Case Summary (G.R. No. 196874)
Factual Background
The amended complaint alleged that the late Alejandro Ramiro was the registered owner of Lot 329, Cad-600, containing approximately 48,639 square meters and covered by Original Certificate of Title No. P-12524. The complaint alleged that Alejandro and his wife, Felicisima Llamada, sold the parcel to spouses Bacaron by a Deed of Sale dated October 20, 1991, and that spouses Bacaron took possession thereafter. The complaint further alleged that the parcel had been previously mortgaged to the Development Bank of the Philippines and that spouses Bacaron paid P430,150.00 to redeem the property. The complaint recited Alejandro's death in 1996 and Felicisima's death in 1997, and alleged that in June 1998 petitioners, led by Henry Ramiro, forcibly dispossessed spouses Bacaron of the property.
Trial Court Proceedings
Petitioners denied the material allegations and raised affirmative defenses that the RTC lacked jurisdiction under B.P. Blg. 129, that the instrument characterized as a Deed of Sale was in truth an equitable mortgage, and that spouses Bacaron were barred by laches. After trial the RTC rendered judgment on July 13, 2007 in favor of spouses Bacaron. The RTC found that spouses Bacaron proved by preponderance of evidence the execution and validity of the Deed of Sale despite loss of the original and that competent secondary evidence established its existence. The RTC also found that the sale price of P400,000.00 corresponded roughly to the amount paid to the DBP. The RTC ordered petitioners to execute a Deed of Extra-Judicial Partition with Confirmation of Sale in favor of spouses Bacaron, directed registration of the parcel in respondents’ names upon presentation of the required documents, directed defendants to vacate and restore possession to plaintiffs, and awarded P30,000.00 as attorney’s fees.
Court of Appeals Ruling
On October 19, 2010 the Court of Appeals affirmed the RTC Decision in toto. The CA upheld RTC jurisdiction on the ground that the amended complaint asserted remedies including declaration of the Deed of Sale’s validity, specific performance, recovery of possession, damages, attorney’s fees, and injunction, which the CA deemed to be causes of action incapable of pecuniary estimation and thus properly joined in the RTC. The CA rejected petitioners’ contention that the transaction was an equitable mortgage, relying on the RTC finding that petitioners had forcibly taken possession in June 1998 and on the dates of payment shown in the tax receipts. The CA also found petitioners’ laches defense unproven. The CA denied petitioners’ motion for reconsideration by Resolution dated May 3, 2011.
Issues on Review
Petitioners sought review under Rule 45 and presented, inter alia, these issues: (one) whether the RTC acquired jurisdiction over the subject matter of the action; (two) whether the instrument dated October 20, 1991 should be treated as an equitable mortgage; and (three) whether spouses Bacaron’s claims were barred by laches.
Parties' Contentions
Petitioners contended that the main thrust of spouses Bacaron’s complaint was recovery of possession and that the complaint therefore primarily involved title to or possession of real property; petitioners asserted that respondents failed to allege the assessed value of the property and thus the RTC lacked jurisdiction under B.P. Blg. 129, as amended by R.A. No. 7691. Petitioners also maintained that the Deed of Sale was an equitable mortgage and that respondents were guilty of laches. Spouses Bacaron countered that the principal reliefs sought were declaration of the Deed of Sale’s validity and specific performance, remedies that are incapable of pecuniary estimation and properly within RTC original jurisdiction, and that they had established payment to the DBP and their possession.
Supreme Court's Analysis and Legal Reasoning
The Court analyzed the material allegations and the reliefs sought in the amended complaint and concluded that, despite the complaint’s labels, its averments and the character of the reliefs revealed that the action primarily involved title to or possession of real property. The Court explained that an action “involving title to real property” rests on a plaintiff’s claim of ownership or legal right to exclusive possession and that the ultimate relief sought by respondents was recovery of the parcel through enforcement of the alleged sale. The Court applied settled principles that the nature of the action and the court with exclusive original jurisdiction are determined by the complaint’s material allegations and the reliefs prayed for, citing Hilario v. Salvador, Gochan v. Gochan, and Padlan v. Dinglasan. Because an action involving title or possession is assigned to a particular level of court according to the assessed value of the property, the Court noted that respondents nowhere alleged the assessed value or any estimated value of the parcel. The Court stressed that it could not take judicial notice of assessed or market values and that jurisdiction is vested in a trial court only upon the filing of the appropriate pleading together with payment of the prescribed docket fee computed on the assessed or alleged value. In the absence of any allegation of assessed or estimated value, the Court held that the correct docket fees could not be computed or paid and that the RTC therefore did not acquire jurisdiction over the subject matter. The Court found that, because jur
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Parties and Procedural Posture
- The Heirs of the Late Spouses Alejandro Ramiro and Felicisima Llamada filed the petition seeking review on certiorari under Rule 45 of the Revised Rules of Court.
- Spouses Eleodoro and Verna Bacaron were the respondents below and the plaintiffs in the civil action filed in the Regional Trial Court.
- The petition assailed the October 19, 2010 Decision and the May 3, 2011 Resolution of the Court of Appeals in CA-G.R. CV No. 01350-MIN which had affirmed the July 13, 2007 Decision of Branch 32, RTC of Lupon, Davao Oriental in Civil Case No. 1966 (045).
- The petition presented issues on whether the RTC acquired jurisdiction, whether the instrument dated October 20, 1991 was an equitable mortgage, and whether the respondents' claims were barred by laches.
Key Factual Allegations
- The property at issue was described as Lot 329, Cad-600 containing about 48,639 square meters and covered by Original Certificate of Title No. P-12524.
- The respondents alleged that the late Alejandro Ramiro and Felicisima Llamada sold the property to the respondents by a Deed of Sale dated October 20, 1991 and that the respondents took possession thereafter.
- The respondents averred that the property had been previously mortgaged to the Development Bank of the Philippines and that they paid DBP P430,150.00 for redemption of the property.
- The respondents alleged that petitioners forcibly dispossessed them of the property in June 1998.
- Petitioners denied the substantive allegations and pleaded affirmative defenses including lack of jurisdiction, that the instrument was an equitable mortgage, and laches.
Trial Court Findings
- The RTC found the Deed of Sale dated October 20, 1991 to be valid despite loss of the original and accepted competent secondary evidence to prove its execution.
- The RTC found that the stated purchase price of P400,000.00 corresponded materially to the amount paid to DBP for redemption.
- The RTC ordered the defendants to execute an extrajudicial partition with confirmation of the sale, directed registration of the property in favor of the plaintiffs, directed defendants to vacate and restore possession to the plaintiffs, and awarded P30,000.00 as reasonable attorney’s fees.
Court of Appeals Ruling
- The Court of Appeals affirmed the RTC Decision in toto on October 19, 2010.
- The CA held that the RTC had jurisdiction because the amended complaint sought declarations of validity and specific performance and other reliefs that the CA deemed incapable of pecuniary estimation.
- The CA rejected petitioners’ characterization of the transaction as an equitable mortgage and found petitioners failed to prove lawful possession or continuous payment of realty taxes prior to the alleged forcible repossession in June 1998.
- The CA a