G.R. No. 160384 - Hilario vs. Salvador

On September 3, 1996, petitioners Cesar T. Hilario – acting for himself and as attorney-in-fact of Ibarra, Nestor, Lina, and Prescilla Hilario – filed a complaint against private respondent Allan T. Salvador.
The petitioners alleged that they are co-owners by inheritance of a parcel of land (Cad. Lot No. 3113-part) located at Sawang, Romblon, which was adjudged as the hereditary share of their father, Brigido M. Hilario, Jr., while he was still single.

It was claimed that in 1989 the respondent constructed a dwelling unit on the property without the knowledge or consent of the petitioners or their predecessors-in-interest.
Despite several demands and an unsuccessful attempt to settle the matter amicably through the Lupon of Barangay Sawang, the respondent refused to vacate the premises, causing the petitioners emotional distress and forcing them to secure legal counsel.

The petitioners prayed for an order directing the respondent to vacate and peacefully turn over possession of the property.
They additionally sought monetary relief including:

Actual damages covering transportation expenses and costs for multiple court appearances;
Attorney’s fees;
Moral and exemplary damages, the amount of which was left to the Court’s discretion;
Other just and equitable relief under the premises.

The respondent filed a motion to dismiss the complaint on jurisdictional grounds, contending that:

The complaint failed to state the assessed value of the land, a mandatory element for determining the correct court of jurisdiction;
The complaint insufficiently described the parcel of land.

The Regional Trial Court (RTC) could take judicial notice of the market value of the property (claimed at P200.00 per square meter, totaling approximately P3,500,000.00 for 14,797 square meters); and
The motion to dismiss was premature, noting that evidence regarding the property's high market value would be introduced later.

On November 7, 1996, the RTC denied the motion to dismiss, holding that the action was “incapable of pecuniary estimation” given the nature of the claim.
The respondent subsequently filed an answer with a counterclaim, alleging that the disputed property was actually the conjugal property of his grandparents.
During the trial, the petitioners adduced Tax Declaration No. 8590-A, which indicated an assessed value of P5,950.00 for the property as of 1991.
On June 3, 1999, the trial court rendered judgment in favor of the petitioners ordering the respondent to vacate and turn over the property, while dismissing the respondent’s counterclaim.

The private respondent, along with respondent-intervenor Regidor Salvador, appealed the RTC decision to the Court of Appeals (CA).
On May 23, 2003, the CA reversed the RTC’s ruling and dismissed the complaint on the ground of lack of jurisdiction, holding that:

The proper jurisdiction over an action involving title or possession of real property is determined by the assessed value of the property;
Since the assessed value in question did not exceed P20,000.00, the action falls exclusively within the jurisdiction of the Municipal Trial Court (MTC) of Romblon.

The petitioners filed a motion for reconsideration which was subsequently denied, leading them to elevate the case through a petition for review on certiorari under Rule 45 of the Revised Rules of Court.
The petitioners contended, among other errors, that:

The CA erred in characterizing their case as falling within the exclusive jurisdiction of the MTC; and
The CA should have decided the merits of the case instead of ordering refiling in the proper court.

Whether the RTC possessed proper original and exclusive jurisdiction over the case given that the complaint did not explicitly allege the assessed value of the property.
Whether judicial notice of the market value (alleged at P3,500,000.00) could override the absence of an allegation or evidence regarding the assessed value.

Whether the petitioners’ suit is properly characterized as an accion reinvindicatoria (claiming recovery of ownership and possession) or an accion publiciana (aimed solely at recovering possession or the right to possess).

Whether the inclusion of a substantial claim for damages (exceeding P20,000.00) affects the jurisdiction of the court even though damages are deemed incidental to the main cause of action.

Whether the RTC’s and later the CA’s decisions correctly applied the jurisdictional provisions of Section 33 of B.P. Blg. 129, as amended by R.A. No. 7691, and Section 19(2) thereof.