GR 174414; (March, 2008) (Digest)
G.R. No. 174414 ; March 14, 2008
ELMER F. GOMEZ, Petitioner, vs. MA. LITA A. MONTALBAN, Respondent.
FACTS
Petitioner Elmer F. Gomez filed a complaint for sum of money against respondent Ma. Lita A. Montalban before the Regional Trial Court (RTC) of Davao City. The complaint alleged a principal loan of ₱40,000.00 but, with claimed interest and attorney’s fees, the total demand amounted to ₱238,000.00. Respondent failed to file an Answer, was declared in default, and the RTC rendered a decision in favor of Gomez. Subsequently, Montalban filed a Petition for Relief from Judgment, arguing that the RTC lacked jurisdiction because the principal obligation of ₱40,000.00 fell within the jurisdictional limit of the Municipal Trial Court (MTC).
The RTC initially dismissed Montalban’s petition for lack of interest but later reconsidered. Ultimately, the RTC granted the Petition for Relief, set aside its earlier decision, and dismissed the case for lack of jurisdiction, stating it should be refiled in the proper MTC. Gomez’s motion for reconsideration was denied, prompting this Petition for Review on Certiorari.
ISSUE
The primary issue is whether the RTC had jurisdiction over the complaint, which was based on a principal loan of ₱40,000.00 but included a total demand of ₱238,000.00 when interest and attorney’s fees were added.
RULING
The Supreme Court ruled that the RTC correctly dismissed the case for lack of jurisdiction. Jurisdiction over the subject matter is determined by the allegations in the complaint at the time of its filing. The governing law is Batas Pambansa Blg. 129, as amended by Republic Act No. 7691 , which provides that jurisdiction for money claims is determined by the demand exclusive of interest, damages, attorney’s fees, litigation expenses, and costs. The Court emphasized that the “exclusive of” clause is precisely designed to prevent plaintiffs from artificially inflating their claims to invoke a higher court’s jurisdiction.
Here, the principal amount sought was unequivocally ₱40,000.00. The additional claims for interest and attorney’s fees must be excluded for jurisdictional purposes. Since the principal demand of ₱40,000.00 was below the ₱100,000.00 threshold for RTC jurisdiction at the time, the case fell within the exclusive original jurisdiction of the MTC. The RTC’s initial assumption of jurisdiction was erroneous. Consequently, its decision was void for lack of jurisdiction, and the grant of relief from that judgment was proper. The Supreme Court affirmed the RTC’s orders, directing that the case be refiled in the proper court.