G.R. No. L-2926; May 11, 1951
PAZ JARIN, ET AL., plaintiffs-appellants, vs. DANIEL SARINAS, ET AL., defendants-appellees.

FACTS

On December 20, 1944, Daniel Sarinas mortgaged a lot and improvements to Paz Jarin, Felicisima Palma, and Trinidad Palma for P25,000. On January 20, 1945, Sarinas acknowledged receipt of another P25,000 secured by the same property. On February 19, 1945, Sarinas signed a document acknowledging receipt of P50,000 in Japanese military notes and agreed to pay P2,000 in genuine money after the term in the first instrument. The debtors refused to pay the P2,000, claiming the Japanese notes had no value. On August 7, 1948, the creditors filed an action to collect P2,000, interest, and costs. The defendants moved to dismiss based on Executive Orders Nos. 25 and 32 (moratorium). The Court of First Instance of Cavite initially denied the motion but later set aside its order and dismissed the complaint for lack of cause of action, citing the moratorium, without prejudice to refiling after its removal. The plaintiffs appealed, contending that Republic Act No. 342 removed the suspension of payment for debts contracted during the enemy occupation and questioning the constitutionality of the executive orders.

ISSUE

Whether the Court of First Instance of Cavite had jurisdiction over the action to collect P2,000.

RULING

No. The Supreme Court dismissed the appeal and the complaint. Under Republic Act No. 296 (Judiciary Act of 1948), effective June 17, 1948, Courts of First Instance had original jurisdiction only where the demand exceeded P2,000, exclusive of interest (Section 44). For demands not exceeding P2,000, exclusive of interest and costs, the justice of the peace or municipal court had exclusive original jurisdiction (Section 88). Since this was an action to collect exactly P2,000 (exclusive of interest) and not a foreclosure suit (as the mortgage copy attached did not show registration), the Justice of the Peace Court of Imus, Cavite, had exclusive original jurisdiction. Therefore, the Court of First Instance of Cavite had no jurisdiction to hear the case, rendering its dismissal order void. The Court did not address the substantive issues regarding the moratorium or constitutionality due to this jurisdictional defect.