6.

Frias vs Alcayde the court need not acquire jurisdiction over the
GR No. 194262 / Feb. 28, 2018 person of the petitioner.
TIJAM, J.:
HELD:
"Due process dictates that jurisdiction over the
person of a defendant can only be acquired by It is crucial to underscore the necessity of
the courts after a strict compliance with the determining first whether the action subject of
rules on the proper service of summons." this appeal is in personam, in rem, or quasi in
rem because the rules on service of summons
FACTS: under Rule 14 apply according to the nature of
Bobie Rose D.V. Frias, as lessor and the action.
respondent Rolando Alcayde, as lessee, entered
into a Contract of Lease involving a residential In actions in personam, the judgment is for or
house and lot. Respondent refused to perform against a person directly. Jurisdiction over the
any of his contractual obligations, which had parties is required in actions in personam
accumulated for 24 months in rental because they seek to impose personal
arrearages, which prompted petitioner to file a responsibility or liability upon a person. "In a
Complaint for Unlawful Detainer. The process proceeding in rem or quasi in rem, jurisdiction
server tried to personally serve the summons to over the person of the defendant is not a
respondent but to no avail. Through prerequisite to confer jurisdiction on the court,
substituted service, summons was served upon provided that the latter has jurisdiction over
respondent's caretaker. the res. Jurisdiction over the res is acquired
either (a) by the seizure of the property under
The MeTC rendered a decision in favor of the legal process, whereby it is brought into actual
petitioner and ordered respondent to vacate custody of the law; or (b) as a result of the
the subject property. institution of legal proceedings, in which the
power of the court is recognized and made
Respondent averred that the decision of the effective."
MeTC does not bind him since the court did
not acquire jurisdiction over his person. A copy Here, respondent filed a petition to annul the
of the petition for annulment of judgment was MeTC's July 26, 2006 Decision, which ordered
allegedly served to the petitioner. him to vacate the premises of the subject
property and to pay the petitioner the accrued
On September 7, 2007, the RTC issued an rentals thereon, in violation of the parties' lease
Order containing therein the manifestation of contract.
respondent that he is withdrawing his
application for a TRO and is now pursuing the Annulment of judgment, as provided for in
main case for annulment of judgment. Rule 47, is based only on the grounds of
Respondent filed an Ex-Parte Motion to extrinsic fraud and lack of jurisdiction.
declare petitioner in default, on the ground that Jurisprudence, however, recognizes lack, of
despite her receipt of the summons, she has yet due process as an additional ground to annul a
to file any pleading. judgment. It is a recourse that presupposes the
filing of a separate and original action for the
Petitioner through her representative, Ms. purpose of annulling or avoiding a decision in
Fujita filed a Preliminary submission to another case. Annulment is a remedy in law
Dismiss Petition-Special Appearance raising independent of the case where the judgment
jurisdictional issues on the ground of lack of sought to be annulled is rendered. It is unlike a
jurisdiction over her person. She contended motion for reconsideration, appeal or even a
that the defect in the service of summons either petition for relief from judgment, because
personally or through substituted service is annulment is not a continuation or progression
apparent since it did not indicate the of the same case, as in fact the case it seeks to
impossibility of personal service and efforts annul is already final and executory. Rather, it
exerted by Sheriff Tolentino to locate the is an extraordinary remedy that is equitable in
petitioner. character and is permitted only in exceptional
cases.
ISSUE:
Whether or not the petition for annulment of
judgment is not an action in personam, thus,
Annulment of judgment involves the exercise process for purposes of service of summons
of original jurisdiction, as expressly conferred cannot be deliberately ignored. For courts, as
on the CA by Batas Pambansa Bilang (BP Blg.) guardians of constitutional rights cannot be
129, Section 9(2). It also implies power by a expected to deny persons their due process
superior court over a subordinate one, as rights while at the same time be considered as
provided for in Rule 47, wherein the appellate acting within their jurisdiction. Regardless of
court may annul a decision of the regional trial the type of action - whether it is in personam,
court, or the latter court may annul a decision in rem or quasi in rem — the proper service of
of the municipal or metropolitan trial court. summons is imperative.

For purposes of summons, this Court holds

that the nature of a petition for annulment of 7. Amoguis vs. Ballado
judgment is in personam, on the basis of the G.R. No. 189626 | August 20, 2018
following reasons: First, a petition for Justice Leonen
annulment of judgment is an original action,
which is separate, distinct and independent of Jurisdiction over the subject matter of a
the case where the judgment sought to be complaint is conferred by law. It cannot be lost
annulled is rendered. It is not a continuation or through waiver or estoppel. It can be raised at
progression of the same case. Thus, regardless any time in the proceedings, whether during
of the nature of the original action in the trial or on appeal.
decision sought to be annulled, be it in
personam, in rem or quasi in rem, the FACTS:
respondent should be duly notified of the On November 24, 1969, spouses Francisco
petition seeking to annul the court's decision Ballado and Concepcion Ballado entered into
over which the respondent has a direct or two contracts to sell with owner and developer
indirect interest. St. Joseph Realty, Ltd. to buy on installment
parcels of land, designated as Lot Nos. 1 and 2.
Second, a petition for annulment of judgment The Ballado Spouses amortized until 1979
and the court's subsequent decision thereon when CrisantoPinili, St. Joseph Realty’s
will affect the parties alone. It will not be collector, refused to receive their payments
enforceable against the whole world. Any because of a small house they had erected
judgment therein will eventually bind only the therein in violation of the rules of the
parties properly impleaded. subdivision. Francisco informed St. Joseph
Realty that the small house had already been
Pursuant to Section 7, Rule 47 [71] a judgment taken down, but Pinili still did not come to
of annulment shall set aside the questioned collect.
judgment or final order or resolution and
render the same null and void. On February 17, 1987, the Ballado Spouses
discovered that St. Joseph Realty rescinded
In this case, had the RTC granted the their contracts. Meanwhile, St. Joseph Realty
respondent's petition, the MeTC's July 26 2006 sold Lot Nos. 1 and 2 to Epifanio
judgment would have been declared a nullity. Amoguis,father of Gregorio Amoguis and Tito
This would have resulted to the following Amoguis (collectively, the Amoguis
consequences: as to the respondent, he would Brothers).After making payments, the Amoguis
no longer be required to pay the rentals and Brothers then occupied the lots.Francisco
vacate the subject property; and, as to the confronted the Amoguis Brothers when he saw
petitioner, she would be deprived of her right that the barbed fences, which he had installed
to demand the rentals and to legally eject the around the lots, were taken down. Epifanio told
respondent. Clearly, through the RTC's him that he bought the lots from St. Joseph
judgment on the petition, only the parties' Realty.
interests, i.e., rights and obligation, would have
been affected. Thus, a petition for annulment of The Ballado Spouses filed a Complaint for
judgment is one in personam. It is neither an damages, injunction with writ of preliminary
action in rem nor an action quasi in rem. injunction, mandatory injunction, cancellation
and annulment of titles, and attorney’s fees. St.
Assuming arguendo, that a petition for Joseph Realty filed its Answer. It was its
annulment of judgment is either an action in affirmative defense that the Regional Trial
rem or quasi in rem, still the observance of due Court had no jurisdiction to hear the case, and
that jurisdiction was properly vested in the developer. From the circumstances between St.
Human Settlements Regulatory Commission. Joseph Realty and the Ballado Spouses, there is
no doubt that the then National Housing
The Regional Trial Court ruled in favor of the Authority had jurisdiction to determine the
Ballado Spouses, and against St. Joseph Realty parties’ obligations under the contracts to sell
and the Amoguis Brothers. The Court of and the damages that may have arisen from
Appeals rendered its Decision, affirming the their breach. The Ballado Spouses’ Complaint
Regional Trial Court. Though not raised, the should have been filed before it.
Court of Appeals discussed at the outset the
issue of jurisdiction. The Court of Appeals However, this Court has discussed with great
ruled that since neither St. Joseph Realty nor nuance the legal principle enunciated in Tijam
the Amoguis Brothers raised the issue of vs Sibonghanoy. In estoppel by laches, a
jurisdiction before the Regional Trial Court, claimant has a right that he or she could
they must be considered estopped from raising otherwise exercise if not for his or her delay in
it on appeal. asserting it. This delay in the exercise of the
right unjustly misleads the court and the
ISSUE: opposing party of its waiver. Thus, to claim it
Whether or not the Regional Trial Court’s lack belatedly given the specific circumstances of
of jurisdiction was lost by waiver or estoppel the case would be unjust.

RULING: In summary, Tijam applies to a party claiming

Yes. Petitioners are already estopped from lack of subject matter jurisdiction when:
questioning the jurisdiction of the Regional
Trial Court. Laches had already set in.  there was a statutory right in favor of the
claimant;
Presidential Decree No. 957 instituted the  the statutory right was not invoked;
National Housing Authority as the  an unreasonable length of time lapsed
administrative body with exclusive jurisdiction before the claimant raised the issue of
to regulate the trade and business of jurisdiction;
subdivision and condominium developments.  the claimant actively participated in the
Presidential Decree No. 1344 was later on case and sought affirmative relief from
enacted to add to the National Housing the court without jurisdiction;
Authority’s jurisdiction. Section 1 of  the claimant knew or had constructive
Presidential Decree No. 1344 gave authority to knowledge of which forum possesses
the National Housing Authority to hear and subject matter jurisdiction; and
decide cases: …C. Cases involving specific
 irreparable damage will be caused to the
performance of contractual and statutory
other party who relied on the forum and
obligations filed by buyers of subdivision lot or
the claimant’s implicit waiver.
condominium unit against the owner,
developer, dealer, broker or salesman.
Tijam applies in this case. The allegations,
determinative of subject matter jurisdiction,
Presidential Decree No. 957 was approved on
were apparent on the face of the Complaint.
July 12, 1976, 11 years before the Ballado
Spouses filed their complaint. This means that
The law that determines jurisdiction of the
the law mandating the jurisdiction of the
National Housing Authority had been in place
National Housing Authority, which later on
for more than a decade when the Complaint
became the House and Land Use Regulatory
was filed. St. Joseph Realty raised lack of
Board, had long been in effect when petitioners
jurisdiction in its Answer. Petitioners sought
filed their Answer and participated in trial
affirmative relief from the Regional Trial Court
court proceedings. It behooved them to raise
and actively participated in all stages of the
the issue of jurisdiction then, especially since
proceedings. Therefore, there was no valid
St. Joseph Realty, their co-respondent, raised it
reason for petitioners to raise the issue of
in its Answer albeit superficially and without
jurisdiction only now before this Court.
any discussion.

The Ballado Spouses’ rights and interests lie

not just as buyers of any property, but buyers
of subdivision lots from a subdivision
 8. Tijam vs. Sibonghanoy 2. They filed affirmative relief in the RTC and
G.R. No. L-2150 CA, especially when it sought to be relieved of
liability.
Facts:
In June of 1948, the Judiciary Act of 1948 was The Court accorded jurisdiction by estoppel,
passed. Exactly a month after its passage, or in emphasizing the principle of laches.
July 1948, the Sps Tijam commenced a civil
case in the CFI Cebu against the Sps. Laches is failure or neglect, for an
Sibonghanoy to recover a debt worth P1908. unreasonable and unexplained length of time,
Thereafter, on the basis of the prayer in the to do that which, by exercising due diligence,
complaint, a writ of attachment was issued by could or should have been done earlier; it is
the court against properties of the defendants. negligence or omission to assert a right within
However, the same was soon dissolved upon a reasonable time, warranting a presumption
the filing of a counter-bond by defendants and that the party entitled to assert it either has
the Manila Surety and Fidelity Co., Inc. abandoned it or declined to assert it.

The CFI ruled in favor of the Sps. Tijam and Summary of Principles:
issued a writ of execution against the
defendants and Manila Surety, respectively. 1. Laches as an exception to the rule that
Manila Surety objected to the lack of demand jurisdiction over the subject-matter may be
and sought affirmative relief by requesting that raised at any stage of the proceedings
its liability be lifted. The writ was initially
denied, but after proper demand, it was The rule is that jurisdiction over the subject
eventually granted. matter is conferred upon the courts exclusively
by law, and as the lack of it affects the very
Manila Surety moved to quash due to lack of authority of the court to take cognizance of the
required summary hearing but such was denied case, the objection may be raised at any stage
n 1962, or 14 years later, Manila Surety of the proceedings.
appealed in the CA. CA affirmed CFI decision.
However, considering the facts and
The following year, Manila Surety then filed a circumstances of the present case, a party may
motion to dismiss on the ground that the CFI be barred by laches from invoking this plea for
Cebu did not acquire jurisdiction over the case the first time on appeal for the purpose of
as RA 296 placed actions where the demand annulling everything done in the case with the
does not exceed P2000 (without interest) in active participation of said party invoking the
the inferior courts, not the CFI. plea.

Issue: Whether the CFI Cebu acquired 2. Estoppel

jurisdiction over the case in light of RA 296
A party may be estopped or barred from raising
Ruling: a question in different ways and for different
reasons. Thus we speak of:
The SC ruled in the affirmative. Although RA
296 had already removed actions for recovery a. estoppel in pais,
where the demand is lower than P2000 from
the jurisdiction of the CFI, the issue was never b. estoppel by deed or by record, and
raised until an adverse decision 15 years later,
thus allowing for jurisdiction through c. estoppel by laches.
estoppel/laches.
3. Nature of Laches
According to the Supreme Court, the facts and
circumstances necessitates the application of Laches, in a general sense, is failure or neglect,
estoppel and laches because: for an unreasonable and unexplained length of
time, to do that which, by exercising due
1. The jurisdictional issue was only raised after diligence, could or should have been done
an adverse decision was reached in the CA. earlier; it is negligence or omission to assert a
right within a reasonable time, warranting a
presumption that the party entitled to assert it 9. Velasquez vs Lisondra Land Inc.
either has abandoned it or declined to assert it. [G.R. No. 231290, August 27, 2020]

4. Basis of Laches. Facts:

In 1998, petitioner Perfecto Velasquez, Jr. and
The doctrine of laches or of “stale demands” is respondent company Lisondra Land
based upon grounds of public policy which Incorporated entered into a joint venture
requires, for the peace of society, the agreement to develop a 7,200-square meter
discouragement of stale claims and, unlike the parcel of land into a memorial park. However,
statute of limitations, is not a mere question of due to numerous issues surrounding the
time but is principally a question of the project, including Lisondra Land’s failing to
inequity or unfairness of permitting a right or acquire an HLURB on time, failing to provide
claim to be enforced or asserted. insurance coverage and to pay its share in the
realty taxes, and receiving kickbacks from
5. A party cannot invoke the court’s contractors and agents, Perfecto filed a
jurisdiction and then deny it to escape a complaint for breach of contract before the
penalty. Regional Trial Court (RTC);

It is not right for a party who has affirmed and RTC: Lisondra claimed that RTC had no
invoked the jurisdiction of a court in a jurisdiction, as the violations involved real
particular matter to secure an affirmative relief, estate trade and business practices which are
to afterwards deny that same jurisdiction to within the HLURB exclusive authority;
escape penalty. Lisondra later appeals to CA via special civil
action for certiorari under Rule 65
Upon this same principle is what we said in the
three cases mentioned in the resolution of the CA: Appeal granted. RTC committed grave
Court of Appeals of May 20, 1963, supra, to the abuse of discretion, as complaint is regarding
effect that we frown upon the “undesirable unsound real estate business practices, which
practice” of a party submitting his case for fall under HLURB jurisdiction (Section 1, PD
decision and then accepting the judgment, only 1344); Petitioner files new complaint at
if favorable, and attacking it for lack of HLURB for unsound real estate business
jurisdiction, when adverse. practices vs respondent

6. Separate judgment is not necessary to hold HLURB: Lisondra LaZe parties, and orders
surety liable on the bond. respondent to pay fines, damages and
attorney's fees. Respondent appeals to HLURB
There is no need for a separate action or BoC, alleging that HLURB lacks jurisdiction
judgment against the surety in order to hold it since dispute is between joint venture partners
liable on the bond. A bond filed for discharge of and is an intra-corporate controversy, thus
attachment is, per Section 12 of Rule 59 “to jurisdiction falls under RTC
secure the payment to the plaintiff of any
judgment he may recover in the action,” and HLURB BoC: Dismissed prior ruling due to
stands “in place of the property so released.” lack of jurisdiction… *BUT* reverses ruling
again after petitioner motions for
Hence, after the judgment for the plaintiff has reconsideration; Lisandro appeals case to
become executory and the execution is Office of the President
“returned unsatisfied” (Sec. 17, Rule 59), as in
this case, the liability of the bond automatically OP: Affirms HLURB ruling; Lisandro files
attaches and, in failure of the surety to satisfy petition for review with CA, alleging that that
the judgment against the defendant despite HLURB has no jurisdiction over the subject
demand therefor, writ of execution may issue matter of the case.
against the surety to enforce the obligation of
the bond. CA: Sets aside OP decision. Petitioner’s
complaint dismissed on grounds that HLURB
authority is limited only to cases filed by the
buyers or owners of subdivision lots and
condominium units.
In his current petition before the SC, Perfecto Otherwise, the consequence is revolting as
argued that Lisandro Land is now estopped Lisondra Land would be allowed to make a
from assailing the HLURB's jurisdiction. It is complete mockery of the judicial system.
not allowed to make a complete mockery of the
judicial system resulting in two conflicting Roldan vs. Barrios
appellate court Decisions. G.R. No. 214803 | April 23, 2018
Justice Peralta
Issue:
Whether or not respondent is estopped from FACTS:
assailing HLURB for lack of jurisdiction. Petitioner Alona G. Roldan filed an action for
foreclosure of real estate mortgage against
Held: respondents spouses Clarence I. Barrios and
Yes. CA ruling reversed, OP ruling reinstated Anna Lee T. Barrios and respondent Romel D.
with modification. Matorres. The RTC, however, dismissed the
complaint.
In People v. Casiano: The operation of the
principle of estoppel on the question of According to the RTC, it appearing from the
jurisdiction seemingly depends upon whether complaint that the assessed value of the
the lower court actually had jurisdiction or not. property mortgaged is only P13,380.00 and the
If it had no jurisdiction, but the case was tried instant case being a real action, the assessed
and decided upon the theory that it had value of the property determines the
jurisdiction, the parties are not barred, on jurisdiction. The assessed value of the property
appeal, from assailing such jurisdiction, for the involved being below P20,000.00, it is the first
same "must exist as a matter of law, and may level court that has jurisdiction over the cases.
not be conferred by consent of the parties or by The MR by petitioner was also denied.
estoppel". However, if the lower court had
jurisdiction, and the case was heard and Petitioner filed the instant petition for
decided upon a given theory, such, for instance, certiorari alleging grave abuse of discretion
as that the court had no jurisdiction, the party committed by the RTC when it ordered the
who induced it to adopt such theory will not be dismissal of her foreclosure case without
permitted, on appeal, to assume an prejudice and denying her motion for
inconsistent position - that the lower court had reconsideration. She argues that foreclosure of
jurisdiction. Here, the principle of estoppel mortgage is an action incapable of pecuniary
applies. The rule that jurisdiction is conferred estimation which is within the exclusive
by law, and does not depend upon the will of jurisdiction of the RTC.
the duties, has no bearing thereon.
ISSUE:
In the current case, Perfecto originally filed his Whether or not the RTC committed grave
complaint before the RTC which, has abuse of discretion in dismissing the
jurisdiction over the controversy between the foreclosure cases filed with it on the ground of
parties. Lisondra Land claimed that the case is lack of jurisdiction.
within the HLURB's exclusive authority. It
maintained this theory before the CA which RULING:
eventually ordered the dismissal of the No. The RTC dismissed the foreclosure cases
complaint. Perfecto relied on the final decision finding that being a real action and the
of the appellate court and refiled the action assessed value of the mortgaged property is
against Lisondra Land with the HLURB. only P13,380.00, it is the first level court which
Lisondra Land actively participated in the has jurisdiction over the case and not the RTC.
proceedings before the HLURB. After receiving
an adverse decision, Lisondra Land questioned The allegations and reliefs sought in
the jurisdiction of the HLURB and claimed that petitioner’s action for foreclosure of mortgage
the RTC has the authority to hear the case. This showed that the loan obtained by respondents
is where estoppel operates and bars Lisondra spouses Barrios from petitioner fell due and
Land from assailing the HLURB's jurisdiction. they failed to pay such loan which was secured
The Court cannot countenance Lisondra Land's by a mortgage on the property of the
act of adopting inconsistent postures - first, by respondents spouses; and prayed that in case
attacking the jurisdiction of the trial court and, of default of payment of such mortgage
subsequently, the authority of the HLURB. indebtedness to the court, the property be
ordered sold to answer for the obligation under or a consequence of, the principal relief sought,
the mortgage contract and the accumulated this Court has considered such actions as cases
interest. where the subject of the litigation may not be
estimated in terms of money, and are
It is worthy to mention that the essence of a cognizable exclusively by courts of first
contract of mortgage indebtedness is that a instance (now Regional Trial Courts).
property has been identified or set apart from
the mass of the property of the debtor- Examples of actions incapable of pecuniary
mortgagor as security for the payment of estimation are those for specific performance,
money or the fulfillment of an obligation to support, or foreclosure of mortgage or
answer the amount of indebtedness, in case of annulment of judgment; also actions
default in payment. Foreclosure is but a questioning the validity of a mortgage,
necessary consequence of non-payment of the annulling a deed of sale or conveyance and to
mortgage indebtedness. In a real estate recover the price paid and for rescission, which
mortgage when the principal obligation is not is a counterpart of specific performance.
paid when due, the mortgagee has the right to
foreclose the mortgage and to have the While actions under Sec. 33(3) of B.P. 129 are
property seized and sold with the view of also incapable of pecuniary estimation, the law
applying the proceeds to the payment of the specifically mandates that they are cognizable
obligation. Therefore, the foreclosure suit is a by the MTC, METC, or MCTC where the
real action so far as it is against property, and assessed value of the real property involved
seeks the judicial recognition of a property does exceed P20,000.00 in Metro Manila, or
debt, and an order for the sale of the res. P50,000.00, if located elsewhere. If the value
exceeds P20,000.00 or P50,000.00 as the case
As foreclosure of mortgage is a real action, it is may be, it is the Regional Trial Courts which
the assessed value of the property which have jurisdiction under Sec. 19(2). X XX
determines the court’s jurisdiction.
Considering that the assessed value of the Clearly, the last paragraph clarified that while
mortgaged property is only P13,380.00, the civil actions which involve title to, or
RTC correctly found that the action falls within possession of, real property, or any interest
the jurisdiction of the first level court. therein, are also incapable of pecuniary
estimation as it is not for recovery of money,
Petitioner cites Russell v. Vestil to show that the court’s jurisdiction will be determined by
action for foreclosure of mortgage is an action the assessed value of the property involved.
incapable of pecuniary estimation and,
therefore, within the jurisdiction of the RTC.
Sps. DOMASIAN VS. MANUEL T. DEMDAM
We are not persuaded. In the Russell case, we [ G.R. No. 212349. November 17, 2021 ]
held: GAERLAN, J.:

In Singsong vs. Isabela Sawmill, we had the On October 30, 1995, the petitioners obtained a
occasion to rule that: loan from Manuel T. Demdam in the amount of
P75,000.00. In their loan agreement, the
[I]n determining whether an action is one the petitioners and the respondent agreed at an
subject matter of which is not capable of interest rate of 8% per month, and that the
pecuniary estimation, this Court has adopted loan shall be paid on or before June 30, 1996.
the criterion of first ascertaining the nature of However, when the loan became due and
the principal action or remedy sought. If it is demandable, the petitioners failed to pay the
primarily for the recovery of a sum of money, principal amount and its accrued interest,
the claim is considered capable of pecuniary despite several demands.
estimation, and whether jurisdiction is in the
municipal courts or in the courts of first On August 1, 2001, the respondent filed a
instance would depend on the amount of the complaint for collection of sum of money
claim. against the petitioners, in the principal amount
of P75,000.00 and its accrued interest in the
However, where the basic issue is something amount of P414,000.00 before the RTC.
other than the right to recover a sum of money,
where the money claim is purely incidental to,
On August 15, 2001, the RTC issued summons failed to serve to them the summons and a copy
on petitioners. The Process Server failed to of respondent's amended complaint. The RTC
personally serve the same because the then set the hearing for the Petition for Relief
petitioners were no longer residing at from Judgment on June 10, 2008.
Novaliches, but have been staying in Naga City
for almost two years. On June 6, 2008, the petitioners filed a
Motion to Dismiss, where they alleged
Because the petitioners failed to file an answer that the RTC had no jurisdiction over the
to respondent's amended complaint, the case, since the principal amount being
respondent filed a Motion to Declare claimed by the respondent is only
Defendants in Default dated November 8, P75,000.00, an amount falling within
2001. Sometime in the second week of the jurisdiction of the Metropolitan Trial
November 2001, petitioner Sergio was Court (MeTC).
informed of the case filed by the respondent.
RTC granted the petitioners' petition for relief,
Respondent was the husband of petitioner through a "Motion to Dismiss" filed by
Sergio's eldest sister. Petitioner Sergio went to petitioners-defendants for lack of jurisdiction.
the respondent's house to inquire about the
case and to settle it amicably. During their CA ruled in favor of respondent's appeal. The
conversation, the respondent told his brother- CA ruled that in the amended complaint, the
in-law to attend the hearing of the case respondent prayed for the total amount of
scheduled on November 16, 2001, and P489,000.00, already inclusive of the
afterwards, they would talk about the amicable interest on the loan which had accrued from
settlement that petitioner Sergio was 1996. Furthermore, the CA emphasized that
proposing. such amount of interest is included in the
determination of which court has jurisdiction
As agreed, petitioner Sergio attended the over the case. Since the interest on the loan is a
hearing on November 16, 2001. Nevertheless, primary and inseparable component of the
the RTC granted respondent's Motion to cause of action, not merely incidental thereto,
Declare Defendants in Default in its Order and already determinable at the time of filing
dated January 23, 2002. of the Amended Complaint, it must be included
in the determination of which court has the
After due evaluation of the evidence presented jurisdiction over Demdam's case.
by the respondent, the RTC rendered its Order
dated January 14, 2003, ruling in favor of the Issue:
respondent, and ordering the petitioners to pay Whether or not the CA erred in its finding that
the total amount of the loan and its accrued interest is included in the determination of
interest, moral damages, exemplary damages, jurisdictional amount
attorney's fees, and costs of the suit.
Held:
Notably, the petitioners did not receive a copy Invariably, to determine whether the RTC has
of the RTC's Order dated January 23, 2002, jurisdiction over respondent's claim, the
which declared them in default. Neither did pertinent provisions of BP 129 must be
they receive a copy of the RTC's Order dated examined. Section 19 thereof provides:
January 14, 2003, the judgment by default in
favor of the respondent. Thus, on June 6, 2006, Section 19. Jurisdiction in civil cases. —
the petitioners filed their Petition for Relief Regional Trial Courts shall exercise exclusive
from Judgment before the RTC. original jurisdiction:

On November 14, 2006, the respondent filed xxxx

his Answer, where he argued that the Petition
for Relief from Judgment should be dismissed (8) In all other cases in which the demand,
because it had no merit, and the allegations exclusive of interest, damages of whatever
therein were false. Thereafter, on November kind, attorney's fees, litigation expenses, and
30, 2006, the petitioners filed their Reply, costs or the value of the property in
where they emphasized that the rules on controversy exceeds One hundred thousand
service of summons and substituted service pesos (100,000.00) or, in such other
were not complied with, as the Process Server
abovementioned items exceeds Two hundred cannot claim for damages, attorney's fees, or
thousand pesos (200,000.00). costs of suit.

Meanwhile, Section 5 of R.A. No. 7691, which Therefore, it is in this context that the term
became effective on April 15, 1994, reads: "interest" as found in BP 129 should be viewed,
in accordance with the principle of ejusdem
Section 5. After 5 years from the effectivity of generis, which was explained in Benguet State
this Act, the Jurisdictional amounts mentioned University v. Commission on Audit, in this
in Sec. 19(3), (4), and (8); and Sec. 33(1) of wise:
Batas Pambansa Blg. 129 as amended by this
Act, shall be adjusted to Two hundred Under the principle of ejusdem generis, where
thousand pesos (P200,000.00). 5 years a statute describes things of a particular class
thereafter, such jurisdictional amounts shall be or kind accompanied by words of a generic
adjusted further to Three hundred thousand character, the generic word will usually be
pesos (P300,000.00): Provided, however, That limited to things of a similar nature with those
in the case of Metro Manila, the particularly enumerated, unless there be
abovementioned jurisdictional amounts shall something in the context of the statute which
be adjusted after 5 years from the effectivity of would repel such inference. x x x.
this Act to Four hundred thousand pesos
(P400,000.00). At this juncture, it must be emphasized that
there are generally two types of interest: first,
Applying these provisions, it is clear that at the monetary interest, and second, compensatory
time respondent's Complaint was instituted in interest. As succinctly explained in Odiamar v.
2001, the RTC has jurisdiction for all claims Valencia:
exceeding P200,000.00.
At the outset, the Court notes that there are two
Notably, the petitioners, in insisting that the (2) types of interest, namely, monetary interest
RTC has no jurisdiction, harp on the phrase and compensatory interest. Monetary interest
"exclusive of interest" found in the above- is the compensation fixed by the parties for the
quoted provision of BP 129. According to the use or forbearance of money. On the other
petitioners, the accrued interest, in the amount hand, compensatory interest is that imposed by
of P414,000.00, should not have been included law or by the courts as penalty or indemnity for
in determining the jurisdictional amount. damages. In other words, the right to recover
Considering that the principal amount of the interest arises only either by virtue of a
loan is only P75,000.00, the petitioners assert contract (monetary interest) or as damages for
that the MeTC has jurisdiction over the the delay or failure to pay the principal loan on
respondent's claim, and that the RTC correctly which the interest is demanded (compensatory
dismissed respondent's amended complaint interest).
when it granted petitioners' Petition for Relief
from Judgment. With this in mind, it is clear that what the term
"interest" found in BP 129 only pertains to
This Court does not agree. compensatory interest. Compensatory interest,
which as stated above, is a form of penalty or
A plain reading of Section 19(8) of BP 129 indemnity, and similar to damages, attorney's
shows an enumeration of fees or amounts fees, and costs of suit, is merely incidental and
which should not be included in determining ancillary to a plaintiffs cause of action. In stark
the jurisdictional amount. Apart from interests, contrast, monetary interest is a primary and
BP 129 lists (1) damages; (2) attorney's fees; inseparable component of a plaintiff's cause of
and (3) costs of suit, as excluded from action, considering that it forms part of the
computing the jurisdictional amount. These total amount due, regardless of any breach of
three items are excluded because, as long as the obligation.
main cause of action is not one for damages,
attorney's fees, and costs of suit are merely Applying all the foregoing in the instant case, it
incidental and ancillary to any claim or cause of is beyond cavil that the amount of P414,000.00
action that may be filed. Otherwise stated, comprises of monetary interest because the
without a valid claim or cause of action - a parties agreed to the payment of compensation
breach of contract for instance - a plaintiff for the use or forbearance of money at the rate
of eight percent (8%) per month. This means
that the amount of P414,000.00 cannot be
excluded from the computation of the
jurisdictional amount. Indeed, the CA correctly
held that the RTC had jurisdiction over the case
since the respondent's monetary claim
amounted to P489,000.00, which undeniably
falls within the jurisdiction of the RTC.