BEATRIZ SALON AND HER HUS­BAND PERFECTO ESTEVES PLAINTIFFS-APPELLANTS, VS. FORTUNATA FIGURACION AND HER HUSBAND, DEFENDANTS-APPELLEES.

Salon versus Figuracion

The Case

This is Salon versus Figuracion, a civil action for damages based on alleged defamatory imputations, brought by Beatriz Salon and her husband Perfecto Esteves against Fortunata Figuracion and her husband. The plaintiffs sought damages and attorney's fees; the defendants moved to dismiss on the ground that a subsequent statute had transferred jurisdiction over the case to the municipal court. The case matters because it fixes a small but examinable rule of procedure: when the court computes the amount of the demand to test its jurisdiction, the claim for attorney's fees is counted in, and only interest and costs are excluded.

Procedural History

The complaint was filed in the Court of First Instance of Pangasinan, and the plaintiffs originally asked for 4,990 pesos in damages and 1,000 pesos in attorney's fees. They then filed an amended complaint raising the demand to 10,000 pesos in moral damages plus 1,000 pesos in attorney's fees. The defendants answered with a counterclaim, which the plaintiffs in turn answered.

Later, the defendants moved to dismiss the amended complaint, arguing that with the enactment of Republic Act 3828 the Court of First Instance had lost jurisdiction over the subject matter. The Court of First Instance granted the motion and dismissed the suit for lack of jurisdiction. The plaintiffs appealed from that order of dismissal, and the case reached the Supreme Court on that appeal.

Facts

Beatriz Salon and her husband sued Fortunata Figuracion and her husband for damages arising from alleged defamatory imputations. The action was commenced in the Court of First Instance of Pangasinan, with the plaintiffs initially demanding 4,990 pesos in damages and 1,000 pesos in attorney's fees.

The plaintiffs soon amended their complaint, raising the moral damages claimed to 10,000 pesos and retaining the claim of 1,000 pesos in attorney's fees. The defendants answered and set up a counterclaim, to which the plaintiffs replied.

Republic Act 3828 was then approved and took effect, amending Section 88 of the Judiciary Act by increasing the exclusive original jurisdiction of municipal courts to cover all civil actions where the value of the subject matter or the amount of the demand does not exceed ten thousand pesos, raised from five thousand pesos, exclusive of interest and costs. Invoking this change, the defendants moved to dismiss, contending that since the suit was for damages in the amount of 10,000 pesos it now fell within the exclusive original jurisdiction of the municipal court. The trial court agreed and dismissed the suit.

Issues

• Whether or not the Court of First Instance retained jurisdiction over the action after the enactment of Republic Act 3828, considering that the amended complaint demanded 10,000 pesos in moral damages and 1,000 pesos in attorney's fees.
• Whether or not the amount claimed for attorney's fees must be included in determining the amount of the demand for purposes of jurisdiction.

Applicable Provisions

Section 88 of the Judiciary Act, as amended by Republic Act 3828, provides:

Justices of the peace and municipal courts shall have exclusive original jurisdiction over all civil actions where the value of the subject matter or amount of the demand does not exceed ten thousand pesos, exclusive of interest and costs.

This provision fixes the jurisdictional threshold and, crucially, names only interest and costs as the items excluded from the computation of the demand.

Ruling

On the first issue, the Court held that there was no need to decide whether Republic Act 3828 affected pending cases, because the complaint dismissed by the court below in any event demanded 10,000 pesos in moral damages and 1,000 pesos in attorney's fees, or a total of 11,000 pesos. That aggregate is within the original jurisdiction of the Court of First Instance, so the dismissal for lack of jurisdiction was wrong.

On the second issue, the Court held that the amount demanded for attorney's fees must be included in determining jurisdiction, since the only items excluded by the statute are costs and interest. The Court rested this on the statutory language itself:

Justices of the peace and municipal courts shall have exclusive original jurisdiction over all civil actions where the value of the subject matter or amount of the demand does not exceed ten thousand pesos, exclusive of interest and costs.

Because attorney's fees are neither interest nor costs, they enter the sum that is tested against the jurisdictional ceiling.

Doctrine

For purposes of jurisdiction, the amount of the demand is the aggregate of the sums claimed, and a claim for attorney's fees is included in that aggregate. Only interest and costs are excluded from the computation under Section 88 of the Judiciary Act, as amended. Where the total demand, including attorney's fees, exceeds the municipal court ceiling, jurisdiction remains with the Court of First Instance.

Disposition

The Court reversed and set aside the order of dismissal and remanded the case to the court of origin for further proceedings, with costs against the appellees.

Remember This

Memorize the rule: in testing jurisdiction, count the attorney's fees, and exclude only interest and costs. Examiners use this case in civil procedure and jurisdiction questions involving the computation of the amount of the demand.