GLYNNA FORONDA-CRYSTAL, PETITIONER, V. ANIANA LAWAS SON, RESPONDENT.

Foronda-Crystal versus Lawas Son

The Case

This is a petition for review on certiorari brought by Glynna Foronda-Crystal against Aniana Lawas Son. The respondent sued for reconveyance and damages over a parcel of land in Compostela, Cebu, claiming she had bought it and that the free patent and original certificate of title issued in the name of the petitioner's father were a grave error. The case matters for two reasons. First, it is a clean teaching case on jurisdiction over the subject matter in real actions, and on why the assessed value of the property, not its market value, fixes the line between the first level and second level courts. Second, it shows what happens when a court renders judgment without that jurisdiction: the judgment is void and is annulled, whatever the merits.

Procedural History

The respondent filed her complaint for reconveyance and damages before the Regional Trial Court, Branch 55 of Mandaue City. The petitioner moved to dismiss on four grounds: lack of jurisdiction, improper venue, prescription, and lack of cause of action. The trial court granted the motion and dismissed the case for lack of jurisdiction, reasoning from the tax declaration that the property's value placed it within the jurisdiction of the Municipal Circuit Trial Court of Liloan-Compostela, Cebu. On the respondent's motion for reconsideration, however, the trial court reversed itself. It relied on the complaint's allegation that the property was worth 200,000 pesos, on its own judicial knowledge of the Bureau of Internal Revenue zonal valuation, and on the view that a tax declaration is sometimes undervalued and is not controlling. Trial then proceeded, and the trial court decided in favor of the respondent. It declared the free patent and the original certificate of title in the name of Eddie Foronda null and void, and ordered the Register of Deeds of Cebu to cancel that title and issue a new one in the respondent's name.

The petitioner appealed to the Court of Appeals, raising undue haste, failure to prove identity of the lot, failure to prove possession, error in cancelling the title, and prescription and laches. The Court of Appeals affirmed the trial court in full, and later denied the petitioner's motion for reconsideration. The petitioner then came to the Supreme Court by petition for review on certiorari under Rule 45.

Facts

Eddie Foronda, the petitioner's father, was the registered owner of a parcel of land in Barrio Magay, Compostela, Cebu, holding it under a free patent and Original Certificate of Title No. OP-37324. On the other side, the respondent claimed that she had bought the same lot from a certain Eleno Arias in August 1986 for 200,000 pesos, that she had possessed it for twelve and a half years, and that she had been paying real property taxes under a tax declaration in her name.

In March 1999 the respondent sued for reconveyance and damages, alleging that the free patent in favor of Eddie Foronda had been issued through gross error, and pointing out that no tax declaration stood in the patentee's name. The petitioner moved to dismiss, and the trial court at first agreed that it lacked jurisdiction, since the market value per the tax declaration was only 2,830 pesos. But on reconsideration the trial court set that order aside, took note of the complaint's allegation of a 200,000 peso value and of the zonal valuation, held that a tax declaration is not controlling, and proceeded to trial.

After trial, the trial court ruled for the respondent, cancelled the title, and directed that a new one be issued in her name. The Court of Appeals affirmed. Before the Supreme Court the petitioner pressed, among others, that the assessed value of the property was only 1,030 pesos and that the lot lies in Compostela, so that the Regional Trial Court of Mandaue City never had jurisdiction.

Issues

• Whether or not the Regional Trial Court validly acquired jurisdiction over the case, and whether or not its decision is void for having been rendered without jurisdiction.
• Whether or not the original certificate of title issued in the name of the petitioner's father should be cancelled and set aside on the strength of the respondent's allegations of ownership.
• Whether or not the action is already barred by prescription.

Applicable Provisions

The Judiciary Reorganization Act of 1980, as amended by Republic Act No. 7691, apportions original jurisdiction over real actions between the first and second level courts by assessed value. The Court states the rule thus:

According to this law, in all civil actions which involve title to, or possession of, real property, or any interest therein, the RTC shall exercise exclusive original jurisdiction where the assessed value of the property exceeds P20,000.00 or, for civil actions in Metro Manila, where such value exceeds P50,000.00.

This is the provision that decides the case, because the assessed value of the lot falls below the threshold, placing jurisdiction in the first level court.

Section 7 of Rule 141 of the Rules of Court, as amended, governs filing and docket fees, and the Court quotes it to show that it is not the test for the delineation of jurisdiction:

Section 7 Clerks of Regional Trial Courts.— a) For filing an action or a permissive OR COMPULSORY counter-claim, CROSS-CLAIM, or money claim against an estate not based on judgment, or for filing a third-party, fourth-party, etc. complaint, or a complaint-in-intervention, if the total sum claimed, INCLUSIVE OF INTERESTS, PENALTIES, SURCHARGES, DAMAGES OF WHATEVER KIND, AND ATTORNEY'S FEES, LITIGATION EXPENSES AND COSTS and/or in cases involving property, the FAIR MARKET value of the REAL property in litigation STATED IN THE CURRENT TAX DECLARATION OR CURRENT ZONAL VALUATION OF THE BUREAU OF INTERNAL REVENUE, WHICHEVER IS HIGHER, OR IF THERE IS NONE, THE STATED VALUE OF THE PROPERTY IN LITIGATION OR THE VALUE OF THE PERSONAL PROPERTY IN LITIGATION AS ALLEGED BY THE CLAIMANT, is: x x x

This provision bears on the case because it explains why market value cases are not authority on the jurisdiction of first and second level courts.

Ruling

On the first issue, the Court ruled that the Regional Trial Court never acquired jurisdiction, and that its decision is void. Jurisdiction over the subject matter is conferred by law and cannot be conferred by the consent of the parties or by the erroneous belief of the court that it exists. What controls is the assessed value of the realty, not its fair market value. Jurisdiction is determined from the allegations of the complaint, and the Court cannot take judicial notice of the assessed or market value of land. The respondent's complaint alleged a market value of 200,000 pesos but did not allege the assessed value. Standing alone, that omission would warrant dismissal. But the Court adopted a two-tiered rule: the general rule is that jurisdiction is determined by the assessed value as alleged in the complaint, and the rule is applied liberally where the assessed value, though not alleged, can be identified from a facial examination of the documents attached to the complaint. Here the complaint annexed Tax Declaration No. 16408A, which showed an assessed value of 2,826 pesos. That is below the 20,000 peso threshold, so jurisdiction belonged to the first level court, and the trial court should have maintained its earlier dismissal. The Court held that a void judgment for want of jurisdiction is no judgment at all, and quoted its earlier ruling that a void judgment is regarded as a nullity, the situation being the same as if there had been no judgment. It also clarified that the market value cases, which turned on the payment of filing and docket fees under Rule 141, do not govern the delineation of jurisdiction under the Judiciary Reorganization Act.

On the second and third issues, the Court did not rule. Having found that the trial court acted without jurisdiction, it held that the remaining issues raised by the petitioner need not be discussed further.

Doctrine

Jurisdiction over the subject matter is conferred by law, not by the consent or acquiescence of the parties, nor by the erroneous belief of the court. In civil actions involving title to, or possession of, real property, or any interest therein, jurisdiction is fixed by the assessed value of the property as alleged in the complaint, not by its market value. The general rule is that the assessed value must be alleged; the exception, applied liberally, is that the case will not be dismissed where the assessed value can be identified from a facial examination of the documents attached to the complaint. A judgment rendered without jurisdiction is void, confers no rights, and creates no obligations. Market value cases under Rule 141 concern the acquisition of jurisdiction through the payment of filing and docket fees, and must not be read as governing the boundary between the first and second level courts.

Disposition

The petition was granted. The Supreme Court annulled and set aside the decision of the Court of Appeals, its resolution, and the decision of the Regional Trial Court for having been issued without jurisdiction, without prejudice to the parties filing the proper action before the proper court.

Remember This

Memorize the line: it is the assessed value alleged in the complaint, not the market value, that fixes jurisdiction over real actions, and a judgment without jurisdiction is a nullity. Examiners use this case to test the two-tiered rule, the distinction between assessed value and market value, and the effect of a void judgment.