Veloso v. Banco De Oro Unibank
REITERATIONFacts
The Antecedents: Petitioner-spouses (Spouses Veloso) had credit card, real estate loan, and auto loan transactions with respondent Banco De Oro Unibank, Inc. (BDO), secured by a real estate mortgage over their properties. They defaulted on their obligations. Procedural History: BDO filed a petition for extrajudicial foreclosure of mortgage. Subsequently, Spouses Veloso filed a complaint for accounting, judicial determination of obligations, and damages, alleging unconscionable and illegal stipulations in their loan documents. BDO emerged as the highest bidder in the public auction. Spouses Veloso then filed the instant complaint for the declaration of nullity of the real estate mortgage, extrajudicial foreclosure, certificate of sale, and related registrations, asserting that the mortgage stipulations were void. BDO filed a Motion to Dismiss, arguing lack of jurisdiction because the complaint, being a real action, failed to allege the assessed value of the properties. The Regional Trial Court (RTC) dismissed the complaint for lack of jurisdiction. The Court of Appeals (CA) affirmed the RTC's decision. Spouses Veloso elevated the matter to the Supreme Court. The Petition: Petitioners-spouses contend that their action is one incapable of pecuniary estimation, not a real action, and thus within the RTC's jurisdiction. Alternatively, they argue that even if it were a real action, the assessed value could be inferred from the attachments.
Issue(s)
Whether the RTC acquired jurisdiction over the subject matter of the action. Whether the complaint filed by the petitioner-spouses is a real action or a personal action. Whether the failure to allege the assessed value of the mortgaged properties in the complaint is fatal to the action.
Ruling
The Supreme Court denied the petition and affirmed the decisions of the CA and RTC, upholding the dismissal of the complaint for lack of jurisdiction.
Ratio Decidendi
On whether the RTC acquired jurisdiction over the subject matter of the action: The Court held that jurisdiction over the subject matter is conferred by law. Section 19 of BP 129, as amended by RA 7691, outlines the exclusive original jurisdiction of RTCs, including civil actions involving title to, or possession of, real property where the assessed value exceeds a certain amount. The Court reiterated that the nature of an action is determined by the material allegations of the complaint, the relief prayed for, and the law in effect. In this case, the complaint, despite its prayer for nullification of the mortgage and foreclosure, was fundamentally aimed at determining the ownership and possession of the mortgaged properties, thus constituting a real action. The failure to allege the assessed value of the properties, which is the basis for determining jurisdiction in real actions, meant the RTC could not acquire jurisdiction. On whether the complaint is a real action or a personal action: The Court found that the complaint, by seeking the annulment of the real estate mortgage, extrajudicial foreclosure, and certificate of sale, was intrinsically linked to the issue of ownership and possession of the mortgaged properties. The allegations, particularly those concerning the nullity of the foreclosure proceedings and the right to redeem, clearly indicated an intent to recover or maintain control over the properties. Therefore, the action was classified as a real action, as it affected the title to or possession of real property, as defined by Section 1, Rule 4 of the Rules of Court. On whether the failure to allege the assessed value of the mortgaged properties is fatal: The Court affirmed that for real actions, the assessed value of the property is the determinant of jurisdiction. The petitioner-spouses failed to allege this value in their complaint or in any of its annexes. Their argument that the assessed value could be inferred from the loan amount was rejected, as courts cannot presume or infer assessed values for jurisdictional purposes. Jurisprudence emphasizes that the assessed value, not the market value or loan amount, is the basis for determining jurisdiction in real actions. The failure to provide this essential jurisdictional fact rendered the complaint dismissible for lack of jurisdiction.
Main Doctrine
The jurisdiction of a court in real actions is determined by the assessed value of the property involved, which must be alleged in the complaint. Failure to do so is fatal to the action.