G.R. No. 125865 - Liang vs. People

Case Summary (G.R. No. 125865)

Key Dates

June 19, 2002 – Original P40 million loan secured by mortgage on 1,076 parcels
March 15 and September 15, 2003 – Amendments increasing loan to P100 million
January 2, 2006 – PBCOM’s extrajudicial foreclosure petition filed
December 29, 2011 – Properties auctioned (same day RTC grants motion treating suit as non-pecuniary)
January 2–4, 2012 – Complaint for annulment of mortgage filed; 72-hour TRO issued and then extended by status quo ante order
April 3 and July 25, 2012 – RTC dismisses complaint for lack of jurisdiction and denies reconsideration
August 17, 2012 – Petition for review on certiorari under Rule 45 filed with the Supreme Court

Applicable Law

1987 Constitution (post-1990 decision) on jurisdiction (Art. VIII, Sec. 5)
Batas Pambansa Blg. 129, Sec. 19(1) – RTC jurisdiction over non-pecuniary actions
Rules of Court: Rule 45 (certiorari appeal on questions of law), Rule 58, Sec. 5 (TRO and preliminary injunction)
Act No. 3135, Sec. 6 (redemption period after extrajudicial sale)

Procedural History

First Sarmiento obtained and later amended its loan with PBCOM, culminating in a P100 million mortgage. After alleged non‐receipt of funds and unpaid interest, PBCOM filed for extrajudicial foreclosure. First Sarmiento sought annulment of the mortgage and injunctive relief, paying a P5,545 filing fee based on a clerk’s valuation that treated the suit as non-pecuniary. The RTC dismissed for lack of jurisdiction, citing Home Guaranty Corp. v. R-II Builders, which it interpreted to treat rescission actions as real actions requiring fees based on property value.

Issue on Subject-Matter Jurisdiction

Whether an action for annulment of real estate mortgage is “incapable of pecuniary estimation” and thus within RTC jurisdiction upon payment of minimal docket fees, or whether it is a real action requiring fees based on the fair market value of the mortgaged properties.

Nature of the Principal Relief Sought

Jurisdiction over subject matter is determined by the principal relief sought. First Sarmiento pleaded purely for annulment of the mortgage—challenging the loan contract for want of consideration—without seeking reconveyance or restoration of title or possession. Monetary or proprietary consequences flowing from annulment are incidental, not the primary object.

Jurisprudential Framework on Pecuniary Estimation

Under Lapitan v. Scandia and subsequent rulings, actions whose principal relief is the recovery of money or property are pecuniary; actions whose main relief is something else (e.g., mortgage annulment, support, specific performance) are non-pecuniary even if monetary or proprietary consequences follow. First Sarmiento’s suit falls within the non-pecuniary category.

Docket Fees and Acquisition of Jurisdiction

First Sarmiento paid docket fees computed under the non-pecuniary schedule. There is no evidence of bad faith or intent to defraud. Under Fedman Dev’t Corp. v. Agcaoili, payment of assessed fees confers jurisdiction; deficiency in fees, if any, warrants assessment as a lien rather than dismissal.

Injunctive Relief and TRO Extension

The RTC’s indefinite status quo ante order extended the 72-hour ex parte TRO beyond the 20-day limit imposed by Rule 58, Sec.

Case Syllabus (G.R. No. 125865)

Facts

On June 19, 2002, First Sarmiento obtained a ₱40,000,000 loan from PBCOM secured by real-estate mortgages over 1,076 parcels of land.
The loan was amended on March 15, 2003 (increasing to ₱51,200,000) and on September 15, 2003 (increasing to ₱100,000,000).
On January 2, 2006, PBCOM filed a Petition for Extrajudicial Foreclosure, alleging First Sarmiento’s non-payment despite repeated demand letters.
On December 27, 2011, First Sarmiento attempted to file a Complaint for annulment of the mortgage; the Clerk of Court refused due to missing tax declarations needed to compute docket fees.
On December 29, 2011, the RTC granted First Sarmiento’s urgent motion to treat its action as incapable of pecuniary estimation; on the same day, the sheriff auctioned the mortgaged properties to PBCOM.
On January 2, 2012, First Sarmiento refiled its Complaint for annulment of mortgage, prayed for a TRO and preliminary injunction, and paid ₱5,545 docket fees.
The RTC issued an ex-parte TRO for 72 hours on January 2, 2012, then directed a status quo ante order on January 4, 2012.
On January 24, 2012, the sheriff issued a certificate of sale to PBCOM.

Procedural History

April 3, 2012: Branch 11, RTC of Malolos City dismissed the Complaint for lack of jurisdiction, citing Home Guaranty Corp. v. R. II Builders (a Supreme Court division case) and plaintiff’s failure to pay proper docket fees.
July 25, 2012: RTC denied First Sarmiento’s motion for reconsideration.
August 17, 2012: First Sarmiento filed a Petition for Review under Rule 45, arguing that its action was incapable of pecuniary estimation and invoking En Banc precedents (Lu v. Lu Ym; Bunayog v. Tunas).
September 19, 2012: SC directed PBCOM to comment; PBCOM maintained the action was a real action and disputed the indefinite TRO.
November 26, 2012 to May 30, 2013: Petitioner filed its reply and memoranda; respondent likewise filed its memorandum.

Issue

Whether the RTC acquired jurisdiction over First Sarmiento’s Complaint for annulment of real estate mortgage by virtue of the docket fees paid, considering the action’s nature—capable or incapable of pecuniary estimation—and whether the TRO wa