G.R. No. 211089 & G.R. No. 211135, July 11, 2023
Case Parties: Spouses Dr. John O. Maliga and Annielyn Dela Cruz Maliga, Petitioners, vs. Spouses Abrahim N. Tingao and Bai Shor Tingao, Respondents. ( G.R. No. 211089 ) / Spouses Dr. John O. Maliga and Annielyn Dela Cruz Maliga, Petitioners, vs. Dimasurang Unte, Jr., Respondent. (G.R. No. 211135)

FACTS

Petitioner Annielyn Dela Cruz Maliga obtained a series of loans from respondents Dimasurang Unte, Jr. and Spouses Abrahim N. Tingao and Bai Shor Tingao between 2009 and 2012. The verbal loan agreements involved high monthly interest rates (15%-25% for Unte, 10% for Spouses Tingao), with interest deducted in advance from the principal released. After discovering these transactions, petitioner Dr. John O. Maliga (Annielyn’s husband) computed that payments made, particularly for interest, far exceeded the principal amounts. Petitioners filed separate complaints before the 5th Shari’a District Court (SDC) in Cotabato City, praying for the extinguishment of the loans and restitution of excess payments.
Respondents filed Motions to Dismiss, arguing the SDC lacked jurisdiction because the complaints involved the application of the Usury Law (Act No. 2655) and the Statute of Frauds under the New Civil Code, matters purportedly within the jurisdiction of regular civil courts. The SDC granted the motions, dismissing the complaints. It reasoned that while the parties are Muslims and the transaction involved riba (usury/interest) prohibited under Shari’a, Presidential Decree No. 1083 (the Code of Muslim Personal Laws) contains no specific provision on interest-based transactions, thus requiring adjudication under the Usury Law and Civil Code by regular courts.

ISSUE

Whether or not the Shari’a District Court correctly dismissed the complaints for lack of jurisdiction.

RULING

No. The Supreme Court GRANTED the Petitions, reversed the SDC’s Orders, and remanded the cases for further proceedings. The SDC has jurisdiction over the complaints.
The Court held that jurisdiction is determined by the allegations in the complaint and the character of the relief sought. The complaints alleged a cause of action arising from loan contracts between Muslim parties, seeking remedies such as accounting and restitution based on alleged violations of Shari’a principles (specifically the prohibition of riba). This falls squarely within the SDC’s concurrent original jurisdiction under Article 143(2)(b) of P.D. No. 1083, which covers “all other personal and real actions not mentioned in paragraph 1 (d) wherein the parties involved are Muslims.”
The Court emphasized the autonomy of Shari’a courts and clarified that the absence of a specific provision on interest in P.D. No. 1083 does not strip them of jurisdiction. Shari’a courts are empowered to apply Islamic law and jurisprudence, including principles from primary sources (Qur’an, Sunnah) and secondary sources (opinions of Islamic jurists), to resolve cases. The fact that the contracts may also involve issues under the Usury Law or Civil Code does not oust the SDC’s jurisdiction, as it can apply these laws suppletorily pursuant to Article 5 of P.D. No. 1083. The Court further noted that under Republic Act No. 11054 (the Organic Law for the Bangsamoro Autonomous Region), the SDC’s jurisdiction over such actions has been made exclusive within its territorial scope.