7.
REAL ACTION
G.R. No. 119347 March 17, 1999
EULALIA RUSSELL, PUPERTO 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. VESTlL, ADRIANO TAGALOG, MARCELO TAUTHO,
JUANITA MENDOZA, DOMINGO BANTILAN, RAUL BATALUNA AND ARTEMIO
CABATINGAN, respondent.
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
On November 24, 1994, private respondents filed a Motion to Dismiss 2 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 of Batas Pambansa Blg. 129,
as amended by R.A. No. 7691, 4 falls within the exclusive jurisdiction of the Municipal
Circuit Trial Curt of Liloan, Compostela. 5
Petitioners filed an Opposition to the Motion to Dismiss 6 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(1) of B.P. 129, as
amended. 7
On January 12, 1995, the respondent judge issued an Order granting the Motion to
Dismiss. 8 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 hence, one incapable of pecuniary estimation falling 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
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 xxx 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 56,97740 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;
5. That the passed to the children of the spouses (who are all deceased except for
defendant Marcelo Tautho), namely: Zacarias, Epifania, Vicenta, Felecisimo, 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
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
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 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 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 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
Examples of actions incapable of pecuniary estimation are those for specific performance,
support, or foreclosure of mortgage or annulment of judgment; 14 also actions
questioning the validity of a mortgage, 15 annulling a deed of sale or conveyance and to
recover the price paid 16 and for rescession, which is a counterpart of specific
performance. 17
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 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
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.
The Regional Trial Court, Branch 56, Mandaue City is ORDERED to proceed with dispatch
in resolving Civil Case No. MAN-2275. No costs.
SO ORDERED.
G.R. No. 149554 July 1, 2003
SPOUSES JORGE J. HUGUETE and YOLANDA B. HUGUETE, petitioners,
vs.
SPOUSES TEOFEDO AMARILLO EMBUDO and MARITES
HUGUETE-EMBUDO, respondents.
YNARES-SANTIAGO, J.:
This is a petition for review assailing the Orders dated June 27, 2001 1 and July 26,
20012 of the Regional Trial Court of Cebu City, Branch 7, in Civil Case No. CEB-24925.
On March 2, 2000, petitioner spouses Jorge and Yolanda Huguete instituted against
respondent spouses Teofredo Amarillo Embudo and Marites Huguete-Embudo a
complaint for "Annulment of TCT No. 99694, Tax Declaration No. 46493, and Deed of
Sale, Partition, Damages and Attorney’s Fees," docketed as Civil Case No. CEB-24925 of
the Regional Trial Court of Cebu City, Branch 7. Petitioners alleged that their son-in-law,
respondent Teofredo, sold to them a 50-square meter portion of his 150-square meter
parcel of land, known as Lot No. 1920-F-2, situated in San Isidro, Talisay, Cebu, for a
consideration of P15,000.00; that Teofredo acquired the lot from Ma. Lourdes
Villaber-Padillo by virtue of a deed of sale,3 after which Transfer Certificate of Title No.
99694 was issued solely in his name; that despite demands, Teofredo refused to partition
the lot between them.
On March 15, 2001, respondents filed a Motion to Dismiss4 the complaint on the ground
of lack of jurisdiction over the subject matter of the case, arguing that the total assessed
value of the subject land was only P15,000.00 which falls within the exclusive jurisdiction
of the Municipal Trial Court, pursuant to Section 33(3) 5 of Batas Pambansa Blg. 129, as
amended by Republic Act No. 7691.6
Petitioners filed an Opposition to the Motion to Dismiss7 alleging that the subject matter
of the action is incapable of pecuniary estimation and, therefore, is cognizable by the
Regional Trial Court, as provided by Section 19(1) of B.P. 129, as amended.8
The trial court dismissed the complaint for lack of jurisdiction. Petitioners filed a Motion
for Reconsideration,9 which was denied on July 26, 2001.
Hence, this petition for review based on the following errors:
I run-around, plaintiffs then demanded for the partition of the lot, segregating a portion in
THE HONORABLE COURT ERRED IN HOLDING THAT IT HAS NO JURISDICTION OVER
THE CASE PURSUANT TO SECTION 33 (3) OF BATAS PAMBANSA BILANG 129 IN UTTER
DISREGARD OF SECTION 19 (1) OF THE SAME LAW AS WELL AS SETTLED
JURISPRUDENCE ENUNCIATED IN RUSSEL VS. VESTIL, 304 SCRA 738 (MARCH 17, 1999)
WHICH, WITH DUE RESPECT, WAS TAKEN OUT OF CONTEXT.
II
THE HONORABLE COURT COMMITTED AN ERROR IN NOT HOLDING THAT
RESPONDENTS WHO SEEK AFFIRMATIVE RELIEF AND THEREBY INVOKE THE
AUTHORITY OF THE COURT IN THEIR COUNTERCLAIM ARE ESTOPPED TO DENY THE
JURISDICTION OF THE HONORABLE COURT.10
The petition lacks merit.
Petitioners maintain that the complaint filed before the Regional Trial Court is for the
annulment of deed of sale and partition, and is thus incapable of pecuniary estimation.
Respondents, on the other hand, insist that the action is one for annulment of title and
since the assessed value of the property as stated in the complaint is P15,000.00, it falls
within the exclusive jurisdiction of the Municipal Trial Court.
The pertinent portions of the complaint alleged:
4. Sometime in the year 1995, Teofredo A. Embudo, the son-in-law of plaintiffs offered
them portion of Lot No. 1920-F-2, situated in San Isidro, Talisay, Cebu, which defendants
bought on installment basis from Ma. Lourdes Villaber-Padillo. Desirous to live near their
daughter and grandchildren, they accepted defendant’s offer. Immediately, plaintiffs
paid defendants the sum of FIFTEEN THOUSAND PESOS (P15,000.00) as full
consideration and payment of the purchase of 50-square meter lot at a price of THREE
HUNDRED PESOS (P300.00) per square meter;
5. Happily, plaintiffs built their house on the portion they bought from defendants which
is adjacent to defendant’s house. Plaintiffs were issued Tax Declaration No. 53170 for the
house, copy is hereto attached to form part hereof and marked as Annex "A";
6. Notwithstanding repeated demands for the execution of the Deed of Sale, defendants
with insidious machination led plaintiffs to believe that the necessary document of
conveyance could not as yet be executed for the reason that they have not yet paid in full
their obligation to Ma. Lourdes Villaber-Padillo, the original owner of the lot in question,
when in truth and in fact, as plaintiffs came to know later, that the aforesaid defendants
were already in possession of a Deed of Sale over the entire lot in litigation in which it
appeared that they are the sole buyers of the lot, thusly consolidating their ownership of
the entire lot to the exclusion of the plaintiffs. A copy of the Deed of Sale is hereto
attached to form part hereof and marked as Annex "B."
7. As a way to further their fraudulent design, defendants secured the issuance of
Transfer Certificate of Title No. T-99694 solely in their names on the basis of the Deed of
Sale aforementioned (Annex "A" hereof), without the knowledge of the plaintiffs. A copy
of the aforesaid Transfer Certificate of Title is hereto attached as an integral part hereof
and marked as Annex "C."
8. Since considerable time had already elapsed that defendants had given plaintiffs a
which their residential house stands, and despite such demand defendants, without
qualm of conscience refused and still refuse to partition the lot;
xxx xxx xxx;
PRAYER
WHEREFORE, premises considered, this Honorable Court is most respectfully prayed to
render judgment in favor of plaintiffs and against defendants, ordering –
1. Defendants to partition, divide and segregate a portion on which the house of plaintiffs
is situated, with an area of Fifty (50) Square Meters;
2. That the Deed of Sale dated December 28, 1995 entered into by and between
defendants and the previous owner of the lot in question be annulled and cancelled;
3. The Register of Deeds of the Province of Cebu to annul/cancel Transfer Certificate of
Title No. 99694 in the name of the defendants and in lieu thereof directing him to issue
Transfer Certificate of Title in favor of plaintiffs for the 50-square meter lot and another
Transfer Certificate of Title in favor of defendants for the remaining 100-square meter
lot;
4. The Municipal Assessor of Talisay, Cebu to cancel Tax Declaration No. 46493 in the
name of the defendants and directing him to issue Tax Declaration in the name of the
defendants for the 50-square meter lot and another Tax Declaration in the name of the
plaintiffs for the remaining 100-square meter lot;
xxx xxx xxx.11
In Cañiza v. Court of Appeals,12 it was held that what determines the nature of an action
as well as which court has jurisdiction over it are the allegations of the complaint and the
character of the relief sought. Moreover, in Singsong v. Isabela Sawmill,13 we ruled 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 the
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).
The reliance of the petitioners on the case of Russell v. Vestil14 is misplaced. In the said
case, petitioners sought the annulment of the document entitled, "Declaration of Heirs
and Deed of Confirmation of Previous Oral Partition," whereby respondents declared
themselves as the only heirs of the late Spouses Casimero and Cesaria Tautho to the
exclusion of petitioners. Petitioners brought the action in order for them to be recognized
as heirs in the partition of the property of the deceased. It was held that the action to
annul the said deed was incapable of pecuniary estimation and the consequent
annulment of title and partition of the property was merely incidental to the main action.
Indeed, it was also ruled in said case:
While actions under Section. 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 not exceed P20,000.00 in
Metro Manila, or P50,000.00, if located elsewhere. x x x.15
In the case at bar, the principal purpose of petitioners in filing the complaint was to
secure title to the 50-square meter portion of the property which they purchased from
respondents.
Petitioners’ cause of action is based on their right as purchaser of the 50-square meter
portion of the land from respondents. They pray that they be declared owners of the
property sold. Thus, their complaint involved title to real property or any interest therein.
The alleged value of the land which they purchased was P15,000.00, which was within
the jurisdiction of Municipal Trial Court. The annulment of the deed of sale between Ma.
Lourdes Villaber-Padillo and respondents, as well as of TCT No. 99694, were prayed for
in the complaint because they were necessary before the lot may be partitioned and the
50-square meter portion subject thereof may be conveyed to petitioners.
Petitioners’ argument that the present action is one incapable of pecuniary estimation
considering that it is for annulment of deed of sale and partition is not well-taken. As
stated above, 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,
as in this case, the ultimate objective of the plaintiffs 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.
WHEREFORE, in view of the foregoing, the instant petition for review is DENIED. The
Order dated June 27, 2001 of the Regional Trial Court of Cebu City, Branch 7, dismissing
Civil Case No. CEB-24925, and its Order dated July 26, 2001 denying petitioners’ Motion
for Reconsideration, are AFFIRMED.
SO ORDERED.
G.R. No. L-27343 February 28, 1979
MANUEL G. SINGSONG, JOSE BELZUNCE, AGUSTIN E. TONSAY, JOSE L.
ESPINOS, BACOLOD SOUTHERN LUMBER YARD, and OPPEN, ESTEBAN,
INC., plaintiffs-appellees,
vs.
ISABELA SAWMILL, MARGARITA G. SALDAJENO and her husband CECILIO
SALDAJENO LEON GARIBAY, TIMOTEO TUBUNGBANUA, and THE PROVINCIAL
SHERIFF OF NEGROS OCCIDENTAL, defendants, MARGARITA G. SALDAJENO
and her husband CECILIO SALDAJENO, defendants-appellants.
FERNANDEZ, J.:
This is an appeal to the Court of Appeals from the judgment of the Court of First Instance
of Negros Occidental in Civil Cage No. 5343, entitled "Manuel G. Singson, et all vs.
Isabela Sawmill, et al.,", the dispositive portion of which reads:
IN VIEW OF THE FOREGOING CONSIDERATIONS, it is hereby held. (1) that the contract,
Appendix "F", of the Partial Stipulation of Facts, Exh. "A", has not created a chattel
mortgage lien on the machineries and other chattels mentioned therein, all of which are
property of the defendant partnership "Isabela Sawmill", (2) that the plaintiffs, as
creditors of the defendant partnership, have a preferred right over the assets of the said
partnership and over the proceeds of their sale at public auction, superior to the right of
the defendant Margarita G. Saldajeno, as creditor of the partners Leon Garibay and
Timoteo Tubungbanua; (3) that the defendant Isabela Sawmill' is indebted to the
plaintiff Oppen, Esteban, Inc. in the amount of P1,288.89, with legal interest thereon
from the filing of the complaint on June 5, 1959; (4) that the same defendant is indebted
to the plaintiff Manuel G. Singsong in the total amount of P5,723.50, with interest
thereon at the rate of 1 % per month from May 6, 1959, (the date of the statements of
account, Exhs. "L" and "M"), and 25% of the total indebtedness at the time of payment,
for attorneys' fees, both interest and attorneys fees being stipulated in Exhs. "I" to "17",
inclusive; (5) that the same defendant is indebted to the plaintiff Agustin E. Tonsay in the
amount of P933.73, with legal interest thereon from the filing of the complaint on June 5,
1959; (6) that the same defendant is indebted to the plaintiff Jose L. Espinos in the
amount of P1,579.44, with legal interest thereon from the filing of the complaint on June
5, 1959; (7) that the same defendant is indebted to the plaintiff Bacolod Southern
Lumber Yard in the amount of Pl,048.78, with legal interest thereon from the filing of the
complaint on June 5, 1959; (8) that the same defendant is indebted to the plaintiff Jose
Belzunce in the amount of P2,052.10, with legal interest thereon from the filing of the
complaint on June 5. 1959; (9) that the defendant Margarita G. Saldajeno, having
purchased at public auction the assets of the defendant partnership over which the
plaintiffs have a preferred right, and having sold said assets for P 45,000.00, is bound to
pay to each of the plaintiffs the respective amounts for which the defendant partnership
is held indebted to, them, as above indicated and she is hereby ordered to pay the said
amounts, plus attorneys fees equivalent to 25% of the judgment in favor of the plaintiff
Manuel G. Singson, as stipulated in Exhs. "I" "to I-17", inclusive, and 20% of the
respective judgments in favor of the other plaintiffs, pursuant to. Art. 2208, pars. (5) and
(11), of the Civil Code of the Philippines; (10) The defendants Leon Garibay and Timoteo
Tibungbanua are hereby ordered to pay to the plaintiffs the respective amounts
adjudged in their favor in the event that said plaintiffs cannot recover them from the
defendant Margarita G. Saldajeno and the surety on the bond that she has filed for the
lifting of the injunction ordered by this court upon the commencement of this case.
The cross-claim cf the defendant Margarita G. Saldajeno against the defendants Leon
Garibay arid Timoteo Tubungbanua is hereby discussed Margarita G. Saldajeno shall pay
the costs.
SO ORDERED.1
In a resolution promulgated on February 3, 1967, the Court of Appeals certified the
records of this case to the Supreme Court "considering that the resolution of this appeal
involves purely questions or question of law over which this Court has no jurisdiction ... 2
On June 5. 1959, Manuel G. Singsong, Jose Belzunce, Agustin E. Tonsay, Jose L. Espinos,
Bacolod Southern Lumber Yard, and Oppen, Esteban, Inc. filed in the Court of first
Instance of Negros Occidental, Branch I, against "Isabela Sawmill", Margarita G.
Saldajeno and her husband Cecilio Saldajeno, Leon Garibay, Timoteo Tubungbanua and
the Provincial Sheriff of Negros Occidental a complaint the prayer of which reads:
WHEREFORE, the plaintiffs respectfully pray:
(1) That a writ of preliminary injunction be issued restraining the defendant Provincial
Sheriff of Negros Occidental from proceeding with the sales at public auction that he
advertised in two notices issued by him on May 18, 1959 in connection with Civil Case No.
5223 of this Honorable Court, until further orders of this Court; and to make said
injunction permanent after hearing on the merits:
(2) That after hearing, the defendant partnership be ordered; to pay to the plaintiff
Manuel G. Singson the sum of P3,723.50 plus 1% monthly interest thereon and 25%
attorney's fees, and costs; to pay to the plaintiff JoseBelzunce the sum of P2,052.10, plus
6% annual interest thereon and 25% for attorney's fees, and costs;to pay to the plaintiff
Agustin E. Tonsay the sum of P993.73 plus 6% annual interest thereon and 25%
attorney's fees, and costs; to pay to the plaintiff Bacolod Southern Lumber Yard the sum
of P1,048.78, plus 6% annual interest thereon and 25% attorney's fees, and costs; and
to pay to the plaintiff Oppen, Esteban, Inc. the sum of P1,350.89, plus 6% annual
interest thereon and 25% attorney's fees and costs:
(3) That the so-called Chattel Mortgage executed by the defendant Leon Garibay and
Timoteo Tubungbanua in favor of the defendant Margarita G. Saldajeno on May 26, 1958
be declared null and void being in fraud of creditors of the defendant partnership and
without valuable consideration insofar as the said defendant is concerned:
(4) That the Honorable Court order the sale of public auction of the assets of the
defendnat partnership in case the latter fails to pay the judgment that the plaintiffs may
recover in the action, with instructions that the proceeds of the sale b e applied in
payment of said judgment before any part of saod proceeds is paid to the defendant
Margarita G. Saldajeno;
(5) That the defendant Leon Garibay, Timoteo Tubungbanua, and Margarita G.
Saldajeno be declared jointly liable to the plaintifs for whatever deficiency may remain
unpaid after the proceeds of the sale of the assets of the defendnt partnership are
supplied in payment of the judgment that said plaintiffs may recover in this action;
(6) The plaintiffs further pray for all other remedies to which the Honorable Court will
find them entitled to, with costs to the defendants.
Bacolod City, June 4, 1959.3
The action was docketed as Civil Case No. 5343 of said court.
In their amended answer, the defendants Margarita G. Saldajeno and her husband,
Cecilio Saldajeno, alleged the following special and affirmative defenses:
xxx xxx xxx
2. That the defendant Isabela Sawmill has been dissolved by virtue of an action entitled
"In the matter of: Dissolution of Isabela Sawmill as partnership, etc. Margarita G.
Saldajeno et al. vs. Isabela Sawmill, et al., Civil Case No. 4787, Court of First Instance of
Negros Occidental;
3. That as a result of the said dissolution and the decision of the Court of First Instance of
Negros Occidental in the aforesaid case, the other defendants herein Messrs. Leon
Garibay and Timoteo Tubungbanua became the successors-in-interest to the said
defunct partnership and have bound themselves to answere for any and all obligations of
the defunct partnership to its creditors and third persons;
4. That to secure the performance of the obligations of the other defendants Leon
Garibay and Timoteo Tubungbanua to the answering defendant herein, the former have
constituted a chattel mortgage over the properties mentioned in the annexes to that
instrument entitled "Assignment of Rights with Chattel Mortgage" entered into on May 26,
1968 and duly registered in the Register of Deeds of Negros Occidental on the same
date:
5. That all the plaintiffs herein, with the exceptionof the plaintiff Oppen, Esteban, Inc. are
creditors of Messrs. Leon Garibay and Timoteo Tubungbanua and not of the defunct
Isabela Sawmill and as such they have no cause of action against answering defendant
herein and the defendant Isabela Sawmill;
6. That all the plaintiffs herein, except for the plaintiff Oppen, Esteban, Inc. granted cash
advances, gasoline, crude oil, motor oil, grease, rice and nipa to the defendants Leon
Garibay and Timoteo Tubungbanua with the knowledge and notice that the Isabela
Sawmill as a former partnership of defendants Margarita G. Isabela Sawmill as a former
partnership of defendants Margarita G. Saldajeno, Leon Garibay and Timoteo
Tubungbanua, has already been dissolved;
7. That this Honorable Court has no jurisdictionover the claims of the plaintiffs Oppen,
Esteban, Inc., Agustin R. Tonsay, Jose L. Espinos, and the Bacolod Southern Lumber
Yard, it appearing that the amounts sought to be recovered by them in this action is less
than P2,000.00 each, exclusive of interests;
8. That in so far as the claims of these alleged creditors plaintiffs are concerned, there is
a misjoinder of parties because this is not a class suit, and therefore this Honorable Court
cannot take jurisdictionof the claims for payment;
9. That the claims of plaintiffs-creditors, except Oppen, Esteban, Inc. go beyond the limit
mentioned inthe statute of frauds, Art. 1403 of the Civil Code, and are therefor
unenforceable, even assuming that there were such credits and claims;
10. That this Honorable Court has no jurisdiction in this case for it is well settled in law
and in jurisprudence that a court of first instance has no power or jurisdiction to annul
judgments or decrees of a coordinate court because other function devolves upon the
proper appellate court; (Lacuna, et al. vs. Ofilada, et al., G.R. No. L-13548, September 30,
1959; Cabigao vs. del Rosario, 44 Phil. 182; PNB vs. Javellana, 49 O.G. No. 1, p.124), as
it appears from the complaint in this case to annul the decision of this same court, but of
another branch (Branch II, Judge Querubin presiding).4
Said defendants interposed a cross-claim against the defendsants Leon Garibay and
Timoteo Tubungbanua praying "that in the event that judgment be rendered ordering
defendant cross claimant to pay to the plaintiffs the amount claimed in the latter's
complaint, that the cross claimant whatever amount is paid by the latter to the plaintiff in
accordance to the said judgment. ...5
After trial, judgment was rendered in favor of the plaintiffs and against the defendants.
The defendants, Margarita G. Saldajeno and her husband Cecilio Saldajeno, appealed to
the Court of Appeals assigning the following errors:
I X
THE COURT A QUO ERRED IN ASSUMING JURISDICTION OVER THE CASE.
II
THE COURT A QUO ERRED IN HOLDING THAT THE ISSUE WITH REFERENCE TO THE
WITHDRAWAL OF DEFENDANT-APPELLANT MARGARITA G. SALDAJENO FROM THE
PARTNERSHIP "SABELA SAWMILL" WAS WHETHER OR NOT SUCH WITHDRAWAL
CAUSED THE "COMPLETE DISAPPEARANCE" OR "EXTINCTION" OF SAID PARTNERSHIP.
III
THE COURT A QUO ERRED IN OT HOLDING THAT THE WITHDRAWAL OF
DEFENDANT-APPELLANT MARGARITA G. SALDAJENO AS A PARTNER THEREIN
DISSOLVED THE PARTNERSHIP "ISABELA SAWMILL" (FORMED ON JAN. 30, 1951
AMONG LEON GARIBAY, TIMOTEO TUBUNGBANUA AND SAID MARGARITA G.
SALDAJENO).
IV
THE COURT A QUO ERRED IN ISSUING THE WRIT OF PRELIMINARY INJUNCTION.
V
THE COURT A QUO ERRED IN HOLDING THAT THE CHATTEL MORTGAGE DATED MAY
26, 1958, WHICH CONSTITUTED THE JUDGMENT IN CIVIL CASE NO. 4797 AND WHICH
WAS FORECLOSED IN CIVIL CASE NO. 5223 (BOTH OF THE COURT OF FIRST INSTANCE
OF NEGROS OCCIDENTAL) WAS NULL AND VOID.
VI
THE COURT A QUO ERRED IN HOLDING THAT THE CHATTLES ACQUIRED BY
DEFENDANT-APPELLANT MARGARITA G. SALDAJENO IN THE FORECLOSURE SALE IN
CIVIL CASE NO. 5223 CONSTITUTED 'ALL THE ASSETS OF THE DEFENDNAT
PARTNERSHIP.
VII
THE COURT A QUO ERRED IN HOLDING THAT DEFENDANT-APPELLANT MARGARITA G.
SALDAJENO BECAME PRIMARILY LIABLE TO THE PLAINTFFS-APPELLEES FOR HAVING
ACQUIRED THE MORTGAGED CHATTLES IN THE FORECLOSURE SALE CONDUCTED IN
CONNECTION WITH CIVIL CASE NO. 5223.
VIII
THE COURT A QUO ERRED IN HOLDING DEFENDANT-APPELLANT MARGARITA G.
SALDAJENO LIABLE FOR THE OBLIGATIONS OF MESSRS. LEON GARIBAY AND TIMOTEO
TUBUNGBANUA, INCURRED BY THE LATTER AS PARTNERS IN THE NEW 'ISABELA
SAWMILL', AFTER THE DISSOLUTION OF THE OLD PARTNERSHIP IN WHICH SAID
MARGARITA G. SALDAJENO WAS A PARTNER.
IX
THE COURT A QUO ERRED IN HOLDING DEFENDANT-APPELLANT MARGARITA G.
SALDAJENO LIABLE TO THE PLAINTIFFS-APPELLEES FOR ATTORNEY'S FEES.
THE COURT A QUO ERRED IN NOT DISMISSING THE COMPLAINT OF THE
PLAINTIFFS-APPELLEES.
XI
THE COURT A QUO ERRED IN DISMISSING THE CROSS-CLAIM OF
DEFENDANT-APPELLANT MARGARITA G. SALDAJENO AGAINST CROSS-DEFENDANTS
LEON GARIBAY AND TIMOTEO TUBUNGBANUA.6
The facts, as found by the trial court, are:
At the commencement of the hearing of the case on the merits the plaintiffs and the
defendant Cecilio and Margarita g. Saldajeno submittee a Partial Stipulation of Facts that
was marked as Exh. "A". Said stipulation reads as folows:
1. That on January 30, 1951 the defendants Leon Garibay, Margarita G. Saldejeno, and
Timoteo Tubungbanua entered into a Contract of Partnership under the firm name
"Isabela Sawmill", a copy of which is hereto attached Appendix "A".
2. That on February 3, 1956 the plaintiff Oppen, Esteban, Inc. sold a Motor Truck and
two Tractors to the partnership Isabela Sawmill for the sum of P20,500.00. In order to
pay the said purcahse price, the said partnership agreed to make arrangements with the
International Harvester Company at Bacolod City so that the latter would sell farm
machinery to Oppen, Esteban, Inc. with the understanding that the price was to be paid
by the partnership. A copy of the corresponding contract of sle is attached hereto as
Appendix "B".
3. That through the method of payment stipulated in the contract marked as Appendix
"B" herein, the International Harvester Company has been paid a total of P19,211.11,
leaving an unpaid balance of P1,288.89 as shown in the statements hereto attached as
Appendices "C", "C-1", and "C-2".
4. That on April 25, 1958 Civil Case No. 4797 was filed by the spouses Cecilio Saldajeno
and Margarita G. Saldajeno against the Isabela Sawmill, Leon Garibay, and Timoteo
Tubungbanua, a copy of which Complaint is attached as Appendix 'D'.
5. That on April 27, 1958 the defendants LeonGaribay, Timoteo Tubungbanua and
Margarita G. Saldajeno entered into a "Memorandum Agreement", a copy of which is
hereto attached as Appendix 'E' in Civil Case 4797 of the Court of First Instance of Negros
Occidental.
6. That on May 26, 1958 the defendants Leon Garibay, Timoteo Tubungbanua and
Margarita G. Saldajeno executed a document entitled "Assignment of Rights with Chattel
Mortgage", a copy of which documents and its Annexes "A" to "A-5" forming a part of the
record of the above mentioned Civil Case No. 4797, which deed was referred to in the
Decision of the Court ofFirst Instance of Negros Occidental in Civil Case No. 4797 dated
May 29, 1958, a copy of which is hereto attached as Appendix "F" and "F-1" respectively.
7. That thereafter the defendants Leon Garibay and Timoteo Tubungbanua did not divide
the assets and properties of the "Isabela Sawmill" between them, but they continued the
business of said partnership under the same firm name "Isabela Sawmill".
8. That on May 18, 1959 the Provincial Sheriff of Negros Occidental published two (2)
notices that he would sell at public auction on June 5, 1959 at Isabela, Negros Occidental
certain trucks, tractors, machinery, officeequipment and other things that were involved
in Civil Case No. 5223 of the Court of First Instance of Negros Occidental, entitled
"Margarita G. Saldajeno vs. Leon Garibay, et al." See Appendices "G" and "G-1".
9. That on October 15, 1969 the Provincial Sheriff of Negros Occidental executed a
Certificate ofSale in favor of the defendant Margarita G. Saldajeno, as a result of the sale
conducted by him on October 14 and 15, 1959 for the enforcement of the judgment
rendered in Civil Case No. 5223 of the Court of First Instance of Negros Occidental, a
certified copy of which certificte of sale is hereto attached as Appendix "H".
10. That on October 20, 1959 the defendant Margarita G. Saldajeno executed a deed of
sale in favor of the Pan Oriental Lumber Company transfering to the latter for the sum of
P45,000.00 the trucks, tractors, machinery, and other things that she had purchashed at
a public auction referred to in the foregoing paragraph, a certified true copy of which
Deed of Sale is hereto attached as Appendix "I".
11. The plaintiffs and the defendants Cecilio Saldajeno and Margarita G. Saldajeno
reserve the right to present additional evidence at the hearing of this case.
Forming parts of the above copied stipulation are documents that were marked as
Appendices "A", "B", "C", "C-1", "C-2", "D", "E", "F", "F-1", "G", "G-1", "H", and "I".
The plaintiffs and the defendants Cecilio and Margarita G. Saldajeno presented additional
evidence, mostly documentary, while the cross-defendants did not present any evidence.
The case hardly involves quetions of fact at all, but only questions of law.
The fact that the defendnat 'Isabela Sawmill' is indebted to theplaintiff Oppen, Esteban,
Inc. in the amount of P1,288.89 as the unpaid balance of an obligation of P20,500.00
contracted on February 3, 10956 is expressly admitted in paragraph 2 and 3 of the
Stipulation, Exh. "A" and its Appendices "B", "C", "C-1", and "C-2".
The plaintiff Agustin E. Tonssay proved by his own testimony and his Exhs. "B" to"G" that
from October 6, 1958 to November 8, 1958 he advanced a total of P4,200.00 to the
defendant 'Isabela Sawmill'. Agaist the said advances said defendant delivered to Tonsay
P3,266.27 worth of lumber, leavng an unpaid balance of P933.73, which balance was
confirmed on May 15, 1959 by the defendant Leon Garibay, as Manager of the defendant
partnership.
The plaintiff Manuel G. Singsong proved by his own testimony and by his Exhs. "J" to "L"
that from May 25, 1988 to January 13, 1959 he sold on credit to the defendnat "Isabela
Sawmill" rice and bran, on account of which business transaction there remains an
unpaid balance of P3,580.50. The same plaintiff also proved that the partnership ownes
him the sum of P143.00 for nipa shingles bought from him on credit and unpaid for.
The plaintiff Jose L. Espinos proved through the testimony of his witness Cayetano
Palmares and his Exhs. "N" to "O-3" that he owns the "Guia Lumber Yard", that on
October 11, 1958 said lumber yard advanced the sum of P2,500.00 to the defendant
"Isabela Sawmill", that against the said cash advance, the defendant partnership
delivered to Guia Lumber Yard P920.56 worth of lumber, leaving an outstanding balance
of P1,579.44.
The plaintiff Bacolod Southern Lumber Yard proved through the testimony of the witness
Cayetano Palmares an its Exhs. "P" to "Q-1" that on October 11, 1958 said plaintiff
advanced the sum of P1,500.00 to the defendsant 'Isabela Sawmill', that against the said
cash advance, the defendant partnership delivered to the said plaintiff on November 19,
1958 P377.72 worth of lumber, and P73.54 worth of lumber on January 27, 1959, leaving
an outstanding balance of P1,048.78.
The plaintiff Jose Balzunce proved through the testimony of Leon Garibay whom he
called as his witness, and through the Exhs. "R" to "E" that from September 14, 1958 to
November 27, 1958 he sold to the defedant "Isabela Sawmill" gasoline, motor fuel, and
lubricating oils, and that on account of said transactions, the defendant partnersip ownes
him an unpaid balance of P2,052.10.
Appendix "H" of the stipulation Exh. "A" shows that on October 13 and 14, 1959 the
Provincial Sheriff sold to the defendant Margrita G. Saldajeno for P38,040.00 the assets
of the defendsant "Isabela Sawmill" which the defendants Leon G. Garibay and Timoteo
Tubungbanua had mortgaged to her, and said purchase price was applied to the
judgment that she has obtained against he said mortgagors in Civil Case No. 5223 of this
Court.
Appendix "I" of the same stipulation Exh. "A" shows that on October 20, 1959 the
defendant Margarita G. Saldajeno sold to the PAN ORIENTAL LUMBER COMPANY for
P45,000.00 part of the said properties that she had bought at public aucton one week
before.
xxx xxx xxx7
It is contended by the appellants that the Court of First Instance of Negros Occidental
had no jurisdiction over Civil Case No. 5343 because the plaintiffs Oppen, Esteban, Inc.,
Agustin R. Tonsay, Jose L. Espinos and the Bacolod Southern Lumber Yard sought to
collect sums of moeny, the biggest amount of which was less than P2,000.00 and,
therefore, within the jurisdiction of the municipal court.
This contention is devoid of merit because all the plaintiffs also asked for the nullity of
the assignment of right with chattel mortgage entered into by and between Margarita G.
Saldajeno and her former partners Leon Garibay and Timoteo Tubungbanua. This cause
of action is not capable of pecuniary estimation and falls under the jurisdiction of the
Court of First Instnace. Where the basic issue is something more than the right to
recover a sum of money and where the money claim is purely incidental to or a
consequence of the principal relief sought, the action is as a case where the subject of
the litigation is not capable of pecuniary estimation and is cognizable exclusively by the
Court of First Instance.
The jurisdiction of all courts in the Philippines, in so far as the authority thereof depends
upon the nature of litigation, is defined in the amended Judiciary Act, pursuant to which
courts of first instance shall have exclusive original jurisdiction over any case the subject
matter of which is not capable of pecuniary estimation. An action for the annulment of a
judgment and an order of a court of justice belongs to th category.8
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 cliam is considered capable of pecuniary estimation, and whether jurisdiciton
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
ogf the litigation may not be estimated in terms of money, and are cognizable exclusively
by courts of first instance.
In Andres Lapitan vs. SCANDIA, Inc., et al.,9 this Court held:
Actions for specific performance of contracts have been expressly prounounced to be
exclusively cognizable by courts of first instance: De Jesus vs. Judge Garcia, L-26816,
February 28, 1967; Manufacturers' Distributors, Inc. vs. Yu Siu Liong, L-21285, April 29,
1966. And no cogent reason appears, and none is here advanced by the parties, why an
actin for rescission (or resolution) should be differently treated, a "rescission" being a
counterpart, so to speak, of "specific performance'. In both cases, the court would
certainly have to undertake an investigation into facts that would justify one act of the
other. No award for damages may be had in an action for resicssion without first
conducting an inquiry into matters which would justify the setting aside of a contract, in
the same manner that courts of first instance would have to make findings of fact and
law in actions not capable of pecuniary estimnation espressly held to be so by this Court,
arising from issues like those arised in Arroz v. Alojado, et al., L-22153, March 31, 1967
(the legality or illegality of the conveyance sought for and the determination of the
validity of the money deposit made); De Ursua v. Pelayo, L-13285, April 18, 1950
(validity of a judgment); Bunayog v. Tunas, L-12707, December 23, 1959 (validity of a
mortgage); Baito v. Sarmiento, L-13105, August 25, 1960 (the relations of the parties,
the right to support created by the relation, etc., in actions for support); De Rivera, et al.
v. Halili, L-15159, September 30, 1963 (the validity or nullity of documents upon which
claims are predicated). Issues of the same nature may be raised by a party against whom
an action for rescission has been brought, or by the plaintiff himself. It is, therefore,
difficult to see why a prayer for damages in an action for rescission should be taken as
the basis for concluding such action for resiccison should be taken as the basis for
concluding such action as one cpable of pecuniary estimation - a prayer which must be
included in the main action if plaintiff is to be compensated for what he may have
suffered as a result of the breach committed by defendant, and not later on precluded
from recovering damages by the rule against splitting a cause of action and discouraging
multiplicitly of suits.
The foregoing doctrine was reiterated in The Good Development Corporation vs.
Tutaan, 10 where this Court held:
On the issue of which court has jurisdiction, the case of SENO vs. Pastolante, et al., is in
point. It was ruled therein that although the purposes of an action is to recover an
amount plus interest which comes within the original jurisidction of the Justice of the
Peace Court, yet when said action involves the foreclosure of a chattel mortgage
covering personal properties valued at more than P2,000, (now P10,000.00) the action
should be instituted before the Court of First Instance.
In the instanct, case, the action is to recover the amount of P1,520.00 plus interest and
costs, and involves the foreclosure of a chattel mortgage of personal properties valued at
P15,340.00, so that it is clearly within the competence of the respondent court to try and
resolve.
In the light of the foregoing recent rulings, the Court of First Instance of Negros
Occidental did no err in exercising jurisidction over Civil Case No. 5343.
The appellants also contend that the chattel mortgage may no longer be annulled
because it had been judicially approved in Civil Case No. 4797 of the Court of First
Instance of Negros Occidental and said chattel mortgage had been ordered foreclosed in
Civil Case No. 5223 of the same court.
On the question of whether a court may nullify a final judgment of another court of
co-equal, concurrent and coordinate jusridiction, this Court originally ruled that:
A court has no power to interfere with the judgments or decrees of a court of concurrent
or coordinate jurisdiction having equal power to grant the relief sought by the injunction.
The various branches of the Court of First Instance of Manila are in a sense coordinate
courts and cannot be allowed to interfere with each others' judgments or decrees. 11
The foregoing doctrine was reiterated in a 1953 case 12 where this Court said:
The rule which prohibits a Judge from intertering with the actuations of the Judge of
another branch of the same court is not infringed when the Judge who modifies or annuls
the order isued by the other Judge acts in the same case and belongs to the same court
(Eleazar vs. Zandueta, 48 Phil. 193. But the rule is infringed when the Judge of a branch
of the court issues a writ of preliminary injunction in a case to enjoint the sheriff from
carrying out an order by execution issued in another case by the Judge of another branch
of the same court. (Cabigao and Izquierdo vs. Del Rosario et al., 44 Phil. 182).
This ruling was maintained in 1967. In Mas vs. Dumaraog, 13 the judgment sought to be
annulled was rendered by the Court of First Instance of Iloilo and the action for
annullment was filed with the Court of First Instance of Antique, both courts belonging to
the same Judicial District. This Court held that:
The power to open, modify or vacant a judgment is not only possessed by but restricted
to the court in which the judgment was rendered.
The reason of this Court was:
Pursuant to the policy of judicial stability, the judgment of a court of competent
jurisdiction may not be interfered with by any court concurrrent jurisdiction.
Again, in 1967 this Court ruled that the jurisdiction to annul a judgement of a branch of
the court of First Instance belongs solely to the very same branch which rendered the
judgement. 14
Two years later, the same doctrine was laid down in the Sterling Investment case.15
In December 1971, however, this court re-examined and reversed its earlier doctrine on
the matter. In Dupla v. Court of Appeals, 16 this Tribunal, speaking through Mr. Justice
Villamor declared:
... the underlying philosophy expressed in the Dumara-og case, the policy of judicial
stability, to the end that the judgment of a court of competent jurisdiction may not be
interfered with by any court of concurrent jurisdiction may not be interfered with by any
court of concurrent jurisdiciton, this Court feels that this is as good an occasion as any to
re-examine the doctrine laid down ...
In an action to annul the judgment of a court, the plaintiff's cause of action springs from
the alleged nullity of the judgment based on one ground or another, particularly fraud,
which fact affords the plaintiff a right to judicial interference in his behalf. In such a suit
the cause of action is entirely different from that in the actgion which grave rise to the
judgment sought to be annulled, for a direct attack against a final and executory
judgment is not a incidental to, but is the main object of the proceeding. The cause of
action in the two cases being distinct and separate from each other, there is no plausible
reason why the venue of the action to annul the judgment should necessarily follow the
venue of the previous action ...
The present doctrine which postulate that one court or one branch of a court may not
annul the judgment of another court or branch, not only opens the door to a violation of
Section 2 of Rule 4, (of the Rules of Court) but also limit the opportunity for the
application of said rule.
Our conclusion must therefore be that a court of first instance or a branch thereof has
the authority and jurisdiction to take cognizance of, and to act in, suit to annul final and
executory judgment or order rendered by another court of first instance or by another
branch of the same court...
In February 1974 this Court reiterated the ruling in the Dulap case.17
In the light of the latest ruling of the Supreme Court, there is no doubt that one branch of
the Court of First Instance of Negros Occidental can take cognizance of an action to
nullify a final judgment of the other two branches of the same court.
It is true that the dissolution of a partnership is caused by any partner ceasing to be
associated in the carrying on of the business. 18 However, on dissolution, the
partnershop is not terminated but continuous until the winding up to the business. 19
The remaining partners did not terminate the business of the partnership "Isabela
Sawmill". Instead of winding up the business of the partnership, they continued the
business still in the name of said partnership. It is expressly stipulated in the
memorandum-agreement that the remaining partners had constituted themselves as the
partnership entity, the "Isabela Sawmill". 20
There was no liquidation of the assets of the partnership. The remaining partners, Leon
Garibay and Timoteo Tubungbanua, continued doing the business of the partnership in
the name of "Isabela Sawmill". They used the properties of said partnership.
The properties mortgaged to Margarita G. Saldajeno by the remaining partners, Leon
Garibay and Timoteo Tubungbanua, belonged to the partnership "Isabela Sawmill." The
appellant, Margarita G. Saldajeno, was correctly held liable by the trial court because she
purchased at public auction the properties of the partnership which were mortgaged to
her.
It does not appear that the withdrawal of Margarita G. Saldajeno from the partnership
was published in the newspapers. The appellees and the public in general had a right to
expect that whatever, credit they extended to Leon Garibay and Timoteo Tubungbanua
doing the business in the name of the partnership "Isabela Sawmill" could be enforced
against the proeprties of said partnership. The judicial foreclosure of the chattel
mortgage executed in favor of Margarita G. Saldajeno did not relieve her from liability to
the creditors of the partnership.
The appellant, margrita G. Saldajeno, cannot complain. She is partly to blame for not
insisting on the liquidaiton of the assets of the partnership. She even agreed to let Leon
Garibay and Timoteo Tubungbanua continue doing the business of the partnership
"Isabela Sawmill" by entering into the memorandum-agreement with them.
Although it may be presumed that Margarita G. Saldajeno had action in good faith, the
appellees aslo acted in good faith in extending credit to the partnership. Where one of
two innocent persons must suffer, that person who gave occasion for the damages to be
caused must bear the consequences. Had Margarita G. Saldajeno not entered into the
memorandum-agreement allowing Leon Garibay and Timoteo Tubungbanua to continue
doing the business of the aprtnership, the applees would not have been misled into
thinking that they were still dealing with the partnership "Isabela Sawmill". Under the
facts, it is of no moment that technically speaking the partnership "Isabela Sawmill" was
dissolved by the withdrawal therefrom of Margarita G. Saldajeno. The partnership was
not terminated and it continued doping business through the two remaining partners.
The contention of the appellant that the appleees cannot bring an action to annul the
chattel mortgage of the propertiesof the partnership executed by Leon Garibay and
Timoteo Tubungbanua in favor of Margarita G. Saldajeno has no merit.
As a rule, a contract cannot be assailed by one who is not a party thereto. However,
when a contract prejudices the rights of a third person, he may file an action to annul the
contract.
This Court has held that a person, who is not a party obliged principally or subsidiarily
under a contract, may exercised an action for nullity of the contract if he is prejudiced in
his rights with respect to one of the contracting parties, and can show detriment which
would positively result to him from the contract in which he has no intervention. 21
The plaintiffs-appellees were prejudiced in their rights by the execution of the chattel
mortgage over the properties of the partnership "Isabela Sawmill" in favopr of Margarita
G. Saldajeno by the remaining partners, Leon Garibay and Timoteo Tubungbanua. Hence,
said appelees have a right to file the action to nullify the chattel mortgage in question.
The portion of the decision appealed from ordering the appellants to pay attorney's fees
to the plaintiffs-appellees cannot be sustained. There is no showing that the appellants
displayed a wanton disregard of the rights of the plaintiffs. Indeed, the appellants
believed in good faith, albeit erroneously, that they are not liable to pay the claims.
The defendants-appellants have a right to be reimbursed whatever amounts they shall
pay the appellees by their co-defendants Leon Garibay and Timoteo Tubungbanua. In
the memorandum-agreement, Leon Garibay and Timoteo Tubungbaun undertook to
release Margarita G. Saldajeno from any obligation of "Isabela Sawmill" to third
persons. 22
WHEREFORE, the decision appealed from is hereby affirmed with the elimination of the
portion ordering appellants to pay attorney's fees and with the modification that the
defendsants, Leon Garibay and Timoteo Tubungbanua, should reimburse the
defendants-appellants, Margarita G. Saldajeno and her husband Cecilio Saldajeno,
whatever they shall pay to the plaintiffs-appellees, without pronouncement as to costs.
SO ORDERED.
G.R. No. 165777 July 25, 2011
CEFERINA DE UNGRIA [DECEASED], substituted by her HEIRS, represented
by LOLITA UNGRIA SAN JUAN-JAVIER, and RHODORA R. PELOMIDA as their
Attorney-in-fact, Petitioner,
vs.
THE HONORABLE COURT OF APPEALS, THE HONORABLE REGIONAL TRIAL
COURT OF GENERAL SANTOS CITY, BRANCH 35, ROSARIO DIDELES VDA. DE
CASTOR, NEPTHALIE CASTOR ITUCAS, FEROLYN CASTOR FACURIB, RACHEL
DE CASTOR, LEA CASTOR DOLLOLOSA, and ROSALIE CASTOR
BENEDICTO, Respondents.
DECISION
PERALTA, J.:
Assailed in this petition for review on certiorari are the
Decision1
dated May 26, 2004 and
the Resolution2 dated September 17, 2004 of the Court of Appeals (CA) in CA-G.R. SP No.
60764.
On August 26, 1999, respondents Rosario Dideles Vda. de Castor (Rosario), Nepthalie
Castor Itucas, Ferolyn Castor Facurib (Ferolyn), Rachel De Castor, Lea Castor Dollolosa
and Rosalie Castor Benedicto, filed with the Regional Trial Court (RTC) of General Santos
City a Complaint3 for ownership, possession and damages, and alternative causes of
action either to declare two documents as patent nullities, and/or for recovery of
Rosario's conjugal share with damages or redemption of the subject land against
petitioner Ceferina de Ungria, defendants Avelino Gumban, Dolores Cagaitan, Zacasio
Poutan, PO1 Jonas Montales, Ignacio Olarte and alias Dory. Respondent Rosario is the
surviving wife of the late Fernando Castor, while the rest of the respondents are their
legitimate children. The documents they sought to annul are (1) the Deed of Transfer of
Rights and Interest including Improvements thereon dated October 3, 1960 allegedly
executed by Fernando in favor of Eugenio de Ungria, petitioner's father; and (2) the
Affidavit of Relinquishment dated November 23, 1960 executed by Eugenio in favor of
petitioner.
Petitioner Ceferina filed a Motion to Dismiss4 (Ex-Abundante Ad Cautelam) on the
following grounds: (1) the claim or demand has been extinguished by virtue of the valid
sale of Lot No. 1615 to Eugenio; (2) the action is barred by extraordinary acquisitive
prescription; (3) the action is barred by laches; and (4) plaintiff failed to state a cause of
action, or filed the case prematurely for failure to resort to prior barangay conciliation
proceedings.
Petitioner also filed an Addendum to the Motion to Dismiss5 raising the following
additional grounds: (1) plaintiffs have no legal capacity to sue; and (2) the court has no
jurisdiction over the case for failure of plaintiffs to pay the filing fee in full. Respondents
filed their Opposition thereto.
On November 19, 1999, the RTC issued an Order6 denying the motion to dismiss, to wit:
After the motion to dismiss and its addendum have been received, it is now ripe for
resolution. One of the grounds alleged in the complaint is for the recovery of conjugal
share on Lot No. 1615, of Pls-209 D with damages.
It is alleged that the late Fernando Castor and Rosario Dideles Vda. de Castor were
married on September 15, 1952, and the application to the land was dated January 17,
1952 and the patent was issued by the President on November 19, 1954.
The said land was sold to the defendant on October 3, 1960 (Annex C) and an Affidavit of
Relinquishment dated November 23, 1960 which was made a part thereof as Annex "D."
Considering the marriage of September 15, 1992, the said land became conjugal as of
the date of the marriage and, therefore, ½ thereof belongs to the wife, Rosario Dideles
Vda. de Castor.
Thus, considering the above, the motion to dismiss is DENIED.7
Petitioner Ceferina filed a Motion for Reconsideration,8 which the RTC denied in an
Order9 dated February 4, 2000.
Petitioner filed an Omnibus Motion10 asking the RTC to resolve the issues of (1) whether
or not the complaint should be dismissed or expunged from the records pursuant to
Supreme Court (SC) Circular No. 7; (2) reconsidering the findings contained in the Order
dated February 4, 2000; and (3) holding in abeyance the submission of the answer to the
complaint.
Pending resolution of the motion, respondents filed a Motion to Allow11 them to continue
prosecuting this case as indigent litigants.
On March 8, 2000, the RTC resolved the Omnibus Motion in an Order 12 that read in this
wise:
On the omnibus motion regarding filing fees, the plaintiffs asserted in its motion that
they are charging defendant actual and compensatory damages such as are proved
during the hearing of this case. So also are attorney’s fees and moral damages, all to be
proved during the hearing of this case.
Since there was no hearing yet, they are not in a possession (sic) to determine how much
is to be charged.
At any rate, if after hearing the Clerk of Court determine that the filing fees is still
insufficient, considering the total amount of the claim, the Clerk of Court should
determine and, thereafter, if any amount is found due, he must require the private
respondent to pay the same x x x.
As to the second issue, the same has already been decided in its order dated February 4,
2000.
WHEREFORE, premises considered, the omnibus motion is DENIED.
The defendant shall file their answer within fifteen (15) days from receipt of this order.13
From this Order, petitioner filed a motion for reconsideration and clarification on whether
plaintiffs should be allowed to continue prosecuting the case as indigent litigants.
On March 30, 2000, the RTC issued a Clarificatory Order14 reading as follows:
As has been said, the plaintiff asserted in its motion that they are charging defendants
actual and compensatory damages as has been proved during the hearing of this case.
So also are attorney's fees and moral damages all to be proved during the hearing of this
case.
Since there was no hearing yet, they are not in a possession (sic) to determine how much
is to be charged.
At any rate, after hearing, the Clerk of Court determines that the filing fee is still
insufficient, the same shall be considered as lien on the judgment that may be entered.
As to the motion seeking from the Honorable Court allowance to allow plaintiff to
continue prosecuting this case as indigent litigants, suffice it to say that the same is
already provided for in this order.
WHEREFORE, the defendants shall file their answer within fifteen (15) days from receipt
of this Order.15
In an Order dated May 31, 2000, the RTC again denied petitioner's motion for
reconsideration.
Petitioner filed with the CA a petition for certiorari and prohibition with prayer for the
issuance of a temporary restraining order and/or writ of preliminary injunction. Petitioner
sought the nullification of the Order dated November 19, 1999 and the subsequent
orders issued by the RTC thereto for having been issued with grave abuse of discretion
amounting to lack or excess of jurisdiction. Respondents filed their Comment thereto.
In a Decision dated May 26, 2004, the CA dismissed the petition. The CA found that SC
Circular No. 7 would not apply where the amount of damages or value of the property
was immaterial; that the Circular could be applied only in cases where the amount
claimed or the value of the personal property was determinative of the court's jurisdiction
citing the case of Tacay v. RTC of Tagum, Davao del Norte. 16 The CA found that
respondents had paid the corresponding docket fees upon the filing of the complaint,
thus, the RTC had acquired jurisdiction over the case despite the failure to state the
amount of damages claimed in the body of the complaint or in the prayer thereof. The CA
found that the RTC did not commit grave abuse of discretion amounting to lack of
jurisdiction when it denied petitioner's motion to dismiss. It noted that the RTC's
Clarificatory Order dated March 30, 2000, which stated that "if after hearing the Clerk of
Court determines that the filing fee is still insufficient, the same shall be considered as
lien on the judgment that may be entered" was in accordance with the rule laid down in
Sun Insurance Office, Ltd. v. Asuncion.17 The CA proceeded to state that a judicious
examination of the complaint pointed to a determination of the respective rights and
interests of the parties over the property based on the issues presented therein which
could only be determined in a full-blown trial on the merits of the case.
Petitioner filed a Motion for Reconsideration, which the CA denied in a Resolution dated
September 17, 2004. The CA ruled, among others, that the defenses of acquisitive
prescription and laches were likewise unavailing. It found that the subject property is
covered by a Torrens title (OCT No. V-19556); thus, it is axiomatic that adverse,
notorious and continuous possession under a claim of ownership for the period fixed by
law is ineffective against a Torrens title; that unless there are intervening rights of third
persons which may be affected or prejudiced by a decision directing the return of the lot
to petitioner, the equitable defense of laches will not apply as against the registered
owner.
Hence, this petition for review on certiorari where petitioner raises the following
assignment of errors:
THE COURT OF APPEALS ERRED IN NOT FINDING THAT RESPONDENT TRIAL COURT
COMMITTED GRAVE ABUSE OF DISCRETION IN DENYING PETITIONER'S MOTION TO
DISMISS DESPITE RESPONDENTS' NON-PAYMENT OF THE CORRECT DOCKET FEES.
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE ACTION OF PRIVATE
RESPONDENTS IS BARRED BY LACHES AND EXTRAORDINARY ACQUISITIVE
PRESCRIPTION.18
We find the petition without merit.
Preliminarily, although not raised as an issue in this petition, we find it necessary to
discuss the issue of jurisdiction over the subject matter of this case. Respondents'
complaint was filed in 1999, at the time Batas Pambansa Blg. (BP) 129, the Judiciary
Reorganization Act of 1980, was already amended by Republic Act (RA) No. 7691, An Act
Expanding the Jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts, amending for the purpose BP Blg. 129.19 Section 1 of
RA 7691, amending BP Blg. 129, provides that the RTC shall exercise exclusive original
jurisdiction on the following actions:
Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary
Reorganization Act of 1980," is hereby amended to read as follows:
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 (₱20,000.00) or for civil actions in Metro Manila, where such value
exceeds Fifty Thousand Pesos (₱50,000.00), 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
xx
Section 3 of RA No. 7691 expanded the exclusive original jurisdiction of the first level
courts, thus:
Section 3. Section 33 of the same law (BP Blg. 129) 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 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 (₱20,000.00) or, in civil actions in
Metro Manila, where such assessed value does not exceed Fifty Thousand Pesos
(₱50,000.00) 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.
Respondents filed their Complaint with the RTC; hence, we would first determine
whether the RTC has jurisdiction over the subject matter of this case based on the
above-quoted provisions.
The Complaint filed by respondents in the RTC was for ownership, possession and
damages, and alternative causes of action either to declare two documents as patent
nullities and/or for recovery of conjugal share on the subject land with damages or
redemption of the subject land. In their Complaint, respondents claimed that Rosario and
Fernando are the registered owners of the subject land with an assessed value of
₱12,780.00; that the couple left the cultivation and enjoyment of the usufruct of the
subject land to Fernando's mother and her second family to augment their means of
livelihood; that respondent Rosario and Fernando thought that when the latter's mother
died in 1980, the subject land was in the enjoyment of the second family of his mother,
but later learned that the subject land was leased by petitioner Ceferina; that sometime
in August 1999, respondents learned of the existence of the Deed of Transfer of Rights
and Interest including Improvements thereon dated October 3, 1960, where Fernando
had allegedly transferred his rights and interests on the subject land in favor of Eugenio,
petitioner Ceferina's father, as well as an Affidavit of Relinquishment dated November 23,
1960 executed by Eugenio in favor of petitioner Ceferina; that Fernando's signature in
the Deed of Transfer was not his but a forgery; and the Affidavit of Relinquishment was
also void as it was a direct result of a simulated Deed of Transfer.
Respondents prayed that they be declared as absolute and lawful owners of the subject
land and to order petitioner and the other defendants to vacate the premises and restore
respondents to its possession and enjoyment therefore. On their second cause of action,
they prayed that the Deed of Transfer of Rights and Interest Including Improvements
Thereon be declared as a forgery, purely simulated and without any consideration; hence,
inexistent, void ab initio and/or a patent nullity, as well as the Affidavit of Relinquishment
which was the direct result of the Deed of Transfer. Respondents also prayed in the
alternative that if the Deed be finally upheld as valid, to order petitioner to reconvey to
respondent Rosario the undivided one-half portion of the subject land as conjugal owner
thereof and to account and reimburse her of its usufruct; and/or to allow them to redeem
the subject land.
It would appear that the first cause of action involves the issue of recovery of possession
and interest of the parties over the subject land which is a real action. Respondents
alleged that the assessed value of the subject land was ₱12,780.00 based on Tax
Declaration No. 15272. Thus, since it is a real action with an assessed value of less than
₱20,000.00, the case would fall under the jurisdiction of the MTC as provided under the
above-quoted Section 33 (3) of BP 129, as amended.
Notably, however, respondents in the same Complaint filed alternative causes of action
assailing the validity of the Deed of Transfer of Rights and Interest executed by Fernando
in favor of petitioner's father. Respondents also sought for the reconveyance to
respondent Rosario of the undivided one-half portion of the subject land as conjugal
owner thereof in case the Deed of Transfer of Rights and Interest will be upheld as valid;
and/or for redemption of the subject land. Clearly, this is a case of joinder of causes of
action which comprehends more than the issue of possession of, or any interest in the
real property under contention, but includes an action to annul contracts and
reconveyance which are incapable of pecuniary estimation and, thus, properly within the
jurisdiction of the RTC.20
In Singson v. Isabela Sawmill,21 we held 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, 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).22
Thus, respondents correctly filed their Complaint with the RTC.
It is a settled rule in this jurisdiction that when an action is filed in court, the complaint
must be accompanied by the payment of the requisite docket and filing fees. 23 It is not
simply the filing of the complaint or appropriate initiatory pleading, but the payment of
the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter
or nature of the action.24
Section 7(b)(1) of Rule 141 of the Rules of Court provides:
SEC. 7. Clerks of Regional Trial Courts. - (a) For filing an action or a permissive
counter-claim or money claim against an estate not based on judgment, or for filing with
leave of court a third-party, fourth-party, etc. complaint, or a complaint-in-intervention,
and for all clerical services in the same, if the total-sum claimed, exclusive of interest, or
the stated value of the property in litigation, is:
xxxx
(b) For filing:
1. Actions where the value of the subject matter
cannot be estimated ........ ₱400.00
2. x x x
In a real action, the assessed value of the property, or if there is none, the estimated
value thereof shall be alleged by the claimant and shall be the basis in computing the
fees.25
Since we find that the case involved the annulment of contract which is not susceptible of
pecuniary estimation, thus, falling within the jurisdiction of the RTC, the docket fees
should not be based on the assessed value of the subject land as claimed by petitioner in
their memorandum, but should be based on Section 7(b)(1) of Rule 141. A perusal of the
entries in the Legal Fees Form attached to the records would reflect that the amount of
₱400.00 was paid to the Clerk of Court, together with the other fees, as assessed by the
Clerk of Court. Thus, upon respondents' proof of payment of the assessed fees, the RTC
has properly acquired jurisdiction over the complaint. Jurisdiction once acquired is never
lost, it continues until the case is terminated. 26
Notably, petitioner’s claim that the RTC did not acquire jurisdiction in this case is
premised on her contention that respondents violated SC Circular No. 7 issued on March
24, 1998 requiring that all complaints must specify the amount of damages sought not
only in the body of the pleadings but also in the prayer to be accepted and admitted for
filing. Petitioner argues that respondents alleged in paragraph 13 of their Complaint that:
(T)he reasonable rental for the use of the [subject] land is ₱2,000.00 per hectare, every
crop time, once every four months, or ₱6,000.00 a year per hectare; that defendants in
proportion and length of time of their respective occupancy is and/or are jointly and
severally liable to plaintiffs of the produce thereby in the following proportions, viz: (a)
for defendant Ceferina de Ungria for a period of time claimed by her as such; (b) for
defendants Dolores Cagautan, a certain alias "Dory," and PO1 Jonas Montales, of an
undetermined area, the latter having entered the area sometime in 1998 and defendant
alias "Dory," only just few months ago; that defendant Ignacio Olarte and Zacasio
Puutan of occupying about one-half hectare each.27
and in their prayer asked:
x x x Ordering the defendants, jointly and severally, in proportion to the length and area
of their respective occupancy, to pay reasonable rentals to the plaintiffs in the proportion
and amount assessed in paragraph 13 of the First Cause of Action.
xxxx
(a) Ordering the defendants, jointly and severally, to pay plaintiffs actual and
compensatory damages such as are proved during the hearing of this case;
(b) Ordering the defendants, jointly and severally, to pay plaintiffs attorneys' fees and
moral damages, all to be proved during the hearing of this case.28
Thus, the RTC should have dismissed the case, since respondents did not specify the
amount of damages in their prayer.
We are not persuaded.
SC Circular No. 7 was brought about by our ruling in Manchester Development
Corporation v. Court of Appeals,29where we held that a pleading which does not specify
in the prayer the amount of damages being asked for shall not be accepted or admitted,
or shall otherwise be expunged from the record; and that the Court acquires jurisdiction
over any case only upon the payment of the prescribed docket fee.
However, in Sun Insurance Office, Ltd. v. Asuncion, 30 we laid down the following
guidelines in the payment of docket fees, to wit:
1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the
payment of the prescribed docket fee, that vests a trial court with jurisdiction over the
subject matter or nature of the action. Where the filing of the initiatory pleading is not
accompanied by payment of the docket fee, the court may allow payment of the fee
within a reasonable time but in no case beyond the applicable prescriptive or
reglementary period.
2. The same rule applies to permissive counterclaims, third-party claims and similar
pleadings, which shall not be considered filed until and unless the filing fee prescribed
therefor is paid. The court may also allow payment of said fee within a reasonable time
but also in no case beyond its applicable prescriptive or reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate
pleading and payment of the prescribed filing fee but, subsequently, the judgment
awards a claim not specified in the pleading, or if specified the same has been left for
determination by the court, the additional filing fee therefor shall constitute a lien on the
judgment. It shall be the responsibility of the Clerk of Court or his duly-authorized deputy
to enforce said lien and assess and collect the additional fee.
Subsequently, in Heirs of Bertuldo Hinog v. Melicor,31 we said:
Furthermore, the fact that private respondents prayed for payment of damages "in
amounts justified by the evidence" does not call for the dismissal of the complaint for
violation of SC Circular No. 7, dated March 24, 1988 which required that all complaints
must specify the amount of damages sought not only in the body of the pleadings but
also in the prayer in order to be accepted and admitted for filing. Sun Insurance
effectively modified SC Circular No. 7 by providing that filing fees for damages and
awards that cannot be estimated constitute liens on the awards finally granted by the
trial court.
x x x judgment awards which were left for determination by the court or as may be
proven during trial would still be subject to additional filing fees which shall constitute a
lien on the judgment. It would then be the responsibility of the Clerk of Court of the trial
court or his duly-authorized deputy to enforce said lien and assess and collect the
additional fees.32
A reading of the allegations in the complaint would show that the amount of the rental
due can only be determined after a final judgment, since there is a need to show
supporting evidence when the petitioner and the other defendants started to possess the
subject land. Thus, we find no reversible error committed by the CA when it ruled that
there was no grave abuse of discretion committed by the RTC in issuing its Order dated
March 30, 2000, where the RTC stated that "since there was no hearing yet, respondents
are not in a position to determine how much is to be charged and that after hearing, the
Clerk of Court determines that the filing fee is still insufficient, the same shall be
considered as lien on the judgment that may be entered."
Petitioner claims that the action is barred by extraordinary acquisitive prescription and
laches. Petitioner contends that she took possession of the land in the concept of an
owner, open, exclusive, notorious and continuous since 1952 through her
predecessor-in-interest, Eugenio, and by herself up to the present; that the late
Fernando and private respondents had never taken possession of the land at any single
moment; and that, granting without admitting that the transfer of rights between
Fernando and Eugenio was null and void for any reason whatsoever, petitioner's
possession of the land had already ripened into ownership after the lapse of 30 years
from August 1952 by virtue of the extraordinary acquisitive prescription.
We are not persuaded.
It is a well-entrenched rule in this jurisdiction that no title to registered land in derogation
of the rights of the registered owner shall be acquired by prescription or adverse
possession.33 Prescription is unavailing not only against the registered owner but also
against his hereditary successors.34 In this case, the parcel of land subject of this case is
a titled property, i.e., titled in the name of the late Fernando Castor, married to Rosario
Dideles.
Petitioner claims that respondent had impliedly admitted the fact of sale by Fernando to
Eugenio in August 1952, but only according to respondents, the sale was null and void
because it violated the provisions of the Public Land Act. Petitioner argues that the
application of Fernando, dated January 17, 1952, was not the homestead application
referred to in Sections 118 and 124 of the Public Land Act; and that Fernando's
application was only as settler, or for the allocation of the subject land to him vice the
original settler Cadiente.
Such argument does not persuade.
The trial in this case has not yet started as in fact no answer has yet been filed. We find
that these issues are factual which must be resolved at the trial of this case on the merits
wherein both parties will be given ample opportunity to prove their respective claims and
defenses.
Anent petitioner's defense of laches, the same is evidentiary in nature and cannot be
established by mere allegations in the pleadings. Without solid evidentiary basis, laches
cannot be a valid ground to dismiss respondents' complaint.35 Notably, the allegations of
respondents in their petition filed before the RTC which alleged among others:
7. That sometime between the years 1965 to 1970, defendant Ceferina de Ungria,
accompanied by Miss Angela Jagna-an, appeared in the residence of plaintiff Rosario
Dideles Vda. de Castor in Bo.1, Banga, South Cotabato, and requested her to sign a
folded document with her name only appearing thereon, telling her that it has something
to do with the land above-described, of which she refused telling her that she better
return it to the person who requested her to do so (referring to her mother-in-law), more
so that her husband was out at that time;
8. That when the matter was brought home to Fernando Castor, the latter just
commented that [his] mother desires the land above-described to be sold to defendant
Ceferina de Ungria which however he was opposed to do so even as they occasionally
come into heated arguments everytime this insistence on the same subject propped up;
9. That even after the death of the mother of the late Fernando Castor in Bo. Bula, City of
General Santos, sometime in 1980, the latter and his surviving wife thought all the while
that the land above-described was in the enjoyment of his late mother's family with his
2nd husband; that it was only after sometime when plaintiff Rosario Dideles Vda. de
Castor heard that the land above-described had even been leased by defendant Ceferina
de Ungria with the Stanfilco and Checkered farm;
10. That sometime in 1997, defendant Ceferina de Ungria sent overtures to plaintiffs
through Ester Orejana, who is the half sister-in-law of plaintiff Rosario Dideles Vda. de
Castor that she desires to settle with them relating to the land above-described; that the
overtures developed into defendant Ceferina de Ungria meeting for the purpose plaintiff
Ferolyn Castor Facurib where the negotiation continued with Lolita Javier as
attorney-in-fact after defendant Ceferina de Ungria left to reside in Manila and which
resulted later to the attorney-in-fact offering the plaintiffs ₱100,000.00 to quitclaim on
their rights over the said land, which offer, however, was refused by plaintiffs as so
[insignificant] as compared to the actual value of the same land; that in that negotiation,
defendant Ceferina de Ungria was challenged to show any pertinent document to
support her claim on the land in question and where she meekly answered by saying at
the time that she does not have any of such document;
x x x x36
would not conclusively establish laches.1avvphil Thus, it is necessary for petitioners to
proceed to trial and present controverting evidence to prove the elements of laches.
WHEREFORE, the petition for review is DENIED.
SO ORDERED
G.R. No. 164560 July 22, 2009
ANA DE GUIA SAN PEDRO and ALEJO DOPEÑO, Petitioners,
vs.
HON. FATIMA G. ASDALA, in her capacity as the Presiding Judge of the
Regional Trial Court of Quezon City, Branch 87; HON. MANUEL TARO, in his
capacity as the Presiding Judge of the Metropolitan Trial Court of Quezon City,
Branch 42; and the HEIRS OF SPOUSES APOLONIO V. DIONISIO and
VALERIANA DIONISIO (namely, ALLAN GEORGE R. DIONISIO and ELEANOR
R. DIONISIO, herein represented by ALLAN GEORGE R.
DIONISIO), Respondents.
DECISION
DEL CASTILLO, J.:
This resolves the petition for certiorari under Rule 65 of the Rules of Court, praying that
the Resolutions1 of the Court of Appeals (CA) dated September 15, 2003 and June 1,
2004, respectively, in CA-G.R. SP No. 78978, be reversed and set aside.
The antecedent facts are as follows.
Sometime in July 2001, private respondents, heirs of spouses Apolonio and Valeriana
Dionisio, filed with the Metropolitan Trial Court (MeTC) of Quezon City, Branch 42, a
Complaint2 against herein petitioners and Wood Crest Residents Association, Inc.,
for Accion Reivindicatoria, Quieting of Title and Damages, with Prayer for Preliminary
Mandatory Injunction. Private respondents alleged that subject property located in
Batasan Hills, Quezon City, with an assessed value of ₱32,100.00, was titled in the name
of spouses Apolonio and Valeriana Dionisio; but petitioners, with malice and evident bad
faith, claimed that they were the owners of a parcel of land that encompasses and covers
subject property. Private respondents had allegedly been prevented from entering,
possessing and using subject property. It was further alleged in the Complaint that
petitioners' Transfer Certificate of Title over their alleged property was spurious. Private
respondents then prayed that they be declared the sole and absolute owners of the
subject property; that petitioners be ordered to surrender possession of subject property
to them; that petitioners and Wood Crest and/or its members be ordered to pay actual
and moral damages, and attorney's fees.
Petitioners, for their part, filed a Motion to Dismiss3 said complaint on the ground that
the MeTC had no jurisdiction over the subject matter of the action, as the subject of
litigation was incapable of pecuniary estimation.
The MeTC then issued an Order4 dated July 4, 2002 denying the motion to dismiss, ruling
that, under Batas Pambansa (B.P.) Blg. 129, as amended, the MeTC had exclusive
original jurisdiction over actions involving title to or possession of real property of small
value.
Petitioners' Motion for Reconsideration of said Order dated July 4, 2002 was denied.
Petitioners assailed the aforementioned Order by filing a petition for certiorari with the
Regional Trial Court (RTC) of Quezon City, Branch 87. However, in its Decision5 dated
March 10, 2003, the RTC dismissed the petition, finding no grave abuse of discretion on
the part of the MeTC Presiding Judge. The RTC sustained the MeTC ruling, stating that,
in accordance with Section 33(3) of Republic Act (R.A.) No. 7691, amending B.P. Blg. 129,
the MeTC had jurisdiction over the complaint for Accion Reivindicatoria, as it involves
recovery of ownership and possession of real property located in Quezon City, with an
assessed value not exceeding ₱50,000.00. A Motion for Reconsideration 6of the Decision
was filed by petitioners, but was denied in an Order7 dated July 3, 2003.
Petitioners then filed with the Court of Appeals another petition for certiorari, insisting
that both the MeTC and RTC acted with grave abuse of discretion amounting to lack or
excess of jurisdiction by not ordering the dismissal of the complaint for Accion
Reivindicatoria, for lack of jurisdiction over the same. In the assailed CA Resolution dated
September 15, 2003, the CA dismissed the petition outright, holding that certiorari was
not available to petitioners as they should have availed themselves of the remedy of
appeal. Petitioners' motion for reconsideration of the resolution of dismissal was denied
per Resolution8 dated June 1, 2004.
Thus, petitioners filed the instant petition and, in support thereof, they allege that:
THE HONORABLE COURT OF APPEALS ACTED WITH GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OR IN (SIC) EXCESS OF
JURISDICTION IN DENYING THE PETITION FOR CERTIORARI AND
FOR FAILURE TO RESOLVE THE ISSUE RAISED IN THE CERTIORARI
REGARDING THE JURISDICTION OF THE METROPOLITAN TRIAL
COURT TO TAKE COGNIZANCE OF A CASE OF ACCION
REINVINDICATORIA.
THE HONORABLE PUBLIC RESPONDENT FATIMA GONZALES-ASDALA,
AS PRESIDING JUDGE OF RTC BRANCH 87, QUEZON CITY, ACTED
WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN
EXCESS OF (SIC) JURISDICTION IN DISMISSING THE PETITION FOR
CERTIORARI AND IN RESOLVING THAT A CASE OF ACCION
REINVINDICATORIA IS WITHIN THE JURISDICTION OF THE
METROPOLITAN TRIAL COURT.
THE HONORABLE PUBLIC RESPONDENT MANUEL TARO AS
PRESIDING JUDGE MeTC, BRANCH 42, QUEZON CITY, ACTED WITH
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN (SIC)
EXCESS OF JURISDICTION IN SO TAKING COGNIZANCE OF THE
COMPLAINT FOR ACCION REINVINDICATORIA IN CIVIL CASE NO.
27434 ENTITLED, "HEIRS OF SPS. APOLONIO V. DIONISIO AND
VALERIANA DIONISIO, ETC. VS. ANA DE GUIA SAN PEDRO, ET. AL."9
The present Petition for Certiorari is doomed and should not have been entertained from
the very beginning.
The settled rule is that appeals from judgments or final orders or resolutions of the CA
should be by a verified petition for review on certiorari, as provided for under Rule 45 of
the Revised Rules of Civil Procedure. Thus, in Pasiona, Jr. v. Court of Appeals,10 the
Court expounded as follows:
The aggrieved party is proscribed from assailing a decision or final order of the CA via
Rule 65, because such recourse is proper only if the party has no plain, speedy and
adequate remedy in the course of law. In this case, petitioner had an adequate remedy,
namely, a petition for review on certiorari under Rule 45 of the Rules of Court. A petition
for review on certiorari, not a special civil action for certiorari was, therefore, the correct
remedy.
xxxx
Settled is the rule that where appeal is available to the aggrieved party, the special civil
action for certiorari will not be entertained – remedies of appeal and certiorari are
mutually exclusive, not alternative or successive. Hence, certiorari is not and cannot be a
substitute for a lost appeal, especially if one's own negligence or error in one's choice of
remedy occasioned such loss or lapse. One of the requisites of certiorari is that there be
no available appeal or any plain, speedy and adequate remedy. Where an appeal was
available, as in this case, certiorari will not prosper, even if the ground
therefor is grave abuse of discretion. Petitioner's resort to this Court by Petition for
Certiorari was a fatal procedural error, and the instant petition must, therefore, fail.11
For the very same reason given above, the CA, therefore, acted properly when it
dismissed the petition for certiorari outright, on the ground that petitioners should have
resorted to the remedy of appeal instead of certiorari. Verily, the present Petition
for Certiorari should not have been given due course at all.
Moreover, since the period for petitioners to file a petition for review on certiorari had
lapsed by the time the instant petition was filed, the assailed CA Resolutions have
attained finality.1avvphi1
Nevertheless, just to put the matter to rest, the Court reiterates the ruling in Heirs of
Valeriano S. Concha, Sr. v. Spouses Lumocso,12 to wit:
In a number of cases, we have held that actions for reconveyance of or for cancellation
of title to or to quiet title 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."
xxxx
x x x 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 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 (₱20,000.00) or, in civil actions in Metro Manila, where
such assessed value does not exceed Fifty thousand pesos (₱50,000.00) 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."13
Clearly, the RTC and the CA ruled correctly that the MeTC had jurisdiction over private
respondents' complaint for Accion Reivindicatoria.
IN VIEW OF THE FOREGOING, the petition is DISMISSED for utter lack of merit.
The Resolutions of the Court of Appeals in CA-G.R. SP No. 78978, dated September 15,
2003 and June 1, 2004, are AFFIRMED.
SO ORDERED.
G.R. No. 181303 September 17, 2009
CARMEN DANAO MALANA, MARIA DANAO ACORDA, EVELYN DANAO,
FERMINA DANAO, LETICIA DANAO and LEONORA DANAO, the last two are
represented herein by their Attorney-in-Fact, MARIA DANAO
ACORDA, Petitioners,
vs.
BENIGNO TAPPA, JERRY REYNA, SATURNINO CAMBRI and SPOUSES
FRANCISCO AND MARIA LIGUTAN,Respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Certiorari under Rule 65 of the Rules of Court, assailing the
Orders1 dated 4 May 2007, 30 May 2007, and 31 October 2007, rendered by Branch 3 of
the Regional Trial Court (RTC) of Tuguegarao City, which dismissed, for lack of
jurisdiction, the Complaint of petitioners Carmen Danao Malana, Leticia Danao, Maria
Danao Accorda, Evelyn Danao, Fermina Danao, and Leonora Danao, against respondents
Benigno Tappa, Jerry Reyna, Saturnino Cambri, Francisco Ligutan and Maria Ligutan, in
Civil Case No. 6868.
Petitioners filed before the RTC their Complaint for Reivindicacion, Quieting of Title, and
Damages2 against respondents on 27 March 2007, docketed as Civil Case No. 6868.
Petitioners alleged in their Complaint that they are the owners of a parcel of land covered
by Transfer Certificate of Title (TCT) No. T-1279373 situated in Tuguegarao City,
Cagayan (subject property). Petitioners inherited the subject property from Anastacio
Danao (Anastacio), who died intestate.4 During the lifetime of Anastacio, he had allowed
Consuelo Pauig (Consuelo), who was married to Joaquin Boncad, to build on and occupy
the southern portion of the subject property. Anastacio and Consuelo agreed that the
latter would vacate the said land at any time that Anastacio and his heirs might need it.5
Petitioners claimed that respondents, Consuelo’s family members,6 continued to occupy
the subject property even after her death, already building their residences thereon
using permanent materials. Petitioners also learned that respondents were claiming
ownership over the subject property. Averring that they already needed it, petitioners
demanded that respondents vacate the same. Respondents, however, refused to heed
petitioners’ demand.7
Petitioners referred their land dispute with respondents to the Lupong Tagapamayapa of
Barangay Annafunan West for conciliation. During the conciliation proceedings,
respondents asserted that they owned the subject property and presented documents
ostensibly supporting their claim of ownership.
According to petitioners, respondents’ documents were highly dubious, falsified, and
incapable of proving the latter’s claim of ownership over the subject property;
nevertheless, they created a cloud upon petitioners’ title to the property. Thus,
petitioners were compelled to file before the RTC a Complaint to remove such cloud from
their title.8Petitioners additionally sought in their Complaint an award against
respondents for actual damages, in the amount of ₱50,000.00, resulting from the latter’s
baseless claim over the subject property that did not actually belong to them, in violation
of Article 19 of the Civil Code on Human Relations.9 Petitioners likewise prayed for an
award against respondents for exemplary damages, in the amount of ₱50,000.00, since
the latter had acted in bad faith and resorted to unlawful means to establish their claim
over the subject property. Finally, petitioners asked to recover from respondents
₱50,000.00 as attorney’s fees, because the latter’s refusal to vacate the property
constrained petitioners to engage the services of a lawyer.10
Before respondents could file their answer, the RTC issued an Order dated 4 May 2007
dismissing petitioners’ Complaint on the ground of lack of jurisdiction. The RTC referred
to Republic Act No. 7691,11 amending Batas Pambansa Blg. 129, otherwise known as the
Judiciary Reorganization Act of 1980, which vests the RTC with jurisdiction over real
actions, where the assessed value of the property involved exceeds ₱20,000.00. It found
that the subject property had a value of less than ₱20,000.00; hence, petitioners’ action
to recover the same was outside the jurisdiction of the RTC. The RTC decreed in its 4
May 2007 Order that:
The Court has no jurisdiction over the action, it being a real action involving a real
property with assessed value less than ₱20,000.00 and hereby dismisses the same
without prejudice.12
Petitioners filed a Motion for Reconsideration of the aforementioned RTC Order
dismissing their Complaint. They argued that their principal cause of action was for
quieting of title; the accion reivindicacion was included merely to enable them to seek
complete relief from respondents. Petitioner’s Complaint should not have been dismissed,
since Section 1, Rule 63 of the Rules of Court13 states that an action to quiet title falls
under the jurisdiction of the RTC.14
In an Order dated 30 May 2007, the RTC denied petitioners’ Motion for Reconsideration.
It reasoned that an action to quiet title is a real action. Pursuant to Republic Act No. 7691,
it is the Municipal Trial Court (MTC) that exercises exclusive jurisdiction over real actions
where the assessed value of real property does not exceed ₱20,000.00. Since the
assessed value of subject property per Tax Declaration No, 02-48386 was ₱410.00, the
real action involving the same was outside the jurisdiction of the RTC.15
Petitioners filed another pleading, simply designated as Motion, in which they prayed
that the RTC Orders dated 4 May 2007 and 30 May 2007, dismissing their Complaint, be
set aside. They reiterated their earlier argument that Section 1, Rule 63 of the Rules of
Court states that an action to quiet title falls under the exclusive jurisdiction of the RTC.
They also contended that there was no obstacle to their joining the two causes of action,
i.e., quieting of title and reivindicacion, in a single Complaint, citing Rumarate v.
Hernandez.16 And even if the two causes of action could not be joined, petitioners
maintained that the misjoinder of said causes of action was not a ground for the
dismissal of their Complaint.17
The RTC issued an Order dated 31 October 2007 denying petitioners’ Motion. It clarified
that their Complaint was dismissed, not on the ground of misjoinder of causes of action,
but for lack of jurisdiction. The RTC dissected Section 1, Rule 63 of the Rules of Court,
which provides:
Section 1. Who may file petition. Any person interested under a deed, will, contract or
other written instrument, or whose rights are affected by a statute, executive order or
regulation, ordinance, or any other governmental regulation may, before breach or
violation thereof, bring an action in the appropriate Regional Trial Court to determine any
question of construction or validity arising, and for a declaration of his rights or duties,
thereunder.
An action for the reformation of an instrument, to quiet title to real property or remove
clouds therefrom, or to consolidate ownership under Article 1607 of the Civil Code, may
be brought under this Rule.
The RTC differentiated between the first and the second paragraphs of Section 1, Rule
63 of the Rules of Court. The first paragraph refers to an action for declaratory relief,
which should be brought before the RTC. The second paragraph, however, refers to a
different set of remedies, which includes an action to quiet title to real property. The
second paragraph must be read in relation to Republic Act No. 7691, which vests the
MTC with jurisdiction over real actions, where the assessed value of the real property
involved does not exceed ₱50,000.00 in Metro Manila and ₱20,000.00 in all other
places.18 The dispositive part of the 31 October 2007 Order of the RTC reads:
This Court maintains that an action to quiet title is a real action. [Herein petitioners] do
not dispute the assessed value of the property at ₱410.00 under Tax Declaration No.
02-48386. Hence, it has no jurisdiction over the action.
In view of the foregoing considerations, the Motion is hereby denied.19
Hence, the present Petition, where petitioners raise the sole issue of:
I
WHETHER OR NOT THE RESPONDENT JUDGE COMMITTED GRAVE
ABUSE OF DISCRETION IN DISMISSING THE COMPLAINT OF THE
PETITIONERS MOTU PROPRIO.20
Petitioners’ statement of the issue is misleading. It would seem that they are only
challenging the fact that their Complaint was dismissed by the RTC motu proprio. Based
on the facts and arguments set forth in the instant Petition, however, the Court
determines that the fundamental issue for its resolution is whether the RTC committed
grave abuse of discretion in dismissing petitioners’ Complaint for lack of jurisdiction.
The Court rules in the negative.
An action for declaratory relief should be filed by a person interested under a deed, a will,
a contract or other written instrument, and whose rights are affected by a statute, an
executive order, a regulation or an ordinance. The relief sought under this remedy
includes the interpretation and determination of the validity of the written instrument
and the judicial declaration of the parties’ rights or duties thereunder.21
Petitions for declaratory relief are governed by Rule 63 of the Rules of Court. The RTC
correctly made a distinction between the first and the second paragraphs of Section 1,
Rule 63 of the Rules of Court.
The first paragraph of Section 1, Rule 63 of the Rules of Court, describes the general
circumstances in which a person may file a petition for declaratory relief, to wit:
Any person interested under a deed, will, contract or other written instrument, or whose
rights are affected by a statute, executive order or regulation, ordinance, or any other
governmental regulation may, before breach or violation thereof, bring an action in the
appropriate Regional Trial Court to determine any question of construction or validity
arising, and for a declaration of his rights or duties, thereunder. (Emphasis ours.)
As the afore-quoted provision states, a petition for declaratory relief under the first
paragraph of Section 1, Rule 63 may be brought before the appropriate RTC.
Section 1, Rule 63 of the Rules of Court further provides in its second paragraph that:
An action for the reformation of an instrument, to quiet title to real property or remove
clouds therefrom, or to consolidate ownership under Article 1607 of the Civil Code, may
be brought under this Rule. (Emphasis ours.)
The second paragraph of Section 1, Rule 63 of the Rules of Court specifically refers to (1)
an action for the reformation of an instrument, recognized under Articles 1359 to 1369 of
the Civil Code; (2) an action to quiet title, authorized by Articles 476 to 481 of the Civil
Code; and (3) an action to consolidate ownership required by Article 1607 of the Civil
Code in a sale with a right to repurchase. These three remedies are considered similar to
declaratory relief because they also result in the adjudication of the legal rights of the
litigants, often without the need of execution to carry the judgment into effect.22
To determine which court has jurisdiction over the actions identified in the second
paragraph of Section 1, Rule 63 of the Rules of Court, said provision must be read
together with those of the Judiciary Reorganization Act of 1980, as amended.
It is important to note that Section 1, Rule 63 of the Rules of Court does not categorically
require that an action to quiet title be filed before the RTC. It repeatedly uses the word
"may" – that an action for quieting of title "may be brought under [the] Rule" on petitions
for declaratory relief, and a person desiring to file a petition for declaratory relief "may x
x x bring an action in the appropriate Regional Trial Court." The use of the word "may" in
a statute denotes that the provision is merely permissive and indicates a mere possibility,
an opportunity or an option.23
In contrast, the mandatory provision of the Judiciary Reorganization Act of 1980, as
amended, uses the word "shall" and explicitly requires the MTC to exercise exclusive
original jurisdiction over all civil actions which involve title to or possession of real
property where the assessed value does not exceed ₱20,000.00, thus:
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, possession of,
real property, or any interest therein where the assessed value of the property or interest
therein does not exceed Twenty thousand pesos (₱20,000.00) or, in civil actions in Metro
Manila, where such assessed value does not exceeds Fifty thousand pesos (₱50,000.00)
exclusive of interest, damages of whatever kind, attorney’s fees, litigation expenses and
costs: x x x (Emphasis ours.)
As found by the RTC, the assessed value of the subject property as stated in Tax
Declaration No. 02-48386 is only ₱410.00; therefore, petitioners’ Complaint involving
title to and possession of the said property is within the exclusive original jurisdiction of
the MTC, not the RTC.
Furthermore, an action for declaratory relief presupposes that there has been no actual
breach of the instruments involved or of rights arising thereunder.24 Since the purpose of
an action for declaratory relief is to secure an authoritative statement of the rights and
obligations of the parties under a statute, deed, or contract for their guidance in the
enforcement thereof, or compliance therewith, and not to settle issues arising from an
alleged breach thereof, it may be entertained only before the breach or violation of the
statute, deed, or contract to which it refers. A petition for declaratory relief gives a
practical remedy for ending controversies that have not reached the state where another
relief is immediately available; and supplies the need for a form of action that will set
controversies at rest before they lead to a repudiation of obligations, an invasion of rights,
and a commission of wrongs.25
Where the law or contract has already been contravened prior to the filing of an action
for declaratory relief, the courts can no longer assume jurisdiction over the action. In
other words, a court has no more jurisdiction over an action for declaratory relief if its
subject has already been infringed or transgressed before the institution of the action.26
In the present case, petitioners’ Complaint for quieting of title was filed after petitioners
already demanded and respondents refused to vacate the subject property. In fact, said
Complaint was filed only subsequent to the latter’s express claim of ownership over the
subject property before the Lupong Tagapamayapa, in direct challenge to petitioners’
title.
Since petitioners averred in the Complaint that they had already been deprived of the
possession of their property, the proper remedy for them is the filing of an accion
publiciana or an accion reivindicatoria, not a case for declaratory relief. An accion
publiciana is a suit for the recovery of possession, filed one year after the occurrence of
the cause of action or from the unlawful withholding of possession of the realty. An
accion reivindicatoria is a suit that has for its object one’s recovery of possession over the
real property as owner.271avvphi1
Petitioners’ Complaint contained sufficient allegations for an accion reivindicatoria.
Jurisdiction over such an action would depend on the value of the property involved.
Given that the subject property herein is valued only at ₱410.00, then the MTC, not the
RTC, has jurisdiction over an action to recover the same. The RTC, therefore, did not
commit grave abuse of discretion in dismissing, without prejudice, petitioners’ Complaint
in Civil Case No. 6868 for lack of jurisdiction.
As for the RTC dismissing petitioners’ Complaint motu proprio, the following
pronouncements of the Court in Laresma v. Abellana28 proves instructive:
It is axiomatic that the nature of an action and the jurisdiction of a tribunal are
determined by the material allegations of the complaint and the law at the time the
action was commenced. Jurisdiction of the tribunal over the subject matter or nature of
an action is conferred only by law and not by the consent or waiver upon a court which,
otherwise, would have no jurisdiction over the subject matter or nature of an action. Lack
of jurisdiction of the court over an action or the subject matter of an action cannot be
cured by the silence, acquiescence, or even by express consent of the parties. If the
court has no jurisdiction over the nature of an action, it may dismiss the same ex mero
motu or motu proprio. x x x. (Emphasis supplied.)
Since the RTC, in dismissing petitioners’ Complaint, acted in complete accord with law
and jurisprudence, it cannot be said to have done so with grave abuse of discretion
amounting to lack or excess of jurisdiction. An act of a court or tribunal may only be
considered to have been committed in grave abuse of discretion when the same was
performed in a capricious or whimsical exercise of judgment, which is equivalent to lack
of jurisdiction. The abuse of discretion 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 personal hostility.29 No such circumstances
exist herein as to justify the issuance of a writ of certiorari.
IN VIEW OF THE FOREGOING, the instant Petition is DISMISSED. The Orders dated 4
May 2007, 30 May 2007 and 31 October 2007 of the Regional Trial Court of Tuguegarao
City, Branch 3, dismissing the Complaint in Civil Case No. 6868, without prejudice, are
AFFIRMED. The Regional Trial Court is ordered to REMAND the records of this case to the
Municipal Trial Court or the court of proper jurisdiction for proper disposition. Costs
against the petitioners.
SO ORDERED.
G.R. No. 181359 August 5, 2013
SPOUSES CLEMENCIO C. SABITSANA, JR. and MA. ROSARIO M.
SABITSANA, Petitioners,
vs.
JUANITO F. MUERTEGUI, represented by his Attorney-in-Fact DOMINGO A.
MUERTEGUI, JR., Respondent.
DECISION
DEL CASTILLO, J.:
A lawyer may not, for his own personal interest and benefit, gamble on his client's word,
believing it at one time and disbelieving it the next. He owes his client his undivided
loyalty.
Assailed in this Petition for Review on Certiorari1 are the January 25, 2007 Decision2 of
the Court of Appeals (CA) which denied the appeal in CA-G.R. CV No. 79250, and its
January 11, 2008 Resolution3 denying petitioner’s Motion for Reconsideration.4
Factual Antecedents
On September 2, 1981, Alberto Garcia (Garcia) executed an unnotarized Deed of Sale5 in
favor of respondent Juanito Muertegui6 (Juanito) over a 7,500-square meter parcel of
unregistered land (the lot) located in Dalutan Island, Talahid, Almeira, Biliran, Leyte del
Norte covered by Tax Declaration (TD) No. 1996 issued in 1985 in Garcia’s name.7
Juanito’s father Domingo Muertegui, Sr. (Domingo Sr.) and brother Domingo Jr. took
actual possession of the lot and planted thereon coconut and ipil-ipil trees. They also
paid the real property taxes on the lot for the years 1980 up to 1998.
On October 17, 1991, Garcia sold the lot to the Muertegui family lawyer, petitioner Atty.
Clemencio C. Sabitsana, Jr. (Atty. Sabitsana), through a notarized deed of absolute
sale.8 The sale was registered with the Register of Deeds on February 6, 1992.9 TD No.
1996 was cancelled and a new one, TD No. 5327,10 was issued in Atty. Sabitsana’s name.
Although Domingo Jr. and Sr. paid the real estate taxes, Atty. Sabitsana also paid real
property taxes in 1992, 1993, and 1999. In 1996, he introduced concrete improvements
on the property, which shortly thereafter were destroyed by a typhoon.
When Domingo Sr. passed away, his heirs applied for registration and coverage of the lot
under the Public Land Act or Commonwealth Act No. 141. Atty. Sabitsana, in a
letter11 dated August 24, 1998 addressed to the Department of Environment and Natural
Resources’ CENRO/PENRO office in Naval, Biliran, opposed the application, claiming that
he was the true owner of the lot. He asked that the application for registration be held in
abeyance until the issue of conflicting ownership has been resolved.
On April 11, 2000, Juanito, through his attorney-in-fact Domingo Jr., filed Civil Case No.
B-109712 for quieting of title and preliminary injunction, against herein petitioners Atty.
Sabitsana and his wife, Rosario, claiming that they bought the lot in bad faith and are
exercising acts of possession and ownership over the same, which acts thus constitute a
cloud over his title. The Complaint13 prayed, among others, that the Sabitsana Deed of
Sale, the August 24, 1998 letter, and TD No. 5327 be declared null and void and of no
effect; that petitioners be ordered to respect and recognize Juanito’s title over the lot;
and that moral and exemplary damages, attorney’s fees, and litigation expenses be
awarded to him.
In their Answer with Counterclaim,14 petitioners asserted mainly that the sale to Juanito
is null and void absent the marital consent of Garcia’s wife, Soledad Corto (Soledad); that
they acquired the property in good faith and for value; and that the Complaint is barred
by prescription and laches. They likewise insisted that the Regional Trial Court (RTC) of
Naval, Biliran did not have jurisdiction over the case, which involved title to or interest in
a parcel of land the assessed value of which is merely ₱1,230.00.
The evidence and testimonies of the respondent’s witnesses during trial reveal that
petitioner Atty. Sabitsana was the Muertegui family’s lawyer at the time Garcia sold the
lot to Juanito, and that as such, he was consulted by the family before the sale was
executed; that after the sale to Juanito, Domingo Sr. entered into actual, public, adverse
and continuous possession of the lot, and planted the same to coconut and ipil-ipil; and
that after Domingo Sr.’s death, his wife Caseldita, succeeded him in the possession and
exercise of rights over the lot.
On the other hand, Atty. Sabitsana testified that before purchasing the lot, he was told
by a member of the Muertegui family, Carmen Muertegui Davies (Carmen), that the
Muertegui family had bought the lot, but she could not show the document of sale; that
he then conducted an investigation with the offices of the municipal and provincial
assessors; that he failed to find any document, record, or other proof of the sale by
Garcia to Juanito, and instead discovered that the lot was still in the name of Garcia; that
given the foregoing revelations, he concluded that the Muerteguis were merely bluffing,
and that they probably did not want him to buy the property because they were
interested in buying it for themselves considering that it was adjacent to a lot which they
owned; that he then proceeded to purchase the lot from Garcia; that after purchasing
the lot, he wrote Caseldita in October 1991 to inform her of the sale; that he then took
possession of the lot and gathered ipil-ipil for firewood and harvested coconuts and
calamansi from the lot; and that he constructed a rip-rap on the property sometime in
1996 and 1997.
Ruling of the Regional Trial Court
On October 28, 2002, the trial court issued its Decision15 which decrees as follows:
WHEREFORE, in view of the foregoing considerations, this Court finds in favor of the
plaintiff and against the defendants, hereby declaring the Deed of Sale dated 2
September 1981 as valid and preferred while the Deed of Absolute Sale dated 17 October
1991 and Tax Declaration No. 5327 in the name of Atty. Clemencio C. Sabitsana, Jr. are
VOID and of no legal effect.
The Provincial Assessor and the Municipal Assessor of Naval are directed to cancel Tax
Declaration No. 5327 as void and done in bad faith.
Further, Atty. Clemencio C. Sabitsana, Jr. is ordered to pay plaintiff Juanito Muertigui,
represented by his attorney-in-fact Domingo Muertigui, Jr. the amounts of:
a) ₱30,000.00 as attorney’s fees;
b) ₱10,000.00 as litigation expenses; and
c) Costs.
SO ORDERED.16
The trial court held that petitioners are not buyers in good faith. Petitioner Atty.
Sabitsana was the Muertegui family’s lawyer, and was informed beforehand by Carmen
that her family had purchased the lot; thus, he knew of the sale to Juanito. After
conducting an investigation, he found out that the sale was not registered. With this
information in mind, Atty. Sabitsana went on to purchase the same lot and raced to
register the sale ahead of the Muerteguis, expecting that his purchase and prior
registration would prevail over that of his clients, the Muerteguis. Applying Article 1544
of the Civil Code,17 the trial court declared that even though petitioners were first to
register their sale, the same was not done in good faith. And because petitioners’
registration was not in good faith, preference should be given to the sale in favor of
Juanito, as he was the first to take possession of the lot in good faith, and the sale to
petitioners must be declared null and void for it casts a cloud upon the Muertegui title.
Petitioners filed a Motion for Reconsideration18 but the trial court denied19 the same.
Ruling of the Court of Appeals
Petitioners appealed to the CA20 asserting that the sale to Juanito was null and void for
lack of marital consent; that the sale to them is valid; that the lower court erred in
applying Article 1544 of the Civil Code; that the Complaint should have been barred by
prescription, laches and estoppel; that respondent had no cause of action; that
respondent was not entitled to an award of attorney’s fees and litigation expenses; and
that they should be the ones awarded attorney’s fees and litigation expenses.
The CA, through its questioned January 25, 2007 Decision,21 denied the appeal and
affirmed the trial court’s Decision in toto. It held that even though the lot admittedly was
conjugal property, the absence of Soledad’s signature and consent to the deed did not
render the sale to Juanito absolutely null and void, but merely voidable. Since Garcia and
his wife were married prior to the effectivity of the Family Code, Article 173 of the Civil
Code22should apply; and under the said provision, the disposition of conjugal property
without the wife’s consent is not void, but merely voidable. In the absence of a decree
annulling the deed of sale in favor of Juanito, the same remains valid.
The CA added that the fact that the Deed of Sale in favor of Juanito was not notarized
could not affect its validity. As against the notarized deed of sale in favor of petitioners,
the CA held that the sale in favor of Juanito still prevails. Applying Article 1544 of the Civil
Code, the CA said that the determining factor is petitioners’ good faith, or the lack of it. It
held that even though petitioners were first to register the sale in their favor, they did not
do so in good faith, for they already knew beforehand of Garcia’s prior sale to Juanito. By
virtue of Atty. Sabitsana’s professional and confidential relationship with the Muertegui
family, petitioners came to know about the prior sale to the Muerteguis and the latter’s
possession of the lot, and yet they pushed through with the second sale. Far from acting
in good faith, petitioner Atty. Sabitsana used his legal knowledge to take advantage of
his clients by registering his purchase ahead of them.
Finally, the CA declared that Juanito, as the rightful owner of the lot, possessed the
requisite cause of action to institute the suit for quieting of title and obtain judgment in
his favor, and is entitled as well to an award for attorney’s fees and litigation expenses,
which the trial court correctly held to be just and equitable under the circumstances.
The dispositive portion of the CA Decision reads:
WHEREFORE, premises considered, the instant appeal is DENIED and the Decision dated
October 28, 2002 of the Regional Trial Court, 8th Judicial Region, Branch 16, Naval,
Biliran, is hereby AFFIRMED. Costs against defendants-appellants.
SO ORDERED.23
Issues
Petitioners now raise the following issues for resolution:
I. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE REGIONAL TRIAL
COURT DID NOT HAVE JURISDICTION OVER THE CASE IN VIEW OF THE FACT THAT
THE ASSESSED VALUE OF THE SUBJECT LAND WAS ONLY ₱1,230.00 (AND STATED
MARKET VALUE OF ONLY ₱3,450.00).
II. THE COURT OF APPEALS ERRED IN APPLYING ART. 1544 OF THE CIVIL CODE
INSTEAD OF THE PROPERTY REGISTRATION DECREE (P.D. NO. 1529) CONSIDERING
THAT THE SUBJECT LAND WAS UNREGISTERED.
III. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE COMPLAINT WAS
ALREADY BARRED [BY] LACHES AND THE STATUTE OF LIMITATIONS.
IV. THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE REGIONAL
TRIAL COURT ORDERING THE PETITIONERS TO PAY ATTORNEY’S FEES AND
LITIGATION EXPENSES TO THE RESPONDENT.24
Petitioners’ Arguments
Petitioners assert that the RTC of Naval, Biliran did not have jurisdiction over the case.
They argue that since the assessed value of the lot was a mere ₱1,230.00, jurisdiction
over the case lies with the first level courts, pursuant to Republic Act No. 7691,25 which
expanded their exclusive original jurisdiction 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 (₱20,000.00) or,
in civil actions in Metro Manila, where such assessed value does not exceed Fifty
thousand pesos (₱50,000.00) exclusive of interest, damages of whatever kind, attorney’s
fees, litigation expenses and costs."26 Petitioners thus conclude that the Decision in Civil
Case No. B-1097 is null and void for lack of jurisdiction.
Petitioners next insist that the lot, being unregistered land, is beyond the coverage of
Article 1544 of the Civil Code, and instead, the provisions of Presidential Decree (PD) No.
1529 should apply. This being the case, the Deed of Sale in favor of Juanito is valid only
as between him and the seller Garcia, pursuant to Section 113 of PD 1529; 27 it cannot
affect petitioners who are not parties thereto.
On the issue of estoppel, laches and prescription, petitioners insist that from the time
they informed the Muerteguis in writing about their purchase of the lot, or in October
1991, the latter did not notify them of their prior purchase of the lot, nor did respondent
interpose any objection to the sale in their favor. It was only in 1998 that Domingo Jr.
showed to petitioners the unnotarized deed of sale. According to petitioners, this
seven-year period of silence and inaction on the Muerteguis’ part should be taken against
them and construed as neglect on their part to assert their rights for an unreasonable
length of time. As such, their action to quiet title should be deemed barred by laches and
estoppel.
Lastly, petitioners take exception to the award of attorney’s fees and litigation expenses,
claiming that since there was no bad faith on their part, such award may not be
considered just and equitable under the circumstances. Still, an award of attorney’s fees
should remain the exception rather than the rule; and in awarding the same, there must
have been an express finding of facts and law justifying such award, a requirement that
is absent in this case.
Petitioners thus pray for the reversal of the questioned CA Decision and Resolution; the
dismissal of the Complaint in Civil Case No. B-1097; the deletion of the award of
attorney’s fees and litigation expenses in respondent’s favor; and a declaration that they
are the true and rightful owners of the lot.
Respondent’s Arguments
Respondent, on the other hand, counters that a suit for quieting of title is one whose
subject matter is incapable of pecuniary estimation, and thus falls within the jurisdiction
of the RTC. He likewise insists that Article 1544 applies to the case because there is a
clear case of double sale of the same property to different buyers, and the bottom line
thereof lies in petitioners’ lack of good faith in entering into the subsequent sale. On the
issue of laches/estoppel, respondent echoes the CA’s view that he was persistent in the
exercise of his rights over the lot, having previously filed a complaint for recovery of the
lot, which unfortunately was dismissed based on technicality.
On the issue of attorney’s fees and litigation expenses, respondent finds refuge in Article
2208 of the Civil Code,28citing three instances which fortify the award in his favor –
petitioners’ acts compelled him to litigate and incur expenses to protect his interests;
their gross and evident bad faith in refusing to recognize his ownership and possession
over the lot; and the justness and equitableness of his case.
Our Ruling
The Petition must be denied.
The Regional Trial Court has jurisdiction over the suit for quieting of title.
On the question of jurisdiction, it is clear under the Rules that an action for quieting of
title may be instituted in the RTCs, regardless of the assessed value of the real property
in dispute. Under Rule 63 of the Rules of Court,29 an action to quiet title to real property
or remove clouds therefrom may be brought in the appropriate RTC.
It must be remembered that the suit for quieting of title was prompted by petitioners’
August 24, 1998 letter-opposition to respondent’s application for registration. Thus, in
order to prevent30 a cloud from being cast upon his application for a title, respondent
filed Civil Case No. B-1097 to obtain a declaration of his rights. In this sense, the action is
one for declaratory relief, which properly falls within the jurisdiction of the RTC pursuant
to Rule 63 of the Rules.
Article 1544 of the Civil Code does not apply to sales involving unregistered land.
Both the trial court and the CA are, however, wrong in applying Article 1544 of the Civil
Code. Both courts seem to have forgotten that the provision does not apply to sales
involving unregistered land. Suffice it to state that the issue of the buyer’s good or bad
faith is relevant only where the subject of the sale is registered land, and the purchaser is
buying the same from the registered owner whose title to the land is clean. In such case,
the purchaser who relies on the clean title of the registered owner is protected if he is a
purchaser in good faith for value.31
Act No. 3344 applies to sale of unregistered lands.
What applies in this case is Act No. 3344,32 as amended, which provides for the system of
recording of transactions over unregistered real estate. Act No. 3344 expressly declares
that any registration made shall be without prejudice to a third party with a better right.
The question to be resolved therefore is: who between petitioners and respondent has a
better right to the disputed lot?
Respondent has a better right to the lot.
The sale to respondent Juanito was executed on September 2, 1981 via an unnotarized
deed of sale, while the sale to petitioners was made via a notarized document only on
October 17, 1991, or ten years thereafter. Thus, Juanito who was the first buyer has a
better right to the lot, while the subsequent sale to petitioners is null and void, because
when it was made, the seller Garcia was no longer the owner of the lot. Nemo dat quod
non habet.
The fact that the sale to Juanito was not notarized does not alter anything, since the sale
between him and Garcia remains valid nonetheless. Notarization, or the requirement of a
public document under the Civil Code,33 is only for convenience, and not for validity or
enforceability.34 And because it remained valid as between Juanito and Garcia, the latter
no longer had the right to sell the lot to petitioners, for his ownership thereof had ceased.
Nor can petitioners’ registration of their purchase have any effect on Juanito’s rights. The
mere registration of a sale in one’s favor does not give him any right over the land if the
vendor was no longer the owner of the land, having previously sold the same to another
even if the earlier sale was unrecorded.35 Neither could it validate the purchase thereof
by petitioners, which is null and void. Registration does not vest title; it is merely the
evidence of such title. Our land registration laws do not give the holder any better title
than what he actually has.36
Specifically, we held in Radiowealth Finance Co. v. Palileo37 that:
Under Act No. 3344, registration of instruments affecting unregistered lands is ‘without
prejudice to a third party with a better right.’ The aforequoted phrase has been held by
this Court to mean that the mere registration of a sale in one’s favor does not give him
any right over the land if the vendor was not anymore the owner of the land having
previously sold the same to somebody else even if the earlier sale was unrecorded.
Petitioners’ defense of prescription, laches and estoppel are unavailing since their claim
is based on a null and void deed of sale. The fact that the Muerteguis failed to interpose
any objection to the sale in petitioners’ favor does not change anything, nor could it give
rise to a right in their favor; their purchase remains void and ineffective as far as the
Muerteguis are concerned.
The award of attorney’s fees and litigation expenses is proper because of petitioners’ bad
faith.
Petitioners’ actual and prior knowledge of the first sale to Juanito makes them purchasers
in bad faith. It also appears that petitioner Atty. Sabitsana was remiss in his duties as
counsel to the Muertegui family. Instead of advising the Muerteguis to register their
purchase as soon as possible to forestall any legal complications that accompany
unregistered sales of real property, he did exactly the opposite: taking advantage of the
situation and the information he gathered from his inquiries and investigation, he bought
the very same lot and immediately caused the registration thereof ahead of his clients,
thinking that his purchase and prior registration would prevail. The Court cannot tolerate
this mercenary attitude. Instead of protecting his client’s interest, Atty. Sabitsana
practically preyed on him.
Petitioner Atty. Sabitsana took advantage of confidential information disclosed to him by
his client, using the same to defeat him and beat him to the draw, so to speak. He rushed
the sale and registration thereof ahead of his client. He may not be afforded the excuse
that he nonetheless proceeded to buy the lot because he believed or assumed that the
Muerteguis were simply bluffing when Carmen told him that they had already bought the
same; this is too convenient an excuse to be believed. As the Muertegui family lawyer, he
had no right to take a position, using information disclosed to him in confidence by his
client, that would place him in possible conflict with his duty. He may not, for his own
personal interest and benefit, gamble on his client’s word, believing it at one time and
disbelieving it the next. He owed the Muerteguis his undivided loyalty. He had the duty to
protect the client, at all hazards and costs even to himself.38
Petitioner Atty. Sabitsana is enjoined to "look at any representation situation from the
point of view that there are possible conflicts, and further to think in terms of impaired
loyalty, that is, to evaluate if his representation in any way will impair his loyalty to a
client."39
Moreover, as the Muertegui family’s lawyer, Atty. Sabitsana was under obligation to
safeguard his client's property, and not jeopardize it. Such is his duty as an attorney, and
pursuant to his general agency.40
Even granting that Atty. Sabitsana has ceased to act as the Muertegui family's lawyer, he
still owed them his loyalty.1âwphi1The termination of attorney-client relation provides no
justification for a lawyer to represent an interest adverse to or in conflict with that of the
former client on a matter involving confidential information which the lawyer acquired
when he was counsel. The client's confidence once reposed should not be divested by
mere expiration of professional employment.41 This is underscored by the fact that Atty.
Sabitsana obtained information from Carmen which he used to his advantage and to the
detriment of his client.
from the foregoing disquisition, it can be seen that petitioners are guilty of bad faith in
pursuing the sale of the lot despite being apprised of the prior sale in respondent's favor.
Moreover, petitioner Atty. Sabitsana has exhibited a lack of loyalty toward his clients, the
Muerteguis, and by his acts, jeopardized their interests instead of protecting them. Over
and above the trial court's and the CA's findings, this provides further justification for the
award of attorney's fees, litigation expenses and costs in favor of the respondent.
Thus said, judgment must be rendered in favor of respondent to prevent the petitioners'
void sale from casting a cloud upon his valid title.
WHEREFORE, premises considered, the Petition is DENIED. The January 25, 2007
Decision and the January 11, 2008 Resolution of the Court of Appeals in CA-G.R. CV No.
79250 are AFFIRMED. Costs against petitioners.
SO ORDERED.
G.R. No. 195834, November 09, 2016
GUILLERMO SALVADOR, REMEDIOS CASTRO, REPRESENTED BY PAZ "CHIT"
CASTRO, LEONILA GUEVARRA, FELIPE MARIANO, RICARDO DE GUZMAN,
VIRGILIO JIMENEZ, REPRESENTED BY JOSIE JIMENEZ, ASUNCION JUAMIZ,
ROLANDO BATANG, CARMENCITA SAMSON, AUGUSTO TORTOSA,
REPRESENTED BY FERNANDO TORTOSA, SUSANA MORANTE, LUZVIMINDA
BULARAN, LUZ OROZCO, JOSE SAPICO, LEONARDO PALAD, ABEL BAKING,
REPRESENTED BY ABELINA BAKING, GRACIANO ARNALDO, REPRESENTED
BY LUDY ARNALDO, JUDITH HIDALGO, AND IGMIDIO JUSTINIANO, CIRIACO
MIJARES, REPRESENTED BY FREDEZWINDA MIJARES, JENNIFER MORANTE,
TERESITA DIALA, AND ANITA P. SALAR, Petitioners, v. PATRICIA, INC.,
RESPONDENT. THE CITY OF MANILA AND CIRIACO C.
MIJARES, Intervenors-Appellees.
DECISION
BERSAMIN, J.:
Jurisdiction over a real action is determined based on the allegations in the complaint of
the assessed value of the property involved. The silence of the complaint on such value is
ground to dismiss the action for lack of jurisdiction because the trial court is not given the
basis for making the determination.
The Case
For review is the decision promulgated on June 25, 20101 and the resolution
promulgated on February 16, 2011 in CA-G.R. CV No. 86735,2 whereby the Court of
Appeals (CA) dismissed the petitioners' complaint in Civil Case No. 96-81167, thereby
respectively reversing and setting aside the decision rendered on May 30, 2005 by the
Regional Trial Court (RTC), Branch 32, in Manila,3 and denying their motion for
reconsideration.
Antecedents
The CA adopted the summary by the RTC of the relevant factual and procedural
antecedents, as follows:
This is an action for injunction and quieting of title to determine who
owns the property occupied by the plaintiffs and intervenor, Ciriano C.
Mijares.
 Additionally, to prevent the defendant Patricia Inc., from evicting the
plaintiffs from their respective improvements along Juan Luna Street,
plaintiffs applied for a preliminary injunction in their Complaint
pending the quieting of title on the merits.
The complaint was amended to include different branches of the
Metropolitan Trial Courts of Manila. A Complaint-in-Intervention was
filed by the City of Manila as owner of the land occupied by the
plaintiffs. Another Complaint-in-Intervention by Ciriano Mijares was
also filed alleging that he was similarly situated as the other plaintiffs.
A preliminary injunction was granted and served on all the defendants.
Based on the allegations of the parties involved, the main issue to be
resolved is whether the improvements of the plaintiffs stand on land
that belongs to Patricia Inc., or the City of Manila. Who owns the same?
Is it covered by a Certificate of Title?
All parties agreed and admitted in evidence by stipulation as to the
authenticity of the following documents:
(1) Transfer Certificate of Title No. 44247 in the
name of the City of Manila;
(2) Transfer Certificate of Title No. 35727 in the
name of Patricia Inc.;
(3) Approved Plan PSD-38540; and
(4) Approved Subdivision Plan PCS-3290 for Ricardo
Manotok.
The issue as to whether TCT 35727 should be cancelled as prayed for
by the plaintiffs and intervenor, Ciriano C. Mijares is laid to rest by
agreement of the parties that this particular document is genuine and
duly executed. Nonetheless, the cancellation of a Transfer Certificate
of Title should be in a separate action before another forum.
Since the Transfer Certificates of Title of both Patricia Inc. and the City
of Manila are admitted as genuine, the question now is: Where are the
boundaries based on the description in the respective titles?4
To resolve the question about the boundaries of the properties of the City of Manila and
respondent Patricia, Inc., the RTC appointed, with the concurrence of the parties, three
geodetic engineers as commissioners, namely: Engr. Rosario Mercado, Engr. Ernesto
Pamular and Engr. Delfin Bumanlag.5These commissioners ultimately submitted their
reports.
On May 30, 2005, the RTC rendered judgment in favor of the petitioners and against
Patricia, Inc., permanently enjoining the latter from doing any act that would evict the
former from their respective premises, and from collecting any rentals from them. The
RTC deemed it more sound to side with two of the commissioners who had found that
the land belonged to the City of Manila, and disposed:
WHEREFORE, it is hereby ORDERED:
1. Defendant Patricia Inc. and other person/s claiming
under it, are PERMANENTLY ENJOINED to REFRAIN
and DESIST from any act of EVICTION OR EJECTMENT
of the PLAINTIFFS in the premises they
occupy;ChanRoblesVirtualawlibrary
2. Defendant Patricia Inc. STOP COLLECTING any rentals
from the plaintiffs who may seek reimbursement of previous
payments in a separate action subject to the ownership of
the City of Manila and;ChanRoblesVirtualawlibrary
3. Attorney's fees of P10,000.00 to each plaintiff and intervenor,
Ciriano Mijares; P20,000.00 to the City of Manila. (emphasis
ours)
No pronouncement as to costs. SO ORDERED.6
Decision of the CA
On appeal, the CA, in CA-G.R. CV No. 86735, reversed the RTC's judgment,7 and
dismissed the complaint. The CA declared that the petitioners were without the
necessary interest, either legal or equitable title, to maintain a suit for quieting of title;
castigated the RTC for acting like a mere rubber stamp of the majority of the
commissioners; opined that the RTC should have conducted hearings on the reports of
the commissioners; ruled as highly improper the adjudication of the boundary dispute in
an action for quieting of title; and decreed:
WHEREFORE, premises considered, We hereby REVERSE and SET
ASIDE the decision dated May 30, 2005 of the Regional Trial Court of
Manila, Branch 32. Civil Case No. 96-81167 is hereby
DISMISSED for utter want of merit. Accordingly, the questioned
order enjoining Patricia and all other person/s acting on its stead (sic)
to refrain and desist from evicting or ejecting plaintiffs/appellees in
Patricia's own land and from collecting rentals is LIFTED effective
immediately.
No costs. SO ORDERED.8
The CA denied the motions for reconsideration of the petitioners and intervenor Mijares
through the assailed resolution of February 16, 2011.9
Hence, this appeal by the petitioners.
Issues
The petitioners maintain that the CA erred in dismissing the complaint, arguing that the
parties had openly raised and litigated the boundary issue in the RTC, and had thereby
amended the complaint to conform to the evidence pursuant to Section 5, Rule 10 of
the Rules of Court; that they had the sufficient interest to bring the suit for quieting of
title because they had built their improvements on the property; and that the RTC
correctly relied on the reports of the majority of the commissioners.
On its part, the City of Manila urges the Court to reinstate the decision of the RTC. It
reprises the grounds relied upon by the petitioners, particularly the application of Section
5, Rule 10 of the Rules of Court.10
In response, Patricia, Inc. counters that the boundary dispute, which the allegations of
the complaint eventually boiled down to, was not proper in the action for quieting of title
under Rule 63, Rules of Court; and that Section 5, Rule 10 of the Rules of Court did not
apply to vest the authority to resolve the boundary dispute in the RTCC.11
In other words, did the CA err m dismissing the petitioners' complaint?
Ruling of the Court
The appeal lacks merit.
1.
Jurisdiction over a real action depends on
the assessed value of the property involved
as alleged in the complaint
The complaint was ostensibly for the separate causes of action for injunction and for
quieting of title. As such, the allegations that would support both causes of action must
be properly stated in the complaint. One of the important allegations would be those
vesting jurisdiction in the trial court.
The power of a court to hear and decide a controversy is called its jurisdiction, which
includes the power to determine whether or not it has the authority to hear and
determine the controversy presented, and the right to decide whether or not the
statement of facts that confer jurisdiction exists, as well as all other matters that arise in
the case legitimately before the court. Jurisdiction imports the power and authority to
declare the law, to expound or to apply the laws exclusive of the idea of the power to
make the laws, to hear and determine issues of law and of fact, the power to hear,
determine, and pronounce judgment on the issues before the court, and the power to
inquire into the facts, to apply the law, and to pronounce the judgment.12
But judicial power is to be distinguished from jurisdiction in that the former cannot exist
without the latter and must of necessity be exercised within the scope of the latter, not
beyond it.13
Jurisdiction is a matter of substantive law because it is conferred only by law, as
distinguished from venue, which is a purely procedural matter. The conferring law may
be the Constitution, or the statute organizing the court or tribunal, or the special or
general statute defining the jurisdiction of an existing court or tribunal, but it must be in
force at the time of the commencement of the action.14 Jurisdiction cannot be presumed
or implied, but must appear clearly from the law or it will not be held to exist, 15 but it may
be conferred on a court or tribunal by necessary implication as well as by express
terms.16 It cannot be conferred by the agreement of the parties; 17 or by the court's
acquiescence;18 or by the erroneous belief of the court that it had jurisdiction;19 or by the
waiver of objections;20 or by the silence of the parties.21
The three essential elements of jurisdiction are: one, that the court must have
cognizance of the class of cases to which the one to be adjudged belongs; two, that the
proper parties must be present; and, three, that the point decided must be, in substance
and effect, within the issue. The test for determining jurisdiction is ordinarily the nature
of the case as made by the complaint and the relief sought; and the primary and
essential nature of the suit, not its incidental character, determines the jurisdiction of the
court relative to it.22
Jurisdiction may be classified into original and appellate, the former being the power to
take judicial cognizance of a case instituted for judicial action for the first time under
conditions provided by law, and the latter being the authority of a court higher in rank to
re-examine the final order or judgment of a lower court that tried the case elevated for
judicial review. Considering that the two classes of jurisdiction are exclusive of each
other, one must be expressly conferred by law. One does not flow, nor is inferred, from
the other.23
Jurisdiction is to be distinguished from its exercise.24 When there is jurisdiction over the
person and subject matter, the decision of all other questions arising in the case is but an
exercise of that jurisdiction.25 Considering that jurisdiction over the subject matter
determines the power of a court or tribunal to hear and determine a particular case, its
existence does not depend upon the regularity of its exercise by the court or
tribunal.26 The test of jurisdiction is whether or not the court or tribunal had the power to
enter on the inquiry, not whether or not its conclusions in the course thereof were correct,
for the power to decide necessarily carries with it the power to decide wrongly as well as
rightly. In a manner of speaking, the lack of the power to act at all results in a judgment
that is void; while the lack of the power to render an erroneous decision results in a
judgment that is valid until set aside.27 That the decision is erroneous does not divest the
court or tribunal that rendered it of the jurisdiction conferred by law to try the
case.28 Hence, if the court or tribunal has jurisdiction over the civil action, whatever error
may be attributed to it is simply one of judgment, not of jurisdiction; appeal,
not certiorari, lies to correct the error.29
The exclusive original jurisdiction of the RTC in civil cases is conferred and provided for in
Section 19 of Batas Pambansa Blg. 129 (Judiciary Reorganization Act of 1980), viz.:
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, 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;
(3) In all actions in admiralty and maritime jurisdiction where he
demand or claim exceeds twenty thousand pesos (P20,000.00);
(4) In all matters of probate, both testate and intestate, where the
gross value of the estate exceeds twenty thousand pesos
(P20,000.00);
(5) In all actions involving the contract of marriage and marital
relations;
 (6) In all cases not within the exclusive jurisdiction of any court,
tribunal, person or body exercising judicial or quasi-judicial functions;
(7) In all civil actions and special proceedings falling within the
exclusive original jurisdiction of a Juvenile and Domestic Relations
Court and of the Courts of Agrarian Relations as now provided by law;
and
(8) In all other cases in which the demand, exclusive of interest and
costs or the value of the property in controversy, amounts to more
than twenty thousand pesos (P20,000.00).
For the purpose of determining jurisdiction, the trial court must interpret and apply the
law on jurisdiction in relation to the averments or allegations of ultimate facts in the
complaint regardless of whether or not the plaintiff is entitled to recover upon all or some
of the claims asserted therein.30 Based on the foregoing provision of law, therefore, the
RTC had jurisdiction over the cause of action for injunction because it was one in which
the subject of the litigation was incapable of pecuniary estimation. But the same was not
true in the case of the cause of action for the quieting of title, which had the nature of a
real action — that is, an action that involves the issue of ownership or possession of real
property, or any interest in real property31 — in view of the expansion of the jurisdiction
of the first level courts under Republic Act No. 7691, which amended Section 33(3) of
Batas Pambansa Blg. 129 effective on April 15, 1994,32 to now pertinently provide as
follows:
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, 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 exceeds (sic) Fifty thousand pesos (P50,000.00)
exclusive of interest, damages of whatever kind, attorneys
fees, litigation expenses and costs: x x x
As such, the determination of which trial court had the exclusive original jurisdiction over
the real action is dependent on the assessed value of the property in dispute.
An action to quiet title is to be brought as a special civil action under Rule 63 of the Rules
of Court. Although Section 1 of Rule 63 specifies the forum to be "the appropriate
Regional Trial Court,"33 the specification does not override the statutory provision on
jurisdiction. This the Court has pointed out in Malana v. Tappa,34 to wit:
To determine which court has jurisdiction over the actions identified in
the second paragraph of Section 1, Rule 63 of the Rules of Court, said
provision must be read together with those of the Judiciary
Reorganization Act of 1980, as amended.
It is important to note that Section 1, Rule 63 of the Rules of Court
does not categorically require that an action to quiet title be filed
before the RTC. It repeatedly uses the word "may"- that an action for
quieting of title "may be brought under [the] Rule" on petitions for
declaratory relief, and a person desiring to file a petition for
declaratory relief "may x x x bring an action in the appropriate
Regional Trial Court." The use of the word "may" in a statute denotes
that the provision is merely permissive and indicates a mere possibility,
an opportunity or an option.
In contrast, the mandatory provision of the Judiciary Reorganization
Act of 1980, as amended, uses the word shall and explicitly requires
the MTC to exercise exclusive original jurisdiction over all civil
actions which involve title to or possession of real property where the
assessed value does not exceed P20,000.00, thus:
xxxx
As found by the RTC, the assessed value of the subject property as
stated in Tax Declaration No. 02-48386 is only P410.00; therefore,
petitioners Complaint involving title to and possession of the said
property is within the exclusive original jurisdiction of the MTC, not the
RTC.35
The complaint of the petitioners did not contain any averment of the assessed value of
the property. Such failure left the trial court bereft of any basis to determine which court
could validly take cognizance of the cause of action for quieting of title. Thus, the RTC
could not proceed with the case and render judgment for lack of jurisdiction. Although
neither the parties nor the lower courts raised jurisdiction of the trial court in the
proceedings, the issue did not simply vanish because the Court can hereby motu
proprioconsider and resolve it now by virtue of jurisdiction being conferred only by law,
and could not be vested by any act or omission of any party.36
2.
The joinder of the action for injunction
and the action to quiet title
was disallowed by the Rules of Court
Another noticeable area of stumble for the petitioners related to their having joined two
causes of action, i.e., injunction and quieting of title, despite the first being an ordinary
suit and the latter a special civil action under Rule 63. Section 5, Rule 2 of the Rules of
Court disallowed the joinder, viz.:
Section 5. Joinder of causes of action. — A party may in one pleading
assert, in the alternative or otherwise, as many causes of action as he
may have against an opposing party, subject to the following
conditions:
(a) The party joining the causes of action shall comply with the rules
on joinder of parties;
 (b) The joinder shall not include special civil actions or actions
governed by special rules;
(c) Where the causes of action arc between the same parties but
pertain to different venues or jurisdictions, the joinder may be allowed
in the Regional Trial Court provided one of the causes of action falls
within the jurisdiction of said court and the venue lies therein; and
(d) Where the claims in all the causes of action arc principally for
recovery of money, the aggregate amount claimed shall he the test of
jurisdiction.
Consequently, the RTC should have severed the causes of action, either upon motion
or motu proprio, and tried them separately, assuming it had jurisdiction over both. Such
severance was pursuant to Section 6, Rule 2 of the Rules of Court, which expressly
provides:
Section 6. Misjoinder of causes of action. -- Misjoinder of causes of
action is not a ground for dismissal of an action. A misjoined cause of
action may, on motion of a party or on the initiative of the court, be
severed and proceeded with separately. (n)
The refusal of the petitioners to accept the severance would have led to the dismissal of
the case conformably with the mandate of Section, Rule 17 of the Rules of Court, to wit:
Section 3. Dismissal due to fault of plaintiff. - If, for no justifiable
cause, the plaintiff fails to appear on the date of the presentation of
his evidence in chief on the complaint, or to prosecute his action for an
unreasonable length of time, or to comply with these Rules or any
order of the court, the complaint may be dismissed upon motion of the
defendant or upon the court's own motion, without prejudice to the
right of the defendant to prosecute his counterclaim in the same or in
a separate action. This dismissal shall have the effect of an
adjudication upon the merits, unless otherwise declared by the court.
(3a)
3.
The petitioners did not show that they were
real parties in interest to demand
either injunction or quieting of title
Even assuming that the RTC had jurisdiction over the cause of action for quieting of title,
the petitioners failed to allege and prove their interest to maintain the suit. Hence, the
dismissal of this cause of action was warranted.
An action to quiet title or remove the clouds over the title is a special civil action
governed by the second paragraph of Section 1, Rule 63 of the Rules of Court.
Specifically, an action for quieting of title is essentially a common law remedy grounded
on equity. The competent court is tasked to determine the respective rights of the
complainant and other claimants, not only to put things in their proper place, to make the
one who has no rights to said immovable respect and not disturb the other, but also for
the benefit of both, so that he who has the right would see every cloud of doubt over the
property dissipated, and he could afterwards without fear introduce the improvements
he may desire, to use, and even to abuse the property as he deems best. But "for an
action to quiet title to prosper, two indispensable requisites must concur, namely: (1) the
plaintiff or complainant has a legal or an equitable title to or interest in the real property
subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed to be
casting cloud on his title must be shown to be in fact invalid or inoperative despite
its prima facie appearance of validity or legal efficacy.37
The first requisite is based on Article 477 of the Civil Code which requires that the
plaintiff must have legal or equitable title to, or interest in the real property which is the
subject matter of the action. Legal title denotes registered ownership, while equitable
title means beneficial ownership,38 meaning a title derived through a valid contract or
relation, and based on recognized equitable principles; the right in the party, to whom it
belongs, to have the legal title transferred to him.39
To determine whether the petitioners as plaintiffs had the requisite interest to bring the
suit, a resort to the allegations of the complaint is necessary. In that regard, the
complaint pertinently alleged as follows:
THE CAUSE OF ACTION
5. Plaintiffs are occupants of a parcel of land situated at Juan Luna
Street, Gagalangin, Tondo (hereinafter "subject property");
6. Plaintiffs and their predecessor-in-interest have been in open and
notorious possession of the subject property for more than thirty (30)
years;
7. Plaintiffs have constructed in good faith their houses and other
improvements on the subject property;
8. The subject property is declared an Area for Priority Development
(APD) under Presidential Decree No. 1967, as amended;
9. Defendant is claiming ownership of the subject property by virtue of
Transfer Certificate of Title (TCT) No. 35727 of the Registry of Deeds
for the City of Manila. x x x
10. Defendant's claim of ownership over the subject property is
without any legal or factual basis because, assuming but not
conceding that the TCT No. 35727 covers the subject property, the
parcel of land covered by and embraced in TCT No. 35727 has already
been sold and conveyed by defendant and, under the law, TCT No.
35727 should have been cancelled;
11. By virtue of TCT No. 35727, defendant is evicting, is about to evict
or threatening to evict the plaintiffs from the said parcel of land;
12. Because of the prior sales and conveyances, even assuming but
not conceding that the subject property is covered by and embraced in
Transfer Certificate of title No. 35727, defendant cannot lawfully evict
the plaintiffs from the subject property since it no longer owns the
subject property;
 13. Any attempted eviction of the plaintiffs from the subject property
would be without legal basis and consequently, would only be acts of
harassment which are contrary to morals, good customs and public
policy and therefore, plaintiffs are entitled to enjoin the defendant
from further harassing them;
14. Plaintiffs recently discovered that the subject property is owned by
the City of Manila and covered by and embraced in Transfer Certificate
of Title No. 44247, a copy of which is attached hereto as Annex "B", of
the Registry of Deeds for the City of Manila;
15. TCT No. 35727 which is apparently valid and effective is in truth
and in fact invalid, ineffective, voidable or unenforceable, and
constitutes a cloud on the rights and interests of the plaintiffs over the
subject property;
16. Plaintiffs are entitled to the removal of such cloud on their rights
and interests over the subject property;
17. Even assuming, but not admitting, that defendant owns the
subject property, it cannot evict the plaintiffs from the subject
property because plaintiffs' right to possess the subject property is
protected by Presidential Decree No. 2016.
18. Even assuming, but not admitting, that defendant owns the
subject property, it cannot evict the plaintiffs from the subject
property without reimbursing the plaintiffs for the cost of the
improvements made upon the subject property;
19. Because of defendant's unwarranted claim of ownership over the
subject property and its attempt to evict or disposses the plaintiffs
from the subject property, plaintiffs experienced mental anguish,
serious anxiety, social humiliation, sleepless nights and loss of appetite
for which defendant should be ordered to pay each plaintiff the
amount of P20,000.00 as moral damages;
20. Because of defendant's unwarranted claim of ownership over the
subject property and its attempt to evict or disposses the plaintiffs
from the subject property, plaintiffs were constrained to litigate to
protect their rights and interests, and hire services of a lawyer, for
which they should each be awarded the amount of P10,000.00.
21. The plaintiffs and the defendants are not required to undergo
conciliation proceeding before the Katarungan Pambarangay prior to
the filing of this action.40
The petitioners did not claim ownership of the land itself, and did not show their
authority or other legal basis on which they had anchored their alleged lawful occupation
and superior possession of the property. On the contrary, they only contended that their
continued possession of the property had been for more than 30 years; that they had
built their houses in good faith; and that the area had been declared an Area for Priority
Development (APD) under Presidential Decree No. 1967, as amended. Yet, none of such
reasons validly clothed them with the necessary interest to maintain the action for
quieting of title. For one, the authenticity of the title of the City of Manila and Patricia, Inc.
was not disputed but was even admitted by them during trial. As such, they could not
expect to have any right in the property other than that of occupants whose possession
was only tolerated by the owners and rightful possessors. This was because land covered
by a Torrens title cannot b e acquired by prescription or by adverse
possession.41 Moreover, they would not be builders entitled to the protection of the Civil
Code as builders in good faith. Worse for them, as alleged in the respondent's
comments,42 which they did not deny, they had been lessees of Patricia, Inc. Such
circumstances indicated that they had no claim to possession in good faith, their
occupation not being in the concept of owners.
At this juncture, the Court observes that the fact that the area was declared an area for
priority development (APD) under Presidential Decree No. 1967, as amended, did not
provide sufficient interest to the petitioners. When an area is declared as an APD, the
occupants would enjoy the benefits provided for in Presidential Decree No. 1517
(Proclaiming Urban land Reform in the Philippines and Providing for the Implementing
Machinery Thereof). In Frilles v. Yambao,43 the Court has summarized the salient
features of Presidential Decree No. 1517, thus:
P. D. No. 1517, which took effect on June 11, 1978, seeks to protect
the rights of bona-fide tenants in urban lands by prohibiting their
ejectment therefrom under certain conditions, and by according them
preferential right to purchase the land occupied by them. The law
covers all urban and urbanizable lands which have been proclaimed as
urban land reform zones by the President of the Philippines. If a
particular property is within a declared Area for Priority Development
and Urban Land Reform Zone, the qualified lessee of the said
property in that area can avail of the right of first refusal to
purchase the same in accordance with Section 6 of the same
law. Only legitimate tenants who have resided for ten years
or more on specific parcels of land situated in declared Urban
Land Reform Zones or Urban Zones, and who have built their homes
thereon, have the right not to be dispossessed therefrom and
the right of first refusal to purchase the property under
reasonable terms and conditions to be determined by the
appropriate government agency. [Bold emphasis supplied]
Presidential Decree No. 1517 only granted to the occupants of APDs the right of first
refusal, but such grant was true only if and when the owner of the property decided to
sell the property. Only then would the right of first refusal accrue. Consequently, the
right of first refusal remained contingent, and was for that reason insufficient to vest any
title, legal or equitable, in the petitioners.
Moreover, the CA's adverse judgment dismissing their complaint as far as the action to
quiet title was concerned was correct. The main requirement for the action to be brought
is that there is a deed, claim, encumbrance, or proceeding casting cloud on the plaintiffs'
title that is alleged and shown to be in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy, the eliminates the existence of the
requirement. Their admission of the genuineness and authenticity of Patricia, Inc.'s title
negated the existence of such deed, instrument, encumbrance or proceeding that was
invalid, and thus the action must necessarily fail.
4.
The petitioners did not have
a cause of action for injunction
The petitioners did not also make out a case for injunction in their favor.
The nature of the remedy of injunction and the requirements for the issuance of the
injunctive writ have been expounded in Philippine Economic Zone Authority v.
Carantes,44 as follows:
Injunction is a judicial writ, process or proceeding whereby a party is
directed either to do a particular act, in which case it is called a
mandatory injunction or to refrain from doing a particular act, in which
case it is called a prohibitory injunction. As a main action, injunction
seeks to permanently enjoin the defendant through a final injunction
issued by the court and contained in the judgment. Section 9, Rule 58
of the 1997 Rules of Civil Procedure, as amended, provides,
SEC. 9. When final injunction granted. If after the
trial of the action it appears that the applicant is
entitled to have the act or acts complained of
permanently enjoined, the court shall grant a final
injunction perpetually restraining the party or
person enjoined from the commission or
continuance of the act or acts or confirming the
preliminary mandatory injunction.
Two (2) requisites must concur for injunction to issue: (1) there
must be a right to be protected and (2) the acts against which
the injunction is to be directed are violative of said right.
Particularly, in actions involving realty, preliminary injunction will lie
only after the plaintiff has fully established his title or right thereto by a
proper action for the purpose. [Emphasis Supplied]
Accordingly, the petitioners must prove the existence of a right to be protected. The
records show, however, that they did not have any right to be protected because they
had established only the existence of the boundary dispute between Patricia, Inc. and
the City of Manila. Any violation of the boundary by Patricia, Inc., if any, would give rise
to the right of action in favor of the City of Manila only. The dispute did not concern the
petitioners at all.
5.
Section 5, Rule 10 of the Rules of Court
did not save the day for the petitioners
The invocation of Section 5, Rule 10 of the Rules of Court in order to enable the raising of
the boundary dispute was unwarranted. First of all, a boundary dispute should not be
litigated in an action for the quieting of title due to the limited scope of the action. The
action for the quieting of title is a tool specifically used to remove of any cloud upon,
doubt, or unce1iainty affecting title to real property;45 it should not be used for any other
purpose. And, secondly, the boundary dispute would essentially seek to alter or modify
either the Torrens title of the City of Manila or that of Patricia, Inc., but any alteration or
modification either way should be initiated only by direct proceedings, not as an issue
incidentally raised by the parties herein. To allow the boundary dispute to be litigated in
the action for quieting of title would violate Section 4846 of the Property Registration
Decree by virtue of its prohibition against collateral attacks on Torrens titles. A collateral
attack takes place when, in another action to obtain a different relief, the certificate of
title is assailed as an incident in said action.47 This is exactly what the petitioners sought
to do herein, seeking to modify or otherwise cancel Patricia, Inc.'s title.
WHEREFORE, the Court AFFIRMS the decision promulgated on June 25, 2010 by the
Court of Appeals in CA-G.R. CV No. 86735; and ORDERS the petitioners to pay the costs
of suit.
SO ORDERED.
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 Resolution2 dated January 24, 2007 in CA-G.R. SP No. 00235. The CA affirmed the
Decision3 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;
(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 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 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.
G.R. No. 214803
ALONA G. ROLDAN, Petitioner
vs
SPOUSES CLARENCE I. BARRIOS and ANNA LEE T. BARRIOS, ROMMEL
MATORRES, and HON. JEMENA ABELLAR ARBIS, in her capacity as Presiding
Judge, Branch 6, Regional Trial Court, Aldan, Respondents
DECISION
PERALTA, J.:
Before us is a petition for certiorari assailing the Order1 dated July 22, 2014 issued by the
Regional Trial Court (RTC), Branch 6, Kalibo, Aklan as well as the Order2 dated August
18, 2014 denying reconsideration thereof.
The antecedent facts are as follows:
On February 3, 2014, petitioner Alona G. Roldan filed an action 3 for foreclosure of real
estate mortgage against respondents spouses Clarence I. Barrios and Anna Lee T.
Barrios and respondent Romel D. Matorres, docketed as Civil Case No. 9811. She alleged
the following:
xxxx
2. That on October 13, 2008, defendants borrowed from plaintiff the
sum of Two Hundred Fifty Thousand Pesos (₱250,000.00), Philippine
Currency, payable within the period of one (1) year from said date,
with an interest thereon at the rate of 5% per month; and to secure
the prompt and full payment of the principal and interest, defendants
made and executed on October 13, 2008 a Deed of Real Estate
Mortgage in favor of plaintiff upon a parcel of land and improvements
thereon described as follows:
A parcel of land (Lot 5891-A-4) situated in Baybay, Makato, Aklan,
containing an area of four hundred seventy-eight (478) square meters,
more or less x x x declared in the name of Spouses Clarence Barrios
and Anna Lee T. Barrios, assessed in the sum of ₱13,380.00, tax
effectivity for the year 2008. Said land is covered by OCT No. P-5561
pt.
xxx
3. That the condition of said mortgage, as stated therein, is such, that
if within the period of one year from October 13, 2008, the defendants
shall pay or cause to be paid to the plaintiff, her heirs and assigns, the
 said sum of ₱250,000.00 together with the agreed interest, then the
said mortgage shall be discharged; otherwise, it shall remain in full
force and effect, to be enforceable in the manner provided by law.
4. That the time for payment of said loan is overdue and defendants
failed and refused to pay both the principal obligation and the interest
due starting from February 2011 to the present notwithstanding
repeated demands;
5. That there are no other persons having or claiming interest in the
mortgaged property except Romel D. Matorres whom plaintiff recently
discovered that the defendants mortgaged again to the said person
the same property subject of this suit for One Hundred Fifty Thousand
Pesos, (₱150,000.00) on June 11, 2012 x x x The said Romel D.
Matorres is however a mortgagee in bad faith.
WHEREFORE, it is respectfully prayed that upon due notice and
hearing, judgment be rendered ordering defendants SPS. CLARENCE I.
BARRIOS and ANNA LEE T. BARRIOS:
1. To pay unto the court within the reglementary
period of ninety days the sum of ₱250,000.00
together with the stipulated interest at five percent
(5%) per month starting from February 2011 to the
present, plus the additional sum of ₱25,000.00 the
total amount due for attorney's fees; litigation
expenses and costs; and that in default of such
payment, the above-mentioned property be ordered
sold to pay off the mortgage debt and its
accumulated interest;
2. To teach the defendants a lesson for having
mortgaged the property subject of this suit without
plaintiffs consent or knowledge, the defendants be
ordered to pay the plaintiff the sum of ₱50,000.00
as exemplary damages.
3. That plaintiff be granted such other relief in law
and equity.4
Respondents spouses Barrios filed their Answer5 with Special and Affirmative Defenses
contending that the computation of their alleged loan obligation was not accurate; that
they had filed with the RTC a petition for rehabilitation of a financially distressed
individuals under Special Proceeding No. 9845, thus there is a need to suspend the
foreclosure proceed1ngs. On the other hand, respondent Matorres filed his Answer6 with
Special and Affirmative Defenses admitting that the subject land was mortgaged to him;
that he had also filed a judicial foreclosure case against respondents spouses Barrios
pending with the RTC of Kalibo Aldan, Branch 6, docketed as Civil Case No. 9642; that
petitioner had no cause of action against him as they did not have any transaction with
each other; and prayed for damages and attorney's fees, and cross-claim against
respondent spouses for moral damages.
On July 22, 2014, the RTC issued the assailed Order as follows:
Civil Cases Nos. 9642 and 9811 are complaints for Foreclosure of Real
Estate Mortgage that involved the same property, Lot 5891-A-4,
situated in Baybay, Makato, Aklan, owned by Spouses Clarence Barrios
and Anna Lee Barrios.
It appearing from the complaint that the assessed value of the
property mortgaged is only ₱13,380.00 and the instant cases being a
real action, the assessed value of the property determines the
jurisdiction.1âwphi1 The assessed value of the property involved
being below ₱20,000.00, it is the first level court that has jurisdiction
over the cases. Premises considered, for lack of jurisdiction, Civil Cases
Nos. 9642 and 9811 are ordered DISMISSED without prejudice.
SO ORDERED.7
Petitioner and respondent Matorres filed their respective motions for reconsideration.
In an Order dated August 18, 2014, the RTC denied petitioner's motion as follows:
xxxx
Petitioner in her Motion argued that foreclosure of real estate
mortgage is an action incapable of pecuniary estimation and
jurisdiction lies with the Regional Trial Court.
Petitioner's argument is devoid of merit.
A petition for foreclosure of real estate mortgage is a real action and
the assessed value of the property determines jurisdiction while
location of the property determines the venue.
Premises considered, the Motion for Reconsideration is DENIED for
lack of merit.
SO ORDERED.8
Respondent Matorres' motion for reconsideration was also denied in an Order9 dated
September 1, 2014.
Petitioner filed the instant petition for certiorari alleging grave abuse of discretion
committed by the RTC when it ordered the dismissal of her foreclosure case without
prejudice and denying her motion for reconsideration. She argues that foreclosure of
mortgage is an action incapable of pecuniary estimation which is within the exclusive
jurisdiction of the RTC.
In his Comment, respondent Matorres joins the position and arguments of petitioner that
the cause of action of the foreclosure cases is incapable of pecuniary estimation, hence,
falling within the jurisdiction of the RTC.
Respondents spouses Barrios filed their Explanation and Comment alleging that
petitioner violated the Tax Reform Act of 1997 for her failure to issue official receipts on
the payments made by them; that she failed to show any proof of authority from the
Bangko Sentral ng Pilipinas relative to her money-lending activities.
The issue for resolution is whether the RTC committed grave abuse of discretion in
dismissing the foreclosure cases filed with it on the ground of lack of jurisdiction.
Preliminarily, we need to point out that generally a direct recourse to this Court is highly
improper, for it violates the established policy of strict observance of the judicial
hierarchy of courts. Although this Court, the RTCs and the Court of Appeals have
concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto,
habeas corpus and injunction, such concurrence does not give the petitioner unrestricted
freedom· of choice of court forum. This Court is a court of last resort, and must so remain
if it is to satisfactorily perform the functions assigned to it by the Constitution and
immemorial tradition. 10 However, the judicial hierarchy of courts is not an iron-clad rule.
A strict application of the rule of hierarchy of courts is not necessary when the cases
brought before the appellate courts do not involve factual but legal questions. 11 Since
petitioner raises a pure question of law pertaining to the court's jurisdiction on complaint
for judicial foreclosure of sale, we would allow petitioner's direct resort to us.
The RTC dismissed the foreclosure cases finding that being a real action and the
assessed value of the mortgaged property is only ₱13,380.00, it is the first level court
which has jurisdiction over the case and not the RTC.
Jurisdiction over the subject matter is the power to hear and determine cases of the
general class to which the proceedings in question belong. It is conferred by law and an
objection based on this ground cannot be waived by the parties. 12 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. 13
Batas Pambansa Big. (BP) 129 as amended by Republic Act No. (RA) 7691 pertinently
provides for the jurisdiction of the RTC and the first level courts as follows:
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 (₱20,000.00) or,
for civil actions in Metro Manila, where such value exceeds Fifty
thousand pesos (₱20,000.00) 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.
and
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 (₱20,000.00) or, in civil actions in Metro
Manila, where such assessed value does not exceed Fifty thousand
pesos (₱50,000.00) 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.
From the foregoing, the RTC exercises exclusive original jurisdiction in civil actions where
the subject of the litigation is incapable of pecuniary estimation. It also has jurisdiction in
civil cases involving title to, or possession of, real property or any interest in it where the
assessed value of the property involved exceeds ₱20,000.00, and if it is below
1!20,000.00, it is the first level court which has jurisdiction. An action "involving title to
real property" means that the plaintiffs cause of action is based on a claim that he owns
such property or that he has the legal right to have exclusive control, possession,
enjoyment, or disposition of the same. 14
The allegations and reliefs sought in petitioner's action for foreclosure of mortgage
showed that the loan obtained by respondents spouses Barrios from petitioner fell due
and they failed to pay such loan which was secured by a mortgage on the property of the
respondents spouses; and prayed that in case of default of payment of such mortgage
indebtedness to the court, the property be ordered sold to answer for the obligation
under the mortgage contract and the accumulated interest. It is worthy to mention that
the essence of a contract of mortgage indebtedness is that a property has been identified
or set apart from the mass of the property of the debtor-mortgagor as security for the
payment of money or the fulfillment of an obligation to answer the amount of
indebtedness, in case of default in payment. 15 Foreclosure is but a necessary
consequence of non-payment of the mortgage indebtedness. 16 In a real estate
mortgage when the principal obligation is not paid when due, the mortgagee has the
right to foreclose the mortgage and to have the property seized and sold with the view of
applying the proceeds to the payment of the obligation. 17 Therefore, the foreclosure suit
is a real action so far as it is against property, and seeks the judicial recognition of a
property debt, and an order for the sale of the res. 18
Petitioner cites Russell v. Vestil19to show that action for foreclosure of mortgage is an
action incapable of pecuniary estimation and, therefore, within the jurisdiction of the RTC.
We are not persuaded. In the Russell case, we held:
In Singsong vs. Isabela Sawmill, 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 was the registered owner of Lot 329, Cad-600 containing an area of 48,639 square
(now Regional Trial Courts). meters and covered by Original Certificate of Title (OCT) No. P-12524 (property); that
Alejandro and his wife, Felicisima Llamada (spouses Ramiro), sold the property to
Examples of actions incapable of pecuniary estimation are those for
spouses Bacaron, as evidenced by a Deed of Sale[6] executed on October 20, 1991;[7]
specific performance, support, or foreclosure of mortgage or
that spouses Bacaron took possession of the property after the sale; that the property,
annulment of judgment; also actions questioning the validity of a
however, was earlier mortgaged by spouses Ramiro to the Development Bank of the
mortgage, annulling a deed of sale or conveyance and to recover the
Philippines (DBP); that spouses Bacaron paid the DBP P430,150.00 for the redemption of
price paid and for rescission, which is a counterpart of specific
the property; and that in June 1998, petitioners forcibly dispossessed spouses Bacaron of
performance.
the property.[8]
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 Petitioners, on the other hand, denied the material allegations of the amended complaint,
the real property involved does exceed ₱20,000.00 in Metro Manila, or raising the following affirmative defenses: (a) the RTC does not have jurisdiction over the
₱50,000.00, if located elsewhere. If the value exceeds ₱20,000.00 or case considering that it involves recovery of possession of the property; (b) the
₱50,000.00 as the case may be, it is the Regional Trial Courts which instrument denominated as a Deed of Sale should be interpreted as an equitable
have jurisdiction under Sec. 19(2). However, the subject matter of the mortgage; and (c) laches has barred respondents from instituting the complaint.[9]
complaint in this case is annulment of a document denominated as
"DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF
PREVIOUS ORAL PARTITION.20 After trial on the merits, the RTC rendered a Decision[10] on July 13, 2007 in favor of
spouses Bacaron. It ruled that spouses Bacaron were able to prove by preponderance of
Clearly, the last paragraph clarified that while civil actions which involve title to, or
evidence the due execution of the Deed of Sale dated October 20, 1991 with spouses
possession of, real property, or any interest therein, are also incapable of pecuniary
Ramiro over the property. Although the original copy of the Deed of Sale was lost, the
estimation as it is not for recovery of money, the court's jurisdiction will be determined by
RTC held that spouses Bacaron were able to introduce competent secondary evidence to
the assessed value of the property involved.
prove its existence.[11] It also found that the purchase price of P400,000.00 as stated in
WHEREFORE, the petition for certiorari is DISMISSED as we find no grave abuse of the Deed of Sale corresponded, more or less, to the amount paid by spouses Bacaron to
discretion committed by the Regional Trial Court, Branch 6, Kalibo, Aklan in dismissing the DBP. The dispositive portion of the RTC Decision states:
the complaint for lack of jurisdiction.
SO ORDERED.
WHEREFORE, Premises Considered, a DECISION is hereby issued:
THE HEIRS OF THE LATE SPOUSES ALEJANDRO RAMIRO AND FELICISIMA LLAMADA,
NAMELY; HENRY L. RAMIRO; MERLYN R. TAGUBA; MARLON L. RAMIRO; MARIDEL R.
SANTELLA, WILMA L. RAMIRO; VILMA R. CIELO AND CAROLYN R. CORDERO, 1. DECLARING as VALID the Deed of Sale dated October 20, 1991;
PETITIONERS, V. SPOUSES ELEODORO AND VERNA BACARON, RESPONDENTS.

2. Directing herein Defendants to execute a Deed of Extra-Judicial Partition with

DECISION Confirmation of the Sale dated October 20, 1991 in favor of herein Plaintiffs within fifteen
(15) days from the finality of this DECISION. Should Defendants fail to execute said
JARDELEZA, J.:[*]
document as directed by the Court the execution of said document shall be undertaken
pursuant to law and the rules;
This is a petition for review on certiorari[1] under Rule 45 of the Revised Rules of Court
assailing the October 19, 2010 Decision[2] (assailed Decision) and May 3, 2011
3. Directing the Register of Deeds to cause the registration of the parcel of land subject
Resolution[3] (assailed Resolution) of the Court of Appeals (CA) in CA-G.R. CV No.
of this case in the name of the Plaintiffs upon the presentation by Plaintiffs of the Deed of
01350-MIN. The CA affirmed in toto the July 13, 2007 Decision[4] of Branch 32 of the
Extra-Judicial Partition and Confirmation of Sale referred to in par. No. 2 hereof.
Regional Trial Court (RTC) of Lupon, Davao Oriental, in Civil Case No. 1966 (045).
Respondent spouses Eleodoro and Verna Bacaron (spouses Bacaron) filed Civil Case No.
1966 (045) before the RTC against petitioners. In their amended complaint,[5] spouses a) Directing Defendants and all other persons acting for and in their behalf to vacate the
Bacaron claimed that the father of petitioners, the late Alejandro Ramiro (Alejandro), property subject of this case and restore the possession thereof to herein Plaintiffs;
 We grant the petition.
b) Directing Defendants to pay the amount of P30,000.00 as reasonable Attorney's Fees.
Section 19 of B.P. Blg. 129, as amended by R.A. No. 7691, provides that the RTC shall
exercise exclusive original jurisdiction on the following actions:
SO ORDERED.[12] (Emphasis omitted.)

Sec. 19. Jurisdiction in civil cases. – Regional Trial Courts shall exercise exclusive original
Aggrieved, petitioners appealed the trial court's Decision to the CA. In their appeal,
jurisdiction.
petitioners argued that the main thrust of the complaint was to recover the property; yet,
spouses Bacaron failed to allege its assessed value. Petitioners, thus, asserted that the
RTC did not acquire jurisdiction over the subject matter of the case pursuant to Batas
(1) In all civil actions in which the subject of the litigation is incapable of pecuniary
Pambansa (B.P.) Blg. 129,[13] as amended by Republic Act (R.A.) No. 7691.[14]
estimation;

On October 19, 2010, the CA rendered its assailed Decision,[15] dismissing the appeal
(2) In all civil actions which involve the title to, or possession of, real property, or any
and affirming the RTC Decision in toto. The CA upheld the jurisdiction of the RTC over
interest therein, where the assessed value of the property involved exceeds Twenty
the subject matter of the case. Noting that the amended complaint alleged causes of
thousand pesos (P20,000,00) or, for civil actions in Metro Manila, where such value
action for the declaration of validity of the Deed of Sale or specific performance, and
exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and
recovery of possession, damages, attorney's fees and injunction all of which are
unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon
incapable of pecuniary estimation, joinder in the RTC is allowed by the Rules of
the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts;
Court.[16]

xxxx
The CA likewise rejected petitioners' contention that in view of their actual physical
possession of the property and their payment of realty taxes thereon, the real
transaction between their late parents and spouses Bacaron was an equitable mortgage.
The CA ruled that petitioners failed to assail the trial court's finding that the reason they Meanwhile, Section 33 of the same law provides the exclusive original jurisdiction of the
currently have possession of the property was because they forcibly took possession of first level courts, viz.:
the same from respondents in June 1998. The CA also found that contrary to petitioners'
claims of religious payment of realty taxes, the official receipts they presented showed
that they paid the realty taxes for 1991 and 1992, and for 1993 and 1994, only on August Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal
17, 1998 and March 12, 1999, respectively.[17] The CA also found petitioners' Circuit Trial Courts in Civil Cases. – Metropolitan Trial Courts, Municipal Trial Courts, and
arguments on laches untenable due to their failure to prove its elements.[18] Municipal Circuit Trial Courts shall exercise:

Petitioners filed a motion for reconsideration but the same was denied by the CA via its xxxx
assailed Resolution.[19] Hence, this petition which presents the following issues:

Whether the RTC acquired jurisdiction over the subject matter of the action.
Whether the Deed of Sale dated October 20, 1991 should be treated as an equitable
mortgage.
(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:

Whether the spouses Bacaron's claims are barred by laches. 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.

Settled is the rule that the nature of the action and which court has original and exclusive
jurisdiction over the same is determined by the material allegations of the complaint, the
type of relief prayed for by the plaintiff and the law in effect when the action is filed,
irrespective of whether the plaintiffs are entitled to some or all of the claims asserted
therein.[20] For instance, when the main relief sought is specific performance, the action
is incapable of pecuniary estimation within the exclusive jurisdiction of the RTC. When
the action, on the other hand, primarily involves title to, or possession of land, the court
which has exclusive original jurisdiction over the same is determined by the assessed
value of the property.
Here, petitioners argue against the CA's view that the action is under the RTC's
jurisdiction because it is incapable of pecuniary estimation. They contend that the main
thrust of respondents' complaint before the RTC is the recovery of possession of the
property. Thus, the primary purpose of all of respondents' alternative causes of action
involves title to or possession of real property. This is allegedly evident from respondents'
amended complaint which seeks, among others, to cancel OCT No. P-12524 covering the
property, to have a new title issued in their name, and to place respondents in peaceful
and undisturbed possession of the property. In view of these allegations, petitioners
posit that the complaint should be filed with the court having jurisdiction based on the
assessed value of the property. In this case, however, there was no effort on the part of
respondents to allege the assessed value of the property.[21]
Spouses Bacaron counter that the case record shows that the main relief prayed for in
the amended complaint is one for the declaration of validity and effectivity of the Deed of
Sale and specific performance or, in the alternative, that petitioners be ordered and
directed to execute the deed or instrument of conveyance and transfer of the property in
respondents' favor. They argue that based on existing jurisprudence, the Court has
recognized actions involving the legality of conveyances as actions incapable of
pecuniary estimation. Likewise, actions for specific performance are exclusively within
the jurisdiction of the RTC. Hence, in this case, since the main reliefs prayed for by
respondents are the declaration of validity of the Deed of Sale and specific performance,
the RTC has jurisdiction over the case.[22]
We agree with petitioners.
Respondents' amended complaint pertinently narrates the following:
3. That the above-named defendants are all surviving heirs of the late spouses
[Alejandro] Raqmiro (sic) and Felicisima Llamada-Ramiro;
4. That the late Alejandro Ramiro, father of the defendants, is the registered owner of a
parcel of land situated in Gov. Generoso, Davao Oriental, consisting of an area of about
Forty Eight Thousand Six Hundred Thirty Nine (48,639) square meters, more or less, and
embraced and covered by Original Certificate of Title (OCT) No. P-12524; said property is
mainly used and operated as a fish pond, with some portions of the said parcel of land
being devoted to and planted with coconut trees;
(Said parcel of land formed part of spouses Ramiro's [spouses Alejendro (sic) Ramiro's
and Felicisima Llamada's] conjugal properties- as registered owner Alejandro Ramiro is
referred-to and acknowledged in the property's title as married to Felicisima Llamda')
(sic);
xxxx
5. That sometime in 1991, said spouses Alejandro Ramiro and Felicisima
Llamada-Ramiro sold the above- mentioned property unto the plaintiffs herein, as may
be shown and evidenced by a Deed of Sale duly executed by the spouses, dated October
20, 1991;
xxxx
11.a. That just sometime after the aforesaid sale of the subject property, plaintiffs took
over the possession thereof;
11.b. That likewise, since the subject property was earlier mortgaged by the Ramiro
spouses unto the Development Bank of the Philippines (DBP). Plaintiffs caused the
payment unto the bank the amount of about Four Hundred Thirty Thousand Pesos and
Hundred Fifty Pesos (P430,150.00) for the redemption of the property from the
Development Bank of the Philippines;
12. That Alejandro Ramiro passed away sometime in 1996 or thereabout; That Felicisima
Llamada on the other hand died later in 1997 or sometime thereabout;
13. That thereafter (sic), sometime on the month of June of 1998, or thereabout, the
above-named defendants, led by defendant Henry Ramiro, unlawfully and coercively
took over the possession of the subject property without any justifiable cause
whatsoever, to the exclusion of the plaintiffs, arrogating unto themselves the supposed
ownership of the property;
14. And despite several demands, defendants unjustifiably refused to return unto the
plaintiffs the possession thereof, thus causing unwarranted damage and injuries unto the
latter;
x x x x[23] (Underscoring in the original.)
In the same vein, the following are the reliefs sought by respondents in their amended
complaint:
a.)
that a Temporary Restraining Order (TRO) be issued enjoining and prohibiting the
defendants from exercising, doing and/or otherwise causing to be done all acts, deeds
and activities which may be inimical to the plaintiffs' claims, rights and interest as lawful
owners thereof - more specifically (but not limited to ), the actual operation of the
fishpond by the defendants, and defendants' gathering and harvesting of coconuts and
other products found within the property; directing the defendants to return unto the
plaintiffs the possession of the subject property; and enjoining and prohibiting said
defendants from further effecting and causing whatever acts of disturbances in
contravention of plaintiffs['] peaceful possession of the property;
b.)
that Writs of Preliminary Mandatory and Prohibitory Injunctions likewise be issued in
plaintiffs' favor directing and/or providing the same wise (as stated in the foregoing);
c.)
that after hearing, the said Injunctions be made permanent;
d.)
that after the fact and verity of the subject property's sale (in plaintiffs' favor) shall have
been proved and established in the course of the proceedings of the above-entitled case,
the validity and effectivity of said sale be categorically declared and upheld: Or otherwise,
defendants be ordered and directed to execute the proper deed or instrument of
conveyance and transfer of the subject property in plaintiffs' favor;
e.)
that [the] Original Certificate of Title (OCT) No. P-12524 be ordered cancelled and in lieu
thereof, another title be accordingly issued in the name of the plaintiffs; and
f.)
that the plaintiffs be ordered placed in a peaceful and undisturbed possession over the
property.
g.)
that defendants be ordered to pay plaintiffs the sum of P20,000.00 as attorney's fees and
P1,200.00 as appearance fees of counsel per hearing;
h.)
that defendants be made to pay plaintiffs the amount of P100,000.00 as moral damages
as well as exemplary damages in the amount to be fixed by this Honorable Court.
All other reliefs in plaintiffs' favor, as may be deemed by this Honorable Court as just and
equitable under the premises, are herein likewise prayed for.[24] (Emphasis supplied;
underscoring in the original.)
It is clear from the foregoing that while respondents claim that their amended complaint
before the RTC is denominated as one for the declaration of validity of the Deed of Sale
and for specific performance, the averments in their amended complaint and the
character of the reliefs sought therein reveal that the action primarily involves title to or
possession of real property. An action "involving title to real property" means that the
plaintiff's cause of action is based on a claim that he owns such property or that he has
the legal rights to have exclusive control, possession, enjoyment, or disposition of the
same. Title is the "legal link between (1) a person who owns property and (2) the
property itself."[25]
The ultimate relief sought by respondents is for the recovery of the property through the
enforcement of its sale in their favor by the late spouses Ramiro. Their other causes of
action for the cancellation of the original title and the issuance of a new one in their name,
as well as 'for injunction and damages, are merely incidental to the recovery of the
property.[26] Before any of the other reliefs respondents prayed for in their complaint
can be granted, the issue of who between them and petitioners has the valid title to the
lot must first be determined.[27]
Similarly in Gochan v. Gochan,[28] we ruled that where a complaint is entitled as one for
specific performance but nonetheless prays for the issuance of a deed of sale for a parcel
of land, its primary objective and nature is one to recover the parcel of land itself and is,
thus, deemed a real action. Accordingly, under these circumstances, the court which has
jurisdiction over the subject matter of the case is determined by the assessed value of
the subject property.[29]
Here, respondents neither alleged the assessed value of the property. The Court cannot
take judicial notice of the assessed or market value of lands. Thus, absent any allegation
in the complaint of the assessed value of the property, it cannot be determined which
between the RTC or the Municipal Trial Court had original and exclusive jurisdiction over
respondents' action. Consequently, the complaint filed before the RTC should be
dismissed.[30]
Furthermore, it is not simply the filing of the complaint or appropriate initiatory pleading
but the payment of the prescribed docket fee that vests a trial court with jurisdiction over
the subject matter or nature of the action.[31] In resolving the issue of whether or not
the correct amount of docket fees were paid, it is also necessary to determine the true
nature of the complaint.[32] Having settled that the action instituted by respondents is a
real action and not one incapable of pecuniary estimation, the basis for determining the
correct docket fees shall, therefore, be the assessed value of the property, or the
estimated value thereof as alleged by the claimant.[33] As already discussed, however,
respondents did not allege the assessed value of the property in their amended
complaint. They also did not allege its estimated value. As a result, the correct docket
fees could not have been computed and paid by respondents and the RTC could not have
acquired jurisdiction over the subject matter of the case.[34] All the proceedings before
it are consequently null and void.

In light of all the foregoing, we see no further need to discuss the other issues raised by
petitioners.

WHEREFORE, the petition is GRANTED. The Decision dated October 19, 2010 and
Resolution dated May 3, 2011 of the Court of Appeals in CA-G.R. CV No. 01350-MIN are
hereby REVERSED and SET ASIDE. The Decision of the Regional Trial Court dated July 13,
2007 is declared NULL and VOID. The amended complaint in Civil Case No. 1966 (045) is
dismissed without prejudice.

SO ORDERED.