G.R. No. 180765 , February 27, 2009.
FORT BONIFACIO DEVELOPMENT CORPORATION, Petitioner, vs. MANUEL N. DOMINGO, Respondent.

FACTS

Petitioner Fort Bonifacio Development Corporation (FBDC) entered into a Trade Contract with L and M Maxco Specialist Engineering Construction (LMM Construction) for works on the Bonifacio Ridge Condominium. The contract allowed FBDC to withhold a 5% retention money for one year after project completion. FBDC terminated the contract due to defects and delays. Respondent Manuel N. Domingo is the assignee of LMM Construction’s receivables from FBDC under a Deed of Assignment dated February 28, 2005, to settle an unpaid obligation. FBDC acknowledged LMM Construction’s receivables (retention money) but advised it was not yet due and demandable and was subject to garnishment by other creditors. FBDC received multiple Notices of Garnishment against LMM Construction’s receivables from the Construction Industry Arbitration Commission (CIAC), the National Labor Relations Commission (NLRC), and the Regional Trial Court (RTC) of Makati, which it complied with. After denying respondent’s claim, stating the retention money was exhausted, respondent filed a Complaint for collection of sum of money against both LMM Construction and FBDC before the RTC of Pasay City. FBDC filed a Motion to Dismiss on the ground of lack of jurisdiction, arguing that as assignee, respondent was bound by the arbitral clause in the Trade Contract requiring disputes to be submitted to the CIAC. The RTC denied the motion, and the Court of Appeals affirmed, holding that respondent was a third party to the Trade Contract and money claims of third persons are within the jurisdiction of regular courts.

ISSUE

Whether or not the RTC has jurisdiction over Civil Case No. 06-0200-CFM.

RULING

Yes, the RTC has jurisdiction. The Supreme Court held that jurisdiction is determined by the allegations in the complaint. Respondent’s complaint is for collection of a sum of money based on a Deed of Assignment, not on the Trade Contract. As an assignee, respondent is a third party to the Trade Contract. The arbitral clause in the Trade Contract binds only the contracting parties, their assigns, and heirs, but the CIAC’s jurisdiction under Executive Order No. 1008 is limited to disputes arising from or connected with construction contracts between parties involved in construction. The dispute here involves the claim of a third-party assignee against the project owner, which is not a construction dispute falling under CIAC’s original and exclusive jurisdiction. Therefore, the regular courts have jurisdiction. The Court of Appeals’ Decision was affirmed.