LACSON HERMANAS, INC. HEREIN REPRESENTED BY ITS PRESIDENT MR. ODILON L. LACSON, PETITIONER, VS. HEIRS OF CENON IGNACIO, HEREIN REPRESENTED BY THEIR ATTY-IN-FACT, AMALIA IGNACIO,…

Lacson Hermanas versus Heirs of Cenon Ignacio

The Case

This is a petition for certiorari brought by Lacson Hermanas, Inc., a corporation, against the Heirs of Cenon Ignacio, who sue through their attorney-in-fact, Amalia Ignacio. The heirs filed a complaint for recovery of real property, asking the trial court to compel the corporation to execute the necessary deed of sale and to deliver the owner's duplicate copy of title over a one thousand square meter portion of a registered parcel of land that their predecessor had bought and fully paid for. The corporation moved to dismiss on the ground that the case falls within the exclusive jurisdiction of the Housing and Land Use Regulatory Board, because it says it is a subdivision developer and the lot is a subdivision lot. The case matters because it fixes two enduring rules: jurisdiction over the subject matter is determined by the allegations of the complaint, not by the defendant's defenses; and a direct resort to the Supreme Court in disregard of the hierarchy of courts will be dismissed.

Procedural History

The heirs filed their complaint for recovery of real property before the Regional Trial Court of San Fernando City, Branch 48. The corporation filed a motion to dismiss, contending among others that the case is cognizable by the Housing and Land Use Regulatory Board and not by the trial court. The trial court denied the motion to dismiss, holding that it has jurisdiction over the subject matter, and adding that the allegation that the lot is a subdivision lot is not a ground to deprive the court of its jurisdiction. The corporation's motion for reconsideration was likewise denied. The corporation then went directly to the Supreme Court by petition for certiorari under Rule 65 of the Revised Rules of Civil Procedure, assailing both orders of the trial court.

Facts

Cenon Ignacio purchased from the corporation a one thousand square meter portion of a parcel of land covered by Transfer Certificate of Title Number 261974-R, for fifty thousand pesos, which was fully paid on September 24, 1989. Cenon then took possession of the subject area and fenced its boundaries for the construction of a Seventh Day Adventist Chapel. On January 11, 1996, Cenon died.

Sometime in 2002, the heirs demanded the delivery of the title and the segregation of the portion sold to Cenon. The corporation informed them that the same lot had been sold to Rowena T. Coleman. Hence the heirs filed the complaint to compel the corporation to execute the necessary deed of sale and to deliver the owner's duplicate copy of title.

The corporation moved to dismiss, asserting that it is sued as a subdivision developer and that the property involved is a subdivision lot, so that jurisdiction lies with the Housing and Land Use Regulatory Board. The trial court disagreed and denied the motion, and denied reconsideration as well.

Issues

• Whether or not the petition for certiorari should be dismissed for having been filed directly with the Supreme Court in disregard of the hierarchy of courts.
• Whether or not the proper remedy of the corporation was an appeal by petition for review on certiorari under Rule 45, filed within the fifteen day reglementary period.
• Whether or not the Regional Trial Court has jurisdiction over the subject matter, or whether exclusive jurisdiction belongs to the Housing and Land Use Regulatory Board.

Applicable Provisions

Section 1 of Presidential Decree Number 1344 vests the National Housing Authority, now the Housing and Land Use Regulatory Board, with exclusive jurisdiction over the cases it enumerates:

Section 1 of PD 1344 vests the National Housing Authority (now HLURB) with exclusive jurisdiction to hear and decide the following cases: (a) unsound real estate business practice; (b) claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker, or salesman; and (c) cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot or condominium unit against the owner, developer, dealer, broker or salesman.

This is the provision the corporation invokes, and its scope decides whether the trial court or the Board may take cognizance of the complaint.

Section 1 of Rule 45 of the Revised Rules of Civil Procedure governs the appeal by certiorari from a final order of the Regional Trial Court:

Section 1. Filing of petition with Supreme Court. A party desiring to appeal by certiorari from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition shall raise only questions of law which must be distinctly set forth.

This is the remedy the Court says the corporation should have used, since it raised a pure question of law.

Section 2 of Rule 45 fixes the period for that appeal:

Section 2. Time for filing; extension. The petition shall be filed within fifteen (15) days from notice of the judgment or final order or resolution appealed from, or of the denial of the petitioner's motion for new trial or reconsideration filed in due time after notice of the judgment. On motion duly filed and served, with full payment of the docket and other lawful fees and the deposit for costs before the expiration of the reglementary period, the Supreme Court may for justifiable reasons grant an extension of thirty (30) days only within which to file the petition.

This period is the measure of whether the corporation's recourse was timely.

Ruling

On the first issue, the Court held that the petition for certiorari should have been filed with the Court of Appeals and not with the Supreme Court, pursuant to the doctrine of hierarchy of courts, and that disregard of this rule warrants outright dismissal. While the Court's original jurisdiction to issue the writ of certiorari is concurrent with the Regional Trial Courts and the Court of Appeals in certain cases, the Court stressed that this concurrence does not allow an unrestricted freedom of choice of forum. The corporation adduced no special and important reason why direct recourse to the Supreme Court should be allowed.

On the second issue, the Court held that although the invocation of its jurisdiction was available on the ground that the case raises a pure question of law, the proper recourse was not a petition for certiorari under Rule 65 but an appeal by petition for review on certiorari under Rule 45, which should have been filed within fifteen days from notice of the denial of the motion for reconsideration on October 22, 2004. Even if the petition were treated as an appeal under Rule 45, it would not prosper, having been filed only on November 30, 2004, way beyond the fifteen day reglementary period.

On the third issue, the Court held that even if it glossed over these procedural infirmities, the petition must fail for lack of merit. It laid down the settled rule:

It is a settled rule that jurisdiction over the subject matter is determined by the allegations in the complaint and is not affected by the pleas or the theories set up by the defendant in an answer or a motion to dismiss. Otherwise, jurisdiction would become dependent upon the whims of the defendant.

The allegations in the heirs' complaint clearly vest jurisdiction in the trial court. Nothing therein shows that the questioned property is a subdivision lot sold by the corporation as a subdivision developer; it simply referred to the corporation as a corporation and the seller of a lot described as a portion of a parcel of land covered by Transfer Certificate of Title Number 261974-R. The mere assertion by the corporation that it is a subdivision developer and that the land is a subdivision lot will not automatically strip the trial court of jurisdiction and authorize the Board to take cognizance of the complaint. It does not always follow that each sale made by the corporation is undertaken in its capacity as a subdivision developer, in the same manner that sales made in such capacity are not at all times intended for subdivision development. The Court noted that the parties never mentioned whether the contract was embodied in a written instrument that might shed light on the nature of their transaction, but that the allegations of the complaint, which determine the tribunal that may lawfully take cognizance of the case, clearly show that jurisdiction is lodged with the trial court.

Doctrine

First, jurisdiction over the subject matter is determined by the allegations of the complaint, and is not affected by the pleas or theories set up by the defendant in an answer or a motion to dismiss; otherwise jurisdiction would become dependent upon the whims of the defendant. Second, the mere assertion by a defendant that it is a subdivision developer and that the land involved is a subdivision lot will not automatically strip the trial court of jurisdiction and vest the Housing and Land Use Regulatory Board with exclusive jurisdiction under Section 1 of Presidential Decree Number 1344; the complaint must allege facts bringing the case within the enumerated categories, such as a sale of a subdivision lot by a project owner, developer, dealer, broker, or salesman. Third, the doctrine of hierarchy of courts bars a direct invocation of the Supreme Court's original jurisdiction to issue extraordinary writs unless special and important reasons are clearly and specifically set out in the petition. Fourth, where the case raises a pure question of law, the proper remedy from a final order of the Regional Trial Court is an appeal by petition for review on certiorari under Rule 45, filed within fifteen days from notice, not a petition for certiorari under Rule 65.

Disposition

The petition was denied, and the orders of the Regional Trial Court of San Fernando City, Branch 48, denying the motion to dismiss and the motion for reconsideration, were affirmed.

Remember This

Memorize the line that jurisdiction is determined by the allegations of the complaint and not by the defenses in the answer or motion to dismiss. Examiners use this case to test the hierarchy of courts, the distinction between Rule 45 and Rule 65 where only a question of law is raised, and the limits of the Housing and Land Use Regulatory Board's exclusive jurisdiction over subdivision disputes.