GR 146744; (March, 2006) (Digest)
G.R. No. 146744 ; March 6, 2006
ROBERT G. DE GALICIA, Petitioner, vs. MELY MERCADO, Respondent.
FACTS
Petitioner Robert de Galicia co-signed a P50,000 check with his business partner, Carmen Arciaga. Arciaga, allegedly without de Galicia’s knowledge, rediscounted the check with respondent Mely Mercado for P46,000, net of an 8% interest. Upon presentment, the check was dishonored. Mercado filed criminal complaints for estafa and violation of B.P. 22 against de Galicia and Arciaga. In response, de Galicia filed a civil complaint in the Regional Trial Court (RTC) seeking the declaration of nullity of the interest agreement between Mercado and Arciaga and the check itself, arguing it was contrary to public policy.
The RTC dismissed the complaint for lack of jurisdiction. It treated the action as one for recovery of a sum of money, noting the principal amount was only P50,000, which was below its jurisdictional threshold. The court also pointed out that Arciaga, a party to the assailed agreement, was not impleaded. De Galicia elevated the case, contending his action was for nullity, which is incapable of pecuniary estimation and thus within RTC jurisdiction.
ISSUE
Whether the RTC correctly dismissed the complaint for (a) lack of jurisdiction over the subject matter, and (b) failure to implead an indispensable party.
RULING
The Supreme Court denied the petition. On jurisdiction, the Court held the RTC erred in its initial assessment. Applying the criterion from Singsong v. Isabella Sawmill, the nature of the principal action determines jurisdiction. De Galicia’s complaint primarily sought to annul the interest agreement and the check, not to recover a sum of money. The monetary value was incidental to the primary relief of nullity. Therefore, the subject matter was incapable of pecuniary estimation, placing it under the exclusive original jurisdiction of the RTC pursuant to B.P. 129.
However, the dismissal was ultimately sustained on the separate and sufficient ground of non-joinder of an indispensable party. Under Rule 3, Section 7 of the Rules of Court, an indispensable party is one without whom no final determination can be had. Carmen Arciaga was an indispensable party because she was a co-signatory to the check and a direct party to the contested interest agreement with Mercado. Her interests were so intertwined that any judgment would directly affect her rights, yet she would not be bound by it if not joined. The Court cited Aracelona v. Court of Appeals, which mandates dismissal when an indispensable party is not before the court, as their presence is a sine qua non for the exercise of judicial power. Thus, the RTC’s order of dismissal was affirmed.