Posted by Roque H. Rios Jr. on 25 July 2018
FACTS:
On March 19, 1993, a Joint Venture Agreement (JVA) was entered into between respondents National Housing Authority (NHA) and R-II Builders, Inc. (R-II Builders) for the implementation of the Smokey Mountain Development and Reclamation Project (SMDRP).
On September 26, 1994, NHA and R-II Builders, alongside petitioner Housing Guaranty Corporation (HGC) as guarantor and the Philippine National Bank (PNB) as trustee, entered into an Asset Pool Formation Trust Agreement which provided the mechanics for the implementation of the project.
On the same date, the parties executed a Contract of Guaranty whereby HGC, upon the call made by PNB and conditions therein specified, undertook to redeem the regular Smokey Mountain Project Participation Certificate (SMPPCs) upon maturity and to pay the simple interest thereon to the extent of 8.5% per annum.
Subsequent to R-II Builders' infusion of P300 million into the project, the issuance of the SMPPCs and the termination of PNB's services on January 29, 2001, NHA, R-II Builders and HGC agreed on the institution of Planters Development Bank (PDB) as trustee on January 29, 2001. All the Regular SMPPCs issued will reach maturity and unredeemed, amounting to an aggregate face value of P2.513 Billion by October 22, 2002. The lack of liquid assets with which to effect redemption of the regular SMPPCs prompted PDB to make a call on HGC's guaranty and to execute in the latter's favor a Deed of Assignment and Conveyance (DAC) of the entire Asset Pool.
On September 1, 2005, R-II Builders filed a complaint against HGC and NHA before Branch 24 of the Manila Regional Trial Court, a Special Commercial Court (SCC). The complaint contained that HGC's failure to redeem the outstanding regular SMPPCs despite obtaining possession of the Asset Pool ballooned the stipulated interests and materially prejudiced its stake on the residual values of the Asset Pool, R-II Builders alleged that the DAC should be rescinded since PDB exceeded its authority in executing the same prior to HGC's redemption and payment of the guaranteed SMPPCs.
Having filed its answer to the complaint, HGC went to move for the conduct of a preliminary hearing on its affirmative defenses which included such grounds as lack of jurisdiction. On August 2, 2007, R-II Builders, in turn, filed a motion to admit its Amended and Supplemental Complaint which deleted the prayer for resolution of the DAC initially prayed for in its original complaint. In lieu thereof, said pleading introduced causes of action for conveyance of title to and/or possession of the entire Asset Pool, for NHA to pay the Asset Pool the sum of P1,803,729,757.88 representing the cost of the charges and additional works on the project and for increased indemnity for attorney's fees in the sum of P2,000,000.00.
Consistent with its joint order dated January 2, 2008 which held that R-II Builders' complaint was an ordinary civil action and not an intra-corporate controversy. Manila RTC issued a clarifictory order stating that it did not have the authority to hear the case. As a consequence, the case was re-raffled to respondent Branch 22 of the Manila RTC. R-II Builders filed a motion to admit its Second Amended Complaint on the ground that its previous Amended and Supplemental Complaint had not yet been admitted in view of the non-payment of the correct docket fees therefor. The said Second Amended Complaint notably resurrected R-II Builders' cause of action for resolution of the DAC, deleted its causes of action for accounting and conveyance of title to and/or possession of the entire Asset Pool, reduced the claim for attorney's fees to P500,000.00, sought its appointment as Receiver pursuant to Rule 59 of the Rules of Court and after an inventory in said capacity, prayed for approval of the liquidation and distribution of the Asset Pool in accordance with the parties' agreements.
On September 2, 2008, HGC filed its opposition to the admission of R-II Builders' Second Amended Complaint on the ground that respondent RTC had no jurisdiction to act on the case until payment of the correct docket fees has been executed.
ISSUES:
I. Whether or not Branch 24 of Manila RTC, a Special Commercial Court has jurisdiction over the case.
II. Whether or not a branch of the Regional Trial Court which has no jurisdiction to try and decide a case has authority to remand the same to another co-equal Court in order to cure the defects on venue and jurisdiction.
HELD:
I.
No, the said court significantly took cognizance of its lack of jurisdiction over the case in the following wise:
At the outset, it must be stated that this Court is a designated Special Commercial Court tasked to try and hear, among others, intra-corporate controversies to the exclusion of ordinary civil cases.
When the case was initially assigned to this Court, it was classified as an intra-corporate case. However, in the ensuing proceedings relative to the affirmative defences raised by defendants, even the plaintiff conceded that the case is not an intra-corporate controversy or even if it is, this Court is without authority to hear the same as the parties are all housed in Quezon City.
Thus, the more prudent course to take was for this Court to declare that it does not have the authority to hear the complaint it being an ordinary civil action. As to whether it is personal or civil, this Court would rather leave the resolution of the same to Branch 22 of this Court.
Being outside the jurisdiction of Special Commercial Courts, the rule is settled that cases which are civil in nature, like the one commenced by R-II Builders, should be threshed out in a regular court.
II.
No. Calleja ruled on the issue, thus: Such being the case, RTC Branch 58 did not have the requisite authority or power to order the transfer of the case to another branch of the Regional Trial Court. The only action that RTC Branch 58 could take on the matter was to dismiss the petition for lack of jurisdiction.
A re-raffle which causes a transfer of the case involves courts with the same subject matter jurisdiction; it cannot involve courts which have different jurisdictions exclusive of the other. More apt in this case, a re-raffle of a case cannot cure a jurisdictional defect.
Added by WinLawSuites Team:
In De Leon v. Court of Appeals,[8] this Court had, of course, ruled that a case for rescission or annulment of contract is not susceptible of pecuniary estimation although it may eventually result in the recovery of real property. Taking into consideration the allegations and the nature of the relief sought in the complaint in the subsequent case of Serrano v. Delica,[9] however, this Court determined the existence of a real action and ordered the payment of the appropriate docket fees for a complaint for cancellation of sale which prayed for both permanent and preliminary injunction aimed at the restoration of possession of the land in litigation is a real action. In discounting the apparent conflict in said rulings, the Court went on to rule as follows in Ruby Shelter Builders and Realty Development Corporation v. Hon. Pablo C, Formaran,[10] to wit:
HELD:
I.
No, the said court significantly took cognizance of its lack of jurisdiction over the case in the following wise:
At the outset, it must be stated that this Court is a designated Special Commercial Court tasked to try and hear, among others, intra-corporate controversies to the exclusion of ordinary civil cases.
When the case was initially assigned to this Court, it was classified as an intra-corporate case. However, in the ensuing proceedings relative to the affirmative defences raised by defendants, even the plaintiff conceded that the case is not an intra-corporate controversy or even if it is, this Court is without authority to hear the same as the parties are all housed in Quezon City.
Thus, the more prudent course to take was for this Court to declare that it does not have the authority to hear the complaint it being an ordinary civil action. As to whether it is personal or civil, this Court would rather leave the resolution of the same to Branch 22 of this Court.
Being outside the jurisdiction of Special Commercial Courts, the rule is settled that cases which are civil in nature, like the one commenced by R-II Builders, should be threshed out in a regular court.
II.
No. Calleja ruled on the issue, thus: Such being the case, RTC Branch 58 did not have the requisite authority or power to order the transfer of the case to another branch of the Regional Trial Court. The only action that RTC Branch 58 could take on the matter was to dismiss the petition for lack of jurisdiction.
A re-raffle which causes a transfer of the case involves courts with the same subject matter jurisdiction; it cannot involve courts which have different jurisdictions exclusive of the other. More apt in this case, a re-raffle of a case cannot cure a jurisdictional defect.
Added by WinLawSuites Team:
In De Leon v. Court of Appeals,[8] this Court had, of course, ruled that a case for rescission or annulment of contract is not susceptible of pecuniary estimation although it may eventually result in the recovery of real property. Taking into consideration the allegations and the nature of the relief sought in the complaint in the subsequent case of Serrano v. Delica,[9] however, this Court determined the existence of a real action and ordered the payment of the appropriate docket fees for a complaint for cancellation of sale which prayed for both permanent and preliminary injunction aimed at the restoration of possession of the land in litigation is a real action. In discounting the apparent conflict in said rulings, the Court went on to rule as follows in Ruby Shelter Builders and Realty Development Corporation v. Hon. Pablo C, Formaran,[10] to wit:
The Court x x x does not perceive a contradiction between Serrano and the Spouses De Leon. The Court calls attention to the following statement in Spouses De Leon: A review of the jurisprudence of this Court indicates that in determining whether an action is one the subject matter of which is not capable of pecuniary estimation, this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. Necessarily, the determination must be done on a case-to-case basis, depending on the facts and circumstances of each. What petitioner conveniently ignores is that in Spouses De Leon, the action therein that private respondents instituted before the RTC was solely for annulment or rescission of the contract of sale over a real property. There appeared to be no transfer of title or possession to the adverse party x x x. (Underscoring Supplied)
