Spouses Liu vs. Court of Appeals

A petition for certiorari under Rule 65 is not a substitute for a petition for review on certiorari under Rule 45, and an action seeking annulment of deeds but ultimately recovering possession and ownership of real property is an action involving title to or possession of real property, jurisdiction over which is determined by the property's assessed value under Section 19(2) of B.P. 129, as amended by R.A. No. 7691.

Petitioners Spouses Jimmy M. Liu and Emile L. Liu are the registered owners of a parcel of land in Davao City covered by TCT No. T-296879, while private respondent Alvin Cruz claims the same property under an absolute deed of sale purportedly executed by Tek Liong T. Jao as attorney-in-fact. The dispute is governed by the jurisdictional framework under B.P. 129, as amended by R.A. No. 7691, which divides original jurisdiction over civil actions involving title to, or possession of, real property between first- and second-level courts based on the property's assessed value.

Petitioners Spouses Jimmy M. Liu and Emile L. Liu were the registered owners in fee simple of a parcel of land located at Juan Luna Street, Poblacion, Davao City, covered by Transfer Certificate of Title No. T-296879, with an assessed value of P19,840.00 and a market value of P99,200.00. They discovered that their original owner's duplicate copy of TCT No. T-296879 was missing, and they reported the loss to the police authorities, whose investigation was reflected in Police Blotter Entry No. 457 dated March 22, 2005. They executed an Affidavit of Loss and caused its annotation at the dorsal portion of the original certificate of title with the Registry of Land Titles and Deeds of Davao City under Entry No. 246006 inscribed on May 11, 2005.

In the process, petitioners discovered that two entries were also annotated at the dorsal portion of the Original Title: a sham Affidavit of Recovery with Entry No. 294863 and a spurious Special Power of Attorney with Entry No. 294864. They also discovered an annotation with no entry number referring to an Absolute Deed of Sale between private respondent Alvin Cruz and Tek Liong T. Jao showing that the subject property was sold to Cruz for P1,488,000.00. No specimen signatures of petitioners appeared on the deed, which was notarized before a notary public in Davao City. Upon verification with Atty. Remo Flores, Notary Public, he confirmed that his signatures appearing in the Affidavit of Recovery and Special Power of Attorney were forged and that he did not notarize them; he made a written report with Branch 20, RTC, Tacurong City, which approved his notarial commission. Petitioners denied under oath the genuineness of the Affidavit of Recovery and Special Power of Attorney, asserted that they were products of forgeries, and claimed that they did not receive a single centavo from the proceeds of the alleged sale.

The complaint prayed that the Affidavit of Recovery, Special Power of Attorney, and the Sale by Attorney-in-Fact be declared null and void and inexistent; that TCT No. T-413429 in the name of private respondent be cancelled and declared null and void; and that ownership and possession of the subject property be reconveyed or returned to petitioners. In his answer, Cruz denied the allegations and alleged as affirmative defenses that he was a buyer in good faith and a purchaser for value; that it was Jao who offered to him the sale of the subject property; that after inspection of TCT No. T-296879, he noticed annotations or inscriptions of the Affidavit of Loss, Affidavit of Recovery, and Special Power of Attorney purportedly executed by petitioners; and that he was never disturbed in his ownership and possession until the filing of the complaint. He further denied having personal knowledge of the loss of the owner's duplicate copy and of the forged signatures of Atty. Flores, although he asserted that the signatures of Atty. Flores closely resembled the questioned signatures. By way of cross-claim, he averred that reimbursement or refund of the proceeds of the fraudulent transaction was proper and that attorney's and appearance fees, litigation expenses, moral damages, and exemplary damages should be chargeable to Jao and Jerry Liu.

When it was private respondent's turn to present evidence, he filed a motion to dismiss on the ground of lack of jurisdiction considering that the assessed value of the subject property was only P19,840.00. The RTC denied the motion. The CA ruled that since the complaint was one for recovery of possession and title to the property, the assessed value should be examined to determine whether the RTC or the MTC had jurisdiction; that jurisdiction is determined by the averments in the complaint; and that the complaint revealed an assessed value of P19,840.00, which was well within the jurisdiction of the MTC.

• Nature of Action: Petitioners argued that the CA committed grave abuse of discretion amounting to lack or excess of jurisdiction in failing to hold that Civil Case No. 31,986-07 is an action not capable of pecuniary estimation, and that consequently the RTC is properly vested with jurisdiction to hear the case.
• Dismissal and Remand: Petitioners argued that the CA committed grave abuse of discretion in ordering the dismissal of Civil Case No. 31,986-07 for lack of jurisdiction, in effect remanding the proceedings from RTC Branch 17, Davao City, to the first-level court.
• Assessed Value as Jurisdictional Test: Petitioners argued that the CA committed grave abuse of discretion in holding the assessed value of the Juan Luna Street property as determinative of the court's jurisdiction.

• Lack of Jurisdiction: Private respondent moved to dismiss the complaint on the ground that the assessed value of the subject property was only P19,840.00, placing jurisdiction in the MTC rather than the RTC.
• Good Faith Purchaser: Private respondent asserted that he was a buyer in good faith and a purchaser for value; that Jao offered the subject property to him; that after inspecting TCT No. T-296879 he noticed annotations or inscriptions of the Affidavit of Loss, Affidavit of Recovery, and Special Power of Attorney purportedly executed by petitioners; and that he was never disturbed in his ownership and possession until the filing of the complaint.
• Denial of Knowledge of Forgery: Private respondent denied personal knowledge of the loss of the owner's duplicate copy and of the forged signatures of Atty. Flores, though he asserted that the signatures of Atty. Flores closely resembled the questioned signatures.
• Cross-Claim: Private respondent averred that reimbursement or refund of the proceeds of the fraudulent transaction was proper and that attorney's and appearance fees, litigation expenses, moral damages, and exemplary damages should be chargeable to Jao and Jerry Liu.

• Propriety of Rule 65: Whether a petition for certiorari under Rule 65 is the proper remedy to assail the CA Decision and Resolution.
• Nature of Action and Jurisdiction: Whether Civil Case No. 31,986-07 is an action incapable of pecuniary estimation, thereby vesting jurisdiction in the RTC.
• Dismissal and Remand: Whether the CA gravely abused its discretion in ordering the dismissal of Civil Case No. 31,986-07 for lack of jurisdiction and in effect remanding the proceedings to the first-level court.
• Assessed Value as Jurisdictional Test: Whether the CA gravely abused its discretion in holding the assessed value of the Juan Luna Street property as determinative of jurisdiction.

• Propriety of Rule 65: No. A petition for review on certiorari under Rule 45 is the correct remedy from a CA judgment or final order; Rule 65 is proper only when there is no plain, speedy, and adequate remedy, and it cannot substitute for a lost appeal.
• Nature of Action and Jurisdiction: No. The complaint, though seeking annulment of deeds, ultimately seeks recovery of possession and ownership; it is an action involving title to or possession of real property under Section 19(2) of B.P. 129, as amended by R.A. No. 7691.
• Dismissal and Remand: No grave abuse of discretion. The CA correctly ruled that the MTC has jurisdiction because the assessed value of P19,840.00 does not exceed the statutory threshold for first-level courts.
• Assessed Value as Jurisdictional Test: No. The assessed value of the real property is the statutory benchmark for jurisdiction over actions involving title to or possession of real property under Section 19(2) of B.P. 129, as amended by R.A. No. 7691.

• Propriety of Rule 65: The petition was technically flawed. Appeals from judgments or final orders or resolutions of the CA should be by a verified petition for review on certiorari under Rule 45. An aggrieved party is prohibited from assailing a decision or final order of the CA via Rule 65 because this recourse is proper only if the party has no plain, speedy, and adequate remedy in the course of law. Petitioners had an adequate remedy, which was a petition for review on certiorari under Rule 45. In Pasiona, Jr. vs. Court of Appeals, et al., the Court reiterated that where appeal is available to the aggrieved party, the special civil action for certiorari will not be entertained; remedies of appeal and certiorari are mutually exclusive, not alternative or successive; and certiorari cannot substitute a lost appeal, even if the ground is grave abuse of discretion. Because petitioners filed a Rule 65 petition, the period for them to file a Rule 45 petition had already lapsed by the time the instant petition was filed, and the assailed CA Decision and Resolution had already attained finality.

• Nature of Action and Jurisdiction: Substantively, the petition had no merit. The Court reiterated Heirs of Valeriano Concha, Sr. vs. Sps. Lumocso, which held that actions for reconveyance of or for cancellation of title to or to quiet title over real property fall under the classification of cases involving title to, or possession of, real property, or any interest therein. Under the old law, there was no substantial effect on jurisdiction whether a case was one the subject matter of which was incapable of pecuniary estimation under Section 19(1) of B.P. 129 or one involving title to property under Section 19(2). The distinction became crucial with the amendment introduced by R.A. No. 7691 in 1994, which expanded the exclusive original jurisdiction of first-level courts to include all civil actions involving title to, or possession of, real property, or any interest therein where the assessed value does not exceed P20,000.00, or P50,000.00 in Metro Manila. Under the present law, original jurisdiction over such cases under Section 19(2) of B.P. 129 is divided between the first and second level courts, with the assessed value of the real property involved as the benchmark. The CA correctly ruled that the MTC has jurisdiction over petitioners' complaint for accion reivindicatoria and not the RTC. Although the complaint sought to annul the deeds of sale, special power of attorney, and affidavit of recovery, and to declare the title in Cruz's name void, Liu ultimately wanted to recover possession and ownership of the property; the action was really to determine who between Liu and Cruz had a better title. An action involving title to real property means that the plaintiff's cause of action is based on a claim that he owns such property or that he has the legal rights to have exclusive control, possession, enjoyment, or disposition of the same, which was exactly the averment of Liu in his complaint.

• Dismissal and Remand: Because the action involved title to or possession of real property and the assessed value of P19,840.00 was within the exclusive original jurisdiction of the MTC under Section 19(2) of B.P. 129, as amended by R.A. No. 7691, the CA did not gravely abuse its discretion in ordering the dismissal of the case for lack of jurisdiction and in effect remanding it to the first-level court. The RTC lacked jurisdiction over the complaint.

• Assessed Value as Jurisdictional Test: The assessed value is determinative because the statute uses it as the benchmark for first-level court jurisdiction over real property actions. The complaint's averment of an assessed value of P19,840.00 placed the case within the MTC's jurisdiction. The CA correctly examined the assessed value in determining which court had jurisdiction.

• Remedy of Certiorari versus Appeal — A special civil action for certiorari under Rule 65 is proper only if the aggrieved party has no plain, speedy, and adequate remedy in the course of law. Where an appeal is available, certiorari will not be entertained; the remedies of appeal and certiorari are mutually exclusive, not alternative or successive, and certiorari cannot be a substitute for a lost appeal, even if the ground is grave abuse of discretion. In this case, petitioners had an available appeal by petition for review on certiorari under Rule 45, so their Rule 65 petition was a fatal procedural error.

• Jurisdiction over Real Property Actions — Under Section 19(2) of B.P. 129, as amended by R.A. No. 7691, original jurisdiction over civil actions involving title to, or possession of, real property, or any interest therein is divided between the first- and second-level courts based on the assessed value of the real property. The first-level courts have exclusive original jurisdiction where the assessed value does not exceed P20,000.00, or P50,000.00 in Metro Manila; the RTC has jurisdiction where the assessed value exceeds those amounts. The assessed value of P19,840.00 placed the case within the MTC's jurisdiction.

• Action Incapable of Pecuniary Estimation versus Real Property Action — Even if a complaint seeks annulment of deeds, a special power of attorney, and an affidavit of recovery, and seeks to declare a title void, the action is classified as one involving title to or possession of real property if the plaintiff ultimately seeks to recover possession and ownership and to determine who has a better title. The distinction between an action incapable of pecuniary estimation under Section 19(1) of B.P. 129 and an action involving title to property under Section 19(2) became crucial with the amendment introduced by R.A. No. 7691, which made the assessed value the jurisdictional benchmark for the latter class of cases.

• "Settled is the rule that where appeal is available to the aggrieved party, the special civil action for certiorari will not be entertained - remedies of appeal and certiorari are mutually exclusive, not alternative or successive. Hence, certiorari is not and cannot be a substitute for a lost appeal, especially if one's own negligence or error in one's choice of remedy occasioned such loss or lapse. One of the requisites of certiorari is that there be no available appeal or any plain, speedy and adequate remedy. Where an appeal was available, as in this case, certiorari will not prosper, even if the ground therefor is grave abuse of discretion. Petitioner's resort to this Court by Petition for Certiorari was a fatal procedural error, and the instant petition must, therefore, fail." — This passage, quoted from Pasiona, Jr. vs. Court of Appeals, et al., states the procedural ratio decidendi: Rule 65 cannot substitute for an available appeal under Rule 45.

• "Thus, under the present law, original jurisdiction over cases the subject matter of which involves "title to, possession of, real property or any interest therein" under Section 19(2)of B.P. 129 is divided between the first and second level courts, with the assessed value of the real property involved as the benchmark." — This passage, quoted from Heirs of Valeriano Concha, Sr. vs. Sps. Lumocso, defines the jurisdictional rule for real property actions after R.A. No. 7691 and identifies assessed value as the controlling benchmark.

• "An action involving title to real property means that the plaintiffs['] cause of action is based on a claim that he owns such property or that he has the legal rights to have exclusive control, possession, enjoyment, or disposition of the same. Exactly the averment of Liu in his complaint." — This passage, adopted from the CA, defines an action involving title to real property and explains why the complaint was classified as such despite its prayer for annulment of instruments.

• "The CA correctly ruled that it is the MTC that has jurisdiction over petitioners' complaint for accion reivindicatoria and not the RTC." — This is the Court's substantive holding, affirming the CA's jurisdiction ruling.

• Pasiona, Jr. vs. Court of Appeals, et al., 581 Phil. 124 (2008) — Controlling precedent cited for the rule that where appeal is available, certiorari will not be entertained; appeal and certiorari are mutually exclusive, not alternative or successive, and certiorari cannot substitute for a lost appeal even if grave abuse of discretion is alleged.

• Iloilo La Filipina Uycongco Corp. vs. Court of Appeals, 564 Phil. 163 (2007) — Cited in Pasiona for the same rule on the mutual exclusivity of appeal and certiorari and the requirement that there be no available appeal or plain, speedy, and adequate remedy before certiorari may prosper.

• Heirs of Valeriano Concha, Sr. vs. Sps. Lumocso, 564 Phil. 581 (2007) — Controlling precedent cited for the rule that actions for reconveyance, cancellation of title, or quiet title over real property fall under cases involving title to or possession of real property, and that under R.A. No. 7691 the assessed value of the property determines whether jurisdiction belongs to the first- or second-level court.

• Section 19(1), B.P. 129 — Cited in the Court's discussion of the distinction between actions incapable of pecuniary estimation and actions involving title to real property. Under the old law, there was no substantial effect on jurisdiction whether a case fell under Section 19(1) or Section 19(2), but the distinction became crucial after R.A. No. 7691.

• Section 19(2), B.P. 129, as amended by R.A. No. 7691 — Provides the jurisdictional benchmark for civil actions involving title to, or possession of, real property, or any interest therein. The first-level courts have exclusive original jurisdiction where the assessed value does not exceed P20,000.00, or P50,000.00 in Metro Manila. The assessed value of P19,840.00 placed the case within the MTC's jurisdiction.

• Rule 45, Rules of Court — The proper remedy for appeals from judgments or final orders or resolutions of the CA is a verified petition for review on certiorari. Petitioners had this remedy available but did not use it.

• Rule 65, Rules of Court — A special civil action for certiorari is proper only if there is no plain, speedy, and adequate remedy in the course of law. It cannot substitute for an appeal, and petitioners' resort to it was a fatal procedural error.

Perlas-Bernabe, S.A.J. (Chairperson), and Hernando, J., concurred. Delos Santos, J., was on official leave; Baltazar-Padilla, J., was on leave.