G.R. No. 136109 - Radio Communications of the Philippines, Inc. vs. Court of Appeals

On June 18, 1997, private respondent Manuel Dulawon filed a complaint for breach of contract of lease with damages against petitioner Radio Communications of the Philippines, Inc. (RCPI) before the Regional Trial Court of Tabuk, Kalinga, Branch 25.
The complaint detailed the alleged negotiation and execution of a lease contract between the parties, indicating that the lease was for a period of three years, from January 1, 1996 to January 1, 1998.
Specific allegations included:

The rental payments, with the advance for 1996 being paid in installments rather than as a lump sum.
The monthly rental amounts for the years 1997 and 1998, with a discrepancy noted in the payment method (e.g., a stale check for one month’s rental).
The defendant’s subsequent removal of its equipment and personnel from the leased premises and failure to pay rentals for the months of January to March 1997.
A claim for moral damages arising from alleged anxiety, emotional stress, and sleepless nights, along with a demand for exemplary damages as part of the relief.

Petitioner RCPI filed a motion to dismiss the complaint on the ground of lack of jurisdiction.

The petitioner argued that the complaint was essentially for the collection of unpaid rentals amounting to P84,000.00, which falls within the jurisdictional limit of the Municipal Trial Court.
RCPI contended that the Regional Trial Court, having jurisdiction for cases exceeding P100,000.00 (or the applicable adjusted amount in Metro Manila), should not entertain the complaint.

The Regional Trial Court denied the motion to dismiss.
Petitioner’s subsequent motion for reconsideration was likewise denied by the trial court.

Dissatisfied with the trial court’s ruling, petitioner elevated the matter to the Court of Appeals through a petition for certiorari.
On April 30, 1998, the Court of Appeals dismissed petitioner’s petition.
A motion for reconsideration of the Court of Appeals’ decision was also filed by petitioner but was denied on October 15, 1998.

The crux of the matter turned on the issue of jurisdiction: whether the Regional Trial Court had proper jurisdiction over the complaint.
Analysis of the complaint’s nature showed that, despite the incidental claim for collection of unpaid rentals, the primary cause of action was for specific performance of the lease contract.
The contention centered on whether the remedy sought – which involved enforcing the lease contract – was one not susceptible to pecuniary estimation, thus falling exclusively under the jurisdiction of the Regional Trial Court.

Whether the Regional Trial Court had jurisdiction over a case involving alleged collection of unpaid rentals that amounted to P84,000.00, a sum below the statutory threshold for regional courts.
Whether the inclusion of incidental claims (such as damages and unpaid rentals) in a complaint primarily seeking specific performance alters the court’s jurisdictional limits.

Whether the essence of the suit was primarily one for specific performance rather than a mere monetary claim.
Whether the contractual breach, by its nature, rendered the cause of action incapable of pecuniary estimation, thereby removing it from the ambit of cases that could be dismissed based solely on the monetary threshold.

Whether the monetary claims for unpaid rentals and damages, being ancillary to the main action for specific performance, should be considered in determining the jurisdictional amount.
How the established jurisprudence on the subject matter (citing cases like Manufactureras Distributors, Inc. v. Siu Liong and Russell, et al., v. Vestil, et al.) applies in resolving the jurisdictional quandary.