GR 163021; (April, 2007) (Digest)
G.R. No. 163021; April 27, 2007
PATRICIO A. VILLENA, Petitioner, vs. PATRICIO S. PAYOYO, Respondent.
FACTS
Respondent Patricio Payoyo entered into two contracts with petitioner Patricio Villena (representing Novaline, Inc.) for the delivery and installation of kitchen cabinets and home appliances. Payoyo made substantial downpayments totaling ₱184,821.50. Villena repeatedly failed to deliver the cabinets and appliances despite Payoyo’s demands. Consequently, Payoyo sent formal demands for cancellation of the contracts and a full refund. Upon Villena’s continued non-compliance, Payoyo filed a complaint for recovery of a sum of money and damages before the Regional Trial Court (RTC).
Villena moved to dismiss the complaint, arguing the RTC lacked jurisdiction because the principal claim of ₱184,821.50 was below the jurisdictional threshold for RTCs in Metro Manila, which was ₱200,000 at the time. The RTC denied the motion, ruled in favor of Payoyo, and ordered a refund with damages. The Court of Appeals affirmed but modified the judgment, ordering partial refund and specific performance for some appliances. Villena elevated the case, insisting the RTC lacked jurisdiction over the subject matter.
ISSUE
Whether the Regional Trial Court had jurisdiction over the complaint filed by respondent Payoyo.
RULING
Yes, the RTC validly exercised jurisdiction. Jurisdiction is determined by the allegations in the complaint and the primary relief sought. While the complaint was titled as one for recovery of a sum of money, its substance revealed the principal action was for rescission (or cancellation) of contracts due to alleged breach by Villena. The Supreme Court clarified that an action for rescission of a contract is incapable of pecuniary estimation, as it involves the adjudication of rights and obligations under an agreement rather than a mere money claim. The demand for refund of the downpayment was merely incidental to the primary plea for contractual rescission.
Consequently, under Batas Pambansa Blg. 129, as amended, such actions are within the exclusive original jurisdiction of the RTC regardless of the monetary amount involved. The Court held that the nature of the action, not its caption or incidental monetary consequence, controls jurisdictional assessment. Since the core issue was the propriety of rescinding the contracts due to breach, the RTC correctly assumed jurisdiction. The petition was denied, and the appellate court’s decision was affirmed.