G.R. No. 144652. December 16, 2005.
Arcadio B. Dandoy and Ricardo Maglangit, Petitioners, vs. Zacarias Tongson, (deceased) represented by his heirs, Respondents.

FACTS

Petitioners Arcadio Dandoy and Ricardo Maglangit filed a complaint with the Regional Trial Court (RTC) of Davao City for the declaration of nullity of Agricultural Leasehold Contracts they executed with respondent Zacarias Tongson in 1976. They alleged the contracts were void because the land was still public land at the time of execution, and respondents took advantage of their poverty. They claimed they never shared crops with respondents and had instead filed free patent applications for the land. Respondents moved to dismiss the case, arguing, among other grounds, that the RTC lacked jurisdiction as the case involved an agrarian dispute falling under the exclusive jurisdiction of the Department of Agrarian Reform Adjudication Board (DARAB). The RTC denied the motion, ruling the DARAB had no jurisdiction because the parties were not in a landlord-tenant relationship and the contracts were “fictitious.” After trial, the RTC declared the contracts null and void.
On appeal, the Court of Appeals reversed the RTC decision. It dismissed the case for lack of jurisdiction, holding that at the time the suit was filed in 1993, the subject property was already covered by the Comprehensive Agrarian Reform Program (CARP). The CA ruled that any dispute on the existence of an agricultural tenancy relationship is vested exclusively with the DARAB, citing laws and jurisprudence that divested RTCs of jurisdiction over agrarian cases.

ISSUE

Whether the Regional Trial Court or the Department of Agrarian Reform Adjudication Board (DARAB) has jurisdiction over the petitioners’ action for the declaration of nullity of the Agricultural Leasehold Contracts.

RULING

The Supreme Court REVERSED the Court of Appeals and REINSTATED the RTC decision, holding that the RTC validly exercised jurisdiction. The Court clarified that jurisdiction is determined by the allegations in the complaint. Petitioners’ complaint sought the annulment of contracts on grounds of void subject matter (public land) and vitiated consent, which is inherently a civil action incapable of pecuniary estimation within the RTC’s general jurisdiction. The mere allegation of a tenancy relationship by the defendants in their answer or motion to dismiss does not automatically convert the action into an agrarian dispute or divest the RTC of jurisdiction. For the DARAB to have exclusive jurisdiction, the existence of a tenancy relationship must be proven as a jurisdictional fact. Here, the petitioners consistently denied such a relationship. The subject land being public and not yet placed under agrarian reform at the time the contracts were executed also precluded the application of agrarian laws. Therefore, the action properly pertained to the RTC’s competence to resolve issues of contract validity, not to the DARAB’s quasi-judicial authority over agrarian disputes.