Case Summary (G.R. No. 136109)
Key Dates
Complaint filed in the RTC: June 18, 1997.
Court of Appeals decision: April 30, 1998; motion for reconsideration denied October 15, 1998.
Supreme Court decision date (for choice of constitutional basis): August 1, 2002.
Procedural History
Private respondent filed a complaint in the RTC for breach of lease contract with damages. Petitioner moved to dismiss for lack of jurisdiction, asserting the action was essentially for collection of unpaid rentals amounting to P84,000.00 and therefore within the jurisdictional limit of the Municipal Trial Court. The RTC denied the motion to dismiss and denied reconsideration. Petitioner sought certiorari relief from the Court of Appeals, which dismissed the petition and denied reconsideration. Petitioner then filed the present petition for review with the Supreme Court.
Facts Alleged in the Complaint
The parties entered into a negotiated lease of a portion of the plaintiff’s building effective January 1, 1996 to January 1, 1998. Rental payments were to be advanced for 1996 but paid in installments; one check was stale and replaced only after demand. Monthly rentals were alleged to be P3,300.00 for 1997 and P3,700.00 for 1998. Petitioner allegedly removed equipment from the premises and failed to pay rentals for January to March 1997, which purportedly accelerated payments for 1997 and 1998 and constituted a unilateral premature termination of the lease. Plaintiff alleged emotional distress and sought moral and exemplary damages in addition to unpaid rentals (claimed at P84,000.00).
Issue Presented
Whether the Regional Trial Court has jurisdiction over the complaint filed by private respondent, given that the monetary claim for unpaid rentals (P84,000.00) falls within the monetary threshold of lower courts but the complaint also seeks specific performance of the lease.
Applicable Law and Administrative Interpretation
Statutory jurisdiction: Section 19 of Batas Pambansa Blg. 129 (as amended by R.A. No. 7691) confers exclusive original jurisdiction on the RTC in: (1) civil actions whose subject is incapable of pecuniary estimation; and (8) cases where the demand, exclusive of interest, damages of whatever kind, attorney’s fees, litigation expenses and costs, exceeds P100,000.00 (threshold adjustments under R.A. No. 7691 and Circular 21-99 noted). Administrative Circular No. 09‑94 clarifies that the exclusion of “damages of whatever kind” from the jurisdictional computation applies only where damages are merely incidental or consequential to the main cause of action; where the damages claim is the main cause of action or a distinct cause of action, the damages amount is to be considered in determining jurisdiction.
Governing Jurisprudence Cited
The Court relied on prior holdings that:
- The nature of the principal action or remedy sought determines whether the subject of litigation is capable of pecuniary estimation; if the action is primarily for the recovery of a sum of money, jurisdiction depends on the amount claimed. If the basic issue is other than recovery of money and the money claim is incidental, the subject may be incapable of pecuniary estimation and is within RTC jurisdiction (Russell v. Vestil and related authorities).
- Actions for specific performance are incapable of pecuniary estimation and therefore fall under the exclusive jurisdiction of the RTC (Manufacturer’s Distributors, Inc. v. Siu Liong; Davao Abaca Plantation Co. v. Dole, citing prior authorities).
Court’s Analysis of the Nature of the Action
The Court examined the complaint’s averments and determined that the complaint was primarily for specific performance — to enforce the three‑year lease — rather than a simple action to collect a sum certain. The monetary claims (unpaid rentals and damages) were characterized as incidental consequences of the principal relief sought (specific performance). The Court emphasized that jurisdiction is determined by the allegations in the complaint and the character
...continue readingCase Syllabus (G.R. No. 136109)
Case Citation and Court
- Reported at 435 Phil. 62, First Division, G.R. No. 136109, August 01, 2002.
- Decision penned by Justice Ynares‑Santiago.
- Concurring justices: Davide, Jr., C.J. (Chairman), Vitug, Kapunan, and Austria‑Martinez, JJ.
- The Court of Appeals decision under review was rendered by the Thirteenth Division composed of Associate Justices Angelina Sandoval‑Gutierrez (Chairman and ponente), Romeo J. Callejo, Sr., and Mariano M. Umali.
Nature of the Case and Relief Sought
- Original cause: Complaint filed by private respondent Manuel Dulawon for breach of contract of lease with damages against petitioner Radio Communications of the Philippines, Inc. (RCPI).
- Relief principally sought: Enforcement of the three‑year lease (specific performance) and consequential monetary relief including unpaid rentals (P84,000.00) plus damages (moral, exemplary, and other damages alleged).
- Characterization by parties: Petitioner characterized the complaint as primarily for collection of unpaid rentals (a sum not exceeding the Regional Trial Court jurisdictional threshold then in force), arguing that the Municipal Trial Court had jurisdiction.
Relevant Dates and Procedural History
- June 18, 1997: Manuel Dulawon filed the complaint in the Regional Trial Court (RTC), Tabuk, Kalinga, Branch 25.
- Trial court: Denied petitioner’s motion to dismiss for lack of jurisdiction (petitioner's contention that Municipal Trial Court had jurisdiction because the monetary claim was P84,000.00).
- Trial court: Denied petitioner’s motion for reconsideration of the denial of the motion to dismiss.
- Petitioner elevated the matter to the Court of Appeals by petition for certiorari in CA‑G.R. SP No. 45987.
- April 30, 1998: Court of Appeals dismissed the petition (dispositive: petition DENIED DUE COURSE and DISMISSED; costs against petitioner).
- October 15, 1998: Court of Appeals denied petitioner’s motion for reconsideration.
- August 01, 2002: Supreme Court rendered final decision denying the petition and affirming the Court of Appeals.
Material Allegations in the Complaint (as pleaded by private respondent)
- Negotiation and execution: Sometime late 1995 petitioner negotiated lease of a portion of plaintiff’s building; lease effective January 1, 1996 to January 1, 1998 (three years) with advance payment for 1996 to be made in installments.
- Payment problems: One check for a month’s rental for 1996 was stale and had to be replaced after demand.
- Contractual rental amounts: Monthly rental P3,300.00 for 1997 and P3,700.00 for 1998 as per contract.
- Alleged breach: Petitioner removed equipment and personalty from leased premises and failed to pay rentals for January to March 1997; this conduct allegedly accelerated the payment of all rentals for 1997 and 1998.
- Consequences alleged: The unilateral acts amounted to breach of contract, caused serious anxiety, emotional stress, and sleepless nights (claimed moral damages); plaintiff made written complaints (letter dated January 7, 1997 and counsel’s letter) which were unheeded; plaintiff alleged that unilateral termination deprived him of the opportunity to lease to others and sought exemplary damages to “teach a lesson.”
Central Legal Issue Presented to the Supreme Court
- Whether the Regional Trial Court has jurisdiction over the complaint filed by Manuel Dulawon, where plaintiff’s complaint primarily seeks enforcement of a lease (specific performance) yet includes monetary claims for unpaid rentals amounting to P84,000.00 plus damages.
Statutory and Administrative Authorities Invoked
- Batas Pambansa Blg. 129 (as amended by Republic Act No. 7691), Section 19 on jurisdiction of Regional Trial Courts:
- RTCs exercise exclusive original jurisdiction in, inter alia, “(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation;” and
- “(8) In all other cases in which the demand, exclusive of interest, damages of whatever kind