G.R. No. 214803 APRIL 23, 2018
ALONA G. ROLDAN, Petitioner, vs. SPOUSES CLARENCE I. BARRIOS and ANNA LEE T. BARRIOS, ROMMEL MATORRES, and HON. JEMENA ABELLAR ARBIS, in her capacity as Presiding Judge, Branch 6, Regional Trial Court, Kalibo, Aklan, Respondents.

FACTS

Petitioner Alona G. Roldan filed a complaint for judicial foreclosure of a real estate mortgage against respondents spouses Barrios and Rommel Matorres before the Regional Trial Court (RTC) of Kalibo, Aklan. She alleged that the spouses borrowed ₱250,000.00 from her, secured by a mortgage on a parcel of land with an assessed value of ₱13,380.00, and had defaulted on payment. She further alleged that the spouses subsequently mortgaged the same property to respondent Matorres. The spouses Barrios, in their answer, raised defenses including the pendency of a petition for rehabilitation. Matorres, in his answer, admitted the second mortgage and revealed he had also filed a separate foreclosure case (Civil Case No. 9642) involving the same property.
The RTC, consolidating the two foreclosure cases, issued an Order dismissing both for lack of jurisdiction. The court ruled that a foreclosure of real estate mortgage is a real action, and jurisdiction is determined by the assessed value of the property. Since the assessed value was only ₱13,380.00, which is below the ₱50,000.00 threshold for RTC jurisdiction outside Metro Manila, the first-level courts (Metropolitan Trial Courts, Municipal Trial Courts, Municipal Circuit Trial Courts) had exclusive original jurisdiction. The RTC denied petitioner’s motion for reconsideration, prompting this certiorari petition.

ISSUE

Whether the Regional Trial Court committed grave abuse of discretion in dismissing the complaint for judicial foreclosure of mortgage for lack of jurisdiction on the ground that it is a real action where jurisdiction is determined by the assessed value of the property.

RULING

The Supreme Court dismissed the petition, finding no grave abuse of discretion by the RTC. The Court clarified the nature of a judicial foreclosure of a real estate mortgage. While an action for foreclosure is primarily for the enforcement of a mortgage lien and is generally classified as an action incapable of pecuniary estimation (falling under RTC jurisdiction), an exception exists when it is a real action that directly affects title to or possession of real property. A judicial foreclosure of real estate mortgage is deemed a real action because it is fundamentally aimed at the sale of the mortgaged property to satisfy the obligation. Consequently, for the purpose of determining jurisdiction between first-level courts and RTCs, the rule for real actions applies: jurisdiction is vested based on the assessed value of the property involved.
Since the mortgaged property in this case had an assessed value of only ₱13,380.00, which is below the ₱50,000.00 jurisdictional threshold for RTCs outside Metro Manila, the RTC correctly held that it lacked jurisdiction. The first-level courts had exclusive original jurisdiction over the foreclosure action. Therefore, the RTC’s orders dismissing the case without prejudice were legally sound and constituted a proper exercise of judicial discretion, not grave abuse thereof.