 April 1996, 256 SCRA 158, 167; Mercury Drug
Corporation v. Court of Appeals, 390 Phil. 902, 912-913; 335 SCRA 567, 579
(2000).

710

710 SUPREME COURT REPORTS ANNOTATED

Gomez vs. Montalban

or appeal from an adverse decision of the trial court, and he

was not prevented by fraud, accident, mistake or excusable
negligence from filing such motion or taking such appeal, he
cannot avail himself of this petition. Indeed, relief will not be
granted to a party who seeks avoidance from the effects of the
judgment when the loss of the remedy at law was due to his own
negligence; otherwise the petition for relief can be used to
revive the right to appeal which had been lost thru
inexcusable negligence.‰ (Emphasis and italics supplied; citations

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 19 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

omitted)

In the case at bar, there being no fraud, accident,

mistake, or excusable negligence that would have
prevented petitioner from filing either a motion for
reconsideration or a petition for review on certiorari of the
4 May 2004 Decision of the RTC, her resort to a Petition for
Relief from Judgment was unwarranted.
This Court also notes that when respondent was
declared in default for her failure to file an Answer to the
Complaint, she did not immediately avail herself of any of
the remedies provided by law. Lina v. Court of Appeals41
enumerates the remedies available to a party declared in
default:

„a) The defendant in default may, at any time after discovery

thereof and before judgment, file a motion, under oath, to set
aside the order of default on the ground that his failure to
answer was due to fraud, accident, mistake or excusable negligence,
and that he has a meritorious defense (Sec. 3, Rule 18 [now Sec.
3(b), Rule 9]);
b) If the judgment has already been rendered when the
defendant discovered the default, but before the same has become
final and executory, he may file a motion for new trial under
Section 1 (a) of Rule 37;
c) If the defendant discovered the default after the judgment
has become final and executory, he may file a petition for relief
under Section 2 [now Section 1] of Rule 38; and

_______________

41 G.R. No. L-63397, 9 April 1985, 135 SCRA 637, 642.

711

VOL. 548, MARCH 14, 2008 711

Gomez vs. Montalban

d) He may also appeal from the judgment rendered against

him as contrary to the evidence or to the law, even if no petition to
set aside the order of default has been presented by him (Sec. 2,
Rule 41).‰ (Emphasis added)

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 20 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

In addition, and as this Court earlier mentioned, a

petition for certiorari to declare the nullity of a judgment
by default is also available if the trial court improperly
declared a party in default, or even if the trial court
properly declared a party in default, if grave abuse of
discretion attended such declaration.42
If respondent is really vigilant in protecting her rights,
she should have exhausted all the legal remedies above-
mentioned to nullify and set aside the order of default
against her, and should no longer have waited for the
judgment to be rendered. Respondent does not deny that
she did receive the summons, although she alleges that it
was not properly served upon her, yet she chose to sit on
her rights and did not act immediately. For respondentÊs
failure to act with prudence and diligence in protecting her
rights, she cannot now elicit this CourtÊs sympathy.
RespondentÊs petition for relief from judgment is clearly
without merit and should not have been granted by the
RTC.
WHEREFORE, the instant petition is hereby
GRANTED. Consequently, the Decision dated 4 May 2006
of the Regional Trial Court of Davao, Branch 13, in Civil
Case No. 29,717-03 is hereby REINSTATED and the Order
dated 20 June 2006 granting the petition for relief from
judgment is hereby SET ASIDE.
SO ORDERED.

Ynares-Santiago (Chairperson), Austria-Martinez,

Nachura and Reyes, JJ., concur.

_______________

42 Cerezo v. Tuazon, 469 Phil. 1020, 1036-1037; 426 SCRA 167, 180
(2004).

© Copyright 2018 Central Book Supply, Inc. All rights reserved.

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 21 of 22
SUPREME COURT REPORTS ANNOTATED VOLUME 548 21/01/2018, 7)46 PM

http://www.central.com.ph/sfsreader/session/000001611889a9622d007e5c003600fb002c009e/p/AQU589/?username=Guest Page 22 of 22