Gomez v. Montalban
REITERATIONFacts
The Antecedents: Petitioner Elmer F. Gomez filed a complaint against respondent Ma. Lita A. Montalban for a sum of money, damages, and attorney's fees. Gomez alleged that Montalban obtained a loan of P40,000.00 on August 26, 1998, with a proposed interest rate of 15% per month. As security, Montalban issued a postdated check for P46,000.00, covering the principal and one month's interest. Montalban failed to pay the loan when due, and the check was dishonored. By July 4, 2002, Gomez claimed the outstanding obligation, including accrued interest, had reached P238,000.00. Procedural History: Summons was served on Montalban, but she failed to file an Answer, leading to her being declared in default. The Regional Trial Court (RTC) allowed Gomez to present evidence ex parte and subsequently rendered a decision on May 4, 2004, ordering Montalban to pay P40,000.00 in principal, P57,600.00 in interest at 24% per annum, and P15,000.00 in attorney's fees. Montalban then filed a Petition for Relief from Judgment, alleging improper service of summons and lack of jurisdiction due to the principal loan amount falling within the Municipal Trial Court's jurisdiction. After several postponements, her petition was dismissed for lack of interest. However, the RTC reconsidered this dismissal and, on June 20, 2006, granted the Petition for Relief, setting aside its previous decision for lack of jurisdiction. The RTC denied Gomez's motion for reconsideration on August 2, 2006. The Petition: Petitioner Gomez filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to reverse the RTC's orders that granted Montalban's Petition for Relief and dismissed his original complaint. Gomez argues that the RTC erred in granting the relief from judgment, contending that Montalban's resort to a petition for relief was premature as the judgment had not yet become final and executory. He further asserts that Montalban's grounds for relief, such as alleged improper service of summons and mistake, do not meet the requirements for extrinsic fraud, accident, mistake, or excusable negligence. Gomez also maintains that the RTC correctly had jurisdiction over the case based on the amount claimed in the complaint, including accrued interest, at the time of filing.
Issue(s)
Whether the Regional Trial Court has jurisdiction over the case given the principal amount of the obligation versus the total amount claimed. Whether the respondent's resort to a Petition for Relief from Judgment was proper.
Ruling
The Supreme Court GRANTED the petition. The Decision dated May 4, 2004, of the Regional Trial Court of Davao, Branch 13, was REINSTATED, and the Order dated June 20, 2006, granting the petition for relief from judgment was SET ASIDE.
Ratio Decidendi
On the issue of jurisdiction: The Supreme Court held that jurisdiction over the subject matter is determined by the allegations in the complaint, which constitute a concise statement of the ultimate facts constituting the plaintiff's cause of action. In this case, the petitioner's complaint explicitly claimed a total amount of ₱238,000.00, inclusive of principal and accrued interest, at the time of filing. This amount clearly falls within the jurisdictional competence of the Regional Trial Court (RTC). The Court emphasized that jurisdiction is conferred by law and is determined by the allegations in the complaint, irrespective of the amount ultimately proven or awarded. Therefore, the RTC correctly assumed jurisdiction over the case based on the claims made in the complaint. On the propriety of the Petition for Relief from Judgment: The Supreme Court found that the RTC erred in granting the respondent's Petition for Relief from Judgment. Firstly, a petition for relief under Rule 38 is only available against a final and executory judgment. In this case, the respondent filed her petition on May 28, 2004, within the 15-day period to file a motion for reconsideration or appeal from the May 4, 2004 Decision, making the resort to a petition for relief premature. Secondly, the grounds for relief under Rule 38, namely fraud, accident, mistake, or excusable negligence, were not sufficiently established. The alleged lack of effective service of summons, where a person other than the respondent received it, was contradicted by the Sheriff's Return of Service, which is prima facie evidence of its contents. Furthermore, the respondent's failure to file an Answer was attributed to her own inaction or negligence, which was not excusable. The Court reiterated that a petition for relief is an equitable remedy for exceptional circumstances and cannot be used to revive a lost right to appeal due to inexcusable negligence. The respondent had other available remedies, such as a motion for reconsideration, new trial, or appeal, which she failed to timely pursue.
Main Doctrine
A Petition for Relief from Judgment under Rule 38 is an equitable remedy available only in exceptional cases where no other adequate remedy exists. It is premature and inappropriate if filed before the judgment has attained finality, and cannot be used to revive the right to appeal lost due to inexcusable negligence. Jurisdiction over the subject matter is determined by the allegations in the complaint, not by the amount ultimately proven or awarded.