Civpro(Full Wo Digest)

8/10/2019 Civpro(Full Wo Digest)

1/25

Republic of the Philippines

SUPREME COURTManila

EN BANC

G.R. No. 153690 February 15, 2011DAVID LU,Petitioner,

vs.

PATERNO LU YM, SR., PATERNO LU YM, JR., VICTOR LU YM, JOHN LU YM, KELLY

LU YM, and LUDO & LUYM DEVELOPMENT CORPORATION,Respondents.x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 157381PATERNO LU YM, SR., PATERNO LU YM, JR., VICTOR LU YM, JOHN LU YM, KELLY

LU YM, and LUDO & LUYM DEVELOPMENT CORPORATION,Petitioners,vs.

DAVID LU,Respondent.x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 170889JOHN LU YM and LUDO & LUYM DEVELOPMENT CORPORATION,Petitioners,

vs.

THE HONORABLE COURT OF APPEALS OF CEBU CITY (FORMER TWENTIETHDIVISION), DAVID LU, ROSA GO, SILVANO LUDO & CLCORPORATION,Respondents.

R E S O L U T I O N

CARPIO MORALES,J.:By Decision of August 26, 2008, the Court

1unanimously disposed of the three

present petitions as follows:

WHEREFORE, premises considered, the petitions in G.R. Nos. 153690 and 157381

are DENIED for being moot and academic; while the petition in G.R. No. 170889 is

DISMISSED for lack of merit. Consequently, the Status QuoOrder dated January 23,

2006 is hereby LIFTED.

The Court of Appeals is DIRECTED to proceed with CA-G.R. CV No. 81163 and to

resolve the same with dispatch.

SO ORDERED[,]2

which Decision was, on motion for reconsideration, the Court voting 4-1,3reversed

by Resolution of August 4, 2009, the dispositive portion of which reads:

WHEREFORE, in view of the foregoing, the Motion for Reconsideration filed by

John Lu Ym and Ludo & LuYm Development Corporation is GRANTED. The Decision

of this Court dated August 26, 2008 is RECONSIDERED and SET ASIDE. The

Complaint in SRC Case No. 021-CEB, now on appeal with the Court of Appeals in

CA-G.R. CV No. 81163, is DISMISSED.

All interlocutory matters challenged in these consolidated petitions are DENIED for

being moot and academic.

SO ORDERED.4

David Lus Motion for Reconsideration and Motion to Refer Resolution to the

Court En Bancwas denied by minute Resolution of September 23, 2009.

Following his receipt on October 19, 2009 of the minute Resolution, David Lu

personally filed on October 30, 2009 a Second Motion for Reconsideration and

Motion to Refer Resolution to the Court En Banc. On even date, he filed through

registered mail an "Amended Second Motion for Reconsideration and Motion to

Refer Resolution to the Court En Banc." And on November 3, 2009, he filed a

"Motion for Leave to File [a] Motion for Clarification[, and the] Second Motion for

Reconsideration and Motion to Refer Resolution to the Court En Banc." He lateralso filed a "Supplement to Second Motion for Reconsideration with Motion to

Dismiss" dated January 6, 2010.

John Lu Ym and Ludo & Luym Development Corporation (LLDC), meanwhile, filed

with leave a Motion5for the Issuance of an Entry of Judgment of February 2, 2010,

which merited an Opposition from David Lu.

In compliance with the Courts Resolution of January 11, 2010, Kelly Lu Ym, Victor

Lu Ym and Paterno Lu Ym, Jr. filed a Comment/Opposition of March 20, 2010,

while John Lu Ym and LLDC filed a Consolidated Comment of March 25, 2010, a

Supplement thereto of April 20, 2010, and a Manifestation of May 24, 2010.

The present cases were later referred to the Court en banc by Resolution of

October 20, 2010.Brief Statement of the AntecedentsThe three consolidated cases stemmed from the complaint for "Declaration of

Nullity of Share Issue, Receivership and Dissolution" filed on August 14, 2000

before the Regional Trial Court (RTC) of Cebu City by David Lu, et al.against Paterno

Lu Ym, Sr. and sons (Lu Ym father and sons) and LLDC.

By Decision of March 1, 2004, Branch 12 of the RTC ruled in favor of David et al.by

annulling the issuance of the shares of stock subscribed and paid by Lu Ym father

and sons at less than par value, and ordering the dissolution and asset liquidation

of LLDC. The appeal of the trial courts Decision remains pending with the appellate

court inCA-G.R. CV No. 81163.

Several incidents arising from the complaint reached the Court through the

present three petitions.

In G.R. No. 153690wherein David, et al.assailed the appellate courts resolutionsdismissing their complaint for its incomplete signatory in the certificate of non-

forum shopping and consequently annulling the placing of the subject corporation

under receivershippendente lite, the Court, by Decision of August 26, 2008, found

the issue to have been mooted by the admission by the trial court of David et al.s

Amended Complaint, filed by them pursuant to the trial courts order to conform

to the requirements of the Interim Rules of Procedure Governing Intra-Corporate

Controversies.

Since an amended pleading supersedes the pleading that it amends, the original

complaint of David, et al. was deemed withdrawn from the records.

The Court noted in G.R. No. 153690 that both parties admitted the mootness ofthe issue and that the trial court had already rendered a decision on the merits of
http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt1http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt1http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt1http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt2http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt2http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt2http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt3http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt3http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt3http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt4http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt4http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt4http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt5http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt5http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt5http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt4http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt3http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt2http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt1


2/25

the case. It added that the Amended Complaint stands since Lu Ym father and sons

availed of an improper mode (via an Urgent Motion filed with this Court) to assail

the admission of the Amended Complaint.

In G.R. No. 157381wherein Lu Ym father and sons challenged the appellate courtsresolution restraining the trial court from proceeding with their motion to lift the

receivership order which was filed during the pendency of G.R. No. 153690, the

Court, by Decision of August 26, 2008 resolved that the issue was mooted by the

amendment of the complaint and by the trial courts decision on the merits. The

motion having been filed ancillary to the main action, which main action wasalready decided on the merits by the trial court, the Court held that there was

nothing more to enjoin.

G.R. No. 170889 involved the denial by the appellate court of Lu Ym father andsons application in CA-G.R. CV No. 81163 for a writ of preliminary injunction. By

August 26, 2008 Decision, the Court dismissed the petition after finding no merit

on their argument which they raised for the first time in their motion for

reconsideration before the appellate court of lack of jurisdiction for non-

payment of the correct RTC docket fees.

As reflected early on, the Court, in a turnaround, by Resolution of August 4, 2009,

reconsidered its position on the matter of docket fees. It ruled that the trial court

did not acquire jurisdiction over the case for David Lu, et al.s failure to pay thecorrect docket fees, hence, all interlocutory matters and incidents subject of the

present petitions must consequently be denied.

Taking Cognizance of the Present IncidentsThe Internal Rules of the Supreme Court (IRSC) states that the Court en bancshall

act on the following matters and cases:

(a) cases in which the constitutionality or validity of any treaty, international or

executive agreement, law, executive order, presidential decree, proclamation,

order, instruction, ordinance, or regulation is in question;

(b) criminal cases in which the appealed decision imposes the death penalty

or reclusion perpetua;

(c) cases raising novel questions of law;

(d) cases affecting ambassadors, other public ministers, and consuls;

(e) cases involving decisions, resolutions, and orders of the Civil Service

Commission, the Commission on Elections, and the Commission on Audit;

(f) cases where the penalty recommended or imposed is the dismissal of a judge,

the disbarment of a lawyer, the suspension of any of them for a period of more

than one year, or a fine exceeding forty thousand pesos;

(g) cases covered by the preceding paragraph and involving the reinstatement in

the judiciary of a dismissed judge, the reinstatement of a lawyer in the roll of

attorneys, or the lifting of a judges suspension or a lawyers suspension from the

practice of law;

(h) cases involving the discipline of a Member of the Court, or a Presiding Justice,

or any Associate Justice of the collegial appellate court;

(i) cases where a doctrine or principle laid down by the Court en banc or by a

Division my be modified or reversed;

(j) cases involving conflicting decisions of two or more divisions;

(k) cases where three votes in a Division cannot be obtained;

(l) Division cases where the subject matter has a huge financial impact on

businesses or affects the welfare of a community;

(m) Subject to Section 11 (b) of this rule, other division cases that, in the opinion of

at least three Members of the Division who are voting and present, are

appropriate for transfer to the Court en banc;(n) cases that the Court en bancdeems of sufficient importance to merit its

attention; and

(o) all matters involving policy decisions in the administrative supervision of all

courts and their personnel.6(underscoring supplied)

The enumeration is an amalgamation of SC Circular No. 2-89 (February 7, 1989), as

amended by En Banc Resolution of November 18, 1993, and the amplifications

introduced by Resolution of January 18, 2000 in A.M. No. 99-12-08-SC with respect

to administrative cases and matters.

The present cases fall under at least three types of cases for consideration by the

Court En Banc. At least three members of the Courts Second Division (to which the

present cases were transferred,

7

they being assigned to a Member thereof) found,by Resolution of October 20, 2010, that the cases were appropriate for referral-

transfer to the Court En Bancwhich subsequently accepted8the referral in view of

the sufficiently important reason to resolve all doubts on the validity of the

challenged resolutions as they appear to modify or reverse doctrines or principles

of law.

In Firestone Ceramics v. Court of Appeals,9the Court treated the consolidated

cases as En Banc cases and set the therein petitioners motion for oral argument,

after finding that the cases were of sufficient importance to merit the Court En

Bancs attention. It ruled that the Courts action is a legitimate and valid exercise of

its residual power.10

In Limketkai Sons Milling, Inc. v. Court of Appeals, the Court conceded that it is not

infallible. Should any error of judgment be perceived, it does not blindly adhere to

such error, and the parties adversely affected thereby are not precluded from

seeking relief therefrom, by way of a motion for reconsideration. In this

jurisdiction, rectification of an error, more than anything else, is of paramount

importance.

x x x x

It bears stressing that where, as in the present case, the Court En Banc entertains a

case for its resolution and disposition, it does so without implying that the Division

of origin is incapable of rendering objective and fair justice. The action of the Court

simply means that the nature of the cases calls for en banc attention and

consideration. Neither can it be concluded that the Court has taken undue

advantage of sheer voting strength. It was merely guided by the well-studiedfinding and sustainable opinion of the majority of its actual membership that,
http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt6http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt6http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt6http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt7http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt7http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt7http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt8http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt8http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt9http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt9http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt9http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt10http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt10http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt10http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt10http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt9http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt8http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt7http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt6


3/25

indeed, subject cases are of sufficient importance meriting the action and decision

of the whole Court. It is, of course, beyond cavil that all the members of this

highest Court of the land are always embued with the noblest of intentions in

interpreting and applying the germane provisions of law, jurisprudence, rules and

Resolutions of the Courtto the end that public interest be duly safeguarded and

rule of law be observed.11

It is argued that the assailed Resolutions in the present cases have already become

final,12

since a second motion for reconsideration is prohibited except for

extraordinarily persuasive reasons and only upon express leave firstobtained;

13and that once a judgment attains finality, it thereby becomes

immutable and unalterable, however unjust the result of error may appear.

The contention, however, misses an important point. The doctrine of immutability

of decisions applies only to final and executory decisions. Since the present cases

may involve a modification or reversal of a Court-ordained doctrine or principle,

the judgment rendered by the Special Third Division may be considered

unconstitutional, hence, it can never become final. It finds mooring in the

deliberations of the framers of the Constitution:

On proposed Section 3(4), Commissioner Natividad asked what the effect would be

of a decision that violates the proviso that "no doctrine or principle of law laid

down by the court in a decision rendered en bancor in division may be modified orreversed except by the court en banc." The answer given was that such a decisionwould be invalid. Following up, Father Bernas asked whether the decision, if notchallenged, could become final and binding at least on the parties. Romulo

answered that, since such a decision would be in excess of jurisdiction, thedecision on the case could be reopened anytime .

14(emphasis and underscoring

supplied)

A decision rendered by a Division of this Court in violation of this constitutional

provision would be in excess of jurisdiction and, therefore, invalid.15

Any entry of

judgment may thus be said to be "inefficacious"16

since the decision is void for

being unconstitutional.

While it is true that the Court en bancexercises no appellate jurisdiction over its

Divisions, Justice Minerva Gonzaga-Reyes opined in Firestoneand concededly

recognized that "[t]he only constraint is that any doctrine or principle of law laid

down by the Court, either rendered en bancor in division, may be overturned or

reversed only by the Court sitting en banc."17

That a judgment must become final at some definite point at the risk of occasional

error cannot be appreciated in a case that embroils not only a general allegation of

"occasional error" but also a serious accusation of a violation of the

Constitution, viz., that doctrines or principles of law were modified or reversed by

the Courts Special Third Division August 4, 2009 Resolution.

The law allows a determination at first impression that a doctrine or principle laid

down by the court en bancor in division may be modified or reversed in a case

which would warrant a referral to the Court En Banc. The use of the word "may"instead of "shall" connotes probability, not certainty, of modification or reversal of

a doctrine, as may be deemed by the Court. Ultimately, it is the entire Court which

shall decide on the acceptance of the referral and, if so, "to reconcile any

seeming conflict, to reverse or modify an earlier decision, and to declare the

Courts doctrine."18

The Court has the power and prerogative to suspend its own rules and to exempt a

case from their operation if and when justice requires it ,19

as in the present

circumstance where movant filed a motion for leave after the prompt submission

of a second motion for reconsideration but, nonetheless, still within 15 days from

receipt of the last assailed resolution.Well-entrenched doctrines or principles of law that went astray need to be steered

back to their proper course. Specifically, as David Lu correctly points out, it is

necessary to reconcile and declare the legal doctrines regarding actions that are

incapable of pecuniary estimation, application of estoppel by laches in raising an

objection of lack of jurisdiction, and whether bad faith can be deduced from the

erroneous annotation of lis pendens.

Upon a considered, thorough reexamination, the Court grants David Lus Motionfor Reconsideration. The assailed Resolutions of August 4, 2009 and September23, 2009, which turn turtle settled doctrines, must be overturned. The Courtthus reinstates the August 26, 2008 Decision wherein a three-tiered approach was

utilized to analyze the issue on docket fees:In the instant case, however, we cannot grant the dismissal prayed for because of

the following reasons: First, the case instituted before the RTC is one incapable of

pecuniary estimation. Hence, the correct docket fees were paid. Second, John andLLDC are estopped from questioning the jurisdiction of the trial court because oftheir active participation in the proceedings below, and because the issue of

payment of insufficient docket fees had been belatedly raised before the Court of

Appeals, i.e., only in their motion for reconsideration. Lastly, assuming that the

docket fees paid were truly inadequate, the mistake was committed by the Clerkof Court who assessed the same and not imputable to David ; and as to thedeficiency, if any, the same may instead be considered a lien on the

judgmentthat may thereafter be rendered.20

(italics in the original; emphasis and

underscoring supplied)

The Value of the Subject Matter Cannot be Estimated On the claim that the complaint had for its objective the nullification of the

issuance of 600,000 shares of stock of LLDC, the real value of which based on

underlying real estate values, as alleged in the complaint, stands atP1,087,055,105,

the Courts assailed August 4, 2009 Resolution found:

Upon deeper reflection, we find that the movants *Lu Ym father & sons+ claim has

merit. The 600,000 shares of stock were, indeed, properties in litigation. They were

the subject matter of the complaint, and the relief prayed for entailed the

nullification of the transfer thereof and their return to LLDC. David, et al., are

minority shareholders of the corporation who claim to have been prejudiced by

the sale of the shares of stock to the Lu Ym father and sons. Thus, to the extent ofthe damage or injury they allegedly have suffered from this sale of the shares of
http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt11http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt11http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt11http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt12http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt12http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt12http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt13http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt13http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt13http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt14http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt14http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt14http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt15http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt15http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt15http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt16http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt16http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt16http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt17http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt17http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt17http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt18http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt18http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt18http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt19http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt19http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt19http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt20http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt20http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt20http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt20http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt19http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt18http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt17http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt16http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt15http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt14http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt13http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt12http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt11


4/25

stock, the action they filed can be characterized as one capable of pecuniary

estimation. The shares of stock have a definite value, which was declared by

plaintiffs [David Lu, et al.] themselves in their complaint. Accordingly, the docket

fees should have been computed based on this amount. This is clear from the

following version of Rule 141, Section 7, which was in effect at the time the

complaint was filed[.]21

(emphasis and underscoring supplied)

Thesaid Resolution added that the value of the 600,000 shares of stock, which arethe properties in litigation, should be the basis for the computation of the filing

fees. It bears noting, however, that David, et al. are not claiming to own theseshares. They do not claim to be the owners thereof entitled to be the transferees

of the shares of stock. The mention of the real value of the shares of stock, overwhich David, et al.donot, it bears emphasis, interpose a claim of right torecovery, is merely narrative or descriptive in order to emphasize the inequitable

price at which the transfer was effected.

The assailed August 4, 2009 Resolution also stated that "to the extent of the

damage or injury [David, et al.] allegedly have suffered from this sale," the action

"can be characterized as one capable of pecuniary estimation." The Resolution

does not, however, explore the value of the extent of the damage or injury. Could

it be thepro ratadecrease (e.g., from 20% to 15%) of the percentage shareholding

of David, et al.vis--vis to the whole?Whatever property, real or personal, that would be distributed to the stockholders

would be a mere consequence of the main action. In the end, in the event LLDC is

dissolved, David, et al.would not be getting the value of the 600,000 shares, but

only the value of their minority number of shares, which are theirs to begin with.

The complaint filed by David, et al. is one for declaration of nullity of shareissuance. The main relief prayed for both in the original complaint and theamended complaint is the same, that is, to declare null and void the issuance of

600,000 unsubscribed and unissued shares to Lu Ym father and sons, et al.for a

price of 1/18 of their real value, for being inequitable, having been done in breach

of directors fiduciarys duty to stockholders, in violation of the minority

stockholders rights, and with unjust enrichment.

As judiciously discussed in the Courts August 26, 2008 Decision, t he test in

determining whether the subject matter of an action is incapable of pecuniary

estimation is by ascertaining the nature of the principal action or remedy sought. It

explained:

x x x To be sure, the annulment of the shares, the dissolution of the corporation

and the appointment of receivers/management committee are actions which donot consist in therecoveryof a sum of money. If, in the end, a sum of money orreal property would be recovered, it would simply be the consequence of such

principal action. Therefore, the case before the RTC was incapable of pecuniary

estimation.22

(italics in the original, emphasis and underscoring supplied)

Actions which the Court has recognized as being incapable of pecuniary estimation

include legality of conveyances. In a case involving annulment of contract, theCourt found it to be one which cannot be estimated:

Petitioners argue that an action for annulment or rescission of a contract of sale of

real property is a real action and, therefore, the amount of the docket fees to be

paid by private respondent should be based either on the assessed value of the

property, subject matter of the action, or its estimated value as alleged in the

complaint, pursuant to the last paragraph of 7(b) of Rule 141, as amended by the

Resolution of the Court dated September 12, 1990. Since private respondents

alleged that the land, in which they claimed an interest as heirs, had been sold for

P4,378,000.00 to petitioners, this amount should be considered the estimated

value of the land for the purpose of determining the docket fees.On the other hand, private respondents counter that an action for annulment or

rescission of a contract of sale of real property is incapable of pecuniary estimation

and, so, the docket fees should be the fixed amount of P400.00 in Rule 141,

7(b)(1). In support of their argument, they cite the cases of Lapitan v. Scandia,

Inc.and Bautista v. Lim. In Lapitanthis Court, in an opinion by Justice J.B.L. Reyes,

held:

A review of the jurisprudence of this Court indicates that in determining whether

an action is one the subject matter of which is not capable of pecuniary estimation,

this Court has adopted the criterion of first ascertaining the nature of the principal

action or remedy sought. If it is primarily for the recovery of a sum of money, the

claim is considered capable of pecuniary estimation, and whether jurisdiction is inthe municipal courts or in the courts of first instance would depend on the amount

of the claim. However, where the basic issue is something other than the right to

recover a sum of money, or where the money claim is purely incidental to, or a

consequence of, the principal relief sought, like in suits to have the defendant

perform his part of the contract (specific performance) and in actions for support,

or for annulment of a judgment or to forec lose a mortgage, this Court has

considered such actions as cases where the subject of the litigation may not be

estimated in terms of money, and are cognizable exclusively by courts of first

instance. The rationale of the rule is plainly that the second class cases, besidesthe determination of damages, demand an inquiry into other factors which thelaw has deemed to be more within the competence of courts of first instance ,

which were the lowest courts of record at the time that the first organic laws of

the Judiciary were enacted allocating jurisdiction (Act 136 of the Philippine

Commission of June 11, 1901).

Actions for specific performance of contracts have been expressly pronounced to

be exclusively cognizable by courts of first instance: De Jesus vs. Judge Garcia, L-

26816, February 28, 1967; Manufacturer's Distributors, Inc. vs. Yu Siu Liong, L-

21285, April 29, 1966. And no cogent reason appears, and none is here advancedby the parties, why an action for rescission (or resolution) should be differentlytreated, a "rescission" being a counterpart, so to speak, of "specificperformance". In both cases, the court would certainly have to undertake aninvestigation into facts that would justify one act or the other. No award for

damages may be had in an action for rescission without first conducting aninquiry into matters which would justify the setting aside of a contract , in the
http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt21http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt21http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt21http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt22http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt22http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt22http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt22http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt21


5/25

same manner that courts of first instance would have to make findings of fact and

law in actions not capable of pecuniary estimation expressly held to be so by this

Court, arising from issues like those raised in Arroz v. Alojado, et al., L-22153,

March 31, 1967 (the legality or illegality of the conveyance sought for and thedetermination of the validity of the money deposit made); De Ursua v. Pelayo, L-

13285, April 18, 1950 (validity of a judgment); Bunayog v. Tunas, L-12707,

December 23, 1959 (validity of a mortgage); Baito v. Sarmiento, L-13105, August

25, 1960 (the relations of the parties, the right to support created by the relation,

etc., in actions for support), De Rivera, et al. v. Halili, L-15159, September 30, 1963(the validity or nullity of documents upon which claims are predicated). Issues of

the same nature may be raised by a party against whom an action for rescission

has been brought, or by the plaintiff himself. It is, therefore, difficult to see why a

prayer for damages in an action for rescission should be taken as the basis for

concluding such action as one capable of pecuniary estimation a prayer which

must be included in the main action if plaintiff is to be compensated for what he

may have suffered as a result of the breach committed by defendant, and not later

on precluded from recovering damages by the rule against splitting a cause of

action and discouraging multiplicity of suits.23

(emphasis and underscoring

supplied)

IN FINE, the Court holds that David Lu, et al.s complaint is one incapable ofpecuniary estimation, hence, the correct docket fees were paid. The Court thus

proceeds to tackle the arguments on estoppel and lien, mindful that the

succeeding discussions rest merely on a contrary assumption, viz., that there was

deficient payment.

Estoppel Has Set InAssuming arguendo that the docket fees were insufficiently paid, the doctrine of

estoppel already applies.

The assailed August 4, 2009 Resolution cited Vargas v. Caminas24

on the non-

applicability of the Tijam doctrinewhere the issue of jurisdiction was, in fact, raised

before the trial court rendered its decision. Thus the Resolution explained:

Next, the Lu Ym father and sons filed a motion for the lifting of the receivership

order, which the trial court had issued in the interim. David, et al., brought the

matter up to the CA even before the trial court could resolve the motion.

Thereafter, David, at al., filed their Motion to Admit Complaint to Conform to the

Interim Rules Governing Intra-Corporate Controversies. It was at this point that the

Lu Ym father and sons raised the question of the amount of filing fees paid. They

also raised this point again in the CA when they appealed the trial courts decision

in the case below.

We find that, in the circumstances, the Lu Ym father and sons are not estopped

from challenging the jurisdiction of the trial court. They raised the insufficiency of

the docket fees before the trial court rendered judgment and continuously

maintained their position even on appeal to the CA. Although the manner of

challenge waserroneous they should have addressed this issue directly to thetrial court instead of the OCA they should not be deemed to have waived their

right to assail the jurisdiction of the trial court .25

(emphasis and underscoring

supplied)

Lu Ym father and sons did not raise the issue before the trial court. The narration

of facts in the Courts original decision shows that Lu Ym father and sons merely

inquired from the Clerk of Court on the amount of paid docket fees on January 23,

2004. They thereafter still "speculat[ed] on the fortune of litigation."26

Thirty-seven

days later or on March 1, 2004 the trial court rendered its decision adverse to

them.

Meanwhile, Lu Ym father and sons attempted to verify the matter of docket feesfrom the Office of the Court Administrator (OCA). In their Application for the

issuance a writ of preliminary injunction filed with the Court of Appeals, they still

failed to question the amount of docket fees paid by David Lu, et al. It was only in

their Motion for Reconsideration of the denial by the appellate court of their

application for injunctive writ that they raised such issue.

Lu Ym father and sons further inquiry from the OCA cannot redeem them. A mere

inquiry from an improper officeat that, could not, by any stretch, be considered as

an act of having raised the jurisdictional question prior to the rendition of the trial

courts decision. In one case, it was held:

Here it is beyond dispute that respondents paid the full amount of docket fees as

assessed by the Clerk of Court of the Regional Trial Court of Malolos, Bulacan,Branch 17, where they filed the complaint. If petitioners believed that the

assessment was incorrect, they should have questioned it before the trial

court. Instead, petitioners belatedly question the alleged underpayment of docket

fees through this petition, attempting to support their position with the opinionand certification of the Clerk of Court of another judicial region. Needless tostate, such certification has no bearing on the instant case.

27(italics in the

original; emphasis and underscoring in the original)

The inequity resulting from the abrogation of the whole proceedings at this late

stage when the decision subsequently rendered was adverse to the father and

sons is precisely the evil being avoided by the equitable principle of estoppel.

No Intent to Defraud the Government

Assuming arguendothat the docket fees paid were insufficient, there is no proof of

bad faith to warrant a dismissal of the complaint, hence, the following doctrine

applies:

x x x In Sun Insurance Office, Ltd., (SIOL) v. Asuncion, this Court ruled that the filing

of the complaint or appropriate initiatory pleading and the payment of the

prescribed docket fee vest a trial court with jurisdiction over the subject matter or

nature of the action. If the amount of docket fees paid is insufficient considering

the amount of the claim, the clerk of court of the lower court involved or his duly

authorized deputy has the responsibility of making a deficiency assessment. The

party filing the case will be required to pay the deficiency, but jurisdiction is not

automatically lost.28

(underscoring supplied)

The assailed Resolution of August 4, 2009 held, however, that the above-quoteddoctrine does not apply since there was intent to defraud the government, citing
http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt23http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt23http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt23http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt24http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt24http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt24http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt25http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt25http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt25http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt26http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt26http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt26http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt27http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt27http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt27http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt28http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt28http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt28http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt28http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt27http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt26http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt25http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt24http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt23


6/25

one attendant circumstance the annotation of notices of lis pendenson real

properties owned by LLDC. It deduced:

From the foregoing, it is clear that a notice of lis pendensis availed of mainly in real

actions. Hence, when David,et al., sought the annotation of notices of lis

pendenson the titles of LLDC, they acknowledged that the complaint they had filed

affected a title to or a right to possession of real properties. At the very least, they

must have been fully aware that the docket fees would be based on the value of

the realties involved. Their silence or inaction to point this out to the Clerk of Court

who computed their docket fees, therefore, becomes highly suspect, and thus,sufficient for this Court to conclude that they have crossed beyond the threshold

of good faith and into the area of fraud. Clearly, there was an effort to defraud the

government in avoiding to pay the correct docket fees. Consequently, the trial

court did not acquire jurisdiction over the case.29

All findings of fraud should begin the exposition with the presumption of good

faith. The inquiry is not whether there was good faith on the part of David, et al.,

but whether there was bad faith on their part.

The erroneous annotation of a notice of lis pendensdoes not negate good faith.

The overzealousness of a party in protectingpendente litehis perceived interest,

inchoate or otherwise, in the corporations properties from depletion or

dissipation, should not be lightly equated to bad faith.That notices of lis pendenswere erroneously annotated on the titles does not have

the effect of changing the nature of the action. The aggrieved party is not left

without a remedy, for they can move to cancel the annotations. The assailed

August 4, 2009 Resolution, however, deemed such act as an acknowledgement

that the case they filed was a real action, concerning as it indirectly does the

corporate realties, the titles of which were allegedly annotated. This conclusion

does not help much in ascertaining the filing fees because the value of these real

properties and the value of the 600,000 shares of stock are different.

Further, good faith can be gathered from the series of amendments on the

provisions on filing fees, that the Court was even prompted to make a

clarification.1avvphi1

When David Lu, et al. filed the Complaint on August 14, 2000 or five days after theeffectivity of the Securities Regulation Code or Republic Act No. 8799,

30the then

Section 7 of Rule 141 was the applicable provision, without any restricted

reference to paragraphs (a) and (b) 1 & 3 orparagraph (a) alone. Said section then

provided:

SEC. 7. Clerks of Regional Trial Courts.

(a) For filing an action or a permissive counterclaim or money claim against an

estate not based on judgment, or for filing with leave of court a third-party, fourth-

party, etc. complaint, or a complaint in intervention, and for all clerical services in

the same, if the total sum claimed, exclusive of interest, orthestated value of theproperty in litigation, is:

x x x x(b) For filing:

1. Actions where the value of the subject mattercannot be estimated

... x

x x

2. Special civil actions except judicial foreclosure

of mortgage which shall be governed by

paragraph (a) above

..... x

x x

3.All other actions not involving property

. x

x x

In a real action, the assessed value of the property, or if there is none, the

estimated value thereof shall be alleged by the claimant and shall be the basis in

computing the fees.

x x x x31

(emphasis supplied)

The Court, by Resolution of September 4, 2001 in A. M. No. 00-8-10-SC ,32

clarified

the matter of legal fees to be collected in cases formerly cognizable by the

Securities and Exchange Commission following their transfer to the RTC.

Clarification has been sought on the legal fees to be collected and the period of

appeal applicable in cases formerly cognizable by the Securities and Exchange

Commission. It appears that the Interim Rules of Procedure on Corporate

Rehabilitation and the Interim Rules of Procedure for Intra-CorporateControversies do not provide the basis for the assessment of filing fees and the

period of appeal in cases transferred from the Securities and Exchange

Commission to particular Regional Trial Courts.

The nature of the above mentioned cases should first be ascertained. Section 3(a),

Rule 1 of the 1997 Rules of Civil Procedure defines civil action as one by which a

party sues another for the enforcement or protection of a right, or the prevention

or redress of a wrong. It further states that a civil action may either be ordinary or

special, both being governed by the rules for ordinary civil actions subject to the

special rules prescribed for special civil actions. Section 3(c) of the same Rule,

defines a special proceeding as a remedy by which a party seeks to establish a

status, a right, or a particular fact.

Applying these definitions, the cases covered by the Interim Rules for Intra-Corporate Controversies should be considered as ordinary civil actions. Thesecases either seek the recovery of damages/property or specific performance ofan act against a party for the violation or protection of a right. These cases are:(1) Devices or schemes employed by, or any act of, the board of directors, business

associates, officers or partners, amounting to fraud or misrepresentation which

may be detrimental to the interest of the public and/or of the stockholders,

partners, or members of any corporation, partnership, or association;

(2) Controversies arising out of intra-corporate, partnership, or association

relations, between and among stockholders, members or associates; and between,

any or all of them and the corporation, partnership, or association of which they

are stockholders, members or associates, respectively;
http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt29http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt29http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt29http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt30http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt30http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt30http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt31http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt31http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt31http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt32http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt32http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt32http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt32http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt31http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt30http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt29


7/25

(3) Controversies in the election or appointment of directors, trustees, officers, or

managers of corporations, partnerships, or associations;

(4) Derivative suits; and

(5) Inspection of corporate books.

On the other hand, a petition for rehabilitation, the procedure for which is

provided in the Interim Rules of Procedure on Corporate Recovery, should be

considered as a special proceeding. It is one that seeks to establish the status of a

party or a particular fact. As provided in section 1, Rule 4 of the Interim Rules on

Corporate Recovery, the status or fact sought to be established is the inability ofthe corporate debtor to pay its debts when they fall due so that a rehabilitation

plan, containing the formula for the successful recovery of the corporation, may be

approved in the end. It does not seek a relief from an injury caused by another

party.

Section 7 of Rule 141 (Legal Fees) of the Revised Rules of Court lays the amount of

filing fees to be assessed for actions or proceedings filed with the Regional Trial

Court. Section 7(a) and (b) apply to ordinary civil actionswhile 7(d) and (g) applyto special proceedings.

In fine, the basis for computing the filing fees in intra-corporate cases shallbe section 7(a) and (b) l & 3of Rule 141. For petitions for rehabilitation, section

7(d) shall be applied. (emphasis and underscoring supplied)The new Section 21(k) of Rule 141 of the Rules of Court, as amended by A.M. No.04-2-04-SC

33(July 20, 2004), expressly provides that "[f]or petitions for insolvency

or other cases involving intra-corporate controversies, the fees prescribed

under Section 7(a) shall apply." Notatu dignumis that paragraph(b) 1 & 3ofSection 7 thereof was omitted from the reference. Said paragraph

34refers to

docket fees for filing "[a]ctions where the value of the subject matter cannot be

estimated" and "all other actions not involving property."

By referring the computation of such docket fees to paragraph (a)only, it denotesthat an intra-corporate controversy always involves a property in litigation, the

value of which is always the basis for computing the applicable filing fees. The

latest amendments seem to imply that there can be no case of intra-corporate

controversy where the value of the subject matter cannot be estimated. Even onefor a mere inspection of corporate books.

If the complaint were filed today, one could safely find refuge in the express

phraseology of Section 21 (k) of Rule 141 that paragraph (a) alone applies.

In the present case, however, the original Complaint was filed on August 14, 2000

during which time Section 7, without qualification, was the applicable provision.

Even the Amended Complaint was filed on March 31, 2003 during which time the

applicable rule expressed that paragraphs (a) and (b) l & 3 shall be the basis for

computing the filing fees in intra-corporate cases, recognizing that there could be

an intra-corporate controversy where the value of the subject matter cannot be

estimated, such as an action for inspection of corporate books. The immediate

illustration shows that no mistake can even be attributed to the RTC clerk of courtin the assessment of the docket fees.

Finally, assuming there was deficiency in paying the docket fees and assuming

further that there was a mistake in computation, the deficiency may be considered

a lien on the judgment that may be rendered, there being no established intent to

defraud the government.

WHEREFORE, the assailed Resolutions of August 4, 2009 and September 23, 2009

are REVERSED andSET ASIDE. The Courts Decision of August 26, 2008is REINSTATED.The Court of Appeals is DIRECTED to resume the proceedings and resolve the

remaining issues with utmost dispatch in CA-G.R. CV No. 81163.SO ORDERED.

Republic of the Philippines

Supreme Court

Manila
http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt33http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt33http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt34http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt34http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt34http://www.lawphil.net/judjuris/juri2011/feb2011/gr_153690_2011.html#fnt33


8/25

THIRD DIVISION

ANA DE GUIA SAN PEDROand ALEJO DOPEO,Petitioners,

- versus -

HON. FATIMA G. ASDALA, in her capacity as the PresidingJudge of the Regional Trial Court of Quezon City, Branch 87;

HON. MANUEL TARO, in his capacity as the Presiding Judge ofthe Metropolitan Trial Court of Quezon City, Branch 42; andthe HEIRS OF SPOUSES APOLONIO V. DIONISIO and VALERIANADIONISIO (namely, ALLAN GEORGE R. DIONISIO and ELEANORR. DIONISIO, herein represented by ALLAN GEORGE R.DIONISIO),Respondents.

G.R. No.164560

Present:

YNARES-SANTIAGO,J.,

Chairperson,

CHICO-

NAZARIO,

VELASCO, JR.,

NACHURA, and

PERALTA,JJ.

Promulgated:July 22, 2009

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

D E C I S I O N

PERALTA,J.:

This resolves the petition for certiorariunder Rule 65 of the Rules of Court, praying

that the Resolutions[1]

of the Court of Appeals (CA) dated September 15,

2003 andJune 1, 2004, respectively, in CA-G.R. SP No. 78978, be reversed and set

aside.

The antecedent facts are as follows.

Sometime in July 2001, private respondents, heirs of spouses Apolonio and

Valeriana Dionisio, filed with the Metropolitan Trial Court (MeTC) of Quezon City,

Branch 42, a Complaint[2]

against herein petitioners and Wood Crest Residents

Association, Inc., forAccion Reivindicatoria, Quieting of Title and Damages, withPrayer for Preliminary Mandatory Injunction. Private respondents alleged that

subject property located in Batasan Hills, Quezon City, with an assessed value

of P32,100.00, was titled in the name of spouses Apolonio and Valeriana Dionisio;

but petitioners, with malice and evident bad faith, claimed that they were the

owners of a parcel of land that encompasses and covers subject property. Private

respondents had allegedly been prevented from entering, possessing and using

subject property. It was further alleged in the Complaint that petitioners' Transfer

Certificate of Title over their alleged property was spurious. Private respondents

then prayed that they be declared the sole and absolute owners of the subject

property; that petitioners be ordered to surrender possession of subject propertyto them; that petitioners and Wood Crest and/or its members be ordered to pay

actual and moral damages, and attorney's fees.

Petitioners, for their part, filed a Motion to Dismiss[3]

said complaint on the ground

that the MeTC had no jurisdiction over the subject matter of the action, as the

subject of litigation was incapable of pecuniary estimation.

The MeTC then issued an Order[4]

dated July 4, 2002 denying the motion to

dismiss, ruling that, under Batas Pambansa(B.P.) Blg.129, as amended, the MeTC

had exclusive original jurisdiction over actions

involving title to or possession of real property of small value.

Petitioners' Motion for Reconsideration of said Order dated July 4, 2002 was

denied.

Petitioners assailed the aforementioned Order by filing a petition

for certiorari with the Regional Trial Court (RTC) of Quezon City, Branch

87. However, in its Decision[5]

dated March 10, 2003, the RTC dismissed the

petition, finding no grave abuse of discretion on the part of the MeTC Presiding

Judge. The RTC sustained the MeTC ruling, stating that, in accordance with Section

33(3) of Republic Act (R.A.) No. 7691, amending B.P. Blg. 129, the MeTC had

jurisdiction over the complaint forAccion Reivindicatoria,as it involves recovery of

ownership and possession of real property located in Quezon City, with anassessed value not exceeding P50,000.00. A Motion for Reconsideration

[6]of the

Decision was filed by petitioners, but was denied in an Order[7]

dated July 3, 2003.

Petitioners then filed with the Court of Appeals another petition

for certiorari, insisting that both the MeTC and RTC acted with grave abuse of

discretion amounting to lack or excess of jurisdiction by not ordering the dismissal

of the complaint forAccion Reivindicatoria,for lack of jurisdiction over the

same. In the assailed CA Resolution dated September 15, 2003, the CA dismissed

the petition outright, holding that certiorariwas not available to petitioners as they

should have availed themselves of the remedy of appeal. Petitioners' motion for

reconsideration of the resolution of dismissal was denied perResolution

[8]dated June 1, 2004.
http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn1


9/25

Thus, petitioners filed the instant petition and, in support thereof, they allege that:

THE HONORABLE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK OR IN (SIC) EXCESS OF JURISDICTION IN DENYING THE

PETITION FOR CERTIORARI AND FOR FAILURE TO RESOLVE THE ISSUE RAISED IN

THE CERTIORARIREGARDING THE JURISDICTION OF THE METROPOLITAN TRIAL

COURT TO TAKE COGNIZANCE OF A CASE OFACCION REINVINDICATORIA.

THE HONORABLE PUBLIC RESPONDENT FATIMA GONZALES-ASDALA, AS PRESIDING

JUDGE OF RTC BRANCH 87, QUEZON CITY, ACTED WITH GRAVE ABUSE OF

DISCRETION AMOUNTING TO LACK OR IN EXCESS OF (SIC) JURISDICTION IN

DISMISSING THE PETITION FOR CERTIORARIAND IN RESOLVING THAT A CASE

OFACCION REINVINDICATORIAIS WITHIN THE JURISDICTION OF THE

METROPOLITAN TRIAL COURT.

THE HONORABLE PUBLIC RESPONDENT MANUEL TARO AS PRESIDING JUDGE

MeTC, BRANCH 42, QUEZON CITY, ACTED WITH GRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK OR IN (SIC) EXCESS OF JURISDICTION IN SO TAKING

COGNIZANCE OF THE COMPLAINT FORACCION REINVINDICATORIA IN CIVIL CASE

NO. 27434 ENTITLED, HEIRS OF SPS. APOLONIO V. DIONISIO AND VALERIANA

DIONISIO, ETC. VS. ANA DE GUIA SAN PEDRO, ET. AL.[9]

The present Petition for Certiorariis doomed and should not have been

entertained from the very beginning.

The settled rule is that appeals from judgments or final orders or resolutions of the

CA should be by a verified petition for review on certiorari, as provided for under

Rule 45 of the Revised Rules of Civil Procedure. Thus, in Pasiona, Jr. v. Court of

Appeals,[10]the Court expounded as follows:

The aggrieved party is proscribed from assailing a decision or final order of the CA

via Rule 65, because such recourse is proper only if the party has no plain, speedy

and adequate remedy in the course of law. In this case, petitioner had anadequate remedy, namely, a petition for review on certiorariunder Rule 45 ofthe Rules of Court. A petition for review oncertiorari, not a special civil actionfor certiorariwas, therefore, the correct remedy.

x x x x

Settled is the rule that where appeal is available to the aggrieved party, the specialcivil action for certiorariwill not be entertained remedies of appeal

and certiorariare mutually exclusive, not alternative or

successive. Hence, certiorariis not and cannot be a substitute for a lostappeal,especially if one's own negligence or error in one's choice of remedyoccasioned such loss or lapse. One of the requisites of certiorariis that there be no

available appeal or any plain, speedy and adequate remedy. Where an appeal wasavailable, as in this case, certiorariwill not prosper, even if the ground therefor isgrave abuse of discretion. Petitioner's resort to this Court by Petitionfor Certiorariwas a fatal procedural error, and the instant petition must, therefore,

fail.[11]

For the very same reason given above, the CA, therefore, acted properly when it

dismissed the petition for certiorari outright, on the ground that petitioners should

have resorted to the remedy of appeal instead of certiorari. Verily, the present

Petition for Certiorarishould not have been given due course at all.

Moreover, since the period for petitioners to file a petition for review

on certiorarihad lapsed by the time the instant petition was filed, the assailed CA

Resolutions have attained finality.

Nevertheless, just to put the matter to rest, the Court reiterates the ruling in Heirs

of Valeriano S. Concha, Sr. v. Spouses Lumocso,[12]

to wit:

In a number of cases, we have held that actions for reconveyance of or for

cancellation of title to or to quiet title over real property are actions that fall under

the classification of cases that involve title to, or possession of, real property, or

any interest therein.

x x x x

x x x Thus, under the old law, there was no substantial effect on jurisdiction

whether a case is one, the subject matter of which was incapable of pecuniary

estimation, under Section 19(1) of B.P. 129, or one involving title to property under

Section 19(2). The distinction between the two classes became crucial with the

amendment introduced by R.A. No. 7691 in 1994, which expanded the exclusive

original jurisdiction of the first level courts to include "all civil actions which involvetitle to, or possession of, real property, or any interest therein where the assessedvalue 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 doesnot exceed Fifty thousand pesos (P50,000.00) exclusive of interest, damages ofwhatever kind, attorney's fees, litigation expenses and costs. " Thus, under thepresent law, original jurisdiction over cases the subject matter of which involves"title to, possession of, real property or any interest therein" under Section 19(2)of B.P. 129 is divided between the first and second level courts, with the assessedvalue of the real property involved as the benchmark. This amendment wasintroduced to "unclog the overloaded dockets of the RTCs which would result in

the speedier administration of justice."

[13]
http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/164560.htm#_ftn9


10/25

Clearly, the RTC and the CA ruled correctly that the MeTC had jurisdiction over

private respondents' complaint forAccion Reivindicatoria.

IN VIEW OF THE FOREGOING, the petition is DISMISSEDfor utter lack ofmerit. The Resolutions of the Court of Appeals in CA-G.R. SP No. 78978,

datedSeptember 15, 2003 and June 1, 2004, are AFFIRMED.

SO ORDERED.


11/25

SECOND DIVISIONG.R. No. 174908, June 17, 2013DARMA MASLAG,Petitioner, v. AND ELIZABETH MONZON, WILLIAM GESTON,REGISTRY OF DEEDS OF BENGUET,Respondents.

D E C I S I O N DEL CASTILLO,J.:"It is incumbent upon x x x appellants to utilize the correct mode of appeal of the

decisions of trial courts to the appellate courts. In the mistaken choice of theirremedy, they can blame no one but themselves."

1

This is a Petition for Review on Certiorari2of the May 31, 2006 Resolution

3of the

Court of Appeals (CA) in CA-G.R. CV No. 83365, which dismissed petitioner Darma

Maslags (petitioner) ordinary appeal to it for being an improper remedy. The

Resolution disposed of the case as follows:cralavvonlinelawlibrary

WHEREFORE, the Motion to Dismiss is GRANTED, and the Appeal isherebyDISMISSED.

SO ORDERED.4nadcralavvonlinelawlibrary

The Petition also assails the CAs September 22, 2006 Resolution5denying

petitioners Motion for Reconsideration.6

Factual Antecedents

In 1998, petitioner filed a Complaint7for reconveyance of real property with

declaration of nullity of original certificate of title (OCT) against respondents

Elizabeth Monzon (Monzon), William Geston and the Registry of Deeds of La

Trinidad, Benguet. The Complaint was filed before the Municipal Trial Court (MTC)

of La Trinidad, Benguet.

After trial, the MTC found respondent Monzon guilty of fraud in obtaining an OCTover petitioners property.

8 It ordered her to reconvey the said property to

petitioner, and to pay damages and costs of suit.9

Respondents appealed to the Regional Trial Court (RTC) of La Trinidad, Benguet.

After going over the MTC records and the parties respective memoranda, the RTC

of La Trinidad, Benguet, Branch 10, through Acting Presiding Judge Fernando P.

Cabato (Judge Cabato), issued its October 22, 2003 Order,10

declaring the MTC

without jurisdiction over petitioners cause of action. It further held that it will

take cognizance of the case pursuant to Section 8, Rule 40 of the Rules of Court,

which reads:cralavvonlinelawlibrary

SECTION 8. Appeal from orders dismissing case without trial; lack of jurisdiction.

x x x

If the case was 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 with the

preceding section, without prejudice to the admission of amended pleadings and

additional evidence in the interest of justice.

Both parties acknowledged receipt of the October 22, 2003 Order,11

but neither

presented additional evidence before the new judge, Edgardo B. Diaz De Rivera, Jr.

(Judge Diaz De Rivera).12

On May 4, 2004, Judge Diaz De Rivera issued a Resolution13

reversing the MTC

Decision. Thefalloreads as follows:cralavvonlinelawlibrary

WHEREFORE, the Judgment appealedfrom the Municipal Trial Court of La

Trinidad, Benguet is set aside. [Petitioner] is ordered to turn over the possession

of the 4,415 square meter land she presently occupies to [Monzon]. This case

is remanded to the court a quofor further proceedings to determine whether

[Maslag] is entitled to the remedies afforded by law to a builder in good faith for

the improvements she constructed thereon.

No pronouncement as to damages and costs.

SO ORDERED.14

Petitioner filed a Notice of Appeal15

from the RTCs May 4, 2004 Resolution.

Petitioner assailed the RTCs May 4, 2004 Resolution for reversingthe MTCs

factual findings16

and prayed that the MTC Decision be adopted. Her prayer before

the CA reads:cralavvonlinelawlibrary

WHEREFORE, premises considered, it is most respectfully prayed that the decisionof the Regional Trial Court, Branch 10 of La Trinidad, Benguet, appealed from be

reversedin totoand that the Honorable Court adopt the decision of the Municipal

Trial Court. Further reliefs just and equitable under the premises are prayed for.17

Respondents moved to dismiss petitioners ordinary appeal for being the improper

remedy. They asserted that the proper mode of appeal is a Petition for Review

under Rule 42 because the RTC rendered its May 4, 2004 Resolution in its appellate

jurisdiction.18

Ruling of the Court of Appeals

The CA dismissed petitioners appeal. It observed that the RTCs May 4, 2004


12/25

Resolution (the subject matter of the appeal before the CA) set asidean MTC

Judgment; hence, the proper remedy is a Petition for Review under Rule 42, and

not an ordinary appeal.19

Petitioner sought reconsideration.20

She argued, for the first time, that the RTC

rendered its May 4, 2004 Resolution in its original jurisdiction. She cited the earlier

October 22, 2003 Order of the RTC declaring the MTC without jurisdiction over the

case.

The CA denied petitioners Motion for Reconsideration in its September 22, 2006

Resolution:21

A perusal of the May 4, 2004 Resolution of the RTC, which is the subject matter of

the appeal, clearly reveals that it took cognizance of the MTC case in the exercise

of its appellate jurisdiction. Consequently, as We have previously enunciated, the

proper remedy, is a petition for review under Rule 42 and not an ordinary appeal

under Rule 41.

WHEREFORE, premises considered, the instant Motion for Reconsiderationis DENIED. The May 31, 2006 Resolution of this Court is hereby AFFIRMED in toto.

SO ORDERED.22

Hence this Petition wherein petitioner prays that the CA be ordered to take

cognizance of her appeal.23

Issues

Petitioner set forth the following issues in her Petition:cralavvonlinelawlibrary

WHETHER X X X THE COURT OF APPEALS WAS CORRECT IN DISMISSING THE

APPEAL FILED BY THE PETITIONER, CONSIDERING THAT THE REGIONAL TRIAL

COURT, BRANCH 10 OF LA TRINIDAD, BENGUET HELD THAT THE ORIGINAL

COMPLAINT AS FILED BEFORE THE MUNICIPAL TRIAL COURT OF LA TRINIDAD,

BENGUET WAS DECIDED BY THE LATTER WITHOUT ANY JURISDICTION AND, INORDERING THAT THE CASE SHALL BE DECIDED PURSUANT TO THE PROVISION OF

SECTION 8 OF RULE 40 OF THE RULES OF COURT, IT DECIDED THE CASE NOT ON ITS

APPELLATE JURISDICTION BUT ON ITS ORIGINAL JURISDICTION

WHAT WILL BE THE EFFECT OF THE DECISION OF THE REGIONAL TRIAL COURT,

BRANCH 10 OF LA TRINIDAD, BENGUET, WHEN IT DECIDED A CASE APPEALED

BEFORE IT UNDER THE PROVISION OF SECTION 8, RULE 40 OF THE RULES OF

COURT OF THE PHILIPPINES, AS TO THE COURSE OF REMEDY THAT MAY BE

AVAILED OF BY THE PETITIONERA PETITION FOR REVIEW UNDER RULE 42 OR AN

ORDINARY APPEAL UNDER RULE 41.24

nadcralavvonlinelawlibrary

Our Ruling

In its October 22, 2003 Order, the RTC declared that the MTC has no jurisdiction

over the subject matter of the case based on the supposition that the same is

incapable of pecuniary estimation. Thus, following Section 8, Rule 40 of the Rules

of Court, it took cognizance of the case and directed the parties to adduce further

evidence if they so desire. The parties bowed to this ruling of the RTC and,

eventually, submitted the case for its decision after they had submitted their

respective memoranda.

We cannot, however, gloss over this jurisdictionalfaux pasof the RTC. Since it

involves a question of jurisdiction, we may motu proprioreview and pass upon the

same even at this late stage of the proceedings.25

In her Complaint26

for reconveyance of real property with declaration of nullity of

OCT, petitioner claimed that she and her father had been in open, continuous,

notorious and exclusive possession of the disputed property since the 1940s. She

averred:cralavvonlinelawlibrary

7. Sometime in the year 1987, Elizabeth Monzon, the owner of the adjacent parcel

of land being occupied by plaintiff [Maslag], informed the plaintiff that the

respective parcels of land being claimed by them can now be titled. A suggestion

was, thereafter made, that those who were interested to have their lands titled,

will contribute to a common fund for the surveying and subsequent titling of the

land;chanroblesvirtualawlibrary

8. Since plaintiff had, for so long, yearned for a title to the land she occupies, she

contributed to the amount being requested by Elizabeth

Monzon;chanroblesvirtualawlibrary

9. A subdivision survey was made and in the survey, the respective areas of the

plaintiff and the defendants were defined and delimited all for purposes of

titling. x x x

10. But alas, despite the assurance of subdivided titles, when the title was finally

issued by the Registry of Deeds, the same was only in the name of Elizabeth

Monzon and WILLIAM GESTON. The name of Darma Maslag was fraudulently,

deliberately and in bad faith omitted. Thus, the title to the property, to the extent

of 18,295 square meters, was titled solely in the name of ELIZABETH MONZON.

As a relief, petitioner prayed that Monzon be ordered to reconvey the portion of

the property which she claimed was fraudulently included in Monzons title. Her

primary relief was to recover ownership of real property. Indubitably, petitioners

complaint involves title to real property. An action "involving title to real

property," on the other hand, was defined as an action where "the plaintiffs causeof action is based on a claim that [she] owns such property or that [she] has the


13/25

legal rights to have exclusive control, possession, enjoyment, or disposition of the

same."27

Under the present state of the law, in cases involving title to real

property, original and exclusive jurisdiction belongs to either the RTC or the MTC,

depending on the assessed value of the subject property.28

Pertinent provisions of

Batas Pambansa Blg. (BP) 129,29

as amended by Republic Act (RA) No.

7691,30

provides:cralavvonlinelawlibrary

Sec. 19.Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive

original jurisdiction:cralavvonlinelawlibrary

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

estimation;chanroblesvirtualawlibrary

(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 x x

x the [assessed] value [of the property] exceeds Fifty thousand pesos

([P]50,000.00) except actions for forcible entry into and unlawful detainer of lands

or buildings, original jurisdiction over which is conferred upon Metropolitan Trial

Courts, Municipal Trial Courts, and Municipal Circuit Trial

Courts;chanroblesvirtualawlibrary

x x x x

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: x x x x

(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.

In the case at bench, annexed to the Complaint is a Declaration of Real

Property31

dated November 12, 1991, which was later marked as petitioners

Exhibit "A",32

showing that the disputed property has an assessed value of

P12,40033

only. Such assessed value of the property is well within the jurisdiction

of the MTC. In fine, the RTC, thru Judge Cabato, erred in applying Section 19(1) of

BP 129 in determining which court has jurisdiction over the case and in

pronouncing that the MTC is divested of original and exclusive jurisdiction.

This brings to fore the next issue of whether the CA was correct in dismissing

petitioners appeal.

Section 2, Rule 50 of the Rules of Court provides for the dismissal of an improper

appeal:cralavvonlinelawlibrary

SECTION 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 forreview 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 theappropriate court but shall be dismissed outright. (Emphasis supplied)

There are two modes of appealing an RTC decision or resolution on issues of fact

and law.34

The first mode is an ordinary appeal under Rule 41 in cases where the

RTC exercised its original jurisdiction. It is done by filing a Notice of Appeal with

the RTC. The second mode is apetition for review under Rule 42 in cases where

the RTC exercised its appellate jurisdictionover MTC decisions. It is done by filing a

Petition for Review with the CA. Simply put, the distinction between these two

modes of appeal lies in the type of jurisdiction exercised by the RTC in the Order or

Decision being appealed.

As discussed above, the MTC has original and exclusive jurisdiction over the subject

matter of the case; hence, there is no other way the RTC could have taken

cognizance of the case and review the court a quosJudgment except in the

exercise of its appellate jurisdiction. Besides, the new RTC Judge who penned the

May 4, 2004 Resolution, Judge Diaz de Rivera, actually treated the case as an

appeal despite the October 22, 2003 Order. He started his Resolution by stating,

"This is an appeal from the Judgment rendered by the Municipal Trial Court (MTC)

of La Trinidad Benguet"35

and then proceeded to discuss the merits of the

"appeal." In the dispositive portion of said Resolution, he reversed the MTCs

findings and conclusions and remanded residual issues for trial with the

MTC.36

Thus, in fact and in law, the RTC Resolution was a continuation of the

proceedings that originated from the MTC. It was a judgment issued by the RTC inthe exercise of its appellate jurisdiction. With regard to the RTCs earlier October

22, 2003 Order, the same should be disregarded for it produces no effect (other

than to confuse the parties whether the RTC was invested with original or

appellate jurisdiction). It cannot be overemphasized that jurisdiction over the

subject matter is conferred only by law and it is "not within the courts, let alone

the parties, to themselves determine or coveniently set aside."37

Neither would

the active participation of the parties nor estoppeloperate to confer original and

exclusive jurisdiction where the court or tribunal only wields appellate jurisdiction

over the case.38

Thus, the CA is correct in holding that the proper mode of appeal

should have been a Petition for Review under Rule 42 of the Rules of Court, and

not an ordinary appeal under Rule 41.


14/25

Seeing the futility of arguing against what the RTC actually did, petitioner resorts to

arguing for what the RTC should have done. She maintains that the RTC should

have issued its May 4, 2004 Resolution in its original jurisdiction because it had

earlier ruled that the MTC had no jurisdiction over the cause of action.

Petitioners argument lacks merit. To reiterate, only statutes can confer

jurisdiction. Court i ssuances cannot seize or appropriate jurisdiction. It has been

repeatedly held that "any judgment, order or resolution issued without

[jurisdiction] is void and cannot be given any effect."39

By parity of reasoning, anorder issued by a court declaring that it has original and exclusive jurisdiction over

the subject matter of the case when under the law it has none cannot likewise be

given effect. It amounts to usurpation of jurisdiction which cannot be

countenanced. Since BP 129 already apportioned the jurisdiction of the MTC and

the RTC in cases involving title to property, neither the courts nor the petitioner

could alter or disregard the same. Besides, in determining the proper mode of

appeal from an RTC Decision or Resolution, the determinative factor is the type of

jurisdiction actually exercised by the RTC in rendering its Decision or

Resolution. Was it rendered by the RTC in the exercise of its original jurisdiction,

or in the exercise of its appellate jurisdiction? In short, we look at what type of

jurisdiction was actually exercisedby the RTC. We do not look into what type of

jurisdiction the RTC should haveexercised. This is but logical. Inquiring into what

the RTC should have done in disposing of the case is a question which already

involves the merits of the appeal, but we obviously cannot go into that where the

mode of appeal was improper to begin with.

WHEREFORE, premises considered, the Petition for Review is DENIED for lack ofmerit. The assailed May 31, 2006 and September 22, 2006 Resolutions of the

Court of Appeals in CA-G.R. CV No. 83365 are AFFIRMED.

SO ORDERED.


15/25


16/25

Primero instituted proceedings against DM with the Labor Arbiters of the

Department of Labor, for illegal dismissal, and for recovery of back wages and

reinstatement. It is not clear from the record whether these proceedings consisted

of one or two actions separately filed. What is certain is that he withdrew his

claims for back wages and reinstatement, "with the end in view of filing a damage

suit" "in a civil court which has exclusive jurisdiction over his complaint for

damages on causes of action founded on tortious acts, breach of employment

contract ... and consequent effects (thereof ).2

In any case, after due investigation, the Labor Arbiter rendered judgment dated

January 24, 1977 ordering DM to pay complainant Primero P2,000.00 as separation

pay in accordance with the Termination Pay Law.3The judgment was affirmed by

the National Labor Relations Commission and later by the Secretary of Labor, the

case having been concluded at this level on March 3, 1978.4

Under the provisions of the Labor Code in force at that time, Labor Arbiters had

jurisdiction inter aliaover

1) claims involving non-payment or underpayment of wages,

overtime compensation, social security and medicare benefits,and

2) all other cases or matters arising from employer-employee

relations, unless otherwise expressly excluded.5

And we have since held that under these "broad and comprehensive" terms of the

law, Labor Arbiters possessed original jurisdiction over claims for moral and other

forms of damages in labor disputes.6

The jurisdiction of Labor Arbiters over such claims was however removed by PD

1367, effective May 1, 1978, which explicitly provided that "Regional Directorsshall not indorse and Labor Arbiters shall not entertain claims for moral or other

forms of damages."7

Some three months afterwards, Primero brought suit against DM in the Court of

First Instance of Rizal seeking recovery of damages caused not only by the breach

of his employment contract, but also by the oppressive and inhuman, and

consequently tortious, acts of his employer and its officers antecedent and

subsequent to his dismissal from employment without just cause.8

While this action was pending in the CFI, the law governing the Labor Arbiters'

jurisdiction was once again revised. The amending act was PD 1691, effective May1, 1980. It eliminated the restrictive clause placed by PD 1367, that Regional

Directors shall not indorse and Labor Arbiters entertain claims for moral or other

forms of damages. And, as we have had occasion to declare in several cases, it

restored the principle that "exclusive and original jurisdiction for damages would

once again be vested in labor arbiters;" eliminated "the rather thorny question as

to where in labor matters the dividing line is to be drawn between the power

lodged in an administrative body and a court;' " and, "in the interest of greater

promptness in the disposition of labor matters, ... spared (courts of) the often

onerous task of determining what essentially is a factual matter, namely, the

damages that may be incurred by either labor or management as a result ofdisputes or controversies arising from employer-employee

relations."9Parenthetically, there was still another amendment of the provision in

question which, however, has no application to the case at bar. The amendment

was embodied in B.P. Blg. 227, effective June 1, 1

Date post:	02-Jun-2018
Category:	Documents
Upload:	jf-maneja
View:	235 times
Download:	0 times

Civpro(Full Wo Digest)

Documents