In a judicial foreclosure suit, which is a real action, the assessed value of the subject property must be alleged in the complaint to determine which court has original jurisdiction; failure to do so is fatal to the plaintiff's cause and warrants dismissal.

Spouses Tomas Libiran and Potenciana Feliciano (Spouses Libiran) obtained several loans from Elisan Credit Corporation (Elisan), secured by a real estate mortgage over a parcel of land. The mortgage contract stipulated that the property would secure not only the initial loan but also all other obligations subsequently incurred. Spouses Libiran allegedly failed to pay their total obligation, including interests and penalties, prompting Elisan to file a complaint for judicial foreclosure.

• On January 8, 2003, Spouses Libiran obtained a loan of PHP 200,000.00 from Elisan, secured by a real estate mortgage over a property covered by TCT No. T-405042 (M). The mortgage contract stipulated it would secure all subsequent obligations.
• On December 9, 2005, Spouses Libiran obtained another loan of PHP 609,000.00 from Elisan, paying only PHP 293,000.00, with unpaid interest from December 5, 2006.
• On March 9, 2006, Spouses Libiran obtained a third loan of PHP 118,000.00, paying only PHP 13,500.00, with unpaid interest from August 7, 2006.
• On June 15, 2006, Spouses Libiran obtained a fourth loan of PHP 474,000.00, paying only PHP 9,120.00, with unpaid interest from June 11, 2007.
• Despite demands, Spouses Libiran failed to pay their total obligation of PHP 885,380.00, plus interests and penalties.
• Elisan filed a complaint for judicial foreclosure with the RTC of Quezon City.
• Spouses Libiran, in their Answer, denied owing Elisan, contended improper venue as the property was in Pandi, Bulacan, claimed they signed blank documents, asserted the property was held in trust for their daughter's paid loan, denied mortgaging the property or appearing before a notary, and alleged falsification of documents.
• The RTC ruled in favor of Elisan, finding Spouses Libiran liable for the loans.
• The CA affirmed the RTC's decision but modified the interest rate to 12% per annum, finding the original 26% plus 2.5% monthly penalty unconscionable.

• The proper venue for a foreclosure action is where the mortgaged property is situated (Pandi, Bulacan), not Quezon City.
• The court lacks jurisdiction because the complaint failed to allege the assessed value of the subject lot.
• Non-payment of the correct docket fee due to the failure to state the assessed value should lead to dismissal for lack of jurisdiction.
• Petitioners did not apply for the loans; the certificate of title was with Elisan as additional security for loans obtained by their son-in-law, Roning Santos, which were already fully paid.
• The mortgage contract is void as an accessory contract because Elisan lacks the license or authority to engage in lending and financing business, as certified by the Securities and Exchange Commission.
• The issue of improper venue was properly raised in their Answer and before the CA.
• The venue stipulation in any promissory note does not apply as they did not sign any, and there is no venue stipulation in the mortgage contract.

• The filing of the case in Quezon City was proper, and Spouses Libiran cannot belatedly challenge the venue after the RTC rendered a decision.
• The determination of the assessed value of the subject property is not necessary for docket fee assessment as a complaint for judicial foreclosure is incapable of pecuniary estimation, thus falling under RTC jurisdiction.
• The bare allegation that Spouses Libiran did not obtain any loan cannot overcome the evidence presented by Elisan.
• The Securities and Exchange Commission issued a decision granting Elisan's appeal, imposing only a fine for operating two unauthorized branches, implying it had authority.

• Whether the RTC of Quezon City has jurisdiction over the complaint for judicial foreclosure of mortgage, considering the failure to allege the assessed value of the mortgaged property.

• Yes, the Petition is meritorious. The RTC of Quezon City did not have jurisdiction.
• A complaint for judicial foreclosure of mortgage is a real action, and jurisdiction over real actions is determined by the assessed value of the property.
• While an action for foreclosure of mortgage is incapable of pecuniary estimation, it is also a real action.
• For real actions, Batas Pambansa Blg. 129, as amended by Republic Act No. 7691, requires that the assessed value of the property be alleged in the complaint to determine whether the RTC or the Municipal Trial Court has jurisdiction.
• Failure to allege the assessed value of the subject property in the complaint is fatal because it prevents determination of which court has jurisdiction and also prevents the correct computation of docket fees.
• The Complaint for judicial foreclosure instituted by Elisan Credit Corporation is dismissed without prejudice to the filing of a separate case in the proper court.

• Jurisdiction over the Subject Matter — This is conferred by law and determined by the allegations in the complaint. It can be raised at any stage of the proceedings. The Court reiterated that for real actions, jurisdiction is determined by the assessed value of the property.
• Real Action — An action affecting title to or possession of real property, or any interest therein. A foreclosure suit is a real action as it is against property and seeks judicial recognition of a property debt and an order for the sale of the res. The Court emphasized that in real actions, the assessed value of the property is crucial for determining jurisdiction.
• Action Incapable of Pecuniary Estimation — An action where the subject of the litigation is not a sum of money or property whose value can be readily determined. While a foreclosure suit is considered incapable of pecuniary estimation, its nature as a real action means the assessed value still dictates jurisdictional thresholds between first and second-level courts.
• Requirement to Allege Assessed Value in Real Actions — In civil actions involving title to, or possession of, real property, or any interest therein, the assessed value of the property must be alleged in the complaint to determine which court (MTC or RTC) has jurisdiction. The Court ruled that failure to allege the assessed value in a judicial foreclosure complaint is a fatal defect warranting dismissal.
• Basis for Docket Fees in Real Actions — The failure to allege the proper valuation (assessed value or fair market value/zonal valuation, whichever is higher) of the real property in litigation is fatal as there will be no basis for the computation of docket fees. The Court cited OCA Circular No. 256-2022 for guidance on computing docket fees in real actions.

• "Therefore, the foreclosure suit is a real action so far as it is against property, and seeks the judicial recognition of a property debt, and an order for the sale of the res."
• "[W]hile civil actions which involve title to, or possession of, real property, or any interest therein, are also incapable of pecuniary estimation as it is not for recovery of money, the court's jurisdiction will be determined by the assessed value of the property involved."
• "From the foregoing, it is clear that in a judicial foreclosure suit, the assessed value of the subject property must be alleged. The failure to do so is fatal to the plaintiff's cause. Otherwise, there is no way to determine which tribunal has original jurisdiction over the case."

• Russell v. Vestil — Cited to establish that an action for foreclosure of mortgage is incapable of pecuniary estimation and thus within RTC jurisdiction, but the Court clarified that Russell also recognized that a foreclosure suit is a real action where assessed value is important for jurisdiction between MTC and RTC.
• Roldan v. Spouses Barrios — Cited to explain that a foreclosure suit is a real action as it is against property and seeks judicial recognition of a property debt and an order for the sale of the res. It also underscored that in real actions, even if incapable of pecuniary estimation, jurisdiction is determined by the assessed value of the property.
• Singsong vs. Isabela Sawmill (as cited in Russell) — Referenced for the criterion in determining if an action is incapable of pecuniary estimation, focusing on the nature of the principal action or remedy sought.
• Salvador v. Patricia, Inc. — Cited for the hornbook doctrine that jurisdiction over the subject matter is conferred by law.
• Padlan v. Dinglasan — Cited for the principle that jurisdiction is determined through the allegations in the complaint.
• Amoguis v. Ballado — Cited for the rule that lack of jurisdiction over the subject matter may be raised at any stage.
• Foronda-Crystal v. Son — Cited for the rule that failure to aver the assessed value of the subject property is a violation of the Judiciary Reorganization Act and gives rise to dismissal.
• Spouses Cruz v. Spouses Cruz (as cited in Foronda-Crystal) — Referenced in support of the dismissal due to failure to allege assessed value.
• Hilario v. Salvador (as cited in Foronda-Crystal) — Referenced in support of the dismissal due to failure to allege assessed value.

• Rule 68 of the Rules of Court — Governs actions for judicial foreclosure of real estate mortgage. Elisan's complaint was filed under this rule.
• Batas Pambansa Blg. 129 (Judiciary Reorganization Act of 1980), Section 19(1) — Provides that Regional Trial Courts have exclusive original jurisdiction in all civil actions in which the subject of the litigation is incapable of pecuniary estimation.
• Batas Pambansa Blg. 129, Section 19(2), as amended by Republic Act No. 7691 — Grants RTCs exclusive original jurisdiction in civil actions involving title to, or possession of, real property where the assessed value exceeds specified amounts (PHP 400,000.00 at the time of the decision, previously PHP 20,000.00 or PHP 50,000.00 in Metro Manila). This section was crucial to the ruling that assessed value must be alleged.
• Batas Pambansa Blg. 129, Section 33(3), as amended by Republic Act No. 7691 — Grants MTCs, METCs, or MCTCs exclusive original jurisdiction in civil actions involving title to, or possession of, real property where the assessed value does not exceed specified amounts. This section, in conjunction with Section 19(2), establishes the jurisdictional divide based on assessed value.
• OCA Circular No. 256-2022 — Cited to highlight the prevailing guidelines in the computation of docket fees in cases involving real actions, emphasizing the need for the fair market value or current zonal valuation (whichever is higher) or the stated value in the initiatory pleading if none.