Sante vs. Claravall

Where the claim for damages is the main cause of action, or one of the causes of action, the total amount of all damages claimed—regardless of kind, including exemplary damages, attorney's fees, and litigation expenses—shall be considered in determining the jurisdiction of the court.

Petitioners Irene and Reynaldo Sante and respondent Vita N. Kalashian were connected through a criminal matter: Albert Gacusan, respondent's friend and hired personal security guard, was detained at the Natividad, Pangasinan police station as a suspect in the killing of petitioners' close relative. The jurisdictional framework governing the dispute derives from Batas Pambansa Blg. 129 (the Judiciary Reorganization Act of 1980), as amended by Republic Act No. 7691, which expanded the jurisdiction of first-level courts. Periodic adjustments to jurisdictional amounts were effected through Supreme Court Circular No. 21-99 and OCA Circular No. 65-2004, the latter adjusting the MTCC's jurisdictional amount outside Metro Manila to ₱300,000 effective February 22, 2004.

On April 5, 2004, respondent Vita N. Kalashian filed before the Regional Trial Court of Baguio City, Branch 60, a complaint for damages against petitioners Irene and Reynaldo Sante, docketed as Civil Case No. 5794-R. The complaint alleged that while respondent was inside the Police Station of Natividad, Pangasinan, and in the presence of other persons and police officers, petitioner Irene Sante uttered the words, "How many rounds of sex did you have last night with your boss, Bert? You fuckin' bitch!" The word "Bert" referred to Albert Gacusan, respondent's friend and one of her hired personal security guards who was detained at the station as a suspect in the killing of petitioners' close relative. Petitioners also allegedly went around Natividad telling people that respondent was protecting and cuddling the suspects in the killing. Respondent prayed that petitioners be held liable for moral damages in the amount of ₱300,000, exemplary damages of ₱50,000, attorney's fees of ₱50,000, litigation expenses of ₱20,000, and costs of suit.

Petitioners filed a Motion to Dismiss on the ground that the Municipal Trial Court in Cities (MTCC), not the RTC, had jurisdiction over the case. They argued that the claim for moral damages of ₱300,000 was within the MTCC's jurisdictional amount and that the claim for exemplary damages should be excluded in computing the total claim. On June 24, 2004, the trial court denied the motion, citing the ruling in Movers-Baseco Integrated Port Services, Inc. vs. Cyborg Leasing Corporation, and holding that the total claim of ₱420,000 exceeded the jurisdictional amount for MTCCs outside Metro Manila. The trial court reiterated its denial on July 7, 2004 and denied petitioners' motion for reconsideration on July 19, 2004.

Aggrieved, petitioners filed a Petition for Certiorari and Prohibition before the Court of Appeals, docketed as CA-G.R. SP No. 85465. Meanwhile, on July 14, 2004, respondent and her husband filed an Amended Complaint increasing the claim for moral damages from ₱300,000 to ₱1,000,000. Petitioners filed a Motion to Dismiss with Answer ad Cautelam and Counterclaim, but the trial court denied the motion in an Order dated September 17, 2004. Petitioners thereupon filed another Petition for Certiorari and Prohibition before the Court of Appeals, docketed as CA-G.R. SP No. 87563, claiming that the trial court committed grave abuse of discretion in allowing the amendment to increase the moral damages claim for the purpose of conferring jurisdiction. The CA's Seventh Division, in CA-G.R. SP No. 85465, dismissed the case for lack of jurisdiction, excluding exemplary damages from the computation. The CA's Seventeenth Division, in CA-G.R. SP No. 87563, however affirmed the RTC's order, holding that the total aggregate amount demanded constituted the basis of jurisdiction and that the amendment was proper.

• Jurisdictional Amount: Petitioners maintained that the complaint fell under the exclusive jurisdiction of the MTCC, the claim for moral damages of ₱300,000 in the original complaint being the main action and falling within the MTCC's jurisdictional amount.
• Exclusion of Exemplary Damages: Petitioners argued that exemplary damages, being discretionary, should not be included in the computation of the jurisdictional amount, as they are merely incidental to the main claim for moral damages.
• Amendment to Confer Jurisdiction: Petitioners contended that the RTC, having no jurisdiction over the subject matter of the original complaint, acted with grave abuse of discretion in allowing the amendment of the complaint to increase the claim for moral damages from ₱300,000 to ₱1,000,000 for the purpose of conferring jurisdiction, especially during the pendency of a petition for certiorari before the Court of Appeals.

• Totality of Claims: Respondent averred that the nature of her complaint was for recovery of damages, and as such, the totality of the claim for damages—including exemplary damages, attorney's fees, and litigation expenses—should be included in determining jurisdiction.
• RTC Jurisdiction: Respondent argued that the total claim being ₱420,000, the RTC had jurisdiction over the complaint, as this amount exceeded the MTCC's jurisdictional threshold of ₱300,000.

• Jurisdiction: Whether the RTC acquired jurisdiction over the case for damages, given that the total claim including exemplary damages, attorney's fees, and litigation expenses amounted to ₱420,000.
• Amendment of Complaint: Whether the RTC committed grave abuse of discretion in allowing the amendment of the complaint increasing moral damages from ₱300,000 to ₱1,000,000 despite the pendency of a petition for certiorari before the Court of Appeals.

• Jurisdiction: Yes. The RTC had jurisdiction over the case. Where the claim for damages is the main cause of action, the total amount of all damages claimed—regardless of kind—shall be considered in determining jurisdiction. The total claim of ₱420,000 exceeded the MTCC's jurisdictional amount of ₱300,000.
• Amendment of Complaint: No grave abuse of discretion was committed. The RTC had jurisdiction over the original complaint, and the amendment of the complaint was a matter of right under the Rules at the time it was made.

• Jurisdiction: Jurisdiction is conferred by law based on the facts alleged in the complaint, which comprises a concise statement of the ultimate facts constituting the plaintiff's causes of action. Administrative Circular No. 09-94 provides that the exclusion of "damages of whatever kind" in determining the jurisdictional amount under Section 19(8) and Section 33(1) of B.P. Blg. 129, as amended by R.A. No. 7691, applies only where damages are merely incidental to or a consequence of the main cause of action. Where the claim for damages is the main cause of action, or one of the causes of action, the amount of such claim shall be considered in determining jurisdiction. In the present case, the complaint was for recovery of damages for the alleged malicious acts of petitioners; the complaint principally sought moral and exemplary damages, attorney's fees, and litigation expenses. These were not merely incidental to or consequences of a main action but constituted the primary relief prayed for. The total claim of ₱420,000 thus exceeded the MTCC's adjusted jurisdictional amount of ₱300,000, placing the case within the RTC's jurisdiction. This conclusion is supported by Mendoza vs. Soriano, where the total amount of monetary claims including damages was held to be the basis for determining jurisdictional amount, and Iniego vs. Purganan, where the Court held that the claim for all kinds of damages is the basis of determining the jurisdiction of courts.

• Amendment of Complaint: While it is a settled principle that an amendment cannot be allowed when the court has no jurisdiction over the original complaint and the purpose of the amendment is to confer jurisdiction, that principle did not apply here. The RTC had jurisdiction over the original complaint because the total claim of ₱420,000 exceeded the MTCC's jurisdictional amount. Since the RTC had jurisdiction, the amendment of the complaint was a matter of right under Section 2, Rule 10 of the Rules of Court, as no answer had yet been filed at the time of the amendment. The pendency of a petition for certiorari before the Court of Appeals did not preclude the amendment, as the RTC's jurisdiction over the original complaint was properly acquired.

• Totality of Claims Rule (Damages as Main Cause of Action) — Where the claim for damages is the main cause of action, or one of the causes of action, the total amount of all damages claimed—regardless of kind, including exemplary damages, attorney's fees, and litigation expenses—shall be considered in determining the jurisdiction of the court. The exclusion of "damages of whatever kind" from the jurisdictional amount under Section 19(8) of B.P. Blg. 129, as amended by R.A. No. 7691, applies only where damages are merely incidental to or a consequence of the main cause of action. This distinction was articulated in Administrative Circular No. 09-94 and applied in the present case to hold that the RTC had jurisdiction over the complaint for damages totaling ₱420,000.

• Jurisdiction Determined by Allegations in the Complaint — Jurisdiction is conferred by law based on the facts alleged in the complaint, since the latter comprises a concise statement of the ultimate facts constituting the plaintiff's causes of action. The court's jurisdiction is determined by the allegations and the reliefs prayed for, not by the defenses or counterclaims of the opposing party.

• Amendment as a Matter of Right — Under Section 2, Rule 10 of the Rules of Court, a party may amend the pleading once as a matter of right at any time before a responsive pleading is served. An amendment to increase the amount of damages claimed may not be used to confer jurisdiction where the court lacked it over the original complaint, but where the court already had jurisdiction, the amendment is proper.

• "The exclusion of the term 'damages of whatever kind' in determining the jurisdictional amount under Section 19 (8) and Section 33 (1) of B.P. Blg. 129, as amended by R.A. No. 7691, applies to cases where the damages are merely incidental to or a consequence of the main cause of action. However, in cases where the claim for damages is the main cause of action, or one of the causes of action, the amount of such claim shall be considered in determining the jurisdiction of the court." — This passage, quoted from Administrative Circular No. 09-94, articulates the controlling distinction that determines whether damages are included or excluded from the jurisdictional computation, and forms the ratio decidendi of the case.

• "It is clear, based on the allegations of the complaint, that respondent's main action is for damages. Hence, the other forms of damages being claimed by respondent, e.g., exemplary damages, attorney's fees and litigation expenses, are not merely incidental to or consequences of the main action but constitute the primary relief prayed for in the complaint." — This passage applies the Administrative Circular No. 09-94 distinction to the facts of the case, establishing that because the complaint was exclusively for damages, all categories of damages claimed constituted the primary relief and were properly included in the jurisdictional computation.

• "While it is a basic jurisprudential principle that an amendment cannot be allowed when the court has no jurisdiction over the original complaint and the purpose of the amendment is to confer jurisdiction on the court, here, the RTC clearly had jurisdiction over the original complaint and amendment of the complaint was then still a matter of right." — This passage resolves the second issue by distinguishing the general prohibition against amendments to confer jurisdiction from the situation where the court already possesses jurisdiction and the amendment is a matter of right.

• Movers-Baseco Integrated Port Services, Inc. vs. Cyborg Leasing Corporation, G.R. No. 131755, October 25, 1999, 317 SCRA 327 — Cited by the trial court in denying the initial Motion to Dismiss, supporting the proposition that the total claim is the basis for determining jurisdiction.
• Mendoza vs. Soriano, G.R. No. 164012, June 8, 2007, 524 SCRA 260 — Followed. The Court held that where the claim for damages is the main cause of action, the total amount of monetary claims including damages is the basis for determining the jurisdictional amount.
• Iniego vs. Purganan, G.R. No. 166876, March 24, 2006, 485 SCRA 394 — Followed. The Court held that the claim for all kinds of damages is the basis of determining the jurisdiction of courts, whether the claims for damages arise from the same or from different causes of action.
• Nocum vs. Tan, G.R. No. 145022, September 23, 2005, 470 SCRA 639 — Cited for the principle that jurisdiction is conferred by law based on the facts alleged in the complaint.
• Siasoco vs. Court of Appeals, G.R. No. 132753, February 15, 1999, 303 SCRA 186 — Cited for the principle that an amendment cannot be allowed when the court has no jurisdiction over the original complaint and the purpose of the amendment is to confer jurisdiction.

• Section 19(8), Batas Pambansa Blg. 129 (The Judiciary Reorganization Act of 1980), as amended by Republic Act No. 7691 — vests Regional Trial Courts with exclusive original jurisdiction in all other cases where the demand, exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses, and costs, or the value of the property in controversy exceeds ₱100,000 (outside Metro Manila) or ₱200,000 (in Metro Manila). The phrase "damages of whatever kind" was interpreted through Administrative Circular No. 09-94 to exclude only incidental damages from the jurisdictional computation, not damages that constitute the main cause of action.
• Section 5, Republic Act No. 7691 — provides for periodic adjustments of jurisdictional amounts: to ₱200,000 after five years from effectivity, and to ₱300,000 five years thereafter (outside Metro Manila). The second adjustment to ₱300,000 became effective on February 22, 2004 pursuant to OCA Circular No. 65-2004, establishing the MTCC's jurisdictional threshold at the time the complaint was filed.
• Section 2, Rule 10, 1997 Rules of Civil Procedure — allows a party to amend a pleading once as a matter of right at any time before a responsive pleading is served. Applied to uphold the amendment of the complaint increasing moral damages, since no answer had yet been filed and the RTC already had jurisdiction over the original complaint.
• Administrative Circular No. 09-94 — Guidelines in the implementation of R.A. No. 7691, providing the controlling interpretation that the exclusion of "damages of whatever kind" from the jurisdictional amount applies only where damages are incidental to the main cause of action, not where damages is the main cause of action itself.

Chief Justice Reynato S. Puno (Chairperson), Associate Justice Conchita Carpio Morales, Associate Justice Teresita J. Leonardo-De Castro, and Associate Justice Lucas P. Bersamin concurred in the decision.