SUPREME COURT REPORTS ANNOTATED VOLUME 386 12/1/19, 12:12 PM

VOL. 386, AUGUST 1, 2002 67

Radio Communications of the Philippines, Inc. vs. Court of
Appeals

*
G.R. No. 136109. August 1, 2002.

RADIO COMMUNICATIONS OF THE PHILIPPINES,

INC., petitioner, vs. COURT OF APPEALS and MANUEL
DULAWON, respondents.

Remedial Law; Actions; Jurisdiction; In determining whether

an action is one the subject matter of which is not capable of
pecuniary estimation, the nature of the principal action or remedy
sought must first be ascertained.·In Russell, et al. v. Vestil, et al.,
the Court held that in determining whether an action is one the
subject matter of which is not capable of pecuniary estimation, the
nature of the principal action or remedy sought must first be
ascertained. If it is primarily for the recovery of a sum of money, the
claim is considered capable of pecuniary estimation, and
jurisdiction over the action will depend on the amount of the claim.
However, where the basic issue is something other than the right to
recover a sum of money, where the money claim is purely incidental
to, or a consequence of, the principal relief sought, the action is one
where the subject of the litigation may not be estimated in terms of
money, which is cognizable exclusively by Regional Trial Courts.
Same; Same; Same; Jurisdiction over the subject matter of a
case is conferred by law and is determined by the allegations in the
complaint and the character of the relief sought, irrespective of
whether the plaintiff is entitled to all or some of the claims asserted
therein.·It is axiomatic that jurisdiction over the subject matter of
a case is conferred by law and is determined by the allegations in
the complaint and the character of the relief sought, irrespective of
whether the plaintiff is entitled to all or some of the claims asserted
therein.
Same; Same; Same; A breach of contract is a cause of action
either for specific performance or rescission of contracts; Actions for
specific performance are incapable of pecuniary estimation and
therefore fall under the jurisdiction of the Regional Trial Court.·It
is settled that a breach of contract is a cause of action either for
specific performance or rescission of contracts. In ManufacturerÊs
Distributors, Inc. v. Siu Liong, the Court held that actions for
specific performance are incapable of pecuniary estimation and
therefore fall under the jurisdiction of the Regional Trial Court.

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* FIRST DIVISION.

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68 SUPREME COURT REPORTS ANNOTATED

Radio Communications of the Philippines, Inc. vs. Court of
Appeals

PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.

Balbin, Reyes, Aguila & Associates for petitioner.
Sarol & Dapeg Law Offices for private respondents.

YNARES-SANTIAGO, J.:

This is a1 petition for review of the decision of the Court of2

Appeals in CA-G.R. SP No. 45987 dated April 3
30, 1998
and its resolution dated October 15, 1998 denying the
motion for reconsideration.
On June 18, 1997, private respondent Manuel Dulawon
filed with the Regional Trial Court of Tabuk, Kalinga,
Branch 25, a complaint for breach of contract of lease with
damages against petitioner Radio Communications of the
Philippines, Inc. (RCPI). Petitioner filed a motion to
dismiss the complaint for lack of jurisdiction contending
that it is the Municipal Trial Court which has jurisdiction
as the complaint is basically one for collection of unpaid
rentals in the sum of P84,000.00, which does not exceed the
jurisdictional amount of P100,000.00 for Regional Trial 4
Courts. The trial court denied the motion to dismiss,5
as
well as petitionerÊs motion for reconsideration. Hence,
petitioner went to the Court of Appeals on a petition for
certiorari. On April 30, 1998, the Court of Appeals
dismissed the petition. The dispositive portion thereof
reads:

„WHEREFORE, the petition is hereby DENIED DUE COURSE and

is DISMISSED. Costs against petitioner.

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1 Thirteenth Division, composed of Associate Justices: Angelina

Sandoval-Gutierrez, (Chairman and ponente), Romeo J. Callejo, Sr.,
(member), and Mariano M. Umali (member).
2 Rollo, p. 48.
3 Ibid., p. 63.
4 Ibid., p. 39.
5 Ibid., p. 46.

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VOL. 386, AUGUST 1, 2002 69

Radio Communications of the Philippines, Inc. vs. Court of
Appeals

6
SO ORDERED.‰

The motion for reconsideration of the foregoing decision

was denied on October 15, 1998. Hence, this petition.
The issue for resolution in this petition is whether or not
the Regional Trial Court has jurisdiction over the
complaint filed by private respondent.
Pertinent portion of Batas Pambansa Blg. 129, as
amended by Republic Act No. 7691, provides:

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

exercise exclusive original jurisdiction:
(1) In all civil actions in which the subject of the litigation is
incapable of pecuniary estimation;
xxx xxx xxx
(8) In all other cases in which the demand, exclusive of interest,
damages of whatever kind, attorneyÊs 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
7
items exceeds Two hundred thousand pesos (P200,000.00).

Corollary thereto, Administrative Circular No. 09-94,

states:

xxx xxx xxx

2. The exclusion of the term „damages of whatever kind‰ in
determining the jurisdictional amount under Section 19 (8) and
Section 33 (1) of B.P. 129, as amended by R.A. No. 7691, applies to
cases where the damages are merely incidental to or a consequence
of the main cause of action.

______________

6 Ibid., p. 53.
7 Under Section 5 of Republic Act No. 7691, which took effect in 1994, and
Circular 21-99, the jurisdictional amount for Regional Trial Court should be
adjusted as follows: Five years after the effectivity of Republic Act No. 7691,
the amount exceeds Two Hundred Thousand Pesos (P200,000.00); and five
years thereafter, the amount exceeds Three Hundred Thousand Pesos
(P300,000.00). However, in the case of Metro Manila, the above-mentioned
jurisdictional amounts shall be adjusted after five years from the effectivity of
Republic Act No. 7691 such that the amount exceeds Four Hundred Thousand
Pesos (P400,000.00) [Feria, Noche, Civil Procedure Annotated, 2001, Vol. 1, pp.
163-164.]

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Radio Communications of the Philippines, Inc. vs. Court of Appeals

However, in cases where the claim for damages is the main cause of
action, or one of the causes of action, the amount of such claim shall
be considered in determining the jurisdiction of the court.
xxx xxx x x x.
8
In Russell, et al. v. Vestil, et al., the Court held that in
determining whether an action is one the subject matter of
which is not capable of pecuniary estimation, the nature of
the principal action or remedy sought must first be
ascertained. If it is primarily for the recovery of a sum of
money, the claim is considered capable of pecuniary
estimation, and jurisdiction over the action will depend on
the amount of the claim. However, where the basic issue is
something other than the right to recover a sum of money,
where the money claim is purely incidental to, or a
consequence of, the principal relief sought, the action is one
where the subject of the litigation may not be estimated in
terms of money, which is cognizable exclusively by Regional
Trial Courts.
It is axiomatic that jurisdiction over the subject matter
of a case is conferred by law and is determined by the
allegations in the complaint and the character of the relief
sought, irrespective of whether the plaintiff
9
is entitled to
all or some of the claims asserted therein.
In the case at bar, the allegations in the complaint
plainly show that private respondentÊs cause of action is
breach of contract. The pertinent portion of the complaint
recites:

xxx xxx xxx

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

through its appropriate officials negotiated with plaintiff
the lease of a portion of the latterÊs building x x x
3. That the lease contract was effective for a period of three (3)
years of from January 1, 1996 to January 1, 1998 with
advance payment for the year 1996. The advance was not
however given in lump sum but on

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8 304 SCRA 738, 744 [1999], citing Singson v. Isabela Sawmill, 88 SCRA 623
[1979]; Raymundo v. Court of Appeals, 213 SCRA 457 [1992].
9 Russel, supra, citing Garcia v. Court of Appeals, 273 SCRA 239 [1997];
Cañiza v. Court of Appeals, 268 SCRA 640 [1997].

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Radio Communications of the Philippines, Inc. vs. Court of Appeals

installment. One check that was given in payment of one

monthÊs rental for 1996 was even stale and had to be
changed only after demand;
4. That as per contract the monthly rental for 1997 was
P3,300.00 while for 1998, it is P3,700.00;
5. That the defendant surreptitiously removed its equipments
and other personalities from the leased premises and failed
to pay rentals due for the months of January to March 1997
to the damage and prejudice of plaintiff; that this failure
and refusal on the part of plaintiff accelerated the payment
of all rentals for each month for the years 1997 and 1998;
6. That the acts of defendant amounts to a breach of contract
which is unlawful and malicious, as in fact, it caused
plaintiff serious anxiety, emotional stress, and sleepless
nights for which he is entitled to moral damages;
7. That plaintiff conveyed his feelings to Mr. Ronald C.
Manalastas as evidenced by a letter dated January 7, 1997
a copy of which is hereto attached to form part hereof as
Annex „B‰. This was later followed by a letter of plaintiffs
counsel a machine copy of which is hereto attached to form
part hereof and marked as Annex „C‰. Both these letters
landed on deaf ears thereby aggravating the
worries/anxieties of plaintiff;
8. That the period agreed is for the benefit of both parties and
any unilateral termination constitutes breach of contract;
9. That defendant actually used the leased premises during
the year 1996; that had it not been for the contract, plaintiff
could have leased the premises to other persons for business
purposes; that this unlawful and malicious breach of
contract cannot be lawfully countenanced hence defendant
must be taught a lesson by being ordered to pay exemplary
damages;
10
xxx xxx x x x.

It is settled that a breach of contract is a cause of action11

either for specific performance or rescission of contracts.
12
In ManufacturerÊs Distributors, Inc. v. Siu Liong, the
Court held that actions for specific performance are
incapable of pecuniary estimation and

______________

10 Rollo, pp. 25-27.

11 Davao Abaca Plantation Company, Inc. v. Dole, Philippines, Inc.,
346 SCRA 682, 688 [2000], citing Baguioro v. Barrios, et al., 77 Phil. 12
[1946].
12 16 SCRA 680, 683 [1966].

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Radio Communications of the Philippines, Inc. vs. Court of
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therefore
13
fall under the jurisdiction of the Regional Trial
Court. Here, the averments in the complaint reveal that
the suit filed by private respondent was primarily one for
specific performance as it was aimed to enforce their three-
year lease contract which would incidentally entitle him to
monetary awards if the court should find that the subject
contract of lease was breached. As alleged therein,
petitionerÊs failure to pay rentals due for the period from
January to March 1997, constituted a violation of their
contract which had the effect of accelerating the payment of
monthly rentals for the years 1997 and 1998. The same
complaint likewise implied a premature and unilateral
termination of the term of the lease with the closure of and
removal 14all communication equipment in the leased
premises. Under the circumstances, the court has to
scrutinize the facts and the applicable laws in order to
determine whether there was indeed a violation of their
lease agreement that would justify the award of rentals
and damages. The prayer, therefore, for the payment of
unpaid rentals in the amount of P84,000.00 plus damages
consequent to the breach is merely incidental to the main
action for specific performance.
15
Similarly, in
ManufacturerÊs DistributorÊs Inc., the Court explained·

xxx xxx xxx

That plaintiff Ês complaint also sought the payment by the
defendant of P3,376.00, plus interest and attorneyÊs fees, does not
give a pecuniary estimation to the litigation, for the payment of
such amounts can only be ordered as a consequence of the specific
performance primarily sought. In other words, such payment would
be but an incident or consequence of defendantÊs liability for specific
performance. If no such liability is judicially declared, the payment
can not be awarded. Hence, the amounts sought do not represent
the value of the subject of litigation.
„Subject matter over which jurisdiction can not be conferred by
consent, has reference, not to the res or property involved in the
litigation nor to a particular case, but to the class of cases, the
purported subject of litigation, the nature of the action and of the
relief sought (Appeal of Maclain, 176 NW. 817).‰

______________

13 See also Amorganda v. Court of Appeals, 166 SCRA 203 [1988].

14 Complaint, paragraphs 5 and 8; Exhibit „B‰, Rollo, p. 31.
15 Supra.

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Radio Communications of the Philippines, Inc. vs. Court of
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Specifically, it has been held that:

„The Court has no jurisdiction of a suit for specific performance of a

contract, although the damages alleged for its breach, if permitted,
are within the amount of which that court has jurisdiction.‰
(Mebane Cotton Breeding Station vs. Sides, 257 SW. 302; 21 C.J.S.
59, note).
xxx xxx xxx

Clearly, the action for specific performance case,

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

Davide, Jr. (C.J., Chairman), Vitug, Kapunan and

Austria-Martinez, JJ., concur.

Petition denied, judgment affirmed.

Note.·It is settled rule that jurisdiction over the

subject matter is determined by the allegations in the
complaint. (Unilongco vs. Court of Appeals, 305 SCRA 561
[1999])

··o0o··

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