G.R. No.
202836, June 19, 2018
FIRST SARMIENTO PROPERTY HOLDINGS, INC., Petitioner,
v.
PHILIPPINE BANK OF COMMUNICATIONS, Respondent.
LEONEN, J.:
FACTS:
June 19, 2002 – First Sarmiento obtained a loan of ₱40M from PBCOM which was secured by a real
estate mortgage over parcels of land;
September 15, 2003 – loan was increased to ₱100M;
January 2, 2006 – PBCOM filed for extrajudicial foreclosure of REM for petitioner’s failure to pay
despite demands.
December 27, 2011 – Petitioner filed a complaint for the annulment of the REM with the RTC but it
was not accepted for absence of tax declarations for the purposes of assessment of docket fees.
December 29, 2011 – RTC granted petitioner’s motion to consider the Value of Subject Matter of
the Complaint as Not Capable of Pecuniary Estimation, and ruled that First Sarmiento's action for
annulment of real estate mortgage was incapable of pecuniary estimation.
On the same day, mortgages properties were auctioned and sold to PBCOM as the highest bidder;
Hence, on January 2, 2012 – First Sarmiento filed for a complaint for annulment of REM and paid a
docket fee of ₱ 5,545.00. It never received the loan proceeds of ₱100M from PBCOM, yet the latter
still sought the extrajudicial foreclosure of real estate mortgage.
RTC-Malolos: dismissed the complaint for annulment for lack of jurisdiction; the action was a real
action, hence, the filing fees should have been based on the FMV of the mortgaged properties.
ISSUE: WON RTC has acquired jurisdiction over the complaint for annulment of REM (with the amount
of the docket fees paid?
HELD: YES.
Nature of Jurisdiction
Jurisdiction - The power and authority of a court to hear, try and decide a case.
Courts exercise the powers conferred on them with binding effect if they acquire jurisdiction over:
(a) The cause of action or the subject matter of the case;
Court's authority to hear and determine cases within a general class where the proceedings in
question belong.
Conferred by law and cannot be acquired through stipulation, agreement between the parties,
or implied waiver due to the silence of a party.
(b) The thing or the res;
Jurisdiction over the thing or the res is a court's authority over the object subject of litigation.
It is obtained through the seizure of the object under legal process or the institution of legal
proceedings which recognize the power and authority of the court.
(c) The parties; and
The court's power to render judgment that are binding on the parties.
Plaintiffs – Filing of their initiatory pleading
Defendants - upon the valid service of summons or their voluntary appearance in court.
(d) The remedy.
Sec. 19(1) of BP Blg. 129, as amended, provides RTC with exclusive, original jurisdiction over "all civil
actions in which the subject of the litigation is incapable of pecuniary estimation."
To determine the nature of an action , whether or not its subject matter is capable or incapable of
pecuniary estimation, the nature of the principal action or relief sought must be ascertained.
If the principal relief is for the recovery of a sum of money or real property, then the action is
capable of pecuniary estimation.
However, if the principal relief sought is not for the recovery of sum of money or real property,
even if a claim over a sum of money or real property results as a consequence of the principal
relief, the action is incapable of pecuniary estimation.
Ex: 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.
Reason of RTC’s jurisdiction:
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).
RULING:
If the primary cause of action is based on a claim of ownership or a claim of legal right to control,
possess, dispose, or enjoy such property, the action is a real action involving title to real property.
Case at bar:
Petitioner never prayed for the reconveyance of the properties foreclosed during the auction sale, or
that it ever asserted its ownership or possession over them. Rather, it assailed the validity of the loan
contract with real estate mortgage that it entered into with respondent because it supposedly never
received the proceeds of the ₱100M loan agreement.
Hence:
Annulment of real estate mortgage has a subject incapable of pecuniary estimation because it was not
intended to recover ownership or possession of the mortgaged properties sold to respondent during
the auction sale. Petitioner had ownership and possession of the mortgaged properties when it filed its
Complaint; hence, it never expressly or impliedly sought recovery of their ownership or possession.
The RTC acquired jurisdiction over the Complaint for annulment of real estate mortgage when
petitioner paid the docket fees as computed by the clerk of court, upon the direction of the Executive
Judge.
Even assuming that such case was a real action and the correct docket fees were not paid by petitioner,
the case should not have been dismissed; instead, the payment of additional docket fees should have
been made a lien on the judgment award.
The records attest that in filing its complaint, petitioner readily paid the docket fees assessed by the
clerk of court; hence, there was no evidence of bad faith or intention to defraud the government that
would have rightfully merited the dismissal of the Complaint.
