G.R. No. 171503 ; June 8, 2007
Eriberto P. Crisostomo, petitioner, vs. Arnie R. De Guzman, respondent.

FACTS

Respondent Arnie De Guzman filed a collection suit for an unpaid balance of ₱277,121.00 against petitioner Eriberto Crisostomo before the Municipal Trial Court in Cities (MTCC) of San Jose City on March 24, 2004. The complaint was docketed as Civil Case No. 3706. Petitioner moved to dismiss the case, arguing that the MTCC lacked jurisdiction. He contended that under R.A. No. 7691 , the second adjustment of the MTCC’s jurisdictional amount to ₱300,000.00 took effect only on April 12, 2004. Since the complaint was filed on March 24, 2004, the claim allegedly exceeded the then-effective jurisdictional limit of ₱200,000.00. Petitioner challenged the validity of Supreme Court-issued OCA Circular No. 65-2004, which had declared the adjustment effective February 22, 2004, claiming its computation of the five-year period was erroneous.
The MTCC denied the motion to dismiss, stating it had no authority to invalidate Supreme Court circulars and that the issue was moot. Without seeking reconsideration, petitioner filed a petition for certiorari with the Regional Trial Court (RTC). The RTC dismissed the petition, finding no grave abuse of discretion by the MTCC, as it merely applied the prevailing circulars. Petitioner elevated the case directly to the Supreme Court via a petition for review on certiorari.

ISSUE

Whether the MTCC committed grave abuse of discretion in denying the motion to dismiss and in assuming jurisdiction over the collection case based on OCA Circular No. 65-2004.

RULING

The Supreme Court denied the petition, upholding the MTCC’s jurisdiction. The Court ruled that the MTCC did not commit grave abuse of discretion, defined as a capricious or whimsical exercise of judgment equivalent to lack of jurisdiction. The MTCC correctly relied on and applied OCA Circular No. 65-2004, an administrative issuance from the Supreme Court through its Office of the Court Administrator, which authoritatively declared the adjusted jurisdictional limit effective February 22, 2004. Lower courts are bound to follow such circulars.
Furthermore, the Court found the issue raised by petitioner to be moot. The circulars had already served their purpose, and the bench and bar had operated under them. Even assuming a computational error, it did not prejudice any substantive right of the petitioner or have deleterious consequences. The Court also noted that, pursuant to Section 7 of R.A. No. 7691 , cases affected by the jurisdictional adjustment that were pending in the RTC but not yet at pre-trial were to be transferred to first-level courts. Thus, even if the complaint had been filed in the RTC, it would have been transferred to the MTCC. Dismissing the case would be unjust, as the respondent filed his complaint in good faith reliance on the official circular. The MTCC was ordered to proceed with the trial of the case.