CGP Transportation vs PCI Leasing

Mortgage[5] and the Amendment of Real Estate

DECISION Mortgage[6] executed by herein petitioner CGP.

CHICO-NAZARIO, J.: The facts are as follows:

Before us is a Petition for Review Petitioner CGP obtained two loans from
on Certiorari under Rule 45 of the Revised Rules of respondent PCI, the collective principal sum of
Court seeking to annul and set aside the 26 March
which amounted to Sixteen Million
[1] [2]
2004 Decision and 13 July 2004 Resolution of
(P16,000,000.00) pesos. Both loans were secured by
the Court of Appeals in CA G.R. SP No. 68528
real estate mortgages over two parcels of
entitled PCI Leasing and Finance, Inc. v. Hon.
Alberto L. Lerma in His Capacity as Presiding land[7] located in Bo. Cupang, Muntinlupa City, and

Judge of Branch 256 of the Regional Trial Court covered by Transfer Certificates of Title Nos.
of Muntinlupa City and CGP Transportation and 172319 and 180241 issued by the Registry of Deeds
Services Corporation. In the assailed decision, the
of Makati City.
[3]
Court of Appeals set aside the 27 March 2001 and
Petitioner CGP failed to pay its
30 August 2001[4] Orders of the Regional Trial
indebtedness to respondent PCI pursuant to the
Court (RTC), Branch 256, of the City of
Muntinlupa in LRC Case No. 99-020 entitled In re: terms and conditions extant on the face of the

Petition for Issuance of Writ of Possession for Real Promissory Notes covering the two loans
Properties Covered by Transfer Certificates of Title aforementioned. Accordingly, the latter filed a
Nos. 172319 and 180241 of the Register of Deeds
petition for extra-judicial foreclosure of the real
for Makati City (CGP Transportation & Services
properties subject of the Real Estate Mortgage and
Corporation Properties). Herein respondent PCI
the Amendment of Real Estate Mortgage, pursuant
Leasing and Finance, Incorporated (PCI) was
originally the petitioner in the aforequoted case, to Act No. 3135,[8] as amended.

while herein petitioner CGP Transportation and During the public auction held thereafter,
Services Corporation (CGP) was the oppositor respondent PCI was the highest bidder of the
therein.
subject real properties. Consequently, the
This case stemmed from the extra-judicial
corresponding Certificates of Sale were issued in
foreclosure proceedings instituted by herein
the name of respondent PCI.
respondent PCI against the Real Estate
 On 19 November 1997, the above-
mentioned Certificates of Sale were registered with
the Registry of Deeds of Makati City.
Petitioner CGP, however, failed to redeem
the real properties during the redemption period;
thus, respondent PCI insisted that actual possession
thereof be turned over to it. Expectedly, petitioner
CGP balked at the idea and refused the
demand. On 12 April 1999, respondent PCI[9] filed
before the Regional Trial Court of Muntinlupa City,
Branch 256, and docketed as LRC Case No. 99-020,
a petition for an ex-parte issuance of a Writ of
Possession. Petitioner CGP opposed the subject
petition.
On 15 November 2000, the RTC issued
an Order ruling against oppositor (herein petitioner)
CGPs stance. The Order, in part, reads:
The petitioner is correct, the
law expressly authorized the
purchaser to petition for a writ of
possession during the redemption
period by filing an Ex-parte Motion
under oath for that purpose and that
the pendency of any separate civil
action can be no obstacle to the
issuance of the writ of possession
which is a ministerial act of the trial
court after a title on the property has
been consolidated in the mortgage.
Accordingly, Ex-
parte reception of evidence is
scheduled on December 1, 2000,
at 2:00 oclock in the afternoon.[10]
In its Motion for Reconsideration, petitioner
CGP averred that the scheduled hearing was
violative of the writ of preliminary injunction issued
in its favor by the same trial court, albeit in a
different case involving the same parties
particularly Civil Case No. 99-234, respecting a
complaint for the annulment of the foreclosure
proceedings earlier mentioned. It argued that
notwithstanding the fact that the complaint for
annulment of foreclosure proceedings had already
been dismissed by the trial court, such order had not
yet become final and executory inasmuch as it was
appealed to the Court of Appeals. That being the
case, the writ should still be considered in effect and
subsisting.
On 27 March 2001, the RTC
reconsidered its Order, viz:
[F]inding the grounds relied upon by
the oppositor to be meritorious and
considering further that there are
several motions to be resolved yet by
the court, the Motion for
Reconsideration is GRANTED, the
order of this court dated October 20,
2000 is set aside and the ex-parte
proceedings is hereby nullified and
set aside. The Preliminary Injunction
previously issued is reinstated.[11]

Consequently, it was
respondent PCIs turn to file a Motion
for Reconsideration.
In an Order dated 30 August 2001, the RTC
stood pat on its position that the Opposition filed by
herein petitioner CGP raised issues that needed to
be heard in the presence of both
parties. Said Order stated:
This resolves the Motion for
Reconsideration filed by petitioner
on the order of this court
dated March 27, 2001, which granted
the motion for reconsideration filed
by Oppositor to the Order
dated November 15, 2000.
There is basis to the pending
motion of petitioner insofar as the
reinstatement of preliminary
injunction earlier issued by this court
and submission for resolution of
motions are concerned, as they all
refer to Civil Case No. 99-234. This
Court recognizes the snafu brought
about by the several pleadings and
pending incidents both in the instant
case and Civil Case No. 99-234
which involved the same parties and
the same subject matter.
Be that as it may, this court,
after a careful review of the verified
opposition of the oppositor,
including it annexes, is not inclined
to grant the ex-parte proceedings as
asserted by the petitioner. This court
reviewed the grounds of oppositor in
its motion for reconsideration of the
order dated November 15, 2000,
which allowed ex-parte presentation
of evidence in this case.These
grounds are: (a) Presence on record
of a verified opposition to the
petition and (b) there was an
injunction earlier issued by this court
on September 3, 1999 on the
complaint for annulment of
foreclosure proceedings of the
subject properties filed by oppositor
in Civil Case No. 99-234 also before
this court.
It is the considered view of
this court that the verified opposition
on record joined issues that need to
be heard in the presence of both
parties, a basic requirement of due
process. The general rule frowns [on]
ex-parte proceedings. When this
court issued a writ of injunction in
Civil Case No. 99-234, taking into
consideration the allegations in the
complaint it was convinced that there
was a need for a status quo between
the parties until all the issues joined
therein are heard and disposed. On
technical ground, the complaint in
Civil Case No. 99-234 was dismissed
by this court. Although it may be too
late for this court to say, there were
indeed pending incidents that needed
to be resolved in Civil Case No. 99-
234. Precisely, when this court
mentioned of pending motions, it
was actually referring to the pending
incidents in Civil Case No. 99-234,
as correctly pointed out by the
Oppositor, petitioner at the time of
the dismissal of the complaint in
Civil Case No. 99-234, it has not
filed yet its answer to the complaint
in intervention of the plaintiff-
intervenor. Petitioner, apparently,
took advantage of the inadvertence
in the issuance of the order of
dismissal in Civil Case No. 99-234
when it kept silent of the fact that it
has not filed yet an answer to the
complaint in intervention.
This court is cognizant of the
rule that the dismissal of the
complaint on the merits
automatically dissolves the
injunction issued therein even if the
 decision or order of dismissal is on ANOTHER CASE (CIVIL
appeal. The dismissal of this court CASE NO. 99-234).
however, of the complaint in Civil
Case No. 99-234 was not the result 3. THE PUBLIC
of trial on the merits but rather on RESPONDENT ACTED
mere technicality. It is in this light WITH GRAVE ABUSE OF
that this court believes that DISCRETION,
considering that the dissolution of AMOUNTING TO LACK
the injunction was the consequence OR IN EXCESS OF
of the order of dismissal of the JURISDICTION, WHEN IT
complaint in Civil Case No. 99-234, SET ASIDE IN THE CASE
which was not the result of a trial on A QUO THE ORDER
the merits, and the said order of DATED 20 OCTOBER
dismissal is now the subject of 2000 WHICH WAS ISSUED
appeal, there is a need to suspend the IN CIVIL CASE NO. 99-234.
proceedings in this case until the said
appeal is disposed.[12] 4. THE PUBLIC
RESPONDENT ACTED
WITH GRAVE ABUSE OF
Aggrieved, respondent PCI filed before this DISCRETION,
AMOUNTING TO LACK
Court, a Petition for Certiorari under Rule 65 of the OR IN EXCESS OF
JURISDICTION, WHEN IT
Revised Rules of Court, premised on the following SUSPENDED THE
PROCEEDINGS A QUO
grounds: UNTIL THE APPEAL IN
CIVIL CASE NO. 99-234 IS
RESOLVED.[13]
1. THE PUBLIC RESPONDENT
ACTED WITH GRAVE
ABUSE OF DISCRETION, The petition (G.R. No. 150483) was,
AMOUNTING TO LACK
OR IN EXCESS OF however, referred to the Court of Appeals by this
JURISDICTION, WHEN IT
NULLIFIED AND SET Court for appropriate action in
ASIDE THE EX PARTE
PROCEEDINGS IN THE a Resolution,[14] dated 3 December 2001, pursuant
CASE A QUO.
to Section 6, Rule 56 of the 1997 Revised Rules of
2. THE PUBLIC
RESPONDENT ACTED Civil Procedure, factual issues being involved.
WITH GRAVE ABUSE OF
DISCRETION, In response to the referral, the Court of
AMOUNTING TO LACK
OR IN EXCESS OF Appeals docketed the petition as CA G.R. SP No.
JURISDICTION, WHEN IT
REINSTATED IN THE 68528.
CASE A QUO THE
In its Decision promulgated on 26 March
PRELIMINARY
INJUNCTION WHICH 2004, the Court of Appeals granted herein
WAS ISSUED IN
respondent PCIs petition and set aside the
RTC Order dated 30 August 2001. The dispositive
portion reads:
WHEREFORE, the instant
petition is hereby GRANTED. The
orders dated March 27, 2001 and
August 28 (sic), 2001 of the
Regional Trial Court, Branch
256, Muntinlupa City, in LRC Case
No. 99-020 are SET ASIDE. Further,
the public respondent judge is
ordered to continue with the
proceedings and to decide the case
with dispatch.[15]
The appellate court found public respondent
RTC Judge to have gravely abused his discretion
amounting to lack or excess of jurisdiction in
suspending the proceedings in LRC Case No. 99-
020 relating to the writ of possession asked for by
herein respondent PCI. The Court of Appeals did
not favor the RTC Judge who, in effect took
cognizance of the proceedings in Civil Case No. 99-
234, an action for annulment of foreclosure
proceedings filed by[16] herein petitioner CGP one
that is entirely separate from the case earlier filed.
Moreover, [w]ith the dismissal of the main case,
(an) injunction (issued therein) is automatically
lifted and the dissolution thereof is
appealable. The Court of Appeals then clarified that
though the preceding principle is the general rule,
the circumstances surrounding the reinstatement of
the subject writ of preliminary injunction do not
necessarily entitle the application of the exception
stated in Section 4, Rule 39 of the 1997 Revised
Rules of Civil Procedure, which states:
SEC. 4. Judgments not stayed
by appeal. Judgments in actions for
injunction, receivership, accounting
and support, and such other
judgments as are now or may
hereafter be declared to be
immediately executory, shall be
enforceable after their rendition and
shall not be stayed by an appeal
taken therefrom, unless otherwise
ordered by the trial court. On appeal
therefrom, the appellate court in its
discretion may make an order
suspending, modifying, restoring or
granting the injunction, receivership,
accounting, or award of support.
The stay of execution shall be
upon such terms as to bond or
otherwise as may be considered
proper for the security or protection
of the rights of the adverse party.
It likewise noted that the fact that there was
no dispute vis--vis herein petitioner CGPs failure to
redeem the foreclosed real properties within the
period, herein respondent PCIs right to possession
thereof is quite patent and absolute; and that any
not
 the factual issues are pending for
question regarding the validity of the mortgage or resolution in the case before the
Court of Appeals, in the case entitled
its foreclosure cannot be a legal ground for refusing CGP TRANSPORTATION AND
SERVICES CORPORATION,
the issuance of a writ of possession xxx.[17] Plaintiff-appellant versus PCI
LEASING AND FINANCE
On 13 July 2004, the Court of Appeals CORPORATION, defendant-
appellee docketed as C.A. G.R. No.
denied the motion for reconsideration filed by
69466.] With this factual backdrop,
herein petitioner CGP. petitioner honestly believes, that
there can be no other fate on the said
Hence, this Petition for Review petition [of respondent] but the
dismissal, it being a settled
on Certiorari filed under Rule 45 of the 1997 jurisprudence that in a petition for
review, only questions of law can be
Revised Rules of Civil Procedure. Petitioner CGP raised. Even the Honorable Court of
Appeals agree on this point when it
does not question at all the substantive aspect of the says in its aforequoted decision,
citing the doctrine laid down by this
decision of the Court of Appeals. Its petition is Honorable Court in BCI Employees
& Workers Union v. Marcos, 39
predicated solely on the issue of whether or not the SCRA 178, that It is however basic
that when facts are disputed,
Honorable Court of Appeals gravely erred in giving certiorari is not an appropriate
remedy.[19]
due course to the petition for certiorari of

respondent, there being already a final finding by Respondent PCI, in contrast, maintains that
this Honorable Court in its Resolution dated in rendering its assailed Decision, the Honorable

December 3, 2001, in G.R. No. 150483, that the Court of Appeals simply discharged the duty

said petition raised questions of facts and therefore assigned to it by this Honorable Court, apropos the

not proper for petition for certiorari.[18] latters 3 December 2001 Resolution.

In its one page argument, Petitioner CGP We sustain

contends, in whole, that: respondent PCIs importunings and dismiss

petitioner CGPs petition.

It is undisputed that this
Although the form or mode of the original
Honorable Court in its resolution
dated December 3, 2001 in G.R. No. petition filed by herein respondent PCI from the
150483 has found that issues of facts
are raised in the petition filed therein. Order of the RTC was a special civil action
That these conclusion and finding of
this Honorable Court are final and for certiorari, an incorrect mode of appeal there
therefore no court for that matter,
being questions of fact as assigned errors, i.e., the
including the Court of Appeals, can
disturb the same. [In fact and in truth, existence and relevancy of specific surrounding
circumstance, their relation to each other and to the
whole situation,[20] this Court, in order to serve the
demands of substantial justice, considers and
disposes of the case as an appeal
by certiorari instead.
In an appeal by certiorari under Rule 45,
only questions of law may be raised.[21] In petitions
such as the one filed in G.R. No. 150483, questions
of fact may not be the proper subject of appeal
under Rule 45 as this mode of appeal is generally
confined to questions of law.[22] Well entrenched is
the rule that this Court is not a trier of facts.[23]The
resolution of factual issues is the function of lower
courts, whose findings on these matters are received
with respect and are in fact binding on us subject to
certain exceptions.[24] Cases where an appeal
involved questions of fact, of law, or both fall
within the exclusive appellate jurisdiction of the
Court of Appeals.[25] This is attested to by Section
15, Rule 44 of the 1997 Revised Rules of Civil
Procedure. The section reads:
SEC. 15. Questions that may
be raised on appeal. x x x he may
include in his assignment of errors
any question of law or fact that has
been raised in the court below and
which is within the issues framed by
the parties.
It was on this score that we referred the
subject petition to the appellate court.
Under Section 5(f) of Rule 56 of the 1997
Revised Rules of Civil Procedure, an appeal may be
dismissed on the ground of erroneous choice or
mode of appeal. Said section reads:
SEC. 5. Grounds for
dismissal of appeal. The appeal
MAY be dismissed motu proprio or
on motion of the respondent on the
following grounds:
xxxx
(f) Error in the choice or
mode of appeal.
This notwithstanding, the Court may refer
the case to the Court of Appeals under par. 2,
Section 6 of the same rule. Said section states:
SEC. 6. Disposition of
improper appeal. x x x
An appeal by certiorari taken
to the Supreme Court from the
Regional Trial Court submitting
issues of fact MAY be referred to the
Court of Appeals for decision or
appropriate action. The
determination of the Supreme Court
on whether or not issues of fact are
involved shall be final. [Emphasis
supplied.]
This Courts discretion to refer the case to
the Court of Appeals is by reason of the
term may in both sections. Such term denotes
discretion on our part in dismissing an appeal or
referring one to the Court of Appeals.
 Bokingco v. CA, GR No. 161739, May 4, 2006
Besides, it must be borne in mind that procedural
DECISION
rules are intended to ensure proper administration of

law and justice. The rules of procedure ought not to

CALLEJO, SR., J.:
be applied in a very rigid, technical sense, for they

are adopted to help secure, not override, substantial Before the Court is the petition for review
justice.[26] A deviation from its rigid enforcement on certiorari filed by Alfredo Bokingo seeking to
may thus be allowed to attain its prime objective,
reverse and set aside the
for after all, the dispensation of justice is the core
Decision[1] dated December 17, 2003 of the Court
reason for the existence of the courts.
of Appeals (CA) in CA-G.R. SP No. 71510 which
In the case at bar, substantial ends of justice
dismissed his petition for certiorari filed therewith.
warranted the referral of the case to the appellate

court for further appropriate proceedings.

WHEREFORE, premises considered, the
instant petition is hereby DENIED. The assailed 26
March 2004 Decision and 13
2004 Resolution, both of the Court of Appeals, in
CA G.R. SP No. 68528 entitled PCI Leasing and
Finances, Inc. v. Hon. Alberto L. Lerma, In His
Capacity as Presiding Judge of Branch 256 of
The factual and procedural antecedents are as
follows:
July
Petitioner Alfredo Bokingo is one of the
defendants in the complaint for injunction and
damages filed by Ernesto Campos, the Heirs of
Celestino

the Regional TrialCourt of Muntinlupa City and Busa,[2] the Heirs of Felicidad Busa-Panal[3] and the
CGP Transportation and Services Corporation, are Heirs of Concordia Busa.[4] The complaint was filed
AFFIRMED.
with the Regional Trial Court (RTC) of Butuan City,
No costs.
Branch 3 thereof, and docketed as Civil Case No.
SO ORDERED.
1003. The complaint alleged as follows:

CAUSE OF ACTION

3. Plaintiffs [herein respondents] are

co-owners of the land subject matter.
By virtue of the right of
representation, the heirs of
FELICIDAD BUSA-PANAL and
CONCORDIA S. BUSA and
REYNALDO S. BUSA,
respectively;
4. Defendants in this case are heirs
of MIGUEL BOKINGO;
5. Defendants ALFREDO
BOKINGO [herein petitioner],
WENCESLAO B. AMBRAY,
JR., ROSA B. AMBRAY,
CELIA A. ALMORA and
JOSELITO B. AMBRAY, filed
an application for titling of a
parcel of land before the
Department of Environment and
Natural Resources, Office of the
CENRO, Ochoa Avenue, Butuan
City;
6. The land subject matter of the
application of defendants is a
parcel of land located at Baan
(Buhangin), Butuan City,
containing an area of 2.1600
hectares, more or less;
7. The land subject matter of the
application for titling of
defendants is a parcel of land
inherited by plaintiffs from their
father, the late CELESTINO
BUSA. This parcel of land is
described particularly as:
TAX DECLARATION NO.
GR.-10-002-0189-A
A parcel of
land covered by Tax
Declaration No. GR-
10-002-0189-A,
situated in Buhangin,
Butuan City,
containing an area of
2.1600 HAS., more or
less. Bounded on the
North Elisa Busa,
South - Pastor Ago,
East Ho. Miguel
Bokingo and on the
West Baan River.
8. When plaintiffs knew of
defendants application, plaintiffs
filed a protest against defendants
application on February 5, 1996.
Attached as Annex A is the
Protest;
9. On November 24, 1998, the
Provincial Environment and
Natural Resources Officer,
HUGO I. BAOSIA, resolved the
Protest in favor of Plaintiffs-the
protestant in the DENR
case. Attached as Annex B is the
order;
10. On January 6, 1999, the
Provincial Environment and
Natural Resources Officer,
HUGO T. BAOSIA, issued a
certification stating that the order
dated November 24, 1998 has
become final and
executory. Attached as Annex C
is the machine copy of the
Certification;
11. On September 9, 1999, the same
DENR Officer HUGO T.
BAOSIA issued an Order of
Execution which states that:
In complying herewith, the
Land Management Officer III
concerned should be instructed to set
forth the whole proceeding in writing
signed by the parties and witnesses,
if possible, submit and return to this
Office within sixty (60) days from SPO3 FERDINAND B.
receipt hereof, to be used as DACILLO and Defendant
evidence should it be necessary to ALFREDO BOKINGO,
institute any action, criminal or representatives of defendants,
otherwise, against any party who told the survey group to stop and
may refuse to obey the same. not to enter the area subject
matter of this case. Attached as
Annex F is the report of CENRO
SO Officer who [was] present during
ORDERED, Butuan City, September the November 18, 1999 survey
9, 1999. which was stopped by SPO3
FERDINAND B. DACILLO and
ALFREDO BOKINGO;

12. Plaintiffs requested on June 23, 15. Plaintiff[s] availed of

1999, for a Survey Authority to the Barangay Justice System to
survey the land subject matter of resolve the controversy regarding
this case before the CENRO the survey but to no avail,
Office of Butuan City. Attached defendants still refused to allow
as Annex D is the Survey plaintiffs to survey the area. Thus,
Application; a Certificate to File Action was
issued by the Lupong
13. On July 30, 1999, A Survey
Tagapamayapa. Copy of the
Authority was issued by the
same is hereto attached as Annex
CENRO of Butuan City,
G;
authorizing plaintiff ENGR.
ERNESTO M. CAMPOS, JR., to 16. The defendants did not exercise
survey the land subject matter of honesty and good faith in their
the DENR case and the case at acts which is a violation of
bar. Attached as Annex E is the Article 19 of the New Civil Code,
Survey Authority; and which entitles the plaintiffs
for damages;
14. On November 18, 1999 at 11:00
A.M., FELICIDAD BUSA- 17. The acts of defendants
PANAL, MILAGROS BUSA constrained the plaintiff[s] to
SIMOGAN, TERESITA BUSA litigate and to incur attorneys
LINAO, JIMMY BUSA-PANAL, fees in the amount of
son of Felicidad Busa-Panal, PhP10,000.00 plus litigation
ALFREDO BUSA-PANAL, son- expenses estimated at
in-law of Concordia S. Busa, PhP10,000.00.
personnel of the Butuan PNP and
the personnel of ENGR. PRAYER
ERNESTO M. CAMPOS went to Wherefore, premises
the area subject matter of this considered, it is respectfully prayed
case to survey the that after hearing, this Honorable
land. Unfortunately, Defendant Court:
 1) Enjoin permanently the
illegal acts of defendants of Petitioner Bokingo pointed out in his Motion to
preventing the survey of the land
Dismiss that the assessed value of the land subject
subject matter of this case by ENGR.
ERNESTO M. CAMPOS; matter of the complaint was not

2) Order defendants to pay indicated. Nonetheless, he proffered that based on

plaintiffs the sum of P10,000.00
as attorneys fees, P10,000.00 as his fathers tax declaration covering the subject land,
litigation expenses;
its assessed value was
3) Order defendants to pay
only P14,410.00. Consequently, it was allegedly
damages to plaintiff;
clear that the court a quo, a Regional Trial Court,
4) Such other reliefs just and
reasonable under the had no jurisdiction over the subject matter of the
[5]
circumstances.
complaint filed by the respondents. Rather, in view

Petitioner Bokingo, as one of the defendants of the assessed value of the subject land which was

in the above complaint, filed with the court a quo a allegedly less than the P15,000.00, jurisdiction

motion to dismiss alleging that the latter has no properly belonged to the MTC.

jurisdiction over the subject matter of the Petitioner Bokingo thus urged the court a quo to

claim. Specifically, petitioner Bokingo contended dismiss the complaint filed by the respondents for

that it could be gleaned from the complaint that the lack of jurisdiction over the subject matter thereof.

issue between the parties involved the possession of

Acting thereon, the court a quo issued the
the land.As such, the assessed value of the land was
Order dated March 13, 2002 denying the motion to
crucial to determine the courts jurisdiction over the
dismiss. It pointed out that the complaints allegation
subject matter in accordance with either Section
is that the respondents, as plaintiffs, are entitled to
19(2)[6] or Section 33(3)[7] ofBatasang Pambansa
have the subject land surveyed after petitioner
Blg. 129[8] as amended by Republic Act No.
Bokingos and his co-claimants application for the
7691. If the assessed value thereof is P20,000.00 or
titling of the subject land was dismissed by the
less, then the Municipal Trial Court (MTC) has
Provincial Environment and Natural Resources
jurisdiction over the subject matter. Otherwise,
Officer (PENRO) and the respondents were
jurisdiction is with the RTC.
declared to have a better right to file a public land
application covering the same.Further, the relief It was noted that the records fail to disclose

being sought in the complaint is injunction in order that petitioner Bokingo filed a motion for

that the respondents right to survey the subject land reconsideration of the order of the court a

would not be defeated. quo. According to the CA, such omission warranted

the outright dismissal of the petition

Based on these allegations, the court a
for certiorari. Finally, it was not shown or even
quo held that it had jurisdiction over the subject
alleged in the petition that the court a quo, in
matter of the claim under Section 2 of Rule 58 of
issuing the assailed order, acted with grave abuse of
the Rules of Court which provides in part that [a]
discretion amounting to lack of jurisdiction. The
preliminary injunction may be granted by the court
issue raised by petitioner Bokingo, the CA held,
where the action or proceeding is pending. It
was proper for an appeal but not a petition
accordingly denied petitioner Bokingos motion to
for certiorari.
dismiss the complaint for lack of jurisdiction.
Aggrieved, petitioner Bokingo now comes

Petitioner Bokingo forthwith filed with the to the Court seeking the reversal of the said decision

Court of Appeals a petition for certiorari alleging of the CA which dismissed his petition

grave abuse of discretion on the part of the court a for certiorari filed therewith. He insists that the

quo in denying his motion to dismiss. complaint filed by the respondents with the court a

quo is a possessory action. To determine which

On December 17, 2003, the CA rendered the
court, the RTC or MTC, has primary jurisdiction,
assailed Decision dismissing the said petition for
petitioner Bokingo theorizes that it is necessary that
lack of merit, in fact and in law. It ruled that the
the assessed value of the land be alleged in the
remedy of certiorari is unavailing to petitioner
initiatory complaint. Absent such allegation, the
Bokingo because an order denying a motion to
court where the case was filed should allegedly
dismiss is interlocutory and cannot be the subject of
preliminarily determine the assessed value of the
the extraordinary petition for certiorari or
subject property to determine whether or not it has
mandamus.[9]
jurisdiction over the subject matter of the claim. In

the present case, according to petitioner Bokingo,

the assessed value of the subject land is exclusive jurisdiction over the same is determined

only P14,410.00; hence, jurisdiction thereof by the material allegations of the complaint, the

properly belongs to the MTC in accordance with type of relief prayed for by the plaintiff, and the law

Section 19(2) or 33(3) of BP Blg. 129 as amended in effect when the action is filed, irrespective of

by RA 7691. whether the plaintiffs are entitled to some or all of

the claims asserted therein.[11] The caption of the

The petition is bereft of merit.
complaint is not determinative of the nature of the
Preliminarily, the Court finds no reversible action. Nor does the jurisdiction of the court depend
error in the dismissal by the CA of petitioner upon the answer of the defendant or agreement of
Bokingos petition for certiorari filed therewith. As the parties, or to the waiver or acquiescence of the
correctly held by the CA, the mere fact that he parties.[12]
failed to move for the reconsideration of the court a
A careful perusal of the respondents
quos order denying his motion to dismiss
complaint, quoted earlier, shows that it alleges that
was sufficient cause for the outright dismissal of the
per the Order dated November 24, 1998 of PENRO
said petition. Certiorari as a special civil action will
of Butuan City, petitioner Bokingos and his co-
not lie unless a motion for reconsideration is first
claimants application for titling of the subject land
filed before the respondent court to allow it an
was rejected. On the other hand, in the same order it
opportunity to correct its errors, if any.[10] Petitioner
was declared that the respondents, if qualified, may
Bokingo did not proffer any compelling reason to
file an appropriate public land application covering
warrant deviation by the CA from this salutary
the same land. It was further alleged that the said
rule. As further observed by the CA, petitioner
order became final and executory, and in connection
Bokingo failed to even allege grave abuse of
therewith, the respondents were authorized by the
discretion on the part of the court a quo in rendering
City Environment and Natural Resources Officer
the order denying his motion to dismiss.
(CENRO) of Butuan City to conduct a survey on
In any case, the present petition lacks the subject land. However, petitioner Bokingo,
substantive merit. It is axiomatic that the nature of through his representatives, unjustly prevented the
the action and which court has original and
conduct of the said survey. Even when the matter
regarding the survey was submitted to the Lupong
Tagapamayapa, petitioner Bokingo still allegedly
refused to allow the respondents to survey the
subject land. Hence, the Complaint for Injunction
filed by the respondents where the principal relief
sought is to enjoin permanently the illegal acts of
the defendants therein, including petitioner Bokingo,
of preventing the survey of the land subject matter
of the case.
In this connection, it is well to note that the Court
had the occasion to explain that in determining
whether an action is one the subject matter of which
is not capable of pecuniary estimation, the nature of
the principal action, or remedy sought must first be
ascertained. If it is primarily for the recovery of a
sum of money, the claim is considered capable of
pecuniary estimation, and jurisdiction over the
action will 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, the
action is one where the subject of litigation may not
be estimated in terms of money, which is
cognizable exclusively by Regional Trial Courts.[13]
As gleaned from the complaint, the principal
relief sought by the respondents in their complaint
is for the court a quo to issue an injunction against
petitioner Bokingo and his representatives to
permanently enjoin them from preventing the
survey of the subject land. For clarity, the prayer of
the complaint reads:
Wherefore, premises
considered, it is respectfully prayed
that after hearing, this Honorable
Court:
1) Enjoin permanently the
illegal acts of defendants of
preventing the survey of the land
subject matter of this case by ENGR.
ERNESTO M. CAMPOS;
2) Order defendants to pay
plaintiffs the sum of P10,000.00
as attorneys fees, P10,000.00 as
litigation expenses;
3) Order defendants to pay
damages to plaintiff;
4) Such other reliefs just and
reasonable under the
[14]
circumstances.
Contrary to the view posited by petitioner Bokingo,
the cause of action of the respondents complaint is
not, as yet, to recover the possession of the subject
land. There are three kinds of actions to judicially
recover possession of real property and these are
distinguished in this wise:
 What really distinguishes an action
for unlawful detainer from a the court a quo, a Regional Trial Court under
possessory action (accion
publiciana) and from a Section 19 (1) of BP Blg. 129, as amended by RA
reinvindicatory action (accion
reinvindicatoria) is that the first is 7691:
limited to the question
of possession de facto. An unlawful SEC. 19. Jurisdiction in Civil Cases.
detainer suit (accion interdictal) Regional Trial Courts shall exercise
together with forcible entry are the exclusive original jurisdiction:
two forms of an ejectment suit that
may be filed to recover possession of (1) In all civil actions in which the
real property. Aside from the subject of the litigation is incapable
summary action of ejectment, accion of pecuniary estimation;
publiciana or the plenary action to xxx
recover the right of possession
and accion reinvindicatoria or the
action to recover ownership which
includes recovery of possession,
make up the three kinds of actions to Hence, the court a quo did not err in denying
judicially recover possession.[15] petitioner Bokingos motion to dismiss.

Significantly, the respondents complaint has not
sought to recover the possession or ownership of the
subject land. Rather, it is principally an action to
enjoin petitioner Bokingo and his representatives
WHEREFORE, premises considered, the petition
is DENIED and the assailed Decision
dated December 17, 2003 of the Court of Appeals in
CA-G.R. SP No. 71510 is AFFIRMED in toto.

from committing acts that would tend to prevent the SO ORDERED.

survey of the subject land. It cannot be said

therefore that it is one of a possessory action. The

respondents, as plaintiffs in the court a quo, to be

entitled to the injunctive relief sought, need to

establish the following requirements: (1) the

existence of a right to be protected; and (2) that the

acts against which the injunction is to be directed

are violative of the said right. As such, the subject

matter of litigation is incapable of pecuniary

estimation and properly cognizable exclusively by

Honorio Bernardo v. Heirs of Eusebio Villegas
DECISION
PEREZ, J.:
This petition for review on certiorari under Rule
45 of the Rules of Court seeks to assail the validity
of the Decision[1] dated 21 April 2008 of the Court
of Appeals, which affirmed the judgment of the
Regional Trial Court (RTC) of Binangonan, Rizal in
Civil Case No. R-00-035.
This controversy stemmed from a Complaint
dated 14 November
2000 for accion publiciana filed by respondent
Heirs of Eusebio Villegas against
petitioner Honorio Bernardo, Romeo Gaza (Gaza)
and Monina Francisco (Francisco). Respondents
had earlier filed an ejectment case against the trio,
docketed as Civil Case No. 99-065 with the
Municipal Trial Court (MTC) of Binangonan, Rizal,
which case was dismissed on the ground of lack of
jurisdiction for having been filed beyond the one-
year prescriptive period for filing a forcible entry
case.[2]
Respondents alleged in the Complaint that their
father, Eusebio Villegas, is the registered owner of a
parcel of land covered by Transfer Certificate of
Title (TCT) No. 46891 with an area of 18,369
square meters and situated in Barangay Pag-
asa, Binangonan, Rizal; that petitioner, by stealth
and in the guise of merely grazing his cattle,
surreptitiously entered into possession of a portion
of respondents land; that petitioner conspired and
confederated with Gaza and Francisco by illegally
constructing their own houses on the subject land;
that the issue of possession was brought to
the barangay for conciliation but no settlement was
reached by the parties; and that petitioner, Gaza and
Francisco had forcibly, unlawfully and unjustly
possessed and continue to possess the subject
property and had refused to vacate the same.
In his Answer, petitioner denied taking possession
of any portion of the property of respondents. He
argued that the cause of action is barred by the
judgment in the ejectmentcase. He claimed that he
had been in possession of his land since the early
1950s.[3] As he did before the MTC, petitioner also
alleged lack of jurisdiction on the part of the RTC.
Gaza alleged that he has been occupying an
abandoned river bed adjacent to the property
allegedly owned by respondents.[4] Gaza averred
that he entered into a written agreement with
petitioner, who claimed to own the land and
allowed him to build a nipa hut thereon.[5]
An ocular inspection was conducted by the trial
court judge. On 5 March 2007, the trial court
rendered judgment in favor of respondents and
ordered petitioner, Gaza and Francisco to vacate the
subject land covered by TCT No. 46891 and to pay
jointly and severally respondents the amount
of P30,000.00 as attorneys fees and the cost of
suit.[6]
The trial court held that the suit, being
an accion publiciana, falls within its jurisdiction. It
found that the houses of petitioner and Gaza were
inside the titled property of respondents. Its findings
were based on the testimony of one of the
respondents, Estelito Villegas; the relocation plan guilty of laches considering that Estelito Villegas,
prepared by Engineer Rico J. Rasay; and the upon seeing for the first time in 1996 that petitioner
Technical Report on Verification Survey submitted was already building his house on the premises,
by Engineer Robert C. Pangyarihan, petitioners own verbally asked him to discontinue the
witness.[7] The trial court noted that petitioner failed construction.[10]
to present any title or tax declaration to prove
ownership or possessory right.[8] His motion for reconsideration having been denied,
petitioner filed the instant petition.
On appeal, the Court of Appeals affirmed the ruling
of the trial court. Petitioner insists that the trial court had no
jurisdiction over the subject matter of the action for
In his appeal, petitioner questioned the jurisdiction failure of respondents to allege the assessed value of
of the trial court over the subject matter and argued the property involved in their complaint. Petitioner
that in their complaint, the respondents failed to belies the ruling of the appellate court that he failed
state the assessed value of the property in to raise objections before the trial court. Petitioner
dispute. The appellate court ruled that petitioner reiterates that he raised the defense of lack of
is estopped from raising the issue of jurisdiction jurisdiction as early as in his Answer filed before
because he failed to file a motion to dismiss on such the trial court. Moreover, he argues that even if he
ground and, instead, actively participated in the did not raise the defense of lack of jurisdiction, the
proceedings before the trial court. trial court should have dismissed the
complaint motu proprio. Petitioner disputes the
With respect to the argument that being application to him of the doctrine
indispensable parties, all of the heirs of estoppel by laches in Tijam v. Sibonghanoy.[11] P
of Eusebio Villegas should have been impleaded as etitioner avers that unlike in Tijam, he raised the
parties, the appellate court disagreed and invoked issue of jurisdiction, not only in his answer, but also
Article 487 of the Civil Code, which provides that in his appeal. [12]
any one of the co-owners may bring an action
for ejectment. The appellate court construed said Respondents defend the ruling of the Court of
provision to cover all kinds of actions for recovery Appeals and maintain that petitioner
of possession.[9] is estopped from challenging the jurisdiction of the
trial court.[13]
The appellate court sustained the trial courts finding
that the portions of the land occupied by petitioner The issue presented before this Court is
and Gaza are owned by respondents. The appellate simple: Whether or not estoppel bars petitioner
court likewise ruled that respondents could not be from raising the issue of lack of jurisdiction.

Under Batas Pambansa Bilang 129,
plenary action of accion publiciana must be brought
before the regional trial courts. With
modifications introduced by Republic Act No.
7691[14] in 1994, the jurisdiction of the regional trial
courts was limited to real actions where the assessed
value exceeds P20,000.00, and P50,000.00 where
the action is filed in Metro Manila, thus:
SEC. 19. Jurisdiction in civil
cases. Regional Trial Courts shall
exercise exclusive original
jurisdiction:
xxxx
(2) In all civil actions which
involve the title to, or possession of,
real property, or any interest therein,
where the assessed value of the
property involved exceeds Twenty
thousand pesos (P20,000.00) or, for
civil actions in Metro Manila, where
such value exceeds Fifty thousand
pesos (P50,000.00) except actions
for forcible entry into and unlawful
detainer of lands or buildings,
original jurisdiction over which is
conferred upon the Metropolitan
Trial Courts, Municipal Trial Courts,
and Municipal Circuit Trial Courts.
Under the law as modified, jurisdiction is
determined by the assessed value of the property.
A reading of the complaint shows that respondents
failed to state the assessed value of the disputed
land. The averments read:
xxxx
3. EUSEBIO VILLEGAS,
deceased father of hte plaintiffs, is
the registered owner of a parcel of
land situated in Barangay Pag-
the
asa (formerly Barangay Tayuman), B
inangonan, Rizalwith a land area of
18,369 square meters. The same is
the
covered by and embraced in Transfer
Certificate of Title No. 46891 of the
Registry of Deeds for
the Province of Rizal. x x x.
4. Plaintiffs are the legal heirs
of EUSEBIO VILLEGAS and
succeeded to the subject parcel of
land by virtue of their inheritance
rights as compulsory heirs of said
deceased EusebioVillegas and upon
his death, immediately took over and
were enjoying the peaceful
possession of the said parcel of land
and exercising said rights of
possession and ownership thereof;
5. That sometime in 1996,
defendant Honorio Bernardo, by
stealth and in guise of merely
grazing his cattle, without the
consent of the plaintiffs,
surreptitiously entered into the
possession of a portion of the subject
parcel of land. Employing threats
and intimidations, he claimed later
that the area he illegally occupied is
purportedly not part and parcel of the
land owned by the plaintiffs
predecessor, Eusebio Villegas, and
forcibly fenced and built his house
on the portion of land he illegally
occupied;
6. Not being content with his
own forcible and unlawful invasion,
usurpation and incursion into the
plaintiffs parcel of land, and in
furtherance of his desire to forcibly
exclude the plaintiffs of their lawful
and for possession of the subject
portion of plaintiffs parcel of land,
defendant Bernardo, conspired and
confederated with defendants Romeo
Gaza and MoninaFrancisco by
surreptitiously and illegally
constructing their own houses on the
subject parcel of land through stealth
and intimidation;
 7. That the issue of the
possession of the subject parcel of
land was brought under
the Barangay Justice System in 1996
for conciliation but, no settlement
was reached by the parties.Copies of
the Certifications issued by
the Barangay for that matter is hereto
attached and marked as Annex B;
8. That the defendants have
forcibly, unlawfully, and unjustly
dispossessed and still continues to
forcibly, unlawfully, and unjustly
dispossesses the plaintiffs of their
lawful rights of possession and
ownership on a portion of the subject
property since 1966 up to the
present;
9. Because of the unjust
refusal of the defendants to vacate
the premises, plaintiffs were
constrained to engage the services of
counsel to protect their interest on
the property for an agreed attorneys
fee of P50,000.00, and have incurred
litigation expenses[;]
10. By reason of the unlawful
and forcible invasion by the
defendants of the property of the
plaintiffs which was accompanied by
threats and intimidation, the
plaintiffs have suffered and continue
to suffer anxiety and sleepless nights
for which the defendants should be
made to indemnify by way of moral
damages in the amount of at least
P100,000.00;
11. To serve as an example to
others who might be minded to
commit similar wanton and unlawful
acts, defendants should be held
answerable for exemplary damages
of not less than P50,000.00.[15]
This fact was noted by the Court of Appeals
in its Decision but it proceeded to rule in this wise:
Records show that at the time
plaintiffs-appellees filed their
complaint below, R.A. No. 7691
which amended Batas Pambansa Blg.
129 was already in effect. However,
the complaint failed to allege the
assessed value of the real property
involved. Although appellant indeed
raised the issue of jurisdiction in his
answer, he had not filed a motion to
dismiss on this ground nor reiterated
the matter thereafter but actively
participated in the proceedings after
the denial of his demurrer to
evidence anchored on the failure of
the plaintiffs to identify in their
complaint all the heirs of the
registered owner and supposed lack
of technical description of the
property in the certificate of
title. Indeed, appellant is
now estopped to question the trial
courts jurisdiction over the subject
matter and nature of the case having
actively pursued throughout the trial,
by filing various pleadings and
presenting all relevant documentary
and testimonial evidence, his theory
that the portion occupied by him is
not covered by the torrens title
of Eusebio Villegas.[16]
We agree.
As already shown, nowhere in the complaint
was the assessed value of the subject property ever
mentioned. There is no showing on the face of the
complaint that the RTChas jurisdiction exclusive of
the MTC. Indeed, absent any allegation in the
complaint of the assessed value of the property, it
cannot readily be determined which of the two trial
courts had original and exclusive jurisdiction over
the case.[17]
The general rule is that the jurisdiction of a court
may be questioned at any stage of the

proceedings.[18] Lack of jurisdiction is one of those
excepted grounds where the court may dismiss a
claim or a case at any time when it appears from the
pleadings or the evidence on record that any of
those grounds exists, even if they were not raised in
the answer or in a motion to dismiss. [19] The reason
is that jurisdiction is conferred by law, and lack of it
affects the very authority of the court to take
cognizance of and to render judgment on the
action.[20]
However, estoppel sets in when a party participates
in all stages of a case before challenging the
jurisdiction of the lower court. One cannot belatedly
reject or repudiate its decision after voluntarily
submitting to its jurisdiction, just to secure
affirmative relief against one's opponent or after
failing to obtain such relief. The Court has, time and
again, frowned upon the undesirable practice of a
party submitting a case for decision and then
accepting the judgment, only if favorable, and
attacking it for lack of jurisdiction when adverse.[21]
In Tijam, the Court held that it is iniquitous
and unfair to void the trial courts decision for lack
of jurisdiction considering that it was raised only
after fifteen (15) years of tedious litigation, thus:
The facts of this case show
that from the time the Surety became
a quasi-party on July 31, 1948, it
could have raised the question of the
lack of jurisdiction of the Court of
First Instance of Cebu to take
cognizance of the present action by
reason of the sum of money involved
which, according to the law then in
force, was within the original
exclusive jurisdiction of inferior
courts. It failed to do so. Instead, at
several stages of the proceedings in
the court a quo as well as in the
Court of Appeals, it invoked the
jurisdiction of said courts to obtain
affirmative relief and submitted its
case for a final adjudication on the
merits. It was only after an adverse
decision was rendered by the Court
of Appeals that it finally woke up to
raise the question of jurisdiction.
Were we to sanction such conduct on
its part, We would in effect be
declaring as useless all the
proceedings had in the present case
since it was commenced on July 19,
1948 and compel the judgment
creditors to go up their Calvary once
more. The inequity and unfairness of
this is not only patent but
revolting.[22]
The principle of justice and equity as
espoused in Tijam should be applied in this case.
The MTC dismissed the ejectment case upon its
ruling that the case is for accionpubliciana. It did
not assert jurisdiction over the case even if it could
have done so based on the assessed value of the
property subject of the accion publiciana. And there
was no showing, indeed, not even an allegation, that
the MTC was not aware of its jurisdictional
authority over an accion publiciana involving
property in the amount stated in the law.Moreover,
petitioner did not bring up the issue of jurisdictional
amount that would have led the MTC to proceed
with the trial of the case. Petitioner obviously
considered the dismissal to be in his favor. When,
as a result of such dismissal, respondents brought
the case as accion publiciana before the RTC,
petitioner never brought up the issue of
jurisdictional amount. What petitioner mentioned in Significantly, the Technical Report on
his Answer before the RTC was the generally Verification Survey[25] by Engineer Robert
phrased allegation that the Honorable Court has no C. Pangyarihan, which was attached to and formed
jurisdiction over the subject matter and the nature of part of the records, contained a tax
the action in the above-entitled case.[23] declaration[26] indicating that the subject property
has an assessed value of P110,220.00. It is basic
This general assertion, which lacks any basis, is not that the tax declaration indicating the assessed value
sufficient. Clearly, petitioner failed to point out the of the property enjoys the presumption of regularity
omission of the assessed value in the as it has been issued by the proper government
complaint. Petitioner actively participated during agency.[27] Under Republic Act No. 7691, the RTC
the trial by adducing evidence and filing numerous in fact has jurisdiction over the subject matter of the
pleadings, none of which mentioned any defect in action.
the jurisdiction of the RTC. It was only on appeal
before the Court of Appeals, after he obtained an Taking into consideration the decision of the MTC
adverse judgment in the trial court, that petitioner, proclaiming that the case is one
for the first time, came up with the argument that for accion publiciana and the assessed value of the
the decision is void because there was no allegation property as evidenced by the case records,
in the complaint about the value of the property. jurisdiction pertains, rightfully so, with
the RTC. Perforce, the petition should be denied.
Clearly, petitioner is estopped from WHEREFORE, the decision of the Court
questioning the jurisdiction of the RTC. of Appeals dated 21 April 2008, affirming the
judgment of the Regional Trial Court
We note that the decisions of the RTC and of the of Binangonan, Rizal dated 5 March 2007,
Court of Appeals discussed extensively the merits is AFFIRMED.
of the case, which has been pending for nearly ten
(10) years. It was handled by two (2) judges and its SO ORDERED.
records had to be reconstituted after the fire that
gutted the courthouse.[24] If we were to accede to
petitioners prayer, all the effort, time and expenses
of parties who participated in the litigation would be
wasted. Quite obviously, petitioner wants a
repetition of the process hoping for the possibility
of a reversal of the decision. The Court will not
countenance such practice.
Encarnacion v. Amigo, GR No. 169793 Sep 15,
2006
DECISION
YNARES-SANTIAGO, J.:
This petition for review assails the June 30,
2005 Decision[1] of the Court of Appeals in CA-G.R.
SP No. 73857, ordering the remand of Civil Case
No. Br. 20-1194 to the Regional Trial Court of
Cauayan, Isabela, Branch 20, for further
proceedings.
The antecedent facts are as follows:
Petitioner Victoriano M. Encarnacion is the
registered owner of Lot No. 2121-B-1, consisting of
100 square meters and covered by TCT No. T-
256650; and Lot No. 2121-B-2 consisting of 607
square meters with TCT No. T-256651, located at
District 1, National Hi-way, Cauayan, Isabela. Said
two lots originally form part of Lot No. 2121, a
single 707 square meter track of land owned by
Rogelio Valiente who sold the same to Nicasio
Mallapitan on January 18, 1982. On March 21,
1985, Mallapitan sold the land to Victoriano
Magpantay. After the death of the latter in 1992, his
widow, Anita N. Magpantay executed an Affidavit
of Waiver[2] on April 11, 1995 waving her right
over the property in favor of her son-in-law, herein
petitioner, Victoriano Encarnacion. Thereafter, the
latter caused the subdivision of the land into two
lots[3] and the issuance of titles in his name on July
18, 1996.[4]
Respondent Nieves Amigo allegedly entered
the premises and took possession of a portion of the
property sometime in 1985 without the permission
of the then owner, Victoriano Magpantay. Said
occupation by respondent continued even after TCT
Nos. T-256650 and T-256651 were issue to
petitioner.
Consequently, petitioner, through his lawyer sent a
letter[5] dated Febuary 1, 2001 demanding that the
respondent vacate the subject property. As
evidenced by the registry return receipt, the demand
letter was delivered by registered mail to the
respondent on February 12, 2001. Notwithstanding
receipt of the demand letter, respondent still refused
to vacate the subject property. Thereafter, on March
2, 2001, petitioner filed a complaint[6] for ejectment,
damages with injunction and prayer for restraining
order with the Municipal Trial Court in Cities of
Isabela which was docketed as CV-01-030. In his
Answer, respondent alleged that he has been in
actual possession and occupation of a portion of the
subject land since 1968 and that the issuance of
Free Patent and titles in the name of petitioner was
tainted with irregularities.[7]
On October 24, 2001, the Municipal Trial
Court in Cities rendered judgment, which reads:
WHERE[FO]RE, there being a
preponderance of evidence, a JUDGMENT is
hereby rendered in favor of the plaintiff
VICTORIANO M. ENCARNACION and against
the defendant NIEVES AMIGOE (sic) as follows:
a) ORDERING the
defendant to vacate the portion of the
parcels of land described in Transfer
Certificates of Title Nos. T-256650
and T-256651 he is now occupying
and surrender it to the plaintiff;
b) ORDERING the
defendant to pay the plaintiff the sum
 of FIVE THOUSAND PESOS
(P5,000) as attorneys fees, and
c) ORDERING the
defendant to pay rentals equivalent
[to] P500.00 per month from
February, 2001 until the portion of
the land occupied by him is
surrendered to the plaintiff.
COSTS against the
defendant.
SO ORDERED.[8]
On appeal, the Regional Trial Court of Cauayan,
Isabela, Branch 20, ruled as follows:
WHEREFORE, judgment is
rendered dismissing the case on the ground that as
the Municipal Court had no jurisdiction over the
case, this Court acquired no appellate jurisdiction
thereof. Costs against plaintiff-appellee.
SO ORDERED.[9]
Aggrieved, petitioner filed a petition for
review[10] under Rule 42 of the Rules of Court
before the Court of Appeals which promulgated the
assailed Decision remanding the case to the
Regional Trial Court. The dispositive portion
thereof reads:
WHEREFORE, premises considered, this
case is hereby REMANDED to Branch 20,
Regional Trial Court of Cauayan, Isabela for further
proceedings.
No costs.
SO ORDERED.[11]
Hence the present petition raising the sole issue:
[WHETHER] THE COURT OF
APPEALS ERRED IN HOLDING
THAT THE PROPER ACTION IN
THIS CASE IS ACCION
PUBLICIANA AND NOT
UNLAWFUL DETAINER AS
DETERMINED BY THE
ALLEGATIONS IN THE
COMPLAINT FILED BY
[12]
PETITIONER.
The petition lacks merit.
In this jurisdiction, the three kinds of actions for
hereby the recovery of possession of real property are:
1. Accion interdictal, or an ejectment
proceeding which may be either that
for forcible entry (detentacion) or
unlawful detainer (desahucio), which
is a summary action for recovery of
physical possession where the
dispossession has not lasted for more
than one year, and should be brought
in the proper inferior court;
2. Accion publiciana or the plenary
action for the recovery of the real
right of possession, which should be
brought in the proper Regional Trial
Court when the dispossession has
lasted for more than one year; and
3. Accion reinvindicatoria or accion
de reivindicacion, which is an action
for the recovery of ownership which
must be brought in the proper
Regional Trial Court.[13]
Based on the foregoing distinctions, the material
element that determines the proper action to be filed
for the recovery of the possession of the property in be filed is an accion publiciana which should be

this case is the length of time of brought to the proper Regional Trial Court.

dispossession. Under the Rules of Court, the

remedies of forcible entry and unlawful detainer are After a careful evaluation of the evidence on

granted to a person deprived of the possession of record of this case, we find that the Court of

any land or building by force, intimidation, threat, Appeals committed no reversible error in holding

strategy, or stealth, or a lessor, vendor, vendee, or that the proper action in this case is accion

other person against whom the possession of any publiciana; and in ordering the remand of the case

land or building is unlawfully withheld after the to the Regional Trial Court of Cauayan, Isabela,

expiration or termination of the right to hold Branch 20, for further proceedings.

possession by virtue of any contract, express or

Well settled is the rule that jurisdiction of
implied, or the legal representatives or assigns of
the court over the subject matter of the action is
any such lessor, vendor, vendee, or other
determined by the allegations of the complaint at
person. These remedies afford the person deprived
the time of its filing, irrespective of whether or not
of the possession to file at any time within one year
the plaintiff is entitled to recover upon all or some
after such unlawful deprivation or withholding of
of the claims asserted therein. What determines the
possession, an action in the proper Municipal Trial
jurisdiction of the court is the nature of the action
Court against the person or persons unlawfully
pleaded as appearing from the allegations in the
withholding or depriving of possession, or any
complaint. The averments therein and the character
person or persons claiming under them, for the
of the relief sought are the ones to be
restitution of such possession, together with
consulted.[15] On its face, the complaint must show
[14]
damages and costs. Thus, if the dispossession has
enough ground for the court to assume jurisdiction
not lasted for more than one year, an ejectment
without resort to parol testimony.[16]
proceeding is proper and the inferior court acquires
From the allegations in the complaint, it
jurisdiction. On the other hand, if the dispossession
appears that the petitioner became the owner of the
lasted for more than one year, the proper action to
property on April 11, 1995 by virtue of the waiver
of rights executed by his mother-in-law. He filed
the complaint for ejectment on March 2, 2001 after
his February 1, 2001 letter to the respondent
demanding that the latter vacate the premises
remained unheeded. While it is true that the demand
letter was received by the respondent on February
12, 2001, thereby making the filing of the complaint
for ejectment fall within the requisite one year from
last demand for complaints for unlawful detainer, it
is also equally true that petitioner became the owner
of the subject lot in 1995 and has been since that
time deprived possession of a portion thereof. From
the date of the petitioners dispossession in 1995 up
to his filing of his complaint for ejectment in 2001,
almost 6 years have elapsed. The length of time that
the petitioner was dispossessed of his property
made his cause of action beyond the ambit of
an accion interdictal and effectively made it one
for accion publiciana. After the lapse of the one-
year period, the suit must be commenced in the
Regional Trial Court via an accion
publiciana which is a suit for recovery of the right
to possess. It is an ordinary civil proceeding to
determine the better right of possession of realty
independently of title. It also refers to an ejectment
suit filed after the expiration of one year from the
accrual of the cause of action or from the unlawful
withholding of possession of the realty.[17]
Previously, we have held that if the owner of the
land knew that another person was occupying his
property way back in 1977 but the said owner only
filed the complaint for ejectment in 1995, the proper
action would be one for accion publiciana and not
one under the summary procedure on ejectment. As
explained by the Court:
We agree with the Court of
Appeals that if petitioners are indeed
the owners of the subject lot and
were unlawfully deprived of their
right of possession, they should
present their claim before the
regional trial court in an accion
publiciana or an accion
reivindicatoria, and not before the
metropolitan trial court in a summary
proceeding for unlawful detainer or
forcible entry. For even if one is the
owner of the property, the possession
thereof cannot be wrested from
another who had been in physical or
material possession of the same for
more than one year by resorting to a
summary action for ejectment.[18]
Hence, we agree with the Court of Appeals
when it declared that:
The respondents actual entry
on the land of the petitioner was in
1985 but it was only on March 2,
2001 or sixteen years after, when
petitioner filed his ejectment case.
The respondent should have filed
an accion publiciana case which is
under the jurisdiction of the RTC.
 However, the RTC should with the preceding
have not dismissed the case. section, without
prejudice to the
Section 8, Rule 40 of the admission of amended
Rules of Court provides: pleadings and
additional evidence in
SECTION the interest of justice.
8. Appeal from orders
dismissing case The RTC should have
taken cognizance of the case. If the
without trial; lack of
case is tried on the merits by the
jurisdiction. If an Municipal Court without
appeal is taken from jurisdiction over the subject
an order of the lower matter, the RTC on appeal may no
court dismissing the longer dismiss the case if it has
case without a trial on original jurisdiction thereof.
the merits, the Moreover, the RTC shall no longer
try the case on the merits, but shall
Regional Trial Court
decide the case on the basis of the
may affirm or reverse evidence presented in the lower
it, as the case may be. court, without prejudice to the
In case of affirmance admission of the amended
and the ground of pleadings and additional evidence
dismissal is lack of in the interest of justice.[19]
jurisdiction over the
subject matter, the
Regional Trial Court, WHEREFORE, the petition
if it has jurisdiction
thereover, shall try the is DENIED. The Decision of the Court of Appeals
case on the merits as
dated June 30, 2005 in CA-G.R. SP No. 73857
if the case was
originally filed with it. ordering the remand of Civil Case No. Br. 20-1194
In case of reversal,
the case shall be to the Regional Trial Court of Cauayan, Isabela,
remanded for further Branch 20, for further proceedings, is AFFIRMED.
proceedings.
No costs.
If the case was SO ORDERED.
tried on the merits by
the lower court
without jurisdiction
over the subject
matter, the Regional
Trial Court on appeal
shall not dismiss the
case if it has original
jurisdiction thereof,
but shall decide the
case in accordance
Planters Products v. Fertiphil GR 166006 Mar 14,
2008
DECISION
REYES, R.T., J.:
THE Regional Trial Courts (RTC) have the
authority and jurisdiction to consider the
constitutionality of statutes, executive orders,
presidential decrees and other issuances. The
Constitution vests that power not only in the
Supreme Court but in all Regional Trial Courts.
The principle is relevant in this petition for
[1]
review on certiorari of the Decision of the Court
of Appeals (CA) affirming with modification that
of
the RTC in Makati City,[2] finding petitioner
Planters Products, Inc. (PPI) liable to private
respondent Fertiphil Corporation (Fertiphil) for the
levies it paid under Letter of Instruction (LOI) No.
1465.
The Facts
Petitioner PPI and private respondent
Fertiphil are private corporations incorporated
under Philippine laws.[3] They are both engaged in
the importation and distribution of fertilizers,
pesticides and agricultural chemicals.
On June 3, 1985, then President Ferdinand
Marcos, exercising his legislative powers, issued
LOI No. 1465 which provided, among others, for
the imposition of a capital recovery component
(CRC) on the domestic sale of all grades of
fertilizers in the Philippines.[4] The LOI provides:
3. The Administrator of the Fertilizer
Pesticide Authority to include in its fertilizer pricing
formula a capital contribution component of not less
than P10 per bag. This capital contribution shall be
collected until adequate capital is raised to make
PPI viable. Such capital contribution shall be
applied by FPA to all domestic sales of fertilizers in
the Philippines.[5] (Underscoring supplied)
Pursuant to the LOI, Fertiphil paid P10 for
every bag of fertilizer it sold in the domestic market
to the Fertilizer and Pesticide Authority (FPA). FPA
then remitted the amount collected to the Far East
Bank and Trust Company, the depositary bank of
PPI. Fertiphil paid P6,689,144 to FPA from July 8,
1985 to January 24, 1986.[6]
After the 1986 Edsa Revolution, FPA
voluntarily stopped the imposition of the P10
levy. With the return of democracy, Fertiphil
demanded from PPI a refund of the amounts it paid
under LOI No. 1465, but PPI refused to accede to
the demand.[7]
Fertiphil filed a complaint for collection and
damages[8] against FPA and PPI with the RTC
in Makati. It questioned the constitutionality of LOI
No. 1465 for being unjust, unreasonable, oppressive,
invalid and an unlawful imposition that amounted to
a denial of due process of law.[9] Fertiphil alleged
that the LOI solely favored PPI, a privately owned
corporation, which used the proceeds to maintain its
monopoly of the fertilizer industry.
 violating the basic principle that taxes can only be
levied for public purpose, viz.:
In its Answer,[10] FPA, through the Solicitor
General, countered that the issuance of LOI No. It is apparent that the imposition of P10 per
1465 was a valid exercise of the police power of the fertilizer bag sold in the country by LOI 1465 is
State in ensuring the stability of the fertilizer purportedly in the exercise of the power of
industry in the country. It also averred that Fertiphil taxation. It is a settled principle that the power of
did not sustain any damage from the LOI because taxation by the state is plenary. Comprehensive and
the burden imposed by the levy fell on the ultimate supreme, the principal check upon its abuse resting
consumer, not the seller. in the responsibility of the members of the
legislature to their constituents. However, there are
RTC Disposition
two kinds of limitations on the power of taxation:
On November 20, 1991, the RTC rendered the inherent limitations and the constitutional
judgment in favor of Fertiphil, disposing as follows: limitations.
One of the inherent limitations is
WHEREFORE, in view of the foregoing, the
that a tax may be levied only for
Court hereby renders judgment in favor of the public purposes:
plaintiff and against the defendant Planters Product,
The power to tax can be
Inc., ordering the latter to pay the former: resorted to only for a constitutionally
valid public purpose. By the same
token, taxes may not be levied for
1) the sum purely private purposes, for building
of P6,698,144.00 up of private fortunes, or for the
with interest at redress of private wrongs. They
12% from the cannot be levied for the
time of judicial improvement of private property, or
demand; for the benefit, and promotion of
private enterprises, except where the
2) the sum aid is incident to the public benefit. It
of P100,000 as is well-settled principle of
attorneys fees; constitutional law that no general tax
can be levied except for the purpose
3) the cost of suit.
of raising money which is to be
SO ORDERED.[11] expended for public use. Funds
cannot be exacted under the guise of
Ruling that the imposition of taxation to promote a purpose that is
not of public interest. Without such
the P10 CRC was an exercise of the States inherent
limitation, the power to tax could be
power of taxation, the RTC invalidated the levy for exercised or employed as an
 authority to destroy the economy of
the people. A tax, however, is not
held void on the ground of want of
public interest unless the want of
such interest is clear. (71 Am. Jur. pp.
371-372)
appeal with the RTC but it failed to pay the
requisite appeal docket fee. In a separate but related
proceeding, this Court[14] allowed the appeal of PPI
and remanded the case to the CA for proper
disposition.

In the case at bar, the plaintiff paid CA Decision

the amount of P6,698,144.00 to the
Fertilizer and Pesticide Authority On November 28, 2003, the CA handed down its
pursuant to the P10 per bag of
decision affirming with modification that of
fertilizer sold imposition under LOI
1465 which, in turn, remitted the the RTC, with the following fallo:
amount to the defendant Planters
Products, Inc. thru the latters IN VIEW OF ALL THE FOREGOING, the
depository bank, Far East Bank and decision appealed from is
Trust Co. Thus, by virtue of LOI
1465 the plaintiff, Fertiphil hereby AFFIRMED, subject to
Corporation, which is a private the MODIFICATION that the award of attorneys
domestic corporation, became poorer
fees is hereby DELETED.[15]
by the amount of P6,698,144.00 and
the defendant, Planters Product, Inc.,
In affirming the RTC decision, the CA ruled
another private domestic corporation,
became richer by the amount that the lis mota of the complaint for collection was
of P6,698,144.00.
the constitutionality of LOI No. 1465, thus:
Tested by the standards of
constitutionality as set forth in the The question then is whether it was proper
afore-quoted jurisprudence, it is for the trial court to exercise its power to judicially
quite evident that LOI 1465 insofar
as it imposes the amount of P10 per determine the constitutionality of the subject statute
fertilizer bag sold in the country and in the instant case.
orders that the said amount should go
As a rule, where the controversy can
to the defendant Planters Product,
be settled on other grounds, the
Inc. is unlawful because it violates
courts will not resolve the
the mandate that a tax can be levied
constitutionality of a law (Lim v.
only for a public purpose and not to
Pacquing, 240 SCRA 649
benefit, aid and promote a private
[1995]). The policy of the courts is to
enterprise such as Planters Product,
avoid ruling on constitutional
Inc.[12]
questions and to presume that the
acts of political departments are
PPI moved for reconsideration but its
valid, absent a clear and
motion was denied.[13] PPI then filed a notice of unmistakable showing to the
contrary.
 However, the courts are not
precluded from exercising such
power when the following requisites
are obtaining in a controversy before
it: First, there must be before the
court an actual case calling for the
exercise of judicial review. Second,
the question must be ripe for
adjudication. Third, the person
challenging the validity of the act
must have standing to
challenge. Fourth, the question of
constitutionality must have been
raised at the earliest opportunity; and
lastly, the issue of constitutionality
must be the very lis mota of the case
(Integrated Bar of the Philippines v.
Zamora, 338 SCRA 81 [2000]).
Indisputably, the present case was primarily
instituted for collection and
damages. However, a perusal of the
complaint also reveals
that the instant action is founded on the
claim that the levy imposed was an unlawful
and unconstitutional special
assessment. Consequently, the requisite that
the constitutionality of the law in question
be the very lis mota of the case is present,
making it proper for the trial court to rule on
the constitutionality of LOI 1465.[16]
The CA held that even on the assumption that LOI
No. 1465 was issued under the police power of the
state, it is still unconstitutional because it did not
promote public welfare.The CA explained:
In declaring LOI 1465
unconstitutional, the trial court held
that the levy imposed under the said
law was an invalid exercise of the
States power of taxation inasmuch
as it violated the inherent and
constitutional prescription that taxes
be levied only for public purposes. It
reasoned out that the amount
collected under the levy was remitted
to the depository bank of PPI, which
the latter used to advance its private
interest.
On the other hand, appellant submits
that the subject statutes passage was
a valid exercise of police power. In
addition, it disputes the court a quos
findings arguing that the collections
under LOI 1465 was for the benefit
of Planters Foundation, Incorporated
(PFI), a foundation created by law to
hold in trust for millions of farmers,
the stock ownership of PPI.
Of the three fundamental powers of
the State, the exercise of police
power has been characterized as the
most essential, insistent and the least
limitable of powers, extending as it
does to all the great public needs. It
may be exercised as long as the
activity or the property sought to be
regulated has some relevance to
public welfare (Constitutional Law,
by Isagani A. Cruz, p. 38, 1995
Edition).
Vast as the power is, however, it
must be exercised within the limits
set by the Constitution, which
requires the concurrence of a lawful
subject and a lawful method. Thus,
our courts have laid down the test to
determine the validity of a police
measure as follows: (1) the interests
of the public generally, as
distinguished from those of a
particular class, requires its exercise;
and (2) the means employed are
reasonably necessary for the
accomplishment of the purpose and
The CA did not accept PPIs claim that the levy
not unduly oppressive upon
individuals (National Development imposed under LOI No. 1465 was for the benefit of
Company v. Philippine Veterans Planters Foundation, Inc., a foundation created to
Bank, 192 SCRA 257 [1990]).
hold in trust the stock ownership of PPI. The CA
It is upon applying this established
stated:
tests that We sustain the trial courts
holding LOI 1465
Appellant next claims that the collections
unconstitutional. To be sure,
ensuring the continued supply and under LOI 1465 was for the benefit of Planters
distribution of fertilizer in the
Foundation, Incorporated (PFI), a foundation
country is an undertaking imbued
with public interest. However, the created by law to hold in trust for millions of
method by which LOI 1465 sought farmers, the stock ownership of PFI on the strength
to achieve this is by no means a
measure that will promote the public of Letter of Undertaking (LOU) issued by then
welfare. The governments Prime Minister Cesar Virata on April 18, 1985 and
commitment to support the
affirmed by the Secretary of Justice in an Opinion
successful rehabilitation and
continued viability of PPI, a private dated October 12, 1987, to wit:
corporation, is an unmistakable
2. Upon the effective date of
attempt to mask the subject statutes
this Letter of Undertaking, the
impartiality. There is no way to treat
Republic shall cause FPA to include
the self-interest of a favored entity,
in its fertilizer pricing formula a
like PPI, as identical with the general
capital recovery component, the
interest of the countrys farmers or
proceeds of which will be used
even the Filipino people in
initially for the purpose of funding
general. Well to stress, substantive
the unpaid portion of the outstanding
due process exacts fairness and equal
capital stock of Planters presently
protection disallows distinction
held in trust by Planters Foundation,
where none is needed. When a
Inc. (Planters Foundation), which
statutes public purpose is spoiled by
unpaid capital is estimated at
private interest, the use of police
approximately P206 million (subject
power becomes a travesty which
to validation by Planters and Planters
must be struck down for being an
Foundation) (such unpaid portion of
arbitrary exercise of government
the outstanding capital stock of
power. To rule in favor of appellant
Planters being hereafter referred to
would contravene the general
as the Unpaid Capital), and
principle that revenues derived from
subsequently for such capital
taxes cannot be used for purely
increases as may be required for the
private purposes or for the exclusive
continuing viability of Planters.
benefit of private individuals.[17]
The capital recovery
component shall be in
the minimum amount until payment in full
of P10 per bag, which of (a) the Unpaid
will be added to the Capital and/or (b) any
price of all domestic shortfall in the
sales of fertilizer in payment of the
the Philippines by any Subsidy Receivables,
importer and/or (c) any carrying cost
fertilizer mother accruing from the
company. In this date hereof on the
connection, the amounts which may
Republic hereby be outstanding from
acknowledges that the time to time of the
advances by Planters Unpaid Capital and/or
to Planters the Subsidy
Foundation which Receivables and (d)
were applied to the the capital increases
payment of the contemplated in
Planters shares now paragraph 2
held in trust by hereof. For the
Planters Foundation, purpose of the
have been assigned to, foregoing clause (c),
among others, the the carrying cost shall
Creditors. Accordingl be at such rate as will
y, the Republic, represent the full and
through FPA, hereby reasonable cost to
agrees to deposit the Planters of servicing
proceeds of the its debts, taking into
capital recovery account both its peso
component in the and foreign currency-
special trust account denominated
designated in the obligations. (Records,
notice dated April 2, pp. 42-43)
1985, addressed by
counsel for the
Creditors to Planters Appellants proposition is open to
Foundation. Such question, to say the least. The LOU
proceeds shall be issued by then Prime Minister Virata
deposited by FPA on taken together with the Justice
or before the 15th day Secretarys Opinion does not
of each month. preponderantly demonstrate that the
The capital recovery collections made were held in trust in
component shall favor of millions of
continue to be farmers. Unfortunately for appellant,
charged and collected in the absence of sufficient evidence
to establish its claims, this Court is
 constrained to rely on what is TRUST FOR MILLIONS OF
explicitly provided in LOI 1465 that FARMERS THEIR STOCK
one of the primary aims in imposing OWNERSHIP IN
the levy is to support the successful PPI CONSTITUTES A VALID
rehabilitation and continued viability LEGISLATION PURSUANT TO
of PPI.[18] THE EXERCISE OF
TAXATION AND POLICE
PPI moved for reconsideration but its POWER FOR PUBLIC PURPOSES.

motion was denied.[19] It then filed the present III

petition with this Court. THE AMOUNT COLLECTED
UNDER THE CAPITAL
Issues RECOVERY COMPONENT WAS
REMITTED TO THE
Petitioner PPI raises four issues for Our GOVERNMENT, AND BECAME
consideration, viz.: GOVERNMENT FUNDS
PURSUANT TO AN
I EFFECTIVE AND VALIDLY
ENACTED LAW WHICH
THE CONSTITUTIONALITY OF
IMPOSED
LOI 1465 CANNOT BE
DUTIES AND CONFERRED
COLLATERALLY
RIGHTS BY VIRTUE OF THE
ATTACKED AND BE
PRINCIPLE OF
DECREED VIA A DEFAULT
OPERATIVE FACT PRIOR TO
JUDGMENT IN A CASE FILED
ANY DECLARATION OF
FOR
UNCONSTITUTIONALITY OF
COLLECTION AND DAMAGES
LOI 1465.
WHERE THE ISSUE OF
CONSTITUTIONALITY IS NOT IV
THE VERY LIS MOTA OF THE
CASE. NEITHER CAN LOI 1465 THE PRINCIPLE OF UNJUST
BE CHALLENGED BY ANY VEXATION (SHOULD BE
PERSON OR ENTITY ENRICHMENT) FINDS NO
WHICH HAS NO STANDING TO APPLICATION IN THE INSTANT
DO SO. CASE.[20] (Underscoring supplied)

II
Our Ruling
LOI 1465, BEING A LAW
IMPLEMENTED FOR THE We shall first tackle the procedural issues
PURPOSE OF ASSURING THE of locus standi and the jurisdiction of the RTC to
FERTILIZER
SUPPLY AND DISTRIBUTION IN resolve constitutional issues.
THE COUNTRY, AND FOR
BENEFITING A FOUNDATION
CREATED BY LAW TO HOLD IN
Fertiphil has locus standi because it suffered
direct injury; doctrine of standing is a mere
procedural technicality which may be waived.
PPI argues that Fertiphil has no locus
standi to question the constitutionality of LOI No.
1465 because it does not have a personal and
substantial interest in the case or will sustain direct
injury as a result of its enforcement.[21] It asserts
that Fertiphil did not suffer any damage from
the CRC imposition because incidence of the levy
fell on the ultimate consumer or the farmers
themselves, not on the seller fertilizer company.[22]
We cannot agree. The doctrine of locus
standi or the right of appearance in a court of justice
has been adequately discussed by this Court in a
catena of cases. Succinctly put, the doctrine requires
a litigant to have a material interest in the outcome
of a case. In private suits, locus standi requires a
litigant to be a real party in interest, which is
defined as the
party who stands to be benefited or injured by the
judgment in the suit or the party entitled to the
avails of the suit.[23]
In public suits, this Court recognizes the
difficulty of applying the doctrine especially
when plaintiff asserts a public right on behalf of the
general public because of conflicting public policy
issues. [24] On one end, there is the right of the
ordinary citizen to petition the courts to be freed
from unlawful government intrusion and illegal
official action. At the other end, there is the public
policy precluding excessive judicial interference in
official acts, which may unnecessarily hinder the
delivery of basic public services.
In this jurisdiction, We have adopted the
direct injury test to determine locus standi in public
suits. In People v. Vera,[25] it was held that a person
who impugns the validity of a statute must have a
personal and substantial interest in the case such
that he has sustained, or will sustain direct injury as
a result. The direct injury test in public suits is
similar to the real party in interest rule for private
suits under Section 2, Rule 3 of the 1997 Rules of
Civil Procedure.[26]
Recognizing that a strict application of the
direct injury test may hamper public interest, this
Court relaxed the requirement in cases of
transcendental importance or with far reaching
implications. Being a mere procedural technicality,
it has also been held that locus standi may be
waived in the public interest.[27]
Whether or not the complaint for collection
is characterized as a private or public suit, Fertiphil
has locus standi to file it. Fertiphil suffered a direct
injury from the enforcement of LOI No. 1465. It
was required, and it did pay, the P10 levy imposed
for every bag of fertilizer sold on the domestic
market. It may be true that Fertiphil has passed
some or all of the levy to the ultimate consumer, but
that does not disqualify it from attacking the
constitutionality of the LOI or from seeking a
refund. As seller, it bore the ultimate burden of
paying the levy. It faced the possibility of severe
sanctions for failure to pay the levy. The fact of
payment is sufficient injury to Fertiphil.
Moreover, Fertiphil suffered harm from the
enforcement of the LOI because it was compelled to
factor in its product the levy. The levy certainly
rendered the fertilizer products of Fertiphil and
other domestic sellers much more expensive. The
harm to their business consists not only in fewer
clients because of the increased price, but also in
adopting alternative corporate strategies to meet the
demands of LOI No. 1465. Fertiphil and other
fertilizer sellers may have shouldered all or part of
the levy just to be competitive in the market. The
harm occasioned on the business of Fertiphil is
sufficient injury for purposes of locus standi.
Even assuming arguendo that there is no
direct injury, We find that the liberal policy
consistently adopted by this Court on locus
standi must apply. The issues raised by Fertiphil are
of paramount public importance. It involves not
only the constitutionality of a tax law but, more
importantly, the use of taxes for public
purpose. Former President Marcos issued LOI No.
1465 with the intention of rehabilitating an ailing
private company. This is clear from the text of the
LOI. PPI is expressly named in the LOI as the direct
beneficiary of the levy. Worse, the levy was made
dependent and conditional upon PPI becoming
financially viable. The LOI provided that the capital
contribution shall be collected until adequate
capital is raised to make PPI viable.
The constitutionality of the levy is already in
doubt on a plain reading of the statute. It is Our
constitutional duty to squarely resolve the issue as
the final arbiter of all justiciable controversies. The
doctrine of standing, being a mere procedural
technicality, should be waived, if at all, to
adequately thresh out an important constitutional
issue.
RTC may resolve constitutional issues; the
constitutional issue was adequately raised in the
complaint; it is the lis mota of the case.
PPI insists that the RTC and the CA erred in
ruling on the constitutionality of the LOI. It asserts
that the constitutionality of the LOI cannot be
collaterally attacked in a complaint for
collection.[28] Alternatively, the resolution of the
constitutional issue is not necessary for a
determination of the complaint for collection.[29]
Fertiphil counters that the constitutionality
of the LOI was adequately pleaded in its
complaint. It claims that the constitutionality of LOI
No. 1465 is the very lis mota of the case because the
trial court cannot determine its claim without
resolving the issue.[30]
It is settled that the RTC has jurisdiction to
resolve the constitutionality of a statute, presidential
decree or an executive order. This is clear from presidential decree, or executive order. The
Section 5, Article VIII of the 1987 Constitution, Constitution vests the power of judicial review or
which provides: the power to declare a law, treaty, international or
executive agreement, presidential decree, order,
SECTION 5. The Supreme Court shall have
instruction, ordinance, or regulation not only in this
the following powers:
Court, but in all Regional Trial Courts.[32]
xxxx
In the recent case of Equi-Asia Placement,
Inc. v. Department of Foreign Affairs,[33] this Court
(2) Review, revise, reverse,
modify, or affirm on appeal reiterated:
or certiorari, as the law or the Rules
of Court may provide, final There is no denying that regular courts have
judgments and orders of lower jurisdiction over cases involving the validity or
courts in:
constitutionality of a rule or regulation issued by
administrative agencies. Such jurisdiction, however,
(a) All cases is not limited to the Court of Appeals or to this
in which
the constitutionality Court alone for even the regional trial courts can
or validity of take cognizance of actions assailing a specific rule
any treaty,
or set of rules promulgated by administrative
international or
executive agreement, bodies. Indeed, the Constitution vests the power of
law, presidential
judicial review or the power to declare a law, treaty,
decree,
proclamation, order, international or executive agreement, presidential
instruction, ordinance, decree, order, instruction, ordinance, or regulation
or regulation is in
question. in the courts, including the regional trial courts.[34]
(Underscoring
supplied) Judicial review of official acts on the ground
of unconstitutionality may be sought or availed of
[31]
In Mirasol v. Court of Appeals, this Court through any of the actions cognizable by courts of
recognized the power of the RTC to resolve justice, not necessarily in a suit for declaratory
constitutional issues, thus: relief. Such review may be had in criminal actions,

On the first issue. It is settled that Regional as in People v. Ferrer[35] involving the

Trial Courts have the authority and jurisdiction to constitutionality of the now defunct Anti-

consider the constitutionality of a statute, Subversion law, or in ordinary actions, as

 maximizing
in Krivenko v. Register of Deeds[36] involving the
management and
constitutionality of laws prohibiting aliens from marketing skills to
acquiring public lands. The constitutional issue, remain viable;

however, (a) must be properly raised and presented xxxx

in the case, and (b) its resolution is necessary to a (e) It was a

determination of the case, i.e., the issue of glaring example of
crony capitalism, a
constitutionality must be the very lis forced program
motapresented.[37] through which the PPI,
having been
Contrary to PPIs claim, the constitutionality presumptuously
masqueraded as the
of LOI No. 1465 was properly and adequately fertilizer industry
raised in the complaint for collection filed with itself, was the sole
and anointed
the RTC. The pertinent portions of the complaint
beneficiary;
allege:
7. The CRC was an
6. The CRC of P10 per bag levied unlawful; and unconstitutional
special assessment and its imposition
under LOI 1465 on domestic sales of all grades of is tantamount to illegal exaction
fertilizer in the Philippines, is unlawful, unjust, amounting to a denial of due process
since the persons of entities which
uncalled for, unreasonable, inequitable and
had to bear the burden of paying
oppressive because: the CRC derived no benefit
therefrom; that on the contrary it was
xxxx
used by PPI in trying to regain its
former despicable monopoly of the
fertilizer industry to the detriment of
(c) It favors other distributors and
only one private [38]
importers. (Underscoring
domestic corporation, supplied)
i.e., defendant PPPI,
and imposed at the
The constitutionality of LOI No. 1465 is
expense and
disadvantage of the also the very lis mota of the complaint for
other fertilizer collection. Fertiphil filed the complaint to compel
importers/distributors
who were themselves PPI to refund the levies paid under the statute on the
in tight business ground that the law imposing the levy is
situation and were
unconstitutional. The thesis is that an
then exerting all
efforts and unconstitutional law is void. It has no legal
effect. Being void, Fertiphil had no legal obligation did not promote the general welfare of the people or
to pay the levy. Necessarily, all levies duly paid public interest.
pursuant to an unconstitutional law should be
Police power and the power of taxation are
refunded under the civil code principle against
inherent powers of the State. These powers are
unjust enrichment. The refund is a mere
distinct and have different tests for validity. Police
consequence of the law being declared
power is the power of the State to enact legislation
unconstitutional. The RTC surely cannot order PPI
that may interfere with personal liberty or property
to refund Fertiphil if it does not declare the LOI
in order to promote the general welfare,[39] while the
unconstitutional. It is the unconstitutionality of the
power of taxation is the power to levy taxes to be
LOI which triggers the refund. The issue of
used for public purpose. The main purpose of police
constitutionality is the very lis mota of the
power is the regulation of a behavior or conduct,
complaint with the RTC.
while taxation is revenue generation. The lawful

The P10 levy under LOI No. 1465 is an exercise of subjects and lawful means tests are used to
the power of taxation. determine the validity of a law enacted under the
At any rate, the Court holds that police power.[40] The power of taxation, on the other
the RTC and the CA did not err in ruling against the hand, is circumscribed by inherent and
constitutionality of the LOI. constitutional limitations.

PPI insists that LOI No. 1465 is a valid
exercise either of the police power or the power of
taxation. It claims that the LOI was implemented
for the purpose of assuring the fertilizer supply and
distribution in the country and for benefiting a
foundation created by law to hold in trust for
millions of farmers their stock ownership in PPI.
Fertiphil counters that the
unconstitutional because it was enacted to give
benefit to a private company. The levy was imposed
to pay the corporate debt of PPI. Fertiphil also
argues that, even if the LOI is enacted under the
police power, it is still unconstitutional because it
We agree with the RTC that the imposition
of the levy was an exercise by the State of its
taxation power. While it is true that the power of
taxation can be used as an implement of police
power,[41] the primary purpose of the levy is
revenue generation. If the purpose is primarily
revenue, or if revenue is, at least, one of the real and
substantial purposes, then the exaction is properly
LOI is
called a tax.[42]
In Philippine Airlines, Inc. v. Edu,[43] it was
held that the imposition of a vehicle registration fee
is not an exercise by the State of its police power,
but of its taxation power, thus:
 It is clear from the provisions of Section 73
of Commonwealth Act 123 and Section 61 of the
Land Transportation and Traffic Code that the
legislative intent and purpose behind the law
requiring owners of vehicles to pay for their
registration is mainly to raise funds for the
construction and maintenance of highways and to a
much lesser degree, pay for the operating expenses
of the administering agency. x x x Fees may be
properly regarded as taxes even though they also
serve as an instrument of regulation.
Taxation may be made the
implement of the state's police power (Lutz v.
Araneta, 98 Phil. 148). If the purpose is
primarily revenue, or if revenue is, at least,
one of the real and substantial purposes, then
the exaction is properly called a tax. Such is
the case of motor vehicle registration
fees. The same provision appears as Section
59(b) in the Land Transportation Code.It is
patent therefrom that the legislators had in
mind a regulatory tax as the law refers to the
imposition on the registration, operation or
ownership of a motor vehicle as a tax or
fee. x x x Simply put, if the exaction under
Rep. Act 4136 were merely a regulatory fee,
the imposition in Rep. Act 5448 need not be
an additional tax. Rep. Act 4136 also speaks
of other fees such as the special permit fees
for certain types of motor vehicles (Sec. 10)
and additional fees for change of registration
(Sec. 11). These are not to be understood as
taxes because such fees are very minimal to
be revenue-raising. Thus, they are not
mentioned by Sec. 59(b) of the Code as
taxes like the motor vehicle registration fee
and chauffeurs license fee. Such fees are to
go into the expenditures of the Land
Transportation Commission as provided for
in the last proviso of Sec.
61.[44] (Underscoring supplied)
The P10 levy under LOI No. 1465 is too
excessive to serve a mere regulatory purpose. The
levy, no doubt, was a big burden on the seller or the
ultimate consumer. It increased the price of a bag of
fertilizer by as much as five percent.[45] A plain
reading of the LOI also supports the conclusion that
the levy was for revenue generation. The LOI
expressly provided that the levy was
imposed until adequate capital is raised to make
PPI viable.
Taxes are exacted only for a public purpose.
The P10 levy is unconstitutional because it was
not for a public purpose. The levy was imposed
to give undue benefit to PPI.
An inherent limitation on the power of
taxation is public purpose. Taxes are exacted only
for a public purpose. They cannot be used for purely
private purposes or for the exclusive benefit of
private persons.[46] The reason for this is
simple. The power to tax exists for the general
welfare; hence, implicit in its power is the limitation private enterprise, that law will not satisfy the
that it should be used only for a public purpose. It requirement of public purpose.
would be a robbery for the State to tax its citizens
The purpose of a law is evident from its text
and use the funds generated for a private
or inferable from other secondary sources. Here,
purpose. As an old United States case bluntly put it:
We agree with the RTC and that CA that the levy
To lay with one hand, the power of the government
imposed under LOI No. 1465 was not for a public
on the property of the citizen, and with the other to
purpose.
bestow it upon favored individuals to aid private
enterprises and build up private fortunes, is First, the LOI expressly provided that the

nonetheless a robbery because it is done under the levy be imposed to benefit PPI, a private

forms of law and is called taxation.[47] company. The purpose is explicit from Clause 3 of
the law, thus:
The term public purpose is not defined. It is
an elastic concept that can be hammered to fit 3. The Administrator of the Fertilizer

modern standards. Jurisprudence states that public Pesticide Authority to include in its fertilizer pricing

purpose should be given a broad interpretation. It formula a capital contribution component of not less

does not only pertain to those purposes which are than P10 per bag. This capital contribution shall be

traditionally viewed as essentially government collected until adequate capital is raised to make

functions, such as building roads and delivery of PPI viable. Such capital contribution shall be

basic services, but also includes those purposes applied by FPA to all domestic sales of fertilizers in

designed to promote social justice. Thus, public the Philippines.[48] (Underscoring supplied)

money may now be used for the relocation of illegal

It is a basic rule of statutory construction
settlers, low-cost housing and urban or agrarian
that the text of a statute should be given a literal
reform.
meaning. In this case, the text of the LOI is plain

While the categories of what may constitute that the levy was imposed in order to raise capital

a public purpose are continually expanding in light for PPI. The framers of the LOI did not even hide

of the expansion of government functions, the the insidious purpose of the law. They were cavalier

inherent requirement that taxes can only be exacted enough to name PPI as the ultimate beneficiary of

for a public purpose still stands. Public purpose is the taxes levied under the LOI. We find it utterly

the heart of a tax law. When a tax law is only a repulsive that a tax law would expressly name a

mask to exact funds from the public when its true private company as the ultimate beneficiary of the

intent is to give undue benefit and advantage to a

taxes to be levied from the public. This is a clear 1465. The pertinent portions of the letter of
case of crony capitalism. understanding read:

Second, the LOI provides that the imposition Republic of the Philippines
of the P10 levy was conditional and dependent upon Office of the Prime Minister
PPI becoming financially viable. This suggests that Manila
the levy was actually imposed to benefit PPI. The
LETTER OF UNDERTAKING
LOI notably does not fix a maximum amount when
May 18, 1985
PPI is deemed financially viable. Worse, the
TO: THE
liability of Fertiphil and other domestic sellers of
BANKING AND FINANCIAL
fertilizer to pay the levy is made indefinite. They INSTITUTIONS
are required to continuously pay the levy until LISTED IN ANNEX A HERETO
adequate capital is raised for PPI. WHICH ARE

CREDITORS (COLLECTIVELY,
Third, the RTC and the CA held that the
THE CREDITORS)
levies paid under the LOI were directly remitted and
OF PLANTERS PRODUCTS, INC.
deposited by FPA to Far East Bank and Trust (PLANTERS)
Company, the depositary bank of PPI.[49] This
Gentlemen:
proves that PPI benefited from the LOI. It is also
This has reference to Planters which
proves that the main purpose of the law was to give is the principal importer and
undue benefit and advantage to PPI. distributor of fertilizer, pesticides
and agricultural chemicals in the
Fourth, the levy was used to pay the Philippines. As regards Planters, the
Philippine Government confirms its
corporate debts of PPI. A reading of the Letter of
awareness of the following: (1)
Understanding[50] dated May 18, 1985 signed by that Planters has outstanding
obligations in foreign currency
then Prime Minister Cesar Virata reveals that PPI
and/or pesos, to the Creditors, (2)
was in deep financial problem because of its huge that Planters is currently
corporate debts. There were pending petitions for experiencing financial difficulties,
and (3) that there are presently
rehabilitation against PPI before the Securities and pending with the Securities and
Exchange Commission. The government guaranteed Exchange Commission of the
Philippines a petition filed at
payment of PPIs debts to its foreign creditors. To
Planters own behest for the
fund the payment, President Marcos issued LOI No. suspension of payment of all its
obligations, and a separate petition
filed by Manufacturers Hanover
Trust Company, Manila Offshore
Branch for the appointment of a
rehabilitation receiver for Planters.
In connection with the foregoing,
the Republic of the Philippines (the
Republic) confirms that it considers
and continues to consider Planters as
a major fertilizer distributor.
Accordingly, for and in
consideration of your expressed
willingness to consider and
participate in the effort to rehabilitate
Planters, the Republic hereby
manifests its full and unqualified
support of the successful
rehabilitation and continuing
viability of Planters, and to that end,
hereby binds and obligates itself to
the creditors and Planters, as follows:
xxxx
2. Upon the effective date of this
Letter of Undertaking, the Republic
shall cause FPA to include in its
fertilizer pricing formula a capital
recovery component, the proceeds of
which will be used initially for the
purpose of funding the unpaid
portion of the outstanding capital
stock of Planters presently held in
trust by Planters Foundation, Inc.
(Planters Foundation), which unpaid
capital is estimated at
approximately P206 million (subject
to validation by Planters and Planters
Foundation) such unpaid portion of
the outstanding capital stock of
Planters being hereafter referred to
as the Unpaid Capital), and
subsequently for such capital
increases as may be required for the
continuing viability of Planters.
xxxx
The capital recovery
component shall continue to be
charged and collected until payment
in full of (a) the Unpaid Capital
and/or (b) any shortfall in the
payment of the Subsidy Receivables,
(c) any carrying cost accruing from
the date hereof on the amounts which
may be outstanding from time to
time of the Unpaid Capital and/or the
Subsidy Receivables, and (d) the
capital increases contemplated in
paragraph 2 hereof. For the purpose
of the foregoing clause (c), the
carrying cost shall be at such rate as
will represent the full and reasonable
cost to Planters of servicing its debts,
taking into account both its peso and
foreign currency-denominated
obligations.
REPUBLIC OF THE PHILIPPINES
By:
(signed)
CESAR E. A. VIRATA
Prime Minister and Minister of Finance[51]
It is clear from the Letter of Understanding
that the levy was imposed precisely to pay the
corporate debts of PPI. We cannot agree with PPI
that the levy was imposed to ensure the stability of
the fertilizer industry in the country. The letter of
understanding and the plain text of the LOI clearly
indicate that the levy was exacted for the benefit of
a private corporation.
All told, the RTC and the CA did not err in
holding that the levy imposed under LOI No. 1465
was not for a public purpose. LOI No. 1465 failed
to comply with the public purpose requirement for statutes impartiality. There is no way to treat the
tax laws. self-interest of a favored entity, like PPI, as
The LOI is still unconstitutional even if enacted identical with the general interest of the countrys
under the police power; it did not promote
farmers or even the Filipino people in general. Well
public interest.
to stress, substantive due process exacts fairness and
Even if We consider LOI No. 1695 enacted
equal protection disallows distinction where none is
under the police power of the State, it would still be
needed. When a statutes public purpose is spoiled
invalid for failing to comply with the test of lawful
by private interest, the use of police power becomes
subjects and lawful means. Jurisprudence states the
a travesty which must be struck down for being an
test as follows: (1) the interest of the public
arbitrary exercise of government power. To rule in
generally, as distinguished from those of particular
favor of appellant would contravene the general
class, requires its exercise; and (2) the means
principle that revenues derived from taxes cannot be
employed are reasonably necessary for the
used for purely private purposes or for the exclusive
accomplishment of the purpose and not unduly
benefit of private individuals. (Underscoring
oppressive upon individuals.[52]
supplied)
For the same reasons as discussed, LOI No. 1695 is
The general rule is that an unconstitutional law
invalid because it did not promote public
is void; the doctrine of operative fact is
interest. The law was enacted to give undue
inapplicable.
advantage to a private corporation. We quote with
approval the CA ratiocination on this point, thus: PPI also argues that Fertiphil cannot seek a
refund even if LOI No. 1465 is declared
It is upon applying this established tests that
unconstitutional. It banks on the doctrine of
We sustain the trial courts holding LOI 1465
operative fact, which provides that an
unconstitutional. To be sure, ensuring the continued
unconstitutional law has an effect before being
supply and distribution of fertilizer in the country is
declared unconstitutional. PPI wants to retain the
an undertaking imbued with public
levies paid under LOI No. 1465 even if it is
interest. However, the method by which LOI 1465
subsequently declared to be unconstitutional.
sought to achieve this is by no means a measure that
will promote the public welfare. The governments We cannot agree. It is settled that no
commitment to support the successful rehabilitation question, issue or argument will be entertained on
and continued viability of PPI, a private corporation, appeal, unless it has been raised in the court a
is an unmistakable attempt to mask the subject quo.[53] PPI did not raise the applicability of the
doctrine of operative fact with the RTC and the
CA. It cannot belatedly raise the issue with Us in
order to extricate itself from the dire effects of an
unconstitutional law.
At any rate, We find the doctrine
inapplicable. The general rule is that an
unconstitutional law is void. It produces no rights,
imposes no duties and affords no protection. It has
no legal effect. It is, in legal contemplation,
inoperative as if it has not been passed.[54] Being
void, Fertiphil is not required to pay the levy. All
levies paid should be refunded in accordance with
the general civil code principle against unjust
enrichment. The general rule is supported by Article
7 of the Civil Code, which provides:
ART. 7. Laws are repealed only by
subsequent ones, and their violation or non-
observance shall not be excused by disuse or
custom or practice to the contrary.
When the courts declare a
law to be inconsistent with the
Constitution, the former shall be
void and the latter shall govern.
The doctrine of operative fact, as an
exception to the general rule, only applies as a
[55]
matter of equity and fair play. It nullifies the
effects of an unconstitutional law by recognizing
that the existence of a statute prior to a
determination of unconstitutionality is an operative
fact and may have consequences which cannot
always be ignored. The past cannot always be
erased by a new judicial declaration.[56]
The doctrine is applicable when a
declaration of unconstitutionality will impose an
undue burden on those who have relied on the
invalid law. Thus, it was applied to a criminal case
when a declaration of unconstitutionality would put
the accused in double jeopardy[57] or would put in
limbo the acts done by a municipality in reliance
upon a law creating it.[58]
Here, We do not find anything iniquitous in
ordering PPI to refund the amounts paid by Fertiphil
under LOI No. 1465. It unduly benefited from the
levy. It was proven during the trial that the levies
paid were remitted and deposited to its bank
account. Quite the reverse, it would be inequitable
and unjust not to order a refund. To do so would
unjustly enrich PPI at the expense of
Fertiphil. Article 22 of the Civil Code explicitly
provides that every person who, through an act of
performance by another comes into possession of
something at the expense of the latter without just
or legal ground shall return the same to him. We
cannot allow PPI to profit from an unconstitutional
law. Justice and equity dictate that PPI must refund
the amounts paid by Fertiphil.
WHEREFORE, the petition is DENIED. The
Court of Appeals Decision dated November 28,
2003 is AFFIRMED.
SO ORDERED.
Badillo v. CA GR 131903 June 26, 2008
shall not be closed or disposed of by the registered
DECISION owner without previous approval of the court.[4]
CARPIO, J.: Petitioners alleged that in gross violation of the
The Case
court order, del Rosario sold
an unsegregated portion of the road lot to his co-
This petition for certiorari[1] assails the 17
respondents Josefa Conejero (Conejero) and
September 1997 Decision[2] of the Court of Appeals
Ignacio Sonoron (Sonoron) without obtaining prior
in CA-G.R. CV No. 50035. The Court of Appeals
court approval. Del Rosario, Conejero,
dismissed the appeal filed by petitioners Oscar
and Sonoron then entered into a partition agreement
R. Badillo, Giovanni C. Ong, Edgar A. Ragasa,
to divide the road lot into four lots which resulted in
Rolando Sancada,
the partial cancellation of TCT No. RT-20895 and
and Dionisio Umbalin (petitioners) questioning the
the subsequent issuance of TCT Nos. 35899 and
5 June 1995 Order[3] of Branch 222 of the Regional
35100 in the name of Conejero, TCT No. 35101 in
Trial Court of Quezon City in Civil Case No. Q-91-
the name of delRosario, and TCT No. 35102 in the
10510 for Annulment of Documents with Prayer for
name of Sonoron.[5]
Issuance of Prohibitory and Mandatory Injunction
and Damages.
Petitioners stated that del Rosario sold TCT No.
35101 to Goldkey Development Corporation
The Facts
(Goldkey).[6]
Petitioners alleged that they are the
Petitioners alleged that the Register of
registered owners of several lots adjoining a road lot
Deeds violated the court order when it allowed the
known as Lot 369-A-29 or Apollo Street of
registration of the sales and the subsequent issuance
subdivision plan Psd-37971 (road lot). The road lot
of new titles without first obtaining judicial
is a short access road which connects petitioners
approval. Petitioners claimed that Goldkey had built
properties to the main road known as Road 20. The
cement fences on the lot, thus blocking the ingress
road lot is covered by Transfer Certificate of Title
and egress of petitioners.[7]
(TCT) No. RT-20895 (22682) and registered in the
Petitioners prayed that the sales made in
name of respondent Pedro del Rosario (del Rosario).
favor of Conejero, Sonoron, and Goldkey and the
Annotated at the back of TCT No. RT-20895 is a
partition of the road lot be declared void.[8]
court-ordered Entry No. 605/T-22655 which reads
as follows: It is hereby made of record that as per In its Comment, Goldkey alleged that the

order of the Court, the street lot covered by this title Housing and Land Use Regulatory Board (HLURB)
has exclusive jurisdiction over the cases mentioned
in Section 1 of Presidential Decree No. (PD)
1344.[9] Goldkey argued that the Court of Appeals
correctly dismissed petitioners appeal because
petitioners merely assigned an error involving a
pure question of law. Goldkey added that petitioners
are using the present petition as a substitute for an
already lost appeal since petitioners counsel had
received the decision on 17 October 1997 and the
present petition was posted only on 16 December
[10]
1997.
In May 1991, petitioners filed an initial complaint
with the Office of the Building Official (building
official) of Quezon City, docketed as Building Case
No. R-10-91-006 entitled Giovanni C. Ong, et al. v.
Manuel Chua (building case).[11] Petitioners, who
initiated the building case when Goldkey started
putting up fences in some portions of the property,
claimed that the parcel of land was a road lot.[12]
On 10 September 1991, the HLURB issued a
Development Permit to Goldkey allowing it to
develop the land into residential townhouse units.
The permit also mentioned that the project is
classified as Residential Townhouse Subdivision
and, as evaluated, the same is in accordance with
the Zoning Ordinance of Quezon City.[13]
On 4 November 1991,[14] petitioners filed a case for
Annulment of Title and Damages[15] with the
Regional Trial Court of Quezon City.
Subsequently, the building official
of Quezon City resolved the building case against
petitioners and this decision became final
and executory.[16] The ruling held that the property
is not a road lot but a residential lot.[17]
On 5 June 1995, Branch 222 of the Regional Trial
Court (trial court) of Quezon City issued an order
dismissing the case for lack of jurisdiction over the
subject matter.
The Ruling of the Trial Court
The trial court dismissed petitioners case for lack of
jurisdiction over the subject matter. The trial court
pointed out that there was a decision rendered by
the building official of Quezon City declaring the
disputed property a residential lot and not a road lot;
hence, the building official issued a building permit.
The HLURB also issued a permit for the
development of the land into a townhouse project.
Petitioners did not appeal both rulings. The trial
court stated that petitioners contention that the
property is a road lot had been rendered moot by the
finding of the building official which made the
contrary declaration. If petitioners had any
objection to the ruling, they should have appealed
the same to the Secretary of Public Works and
Highways as provided in Section 307 of Executive
Order No. (EO) 1096. The findings
administrative agencies which have expertise are
generally accorded not only respect but even
finality.
The trial court also stated that the property had been
approved by the HLURB for development into a
townhouse project. The subject land was therefore
removed from the jurisdiction of the regular courts.
The HLURBs decision was also not appealed to the
Office of the President as provided in Section 4 of
PD 1344 which gave the HLURB quasi-judicial
powers.
The Ruling of the Appellate Court
On 17 September 1997, the Court of
Appeals dismissed the appeal on the ground that it
has no jurisdiction to entertain the same. The
appellate court stated that the original and amended
complaints filed by petitioners were both premised
on the claim that the subject parcels of land were
subdivision road lots that were illegally converted
into residential lots and thereafter disposed
by del Rosario, the subdivision developer.
Therefore, petitioners complaints were filed for the
purpose of enforcing a contractual and statutory
obligation of del Rosario to preserve a subdivision
road lot for street purposes. As such, the agency
with jurisdiction is the HLURB, pursuant to the
provisions of PD 957, 1216, and 1344, EO 648
dated 7 February 1981 and EO 90 dated 17
of December 1986.
Further, the appellate court ruled that the error
assigned by petitioners involves the issue on what
law will apply to determine the jurisdiction of a
tribunal over the subject matter of the complaints.
Petitioners assigned error involves a pure question
of law; hence, petitioners appealed to the wrong
forum. Petitioners should have elevated their appeal
to the Supreme Court and not to the Court of
Appeals by way of a simple appeal.
Hence, this petition.
The Issues
Petitioners raise three issues in this petition:
1. Whether the appellate court acted
without or in excess of jurisdiction or
with grave abuse of discretion by
dismissing petitioners appeal on the
ground that jurisdiction does not lie with
the regular courts but with the HLURB;
2. Whether the Court of Appeals acted
without or in excess of jurisdiction or
grave abuse of discretion by dismissing
petitioners appeal on the ground that
petitioners did not assign any error of
fact; and
3. Whether a petition for certiorari under
Rule 65 of the 1997 Rules of Civil

Procedure is the proper remedy for
petitioners.
The Ruling of the Court
The petition lacks merit.
The HLURB is the sole regulatory body for housing
and land development.[18] The extent to which an
administrative agency may exercise its powers
depends on the provisions of the statute creating
such agency.[19] Courts will not determine a
controversy where the issues for resolution demand
the exercise of sound administrative discretion.[20]
empowering the NHA to issue writs of execution in
Jurisdiction Lies with the HLURB
the enforcement of its decisions. Section 1 of PD
1344 states:
PD 957,[21] otherwise known as The Subdivision
and Condominium Buyers Protective Decree,
granted the National Housing Authority (NHA) the
exclusive jurisdiction to regulate the real estate
business. The scope of the regulatory authority
lodged in the NHA is indicated in the second
whereas clause which states:
WHEREAS, numerous reports
reveal that many real estate
subdivision owners, developers,
operators, and/or sellers
have reneged on their
representations and obligations to
provide and maintain properly
subdivision roads, drainage,
sewerage, water systems, lighting
systems, and other similar basic
requirements, thus endangering the
health and safety of home and lot
buyers, (Emphasis supplied)
Thus, Section 22 of PD 957 provides:
Sec. 22. Alteration of Plans. No
owner or developer shall change or
alter the roads, open spaces,
infrastructures, facilities for public
use and/or other form of subdivision
development as contained in the
approved subdivision plan and/or
represented in its
advertisements, without the
permission of the
Authority and the written
conformity or consent of the duly
organized homeowners association,
or in the absence of the latter, by the
majority of the lot buyers in the
subdivision. (Emphasis supplied)
PD 1344[22] amended PD 957 by
Section 1. In the exercise of its
functions to regulate the real estate
trade and business and in addition to
its powers provided for in
Presidential Decree No. 957, the
National Housing Authority shall
have exclusive jurisdiction to hear
and decide cases of the following
nature:
a. Unsound real estate business
practices;
b. Claims involving refund and any
other claims filed by subdivision lot
or condominium unit buyer against
the project owner, developer, dealer,
broker or salesman; and
c. Cases involving specific
performance of contractual and
statutory obligations filed by
buyers of subdivision lot or
condominium unit against the
owner, developer, dealer, broker
or salesman. (Emphasis supplied)
 salesmen and cases of specific
Under EO 648,[23] the NHAs functions were performance. (Emphasis supplied)
transferred to the Human Settlement Regulatory
Commission. Section 8 of EO 648 provides: EO 90[24] renamed the Human Settlement
Regulatory Commission the Housing and Land Use
Section 8. Transfer of Functions. The Regulatory Board. The HLURB retained the
regulatory functions of the National
Housing Authority pursuant to regulatory and adjudicatory functions of the NHA.
Presidential Decrees No. 957, 1216,
1344 and other related laws are Clearly, the scope and limitation of
hereby transferred to the the HLURBs jurisdiction are well-defined.
Commission, together with such
applicable personnel, appropriation, The HLURBs jurisdiction to hear and decide cases
records, equipment and property
is determined by the nature of the cause of action,
necessary for the enforcement and
implementation of such functions. the subject matter or property involved, and the
Among these regulatory functions
are: (1) Regulation of the real estate parties.[25] In the present case, petitioners are the
trade and business; (2) Registration registered owners of several lots adjoining a
of subdivision lots and condominium
projects; (3) Issuance of license to subdivision road lotconnecting their properties to
sell subdivision lots and
condominium units in the registered the main road. Petitioners allege that the subdivision
units; (4) Approval of performance lot owners sold the road lot to a developer who is
bond and the suspension of license to
sell; (5) Registration of dealers, now constructing cement fences, thus blocking the
brokers and salesmen engaged in the
passageway from their lots to the main road. In sum,
business of selling subdivision lots
or condominium units; (6) petitioners are enforcing their statutory and
Revocation of registration of dealers,
brokers and salesmen; (7) Approval contractual rights against the subdivision owners.
or mortgage on any subdivision lot This is a specific performance case which falls
or condominium unit made by the
owner or developer; (8) Granting of under the HLURBs exclusive jurisdiction.
permits for the alteration of plans
and the extension of period for
completion of subdivision or In Osea v. Ambrosio,[26] the Court held that the
condominium projects; (9) Approval
of the conversion to other purposes provisions of PD 957 were intended to encompass
of roads and open spaces found
all questions relating to subdivisions. This intention
within the project which have been
donated to the city or municipality was aimed to provide for an appropriate
concerned; (10) Regulation of the
relationship between lessors and government agency, which is the HLURB, to which
lessees; and (11) Hear and all parties aggrieved in the implementation of
decide cases on unsound real estate
business practices; claims involving provisions and the enforcement of contractual rights
refund filed against project owners,
developers, dealers, brokers or with respect to said category of real estate may take
recourse.

Petitioners claim that respondents violated the
annotation at the back of TCT No. RT-20895 by
selling an unsegregated portion of the lot without
obtaining prior court approval.The date of entry of
this annotation is 18 August 1953. When PD 957,
PD 1344, and EO 648 were enacted in 1976, 1978,
and 1981, respectively, this annotation was
impliedly modified such that the conversion of the
road lot in the subdivision plan would fall under
the HLURBs jurisdiction pursuant to these laws.
Petitioners argue that they can file a specific
performance case to compel respondents to comply
with their contractual and statutory obligation to
maintain the road lot. However, petitioners can only
be granted complete relief if the subject sales are
declared void and the subsequent partition is
declared illegal. Petitioners further contend that the
HLURB, having only the jurisdiction to hear and
decide specific performance cases, can only compel
petitioners to file a case for annulment of title and
prosecute the action. Petitioners insist that in the
final analysis, a case for annulment of title would
still have to be filed with the ordinary courts.[27]
In Pea v. GSIS, [28]
the Court ruled that when
an administrative agency is conferred quasi-judicial
functions, all controversies relating to the subject
matter pertaining to its specialization are deemed to
be included within its jurisdiction. Split jurisdiction
is not favored.
As observed in C.T. Torres Enterprises, Inc.
v. Hibionada:[29]
The argument that only courts of
justice can adjudicate claims
resoluble under the provisions of the
Civil Code is out of step with the
fast-changing times. There are
hundreds of administrative bodies
now performing this function by
virtue of a valid authorization from
the legislature. This quasi-judicial
function, as it is called, is exercised
by them as an incident of the
principal power entrusted to them of
regulating certain activities falling
under their particular expertise.
In the Solid Homes case for example
the Court affirmed the competence
of the Housing and Land Use
Regulatory Board to award damages
although this is an essentially
judicial power exercisable ordinarily
only by the courts of justice. This
departure from the traditional
allocation of governmental powers is
justified by expediency, or the need
of the government to respond swiftly
and competently to the pressing
problems of the modern world.
Finally, in Cristobal v. Court of
Appeals,[30] we held that questions relating to non-
compliance with the requisites for conversion of
subdivision lots are properly cognizable by the
NHA, now the HLURB, pursuant to Section 22 of
PD 957 and not by the regular courts.
Appeal by Certiorari Involving Questions of
Law
Section 2, Rule 41 of the Rules of Court states:
Sec. 2. Mode of appeal.
(a) Ordinary Appeal. The appeal to
the Court of Appeals in cases
decided by the Regional Trial Court
in the exercise of its original
jurisdiction shall be taken by filing a
notice of appeal with the court which
rendered the judgment or final order
 appealed from and serving a copy raises questions of fact, questions of
thereof upon the adverse party. No law, or mixed questions of fact and
record on appeal shall be required law, shall be brought to the Court of
except in special proceedings and Appeals by filing a petition for
other cases of multiple or separate review under Rule 42. (Emphasis
appeals where the law or these Rules supplied)
so require. In such cases, the record
on appeal shall be filed and served in
like manner.
In First Bancorp, Inc. v. Court of Appeals,[32] this
(b) Petition for Review. The appeal Court also explained the two modes of appeal from
to the Court of Appeals in cases
decided by the Regional Trial Court a final order of the trial court in the exercise of its
in the exercise of its appellate
original jurisdiction:
jurisdiction shall be by petition for
review in accordance with Rule 42.
(1) by writ of error under Section
2(a), Rule 41 of the Rules of Court if
(c) Appeal by certiorari. In all cases
questions of fact or questions of fact
where only questions of law are
and law are raised or involved; or
raised or involved, the appeal shall
be to the Supreme Court by
(2) appeal by certiorari under
petition for review on certiorari in
Section 2(c), Rule 41, in relation to
accordance with Rule
Rule 45, where only questions of
45. (Emphasis supplied)
law are raised or involved.
(Emphasis supplied)

In Sevilleno v. Carilo,[31] citing Macawiwili Gold

Mining and Development Co., Inc. v. Court of In the present case, petitioners raised only one issue
Appeals, this Court summarized the rule on appeals: in their Appellants Brief whether the Honorable

(1) In all cases decided by
the RTC in the exercise of its
original jurisdiction, appeal may be
made to the Court of Appeals by
mere notice of appeal where the
appellant raises questions of fact or
mixed questions of fact and law;
(2) In all cases decided by
the RTC in the exercise of its
original jurisdiction where the
appellant raises only questions of
law, the appeal must be taken to
the Supreme Court on a petition
for review on certiorari under
Rule 45.
(3) All appeals from judgments
rendered by the RTC in the exercise
of its appellate jurisdiction,
regardless of whether the appellant
Trial Court a quo seriously erred in holding that it
has no jurisdiction over the subject matter of the
case when in fact it has already acquired jurisdiction
over the persons of the defendants and the subject
matter of the case.
The question on jurisdiction is undoubtedly
one of law. We have held that a question of law
exists when the doubt or controversy concerns the
correct application of law or jurisprudence to a
certain set of facts; or when the issue does not call
for an examination of the probative value of the
evidence presented, the truth or falsehood of facts
being admitted.[33] Consequently, it is not disputed
that the issue brought by petitioners to the Court of
Appeals involves solely the trial courts jurisdiction
over the subject matter of the case. The appellate
court can determine the issue raised without
reviewing or evaluating the evidence.
As petitioners appeal solely involves a question of
law, the appellate court did not err in dismissing the
appeal on the ground of lack of jurisdiction pursuant
to Section 2, Rule 50 of the Rules of Court which
provides:
Sec. 2. Dismissal of improper appeal
to the Court of Appeals. An appeal
under Rule 41 taken from the
Regional Trial Court to the Court
of Appeals raising only questions
of law shall be dismissed, issues
purely of law not
being reviewable by said court.
Similarly, an appeal by notice of
appeal instead of by petition for
review from the appellate judgment
of a Regional Trial Court shall be
dismissed.
An appeal erroneously taken to the
Court of Appeals shall not be
transferred to the appropriate court
but shall be dismissed outright.
(Emphasis supplied)
Rule 65 is not a remedy for lost appeal.
Petitioners should have directly taken their appeal
to this Court by filing a petition for review
on certiorari under Rule 45 and not an ordinary
appeal with the Court of Appeals under Rule 41 nor
a petition for certiorari with this Court under Rule
65.
As held in Balayan v. Acorda,[34] the special civil
action for certiorari is a limited form of review and
is a remedy of last recourse. It lies only where there
is no appeal or plain, speedy, and adequate remedy
in the ordinary course of law.
In the present case, petitioners chose the wrong
mode of appeal. Hence, the instant petition cannot
prevail since a petition for certiorari is not a
substitute for a lost appeal, especially if the loss or
lapse was an error in petitioners choice of remedy.
We have held in David v. Cordova[35] that:
A petition for certiorari cannot be a
substitute for an appeal from a lower
court decision. Where appeal is
available to the aggrieved party, the
action for certiorari will not be
entertained. The remedies of appeal
(including petitions for review) and
certiorari are mutually exclusive, not
alternate or successive. Hence,
certiorari is not and cannot be a
substitute for an appeal, especially
if ones own negligence or error in
ones 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 is available,
certiorari will not prosper, even if the
ground therefore is grave abuse of
discretion. (Emphasis supplied)
There were instances when the Court has
relaxed the rule on the special civil action
for certiorari as a substitute for failure to file a
timely petition for review on certiorari under Rule
45 such as where the application of this rule would
result in a manifest failure or miscarriage of
 Fort Bonifacio v Domingo GR 180765 Feb 27,
justice.[36] Although the Court has the discretion to
2009
treat a petition for certiorari as having been filed
DECISION
under Rule 45, there is nothing in the present case
CHICO-NAZARIO, J.:
to warrant a liberal application of the rules.
WHEREFORE, we DISMISS the petition.
Before this Court is a Petition for Review
We AFFIRM the 17 September 1997 Decision of
on Certiorari under Rule 45 of the Revised Rules of
the Court of Appeals. Costs against petitioners.
Court, filed by petitioner Fort Bonifacio
SO ORDERED.
Development Corporation, seeking to reverse and
set aside the Decision dated 19 July 2007[1] and the
Resolution dated 10 December 2007[2] of the Court
of Appeals in CA-G.R. SP No. 97731. The appellate
court, in its assailed Decision, affirmed the
Order[3] of the Regional Trial Court (RTC)
of Pasay City, Branch 109, in Civil Case No. 06-
2000-CFM, denying the Motion to Dismiss of
petitioner; and in its assailed Resolution, refused to
reconsider its decision.

Petitioner, a domestic corporation duly

organized under Philippine laws, is engaged in the
real estate development business. Respondent is the
assignee of L and M Maxco Specialist Engineering
Construction (LMM Construction) of its receivables
from petitioner.

On 5 July 2000, petitioner entered into a

Trade Contract with LMM Construction for partial
structural and architectural works on one of its
projects, the Bonifacio Ridge
Condominium. According to the said Contract,
petitioner had the right to withhold the retention
money equivalent to 5% of the contract price for a
period of one year after the completion of the
project. Retention money is a portion of the contract
price, set aside by the project owner, from all
approved billings and retained for a certain period
to guarantee the performance by the contractor of
all corrective works during the defect-liability
period.[4]
Due to the defect and delay in the work of
LMM Construction on the condominium project,
petitioner unilaterally terminated the Trade
Contract[5] and hired another contractor to finish the
rest of the work left undone by LMM
Construction. Despite the pre-termination of the
Trade Contract, petitioner was liable to pay LMM
Construction a fraction of the contract price in
proportion to the works already performed by the
latter.[6]
On 30 July 2004, petitioner received the
first Notice of Garnishment against the receivables
of LMM Construction issued by the Construction
Industry Arbitration Commission (CIAC) in
connection with CIAC Case No. 11-2002 filed by
Asia-Con Builders against LMM Construction,
wherein LMM Construction was adjudged liable to
Asia-Con Builders for the amount of P5,990,927.77.
On 30 April 2005, petitioner received a
letter dated 18 April 2005 from respondent
inquiring on the retention money supposedly due to
LMM Construction and informing petitioner that a
portion of the amount receivable by LMM
Construction therefrom was already assigned to him
as evidenced by the Deed of Assignment executed
by LMM Construction in respondents favor on 28
February 2005. LMM Construction assigned its
receivables from petitioner to respondent to settle
the alleged unpaid obligation of LMM Construction
to respondent amounting to P804,068.21.
Through its letter dated 11 October 2005,
addressed to respondent, petitioner acknowledged
that LMM Construction did have receivables still
with petitioner, consisting of the retention money;
but petitioner also advised respondent that the
retention money was not yet due and demandable
and may be ascertained only after the completion of
the corrective works undertaken by the new
contractor on the condominium project. Petitioner
also notified respondent that part of the receivables
was also being garnished by the other creditors of
LMM Construction.
Unsatisfied with the reply of petitioner,
respondent sent another letter dated 14 October
2005 asserting his ownership over a portion of the
retention money assigned to him and maintaining
that the amount thereof pertaining to him can no
longer be garnished to satisfy the obligations of
LMM Construction to other persons since it already
ceased to be the property of LMM Construction by
virtue of the Deed of Assignment. Attached to
respondents letter was the endorsement of LMM
Construction dated 17 January 2005 approving
respondents claim upon petitioner in the amount
of P804,068.21 chargeable against the retention
money that may be received by LMM Construction
from the petitioner.
Before respondents claim could be fully
addressed, petitioner, on 6 June 2005, received the
second Notice of Garnishment against the
receivables of LMM Construction, this time, issued
by the National Labor Relations Commission
(NLRC) to satisfy the liability of LMM
Construction to Nicolas Consigna in NLRC Case
No. 00-07-05483-2003.
On 13 July 2005, petitioner received an
Order of Delivery of Money issued by the Office of
the Clerk of Court and Ex-Officio Sheriff enforcing
the first Notice of Garnishment and directing
petitioner to deliver to Asia-Con Builders, through
the Sheriff, the amount of P5,990,227.77 belonging
to LMM Construction. In compliance with the said
Order, petitioner was able to deliver to Asia-Con
Builders on 22 July 2005 and on 11 August
2005 partial payments amounting to P1,170,601.81,
covered by the appropriate Acknowledgement
Receipts.
A third Notice of Garnishment against the
receivables of LMM Construction, already
accompanied by an Order of Delivery of Money,
both issued by the RTC of Makati, Branch 133, was
served upon petitioner on 26 January 2006. The
Order enjoined petitioner to deliver the amount
of P558,448.27 to the Sheriff to answer for the
favorable judgment obtained by Concrete Masters,
Inc. (Concrete Masters) against LMM Construction
in Civil Case No. 05-164.
Petitioner, in a letter dated 31 January 2006,
categorically denied respondents claim on the
retention money, reasoning that after the completion
of the rectification works on the condominium
project and satisfaction of the various garnishment
orders, there was no more left of the retention
money of LMM Construction.
It would appear, however, that petitioner
fully satisfied the first Notice of Garnishment in the
amount of P5,110,833.44 only on 31 January
2006,[7] the very the same date that it expressly
denied respondents claim. Also, petitioner complied
with the Notice of Garnishment and its
accompanying Order of Delivery of Money in the
amount of P558,448.27 on 8 February 2006, a
week after its denial of respondents claim.[8]
The foregoing events prompted respondent
to file a Complaint for collection of sum of money,
against both LMM Construction and petitioner,
docketed as Civil Case No. 06-0200-CFM before
the RTC of Pasay City, Branch 109.
Instead of filing an Answer, petitioner filed a
Motion to Dismiss Civil Case No. 06-0200-CFM on
the ground of lack of jurisdiction over the subject
matter. Petitioner argued that since respondent
merely stepped into the shoes of LMM Construction
as its assignor, it was the CIAC and not the regular
courts that had jurisdiction over the dispute as
provided in the Trade Contract.
On 6 June 2006, the RTC issued an Order denying
the Motion to Dismiss of petitioner, ruling that a
full-blown trial was necessary to determine which
one between LMM Construction and petitioner
should be made accountable for the sum due to
respondent.
Petitioner sought remedy from the Court of Appeals
by filing a Petition for Certiorari, docketed as CA-
G.R. SP No. 97731, challenging the RTC Order
dated 6 June 2006 for having been rendered by the
trial court with grave abuse of discretion.
In its Decision promulgated on 19 July 2007,
the Court of Appeals dismissed the Petition
for Certiorari and affirmed the 6 June 2006 Order
of the RTC denying the Motion to Dismiss of
petitioner. The appellate court rejected the argument
of petitioner that respondent, as the assignee of
LMM Construction, was bound by the stipulation in
the Trade Contract that disputes arising therefrom
should be brought before the CIAC. The Court of
Appeals declared that respondent was not privy, but
a third party, to the Trade Contract; and money
claims of third persons against the contractor,
developer, or owner of the project are lodged in the
regular courts and not in the CIAC.
Similarly ill-fated was petitioners Motion for
Reconsideration, which was denied by the Court of
Appeals in its Resolution dated 10 December 2007.
Petitioner now comes to this Court via this instant
Petition for Review on Certiorari praying for the
reversal of the 19 July 2007 Decision of the Court
of Appeals and 6 June 2006 Order of the RTC and,
ultimately, for the dismissal of Civil Case No. 06-
0200-CFM pending before the RTC.
For the resolution of this Court is the sole
issue of:
WHETHER OR NOT THE RTC
HAS JURISDICTION
OVER CIVIL CASE NO. 06-0200-
CFM.
The jurisdiction of CIAC is defined under
Executive Order No. 1008 as follows:
SECTION
4. Jurisdiction.The CIAC shall have
original and exclusive jurisdiction
over disputes arising from, or
connected with, contracts entered
into by parties involved in
construction in the Philippines,
whether the disputes arises before or
after the completion of the contract,
or after the abandonment or breach
thereof. These disputes may involve
government or private contracts. For
the Board to acquire jurisdiction, the
parties to a dispute must agree to
submit the same to voluntary
arbitration.
 The jurisdiction of the CIAC
may include but is not limited to limited to settling disputes arising among
violation of specifications for contractors, developers and/or owners of
materials and workmanship;
violation of the terms of agreement; construction projects. It does not include the
interpretation and/or application of
determination of who among the many creditors of
contractual provisions; amount of
damages and penalties; the contractor should enjoy preference in payment
commencement time and delays;
maintenance and defects; payment of its receivables from the developer/owner.
default of employer or contractor and
changes in contract cost.
It is an elementary rule of procedural law
Excluded from the coverage
of this law are disputes arising from that jurisdiction of the court over the subject matter
employer-employee relationships is determined by the allegations of the complaint,
which shall continue to be covered
by the Labor Code of the Philippines. irrespective of whether or not the plaintiff is entitled
to recover upon all or some of the claims asserted
therein. As a necessary consequence, the
In assailing the 19 July 2007 Decision of the
jurisdiction of the court cannot be made to depend
Court of Appeals, petitioner invoked Article 1311
upon the defenses set up in the answer or upon the
of the Civil Code on relativity of
motion to dismiss; for otherwise, the question of
contracts. According to said provision, all contracts
jurisdiction would almost entirely depend upon the
shall only take effect between the contracting
defendant. What determines the jurisdiction of the
parties, their assigns and heirs except when the
court is the nature of the action pleaded as
rights and obligations arising from the contract are
appearing from the allegations in the complaint. The
not transmissible.Petitioner argues that the appellate
averments therein and the character of the relief
court, in recognizing the existence of the Deed of
sought are the ones to be consulted.[9] Accordingly,
Assignment executed by LMM Construction -- in
the issues in the instant case can only be properly
favor of respondent -- of its receivables under the
resolved by an examination and evaluation of
Trade Contract, should have considered the
respondents allegations in his Complaint in Civil
concomitant result thereof, i.e., that respondent
Case No. 06-0200-CFM.
became a party to the Trade Contract and, therefore,
The allegations in respondents Complaint
bound by the arbitral clause therein.
are clear and simple: That LMM Construction had
Respondent counters that the CIAC is
an outstanding obligation to respondent in the
devoid of jurisdiction over money claims of third
amount of P804,068.21; that in payment of the said
persons against the contractor, developer or owner
amount, LMM Construction assigned to respondent
of the project. The jurisdiction of the CIAC is
its receivables from petitioner, which assignment
was properly made known to petitioner as early as
18 April 2005; that despite due notice of such
assignment, petitioner still refused to deliver the
amount assigned to respondent, giving preference,
instead, to the garnishing creditors of LMM
Construction; that at the time petitioner was notified
of the assignment, only one notice of garnishment,
the first Notice of Garnishment, was received by it;
that had petitioner properly recognized respondents
right as an assignee of a portion of the receivables
of LMM Construction, there could have been
sufficient residual amounts to satisfy respondents
claim; and that, uncertain over which one between
LMM Construction and petitioner he may resort to
for payment, respondent named them both as
defendants in Civil Case No. 06-0200-CFM. A
scrupulous examination of the aforementioned
allegations in respondents Complaint unveils the
fact that his cause of action springs not from a
violation of the provisions of the Trade Contract,
but from the non-payment of the monetary
obligation of LMM Construction to him.
A cause of action is a partys act or omission
that violates the rights of the other.[10] The right of
the respondent that was violated, prompting him to
initiate Civil Case No. 06-0200-CFM, was his right
to receive payment for the financial obligation
incurred by LMM Construction and to be preferred
over the other creditors of LMM Construction, a
right which pre-existed and, thus, was separate and
distinct from the right to payment of LMM
Construction under the Trade Contract.
Petitioners unceasing reliance on Article
1311[11] of the Civil Code on relativity of contracts
is unavailing. It is true that respondent, as the
assignee of the receivables of LMM Construction
from petitioner under the Trade Contract, merely
stepped into the shoes of LMM
Construction. However, it bears to emphasize that
the right of LMM Construction to such receivables
from petitioner under the Trade Contract is not even
in dispute in Civil Case No. 06-0200-CFM. What
respondent puts in issue before the RTC is the
purportedly arbitrary exercise of discretion by the
petitioner in giving preference to the claims of the
other creditors of LMM Construction over the
receivables of the latter.
It is encouraged that disputes arising from
construction contracts be referred first to the CIAC
for their arbitration and settlement, since such cases
would often require expertise and technical
knowledge in construction. Hence, some of the
matters over which the CIAC may exercise
jurisdiction, upon agreement of the parties to the
construction contract, include but [are] not limited
to violation of specifications for materials and
workmanship; violation of the terms of agreement;
interpretation and/or application of contractual
provisions; amount of damages and penalties;
commencement time and delays; maintenance and
defects; payment default of employer or contractor
and changes in contract cost.[12] Although the
jurisdiction of the CIAC is not limited to the afore-
stated enumeration, other issues which it could take
cognizance of must be of the same or a closely
related kind or species applying the principle
of ejusdem generis in statutory construction.
Respondents claim is not even construction-
related at all. Construction is defined as referring to
all on-site works on buildings or altering structures,
from land clearance through completion including
excavation, erection and assembly and installation
of components and equipment.[13] Petitioners
insistence on the application of the arbitration
clause of the Trade Contract to respondent is clearly
anchored on an erroneous premise that respondent
is seeking to enforce a right under the same. Again,
the right to the receivables of LMM Construction
from petitioner under the Trade Contract is not
being impugned herein. In fact, petitioner readily
conceded that LMM Construction still had
receivables due from petitioner, and respondent did
not even have to refer to a single provision in the
Trade Contract to assert his claim. What respondent
is demanding is that a portion of such receivables
amounting to P804,068.21 should have been paid to
him first before the other creditors of LMM
Construction, which, clearly, does not require the
CIACs expertise and technical knowledge of
construction.
The adjudication of Civil Case No. 06-0200-
CFM necessarily involves the application of
pertinent statutes and jurisprudence to matters such
as obligations, contracts of assignment, and, if
appropriate, even preference of credits, a task more
suited for a trial court to carry out after a full-blown
trial, than an arbitration body specifically devoted to
construction contracts.
This Court recognizes the laudable
objective of voluntary arbitration to provide a
speedy and inexpensive method of settling disputes
by allowing the parties to avoid the formalities,
delay, expense and aggravation which commonly
accompany ordinary litigation, especially litigation
which goes through the entire hierarchy of courts. It
cannot, however, altogether surrender to arbitration
those cases, such as the one at bar, the extant facts
of which plainly call for the exercise of jurisdiction
by the regular courts for their resolution.
WHEREFORE, premises considered, the
instant Petition is DENIED. The Decision dated 19
July 2007 and the Resolution dated 10 December
2007 of the Court of Appeals in CA-G.R. SP No.
97731 are hereby AFFIRMED in toto. Costs
against the petitioner.
SO ORDERED.
Land Bank v. Ralla Balista GR 164631 Jun 26, (RARAD-V) docketed as DCN D-05-
2009 02-VC-005.

On 07 July 2003, the RARAD-

Before the Court is a petition for review V issued a Decision, in favor of herein
on certiorari under Rule 45 of the Rules of Court private respondent, the fallo of which
reads:
filed by Land Bank of the Philippines (petitioner),
Wherefore, just
seeking to annul and set aside the May 26, 2004
compensation for the
Decision[1] and the July 28, 2004 Resolution[2] of subject areas is hereby
preliminarily fixed at
the Court of Appeals (CA) in CA-G.R. SP No. TWO MILLION
81096. EIGHT HUNDRED
NINETY-SIX
The antecedent facts and proceedings, as THOUSAND and
FOUR HUNDRED
narrated by the CA, are as follows: EIGHT & 91/100
(P2,896,408.91)
PESOS. Land Bank of
It appears that spouses Pablo the Philippines, Legas
Ralla and Carmen Munoz Ralla had pi City, is hereby
donated their eight (8) parcels of lot ordered to pay herein
located in Ligao, Albay to their petitioner said amount
daughter, Rene Ralla Belista, the pursuant to existing
herein private respondent. rules and guidelines,
minus the sum already
The eight (8) parcels of lot remitted per Order
were placed by the Department of dated January 2, 2003.
Agrarian Reform (DAR, for brevity)
under the coverage of the SO ORDERED.
Comprehensive Agrarian Reform
Program (Presidential Decree No. 27 As both parties interposed their
and Executive Order No. 228). respective motions for reconsideration,
Consequently, private respondent the RARAD-V eventually issued an
claimed payment of just compensation Order dated 8 October 2003, the
over said agricultural lands. decretal portion of which reads:
It further appears that the Wherefore, the
DAR's evaluation of the subject farms Decision dated July 7,
was only P227,582.58, 2003 is MODIFIED,
while petitioner Land Bank of fixing the valuation
the Philippines (LBP, for brevity) claim of petitioner
assessed the same at P317,259.31. herein with respect to
her due share in the
Believing that her lots were above lots to the tune
grossly underestimated, private of Two Million Five
respondent, on 11 November 2002, Hundred Forty
filed a Petition for Valuation and Thousand, Two
Payment of Just Compensation against Hundred Eleven and
petitioning bank before the DARAB- 58/100
Regional Adjudicator for Region V (P2,540,211.58)
 Pesos. Land Bank Leg PLAINTIFF'S
aspi City is hereby FAILURE TO
ordered to pay herein EXHAUST
petitioner said amount ADMINISTRATIVE
pursuant to existing REMEDIES.
rules and guidelines, II. WHETHER OR
minus the sum already NOT SECTIONS 5, 6,
paid per Order AND 7, RULE XIX
dated January 2, 2003. OF THE DARAB
2003 RULES OF
SO ORDERED. PROCEDURE
APPLY TO CASES
Aggrieved, petitioner Bank, FILED AND
on 28 October 2003, filed an original PENDING BEFORE
Petition for Determination of Just
THE DARAB OR
Compensation at the same sala of the ITS
RTC, docketed as Agrarian Case No. ADJUDICATORS
03-06. PRIOR TO ITS
EFFECTIVITY AND
The court a quo motu TO CASES FILED
propio dismissed the case when it AND PENDING
issued the herein first assailed Order WITH THE
dated 12 November 2003 for failure to SPECIAL
exhaust administrative remedies AGRARIAN
and/or comply with Sections 5, 6, and COURTS.[3]
7, Rule XIX, 2003 DARAB Rules of
Procedure.
On May 26, 2004, the CA rendered its
Petitioner LBP lodged a assailed Decision dismissing
Motion for Reconsideration
arguing, inter alia, that the DARAB the petition.
2003 Rules of Procedure does not
apply to SAC nor its precursor
DARAB Case and that the ground for The CA ruled that under Section 5, Rule XIX of the
dismissal of the case is not among the
2003 DARAB Rules of Procedure, an appeal from
instances when a court may dismiss a
case on its motion. the adjudicator's resolution shall be filed before the

As the court a quo denied its DARAB and not before the RTC; that petitioner's
Motion for Reconsideration in an filing of the case before the RTC without first
Order dated 28 November 2003,
petitioner LBP elevated the case seeking the intervention of the DARAB is violative
before the Tribunal through the
present Petition for Review, of the doctrine of non-exhaustion of administrative
theorizing: remedies. The CA found that petitioner's petition
I. WHETHER OR
NOT THE SAC A for determination of just compensation was filed in
QUO ERRED IN
the RTC on October 28, 2003 when the 2003
DISMISSING THE
CASE MOTU DARAB Rules of Procedure was already in
PROPIO ON THE
GROUND OF effect, i.e., on February 8, 2003, and under
 FILED BEFORE THE
its transitory provision, it is provided that the 2003 RARAD ON NOVEMBER 11,
Rules shall govern all cases filed on or after its 2002.[4]

effectivity; and, since an appeal from the

Petitioner contends that the petition for valuation
adjudicator's resolution should first be filed with the
and payment of just compensation was filed with
DARAB, the RTC, sitting as a Special Agrarian
the DARAB- Regional Adjudicator for Region V
Court (SAC), did not err in dismissing petitioner's
(RARAD) on November 11, 2002, long before the
petition.
effectivity of the 2003 Rules of Procedure; that
Petitioner filed a motion for reconsideration, which
under the transitory provision of the 2003 DARAB
was denied in a Resolution dated July 28, 2004.
Rules, all cases pending with the Board and the
adjudicators prior to the date of the Rules'
Petitioner is now before the Court raising the
effectivity shall be governed by the DARAB Rules
following arguments:
prevailing at the time of their filing; that clear from

1. THE COURT OF the transitory provision that it is the proceeding of

APPEALS ERRED IN LAW the DARAB which is governed by the 2003
IN DISMISSING THE
PETITION FOR REVIEW DARAB Rules of Procedure, thus, it is the date of
CONSIDERING THAT THE
LBP DID NOT VIOLATE filing of the petition with the DARAB or any of its
THE DOCTRINE OF NON- adjudicators which is the reckoning date of the
EXHAUSTION OF
ADMINISTRATIVE applicability of the 2003 DARAB Rules and not the
REMEDIES WHEN IT
date of filing with the SAC; that under the 1994
FILED THE ORIGINAL
PETITION FOR DARAB Rules prevailing at the time of the filing of
DETERMINATION OF JUST
COMPENSATION BEFORE the respondent's claim for just compensation, the
THE COURT A Rules provided that the decision of the adjudicator
QUO WITHOUT FIRST
SEEKING THE on land valuation and preliminary determination of
INTERVENTION OF THE
DARAB. just compensation shall not be appealable to
the Board, but shall be brought directly to the RTC;
2. THE COURT OF
APPEALS ERRED IN that it was in the observance of the 1994 DARAB
DECLARING THAT THE
Rules that petitioner brought the adjudicator's
APPLICABLE RULE IS THE
2003 DARAB RULES OF decision to the RTC sitting as SAC.
PROCEDURE, DESPITE
THE FACT THAT THE In his Comment, respondent claims that
PETITION (FOR petitioner's petition with the RTC is an original
VALUATION AND
PAYMENT OF JUST action and, since the case was filed at a time when
COMPENSATION) WAS

appeal to the DARAB Central Office was already
provided in the 2003 DARAB Rules before
resorting to judicial action, the RTC correctly
dismissed the petition, which was correctly affirmed
by the CA.
Petitioner filed a Reply reiterating its arguments in
the petition.
The issue for resolution is whether it is
necessary that in cases involving claims for just
compensation under Republic Act (RA) No. 6657
that the decision of the Adjudicator must first be
appealed to the DARAB before a party can resort to
the RTC sitting as SAC.
The court rules in the negative.
Sections 50 and 57 of RA No. 6657
provide:
Section 50. Quasi-judicial Powers of
the DAR. The DAR is hereby vested
with primary jurisdiction to
determine and adjudicate agrarian
reform matters and shall have
exclusive original jurisdiction over
all matters involving the
implementation of agrarian reform,
except those falling under the
exclusive jurisdiction of the
Department of Agriculture (DA) and
the Department of Environment and
Natural Resources (DENR) x x x
Section 57. Special Jurisdiction.
The Special Agrarian Court shall
have original and exclusive
jurisdiction over all petitions for the
determination of just compensation
to landowners, and the prosecution
of all criminal offenses under this
Act. x x x
The Special Agrarian Courts shall
decide all appropriate cases under
their special jurisdiction within thirty
(30) days from submission of the case
for decision.
Clearly, under Section 50, DAR has primary
jurisdiction to determine and adjudicate agrarian
reform matters and exclusive original jurisdiction
over all matters involving the implementation of
agrarian reform, except those falling under the
exclusive jurisdiction of the DA and the DENR.
Further exception to the DAR's original and
exclusive jurisdiction are all petitions for the
determination of just compensation to landowners
and the prosecution of all criminal offenses under
RA No. 6657, which are within the jurisdiction of
the RTC sitting as a Special Agrarian Court. Thus,
jurisdiction on just compensation cases for the
taking of lands under RA No. 6657 is vested in the
courts.
In Republic v. CA,[5] the Court explained:
Thus, Special Agrarian Courts,
which are Regional Trial Courts, are
given original and exclusive
jurisdiction over two categories of
cases, to wit: (1) all petitions for the
determination of just compensation to
landowners and (2) the prosecution of
all criminal offenses under [R.A. No.
6657]. The provisions of 50 must be
construed in harmony with this
provision by considering cases
involving the determination of just
compensation and criminal cases for
violations of R.A. No. 6657 as
excepted from the plenitude of power
conferred on the DAR. Indeed, there
is a reason for this distinction. The
DAR is an administrative agency
 which cannot be granted jurisdiction It is clear from
over cases of eminent domain (for Sec. 57 that the RTC,
such are takings under R.A. No. 6657) sitting as a Special
and over criminal cases. Thus, Agrarian Court, has
in EPZA v. Dulay and Sumulong v. original and exclusive
Guerrero - we held that the valuation jurisdiction over all
of property in eminent domain is petitions for the
essentially a judicial function which determination of just
cannot be vested in administrative compensation to
agencies, while in Scotys Department landowners. This
Store v. Micaller, we struck down a original and exclusive
law granting the then Court of jurisdiction of the
Industrial Relations jurisdiction to try RTC would be
criminal cases for violations of the undermined if the
Industrial Peace Act.[6] DAR would vest in
administrative
In a number of cases, the Court has upheld officials original
jurisdiction in
the original and exclusive jurisdiction of the RTC, compensation cases
sitting as SAC, over all petitions for determination and make the RTC an
appellate court for the
of just compensation to landowners in accordance review of
administrative
with Section 57 of RA No. 6657. decisions. Thus,
although the new
rules speak of directly
In Land Bank of the Philippines v. Wycoco,[7] the appealing the decision
of adjudicators to the
Court upheld the RTC's jurisdiction over Wycoco's
RTCs sitting as
petition for determination of just compensation Special Agrarian
Courts, it is clear
even where no summary administrative proceedings from Sec. 57 that the
was held before the DARAB which has primary original and exclusive
jurisdiction to
jurisdiction over the determination of land valuation. determine such cases
is in the RTCs. Any
The Court held: effort to transfer such
jurisdiction to the
In Land Bank of the adjudicators and to
Philippines v. Court of Appeals, the convert the original
landowner filed an action for jurisdiction of the
determination of just compensation RTCs into an
without waiting for the completion of appellate jurisdiction
DARABs re-evaluation of the would be contrary to
land. This, notwithstanding, the Court Sec. 57 and, therefore,
held that the trial court properly would be void. Thus,
acquired jurisdiction because of its direct resort to the
exclusive and original jurisdiction SAC [Special
over determination of just Agrarian Court] by
compensation, thus private respondent is
valid.
 In the case at bar, therefore,
the trial court properly acquired
jurisdiction over Wycocos complaint
for determination of just
compensation. It must be stressed that
although no summary administrative
proceeding was held before the
DARAB, LBP was able to perform its
legal mandate of initially determining
the value of Wycoco's land pursuant
to Executive Order No. 405, Series of
1990.[8] x x x
In Land Bank of the Philippines v.
Natividad,[9] wherein Land Bank questioned the
alleged failure of private respondents to seek
reconsideration of the DAR's valuation, butinstead
filed a petition to fix just compensation with the
RTC, the Court said:
At any rate, in Philippine Veterans Bank v.
CA, we held that there is nothing
contradictory between the DARs
primary jurisdiction to determine and
adjudicate agrarian reform matters
and exclusive original jurisdiction
over all matters involving the
implementation of agrarian reform,
which includes the determination of
questions of just compensation, and
the original and exclusive
jurisdiction of regional trial courts
over all petitions for the
determination of just
compensation. The first refers to
administrative proceedings, while the
second refers to judicial
proceedings.
In accordance with settled
principles of administrative law,
primary jurisdiction is vested in the
DAR to determine in a preliminary
manner the just compensation for the
lands taken under the agrarian
reform program, but such
determination is subject to challenge
before the courts. The resolution of
just compensation cases for the
taking of lands under agrarian reform
is, after all, essentially a judicial
function.
Thus, the trial court did not
err in taking cognizance of the case
as the determination of just
compensation is a function addressed
to the courts of justice.[10]
In Land Bank of the Philippines v. Celada,[11] where
the issue was whether the SAC erred in assuming
jurisdiction over respondent's petition for
determination of just compensation despite the
pendency of the administrative proceedings before
the DARAB, the Court stated that:
It would be well to emphasize that
the taking of property under RA No.
6657 is an exercise of the power of
eminent domain by the State. The
valuation of property or
determination of just compensation
in eminent domain proceedings is
essentially a judicial function which
is vested with the courts and not with
administrative agencies.
Consequently, the SAC properly
took cognizance of respondent's
petition for determination of just
compensation.[12]
The RTC dismissed petitioner's petition for
determination of just compensation relying on
Sections 5, 6 and 7 of Article XIX of the 2003
DARAB Rules of Procedure, to wit:
Section 5. Appeal. A party
who disagrees with the resolution of
the Adjudicator may bring the matter
to the Board by filing with the
Adjudicator concerned a Notice of
 Appeal withinfifteen (15) days from
receipt of the resolution. The filing where DARAB acknowledges that the decision of
of a Motion for Reconsideration of just compensation cases for the taking of lands
said resolution shall interrupt the
period herein fixed. If the motion is under RA 6657 is a power vested in the
denied, the aggrieved party may file
courts.[13] Although Section 5, Rule XIX of the
the appeal within the remaining
period, but in no case shall it be less 2003 DARAB Rules of Procedure provides that the
than five (5) days.
land valuation cases decided by the adjudicator are
now appealable to the Board, such rule could not
Section 6. When Resolution Deemed
Final. Failure on the part of the change the clear import of Section 57 of RA No.
aggrieved party to contest the
resolution of the Adjudicator within 6657 that the original and exclusive jurisdiction to
the aforecited reglementary period determine just compensation is in the RTC. Thus,
provided shall be deemed a
concurrence by such party with the Section 57 authorizes direct resort to the SAC in
land valuation, hence said valuation
cases involving petitions for the determination of
shall become final and executory.
just compensation.[14] In accordance with the said
Section 7. Filing of Original Action
with the Special Agrarian Court for Section 57, petitioner properly filed the petition
Final Determination. The party who before the RTC and, hence, the RTC erred in
disagrees with the decision of the
Board may contest the same by filing dismissing the case. Jurisdiction over the subject
an original action with the Special
Agrarian Court (SAC) having matter is conferred by law.[15] Only a statute can
jurisdiction over the subject property confer jurisdiction on courts and administrative
within fifteen (15) days from his
receipt of the Board's decision. agencies while rules of procedure cannot.[16]
WHEREFORE, the petition for review
Notably, the above-mentioned provisions
on certiorari is GRANTED. The Decision dated
deviated from Section 11, Rule XIII of the 1994
May 26, 2004 and the Resolution dated July 28,
DARAB Rules of Procedure which provides:
2004, of the Court of Appeals in CA-G.R. SP No.
Section 11. Land Valuation and 81096, are REVERSED and SET ASIDE. The
Preliminary Determination and
Payment of Just Compensation The Regional Trial Court, Branch 3, Legaspi City,
decision of the Adjudicator on land sitting as Special Agrarian Court, is DIRECTED to
valuation and preliminary
determination and payment of just hear without delay petitioner's petition for the
compensation shall not be appealable
to the Board, but shall be brought determination of just compensation.
directly to the Regional Trial Courts SO ORDERED.
designated as Special Agrarian Courts
within fifteen (15) days from receipt
of the notice thereof. Any party shall
be entitled to only one motion for
reconsideration.
Mun of Pateros v. CA GR 157714 Jun 16, 2009
between the Municipality (now City) of Taguig
DECISION and Makati, docketed as Civil Case No. 63896 and
NACHURA, J.: pending before the RTC of Pasig City, Branch 153.
Before this Court is a Petition[1] for Review As Proclamation Nos. 2475 and 518
on Certiorari under Rule 45 of the Rules of Civil respectively stated that the entire property is
Procedure, seeking the reversal of the Court of situated in Makati, Pateros, on January 18, 1991,
Appeals (CA) Decision[2] dated January 22, 2003, filed an action[6] for Judicial Declaration of the
which denied the appeal Territorial Boundaries of Pateros
of petitioner Municipality of Pateros (Pateros) for against Makati before the RTC of Pasig City,
undertaking a wrong mode of appeal. Subject of the Branch 154 (Pasig RTC). The case was, however,
appeal was the Order[3] of the Regional Trial Court dismissed for lack of jurisdiction inasmuch as the
(RTC) of Makati City, Branch 139, dated June 14, subject property is located in Makati and it should
1996, which dismissed petitioners complaint for have been filed before the Makati RTC.[7] Heeding
lack of jurisdiction. the directive of the Pasig RTC, Pateros, on
The Facts December 8, 1993, filed with the RTC of Makati a
The property subject of this case consists of Complaint[8] against Makati and co-respondents,
portions of then Fort William McKinley, now Director of Lands and the Department of
known as Fort Bonifacio (subject property), Environment and Natural Resources (DENR), for
currently comprising Barangays Cembo, South the Judicial Declaration of the Territorial
Cembo, West Rembo, East Rembo, Comembo, Boundaries of Pateros with a prayer for the issuance
Pembo, and Pitogo (entire property). The subject of a writ of Preliminary Injunction and Temporary
property is allegedly situated within the territorial Restraining Order (TRO). Pateros claimed that,
jurisdiction of respondent Municipality (now City) based on historical and official records, it had an
of Makati (Makati) per Proclamation No. original area of one thousand thirty-eight (1,038)
2475[4] issued on January 7, 1986 (Proclamation No. hectares, more or less. However, when a cadastral
2475) by former President Ferdinand E. Marcos mapping was conducted by the Bureau of Lands in
(President Marcos). Subsequently, on January 31, 1978, Pateros was appalled to learn that its
1990, former President Corazon C. Aquino territorial boundaries had been substantially reduced
(President Aquino) issued Proclamation No. to merely one hundred sixty-six (166) hectares.
518,[5] amending Proclamation No. 2475. Pateros opined that this disparity was brought about
Parenthetically, it may be noted that a similar by the issuance of Proclamation Nos. 2475 and
boundary dispute over the entire property exists 518. Thus, Pateros prayed that the RTC judicially
declare the territorial boundaries of Pateros based
on supporting pieces of evidence, and that it nullify
Proclamation No. 2475.
Makati filed a Motion to
Dismiss,[9] contending that the issue was not the
nullification of Proclamation No. 2475; that the
RTC had no jurisdiction over the subject matter of
the action because original jurisdiction to resolve
boundary disputes among municipalities situated in
Metro Manila is vested in the Metropolitan Manila
Authority (MMA); that the RTC's jurisdiction is
merely appellate; that the complaint failed to state a
cause of action as Pateros failed to exhaust
administrative remedies by failing to settle the
dispute amicably; and that Pateros' claims had
already been barred by laches because Makati,
throughout the years, had already developed the
subject property and had spent millions on such
development.
Makati also filed a Motion to Suspend
Proceedings,[10] arguing that the bill
converting Makati into a city was pending approval
before the Senate and portions of the subject
property are included in the proposed
charter. Makati, thus, opined that the continuation
of the RTC proceedings would create a conflict
between the judicial and the legislative branches. In
[11]
its Order dated October 21, 1994, the RTC
granted Makatis Motion.
On July 19, 1994, Republic Act No. 7854[12] was
enacted into law, converting Makati into a highly
urbanized city. Pateros then moved for the revival
of the proceedings before the RTC,[13] which it
granted in its Order[14] dated March 17, 1995.
However, due to the pending Motion to Dismiss
earlier filed by Makati, the RTC required the parties
to submit their respective Memoranda.
The RTC's Ruling
On June 14, 1996, the RTC issued an Order,
dismissing the case on the ground of lack of
jurisdiction. The RTC held that Proclamation No.
2475 specifically declared that the subject property
is within the territorial jurisdiction of Makati and,
inasmuch as the Proclamation was not declared
unconstitutional, the same is a valid and subsisting
law. In the main, citing
Sections 10[15] and 11,[16] Article X of the 1987
Constitution, and pursuant to this Court's ruling
in Municipality of Sogod v. Rosal,[17] the RTC held
that the modification or substantial alteration of
boundaries of municipalities can be done only
through a law enacted by Congress which shall be
subject to approval by a majority of the votes cast in
a plebiscite in the political units directly affected.
Hence, the RTC opined that it is without
jurisdiction to fix the territorial boundaries of the
parties. Pateros filed a Motion for
Reconsideration[18] which was, however, denied by
the RTC in its Order[19] dated August 30, 1996.
Aggrieved, Pateros appealed to the CA.[20]
 The CA's Ruling
On January 22, 2003, the CA denied Pateros'
appeal. The CA held that the RTC did not make any
findings of fact but merely applied various
provisions of law and jurisprudence.Thus, the case
presented a pure question of law, which Pateros
should have brought directly to the Supreme Court,
pursuant to Section 5(2),[21] Article VIII of the 1987
Constitution and Section 2,[22] Rule 41 of the
Revised Rules of Civil Procedure. The CA also held
that it would amount to grave abuse of discretion
amounting to lack of jurisdiction if the CA insisted
on resolving the issues raised therein. Thus, by
undertaking a wrong mode of appeal and citing
Section 2,[23] Rule 50 of the Revised Rules of Civil
Procedure, the CA denied Pateros' appeal. Pateros
filed a Motion for Reconsideration,[24] which the
CA denied in its Resolution[25] dated March 27,
2003.
The Issue
Hence, this Petition based on the sole ground that
the CA committed grave abuse of discretion in
dismissing the appeal for lack of jurisdiction.[26]
Pateros asseverates that the issues raised
before the CA involved mixed questions of fact and
law, because Pateros sought the determination of its
territorial boundaries and the nullification of
Proclamation No. 2475; that Pateros does not seek
the alteration, modification, or creation of another
or a new local government unit (LGU), but is
concerned only with its territorial boundaries which,
according to existing records, consisted of 1,038
hectares; that non-presentation of evidence before
the RTC does not make the appeal purely a question
of law, because the parties were prevented from
presenting any evidence due to the RTC's erroneous
dismissal of the case based on lack of jurisdiction;
that Proclamation Nos. 2475 and 518 suffer from
Constitutional infirmity; that the alteration or
modification of the boundaries of municipalities or
cities can only be made by a law enacted by
Congress and approved by the majority of the votes
cast in a plebiscite in the political units directly
affected; that Proclamation No. 2475, although
issued by then President Marcos during the Marcos
era, was not a legislative enactment, pursuant to
Section 6 of the 1976 Amendment to the
Constitution; and granting, without admitting, that
Proclamation No. 2475 is a law, it should be subject
to approval by the majority of the votes cast in a
plebiscite in the political units directly affected.
Thus, Pateros prays that the assailed CA Decision
be reversed and set aside, and that the RTC be
directed to proceed with the trial of the instant
case.[27]
On the other hand, Makati claims that the
sole issue in Pateros' appeal before the CA is
jurisdiction and as the question of jurisdiction is a
question of law and as the CA lacks jurisdiction
over pure questions of law, therefore, Pateros
resorted to a wrong mode of appeal. The issues
raised by Pateros do not consist of questions of fact
as the RTC rendered the assailed Order based
on Makati's Motion to Dismiss and no trial on the
merits was ever conducted. Makati points out that
the CA quoted the decision of the RTC's discourse
in order to show that only a question of law was
involved in Pateros' appeal. Thus, Makati posits that
Pateros defies the rules on trial, evidence, and
jurisdiction in a desperate bid to extricate itself from
its mistake in taking a wrong mode of
appeal, i.e., by notice of appeal to the CA rather
than a petition for review on certiorari under Rule
45 of the Revised Rules of Civil Procedure filed
before this Court. Makati submits that the dismissal
of Pateros' appeal was proper, as mandated by
Section 2, Rule 50 of the said Rules. Due to the
availment of the wrong mode of appeal, the RTC's
Order dismissing the case already attained
finality.[28]
The Director of Lands and the DENR,
through the Office of the Solicitor General (OSG),
share the stand and arguments of Makati. The OSG
stresses that the parties never presented any
evidence before the RTC which resolved the case
based on the parties' undisputed factual submissions
and the application thereto of the pertinent laws,
Rules of Civil Procedure, and jurisprudence. Hence,
the OSG concludes that the appeal before the CA
involved a pure question of law.[29]
Our Ruling
We agree that Pateros indeed committed a
procedural infraction. It is clear that the issue raised
by Pateros to the CA involves the jurisdiction of the
RTC over the subject matter of the case. The
jurisdiction of a court over the subject matter of the
action is a matter of law; it is conferred by the
Constitution or by law. Consequently, issues which
deal with the jurisdiction of a court over the subject
matter of a case are pure questions of law. As
Pateros' appeal solely involves a question of law, it
should have directly taken its appeal to this Court
by filing a petition for review on certiorari under
Rule 45, not an ordinary appeal with the CA under
Rule 41. The CA did not err in holding that Pateros
pursued the wrong mode of appeal.[30]
However, in the interest of justice and in
order to write finis to this controversy, we opt to
relax the rules. Our ruling in Atty. Ernesto A.
Tabujara III and Christine S. Dayrit v. People of
the Philippines and Daisy Afable[31] provides us
with ample justification, viz.:
While it is true that rules of
procedure are intended to promote
rather than frustrate the ends of
justice, and while the swift
unclogging of the dockets of the
courts is a laudable objective, it
nevertheless must not be met at the
expense of substantial justice.
The Court has allowed some
meritorious cases to proceed despite
inherent procedural defects and
lapses. This is in keeping with the
principle that rules of procedure are
mere tools designed to facilitate the
attainment of justice, and that strict
and rigid application of rules which
would result in technicalities that
tend to frustrate rather than promote
substantial justice must always be
avoided. It is a far better and more
prudent cause of action for the court
to excuse a technical lapse and afford
the parties a review of the case to
attain the ends of justice, rather than
 dispose of the case on technicality
and cause grave injustice to the express consent of the parties. Thus, the jurisdiction
parties, giving a false impression of of a court over the nature of the action and the
speedy disposal of cases while
actually resulting in more delay, if subject matter thereof cannot be made to depend
not a miscarriage of justice.
upon the defenses set up in court or upon a motion
In those rare cases to which we did
not stringently apply the procedural to dismiss for, otherwise, the question of
rules, there always existed a clear
need to prevent the commission of a jurisdiction would depend almost entirely on the
grave injustice. Our judicial system defendant. Once jurisdiction is vested, the same is
and the courts have always tried to
maintain a healthy balance between retained up to the end of the litigation.[32]
the strict enforcement of procedural
laws and the guarantee that every It is worth stressing that, at the time the instant case
litigant is given the full opportunity was filed, the 1987 Constitution and the Local
for a just and proper disposition of
his cause. Government Code (LGC) of 1991 were already in
effect. Thus, the law in point is Section 118 of the
The emerging trend in the rulings of
this Court is to afford every party LGC, which provides:
litigant the amplest opportunity for
the proper and just determination of Section. 118. Jurisdictional
his cause, free from the constraints Responsibility for Settlement of
of technicalities. Time and again, we Boundary Disputes. Boundary
have consistently held that rules disputes between and among local
must not be applied so rigidly as to government units shall, as much as
override substantial justice. possible, be settled amicably. To this
end:
Given the circumstances surrounding the
(a) Boundary disputes involving two
instant case, we find sufficient reason to relax the (2) or more barangays in the same
city or municipality shall be referred
rules. Thus, we now resolve the sole issue of for settlement to the sangguniang
whether the RTC has jurisdiction to entertain the panlungsod or sangguniang
bayan concerned.
boundary dispute between Pateros and Makati.
(b) Boundary disputes
Apart from the doctrine that the jurisdiction of a involving two (2) or more
tribunal over the subject matter of an action is municipalities within the same
province shall be referred for
conferred by law, it is also the rule that the courts settlement to the sangguniang
panlalawigan concerned.
exercise of jurisdiction is determined by the
material allegations of the complaint or information (c) Boundary disputes involving
municipalities or component cities of
and the law applicable at the time the action was different provinces shall be jointly
commenced. Lack of jurisdiction of the court over referred for settlement to
the sanggunians of the province
an action or the subject matter of an action cannot concerned.
be cured by the silence, by acquiescence, or even by
 (d) Boundary disputes involving a
component city or municipality on municipalities, was merely given the power of: (1)
the one hand and a highly formulation of policies on the delivery of basic
urbanized city on the other, or two
(2) or more highly urbanized cities, services requiring coordination and consolidation;
shall be jointly referred for
and (2) promulgation of resolutions and other
settlement to the
respective sanggunians of the issuances, approval of a code of basic services, and
parties.
(e) In the event exercise of its rule-making power.[34] Thus, there is
the sanggunian fails to effect an no merit in Makatis argument that Pateros failed to
amicable settlement within sixty
(60) days from the date the dispute exhaust administrative remedies inasmuch as the
was referred thereto, it shall issue
a certification to that effect. LGC is silent as to the governing body in charge of
Thereafter, the dispute shall be boundary disputes involving municipalities located
formally tried by
the sanggunian concerned which in the Metropolitan Manila area.
shall decide the issue within sixty
(60) days from the date of the
certification referred to above.[33] However, now that Makati is already a highly
urbanized city, the parties should follow Section

Notably, when Pateros filed its complaint with the 118(d) of the LGC and should opt to amicably settle

RTC of Makati, Makati was still a municipality. We this dispute by joint referral to the

take judicial notice of the fact that there was respective sanggunians of the parties. This has

no Sangguniang Panlalawigan that could take become imperative because, after all, no attempt

cognizance of the boundary dispute, as provided in had been made earlier to settle the dispute amicably

Section 118(b) of the LGC. Neither was it feasible under the aegis of the LGC. The specific provision

to apply Section 118(c) or Section 118(d), because of the LGC, now made applicable because of the

these two provisions clearly refer to situations altered status of Makati, must be complied with. In

different from that obtaining in this case. Also, the event that no amicable settlement is reached, as

contrary to Makati's postulation, the former MMA envisioned under Section 118(e) of the LGC, a

did not also have the authority to take the place of certification shall be issued to that effect, and the

the Sangguniang Panlalawigan because the MMA's dispute shall be formally tried by

power was limited to the delivery of basic urban the Sanggunian concerned within sixty (60) days

services requiring coordination in Metropolitan from the date of the aforementioned certification. In

Manila. The MMA's governing body, the this regard, Rule III of the Rules and Regulations

Metropolitan Manila Council, although composed Implementing the LGC shall govern.[35]

of the mayors of the component cities and

Only upon failure of these intermediary steps will
resort to the RTC follow, as specifically provided
in Section 119 of the LGC:
Section 119. Appeal. Within the time
and manner prescribed by the Rules
of Court, any party may elevate the
decision of
the sanggunian concerned to the
proper Regional Trial Court having
jurisdiction over the area in dispute.
The Regional Trial Court shall
decide the appeal within one (1) year
from the filing thereof. Pending final
resolution of the disputed area prior
to the dispute shall be maintained
and continued for all legal purposes.
On this score, the jurisdiction of the RTC
over boundary disputes among LGUs was settled
in National Housing Authority v. Commission on
the Settlement of Land Problems,[36]where this
Court recognized the appellate jurisdiction of the
proper RTC. The jurisdiction of the RTC was
clarified in Municipality of Kananga v. Judge
Madrona,[37] where this Court held that, even in the
absence of any specific provision of law, RTCs have
general jurisdiction to adjudicate all controversies
except those expressly withheld from their plenary
powers. They have the power not only to take
judicial cognizance of a case instituted for judicial
action for the first time, but also to do so to the
exclusion of all other courts at that stage. Indeed,
the power is not only original, but also exclusive.
Corollarily, we feel obliged to inform Congress of
the need to pass a law specifically delineating the
metes and bounds of the disputing LGUs.
In Mariano, Jr. v. COMELEC,[38]we held that the
existence of a boundary dispute does not per
se present an unsurmountable difficulty which will
prevent Congress from defining with reasonable
certitude the territorial jurisdiction of an LGU.
Congress, by virtue of the powers vested in it by the
Constitution, could very well put an end to this
dispute. We reiterate what we already said about the
importance and sanctity of the territorial jurisdiction
of an LGU:
The importance of drawing with
precise strokes the territorial
boundaries of a local unit of
government cannot be
overemphasized. The boundaries
must be clear for they define the
limits of the territorial jurisdiction of
a local government unit. It can
legitimately exercise powers of
government only within the limits of
its territorial jurisdiction. Beyond
these limits, its acts are ultra vires.
Needless to state, any uncertainty in
the boundaries of local government
units will sow costly conflicts in the
exercise of governmental powers
which ultimately will prejudice the
people's welfare. This is the evil
sought to be avoided by the Local
Government Unit in requiring that
the land area of a local government
unit must be spelled out in metes and
bounds, with technical
descriptions.[39]
WHEREFORE, the instant Petition
is DENIED, having been mooted by the conversion

of respondent Municipality of Makati into a highly
urbanized city. The parties are
hereby DIRECTED to comply with Section 118(d)
and (e) of the Local Government Code, and Rule III
of the Rules and Regulations Implementing the
Local Government Code of 1991 without prejudice
to judicial recourse, as provided in the Local
Government Code. No costs.
SO ORDERED.
Tricorp v. CA GR 165742 June 30, 2009;
DECISION
QUISUMBING, J.:
This petition for certiorari under Rule 65 of
the Rules of Court assails the Decision[1] dated June
9, 2004 and Resolution[2] dated September 21,
2004 of the Court of Appeals in CA-G.R. CV No.
71285. The Court of Appeals affirmed the Orders
dated November 15, 2000[3] and June 11, 2001[4] of
the Regional Trial Court (RTC) of MakatiCity,
Branch 139 in LRC Case No. M-4086 dismissing
the complaint filed by petitioner Tri-Corp Land and
Development, Inc. (Tri-Corp) against respondent
Greystone Corporation (Greystone) for lack of
jurisdiction.
The facts, culled from the records, are as
follows:
On February 12, 1998, Greystone executed
in favor of Tri-Corp a Contract to Sell[5] whereby
Tri-Corp agreed to pay the purchase price, exclusive
of interest, in the amount of P13,500,000 and
payable in installments, of a unit of Casa Madeira, a
residential condominium project located at Fatima
Street, San Miguel Village, Makati City. Said unit,
covered by Condominium Certificate of Title (CCT)
No. 51232[6] was to be used as a family residence of
Tri-Corps officers and stockholders. However,
when Tri-Corp applied for membership with the
San Miguel Village Homeowners Association
(SMVHA), it was denied and not given gate passes
for its vehicles. The reason cited by SMVHA for
Tri-Corps denial of application was that the
construction of the Casa Madeira condominium
project was in violation of village restrictions
annotated as Entry No. 31976[7]and inscribed No. M-4086. Tri-Corp alleged in its petition that
on October 9, 1961 at the back of Transfer Greystone used different descriptions of the
Certificates of Title Nos. 205827[8] and condominium project in order to circumvent
205828[9] covering the lots on which the existing laws, rules and regulations on registration
condominium project was constructed.SMVHA of real estate projects, to wit:
filed a case against Greystone for this violation and
[1] Thus, to obtain approval
prayed for the cancellation of the CCTs of the Casa of the San Miguel Village
Madeira condominium project before the Housing Association Construction and
Permits Committee, it styled its
and Land Use Regulatory Board (HLURB). The
project as a 2-Unit Duplex
case was docketed as HLURB Case No. REM- Residence, to conform with
10045. Upon learning of the pending case, Tri-Corp association rules.
filed a Complaint-in-Intervention[10] in said case for [2] To obtain approval of
suspension of payments until the issue of violation Barangay Poblacion, Makati City,
and the issuance of Certificate of
of the village restriction and validity of the CCT to
Registration and Clearance No. 2758
the condominium unit sold shall have been on the same project, it dubbed the
resolved. Tri-Corp, likewise, filed a same project as a 3-storey
townhouse, to suit barangay
petition[11] dated September 28, 2000, against
guidelines.
Greystone before the HLURB for Suspension and
Cancellation of Certificate of Registration and [3] To obtain from the City
of Makati Building Permit
License to Sell of Greystone. No. C1096-01259, it called the
same project a 4-unit Residential
Greystone, in turn, filed an ejectment suit Bldg. Two-storey duplex, to
comply with zoning ordinances.
against Tri-Corp before
the Metropolitan Trial Court of Makati City, for [4] To obtain from the
HLURB the Preliminary Approval of
failure to pay under the Contract to Sell. The Condominium Plan, it described
complaintwas docketed as Civil Case No. Casa Madeira as a Condominium
63308. Tri-Corp was ejected by the Sheriff in the Project, for the purpose of
complying with PD 957 and its
said case for its refusal to pay implementing rules.
the supersedeas bond. Civil Case No. 63308 is still
[5] To obtain from the
pending on appeal.[12]
HLURB the Final Approval, it
called the project a Condominium
Tri-Corp also filed before the RTC of Plan/Subdivision Townhouse, for
the same purpose.
Makati City, sitting as a Land Registration Court, a
Petition for Correction of Error /Misrepresentation [6] To obtain from the
in the Master Deed entered as Memorandum on HLURB a development permit, it
called the project
TCTs Nos. 205827 and 205828 with prayer for a condominium for the same
Temporary Restraining Order and purpose.
Injunction.[13] The case was docketed as LRC Case
 [7] To obtain from the IN VIEW OF THE
HLURB a Certificate of Locational FOREGOING PREMISES, based
Viability for the same project, it was on law and jurisprudence,
designated as a 2 Storey with Attic the COURT hereby ORDERS that:
Residential Condominium, for the
same purpose. (a) The prayer for Temporary
Restraining Order and/or Writ of
[8] To obtain from the Preliminary Injunction is
Department of Environment and hereby DENIED for lack of merit.
Natural Resources, National Capital
Region an Environmental (b) The Complaint dated 19
Compliance Certificate (ECC) it September 1990 (sic) is
designated the project as four hereby DISMISSED, the same being
units, two storey with attic within the exclusive jurisdiction of
townhouse project, to comply with [the] HLURB pursuant to PD[s] 987
the requirement of law. and 1344.

[9] To obtain from the SO ORDERED.[16]

HLURB Certificate of Registration
No. 97-09-3003, it called Casa
Madeira a condominium project, Tri-Corp filed a motion for reconsideration
for the purpose of complying with but it was denied by the RTC in an Order
PD 957 and its implementing rules.
dated June 11, 2001.
[10] These
misrepresentations misled the
Tri-Corp appealed to the Court of
petitioner as buyer and also mis[led]
the buying public as to the real Appeals. In a Decision promulgated on June 9, 2004,
nature of [the] project.[14] [Emphasis the Court of Appeals affirmed the orders of the
supplied.]
RTC. The dispositive portion of the decision states:

UPON THE VIEW WE

During the hearing on Tri-Corps application TAKE OF THIS CASE, THUS, the
for a Writ of Preliminary Injunction on September appealed orders dated November 15,
28, 2000, Greystone raised the issue of 2000 and June 11, 2001 must be, as
they hereby,
jurisdiction. Greystone contended in its are AFFIRMED. Without costs in
Memorandum[15] that the RTC had no jurisdiction to this instance.
try and decide the case because it involves an
SO ORDERED.[17]
unsound real estate practice within the jurisdiction
of the HLURB, Tri-Corp is not a party in interest,
Tri-Corp filed a motion for reconsideration
and same issues had been raised by Tri-Corp in the
but it was denied by the Court of Appeals in a
HLURB.
Resolution promulgated on September 21, 2004 for

In an Order dated November 15, 2000, the being filed out of time and for being without merit.

RTC dismissed the case for lack of jurisdiction. The

Alleging that the Court of Appeals
dispositive portion of the order states:
committed grave abuse of discretion in affirming
the orders of the RTC, Tri-Corp filed this original In its Memorandum,[19] Tri-Corp asserts that
action for certiorari under Rule 65. it disagrees with the findings of the appellate court
that its motion for reconsideration was filed out of
Tri-Corp alleges that: time since it would be absurd to consider receipt by
I. its mailbox as receipt by Tri-Corp when its
THE APPELLATE COURT representative, Solita S. Jimenez-Paulino, was not
COMMITTED GRAVE ABUSE OF physically present in the Philippines.[20] Tri-Corp
DISCRETION AMOUNTING TO
LACK OR EXCESS OF further argues that the conclusion that Tri-Corp is
JURISDICTION WHEN IT not a party in interest is also absurd since Tri-Corp
DECLARED THE MOTION FOR stands to lose an enormous amount at the instance
RECONSIDERATION AS
HAVING BEEN FILED OUT OF of Greystone who stands to gain without giving
TIME DESPITE PROOFS OF anything of value.[21] Tri-Corp also argues that the
TRAVEL. Court of Appeals overlooked the fact that the case is
II. one for cancellation of inscriptions and cancellation
THE APPELLATE COURT of the CCT, which is within the ambit of the
COMMITTED GRAVE ABUSE OF Register of Deeds to perform, and the case is not a
DISCRETION AMOUNTING TO
simple buyer-seller of condominium relationship
LACK OF OR EXCESS OF
JURISDICTION IN DECLARING but one which seeks the alteration of annotations
THAT HEREIN PETITIONER IS and cancellation of titles with the jurisdiction of the
NOT A PARTY IN INTEREST.
RTC sitting as a Land Registration Court.[22]
III.
THE APPELLATE COURT On the other hand, Greystone, in its
COMMITTED GRAVE ABUSE OF Memorandum,[23] argues that it is clear that since Tri-
DISCRETION AMOUNTING TO
LACK OF OR EXCESS OF Corps mailbox, MBE Center, received a copy of the
JURISDICTION WHEN IT decision of the Court of Appeals on June 16, 2004, it
RESOLVED THE INSTANT CASE had until July 1, 2004 within which to file a motion for
IN FAVOR OF RESPONDENT
GREYSTONE WITHOUT DUE reconsideration. Its motion for reconsideration, which
REGARD TO THE PROTECTIVE was filed only on July 13, 2004[24] was clearly filed out
MANTLE ENSHRINED UNDER of time.
PD 957 TOWARDS BUYERS OF
CONDOMINIUM UNITS.[18]
As defined, grave abuse of discretion means
such capricious and whimsical exercise of judgment
In sum, the issue is, did the Court of
as is equivalent to lack or excess of jurisdiction or,
Appeals act with grave abuse of discretion in
where the power is exercised in an arbitrary manner
denying Tri-Corps motion for reconsideration for
by reason of passion, prejudice, or personal hostility,
being filed out of time, in declaring Tri-Corp as not
and it must be so patent or gross as to amount to an
a party in interest, and in affirming the RTCs Order
evasion of a positive duty or to a virtual refusal to
dismissing the case for lack of jurisdiction?
perform the duty enjoined or to act at all in SECTION 1. In the exercise
of its functions to regulate the real
contemplation of law.[25] estate trade and business and in
addition to its powers provided for in
After review, we find that the Court of Presidential Decree No. 957, the
National Housing Authority shall
Appeals did not act with grave abuse of discretion have exclusive jurisdiction to hear
because of the following reasons: and decide cases of the following
nature:

First, the petitioner in this case is Tri-Corp A. Unsound real

and not Solita Jimenez-Paulino. The reckoning time estate business practices;
B. Claims involving
therefore to count the period to file Tri-Corps
refund and any other claims
motion for reconsideration was the date the decision filed by subdivision lot or
was received by Tri-Corps mailbox and not the date condominium unit buyer
against the project owner,
when it was received by its representative, Solita S.
developer, dealer, broker or
Jimenez-Paulino. salesman; and
C. Cases involving
specific performance of
Second, the Court of Appeals, in ruling that
contractual and statutory
Tri-Corp is not a party in interest, pointed out in its obligations filed by buyers of
decision that the contract to sell entered into by both subdivision lot or
condominium unit against the
parties contains a stipulation that in case of default or owner, developer, dealer, or
non-payment of the stipulated amortizations and the salesman. [Emphasis
rentals, Greystone has the option to rescind the supplied.]
contract and forfeit all amounts paid as liquidated
damages. Greystone rescinded the contract.[26] As the In this case, Tri-Corps chief quest is the
contract to sell has been rescinded, there is legal cancellation of Entry No. 31976 from TCTs Nos.
basis to hold that Tri-Corp is no longer a party in 205827 and 205828, and the cancellation of the
interest. CCT of the unit sold to it, and it alludes to
Greystones use of different descriptions of the
Third, the Court of Appeals decision condominium project in order to circumvent
affirming the trial courts Orders dismissing Tri- existing laws, rules and regulations on registration
Corps petition on the ground that it does not have of real estate projects in its petition. Under these
jurisdiction over the case, has legal basis. circumstances, Tri-Corp is alluding to steps
allegedly taken by Greystone in consummating an
Section 1 of Presidential Decree No. alleged unsound real estate business practice. The
1344[27] entitled Empowering the National Housing HLURB has the technical expertise to resolve this
Authority to Issue Writ of Execution in the technical issue. Jurisdiction therefore properly
Enforcement of its Decisions under Presidential pertains to the HLURB.
Decree No. 957 provides:
 In view of the foregoing, it cannot be said MA. LUISA G. DAZON, PETITIONER, VS.
KENNETH Y. YAP AND PEOPLE OF THE
that the Court of Appeals, in affirming the RTC PHILIPPINES, RESPONDENTS.
Orders dismissing the case for lack of jurisdiction,
acted with grave abuse of discretion that would DECISION

warrant the filing of a petition for certiorari under DEL CASTILLO, J.:
Rule 65 against it.
The primordial function of the Housing and Land
Use Regulatory Board (HLURB) is
WHEREFORE, the instant petition the regulation of the real estate trade and
is DISMISSED for lack of merit. Costs against business. Though the agency's jurisdiction has been
expanded by law, it has not grown to the extent of
petitioner.
encompassing the conviction and punishment of
criminals.
SO ORDERED. The present Petition for Review
on Certiorari assails the Orders of the Regional
Trial Court (RTC) of Lapu-Lapu City, Branch 54
dated October 2, 2002 and January 13,2003, which
granted the Motion to Withdraw Information filed
by the public prosecutor and denied the motion for
reconsideration filed by petitioner, respectively.

Factual Antecedents

Respondent Kenneth Y. Yap was the president of

Primetown Property Group, Inc., (Primetown) the
developer of Kiener Hills Mactan Condominium, a
low-rise condominium project. In November 1996,
petitioner Ma. Luisa G. Dazon entered into a
contract[1] with Primetown for the purchase of Unit
No. C-108 of the said condominium project.
Petitioner made a downpayment and several
installment payments, totaling
P1,114,274.30.[2] Primetown, however, failed to
finish the condominium project. Thus, on March 22,
1999, petitioner demanded for the refund of her
payments from Primetown, pursuant to Section
23[3]of Presidential Decree (PD) No. 957 (1976),
otherwise known as "The Subdivision and
Condominium Buyers' Protective Decree".
Primetown failed to refund petitioner's payments.

On October 26,2000,[4] petitioner filed a criminal

complaint with the Office of the City Prosecutor of
Lapu-Lapu City against respondent as president of
Primetown for violation of Section 23 in relation to
Section 39[5] of PD 957. Subsequently, after a
finding of probable cause, an Information[6] was
filed with the RTC of Lapu-Lapu City docketed as
Criminal Case No. 015331-L.

Meanwhile, respondent, in connection with the
resolution finding probable cause filed a Petition for
Review with the Department of Justice (DOJ). On
June 14,2002, the DOJ rendered a
Resolution[8] ordering the trial prosecutor to cause
the withdrawal of the Information. Hence, the
prosecutor filed a Motion to Withdraw
Information[9] with the RTC.
The RTC disposed of the matter as follows:
Wherefore, in view of the foregoing, the Motion to
Withdraw Information filed by [the] public
prosecutor is hereby granted. Accordingly, the
information' filed against the herein accused is
ordered withdrawn and to be transmitted back to the
City Prosecutor's Office of Lapu-Lapu City.
Furnish copies of this order to Prosecutor Rubi,
Attys. Valdez and Pangan.
SO ORDERED.[10] Petitioner's motion for
reconsideration was denied.[11]
Issue
Hence, the present Petition for Review on Certiorari
raising the following issue: ''Whether or not a
regional trial court has jurisdiction over a criminal
action arising from violation of PD 957".[12]
Petitioner's Arguments
Petitioner contends that jurisdiction is conferred by
law and that there is no law expressly vesting on the
HLUKB exclusive jurisdiction over criminal actions
arising from violations of PD 957.
Respondent's Arguments
Respondent, on the other hand, contends that there
is no error of law involved in this case and that
petitioner failed to give due regard to the hierarchy
of courts by filing the present petition directly with
the Supreme Court instead of with the Court of
Appeals. He further argues that the real issue is not
of jurisdiction but the existence of probable cause.
The Secretary of Justice, according to respondent,
found no probable cause to warrant the filing of the
Information, hence its directive to cause the
withdrawal of the Information.
Our Ruling
The petition has merit.
The DOJ Resolution dated June
14, 2002 which ordered the
withdrawal of the information
was based on the finding that
the HLURB, and not the regular
court, has jurisdiction over the case.
Both the respondent[13] and the OSG[14] agree with
the petitioner that the regular courts and not the
HLURB have jurisdiction over the criminal aspect
of PD 957. The parties, however, disagree on the
basis of the directive of the DOJ for the withdrawal
of the Information. Was it, as argued by petitioner,
lack of jurisdiction of the RTC or was it, as argued
by respondent, lack of probable cause? We perused
the DOJ Resolution dated June 14, 2002 and we
find that the basis of the resolution was, not that
there was lack of probable cause but, the finding
that it is the HLURB that has jurisdiction over Hie
case. Pertinent portions of the said DOJ Resolution
provide:
The petition is impressed with merit.
A perusal of the allegations in the complaint-
affidavit would show complainant's grievance
against respondent was the failure of the latter's
firm to refund the payments she made for one of the
units in the aborted Mactan condominium project in
the total amount of P1,114,274.30.
As early as in the case of Solid Homes, Inc. vs.
Payawal, 177 SCRA 72, the Supreme Court had
ruled that the Housing and Land Use Regulatory
Board (HLURB) has exclusive jurisdiction over
cases involving real estate business and practices
under PD 957. This ruling is reiterated in several
subsequent cases, to name a few of them, Union
Bank of the Philippines-versus-HLURB, G.R. No.
953364, June 29, 1992; C.T. Torres Enterprises vs.
Hilionada, 191 SCRA 286; Villaflor vs. Court of
Appeals, 280 SCRA 297; Marina Properties Coip.
vs. Court of Appeals, 294 SCRA 273; and Raet vs.
Court of Appeals, 295 SCRA 677. Of significant
relevance is the following pronouncement of the
Supreme Court in Raet vs. Court of Appeals (supra),
as follows:
xxx The contention has merit. The decision in the
ejectment suit is conclusive only on the question of
possession of the subject premises. It does not
settle the principal question involved in the present
case, namely, whether there was perfected contract
of sale between petitioners and private respondent
PVDHC involving the units in question. Under
8(100) of E.O. No. 648 dated February 7, 1981, as
amended by E.O. No. 90 dated December 17, 1986
this question is for the HLURB to decide. The said
provision of law gives that agency the power to—
Hear and decide cases of unsound real estate
business practices; claims involving refijnd filed
against project owners, developers, dealers, brokers,
or salesmen; and cases of specific performance.
This jurisdiction of the HLURB is exclusive. It has
been held to extend to the determination of the
question whether there is a perfected contract of
sale between condominium buyers and [the]
developer x x x.
In fine, the Rule of Law dictates that we should
yield to this judicial declaration upholding the
jurisdiction of the HLURB over cases of this nature.
Hence, there is a need for the Court to make a
definite ruling on a question of law - the matter of
jurisdiction over the criminal aspect of PD 957.
Jurisdiction over criminal actions
arising from violations of PD 957
is vested in the regular courts.
Jurisdiction is" conferred by law and determined by
the material averments in the complaint as well as
the character of the relief sought.15 The scope and
limitation of the jurisdiction of the HLURB are
well-defined.'6 Its precusor, the National Housing
Authority (NHA),17 was vested under PD 957 with
exclusive jurisdiction to regulate the real estate
trade and business,18 specifically the registration of
subdivision or condominium projects and dealers,
brokers and salesmen of subdivision lots or
condominium units, issuance and suspension of
license to sell; and revocation of registration
certificate and license to sell. Its jurisdiction was
later expanded under PD 1344 (1978) to include
adjudication of certain cases, to wit:
Sec. 1. In the exercise of its functions
to regulate the real estate trade and business and in
addition to its powers provided for in Presidential
Decree No. 957, the National Housing Authority
shall have the exclusive jurisdiction to hear and
decide cases of the following nature:
a) Unsound real estate business practices;
b) Claims involving refund and any other claims
filed by subdivision lot or condominium unit buyer
against the project owner, developer, dealer, broker
or salesman; and
c) Cases involving specific performance of
contractual and statutory obligations filed by buyers
of subdivision lot or condominium unit against the
owner, developer, dealer, broker or salesman.
(Italics supplied)
It is a settled rule of statutory construction that the
express mention of one thing in the law means the
exclusion of others not expressly mentioned. This
rule is expressed in the familiar maxim expressio
unius est exclusio alterius[19]. Where a statute, by
its terms, is expressly limited to certain matters, it
may not, by interpretation or construction, be
extended to others. The rule proceeds from the
premise that the legislature would not have made
specified enumerations in a statute had the intention
been not to restrict its meaning and to confine its
terms to statute had the intention been not to restrict
its meaning and to confine its terms to those
expressly mentioned.[20] Noticeably, cases that are
criminal in nature are not mentioned in the
enumeration quoted above. The primordial function
of the HLURB, after all, is the regulation of the real
estate trade and business and not the conviction and
punishment of criminals. "It may be conceded that
the legislature may confer on administrative boards
or bodies quasi-judicial powers involving the
exercise of judgment and discretion, as incident to
the performance of administrative functions. But in
so doing, the legislature must state its intention in
express terms that would leave no doubt, as even
such quasi-judicial prerogatives must be limited, if
they are to be valid, only to those incidental to or in
connection with the performance of administrative
duties, which do not amount to conferment of
jurisdiction over a matter exclusively vested in the
courts".[21]
Administrative agencies being tribunals of limited
jurisdiction can only wield such powers as are
specifically granted to them by their enabling
statutes. PD 957 makes the following specific grant
of powers to the NHA (now HLURB) for the
imposition of administrative fines, and it also
mentions penalties for criminal cases, to wit:
Sec. 38. Administrative Fines.- The Authority may
prescribe and impose fines not exceeding ten
thousand pesos for violations of the provisions of
this Decree or any rule or regulation
thereunder. Fines shall be payable to the Authority
and enforceable through writs of execution in
accordance with the provisions of the Rules of
Court (Italics supplied)
Sec. 39. Penalties.- Any person who shall violate
any of the provisions of this Decree and/or any rule
or regulation that may be issued pursuant to this
Decree shall, upon conviction, be punished by a fine
of not more than twenty thousand (P20,000.00)
pesos and/or imprisonment of not more than ten
years: Provided, That in the case of corporations,
partnership, cooperatives, or associations, the
President, Manager or Administrator or the person
who has charge of the administration of the business
shall be criminally responsible for any violation of
this/Decree and/or the rules and regulations
promulgated pursuant thereto,
Having limited, under Section 38 of PD 957, the
grant of power to the former NHA, now HLURB,
over the imposition of fines to those which do not
exceed ten thousand pesos, it is clear that the power
in relation to criminal liability mentioned in the
immediately succeeding provision, to impose, upon
conviction, fines above ten thousand pesos
and/or imprisonment, was not conferred on
it. Section 39, unlike Section 38, conspicuously
does not state that it is the MIA that may impose the
punishment specified therein.
Not having been specifically conferred with power
to hear and decide cases which are criminal in
nature, as well as to impose penalties therefor, we
find that the HLURB has no jurisdiction over
criminal actions arising from violations of PD 957.
On the other hand, BP Big. 129 states:
Sec. 20. Jurisdiction in Criminal Cases. - Regional
Trial Courts shall exercise exclusive original
jurisdiction in all criminal cases not within the
exclusive jurisdiction of any court, tribunal or body,
except those now falling under the exclusive and
concurrent jurisdiction of the Sandiganbayan which
shall hereafter be exclusively taken cognizance of
by the latter.
Based on the above-quoted provision, it is the RTC
that has jurisdiction over criminal cases arising
from violations of PD 957.
In the present case, the affidavit-
complaint[23] alleges the violation of Section 23
oFTD 957 and asks for the institution of a criminal
action against respondent Yap, as President of
Primetown. The Office of the City Prosecutor
found probable cause for the filing of
an'Information for the subject offense. The DOJ
made no reversal of such finding of probable
cause. Instead, it directed the withdrawal of the
information on the erroneous premise that it is the
HLURB which has jurisdiction over the
case. However, as above-discussed, and contrary to
the resolution of the Secretary of Justice, it is not
the HLURB but the RTC that has jurisdiction to
hear the said criminal action.
WHEREFORE, the petition is GRANTED. The
assailed October 2, 2002 and January 13, 2003
Orders of the Regional Trial Court of Lapu-Lapu
City, Branch 54, are REVERSED and SET
ASIDE. The said Court is DIRECTED to proceed
with the arraignment of the respondent and to hear
the case with dispatch.
SO ORDERED.
Del Monte Phils., Inc Employees Reform
leased a substantial portion of the land to Del Monte
Beneficiaries Cooperative v. Jesus
Philippines, Inc. (DMPI) under Section 8 of R.A.
DECISION
No. 6657 through a Growers Contract
MENDOZA, J.: dated February 21, 1989.

This is a petition for review on

certiorari[1] assailing the Resolutions[2] of the Court On July 7, 1998, DEARBC filed a complaint
of Appeals (CA) in CA-G.R. SP No. 01715, which
dismissed the petition filed by Del Monte for Recovery of Possession and Specific
Philippines Inc. Employees Agrarian Reform
Beneficiaries Cooperative (DEARBC), challenging Performance with Damages[6] with the DARAB
the May 12, 2006 Decision[3] of the Central Office Region 10 Office against several respondents,
of the Department of Agrarian Reform Adjudication
Board (DARAB). For lack of jurisdiction, the among whom were Jesus Sangunay (Sangunay) and
DARAB reversed and set aside the ruling of the
Sonny Labunos (Labunos).
DARAB Regional Adjudicator (Adjudicator) who
ordered the respondents to peacefully vacate certain Essentially, DEARBC claimed that both
portions of the subject landholding.[4]
Sangunay and Labunos illegally entered portions of
The Court is now urged to rule on the issue
its property called Field 34. Sangunay utilized
of jurisdiction of regular courts over petitions for
approximately one and a half (1 ) hectare
recovery of possession vis--vis the original, primary
portion[7] where he planted corn, built a house and
and exclusive jurisdiction of the Department of
resided from 1986 to the present. Labunos, on the
Agrarian Reform (DAR) and the DARAB over
other hand, tilled an area of approximately eight (8)
agrarian disputes and/or agrarian reform
hectares where he planted fruit trees, gmelina,
implementation as provided for under Section 50 of
mahogany and other crops as a source of his
Republic Act No. 6657 (R.A. 6657).
livelihood.[8] Both respondents refused to return the
The Facts
parcels of land notwithstanding a demand to vacate
The property subject of this case is a
them. This illegal occupation resulted in the
portion of an entire landholding located in
deprivation of the proper and reasonable use of the
Sankanan, Manolo Fortich, Bukidnon, with an area
land and damages.
of 1,861,922 square meters, more or less, covered
On December 11, 1990, the Adjudicator
by Original Certificate of Title No. AO-3
ruled in favor of DEARBC on the ground that the
[Certificate of Land Ownership
respondents failed to present proof of ownership
Award (CLOA)].[5] The said landholding was
over the subject portions of the
awarded to DEARBC, an agrarian cooperative and
landholding. According to the Adjudicator, their
beneficiary under the Comprehensive Agrarian
bare allegation of possession, even prior to the
Reform Program (CARP). Subsequently, DEARBC
award of the land to DEARBC, did not suffice as
proof of ownership. Thus:
In the series of hearing
conducted by this Adjudicator and
in the position papers submitted by
some of the defendants, none of
them was able to present proof,
either documentary or otherwise,
that they owned the areas they
respectively occupied and
cultivate[d], or that their occupation
and cultivation was with the consent
and authority of the complainant.
X x x against all reasons, the
fact remains that their occupation
and cultivation thereof, granting it is
true, have not been validated by the
DAR and they were not among the
identified FBs over the said subject
landholding.[9]
Aggrieved, respondents elevated the case to
the DARAB Central Office before which Sangunay
filed his position paper. He claimed that the subject
property was located along the Maninit River and
was an accrual deposit. He inherited the land from
his father in 1948 and had since been in open,
public, adverse, peaceful, actual, physical, and
continuous possession thereof in the concept of an
owner. He cultivated and lived on the land with the
knowledge of DEARBC. Sangunay presented Tax
Declaration No. 15-018 and Real Property
Historical Ownership issued by the Municipal
Assessor of Manolo Fortrich, showing that he had
declared the property for taxation purposes long
before DEARBC acquired it. In sum, Sangunay
asserted that, as a qualified farmer-beneficiary, he
was entitled to security of tenure under the agrarian
reform law and, at any rate, he had already acquired
the land by prescription.
For his part, Labunos reiterated the above
arguments and added that the subject portion of the
landholding was previously owned by one Genis
Valdenueza who sold it to his father, Filoteo, as
early as 1950. Like Sangunay, he asserted rights of
retention and ownership by prescription because he
had been in open, public, adverse, peaceful, actual,
physical, and continuous possession of the
landholding in the concept of an owner.[10]
In its May 12, 2006 Decision,[11] the
DARAB dismissed the case for lack of
jurisdiction. It ruled that the issue of ownership of
the subject land classifies the controversy as a
regular case falling within the jurisdiction of regular
courts and not as an agrarian dispute.[12] Thus:
X x x the plaintiff-appellees
cause of action is for the recovery of
possession and specific performance
with damages with respect to the
subject landholding. Such cause of
action flows from the plaintiff-
appellees contention that it owns the
subject landholding. On the other
hand, defendant-appellants refuted
and assailed such ownership as to
their respective landholdings. Thus,
the only question in this case is who
owns the said landholdings. Without
doubt, the said question classified
the instant controversy to a regular
case. At this premise, We hold that
the only issue to be resolved by this
Board is whether or not the instant
case presents an agrarian dispute
and is therefore well within Our
jurisdiction.
 of the affiant therein
xxx are not indicated;

In the case at bar, petitioner- c) The affiant is

appellants wanted to recover x x the not authorized to
subject landholding on the premise sign the same for
of ownership xxx. Defendants- and in behalf of the
appellants assail such allegations petitioner
saying that the landholdings are cooperative;
accrual deposits and maintaining
their open, peaceful and adverse 2) The attached copies of the
possession over the same. Motion for Reconsideration filed
Indubitably, there assertions and before the DARAB Quezon City
issues classify the present and the Complaint filed before
controversy as a regular case. As the DAR, Region XD, and the
such, clearly, this Board has no Decision and Resolution
jurisdiction to rule upon the instant rendered therein are mere plain
case. Obviously, the dispute photocopies, in violation of Sec.
between the parties does not relate 6 par. (c), Rule 43, supra.
to any tenurial arrangement. Thus,
this Board has no jurisdiction over
the same.
In a motion for reconsideration, DEARBC

DEARBC challenged the DARAB Decision invoked substantial compliance with the pertinent

in the CA through a petition for review filed under procedural rules, pointing to the attached Secretarys

Rule 43 of the Rules of Civil Procedure. In its Certificate as sufficient proof of authority given to

Resolution dated June 27, 2007,[13] the CA the President and Chairman of the Board, Dennis

dismissed the petition for procedural infirmities in Hojas (Hojas), to represent DEARBC. On August

its verification, certification and attachments, viz: 24, 2007,[14] the CA denied the motion because
DEARBC failed to attach a copy of the board
1) The Verification and
Certification is defective due to resolution showing Hojas authority to file the
the following reasons:
petition. This was a fatal error that warranted
a) There is no dismissal of the petition, according to the appellate
assurance that the
allegations in the court.
petition are based on Hence, this petition for review.
personal knowledge
and in authentic With regard to the dismissal of the case by
records, in violation
of Section 4 par. (2), the CA on technical grounds, the Court is of the
Rule 7 of the view that it was correct. DEARBC clearly failed to
Revised Rules of
Civil Procedure; comply with the rules which mistake was a fatal
error warranting the dismissal of the petition for
b) The Community
Tax Certificate Nos. review. However, it has been the constant ruling of
this Court that every party-litigant should be
afforded the amplest opportunity for the proper and
just disposition of his cause, free from constraints of
technicalities.[15] Rules of procedure are mere tools
designed to expedite the resolution of cases and
other matters pending in court. A strict and rigid
application of the rules that would result in
technicalities that tend to frustrate rather than
promote justice must be avoided.[16] Thus, the Court
opts to brush aside the procedural flaw and resolve
the core issue of jurisdiction as it has been
discussed by the parties anyway.
Position of the Parties
DEARBC claims that the action it filed for
recovery of possession falls within the jurisdiction
of the DARAB because it partakes of either a
boundary dispute, a correction of a CLOA or an
ouster of an interloper or intruder found under
Section 1 of Rule 11 of the 2003 DARAB Rules of
Procedure[17] and Administrative Order 03 Series of
2003.[18] Under those rules, any conflict involving
agricultural lands and the rights of beneficiaries is
within the jurisdiction of the DARAB.
In his Comment,[19] Labunos argues that
only questions of law may be resolved in appeals
under Rule 45 and that it is the decision of the CA
which must be challenged and not the DARAB
decision. On the merits, he cites cases where this
Court ruled that the jurisdiction of the DARAB is
limited only to agrarian disputes and other matters
relating to the implementation of the CARP. The
subject land has not been transferred, distributed
and/or sold to tenants, and it is obvious that the
complaint is not for the correction of a title but for
the recovery of possession and specific
performance. Issues of possession may be dealt with
by the DARAB only when they relate to agrarian
disputes. Otherwise, jurisdiction lies with the
regular courts.
Sangunay prays that he be declared as the
owner of the land, particularly his area in Field 34,
based on the following grounds: 1] that the tax
receipts and Tax Declaration No. 15-018 were
issued in his name; 2] that R.A. No. 6657 provides
that farmers already in place and those not
accommodated in the distribution of privately-
owned lands must be given preferential rights in the
distribution of lands from the public domain (to
which the subject land as an accretion belongs); and
3] that acquisitive prescription had set in his favor.
The Courts Ruling
The Court finds no merit in the petition.
Where a question of jurisdiction between the
DARAB and the Regional Trial Court is at the core
of a dispute, basic jurisprudential tenets come into
play. It is the rule that the jurisdiction of a tribunal,
including a quasi-judicial office or government
agency, over the nature and subject matter of a
petition or complaint is determined by the material
allegations therein and the character of the relief
prayed for[20] irrespective of whether the petitioner
or complainant is entitled to any or all such
reliefs.[21] In the same vein, jurisdiction of the court
over the subject matter of the action is not affected
by the pleas or the theories set up by the defendant to farmworkers, tenants, and other agrarian reform
in an answer or a motion to dismiss. Otherwise, beneficiaries, whether the disputants stand in the
jurisdiction will become dependent almost entirely proximate relation of farm operator and beneficiary,
upon the whims of the defendant.[22] landowner and tenant, or lessor and lessee.[26]
Under Section 50 of R.A. No. 6657[23] and
as held in a string of cases, the DAR is vested with The following allegations were essentially
the primary jurisdiction to determine and adjudicate contained in the complaints filed separately against
agrarian reform matters and shall have the exclusive the respondents before the DARAB with some
jurisdiction over all matters involving the variance in the amount of damages and fees prayed
implementation of the agrarian reform for:
program.[24] The DARAB was created, thru 1. The
Executive Order No. 109-A, to assume the powers complainant is an agrarian
cooperative duly registered and
and functions with respect to the adjudication of organized under the laws of the
Republic of the Philippines xxx.
agrarian reform cases. Hence, all matters involving
the implementation of agrarian reform are within 2. Complainant is
an awardee of Comprehensive
the DARs primary, exclusive and original Agrarian Reform Program (CARP),
jurisdiction. At the first instance, only the DARAB, situated at Limbona, Bukidnon
under Original Certificate of Title
as the DARs quasi-judicial body, can determine and A-3 as evidenced by Certificate of
Land Ownership Award (CLOA)
adjudicate all agrarian disputes, cases, xxx.
controversies, and matters or incidents involving the
xxxx
implementation of the CARP.[25] An agrarian
5. The defendant illegally
dispute refers to any controversy relating to tenurial
entered and tilled the land owned by
arrangements, whether leasehold, tenancy, the complainant, inside the portion
of Field 34, with an area of one and
stewardship, or otherwise, over lands devoted to a half (1 ) hectares, more or less,
agriculture, including disputes concerning located at Sankanan, Manolo
Fortrich, Bukidnon xxx.
farmworkers associations or representation of
xxxx
persons in negotiating, fixing, maintaining,
changing, or seeking to arrange terms or conditions 8. Demands were made by
the complainant for the defendant to
of such tenurial arrangements. It includes any vacate the premises but the latter
adamantly refused and did not
controversy relating to compensation of lands
vacate the area xxx.
acquired under this Act and other terms and
conditions of transfer of ownership from landowner
 9. The defendant has caused
actual damages in the amount of xxx
in the form of back rentals and an
estimated amount of xxx brought
about by the defendant for all his
unlawful acts towards the land and
the owner of the land.
10. To recover the possession
of the land and to protect and
vindicate its rights, the complainant
was compelled to engage the servces
of a legal counsel x x x
PRAYER
WHEREFORE, premises
considered, it is most respectfully
prayed of this Honorable Board, that
a decision be rendered:
Ejecting the defendant from
the subject landholding and/or
causing him to cede possession of
the land to
complainant. [Emphasis ours]
xxxx
Verily, all that DEARBC prayed for was the
ejectment of the respondents from the respective
portions of the subject lands they allegedly entered
and occupied illegally. DEARBC avers that, as the
owner of the subject landholding, it was in prior
physical possession of the property but was deprived
of it by respondents intrusion.
Clearly, no agrarian dispute exists between
the parties. The absence of tenurial arrangements,
whether leasehold, tenancy, stewardship or
otherwise, cannot be overlooked.In this case, no
juridical tie of landownership and tenancy was
alleged between DEARBC and Sangunay or
Labunos, which would so categorize the
controversy as an agrarian dispute. In fact, the
respondents were contending for the ownership of
the same parcels of land.[27]
This set of facts clearly comprises an action
for recovery of possession. The claim of being
farmer-beneficiaries with right of retention will not
divest the regular courts of jurisdiction, since the
pleas of the defendant in a case are immaterial.
The ruling in DAR v. Hon. Hakim S.
Abdulwahid and Yupangco Cotton Mills, Inc.[28] is
inapplicable to the present case. The complaint
in Abdulwahid impugn(ed) the CARP coverage of
the landholding involved and its redistribution to
farmer beneficiaries, and (sought) to effect a
reversion thereof to the original owner, Yupangco
and essentially prayed for the annulment of the
coverage of the disputed property within the CARP.
The dispute was on the terms and conditions of
transfer of ownership from landlord to agrarian
reform beneficiaries over which DARAB has
primary and exclusive original jurisdiction, pursuant
to Section 1(f), Rule II, DARAB New Rules of
Procedure.[29]
Although the complaint filed by DEARBC
was similarly denominated as one for recovery of
possession, it utterly lacks allegations to persuade
the Court into ruling that the issue encompasses an
agrarian dispute.
 Madrinan v. Madrinan GR 159374 Jul 12, 2007
DEARBCs argument that this case partakes
of either a boundary dispute, correction of a CLOA,
DECISION
and ouster of an interloper or intruder, as
CORONA, J.:
found under Section 1, Rule 11 of the 2003
DARAB Rules of Procedure,[30] is When a family breaks up, the children are
unavailing. Nowhere in the complaint was the
always the victims. The ensuing battle for custody
correction or cancellation of the CLOA prayed for,
of the minor children is not only a thorny issue but
much less mentioned. DEARBC merely asserted its
sole ownership of the awarded land and no also a highly sensitive and heart-rending affair.
boundary dispute was even hinted at.
Such is the case here. Even the usually technical

subject of jurisdiction became emotionally charged.

WHEREFORE, the petition is DENIED.

SO ORDERED. Petitioner Felipe N. Madrian and respondent

Francisca R. Madrian were married on July 7, 1993

in Paraaque City. They resided in San Agustin

Village, Brgy. Moonwalk, Paraaque City.

Their union was blessed with three sons and

a daughter: Ronnick, born on January 30, 1994;

Phillip, born on November 19, 1996; Francis

Angelo, born on May 12, 1998 and Krizia Ann,

born on December 12, 2000.

After a bitter quarrel on May 18, 2002, petitioner

allegedly left their conjugal abode and took their

three sons with him to Ligao City, Albay and

subsequently to Sta. Rosa, Laguna. Respondent

sought the help of her parents and parents-in-law to to take custody of their three sons because she was

patch things up between her and petitioner to no habitually drunk, frequently went home late at night

avail. She then brought the matter to the Lupong or in the wee hours of the morning, spent much of

Tagapamayapa in their barangay but this too her time at a beer house and neglected her duties as

proved futile. a mother. He claimed that, after their squabble on

May 18, 2002, it was respondent who left, taking

Thus respondent filed a petition for habeas
their daughter with her. It was only then that he
corpus of Ronnick, Phillip and Francis Angelo in
went to Sta. Rosa, Laguna where he worked as a
the Court of Appeals, alleging that petitioners act of
tricycle driver. He submitted a certification from the
leaving the conjugal dwelling and going to Albay
principal of the Dila Elementary School in Sta.
and then to Laguna disrupted the education of their
Rosa, Laguna that Ronnick and Phillip were
children and deprived them of their mothers care.
enrolled there. He also questioned the jurisdiction of
She prayed that petitioner be ordered to appear and
the Court of Appeals claiming that under Section
produce their sons before the court and to explain
5(b) of RA 8369 (otherwise known as the Family
why they should not be returned to her custody.
Courts Act of 1997) family courts have exclusive

Petitioner and respondent appeared at the hearing original jurisdiction to hear and decide the petition

on September 17, 2002. They initially agreed that for habeas corpus filed by respondent.[3]

petitioner would return the custody of their three

For her part, respondent averred that she did
sons to respondent. Petitioner, however, had a
not leave their home on May 18, 2002 but was
[1]
change of heart and decided to file a
driven out by petitioner. She alleged that it was
memorandum.
petitioner who was an alcoholic, gambler and drug

On September 3, 2002, petitioner filed his addict. Petitioners alcoholism and drug addiction

memorandum[2] alleging that respondent was unfit impaired his mental faculties, causing him to
commit acts of violence against her and their corpus and insists that jurisdiction over the case is

children. The situation was aggravated by the fact lodged in the family courts under RA 8369. He

that their home was adjacent to that of her in-laws invokes Section 5(b) of RA 8369:

who frequently meddled in their personal

Section 5. Jurisdiction of
problems. [4] Family Courts. The Family Courts
shall have exclusive original
jurisdiction to hear and decide the
following cases:
On October 21, 2002, the Court of
xxxxxxxxx
Appeals[5] rendered a decision[6] asserting its
b) Petitions for guardianship,
authority to take cognizance of the petition and custody of
children, habeas
ruling that, under Article 213 of the Family Code, corpus in relation to the
latter;
respondent was entitled to the custody of Phillip and

Francis Angelo who were at that time aged six and xxxxxxxxx

four, respectively, subject to the visitation rights of

Petitioner is wrong.
petitioner. With respect to Ronnick who was then

eight years old, the court ruled that his custody In Thornton v. Thornton,[7] this Court resolved the

should be determined by the proper family court in issue of the Court of Appeals jurisdiction to issue

a special proceeding on custody of minors under writs of habeas corpus in cases involving custody

Rule 99 of the Rules of Court. of minors in the light of the provision in RA 8369

giving family courts exclusive original jurisdiction

Petitioner moved for reconsideration of the
over such petitions:
Court of Appeals decision but it was denied. Hence,
The Court of Appeals
this recourse.
should take cognizance of the case
since there is nothing in RA 8369
that revoked its jurisdiction to
Petitioner challenges the jurisdiction of the issue writs of habeas
corpusinvolving the custody of
Court of Appeals over the petition for habeas minors.
 xxxxxxxxx Section
20. Petition for writ
We rule therefore that RA 8369 did of habeas corpus. A
not divest the Court of Appeals verified petition for
and the Supreme Court of their a writ of habeas
jurisdiction over habeas corpus involving
corpus cases involving the custody custody of minors
of minors. shall be filed with
the Family Court.
xxxxxxxxx The writ shall be
enforceable within
The provisions of RA 8369 its judicial region to
reveal no manifest intent to revoke which the Family
the jurisdiction of the Court of Court belongs.
Appeals and Supreme Court to issue xxxxxxxxx
writs of habeas corpus relating to
the custody of minors. Further, it The petition
cannot be said that the provisions of may likewise be
RA 8369, RA 7092 [An Act filed with
Expanding the Jurisdiction of the the Supreme
Court of Appeals] and BP 129 [The Court, Court of
Judiciary Reorganization Act of Appeals, or with
1980] are absolutely incompatible any of its
since RA 8369 does not prohibit the members and, if so
Court of Appeals and the Supreme granted, the writ
Court from issuing writs of habeas shall be
corpus in cases involving the enforceable
custody of minors. Thus, the anywhere in the
provisions of RA 8369 must be read Philippines. The
in harmony with RA 7029 and BP writ may be made
129 that family courts have returnable to a
concurrent jurisdiction with the Family Court or to
Court of Appeals and the any regular court
Supreme Court in petitions within the region
for habeas corpus where the where the petitioner
custody of minors is at resides or where the
issue.[8] (emphases supplied) minor may be found
The jurisdiction of the Court of Appeals for hearing and
over petitions for habeas corpus was further decision on the
affirmed by A.M. No. 03-03-04-SC (April 22, merits.
2004) in Re: Rule on Custody of Minors and Writ
of Habeas Corpus in Relation to Custody of From the foregoing, there is
Minors: no doubt that the Court of Appeals
In any case, whatever and Supreme Court have
uncertainty there was has been concurrent jurisdiction with
settled with the adoption of A.M. family courts in habeas
No. 03-03-04-SC Re: Rule on corpus cases where the custody of
Custody of Minors and Writ of minors is involved.[9] (emphases
Habeas Corpus in Relation to supplied)
Custody of Minors. Section 20 of
the rule provides that:
 We note that after petitioner moved out of the ancillary remedy that may be availed of in

their Paraaque residence on May 18, 2002, he twice conjunction with a petition for custody of minors

transferred his sons to provinces covered by under Rule 99 of the Rules of Court. In other words,

different judicial regions. This situation is what the issuance of the writ is merely ancillary to the

the Thornton interpretation of RA 8369s provision custody case pending before the family court. The

on jurisdiction precisely addressed: writ must be issued by the same court to avoid

[The reasoning that by giving splitting of jurisdiction, conflicting decisions,

family courts exclusive jurisdiction
over habeas corpus cases, the interference by a co-equal court and judicial
lawmakers intended them to be the
sole courts which can issue writs
instability.
of habeas corpus] will result in an
iniquitous situation, leaving
individuals like [respondent]
without legal recourse in obtaining The rule therefore is: when by law
custody of their children.
Individuals who do not know the jurisdiction is conferred on a court or judicial
whereabouts of minors they are
looking for would be helpless since officer, all auxiliary writs, processes and other
they cannot seek redress from
family courts whose writs are means necessary to carry it into effect may be
enforceable only in their respective
territorial jurisdictions. Thus, if a employed by such court or officer.[11] Once a court
minor is being transferred from
one place to another, which seems
acquires jurisdiction over the subject matter of a
to be the case here, the petitioner
in a habeas corpus case will be left
without legal remedy. This lack of case, it does so to the exclusion of all other courts,
recourse could not have been the
intention of the lawmakers when including related incidents and ancillary matters.
they passed [RA 8369].[10]
Accordingly, the petition is
Moreover, a careful reading of Section 5(b)
hereby DENIED.
of RA 8369 reveals that family courts are vested
Costs against petitioner.
with original exclusive jurisdiction in custody cases,

not in habeas corpus cases. Writs of habeas SO ORDERED.

corpus which may be issued exclusively by family

courts under Section 5(b) of RA 8369 pertain to

Yu v. Yu GR 164915 Mar 10, 2006
Petitioner and respondent later filed
DECISION
on April 5, 2002 before the appellate court a Joint
CARPIO MORALES, J.:
Motion to Approve Interim Visitation Agreement

On January 11, 2002, Eric Jonathan Yu which was, by Resolution of April 24, 2002,

(petitioner) filed a petition for habeas approved.

corpus before the Court of Appeals alleging that his On April 18, 2002, respondent filed before

estranged wife Caroline Tanchay-Yu (respondent) the appellate court a Motion for the Modification of

unlawfully withheld from him the custody of their her visiting rights under the Interim Visitation

minor child Bianca. The petition, which included Agreement. To the Motion, petitioner filed an

a prayer for the award to him of the sole custody of Opposition with Motion to Cite Respondent for

Bianca, was docketed as CA-G.R. SP No. 68460. Contempt of Court in light of her filing of the

Subsequently or on March 3, 2002, petition for declaration of nullity of marriage before

respondent filed a petition against petitioner before the PasigRTC which, so he contended, constituted

the Pasig Regional Trial Court (RTC) forum shopping.

for declaration of nullity of marriage and By Resolution of July 5, 2002, the appellate

dissolution of the absolute community of court ordered respondent and her counsel to make

property. The petition included a prayer for the the necessary amendment in her petition for

award to her of the sole custody of Bianca and for declaration of nullity of marriage before

the fixing of schedule of petitioners visiting rights the Pasig City RTC in so far as the custody aspect is

subject only to the final and executory judgment of concerned, under pain of contempt.

the Court of Appeals in CA-G.R. SP No. 68460. In compliance with the appellate courts

In the meantime, the appellate court, by Resolution of July 5, 2002, respondent filed a

Resolution of March 21, 2002, awarded petitioner Motion to Admit Amended Petition before

full custody of Bianca during the pendency of the the Pasig RTC. She, however, later filed in

habeas corpus case, with full visitation rights of December 2002 a Motion to Dismiss her petition,

respondent. without prejudice, on the ground that since she

started residing and conducting business at her new


address at Pasay City, constraints on resources and
her very busy schedule rendered her unable to
devote the necessary time and attention to the
petition. The Pasig RTC granted respondents
motion and accordingly dismissed the petition
without prejudice, by Order of March 28, 2003.
On June 12, 2003, petitioner filed his own
petition for declaration of nullity of marriage and
dissolution of the absolute community of property
before the Pasig RTC, docketed as JDRC Case No.
6190, with prayer for the award to him of the sole
custody of Bianca, subject to the final resolution by
the appellate court of his petition for habeas corpus.
The appellate court eventually dismissed
the habeas corpus petition, by Resolution of July 3,
2003, for having become moot and academic, the
restraint on the liberty of the person alleged to be in
restraint [having been] lifted.
In the meantime, respondent filed on July 24, 2003
before the Pasay RTC a petition for habeas corpus,
which she denominated as Amended Petition,
praying for, among other things, the award of
the sole custody to her of Bianca or, in the
alternative, pending the hearing of the petition, the
issuance of an order replicating and reiterating the
enforceability of the Interim Visiting Agreement
which was approved by the appellate court. The
petition was docketed as SP Proc. No. 03-0048.
Not to be outdone, petitioner filed on July 25, 2003
before the Pasig RTC in his petition for declaration
of nullity of marriage an urgent motion praying for
the custody of Bianca for the duration of the case.
Acting on respondents petition, Branch 113 of
the Pasay RTC issued a Writ of Habeas Corpus, a
Hold Departure Order and Summons addressed to
petitioner, drawing petitioner to file a motion to
dismiss the petition on the ground of lack of
jurisdiction, failure to state a cause of action, forum
shopping and litis pendentia, he citing the pending
petition for declaration of nullity of marriage which
he filed before the Pasig RTC.
The Pasay RTC, in the meantime, issued an Order
of August 12, 2003 declaring that pending the
disposition of respondents petition, Bianca should
stay with petitioner from Sunday afternoon to
Saturday morning and with the company of her
mother from Saturday 1:00 in the afternoon up to
Sunday 1:00 in the afternoon. To this Order,
petitioner filed a Motion for Reconsideration,
arguing that the Pasay RTC did not have
jurisdiction to issue the same. He likewise filed a
Manifestation of August 14, 2003 stating that he
was constrained to submit to the said courts order
but with the reservation that he was not submitting
the issue of custody and himself to its jurisdiction.
Respondent soon filed her Answer with Counter-
Petition on the nullity case before the Pasig RTC
wherein she also prayed for the award of the sole
custody to her of Bianca, subject to the final
disposition of the habeas corpus petition which she
filed before the Pasay RTC.
By Omnibus Order of October 30, 2003, having amended his petition before the Pasig RTC
the Pasig RTC asserted its jurisdiction over the as soon as the Court of Appeals dismissed his
custody aspect of the petition filed by petitioner and petition for habeas corpus[5] (on July 3, 2003).
directed the parties to comply with the provisions of
the Interim Visitation Agreement, unless they Finally, the Pasay RTC held that there was
agreed to a new bilateral agreement bearing the no litis pendentia because two elements thereof are
approval of the court; and granted custody of lacking, namely, 1) identity of the rights asserted
Bianca to petitioner for the duration of the case. and reliefs prayed for, the relief being founded on
the same facts, and 2) identity with respect to the
The Pasay RTC in the meantime denied, by Order two preceding particulars in the two cases such that
of November 27, 2003, petitioners motion to any judgment that may be rendered in the pending
dismiss. The court, citing Sombong v. Court of case, regardless of which party is successful, would
[1]
Appeals, held that in custody cases involving amount to res judicata in the other case.[6]
minors, the question of illegal and involuntary
restraint of liberty is not the underlying rationale for Petitioner thereupon assailed
the availability of a writ of habeas corpus as a the Pasay RTCs denial of his Motion to Dismiss via
remedy; rather, a writ of habeas corpus is Petition for Certiorari, Prohibition and Mandamus
prosecuted for the purpose of determining the right before the appellate court wherein he raised the
[2]
of custody over the child. And it further held that following issues:
the filing before it of the habeas corpus case by
respondent, who is a resident of Pasay, is well A. RESPONDENT JUDGE
COMMITTED GRAVE ABUSE OF
within the ambit of the provisions of A.M. No. 03- DISCRETION BY DENYING
04-04-SC.[3] PETITIONERS MOTION TO
DISMISS DESPITE THE
EVIDENT LACK OF
On the issue of forum shopping, JURISDICTION OVER THE
the Pasay RTC held that it is petitioner, not SUBJECT MATTER OF
CUSTODY, LITIS PENDENTIA,
respondent, who committed forum shopping, he
AND DELIBERATE AND
having filed (on June 12, 2003) the petition for WILLFUL FORUM-
declaration of nullity of marriage before SHOPPING ON THE PART OF
RESPONDENT CAROLINE T.
the Pasig RTC while his petition for habeas corpus
YU.[7]
before the Court of Appeals was still pending.[4]
B. RESPONDENT JUDGE
ACTED WHIMSICALLY,
The Pasay RTC held that CAPRICIOUSLY AND
assuming arguendo that petitioners filing before ARBITRARILY IN ISSUING THE
the Pasig RTC of the declaration of nullity of AUGUST 12, 2003
ORDER GRANTING
marriage case did not constitute forum shopping, it RESPONDENT CAROLINE T. YU
(the Pasay RTC) acquired jurisdiction over the OVERNIGHT VISITATION
custody issue ahead of the Pasig RTC, petitioner not RIGHTS OVER THE MINOR
CHILD BIANCA AND DENYING
 PETITIONERS URGENT MOTION Hence, the present petition filed by
FOR RECONSIDERATION OF
THE SAID petitioner faulting the appellate court for
[8]
ORDER. (Underscoring supplied)
I. . . . DECLARING THAT
PETITIONER ERIC YU
COMMITTED FORUM-
By Decision of August 10, 2004,[9] the SHOPPING IN FILLING THE
appellate court denied petitioners petition, it holding PETITION FOR DECLARATION
that the assumption of jurisdiction by OF NULLITY OF MARRIAGE
WITH PRAYER FOR CUSTODY
the Pasay RTC over the habeas corpus case does not BEFORE THE PASIG FAMILY
constitute grave abuse of discretion; the filing by COURT AND THAT THE LATTER
respondent before the Pasay RTC of a petition for COURT WAS BARRED FROM
ACQUIRING
habeas corpus could not be considered forum JURISDICTION OVER THE
shopping in the strictest sense of the word as before CUSTODY ASPECT OF THE
NULLITY CASE IN RECKLESS
she filed it after petitioners petition for habeas
DISREGARD OF THE PRINCIPLE
corpus filed before the appellate court was THAT THE FILING OF A
dismissed; and it was petitioner who committed PETITION FOR NULLITY OF
MARRIAGE BEFORE THE
forum shopping when he filed the declaration of
FAMILY COURTS VESTS THE
nullity of marriage case while his habeas corpus LATTER WITH EXCLUSIVE
petition was still pending before the appellate court. JURISDICTION TO DETERMINE
THE NECESSARY ISSUE OF
CUSTODY.
In fine, the appellate court held that since
respondent filed the petition for declaration of II. . . . APPL[YING] THE
LAW OF THE CASE DOCTRINE
nullity of marriage before the Pasig RTC during BY RULING THAT
the pendency of the habeas corpus case he filed THE PASIG FAMILY COURT
before the appellate court, whereas respondent filed HAS NO JURISDICTION OVER
THE CUSTODY ASPECT OF THE
the habeas corpus petition before the Pasay RTC on NULLITY CASE ON THE BASIS
July 24, 2003 after the dismissal on July 3, 2003 by OF THE JULY 5,
2002 RESOLUTION OF THE
the appellate court of petitioners habeas corpus case,
COURT OF APPEALS IN CA GR
jurisdiction over the issue custody of Bianca did not SP NO. 68460 WHEN THE SAID
attach to the Pasig RTC. RESOLUTION CLEARLY
APPLIES ONLY TO THE
NULLITY CASE FILED BY
As for the questioned order of PRIVATE RESPONDENT ON
the Pasay RTC which modified the Interim Visiting MARCH 7, 2002 DOCKETED AS
JDRC CASE NO. 5745 AND NOT
Agreement, the appellate court, noting that the TO HEREIN PETITIONERS JUNE
proper remedy for the custody of Bianca was filed 12, 2003 PETITION FOR
with the Pasay RTC, held that said court had the NULLITY DOCKETED AS JDRC
CASE NO. 6190.
authority to issue the same.
III. . . . DECLARING THAT
THE PASIG FAMILY COURT
 MUST YIELD TO THE constitute res judicata on the habeas corpus case
JURISDICTION OF THE PASAY
COURT INSOFAR AS THE ISSUE before the Pasay RTC since the former has
OF CUSTODY IS CONCERNED jurisdiction over the parties and the subject matter.
IN GRAVE VIOLATION OF THE There is identity in the causes of action
DOCTRINE OF JUDICIAL
STABILITY AND NON- in Pasig and Pasay because there is identity in the
INTERFERENCE. facts and evidence essential to the resolution of the
identical issue raised in both actions[11] whether it
IV. . . . RULING
THAT PRIVATE RESPONDENT would serve the best interest of Bianca to be in the
CAROLINE DID NOT COMMIT custody of petitioner rather than respondent or vice
FORUM-SHOPING IN FILING
versa.
THE HABEAS CORPUS CASE
WITH PRAYER FOR Since the ground invoked in the petition for
CUSTODYBEFORE THE declaration of nullity of marriage before
RESPONDENT PASAY COURT
DESPITE THE FACT THAT AN the Pasig RTC is respondents alleged psychological
EARLIER FILED PETITION FOR incapacity to perform her essential marital
DECLARATION OF NULLITY OF obligations[12] as provided in Article 36 of the
MARRIAGE WITH PRAYER FOR
CUSTODY IS STILL PENDING Family Code, the evidence to support this cause of
BEFORE THE PASIG FAMILY action necessarily involves evidence of respondents
COURT WHEN THE FORMER fitness to take custody of Bianca. Thus, the
CASE WAS INSTITUTED.
elements of litis pendentia, to wit: a) identity of
V. . . . RULING parties, or at least such as representing the same
THAT RESPONDENT
interest in both actions; b) identity of rights asserted
CAROLINE YU DID NOT
SUBMIT TO THE and reliefs prayed for, the relief being founded on
JURISDICTION OF THE PASIG the same facts; and c) the identity in the two cases
FAMILY COURT BASED ON
should be such that the judgment that may be
AN ERRONEOUS FACTUAL
FINDING THAT SHE FILED rendered in the pending case would, regardless of
ON AUGUST 25, 2003 AN which party is successful, amount to res judicata in
OMNIBUS OPPOSITION IN
PETITIONERS ACTION FOR the other,[13] are present.
NULLITY BEFORE THE PASIG
COURT.[10](Underscoring Respondent argues in her Comment to the
supplied)
petition at bar that the Pasig RTC never acquired
The petition is impressed with merit. jurisdiction over the custody issue raised therein.
The main issue raised in the present petition
[T]he subsequent dismissal of
is whether the question of custody over Bianca the habeas corpus petition by the
should be litigated before the Pasay RTC or before Court of Appeals on 3 July 2003
the Pasig RTC. could not have the effect of
conferring jurisdiction over the issue
Judgment on the issue of custody in the on the Pasig court. For
nullity of marriage case before the Pasig RTC, the Pasig court to acquire jurisdiction
over the custody issue after the
regardless of which party would prevail, would
 dismissal of the habeas corpus
petition before the Court of Appeals, The final judgment in such
the rule is that petitioner must cases [for the annulment or
furnish the occasion for the declaration of nullity of
acquisition of marriage] shall provide for the
jurisdiction by repleading his cause liquidation, partition and distribution
of action for custody and invoking of the properties of the
said cause anew.[14] (Emphasis and spouses, thecustody and support of
underscoring supplied) the common children, and the
delivery of their
And respondent presumptive legitimes, unless such
[15]
other matters had been
cites Caluag v. Pecson, wherein this Court held: adjudicated in previous judicial
proceedings. (Emphasis and
Jurisdiction of the subject underscoring added)
matter of a particular case is
something more than the general
power conferred by law upon a court
to take cognizance of cases of the By petitioners filing of the case for
general class to which the particular declaration of nullity of marriage before
case belongs. It is not enough that a the Pasig RTC he automatically submitted the issue
court has power in abstract to try and
decide the class litigations [sic] to of the custody of Bianca as an incident
which a case belongs; it is necessary thereof. After the appellate court subsequently
that said power be properly invoked, dismissed the habeas corpus case, there was no need
or called into activity, by the filing of
a petition, or complaint or other for petitioner to replead his prayer for custody for,
appropriate pleading. (Underscoring as above-quoted provisions of the Family Code
supplied by Caroline.)[16]
provide, the custody issue in a declaration of nullity
case is deemed pleaded. That that is so gains light
from Section 21 of the Rule on Declaration Of
Specific provisions of law govern the case at
Absolute Nullity Of Void Marriages and Annulment
bar, however. Thus Articles 49 and 50 of the Family
of Voidable Marriages[18] which provides:
Code provide:

Art. 49. During Sec. 21. Liquidation,

the pendency of the action [for
annulment or declaration of nullity
of marriage] and in the absence of
adequate provisions in a written
agreement between the spouses, the
Court shall provide for the support of
the spouses and the custody and
support of their common
children. x x x It shall also provide
for appropriate visitation rights of
the other parent. (Emphasis and
underscoring supplied)[17]
Art. 50. x x x x
partition and distribution, custody,
support of common children and
delivery of their
presumptive legitimes.Upon entry of
the judgment granting the petition, or,
in case of appeal, upon receipt of the
entry of judgment of the appellate
court granting the petition, the
Family Court, on motion of either
party, shall proceed with the
liquidation, partition and
distribution of the properties of
the spouses, including custody,
support of common children and
 delivery of their
presumptive legitimes pursuant to
Articles 50 and 51 of the Family
Code unless such matters had been
adjudicated in previous judicial
proceedings. (Emphasis and
underscoring supplied)
Since this immediately-quoted provision
directs the court taking jurisdiction over a petition
for declaration of nullity of marriage to resolve the
custody of common children, by mere motion of
either party, it could only mean that the filing of a
new action is not necessary for the court to consider
the issue of custody of a minor.[19]
The only explicit exception to the earlier-
quoted second paragraph of Art. 50 of the Family
Code is when such matters had been adjudicated in
previous judicial proceedings, which is not the case
here.
The elements of litis pendentia having been
established, the more appropriate action criterion
guides this Court in deciding which of the two
pending actions to abate.[20]
The petition filed by petitioner for the
declaration of nullity of marriage before
the Pasig RTC is the more appropriate action to
determine the issue of who between the parties
should have custody over Bianca in view of the
express provision of the second paragraph of Article
50 of the Family Code. This must be so in line with
the policy of avoiding multiplicity of suits.[21]
The appellate court thus erroneously applied
the law of the case doctrine when it ruled that in
its July 5, 2002 Resolution that the pendency of the
habeas corpus petition in CA-G.R. SP No. 68460
prevented the Pasig RTC from acquiring
jurisdiction over the custody aspect of petitioners
petition for declaration of nullity. The factual
circumstances of the case refelected above do not
justify the application of the law of the
case doctrine which has been defined as follows:
Law of the case has been
defined as the opinion delivered on
a former appeal. It is a term applied
to an established rule that when an
appellate court passes on a
question and remands the case to
the lower court for further
proceedings, the question there
settled becomes the law of the case
upon subsequent appeal. It means
that whatever is once irrevocably
established as the controlling legal
rule or decision between the same
parties in the same case continues to
be the law of the case, whether
correct on general principles or not,
so long as the facts on which such
decision was predicated continue to
be the facts of the case before the
court. (Emphasis and underscoring
supplied, italics in the original)[22]
WHEREFORE, the petition
is GRANTED. The August 10, 2004 decision of the
Court of Appeals is REVERSED and SET
ASIDE, and another is
entered DISMISSING Pasay City Regional Trial
Court Sp. Proc. No. 03-0048-CFM and ordering
Branch 69 of Pasig City Regional Trial Court to
continue, with dispatch, the proceedings in JDRC
No. 6190.
SO ORDERED.
Oscar Reyes v. RTC Makati GR 165744 Aug 11,
2008
This Petition for Review on Certiorari under
Rule 45 of the Rules of Court seeks to set aside the
Decision of the Court of Appeals
(CA)[1] promulgated on May 26, 2004 in CA-G.R.
SP No. 74970. The CA Decision affirmed the Order
of the Regional Trial Court (RTC), Branch 142,
Makati City dated November 29, 2002[2] in Civil
Case No. 00-1553 (entitled "Accounting of All
Corporate Funds and Assets, and Damages") which
denied petitioner Oscar C. Reyes (Oscar) Motion to
Declare Complaint as Nuisance or Harassment Suit.
BACKGROUND FACTS
Oscar and private respondent Rodrigo C.
Reyes (Rodrigo) are two of the four children of the
spouses Pedro and Anastacia Reyes. Pedro,
Anastacia, Oscar, and Rodrigo each owned shares of
stock of Zenith Insurance Corporation (Zenith), a
domestic corporation established by their
family. Pedro died in 1964, while Anastacia died in
1993. Although Pedros estate was judicially
partitioned among his heirs sometime in the 1970s,
no similar settlement and partition appear to have
been made with Anastacias estate, which included
her shareholdings in Zenith. As of June 30, 1990,
Anastacia owned 136,598 shares of Zenith; Oscar
and Rodrigo owned 8,715,637 and 4,250 shares,
respectively.[3]
On May 9, 2000, Zenith and Rodrigo filed a
complaint[4] with the Securities and Exchange
Commission (SEC) against Oscar, docketed as SEC
Case No. 05-00-6615. The complaint stated that it
is a derivative suit initiated and filed by the
complainant Rodrigo C. Reyes to obtain an
accounting of the funds and assets of
ZENITH INSURANCE CORPORATION which are
now or formerly in the control, custody, and/or
possession of respondent [herein petitioner Oscar]
and to determine the shares of stock of deceased
spouses Pedro and Anastacia Reyes that were
arbitrarily and fraudulently appropriated [by
Oscar] for himself [and] which were not collated
and taken into account in the partition, distribution,
and/or settlement of the estate of the deceased
spouses, for which he should be ordered to account
for all the income from the time he took these shares
of stock, and should now deliver to his brothers and
sisters their just and respective
[5]
shares. [Emphasis supplied.]
In his Answer with Counterclaim,[6] Oscar
denied the charge that he illegally acquired the
shares of Anastacia Reyes. He asserted, as a defense,
that he purchased the subject shares with his own
funds from the unissued stocks of Zenith, and that
the suit is not a bona fide derivative suit because the
requisites therefor have not been complied with. He
thus questioned the SECs jurisdiction to entertain
the complaint because it pertains to the settlement of
the estate of Anastacia Reyes.
When Republic Act (R.A.) No. 8799[7] took
effect, the SECs exclusive and original jurisdiction
over cases enumerated in Section 5 of Presidential
Decree (P.D.) No. 902-A was transferred to the RTC
designated as a special commercial court.[8] The
records of Rodrigos SEC case were thus turned over
to the RTC, Branch 142, Makati, and docketed as
Civil Case No. 00-1553.
On October 22, 2002, Oscar filed a Motion
to Declare Complaint as Nuisance or Harassment
Suit.[9] He claimed that the complaint is a mere
nuisance or harassment suit and should, according to
the Interim Rules of Procedure for Intra-Corporate
Controversies, be dismissed; and that it is not a bona
fide derivative suit as it partakes of the nature of a

petition for the settlement of estate of the deceased
Anastacia that is outside the jurisdiction of a special
commercial court. The RTC, in its Order
dated November 29, 2002 (RTC Order), denied the
motion in part and declared:
A close reading of the Complaint disclosed the
presence of two (2) causes of action, namely: a) a
derivative suit for accounting of the funds and assets
of the corporation which are in the control, custody,
and/or possession of the respondent [herein
petitioner Oscar] with prayer to appoint a
management committee; and b) an action for
determination of the shares of stock of deceased
spouses Pedro and Anastacia Reyes allegedly taken
by respondent, its accounting and the corresponding
delivery of these shares to the parties brothers and
sisters. The latter is not a derivative suit and should
properly be threshed out in a petition for settlement
of estate.
Accordingly, the motion is
denied. However, only the derivative
suit consisting of the first cause of
action will be taken cognizance of by
this Court.[10]
Oscar thereupon went to the CA on a petition
for certiorari, prohibition, and mandamus[11] and
prayed that the RTC Order be annulled and set aside
and that the trial court be prohibited from
continuing with the proceedings. The appellate
court affirmed the RTC Order and denied the
petition in its Decision dated May 26, 2004. It
likewise denied Oscars motion for reconsideration
in a Resolution dated October 21, 2004.
Petitioner now comes before us on appeal through
a petition for review on certiorari under Rule 45 of
the Rules of Court.
ASSIGNMENT OF ERRORS
Petitioner Oscar presents the following points as
conclusions the CA should have made:
1. that the complaint is a mere nuisance or
harassment suit that should be dismissed under the
Interim Rules of Procedure of Intra-Corporate
Controversies; and
2. that the complaint is not a bona
fide derivative suit but is in fact
in the nature of a petition for
settlement of estate; hence, it is
outside the jurisdiction of the
RTC acting as a special
commercial court.
Accordingly, he prays for the setting aside and
annulment of the CA decision and resolution, and
the dismissal of Rodrigos complaint before the RTC.
THE COURTS RULING
We find the petition meritorious.
The core question for our determination is whether
the trial court, sitting as a special commercial court,
has jurisdiction over the subject matter of Rodrigos
complaint. To resolve it, we rely on the judicial
principle that jurisdiction over the subject matter of
a case is conferred by law and is determined by the
allegations of the complaint, irrespective of whether
the plaintiff is entitled to all or some of the claims
asserted therein.[12]
JURISDICTION OF SPECIAL
COMMERCIAL COURTS
 P.D. No. 902-A enumerates the cases over
which the SEC (now the RTC acting as a special
commercial court) exercises exclusive jurisdiction:
SECTION 5. In addition
to the regulatory and
adjudicative functions of
the Securities and
Exchange Commission
over corporations,
partnership, and other
forms of associations
registered with it as
expressly granted under
existing laws and decrees,
it shall have original and
exclusive jurisdiction to
hear and decide cases
involving:
a) Devices or schemes employed by or
any acts of the board of directors, business
associates, its officers or partners, amounting to
fraud and misrepresentation which may be
detrimental to the interest of the public and/or of the
stockholders, partners, members of associations or
organizations registered with the Commission.
b) Controversies arising out of intra-
corporate or partnership relations, between and
among stockholders, members, or associates;
between any or all of them and the corporation,
partnership or association of which they are
stockholders, members, or associates, respectively;
and between such corporation, partnership or
association and the State insofar as it concerns their
individual franchise or right to exist as such entity;
and
c) Controversies in the election or
appointment of directors, trustees, officers, or
managers of such corporations, partnerships, or
associations.
The allegations set forth in Rodrigos
complaint principally invoke Section 5, paragraphs
(a) and (b) above as basis for the exercise of the
RTCs special court jurisdiction. Our focus in
examining the allegations of the complaint shall
therefore be on these two provisions.
Fraudulent Devices and Schemes
The rule is that a complaint must contain a
plain, concise, and direct statement of the ultimate
facts constituting the plaintiffs cause of action and
must specify the relief sought.[13]Section 5, Rule 8
of the Revised Rules of Court provides that in all
averments of fraud or mistake, the
circumstances constituting fraud or mistake
must be stated with particularity.[14] These rules
find specific application to Section 5(a) of P.D. No.
902-A which speaks of corporate devices or
schemes that amount to fraud or misrepresentation
detrimental to the public and/or to the stockholders.
In an attempt to hold Oscar responsible for
corporate fraud, Rodrigo alleged in the complaint
the following:
3. This is a complaintto determine the
shares of stock of the deceased spouses
Pedro and Anastacia Reyes that were
arbitrarily and fraudulently appropriated
for himself [herein petitioner
Oscar] which were not collated and taken
into account in the partition, distribution,
and/or settlement of the estate of the
deceased Spouses Pedro and Anastacia
Reyes, for which he should be ordered to
account for all the income from the time he
took these shares of stock, and should now
deliver to his brothers and sisters their just
and respective shares with the corresponding
equivalent amount of P7,099,934.82 plus
interest thereon from 1978 representing his
obligations to the Associated Citizens Bank
that was paid for his account by his late
mother, Anastacia C. Reyes. This amount
was not collated or taken into account in the interest and/or
partition or distribution of the estate of their dividends, had been
late mother, Anastacia C. Reyes. transferred solely in the
name of respondent. By
3.1. Respondent Oscar such fraudulent
C. Reyes, through other manipulations and
schemes of fraud misrepresentation, the
including shareholdings of said
misrepresentation, respondent Oscar C.
unilaterally, and for his Reyes abruptly increased
own benefit, capriciously to P8,715,637.00 [sic] and
transferred and took becomes [sic] the majority
possession and control of stockholder of Zenith
the management of Insurance Corporation,
Zenith Insurance which portion of said
Corporation which is shares must be distributed
considered as a family equally amongst the
corporation, and other brothers and sisters of the
properties and businesses respondent Oscar C.
belonging to Spouses Reyes including the
Pedro and Anastacia complainant herein.
Reyes.
xxxx
xxxx
9.1 The shareholdings of
4.1. During the increase deceased Spouses Pedro
of capitalization of Zenith Reyes and Anastacia C.
Insurance Corporation,
Reyes valued at
sometime in 1968, the
P7,099,934.28
property covered by TCT
were illegally and
No. 225324 was illegally
fraudulently transferred
and fraudulently used by
solely to the respondents
respondent as a collateral.
[herein petitioner Oscar]
xxxx name and installed
himself as a majority
5. The complainant stockholder of
Rodrigo C. Reyes Zenith Insurance
discovered that by some Corporation [and] thereby
manipulative scheme, deprived his brothers and
the shareholdings of sisters of their respective
their deceased mother, equal shares thereof
Doa Anastacia C. Reyes, including complainant
shares of stocks and [sic] hereto.
valued in the corporate
books at P7,699,934.28, xxxx
more or less, excluding
 10.1 By refusal of the
respondent to account of
his [sic] shareholdings in
the company, he illegally
and fraudulently
transferred solely in his
name wherein [sic] the
shares of stock of the
deceased Anastacia C.
Reyes [which] must be
properly collated and/or
distributed equally
amongst the children,
including the
complainant Rodrigo C.
Reyes herein, to their
damage and prejudice.
xxxx
11.1 By continuous
refusal of the respondent
to account of his [sic]
shareholding with Zenith
Insurance Corporation[,]
particularly the number of
shares of stocks illegally
and fraudulently
transferred to him from
their deceased parents Sps.
Pedro and Anastacia
Reyes[,] which are all
subject for collation
and/or partition in equal
shares among their
children. [Emphasis
supplied.]
Allegations of deceit, machination, false
pretenses, misrepresentation, and threats are largely
conclusions of law that, without supporting
statements of the facts to which the allegations of
fraud refer, do not sufficiently state an effective
cause of action.[15] The late Justice Jose Feria, a
noted authority in Remedial Law, declared that
fraud and mistake are required to be averred with
particularity in order to enable the opposing party to
controvert the particular facts allegedly constituting
such fraud or mistake.[16]
Tested against these standards, we find that the
charges of fraud against Oscar were not properly
supported by the required factual allegations. While
the complaint contained allegations of fraud
purportedly committed by him, these allegations are
not particular enough to bring the controversy
within the special commercial courts jurisdiction;
they are not statements of ultimate facts, but are
mere conclusions of law: how and why the alleged
appropriation of shares can be characterized as
illegal and fraudulent were not explained nor
elaborated on.
Not every allegation of fraud done in a
corporate setting or perpetrated by corporate
officers will bring the case within the special
commercial courts jurisdiction. To fall within this
jurisdiction, there must be sufficient nexus showing
that the corporations nature, structure, or powers
were used to facilitate the fraudulent device or
scheme. Contrary to this concept, the complaint
presented a reverse situation. No corporate power or
office was alleged to have facilitated the transfer of
the shares; rather, Oscar, as an individual and
without reference to his corporate personality, was
alleged to have transferred the shares of Anastacia
to his name, allowing him to become the majority
and controlling stockholder of Zenith, and
eventually, the corporations President. This is the
essence of the complaint read as a whole and is
 hereto. [Emphasis
particularly demonstrated under the following
supplied.]
allegations:
In ordinary cases, the failure to specifically
5. The complainant Rodrigo C.
allege the fraudulent acts does not constitute a
Reyes discovered that by some manipulative
ground for dismissal since such defect can be cured
scheme, the shareholdings of their deceased mother,
by a bill of particulars. In cases governed by the
Doa Anastacia C. Reyes, shares of stocks and [sic]
Interim Rules of Procedure on Intra-Corporate
valued in the corporate books at P7,699,934.28,
Controversies, however, a bill of particulars is a
more or less, excluding interest and/or dividends,
prohibited pleading.[17] It is essential, therefore, for
had been transferred solely in the name of
the complaint to show on its face what are claimed
respondent. By such fraudulent manipulations
to be the fraudulent corporate acts if the
and misrepresentation, the shareholdings of said
complainant wishes to invoke the courts special
respondent Oscar C. Reyes abruptly increased to
commercial jurisdiction.
P8,715,637.00 [sic] and becomes [sic] the
majority stockholder of Zenith Insurance We note that twice in the course of this case,
Corporation, which portion of said shares must be Rodrigo had been given the opportunity to study the
distributed equally amongst the brothers and sisters propriety of amending or withdrawing the
of the respondent Oscar C. Reyes including the complaint, but he consistently refused. The courts
complainant herein. function in resolving issues of jurisdiction is limited
xxxx to the review of the allegations of the complaint and,
on the basis of these allegations, to the
9.1 The shareholdings
of deceased Spouses determination of whether they are of such nature
Pedro Reyes and subject that they fall within the terms of the law
and Anastacia C.
defining the courts jurisdiction. Regretfully, we
Reyes valued at
P7,099,934.28 were illega cannot read into the complaint any specifically
lly and fraudulently alleged corporate fraud that will call for the exercise
transferred solely to the of the courts special commercial jurisdiction. Thus,
respondents [herein
we cannot affirm the RTCs assumption of
petitioner Oscar] name
and installed himself as jurisdiction over Rodrigos complaint on the basis of
a majority stockholder Section 5(a) of P.D. No. 902-A.[18]
of Zenith Insurance
Corporation [and] thereby Intra-Corporate Controversy
deprived his brothers and A review of relevant jurisprudence shows a
sisters of their respective development in the Courts approach in classifying
equal shares thereof what constitutes an intra-corporate
including complainant controversy. Initially, the main consideration in
determining whether a dispute constitutes an intra-
corporate controversy was limited to a consideration
of the intra-corporate relationship existing between
or among the parties.[19] The types of relationships
embraced under Section 5(b), as declared in the
case of Union Glass & Container Corp. v.
SEC,[20] were as follows:
a) between the corporation, partnership, or
association and the public;
b) between the corporation,
partnership, or association
and its stockholders,
partners, members, or
officers;
c) between the corporation,
partnership, or association
and the State as far as its
franchise, permit or
license to operate is
concerned; and
d) among the
stockholders, partners,
or associates
themselves. [Emphasis
supplied.]
The existence of any of the above intra-
corporate relations was sufficient to confer
jurisdiction to the SEC, regardless of the subject
matter of the dispute. This came to be known as
the relationship test.
However, in the 1984 case of DMRC
Enterprises v. Esta del Sol Mountain Reserve,
Inc.,[21] the Court introduced the nature of the
controversy test. We declared in this case that it is
not the mere existence of an intra-corporate
relationship that gives rise to an intra-corporate
controversy; to rely on the relationship test alone
will divest the regular courts of their jurisdiction for
the sole reason that the dispute involves a
corporation, its directors, officers, or
stockholders. We saw that there is no legal sense in
disregarding or minimizing the value of the nature
of the transactions which gives rise to the dispute.
Under the nature of the controversy test,
the incidents of that relationship must also be
considered for the purpose of ascertaining whether
the controversy itself is intra-corporate.[22] The
controversy must not only be rooted in the existence
of an intra-corporate relationship, but must as well
pertain to the enforcement of the parties correlative
rights and obligations under the Corporation Code
and the internal and intra-corporate regulatory rules
of the corporation. If the relationship and its
incidents are merely incidental to the controversy or
if there will still be conflict even if the relationship
does not exist, then no intra-corporate controversy
exists.
The Court then combined the two tests and
declared that jurisdiction should be determined by
considering not only the status or relationship of the
parties, but also the nature of the question under
controversy.[23] This two-tier test was adopted in the
recent case of Speed Distribution, Inc. v. Court of
Appeals:[24]
To determine whether
a case involves an intra-
corporate controversy,
and is to be heard and
decided by the branches
of the RTC specifically
designated by the Court to
try and decide such cases,
two elements must
concur: (a) the status or
relationship of the parties;
 and (2) the nature of the
question that is the subject
of their controversy.
The first element
requires that the
controversy must arise out
of intra-corporate or
partnership relations
between any or all of the
parties and the
corporation, partnership,
or association of which
they are stockholders,
members or associates;
between any or all of
them and the corporation,
partnership, or association
of which they are
stockholders, members, or
associates, respectively;
and between such
corporation, partnership,
or association and the
State insofar as it
concerns their individual
franchises. The second
element requires that the
dispute among the parties
be intrinsically connected
with the regulation of the
corporation. If the nature
of the controversy
involves matters that are
purely civil in character,
necessarily, the case does
not involve an intra-
corporate controversy.
Given these standards, we now tackle the question
posed for our determination under the specific
circumstances of this case:
Application of the Relationship Test
Is there an intra-corporate relationship
between the parties that would characterize the case
as an intra-corporate dispute?
We point out at the outset that while
Rodrigo holds shares of stock in Zenith, he holds
them in two capacities: in his own right with respect
to the 4,250 shares registered in his name, and as
one of the heirs of Anastacia Reyes with respect to
the 136,598 shares registered in her name. What is
material in resolving the issues of this case under
the allegations of the complaint is Rodrigos interest
as an heir since the subject matter of the present
controversy centers on the shares of stocks
belonging to Anastacia, not on Rodrigos personally-
owned shares nor on his personality as shareholder
owning these shares. In this light, all reference to
shares of stocks in this case shall pertain to the
shareholdings of the deceased Anastacia and the
parties interest therein as her heirs.
Article 777 of the Civil Code declares that
the successional rights are transmitted from the
moment of death of the decedent. Accordingly,
upon Anastacias death, her children acquired legal
title to her estate (which title includes her
shareholdings in Zenith), and they are, prior to the
estates partition, deemed co-owners thereof.[25] This
status as co-owners, however, does not immediately
and necessarily make them stockholders of the
corporation. Unless and until there is compliance
with Section 63 of the Corporation Code on the
manner of transferring shares, the heirs do not
become registered stockholders of the
corporation. Section 63 provides:
 Section 63. Certificate of stock and transfer of
shares. The capital stock of stock corporations shall
be divided into shares for which certificates signed
by the president or vice-president, countersigned by
the secretary or assistant secretary, and sealed with
the seal of the corporation shall be issued in
accordance with the by-laws. Shares of stock so
issued are personal property and may be transferred
by delivery of the certificate or certificates indorsed
by the owner or his attorney-in-fact or other person
legally authorized to make the transfer. No transfer,
however, shall be valid, except as between the
parties, until the transfer is recorded in the
books of the corporation so as to show the names
of the parties to the transaction, the date of the
transfer, the number of the certificate or
certificates, and the number of shares
transferred. [Emphasis supplied.]
No shares of stock against
which the corporation
holds any unpaid claim
shall be transferable in the
books of the corporation.
Simply stated, the transfer of title by means
of succession, though effective and valid between
the parties involved (i.e., between the decedents
estate and her heirs), does not bind the corporation
and third parties. The transfer must be registered in
the books of the corporation to make the transferee-
heir a stockholder entitled to recognition as such
both by the corporation and by third parties.[26]
We note, in relation with the above
statement, that in Abejo v. Dela Cruz[27] and TCL
Sales Corporation v. Court of Appeals[28] we did not
require the registration of the transfer before
considering the transferee a stockholder of the
corporation (in effect upholding the existence of an
intra-corporate relation between the parties and
bringing the case within the jurisdiction of the SEC
as an intra-corporate controversy). A marked
difference, however, exists between these cases and
the present one.
In Abejo and TCL Sales, the transferees
held definite and uncontested titles to a specific
number of shares of the corporation; after the
transferee had established prima facie ownership
over the shares of stocks in question, registration
became a mere formality in confirming their status
as stockholders. In the present case, each of
Anastacias heirs holds only an undivided interest in
the shares. This interest, at this point, is still
inchoate and subject to the outcome of a settlement
proceeding; the right of the heirs to specific,
distributive shares of inheritance will not be
determined until all the debts of the estate of the
decedent are paid. In short, the heirs are only
entitled to what remains after payment of the
decedents debts;[29] whether there will be residue
remains to be seen. Justice Jurado aptly puts it as
follows:
No succession shall be declared unless and
until a liquidation of the assets and debts left
by the decedent shall have been made and
all his creditors are fully paid. Until a final
liquidation is made and all the debts are paid,
the right of the heirs to inherit remains
inchoate. This is so because under our rules
of procedure, liquidation is necessary in
order to determine whether or not the
decedent has left any liquid assets which
may be transmitted to his
[30]
heirs. [Emphasis supplied.]

Rodrigo must, therefore, hurdle
obstacles before he can be considered a stockholder
of Zenith with respect to the shareholdings
originally belonging to Anastacia. First, he must
prove that there are shareholdings that will be left to
him and his co-heirs, and this can be determined
only in a settlement of the decedents estate. No such
proceeding has been commenced to date. Second,
he must register the transfer of the shares allotted to
him to make it binding against the corporation. He
cannot demand that this be done unless and until he
has established his specific allotment (and prima
facie ownership) of the shares. Without
settlement of Anastacias estate, there can be no
definite partition and distribution of the estate to the
heirs. Without the partition and distribution, there
can be no registration of the transfer. And without
the registration, we cannot consider the transferee-
heir a stockholder who may invoke the existence of
an intra-corporate relationship as premise for an
intra-corporate controversy within the jurisdiction
of a special commercial court.
In sum, we find that insofar as the subject
shares of stock (i.e., Anastacias shares)
concerned Rodrigo cannot be considered
stockholder of Zenith. Consequently, we cannot
declare that an intra-corporate relationship exists
that would serve as basis to bring this case within
the special commercial courts jurisdiction under
Section 5(b) of PD 902-A, as amended. Rodrigos
complaint, therefore, fails the relationship test.
Application of the Nature of Controversy Test
The body rather than the title of the
complaint determines the nature of an action.[31] Our
examination of the complaint yields the conclusion
two
that, more than anything else, the complaint is about
the protection and enforcement of successional
rights. The controversy it presents is purely civil
rather than corporate, although it is denominated as
a complaint for accounting of all corporate funds
and assets.
Contrary to the findings of both the trial and
appellate courts, we read only one cause of action
alleged in the complaint. The derivative suit for
accounting of the funds and assets of the
corporation which are in the control, custody,
and/or possession of the respondent [herein
the petitioner Oscar] does not constitute a separate
cause of action but is, as correctly claimed by Oscar,
only an incident to the action for determination of
the shares of stock of deceased spouses Pedro and
Anastacia Reyes allegedly taken by respondent, its
accounting and the corresponding delivery of these
shares to the parties brothers and sisters. There can
be no mistake of the relationship between the
accounting mentioned in the complaint and the
objective of partition and distribution when Rodrigo
claimed in paragraph 10.1 of the complaint that:
10.1 By refusal of the
are
respondent to account of
a [sic] his shareholdings in
the company, he illegally
and fraudulently
transferred solely in his
name wherein [sic] the
shares of stock of the
deceased Anastacia C.
Reyes [which] must be
properly collated and/or
distributed equally
amongst the children
including the complainant
Rodrigo C. Reyes herein
 to their damage and
Revised Rules of Court that contemplates properties
prejudice.
of the decedent held by one of the heirs declares:
We particularly note that the complaint Questions as to
contained no sufficient allegation that justified the advancement made or
alleged to have been made
need for an accounting other than to determine the
by the deceased to any
extent of Anastacias shareholdings for purposes of heir may be heard and
distribution. determined by the court
having jurisdiction of the
Another significant indicator that points us estate proceedings; and
to the real nature of the complaint are Rodrigos the final order of the court
thereon shall be binding
repeated claims of illegal and fraudulent transfers of
on the person raising the
Anastacias shares by Oscar to the prejudice of the questions and on the heir.
other heirs of the decedent; he cited these allegedly [Emphasis supplied.]
fraudulent acts as basis for his demand for the Worth noting are this Courts statements in the case
collation and distribution of Anastacias shares to the of Natcher v. Court of Appeals:[32]
heirs.These claims tell us unequivocally that the Matters which involve settlement and
present controversy arose from the parties distribution of the estate of the decedent fall
relationship as heirs of Anastacia and not as within the exclusive province of the probate
court in the exercise of its limited jurisdiction.
shareholders of Zenith. Rodrigo, in filing the
complaint, is enforcing his rights as a co-heir and xxxx

not as a stockholder of Zenith. The injury he seeks It is clear that trial courts
to remedy is one suffered by an heir (for the trying an ordinary
action cannot resolve to
impairment of his successional rights) and not by
perform acts pertaining
the corporation nor by Rodrigo as a shareholder on to a special
record. proceeding because it is
subject to specific
More than the matters of injury and redress, prescribed rules.
what Rodrigo clearly aims to accomplish through [Emphasis supplied.]

his allegations of illegal acquisition by Oscar is the

distribution of Anastacias shareholdings without a
That an accounting of the funds and assets of
prior settlement of her estate an objective that, by
Zenith to determine the extent and value of
law and established jurisprudence, cannot be
Anastacias shareholdings will be undertaken by a
done. The RTC of Makati, acting as a special
probate court and not by a special commercial court
commercial court, has no jurisdiction to settle,
is completely consistent with the probate courts
partition, and distribute the estate of a deceased. A
limited jurisdiction. It has the power to enforce an
relevant provision Section 2 of Rule 90 of the
 title or ownership, yet if the
accounting as a necessary means to its authority to
interested parties are all heirs, or the
determine the properties included in the inventory question is one of collation or
of the estate to be administered, divided up, and advancement, or the parties consent
distributed. Beyond this, the determination of title to the assumption of jurisdiction by
the probate court and the rights of
or ownership over the subject shares (whether
third parties are not impaired, the
belonging to Anastacia or Oscar) may probate court is competent to
be conclusively settled by the probate court as a decide the question of ownership.
[Citations omitted. Emphasis
question of collation or advancement. We had
supplied.]
occasion to recognize the courts authority to act on
questions of title or ownership in a collation or In sum, we hold that the nature of the
advancement situation in Coca v. present controversy is not one which may be
Pangilinan[33] where we ruled: classified as an intra-corporate dispute and is

It should be clarified that whether a beyond the jurisdiction of the special commercial
particular matter should be resolved court to resolve. In short, Rodrigos complaint also
by the Court of First Instance in the fails the nature of the controversy test.
exercise of its general jurisdiction or
of its limited probate jurisdiction is DERIVATIVE SUIT
in reality not a jurisdictional
question. In essence, it is a Rodrigos bare claim that the complaint is a
procedural question involving a derivative suit will not suffice to confer jurisdiction
mode of practice "which may be
on the RTC (as a special commercial court) if he
waived."
cannot comply with the requisites for the existence
As a general rule, the question as to
of a derivative suit. These requisites are:
title to property should not be passed
upon in the testate or intestate
proceeding. That question should be
a. the party bringing suit
ventilated in a separate action. That
should be a shareholder
general rule has qualifications or
during the time of the act
exceptions justified by expediency
or transaction complained
and convenience.
of, the number of shares
Thus, the probate court may not being material;
provisionally pass upon in an
b. the party has tried to
intestate or testate proceeding the
exhaust intra-corporate
question of inclusion in, or exclusion
remedies, i.e., has made a
from, the inventory of a piece of
demand on the board of
property without prejudice to its final
directors for the
determination in a separate action.
appropriate relief, but the
Although generally, a probate latter has failed or refused
court may not decide a question of to heed his plea; and
 c. the cause of action means of resolving the
actually devolves on the dispute with the end view
corporation; the of amicably settling the
wrongdoing or harm case, but the dispute
having been or being between them ensued.
caused to the corporation
and not to the particular Lastly, we find no injury, actual or threatened,
stockholder bringing the alleged to have been done to the corporation due to
suit.[34]
Oscars acts. If indeed he illegally and fraudulently
Based on these standards, we hold that the transferred Anastacias shares in his own name, then
allegations of the present complaint do not amount the damage is not to the corporation but to his co-
to a derivative suit. heirs; the wrongful transfer did not affect the capital
stock or the assets of Zenith. As already mentioned,
First, as already discussed above, Rodrigo is not a
neither has Rodrigo alleged any particular cause or
shareholder with respect to the shareholdings
wrongdoing against the corporation that he can
originally belonging to Anastacia; he only stands as
champion in his capacity as a shareholder on
a transferee-heir whose rights to the share are
record.[36]
inchoate and unrecorded. With respect to his own
individually-held shareholdings, Rodrigo has not In summary, whether as an individual or as a
alleged any individual cause or basis as a derivative suit, the RTC sitting as special
shareholder on record to proceed against Oscar. commercial court has no jurisdiction to hear
Rodrigos complaint since what is involved is the
Second, in order that a stockholder may show a
determination and distribution of successional rights
right to sue on behalf of the corporation, he must
to the shareholdings of Anastacia Reyes. Rodrigos
allege with some particularity in his complaint that
proper remedy, under the circumstances, is to
he has exhausted his remedies within the
institute a special proceeding for the settlement of
corporation by making a sufficient demand upon
the estate of the deceased Anastacia Reyes, a move
the directors or other officers for appropriate relief
that is not foreclosed by the dismissal of his present
with the expressed intent to sue if relief is
complaint.
denied.[35]Paragraph 8 of the complaint hardly
satisfies this requirement since what the rule WHEREFORE, we hereby GRANT the petition
contemplates is the exhaustion of and REVERSE the decision of the Court of
remedies within the corporate setting: Appeals dated May 26, 2004 in CA-G.R. SP No.

8. As members of 74970. The complaint before the Regional Trial

the same family, Court, Branch 142, Makati, docketed as Civil Case
complainant Rodrigo C. No. 00-1553, is ordered DISMISSED for lack of
Reyes has resorted [to]
jurisdiction.
and exhausted all legal
SO ORDERED. Sps Fajardo v. Anita Flores GR 167891 Jan 15,
2010

DECISION

NACHURA, J.:
Before us is a petition for review of the
Decision[1] of the Court of Appeals (CA) dated
October 28, 2004 and its Resolution dated April 19,
2005, denying the motion for reconsideration
thereof.
The facts are as follows:
Leopoldo delos Reyes owned a parcel of
land, denominated as Lot No. 2351 (Cad. 320-D),
with an area of 25,513 square meters (sq m), located
in Barangay Sumandig in Hacienda Buenavista, San
Ildefonso, Bulacan. In 1963, he allowed petitioner
Jesus Fajardo to cultivate said land. The net
harvests were divided equally between the two until
1975 when the relationship was converted to
leasehold tenancy. Per Order[2] from the Department
of Agrarian Reform (DAR), Regional Office,
Region III, San Fernando, Pampanga, rent was
provisionally fixed at 27.42 cavans per year, which
Jesus Fajardo religiously complied with. From the
time petitioner cultivated the land, he was allowed
by Leopoldo delos Reyes to erect a house for his
family on the stony part of the land, which is the
subject of controversy.
On January 26, 1988, Leopoldo delos Reyes
died. His daughter and sole heir, herein respondent
Anita Flores, inherited the property. On June 28,
1991, Anita Flores and Jesus Fajardo executed an
agreement, denominated as KASUNDUAN NG
PAGHAHATI NG LUPA AT PAGTATALAGA
NG DAAN UKOL SA MAGKABILANG
PANIG.[3]This was followed by another agreement,
KASUNDUAN SA HATIAN SA LUPA, executed
on July 10, 1991, wherein the parties agreed to
deduct from Lot No. 2351 an area of10,923 sq m,
allotting the same to petitioner. Apparently, there
was a conflict of claims in the interpretation of
the Kasunduan between Anita Flores and Jesus
Fajardo, which was referred to the DAR, Provincial
Agrarian Reform Office, Baliuag, Bulacan.[4] In the
Report and Recommendation dated May 3, 2000,
the Legal Officer advised the parties to ventilate
their claims and counterclaims with the Department
of Agrarian Reform Adjudication Board (DARAB),
Malolos, Bulacan.[5]
On December 22, 2000, a complaint for
ejectment was filed by herein respondent Anita
Flores, assisted by her husband Bienvenido Flores,
against petitioners with the Municipal Trial Court
(MTC), San Ildefonso, Bulacan. In the complaint,
she alleged that, as the sole heir of the late
Leopoldo delos Reyes, she inherited a parcel of land
consisting of stony land, not devoted to agriculture,
and land suitable and devoted to agriculture located
in Barangay Sumandig, San Ildefonso, Bulacan; that,
sometime in the 1960s, during the lifetime of
Leopoldo delos Reyes, Jesus Fajardo requested the
former to allow him to work and cultivate that
portion of land devoted to agriculture; that Jesus
Fajardo was then allowed to erect a house on the
stony part of the land, and that the use and
occupation of the stony part of the land was by mere
tolerance only; and that the land, which was divided
equally between the two parties, excluded the stony
portion. In February 1999, respondent approached
petitioners and verbally informed them of her
intention to repossess the stony portion, but
petitioners refused to heed the request.
Petitioners filed a Motion to Dismiss,
alleging that Lot No. 2351, with an area of 25,513
sq m, was agricultural land; that they had been
continuously, uninterruptedly, and personally
cultivating the same since 1960 up to the present;
that the MTC had no jurisdiction over the case,
considering that the dispute between the parties,
regarding the Kasunduan, was referred to the
DARAB; and that the assumption by the DARAB
of jurisdiction over the controversy involving the lot
in question therefore precluded the MTC from
exercising jurisdiction over the case.
Resolving the Motion to Dismiss, the MTC
ruled that, while at first glance, the court did not
have jurisdiction over the case, considering that it
was admitted that petitioner was allowed to
cultivate the land, a closer look at the Kasunduan,
however, revealed that what was divided was only
the portion being tilled. By contrast, the subject
matter of the complaint was the stony portion where
petitioners house was erected. Thus, the court ruled
that it had jurisdiction over the subject matter.[6]
 of P10,000.00
On April 25, 2001, the MTC rendered and the cost of
judgment in favor of respondent. The dispositive suit.[7]

portion reads as follows:

On appeal, the Regional Trial Court (RTC),

WHEREFORE, premises
considered, judgment is hereby Branch 16, Third Judicial Region, Malolos,
rendered in favor of plaintiff Bulacan, affirmed the MTC Decision in toto upon a
(respondent), ORDERING
defendants (petitioners) finding that no reversible error was committed by

1) and all the court a quo in its Decision[8] dated August 29,
persons claiming 2002.
rights under them
to VACATE the On motion for reconsideration, however,
subject premises
the RTC issued an Order on December 10, 2002,
where they have
erected their reversing its decision dated August 29, 2002. The
house, which is a
portion of Lot No. RTC found that the issue involved appeared to be
2351, Cad-320-D an agrarian dispute, which fell within the
situated [in]
Barangay contemplation of Republic Act (R.A.) No. 6657,
Sumandig, San
Ildefonso, otherwise known as the Comprehensive Agrarian
Bulacan; Reform Law of 1988, and thus ordered the
2) to dismissal of the case for lack of jurisdiction.
DEMOLISH
A petition for review was then filed by
their house on the
subject premises; respondents with the CA to annul the Order of the

3) to PAY RTC dated December 10, 2002.

plaintiff the sum On October 28, 2004, the CA rendered the
of P400.00 a
month by way of assailed decision, which reinstated the MTC
reasonable
compensation for decision. It disagreed with the findings of the RTC
their use and and ruled that the part of Lot No. 2351 where
occupation of the
subject premises petitioners house stood was stony and residential in
starting [in] June
nature, one that may not be made to fall within the
2000 and every
month thereafter ambit of the operation of Philippine agrarian laws,
until they finally
vacate the same; owing to its non-agriculture character. The CA
and explained that, on the strength of the two
4) to PAY instruments, the parties made a partition and
attorneys fees
divided the agricultural portion of Lot No. 2351
equally among themselves. By virtue of said
division, the parties effectively severed and
terminated the agricultural leasehold/tenancy
relationship between them; thus, there was no
longer any agrarian dispute to speak of. Fajardo
had already acquired the benefits under the
Comprehensive Agrarian Reform Law when one-
half of the agricultural portion of Lot No. 2351 was
allotted to him. Petitioners cannot, therefore, be
allowed to continue possession of a part of the
stony portion, which was not included in the land
he was cultivating.[9] The dispositive portion of the
CA Decision reads as follows:
WHEREFORE, premises considered,
finding that the court a quo seriously erred when it
reversed itself, its Order dated December 10, 2002
is REVERSED and SET ASIDE. Accordingly, the
Decision dated April 25, 2001 of the MTC of San
Ildefonso, Bulacan is hereby REINSTATED.[10]
The subsequent motion for reconsideration
was denied; hence, this petition.
The issue in this case is whether it is MTC or
the DARAB which has jurisdiction over the case.
There is no dispute that, on June 28, 1991,
the parties executed an agreement, denominated as
KASUNDUAN NG PAGHAHATI NG LUPA AT
PAGTATALAGA NG DAAN UKOL SA
MAGKABILANG PANIG. Therein, it was admitted
that Jesus Fajardo was the tiller of the
land. This Kasunduan was subsequently followed by
another agreement, KASUNDUAN SA HATIAN
SA LUPA, whereby an area of 10,923 sq m of Lot
No. 2351 was given to petitioners. The portion of
the land where petitioners house is erected is the
subject of the instant case for unlawful detainer.
Respondent argues that this portion is not included
in the deed of partition, while petitioners insist that
it is.
We agree with the RTC when it clearly
pointed out in its Order dated December 10, 2002
that the resolution of this case hinges on the correct
interpretation of the contracts executed by the
parties. The issue of who has a better right of
possession over the subject land cannot be
determined without resolving first the matter as to
whom the subject property was allotted. Thus, this is
not simply a case for unlawful detainer, but one that
is incapable of pecuniary estimation, definitely
beyond the competence of the MTC.[11]
More importantly, the controversy involves
an agricultural land, which petitioners have
continuously and personally cultivated since the
1960s. In the Kasunduan, it was admitted that Jesus
Fajardo was the tiller of the land. Being agricultural
lessees, petitioners have a right to a home lot and a
right to exclusive possession thereof by virtue of
Section 24, R.A. No. 3844 of the Agricultural Land
Reform Code.[12] Logically, therefore, the case
involves an agrarian dispute, which falls within the
contemplation of R.A. No. 6657, or the
Comprehensive Agrarian Reform Law.
 modify, nay, terminate the
An agrarian dispute[13] refers to any same. Even assuming that the
controversy relating to tenurial arrangements, tenancy relationship between
the parties had ceased due to
whether leasehold, tenancy, stewardship, or the Kasulatan, there still exists
an agrarian dispute because the
otherwise, over lands devoted to agriculture,
action involves an incident
including disputes concerning farmworkers arising from the landlord and
tenant relationship.
associations or representation of persons in
negotiating, fixing, maintaining, changing, or In Teresita S. David v. Agustin
Rivera, this Court held that:
seeking to arrange terms or conditions of such
[I]t is safe to
tenurial arrangements. It includes any controversy conclude that the
relating to compensation of lands acquired under existence of prior
agricultural tenancy
this Act and other terms and conditions of transfer of relationship, if true,
will divest the
ownership from landowner to farmworkers, tenants,
MCTC of its
and other agrarian reform beneficiaries, whether the jurisdiction the
previous juridical tie
disputants stand in the proximate relation of farm compels the
operator and beneficiary, landowner and tenant, or characterization of
the controversy as an
lessor and lessee. It relates to any controversy agrarian dispute. x x
x Even if the tenurial
relating to, inter alia, tenancy over lands devoted to arrangement has
agriculture.[14] been severed, the
action still involves
Undeniably, the instant case involves a an incident arising
from the landlord
controversy regarding tenurial arrangements. The
and tenant
contention that the Kasunduans, which allegedly relationship. Where
the case involves the
terminated the tenancy relationship between the dispossession by a
parties and, therefore, removed the case from the former landlord of a
former tenant of the
ambit of R.A. No. 6657, is untenable. There still land claimed to have
been given as
exists an agrarian dispute because the controversy compensation in
involves the home lot of petitioners, an incident consideration of the
renunciation of the
arising from the landlord-tenant relationship. tenurial rights, there
clearly exists an
.Amurao v. Villalobos is quite instructive:
agrarian dispute. On
this point the Court
The instant case
has already ruled:
undeniably involves a
controversy involving tenurial
Indeed, section 21 of the Republic Act No. 1199,
arrangements because
provides that all cases involving the dispossession
the Kasulatan will definitely
of a tenant by the landlord or by a third party and/or
the settlement and disposition of disputes arising (DAR); more specifically, in the
from the relationship of landlord and Department of Agrarian Reform
tenant . . . shall be under the original and exclusive Adjudication Board (DARAB).
jurisdiction of the Court of Agrarian Relations. This
jurisdiction does not require the continuance of the
relationship of landlord and tenantat the time of the
dispute. The same may have arisen, and often times WHEREFORE, the Decision dated October 28,
arises, precisely from the previous termination of 2004 of the Court of Appeals
such relationship. If the same existed immediately,
or shortly, before the controversy and the subject- is REVERSED and SET ASIDE. The Order of the
matter thereof is whether or not said relationship
Regional Trial Court dated December 10, 2002
has been lawfully terminated, or if the dispute
springs or originates from the relationship of is REINSTATED.
landlord and tenant, the litigation is (then)
cognizable by the Court of Agrarian Relations . . .
SO ORDERED.
In the case at bar, petitioners
claim that the tenancy relationship
has been terminated by
the Kasulatan is of no moment. As
long as the subject matter of the
dispute is the legality of the
termination of the relationship, or if
the dispute originates from such
relationship, the case is cognizable
by the DAR, through the DARAB.
The severance of the tenurial
arrangement will not render the
action beyond the ambit of an
agrarian dispute.[15]

Furthermore, the records disclose that the

dispute between the parties, regarding the
interpretation of the Kasunduan, was, in fact, raised
and referred to the DAR, which in turn referred the
case to the DARAB.[16] In view of the foregoing, we
reiterate Hilario v. Prudente,[17] that:

The doctrine of primary jurisdiction

precludes the courts from resolving a
controversy over which jurisdiction
has initially been lodged with an
administrative body of special
competence. For agrarian reform
cases, jurisdiction is vested in the
Department of Agrarian Reform
Vda De Barrera et al v. Heirs of Vicente Legaspi
in turn, sold 1.1148 thereof to his sister petitioner
GR 174346 Sept 12, 2008
Fernanda Geonzon vda. de Barrera (Fernanda).[4]
DECISION
CARPIO MORALES, J.: Respondents, on the other hand, asserted

Under review before this Court is the July that the land was occupied, possessed and cultivated

31, 2006 Decision of the Court of Appeals,[1] which by their predecessor-in-interest Vicente Legaspi and

affirmed that of the Regional Trial Court, Branch 16, his wife Lorenza since 1935;[5] after a subdivision

of Tangub City in Civil Case No. TC-97-001, survey was conducted in November 30, 1976, it was

ordering the defendants-petitioners herein, Fernanda found out that the land formed part of the titled

Geonzon vda. de Barrera and Johnny Oco. Jr. to property of Andrea Lacson;[6] and despite this

return possession of the subject property to the discovery, they never filed any action to recover

plaintiffs-herein respondents, Heirs of Vicente ownership thereof since they were left undisturbed

Legaspi. in their possession,[7] until October 1, 1996 when

On October 1, 1996, petitioner Johnny Oco petitioners forced their way into it.

Jr. (Oco), said to be a peace officer connected with Petitioners raised the issue of ownership as
the PNP, accompanied by unidentified CAFGU
a special affirmative defense.[8] In their
members, forced his way into respondents 0.9504-
hectare irrigated farmland located at Liloan, Memorandum, however, they questioned the

Bonifacio, Misamis Occidental. After dispossessing
respondents of the property, Oco and company used
a tractor to destroy the planted crops, took
possession of the land, and had since tended it.[2]
jurisdiction of the RTC over the subject matter of
the complaint, the assessed value of the land being
only P11,160,[9] as reflected in Tax Declaration No.

Respondents thus filed on February 7, 7565.[10]

1997 a complaint before By Decision of November 27, 1998, the
the Regional Trial Court of Tangub City for Reconv trial court found for respondents, disposing as
eyance of Possession with Preliminary Mandatory follows:
[3]
Injunction and Damages against petitioners. WHEREFORE, judgment is hereby
In their Answer, petitioners claimed that the rendered in favor of the plaintiffs [herein
subject land forms part of a three-hectare property respondents] and against the defendants [-herein
described in OCT No. P-447 issued on February 10, petitioners]:
1956 in the name of Andrea Lacson who sold a 2-
1. Ordering the latter to
hectare portion thereof to Eleuterio Geonzon who, return the possession of the land in
question to the plaintiffs and
 2. Ordering the latter to desist
from further depriving and disturbing
plaintiffs peaceful possession thereof,
unless there be another court
judgment to the contrary.
SO ORDERED.
On the issue of jurisdiction over the subject
matter, the trial court, maintaining that it had, held:
disposition of the issue of jurisdiction over the
subject matter.
On the merits, the appellate court affirmed
too the trial courts decision, finding that both
testimonial and documentary evidence on record
established that appellees, through their
predecessors-in-interest, have been in peaceful,
continuous, public and actual possession of the

The Court is not persuaded
by [the defendants] arguments. What
determines the nature of the action as
well as the jurisdiction of the [c]ourt
are the facts alleged in the complaint
and not those alleged in the answer
of the defendants.
xxxx
property in dispute even before the year 1930.[12]
The appellate court emphasized that in
an accion publiciana, the only issue involved is the
determination of possession de jure.[13]
Hence, the present petition for review
which raises the following issues:

In [p]ar. 2 of plaintiffs
I. . . . WHETHER
complaint, the land in question was
OWNERSHIP AND TITLE
described as a riceland situated at
CANNOT BE AN ISSUE TO
Liloan, Bonifacio, Misamis Occ. and
DETERMINE WHO HAS A
declared under [T]ax [D]eclaration
BETTER RIGHT [TO] THE
No. 7564 in the name of Vicente
PORTION LITIGATED; AND
Legaspi and bounded on the north by
a creek, on the east Sec. 12, on the
II. WHETHER . . . THE
south Lot No. 007 and on the west
NATURE OF THE ACTION AS
also by Lot No. 007 which tax
WELL AS THE JURISDICTION
declaration cancels former [T]ax
OF THE COURT DEPEND ON
[D]eclaration No. 12933 under the
THE FACTS AS ALLEGED IN
name of Lorenza Bacul Legaspi
THE COMPLAINT.[14]
which likewise cancels [T]ax
[D]eclaration No. 5454 covering the
For obvious reasons, the
bigger portion of the land under
issue of lack of jurisdiction over the
which the land described under [T]ax
subject matter shall be first
[D]eclaration No. 7565 is part and
considered.
parcel thereof [sic]; the present
estimated value being
[11]
P50,000. (Emphasis and
underscoring supplied) Section 33 of Batas Pambansa Bilang 129,

Petitioners thereupon appealed to the Court (the Judiciary Reorganization Act of 1980), as

of Appeals which affirmed the trial courts amended by Republic Act No. 7691 provides for the
jurisdiction of metropolitan trial courts, municipal
trial courts and municipal circuit trial courts, to wit:
 xxxx
(3) Exclusive original
jurisdiction in all civil actions
which involve title to, or possession
of, real property, or any interest
therein where the assessed value of
the property or interest therein
does not exceed Twenty thousand
pesos (P20,000.00) or, in civil
actions in Metro Manila, where such
assessed value does not exceed Fifty
thousand pesos (P50,000.00)
exclusive of interest, damages of
whatever kind, attorneys 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. (Emphasis, italics
and underscoring supplied)
Before the amendments introduced by
Republic Act No. 7691, the plenary action of accion
publiciana was to be brought before the regional
trial court.[15] With the modifications introduced by
R.A. No. 7691 in 1994, the jurisdiction of the first
level courts has been expanded to include
jurisdiction over other real actions where the
assessed value does not exceed P20,000, P50,000
where the action is filed in Metro Manila. The first
level courts thus have exclusive original jurisdiction
over accion publiciana and accion
reivindicatoria where the assessed value of the real
property does not exceed the aforestated
amounts. Accordingly, the jurisdictional element is
the assessed value of the property.
Assessed value is understood to be the
worth or value of property established by taxing
authorities on the basis of which the tax rate is
applied. Commonly, however, it does not represent
the true or market value of the property.[16]
The subject land has an assessed value
of P11,160 as reflected in Tax Declaration No.
7565, a common exhibit of the parties. The bare
claim of respondents that it has a value of P50,000
thus fails. The case, therefore, falls within the
exclusive original jurisdiction of the municipal trial
court.
It was error then for the RTC to take
cognizance of the complaint based on the allegation
that the present estimated value [of the land
is] P50,000, which allegation is, oddly, handwritten
on the printed pleading. The estimated value,
commonly referred to as fair market value,[17] is
entirely different from the assessed value of the
property.
Lack of jurisdiction is one of those excepted
grounds where the court may dismiss a claim or a
case at any time when it appears from the pleadings
or the evidence on record that any of those grounds
exists, even if they were not raised in the answer or
in a motion to dismiss.[18] That the issue of lack of
jurisdiction was raised by petitioners only in their
Memorandum filed before the trial court did not
thus render them in estoppel.
 Ouano v. PGTT Gr No. 134230 July 7, 2002;
En passant, the Court notes that
respondents cause of action accion publiciana is a DECISION
wrong mode. The dispossession took place SANDOVAL-GUTIERREZ, J.:

on October 1, 1996 and the complaint was filed PGTT International Investment Corporation
four months thereafter or on February 7, (PGTT), respondent, is a corporation duly organized
under existing laws, with address at YASCO Bldg.,
1997. Respondents exclusion from the property had M. J. Cuenco Ave., Cebu City.
thus not lasted for more than one year to call for the On December 11, 1997, PGTT filed with the
Regional Trial Court (RTC), Branch 20, Cebu City,
remedy of accion publiciana. a verified complaint against Jovenal Ouano,
In fine, since the RTC has no jurisdiction petitioner, docketed as Civil Case No. CEB- 21319,
entitled PGTT INTERNATIONAL INVESTMENT
over the complaint filed by respondents, all the CORPORATION, Plaintiff, vs. JUVENAL OUANO,
Defendant, for Recovery of Ownership and
proceedings therein as well as the Decision Possession of Real Property and Damages.[1] In its
of November 27, 1998, are null and void. The complaint, PGTT alleged that it is the owner of Lot
Nos. 1-10, Block 2 of the Sunnymeade Crescent
complaint should perforce be dismissed. This leaves Subdivision located at Pit-os, Talamban, Cebu
City. Sometime in October of 1996, PGTT found
it unnecessary to still dwell on the first issue.
that Ouano uprooted the concrete monuments of the
WHEREFORE, the petition is said lots, plowed them and planted corn
thereon. Despite PGTTs demand that he vacate the
hereby GRANTED. The challenged July 31, lots and restore them to their original condition,
2006 Decision of the Court of Appeals is SET Ouano refused, claiming he is the owner and lawful
possessor of the 380 square meters he
ASIDE. The decision of Branch 16 of occupied. Due to Ouanos wrongful act, PGTT was
deprived of the use of its property and suffered
the Regional Trial Court of Tangub City in Civil damages in the amount of P100,000.00 a
Case No. TC-97-001 is declared NULL and VOID year. Likewise, PGTT was constrained to file the
subject action and hired the services of his counsel
for lack of jurisdiction. for P100,000.00. PGTT prayed:
SO ORDERED.
"WHEREFORE, in view of all the foregoing, it is
most respectfully prayed that after due notice and
hearing, judgment be rendered ordering defendant
(Jovenal Ouano) to vacate the premises and restore
the lots to their original condition; pay plaintiff
(PGTT) P100,000.00 as damages per year,
beginning October, 1996 until he shall have vacated
the premises and restored the lots to their original
condition; pay P100,000.00 as attorney's fees; and
pay P50,000.00 as expenses of litigation.

"Plaintiff prays for such other reliefs and remedies,

just and equitable under the premises."[2]

On February 5, 1998, Ouano filed a motion to

dismiss the complaint on the ground that it is the
Municipal Trial Court (MTC), not the RTC, which
has jurisdiction over it considering that the assessed
value of the lots involved is only P2,910, as
indicated in the latest tax declaration,[3] citing
Section 19 (paragraph 2) and Section 33 (paragraph
3) of Batas Pambansa Bilang 129 (The Judiciary
Reorganization Act of 1980), as amended by
Republic Act No. 7691.[4]
In its opposition to Ouanos motion, PGTT
contends that the RTC has jurisdiction since
the market value of the lots
is P49,760.00.[5] Besides, the complaint is not only
an action for recovery of ownership and possession
of real property, but also for damages
exceeding P100,000.00, over which claim the RTC
has exclusive original jurisdiction under Section 19
(paragraph 8) of the same law.
On March 6, 1998, the RTC, presided by Judge
Ramon G. Codilla, Jr., issued an Order denying the
motion to dismiss, holding that:
This court believes that this court has jurisdiction to
try this case considering that the real properties
consist of ten parcels of land in a subdivision and
the court takes note that there is a discrepancy
somewhere by the Office of the City Assessor in the
Assessment of the parcels of land for only less
than P2,000.00 and that the government is very
much at a loss by these unrealistic valuation.[6]
Ouano filed a motion for reconsideration but
was likewise denied by the RTC in its Order dated
May 27, 1998. The trial court ruled it has
jurisdiction over the case because (i)t is of judicial
knowledge that the real properties situated in Cebu
City command a higher valuation than those
indicated in the tax declaration. The observation of
plaintiffs (PGTTs) counsel as to the issue on
damages is likewise sustained considering that,
being a corporation, it may have incurred damages
in the form of unrealized profits.[7]
Hence the present petition for certiorari filed by
Ouano under Rule 65 of the 1997 Rules of Civil
Procedure, as amended, assailing the Orders of
respondent judge dated March 6, 1998 and May 27,
1998 as having been issued with grave abuse of
discretion amounting to lack or excess of
jurisdiction.
At the outset, it is necessary to stress that a
direct recourse to this Court is highly improper, for
it violates the established policy of strict observance
of the judicial hierarchy of courts.[8]We need to
reiterate, for the guidance of petitioner, that this
Courts original jurisdiction to issue a writ of
certiorari (as well as prohibition, mandamus, quo
warranto, habeas corpus and injunction)
is concurrent with the Court of Appeals (CA), as in
the present case, and with the RTCs in proper cases
within their respective regions.[9] However, this
concurrence of jurisdiction does not grant a party
seeking any of the extraordinary writs the absolute
freedom to file his petition with the court of his
choice. 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] The hierarchy of courts
determines the appropriate forum for such
petitions.Thus, petitions for the issuance of such
extraordinary writs against the first level (inferior)
courts should be filed with the RTC, and those
against the latter, with the CA.[11] A direct
invocation of this Courts original jurisdiction to
issue these writs should be allowed only when there
are special and important reasons therefor, clearly
and specifically set out in the petition. This is the
established policy. It is a policy that is necessary to
prevent inordinate demands upon this Courts time
and attention which are better devoted to those
matters within its exclusive jurisdiction, and to
prevent further over-crowding of its
[12]
docket. Unfortunately, the instant petition does
not allege any special and compelling reason to
justify a direct recourse to this Court. However, we
deem it more appropriate and practical to resolve
the controversy in order to avoid further delay, but
only in this instance.
The lone issue for our resolution is whether the
RTC has jurisdiction over Civil Case No. CEB-
21319.
The complaint seeks to recover from private
respondent the ownership and possession of the lots
in question and the payment of damages. Since the
action involves ownership and possession of real
property, the jurisdiction over the subject matter of
the claim is determined by the assessed
value, not the market value, thereof, pursuant
to Batas Pambansa Blg. 129, as amended by R.A.
7691. Section 33 (paragraph 3) of the said law
provides:
Sec. 33. Jurisdiction of Metropolitan Trial Courts, The finding of respondent judge that the value
Municipal Trial Courts and Municipal Circuit Trial of the lots is higher than that indicated in the tax
Courts in Civil Cases. Metropolitan Trial Courts, declaration and that, therefore, the RTC has
Municipal Trial Courts and Municipal Circuit jurisdiction over the case is highly speculative. It is
Trial Courts shall exercise: elementary that the tax declaration indicating the
assessed value of the property enjoys the
x x x. presumption of regularity as it has been issued by
the proper government agency.
(3) Exclusive original jurisdiction in all civil
Respondent judge further held that since the
actions which involve title to, or possession of,
complaint also seeks the recovery of damages
real property, or any interest therein where
exceeding P100,000.00, then it is within the
the assessed value of the property or interest
competence of the RTC pursuant to Section 19
therein does not exceed Twenty Thousand Pesos
(paragraph 8) of Batas Pambansa Blg. 129, as
(P20,000.00) or, in civil actions in Metro Manila,
amended by R.A. 7691, which states:
where such assessed value does not exceed Fifty
Thousand Pesos (P50,000.00) exclusive of interest,
SEC. 19. Jurisdiction in civil cases. Regional Trial
damages of whatever kind, attorneys fees,
Courts shall exercise exclusive original jurisdiction:
litigation expenses and costs: Provided, That in
cases of land not declared for taxation purposes, the
xxx
value of such property shall be determined by the
assessed value of the adjacent lots.
(8) In all other cases in which the demand,
exclusive of interest, damages of whatever kind,
x x x. (Emphasis ours)
attorneys fees, litigation expenses, and costs or the
value of the property in controversy exceeds One
Likewise, Section 19 (paragraph 2) of the same law
Hundred Thousand Pesos (P100,000.00) or, in such
reads:
other cases in Metro Manila, where the demand,
exclusive of the above mentioned items exceeds
Sec. 19. Jurisdiction in civil cases. - The Regional
Two hundred thousand pesos
Trial Court shall exercise exclusive
(P200,000.00). (Emphasis ours)
original jurisdiction:
The above provision does not apply to the
x x x.
instant case. It is applicable only to all other cases
other than an action involving title to, or
(2) In all civil actions, which involve the title to, or
possession of real property in which the assessed
possession of, real property, or any interest
value is the controlling factor in determining the
therein, where the assessed value of the property
courts jurisdiction. Besides, the same
involved exceeds Twenty Thousand Pesos
provision explicitly excludes from the
(P20,000.00) or, for civil actions in Metro Manila,
determination of the jurisdictional amount
where such value exceeds Fifty Thousand Pesos
the demand for interest, damages of whatever
(P50,000.00) except actions for forcible entry into
kind, attorneys fees, litigation expenses, and
and unlawful detainer of lands or buildings, original
costs. The exclusion of such damages is reiterated
jurisdiction over which is conferred upon the
in Section 33, paragraph 3 of the same Batas
Metropolitan Trial Courts, Municipal Trial Courts,
Pambansa Blg. 129, as amended, quoted
and Municipal Circuit Trial Courts;
earlier. The said damages are merely incidental to,
or a consequence of, the main cause of action for
x x x. (Emphasis ours)
recovery of ownership and possession of real
property. In this connection, this Court issued
It is undisputed that the assessed value of the
Administrative Circular No. 09-94 setting the
property involved, as shown by the corresponding
guidelines in the implementation of R.A.
tax declaration, is only P2,910.00. As such, the
7691. Paragraph 2 states:
complaint is well within the MTCs P20,000.00
jurisdictional limit.
2. The exclusion of the term damages of Heirs of Generoso Sebe v. Heirs of Veronico
whatever kind in determining the jurisdictional Sevilla GR No. 174497 Oct 12, 2009
amount under Section 19 (8) and Section 33 (1)
of B.P. Blg. 129, as amended by R.A. 7691, DECISION
applies to cases where the damages are merely ABAD, J.:
incidental to or a consequence of the main cause
of action. However, in cases where the claim for This case concerns the jurisdiction of Municipal
damages is the main cause of action, or one of the Trial Courts over actions involving real properties
causes of action, the amount of such claim shall be with assessed values of less than P20,000.00.
considered in determining the jurisdiction of the
court. (Emphasis ours)
The Facts and the Case
We thus find that in issuing the assailed orders
denying petitioners motion to dismiss, thus taking In this petition for review
cognizance of the case, the RTC committed grave
abuse of discretion. on certiorari[1] petitioners seek to reverse
WHEREFORE, the instant petition is the Order[2] dated August 8, 2006, of the Regional
GRANTED. The assailed Orders issued by
Trial Court (RTC) of Dipolog City, Branch 9, in
respondent RTC on March 6, 1998 and May 27,
1998 in Civil Case No. CEB-21319 are SET Civil Case 5435, for annulment of documents,
ASIDE.Accordingly, the complaint is ordered
DISMISSED. reconveyance and recovery of possession with

SO ORDERED. damages. The trial court dismissed the complaint

for lack of jurisdiction over an action where the
assessed value of the properties is less
than P20,000.00. Petitioners asked for
reconsideration[3] but the court denied it.[4]

On August 10, 1999 plaintiff spouses

Generoso and Aurelia Sebe and their daughter,
Lydia Sebe, (the Sebes) filed with the RTC of
Dipolog City[5] a complaint against defendants
Veronico Sevilla and Technology and Livelihood
Resources Center for Annulment of Document,
Reconveyance and Recovery of Possession of two
lots, which had a total assessed value of P9,910.00,
plus damages.[6] On November 25, 1999 they
amended their complaint[7] to address a deed of
confirmation of sale that surfaced in defendant
Sevillas Answer[8] to the complaint. The Sebes
claimed that they owned the subject lots but,
through fraud, defendant Sevilla got them to sign
documents conveying the lots to him. In his
Answer[9] Sevilla insisted that he bought the lots
from the Sebes in a regular manner.
While the case was pending before the RTC,
plaintiff Generoso Sebe died so his wife and
children substituted him.[10] Parenthetically, with
defendant Veronico Sevillas death in 2006, his heirs
substituted him as respondents in this case.[11]
On August 8, 2006 the RTC dismissed the
case for lack of jurisdiction over the subject matter
considering that the ultimate relief that the Sebes
sought was the reconveyance of title and possession
over two lots that had a total assessed value of less
than P20,000.00. Under the law,[12] said the RTC, it
has jurisdiction over such actions when the assessed
value of the property
exceeds P20,000.00,[13] otherwise, jurisdiction shall
be with the first level courts.[14] The RTC concluded
that the Sebes should have filed their action with the
Municipal Trial Court (MTC) of Dipolog City.
On August 22, 2006 the Sebes filed a
motion for reconsideration.[15] They pointed out that
the RTC mistakenly classified their action as one
involving title to or possession of real property
when, in fact, it was a case for the annulment of the
documents and titles that defendant Sevilla
got. Since such an action for annulment was
incapable of pecuniary estimation, it squarely fell
within the jurisdiction of the RTC as provided in
Section 19 of Batas Pambansa 129, as amended.
To illustrate their point, the Sebes drew
parallelisms between their case and the cases of De
Rivera v. Halili[16] and Copioso v. Copioso.[17]
The De Rivera involved the possession of a
fishpond. The Supreme Court there said that, since
it also had to resolve the issue of the validity of the
contracts of lease on which the opposing parties
based their rights of possession, the case had been
transformed from a mere detainer suit to one that
was incapable of pecuniary estimation. Under
Republic Act 296 or the Judiciary Act of 1948, as
amended, civil actions, which were incapable of
pecuniary estimation, came under the original
jurisdiction of the Court of First Instance (now the
RTC).[18] The Sebes pointed out that, like De Rivera,
the subject of their case was incapable of pecuniary
estimation since they asked the court, not only to
resolve the dispute over possession of the lots, but
also to rule on the validity of the affidavits of
quitclaim, the deeds of confirmation of sale, and the
titles over the properties.[19]Thus, the RTC should
try the case.
The Copioso, on the other hand, involves
the reconveyance of land the assessed value of
which was allegedly P3,770.00. The Supreme Court
ruled that the case comprehended more than just the
title to, possession of, or any interest in the real
property. It sought the annulment of contracts,
reconveyance or specific performance, and a claim
for damages. In other words, there had been a
joinder of causes of action, some of which
were incapable of pecuniary
estimation. Consequently, the case properly fell
within the jurisdiction of the RTC. Here, petitioners
argued that their case had the same causes of
actions and reliefs as those involved
in Copioso. Thus, the RTC had jurisdiction over
their case.
On August 31, 2006 the RTC denied the
Sebess motion for reconsideration, pointing out that
the Copioso ruling had already been overturned
by Spouses Huguete v. Spouses Embudo.[20] Before
the Huguete, cancellation of titles, declaration of
deeds of sale as null and void and partition were
actions incapable of pecuniary estimation. Now,
however, the jurisdiction over actions of this nature,
said the RTC, depended on the valuation of the
properties. In this case, the MTC had jurisdiction
because the assessed value of the lots did not
exceed P20,000.00.
The Issue
The issue in this case is whether or not the
Sebess action involving the two lots valued at less
than P20,000.00 falls within the jurisdiction of the
RTC.
The Courts Ruling
Whether a court has jurisdiction over the
subject matter of a particular action is determined
by the plaintiffs allegations in the complaint and the
principal relief he seeks in the light of the law that
apportions the jurisdiction of courts.[21]
The gist of the Sebess complaint is that they
had been the owner for over 40 years of two
unregistered lots[22] in Dampalan, San
Jose, Dipolog City, covered by Tax Declaration
012-239, with a total assessed value
of P9,910.00.[23] On June 3, 1991 defendant Sevilla
caused the Sebes to sign documents entitled
affidavits of quitclaim.[24] Being illiterate, they
relied on Sevillas explanation that what they signed
were deeds of real estate mortgage covering a loan
that they got from him.[25] And, although the
documents which turned out to be deeds conveying
ownership over the two lots to Sevilla
for P10,000.00[26] were notarized, the Sebes did not
appear before any notary public.[27] Using the
affidavits of quitclaim, defendant Sevilla applied
for[28] and obtained free patent titles covering the
two lots on September 23, 1991.[29] Subsequently,
he mortgaged the lots to defendant Technology
and Livelihood Resource Center for P869,555.00.
On December 24, 1991 the Sebes signed
deeds of confirmation of sale covering the two
lots.[31] Upon closer examination, however, their
signatures had apparently been forged.[32] The Sebes
were perplexed with the reason for making them
sign such documents to confirm the sale of the lots
when defendant Sevilla already got titles to them as of pecuniary estimation fell within the exclusive
early as September.[33] At any rate, in 1992, original jurisdiction of the RTC.
defendant Sevilla declared the lots for tax purposes
But, with the amendment of Batas
under his name.[34] Then, using force and
Pambansa 129 by Republic Act 7601, the
intimidation, he seized possession of the lots from
distinction between these two kinds of actions has
their tenants[35] and harvested that planting seasons
become pivotal. The amendment expanded the
yield[36] of coconut and palay worth P20,000.00.[37]
exclusive original jurisdiction of the first level
Despite demands by the Sebes, defendant courts to include real actions involving property
Sevilla refused to return the lots, forcing them to with an assessed value of less than P20,000.00.[44]
hire a lawyer[38] and incur expenses of
The power of the RTC under Section 19
litigation.[39] Further the Sebes suffered loss of
of Batas Pambansa 129,[45] as amended,[46] to hear
[40]
earnings over the years. They were also entitled
actions involving title to, or possession of, real
to moral[41] and exemplary damages.[42] They thus
property or any interest in it now covers only real
asked the RTC a) to declare void the affidavits of
properties with assessed value in excess
quitclaim and the deeds of confirmation of sale in
of P20,000.00. But the RTC retained the exclusive
the case; b) to declare the Sebes as lawful owners of
power to hear actions the subject matter of which is
the two lots; c) to restore possession to them; and d)
not capable of pecuniary estimation. Thus
to order defendant Sevilla to pay them P140,000.00
in lost produce from June 3, 1991 to the date of the SEC. 19. Jurisdiction in Civil

filing of the complaint, P30,000.00 in moral Cases. Regional Trial Courts shall exercise

damages, P100,000.00 in attorneys fee, P30,000.00 exclusive original jurisdiction:

in litigation expenses, and such amount of (1) In all civil actions in

which the subject of the litigations is
exemplary damages as the RTC might fix.[43]
incapable of pecuniary estimation.

Based on the above allegations and prayers (2) In all civil actions which
of the Sebess complaint, the law that applies to the involve the title to, or possession
of, real property, or any interest
action is Batas Pambansa 129, as amended. If this therein, where the assessed value of
case were decided under the original text of Batas the property involved exceeds
Twenty thousand pesos (P20,000.00)
Pambansa 129 or even under its predecessor,
or for civil actions in Metro Manila,
Republic Act 296, determination of the nature of the where such value exceeds Fifty
thousand pesos (P50,000.00) except
case as a real action would have ended the
actions for forcible entry into and
controversy. Both real actions and actions incapable unlawful detainer of lands or
 buildings, original jurisdiction over
which is conferred upon the
Metropolitan Trial Courts, Municipal
Trial Courts, and Municipal Circuit
Trial Courts; x x x.
Section 33, on the other hand provides that,
if the assessed value of the real property outside
Metro Manila involved in the suit is P20,000.00 and
below, as in this case, jurisdiction over the action
lies in the first level courts. Thus
SEC. 33. Jurisdiction of Metropolitan Trial
Courts, Municipal Trial Courts and Municipal
Circuit Trial Courts in Civil Cases -- Metropolitan
Trial Courts, Municipal Trial Courts and Municipal
Circuit Trial Courts shall exercise:
xxxx
(3) Exclusive original jurisdiction in
all civil actions which involve title to,
or possession of, real property, or
any interest therein where the
assessed value of the property or
interest therein does not exceed
Twenty thousand pesos (P20,000.00)
or, in civil actions in Metro Manila,
where such assessed value does not
exceed Fifty thousand pesos
(P50,000.00) x x x.
But was the Sebess action one involving
title to, or possession of, real property or any
interest in it or one the subject of which is incapable
of pecuniary estimation?
The Sebes claim that their action is, first,
for the declaration of nullity of the documents of
conveyance that defendant Sevilla tricked them into
signing and, second, for the reconveyance of the
certificate of title for the two lots that Sevilla
succeeded in getting. The subject of their action is,
they conclude, incapable of pecuniary estimation.
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 rights to have exclusive control, possession,
enjoyment, or disposition of the same.[47] Title is the
legal link between (1) a person who owns property
and (2) the property itself.[48]
Title is different from a certificate of title
which is the document of ownership under
the Torrens system of registration issued by the
government through the Register of
Deeds.[49] While title is the claim, right or interest in
real property, a certificate of title is the evidence of
such claim.
Another way of looking at it is that, while
title gives the owner the right to demand or be
issued a certificate of title, the holder of a certificate
of title does not necessarily possess valid title to the
real property. The issuance of a certificate of title
does not give the owner any better title than what he
actually has in law.[50] Thus, a plaintiffs action for
cancellation or nullification of a certificate of title
may only be a necessary consequence of the
defendants lack of title to real property. Further,
although the certificate of title may have been lost,
burned, or destroyed and later on reconstituted, title
subsists and remains unaffected unless it is
transferred or conveyed to another or subjected to a
lien or encumbrance.[51]
Nestled between what distinguishes a title
from a certificate of title is the present controversy
between the Sebes and defendant Sevilla. Which of
them has valid title to the two lots and would thus
be legally entitled to the certificates of title covering
them?
The Sebes claim ownership because
according to them, they never transferred ownership
of the same to anyone. Such title, they insist, has
remained with them untouched throughout the years,
excepting only that in 1991 they constituted a real
estate mortgage over it in defendant Sevillas
favor. The Sebes alleged that defendant Sevilla
violated their right of ownership by tricking them
into signing documents of absolute sale, rather than
just a real estate mortgage to secure the loan that
they got from him.
Assuming that the Sebes can prove that they have
title to or a rightful claim of ownership over the two
lots, they would then be entitled, first, to secure
evidence of ownership or certificates of title
covering the same and, second, to possess and enjoy
them. The court, in this situation, may in the
exercise of its equity jurisdiction and without
ordering the cancellation of the Torrens titles issued
to defendant Sevilla, direct the latter to reconvey the
two lots and their corresponding Torrens titles to
them as true owners.[52]
The present action is, therefore, not about the
declaration of the nullity of the documents or the
reconveyance to the Sebes of the certificates of title
covering the two lots. These would merely follow
after the trial court shall have first resolved the issue
of which between the contending parties is the
lawful owner of such lots, the one also entitled to
their possession. Based on the pleadings, the
ultimate issue is whether or not defendant Sevilla
defrauded the Sebes of their property by making
them sign documents of conveyance rather than just
a deed of real mortgage to secure their debt to
him. The action is, therefore, about ascertaining
which of these parties is the lawful owner of the
subject lots, jurisdiction over which is determined
by the assessed value of such lots.
Here, the total assessed value of the two lots
subject of the suit is P9,910.00. Clearly, this amount
does not exceed the jurisdictional threshold value
of P20,000.00 fixed by law. The other damages that
the Sebes claim are merely incidental to their main
action and, therefore, are excluded in the
computation of the jurisdictional amount.
WHEREFORE, premises considered, the
petition is DISMISSED. The Order dated August 8,
2006, of the Regional Trial Court of Dipolog City,
Branch 9, in Civil Case 5435, is AFFIRMED.
SO ORDERED.
Leo Wee v. George de Castro et al GR 176405 Aug
20, 2008
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review
on Certiorari[1] under Rule 45 of the Revised Rules
of Court filed by petitioner Leo Wee, seeking the
reversal and setting aside of the Decision[2] dated 19
September 2006 and the Resolution[3] dated 25
January 2007 of the Court of Appeals in CA-G.R.
SP No. 90906. The appellate court, in its assailed
Decision, reversed the dismissal of Civil Case. No.
1990, an action for ejectment instituted by
respondent George de Castro, on his own behalf and
on behalf of Annie de Castro, Felomina de Castro
Uban and Jesus de Castro[4] against petitioner,
by the Municipal Trial Court (MTC) of Alaminos
City, which was affirmed by the Regional Trial
Court (RTC), Branch 54, Alaminos City,
Pangasinan; and, ruling in favor of the respondents,
ordered the petitioner to vacate the subject
property. In its assailed Resolution dated 25 January
2007, the Court of Appeals refused to reconsider its
earlier Decision of 19 September 2006.
In their Complaint[5] filed on 1 July 2002
with the MTC of Alaminos City, docketed as Civil
Case No. 1990, respondents alleged that they are the
registered owners of the subject property, a two-
storey building erected on a parcel of land
registered under Transfer Certificate of Title (TCT)
No. 16193 in the Registry of Deeds of Pangasinan,
described and bounded as follows:
A parcel of land (Lot 13033-D-2, Psd-
01550-022319, being a portion of Lot 13033-D,
Psd-018529, LRC Rec. No. ____) situated in
Pob., Alaminos City; bounded on the NW. along
line 1-2 by Lot 13035-D-1 of the subdivision plan;
on the NE. along line 2-3 by Vericiano St.; on the
SE. along line 3-4 by Lot 13033-D-2 of the
subdivision plan; on the SW. along line 4-1
by Lot575, Numeriano Rabago. It is coverd by TCT
No. 16193 of the Register of Deeds of Pangasinan
(Alaminos City) and declared for taxation purposes
per T.D. No. 2075, and assessed in the sum
of P93,400.00.[6]
Respondents rented out the
subject property to petitioner on a
month to month basis
[7]
for P9,000.00 per month. Both
parties agreed that effective 1
October 2001, the rental payment
shall be increased from P9,000.00
to P15,000.00. Petitioner, however,
failed or refused to pay the
corresponding increase on rent when
his rental obligation for the month
of 1 October 2001 became due. The
rental dispute was brought to
the Lupon Tagapagpamayapa of
Poblacion, Alaminos, Pangasinan, in
an attempt to amicably settle the
matter but the parties failed to reach
an agreement, resulting in the
issuance by the Barangay Lupon of a
Certification to file action in court
on 18 January 2002. On 10 June
2002, respondent George de Castro
sent a letter to petitioner terminating
their lease agreement and demanding
that the latter vacate and turn over
the subject property to
respondents.Since petitioner
stubbornly refused to comply with
said demand letter, respondent
George de Castro, together with his
siblings and co-respondents, Annie
de Castro, Felomina de Castro Uban
 and Jesus de Castro, filed the
was an unlawful withholding of the subject property
Complaint for ejectment before the
MTC. by the petitioner.[8]

It must be noted, at this point, that although During the Pre-Trial Conference[9] held

the Complaint stated that it was being filed by all of before the MTC, the parties stipulated that in May

the respondents, the Verification and the Certificate 2002, petitioner tendered to respondents the sum

of Non-Forum Shopping were signed by respondent of P9,000.00 as rental payment for the month of

George de Castro alone. He would subsequently January 2002; petitioner paid rentals for the months

attach to his position paper filed before the MTC on of October 2001 to January 2002 but only in the

28 October 2002 the Special Powers of Attorney amount of P9,000.00 per month; respondents, thru

(SPAs) executed by his sisters Annie de Castro and counsel, sent a letter to petitioner on 10 June 2002

Felomina de Castro Uban dated 7 February 2002 terminating their lease agreement which petitioner

and 14 March 2002 respectively, authorizing him to ignored; and the Barangay Lupon did issue a

institute the ejectment case against petitioner. Certification to file action after the parties failed to
reach an agreement before it.
Petitioner, on the other hand, countered that
there was no agreement between the parties to After the submission of the parties of their

increase the monthly rentals and respondents respective Position Papers, the MTC, on 21

demand for an increase was exorbitant. The agreed November 2002, rendered a Decision[10] dismissing

monthly rental was only for the amount respondents Complaint in Civil Case No. 1990 for

of P9,000.00 and he was religiously paying the failure to comply with the prior conciliation

same every month. Petitioner then argued that requirement before the Barangay Lupon. The

respondents failed to comply with the jurisdictional decretal portion of the MTC Decision reads:

requirement of conciliation before WHEREFORE, premised

considered, judgment is hereby
the Barangay Lupon prior to the filing of Civil Case.
rendered ordering the dismissal of
No. 1990, meriting the dismissal of their Complaint this case. Costs against the [herein
therein. The Certification to file action issued by respondents].

the Barangay Lupon appended to the respondents

Complaint merely referred to the issue of rental
On appeal, docketed as Civil Case No. A-
increase and not the matter of ejectment. Petitioner
2835, the RTC of Alaminos, Pangasinan, Branch 54,
asserted further that the MTC lacked jurisdiction
promulgated its Decision[11] dated 27 June
over the ejectment suit, since respondents
2005 affirming the dismissal of respondents
Complaint was devoid of any allegation that there
Complaint for ejectment after finding that the
appealed MTC Decision was based on facts and law
on the matter. The RTC declared that since the
original agreement entered into by the parties was
for petitioner to pay only the sum of P9.000.00 per
month for the rent of the subject property, and no
concession was reached by the parties to increase
such amount to P15.000.00, petitioner cannot be
faulted for paying only the originally agreed upon
monthly rentals. Adopting petitioners position, the
RTC declared that respondents failure to refer the
matter to the Barangay court for conciliation
process barred the ejectment case, conciliation
before the Lupon being a condition sine qua non in
the filing of ejectment suits. The RTC likewise
agreed with petitioner in ruling that the allegation in
the Complaint was flawed, since respondents failed
to allege that there was an unlawful withholding of
possession of the subject property, taking out Civil
Case No. 1990 from the purview of an action for
unlawful detainer. Finally, the RTC decreed that
respondents Complaint failed to comply with the
rule that a co-owner could not maintain an action
without joining all the other co-owners. Thus,
according to the dispositive portion of the RTC
Decision:
WHEREFORE the appellate Court finds no
cogent reason to disturb the findings of the court a
quo. The Decision dated November 21,
2002 appealed from is hereby AFFIRMED IN
[12]
TOTO.
Undaunted, respondents filed a Petition for
Review on Certiorari[13] with the Court of Appeals
where it was docketed as CA-G.R. SP No.
90906. Respondents argued in their Petition that the
RTC gravely erred in ruling that their failure to
comply with the conciliation process was fatal to
their Complaint, since it is only respondent George
de Castro who resides in Alaminos City, Pangasinan,
while respondent Annie de Castro resides in
Pennsylvania, United States of America (USA);
respondent Felomina de Castro Uban, in California,
USA; and respondent Jesus de Castro, now
substituted by his wife, Martiniana, resides in
Manila. Respondents further claimed that the MTC
was not divested of jurisdiction over their
Complaint for ejectment because of the mere
absence therein of the term unlawful withholding of
their subject property, considering that they had
sufficiently alleged the same in their Complaint,
albeit worded differently. Finally, respondents
posited that the fact that only respondent George de
Castro signed the Verification and the Certificate of
Non-Forum Shopping attached to the Complaint
was irrelevant since the other respondents already
executed Special Powers of Attorney (SPAs)
authorizing him to act as their attorney-in-fact in the
institution of the ejectment suit against the
petitioner.
On 19 September 2006, the Court of
Appeals rendered a Decision granting the
 THE HONORABLE COURT OF
respondents Petition and ordering petitioner to
APPEALS GRAVELY ERRED IN
vacate the subject property and turn over the same DECLARING THAT
to respondents. The Court of Appeals decreed: CONCILIATION PROCESS IS
NOT A JURISDICTIONAL
REQUIREMENT THAT NON-
WHEREFORE, premises considered, the
COMPLIANCE THEREWITH
instant petition is GRANTED. The assailed DOES NOT AFFECT THE
Decision dated June 27, 2005 issued by the RTC of JURISDICTION IN EJECTMENT
CASE;
Alaminos City, Pangasinan, Branch 54, is
II.
REVERSED and SET ASIDE. A new one is hereby
rendered ordering [herein petitioner] Leo Wee to THE HONORABLE COURT OF
APPEALS GRAVELY ERRED IN
SURRENDER and VACATE the leased premises in UPHOLDING THE SUFFICIENCY
question as well as to pay the sum of P15,000.00 OF THE ALLEGATIONS IN THE
COMPLAINT FOR EJECTMENT
per month reckoned from March, 2002 until he shall
DESPITE THE WANT OF
have actually turned over the possession thereof to ALLEGATION OF UNLAWFUL
petitioners plus the rental arrearages of P30,000.00 WITHOLDING PREMISES (sic)
QUESTIONED BY PETITIONER;
representing unpaid increase in rent for the period
III.
from October, 2001 to February, 2002, with legal
interest at 6% per annum to be computed from June THE HONORABLE COURT OF
APPEALS GRAVELY ERRED IN
7, 2002 until finality of this decision and 12% RULING THAT THE FILING OF
thereafter until full payment thereof. Respondent is THE COMPLAINT OF
RESPONDENT GEORGE DE
likewise hereby ordered to pay petitioners the
CASTRO WITHOUT JOINING
amount of P20,000.00 as and for attorneys fees and ALL HIS OTHER CO-OWNERS
the costs of suit.[14] OVER THE SUBJECT PROPERTY
IS PROPER;

In a Resolution dated 25 January 2007, the IV.

appellate court denied the Motion for
THE HONORABLE COURT OF
Reconsideration interposed by petitioner for lack of APPEALS GRAVELY ERRED IN
NOT APPLYING SUPREME
merit.
COURT CIRCULAR NO. 10
WHICH DIRECTS A PLEADER
Petitioner is now before this Court via the Petition
TO INDICATE IN HIS
at bar, making the following assignment of errors: PLEADINGS HIS OFFICIAL
RECEIPT OF HIS PAYMENT OF
I. HIS IBP DUES.[15]
 Petitioner avers that
respondents failed to go through the
conciliation process before
the Barangay Lupon, a jurisdictional
defect that bars the legal action for
ejectment.The Certification to file
action dated 18 January 2002 issued
by the Barangay Lupon, appended
by the respondents to their
Complaint in Civil Case No. 1990, is
of no moment, for it attested only
that there was confrontation between
the parties on the matter of rental
increase but not on unlawful detainer
of the subject property by the
petitioner. If it was the intention of
the respondents from the very
beginning to eject petitioner from the
subject property, they should have
brought up the alleged unlawful stay
of the petitioner on the subject
property for conciliation before
the Barangay Lupon.
The barangay justice system was
established primarily as a means of easing up the
congestion of cases in the judicial courts. This could
be accomplished through a proceeding before
the barangay courts which, according to the one
who conceived of the system, the late Chief Justice
Fred Ruiz Castro, is essentially arbitration in
character; and to make it truly effective, it should
also be compulsory. With this primary objective of
the barangay justice system in mind, it would be
wholly in keeping with the underlying philosophy
of Presidential Decree No. 1508 (Katarungang
Pambarangay Law), which would be better served
if an out-of-court settlement of the case is reached
voluntarily by the parties.[16] To ensure this
objective, Section 6 of Presidential Decree No.
1508 requires the parties to undergo a conciliation
process before the Lupon Chairman or thePangkat
ng Tagapagkasundo as a precondition to filing a
complaint in court subject to certain exceptions. The
said section has been declared compulsory in
nature.[17]
Presidential Decree No. 1508 is now
incorporated in Republic Act No. 7160 (The Local
Government Code), which took effect on 1 January
1992.
The pertinent provisions of the Local
Government Code making conciliation a
precondition to the filing of complaints in court are
reproduced below:
SEC. 412. Conciliation.- (a) Pre-condition
to filing of complaint in court. No complaint,
petition, action, or proceeding involving any matter
within the authority of the lupon shall be filed or
instituted directly in court or any other government
office for adjudication, unless there has been a
confrontation between the parties before the lupon
chairman or the pangkat, and that no conciliation or
settlement has been reached as certified by the
lupon secretary or pangkat secretary as attested to
by the lupon or pangkat chairman or unless the
settlement has been repudiated by the parties thereto.
(b) Where parties may go directly to
court. The parties may go directly to
court in the following instances:
(1) Where the accused is
under detention;
(2) Where a person has
otherwise been deprived of personal
liberty calling for habeas
corpus proceedings;
(3) Where actions are
coupled with provisional remedies
such as preliminary injunction,
attachment, delivery of personal
property, and support pendente lite;
and
(4) Where the action may
otherwise be barred by the statute of
limitations.
(c) Conciliation among members of
indigenous cultural communities.
The customs and traditions of
indigenous cultural communities
shall be applied in settling disputes
between members of the cultural
communities.
SEC. 408. Subject Matter for
Amicable Settlement; Exception
Thereto. The lupon of each barangay
shall have authority to bring together
the parties actually residing in the
same city or municipality for
amicable settlement of all disputes
except:
(a) Where one party is the
government or any subdivision or
instrumentality thereof;
(b) Where one party is a
public officer or employee, and the
dispute relates to the performance of
his official functions;
(c) Offenses punishable by
imprisonment exceeding one (1) year
or a fine exceeding Five thousand
pesos (P5,000.00);
(d) Offenses where there is
no private offended party;
(e) Where the dispute
involves real properties located in
different cities or municipalities
unless the parties thereto agree to
submit their differences to amicable
settlement by an appropriate lupon;
(f) Disputes involving
parties who actually reside in
barangays of different cities or
municipalities, except where such
barangay units adjoin each other and
the parties thereto agree to submit
their differences to amicable
settlement by an appropriate lupon;
(g) Such other classes of
disputes which the President may
determine in the interest of justice or
upon the recommendation of the
Secretary of Justice.
There is no question that the parties to this
case appeared before the Barangay Lupon for
conciliation proceedings. There is also no dispute
that the only matter referred to the Barangay
Lupon for conciliation was the rental increase, and
not the ejectment of petitioner from the subject
property. This is apparent from a perusal of the
Certification to file action in court issued by
the Barangay Lupon on 18 January 2002, to wit:
 CERTIFICATION TO FILE the Barangay Lupon constitutes sufficient
COMPLAINTS compliance with the provisions of the Katarungang
This is to certify that: Pambarangay Law. Given the particular

1. There was personal circumstances of the case at bar, the conciliation

confrontation between proceedings for the amount of monthly rental
parties before the
should logically and reasonably include also the
barangay
Lupon regarding matter of the possession of the property subject of
rental increase of a the rental, the lease agreement, and the violation of
commercial building
but conciliation the terms thereof.
failed;
We now proceed to discuss the meat of the
2. Therefore, the
controversy.
corresponding dispute
of the above-entitled
case may now be filed The contract of lease between the parties
in Court/Government did not stipulate a fixed period. Hence, the parties
Office.[18] (Emphasis
agreed to the payment of rentals on a monthly
ours.)
basis. On this score, Article 1687 of the Civil Code
provides:
The question now to be resolved by this
Art. 1687. If the period for the lease has
Court is whether the Certification dated 18 January
not been fixed, it is understood to be from year to
2002 issued by the Barangay Lupon stating that no
year, if the rent agreed upon is annual; from
settlement was reached by the parties on the matter
month to month, if it is monthly; from week to
of rental increase sufficient to comply with the prior
week, if the rent is weekly; and from day to day, if
conciliation requirement under the Katarungang
the rent is to be paid daily. However, even though a
Pambarangay Law to authorize the respondents to
monthly rent is paid, and no period for the lease has
institute the ejectment suit against petitioner.
been set, the courts may fix a longer term for the
The Court rules affirmatively. lease after the lessee has occupied the premises for
over one year. If the rent is weekly, the courts may
While it is true that the Certification to file
likewise determine a longer period after the lessee
action dated 18 January 2002 of the Barangay
has been in possession for over six months. In case
Lupon refers only to rental increase and not to the
of daily rent, the courts may also fix a longer period
ejectment of petitioner from the subject property,
the submission of the same for conciliation before

after the lessee has stayed in the place for over one
month. (Emphasis supplied.)
The rentals being paid monthly, the period
of such lease is deemed terminated at the end of
each month. Thus, respondents have every right to
demand the ejectment of petitioners at the end of
each month, the contract having expired by
operation of law. Without a lease contract,
petitioner has no right of possession to the subject
property and must vacate the same. Respondents,
thus, should be allowed to resort to an action for
ejectment before the MTC to recover possession of
the subject property from petitioner.
Corollarily, petitioners ejectment, in this
case, is only the reasonable consequence of his
unrelenting refusal to comply with the respondents
demand for the payment of rental increase agreed
upon by both parties. Verily, the lessors right to
rescind the contract of lease for non-payment of the
demanded increased rental was recognized by this
Court in Chua v. Victorio[19]:
The right of rescission is
statutorily recognized in reciprocal
obligations, such as contracts of
lease. In addition to the general
remedy of rescission granted under
Article 1191 of the Civil Code, there
is an independent provision granting
the remedy of rescission for breach
of any of the lessor or lessees
statutory obligations. Under Article
1659 of the Civil Code, the
aggrieved party may, at his option,
ask for (1) the rescission of the
contract; (2) rescission and
indemnification for damages; or (3)
only indemnification for damages,
allowing the contract to remain in
force.
Payment of the rent is one
of a lessees statutory obligations,
and, upon non-payment by
petitioners of the increased rental
in September 1994, the lessor
acquired the right to avail of any
of the three remedies outlined
above. (Emphasis supplied.)
Petitioner next argues that respondent
George de Castro cannot maintain an action for
ejectment against petitioner, without joining all his
co-owners.
Article 487 of the New Civil Code is explicit
on this point:
ART. 487. Any one of the co-owners may
bring an action in ejectment.
This article covers all kinds of action for the
recovery of possession, i.e., forcible entry and
unlawful detainer (accion interdictal), recovery of
possession (accion publiciana), and recovery of
ownership (accion de reivindicacion). As explained
by the renowned civilist, Professor Arturo M.
Tolentino[20]:
A co-owner may bring such
an action, without the necessity of
joining all the other co-owners as
co-plaintiffs, because the suit is
deemed to be instituted for the
benefit of all. If the action is for the
benefit of the plaintiff alone, such
 that he claims possession for himself
and not for the co-ownership, the
action will not prosper. (Emphasis
added.)
In the more recent case of Carandang v.
Heirs of De Guzman,[21] this Court declared that a
co-owner is not even a necessary party to an action
for ejectment, for complete relief can be afforded
even in his absence, thus:
In sum, in suits to recover
properties, all co-owners are real
parties in interest. However, pursuant
to Article 487 of the Civil Code and
the relevant jurisprudence, any one
of them may bring an action, any
kind of action for the recovery of co-
owned properties. Therefore, only
one of the co-owners, namely the co-
owner who filed the suit for the
recovery of the co-owned property,
is an indispensable party thereto. The
other co-owners are not
indispensable parties. They are not
even necessary parties, for a
complete relief can be afforded in the
suit even without their participation,
since the suit is presumed to have
been filed for the benefit of all co-
owners.
Moreover, respondents Annie de Castro and
Felomina de Castro Uban each executed a Special
Power of Attorney, giving respondent George de
Castro the authority to initiate Civil Case No. 1990.
A power of attorney is an instrument in
writing by which one person, as principal, appoints
another as his agent and confers upon him the
authority to perform certain specified acts or kinds
of acts on behalf of the principal. The written
authorization itself is the power of attorney, and this
is clearly indicated by the fact that it has also been
called a letter of attorney.[22]
Even then, the Court views the SPAs as
mere surplusage, such that the lack thereof does not
in any way affect the validity of the action for
ejectment instituted by respondent George de
Castro. This also disposes of petitioners contention
that respondent George de Castro lacked the
authority to sign the Verification and the Certificate
of Non-Forum Shopping. As the Court ruled
in Mendoza v. Coronel[23]:
We likewise hold that the
execution of the certification
against forum shopping by the
attorney-in-fact in the case at bar
is not a violation of the
requirement that the parties must
personally sign the same. The
attorney-in-fact, who has authority to
file, and who actually filed the
complaint as the representative of the
plaintiff co-owner, pursuant to a
Special Power of Attorney, is a party
to the ejectment suit. In fact, Section
1, Rule 70 of the Rules of Court
includes the representative of the
owner in an ejectment suit as one of
the parties authorized to institute the
proceedings. (Emphasis supplied.)
Failure by respondent George de Castro to
attach the said SPAs to the Complaint is innocuous,
since it is undisputed that he was granted by his
sisters the authority to file the action for ejectment
against petitioner prior to the institution of Civil
Case No. 1990. The SPAs in his favor were
respectively executed by respondents Annie de
Castro and Felomina de Castro Uban on 7
February 2002 and 14 March 2002; while Civil
Case No. 1990 was filed by respondent George de
Castro on his own behalf and on behalf of his
siblings only on 1 July 2002, or way after he was
given by his siblings the authority to file said
action. The Court quotes with approval
following disquisition of the Court of Appeals:
Moreover, records show that [herein
respondent] George de Castro was
indeed authorized by his sisters
Annie de Castro and Felomina de
Castro Uban, to prosecute the case in
their behalf as shown by the Special
Power of Attorney dated February 7,
2002 and March 14, 2002. That these
documents were appended only to
[respondent George de Castros]
position paper is of no moment
considering that the authority
conferred therein was given prior to
the institution of the complaint in
July, 2002. x x x.[24]
Respondent deceased Jesus de Castros
failure to sign the Verification and Certificate of
Non-Forum Shopping may be excused since he
already executed an Affidavit[25] with respondent
George de Castro that he had personal knowledge of
the filing of Civil Case No. 1990. In Torres v.
Specialized Packaging Development
Corporation,[26] the Court ruled that the personal
signing of the verification requirement was deemed
substantially complied with when, as in the instant
case, two out of 25 real parties-in-interest, who
undoubtedly have sufficient knowledge and belief
to swear to the truth of the allegations in the petition,
signed the verification attached to it.
In the same vein, this Court is not persuaded
by petitioners assertion that respondents failure to
allege the jurisdictional fact that there was unlawful
withholding of the subject property was fatal to
the
their cause of action.
It is apodictic that what determines the
nature of an action as well as which court has
jurisdiction over it are the allegations in the
complaint and the character of the relief sought. In
an unlawful detainer case, the defendants
possession was originally lawful but ceased to be so
upon the expiration of his right to possess. Hence,
the phrase unlawful withholding has been held to
imply possession on the part of defendant, which
was legal in the beginning, having no other source
than a contract, express or implied, and which later
expired as a right and is being withheld by
defendant.[27]
In Barba v. Court of Appeals,[28] the Court
held that although the phrase unlawfully
withholding was not actually used by therein
petitioner in her complaint, the Court held that her
allegations, nonetheless, amounted to an unlawful
withholding of the subject property by therein
private respondents, because they continuously
refused to vacate the premises even after notice and technicalities.[31] Where a rigid application of the
demand. rules will result in a manifest failure or miscarriage
of justice, technicalities should be disregarded in
In the Petition at bar, respondents alleged in
order to resolve the case. [32]
their Complaint that they are the registered owners
of the subject property; the subject property was
being occupied by the petitioner pursuant to a
Finally, we agree in the ruling of the
monthly lease contract; petitioner refused to accede
to respondents demand for rental increase; the Court of Appeals that petitioner is liable for the

respondents sent petitioner a letter terminating the payment of back rentals, attorneys fees and cost
lease agreement and demanding that petitioner of the suit. Respondents must be duly
vacate and turn over the possession of the subject
indemnified for the loss of income from the
property to respondents; and despite such demand,
subject property on account of petitioners
petitioner failed to surrender the subject property to
refusal to vacate the leased premises.
respondents.[29] The Complaint sufficiently alleges
WHEREFORE, premises considered, the
the unlawful withholding of the subject property by
instant Petition is DENIED. The Decision dated 19
petitioner, constitutive of unlawful detainer,
September 2006 and Resolution dated 25 January
although the exact words unlawful withholding
2007 of the Court of Appeals in CA-G.R. SP No.
were not used. In an action for unlawful detainer,
90906 are hereby AFFIRMED in toto. Costs
an allegation that the defendant is unlawfully
against petitioner.
withholding possession from the plaintiff is deemed
sufficient, without necessarily employing the SO ORDERED.
terminology of the law.[30]

Petitioners averment that the Court of

Appeals should have dismissed respondents Petition
in light of the failure of their counsel to attach the
Official Receipt of his updated payment of
Integrated Bar of the Philippines (IBP) dues is now
moot and academic, since respondents counsel has
already duly complied therewith. It must be stressed
that judicial cases do not come and go through the
portals of a court of law by the mere mandate of