Bautista vs. Lindo

An action to enforce the statutory right of repurchase of free-patent land under Section 119 of Commonwealth Act No. 141 is a civil action incapable of pecuniary estimation, akin to specific performance, and thus falls under the exclusive original jurisdiction of the Regional Trial Court, the reconveyance of title being merely incidental to the principal relief sought.

Alfredo R. Bautista inherited in 1983 a free-patent land located in Poblacion, Lupon, Davao Oriental, covered by Original Certificate of Title No. (1572) P-6144. Section 119 of Commonwealth Act No. 141, the Public Land Act, grants a free-patent holder, his widow, or legal heirs the right to repurchase land conveyed to another within five years from the date of conveyance. This statutory right is deemed integrated into every deed of sale involving free-patent or homestead land, regardless of whether the deed expressly stipulates it. Bautista subdivided the property and sold the lots to several vendees via a notarized deed of absolute sale dated May 30, 1991, after which OCT No. (1572) P-6144 was canceled and Transfer Certificates of Title were issued in favor of the vendees.

Alfredo R. Bautista inherited in 1983 a free-patent land located in Poblacion, Lupon, Davao Oriental, covered by Original Certificate of Title No. (1572) P-6144. A few years later, he subdivided the property and sold the lots to several vendees—herein respondents—through a notarized deed of absolute sale dated May 30, 1991. Two months after the sale, OCT No. (1572) P-6144 was canceled and Transfer Certificates of Title were issued in favor of the respective vendees.

Three years after the sale, or on August 5, 1994, Bautista filed a complaint for repurchase against respondents before the RTC, Branch 32, Lupon, Davao Oriental, docketed as Civil Case No. 1798. He anchored his cause of action on Section 119 of Commonwealth Act No. 141, which grants the applicant, his widow, or legal heirs the right to repurchase land acquired under free patent or homestead provisions within five years from the date of conveyance. In their Answer, respondents raised lack of cause of action, estoppel, prescription, and laches as defenses.

During the pendency of the case, Bautista died and was substituted by petitioner Epifania G. Bautista. Respondents Francisco and Welhilmina Lindo later entered into a compromise agreement with petitioners, ceding a 3,230-square-meter portion of the property to Epifania and waiving all claims and counterclaims against each other. The RTC approved the compromise in its Decision dated January 27, 2011. Other respondents, however, filed a Motion to Dismiss dated February 4, 2013—nine years after the complaint was filed—alleging that the complaint failed to state the value of the property sought to be recovered and that the total selling price of all the properties was only ₱16,500, below the ₱20,000 jurisdictional ceiling for RTCs under BP 129.

Acting on the motion, the RTC dismissed the complaint for lack of jurisdiction, finding that Bautista failed to allege in his complaint that the value of the subject property exceeded ₱20,000 and that the only amount stated was the total refund of the purchase price at ₱16,500. The RTC, citing Cosco Philippines Shipping, Inc. vs. Kemper Insurance Company, held that a motion to dismiss for lack of jurisdiction may be filed at any stage of the proceedings, even on appeal, and is not lost by waiver or estoppel. Petitioners' motion for reconsideration was denied, prompting the present petition.

• Timeliness and Estoppel: Petitioners argued that respondents belatedly filed their Motion to Dismiss nine years after the complaint was filed and after active participation in the proceedings, and are therefore estopped from seeking dismissal on jurisdictional grounds.
• Nature of the Action: Petitioners contended that an action for repurchase is not a real action but one incapable of pecuniary estimation, being founded on privity of contract between the parties. What they seek is the enforcement of their right to repurchase the subject property under Section 119 of CA 141, making the action one for specific performance cognizable by the RTC.

• Inapplicability of Repurchase Right: Respondents maintained that since the land was no longer devoted to agriculture, the right of repurchase under Section 119 of CA 141 could no longer be availed of, citing Santana vs. Mariñas.
• Bad Faith and Policy Considerations: Respondents suggested that petitioners intended to resell the property for a higher profit, which goes against the policy and spirit of CA 141—preservation of land gratuitously given to patentees as a reward for cultivating the property.
• Defective Deed: Respondents pointed out that the Deed of Absolute Sale presented in evidence by Bautista was unilaterally executed by him and was not signed by respondents.
• Nature of the Action: Respondents argued that repurchase is a real action capable of pecuniary estimation, and since the total selling price is below ₱20,000, jurisdiction lies with the MTC under Section 33 of BP 129.

• Nature of the Action: Whether the action for repurchase under Section 119 of CA 141 is a real action involving title to or possession of real property, or a civil action incapable of pecuniary estimation cognizable by the RTC.
• Jurisdiction by Estoppel: Whether respondents, having actively participated in the RTC proceedings for nine years, are estopped from belatedly questioning the RTC's jurisdiction over the subject matter.

• Nature of the Action: Yes, the RTC erred. The action for repurchase is akin to specific performance and is incapable of pecuniary estimation, placing it under the RTC's exclusive original jurisdiction under Section 19(1) of BP 129.
• Jurisdiction by Estoppel: Yes, respondents are estopped. Having actively participated in the proceedings by filing pleadings, presenting evidence, interposing counterclaims, and submitting a compromise agreement for approval, they can no longer assail the RTC's jurisdiction.

• Nature of the Action: Jurisdiction is determined by the allegations in the complaint and the character of the relief sought. Under the criterion adopted in Russell vs. Vestil, where the basic issue is something other than the right to recover a sum of money, and the money claim is purely incidental to the principal relief sought, the action is incapable of pecuniary estimation and cognizable exclusively by the RTC. The Court found that Bautista's cause of action was to enforce his statutory right to repurchase the lots under Section 119 of CA 141. Although the deeds of sale did not explicitly contain a repurchase stipulation, Section 119 is deemed integrated into the deed as prescribed by law—the law is deemed written into every contract. The action is therefore one for specific performance, or akin to it, and the reconveyance of title is merely the incidental outcome of the performance of the obligation to return the property. Because the principal relief is the enforcement of a statutory right rather than the recovery of a sum of money, the action is incapable of pecuniary estimation.
• Jurisdiction by Estoppel: Even assuming arguendo that the action is a real action involving title to real property with a value below ₱20,000, respondents' postulation that the MTC has jurisdiction would still fail. Under Heirs of Jose Fernando vs. De Belen, a party who raises defenses, actively participates in proceedings by filing pleadings, presents evidence, and invokes the court's authority by asking for affirmative relief is estopped from questioning jurisdiction. Here, respondents filed an Answer with counterclaims, participated in pre-trial, moved for postponement of evidence presentation, presented a witness, and submitted a compromise agreement for approval—all over nine years. Having fully participated and invoked the RTC's authority for affirmative relief, they are barred from questioning its jurisdiction.

• Jurisdiction determined by allegations in the complaint — The jurisdiction of the court over the subject matter is determined by the allegations in the complaint and the character of the relief sought, not by the defenses raised in the answer or motion to dismiss. The Court applied this principle to classify the repurchase action by examining the nature of the principal action or remedy sought.
• Actions incapable of pecuniary estimation — Under the criterion from Russell vs. Vestil, if the principal action is primarily for the recovery of a sum of money, the claim is capable of pecuniary estimation and jurisdiction depends on the amount claimed. But where the basic issue is something other than the right to recover money, and the money claim is purely incidental to or a consequence of the principal relief, the action is incapable of pecuniary estimation and cognizable exclusively by the RTC. Settled categories include actions for specific performance, support requiring determination of civil status, annulment of lower court decisions, rescission or reformation of contracts, and interpretation of contractual stipulations.
• Jurisdiction by estoppel — A party who actively participates in proceedings, files pleadings, presents evidence, and invokes the court's authority by seeking affirmative relief is estopped from later questioning the court's jurisdiction. The Court applied this doctrine to respondents who, over nine years, filed an Answer with counterclaims, participated in pre-trial, presented a witness, and submitted a compromise agreement for approval.
• Law deemed written into every contract — Although a contract is the law between the parties, the provisions of positive law regulating contracts are deemed written therein and shall limit and govern the relations between the parties. The Court applied this to hold that Section 119 of CA 141 is deemed integrated into the deed of sale even without express stipulation, creating a binding prestation in favor of the free-patent holder.

• "The Court rules that the complaint to redeem a land subject of a free patent is a civil action incapable of pecuniary estimation." — This is the Court's direct ruling on the nature of the repurchase action, establishing the controlling classification for jurisdictional purposes.
• "the re-acquisition of the lots by Bautista or herein successors-in-interests, the present petitioners, is but incidental to and an offshoot of the exercise of the right by the latter to redeem said lots pursuant to Sec. 119 of CA 141. The reconveyance of the title to petitioners is solely dependent on the exercise of such right to repurchase the lots in question and is not the principal or main relief or remedy sought." — This passage articulates the ratio decidendi distinguishing the action from a real action: the principal relief is enforcement of the statutory right, not recovery of title.
• "Having fully participated in all stages of the case, and even invoking the RTC's authority by asking for affirmative reliefs, respondents can no longer assail the jurisdiction of the said trial court." — This states the application of jurisdiction by estoppel, the alternative ground for reversing the RTC dismissal.

• Russell vs. Vestil, G.R. No. 119347, March 17, 1999, 304 SCRA 738 — Controlling authority for the criterion distinguishing actions capable of pecuniary estimation from those incapable of it. The Court applied its test—ascertaining the nature of the principal action or remedy sought—to classify the repurchase action as incapable of pecuniary estimation.
• Heirs of Jose Fernando vs. De Belen, G.R. No. 186366, July 3, 2013, 700 SCRA 556 — Controlling authority for jurisdiction by estoppel. The Court applied its holding that active participation and invocation of the court's authority for affirmative relief bars a party from later questioning jurisdiction.
• Santana vs. Mariñas, No. L-35337, December 27, 1979, 94 SCRA 853 — Cited by respondents for the proposition that the right of repurchase cannot be availed of when land is no longer devoted to agriculture. The Court did not rule on this point as it resolved the case on jurisdictional grounds.
• General Milling Corporation vs. Uytengsu III, G.R. No. 160514, June 30, 2006, 494 SCRA 241 — Cited for the settled rule that jurisdiction is determined by the allegations in the complaint and the character of the relief sought.
• Cosco Philippines Shipping, Inc. vs. Kemper Insurance Company, G.R. No. 179488, April 23, 2012, 670 SCRA 343 — Cited by the RTC for the proposition that a motion to dismiss for lack of jurisdiction may be filed at any stage of the proceedings. The Supreme Court effectively distinguished this by applying the doctrine of jurisdiction by estoppel.

• Section 119, Commonwealth Act No. 141 (Public Land Act) — Provides that every conveyance of land acquired under free patent or homestead provisions shall be subject to repurchase by the applicant, his widow, or legal heirs within five years from the date of conveyance. The Court held that this statutory right is deemed integrated into the deed of sale, creating a binding prestation enforceable through an action for specific performance.
• Section 19, Batas Pambansa Blg. 129 (Judiciary Reorganization Act of 1980) — Grants RTCs exclusive original jurisdiction over civil actions in which the subject of litigation is incapable of pecuniary estimation, and over civil actions involving title to or possession of real property where assessed value exceeds ₱20,000 (₱50,000 in Metro Manila). The Court applied paragraph (1) to hold that the repurchase action, being incapable of pecuniary estimation, falls under RTC jurisdiction.
• Section 33, Batas Pambansa Blg. 129, as amended by Republic Act No. 7691 — Grants MTCs, MCTCs, and MCCCs exclusive original jurisdiction over civil actions involving title to or possession of real property where assessed value does not exceed ₱20,000 (₱50,000 in Metro Manila). The Court found this provision inapplicable because the action was not principally for title or possession but for enforcement of a statutory right.

Peralta, Abad, Mendoza, and Leonen concurred. No separate concurring opinions were written.