Cadimas v. Carrion
REITERATIONFacts
The Antecedents: Petitioner Marjorie B. Cadimas, through her attorney-in-fact Venancio Z. Rosales, filed a complaint for accion reivindicatoria and damages against respondents Marites Carrion and Gemma Hugo. The dispute arose from a Contract To Sell dated August 4, 2003, where petitioner sold a townhouse to respondent Carrion for P330,000.00, payable in installments. Petitioner alleged that Carrion violated the contract by transferring ownership of the property to Hugo under the guise of a special power of attorney, despite a stipulation prohibiting such transfer without petitioner's written consent. After Carrion allegedly ignored written demands for explanation and to vacate the property, petitioner sought to cancel the contract and recover possession and ownership. Procedural History: The case was initially filed as Civil Case No. Q-04-53581 before the Regional Trial Court (RTC), Branch 85, Quezon City. The RTC denied respondent Hugo's Motion to Dismiss, which argued lack of jurisdiction and estoppel/laches, asserting that the Housing and Land Use Regulatory Board (HLURB) had jurisdiction. The RTC found it had jurisdiction and declared respondent Carrion in default, directing petitioner to present evidence ex-parte against Carrion and ordering Hugo to file an answer. Hugo filed an answer as attorney-in-fact for Carrion, including a counterclaim. The RTC later lifted the default order against Carrion to promote substantial justice. Respondents then filed a special civil action for certiorari with the Court of Appeals, seeking to set aside the RTC's orders and dismiss the complaint for lack of jurisdiction. The Court of Appeals granted the petition, setting aside the RTC orders and dismissing the complaint. The Petition: Petitioner seeks review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, assailing the Court of Appeals' decision and resolution. Petitioner argues that the RTC has jurisdiction based on the complaint's allegations and the reliefs sought. Petitioner also contends that respondents submitted to the RTC's jurisdiction by filing an answer with a compulsory counterclaim. Furthermore, petitioner asserts that respondents improperly availed themselves of a Rule 65 petition instead of a timely appeal from the order denying their motion to dismiss. The core of petitioner's argument is that the nature of the action, a breach of contract and recovery of property, falls within the RTC's jurisdiction, not the HLURB's, as it does not involve unsound real estate business practices or claims specifically enumerated under P.D. No. 1344.
Issue(s)
Whether the Regional Trial Court (RTC) has jurisdiction over the complaint for accion reivindicatoria and damages. Whether the respondents, by filing an answer with a compulsory counterclaim, submitted to the jurisdiction of the RTC. Whether the Court of Appeals erred in granting the petition for certiorari and dismissing the complaint for lack of jurisdiction.
Ruling
The petition is meritorious. The Decision and Resolution of the Court of Appeals are reversed and set aside. The orders of the Regional Trial Court are reinstated, and the RTC is ordered to resume proceedings and decide the case with deliberate speed.
Ratio Decidendi
On Issue 1: Jurisdiction of the RTC: The Supreme Court held that the jurisdiction of a court over the subject matter is determined by the material allegations of the complaint and the law at the time the action was commenced. The nature of the action pleaded, as appearing from the allegations in the complaint and the character of the relief sought, determines jurisdiction. In this case, the complaint alleged a breach of a contract to sell and sought cancellation of the contract and recovery of possession and ownership of the townhouse. These allegations clearly fall within the jurisdiction of the RTC, as they constitute an action for breach of contract and damages, and not a case exclusively cognizable by the HLURB under P.D. No. 1344. The Court emphasized that the HLURB's jurisdiction is limited to specific cases enumerated in Section 1 of P.D. No. 1344, which primarily concern complaints filed by subdivision lot or condominium unit buyers against project owners, developers, dealers, brokers, or salesmen, or cases involving unsound real estate business practices, refund claims, or specific performance of contractual and statutory obligations by buyers against sellers. The complaint here did not allege that the petitioner was a subdivision lot buyer or that the controversy involved the specific types of disputes falling under the HLURB's exclusive jurisdiction. The mere assertion that the property was part of a subdivision or that the seller was a developer does not automatically vest jurisdiction in the HLURB if the nature of the action itself does not fall within its enumerated powers. On Issue 2: Submission to Jurisdiction: While the Court did not directly rule on the issue of submission to jurisdiction via counterclaim as the primary basis for reversing the CA, it noted that the respondents' argument regarding the HLURB's jurisdiction was based on defenses raised in their motion to dismiss. The Court reiterated the elementary rule that jurisdiction cannot be made to depend upon the defenses set up in the answer or motion to dismiss, as this would allow defendants to determine the jurisdiction of the court. The Court's decision to reinstate the RTC's jurisdiction was based on the initial allegations in the complaint, not on the respondents' subsequent actions. However, the filing of an answer with a compulsory counterclaim generally constitutes submission to the jurisdiction of the court. The Court's focus remained on the initial determination of jurisdiction based on the complaint's allegations, rendering the subsequent actions of the respondents less critical in establishing the RTC's inherent jurisdiction over the subject matter. On Issue 3: Propriety of Certiorari: The Court found the petition for review on certiorari to be meritorious, implying that the CA erred in its determination of jurisdiction. The CA's decision to grant the petition for certiorari and dismiss the complaint was based on its finding that the RTC lacked jurisdiction. By reversing the CA's decision, the Supreme Court effectively ruled that the CA committed a grave abuse of discretion or acted contrary to law in finding that the RTC had no jurisdiction. The Supreme Court reinstated the RTC's orders, thereby correcting the procedural error of the appellate court in dismissing the case prematurely based on a misapprehension of the jurisdictional facts as pleaded in the complaint.
Main Doctrine
The jurisdiction of a court over the subject matter is determined by the material allegations of the complaint and the law at the time the action was commenced, not by the defenses set up in a motion to dismiss or answer. The nature of an action for breach of contract and damages falls within the Regional Trial Court's jurisdiction, even if the defense involves claims of unsound real estate business practices, which might otherwise fall under the Housing and Land Use Regulatory Board's (HLURB) purview.