G.R. No. 166883 - Taguinod vs. Dalupang

On April 5, 2004, respondent Vita N. Kalashian filed a complaint for damages (Civil Case No. 5794-R) before the Regional Trial Court (RTC) of Baguio City, Branch 60.
The complaint alleged that petitioner Irene Sante, inside a police station in Natividad, Pangasinan, uttered profane and defamatory words against her in the presence of others, involving a friend and security guard Albert Gacusan, a suspect in a killing of petitioners' relative.
Respondent claimed moral damages of P300,000.00; exemplary damages of P50,000.00; attorney’s fees of P50,000.00; litigation expenses of P20,000.00; and costs of suit.

Petitioners moved to dismiss the complaint on the ground that the Municipal Trial Court in Cities (MTCC) had exclusive jurisdiction because the claim for moral damages was not more than P300,000.00, and exemplary damages should be excluded for jurisdictional computation.
On June 24, 2004, the RTC denied the motion citing the ruling in Movers-Baseco Integrated Port Services, Inc. v. Cyborg Leasing Corporation, holding the total claim as P420,000.00, which was above the MTCC jurisdictional amount outside Metro Manila.
The trial court reiterated this denial on July 7 and July 19, 2004, including denial of petitioners’ motion for reconsideration.

On August 2, 2004, petitioners filed a petition for certiorari and prohibition before the Court of Appeals (CA), docketed as CA-G.R. SP No. 85465, assailing the RTC orders denying the motion to dismiss.

On July 14, 2004, respondent and her husband filed an amended complaint increasing the claim for moral damages from P300,000.00 to P1,000,000.00.
Petitioners filed a motion to dismiss with an answer ad cautelam and counterclaim, but the RTC denied this motion on September 17, 2004.

Petitioners filed another petition for certiorari before the CA, docketed as CA-G.R. SP No. 87563, claiming that the RTC committed grave abuse of discretion in allowing the amended complaint increasing moral damages.
The case was raffled to the Seventeenth Division of the Court of Appeals.

On January 23, 2006, the Seventh Division of the CA in CA-G.R. SP No. 85465 found grave abuse of discretion in the RTC’s denial of the motion to dismiss, ordered dismissal of the case for lack of jurisdiction, ruling that MTCC had jurisdiction because exemplary damages are not included in jurisdictional computation.
Conversely, on January 31, 2006, the Seventeenth Division of the CA in CA-G.R. SP No. 87563 affirmed the RTC’s denial of petitioners’ motion to dismiss ad cautelam and allowed the amendment increasing the claim for moral damages. The CA ruled that the total or aggregate amount, including exemplary damages and attorney’s fees, constitutes the basis of jurisdiction.

Whether the RTC had jurisdiction given the amount in controversy considering exemplary damages should be excluded;
Whether the RTC abused discretion in allowing the amended complaint increasing damages amid a pending CA petition.

Did the Regional Trial Court of Baguio City, Branch 60, acquire jurisdiction over the complaint for damages purportedly amounting to only P300,000.00 excluding exemplary damages?
Did the RTC commit grave abuse of discretion by allowing the complainant to amend the complaint increasing the amount of moral damages to P1,000,000.00 despite the pendency of a petition for certiorari before the Court of Appeals?