Garcia vs. Ferro Chemicals, Inc. (G.R. No.

172505, October 1, 2014)

(Jurisdiction of a court over the subject matter is vested by law. In criminal cases, the imposable penalty of the
crime charged in the information determines the court that has jurisdiction over the case. That jurisdiction is
vested by law and cannot be conferred or waived by the parties.)
FACTS:
Antonio Garcia, the seller, entered into a deed of absolute sale and purchase over shares of stock from various
companies to Ferro Chemicals, Inc., through Ramon Garcia. The contract was allegedly entered into to prevent
these shares of stock from being sold at public auction to pay the outstanding obligations of Antonio Garcia.
A deed of right of repurchase over the same shares of stock was entered into between Antonio Garcia and Ferro
Chemicals, Inc. Under the deed of right of repurchase, Antonio Garcia can redeem the properties sold within
180 days from the signing of the agreement.
Before the end of the 180-day period, Antonio Garcia exercised his right to repurchase the properties. However,
Ferro Chemicals, Inc. did not agree to the repurchase of the shares of stock. Thus, Antonio Garcia filed an
action for specific performance and annulment of transfer of shares.
Later on, some of those shares were sold on a public auction to Philippine Investment System Organization.
A case was then filed against Antonio M. Garcia for the crime of Estafa by Ferro Chemicals, Inc. In their
complaint, Ferro claim that Antonia allegedly misrepresented to Ferro Chemicals, Inc. that the shares subject of
the contracts entered into were free from all liens and encumbrances.
RTC: acquitted Antonio for insufficiency of evidence. They held:
“From the foregoing, it is very clear that private complainant was aware of the status of the subject CLUB
SHARES. Thus, the element of false pretense, fraudulent act or fraudulent means which constitute the very
cause or the only motive which induced the private complainant to enter into the questioned deed of sale (Exh.
"A") is wanting in the case at bar.”
Reconsideration was denied.
Ferro went to the court of appeals for the CIVIL aspect of the case on the ground that it is not in accordance
with the law and the facts of the case.
Later on, filed a petition for certiorari on the Supreme Court to annul the decision of the RTC.
The Supreme Court dismissed the petition but the Court of Appeals granted the appeal awarded Ferro
Chemicals, Inc. the amount of ₱1,000,000.00 as actual loss with legal interest and attorney’s fees in the amount
of ₱20,000.00. The appellate court found that Antonio Garcia failed to disclose the Philippine Investment and
Savings Organization’s lien over the club shares.
Antonio filed for reconsideration but was dismissed, hence going to the Supreme Court and petition for review
on certiorari, assailing the decision and resolution of the Court of Appeals.
However, the Supreme Court pointed out that there are pertinent and important issues that the parties failed to
raise before the trial court, Court of Appeals, and this court. 
ISSUE:
1. WON the Regional Trial Court had jurisdiction over the case
2. WON Ferro Chemical Committed Forum Shopping
HELD:
No. RTC did NOT have jurisdiction.
Jurisdiction of a court over the subject matter is vested by law. In criminal cases, the imposable penalty of the
crime charged in the information determines the court that has jurisdiction over the case.
The information charged Antonio Garcia with violation of Article 318 of the Revised Penal Code, which is
punishable by arresto mayor, or imprisonment for a period of one (1) month and one (1) day to six (6) months.
Article 318 states:
ART. 318: Other deceits. – The penalty of arresto mayor and a fine of not less than the amount of the damage
caused and not more than twice such amount shall be imposed upon any person who shall defraud or damage
another by any other deceit not mentioned in the preceding articles of this chapter.
Any person who, for profit or gain, shall interpret dreams, make forecasts, tell fortunes, or take advantage of the
credulity of the public in any other similar manner, shall suffer the penalty of arresto mayoror a fine not
exceeding 200 pesos.
When the information was filed on September 3, 1990, the law in force was Batas Pambansa Blg. 129 before it
was amended by Republic Act No. 7691. Under Section 32 of Batas Pambansa Blg. 129, the Metropolitan Trial
Court had jurisdiction over the case:
SEC. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial
Courts in criminal cases.–
....
2. Exclusive original jurisdiction over all offenses punishable with imprisonment of not exceeding four
years and two months, or a fine of not more than four thousand pesos, or both such fine and
imprisonment, regardless of other imposable accessory or other penalties, including the civil liability
arising from such offenses or predicated thereon, irrespective of kind, nature, value, or amount thereof:
Provided, however, That in offenses involving damage to property through criminal negligence they shall
have exclusive original jurisdiction where the imposable fine does not exceed twenty thousand pesos.
(Emphasis supplied)
The Regional Trial Court did not have jurisdiction to hear and decide the case. This lack of jurisdiction
resulted in voiding all of the trial court’s proceedings and the judgment rendered. Although the trial
court’s lack of jurisdiction was never raised as an issue in any part of the proceedings and even until it reached
this court, we proceed with resolving the matter.
In Pangilinan v. Court of Appeals, this court held:
Thus, we apply the general rule that jurisdiction is vested by law and cannot be conferred or waived by
the parties. Even on appeal and even if the reviewing parties did not raise the issue of jurisdiction, the
reviewing court is not precluded from ruling that the lower court had no jurisdiction over the case[.]
....
Having arrived at the conclusion that the Regional Trial Court did not have jurisdiction to try the case against
the appellant, it is no longer necessary to consider the other issues raised as the decision of the Regional Trial
Court is null and void.
The trial court’s lack of jurisdiction cannot be cured by the parties’ silence on the matter. The failure of the
parties to raise the matter of jurisdiction also cannot be construed as a waiver of the parties. Jurisdiction is
conferred by law and cannot be waived by the parties.
The assailed decision is void, considering that it originates from a void decision of the Regional Trial Court for
lack of jurisdiction over the subject matter.
Ferro Chemicals, Inc. committed forum shopping
The test for determining the existence of forum shopping is whether the elements of litis pendentiaare present,
or whether a final judgment in one case amounts to res judicatain another. Thus, there is forum shopping when
the following elements are present: (a) identity of parties, or at least such parties asrepresent the same interests
in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts;
and (c) the identity of the two preceding particulars, such that any judgment rendered in the other action will,
regardless of which party is successful, amount to res judicatain the action under consideration; said requisites
are also constitutive of the requisites for auter action pendant or lis pendens.
There is no question that Ferro Chemicals, Inc. committed forum shopping when it filed an appeal before the
Court of Appeals and a petition for certiorari before this court assailing the same trial court decision. This is true
even if Ferro Chemicals, Inc.’s notice of appeal to the Court of Appeals was entitled "Notice of Appeal Ex
Gratia Abudantia Ad Cautelam (Of The Civil Aspect of the Case)."57 The "civil aspect of the case" referred to
by Ferro Chemicals, Inc. is for the recovery of civil liability ex delicto. However, it failed to make a reservation
before the trial court to institute the civil action for the recovery of civil liability ex delictoor institute a separate
civil action prior to the filing of the criminal case.
Litigants cannot avail themselves of two separate remedies for the same relief in the hope that in one forum, the
relief prayed for will be granted. This is the evil sought tobe averted by the doctrine of non-forum shopping, and
this is the problem that has happened in this case. This court denied the petition for certiorari filed byFerro
Chemicals, Inc. resulting in finality of the trial court’s decision.1awp++i1 The decision found Antonio Garcia
not guilty of the offense charged, and no civil liability was awarded to Ferro Chemicals, Inc. However, at
present,there is a conflicting decision from the Court of Appeals awarding Ferro Chemicals, Inc. civil indemnity
arising from the offense charged.
WHEREFORE, the resolution in G.R. No. 130880 is reiterated. We grant the petition insofar as it prays for the
setting aside of the Court of Appeals' decision d~ted August 11, 2005 and resolution dated April 27, 2006 as a
final decision over the assailed Regional Trial Court decision that was rendered on November 16, 1998 in G.R.
No. 130880.