assignment no. 4 cases.docx

8/10/2019 ASSIGNMENT NO. 4 CASES.docx

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SPECIAL FIRST DIVISION

[ G.R. No. 192649, June 22, 2011 ]

HOME GUARANTY CORPORATION, PETITIONER, VS. R-II BUILDERS INC. AND NATIONAL HOUSING

AUTHORITY, RESPONDENTS.

R E S O L U T I O N

PEREZ, J.:

Before the Court are: (a) the Entry of Appearance filed by Atty. Lope E. Feble of the Toquero Exconde

Manalang Feble Law Offices as collaborating counsel for respondent R-II Builders, Inc. (R-II Builders), with

prayer to be furnished all pleadings, notices and other court processes at its given address; and (b) the

motion filed by R-II Builders, seeking the reconsideration of Court's decision dated 9 March 2011 on the

following grounds: [1]

I

THE HONORABLE COURT ERRED IN RULING THAT RTC MANILA, BRANCH 22, HAD NO JURISDICTION OVER

THE PRESENT CASE SINCE RTC-MANILA, BRANCH 24, TO WHICH THE INSTANT CASE WAS INITIALLY

RAFFLED HAD NO AUTHORITY TO HEAR THE CASE BEING A SPECIAL COMMERCIAL COURT.

II.

THE HONORABLE COURT ERRED IN RULING THAT THE CORRECT DOCKET FEES WERE NOT PAID.

In urging the reversal of the Court's decision, R-II Builders argues that it filed its complaint with the Manila

RTC which is undoubtedly vested with jurisdiction over actions where the subject matter is incapable of

pecuniary estimation; that through no fault of its own, said complaint was raffled to Branch 24, the

designated Special Commercial Court (SCC) tasked to hear intra-corporate controversies; that despite the

determination subsequently made by Branch 24 of the Manila RTC that the case did not involve an intra-

corporate dispute, the Manila RTC did not lose jurisdiction over the same and its Executive Judge correctly

directed its re-raffling to Branch 22 of the same Court; that the re-raffle and/or amendment of pleadings do

not affect a court's jurisdiction which, once acquired, continues until the case is finally terminated; that

since its original Complaint, Amended and Supplemental Complaint and Second Amended Complaint all

primarily sought the nullification of the Deed of Assignment and Conveyance (DAC) transferring the Asset

Pool in favor of petitioner Home Guaranty Corporation (HGC), the subject matter of the case is clearly one

which is incapable of pecuniary estimation; and, that the court erred in holding that the case was a real

action and that it evaded the payment of the correct docket fees computed on the basis of the assessed

value of the realties in the Asset Pool.

R-II Builders' motion is bereft of merit.

The record shows that, with the raffle of R-II Builders' complaint before Branch 24 of the Manila RTC and


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said court's grant of the application for temporary restraining order incorporated therein, HGC sought a

preliminary hearing of its affirmative defenses which included, among other grounds, lack of jurisdiction

and improper venue. It appears that, at said preliminary hearing, it was established that R-II Builders'

complaint did not involve an intra-corporate dispute and that, even if it is, venue was improperly laid since

none of the parties maintained its principal office in Manila. While it is true, therefore, that R-II Builders

had no hand in the raffling of the case, it cannot be gainsaid that Branch 24 of the RTC Manila had no

jurisdiction over the case. Rather than ordering the dismissal of the complaint, however, said court issued

the 2 January 2008 order erroneously ordering the re-raffle of the case. InAtwel v. Concepcion Progressive

Association, Inc.[2]and Reyes v. Hon. Regional Trial Court of Makati, Branch 142[3]which involved SCCs

trying and/or deciding cases which were found to be civil in nature, this Court significantly ordered the

dismissal of the complaintfor lack of jurisdictioninstead of simply directing the re-raffle of the case to

another branch.

Even then, the question of the Manila RTC's jurisdiction over the case is tied up with R-II Builder's payment

of the correct docket fees which should be paid in full upon the filing of the pleading or other applicationwhich initiates an action or proceeding. [4]While it is, consequently, true that jurisdiction, once acquired,

cannot be easily ousted, [5]it is equally settled that a court acquires jurisdiction over a case only upon the

payment of the prescribed filing and docket fees. [6]Already implicit from the filing of the complaint in the

City of Manila where the realties comprising the Asset Pool are located, the fact that the case is a real

action is evident from the allegations of R-II Builders' original Complaint, Amended and Supplemental

Complaint and Second Amended Complaint which not only sought the nullification of the DAC in favor of

HGC but, more importantly, prayed for the transfer of possession of and/or control of the properties in the

Asset Pool. Its current protestations to the contrary notwithstanding, no less than R-II Builders - in its

opposition to HGC's motion to dismiss - admitted that the case is a real action as it affects title to or

possession of real property or an interest therein. [7]Having only paid docket fees corresponding to anaction where the subject matter is incapable of pecuniary estimation, R-II Builders cannot expediently claim

that jurisdiction over the case had already attached.

InDe Leon v. Court of Appeals, [8]this Court had, of course, ruled that a case for rescission or annulment of

contract is not susceptible of pecuniary estimation although it may eventually result in the recovery of real

property. Taking into consideration the allegations and the nature of the relief sought in the complaint in

the subsequent case of Serrano v. Delica, [9]however, this Court determined the existence of a real action

and ordered the payment of the appropriate docket fees for a complaint for cancellation of sale which

prayed for both permanent and preliminary injunction aimed at the restoration of possession of the land in

litigation is a real action. In discounting the apparent conflict in said rulings, the Court went on to rule as

follows inRuby Shelter Builders and Realty Development Corporation v. Hon. Pablo C, Formaran, [10]to wit:

The Court x x x does not perceive a contradiction between Serranoand the Spouses De Leon. The Court calls

attention to the following statement in Spouses De Leon: "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." Necessarily, the determination must be done on a case-to-case basis, depending

on the facts and circumstances of each. What petitioner conveniently ignores is that in Spouses De Leon,

the action therein that private respondents instituted before the RTC was "solely for annulment or

rescission" of the contract of sale over a real property. There appeared to be no transfer of title or

possession to the adverse party x x x. (Underscoring Supplied)


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Having consistently sought the transfer of possession and control of the properties comprising the Asset

Pool over and above the nullification of the Deed of Conveyance in favor of HGC, it follows R-II Builders

should have paid the correct and appropriate docket fees, computed according to the assessed value

thereof. This much was directed in the 19 May 2008 Order issued by Branch 22 of the Manila RTC which

determined that the case is a real action andadmitted the Amended and Supplemental Complaint R-II

Builders subsequently filed in the case. [11]In obvious evasion of said directive to pay the correct docket

fees, however, R-II Builders withdrew its Amended and Supplemental Complaint and, in lieu thereof, filed

its Second Amended Complaint which, while deleting its causes of action for accounting and conveyance of

title to and/or possession of the entire Asset Pool, nevertheless prayed for its appointment as Receiver of

the properties comprising the same. In the landmark case of Manchester Development Corporation v. Court

of Appeals, [12]this Court ruled that jurisdiction over any case is acquired only upon the payment of the

prescribed docket fee which is both mandatory and jurisdictional. Although it is true that the Manchester

Ruledoes not apply despite insufficient filing fees when there is no intent to defraud the government, [13]R-

II Builders' evident bad faith should clearly foreclose the relaxation of said rule.

In addition to the jurisdictional and pragmatic aspects underlying the payment of the correct docket fees

which have already been discussed in the decision sought to be reconsidered, it finally bears emphasizing

that the Asset Pool is comprised of government properties utilized by HGC as part of its sinking fund, in

pursuit of its mandate as statutory guarantor of government housing programs. With the adverse

consequences that could result from the transfer of possession and control of the Asset Pool, it is

imperative that R-II Builders should be made to pay the docket and filing fees corresponding to the

assessed value of the properties comprising the same.

WHEREFORE, the Court resolves to:

(a) NOTEthe Entry of Appearance of Atty. Lope E. Feble of Tuquero Exconde Manalang Feble Law Offices as

collaborating counsel for respondent R-II Builders, Inc.; and DENYcounsel's prayer to be furnished with all

pleadings notices and other court processes at Unit 2704-A, West Tower, Philippine Stock Exchange Centre,

Exchange Road, Ortigas Center Pasig, since only the lead counsel is entitled to service of court processes;

(b) DENYwith FINALITY R-II Builders, Inc.'s Motion for Reconsideration of the Decision dated 9 March 2011

for lack of merit, the basic issues having been already passed upon and there being no substantial

argument to warrant a modification of the same. No further pleadings or motions shall be entertained

herein.

Let an Entry of Judgment in this case be made in due course.

SO ORDERED.

Corona, C.J., (Chairperson), Leonardo De-Castro, and Peralta,*JJ., concur.

Velasco, Jr., J., I dissent. (pls. see dissenting opinion.)


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FIRST DIVISION

[ G.R. No. 173915, February 22, 2010 ]

IRENE SANTE AND REYNALDO SANTE, PETITIONERS, VS. HON. EDILBERTO T. CLARAVALL, IN HIS CAPACITY

AS PRESIDING JUDGE OF BRANCH 60, REGIONAL TRIAL COURT OF BAGUIO CITY, AND VITA N. KALASHIAN,RESPONDENTS.

D E C I S I O N

VILLARAMA, JR., J.:

Before this Court is a petition for certiorari [1]under Rule 65 of the 1997 Rules of Civil Procedure, as

amended, filed by petitioners Irene and Reynaldo Sante assailing the Decision [2]dated January 31, 2006

and the Resolution [3]dated June 23, 2006 of the Seventeenth Division of the Court of Appeals in CA-G.R. SP

No. 87563. The assailed decision affirmed the orders of the Regional Trial Court (RTC) of Baguio City, Branch

60, denying their motion to dismiss the complaint for damages filed by respondent Vita Kalashian against

them.

The facts, culled from the records, are as follows:

On April 5, 2004, respondent filed before the RTC of Baguio City a complaint for damages [4]against

petitioners. In her complaint, docketed as Civil Case No. 5794-R, respondent alleged that while she was

inside the Police Station of Natividad, Pangasinan, and in the presence of other persons and police officers,

petitioner Irene Sante uttered words, which when translated in English are as follows, "How many roundsof sex did you have last night with your boss, Bert? You fuckin' bitch!" Bert refers to Albert Gacusan,

respondent's friend and one (1) of her hired personal security guards detained at the said station and who

is a suspect in the killing of petitioners' close relative. Petitioners also allegedly went around Natividad,

Pangasinan telling people that she is protecting and cuddling the suspects in the aforesaid killing. Thus,

respondent prayed that petitioners be held liable to pay moral damages in the amount of P300,000.00;

P50,000.00 as exemplary damages; P50,000.00 attorney's fees; P20,000.00 litigation expenses; and costs of

suit.

Petitioners filed a Motion to Dismiss [5]on the ground that it was the Municipal Trial Court in Cities (MTCC)

and not the RTC of Baguio, that had jurisdiction over the case. They argued that the amount of the claim formoral damages was not more than the jurisdictional amount of P300,000.00, because the claim for

exemplary damages should be excluded in computing the total claim.

On June 24, 2004, [6]the trial court denied the motion to dismiss citing our ruling in Movers-Baseco

Integrated Port Services, Inc. v. Cyborg Leasing Corporation. [7]The trial court held that the total claim of

respondent amounted to P420,000.00 which was above the jurisdictional amount for MTCCs outside Metro

Manila. The trial court also later issued Orders on July 7, 2004 [8]and July 19, 2004, [9]respectively

reiterating its denial of the motion to dismiss and denying petitioners' motion for reconsideration.

Aggrieved, petitioners filed on August 2, 2004, a Petition for Certiorari and Prohibition, [10]docketed as CA-

G.R. SP No. 85465, before the Court of Appeals. Meanwhile, on July 14, 2004, respondent and her husband


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filed an Amended Complaint [11]increasing the claim for moral damages from P300,000.00 to

P1,000,000.00. Petitioners filed a Motion to Dismiss with AnswerAd Cautelamand Counterclaim, but the

trial court denied their motion in an Order [12]dated September 17, 2004.

Hence, petitioners again filed a Petition for Certiorari and Prohibition [13]before the Court of Appeals,

docketed as CA-G.R. SP No. 87563, claiming that the trial court committed grave abuse of discretion in

allowing the amendment of the complaint to increase the amount of moral damages from P300,000.00 to

P1,000,000.00. The case was raffled to the Seventeenth Division of the Court of Appeals.

On January 23, 2006, the Court of Appeals, Seventh Division, promulgated a decision in CA-G.R. SP No.

85465, as follows:

WHEREFORE, finding grave abuse of discretion on the part of [the] Regional Trial Court of Baguio, Branch

60, in rendering the assailed Orders dated June 24, 2004 and July [19], 2004 in Civil Case No. 5794-R the

instant petition for certiorari is GRANTED. The assailed Orders are herebyANNULLED and SET ASIDE. Civil

Case No. 5794-R for damages is ordered DISMISSED for lack of jurisdiction.

SO ORDERED. [14]

The Court of Appeals held that the case clearly falls under the jurisdiction of the MTCC as the allegations

show that plaintiff was seeking to recover moral damages in the amount of P300,000.00, which amount

was well within the jurisdictional amount of the MTCC. The Court of Appeals added that the totality of

claim rule used for determining which court had jurisdiction could not be applied to the instant case

because plaintiff's claim for exemplary damages was not a separate and distinct cause of action from her

claim of moral damages, but merely incidental to it. Thus, the prayer for exemplary damages should be

excluded in computing the total amount of the claim.

On January 31, 2006, the Court of Appeals, this time in CA-G.R. SP No. 87563, rendered a decision affirming

the September 17, 2004 Order of the RTC denying petitioners' Motion to DismissAd Cautelam. In the said

decision, the appellate court held that the total or aggregate amount demanded in the complaint

constitutes the basis of jurisdiction. The Court of Appeals did not find merit in petitioners' posture that the

claims for exemplary damages and attorney's fees are merely incidental to the main cause and should not

be included in the computation of the total claim.

The Court of Appeals additionally ruled that respondent can amend her complaint by increasing the

amount of moral damages from P300,000.00 to P1,000,000.00, on the ground that the trial court has

jurisdiction over the original complaint and respondent is entitled to amend her complaint as a matter of

right under the Rules.

Unable to accept the decision, petitioners are now before us raising the following issues:

I.

WHETHER OR NOT THERE WAS GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF

JURISDICTION ON THE PART OF THE (FORMER) SEVENTEENTH DIVISION OF THE HONORABLE COURT OF


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APPEALS WHEN IT RESOLVED THAT THE REGIONAL TRIAL COURT OF BAGUIO CITY BRANCH 60 HAS

JURISDICTION OVER THE SUBJECT MATTER OF THE CASE FOR DAMAGES AMOUNTING TO P300,000.00;

II.

WHETHER OR NOT THERE WAS GRAVE ABUSE OF DISCRETION ON THE PART OF THE HONORABLE

RESPONDENT JUDGE OF THE REGIONAL TRIAL COURT OF BAGUIO BRANCH 60 FOR ALLOWING THE

COMPLAINANT TO AMEND THE COMPLAINT (INCREASING THE AMOUNT OF DAMAGES TO 1,000,000.00 TO

CONFER JURISDICTION OVER THE SUBJECT MATTER OF THE CASE DESPITE THE PENDENCY OF A PETITION

FOR CERTIORARI FILED AT THE COURT OF APPEALS, SEVENTH DIVISION, DOCKETED AS CA G.R. NO. 85465.[15]

In essence, the basic issues for our resolution are:

1) Did the RTC acquire jurisdiction over the case? and

2) Did the RTC commit grave abuse of discretion in allowing the amendment of the complaint?

Petitioners insist that the complaint falls under the exclusive jurisdiction of the MTCC. They maintain that

the claim for moral damages, in the amount of P300,000.00 in the original complaint, is the main action.

The exemplary damages being discretionary should not be included in the computation of the jurisdictional

amount. And having no jurisdiction over the subject matter of the case, the RTC acted with grave abuse of

discretion when it allowed the amendment of the complaint to increase the claim for moral damages in

order to confer jurisdiction.

In her Comment, [16]respondent averred that the nature of her complaint is for recovery of damages. As

such, the totality of the claim for damages, including the exemplary damages as well as the other damages

alleged and prayed in the complaint, such as attorney's fees and litigation expenses, should be included in

determining jurisdiction. The total claim being P420,000.00, the RTC has jurisdiction over the complaint.

We deny the petition, which although denominated as a petition for certiorari, we treat as a petition for

review on certiorari under Rule 45 in view of the issues raised.

Section 19(8) of BatasPambansaBlg. 129, [17]as amended by Republic Act No. 7691, [18]states:

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

x x x x

(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

abovementioned items exceeds Two hundred thousand pesos (P200,000.00).


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Section 5 of Rep. Act No. 7691 further provides:

SEC. 5. After five (5) years from the effectivity of this Act, the jurisdictional amounts mentioned in Sec.

19(3), (4), and (8); and Sec. 33(1) of Batas Pambansa Blg. 129 as amended by this Act, shall be adjusted to

Two hundred thousand pesos (P200,000.00). Five (5) years thereafter, such jurisdictional amounts shall beadjusted further to Three hundred thousand pesos (P300,000.00): Provided, however, That in the case of

Metro Manila, the abovementioned jurisdictional amounts shall be adjusted after five (5) years from the

effectivity of this Act to Four hundred thousand pesos (P400,000.00).

Relatedly, Supreme Court Circular No. 21-99 was issued declaring that the first adjustment in jurisdictional

amount of first level courts outside of Metro Manila from P100,000.00 to P200,000.00 took effect on

March 20, 1999. Meanwhile, the second adjustment from P200,000.00 to P300,000.00 became effective on

February 22, 2004 in accordance with OCA Circular No. 65-2004 issued by the Office of the Court

Administrator on May 13, 2004.

Based on the foregoing, there is no question that at the time of the filing of the complaint on April 5, 2004,

the MTCC's jurisdictional amount has been adjusted to P300,000.00.

But where damages is the main cause of action, should the amount of moral damages prayed for in the

complaint be the sole basis for determining which court has jurisdiction or should the total amount of all

the damages claimed regardless of kind and nature, such as exemplary damages, nominal damages, and

attorney's fees, etc., be used?

In this regard, Administrative Circular No. 09-94 [19]is instructive:

x x x x

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. 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.(Emphasis ours.)

In the instant case, the complaint filed in Civil Case No. 5794-R is for the recovery of damages for the

alleged malicious acts of petitioners. The complaint principally sought an award of moral and exemplary

damages, as well as attorney's fees and litigation expenses, for the alleged shame and injury suffered by

respondent by reason of petitioners' utterance while they were at a police station in Pangasinan. It is

settled that jurisdiction is conferred by law based on the facts alleged in the complaintsince the latter

comprises a concise statement of the ultimate facts constituting the plaintiff's causes of action. [20]It is

clear, based on the allegations of the complaint, that respondent's main action is for damages. Hence, the

other forms of damages being claimed by respondent, e.g., exemplary damages, attorney's fees and

litigation expenses, are not merely incidental to or consequences of the main action but constitute the

primary relief prayed for in the complaint.


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In Mendoza v. Soriano, [21]it was held that 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. In the said case, the respondent's claim of P929,000.06 in damages and P25,000 attorney's

fees plus P500 per court appearance was held to represent the monetary equivalent for compensation of

the alleged injury. The Court therein held that the total amount of monetary claims including the claims for

damages was the basis to determine the jurisdictional amount.

Also, in Iniego v. Purganan, [22]the Court has held:

The amount of damages claimed is within the jurisdiction of the RTC, since it is the claim for all kinds of

damages that is the basis of determining the jurisdiction of courts, whether the claims for damages arise

from the same or from different causes of action.

x x x x

Considering that the total amount of damages claimed was P420,000.00, the Court of Appeals was correct

in ruling that the RTC had jurisdiction over the case.

Lastly, we find no error, much less grave abuse of discretion, on the part of the Court of Appeals in

affirming the RTC's order allowing the amendment of the original complaint from P300,000.00 to

P1,000,000.00 despite the pendency of a petition for certiorari filed before the Court of Appeals. While it is

a basic jurisprudential principle that an amendment cannot be allowed when the court has no jurisdiction

over the original complaint and the purpose of the amendment is to confer jurisdiction on the court, [23]

here, the RTC clearly had jurisdiction over the original complaint and amendment of the complaint was

then still a matter of right. [24]

WHEREFORE, the petition is DENIED, for lack of merit. The Decision and Resolution of the Court of Appeals

dated January 31, 2006 and June 23, 2006, respectively, are AFFIRMED. The Regional Trial Court of Baguio

City, Branch 60 is DIRECTEDto continue with the trial proceedings in Civil Case No. 5794-R with deliberate

dispatch.

No costs.

SO ORDERED.


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SECOND DIVISION

[ G.R. No. 182980, June 22, 2011 ]

BIENVENIDO CASTILLO, PETITIONER, VS. REPUBLIC OF THE PHILIPPINES, RESPONDENT.

D E C I S I O N

CARPIO, J.:

The Case

Petitioner Bienvenido Castillo (Bienvenido) filed the present petition for review on certiorari[1]of the

Decision[2]dated 23 October 2007 as well as the Resolution[3]dated 7 May 2008 of the Court of Appeals

(appellate court) in CA-G.R. CV No. 81916. The appellate court reversed the Decision[4]

dated 3 October2003 of Branch 22, Regional Trial Court of Malolos, Bulacan (trial court) in P-111-2002. The trial court

ordered the reconstitution of the original copy of Transfer Certificate of Title (TCT) No. T-16755 as well as

the issuance of another owner's duplicate copy, in the name of the registered owner and in the same terms

and conditions as the original, in lieu of the lost original copy.

The Facts

Bienvenido filed on 7 March 2002 a Petition for Reconstitution and Issuance of Second Owner's Copy of

Transfer Certificate of Title No. T-16755. The petition reads as follows:

1. That petitioner is of legal age, Filipino, widower and with residence and postal address at Poblacion,

Pulilan, Bulacan;

2. That petitioner is the registered owner of a parcel of land situated at Paltao, Pulilan, Bulacan covered by

Transfer Certificate of Title No. T-16755, a zerox [sic] copy of which is hereto attached as Annex "A";

3. That the zerox [sic] copy of technical description and subdivision plan of the parcel of land with an area

of 50,199 [square meters] (Lot 6-A) are hereto attached as Annexes "B" and "C";

4. That the original copy of the said certificate of title on file with the Register of Deeds of Bulacan was lost

and/or destroyed during the fire on March 7, 1987 in the Office of the Register of Deeds of Bulacan,

certification from the said office is hereto attached as Annex "D";

5. That, the owner's copy of the said certificate of title was likewise lost and all efforts to locate the same

proved futile and in vain, copy of the the [sic] "Affidavit of Loss" is hereto attached as Annex "E";

6. That no co-owner's copy of duplicate of the same certificate has been issued;

7. The names and addresses of the boundary owners of said lot are the following:


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a. West - Jorge Peralta

b. North - Lorenzo Calderon

c. South - Lorenzo Calderon

d. East - Melvin & Marlon Reyes

with postal address at Poblacion, Pulilan, Bulacan;

8. That said property has been declared for taxation purposes under Tax Declaration No. 97-19001-00019,

zerox [sic] copy of which is hereto attached as Annex "F";

9. That the real estate tax for the current year has been paid per official receipt no. 0287074, zerox [sic]

copy of which is hereto attached as Annex "G";

10. That said property is free from all liens and encumbrances;

11. That there exist no deeds or instruments affecting the said property which has been presented for and

pending registration with the Register of Deeds of Bulacan;

WHEREFORE, it is most respectfully prayed of this Honorable Court that after due notice and hearing

judgment be rendered:

1. Declaring the Original Owner's Duplicate Certificate of Title No. T-16755 that was lost as null and void;

2. Ordering the Register of Deeds of Bulacan to issue second owner's duplicate copy of the said certificateof title upon payment of proper fees.[5]

The trial court furnished the Land Registration Authority (LRA) with a duplicate copy of Bienvenido's

petition and its Annexes, with a note stating that "No Tracing Cloth of Plan [sic] and Blue print of plan

attached."[6]As requested by the LRA in its letter dated 17 April 2002,[7]the trial court ordered Bienvenido

to submit within 15 days from receipt of the order (a) the original of the technical description of the parcel

of land covered by the lost/destroyed certificate of title, certified by the authorized officer of the Land

Management Bureau/Land Registration Authority and two duplicate copies thereof, and (b) the sepia film

plan of the subject parcel of land prepared by a duly licensed Geodetic Engineer, who shall certify thereonthat its preparation was made on the basis of a certified technical description, and two blue print copies

thereof.[8]Bienvenido complied with the order.[9]

The trial court, in an order dated 7 August 2002, ordered Bienvenido to supply the names and addresses of

the occupants of the subject property.[10]Bienvenido manifested that there is no actual occupant in the

subject property.[11]

On 4 October 2002, the trial court issued an order which found Bienvenido's petition sufficient in form and

substance and set the same for hearing.[12]

Copies of the 4 October 2002 order were posted on three bulletin boards: at the Bulacan Provincial Capitol

Building, at the Pulilan Municipal Building, and at the Bulacan Regional Trial Court.[13]The 4 October 2002


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Exhibit "F" - Photocopy of TCT No. T-16755

Exhibit "G" - Blueprint of the subject property

Exhibit "H" - Technical description of the property

Exhibit "I" - Affidavit of Loss executed by Bienvenido Castillo

Exhibit "I-1" - Entry of the Affidavit of Loss in the book of the Register of Deeds

Exhibit "J" - Certification issued by the Office of the Register of Deeds, Malolos, Bulacan that TCT No. T-

16755 was burned in a fire on 7 March 1987

Exhibit "K" - Tax declaration

Exhibit "L" - 2002 Real Estate Tax Receipt

Upon presentation of the photocopy of TCT No. T-16755, Fernando stated that the title was issued in the

names of his parents, Bienvenido Castillo and Felisa Cruz (Felisa), and that his mother died in 1982.

Fernando did not mention any sibling. Fernando further testified that on 6 February 2002, Bienvenido

executed an Affidavit of Loss which stated that he misplaced the owner's copy of the certificate of title

sometime in April 1993 and that all efforts to locate the same proved futile. The title is free from all liens

and encumbrances, and there are no other persons claiming interest over the land.[17]

The LRA submitted a Report dated 25 July 2003, portions of which the trial court quoted in its Decision. The

LRA stated that:

(2) The plan and technical description of Lot 6-A of the subdivision plan Psd-37482 were verified correct by

this Authority to represent the aforesaid lot and the same have been approved under (LRA) PR-03-00321-R

pursuant to the provisions of Section 12 of Republic Act No. 26.

WHEREFORE, the foregoing information anent the lot in question is respectfully submitted for

consideration in the resolution of the instant petition, and if the Honorable Court, after notice and hearing,

finds justification pursuant to Section 15 of Republic Act No. 26 to grant the same, the plan and technicaldescription having been approved, may be used as basis for the inscription of the technical description on

the reconstituted certificate. Provided, however, that in case the petition is granted, the reconstituted title

should be made subject to such encumbrances as may be subsisting; and provided further, that no

certificate of title covering the same parcel of land exists in the office of the Register of Deeds

concerned.[18]

The Trial Court's Ruling

On 3 October 2003, the trial court promulgated its Decision in favor of Bienvenido. The trial court found

valid justifications to grant Bienvenido's petition as the same is in order and meritorious.


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The dispositive portion reads:

WHEREFORE, the Register of Deeds for the province of Bulacan is hereby ordered, upon payment of the

prescribed fees, to reconstitute the original copy of Original Certificate of Title No. 16755 and to issue

another owner's duplicate copy thereof, in the name of the registered owner and in the same terms andconditions as the original thereof, pursuant to the provisions of R.A. No. 26, as amended by P.D. No. 1529,

in lieu of the lost original copy. The new original copy shall in all respects be accorded the same validity and

legal effect as the lost original copy for all intents and purposes. Provided, that no certificate of title

covering the same parcel of land exists in the office of the Register of Deeds concerned.

SO ORDERED.[19]

The Office of the Solicitor General (OSG) filed its Notice of Appeal on 18 November 2003. The OSG stated

that it was grave error for the trial court to order reconstitution despite absence of any prayer seeking suchrelief in the petition and on the basis of a mere photocopy of TCT No. T-16755. Counsel for Bienvenido filed

a motion for early resolution on 25 January 2006.

The Appellate Court's Ruling

On 23 October 2007, the appellate court rendered its Decision which reversed the 3 October 2003 Decision

of the trial court. Bienvenido's counsel withdrew from the case on 11 October 2007 and was substituted by

Mondragon and Montoya Law Offices.

The appellate court ruled that even if Bienvenido failed to specifically include a prayer for the

reconstitution of TCT No. T-16755, the petition is captioned as "In re: Petition for Reconstitution and

Issuance of Second Owner's Copy of Transfer Certificate of Title No. T-16755, Bienvenido Castillo,

Petitioner." The prayer for "such other reliefs and remedies just and proper under the premises" is broad

and comprehensive enough to justify the extension of a remedy different from that prayed for.

However, the appellate court still ruled that the trial court erred in ordering the reconstitution of the

original copy of TCT No. T-16755 and the issuance of another owner's duplicate copy thereof in the name of

the registered owner. Section 3 of Republic Act No. 26 specified the order of sources from which transfer

certificates of title may be reconstituted, and Bienvenido failed to comply with the order. Moreover, thedocumentary evidences presented before the trial court were insufficient to support reconstitution. The

loss of the original copy on file with the Registry of Deeds of Bulacan may be credible, but Bienvenido failed

to adequately explain the circumstances which led to the loss of the owner's copy. The tax declaration

presented is not a conclusive evidence of ownership, but merely indicates possession. The plan and

technical description of the property are merely additional documents that must accompany the petition

for the LRA's verification and approval.

The dispositive portion of the appellate court's Decision reads:

WHEREFORE, the instant appeal is GRANTED. The assailed Decision dated October 3, 2003 of Branch 22,RTC of Malolos, Bulacan in P-111-2002 is hereby SET ASIDE and a new judgment is entered dismissing the

Petition therein.


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SO ORDERED.[20]

On 3 December 2007, Bienvenido's counsel filed a Motion for Reconsideration and/or for New Trial.[21]The

motion asserted that Bienvenido presented sufficient documents to warrant reconstitution of TCT No. T-16755. Aside from the photocopy of TCT No. T-16755, Fernando presented the plan and technical

description approved by the LRA. Moreover, to support the Motion for New Trial, Fernando went through

Bienvenido's papers and found the Deed of Absolute Sale[22]from the original owner, Elpidio Valencia, to

spouses Bienvenido and Felisa. Fernando also found the cancellation of mortgage[23]of the property

covered by TCT No. T-16755 issued by the Development Bank of the Philippines. Fernando also submitted a

copy of the Extra-Judicial Partition[24]by and among the heirs of his mother. The property covered by TCT

No. T-16755 was partitioned among Bienvenido, Fernando, and Fernando's siblings Emma Castillo Bajet

(Emma) and Elpidio Castillo (Elpidio).

In Fernando's affidavit attached to the Motion for Reconsideration and/or for New Trial, Fernando stated,

but without presenting any proof, that Bienvenido passed away at the age of 91 on 14 February 2006.

The Republic, through the OSG, opposed the Motion for Reconsideration and/or for New Trial. Bienvenido's

petition failed to satisfy Section 3(f) of R.A. No. 26. The Affidavit of Loss is hearsay because Bienvenido

failed to affirm it in court. Therefore, the loss of the owner's duplicate copy of TCT No. T-16755 is not

established. The plan and technical description approved by the LRA are not independent sources of

reconstitution and are mere supporting documents. The documents submitted in support of the Motion for

New Trial are not newly discovered, but could have been discovered earlier by exercise of due diligence.

In its Resolution[25]dated 7 May 2008, the appellate court denied the Motion for Reconsideration and/or

for New Trial.

Issues

The following were assigned as errors of the appellate court:

I. The Honorable Court of Appeals erred in holding that the documentary evidence presented by petitioner

in the lower court are insufficient to support the reconstitution prayed for.

II. The Honorable Court of Appeals erred in finding that petitioner failed to establish the circumstances

which led to the loss of his duplicate owner's copy of TCT No. T-16755.

III. The Honorable Court of Appeals erred in finding that there is no merit in the motion for new trial filed by

petitioner.[26]

The Court's Ruling


15/96

The petition must fail. There can be no reconstitution as the trial court never acquired jurisdiction over the

present case.

Process of Reconstitution of

Transfer Certificates of Title under R.A. No. 26

Section 3 of R.A. No. 26 enumerates the sources from which transfer certificates of title shall be

reconstituted. Section 3 reads:

Sec. 3. Transfer certificates of title shall be reconstituted from such of the sources hereunder enumerated

as may be available, in the following order:

(a) The owner's duplicate of the certificate of title;

(b) The co-owner's, mortgagee's, or lessee's duplicate of the certificate of title;

(c) A certified copy of the certificate of title, previously issued by the register of deeds or by a legal

custodian thereof;

(d) The deed of transfer or other document, on file in the registry of deeds, containing the description of

the property, or an authenticated copy thereof, showing that its original had been registered, and pursuant

to which the lost or destroyed transfer certificate of title was issued;

(e) A document, on file in the registry of deeds, by which the property, the description of which is given insaid document, is mortgaged, leased, or encumbered, or an authenticated copy of said document showing

that its original had been registered; and

(f) Any other document which, in the judgment of the court, is sufficient and proper basis for reconstituting

the lost or destroyed certificate of title.

Bienvenido already admitted that he cannot comply with Section 3(a) to 3(e), and that 3(f) is his last

recourse. Bienvenido, through Fernando's testimony, presented a photocopy of TCT No. T-16755 before the

trial court. The owner's original duplicate copy was lost, while the original title on file with the Register ofDeeds of Malolos, Bulacan was burned in a fire on 7 March 1987. The property was neither mortgaged nor

leased at the time of Bienvenido's loss of the owner's original duplicate copy.

Section 12 of R.A. No. 26 describes the requirements for a petition for reconstitution. Section 12 reads:

Sec. 12. Petitions for reconstitution from sources enumerated in Sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d),

and/or 3(f) of this Act, shall be filed with the proper Court of First Instance, by the registered owner, his

assigns, or any person having an interest in the property. The petition shall state or contain, among other

things, the following: (a) that the owner's duplicate of the certificate of title had been lost or destroyed; (b)

that no co-owner's, mortgagee's, or lessee's duplicate had been issued, or, if any had been issued, the samehad been lost or destroyed; (c) the location and boundaries of the property; (d) the nature and description

of the building or improvements, if any, which do not belong to the owner of the land, and the names and


16/96

addresses of the owners of such buildings or improvements; (e) the names and addresses of the occupants

or persons in possession of the property, of the owners of the adjoining properties and of all persons who

may have any interest in the property; (f) a detailed description of the encumbrances, if any, affecting the

property; and (g) a statement that no deeds or other instruments affecting the property have been

presented for registration, or if there be any, the registration thereof has not been accomplished, as yet. All

the documents, or authenticated copies thereof, to be introduced in evidence in support to the petition for

reconstitution shall be attached thereto and filed with the same: Provided, That in case the reconstitution is

to be made exclusively from sources enumerated in Section 2(f) or 3(f) of this Act, the petition shall be

further accompanied with a plan and technical description of the property duly approved by the Chief of

the General Land Registration office (now Commission of Land Registration) or with a certified copy of the

description taken from a prior certificate of title covering the same property.

We compared the requirements of Section 12 to the allegations in Bienvenido's petition. Bienvenido's

petition complied with items (a), (b), (f) and (g): in paragraph 5 of the petition, he alleged the loss of his

copy of TCT No. T-16755; paragraph 6 declared that no co-owner's copy of the duplicate title has been

issued; paragraph 10 stated that the property covered by the lost TCT is free from liens and encumbrances;

and paragraph 11 stated that there are no deeds or instruments presented for or pending registration with

the Register of Deeds. There was substantial compliance as to item (c): the location of the property is

mentioned in paragraph 2; while the boundaries of the property, although not specified in the petition,

refer to an annex attached to the petition. The petition did not mention anything pertaining to item (d).

There was a failure to fully comply with item (e). By Fernando's admission, there exist two other co-owners

of the property covered by TCT No. T-16755. Fernando's siblings Emma and Elpidio were not mentioned

anywhere in the petition.

Section 13 of R.A. No. 26 prescribes the requirements for a notice of hearing of the petition:

Sec. 13. The court shall cause a notice of the petition, filed under the preceding section, to be published, at

the expense of the petitioner, twice in successive issues of the Official Gazette, and to be posted on the

main entrance of the provincial building and of the municipal building of the municipality or city in which

the land is situated, at least thirty days prior to the date of hearing. The court shall likewise cause a copy of

the notice to be sent, by registered mail or otherwise, at the expense of the petitioner, to every person

named therein whose address is known, at least thirty days prior to the date of the hearing. Said notice

shall state, among other things, the number of the lost or destroyed certificate of title, if known, the name

of the registered owner, the names of the occupants or persons in possession of the property, the ownersof the adjoining properties and all other interested parties, the location area and boundaries of the

property, and the date on which all persons having any interest therein must appear and file their claim or

objections to the petition. The petitioner shall, at the hearing, submit proof of the publication, posting and

service of the notice as directed by the court.

The trial court's 4 October 2002 Order was indeed posted in the places mentioned in Section 13, and

published twice in successive issues of the Official Gazette: Volume 99, Number 2 dated 13 January 2003

and Volume 99, Number 3 dated 20 January 2003. The last issue was released by the National Printing

Office on 21 January 2003.[27]

The notice, however, did not state Felisa as a registered co-owner. Neitherdid the notice identify Fernando's siblings Emma and Elpidio as interested parties.


17/96

The non-compliance with the requirements prescribed in Sections 12 and 13 of R.A. No. 26 is fatal. Hence,

the trial court did not acquire jurisdiction over the petition for reconstitution. We cannot stress enough

that our jurisprudence is replete with rulings regarding the mandatory character of the requirements of

R.A. No. 26. As early as 1982, we ruled:

Republic Act No. 26 entitled "An act providing a special procedure for the reconstitution of TorrensCertificates of Title lost or destroyed" approved on September 25, 1946 confers jurisdiction or authority to

the Court of First Instance to hear and decide petitions for judicial reconstitution. The Act specifically

provides the special requirements and mode of procedure that must be followed before the court can

properly act, assume and acquire jurisdiction or authority over the petition and grant the reconstitution

prayed for. These requirements and procedure are mandatory. The Petition for Reconstitution must allege

certain specific jurisdictional facts; the notice of hearing must be published in the Official Gazette and

posted in particular places and the same sent or notified to specified persons. Sections 12 and 13 of the Act

provide specifically the mandatory requirements and procedure to be followed.[28]

We cannot simply dismiss these defects as "technical." Liberal construction of the Rules of Court does not

apply to land registration cases.[29]Indeed, to further underscore the mandatory character of these

jurisdictional requirements, the Rules of Court do not apply to land registration cases.[30]In all cases where

the authority of the courts to proceed is conferred by a statute, and when the manner of obtaining

jurisdiction is prescribed by a statute, the mode of proceeding is mandatory, and must be strictly complied

with, or the proceeding will be utterly void.[31]When the trial court lacks jurisdiction to take cognizance of a

case, it lacks authority over the whole case and all its aspects.[32]All the proceedings before the trial court,

including its order granting the petition for reconstitution, are void for lack of jurisdiction.[33]

WHEREFORE, we DENYthe petition. We AFFIRM the Decision dated 23 October 2007 and the Resolution

dated 7 May 2008 of the Court of Appeals in CA-G.R. CV No. 81916.

SO ORDERED.


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FIRST DIVISION

[ G.R. No. 174975, January 20, 2009 ]

LUISA KHO MONTAER, ALEJANDRO MONTAER, JR., LILLIBETH MONTAER-BARRIOS, AND RHODORA

ELEANOR MONTAER-DALUPAN, PETITIONERS, VS. SHARI'A DISTRICT COURT, FOURTH SHARI'A JUDICIALDISTRICT, MARAWI CITY, LILING DISANGCOPAN, AND ALMAHLEEN LILING S. MONTAER, RESPONDENTS.

D E C I S I O N

PUNO, C.J.:

This Petition for Certiorariand Prohibition seeks to set aside the Orders of the Shari'a District Court, Fourth

Shari'a Judicial District, Marawi City, dated August 22, 2006[1]and September 21, 2006.[2]

On August 17, 1956, petitioner Luisa Kho Montaer, a Roman Catholic, married Alejandro Montaer, Sr. at

the Immaculate Conception Parish in Cubao, Quezon City.[3]Petitioners Alejandro Montaer, Jr., Lillibeth

Montaer-Barrios, and Rhodora Eleanor Montaer-Dalupan are their children.[4]On May 26, 1995,

Alejandro Montaer, Sr. died.[5]

On August 19, 2005, private respondents Liling Disangcopan and her daughter, Almahleen Liling S.

Montaer, both Muslims, filed a "Complaint" for the judicial partition of properties before the Shari'a

District Court.[6]The said complaint was entitled "Almahleen Liling S. Montaer and Liling M. Disangcopan

v. the Estates and Properties of Late Alejandro Montaer, Sr., Luisa Kho Montaer, Lillibeth K. Montaer,

Alejandro Kho Montaer, Jr., and Rhodora Eleanor K. Montaer," and docketed as "Special Civil Action No.7-05."[7]In the said complaint, private respondents made the following allegations: (1) in May 1995,

Alejandro Montaer, Sr. died; (2) the late Alejandro Montaer, Sr. is a Muslim; (3) petitioners are the first

family of the decedent; (4) Liling Disangcopan is the widow of the decedent; (5) Almahleen Liling S.

Montaer is the daughter of the decedent; and (6) the estimated value of and a list of the properties

comprising the estate of the decedent.[8]Private respondents prayed for the Shari'a District Court to order,

among others, the following: (1) the partition of the estate of the decedent; and (2) the appointment of an

administrator for the estate of the decedent.[9]

Petitioners filed an Answer with a Motion to Dismiss mainly on the following grounds: (1) the Shari'a

District Court has no jurisdiction over the estate of the late Alejandro Montaer, Sr., because he was aRoman Catholic; (2) private respondents failed to pay the correct amount of docket fees; and (3) private

respondents' complaint is barred by prescription, as it seeks to establish filiation between Almahleen Liling

S. Montaer and the decedent, pursuant to Article 175 of the Family Code.[10]

On November 22, 2005, the Shari'a District Court dismissed the private respondents' complaint. The district

court held that Alejandro Montaer, Sr. was not a Muslim, and its jurisdiction extends only to the

settlement and distribution of the estate of deceased Muslims.[11]

On December 12, 2005, private respondents filed a Motion for Reconsideration.[12]On December 28, 2005,

petitioners filed an Opposition to the Motion for Reconsideration, alleging that the motion for

reconsideration lacked a notice of hearing.[13]On January 17, 2006, the Shari'a District Court denied


19/96

petitioners' opposition.[14]Despite finding that the said motion for reconsideration "lacked notice of

hearing," the district court held that such defect was cured as petitioners "were notified of the existence of

the pleading," and it took cognizance of the said motion.[15]The Shari'a District Court also reset the hearing

for the motion for reconsideration.[16]

In its first assailed order dated August 22, 2006, the Shari'a District Court reconsidered its order of dismissal

dated November 22, 2005.[17]The district court allowed private respondents to adduce further evidence.[18]

In its second assailed order dated September 21, 2006, the Shari'a District Court ordered the continuation

of trial, trial on the merits, adducement of further evidence, and pre-trial conference.[19]

Seeking recourse before this Court, petitioners raise the following issues:

I.

RESPONDENT SHARI'A DISTRICT COURT - MARAWI CITY LACKS JURISDICTION OVER PETITIONERS WHO AREROMAN CATHOLICS AND NON-MUSLIMS.

II.

RESPONDENT SHARI'A DISTRICT COURT - MARAWI CITY DID NOT ACQUIRE JURISDICTION OVER "THE

ESTATES AND PROPERTIES OF THE LATE ALEJANDRO MONTAER, SR." WHICH IS NOT A NATURAL OR

JURIDICAL PERSON WITH CAPACITY TO BE SUED.

III.

RESPONDENT SHARI'A DISTRICT COURT DID NOT ACQUIRE JURISDICTION OVER THE COMPLAINT OF

PRIVATE RESPONDENTS AGAINST PETITIONERS DUE TO NON-PAYMENT OF THE FILING AND DOCKETING

FEES.

IV.

RESPONDENT SHARI'A DISTRICT COURT--MARAWI CITY COMMITTED GRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK OF JURISDICTION WHEN IT DENIED THE OPPOSITION OF PETITIONERS AND THENGRANTED THE MOTION FOR RECONSIDERATION OF RESPONDENTS LILING DISANGCOPAN, ET AL. WHICH

WAS FATALLY DEFECTIVE FOR LACK OF A "NOTICE OF HEARING."

V.

RESPONDENT SHARI'A DISTRICT COURT--MARAWI CITY COMMITTED GRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK OF JURISDICTION WHEN IT SET SPL. CIVIL ACTION 7-05 FOR TRIAL EVEN IF THE

COMPLAINT PLAINLY REVEALS THAT RESPONDENT ALMAHLEEN LILING S. MONTAER SEEKS RECOGNITION

FROM ALEJANDRO MONTAER, SR. WHICH CAUSE OF ACTION PRESCRIBED UPON THE DEATH OF

ALEJANDRO MONTAER, SR. ON MAY 26, 1995.


20/96

In their Comment to the Petition for Certiorari, private respondents stress that the Shari'a District Court

must be given the opportunity to hear and decide the question of whether the decedent is a Muslim in

order to determine whether it has jurisdiction.[20]

Jurisdiction: Settlement of the Estate of Deceased Muslims

Petitioners' first argument, regarding the Shari'a District Court's jurisdiction, is dependent on a question of

fact, whether the late Alejandro Montaer, Sr. is a Muslim. Inherent in this argument is the premise that

there has already been a determination resolving such a question of fact. It bears emphasis, however, that

the assailed orders did notdetermine whether the decedent is a Muslim. The assailed orders did, however,

set a hearing for the purpose of resolving this issue.

Article 143(b) of Presidential Decree No. 1083, otherwise known as the Code of Muslim Personal Laws of

the Philippines, provides that the Shari'a District Courts have exclusive original jurisdiction over the

settlement of the estate of deceased Muslims:

ARTICLE 143. Original jurisdiction. -- (1) The Shari'a District Court shall have exclusive original jurisdiction

over:

x x x x

(b) All cases involving disposition, distribution and settlement of the estate of deceased Muslims, probate

of wills, issuance of letters of administration or appointment of administrators or executors regardless of

the nature or the aggregate value of the property.

The determination of the nature of an action or proceeding is controlled by the averments and character of

the relief sought in the complaint or petition.[21]The designation given by parties to their own pleadings

does not necessarily bind the courts to treat it according to the said designation. Rather than rely on "a

falsa descriptioor defective caption," courts are "guided by the substantive averments of the pleadings."[22]

Although private respondents designated the pleading filed before the Shari'a District Court as a

"Complaint" for judicial partition of properties, it is a petition for the issuance of letters of administration,

settlement, and distribution of the estate of the decedent. It contains sufficient jurisdictional facts required

for the settlement of the estate of a deceased Muslim,[23]such as the fact of Alejandro Montaer, Sr.'s

death as well as the allegation that he is a Muslim. The said petition also contains an enumeration of thenames of his legal heirs, so far as known to the private respondents, and a probable list of the properties

left by the decedent, which are the very properties sought to be settled before a probate court.

Furthermore, the reliefs prayed for reveal that it is the intention of the private respondents to seek judicial

settlement of the estate of the decedent.[24]These include the following: (1) the prayer for the partition of

the estate of the decedent; and (2) the prayer for the appointment of an administrator of the said estate.

We cannot agree with the contention of the petitioners that the district court does not have jurisdiction

over the case because of an allegation in their answer with a motion to dismiss that Montaer, Sr. is not a

Muslim. Jurisdiction of a court over the nature of the action and its subject matter does not depend upon

the defenses set forth in an answer[25]or a motion to dismiss.[26]Otherwise, jurisdiction would dependalmost entirely on the defendant[27]or result in having "a case either thrown out of court or its proceedings

unduly delayed by simple stratagem.[28]Indeed, the "defense of lack of jurisdiction which is dependent on a


21/96

question of fact does not render the court to lose or be deprived of its jurisdiction."[29]

The same rationale applies to an answer with a motion to dismiss.[30]In the case at bar, the Shari'a District

Court is not deprived of jurisdiction simply because petitioners raised as a defense the allegation that the

deceased is not a Muslim. The Shari'a District Court has the authority to hear and receive evidence to

determine whether it has jurisdiction, which requires an a prioridetermination that the deceased is a

Muslim. If after hearing, the Shari'a District Court determines that the deceased was not in fact a Muslim,

the district court should dismiss the case for lack of jurisdiction.

Special Proceedings

The underlying assumption in petitioners' second argument, that the proceeding before the Shari'a District

Court is an ordinary civil action against a deceased person, rests on an erroneous understanding of the

proceeding before the court a quo. Part of the confusion may be attributed to the proceeding before the

Shari'a District Court, where the parties were designated either as plaintiffs or defendants and the case wasdenominated as a special civil action. We reiterate that the proceedings before the court a quoare for the

issuance of letters of administration, settlement, and distribution of the estate of the deceased, which is a

special proceeding. Section 3(c) of the Rules of Court (Rules) defines a special proceeding as "a remedy by

which a party seeks to establish a status, a right, or a particular fact." This Court has applied the Rules,

particularly the rules on special proceedings, for the settlement of the estate of a deceased Muslim.[31]In a

petition for the issuance of letters of administration, settlement, and distribution of estate, the applicants

seek to establish the fact of death of the decedent and later to be duly recognized as among the decedent's

heirs, which would allow them to exercise their right to participate in the settlement and liquidation of the

estate of the decedent.[32]Here, the respondents seek to establish the fact of Alejandro Montaer, Sr.'s

death and, subsequently, for private respondent Almahleen Liling S. Montaer to be recognized as amonghis heirs, if such is the case in fact.

Petitioners' argument, that the prohibition against a decedent or his estate from being a party defendant in

a civil action[33]applies to a special proceeding such as the settlement of the estate of the deceased, is

misplaced. Unlike a civil action which has definite adverse parties, a special proceeding has no definite

adverse party. The definitions of a civil action and a special proceeding, respectively, in the Rules illustrate

this difference. A civil action, in which "a party sues another for the enforcement or protection of a right, or

the prevention or redress of a wrong" [34]necessarily has definite adverse parties, who are either the

plaintiff or defendant.[35]On the other hand, a special proceeding, "by which a party seeks to establish a

status, right, or a particular fact,"[36]has one definite party, who petitions or applies for a declaration of a

status, right, or particular fact, but no definite adverse party. In the case at bar, it bears emphasis that the

estate of the decedent is not being sued for any cause of action. As a special proceeding, the purpose of the

settlement of the estate of the decedent is to determine all the assets of the estate,[37]pay its liabilities,[38]

and to distribute the residual to those entitled to the same.[39]

Docket Fees

Petitioners' third argument, that jurisdiction was not validly acquired for non-payment of docket fees, is

untenable. Petitioners point to private respondents' petition in the proceeding before the court a quo,which contains an allegation estimating the decedent's estate as the basis for the conclusion that what

private respondents paid as docket fees was insufficient. Petitioners' argument essentially involves two


22/96

aspects: (1) whether the clerk of court correctly assessed the docket fees; and (2) whether private

respondents paid the correct assessment of the docket fees.

Filing the appropriate initiatory pleading and the payment of the prescribed docket fees vest a trial court

with jurisdiction over the subject matter.[40]If the party filing the case paid less than the correct amount for

the docket fees because that was the amount assessed by the clerk of court, the responsibility of making a

deficiency assessment lies with the same clerk of court.[41]In such a case, the lower court concerned will

not automatically lose jurisdiction, because of a party's reliance on the clerk of court's insufficient

assessment of the docket fees.[42]As "every citizen has the right to assume and trust that a public officer

charged by law with certain duties knows his duties and performs them in accordance with law," the party

filing the case cannot be penalized with the clerk of court's insufficient assessment.[43]However, the party

concerned will be required to pay the deficiency.[44]

In the case at bar, petitioners did not present the clerk of court's assessment of the docket fees. Moreover,

the records do not include this assessment. There can be no determination of whether private respondentscorrectly paid the docket fees without the clerk of court's assessment.

Exception to Notice of Hearing

Petitioners' fourth argument, that private respondents' motion for reconsideration before the Shari'a

District Court is defective for lack of a notice of hearing, must fail as the unique circumstances in the

present case constitute an exception to this requirement. The Rules require every written motion to be set

for hearing by the applicant and to address the notice of hearing to all parties concerned.[45]The Rules also

provide that "no written motion set for hearing shall be acted upon by the court without proof of service

thereof."[46]However, the Rules allow a liberal construction of its provisions "in order to promote [the]objective of securing a just, speedy, and inexpensive disposition of every action and proceeding."[47]

Moreover, this Court has upheld a liberal construction specifically of the rules of notice of hearing in cases

where "a rigid application will result in a manifest failure or miscarriage of justice especially if a party

successfully shows that the alleged defect in the questioned final and executory judgment is not apparent

on its face or from the recitals contained therein."[48]In these exceptional cases, the Court considers that

"no party can even claim a vested right in technicalities," and for this reason, cases should, as much as

possible, be decided on the merits rather than on technicalities.[49]

The case at bar falls under this exception. To deny the Shari'a District Court of an opportunity to determine

whether it has jurisdiction over a petition for the settlement of the estate of a decedent alleged to be a

Muslim would also deny its inherent power as a court to control its process to ensure conformity with the

law and justice. To sanction such a situation simply because of a lapse in fulfilling the notice requirement

will result in a miscarriage of justice.

In addition, the present case calls for a liberal construction of the rules on notice of hearing, because the

rights of the petitioners were not affected. This Court has held that an exception to the rules on notice of

hearing is where it appears that the rights of the adverse party were not affected.[50]The purpose for the

notice of hearing coincides with procedural due process,[51]for the court to determine whether the adverse

party agrees or objects to the motion, as the Rules do not fix any period within which to file a reply oropposition.[52]In probate proceedings, "what the law prohibits is not the absence of previousnotice, but

the absolute absence thereof and lack of opportunity to be heard."[53]In the case at bar, as evident from


23/96

the Shari'a District Court's order dated January 17, 2006, petitioners' counsel received a copy of the motion

for reconsideration in question. Petitioners were certainly not denied an opportunity to study the

arguments in the said motion as they filed an opposition to the same. Since the Shari'a District Court reset

the hearing for the motion for reconsideration in the same order, petitioners were not denied the

opportunity to object to the said motion in a hearing. Taken together, these circumstances show that the

purpose for the rules of notice of hearing, procedural process, was duly observed.

Prescription and Filiation

Petitioners' fifth argument is premature. Again, the Shari'a District Court has not yet determined whether it

has jurisdiction to settle the estate of the decedent. In the event that a special proceeding for the

settlement of the estate of a decedent is pending, questions regarding heirship, including prescription in

relation to recognition and filiation, should be raised and settled in the said proceeding.[54]The court, in its

capacity as a probate court, has jurisdiction to declare who are the heirs of the decedent.[55]In the case at

bar, the determination of the heirs of the decedent depends on an affirmative answer to the question ofwhether the Shari'a District Court has jurisdiction over the estate of the decedent.

IN VIEW WHEREOF, the petition is DENIED. The Orders of the Shari'a District Court, dated August 22, 2006

and September 21, 2006 respectively, are AFFIRMED. Cost against petitioners.

SO ORDERED.


24/96

FIRST DIVISION

[ G.R. No. 182403, March 09, 2010 ]

ATTY. RESTITUTO G. CUDIAMAT, ERLINDA P. CUDIAMAT[1]AND CORAZON D. CUDIAMAT, PETITIONERS,

VS. BATANGAS SAVINGS AND LOAN BANK, INC., AND THE REGISTER OF DEEDS, NASUGBU, BATANGAS,RESPONDENTS.

D E C I S I O N

CARPIO MORALES, J.:

Petitioner Atty. Restituto Cudiamat and his brother Perfecto were the registered co-owners of a 320 square

meter parcel of land (the property) in Balayan, Batangas, covered by TCT No. T-37889 of the Register of

Deeds of Nasugbu, Batangas. Restituto, who resided in Ozamiz City with his wife, entrusted the custody of

the title to who was residing in Balayan.

In 1979, Perfecto, without the knowledge and consent of Restituto, obtained a loan from respondent

Batangas Savings and Loan Bank, Inc. (the bank). To secure the payment of the loan, Perfecto mortgaged

the property for the purpose of which he presented a Special Power of Attorney (SPA) purportedly

executed by Restituto, with the marital consent of his wife-herein co-petitioner Erlinda Cudiamat.

On June 19, 1991, Restituto was informed, via letter[2]dated June 7, 1991 from the bank, that the property

was foreclosed. He thus, by letter[3]dated June 25, 1991, informed the bank that he had no participation in

the execution of the mortgage and that he never authorized Perfecto for the purpose.

In the meantime, Perfecto died in 1990. In 1998, as Perfecto's widow petitioner Corazon was being evicted

from the property, she and her co-petitioner-spouses Restituto and Erlinda filed on August 9, 1999 before

the Regional Trial Court (RTC) of Balayan a complaint[4]"for quieting of title with damages" against the bank

and the Register of Deeds of Nasugbu, docketed as Civil Case No. 3618, assailing the mortgage as being null

and void as they did not authorize the encumbrance of the property.

In its Answer to the complaint, the bank, maintaining the validity of the mortgage, alleged that it had in fact

secured a title in its name, TCT No. T-48405, after Perfecto failed to redeem the mortgage; that the Balayan

RTC had no jurisdiction over the case as the bank had been placed under receivership and under liquidationby the Philippine Deposit Insurance Corporation (PDIC); that PDIC filed before the RTC of Nasugbu a

petition for assistance in the liquidation of the bank which was docketed as SP No. 576; and that

jurisdiction to adjudicate disputed claims against it is lodged with the liquidation court-RTC Nasugbu.

By Decision of January 17, 2006,[5]Branch 9 of the Balayan RTC rendered judgment, in the complaint for

quieting of title, in favor of the plaintiffs-herein petitioners. It ordered respondent Register of Deeds of

Nasugbu to cancel the encumbrance annotated on TCT No. T-37889, and to cancel TCT No. T-48405 issued

in the name of the bank and reinstate the former title. It also directed the bank to return the property to

petitioner spouses Restituto and Erlinda and to pay P20,000 to all the petitioners to defray the costs of suit.

The bank appealed to the Court of Appeals, contending, inter alia, that the Balayan RTC had no jurisdiction


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over petitioners' complaint for quieting of title.

By the assailed Decision of December 21, 2007,[6]the appellate court, ruling in favor of the bank, dismissed

petitioners' complaint for quieting of title, without prejudice to the right of petitioners to take up their

claims with the Nasugbu RTC sitting as a liquidation court.

To the appellate court, the Balayan RTC, as a court of general jurisdiction, should have deferred to the

Nasugbu RTC which sits as a liquidation court, given that the bank was already under receivership when

petitioners filed the complaint for quieting of title.

Petitioners' Motion for Reconsideration having been denied by the appellate court by Resolution of March

27, 2008, they filed the present petition for review on certiorari.

Assailing the appellate court's ruling that the Balayan RTC had no jurisdiction over their complaint,

petitioners argue that their complaint was filed earlier than PDIC's petition for assistance in the liquidation;and that the bank is now estopped from questioning the jurisdiction of the Balayan RTC because it actively

participated in the proceedings thereat.

The petition is impressed with merit.

Estoppel bars the bank from raising the issue of lack of jurisdiction of the Balayan RTC.

In Lozon v. NLRC,[7]the Court came up with a clear rule on when jurisdiction by estoppel applies and when it

does not:

The operation of estoppel on the question of jurisdiction seemingly depends on whether the lower court

actually had jurisdiction or not. If it had no jurisdiction, but the case was tried and decided upon the theory

that it had jurisdiction, the parties are not barred, on appeal, from assailing such jurisdiction, for the same

"must exist as a matter of law, and may not be conferred by the consent of the parties or by estoppel."

However, if the lower court had jurisdiction, and the case was heard and decided upon a given theory,

such, for instance, as that the court had no jurisdiction, the party who induced it to adopt such theory will

not be permitted, on appeal, to assume an inconsistent position- that the lower court had jurisdiction...

(underscoring supplied)

The ruling was echoed in Metromedia Times Corporation v. Pastorin.[8]

In the present case, the Balayan RTC, sitting as a court of general jurisdiction, had jurisdiction over the

complaint for quieting of title filed by petitioners on August 9, 1999. The Nasugbu RTC, as a liquidation

court, assumed jurisdiction over the claims against the bank only on May 25, 2000, when PDIC's petition for

assistance in the liquidation was raffled thereat and given due course.

While it is well-settled that lack of jurisdiction on the subject matter can be raised at any time and is not

lost by estoppel by laches, the present case is an exception. To compel petitioners to re-file and relitigate

their claims before the Nasugbu RTC when the parties had already been given the opportunity to presenttheir respective evidence in a full-blown trial before the Balayan RTC which had, in fact, decided

petitioners' complaint (about two years before the appellate court rendered the assailed decision) would


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be an exercise in futility and would unjustly burden petitioners.

The Court, in Valenzuela v. Court of Appeals,[9]held that as a general rule, if there is a judicial liquidation of

an insolvent bank, all claims against the bank should be filed in the liquidation proceeding. The Court in

Valenzuela, however, after considering the circumstances attendant to the case, held that the general rule

should not be applied if to order the aggrieved party to refile or relitigate its case before the litigation court

would be "an exercise in futility." Among the circumstances the Court considered in that case is the fact

that the claimants were poor and the disputed parcel of land was their only property, and the parties'

claims and defenses were properly ventilated in and considered by the judicial court.

In the present case, the Court finds that analogous considerations exist to warrant the application of

Valenzuela. Petitioner Restituto was 78 years old at the time the petition was filed in this Court, and his co-

petitioner-wife Erlinda died[10]during the pendency of the case. And, except for co-petitioner Corazon,

Restituto is a resident of Ozamis City. To compel him to appear and relitigate the case in the liquidation

court-Nasugbu RTC when the issues to be raised before it are the same as those already exhaustivelypassed upon and decided by the Balayan RTC would be superfluous.

WHEREFORE, the petition is GRANTED. The Decision of December 21, 2007 and Resolution dated March 27,

2008 of the Court of Appeals are SETASIDE. The Decision dated January 17, 2006 of the Regional Trial Court

of Balayan, Batangas, Branch 9 is REINSTATED.

SO ORDERED.


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SECOND DIVISION

[ G.R. No. 176339, January 10, 2011 ]

DO-ALL METALS INDUSTRIES, INC., SPS. DOMINGO LIM AND LELY KUNG LIM, PETITIONERS, VS. SECURITY

BANK CORP., TITOLAIDO E. PAYONGAYONG, EVYLENE C. SISON, PHIL. INDUSTRIAL SECURITY AGENCYCORP. AND GIL SILOS, RESPONDENTS.

D E C I S I O N

ABAD, J.:

This case is about the propriety of awarding damages based on claims embodied in the plaintiff's

supplemental complaint filed without prior payment of the corresponding filing fees.

The Facts and the Case

From 1996 to 1997, Dragon Lady Industries, Inc., owned by petitioner spouses Domingo Lim and Lely Kung

Lim (the Lims) took out loans from respondent Security Bank Corporation (the Bank) that totaled

P92,454,776.45. Unable to pay the loans on time, the Lims assigned some of their real properties to the

Bank to secure the same, including a building and the lot on which it stands (the property), located at M. de

Leon St., Santolan, Pasig City.[1]

In 1998 the Bank offered to lease the property to the Lims through petitioner Do-All Metals Industries, Inc.

(DMI) primarily for business although the Lims were to use part of the property as their residence. DMI andthe Bank executed a two-year lease contract from October 1, 1998 to September 30, 2000 but the Bank

retained the right to pre-terminate the lease. The contract also provided that, should the Bank decide to

sell the property, DMI shall have the right of first refusal.

On December 3, 1999, before the lease was up, the Bank gave notice to DMI that it was pre-terminating the

lease on December 31, 1999. Wanting to exercise its right of first refusal, DMI tried to negotiate with the

Bank the terms of its purchase. DMI offered to pay the Bank P8 million for the property but the latter

rejected the offer, suggesting P15 million instead. DMI made a second offer of P10 million but the Bank

declined the same.

While the negotiations were on going, the Lims claimed that they continued to use the property in their

business. But the Bank posted at the place private security guards from Philippine Industrial Security

Agency (PISA). The Lims also claimed that on several occasions in 2000, the guards, on instructions of the

Bank representatives Titolaido Payongayong and Evylene Sison, padlocked the entrances to the place and

barred the Lims as well as DMI's employees from entering the property. One of the guards even pointed his

gun at one employee and shots were fired. Because of this, DMI was unable to close several projects and

contracts with prospective clients. Further, the Lims alleged that they were unable to retrieve assorted

furniture, equipment, and personal items left at the property.

The Lims eventually filed a complaint with the Regional Trial Court (RTC) of Pasig City for damages with

prayer for the issuance of a temporary restraining order (TRO) or preliminary injunction against the Bank


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and its co-defendants Payongayong, Sison, PISA, and Gil Silos. [2]Answering the complaint, the Bank pointed

out that the lease contract allowed it to sell the property at any time provided only that it gave DMI the

right of first refusal. DMI had seven days from notice to exercise its option. On September 10, 1999 the

Bank gave notice to DMI that it intended to sell the property to a third party. DMI asked for an extension of

its option to buy and the Bank granted it. But the parties could not agree on a purchase price. The Bank

required DMI to vacate and turnover the property but it failed to do so. As a result, the Bank's buyer

backed-out of the sale. Despite what happened, the Bank and DMI continued negotiations for the purchase

of the leased premises but they came to no agreement.

The Bank denied, on the other hand, that its guards harassed DMI and the Lims. To protect its property, the

Bank began posting guards at the building even before it leased the same to DMI. Indeed, this arrangement

benefited both parties. The Bank alleged that in October of 2000, when the parties could not come to an

agreement regarding the purchase of the property, DMI vacated the same and peacefully turned over

possession to the Bank.

The Bank offered no objection to the issuance of a TRO since it claimed that it never prevented DMI or its

employees from entering or leaving the building. For this reason, the RTC directed the Bank to allow DMI

and the Lims to enter the building and get the things they left there. The latter claimed, however, that on

entering the building, they were unable to find the movable properties they left there. In a supplemental

complaint, DMI and the Lims alleged that the Bank surreptitiously took such properties, resulting in

additional actual damages to them of over P27 million.

The RTC set the pre-trial in the case for December 4, 2001. On that date, however, counsel for the Bank

moved to reset the proceeding. The court denied the motion and allowed DMI and the Lims to present

their evidence ex parte. The court eventually reconsidered its order but only after the plaintiffs had alreadypresented their evidence and were about to rest their case. The RTC declined to recall the plaintiffs'

witnesses for cross- examination but allowed the Bank to present its evidence.[3]This prompted the Bank to

seek relief from the Court of Appeals (CA) and eventually from this Court but to no avail.[4]

During its turn at the trial, the Bank got to present only defendant Payongayong, a bank officer. For

repeatedly canceling the hearings and incurring delays, the RTC declared the Bank to have forfeited its right

to present additional evidence and deemed the case submitted for decision.

On September 30, 2004 the RTC rendered a decision in favor of DMI and the Lims. It ordered the Bank to

pay the plaintiffs P27,974,564.00 as actual damages, P500,000.00 as moral damages, P500,000 as

exemplary damages, and P100,000.00 as attorney's fees. But the court absolved defendants Payongayong,

Sison, Silos and PISA of any liability.

The Bank moved for reconsideration of the decision, questioning among other things the RTC's authority to

grant damages considering plaintiffs' failure to pay the filing fees on their supplemental complaint. The RTC

denied the motion. On appeal to the CA, the latter found for the Bank, reversed the RTC decision, and

dismissed the complaint as well as the counterclaims.[5]DMI and the Lims filed a motion for reconsideration

but the CA denied the same, hence this petition.

The Issues Presented


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The issues presented in this case are:

1. Whether or not the RTC acquired jurisdiction to hear and adjudicate plaintiff's supplemental complaint

against the Bank considering their failure to pay the filing fees on the amounts of damages they claim in it;

2. Whether or not the Bank is liable for the intimidation and harassment committed against DMI and its

representatives; and

3. Whether or not the Bank is liable to DMI and the Lims for the machineries, equipment, and other

properties they allegedly lost after they were barred from the property.

The Court's Rulings

One.On the issue of jurisdiction, respondent Bank argues that plaintiffs' failure to pay the filing fees ontheir supplemental complaint is fatal to their action.

But what the plaintiffs failed to pay was merely the filing fees for their Supplemental Complaint. The RTC

acquired jurisdiction over plaintiffs' action from the moment they filed their original complaint

accompanied by the payment of the filing fees due on the same. The plaintiffs' non-payment of the

additional filing fees due on their additional claims did not divest the RTC of the jurisdiction it already had

over the case.[6]

Two.As to the claim that Bank's representatives and retained guards harassed and intimidated DMI's

employees and the Lims, the RTC found ample proof of such wrongdoings and accordingly awarded

damages to the plaintiffs. But the CA disagreed, discounting the testimony of the police officers regarding

their investigations of the incidents since such officers were not present when they happened. The CA may

be correct in a way but the plaintiffs presented eyewitnesses who testified out of personal knowledge. The

police officers testified merely to point out that there had been trouble at the place and their investigations

yielded their findings.

The Bank belittles the testimonies of the petitioners' witnesses for having been presented ex partebefore

the clerk of court. But the ex partehearing, having been properly authorized, cannot be assailed as less

credible. It was the Bank's fault that it was unable to attend the hearing. It cannot profit from its lack ofdiligence.

Domingo Lim and some employees of DMI testified regarding the Bank guards' unmitigated use of their

superior strength and firepower. Their testimonies were never refuted. Police Inspector Priscillo dela Paz

testified that he responded to several complaints regarding shooting incidents at the leased premises and

on one occasion, he found Domingo Lim was locked in the building. When he asked why Lim had been

locked in, a Bank representative told him that they had instructions to prevent anyone from taking any

property out of the premises. It was only after Dela Paz talked to the Bank representative that they let Lim

out.[7]

Payongayong, the Bank's sole witness, denied charges of harassment against the Bank's representatives

and the guards. But his denial came merely from reports relayed to him. They were not based on personal


30/96

knowledge.

While the lease may have already lapsed, the Bank had no business harassing and intimidating the Lims and

their employees. The RTC was therefore correct in adjudging moral damages, exemplary damages, and

attorney's fees against the Bank for the acts of their representatives and building guards.

Three.As to the damages that plaintiffs claim under their supplemental complaint, their stand is that the

RTC committed no error in admitting the complaint even if they had not paid the filing fees due on it since

such fees constituted a lien anyway on the judgment award. But this after-judgment lien, which implies

that payment depends on a successful execution of the judgment, applies to cases where the filing fees

were incorrectly assessed or paid or where the court has discretion to fix the amount of the award.[8]None

of these circumstances obtain in this case.

Here, the supplemental complaint specified from the beginning the act

assignment no. 4 cases.docx

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