G.R. No.

140746

March 16, 2005

question was the jurisdictional amount of the Regional Trial

Court.

PANTRANCO NORTH EXPRESS, INC., and ALEXANDER

BUNCAN, Petitioner,
vs.
STANDARD INSURANCE COMPANY, INC., and MARTINA
GICALE, Respondents.

Appellants contend that there was a misjoinder of parties.

Assuming that there was, under the Rules of Court (Sec. 11,
Rule 7) as well as under the Rules of Civil Procedure (ditto),
the same does not affect the jurisdiction of the court nor is it
a ground to dismiss the complaint.

DECISION
xxx
SANDOVAL-GUTIERREZ, J.:
Before us is a petition for review on certiorari assailing the
Decision1 dated July 23 1999 and Resolution2 dated November 4, 1999
of the Court of Appeals in CA-G.R. CV No. 38453, entitled "Standard
Insurance Company, Inc., and Martina Gicale vs. PANTRANCO North
Express, Inc., and Alexander Buncan."
In the afternoon of October 28, 1984, Crispin Gicale was driving the
passenger jeepney owned by his mother Martina Gicale, respondent
herein. It was then raining. While driving north bound along the
National Highway in Talavera, Nueva Ecija, a passenger bus, owned
by Pantranco North Express, Inc., petitioner, driven by Alexander
Buncan, also a petitioner, was trailing behind. When the two vehicles
were negotiating a curve along the highway, the passenger bus
overtook the jeepney. In so doing, the passenger bus hit the left rear
side of the jeepney and sped away.
Crispin reported the incident to the Talavera Police Station and
respondent Standard Insurance Co., Inc. (Standard), insurer of the
jeepney. The total cost of the repair was P21,415.00, but respondent
Standard paid only P8,000.00. Martina Gicale shouldered the balance
of P13,415.00.
Thereafter, Standard and Martina, respondents, demanded
reimbursement from petitioners Pantranco and its driver Alexander
Buncan, but they refused. This prompted respondents to file with the
Regional Trial Court (RTC), Branch 94, Manila, a complaint for sum of
money.
In their answer, both petitioners specifically denied the allegations in
the complaint and averred that it is the Metropolitan Trial Court, not the
RTC, which has jurisdiction over the case.
3

On June 5, 1992, the trial court rendered a Decision in favor of

respondents Standard and Martina, thus:
"WHEREFORE, and in view of the foregoing considerations,
judgment is hereby rendered in favor of the plaintiffs,
Standard Insurance Company and Martina Gicale, and
against defendants Pantranco Bus Company and Alexander
Buncan, ordering the latter to pay as follows:
(1) to pay plaintiff Standard Insurance the amount
of P8,000.00 with interest due thereon from November 27,
1984 until fully paid;
(2) to pay plaintiff Martina Gicale the amount of P13,415.00
with interest due thereon from October 22, 1984 until fully
paid;
(3) to pay the sum of P10,000.00 for attorneys fees;

It does not need perspicacity in logic to see that appellees

Gicales and insurance companys individual claims against
appellees (sic) arose from the same vehicular accident on
October 28, 1984 involving appellant Pantrancos bus and
appellee Gicales jeepney. That being the case, there was a
question of fact common to all the parties: Whose fault or
negligence caused the damage to the jeepney?
Appellants submit that they were denied their day in court
because the case was deemed submitted for decision
"without even declaring defendants in default or to have
waived the presentation of evidence." This is incorrect. Of
course, the court did not declare defendants in default
because that is done only when the defendant fails to tender
an answer within the reglementary period. When the lower
court ordered that the case is deemed submitted for decision
that meant that the defendants were deemed to have waived
their right to present evidence. If they failed to adduce their
evidence, they should blame nobody but themselves. They
failed to be present during the scheduled hearing for the
reception of their evidence despite notice and without any
motion or explanation. They did not even file any motion for
reconsideration of the order considering the case submitted
for decision.
Finally, contrary to the assertion of the defendant-appellants,
the evidence preponderantly established their liability for
quasi-delict under Article 2176 of the Civil Code."
Petitioners filed a motion for reconsideration but was denied by the
Appellate Court in a Resolution dated November 4, 1999.
Hence, this petition for review on certiorari raising the following
assignments of error:
"I
WHETHER OR NOT THE TRIAL COURT HAS
JURISDICTION OVER THE SUBJECT OF THE ACTION
CONSIDERING THAT RESPONDENTS RESPECTIVE
CAUSE OF ACTION AGAINST PETITIONERS DID NOT
ARISE OUT OF THE SAME TRANSACTION NOR ARE
THERE QUESTIONS OF LAW AND FACTS COMMON TO
BOTH PETITIONERS AND RESPONDENTS.
II
WHETHER OR NOT PETITIONERS ARE LIABLE TO
RESPONDENTS CONSIDERING THAT BASED ON THE
EVIDENCE ADDUCED AND LAW APPLICABLE IN THE
CASE AT BAR, RESPONDENTS HAVE NOT SHOWN ANY
RIGHT TO THE RELIEF PRAYED FOR.

(4) to pay the expenses of litigation and the cost of suit.

SO ORDERED."

III
WHETHER OR NOT PETITIONERS WERE DEPRIVED OF
THEIR RIGHT TO DUE PROCESS."

On appeal, the Court of Appeals, in a Decision4 dated July 23, 1999,

affirmed the trial courts ruling, holding that:
"The appellants argue that appellee Gicales claim
of P13,415.00 and appellee insurance companys claim
of P8,000.00 individually fell under the exclusive original
jurisdiction of the municipal trial court. This is not correct
because under the Totality Rule provided for under Sec. 19,
Batas Pambansa Bilang 129, it is the sum of the two claims
that determines the jurisdictional amount.
xxx
In the case at bench, the total of the two claims is definitely
more than P20,000.00 which at the time of the incident in

For their part, respondents contend that their individual claims arose
out of the same vehicular accident and involve a common question of
fact and law. Hence, the RTC has jurisdiction over the case.
I
Petitioners insist that the trial court has no jurisdiction over the case
since the cause of action of each respondent did not arise from the
same transaction and that there are no common questions of law and
fact common to both parties. Section 6, Rule 3 of the Revised Rules of
Court,5 provides:
"Sec. 6. Permissive joinder of parties. All persons in whom
or against whom any right to relief in respect to or arising out

of the same transaction or series of transactions is alleged to

exist, whether jointly, severally, or in the alternative, may,
except as otherwise provided in these Rules, join as plaintiffs
or be joined as defendants in one complaint, where any
question of law or fact common to all such plaintiffs or to all
such defendants may arise in the action; but the court may
make such orders as may be just to prevent any plaintiff or
defendant from being embarrassed or put to expense in
connection with any proceedings in which he may have no
interest."
Permissive joinder of parties requires that: (a) the right to relief arises
out of the same transaction or series of transactions; (b) there is a
question of law or fact common to all the plaintiffs or defendants; and
(c) such joinder is not otherwise proscribed by the provisions of the
Rules on jurisdiction and venue.6
In this case, there is a single transaction common to all, that is,
Pantrancos bus hitting the rear side of the jeepney. There is also a
common question of fact, that is, whether petitioners are negligent.
There being a single transaction common to both respondents,
consequently, they have the same cause of action against petitioners.
To determine identity of cause of action, it must be ascertained
whether the same evidence which is necessary to sustain the second
cause of action would have been sufficient to authorize a recovery in
the first.7 Here, had respondents filed separate suits against
petitioners, the same evidence would have been presented to sustain
the same cause of action. Thus, the filing by both respondents of the
complaint with the court below is in order. Such joinder of parties
avoids multiplicity of suit and ensures the convenient, speedy and
orderly administration of justice.
Corollarily, Section 5(d), Rule 2 of the same Rules provides:
"Sec. 5. Joinder of causes of action. A party may in one
pleading assert, in the alternative or otherwise, as many
causes of action as he may have against an opposing party,
subject to the following conditions:

III
There is no merit in petitioners contention that they were denied due
process. Records show that during the hearing, petitioner Pantrancos
counsel filed two motions for resetting of trial which were granted by
the trial court. Subsequently, said counsel filed a notice to withdraw.
After respondents had presented their evidence, the trial court, upon
petitioners motion, reset the hearing to another date. On this date,
Pantranco failed to appear. Thus, the trial court warned Pantranco that
should it fail to appear during the next hearing, the case will be
submitted for resolution on the basis of the evidence presented.
Subsequently, Pantrancos new counsel manifested that his client is
willing to settle the case amicably and moved for another
postponement. The trial court granted the motion. On the date of the
hearing, the new counsel manifested that Pantrancos employees are
on strike and moved for another postponement. On the next hearing,
said counsel still failed to appear. Hence, the trial court considered the
case submitted for decision.
We have consistently held that the essence of due process is simply
an opportunity to be heard, or an opportunity to explain ones side or
an opportunity to seek for a reconsideration of the action or ruling
complained of.11
Petitioner Pantranco filed an answer and participated during the trial
and presentation of respondents evidence. It was apprised of the
notices of hearing issued by the trial court. Indeed, it was afforded fair
and reasonable opportunity to explain its side of the controversy.
Clearly, it was not denied of its right to due process. What is frowned
upon is the absolute lack of notice and hearing which is not present
here.
WHEREFORE, the petition is DENIED. The assailed Decision dated
July 23 1999 and Resolution dated November 4, 1999 of the Court of
Appeals in CA-G.R. CV No. 38453 are hereby AFFIRMED. Costs
against petitioners.
SO ORDERED.

xxx
G.R. No. 160384. April 29, 2005
(d) Where the claims in all the causes of action are
principally for recovery of money the aggregate amount
claimed shall be the test of jurisdiction."
The above provision presupposes that the different causes of action
which are joined accrue in favor of the same plaintiff/s and against the
same defendant/s and that no misjoinder of parties is involved.8 The
issue of whether respondents claims shall be lumped together is
determined by paragraph (d) of the above provision. This paragraph
embodies the "totality rule" as exemplified by Section 33 (1) of B.P. Blg.
1299 which states, among others, that "where there are several claims
or causes of action between the same or different parties, embodied in
the same complaint, the amount of the demand shall be the totality of
the claims in all the causes of action, irrespective of whether the
causes of action arose out of the same or different transactions."
As previously stated, respondents cause of action against petitioners
arose out of the same transaction. Thus, the amount of the demand
shall be the totality of the claims.
Respondent Standards claim is P8,000.00, while that of respondent
Martina Gicale is P13,415.00, or a total ofP21,415.00. Section 19 of
B.P. Blg. 129 provides that the RTC has "exclusive original jurisdiction
over all other cases, in which the demand, exclusive of interest and
cost or the value of the property in controversy, amounts to more than
twenty thousand pesos (P20,000.00)." Clearly, it is the RTC that has
jurisdiction over the instant case. It bears emphasis that when the
complaint was filed, R.A. 7691 expanding the jurisdiction of the
Metropolitan, Municipal and Municipal Circuit Trial Courts had not yet
taken effect. It became effective on April 15, 1994.
II
The finding of the trial court, affirmed by the Appellate Court, that
petitioners are negligent and thus liable to respondents, is a factual
finding which is binding upon us, a rule well-established in our
jurisprudence. It has been repeatedly held that the trial court's factual
findings, when affirmed by the Appellate Court, are conclusive and
binding upon this Court, if they are not tainted with arbitrariness or
oversight of some fact or circumstance of significance and influence.
Petitioners have not presented sufficient ground to warrant a deviation
from this rule.10

CESAR T. HILARIO, for himself and as Attorney-in-Fact of

IBARRA, NESTOR, LINA and PRESCILLA, all surnamed
HILARIO, Petitioners,
vs.
ALLAN T. SALVADOR, Respondents.
HEIRS OF SALUSTIANO SALVADOR, namely, REGIDOR M.
SALVADOR and VIRGINIA SALVADOR-LIM,respondents-intervenors.
DECISION
CALLEJO, SR., J.:
This is a petition for review on certiorari under Rule 45 of the Revised
Rules of Court of the Decision1 of the Court of Appeals (CA) in CAG.R. CV No. 63737 as well as its Resolution2 denying the motion for
the reconsideration of the said decision.
The Antecedents
On September 3, 1996, petitioners Cesar, Ibarra, Nestor, Lina and
Prescilla, all surnamed Hilario, filed a complaint with the Regional Trial
Court (RTC) of Romblon, Romblon, Branch 71, against private
respondent Allan T. Salvador. They alleged therein, inter alia, as
follows:
2. That, the plaintiffs are co-owners by inheritance from Concepcion
Mazo Salvador of a parcel of land designated as Cad. Lot No. 3113part, located at Sawang, Romblon, Romblon, which property was
[adjudged] as the hereditary share of their father, Brigido M. Hilario, Jr.
when their father was still single, and which adjudication was known by
the plaintiffs[] fathers co-heirs;
3. That, sometime in 1989, defendant constructed his dwelling unit of
mixed materials on the property of the plaintiffs father without the
knowledge of the herein plaintiffs or their predecessors-in-interest;
4. That, demands have been made of the defendant to vacate the
premises but the latter manifested that he have (sic) asked the prior
consent of their grandmother, Concepcion Mazo Salvador;

5. That, to reach a possible amicable settlement, the plaintiffs brought

the matter to the Lupon of Barangay Sawang, to no avail, evidenced by
the CERTIFICATE TO FILE ACTION hereto attached as ANNEX B;

During trial, the petitioners adduced in evidence Tax Declaration No.

8590-A showing that in 1991 the property had an assessed value
of P5,950.00.12

6. That, the unjustified refusal of the defendant to vacate the property

has caused the plaintiffs to suffer shame, humiliation, wounded
feelings, anxiety and sleepless nights;

On June 3, 1999, the trial court rendered judgment finding in favor of

the petitioners. The dispositive portion of the decision reads:
WHEREFORE, as prayed for, judgment is rendered:

7. That, to protect their rights and interest, plaintiffs were constrained to

engage the services of a lawyer.3
The petitioners prayed that, after due proceedings, judgment be
rendered in their favor, thus:
WHEREFORE, it is prayed of this Honorable Court that after due
process (sic), an order be issued for the defendant to vacate and
peacefully turn over to the plaintiffs the occupied property and that
defendant be made to pay plaintiffs:

Ordering the defendant to vacate and peacefully turn over to the

plaintiffs the occupied property; and
Dismissing defendants counterclaim.
SO ORDERED.13

a. actual damages, as follows:

Aggrieved, the private respondent and respondent-intervenor Regidor

Salvador appealed the decision to the CA, which rendered judgment
on May 23, 2003 reversing the ruling of the RTC and dismissing the
complaint for want of jurisdiction. The fallo of the decision is as follows:

a.1. transportation expenses in connection with the projected

settlement of the case amounting to P1,500.00 and for the subsequent
attendance to the hearing of this case at P1,500.00 each schedule;

IN VIEW OF THE FOREGOING, the appealed decision is REVERSED,

and the case DISMISSED, without prejudice to its refilling in the proper
court.

a.2. attorneys fees in the amount of P20,000.00 and P500.00 for every
court appearance;

SO ORDERED.14

b. moral and exemplary damages in such amount incumbent upon the

Honorable Court to determine; and
c. such other relief and remedies just and equitable under the
premises.4
The private respondent filed a motion to dismiss the complaint on the
ground of lack of jurisdiction over the nature of the action, citing
Section 33 of Batas Pambansa (B.P.) Blg. 129, as amended by Section
3(3) of Republic Act (R.A.) No. 7691.5 He averred that
(1) the complaint failed to state the assessed value of the land in
dispute;
(2) the complaint does not sufficiently identify and/or describe the
parcel of land referred to as the subject-matter of this action;
both of which are essential requisites for determining the jurisdiction of
the Court where the case is filed. In this case, however, the assessed
value of the land in question is totally absent in the allegations of the
complaint and there is nothing in the relief prayed for which can be
picked-up for determining the Courts jurisdiction as provided by law.
In the face of this predicament, it can nevertheless be surmised by
reading between the lines, that the assessed value of the land in
question cannot exceed P20,000.00 and, as such, it falls within the
jurisdiction of the Municipal Trial Court of Romblon and should have
been filed before said Court rather than before the RTC. 6
The petitioners opposed the motion.7 They contended that the RTC
had jurisdiction over the action since the court can take judicial notice
of the market value of the property in question, which was P200.00 per
square meter and considering that the property was 14,797 square
meters, more or less, the total value thereof isP3,500,000.00. Besides,
according to the petitioners, the motion to dismiss was premature and
"the proper time to interpose it is when the [petitioners] introduced
evidence that the land is of such value."
On November 7, 1996, the RTC issued an Order8 denying the motion
to dismiss, holding that the action was incapable of pecuniary
estimation, and therefore, cognizable by the RTC as provided in
Section 19(1) of B.P. Blg. 129, as amended.
After the denial of the motion to dismiss, the private respondent filed
his answer with counterclaim.9 Traversing the material allegations of
the complaint, he contended that the petitioners had no cause of action
against him since the property in dispute was the conjugal property of
his grandparents, the spouses Salustiano Salvador and Concepcion
Mazo-Salvador.
On April 8, 1997, Regidor and Virginia Salvador filed their Answer-inIntervention10 making common cause with the private respondent. On
her own motion, however, Virginia Salvador was dropped as
intervenor.11

The CA declared that the action of the petitioners was one for the
recovery of ownership and possession of real property. Absent any
allegation in the complaint of the assessed value of the property, the
Municipal Trial Court (MTC) had exclusive jurisdiction over the action,
conformably to Section 3315 of R.A. No. 7691.
The petitioners filed a motion for reconsideration of the said decision,
which the appellate court denied.16 Hence, they filed the instant
petition, with the following assignment of errors:
I
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
REVERSIBLE ERROR IN HOLDING THAT THE INSTANT
CASE, ACCION REINVINDICATORIA, FALLS WITHIN THE
EXCLUSIVE ORIGINAL JURISDICTION OF THE MUNICIPAL TRIAL
COURT OF ROMBLON, AND NOT WITH THE REGIONAL TRIAL
COURT OF ROMBLON.
II
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS
REVERSIBLE ERROR IN ORDERING THE REFILING OF THE CASE
IN THE [PROPER] COURT, INSTEAD OF DECIDING THE CASE ON
THE MERITS BASED ON THE COMPLETE RECORDS ELEVATED
BEFORE SAID APPELLATE COURT AND IN NOT AFFIRMING IN
TOTO THE DECISION OF THE TRIAL COURT.17
The Ruling of the Court
The lone issue for our resolution is whether the RTC had jurisdiction
over the action of the petitioners, the plaintiffs in the RTC, against the
private respondent, who was the defendant therein.
The petitioners maintain that the RTC has jurisdiction since their action
is an accion reinvindicatoria, an action incapable of pecuniary
estimation; thus, regardless of the assessed value of the subject
property, exclusive jurisdiction falls within the said court. Besides,
according to the petitioners, in their opposition to respondents motion
to dismiss, they made mention of the increase in the assessed value of
the land in question in the amount of P3.5 million. Moreover, the
petitioners maintain that their action is also one for damages
exceedingP20,000.00, over which the RTC has exclusive jurisdiction
under R.A. No. 7691.
The petition has no merit.
It bears stressing that the nature of the action and which court has
original and exclusive jurisdiction over the same is determined by the
material allegations of the complaint, the type of relief prayed for by the
plaintiff and the law in effect when the action is filed, irrespective of
whether the plaintiffs are entitled to some or all of the claims asserted
therein.18 The caption of the complaint is not determinative of the
nature of the action. Nor does the jurisdiction of the court depend upon

the answer of the defendant or agreement of the parties or to the

waiver or acquiescence of the parties.
We do not agree with the contention of the petitioners and the ruling of
the CA that the action of the petitioners in the RTC was an accion
reinvindicatoria. We find and so rule that the action of the petitioners
was an accion publiciana, or one for the recovery of possession of the
real property subject matter thereof. An accion reinvindicatoria is a suit
which has for its object the recovery of possession over the real
property as owner. It involves recovery of ownership and possession
based on the said ownership. On the other hand, an accion
publiciana is one for the recovery of possession of the right to possess.
It is also referred to as an ejectment suit filed after the expiration of one
year after the occurrence of the cause of action or from the unlawful
withholding of possession of the realty.19
The action of the petitioners filed on September 3, 1996 does not
involve a claim of ownership over the property. They allege that they
are co-owners thereof, and as such, entitled to its possession, and that
the private respondent, who was the defendant, constructed his house
thereon in 1989 without their knowledge and refused to vacate the
property despite demands for him to do so. They prayed that the
private respondent vacate the property and restore possession thereof
to them.
When the petitioners filed their complaint on September 3, 1996, R.A.
No. 7691 was already in effect. Section 33(3) of the law provides:
Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts
and Municipal Circuit Trial Courts in Civil Cases. Metropolitan Trial
Courts, Municipal Trial Courts and Municipal Circuit Trial Courts shall
exercise:

(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.

the same in 1995 or 1996, the MTC, and not the RTC had jurisdiction
over the action of the petitioners since the case involved title to or
possession of real property with an assessed value of less
than P20,000.00.23
We quote with approval, in this connection, the CAs disquisition:
The determining jurisdictional element for the accion reinvindicatoria is,
as RA 7691 discloses, the assessed value of the property in question.
For properties in the provinces, the RTC has jurisdiction if the
assessed value exceeds P20,000, and the MTC, if the value
is P20,000 or below. An assessed value can have reference only to the
tax rolls in the municipality where the property is located, and is
contained in the tax declaration. In the case at bench, the most recent
tax declaration secured and presented by the plaintiffs-appellees is
Exhibit B. The loose remark made by them that the property was worth
3.5 million pesos, not to mention that there is absolutely no evidence
for this, is irrelevant in the light of the fact that there is an assessed
value. It is the amount in the tax declaration that should be consulted
and no other kind of value, and as appearing in Exhibit B, this
is P5,950. The case, therefore, falls within the exclusive original
jurisdiction of the Municipal Trial Court of Romblon which has
jurisdiction over the territory where the property is located, and not the
court a quo.24
It is elementary that the tax declaration indicating the assessed value
of the property enjoys the presumption of regularity as it has been
issued by the proper government agency.25
Unavailing also is the petitioners argumentation that since the
complaint, likewise, seeks the recovery of damages
exceeding P20,000.00, then the RTC had original jurisdiction over their
actions. Section 33(3) of B.P. Blg. 129, as amended, quoted earlier,
explicitly excludes from the determination of the jurisdictional amount
the demand for "interest, damages of whatever kind, attorneys fees,
litigation expenses, and costs." This Court issued Administrative
Circular No. 09-94 setting the guidelines in the implementation of R.A.
No. 7691, and paragraph 2 thereof states that

Section 19(2) of the law, likewise, provides that:

2. The exclusion of the term "damages of whatever kind" in

determining the jurisdictional amount under Section 19(8) and Section
33(1) of B.P. Blg. 129, as amended by R.A. 7691, applies to cases
where the damages are merely incidental to or a consequence of the
main cause of action. However, in cases where the claim for damages
is the main cause of action, or one of the causes of action, the amount
of such claim shall be considered in determining the jurisdiction of the
court.

Sec. 19. Jurisdiction in civil cases. The Regional Trial Court shall
exercise exclusive original jurisdiction:

Neither may the petitioners find comfort and solace in Section 19(8) of
B.P. Blg. 129, as amended, which states:

(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.
The jurisdiction of the court over an action involving title to or
possession of land is now determined by the assessed value of the
said property and not the market value thereof. The assessed value of
real property is the fair market value of the real property multiplied by
the assessment level. It is synonymous to taxable value.20 The fair
market value is the price at which a property may be sold by a seller,
who is not compelled to sell, and bought by a buyer, who is not
compelled to buy.

SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall

exercise exclusive original jurisdiction:

(8) In all other cases in which the demand, exclusive of interest,

damages of whatever kind, attorney's fees, litigation expenses, and
costs or the value of the property in controversy exceeds One Hundred
Thousand Pesos (P100,000.00) or, in such other cases in Metro
Manila, where the demand, exclusive of the above-mentioned items
exceeds Two Hundred Thousand Pesos (P200,000.00).
The said provision is applicable only to "all other cases" other than an
action involving title to, or possession of real property in which the
assessed value is the controlling factor in determining the courts
jurisdiction. The said damages are merely incidental to, or a
consequence of, the main cause of action for recovery of possession
of real property.26

Even a cursory reading of the complaint will show that it does not
contain an allegation stating the assessed value of the property subject
of the complaint.21 The court cannot take judicial notice of the
assessed or market value of lands.22 Absent any allegation in the
complaint of the assessed value of the property, it cannot thus be
determined whether the RTC or the MTC had original and exclusive
jurisdiction over the petitioners action.

Since the RTC had no jurisdiction over the action of the petitioners, all
the proceedings therein, including the decision of the RTC, are null and
void. The complaint should perforce be dismissed.27

We note that during the trial, the petitioners adduced in evidence Tax
Declaration No. 8590-A, showing that the assessed value of the
property in 1991 was P5,950.00. The petitioners, however, did not
bother to adduce in evidence the tax declaration containing the
assessed value of the property when they filed their complaint in 1996.
Even assuming that the assessed value of the property in 1991 was

SO ORDERED.

WHEREFORE, the petition is DENIED. The assailed Decision and

Resolution of the Court of Appeals in CA-G.R. CV No. 63737 are
AFFIRMED. Costs against the petitioners.

G.R. NO. 155179

August 24, 2007

VICTORINO QUINAGORAN, Petitioner,

vs.
COURT OF APPEALS and THE HEIRS OF JUAN DE LA
CRUZ, Respondents.

defendant refused and in fact now claims ownership of the

portion in which said house stands;
9. That repeated demands relative to the removal of the
subject house were hence made but which landed on deaf
ears;

DECISION
AUSTRIA-MARTINEZ, J.:

10. That a survey of the property as owned by herein

plaintiffs clearly establishes that the subject house is
occupying Four Hundred (400) square meters thereof at the
north-west portion thereof, as per the approved survey plan
in the records of the Bureau of Lands.

Before the Court is a Petition for Review on Certiorari under Rule 45 of

the Rules of Court, assailing the Decision1of the Court Appeals (CA) in
CA-GR SP No. 60443 dated May 27, 2002 and its Resolution2 dated
August 28, 2002, which denied petitioner's Motion for Reconsideration.

xxxx
The factual antecedents.
The heirs of Juan dela Cruz, represented by Senen dela Cruz
(respondents), filed on October 27, 1994 a Complaint for Recovery of
Portion of Registered Land with Compensation and Damages against
Victorino Quinagoran (petitioner) before the Regional Trial Court (RTC)
Branch XI of Tuao, Cagayan, docketed as Civil Case No. 240-T.3 They
alleged that they are the co-owners of a a parcel of land containing
13,100 sq m located at Centro, Piat, Cagayan, which they inherited
from the late Juan dela Cruz;4 that in the mid-70s, petitioner started
occupying a house on the north-west portion of the property, covering
400 sq m, by tolerance of respondents; that in 1993, they asked
petitioner to remove the house as they planned to construct a
commercial building on the property; that petitioner refused, claiming
ownership over the lot; and that they suffered damages for their failure
to use the same.5 Respondents prayed for the reconveyance and
surrender of the disputed 400 sq m, more or less, and to be paid the
amount of P5,000.00 monthly until the property is vacated, attorney's
fees in the amount of P20,000.00, costs of suit and other reliefs and
remedies just and equitable.6
Petitioner filed a Motion to Dismiss claiming that the RTC has no
jurisdiction over the case under Republic Act (R.A.) No. 7691, which
expanded the exclusive original jurisdiction of the Municipal Trial Court
(MTC) to include all civil actions which involve title to, or possession of,
real property, or any interest therein which does not
exceedP20,000.00. He argued that since the 346 sq m lot which he
owns adjacent to the contested property has an assessed value
of P1,730.00, the assessed value of the lot under controversy would
not be more than the said amount.7
The RTC denied petitioner's Motion to Dismiss in an Order dated
November 11, 1999, thus:
The Court finds the said motion to be without merit. The present action
on the basis of the allegation of the complaint partakes of the nature of
action publicciana (sic) and jurisdiction over said action lies with the
Regional Trial Court, regardless of the value of the property. This is so
because in paragraph 8 of the complaint, it is alleged that the plaintiff
demanded from the defendant the removal of the house occupied by
the defendant and the possession of which is "Only due to Tolerance
(sic) of herein plaintiffs".
WHEREFORE, for lack of merit, the motion to dismiss is hereby
denied.8
Petitioner's Motion for Reconsideration was also denied by the RTC.9
Petitioner then went to the CA on a Petition for Certiorari and
Prohibition seeking the annulment of the Orders of the RTC.10
On May 27, 2002, the CA rendered the herein assailed Decision
dismissing petitioner's action and affirming in totothe RTC.11 Pertinent
portions of said Decision, read:
At the onset, we find that the complaint filed by the Heirs of Juan dela
Cruz, represented by Senen dela Cruz adequately set forth the
jurisdictional requirements for a case to be cognizable by the Regional
Trial Court. The Complaint is captioned "recovery of portion of
registered land" and it contains the following allegations:
7. That since plaintiffs and defendant were neighbors, the
latter being the admitted owner of the adjoining lot, the
former's occupancy of said house by defendant was only
due to the tolerance of herein plaintiffs;
8. That plaintiffs, in the latter period of 1993, then demanded
the removal of the subject house for the purpose of
constructing a commercial building and which herein

It is settled that when the complaint fails to aver facts constitutive of

forcible entry or unlawful detainer, as where it does not state how entry
was effected or how and when dispossession started, the remedy
should either be anaccion publiciana or an accion reinvindicatoria in
the proper regional trial court. In the latter instances, jurisdiction
pertains to the Regional Trial Court.
As another legal recourse from a simple ejectment case governed by
the Revised Rules of Summary Procedure, an accion publiciana is the
plenary action to recover the right of possession when dispossession
has lasted more than one year or when dispossession was effected by
means other than those mentioned in Rule 70 of the Rules of Court.
Where there is no allegation that there was denial of possession
through any of the methods stated in Section 1, Rule 70 of the Rules of
Court, or where there is no lease contract between the parties, the
proper remedy is the plenary action of recovery of possession.
Necessarily, the action falls within the jurisdiction of the Regional Trial
Court. Thus, we find that the private respondents [heirs of dela Cruz]
availed of the proper remedy when they filed the action before the
court a quo.
Undoubtedly, the respondent court therefore did not act with grave
abuse of discretion amounting to or in excess of jurisdiction in denying
Quinagoran's Motion to Dismiss and the Motion for Reconsideration,
thereof, because it has jurisdiction to hear and decide the instant case.
xxxx
It would not be amiss to point out that the nature of the action and
jurisdiction of courts are determined by the allegations in the complaint.
As correctly held by the Regional Trial Court, "the present action on the
basis of the allegation of the complaint partakes of the nature of action
publiciana and jurisdiction over said action lies with the Regional Trial
Court regardless of the value of the property. Therefore, we completely
agree with the court a quo's conclusion that the complaint filed by the
Heirs of Juan dela Cruz, represented by Senen dela Cruz, is in the
nature of an accion publiciana and hence it is the Regional Trial Court
which has jurisdiction over the action, regardless of the assessed value
of the property subject of present controversy.12
Petitioner's Motion for Reconsideration was denied on August 28, 2002
for lack of merit.13
Petitioner now comes before this Court on a petition for review
claiming that under R.A. No. 7691 the jurisdiction of the MTC,
Metropolitan Trial Court (MeTC), and Municipal Trial Court in Cities
(MTCC) was expanded to include exclusive original jurisdiction over
civil actions when the assessed value of the property does not
exceedP20,000.00 outside Metro Manila and P50,000.00 within Metro
Manila.14 He likewise avers that it is an indispensable requirement that
the complaint should allege the assessed value of the property
involved.15 In this case, the complaint does not allege that the
assessed value of the land in question is more than P20,000.00. There
was also no tax declaration attached to the complaint to show the
assessed value of the property. Respondents therefore failed to allege
that the RTC has jurisdiction over the instant case.16 The tax
declaration covering Lot No. 1807 owned by respondents and where
the herein disputed property is purportedly part -- a copy of which
petitioner submitted to the CA -- also shows that the value of the
property is only P551.00.17Petitioner then prays that the CA Decision
and Resolution be annulled and set aside and that the complaint of
herein respondents before the trial court be dismissed for lack of
jurisdiction.18
Respondents contend that: the petition is without factual and legal
bases, and the contested decision of the CA is entirely in accordance
with law;19 nowhere in the body of their complaint before the RTC does
it state that the assessed value of the property is
below P20,000.00;20 the contention of petitioner in his Motion to
Dismiss before the RTC that the assessed value of the disputed lot is

below P20,000.00 is based on the assessed value of an adjacent

property and no documentary proof was shown to support the said
allegation;21 the tax declaration which petitioner presented, together
with his Supplemental Reply before the CA, and on the basis of which
he claims that the disputed property's assessed value is only P551.00,
should also not be given credence as the said tax declaration reflects
the amount of P56,100.00 for the entire property.22

has original and exclusive jurisdiction over the same is determined by

the material allegations of the complaint, the type of relief prayed for by
the plaintiff and the law in effect when the action is filed, irrespective of
whether the plaintiffs are entitled to some or all of the claims asserted
therein.31
In this case, the complaint denominated as "Recovery of Portion of
Registered Land with Compensation and Damages," reads:

The question posed in the present petition is not complicated, i.e.,

does the RTC have jurisdiction over all cases of recovery of
possession regardless of the value of the property involved?

1. That plaintiffs are the only direct and legitimate heirs of the
late Juan dela Cruz, who died intestate on February 3, 1977,
and are all residents of Centro, Piat, Cagayan;

The answer is no. The doctrine on which the RTC anchored its denial
of petitioner's Motion to Dismiss, as affirmed by the CA -- that all cases
of recovery of possession or accion publiciana lies with the regional
trial courts regardless of the value of the property -- no longer holds
true. As things now stand, a distinction must be made between those
properties the assessed value of which is below P20,000.00, if outside
Metro Manila; andP50,000.00, if within.

xxxx
4. That plaintiffs inherited from x x x Juan dela Cruz x x x a
certain parcel of land x x x containing an area of 13,111
square meters.
5. That sometime in the mid-1960's, a house was erected on
the north-west portion of the aforedescribed lot x x x.

Republic Act No. 769123 which amended Batas Pambansa Blg.

12924 and which was already in effect25 when respondents filed their
complaint with the RTC on October 27, 1994,26 expressly provides:

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

7. That since plaintiffs and defendant were neighbors, the

latter being the admitted owner of the adjoining lot, the
former's occupancy of said house by defendant was only
due to the tolerance of herein plaintiffs;

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 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.

8. That plaintiffs, in the latter period of 1993, then demanded

the removal of the subject house for the purpose of
constructing a commercial building and which herein
defendant refused and in fact now claims ownership of the
portion in which said house stands;
9. That repeated demands relative to the removal of the
subject house were hence made but which landed on deaf
ears;

xxxx

10. That a survey of the property as owned by herein

plaintiffs clearly establishes that the subject house is
occupying Four Hundred (400) square meters thereof at the
north-west portion thereof, as per the approved survey plan
in the records of the Bureau of Lands.32

SEC. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial

Courts and Municipal Circuit Trial Courts in Civil Cases.
--- Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
Circuit Trial Courts shall exercise:
xxxx
(3) Exclusive original jurisdiction in all civil actions which involve
title to, or possession of , real property, or any interest therein
where the assessed value of the property or interest therein does
not exceed Twenty thousand pesos (P20,000.00) or, in civil actions
in Metro Manila, where such assessed value does not exceed Fifty
thousand pesos (P50,000.00) exclusive of interest, damages or
whatever kind, attorney's fees, litigation expenses and
costs: Provided That in cases of land not declared for taxation
purposes, the value of such property shall be determined by the
assessed value of the adjacent lots.(Emphasis supplied)
The Court has also declared that all cases involving title to or
possession of real property with an assessed value of less
than P20,000.00 if outside Metro Manila, falls under the original
jurisdiction of the municipal trial court.27
In Atuel v. Valdez28 the Court likewise expressly stated that:
Jurisdiction over an accion publiciana is vested in a court of general
jurisdiction. Specifically, the regional trial court exercises exclusive
original jurisdiction "in all civil actions which involve x x x possession of
real property." However, if the assessed value of the real property
involved does not exceed P50,000.00 in Metro Manila,
and P20,000.00 outside of Metro Manila, the municipal trial court
exercises jurisdiction over actions to recover possession of real
property.29
That settled, the next point of contention is whether the complaint must
allege the assessed value of the property involved. Petitioner
maintains that there should be such an allegation, while respondents
claim the opposite.
In no uncertain terms, the Court has already held that a complaint must
allege the assessed value of the real property subject of the complaint
or the interest thereon to determine which court has jurisdiction over
the action.30 This is because the nature of the action and which court

Nowhere in said complaint was the assessed value of the subject

property ever mentioned. There is therefore no showing on the face of
the complaint that the RTC has exclusive jurisdiction over the action of
the respondents.33Indeed, absent any allegation in the complaint of the
assessed value of the property, it cannot be determined whether the
RTC or the MTC has original and exclusive jurisdiction over the
petitioner's action.34 The courts cannot take judicial notice of the
assessed or market value of the land.351avvphi1
Jurisdiction of the court does not depend upon the answer of the
defendant or even upon agreement, waiver or acquiescence of the
parties.36 Indeed, the jurisdiction of the court over the nature of the
action and the subject matter thereof cannot be made to depend upon
the defenses set up in the court or upon a motion to dismiss for,
otherwise, the question of jurisdiction would depend almost entirely on
the defendant.37
Considering that the respondents failed to allege in their complaint the
assessed value of the subject property, the RTC seriously erred in
denying the motion to dismiss. Consequently, all proceedings in the
RTC are null and void,38 and the CA erred in affirming the RTC.39
WHEREFORE, the petition is GRANTED. The Court of Appeals's
Decision in CA-GR SP No. 60443 dated May 27, 2002 and its
Resolution dated August 28, 2002, are REVERSED and SET ASIDE.
The Regional Trial Courts Orders dated November 11, 1999 and May
11, 2000, and all proceedings therein are declared NULL and VOID.
The complaint in Civil Case No. 240-T is dismissed without prejudice.
No costs.
SO ORDERED.

G.R. No. 119347 March 17, 1999

EULALIA RUSSELL, PUPERTO TAUTHO, FRANCISCO TAUTHO,

SUSANA T. REALES, APITACIO TAUTHO, DANILO TAUTHO,
JUDITHA PROS, GREGORIO TAUTHO, DEODITA T. JUDILLA,
AGRIPINO TAUTHO, FELIX TAUTHO, WILLIAM TAUTHO, AND
MARILYN PERALES, petitioners,
vs.
HONORABLE AUGUSTINE A. VESTlL, ADRIANO TAGALOG,
MARCELO TAUTHO, JUANITA MENDOZA, DOMINGO BANTILAN,
RAUL BATALUNA AND ARTEMIO CABATINGAN, respondent.

in the complaint is P5,000.00, then, the case falls within the jurisdiction
of the Municipal Circuit Trial Court of Liloan, Compostela, Cebu.
For better appreciation of the facts, the pertinent portions of the
complaint are reproduced hereunder:
xxx xxx xxx
3. That the plaintiffs and the defendants are the
legal heirs of spouses Casimero Tautho and
Cesaria N. Tautho who died long time ago;

KAPUNAN, J.:
Before us is a Petition for Certiorari to set aside the Order dated
January 12, 1995 issued by respondent Judge Augustine A. Vestil of
the Regional Trial Court of Mandaue City, Branch 56, dismissing the
complaint filed by petitioners on ground of lack of jurisdiction, as well
as his Order dated February 13, 1995 denying petitioners' Motion for
Reconsideration of the order of dismissal.
The facts of the case are as follows:
On September 28, 1994, petitioners filed a complaint against private
respondents, denominated "DECLARATION OF NULLITY AND
PARTITION," with the Regional Trial Court of Mandaue City, Branch
56, docketed as Civil Case No. MAN-2275. The complaint, in
substance, alleged that petitioners are co-owners of that parcel of land,
Lot 6149 situated in Liloan, Cebu and containing an area of 56,977.40
square meters, more or less. The land was previously owned by the
spouses Casimero Tautho and Cesaria Tautho. Upon the death of said
spouses, the property was inherited by their legal heirs, herein
petitioners and private respondents. Since then, the lot had remained
undivided until petitioners discovered a public document denominated
"DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF A
PREVIOUS ORAL AGREEMENT OF PARTITION," executed on June
6, 1990. By virtue of this deed, private respondents divided the
property among themselves to the exclusion of petitioners who are
also entitled to the said lot as heirs of the late spouses Casimero
Tautho and Cesaria Tautho. Petitioners claimed that the document was
false and perjurious as the private respondents were not the only heirs
and that no oral partition of the property whatsoever had been made
between the heirs. The complaint prayed that the document be
declared null and void and an order be issued to partition the land
among all the heirs. 1
On November 24, 1994, private respondents filed a Motion to
Dismiss 2 the complaint on the ground of lack of jurisdiction over the
nature of the case as the total assessed value of the subject land is
P5,000.00 which under section 33 (3) 3 of Batas Pambansa Blg. 129,
as amended by R.A. No. 7691, 4 falls within the exclusive jurisdiction of
the Municipal Circuit Trial Curt of Liloan, Compostela. 5
Petitioners filed an Opposition to the Motion to Dismiss 6 saying that
the Regional Trial Court has jurisdiction over the case since the action
is one which is incapable of pecuniary estimation within the
contemplation of Section 19(1) of B.P. 129, as amended. 7
On January 12, 1995, the respondent judge issued an Order granting
the Motion to Dismiss. 8 A Motion for Reconsideration of said order was
filed by petitioners on January 30, 1995 alleging that the same is
contrary to law because their action is not one for recovery of title to or
possession of the land but an action to annul a document or declare it
null and void, 9 hence, one incapable of pecuniary estimation falling
within the jurisdiction of the Regional Trial Court. Private respondents
did not oppose the motion for reconsideration.
On February 13, 1995, the respondent judge issued another Order
denying the motion for reconsideration. 10
Hence, this petition wherein the sole issue raised is whether or not the
Regional Trial Court has jurisdiction to entertain Civil Case No. MAN2275.
We find merit in the petition.
Petitioners maintain the view that the complaint filed before the
Regional Trial Court is for the annulment of a document denominated
as "DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF
PREVIOUS ORAL PARTITION," which is clearly one incapable of
pecuniary estimation, thus, cognizable by the Regional Trial Court.
Private respondents, on the other hand, insists that the action is one
for re-partition and since the assessed value of the property as stated

4. That in life the spouses became the owners in

fee simple of a certain parcel of land, which is
more particularly described as follows:
A parcel of land containing
56,97740 square meters,
more or less, located at
Cotcot, Liloan, Cebu.
designated as Lot 6149 per Technical Description
and Certification issued by the Office of the Land
Management copy of which are hereto attached as
Annexes "A" and "A-1" and are made part hereof:
total assessed value is P5,000.00;
5. That the passed to the children of the spouses
(who are all deceased except for defendant
Marcelo Tautho), namely: Zacarias, Epifania,
Vicenta, Felecisimo, Maria, Lorencia and Marcelo,
and which in turn passed to the plaintiffs and
defendants upon their death they being their
descendants and legal heirs;
6. That the subject parcel of land has for year
been undivided by and among the legal heirs of
said previous owners;
7. That, very recently, plaintiffs discovered a public
document, which is a declaration of heirs and
deed of confirmation of a previous oral agreement
of partition, affecting the land executed by and
among the defendants whereby defendants
divided the property among themselves to the
exclusion of plaintiffs who are entitled thereto;
attached hereto as Annex "B" and is made part
hereof is xerox copy of said document;
8. That the instrument (Annex "B") is false and
perjurious and is a complete nullity because the
defendants are not the only heirs of Casimero
Tautho; plaintiffs are also heirs and descendants
of said deceased; moreover, there has been no
oral partition of the property;
9. That pursuant to said document (Annex "B"),
defendants had procured tax declarations of the
land for their supposed "shares" to the great
damage and prejudice of plaintiffs;
10. That the property in controversy should be
divided into seven (7) equal parts since Casimero
Tautho and Cesaria N. Tautho had seven children;
11. That the parties had failed to settle the
controversy amicably at the barangay level;
attached hereto as Annex "C" is Certification to file
Action;
12. That by reason of the foregoing unjust and
illegal act of defendants, plaintiffs were forced to
bring instant action and contract the services of
the undersigned counsel with whom they bind
themselves to pay P30,000.00 as attorney's fees.
WHEREFORE, it is most respectfully prayed of
this Honorable Court to declare null and void the
document (Annex "B") of declaration of heirs and
confirmation and to order the partition of the land
into seven (7) equal parts; each part shall
respectively go to the seven (7) children of
Casimero Tautho and considering six (6) of them

died already the same shall go to their children or

descendants, and to order the defendants to pay
plaintiffs attorney's fees in the amount of
P30,000.00.
Plaintiffs further pray for such other reliefs and
remedies just and equitable under the premises. 11
We agree with petitioners.
The complaint filed before the Regional Trial Court
is doubtless one incapable of pecuniary estimation
and therefore within the jurisdiction of said court.
In Singsong vs. Isabela Sawmill, 12 we had the occasion to rule that:
[I]n determining whether an action is one the
subject matter of which is not capable of pecuniary
estimation this Court has adopted the criterion of
first ascertaining the nature of the principal action
or remedy sought. If it is primarily for the recovery
of a sum of money, the claim is considered
capable of pecuniary estimation, and whether
jurisdiction is in the municipal courts or in instance
would depend on the amount of the claim.
However, where the basic issue is something
other than the right to recover a sum of money,
where the money claim is purely incidental to, or a
consequence of, the principal relief sought, this
Court has considered such where the subject of
the litigation may not be estimated in terms of
money, and are cognizable exclusively by courts of
first instance (now Regional Trial Courts). 13
Examples of actions incapable of pecuniary estimation are those for
specific performance, support, or foreclosure of mortgage or
annulment of judgment; 14 also actions questioning the validity of a
mortgage, 15 annulling a deed of sale or conveyance and to recover the
price paid 16 and for rescession, which is a counterpart of specific
performance. 17
While actions under Sec. 33(3) of B.P. 129 are also incapable of
pecuniary estimation, the law specifically mandates that they are
cognizable by the MTC, METC, or MCTC where the assessed value of
the real property involved does exceed P20,000.00 in Metro Manila, or
P50,000.00, if located elsewhere. If the value exceeds P20,000.00 or
P50,000.00 as the case may be, it is the Regional Trial Courts which
have jurisdiction under Sec. 19(2). 18 However, the subject matter of
the complaint in this case is annulment of a document denominated as
"DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF
PREVIOUS ORAL PARTITION."
The main purpose of petitioners in filing the complaint is to declare null
and void the document in which private respondents declared
themselves as the only heirs of the late spouses Casimero Tautho and
Cesaria Tautho and divided his property among themselves to the
exclusion of petitioners who also claim to be legal heirs and entitled to
the property. While the complaint also prays for the partition of the
property, this is just incidental to the main action, which is the
declaration of nullity of the document above-described. It is axiomatic
that jurisdiction over the subject matter of a case is conferred by law
and is determined by the allegations in the complaint and the character
of the relief sought, irrespective of whether the plaintiff is entitled to all
or some of the claims asserted therein. 19
WHEREFORE, premises considered, the petition is hereby
GRANTED. The Order dismissing Civil Case No. MAN-2275, as well
as the Order denying the motion for reconsideration of said Order, is
SET ASIDE.
The Regional Trial Court, Branch 56, Mandaue City is ORDERED to
proceed with dispatch in resolving Civil Case No. MAN-2275. No costs.
SO ORDERED.

G.R. No. 80040 September 30, 1988

ISMAEL AMORGANDA and TRINIDAD G.
AMORGANDA, petitioners,
vs.
HONORABLE COURT OF APPEALS, ESTANISLAO SAYCON and
CLARA SAYCON, respondents.

Marcelo G. Flores for petitioner.

Leo B. Diocos for respondents.

PADILLA, J.:
Review on certiorari of the decision * rendered by the respondent
appellate court on 17 July 1987, in CA-G.R. SP No. 09614, entitled:
"Estanislao Saycon, et al., petitioners, versus Hon. Eleuterio E. Chiu,
etc. et al., respondents," which set aside, for being null and void, the
order issued by Judge Eleuterio E. Chill on 23 April 1986 in Civil Case
No. 8794 of the Regional Trial Court of Negros Oriental, restraining the
defendants therein, now private respondents, from cultivating, taking
possession of, gathering the fishes and shrimps or other products
thereon, or committing acts of interference or disturbance in the
plaintiffs' possession of the fishpond in question, and directed the
dismissal of said Civil Case No. 8794.
The facts of the case, in brief, are as follows:
On 30 July 1977, herein private respondents, spouses Estanislao and
Clara Saycon, leased to herein petitioners, spouses Ismael and
Trinidad Amorganda, a fishpond located at Cabalulan Manipis, Tanjay
Negros Oriental, which "land is a part or portion of PLA No. 2086
containing an area of SEVEN (7) hectares, more or less, 'in the name
of Pedro Saycon, lessors' deceased father,' " for a period of ten (10)
years from said date. Rentals in the amount of P3,000,00 a year for the
entire lease period were duly paid to and received by the lessors. On
30 January 1981, the lease period was extended for two (2) years, to
expire on 30 July 1989. Again, rentals for the extended period were
paid to and received by the lessors. Then, on 20 December 1982, the
lessors, in consideration of another advance rental on the fishpond,
again agreed to extend the lease period for another eight (8) years
from 30 July 1989 and terminating on 31, July 1997. 1
On 5 January 1986, however, the lessors, herein private respondents
Estanislao and Clara Saycon, harvested bangus and shrimps from the
fishpond without the knowledge and consent of the lessees, herein
petitioners Ismael and Trinidad Amorganda. Consequently, the
petitioners filed a criminal complaint for qualified theft against the
private respondents before the Provincial Fiscal of Negros Oriental.
The complaint was docketed as I.S. Case No. 86-F and is still pending
preliminary investigation therein. 2
Then, on 27 February 1986, the private respondents, allegedly with the
aid of armed men, forcibly entered the leased fishpond and prevented
the petitioners and their workers from entering the premises. As a
result, the petitioners filed a complaint against the private respondents
before the Regional Trial Court of Negros Oriental, docketed therein as
Civil Case No. 8794, to compel the private respondents to return the
leased premises to them and for damages in the amounts of. (1)
P25,000. 00 every three (3) months or P100,000.00 a year, until
possession of the fishpond is restored to the lessees; (b) P20,000.00,
as moral damages and P10,000.00, as exemplary damages; (c)
P10,000.00, as attorney's fees and P500.00 per appearance in court of
counsel; and (d) such other actual expenses and damages as may be
proved during the trial. The petitioners further prayed that a writ of
preliminary injunction be immediately issued restraining the private
respondents, their agents or persons acting in their behalf, from
cultivating, taking possession of, or committing acts which would
disturb or interfere with petitioners' possession of said fishpond. 3
Finding the application for the issuance of a writ of preliminary
injunction to be sufficient in form and substance, the trial court issued a
temporary restraining order on 4 March 1986, directing the private
respondents, defendants therein, to refrain from cultivating, taking
possession of, gathering fishes, shrimps and other products from the
land in question until further orders, and set the application for
preliminary injunction for hearing on 13 March 1986. 4
On 26 March 1986, the private respondents filed their Answer to the
complaint, alleging that the private respondent Estanislao Saycon is
not the true owner of the property which he had leased to the
petitioners, but the government of the Philippines, because it reverted
to the government after the license of Pedro Saycon, late father of
private respondents Estanislao Saycon, was cancelled and all
improvements existing in the area forfeited in favor of the government;
that the petitioners have no right whatsoever to the fishpond because
their earlier rights were lost upon the cancellation of the license of said
Pedro Saycon and the area declared open for disposition to any
interested party and qualified applicant; that the trial court has no
jurisdiction to take cognizance of disputes relative to possessory rights
over the fishpond in question, which belongs to the Bureau of Fisheries

and Aquatic Resources (BFAR); that the herein petitioners failed to

exhaust all administrative remedies before resort was made to the
courts; and that the petitioners have no cause of action since the
fishpond in question had been forfeited in favor of the government and
petitioners are not applicants for permit to operate or lease the same
from the government. 5
On 23 April 1986, the trial court granted the application for issuance of
a writ of preliminary injunction "restraining, enjoining, and prohibiting
the defendants, their agents, servants, and/or any person acting in
their behalves from cultivating, taking possession of, gathering the
fishes and shrimps or other products thereon, or committing acts of
interference or disturbance in the plaintiffs' possession" of the fishpond
in question upon the filing of an injunction bond in the amount of
P50,000.00. 6 The private respondents filed a motion for
reconsideration of the order, but their motion was denied on 11 June
1986. 7
Consequently, the private respondents filed a petition with the
Intermediate Appellate Court (now Court of Appeals) to annul and set
aside the order of 23 April 1986 on the grounds that: (1) the trial court
has no jurisdiction over the case since the complaint filed is in the
nature of recovery of possession and should have been filed in the
Municipal Court of Tanjay Negros Oriental, where the land is situated,
in accordance with Rule 70 of the Rules of Court; (2) there is no cause
of action because "(w)hen the BFAR issued an Order confiscating the
fishpond in favor of the Government and declaring the contract of lease
between Saycon and the Amorgandas to be null and void, the rights of
the Amorgandas for (to) possession over the fishpond was (were) not
anymore existing; they might have some rights for sum of money from
the Saycons. The respondents have no right whatsoever to step in the
shoes of the government; and (3) non-exhaustion of administrative
remedies in that the action should have been filed with the BFAR
before resort was made to the courts. 8
The herein petitioners in due course filed their comment with the Court
of Appeals 9 and on 17 July 1987, the respondent appellate court
issued the decision in question, declaring null and void the order of the
regional trial court of 23 April 1986, for the reason that the complaint is
one for recovery of possession over which the regional trial court has
no jurisdiction, and directing the trial court to dismiss Civil Case No.
8794 of the Regional Trial Court of Negros Oriental. 10
On 10, August 1987, the petitioners filed, by registered mail, a motion
for reconsideration of the decision, 11 but the respondent appellate
court denied the motion for having been filed beyond the reglementary
period. 12 Hence, the present recourse. The Court gave due course to
the petition. 13
The petitioners raise two (2) issues, to wit:
(1) whether or not the petitioners' motion for
reconsideration of the decision of the respondent
appellate court had been filed out of time and the
said decision, is already final and executory; and
(2) whether or not the Regional Trial Court of
Negros Oriental has jurisdiction over the case.
On the procedural issue, it appears that counsel for the herein
petitioners received a copy of the decision of the Court of Appeals on
24 July 1987. Pursuant to the rules, 14 he had fifteen (15) days from
said date, or up to 8 August 1987, within which to appeal therefrom or
file a motion for its reconsideration. Counsel for the petitioners,
however, filed the motion for reconsideration only on 10 August 1987,
or two (2) days after the expiration of the reglementary period. Counsel
for the petitioners, in explaining the delay, claimed that the last day for
filing the motion for reconsideration, 8 August 1987, fell on a holiday, a
Saturday, so that he filed the motion for reconsideration on Monday, 10
August 1987, the day following a holiday and Sunday.
Saturday, 8 August 1987, however, was not an official holiday so that
the petitioners' motion for reconsideration was filed beyond the
reglementary period. But a strong compelling reason, i.e., the
prevention of a grave miscarriage of justice exists in this case that
would warrant a suspension of the Rules and excuse the delay of two
(2) calendar days in the filing of said motion for reconsideration.
The private respondents have admitted to have unilaterally terminated
the lease contract executed between them and the petitioners, and
prevented the latter from entering the fishpond, subject matter of the
lease contract, despite the fact that the lease between them is to
expire only on 31 July 1997, and that rentals have been paid to private
respondents by the petitioners up to said date. Their (private
respondents) excuse is that they have lost their right over the land

since said land, which had been previously leased to their late father,
Pedro Saycon, had been forfeited in favor of the government.
Indeed, the private respondents have lost whatever right they may
have had over the fishpond in question after said land had been
forfeited in favor of the government. In his Order, dated 11 April 1985,
the Director of the Bureau of Fisheries and Aquatic Resources (BFAR)
categorically stated that the heirs of Pedro Saycon, among them the
private respondent Estanislao Saycon, "have no more leg to stand on,
much less anymore personality to assert any right over the area under
OFP No. F-234-B. 15 That being the case, what right had the private
respondents to enter the fishpond and exclude the petitioners there
from? The fact that the Director of the BFAR, in his Order of 11 April
1985, had ordered that any occupant thereon should vacate the
premises did not give the private respondents license to renege on
their obligation under the contract 6f lease and eject the petitioners
from the land. As correctly stated by the trial court in its order dated 23
April 1986, "(t)he Order of the BFAR (Exhibit "L") relied upon by the
defendant (private respondent herein) is of no moment, for the
government is not a party in this case. The said Order would become
material and relevant only when the government takes legal action
against any possessor of the fishpond in question. 16
Besides, the private respondents who appear to be guilty of coercion,
stand to unjustly profit from their fraudulent and deceitful act at the
expense of the petitioners who may not be able to recover the rentals
advanced by them to the private respondents.
One other reason for suspending the Rules and allowing the
petitioners to appeal is that there is no indication that, in filing the
motion for reconsideration on Monday, 10 August 1987, instead of
Saturday, 8 August 1987, counsel for the petitioners was motivated by
a desire to delay the proceedings or obstruct the administration of
justice. His mistaken belief that Saturday is a legal holiday appears to
be pardonable since the courts of justice do not hold office on
Saturdays. Anyway, the delay of two (2) calendar daysone of which
was a Sundayin the filing of the motion for reconsideration did not
prejudice the cause of the private respondents, or that said private
respondents suffered material injury by reason of the delay.
In Lagunzad vs. Court of Appeals, 17 the Court said, and we quote.
We cannot just more petitioner's plea for a review
of his case in this instance. There is not the
slightest indication of malice on his part or of a
desire to delay the proceedings and to transgress
the rules on procedure. If at all, his was an honest
mistake or miscalculation worsened by some
fortuitous occurrence which we deem condonable
under the circumstances. For we have, in many
cases granted relief where a stringent application
of the requirement of timeliness of pleadings
would have denied a litigant substantial justice and
equity. Suffice it to note that the rules on
technicality were promulgated to secure not to
override substantial justice. As it should be in this
case especially because the petition appears also
to be impressed with merit.
The other issue raised by the petitioners is: whether or not the
Regional Trial Court of Negros Oriental has jurisdiction over the case.
The respondent appellate court, in its decision under review, found that
the regional trial court has no jurisdiction over the case since the object
of the complaint was to recover possession of the land which the
herein private respondents had secured by means of force, threats and
intimidation. Said the appellate court:
... It is quite obvious from the foregoing that the
object of the complaint is to recover possession of
the property in question which private respondents
acquired as lessees thereof, but of which they
were deprived by petitioners by means of "force,
threats and intimidation." The complaint thus
alleges the facts which confer exclusive
jurisdiction in the Municipal Trial Court to try the
case. (Sec. 33(2), BP 129). The Honorable
respondent Court being devoid of jurisdiction over
the main case, it was, likewise, without jurisdiction
to issue the writ of preliminary injunction dated 23
April 1986. 18
We do not agree. While the herein petitioners' complaint in the trial
court alleges that they were dispossessed of the leased fishpond by
the lessors, herein private respondents, by means of force, stealth and

intimidation, so that the complaint would appear, at first blush, to be

one for forcible entry and damages, the action is, in reality, one for
specific performance, i.e., to compel the private respondents, as
lessors, to comply with their obligations under the lease contract and
return the possession of the leased premises to them, and for
damages due to their (private respondents') unjust occupation of the
land. Such action is one not capable of pecuniary estimation and
comes within the exclusive original jurisdiction of regional trial courts.
Thus, Article 1654 of the Civil Code provides:

WHEREFORE, the judgment appealed from is hereby REVERSED

and SET ASIDE and another one entered affirming the order issued by
the trial court on 23 April 1986 in Civil Case No. 8794 of the Regional
Trial Court of Negros Oriental. With costs against the private
respondents.
SO ORDERED.

Art. 1654. The lessor is obliged:

G.R. No. 138896

(a) To deliver the thing which is the object of the

contract in such a condition as to render it fit for
the use intended;

BARANGAY SAN ROQUE, TALISAY, CEBU, petitioner,

vs.
Heirs of FRANCISCO PASTOR namely: EUGENIO SYLIANCO,
TEODORO SYLIANCO, TEODORO SYLIANCO, ISABEL SYLIANCO,
EUGENIA S. ONG, LAWRENCE SYLIANCO, LAWSON SYLIANCO,
LAWINA S. NOTARIO, LEONARDO SYLIANCO JR. and LAWFORD
SYLIANCO, respondents.

(2) To make on the same during the lease all the

necessary repairs in order to keep it suitable for
the use it has been devoted, unless there is a
stipulation to the contrary;

June 20, 2000

PANGANIBAN, J.:
(3) To maintain the lessee in the peaceful and
adequate enjoyment of the lease for the entire
duration of the contract.
In De Rivera vs. Halili, 19 the Court said that the action to compel the
lessor to comply with his obligation "to maintain the lessee in the
peaceful and adequate enjoyment of the lease for the entire duration of
the contract" is within the exclusive original jurisdiction of the court of
first instance, now the regional trial court.
In Lapitan vs. Scandia Inc., 20 the Court, speaking through the eminent
Mr. Justice Jose B.L. Reyes, also said:
A review of the jurisprudence of this Court
indicates that in determining whether an action is
one not capable of peculliary estimation, this Court
has adopted the criterion of first ascertaining the
nature of the principal action or remedy sought. If
it is primarily for the recovery of a sum of money,
the claim is considered capable of pecuniary
estimation, and whether jurisdiction is in the
municipal courts or in the courts of first instance
would depend on the amount of the claim.
However, where the basic issue is something
other than the right to recover a sum of money, or
where the money claim is purely incidental to, or a
consequence of, the principal relief sought like in
the suits to have the defendant perform his paint
of the contract (specific performance) and in
actions for support, or for annulment of a judgment
or to foreclose a mortgage, this Court has
considered such actions as cases where the
subject of the litigation may not be estimated in
terms of money, and are cognizable exclusively by
courts of first instance. ...
Since the present action is to compel the private respondents to
perform their part of the contract of lease "to maintain the lessee in the
peaceful and adequate enjoyment of the lease for the entire duration of
the contract," the action is within the exclusive original jurisdiction of
the regional trial court. 21
The respondent Court of Appeals, therefore, erroneously classified the
present action as one for forcible entry and damages which is
cognizable exclusively by the municipal trial court. Accordingly, the
decision appealed from should be reversed and set aside.
We also find no merit in the claim of the private respondents that the
Bureau of Fisheries and Aquatic Resources (BFAR) has exclusive
jurisdiction over the case. In Pitargue vs. Sorilla 22 the Court ruled:
... The vesting of the Lands Department with
authority to administer, dispose, and alienate
public lands, ... must not be understood as
depriving the other branches of the Government of
the exercise of their respective functions or
powers thereon, such as the authority to stop
disorders and quell breaches of the peace by the
police, and the authority on the part of the courts
to take jurisdiction over possessory actions arising
therefrom not involving, directly or indirectly,
alienation and disposition.

An expropriation suit is incapable of pecuniary estimation. Accordingly,

it falls within the jurisdiction of the regional trial courts, regardless of
the value of the subject property.
The Case
Before us is a Petition for Review on Certiorari assailing the March 29,
1999 Order1 of the Regional Trial Court (RTC) of Cebu City (Branch
58) in Civil Case No. CEB-21978, in which it dismissed a Complaint for
eminent domain. It ruled as follows:
Premises considered, the motion to dismiss is hereby granted on the
ground that this Court has no jurisdiction over the case. Accordingly,
the Orders dated February 19, 1999 and February 26, 1999, as well as
the Writ of Possession issued by virtue of the latter Order are hereby
recalled for being without force and effect.2
Petitioner also challenges the May 14, 1999 Order of the RTC denying
reconsideration.
The Facts
Petitioner filed before the Municipal Trial Court (MTC) of Talisay, Cebu
(Branch 1)3 a Complaint to expropriate a property of the respondents.
In an Order dated April 8, 1997, the MTC dismissed the Complaint on
the ground of lack of jurisdiction. It reasoned that "[e]minent domain is
an exercise of the power to take private property for public use after
payment of just compensation. In an action for eminent domain,
therefore, the principal cause of action is the exercise of such power or
right. The fact that the action also involves real property is merely
incidental. An action for eminent domain is therefore within the
exclusive original jurisdiction of the Regional Trial Court and not with
this Court."4
Assailed RTC Ruling
The RTC also dismissed the Complaint when filed before it, holding
that an action for eminent domain affected title to real property; hence,
the value of the property to be expropriated would determine whether
the case should be filed before the MTC or the RTC. Concluding that
the action should have been filed before the MTC since the value of
the subject property was less than P20,000, the RTC ratiocinated in
this wise:
The instant action is for eminent domain. It appears from the current
Tax Declaration of the land involved that its assessed value is only One
Thousand Seven Hundred Forty Pesos (P1,740.00). Pursuant to
Section 3, paragraph (3), of Republic Act No. 7691, all civil actions
involving title to, or possession of, real property with an assessed value
of less than P20,000.00 are within the exclusive original jurisdiction of
the Municipal Trial Courts. In the case at bar, it is within the exclusive
original jurisdiction of the Municipal Trial Court of Talisay, Cebu, where
the property involved is located.
The instant action for eminent domain or condemnation of real property
is a real action affecting title to or possession of real property, hence, it
is the assessed value of the property involved which determines the
jurisdiction of the court. That the right of eminent domain or
condemnation of real, property is included in a real action affecting title
to or possession of real property, is pronounced by retired Justice Jose
Y. Feria, thus, "Real actions are those affecting title to or possession of

real property. These include partition or condemnation of, or

foreclosures of mortgage on, real property. . . ."5
Aggrieved, petitioner appealed directly to this Court, raising a pure
question of law.6 In a Resolution dated July 28, 1999, the Court denied
the Petition for Review "for being posted out of time on July 2, 1999,
the due date being June 2, 1999, as the motion for extension of time to
file petition was denied in the resolution of July 14, 1999."7 In a
subsequent Resolution dated October 6, 1999, the Court reinstated the
Petition.8
Issue
In its Memorandum, petitioner submits this sole issue for the
consideration of this Court:
Which court, MTC or RTC, has jurisdiction over cases for eminent
domain or expropriation where the assessed value of the subject
property is below Twenty Thousand (P20,000.00) Pesos?9
This Court's Ruling
The Petition is meritorious.
Main Issue:
Jurisdiction over an Expropriation Suit
In support of its appeal, petitioner cites Section 19 (1) of BP 129, which
provides that RTCs shall exercise exclusive original jurisdiction over
"all civil actions in which the subject of the litigation is incapable of
pecuniary estimation; . . . . ." It argues that the present action involves
the exercise of the right to eminent domain, and that such right is
incapable of pecuniary estimation.
Respondents, on the other hand, contend that the Complaint for
Eminent Domain affects the title to or possession of real property.
Thus, they argue that the case should have been brought before the
MTC, pursuant to BP 129 as amended by Section 3 (3) of RA 7691.
This law provides that MTCs shall have exclusive original jurisdiction
over all civil actions that involve title to or possession of real property,
the assessed value of which does not exceed twenty thousand pesos
or, in civil actions in Metro Manila, fifty thousand pesos exclusive of
interest, damages of whatever kind, attorney's fees, litigation expenses
and costs.
We agree with the petitioner that an expropriation suit is incapable of
pecuniary estimation. The test to determine whether it is so was laid
down by the Court in this wise:
A review of the jurisprudence of this Court indicates that in
determining whether an action is one the subject matter of
which is not capable of pecuniary estimation, this Court has
adopted the criterion of first ascertaining the nature of the
principal action or remedy sought. If it is primarily for the
recovery of a sum of money, the claim is considered capable
of pecuniary estimation, and whether jurisdiction is in the
municipal courts or in the courts of first instance would
depend on the amount of the claim. However, where the
basic issue is something other than the right to recover a
sum of money, or where the money claim is purely incidental
to, or a consequence of, the principal relief sought, like in
suits to have the defendant perform his part of the contract
(specific performance) and in actions for support, or for
annulment of a judgment or to foreclose a mortgage, this
Court has considered such actions as cases where the
subject of the litigation may not be estimated in terms of
money, and are cognizable exclusively by courts of first
instance. The rationale of the rule is plainly that the second
class cases, besides the determination of damages, demand
an inquiry into other factors which the law has deemed to be
more within the competence of courts of first instance, which
were the lowest courts of record at the time that the first
organic laws of the Judiciary were enacted allocating
jurisdiction (Act 136 of the Philippine Commission of June
11, 1901). 10
In the present case, an expropriation suit does not involve the recovery
of a sum of money. Rather, it deals with the exercise by the
government of its authority and right to take private property for public
use. 11 In National Power Corporation v. Jocson, 12 the Court ruled that
expropriation proceedings have two phases:

The first is concerned with the determination of the authority

of the plaintiff to exercise the power of eminent domain and
the propriety of its exercise in the context of the facts
involved in the suit. It ends with an order, if not of dismissal
of the action, "of condemnation declaring that the plaintiff
has a lawful right to take the property sought to be
condemned, for the public use or purpose described in the
complaint, upon the payment of just compensation to be
determined as of the date of the filing of the complaint." An
order of dismissal, if this be ordained, would be a final one,
of course, since it finally disposes of the action and leaves
nothing more to be done by the Court on the merits. So, too,
would an order of condemnation be a final one, for thereafter
as the Rules expressly state, in the proceedings before the
Trial Court, "no objection to the exercise of the right of
condemnation (or the propriety thereof) shall be filed or
heard."
The second phase of the eminent domain action is
concerned with the determination by the court of "the just
compensation for the property sought to be taken." This is
done by the Court with the assistance of not more than three
(3) commissioners. The order fixing the just compensation
on the basis of the evidence before, and findings of, the
commissioners would be final, too. It would finally dispose of
the second stage of the suit, and leave nothing more to be
done by the Court regarding the issue. . . .
It should be stressed that the primary consideration in an expropriation
suit is whether the government or any of its instrumentalities has
complied with the requisites for the taking of private property. Hence,
the courts determine the authority of the government entity, the
necessity of the expropriation, and the observance of due process. 1 In
the main, the subject of an expropriation suit is the government's
exercise of eminent domain, a matter that is incapable of pecuniary
estimation.
True, the value of the property to be expropriated is estimated in
monetary terms, for the court is duty-bound to determine the just
compensation for it.1avvphi1 This, however, is merely incidental to the
expropriation suit. Indeed, that amount is determined only after the
court is satisfied with the propriety of the expropriation.
Verily, the Court held in Republic of the Philippines v. Zurbano that
"condemnation proceedings are within the jurisdiction of Courts of First
Instance," 14 the forerunners of the regional trial courts. The said case
was decided during the effectivity of the Judiciary Act of 1948 which,
like BP 129 in respect to RTCs, provided that courts of first instance
had original jurisdiction over "all civil actions in which the subject of the
litigation is not capable of pecuniary estimation." 15 The 1997
amendments to the Rules of Court were not intended to change these
jurisprudential precedents.
We are not persuaded by respondents' argument that the present
action involves the title to or possession of a parcel of land. They cite
the observation of retired Justice Jose Y. Feria, an eminent authority in
remedial law, that condemnation or expropriation proceedings are
examples of real actions that affect the title to or possession of a parcel
of land. 16
Their reliance is misplaced. Justice Feria sought merely to distinguish
between real and personal actions. His discussion on this point
pertained to the nature of actions, not to the jurisdiction of courts. In
fact, in his pre-bar lectures, he emphasizes that jurisdiction over
eminent domain cases is still within the RTCs under the 1997 Rules.
To emphasize, the question in the present suit is whether the
government may expropriate private property under the given set of
circumstances. The government does not dispute respondents' title to
or possession of the same. Indeed, it is not a question of who has a
better title or right, for the government does not even claim that it has a
title to the property. It merely asserts its inherent sovereign power to
"appropriate and control individual property for the public benefit, as
the public necessity, convenience or welfare may demand." 17
WHEREFORE, the Petition is hereby GRANTED and the assailed
Orders SET ASIDE. The Regional Trial Court is directed to HEAR the
case. No costs.
SO ORDERED.

G.R. No. L-3448

November 27, 1950

MANUEL CRUZ, petitioner,

vs.
BIENVENIDO A. TAN, Judge of the Court of First Instance of Rizal,
Rizal City Branch, and TELESFORA YAMBAO, respondents.

SEC. 44. Original jurisdiction. Courts of First Instance

shall have original jurisdiction:

Eliseo Caunca for petitioner.

Miguel R. Cornejo for respondents.

(c) In all cases in which the demand, exclusive of interest, or

the value of the property in controversy, amounts to more
than two thousand pesos; (Emphasis supplied.)

xxx

xxx

xxx

JUGO, J.:
This is a petition for a writ of certiorari and prohibition with injunction.
On August 3, 1949, the respondent Telesfora Yambao (plaintiff in civil
case No. 898, Court of First Instance of Rizal Rizal City Branch)
filed a complaint against the petitioner Manuel Cruz (defendant in said
case), in which she prayed that the petitioner herein be ordered to
finish the construction of a house mentioned in the complaint, or to pay
her the sum of P644.31. Within ten days from receipt of the summons,
the petitioner filed a motion for a bill of particulars, which was denied
by the court in an order dated September 3, 1949, received by the
petitioner on September 15, 1949.
On September 19, 1949, the petitioner filed a motion to dismiss the
case on the ground that the Court of First Instance of Rizal has no
jurisdiction over the subject-matter of the suit inasmuch as the demand
contained in the prayer is only for P644.31, which falls under the
jurisdiction of the Justice of the Peace or the Judge of the municipal
Court.
The motion to dismiss was denied by the court in an order dated
October 3, 1949, which order also set the case for trial on the merits on
October 10, 1949, although the petitioner had not yet filed his answer
nor had he been declared in default.
Said order setting the case for trial on October 10, 1949 was received
by the petitioner's counsel on October 12, 1949, that is, two days
afterward.
On October 10, 1949, the court dismissed the case for lack of interest
of the parties, as they did not appear at the trial.
On October 12, 1949, the respondent Telesfora Yambao filed a motion
praying that the trial of the case be set for November 14, 1949, without
asking that the order dismissing the case be set aside.
The above-mentioned motion for setting the trial on November 14,
1949 was heard on October 15, 1949, but as the petitioner's counsel
received notice of said motion on the said date, October 15, in the
afternoon, he could not appear at the hearing of said motion in the
morning of October 15.
The court, acting upon said motion of October 12 set the case for trial
on November 17, 1949.
The petitioner filed a so-called "Manifestation," dated November 17,
1949, stating that inasmuch as the order of dismissal had not been set
aside, said order had become final.
On November 10, 1949, the petitioner filed the present petition with
this court.
The respondent court after having been informed by the petitioner that
he had filed a petition for a writ ofcertiorari and prohibition with
injunction with the Supreme Court, issued an order postponing the trial
of the case to November 29, 1949, and setting aside the order of
dismissal dated October 10, 1949.
It is not necessary to pass on all the questions raised by both parties in
their pleadings and memoranda in this court, except the question as to
jurisdiction, for that is decisive of this case.
It will be noted that the demand of the complaint filed in the Court of
First Instance of Rizal is for the sum of P644.31. The alternative
remedy of specific performance, which consists in finishing the house,
is capable of pecuniary estimation at the same amount, more or less,
for, otherwise, the respondent Telesfora Yambao would not have made
such alternative demand.
In the Judiciary Act of 1948 (Republic Act No. 296), we find the
following pertinent provisions:

Sec. 86. Jurisdiction of justices of the peace and judges of

municipal courts of chartered cities. The jurisdiction of
justices of the peace and judges of municipal courts of
chartered cities shall consist of:
xxx

xxx

xxx

(b) Original jurisdiction in civil actions arising in their

respective municipalities, and not exclusively cognizable by
the Courts of First Instance.
SEC. 88. Original jurisdiction in civil cases. In all civil
actions, including those mentioned in rules 59 and 62 of the
Rules of Court, arising in his municipality or city, and not
exclusively cognizable by the Court of First Instance, the
justice of the peace and the judge of a municipal court shall
have exclusive original jurisdiction where the value of the
subject-matter or amount of the demand does not exceed
two thousand pesos, exclusive of interest and costs. . . .
(Emphasis supplied.)
It is clear from the above provisions that the case in question comes
within the exclusive original jurisdiction of the municipal court or justice
of the peace court.
The respondent argues that the value of the house, the construction of
which has almost been completed, requiring only the expenditure of
P644.31 to complete it, according to the allegations of the complaint, is
more than P2,873.37, and that consequently the value of the property
involved is beyond the jurisdiction of the municipal court. The
jurisdiction of the respective courts is determined by the value of
the demand and not the value of the transaction out of which the
demand arose; that is what the law says in unmistakable terms. The
alternative prayer for specific performance is also of the same value,
for, as said above, the alternative prayers would not have been made
in the complaint if one was more valuable than the other; hence, the
specific performance alternatively prayed for, is capable of pecuniary
estimation at P644.31 (sec. 88, par. 2, Rep. Act No. 296).
In view of the foregoing, it is declared that the respondent Judge of the
Court of First Instance of Rizal is without jurisdiction to try the case
referred to, and he is ordered to stop further proceedings by dismissing
the case. With costs against the respondent Telesfora Yambao.

G.R. No. L-24668

July 31, 1968

ANDRES LAPITAN, plaintiff-appellant,

vs.
SCANDIA, INC., and GENERAL ENGINEERING CO., defendantsappellees.
Florido and Florido for plaintiff-appellant.
Ponce Enrile, Siguion Reyna, Montecillo and Belo and Jesus P. Garcia
for defendant-appellee Scandia, Inc.
Jose R. Limchin for defendant-appellee General Engineering Co.
REYES, J.B.L., J.:
Andres Lapitan has appealed directly to this Court against an order of
the Court of First Instance of Cebu, dismissing, for lack of jurisdiction,
his complaint for rescission and damages against appellees Scandia,
Inc., of Manila and General Engineering Co. of Cebu.
Lapitan's complaint in the court below averred that on April 17, 1963 he
purchased from Scandia, Inc., through its sub-dealer in Cebu City,
General Engineering Co., one ABC Diesel Engine, of 16 horse power,
for P3,735.00, paid in cash; that he bought the engine for running a
rice and corn mill at Ormoc City, Leyte; that defendants had warranted
and assured him that all spare parts for said engine are kept in stock in
their stores, enabling him to avoid loss due to long periods of waiting,
and that defendants would replace any part of the engine that might
break within twelve months after delivery. Plaintiff further charged that

on June 28, 1963, the cam rocker arm of the engine broke due to faulty
material and workmanship and it stopped functioning; that the sellers
were unable to send a replacement until August 29, 1963; that barely
six days after replacement the new part broke again due to faulty
casting and poor material, so he (Lapitan) notified the sellers and
demanded rescission of the contract of sale; that he sought return of
the price and damages but defendants did not pay. He, therefore,
prayed (1) for rescission of the contract; (2) reimbursement of the
price; (3) recovery of P4,000.00 actual damages plus P1,000.00
attorney's fees; (4) recovery of such moral and exemplary damages as
the court deems just and equitable; and (5) costs and other proper
relief.
After filing answers disclaiming liability, Scandia, Inc., moved to dismiss
the complaint on the ground that the total amount claimed was only
P8,735.00, and was within the exclusive jurisdiction of the municipal
court, under Republic Act 3828, amending the Judiciary Act by
increasing the jurisdiction of municipal courts to civil cases involving
P10,000.00 or less.
After argument, the Court of First Instance of Cebu dismissed the
action for lack of jurisdiction, invoking Cruz vs. Judge B. Tan, 48 O.G.
1320, 87 Phil. 527.
Unable to obtain reconsideration, Lapitan appealed directly to this
Court, arguing (1) that rescission was incapable of pecuniary
estimation, and (2) that as he claimed moral and exemplary damages,
besides the price of P3,735.00, P4,000.00 actual damages, and
P1,000.00 attorneys' fees, the value of his demand exceeded the
jurisdiction of the municipal court.
A review of the jurisprudence of this Court indicates that in determining
whether an action is one the subject matter of which is not capable of
pecuniary estimation, this Court has adopted the criterion of first
ascertaining the nature of the principal action or remedy sought. If it is
primarily for the recovery of a sum of money, the claim is considered
capable of pecuniary estimation, and whether jurisdiction is in the
municipal courts or in the courts of first instance would depend on the
amount of the claim. However, where the basic issue is something
other than the right to recover a sum of money, or where the money
claim is purely incidental to, or a consequence of, the principal relief
sought, like in suits to have the defendant perform his part of the
contract (specific performance) and in actions for support, or for
annulment of a judgment or to foreclose a mortgage, 1 this Court has
considered such actions as cases where the subject of the litigation
may not be estimated in terms of money, and are cognizable
exclusively by courts of first instance. The rationale of the rule is plainly
that the second class cases, besides the determination of damages,
demand an inquiry into other factors which the law has deemed to be
more within the competence of courts of first instance, which were the
lowest courts of record at the time that the first organic laws of the
Judiciary were enacted allocating jurisdiction (Act 136 of the Philippine
Commission of June 11, 1901).
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; Manufacturers'
Distributors, Inc. vs. Yu Siu Liong, L-21285, April 29, 1966. And no
cogent reason appears, and none is here advanced by the parties, why
an action for rescission (or resolution) should be differently treated, a
rescission being a counterpart, so to speak, of "specific performance".
In both cases, the court would certainly have to undertake an
investigation into facts that would justify one act or the other. No award
for damages may be had in an action for rescission without first
conducting an inquiry into matters which would justify the setting aside
of a contract, in the same manner that courts of first instance would
have to make findings of fact and law in actions not capable of
pecuniary 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 the
determination of the validity of the money deposit made); De Ursua v.
Pelayo, L-13285, April 18, 1950 (validity of a judgment); Bunayog v.
Tunas, L-12707, December 23, 1959 (validity of a mortgage); Baito v.
Sarmiento, L-13105, August 25, 1960 (the relations of the parties, the
right to support created by the relation, etc., in actions for support); De
Rivera, et al. v. Halili, L-15159, September 30, 1963 (the validity or
nullity of documents upon which claims are predicated). Issues of the
same nature may be raised by a party against whom an action for
rescission has been brought, or by the plaintiff himself. It is, therefore,
difficult to see why a prayer for damages in an action for rescission
should be taken as the basis for concluding such action 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. 2

Of course, where the money claim is prayed for as an alternative relief

to specific performance, an equivalence is implied that permits the
jurisdiction to be allocated by the amount of the money claim (Cruz vs.
Tan, 87 Phil. 627). But no such equivalence can be deduced in the
case at bar, where the money award can be considered only if the
rescission is first granted.
We, therefore, rule that the subject matter of actions for rescission of
contracts are not capable of pecuniary estimation, and that the court
below erred in declining to entertain appellant's action for lack of
jurisdiction.
WHEREFORE, the appealed order of dismissal is reversed and set
aside, and the case is ordered remanded to the court of origin for
further proceedings conformable to this opinion. Costs against
appellees.

G.R. No. 176858

September 15, 2010

HEIRS OF JUANITA PADILLA, represented by CLAUDIO

PADILLA, Petitioners,
vs.
DOMINADOR MAGDUA, Respondent.
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review on certiorari1 assailing the
Orders dated 8 September 20062 and 13 February 20073 of the
Regional Trial Court (RTC) of Tacloban City, Branch 34, in Civil Case
No. 2001-10-161.
The Facts
Juanita Padilla (Juanita), the mother of petitioners, owned a piece of
land located in San Roque, Tanauan, Leyte. After Juanitas death on 23
March 1989, petitioners, as legal heirs of Juanita, sought to have the
land partitioned. Petitioners sent word to their eldest brother Ricardo
Bahia (Ricardo) regarding their plans for the partition of the land. In a
letter dated 5 June 1998 written by Ricardo addressed to them,
petitioners were surprised to find out that Ricardo had declared the
land for himself, prejudicing their rights as co-heirs. It was then
discovered that Juanita had allegedly executed a notarized Affidavit of
Transfer of Real Property4 (Affidavit) in favor of Ricardo on 4 June
1966 making him the sole owner of the land. The records do not show
that the land was registered under the Torrens system.
On 26 October 2001, petitioners filed an action with the RTC of
Tacloban City, Branch 34, for recovery of ownership, possession,
partition and damages. Petitioners sought to declare void the sale of
the land by Ricardos daughters, Josephine Bahia and Virginia BahiaAbas, to respondent Dominador Magdua (Dominador). The sale was
made during the lifetime of Ricardo.
Petitioners alleged that Ricardo, through misrepresentation, had the
land transferred in his name without the consent and knowledge of his
co-heirs. Petitioners also stated that prior to 1966, Ricardo had a
house constructed on the land. However, when Ricardo and his wife
Zosima separated, Ricardo left for Inasuyan, Kawayan, Biliran and the
house was leased to third parties.
Petitioners further alleged that the signature of Juanita in the Affidavit
is highly questionable because on 15 May 1978 Juanita executed a
written instrument stating that she would be leaving behind to her
children the land which she had inherited from her parents.
Dominador filed a motion to dismiss on the ground of lack of
jurisdiction since the assessed value of the land was within the
jurisdiction of the Municipal Trial Court of Tanauan, Leyte.
In an Order dated 20 February 2006,5 the RTC dismissed the case for
lack of jurisdiction. The RTC explained that the assessed value of the
land in the amount of P590.00 was less than the amount cognizable by
the RTC to acquire jurisdiction over the case.6
Petitioners filed a motion for reconsideration. Petitioners argued that
the action was not merely for recovery of ownership and possession,
partition and damages but also for annulment of deed of sale. Since

actions to annul contracts are actions beyond pecuniary estimation, the

case was well within the jurisdiction of the RTC.
Dominador filed another motion to dismiss on the ground of
prescription.
In an Order dated 8 September 2006, the RTC reconsidered its
previous stand and took cognizance of the case. Nonetheless, the
RTC denied the motion for reconsideration and dismissed the case on
the ground of prescription pursuant to Section 1, Rule 9 of the Rules of
Court. The RTC ruled that the case was filed only in 2001 or more than
30 years since the Affidavit was executed in 1966. The RTC explained
that while the right of an heir to his inheritance is imprescriptible, yet
when one of the co-heirs appropriates the property as his own to the
exclusion of all other heirs, then prescription can set in. The RTC
added that since prescription had set in to question the transfer of the
land under the Affidavit, it would seem logical that no action could also
be taken against the deed of sale executed by Ricardos daughters in
favor of Dominador. The dispositive portion of the order states:
WHEREFORE, premises considered, the order of the Court is
reconsidered in so far as the pronouncement of the Court that it has no
jurisdiction over the nature of the action. The dismissal of the action,
however, is maintained not by reason of lack of jurisdiction but by
reason of prescription.
SO ORDERED.7
Petitioners filed another motion for reconsideration which the RTC
denied in an Order dated 13 February 2007 since petitioners raised no
new issue.
Hence, this petition.
The Issue
The main issue is whether the present action is already barred by
prescription.
The Courts Ruling
Petitioners submit that the RTC erred in dismissing the complaint on
the ground of prescription. Petitioners insist that the Affidavit executed
in 1966 does not conform with the requirement of sufficient repudiation
of co-ownership by Ricardo against his co-heirs in accordance with
Article 494 of the Civil Code. Petitioners assert that the Affidavit
became part of public records only because it was kept by the
Provincial Assessors office for real property tax declaration purposes.
However, such cannot be contemplated by law as a record or
registration affecting real properties. Petitioners insist that the Affidavit
is not an act of appropriation sufficient to be deemed as constructive
notice to an adverse claim of ownership absent a clear showing that
petitioners, as co-heirs, were notified or had knowledge of the Affidavit
issued by their mother in Ricardos favor.
Respondent Dominador, on the other hand, maintains that Juanita,
during her lifetime, never renounced her signature on the Affidavit or
interposed objections to Ricardos possession of the land, which was
open, absolute and in the concept of an owner. Dominador contends
that the alleged written instrument dated 15 May 1978 executed by
Juanita years before she died was only made known lately and
conveys the possibility of being fabricated. Dominador adds that the
alleged highly questionable signature of Juanita on the Affidavit was
only made an issue after 35 years from the date of the transfer in 1966
until the filing of the case in 2001. As a buyer in good faith, Dominador
invokes the defense of acquisitive prescription against petitioners.
At the outset, only questions of law may be raised in a petition for
review on certiorari under Rule 45 of the Rules of Court. The factual
findings of the lower courts are final and conclusive and may not be
reviewed on appeal except under any of the following circumstances:
(1) the conclusion is grounded on speculations, surmises or
conjectures; (2) the inference is manifestly mistaken, absurd or
impossible; (3) there is grave abuse of discretion; (4) the judgment is
based on a misapprehension of facts; (5) the findings of fact are
conflicting; (6) there is no citation of specific evidence on which the
factual findings are based; (7) the finding of absence of facts is
contradicted by the presence of evidence on record; (8) the findings of
the Court of Appeals are contrary to those of the trial court; (9) the
Court of Appeals manifestly overlooked certain relevant and
undisputed facts that, if properly considered, would justify a different
conclusion; (10) the findings of the Court of Appeals are beyond the
issues of the case; and (11) such findings are contrary to the
admissions of both parties.8

We find that the conclusion of the RTC in dismissing the case on the
ground of prescription based solely on the Affidavit executed by
Juanita in favor of Ricardo, the alleged seller of the property from
whom Dominador asserts his ownership, is speculative. Thus, a review
of the case is necessary.
Here, the RTC granted the motion to dismiss filed by Dominador based
on Section 1, Rule 9 of the Rules of Court which states:
Section 1. Defenses and objections not pleaded. Defenses and
objections not pleaded either in a motion to dismiss or in the answer
are deemed waived. However, when it appears from the pleadings or
the evidence on record that the court has no jurisdiction over the
subject matter, that there is another action pending between the same
parties for the same cause, or that the action is barred by a prior
judgment or by statute of limitations, the court shall dismiss the
case. (Emphasis supplied)
The RTC explained that prescription had already set in since the
Affidavit was executed on 31 May 1966 and petitioners filed the
present case only on 26 October 2001, a lapse of more than 30 years.
No action could be taken against the deed of sale made in favor of
Dominador without assailing the Affidavit, and the action to question
the Affidavit had already prescribed.
After a perusal of the records, we find that the RTC incorrectly relied
on the Affidavit alone in order to dismiss the case without considering
petitioners evidence. The facts show that the land was sold to
Dominador by Ricardos daughters, namely Josephine Bahia and
Virginia Bahia-Abas, during the lifetime of Ricardo. However, the
alleged deed of sale was not presented as evidence and neither was it
shown that Ricardos daughters had any authority from Ricardo to
dispose of the land. No cogent evidence was ever presented that
Ricardo gave his consent to, acquiesced in, or ratified the sale made
by his daughters to Dominador. In its 8 September 2006 Order, the
RTC hastily concluded that Ricardos daughters had legal personality
to sell the property:
On the allegation of the plaintiffs (petitioners) that Josephine Bahia and
Virginia Bahia-Abas had no legal personality or right to [sell] the
subject property is of no moment in this case. It should be Ricardo
Bahia who has a cause of action against [his] daughters and not the
herein plaintiffs. After all, Ricardo Bahia might have already consented
to or ratified the alleged deed of sale.9
Also, aside from the Affidavit, Dominador did not present any proof to
show that Ricardos possession of the land had been open, continuous
and exclusive for more than 30 years in order to establish
extraordinary acquisitive prescription.10 Dominador merely assumed
that Ricardo had been in possession of the land for 30 years based on
the Affidavit submitted to the RTC. The petitioners, on the other hand,
in their pleading filed with the RTC for recovery of ownership,
possession, partition and damages, alleged that Ricardo left the land
after he separated from his wife sometime after 1966 and moved to
another place. The records do not mention, however, whether Ricardo
had any intention to go back to the land or whether Ricardos family
ever lived there.
Further, Dominador failed to show that Ricardo had the land declared
in his name for taxation purposes from 1966 after the Affidavit was
executed until 2001 when the case was filed. Although a tax
declaration does not prove ownership, it is evidence of claim to
possession of the land.
Moreover, Ricardo and petitioners are co-heirs or co-owners of the
land. Co-heirs or co-owners cannot acquire by acquisitive prescription
the share of the other co-heirs or co-owners absent a clear repudiation
of the co-ownership, as expressed in Article 494 of the Civil Code
which states:
Art. 494. x x x No prescription shall run in favor of a co-owner or coheir against his co-owners or co-heirs as long as he expressly or
impliedly recognizes the co-ownership.
Since possession of co-owners is like that of a trustee, in order that a
co-owners possession may be deemed adverse to the cestui que
trust or other co-owners, the following requisites must concur: (1) that
he has performed unequivocal acts of repudiation amounting to an
ouster of the cestui que trust or other co-owners, (2) that such positive
acts of repudiation have been made known to the cestui que trust or
other co-owners, and (3) that the evidence thereon must be clear and
convincing.11
In the present case, all three requisites have been met. After Juanitas
death in 1989, petitioners sought for the partition of their mothers land.

The heirs, including Ricardo, were notified about the plan. Ricardo,
through a letter dated 5 June 1998, notified petitioners, as his co-heirs,
that he adjudicated the land solely for himself. Accordingly, Ricardos
interest in the land had now become adverse to the claim of his coheirs after repudiating their claim of entitlement to the land.
In Generosa v. Prangan-Valera,12 we held that in order that title may
prescribe in favor of one of the co-owners, it must be clearly shown
that he had repudiated the claims of the others, and that they were
apprised of his claim of adverse and exclusive ownership, before the
prescriptive period begins to run.
However, in the present case, the prescriptive period began to run only
from 5 June 1998, the date petitioners received notice of Ricardos
repudiation of their claims to the land. Since petitioners filed an action
for recovery of ownership and possession, partition and damages with
the RTC on 26 October 2001, only a mere three years had lapsed. This
three-year period falls short of the 10-year or 30-year acquisitive
prescription period required by law in order to be entitled to claim legal
ownership over the land. Thus, Dominador cannot invoke acquisitive
prescription.
Further, Dominadors argument that prescription began to commence
in 1966, after the Affidavit was executed, is erroneous. Dominador
merely relied on the Affidavit submitted to the RTC that Ricardo had
been in possession of the land for more than 30 years. Dominador did
not submit any other corroborative evidence to establish Ricardos
alleged possession since 1966. In Heirs of Maningding v. Court of
Appeals,13 we held that the evidence relative to the possession, as a
fact, upon which the alleged prescription is based, must be clear,
complete and conclusive in order to establish the prescription. Here,
Dominador failed to present any other competent evidence to prove
the alleged extraordinary acquisitive prescription of Ricardo over the
land. Since the property is an unregistered land, Dominador bought the
land at his own risk, being aware as buyer that no title had been issued
over the land. As a consequence, Dominador is not afforded protection
unless he can manifestly prove his legal entitlement to his claim.
With regard to the issue of the jurisdiction of the RTC, we hold that the
RTC did not err in taking cognizance of the case.
Under Section 1 of Republic Act No. 7691 (RA 7691),14 amending
Batas Pambansa Blg. 129, the RTC shall exercise exclusive
jurisdiction on the following actions:
Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known
as the "Judiciary Reorganization Act of 1980", is hereby amended to
read as follows:
"Sec. 19. Jurisdiction in civil cases. Regional Trial Courts shall
exercise exclusive original jurisdiction.
"(1) In all civil actions in which the subject of the litigation is incapable
of pecuniary estimation;
"(2) In all civil actions which involve the title to, or possession of, real
property, or any interest therein, where the assessed value of the
property involved exceeds Twenty Thousand Pesos (P20,000.00) or,
for civil actions in Metro Manila, where such value exceeds Fifty
Thousand Pesos (P50,000.00) except actions for forcible entry into
and unlawful detainer of lands or buildings, original jurisdiction over
which is conferred upon the Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts; x x x
On the other hand, Section 3 of RA 7691 expanded the jurisdiction of
the Metropolitan Trial Courts, Municipal Trial Courts and Municipal
Circuit Trial Courts over all civil actions which involve title to or
possession of real property, or any interest, outside Metro Manila
where the assessed value does not exceed Twenty thousand pesos
(P20,000.00). The provision states:
Section 3. Section 33 of the same law is hereby amended to read as
follows:
"Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial
Courts and Municipal Circuit Trial Courts in Civil Cases. - Metropolitan
Trial Courts, Municipal Trial Courts, and Municipal Trial Circuit Trial
Courts shall exercise:
xxx
"(3) Exclusive original jurisdiction in all civil actions which involve title
to, or possession of, real property, or any interest therein where the
assessed value of the property or interest therein does not exceed
Twenty thousand pesos (P20,000.00) or, in civil actions in Metro

Manila, where such assessed value does not exceed Fifty thousand
pesos (P50,000.00) exclusive of interest, damages of whatever kind,
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."
In the present case, the records show that the assessed value of the
land was P590.00 according to the Declaration of Property as of 23
March 2000 filed with the RTC. Based on the value alone, being way
belowP20,000.00, the MTC has jurisdiction over the case. However,
petitioners argued that the action was not merely for recovery of
ownership and possession, partition and damages but also for
annulment of deed of sale. Since annulment of contracts are actions
incapable of pecuniary estimation, the RTC has jurisdiction over the
case.151avvphi1
Petitioners are correct. In Singson v. Isabela Sawmill,16 we held that:
In determining whether an action is one the subject matter of which is
not capable of pecuniary estimation this Court has adopted the
criterion of first ascertaining the nature of the principal action or
remedy sought. If it is primarily for the recovery of a sum of money, the
claim is considered capable of pecuniary estimation, and whether
jurisdiction is in the municipal courts or in the courts of first instance
would depend on the amount of the claim. However, where the basic
issue is something other than the right to recover a sum of money,
where the money claim is purely incidental to, or a consequence of, the
principal relief sought, this Court has considered such actions as cases
where the subject of the litigation may not be estimated in terms of
money, and are cognizable by courts of first instance (now Regional
Trial Courts).
When petitioners filed the action with the RTC they sought to recover
ownership and possession of the land by questioning (1) the due
execution and authenticity of the Affidavit executed by Juanita in favor
of Ricardo which caused Ricardo to be the sole owner of the land to
the exclusion of petitioners who also claim to be legal heirs and entitled
to the land, and (2) the validity of the deed of sale executed between
Ricardos daughters and Dominador. Since the principal action sought
here is something other than the recovery of a sum of money, the
action is incapable of pecuniary estimation and thus cognizable by the
RTC. Well-entrenched is the rule that jurisdiction over the subject
matter of a case is conferred by law and is determined by the
allegations in the complaint and the character of the relief sought,
irrespective of whether the party is entitled to all or some of the claims
asserted.17
In sum, we find that the Affidavit, as the principal evidence relied upon
by the RTC to dismiss the case on the ground of prescription,
insufficiently established Dominadors rightful claim of ownership to the
land. Thus, we direct the RTC to try the case on the merits to
determine who among the parties are legally entitled to the land.
WHEREFORE, we GRANT the petition. We REVERSE AND SET
ASIDE the Orders dated 8 September 2006 and 13 February 2007 of
the Regional Trial Court of Tacloban City, Branch 34 in Civil Case No.
2001-10-161.
SO ORDERED.
G.R. No. 181622

November 20, 2013

GENESIS INVESTMENT, INC., CEBU JAYA REALTY INC., and

SPOUSES RHODORA and LAMBERT LIM,Petitioners,
vs.
HEIRS of CEFERINO EBARASABAL,* NAMELY: ROGELIO
EBARASABAL, SPOUSES LIGAYA E. GULIMLIM AND JOSE
GULIMLIM, SPOUSES VISITACION E. CONEJOS and ELIAS
CONEJOS, BEN TEJERO, POCAS TEJERO, GERTRUDES
TEJERO, BANING HAYO, LACIO EBARASABAL and JULIETA
EBARASABAL; HEIRS OF FLORO EBARASABAL, namely: SOFIA
ABELONG, PEPITO EBARASABAL AND ELPIDIO EBARASABAL;
HEIRS OF LEONA EBARASABAL- APOLLO, namely: SILVESTRA
A. MOJELLO and MARCELINO APOLLO; HEIRS OF PEDRO
EBARASABAL, namely: BONIFACIO EBARASABAL, SERGIO
EBARASABAL and JAIME EBARASABAL; HEIRS of ISIDRO
EBARASABAL, NAMELY: SPOUSES CARLOSA E. NUEVO and
FORTUNATO NUEVA;** HEIRS of BENITO EBARASABAL, namely:
PAULO BAGAAN, SPOUSES CATALINA A. MARIBAO and RENE
MARIBAO, VICENTE ABRINICA and PATRON EBARASABAL;
HEIRS of JULIAN EBARASABAL, NAMELY: ALFREDO BAGAAN,
JUAN BAGAAN, AVELINO BAGAAN, FERDINAND BAGAAN,
MAURO BAGAAN, SPOUSES ROWENA B. LASACA and
FRANCISCO LACASA,*** SPOUSES MARIA B. CABAG and EMILIO
CABAG and ESTELITA BAGAAN, all being represented herein by

VICTOR MOJELLO, FEDERICO BAGAAN and PAULINO

EBARASABAL, as their Attorneys-in-Fact, Respondents.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of
the Rules of Court seeking to reverse and set aside the Decision1 and
Resolution,2 dated July 11, 2007 and January 10, 2008, respectively, of
the Court of Appeals (CA) in CA-G.R. CEB-SP No. 01017.
The antecedents of the case are as follows:
On November 12, 2003, herein respondents filed against herein
petitioners a Complaint3 for Declaration of Nullity of Documents,
Recovery of Shares, Partition, Damages and Attorney's Fees. The
Complaint was filed with the Regional Trial Court (RTC) of Barili, Cebu.
On August 5, 2004, herein petitioners filed a Motion to
Dismiss4 contending, among others, that the RTC has no jurisdiction to
try the case on the ground that, as the case involves title to or
possession of real property or any interest therein and since the
assessed value of the subject property does not exceed P20,000.00
(the same being only P11,990.00), the action falls within the jurisdiction
of the Municipal Trial Court (MTC).5
In its Order6 dated September 29, 2004, the RTC granted petitioners'
Motion to Dismiss, holding as follows:

Whether or not the Honorable Court of Appeals gravely erred in

concluding that the Regional Trial Court, Branch 60 of Barili, Cebu has
jurisdiction over the instant case when the ALLEGATIONS IN THE
COMPLAINT clearly shows that the main cause of action of the
respondents is for the Recovery of their Title, Interest, and Share over
a Parcel of Land, which has an assessed value of P11,990.00 and
thus, within the jurisdiction of the Municipal Trial Court.13
The petition lacks merit.
For a clearer understanding of the case, this Court, like the CA, finds it
proper to quote pertinent portions of respondents' Complaint, to wit:
xxxx
1. Plaintiffs are all Filipino, of legal age, surviving descendants either
as grandchildren or great grandchildren and heirs and successors-ininterest of deceased Roman Ebarsabal, who died on 07 September
1952 x x x
xxxx
8. During the lifetime of Roman Ebarsabal, he acquired a parcel of land
situated in Basdaku, Saavedra, Moalboal, Cebu, x x x.
xxxx
with a total assessed value of P2,890.00 x x x. However, for the year
2002, the property was already having (sic) a total assessed value
of P11,990.00 x x x.

xxxx
And while the prayer of the plaintiffs for the annulment of documents
qualified the case as one incapable of pecuniary estimation thus,
rendering it cognizable supposedly by the second level courts but
considering that Republic Act No. 7691 expressly provides to cover "all
civil actions" which phrase understandably is to include those
incapable of pecuniary estimation, like the case at bar, this Court is of
the view that said law really finds application here more so that the
same case also "involves title to, or possession of, real property, or any
interest therein." For being so, the assessed value of the real property
involved is determinative of which court has jurisdiction over the case.
And the plaintiffs admitting that the assessed value of the litigated area
is less thanP20,000.00, the defendants are correct in arguing that the
case is beyond this Court's jurisdiction.7
Respondents filed a Motion for Partial Reconsideration,8 arguing that
their complaint consists of several causes of action, including one for
annulment of documents, which is incapable of pecuniary estimation
and, as such, falls within the jurisdiction of the RTC.9
On March 17, 2005, the RTC issued an Order granting respondents'
Motion for Partial Reconsideration and reversing its earlier Order dated
September 29, 2004. The RTC ruled, thus:
On the issue of want of jurisdiction, this court likewise finds to be with
merit the contention of the movants as indeed the main case or the
primary relief prayed for by the movants is for the declaration of nullity
or annulment of documents which unquestionably is incapable of
pecuniary estimation and thus within the exclusive original jurisdiction
of this court to try although in the process of resolving the controversy,
claims of title or possession of the property in question is involved
which together with all the other remaining reliefs prayed for are but
purely incidental to or as a consequence of the foregoing principal
relief sought.10
Petitioners filed a Motion for Reconsideration,11 but the RTC denied it
in its Order dated June 23, 2005.
Aggrieved, petitioners filed a petition for certiorari with the CA.
However, the CA dismissed the petition via its assailed Decision dated
July 11, 2007, holding that the subject matter of respondents' complaint
is incapable of pecuniary estimation and, therefore, within the
jurisdiction of the RTC, considering that the main purpose in filing the
action is to declare null and void the documents assailed therein.12
Petitioners' Motion for Reconsideration was, subsequently, denied in
the CA Resolution dated January 10, 2008.
Hence, the instant petition for review on certiorari raising the sole
issue, to wit:

9. Upon the death of said Roman Ebarsabal, his eight (8) children
named in par. 7 above, became co-owners of his above-described
property by hereditary succession; taking peaceful possession and
enjoyment of the same in fee simple pro indiviso, paying the real estate
taxes thereon and did not partition the said property among
themselves until all of them likewise died, leaving, however, their
respective children and descendants and/or surviving heirs and
successors-in-interest, and who are now the above-named plaintiffs
herein;
10. The plaintiffs who are mostly residents in (sic) Mindanao and
Manila, have just recently uncovered the fact that on 28th January
1997, the children and descendants of deceased Gil Ebarsabal,
namely: Pelagio, Hipolito, Precela, Fructuosa, Roberta, Florentino,
Erlinda, Sebastian, Cirilo, all surnamed Ebarsabal, have executed
among themselves a Deed of Extrajudicial Settlement with Sale of
Roman Ebarsabal's entire property described above, by virtue of which
they allegedly extrajudicially settled the same and, for P2,600,000.00
although only the sum of P950,000.00 was reflected in their Deed of
Sale for reason only known to them, they sold the whole property to
defendants Genesis Investment Inc. represented by co-defendant
Rhodora B. Lim, the wife of Lambert Lim, without the knowledge,
permission and consent of the plaintiffs who are the vendors' coowners of the lot in question, x x x.
11. Surprisingly, however, the defendant Genesis managed to have the
Tax Declaration of the property issued in the name of co-defendant
Cebu Jaya Realty Incorporated, a firm which, as already intimated
above, is also owned by Spouses Lambert and Rhodora B. Lim,
instead of in the name of Genesis Investment, Incorporated, which is
actually the vendee firm of the lot in question.
xxxx
Hence, the reason why Cebu Jaya Realty, Incorporated is joined and
impleaded herein as a co-defendant.
12. Without the participation of the plaintiffs who are co-owners of the
lot in question in the proceedings, the aforementioned extrajudicial
settlement with sale cannot be binding upon the plaintiff-co-owners.
13. Further, where as in this case, the other heirs who are the plaintiffs
herein, did not consent to the sale of their ideal shares in the inherited
property, the sale was only to be limited to the pro indiviso share of the
selling heirs.
xxxx
14. By representation, the plaintiffs, are therefore, by law, entitled to
their rightful shares from the estate of the deceased Roman Ebarsabal
consisting of seven (7) shares that would have been due as the shares
of seven (7) other children of Roman Ebarsabal who are also now

deceased, namely: Ceferino, Floro, Leona, Pedro, Isidoro, Julian and

Benito, all surnamed Ebarsabal.

declaration of nullity of contracts and documents which is incapable of

pecuniary estimation.15

15. The defendants who had prior knowledge of the existence of the
other heirs who are co-owners of the vendors of the property they
purchased, had unlawfully acted in bad faith in insisting to buy the
whole property in co-ownership, only from the heirs and successors-ininterest of deceased Gil Ebarsabal, who is only one (1) of the eight (8)
children of deceased Roman Ebarsabal, and without notifying thereof
in whatever manner the plaintiffs who are the heirs and successors-ininterest of the other co-owners of the property-in-question; thus, have
compelled the plaintiffs herein to file this instant case in court to protect
their interests, x x x.

As cited by the CA, this Court, in the case of Singson v. Isabela

Sawmill,16 held that:

xxxx
PRAYER
WHEREFORE, in view of all the foregoing, it is most respectfully
prayed of this Honorable Court that, after due notice and hearing,
judgment shall be rendered in favor of the plaintiffs, as follows, to wit:
1 Declaring as null and void and not binding upon the plaintiffs, the
following documents to wit:
(a) Deed of Extrajudicial Settlement with Sale executed by
and between the heirs of deceased Gil Ebarsabal headed by
Pedro Ebarsabal, and Genesis Investment, Inc., represented
by Rhodora Lim, dated 28th of January, 1997, marked as
Annex-A;
(b) Memorandum of Agreement executed between Pedro
Ebarsabal and Genesis Investment, Inc., represented by
Rhodora Lim dated 27 January, which document is
notarized;
(c) Tax Declaration of Real Property issued to Cebu Jaya
Realty, Inc., marked as Annex-D;
2 Ordering the defendants to make partition of the property in
litigation with the plaintiffs into eight (8) equal shares; to get one (1)
share thereof, which is the only extent of what they allegedly acquired
by purchase as mentioned above, and to transfer, restore or reconvey
and deliver to the plaintiffs, seven (7) shares thereof, as pertaining to
and due for the latter as the heirs and successors-in-interest of the
seven (7) brothers and sister of deceased Gil Ebarsabal already
named earlier in this complaint;

In determining whether an action is one the subject matter of which is

not capable of pecuniary estimation, this Court has adopted the
criterion of first ascertaining the nature of the principal action or
remedy sought. If it is primarily for the recovery of a sum of money, the
claim is considered capable of pecuniary estimation, and whether
jurisdiction is in the municipal courts or in the courts of first instance
would depend on the amount of the claim. However, where the basic
issue is something other than the right to recover a sum of money,
where the money claim is purely incidental to, or a consequence of, the
principal relief sought, this Court has considered such actions as cases
where the subject of the litigation may not be estimated in terms of
money, and are cognizable by courts of first instance [now Regional
Trial Courts].17
This rule was reiterated in Russell v. Vestil18 and Social Security
System v. Atlantic Gulf and Pacific Company of Manila Inc.19
Contrary to petitioners contention, the principal relief sought by
petitioners is the nullification of the subject Extrajudicial Settlement
with Sale entered into by and between some of their co-heirs and
respondents, insofar as their individual shares in the subject property
are concerned. Thus, the recovery of their undivided shares or interest
over the disputed lot, which were included in the sale, simply becomes
a necessary consequence if the above deed is nullified. Hence, since
the principal action sought in respondents Complaint is something
other than the recovery of a sum of money, the action is incapable of
pecuniary estimation and, thus, cognizable by the RTC.20 Well
entrenched is the rule that jurisdiction over the subject matter of a case
is conferred by law and is determined by the allegations in the
complaint and the character of the relief sought, irrespective of whether
the party is entitled to all or some of the claims asserted.21
Moreover, it is provided under Section 5 (c), Rule 2 of the Rules of
Court that where the causes of action are between the same parties
but pertain to different venues or jurisdictions, the joinder may be
allowed in the RTC provided one of the causes of action falls within the
jurisdiction of said court and the venue lies therein. Thus, as shown
above, respondents complaint clearly falls within the jurisdiction of the
RTC.
WHEREFORE, the petition is DENIED. The Decision and Resolution
dated July 11, 2007 and January 10, 2008, respectively, of the Court of
Appeals in CA-G.R. CEB-SP No. 01017 are AFFIRMED.

xxxx
SO ORDERED.
Further reliefs and remedies just and equitable in the premises are
also herein prayed for.
x x x x14
It is true that one of the causes of action of respondents pertains to the
title, possession and interest of each of the contending parties over the
contested property, the assessed value of which falls within the
jurisdiction of the MTC. However, a complete reading of the complaint
would readily show that, based on the nature of the suit, the allegations
therein, and the reliefs prayed for, the action is within the jurisdiction of
the RTC.
As stated above, it is clear from the records that respondents'
complaint was for "Declaration of Nullity of Documents, Recovery of
Shares, Partition, Damages and Attorney's Fees." In filing their
Complaint with the RTC, respondents sought to recover ownership and
possession of their shares in the disputed parcel of land by questioning
the due execution and validity of the Deed of Extrajudicial Settlement
with Sale as well as the Memorandum of Agreement entered into by
and between some of their co-heirs and herein petitioners. Aside from
praying that the RTC render judgment declaring as null and void the
said Deed of Extrajudicial Settlement with Sale and Memorandum of
Agreement, respondents likewise sought the following: (1) nullification
of the Tax Declarations subsequently issued in the name of petitioner
Cebu Jaya Realty, Inc.; (2) partition of the property in litigation; (3)
reconveyance of their respective shares; and (3) payment of moral and
exemplary damages, as well as attorney's fees, plus appearance
fees.1wphi1
Clearly, this is a case of joinder of causes of action which
comprehends more than the issue of partition of or recovery of shares
or interest over the real property in question but includes an action for

G.R. No. 138248 September 7, 2005

BARANGAY PIAPI, herein represented by its chairman ANDRES L.
LUGNASIN and LIBERATO LARGO, RITA LARGO, SABAS
MONTECALBO, SR., CARLOS ZAMORA, DONATA SESICAN,
DIZAR CASTILLO, ALEJANDOR GICALE, SALVACION SALE,
PABLO MORASTIL, JOSE JAVELOSA, ISIDRA BERNAL, FELIX
EGHOT, CORAZON EGHOT, ROSALINA REMONDE, ROA EGHOT,
CEFERINA LAGROSA, MARIO ARANEZ, ALBERTO CAMARILLO,
BOBBY DULAOTO, NOEL ZAMORA, MARTINO MORALLAS,
DANILO FAILAGA, MARITA BRAGAT, NATIVIDAD LAGRAMON,
RAQUEL GEROZAGA, SHIRLY CESAR, PIO ZAMORA, ANDRES
LUGNASIN, ELPIDIO SESICAN, CRESENTA BORJA, CARLITO
TANEZA, JR., MARCIAL RELLON, JEANILITO SUMALINOG,
ALBERTO ZAMORA, and LUISITO LAGROSA, Petitioners,
vs.
IGNACIO TALIP representing the HEIRS OF JUAN
JAYAG, Respondent.
DECISION
SANDOVAL-GUTIERREZ, J.:
Before us is a petition for review on certiorari1 assailing the Orders
dated January 12, 19992 and April 20, 19993of the Regional Trial Court
(RTC), Branch 18, Digos, Davao del Sur in Civil Case No. 3715 filed by
the above-named petitioners against respondent Ignacio Talip
representing the heirs of Juan Jayag.
The factual antecedents as borne by the records are:

On August 28, 1998, petitioners filed with the said RTC a complaint for
reconveyance and damages with prayer for issuance of a temporary
restraining order and/or writ of preliminary injunction against
respondent, docketed as Civil Case No. 3715.
The complaint alleges that petitioners and their predecessors-ininterest have been in actual, peaceful, continuous and open
possession for more than 30 years of a parcel of land consisting of 3.2
hectares situated in Piapi, Padada, Davao del Sur. It is covered by
Original Certificate of Title (OCT) No. P-(3331)-4244 of the Registry of
Deeds, same province, issued in the name of Juan Jayag and has
a market value of P15,000.00. The same land was subdivided into
lots consisting of 100 square meters each, where the individual
petitioners built their houses. On the remaining portion were
constructed their barangay center, multi-purpose gym and health
center. Respondent fraudulently obtained from the said Registry of
Deeds a Transfer Certificate of Title (TCT) in his name. In 1998, he
paid real estate taxes and subsequently, he threatened to build a barbwire fence around the land.
Instead of filing an answer, respondent moved to dismiss the complaint
on the ground that the RTC has no jurisdiction over the case
considering that the assessed value of the land is only P6,030.00.
Respondent, citing Section 33 (3) of BP Blg. 129, as amended by R.A.
No. 7691,4 maintains that the case falls within the exclusive jurisdiction
of the Municipal Circuit Trial Court of Padada-Kiblawan, Davao del Sur.

3. The respective areas that private plaintiffs occupy consisted of an

average of 100 square meters on which their homes and houses are
built while a large chunk of the above-described property has been
used or set aside for the barangay site of and other infrastructures for
Piapi, Padada, Davao del Sur.
xxxxxx
5. Defendant or his predecessor-in-interest has never been in
possession, of the land in suit and except for the year 1998, has not
paid taxes thereon nor declared the same for taxation purposes a
clear index that defendants title over the same is not genuine.
6. Defendant, in procuring title to the land in suit did so by fraud,
mistake and/or misrepresentation, hence, he holds the title for the
benefit and in trust of the landowner that is, herein plaintiffs.
7. Defendant is by law under obligation to reconvey the land in suit in
favor of herein plaintiffs, x x x."
It can easily be discerned that petitioners complaint involves title to, or
possession of, real property. However, they failed to allege therein
the assessed value of the subject property. Instead, what they stated
is the market value of the land at P15,000.00.
Section 19 (2) of Batas Pambansa Blg. 129, as amended provides:

In their opposition to the motion to dismiss, petitioners alleged that

jurisdiction is vested in the RTC considering that the total assessed
value of the property is P41,890.00, as shown by a Real Property
Field Appraisal and Assessment Sheet dated August 20, 1996 issued
by Atty. Marcos D. Risonar, Jr., Provincial Assessor of Davao del Sur.5
On January 12, 1999, the trial court issued an Order dismissing the
complaint for lack of jurisdiction.
Petitioners then filed a motion for reconsideration but was denied in an
Order dated April 20, 1999.
Hence, petitioners directly filed with this Court the instant petition for
review on certiorari assailing the trial courts Order dismissing the
complaint for lack of jurisdiction.
Petitioners contend that under Section 19 (1) of BP Blg. 129, as
amended, the RTC has jurisdiction over the complaint for
reconveyance since it is incapable of pecuniary estimation.
The contention is bereft of merit. This case is analogous to Huguete
vs. Embudo.6 There, petitioners argued that a complaint for annulment
of a deed of sale and partition is incapable of pecuniary estimation,
and thus falls within the exclusive jurisdiction of the RTC. However, we
ruled that "the nature of an action is not determined by what is stated in
the caption of the complaint but by the allegations of the complaint and
the reliefs prayed for. Where the ultimate objective of the plaintiffs,
like petitioners herein, is to obtain title to real property, it should
be filed in the proper court having jurisdiction over the assessed
value of the property subject thereof."
Indeed, basic as a hornbook principle is that the nature of an action, as
well as which court or body has jurisdiction over it, is determined based
on the allegations contained in the complaint of the plaintiff,
irrespective of whether or not the plaintiff is entitled to recover upon all
or some of the claims asserted therein.7

"SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall

exercise exclusive original jurisdiction:
xxxxxx
(2) In all civil actions which involve the title to, or possession of,
real property, or any interest thereon, where the assessed value of
the property involved exceeds Twenty thousand pesos
(P20,000.00) or for civil actions in Metro Manila, where such value
exceeds Fifty thousand pesos (P50,000.00) except actions for forcible
entry into and unlawful detainer of lands or buildings, original
jurisdiction over which is conferred upon the Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts."
The Rule requires that "the assessed value of the property, or if
there is none, the estimated value thereof, shall be alleged by the
claimant."8 It bears reiterating that what determines jurisdiction is the
allegations in the complaint and the reliefs prayed for. Petitioners
complaint is for reconveyance of a parcel of land. Considering that
their action involves the title to or interest in real property, they should
have alleged therein its assessed value. However, they only specified
the market value or estimated value, which is P15,000.00. Pursuant
to the provision of Section 33 (3) quoted earlier, it is the Municipal
Circuit Trial Court of Padada-Kiblawan, Davao del Sur, not the RTC,
which has jurisdiction over the case.
WHEREFORE, the petition is DENIED. The assailed Orders dated
January 12, 1999 and April 20, 1999 of the Regional Trial Court,
Branch 18, Digos, Davao del Sur in Civil Case No. 3715 are
hereby AFFIRMED. Costs against petitioners.
SO ORDERED.

G.R. No. 134230

Let us examine the pertinent allegations in petitioners complaint
below:
"x x x x x x
2. Plaintiffs by themselves and/or thru their predecessors-in-interest
have been in actual possession, in the concept of an owner, in good
faith and in a manner that is open, peaceful, uninterrupted, public,
adverse and continuous, for more than 30 years, the following
described parcel of land, viz:
A parcel of land containing an area of 3.2 hectares, more of less,
covered by OCT No. P-(3331)-4244, in the name of Juan Jayag and
situated in Piapi, Padada, Davao del Sur.
2a. The market value of the above-described land is Fifteen
Thousand Pesos (P15,000.00).

July 17, 2002

JOVENAL OUANO, petitioner,

vs.
PGTT INTERNATIONAL INVESTMENT CORPORATION and HON.
JUDGE RAMON G. CODILLA, JR.,respondents.
SANDOVAL-GUTIERREZ, J.:
PGTT International Investment Corporation (PGTT), respondent, is a
corporation duly organized under existing laws, with address at
YASCO Bldg., M. J. Cuenco Ave., Cebu City.
On December 11, 1997, PGTT filed with the Regional Trial Court
(RTC), Branch 20, Cebu City, a verified complaint against Jovenal
Ouano, petitioner, docketed as Civil Case No. CEB- 21319, entitled
"PGTT INTERNATIONAL INVESTMENT CORPORATION, Plaintiff, vs.
JUVENAL OUANO, Defendant," for "Recovery of Ownership and
Possession of Real Property and Damages."1 In its complaint, PGTT
alleged that it is the owner of Lot Nos. 1-10, Block 2 of the
Sunnymeade Crescent Subdivision located at Pit-os, Talamban, Cebu

City. Sometime in October of 1996, PGTT found that Ouano uprooted

the concrete monuments of the said lots, plowed them and planted
corn thereon. Despite PGTTs demand that he vacate the lots and
restore them to their original condition, Ouano refused, claiming he is
the owner and lawful possessor of the 380 square meters he occupied.
Due to Ouanos wrongful act, PGTT was deprived of the use of its
property and suffered damages in the amount of P100,000.00 a year.
Likewise, PGTT was constrained to file the subject action and hired the
services of his counsel for P100,000.00. PGTT prayed:
"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 thanP2,000.00 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

to those matters within its exclusive jurisdiction, and to prevent further

over-crowding of its docket.12 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, 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.
(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.
x x x." (Emphasis ours)
Likewise, Section 19 (paragraph 2) of the same law reads:
"Sec. 19. Jurisdiction in civil cases. - The Regional Trial
Court shall exercise exclusive originaljurisdiction:
x x x.
(2) In all civil actions, which involve the title to, or
possession of, real property, or any interest therein,where
the assessed value of the property involved exceeds
Twenty Thousand Pesos (P20,000.00)or, for civil actions in
Metro Manila, where such value exceeds Fifty Thousand
Pesos (P50,000.00) except actions for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction
over which is conferred upon the Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts;
x x x." (Emphasis ours)

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

It is undisputed that the assessed value of the property involved, as

shown by the corresponding tax declaration, is only P2,910.00. As
such, the complaint is well within the MTCs P20,000.00 jurisdictional
limit.
The finding of respondent judge that the value of the lots is higher than
that indicated in the tax declaration and that, therefore, the RTC has
jurisdiction over the case is highly speculative. It is elementary that the
tax declaration indicating the assessed value of the property enjoys the
presumption of regularity as it has been issued by the proper
government agency.
Respondent judge further held that since the complaint also seeks the
recovery of damages exceedingP100,000.00, then it is within the
competence of the RTC pursuant to Section 19 (paragraph 8) of Batas
Pambansa Blg. 129, as amended by R.A. 7691, which states:
"SEC. 19. Jurisdiction in civil cases. Regional Trial Courts
shall exercise exclusive original jurisdiction:
xxx
"(8) In all other cases in which the demand, exclusive of
interest, damages of whatever kind, attorneys fees, litigation
expenses, and costs or the value of the property in

controversy exceeds One Hundred Thousand Pesos

(P100,000.00) or, in such other cases in Metro Manila,
where the demand, exclusive of the above mentioned items
exceeds Two hundred thousand pesos (P200,000.00)."
(Emphasis ours)
The above provision does not apply to the instant case. It is applicable
only to "all other cases" other than an action involving title to, or
possession of real property in which the assessed value is the
controlling factor in determining the courts jurisdiction. Besides, the
same provision explicitly excludes from the determination of the
jurisdictional amount the demand for "interest, damages of
whatever kind, attorneys fees, litigation expenses, and
costs". The exclusion of such damages is reiterated in Section 33,
paragraph 3 of the sameBatas Pambansa Blg. 129, as amended,
quoted earlier. The said damages are merely incidental to, or a
consequence of, the main cause of action for recovery of ownership
and possession of real property. In this connection, this Court issued
Administrative Circular No. 09-94 setting the guidelines in the
implementation of R.A. 7691. Paragraph 2 states:
"2. The exclusion of the term damages of whatever kind
in determining the jurisdictional amount under Section
19 (8) and Section 33 (1) of B.P. Blg. 129, as amended by
R.A. 7691, applies to cases where the damages are
merely incidental to or a consequence of the main cause
of action.However, in cases where the claim for damages is
the main cause of action, or one of the causes of action, the
amount of such claim shall be considered in determining the
jurisdiction of the court." (Emphasis ours)
We thus find that in issuing the assailed orders denying petitioners
motion to dismiss, thus taking cognizance of the case, the RTC
committed grave abuse of discretion.
WHEREFORE, the instant petition is GRANTED. The assailed Orders
issued by respondent RTC on March 6, 1998 and May 27, 1998 in Civil
Case No. CEB-21319 are SET ASIDE. Accordingly, the complaint is
orderedDISMISSED.
SO ORDERED.
G.R. No. 136109

August 1, 2002

RADIO COMMUNICATIONS OF THE PHILIPPINES, INC., petitioner,

vs.
COURT OF APPEALS and MANUEL DULAWON, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review of the decision of the Court of Appeals1 in
CA-G.R. SP No. 45987 dated April 30, 19982 and its resolution dated
October 15, 19983 denying the motion for reconsideration.
On June 18, 1997, private respondent Manuel Dulawon filed with the
Regional Trial Court of Tabuk, Kalinga, Branch 25, a complaint for
breach of contract of lease with damages against petitioner Radio
Communications of the Philippines, Inc. (RCPI). Petitioner filed a
motion to dismiss the complaint for lack of jurisdiction contending that it
is the Municipal Trial Court which has jurisdiction as the complaint is
basically one for collection of unpaid rentals in the sum of P84,000.00,
which does not exceed the jurisdictional amount of P100,000.00 for
Regional Trial Courts. The trial court denied the motion to dismiss,4 as
well as petitioners motion for reconsideration.5Hence, petitioner went
to the Court of Appeals on a petition for certiorari. On April 30, 1998,
the Court of Appeals dismissed the petition. The dispositive portion
thereof reads:
WHEREFORE, the petition is hereby DENIED DUE COURSE and is
DISMISSED. Costs against petitioner.
SO ORDERED.6
The motion for reconsideration of the foregoing decision was denied on
October 15, 1998. Hence, this petition.
The issue for resolution in this petition is whether or not the Regional
Trial Court has jurisdiction over the complaint filed by private
respondent.

Pertinent portion of Batas Pambansa Blg. 129, as amended by

Republic Act No. 7691, provides:
SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall
exercise exclusive original jurisdiction:
(1) In all civil actions in which the subject of the litigation is incapable of
pecuniary estimation;
xxx

xxx

xxx

(8) In all other cases in which the demand, exclusive of interest,

damages of whatever kind, attorneys fees, litigation expenses, and
costs or the value of the property in controversy exceeds One hundred
thousand pesos (P100,000.00) or, in such other cases in Metro Manila,
where the demand, exclusive of the abovementioned items exceeds
Two hundred thousand pesos (P200,000.00).7
Corollary thereto, Administrative Circular No. 09-94, states:
xxx

xxx

xxx

2. The exclusion of the term "damages of whatever kind" in

determining the jurisdictional amount under Section 19 (8) and Section
33 (1) of B.P. 129, as amended by R.A. No. 7691, applies to cases
where the damages are merely incidental to or a consequence of the
main cause of action. However, in cases where the claim for damages
is the main cause of action, or one of the causes of action, the amount
of such claim shall be considered in determining the jurisdiction of the
court.
xxx

xxx

xxx

In Russell, et al., v. Vestil, et al.,8 the Court held 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 the litigation may not be estimated in
terms of money, which is cognizable exclusively by Regional Trial
Courts.
It is axiomatic that jurisdiction over the subject matter of a case is
conferred by law and is determined by the allegations in the complaint
and the character of the relief sought, irrespective of whether the
plaintiff is entitled to all or some of the claims asserted therein.9
In the case at bar, the allegations in the complaint plainly show that
private respondents cause of action is breach of contract. The
pertinent portion of the complaint recites:
xxx

xxx

xxx

2. That sometime during the end of the year 1995, defendant

through its appropriate officials negotiated with plaintiff the
lease of a portion of the latters building x x x
3. That the lease contract was effective for a period of three
(3) years of from January 1, 1996 to January 1, 1998 with
advance payment for the year 1996. The advance was not
however given in lump sum but on installment. One check
that was given in payment of one months rental for 1996
was even stale and had to be changed only after demand;
4. That as per contract the monthly rental for 1997 was
P3,300.00 while for 1998, it is P3,700.00;
5. That the defendant surreptitiously removed its equipments
and other personalities from the leased premises and failed
to pay rentals due for the months of January to March 1997
to the damage and prejudice of plaintiff; that this failure and
refusal on the part of plaintiff accelerated the payment of all
rentals for each month for the years 1997 and 1998;
6. That the acts of defendant amounts to a breach of
contract which is unlawful and malicious, as in fact, it caused
plaintiff serious anxiety, emotional stress, and sleepless
nights for which he is entitled to moral damages;

7. That plaintiff conveyed his feelings to Mr. Ronald C.

Manalastas as evidenced by a letter dated January 7, 1997
a copy of which is hereto attached to form part hereof as
Annex "B". This was later followed by a letter of plaintiffs
counsel a machine copy of which is hereto attached to form
part hereof and marked as Annex "C". Both these letters
landed on deaf ears thereby aggravating the
worries/anxieties of plaintiff;
8. That the period agreed is for the benefit of both parties
and any unilateral termination constitutes breach of contract;
9. That defendant actually used the leased premises during
the year 1996; that had it not been for the contract, plaintiff
could have leased the premises to other persons for
business purposes; that this unlawful and malicious breach
of contract cannot be lawfully countenanced hence
defendant must be taught a lesson by being ordered to pay
exemplary damages;

G.R. No. 173115

April 16, 2009

ATTY. VIRGILIO R. GARCIA, Petitioner,

vs.
EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. and ATTY.
SALVADOR C. HIZON, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. Nos. 173163-64

April 16, 2009

EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. and ATTY.

SALVADOR C. HIZON, Petitioners,
vs.
ATTY. VIRGILIO R. GARCIA, Respondent.
DECISION

x x x x x x x x x.

10

CHICO-NAZARIO, J.:
It is settled that a breach of contract is a cause of action either for
specific performance or rescission of contracts.11 In Manufacturers
Distributors, Inc. v. Siu Liong,12 the Court held that actions for specific
performance are incapable of pecuniary estimation and therefore fall
under the jurisdiction of the Regional Trial Court.13 Here, the averments
in the complaint reveal that the suit filed by private respondent was
primarily one for specific performance as it was aimed to enforce their
three-year lease contract which would incidentally entitle him to
monetary awards if the court should find that the subject contract of
lease was breached. As alleged therein, petitioners failure to pay
rentals due for the period from January to March 1997, constituted a
violation of their contract which had the effect of accelerating the
payment of monthly rentals for the years 1997 and 1998. The same
complaint likewise implied a premature and unilateral termination of the
term of the lease with the closure of and removal all communication
equipment in the leased premises.14 Under the circumstances, the
court has to scrutinize the facts and the applicable laws in order to
determine whether there was indeed a violation of their lease
agreement that would justify the award of rentals and damages. The
prayer, therefore, for the payment of unpaid rentals in the amount of
P84,000.00 plus damages consequent to the breach is merely
incidental to the main action for specific performance. Similarly,
in Manufacturers Distributors Inc.,15 the Court explained
xxx

xxx

xxx

That plaintiffs complaint also sought the payment by the defendant of

P3,376.00, plus interest and attorneys fees, does not give a pecuniary
estimation to the litigation, for the payment of such amounts can only
be ordered as a consequence of the specific performance primarily
sought. In other words, such payment would be but an incident or
consequence of defendant's liability for specific performance. If no
such liability is judicially declared, the payment can not be awarded.
Hence, the amounts sought do not represent the value of the subject of
litigation.
"Subject matter over which jurisdiction can not be conferred by
consent, has reference, not to the res or property involved in the
litigation nor to a particular case, but to the class of cases, the
purported subject of litigation, the nature of the action and of the relief
sought (Appeal of Maclain, 176 NW. 817)."
Specifically, it has been held that:
"The Court has no jurisdiction of a suit for specific performance of a
contract, although the damages alleged for its breach, if permitted, are
within the amount of which that court has jurisdiction." (Mebane Cotton
Breeding Station. vs. Sides, 257 SW. 302; 21 C.J.S. 59, note).
xxx

xxx

xxx

Clearly, the action for specific performance case, irrespective of the

amount of rentals and damages sought to be recovered, is incapable
of pecuniary estimation, hence cognizable exclusively by the Regional
Trial Court. The trial court, therefore, did not err in denying petitioners
motion to dismiss.
WHEREFORE, in view of all the foregoing, the petition is DENIED and
the assailed decision of the Court of Appeals in CA-G.R. SP No. 45987
is AFFIRMED.
SO ORDERED.

Assailed before Us via consolidated petitions for certiorari under Rule

45 of the Rules of Court is the Decision1 of the Court of Appeals in CAG.R. SP No. 88887 and No. 89066 dated 24 March 2006, which
dismissed the petitions for certiorari questioning the Decision2 of the
National Labor Relations Commission (NLRC) dated 21 March 2003,
docketed as NLRC NCR CA No. 028901-01. The NLRC reversed the
decision of the Labor Arbiter dated 30 September 2002, finding the
preventive suspension and dismissal of Atty. Virgilio R. Garcia illegal,
and dismissed the case for lack of jurisdiction.
The facts are not disputed.
Atty. Virgilio R. Garcia was the Vice President and Head of Business
Support Services and Human Resource Departments of the Eastern
Telecommunications Philippines, Inc. (ETPI).
ETPI is a corporation duly organized and existing under the laws of the
Republic of the Philippines.
Atty. Salvador C. Hizon is the President/Chief Executive Officer of
ETPI.
On 16 January 2000, Atty. Garcia was placed under preventive
suspension based on three complaints for sexual harassment filed by
Atty. Maria Larrie Alinsunurin, former manager of ETPIs Office of the
Legal Counsel; Ms. Emma Valeros-Cruz, Assistant Vice President of
ETPI and former secretary of Atty. Garcia; and Dr. Mercedita M.
Macalintal, medical retainer/company physician of ETPI. In response to
the complaints, the Human Resources Department constituted a
Committee on Decorum to investigate the complaints. By reason of
said complaints, Atty. Garcia was placed in preventive suspension. The
committee conducted an investigation where Atty. Garcia was given
copies of affidavits of the witnesses against him and a chance to
defend himself and to submit affidavits of his witnesses. The
Committee submitted a report which recommended his dismissal.3 In a
letter dated 14 April 2000, Atty. Hizon advised Atty. Garcia that his
employment with ETPI was, per recommendation of the Committee,
terminated effective 16 April 2000.
A complaint-affidavit for illegal dismissal with prayer for full
backwages4 and recovery of moral and exemplary damages was filed
on 11 July 2000 by Atty. Virgilio R. Garcia against ETPI and Atty.
Salvador C. Hizon.5 The case, docketed as NLRC NCR-30-07-0278700, was assigned to Labor Arbiter Patricio P. Libo-on. The parties
submitted their respective position papers,6 reply position papers7 and
rejoinders.8 Per agreement of the parties, ETPI and Atty. Hizon filed a
sur-rejoinder on 6 March 2001.9 Atty. Garcia manifested that he was no
longer submitting a sur-rejoinder and was submitting the case for
resolution.
On 15 April 2001, Atty. Garcia filed a Motion to Inhibit, praying that
Labor Arbiter Libo-on inhibit himself from further proceeding with the
case, on the ground that he was a fraternity brother of Atty.
Hizon.10 Atty. Garcia thereafter filed a second Motion to Inhibit11 on 10
May 2001. ETPI and Atty. Hizon opposed said motion, arguing that the
reason on which it was grounded was not one of those provided by
law.12 In an Order dated 13 June 2001, said motions were
denied.13 Atty. Garcia appealed said order before the NLRC via a
Memorandum on Appeal dated 4 July 2001,14 to which ETPI and Atty.
Hizon filed an Answer.15

The NLRC, in its decision dated 20 December 2001, set aside the
order of Labor Arbiter Libo-on and ordered the re-raffling of the
case.16 ETPI and Atty. Hizon moved for the reconsideration17 of the
decision, but the same was denied.18 Consequently, the case was reraffled to Labor Arbiter Ramon Valentin C. Reyes.19
The parties were directed to submit their respective memoranda.20 Atty.
Garcia filed his memorandum21 on 9 July 2002 while ETPI and Atty.
Hizon submitted their memorandum22 on 22 July 2002. On 16 August
2002, with leave of court, ETPI and Atty. Hizon filed a Reply
Memorandum, raising for the first time the issue of lack of jurisdiction.
In his decision dated 30 September 2002, Labor Arbiter Reyes found
the preventive suspension and subsequent dismissal of Atty. Garcia
illegal. The dispositive portion of the decision reads:
WHEREFORE, premises all considered, judgment is hereby rendered,
finding the preventive suspension and the dismissal illegal and
ordering the respondents to:
1. Reinstate complainant to his former position without loss
of seniority rights and other benefits appurtenant to the
position that complainant received prior to the illegal
dismissal;
2. Pay complainant his backwages which for purpose of
appeal is computed to the amount ofP4,200,000.00
(P150,000 x 28);
3. Pay complainant Moral damages in the amount
of P1,000,000.00 and Exemplary damages in the amount
of P500,000.00.23
On 14 November 2002, Atty. Garcia filed an Ex-Parte Motion for the
Issuance of a Writ of Execution.24 On 20 November 2002, Labor Arbiter
Reyes issued a Writ of Execution insofar as the reinstatement aspect
of the decision was concerned.25 ETPI and Atty. Hizon filed a Very
Urgent Motion to Lift/Quash Writ of Execution on 28 November
2002.26 Per Sheriffs Return on the Writ of Execution, said writ
remained unsatisfied because ETPI and Atty. Hizon refused to
reinstate Atty. Garcia to his former position.27
On 29 November 2002, Atty. Garcia filed an Ex-Parte Motion for the
Issuance of an Alias Writ of Execution praying that said writ be issued
ordering the sheriff to enforce the decision by garnishing the amount
ofP450,000.00 representing his monthly salaries for two months and
13th month pay from any of ETPIs bank accounts.28 Atty. Garcia
manifested that he was no longer filing any responsive pleading to the
Very Urgent Motion to Lift/Quash Writ of Execution because the Labor
Arbiter lost jurisdiction over the case when an appeal had been
perfected.29 In an Order dated 10 December 2002, Labor Arbiter Reyes
denied the Very Urgent Motion to Lift/Quash Writ of Execution,
explaining that it still had jurisdiction over the reinstatement aspect of
the decision, notwithstanding the appeal taken, and that the grounds
relied upon for the lifting or quashing of the writ were not valid
grounds.30 Labor Arbiter Reyes subsequently issued a 1st Alias Writ of
Execution dated 11 December 2002 ordering the sheriff to proceed to
the premises of ETPI to reinstate Atty. Garcia and/or garnish the
amounts prayed for.31 Per Sheriffs Return dated 17 January 2003, the
1st Alias Writ of Execution was satisfied with the amount
of P450,000.00 being released for proper disposition to Atty. Garcia.32
ETPI and Atty. Hizon appealed the decision to the NLRC, filing a
Notice of Appeal and Memorandum of Appeal,33which appeal was
opposed by Atty. Garcia.34 The appeal was docketed as NLRC NCR
CA Case No. 028901-01. ETPI and Atty. Hizon filed a Supplemental
Appeal Memorandum dated 23 January 2003 (With Very Urgent
Motion for Issuance of Temporary Restraining Order).35 In a
Manifestation ad Cautelam dated 28 January 2003, without waiving
their right to continue to question the jurisdiction of the Labor Arbiter,
they informed the Labor Arbiter that they had filed a Supplemental
Appeal Memorandum before the NLRC and asked that all processes
relating to the implementation of the reinstatement order be held in
abeyance so as not to render moot the reliefs prayed for in said
Supplemental Appeal Memorandum.36 They likewise filed on 31
January 2003 a Very Urgent Motion to Lift/Quash Order of
Garnishment ad Cautelam, praying that the notice of garnishment on
ETPIs bank account with Metrobank, Dela Costa Branch, or with other
banks with which ETPI maintained an account and which received said
notice of garnishment be immediately lifted/quashed.37 On 12 February
2003, Atty. Garcia filed his Opposition to said Supplemental Appeal
Memorandum.38
On 3 February 2003, Atty. Garcia filed an Ex-Parte Motion for the
Issuance of a 2nd Alias Writ of Execution.39 In an Order dated 5

February 2003, Labor Arbiter Reyes lifted the notice of garnishment on

ETPIs bank account with Metrobank, Dela Costa Branch.40 On 10
February 2003, Labor Arbiter Reyes issued a 2nd Writ of Execution.41
In a Manifestation ad Cautelam42 dated 10 February 2003, ETPI and
Atty. Hizon said that they filed with the NLRC on 7 February 2003 an
Urgent Petition (for Preliminary Injunction With Issuance of Temporary
Restraining Order)43 which prayed, inter alia, for the issuance of a
temporary restraining order to restrain the execution pending appeal of
the order of reinstatement and to enjoin the Labor Arbiter from issuing
writs of execution or other processes implementing the decision dated
30 September 2002. They added that they also filed on 7 February
2003 a Notice to Withdraw44 their Supplemental Appeal Memorandum
dated 23 January 2003.
ETPI and Atty. Hizon, without waiving their right to continue to question
the jurisdiction of the Labor Arbiter over the case, filed on 18 February
2003 a Motion to Inhibit, seeking the inhibition of Labor Arbiter Reyes
for allegedly evident partiality in favor of the complainant in issuing
writs of execution in connection with the order of reinstatement
contained in his decision dated 30 September 2002, despite the
pendency of an Urgent Petition (for Preliminary Injunction With Prayer
for the Issuance of Temporary Restraining Order) with the NLRC,
which sought the restraining of the execution pending appeal of the
order of reinstatement.45 The petition for injunction was docketed as
NLRC NCR IC No. 0001193-02. Atty. Garcia filed an opposition,46 to
which ETPI and Atty. Hizon filed a reply.47 Said motion to inhibit was
subsequently granted by Labor Arbiter Reyes.48 The case was reraffled to Labor Arbiter Elias H. Salinas.49
In an Order dated 26 February 2003, the NLRC, in NLRC NCR IC No.
0001193-02, issued a temporary restraining order (TRO) enjoining
Labor Arbiter Reyes from executing pending appeal the order of
reinstatement contained in his decision dated 30 September 2002, and
from issuing similar writs of execution pending resolution of the petition
for preliminary injunction. It directed ETPI and Atty. Hizon to post a
bond in the amount ofP30,000.00 to answer for any damage which
Atty. Garcia may suffer by reason of the issuance of the TRO.50
On 21 March 2003, the NLRC rendered its decision in NLRC NCR CA
Case No. 028901-01 reversing the decision of Labor Arbiter Reyes and
dismissing the case for lack of jurisdiction. The decretal portion of the
decision reads:
WHEREFORE, the decision appealed from is REVERSED, and the
instant case DISMISSED for lack of jurisdiction.51
The Commission ruled that the dismissal of Atty. Garcia, being ETPIs
Vice President, partook of the nature of an intra-corporate dispute
cognizable by Regional Trial Courts and not by Labor Arbiters. It added
that ETPI and Atty. Hizon were not barred by estoppel from challenging
the jurisdiction of the Labor Arbiter over the instant case.
Atty. Garcia moved for the reconsideration52 of the decision, which
ETPI and Atty. Hizon opposed.53 In a resolution dated 16 December
2003, the motion for reconsideration was denied for lack of merit.54
On 26 March 2003, Atty. Garcia filed a Motion to Inhibit, requesting
Associate Commissioner Angelita A. Gacutan to inhibit herself from
further participating in the deliberation and resolution of the case for
manifest bias and partiality in favor of ETPI and Atty. Hizon. The motion
was later withdrawn.55
On 3 April 2003, the NLRC made permanent the TRO it issued
pursuant to its ruling in NLRC NCR CA Case No. 028901-01, that since
the Labor Arbiter had no jurisdiction over the case, the decision of the
Labor Arbiter dated 30 September 2002 was void.56
On 6 March 2004, the resolution dated 16 December 2003 became
final and executory. Consequently, on 14 June 2004, an entry of
judgment was made recording said resolution in the Book of Entries of
Judgments.57
On 18 June 2004, ETPI and Atty. Hizon filed a Motion to Discharge
and/or Release the Appeal Bond58 in the amount of P5,700,000.00 that
they had posted. 59
On 9 July 2004, Atty. Garcia filed a Motion to Set Aside Finality of
Judgment With Opposition to Motion to Discharge Appeal
Bond,60 claiming that he did not receive the resolution dated 16
December 2003 of the NLRC, the same having been sent to his former
address at 9 Isidora St., Don Antonio Heights, Diliman, Quezon City,
and not to his new address at 4 Pele St., Filinvest 2, Batasan Hills,
Quezon City, where he had been receiving all pleadings, Resolutions,

Orders and Decisions pertaining to the instant case since April 2001.
On 19 July 2004, ETPI and Atty. Hizon filed their opposition thereto. On
23 August 2004, the NLRC, admitting that it missent the resolution
dated 16 December 2003 denying Atty. Garcias motion for
reconsideration, issued an order granting the motion. It recalled and
set aside the Entry of Judgment dated 14 June 2004 and denied the
Motion to Discharge and/or Release the Appeal Bond.61
In its Motion for Reconsideration dated 17 September 2004, ETPI and
Atty. Hizon argued that the NLRC correctly sent the resolution of 16
December 2003 to counsels allegedly old address, considering that
same was counsels address of record, there being no formal notice
filed with the NLRC informing it of a change of address. They
contended that the aforesaid resolution had become final and
executory, and that Atty. Garcia should bear the consequences of his
inequitable conduct and/or gross negligence.62 On 10 January 2005,
the NLRC denied the motion for reconsideration.63
On 14 March 2005, Atty. Garcia appealed to the Court of Appeals via a
Petition for Certiorari. It prayed that the Decision dated 21 March 2003
and resolution dated 16 December 2003 of the NLRC be annulled and
set aside, and that the decision of the Labor Arbiter dated 30
September 2002 be reinstated.64 The appeal was docketed as CA-G.R.
SP No. 88887.
On 28 March 2005, ETPI and Atty. Hizon likewise filed a Petition for
Certiorari asking that the Orders dated 23 August 2004 and 10 January
2005 of the NLRC be set aside; that its resolution dated 16 December
2003 be declared final and executory; and that the NLRC be directed
to discharge and/or release Supersedeas Bond No. JCL (15) 00823
SICI Bond No. 75069 dated 18 November 2002 posted by them.65 The
appeal was docketed as CA-G.R. SP No. 89066.
Upon motion of Atty. Garcia, the two petitions for certiorari were
consolidated.66
On 24 March 2006, the assailed decision of the Court of Appeals was
rendered, the dispositive portion reading:
UPON THE VIEW WE TAKE OF THIS CASE, THUS, the consolidated
petitions are hereby DISMISSED for lack of merit. Without costs in
both instances.67
The appellate court, on ETPI and Atty. Hizons argument that Atty.
Garcias petition for certiorari was filed out of time, ruled that the NLRC
did not commit grave abuse of discretion in liberally applying the rules
regarding changes in the address of counsel. It likewise ruled that Atty.
Garcia, being the Vice President for Business Support Services and
Human Resource Departments of ETPI, was a corporate officer at the
time he was removed. Being a corporate officer, his removal was a
corporate act and/or an intra-corporate controversy, the jurisdiction of
which rested with the Securities and Exchange Commission (now with
the Regional Trial Court), and not the Labor Arbiter and the NLRC. It
added that ETPI and Atty. Hizon were not estopped from questioning
the jurisdiction of the Labor Arbiter before the NLRC on appeal,
inasmuch as said issue was seasonably raised by ETPI and Atty.
Hizon in their reply memorandum before the Labor Arbiter.
On 18 April 2006, Atty. Garcia filed his Motion for
Reconsideration.68 On 20 April 2006, ETPI and Atty. Hizon filed a
Motion for Partial Reconsideration.69 The parties filed their respective
comments thereon.70 On 14 June 2006, the Court of Appeals denied
the motions for reconsideration.71
Atty. Garcia is now before us via a Petition for Review, which he filed
on 3 August 2006.72 The petition was docketed as G.R. No. 173115.
On 8 August 2006, he filed an Amended Petition for Review.73 He prays
that the decision of the NLRC dated 21 March 2003 and its resolution
dated 16 December 2003, and the decision of the Court of Appeals
dated 24 March 2006 and its resolution dated 14 June 2006, be
reconsidered and set aside and that the decision of the Labor Arbiter
dated 30 September 2002 be affirmed and reinstated.
ETPI and Atty. Hizon are also before us by way of a Petition for
Certiorari.74 The petition which was filed on 6 July 2006 was docketed
as G.R. Nos. 173163-64.
In our resolution dated 30 August 2006, G.R. Nos. 173163-64 were
consolidated with G.R. No. 173115, and the parties were required to
comment on the petitions within ten days from notice. 75 Atty. Garcia
filed his comment on 13 November 2006,76 while ETPI and Atty. Hizon
filed theirs on 29 November 2006.77

On 15 January 2007, we noted the comments filed by the parties and

required them to file their Replies to said comments.78 ETPI and Atty.
Hizon79 filed their Reply on 26 February 2007, with Atty. Garcia filing
his on 2 March 2007.80
On 26 March 2007, we gave due course to the petitions and required
the parties to submit the respective memoranda within 30 days from
notice.81 Atty. Garcia submitted his Memorandum82 on 12 June 2007
and ETPI and Atty. Hizon filed theirs on 13 July 2007.83 With leave of
court, ETPI and Atty. Hizon filed a reply memorandum.84
Atty. Garcia raises the lone issue:
WHETHER THE QUESTION OF LEGALITY OR ILLEGALITY OF THE
REMOVAL OR TERMINATION OF EMPLOYMENT OF AN OFFICER
OF A CORPORATION IS AN INTRA-CORPORATE CONTROVERSY
THAT FALLS UNDER THE ORIGINAL EXCLUSIVE JURISDICTION
OF THE REGIONAL TRIAL COURTS?85
ETPI and Atty. Hizon argue that the Court of Appeals, in ruling that the
NLRC did not commit grave abuse of discretion amounting to lack or
excess of jurisdiction in issuing its order dated 23 August 2004 and its
resolution dated 10 January 2005, committed grave reversible error
and decided questions of substance in a way not in accordance with
law and applicable decisions of the Honorable Court, and departed
from the accepted and usual course of judicial proceedings,
necessitating the Honorable Courts exercise of its power of
supervision.
I
THE RESOLUTION DATED 16 DECEMBER 2003 ISSUED BY THE
NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION)
HAS ALREADY BECOME FINAL AND EXECUTORY AND HAS
VESTED UPON PETITIONERS ETPI, ET AL. A RIGHT RECOGNIZED
AND PROTECTED UNDER THE LAW CONSIDERING THAT:
A. RESPONDENTS COPY OF SAID RESOLUTION WAS
PROPERLY SENT TO HIS ADDRESS OF RECORD, AT
THE LATEST ON 15 JANUARY 2004, IN ACCORDANCE
WITH WELL ESTABLISHED JURISPRUDENCE. HENCE,
RESPONDENT GARCIA HAD ONLY UNTIL 15 MARCH
2004 WITHIN WHICH TO FILE HIS PETITION FOR
CERTIORARI WITH THE COURT OF APPEALS.
RESPONDENT GARCIA FAILED TO FILE HIS PETITION
FOR CERTIORARI BY SAID DATE.
B. NOTWITHSTANDING THE FOREGOING,
RESPONDENT GARCIA HAD ACTUAL NOTICE OF THE
ISSUANCE OF THE SAME AS OF 24 JUNE 2004. HENCE
RESPONDENT GARCIA HAD ONLY UNTIL 23 AUGUST
2004 WITHIN WHICH TO FILE HIS PETITION FOR
CERTIORARI WITH THE COURT OF APPEALS.
RESPONDENT GARCIA FAILED TO FILE HIS PETITION
FOR CERTIORARI BY SAID DATE.
C. EVEN IF THE DATE OF RECEIPT IS RECKONED FROM
15 SEPTEMBER 2005, THE DATE RESPONDENT GARCIA
ADMITTED IN HIS PETITION FOR CERTIORARI TO BE
THE DATE OF HIS RECEIPT OF THE COPY OF THE
RESOLUTION DATED 16 DECEMBER 2003 AT HIS
ALLEGED NEW ADDRESS, RESPONDENT GARCIA HAD
ONLY UNTIL 15 NOVEMBER 2005 TO FILE HIS PETITION
FOR CERTIORARI DATED 11 MARCH 2005.
RESPONDENT GARCIA FAILED TO FILE HIS PETITION
FOR CERTIORARI BY SAID DATE.
II
THE COURT OF APPEALS ERRED IN AFFIRMING THE NLRCS
LIBERAL APPLICATION OF RULES CONSIDERING THAT A LIBERAL
APPLICATION OF RULES CANNOT BE USED TO DEPRIVE A RIGHT
THAT HAS ALREADY IPSO FACTO VESTED ON PETITIONERS
ETPI, ET AL.
III
THE COURT OF APPEALS ERRED IN RULING THAT THE NLRC DID
NOT COMMIT GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OR EXCESS OF JURISDICTION IN ISSUING ITS ORDER
DATED 23 AUGUST 2004 AND RESOLUTION DATED 10 JANUARY
2005 CONSIDERING THAT RESPONDENT GARCIA MAY NOT
ASSAIL THE FINALITY OF RESOLUTION DATED 16 DECEMBER
2003 THROUGH A MERE MOTION.

IV
THE COURT OF APPEALS ERRED IN FAILING TO RULE ON
PETITIONERS COUNTER-MOTION TO CITE RESPONDENT
GARCIA IN CONTEMPT OF COURT DESPITE ITS PREVIOUS
RESOLUTION DATED 30 MAY 2005 STATING THAT IT SHALL
ADDRESS THE SAME IN THE DECISION ON THE MERITS OF THE
CASE.86
The issue raised by Atty. Garcia whether the termination or removal
of an officer of a corporation is an intra-corporate controversy that falls
under the original exclusive jurisdiction of the regional trial courts is
not novel. The Supreme Court, in a long line of cases, has decreed
that a corporate officers dismissal or removal is always a corporate act
and/or an intra-corporate controversy, over which the Securities and
Exchange Commission [SEC] (now the Regional Trial Court)87 has
original and exclusive jurisdiction.88
We have ruled that an intra-corporate controversy is one which
pertains to any of the following relationships: (1) between the
corporation, partnership or association and the public; (2) between the
corporation, partnership or association and the State insofar as the
formers franchise, permit or license to operate is concerned; (3)
between the corporation, partnership or association and its
stockholders, partners, members or officers; and (4) among the
stockholders, partners or associates themselves.89 In Lozon v. National
Labor Relations Commission,90 we declared that Presidential Decree
No. 902-A confers on the SEC original and exclusive jurisdiction to
hear and decide controversies and cases involving intra-corporate and
partnership relations between or among the corporation, officers and
stockholders and partners, including their elections or appointments x x
x.
Before a dismissal or removal could properly fall within the jurisdiction
of the SEC, it has to be first established that the person removed or
dismissed was a corporate officer.91 "Corporate officers" in the context
of Presidential Decree No. 902-A92 are those officers of the corporation
who are given that character by the Corporation Code or by the
corporations by-laws.93 There are three specific officers whom a
corporation must have under Section 25 of the Corporation
Code.94 These are the president, secretary and the treasurer. The
number of officers is not limited to these three. A corporation may have
such other officers as may be provided for by its by-laws like, but not
limited to, the vice-president, cashier, auditor or general manager. The
number of corporate officers is thus limited by law and by the
corporations by-laws.1avvphi1

resolution dated 10 January 2005 denying their motion for

reconsideration thereon. The decision of the Labor Arbiter, who had
jurisdiction over the case, was properly dismissed by the NLRC.
Consequently, Supersedeas Bond No. JCL (15) 00823 SICI Bond No.
75069 dated 18 November 2002, posted by ETPI as a requirement for
the filing of an appeal before the NLRC, is ordered discharged.
WHEREFORE, premises considered, the petition for certiorari of Atty.
Garcia in G.R. No. 173115 is hereby DENIED. The petition for review
on certiorari of ETPI and Atty. Hizon in G.R. Nos. 173163-64 is
PARTIALLY GRANTED insofar as the discharge of Supersedeas Bond
No. JCL (15) 00823 SICI Bond No. 75069 dated 18 November 2002 is
concerned. This ruling is without prejudice to Atty. Garcias taking
recourse to and seeking relief through the appropriate remedy in the
proper forum.
SO ORDERED.

G.R. No. 170770

January 9, 2013

VITALIANO N. AGUIRRES II and FIDEL N. AGUIRRE, Petitioners,

vs.
FQB+7, INC., NATHANIEL D. BOCOBO, PRISCILA BOCOBO and
ANTONIO DE VILLA, Respondents.
DECISION
DEL CASTILLO, J.:
Pursuant to Section 145 of the Corporation Code, an existing intracorporate dispute, which does not constitute a continuation of
corporate business, is not affected by the subsequent dissolution of the
corporation.
Before the Court is a Petition for Review on Certiorari of the June 29,
2005 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 87293,
which nullified the trial courts writ of preliminary injunction and
dismissed petitioner Vitaliano N. Aguirres (Vitaliano) Complaint before
the Regional Trial Court (RTC) for lack of jurisdiction. The dispositive
portion of the assailed Decision reads:
WHEREFORE, the assailed October 15, 2004 Order, as well as the
October 27, 2004 Writ of Preliminary Injunction, are SET ASIDE. With
FQB+7, Inc.s dissolution on September 29, 2003 and Case No.
04111077s ceasing to become an intra-corporate dispute said case is
hereby ordered DISMISSED for want of jurisdiction.

In the case before us, the by-laws of ETPI provide:

SO ORDERED.2
ARTICLE V
Officers
Section 1. Number. The officers of the Company shall be a Chairman
of the Board, a President, one or more Vice-Presidents, a Treasurer, a
Secretary, an Assistant Secretary, and such other officers as may be
from time to time be elected or appointed by the Board of Directors.
One person may hold any two compatible offices.95
Atty. Garcia tries to deny he is an officer of ETPI. Not being a corporate
officer, he argues that the Labor Arbiter has jurisdiction over the case.
One of the corporate officers provided for in the by-laws of ETPI is the
Vice-President. It can be gathered from Atty. Garcias complaintaffidavit that he was Vice President for Business Support Services and
Human Resource Departments of ETPI when his employment was
terminated effective 16 April 2000. It is therefore clear from the by-laws
and from Atty. Garcia himself that he is a corporate officer. One who is
included in the by-laws of a corporation in its roster of corporate
officers is an officer of said corporation and not a mere
employee.96 Being a corporate officer, his removal is deemed to be an
intra-corporate dispute cognizable by the SEC and not by the Labor
Arbiter.
We agree with both the NLRC and the Court of Appeals that Atty.
Garcias ouster as Vice-President, who is a corporate officer of ETPI,
partakes of the nature of an intra-corporate controversy, jurisdiction
over which is vested in the SEC (now the RTC). The Labor Arbiter thus
erred in assuming jurisdiction over the case filed by Atty. Garcia,
because he had no jurisdiction over the subject matter of the
controversy.
Having ruled which body has jurisdiction over the instant case, we find
it unnecessary, due to mootness, to further discuss and rule on the
issues raised by ETPI and Atty. Hizon regarding the NLRC order dated
23 August 2004 granting Atty. Garcias Motion to Set Aside Finality of
Judgment with Opposition to Motion to Discharge Appeal Bond, and its

Likewise assailed in this Petition is the appellate courts December 16,

2005 Resolution,3 which denied a reconsideration of the assailed
Decision.
Factual Antecedents
On October 5, 2004, Vitaliano filed, in his individual capacity and on
behalf of FQB+7, Inc. (FQB+7), a Complaint4for intra-corporate
dispute, injunction, inspection of corporate books and records, and
damages, against respondents Nathaniel D. Bocobo (Nathaniel),
Priscila D. Bocobo (Priscila), and Antonio De Villa (Antonio). The
Complaint alleged that FQB+7 was established in 1985 with the
following directors and subscribers, as reflected in its Articles of
Incorporation:
Directors

Subscribers

1. Francisco Q. Bocobo

1. Francisco Q. Bocobo

2. Fidel N. Aguirre

2. Fidel N. Aguirre

3. Alfredo Torres

3. Alfredo Torres

4. Victoriano Santos

4. Victoriano Santos

5. Victorino Santos5

5. Victorino Santos
6. Vitaliano N. Aguirre II
7. Alberto Galang
8. Rolando B. Bechayda6

To Vitalianos knowledge, except for the death of Francisco Q. Bocobo

and Alfredo Torres, there has been no other change in the above
listings.
The Complaint further alleged that, sometime in April 2004, Vitaliano
discovered a General Information Sheet (GIS) of FQB+7, dated
September 6, 2002, in the Securities and Exchange Commission

(SEC) records. This GIS was filed by Francisco Q. Bocobos heirs,

Nathaniel and Priscila, as FQB+7s president and secretary/treasurer,
respectively. It also stated FQB+7s directors and subscribers, as
follows:

determined that the corporations dissolution was a conclusive fact

after petitioners Vitaliano and Fidel failed to dispute this factual
assertion.31
Ruling of the Court of Appeals

Directors

Subscribers

4. Victoriano Santos

The CA determined that the issues of the case are the following: (1)
1. Nathaniel D. Bocobo whether the trial courts issuance of the writ of preliminary injunction, in
its October 15, 2004 Order, was attended by grave abuse of discretion
2. Priscila D. Bocobo
amounting to lack of jurisdiction; and (2) whether the corporations
dissolution affected the trial courts jurisdiction to hear the intra
3. Fidel N. Aguirre
corporate dispute in SEC Case No. 04-111077.32
7
4. Victorino Santos

5. Victorino Santos

5. Victorino Santos

6. Consolacion Santos8

6. Consolacion Santos

1. Nathaniel D. Bocobo
2. Priscila D. Bocobo
3. Fidel N. Aguirre

Further, the GIS reported that FQB+7s stockholders held their annual
meeting on September 3, 2002.10
The substantive changes found in the GIS, respecting the composition
of directors and subscribers of FQB+7, prompted Vitaliano to write to
the "real" Board of Directors (the directors reflected in the Articles of
Incorporation), represented by Fidel N. Aguirre (Fidel). In this
letter11 dated April 29, 2004, Vitaliano questioned the validity and
truthfulness of the alleged stockholders meeting held on September 3,
2002. He asked the "real" Board to rectify what he perceived as
erroneous entries in the GIS, and to allow him to inspect the corporate
books and records. The "real" Board allegedly ignored Vitalianos
request.
On September 27, 2004, Nathaniel, in the exercise of his power as
FQB+7s president, appointed Antonio as the corporations attorney-infact, with power of administration over the corporations farm in
Quezon Province.12Pursuant thereto, Antonio attempted to take over
the farm, but was allegedly prevented by Fidel and his men.13
Characterizing Nathaniels, Priscilas, and Antonios continuous
representation of the corporation as a usurpation of the management
powers and prerogatives of the "real" Board of Directors, the Complaint
asked for an injunction against them and for the nullification of all their
previous actions as purported directors, including the GIS they had
filed with the SEC. The Complaint also sought damages for the
plaintiffs and a declaration of Vitalianos right to inspect the corporate
records.
The case, docketed as SEC Case No. 04-111077, was assigned to
Branch 24 of the RTC of Manila (Manila RTC), which was a designated
special commercial court, pursuant to A.M. No. 03-03-03-SC.14
The respondents failed, despite notice, to attend the hearing on
Vitalianos application for preliminary injunction.15Thus, in an
Order16 dated October 15, 2004, the trial court granted the application
based only on Vitalianos testimonial and documentary evidence,
consisting of the corporations articles of incorporation, by-laws, the
GIS, demand letter on the "real" Board of Directors, and police blotter
of the incident between Fidels and Antonios groups. On October 27,
2004, the trial court issued the writ of preliminary injunction17 after
Vitaliano filed an injunction bond.
The respondents filed a motion for an extension of 10 days to file the
"pleadings warranted in response to the complaint," which they
received on October 6, 2004.18 The trial court denied this motion for
being a prohibited pleading under Section 8, Rule 1 of the Interim
Rules of Procedure Governing Intra-corporate Controversies under
Republic Act (R.A.) No. 8799.19
The respondents filed a Petition for Certiorari and
Prohibition,20 docketed as CA-G.R. SP No. 87293, before the CA. They
later amended their Petition by impleading Fidel, who allegedly shares
Vitalianos interest in keeping them out of the corporation, as a private
respondent therein.21
The respondents sought, in their certiorari petition, the annulment of all
the proceedings and issuances in SEC Case No. 04-11107722 on the
ground that Branch 24 of the Manila RTC has no jurisdiction over the
subject matter, which they defined as being an agrarian dispute.23 They
theorized that Vitalianos real goal in filing the Complaint was to
maintain custody of the corporate farm in Quezon Province. Since this
land is agricultural in nature, they claimed that jurisdiction belongs to
the Department of Agrarian Reform (DAR), not to the Manila
RTC.24 They also raised the grounds of improper venue (alleging that
the real corporate address is different from that stated in the Articles of
Incorporation)25 and forum-shopping26 (there being a pending case
between the parties before the DAR regarding the inclusion of the
corporate property in the agrarian reform program).27Respondents also
raised their defenses to Vitalianos suit, particularly the alleged
disloyalty and fraud committed by the "real" Board of Directors,28 and
respondents "preferential right to possess the corporate property" as
the heirs of the majority stockholder Francisco Q. Bocobo.29
The respondents further informed the CA that the SEC had already
revoked FQB+7s Certificate of Registration on September 29, 2003 for
its failure to comply with the SEC reportorial requirements. 30 The CA

On the first issue, the CA determined that the trial court committed a
grave abuse of discretion when it issued the writ of preliminary
injunction to remove the respondents from their positions in the Board
of Directors based only on Vitalianos self-serving and empty
assertions. Such assertions cannot outweigh the entries in the GIS,
which are documented facts on record, which state that respondents
are stockholders and were duly elected corporate directors and officers
of FQB+7, Inc. The CA held that Vitaliano only proved a future right in
case he wins the suit. Since an injunction is not a remedy to protect
future, contingent or abstract rights, then Vitaliano is not entitled to a
writ.33
Further, the CA disapproved the discrepancy between the trial courts
October 15, 2004 Order, which granted the application for preliminary
injunction, and its writ dated October 27, 2004. The Order enjoined all
the respondents "from entering, occupying, or taking over possession
of the farm owned by Atty. Vitaliano Aguirre II," while the writ states that
the subject farm is "owned by plaintiff corporation located in Mulanay,
Quezon Province." The CA held that this discrepancy imbued the
October 15, 2004 Order with jurisdictional infirmity.34
On the second issue, the CA postulated that Section 122 of the
Corporation Code allows a dissolved corporation to continue as a body
corporate for the limited purpose of liquidating the corporate assets
and distributing them to its creditors, stockholders, and others in
interest. It does not allow the dissolved corporation to continue its
business. That being the state of the law, the CA determined that
Vitalianos Complaint, being geared towards the continuation of
FQB+7, Inc.s business, should be dismissed because the corporation
has lost its juridical personality.35 Moreover, the CA held that the trial
court does not have jurisdiction to entertain an intra-corporate dispute
when the corporation is already dissolved.36
After dismissing the Complaint, the CA reminded the parties that they
should proceed with the liquidation of the dissolved corporation based
on the existing GIS, thus:
With SECs revocation of its certificate of registration on September 29,
2004 [sic], FQB+7, Inc. will be obligated to wind up its affairs. The
Corporation will have to be liquidated within the 3-year period
mandated by Sec. 122 of the Corporation Code.
Regardless of the method it will opt to liquidate itself, the Corporation
will have to reckon with the members of the board as duly listed in the
General Information Sheet last filed with SEC. Necessarily, and as
admitted in the complaint below, the following as listed in the
Corporations General Information Sheet dated September 6, 2002, will
have to continue acting as Members of the Board of FQB+7, Inc. viz:
x x x x37
Herein petitioners filed a Motion for Reconsideration.38 They argued
that the CA erred in ruling that the October 15, 2004 Order was
inconsistent with the writ. They explained that pages 2 and 3 of the
said Order were interchanged in the CAs records, which then misled
the CA to its erroneous conclusion. They also posited that the original
sentence in the correct Order reads: "All defendants are further
enjoined from entering, occupying or taking over possession of the
farm owned by plaintiff corporation located in Mulanay, Quezon." This
sentence is in accord with what is ordered in the writ, hence the CA
erred in nullifying the Order.
On the second issue, herein petitioners maintained that the CA erred in
characterizing the reliefs they sought as a continuance of the dissolved
corporations business, which is prohibited under Section 122 of the
Corporation Code. Instead, they argued, the relief they seek is only to
determine the real Board of Directors that can represent the dissolved
corporation.
The CA denied the Motion for Reconsideration in its December 16,
2005 Resolution.39 It determined that the crucial issue is the trial courts
jurisdiction over an intra-corporate dispute involving a dissolved
corporation.40Based on the prayers in the Complaint, petitioners seek a
determination of the real Board that can take over the management of
the corporations farm, not to sit as a liquidation Board. Thus, contrary
to petitioners claims, their Complaint is not geared towards liquidation
but a continuance of the corporations business.
Issues

1. Whether the CA erred in annulling the October 15, 2004

Order based on interchanged pages.
2. Whether the Complaint seeks to continue the dissolved
corporations business.
3. Whether the RTC has jurisdiction over an intra-corporate
dispute involving a dissolved corporation.
Our Ruling
The Petition is partly meritorious.
On the nullification of the Order of preliminary injunction.
Petitioners reiterate their argument that the CA was misled by the
interchanged pages in the October 15, 2004 Order. They posit that had
the CA read the Order in its correct sequence, it would not have
nullified the Order on the ground that it was issued with grave abuse of
discretion amounting to lack of jurisdiction.41
Petitioners argument fails to impress. The CA did not nullify the
October 15, 2004 Order merely because of the interchanged pages.
Instead, the CA determined that the applicant, Vitaliano, was not able
to show that he had an actual and existing right that had to be
protected by a preliminary injunction. The most that Vitaliano was able
to prove was a future right based on his victory in the suit. Contrasting
this future right of Vitaliano with respondents existing right under the
GIS, the CA determined that the trial court should not have disturbed
the status quo. The CAs discussion regarding the interchanged pages
was made only in addition to its above ratiocination. Thus, whether the
pages were interchanged or not will not affect the CAs main finding
that the trial court issued the Order despite the absence of a clear and
existing right in favor of the applicant, which is tantamount to grave
abuse of discretion. We cannot disturb the CAs finding on this score
without any showing by petitioners of strong basis to warrant the
reversal.

(TRO) be issued enjoining the defendants, their

officers, employees, and agents from exercising
the powers and authority as members of the Board
of Directors of plaintiff FQB as well as officers
thereof and from misrepresenting and conducting
themselves as such, and enjoining defendant
Antonio de Villa from taking over the farm of the
plaintiff FQB and from exercising any power and
authority by reason of his appointment emanating
from his co-defendant Bocobos.
2. After due notice and hearing and during the
pendency of this action, to issue writ of preliminary
injunction prohibiting the defendants from
committing the acts complained of herein, more
particularly those enumerated in the immediately
preceeding paragraph, and making the injunction
permanent after trial on the merits.
II. ON THE MERITS
After trial, judgment be rendered in favor of the plaintiffs and
against the defendants, as follows:
1. Declaring defendant Bocobos as without any
power and authority to represent or conduct
themselves as members of the Board of Directors
of plaintiff FQB, or as officers thereof.
2. Declaring that Vitaliano N. Aguirre II is a
stockholder of plaintiff FQB owning fifty (50)
shares of stock thereof.
3. Allowing Vitaliano N. Aguirre II to inspect books
and records of the company.
4. Annulling the GIS, Annex "C" of the Complaint
as fraudulent and illegally executed and filed.

Is the Complaint a continuation of

business?
Section 122 of the Corporation Code prohibits a dissolved corporation
from continuing its business, but allows it to continue with a limited
personality in order to settle and close its affairs, including its complete
liquidation, thus:
Sec. 122. Corporate liquidation. Every corporation whose charter
expires by its own limitation or is annulled by forfeiture or otherwise, or
whose corporate existence for other purposes is terminated in any
other manner, shall nevertheless be continued as a body corporate for
three (3) years after the time when it would have been so dissolved, for
the purpose of prosecuting and defending suits by or against it and
enabling it to settle and close its affairs, to dispose of and convey its
property and to distribute its assets, but not for the purpose of
continuing the business for which it was established.
xxxx
Upon learning of the corporations dissolution by revocation of its
corporate franchise, the CA held that the intra-corporate Complaint,
which aims to continue the corporations business, must now be
dismissed under Section 122.
Petitioners concede that a dissolved corporation can no longer
continue its business. They argue, however, that Section 122 allows a
dissolved corporation to wind up its affairs within 3 years from its
dissolution. Petitioners then maintain that the Complaint, which seeks
only a declaration that respondents are strangers to the corporation
and have no right to sit in the board or act as officers thereof, and a
return of Vitalianos stockholdings, intends only to resolve remaining
corporate issues. The resolution of these issues is allegedly part of
corporate winding up.
Does the Complaint seek a continuation of business or is it a
settlement of corporate affairs? The answer lies in the prayers of the
Complaint, which state:
P R AY E R
WHEREFORE, it is most respectfully prayed of this Honorable Court
that judgment be rendered in favor of the plaintiffs and against the
defendants, in the following wise:
I. ON THE PRAYER OF TRO/STATUS QUO ORDER AND
WRIT OF PRELIMINARY INJUNCTION:
1. Forthwith and pending the resolution of
plaintiffs prayer for issuance of writ of preliminary
injunction, in order to maintain the status quo, a
status quo order or temporary restraining order

5. Ordering the defendants to pay jointly and

solidarily the sum of at least P200,000.00 as moral
damages; at least P100,000.00 as exemplary
damages; and at least P100,000.00 as and for
attorneys fees and other litigation expenses.
Plaintiffs further pray for costs and such other relief just and equitable
under the premises.42
The Court fails to find in the prayers above any intention to continue
the corporate business of FQB+7. The Complaint does not seek to
enter into contracts, issue new stocks, acquire properties, execute
business transactions, etc. Its aim is not to continue the corporate
business, but to determine and vindicate an alleged stockholders right
to the return of his stockholdings and to participate in the election of
directors, and a corporations right to remove usurpers and strangers
from its affairs. The Court fails to see how the resolution of these
issues can be said to continue the business of FQB+7.
Neither are these issues mooted by the dissolution of the corporation.
A corporations board of directors is not rendered functus officio by its
dissolution. Since Section 122 allows a corporation to continue its
existence for a limited purpose, necessarily there must be a board that
will continue acting for and on behalf of the dissolved corporation for
that purpose. In fact, Section 122 authorizes the dissolved
corporations board of directors to conduct its liquidation within three
years from its dissolution. Jurisprudence has even recognized the
boards authority to act as trustee for persons in interest beyond the
said three-year period.43 Thus, the determination of which group is the
bona fide or rightful board of the dissolved corporation will still provide
practical relief to the parties involved.
The same is true with regard to Vitalianos shareholdings in the
dissolved corporation. A partys stockholdings in a corporation, whether
existing or dissolved, is a property right44 which he may vindicate
against another party who has deprived him thereof. The corporations
dissolution does not extinguish such property right. Section 145 of the
Corporation Code ensures the protection of this right, thus:
Sec. 145. Amendment or repeal. No right or remedy in favor of or
against any corporation, its stockholders, members, directors, trustees,
or officers, nor any liability incurred by any such corporation,
stockholders, members, directors, trustees, or officers, shall be
removed or impaired either by the subsequent dissolution of said
corporation or by any subsequent amendment or repeal of this Code or
of any part thereof. (Emphases supplied.)
On the dismissal of the Complaint for
lack of jurisdiction.
The CA held that the trial court does not have jurisdiction over an intracorporate dispute involving a dissolved corporation. It further held that
due to the corporations dissolution, the qualifications of the
respondents can no longer be questioned and that the dissolved

corporation must now commence liquidation proceedings with the

respondents as its directors and officers.

b) between the corporation, partnership, or association and

its stockholders, partners, members, or officers;

The CAs ruling is founded on the assumptions that intra-corporate

controversies continue only in existing corporations; that when the
corporation is dissolved, these controversies cease to be intracorporate and need no longer be resolved; and that the status quo in
the corporation at the time of its dissolution must be maintained. The
Court finds no basis for the said assumptions.

c) between the corporation, partnership, or association and

the State as far as its franchise, permit or license to operate
is concerned; and

Intra-corporate disputes remain even

when the corporation is dissolved.
Jurisdiction over the subject matter is conferred by law. R.A. No.
879945 conferred jurisdiction over intra-corporate controversies on
courts of general jurisdiction or RTCs,46 to be designated by the
Supreme Court. Thus, as long as the nature of the controversy is intracorporate, the designated RTCs have the authority to exercise
jurisdiction over such cases.
So what are intra-corporate controversies? R.A. No. 8799 refers to
Section 5 of Presidential Decree (P.D.) No. 902-A (or The SEC
Reorganization Act) for a description of such controversies:
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
stockholder, 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;
c) Controversies in the election or appointments of directors,
trustees, officers or managers of such corporations,
partnerships or associations.
The Court reproduced the above jurisdiction in Rule 1 of the Interim
Rules of Procedure Governing Intra-corporate Controversies under
R.A. No. 8799:
SECTION 1. (a) Cases Covered These Rules shall govern the
procedure to be observed in civil cases involving the following:
(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;
(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.
Meanwhile, jurisprudence has elaborated on the above definitions by
providing tests in determining whether a controversy is intra-corporate.
Reyes v. Regional Trial Court of Makati, Br. 14247 contains a
comprehensive discussion of these two tests, thus:
A review of relevant jurisprudence shows a development in the Court's
approach in classifying what constitutes an intra-corporate 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. The types of relationships embraced under Section
5(b) x x x were as follows:
a) between the corporation, partnership, or association and
the public;

d) among the stockholders, partners or associates

themselves. xxx
The existence of any of the above intra-corporate relations was
sufficient to confer jurisdiction to the SEC now the RTC, 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., 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 intracorporate 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. 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 intracorporate 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.
This two-tier test was adopted in the recent case of Speed Distribution,
Inc. v. Court of Appeals:
'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 [b] the
nature of the question that is the subject of their controversy.1wphi1
The first element requires that the controversy must arise out of intracorporate 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 the 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.' (Citations and some emphases
omitted; emphases supplied.)
Thus, to be considered as an intra-corporate dispute, the case: (a)
must arise out of intra-corporate or partnership relations, and (b) the
nature of the question subject of the controversy must be such that it is
intrinsically connected with the regulation of the corporation or the
enforcement of the parties rights and obligations under the
Corporation Code and the internal regulatory rules of the corporation.
So long as these two criteria are satisfied, the dispute is intra-corporate
and the RTC, acting as a special commercial court, has jurisdiction
over it.
Examining the case before us in relation to these two criteria, the Court
finds and so holds that the case is essentially an intra-corporate
dispute. It obviously arose from the intra-corporate relations between
the parties, and the questions involved pertain to their rights and
obligations under the Corporation Code and matters relating to the
regulation of the corporation. We further hold that the nature of the
case as an intra-corporate dispute was not affected by the subsequent
dissolution of the corporation.
It bears reiterating that Section 145 of the Corporation Code protects,
among others, the rights and remedies of corporate actors against
other corporate actors. The statutory provision assures an aggrieved
party that the corporations dissolution will not impair, much less
remove, his/her rights or remedies against the corporation, its
stockholders, directors or officers. It also states that corporate
dissolution will not extinguish any liability already incurred by the
corporation, its stockholders, directors, or officers. In short, Section
145 preserves a corporate actors cause of action and remedy against
another corporate actor. In so doing, Section 145 also preserves the
nature of the controversy between the parties as an intra-corporate
dispute.

The dissolution of the corporation simply prohibits it from continuing its

business. However, despite such dissolution, the parties involved in the
litigation are still corporate actors. The dissolution does not
automatically convert the parties into total strangers or change their
intra-corporate relationships. Neither does it change or terminate
existing causes of action, which arose because of the corporate ties
between the parties. Thus, a cause of action involving an intracorporate controversy remains and must be filed as an intra-corporate
dispute despite the subsequent dissolution of the corporation.
WHEREFORE, premises considered, the Petition for Review on
Certiorari is PARTIALLY GRANTED. The assailed June 29, 2005
Decision of the Court of Appeals in CA-G.R. SP No. 87293, as well as
its December 16, 2005 Resolution, are ANNULLED with respect to
their dismissal of SEC Case No. 04-111077 on the ground of lack of
jurisdiction. The said case is ordered REINSTATED before Branch 24
of the Regional Trial Court of Manila. The rest of the assailed
issuances are AFFIRMED.
SO ORDERED.

G.R. No. 180384

March 26, 2010

LAND BANK OF THE PHILIPPINES, Petitioner,

vs.
CORAZON M. VILLEGAS, Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x

agrarian court under the Comprehensive Agrarian Reform Law of

1998.
The Courts Ruling
The RTC, Branch 32 based its order on Deputy Court Administrator
(DCA) Zenaida Elepaos opinion that single sala courts have
jurisdiction over agrarian cases involving lands located within its
territorial jurisdiction. An RTC branch acting as a special agrarian
court, she claimed, did not have expanded territorial jurisdiction. DCA
Elepao said:
x x x [B]eing a single sala court, the Regional Trial Court, Branch 64,
Guihulngan, Negros Oriental, has jurisdiction over all cases, including
agrarian cases, cognizable by the Regional Trial Court emanating from
the geographical areas within its territorial jurisdiction.
Further, the jurisdiction of the Special Agrarian Courts over agrarian
cases is co-extensive with its territorial jurisdiction. Administrative
Order No. 80 dated July 18, 1989, as amended by Administrative
Order No. 80A-90 dated February 23, 1990, did not expand the
territorial jurisdiction of the courts designated as Special Agrarian
Courts.5
Respondent Villegas6 adopts DCA Elepaos view. Villegas points out
that the designation of RTC, Branch 32 as a Special Agrarian Court did
not expand its territorial jurisdiction. Although it has been designated
Special Agrarian Court for the Province of Negros Oriental, its
jurisdiction as an RTC did not cover the whole province.

G.R. No. 180891

LAND BANK OF THE PHILIPPINES, Petitioner,
vs.
HEIRS OF CATALINO V. NOEL and PROCULA P. SY, Respondents.
DECISION
ABAD, J.:
These consolidated cases1 are about the jurisdiction of a Regional Trial
Court (RTC), acting as a Special Agrarian Court, over just
compensation cases involving agricultural lands located outside its
regular territorial jurisdiction but within the province where it is
designated as agrarian court under the Comprehensive Agrarian
Reform Law of 1988.
The Facts and the Case
Petitioner Land Bank of the Philippines (Land Bank) filed cases for
determination of just compensation against respondent Corazon M.
Villegas in Civil Case 2007-14174 and respondent heirs of Catalino V.
Noel and Procula P. Sy in Civil Case 2007-14193 before the RTC of
Dumaguete City, Branch 32, sitting as a Special Agrarian Court for the
province of Negros Oriental. Respondent Villegas property was in
Hibaiyo, Guihulngan City, Negros Oriental, while respondent heirs land
was in Nangca, Bayawan City, Negros Oriental. These lands happened
to be outside the regular territorial jurisdiction of RTC Branch 32 of
Dumaguete City.
On September 13, 2007 RTC, Branch 32 dismissed Civil Case 200714174 for lack of jurisdiction.2 It ruled that, although it had been
designated Special Agrarian Court for Negros Oriental, the designation
did not expand its territorial jurisdiction to hear agrarian cases under
the territorial jurisdiction of the RTC, Branch 64 of Guihulngan City
where respondent Villegas property can be found.
On November 16, 2007 RTC, Branch 32 also dismissed Civil Case
2007-14193 for lack of jurisdiction. It pointed out that RTC, Branch 63
of Bayawan City had jurisdiction over the case since respondent heirs
property was within the latter courts territorial jurisdiction.
Petitioner Land Bank moved for the reconsideration of the dismissal of
the two cases but RTC, Branch 32 denied both motions.3 Aggrieved,
Land Bank directly filed this petitions for certiorari4 before this Court,
raising a purely question of law.
Sole Question Presented
The sole question presented in these cases is whether or not an RTC,
acting as Special Agrarian Court, has jurisdiction over just
compensation cases involving agricultural lands located outside its
regular jurisdiction but within the province where it is designated as an

Respondent Villegas adds that, in hearing just compensation cases,

RTC, Branch 64 in Guihulngan City should be no different from the
situation of other single sala courts that concurrently hear drugs and
family-related cases even as the Supreme Court has designated family
and drugs courts in Dumaguete City within the same province. Further,
Guihulngan City is more than 100 kilometers from Dumaguete City
where RTC, Branch 32 sits. For practical considerations, RTC, Branch
64 of Guihulngan City should hear and decide the case.
For their part, on June 19, 2009 respondent heirs of Noel informed7 the
Court that petitioner Land Bank had already paid them for their land.
Consequently, they have no further interest in the outcome of the case.
It is not clear, however, if the trial court had already approved a
settlement.1avvphi1
"Jurisdiction" is the courts authority to hear and determine a case. The
courts jurisdiction over the nature and subject matter of an action is
conferred by law.8 In this case, the law that confers jurisdiction on
Special Agrarian Courts designated by the Supreme Court in every
province is Republic Act (R.A.) 6657 or the Comprehensive Agrarian
Reform Law of 1988. Sections 56 and 57 are the relevant provisions:
SEC. 56. Special Agrarian Court. - The Supreme Court shall designate
at least one (1) branch of the Regional Trial Court (RTC) within each
province to act as a Special Agrarian Court.
The Supreme Court may designate more branches to constitute such
additional Special Agrarian Courts as may be necessary to cope with
the number of agrarian cases in each province. In the designation, the
Supreme Court shall give preference to the Regional Trial Courts
which have been assigned to handle agrarian cases or whose
presiding judges were former judges of the defunct Court of Agrarian
Relations.
The Regional Trial Court (RTC) judges assigned to said courts shall
exercise said special jurisdiction in addition to the regular jurisdiction of
their respective courts.
SEC. 57. Special Jurisdiction. - The Special Agrarian Courts 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. The Rules of Court shall apply to
all proceedings before the Special Agrarian Courts unless modified by
this Act.
The Special Agrarian Courts shall decide all appropriate cases under
their special jurisdiction within thirty (30) days from submission of the
case for decision.
The law is clear. A branch of an RTC designated as a Special Agrarian
Court for a province has the original and exclusive jurisdiction over all
petitions for the determination of just compensation in that province. In
Republic v. Court of Appeals,9 the Supreme Court ruled that Special
Agrarian Courts have original and exclusive jurisdiction over two

categories of cases: (1) all petitions for the determination of just

compensation to landowners, and (2) the prosecution of all criminal
offenses under R.A. 6657.
By "special" jurisdiction, Special Agrarian Courts exercise power in
addition to or over and above the ordinary jurisdiction of the RTC, such
as taking cognizance of suits involving agricultural lands located
outside their regular territorial jurisdiction, so long as they are within
the province where they sit as Special Agrarian Courts.
R.A. 6657 requires the designation by the Supreme Court before an
RTC Branch can function as a Special Agrarian Court. The Supreme
Court has not designated the single sala courts of RTC, Branch 64 of
Guihulngan City and RTC, Branch 63 of Bayawan City as Special
Agrarian Courts. Consequently, they cannot hear just compensation
cases just because the lands subject of such cases happen to be
within their territorial jurisdiction.
Since RTC, Branch 32 of Dumaguete City is the designated Special
Agrarian Court for the province of Negros Oriental, it has jurisdiction
over all cases for determination of just compensation involving
agricultural lands within that province, regardless of whether or not
those properties are outside its regular territorial jurisdiction.
WHEREFORE, the Court GRANTS the petitions, SETS ASIDE the
orders of the Regional Trial Court, Branch 32 of Dumaguete City dated
September 13, 2007 and October 30, 2007 in Civil Case 2007-14174,
entitled Land Bank of the Philippines v. Corazon Villegas, and its
orders dated November 16, 2007 and December 14, 2007 in Civil
Case 2007-14193, entitled Land Bank of the Philippines v. Heirs of
Catalino V. Noel and Procula P. Sy, which orders dismissed the cases
before it for lack of jurisdiction. Further, the Court DIRECTS the
Regional Trial Court, Branch 32 of Dumaguete City to immediately
hear and decide the two cases unless a compromise agreement has in
the meantime been approved in the latter case.

Meanwhile, Mendoza sought the advice of the Department of the

Interior and Local Government (DILG) as to who should exercise the
powers of Punong Barangay of Balatasan given the prevailing
controversy.
In a letter dated April 11, 2008,7 DILG Undersecretary Austere A.
Panadero responded to Mendozas inquiry informing Villas that
Mendoza should occupy the post of Punong Barangay as there was no
Writ of Execution Pending Appeal of the MTC Decision dated February
23, 2008.
Nevertheless, the Bulalacao Municipal Administrator, Edezer Aceron,
by the authority of Villas, issued a letter dated April 23, 20088 to
respondent Marlon de Castro, Manager, Pinamalayan Branch, Land
Bank of the Philippines (LBP), requesting that transactions entered into
by Mendoza in behalf of Barangay Bulalacao should not be honored. In
the same letter, Aceron dismissed the DILG letter dated April 11, 2008,
saying that it is merely advisory and not binding on the municipal
government of Bulalacao and the LBP.
In response, de Castro issued Villas and Mendoza a letter dated April
24, 2008,9 advising both parties that the LBP shall not honor any
transaction with regard the accounts of Barangay Balatasan.
Thereafter, petitioners filed a Petition dated May 5, 2008 for
Mandamus with Damages and Prayer for the Writ of Preliminary
Mandatory Injunction, docketed as Special Civil Action No. 08-10
pending with the Regional Trial Court, Branch 43 in Roxas, Oriental
Mindoro. Petitioners prayed that the LBP be directed to release the
funds of Barangay Balatasan to them in order to render necessary,
basic public services to the inhabitants of the barangay.
Thus, Villas and Herato filed an Answer dated May 16, 2008
interposing the following affirmative defenses: (1) that the petition for
mandamus was defective, being directed against two or more different
entities and requiring to perform different acts; and (2) that Mendoza
does not have any clear and legal right for the writ of mandamus.

SO ORDERED.

G.R. No. 187256

March 3, 2008,6 directing all department heads of the Municipal

Government to act only on documents signed or authorized by Herato.

February 23, 2011

CONSTANCIO F. MENDOZA and SANGGUNIANG BARANGAY OF

BALATASAN, BULALACAO, ORIENTAL MINDORO, Petitioners,
vs.
MAYOR ENRILO VILLAS and BRGY. KAGAWAD LIWANAG
HERATO and MARLON DE CASTRO, Manager, Pinamalayan
Branch, Land Bank of the Philippines, Respondents.
RESOLUTION
VELASCO, JR., J.:
Before this Court is a Petition dated April 7, 20091 filed by Constancio
F. Mendoza and Sangguniang Barangay of Balatasan, Bulalacao,
Oriental Mindoro. In the Petition, it is prayed that the Court: (1) set
aside the Order dated February 2, 20092 of the Regional Trial Court
(RTC), Branch 43 in Roxas, Oriental Mindoro and its Order dated
March 17, 20093 denying petitioners motion for reconsideration of the
Order dated February 2, 2009; and (2) direct the RTC to continue with
the proceedings in Special Civil Action No. 08-10 entitled Constancio
Mendoza v. Mayor Enrilo Villas.
The factual antecedents of the case are as follows:
In the 2007 barangay elections, Mendoza obtained the highest votes
for the position of Punong Barangay of Barangay Balatasan,
Bulalacao, Oriental Mindoro, while respondent Liwanag Herato
obtained the highest number of votes for the position of Barangay
Kagawad. Notably, Mayor Enrilo Villas was the incumbent Mayor of
Bulalacao, Oriental Mindoro at the time of the barangay elections.4
After the elections, the Commission on Elections (COMELEC)
proclaimed Mendoza as the duly-elected Punong Barangay of
Balatasan. Thus, the losing candidate, Thomas Pajanel, filed a petition
for quo warranto with the Municipal Trial Court (MTC) of MansalayBulalacao which was docketed as Election Case No. 407-B. The MTC
issued a Decision dated February 23, 2008, disqualifying Mendoza and
declaring that Herato was entitled to succeed him as Punong Barangay
with Herato garnering the highest number of votes as a Barangay
Kagawad. Mendoza appealed the MTC Decision to the COMELEC.
On February 28, 2008, Villas administered the Oath of Office to
Herato.5 Then, Villas issued Memorandum No. 2008-03-010 dated

On the other hand, the LBP also filed its Answer dated June 5, 2008,
stating that its decision of withholding the barangay funds was a mere
act of prudence given the controversy surrounding the true Punong
Barangay of Balatasan while manifesting that it will release the funds
to whom the Court directs it to.
Thereafter, Villas and Herato filed a Motion to Dismiss dated
November 7, 2008. In the Motion, a copy of the COMELEC Resolution
dated September 8, 2008 in COMELEC Case No. SPA-07-243-BRGY
was attached. This case originated from a disqualification case against
Mendoza filed with the COMELEC by Senen Familara before the
conduct of the 2007 barangay elections. In the Resolution, the
COMELEC disqualified Mendoza as a candidate for Punong Barangay
of Barangay Balatasan in the 2007 barangay elections for having
already served three (3) consecutive terms for the same position. In
response, Mendoza presented a Certification dated February 27,
200910 from the COMELEC which stated that COMELEC Case No.
SPA-07-243-BRGY is still pending with the Commission.
In an attempt to clarify the issues on the matter, Mendoza again sought
the opinion of the DILG regarding the controversy. Thus, the DILG
issued another letter, denominated as DILG Opinion No. 5, Series of
2009 dated January 2009,11 reiterating its stance that the MTC
Decision dated February 23, 2008 has not yet become final and
executory.
Nevertheless, the RTC issued the assailed order dated February 2,
2009 dismissing the petition on the strength of the COMELEC
Resolution dated September 8, 2008 disqualifying Mendoza from
running in the 2007 elections. As stated, petitioners motion for
reconsideration of the Order dated February 2, 2009 was denied in an
Order dated March 17, 2009.
From such orders the petitioners went directly to this Court.
The instant petition is a direct recourse to this Court from the assailed
orders of the RTC. Notably, petitioners did not cite the rule under the
Rules of Court by which the petition was filed. If the petition is to be
treated as a petition filed under Rule 65 of the Rules of Court, the
petition must be dismissed outright for having been filed prematurely.
In Chamber of Real Estate and Builders Associations, Inc. (CREBA) v.
Secretary of Agrarian Reform,12 a petition for certiorari filed under Rule

65 was dismissed for having been filed directly with the Court, violating
the principle of hierarchy of courts, to wit:
Primarily, although this Court, the Court of Appeals and the Regional
Trial Courts have concurrent jurisdiction to issue writs of certiorari,
prohibition, mandamus, quo warranto, habeas corpus and injunction,
such concurrence does not give the petitioner unrestricted freedom of
choice of court forum. In Heirs of Bertuldo Hinog v. Melicor, citing
People v. Cuaresma, this Court made the following pronouncements:
This Courts original jurisdiction to issue writs of certiorari is not
exclusive. It is shared by this Court with Regional Trial Courts and with
the Court of Appeals. This concurrence of jurisdiction is not, however,
to be taken as according to parties seeking any of the writs an
absolute, unrestrained freedom of choice of the court to which
application therefor will be directed. There is after all a hierarchy of
courts. That hierarchy is determinative of the venue of appeals, and
also serves as a general determinant of the appropriate forum for
petitions for the extraordinary writs. A becoming regard for that judicial
hierarchy most certainly indicates that petitions for the issuance of
extraordinary writs against first level ("inferior") courts should be filed
with the Regional Trial Court, and those against the latter, with the
Court of Appeals. A direct invocation of the Supreme 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 [an] established policy. It is a policy necessary to
prevent inordinate demands upon the Courts time and attention which
are better devoted to those matters within its exclusive jurisdiction, and
to prevent further over-crowding of the Courts docket. (Emphasis
supplied.)
Similarly, there are no special and important reasons that petitioners
cite to justify their direct recourse to this Court under Rule 65.
On the other hand, direct recourse to this Court has been allowed for
petitions filed under Rule 45 when only questions of law are raised, as
in this case. Thus, the Court ruled in Barcenas v. Tomas:13
Section 1 of Rule 45 clearly states that the following may be appealed
to the Supreme Court through a petition for review by certiorari: 1)
judgments; 2) final orders; or 3) resolutions of the Court of Appeals, the
Sandiganbayan, the Regional Trial Court or similar courts, whenever
authorized by law. The appeal must involve only questions of law, not
of fact.
This Court has, time and time again, pointed out that it is not a trier of
facts; and that, save for a few exceptional instances, its function is not
to analyze or weigh all over again the factual findings of the lower
courts. There is a question of law when doubts or differences arise as
to what law pertains to a certain state of facts, and a question of fact
when the doubt pertains to the truth or falsity of alleged facts.
Under the principle of the hierarchy of courts, decisions, final orders or
resolutions of an MTC should be appealed to the RTC exercising
territorial jurisdiction over the former. On the other hand, RTC
judgments, final orders or resolutions are appealable to the CA through
either of the following: an ordinary appeal if the case was originally
decided by the RTC; or a petition for review under Rule 42, if the case
was decided under the RTC's appellate jurisdiction.
Nonetheless, a direct recourse to this Court can be taken for a review
of the decisions, final orders or resolutions of the RTC, but only on
questions of law. Under Section 5 of Article VIII of the Constitution, the
Supreme Court has the power to
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari as
the law or the Rules of Court may provide, final judgments and orders
of lower courts in:
xxxx
(e) All cases in which only an error or question of law is involved.
This kind of direct appeal to this Court of RTC judgments, final orders
or resolutions is provided for in Section 2(c) of Rule 41, which reads:
SEC. 2. Modes of appeal.
xxxx
(c) Appeal by certiorari.In all cases where only questions of law are
raised or involved, the appeal shall be to the Supreme Court by petition
for review on certiorari in accordance with Rule 45.

Procedurally then, petitioners could have appealed the RTC Decision

affirming the MTC (1) to this Court on questions of law only; or (2) if
there are factual questions involved, to the CA -- as they in fact did.
Unfortunately for petitioners, the CA properly dismissed their petition
for review because of serious procedural defects. This action
foreclosed their only available avenue for the review of the factual
findings of the RTC. (Emphasis supplied.)
Thus, the Court shall exercise liberality and consider the instant
petition as one filed under Rule 45. In Artistica Ceramica, Inc. v.
Ciudad Del Carmen Homeowners Association, Inc.,14 citing Republic v.
Court of Appeals,15 the Court noted that it has the discretion to
determine whether a petition was filed under Rule 45 or 65 of the
Rules of Court:
Admittedly, this Court, in accordance with the liberal spirit pervading
the Rules of Court and in the interest of justice, has the discretion to
treat a petition for certiorari as having been filed under Rule 45,
especially if filed within the reglementary period for filing a petition for
review.lawphi1
Nevertheless, even providing that the petition was not filed
prematurely, it must still be dismissed for having become moot and
academic.
In Gunsi, Sr. v. Commissioners, The Commission on Elections,16 the
Court defined a moot and academic case as follows:
A moot and academic case is one that ceases to present a justiciable
controversy by virtue of supervening events, so that a declaration
thereon would be of no practical value. As a rule, courts decline
jurisdiction over such case, or dismiss it on ground of mootness.
With the conduct of the 2010 barangay elections, a supervening event
has transpired that has rendered this case moot and academic and
subject to dismissal. This is because, as stated in Fernandez v.
Commission on Elections,17 "whatever judgment is reached, the same
can no longer have any practical legal effect or, in the nature of things,
can no longer be enforced." Mendozas term of office has expired with
the conduct of last years local elections. As such, Special Civil Action
No. 08-10, where the assailed Orders were issued, can no longer
prosper. Mendoza no longer has any legal standing to further pursue
the case, rendering the instant petition moot and academic.
WHEREFORE, the Petition is DENIED.
SO ORDERED.

G.R. No. 183409

June 18, 2010

CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS,

INC. (CREBA), petitioner,
vs.
THE SECRETARY OF AGRARIAN REFORM, Respondent.

unemployment and illegal squatting problems to the substantial

prejudice not only of the petitioner and its members but more so of the
whole nation.
Hence, this petition.
The Issues

DECISION
In its Memorandum, petitioner posits the following issues:
PEREZ, J.:
I.
This case is a Petition for Certiorari and Prohibition (with application for
temporary restraining order and/or writ of preliminary injunction) under
Rule 65 of the 1997 Revised Rules of Civil Procedure, filed by herein
petitioner Chamber of Real Estate and Builders Associations, Inc.
(CREBA) seeking to nullify and prohibit the enforcement of Department
of Agrarian Reform (DAR) Administrative Order (AO) No. 01-02, as
amended by DAR AO No. 05-07,1 and DAR Memorandum No. 88,2 for
having been issued by the Secretary of Agrarian Reform with grave
abuse of discretion amounting to lack or excess of jurisdiction as some
provisions of the aforesaid administrative issuances are illegal and
unconstitutional.
Petitioner CREBA, a private non-stock, non-profit corporation duly
organized and existing under the laws of the Republic of the
Philippines, is the umbrella organization of some 3,500 private
corporations, partnerships, single proprietorships and individuals
directly or indirectly involved in land and housing development, building
and infrastructure construction, materials production and supply, and
services in the various related fields of engineering, architecture,
community planning and development financing. The Secretary of
Agrarian Reform is named respondent as he is the duly appointive
head of the DAR whose administrative issuances are the subject of
this petition.
The Antecedent Facts
The Secretary of Agrarian Reform issued, on 29 October 1997, DAR
AO No. 07-97,3 entitled "Omnibus Rules and Procedures Governing
Conversion of Agricultural Lands to Non-Agricultural Uses," which
consolidated all existing implementing guidelines related to land use
conversion. The aforesaid rules embraced all private agricultural lands
regardless of tenurial arrangement and commodity produced, and all
untitled agricultural lands and agricultural lands reclassified by Local
Government Units (LGUs) into non-agricultural uses after 15 June
1988.
Subsequently, on 30 March 1999, the Secretary of Agrarian Reform
issued DAR AO No. 01-99,4 entitled "Revised Rules and Regulations
on the Conversion of Agricultural Lands to Non-agricultural Uses,"
amending and updating the previous rules on land use conversion. Its
coverage includes the following agricultural lands, to wit: (1) those to
be converted to residential, commercial, industrial, institutional and
other non-agricultural purposes; (2) those to be devoted to another
type of agricultural activity such as livestock, poultry, and fishpond
the effect of which is to exempt the land from the Comprehensive
Agrarian Reform Program (CARP) coverage; (3) those to be converted
to non-agricultural use other than that previously authorized; and (4)
those reclassified to residential, commercial, industrial, or other nonagricultural uses on or after the effectivity of Republic Act No. 66575 on
15 June 1988 pursuant to Section 206 of Republic Act No. 71607 and
other pertinent laws and regulations, and are to be converted to such
uses.
On 28 February 2002, the Secretary of Agrarian Reform issued
another Administrative Order, i.e., DAR AO No. 01-02, entitled "2002
Comprehensive Rules on Land Use Conversion," which further
amended DAR AO No. 07-97 and DAR AO No. 01-99, and repealed all
issuances inconsistent therewith. The aforesaid DAR AO No. 01-02
covers all applications for conversion from agricultural to nonagricultural uses or to another agricultural use.
Thereafter, on 2 August 2007, the Secretary of Agrarian Reform
amended certain provisions8 of DAR AO No. 01-02 by formulating DAR
AO No. 05-07, particularly addressing land conversion in time of
exigencies and calamities.
To address the unabated conversion of prime agricultural lands for real
estate development, the Secretary of Agrarian Reform further issued
Memorandum No. 88 on 15 April 2008, which temporarily suspended
the processing and approval of all land use conversion applications.
By reason thereof, petitioner claims that there is an actual slow down
of housing projects, which, in turn, aggravated the housing shortage,

WHETHER THE DAR SECRETARY HAS JURISDICTION OVER

LANDS THAT HAVE BEEN RECLASSIFIED AS RESIDENTIAL,
COMMERCIAL, INDUSTRIAL, OR FOR OTHER NONAGRICULTURAL USES.
II.
WHETHER THE DAR SECRETARY ACTED IN EXCESS OF HIS
JURISDICTION AND GRAVELY ABUSED HIS DISCRETION BY
ISSUING AND ENFORCING [DAR AO NO. 01-02, AS AMENDED]
WHICH SEEK TO REGULATE RECLASSIFIED LANDS.
III.
WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE
LOCAL AUTONOMY OF LOCAL GOVERNMENT UNITS.
IV.
WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE
DUE PROCESS AND EQUAL PROTECTION CLAUSE[S] OF THE
CONSTITUTION.
V.
WHETHER MEMORANDUM NO. 88 IS A VALID EXERCISE OF
POLICE POWER.9
The subject of the submission that the DAR Secretary gravely abused
his discretion is AO No. 01-02, as amended, which states:
Section 3. Applicability of Rules. These guidelines shall apply to all
applications for conversion, from agricultural to non-agricultural uses or
to another agricultural use, such as:
xxxx
3.4 Conversion of agricultural lands or areas that have been
reclassified by the LGU or by way of a Presidential Proclamation, to
residential, commercial, industrial, or other non-agricultural uses on or
after the effectivity of RA 6657 on 15 June 1988, x x x. [Emphasis
supplied].
Petitioner holds that under Republic Act No. 6657 and Republic Act No.
8435,10 the term agricultural lands refers to "lands devoted to or
suitable for the cultivation of the soil, planting of crops, growing of fruit
trees, raising of livestock, poultry or fish, including the harvesting of
such farm products, and other farm activities and practices performed
by a farmer in conjunction with such farming operations done by a
person whether natural or juridical, and not classified by the law as
mineral, forest, residential, commercial or industrial land." When the
Secretary of Agrarian Reform, however, issued DAR AO No. 01-02, as
amended, he included in the definition of agricultural lands "lands not
reclassified as residential, commercial, industrial or other nonagricultural uses before 15 June 1988." In effect, lands reclassified
from agricultural to residential, commercial, industrial, or other nonagricultural uses after 15 June 1988 are considered to be agricultural
lands for purposes of conversion, redistribution, or otherwise. In so
doing, petitioner avows that the Secretary of Agrarian Reform acted
without jurisdiction as he has no authority to expand or enlarge the
legal signification of the term agricultural lands through DAR AO No.
01-02. Being a mere administrative issuance, it must conform to the
statute it seeks to implement, i.e., Republic Act No. 6657, or to the
Constitution, otherwise, its validity or constitutionality may be
questioned.
In the same breath, petitioner contends that DAR AO No. 01-02, as
amended, was made in violation of Section 6511 of Republic Act No.
6657 because it covers all applications for conversion from agricultural
to non-agricultural uses or to other agricultural uses, such as the

conversion of agricultural lands or areas that have been reclassified by

the LGUs or by way of Presidential Proclamations, to residential,
commercial, industrial or other non-agricultural uses on or after 15
June 1988. According to petitioner, there is nothing in Section 65 of
Republic Act No. 6657 or in any other provision of law that confers to
the DAR the jurisdiction or authority to require that non-awarded lands
or reclassified lands be submitted to its conversion authority. Thus, in
issuing and enforcing DAR AO No. 01-02, as amended, the Secretary
of Agrarian Reform acted with grave abuse of discretion amounting to
lack or excess of jurisdiction.

Exceptional and compelling circumstances were held present in the

following cases: (a) Chavez v. Romulo,21 on citizens right to bear arms;
(b) Government of [the] United States of America v. Hon.
Purganan,22 on bail in extradition proceedings; (c) Commission on
Elections v. Judge Quijano-Padilla,23 on government contract involving
modernization and computerization of voters registration list; (d)
Buklod ng Kawaning EIIB v. Hon. Sec. Zamora,24 on status and
existence of a public office; and (e) Hon. Fortich v. Hon. Corona,25 on
the so-called "Win-Win Resolution" of the Office of the President which
modified the approval of the conversion to agro-industrial area.26

Petitioner further asseverates that Section 2.19,12 Article I of DAR AO

No. 01-02, as amended, making reclassification of agricultural lands
subject to the requirements and procedure for land use conversion,
violates Section 20 of Republic Act No. 7160, because it was not
provided therein that reclassification by LGUs shall be subject to
conversion procedures or requirements, or that the DARs approval or
clearance must be secured to effect reclassification. The said Section
2.19 of DAR AO No. 01-02, as amended, also contravenes the
constitutional mandate on local autonomy under Section 25,13 Article II
and Section 2,14 Article X of the 1987 Philippine Constitution.

In the case at bench, petitioner failed to specifically and sufficiently set

forth special and important reasons to justify direct recourse to this
Court and why this Court should give due course to this petition in the
first instance, hereby failing to fulfill the conditions set forth in Heirs of
Bertuldo Hinog v. Melicor.27 The present petition should have been
initially filed in the Court of Appeals in strict observance of the doctrine
on the hierarchy of courts. Failure to do so is sufficient cause for the
dismissal of this petition.

Petitioner similarly avers that the promulgation and enforcement of

DAR AO No. 01-02, as amended, constitute deprivation of liberty and
property without due process of law. There is deprivation of liberty and
property without due process of law because under DAR AO No. 0102, as amended, lands that are not within DARs jurisdiction are
unjustly, arbitrarily and oppressively prohibited or restricted from
legitimate use on pain of administrative and criminal penalties. More
so, there is discrimination and violation of the equal protection clause
of the Constitution because the aforesaid administrative order is
patently biased in favor of the peasantry at the expense of all other
sectors of society.
As its final argument, petitioner avows that DAR Memorandum No. 88
is not a valid exercise of police power for it is the prerogative of the
legislature and that it is unconstitutional because it suspended the land
use conversion without any basis.
The Courts Ruling
This petition must be dismissed.
Primarily, although this Court, the Court of Appeals and the Regional
Trial Courts have concurrent jurisdiction to issue writs of certiorari,
prohibition, mandamus, quo warranto, habeas corpus and injunction,
such concurrence does not give the petitioner unrestricted freedom of
choice of court forum.15 In Heirs of Bertuldo Hinog v. Melicor,16 citing
People v. Cuaresma,17 this Court made the following pronouncements:
This Court's original jurisdiction to issue writs of certiorari is not
exclusive. It is shared by this Court with Regional Trial Courts and with
the Court of Appeals. This concurrence of jurisdiction is not, however,
to be taken as according to parties seeking any of the writs an
absolute, unrestrained freedom of choice of the court to which
application therefor will be directed. There is after all a hierarchy of
courts. That hierarchy is determinative of the venue of appeals, and
also serves as a general determinant of the appropriate forum for
petitions for the extraordinary writs. A becoming regard for that judicial
hierarchy most certainly indicates that petitions for the issuance of
extraordinary writs against first level ("inferior") courts should be filed
with the Regional Trial Court, and those against the latter, with the
Court of Appeals. A direct invocation of the Supreme 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 [an] established policy. It is a policy necessary to
prevent inordinate demands upon the Courts time and attention which
are better devoted to those matters within its exclusive jurisdiction, and
to prevent further over-crowding of the Courts docket.18 (Emphasis
supplied.)
The rationale for this rule is two-fold: (a) it would be an imposition upon
the precious time of this Court; and (b) it would cause an inevitable and
resultant delay, intended or otherwise, in the adjudication of cases,
which in some instances had to be remanded or referred to the lower
court as the proper forum under the rules of procedure, or as better
equipped to resolve the issues because this Court is not a trier of
facts.19
This Court thus reaffirms the judicial policy that it will not entertain
direct resort to it unless the redress desired cannot be obtained in the
appropriate courts, and exceptional and compelling circumstances,
such as cases of national interest and of serious implications, justify
the availment of the extraordinary remedy of writ of certiorari, calling
for the exercise of its primary jurisdiction.20

Moreover, although the instant petition is styled as a Petition for

Certiorari, in essence, it seeks the declaration by this Court of the
unconstitutionality or illegality of the questioned DAR AO No. 01-02, as
amended, and Memorandum No. 88. It, thus, partakes of the nature of
a Petition for Declaratory Relief over which this Court has only
appellate, not original, jurisdiction.28 Section 5, Article VIII of the 1987
Philippine Constitution provides:
Sec. 5. The Supreme Court shall have the following powers:
(1) Exercise original jurisdiction over cases affecting
ambassadors, other public ministers and consuls, and over
petitions for certiorari, prohibition, mandamus, quo warranto,
and habeas corpus.
(2) Review, revise, reverse, modify, or affirm on appeal or
certiorari as the law or the Rules of Court may provide, final
judgments and orders of lower courts in:
(a) All cases in which the constitutionality or
validity of any treaty, international or executive
agreement, law, presidential decree, proclamation,
order, instruction, ordinance, or regulation is in
question. (Emphasis supplied.)
With that, this Petition must necessarily fail because this Court does
not have original jurisdiction over a Petition for Declaratory Relief even
if only questions of law are involved.
Even if the petitioner has properly observed the doctrine of judicial
hierarchy, this Petition is still dismissible.
The special civil action for certiorari is intended for the correction of
errors of jurisdiction only or grave abuse of discretion amounting to
lack or excess of jurisdiction. Its principal office is only to keep the
inferior court within the parameters of its jurisdiction or to prevent it
from committing such a grave abuse of discretion amounting to lack or
excess of jurisdiction.29
The essential requisites for a Petition for Certiorari under Rule 65 are:
(1) the writ is directed against a tribunal, a board, or an officer
exercising judicial or quasi-judicial functions; (2) such tribunal, board,
or officer has acted without or in excess of jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction; and (3)
there is no appeal or any plain, speedy, and adequate remedy in the
ordinary course of law.30
Excess of jurisdiction as distinguished from absence of jurisdiction
means that an act, though within the general power of a tribunal, board
or officer, is not authorized and invalid with respect to the particular
proceeding, because the conditions which alone authorize the exercise
of the general power in respect of it are wanting.31Without jurisdiction
means lack or want of legal power, right or authority to hear and
determine a cause or causes, considered either in general or with
reference to a particular matter. It means lack of power to exercise
authority.32 Grave abuse of discretion implies such capricious and
whimsical exercise of judgment as is equivalent to lack of jurisdiction
or, in other words, where the power is exercised in an arbitrary manner
by reason of passion, prejudice, or personal hostility, and it must be so
patent or gross as to amount to an evasion of a positive duty or to a
virtual refusal to perform the duty enjoined or to act at all in
contemplation of law.33

In the case before this Court, the petitioner fails to meet the abovementioned requisites for the proper invocation of a Petition for
Certiorari under Rule 65. The Secretary of Agrarian Reform in issuing
the assailed DAR AO No. 01-02, as amended, as well as
Memorandum No. 88 did so in accordance with his mandate to
implement the land use conversion provisions of Republic Act No.
6657. In the process, he neither acted in any judicial or quasi-judicial
capacity nor assumed unto himself any performance of judicial or
quasi-judicial prerogative. A Petition for Certiorari is a special civil
action that may be invoked only against a tribunal, board, or officer
exercising judicial functions. Section 1, Rule 65 of the 1997 Revised
Rules of Civil Procedure is explicit on this matter, viz.:
SECTION 1. Petition for certiorari. When any tribunal, board or
officer exercising judicial or quasi-judicial functions has acted without
or in excess of its or his jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal, nor
any plain, speedy, and adequate remedy in the ordinary course of law,
a person aggrieved thereby may file a verified petition in the proper
court, alleging the facts with certainty and praying that judgment must
be rendered annulling or modifying the proceedings of such tribunal,
board or officer.1avvphi1
A tribunal, board, or officer is said to be exercising judicial function
where it has the power to determine what the law is and what the legal
rights of the parties are, and then undertakes to determine these
questions and adjudicate upon the rights of the parties. Quasi-judicial
function, on the other hand, is "a term which applies to the actions,
discretion, etc., of public administrative officers or bodies x x x required
to investigate facts or ascertain the existence of facts, hold hearings,
and draw conclusions from them as a basis for their official action and
to exercise discretion of a judicial nature."34
Before a tribunal, board, or officer may exercise judicial or quasijudicial acts, it is necessary that there be a law that gives rise to some
specific rights of persons or property under which adverse claims to
such rights are made, and the controversy ensuing therefrom is
brought before a tribunal, board, or officer clothed with power and
authority to determine the law and adjudicate the respective rights of
the contending parties.35
The Secretary of Agrarian Reform does not fall within the ambit of a
tribunal, board, or officer exercising judicial or quasi-judicial functions.
The issuance and enforcement by the Secretary of Agrarian Reform of
the questioned DAR AO No. 01-02, as amended, and Memorandum
No. 88 were done in the exercise of his quasi-legislative and
administrative functions and not of judicial or quasi-judicial functions. In
issuing the aforesaid administrative issuances, the Secretary of
Agrarian Reform never made any adjudication of rights of the parties.
As such, it can never be said that the Secretary of Agrarian Reform
had acted with grave abuse of discretion amounting to lack or excess
of jurisdiction in issuing and enforcing DAR AO No. 01-02, as
amended, and Memorandum No. 88 for he never exercised any judicial
or quasi-judicial functions but merely his quasi-legislative and
administrative functions.
Furthermore, as this Court has previously discussed, the instant
petition in essence seeks the declaration by this Court of the
unconstitutionality or illegality of the questioned DAR AO No. 01-02, as
amended, and Memorandum No. 88. Thus, the adequate and proper
remedy for the petitioner therefor is to file a Petition for Declaratory
Relief, which this Court has only appellate and not original jurisdiction.
It is beyond the province of certiorari to declare the aforesaid
administrative issuances unconstitutional and illegal because certiorari
is confined only to the determination of the existence of grave abuse of
discretion amounting to lack or excess of jurisdiction. Petitioner cannot
simply allege grave abuse of discretion amounting to lack or excess of
jurisdiction and then invoke certiorari to declare the aforesaid
administrative issuances unconstitutional and illegal. Emphasis must
be given to the fact that the writ of certiorari dealt with in Rule 65 of the
1997 Revised Rules of Civil Procedure is a prerogative writ, never
demandable as a matter of right, "never issued except in the exercise
of judicial discretion."36
At any rate, even if the Court will set aside procedural infirmities, the
instant petition should still be dismissed.
Executive Order No. 129-A37 vested upon the DAR the responsibility of
implementing the CARP. Pursuant to the said mandate and to ensure
the successful implementation of the CARP, Section 5(c) of the said
executive order authorized the DAR to establish and promulgate
operational policies, rules and regulations and priorities for agrarian
reform implementation. Section 4(k) thereof authorized the DAR to
approve or disapprove the conversion, restructuring or readjustment of
agricultural lands into non-agricultural uses. Similarly, Section 5(l) of
the same executive order has given the DAR the exclusive authority to

approve or disapprove conversion of agricultural lands for residential,

commercial, industrial, and other land uses as may be provided for by
law. Section 7 of the aforesaid executive order clearly provides that
"the authority and responsibility for the exercise of the mandate of the
[DAR] and the discharge of its powers and functions shall be vested in
the Secretary of Agrarian Reform x x x."
Under DAR AO No. 01-02, as amended, "lands not reclassified as
residential, commercial, industrial or other non-agricultural uses before
15 June 1988" have been included in the definition of agricultural
lands. In so doing, the Secretary of Agrarian Reform merely acted
within the scope of his authority stated in the aforesaid sections of
Executive Order No. 129-A, which is to promulgate rules and
regulations for agrarian reform implementation and that includes the
authority to define agricultural lands for purposes of land use
conversion. Further, the definition of agricultural lands under DAR AO
No. 01-02, as amended, merely refers to the category of agricultural
lands that may be the subject for conversion to non-agricultural uses
and is not in any way confined to agricultural lands in the context of
land redistribution as provided for under Republic Act No. 6657.
More so, Department of Justice Opinion No. 44, Series of 1990, which
Opinion has been recognized in many cases decided by this Court,
clarified that after the effectivity of Republic Act No. 6657 on 15 June
1988 the DAR has been given the authority to approve land
conversion.38 Concomitant to such authority, therefore, is the authority
to include in the definition of agricultural lands "lands not reclassified
as residential, commercial, industrial or other non-agricultural uses
before 15 June 1988" for purposes of land use conversion.
In the same vein, the authority of the Secretary of Agrarian Reform to
include "lands not reclassified as residential, commercial, industrial or
other non-agricultural uses before 15 June 1988" in the definition of
agricultural lands finds basis in jurisprudence. In Ros v. Department of
Agrarian Reform,39 this Court has enunciated that after the passage of
Republic Act No. 6657, agricultural lands, though reclassified, have to
go through the process of conversion, jurisdiction over which is vested
in the DAR. However, agricultural lands, which are already reclassified
before the effectivity of Republic Act No. 6657 which is 15 June 1988,
are exempted from conversion.40 It bears stressing that the said date of
effectivity of Republic Act No. 6657 served as the cut-off period for
automatic reclassifications or rezoning of agricultural lands that no
longer require any DAR conversion clearance or authority.41 It
necessarily follows that any reclassification made thereafter can be the
subject of DARs conversion authority. Having recognized the DARs
conversion authority over lands reclassified after 15 June 1988, it can
no longer be argued that the Secretary of Agrarian Reform was
wrongfully given the authority and power to include "lands not
reclassified as residential, commercial, industrial or other nonagricultural uses before 15 June 1988" in the definition of agricultural
lands. Such inclusion does not unduly expand or enlarge the definition
of agricultural lands; instead, it made clear what are the lands that can
be the subject of DARs conversion authority, thus, serving the very
purpose of the land use conversion provisions of Republic Act No.
6657.
The argument of the petitioner that DAR AO No. 01-02, as amended,
was made in violation of Section 65 of Republic Act No. 6657, as it
covers even those non-awarded lands and reclassified lands by the
LGUs or by way of Presidential Proclamations on or after 15 June
1988 is specious. As explained in Department of Justice Opinion No.
44, series of 1990, it is true that the DARs express power over land
use conversion provided for under Section 65 of Republic Act No. 6657
is limited to cases in which agricultural lands already awarded have,
after five years, ceased to be economically feasible and sound for
agricultural purposes, or the locality has become urbanized and the
land will have a greater economic value for residential, commercial or
industrial purposes. To suggest, however, that these are the only
instances that the DAR can require conversion clearances would open
a loophole in Republic Act No. 6657 which every landowner may use to
evade compliance with the agrarian reform program. It should logically
follow, therefore, from the said departments express duty and function
to execute and enforce the said statute that any reclassification of a
private land as a residential, commercial or industrial property, on or
after the effectivity of Republic Act No. 6657 on 15 June 1988 should
first be cleared by the DAR.42
This Court held in Alarcon v. Court of Appeals43 that reclassification of
lands does not suffice. Conversion and reclassification differ from each
other. Conversion is the act of changing the current use of a piece of
agricultural land into some other use as approved by the DAR while
reclassification is the act of specifying how agricultural lands shall be
utilized for non-agricultural uses such as residential, industrial, and
commercial, as embodied in the land use plan, subject to the
requirements and procedures for land use conversion. In view thereof,
a mere reclassification of an agricultural land does not automatically
allow a landowner to change its use. He has to undergo the process of

conversion before he is permitted to use the agricultural land for other

purposes.44
It is clear from the aforesaid distinction between reclassification and
conversion that agricultural lands though reclassified to residential,
commercial, industrial or other non-agricultural uses must still undergo
the process of conversion before they can be used for the purpose to
which they are intended.
Nevertheless, emphasis must be given to the fact that DARs
conversion authority can only be exercised after the effectivity of
Republic Act No. 6657 on 15 June 1988.45 The said date served as the
cut-off period for automatic reclassification or rezoning of agricultural
lands that no longer require any DAR conversion clearance or
authority.46 Thereafter, reclassification of agricultural lands is already
subject to DARs conversion authority. Reclassification alone will not
suffice to use the agricultural lands for other purposes. Conversion is
needed to change the current use of reclassified agricultural lands.
It is of no moment whether the reclassification of agricultural lands to
residential, commercial, industrial or other non-agricultural uses was
done by the LGUs or by way of Presidential Proclamations because
either way they must still undergo conversion process. It bears
stressing that the act of reclassifying agricultural lands to nonagricultural uses simply specifies how agricultural lands shall be
utilized for non-agricultural uses and does not automatically convert
agricultural lands to non-agricultural uses or for other purposes. As
explained in DAR Memorandum Circular No. 7, Series of 1994, cited in
the 2009 case of Roxas & Company, Inc. v. DAMBA-NFSW and the
Department of Agrarian Reform,47 reclassification of lands denotes
their allocation into some specific use and providing for the manner of
their utilization and disposition or the act of specifying how agricultural
lands shall be utilized for non-agricultural uses such as residential,
industrial, or commercial, as embodied in the land use plan. For
reclassified agricultural lands, therefore, to be used for the purpose to
which they are intended there is still a need to change the current use
thereof through the process of conversion. The authority to do so is
vested in the DAR, which is mandated to preserve and maintain
agricultural lands with increased productivity. Thus, notwithstanding the
reclassification of agricultural lands to non-agricultural uses, they must
still undergo conversion before they can be used for other purposes.
Even reclassification of agricultural lands by way of Presidential
Proclamations to non-agricultural uses, such as school sites, needs
conversion clearance from the DAR. We reiterate that reclassification
is different from conversion. Reclassification alone will not suffice and
does not automatically allow the landowner to change its use. It must
still undergo conversion process before the landowner can use such
agricultural lands for such purpose.48 Reclassification of agricultural
lands is one thing, conversion is another. Agricultural lands that are
reclassified to non-agricultural uses do not ipso facto allow the
landowner thereof to use the same for such purpose. Stated differently,
despite having reclassified into school sites, the landowner of such
reclassified agricultural lands must apply for conversion before the
DAR in order to use the same for the said purpose.
Any reclassification, therefore, of agricultural lands to residential,
commercial, industrial or other non-agricultural uses either by the
LGUs or by way of Presidential Proclamations enacted on or after 15
June 1988 must undergo the process of conversion, despite having
undergone reclassification, before agricultural lands may be used for
other purposes.
It is different, however, when through Presidential Proclamations public
agricultural lands have been reserved in whole or in part for public use
or purpose, i.e., public school, etc., because in such a case,
conversion is no longer necessary. As held in Republic v.
Estonilo,49 only a positive act of the President is needed to segregate
or reserve a piece of land of the public domain for a public purpose. As
such, reservation of public agricultural lands for public use or purpose
in effect converted the same to such use without undergoing any
conversion process and that they must be actually, directly and
exclusively used for such public purpose for which they have been
reserved, otherwise, they will be segregated from the reservations and
transferred to the DAR for distribution to qualified beneficiaries under
the CARP.50 More so, public agricultural lands already reserved for
public use or purpose no longer form part of the alienable and
disposable lands of the public domain suitable for agriculture. 51Hence,
they are outside the coverage of the CARP and it logically follows that
they are also beyond the conversion authority of the DAR.
Clearly from the foregoing, the Secretary of Agrarian Reform did not
act without jurisdiction or in excess of jurisdiction or with grave abuse
of discretion amounting to lack or excess of jurisdiction in (1) including
lands not reclassified as residential, commercial, industrial or other
non-agricultural uses before 15 June 1988 in the definition of

agricultural lands under DAR AO No. 01-02, as amended, and; (2)

issuing and enforcing DAR AO No. 01-02, as amended, subjecting to
DARs jurisdiction for conversion lands which had already been
reclassified as residential, commercial, industrial or for other nonagricultural uses on or after 15 June 1988.
Similarly, DAR AO No. 01-02, as amended, providing that the
reclassification of agricultural lands by LGUs shall be subject to the
requirements of land use conversion procedure or that DARs approval
or clearance must be secured to effect reclassification, did not violate
the autonomy of the LGUs.
Section 20 of Republic Act No. 7160 states that:
SECTION 20. Reclassification of Lands. (a) A city or municipality
may, through an ordinance passed by the sanggunian after conducting
public hearings for the purpose, authorize the reclassification of
agricultural lands and provide for the manner of their utilization or
disposition in the following cases: (1) when the land ceases to be
economically feasible and sound for agricultural purposes as
determined by the Department of Agriculture or (2) where the land shall
have substantially greater economic value for residential, commercial,
or industrial purposes, as determined by the sanggunian concerned:
Provided, That such reclassification shall be limited to the following
percentage of the total agricultural land area at the time of the passage
of the ordinance:
xxxx
(3) For fourth to sixth class municipalities, five percent (5%): Provided,
further, That agricultural lands distributed to agrarian reform
beneficiaries pursuant to Republic Act Numbered Sixty-six hundred
fifty-seven (R.A. No. 6657), otherwise known as "The Comprehensive
Agrarian Reform Law," shall not be affected by the said reclassification
and the conversion of such lands into other purposes shall be
governed by Section 65 of said Act.
xxxx
(e) Nothing in this Section shall be construed as repealing, amending,
or modifying in any manner the provisions of R.A. No. 6657.
The aforequoted provisions of law show that the power of the LGUs to
reclassify agricultural lands is not absolute. The authority of the DAR to
approve conversion of agricultural lands covered by Republic Act No.
6657 to non-agricultural uses has been validly recognized by said
Section 20 of Republic Act No. 7160 by explicitly providing therein that,
"nothing in this section shall be construed as repealing or modifying in
any manner the provisions of Republic Act No. 6657."
DAR AO No. 01-02, as amended, does not also violate the due
process clause, as well as the equal protection clause of the
Constitution. In providing administrative and criminal penalties in the
said administrative order, the Secretary of Agrarian Reform simply
implements the provisions of Sections 73 and 74 of Republic Act No.
6657, thus:
Sec. 73. Prohibited Acts and Omissions. The following are prohibited:
xxxx
(c) The conversion by any landowner of his agricultural land into any
non-agricultural use with intent to avoid the application of this Act to his
landholdings and to disposes his tenant farmers of the land tilled by
them;
xxxx
(f) The sale, transfer or conveyance by a beneficiary of the right to use
or any other usufructuary right over the land he acquired by virtue of
being a beneficiary, in order to circumvent the provisions of this Act.
xxxx
Sec. 74. Penalties. Any person who knowingly or willfully violates the
provisions of this Act shall be punished by imprisonment of not less
than one (1) month to not more than three (3) years or a fine of not
less than one thousand pesos (P1,000.00) and not more than fifteen
thousand pesos (P15,000.00), or both, at the discretion of the court.
If the offender is a corporation or association, the officer responsible
therefor shall be criminally liable.

And Section 11 of Republic Act No. 8435, which specifically provides:

Sec. 11. Penalty for Agricultural Inactivity and Premature Conversion.
x x x.
Any person found guilty of premature or illegal conversion shall be
penalized with imprisonment of two (2) to six (6) years, or a fine
equivalent to one hundred percent (100%) of the government's
investment cost, or both, at the discretion of the court, and an
accessory penalty of forfeiture of the land and any improvement
thereon.
In addition, the DAR may impose the following penalties, after
determining, in an administrative proceedings, that violation of this law
has been committed:
a. Consolation or withdrawal of the authorization for land use
conversion; and
b. Blacklisting, or automatic disapproval of pending and
subsequent conversion applications that they may file with
the DAR.
Contrary to petitioners assertions, the administrative and criminal
penalties provided for under DAR AO No. 01-02, as amended, are

imposed upon the illegal or premature conversion of lands within

DARs jurisdiction, i.e., "lands not reclassified as residential,
commercial, industrial or for other non-agricultural uses before 15 June
1998."
The petitioners argument that DAR Memorandum No. 88 is
unconstitutional, as it suspends the land use conversion without any
basis, stands on hollow ground.
It bears emphasis that said Memorandum No. 88 was issued upon the
instruction of the President in order to address the unabated
conversion of prime agricultural lands for real estate development
because of the worsening rice shortage in the country at that time.
Such measure was made in order to ensure that there are enough
agricultural lands in which rice cultivation and production may be
carried into. The issuance of said Memorandum No. 88 was made
pursuant to the general welfare of the public, thus, it cannot be argued
that it was made without any basis.
WHEREFORE, premises considered, the instant Petition for Certiorari
is DISMISSED. Costs against petitioner.
SO ORDERED.