G.R. No. 196874 February 6, 2019
The Heirs of the Late Spouses Alejandro Ramiro and Felicisima Llamada, Petitioners vs. Spouses Eleodoro and Verna Bacaron, Respondents

FACTS

Respondent spouses Bacaron filed a complaint against petitioners, the heirs of spouses Ramiro, before the Regional Trial Court (RTC). They alleged that the late Alejandro Ramiro sold a parcel of land to them via a Deed of Sale dated October 20, 1991. The Bacarons took possession, redeemed the property from a mortgage with the Development Bank of the Philippines, and paid the redemption price. However, in June 1998, petitioners forcibly dispossessed them of the property. The Bacarons sought the declaration of the sale’s validity, specific performance for the execution of a deed of partition confirming the sale, recovery of possession, and damages.
Petitioners contested the RTC’s jurisdiction, arguing the action was essentially for recovery of possession where the complaint failed to allege the property’s assessed value, a jurisdictional requirement under Batas Pambansa Blg. 129, as amended. They also defended that the transaction was an equitable mortgage, not a sale, and that the action was barred by laches. The RTC ruled in favor of the Bacarons, declaring the Deed of Sale valid and ordering the heirs to execute confirming documents and vacate the property. The Court of Appeals affirmed the RTC decision in toto.

ISSUE

The core issue is whether the Regional Trial Court validly acquired jurisdiction over the subject matter of the case.

RULING

The Supreme Court granted the petition and reversed the Court of Appeals. It held that the RTC did not acquire jurisdiction over the subject matter, rendering all subsequent proceedings null and void. The Court meticulously analyzed the nature of the action. While the amended complaint included a cause for declaration of the sale’s validity (an action incapable of pecuniary estimation falling under RTC jurisdiction), it also unmistakably included a distinct cause of action for recovery of possession of real property. For such an action involving title to or possession of real property, jurisdiction is determined by the assessed value of the property pursuant to Section 19 of B.P. Blg. 129, as amended.
The Court emphasized that where a complaint joins a cause of action for recovery of possession (which requires an allegation of assessed value for jurisdictional purposes) with other causes, the mandatory requirement to allege the assessed value is not dispensed with. The Bacarons’ failure to allege the property’s assessed value in their amended complaint was a fatal jurisdictional flaw. Consequently, the correct docket fees could not be computed and paid, and the RTC could not determine if it had exclusive original jurisdiction over the recovery of possession aspect. Since jurisdiction over the subject matter is conferred by law and cannot be waived, the omission was incurable. The Court declared the RTC Decision null and void and dismissed the amended complaint without prejudice.